Business Law Common Problems

Business Law

Midterm paper

Problem 1:

1. The Foreign Sovereign Immunity Act applies in cases where foreign nations are being sued in U.S. courts, based on the notion that "governments can not go wrong". In the case in question, the U.S.-based company is suing a foreign government for breach of contract when they did not receive their final payment, and the Saudi Arabian government uses the Foreign Sovereign Immunity Act as its defense.

2. The exception for FSIA is a case where commercial activity is involved and there is a direct affect on a U.S.-based company. Commercial activity as defined by the FSIA is either:

a. A regular course of commercial conduct OR

b. A particular commercial transaction or act.

3. To the best of our understanding, the majority of the group believes this suit should not be dismissed under the commercial activity exception to FSIA because:

a. The relevant activity in the case can be classified as commercial

b. There is a direct affect on the U.S.-based company since U.S. employees may be terminated because the company has not been paid.

However, the descending judge's (Mark) opinion is the suit should be dismissed because the exception to the FSIA is not fully satisfied; he argues that the affect on the U.S. -based company is indirect while the direct affect is actually on the Irish corporation.

Problem 2:

1. It is our understanding both Laura and Rafael committed the crime of knowingly receiving stolen goods. Both defendants' actions satisfy the definition of the crime of receiving stolen goods: "the recipient of such goods need not know the true identity of the owner or the thief." All that is necessary is the recipient knows or should know the goods are stolen, which implies an intent to deprive the owner of those goods.

2. To the best understanding of the majority of the group, Laura's defense is acceptable and she indeed was the victim of entrapment. Rafael approached Laura (not the other way around) and offered to sell her the stolen goods. She even asked questions and got answers from Rafael. Furthermore, the entrapment defense is intended to apprehend persons wanted for criminal acts, and Rafael obviously had no previous knowledge of Laura's prior criminal activities, if any.

Problem 3:

1. To the best of our understanding, if Joan sues the seller she would be entitled to seek equitable remedy of specific performance. The breach of the contract deprives Joan from the performance she was seeking when forming the contract, namely purchasing the building. In such a case, monetary compensation is inadequate since she cannot replace the ideal location for her business, which would also deprive her from profit. The definition of equitable remedy is:

"An