Sarah Babcock

Business Law
Final Exam
December 16, 2015
The legal issues in this case are, a breach of contract, disparate treatment, fraud,
infringement of copyright, negligence, disparagement, defamation, copyrights, and trademarks.
CONTRACT:
Santa had a contract, a leally enforceable agreement, expressed or implied (81) with
Jane and Sally. An offer may be transmitted by acts or words, spoken or written, directly to the
offeree, or in conversation, through mails, by wire, by messenger, or through any medium
whatsoever. (87) By Santa inviting Jane and Sally to his headquarters to discuss opportunities,
and then proposed a deal to them, that if Sally and Jane develop the software website, he would
give them interest in his company. The requirements for an offer are that 1. it must indicate a
clear intent to make a contract. 2. It must be sufficiently definite so that a court can determine the
actual intent of the parties. 3. It must be communicated to the other party (88) The intent that
Santa wanted to do business with Jane and Sally was clear when he proposed his deal, and it was
fully communicated to Jane and Sally that they needed to develop software and a website to track
the manufacture and distribution of the gifts for the interest in Santas company.
This contract can represent an unilateral contract, which depends on the performance of
an act by the offeree, some courts consider that the offer can be revoked unless there has been
substantial performance. (90) Santa did not revoke the offer until after Jane and Sally performed
their part of the deal, making him breach the contract by not giving his the interest of his
company, like he promised.
Acceptance in a unilaterally offer is noted as equitable principles of fair play may
operate in many courts to favor an innocent party who has acted in good faith in reliance upon

the unilateral offer and has clearly begun to do the requested act before the offer was withdrawn.
Of course, substantially performing or completing the requested act constitutes acceptance in all
courts. (92) By Jane and Sally developing the program according to Santas specifications, is in
good faith, and delivered a completed program to Santa, before he refused to pay.
There is consideration, which is, any lawful alteration of responsibilities that is given in
exchange for the other persons consideration. It is based on the idea of quid pro quo (something
for something): some action, forbearance, or promise (94) There is a promise or an action on
each side (94) Santa is giving Jane and Sally interest in his company for their action of
developing him a specific software.
Both parties were legally competent, and have the power to make a binding contract and
can be held to any promises contained therein. (87), so there was capacity of the parties to make
this contract valid.
There was legality in the subject matter of Santa giving Jane and Sally interest in
exchange for their development of software. Theyre is no violation of common or statutory
law, or against public policy (98), so this contact is legal.
If Santa argues that there was no promise, under promissory estoppel, he is still held
liable to the contract agreement with Jane and Sally. Promissory estoppel occurs when a
promise is made without any consideration, but the promise, relying upon the gratuitous promise,
takes certain action, or fails to take action, to his detriment. (97) Jane and Sally acted on Santas
promise to give them interest for the developed software and website. The promisor should
know, or reasonably expect, that the promise will act in reliance (97) Jane and Sally relied on
Santa to hold up his end of the promise, and they took the action to develop the software and
website that cost them months of their time. There was a promise made by Santa, and an action

took by Jane and Sally. They depended on him to give them the Interest in the company for the
software they produced for him.
There was a contract between Santa, Sally, and Jane. Because Jane and Sally provided
their end of the agreement and Santa refused to provide them their shares, there has been a
breach of contract by Santa. Santa is required to give Jane and Sally compensation for their
work, or damages. Damages refers to the compensation due the nonbreaching party to recover
any financial loss or injury caused by a breach of contract. (154)
Compensatory damages indicate that the breach has caused measurable damages to the
plaintiff, the court will try to compensate the plaintiff by awarding a sum of money sufficient to
make him/her whole(154) Santa will owe Jane and Sally the money value on the injury this
modern law, takes that money from the wrongdoer as a compensation to the injured party.
(155) Santa is liable for the many months of work they did to complete the software and website
to Santas specifications.
The courts will award compensation for damages only if (1) damages can be proved
with reasonable certainty, (2) they were reasonably foreseeable when the contract was made, and
(3) the plaintiff used every reasonable effort to mitigate damages(160) The loss of payment is
certain, not speculative, Jane and Sally should be rewarded the dollar value of the interest of
Santas company. Santa made millions of dollars of of the site, so it is certain that there is a loss
of payment.
EMPLOYMENT:
Under employment law Title VII, Softmicro has prohibited discrimination under
disparate treatment. Title VII outlaws discrimination in hiring, firing, promotion, compensation,
or any other aspect of employment, because of an individuals race, color, religion, sex, or

national origin.(558) Softmicro laying off higher paid workers who had been with the company
the longest in the US and hiring software programmers in the Far-East is discriminating against a
national origin.
To win under disparate treatment, the plaintiff must demonstrate what appears to be
discrimination on its face (e.g., she interviewed for a job, she was qualified for that job, she was
not hired, and the employer continued to search for a new employee). (560) Sally and Jane were
laid off, even through they were proven to be experts, and highly qualified for their job. Because
they are discriminating against U.S. workers Sally and Jane can prove that they are a member of
a class of person VII protects and (2) was denied position or benefit that they sough and was
qualified for and that was available(560) Softmicro rid Sally and Jane, who were qualified
because of their national origin (the U.S.) and then the company continued to find someone to
take the available position.
Sally and Jane could continue to prove that he/she was unlawfully discriminated against
and that the grounds the employer offered for its actions were only a pretext or pretense (that the
defendant, in fact, practiced discrimination). (561) Softmicros hiring criteria is based on that they
are laying of higher paid workers who had been with the company the longest in the U.S, the
matter of the fact that it is only applied to U.S. workers and no other origin is proof of intentional
discrimination.
Jack Frost Industries is an independent contractor hired by Santa. Under employment law
an independent contractor, is hired to achieve a purpose, to do a job, to undertake a
contractually defined result. How the contractor achieves the end result and what tools and
techniques are used are his/ her responsibilities.(286) Jack Frost Industries is working for the
purpose to create a device that will run Santas software. The contractor is chosen to accomplish

a result to his/her own means (296) Jack Frost Industries was not under the supervision and
control of the person who hired him/her.(296). As a result the Tracker was produced for Santa.
As an Independent contractor, the end result is his responsibility, and his liability.
TORTS:
The torts, a private wrong, trespass against a person or his/her property for which
damages award or other judicial remedy may be sought(436) found in this case, are intentional
torts of fraud, infringement of copyright, negligence, disparagement, and defamation.
Jack Frost Industries, as an independent contractor has committed an intentional tort of
fraud. An intentional tort was committed because of they knew the Tracker they made had a habit
of catching fire and did not tell Santa, resulting in its explosion and destroying Santas sleigh,
along with the cost of billions of dollars to replace the gifts from the explosion. The defendants
act must be expressly or implicitly intended; the resulting harm need not be intended, but must
have been reasonably foreseeable.(436) The sleigh catching fire was reasonable foreseeable,
because they knew that the Tracker had a habit of overheating and catching fire. This is an
intentional tort of fraud from Jack Frost Industries misrepresentation of the tracker to Santa.
Fraud is, (Deceit, misrepresentation) depends on a false, material representation of fact that the
defendant either knows to be false or recklessly makes knowing that the information is
incomplete.(449) Jack Frost ignored the information of the Trackers habit of catching fire, and
gave it to Santa who relies upon the representation of the product and then was damaged. (449)
Jack Frost Industries as an independent contractor is held liable for the damages caused by the
fraud of the Tracker.
Santa is at fault for a tort of an infringement of copyright. Jane and Sallys copyright on
the creation of GLS program software algorithms, prohibits it from unauthorized use. Santa is

not allowed to reproduce Jane and Sallys original work. Because Jane and Sally did not have
copyright notice on their display, even though it is not required, this only lets them win actual
damages from the infringement. Without registration, a person claiming copyright infringement
can only win actual damages (including lost profits). (590) The act Santa committed was
willful, for he knew that he was taking the software that did not belong to him, so he will be
charged with 150,000 for each willful infringement.(590) This will be awarded to Jane and
Sally for rights of their work under the copyright law
Santa was negligent for glitch in the site that made users lose packages. Negligence must
show four things, (a) there was a duty imposed on the defendant in favor of the plaintiff, (b) the
defendant breached (violated) that duty, (c) the breach was the proximate (natural and
foreseeable cause of the harm (causation), and (d) plaintiff suffered damages.(436) The elves
mistranslated the code, but the elves work for Santa. Santa has the duty to have a working site
thats responsible for the delivery of packages on time. Santa breached the duty with the
ineffective code that caused packages to be lost. Users lost their items, and Tiffanys suffered
millions of dollars in damages from lost rings.
Santa also commits an intentional tort of disparagement, a business defamation that
involves injurious falsehoods about a product or competitors reputation.(446) Because Santa is
blaming Sally and Jane for his problems with their product; he is hurting their business
reputation. In addition, he is also committing the intentional tort of defamation, a false
communication by the defendant to a third person (a publication) that harms the plaintiffs
reputation.(448) Santa is publication that Sally and Jane are naughty, and wont get anything for
Christmas. This is hurting their reputation, making them look like mean individuals. .
INTELECTUAL PROPERTY:

Under intellectual property, which is, a special type of intangible property arising from
the creative endeavors of the human mind. This concept protects inventors, authors of literary
works and composers from having their works pirated. (587) Sally and Jane GLS system
qualifies as copyrightable, and Jack Frost Industries qualifies to trademark the Tracker.
A copyright is the exclusive right to print, reproduce, sell, and exhibit written material,
and other creations placed in a tangible, preserved medium of expression.(589) To qualify as
copyrightable, a creators work must be (1) the authors original work (not someone elses), (2) in
a tangible medium of expression (e.g., written, saved on computer disk or drive), and (3) of some
minimal level of creativity.(590) Sally and Jane developed a revolutionary software program,
GLS, so it is protected as a copyright. It is made up of algorithms that one else has seen up until
now, so it is proven to be original, and the protection of copyright automatically arises when an
original work is first place in a tangible medium of expression. (590). Jane and Sally invented
this algorithm, so they own its copyright. They do not have to register to copyright, neither
publication nor registration with the U.S. copyright office is required to secure a copyright.
(590) The copyright will last for the life of the creator, plus 70 years.(590) Their ownership of
the GLS system is valid abroad, usually valid abroad through a treaty.(591)
They own what they created, and no one else can use it.
A trademark is, a distinctive symbol, word, letter, number, picture, or combination
thereof adopted and used by a merchant or manufacturer to identify his/ her goods.(594) Jack
Frost Industries have the ability to trademark the Tracker they developed. By trademarking their
distinctive name used by Jack Frost Industries and Santa, it acts as a symbol to distinguish one
brand from others(594) Trademarking the Tracker will keep businesses from taking the
reputation of this product. To be protected a trade symbol (1) must not lapse from disuse; and

(2) must remain associated with the business or it products and services(594) The Tracker
device is used for Santa and his software, and associated with Santa. The owner/user of the
trademark can get it though using it or registering it. (594) The trademark of the Tracker lasts 10
years from 1st use and can be renewed for any number of additional 10-year periods. (594) The
trademark can be state or federal, depending on the rights gained. In order for it to be
international Jack Frost Industries would have to go around and get those rights in each country.
CONCLUSION:
In conclusion, based on the legal issues found in the case, it would go to federal court.
Santas case was involved with infringement of copyrights, which is the subject area of the
federal court. Also, diversity of jurisdiction is prevalent, When the opposing parties in a civil
lawsuit are citizens of different states, a matter based on state law can be heard in federal court if
one of the parties requests it and if the amount in controversy is above $75,000.(45) Santa lives
in Alaska, and seeing as Jane and Sally had to make arrangements to go and visit him, if they
were from out of state, the case would be held in federal court. The out of state and over $75,000
applies to Santas negligence causing Tiffanys to loose millions of dollars in lost rings.
Additionally, if Santa making a killing on the first day of trading implies that the compensation
due to Jane and Sally be more than $75,000, he would be heard in federal court based on that
amount.
Due to the discrimination of desperate treatment from Sally and Janes employer their
case would be brought to the federal court as well. The act of discrimination is under title VII in
the constitution, and the federal court has a vast array of subjects to decide, called federal
questions (cases involving the federal constitution, statutes, or treaties.(45) The federal court
can hear this case because of the constitutional subjects.

Based on Jack Frost Industries tort of fraud it would be heard in front of a state court.
For torts, the applicable law is usually that where the injury occurred.(52) Jack Frost Industries
owes billions in damages, so according to the diversity of jurisdiction, if Jack Frost Industries is
found to be located outside of Alaska, then it too would apply to the federal court for a hearing.