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business law issues for interoffice memorandums

Giant Batteries, Inc. is a large corporation that manufactures batteries for large industrial and agricultural vehicles. Over the past few months, it has experienced an overwhelming amount of legal problems and litigation. The president of Giant Batteries, Ima Dummie, consults with the law firm at which you work seeking legal advice and counsel relative to the companyâ??s various legal issues. The senior partner for the firm has asked that you research each of the issues presented by Mr. Dummie and prepare an interoffice memorandum outlining the law as it relates to the issues as well as an analysis of the actions that the corporation should take in remedying the situation, if necessary. The senior partner of your firm has asked you to address the following six (6) issues in an interoffice memorandum of no more than six (6) pages:

1. One of Giant Batteries salespersons, Joe, anxious to make a sale, intentionally quoted a price to a customer that was $600 lower than Giant has authorized for that particular product. The customer purchased the product at the quoted price. When Giant learns of the deal, it claims that it is not legally bound to the sales contract because it did not authorize Joe to sell the product at that price. Is Giant Batteries bound by the contract? Fully discuss.

2. One day, Tina, a Giant Battery employee, suffered a serious burn when she accidentally spilled some acid on her hand. The accident occurred because another employee, who was suspected of using illegal drugs, carelessly bumped into her. The hand required a series of skin grafting operations before it healed sufficiently to allow Tina to return to work. Tina wants to obtain compensation for her lost wages and medical expenses. Giant claims that it is not legally required to compensate Tina in that regard. Fully discuss the law as it relates to Giant's legal responsibilities for compensating Tina.

3. After Tina's injury, Giant decides to conduct random drug tests on all of its employers. Several employees claim that the testing violates their privacy rights. If the dispute is litigated, what factors will the court consider in deciding whether the random drug testing is legally permissible?

4. The Federal Trade Commission (FTC) has learned that Giant Batteries engages in deceptive advertising practices. What actions can the FTC take against Giant?

5. Giant faces stiff competition from Bigger Batteries, Inc., another battery manufacturer. To acquire control over Bigger, Giant makes a tender offer to Bigger's shareholders. If Giant succeeds in its attempt and Bigger is merged into Giant, will the merger violate any antitrust laws? Suppose the merger falls through. The vice president of Giant's battery division and the president of Bigger agree to divide up the market between them so they will not have to compete for customers. Is this agreement legal? Fully explain.

6. Ima Dummie learns that Giant's shareholders are contemplating a takeover of a rival. Mr. Dummie tells his wife about the possibility. His wife calls their broker who purchases shares in the target corporation for both her and her husband. Has Mr. Dummie violated any security laws? Has his wife? Has the broker? Fully explain.

Prepare an interoffice memorandum answering the six (6) issues mentioned above and advising your senior partner on the most advisory course of action for Giant Battery to take. Be sure to support your analysis with cites to applicable case law and other scholarly legal authority.

Solution Preview

Subject: Business law
In the first situation Giant Batteries' sales person quoted a price that was lower than price provided by the company. Te customer bought the product at the quoted price and Giant Batteries claims that it is not bound to the sales contract. In this situation there are two factors to consider and this includes Sales of Goods Act and agency contract. Sales of Good Act provide that a sales contract exists when the seller transfers or agrees to transfer property to the buyer in exchange for money consideration. Therefore a sales contract existed between the seller who is the sales person and the buyer who is the customer. an agency agreement exists between Giant Batteries and the salesperson because the sales person was contracted to sale the product on behalf of the company.
Giant Batteries is legally bound to the sales contract because it had authorized the salesperson to act on its behalf in selling the product and also the customer did not have knowledge that the salesperson was acting out of authority. Giant Batteries is therefore bound to the sale contract for actions made by its agent and thus the product is going to pass to the customer. The salesperson had actual authority since there existed a consensual agreement with Giant Batteries and the customer relied on the agent's representation that it reflected actual price provided by Giant Batteries.
The Sale of Goods Act when a third party is prevented from making the property valuation due to the fault of the seller or buyer then the party which is not in fault can seek damages from the party responsible. Also agency contract provides that when an agent has acted beyond his authority then the principal can seek damages. Giant Batteries is bound to the sales contract but can take legal action to seek damages for loss incurred due to under pricing.
In the second situation Giant Batteries, Inc claims that it is not bound to pay compensation to an employee who was injured due to co-worker negligence. Employers may be legally liable for injuries which are a result of a co-worker's actions. Employers can be bound to pay injury compensation when an employee inflicts pain on a coworker, and other third parties such as customers. Nolo (2011) provides that under the doctrine of respondeat superior, the employer is responsible for actions carried out by its employees. Respondeat superior is meant to ensure that the employer is responsible for business cost including carelessness on part of the employees or due to misconduct. The rule applies when the employee was carrying out his or her job or was acting on behalf of the employer when the accident happened.
Department of labor (n.d) provides that the employer should compensate an injured employee on lost wages, medical costs, and effects of the injury such as disability and death. Actions that Giant Batteries should take to remedy the situation includes compensating Tina for her lost wages and medical expenses and terminate employment in relation to employee suspected ...

Solution Summary

Business law issues for interoffice memorandums are examined.