Law Paper C

PMBA

Law 5401: Business Law Spring 2017

James M. Lammendola, M.A., J.D.

Individual Case Study Final Essays

INSTRUCTIONS

Due Sunday, April 30 at 11:59pm via Blackboard

Format: 12’ Font Double Spaced

Length: See Individual Question

Point Distribution: All equally weighted

No research required

Note: These are not all or nothing answers. You can earn anywhere from some to full credit on any given question.  Conciseness, clarity and organization are highly valued

Question 1 (2 pages):

***** Everyone answer this question ****

CHAPTER 3: Contract Law:

Pages 84 (middle of page) – 86), pages 90-93 including Home Basket Co., LLC v. Pampered Chef Ltd. and top of page 102

FACTS:

A seller/ merchant and buyer/merchant are engaged in preliminary contract negotiations for the sale of a large number of widgets. This is the first time these two businesses have done business with each other. The seller and buyer discussed a number of terms during their preliminary negotiations. There was a consensus on almost every term. The buyer objected to an arbitration clause. The issue was left unresolved; the seller’s position was “we’ll see.”

The seller then directed the buyer to its website where all its contracts are reduced to writing. The buyer must navigate a list of Terms and Conditions. One term and condition requires all disputes be submitted to arbitration instead of a court of law. The buyer had the choice of clicking, “accept,” “reject,” or “counteroffer, state objection.” The buyer clicks “accept” to the Terms and Conditions where the arbitration clause is readily noticeable.

QUESTION 1

1. The buyer claims that his rejection of the arbitration term during the preliminary negotiations is binding -- not the online acceptance-- because seller was “on notice” of buyers position. Is the arbitration term a part of their contract?  Why or why not?

QUESTION 2: Change the facts

Would your answer be different if…..

 the parties had done business ten times before over the internet, and an arbitration clause was never included on Terms and Conditions.  But on eleventh transaction, the Arbitration Clause was an additional term and appeared in a section entitled Policies and Procedures.  Can the seller hold the buyer to the arbitration clause? Why or why not? There is more than one reason.

Choose one of the two following questions for FULL credit OR answer all three for extra credit

Question Two (1 1/2 – 2 pages)

Product Liability & Negligence

FACTS:

Ren is the owner of a late model GM automobile. While Ren is driving to an adult drinking establishment with his friend Stimpy, he loses control of the car and strikes a pole.

Ren and Stimpy wish to bring a lawsuit against General Motors (GM) alleging the steering mechanism locked which resulted in Ren’s inability to steer the vehicle.

Although Stimpy suffered cuts and bruises, a broken arm and soft tissue injuries to his back, Ren was more seriously injured, sustaining –among other injuries --  a broken arm, a few broken ribs and internal injuries. GM determines that Ren was more seriously injured than Stimpy because Ren was not wearing his seatbelt.

Assume there are NO defective maintenance or driving- while- impaired issues.

QUESTIONS a-f:

1a. Assume the steering mechanism was defective without GM’s knowledge. What type of legal claim does Ren and Stimpy have against GM?  

1b. Is GM required to know the defect existed in order to be held liable?

1.c Can GM be held liable, assuming Ren and Stimpy cannot prove a breach of duty?

1d. What legal consequences could GM be exposed to if it was proven that GM was aware of the defect before Ren & Stimpy were injured and did nothing to notify purchasers and recall the vehicles?