Business Law

BUL3320, Law and Business, Final Exam Name: ________________

Dr. Whitney Smith

Your exams are designed to reinforce the concepts you learned in your readings, lectures, and in our class discussions. Please fill in the short answers/short essays/terms that complete these questions. Good luck! Please email me your completed exam.

Please make sure you make your answers stand out by having them in bold, different color, etc.

1. There are ________ broad categories of damages in a breach of contract case.

They are:

2. Please explain the concept of why a party in a breach of contract case has an obligation to mitigate their damages.

3. In a _______________________mortgage, the interest rate is fixed.

4. In a ________________________mortgage, the interest paid by the borrower changes periodically.

5. In a ________________________mortgage, the payments remain low for a specified period of time and at the end of the period, the entire balance of the mortgage is due in a lump sum payment.

6. A _______________________ is the document that contains the terms by which an individual actually owed the money to the creditor- including amount borrowed, interest rate, terms, etc. (indicates the debt). A __________________is the document that is recorded in the public records that indicates that a certain property has a lien on it. (promissory note/mortgage).

7. In class, we discussed the mortgage foreclosure process. In the discussion we discussed that once served with the mortgage foreclosure complaint (the action that initiates the court proceeding), the owner either does or does not have to immediately move out of the property. (highlight your answer or delete the incorrect answer)

8. In Florida, does the bank/creditor have to file a lawsuit in order to begin the foreclosure process?

9. Ron Smith obtained a loan from the bank for $200,000.00 and paid his loan timely for 1 year and then lost his job and was unable to continue to pay on his loan. At the time Ron defaulted on his loan and the lender initiated the foreclosure proceeding, he owed $190,000.00. The bank ultimately foreclosed on the property and obtained a judgment of foreclosure in the amount of $190,000.00 against Ron. The bank eventually obtained the property in the foreclosure sale and sold the property (mitigated their damages) for $100,000.00. The bank may file a pleading for a _____________ judgment.

10. a. Imagine you are forming a business with your best friend to open a car wash. We discussed the varying aspects of a partnership, limited liability company and corporation and as a result of this discussion, which type of entity would you select? _____________

b. Why?

c. What essential terms would you include in your operating agreement/shareholder agreement?

11. To form a limited liability company, ______________________ are filed with the state agency.

12. Are shareholders normally personally obligated for the obligations of the corporation beyond the extent of their investments?

13. To form a corporation, _______________________ are filed with the state agency.

14. In class, we discussed how a shareholder of a corporation may be personally liable for the actions of a corporation. The theory behind where a shareholder may have personally liability is called ______________________________.

15. In a corporate _____________, corporation A will absorb Corporation B and Corporation A will continue as the surviving corporation.

16. In a corporate _______________, Corporation A and Corporation B form a new entity, Corporation C and Corporation A and B cease to exist.

17. In most states, an individual can/ cannot hold more than one office such as president and secretary (highlight the answer or delete the incorrect answer).

18. Please explain the business judgment rule.

19. Please give an example of a director of a corporation breaching its duty of loyalty.

20. In a corporation, generally, a quorum is present when more than __________ percent of the outstanding shares are present.

21. In a corporation, does a director have to be a shareholder in the corporation?

After taking this class, has your perception of business law changed? Has it made you more likely or less likely to be an attorney? (not apart of the final, but answer if you want!)