legal environment of business test 2

Which source of law governs this contract? The sale of several completed sculptures from an artist to a retail art dealer for a total of $10,000.

A bankruptcy issue governed by statutory and administrative law at the federal level

Which source of law governs this contract? A contract for the sale of an office building from Abel to NewCo

A contract issue governed by the statutory (UCC) law at the state level

Which source of law governs this contract? A contract providing for installation of networking cable in an office facility where the materials are $5000 and the labor is $20,000.

A patent issue governed by statutory law at the federal level

Which source of law governs this contract? A consulting contract between a management consulting firm and a software development company.

A securities issue, governed by statutory and administrative law at the federal and state levels

What source of law governs this contract? A contract between the owner of a building in a painting company to paint the buildings lobby over a holiday weekend for $5000. The owner agrees to supply all of the paint

A zoning issue, governed by statutory law at the local level

Andrew is going out of town until Sunday and tells Cardoza that if he mows her lawn she'll pay him $50. Cardoza agrees to cut the lawn before Sunday. Bilateral or unilateral contact?

Bilateral

Webster calls Daniels catering and orders 100 deviled eggs to be delivered for an office party. Express, implied, or quasi?

Implied

Does this constitute substantial performance? Book publisher agrees to sell and deliver certain name textbooks to a college bookstore with delivery on July 1, eight weeks before classes are to begin. Delivery occurs on July 5.

Publisher has substantially performed because the delay likely causes no harm to the bookstore with so much time before classes begin

Paul bought a used car from John. John adds turnpike the odometer and changed public records to hide the fact that the car had been in three accidents. One year later Paul sold the car to George. George bought the car because it had low mileage and public records showed no accidents. Does either fraud or misrepresentation exist?

John has committed a fraud against Paul, by changing the mileage and accident records, two material facts in car negotiations

Does this constitute substantial performance? Widower contracts, with artist to paint a portrait of his late wife. The portrait is done on time and professionally, but the likeliness, well resembling her, does not look exactly like the woman.

Substantial performance, or perfect performance, depending on whether the portrait objectively meets the criteria for a professional painting of that type

Hawkins is interested in buying Jones home. He asked her if the roof leaks and she truthfully answers that she's lived in the home for 13 years and the roof has never leaked. Three days later it rains and the roof leaks. Hawkins returns a week later and Jones says nothing so Hawkins purchases the home. Does either fraud or misrepresentation exist?

This is fraud

Tony is selling his golf clubs. After Mel comes to look at them he agrees to buy them and leaves for the bank to get cash. When he returns, he pays Tony and puts the golf clubs in his car. Tony and Mel shake hands and Tony says "you got a real good deal, these clubs once belong to Tiger Woods". A week later Mel discovers that Tiger Woods never owned or use the clubs. Does either fraud or misrepresentation exist?

Tony statement came after the contract had been executed, so Mel did not rely on Tony's statement when making the deal

What tort fits this fact? Wayne gets into his car after work, but it won't start. He returns to his office and everyone has gone home. He takes the keys to a company vehicle and drives home, intending to drive it back to the office in the morning. That night a violent storm causes a tree branch to fall on the car causing extensive damage.

Trespass to chattel

Which of the following contracts must be in writing? a) Constantin sold an acre of land to jalen, the contract was a handshake deal where they agreed orally to transfer the land in consideration of $20,000 b) Monica agreed to do legal consulting work for Asher in consideration of $501 c) Carson agreed to work for Huge Corp as a senior manager in consideration of $40,000 a month, it was a 12 month contract d) all of the contracts must be in writing

a) Constantin sold an acre of land to jalen, the contract was a handshake deal where they agreed orally to transfer the land in consideration of $20,000

Mattie wanted to purchase a car for her daughter Emily's 16th birthday. She purchased the car at the dealer and ordered delivery on the day of Emily's birthday, when Mattie would be out of the country on a Himalayan expedition and unable to be reached by phone. What type of beneficiary is Emily and does she have rights to enforce the terms of the contract in Mattie's absence? a) Emily is an incidental beneficiary and she has the right to enforce the contract b) Emily is an intended beneficiary and she has the right to enforce a contract c) Emily is an incidental beneficiary and she does not have the right to enforce the contract d) Emily is an intended beneficiary and she does not have the right to enforce the contract

b) Emily is an intended beneficiary and she has the right to enforce a contract

Jeff purchased a new Corvette from Hypersports Automotive on a three-year lease. Two years in, he lost his job as marketing director and was unemployed. Jeff asked the leasing company if his friend Addie could substitute for him and take over the lease. If Hypersports allows Jeff out of the lease with no further obligations and Addie completely takes his place, what has occurred? a) an assignment b) a novation c) a delegation d) an accord and satisfaction

b) a novation

Scott, who is 15-years-old, purchased a laptop computer on a lease plan for $100 a month over 18 months from Laptops-R-Us. Under the law of contracts, this is a) a valid contract b) a voidable contract c) a void contract d) an unenforceable contract

b) a voidable contract

Which of the following does not fall within the statue of frauds? a) contract for a new car worth $25,000 b) agreement to provide office cleaning service for a period of six months c) cosigner, agreeing to guarantee a bank loan for his sister d) agreement to purchase a warehouse

b) agreement to provide office cleaning services for a period of six months

Raelynn saw Tawny choking in a restaurant. Raelynn jumped from her seat, beat Tawny on the back in her untrained attempt at Heimlich Maneuver, which she did not know how to perform, and gave Tawny serious back injuries. Raelynn will be liable to Tawny under which of the following doctrines? a) comparative negligence b) assumption of duty c) assumption of risk d) Raelynn will not be liable as there is no general duty to rescue

b) assumption of duty

A plaintiff who knows there is a substantial danger associated with certain conduct, and goes ahead with the dangerous activity anyway gives the tort feasor the defense of? a) superseding cause b) assumption of the risk c) strict liability d) Res ipsa loquitur

b) assumption of the risk

To be valid, an offer must be a) open, fair, and objective b) clear, serious, and communicated c) definite, unequivocal, and standard d) clear, negotiated, and manifested

b) clear, serious, and communicated

Lanza was just hired to work for a government defense contractor. A clause in the contract calls for Lanza to pass a background check before he can work in the job, as a security clearance is required for all employees. If he cannot pass the background check and get appropriate security clearance, he cannot have the job and the employment contract will be voided. This clause would be a a) condition precedent b) condition subsequent c) concurrent condition d) nothing of consequence since Lanza has already signed the contract, and the employer may not breach it

b) condition subsequent

Sharice was working on a scaffolding 20 feet above the ground when she carelessly tossed her power drill to a co-worker. It fell to the ground and landed on Gardner, a visitor to the construction site, injuring him. What category of tort is this? a) intentional tort b) negligence c) strict liability d) no tort because it was not intentional

b) negligence

A breach of contract that is not material, is known as a/an a) immaterial performance condition b) partial breach c) substitute performance d) discharge of performance

b) partial breach

The contract for the lease of a fleet of delivery trucks, which would be considered equipment, to FedEx by Ford motors would be governed by a) state common law b) the uniform commercial code c) federal regulations d) federal common law

b) the uniform commercial code

The key difference between misrepresentation and fraud is a) material fact b) guilty knowledge c) reliance d) puffing

b. Guilty knowledge

Which of the following does not result in the termination of an offer? a) revocation b) renunciation c) rejection d) death of the offeror

b. renunciation

Arnold offered to sell his zero turn lawnmower to Bambi in consideration of $2,500. Bambi thanked him for the offer, said nothing else, but immediately headed to her bank, withdrew $2,500, and headed to Arnold's house with the money. When she arrived, Arnold told her that he sold the mower 30 minutes after they spoke on the phone to someone else. Is Arnold in breach of contract? Why/why not? a) Arnold is in breach because this was an irrevocable offer b) Arnold is in breach because he had a duty to inform Bambi that he had sold the mower c) Arnold is not in breach because he revoked the offer by doing an action inconsistent with maintaining it d) Arnold is not in breach because an offeror has no duty to maintain an offer even after verbal acceptance unless delivery has been made

c) Arnold is not in breach because he revoked the offer by doing an action inconsistent with maintaining it

Theo wanted to buy a piece of property to build a painting supply factory. He asked Vincent, the owner of the property, if it was zoned for such manufacturing. Vincent told him yes, absolutely. This was a lie, it was only zoned for residential use. Theo bought the land at a premium price of $20,000 an acre in reasonable reliant upon Vincents promise and then was shocked when he was told by the zoning board that he could not build his factory. Because of this, the land is worth a fraction of what Theo paid. Under which of the following theories should Theo sue Vincent a) Trade libel b) Negligence c) Fraudulent misrepresentation d) Res ipsa loquitur

c) Fraudulent misrepresentation

Demetrius offers to sell his car to Ivana for $20,000. Ivana tells him she will pay him $15,000. Ivana's response is. a) an acceptance b) a rejection c) a counter offer d) a mirror image offer

c) a counter offer

Strict liability applies to a) all negligence torts b) all intentional torts c) abnormally dangerous torts d) claims based on defamation

c) abnormally dangerous activities

Stuart attends a baseball game and on his way to his seat he is struck by a foul ball. He sues the stadium owner for negligence. What will be the owners best defense a) contributory negligence b) comparative negligence c) assumption of the risk d) product's liability

c) assumption of the risk

The common law of torts is primarily intended to a) punish and deter wrongdoers b) define breaches of contract c) compensate victims d) compensate tortfeasors

c) compensate victims

The night before his commencement ceremony, Leland's uncle promises to buy him a new car after he actually sees Leland receive his diploma. Leland gladly accepts. After the ceremony, Lelands uncle says just kidding, no car! Leland cannot prevail in a breach of contract claim because the agreement lacks _______? a) offer b) acceptance c) consideration d) legality

c) consideration

Which of the following stands for the proposition that a contract must involve both sides, receiving and giving up some thing of legal value a) capacity b) legality c) consideration d) offer and acceptance

c) consideration

A product may be unreasonably dangerous due to a _____ or _____ defect a) risk, reward b) risk, design c) design, manufacturing d) manufacture, assumption

c) design, manufacturing

Stokes signed a contract to purchase from a car dealer, Othick, for $15,000. However, when the contract was examined closely, a decimal point was inadvertently put in and the contract calling for Stokes to get the car for $150. Stokes is attempting to enforce the contract against Othick for $150. Othick wants the court to change the contract for $15,000 which he claims is the true intent of the parties. What remedy should Othick pursue with the court? a) mitigation b) specific performance c) reformation d) tender of the performance

c) reformation

Big Insurance Corporation had a provision in their insurance contract with Gerald that said the following: "No lawsuit to recover under this contract shall be valid unless the suit is filed within 18 months of the time of the insured's loss." Which of the following types of conditions is this? a) antecedent b) precedent c) subsequent d) concurrent

c) subsequent

Elton has contracted with Bennie to purchase his manufacturing business for $10 million. Bennie represented to Elton that he had the "best manufacturing company in North America." After Elton purchased the business, he lost money on it and realized it was definitely not the best company. He sued to avoid the contract based upon misrepresentation. The expert witnesses at trial agree that Bennie's business was not the best in North America. Assuming Bennie's representations above are the ones at issue in the lawsuit, and that Elton reasonably relied on them, what result? a) Elton wins because Bennie's statement was fraudulent misrepresentation b) Elton wins because Beenie's statement was negligent misrepresentation c) Elton loses because the buyer has an absolute duty to make a through inspection and analysis or they have no breach of contract claim d) Elton loses because Bennie's statement was puffery

d) Elton loses because Beenie's statement was puffery

Gates purchases a laptop computer from a local office supply store. Express, implies or quasi?

express

In his neighborhood, Brown distributes flyers that read: "reward, lost beagle. If found return to me for $500 reward." Bilateral or unilateral contract?

offer of a unileral contract

Junior is 17 years old and has entered into an agreement to purchase a vintage Ford mustang from his neighbor. Which of the following is true about the transaction? a) the contract is automatically void b) Junior has the right to void the contract until he turns 18 c) the contract lacks consideration d) no contract exists, because there was no mutual assent

B. Junior has the right to void the contract until he turns 18

What tort fits this fact? Nancy has triplets attending eighth grade. Every once in a while, she takes small quantities of paper, pens, paper, clips, and other stationary supplies home from work and gives them to her kids for school use.

Conversion

Which of the following is not an element of defamation? a) specificity b) damages c) dissemination to a third party d) malice

D. Malice

What tort fits this fact? Jason and Elaine are both being considered for a promotion to VP of sales. Jason starts a false rumor that Elaine doctored the books to make her accounts look better than they actually are. Because of the investigation and the need to fill the position, Elena is dropped from consideration, and Jason gets the promotion.

Defamation

Flo is selling her car. The car has an oil leak so there's oil evident to anyone who looks at the engine. Just before Tom comes over to look at the car Flo has the engine steam cleaned. When Tom looks at the engine, it is spotless and he does not ask if it leaks oil. Does either fraud or misrepresentation exist?

Flo is guilty of fraud, because she has concealed and material fact, the fact that the engine leaks oil

Is proximate cause met in this situation? A tenant hurts herself falling down defective steps. The tenant sues the landlord's insurance company alleging that it knew the steps were defective, but insured him anyway, thus discouraging him from fixing them.

No

Britney buys a horse from Tex. She buys the horse because Tex tells her that the horse "runs like the wind". In fact, the horse can't run more than 50 yards without stopping to rest. Does either fraud or misrepresentation exist?

No fraud or misrepresentation exist

Lisa needs a new battery for her car. The sales person tells her that the try hard battery is the best battery that money can buy. She always likes things that are the best so she buys the battery. A week later she discovers that the try hard battery is inferior and is not very well regraded by those who know the batteries. Does either fraud or misrepresentation exist?

No fraud or misrepresentation exist

Does this constitute substantial performance? A vegetable cannery contracts with farmers to buy 54 units of fancy grade, spinach, defined as dark green in color, firm in texture, and with a leaf/ stem ratio of less than 15% stem. Farmer delivers spinach with a leaf/ stem ratio of 25% stem.

No substantial performance

Does this constitute substantial performance? The yellow page advertisement agrees to publish a half page advertisement for a local dry cleaner in exchange for $2000. The advertisement is published, but one digit in the telephone number is incorrect.

No substantial performance

What tort fits this fact? Frank is a used car salesman. He is working with a customer who decides to buy a car. The price is agreed to, and the customer tells Frank that he will go to the bank to get a certified check. They shake hands. Frank then says "you should know that this car used to be owned by Bill Gates"! The customer returns with a certified check, all paperwork is signed, and the customer drives that car home. The next day the customer discovers that Bill Gates never owned the car.

No tort has been committed

What tort fits this fact? MOT corporation does all of its banking with second national bank. MOT receives a 1% interest rate on it savings account and pays a fee of $.02 per check written. A representative of third national bank visits MOT's offices and tells the company that third national pays 1.25% interest and has free corporate checking. MOT closes the accounts with second national and moves all its banking business to third national.

No tort has been committed

Does this contract need to be in writing to be enforceable? A contract for consulting services for $10,000 over the next 90 days.

No writing required

Does this constitute substantial performance? Wholesale contracts with Delicatessen to deliver 50 cases of bottled beverages each week in exchange for a $3000 monthly payment. Due to heavy holiday volume the December shipment contains only 45 cases.

Wholesaler has substantially performed, but Delicateseen is entitled to a reduction in price

Does this contract need to be in writing to be enforceable? A contract whereby the president of Newco gives a personal guarantee for $150,000 revolving line of credit loan to NewCo from first national bank.

Writing required

Does this contract need to be in writing to be enforceable? A two year advertising contract between a retail store and a local newspaper.

Writing required

Does this contract need to be in writing to be enforceable? An agreement of sale for a piece of real estate for a corporation to build a new warehouse for $500,000

Writing required

Does this contract need to be in writing to be enforceable? Philip purchases a small piece of land for $499.

Writing required

Is proximate cause met in this situation? A passenger is injured in an automobile accident. The passenger sues the liquor store that sold alcohol to the driver of the car, who was already visibly intoxicated.

Yes

Is proximate cause met in this situation? A truck driver crashes into a guardrail. During the accident, a defective, steering wheel rapidly spins around breaking the drivers arm. The driver sues the maker of the steering mechanism.

Yes

Is proximate cause met in this situation? An employee burns down his warehouse for the insurance money. An employee is arrested and falsely imprisoned by the police for the crime. The employees sues the employer for negligence.

Yes

Darnell, a professor entered into a contract with Felicity, a 22-year-old graduate student, for Felicity to proofread and correct the grammar in his new textbook. Felicity dropped off a contract at Darnell's office, but she made a mistake, and accidentally wrote $.15 an hour rather than $15 an hour for her services, then signed the contract. Darnell noticed the error, signed the contract also, and now is trying to hold Felicity to the $.15 amount. What would be the likely result and why if Felicity goes to the court to get out of the agreement? a) The court will allow her to cancel the agreement on grounds of unilateral mistake b) The court will allow her to cancel the agreement on grounds of bilateral mistake c) The court will not allow her to cancel the contract because nominal consideration is valid d) The court will not allow her to cancel the contract because a mistake is no grounds for getting out of a contract

a) The court will allow her to cancel the agreement on the grounds of a unilateral mistake

When a party to an agreement owes a duty to perform and fails to fulfill her obligation, this is known as a) breaching the contract b) anticipatory repudiation c) consequential repudiation d) imperfect reformation

a) breaching the contract

In a contract to install network cable in a new office building the parties allocate the price as follows: 75% for the installation, and 25% for materials. What sort of law governs this contract? a) common law b) statutory law c) hybrid law d) regulatory law

a) common law

Which remedy compensates a nonbreaching party for foreseeable and indirect losses? a) consequential damages b) specific performance c) liquidated damages d) compensatory damages

a) consequential damages

In a products, liability case, the injured party can pursue a legal remedy against the seller of the product, based on all of the following theories, except a) immunity b) negligence c) strict liability d) warranty

a) immunity

Ruth was a server at a fancy restaurant. She took the order of two customers, Tom and Jerry, for steak and lobster dinners. Ruth went back to the kitchen, delivering the order to the chef. What type of contract has been formed in this case? a) implied contract b) express contract c) voidable contract d) quasi-contract

a) implied contract

A person who is a customer of Safemart who slips and falls on aisle four is considered a/an a) invitee b) licensee c) accidental trespasser d) incidental trespasser

a) invitee

According to the text, the primary difference between intentional torts and negligence is the a) mind-set of the tortfeasor b) mind-set of the party that was harmed c) amount of the lawsuit d) option of a third-party observer as the reasonableness of the tortfeasors conduct

a) mind-set of the tortfeasor

Alexander was a brilliant inventor who worked for GiantCo. Alexander received a salary of $90,000 a year but also invented several products for GiantCo which made them in excess of 10 billion in profits in the five years he had worked for them. Alexander was dissatisfied with his salary and wanted a bonus based on the massive amount of money, he made GiantCo, but they turned down his request and paid him only one dollar more than his base salary because he had signed an employment contract, which called for him to give up all rights to inventions in consideration of one dollar. Bill thinks this is unfair and has sued. What will be the likely court result? a) Alexander wins because one dollar is inadequate consideration for 10 billion in profits b) Alexander wins, because there was no mutual assent in the contract c) GiantCo wins because the one dollar agreement for the rights to inventions was past consideration, and thus not enforceable d) GiantCo wins, because this was a bargain for exchange and consideration need not be of equal value

d) GiantCo wins, because this was a bargain for exchange and consideration need not be of equal value

In which of the following scenarios would enforcement of specific performance be appropriate? a) Jared ordered a standard laptop computer from Computers-R-Us for $1000 but Computers-R-Us failed to deliver the computer by the start of classes when he needed it b) Shirley offer $10,000 to buy a new motorcycle, the Superfast 100 from Fonda Motors. It was their most popular new model, and they had sold thousands just like it, but the demand caused a back order, and Fonda Motors couldn't deliver the motorcycle to Shirley c) Connie contracted with Maria, an electrician, to rewire her new office. By the time she opened for business Maria got a large contract and told Connie she would be unable to finish her office in time d) Vincent, an art dealer, contracted with Jackson to purchase his original Picasso painting for $10 million but when Vincent arrived to pick up the painting, Jackson told him he had changed his mind and would not honor the contract because he could not bear to part with it

d) Vincent, an art dealer, contracted with Jackson to purchase his original Picasso painting for $10 million but when Vincent arrived to pick up the painting, Jackson told him he had changed his mind and would not honor the contract because he could not bear to part with it

Shelby was offered a job by Cheatco and she signed an employment contract. She quit her current job, which was quickly filled by her previous employer, and packed up her apartment and moved to the city where the Cheatco job was located. When she arrived at Cheatco headquarters, the executive who had offered her the job told her the deal was off. How can Shelby best mitigate her damages? a) File her lawsuit as soon as possible, while the evidence is available, and witness regulations are fresh b) file for unemployment insurance as quickly as possible, so that she doesn't sink too far into debt c) protest outside the Cheatco headquarters to pressure them to give her the job d) actively seek new employment as soon as possible

d) actively seek new employment as soon as possible

A breach of duty may be established by showing a) violation of a safety statute b) breaching of common law standards of behavior c) Res ipsa loquiter d) all of the above

d) all the above

The fact that the injury would not have occurred, except for the breach of duty by the tortfeasor is called the a) proximate cause b) misfeasance c) nonfeasance d) cause in fact

d) cause in fact

Ginsberg signs an agreement with Roberts to lease a 1000 square-foot warehouse for one year. Which of the following categories does this contract fall into? a) express and unilateral b) implied and written c) bilateral and implied d) express and bilateral

d) express and bilateral

Honest Bill the used car salesman told Fran, a prospective customer, that the car she was considering had only been driven by a little old lady on Sunday and had only 30,000 miles on it. Honest Bill knew this was a lie and that the mileage had been altered, as the car actually had 230,000 miles on it. Which of the following would Honest Bill's actions be if Fran buys the car in reasonable reliance upon his lies and the car breaks down a week after she buys it? a) slander b) trade libel c) product disparagement d) fraudulent misrepresentation

d) fraudulent misrepresentation

In order to claim discharge through substantial performance, the deviation cannot be ______? a) minor b) substantial c) more than $500 d) material

d) material

Kirsten entered into a contract with Brando to remodel Brando's kitchen by June 1st, as he was putting his house on the market. The contract specifically states that the job was to be completed by June 1st. Kirsten completed the remodeling on June 5th. Max has suffered no loss due to the delay, as no prospective buyers came out to see his house in the first week it was on the market. The job is otherwise done exactly to all contract requirements and specifications. If Brando sues Kirsten for breach of contract to the missed completion date, and if the courts were to award damages, what type of damages would most likely be rewarded? a) punitive damages b) consequential damages c) restitution d) nominal damages

d) nominal damages

Ginger uses the wrong type of cleaner fluid to clean out the deep fryer at her café and causes an explosion. The explosion causes the cafés front window to shatter and injures a pedestrian walking on the public sidewalk in front of the cafe at the time of the explosion. In a suit against Ginger for negligence. a) Ginger wins because she owed no duty to the pedestrian b) ginger wins, because there is no sufficient proximate cause c) pedestrian wins, because Ginger owes him a special duty d) Pedestrian wins because Gingers actions were the cause and proximate cause of the injury

d) pedestrian wins, because Ginger's actions were the cause and proximate cause of the injury

Jackson agrees to provide consulting services to Frankfurter industries for a period of two years. Before he begins his services, Jackson finds out he won the lottery and decides he no longer wants to work for Frankfurt. Frankfurter agrees. The parties have discharge their obligations through a) modification b) substitute agreement c) impossibility d) rescission

d) rescission