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Question and Problems Essay

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Question 19-5 Principles duty to agents

            Boehm did violate his duty to his agents. In the principal-agent relationship, the principal has a duty to cooperate with his agent so as to ensure that the agent is in a position to perform his duties. Boehm agents had a duty to negotiate and formulate an SPA of which they did by February, Boehm however refused to sign it as agreed. The agents after a renegotiation of their pay drafted another SPA of which Boehm still refused to sign even though his demands had been met. By this refusal, Boehm was not being cooperative and thus making his agents work difficult to perform (Cengage Learning, 2009).

Question 19-8 Agents duties to principal

            The court should not admit the testimony. The basis for this objection would be that Bob Sun who is the agent breached his duty of owing loyalty to his principal. An agent has a duty of being loyal to his principal and to disclose all information to his principal. The agent in this case negotiated secretly and sold the business to his daughter and thus did not act in the best interest of his principal. As such, the court should not admit Frances’s testimony (Cengage Learning, 2009).

Question 26-1

            Lobbying is an exception to the antitrust laws and by itself it is allowed. However, an organization may be held liable of breaking the antitrust laws if its actions are baseless in an objective manner in the light that a reasonable person would not expect success based on merit. Such is viewed as using government processes to gain a competitive edge (Cengage Learning, 2009).

Question 26-2

            If an antitrust action is leveled on specialty agency by other firms, specialty agency would be found guilty of breaking the predatory pricing rules. Some of the factors which could be considered are the position of specialty agencies in the market. Since they are not newcomers in the market, the predatory pricing may work against them. Also, the firms are in the same geographical area and thus predatory pricing may be seen as a means to gain monopolistic powers by specialty agencies. The long term effects on consumer should also be considered while deciding this case (Cengage Learning, 2009).

Question 26-7

            To succeed in this case, the government must prove that Dentsply possesses monopoly power and that Dentsply are willfully acquiring and or maintaining this power regardless of the quality of their produces or business history. In the case provided, these two elements are present. Dentsply enjoys more than 75% market share though its products are not in any way superior to those of its competitors. The intent to monopolize is seen by the fact that this company restricts its dealers from advertising products of other companies (Cengage Learning, 2009).

Question 27-1

            By setting the prices at the same level by industries, such agreements are deemed as being anticompetitive and thus illegal. Such an agreement is referred to as per se violation by the antitrust laws and thus the court should rule against the sellers. The justification available to the wholesalers could be due to prevailing market conditions which could be detrimental to the businesses if the agreement was to be continued (Cengage Learning, 2009).

Question 27-2

            Such a case would be determined by the rule of reason. If the court can ascertain that such an arrangement would not result in anticompetitive effects, then the company would not have broken any antitrust laws. If such an arrangement is meant to reduce cost without affecting the smaller firms as well as the consumer, such a ruling would in favor of the company (Cengage Learning, 2009).

Question 28-1

            His brother Gustavo is right. This is because since the establishment of state laws, all public offers should be registered with the securities and exchange commission of that state. Although the federal governance would not require Estrada Corporation not to register, the company has to comply with the state’s regulations (Cengage Learning, 2009).

Question 28-4

            Bleankney should be asked to return the profits to the corporations. This is because NMC though it said nothing about potential liability, they had provided guidance on insider trading of which Bleankney was aware of. Insiders reporting and trading act of 1934 section 16 dictates that such profit should be returned (Cengage Learning, 2009).

Question 28-9

            To prosecute under section 10(b) and section 105(b) of the securities exchange act, one must prove that the defendant made false allegations or statement or failed to disclose facts which were material to enable the plaintiff make informed decisions. In this case, the defendant failed to disclose information on intended program to the plaintiffs making the defendant to be liable. However, the potential investors are to be blamed since they did not question the investment venture before investing their monies (Cengage Learning, 2009)



Cengage Learning (2009)