Exam InstructionsOpen book exam may use textbook, class notesle.docx

Exam Instructions:
Open book exam: may use textbook, class notes/lectures, class
conferences (do not use the internet as many legal sources are
inaccurate; you do not need any material other than the
textbook, class notes/lectures, class conferences to complete the
exam).
No time limit on exam.
Submit exam preferably in word doc to assignment folder under
“Final Exam”.
ALLOW EXTRA TIME TO POST PROPERLY. YOU ARE
ENTIRELY RESPONSIBLE FOR CHECKING THAT EXAM
POSTS PROPERLY. IF YOU HAVE
ANY, ANY
DOUBT IT POSTED PROPERLY, PLEASE
ALSO
EMAIL TO ME AT
[email protected]
. Only the post in the assignment folder will be graded, absent
any technical problems with reading the file in the assignment
folder.
There are 25 multiple choice questions; there are 9 essay
questions.
The exam is worth a total of 100 points.
Section: Section I. Multiple Choice: 25 questions/50 points
USE THE ANSWER SHEET
included at the bottom of this page for answers; copy and paste
it as is, no changes, please.
DO NOT COPY Multiple Choice QUESTIONS.

Each question is worth 2 points.
This is an application-oriented exam; you will not find the
answer to questions verbatim in the text.
If you believe a question is not covered in any of the assigned
materials, you have missed the issue and need to re-think.
Put letter of correct answer on the answer sheet at the bottom of
this page. There is only one correct answer to each question.
1. Sam orally agreed to sell Ramie some land for $500,000.
Ramie paid Sam the $500,000; Sam gave Ramie the deed to the
land. Ramie took possession of the land and began building a
cabin on it. One month later, Sam tried to retake possession of
the land by arguing that the contract for the sale was invalid
because it was oral, not written. Sam sued Ramie to invalidate
the contract and retake the land.
The court will likely conclude that Sam will:
a) Win; the sale exceeded $500 so the contract must be written
to be valid.
b) Win; all land sales contracts must be written.
c) Lose; because the contract was fully executed Sam cannot
rescind the contract.
d) Lose; because Ramie had begun building a cabin on the
property, Sam cannot rescind the contract.
2. On Tuesday, Sam offered to sell his CD collection to Sandy
for $100. Sandy replied, "I'm interested. I'll think it over and let
you know Thursday whether I want to buy the CDs." On
Wednesday, Sam agreed to sell the CDs to Jason, and Jason
immediately gave Sam a letter that stated:
"Sam, I will buy your CD collection for $100. As we agreed, I
will pay you on Friday when I pick up the CDs. Yours truly,
Jason."
Upon Sam's receipt of this letter on Wednesday, what best
describes Sam’s contract agreement(s)?
a) By forming an agreement with Jason, Sam breached his
contract with Sandy because he did not effectively revoke his

offer to Sandy.
b) Sam has formed contracts with both Jason and Sandy
because Sam did not effectively revoke his offer to Sandy and
created an enforceable written agreement with Jason.
c). Sam and Jason have formed a valid, enforceable contract;
Sam’s offer to Sandy was properly revoked.
d) Sam effectively revoked his offer to Sandy, but has not
formed an enforceable contract with Jason because Jason has
not yet paid for the CD collection.
3. Mac and Rhamad signed a business contract with a clause
that provides that if a dispute arises they must submit to binding
arbitration to resolve the dispute. After they had been doing
business together for a year, a dispute arose under the terms of
the contract. Rather than submit to arbitration, Mac filed a
lawsuit against Rhamad. Most likely the court will:
a) hear the lawsuit because Mac cannot be compelled to submit
to arbitration; he is constitutionally entitled to a jury trial if he
requests a trial.
b) conduct a bench trial, then order a remedy without
compelling Mac to submit to arbitration or to a jury trial.
c) compel Mac to submit to arbitration to resolve the dispute.
d) hear the lawsuit in a trial, then compel Mac to submit to
arbitration, if Mac is not satisfied with the trial decision.
4. Roxy, while driving through Wyoming to her home in
Montana, accidentally lost control of her car and drove it
through a window into a store owned by Colt. Colt sued Roxy in
a Wyoming court for damages to his store.
Will the Wyoming court likely be able to exercise jurisdiction
over Roxy?
a) no, because Wyoming has no
in personam

(personal) jurisdiction over Roxy, and cannot exercise its long
arm statute only in cases involving automobile accidents.
b) no, because Wyoming has no
in personam
jurisdiction over Roxy, and cannot justify minimum contacts in
this case.
c) yes, Wyoming can exercise
in personam
jurisdiction in this case because any state court has personal
jurisdiction in every diversity of citizenship case.
d) yes, because Wyoming can assert
in personam
jurisdiction over Roxy under the minimum contacts test.
5. Assume a salesperson intentionally made one of the following
statements - knowing that the statement was false - to a
customer considering a purchase. Which statement could create
liability for fraudulent misrepresentation if the customer made
the purchase?
a) “In my opinion, this car is in flawless mechanical condition.”
b) “This crane will probably lift about 10,000 pounds.”
c) “This car is a real gem.”
d) “This is an original painting by the artist, Pablo Picasso.”
6. Ram was walking down the sidewalk by a construction
project site in a downtown area. The project was owned and
operated by Modern Construction, Inc. and was surrounded by
orange plastic fencing typically used for construction projects.
Ram stopped to watch a metal beam being lifted by a crane on
the construction site. As the beam swung through the air, Ram

thought it was going to fall and jumped forward quickly off the
sidewalk and into the construction project property, falling into
and smashing the orange plastic fencing. As Ram landed inside
the construction project, the beam fell near Ram. The beam did
not hit Ram but some rocks were thrown onto Ram as the beam
fell, cutting his arm badly so that it required 35 stitches.
If Ram sues Model Construction for negligence, the likely result
will be that Ram will:
a) Lose, because he assumed the risk as a trespasser on the
construction site and trespassers can never recover damages.
b) Lose, because pedestrians are always contributorily negligent
in such cases involving trespassing.
c) Win, because it is always foreseeable that a beam could fall
on a rescuing pedestrian.
d) Win, if the beam fell because of Model Construction’s
negligence.
7. Kim carelessly parked her car on a steep hill, leaving the
car in neutral and failing to engage the parking brake. The car
rolled down the hill and knocked down an electric line. The
sparks from the broken line ignited a grass fire that spread to a
barn several yards away. The roof of the burning barn fell and
damaged a passing car owned by Ray. Can Ray likely recover
damages from Kim under ordinary negligence?
a) Yes, because Kim was negligent in parking the car.
b) Yes, because Kim set in motion the chain of events that
resulted in damage to Ray’s car, even though Kim did not
directly hit the car.
c) No, because of the unforeseeable intervening force doctrine.
d) No, regardless of Kim’s negligence in parking the car as her
negligence was not the proximate cause of the accident and
harm that occurred to Ray.
8. Li sued Don in negligence. Li’s losses total $100,000. Under
a contributory negligence system, if Li is found to be
contributorily negligent for her own injuries, what damages will

Li like recover from Don?
a) None.
b) $100,000.
c) $100,000 minus the percentage of fault (e.g., 20%, 60%, etc.)
for which Li was responsible.
d) $100,000 minus the percentage of fault for which Li was
responsible, so long as Li was not more than 50% responsible
for the injuries.
9. Don promised to buy his girlfriend, Sophie, a new car so
Sophie sold her old car. Don now refuses to buy Sophie the car.
Sophie has a job that requires her to have a car to get to work.
If Sophie sues Don to enforce the promise, the likely result is
that the promise will:
a) Be enforced under promissory estoppel because Sophie
reasonably relied on Don's promise, to her detriment.
b) Not be enforced as Sophie was not unjustly enriched simply
because she did not receive the car.
c) Be enforced because the car is a necessity for Sophie and all
contracts for necessities are binding and enforceable for all
parties even if contract formation is flawed.
d) Not be enforced as Don’s promise was a gift to Sophie;
Sophie gave consideration, but Don did not.
10. X and Y agreed that X would sell Y his small business,
including the land on which the business was situated, for
$500,000. Both X and Y knew at the time the contract was
formed that the business was actually worth $800,000. Is this a
valid, enforceable contract?
a) Yes, provided the contract was in writing, in accordance with
the Statute of Frauds and the parties freely consented.
b) Yes, provided the contract was in accordance with state
statutory law that permits real estate sales for 40% or more
below market value.

c) No, because $500,000 is not valid consideration for a
business worth $800,000.
d) No, because X has no pre-existing legal duty to sell his
business.
11. Fine Art Corp. sent a written offer to buy 10,000 pencils
for a total of $10,000 from Faber Pencil Co. Both parties are
merchants. Faber can accept the offer by:
a) Promising to ship the pencils.
b) Promptly shipping the pencils.
c) Accepting the offer on Faber’s own written standard form
contract.
d) All of the above could be valid acceptance.
12. Ralph, a 16-year old minor, is manager for the high school
football team. Ralph signed a contract to purchase alcoholic
beverages from Liquormart, Inc. for the team party. This
contract is:
a) Void as a matter of law because it is illegal to sell alcohol to
minors by state law.
b) Void only if Ralph misrepresented his age and told
Liquormart he was an adult.
c) Valid and enforceable, but Ralph has the right to disaffirm
because he is a minor.
d) Valid and enforceable, if Liquormart knew that Ralph was a
minor.
13. Which of the following activities may involve the use of a
contract, and/or constitute a sales contract?
a) Purchasing medications from a pharmacy.

b) Hiring a contractor to make home repairs.
c) Purchasing insurance policies from an insurance agent.
d) Selling books to customers in a bookstore.
e) All of the above.
14. Fay was admitted to Global Associates, an existing general
partnership on January, 2014. In June, 2014, a partnership debt
incurred in October, 2013 came due. Fay is:
a) Not liable for the debt because the debt was incurred prior to
her joining the partnership.
b) Only liable for the debt up to the amount of her capital
contribution to the partnership.
c) Personally liable only for 50% of the total debt if 50% of the
other partners do not pay.
d) Personally liable for the full extent of the debt if the other
partners do not pay.
15. Kelly, Lars and Mona agreed to be partners in Neighborhood
Deliveries (ND), all splitting the profits equally. Kelly
contributed 70% of the capital upon formation of the
partnership. Later, the partners agreed to dissolve the
partnership as it was not as profitable as they had expected, and
its liabilities were greater than its assets.
The losses are paid by:
a) All the partners in proportion to their capital contributions.
b) All the partners in proportion to their share of the profits.
c) Kelly alone because she contributed the most capital.
d) Lars and Mona because they contributed the least amount of
capital.
16. CC’s Day Spa, LLC, is a member-managed limited liability
company. So long as it is in accordance with state law, and
unless the members previously agreed otherwise, voting rights

will be apportioned according to:
a) Participation in management.
b) Capital contributions.
c) The number of members.
d) Each individual transaction of the LLC, and will vary with
each transaction.
17. Jim and Kiley are architects and members of JK, PC, a
professional corporation. Jim and Kiley supervise Luc, an
employee of JK. As a member of JK, Jim and Kiley
a) Are personally liable for any/all tort(s) committed by Kiley.
b) May be personally liable for malpractice committed by Luc
working within the scope of his job at JK.
c) Has limited liability for any of Kiley’s acts of malpractice.
d) Has no liability for any torts committed by Luc.:
18. Kisha operates River Valley Soccer, an athletic equipment
shop as a sole proprietorship. Taxes on the business’s income
are paid by
a) No one; since it is a sole proprietorship there are no business
taxes.
b) Kisha as the sole owner.
c) The state or federal government if Kisha holds a Small
Business Administration loan acquired to start her business.
d) The business entity of River Valley Soccer, not Kisha
personally.
19. Assume that Virginia enacted a law prohibiting, until further
notice, all grocery stores in Virginia from selling all powdered
spices manufactured in, or shipped from, Maryland. This law
was enacted because it was discovered that the spices recently
manufactured in Maryland were infected with bacteria.
Determine the constitutionality of the Virginia statute. The
statute is:
a) Unconstitutional; it violates grocery store owners’

substantive and procedural due process rights under the 5th and
14th Amendments because they are private businesses.
b) Unconstitutional; the statute imposes an undue burden on
interstate commerce.
c) Constitutional; it is a valid exercise of Virginia’s police
power.
d) Constitutional; the statute imposes an undue burden on
intrastate and interstate commerce.
20. Distinguish which of the following is an advantage of
limited liability companies (LLCs) over corporations.
a) Only one member of a LLC must have unlimited liability as
compared with corporations in which all shareholders have
unlimited liability.
b) LLCs can be formed without any specific steps being taken
by the owners as compared with corporations that must file
Articles of Incorporation with the State.
c) In most cases, a LLC can choose whether to be taxed as a
partnership or corporation, as compared with corporations that
are subject to double corporate taxation.
d) LLCs can choose whether to sell shares publically to
investors, as compared to private corporations that must sell
shares publically to investors.
21. Pete, who collects antique cars, hired Ann as his agent to
find and purchase a 1965 Ford Mustang on his behalf. Ann
found a Mustang like Pete wanted, but Ann fell in love with the
car and purchased it for herself.
Which of the following illustrates Ann’s liability, if any, in her
duty as agent to Pete in this situation?
a) Ann has not violated the duty of loyalty to Pete; she can find
another Mustang for him.
b) Ann has not engaged in self-dealing because she did not
purchase the Mustang with Pete’s funds.
c) Ann usurped an opportunity for Pete, but has not violated the

duty of loyalty to Pete by competing with Pete’s interests.
d) Ann violated the duty of loyalty to Pete by competing with
Pete’s interests, and has usurped an opportunity for Pete.
22. Ed hired Frankie, who is 13 years old, to buy a computer on
Ed’s behalf. Which of the following identifies the legal
relationship between Ed and Frankie?
a) This is a valid agency relationship even though Frankie is a
minor, and Ed would be bound by authorized contracts Frankie
enters into on Ed’s behalf.
b) This is a valid agency relationship even though Frankie is a
minor, but Ed would have the option of disaffirming any
contracts Frankie enters into on Ed’s behalf.
c) This is a valid agency relationship even though Frankie is a
minor, but Frankie would not be entitled to any payment under
the terms of the agency because he is a minor.
d) This is an invalid agency relationship because Frankie is a
minor.
23. Mediation might be more reasonable and appropriate than a
trial in which of the following situations?
a) A lawsuit challenging the constitutionality of a new state
statute.
b) A dispute between neighbors over a property boundary.
c) An alleged theft of patio furniture from the patio of a house.
d) None of the above are appropriate for mediation.
Answer questions 24-25 regarding the following scenario:
Scenario
: Jones, a resident of Arizona, booked reservations for a
vacation at Windell Hotels, Inc. in Cabo Mar, Mexico. Windell
Hotels is an international hotel chain incorporated in Delaware
with hotels in North and South America; Windell Hotels has no
hotels in Arizona but does advertise and book reservations for

all its hotels over the internet.
While a guest in the hotel in Cabo Mar, Jones was walking
across the hotel lobby, and slipped and fell on the wet marble
floor that had been just washed by the maintenance staff. The
staff had placed a “wet floor” sign on the lobby floor on the
side wall of the lobby.
Jones was taken to the nearest Mexican hospital where surgery
was necessary to place a pin in his broken leg. Anxious to
return home and see his regular doctor, Jones flew out of
Mexico shortly after the surgery. He required two plane seats
and an ambulance to meet him at various airports. His health
insurance would not cover his hospital stay in Mexico as it was
located outside the U.S. When back in Arizona, Jones was
unable to work for 8 weeks and required another surgery to
remove the pin. He also required several weeks of physical
therapy.
24. Jones wants to sue Windell Hotels, Inc. in federal court for
$450,000 to recover all his medical expenses in Mexico and the
US; for $50,000 for the cost of the plane trip from Mexico to
Arizona, the 2 plane seats and ambulance costs in various
airports; $10,000 for 8 weeks of lost wages; and $50,000 for
pain and suffering resulting from the injury. Can he sue in
federal court?
a) Yes, because Federal Court always has jurisdiction over
citizens of different states.
b) No, because Federal Court does not have jurisdiction in cases
that do not involve federal laws.
c) Yes, because the Federal Court may have jurisdiction over
citizens of different states and the lawsuit involves damages
greater than $75,000.
d) No, because the Federal Court has no jurisdiction over an
accident that occurred in Mexico.
25. It would be easier for Jones to bring the lawsuit in Arizona

state court, but he wonders if the court can get Windell Hotels
to come to Arizona. Can the Arizona state court impose
jurisdiction over Windell Hotels to bring the company to court
in Arizona?
a) No, because the subject of the lawsuit took place in a foreign
country.
b) No, because the corporation does not have sufficient
minimum contact with Arizona to allow the Arizona court to use
the long arm statute to establish jurisdiction in Arizona.
c) Yes, because the Jones is a resident of Arizona and he is the
plaintiff in the lawsuit.
d) Yes, because Windell Hotels has sufficient minimum contact
with Arizona the state to justify the court’s use of the long arm
statute.
Scroll down, please to begin the essay portion of the exam.
Section: Section II. Essay: 9 questions/50 points
Questions 1-8 = 5 pts each; question 9 = 10 pts
Use the answer sheet at the end of the exam. Number each
answer. DO NOT recopy questions.
Answer each question in complete paragraphs; do not list or
answer in phrases (points will be deducted for doing so).
None of these questions can be adequately/comprehensively
answered in just a paragraph, so be comprehensive, in depth in
your answers, but be careful to not include irrelevant
information.
Points will be deducted for answers that are not well justified,
not sufficiently comprehensive.
Use APA in text citations, as appropriate but please do not use
direct quotes. Use only classroom notes/comment and assigned
reading or watching materials as resources, which is all you
need to complete the exam.
DO NOT use any outside, internet resources as they are often
inaccurate.
Follow directions carefully. Answer all parts of each question.

Be sure to directly answer the question(s) asked.
_____________________________________________________
______________
Refer to the scenario for Multiple Choice questions 24-25 above
to answer the following essay question #1 only:
1. Jones sued Windell Hotels, Inc. for negligence to recover
damages for his injuries resulting from the fall in the Cabo Mar
hotel.
Will Jones likely be successful in the negligence lawsuit against
Windell Hotels? Explain fully why or why not.
2. Clarkson and Lee did not have a contract, but Clarkson
completed extensive landscaping in Lee’s yard by mistake while
Lee was away on vacation. Clarkson sent Lee a bill for the
landscaping service but Lee refused to pay.
Determine the likely result if Clark sues Li to recover the costs
of the landscaping.
3. Racer contracted in writing to drive Owner’s one-of-a-kind,
specially designed championship race car in the Miami 500
Race on July 15 for a fee of $2500. On July 1, the race car was
destroyed in an accidental fire in a storage warehouse where the
race car was being stored prior to the race. Owner owns no
other race cars, so Owner considered the contract discharged.
Racer claimed that she is still entitled to the $2500 fee because
she and Owner had a valid enforceable contract.
Compare and contrast the rights and obligations of Racer and
Owner under the contract as of July 1.
4.
Compare and contrast
the rights and possible liabilities for a merchant selling goods
in “As Is” condition with the rights and possible liabilities for
selling goods with an express warranty stating, “This product is
quality Grade A”.

5. Aaron plans to open Aaron’s Pet Supplies, a pet supplies
outlet, and plans to hire 2 part-time employees. Aaron will
invest only his own money in the business. He does not expect
to make any profit for at least 2 years and to make very little
profit for the next 3 years after the first 2 years. He does expect
to make a profit eventually.
Which form of business organization is most appropriate and
easiest for Aaron to use in opening his pet store – and why?
(there is only one correct answer)
6. There are extensive federal regulations governing airplanes
and pilots. Assume that the state of New York passed a statute
containing numerous requirements, some conflicting with
federal regulations, covering operation of airplanes and
licensing of airplane pilots.
If the New York state statue is challenged as being
unconstitutional, what is the likely result? Describe the
applicable law and rationale for your conclusion.
7. Fran, Joe, and Mike formed a general partnership to operate a
flower shop called Fresher Flowers. One of Fran’s jobs is to
make deliveries using the partnership truck. In one such
delivery, Fran negligently ran a stop sign, striking a car driven
by Peggy, causing damage to the car and injury to Peggy.
Analyze and describe (1) the personal liability of Fran, Joe, and
Mike, (2) the liability of the partnership, Fresher Flowers.
8. Mark plans to open a barbeque restaurant. He can either open
the business as a sole proprietorship or obtain a franchise for
“Smokin’ Hot Bar-B-Q”.
Compare and contrast the advantages and disadvantages of
opening the business as a sole proprietorship and a franchise.
9.

10 points
Leon, a bank vice president, joined Fitness Center, Inc. (FC).
He signed a contract for the membership. The contract stated,
among other things, an exculpatory clause that FC…
“shall not be liable for any claim, demand, cause of action of
any kind whatsoever for, or on account of death, personal
injury, property damage or loss of any kind resulting from or
related to Member’s use of facilities or participation in any
sport, exercise or activity within the club premises…”
While working out at FC, Leon sustained back injuries when a
treadmill on which he was walking suddenly collapsed at FC.
Leon sued FC for his injuries.
Discuss:
a. Is the exculpatory clause in the contract valid or invalid in
Leon’s case and why?
b. Possible product liability claim(s) for which Leon could sue
FC and why product liability claims might be applicable to this
case
c. Possible ordinary (non-product liability) negligence claim for
which Leon could sue FC and why a negligence claim might be
applicable to this case
d. The likely outcome if Leon sues FC under product liability
e. The likely outcome if Leon sues FC under ordinary
negligence
Scroll down for Answer Sheet
ANSWER SHEET: BMGT 380 Fall OL1 2015
Name: ___________________________________
Post this answer sheet in the assignment folder in the Final
Exam tab, please.
Put letter only
of correct answer by each number in CAPS.
DO NOT recopy questions
; do not copy the answer, use only the letter of the correct

answer.
There is only one correct answer to each question.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.

18.
19.
20.
21.
22.
23.
24.
25.
ESSAY
: Write your answer by each essay question number. USE AS
MUCH SPACE AS NEEDED FOR YOUR ANSWER by
expanding the answer space; answers will be longer than the
space below.
1.
2.
3.
4.
5.
6.
7.

8.
9. a.
b.
c.
d.
End of Exam !!!! Thank you for following directions.

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