LA245 Exam 2
Ahmir agrees to purchase a shipment of oriental rugs from Oriental Rug Company for the price of $50,000, to be delivered on August 15. On July 15, Ahmir notifies Oriental that he no longer wants to purchase the rugs. Oriental spends $1,000 to advertise the rugs and obtains a new purchaser who buys the rugs for $40,000. Oriental then sues Ahmir for breach of contract. If Oriental is successful in its breach of contract suit against Ahmir, Oriental may receive: A. nothing from Ahmir, because Oriental was successful in reselling the rugs. B. $11,000 from Ahmir. C. $50,000 from Ahmir. D. $10,000 from Ahmir.
B. $11,000 from Ahmir - difference in whatever was lost, additional expenses incurred due to Ahmir
Peter says to Carolina: "My property is about 2 acres, and I'll need you to clean it up. I pay the going rate. Start work at some point next week." This job offer probably: A. Will be considered a valid offer B. Is not valid because it does not give a specific salary C. Is not valid because it is not definite D. Is valid because the offeror intended for it to be a genuine offer
B. Is not valid because it does not give a specific salary
A principal will not be liable to a third party for a tort committed by an employed agent: A. unless the principal instructed the agent to commit the tort. B. if the agency agreement limits the principal's liability for the agent's tort. C. unless the tort was committed within the scope of the agency relationship. D. if the tort is also regarded as a criminal act.
C. unless the tort was committed within the scope of the agency relationship.
Grover is a sales representative for Avon Products Inc., a company that sells beauty and gift products door-to-door. Ruby, Grover's manager, assigns Grover a certain territory in which to work. The territory that Grover is assigned has historically had one of the highest sales records in the state. Ruby is concerned that Grover is not adequately working the territory, so she allows Regina to also sell in that same territory. Does Grover have any grounds on which to file a lawsuit against Ruby? A. Yes, Ruby has violated a principal's duty of cooperation and may be liable to Grover for Grover's lost profits. B. Yes, Ruby has violated the duty of compensation and may be liable to Grover for Grover's lost profits. C. No, Ruby is just helping Grover fulfill his full potential. D. No, Ruby is just looking out for the best interests of the company.
A. Yes, Ruby has violated a principal's duty of cooperation and may be liable to Grover for Grover's lost profits.
Larue owns a horse ranch. Larue enters into a contract with Dora for the purchase of thirty saddles for his ranch to be delivered on a specific date. If the price of the saddles is not included in the contract, under the U.C.C.: A. the court will determine a reasonable price at the time for delivery. B. Larue, the party purchasing the saddles, will supply the price at the time of delivery and must determine that price in good faith. C. there is no valid contract because the contract is incomplete. D. Dora, the party furnishing the saddles, will supply the price at the time of delivery and must determine that price in good faith.
A. the court will determine a reasonable price at the time for delivery. "If no clear oral agreement, UCC supplies its own terms called GAP-FILLERS" - cover prices, delivery dates and places, warranties, etc.
Acceptance? •Delta Tau Delta offers John a spot as a pledge member. He is informed that if he accepts, he must begin initiation on October 5. John tells DTD that he would "love to pledge" and that he could start the initiation after finals on October 10. Has John accepted the offer?
Answer: NO - not exact terms, counteroffer (rejection)
Acceptance? •Bob says, "I will clean your house for $50." Sue responds, "$50 for cleaning house and raking the yard." Has Sue accepted Bob's offer?
Answer: NO mirror image rule
•Melissa says to Katherine: We need a cashier at my part-time job. The pay and benefits are great and we need someone right away. Interested? Offer?
Answer: No,NO definite terms! Vague
Q: An employee of Canada Goose is supposed to deliver a package to a post office. During their trip, they drive to a grocery store and hit a pedestrian in the parking lot of the store. Is Canada Goose liable for the employee's actions? Answer: NO! Grocery store is outside of scope of employment, a frolic Q: An employee of Canada Goose is supposed to deliver a package to a post office. They make it to the post office to deliver the package. While standing in line they also decide to buy a card for a sick friend. After reaching over to grab the card, they whack another customer with their elbow in the eye, doing serious damage. Is Canada Goose liable for the employee's actions?
Answer: YES → detour, not where they were supposed to be where they were (still w/in scope of employment)
A valid contract can legally be voided by either party. T/F
False
As a general rule, employers have a legal obligation to disclose information about former employees to potential future employers. T/F
False
Noah negotiated the sale of land over Skype with a real estate developer in San Antonio, TX. He typed a thorough contract, describing precisely the land he was selling, the $2.3 million price, how and when each payment would be made and the deed conveyed. He printed out the contract, signed it and mailed it, along with a plot plan showing the surveyed land. Noah never heard back from the other party. The Texas developer changed his mind, deciding to develop an ecotourism lodge in Greenland instead and refused to pay Noah for his land. Would he win?
Land → common law! Need it in writing because 2.3 M > 500! There was a writing, but need defendant's (Noah's) signature! Thus, unenforceable → Noah would lose
•On Aug. 15, Calvin offers to sell Clarissa his laptop for $500 cash. He tells Clarissa she can only accept the offer by mailing the money to arrive by Sept. 2 at his University mailbox. Clarissa mails a check for $500 to Calvin, and the money arrives in the mailbox by Aug. 30th, although Calvin doesn't retrieve his mail (along with Clarissa's payment) until Sept. 4th. Did Clarissa accept Calvin's offer? A. Yes, because the money arrived at Calvin's mailbox before Sept. 2nd. B. Yes, because Clarissa paid Calvin's asking price for the laptop. C. No, because Clarissa didn't meet all of the requirements of the offer. D. No, because Calvin did not actually receive the money until Sept. 4th. Answer:
No, because Clarissa didn't meet all of the requirements of the offer. (CASH vs. CHECK → mirror image rule)
HYPOS: Mona Lisa contracted with an artist to paint her portrait, which the artist did. The artist sought $5,000 for her work, but Mona Lisa didn't like the painting and refused to pay. Does the common law of contracts or the UCC apply to this dispute?
Service = COMMON LAW
As a general rule, an employer may not discharge a worker for exercising a legal right if that right supports public policy. T/F
True
If a principal person accepts the benefits of an unauthorized transaction, or fails to repudiate it, then the principal is bound by the acts as if they had originally authorized it. T/F
True
One purpose of contract law is to determine which agreements are worthy of legal enforcement. T/F
True
Under the UCC, a merchant is frequently held to a higher standard of conduct than a non-merchant. T/F
True
Robert, a minor, buys a stereo from Jane for $200. State law allows a minor to disaffirm contracts within a reasonable time after turning 18. Robert disaffirms the contract the day after turning 18 and returns the stereo. a. This contract was a valid contract, Robert cannot disaffirm. b. This contract was unenforceable because it needed to be in writing to be enforceable. c. This contract was a voidable contract, Robert can disaffirm. D. This contract was a void contract.
c. This contract was a voidable contract, Robert can disaffirm.
The courts will find an implied contract when a. there is undue influence. b. there is promissory estoppel. c. conduct of the parties indicates they intended an agreement. d. justice demands it.
c. conduct of the parties indicates they intended an agreement.
Q: An employee of Canada Goose is supposed to deliver a package to a post office. During their trip, they drive to a grocery store and hit a pedestrian in the parking lot of the store. Is Canada Goose liable for the employee's actions?
Answer: NO! Grocery store is outside of scope of employment, a frolic
•Ricki spends the next several innings riding the opposing's team's first baseman. The nicest thing she says to him is "You suck, Franklin!" In the eighth inning, Franklin has had enough. He grabs the ballboy's chair and throws it into the stands, injuring Ricki's other elbow. Ricki _____ recover damages from the team over the thrown chair. A. Can B. Cannot because Ricki assumed the risks of attending the game. C. Cannot because of the exculpatory clause on the back of the baseball ticket. D. None of the above
A. Can (gross negligence)
Which of the following is NOT one of the three ways to amend a written contract? A. By writing and signing an amendment (or rider). B. By verbally agreeing to the changes and shaking hands on the deal. C. By crossing out the mistakes and writing in the corrections. D. By writing a totally new contract with the correct provisions. Answer =
B. By verbally agreeing to the changes and shaking hands on the deal.
Nina, who regularly buys and sells drones, texted with a drone manufacturer in Cleveland, OH. "I did it!" screamed Nina, "I made an incredible deal for the kiddie drones - twenty bucks each!" Nina sent a quick text: Confirming our deal - 100,000 Down-to-Earth Drones- you deliver Chicago - end of summer." She did not mention a price, or an exact delivery date, or when payment would be made. Nina never heard back from the other party. The drone manufacturer sold the Down-to-Earth Drones to another retailer at a higher price. Nina was forced to buy comparable machines elsewhere for $29 each. Nina Sued. Would she win?
SOF Exception → 2 merchants can orally make deal no writing required to make an enforceable contract so Nina would win Terms can be vague → just # of units Had a sufficient writing proving a contract was formed
Robert offers to detail Jane's car for $400. Jane must accept this offer in order to form an enforceable contract. A. True or False? B. Does the common law or UCC apply? C. if it said offers to SELL the car, what would apply? D. Does statute of fraud's apply?
A. TRUE B. Common law (detailing car = service) C. UCC D. No bc it's less than $500
Maxine lost her job as an electrical engineer with a large company that had provided health insurance benefits for Maxine and her family. She now A. must try to find insurance on her own or try to find another job with health insurance benefits. B. is protected under COBRA, which allows her continued health insurance coverage for 18 months as long as she pays the cost. C. is protected under COBRA, which requires her employer to continue her health insurance coverage for six months under whatever copayment arrangements she had while she was employed. D. has some protection under the NLRA, which requires her employer to pay for continued health insurance for three months following her termination if she did not leave the company voluntarily.
B. is protected under COBRA, which allows her continued health insurance coverage for 18 months as long as she pays the cost.
What is a whistleblower? A. an employee who thwarts an attempt by fellow employees to form a union B. an employee who crosses the picket line to return to work C. an employee who discloses illegal behavior on the part of his or her employer D. an employee who secretly gives information to his or her employer about union activity
C. an employee who discloses illegal behavior on the part of his or her employer
Onida is an employee at Kale's Manufacturing Company. The company makes bicycle tires, and Onida's job is to inspect the inner tubes before they are inserted into the tires. She recently noticed that the inner tubes are thinner than the safety specifications require. Onida tells her supervisor, Tom, about the problem, and is instructed to ignore it because these thinner tubes save the company money. Onida cannot ignore this problem in good conscience, so she tells Tom that if he is not going to report the problem, she will. Tom then fires Onida. Kale's Manufacturing Company is in an employment-at-will state. If Onida brings a lawsuit for wrongful termination, she will likely: A. be unsuccessful because she refused to follow her supervisor's directions. B. be unsuccessful because employment at will means that an employee can be fired at any time for any reason. C. be successful because she was fired for an unlawful reason. D. be successful because employment at will means that a company must have a valid reason for terminating an employee.
C. be successful because she was fired for an unlawful reason.
In a "mixed contract," one involving a sale of both goods and services, the court will A. apply UCC Article 2A. B. apply the UCC to the provisions of the contract involving the sale of goods and the common law to the provisions involving the sale of services. C. first determine the dominant purpose of the contract. if the sale of goods dominates the contract, then the court will apply the law of the UCC, Article 2. If the sale of services dominates the contract, the court will apply the common law. D. apply the lex mercatoria to the contract.
C. first determine the dominant purpose of the contract. if the sale of goods dominates the contract, then the court will apply the law of the UCC, Article 2. If the sale of services dominates the contract, the court will apply the common law.
Circus Pizza contracted with Art to run its birthday parties. Art's responsibilities included supervising the children and organizing the games. Circus did not investigate Art's background, which included a history of assaulting children. Art assaulted a 7-year-old girl in the restaurant's kitchen during a birthday party. Circus Pizza A. cannot be held liable for the damages because Art's conduct was not in the scope of employment. B. cannot be liable for the damages because Art committed an unforeseeable intentional tort. C. may be held liable on the basis of negligent hiring. D. may be held liable only if Circus actually knew of Art's background.
C. may be held liable on the basis of negligent hiring.
Gerald has been a sales representative for Goldsmith's Department Store for the past five years. When Gerald was hired, the general manager told Gerald that he would have a job there as long as he made $3,000 in sales each month. Every month, Gerald has exceeded that level in sales, so he is surprised when his supervisor calls him into the office and fires him. Gerald tells the supervisor about the promise from the general manager not to fire him as long as his sales were $3,000 each month. The supervisor responds by telling Gerald that the law in this state is employment at will, so he can fire him at any time for any reason. If Gerald sues Goldsmith's for wrongful termination, he will likely: A. be successful because employment at will does not mean that an employee can be fired at any time for any reason. B. not be successful because the promise from the general manager was not in writing. C. not be successful because employment at will means that an employee can be fired at any time for any reason. D. be successful because the general manager orally promised him that he would remain in his job as long as his sales stayed at a specific level, and he has maintained that level.
D. be successful because the general manager orally promised him that he would remain in his job as long as his sales stayed at a specific level, and he has maintained that level.
Mark's home had burned to the ground. When he met with his insurance adjuster, she accused him of burning down the house and said she would have him criminally prosecuted if he didn't settle the claim for much less than the house was worth. Mark agreed to the settlement. If he changes his mind, he can probably rescind the settlement on the basis of: Fraud Duress Undue Influence Mistake
Duress → trying to do smtg that benefits her by threatening Mark
If Denise is hired to work as a cashier, she has the implied authority to do acts reasonably necessary to carry out her job. T/F
True
Acceptance? •Patrick offers to sell his LA245 notes to Alex for $20. Patrick does not specify the method of payment. Alex writes a check to Patrick for $20. Has Alex accepted the offer?
Yes -- wasn't specific + that was reasonable
Harold offers to sell Emma his farmland in Bryson County. After discussing the sale at length in front of their friends Nicole and Jackson, Harold and Emma orally agree on a price of $120,000 for the land. The next day, Emma goes to the bank and withdraws $120,000 to pay Harold for the land. When Emma presents the $120,000 to Harold, Harold tells Emma he was just joking and does not wish to sell the land. Emma tries to enforce the deal, and Harold continues to refuse by saying that the deal was not in writing, and, therefore, it is unenforceable. The contract between Harold and Emma for the sale of the land: a. is enforceable, because there are witnesses to the deal. b. is not enforceable because of the theory of promissory estoppel. c. is not enforceable because it violates the statute of frauds. d. is enforceable because it complies with the statute of frauds.
c. is not enforceable because it violates the statute of frauds.
HYPO: GG Gravel agreed to build a driveway for Suewan within 60 days. After 10 days, GG Gravel removed their equipment from the site, refused to return, and refused to meet with Suewan despite promising to resume work on multiple occasions. Suewan: A. May immediately terminate the contract and sue GG Gravel for breach of contract without waiting another 50 days. B. May wait to see if GG Gravel returns to perform its obligations under the contract (i.e., see if the time comes and goes without a performance). C. Enter into a contract with another company since the one with GG Gravel has been terminated. D. All of the above
D. All of the above - when party participates in anticipatory repudiation, contract is over
1. The agents of a corporation include its: A. Officers (SVPs, VPs) B. Managers and Supervisors C. Other employees D. All of these are correct
D. All of these are correct
Which of the following would suffice for a signature on a writing under the Statute of Frauds (common law or UCC)? A. A stamped signature B. A handwritten signature C. A name keyed at the bottom of an e-mail D. Any of these would suffice. Judges define "signature" very broadly.
D. Any of these would suffice. Judges define "signature" very broadly.
•Five days later, GG Gravel contacts Suewan and agrees to resume their work. Suewan had not yet hired another company to do the driveway. GG Gravel returns the next day and finishes the project as planned within the 60-day timeframe. GG Gravel: A. Is not permitted to finish the job since they already breached the contract. B. May resume performance so long as Suewan has not already made other arrangements for another company to do the work and said they consider the repudiation to be final. C. May resume performance even if Suewan has already made other arrangements for another company to do the work. D. None of the above
D. None of the above - there has to be a telling that anticipatory repudiation is FINAL (if Suewan considers it final, or is Suewan materially changed position like hiring someone else) - True that if Suewan decides to wait GG can come back and fix it
Marsha and Antonio make a contract in which Marsha agrees to sell Antonio an expensive and rare piece of art. In the contract, Marsha states that she has the authority to enter into an agreement with Antonio, that she owns the piece of art, and that the art is authentic and not a forgery. These statements are examples of: A. Force majeure clause B. Integration clause C. Choice of law provisions D. Representations and Warranties
D. Representations and Warranties - statements of facts about past/present - gets party to enter agreement in the first place
Erika was planning her first cross country bike trip. She wanted a bike that would handle rough terrain easily because part of the trip would be through Kings Canyon National Park. Salisar is a salesman at Bikes by the Bay, a specialty bike store near Erika. Erika explains the details of the strenuous trip she is planning and states that she needs a very sturdy mountain bike that will handle it. Salisar recommends the Crosstrain 2000, a bike his store is pushing that month because both the store and the salesperson get a bonus for each bike sold. Erika purchases the bike and begins her adventure. Twenty miles into her journey, the front axle breaks due to the rough terrain, causing Erika to plunge down a steep hillside and sustain serious injuries. In advising Erika to purchase the Crosstrain 2000 for her trip, Salisar: A. breached the implied warranty of merchantability. B. breached the express warranty of fitness for a particular purpose. C. breached the express warranty of merchantability. D. breached the implied warranty of fitness for a particular purpose.
D. breached the implied warranty of fitness for a particular purpose. Implied Warranty of Fitness for a Particular Purpose: - Seller (at time of contracting) knows about a particular purpose buyer wants the goods + knows buyer relies on the seller's skill/judgment (unless excluded or modified) - Implied warranty that goods shall be fit for such purpose - Seller must know about special use buyer intends
Marlo is about to be transferred overseas and wants to sell her house. Julianna, who is not a real estate agent, offers to sell the house for Marlo for free. Marlo jumps at the chance to get such a valuable service for free! Because Julianna offered to sell the house for free, Julianna owes Marlo: A. the duty to perform as a reasonable real estate agent would perform in selling the house. B. no duty at all, because there was no compensation flowing from Marlo to Julianna. C. the duty to use reasonable diligence and skill to sell the house. D. no duty to sell the house, but if Julianna does attempt to sell the house, she owes Marlo the duty to use reasonable diligence and skill in performing the task.
D. no duty to sell the house, but if Julianna does attempt to sell the house, she owes Marlo the duty to use reasonable diligence and skill in performing the task.
A company's employee drove a UPS truck to deliver packages. The employee's negligence combined with a motorist's negligence to cause Tyler injury. Tyler sued the employee, UPS and the motorist seeking to hold the UPS employee and the motorist directly liable, and UPS vicariously liable for the employee's negligence. Assume the total damages are $100,000. Under the doctrine of joint and several liability Tyler may recover: A.$100,000 from UPS, $100,000 from the motorist, and $100,000 from the employee. B.Only $100,000 from UPS C.Only $100,000 from the motorist D.Up to $100,000 from the employee, UPS, the motorist, or some combination of the three.
D.Up to $100,000 from the employee, UPS, the motorist, or some combination of the three. JOINT SEVERAL LIABILITY
Mr. H contracts with A1 Plumbing to fix a bathroom leak for $200. A1 begins to fix the leak but then finds a less difficult and more profitable job. A1 abandons Mr. H's project. Mr. H never hires another plumber, the leak gets worse, leading to warped flooring and a severe mold infestation. Mr. H had to pay $2,500 to repair his floor and clean up the mold. If Mr. H sues A1 to recover $2,500 Mr. H will win. The court will award Mr. H $2,500. True/False
FALSE - could have easily avoided that - took no steps to mitigate risks, could have found/hired someone else
When Olga asks Sven if he wishes to sell his Harley motorcycle, he replies that he would not sell it "for less than $2,000." Olga replies, "I accept," and hands him $2,000. A contract exists. T/F
False
A buyer has an absolute right to reject non-conforming goods as long as the rejection is timely. T/F
False When the buyer rejects non-conforming goods, seller has the right to cure by delivering conforming goods before the contract deadline. UCC permits seller to cure after delivery date if doing so is reasonable If the seller breaches, buyer may cover by reasonably obtaining substitute goods; it may then obtain the difference b/w the contract price + its cover price, plus incidental + consequential damages, minus expenses saved
The mirror image rule requires that only notification is required to accept an offer. True or False?
False - may need writing or may need other terms to mirror offer - mirror image rule (common law) acceptance must be the same - not just notification!
• At Business University, semester enrollment begins at midnight on April 1. Jasper asked his roommate Alonso as a favor to register him for an important required course. Alonso agreed to do so but then overslept. As a result, Jasper could not enroll in the required course he needed to graduate and had to stay in school for an additional semester. Is Alonso liable to Jasper? A. No, because an agency agreement is invalid unless the agent receives payment. B. No, because Alonso was not grossly negligent. C. No, because the cost of the extra semester is unreasonably high. D. Yes, because Alonso disobeyed his instructions. Answer:
No, because Alonso was not grossly negligent.
A principal must reimburse an agent for any reasonable expenses incurred in carrying out his, her or their responsibilities. True or False?
TRUE *if reasonable, yes!
Kenny and his neighbors, Rick and Joyce Taylor, were good friends. Rick helped Kenny repair his truck and Kenny cut the Taylor's yard because they did not own a lawnmower. One day, while the Taylors were out, Kenny began to cut their grass. Joyce returned home and saw what he was doing but made no effort to stop him. Kenny negligently ran the mower over a stretch of gravel. A piece of gravel shot through the air and struck Jackie in the eye. Jackie sued Kenny and the Taylors. Question: Was Kenny acting as an agent for the Taylors?
This one is debatable but - court ruled No because they didnt control the precise manner in which he mowed
A contract may violate public policy even if the agreement does not violate a statute. T/F
True Ex) Asking people to contract away their fundamental rights. - If an employer requires its employees to sign a contract agreeing to forego their rights to vote in an upcoming election or they will lose their jobs - Contracts that involve unconscionability where the terms of the agreement are fundamentally unfair to one side like the contract in the grandpa car purchase video
•A homeowner hired a contractor to install a heating unit in her home. The heating unit was $2,500 and the contractor charged $150 an hour for her time. It took the contractor roughly 2 hours to install the unit. Will the UCC or the common law of contracts govern this contract ?
UCC (majority of $ coming from the good, and his work is incidental, anyone could have installed it, no special order)
An employee is asked to deliver a document to another company 80 miles away. While driving to the other company's office, the employee stops at a diner for lunch. While driving in the diner parking lot, she hits a parked car. Q: Is the employer liable for the property damage?
Yes because FORSEEABILITY that on an 80 mile drive, they'd need to stop for food
Jones Construction Company is building a series of new subdivisions in Newtown over the next two years. Jones enters into a verbal agreement with Harley Concrete Inc. to construct all the driveways and sidewalks in the subdivisions that Jones will be building. Jones and Harley agree on a price of $130 per cubic yard and that Jones will pay Harley at the end of each project. Harley completes the first project, which is four sidewalks and sixteen driveways, and bills Jones for the project. Jones decides that the price is too high and refuses to pay, claiming that they have no obligation to pay because the parties did not have a valid contract. If Harley sues Jones for payment the court would probably: a. apply quasi contract theory and award the fair market value of the work that Harley completed. b. hold that Harley is entitled to nothing because the contract violates the Statute of Frauds. c. hold that Harley is entitled to nothing because parties are free to terminate contracts if they so choose. d. apply quasi contract theory and award $130 per cubic feet, the contract price, to Harley.
a. apply quasi contract theory and award the fair market value of the work that Harley completed.
1. Marco hires Franco to burn down a clothing store that belongs to one of Marco's competitors. Marco pays Franco $1,000 upfront and promises another $3,000 when the job is done. Franco burns down the clothing store and then asks Marco for the rest of the payment. Marco just laughs at Franco and walks away. If Franco sues Marco for payment under the contract: a. Marco will have to pay because all the elements of a contract have been met. b. Marco will not have to pay because of the lack of competent parties. c. Marco will not have to pay because the subject matter of the contract is illegal. d. Marco will not have to pay because the agreement lacks consideration.
c. Marco will not have to pay because the subject matter of the contract is illegal.
Under the common law, if an offer specifies no time limit in which to accept: a. The offeree has 30 days to respond b. The offeree has 10 days to respond c. The offer is not valid and therefore it does not matter when the offeree responds d. The offeree has a reasonable period during which to accept.
d. The offeree has a reasonable period during which to accept.
Marie and Molly enter into a written contract to sell Marie's home to Molly. At the time the contract is executed, Marie tells Molly that for the last six months she has been sharing the home with a family of extraterrestrial beings. Marie states that she has asked the extraterrestrials to move out, but they won't; therefore, she is selling the family home to get rid of them and is willing to sell the home to Molly for well below market price. After the sale of the home is complete, Marie's children challenge the sales contract on the grounds that Marie did not have the mental capacity necessary to enter into a contract, even though Marie has not been declared incompetent by the courts. The contract between Marie and Molly can be rescinded: a. only if Marie's children have Marie committed. b. under no circumstances, because Marie was not adjudicated insane before she signed the contract. c. by either Marie or Molly. d. if Marie's children can prove that Marie lacked the mental capacity to comprehend the nature, purpose, and consequences of the contract.
d. if Marie's children can prove that Marie lacked the mental capacity to comprehend the nature, purpose, and consequences of the contract.
Contracts that cannot be performed within _______ are unenforceable unless they are in writing.
1 year
Implied warranties are created by A. the UCC itself. B. the buyer's intentions. C. both the seller and the buyer. D. The seller's words or actions.
A. the UCC itself D. The seller's words or actions. = express warranties
• Q2 has entered into a contract with a venue in New York to put on a concert. Due to COVID-19 New York orders the venue to close as part of a mandatory general quarantine order. It is now legally impossible for the venue to fulfill its obligations under the contract. Q: Will the force majeure clause excuse the venue?
Answer = TRUE B/c govt order to close down - acts of govt authority
Brutus orally promised to purchase a sailboat from Popeye for $50,000. When Popeye delivered the sailboat Brutus denied ever agreeing to buy the sailboat and refused to pay Popeye. Popeye sues Brutus for breach of contract. When submitting an Answer to the Complaint, Brutus stated the following: "I agreed to buy the sailboat for $50,000, but decided I didn't like the color." The court will rule the oral contract: A. Enforceable, but only if Popeye signed a written agreement. B. Enforceable, since Brutus admitted there was a contract. C. Unenforceable, since it wasn't signed by both parties. D. Unenforceable, since the acceptance violates the mirror image rule.
B. Enforceable, since Brutus admitted there was a contract. Good -- UCC -- SOF's UCC Exception: Judicial Admission --> enforceable
•Jackie offers to sell Mell a concert ticket for $50, and Mel replies, "I'll give you $40." Jackie refuses to sell at the lower price, and Mell says, "OK, OK, I'll pay you $50." Has a contract been formed? If so, at what price? A. Yes. Mel must pay $40. B. No. Mel made a counteroffer, which Jackie rejected. C. Yes. Mel must pay $50. D. Yes. Mel must pay $45, the average of the two prices.
B. No. Mel made a counteroffer, which Jackie rejected.
Ricki goes to a baseball game. The back of her ticket clearly reads: "Fan agrees to hold team blameless for all injuries - pay attention to the game at all times for your own safety!" In the first inning, a foul ball hits Ricki in the elbow. Ricki ______ recover damages from the team over the foul ball. A. Can B. Can because Ricki assumed the risks of attending the game C. Cannot D. None of the above
C. Cannot - said it clearly
A valid contract can legally be voided by either party. True or False?
FALSE
In business law, a lawyer's primary job is to represent the client in contract litigation. True or False?
FALSE
As a general rule, an agent is liable on contracts entered into on behalf of a fully disclosed principal. T/F
False - if principal is fully disclosed --> NOT liable/covered - Agent is liable if principal is undisclosed or unidentified
The element of a contract that states that the parties must be adults of sound mind is consent. T/F
False (capacity + legality)
Hypo: The manager for the Washington Mystics orally agreed to purchase 100 custom jerseys from a clothing manufacturer for $1,000. After the clothing manufacturer had already produced 25 custom jerseys with the new team logo, the Mystics manager backed out of the agreement. If the manufacturer sues the Mystics for breach of contract, the court will not enforce the contract since it violates the statute of frauds. True or False?
Jerseys → UCC (good) SOF's applied bc more than $500 Exception: Specialty goods exception so no writing required to make an enforceable contract → breach False
1.A corporation can only act through its agents. True or False?
TRUE
In a mixed contract involving both goods and services, Article 2 of the UCC will govern if the predominant purpose is the sale of goods. True or False?
TRUE
A Purchase Money Security Interest ("PMSI") in consumer goods perfects automatically, without filing. T/F
True
•Jim says to Michael: "Hey, come work with me this summer for two months at my dad's hardware store, Nuts-n-Bolts. It's a full-time job that pays $12 an hour." Offer?
Yes, definite terms
Ruby, a seventeen-year-old, purchases a car from Smitz Used Auto Sales and agrees to pay for it over a period of twenty-four months. Ruby makes the payments for four months but then decides the car payment is too much for her limited budget. Ruby tells Smitz that she wants to stop making payments and that she wants out of the contract completely. The contract between Ruby and Smitz can be canceled by: a. Smitz, because Ruby is a minor, but Smitz must allow Ruby to keep the car. b. Ruby, because she is a minor, but Ruby must return the car. c. Smitz or Ruby, because Ruby is a minor, and Ruby may keep the car. d. Ruby, because she is a minor, and Ruby may keep the car.
b. Ruby, because she is a minor, but Ruby must return the car.
If an offer specifies no time limit in which to accept, a. the offeree has 30 days to respond. b. the offeree has a reasonable period during which to accept. c. the offeree has 10 days to respond. d. the offer is not valid and therefore it does not matter when the offeree responds.
b. the offeree has a reasonable period during which to accept.
Brindley has an old shed on her property that needs to be removed. She posts the following ad on Facebook: "Shed needs to be gone. You take down and haul away. (Much of the wood is reusable.) $100 to the first person to show up and haul this away." This is an example of a(n): a. illegal contract. b. unconscionable contract. c. unilateral contract. d. bilateral contract.
c. unilateral contract.
Janelle has an art collection that she wants to sell. She calls Amber and tells her to sell the art collection for her at an upcoming auction. Amber agrees. This is an example of express authority. apparent authority. intermediary agency. respondeat superior.
express authority
Under the Fair Labor Standards Act, which of the following scenarios is legal? A. 12-year-old Molly works several hours per day on her family's farm picking vegetables B. 14-year-old Luis works full time bagging groceries at a supermarket C. 13-year-old Dianna works five hours per week stocking shelves at a drugstore D. 17-year-old Cole has taken a part-time job as a coal miner working alongside his dad
A. 12-year-old Molly works several hours per day on her family's farm picking vegetables
Heather is an artist and has several watercolors she would like to sell. Heather orally asks Rylee to sell the paintings for her and directs Rylee that each painting should be sold for at least $100. Rylee schedules a showing in her art gallery to display Heather's paintings. On the day of the showing, a customer offers to buy one of the paintings for $100, and Rylee accepts. When Heather finds out the price the painting sold for, she tries to get the painting back from the customer. Heather claims that she and Rylee did not have a written agency agreement, and, therefore, an agency relationship did not exist between them. Is Heather correct? A. No, most agency agreements do not have to be in writing to be effective. B. Yes. Allowing this agency agreement to stand would violate the statute of frauds. C. No. Agency agreements are never in writing. D. Yes, most agency agreements must be in writing to be effective.
A. No, most agency agreements do not have to be in writing to be effective.
Roland and Alfreeda enter into a written agency agreement in which Alfreeda will represent Roland as his agent to obtain acting jobs for Roland. No termination provisions are included in the written agreement. If Roland wishes to terminate his agreement with Alfreeda: A. Roland must do so in writing because the agency agreement is in writing. B. Roland must do so by sending the termination notice to Alfreeda by certified mail. C. Roland may do so by providing notice to Alfreeda in any reasonable manner. D. Roland must do so in person only.
A. Roland must do so in writing because the agency agreement is in writing.
The courts will find an implied contract when: A. Justice demands it. B. There is promissory estoppel. C. Conduct of the parties indicates they intended an agreement. D. There is fraud.
C. Conduct of the parties indicates they intended an agreement.
Rob agrees to act as an agent for Diane in selling her car. Diane has a duty of loyalty to Rob. Answer =
FALSE - Rob has a duty of loyalty to Diane
HYPO: When Randy, an electrician, accepted a job with Buren Construction, Randy signed the following agreement: "Upon termination of my employment with Buren Construction, I agree never to work for another employer as an electrician." If Randy resigns from Buren Construction, this agreement would be upheld under the theory of freedom of contract. True or False?
FALSE - Unreasonable to say he can NEVER work again as an electrician
The UCC does not apply to a contract for the sale of goods if the value of the goods is less than $500. T/F
False
There is a higher percentage of workers in labor unions now than at any other point in history. T/F
False
A person who is mentally impaired generally can create only (voidable, fraudulent, void, unconscionable) contracts
Voidable
Triec, Inc., is a small electrical contracting company in Springfield, Ohio, owned by its executives Yeazell, Jones, and Heaton. Employees contacted the International Brotherhood of Electrical Workers, which began an organizing drive, and 6 of the 11 employees in the bargaining unit signed authorization cards. The company declined to recognize the union, which petitioned the NLRB to schedule an election. The company then granted several new benefits for all workers, including higher wages, paid vacations, and other measures. When the election was held, only 2 of the 11 bargaining unit members voted for the union. Question: Did the company violate the NLRA?
YES - timing --> trying to sway vote
Selma wants to buy Matilda's house. Selma has been admiring the house for a long time and has asked Matilda repeatedly to sell the house to her, but Matilda has always refused. Finally, Selma tells Matilda that if Matilda does not sell Selma the house, Selma will kill Matilda's daughter. Afraid for her daughter's life, Matilda signs the contract to sell the house to Selma. If Matilda later tries to rescind the contract: a. Matilda may not rescind the contract because it has all the elements of a valid contract. b. Matilda may rescind the contract on the grounds of undue influence. c. Matilda may rescind the contract on the grounds of unconscionability. d. Matilda may rescind the contract on the grounds that she signed the contract under duress.
d. Matilda may rescind the contract on the grounds that she signed the contract under duress.
Zayn boards the Big Rock Metro to ride downtown to his job. Zayn gives his money to the driver and takes his seat. Neither the driver nor Zayn says anything. Zayn and the bus driver: a. have a formal contract. b. have no contract. c. have an express contract. d. have an implied contract.
d. have an implied contract.
Sweet Plantation, Inc. made a written contract with Candy, Inc. whereby Sweet Plantation agreed to supply all of Candy's sugar requirements for the next year at $.25 per pound. A dispute arose as to how much sugar Sweet is to supply. The parol evidence rule will bar Sweet's introduction of evidence concerning the intent of the requirements of Candy. T/F
False
Zoe, who works as a retail clerk, wishes to talk with her coworkers about organizing a union. Her employer forbids her from talking with other workers about union activity in the presence of customers and threatens to fire her if she joins the union. Does the employer have a legal right to make this threat to Zoe? A. Yes, the employer may prohibit its employees from discussions about union organizing. B. Yes, but only if expressly authorized by state law. C. No, an employee has the right of free speech at any time. D. No. An employer may limit the time and place of conversation but may not threaten to fire the employee.
D. No. An employer may limit the time and place of conversation but may not threaten to fire the employee.
Under the federal legislation known as OSHA, A. employers must keep records of all workplace injuries. B. employers must keep a record of recognized hazards used in the workplace. C. employers may monitor workers' email messages if the monitoring is done in the ordinary course of business and the employer provides the email system. D. employers must keep records of positive results of workplace drug tests.
A. employers must keep records of all workplace injuries. C is true but not under OSHA
Hypo: Raul wants to plant a garden, and he agrees to buy a small piece of land for $300. Later, he agrees to buy a table for $300. Neither agreement is put in writing. The agreement to buy the land _________ enforceable, and the agreement to buy the table ________ enforceable. A. Is; is B. Is; is not C. Is not; is D. Is not; is not
C. Is not; is - land --> because it's land it needs to be written - its goods less than $500 so its valid
•Q2 Band has entered into a contract with a venue in New Jersey to put on a concert. Due to COVID-19, New Jersey issues nonmandatory guidance strongly encouraging all its residents to cancel nonessential travel and to avoid large gatherings and public places to the extent possible. As a result, the market for tickets dries up, and Q2 Band is only able to sell 10% of the seats available. Q: Will the force majeure excuse the band? Answer =
No - non mandatory guidelines - economic hardship
Q: Consent is present in every contractual relationship. Does that mean that the parties to a contract are in an agency relationship?
No - you need control + fiduciary relationship • An agency relationship requires all three elements
Nadia needs help running her bakery. Nadia contacts her friend Zoey, who has baking experience but lives in another state, and offers Zoey a job. Nadia orally promises Zoey that she will employ Zoey for at least two years. Zoey quits her job in the other state, moves her family, and begins to work for Nadia. After three months, Nadia terminates Zoey's employment. Zoey sues Nadia, claiming they had a contract for two years. If Nadia defends the lawsuit by claiming the contract could not be enforced because it violates the statute of frauds, the court will likely hold in favor of: a. Nadia, because enforcement of the promise is necessary to avoid injustice. b. Zoey, under the theory of promissory estoppel. c. Zoey, because the agreement violated the statute of frauds. d. Nadia, under the theory of promissory estoppel.
b. Zoey, under the theory of promissory estoppel.
Rosemary's son Dave was recently injured in an automobile accident and now needs round-the-clock care. Rosemary works at the Silver Spoon Café, which has 63 employees. Rosemary advises her supervisor that she needs to take time off to care for Dave. Rosemary quickly uses up all her accrued leave time, so she applies for time off under the Family and Medical Leave Act (FMLA). Under the FMLA, Rosemary may take unpaid time off to care for her injured son for up to: fifteen weeks. twelve weeks. ten weeks. twenty-six weeks.
twelve weeks
Lloyd purchases a combine harvester from John Deere for use on his wheat farm. The price is $400,000. Wyatt pays $20,000 down and signs a financing agreement with John Deere for the other $380,000, payable in monthly installments. John Deere files a financing statement covering the loan. Lloyd uses the combine for two years and makes all his monthly installment payments. After a major flood destroys Lloyd's crops, Lloyd is desperate for money. Lloyd takes out a loan with Farm Bureau Credit Company for $100,000 and uses the combine for collateral. Because Lloyd cannot currently use the combine due to the extensive damage to his fields from the flood, Lloyd lets Farm Bureau take possession of the combine. Four months later, Lloyd files for bankruptcy. John Deere and Farm Bureau each file claims to reclaim the combine, because it was collateral for their loans to Lloyd. The entity that can lawfully reclaim the combine as collateral for Lloyd's loan is: A. John Deere and Farm Bureau Credit Company. B. John Deere. C. the bankruptcy trustee. D. Farm Bureau Credit Company.
B. John Deere - had financing agreement + attachment is perfected FIRST so JD takes priority over Bank (bank was perfected but not first) Priorities among Creditors: - When 2 creditors have a security interest in the same collateral → party who has priority in the collateral gets it - A party w/ a perfected security interest takes priority over a party w/ an unperfected interest - If neither secured party has perfected, the 1st interest to attach gets priority - Between perfected security interests, the 1st to file or perfect wins *both is not an option