Business Law Summer 08 Final
July 24, 2008
Professor Isler
Directions
Every Scantron must have a "G" number, not a partial number, not some number you have made up and not a Social Security Number. If you submit a Scantron without a correct "G" number I will reduce your score by TEN QUESTIONS.
The exam ends at 7:30 sharp. There are 73 questions on the exam and two "Just for Fun Extra Credit" questions. If you get these correct you get points but you will not be penalized if you get them wrong. In the True/False section mark "a" for True and "b" for False. In the multiple choice section you should select the best answer. Attendance questions make up 16% of the exam. Raw exam scores, the exam and exam answers and final grades will be posted by noon tomorrow. The exam is not cumulative except for attendance questions and the lecture on Strict Liability. Good luck and enjoy the rest of your summer break.
True/False
Indicate whether the sentence or statement is true or false.
____1.Harvey asked Wilma to marry, and Wilma agreed. This agreement must be in writing.
____2.Father promised to pay Wilma $1,000 in exchange for Wilma’s promise to marry Harvey. To be enforceable, this contract must be in writing.
____3.A contract for the sale (or lease in excess of one year) of any interest in real property must be in writing to be enforceable.
____4.Angus entered into an oral contract with Bessie as follows: “If my son does not pay you the $400 he owes you for the car you sold him, I will pay it.”
To be enforceable, this contract must be in writing.
____5.Angus said to Bessie, “Sell my son that car and I will pay you $400.
To be enforceable this contract must be in writing
____6.As a general rule, evidence of prior or contemporaneous agreements is not admissible to contradict the terms of a complete integrated written agreement.
____7.Once a bankruptcy petition is filed voluntarily or involuntarily, virtually all other litigation or other action by creditors or potential creditors against the debtor or the debtor’s property are suspended until the bankruptcy is resolved and the stay is lifted.
____8.In most states, a sole proprietorship must file a certificate of proprietorship.
____9.Sole proprietorships are taxed at the flat rate of 49%
____10.In a limited partnership, the liability of a limited partner is limited to the amount of capital he or she has invested in the partnership.
____11.A partnership pays no taxes and must use Form SS-4 to get a TIN.
____12.Easements can be created by necessity.
____13.Mary transferred her property to Ed for as long as Bill Clinton is alive. Thus a life estate per autre vie was established.
Multiple Choice
Identify the letter of the choice that best completes the statement or answers the question.
Fact Pattern 1
Desdaemona and Othello wanted to purchase a new Ford Explorer. Othello had longed for a new Explorer and felt that in this time of rising gas prices he could get a good deal and express to the world that he made enough money to drive a gas guzzling car. Desdaemona and Othello took the bus to A-1 Motors to pick out the Explorer. Adnan, the salesman was convinced that he could get A-1’s sales manager, Kashoggi, to give them the proverbial “deal-of-the day.” Othello selected a red Explorer which was sold by Ford Motor Company to Peninsula Ford who then sold the car to A-1. On the way home while driving the red Explorer Othello decided to call his best friend Bud Weizer to tell him (Bud) of his new puchase. Just before turning into Bud’s driveway, the Explorer, which was equipped with tires made by Firestone-Bridgestone, tipped over and fell on Sarcophagus, a ten year old boy who was a friend of Little Billy. Sarcophagus was killed instantly. Sarcophagus’ mom, Crypt, was devastated because she knew that the Ford Explorer was notoriously known to be a defective product because of the defective tires that were standard equipment, and she went to the law firm of Dewey Cheatem and Howe to seek the advice of an attorney. When the attorney, Swisher Sweet, entered the room Crypt said “Mr. Sweet I want justice, who can I sue?” Mr Sweet paused and thought long and hard before answering because he had not attended Professor Isler’s products liability lecture.
____14.Refer to Fact Pattern 1. Mr. Sweet has asked you to answer on his behalf. Who can Crypt sue?
a. / Ford / d. / Peninsula Fordb. / Firestone/Bridgestone / e. / All or any of the above
c. / A-1 Motors
____15.Refer to Fact Pattern 1. Presume for this question that Crypt sued A-1 motors and won. A-1 now asks your advice as to what action they should take. What should you tell A-1?
a. / Tell A-1 to sue Ford for indemnity. / c. / No advice since A-1 was the company that sold the car to Othello and A-1 will have to live with this unlucky situationb. / Tell A-1 to sue Peninsula Ford for contribution / d. / Appeal the earlier decision because Crypt cannot sue A-1 and win under these facts
____16.Attendance- Refer to Fact Pattern 1. If A-1 sold a car to Snoop Dogg what kind would it be?
a. / A Chevyb. / A Ford
c. / A Cadillac
d. / A Hummer
____17.Smilin’ Sams Used Cars places an advertisement in the San Francisco Chronicle offering to sell a red, 1996 Ford Mustang with license plate 345-ABC to the first buyer who offers $8,000. Jarhed Jones sees the ad and immediately drives over to Smilin’ Sams Used Cars with $8,000 cash before anyone else. With respect to Smilin’ Sams advertisement what is true?
a. / The ad was merely an invitation to negotiate like all ads / c. / It cannot be an offer because no person in their right mind would sell a 1996 Ford Mustang for $8,000 so clearly this was a jokeb. / The ad was sufficient to constitute an offer since it was specific as to price, subject matter and time for performance / d. / None of the above
____18.Olivier, the owner, admiring his new home just completed by Brent, the builder, said to Brent, “Because you have done such a great job of completing my home on time, I am going to pay you an additional $10,000.”
If Olivier subsequently refuses to pay the $10,000, Brent
a. / Can enforce the promise / c. / Can sue in a court of equity to collectb. / Cannot enforce the promise because the consideration (Brent’s completion of the home on time) occurred before Olivier made the promise for the additional $10,000 thus, this is past consideration. / d. / Can enforce the promise in a court of law because the entire law of contracts is based on making people keep their word
____19.Sosa took his son, Deivi, to McGuire, a physician, and asked McGuire to operate on Deivi's hand. McGuire said that Deivi would be in the hospital three or four days and that the hand would probably heal a few days later. Deivi's hand did not heal for a month and the father sued McGuire for breach of contract.
With respect to offers, what is the likely court ruling?
a. / The court would rule that McGuire made an offer to heal Deivi's hand in a few days / c. / The court would allow damages for Deivi because if McGuire promised that the hand would heal in a few days he should be held to that promiseb. / The court would rule that McGuire had not made an offer to heal Deivi's hand in a few days, he had merely expressed an opinion / d. / The court would allow damages for Deivi but only if the healing process took more than thirty days as thirty days is universally known to be a "reasonable time
____20.The following conversation took place between Tansey and Isler
Isler: "I will sell you my big black truck for five thousand dollars."
Tansey: "Hell No you arrogant-assed Professor, I'll give you four thousand”
Isler: "Hell no it is worth more than that and since you called me arrogant you will receive a ‘D’ in this class"
Tansey: "OK, I'll give you five thousand."
With respect to the above-mentioned conversation what is true?
a. / Isler made an offer and Tansey accepted within a reasonable time so a contract was formed / c. / Isler made an offer but Tansley rejected. Isler then rejected Tansey’s offer and when Tansey accepted $5,000 it was too lateb. / There is a valid offer and acceptance / d. / There was illussory promises only
____21.KCSM radio calls Ms. Deconcini and asks if she would make a $5 donation. Ms. Deconcini, inexplicably, has never listed to KCSM but says, I will send in $5. Two days later, the University of San Francisco School of Law asks Professor Isler for a donation of $10,000. The school explained in detail how they were going to destroy the current law library and build another. Professor Isler said “sure, no problem.”
Which of the above-referenced promises, is any, is likely to be enforced even though they are not supportd by consideration?
a. / Both promises can be enforced / c. / Deconcini’s promise can be enforcedb. / Neither promise can be enforced / d. / Only Isler’s promise can be enforced
____22.The UCC (Uniform Commercial Code) refers to contracts involving
a. / goods / c. / real estateb. / services / d. / intellectual property
____23.Which state does not follow the Uniform Commercial Code?
a. / Louisiana / c. / Washingtonb. / Minnesota / d. / Hawaii
____24.Under the “mailbox rule,” an acceptance is effective:
a. / upon dispatch / c. / when postmarkedb. / upon receipt / d. / when it is sent by certified mail
____25.Alex Rodriguez borrowed $5,000 from Lenny Kravitz over five years ago but never repaid the loan. The statute of limitations in the jurisdiction for such debts is four years. Alex recently wrote a letter to Lenny in which he said “I feel awful that I never paid you back the $5,000. I just won $2,000 at the race track, so I will pay you that much of what I owe, to make amends.”
If Lenny sues to recover the amount loaned what is the likely result?
a. / Lenny will not recover because the statute of limitations barrs enforcement of the debt / c. / Lenny will recoverb. / Lenny will not recover because the statute of limitations will not prevent enforcement of the debt because Alex reaffirmed the debt / d. / Lenny will not recover because the statute of limitations will not prevent enforcement of the debt because Alex reaffirmed the debt and the reaffirmation was done in writing
Fact Pattern 3-1
Wen Jiabao owes Mastercard $10,000. He has only had the MasterCard one month and made one $10,000 purchase. Wen calls up MasterCard and has the following conversation with Ma Ying-jeou.
Wen- “Hello Ma, I want to pay you $5,000 instead of $10,000 so I can get a brand new start.
Ma- “Sure, no problem, send certified funds, we can help you on your brand new start.
The next day, Wen Jiabao sends certified funds in the amount of $5,000 as he was told. Two weeks later, Mastercard sends Wen a new bill showing a balance of $5,000.
____26.Refer to Fact Pattern 3-1. Must Wen pay the $5,000?
a. / Yesb. / No
c. / Yes because of modern public policy reasons
d. / Yes because Wen never placed the debt in dispute
____27.Refer to Fact Pattern 3-1. What was Wen attempting to do?
a. / Reach an accord and satisfactionb. / Obtain a novation
c. / Obtain a release
d. / Obtain estoppel
____28.Courts never question
a. / the legal sufficiency of consideration / c. / the adequacy of considerationb. / motives for making a contract / d. / none of the above
Fact Pattern 4-1
Nikolai Khabibulin, age seventeen, married Ana Ivanovic, aged twenty-one. To celebrate they decided to smoke cigarettes, have vodka and beer, and talk to strange young girls on the street.
____29.Refer to Fact Pattern 4-1. If a San Mateo police officer sees Nikolai smoking a cigarette on the corner of El Camino and 3rd Avenue what can the police officer do?
a. / give Nikolai a ticketb. / nothing because Nikolai is an emancipated minor
c. / Nothing because although it is illegal to sell Nikolai cigarettes it is not illegal for Nikolai to possess or smoke cigarettes
d. / arrest Nikolai if the smoking happened after January 1, 2008
____30.Refer to Fact Pattern 4-1. If a San Mateo police officer who knows that Nikolai is only seventeen sees Ana buying cigarettes for Nikolai what can the police officer do?
a. / issue a citation to Anab. / nothing because Nikolai is married
c. / nothing because Ana is twenty-one
d. / none of the above
____31.Refer to fact pattern 4-1. Suppose that on the way home Nikolai and Anna noticed a young girl on the street who looks like she recently moved to the Bay Area. Suppose further that she stated that she she was recruited to be a prostitute. Which of the following cities was the young girl likely recruited from?
a. / St. Paul, Minnesota.b. / New York City.
c. / Miami.
d. / Anchorage, Alaska
____32.Lady Duff Fact Pattern
Lady Duff-Gordon, a British aristocrat, styled herself a creator of fashion. She wanted to turn this vogue into money so she went to New York and entered into a bargain with a little man named Otis Wood. The two entered into a formal written agreement by which Lady Duff made Mr. Wood her exclusive agent for a period of one year to market her apparel in North America. By the terms of the written agreement Otis promised the following three things:
1. He promised to split any profit that he made fifty-fifty;
2. Second, he promised to account to her once a quarter for any profits; and
3. Third, he promised to protect the integrity of her apparel with copyrights, patents or trademarks as necessary.
Lady Duff signed this written agreement in New York and then boarded a train bound for Los Angeles during a period where Rodeo Drive was just a glimmer in a retailer’s eye. Two days after arriving in Los Angeles, Lady Duff viciously, and premeditatively, breached the agreement with Otis Wood when she sold her clothing line directly to the public and kept all of the profits. When Otis found out about it he was mad and filed suit against Lady Duff in New York which was the jurisdiction where the alleged contract was formed. Mr. Wood sought an accounting for the profits and requested monetary damages.
Lady Duff-Gordon made a personal appearance at the trial and announced that if the trial court carefully looked at the alleged contract they would see that Otis Wood had not promised her anything. She said that this was a purely illusory undertaking because:
1. First, Mr. Wood promised to split the profits fifty-fifty but he never promised that there would be any profits;
2. Second, he promised to account for the profits quarterly, but if he didn’t make any profits there would be no obligation to account; and
3. He promised to protect her fashions with copyrights and trademarks registrations but if he did not sell anything it would never be necessary.
Lady Duff then asserted that there was not consideration to the vexatious action brought by Mr. Wood, a petty colonial. The next day Lady Duff boarded a famous boat and set sail for the United Kingdom. Five days later a German U-Boat which was lurking off the coast of Ireland hit the famous boat with a torpedo and sunk it. Two years later, Lady Duff shows up in English case law under completely different set of circumstances as she was the defendant in an admiralty case. It seems that Lady Duff’s traveling companion, Sir Cosmo, took a lifeboat that was intended to hold sixty people, and by bribing six members of the crew, Sir Cosmo, Lady Duff and the six members who accepted the bribe got into the lifeboat along with Lady Duff’s maid and rowed to safety as fourteen hundred and eighty-three people on a very famous boat to their deaths.
Later at Lady Duff’s trial, Lady Duff’s maid testified that as the famous boat sank Lady Duff exclaimed “Oh look, there goes my smashing collection of apparel.”
While Lady Duff survived her encounter with the famous boat, she was not so lucky in the New York Court because the court accepted Lady Duff’s challenge to review the contract and held that it was not illusory.
Attendance- With respect to the Lady Duff fact pattern, what did I tell you the name of the “famous boat” was?
a. / The Lady Duff / c. / The “Queen Ezizabeth” which was famous because when the ship was painted they spelled Misspelled Elizabeth and wrote Ezizabeth and the Queen Mother had the painter beheadedb. / The Sir Cosmo / d. / The Lusitania
____33.Refer again to the Lady Duff fact pattern. I explained this case in detail and told you of the unique court decision. What was that decision?
a. / The court ruled the contract was not illusory because the court said “It is implied that both parties would use best efforts or good faith to achieve a legitimate business objective so there was indeed consideration.” / c. / The court agreed with Lady Duffb. / The court fined Lady Duff one million dollars which, at that time, was the largest fine in U.S. histoty / d. / The court agreed with Lady Duff and Oliver Wendell was so upset that he resigned from the U.S. Supreme Court
____34.With respect to the Lady Duff case
a. / The case was called Wood v Lucy and is a true case, used in law schools across America / c. / The case was referred to as “The Beheading Case,” is a true case, and is used in law schools across Americab. / It established the rule commonly referred to as the “Four Corners Doctrine.” / d. / Come on Professor, you expect me to believe that there was a guy named Sir Cosmo! This was made up and you told us that in class
____35.On March 1, 2008 Employee and Employer entered into the following agreement: “Employee agrees to work for Employer from May 15, 2008, through March 31, 2009.”