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International American University

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BUS 540a Business Law for


Managers
Introduction to Business Law [Contracts]
Midterm Examination
PRINT YOUR NAME IN THE SPACE BELOW
Shamshat Mamedov

Read each question carefully before indicating True


of False.

TRUE OR FALSE
1. All Contracts must be in writing to be enforceable

True

False
2. A Written Contract for any purpose is enforceable

True

False
3. Signing a false name will release you from a contract
True False
4. Offer, Acceptance, Money & Capacity are required for a K
True False
5. A corporation is like a living person [entity]

True

False
6. Certain Contracts provide a rescission period
False
7. A Corporation not in good standing can still sign a K
True False
8. A K signed by a Corporation not in good standing is valid
True False

BUS 540a - Business Law For Managers Midterm Exam


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True

9. A Corporation not in good standing cannot defend itself


True False
10. The term UCC stands for Uniform Contract Code

True

False
11. A letter of intent creates the same duty as a contract
True False
12. When one party breaches, the other party is still bound
True False
13. Bona Fide has the opposite meaning of Mala Fides
True False
14. Good faith and fair dealing is assumed in each Contract
True False
15. A verbal contract involving Real Estate will be valid
True False
16. Everything a sales man says is true

True

False
17. The term UCC stands for Uniform Commercial Code
True False
18. Acceptance is the unconditional agreement to an offer
True False
19. Prior to acceptance, an offer can be withdrawn.

True

False
20. Breach is a failure by one party to uphold their duty
True False
21. Consideration can be anything of value to the parties
True False
22. Undue influence can render a contract void or voidable
True False
23. Unilateral means two-sided
False

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True

24. You should investigate a company before doing business


True False
25. Liability for a business is defined as their legal obligation
True False
26. A Contract can be based on one party not doing an act
True False
27. Qualified acceptance is actually a rejection of the offer
True False
28. A contract written on a napkin is not enforceable

True

False
29. The lack of privity defeats a claim of breach

True

False
30. The incorrect choice of Jx can delay the legal process
True False

FILL IN QUESTIONS
What are the 3 main parts to forming a contract?
31

offer________________

32

___________OFFEREE_____

33

OFFEROR________________

What is the 4th part to forming a contract ?


34.

ACCEPTANCE

There is an Offeror and an Offeree in contracts.


35. Who is the person proposing the Contract? OFFEROR
36. Who is the person receiving the Contract proposa.offeree
37. What is the common symbol for Contracts?
BUS 540a - Business Law For Managers Midterm Exam
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K_____

38. Unilateral means _1__ sided and Bilateral means __2_ sided.
39. When both parties to a K have committed acts contrary to
the terms, it is referred to as _ __consideration __________________ .
40. To run due diligence on a Corporation you are going to do
business with, you start with the ______research______________ [of the
incorporating state]
41. Running due diligence on a corporation you are going to do
business with, you are checking to ensure that the corporation is in
____good____ _ standing and therefore able to enter into a binding
contract.
42. In addition to checking the good standing of a corporation,
when that corporation is a contractor, you should also check the status
of their license. You do this by checking with the State license board.
List the ways that you can look up a Contractor.
43. Name

45.has work compensation

44. License number

46.look for judgement

IS IT A CONTRACT ?
Considering Offer Acceptance Consideration Capacity [and legality]
read and respond to the following scenario.
Jack and Jill ride to work each day in a car Jill bought six months ago for
$18,000. She makes monthly payments to the bank and pays for
insurance. Jack and Jill share fuel expenses and most mornings Jack brings
coffee for the both of them and the long ride. One cold morning after Jack
enters Jills car and they are about to embark on their daily drive, Jill
cannot get the car started. She pounds on the steering wheel yells in
anger I will sell you this car for $600 Jack immediately writes a check to
Jill for $600.
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47. Has a contract been formed?


NO

YES

48. If you think a contract was formed, explain why.


___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
________________________________________
49. If you think a contract was not formed, explain why.
The contract was not formed because they did not write
contract,but they should have contract if amount more then 500
$
50. Can Jill tell Jack to get out and refuse to give him the keys.
NO

YES

51. If Jill refuses to give the keys to Jack, is that a breach of contract?
YES NO
52. If you think Jill would breach the contract by refusing to give the keys,
explain why.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
________________________________________
53. List everything you found right or wrong with the Jack and Jill example
above.
It was not contract and each party have not to do perform
something. Jill was in a bed mood also was in a state of anger and
does not think what she said, but Jack advantage this situation.
In Lucy v. Zehmer (VA, 1954) Lucy accepted an offer from Zehmer to
buy his farm.
After Lucy accepted, Zehmer tried to get out of the deal.
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54. What did Zehmer try to use as a defense?


Zehmer claimed on the witness stand that the circumstances
were such that Lucy should have know he was too inebriated
to agree to the sale.
55. Did Zehmer get out of the deal?

YES

NO

56. Why?
Lucy was justified in believing that it was a serious business
transaction, rather than a mere jest.
In Leonard v. Pepsico, Leonard took part in a prize give-away and tried
to get a big prize by collecting a certain item.
57. What was the prize Leonard wanted?
1 Harrier jet airliner
58. What was the item Leonard collected?
Points from bottles
59. Was Leonard allowed to get the prize?

YES

NO

60. Why?
It was a joke and comic character promises should be obvious
To any reasonable person and also none Harrier combat can
not be sold into private hands.

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