Business Law: Substantive law
SECTION I: For each of the two Fact Patterns set out below:
A. List each area of substantive law which is implicated by the fact pattern; (An area of substantive law might, for example, be Intellectual Property, International Law, Environmental Law, Employment Law, etc.)
B. Identify the legal issues which arise from the fact pattern;
C. Set forth an analysis of the facts stated in the fact pattern as they pertain to each legal issue that you identify and set forth what you believe would be the resolution of each identified issue based upon those facts. If you believe that the outcome of any issue would be different based on any facts or information that you believe are necessary to your analysis, set forth any such facts and explain why they would be important**; and,
D. If you were the trier of fact in this case, in whose favor would you rule and why? What would be the winning party’s remedy(ies) and why?
**(NOTE: You should not alter the stated facts or engage in random speculation. However, you should feel free to make all reasonable inferences from the facts as stated and set out and discuss any items of fact that you believe are not clear from the fact pattern which you reasonably believe are necessary to a full analysis of the issues.)
[FYI: The length of your answers will be up to you. You will be graded on your ability to (i) correctly identify the substantive area(s) of law which are applicable to each fact pattern, (ii) identify specific legal issues which are raised by each fact pattern, and (iii) set forth rational arguments, based on the facts and reasonable inferences, supporting your answers.]
FACT PATTERN 1: (40 Points)
WE LOVE MEAT is in the meat processing business. When WE LOVE MEAT opted to purchase the necessary equipment for a smokehouse and build a smokehouse facility at its plant, it contacted SMOKEHOUSES R US, which designs, manufactures and installs facilities for food processing, concerning the design and construction by WE LOVE MEAT of its new smokehouse facility. SMOKEHOUSES R US represented that it was an expert in this field and was fully capable of designing and building the facility in which the smokehouse equipment to be purchased by WE LOVE MEAT was to be installed, and in installation of WE LOVE MEAT’s smokehouse equipment, all in accordance with applicable codes and in a timely manner.
On January 14, 2016, SMOKEHOUSES R US provided WE LOVE MEAT with a Budget Quotation for the construction of the smokehouse facility and the installation of the smokehouse equipment which stated that the entire project would cost $60,000 and set forth the terms pursuant to which SMOKEHOUSES R US would provide goods and services for the project. Pursuant to those terms SMOKEHOUSES R US would design, construct and oversee the project including the installation of the smokehouse equipment and that all work would be done in a continuous time frame.
Based on the represented expertise of SMOKEHOUSES R US and the terms of the Budget Quotation, WE LOVE MEAT contracted with SMOKEHOUSES R US on February 1, 2016 to design, construct and oversee the project for $60,000 and paid a down payment of $20,000. An additional payment of $20,000 was to be paid when the work commenced with the balance due upon completion of the project. SMOKEHOUSES R US commenced work on February 28, 2016 and although SMOKEHOUSES R US worked on the project after February 28, 2016, by the end of June of 2016 the work was still not completed.
WE LOVE MEAT sued SMOKEHOUSES R US alleging that (1) SMOKEHOUSES R US failed to properly design, build and oversee the project, (2) the smokehouse which had been purchased by WE LOVE MEAT was installed improperly and in the wrong area, (3) that much of the work for which SMOKEHOUSES R US was contracted was not completed, and (4) the work that was done by SMOKEHOUSES R US was not done properly, and (5) when WE LOVE MEAT tried to get SMOKEHOUSES R US to repair its deficient work and to complete the project, SMOKEHUSES R US said it would do so only if WE LOVE MEAT paid SMOKEHOUSES R US an additional $75,000. WE LOVE MEAT claimed that in order to repair and complete the work to be performed by SMOKEHOUSES R US, WE LOVE MEAT had to pay another contractor $100,000 and that as a result of the failure of SMOKEHOUSES R US to perform under the contract, there was a substantial delay in WE LOVE MEAT being able to have the project completed and begin cooking and selling its products which resulted in $50,000 of lost profits to WE LOVE MEAT.
SMOKEHOUSES R US contends that (1) WE ARE MEAT only paid $10,000 at the commencement of the work and failed to pay anything further and therefore it had no duty to repair any defective work or to complete the project (2) it performed all services in accordance with the applicable standard of care and in a workmanlike manner, and (3) the evidence demonstrates that there was no deadline set for the work nor did WE ARE MEAT state that time was of the essence when it hired SMOKEHOUSES R US.
FACT PATTERN II (40 Pts).
REAL ESTATE MAKES US RICH is the owner of the Wonderful Mall. ASSET MANAGEMENT COMPANY, INC. manages the Wonderful Mall for REAL ESTATE MAKES US RICH. Mr. and Mrs. OWTHATHURTS had parked their car on the 5th floor of the parking garage at the Wonderful Mall while going to the movies at the theater across the street from the Wonderful Mall since there were no parking spaces available at the movie theater.
When the movie was over Mr. and Mrs. OWTHATHURTS went back to the Wonderful Mall to get their car and entered the elevator in the parking garage. Shortly after entering the elevator, one section of the three part ceiling of the elevator came loose and fell from its supports and landed on Mr. and Mrs. OWTHATHURTS. Mrs. OWTHATHURTS received a blow to the head, resulting in swelling and a visible bump on her head. Mr. OWTHATHURTS received a blow to the head and neck area and a laceration of his forehead.
SECTION II (20 Pts):
Facts: John, Jane and Spot start a company to develop and sell an App that enable students to “attend” classes by projecting an interactive image of themselves into a classroom that is so real that their professors think they are actually in class. John agrees to provide the startup capital for the company, Jane agrees to provide all of the necessary operating costs for the first year and Spot, who is the technological brains of the operation, agrees to do all of the research and development to create the App.
Question: Describe the legal factors and issues that John, Jane and Spot must consider when determining what legal entity, if any, they should choose and how you arrived at your choice of legal entity based on those factors and issues.
EXTRA CREDIT QUESTION (15 Points):
Other that determining what form their company should take, what other legal issues should John, Jane and Spot be thinking about and addressing based on the fact pattern set forth above?
