Business Law Midterm Spring 2007

March 27, 2007

True/False
Indicate whether the sentence or statement is true or false.

____ 1. Frances has lived in an apartment for ten years when she decides to buy a house. Her
one-year lease will end on May 1. On April 15, she orally contracts to buy Smith's house
for $100,000, with the closing (transfer of the deed) to take place on June 1. Smith's
lawyer, who is out of town on vacation, is to draft a written contract of sale on his
return to his office on May 15. Because Frances's lease is terminating, Smith agrees to
let her take possession of the house on May 1 if Frances gives him a "down payment"
on the house of $5,000. Frances agrees and gives Smith the $5,000. She moves into
the house on May 2 and the following weekend plants trees in the back yard. On May
10, Smith receives a written offer from Green to buy Smith's house for $120,000. Smith
accepts Green's offer, asks Frances to move out of the house, and tries to return the
$5,000 to Frances. Frances claims that she has an enforceable contract to buy the
house. Smith claims that any such contract must be in writing to be enforceable under
the Statute of Frauds. Smith’s statement is:

____ 2. Criminal law spells out the rights and duties that exist between persons and their
governments and the relief available when a person’s rights are violated. Civil law, in
contrast, is concerned with wrongs committed against the public as a whole.

____ 3. An oral defamatory statement must be communicated to a third party to be actionable.

____ 4. Parents are ordinarily liable for the contracts made by their minor children, whether or
not the children acted on their own.

____ 5. All collateral promises must be in writing to be enforceable.

____ 6. Mistakes in judgment as to value or quality will permit one to avoid a contract.

____ 7. A superseding cause is an intervening event that imposes liability on a defendant for
injuries caused by the intervening event.

____ 8. Under the doctrine of strict liability, a defendant is liable for the results of his or her
acts only if he or she intended those results.

____ 9. The federal equivalent of a state trial court is a U.S. court of appeals.

____ 10. Alternative dispute resolution refers to any method for resolving a dispute outside the
court system.

____ 11. An expression of opinion is not a valid offer.

____ 12. An advertisement is generally treated as an offer to contract.

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____ 13. In an auction in which the seller reserves the right to accept or reject any bid, there is
no binding contract until the seller accepts a bid, even if the auctioneer accepts a bid
during the auction.

____ 14. A counteroffer does not terminate but continues an offer.

____ 15. Under the mailbox rule, an acceptance can be valid as soon as it is sent.

____ 16. An oral contract for a transfer of an interest in land is never enforceable.

____ 17. Evidence of prior negotiations over a contract can be introduced in court only if that
evidence contradicts the contract's written terms.

Multiple Choice
Identify the letter of the choice that best completes the statement or answers the
question.

____ 18. “Shoeless” Joe Jackson comes to Barb’s rescue and promises to support Barb’s three
year old daughter Cookie with a yearly $10,000 payment for the rest of Cookie’s life.

The above oral promise is:

a. Within the Statute of Frauds and
must be evidenced by a writing.
b. Not within the Statute of Frauds
and needn’t be evidenced by a
writing.
c. Within the Statute of Frauds but
need not be evidenced by a
writing.
d. Not within the Statute of Frauds
but must be evidenced by a
writing.

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____ 19. On March 26th Anthony Fenech (who once climbed over a glass wall to see what was
on the other side) made his daily drive to the mall in his 1977 orange Ford Pinto to see
his girlfriend Tiffany de Epiphany. Tiffany is a red-headed freckled-faced 400 pound
mannequin who is on display in the window at the “big girls” store commonly referred
to as Lane Bryant. Mr. Fenech, dressed in yellow spandex pants, a purple tank top and
a Flava Flav clock around his neck was standing in front of the store pretending to read
the latest copy of “Teenwire Magazine.” In reality he was whispering “sweet nothings”
to Tiffany and fogging up the Lane Bryant window.

While all of the Lane Bryant employees were helping customers Mr. Fenech grabbed
Tiffany de Epiphany and started running toward his getaway car- the Pinto. One of
Tiffany’s legs fell off in the food court and witnesses said Mr. Fenech began singing
“Big Girls Don’t Cry” as he dragged Tiffany through the mall.

Mr. Fenech made it out of the mall but he did not make it through the San Mateo
Bridge Toll Booth. Mr. Fenech was stopped as he went through the carpool lane when
police officers noticed what appeared to be a distressed looking female passenger with
lipstick smeared all over her face riding in the passenger seat. Mr. Fenech was arrested
and many items were recovered from the truck of the Pinto including two sets of
handcuffs, a lone ranger mask and a CD of Rickey Martin’s greatest hits.

The police officers provided the above information to the District Attorney, Professor
Isler, so the Professor could charge Mr. Fenech.

Presuming that Mr. Fenech is not insane, what is a real stretch but please use your
imaginations, what should the Professor, who is “too cool to catch a cold,” charge Mr.
Fenech with?

a. Burglary d. Receiving stolen goods

b. Conversion e. I don’t know but I’m glad I wasn’t
in the food court eating when
Fenech ran by in spandex
c. Larceny

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____ 20.

The above picture of Eva and Professor Isler was taken on Professor Isler’s balcony at
his get-a-way condo in Rio. These were happy times but not long after these pictures
were taken Eva filed for a divorce when she caught the Professor kissing Jessica Alba.
In truth, the Professor was administering mouth-to mouth resuscitation to Jessica who
fainted with joy after she accidentally saw Professor Isler naked but Eva would not
listen.

During the California divorce proceedings the judge ruled that the prenuptial
agreement that the Professor asked Eva to sign was invalid because Eva and the
professor used the same attorney.

With respect to the Judge’s decision:

a. The judge’s ruling was correct
b. The judge was incorrect
c. The judge was correct because he
was following the ruling from the
Barry Bonds case.
d. The judge was incorrect because
is was permissible for Eva and the
Professor to use the same
attorney; however, the courts
would prefer that people use
separate counsel

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____ 21. A dispute arises over the ownership of a boat in dry dock in Fort Lauderdale, Florida.
The boat is owned by an Ohio resident, over who a Florida court normally cannot
exercise jurisdiction. The other party to the dispute is a Nebraska resident.

In this situation, a lawsuit concerning the boat could be:

a. filed in a Florida state court on c. filed in a Florida state court on

the basis of the court’s in the basis of the court’s “long
personam or personal jurisdiction arm” jurisdiction
b. filed in a Florida state court on d. filed in a Florida state court on
the theory of nunc pro tunc the basis of the court’s in rem
jurisdiction

____ 22. What do probate courts and bankruptcy courts have in common?
a. Both are federal courts c. Both are state courts
b. Both are courts of general d. Both are courts of limited
jurisdiction jurisdiction

____ 23. Standing to sue means:

a. The plaintiff has decided to stand c. A party has satisfied all elements
before the court and take an oath necessary to be in federal court.
that she is about to tell the truth.
b. The plaintiff has decided to stand d. A party has a sufficient “stake” in
before the court and take an oath a matter to justify seeking relief
that the complaint that she filed through the court system.
stands on firm legal precedent.

____ 24. The difference between arbitration and mediation is that arbitration is binding while
mediation is not.

The above statement is:

a. True c. False with respect to nonbinding
arbitration and mediation
b. False because arbitration is never d. False because mediation is
binding binding

____ 25. Anthony, Fenech, who is all foam and no beer, wanted to divorce Rosie O’Donnell so he
sent his little brother Nimrod, who is seventeen years old, over to Rosie’s house to
serve her with divorce papers. Rumor has it that Nimrod fell out of a stupid tree and hit
every branch on the way down. Apparently the tree was planted near the family home.
Anyway, Nimrod boldly walked up to Rosie and said hey Rosie I heard that when you
got on the scale this morning it said “One at a time please.” Rosie was not amused.
Nimrod handed Rosie the divorce papers and said “you have been served.” When
Nimrod turned to walk away Rosie kicked him in the rear end so hard that the impact
was heard for blocks.

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 What is true about the above set of facts?

a. Rosie was improperly served and c. Rosie was improperly served and
may be sued for assault may be sued for battery
b. Rosie was properly served and d. Rosie was improperly served, but
may be sued for assault and may be sued for assault, for
battery battery and mayhem

____ 26. Written questions for which written answers are prepared and then signed under oath
are:

a. Admissions c. Depositions
b. Interrogatories d. Circular motions ad litham

____ 27. The process by which a jury is selected is called:

a. Selection by cause c. Voir dire

b. Nunc pr tunc d. Duces tacum

____ 28. Kirby sues Carvello in the Superior Court for the County of Santa Clara, a trial court in
California. Carvello loses and decides to appeal the verdict in Kirby’s favor. What
should Carvello do?

a. File a notice of appeal in the trial c. File a notice of appeal en banc

court
b. File a notice of appeal in the d. File a notice of appeal in pari
appeals court delicto

____ 29. Anthony Fenech, and his girlfriend, Dumey Somore, drove to Idaho in Anthony’s Ford
Pinto. When Anthony and Dumey arrived they were charged $2,500 for a shrimp fishing
license, while Idaho residents were charged $25. Dumey paid the fee because it takes
Anthony four months to earn $2,500 working at McDonalds. Anthony does intend to
move up in the world and apply for a job at Jack-In-The-Box. His twin brother, Jack, has
yet to hire him but Anthony knows he will be hired one day.

Dumey wants to file a lawsuit against the state of Idaho and thought about asking
Anthony but remembered that he is as smart as fish bait. Instead she has asked you for
advice. What of the following would be the best advice?
a. Dumey should file a lawsuit c. Dumey should file a lawsuit
alleging that her Commerce alleging that her rights under the
Clause rights have been violated. Full Faith and Credit Clause have
been violated
b. Dumey should file a lawsuit d. Dumey should file a lawsuit
alleging that her rights under the alleging that her rights under the
Privileges and Immunities Clause Equal Protection Clause have
have been violated been violated and request that

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 the court use the “Compelling
State Interest” test.

____ 30. The Establishment Clause:

a. Prohibits the government from
establishing a state-sponsored
religion.
b. Prohibits the government from
forcing a seventeen year old
Jehovah’s Witnesses to receive a
blood transfusion.
c. Allows states to establish
traditional religions when there is
a Rational Basis.
d. Allows states to establish
traditional religions when there is
a Compelling need to do so.

____ 31. The Equal Protection Clause of the U.S. Constitution

a. Prohibits people from denying c. Prohibits individuals from
another person’s fundamental engaging in race discrimination
rights like privacy. unless there is a compelling
reason for doing so
b. Prohibits states from engaging in d. None of the above.
race discrimination unless there
is a rational basis for doing so.

____ 32. Anthony decided to take his girl “Big Booty Bobbette” out for a night on the town.
Anthony had the evening all planned. First he would take Bobette out for dinner at
Burger King and he would let Bobbette “super size” any order. Then Anthony was going
to take Bobette shopping at the Ninety-Nine Cent Store Outlet and then he would take
Bobette out to a concert to see the “Queen Reunion Tour” with special musical guest
“The Village People.” While at Burger King, Anthony believes that he was overcharged
and shoves Wally, a Burger King waiter. Wally sues Anthony, alleging that the shove
was a battery. Anthony is liable if
a. Burger King did not overcharge him.
b. The shove was offensive.
c. Anthony acted out of malice.
d. Wally did not wait on Anthony
e. he merely shows his face in the place as his presence alone is a harmful
or offensive contact

____ 33. Ace Corporation uses, in its radio ads, a recording by Blair, who owns the rights,
without paying for the use. Over time, the song comes to be associated with Ace's
products. Blair sues Ace. Ace is liable to Blair for
a. Appropriation.
b. Conversion.
c. Wrongful interference with a customary relationship.
d. None of the above.

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____ 34. Kelly is an appliance salesperson. Kelly commits fraud if, to make a sale, she
a. discloses the truth.
b. represents as a fact something that she knows is untrue.
c. states an opinion concerning something that she knows nothing about.
d. uses puffery.

____ 35. Kay files a suit against Larry based on one of Larry's statements that Kay alleges is
fraudulent. To give rise to fraud, the statement must be one of
a. delusion.
b. fact.
c. opinion.
d. truth.

____ 36. Curt, a dairy goods salesperson, follows Dona, a competitor's salesperson, as she visits
convenience stores to make sales. Curt solicits each of Dona's customers. Curt is likely
liable for
a. conversion.
b. trespass to personal property.
c. wrongful interference with a business relationship.
d. wrongful interference with a contractual relationship.

____ 37. Anthony Fenech has always had problems connecting so Joy invited Anthony over to
her apartment to help Anthony prepare for his new job. Anthony is worried about being
around a real life girl because he does not “log in” very well so he asks the coolest
person that he knows, Professor Isler, for advice. After a short conversation the
Professor determined that Anthony suffered from Connectile Dysfunction which was
brought about because of a bad hard drive. The Professor charged Anthony $500 and
then suggested that Anthony go to a computer repair shop to fix the problem.

When Anthony was on the way to the computer repair shop he decided to practice for
his new job which he was to start the next day. He rolled the windows down in his Pinto
and started yelling:

“Welcome to Jack in the Box, I’m Jack, may I take your order?”
“Welcome to Jack in the Box, I’m Jack, may I take your order?”
“Welcome to Jack in the Box, I’m Jack, may I take your order?”

When Anthony arrived at the repair shop he was dismayed to learn that the store was
closed so Anthony decided to earn some real money by robbing a man selling hotdogs
on the street. Anthony approached the man and said:

“Welcome to Jack in the Box, I’m Jack, may I take your order?” “I mean, hand
over the cash or I’ll shoot you with the gun that is in my pocket.”

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 Anthony did not really have a gun. Truth to tell, according to Tiffany his gun shoots
blanks but the hotdog vendor feared for his life and gave Anthony $3.00, Anthony went
to the liquor store bought a bottle of Mickey’s Malt Liquor, drank it quickly and fell
asleep. Anthony woke up in jail and found that he was charged with robbery.

Was the robbery a charge against Anthony correct?

a. No because Anthony did not hit anyone

b. Yes because Anthony threatened bodily harm
c. No because Anthony did not enter a dwelling
d. Yes because Anthony formed Actus Reus

____ 38. Lola files a suit against Mac, a medical doctor, alleging negligence. As a physician, Mac
is held to the standard of
a. an average human being.
b. a reasonable person.
c. a reasonable physician.
d. a typical professional.

____ 39. Nick sees Opal, a stranger, in peril, but does not attempt to rescue her. Opal could
successfully sue Nick for
a. negligence per se.
b. nothing.
c. a violation of the "danger invites" rescue doctrine.
d. a violation of a Good Samaritan statute.

____ 40. Driving his sport utility vehicle negligently, Bart crashes into a streetlight. The
streetlight falls, smashing through the roof of a house, killing Chris. But for Bart's
negligence, Chris would not have died. Regarding the death, the crash is the
a. cause in fact.
b. intervening cause.
c. proximate cause.
d. superseding cause.

____ 41. In Case 7.2, Palsgraf v. Long Island Railroad Co., the court decided that the railroad
employee's conduct was not wrong in relation to Palsgraf but did not decide whether
the conduct was negligent toward the man with the package (that led to Palsgraf's
injury). If the court determined that the railroad employee was negligent with regard to
the man with the package, would the railroad have been liable for the injury to
Palsgraf?

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 a. Yes, because negligence to one party creates negligence to all other
parties injured as a result.
b. No, because Palsgraf's injury was still not foreseeable.
c. Yes, because of the doctrine of assumption of risk.
d. No, because Palsgraf was also negligent.

____ 42. Beth is injured in a car accident and sues Carl, alleging negligence. Carl claims that
Beth was driving more carelessly than he was. Comparative negligence may reduce
Beth's recovery
a. even if Beth was only slightly at fault.
b. only if Beth was as equally at fault as Carl.
c. only if Beth was less at fault than Carl.
d. only if Beth was more at fault than Carl.

____ 43. An Iowa state statute requires amusement parks to maintain equipment in specific
condition for the protection of patrons. Jack's Fun Park fails to maintain its equipment.
Kay, a patron, is injured. Jack's has committed
a. a dram shop act.
b. contributory negligence.
c. negligence per se.
d. res ipsa loquitur.

____ 44. In an emergency situation, Lori renders aid to Mike, who needs help. Mike would most
likely be prohibited from suing Lori for negligence under
a. any circumstances.
b. a Good Samaritan statute.
c. a social host statute.
d. no circumstances.

____ 45. Gail is a "payday" lender charged with filing false claims in bankruptcy proceedings
against her debtors. The standard of proof to find a defendant who has been charged
with a crime guilty is
a. a preponderance of the evidence.
b. beyond all doubt.
c. beyond a reasonable doubt.
d. clear and convincing evidence.

____ 46. Cathy causes a disturbance at Diners Cafe. She is arrested and charged with disorderly
conduct, a misdemeanor. A misdemeanor is a crime punishable by imprisonment up to
a. one year.
b. six months.
c. ten years.
d. thirty days.

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____ 47. Ira signs Jill's name, without her authorization, to the back of a check made out to her.
This is
a. burglary.
b. forgery.
c. larceny.
d. robbery.

____ 48. Jack receives an MP3 player stolen from Kate. To be criminally liable, Jack
a. must know only that the player is stolen.
b. must know only that Kate is the true owner.
c. must know that the player is stolen and that Kate is the true owner.
d. need not know that the player is stolen or that Kate is the true owner.

____ 49. Phil sets fire to his house. At common law, the crime of arson could be committed only
if a person burned down
a. a commercial building.
b. an unoccupied structure.
c. his or her own house.
d. the house of another person.

____ 50. Jay is charged with embezzlement. Embezzlement is not robbery because
embezzlement may be committed without
a. a criminal act.
b. a criminal intent.
c. taking property from its owner.
d. the use of force of fear.

____ 51. Helen points a gun at Irma, threatening to shoot her. Irma hits Helen, causing her
death. Charged with homicide, Irma can most likely successfully claim as a defense,
a. consent.
b. duress.
c. entrapment.
d. self-defense.

____ 52. Harry, a computer programmer for Inventory Control Corporation, is arrested in his
employer's parking lot on suspicion of larceny. Harry must be informed of his right to
a. a trial by jury.
b. punishment.
c. question witnesses.
d. remain silent.

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____ 53. Britney, an employee of Computer Associates, is arrested at work. A grand jury issues a
formal charge against Britney for larceny. This charge is
a. an arraignment.
b. an indictment.
c. an information.
d. an inquisition.

____ 54. Bob offers to sell Carol his computer but conditions the sale on Carol accepting the
offer by May 1. Bob may revoke the offer
a. before Carol accepts the offer.
b. before May 1, whether or not Carol has accepted the offer.
c. only after Carol accepts the offer.
d. only after May 1.

____ 55. Ace Sales Corporation plans to move to a new office. Ace offers to sell its office
furniture to Beta Marketing, Inc., but does not specify a time for Beta to respond. The
offer expires
a. after a reasonable period of time.
b. after thirty days.
c. after thirty minutes.
d. never.

____ 56. Kim sends an offer to Leo to cut down and remove a tree for $400. Kim says, "If you
say nothing, I will consider you to have accepted my offer." If Leo does not respond, he
will be deemed to
a. accept the offer.
b. make a counteroffer.
c. reject the offer.
d. none of the above.

____ 57. Paul offers Rita $1,000 for her $5,000 computer. Rita knowingly and voluntarily agrees
to the offer but later sues Paul. A court would likely
a. set aside the agreement as unfair.
b. set aside the agreement because the consideration is inadequate.
c. not question the adequacy of the consideration.
d. consider such a suit to be frivolous.

____ 58. Mary promises to pay her assistant Ned $10,000 in consideration of the services he
provided over the years. Mary never pays Ned. Mary is
a. liable for payment of the $10,000.
b. liable only if Ned still works for Mary.
c. not liable, because the consideration is in the past.
d. not liable, because the consideration was unintentional.

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____ 59. Ann is injured in an accident caused by Bob. Bob agrees to pay Ann $2,500 if she
agrees to release Bob from further liability. Ann agrees. If Ann's damages ultimately
exceed $2,500, Ann can
a. collect the balance from Bob in a breach-of-contract suit.
b. collect the balance from Bob in a tort suit.
c. collect the balance from Bob on the ground of unforeseen difficulties.
d. not collect the balance from Bob.

____ 60. After an accident with a driver for General Transport Company (GTC), Paul signs a
covenant not to sue GTC for damages in a tort action if it pays for the damage to his
car. This covenant
a. bars recovery only if GTC pays.
b. is an illusory contract.
c. is barred by the preexisting duty rule.
d. is unconscionable.

____ 61. Betty pledges to donate $1,000 to the Children's Hospital. On the basis of the pledge,
the hospital orders additional equipment. Betty reneges on the pledge. The hospital
sues Betty. If the court enforces the pledge, it will be
a. because Betty's performance is uncertain.
b. because of the unforeseen difficulties.
c. because the pledge is a gift.
d. under the doctrine of promissory estoppel.

____ 62. Jill agrees to build a warehouse for Ken and orders supplies from Larry for the job. Ken
promises Larry that Ken guarantees payment for the supplies. Ken's promise is
a. enforceable only if it is in writing.
b. enforceable only if it is oral.
c. enforceable whether it is oral or in writing.
d. not enforceable.

____ 63. AAA Loans, Inc. is one of Beta Business Corporation's creditors. AAA guarantees Beta's
debt to City Bank to forestall litigation. To be enforceable, this guarantee must be in
writing
a. to allow Beta to stay in business and pay AAA and City Bank.
b. to allow Beta to stay in business and pay AAA only.
c. to allow Beta to stay in business and pay City Bank only.
d. under no circumstances.
____ 64. When an actual contract exists:
a. The doctrine of Quasi Contract c. detrimental reliance can be used
cannot be used
b. The doctrine of Quasi Contract d. estoppel may be used
can be used

____ 65. Professor Isler’s favorite music is:

a. Latin Jazz c. Hip Hop

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 b. Jazz d. Bachata

____ 66. Till the cops come Knocking was performed by:
a. Snoop Dogg d. Mr. Fenech’s favorite group- The
Beach Boys
b. Dr. Dre e. Johnny Padilla
c. Maxwell

____ 67. Where was Professor Isler over the Presidents’ Day Holiday last February?
a. In Las Vegas at the NBA All-Star c. In Carmel
Game
b. In Florida at the Daytona 500 d. In Phoenix

____ 68. The singer that was found guilty of statutory rape for having sex with an under aged
minor was:
a. Tony Orlando c. Earl Scheib
b. Eddie Kenderson d. Johnny Paycheck

____ 69. Believe it or not Professor Isler loves a broad range of music. In fact his favorite song in
2006 was:
a. “I Know You See It” by Yung Joc c. “Too Little Too Late” by Jojo
b. “What Hurts The Most” by Rascal d. “I Want To Love You” by Akon
Flatts

____ 70. When I think of this class I think:

a. of a walk on a sandy beach with c. of “You Better Be Ready” by Yung
Eva Mendes MC
b. of breaking my foot off in d. Of a song called “Ay Ven” by
your...... Anthony Santos

____ 71. All evidence obtained in violation of the constitutional rights spelled out in the Fourth,
Fifth, and Sixth Amendments normally is not admissible at trial. All evidence derived
from the illegally obtained evidence is known as the “fruit of the poisonous tree,” and
such evidence normally cannot be used in the trial proceedings. For example, if a
confession is obtained after an illegal arrest, the arrest is the poisonous tree and the
confession, if “tainted” by the arrest, is the “fruit.”

The above statement is:

a. Incorrect with respect to the c. Correct and is called the
“poisonous tree” portion. “Exclusionary Rule.”
b. Incorrect with respect to the d. Correct and called “The Miranda
“fruit” portion. Tree Doctrine.”

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____ 72. Anthony, who is a convicted felon, was threatened by an acquaintance Pee Wee
Herman with a gun. Anthony, who was afraid and started crying, grabbed the gun and
fled the scene, but subsequently he was arrested under a statute that prohibits
convicted felons from possessing firearms.

In this situation Anthony’s best defense is:

a. There was no actus reus c. Necessity
b. Mistake d. Justifiable use of force

____ 73. Little Billy, who is seven years of age carried a loaded gun to school and shot Rachel,
who was eighteen, with a gun.

What crime can Little Billy be charged with?

a. First Degree Murder c. None
b. Second Degree Murder d. Assault With A Deadly Weapon

____ 74. Patents, copyrights, trademarks and trade secrets are all:
a. property rights covered by the c. personal property
Statute of Fraud
b. Real property d. intellectual property

____ 75. In the Bible, specifically in the Book of Acts, the inhabitants of Malta were called
"barbaroi" meaning that they did not speak a civilized tongue. Obviously this is not true
of all people from Malta but sadly we know this to be true with respect to a certain
person from Malta who is in this very class. At this point there is no need to mention
this truculent, somewhat jealous malicious malcontent posing as a student by name,
but I can tell you that his girlfriend Tiffany calls him the Maltese Minute. I wonder why!
We shall call him MM for short

Anyway, one day MM left his apartment in the projects in his freshly painted 1972
purple Ford Pinto (the one with eight inch rims) to repair cracks at Tiffany’s house and
also repair other things that were broken. It turns out that there were many cracks to
be fixed. MM wanted to repair the cracks but didn’t know how. He asked Tiffany who
suggested that he ask a real pro. MM called up Professor Isler who advised MM to fill
the cracks with caulk. MM had no idea how to do this so the Professor said ‘Use your
caulk gun.” Armed with his new-found knowledge MM announced to Tiffany I’m going
to repair the cracks by filling them with caulk. Tiffany said “how are you going to do
that?” MM said “with my caulk gun.” Tiffany said “Come on now, Bobette, and I both
know that you don’t know how to fill a crack with caulk. I’ll tell you what; do something
your good at. Go in the kitchen and make us some dinner while you do my laundry.”
MM said ok.

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By the way, in determining whether a contract has been formed we look at intent
based on:

a. The parties personal subjective d. The facts and circumstances

intent before the contract was formed
b. The facts and circumstances after e. I don’t know but I hope you-know-
the contract was formed who continues to call you Farmer
John so you can fry him again on
the final!
c. the objective theory of contracts

Do not place your names on the Scantron, Student ID Numbers only.

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 Business Law Midterm Spring 2007
Answer Section

TRUE/FALSE

1. ANS: F
This situation involves a contract for a sale of land, which in most circumstances must
be in writing to be enforceable. In this case, however, the buyer has paid part of the
price, taken possession, and made permanent improvements (planted trees), and
arguably the parties cannot be returned to their pre-contract status quo. A court would
therefore grant the remedy of specific performance to the buyer. Whether a court
would enforce this oral contract would be determined by the degree of injury that the
court perceived would be suffered if the court did not enforce it. Being homeless is a
serious consequence.

2. ANS: F
The reverse is true. Civil law spells out the rights and duties that exist between persons
and their governments and the relief available when a person’s rights are violated.
Criminal law, in contrast, is concerned with wrongs committed against the public as a
whole.

3. ANS: T

4. ANS: F

5. ANS: F

6. ANS: F

7. ANS: F

8. ANS: F

9. ANS: F

10. ANS: T

11. ANS: T

12. ANS: F

13. ANS: T

14. ANS: F

15. ANS: T

16. ANS: F

17. ANS: F

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 MULTIPLE CHOICE

18. ANS: B
Any contract, which by its terms is incapable of being performed within one year, is
falls within the Statute of Frauds. If there is any possibility, no matter how statistically
remote, no matter how improbable, that the contract obligations could be performed
within a year, then the subject matter was never within the Statute of Frauds, though
in actual experience it takes fifty years to carry out the terms of the bargain. Here,
Cookie might die before attaining her fourth birthday and although the mortality table
suggest that the chance of that happening are small, there is a statistical chance that
Shoeless Joe could fully perform on that promise within a year and Shoeless Joe would
be bound to make the payment even as Cookie is qualifying for Social Security.

19. ANS: C

20. ANS: D

21. ANS: D
This example is on page 31 of your text.

22. ANS: D

23. ANS: D

24. ANS: C NOT: Neither nonbinding arbitration or mediation are binding.

25. ANS: C

26. ANS: B

27. ANS: C

28. ANS: A

29. ANS: B

30. ANS: A

31. ANS: D

32. ANS: B

33. ANS: A

34. ANS: B

35. ANS: B

36. ANS: C

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37. ANS: B

38. ANS: C

39. ANS: B

40. ANS: A

41. ANS: B

42. ANS: A

43. ANS: C

44. ANS: B

45. ANS: C

46. ANS: A

47. ANS: B

48. ANS: A

49. ANS: D

50. ANS: D

51. ANS: D

52. ANS: D

53. ANS: B

54. ANS: A

55. ANS: A

56. ANS: D

57. ANS: C

58. ANS: C

59. ANS: D

60. ANS: A

61. ANS: D

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62. ANS: C

63. ANS: D

64. ANS: A

65. ANS: D NOT: I mentioned this on 3/22

66. ANS: C NOT: I mentioned this many times. If you got it incorrect, slap
yourself!

67. ANS: B

68. ANS: D NOT: I discussed this when I talked about strict liability with respect
to crimes

69. ANS: B NOT: Believe it or not this was my favorite song last year

70. ANS: D NOT: 3/22 Lecture

71. ANS: CA

72. ANS: C NOT: I gave this very example in class.

73. ANS: C NOT: Billy cannot form mens rea

74. ANS: D

75. ANS: C

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