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Practice Questions (Final Exam Spring 2011)

Practice Questions (Final Exam Spring 2011) - Practice...

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Practice Questions (Final Exam ) 1. Pearson (P) was hired to repair rail cars for the Metro North Commuter Railroad (D). The job was boring so P decided to spend part of his work days figuring out a better way to install brake tread units on trains. After only two business days, P had developed a device that worked well. Eager to get a job promotion, P proudly handed the device over to his surprised supervisor, and then returned to the work of repairing rail cars. D started using the unit that P had made and sent P’s plans to a company that made similar devices, ordering six more units. Nine months later, P got into a spat with his supervisor and quit. If P obtains a patent on the device, D still has a free, exclusive license to use the device. (a) True (b) False 2. Perks Café issues “frequent buyer” cards to its customers, and stamps the cards each time a customer buys a cup of coffee. Perks promises to give any customer a free cup of coffee if the customer buys 10 cups of coffee and has his/her “frequent buyer” card stamped 10 times. In this case, Perks has made an offer for: 3. Delaney (D) owned a huge tract of land. She sold an option to buy part of the land to Blake. Blake is wealthy, having made his fortune in the oil industry. Blake agreed that, at his expense, he would have 12 oil wells drilled: 7 wells on the land that D would keep and 5 wells on the part that Blake had an option to buy. It was also agreed that if Blake exercised the option, the purchase price of the land would be reduced by the cost of the 7 wells retained by D. Blake hired Putnam Corp. (P) to drill the wells, agreeing to pay P for all costs associated with the drilling. Later, Blake exercised the option to purchase part of the land from D. Blake paid D for the land, but did not pay P for the wells. Rather than suing Blake for payment under the terms of their express contract, P chose to sue D for the cost of drilling the 7 wells on the land that she retained, noting that the land was now substantially more valuable than it was before the wells were drilled. Which of the following statements is true?
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