MBA 504 Final Exam

Fine Properties, Inc. negotiates with General Maintenance Corporation to include a liquidated damages clause in their contract. To be enforceable, at the time of the contract, an estimate of the damages from a breach must be

Definite

The Honda Astra is a subcompact car. Because of its size, the fuel tank is located behind the rear axle (instead of the industry practice of locating the fuel tank above the rear axle in subcompact cars). Also, the Astra's rear bumper (simply a piece of chrome) offers minimal protection in a rear-end crash. Honda knows this information, but produces the Astra anyways. Mariam is driving a Honda Astra when she is rear-ended, resulting in major injuries. In a subsequent lawsuit, Mariam should pursue which of the following theories? Select the best answer.

Design defect

The contract defense of _____ is used in a situation where one party to the contract obtains the other party's assent via a threat. Mistake

Duress

The elements of negligence are:

Duty, Breach, Causation, Damages

To knowingly supply false information on official bankruptcy schedules is a crime.

True

To potentially be enforceable, a non-compete agreement must be reasonable in terms of duration and geographic restriction.

True

Having a ___ gives a creditor the legal right to possess the collateral if the debtor defaults.

Security Interest

Cassie files a voluntary petition in bankruptcy for relief through a liquidation. Among her debts that will not be discharged are claims

​by creditors who were not notified of the bankruptcy.

Metro Movers Miami Corporation allows Metro Movers Milwaukee Company to use Metro Movers' trademark as part of its company advertising. This is

A license

Which of the following is a correct statement of the legal rule?

A minor may disaffirm a contract for a necessity, but the minor must pay the reasonable value of that item.

CopyPro Inc. requires new hires to sign an agreement stating that they will not work for any company selling or leasing office equipment for 5 years in any of the following North Carolina counties: Pender County, Onslow County, Brunswick County, Carteret County, or New Hanover County. This agreement is ______.

A non-compete agreement

Page Development, LLC offers to pay Quik Delivery, LLC (QD) $250 if QD picks up and delivers to the corporate office a package of business documents from Rice Construction, Inc. within 30 minutes. QD can accept the offer only by meeting the deadline. If QD performs as directed, these parties will have

A unilateral contract

The basic elements necessary to form a contract are ___.

Agreement, Consideration, Capacity, Legality

A products liability claim can be brought on which of the following theories?

All of the above

Nolan Transport, Inc. offers to purchase a semi-truck from Smith Logistics, Inc. for $60,000. Mr. Smith, CEO of Smith Logistics, replies, "No, I can't accept that low of a price. However, I will sell it to you for $70,000." Mr. Smith's response functions as _______.

All of the above

When making decisions, businesses should consider which of the following?

All of the above

Jerry agrees to act on Joy Leasing, LLC's behalf, subject to its control, and Joy Leasing, LLC trusts Jerry to so act. Jerry and Joy Leasing, LLC set out the terms in a written document. This is _____.

An agency by agreement

Danny flew a drone over a warehouse owned by Major Construction & Manufacturing Corporation. Major Construction & Manufacturing Corporation​'s warehouse is surrounded by a fence with numerous "No Trespassing" signs. Which of the following is TRUE?

Danny committed intentional tort of trespass to land

Metro City Mall requires its tenants to sign a lease that includes a clause releasing Metro from liability in the event of monetary or physical injury no matter who is at fault. Coco's Chocolate Creations, LLC signs a lease with the mall that contains the clause. This is

An exculpatory clause

Rough Water Fishing Trips, LLC and Schafer Marine, Inc. enter into a contract for the delivery of a used freshwater fishing boat. Until the goods are delivered and paid for, these parties have ____.

An executory contract

Bo signs a lease with Capri Apartments to lease a studio apartment for the next year for $650 per month. Daisy signs on Capri's behalf as their agent. Bo and Capri have executed a(n) ______.

An express contract

Digital Enterprise, Inc. promises to pay its employees a year-end bonus "if profits continue to be high and management agrees at the time." This is _____.

An illusory promise

This type of authority arises when the principal causes a third party to believe that the agent has authority, even when he or she does not.

Apparent Authority

At a baseball game, Lydia was struck by a foul ball while she sat in her seat and was injured. The best defense for the baseball team is ____.

Assumption of Risk

Bilas LLC and Vitale LLC engage in a business transaction that leads to a dispute. Bilas LLC initiates a lawsuit against Vitale LLC by filing a complaint and serving Vitale LLC with a summons and a copy of the complaint. If Vitale LLC chooses to ignore it,

Bilas LLC will have judgment entered in its favor

A court appointed a conservator for Kira. Later, while still under the conservatorship, Kira signs a lease with Towers Apartments, Inc. The court deems this contract void and unenforceable because this requirement for a valid contract is missing: _______.

Capacity

In a Chapter ____ bankruptcy, the debtor is allowed to continue in business. The creditors and debtor formulate a plan under which the debtor pays a portion of its debts and the rest of the debts are discharged. This is the type most commonly used by corporate debtors.

Chapter 11

Ali is purchasing an airline ticket via the airline's website. To continue with his purchase, the website presents Ali with "Terms and Conditions" and instructs Ali to select a box labeled "I agree."​ This is an example of a ______ agreement.

Click-on agreement

Baumer was injured by hot coffee at McDonald's. The jury returned an award of $200,000 in compensatory damages. The judge reduced this award to $160,000 because Baumer was 20% at fault for his injuries and losses. This is an example of _____ in action.

Comparative Negligence

Which of the following accurately describes the order in which litigation proceeds

Complaint is filed. Answer is filed. Discovery. Jury Selection. Trial

This contract requirement is defined as "bargained-for exchange." It answer the question of what this party hoped to obtain by entering into the contract.​

Consideration

A promise to do what one already has a legal duty to do constitutes legally sufficient consideration.

False

Administrative law is a source of Amercian law that is comprised of statutes.

False

If an action is legal, it is always ethical

False

Patents are only protected at the state level

False

To be effective, an offer does not have to be communicated to the offeree. True

False

Under pure comparative negligence, a plaintiff is barred from receiving any monetary damages if the plaintiff is found to be negligent in any way (even if the defendant was much more negligent).

False

Under the doctrine of respondeat superior, an agent is liable for the principal's negligence.

False

Under the doctrine of strict liability, if there is no fault, there is no liability

False

When both parties to a contract are mistaken about the same material fact, the contract cannot be rescinded.

False

Joe files a petition in bankruptcy. The initial proceeding on this petition will be in

Federal bankruptcy court

The payment of Olinda's debt to Prudent Loan Company is guaranteed by Olinda's personal property. Prudent is most likely to perfect its interest by

Filing a financing statement with the appropriate authority

In 2022, Kelly writes Like the Wind, a novel about marathoners and ultra marathoners. Kelly does not register the work with the appropriate government office. Under federal copyright law, Kelly's work is protected for _____.

For the life of the author + 70 years

Hearty Harvest Corporation sells heirloom vegetable seeds on its website. In the Terms section of the website, Hearty Harvest writes that "any litigation arising from this website or from the sale of Hearty Harvest products shall be commenced in the federal court located in Los Angeles County or the state court located in San Luis Obispo County, California." This provision is called _________.

Forum Selection Clause

Guido and Hal want to rescind their contract under which Guido sold Hal a mountain bike for $100. To rescind the contract

Guido must return the $100 and Hal must return the bike

To have standing to sue, a party must meet these three requirements:

Injury, Causation, Redressability

Kim, an attorney, is behind on her billable hours for the month. She considers "rounding up" her billable hours for each client to meet her target. However, Kim decides not to do this on the basis of duty-based ethics. Which of the answer choices would be an example of Kim making a decision on the basis of duty-based ethics?

Kim's religious beliefs prohibit lying

Which of the following is NOT an intentional tort

Negligence

XYZ, Inc. and ABC, LLC disagree over the amount due under their contract. To avoid involving any third party in the resolution of their dispute, XYZ, Inc. and ABC, LLC might prefer to use the alternative dispute resolution method of _______.

Negotiation

Lena borrows from Mac and Nicol, using the same collateral for both loans. Only Nicol has a perfected security interest. Lena defaults on both loans. The party with first rights to the collateral is

Nicol only

Nadal Industries is closing its doors. It offers to sell the remaining inventory in its warehouse to Medvedev International for $20,000 if Medvedev accepts by close of business on Friday, June 2nd. On June 3rd, Medvedev accepts the offer to purchase the remaining inventory in the warehouse for $20,000. Is there a valid contract?

No, this is not a valid contract

Which of the following is an example of an appellate court?

North Carolina Supreme Court

Maya's motorcycle is damaged in an accident caused by Luc's negligence. Luc agrees to pay Maya $25,000 if she agrees to release him from further liability. Maya agrees. If her damages ultimately exceed $25,000, she can ____.

Not recover the balance

Rosalind, a seventeen-year-old minor, signs a contract to sell her car to Street Fleet Used Cars. The next day, Rosalind tells Street Fleet that she's decided not to sell the car. Rosalind is liable to Street Fleet for

Nothing

RiteMade Machinery, Inc. designs, makes, and sells a drill press. Steel Equipment Company copies the design without RiteMade's permission. Steel's conduct is actionable provided

RiteMade's design is patented

Morgan, an officer of Regional Economic Development Associates, Inc., determines the appropriate business decision on the basis of a cost-benefit analysis. This is ____.

Outcome-based ethics

A ____ is a property transfer or payment made by the debtor that favors one creditor over others.

Perference

Under the doctrine of stare decisis, judges are obligated to follow previous court decisions from that jurisdiction that involve similar factual/legal issues as the case being heard. Those previous court decisions with similar factual/legal issues are called ______.

Precedent

The standard of proof in a civil case is:

Preponderance of the evidence

Sustainable Crops Corporation regularly expresses opinions on political issues, including whether to ban the use of genetically modified organisms (GMOs). Under the First Amendment, corporate political speech is

Protected

____ damages are designed to punish the defendant and deter others from engaging in similar conduct.

Punitive Damages

Mediocrité, Inc., makes and sells goods that are substandard. Nancy, who has never bought or used a Mediocrité item, files a suit against the firm, alleging that its products are defective. The company's best ground for dismissal of the suit is that Nancy does not have

Standing

Kappa Corporation is filing a breach of contract lawsuit (based solely on state law) against Omega Corporation. Kappa Corporation is incorporated under the laws of New York and its headquarters is located in New York. Omega Corporation is incorporated under the laws of Texas and its headquarters is located in Texas. The amount at issue is $70,000. This case should be brought in ______ court.

State Court

_____ limit(s) the time period during which a party can sue on a particular cause of action. After that time period has passed, the party cannot bring a lawsuit.

Statutes of limitations

The Town of Wrightsville Beach passed a detailed noise ordinance, Of which source of law is this an example?

Statutory Law

Much of American Law is based on

The English legal system

Hugo is a guest at the Holiday Hotel. On the second morning of his stay, Hugo walked outside to his car and slipped in the parking lot. He was injured. Later, Hugo learned that water commonly would pool in that area of the parking lot and would develop a slick surface. The algae was not easily visible because of the color of the pavement. What duty did the Holiday Hotel owe to Hugo?

The Holiday Hotel owed a duty to warn of all risks about which it knew or should have known.

Level Grade Engineering, Inc. sometimes uses explosives to prepare land for construction projects. Strict liability is imposed on this activity because

The activity is abnormally dangerous

Moe applies nano technology to invent a device that reduces the half-life of spent plutonium rods used in nuclear-fuel reactors. He names the device "Halftime." He also writes Nano Nukes, a book about this invention and other uses for nano technology. Moe can obtain copyright protection for ______.

The book Nano Nukes

Driving his motorcycle negligently, Joe crashes into a streetlight. The streetlight falls onto Kim, who is standing nearby, resulting in her death. But for Joe's negligence, Kim would not have died. Regarding the death, the crash is

The cause in fact

Carl's Electrical Supplies Company is purchasing a parcel of land that is owned by Dodson's Autos, LLC. Carl's Electrical pays $50,000 to Dodson's Autos, but Dodson's Autos changes its mind, refuses to vacate the lot, and argues that this contract is unenforceable. In the event that Carl's Electrical suit is successful, _______.

The court could grant specific performance.

Medvedev Inc wants to file suit against Barty Inc, For a court to hear the case,

The court must have jurisdiction

AJ is an employee of Surf Cafe. One day, a customer becomes very angry and throws a spoon at AJ. AJ does not suffer physical injuries. On what basis could the customer be liable for battery?

The customer could be liable for battery if the contact offended AJ

Joe works at Food Town, a grocery store. One day, the manager asks Joe to mop the store restroom. When entering the restroom to clean it, Joe pushed open the door and accidentally hit a customer who was in the restroom with the door. The customer was injured and sued Food Town. Which of the following is TRUE?

The customer could sue joe personally & The customer could sue Food Town

Under the commerce clause, _ has/have the power to regulate interstate commerce

The federal government

Michael offers to sell his fishing boat, Catch 23, to Jordan's Charters, LLC for $1,000,000. Jordan's Charters accepts. Later, Michael said that he was just joking when he made that offer. Michael's intent will be determined by __________.

The objective theory of contracts

Aqua Solutions, LLC enters into a contract with Southside Farms, LLC to provide water for Southside Farm's irrigation needs. Aqua Solutions, LLC fails to deliver. Southside Farms, LLC initiates a suit against Aqua Solutions, LLC, asking the court to order Aqua Solutions, LLC to perform. In this case, Southside Farms, LLC is the

The plaintiff

On Monday, Merlin buys a tablet for $500 from a Pads & Pods store. On Tuesday, he returns to the store and buys a GPS device for $200. On Wednesday, he downloads $100 worth of tunes from singasong.com. To be enforceable as a contract, a writing is required for the purchase of

The tablet only

A bankruptcy estate consists of all the debtor's interests in property currently held, wherever located.

True

A defamatory statement must be communicated to a third party to be actionable

True

A limited partnership must have at least one general partner and at least one limited partner.

True

A principal has a duty to cooperate with the agent and to assist the agent in performing his or her duties.

True

All civil cases must be tried by a jury

True

An agent is always personally liable for the agent's intentional torts.

True

An answer can admit to the allegations made in a complaint

True

An exception to liability for copyright infringement is made under the "fair use" doctrine.

True

Bribery of foreign government officials is both an ethical and a legal issue

True

Generally, appellate courts do not examine witnesses

True

Punitive damages are generally not awarded in an action for breach of contract.

True

Rights to receive funds can be assigned.

True

Burrow is working during the summer at Florida Keys Jet Skis, Inc., a business that rents jet-skis to tourists. On his day off, Burrow and his friend visit the business and pay to rent jet-skis. While out on the water, Burrow negligently crashes the jet-ski into a boat, injuring the driver and damaging the boat. Which of the following is TRUE?

Under the doctrine of respondent superior, Florida Keys Jet Skis, Inc. is NOT liable for Burrow's tort.

Limon, an agent for Mindwonder Games LLC, executes an unauthorized contract with NOW Marketing, Inc. The deal is highly advantageous to Mindwonder, and the company ratifies the contract. The contract is

Valid

In a criminal case, where is venue appropriate

Where the crime occured

Mark works as a security guard at a football stadium with a company VenuePros Inc. Once he was hired by VenuePros Inc., he attended a three-hour training session and worked alongside an experienced security guard at the stadium for three weeks. VenuePros gave him a uniform and created his schedule. Based on this description, does VenuePros have to withhold employment taxes from his paycheck?

Yes, VenuePros must withhold employment taxes from Mark's paycheck.

HB Equipment Inc. contracts to sell a backhoe to Chip's Logging, Inc. for $25,000. Before performing, both parties decide to cancel the deal. This is an example of __________.

a rescission.

Home Helpers LLC contracts with Elias to render personal nursing services for the benefit of Federica. This is

a third party beneficiary contract.

Patsy files a petition in bankruptcy. At the moment of filing

an automatic stay goes into effect.

Maryam, a minor, signs a contract to pay National Health Club a monthly fee for twenty-four months to use its facilities. Six months later, after reaching the age of majority, Maryam continues to use the club. What advice do you give her?

minor must disaffirm a contract before reaching the age of majority or within a reasonable time thereafter. Thus, Maryam can disaffirm the contract as long as she does so within a reasonable time of reaching the age of majority.

Protective Finishes, Inc. (PFI) agrees to paint Quinn's house, using a particular brand of discount paint. PFI completes the job but uses a different brand of discount paint. This is most likely ________.

substantial performance.

Bernard is an expert on exotic flowers. Fine Floral Fixtures, Inc. (FFF) hires Bernard to order exotic flowers from various greenhouses. Bernard does not bother to examine the quality of the flowers he purchases on behalf of FFF. Bernard has breached

the duty of performance.