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Short Answer Questions (Worth 2 points per question)/CHOOSE THE BEST ANSWER 1 . Elderly woman purchases a table from a local furniture store for $5,000. She decides she does not want the table because of a defect. The woman successfully cancels the payment on the credit card for payment of the table, and continues to keep the table despite the store requesting to pick the table up from woman . What statement is true : a. b. she can keep the table because of the defect C . she cannot keep the table d. she is entitled to some money to compensate her the contract has been concluded and it was unlawful for her to stop payment on the credit card. 2. Charles offered to shovel snow from Wilma's driveway after she sprained her ankle late in January. For the remainder of January and throughout February, true to his word, Charles shoveled her driveway approximately 5 times. On March 1, when Wilma's ankle had sufficiently healed and she was able to look after her driveway again, Wilma told Charles how thankful she was for his efforts and that she would give him $20 for each time he shoveled her driveway (or a total of $100). Charles accepted Wilma's offer, but later Wilma refused to pay the $20. Can Charles force Wilma to pay? a. Yes, because all the essential elements of a contract are present - including offer, acceptance and consideration b. No, because Wilma's promise is merely a gratuitous promise since the consideration is in the past C. Yes, because Wilma has a moral obligation to fulfill the promise d. Yes, because Charles changed his course of action and shoveled her snow thinking he might get paid e. No, because $20 is clearly too much for shoveling snow 3. If Fred and Ethyl sign a contract in which Fred agrees to deliver heating oil in exchange for Ethyl's promise to pay for the heating oil and Fred does in fact deliver the heating oil, when Ethyl refuses to pay Fred, Fred's breach of contract action will most likely be for: a. monetary damages b . equity C . rescission d. an injunction 4. Donald's employer fires Donald after only four months on the job, a clear breach of Donald's written twelve-month employment contract. Donald is entitled to recover as damages: 2b . his salary for 12 months C . his salary for 8 months his salary for 8 months, less what he could have earned in another job had Donald made reasonable efforts to find another suitable d. and comparable job nothing, pursuant to the employment at will doctrine 5. In a state such as Michigan that follows a No-Fault statute, a plaintiff may succeed against a negligent driver in a civil lawsuit based on a negligence theory of recovery: a. in all cases where the defendant was negligent where the plaintiff died (in which case the claim would be brought by the estate of the deceased) C. where the plaintiff was permanently disfigured e. all of the above b and c, but not a 6. "A court will generally refuse to evaluate whether or not the value or amount of consideration exchanged in a contract is equal." This statement it (1) True or (2) False 7. Which of the following is not a contract which falls within the Statute of Frauds? P a contract to pay the debt of another person a contract to purchase a dog P a contract for the sale of an easement a two-year employment contract. 8. "If a contract is in written form, it is illegal for the contract to contain language requiring that all subsequent changes to the contract must be in writing." This statement it (1) True or (2) False 9. "When you purchase a loaf of bread at the corner Quality Dairy store, you enter into a contract." This statement it (1) True or (2) False 10. If there is a breach of contract, the objective of a contract case will be to: a. place the parties back into the position that they would have been had there been no breach of contract b. punish the party that has committed breach of contract C. place the parties back into the position that they would have been had there been no contract d. none of the above 11. An essential element of all legally enforceable contracts is that the parties must:have a "meeting of the minds such that there is a mirror image" b. with respect to the exact language that is signed C. not be less than 21 years of age be physically present at the same place when the contract is d. signed none of the above 12. For which of the following contracts will a court generally grant the remedy of specific performance? a. b. a contract for the sale of a unique patent or copyright C . a contract of employment at a large retail store d a contract for the sale of vegetables a contract for the sale of stock that is traded on a national stock exchange 13. The manifestation of present intent to be bound to a contract is called an a. offer b. acceptance C . consideration id possibility 14. Sparty stops to purchase gasoline at the corner store. Sparty speaks with no one, swipes his credit card and fills-up his gas tank. Under these facts: a. a contract exists b . no contract exists C . consideration possibility 15 . Ted, a used car dealer, entered into a written agreement to sell a car to Debra, a sixteen year old high school junior. The agreement provided that Ted would replace any defective parts for one year. Debra agreed to pay Ted $200 per month for three years (which she has done). The age of majority for the jurisdiction is eighteen. After six months, Debra's transmission fails but Ted refuses to replace it. If Debra (or a representative on her behalf) brings a lawsuit against Ted, it is more likely than not that the court will rule: a Debra will prevail, as Ted is bound to the contract Ted will prevail because Debra was a minor C . The contract is void d. The contract is illegalA promise to pay a minor 5400 to paint a garage 20 Within the context of corporation law, the concept of double taxation means that the government taxes both comings and retained earnings of the corporation. the government taxes both management salaries and dividends to managers the government taxes both earning to corporations and dividends d. to individual shareholders. the tax rate for corporations is double that of individuals both b and d 21. Mike and Steve graduate from law school together and open a law practice in Michigan. They are co-owners of the business, share business profits and have joint control over its operation. Given only these facts, the business organization of their law practice is a; sole proprietorship for Steve and a sole proprietorship b. for Mike, exclusively; a partnership a joint venture d. a professional corporation inasmuch as they are lawyers e. a limited liability company/corporation (L.L.C.) 22. Jack and Ryan are partners in a business. They have no written partnership agreement or written agreement of any type. Jack does 60% of the work for the business and brings in 60% of the business. Ryan does 40% of the work and brings in 40% of the business. At the end of the year, if Ryan claims 50% of the business' profits, under the partnership laws of most states he will: a. succeed because he is entitled to 50% profits given these facts b. succeed because, although the Uniform Partnership Act docs not apply in most states. as a partner, he is nevertheless legally entitled to share equally in the profits C. not succeed because under the Uniform Partnership Act, he is only entitled to 40% profits given these facts d. not succeed because the Uniform Partnership Act does apply, but pursuant to the act. he is only legally entitled to a 40% share of the profits both a and d 23. As discussed in class, the primary reason a business will incorporate is: a. a desire to bring in more operating money to protect its owners from personal liabilityC. d. tax savings all of the above 24. Which of the following characteristics does not apply to sole proprietorships: a. b . unlimited personal liability C . joint and several liability d. no barrier to entry the presumed business entity when someone is acting alone in a commercial enterprise and not as an agent for another and not having incorporated 25. Which of the statements (a) or (b) below are correct: a. an attorney or a doctor can limit his or her professional liability for malpractice by incorporating his or her business in what we call a "P.C.", which stands for "Professional Corporation" b. there is absolutely no way an attorney or doctor can limit any personal liability in conjunction with operating any business (contractual liability, tort liability or statutory liability) C . neither statement is correct d. both statements are correct SHORT ANSWER ESSAY QUESTIONS Short Answer Essay Questions (10 points per question) - You are to answer any five of the following questions (place answers on the answer grid). (1) Explain the doctrine of promissory estoppel. (2) Which are the types of contracts that fall within the statute of frauds? (3 ) What is the definition of a contract (using your words is fine - so long as you get all the elements)? (4) What are the possible remedies for breach of contract and when would they be used? (5) How is a corporation created? (6) What would be the circumstances wherein we would allow for a piercing of the corporate veil? (7) What is the concept of a threshold in a no fault case and what does meeting the threshold mean? 7Robert and Jackie Smith, of Michig year old son, James, The Smith's were very excited. James had suffer . were throwing a birthday party for their some very serious illnesses, and the Smith's were very thankful that they were able to celebrate another birthday with Jammies. The Smith's had contrasted with Ted Swan (who goes by the name of "Ted the Clown") for Ted to entertain the children invited to the birthday part. The invitations had been sent out announcing that Ted the Clown was going to be the featured attraction at the party. Three days before the party, Ted called and told the Smith's that he had accidently double- booked himself, and would not be attending the party. The Smith's were to have paid Ted 5300 pursuant to their contract with Ted (drafted by Ted). After a sleepless night, and having taken a day off of work to try to find a replacement, the Smith's found Mike the Clown who agreed to perform at the party for the amount of $500. The Smith's likely can bring a successful cause of action against Ted Swan under Michigan law for: a. $500 b. Punitive Damages C . Non Economic Damages, Only $200 17. What is meant by "freedom of contract": a. The parties to a contract can ignore the law b . The parties are free to determine the content of their contracts so long as they do not agree to something unlawful C. Contract Law is essential to the democratic process d. Courts are free to force parties into agreements 18. A provision requiring a construction contractor to pay $300 for every day he or she is late in completing the construction is a liquidated damages provision, is/are: a. unlawful b. illegal C . liquidated damages d. punitive damages 19. Which of the following promises is supported by legally sufficient consideration and will be enforceable? A person's promise to pay a real estate agent $1,000 in return for a. the real estate agent's earlier act of not charging commission for selling the person's house A parent's promise to pay one child $500 because that child is not b. as wealthy as the child's sibling A promise to pay the police $250 to catch a thief C