Steven Gwin bought a lifetime Termite Protection Plan for his home in Alabama from the local office of Allied-Bruce, a franchise of Terminix International Company. The plan provided that Allied-Bruce would “protect” Gwin’s house against termite infestation, reinspect periodically, provide additional treatment if necessary, and repair damage caused by new termite infestations. Terminix International guaranteed the fulfillment of these contractual provisions. The plan also provided that all disputes arising out of the contract would be settled exclusively by arbitration. Four years later, Gwin had Allied-Bruce reinspect the house in anticipation of selling it. Allied-Bruce gave the house a “clean bill of health.” Gwin then sold the house and transferred the Termite Protection Plan to Dobson. Shortly thereafter, Dobson found the house to be infested with termites. Allied-Bruce attempted to treat and repair the house, using materials from out of state, but these efforts failed to satisfy Dobson. Dobson then sued Gwin, Allied-Bruce, and Terminix International in an Alabama state court. Allied-Bruce and Terminix International asked for a stay of these proceedings until arbitration could be carried out as stipulated in the contract. The trial court refused to grant the stay. The Alabama Supreme Court upheld that ruling, citing a state statute that makes predispute arbitration agreements unenforceable. The court found that the Federal Arbitration Act, which preempts conflicting state law, did not apply to this contract because its connection to interstate commerce was too slight. Was the Alabama Supreme Court correct? Explain.
> Paula instructed Alvin, her agent, to purchase a quantity of hides. Alvin ordered the hides from Ted in his own (Alvin’s) name and delivered the hides to Paula. Ted, learning later that Paula was the principal, sends the bill to Paula, who refuses to pay
> Teledyne Industries, Inc., entered into a contract with Teradyne, Inc., to purchase a T-347A transistor test system for the list and fair market price of $98,400 less a discount of $984. After the system was packed for shipment, Teledyne canceled the ord
> Raymond Zukaitis was a physician practicing medicine in Douglas County, Nebraska. Aetna issued a policy of professional liability insurance to Zukaitis through its agent, the Ed Larsen Insurance Agency. The policy covered the period from August 31, 2013,
> Virginia and her husband Ronnie Hulbert were involved in an accident in Mobile County when their automobile collided with another automobile driven by Dr. Murray’s nanny. The nanny’s regular duties of employment included housekeeping, supervising the chi
> Van D. Costas, Inc. (Costas) entered into a contract to remodel the entrance of the Magic Moment Restaurant owned by Seascape Restaurants, Inc. Rosenberg, part owner and president of Seascape, signed the contract on a line under which was typed “Jeff Ros
> Chris Zulliger was a chef at the Plaza Restaurant in the Snowbird Ski Resort in Utah. The restaurant is located at the base of a mountain. As a chef for the Plaza, Zulliger was instructed by his supervisor and the restaurant manager to make periodic trip
> Aretta J. Parkinson owned a two-hundred-acre farm in a state that requires written authority for an agent to sell land. Prior to her death on December 23, Parkinson deeded a one-eighth undivided interest in the farm to each of her eight children as tenan
> Sherwood negligently ran into the rear of Austen’s car, which was stopped at a stoplight. As a result, Austen received bodily injuries and her car was damaged. Sherwood, arts editor for the Mississippi Press Register, was en route from a concert he had c
> Serges is the owner of a retail meat marketing business. Without authority his managing agent borrowed $3,500 from David, on Serges’s behalf, for use in Serges’s business. Serges paid $200 on the alleged loan and on several other occasions told David tha
> While crossing a public highway in the city, Joel was struck by a horse-drawn cart driven by Morison’s agent. The agent was traveling between Burton Crescent Mews and Finchley on his employer’s business and was not supposed to go into the city at all. Ap
> Harris, owner of certain land known as Red Bank, mailed a letter to Byron, a real estate broker in City X, stating, “I have been thinking of selling Red Bank. I have never met you, but a friend has advised me that you are an industrious and honest real e
> Alice was Peter’s traveling salesperson and was authorized to collect accounts. Before the agreed termination of the agency, Peter wrongfully discharged Alice. Peter did not notify anyone of Alice’s termination. Alice then called on Tom, an old customer,
> Mrs. French was the highest bidder on eight antique guns at an auction held by Sotheby & Company. Mrs. French made a down payment on the guns but subsequently refused to accept the guns and refused to pay the remaining balance of $24,886.27 owed on them.
> Wilson engages Ruth to sell Wilson’s antique walnut chest to Harold for $2,500. The next day, Ruth learns that Sandy is willing to pay $3,000 for Wilson’s chest. Ruth nevertheless sells the chest to Harold. Wilson then discovers these facts. What are Wil
> Timothy retains Cynthia, an attorney, to bring a lawsuit upon a valid claim against Vincent. Recently enacted legislation has shortened the statute of limitations for this type of legal action. Cynthia fails to make herself aware of this new statute. Con
> In October 2010, Black, the owner of the Grand Opera House, and Harvey entered into a written agreement to lease the opera house to Harvey for five years at a rental of $300,000 a year. Harvey engaged Day as manager of the theater at a salary of $1,175 p
> Piedmont Electric Co. gave a list of delinquent accounts to Alexander, an employee, with instructions to discontinue electric service to delinquent customers. Among those listed was Todd Hatchery, which was then in the process of hatching chickens in a l
> Palmer made a valid contract with Ames under which Ames was to sell Palmer’s goods on commission from January 1 to June 30. Ames made satisfactory sales up to May 15 and was about to close an unusually large order when Palmer suddenly and without notice
> Harvey Hilgendorf was a licensed real estate broker acting as the agent of the Hagues in the sale of eighty acres of farmland. The Hagues, however, terminated Hilgendorf’s agency before the expiration of the listing contract when they encountered financi
> Packer owned and operated a fruit cannery in Southton, Illinois. He stored a substantial amount of finished canned goods in a warehouse in East St. Louis, Illinois, owned and operated by Alden, in order to have goods readily available for the St. Louis m
> Perry employed Alice to sell a parcel of real estate at a fixed price without knowledge that David had previously employed Alice to purchase the same property for him. Perry gave Alice no discretion as to price or terms, and Alice entered into a contract
> Tony Wilson was a member of Troop 392 of the Boy Scouts of America (BSA) and of the St. Louis Area Council (Council). Tony went on a trip with the troop to Fort Leonard Wood, Missouri. Five adult volunteer leaders accompanied the troop. The troop stayed
> Brian Hanson sustained a paralyzing injury while playing in a lacrosse match between Ohio State University and Ashland University. Hanson had interceded in a fight between one of his teammates and an Ashland player, William Kynast. Hanson grabbed Kynast
> Servebest contracted to sell Emessee 200,000 pounds of 50 percent lean beef trimmings for $105,000. Upon a substantial fall in the market price, Emessee refused to pay the contract price and informed Servebest that the contract was canceled. Servebest su
> Tube Art was involved in moving a reader board sign to a new location. Tube Art’s service manager and another employee went to the proposed site and took photographs and measurements. Later, a Tube Art employee laid out the exact size and location for th
> Hunter Farms contracted with Petrolia Grain & Feed Company, a Canadian company, to purchase a large supply of the farm herbicide Sencor from Petrolia for resale. Petrolia learned from the U.S. Customs Service that the import duty for the Sencor would be
> Murphy, while a guest at a motel operated by the Betsy-Len Motor Hotel Corporation, sustained injuries from a fall allegedly caused by negligence in maintaining the premises. At that time, Betsy-Len was under a license agreement with Holiday Inns, Inc. T
> Sierra Pacific Industries purchased various areas of timber and six other pieces of real property, including a ten-acre parcel on which five duplexes and two single-family units were located. Sierra Pacific requested the assistance of Joseph Carter, a li
> Morris is a salesperson for Acme, Inc., a manufacturer of household appliances. Morris receives a commission on all sales made and no further compensation. He drives his own automobile, pays his own expenses, and calls on whom he pleases. While driving t
> Parker, the owner of certain unimproved real estate in Chicago, employed Adams, a real estate agent, to sell the property for a price of $250,000 or more and agreed to pay Adams a commission of 6 percent for making a sale. Adams negotiated with Turner, w
> A customer requested certain sophisticated tests on equipment he purchased from your factory. Such tests are very expensive and must be performed by a third party. The equipment was tested as requested and met all of the industry standards, but showed an
> Major Company subcontracted the development of part of a large technology system to Start-up Company, a small corporation specializing in custom computer systems. The contract, which was a major breakthrough for Start-up Company and crucial to its future
> You are the sales manager of a two-year-old electronics firm. At times, the firm has seemed to be on the brink of failure, but recently has begun to be profitable. In large part, the profitability is due to the aggressive and talented sales force you hav
> Omega, Inc., a publicly held corporation, has assets of $100 million and annual earnings in the range of $13–$15 million. Omega owns three aluminum plants, which are profitable, and one plastics plant, which is losing $4 million a year. The plastics plan
> Lee Oldsmobile sells Rolls-Royce automobiles. Mrs. Kaiden sent Lee a $25,000 deposit on a 2005 Rolls-Royce with a purchase price of $145,500. Although Lee informed Mrs. Kaiden that the car would be delivered in November, the order form did not indicate t
> You and Joe Jones, your neighbor and friend, bought lottery tickets at the corner drugstore. While watching the lottery drawing on television with you that night, Joe leaped from the couch, waved his lottery ticket, and shouted, “I've got the winning num
> You have just received a report suggesting that a chemical your company uses in its manufacturing process is very dangerous. You have not read the report, but you are generally aware of its contents. You believe that the chemical can be replaced fairly e
> You receive a telephone call from a company that you never do business with requesting a reference on one of your employees, Mary Sunshine. You believe that Mary is generally incompetent and would be delighted to see her take another job. You give her a
> You have a very shy employee from another country. After a time, you notice that the quality of her performance is deteriorating rapidly. You find an appropriate time to speak with her and determine that she is extremely distraught. She tells you that he
> You have an employee who has a chemical imbalance in the brain that causes him to be severely unstable. The medication that is available to deal with this schizophrenic condition is extremely powerful and decreases the taker's life span by one to two yea
> Mark Womer and Brian Perry were members of the U.S. Navy and were stationed in Newport, Rhode Island. On April 10, Womer allowed Perry to borrow his automobile so that Perry could visit his family in New Hampshire. Later that day, while operating Womer’s
> Vette sued Aetna under a fire insurance policy. Aetna moved for summary judgment on the basis that the pleadings and discovered evidence showed a lack of an insurable interest in Vette. An “insurable interest” exists where the insured derives a monetary
> Thomas Clements brought an action in a court in Illinois to recover damages for breach of warranty against defendant, Signa Corporation. (A warranty is an obligation that the seller of goods assumes with respect to the quality of the goods sold.) Clement
> The Supreme Court of State G decided that the United States Constitution requires professors to warn students of their right to remain silent before questioning the students about cheating. This ruling directly conflicts with a decision of the Federal Co
> The Supreme Court of State A ruled that, under the law of State A, pit bull owners must either keep their dogs fenced or pay damages to anyone bitten by the dogs. Assess the accuracy of the following statements: a. It is likely that the United States Sup
> Through information provided by S-2 Yachts, Inc., the plaintiff, Barr, located a yacht to his liking at the Crow’s Nest marina and yacht sales company. When Barr asked the price, he was told that, although the yacht normally sold for $102,000, Crow’s Nes
> Sam Simpleton, a resident of Kansas, and Nellie Naive, a resident of Missouri, each bought $85,000 in stock at local offices in their home states from Evil Stockbrokers, Inc. (“Evil”), a business incorporated in Delaware with its principal place of busin
> While driving his car in Virginia, Carpe Diem, a resident of North Carolina, struck Butt, a resident of Alaska. As a result of the accident, Butt suffered over $80,000 in medical expenses. Butt would like to know if he personally serves the proper papers
> State Senator Bowdler convinced the legislature of State Z to pass a law requiring all professors to submit their class notes and transparencies to a board of censors to be sure that no “lewd” materials were presented to students at State universities. P
> Kenneth Thomas brought suit against his former employer, Kidder, Peabody & Company, and two of its employees, Barclay Perry and James Johnston, in a dispute over commissions on sales of securities. When he applied to work at Kidder, Peabody, Thomas had f
> Mariana Deutsch worked as a knitwear mender and attended a school for beauticians. The sink in her apartment collapsed on her foot, fracturing her big toe and making it painful for her to stand. She claims that as a consequence of the injury she was comp
> On June 15 a newspaper columnist predicted that the coast of State X would be flooded on the following September 1. Relying on this pronouncement, Gullible quit his job and sold his property at a loss so as not to be financially ruined. When the flooding
> Iowa enacted a statute prohibiting the use of sixty-five-foot double trailer truck combinations. All of the other midwestern and western States permit such trucks to be used on their roads. Despite these restrictions, Iowa’s statute permits cities abutti
> A state statute empowered public school principals to suspend students for up to ten days without any notice or hearing. A student who was suspended for ten days challenges the constitutionality of his suspension on the grounds that he was denied due pro
> State Z enacted a Private Pension Benefits Protection Act requiring private employers with 100 or more employees to pay a pension funding charge upon terminating a pension plan or closing an office in State Z. Acme Steel Company closed its offices in Sta
> A farmer made a contract in April to sell a grain dealer 40,000 bushels of corn to be delivered in October. On June 3, the farmer unequivocably informed the grain dealer that he was not going to plant any corn, that he would not fulfill the contract, and
> Explain whether each of the following transactions results in a valid negotiation: (a) Arnold gives a negotiable check payable to bearer to Betsy without indorsing it. (b) Golden indorses a negotiable, promissory note payable to the order of Golden, “Pay
> E-Z-Rest Motel is a motel with 216 rooms located in the center of a large city in State Y. It is readily accessible from two interstate highways and three major State highways. The motel solicits patronage from outside of State Y through various national
> The Public Service Commission of State X issued a regulation completely banning all advertising that “promotes the use of electricity” by any electric utility company in State X. The commission issued the regulation to conserve energy. Central Electric C
> The Federal Aviation Act provides that “The United States of America is declared to possess and exercise complete and exclusive national sovereignty in the airspace of the United States.” The city of Orion adopted an ordinance that makes it unlawful for
> Maryland enacted a statute prohibiting any producer or refiner of petroleum products from operating retail service stations within the State. The statute also required that any producer or refiner discontinue operating its company-owned retail service st
> In 1967, large oil reserves were discovered in the Prudhoe Bay area of Alaska. As a result, State revenues increased from $124 million in 1969 to $3.7 billion in 1981. In 1980, the State legislature enacted a dividend program that would distribute annual
> Drug compounding is a process by which a pharmacist or doctor combines, mixes, or alters ingredients to create a medication tailored to the needs of an individual patient. Compounding is typically used to prepare medications that are not commercially ava
> Miss Horowitz was admitted as an advanced medical student at the University of Missouri-Kansas City. During her first year, several faculty members expressed dissatisfaction with Miss Horowitz's clinical performance, noting that it was below that of her
> The McClungs own Ollie’s Barbecue, a restaurant located a few blocks from the interstate highway in Birmingham, Alabama, with dining accommodations for whites only and a take-out service for blacks. In the year preceding the passage of the Civil Rights A
> Metropolitan Edison Company is a privately owned and operated Pennsylvania corporation subject to extensive regulation by the Pennsylvania Public Utility Commission. Under a provision of its general tariff filed with the commission, Edison had the right
> In May, Patricia Allen left her car on the shoulder of a road in the city of Erehwon after the car stopped running. A member of the Erehwon police dept. came upon the car later that day and placed on it a sticker which stated that unless the car were mov
> Sherman Burrus, a job printer, purchased a printing press from the Itek Corporation for a price of $7,006.08. Before making the purchase, Burrus was assured by an Itek salesperson, Mr. Nessel, that the press was appropriate for the type of printing Burru
> David Diersen filed a complaint against the Chicago Car Exchange (CCE), an automobile dealership, alleging that the CCE fraudulently furnished him an inaccurate odometer reading when it sold him a 1968 Dodge Charger, in violation of the Vehicle Informati
> Congress enacted the National Traffic and Motor Vehicle Safety Act of 1966 (the Act) for the purpose of reducing the number of traffic accidents that result in death or personal injury. The Act directs the Secretary of Transportation to issue motor vehic
> Under the Communications Act of 1934 the Commission may not impose common carrier obligations on cable operators. A common carrier is one that “makes ea public offering to provide [communication facilities] whereby all members of the public who choose to
> The Federal Crop Insurance Corporation (FCIC) was created as a wholly government-owned corporation to insure wheat producers against unavoidable crop failure. As required by law, the FCIC published in the Federal Register conditions for crop insurance. S
> Bachowski was defeated in a United Steelworkers of America union election. After exhausting his union remedies, Bachowski filed a complaint with Secretary of Labor Dunlop. Bachowski invoked the Labor-Management Reporting and Disclosure Act, which require
> Reagan National Airport in Washington, D.C., is one of the busiest and most crowded airports in the nation. Accordingly, the Federal Aviation Administration (FAA) has restricted the number of commercial landing and takeoff slots at National to 40 per hou
> The Secretary of Commerce (Secretary) published notice in the Federal Register inviting comments regarding flammability standards for mattresses. Statistical data were compiled, consultant studies were conducted, and 75 groups submitted comments. The Sec
> Congress passed the Emergency Price Control Act in the interest of national defense and security. The stated purpose of the act was “to stabilize prices and to prevent speculative, unwarranted and abnormal increases in prices and rents....” The act estab
> Waronek owned and operated a trucking rig, transporting goods for L.T.L. Perishables, Inc., of St. Paul, Minnesota. He accepted an offer to haul a trailer load of beef from Illini Beef Packers, Inc., in Joslin, Illinois, to Midtown Packing Company in New
> A national bank was robbed by a man with a small strip of tape on each side of his face. An indictment was returned against David. David was then arrested, and counsel was appointed to represent him. Two weeks later, without notice to David’s lawyer, an
> Technical Textile agreed by written contract to manufacture and sell 20,000 pounds of yarn to Jagger Brothers at a price of $2.15 per pound. After Technical had manufactured, delivered, and been paid for 3,723 pounds of yarn, Jagger Brothers by letter in
> The police obtained a search warrant based on an affidavit that contained the following allegations: (a) Donald was seen crossing a state line on four occasions during a five-day period and going to a particular apartment; (b) Telephone records disclosed
> Peter, an undercover police agent, was trying to locate a laboratory where it was believed that methamphetamine, or “speed”—a controlled substance—was being manufactured illegally. Peter went to Mary’s home and said that he represented a large organizati
> Truck drivers for a hauling company, while loading a desk, found a $100 bill that had fallen out of the desk. They agreed to get it exchanged for small bills and divide the proceeds. En route to the bank, one of them changed his mind and refused to proce
> Jones and Wilson were on trial, separately, for larceny of a $1,000 bearer bond (payable to the holder of the bond, not a named individual) issued by Brown, Inc. The commonwealth’s evidence showed that the owner of the bond put it in an envelope bearing
> Ann took Bonnie’s watch without Bonnie knowing of the theft. Bonnie subsequently discovered her loss and was informed that Ann had taken the watch. Bonnie immediately pursued Ann. Ann pointed a loaded pistol at Bonnie, who, in fear of being shot, allowed
> Sara, a lawyer, drew a deed for Robert by which Robert was to convey land to Rick. The deed was correct in every detail. Robert examined and verbally approved it but did not sign it. Sara then erased Rick’s name and substituted her own. Robert subsequent
> Officer Cyril Rombach of the Burbank Police Department, an experienced and well-trained narcotics officer, applied for a warrant to search several residences and automobiles for cocaine, methaqualone, and other narcotics. Rombach supported his applicatio
> Four separate cases involving similar fact situations were consolidated because they presented the same constitutional question. In each case, police officers, detectives, or prosecuting attorneys took a defendant into custody and interrogated him in a p
> Sam said to Carol, “Kim is going to sell me a good used car next Monday and then I’ll deliver it to you in exchange for your computer, but I’d like to have the computer now.” Relying on this statement, Carol delivered the computer to Sam. Sam knew Kim ha
> Chris leaves her car parked in front of a store. There are no signs that say Chris cannot park there. The store owner, however, needs the car moved to enable a delivery truck to unload. He releases the brake and pushes Chris's car three or four feet, doi
> Margaret contracted to buy a particular model Rolls-Royce from Paragon Motors, Inc. Only 100 of these models are built each year. She paid a $3,000 deposit on the car but Paragon sold the car to Gluck. What remedy, if any, does Margaret have against Para
> Owner has a place on his land where he piles trash. The pile has been there for three months. John, a neighbor of Owner and without Owner's consent or knowledge, throws trash onto the trash pile. Owner learns that John has done this and sues him. What to
> A patient confined in a hospital, Joan, has a rare disease that is of great interest to the public. Carol, a television reporter, requests Joan to consent to an interview. Joan refuses, but Carol, nonetheless, enters Joan's room over her objection and ph
> The Saturday Evening Post featured an article entitled “The Story of a College Football Fix,” characterized in the subtitle as “A Shocking Report of How Wally Butts and Bear Bryant Rigged a Game Last Fall.” Butts was athletic director of the University o
> Lana, a ten-year-old child, is run over by a car negligently driven by Mitchell. Lana, at the time of the accident, was acting reasonably and without negligence. Clark, a newspaper reporter, photographs Lana while she is lying in the street in great pain
> Claude, a creditor seeking to collect a debt, calls on Dianne and demands payment in a rude and insolent manner. When Dianne says that she cannot pay, Claude calls Dianne a deadbeat and says that he will never trust her again. Is Claude liable to Dianne?
> Ralph kisses Edith while she is asleep but does not waken or harm her. Edith sues Ralph for battery. Has a battery been committed?
> Debra Agis was a waitress in a restaurant owned by the Howard Johnson Company. On May 23, Roger Dionne, manager of the restaurant, called a meeting of all waitresses at which he informed them that "there was some stealing going on." Dionne also stated th
> CEO was convinced by his employee, M. Ploy, that a coworker, A. Cused, had been stealing money from the company. At lunch that day in the company cafeteria, CEO discharges Cused from her employment, accuses her of stealing from the company, searches thro
> Susan Jungclaus Peterson was a twenty-one-year-old student at Moorhead State University who had lived most of her life on her family farm in Minnesota. Though Susan was a dean's list student during her first year, her academic performance declined after
> Lemmie L. Ruffin, Jr., was an Alabama licensed agent for Pacific Mutual Life Insurance and for Union Fidelity Life Insurance Company. Union wrote group health insurance policies for municipalities, while Pacific did not. Plaintiffs Cleopatra Haslip, Cynt
