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DQ1 May I Call You? Congress enacted a restriction on telemarketing, known as the National Do-Not-Call list, which made it illegal for telemarketers to place unsolicited

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DQ1 May I Call You?

Congress enacted a restriction on telemarketing, known as the National Do-Not-Call list, which made it illegal for telemarketers to place unsolicited commercial calls to consumers. A consumer may register up to three residential phone numbers for the list. The Act does not prohibit calls from political campaigns and others seeking support for political candidates, nor calls from certain charities seeking donations. The Act provides for significant financial penalties imposed by the Federal Communications Commission on any telemarketer or company that violates the law. Some telemarketer organizations claim that the law is unconstitutional.

Congress also enacted the CAN SPAM Act, prohibiting certain kinds of spam e-mail nationwide. The CAN SPAM Act also states that, “This act supersedes any statute, regulation or rule of a state that expressly regulates the use of electronic mail to send commercial messages, except to the extent that the state rule prohibits deception in any portion of a commercial electronic mail message or information attached thereto.” Subsequently, California enacted a new anti-SPAM law that applies to spam e-mail either sent from a server in California or sent to a California e-mail address.

What constitutional law issues do these statutes raise, and who should prevail? How, specifically, should the courts resolve these constitutional issues according to the current state of the law? What substantial government interest is Congress attempting to protect with the National DNC List? Where is that found in U.S. Constitution? What other strategies could the government employ to reach the same result?

DQ2 A Sobering Lawsuit

Fun Products, Inc. is in the business of designing computer games. At the end of a particularly successful year, company management decided to throw a celebration party at which it would announce large bonuses for the entire workforce. The party was held in the banquet room of a local hotel, owned by the Milton Hotel chain, and was catered by the hotel, including an open bar for all guests. Employees were also invited to bring a spouse or significant other. A good time was had by all, but too much fun was had by a few, including Larry Lush, and his wife, Linda. Larry and Linda had attended other company functions at which alcohol was served, and had a reputation for drinking a bit too much.

The company offered a free taxi ride home to any employee who had a bit too much to drink, but Larry and Linda declined the free cab ride, and attempted to drive home in their own car. En route, Larry, who was driving, struck another vehicle, injuring Veronica, the driver of that car. Larry has limited assets, and his insurance had just expired, as well as his driver’s license. Veronica wants to sue Fun Products, Inc. and the Milton Hotel chain for her injuries, which include medical bills, lost wages, property repair costs (her car), and pain and suffering. She also wants to obtain a court order prohibiting Fun Products, Inc. from ever serving alcohol at a company function again.

Without trying to decide who will win if Veronica sues Fun Products, Inc. and the Milton Hotel chain, analyze the following. Who are the parties to this lawsuit, and what are they called (trial level and appeal level)? What types of law will Veronica’s lawsuit involve? What type of remedies is she seeking, and are these remedies (or some of them) appropriate to this type of case? What legal sources will the court consider in deciding if Fun Products, Inc. and the Milton Hotel chain (or either of them) are liable for Veronica’s injuries? What types of liability does Larry face as a result of this scenario? What burden of proof will apply? What issues in this dispute would a jury decide (if the case went to trial), and what issues would a judge decide? What if the person(s) with liability here doesn’t have the money to pay Veronica’s damages?

Week 2 discussion

DQ1 Wendy Wanderer

Derek Dirt operates a home-based business selling herbs and supplements. He frequently receives new samples and is constantly discarding unwanted samples, as well as packaging, old files, and other junk on a back yard trash heap that accumulates between trash pick-ups. Little Wendy Wanderer, age five, who lives next door, sees what, to her, promises to be a nice toy among Derek’s trash. Upon coming closer to the trash heap, Wendy is bitten by a rat. She screams and then faints. Her nearby mother calls an ambulance, which, on the way to the scene, jumps a curb and strikes Paul Pedestrian, seriously injuring him. Wendy requires a series of rabies shots. Except for some bad dreams, Wendy apparently recovers. Derek and Wendy are both citizens and residents of Ohio. Paul, who is a citizen and resident of Texas, was visiting friends in Ohio when the ambulance struck him.

Does Wendy have a solid basis for suing Derek for her injuries?

Who might be liable to Paul Pedestrian?

What types of damages could Wendy recover?

If Wendy sues Derek, in what state(s) could she sue, and in what court (federal or state) could she properly file the suit?

If Paul sues Derek, in what state(s) could he sue, and in what court (federal or state) could he properly file the suit?

DQ2 Bad Bar-B-Q

Over many years, Jake and Jo Bob built up a barbeque ribs business, Hambones, Inc., which caters picnics and parties and sells ribs and corn at county fairs. They have several creditors, including Sauce Supply and First State Bank.

Two years ago, in reliance on an audit of the company’s books prepared by Hambones, Inc.’s accounting firm, Able & Henderson, First State Bank made a loan to Hambones, Inc. It now appears that the audit failed to disclose financial improprieties in Hambones, Inc.’s maintenance of its books: Certain liabilities were being carried off the books, causing Hambones, Inc.’s bottom line to appear more favorable than it really was. The decision to carry the liabilities off the books was made by Jake and Jo Bob, but there is now an argument as to whether a more careful audit would have uncovered the liabilities. Jake told the accounting firm that the audit was being done at the bank’s request in order for the loan to be approved, and that it was really important that the company receive a clean bill of health from the audit. Able & Henderson didn’t want to lose Hambones, Inc. as a client.

Sauce Supply also knew that Hambones, Inc. had been audited and heard from Jake and Jo Bob that the auditors were very satisfied with Hambones, Inc.’s financial position. Jake gave Sauce Supply’s president, Sandy Saucy, a copy of the audit report. Able & Henderson had no knowledge of these statements, or that Sauce Supply had received a copy of the audit report.

What standard of care applies to Able & Henderson’s accounting work for Hambones, Inc.?

Does Able & Henderson face any negligence liability to First State Bank or Sauce Supply in a state that has adopted the Ultramares rule?

In a state that has adopted the Restatement rule?

In a state that has adopted the Reasonably Foreseeable User rule?

Week 3 discussion

DQ1 Fine Dining

You enter an expensive restaurant and are seated by the hostess. A waiter brings you plates, knives, forks, napkins, and other set-ups for dinner, including bread and butter and ice water, all of which you partly consume. When you read the menu, you realize that the prices far exceed what you can afford. You then make it clear that you do not intend to order a meal.

What type of contract (obligation) do you have, if any?

What factors and contractual elements will you consider in assessing whether a contract was formed?

What if, instead, you read the menu and place an order, but say nothing about agreement to pay. Is there a contract?

Also, assume there is fine print at the bottom of the menu that states: 20% gratuity charged. $20.00 cover charge per table.

If you ordered dinner but didn’t see the fine print, what is the effect?

Does this change in the facts alter your conclusion regarding the scenario above? Why or why not?

What key factors and elements are at play?

DQ2 Distant Deal Making

Maria, who lives in Seattle, sent Koji a letter via first class mail, stating, “Koji, I think your 2003 Ford SUV is worth $20,000. I will give you $20,000 cash for it.” Koji receives the letter, but believes his car isn’t worth more than $14,000 due to the manner in which he drives the vehicle and due to the weather in Florida where he resides.

Maria’s letter was mailed on Monday. When she didn’t hear from Koji by Wednesday, she sent an e-mail on Wednesday afternoon with the same message, and asked whether he received her letter. Koji received Maria’s letter on Wednesday, but did not receive the e-mail until Friday afternoon, due to server problems. In the meantime, Koji sent a fax late on Friday stating, “Are you sure you still want to buy my car for $20,000? I accept your offer.”

On Saturday, after some research, Maria decided the Ford SUV was not worth what she thought. To make certain Koji would know this fact, she sent Koji a letter via Federal Express stating, “Your SUV is not really worth $20,000.” On Monday morning, Koji received the Federal Express letter from Maria. Also on Monday morning, an hour later, Maria received Koji’s fax at work.

Has a contract been formed here? Why or why not?

Identify and explain the stages of contract formation as they occurred in this scenario and analyze them in this context from a contract formation standpoint.

Week 4 discussion

DQ1 Dream House

In a contract dated June 15, 2006, Bobby agrees to build your dream house on a lot you own near Naples, Florida. The contract price is $500,000. The house is to be completed and ready for occupancy by March 1, 2007. Bobby is paid a progress payment of $100,000, for labor and materials, in October, 2006. In November, 2006, a hurricane strikes the Naples area and floods the work site. Bobby claims he had completed 50% of the job before the hurricane struck. Thereafter, Bobby performs no further work and walks off the job.

On January 1, 2007, you declare Bobby to be in breach of contract and sign a contract with Sheila to complete the job for $350,000.

Was your contract with Bobby a unilateral or bilateral contract; if unilateral, at what time did Bobby substantially undertake performance?

What remedies and/or damages are available to you and to Bobby?

Since Sheila’s cost to complete the house is more than half the cost, who sees a loss from the hurricane?

DQ2 Nightmare House

After months of combing the real estate ads for a vacation property, you find an ad for a lovely Victorian cottage in a scenic small town about three hours away. After viewing the house, you decide it is the perfect weekend place; and amazingly, the price is in your budget. In fact, you’re amazed that the house is so affordable and has been on the market for a while. You sign a real estate purchase contract to buy the house from the current owners, who have lived there for over 20 years. You make the sale contingent upon an inspection of the property by a licensed construction engineer. The engineer inspects the house over the course of two days and gives the house a clean bill of health. You proceed to closing, and buy the house.

After moving in, you learn for the first time from the neighbors that many actively claim this house is possessed by poltergeists, which the prior residents of the house had reportedly seen. In fact, the house is listed in a national guide to haunted houses, and had previously been included in a walking tour of the town as the haunted house. A newspaper article once described it as a charming Victorian (with ghost). You now jump at every creak and noise the house makes. You want the seller of the house to take it back for failing to inform you that the house is haunted.

Do you have a good basis for rescinding the sale?

What duties will you claim were owed to you by the seller?

What responsibilities did you have as a buyer that may affect your ability to recover?

What damages can you claim stem from the alleged failure to disclose by the seller?

Week 5 discussion

DQ1 Battle of the Forms

Initial Text:Nellie Nimble, purchasing manager for Fast Color Paint Company, mailed a purchase order to AB Can Corporation for 100,000 cans of high-gloss white paint at $15 per gallon wholesale. The order form mailed by Nellie contained 17 printed conditions on its reverse side. The third condition stated: “Buyer may reject any defective goods within 30 days of delivery.”

The order form also stated that payment would be made as follows: 50% upon receipt of the goods, and 50% within 30 days of the receipt of goods. AB Can (the seller) sent a signed letter confirming the order, but the letter stated: “Any objection to goods shipped must be in writing within five (5) days of receipt of goods.” AB Can’s letter specified the same payment schedule as Fast Color’s purchase order, but stated, in addition, “Interest at the rate of 12% per year will be charged on late payments.” Fast Color’s purchase order said nothing about interest on late payments.

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