Midterm Exam BUL 6810 Spring 2021

Instructions: Answerall 3 questionsand fully explain your answers. Each question is worth 33 and 1/3 points.Please used the assigned readings and lectures in formulating your answers.

Question 1:

Jack and Jill are drug smugglers.They make monthly trips to Mexico to buy bulk quantities of drugs.They then load them in their truck's false gas tank and drive them back to the U.S.

Their truck is getting old and they decide to buy a new one.However, the new truck does not come from the factory with a false gas tank in which to hide the drugs.Jack decides to bring the truck to the Mechanic's auto repair garage to have a false gas tank installed.

When Jack arrives at the garage, he makes the following request to the Mechanic: "I need a spare gas tank installed in my truck within 2 days.Don't worry about connecting it to the engine because I never intend to fill it with gas, just drugs."

The mechanic agrees to install the gas tank only if Jack agrees to sign a written contract. The mechanic writes the following contract: "Mechanic agrees to install a gas tank in Jack's truck.Jack agrees never to use the truck for an illegal purpose and will pay Mechanic $1000 for the work." Jack and the Mechanic both sign the contract.

The Mechanic is 17 years old. After the Mechanic installed the tank, Jack refused to pay.

The Mechanic brings a lawsuit against Jack for breach of contract.Will he win?Fully explain your answer.

Question 2:

You own a coffee shop.You take great pride in the coffee you serve, and always make sure that it is served nice and hot.

One day while you are on vacation, the person you hired as manager of the shop decided to make a change in how the coffee is served.Several customers complained that the coffee was not hot enough, so the manager decided to turn up the heat on the coffee maker to its highest setting.

Shortly thereafter, the manager heard a loud scream from a customer who said: "The lid fell of my cup and the hot coffee spilled on my lap.I have been burned."The customer was rushed to the hospital where she was treated for third degree burns over 16% of her body.

The customer decides to sue YOU for the cost of her medical care and for pain and suffering.What is the basis for her lawsuit and will the customer win? Fully explain your answer.

Question3:

YouhavebeenofferedajobbytheBoulder Dry Company.The Director of HR has asked that you sign a two-page contract, which is displayed below.After you review that contract please answer the following eight (8) questions:Make sure toEXPLAINyour reasons as part of each answer.

Finally,wouldyousigntheagreementasitiswritten?Whatissueswouldyouraiseduringcontract negotiations?

Tip:Besuretoanswereachquestion!!!

1.Whichpartyseemstohavehadthestrongerbargainingposition, andwhy?

2.Whichspecificprovisionsfavorthe employer?

3.Whichspecificprovisions favorthe employee?

4.Theparties'mainintentionsinsigningthiscontractweretoprotectthefirm'sconfidentialinformationandtoexplainhowtheCFO couldusethatinformation.Whichprovisionsarerelatedtothosetwopurposes?

5.Whichprovisionsseementirelyunrelatedtothemainpurposes?Whyaretheseotherprovisionsincludedinthecontract?Whatdotheydofortheparties?

6.Whattermsinthecontractdoyoufinddifficulttounderstand?

7.Asapotentialemployeebeingaskedtosignthisagreement,whatconcernsmightyouhave?

8.IfafteroneyeartheemployeeresignsfromBoulderDry,whatprovisionsofthiscontractshouldthe employeehavereviewedbeforeresigningbecausetheywouldaffecthisorherfuture?Whenleavingthecompany,whatactionswouldtheemployeetaketoensurethatheorshewasincompliancewithallobligations?