Business Law Fall 2007 Final Professor Steven Isler December 19, 2007 Exam Instructions: Version A

Place only your Student ID Number on your Scantron not your name. Five points will be deducted if your name or Social Security Number is placed on your Scantron. Indicate test "A" or "B" on your Scantron. There are 100 questions on this exam some of which are attendance questions and you have eighty minutes to complete it. This exam will make up forty-five percent of your overall grade and will end promptly at 9:30. In the True/False section indicate whether the sentence or statement is true (A) or false (B). In the multiple choice section identify the letter of the choice that best completes the statement or answers the question. The exam, exam answers and exam scores will be posted by 8:00 tonight. I would suggest that you write your answers on your exam and Scantron. You will be allowed to keep the exam. Electronic devices, including anything with an on/off switch, are not to be allowed. Pencils Down means just that! Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. Roy contracts to sell his Double-R Ranch to Sam on May 1. On April 20, Roy tells Sam that he will not go through with the deal. Sam files a suit against Roy. Sam can recover a the cost of any ranch that would suit him. . b the cost of a similar, nearby ranch. . c the Double-R Ranch. . d Nothing. .

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2. Who sang Oh Honey? a The Tramps . b The Assignments .

c . d .

Delegation The Mens Rea Band

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3. East Harlem Pizza is operated as a partnership. For tax purposes, East Harlem Pizza a is a tax-paying entity. . b is required to file an information return but is not a tax-paying entity. . c pays 1/2 of the taxes if there are two partners. . d pays 1/4 of the taxes if there are three partners. .

e pays a lot of dough and makes some bad assed barbeque pizza .

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4. Jill Onthetop and Karl Likembig contract for the sale of Jill's horse for $1,000. Unknown to either party, the horse has died. Karl is a entitled to another horse of equivalent value. . b not required to pay due to the mutual mistake. . c not required to pay due to the unilateral mistake. . d Required to pay because she assumed the risk the horse might die. . 5. Ira and Jill can discharge their contract through novation. This requires a an agreement by all of the parties to a new contract. . b an express discharge of the contract. . c performance of all of the terms by all of the parties. . d performance of all of the terms by only one of the parties. .

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6. Brian Pumper and Eve enter into an oral contract for Brian Pumpers sale to Eve of eight DVD players for $100 each. After Eve takes possession of the players, but before she makes payment, this contract 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. .

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7. Rakim and Soulja Boy orally agree to several different contracts. The Statute of Frauds will bar enforcement of an oral contract for a a deal that will be performed within a year. . b a primary obligation. . c a sale of goods for $100. . d a sale of land. .

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8. Like all corporations, Standard Domestic Corporation issues a bonds. . b bonds and stock. . c neither bonds nor stock. . d stock. .

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9. Doweed Rollemtite makes a contract with Sue Swisher that indirectly benefits Tim Sweet, although neither Doweed nor Sue intended that result. Tim is a a delegatee. . b an assignee. . c an incidental beneficiary. . d none of the above. .

____ 10. Wilma contracts to repair a computer for Fred for $100. If Wilma does not perform, Fred must pay a $100. . b $50. . c $10. . d $0. .

____ 11. Professor Isler enters into a contract to act in a movie with Angelina Jolie. The professor has always wanted to perform a love scene and do the nasty with Angelina. Angelina is concerned that if she does the love scene with the Professor (notorious for doing strange things in his big black truck) that there would be so much suction that the popping sound would cause an Earthquake in San Francisco. Angelina decides to delegate her duties under the contract. May Angelina delegate her duties? a Yes . b Yes if the delegate agrees . c . d . No No, if the Professor considers the contract personal in nature

____ 12. Professor Isler enters into a contract to act in a movie with Angelina Jolie. The professor has always wanted to perform a love scene and do the nasty with Angelina. Angelina is concerned that if she does the love scene with the Professor (notorious for doing strange things in his big black truck) that there would be so much suction that the popping sound would cause an Earthquake in San Francisco. Angelina decides to delegate her duties under the contract. In the class example who did Angelina delegate her duties to? a Eve c Eva Mendes . . b Big Bootie Betty d Paris Hilton . .

____ 13. Paul signs a lease that provides that any change in the zoning law will result in an automatic termination of the lease. The zoning board adopts a new zoning classification before the lease expires. The change in zoning satisfies the a condition precedent. . b concurrent condition. . c condition subsequent. . d illegal condition. .

____ 14. Amy wants to go into the business of construction contracting. Among the reasons that would probably convince Amy to set up her business as a sole proprietorship would be a its greater organizational flexibility. . b its limited liability. . c its perpetual existence. . d the ease of transferring the business to other family members. .

____ 15. A-Plus Properties, Inc., sells a city block to Business Park Corporation, subject to a limitation on the height of any building built on the property and a declaration that Business Park's successors are bound to this limit. This is a adverse possession. . b an easement. . c a restrictive covenant. .

d . ____ 16. If a . b .

a special warranty deed. Professor Isler is riding in his truck what kind of truck is he driving? A Medium One c One that is Three Way Black . A Little One d A Lexus .

____ 17. Edie agrees to pay a debt to Financial Credit, Inc., which is otherwise dischargeable in bankruptcy. This is a a justification. . b a novation. . c a reaffirmation. . d a rejection. .

____ 18. Shaniqua and Shanice sign a contract that states, "No evidence of prior oral or written negotiations may be used to change the terms of this writing." This is a the doctrine of promissory estoppel. . b the "main purpose" exception. . c the parol evidence rule. . d the Statute of Frauds. .

____ 19. The abbreviation "P.C." in the name "Quality Dental, P.C." means that this organization is a a private corporation. . b a professional corporation. . c a public corporation. . d a publicly administered corporation. .

____ 20. In what town did Professor Isler buy a house for his mother? a Oakland c New York . . b Wilson d Orangeburg

____ 21. City Construction Corporation substantially performs its contract with Downtown Apartments, Inc. Downtown is entitled to a damages. . b nothing. . c specific performance. . d substitute performance. . ____ 22. International Business, Inc. (IBI), agrees to assume a debt of Southern Export Company to First National Bank. This promise is for the benefit of IBI. To be enforceable, the promise must be in writing if the debt is for a $50. . b $500. . c $5,000. . d none of the above. . ____ 23. The greatest basketball player of all time is a Magic Johnson c Kobe Bryant . . b Michael Jordan d Larry Bird . .

____ 24. Who is married to Elvis Costello? a Iman . b Diana Krall .

c . d .

Jill Curtain Lynn Edwards

____ 25. According to Professor Isler, The Boston a are world champions c . . b will win the World Series in 2008 d . .

Red Sox: the most deserving champions in decades Suck!

____ 26. Dilated Peoples Engineers, Inc., (DPE) needs a drill to continue its operations and orders one for $3,000 from Wedigdeep Mining Supplies Company. DPE tells Wedigdeep that it must receive the drill by Tuesday or it will lose $10,000. Wedigdeep ships the drill late. DPE can recover a $13,000. . b $10,000. . c $3,000. . d $0. .

____ 27. Gravedigga Jones borrows $1,000 from First State Bank. Beanie Sigel orally promises First State that he will repay the loan if Gravedigga does not. Beanie Sigel does not get any personal benefit for the promise. Beanie Sigels 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. .

____ 28. With respect to Ice Cube's land, Ice Tea has an easement, Vanilla Ice has a profit, and Ice Maker has a license. A right to possess the land is owned by: a Ice Cube, Ice Tea, and Vanilla Ice only. . b Ice Cube and Ice Maker only. . c Ice Cube only. . d Ice Tea, Vanilla Ice, and Ice Maker only. . e Ice my ass! Professor Isler this is not funny! .

____ 29. Professor Islers favorite rap artist is a Notorious B.I.G. c . . b Ice Cube d . .

Snoop Dogg 2Pac

____ 30. International Sales Corporation (ISC) claims to be a corporation, but it is not. Joy signs a contract that ISC does not perform. Joy files a suit against ISC. The court will likely hold that ISC is a a corporation by estoppel. . b a de facto corporation. . c a de jure corporation. . d an ultra vires corporation. .

____ 31. Opal conveys three acres of wetlands to Pristine Places, Inc., with a deed that warrants only that Opal held good title during her ownership of the property. This deed is a a grant deed. . b a quitclaim deed. . c a special warranty deed. . d a warranty deed. .

____ 32. Greetings from Professor Isler. I really enjoyed this class. With respect to the Ice question on this exam, did you: a Like the Ice Question c Decide to withdraw from my . . future classes b Wish that you could shove that d know that the answer to the ice . ice...... . question is c. and the answer to this one is D? No kidding! See I have a sense of humor! Gotcha!

____ 33. Great Hardware Store agrees to hire Holly for one year at a salary of $500 per week. When Great cancels the contract, Holly spends $100 to obtain a similar job that pays $450 per week for a year. Holly is entitled to recover a the amount of the wages that Great promised only. . b the difference between the wages at the two jobs only. . c the difference between the wages at the two jobs plus $100. . d $100 only. .

____ 34. Professor Isler enters into a contract to act in a movie with Angelina Jolie. The professor has always wanted to perform a love scene and do the nasty with Angelina. Angelina is concerned that if she does the love scene with the Professor (who is notorious for doing strange things in his big black truck) that there would be so much suction that the popping sound would cause an Earthquake in San Francisco. Angelina decides to delegate her duties under the contract. In the class example who else did Angelina delegate her duties to? a Celione Dion c Sarah Jessica Parker . . b Sharika Givealot d All of the Pussycat Dolls . .

____ 35. To acquire the ownership of a mountain cabin by adverse possession, Cody must occupy the cabin exclusively, continuously, and peaceably for a specified period of time a in an, open, hostile, and adverse manner. . b until the owner files a suit. . c without the owner's knowledge. . d with the state's permission. .

Fact Pattern 14-1 Nano Corporation offers to sell a robotic device to Opal Assembly, Inc., but mistakenly transposes some of the digits in the price so that $15,400 appears in the offer as $14,500. Opal accepts the written offer. ____ 36. Refer to Fact Pattern 14-1. Opal's best argument in favor of enforcement of the contract is that a a bilateral mistake does not afford relief from a contract. . b a mistake of value does not afford relief from a contract. . c a unilateral mistake does not afford relief from a contract. . d the price was below the prices of comparable devices. .

____ 37. Refer to Fact Pattern 14-1. Nano's best defense against enforcement of the contract is that Opal knew a a bilateral mistake supports the cancellation of a contract. . b a mistake of value supports the cancellation of a contract. .

c a unilateral mistake supports the cancellation of a contract. . d the price was below the prices of comparable devices. .

____ 38. Earl holds 1,000 pounds of perishable fruit in storage for Fresh Food Corporation. Fresh Food does not pay for the storage. Earl sells the fruit to Green Grocery Stores, Inc. This sale represents a a breach of contract. . b a mitigation of damages. . c rescission and restitution. . d specific performance. . ____ 39. The tax return that a partnership files is called form: a 1120S . b SS-4 . c 1065 . d Schedule C . ____ 40. Timber Products Company (TPC) has a right to remove from the property of Union Lumber Company all of the sawdust that TPC can use. This right is a a leasehold estate. . b a license. . c an easement. . d a profit. .

____ 41. Professor Isler is a director of Playaz Inc.. The Professor insists that he doesnt want a player any more. In fact the Professor normally walks around singing I dont want to be a playa no more Im not a player I just...............) Well anyway, with respect to Playaz Inc., The Professors most important right is the right of a compensation.

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. b indemnification. . c participation. . d service. .

____ 42. Jack contracts to provide lawn-mowing services to Lee. Jack cannot delegate this duty a because it is a personal service contract. . b without continuing to be liable. . c without Lee's consent. . d without providing lawn-mowing services to Kim. .

____ 43. Owen, a famous chef, sells to Pat a restaurant called Quasimoto that Owen closed years ago. Pat discovers in the restaurant a collection of Owen's recipes, which are considered valuable. In a suit to obtain the recipes, Owen will likely a not prevail because he should have known that the recipes were in the . restaurant. b not prevail because the sale of a restaurant includes everything in it. . c prevail because there was no mutual assent. . d prevail because the sale of a restaurant includes nothing in it. .

____ 44. Eve is a director of Fine Stuff Corporation. Without informing Fine, Eve goes into business with Great Things, Inc., in competition with Fine. Eve is liable for breach of a no duty or rule . b the business judgment rule. . c the duty of care. . d the duty of loyalty. .

____ 45. If Professor Isler shot a robber in the ass what type of gun would he use? a An M-16 c A gloc . . b A 357 automag d Dammit I missed too many

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classes.

____ 46. Wu-Tang Company, a subcontractor, understates its bid on a project for Mos Def, the general contractor, due to an addition error. Wu-Tang can most likely a recover damages from Mos Def for not catching the error. . b require Mos Def to pay the difference between the bid and the true . cost. c rescind the contract. . d none of the above. .

____ 47. Who sang The Tracks of My Tears? a Luther Vandross c . . b The Temptations d . .

William Smokey Robinson Michael Jackson

____ 48. Professor Isler currently dates Dumey Somore but is cheating on her. He has been known to be out late at night with Nicole Scherzinger, the lead singer of the Pussycat Dolls. The word on the street is that she thinks that she pushes the Professors buttons. Anyway, the Professor decided to be straight with Dumey and he decided to leave Nicole. Nicole was distraught so the professor comforted her by saying: To make you feel better, I will give you my house Blackacre as long as Somore continues to do me while she is alive. What did the Professor give Nicole? a A fee simple . b A life estate per autre vie . c . d . A profit An easement

____ 49. Pete possesses a parcel of land. Pete has the right to use the property, including extracting gold from the land through an existing mine, for life. Pete also has the right to lease the land for a period not to exceed his life. This ownership interest is a a fee simple absolute. . b a leasehold estate. . c a life estate. .

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d the power of eminent domain. .

____ 50. Paul makes an honest but erroneous statement that misrepresents a material fact in a contractual transaction with Quinn. Paul is guilty of a a unilateral mistake. . b duress. . c fraud. . d nonfraudulent misrepresentation. .

True/False Indicate whether the sentence or statement is true (a) or false (b). ____ 51. General partnerships and limited partnerships receive the same treatment under the law. ____ 52. Courts generally do not grant specific performance of personal service contracts. ____ 53. An automobile dealership is an example of a distributorship type of franchise. ____ 54. A party normally satisfies its duties under a contract by actual performance. ____ 55. If a contract requires performance to the personal satisfaction of a party, the party to be satisfied must act honestly and in good faith. ____ 56. A foreign corporation is a corporation formed without a profit-making purpose. ____ 57. Professor Islers father was a minister ____ 58. Eminent domain refers to the ultimate right of an owner in fee simple absolute to transfer the property by will to whomever he or she wishes. ____ 59. One of the elements of fraudulent misrepresentation is intent to deceive. ____ 60. The injury suffered by a nonbreaching party due to the breach of a contract may be remedied by payment of compensatory damages.

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____ 61. A periodic tenancy is created when a landlord rents his or her property to a tenant "for as long as both shall agree." ____ 62. Nominal damages usually involve very small amounts. ____ 63. Easements and profits are nonpossessory interests in land. ____ 64. Complete performance occurs when conditions in a contract are fully satisfied. ____ 65. A seller's failure to volunteer certain material information about a product for sale will never give rise to an action for fraud. ____ 66. A mistake in value will usually enable a party to a contract to avoid it. ____ 67. A promise to perform subject to being able to obtain financing is an example of a condition precedent. ____ 68. Consequential damages are foreseeable damages that arise from a party's breach of a contract. ____ 69. Privity of contract refers to the fact that only the actual parties to a contract should have rights and liabilities under the contract. ____ 70. Liquidated damage clauses typically require a party who breaches a contract to pay a certain amount to the nonbreaching party. ____ 71. A party to a contract may not transfer the rights arising from the contract to another. ____ 72. A contract must be in writing to be enforceable if the contract makes performance within one year possible. ____ 73. There are no federal laws governing franchises. ____ 74. Normally, when a nonbreaching party has been damaged by a breach of contract, he or she has a duty to mitigate those damages. ____ 75. Contract law governs franchise relationships. ____ 76. Performance under a contract may be conditioned on the occurrence of a certain event. ____ 77. A contract is termed an adhesion contract when both parties adhere to it. ____ 78. A retail business can assign its right to receive payment from customers to a financing company for cash. ____ 79. Bylaws generally include the operating rules of a corporation. ____ 80. Subjective impossibility discharges a contract.

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____ 81. To challenge a ruling in a bankruptcy proceeding, a party must appeal to the highest state court in the state in which the bankruptcy court is located. ____ 82. To acquire the ownership of a mountain cabin by adverse possession, Cody must occupy the cabin exclusively, continuously, and with hostility for a specified period of time. By hostility we mean that Cody can bust a cap in a trespassers ass to protect his land. ____ 83. One of the elements of fraudulent misrepresentation is the innocent party's reliance on the misrepresentation. ____ 84. In a limited partnership, the liability of a general partner is limited to the amount of capital he or she has invested in the partnership. ____ 85. Professor Islers father was a boxer ____ 86. In a contract for a sale of land, the usual remedy is specific performance. ____ 87. Assignments of negotiable instruments are not generally permitted. ____ 88. A profit is a right to go onto land in the possession of another and take away some part of the land or some product of the land. ____ 89. Partners are subject to liability for partnership obligations only if they participate in the management of the partnership. ____ 90. Bankruptcy proceedings are held in state bankruptcy courts. ____ 91. Undue influence will typically arise in situations in which there is a fiduciary relationship between the parties. ____ 92. A seller's failure to volunteer certain pertinent information about a product for sale will never give rise to an action for fraud. ____ 93. A breach of contract entitles the breaching party to sue for damages. ____ 94. All student loans are dischargeable in bankruptcy. ____ 95. A contract entered into under duress is voidable. ____ 96. A life insurance contract is a third party beneficiary contract involving a donee beneficiary. ____ 97. A warranty deed provides the most protection against defects of title. ____ 98. The Statute of Frauds requires that fraud must be proved by a writing.

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____ 99. A sole proprietorship's income is taxed as the firm's profits, not as the owner's personal income. ____100. Corporate officers select the corporate directors.

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Business Law Fall 2007 Final Answer Section MULTIPLE CHOICE 1. ANS: C 2. ANS: C 3. ANS: B 4. ANS: B 5. ANS: A 6. ANS: C 7. ANS: D 8. ANS: D 9. ANS: C 10. ANS: D 11. ANS: D 12. ANS: C 13. ANS: C 14. ANS: A 15. ANS: C 16. ANS: C 17. ANS: C 18. ANS: C 19. ANS: B 20. ANS: B 21. ANS: A 22. ANS: D

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23. ANS: D 24. ANS: B 25. ANS: D 26. ANS: B 27. ANS: D 28. ANS: C 29. ANS: C 30. ANS: A 31. ANS: C 32. ANS: D 33. ANS: C 34. ANS: C 35. ANS: A 36. ANS: C 37. ANS: D 38. ANS: B 39. ANS: C 40. ANS: D 41. ANS: C 42. ANS: B 43. ANS: C 44. ANS: D 45. ANS: B 46. ANS: C

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47. ANS: C 48. ANS: A 49. ANS: C 50. ANS: D TRUE/FALSE 51. ANS: F 52. ANS: T 53. ANS: T 54. ANS: T 55. ANS: T 56. ANS: F 57. ANS: T 58. ANS: F 59. ANS: T 60. ANS: T 61. ANS: F 62. ANS: T 63. ANS: T 64. ANS: T 65. ANS: F 66. ANS: F 67. ANS: T 68. ANS: T 69. ANS: T

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70. ANS: T 71. ANS: F 72. ANS: F 73. ANS: F 74. ANS: T 75. ANS: T 76. ANS: T 77. ANS: F 78. ANS: T 79. ANS: T 80. ANS: F 81. ANS: F 82. ANS: F 83. ANS: T 84. ANS: F 85. ANS: T 86. ANS: T 87. ANS: F 88. ANS: T 89. ANS: F 90. ANS: F 91. ANS: T 92. ANS: F 93. ANS: F

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94. ANS: F 95. ANS: T 96. ANS: T 97. ANS: T 98. ANS: F 99. ANS: F 100. ANS: F

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