Case Study 1 – Management of Corporations

Greg is executive vice-president of Innovative Designs, Inc., a small graphic design company that designs annual reports and similar documents for corporations. While working at the Innovative Designs booth at a trade show, Greg is approached by Tabitha, who says, "I know your company primarily produces annual reports and corporate documents, but I've heard good things about you personally. I'm publishing a calendar next year that will be sent to all of our company’s customers and would be interested in hiring you to do the layout." Greg takes Tabitha's card and says he'll get back to her. He then returns to the office and considers mentioning the conversation to his boss, the CEO, but determines that the offer was made directly to him because of his skills and not Innovative Designs. Greg calls Tabitha and accepts her offer.

Explain the legal and ethical issues related to Greg’s acceptance of the offer.

Case Study 2 – Warranties

Explain the differences between implied warranties in particular sales, implied warranty of merchantability or fitness for normal use and express warranties. Provide an example of each of the three warranties, but do not use the examples provided in the Twomey & Jennings textbook.

Case Study 3 – Strict Liability

Steve and Barbara Cross purchased a trampoline for their two children. The trampoline came with an instruction booklet for assembly and a warning label affixed to the trampoline. Davey Cross and his friend Billy Richmond, both 16 years old, were jumping on the trampoline one afternoon after school while Davey’s parents were at work. Billy attempted to do a back flip on the trampoline and landed on his back on the ground. The fall fractured Billy’s spine and resulted in paraplegia. Billy’s parents filed a strict product liability lawsuit against the manufacturer, in which they claimed the trampoline was defective because of inadequate warnings and instructions.

Explain the arguments that will likely be made by Billy’s parents and the manufacturer of the trampoline.