Business Law-Sam orally agreed to sell Jamie some land for $500,000.

QUESTION

1.
Sam
orally agreed to sell Jamie some land for $500,000. Jamie paid Sam the
$500,000; Sam gave Jamie the deed to the land. Jamie took possession of the
land and began building a cabin on it.
One month later,
Sam tried to retake possession of the land by arguing that the contract for the
sale was invalid because it was oral, not written. Sam sued Jamie to invalidate
the contract and retake the land.
The court will
likely conclude that Sam will:
a) Win; the sale exceeded $500 so the contract
must be written to be valid under the Statute of Frauds.
b) Win; all land sales contracts must be
written.
c) Lose; because the contract was fully executed
Sam cannot rescind the contract.
d) Lose; because Jamie had begun building a
cabin on the property, Sam cannot rescind the contract.
2. On Tuesday, Jon offered to sell his CD
collection to Sandy for $100. Sandy replied, “I’m interested. I’ll think
it over and let you know Thursday whether I want to buy the CDs.” On
Wednesday, Jon agreed to sell the CDs to Jason, and Jason immediately gave Jon
a letter that stated:
“Jon, I
will buy your CD collection for $100. As we agreed, I will pay you on Friday
when I pick up the CDs. Yours truly,
Jason.”
Upon Jon’s
receipt of this letter on Wednesday, what best describes Jon’s contract
agreement(s)?
a) By forming an agreement with Jason, Jon
breached his contract with Sandy because he did not effectively revoke his
offer to Sandy.
b) Jon has formed contracts with both Jason and
Sandy because Jon did not effectively revoke his offer to Sandy and created an
enforceable written agreement with Jason.
c). Jon and
Jason have formed a valid, enforceable contract; Jon’s offer to Sandy was
properly revoked.
d) Jon effectively revoked his offer to Sandy,
but has not formed an enforceable contract with Jason because Jason has not yet
paid for the CD collection.
3. Mac and Rhamad signed a business contract
with a clause that provides that if a dispute arises they must submit to
binding arbitration to resolve the dispute.
After they had been doing business together for a year, a dispute arose
under the terms of the contract. Rather
than submit to arbitration, Mac filed a lawsuit against Rhamad. Most likely the court will:
a) Hear the lawsuit because Mac cannot be
compelled to submit to arbitration; he is constitutionally entitled to a jury
trial if he requests a trial.
b) Conduct a hearing, then order a remedy
without compelling Mac to submit to arbitration or to a jury trial.
c) Compel Mac to submit to arbitration to
resolve the dispute.
d) Hear the lawsuit in a trial, then compel Mac
to submit to arbitration, if Mac is not satisfied with the trial decision.
4. Roxy, while driving through Wyoming to her
home in Montana, accidentally lost control of her car and drove it through a
window into a store owned by Colt. Colt
sued Roxy in a Wyoming court for damages to his store.
Will the Wyoming court likely be
able to exercise jurisdiction over Roxy?
a) No, because Wyoming has no in personam (personal) jurisdiction over
Roxy, and cannot exercise its long arm statute only in cases involving
automobile accidents.
b) No, because Wyoming has no in personam jurisdiction over Roxy, and
cannot justify minimum contacts in this case.
c) Yes, Wyoming can exercise jurisdiction in
this case because there is a federal question involved due to the diversity of
citizenship between the parties.
d) Yes, because Wyoming can assert in personam jurisdiction over Roxy under
the minimum contacts test.
5. Assume a salesperson intentionally made one
of the following statements – knowing that the statement was false – to a
customer considering a purchase. Which
statement could create liability for fraudulent misrepresentation if the
customer made the purchase?
a) “In my opinion, this car is in flawless
mechanical condition.”
b) “This crane will probably lift about 10,000
pounds.”
c) “This car is a real gem.”
d) “This is an original painting by the artist,
Pablo Picasso.”
6. Ram was walking down the sidewalk by a
construction project site in a downtown area.
The project was owned and operated by Modern Construction, Inc. and was
surrounded by orange plastic fencing typically used for construction projects. Ram stopped to watch a metal beam being
lifted by a crane on the construction site.
As the beam swung through the air, Ram thought it was going to fall and
jumped forward quickly off the sidewalk and into the construction project
property, falling into and smashing the orange plastic fencing. As Ram landed inside the construction
project, the beam fell near Ram. The
beam did not hit Ram but some rocks were thrown onto Ram as the beam fell,
cutting his arm so that it required 35 stitches.
If Ram sues Model Construction
for negligence, the likely result will be that Ram will:
a) Lose, because he assumed the risk as a
trespasser on the construction site and trespassers can never recover damages.
b) Lose, because pedestrians are always liable
under contributory negligence in such cases involving trespassing.
c) Win, because it is always foreseeable that a
beam could fall on a rescuing pedestrian.
d) Win, if the beam fell because of Model
Construction’s negligence.
7. Kim carelessly parked her car on a steep
hill, leaving the car in neutral and failing to engage the parking brake. The car rolled down the hill and knocked down
an electric line. The sparks from the
broken line ignited a grass fire that spread to a barn several yards away. The roof of the burning barn fell and damaged
a passing car owned by Ray. Can Ray
likely recover damages from Kim under ordinary negligence?
a) Yes, because Kim was negligent in parking the
car.
b) Yes, because Kim set in motion the chain of
events that resulted in damage to Ray’s car, even though Kim did not directly
hit the car.
c) No, because of the unforeseeable intervening
force doctrine.
d) No, regardless of Kim’s negligence in parking
the car as her negligence was not the proximate cause of the accident and harm
that occurred to Ray.
8. Lee sued Don in negligence. Lee’s losses total $100,000. Under a contributory negligence system, if
Lee is found to be contributorily negligent for her own injuries, what damages
will Lee like recover from Don?
a) None.
b) $100,000.
c) $100,000, less the percentage of fault (e.g.,
20%, 60%, etc.) for which Li was responsible.
d) $100,000, less the percentage of fault for
which Li was responsible, so long as Li was not more than 50% responsible for
the injuries.
9. Don promised to buy his girlfriend, Sophie,
a new car so Sophie sold her old car.
Don now refuses to buy Sophie the car.
Sophie has a job that requires her to have a car to get to work. If Sophie sues Don to enforce the promise,
the likely result is that the promise will:
a) Be enforced under promissory estoppel because
Sophie reasonably relied on Don’s promise, to her detriment.
b) Not be enforced because Sophie received money
from the sale of her old car; if she also received the new car from Don, she
would be unjustly enriched.
c) Be enforced because the car is a necessity
for Sophie and all contracts for necessities are binding and enforceable for
all parties even if contract formation is flawed.
d) Not be enforced as Don’s promise was a gift
to Sophie; Sophie gave consideration, but Don did not.
10. X and Y agreed that X would sell Y his small
business, including the land on which the business was situated, for
$500,000. Both X and Y knew at the time
the contract was formed that the business was actually worth $800,000. Is this a valid, enforceable contract?
a) Yes, provided the contract was in writing, in
accordance with the Statute of Frauds and the parties freely consented.
b) Yes, provided the contract was in accordance
with state statutory law that permits real estate sales for 40% or more below
market value.
c) No, because $500,000 is not valid
consideration for a business worth $800,000.
d) No, because X has no pre-existing legal duty
to sell his business.
11. Fine Art Corp. sent a written offer to
buy 10,000 pencils for a total of $10,000 from Faber Pencil Co. Both parties are merchants. Faber can accept the offer by:
a) Promising to ship the pencils.
b) Promptly shipping the pencils.
c) Accepting the offer on Faber’s own written
standard form contract.
d) All of the above could be valid acceptance.
12. Ralph, a 16-year old minor, is manager
for the high school football team. Ralph
signed a contract to purchase alcoholic beverages from Liquormart, Inc. for the
team party. This contract is:
a) Void as a matter of law because it is illegal
to sell alcohol to minors by state law.
b) Void only if Ralph misrepresented his age and
told Liquormart he was an adult.
c) Valid and enforceable, but Ralph has the
right to disaffirm because he is a minor.
d) Valid and enforceable, if Liquormart knew
that Ralph was a minor.
13. Which of the following activities may
involve the use of a contract, and/or constitute a sales contract?
a) Purchasing medications from a pharmacy.
b) Hiring a contractor to make home repairs.
c) Purchasing insurance policies from an
insurance agent.
d) Selling books to customers in a bookstore.
e) All of the above.
14. Fay was admitted to Global Associates, an
existing general partnership on January, 2014.
In August, 2014, a partnership debt that was incurred in October, 2013
came due. Fay is:
a) Not liable for the debt because the debt was
incurred prior to her joining the partnership.
b) Only liable for the debt up to the amount of
her capital contribution to the partnership.
c) Personally liable only for 50% of the total
debt if 50% of the other partners do not pay.
d) Personally liable for the full extent of the
debt if the other partners do not pay.
15. Kelly, Lars and Mona agreed to be partners
in Neighborhood Deliveries (ND), all splitting the profits equally. Kelly contributed 70% of the capital upon
formation of the partnership. Later,
the partners agreed to dissolve the partnership as it was not as profitable as
they had expected, and its liabilities were greater than its assets.
The losses are paid by:
a) All the partners in proportion to their
capital contributions.
b) All the partners in proportion to their share
of the profits.
c) Kelly alone because she contributed the most
capital.
d) Lars and Mona because they contributed the
least amount of capital.
16. CC’s Day Spa, LLC, is a member-managed
limited liability company. So long as it
is in accordance with state law, and unless the members previously agreed
otherwise, voting rights will be apportioned according to:
a) Participation in management.
b) Capital contributions.
c) The number of members.
d) Each individual transaction of the LLC, and
will vary with each transaction.
17. Jim and Kiley are architects and general
partners of JK Designs. Jim and Kiley
supervise Luc, an employee of JK Designs.
As partners, Jim and Kiley
a) Are personally liable for any/all tort(s)
committed by Luc.
b) May be liable for malpractice, but not torts,
committed by Luc while Luc is working within the scope of his job at JK.
c) May be liable for torts committed by Luc while
Luc is working within the scope of his job at JK.
d) Have no liability for any torts committed by
Luc at any time.
18. Kisha operates River Valley Soccer, an
athletic equipment shop, as a sole proprietorship. Taxes on the business’s income are paid by
a) No one; since it is a sole proprietorship
there are no business taxes.
b) Kisha as the sole owner.
c) The state or federal government if Kisha
holds a Small Business Administration loan acquired to start her business.
d) The business entity of River Valley Soccer,
not Kisha personally.
19. Assume that Virginia enacted a
law prohibiting, until further notice, all grocery stores in Virginia from
selling all powdered spices manufactured in, or shipped from, Maryland. This law was enacted because it was
discovered that the spices recently manufactured in Maryland were infected with
bacteria. Determine the
constitutionality of the Maryland statute.
The statute is:
a)Unconstitutional; it violates
grocery store owners’ substantive and procedural due process rights under the 5th
and 14th Amendments because they are private businesses.
b)
Unconstitutional; the statute imposes an undue burden on interstate
commerce.
c)
Constitutional; it is a valid exercise of Maryland’s police power.
d)
Constitutional; the statute involves the sale of goods which is valid
under UCC rules, thus, the state constitution does not apply.
20. Distinguish which of the
following is an advantage of limited liability companies (LLCs) over
corporations.
a)
Only one member of a LLC must have unlimited
liability as compared with corporations in which all shareholders have
unlimited liability.

b)
LLCs can be formed without any specific steps
being taken by the owners as compared with corporations that must file Articles
of Incorporation with the State.

c)
In
most cases, a LLC can choose whether to be taxed as a partnership or
corporation, as compared with corporations that are subject to double corporate
taxation.

d)
LLCs can choose whether to sell shares
publically to investors, as compared to private corporations that must sell
shares publically to investors.
21. Pete, who collects antique cars, hired Ann as
his agent to find and purchase a 1965 Ford Mustang on his behalf. Ann found a Mustang just like Pete wanted,
but Ann fell in love with the car and purchased it for herself.
Which of the following illustrates Ann’s
liability, if any, in her duty as agent to Pete in this situation?
a)
Ann has not violated the duty of loyalty to Pete; she can find another Mustang
for him.
b) Ann has not engaged in
self-dealing because she did not purchase the Mustang with Pete’s funds.
c)
Ann usurped an opportunity for Pete, but has not violated the duty of loyalty
to Pete by competing with Pete’s interests.

d)
Ann violated the duty of loyalty to Pete by competing with Pete’s interests,
and has usurped an opportunity for Pete.
22. Ed hired Frankie, who is 13 years old, to buy
a computer on Ed’s behalf.
Which of the following identifies the legal
relationship between Ed and Frankie?
a)
This is a valid agency relationship even though
Frankie is a minor, and Ed would be bound by authorized contracts Frankie
enters into on Ed’s behalf.
b)
This is a valid agency relationship even though
Frankie is a minor, but Ed would have the option of disaffirming any contracts
Frankie enters into on Ed’s behalf.
c)
This is a valid agency relationship even though
Frankie is a minor, but Frankie would not be entitled to any payment under the
terms of the agency because he is a minor.
d)
This is an invalid agency relationship because
Frankie is a minor.
23.
Mediation might be more reasonable and appropriate than a trial in which of the
following situations?
a)
A lawsuit challenging the constitutionality of a new state statute.
b)
A dispute between neighbors over a property boundary.
c)
An alleged theft of patio furniture from the patio of a house.
d)
None of the above are appropriate for mediation.
Answer questions
24-25 regarding the following scenario:
Scenario: Jones, a resident of Arizona, booked
reservations for a vacation at World Hotels, Inc. in Cabo Mar, Mexico. World Hotels is an international hotel chain
incorporated in Delaware with hotels in North and South America; World Hotels
has no hotels in Arizona but does advertise and book reservations for all its
hotels over the internet, in any state.
World Hotels has booked reservations in the past with residents of
Arizona.
While
a guest in the hotel in Cabo Mar, Jones was walking across the hotel lobby, and
slipped and fell on the wet marble floor that had been just washed by the
maintenance staff. The staff had placed
a “wet floor” sign on the lobby floor on the side wall of the lobby.
Jones
was taken to the nearest Mexican hospital where surgery was necessary to place
a pin in his broken leg. Anxious to
return home and see his regular doctor, Jones flew out of Mexico shortly after
the surgery. He required two plane seats
and an ambulance to meet him at various airports. His health insurance would not cover his
hospital stay in Mexico as it was located outside the U.S. When back in Arizona, Jones was unable to
work for 8 weeks and required another surgery to remove the pin. He also required several weeks of physical
therapy.
24. Jones wants to sue World Hotels, Inc. for
negligence for $450,000 to recover all his medical expenses in Mexico and the
US; for $50,000 for the cost of the plane trip from Mexico to Arizona, the 2
plane seats and ambulance costs in various airports; $10,000 for 8 weeks of
lost wages; and $50,000 for pain and suffering resulting from the injury. Can he sue in federal court?
a)
Yes, because federal court always has jurisdiction over citizens of
different states.
b)
No, because federal court does not have jurisdiction in cases that do
not involve federal laws.
c)
Yes, because the federal court may have jurisdiction over citizens of
different states and the lawsuit involves damages greater than $75,000.
d)
No, because the federal court has no jurisdiction over an accident that
occurred in Mexico.
25. It would be easier for Jones to bring the
lawsuit in Arizona state court, but he wonders if the court can get World
Hotels to come to Arizona. Can the
Arizona state court impose jurisdiction over World Hotels to bring the company
to court in Arizona?
a)
No, because the subject of the lawsuit took place in a foreign country.
b)
No, because the corporation does not have sufficient minimum contacts
with Arizona to allow the Arizona court to use the long arm statute to establish
jurisdiction in Arizona.
c)
Yes, because the Jones is a resident of Arizona and he is the plaintiff
in the lawsuit.
d)
Yes, because World Hotels has sufficient minimum contact with the state
of Arizona to justify the court’s use of the long arm statute.
26. Dan went to Doctor to have an x-ray. Dan did not sign a written contract, and Dan
and Doctor did not make an oral agreement regarding the x-ray. When Doctor billed Dan $500 for the x-ray,
Dan refused to pay. Doctor sued Dan to
recover the $500. Which of the following is true about Doctor’s lawsuit?
a)
Doctor can recover under the quasi-contract theory of promissory
estoppel.
b)
Doctor can recover under an implied contract theory.
c)
Doctor cannot recover because there was no express contract.
d)
Doctor cannot recover because Dan did not give consideration for the
bargain.
27. Under the UCC, Section 2-207 (the
“battle of the forms” provision), it is provided that, when both
parties to a contract are merchants, any additional terms added in the
acceptance of a standard form contract can properly, validly become part of the
contractual agreement UNLESS:
a)
The
original offer expressly limits any acceptance only to the terms in the
original standard form offer.
b)
The
additional terms in the acceptance materially alter the terms of the original
standard form offer.
c)
The
offeror notified the offeree, within a reasonable period of time, that the
additional terms were not acceptable.
d)
All
of the above could be true.
28. If Earl, a nonmerchant, offered to sell a
chair to Isaac, a nonmerchant. Earl’s
house caught fire and destroyed the chair before Isaac accepted Earl’s offer to
buy the chair. Consequently,
a)
The destruction of the chair constitutes an automatic valid revocation
of the offer.
b)
The fire does not automatically revoke the offer, but because neither
Earl nor Isaac is a merchant, the offer is revocable at any time at Earl’s
option.
c)
Earl did not validly communicate a revocation to Isaac, so Isaac still
has the option of accepting Earl’s offer; if Isaac accepts the offer, Earl must
obtain a similar chair for Isaac or pay Isaac the equivalent value of the
chair.
d)
Earl’s offer is automatically revoked by the fire, unless the offer was
a firm offer.

29.
Reg offered to sell his motorcycle to Thelma for $8,000. Thelma replied, “Your price is too
high. I will purchase your motorcycle
for $7,000”. Reg agreed and they
committed their agreement to writing.
This transaction can be characterized as:

a)
An
enforceable contract because Reg’s acceptance of Thelma’s offer was a clearly
communicated acceptance.
b)
An enforceable contract because Thelma’s
counteroffer was less than Reg’s original offer
c)
An unenforceable contract because Thelma’s
offer was not the mirror image of Reg’s original offer as is required under
common law contract rules.
d)
An
unenforceable contract unless either Reg or Thelma is a merchant, as defined by
the UCC, because sale of personal property contracts are valid only if one of
the parties to the contract is a merchant.
30. A ordered
100 19-inch color TV sets from B, and requested prompt shipment of the
goods. B promptly shipped to A 100
21-inch color TV sets. Prior to
shipment, B did not notify A that he was shipping nonconforming TVs as an
accommodation. Assuming both A and B are
merchants, under UCC rules, in this case:
a)
There is no valid acceptance by B; shipping nonconforming goods acts as
a counteroffer, and thus, cannot constitute an acceptance or create a valid,
enforceable contract.
b) Although B
shipped nonconforming TVs, A is bound to pay the reasonable value of the
21-inch nonconforming TV sets because B’s shipment constituted a valid
acceptance, and a binding contract was formed at the time the goods were
shipped.
c) Although B shipped nonconforming
TVs, if A accepts and later sells the 21-inch TVs, A has validly accepted the
nonconforming goods and is bound to pay B reasonable value for the 21-inch TVs.

d)
There is no contract because B’s acceptance (by shipping the goods) is
not a mirror image of A’s offer.
31. B & B Tape Co. orally agreed to sell
2,000 boxes of tape to Office Supply, Inc. (Office) at a rate of $1.00 per box,
for a total of $2,000. Office orally
agreed to the deal. B & B delivered
1,000 boxes, totaling $1,000. Office
accepted the delivery and used and sold the tape, but refused to pay for the
goods, citing the Statute of Frauds.
Under these circumstances, Office is obligated to pay:
a)
Nothing, and may keep the tape because the agreement is unenforceable
because it was not written.
b)
$1,000 for the 1,000 boxes that Office accepted, but is not obligated to
accept, or pay for, any more tapes.
c)
$2,000 as Office is bound to buy the entire 2,000 boxes of tape.
d)
$1,000 for the 1,000 boxes that Office already accepted, plus $500 for
one-half of the remaining 1,000 boxes.
32. Employer promised to pay Employee a $10,000
annual pension for the remainder of Employee’s life, upon Employee’s
retirement. In return, Employee promised
to pay Employer $100 per year for each of the years he works until
retirement. Employee relied on this
promise and took out a mortgage on a retirement house. Three years later, Employer refused to honor
his promise to pay Employee the $10,000 annual pension. Employer’s promise probably is:
a.
Not
binding unless the agreement was in writing; such an agreement is subject to
the Statute of Frauds because it is a contract that cannot possibly be
performed within 1 year.
b.
Not
binding because the $100 per year given by Employee is inadequate consideration
compared to $10,000 annual pension to be paid by Employer.
c.
Not
binding because the pension was to be paid in the future, thus, there was no
present intent to be bound that is necessary for a valid contract.
d.
Is
binding, under the circumstances, if all the other elements of a contract are
present.
33. Someone who
recovers damages for breach of contract typically can recover:
a)
Only those compensatory damages/losses that can be proven with
reasonable certainty.
b)
For all consequences of the breach, e.g., pain and suffering, whether or
not the damages are foreseeable.
c)
Only for foreseeable damages.
d)
Punitive damages.
34. A orally offered to sell B 100 premium-grade
blue ink ballpoint pens, but neglected to state the price. B accepted via letter. A received the acceptance letter, but
immediately thereafter, A tried to get out of the deal. Assume that A and B are both merchants, as
defined under the UCC. At this point
which of the following is most likely to be true about this agreement between A
and B?
a)
There is no valid contract because the offer is too indefinite.
b)
There is no valid contract because any offer for the sale of goods must
be in writing and signed by both parties.
c)
There is a valid, enforceable contract.
d)
There is a valid, enforceable contract only if either A or B are engaged
in international business which makes the agreement subject to CISG (Contract
for International Sale of Goods) rules.
35. Leon, a bank vice president, joined Fitness
Center, Inc. (FC). He signed a contract
stating, among other things, an exculpatory clause that FC…
“shall not be liable for any
claim, demand, cause of action of any kind whatsoever for, or on account of
death, personal injury, property damage or loss of any kind resulting from or
related to Member’s use of facilities or participation in any sport, exercise
or activity within the club premises…”
Leon sustained head injuries when a
treadmill on which he was walking collapsed at FC. Leon sued FC for his injuries. The court most likely will rule:
a)
In favor of Leon because the exculpatory
clause is against public policy.
b)
In favor of Leon because the exculpatory
clause is too broad in scope.
c)
In favor of FC because the exculpatory clause
is not unconscionable under the circumstances.
d)
In favor of FC because it had a valid
enforceable contract with Leon as Leon knowingly signed the contract.
36. Supermarket offered to buy 1000 boxes of
yogurt from Foods Co. The offer did not
state a specific delivery date. 9 weeks
later, Supermarket still had not heard from Foods, nor had Foods shipped the
goods. At this point, Supermarket:
a)
Can do nothing but wait to hear an acceptance or rejection from Foods
before Supermarket can revoke the offer.
b) Can assume that Foods does not
intend to accept the contract and is free to buy to yogurt from another
supplier.
c)
Must accept the goods when they arrive, unless Supermarket has
relocated.
d)
Must accept the goods when they arrive unless Foods has clearly rejected
the offer.
37. Ed and Nora signed a contract that included a
statement, “No evidence of oral negotiations may be used to change the terms of
this contractual writing.” Later Ed sued
Nora for a breach of contract. In court,
Nora testified that she did not breach their agreement because, after signing
the written contract, she and Ed orally agreed to change the contract terms. Nora’s testimony will:
a)
Be admitted by the court as evidence that Nora did not breach the
contract.
b)
Be admitted as a valid exception under the Parol Evidence Rule.
c)
Be admitted if Nora is a minor because the Parol Evidence Rule does not
apply to contracts with minors.
d)
Not be admitted under the Parol Evidence Rule.

38.
A city ordinance permits street vendors to operate only within certain
commercial areas of the city to prevent dangerous traffic congestion. The street vendors sued the city claiming
that the restrictions were a violation of their equal protection rights as
other businesses are not restricted to operating only in certain commercial
areas within the city.
How would you classify the ordinance?

a.
Constitutional;
because the city has a justifiable purpose in enacting the ordinance, it does
not violate the equal protection rights of street vendors.
b.
Constitutional;
because street vendors are private businesses, they are not protected by the
equal protection clause of the 14th Amendment.
c.
Unconstitutional;
the ordinance unduly discriminates against street vendors as compared to other
business owners and thus, violates the vendors’ equal protection rights.
d.
Unconstitutional;
privately owned vendors, unlike public businesses, have a constitutional right
to conduct business in any commercial area of their choice.
39. Charlie Customer bought an airline ticket on
BartAir through Tina Travel Agent.
Identify the
legal relationship of Charlie, BartAir and Tina regarding this transaction.
a)
Charlie is the principal; Tina is his agent
representing him with BartAir.
b)
BartAir
is the principal; Tina is its agent in the sale of the airline ticket to
Charlie.
c)
Tina is not the agent of BartAir or Charlie,
but Tina’s employer, the travel agency, is the agent for Charlie.
d)
Tina is the agent for both BartAir and
Charlie.

40 Danny and Marion Klein were injured when an
aerial shell at a public fireworks exhibit went astray and exploded near them.
They sued Pyrodyne Corp., the pyrotechnic company that was hired to set up and
discharged the fireworks, alleging, among other things, that the company should
be strictly liable for damages caused by the fireworks display. Will the court
agree with the Kleins?
a.
Yes,
because any time a person ignites aerial shells with the intention of sending
them aloft to explode in the presence of large crowds knows that injuries can
occur.
b.
Yes,
because no matter how much care pyro technicians exercise they cannot eliminate
the high risk inherent in setting off powerful explosives such as fireworks
near crowds.
c.
No,
because anyone who attends a fireworks display assumes the risk for the
potential of injury that may occur.
d.
No,
because all six of the factors needed to prove strict liability was not
present.
41 Blue Cross and Blue Shield insurance
companies (the Blues) provide 68 million Americans with health-care
financing. The Blues have paid billions of dollars for care attributable
to illnesses related to tobacco use. In an attempt to recover some of this
amount, the Blues filed a suit in
federal district court against tobacco companies and others, alleging
fraudulent misrepresentation, and negligence among other things. The Blues
claimed that beginning in 1953, the defendants conspired to addict millions of
Americans, including members of Blue Cross Plans, to cigarettes and other tobacco products. The
conspiracy involved misrepresentation about the safety of nicotine and its
addictive properties, marketing efforts targeting children, and agreements not
to produce or market safer cigarettes. The defendants’ success caused
lung, throat, and other cancers, as
well as heart disease, stroke, emphysema, and other illnesses. The
defendants asked the court to dismiss the case on the grounds that the
plaintiffs did not have the standing to sue. Do the Blues have standing to sue?

A No, because the any injury to the
plaintiffs was indirect and too remote to permit them to recover.
B No, because Blue’s injuries would be
derivative of the smokers personal injuries and thus be impossible to separate
from the smokers injuries.
C Yes, because the injuries and damages asked
for from Blue were different than those suffered by smokers, in that they are
asking to recover for monies expended in medical claims, and thus could be the
basis of a case for the court to determine.
D Yes, because Blues argue that the cigarette
industry involved them in a conspiracy to addict smokers and thus there
injuries were foreseeable and directly related attributable to the defendants
behavior.

42 The
First Amendment protects Marco and others from
a Dissemination of obscene materials and
speech that harms their good reputations or violates state criminal laws.
b
Dissemination of obscene materials only.
c
Speech that harms their good reputations or violates state criminal laws
only.
d
Neither dissemination of obscene materials nor speech that harms their
good reputations or violates state criminal laws.

43. You see a spot in the market for a video
game outlet. You open “GameBox” to profit from local sales, rentals, and
exchanges. Hott Games Company promises to ship you a certain assortment of
games and gear for your grand opening. Despite the contract, Hott does not ship
as agreed, and your opener is a bust,
costing you a lot of money. Which remedies are available to you?
a. Money damages
b Specific performance
c Cancellation of the contract
d All of the above

44. Three –year- old Randy Welch climbed up to a
shelf and picked up a disposable butane cigarette lighter. Randy then used
the lighter to ignite a flame, which set fire to his pajama top. W

ANSWER:

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