Briefing Business Cases - Case Study Example

Briefing Business cases Business Case: Kedzie and 103rd Currency exchange, 234 Ill. App. 3d 1017 (1992) 601 N.E.2d 803; 1992 Ill. App (1992), 619N.E.2d 732 (1993). Facts of the case: The Plaintiff Kedzie and 103rd Currency Exchange cashed a check issued to Fred Fentress, plumber, issued by Hodge as part payment against an agreement to perform plumbing services. But Hodge stopped payment on the check, when Fentress did not appear to perform the due service. As a holder in due course of a negotiable instrument, Plaintiff Kedzie sought damages from Hodge, who claimed the defense of illegality of the Contract since Fentress was not licensed as a plumber as required by Illinois statute. Major issue: was the contract between Hodge and the plumber null and void, to validate the defense of illegality? Ruling: The Court upheld the trial Court’s decision and found in favor of defendant Hodge, holding that the illegality defense rendered the obligation void, dismissing the suit. Analysis: The defendant presented the position that the contract between Hodge and the plumber was null and void because Fentress was not a licensed plumber in the state of Illinois. Hence the contract was not legally enforceable, therefore the defense of illegality would be valid against a holder in due course, i.e, Kedzie and 103rd Currency Exchange. Minority rationale: The position of the Plaintiff in this case was that an express statutory provision must exist that declares that a particular category of contract or negotiable instrument null and void and that illegality per se cannot be a defense. The significance of this case was the prevailing of Illinois statute in upholding the defense of illegality against a holder in due course. The case dealt with obligations arising under a contract void for reasons of public policy. It originated in the district Court and went to the Court of Appeals, and was tried over a period of two years, 1992-3. Jurisdiction of the case was in Illinois. 2. Business case: Olmstead v. United States, 277 U.S. 438 Facts of the case: In this case, Roy Olmstead and others were convicted of conspiring to violate the National Prohibition Act through unlawful possession and selling of alcohol. The petitioners challenged the grounds on which evidence gathered from wiretapping of telephone conversations was used for conviction, since it constituted a violation of the Fourth and Fifth Amendments. Major issue: Did the wiretapping violate fundamental rights under the Fourth Amendment and thereby the Fifth amendment as well? Ruling: The Court held that there had been no violation of the Fourth or Fifth Amendment. Analysis: The Court held that there had been so official search or seizure of petitioners’ possessions, houses or offices, which would have been unlawful. While prying into sealed letters received by post could constitute an invasion of privacy, however long distance connecting wires may not be a part of petitioners’ property and cannot be accorded protection under the Fourth Amendment. Minority rationale: Olmstead contended that he had a right to carry on his business and that his business dealings were confidential. Therefore the fact that the defendants had obtained this information through wiretapping confidential conversations without his knowledge amounted to a violation of the Fourth and Fifth Amendments and such evidence could not be deemed to be admissible. This case was filed in the Supreme Court because it dealt with the issue of constitutional rights. This case is significant in that it established that the federal officers did not engage in an illegal activity by wiretapping because they did not trespass into Olmstead’s home, rather they used the equipment on boxes in the street. However, while such wiretapping may be justified in the case of destructive political activity such as that of terrorists, it is more difficult to justify in the case of a business run by an individual. In such an instance, it may amount to dirty business as stated by Justice Holmes who dissented in the case, stating that the contents of telephone calls were to be regarded as deserving of privacy as letters sent by post. Political speech is different from business speech because it can be a potential source of great harm to a country and may also involve treason, however business speech is conducted in the course of carrying out business. The search and seizure provisions that have been introduced into the law are restrictive for businesses and their rights may be violated on the grounds of potential terrorist activity being carried out by such businesses. Freedom of enterprise and freedom to carry out business activities will face unnecessary intrusions into privacy and violate provisions of the Fourth Amendment and therefore are not justified. 3. Tobacco Technology Inc v Taiga International N.V. et al Civ no: CCB-06-0563 Facts of the case: Tobacco technology filed complaint, alleging violation of Taiga’s duty as an agent. TTI is a manufacturer of tobacco products and Taiga in Belgium was its European agent, to market TTI flavors which are its trade secrets. The dispute centered around the fact that while the relationship began as an exclusive agency agreement where Taiga purchased flavors from TTI, directors on TTI allowed Taiga to use TTI products to develop their own flavors, which was designed to be far more profitable to Taiga than to TTI, the original producer of the patented flavors. Major issue: Whether there was a breach of agent’s duty by Taiga and the Director of TTI in allowing the revised agency agreement? Ruling: The Court ruled in favor of the Plaintiffs that their motion was not time barred and that there had been a breach of agency duty. Analysis: The Court held that breach of agent’s duty has been held as a valid cause of action and in this instance, both Taiga and the Director of TTI had violated their duty by formulating an agency agreement that was more profitable to Taiga while they were acting in the capacity of agents to TTI and due notice of inquiry had not been provided to TTI. Minority rationale: in this case was that no breach of duty had occurred since the statutory period of three years had not expired in making TTI aware of revised agreement. The significance of this case lies in establishing the role of the agency. An agency exists as a representative of its principal and exists to forward the goals and objectives of the principal rather than promote itself. Therefore Taiga reported to TTI and did not advance its interests, hence the case became liable for judicial action. This case was filed in the District Court of Maryland, on March 3, 2006 and decided on February 26, 2007. Jurisdiction rested with the Court of Maryland since Plaintiff Tobacco technology operates out of Maryland. 4. Tina Bruce, Jayme Bruce, a minor and Jessica Bruce a Minor v Clark Equipment Company. Bobcat Company, Melroe Company, Ingersoll Rand Company, Wilds Horticultural Services Inc and Samuel Wilds, No: Civ S-05-01766 WBS KJM Facts of the case: The father of the Plaintiff was injured while using the Bobcat Skid Steer loader, manufactured by the Clark Company in which Ingersoll is a primary shareholder. A case for tort of negligence was filed on the basis of supply of faulty equipment which caused the death of Tina Bruce’s father. Issues: The two major issues were whether Ingersoll was guilty of the tort of negligence under the strict liability standard for defective equipment and whether negligence had contributed to emotional distress of the Plaintiffs. Ruling: The Court held that Ingersoll was not guilty under the strict liability standard, however the equipment was defective and damages for emotional distress caused by the incident were recoverable by plaintiffs. Analysis: The Court held that the defendants were aware of the malfunctioning and defects with the equipment and therefore had a duty to take action. However, applying the standard of strict liability was not upheld because the deceased had operated the loader while standing outside it and therefore the injury could not be said to be caused by the product design. However because of the defendants’ awareness of inherent defects in product, damages for emotional distress caused by the death were allowed. This case was filed at the District Court of California on January 19, 2005 and decided on March 26, 2007. Since the incident alleging tort of negligence occurred in California, appropriate jurisdiction rested with the California court. Minority rationale: The minority rationale in this case was that Ingersoll was liable under the strict liability factor for damages caused due to defective equipment. The tort of negligence is the one that most often afflicts businesses in the design of their products. A warranty about a product is a representation that the object sold is as it has been presented by the manufacturer. Two kinds of warranties are generally offered – one on the product itself and the other on the labor utilized in its manufacture. A warranty implies that a manufacturer has the responsibility to ensure that the product functions as it has been represented. When the product is to be use din a particular manner to ensure that no injury occurs, suitable warning signs must be posted, otherwise the manufacturer will be liable. If the product is defective the manufacturer will be liable for damages in tort while his responsibility may be mitigated if the consumer has used it inappropriately. 5. Patriot Scientific Corporation v Miklos B Korodi, Case no: 06CV1543 R (CAB) Facts of the case: Korodi was hired as a Consultant by Patriot Scientific Corporation for a monthly payment of 5000$, reimbursement of his expenses and participation in patriot’s stock option program, Patriot later terminated his consultancy, but refused to pay the stock options which it had orally agreed to pay. Korodi therefore brought action for breach of contract by Patriot. Issue: One of the issues in the case was whether Patriot has breached the oral contract to issue shared to Kroodi. Ruling: The Court held that no enforceable contractual relationship could be demonstrated in the matter of the shares and therefore Korodi’s motion was dismissed. Minority rationale: was that an oral representation made in the form of a promise by one of Patriot’s officers was as good as a contractual term. Analysis: The Court did not deem that any breach of contract had occulted. Kordodi had been paid according to terms agreed to, The oral promise made by one officer could not equate to a contractual term because the procedure for distribution of shares by Patrio could only be determined in accordance with a consensus reached by the Board of Directors of Patriot and not by single officer and therefore could not be honored and was npot a valid contractual term. This case was filed in March 2006 and decided on May 23, 2007. Jurisdiction was accorded to the California court, since Korodi who brought the action was a resident of Los Angeles. However in so far as the question of issue of shares was concerned, jurisdiction rested with courts in Delaware since Patriot was registered in Delaware where share participation rules were in accordance with those laid out in that State. The element of contract that was in dispute was the allotment of shares. This could have been avoided if the formal requirements in the procedure for allotment of shares had been made known to Kordodi. Where matters of consideration are concerned, they must be in writing before they can be deemed to be enforceable and the question of shares was not put down in writing. Read More