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Multi Choice Question

MULTIPLE CHOICE: 1 point each Instructions: Select the best answer and if you wish to defend your answer, give a two-to-three sentence explanation as to why you believe it is the correct choice.

1. Sam orally agreed to sell Jamie some land for $500,000. Jamie paid Sam the $500,000; Sam gave Jamie the deed to the land. Jamie 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 Jamie 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 under the Statute of Frauds. 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 Jamie had begun building a cabin on the property, Sam cannot rescind the contract.

2. 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 hearing, 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.

3. 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 jurisdiction in this case because there is a federal question involved due to the diversity of citizenship between the parties. d) Yes, because Wyoming can assert in personam jurisdiction over Roxy under the minimum contacts test.

4. 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.”

5. 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 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 liable under contributory negligence 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.

6. 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 because Sophie received money from the sale of her old car; if she also received the new car from Don, she would be unjustly enriched. 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.

7. 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.

8. 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.

9. Fay was admitted to Global Associates, an existing general partnership on January 2014. In August 2014, a partnership debt that was 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.

10. 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.


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