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BUSINESS LAW 432
Essay Questions-Write a clear, concise answer to the following questions. Please
read the questions carefully and answer all seven questions.
(20 Points)
1. Skebba, a salesman, worked for many years for a company that eventually
experienced serious financial difficulties. Kasch, with his brother, owned M. W.
Kasch Co. Kasch hired Skebba as a sales representative, and over the years was
promoted many times until Skebba became vice president of sales. Kasch’s father
was the original owner of the business, and had hired Skebba’s father. Skebba’s
father mentored Kasch.
When M.W. Kasch Co. experienced serious financial problems in 1993,
Skebba was solicited by another company to leave Kasch Co. and work for them.
When Skebba told Kasch he was accepting the new opportunity, Kasch asked what it
would take to get him to stay, and noted that Skebba’s leaving at this time would be
viewed very negatively within the industry. Shortly thereafter, Skebba told Kasch
that he needed security for his retirement and would stay if Kasch agreed to pay
Skebba $250,000 if one of these three conditions occurred: (1) the company was sold;
(2) Skebba was lawfully terminated; or (3) Skebba retired. Skebba reports that Kasch
agreed to this proposal and Kasch promised to have the agreement drawn up. Skebba
turned down the job opportunity and stayed with Kasch from December 1993 (when
this discussion occurred) through 1999 when the company assets were sold.
Over the years, Skebba repeatedly asked Kasch for a written summary of the
agreement. None, however, was done. Eventually Kasch sold the business and
Kasch received $5.1 million dollars for his fifty-one percent share of the business.
Upon the sale of the business, Skebba asked Kasch for the $250,000 Kasch had
previously promised him, but Kasch refused, and denied ever having made such an
agreement. Instead, Kasch gave Skebba a severance agreement which had been
drafted by Kasch’s lawyers in 1993. This agreement promised two years of salary
continuation on the sale of the company, but only if Skebba was not hired by the
successor company and the severance agreement required a set-off against the salary
continuation of any sums Skebba earned from any activity during the two years of the
severance agreement. Skebba sued, alleging breach of contract and promissory
estoppel.
Discuss whether a contract had been formed and whether the doctrine of
promissory estoppel applies in this case. Discuss the case from both management’s
viewpoint and the employee’s viewpoint. What is the proper measure of damages if
Skebba prevails?
2
3
(10 Points)
2. What are the advantages and disadvantages of arbitration and mediation over
traditional litigation? Please include in your analysis how a business can require
entities it deals with to submit disputes to mandatory arbitration.
4
(10 points)
3. Explain how businesses can avoid defamation suits when it gives references for
former employees. What steps can a business take to avoid economic and operational
disruption when a business is subject to frequent liability (tort) claims?
5
(20 Points)
4. A United States coal company, Anthracite, wants to sell its product in the
Phillip Islands (Phillip). After meeting with a Phillip government attorney in
Manhattan, Anthracite’s CEO, Hubbell, is informed by the attorney that the best way
to facilitate its planned business operation in Phillip is to make a $1,000 cash gift to
each local province official in the 118 Phillip provinces where Anthracite plans to
distribute its coal. Immediately upon hearing this, Hubbell tells the lawyer that
Anthracite is in full agreement and will make these gifts. A written contract is
formed with the Phillip government granting Anthracite the exclusive right to
distribute coal in Phillip for the next ten years conditioned on annual $1,000
payments to all province officials and a $1,000,000 gift to a charity run by the son-in-
law of the Phillip Islands President.
Discuss the criminal and civil implications of this matter.
6
7
(20 Points)
5. Explain from a business manager’s standpoint the importance of the following:
A. The Protection and Defense of Intellectual Property Rights.
Please discuss the concepts in the Costco (Kirkland golf ball) case
and Selden/Henry Ford dispute we went over in class. What
jurisdiction in the United States regulates intellectual property?
8
B. What is the importance of properly written contracts? Include in
your analysis the topics of exculpatory clauses, limitations on
consequential damages, liquidated damages clauses, clear
definitions of terms, an integration clause, and dealing with
minors and/or intoxicated persons.
9
(10 Points)
6. Why is it important to have a fully written integrated agreement? Is there a
rule that prevents parties from arguing over the plain meaning of a word in their
integrated agreements? Explain this rule.
10
(10 Points)
7. Explain the difference between an assignment of contractual rights and a
delegation of contractual duties. How does the law of assignment of rights facilitate
commercial transactions such as factoring of accounts receivable or the sale or
securitization of debt obligations?