IT 4723 LAW

 

Name ____Bradley Shedd_____________________________

 

For the business cases – write AS COMPLETE an answer as possible.  For each case study, you will answer the CASE QUESTIONS at the end of the case.  Be sure to answer EACH question carefully.

 

1.  page 253 – Joc Oil USA, Inc v Consolidated Edison Co of New York, Inc

            Should the law recognize the right to cure a defective tender of goods? Why or why not? The law should not recognize the right to cure a defective tender of goods. The goods could be food stricken with Ecoli virus and the seller would try to cure the food and the buyer would get sued for selling the cured food. I suppose that Consolidated Edison was expecting to deal with an oil company that sold them exactly what they agreed to buy. Joc Oil should have made sure their manufacturing process was sending the correct oil to buyers with .50 percent sulfur.

            Did Con Ed act ethically in this case? Did Joc Oil? Consolidated Edison did not act ethically in this case because they rejected Joc Oil’s treated shipment that would’ve arrived in two weeks anyway. Now, they have no oil at all. Joc Oil didn’t act ethically either because they should have checked the shipment before it left to go to Con Ed. However, Joc Oil offered to treat the oil and I am sure that this happens to people all the time. Oil does have a shelf life and the oil could have picked up sulfur in the storage tanks somehow.

            Why do you think Con Ed rejected Joc Oil's offer to cure the defect in delivery? Explain. There are two sides to that sword actually. Consolidated Edison wanted oil that was half oil and half sulfur based. They perhaps rejected the oil because they figured the shipment arriving in two weeks would be filled with sulfur too. On the other side, Con Ed could have their containers for oil leaking oxidized sulfur into the oil it holds. They tried to make it look like Joc Oil sent sulfured oil but it was Con Ed’s containers lined with sulfur. Joc Oil had every right to treat the oil but Con Ed thought they were in the right.

2.  Page 284 Nowak v Faberge USA, Inc.

            Should the law recognize a failure to warn on a basis of imposing strict liability on manufacturers and sellers of products? Why or why not? It is not the law’s responsibility to inspect each and every product being sold in local stores for potential harm to humans. This is the manufactures responsibility to be ethical and to not dispense anything that could harm humans without the proper warning labels.

            Did Faberge violate its duty of social responsibility in this case? Explain. Yes, Faberge should have a testing plan developed to inspect all products being manufactured. Faberge did have the proper English printed on the hairspray bottle. However, butane is flammable and should have been labeled with a red colored diamond with a  fire flame in it to symbolize ‘flammable’.

            Do you think this case was decided properly? What else could Faberge have done to avoid liability? Yes, this case was judged properly. Nowak should have read the contexts of the hair spray because it says do not puncture and Nowak opened it with a can opener! Faberge should have copied the label for a butane can that has the flammable symbol on it and placed it on the Aqua Net spray.

           

 

3.  Page 304 EJ Gallo Winery V Spider Webs Ltd

            Should Congress have enacted the ACPA? Is it really consumers who are being protected? Yes, Congress should have enacted the Anticybersquatting Consumer Protection Act because the defendants used a famous name and acted in bad faith. Yes, consumers are being protected. Like in this particular case, ernestand juliogallo.com could have led the consumer to believe they were buying some great wine and would’ve been shipped something else instead. Consumers look for brand names and the ACPA protect the consumers.        

            Did the defendants act ethically in registering so many Internet domain names? What was the defendant’s motive? No, the defendants did not act in good faith of registering the domain name ernestandjuliogallo.com because it is a well know name. The Gallo name is famous and the defendants registered it in bad faith, therefore Congress enacted the ACPA. The defendant’s motive was selling domain names and not everybody is looking for a domain name. So, Spider Webs used ernestandjuliogallo.com to send the 500 million plus people looking for wine to be directed to registering for domain names.

            How valuable is a company’s trademark name? Does that ACPA protect that value? Explain. A company’s trademark name is worth more than millions perhaps billions of dollars. A company’s name is their reputation to help provide for consumers. ACPA does a great job at protecting trademark names because Congress uses the ACPA act if a domain name is registered with a famous name and registered in bad faith.

 

Short Answer:

 

4.  List and describe the seller’s remedies for the buyer’s break of a sales contract.

            Right to Withhold Delivery- Delivery of goods may be withheld if the seller or lessor discovers that the buyer or lessee is insolvent before the goods are delivered. Demand payment in cash. If the seller or lessor discovers that the buyer or lessee is insolvent, he or she may refuse to deliver the goods unless they are paid with cash.

            Right to Stop Delivery of Goods in Transit If the goods are in transit or in the bailee’s possession, the seller or lessor may stop delivery (1) of a carload or truck or plane load of goods if the buyer repudiates the contract, fails to make a payment when due or otherwise breaches the contract (2) of any size shipment if the buyer becomes insolvent.

            Right to Reclaim GoodsA seller may reclaim goods in the possession of the buyer if (1) the goods are delivered in a credit sale and the seller then discovers that the buyer was insolvent. (2) The buyer misrepresented his or her solvency in writing within three months before delivery or paid for goods in a cash sale with a check that bounces.

            Right to Dispose of Goods If a buyer breaches the sales contract before the seller has delivered the goods, the seller may resell the goods and recover damages from the buyer. Damages are calculated as the difference between the disposition price or rent and the original contract price or rent.

            Right to Recover the Purchase or Rent If the buyer accepts the goods but fails to pay for them when the contract price or rent is due, the seller may sue to recover the contracted-for purchase price rent from the buyer.

            Payment – Duty to pay. Goods that are accepted by the buyer must be paid for in accordance with the terms of the sales or lease contract. Unless otherwise agreed, payment or rent is due when and where the goods are delivered.

            Acceptance – Acceptance occurs when the buyer or lessee takes one of the following actions: (1) Signifies in words or by conduct that the goods are conforming or that the goods will be taken or retained despite their nonconformity. (2) Fails to reject the goods within a reasonable time after their delivery by the seller or lessor. (3) Acts inconsistently with the seller’s ownership rights in the goods. Buyers and lessees may only accept delivery of a commercial unit.

5.  List and describe the buyer’s remedies for the seller’s breach of a sales contract

            Seller or Lessor Refuses to Deliver the Goods or Delivers Nonconforming Goods the Lessee Does Not Want – (1) Reject nonconforming goods. If the goods or the seller’s tender of the delivery fails to conform to the sales or lease contract in any way, the buyer may reject the whole, accept the whole or accept any commercial unit and reject the rest. (2) Revoke acceptance of nonconforming goods. A buyer who has accepted goods may subsequently revoke their acceptance if the goods are nonconforming, the nonconformity substantially impairs the value of the goods to the buyer and one of the following factors is shown: (a) The seller’s promise to reasonably cure the nonconformity is not met. (b) The goods were accepted before the nonconformity was discovered and the nonconformity was difficult to discover. (c) The goods were accepted before the nonconformity was discovered and the seller assured the buyer that the goods were conforming. (3) Cover; If the seller fails to make delivery of goods or repudiates a sales or lease contract or if the buyer rightfully rejects the goods or justifiably revokes their acceptance, the buyer may cover by purchasing or renting substitute goods from another party. The buyer may recover from the seller damages calculated as the difference between the cost of cover and the original contract price or rent. (4) Sue for breach of contract and recover damages. If a seller fails to deliver the goods or repudiates the sales or lease contract or if the buyer rightfully rejects the goods or justifiably revokes acceptance of the goods. The buyer is discharged from any further obligations under the canceled contract.

            Seller of Lessor Tenders Nonconforming Goods and the Buyer Accepts Them

(1)Sue for damages. If a buyer accepts nonconforming goods from a seller, the buyer may recover as damages any loss resulting from the seller’s breach. (2) Replevy the goods. A buyer may recover scarce goods from a seller who is wrongfully withholding them. (3)Recover the goods from an insolvent seller or lessor. If the buyer makes a partial or full payment for the goods before they are received and the seller becomes insolvent within 10 days after receiving the first payment, the buyer may recover the goods from the seller.

            Unconscionable Sales and Lease Contracts – If a sales or lease contract or any clause in it is unconscionable, the court may either refuse to enforce the contract or limit the application of the unconscionable clause.

 

 

6.  What is place of delivery?  What are shipment contracts and destination contracts?

            Place of Delivery – The parties may agree in the sales or lease contract as to the place of deliver the goods will arrive. If there is no agreement in the contract as to place of delivery, the following UCC rules apply: (a) Noncarrier cases; the place of delivery is the seller’s place of business, unless the seller has no place of business, in which case the place of delivery is the seller’s residence.

            Shipment Contracts – A shipment contract that requires the seller to send goods to the buyer by carrier. Delivery occurs when the seller puts the goods in the carrier’s possession.

            Destination Contracts – A destination contract is a sales contract that requires the seller to deliver the goods in the buyer’s place of business or other destination. Delivery occurs when the goods reach this destination.

 

7.  Describe express warranties and implied warranties of merchantability and fitness for a particular purpose.

            Express Warranties – Which are the oldest form of warranty, are created when a seller affirms that the goods they are selling meet certain standards of equality, performance, or condition. Express warranties can be written, oral, or inferred from the seller’s conduct. Express warranties are created when the seller indicates that the goods will conform to: (1) All affirmations of fact or promise made about them. (2) Any description of them. (3) Any model or sample of them.

            Implied Warranty of Fitness for a Particular Purpose – The UCC contains an implied warranty of fitness for a particular purpose. This implied warranty is breached if the goods do not meet the buyer’s expressed needs. The warranty applies to both merchant and non-merchant sellers. The warranty of fitness for a particular purpose is implied at the time of contracting if (1) the seller has reason to know the particular purpose for which the buyer is purchasing the goods or the lessee is leasing the goods. (2) The seller makes a statement that the goods will serve this purpose. (3) The buyer relies on the seller’s skill and judgment and purchases or leases the goods. 

 

8.  Define doctrine of strict liability and identify what are defects in manufacture, design, packaging, failure to warn, and failure to provide adequate instructions.

            Doctrine of strict liability – A tort doctrine that makes manufacturers, distributors, wholesalers, retailers, and others in the chain of distribution of a defective product liable for the damages caused by the defect irrespective of fault.

            Defect in Manufacture – a defect that occurs when the manufacturer fails to (1) properly assemble a product (2) properly test a product (3) adequately check the quality of the product.

            Defect in DesignA defect that occurs when a product is improperly designed. Such as toys with removable parts that can be swallowed by children.

            Defect in Packaging – A defect that occurs when a product has been placed in packaging that is insufficiently tamperproof. Like containers that have been tampered with or drugs without child safety caps.

            Failure to Warn – This is a defect that occurs when a manufacturer does not place a warning on the packaging of products that could cause injury; if the danger is unknown. Like when an oxygen tank is missing a flammable label.

            Failure to Provide Adequate Instructions – A defect that occurs when a manufacturer does not provide detailed information for safe assembly of a product. Like when a person crawls under a jacked up vehicle to change the oil.

 

9.  Explain in detail the coverage of consumer product safety acts. (CPSA)

            Consumer Product Safety Act (CPSA) – This federal statue regulates the safety of consumer products. It created the Consumer Product Safety Commission. The Consumer Product Safety Commission (CPSC) is a federal administrative agency that is empowered to: (1) Interpret and enforce the Consumer Product Safety Act (CPSA)

(2) Conduct research on safety. (3) Collect data regarding injuries. Alternatively the CPSC can seek injunctions, bring actions to seize hazardous consumer products, seek civil penalties for knowing and violations of the act or of CPSA rules, and seek criminal penalties for knowing violations of the act or of CPSC rules. A private party can sue for an injunction to prevent violations of the act or of CPSC rules and regulations. Certain consumer products can, including motor vehicles, boats, aircraft, and firearms, are regulated by other government agencies.

 

10.  Describe free-speech protection granted to the Internet by the US Supreme court.

            In 1996 Congress enacted the Computer Decency Act which made it a felony to knowingly make indecent materials available on computer systems, including the internet, to persons under the age of 18. The Supreme Court agreed and held that the act was unconstitutional violation of free speech rights. The Supreme Court concluded that the Internet allows an individual to reach an audience of millions at almost no cost, setting it apart from TV, radio, and print media. The court declared emphatically that the Internet deserves the highest possible level of First Amendment free speech protection. Filtering and blocking software are available to protect children from seeing or reading obscene subjects such as pornography or profanity.

 

11.  Describe the process for obtaining internet domain names and process for arbitrating internet domain name disputes

            Domain names are registered by filing the appropriate form with a domain name regulation service and paying the appropriate fee. The Anticybersquatting Consumer Protection Act is a federal statute permitting the court to issue cease-and-desist orders and injunctions and to award monetary damages against anyone whom has registered a domain name (1) of a famous name (2) in bad faith.

12.  Describe the provisions of the federal Electronic Signature in Global and National commerce Act for e-commerce

            The Electronic Signature in Global and National Commerce Act – This federal statute recognizes and gives electronic signatures – e signatures – the same force and effect as a pen inscribed signature on paper. The act is technology neutral in that it does not define or decide which technologies should be used to create a legally binding signature in cyberspace.  

 

13.  Describe the Uniform Computer Information Transactions Act (UCITA)

            The Uniform Computer Information Transitions Act – This model act issued by the National Conference of Commissioners on Uniform State Laws establishes a uniform and comprehensive set of rules that governs the creation, performance, and enforcement of computer information transactions.

 

14.  Go to the internet and find an article dealing with “breach of Contract” law suits.  Write a 2 paragraph description of the article; be sure to cite the article.

 

“Surrogate sues parents over unborn twins.” CNN. August 13, 2001. Web. July 10, 2011. < http://archives.cnn.com/2001/US/08/11/surrogate.twins/index.html>.

            Helen Beasley of California is carrying twins at the age of 26. However, she is a surrogate mother and established a contract with another California couple, Berman and Wheeler. The couple agreed with Beasley that they wanted one and only one child. They did not care if it was a boy or girl. Within the contract, Beasley would be paid $20,000 to carry the couple’s baby for 9 months. Beasley also agreed that there should not be an abortion from 12 weeks after conception until the birth. All of the parties agreed to the terms.

            After 13 weeks Beasley was informed that Wheeler and Berman was going to breach the contract because Beasley, the surrogate mother, was carrying twins. The couple was aware within 8 weeks of conception that twins were being born, but waited until the 13th week to decide not to have the twins. Beasley was now forced to have the twins alone. Beasley already has a 7 year old and she simply couldn’t afford twins. Beasley is being sued for $80,000 in expenses. In return, Beasley is opening another family custody case. The motive is to reveal to the judge that the couple is unfit parents and to find a foster home for the twins. There was not a final ruling in this article. I do hope that Beasley wins the court case and finds a home for the twins because the California couple acted unethically. This is the first case ever to be brought to the courts attention in the history of California.

15.  Go to the internet and find an article dealing with consumer product safety act violations – write a 2 paragraph description of the article, be sure to cite the article.

 

“Cracking down on fraudulent STD treatments.” CNN. May 3, 2011. Web. July 10, 2011. < http://thechart.blogs.cnn.com/2011/05/03/cracking-down-on-fraudulent-std-treatments/?iref=allsearch>.

            The Internet can be used for knowledgeable information or be used as a wasteland filled with useless and deceptive acts. The U.S. Food and Drug Administration (FDA) is locking down several internet sites for selling over the counter bogus drugs that claim to treat sexually transmitted diseases. The FDA states there is no such drug over the counter that can prevent or cure STD’s. The FDA sent out letters of seizure to over 12 companies selling over 30 types of drugs.

            These drugs are making claims that they are FDA approved and they were not approved. This is illegal because it leads consumers to believe they are getting treated for the disease. The person with the virus could then spread it even further and infect others if not properly treated by a licensed doctor and receives a prescription. If the websites continue selling the drugs then they will be arrested and prosecuted as criminals.

 

 

 

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