Farmer Joe Andrews, who owned 350 acres of farm land, was approached b

Farmer Joe Andrews, who owned 350 acres of farm land, was approached b

MGMT 520 Final Exam Answers (All answered)



1.(TCO A & F) Farmer Joe Andrews, who owned 350 acres of farm land, was approached by Ajax Oil Company that offered to buy the front 30 acres of his land, which bordered on a four-lane highway, so they could build a gasoline station. Ajax Oil asked Mr. Andrews if he had complete ownership of the land, and he assured them he did. The two parties negotiated on the price and terms of the land sale for several days and finally agreed on a price of $60,000 for the 30 acres and Mr. Andrews signed a Quit Claim Deed transferring ownership to Ajax Oil. Ajax Oil developed the land and built the gasoline station with a typical small grocery store, and a car wash. The gasoline station functioned well for the next eight years, and was very profitable. The State Highway Department contacted Ajax Oil, and told them the state had acquired the right to take the land 30 years ago for expansion of the highway through a Special Warranty Deed from farmer James Barnes, who had owned and operated the farm before Joe Andrews. The issue quickly goes to court with the State Highway Department, Ajax Oil, farmer Joe Andrews, and farmer Barnes’ Heirs, all parties to the legal activity. What issues are involved here in regard transfer of right to land? Who do you think will prevail? (Points : 30)



Question 2. 2.(TCO I) In 1977, following the disclosure of Gulf Oil Corporation’s $4,000,000 payment to the President of South Korea, and other oil companies questionable payments in foreign countries, the U.S. Congress enacted the “Foreign Corrupt Practices Act (FCPA)”. State specifically what was the original prohibition under the FCPA (one or two sentences). Over the years, the FCPA has been amended to expand the prohibitions. Itemize and define these additional restrictions, i.e. Define Excess Gifts, Elaborate Travel, “Grease Payments”. (30 Points) (Points : 30)




Question 3. 3.(TCO C) A teenage worker in a fast food hamburger store was operating the french-fry machine. As normal, the grease was bubbling as the fresh cut potatoes were inserted to be fried. The young worker dropped his ballpoint pen into the boiling grease. He reached into the grease quickly to recover his pen, thinking he could get the pen out without being burned. He was off course badly burned on his wrist and hand. Does the young fast food worker have a claim against the french-fry machine manufacturer for Product Liability? Should the fast food store manager be held liable for the young worker’s injuries? (Points : 30)




Question 4. 4.(TCO D) Frequently business people, or just any individual, fail to realize the importance of contracts in their daily lives. Many casual agreements in our day-to-day lives are actually enforceable as contracts in a court of law; a 25 page written and notarized agreement is not always required. To demonstrate the importance of contracts, please begin by listing and defining the four required elements of a contract needed for enforcing it in court. The enforcement of contracts then leads to the next question of whether a contract is enforceable under the Common Law, or under the Uniform Commercial Code? Define this issue. 
As a final segment of this question, please define the following contract terms:

·         Void

·         Voidable

·         Quasi Contract

·         Executory Contract

·         Executed Contract

·         Mail Box Rule

(Points : 30)




Question 5. 5.(TCO E) Mr. Andy Gray had been injured in a car accident 5 years ago that left him paralyzed from the waist down, and confined to a wheelchair. Mr. Gray had been a skilled electronic technician for many years prior to his injury. After 5 years of living off the damage payments he received from the auto accident and Disabled Social Security, Mr. Gray decided to go back to work. He applied to XYZ Computer Company for a job assembling their product. The problem was that XYZ relied on an assembly line to produce their product, and Mr. Gray could not access or stand at the assembly line to work on producing the computers. XYZ declined to hire Mr. Gray. Mr. Gray then filed a law suit, claiming that under the 1990 Americans With Disability Act, XYZ should be forced to abandon the assembly line operation and assemble the computers at individual cubicle work sites where someone in a wheel chair could work. The computer company’s lawyer rejected this request, noting that abandonment of the assembly line would cost the company $175,000,000 to restructure, and increase their computer production cost by 30%. So, as the Judge in this case, how will you rule? What options do you have in this case? (Points : 30)




Question 6. 6.(TCO G) The Federal Government’s prosecution and eventual dissolution of the Standard Oil Trust under the 1890 Sherman Act before the Supreme Court in 1911 was the dominate example of antirust litigation in this country for almost 100 years. The only other Federal attack on a business as a dominate Monopoly to approach the importance of the Standard Oil Trust case was the United States v. Microsoft Corporation case, which was originally filed in 1999 by President Bill Clinton and his Attorney General Janet Reno. The Microsoft Case was resolved at the U.S. Circuit Court of Appeals in 2001 by President George W. Bush and Attorney General John Ashcroft. What was the basis, Federal Statute, for the original complaint against Microsoft? What was the basis of the specific complaint the Federal Government filed against Microsoft? What was the final result of the case, and the lasting impact on the software/computer industry? (Points : 30)




Question 7. 7.(TCO H) In today’s business world in the United States, four alternate forms of business organizations tend to dominate our commercial activities:

·         Sole Proprietorship (DBA);

·         General Partnerships;

·         Public Corporation (Inc.); and

·         Limited Liability Company (LLC)

List, compare, and discuss the factors that one considers in selecting one of these types of business organizations to form in starting a business. (30 Points) (Points : 30)




Question 8. 8.(TCO A, E, F) After Justin graduated from college, he was hired by one of the largest ad agencies in the city. His first assignment involves working on the Budget Burger account. Budget Burger is owned by the daughter of the president of the ad agency (Mr. Johnson) and has three locations throughout the city. Justin’s assignment was to design T-shirts with a catchy slogan to be handed out for free at all Budget Burger locations to celebrate the grand opening of Budget Burger’s fourth location. The T-shirts said “Done your way!” Due to a lack of time, the normal approval process was skipped and the T-shirts were printed and rushed to the Budget Burger locations. Over two thousand T-shirts were handed out the day of the grand opening. The president of the ad agency doesn’t have a chance to see the T-shirts until the end of the day when he notices the customers wearing them. He is furious because their largest account is Burger King and fires Justin on the spot, and calls the head of the legal department to set up an emergency meeting. (Part 1) Identify and apply an ethical theory from chapter 8 of our text that you think the ad agency should have applied to this situation with Justin. What should the ad agency do next based upon your analysis? (Part 2) Identify and apply a theory of employment law the ad agency could use to justify firing Justin. Do you think it would be successful? Why or why not? (Part 3) Identify and apply an intellectual property law theory Burger King could use if it decided to sue the ad agency. Would the theory you chose be successful? Why or why not?(Points : 40)
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