Contract are Minors - Introduction of Business Law - Past Exam, Exams of Commercial Law

Download Contract are Minors - Introduction of Business Law - Past Exam and more Exams Commercial Law in PDF only on Docsity! 1 Bus Law 201 Summer 2007 Final Exam Professor Steven Isler July 26, 2007 Exam Instructions: Place only your Student ID Number on your Scantron or five points will be deducted. There are one fifty-eight questions on this exam (plus five extra credit questions) and you have seventy minutes to complete it. This exam will make up forty-five percent of your overall grade and will end promptly at 7:10. In the True/False section indicate whether the sentence or statement is true (A) or false (B). In the multiple choice section identify the letter of the choice that best completes the statement or answers the question. The raw exam scores by noon tomorrow July 27, 2007. I would suggest that you write your answers on your exam and Scantron. You will be allowed to keep the exam. Electronic devices, including anything with an on/off switch, are not to be allowed. True/False Indicate whether the sentence or statement is true or false. ____ 1. When both parties to a contract are minors, neither of them may disaffirm the contract. ____ 2. Some states provide for the termination of minority status on marriage. ____ 3. Disaffirmance is the legal avoidance of a contractual obligation. ____ 4. A retail business can assign its right to receive payment from customers to a financing company for cash. ____ 5. In a contract for a sale of land, the usual remedy is specific performance. ____ 6. Consequential damages are foreseeable damages that arise from a party's breach of a contract. ____ 7. A debtor must be insolvent to file a petition for bankruptcy. ____ 8. All student loans are dischargeable in bankruptcy. ____ 9. Corporate officers select the corporate directors. Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 10. Attendance- As you know, an otherwise mentally incompetent person may have a lucid interval, a temporary restoration of sufficient intelligence, and will enter into contracts without disqualification. Professor Isler’s father went through a brief period where he did not know who the professor was but the Professor would always make him temporarily lucid by: a. Reading a special passage from the Bible d. Talking about Martin Luther King b. Mentioning his father’s former employer e. Talking about the time the Professor fell off a boat c. Talking about boxing and Ezzard Charles ____ 11. Attendance- How does Usher refer to sex? a. As Knocking Bootys c. As Rubbing Bellies b. As Tworking d. As “The Nasty” 2 ____ 12. Attendance- Once upon a time Professor Isler noticed a young girl on the street in San Francisco who appeared to be frightened and scared. The Professor took the girl to his office, called the girls parents and got the girl a one way ticket home. Where was the girl from? a. New York, New York d. San Diego, CA b. St. Paul, Minnesota e. Philadelphia c. Des Moines, Iowa ____ 13. Attendance- Doobie Rollemtight sued Clair Mitchell in civil court to have a contract that they signed deemed void. Doobie claims that he was intoxicated. The judge, in a written opinion stated that Doobie knew what he was doing and suggested that Doobie would have been better off filing the lawsuit based on “mistake.” If Doobie files a new lawsuit based on mistake what is the likely resuly. a. He will win c. The lawsuit will be barred if he was deemed to be in pari delicto. b. The lawsuit will be barred because of Res Judicata d. The lawsuit will be allowed but evidence of the prior trial will not be admissible ____ 14. Attendance- Johnny Paycheck: a. Served prison time for statutory rape d. Won a lawsuit against Warner Brothers for unilateral mistake b. Won a lawsuit against Warner Brothers for mutual mistake e. Sang at Professor Isler’s high school reunion c. Had the shortest number one country song of all time ____ 15. John and David decided to bet on a boxing match. John bet David that Venus would beat Serena and each gave $10,000 to Ms. Long. The winner was to get all the money. Serena was beating Venus badly. Serena knocked Venus down and Venus had to rise to her feet by the count of ten or lose by knockout. The referee was counting to ten and when he ( the referee) yelled “eight” John said “that’s it, the bet is off” and asked Ms. Long to return his $10,000. Ms. Long refused and John sued her in civil court. With respect to hearing this case, what is likely? a. The court will hear the matter c. Ms Long will be forced to give David $20,000 b. The court will refuse to hear the case d. The court will refuse to hear the case because courts will not use their “hallowed halls” to decide illegal agreements ____ 16. The legal rate of interest on loans in a particular state is 15%. Able loaned Baker $100,000 at the rate of 17%. Baker then sues Able claiming a violation of the state’s usury law. What is true about usury laws and the above set of facts? a. Some courts will refuse to enforce the agreement and Able will not receive the $100,000 or interest. d. All of the above b. Some courts will only permit Able to recover $100,000. e. A and c are true c. Some courts will only permit Able to recover $100,000 and reform the contract so that the interest rate is 15% 5 ____ 34. Jack and Kay sign a contract that states, "No evidence of prior oral or written negotiations may be used to change the terms of this writing." This is a. the doctrine of promissory estoppel. b. the "main purpose" exception. c. the parol evidence rule. d. the Statute of Frauds. ____ 35. Basil, a world-famous chef, signs a contract to give lessons in French cooking to Marge. Basil attempts to delegate his duties under the contract to Oliver, the operator of a hot dog concession. The delegation of duties will a. be valid. b. be valid only if Oliver is a highly regarded barbecue chef. c. not be valid because performance of the contract depends on Basil's unique skills. d. not be valid only if Marge detests barbecued foods. ____ 36. Jack contracts to provide lawn-mowing services to Lee. Jack cannot delegate this duty a. because it is a personal service contract. b. without continuing to be liable. c. without Lee's consent. d. without providing lawn-mowing services to Kim. ____ 37. Mei's contract with Nick provides that "I (Mei) assign all of my rights under my contract with Owen to Nick." This provision is most likely to be construed as a. a delegation of duties only. b. an assignment of rights and a delegation of duties. c. an assignment of rights only. d. neither an assignment of rights nor a delegation of duties. ____ 38. Dina contracts to repair a computer for Earl for $100. If Dina does not perform, Earl must pay a. $100. b. $50. c. $10. d. $0. ____ 39. Paul signs a lease that provides that any change in the zoning law will result in an automatic termination of the lease. The zoning board adopts a new zoning classification before the lease expires. The change in zoning satisfies the a. condition precedent. b. concurrent condition. c. condition subsequent. d. illegal condition. ____ 40. Professor Isler performs his personal services contract with Sarah Jessica Parker. When Ms. Parker was asked in court about the Professor’s performance she replied ‘It was substantial.” The Professor is entitled to a. damages. b. nothing. c. specific performance. d. substitute performance. e. Nothing if the Professor gave Sarah as much as she deserved Fact Pattern 17-1 6 Ann sells an apartment building to Beth with a promise to repair the roof, which violates the local housing code, within six months. One year later, Ann sends Carl, a carpenter, to fix the roof. Beth orders Carl to leave and refuses to make further payments to Ann, who files a suit against Beth. ____ 41. Refer to Fact Pattern 17-1. Ann's late attempt to fix the roof is most likely a. a material breach. b. complete performance. c. excused by Beth's refusal to make further payments. d. substantial, but not complete, performance. ____ 42. Refer to Fact Pattern 17-1. Beth's refusal to make further payments is most likely a. a material breach. b. complete performance. c. excused by Ann's failure to fix the roof. d. substantial, but not complete, performance. ____ 43. Ira and Jill can discharge their contract through novation. This requires a. an agreement by all of the parties to a new contract. b. an express discharge of the contract. c. performance of all of the terms by all of the parties. d. performance of all of the terms by only one of the parties. ____ 44. Diners Restaurant signs an agreement with Eagle Bank to borrow $10,000 at 20 percent interest. Later, the state legislature passes a law lowering the maximum permissible rate of interest from 15 percent. Diners' best argument for avoiding payment to Eagle is that a. performance of the contract is commercially impossible. b. the agreement violates the mirror image rule. c. the law has rendered performance of the contract illegal. d. the specific subject matter of the contract has been destroyed. ____ 45. Loyal Engineers, Inc., needs a drill to continue its operations and orders one for $3,000 from Mining Supplies Company. Loyal tells Mining that it must receive the drill by Tuesday or it will lose $10,000. Mining ships the drill late. Loyal can recover a. $13,000. b. $10,000. c. $3,000. d. $0. ____ 46. Kris contracts to work exclusively for Local Company during May for $5,000. On April 30, Local cancels the contract. Kris finds another job during May but earns only $3,000. Kris files a suit against Local. As compensatory damages, Kris can recover a. $3,000. b. $2,000. c. $1,000. d. $0. ____ 47. Amy contracts to sell a residential duplex to Burt. The contract provides that if Amy does not close the deal by September 15, she must pay Burt one-half of the duplex's sale price. This provision is not enforceable because it is a. a liquidated damages clause. 7 b. a mitigation of damages clause. c. a nominal damages clause. d. a penalty clause. ____ 48. A contract for a sale of land from United Properties, Inc., to Commercial Investments Corporation contains an erroneous legal description. The most appropriate remedy for these parties is a. damages. b. reformation. c. rescission. d. specific performance. ____ 49. Edie agrees to pay a debt to Financial Credit, Inc., which is otherwise dischargeable in bankruptcy. This is a. a justification. b. a novation. c. a reaffirmation. d. a rejection. ____ 50. Owen files a bankruptcy petition today. He has outstanding tax liability on his 2004, 2005 and 2006 tax returns. If Owen files a chapter 7 bankruptcy petition which tax years can he properly include? a. 2004 b. 2005 c. 2006 d. None of the above ____ 51. Amy wants to go into the business of construction contracting. Among the reasons that would probably convince Amy to set up her business as a sole proprietorship would be a. its greater organizational flexibility. b. its limited liability. c. its perpetual existence. d. the ease of transferring the business to other family members. ____ 52. Eagle, Inc., and Doobie Rollemtight have a processing-plant franchise arrangement to make Swisher Sweets. This involves the transfer of a. a license. b. a trade name. c. the formula to make a certain product. d. the ownership of the business. ____ 53. Euro Autos & Trucks, Inc., licenses Fine Vehicles Corporation, an automobile dealership, to sell its products. This is a. a chain-style franchise. b. a distributorship franchise. c. a manufacturing franchise. d. no franchise. ____ 54. Ace Accountants, has 300 partners. Mr. Ace is a limited partner. What is true about Ace Accountants? a. It may only operate in a "neutral" state. b. It must be a general partnership. c. It must be a limited partnership. d. It could be a limited or general partnership. ____ 55. Standard Manufacturer wants to incorporate in California. What document must Standard Manufacturer file? a. Articles of Organization b. Articles Testamentary 10 ____ 62. Refer to Fact Pattern 48-2. Suppose that the agreement between Jay and Kelly does not expressly bind Jay's "heirs and assigns," Jay says nothing to Leo about the easement, and Leo's deed does not mention it. Under those circumstances, as the court held in Case 48.1, Webster v. Ragona, Kelly has in the driveway a. an easement appurtenant. b. no easement, because Jay and Kelly's agreement did not bind Jay's successors. c. no easement, because Jay said nothing to Leo about the easement. d. no easement, because Leo's deed did not mention it. ____ 63. Refer to Fact Pattern 48-2. As the court held in Case 48.1, Webster v. Ragona, Kelly has in the driveway a. an easement appurtenant. b. no easement, because Jay and Kelly's agreement did not say that the easement was "permanent." c. no easement, because Leo has title to the driveway. d. no easement, because Leo's purchase extinguished it. 11 2007 Summer Business Law Final Answer Section TRUE/FALSE 1. ANS: F 2. ANS: T 3. ANS: T 4. ANS: T 5. ANS: T 6. ANS: T 7. ANS: F 8. ANS: F 9. ANS: F MULTIPLE CHOICE 10. ANS: C NOT: This was an attendance question from 7/10/2007 and was an easy question for those who did not leave after the break. 11. ANS: B NOT: This was an attendance question from 7/10/2007 and was an easy question for those who did not leave after the break. 12. ANS: B NOT: This was an attendance question from 7/10/2007 and was an easy question for those who did not leave after the break. 13. ANS: B NOT: This was an attendance question from 7/10/2007 and was an easy question for those who did not leave after the break. 14. ANS: A NOT: This was an attendance question from 7/10/2007 and was an easy question for those who did not leave after the break. 15. ANS: A NOT: This was an attendance question from 7/10/2007 and was an easy question for those who did not leave after the break. 16. ANS: D NOT: I gave this exact example in class on 7/10/2007 17. ANS: A 18. ANS: A 19. ANS: B 20. ANS: C NOT: Attendance 21. ANS: A NOT: Attendance 22. ANS: A 23. ANS: D 24. ANS: C 25. ANS: D 26. ANS: B 27. ANS: D 12 28. ANS: D 29. ANS: D 30. ANS: A 31. ANS: D 32. ANS: D 33. ANS: D 34. ANS: C 35. ANS: C 36. ANS: B 37. ANS: B 38. ANS: D 39. ANS: C 40. ANS: A 41. ANS: A 42. ANS: C 43. ANS: A 44. ANS: C 45. ANS: B 46. ANS: B 47. ANS: D 48. ANS: B 49. ANS: C 50. ANS: D 51. ANS: A 52. ANS: C 53. ANS: B 54. ANS: C 55. ANS: D NOT: Articles of Incorporation are filed 56. ANS: B 57. ANS: C 58. ANS: B 59. ANS: C 60. ANS: D 61. ANS: A 62. ANS: A 63. ANS: A