MIDTERM-ANSWERS-SPRING2005

MIDTERM-ANSWERS-SPRING2005 - Name Date 1 Bob is the father...

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Unformatted text preview: Name: Date: 1. Bob is the father of 15-yearuold Deb. Deb goes to Camp Pom Porn, 3 summer camp for high school cheerleaders. Camp Pom Pom requires that parents sign a contract releasing it from negligence liability for harm to their minor children. Bob signs the contract when he drops ofi Deb at the camp. On her first day at Camp Porn Porn, Deb injures her knee while executing a jump without proper supervision. Deb wants to sue Camp Pom Pom for the injuries she sustains as a result of its negligent failure to provide adequate supervision of campers. The majority of courts would: A) Uphoid the release because Bob has the power to make decisions conceming Deb. B) Allow Deb to sue Camp Pom Pom for her injuries. C) Void the contract between Bob and Camp Porn Porn, but still not allow Deb to make a claim based on her injuries. D) Not allow Deb to sue if Bob had signed a contract releasing Camp Pom Porn from liability afier Deb‘s injuries. 2. UCC section 2-207 (the Code‘s "battle of the forms“ provision) says that additional terms in the acceptance are part of the contract when both parties are merchants, UNLESS: A) The offer expressly limited acceptance to its own terms. B) The additional terms materially altered the offer. C) The offeror gave notice of his objection to the additional terms within a reasonable time. D) All of the above. 3. Raj went to the Napa Vailey Harvest Festival, where he stopped at Tina's booth where she was selling paintings of vineyards. Raj admired a painting of vineyards, which did not appear to be for sale. Raj said to Tina, “I will give you $200 if you give me that painting right now.” Tina gave Raj the painting, and Raj gave her $200 in cash. This is an example of a contract that is: A) Bilateral and executed. B) Bilateral and executory. C) Unilateral and executed. D) Unilateral and executory. 4. in order to satisfy the Statute of Frauds. the parties' writing M: A) Be signed by both parties. B) Be notarized. C) Be signed by the party to be charged (the person using the statute of frauds as a defense) or his agent. D) Contain all the necessary contract terms in one document. Page 1 5. A and B have a written contract whereby A agrees to sell B a plot of land for $100,000. Later, Without terminating the first contract, the parties modify the deal so that A seils B the same plot of land for $125,000. The second agreement: A) Is not a contract because there is no consideration for A's promise. B) Is not a contract because there is no consideration for B's promise. C) Is not a contract because A's promise is illusory. D) Is not a contract because written contracts for the sale of land cannot be modified. 6. Bob DeSlob, CEO of Westlake, Inc., had supported the development and distribution of the Super Widget, a product that is expensive to make. The Super Widget had failed to meet its expected sales. Bob decides to invest more resources to produce and aggressively market the Super Widget, rationalian that if he did not invest more in the product, what he has invested would be lost. Bob is engaging in: A) Sunk cost fallacy. B) argumentum ad baculum. C) argumentum ad hominem. 1)) reduction ad absurdum 7. Which of the following generally is not recoverable in a contract suit? A) Consequential damages. B) Incidental damages. C) Punitive damages. D) Nominal damages. 8. Which of the following is an equitable remedy? A) Arbitration. B) Money damages. C) Mediation. D) An injunction. 9. D owes C a debt the amount of which is subject to a good faith dispute. The parties agree to settle the debt, with D promising to pay C $15,000 and C promising to release D on the $25,000 debt. The settlement agreement: A) Is supported by consideration. B) Lacks consideration because C is not giving D any legal value. C) Lacks consideration because D is promising to perform a preexisting legal obligation. D) Is binding under UCC section 2-209 even though there is no consideration. Page 2 10. Which of the following is true about the relationship between mutual mistake and unilateral mistake? A) It's easier to avoid a contract on the basis of unilateral mistake than on the basis of mutual mistake. B) To avoid a contract on the basis of unilateral mistake, one must prove the elements needed for mutual mistake, plus something else. C) Mutual mistake makes a contract void, while unilateral mistake makes a contract voidable. D) There's little difference between mutual mistake and unilateral mistake; in particular, each requires the same things to be proven. l 1. Bob DeSlob is CEO of Westlake Inc. that manufactures and sells widgets. Bob has decided that a safety feature recommended by the widget designers is too expensive and so will not he used in manufacturing Westlake widgets. The expense would cause the price of the widgets to rise far above Westlake's competitors' prices. This justification illustrates: A) Stakeholder theory. B) Profit maximization. C) Rule utlitian'anism. D) Kant's categorical imperative. 12. For which of the following contracts is a party's subjective dissatisfaction sufficient to excuse his performance under a "personal satisfaction" clause in a contract? A) A contract to construct an intercontinental ballistic missile. B) A contract to paint someone's portrait. C) A contract to build a steam boiler. D) A contract to rebuild an automobile engine. 13. An executed contract is one that: A) Has been terminated by operation of law. B) Has been terminated by the parties voluntary agreement. C) Has been fully performed by one or both parties. D) Has been fully performed by both parties. Page 3 14. Al hires Bob to move his furniture to his new house. On the day of the move, Bob does not feel like moving furniture, so he asks his friend Chuck to move the furniture. Chuck decides to leave before completing the move in order to watch a football game on TV. Al has to delay his move and hire another mover at a higher price. Al wants to sue Bob to recover for his damages. Given these facts, Al will most likely: A) Win, because Bob is still liable to Al. B) Win, because Bob's duty to Al was not delegable. C) Lose, because it was Chuck, not Al, who failed to fulfill his duty to Al. D) Lose, because he failed to insist on Bob's performance. 15. Which of the following is m likely to constitute ratification of a contract made by a minor? A) Performing one's duties under the contract afier reaching the age of majority. B) Accepting performance from the other party to the contract after the age of majority. C) Failing to disamnn a completely executory contract within one month after the age of majority. D) Making an oral statement that "I ratify the contract." 16. A and B entered into a completely integrated written contract. Before the written contract was completed, A made an oral statement to B regarding the terms of the contract. This statement was not contained in the written contract. Under the parol evidence rule, evidence of A's oral statement would be admissible if it were used to: A) Contradict a term of the written contract. B) Clarify an ambiguous term in the written contract. C) Prove an additional term that is not in the written contract, but is consistent with it. D) Change the terms of the written contract. 17. Joe sells his business to Shirley. During the negotiations, Joe negligently tells Shirley that the business has turned a profit for the last five years. In reality, the business operated at a loss for each of those years. However, Shirley did not hear J oe's misstatement. Shirley cannot rescind the contract because: A) Joe‘s false statement was negligent rather than intentional. B) J oe‘s misstatement was not material. C) Shirley did not actually rely on Joe's misstatement. D) Shirley did not justifiably rely on Joe's misstatement. 18. Which of the following contracts or contract provisions is most likely to be enforced? A) A gambling contract. B) A contract that violates a licensing statute whose aim is regulatory. C) A contract that violates a licensing contract whose aim is to raise revenue. D) A loan agreement that charges an interest rate which exceeds the limit set by state law. Page 4 19. Which of the following offers terminates earliest? Assume that there is no time limitation on the offer unless the question says otherwise. A) An ofi'er for the sale of land. B) An offer to purchase stock on a stock exchange. C) An offer that says that it will stay open for one week. D) An offer with a valid five-day option attached to it. 20. Which of the following is true regarding promissory estoppel? A) it requires that the promisor should reasonably expect to induct the promisee's action or forbearance. B) damages awarded for promissory estoppel always equal the value of the promise relied upon by the promisee. C) it requires consideration. D) it applies only when one or both parties is a merchant. 21. Which of the following kinds of third-party beneficiaries normally can enforce a contract? A) A creditor beneficiary. B) A donee beneficiary. C) An incidental beneficiary. D) a and b. E) a, b, and c. 22. A orally offers to sell B 100 premium-grade fountain pens but neglects to state the price. B orally accepts. Immediately thereafter, A tries to back out of the deal. At this point in time. which of the following is most likely to be true? A) There is no offer and no contract because the offer is indefinite. B) There is no offer and no contract because the offer must be in writing. C) There is a contract, if the parties intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy. D) There is a contract, because the offer contained all material terms. 23. On Thursday, Trista receives a letter from Charlie in which he offers to set] her a diamond ring. The letter states: “if you choose to accept, you must do so prior to 2:00 pm. tomorrow.” Trista had a telegram of acceptance dispatched before 2:00 pm. on Friday. The telegram is delivered to Charlie's home at 2:15 pm. Do Trista and Charlie have a contract? A) No, because Trista‘s supposed acceptance was untimely. B) Yes, because Trista dispatched the telegram prior to 2:00 pm. C) No, because Trista's use of a telegram was not a proper method to accept an offer. D) Yes, unless Charlie is not home to receive the telegram. Page 5 24. Which of the following is a possible example of procedural unconscionability? A) A clause excluding a seller's liability for consequential damages arising from a defect in goods sold. B) A clause imposing a penalty for a seller's failure to deliver the goods on time. C) A high price term in a contract. D) A fine-print price term in a contract. 25. 26. 27. 28. Joe Loser enters into an investment scheme with some local bigwigs. To get Joe‘s money, these people lie to Joe about several present facts that are criticai to the investment scheme. Later, Joe sues to rescind the investment contract on the basis of fraud. While Joe is on the stand, the attorney for the other parties asks him: "Mr. Loser, why did you enter this deal in the first place?" Joe says: "For one reason and one reason only: I admired these men tremendously and figured that any deal good enough for them was a deal I wanted in on too. The details didn't matter; if they were in it, I wanted to be in it too." Joe has just blown his fraud case. Why? Jones goes to a clothing store and orders $1000 worth of clothing on credit. The salesperson writes up a receipt describing the terms of the deal, but Jones does not sign anything. Three days later, the store delivers $750 worth of clothing, which Jones accepts. One day later, however, Jones decides that he doesn't want the clothing. When the store insists that he has to pay the full $1000, Jones pleads the Statute of Frauds. Does the Statute of Frauds give Jones a defense against payment here? Hard Drive, Inc, a manufacturer of computer chips, offers to sell 1,000 chips to Swell Computers for $2,000 in a signed memo that states the offer is good for one year. Four months later, Hard Drive revokes the offer, having never received an acceptance from Swell. After receiving the revocation, Swell wants to accept Hard Drive's offer. What is the result? What is the main difference between a void contract and a voidable contract? Page 6 Answer Key ...... ‘~ ? thC Sfatute of Frauds appli§§l‘ ‘x ‘2 ‘2 » x i l ea e a 1%. PFHP‘MPP’NW DEUOU>UJOOCUO>UUJWCD>UO>DUOOUCD 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. claim. 26.; Thisisamconlractfomhem§§e of goods in an azeoggggg exceeding $500, so the r :figdwmereig’ioflgdegflufle writing:since Jones did not Sign meceipt. Bit the Codé‘gféggceptiofi for_ Jones accepted the goods. Thus, Jones isfifififi?§f7flie accepted (worth $Z§_‘Q):_}>ut not for the fun $1000. " '“”“"""‘“““‘“”‘"“”“““”'W 27. H3331)” {we {ofi'ér wag. ofiéllaiglexgmicign lipi‘fil. 0‘? «A axe—é '33 a 2,..- M ,Wru-ugw-u—W" W_ a .5 Drive is a «7:jfierchan’gflglflthefiflenwmemfor Q éertain pefiod Ef time in ngggm firm ,1 @fi nglfimgot require considemfionifigwefiéfifififfii 0 er 15"fievocable for three f {fifihfififlfilfifffiwogh TEEWaEIfiifiEH Drive otfered to hold its offer open for a xk'fyearyit‘knot/obligated to do §o beyond Havingnot regeiyeg an offer 3 from Swell before that time, Drive to ‘gevoke its offer to 7 it... i, A, m; w“ ‘ ‘ \w L“ .......................................... _.. g: 2... ' E l l \ : i 1 a ‘1 ‘s l f ‘s ; “MHWWMA \ 4‘ a l “l7 K“ g 28. The main difference is that a voié: contract creates no iégal obligationsai‘ad thus is not a contract at all, which most often ‘robably means “‘ccflf'fsfiffl'I—Iéave the parties as it finds them (unless perhaps quasiiontract aplgggs). Attic other hand, is a contract, but one thatfgan be airfloiuéied bfifi parties at flieiryofifion. This may mean, for example, cari'Ceiingrrrthe/rcontract before it'sperformc’dfin which case whatever made the contract voidabl‘e serves as a defense), or rescinding an executed contract (in which case the parties at? restored to their original paintractual position). 1 Page 8 ...
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MIDTERM-ANSWERS-SPRING2005 - Name Date 1 Bob is the father...

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