Applying traditional principles of corporation law to close corporations.

1. Discuss the challenges in applying traditional principles of corporation law to close corporations.
2. Rene enters into an agreement with Lindenwood Casino Supply in which Lindenwood agrees to purchase resin poker chips from Rene for three cents per chip. Lindenwood is purchasing the poker chips for one of its casino customers. Rene and Lindenwood discuss various prices based upon the quantity of chips to be purchased. Lindenwood suggests to Rene that its casino customers are among the largest in the country, but it is uncertain of the exact quantity of poker chips it will need to purchase because it had not finalized its latest orders with its casino customers. The agreement between Rene and Lindenwood contains no terms relating to quantity. Lindenwood submits an order for only 30,000 chips. Rene says it will deliver the 30,000 chips, but not for less than twenty cents per chip stating that the negotiated price of three cents per chip was based upon an expected purchase of at least 500,000 poker chips. Rene says if Lindenwood does not agree, then she in not obligated to deliver any poker chips. Lindenwood demands delivery of 30,000 chips at the cost of three cents per chip. Is there an agreement? Explain your answer.
3. Lindenwood Guardians, a consumer advocate group, has raised concerns about the ATM fees charged by the banks in St. Louis. Lindenwood has produced a report showing that the banks in St. Louis have the same ATM fees. Moreover, the report alleges that the ATM fees charges by all of the St. Louis banks appear to increase and decrease in the same amount within a day of any increase or decrease by any individual bank. Lindenwood seeks your advice about bringing a civil anti-trust claim against the St. Louis banks for price fixing in violation of Section 1 of the Sherman Anti-trust Act. What is your advice?
4. After winning $21,000,000 in the state lottery, Bettina is pursued by friends and colleagues who have asked her to invest in their business enterprises. Bettina is interested in investing some of her lottery winnings but does not want to risk losing all of her winnings in a business venture. Bettina has very little knowledge about business or business organizations. Bettina asks you to advise her on how she should approach these requests. What advice can you give her on how to invest some of her lottery winnings, but protect winnings she does not invest?
5. Lindsey is an exclusive fashion designer and has entered into a contract with Maria to provide Maria’s boutique with 30 designer gowns. After Lindsey designed the patterns for the various gowns and purchased the material needed to make the gowns, Maria cancels her order with Lindsey. What remedy does Lindsey have against Maria for breach of contract?
6. Margot plans to open a boutique on Main Street where she will offer the latest in cutting edge fashion for a young affluent clientele. Margot hires Samir to handle various business matters for the boutique, including obtaining a lease and arranging financing. Samir signs a 36 month lease Windows on Main Street. Samir signed the lease on behalf of “Margot’s Fashion, Inc.”, the name of Margot’s company. Margot’s boutique is not doing well and does not pay the rent. When Margot’s Fashions, Inc. goes out of business, Windows on Main Street demands that Samir pay the unpaid rent. Margot’s Fashion, Inc. was not incorporated until 6 days after the Samir signed the lease with Windows on Main Street. But, after incorporation, Margot Fashion’s Inc. ratified the lease with Windows on Main Street. Explain the legal rights each of the parties has to each other.
7. Joey, Chandler and Ross were general partners in a café doing business as The Perch. The partnership became indebted to Lindenwood Coffee in the amount of $120,000 for espresso coffee makers and bean grinders and related coffee supplies purchased from Lindenwood Coffee. Joey withdrew as partner under the terms of the Partnership Agreement and left the partnership to pursue an acting career. Chandler and Ross continued to operate the café for another year, and then dissolved the partnership. Lindenwood Coffee sues the former partnership, as well as Joey, to recover the price of equipment supplied to the café before Joey withdrew. Joey claims that he is not liable on the $120,00 debt because at the time he withdrew as partner, the partnership had sufficient assets to pay all of its partnership debts in full. Is Joey liable to Lindenwood Coffee? State the reasons for your answer.
8. Martin is employed as a security officer for Lindenwood Discount Mall. The mall operator provides security services for its patrons in the mall shopping and in designated mall parking areas. Martin is accused of sexually assaulting Olivia, a mall patron, in an alley behind a bar located about three blocks south of the designated mall parking. Martin had been off duty from the mall for about one hour at the time of the assault and had followed Olivia to the bar when she left the mall. Martin was wearing his mall security uniform when he assaulted Olivia, who filed a lawsuit seeking damages against Martin and Lindenwood Discount Mall. Discuss the merits of Olivia’s claim against the mall.
9. Lindenwood Builders is a residential contractor who builds expensive luxury custom homes in St. Charles County. Bruno is a licensed electrician who Lindenwood has hired to perform all of the electrical work and wiring on Lindenwood’s homes. One of the homes that was being built by Lindenwood caught fire and burned to the ground due to faulty wiring installed by Bruno. The construction of the home was only partially completed at the time of the fire. As a result of the fire, the buyer backed out of the purchase of the home. Lindenwood lost supplies and materials valued at $180,000 in the fire. Lindenwood also claims that it suffered $650,000 in lost profits on the sale. Bruno offers to pay Lindenwood $180,000 in lost supplies and materials Lindenwood demands payment of $650,000 as damages under the contract. What amount of damages is Lindenwood entitled to receive if it can prove Bruno’s faulty wiring caused the fire? Explain.
10. Bradley manufactures computer chips at his factory in Baltimore, Maryland. Bradley entered into a sales contract with Dell to sell Dell 1,500,000 microchips for use in Dell’s all-in-one personal computer. Dell’s assembly plant is in Dallas, Texas. The contract is FOB Baltimore. The contract states that requires the microchips shall be delivered by April 24, 2019 and that time is of the essence. Dell did not receive the microchips at its Dallas assembly plant until May 29, 2019. When the microchips arrive, Dell refuses the delivery. Dell contends that the late delivery constitutes a material breach of contract releasing it from any obligations to Bradley under the contract. Bradley seeks your legal advice. Does Bradley have a claim for payment?
11. Elizabeth James is an exclusive fashion designer. James has entered into a contract with Maria wherein Maria acts as a sales agent to sell James’s designer gowns and accessories to upscale boutiques in high fashion markets. Maria earns a commission of 4% on her sales. Maria enters into negotiations with the renowned bridal boutique Kleinfeld’s in Manhattan for their purchase of 100 designer wedding dresses from James. The contract is valued at $1,400,000. Maria had been working on the Kleinfeld’s deal for 3 months when her agency contract was terminated by James under terms of the agency agreement which gave each party the right to terminate the agreement at any time by giving 10 days notice. James gave Maria the required notice. Six months after Maria’s termination, Elizabeth James signed a contract to sell Kleinfeld’s 100 designer wedding dresses under similar terms that Maria had previously negotiated with Kleinfeld’s. When Maria learns of the Kleinfeld contract, she demands that James pay her the 4% commission on the sale. James refuses. Maria comes to you for legal advice. How strong is Maria’s claim? Explain.
12. Explain the consequence, if any, of being a secured creditor in a Chapter 7 bankruptcy proceeding.
13. Marsha Brady worked as an over-the-road truck driver for Lindenwood Transport. Marsha was paired with a male driver named Tony. On one trip Tony opened the cab’s curtain and exposed himself while Marsha was driving. Upset, she told him to get dressed and quit doing that type of thing. On at least five other occasions over a two-week period, Tony leaned over Marsha in his underwear, at least once with his genitals exposed. On one trip that had a mandatory 24-hour stop, when Marsha and Tony arrived at the motel where they were staying, Tony asked Marsha to sleep with him. When she refused, Tony became aggressively angry, verbally degraded Marsha and forcibly took away her keys and cell phone. Marsha told her friend and co-worker George about Tony’s conduct and asked what she should do. George told Marsha that Tony was a jerk, but that she should just ignore him and just do her job. Tony continued to expose himself and make sexually suggestive remarks to Marsha while they were driving together. Marsha became frustrated and quit her job because she could not tolerate Tony’s conduct any longer. Marsha comes to you for advice on her rights to sue Lindenwood Transport under Title VII of the Civil Rights Act. What is your advice?
14. Porky’s Pigs is the largest producer of bacon in the United States. Porky’s and the next five largest producers of bacon control 62% of the wholesale bacon market in the United States. These six bacon producers are convicted of anti-trust violations under the Sherman Act by fixing the price of bacon sold to major meat wholesalers in the United States. The wholesale price of bacon increased 120% during the period of the price fixing conspiracy. Lindenwood Markets has paid substantially higher prices for the bacon it purchased from its meat wholesalers during the period of the price fixing conspiracy because the meat wholesalers passed on the increased costs of bacon to their customers. Lindenwood claims that it paid $20 million more for bacon during the period of the price fixing conspiracy as a direct result of the conspiracy, and files a civil claim for treble damages against Porky’s under Section One of the Sherman Antitrust Act. Discuss the merits of Lindenwood’s claim.
15. Finn engaged Naomi, a business broker, to sell their country general store. Naomi represented to buyer Mike that Finn’s business was “a typical general store,” selling gas, oil, hardware, dry goods, beer and groceries. Naomi told Mike that Finn’s business had an annual gross income of over $1.5 million. But Naomi did not tell Mike that one-third of the general store’s profit was attributable to an accompanying lawn and garden equipment distributorship that was not included in the sale of the general store. When Mike visited the business, Naomi directed him away from the garage area where the lawn and garden equipment was stored. Throughout all of the negotiations, Finn was unaware of Naomi’s misrepresentations. After purchasing the general store business from Finn, Mike learned of the importance of the equipment sales to the business and demanded Finn either return one third of the amount Mike paid for the business or Mike would sue to rescind the sales contract. Is Finn liable for Naomi’s misrepresentation?

Short Essays: (10 points each)

1. Lindenwood Tractors is a full-service commercial tractor and trailer mechanical service provider. Lindenwood performs mobile mechanic services for customers. Max is an experienced mechanic who has worked for Lindenwood as a mobile tractor and trailer mechanic for 12 years. Max works primarily at Lindenwood’s garage but sometimes makes road calls to provide mechanical services to over the road commercial truckers. When he began his employment with Lindenwood, Max signed a non-competition agreement in which he agreed not to engage in any employment similar to his or her role at Lindenwood, or have a direct or indirect relationship with, or provide consulting services to, any business providing competing services within the St. Louis, Missouri metropolitan area for a period of 2 years. Max received a job offer from a Maryville Tractors, a competing full-service commercial tractor and trailer mechanical service provider also doing business in the St Louis metropolitan area. Maryville will pay Max $6.00 more an hour than he earns at Lindenwood. Max wants to quit his job at Lindenwood and go to work as a mechanic at Maryville. Lindenwood learns of Maryville’s offer and threatens to sue Max for violation of the non-compete agreement if he goes to work for Maryville. Max seeks your advice as to the enforceability of the non-compete agreement he signed with Lindenwood. What is your advice?
2. Lindenwood DataTech provides IT support for professional businesses. Lindenwood’s major clients are physicians’ offices and law firms. As employees of Lindenwood, Adrienne and Martin were highly successful analysts and performed most of the in-field tech support for Lindenwood. Through the years, Adrienne and Martin developed very strong relationships with most of the in-house IT contacts of Lindenwood’s clients. While working at Lindenwood DataTech, Adrienne and Martin decide to open their own competing IT support business. While still employed with Lindenwood, they drew up business plans for their new company, looked for office space, interviewed prospective employees, and formed an LLC. Adrienne and Martin left the employ of Lindenwood formed an A&M LLC, an IT services company which would directly compete with Lindenwood. While working for A&M LLC, Adrienne and Martin aggressively pursued the clients with whom they had built a relationship while working at Lindenwood DataTech. Within 6 months, Lindenwood DataTech lost 6 of its largest clients, which accounted for 70% of its revenue, to A&M LLC. Lindenwood DataTech filed a lawsuit against Adrienne and Martin alleging that they violated their duty of loyalty to Lindenwood and were unlawfully competing with Lindenwood, their former employer. Adrienne and Martin file a motion to dismiss Lindenwood’s lawsuit and argue that Lindenwood has no legal basis to challenge their business activity. What claim, if any, does Lindenwood DataTech have against Adrienne and Martin? Explain your answer. What additional information would you need, if any, to more fully evaluate the merits of Lindenwood’s claim?
3. Martha Lee began working as a truck delivery driver for Lindenwood Transport in 1997. In 2017, Martha suffered multiple back injuries and underwent a second knee replacement that required ongoing physical restrictions. Because of her ongoing physical condition, Martha requested disability accommodations from Lindenwood under the Americans with Disabilities Act (ADA). Specifically, Martha requested that she be not be required to work more than eight hours a day, or be placed in a less physically demanding position with limited lift requirements. Martha submitted a physician’s statement explaining her physical limitations. Lindenwood told Martha that there were no full-time truck driver positions available with the lifting restrictions that Martha was able to perform, but told Martha that it would notify her if any position became available. Lindenwood offered Martha a job as a package-car driver position, which met her lifting restrictions. But one of the essential requirements of that package-car driver job was being able to work overtime hours. Martha stated that she could not work any overtime given her physical condition. Lindenwood had no jobs available that met Martha’s work restrictions. Martha quit her job at Lindenwood and filed a lawsuit against Lindenwood seeking damages for its violation of the ADA. Lindenwood challenges Martha’s lawsuit, and argues that it fully complied with the requirements of the ADA. Discuss the merits of Martha’s claim and the factors the court will use to analyze Martha’ s claim and Lindenwood’s defenses to Martha’s claim.

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