Business
Administration 391: Business Law I
Midterm Examination
1.
Barb sues John for
negligence. The jury decides that John
is a jerk but he wasn’t negligence so they award Barb $0 in compensatory
damages and $1,000,000 in punitive damages.
Will Barb be able to collect?
A.
Yes, a court will
never overrule a jury verdict.
B.
Yes, punitive damages
are designed to punish bad behavior like John’s.
C.
No, Barb cannot
collect.
D.
Yes, juries are
allowed to award up to $5,000,000 before a judge reviews their decision.
2.
John carelessly bumps
into Sally, knocking her to the ground.
John has committed the tort of negligence
A.
only if Sally is
injured
B.
only if Sally is not
injured
C.
whether or not Sally
is injured
D.
under no circumstances
3.
Martha owns a
demolition company. If a passerby is
injured during a demolition by Martha’s crew, under the theory of negligence
Martha must pay for the injury
A.
only if the crew
intended to injure the passerby
B.
only if the crew knew the
person was there
C.
only if the injury was
reasonably foreseeable
D.
whether or not the
crew was at fault
4.
Al tells Barb that he
will buy her textbooks from the previous semester for $75. Barb agrees.
Al and Barb have
A.
an unilateral contract
B.
a bilateral contract
C.
an implied-in-law
contract
D.
no contract
5.
Usually, quasi
contracts are imposed
A.
on parties who do not
know how to read and write
B.
to avoid the unjust
enrichment of one party at the expense of another
C.
by a court when the
amount of money at issue is less than $100
D.
quasi contracts are
never imposed
6.
When ambiguities
appear in a contract, they will be construed against
A.
the party with the
greater bargaining power
B.
the promisor
C.
the promisee
D.
the party who drafted
the contract
7.
Keith offers to sell
his business to Debbie for $125,000.
Debbie replies, “Your price is too high. I will buy your business for $100,000.” Debbie’s response is
A.
a counteroffer
B.
a rejection of the
original offer only
C.
the creation of a new
offer only
D.
none of the above
8.
Bo offers to sell a
laser printer to Ike, but it is lost in a fire before Ike accepts. Bo
A.
must obtain a similar
printer for Ike, if he notifies Bo that he accepts the offer
B.
must obtain a similar
printer for Ike, if Ike offers to pay Bo before delivery
C.
is not required to
obtain a similar printer for Ike, because it could take an unreasonable period
of time to obtain a replacement
D.
is not required to
obtain a similar printer for Ike, because the destruction of the original
printer automatically terminates the offer
9.
Agatha promises to pay
Betty, her niece, $5,000 if she will complete her college education. Betty eventually completes her
education. Agatha is
A.
not required to pay
because the promise induced conduct that ultimately benefited Betty
B.
not required to pay
because Betty had indicated that she was considering attending college
C.
required to pay
because Betty’s completion of college entitles her to payment
D.
required to pay
because Betty studied hard and got good grades.
10.
Ned Contractors, Inc.
begins construction of a mall for Van Development Corporation and after six
months demands an extra $100,000. Van
agrees to pay. Imagine that Ned offered
no reason for the extra $100,000, but said only that it would stop working if
Van did not agree to pay. The agreement
is
A.
enforceable because
the parties executed an accord and satisfaction
B.
enforceable because of
the unforeseen difficulties
C.
unenforceable due to
the preexisting duty rule
D.
unenforceable because
the contract is for an amount greater than $5,000
11.
Susie sues ABC
Corporation, DEF Corporation and GHI Corporation. She wins a judgment of $1,000,000. The jury finds that while the defendants were
liable, Susie was also at fault and assigns her 70% of the liability and each
defendant 10%. If Susie lived in state
with “pure” comparative negligence she could recover:
A.
$700,000
B.
$300,000
C.
$900,000
D.
$0 she may not recover
anything
12.
Referring to Question
11, if Susie lived in a state with regular comparative negligence she could
recover:
A.
$700,000
B.
$300,000
C.
$900,000
D.
$0 she may not recover
anything
13.
Kathy and Larry enter
into an oral contract under which Larry agrees to work for Kathy’s construction
firm for eighteen months. Later Larry
changes his mind and decides to work for someone else. Can Kathy sue for breach of contract?
A.
No, because employment
contracts are never enforceable
B.
No, because the
contract would be barred by the Statute of Frauds
C.
Yes, because all
employment contracts are enforceable
D.
Yes, because the
contract could be enforced under the Statute of Frauds
14.
Eve contracts to
repair a computer for National Distributors, Inc. Eve knows that without the computer, National
will lose a sale. Eve does not perform
as promised. National files a suit
against Eve. As consequential damages,
National can recover
A.
the cost of a new
computer
B.
the difference between
Eve’s price and the actual cost of repair
C.
the loss of profit
from the lost sale
D.
nothing
15.
Tina and Melvin enter
into a contract by which Melvin agrees to cut Tina’s grass once a week for
$30. Melvin dies two weeks later. His estate
A.
must find another
person to cut Tina’s lawn for $30 once a week
B.
is discharged from any
further obligations under the contract
C.
is discharged from any
further obligations under the contract only if Tina knew it was unlikely that
Melvin would live to complete the contract
D.
must refund Tina any
money she paid him while she was alive
16.
Jay signs a contract
to provide lawn-mowing services to Michael.
Jay owes Bobby $500 so he assigns the money he is to receive from
Michael to Bobby until Bobby is paid off.
Can Jay assign the money
A.
No, because it is a personal
service
B.
Yes if he receives
Michael’s consent
C.
Yes because you do not
need Michael’s consent to assign the right to payment
D.
No, because the
contract is for under $5,000.
17. Kidtoys, Inc. sells a toy truck with a
dangerous defect. Phil buys the truck for his son but discovers the defect
before the child is injured. Phil files a suit against Kidtoys. Kidtoys could
ask for dismissal of the suit on the basis that Phil does not have
A. jurisdiction
B. standing
C. sufficient
minimum contacts
D. venue
18. Home
Delivery Corporation and Interstate Transport, Inc., sign an agreement that
provides for the payment of “$1,000 by whichever party commits a material
breach of the contract that creates damages difficult to estimate but
approximately $1,000.” This is
A.
a liquidated
damages clause
B.
a
mitigation of damages clause
C.
a nominal
damages clause
D.
a penalty
clause
19. Sid files a suit against
Tina. Before going to trial, the parties meet, with their attorneys to
represent them, to try to resolve their dispute. A third party helps them to
reach an agreement. This is
A. arbitration
B. litigation
C. mediation
D. negotiation
20. A contract between Lee
and Mary may not be assigned if it
A. does not
expressly permit assignment
B. involves a
sale of goods
C. involves
personal services
D. is oral
21. Alan writes Beth a
private letter falsely accusing her of stealing office supplies from their
employer, Consolidated Industries, Inc. This is
A. assault
B. libel
C. slander
D.
misappropriation
22. Best Products Corporation and
International Exports, Inc. enter into a contract for the sale of goods. To be enforceable, the contract must be in
writing if the goods are valued at more than
A.
$50
B. $500
C. $5,000
D. Any of the above
23. Frank sells Bob a car. Frank knows that Bob has a lot of kids and
that one of the biggest features is Satellite radio because he can entertain
his kids easily and always have music playing.
Frank knows that there is a fee for Satellite radio but tells Bob that
the car is fully equipped with that feature and never suggests that it isn’t
part of the car. Bob is beyond excited
that he can finally have peace when he is driving and says great, so long as
the car has satellite radio included we have a deal. A few days later Bob discovers it will cost
him $40/month for satellite radio so he sues Frank for fraudulent
misrepresentation. Can Bob win?
A. Yes, because
Frank knowingly made a false statement about a material fact that Bob relied on
to his damage
B. No, because
Frank didn’t know Bob would use the radio right away.
C. No, it was
Bob’s responsibility to call the radio company before he bought the car to find
out how much it would cost
D. No, but he
could sue him for misappropriation.
24. In a letter, Smith
offers to sell Grant his computer but conditions the sale on Grant accepting
the offer by October 1. Smith may revoke the offer
A. before Grant
mails a letter of acceptance
B. before
receiving a letter from Grant accepting the offer
C. because it is
in writing
D. none of the
above
25. Harold believes his old
baseball bat has little value, but Murray is convinced it is a valuable
collector’s item. Harold sells it to Murray for $100 before learning it is
worth $1,000. The contract
A. may be rescinded because a mutual mistake was
made
B. may serve as the basis for a court order to
Murray to return the bat
C. may be rescinded because Murray used superior
knowledge about the bat to take
advantage of Harold
D. will not be canceled because the mistake
relates to the value of the item
26. Greg’s
agrees to buy Hal’s Sports Store on condition that he is approved by First
State Bank for the financing. This approval is
A.
a concurrent
condition
B.
a condition
precedent
C.
a condition
subsequent
D.
an illegal
condition
27. Ron
makes a contract with Sue that indirectly benefits Tim, although neither Ron
nor Sue intended that result. Tim is
A. a delegate
B. an assignee
C. an incidental beneficiary
D. an intended beneficiary
28. National Data
Corporation files a suit against Associated Services, Inc. to enforce a written
contract between the parties. Parole
evidence will be admitted to prove
A. a subsequent
modification of the written contract
B. contemporaneous
negotiations that vary the written contract
C. prior
negotiations that vary the written contract
D. parole
evidence cannot be used with contracts only in negligence cases
29. Sarah and Mike enter
into a contract by which Sarah agrees to pay Mike $100 for a new watch. Mike’s
transfer of his right to receive payment for the new watch is
A. an assignment
B. a delegation
C. a third party
beneficiary contract
D. quasi-duty
30. Pat, a world famous musician and
composer, agrees to give ten piano lessons to Quinn in exchange for
$1,000. Pat’s attempt to delegate his
contract to Ruth, an inexperienced pianist, will probably be
A. permitted
because contracts may be freely delegated
B. permitted
because the contract is concerned with music lessons
C. prohibited
because contracts may not be freely delegated
D. prohibited
because Pat and Ruth have very different skill levels
Short Answer Questions:
Please answer the following questions in a few
sentences. You do NOT need to write
multiple paragraphs. Feel free to type
your answers or submit written answers on additional sheets of paper.
- Describe an example,
other than one from the book, of proximate cause and how it would be used
in a negligence case. - Barb, a resident of Wisconsin sues Dennis a resident of Illinois for
breach of contract and is seeking $250,000 in damages. Dennis thinks all Wisconsin people are
stupid so he would prefer to try the case in Federal Court. Can he do so and, if so, how? - Why do courts create
quasi-contracts? - What is the difference between a
patent and a copyright?
Essay Questions:
Please answer the following questions fully. It does not need to be pages upon pages, but
you must cover all the elements for each topic. Feel free to type or submit written answers
on additional sheets of paper.
1.
John owns a UWM Brew Pub. Business has been slow because a competitor
opened up down the street and they have better food and drink specials. Instead of trying to compete, John wants out
of the bar business. He is at a party
with a number of friends and says “I hate the bar business, I might sell if I
could get anything over $250,000 for my bar or something decent.” Ryan hears it and says “I accept.” The next morning Ryan calls John to ask when
he can drop off his check for $250,000 and pick up the keys to the UWM Brew
Pub. John tells Ryan he’s not selling so
Ryan sues. Who wins and why? What defenses does John have and what
arguments would Ryan need to make to prevail?
2.
Holly owns Holly’s Health Studio a gym that
offers many types of fitness classes.
One class that is offered is group weightlifting. One day the 9am class consists of 20 people
and is very crowded. Immediately after
the 9am class leaves the 10am class comes in.
Between the number of people in the 9am and the fact that it is 102
degrees outside the floor in the studio is full of water puddles of sweat. During the 10am class Billy slips on a puddle
of sweat and falls into Susan who is his workout partner for that
exercise. Billy twisted his ankle and
Susan broke her arm when she tried to catch herself during the fall. Who can Billy sue and why? Who can Susan sue and why? What defenses exist for anyone you said could
be sued?
