– The Undergraduate School
Business and Professional Programs
BMGT 380 – Final Exam – Fall 2017
GOOD LUCK!!
Exam
Instructions:
Open book exam: may use
textbook, class notes/lectures, class conferences (do not use the internet as
many legal sources are inaccurate; you do not need any material other than the
textbook, class notes/lectures, class conferences to complete the exam).
No time limit on exam.
Submit exam preferably
in word doc to assignment folder under “Final Exam”. ALLOW EXTRA TIME
TO POST PROPERLY. YOU ARE ENTIRELY RESPONSIBLE FOR CHECKING THAT EXAM POSTS
PROPERLY AND THAT YOU POSTED THE CORRECT FILE. THE EXAM MUST BE POSTED BY
SATURDAY AT 11:59 PM. NO LATE EXAMS WILL BE ACCEPTED!
The exam is worth a
total of 100 points.
Section
I. Multiple Choice: 30 questions/60 points
USE
THE ANSWER SHEET included
at the bottom of this page for answers; copy and paste it as is, no changes,
please. Please do not copy Multiple Choice questions to the answer
sheet.
Put
letter of correct answer on the answer sheet at the bottom of this page.There is only one correct answer to each
question.
Each question is worth 2
points.
This is an
application-oriented exam; you will not find the answer to questions verbatim
in the text. If you believe a question is not covered in any of the
assigned materials, you have missed the issue and need to re-think.
1. Farmer grows grain on his farm in Nebraska
for feed for the chickens that he raises on that same farm. He later sells the chickens to meat packing
companies within the state of Nebraska. The production of grain on the farm:
A.
Affects interstate commerce and, therefore, can be subject to federal regulation.
B.
Only indirectly affects interstate commerce and, therefore, can be
subject to state, but not federal, regulation.
C.
Only indirectly affects interstate commerce, and thus is not subject to
federal regulation under the commerce clause.
D.
Directly affects intrastate commerce, but more indirectly affects interstate
commerce and, therefore, can be subject to federal regulation under the
commerce clause.
2. Which of the following would typically take place in an
appellate court?
A.
Direct examination of witnesses by attorneys.
B.
Choosing a jury.
C.
Testimony of witnesses.
D.
None of the above.
3. Larry, an Oregonresident, inherited land in
Missouri. Through a Missouri attorney,
Larry sold the land to Will, a Missouri resident, under a valid written sales
contract. Larry later refused to go
through with the sales deal, so Will sued Larry in a Missouri court.
Larry
claimed the Missouri court had no jurisdiction over him because has never been
in Missouri or had any other contacts with Missouri. Assume that the Missouri court has subject
matter jurisdiction in this case. Does
the Missouri court otherwise have jurisdiction to hear this case?
A.
No, because there is diversity of citizenship in the case, only a
federal court has jurisdiction to hear the case.
B.
Yes, because the Missouri court can claim in rem (property)
jurisdiction over Larry in this case as the owner/seller of the Missouri
property.
C.
Yes, because the Statute of Frauds applies to the sale of land, and the
contract was written, the Missouri court has personal jurisdiction over Will,
and Larry.
D.
No, because although the Missouri court has property jurisdiction over Will,
the court does not have the necessary property jurisdiction over Larry in this
case.
4. Jonah hired Marty, who is 16 years old, as
his agent to buy up to a maximum of 50 used Dell 101 model laptops at a price
of $200 each, or less. Marty bought 30
used Dell 101 model laptops for $100-200 using a written contract. Jonah was pleased with the laptops and
accepted the contract and paid for the 20 laptops.
Marty then bought 25
more Dell 101 model laptops for $150 each on Jonah’s behalf. Marty signed a written contract for the
purchase of these 25 laptops with the seller, Used Tech, Inc. Jonah refused to accept and pay for these 25
laptops. What reason would justify Jonah’s refusal to pay for the laptops and
honor the contract with Used Tech, Inc.?
A. The contract with Used
Tech is illegal because Marty is a minor.
B.
There is no
justification, the contract with Used Tech is valid because Marty signed a
contract with Used Tech for the purchase of the 25 laptops.
C.
The contract with Used
Tech for the 25 laptops is voidable because Marty acted outside the scope of
the agency agreement with Jonah.
D.
This contract is
voidable under the UCC because Marty is not a merchant.
5. Mimi took her granddaughter to Roller Coaster
World theme park often to ride the Thriller Diller roller coaster. The roller coaster is in a fenced, gated
area. Customers pay for the ride as they
board the Thriller Diller, or at the end of the ride as they leaved the gated
area.
On Saturday, Mimi and
her granddaughter boarded the Thriller Diller, and waved at the attendant as
the ride began. At the end of the ride,
Mimi refused to pay for the ride.
The most likely
conclusion is that:
A.
Mimi’s actions implied
that she intended to pay for the ride; she is legally bound to pay for the
ride.
B.
Mimi’s actions implied
that she intended to pay for the ride, but she is not legally bound to pay as
there was no written agreement, or evidence of an agreement, such as a ticket
for the ride.
C.
Applying the subjective
intent test, Mimi is not bound to pay for the ride because she and the
attendant did not discuss the need for paying for a ticket for the ride.
D.
Applying the objective
test, there was no clearly communicated offer and acceptance, thus no
enforceable contract; Mimi is not bound to pay for the ride.
6. Sandy orally agreed to sell Rolf her house for
$400,000.00. Rolf gave Sandy a check for $10,000.00 as deposit on the
house. They agreed to complete the sale on
a specific day in 3 weeks when Rolf would pay Sandy the remaining $390,000.00
and Sandy would give the deed for the house to Rolf.
2 weeks later Sandy went
to Rolf’s home, returned his $10,000.00 check, and told Rolf she had changed
her mind about selling her house.
Rolf believes they had a
binding sales contract and that Sandy must sell him the house because he gave
Sandy a deposit for the purchase of the house.
Sandy believes she and Rolf did not have a binding contract.
What would you conclude
about the agreement between Sandy and Rolf?
A.
Sandy and Rolf had a
binding contract; both agreed to the sale and oral contracts can be
enforceable.
B.
Sandy and Rolf had a binding contract because
Rolf gave consideration for the contract by giving Sandy the $10,000.00
deposit.
C.
Sandy and Rolf did not
have a binding contract as the contract had not been fully performed.
D.
Sandy and Rolf did not
have a binding contract; the contract needed to be written to be enforceable
under the circumstances.
7. Edgar, an independent contractor, was hired
by ABC Enterprises, Inc. (ABC) as a consultant to assist ABC in implementing a
new IT system. Edgar agreed to provide
consulting advice to ABC 10 hours per week for 6 weeks. In exchange, ABC agreed to pay Edgar $2500
per week, payable in a lump sum of $15,000 at the end of 6 weeks. Edgar and ABC had a valid written contract
including these terms.
After 4 weeks of
consulting, Edgar told ABC he needed an additional $500 per week for the
remaining 2 weeks to cover expenses. Edgar said ABC needed to pay him a total
of $16,000 for the 6 weeks of consulting.
ABC orally agreed to amend the contract and pay the additional
money.
At the end of 6 weeks,
ABC was very satisfied with Edgar’s consulting work. ABC gave Edgar a check for $15,000 for the
consulting but refused to pay the additional $1000 Edgar had requested.
Edgar claims he and ABC
had a valid contract to pay him an extra $1000, for a total of $16,000.
What is true about the
modified agreement, and the amount owed to Edgar?
A.
The modified agreement
is enforceable because both parties gave legal consideration for the new
contract terms: ABC agreed to pay an
extra $1000, Edgar agreed to continue to consult for ABC.
B.
The modified agreement
is enforceable because, under the UCC rules, all contract modifications are
valid if the parties consent.
C.
The modified agreement
is unenforceable; ABC and Edgar agreed orally to the extra $1000, but there was
no written contract covering the new contract terms.
D.
The modified agreement
is unenforceable because both parties did not give new consideration for the
contract modification contract.
8. Alternative dispute resolution (ADR) is an
important alternative for resolving civil disputes because ADR can:
A. Promote judicial efficiency.
B. Promote compromise and consensus between
parties.
C. Promote quicker resolutions to disputes.
D. All of the above.
E. Two of the above only.
9. Park Pharmaceuticals, Inc. manufactured a
headache pain relief drug that was marketed under the trade name, Free. A study by the federal Food and Drug
Administration (FDA) revealed that Free is likely to cause high blood pressure
in users. Consequently, the U.S.
Congress enacted legislation prohibiting the shipment and sale of Free in the
U.S., pending further testing by Park and the FDA. This law banning Free is probably:
A.
Constitutional because the U.S. Congress has the power to regulate
activity that directly affects interstate commerce and the ban on the sale of
Free is clearly an effort to regulate commerce of pharmaceuticals.
B.
Constitutional under the police power doctrine to protect consumers.
C.
Unconstitutional because the law violates Park’s rights under the equal
protection clause of the U.S. Constitution because the law treats Park
differently than other pharmaceutical companies.
D. Unconstitutional
because there is no conclusive evidence that Free is unsafe for consumers.
10. Wendell and Langdon signed a business
contract with a clause that provides that if a dispute arises they will 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, Wendell filed a lawsuit against Langdon. Most likely the court will:
A. Hear the lawsuit in a trial, and then compel Wendell
to submit to arbitration, if appropriate under the circumstances.
B. Hear the lawsuit because Wendell cannot be
compelled to submit to arbitration as that would be a violation of his
constitutional rights; he is entitled to a jury trial upon request.
C. Require Wendell to submit to arbitration to
resolve the dispute.
D. Require Wendell and Langdon to enter into
mediation to reach an agreement.
11. An increasing number of food trucks operate
in the city center of Washington near tourist attractions and government
offices. Sometimes the food trucks park
on the sidewalks, curbside in the streets, and in parking spaces and tourist
bus routes, thus, impeding pedestrians and interfering with vehicle
traffic. The city enacted an ordinance
that permits food trucks to operate only in designated, marked areas off
sidewalks and off streets within the city.
Several food truck
owners are upset and believe the ordinance is an unconstitutional interference
with their rights to operate private businesses. They also believe the ordinance discriminates
against them because brick and mortar businesses in the area do not have
similar restrictions.
Which of the following
statements is true about the ordinance?
A.
The ordinance unduly
discriminates against the food truck vendors as other businesses in the area
are not similarly restricted.
B.
The ordinance is a
violation of the food truck vendors’ constitutional rights to operate their
private businesses without undue interference from the government.
C.
The city can justify the
ordinance as a constitutional exercise of the right of governments to regulate
private businesses for any reason under the interstate commerce clause.
D.
The city can justify the
ordinance as a constitutional exercise of its police power to protect the
safety and welfare of the general public.
12. Computers, Inc. (Computers) and
Management Enterprises Company (Management) agreed that Computers would sell
Management its computing business, including the land on which the business was
situated, for $600,000. Both Computers and Management knew at the time the
contract was formed that the business and land were actually worth
$1,000,000. Is this a valid enforceable
sales contract?
A.
No, because Computers
would not have agreed to sell the business for 40% less than its value unless
it was under duress by Management to sell.
B.
No, because $600,000 is
not valid consideration for a business worth $1,000,000.
C.
Yes, provided the
contract was in accordance with state statutory law that permits real estate
sales for 40% or more below market value.
D.
Yes, provided the
contract was in writing, in accordance with the Statute of Frauds, and the
parties freely consented.
13. Fay was admitted as a new partner in Charmed
City Chocolates, a general partnership, in May 2017. In June, while delivering a chocolate order
to a residence, Charmed City’s delivery employee negligently crashed into the
rear of a parked car destroying a bicycle mounted on the back of the car and
damaging the rear of the car.
Which of the following
is true about liability for the employee’s negligence?
A.
Charmed City is not liable for the accident as it was the result of the
employee’s negligence.
B.
Charmed City is liable for the accident, but Fay is not liable as she
was admitted to the partnership only 1 month prior to the accident.
C. The
delivery driver is an employee-agent of Charmed City, and Charmed City is
liable for the acts of its employees.
D. The
delivery driver is an employee-agent of Charmed City, but Charmed City is not
liable for the negligent acts of its employees.
14. Accounting Temps, Inc. (Temps) has 50
employees who work in offices on two floors of Temps’ business office
building. There are no elevators in the
building. Taylor, a Temps employee for
three years, has an office on the second floor.
Following a fall, Taylor has a permanent leg injury and difficulty
walking up and down stairs. Taylor
requested to be moved to a first floor office, but Temps stated there is no
space available on the first floor and that it would be unfair to move someone
else from a first floor office because all employees on the first floor have
seniority over Taylor. Temps promised to move Taylor when a first floor office
becomes available. In the meantime,
Temps offered to have another employee help Taylor up and down the stairs to
the second floor daily.
Is Temps handling the
situation properly?
A.
Yes, Temps is required
to make reasonable accommodation for Taylor, and has done so by promising to
move Taylor to a first floor office as soon as possible, and by offering to
help Taylor on the stairs daily.
B.
Yes, Temps is required
to make “reasonable accommodation” for Taylor, but not at the inconvenience of
other employees who might have to move offices.
C.
No, Temps should immediately
move Taylor to a first floor office or find temporary first floor office space
until permanent office space is available on the first floor.
D.
No, Temps should install
an elevator to the second floor if first floor office space is available.
15. Jan went to a truck dealership
and said that she wanted to buy a truck capable of hauling a 5000-pound load,
and that she wanted the salesperson to recommend an appropriate truck. The salesperson selected a certain truck for Jan
that he stated would haul a 5000-pound load.
Jan bought the truck the salesperson selected. The truck was mechanically sound, but would
haul only a 2500-pound load. If Jan sues
the dealership, which product liability claim would provide Jan with the best
chance of winning?
A. Breach of implied warranty of fitness for a particular
purpose.
B. Breach of contract.
C. Breach of implied warranty of
merchantability.
D. Negligence, because the truck that could not
handle a 5000-pound load.
E.
All of the above.
16. Uncle promised to
buy his nephew, Dave, a new truck to use in his business. Counting on having a new truck, Dave sold his
old truck. Uncle now refuses to buy Dave
the truck. Dave needs the truck to
operate his business and to get to his business office.
Can Dave possibly enforce
the promise and require Uncle to buy the truck for him?
A. Yes, because the truck is a necessity for Dave
and all contracts for necessities are binding and enforceable for all parties
even if contract formation is flawed.
B. Yes, under promissory estoppel if Dave
reasonably relied on Uncle’s promise and sold his truck.
C. No, because Dave was not unjustly enriched
because he did not receive the truck.
D. No, because Uncle’s promise to Dave was a gift
to Dave; Dave gave consideration, but Uncle did not.
17. Assume
you are the owner of a small business, Greetings, Inc., that sells greeting
cards to retailers. Card Sensations sent
a written offer to you to buy 1,000 birthday cards for $0.60 each for a total
of $600. You can accept the Card
Sensations offer by:
A. Sending
written notice to Card Sensations promising to ship the cards.
B. Not
communicating further with Card Sensations, but by promptly shipping the cards.
C. Accepting
the offer by writing, “Greetings, Inc. accepts your offer to buy 1000 birthday
cards for $0.60” and sending the written acceptance to Card Sensations.
D. All of the above could be valid acceptance.
18. Carl parked
his car on a steep hill, leaving the car in neutral and failing to engage the
emergency parking brake. The car rolled down the hill and crashed into the
garage door of Chase’s house, damaging the door beyond repair.
Can Chase recover
damages from Carl for the damage to his garage door?
A.
Yes, because Carl was
negligent in parking the car.
B.
Yes, if Carl is the
owner of the car because he left the car unattended and is responsible for any
damage caused by the car.
C.
No, because it is not
essential to engage the emergency parking brake to safely park a car.
D.
No, because the car’s
rolling down the hill was unforeseeable.
19. Zoe operates Wood
Rail Center Sports, an athletic equipment shop, as a sole proprietorship. She is concerned about her tax liability, and
wondering whether to continue as a sole proprietorship or to reorganize under
another business structure. Which of the following would be the best
advice for Zoe?
A. Zoe should remain a sole proprietorship; she
would have the same tax liability if she reorganizes as a LLC.
B. Zoe should remain a sole proprietorship; there
are no business taxes on sole proprietorships.
C. Zoe should consider reorganizing as a LLC to
reduce her tax liability.
D. Zoe should consider reorganizing as a
corporation to avoid personal tax liability on business income.
20. Linda was a guest in the Mardell Hotel. While walking across the hotel lobby, Linda
slipped and fell on the wet floor and broke her leg. Linda required surgery to repair the broken
leg.
Just prior to Linda’s
fall, the hotel floor had been washed by the maintenance staff. The staff had
placed a “wet floor” sign on the lobby floor.
Linda now wants to collect damages to compensate her for medical
expenses for her broken leg.
Is it likely Linda can
collect compensatory damages to cover her medical expenses?
A. No, there was a sign
posted warning about the wet floor; Linda assumed the risk by walking across
the wet floor.
B. No, it is reasonable the
hotel staff would need to clean the floor and after posting a warning sign, it is
not foreseeable that people would walk on the wet floor and fall.
C.
Yes, the hotel had a
duty to protect guests from known harm on the premises of the hotel.
D.
Yes, unless the warning
sign was large and conspicuous.
21. Eagle, Inc. sells motor vehicle parts to
dealers. In response to a dealer’s
order, Eagle shipped a crate with a label that read, “Crate contains one
150-horsepower diesel engine.” This
statement is:
A.
An express warranty.
B.
An implied warranty of merchantability.
C.
An implied warranty of fitness for a particular purpose.
D.
None of the above.
22.
In December 2016,
Charlotte became the 25th partner with International Enterprises, an
existing general partnership with 24 partners.
In April 2017, an International Enterprises partnership debt came due in
full in the amount of $100,000. The debt
was originally incurred in June 2016.
Charlotte is:
A. Only
liable for the debt up to the amount of her capital contribution to the
partnership. B. Not liable for the debt
because the debt was incurred prior to her joining the partnership.
C.
Liable for her pro-rata one-twenty fifth share of the total debt along
with the other partners.
D. Liable
for one-twenty fifth of the debt if all the other partners default on the debt
ad refuse to pay.
23. A orally offered to sell B 100 electric toothbrushes, but
neglected to state the price. B accepted
the offer via email and requested delivery within 2 weeks. A received the acceptance email, but
immediately thereafter, A tried to get out of the deal. Assume that A and B are both merchants, as
defined under the UCC, and have engaged in sales contracts together previously. 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.
24. 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.
25. Cable Corp. contracted online to buy several TV movies
from Movies, Inc. Both parties signed
the contract with electronic signatures.
This contract is probably:
A. Valid and enforceable.
B. Valid and enforceable only if the UCC rules
apply to the agreement.
C. Unenforceable under UCITA because electronic
signatures are not valid in 2017.
D. Unenforceable because it was not a click-on
contract.
26. A computer Dealer whose place of business is in
Atlanta contracts on August 12 to sell 100 personal computers to a Retailer
whose place of business is in Chicago. The contract does not mention anything
about the time or place of delivery. What are the delivery requirements for
this contract?
A. At the Retailer’s place
of business within a reasonable time from August 12.
B. At a convenient place so
long as the Dealer notifies Retailer of the place and time of delivery.
C. At a reasonable place on
August 12.
D. There is no obligation for the computer dealer to deliver the
computers as this is not a valid
enforceable contract because the terms are too vague.
27. Johnston Paints contracted in writing with Buyer to
deliver 100 one-gallon cans of exterior house paint to Buyer on or before
September 15. On August 15, Johnston
informed Buyer via email that it will be unable to deliver the paint as
agreed. Buyer demanded that Johnston
perform the contract, but Johnston still refused and stated the refusal in a
letter to Buyer. Which of the following
best describes Buyer’s rights in this situation?
A. Buyer must treat the
contract as breached on August 15.
B. Buyer must wait until
September 15 to determine with certainty if there has been a breach before
entering into another contract to purchase paint.
C. Buyer may treat the
contract as breached on August 15 and enter into a contract with another paint
supplier.
D. None of the above are
correct; Buyer must file a lawsuit against Johnston so that court may determine
if a breach of contract has occurred.
28. Which of the following statements by a
salesperson would create an express warranty for a buyer?
A. “This refrigerator is a
great value; you will not find a better deal.”
B. “This is the best TV we
sell; I plan to buy one myself.”
C. “This car is the most reliable and safest vehicle on the road
today.”
D. “This truck had the
engine replaced last year.”
29. Charles received an offer from Seller that stated:
“I will sell you my car for $8,500.
You have 10 days to accept.”
On day 4, Charles called Seller and stated he would pay $8,000 for the
car; Seller refused to accept $8,000. Which of the following is true?
A. There is no contract;
Seller is free to sell the car to another buyer.
B. Charles has 6 more days
to consider Seller’s offer to buy the car for $8,500; Seller cannot sell the
car to another buyer for 6 days.
C. If Seller changes her
mind within 6 days, she can make Charles buy the car for $8,000.
D. If Charles later tells Seller
by day 10 that he will buy the car for $8,500, a contract is automatically formed.
30. Buyer and Seller orally agree to a
contract for the sale of 400 shirts at $10 per shirt. Seller fails to perform and
deliver the shirts; Buyer sues. This contract is:
A. Enforceable because the
Statute of Frauds does not ever apply to sales of shirts.
B. Unenforceable unless
both parties are merchants.
C. Unenforceable because
the contract is not in writing.
D. Enforceable; the Statute
of Frauds is applicable to this agreement but oral contracts are binding if
both parties are merchants.
Scroll down, please, to begin the essay portion
of the exam.
Section
II. Essay: 4 questions/40 points/10 points per question
Use the answer sheet at
the end of the exam. Number each answer. Please do not recopy questions.
Answer each question in
complete paragraphs; do not list or answer in phrases. None of these questions can be
adequately/comprehensively answered in a single paragraph; it is important to
be comprehensive, specific, and detailed in your answers.
Full
points will be earned for answers that are accurate, well supported, sufficiently
comprehensive, and appropriately cited.
Use
APA in text citations and References, as appropriate but please do not use
direct quotes. Use only classroom notes/comments and assigned reading or video
materials as resources – this is all you need to complete the exam.
Please DO NOT use any
outside, internet resources as they are often inaccurate.
___________________________________________________________________
1. 10 pts
Joan and Ron bought and
paid for six dining room chairs from Hills Interiors
