Final exam

(ALL CLASSES: BUS 230-04; BUS-230-NO1; BUS-230-JTV AND BUS-230- NTV)

INSTRUCTIONS ON PROVIDING ANSWER SHEET ONLY FOR FINAL EXAM.

IN ACCORDANCE WITH EARLIER ANNOUNCEMENT(S) TO THE CLASS, YOU ARE HEREBY PROVIDED WITH YOUR CONTRACTS LAW FINAL EXAM.

PLEASE CAREFULLY READ THE INSTRUCTIONS BELOW THAT RELATE TO THIS FINAL EXAM.

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DUE DATE: THURSDAY, MAY 13, 2021 BY 6:30 P.M. (YOU MAY SUBMIT YOUR “ANSWER SHEET ONLY” AT ANYTIME BEFORE THIS DEAD LINE DATE AND TIME).

YOU ARE TO PROVIDE AN “ANSWER SHEET ONLY” AND ATTACHED IT TO AN EMAIL TO ME AT THE SCHOOL’S EMAIL SYSTEM AS EITHER A “WORD DOCUMENT” OR “PDF FILE” ATTACHMENT. DO NOT USE THE “FILE SHARING APP” BECAUSE FOR REASONS THAT ARE BEYOND ME THE SYSTEM DOES NOT ALLOW ME TO OPEN “FILE SHARING APPS.”

DO NOT ( I REPEAT)-DO NOT PROVIDE YOUR ANSWERS ON THE FINAL EXAM ITSELF AND SEND ME ALL OF IT AS AN ATTACHMENT. YOU ARE TO PROVIDE AN “ANSWER SHEET ONLY”. IF ANYTHING IS SENT OTHER THAN OR IN ADDITION TO “AN ANSWER SHEET ONLY,” IT WILL BE REJECTED AND WILL NEED TO BE RESUBMITTED IN ACCORDANCE WITH THIS INSTRUCTION/DIRECTION.

FURTHER, YOUR ANSWER SHEET ONLY SHOULD HAVE YOUR FIRST AND LAST NAME INDICATED AND SHOULD BE PROPERLY NUMBERED SO I KNOW WHICH QUESTION OF THE EXAM YOU ARE ANSWERING.

AS TO THE TRUE/FALSE SECTION, YOU PLACE EITHER A CAPITAL“T”FOR “TRUE” IF YOUR ANSWER IS “TRUE,” OR A CAPITAL “F” IF YOUR ANSWER IS “FALSE.”

AS TO THE MULTIPLE CHOICE SECTION 2: YOU NUMBER YOUR ANSWERS TO CORRESPOND TO THE QUESTION YOU ARE ANSWERING AND PLACE THE LETTER OF YOUR ANSWER (I.E. A, B, C, D, ETC) NEXT TO THE NUMBER IT BELONGS TO.

NOTE: NO OTHER HEIROGLYPHICS, SYMBOLS, CHARACTERS, MARKINGS, DRAWINGS WILL BE ACCEPTED AS AN ANSWER TO ANY QUESTION ON THE TEST

ALSO, AS TO THE BOTH SECTIONS OF THE EXAM, NO EXPLANATIONS OF YOUR ANSWER ARE PERMITTED AND CANNOT BE TAKEN INTO ACCOUNT.

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BE SURE TO FOLLOW THE INSTRUCTIONS STRICTLY. NO DEVIATION WILL BE PERMITTED UNLESS SUCH DEVIATION IS ALLOWED BASED ON HARDSHIP OR ANY OTHER “JUST CAUSE” PRESENTED BY THE STUDENT AND DETERMINED BY THE INSTRUCTOR TO BE MERITORIOUS AND PLACED IN WRITING BY THE INSTRUCTOR TO THE STUDENT.

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IF DEADLINE FOR THIS FINAL EXAM IS MISSED:

IF A STUDENT’S “ ANSWER SHEET ONLY ” IS NOT SENT IN IN ACCORDANCE WITH THESE INSTRUCTIONS BY THE DUE DATE AND TIME INDICATED ABOVE FOR THIS TEST, AND THE INSTRUCTOR HAS NOT GRANTED AN EXTENSION TO THE STUDENT OR OTHERWISE EXCUSING THE STUDENT FROM SENDING THE TEST IN BY THE DUE DATE AND TIME, THEN THE FOLLOWING SANCTIONS WILL APPLY:

-A LOSS OF 5 PTS PER DAY WILL BE DEDUCTED FOR EACH DAY PAST THE DUE DATE AND TIME UNTIL THE EXAM IS RECEIVED BY INSTRUCTOR FROM THE STUDENT.

-NO ADDITIONAL CURVE POINTS, IF APPLICABLE, WILL BE APPLIED TO THAT LATE MIDTERM SUBMISSION.

- IF IT IS RECEIVED THE DAY BEFORE THE INSTRUCTOR MUST REPORT FINAL GRADES TO THE SCHOOL’S REGISTRAR (THURSDAY, MAY 20, 2021) THEN THE INSTRUCTOR WILL SUBMIT AN “I” FOR “INCOMPLETE GRADE” TO THE REGISTRAR FOR THAT STUDENT FOR THAT STUDENT’S FINAL COURSE GRADE. THEN WHEN THE FINAL EXAM IS SUBMITTED TO THE INSTRUCTOR, IT WILL BE GRADED AND THE FINAL COURSE GRADE FACTORED BY THE INSTRUCTOR THEN INFORMING THE REGISTRAR WILL BE TO CHANGE THE “I” TO THE LETTER GRADE RECEIVED BY THE STUDENT. PLEASE NOTE, PER THE SCHOOL’S POLICY ON “I” GRADES, IF IT IS NOT CHANGED WITHIN 30 DAYS THAT FINAL COURSE GRADES ARE TO BE REPORT, THE STUDENT WILL RECEIVE AN “F” FOR THE COURSE GRADE.

--------------------------------------------------------------------------------------------------------------------------------------------------THIS FINAL EXAM IS COMPOSED OF THE FOLLOWING SECTIONS:

TRUE/FALSE: 31 QUESTIONS @ 1.3 EACH = 40

MULTIPLE CHOICE: 30 PROBLEMS @ 2.2 EACH = 66

POTENTIAL TOTAL SCORE = 106

PLEASE MAKE SURE YOU HAVE THE NUMBER OF QUESTIONS INDICATED AND THAT NO PAGES OF THE EXAM ARE MISSING. IF THIS IS THE CASE, PLEASE CONTACT INSTRUCTIOR AS SOON AS POSSIBLE.

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SECTION 1: TRUE/FALSE. CHOOSE YOUR ANSWER TO THE QUESTIONS BELOW BY EITHER CIRCLING “T” FOR TRUE OR “F” FOR FALSE. (31 X 1.3 EACH = 40)

1. All agreements are contracts, but not all contracts are agreements. T F

2. All contracts are agreements and all agreements are contracts. T F

3. Written contracts must be handwritten in pen in order to be enforceable. T F

4. To be legally enforceable all contracts must be in writing. T F

5. For an offer to be valid, it must only be definite and certain, communicated directly to the offeree. T F

6. Silence on the part of an offeree to an offer received from an offeror is usually never considered acceptance unless both parties have agreed beforehand that this is to be the means of acceptance.

T F

7. A conditional or qualified response to an offer is not considered an acceptance but is interpreted by law as an immediate rejection of the original offer and it becomes a counter-offer.

T F

8. The “mirror-image” rule of contract law states that the terms of an acceptance of an offer must be in the same terms as the offer, and that if there are any differences between the offer and the “acceptance”/response, then the “acceptance”/response is a considered an immediate rejection of the initial offer, thereby becoming a counter-offer.

T F

9. Revocation of an offer is the calling back/withdrawing of the offer by the offeror and can be done at any time even if the offer is accepted by the offeree.

T F

10. A bilateral contract is one which has a promise for a promise between the parties. T F

11. The problem with unilateral contracts is that they are not considered accepted until the performance or substantial performance requested in return to the promise is rendered which essentially leaves the offeree in a potential tenuous position of having the offeror be able to back out of the transaction without any legal liability to the offeree.

T F

12. The law favors bilateral contracts and, therefore, a contract is considered created when the offeree has made the return promise to the offeror as acceptance.

T F

13. For a contract to be canceled because of a mistake, the mistake may be either mutual or it can be unilateral if the unilateral mistake is made in good faith.

T F

14. When threats are used by someone who does not have a special legal relationship of trust or a confidential relationship to another person to force someone to enter into a contract, the agreement or contract is considered entered into because of undue influence.

T F

15. A contract of adhesion is characterized by its shocking unfairness or is shockingly unjust. T F

16. When it comes to the consideration of a contract, the courts (as has been the traditional approach) do not look into the adequacy or sufficiency of the consideration supporting the transaction if there are not circumstances of fraud, duress, undue influence, mistake, etc.

T F

17. An example of a contract that lacks consideration but is still enforced by the courts because they are considered socially beneficial are pledges or subscriptions (which are promises to donate money).

T F

18. A gratuitous promise is a gift and is enforceable in a court of law because they are considered to have moral consideration even though someone makes a promise without requiring some benefit in return.

T F

19. A contract with a minor can be ratified/approved by the minor from the time up to the minor becomes an adult ( age, 18) or a reasonable time after the minor has reached the age of majority (age, 18).

T F

20. Upon reaching the age of majority (age 18 for contract law), contract law provides that a minor must ratify an earlier contract entered into while a minor - in writing and no later than 6 months after reaching the age of majority.

T F

21. Normal mentality for purposes of determining competency or the capacity to contract under contract law means that both and all parties to a contract must have a sufficient understanding that they are getting themselves into the seriousness of a contract.

T F

22. The law allows minors to cancel contracts they get into with the exception of contracts for necessaries, i.e. food, clothing, medical care, lodging provided to the minor by an adult.

T F

23. A valid contract can be entirely handwritten. T F

24. An agreement that can be completed within six (6) months must be in writing in order to be enforced pursuant to the Statute of Frauds.

T F

25. An agreement for the sale of personal property for $ 501.00 must be in writing in order to be enforced in court according to the Statute of Frauds.

T F

26. The Statute of Frauds only applies to those contracts listed in the statute and only if those contracts are yet to be performed, meaning they are not fully completed, but are executory.

T F

27. The transfer of a right to a contract is known as a delegation. T F

28. The legal significance of being a third-party intended beneficiary to a contract made by two other people, is that this type of beneficiary gets legal rights to the contract which he or she can enforce.

T F

29. A third party who benefits incidentally from a contract has a right to the benefits if the benefits exceed $1,000.00.

T F

30. The personal services or duties owed in a contract by artists, musicians, singers and athletes can be delegated and almost always are transferred.

T F

31. The legal distinction between a contract of adhesion and an unconscionable contract is that the law enforces contracts of adhesion despite unequal bargaining power between the parties.

T F

SECTION 2: MULTIPLE CHOICE. CHOOSE YOUR ANSWER BY CIRCLING JUST THE LETTER REPRESENTING YOUR ANSWER TO EACH OF THE BELOW QUESTIONS OR STATEMENTS . (30 X 2.2 = 66)

1. John offers to buy Ann’s Smartphone for $200.00. John also promises Ann that he will give her the cash for the phone on the following Friday when he gets paid. Ann accepts John’s offer and promises to give him the phone when he pays her on Friday. What type of contract have John and Ann made?:

a. A unilateral contract.

b. A bilateral contract.

c. An unconscionable contract that will be unenforceable.

d. A mutual contract that is unenforceable but only if it is in writing.

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2. Dina tells Ed that she will pay him $1,000.00 to set fire to her store so she can collect under the fire insurance policy she has covering the store. Ed sets fire to the store. When he goes to collect the $1,000.00 from Dina, she refuses to pay him. Can Ed sue Dina to collect the $1,000.00?

a. Yes, because all the elements of a valid enforceable contact are present and this type of contract did not have to be in writing.

b. No, This contract is for an illegal purpose and, therefore, the element that a contract be for a lawful purpose is not present. Thus, this “contract” between them is void.

c. Yes, especially if the insurance company never realizes that it was an arson.

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3. Jamieson lost an expensive pedigreed dog while at the park. He placed an advertisement in the Daily Journal, offering a $200.00 reward for the dog’s safe return. This offer is:

a. Valid, even though directed to thousands of readers, only one of whom could accept it and is known as a public offer.

b. Valid, provided there is a promise to accept the offer.

c. Not valid, because the offer is not specifying to whom the offeree is and, therefore, is reaching persons of unknown identity which makes the offer not definite or specific enough.

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4. Jane rides to work with Bob in his just purchased new car. Bob purchased the car thirty days ago for $26,000.00. One very cold morning, the car would not start. Bob yells out in anger and frustration “I’ll sell this car to anyone for $500.00. Jane immediately takes out her check book and writes Bob a check for $500.00 and hands it to him. Has a valid offer been made by Bob for Jane to accept?

a. Yes, under the circumstances, even though Bob was angry and frustrated, he was obviously serious about making such an offer. Otherwise, he should have stated that his language should not be taken seriously.

b. Yes, under the circumstances, an objective reasonable person would not interpret Bob’s language as anger or disappointment, but language of serious intent to make an offer to get rid of his car for $500.00.

c. No. A reasonable person, taking into Bob’s anger and frustration and the obvious difference between teh car’s purchase price and market value compared to the amount Bob indicated he would sell it for, would conclude that Bob’s offer was not made with serious objective intent and so there could not be a valid acceptance by Jane and no agreement exists between them.

d. Yes, serious intent to be bound to an offer is not measured by a reasonable person standard, but by the subjective standard from the perspective of the offeree in hearing the language of what could be interpreted as an offer.

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5. John places a classified ad in the local newspaper and online as follows:

“For Sale: To the first person who appears at my house with $1,000.00, cash only, I will sell my 2004 Honda motorcycle. It’s only been driven once, is in excellent condition, and runs great. Must sell; I am leaving the country. ---John Doe, 123 Maple Street, Springfield, N.J.”

Suppose you are interested in the motorcycle and you call John having obtained his telephone number on the internet. You tell him that you will buy his motorcycle. Have you created a legally binding contract?

a. No, because it does not identify who can accept the offer. Without this level of specificity, John’s ad is simply an advertisement and not an offer.

b. No, John’s ad is not specific as to what will be the focus of the contract.

c. Yes, because any action or conduct by you saying you accept the offer will sufficient to create a legally binding contract.

d. No, because you have not accepted the offer in the terms specified in the offer. In order to accept, you must comply with the terms set forth in the offer by John, i.e. appearing at his house with $1,000.00 cash.

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6. Fidelity Corporation offers to hire Ron to replace Monica, who has given Fidelity a month’s notice of intent to quit. Fidelity gives Ron a week to decide whether to accept. Two days later, Monica decided not to quit and signs a two (2) year employment contract with Fidelity. The next day, Monica tells Ron of the new contract she signed with Fidelity. Ron immediately faxes to Fidelity a formal letter of acceptance of the offer of employment it made to him. Do Fidelity and Ron have a contract?

a. Yes. Since Fidelity gave Ron a week to decide whether to accept the offer of employment made to him, it was implied that the offer would remain open for him until after the week expired.

b. Yes. For Fidelity to go behind Ron’s back and then sign a contract with Monica who was quitting the employment would be considered bad faith dealing and would not prevail under contract law principles or in court.

c. No. Revocation of an offer may be implied by conduct inconsistent with the offer made. When Fidelity rehired Monica and Ron learned of the hiring, the offer to him was legally considered revoked. His acceptance was too late.

d. Yes. The revocation of the offer to Ron by Fidelity was not made with notice to Ron and so its offer to him was not properly revoked. Ron’s acceptance letter should be considered timely and effective.

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7. Chin, a collector of rare paintings, offered to sell a particular painting by Picasso (catalog number 1401) to Kovacs for $14,000.00. When it came time to exchange the painting for the money, it was obvious that Kovacs was expecting a different Picasso painting (bearing catalog number 1410). Chin was surprised because he clearly discussed with Kovacs and Kovacs clearly indicated that he wanted to buy the Picasso painting bearing catalog number 1401. An employee for Chin even heard the discussion between them and will verify Chin’s statements. Under these facts, the contract between Chin and Kovacs:

a. Is valid as the mistake was not mutual, but was instead unilateral with the mistake being only on the part of Kovacs.

b. Is invalid because Kovacs was still getting a Picasso which would still be worth a lot of money.

c. Is invalid because it lacked consideration due to the mistake.

d. Can be canceled by either party as the mistake was mutual.

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8. Stein promised to give his 19-year old nephew $3,000.00 on his 22nd birthday. The nephew was most pleased to hear this from Stein and as a courtesy invited him to his graduation Hudson County Community College. This is an example of:

a. A legal contract and demonstrates a gift promise as consideration.

b. An invalid/unenforceable contract for it lacks consideration. A gratuitous promise does not require any legal benefit be received by the promisor and therefore is said not to support or be valid consideration for a contract.

c. Unenforceable because it should have been in writing under the Statute of Frauds.

d. None of the above.

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9. A pledge or subscription (which is a promise to donate money to a church, temple, mosque, college or other charitable organization) is considered:

a. Unenforceable as it is not supported by valid consideration.

b. Unenforceable because there is not a promise for a promise and there is no benefit to the person making the pledge.

c. Enforceable even though there appears to be a lack of consideration because they are for some worthy cause so the courts have generally held them enforceable.

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10. Contractual capacity is:

a. When an incompetent party to a contract has the ability to contract.

b. When a party does not understand the meaning of a contract nor is that person capable of such an understanding.

c. Considered to be possessed by a competent party to a contract meaning that he or she has normal mentality to be capable of understanding the meaning of a contract which means the ability to make a valid contract.

d. Someone who has not attained the age of majority of the state they are in when they make a contract but still has the capacity to understand the meaning of the contract.

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11. Eakins was 17 years old, married and had a full-time job with which he was able to support himself, his wife and their 2 small children. A doctor sued him to recover the cost of medical care and surgery provided to him. Eakins did not have medical insurance. In this situation, the Court would:

a. Declare the contract invalid since Eakins is a minor and protected as the result of that status.

b. Declare the contract voidable at the option of Eakins and let him decide whether he wanted to pay the doctor or not under some moral obligation.

c. Declare the contract valid because Eakins circumstances made him emancipated and thus his minority status no longer protected him as the law does when it comes to contracts entered into by a minor. Thus, he would have to pay the doctor for the services rendered.

d. Eakins is a minor despite his circumstances because he is not financially/economically independent and since what was provided – medical care – is a necessary of life, this is an exception to the rule that minors are protected from contract liability and he would have to pay the reasonable value for the medical care provided to him.

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12. On April 1, Al Nextbestplayerinbaseball, sends a letter to the New York Yankees offering to play for them for $500,000.00 per season for the first 3 seasons. The offer states that the team has to accept the offer by April 11th. It does not specify any particular mode or method of accepting. The Yankees receive the offer by regular mail on April 4. On April 10, the Yankees send Al an acceptance by U.S. mail. Al receives the acceptance on April 15th. The likely result under the mailbox rule is :

a. Although Al received the acceptance 4 days past the deadline for acceptance, a valid contract has been formed because the Yankees dispatched their acceptance by sending it by U.S. mail on April 10th and under the mailbox rule, such an acceptance is effective when placed into the control of the U.S. Postal system.

b. Although Al received the acceptance 4 days past the deadline for acceptance, a valid contract has not been formed because the Yankees dispatched their acceptance after the stated time period within which the acceptance was required to be sent.

c. The acceptance is late because it was received by Al past the deadline and under the mailbox rule this would invalidate the acceptance so no valid contract can be considered formed.

d. The acceptance should have been sent by a faster method of communication to be effective under the mailbox rule, thus no valid contract can be considered formed.

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13. What is the best definition of a contract?

a. A voluntary agreement by two or more parties that to perform or refrain from performing some act in the now or in the future which is enforceable in a court of law in the event one of the parties does not comply with a provision of the contract.

b. An agreement by only two parties that may or may not be enforceable in a court of law.

c. An agreement by only two parties that may be enforceable in court

d. An understanding between two or more parties that they may have an agreement.

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14. The objective theory of contracts is:

a. Is a legal theory by which intent of parties to enter a contract is determined and provides that a party’s intention to enter a contract is judged by outward, objective facts as interpreted by a reasonable person , rather than by a party’s secret subjective intention.

b. Is a rule in contract law that the intention of parties to a contract is determined by their subjective personal intention of whether they wanted or intended to enter into a contract.

c. It allows a party to an agreement or contract to provide an unexpressed reason for entering into an agreement or contract.

d. It relates only to a parties motivations for entering into a contract.

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15. The four (4) main elements to a contract are: (1) agreement; (2) capacity to contract; (3) consideration; and (4)

lawful purpose. These elements are called “essential” elements because:

a. They are equally important.

b. They belong together.

c. They are all required to exist for there to be a valid enforceable contract. If any one or more are not present, then there can be no valid enforceable contract.

d. As long as there are a majority of the elements, then common law contract law provides that there is still a valid enforceable contract.

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16. For there to be a legally valid offer, the following elements must be present:

a. Serious and objective intent to enter into a contract and an offer.

b. Communication of the offer with a serious and objective intent to be bound and a price term.

c. Communication of the offer to the specific offeree, reasonably definite and certain terms in the offer and a serious objective intention to be bound by the offeror.

d. Communication of the offer to the specific offeree, reasonably definite and certain terms in the offer and a serious subjective intention to be bound by the offeror.

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17. Hawkins took his son to the doctor and asked the doctor to operate on the son’s injured hand. The doctor said the boy would be in the hospital for three or four days and that the hand would probably heal a few days later. The son’s hand did not heal for a month. If the father sued the doctor for breach of contract, the likely result would be:

a. The father would win the lawsuit for breach of contract since his son’s hand did not heal a few days after the three or four day hospital stay.

b. The father would win the lawsuit for breach of contract since the doctor made a specific promise when the son’s hand would heal and it did not heal in that time period.

c. The father would lose the breach of contract lawsuit since the doctor did not make an offer to heal the son’s hand in three or four days, he merely expressed an opinion as to when the hand would heal.

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18. A revocation of an offer sent FedEx on April 1, 2017 and delivered to the offeree’s residence or place of business on April 3, 2017. The offeree has not yet accepted the offer. The revocation of the offer becomes effective:

a. On April 1, 2017 in that in the majority of states, a revocation becomes effective when the offeror sends it to the offeree or the offeree’s agent.

b. On April 2, 2017 since in the majority of states, a revocation becomes effective the day after the offeror sends it to the offeree or the offeree’s agent.

c. On April 3, since in most states a revocation becomes effective when the offeree or the offeree’s agent actually receives the offer provided that the offeree has not yet accepted it.

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19. Raymond offer to buy Francie’s iPhone6 for $500.00 and Francie responds: “Is that your best offer?” or “Will you pay $575.00 for it?” The likely result would be:

a. A reasonable person would conclude that Francie rejected the offer and made a counter-offer to Raymond.

b. A reasonable person would conclude that Francie rejected the offer and did not make a counter-offer to Raymond but only indicated a desire to continue to negotiate.

c. A reasonable person would conclude that Francie did not reject the offer but merely made an inquiry about it. So she can still accept the offer and bind Raymond to the $500.00 purchase price.

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20. Burke offers to sell his house to Lang for $270,000.00. Lang respond: “Your price is too high. I’ll offer to purchase your home for $250,000.00.” What is Lang’s response considered to be under contract law.

a. Lang’s response is considered an invitation to further trade and a new offer would have to be made by Burke.

b. Lang’s response is considered an acceptance of Burke’s offer but at a lower purchase price which will bind Burke which is why Burke needed to be more careful when making the offer.

c. Lang’s response is considered a counter-offer and is considered to legally immediately reject Burke’s offer to sell at $270,000.00 and creates a new offer by Lang to purchase the home at a price of $250,000.00.

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21. Justin earns extra income by washing store windows. He taps on the window of a store, catches the attention of the store manager, and points to the window and raises his cleaner, signaling that he will be washing the window. The manager does nothing to stop him. The likely result will be:

a. The store manager will not have to pay Justin for the work he did cleaning the window since silence is never considered an acceptance.

b. The store manager will not have to pay Justin for the work he did cleaning the window since silence is never considered an acceptance and the store manager and Justin did not have a prior working relationship where silence by the manager would constitute acceptance.

c. The store manager will have to pay Justin for cleaning the window, since under the circumstances, the manager would have a duty to speak and should have either accepted Justin’s offer or rejected it.

d. The store manager will have to pay Justin for cleaning the window, since under the circumstances, the manager would have a duty to speak and should have either accepted Justin’s offer or rejected it and especially since the manager and the store received the benefit of the offered services by Justin even though the manager knew he had an opportunity to reject them and knew that the services were offered by Justin with the expectation of being paid.

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22. Robert says to his son, “In consideration of the fact that you are not as wealthy as your brothers, I will pay you

$5,000.00 by Friday of next week.” Is there consideration in this transaction?

a. Yes, especially since Robert used the word “consideration” is his statement.

b. Yes, Robert’s promise is enforceable as a “bargained-for-exchange” and since it is between a father and son, contract law does not look for the son to have to do anything to receive the $5,000.00 promised and does not need to give Robert something of legal value in return for the promise of $5,000.00.

c. No, Robert’s promise is unenforceable because there is no “bargained-for-exchange” because the son need not do anything to receive the $5,000.00 promised. There is no requirement that the son give Robert something of legal value in return for the promise made by Robert.

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23. Carol contracts orally to sell her vacant Seaside real property to Axel for $25,000.00. Later, Carol decides not to sell the property. Has there been a valid contract that Axel can enforce in court and obtain the property upon paying for it.?

a. Yes. Since the real property transaction was under $ 30,000.00, even though it was an oral contract, Carol cannot cancel the contract by not selling to Axel.

b. Yes. All the elements of a valid contract appear present and even though it may be oral, neither party can cancel.

c. No. The Statute of Frauds is a defense to this type of contract since it is the sale and purchase of real property.

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24. Jamil Blackmon became friends with Allen Iverson when Iverson was a high school student who showed tremendous promise as an athlete. Blackmon suggested that Iverson use “The Answer” as a nickname in the league tournaments and said that Iverson would be “The Answer” to the National Basketball Association’s declining attendance. Later Iverson said he would give Blackmon 25% of any proceeds from the merchandising of products that used “The Answer” as a logo or a slogan. Is Iverson’s promise enforceable?

a. Yes, because a valid oral contract had been made between Blackmon and Iverson with all required elements of a contract present.

b. Yes, because Iverson’s promise was made in return for past consideration, and past consideration is enforceable especially where one party makes a profit.

c. No, because Iverson’s promise was made in return for past consideration (Blackmon’s earlier suggestion) so it was enforceable. In effect, Iverson stated his intention to give Blackmon a gift.

d. Yes, because even though Iverson’s promise was made in return for past consideration, it was not Iverson’s intention to give Blackmon a gift.

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25. Bonna Petite, a clever and advanced 17 year old with an appetite for fancy food. She desired to eat at a fancy French Restaurant called “Tres Cher” the most elegant and fancy restaurant in town. She was not under or experiencing any life circumstances which would consider the lunch a “necessary of life” for Ms. Petite. One day, she dressed up and groomed herself to look like a 25 year old businesswoman. She was seated at the restaurant and ordered a very expensive lunch. At the end of the meal, she summoned the waiter over and said: “This has been an excellent lunch and it is therefore with great sadness that I must inform you that I am a minor. I must disaffirm my contract to purchase this lunch.” She showed him a form of identification clearly showing she was only 17. The age of majority in her State is 18. The State contract law does not make any exceptions if a minor misrepresents herself as being older than a minor. May she disaffirm (cancel) the implied contract to pay for the lunch she ate?

a. Yes. A minor may disaffirm/disapprove a contract at any time before turning the age of majority (18) or within a reasonable time after attaining the age of majority. This general rule places the burden on the restaurant to inquire about the age of its youthful-looking customers and it bears the risk of not doing so.

b. No. She will not be able to disaffirm/disapprove the contract to pay for the lunch since in her State the lunch would be considered providing a “necessary of life” and she will (or her parents will) be responsible for paying the reasonable value of the lunch. Providing “necessaries of life” to a minor is an exception to the general rule that a minor may disaffirm a contract at the minor’s option.

c. Yes, she can disaffirm the contract to buy lunch but only if she promises never to come back to that restaurant.

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26. Rhonda has been diagnosed with manic depression for which she refuses to take medication. However, a court has not declared her mentally incompetent. One afternoon, she goes to Classic Automotive wearing shabby clothes, uncombed hair and un-showered. After 2 hours of negotiation with the salesperson, she trades in her Honda Civic and signs a lease for a new BMW. Note, the negotiation took 2 hours because it was apparent that Rhonda many times did not understand even the most basic of discussion with the salesperson about buying the car. She does not test-drive the new car, she has difficulty removing the keys to the Civic from her key ring, and the payments of the BMW are well more than she can afford. Can Rhonda cancel the contract for the lease of the BMW?

a. Yes, because all of the circumstances of her condition demonstrated that she did not understand she was executing an auto lease, especially if it was far more than she could afford.

b. Yes, because a person who is considered incompetent, although not judged incompetent by a court, can avoid/cancel any contract they enter into without being required to have to reasonably understand the nature and terms of a contract or lease.

c. No. In this situation, nothing -including Rhonda’s disheveled appearance, her difficulty with the keys to the Civic, her failure to test-drive the car and her failure to object to the price or lease payment - indicated that she did not understand she was executing an auto lease contract for the amount of the price of the car and the indicated per month lease payment.

d. No, because it does not matter whether anyone considered her to be mentally incompetent, for mental incompetence one needs to be adjudicated mentally incompetent by a court in order to claim that at the time of the contract’s execution, the person did not reasonably understand the nature and terms of the contract.

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27. Paco buys a violin from Beverly for $250.00. Although the violin is very old, neither party believes that it is valuable. Later, however, an antiques dealer informs the parties that the violin is rare and worth thousands of dollars. Can Beverly rescind/cancel the contract?

a. No. Although both parties are mistaken, they are mistaken as to the value rather than a mistake of fact. Only a mistake as to fact warrants contract rescission/cancellation.

b. Yes. As long as the mistake is mutual, then it can be cancelled or rescinded by either party.

c. No. Even though it looks like a mutual mistake, in reality it is a unilateral mistake because Paco is the one protected from such a mistake.

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28. Actor Tom Selleck contracts to purchase a horse named Zorro for his daughter from Ms. Cuenca. Cuenca acted like Zorro was fit to ride in competitions, when in reality, Cuenca knew the horse was unfit for this use because of a medical condition. Selleck filed a lawsuit against Cuenca for wrongfully concealing the horse’s condition. The most likely result from the court will be:

a. Selleck will lose because Cuenca did not make any statements that were fraudulent so a fraudulent misrepresentation concerning Zorro was not made.

b. Selleck will lose because he never indicated to Cuenca that he wanted the horse for his daughter so she could ride in competitions with it.

c. Selleck will prevail and be awarded compensation in that Cuenca’s fraudulent misrepresentation was by conduct and did not have to be by making a verbal or written statement. Fraudulent misrepresentation can occur by or through a party’s conduct and Cuenca’s acting like Zorro was fit to ride in competitions will be sufficient for a court to conclude she committed misrepresentation by conduct.

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29. Superior University forms a contract with Sam that Sam will teach three courses of business law during the coming academic year (September 15, 2017 through June 15, 2018). The contract is formed on March 1, 2017. Does the contract need to be in writing to be enforced in accordance with the Statute of Frauds?

a. Yes. Since it was formed/created on March 1, 2017, it needs to be in writing under the Statute of Frauds to be enforceable because it cannot be performed within one year from the date of its creation.

b. No. Since it was formed on March 1, 2017, seven months before it has to begin, then it can be performed within one year.

c. Yes. Since it is a contract that cannot be completely performed within one (1) year (or within 364 days), it must be in writing in order to be enforced according to the Statute of Frauds. It matters not when it was formed as long as it was formed before September 15, 2017.

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30. The New York Giants football organization sent Ronald Yocca a brochure offering him the right to buy season tickets. Prices and locations of seats were indicated in the diagram in the brochure. Yocca responded, listing his seating preferences. The Giants sent him tickets with a diagram that showed different seating sections than were shown in the brochure. Also enclosed, was a document that read, ”This agreement/contract contained the entire agreement of the parties.” Yocca signed and returned the document. When Yocca went to the first game, he discovered that his seat was not where he expected it to be based on the brochure. He sued for breach of contract. The most likely result is:

a. The court will conclude the brochure was not part of the parties’ contract and will dismiss the lawsuit against the Giants. Under the parol evidence rule (P.E.R.), the signed document could not be supplemented by evidence of previous negotiations or agreements. Under the P.E.R., if a court finds that a written contract represents the complete and final expression of the parties’ agreement, then it will not allow either party to present parol (extrinsic) evidence (testimony or other evidence of communications between the parties that is not contained in the contract itself) to supplement, add to, modify, or contradict the terms of the final writing of the parties.

b. The court will conclude the brochure was part of parties’ contract and not dismiss the lawsuit against the Giants. Under the parol evidence rule (P.E.R.), the signed document could be supplemented by evidence of previous negotiations/agreements. Under the P.E.R. if a court finds a written contract represents complete and final statement of the parties’ agreement, then it will allow either party to present parol evidence (testimony or other evidence of communications between the parties that is not contained in the contract itself).

c. The court should not rely on the Parol Evidence Rule at all, it would be unfair to harm a fan like this by the Giants football team and it should honor his seating preferences.

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TOTAL POSSIBLE SCORE: T/F = 31 X 1.3 = 40.3 = 40 M/C = 30 X 2.2 = 66 / 40 + 66 (40 + 66 = 106)

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