Business Law Fundamentals
Exam #2
Page 1 of 8
______________________________________ PRINT name as your signature
1.
This Exam #2 must be completed within the allocated time (i.e., 75 minutes). Audible time warnings of 2 minutes, 1 minute, and 30 seconds will be given.
2.
It is a closed book and open mind exam. It is a closed mouth exam. All team work is academic dishonesty. Any electronic device of any kind for any purpose is academic dishonesty.
3.
Recall the material difference between i.e. (that is) versus e.g. (for example).
4.
If you finish early, to not disturb others, remain in your seat until 11:15 AM. When you are done, turn over your exam papers, STAY IN YOUR SEAT until invited to depart. Prior to departing cast your ballot regarding the extra credit movie. Students taking their Exam #2 on Wednesday shall turn in both [1] white copy of exam; and [2] completed blue answer sheet. Students taking their Exam #2 on Thursday shall turn in the completed blue answer sheet, and will receive in exchange an answer key; you may keep your white copy exam. Students taking their Exam #2 on Wednesday may, after 11:15 AM Thursday, retrieve their white copy exam and an answer key from the MH 228 suite secretary.
5.
This Exam #2 is worth 200 points of a course total of 1,000 points. There are 52 questions graded as if there only are 50. Accordingly, each correct answer on Exam #2 is worth 4.0 course points.
6.
All appeals of this exam’s questions must be: [6A] typed; [6B] signed by the student in three ways, typed name, handwritten signature, and typed university identification number; [6C] immediately following the signature, list in sequence, solely by number, each of the questions being appealed; [6D] since this exam's design (i.e., 52 as 50) presumes two errors, harmless error exists with two flawed questions; thus, an appeal must appeal three or more questions and must prove at least three questions to be objectively ambiguous for there to be one non-harmless error; [6E] after the [6C] list, argue each question, one at a time; [6F] at the beginning of each question’s [6E] appeal, identify at least two reasonable meanings that the question could have had; [6G] in each [6E] appeal, argue why one or more of the [6F] identified reasonable meanings is as appropriate or is more appropriate than the meaning used for the answer key answer; and [6H] the signed appeal must be personally handed to the instructor (or to the instructor's suite secretary in MH 228) no later than 11:59 AM (i.e., minute before noon) Thursday, November 6th, time is of the essence.
LAWS 3930, Business Law Fundamentals
Fall 2014
O'Hara © 2014 D
Business Law Fundamentals
Exam #2
Page 2 of 8
NOTES: A. Recall the material difference between i.e. (that is) versus e.g. (for example). B.
Use bubble A for TRUE and use bubble B for FALSE.
C.
If a question contains a number (e.g., Amendment IX), then the truth or falsity of that question never depends upon that number. This is not a test of trivia recall. This test is an objective demonstration of your subjective knowledge.
D.
For clarity in distinguishing a "principal" from a principal as well as distinguishing an "agent" from an agent, quote marks will be used for the generic words "principal" and "agent" and no quote marks will be used for the specific words principal and agent. That is, "principal" and "agent" refer to all three relationships (i.e., principal and agent; and principal and independent contractor; and employER and employEE).
E.
For clarity in distinguishing enforceable from unenforceable transactions, the word contract is not in quotes for an enforceable contract (e.g., a voidable contract elected to be enforced), whereas the word "contract" is in quotes for a transaction that is not an enforceable contract (e.g., a voidable contract that has been voided and now is a void "contract").
F.
The quote marks described in D. and in E. may be the very essence of the question's truth or falsity. For example, it is true to say "An employEE is one of the three relationships in "agent"."; and it is false to say "An employEE is an agent.".
G.
Different students have different versions of this Exam #2. For a student's blue bubble sheet to be correctly scored requires that student to record that student's version of this Exam #2. AT THE BOTTOM RIGHT OF THIS PAGE, WHAT LETTER FOLLOWS THE YEAR 2014? RECORD THAT LETTER AS YOUR ANSWER TO QUESTION 52. Failure to correctly record your version shall earn you a score of zero on Exam #2.
LAWS 3930, Business Law Fundamentals
Fall 2014
O'Hara © 2014 D
Business Law Fundamentals
Exam #2
Page 3 of 8
QUESTIONS: 1.
T
F
Because tolling is permitted a statute of limitations primarily presents questions of procedural due process; in contrast the statute of repose primarily presents questions of substantive due process.
2.
T
F
If precedence is persuasive, then that precedence is binding.
3.
T
F
The objective good faith required of a non-UCC consumer is reason to know.
4.
T
F
Under the Rational Basis Test, in order to rebut the presumption that State statutes are valid, a person with standing to sue must show the State lacks a legitimate governmental interest.
5.
T
F
An involuntary State ordered quarantine of a natural person reasonably believed exposed Ebola likely does not violate the Fourth Amendment prohibition on seizures.
6.
T
F
Congress must pass a statute if Congress is to preempt a State's Police Power.
7.
T
F
Common law fraud exists if a defendant misrepresents a material fact, thereby inducing the plaintiff's justifiable reliance and proximately causing the plaintiff's damages.
8.
T
F
An example of the specific controls the general is that within a contract tort damages are mere economic loss.
9.
T
F
A tort exists if the defendant breaches a duty of care owed to the plaintiff thereby proximately causing the plaintiff's damages.
10.
T
F
A contract exists if parties with capacity enter an agreement for legal subject matter supported with consideration and reality of assent.
LAWS 3930, Business Law Fundamentals
Fall 2014
O'Hara © 2014 D
Business Law Fundamentals
Exam #2
Page 4 of 8
11.
T
F
The common law presumes the parties desire a contract. This is why silence is acceptance.
12.
T
F
An implied-in-law "contract" (a.k.a., quasi "contract") is not a contract; whereas an implied-in-fact contract is a contract. (Recall notes D, E, and F on page 2 of this exam regarding quote marks on legal terms.)
13.
T
F
The USA Constitution Art. I., sec. 10 prohibition on the USA States impairing the obligation of contracts is not applicable to mere offers to contract and is not applicable to executed contracts.
14.
T
F
If the offerEE gives an unequivocal assent to the offerOR's sufficiently reasonable certain offer, then the court can enforce the parties' agreement.
15.
T
F
The Mail Box Rule permits both the offerOR and the offerEE to always race ahead of the offerOR's chosen method of communication (e.g., surface mail) to revoke that party's previously initiated offer or acceptance not yet received via that method of communication.
16.
T
F
The parties objectively manifest their intent to be bound to the contract by their bargained for exchange of value.
17.
T
F
Under the common law a modification (e.g., novation) is a new contract.
18.
T
F
An accord and satisfaction both discharges an existing contract and creates a new contract. The only permissible consideration for an accord and satisfaction is a liquidated debt.
19.
T
F
A transaction is an illusory "contract" if the party's agreement is not sufficiently reasonably definite: for example, the quantity is not specified with reasonable certainty.
20.
T
F
A transaction measuring quantity off of the buyer's requirements or measuring quantity off of the seller's ability to produce output avoids being an illusory "contract" and is a contract.
LAWS 3930, Business Law Fundamentals
Fall 2014
O'Hara © 2014 D
Business Law Fundamentals
Exam #2
Page 5 of 8
21.
T
F
Unilateral rescission is freedom of contract. Mutual rescission is freedom from contract.
22.
T
F
Under the common law of Nebraska a court will reform an unconsciousable term in a contract as long as removing that offensive term from the contract is not material to the contract.
23.
T
F
All ambiguities in an adhesion contract are interpreted reasonably.
24.
T
F
A contract's terms are interpreted, first, with their plain meaning. If the plain meaning does not remove ambiguity, then the court will resort, in sequential order, to the parties' course of performance, then their course of dealings, and finally resort to trade usage.
25.
T
F
A liquidate damages clause is risk management.
26.
T
F
As compared to a contract between two merchants, in a contract between a consumer and a merchant an exculpatory clause is more likely to be viewed by the court as an unenforceable unconsciousable term.
27.
T
F
Promissory estopple requires a more definite promise than does a contract.
28.
T
F
Only if a natural person reaches the chronological age of majority (i.e., in Nebraska age 19), does that natural person have capacity.
29.
T
F
A natural person who has reached the age of majority rebuttably has capacity. That presumption of capacity can be rebutted with sufficient proof regarding intoxication or with sufficient proof of insanity.
30.
T
F
Nebraska follows the majority rule on restitution by a minor. For example, a minor who voids a voidable contract must return the consideration exchanged by the adult, and the value of that consideration is its value at the time of voiding the voidable contract.
LAWS 3930, Business Law Fundamentals
Fall 2014
O'Hara © 2014 D
Business Law Fundamentals
Exam #2
Page 6 of 8
31.
T
F
A minor may void a voidable contract prior to reaching the age of majority. The minor's silence on the minor's birthday of reaching the age of majority is acceptance: that is, the minor's silence ratifies the contract.
32.
T
F
Because the government is the third party to all contracts, all contracts must be for a legal subject matter.
33.
T
F
In Nebraska there are five transactions that do not need to be contracts to create legally enforceable promises: a covenant not to compete, an employment agreement, a bailment, a warranty, and a license.
34.
T
F
A unilateral mistake exists if the non-mistaking party objectively knows the mistaking party is making a material mistake of fact.
35.
T
F
A mutual mistake exists if both parties make the same material mistake of fact.
36.
T
F
Predatory economic duress is far more likely to be viewed by the courts as duress than is privileged economic duress.
37.
T
F
In Nebraska a fiduciary is rebuttably presumed to have engaged in undue influence (i.e., court presumes fiduciary had the opportunity, had the inclination, and caused a result consistent with taking advantage).
38.
T
F
A signature is any mark with the current intent to authenticate the document or record.
39.
T
F
A contract that could take more than one year to complete is covered by the Statute of Frauds; and thus the signature of both parties is required on a written memorandum that contains the material terms of their contract.
40.
T
F
An oral agreement between the "agent" and the "principal", by the Equal Dignity Rule, permits the "agent" to sign the "principal's" signature to a contract covered by the Statute of Frauds.
LAWS 3930, Business Law Fundamentals
Fall 2014
O'Hara © 2014 D
Business Law Fundamentals
Exam #2
Page 7 of 8
41.
T
F
A guarantor has liability subject to a condition precedent.
42.
T
F
If creditor #A lends money to debtor #B and person #C co-signs for debtor #B and the contract is silent as to the duty of co-signer #C, then co-signer #C may introduce parole evidence as to whether #C signed as a guarantor or signed as a surety.
43.
T
F
By an incorporation by reference clause the four corners of the parties' contract can be expanded to include other documents. However, if the parties use an incorporation by reference clause then that prevents the parties from using a merger clause because a merger clause fixes the boundaries of the four corners of their contract to solely that signed document.
44.
T
F
Both the old common law and the new common law of assignments and of delegations prohibit all assignments and all delegations that adversely materially alter the parties' reasonable expectations.
45.
T
F
The law favors an assignment of all rights because bundling all rights and not changing any duties minimizes alteration of the parties' reasonable expectations.
46.
T
F
An incidental donee that has vested as a third party beneficiary has privity and thus has satisfied all of the requirements for having standing to sue.
47.
T
F
Substantial performance is not a material breach, thus no damages are owed.
48.
T
F
By delivering an anticipatory repudiation to the non-breaching party that delivery activates the non-breaching parties' duty to mitigate damages.
49.
T
F
Operation of law can terminate an offer to contract but operation of law can not discharge a contract because of the USA Constitution Art. I., sec. 10 prohibition on impairment of contracts.
LAWS 3930, Business Law Fundamentals
Fall 2014
O'Hara © 2014 D
Business Law Fundamentals
Exam #2
Page 8 of 8
50.
T
F
Under the common law of Nebraska compensatory contract damages excludes as mere economic loss tort damages and excludes consequential damages as beyond the parties' agreement. Compensatory damages includes incidental damages (e.g., cost of entering market for substitute performance) and includes punitive damages for reprehensible breaches of contract.
51.
T
F
Repeated silence in response to repeated offers is far less likely to be viewed by the court as acceptance than is repeated silence in response to repeated breaches being viewed by the court as waiver.
52.
D.
LAWS 3930, Business Law Fundamentals
Fall 2014
O'Hara © 2014 D
