Business Law- Module 3&4

An offer from a non-merchant can be revoked A) At any time before it is accepted B) Same as (a), unless the offeree purchases an option to hold it open for a set period of time C) Same as (a), unless the offeror agrees to make the offer irrevocable and puts that in writing D) None of the above

B

Chewbacca is a Wookie—or rather, Chewbacca is a popular character in the Star Wars movie franchise. J.J. Abrams, director of the next Star Wars movie, hires Kevin to play Chewbacca for one simple reason: Kevin is over seven feet tall, like Chewbacca is supposed to be. The contract requires a two-year commitment, all the terms are contained in a single document, that document contains a clause that the written contract is the only agreement between the parties, and that document is signed by both parties. If Kevin sues for breach of contract, under which scenario can Kevin introduce parol evidence? A) During negotiations, Kevin and J.J. had discussed the possibility of reimbursement for massage therapy, a term that was not recorded on the written contract. B) Kevin has evidence that J.J. used threats of preventing him from working on other movies to intimidate him into entering the contract on unfavorable terms, and Kevin desires to void the contract under a duress claim C) Both (a) and (b) D)Neither (a) nor (b); to allow oral statements to modify the terms of a contract that under the Statute of Frauds must be in writing does not make sense

B

Which of the following is an accurate statement about fraud? A) For every type of contract, the plaintiff must elect a remedy of either money damages or rescission of the contract—but never both B) Sometimes, silence can constitute fraud C) Both (a) and (b) D) Neither (a) nor (b)

B

Alice engages in several rounds of job interviews with Omega Corporation. Alice tells Omega that she is willing to quit her current job and relocate from Dallas to Houston for the Omega job. An Omega executive tells Alice that they like her more than the other candidates and will likely offer her the job, so she should go ahead and move right away to be ready to work. Alice quits her current job and moves to Houston, but then Omega does not offer the job because a company policy was not satisfied. Alice lost $5,000 on the move and $10,000 in income because it took her two months to find another job. Under which theory is Alice most likely to recover the $15,000 from Omega? A) Promissory estoppel B) Quasi contract C) Both (a) and (b) D) Neither (a) nor (b); there is no contract, so courts have nothing to enforce

A

An employment contract with a covenant not to compete will always be enforced in every state, including worker-friendly states like California, if A) It forbids the former employee from using confidential business information B) It is reasonable as to geography C) Both (a) and (b) D) Neither (a) nor (b)

A

Bella agrees to sell 10 acres of well-shaded rural land to Edward for $50,000. Their contract consists of a signed letter from Edward requesting the parcel of land (which Bella had advertised and described with particularity), a signed return letter from Bella stating the price, and a signed reply letter from Edward agreeing to that price. This contract is A) Enforceable even though the terms are spread over multiple documents B) Enforceable because contracts like this do not need to be in writing C) Unenforceable because the terms are spread over multiple documents D) Unenforceable because it lacks necessary terms

A

To which of the following contracts will the UCC most likely apply and thus require that the contract be in writing? A) Carla agrees to buy a quarterhorse from CCC Ranch for $10,000 B) Carla agrees to buy horse grooming supplies from CCC Ranch for $100 C) Carla cracks a tooth when she falls off her new horse, so she agrees to allow Dentist to create a new crown and then perform the procedure to cap the tooth for $2000 D) Carla decides she needs riding lessons, so she signs up for the month-long Beginning Horse Class at CCC Ranch for $1000

A

Walter worked nights as a clerk in a fast-food store. On his last work shift, Walter's boss told him, "I'm really grateful for the year that you have worked here. I am going to give you a bonus of $1,000 in your last paycheck." When Walter got his last paycheck, there was no bonus. If Walter sues, the likely result will be A) Walter will lose, as he gave no consideration. B) Walter will win, as the promise is enforceable. C) Walter will lose unless the promise was in writing. D) Walter will win, as no consideration is required to modify an employment contract.

A

What is an accurate statement about consideration for a contract? A) There is consideration by a party that forbears from taking an action that it has a legal right to take B) If there is too big a disparity in value between what each party gives, the court can invalidate the contract C) A promise of future action is not sufficient consideration D) All of the above

A

5. Trump sells land in New Jersey to Green so that Green can open a garden supply store. Trump knows that years earlier the land had been used to house a variety of pesticides, some of which have contaminated the soil. There are no public records about the pesticides, nor would a visual inspection of the property reveal them. Green never asks about pesticides during negotiations, and Trump remains silent about them. After the transaction is complete and Green clears the land for construction, he uncovers rusted and leaky pesticide barrels. Which of the following is true if Green sues Trump for fraud? A) Because Trump's silence is not an affirmative misrepresentation of any fact, Green cannot prove the first element of fraud B) If the sales contract contains a provision that Green takes the property "as is," he cannot void the contract C) If Green proves fraud, he can recover compensatory and perhaps punitive damages D) None of the above

C

A party can settle a debt for less than the amount demanded if A) The payment offered is something other than money, such as real estate or stock B) The debt is unliquidated, such as if there is a bona fide dispute as to how much is owed C) Either (a) or (b) D) Nether (a) nor (b)

C

Jimbo Smith has 15 years' experience as a mechanic, car chief, and crew chief in auto racing. Haas hires Jimbo Smith as the new crew chief (essentially the manager) for one of the SHR cars for a three-year period. The contract includes a noncompete provision; the provision prohibits Smith from using secret SHR technical data and from working for another Monster Energy Cup race team as crew chief for five years after leaving SHR. Immediately after the three-year term, Smith leaves SHR for a job with Richard Childress Racing, another Monster Energy Cup team. Which of the following is accurate? A) No court will enforce the provision because noncompete agreements must be separate contracts and not ancillary to another contract B) Because the provision is supported by the consideration of a three-year term, a court will enforce the entire provision because of the concept of freedom of contract C) All courts will enforce the part of the provision that forbids Smith from using secret technical data of SHR, but most courts will likely use their equitable power to reduce the five-year prohibition on Smith's working for another racing team to something more reasonable like one or two years D) A court cannot reform only part of a contract, so if any part of the noncompete provision is unlawful, the entire provision fails and cannot be enforced against Smith

C

Manager offers Joe an hourly-wage job at Pizza Hut. He works an eight-hour shift his first day. He will be paid in two weeks for all the hours he works during the two-week period. Which is accurate? a) Joe and Pizza Hut have a bilateral contract that is executory b) Joe and Pizza Hut have a bilateral contract that is executed c) Joe and Pizza Hut have a unilateral contract that is executory d) Joe and Pizza Hut have a unilateral contract that is executed

C

NASCAR driving champion Tony Stewart enjoys competing at local dirt tracks near where the premier Sprint Cup Series race is each week. He owns a dirt track racing company, Tony Stewart Racing, Inc. ("TSR"), which maintains the vehicles, equipment, and necessary employees. At one such local track in upstate New York he was involved in a collision that sent the car of a local driver, Kevin Ward, into the wall, ending Ward's racing for the night. After Ward exited his car, he was struck by Stewart's car and killed. Ward's estate (his family) desires to pursue a civil action against Stewart and TSR. Nervous about a high jury verdict, Stewart and TSR desire to settle the claims, so they authorize their attorney Armando to settle with Ward's family (who is represented by attorney Jessica) for $1 million. Under which scenario has there been the formation of an agreement (offer and acceptance)? A) Armando calls Jessica with the $1 million offer. After consulting with Ward's family, Jessica calls back and asks for $1.5 million, which Armando refuses. Jessica then states she will take the $1 million. B) Armando orally tells Jessica that they will pay $1 million to settle the suit, but she must accept by noon the following day. Jessica has trouble getting in contact with Ward's family, so by the time she calls Armando to tell him they accepted the offer, it is 1 pm the following day. C) Armando emails Jessica the $1 million offer to settle, but then he learns the jury returned a quick verdict. Thinking that advantageous to him, he emails Jessica to revoke the offer. Seconds before receiving the revocation email, Jessica sends a response to Armando's first email accepting the $1 million. D) None of the above

C

The UCC laws governing the battle of the forms applies A) Only to contracts for the sale of goods B) Only to contracts between merchants C) Both (a) and (b) D) Neither (a) nor (b)

C

Which of the following is accurate about integrated contracts? A) Even if the contract does not have to be written, the parol evidence rule would prevent oral testimony from modifying the terms of the written contract B) In seeking to void an integrated contract, a party can testify about economic duress, even though that testimony is outside of the written document C) Both (a) and (b) D) Neither (a) nor (b)

C

Alpha Co. offers Bravo Corp. $20,000 and Bravo accepts. Under which scenario is there sufficient consideration for this agreement to be an enforceable contract? A) Bravo agrees to provide security services for an Alpha even, but only if Bravo decides that the dangers at the event are not too severe B) Bravo agrees to finish performing its consulting services that it earlier contracted with Alpha to provide C) Bravo agrees not to sue Alpha for violating the Lanham Act even though Bravo knows that Alpha did not violate the Lanham Act D) None of the above

D

Haas hires 16-year-old driver Johnny Jeff Jones to a development deal. They negotiate the essential terms like monthly salary and sign a contract for a three-year term. Two months after turning 18, Jones leaves SHR to drive for another team. If SHR sues Jones on the development contract, which of the following is accurate? A) Courts never enforce contracts entered into by minors, so Jones can leave B) Because this contract is not for food, clothing, housing, or medical care, Jones can leave C) Jones can disaffirm the contract while still a minor or within a short time of turning 18, so the court will not enforce this contract D) A court might enforce this contract if Jones received and deposited his monthly salary after turning 18

D

Which of the following real estate contracts would require a written-and-signed document to satisfy the statute of frauds? A) Purchase B) Rental C) Easement D) All of the above

D

Jose helps his friend Charlie move supplies for Charlie's construction business. Charlie then promises to pay Jose $200 for his assistance. Jose's past help with moving is sufficient consideration to support Charlie's obligation to pay the $200. True False

False

A ski school has a contract that contains a clause exculpating the school from liability. If a school instructor injures a student and the jury finds that the instructor was grossly negligent, the student can recover despite the exculpatory clause. True False

True

Alpha Co. posts to a local business-finder website that it will pay $100 to the first lawncare company that mows and edges at its business location. Lee's Lawncare arrives 30 minutes later and mows and edges. Alpha must pay Lee's $100 because the parties formed a unilateral contract when Lee's performed the work. True False

True

Two merchants negotiate an oral contract for the sale of goods. The seller then emails a written confirmation of their terms and includes a signature. Even though the buyer did not sign anything, this written conformation could still satisfy the UCC statute of frauds. True False

True

Consumer Edward calls Bella and leaves a message that he desires to buy 10 gallons of 75 spf sunscreen from her "for market price," ASAP. The market price is $100/gallon. She sends him a reply text, "Tomorrow will ship you 10 gallons of 75 spf sunscreen for market price per request. Bella," but then refuses to sell him the sunscreen. If Edward files suit, a court will enforce this contract. a) True b) False

a

Optimus Prime Auto Parts desires to buy commercial land from Owner. Under which scenario can an oral contract for the sale be enforceable in court? a) Owner conveys the deed to Optimus b) Optimus pays 10 percent of the purchase price c) Optimus has not yet paid anything but hires a contractor, who has already begun building out the interior of the space d) Contracts for an interest in land are never enforceable unless signed and in writing

a

Optimus Prime Auto Parts needs retail space but does not want to purchase. Optimus Prime therefore agrees to a two-year commercial lease for $50,000. To be enforceable in court, the lease must be a) Written b) Signed c) Both (a) and (b) d) Neither (a) nor (b)

a

Alpha Co. offers Bravo Corp. $10,000, and Bravo accepts. Under which scenario is there likely sufficient consideration for this agreement to be an enforceable contract? a) Bravo agrees to provide landscaping services to Alpha for a year b) Bravo agrees to sell a used maintenance van that Bravo had purchased at auction for $1,000 the day prior c) Bravo agrees not to sue Alpha for tortious interference with prospective economic advantage because of Alpha's earlier fraud that prevented Bravo from winning a contract with Charlie Industries. d) All of the above e) None of the above

d

Big Boi Longjohn Co. enters into a contract with Cotton-Eyed Joe, a fabric wholesaler, for Joe to provide Big Boi with all of the cotton that Big Boi needs (at $1 per yard for five years) to manufacture its designer long underwear. Which of the following statements is accurate? A) Because Big Boi requires different amounts of cotton depending on public demand that mirrors the seasons, the agreement fails because the offer is not sufficiently definite B) Because Big Boi is not obligated to buy a particular amount of cotton, the agreement fails for lack of consideration C) Both (a) and (b) D) Under the UCC, the agreement is sufficiently definite and supported by the consideration of Big Boi's good faith in purchasing all of the cotton that it requires

d

Lewis is 17, and he signs a contract for a year of lessons from Joao's Jujitsu for $100 per month. Joao's requires parents to sign for minors, so Lewis used his older brother's ID card to imply that he was 18. After taking one lesson, Lewis sees jujitsu lessons are cheaper at Gracie Jujitsu so he quits Joao's and makes no payments. If Joao's brings a contract action against Lewis, what is the likely result? a) Contracts with minors are void, so no court will enforce it b) Lewis can disaffirm the contract so that it becomes unenforceable c) Same as (b), but he must make restitution for the value of the single lesson he took d) Lewis likely cannot disaffirm this contract with Joao's, so a court will enforce it

d

Which of the following contracts would be governed by the UCC instead of the common law? a) A sale of commercial real estate b) An employment contract C) An agreement to license the use of the "Nike" trademark D) A sale of 100 cattle

d

Alpha Co. owes money to Omega Corp. based on a contract. Under which scenario can Alpha pay an amount different than what Omega demands yet have that payment constitute adequate consideration to extinguish the debt? a) Alpha owes $100,000 based upon purchase of 10 electrical transformers for $10,000 each. Alpha proposes to settle the debt with 1,000 shares of Alpha common stock. b) Omega demands Alpha pay $100,000 for janitorial services provided over six months, though Alpha claims it had a discount and owes only $80,000. Alpha sends a check for $80,000 with the notation "Payment in full," which Omega deposits. A week later, Omega sends a check to Alpha for $80,000 and then sues for the full $100,000. c) Omega Corp. issued a credit card to Alpha, which incurred $20,000 in expenses and another $1,000 in fees, fees which Alpha disputes. Alpha sends a check to Omega's standard payment office for $10,000 with the notation "Payment in full," which Omega deposits. Omega's credit agreement with Alpha requires all settlements be sent directly to a specific Vice President. d) None of the above

c

Momoney Lending has dozens of branches in Texas and New Mexico and has solid financial resources for a mid-sized company. Iggy is a loan officer in the Dallas branch of Momoney; she works on an at-will basis. Her salary like those of the other employees is fairly modest, so she lives month to month with only a small savings. Having recently lost several loan officers who took jobs at other financial institutions, and because of the time and expense of training replacements, Momoney's corporate headquarters decides to revise the employee handbook to include a noncompete covenant that is reasonable in duration, geography, and scope. Iggy and all the at-will loan officers throughout the company are given a choice to accept the new employment contract or be terminated immediately, with a final paycheck for all time worked. Iggy signs the contract with the noncompete covenant but soon thereafter gets a job at a competitor inside the noncompete zone. Which of the following is most accurate if she goes to court to attempt to void the contract with Momoney? A) Her best theory is economic duress, and she likely can void the contract B) Her best theory is economic duress, and she likely cannot void the contract C) Noncompete agreements are always void against public policy D) This noncompete agreement is invalid because it lacks consideration

b

One evening at dinner, Stewart and Executive from a corporation discuss the possibility of the corporation's sponsoring an SHR car. Stewart and Executive agree to a 10-race sponsorship deal for $1 million. Under which scenario would the contract most likely be enforceable? A) The corporation is R.J. Reynolds and wants to advertise various cigarette products, but Congress has passed statutes that make tobacco product sponsorship of athletic events or sports teams a crime subject to fines B) Stewart and Executive each had two alcoholic drinks at dinner before finalizing the agreement C) Both (a) and (b) D) Neither (a) nor (b)

b

Retailer Edward calls wholesaler Bella and negotiates to buy 10 gallons of 75 spf sunscreen from her for the market price, deliverable within a week. The next morning Bella emails Edward confirming the contract at $100/gallon; she attaches her electronic signature. Edward emails back that afternoon and states that he objects to that price and will pay only $50/gallon. If Bella files suit, a court will enforce the contract at $100/gallon. a) True b) False

b

Which of the following is accurate about the specificity of price / payment in a contract offer? A) Only specific dollar amounts are sufficient B) Specific dollar amounts or percentages that are definite enough to calculate are acceptable C) Parties are free to leave the payment term blank and determine it later D) None of the above

b

Bobby Bolivia owns a used car dealership. Which of the following constitutes an offer by Bobby so that a response might be an acceptance and thus form an agreement? a) Ron asks Bobby about the cost of a Camaro, and Bobby responds that he cannot let it go for less than $5000. b) Bobby's website lists several cars he recently sold and the prices paid for them, including $5000 for a Camaro. Bobby has an identical Camaro on his lot. c) Radio Station announcement paid for by Bobby that the next 10 people to Bobby's dealership get a free sun visor. d) Bobby attends an auction of used cars. A Camaro with a reserve of $2,000 comes up. Bobby is the only person to bid on the auctioneer's opening amount of $1,000.

c

Jay Z is arrested for felony facilitation of prostitution, which violates state criminal laws. He and lawyer Saul sign a client agreement so that Saul can represent him in the criminal prosecution. Saul submits a bill for his services of $10,000, but Jay Z refuses to pay. If Saul sues Jay Z for breach of contract, under which additional fact would the contract be considered void and therefore unenforceable. a) Jay Z is convicted, so he did violate the prostitution statutes b) Saul had taken the bar exam at the time of signing the agreement but not yet passed it c) Both (a) and (b) d) Neither (a) nor (b)

c

Under which scenario has an offer been accepted so that the parties have an agreement? A) Wal-Mart telephones Julio to offer him a managerial job at a store in San Antonio. Julio agrees but adds that Wal-Mart pay his relocation expenses. B) Alonzo thinks that his neighbor Sal's grass is too high, so he texts Sal that he will mow Sal's yard for him for $20 unless Sal texts back by noon with a request not to mow. Sal does not text back. C) Academy Sports is a merchant that faxes a request for 1,000 pairs of Men's Size 6 running shoes at $50 per pair to Nike, another merchant, due in two weeks. Nike faxes back a form purporting to accept the offer, with the additional term that payment is due in advance. D) All of the above

c

Which of the following constitutes the termination of an offer? a) ABC Corp. offers Candidate a job in management, which Candidate must accept in writing by July 1. Candidate mails his written acceptance on July 2. b) Jones offers to form a partnership with Smith to provide pool care. While Smith ponders the offer over the weekend, Jones dies. c) Both constitute termination of an offer d) Neither constitutes termination of an offer

c

. Seventeen-year-old Lewis contracts for a year of lessons from Joao's Jujitsu for $100/month. Because this contract involves a minor, the contract is voidable at the option of either party, so Joao's can disaffirm the contract. True False

false