Serena Hofstadt is a Massachusetts-based professional freelance editor who has a wide variety of clients, including individuals and businesses.

BUSI 506 –LEGAL AND ETHICAL ENVIRONMENT

FINAL EXAMINATION

Please read the questions carefully. If there are multiple parts to the question, be sure to Answer Each Part. Please give complete answers using complete sentences and good English. Please write clearly. The point values for each question are noted at the end of the question. Please make sure your name is on your answers. Upon completion, please post your answers in the Final Examination Dropbox in D2L before 11:59 pm CDT on Saturday, April 26, 2025. The Dropbox will be closed after that time, and the exam will not be accepted.

QUESTION 1

Serena Hofstadt is a Massachusetts-based professional freelance editor who has a wide variety of clients, including individuals and businesses. One of her clients is a medical association based in Atlanta, Georgia, that publishes a monthly journal; as an independent contractor, Hofstadt edits all of the journal articles, which are complex and require solid knowledge of medical terms and the association's journal style.

Hofstadt has lately been inundated with work from several different clients, all of which have tight deadlines. As a result of her heavy workload, she decided to subcontract the work on last month's medical journal articles to a less-experienced friend.

The journal's editor calls Hofstadt one afternoon and reprimands her for the poor work on the previous batch of articles. Hofstadt reluctantly divulges that she did not do the work herself, and that instead another editor performed the work.

Did Hofstadt breach her duties as an agent to the principal in this case? Explain your answer. (10 Points)

BUSI 506 – LEGAL AND ETHICAL ENVIRONMENT

FINAL EXAMINATION – 2

QUESTION 2

DeShaun, who is a bit eccentric, is fed up with the way a certain employer in his town treats employees and decides to sue on behalf of all those employees. DeShaun also says that he is going to start his case at the appellate court level, skipping over all those "lesser" judges. DeShaun says that those justices will surely hear him out and that he will also seek a jury.

Will an appellate court hear DeShaun’s case? Can DeShaun act as a plaintiff for those employees? Please explain. (15 Points)

BUSI 506 – LEGAL AND ETHICAL ENVIRONMENT

FINAL EXAMINATION – 3

QUESTION 3

Lena, who was angry with her business law teacher, Dominick, because of a hard test, angrily watched him come into the restaurant where she worked as a server. She noticed that he had on his new designer suit, the one he wore when he wanted to impress the chancellor. Lena completely lost her temper, threw a drink on Dominick, and then reached across the table and punched him in the eye. The police were called. Dominick says that he wants both Lena and the owner of the restaurant, Aaliyah, arrested.

Assuming that Lena committed the crimes of assault and battery, is Aaliyah also criminally responsible? Is Aaliyah liable for any damages or injuries to Dominick? Please explain. (25 Points)

BUSI 506 – LEGAL AND ETHICAL ENVIRONMENT

FINAL EXAMINATION – 4

QUESTION 4

Sarah is the president of a company that makes small parts for the automotive industry. Customers are primarily auto manufacturers. Sarah's cousin, Farid, works at the company as a sales representative. A promotion to the sales manager position is open. Farid has applied and so has Lisa, another sales representative. While both Farid and Lisa are good employees, they are skilled in different areas. Lisa is great with technology and with placing orders. She does an excellent job in following through with ordering problems. Farid, on the other hand, is better with customer relations, and customers seem to like him better. Sarah would like to promote Farid, but she has two concerns. Her first concern is she does not want it to be perceived that she is being unfair because Farid is family. Her second concern is she suspects that some customers are prejudiced against Lisa because she is female. Most customers are male, and Sarah suspects that they may give Farid more consideration than Lisa.

What should Sarah do? What would be your recommendation for how she should handle the situation? Please explain. (20 Points)

BUSI 506 – LEGAL AND ETHICAL ENVIRONMENT

FINAL EXAMINATION – 5

QUESTION 5

Rock star Byron Haddon's manager wanted to create some buzz about Haddon's new album, Wingmaster. He decided to hire a videographer to follow Haddon around for a couple of days while two videos were being shot for the album, thinking they would release the behind-the-scenes video on YouTube just before the videos came out.

The videographer, Lori Breck, shows up, and Haddon's manager tells her that the video she shoots will be the property of Haddon's production company, and that he will send a nondisclosure agreement via email after the shoot is complete. Breck agrees.

Three hours into the shoot, with Breck's camera trained on him, Haddon receives a text from Samantha Virdo, a young and very popular actor he has been dating. In the text, Virdo tells Haddon she never wants to see him again. He flies into a rage, and in a ten-minute rant, he divulges intimate details of their relationship, Virdo's ongoing relationships with other celebrities (some of whom are married), and Virdo's drug use. As Haddon's manager tries to calm him down, Breck slips away.

Breck sells the video to a website that specializes in embarrassing celebrity videos. A gig that would have earned her $800 for the two-day shoot is suddenly a $50,000 windfall. Haddon's production company files suit against Breck, stating that it is the true owner of the video, and that an oral contract existed between Breck and the production company.

Will the production company prevail? Please explain. (20 Points)

BUSI 506 – LEGAL AND ETHICAL ENVIRONMENT

FINAL EXAMINATION – 6

QUESTION 6

Tom Garrity, Bill Simmons, and Edward Yang were close friends. On several occasions, Edward expressed his interest in a particular stereo receiver Tom owned, the classic Marantz Model 4400. Edward often told Tom that if he ever wanted to sell the receiver, he would like to be first considered as the buyer. Last Saturday morning, Tom and Bill were at Tom’s house. During their conversation, Tom stated “Bill, I know how much Edward loves my Marantz 4400 receiver, and I have too much stereo equipment in the house. I have decided that I will sell my Marantz 4400 to Edward for $200. It is worth at least $600, and it is the only Marantz receiver that I own.” Later that day, Edward appeared at Tom’s house. Edward enthusiastically proclaimed “Tom, Bill told me about your offer, and I will take the Marantz 4400 for $200. This is the classic receiver as far as I am concerned, and I am forever grateful to you! I promise I will take care of it, and you can have lifetime visitation rights!” Tom was perplexed. After his conversation with Bill on Saturday morning, he had decided to keep the Marantz 4400 and sell all of his other receivers. “Edward, I am sorry, but I have decided not to sell the Marantz 4400. We can discuss selling any of my other receivers, but the Marantz is ‘off-limits’.” Edward’s reply? “We have an agreement, Tom. You made me an offer, and I accepted your offer. Here is the $200. Where is the receiver?” Is there a contract between Tom Garrity and Edward Yang? Does Edward have a claim? Please explain. (20 Points)

BUSI 506 – LEGAL AND ETHICAL ENVIRONMENT

FINAL EXAMINATION – 7

QUESTION 7

The law firm of Poe, Patterson and Henderson, a general partnership, represents 20 plaintiffs in a class-action product liability lawsuit, with trial scheduled to begin Monday of next week. It will be the biggest trial in the history of the firm, and the partners understand that success will depend, for the most part, on a collaborative effort on the part of all professionals at the firm, including partners, associate attorneys, paralegals, and secretarial staff. It is the Friday before the trial, and there will be no weekend for those working at Poe, Patterson, and Henderson. The partners and the associate attorneys are reviewing depositions in the conference room. The clock on the wall shows 11:00 p.m. Partner Henderson turns to a first-year associate, J. Benjamin Fotheringham, and says “Ben, how about going to Donovan’s Delicatessen and picking up a few subs for all of us? Here’s $100.” Donovan’s Delicatessen is a favorite of the firm for “late-night” trial preparation sustenance, and is located approximately two miles away, down Chestnut Avenue. Eager to make a positive impression on senior partner Henderson, and ready to escape the “tunnel-vision” brought on by twelve hours of deposition review, Ben heads for his car. In a rush to complete the “deli run” quickly, Ben accelerates his car to 50 miles per hour. The posted speed limit on Chestnut Avenue is 35 miles per hour. Fidgeting with his compact disc player in order to listen to an audio-recorded deposition, Ben inadvertently crosses the center line and collides with an oncoming automobile operated by Brandi Kernigan. Ms. Kernigan is severely injured, and experiences $22,000 in medical expenses; her $25,000 Volkswagen is a total loss. She sues Fotheringham individually, and the law firm partnership of Poe, Patterson, and Henderson. Kernigan also lists Poe, Patterson, and Henderson as individual defendants. Is the law firm of Poe, Patterson, and Henderson liable for Brandi Kernigan’s injuries? Are Poe, Patterson, and Henderson individually liable for Kernigan’s injuries? (25 Points)

BUSI 506 – LEGAL AND ETHICAL ENVIRONMENT

FINAL EXAMINATION – 8

QUESTION 8

Maximillian Snell is having a very bad Monday at his “pre-owned” car dealership, Maximillian Motors. Snell is having a difficult time attracting and retaining an effective and reliable sales staff; in fact, not a single salesperson has appeared for work on Monday. The only employee who does shows up for work that day is his secretary of three years, Daisy Martinez, whose responsibilities include processing “tax, title and tag” paperwork after the sale.

Business is slow that Monday, with only two “window shoppers” appearing on the lot from 8:00 a.m. to 2:00 p.m. Famished, and eager to try out the new Italian restaurant down the street, Snell instructs Martinez to tell any prospective customers he will return at 3:30 p.m. When Snell returns at 3:30, he asks Martinez whether any potential customers visited the lot in his absence. Daisy beams with pride, and says “why yes, Max, there was a young couple who came by right after you left. They wanted to buy that red BMW sedan on the front row, and I knew business was slow, so I went ahead and sold it to them. The contract is here on my desk. Aren’t you proud of me?!” Curious, Maximillian examines the contract. It describes the red BMW sedan, and includes the signatures of both purchasers, as well as Daisy’s signature (indicating “Daisy Martinez, for Maximillian Motors.”) The contract price is $21,000. Maximillian’s face reddens as he heads for the car inventory purchase price records on his computer. Computer records reflect that he purchased the car at auction last Wednesday for $28,000, and that his established retail price for the car was $31,000. When he confronts Daisy with the facts, she bursts into tears, saying “please boss, don’t fire me, I’ve made a terrible mistake!” Daisy is inconsolable, but that is irrelevant to Snell; he is not exactly in the mood for consoling. Through her tears, Daisy indicates that the couple will return at 5:30 p.m. to take possession and ownership of the car; they have gone to their bank to retain the $21,000. Is Snell legally obligated to sell the car to the couple? From an ethical standpoint, should the couple agree to pay at least Snell’s cost for the car ($28,000?) (20 Points)

BUSI 506 – LEGAL AND ETHICAL ENVIRONMENT

FINAL EXAMINATION – 9

QUESTION 9

When Sylvia Wood talks, people listen. As a talk-show host with her own nationally syndicated television program, "The Sylvia Show," Wood reaches approximately thirty million viewers each week. Her dedicated viewers are collectively referred to as "Sylvia's Militia," and most wait breathlessly for Wood's on-air blessings of products, people, and books.

One of her recent programs has Wood in hot water. Wood devoted her September 30 episode to a food-borne illness commonly referred to as "crazy chicken" disease. During the past two years, approximately fifty people in the United States have developed physical symptoms after eating undercooked, diseased chicken. Apparently, chickens have developed the disease after eating substandard feed, and consumers have been affected down the food chain. Common symptoms include muscle contractions, nausea, and diarrhea. During the September 30 episode of "The Sylvia Show," Wood interviewed a medical doctor, Dr. Tyson Fowler, who said that in his opinion, chicken was not safe for human consumption. In response, Wood had said "Dr. Fowler, if that is the case, I will never eat chicken again." Hearing of this episode, the United Poultry Growers Association sued Wood and "The Sylvia Show," claiming commercial disparagement (the commercial equivalent of defamation.)

Are the defendants Wood and "The Sylvia Show" liable for commercial disparagement? (20 Points)

BUSI 506 – LEGAL AND ETHICAL ENVIRONMENT

FINAL EXAMINATION – 10

QUESTION 10

Rosalba, a resident of New Mexico, claims that Pet Food Company Inc., put out some dog food that made her dog, Champ, sick. Champ is a prize-winning poodle. He survived the pet food fiasco only after traveling to a veterinarian in Florida specializing in poodles and only because he had two very expensive surgeries. Additionally, his ability to sire has been impaired, and Rosalba will earn no more breeding fees from Champ. Her damages are $100,000. Pet Food Company Inc. is incorporated in Delaware, with its principal place of business in New Mexico.

Rosalba asks you whether she can sue in federal court. What would you tell her and why? Please explain. (20 Points)

BUSI 506 – LEGAL AND ETHICAL ENVIRONMENT

FINAL EXAMINATION – 11

QUESTION 11

Gavin and Abby worked for Mega Grocery, a chain of grocery stores. Gavin was a manager, and Abby was a cashier. Gavin was angry with Abby because she would not go on a date with him. Mega Grocery set up, maintained, and allowed employees to use an online forum to post suggestions and complaints. Gavin and some other employees posted derogatory comments regarding Abby, criticized her for refusing to go out with Gavin, and poked fun at her appearance. Abby complained to Mega Grocery's human resource manager who told her that the forum was open to all employees, that Mega Grocery had a policy of not interfering, and that Abby should just post a reply.

What is the responsibility of Mega Grocery in this situation? What possible action or actions could Abby take with regard to this situation. What do you ethically believe the law should be in this area? Please explain. (25 Points)

BUSI 506 – LEGAL AND ETHICAL ENVIRONMENT

FINAL EXAMINATION – 12

QUESTION 12

Sally signs a contract to roof a house for Bob. After doing his research, Bob chooses Sally based on her great reputation for being conscientious and doing good work. Bob knows little about roofing and stays away from all the noise involved. Sally provides her own tools for herself and other workers, sets her own schedule, and charges a flat rate of $10,000 to be paid when the job is completed. Sally hires Trudy, Glen, and Fred to help with the roofing. She pays them an hourly rate, supervises their work, provides them with tools and materials, and sets their schedules. Curious about what is going on there, Bob's friend Spencer walks by the house while the roofing is being done. Glen absent-mindedly throws some old shingles off the roof and hits Spencer in the head resulting in his going to the local emergency room and receiving a couple of stitches in his scalp.

Spencer decides to sue all the roofers, Glen, Trudy, and Fred, and also Bob and Sally for his hospital expenses and for pain and suffering. What is the basis for Spencer’s suit? What would be needed to be shown for Spencer to win his suit? Of all the people sued by spencer, who, if anyone, would be liable for the injuries to Spencer? Do Trudy, Glen, Fred, Sally, or Bob have any defenses? What is the most likely result in a lawsuit against brought by Spencer? Please explain. (20 Points)

BUSI 506 – LEGAL AND ETHICAL ENVIRONMENT

FINAL EXAMINATION – 13

QUESTION 13

Ollie’s BBQ is a family-owned restaurant located on a state highway in Georgia, 11 blocks from an interstate highway. The restaurant does not allow African Americans to eat inside; they must get takeout. More than half of the food serviced in the restaurant had passed through interstate commerce. According to the Civil Rights Act of 1964, the Federal government has the right to prohibit racial discrimination in hotels, restaurants, places of public accommodation, and other public facilities because local activities have a substantial effect on interstate commerce. The owner of Ollie’s BBQ argues that his business is local and has no impact on interstate commerce.

Is Ollie’s BBQ violating the law? Would your answer be different if Ollie’s were claiming that it was against their religion? Which argument will win? Please explain. (10 Points)

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BUSI 506 –LEGAL AND ETHICAL ENVIRONMENT 

MID-TERM QUIZ

Please  read  the questions carefully. There are nine (9) questions. If there are multiple parts to the question, be sure to  Answer Each Part. Please give complete answers using complete sentences and good English. Please write clearly. The point values for each question are noted at the end of the question.  Please make sure your name is on your answers.  Upon completion, please post your answers in the Mid-Term Examination Dropbox in D2L on or before 11:59 pm CDT on Monday, April ,, 2025. The Dropbox will be closed after that time, and the exam will not be accepted.

QUESTION 1

On Thursday, Trista receives a letter from Charlie in which he offers to sell her a diamond ring. The letter states: “if you choose to accept, you must do so prior to 2:00 p.m. tomorrow.” Trista had a telegram of acceptance dispatched before 2:00 p.m. on Friday. The telegram is delivered to Charlie's home at 2:15 p.m. Do Trista and Charlie have a contract? If yes, please explain why. If no, also give your reasons. (15 Points)

Trista and Charlie do have a contract. According to the Mailbox Rule, accepting an offer becomes effective when dispatched unless such acceptance is distinguished rather than when received. Trista sent her telegram of acceptance before 2:00 p.m. on Friday, which satisfies the condition of the offer by Charlie that the acceptance must happen before 2:00 p.m. on that day. The timing of the dispatch, not the timing of the delivery, goes towards the contract's validity under the Mailbox Rule. The outcome might have been different if Charlie had explicitly required that the acceptance be received by 2:00 p.m. (e.g., must reach me by 2:00 p.m.). Although the rule is in place, the contract is valid.

QUESTION 2

Ashley wants to sue Joe because her friend Mary was hurt by Joe, and Ashley wants to be awarded money to give to Mary. Mary is currently incurring medical bills to treat her injuries and wants to focus on trying to get better, rather than suing. Can Ashley sue Joe on behalf of Mary? Please explain. (10 Points)

Ashley cannot sue Joe on Mary’s behalf unless she has the legal standing or the authorization to do so. To bring a lawsuit on behalf of another person, a lawsuit, a person can only get a lawsuit for another person in legal terms if they have the legal right to do so, say, via power of attorney, as the legal guardian, or as a personal representative of the injured party. Ashley does not, per se, automatically have the ability to represent Mary in a lawsuit unless Mary has given her the ability to do so. Ashley may feel inclined to sue on behalf of her friend, but the legal principle of "standing" dictates that this lawsuit should end up being pursued by the direct victim of the discrimination, Mary, unless she is legally unable to file the lawsuit. For Mary to sue, she must file it herself or appoint someone else to do so on her behalf.

BUSI 506 – LEGAL AND ETHICAL ENVIRONMENT

MID-TERM EXAMINATION – 2

QUESTION 3

Aiden, who just started at his new job as an assistant manager at a fast-food restaurant, wants to make a good impression. He thinks that things are going well. On only the second day on the job, however, he sees his manager, Debbie, slink out of the restaurant with a big box of hamburgers. She puts them in her car and speeds away. Aiden is fairly certain that Debbie did not pay for the hamburgers. Aiden asks your advice what he should do. What possible actions does Aiden have? What might be the results or consequences of each possible action? What is your advice? Please explain. (25 Points)

Aiden has several possible actions to take:

1. Report the Incident to Higher Management or Authorities: Aiden could report what he witnessed to his supervisor or a relevant authority. This would ensure the theft is addressed and prevent future occurrences. Consequences might include disciplinary actions for Debbie but could also damage Aiden’s relationship with her, possibly leading to workplace tension or retaliation. However, this is the most ethical action.

2. Confront Debbie Directly: Aiden could speak to Debbie about what he saw. This approach may clear up any misunderstanding but could also lead to an uncomfortable or hostile work environment, especially if Debbie denies the theft.

3. Do Nothing: Aiden could ignore the situation, which would be unethical. Allowing theft to continue could harm the business, and Aiden might later be seen as complicit.

I advise Aiden to report the situation to the relevant authority, such as his supervisor or law enforcement agency, to address the ethical and legal implications properly.

QUESTION 4 

Peter Mallory and James Reid were widely considered by their peers and by the community-at-large the very best officers the San Bernardino, California Police Department had to offer. Today, they were seeking to uphold that reputation. After weeks of tracking Malcolm Leary, a suspect in last year's gruesome murder of 32-year-old Rachel Vang, they had located and detained Leary pursuant to a validly issued arrest warrant. On their way back to headquarters in the squad car, with Mallory and Reid silent, Leary offers up a confession from the back seat, saying "I killed that witch because she deserved it, and if I have to spend the rest of my life in prison and eternity in hell for doing it, it was worth it!" Both Mallory and Reid are shocked that Leary "broke" so easily, but they are happy to have the confession.

Prior to his declaration of murder, neither Mallory nor Reid had "Mirandized" Leary. Will Malcolm Leary's statement be admissible in his criminal prosecution, or will it be inadmissible based on a violation of the due process standard set forth in  Miranda v. Arizona? Ethically what are Mallory and Reid supposed to do? Have they “violated” an ethical standard by not giving the  Miranda warnings? What is their obligation to their department, the people of California, and to the justice system? (15 Points)

Mallory and Reid’s failure to Mirandize the defendant before he confesses to them will likely render Leary’s statement inadmissible in his criminal prosecution. Under the Miranda v. Arizona decision, a confession obtained when a suspect was not advised of their rights (the right to remain silent and the right to an attorney) is generally inadmissible in Arizona's court. Mallory and Reid’s failure to give the suspects Miranda warnings is an ethical violation of standards. The basic job was to ensure that suspects know, or at least are aware, of their rights, and by not doing so, the justice system's fairness was compromised. This oversight affects the department, the people of California, and the justice system.

BUSI 506 – LEGAL AND ETHICAL ENVIRONMENT

MID-TERM EXAMINATION – 3

QUESTION 5

Cooper sues Acme Trucking in state court in South Carolina, where he lives, for negligence alleging personal injury and property damage totaling $100,000 after a truck driven by an employee of Acme Trucking rear-ended his pickup truck. Acme Trucking is incorporated in Delaware, has its headquarters in New York, but does a substantial amount of business in South Carolina. Claiming diversity of citizenship, Acme Trucking seeks removal (transfer) of the case to federal district court, but Cooper opposes the motion.  Can Acme Trucking have the case removed (transferred) to Federal court? If yes, what is the reason? If the answer is no, what is the reason? Please explain. (15 Points)

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