Question 1. 1. (TCO 7) Todd and Yolanda Robinson are selling their house. One of reasons they are selling their house is that they have noticed that a large crack is developing in their foundation. Their basement also floods when it rains. They have decided to sell the home themselves and not hire a real estate agent. They are concerned that if a prospective buyer walks through the basement and sees the crack, they will begin asking questions about flooding and then not purchase the house. So, they decided to put a large cabinet in front of the crack in the basement so that it will not be visible when buyers walk through the basement and they tell prospective buyers that the cabinet stays with the house. They receive a favorable offer and sell the home. Two months later there is a heavy rain in their community which caused a bridge to wash out. Three months after this, the Robinsons get a letter from an attorney who represents the buyers. The letter states that the buyers intend to sue the Robinsons.
Were the actions of the Robinsons fraudulent? Was the failure to disclose the crack in the foundation a material fact in the transaction? Identify all elements of fraudulent misrepresentation and whether it applies in this situation.
Question 2. 2. (TCO 8) How does the forum-selection clause of an international contract differ from a choice of law clause?
Question 3. 3. (TCO 5) Define insider trading under Section 10(b) of the Securities and Exchange Act of 1934, and provide an example. You should create your own hypothetical example, and not cite to actual examples such as the Martha Stewart case.
Question 4. 4. (TCO 4) Manchester Automobile Repair is a small car repair shop. The owner, Jason Chambers, hired Tim Davidson as a mechanic. Tim was not given any authority to act on behalf of the shop. All prices for services are predetermined, and only Jason Chambers can provide estimates to customers for car repairs, purchase supplies for the business, or enter into contracts on behalf of the repair shop.
One afternoon, Jason Chambers had to leave the business at noon for an afternoon family event. Before he left he gave a key to Tim and said, "Please lock up the business at 5 p.m. and bring the key back tomorrow morning." While Jason is gone, a customer comes to the repair shop to have his car repaired. Tim provides the customer with an estimate of charges for the repair. The customer asks Tim if he can repair the car for less. Tim knows that he is not supposed to negotiate cost, but he doesn't want to lose a customer, so Tim verbally tells the customer that they can do it for $100 less, and Tim changes the estimate to reflect a cost of $100 less. The customer returns two days later to pick up his car. When Jason Chambers is processing payment, the customer pulls out his copy of the estimate showing the lesser amount, and calls Tim into the office. Tim confirms that he gave the customer a different cost estimate. Jason Chambers is not happy with Tim's actions but he does not want to alienate a customer so he processes payment for the lower amount.
What are the elements for an agency relationship to be created? Was Tim Davidson an agent of Manchester Automobile Repair? Why or why not? Was the customer entitled to conclude that Tim was an agent of the business? What legal concepts are implicated by these facts?
Question 5. 5. (TCO 1) The city of Anytown, Florida, enacts a city zoning ordinance that prohibits outdoor advertising display signs, which includes neon signs and billboards, because it is concerned about traffic safety and aesthetics. A local business, Billboards R Us, believes that this ordinance is unconstitutional in that it violates the First Amendment protection of commercial speech. Billboards R Us sues the city of Anytown alleging that the zoning ordinance is unconstitutional.
What is commercial speech? What parameters has the Supreme Court placed on commercial speech? Based on the definition of commercial speech, analyze whether this zoning ordinance would be considered constitutional. If it is unconstitutional, can the city place any restrictions on commercial speech?
Question 6. 6. (TCO 8) How does the E-SIGN Act recognize electronic contracts as equivalent to written contracts?