Business Law Exam #3
Winston contracts to sell a plot of land called Blackacre to Pusey for $500,000. Winston breaches the contract and Pusey sues. Blackacre's reasonable market value at the time of the breach was $525,000. Pusey can recover:
$25,000.
For which of the following contracts is a party's subjective dissatisfaction sufficient to excuse his performance under a "personal satisfaction" clause in a contract?
A contract to paint someone's portrait.
In the absence of an express condition, which of the following is subject to a "substantial performance" standard?
A promise to build a house.
Toby and Roy are car dealers; Toby makes a deal with Roy to sell a 1978 Buick. However, they failed to reach any agreement regarding the price of the car and decided to leave the matter to a future date to be decided once Toby delivers the car. Which of the following is true about this deal?
According to the Code, a reasonable price will be put on delivery.
In which of the following cases is there a material breach of a contract?
All of the above materially breach a contract.
To which of the following situations has the implied covenant of good faith and fair dealing been applied by the courts?
All of the above.
In a felony prosecution that proceeds all the way to trial, which of the following pre-trial steps will occur nearest in time to the trial?
Arraignment in the trial court
Sean goes to Pinnacle Corp., convinces the store manager that he is their loyal online customer Ryan and purchases a DVD credited to Ryan's account. He then sells the DVD to Jason for a higher price. When Ryan finds out, he wants the DVD back from Jason. Which of the following is true of the case?
Sean has voidable title to the DVD.
Lili owns a jewelry store on Melrose Avenue. In order to display her jewelry appropriately, she hires Eric the electrician to install new lighting in her store. While the work is being done, the store will be closed. Lili explains to Eric that she needs the work to be done before the weekend, when she makes the most sales. Lili and Eric agree to include in the contract a liquidated damages provision, which states that, if Eric does not complete the work before the weekend, Lili will be able to recover a specified sum for the loss of sales over the weekend. In order for the liquidated damages provision to be enforceable:
B and C.
Punitive damages are most likely to be awarded in which of the following contract cases?
Big Insurance Company acted in bad faith in denying Pete's claim.
Someone who recovers for breach of contract generally:
Can recover only for those losses that he can prove with reasonable certainty.
Catherine decided to have lunch at Tom's, one of the most popular restaurants in town. She ordered soup before her main course as usual. The soup served to Catherine contained a maggot floating about in it. Fortunately, she noticed this before she had it. She sued Tom's for negligence. The most likely result will be:
Catherine will not win since she did not sustain any damages.
Which of the following can be recovered by plaintiff who usually wins a tort case?
Compensatory damages
Y has breached a contract between X and Y, but has not materially breached it. This means that X can:
Sue only for damages caused by the breach.
Davis throws a dagger at Smith, intending to kill Smith. However, the dagger misses Smith and strikes the hat on Potter's head. The dagger does not make contact with Potter's body. Unharmed but finding the whole thing offensive, Potter sues Davis for battery. Which of the following is most true?
Davis is liable to Potter for battery
Agreements under which corporations avoid formal criminal charges and trials in return for their agreement to pay monetary penalties and submit to outside monitoring of their activities is called:
Deferred Prosecution Agreements.
If the delivery term of the contract is _____ the place at which the goods originate, the seller is obligated to deliver to the carrier goods that conform to the contract and are properly prepared for shipment to the buyer, and the seller must make a reasonable contract for transportation of the goods on behalf of the buyer.
FOB
A Tort is civil wrong which is also the same as breach of contract.
False
Behavior that strongly suggests that a party will not perform his obligations under a contract cannot ever be a material breach, because this would unfairly penalize a party who, after all, may later be able to perform.
False
Construction contracts typically are subject to a strict performance standard.
False
Defamation liability requires publication of the defamatory statement to an appreciable number of people.
False
For a battery to exist, the victim must be aware of a harmful or offensive contact at the time that contact occurs.
False
Generally, property owners do not owe a duty of care to trespassers, who regularly enter the land without authorization.
False
In a contract for X to sell Y a steam boiler, Y's obligation to pay is conditioned upon Y's personal satisfaction with the boiler. Even though the boiler meets every mechanical test imaginable, Y refuses to pay because he just doesn't like the boiler for some reason. Y is not obligated to pay, because the contract said that he must be personally satisfied, and a contract is a contract.
False
In a strict liability case, the plaintiff must prove that the defendant breached a duty.
False
In order to prove actual malice in a defamation claim, the plaintiff must show that the defendant had knowledge of the falsity of the statement.
False
In the case of false imprisonment, the plaintiff must be under confinement for a long time.
False
Negligent defendants are never liable for the consequences of an unforeseeable intervening cause.
False
Owners of commercial property enjoy greater privacy expectations in their property for Fourth Amendment purposes than do owners of residential property.
False
Special deterrence results when punishment of a wrongdoer deters other persons from committing similar offences.
False
Television and radio broadcasts usually are classified as slander rather than as libel because they involve spoken words rather than written ones.
False
The Fifth Amendment guarantees indigent defendants the right to court-appointed counsel.
False
There is no tort liability for fraud or deceit where the defendant did not actively make a false statement, but instead merely failed to disclose something.
False
Voluntary intoxication usually serves as a complete defense to criminal liability.
False
Whatever the type of injury experienced by the plaintiff, the usual rule is that only punitive damages are recoverable in a negligence case.
False
X contracts with Y to produce an advertisement for a Fourth-of-July fundraising party. Y does not produce the advertisement until July 6. Here, Y's breach of the contract is not a material breach unless the contract explicitly stated that time is of the essence.
False
The importance of the terms FOB and FAS in contracts for the sale of goods is that they obligate the buyer to pay immediately upon delivery of the goods.
False (If the delivery term of the contract is FOB or FAS the place at which the goods originate, the seller is obligated to deliver to the carrier goods that conform to the contract and are properly prepared for shipment to the buyer, and the seller must make a reasonable contract for transportation of the goods on behalf of the buyer.
Lisa took her computer to ABC Computer Sales and Repair, Inc. ABC mistakenly sold her computer to Rafi. Lisa may successfully sue Rafi for return of the computer.
False (Rafi is the good faith purchaser and Lisa cannot sue Rafi for damages.)
When determining the risk of loss, it makes no difference whether the goods delivered by the seller conform to the contract or not.
False (Risk of loss under the Code depends on the terms of the parties' agreement, on the moment the loss occurs, and on whether one of the parties was in breach of contract when the loss occurred.)
Article 2 of the UCC mandates that the parties to a sales contract state in specific and unambiguous language the exact terms of the contract. Otherwise, courts will declare the contract unenforceable.
False (The Code recognizes the fact that parties to sales contracts frequently omit terms from their agreements or state terms in an indefinite or unclear manner. It generally deals with these situations by filling in the blanks with common trade practices.
Parties to sale contracts should not necessarily act in a commercially reasonable manner and good faith.
False (The Code requires that parties to sales contracts act in good faith and in a commercially reasonable manner.)
Mei issues purchase order to June for goods which costs $ 25,000. June agrees to provide the same but she doesn't sign the purchase order. Mei can file a suit for the breach of contract.
False (The UCC recognizes gaps in agreements dealing with sales of goods. Hence, A cannot file a suit against B for not signing the purchase order.)
If the seller contracts to deliver goods to a certain destination and the contract says "Ex-ship," the seller bears the risk of loss until it delivers the goods to a shipper.
False (The seller bears the risk of loss until the goods are unloaded.)
Jack was an employee of ABC Corp. Harry, the president of ABC, had reasonable grounds to believe that Jack had stolen money from the corporation. ABC fired Jack. One month later, Jack applied for employment at DEF Corp. The vice president for Human Relations at DEF contacted Harry and asked about Jack's performance at ABC. Harry responded "I believe that Jack stole money while working here". DEF declined to hire Jack. Jack later discovered what Harry had said, and is now suing Harry for defamation. What is the likely outcome of this case?
Harry will win because he had a conditional privilege to make that statement.
Assume that a state, acting through the appropriate county prosecutor, plans to initiate a felony prosecution against Phil Anderer. Further assume that the state is among those in which felony defendants may be charged by either of the two methods discussed in the text. Which of the following is an accurate statement?
If a preliminary hearing is held and the magistrate conducting it concludes that there is probable cause to believe that Anderer committed the charged felony, the magistrate binds over the defendant for trial in the appropriate court.
_____ is defined as the desire to cause certain consequences or the substantial certainty that those consequences will result from one's behavior.
Intent
State X has a "Sunday Closing Law" making it a crime to operate a retail business on Sundays. The law's legislative history reveals that it was enacted to promote respect for the Sabbath by all the people of the state, and thus to promote public decency and morality. One Sunday, Judy Smith slips on a puddle of spilled soft drink at Joe's Hamburger joint (which is operating in violation of the statute), and suffers an injury to her spine. The soft drink would not have been spilled if the store had not been open on Sunday. Judy sues Joe in negligence. One part of her complaint relies on the doctrine of negligence per se. Under the doctrine of negligence per se:
Judy will not recover because she did not suffer harm of a kind that the statute was intended to protect against.
Which of the following is a transfer of the right to possess and use goods belonging to another?
Lease
Under Article 2 of the UCC, why does it matter whether a party to a contract is a merchant?
Merchants sometimes are treated differently than other parties.
Joe went to a music store; misrepresenting himself as James to the store attendant. He buys a plasma television on credit, charging it to James's account. He then sells that set to Mike. Mike buys the set in good faith. Which of the following is true in such cases?
Mike will hold a good title; hence no harm can be caused to him.
_____ is the failure to use reasonable care, with harm to another party occurring as a result.
Negligence
Adam published his personal opinion about the current condition of politics stating, "Though the government is unable to fulfill the demands of the public, they demand votes; they really are beggars on streets." Can politicians sue him for defamation under Tort?
No, because statements of pure opinion do not amount to defamation.
Which of the following generally is least likely to be awarded in a contract suit?
Punitive damages.
Negligence cases that address duties that run from possessors of real estate (land and buildings) to those who enter that property are often called:
premises liability cases
The standard of proof in a criminal case is:
proof beyond a reasonable doubt.
The Double Jeopardy Clause:
protects criminal defendants from having to undergo more than one prosecution by the same sovereign for the same criminal offense.
Today, trespassers who are injured while on someone else's land:
recover only when the possessor knows they are likely to trespass.
Store owners' "conditional privilege" defense against intentional tort claims brought by detained shoplifting suspects, recognized by most states, usually:
requires that the store owner act with reasonable cause.
In a _____ contract, the goods are delivered to the buyer primarily for resale with the understanding that the buyer has the right to return them.
sale or return
If a buyer and seller of goods fail to specify in their contract when title is to pass, the UCC's "gap filler" provision provides that title will pass when:
the buyer pays the purchase price.
Officers of the government may search and seize property without a search warrant when:
the officers seize an article of property that is in plain view.
The common law placed the risk of loss on _____ at the time of the loss.
the party that had technical title
An exception to the general rule is that if goods are entrusted to a merchant who deals in goods of that kind, the merchant has:
the power to transfer all rights of the entruster to a buyer in the ordinary course of business.
The Sixth Amendment does not guarantee a criminal defendant:
the right not to be subjected to unreasonable searches and seizures.
In an assault case, it is irrelevant:
whether the threatened contact actually occurs
One day, Jon, a custodian hired by the bank, carelessly left a rake next to the sidewalk when he went to lunch. Deb, a customer of the bank, stepped on the rake as she walked next to the sidewalk and was injured. Which statement is most likely correct?
The bank is liable for Deb's injuries.
Which of the following characteristics is NOT considered by the court to determine the "reasonableness of the risk"?
The defendant's subjective mental state
Which of the following enters a land without its possessor's consent and without any other privilege?
Trespassers
A and B have made a contract with an enforceable liquidated damages provision that states that B's recovery will be $10,000 in the event of A's breach. A breaches the contract, and B loses $50,000 in consequential damages as a result. B's recovery is limited to $10,000.
True
A corporation may be held criminally responsible for crimes committed by its employees if the employees' crimes were committed within the scope of their employment and for the benefit of the corporation.
True
Although a nolo contendere plea may lead to a judicial determination of guilt, it is inadmissible in later civil cases against the defendant based on the same conduct amounting to the criminal violation.
True
An accountant who substantially performs her duties to her client triggers the client's duty to pay the contract price less any damages resulting from defects in her performance.
True
An example of an ex post facto law would be a statute that makes an action a crime even though it was not a crime when it was committed.
True
Corporations may be held criminally liable even in the absence of proof that high corporate officers ordered or acquiesced in the offense charged.
True
Generally speaking, statements made during judicial proceedings are absolutely privileged and, therefore, shield against defamation liability.
True
If a construction contract provides that the property owner's duty to pay is conditioned on the satisfaction of an architect or engineer, then the builder cannot recover payments due if the architect or engineer honestly has a good faith reason for withholding a certificate indicating his or her satisfaction.
True
If a party excuses the occurrence of a condition, then the party is bound contractually by waiving the condition.
True
In many cases, a blind person will be held to a different standard of reasonable care than a person who can see.
True
In some states that have eliminated assumption of risk as a separate defense; assumption of risk reappears as one of the many kinds of fault that a court must weigh in applying the state's comparative fault defense.
True
Pat promises to install granite countertops in the home at 123 Main Street that Bruce is purchasing "provided that the escrow on the sale of 123 Main Street closes." The close of escrow on the sale of 123 Main Street is a condition precedent to Pat's promise.
True
Public figure Pam sues a newspaper for defamation based on statements regarding her stand on a public issue. Pam must prove the newspaper's "actual malice" in order to recover any damage.
True
Social guests are licensees in some states.
True
Sounds that reverberate across the plaintiff's land are more likely to be classed as a nuisance than as a trespass to land.
True
Special duties that run from possessors of real estate to those who enter the property are called "premises liability" cases.
True
The rule of lenity requires ambiguous criminal laws to be interpreted in favor of the defendants subjected to them.
True
The tort of negligent hiring is distinct from tort liability predicated upon the doctrine of respondeat superior.
True
Under many "mixed" comparative negligence systems, a plaintiff recovers nothing where the plaintiff's own negligence is 50% or more.
True
Under the USA PATRIOT Act, the Foreign Intelligence Surveillance Court may issue warrants of the "sneak and peek" variety.
True
X contracts to build a building for Y. Changes in the building code that were made after the contract was signed will increase X's costs in performing his duties. X is not excused from performance under the contract.
True
A bicycle manufacturer sells 100 bikes to Bill's Bike Shop. The contract says that Bill's may return any bike not sold within six months, and he will be reimbursed for them. Bill's Bike Shop burns down in one week after the delivery of the bikes, which are destroyed in the fire. Bill's bears the risk of loss for the 100 bikes.
True (In general, any risk passes on to the buyer on receipt of the goods if the seller is a merchant.)
In Exclusive Dealing Contracts, sellers have an obligation to use their best efforts to supply the goods to the buyers.
True (The Code says that unless the parties agree to the contrary, sellers have an obligation to use their best efforts to supply the goods to the buyer and the buyers are obligated to use their best efforts to promote their sale.
Law of sale of goods codified in the Article-2 of the UCC is modified to accommodate current practices of the merchants.
True (While the law of sales is based on the fundamental principles of contract and personal property, the UCC has been modified to accommodate current practices of merchants.
Which of the following characterizes false imprisonment?
Unfounded assertion of legal authority to detain a person
Jack had taken his girlfriend Jenny on a long drive. While driving on the highway, he suddenly had a severe headache and lost control of the car. They were hit by a passing car. The doctor had earlier warned Jack that he has a brain tumor, due to which he would experience occasional pains. Jenny sued Jack for negligence. Will she succeed?
Yes, because Jack could reasonably foresee severe pain which might to lead to accidents.
The law enforcement officers searched the house of co-occupants Ron, Jeff and Joe for firearms without a warrant. Ron consented to the search, while the others objected to the intrusion of their privacy. Is this a violation of the Fourth Amendment?
Yes, because other co-occupants present at the time of the search had objected to the search.
Rae Cidivist was arrested by the police on suspicion of possession of a controlled substance. Cidivist was informed of her Miranda rights, but not of the fact that an attorney retained by her fiancee was trying to contact her. This latter fact was known by the police. Cidivist waived her right to remain silent and confessed to the crime after a brief period of police interrogation. Cidivist's confession is:
admissible, according to Supreme Court precedent.
The Fourth Amendment to the U.S. Constitution requires that officers of the government may not conduct:
any unreasonable searches or seizures of individuals' real or personal property.
Someone confronted with an emergency requiring rapid decisions and action need not employ the same level of caution and deliberation as someone in circumstances allowing for calm reflection and deliberate action. This exception reflects the consideration of _____ in a negligence case.
context
The necessary ________ in assault is the same as that required in battery.
intent
Attendees of free public lectures and church services would be called:
invitees