Business Law Final Exam
Debtor buys a new car for $30,000 and finances the entire purchase at Chase Bank (the car is the collateral for the loan—Chase Bank is a secured creditor). The car is financed over a seven-year period. After almost five years, when the car is worth $8,000 (the cash value of the car), and the debtor owes Chase Bank $11,000, Debtor files a petition for Chapter 7 bankruptcy. Assuming in this bankruptcy case, general creditors get 10 cents on the dollar for their claims, how much will Chase Bank get in this Bankruptcy case?
$8,300
Business 201 is composed of two parts or components. These components are:
A Lecture taught by two different professors and a Discussion taught by a Discussion group leader.
What is a "B-Corp.?"
A corporation that has met certain sustainability and environmental standards and has been certified by B-Lab
Which could be an example of libel per se?
A written poster hanging in the school cafeteria which states that the principal stole money from the school treasury.
Fed-X hired Able as a regular delivery driver. Before hiring Able, Fed-X checked Able's references and found that Able seemed completely careful and responsible. Fed-X always gave Able quite specific instructions regarding routes, delivery times, etc. One day, after working at Fed-X for five years and while on a regular delivery, Able spotted the boy-friend of his X-wife, Thomas, who was walking down the sidewalk (for some reason Able hates his X-wife and hates anyone who dates her). Able parked his Fed-X truck, walked across the road, and gave Thomas a severe beating telling him not to date his X-wife. Thomas sues Fed-X for the injuries inflicted by Able's assault and battery. Fed-X will not be liable because
Able was not engaged in an inherently dangerous activity. *Able did not act within the scope of his employment when attacking Thomas (Able had temporarily left his employment for personal purposes plus this was an intentional tort that Fed-X did not encourage).
Ace is an agent for the Parker Manufacturing Company. After completing a $2,000,000 deal with a customer one day, Ace receives a token of personal friendship from the customer's president: a new $95,000 Porsche 911 sports car. In this case
Ace must turn the car over to Parker.
Subaru, the car, is manufactured in Lafayette, Indiana. Subaru promotes their car as a "green machine" from a green manufacturing process. Subaru advertises that they reduce their environmental footprint by
Achieving zero landfill statu
It is the Board of Directors for a corporation that is responsible for the overall management of the business. For approximately the last one hundred years, until recently, the Board of Directors would manage to "maximize the profits" of the corporation. This management style was advocated by almost everyone including the famous economist, Milton Friedman, who won a Nobel Peace Prize. Friedman indicated that the only social responsibility a business should have was to maximize profits and increase shareholder value. Further, Friedman argued that any business that did not do this would eventually be driven out of business by the competition. On August 19, 2019, the Business Roundtable, a group of leading business leaders, stated that it should not be the only goal of the business to advance only the interest of the shareholders (the owners of the business). Instead, the management of the business should take into account all "stakeholders." This was a major philosophical change. Who are some of the "stakeholders" that should be considered in the management of the corporation? Select the best answer.
All choices are correct
In the video lecture / related class outline, we talked about various individuals who did some "bad things." For example, we talked about an attorney who abused his position by requesting "quid pro quo." Also, we talked about two GVSU students who stole a purse from another student. Professor Sanford suggested in the class material that these people engaged in bad, unethical conduct for the following reason(s) / select the best answer.
All of the choices are correct
Contracts are based on
An objective manifestation of the intent to be bound
In the video lecture / related outline, professor Sanford discussed B-Corps. Why does professor Sanford like B-Corp's and why does professor Sanford encourage students to do business with B-Corp's?
B-Corp's are committed to the 3BL (profits, people, planet)
Billy BigBucks, a millionaire, forms a corporation so Bill will have "limited liability" with his business. Billy invests $1,000 in the business and the business borrows the rest of the money it needs to operate the business. Billy's business is called "Back-Yards-R-Us, Limited" and the business installs a swimming pool in Kelly's backyard (this is the first customer of the business). During construction of the swim pool, a neighbor's 11-year-old son, Mike, falls into the empty pool and hits his head, causing a serious concussion and brain injury. Billy's business did not have the required fence around the construction site as required by local law. The neighbor sues Kelly, the home-owner, Back-Yards-R-Us, the business, and Billy BigBucks, the owner of the business, for a total of $500,000. Assuming the parent of Mike wins this lawsuit, and assuming Kelly only has $100,000 in potential assets, and assuming the business only has $1,000 in actual assets, is it possible that Bill BigBucks has personal liability for this lawsuit?
Back-Yards-R-Us, Limited, is liable for this judgment to the extent the business has assets (in this case only $1,000) and Billy BigBucks is, also, personally liable assuming the court "pierces the corporate veil" and finds the owner of the business, Billy, personally liable since the corporation was breaking the law.
In the material on secured transactions (Article 9 of the UCC) and bankruptcy, professor Sanford told the actual story of a young person in West Michigan, Michael Vorce, who some-how managed to borrow nearly $27 million from various banks and credit unions (like Macatawa Bank). Why would various banks and credit unions loan so much money to Michael Vorce?
Bankers loaned the money because they thought Vorce had sufficient collateral (boats) to cover the loans in the event Vorce defaulted on the loans.
Gene offers to sell Oliver his diamond ring but conditions the sale on Oliver accepting the offer by February 21st. Gene may revoke the offer:
Before Oliver accepts the offer
A pig farmer, Billy, paid approximately $200,000 for an Italian sports car, and the car was in the name of Billy without any lien against the car. Approximately two years later, Billy files a petition in Chapter 7 bankruptcy showing $1 million in debts and only $1,000 in assets. The car was not listed as an asset in Billy's chapter 7 bankruptcy petition. Later, it was discovered that, prior to filing the Chapter 7 petition, Billy had transferred the sports car to his mother for approximately $200. Billy's mother was unaware she was the owner of Billy's car. As a result of all of this, what happened to Billy?
Billy was not allowed to go bankrupt (he ended-up going to jail for bankruptcy fraud for attempting to hide assets from his creditors), and the bankruptcy court got the sports car for the benefit of Billy's creditors.
In the class presentation and class materials we discussed how Larry Johnson, a former football player for the Kansas City Chiefs, called some sports reporters "H _ _ _ 's" and Larry was later suspended for two games (and later traded to another team). Bob Griese, a football analyst, made a comment on national television that Colombian NASCAR driver, Juan Pablo Montoya, was not doing well in the NASCAR standings because "he's out having a taco . . .". Bob Griese was later suspended for one game for his remark (and two games later "retired"). What did Larry Johnson and Bob Griese do wrong (based on class material)?
Both A and B are the best answers
VIP pets, Inc. hired Aaron to be the manager of one of its stores. VIP Pets sells a wide variety of animals. Aaron was given considerable authority by VIP Pets to operate the store, including the right to buy inventory. Aaron was told that any inventory purchase exceeding $2,000 required the approval of VIP Pet's general manager. On June 20, Matt went to VIP Pet store to buy a ferret. Aaron allowed Matt to handle one of the ferrets without warning the customer, Matt, that this particular ferret had previously bitten many of the store's clerks. Matt was bitten by the ferret and seriously injured, later losing his finger due to the ferret bite. Assuming Matt sues Aaron and Aaron's employer, VIP Pets Inc., for negligence, who is potentially liable?
Both Aaron and VIP Pets Inc. are potentially liable for Aaron's negligence.
In class, we discussed a white man, referred to as ID Adam, who questioned a black woman's right to use the homeowners' association swimming pool. When the woman refused to produce an ID, due to racial profiling (no one else was asked to produce an ID), ID Adam called the police on the woman. Later the Homeowners Association issued an apology to the woman, a member of the association, and accepted ID Adam's resignation from the Association as a pool chair and board member. ID Adam did this on his personal time. When ID Adam's employer, Sonoco Products, discovered what Adam did, what did Adam's employer do?
Both B & C are good answers.
Mr. Rich employed Professor Sanford (pursuant to a written contract) to purchase a used Porsche 911 in the G.R. area for $22,000 from Mr. Rich's neighbor. Professor Sanford was instructed to buy the car in his own name and not to tell anyone of Mr. Rich's plans. Professor Sanford then purchased the Porsche 911 from the neighbor for $22,000, pursuant to a written contract that was signed by both Sanford and the Seller/Neighbor. The neighbor reasonably thought that he was dealing with Professor Sanford and no one else. Which of the following is true?
Both Mr. Rich & Professor Sanford are bound on the contract to the neighbor.
Which of the following are non-dischargeable debts under a Chapter 7 bankruptcy filing?
Both alimony and child support, and intentional torts
When Rosa Parks died, as discussed in the video lecture/ outline material, her will left everything Rosa owned to her charitable trust to educate people regarding "self-development." Based on class material, blood relatives of Rosa Parks contested the will of Rosa Parks on what grounds?
Both undue influence by the Personal Representative and Trustee of Mrs. Park's estate and trust (Elaine Steele and Adam Shakoor) and lack of testamentary capacity by Mrs. Parks at the time she executed the will.
In the Brewery Vivant article that was included in the reading material, professor Sanford likes this West Michigan business because
Brewery Vivant is a B Corp committed to the 3BL (triple-bottom-line)
Typically, how are corporate directors chosen?
By a majority vote of the shareholders.
Candy, who has a large trust fund, is angry with Alice because she stopped washing Candy's car for her. Alice ran a successful dog grooming shop, and Candy decided to open a dog grooming shop next door solely to run Alice out of business because she was angry over the car washing issue. Which of the following is a correct statement regarding Candy's liability, if any, to Alice?
Candy has committed the tort of unfair competition.
Which chapter of the Bankruptcy Code is used to reorganize the debtor's financial affairs under the supervision of the bankruptcy court.
Chapter 11
Cindy Smith worked as a receptionist for the XYZ Corporation. While working for XYZ, Cindy joined the Children of Nature's Way, a small cult that demanded total commitment from its members. One of this cult's major rules was that members could only bathe once a year. Cindy, who was completely devoted to the cult and its teachings, obeyed this rule. Eventually, she was removed from her receptionist job because her odor and appearance were offensive to co-workers and visitors. Cindy sues XYZ for religion-based discrimination under Title VII. Which of the following is most likely to be true based on our class discussion of this issue?
Cindy will not recover, because XYZ can't reasonably accommodate Cindy's practice without causing itself undue hardship.
Teri the driver of the truck never realizes that a log she is hauling to a construction site is improperly secured. The log flies off the truck and strikes Wanda a pedestrian and causes serious injuries. Teri never stops at the scene of the accident and continues on her way to a construction site. The police eventually track Teri down by her license plate number which is provided by the driver of a car that was following Teri's truck. The police cite Teri under a statute that makes it illegal to drive with an unsecured load and failing to stop at the scene of a personal injury accident. Wanda also files a lawsuit against Teri seeking compensation for her injuries. The the lawsuit that Wanda files against Teri could best be described as:
Civil and Substantive
Eighty-year-old Clark exhibits confusion, forgetfulness, and disorientation from time-to-time. To Clark's doctor, these symptoms indicate the on-start of dementia. Elsa, who has significant contact with Clark, believes that he is in a state of mental decline. These facts indicate:
Clark's potential lack of capacity to execute a valid will
Which of the following involve(s) the active hiding of the truth about a material fact?
Concealment
Which of the following are types of conditions that affect the performance obligations of the parties?
Conditions precedent, conditions subsequent, and concurrent conditions
Lacy and Jim enter into a contract for the sale of a home about which Lacy fraudulently misrepresents a number of material facts. Lacy even tells Jim that her commission on the sale is 6 percent, but their signed, written contract states "12%". The Statute of Frauds governs:
Contracts involving an interest in land.
Which of the following is generally not true regarding the management of the corporation?
Directors do not participate in corporate management
Mr. Carlin is Greg's jewler, Mr. Carlin tells Greg that she will kill him if he doesn't buy a "triple large" gemstone ring that costs over $1 million. Greg doesn't want the ring, but feels he has no reasonable alternative other than to go along with the purchase and he buys the ring. Mr. Carlin has most likely engaged in:
Duress
Which of the following describes conditions explicitly stated in the contract?
Express
A criminal case can arise from statutory or common law.
False
A mistake of fact cannot be unilateral.
False
All civil cases arise from statutes.
False
All schools of jurisprudence assert that the law is one thing and morality is another, and that we should obey even bad laws.
False
An express contract is one that has been fully performed by the parties.
False
An offer to enter into a contract requires a subjective manifestation of intent to be bound by the terms of the offer.
False
Both Officers and Shareholders are directly responsible for the daily management of a corporation
False
Brewery Vivant and Herman Miller, both businesses in West Michigan, have each qualified for "B-Corp" status.
False
For a creditor (like Best Buy) to get a perfected security interest in the debtor's property (like a TV that Best Buy sells on credit to the customer or "debtor), generally, the debtor must sign three documents: (1) a security agreement that describes the collateral, (2) a promissory note where the debtor promises to pay the creditor the amount of the debt, and (3) a power of attorney where the debtor gives the creditor control over all of the debtor's property in the event the debtor does not pay-back the debt.
False
For the materials on Business Organizations and Sustainability, professor Sanford assigned two articles on West Michigan businesses: Brewery Vivant and Herman Miller (now MillerKnoll). Both of these businesses are good examples of business organizations that follow Milton Friedman's philosophy of maximizing profits for only shareholders and not engaging in any other social or environmental activity (Both organizations practice "stockholder capitalism").
False
Forcing someone to enter into a contract through the use of fear created by threats constitutes undue influence.
False
If a person enters into a contract with an unlicensed brain surgeon that contract will most likely be enforceable.
False
If you are an "employee-at-will" you can never sue your employer for wrongful discharge if your employment is terminated.
False
Loud sounds in the early morning coming from a neighbor's property are more likely to be classified as a trespass than a nuisance .
False
Making a statement when you are certain of its untruth is innocent (also known as negligent) misrepresentation.
False
Nondisclosure involves the active hiding of the truth about a material fact pertaining to a contract.
False
Professor Sanford believes it is important for parents to model good ethical behavior so their children learn the importance of good character. Children will learn not from what parents say but what parents do. For example, we discussed how Lori Loughlin helped her daughter get into college. Sanford thought Lori Loughlin modeled good, ethical behavior in helping her daughter.
False
Proximate cause does not involve the reasonable foreseeability of an injury or harm.
False
Sandra is an adult who has a legal guardian named Ted, this means that Sandra can freely enter into binding contracts without involvement by Ted.
False
The First Amendment protects commercial speech more extensively than it does noncommercial speech.
False
The Sarbanes-Oxley Act of 2002 (called "socks") applies to all corporations (both publicly traded and private companies). There are civil and criminal penalties for a violation of this law.
False
The burden of proof in a negligence case is the "beyond a reasonable doubt" standard.
False
The doctrine of implied contract applies only if there is an actual contract that covers the area in controversy between the parties.
False
The doctrine of res ipsa says that courts should generally follow the holdings in previous similar cases.
False
Under the Statute of Frauds, every contract promising to pay someone else's debt must be in writing.
False
Under the doctrine of assumption of the risk, the defendant must show that the plaintiff knew, understood and failed to appreciate the risk.
False
Under the law governing common law contracts, consideration must always include a promise of something with monetary value.
False
An NFL football player "crashed" a party where the home-owner asked football player to leave. Football player beat-up and kicked home-owner, before football player left the party. The home-owner called the police and went to the hospital (home-owner had $100,000 in medical bills related to the injury). The police arrested football player and charged him with felony battery. Football player pled guilty to misdemeanor battery. Football player loses his job playing football and now has $500,000 in debt (credits cards and other unsecured debt) and, in addition, football player is being sued by home-owner for $600,000 ($100,000 in medical bills and $500,000 in pain and suffering from the battery by football player). Football player, who only has assets of $20,000 and now works at Wendy's making $18,000 per year, files a petition in Chapter 7 bankruptcy. Is filing Chapter 7 bankruptcy the right strategy?
Football player should file Chapter 11 bankruptcy since football player does not qualify for Chapter 13. The home-owner lawsuit is a non-dischargeable debt under Chapter 7 but may be paid-off under a Chapter 11 petition.
What doctrine arose from cases in England in which parties, who had contracted for rooms along a parade route for the king's coronation, received their money back when the coronation was canceled because the king became ill?
Frustration of purpose
Why does GVSU have or use to have "meatless Mondays?"
GVSU, as a sustainability leader, wants to help GVSU and students reduce their "carbon footprint." Eating less meat helps reduce the production of greenhouse gases, a by-product of raising animals for meat.
In a limited partnership (keeping in mind our discussion of the Grand Rapids B.O.B.), who assumes unlimited personal liability for the debts of the limited partnership?
General partners
Jane has $300,000 in general unsecured debts and she loses her job. Jane files for Chapter 7 bankruptcy. Within 30 days, American Express (Jane's credit card) sues Jane for the $10,000 of debt that Jane owes American Express. What will happen with this lawsuit?
Jane simply notifies American Express she has filed a petition in bankruptcy and there is an automatic stay of this type of legal action against Jane (the lawsuit becomes part of Jane's Chapter 7 bankruptcy).
Smith, an employee of Sand Corp., was involved in an accident with Jones, an independent contractor. Jones was making a delivery for Byrd Corp. when Smith negligently passed through a red light resulting in the accident and injuries to Jones and Smith. The accident occurred during Smith's regular working hours and in the course of Smith's employment. If Sand and Byrd have complied with the state's workers' compensation laws, which of the following is correct?
Jones will be denied workers' compensation benefits under Sand's or Byrd's workers' compensation policy
James dies intestate and his survivors include his spouse, Lauren, his adopted child with Lauren, Helen, and his two children, from a previous marriage, Aaron and Carl. According to our class video discussion / outline material on the laws of intestate succession, under intestacy laws, Lauren, James's spouse when he died, will receive how much of James's estate that goes through probate?
Lauren will receive $150,000 plus 1/2 of the intestate (probate) estate, and the children will receive the other 1/2.
A state statute enacted in 1776 provides that "any person who wears, on a public street clothing that allows the wearer's ankles to be exposed to public view shall be guilty of a felony and shall be jailed for not less than 6 years." Although the statute has never been repealed by the state legislature, the statute has not been enforced in years. Adherents to which of the following schools of jurisprudence would probably be the most likely to say that the statute is the law and it must be followed no matter what?
Legal positivism
Anker wishes to give Mix a power of attorney. In general, the power of attorney
May limited Mix's authority to specific transactions
John and Katie contract for the sale of John's AKC registered Golden Retriever for $400 (a low price for an AKC registered dog). Both parties reasonably believed that the Golden Retriever was unable to produce offspring. Before the contract is executed it is discovered that the dog is pregnant. This is most likely an example of:
Mutual mistake
Kay has 2 children, Larry (the eldest) and Mona, both of whom predecease Kay. Larry is survived by a son, Nick, and Mona by two daughters, Opal and Pearl. On Kay's death, if the estate is distributed to Kay's heirs per stirpes (and not per capita)
Nick will receive one-half of the estate, and Opal and Pearl will receive one-fourth each
Dirk Debtor had over $100,000 in credit card debt and could not pay his bills. Dirk files for Chapter 7 bankruptcy. One hundred days after filing the petition, and before the bankruptcy court has approved the bankruptcy, Dirk wins $2 million in the Michigan lottery. Dirk's creditors demand to be paid from the lottery winnings. Must Dirk give this lottery money to the bankruptcy trustee for payment of Dirk's creditors?
No, since Dirk won the lottery money after filing he bankruptcy petition.
According to Professor Jones-Rikkers, what are the elements of a binding contract?
Offer, acceptance, and consideration
Jim has a $100,000 life insurance policy that names his wife, Lori, as the beneficiary. Jim has a house worth $300,000 that is in joint name with his wife, Lori. Jim has $200,000 in his savings account (Jim's name only), and Lori has $400,000 in her savings account (Lori's name only). Jim dies and his will leaves everything he owns to his wife, Lori. Which of the above items must go through "probate" before distribution to Jim's heirs?
Only Jim's savings account of $200,000
Lucy and Zack are joking around while entering into a contract for the sale of some land. Can allegations of joking regarding the sale of land prevent the formation of a contract?
Only based on the objective manifestations related to the joking.
David, a citizen files a $10,000 lawsuit against Tim, another citizen. This is an example of a
Private civil case
Jessie, a citizen files a $10,000 lawsuit against Thomas, another citizen. This is an example of a
Private civil case
Professor Sanford has emphasized in the ethics material that good character matters. In re-enforcing this concept, Sanford discussed a mother's letter to her daughter where the mother told her daughter to never fall for a boy because he was good-looking. She wanted her daughter to look for integrity. She told her daughter that if her daughter settled for anything less than honorable character, it would lead to heartache and disappointment.
Professor Sanford believes this to be true.
The sustainability movement has caused businesses to manage using the triple-bottom-line (3BL) philosophy. This concept states that business management should consider what three factors in making business decisions?
Profits, people, and the planet
When the Board of Directors has a meeting, what is the term used to define the minimum number of directors necessary to have a valid meeting?
Quorum
Ellie sent Stu a letter offering to sell Stu her I-pad. Stu left the letter on his desk where his roommate Ralph saw it. After reading the letter, Ralph wrote to Ellie and stated that he (Ralph) wanted to accept Ellie's offer. Which of the following is most correct?
Ralph may be held to have made an offer to purchase Ellie's I-pad, based on the terms of Ellie's letter to Stu.
Ray and Vivian get married. It is their second marriage each. Ray, a widower, has four children from his previous marriage, and Vivian has four children from her previous marriage. Once married neither Ray or Vivian adopt the other children. Ray and Vivian put all assets in joint name. Vivian dies. Ray dies without a will and neither of Ray's or Vivian's parents are alive, who gets what?
Ray's children share equally the entire estate, and Vivian's children get zero
A mother lives in Indian River and has a farm with 400 acres valued at $400,000. The farm is in the mother's name only (her husband had previously died). When she dies, she wants to give her estate to her three children equally and avoid probate. Based on our discussion, how could the mother do this?
Re-title mom's property so the three children and the mom are joint tenants or put all property in a trust, during mom's life-time, naming the children as beneficiaries of the trust, are both good answers.
Based on our video class discussion and outline material, why was Rosa Parks arrested on a bus in Montgomery, Alabama, on December 1, 1955?
Rosa refused to give-up her seat to a white person when ordered to do so by the bus driver (a violation of Alabama law).
Which of the following was passed largely in response to business scandals of the 2000's such as Enron.
Sarbanes-Oxley Act
When a debtor files a petition in Chapter 7 bankruptcy, which of the creditors listed below has the highest priority for payment when the bankruptcy trustee distributes the debtor's assets?
Secured creditors to extend the secured creditor has security or collateral
The Fourth Amendment to the U.S. Constitution:
Seeks to protect citizens' legitimate expectations of privacy
Stieg Larsson, author of the Millennium Trilogy (The Girl with the Dragon Tattoo, etc.), lived with a woman, Gabrielsson, for 30 years and he considered her his wife / life partner but they were never legally married. In 2004, when Stieg died unexpectedly of a heart attack, Stieg was worth over $10 million. Based on our video class discussion and outline material, how much did Gabrielsson receive from the Stieg Larsson estate?
Since Stieg died without a will, she received nothing, and Stieg's father got ½ of the estate and Stieg's brother received the other half.
Which of the following involves overly harsh or one-sided language in an agreement?
Substantive unconscionability
Professor Sanford believes it is important for GVSU students to be "ethical" and do the "right thing" as students, as future business / community leaders, and as future parents (role models for children). In getting students to think about "ethics" professor Sanford has suggested there are three approaches to discussing this important topic. One, read, study, and discuss a chapter on ethics in a textbook. Two, talk about how students developed their own ethical compass by considering everything the student has learned in life from his or her parents, church, school, coaches, etc. Three, the "Sanford Approach" of practicing daily doing the "right thing" so as to develop a pattern of good choices that over time, leads to good character, good ethics, and good business leadership. Professor Sanford believes all three approaches have merit and recommends the approach the student thinks is best given the student's beliefs, values, and the situation. The key concept is professor Sanford wants students to be "ethical" throughout life. In the video lecture and related outline material, professor Sanford emphasized which approach in discussing ethics?
The Sanford Approach.
Big Boom Blasters, Inc. uses explosive toxic chemicals to prepare land for highway projects. Strict liability is imposed on this activity because:
The activity is of an abnormally dangerous nature
Stankiewaste Haulers, Inc. moves toxic waste from manufacturing facilities to landfills. Strict liability is probably imposed on this activity because:
The activity is of an abnormally dangerous nature
Coco, a resident of Texas, wants to file a lawsuit against Dan, a resident of Kansas, over Dan's failure to pay Coco for work on his cottage. The amount in dispute is $15,000. Under diversity of citizenship requirements, a federal court cannot exercise jurisdiction in this case because:
The amount in controversy is less than $75,000
Based on video / outline discussion, what is corporate social responsibility (CSR)?
The deliberate inclusion of public interest into corporate decision-making & the 3BL.
Based on our video and outline discussion, if a man is married, has no children, has one living parent, and dies "intestate," the surviving wife will generally receive how much of the property that must go through "probate?"
The first $150,000 plus 3/4 of the intestate (probate) estate, and the parent receives the remaining 1/4.
An East Grand Rapids policeman negligently shot himself when he pulled his gun out of his hoster when confronting a "bad guy" while the policeman was "on the job" (the policeman claimed that the gun had a very sensitive trigger action). Who is the policeman allowed to sue for his injuries?
The manufacture of the handgun.
Ernie buys a new textbook for $100, and also buys a shipment of goods for $5000 and signs a mortgage for a house to be paid off in 15 years with payments of $1,000 per month. The Statute of Frauds covers:
The mortgage and the goods but not the textbook
Ron offers to sell Paula a stone that Ron found in his flower pot. He and Paula look at the stone and decide that they are not sure exactly what it is, probably just a shiny normal stone. Paula pays Ron $10 for the stone. The stone turns out to be a "raw" diamond worth much more than $10. Ron wants the stone back, and Paula refuses. If Ron files a lawsuit what is the most likely result?
The stone will remain with Paula because the parties contracted on the assumption that they did not know the value of the stone.
A teacher (in this question, the creditor) loans $8,000 to a friend (in this question, the debtor), and there is no security for the debt. Later the friend does not pay-back the teacher. If the teacher wishes to get her money back, what must teacher do? Also, note that the teacher and friend are no longer friends (in general, this is one of the reasons you do not loan money to friends and relatives--remember professor Sanford telling you in the video lecture).
The teacher can sue debtor (her X-friend) for non-payment of the debt. If teacher gets a legal judgement against the debtor, teacher has two options: garnish the wages of the friend and / or attempt to attach the debtor's property for non-payment of the debt..
A trust has three parties involved. Name the three parties:
The trustee, the grantor, and the beneficiary
Barb sent Sally a letter offering to sell Sally her bike for $50. Sally left the letter on her nightstand where her roommate April saw it. After reading the letter, April wrote to Barb and stated that she (April) wanted to accept Barb's offer. Which of the following is most correct?
There is no contract between Barb and April because Barb communicated her offer to Sally not April.
Business law professor Jimmy needed some yard work done. He told his class that he would give $50 to the first person who mowed his yard. Mindy went to mow Jimmy's yard. Unfortunately, just as she finished mowing, a neighborhood dog bit her and she had to go to the emergency room for a couple of stitches. Jimmy has refused to pay Mindy on the basis that the agreement was not in writing and that Mindy ended up being "...more trouble than she was worth". Which of the following is an appropriate characterization of the agreement between Jimmy and Mindy?
They had a unilateral contract.
A director, who cannot attend a board meeting due to a good reason, is allowed to vote by proxy.
This statement is incorrect.
The enlightened business leader will manage considering the 3BL (triple bottom line). Profits, the planet, and the people of the community / the world are all important elements when making business decisions. This change in business thinking started within two years after the Earth Summit in 1992. The primary purpose of the Earth Summit was?
To limit the growth of global warming and address issues of climate change.
When Tom dies, rather than leaving everything outright to his wife Becky, Tom's will leaves everything he owns in trust for Becky for her life (and Becky has the right to all income from the trust during her life-time), however, on Becky's death, everything in the trust goes to Tom and Becky's only son, Riley. Why might Tom do this? Why would he leave Becky only a life estate in his property when he dies rather than leaving her all the property outright?
Tom insures that Riley or Riley's heirs eventually inherits his property
Mr. Smith died on October 1, 2020. His will left his entire estate to his blood heirs who survived him to be divided per capita and not per stirpes. Mr. Smith was survived by the following: Tom (his son), Beck (his daughter), and Harry, Larry, and Jerry (his grandchildren from his pre-deceased son, Bill). Who will get what when Mr. Smith's estate is distributed?
Tom, Becky, Harry, Larry, and Jerry all share equally (and each gets 1/5 of the estate).
A valid offer to enter into a contract requires that the offer be communicated to the offeree.
True
An agent's implied authority is derived from an agent's express authority and consists of what is reasonably necessary for carrying out the agent's grant of express authority.
True
An arbitrator can render a legally binding decision.
True
An executed contract is one that has been fully performed by the parties.
True
Contract law requires that the contracting parties each give something of legal value.
True
Freddy is Ellen's real estate agent. Ellen offers to purchase Tanya's house for $250,000. Freddy presents Ellen's offer to Tanya and Tanya tells Freddy, "I'll sell it to Ellen for $260,000." Freddy informs Ellen of Tanya's statement. Tanya's statement to Freddy that she will sell the house to Ellen for $260,000 terminates Ellen's offer through the use of an implied rejection.
True
If an adult has a court appointed guardian, all contracts made with the adult who has a guardian after the order of guardianship are void.
True
If damages result from a negligent act, there is liability.
True
If no damages result from an allegedly negligent act, there is not liability.
True
If the employer has substantial control over the day-to-day operations of the worker, the worker is generally considered an employee and not an independent contractor.
True
In August of 2019, the Business Roundtable, a group of leading business executives, offered a new definition of the purpose of the corporation. Business as usual was no longer acceptable. Business managers should not only manage to make a profit but should manage to help make the world better by addressing various social issues. These issues include improving the environment, doing more the employees and the people of the world, and even addressing the issues of diversity in the workplace. Overall, this statement is
True
In the video lecture / related course outline, professor Sanford stressed that you should never loan money or extend credit to anyone without some form of "security" (some type of property that the creditor can use to pay toward the debt in the event of non-payment of the debt by the debtor). Overall, this statement is
True
Infancy and Intoxication constitute defenses to the bad intent element of criminal conduct
True
Mistakes in contract law do not result from untrue statements made by one party to the contract.
True
One type of punishment in a criminal case is that the defendant who is held liable must pay a fine to the government.
True
Professor Sanford believes that the timeless values on honesty, kindness, courage, and fidelity matter. Professor Sanford believes that being ethical and having good character in business and in life is very important. Further professor Sanford believes that honest, ethical business people have opportunities to make the world a better place since maximizing profits should not be the sole reason for operating a business. Overall this statement is
True
Sherri assaults and batters Bill. BIll successfully sues Sherri for the damages caused by the torts. Sherri can also be criminally prosecuted for her wrongful behavior.
True
The burden of proof in a breach of common law contracts case is the "preponderance of the evidence" standard.
True
The primary purpose of civil law is to compensate victims.
True
Trisha assaults and batters James. James successfully sues Trisha for the damages caused by the torts. Trisha can also be criminally prosecuted for her wrongful behavior.
True
When it comes to sustainability, professor Sanford discussed that each of us can do little things that can have impact on improving the environment. Leaving the planet better than we found it is a good thing to do.
True
In Business 201 there are ______ opportunities for extra credit points
Two
James, an individual, filed a voluntary petition in bankruptcy under Chapter 7. James will not be allowed to go bankrupt if James . . .
Unjustifiably failed to preserve books and records.
In the video and outline material on ethics, professor Sanford has suggested that someday, someone will ask you to do something that you know or feel is wrong. What did professor Sanford suggest that you should do when this happens?
View this as an opportunity to let others know who you really are and tell them that you do not engage in activity that you feel or know is wrong.
Aunt Mary dies and she has no relatives (blood heirs). She leaves everything she owns to Vivian (a total of $60,000 after all administrative expenses). Based on our video class discussion and related outline material, and assuming Vivian was just a friend of Aunt Mary, what is the best answer?
Vivian can reject this inheritance and elect to receive nothing.
When a company has an annual meeting and all shareholders are invited, normally what do the shareholders do at the annual shareholder meeting?
Vote for directors and vote on any major corporate structural changes
VIP pets, Inc. hired Aaron to be the manager of one of its stores. VIP Pets sells a wide variety of animals. Aaron was given considerable authority by VIP Pets to operate the store, including the right to buy inventory. Aaron was told that any inventory purchase exceeding $2,000 required the approval of VIP Pet's general manager. Aaron occasionally would buy, for VIP Pets, a certain breed of dogs from Premier Breeders Inc. Premier paid Aaron 5% of the purchase price as an incentive to do more business with Premier. These "incentive" payments were paid in cash directly to Aaron. VIP Pets management was unaware of these payments to Aaron. Given these facts, what is the best answer?
What Aaron is doing is wrong and he has a duty to give the incentive payments to his employer (Aaron has a duty to account
In the video lecture and related outline, professor Sanford said he liked a sole proprietorship as a form of doing business when one first starts a business. Why does Sanford like the sole proprietorship?
While the owner of the sole proprietorship will have unlimited liability for the business debts, the business is inexpensive and easy to form. If personal liability is an issue, buying business liability insurance might be an option to solve the liability problem and might be cheaper than forming a corporation.
If Bosh and Kent owned a warehouse at all times as tenants-in-common, upon Bosch's death his interest in the warehouse:
Will pass to his wife after the will is probated, assuming Bosch's will names his wife as the sole beneficiary of Bosch's estate
Mindy is a 60-year-old woman who lives by herself, works at McDonald's making $20,000 a year, and Mindy's only asset is her $100,000 house. Mindy gets sick, goes into the hospital for two-weeks (Mindy has no health care insurance), and when Mindy is released she owes the hospital $150,000 in medical bills. Mindy has no money to pay the hospital since Mindy lives paycheck-to-paycheck. Mindy is worried that the hospital will sue her for the $150,000 in medical bills and Mindy will lose her house. Is there a way Mindy can get rid of her debt and keep her house by filing a petition in bankruptcy?
Yes, Mindy can file for Chapter 13 bankruptcy, keep her house, and pay-off her medical bills, based on what she can afford to pay, over a 3-5 year period under Chapter 13 bankruptcy.
Dan Debtor owes John's Hardware $10,000 for purchases Dan has made on credit (assume this debt is not secured). John and Dan are good friends. Dan Files for Chapter 7 bankruptcy but 60 days before filing the bankruptcy petition, Dan pays John's Hardware $10,000 so the debt is paid in full. After the Chapter 7 bankruptcy filing, a bankruptcy trustee is appointed. The trustee demands that John's Hardware give back the $10,000 to the trustee. Must John's Hardware give back the $10,000?
Yes, because the $10,000 payment was a preferential payment.
XYZ Corporation has an extensive anti-sexual harassment policy, which also outlines a reporting procedure if a company employee is the victim of sexual harassment. In spite of the policy, Harry ignores the policy. Harry Lunchmeat, a middle-level manager for the XYZ Corporation (and, what professor Sanford calls, a Dinosaur), is hot for one of his subordinates, Suzy Straight. Harry propositions Suzy about three times a day. In addition, he frequently sends her pornographic literature in the inter-office mail, exposes himself to her, and tells her about his wife's sexual inadequacies. Even though Suzy refuses to sleep with Harry and tries to ignore his behavior as best she can, Harry gives her two promotions and several raises. Finally, Suzy is unable to perform her job because Harry's attentions are making the job unbearable. As a result of her boss's behavior, Suzy sues her boss and XYZ (her employer) for sexual harassment under Title VII. What is Suzy's best theory for recovery? Will Suzy have a quid pro quo claim? A work (hostile) environment claim? Suzy's best claim is for:
a (hostile) work environment claim.
Bette is Jack's accountant, Bette fails to properly complete financial documents for Jack's business thereby causing Jack to loose $7,500. Jack may recover $7,500 to cover his losses if Bette failed to act as:
a person in a special relationship.
In a bilateral contract, the consideration for each promise is ______.
a return promise
Filly tells Thom that she will buy his business law textbook from last semester for $65. Thom agrees. Filly gives Thom the$65 but Thom has yet to give Filly the book. Filly and Thom have
an express, executory contract
Bebe backs out of City Parking Lot, colliding with Jill's car. Jill may recover $7,500 to cover the cost of the repairs if Bebe failed to act as:
an ordinary reasonable person
Joe promises to cater Jeremy's party for the big game and Jeremy promises to pay Joe $500 for the work he will perform. A week before the game, Joe tell Jeremy that he has found another better paying job, and can no longer cater for Jeremy. Because Joe refuses to complete the contract before the actual time of performance, he has committed a(n) _____.
anticipatory repudiation (aka anticipatory breach)
Barb is hired to do cell phone sales for a big box store. She agrees that if she leaves her employment, she will not work for another big box store within twenty-five miles for a period of two years. This type of agreement is called a(n):
covenant not to compete
As a judge Peter applies common law rules. These rules develop from:
decisions of the courts in previous legal disputes.
Erica advertises a reward for the return of her lost cat. Floyd, reads the advertisment and knows of the reward, he then finds and returns the cat. Floyd can recover the reward because he:
did know of the reward when he found and returned the cat, and thereby created a valid unilateral contract.
Reese advertises a reward for the return of her lost ring. Fred, who does not know of the reward, finds and returns the ring. Fred cannot recover the reward because he:
did not know of the reward when he found and returned the ring
Drunk, but fully aware of his actions and their consequences, Joe agrees to a two year cell phone service contract with Big Bucks Talk-Talk, Inc., at more than the average market price. This contract is:
enforceable
Barb, a jogger is running on the wrong side of the street. Curt is driving his car and hits Barb, causing her serious injuries. Curt claims that Barb was more careless than he was because she was jogging on the improper side of the roadway. The accident happened in Holland, Michigan. Under the applicable defense to negligence Barb's recovery may be reduced:
even if Barb was only slightly at fault
A statement releasing one of the parties to an agreement from all liability, regardless of who is at fault or what the injury suffered is, would be referred to as a(n):
exculpatory clause
Sal mails an offer to sell Kev his dog for $50. Sal's offer states, "you must respond by mail if you wish to accept." Kev mails his acceptance the next day. Kev's acceptance became effective when:
he put it in the mailbox.
A civil infraction is a crime punishable by incarceration (going to jail) for up to:
is not usually punished by incarceration but rather only by fines
Mary promises to pay her assistant Ned $10,000 a month for the next 10 months in consideration for the services he is to provide during that time period. If Ned provides the services and Mary never pays Ned. Mary is:
laible for payment of the $10,000 per month
The _____ doctrine allows the plaintiff to recover damages despite proof of contributory negligence as long as the defendant had a final clear opportunity to avoid the action that injured the plaintiff.
last clear chance doctrine
Money damages are also known as:
legal damages
Which school of jurisprudence is characterized by the following statement: "I obey the law no matter what, I do not question the law"
legal positivism
Sam mails an offer to sell Keith his shed for $500. Sam's offer states, "you must respond by mail if you wish to accept, your acceptance must be received by October 20th." Keith sends his acceptance by mail on October 15th. Through no fault on Keith or Sam's part the acceptance letter from Keith is not delivered to Sam until October 25th. Sam now refuses to sell the shed to Keith, and Keith has sued Sam for breach of contract. Under these facts, Keith should:
lose the suit despite the use of the authorized means for communicating his acceptance.
The legal definition of "intent" is,
meaning for an outcome to occur and / or disregarding the potential that the outcome could occur. meaning for an outcome to occur only
The obligation to use reasonable efforts to minimize damage resulting from a breach is referred as the duty to ______ one's damages.
mitigate
Which of the following is recognized by a court to prevent one party from being unjustly enriched at the expense of another party when there is not actual contract?
none of these
Catin sends an offer to Bob to cut down and remove a tree for $400. Catin says, "If you say nothing, I will consider you to have accepted my offer." If Bob does not respond, he will be deemed to:
none of these choices are correct
Drunk, and completely unable to understand and act reasonably regarding his actions and their consequences, Joe agrees to a two year cell phone service contract with Whiz-Bang Talk, Inc., at far more than the average market price. The Whiz-Bang representative knew of Joe's level of drunkeness. This contract is:
not enforceable because Joe was intoxicated to the extent where he was unable to understand and act reasonably and Whiz-Bang knew of the extent of the intoxication.
Edna and Pippy enter into a unilateral contract, which is created when Edna gives a promise in exchange for Pippy's____
performance of a particular act only
Freida and Gail enter into a unilateral contract, which is created when Freida gives a promise in exchange for Gail's
performance of a particular act only
The Securities Exchange Commission is an administrative agency. The chief purpose os such agencies is to:
prepare regulations related to its specific mandate as directed by the legislature.
In the class materials there was a paper that discussed the criticism of "stockholder capitalism" v "stakeholder capitalism." Which capitalism was called by some "woke capitalism?"
stakeholder capitalism
On Mitch's 18th birthday, he decides that he no longer wants to keep a car he bought from Paulie's Autos, when he was 17 years old. Mitch's right to disaffirm the deal will depend on:
whether he acts within a reasonable amount of time after turning 18.