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– Use IRAC format!- No need to include the questions themselves in the email- Answer 3 out of the 4 questionsI attached examples on how to IRAC format should be as well as the questions.



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The IRAC method is a framework for organizing your answer to a business law essay
question. The basic structure is: Issue, Rule, Analysis, and Conclusion. Using this simple
framework for structuring your answer will ensure that you have written a complete answer.
Begin your answer by stating the issue presented by the essay question.
Sometimes the question will provide the issue for you. If not, then ask: What is
the legal question that, when answered, determines the result of the case? The
issue should be stated in the form of a question in a specific, rather than general
form: “Is there an agency relationship if there was no compensation paid?”
would be an acceptable issue. “Will the plaintiff win?” would not be acceptable.
Note that the issue may be case specific, mentioning the parties’ names and
specific facts of the case. Example: “Did Jones have an agency relationship with
XYZ Corp. due to his acting on behalf of XYZ and following its instructions?”
The issue can encompass all cases which present a similar question. Example:
“Is an agency created whenever there is an employment relationship?” Most
cases present one issue. If there is more than one issue to address, then you must
write a separate IRAC analysis for each issue.
The rule describes which law or test applies to the issue. The rule should be
stated as a general principal, and not a conclusion to the particular case being
briefed. Example: “An agency relationship is created when there is an
agreement that the agent will act for the benefit of the principal at the principal’s
direction or control regardless of whether compensation is paid” would be an
acceptable rule. “The plaintiff was the defendant’s agent” would not be an
acceptable rule. Do not use parties’ names or specific facts from the case. Hint:
Frequently, the rule will be the definition of the principle of law applicable in the
case. Example: An agent may not use or disclose confidential information
acquired through the agency absent an agreement to the contrary.
The analysis is the most important, and the longest, part of your answer. It
involves applying the Rule to the facts of the problem or question. You should
use the facts to explain how the rule leads to the conclusion. Discuss both sides
of the case when possible. Important: Do not merely state a conclusion without
also stating reasons for it. A conclusion without reasons or explanation means
that you have not used the rule and the facts to analyze the issue. Hint: The rule
can be used as a guide in your discussion. Example: Suppose the issue is
whether A is an independent contractor. Using the facts of the case, explain
whether or not they fit into the definition of what is an independent contractor:
“In this case, A was told by the foreman what to wear, how to operate the
machine, and when to report to work each day, giving her little control over the
job.” If the rule is a test with multiple factors, then you must analyze each factor
by pointing out how the facts do (or do not) fulfill each factor.
The conclusion is your answer to the Issue. State the result of your analysis.
Examples: “Smith is liable for negligence” or “Therefore, no valid contract was
formed between X and Y.” If there are multiple issues, there must be multiple
conclusions as well.
Caroline was employed as a receptionist for ABC Corporation. Her desk was located
at the entrance of the corporate office and her duties were to greet customers, answer
telephone calls, sort mail, and respond to general requests for information about ABC. One
day, while all of the managers of ABC were out of the office, a representative of XYZ
Insurance Co. stopped by to solicit ABC as a new client. He told Caroline that he wanted to
find out whether ABC might be interested in canceling its present employee health insurance
plan and adopting a plan provided by XYZ. Although Caroline explained that none of the
ABC managers were in the office, the XYZ representative nevertheless described his
company’s health insurance plan in detail. When Caroline reacted by stating that XYZ’s
plan sounded better than the current ABC plan, the XYZ representative immediately
produced a contract for Caroline to sign. Reluctantly, Caroline signed the contract accepting
the offer to adopt XYZ’s insurance plan. If XYZ seeks to enforce the contract against ABC,
is ABC bound to the contract?
Whether the insurance contract is binding on ABC Corp.
depends on whether A had actual or apparent authority to
enter into it. Actual authority is the agent’s power or
responsibility expressly or impliedly communicated by the
principal to the agent. Express actual authority includes the
instructions and directions from the principal, while implied
actual authority is the agent’s ability to do whatever is
reasonable to assume that the principal wanted the agent to
do to carry out his or her express actual authority. Here,
Caroline’s express authority was to answer phones, direct
messages, collect and sort the daily mail, greet visitors, and
schedule appointments for the company managers. Her
implied authority was to do anything reasonably related to
performing those duties. She was not given any express
authority to sign contracts, and signing contracts was not
related to or implied in her duties as a receptionist.
Therefore, Caroline had no actual authority to bind ABC to
the contract.
First, the main issues to be
addressed are stated.
Apparent authority arises when the principal’s conduct, past
dealings, or communications cause a third party to
reasonably believe that the agent is authorized to act or do
something. In this case, ABC did not communicate to XYZ
that Caroline had authority to enter into an insurance
contract, and no facts suggest that ABC and XYZ had done
business in the past. The nature and typical responsibilities
of Caroline’s position as a receptionist does not make it
reasonable for the XYZ representative to conclude that she
was empowered to select and approve health insurance
plans for ABC’s employees. Thus, Caroline had no
apparent authority to authorize the contract. Because
Caroline did not have either actual or apparent authority to
sign the contract, it is not binding on ABC Corp.
The general rule of law to be
applied in analyzing the next
issue is stated.
Next, the applicable rules of law
or legal tests to be used in
analyzing the issue are explained.
The rule of law or legal test is
applied to the facts. Note that the
facts are not merely repeated;
rather, they are linked to elements
of the rule or test as evidence to
explain and justify the ultimate
conclusion that there is no actual
Conclusion as to the first issue.
The rule is applied to the facts.
Note that the facts mentioned are
those that relate to the definition
of apparent authority.
Conclusion for the second issue.
An overall conclusion is reached
as to the issue of liability.
IRAC Example
Person “A” walks into a grocery store and picks up a loaf of bread. He then stuffs the bread
beneath his jacket. A security attendant sees him and follows him to the cash register. Person A
passes through without stopping to pay for anything. The security attendant stops him at the gate.
He detains person A while he interrogates him. Person A is unresponsive and uncooperative and
in fact downright hostile to the charges being leveled at him by the security attendant. Person A
is held for a period of two hours at the end of which it is found that he had actually put the loaf
of bread back and was not stealing. Person A sues the grocery store for false imprisonment.
Would person A prevail in court?
Was person A falsely imprisoned?
Most jurisdictions in the United States allow recovery for false imprisonment.
The courts look at two elements in determining whether a person has been falsely
imprisoned, namely just cause and authority. In looking at the element of just
cause, courts further analyze two factors: reasonable suspicion and the
environment in which the actions take place.
If a person suspects that he is being deprived of property legally attached to him
and he can show that his suspicions are reasonable then he is said to have a
reasonable suspicion. Courts also look at whether the activity in question took
place in an environment where stealing is common. Crowded public places and
shops are considered to be more justifiable places where a person could have just
cause for reasonable suspicion in comparison to private property or sparsely
populated areas.
In looking at the other element of authority, the courts tend to favor people
directly charged with handling security as people with the authority to detain a
person in comparison to private individuals. The courts have made exceptions in
the favor of the person conducting the detention if he is a shopkeeper. This
special privilege is called the shopkeeper’s privilege. In general the element of
authority is usually seen as one part of a two part legal justification for legally
justifiable detention. For example in cases involving detention by an officer of
the law, courts have ruled that the officer has to have both just cause and
authority. Authority in itself is not enough. The same reasoning applies to all
detaining individuals. Exceptions are made in the case where a person of
authority has to conduct an investigation with just cause and courts usually grant
a reasonable amount of time in detention for this purpose. Here the reasonable
amount of time a person can be kept in detention is directly related to the
circumstances under which the detention takes place.
Person A was conducting his activity in a crowded place that happened to be a
grocery store. He was further detained by a security attendant. The security
attendant had seen him pick up a loaf of bread and walk past the cash register
without paying. The security attendant detained him until he discovered that no
theft had taken place. Person A was subsequently released upon this
determination of fact.
A court looking at these facts would try to apply the two elements of false
imprisonment. The first element of false imprisonment is just cause. The first
factor of just cause is reasonable suspicion. The security attendant saw person A
pick up a loaf of bread and stuff it beneath his jacket. This is an uncommon
action as most grocery shop customers usually do not hide produce under their
personal belongings. The security attendant, therefore, has reasonable suspicion
because a reasonable person in his place would have also considered this action
to be suspicious. Person A further walks by the cash register without paying. The
security attendant has already seen person A hiding the bread under his jacket and
honestly believes that person A is still in possession of the loaf of bread. A
reasonable person in the security attendant’s stead would arguably act to stop
person A. Thus, this seems to satisfy the first factor of the element of just cause,
reasonable suspicion.
The second factor of the element of just cause is the environment. The activity
takes place in a grocery store. A grocery store is usually a place where shoplifters
and other thieves operate regularly. This reduces the burden of just cause placed
on the person performing the detention. The security attendant has to be
unusually vigilant and suspicious of a person’s motive because of his location.
This then seems to satisfy the second factor of the element of just cause,
The second element of false imprisonment is authority. The person performing
the detention of A is the security attendant of the grocery store. He is the person
charged with securing the grocery store and its property. The security attendant
sees person A put the loaf of bread underneath his coat and walk through the
checkout without paying. The security attendant now has to act because he has
been charged with the security of the store and he has just cause. The security
attendant performs the investigation after he puts person A in detention and it
takes two hours. Two hours might seem like an unreasonable amount of time but
given the fact that person A was unresponsive and uncooperative it seems to be
reasonable. It also seems as if the security attendant was doing his due diligence
as he releases person A as soon as the facts are established and it is shown that
person A was not stealing the loaf of bread.
Finally we have to look at the fact that since the activity took place in a grocery
store, the shopkeeper’s privilege applies directly to the security attendant in
charge of securing the store and its property. This privilege gives the security
attendant extra leeway in detaining people in whom he has reasonable suspicion.
Most courts would lean heavily towards the shopkeeper because person A was on
the property of the grocery store and thus could be subjected to extra scrutiny
given the long history of the shopkeeper’s privilege in common law.
Person A would most likely not prevail in the courts because the security
attendant does not satisfy either element of false imprisonment. The detention of
person A was legal because the security attendant had both just cause and
authority. Additionally, the shopkeeper’s privilege further solidifies the legality of
the detention. Person A, therefore, has no recourse under the law.
Name _______________________
Quiz #3—Bus. 125
Answer 3 out of the 4 questions. Be sure to use IRAC when responding.
1. Rich kid, Richie, is 16 years old. He uses a fake license and buys a car with cash at the local car
dealership. A week after the purchase, Richie gets into an accident and totals the car. Richie
pays to have the totaled car towed to the dealership and asks for his money back. What are
Richie’s options? Can Richie get his money back?
2. 18-year old Tricia wants to buy a car, but needs a loan to get the car. Because Tricia doesn’t have
any credit, the dealership insists that Tricia’s mother co-signs the loan. Tricia asks her mother to
co-sign the loan. In front of the sales people, the mother verbally agrees to co-sign the loan. The
car costs $3,000. While the original agreement with Tricia is in writing, the dealership forgets to
have Tricia’s mother co-sign the agreement. Tricia defaults on several payments and the
dealership repossesses the car and decides to go after Tricia’s mom for the remaining amount
owed. Who wins and why?
3. Patricia is the president of Best Foods Corporation, a wholesale grocery company. An inspection
by Bob, a government agent, uncovers unsanitary conditions caused by Tom, a Best Foods
employee. In the Best Foods Warehouse, Wanda, a Best Foods vice president, assures Bob that
the situation will be corrected but nothing is done, which a later inspection reveals. Patricia
knows nothing about any of this. Can Best Foods be convicted of a crime in these circumstances?
Why or why not? Can Patricia be held personally liable? Why or why not?
4. A and B were friends. From 2007-2010, A worked for B and helped build B’s business until the
end of 2010 when A became too sick to work and incurred significant medical expenses. In
2011, B writes to A, “For all you have done for me over the years, I’ll pay you $1m to cover your
medical expenses.” B does not pay A the $1m. A dies in 2012 and A’s estate sues B to recover
the $1m. Can the estate recover? Why or why not?

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