TRUE - FALSE (40 points - two points each)

1. When a debt is unliquidated (in dispute) as to the amount owed, a debtor who sends a check and marks the check "paid in full" will not be liable for any balance owed under the doctrine Accord and Satisfaction once the check is deposited/cashed..

2. There is no need for consideration in an "option" contract.

3. If you sell a used car the buyer receives the implied warranty of merchantability even if nothing about warranty is mentioned.

4. The UCC ("Uniform Commercial Code") sales articles apply to mixed goods/service contracts if the predominant part of the contract is the sale of goods.

5. The "Mailbox Rule" states that an offer is accepted when the acceptance is mailed (if the means are authorized) NOT when received.

6. A buyer can seek "Specific Performance" of a contract if the item is unique.

7. If you are under 21 years of age, you do not have the capacity to enter into a contract so your guardian would have to enter into the contract on your behalf.

8. If a lease has been assigned ("sub-let"), the landlord has the right to pursue both the lessee and the sub-lessee for payment of the rent even if the landlord was not a party to the sub-lease.

9. If a tenant breaches his one- (1) year lease with his landlord after six months the landlord must make an effort to relet the premises under the doctrine of Liquidated Damages.

10. Failure of consideration is a real/universal defense against a holder in due course of a negotiable instrument.

11. Under the UCC, a seller and a buyer of goods may agree to leave the price terms of goods open in their contract and still have an enforceable contract.

12. Once an offer has been accepted, that acceptance cannot be revoked.

13. Entrusting goods to a "merchant" under the UCC empowers him to transfer ownership rights to a buyer in the ordinary course of business.

14. The Commerce Clause of the United States constitution authorizes the Federal Government to regulate intrastate commerce.

15. An "IOU" is enforceable but not negotiable.

16. Banks are allowed by the UCC to pay postdated checks even before the date written on the check.

17. Silence can be acceptance of an offer.

18.A contract with an unemancipated minor (under 18 years old) is VOIDABLE by either party to the contract.

19. A negotiable promissory note is still negotiable even though it is secured by a real estate motrtgage.

20. In an auction "without reserve", the highest bid is the acceptance of the offer

MULTIPLE CHOICE (10 points - two points each)

1. Ken offers to pay Johnny $10.00 if Johnny will mow the lawn next Saturday and Johnny agrees to do the job. The contract is:
   1. bilateral, executory
   2. unilateral, executory
   3. bilateral, executed
   4. unilateral, executed

1. Buyer ordered goods from seller under the terms FOB NYC.Buyer's place of business is in NYC, and the seller's place of business is in San Francisco. Which of the following is the most accurate?
   1. This is a shipment contract
   2. Buyer assumes the risk of loss during shipment
   3. Seller assumes the risk of loss during shipment
   4. Title to the goods transfers midway between NYC and San Francisco

1. In a typical criminal case, a plaintiff must prove her case
   1. Through a preponderance of the evidence
   2. Beyond a reasonable doubt
   3. By indisputable proof
   4. Within an iota of the truth

1. The doctrine of promissory estoppel
   1. is a substitute for an offer in the formation of a contract
   2. allows enforcement of a promise in the absence of actual consideration
   3. requires actual consideration to be applicable
   4. is the basis for a firm offer

1. The statute of frauds requires all of the following types of contracts to be in writing except for
   1. contracts for the sale of goods priced at $500 or more
   2. contracts that can be performed within one year from the date it is made
   3. contracts to be liable for another person's debts
   4. contracts involving title to real property

SHORT ANSWER (50 points - two points each)

1. Distinguish the warranty of "merchantability" from the warranty of "fitness".

1. If you wanted to sell a product without any warranties express or implied, what term would you use in the sale?

1. Describe three types of "defects" which will make a manufacturer liable to an injured party in a product liability action.

1. Carla Contractor agrees to supply the lumber for Harry Homebuyer to build a house for $5,000.00 (a UCC contract). Halfway through the project, Carla learns that she will lose money on the job. She therefore refuses to send any more lumber and asks for a higher price. Carla sends the lumber the house after Harry promises to pay an additional $1,000.00. Is Harry's promise to pay enforceable?

1. Rash an employee signed a covenant not to compete contained in his employment contract with a medical partnership. It prohibited an employee physician who resigns from his employment with them from engaging in the practice of medicine or surgery within a 2-mile radius of the partnership office for a period of two years. Is the agreement enforceable? Why or why not?

1. Seller, a used car dealer, brought a car to Buyer, another dealer, for inspection in the hope that a sales agreement could be reached. Two of the Buyer's employees examined the car and test-drove it. Buyer thereafter agreed to buy the car. The car had several defects that were not hidden. Can the buyer revoke his acceptance because of these readily discernible defects? Why?

1. Paul, a citizen of Louisiana, was crossing a street in New Orleans when he was struck by a UPS, Inc. truck. UPS, Inc. is a Texas corporation with its Principal Place of Business in Texas and doing business in Texas and Louisiana. Paul sues UPS, Inc. in the Federal District Court in New Orleans, LA. Paul's complaint alleges damages in the amount of $100,000. Does the federal court have jurisdiction? Why?

1. How would a state court in Louisiana get jurisdiction over the person of Joe, an out of state citizen because of an accident which occurred in Louisiana if Joe could not be served in Louisiana?

1. If an accident happened in Florida between a citizen of Louisiana (the Plaintiff) and Mississippi (the Defendant), what state(s) would venue be proper?

1. Explain what is meant by the seller's "right to cure" and the buyer's "right to cover".

1. Describe the "Mirror Image" rule in common law contracts and the effect of the Uniform Commercial Code on the rule.

1. Explain the concept of "ratification" in contract law.

1. Police seize some incriminating documents without a search warrant at defendant's house without his consent. What constitutional amendment defense should defendant raise?

1. Beachcomer, a coin dealer, sues to rescind a purchase by Boskett, who paid $50 for a dime Beachcomer thought, was minted in San Francisco. In fact, it was minted in Denver. Boskett knew it was minted in Denver. Explain who should win.

1. Explain the "Parol Evidence Rule".

1. You represent a tobacco company who is being sued for selling someone a defective product (cigarettes) which caused that person to develop lung cancer. The cigarette pack had a warning label stating smoking is hazardous to your health. What legal defense would you raise?

1. You are seeking "Compensatory Damages" for an auto accident you were involved in and injured. List the 6 types of "Compensatory Damages" you can recover.

1. List the requirements of a contract.

1. If you lose a case on the appellate court level and wanted to take the case to the Supreme Court what "Writ" would you file to ask the Supreme Court to hear your case?"

1. State the requirements for a "negotiable instrument".

1. State the requirements for a "holder in due course".

1. Mark makes and delivers a negotiable promissory note payable to Peter. Peter endorses it and delivers it to Art. Art, without signing it, delivers it to Bill. Bill endorses and delivers it to Carl. Carl endorses "Without Recourse" and delivers it to Dick.Dick presents the instrument to Mark, who replies: "I'm sorry, but I have no money." From whom can Dick collect the note?

1. The facts are the same as Question 23 except Mark informs Dick that the signature on the note is a forgery. From whom can Dick collect the note?

1. Amy delivered stereo equipment to Tex, a service station operator for resale. (Consignment) The service station was burglarized about two weeks later and the stereo equipment was stolen. Who bears the risk of loss? Why?

1. State the 4 elements required to prove a negligence case