Business Law Fall 2005 Midterm

Business Law Fall 2005 Midterm

October 25, 2005

Professor Steven L. Isler

True/False

Indicate whether the sentence or statement is true or false.

____1.Most oral contracts are invalid.

____2.Jennifer orally contracts to purchase a television for $450. This contract is legally enforceable.

____3.Police leave the keys in a car and arrest for car-theft someone who attempts to drive the car away. This is entrapment.

____4.Francis has many traffic tickets and fears that her license will be suspended if she gets another traffic ticket. When stopped for speeding, she hands over her license to the police officer with a $100 bill clipped to the license. Francis has committed bribery.

____5.The person to whom a promise is made is the promisor.

____6.In the case of an offer, there must be serious intent, clear and reasonable terms, and communication to the offeree.

____7.Teri sends an offer to Morris to sell her car for its Blue Book value. Morris is the offeror.

____8.Most of the time, advertisements are specific enough to constitute an offer.

____9.Sandra mistakenly tells Mike that the new lawnmower he is purchasing has a five-year warranty when in fact it has a three-year warranty. Sandra has engaged in fraud.

____10.In some states a lawful marriage emancipates a minor.

Multiple Choice

Identify the letter of the choice that best completes the statement or answers the question.

____11.Henrietta offers a $500 reward for the return of Fifi, her lost dog. “J T The Bigga Figga” finds and returns the dog. This is a(n) _____.

a. / bilateral contract
b. / unilateral contract
c. / quasi contract
d. / unenforceable contract

____12.Deez Nuts Inc. and the Acme Co. sign a document that states that Deez Nuts will create a Web page for Acme and Acme will pay for this work. This is an example of _____.

a. / an implied contract
b. / a quasi contract
c. / an express contract
d. / an implied-in-law contract

____13.Jessica Alba, acting as an employee at Fast Change Inc., promises to change the tires on Harvey’s truck in fifteen minutes. Jessica Alba is the _____.

a. / Promise
b. / Promisor
c. / Promissory
d. / Promisseer

____14.On May 1, Lil Kim and her local utility company enter into an agreement in which Lil Kim will pay $75 for the use of all electric utilities in an apartment she will sublet from May 15 until September 15. The utility company agrees to turn on the apartment’s electricity on May 15. Lil Kim pays the $75 bill on May1.

a. / The contract is executed on the part of Lil Kim and is executory on the part of the utility company.
b. / The contract is executory on the part of Lil Kim and executed on the part of the utility company.
c. / The contract is executory on the part of both Lil Kim and the utility company.
d. / The contract is executed on the part of both Lil Kim and the utility company.

____15.Two parties write up an agreement. The agreement includes the date, the name and address of each party, the promise of the seller, the promise to the buyer, and signatures of the parties involved. This agreement is a _____.

a. / valid, bilateral, implied, and formal contract
b. / valid, bilateral, express, and informal contract
c. / valid, unilateral, express, and formal contract
d. / voidable, bilateral, implied, and informal contract

____16.Snoop Dogg, 15, enters into a written contract with Method Man, also 15. In the contract, Snoop Dogg agrees to do Method Man’s math homework for two weeks for $50, which Method Man agrees to pay at the end of the two-week period. This contract is _____.

a. / implied-in-law
b. / void
c. / unenforceable
d. / voidable

____17.Taking a tray and filling it with food in a cafeteria line is an example of _____.

a. / an express contract
b. / an implied-in-law contract
c. / an implied-in-fact contract
d. / a unilateral contract

____18.“JT The Bigga Figga,” upset because his new car won’t start, yells that he would “sell this piece of shiznit for $100.” Eve Mendes hears “JT The Bigga Figga” and says, “I accept and will pay you $100.” “JT The Bigga Figga” _____.

a. / must sell his car for $100 since his statement was clear and definite
b. / need not sell his car for $100 since he was clearly angry
c. / must sell his car for $100 but only if he were speaking directly to Ida
d. / need not sell his car for $100 since the offer was not written and signed by him

____19.“Takemehigher” offers $1 million to the makers of the first private spacecraft to fly to the moon and back. “Illtakeyouthere” succeeds in producing the first private spacecraft to fly to the moon and back but “Takemehigher” refuses to pay. Is “Takemehigher” bound by its offer?

a. / “Takemehigher” is not bound unless there is a written and signed contract with “Illtakeyouthere.”
b. / “Takemehigher” is bound since “Illtakeyouthere” performed the required action.
c. / “Takemehigher” is not bound since the moon is not under U.S. legal jurisdiction.
d. / “Takemehigher” is bound since “Illtakeyouthere” had a firm offer.

____20.Sanaa Lathan receives a box of unordered office supplies in the mail. What is her legal obligation?

a. / She must return it or pay for it.
b. / She must report this to the local Postal Inspector.
c. / She must give it to charity
d. / She may consider it a gift.

____21.Mac Dre mails an offer on Monday to “Keek da Sneak” to sell his baseball card collection for $5,000. “Keek da Sneak” mails an acceptance on Thursday but receives a letter from Mac Dre on Friday that he has withdrawn his offer. On Saturday Mac Dre receives Keek da Sneak’s acceptance. Has the offer made by Mac Dre been revoked?

a. / No, Keek’s acceptance was mailed before he received the revocation from Mac Dre.
b. / Yes, Mac Dre mailed the revocation before Keek mailed his acceptance.
c. / No, Keek acceptance occurred within a reasonable time of the offer being made by Mac Dre.
d. / Yes, Mac Dre may withdraw his offer at any time.

____22.Kelley offers “Devon the Dude” $60 to wash her car. “Devon the Dude” says he’ll consider the offer. In the meantime, Cecelia offers to wash Kelley’s car for $55. Kelley _____.

a. / can tell “Devon the Dude” she rejects her offer to him. She can then accept Cecelia’s offer.
b. / can tell “Devon the Dude” she revokes her offer to him. She can then accept Cecelia’s offer.
c. / cannot revoke her offer to “Devon the Dude” under the mirror image rule.
d. / can revoke her offer to “Devon the Dude” even if he has left a message on her voice mail stating that he has accepted her offer

____23.While looking for apartments, Brittany finds one that she likes. The building manager agrees to an option contract in which he will hold the apartment for Brittany for four days for $100. At the end of the fourth day, Brittany finds another apartment that she likes better and signs a lease with its building manager. Because Brittany’s contract with the original building manager is an option contract, the building manager _____.

a. / can legally ask Sarah for a deposit of one month’s rent for deciding against taking the apartment
b. / is under legal obligation to return Brittany’s $100 payment
c. / is under legal obligation to return half of Brittany’s $100 payment
d. / is under no legal obligation to return Brittany’s $100 payment

____24.Jose describes his car to Pearl as a “one of a kind cream puff.” Pearl buys the car thinking that she has purchased a rare beauty. Pearl later discovers that the car is not particularly special or unusual. Jose’s statement constitutes _____.

a. / active fraud
b. / passive fraud
c. / misrepresentation
d. / sales puffery

____25.Kelly believes that she has found a bargain price on a used car and purchases the car. Later she discovers that she could have purchased the car for $1,500 less. What type of mistake has Kelly made?

a. / mutual
b. / unilateral
c. / bilateral
d. / unicameral

____26.Alex takes his best suit to Comet Cleaners. On the back of the claim stub the Comet employee gives Alex is the statement “Not responsible for theft or damage.” A Comet employee forgets to lock the building and Alex’s suit is stolen. Will a court enforce the language on the back of the claim stub?

a. / Yes, it is easily understood.
b. / No, the theft was by a non-employee.
c. / No, the claim stub is for identification purposes only.
d. / Yes, risk of theft is not unique to the cleaners.

____27.Angelina Jolie finds what she believes is the original manuscript of a novel that was written by an author who died 40 years ago. Angelina Jolie thinks that the manuscript is worth $500, but sells it to a local University for $400. She later finds out that the manuscript is really a photocopy of an already printed book.

a. / Angelina Jolie has committed active fraud.
b. / A mistake as to value has occurred, but the contract cannot be rescinded.
c. / A mistake as to description has occurred, but the contract cannot be rescinded.
d. / Angelina Jolie has committed passive fraud.

____28.Agreements made by business law 201 students with mental handicaps are _____.

a. / valid
b. / void
c. / voidable
d. / any one of the above depending on the circumstances

____29.Goods and services that are essential to a minor’s health and welfare are known as _____.

a. / presumptives
b. / necessaries
c. / rudiments
d. / none of the above

____30.Braxlin, who works at the real estate property tax assessor’s office, promises to lower the assessed value on Kylun’s home by $25,000 if Kylun will give Braxlin an antique book that Kylun desires. Does this agreement have consideration?

a. / Yes, there is a bargained-for exchange.
b. / Yes, there is a bargained-for exchange and the parties have freely agreed on the value.
c. / No, there is not an exchange of money.
d. / No, there is an illegal act.

____31.La Tasha phones JoJo and asks if she can borrow his vacuum cleaner so she can clean her apartment before her parents visit. JoJo says she can borrow his vacuum. When La Tasha goes to pick up the vacuum, JoJo refuses to give it to her.

a. / A bargained-for exchange has occurred, so JoJo must loan La Tasha the vacuum cleaner.
b. / A bargain-for exchange has not occurred, so JoJo does not have to loan La Tasha the vacuum cleaner.
c. / JoJo has promised La Tasha something of value, so he must loan her the vacuum cleaner.
d. / JoJo has committed a breach of contract.

____32.A Business Law Student who can neither speak nor read English purchases a stereo system from a local electronics store. Although the stereo is advertised for $450, the store owners charge the Business Law Student $10,000. A court would most likely consider this transaction ____.

a. / the result of accord and satisfaction
b. / an unconscionable contract
c. / a bargained-for exchange
d. / an enforceable contract

____33.Gianni Versace agrees to baby sit for Donna Karen’s daughter as often as Donna Karen wishes if Donna Karen cleans Gianni Versace’s house every week. This agreement is ____.

a. / enforceable because it is an option
b. / enforceable because the amount in the contract is not disputed
c. / unenforceable under the doctrine of estoppel
d. / unenforceable because it contains an illusory promise

____34.Kay contracts with Glenda to pay Glenda $50 for Glenda to let all the air out of Sally’s auto tires to “teach her a lesson” not to flirt with Kay’s boyfriend. This contract ____.

a. / is void
b. / is voidable
c. / is unconscionable
d. / is enforceable since the harm is minor

e. Damn, what’s up with Glenda and Kay? Give us more “JT The Bigga Figga.”

____35.Eve, (JT The Bigga Figga’s girlfriend) an experienced automotive engineer, signs an agreement with her employer, Harlem Auto Co., that she will never work in the auto industry after she leaves employment with Harlem Auto Co. A court considering this agreement ____.

a. / will declare it void
b. / will enforce the agreement in any event only
c. / will enforce the agreement in any event if it resulted from a bargained-for-exchange
d. / will enforce the agreement only if it is customary in the auto industry to have such agreements

____36.A device used in the attempt to escape legal responsibility is a(n) ____.

a. / restrictive covenant
b. / local option
c. / in pari delicto clause
d. / exculpatory clause

e. coverus yo assus clause

____37.After betting $4 million on the outcome of a professional baseball game Fat Joe wants to make sure that he does not lose his money. He enters an agreement with one team’s starting pitcher. The pitcher agrees to throw “fat” home run balls to the other team’s batters in exchange for $75,000 from Fat Joe. The pitcher gives up ten home runs in the first three innings and his team loses the game. The pitcher calls Fat Joe and says “Where you at?” Fat Joe refuses to pay him the $75,000 they agreed upon in the contract. If the pitcher Martha Stewarts Fat Joe for breach of contract, a court will most likely find that ____.

a. / the contract is divisible and will award the pitcher damages for the legal sections of the agreement
b. / the parties are in pari delicto and will refuse to award the pitcher any damages
c. / although the entire agreement is illegal, Fat Joe cannot refuse to pay the $75,000 since the pitcher has fulfilled his promise
d. / the parties are not in pari delicto and will award the pitcher monetary relief

____38.On May 1, Rosemary orally contracts with Thaddeus to sell Thaddeus her farm for $150,000. Myra offers Rosemary $175,000 for the farm on June 1 and Rosemary refuses to complete her contract with Thaddeus. Thaddeus Martha Stewarts Rosemary for breach of contract on July 1. Will Thaddeus win this suit?

a. / Yes, since he Martha Stewartd within one year of the making of the contract.
b. / No, since the contract was not written and signed.
c. / Yes, since he had a bargained-for-exchange with Rosemary.
d. / No, since Rosemary clearly was selling her farm at a price below fair market value.

____39.When Uncle Redrick died deeply in debt, his niece Evangeline became an administrator of his estate. She orally promised Redrick’s creditors that she would personally pay his debts if they would not publicize the fact that Redrick died deeply in debt. When Evangeline was unable to pay the debts the creditors Martha Stewartd her. Will the creditors be legally able to collect from Evangeline?

a. / Yes, since there was a bargained-for-exchange.
b. / No, since Evangeline was not Redrick’s child.
c. / Yes, since Evangeline made a guaranty of payment.
d. / No, since her promise was not written and signed.

____40.Brogan, age 16, enters into a written contract with Javid to sell his horse to Javid. Later Brogan seeks to be released from the contract and wants to offer in court oral testimony concerning his age. The admission of this testimony is governed by ____.

a. / the standard construction rule.
b. / the best evidence rule.
c. / the equal dignities rule.
d. / the parol evidence rule

____41.Ching keeps a pet cobra in her apartment. While Ching is hosting a party at her apartment, the cobra escapes from its cage and bites a guest, seriously injuring the guest. The guest knew before attending the party that Ching kept the cobra in her apartment. If the guest Martha Stewarts Ching for the injury resulting from the cobra bite, Ching ____.

a. / will be strictly liable
b. / may defend based on assumption of risk
c. / is liable only if she intentionally released the cobra from its cage
d. / has no liability since the cobra bite was unforeseen by her

____42.A shoplifter steals a single can of Olde English 800 and fights the clerk (nicknamed Beerface)to escape when confronted by the clerk. The shoplifter has committed _____.

a. / burglary
b. / larceny
c. / embezzlement
d. / robbery

____43.Martha Stewart gets into a loud argument about politics with Joe. Martha Stewart’s neighbors call the police who arrest Martha Stewart for disorderly conduct, a misdemeanor. Martha Stewart may be punished with how lengthy a jail term?

a. / Five years
b. / Two years
c. / One year
d. / Martha Stewart may not be punished since her argument concerned political speech.

____44.Joe, without permission, took a flat screen TV from the clubhouse of the apartment complex where he lived and put it in his apartment. Joe has committed _____.

a. / embezzlement
b. / larceny
c. / robbery
d. / no crime since the TV remained on the property of the apartment complex

____45.For every $100 she rings up, Agnes, a convenience store cashier, takes $5 out of the register and keeps it. Agnes could be arrested for _____.

a. / extortion
b. / embezzlement
c. / burglary
d. / robbery

Business Law Fall 2005 Midterm

Answer Section

TRUE/FALSE

1.ANS:FDIF:Easy

2.ANS:TDIF:Easy

3.ANS:FDIF:Moderate

4.ANS:TDIF:Moderate

5.ANS:FDIF:Easy

6.ANS:TDIF:Easy

7.ANS:FDIF:Easy

8.ANS:FDIF:Easy

9.ANS:FDIF:Moderate