>> Business Law and Ethics
Multiple Choice questions
1. Computers, Inc. has an employee who has special accommodation needs in order to perform her job. These special accommodations would cost Computers $10,000 to implement. The Americans with Disabilities Act (ADA) provides that an employer is required to make "reasonable accommodation" for employees with a disability, but doesnot define "reasonable accommodation".
Assume that the size of an employer-companydetermines the maximum amount of money that would be reasonable for an employer tospend to make "reasonable accommodation" for a disabled employee. Under the principleof stare decisis, determine which of the following would apply to Computers.
A. If a similar-sized employer-company had been required by a court to spend $15,000 in thepast for reasonable accommodation, Computers likely would be required to spend the$10,000.
B. If a similar-sized employer-company had not been required to spend $15,000 in the past forreasonable accommodation, this would ensure that Computers would not have to spend the$10,000.
C. Whether a similar-sized employer-company had been required by a court to spend $15,000 inthe past for reasonable accommodation would be irrelevant for Computers because itoccurred in the past.
D. Whether a similar-sized employer-company had been required by a court to spend $15,000 inthe past for reasonable accommodation would be irrelevant for Computers; courts make alldecisions on a case-by- case basis.
2. A city ordinance permits street vendors to operate only within certain commercial areas of the city to prevent dangerous traffic congestion. The street vendors sued the city claiming that the restrictions were a violation of their equal protection rights as other businesses are not restricted to operating only in certain commercial areas within the city.
How would you classify the ordinance?
A. Constitutional; because the city has a justifiable purpose in enacting the ordinance, it does not violate the equal protection rights of street vendors.
B. Constitutional; because street vendors are private businesses, they are not protected by the equal protection clause of the 14 th Amendment.
C. Unconstitutional; the ordinance unduly discriminates against street vendors as compared to other business owners and thus, violates the vendors' equal protection rights.
D. Unconstitutional; privately owned vendors, unlike public businesses, have a constitutional right to conduct business in any commercial area of their choice.
3. 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 Maryland statute. The statute is:
A. Unconstitutional; it violates grocery store owners' substantive and procedural due processrights under the 5 th and 14 th 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 Maryland's police power.
D. Constitutional; the statute imposes an undue burden on intrastate and interstate commerce.
4. Jack and Jo, residents of Colorado, were hiking in Nevada when a dog being walked by its owner, Will, bit Jo causing injury. Jack wants Jo to sue Will, a resident of Montana,but Jo does not want to incur the cost of a lawsuit. Identify which of the following bestillustrates Jack's legal right to sue in this case.
A. Jack has standing to sue Will, but only in federal court since Colorado, Nevada and Montanastate courts all meet the minimum contacts test for jurisdiction.
B. Jack has standing to sue Will, but only in Nevada because neither Colorado nor Montanameets the minimum contacts test for jurisdiction.
C. Jack does not have standing to sue Will in Nevada, Colorado or Montana.
D. Jack does not have standing to sue Will because he is not a resident of Nevada where theinjury to Jo occurred.
5. Saul orally agreed to sell Ramie some land for $500,000. Ramie paid Saul the $500,000; Saul gave Ramie the deed to the land. Ramie took possession of the land and began building a cabin on it. One month later, Saul tried to retake possession of the land by arguing that the contract for the sale was invalid because it was oral, not written. Saul 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 Saul cannot rescind the contract.
D. Lose; because Ramie had begun building a cabin on the property, Saul cannot rescind the contract.
6. 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.
7. 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 boundby 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 theoption 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 beentitled 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.
8. Ann drove her car to an automatic car wash and went through the washing/cleaning process. Customers are expected to pay after completing the washing/cleaning process, butAnn refused to pay for the car wash. A court would most likely conclude that:
A. Applying the subjective intent test, Ann is not bound to pay for the car wash because shebelieved that it was a free service.
B. Applying the objective test, there was no clearly communicated offer and acceptance, thusno enforceable contract; Ann is not bound to pay for the car wash.
C. Ann's actions implied that she intended to pay for the wash; she is legally bound to pay forthe car wash.
D. Ann's actions implied that she intended to pay for the wash, but she is not legally bound topay for the car wash as there was no written agreement.
9. 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.
10. Nat signed a two-year contract to play soccer for the Scores, for $100,000 per game.During the second year of his contract, and just before a big game, Nat demanded that theteam owner pay him an additional $5000 per game on his contract, starting with thecurrent game. The owner reluctantly agreed to the new contract terms because Nat wasthe team's leading scorer. At the end of the season, Nat demanded the additional $5000 pergame; the owner refused to pay. What best describes the new contract between Nat andthe owner?
A. It is unenforceable because the owner agreed to Nat's contract terms under economic duress.
B. It is unenforceable because both parties did not give new legal consideration for the new contract.
C. It is enforceable because both parties gave legal consideration for the new contract.
D. It is enforceable because under the UCC rules, all contract modifications are valid if the parties consent.
11. 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.
12. 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."
13. Buildings-R- Us (BRU), a construction company, was hired to blast a hole for a newbuilding's foundation. A box of dynamite, sitting on the construction site, ready for use inthe blasting, spontaneously exploded and injured 2 passing motorists.
If the motorists sue BRU, identify the likely result. BRU will be held:
A. Not liable under strict liability because BRU had not yet actually ignited the dynamite.
B. Not liable under any legal doctrine as it was not foreseeable that the dynamite wouldspontaneously explode.
C. Liable under negligence because dynamite is abnormally dangerous.
D. Liable under strict liability because dynamite is abnormally dangerous.
14. 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.
15 . Lee sued Don in negligence. Li's losses total $100,000. Under a contributory negligence system, if Lee is found to be contributorily negligent for her own injuries, what damages will Lee like recover from Don?
C. $100,000 minus the percentage of fault (e.g., 20%, 60%, etc.) for which Lee was responsible.
D. $100,000 minus the percentage of fault for which Lee was responsible, so long as Lee was not more than 50% responsible for the injuries.
16. 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.
17. 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.
18. 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.
19. 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.
20. 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.
21. 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.
22. 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.
23. 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.
24. 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 25-26 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.
25. 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 parties who are 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.
26. 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 II. Essay: 8 questions/48 points
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.
Answer all parts of each question.Be sure to directly answer the question(s) asked.
Refer to the scenario for Multiple Choice questions 25-26 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.
A. Compare and contrast the advantages and disadvantages of mediation, non-binding arbitration and court trial litigation.
B. Give an example of a type of dispute for which mediation is appropriate.
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. 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.
6. 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.
7. Patti entered a running marathon, sponsored by ABC Co. During the race, Patti fell and broke her ankle.
Determine the likely result if Patti sues ABC for damages for her injury - and why.
8. 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.
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.