Exam 1 (Fall 2011)
Put your name on this exam and your name and ID on your scantron; bubble in the ID number.
scantron, on the line underneath your name, write Exam A.
Turn in the exam and scantron when you
leave; be sure the scantrons are in the proper stack on the desk.
On May 1, 2010, Smith, an XYZ Corporation officer, approached Jones about investing in a
business venture with XYZ and told Jones facts about it.
After thinking it over, Jones decided to
invest $80,000 and on May 15, 2010, he and Smith (as agent for XYZ) signed a contract specifying the
details of the venture. Among other things, the contract, written by XYZ’s lawyers, states that if there
is litigation involving the contract:
– The loser will pay the winner’s attorney fees and court costs.
– Suit must be filed in Texas and will be governed by Texas procedural and substantive
– The winner shall receive $60,000 in damages, regardless of the nature and extent of
On November 1, 2010, Jones read an article that made him question whether Smith had given him true
Jones, however, did not do due diligence until November 5 when he hired an investigator who,
based on data accessible by the public on May 1, concluded that Smith lied about what he told Jones.
Jones sued XYZ, claiming that Smith defrauded him and XYZ should be liable for the fraud.
asked the District Attorney to prosecute XYZ for fraud.
In Texas, fraud is a civil and criminal offense;
there is no federal crime of fraud.
Jones is a Louisiana domiciliary.
XYZ is incorporated in Delaware and has offices in Oklahoma and
New Mexico; its headquarters are in Texas.
The contract was signed in Louisiana.
On December 5, XYZ employee Thompson wrote an anonymous letter to the District Attorney
summarizing Smith’s activities.
XYZ discovered his identity and fired him.
Thompson is considering
suing XYZ claiming the termination violated his speech rights under the First Amendment to the
XYZ is considering suing to have a court invalidate a new federal law that will impose huge costs on
Another XYZ employee, Sue, is considering suing XYZ alleging that Smith has committed
sexual harassment, a form of sex discrimination prohibited by federal statute.
When XYZ hired Young, it required him to sign an agreement stating that any employment dispute
must be submitted to binding arbitration.
I intended for there to be 20 questions, each worth 5 points for a total of 100, plus two bonus questions.
Your number grade is based on the number of correct answers X 5, so the bonus questions could have
resulted in an additional ten points if answered correctly.
Unfortunately, I discovered in the first class
that Exam A had 22 questions but Exam B had only 21.
Question 14 on Exam A (below) was omitted
on Exam B.
Not sure how that happened but it did.
So to equalize everyone I am omitting question 14