BUS 201 - exam 2

Which of the following statements is true about property? A. People can privately own every resource; especially every resource of use. B. A property includes resources but not the use of resources. C. A private property in a resource can be created if you can legally exclude others from that resource. D. A property is usually infinite but has an ambiguous boundary. E. The federal law has little control over the exercise of ownership or sale of any type of property across all states.

1. C. A private property in a resource can be created if you can legally exclude others from that resource.

If there is evidence that a word used in a contract has a particular trade usage, courts will A. ask the contracting parties to add it to the nolo contendere section of the contract. B. give it that meaning. C. replace the word with its legal equivalent. D. ask the contracting parties to remove that word from the contract. E. ask the contracting parties to add it as a comment to the contract.

10. B. give it that meaning.

In the context of tort law, what is intent? A. The legal obligation imposed by law. B. The desire to bring about certain or substantially likely results. C. An untrue written statement communicated to a third party. D. A civil wrong other than a breach of contract. E. The failure to exercise reasonable care that foreseeably causes injury.

11. B. The desire to bring about certain or substantially likely results.

Barry, the CEO of Trenton Corp., claims that their competitor, BMN Inc., simply produces a modified version of Trenton's product. He also publicly claims that BMN's products are poor in quality. If the claims made by Barry are untrue, BMN Inc. can sue Barry for the tort of ____. A. injurious falsehood B. malicious prosecution C. fraud D. battery E. larceny

12. A. injurious falsehood

Jack injuries his ankle and is taken to a hospital. Airi, a doctor, applies a cast to Jack's injured ankle. Airi warns Jack not to exert pressure on his injured leg until the cast is removed. Jack ignores Airi's advice and injures his leg again when playing basketball while still having the cast. Jack files a malpractice suit against Airi claiming that she did not set the cast properly. Which of the following defenses is Airi most likely to use in this scenario? A. absolute truth B. private necessity C. consent D. contributory negligence E. retaliation

13. D. contributory negligence

Which of the following statements is true of comparative negligence? A. It compares a plaintiff's fault with a defendant's and reduces the damage award proportionally. B. It allows a plaintiff to claim only punitive damages but not actual damages. C. It requires a plaintiff and a defendant to settle their dispute through arbitration. D. It completely bars a plaintiff from recovering any damages. E. It allows a plaintiff to claim damages without establishing proximate causation and causation in fact.

14. A. It compares a plaintiff's fault with a defendant's and reduces the damage award proportionally.

________ is a catchall phrase for the legal responsibility for injury-causing behavior that is neither intentional nor negligent. A. Strict liability B. Cause in fact C. Negligence D. Assumption of risk E. Comparative fault

15. A. Strict liability

Lee has sued Stan in civil court for an assault and battery. In requesting damages, Lee cites that he spent $1,000.00 on a hospital stay and will have to pay another $2,000.00 for reconstructive surgery due to the injuries he sustained. He also cites that he missed work multiple times due to doctor's appointments and recovery. He says that his lost wages equal approximately $5,000.00. In this scenario, what type of damages is Lee asking for? A. liquidated damages B. punitive damages C. compensatory damages D. equitable damages E. mitigated damages

16. C. compensatory damages

Which of the following statements is true of punitive damages? A. The key to the award of punitive damages is a defendant's motive. B. Punitive damages are awarded depending on the degree of suffering endured by a plaintiff. C. Punitive damages are awarded if a defendant agrees to a rescission. D. Punitive damages are awarded to a plaintiff only in cases of assault. E. Juries award punitive damages to all cases tried and proven for negligence.

17. A. The key to the award of punitive damages is a defendant's motive.

Strict products liability applies to ________. A. media personnel B. medical practitioners C. retail sellers D. attorneys a. accountants

18. C. retail sellers

What is the term used for a defect arising when a product does not meet its manufacturer's own standards? A. design defect B. production defect C. product liability D. breach of warranty E. manufacturer's defect

19. B. production defect

In the context of contracts formed by interactions of parties, which of the following arises from the conduct of the parties rather than from words? A. implied-in-fact contracts B. express contracts C. executed contracts D. void contracts E. adhesion contracts

2. A. implied-in-fact contracts

The ________ defense arises from a plaintiff's knowing and willing undertaking of an activity made dangerous by the negligence of another. A. causation in fact B. fraud C. implied-in-fact D. comparative negligence E. assumption-of-the-risk

20. E. assumption-of-the-risk

Another term used for injurious falsehood is ________. A. conversion B. trade disparagement C. unfair business practices D. fraud E. invasion of privacy

21. B. trade disparagement

________ takes place when one who has a duty to act reasonably acts carelessly and causes injury to another. A. Conversion B. Negligence C. Trespass D. Racketeering E. Assault

22. B. Negligence

Which of the following statements is true about negligence in the context of a business's duty of care and non-conduct? A In recent years, negligence cases against businesses for non-conduct have declined. B. A business entity can never be found negligent for non-conduct. C. The extent of a business's duty to protect customers is done evolving. D. Failure to protect customers from crimes is not a common basis for a non-conduct suit against a business. E. The special relationship between two parties creates a duty to take action and makes a business liable for non- conduct.

23. E. The special relationship between two parties creates a duty to take action and makes a business liable for non-conduct.

In a negligence suit, a plaintiff must prove that A. a defendant has published untrue statements about the plaintiff. B. a defendant knew the potential for injury. C. a defendant could have caused the harm. D. a defendant actually caused the injury. E. a defendant had a malicious intent.

24. D. a defendant actually caused the injury.

One of the applications of proximate cause doctrine to cases where a plaintiff sues for negligence require: A. a defendant to prove that he or she assumed the risk voluntarily. B. the plaintiff to prove a defendant's contributory negligence. C. the plaintiff and a defendant to agree to an arbitration. D. the injury to be caused directly by a defendant's negligence. E. the injury to be caused by a defendant's comparative fault.

25. D. the injury to be caused directly by a defendant's negligence.

The contributory negligence defense allows a defendant to A. absolutely bar a plaintiff from recovery, if the plaintiff contributed to his/her own injury. B. request for rescission as a legal remedy. C. prevent the judge from applying ratio decidendi. D. disqualify a plaintiff from petitioning for a writ of certiorari. E. reduce damages awarded a plaintiff who has played a role in causing his/her injury.

26. A. absolutely bar a plaintiff from recovery, if the plaintiff contributed to his/her own injury.

Which of the following is one of the primary defenses to an allegation of negligence? A. proximate causation B. duty of care C. unreasonable behavior D. comparative responsibility E. causation in fact

27. D. comparative responsibility

Another term for malicious prosecution is ________. A. fraud B. conversion C. false imprisonment D. battery E. false arrest

28. E. false arrest

Identify the appropriate example of malicious prosecution. A. An employee gets her co-worker arrested by falsely accusing her of stealing company property. B. A client files a suit against his attorney for malpractice. C. An employer fires his employee for refusing to go on a date with him. D. A department store holds a kid under the suspicion of shoplifting. E. A tabloid publishes untrue and incriminating information about a politician.

29. A. An employee gets her co-worker arrested by falsely accusing her of stealing company property.

If one party's performance under a contract is less than what is reasonable acceptable, _________ has occurred. A. a material breach B. a partial performance C. an unreasonable breach D. an unacceptable breach E. a substantial breach

3. A. a material breach

A group of teenagers cross over a fence around a farm. The fence has a sign that reads, "Private Property. Keep Out." They use the farm as a party spot. The owner of the farm hears the noise and asks them to leave. The teenagers refuse to do so and threaten the owner with violence to silence him. This is an example of the tort of ________. A. false imprisonment B. conversion C. trespass D. malicious prosecution E. intentional infliction of emotional distress

30. C. trespass

Written defamation, or defamation published over radio or television, is termed ________. A. battery B. hearsay C. slander D. assault E. libel

31. E. libel

Which of the following statements is true of defamation? A. If defamation is oral, it is called libel. B. Written defamation is called slander. C. The news media can be sued for defamation even if the reported statements are true as it constitutes an invasion of privacy. D. Defamation suits can be brought by employees against current or former employers. E. Corporations cannot sue for defamation.

32. D. Defamation suits can be brought by employees against current or former employers.

Which of the following illustrates the tort of conversion? A. Billy publishing false statements about Jane in their school newspaper B. Lori borrowing a book from the city library C. Daniel, a doctor, revealing private patient information without obtaining the patient's consent D. Cristina purchasing a notebook computer from Sabrina without knowing that Sabrina had stolen it E. David returning Lucy's coat in the same condition as it was when he borrowed it

33. D. Cristina purchasing a notebook computer from Sabrina without knowing that Sabrina had stolen it.

John rents a movie from a video store, but instead of returning it, he lends it to Sam who accidentally loses it. In this case, John commits the tort of ________. A. invasion of privacy C. trespass D. battery E. theft

34. B. conversion

Jason borrows Matt's car for a road trip. He meets with an accident on his trip and damages Matt's car. Jason then returns the car to Matt stating that the accident is not his fault and that he is not going to pay for damages. In this scenario, Matt can sue Jason for the tort of ________. A. comparative fault B. conversion C. fraud D. willful negligence E. battery

35. B. conversion

Which of the following statements is true of fraud? A. Fraud can be proved by giving evidence that one was harmed by another failing to disclose a material hidden fact. B. Fraud is always a tort and not a crime. C. Fraud is only applicable for the intentional misrepresentation of property. D. Fraud is only applicable in cases involving financial transactions in business settings. E. The victim of a fraud need not be injured in any way for it to be a tort as long as the victim can prove that the defendant committed the fraud.

36. A. Fraud can be proved by giving evidence that one was harmed by another failing to disclose a material hidden fact.

Sheila contracted her friend Susan to paint her house for $3,000. Sheila did this as a favor to Susan as Susan was unemployed. Before she could finish the job, however, Susan got a job at a marketing company, which meant that she could not complete her contract. As Susan is her friend, Sheila decided not to enforce the contract, and she let Susan keep the $1,000. This scenario is an example of a(n) ________. A. arbitration B. delegation of duties C. condition precedent D. unjust enrichment E. waiver

37. E. waiver

A similarity between a waiver and a release is that A. both require the payment of liquidation damages. B. nonperformance of contract is forgiven in both cases. C. both always occur before a contracting party fails to perform. D. both always occur after a contracting party fails to perform. E. there is a liability for a breach of contract in both cases.

38. B. nonperformance of contract is forgiven in both cases.

A ________ exists when a party to a contract announces that the other party does not have to perform as promised. A. breach B. tender C. release D. surrender E. waiver

39. C. release

An exception to the parol evidence rule allows A. evidence of oral agreements made on contracts that qualify for mandatory arbitration. B. evidence of oral agreements made at the time of or prior to a written contract that changes the meaning of written terms. C. evidence of oral agreement that merely explains the meaning of written terms without changing the terms. D. evidence of oral agreements that are designed to favor the party that drafts a contract. E. evidence of oral agreements made on contracts that qualify for court- annexed mediation.

4. C. evidence of oral agreement that merely explains the meaning of written terms without changing the terms.

Stuart signs a contract that allows him to rent a snowplow from Homer's Plow Company. The contract stipulates that he has to pay $50 per week. Winter ends sooner than expected, so Stuart wants to return the plow ahead of the due date in order to avoid paying unnecessary rent. Homer's Plow Company agrees to let Stuart return the plow as long as he signs a contract that requires him to rent the plow again next year. This is an example of a(n) ________. A. arbitration B. rescission C. release D. novation E. waiver

40. C. release

Josh announces a reward of $500 for his dog, Ginger, that ran away from his house. Josh spreads the word only by pinning up posters in his neighborhood. Amanda, Josh's colleague, sees Ginger and brings her back to Josh without ever seeing the poster. After returning the dog, Amanda sees one of the reward posters and returns to claim the money. In the context of this scenario, which of the following statements is true? A. Amanda is not entitled to the money since she did not communicate the acceptance of the offer in writing. B. Amanda is not entitled to the money because she is Josh's colleague and acted in good faith. C. Amanda is not entitled to the money because the offer was not communicated to her. D. Amanda is entitled to the money because the poster constituted an offer and is effective for the entire neighborhood. E. Amanda is entitled to the money since performance of the requested act in the poster indicates acceptance.

41. E. Amanda is entitled to the money since performance of the requested act in the poster indicates acceptance.

Which of the following statements is true of silence as a method of acceptance? A. Silence may well imply acceptance if the parties previously dealt with each other. B. An offeree's silence implies that the offeree will make a counter offer. C. Silence leads to acceptance of an offer due to the mirror image rule. D. Silence alone can be acceptance and the basis of a binding contract. E. When an offer specifies that silence indicates acceptance, the offeree has to respond.

42. A. Silence may well imply acceptance if the parties previously dealt with each other.

Another name for the mailbox rule is the ________. A. undue influence rule B. the statue of frauds C. deposited acceptance rule D. doctrine of promissory estoppel E. mirror image rule

43. C. deposited acceptance rule

Valid consideration can include any promise to do something one has no obligation to do, refrain from doing something one has the right to do, or in the case of a unilateral contract, a performance when there is no obligation to do so. This is known as a(n) ________. A. legal detriment B. release C. promissory estoppel D. exculpation E. negotiation

44. A. legal detriment

Ariana asks Selena if she can borrow a dress for an upcoming date that she has. Selena agrees to let Ariana borrow the dress. When Ariana comes to Selena's house to select a dress, Selena refuses to give it to her. Which of the following statements is true of this situation? A. Selena does not have to allow Ariana to borrow the dress because a bargained- for exchange has not occurred. B. Ariana has committed a breach of contract. C. Selena has made a promise to Ariana, so she must loan her the dress. D. Ariana has made a counteroffer, which terminates the contract. E. All of the required elements to form a valid contract are present, so Selena and Ariana have entered into a binding contract.

45. A. Selena does not have to allow Ariana to borrow the dress because a bargained- for exchange has not occurred.

Systek 22 Inc. made a promise to Garrett offering him a job with an annual salary of $150,000 and at least two years of employment. Since Garrett had to move to New York for the new job, Systek 22 also offered to reimburse all of his moving expenses. Based on this promise, Garrett resigned from his job at another firm that offered him an annual salary of $100,000. When Garrett moved to New York, his employment with Systek 22 was terminated, because the company found a candidate who was willing to work for a lesser salary. Which of the following is true of this situation? A. Garrett can sue Systek 22 under the doctrine of promissory estoppel. B. Garrett cannot file a lawsuit since a promise of employment is always subject to market conditions. C. Garrett cannot sue Systek 22 since the promise was oral. D. Garrett can sue Systek 22 only for the moving expenses that Garrett can prove he incurred. E. Garrett cannot sue Systek 22 since the reasons for termination will be accepted in court as a legal detriment.

46. A. Garrett can sue Systek 22 under the doctrine of promissory estoppel.

If a minor fails to disaffirm a contract within a reasonable time after reaching majority, the minor is said to ________ the contract. A. breach B. ratify C. terminate D. transcend E. rescind

47. B. ratify

Which of the following, in the context of contract formation, is not an accurate statement about fraud? A. If a contract is based on fraud, a mutual understanding cannot exist. B. Fraud requires a misrepresentation of fact. C. If fraud is committed, the injured party can avoid the contract and ask for consideration to be returned. D. An injury must occur because of one's party's reliance on the fraud. E. Intent is not one of the most important elements of fraud.

48. E. Intent is not one of the most important elements of fraud.

Ricky, a car salesman, wants Penny to purchase a specific vehicle from him because his commission will be higher on that sale. Despite Penny's resistance to accept his offer, Ricky compels her to purchase the vehicle by locking her in his office and threatening to harm her if she does not make the purchase. Penny agrees and buys the vehicle. Which of the following has been most likely used by Ricky to complete the contract arrangements? A. mistake B. constructive fraud C. duress D. negotiation E. misrepresentation

49. C. duress

Which of the following is a correct definition of the parol evidence rule? A. an express or implied relinquishment of a right B. a contractual provision that prevents parties from assigning rights C. the exclusion of prior written or oral agreements that may vary or contradict the present written agreement D. a defense to non-performance based on happenings that greatly increase the difficulty of performance E. the time in which a lawsuit can be initiated

5. C. the exclusion of prior written or oral agreements that may vary or contradict the present written agreement

Tony's Carpets Inc. wants to charge $9.80 a yard for installing a carpet for Serenity Bookstore but accidentally states $8.90 a yard in the bid. Serenity Bookstore accepts Tony's Carpets' bid. Tony's Carpets made a ________. A. rescission mistake B. mutual mistake C. bilateral mistake D. contractual mistake E. unilateral mistake

50. E. unilateral mistake

Duress is defined as ________. A. remedy of cancelling an agreement B. force or threat of force C. an untrue manifestation of fact D. communication of withdrawing an offer E. unfairly taking advantage of one party

51. B. force or threat of force

Which of the following statements is true about the consideration in a contract? A. Courts usually enforce contractual promises in the absence of consideration. B. Performance made before parties discuss their agreement counts as a consideration. C. The amount of the consideration is the most important and relevant part of a contract for a legal action. D. The consideration must be contemporaneous and a part of both parties' understanding of the contract terms. E. The consideration in any unilateral contract is usually absent.

52. D. The consideration must be contemporaneous and a part of both parties' understanding of the contract terms.

Veronica agrees to sell 15 cases of DVDs to a local retail outlet at $120 for each case. Each case is to contain 100 DVDs. When the local retail outlet receives the cases and opens them, it finds that most of the cartons have only 75 DVDs. The retail outlet files a lawsuit against Veronica. During litigation, the retail outlet decides to settle the matter outside the court in order to reduce the expenses involved. Both parties finally agree to revise the rate of each carton to $100, with each carton containing 75 DVDs. The settlement between Veronica and the retail outlet is an example of ________. A. promissory estoppel B. accord and satisfaction C. mirror image rule D. rescission E. fraud

53. B. accord and satisfaction

Harry regularly shipped 100 cartons of electronic goods to Keith on the 15th of every month as per the original agreement. He had been continuing this shipment routine for over a year. On the 20th day of one of the months, Keith refused the goods as he did not want Harry to ship those goods to him and had never accepted any such offer of goods. Harry had not received any prior notification to cancel the shipment of goods. Which of the following statements is true of this situation? A. Harry should have ensured only partial delivery of goods as he received no oral confirmation from Keith about the shipment of goods. B. Keith can sue Harry based on the doctrine of promissory estoppel. C. Keith can sue Harry based on the misstatement of the facts of the offer. D. Harry used duress in controlling the terms of the offer. E. Keith's prior act of dealing and conduct with Harry confirms acceptance of the offer

54. E. Keith's prior act of dealing and conduct with Harry confirms acceptance of the offer

________ is personal property that becomes real property by attaching to land or its buildings. A. A deed B. A fixture C. A life estate D. An easement E. An estate

55. B. A fixture

Which of the following statements is true about concurrent ownership? A. The tenants in common can own different shares of the resource. B. The ownership is divided such that each concurrent owner owns a specific piece of the resource. C. The property interest is divided in joint tenancy. D. The joint tenants can have unequal ownership of shares. E. The tenants in common can have the right of survivorship.

56. A. The tenants in common can own different shares of the resource.

A quitclaim deed makes which of the following guarantees: A. That the grantor can make no assurances about the land and will not surrender all claims against it. B. That certain legal claims against the land exist, but no other claims exist. C. That the grantor will not surrender all claims against the land. D. That the grantor has good ownership and full power to convey it. E. That the grantor surrenders all claim against the land.

57. E. That the grantor surrenders all claim against the land.

Which of the following is a similarity between joint tenancy and tenancy in common? A. In both these forms of ownership, the tenants can own different shares of the resource. B. In both these forms of ownership, the tenants can have disproportionate ownership of share. C. In both these forms of ownership, the tenants can force the separation of ownership under the doctrine of partition. D. In both these forms of ownership, the tenants can exercise right of survivorship. E. In both these forms of ownership, the property interest is divided.

58. C. In both these forms of ownership, the tenants can force the separation of ownership under the doctrine of partition.

Which of the following best describes a characteristic of an easement? A. An easement is a means of creating ownership. B. It allows someone other than the owner of land to use that land. C. It is used solely for the benefit of oil companies. D. It is a form of adverse possession. E. It creates joint tenants of land.

59. B. It allows someone other than the owner of land to use that land.

Which of the following statements is true in cases where only one party drafts a contract that contains terms that appear vague and ambiguous to the other party? A. The court will give the terms the meaning as per trade usage. B. The court will interpret the ambiguous and vague terms against the party that drafts them. C. The court will reject the non-drafting party's attempt to reinterpret the terms after the contract has been signed. D. The court will declare the drafting party's behavior as a tort due to intentional ambiguity of terms. E. The court will interpret the terms as they mean in the common language.

6. B. The court will interpret the ambiguous and vague terms against the party that drafts them.

Which of the following is a proper element of adverse possession? A. The possessor does not need to physically occupy the land. B. The owner must grant permission to the possessor to be on the land. C. The possession must be open and notorious so that the owner is put on notice of the possession. D. The possession must be interrupted to grant ownership. E. The possession does not need to last for any prescribed period of time.

60. C. The possession must be open and notorious so that the owner is put on notice of the possession.

Mike rents a car from Brandy Car Rentals at $40 per day. In this scenario, which of the following statements is true? A. This is a bailment for the sole benefit of the bailee. B. Mike owes the duty of slight care. C. Mike is under a duty to use "reasonable care" to take care of the car. D. This is a bailment for the sole benefit of the bailor. E. Brandy is the bailee.

61. C. Mike is under a duty to use "reasonable care" to take care of the car.

Solomon plans to sell his property. He intends to sell the cattle on his property to the prospective buyer but not the clothes and the household goods. Which of the following is the reason for the clothes and the household goods not being sold with the house? A. The clothes and household goods are intangible goods. B. The clothes and household goods form real property. C. The clothes and household goods are abandoned. D. The clothes and household goods are fixtures. E. The clothes and household goods are personal property.

62. E. The clothes and household goods are personal property.

Simon's relatives come to visit him and want him to show them around the town. Linda helps Simon by lending him her car for a week. This is an example of a(n): A. bailment for the sole benefit of the bailee. B. easement by necessity. C. easement by prescription. D. bailment for the sole benefit of the bailor. E. bailment for the mutual benefit of the parties.

63. A. bailment for the sole benefit of the bailee.

Which of the following exclusively applies to real property? A. bailments B. books C. easements D. clothing E. securities

64. C. easements

Seth takes his laundry to Denise's Dry Cleaners. When Seth gets his clothes back, he notices that two of his shirts, perfect when brought in, are ripped. In this scenario, which of the following statements is true? A. This was not a bailment. B. This was a bailment for the sole benefit of the bailor, and Denise's owed a duty of great care. C. This was a mutual benefit bailment, and Denise's owed a duty of reasonable care. D. This was an unintentional bailment, so Denise's does not owe a duty of care. E. This was a bailment for the sole benefit of the bailee, and Denise's owed a duty of slight care.

65. C. This was a mutual benefit bailment, and Denise's owed a duty of reasonable care.

Chuck is visiting his grandson Mike and decides to give Mike his valuable stamp collection. The collection is the only item in a safe in Chuck's home. Chuck offers the stamp collection to Mike who accepts it. Chuck then gives Mike the only key to the safe. According to the information given, which of the following statements is true? A. There is no valid gift until Chuck hands the stamp collection to Mike. B. This is a testamentary gift, and the gift must be written in Chuck's will for it to be valid. C. This is a testamentary gift, and Chuck must be deceased for the gift to be valid. D. There has been no delivery of the gift, and the gift is not valid. E. There has been a constructive delivery, and the gift is valid.

66. E. There has been a constructive delivery, and the gift is valid.

Goods that are identical are known as a(n) ________. A. accession B. gifts C. collateral D. fungible E. lien

67. D. fungible

Which of the following statements is true about joint tenants? A. Joint tenants must force the separation of ownership through a quitclaim deed. B. The property of joint tenants is owned through adverse possession. C. Joint tenants must have equal ownership shares. D. If one joint tenant dies, the other joint tenant does not have sole ownership of the resource. E. Joint tenants cannot force the separation of concurrent ownerships through the doctrine of partition.

68. C. Joint tenants must have equal ownership shares.

Margaret keeps her extra furniture and household goods at her friend's storage unit, as she thinks he will not need to store anything in it for a while. Margaret's use of the storage unit is an example of a(n) ________. A. testamentary gift B. natural easement C. bailment for the sole benefit of the bailor D. bailment for the mutual benefit of the parties E. adverse possession

69. C. bailment for the sole benefit of the bailor

Morgan signs a contract with Shane agreeing to work with him for a movie. Halfway through the production of the movie, Shane decides to quit as he gets another job as a marketing executive. The printed terms in the contract state that when a breach of contract occurs, the breaching party has to pay $20,000 to the nonbreaching party. The contract also has additional handwritten terms that state that in the event of a party being unable to complete the performance required due to unforeseen, unnatural causes, the breaching party does not have to pay any money to the nonbreaching party. Which of the following statements is true in this situation? A. Shane has to pay Morgan $20,000 as consequential damages. B. Shane does not have to pay any amount to Morgan because his breach was excused by the contractual terms. C. Shane has to pay $20,000 to Morgan for breach of contract. D. Shane can sue Morgan for compensatory damages. E. Morgan cannot sue Shane for the breach as the liquidated damage is meant to penalize the nonbreaching party.

7. C. Shane has to pay $20,000 to Morgan for breach of contract.

You and your roommate are driving through a residential area when you see some furniture piled on the curb to be picked up by the trash collectors the next morning. As you pick up a chair, the homeowner opens a window and yells, "Get away from my stuff." Which of the following statements is true in this scenario? A. The homeowner retains ownership until it is picked up the next morning, so you must leave it. B. The homeowner retains ownership of the property until you buy it from him. C. You may claim the chair as lost property. D. You may claim the chair as abandoned property. E. You may claim the chair as mislaid property.

70. D. You may claim the chair as abandoned property.

Which of the following statements is true regarding the hierarchy of terms that a court uses in order to determine which contradictory terms control the contract? A. Handwritten terms control typed terms, which control printed terms. B. Printed terms control typed terms, which control handwritten terms. C. Printed terms control handwritten terms, which control typed terms. D. There is no hierarchy of terms in a contract. E. Typed terms control handwritten terms, which control printed terms.

8. A. Handwritten terms control typed terms, which control printed terms.

If the parties to a contract add handwritten notes to a form contract, the handwritten notes will A. be replaced with the typed terms. B. be disregarded. C. be interpreted to control the printed notes. D. be physically removed from the document. E. be disregarded until evidence is presented that they are correct.

9. C. be interpreted to control the printed notes.