MGMT 597 Week 8 Final Exam (Version 2) > Graded Latest Guides Essay 1 Points Received 256/300 & Essay 2 256/300 Respectively.

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MGMT 597 Week 8 Final Exam (Version 2) 1. Question : (TCO A, C) Major Media Station, which broadcasts TV and radio programs around the country, contracts with shock jock Don Marco, who hosts th... e station’s most successful morning drive radio program in the country: Mark My Words. The program consists of traffic and sports updates, interviews with sports figures and celebrities, and Mark’s Words, which are in the nature of rants and opinions on whatever topic of interest the host decides to focus on, including news articles and happenings around the country and locally. Audience participation is encouraged by way of phone calls to the station during the program. On more than one occasion, Mark My Words has made national news because of controversial statements made by the host regarding people’s looks, religion, lack of intelligence, actions, race, etc. In fact, the contract between Major Media Station and Don Marco specifies that Mark My Words is to be controversial. The greater the controversy, the higher the audience ratings and the higher Marco’s compensation. However, the term controversial is not defined, although the station manager who broadcasts Mark My Words is responsible for activating a delay button in the event Marco uses a word or makes comments that would cause the FCC to fine the station. One morning, Mark My Words featured a rant full of derogatory sexual and racial comments about the members of a visiting ball team that succeeded in beating the local favored team at the championship game. As soon as the program aired, Major Media Station was bombarded with complaints. Following letters to sponsors and pressure from respected public figures, three large sponsors cancelled their advertising contracts. This happened in spite of the host’s public apology in which he claimed to have just made another stupid comment. In spite of fan protests, the station terminated Don Marco’s five-year $20 million contract. The contract was in its second year. Marco is now suing Major Media Station for breach of contract, and the insulted players are also suing the station for defamation and intentional infliction of emotional distress. i. What arguments do you think Marco will make in his suit against Major Media Station? ii. In order to support his claim against the station, Marco wishes to introduce parol evidence regarding the term controversial. What would be the purpose of introducing this evidence? What arguments will Major Media Station make in opposition to the introduction of this evidence? Will Marco be successful in this regard, and why? iii. As for the tort claims by the insulted players, Major Media Station argues it has no liability, as Don Marco is an independent contractor who is solely responsible for his rants, and that his public apology constitutes an admission of liability. Is Major Media Station off the hook? 2. Question : (TCO B, D) Mercer Mechanics offers a one-day sale on battery installation. During the course of the day the mechanics at Mercer install over 200 batteries in various vehicles. Unfortunately, one of the installed batteries had a manufacturer defect and exploded within the vehicle that was being driven by Driver. Fortunately, Driver only sustained minor injuries, but his vehicle was destroyed. i. Is Mercer Mechanics installation of the battery in Driver’s automobile subject to Article 2 of the UCC? Why or why not? ii. Describe the various business entities that Mercer Mechanics could have formed to conduct business. Discuss the strategic considerations involved in each choice of entity. What are the advantages and disadvantages of each? 3. Question : (TCO E, H) Grumped Company asks Pierce Whippersnapper LLP (PW), a CPA firm, to audit its financial statements. Grumped tells PW that it plans to use the statements to obtain a loan from First Bank. PW prepares the statements. Grumped uses the statements to obtain a loan from Second Bank. The statements falsely state Grumped’s financial position due to PW's negligent preparation of them. When Grumped defaults on the loan, Second Bank sues PW under the common law rule of negligence. Does PW have liability for negligence to Second Bank under the Ultramares decision? Does PW have liability for negligence to Second Bank under the Restatement (Second) of Torts? How does UCC Article 3 play into this situation? Page: 1 2 1. Question : (TCO F, G) Your home is burglarized. Among the stolen items is a $3,000 custom-made pendant from your grandmother. You are heartbroken. The lead detective on the case, Jack Clouseau, is as bad as the inspector in the movies, so you circulate flyers around the neighborhood and the local stores and pawn shops and offer a $500 reward for information leading to the recovery of the item, no questions asked. Shortly thereafter, you receive a call from Giovanni, the local pizza parlor owner telling you he saw the local hoodlum’s girlfriend, DeeDee Flat wearing the pendant described in your flyer. You call the police and meet them at the pizza parlor, where DeeDee is confronted and placed under arrest. DeeDee claims she purchased the pendant from the local pawnshop and is a bona fide purchaser for value. While this drama unfolds, Giovanni receives a certified letter informing him that the pizza ovens he ordered F.O.B. point of shipment from Philadelphia were destroyed in transit. The letter includes a bill for the ovens. Giovanni is outraged. He never even saw the ovens and he is being billed for them. i. Giovanni is now claiming the reward. Does he collect? Explain. ii. DeeDee claims because she is a bona fide purchaser for value, that she is entitled to keep the pendant. Is she correct? Why or why not? iii. Who is responsible for the loss of the pizza ovens in transit the shipper or Giovanni? Explain. 2. Question : (TCO C, D/G) Current legislation limits the amount of economic-related liabilities to be paid by a company on account of an oil spill to $75 million. A move to amend that legislation and raise the liability cap to $10 billion was blocked in the Senate because Big Petroleum, who is responsible for a recent spill, has given its word that it would cover the cost of all damages and cleanup costs deriving from a recent oil spill in an ecologically significant marine area that supports a thriving fisheries and recreation industry and is home to many endangered and threatened marine animals and waterfowl. Big Petroleum’s chairman of the board made the statement after convening a special meeting of the board and studying videos of the damage taken by film crews. It is estimated that actual costs of clean up and industry losses could even exceed the $10 billion proposed cap. Meanwhile, other oil companies involved in the oil spill have now gone to court invoking limits on their liability as provided by law. As a stockholder in these companies, you are concerned about your investments in oil, as a dip in your stocks could ruin your retirement and that of other investors, including several pension plans that are heavily invested in oil. However, you are outraged at the companies that are seeking to limit their liability as permitted by law because you think corporate citizenship demands these companies correct the damage from this disaster. i. What is the justification behind the decision of boards of directors of the oil companies seeking limitation on damages? Explain. ii. Is the board of directors of Big Petroleum committing waste of corporate assets by its decision not to invoke the legal limitation of damages? 3. Question : (TCO C, D, G, H) Jerald is a janitor for the Murray Motel. The Murray Motel is partnership venture between Harold Murray and Harriet Murray-Mavis. The Murray Motel liability insurance lapsed last month leaving the Murray Motel uninsured. Jerald negligently left a mop and water bucket in the hallway. Georgia, a guest of the Murray Motel, exited her guest room and tripped over the bucket. She broke her leg. Who is liable? What about the partners of the Murray Motel, what type of liability may they have and what could they have done differently? Discuss. [Show More]

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