Survey of Business Law

Honor Code Statement. By selecting “True” I am stating that I will receive no assistance from any outside source, including notes, texts or other persons, while taking this final exam.

1) True

2) False

2. Which of these contracts must be in writing to be enforceable according to the Statute of Frauds?

1) Sale of an interest in land

2) Sale of goods greater than $500

3) Employment contract longer than 1 year.

4) All of the above

3. Under the UCC which of the following must be included in a confirming memo sent after conclusion of verbal negotiations in order to satisfy the Statute of Frauds requirement?

1) Price term

2) Delivery terms

3) Quantity of goods

4) All of the above

4. Merchant A and Merchant B are negotiating in good faith for the sales of widgets. Merchant B accepts the terms of Merchant A’s offer, but adds to the bottom of the form “interest rate at 2% for unpaid balance as usual.” Merchant A does not object. Under these facts and UCC 2-207:

1) A contract is formed on the original terms.

2) No contract is formed; they are still negotiating.

3) Contract is formed including the interest rate for unpaid balance.

4) No contract because B’s acceptance is not a mirror image of A’s offer.

5. Bob Cratchit, who has been an employee-at-will with the firm of Scrooge & Marley, was laid off on Christmas Eve after 24 years and within several months of his receiving his full pension. The employee manual that was in effect when Bob began his employee stated that seniority would be given great weight in any layoffs. The manual was changed during Bob’s last year of employment in order to delete mention of any seniority rights. The HR department told him upon discharge that his seniority was not figured in their decision. Under these facts, which of the types of contracts below is the best theory of recovery for his suit for breach of contract?

1) Express contract

2) Implied contract

3) Executory contract

4) Restitution contract

6. Plaintiff and Defendant entered into a written contract for the sale Defendant’s land, a sunny stretch of acreage judging by the pictures and verbal representations Defendant had made. Plaintiff felt glad to have made a deal for it, that is, until he discovered that most of the land was over a toxic waste site. What best describes the situation with respect to the enforcement of the contract given that the defendant misrepresented the land and possibly defrauded the plaintiff?

1) The contract is void from the beginning.

2) The contract is voidable if the Defendant wants out of the deal.

3) The UCC will not allow this contract to be enforced.

4) The contract is voidable at the sole discretion of the Plaintiff.

7. Farmer A leased over 5,000 acres of farm land in northern Ohio for one year. Subsequently he signed a second 1 year lease. During each year he harvested the crops and prepared the land for the next season’s crops. During negotiations for the next lease, he began preparation of the land for planting, as was the local custom. Unfortunately Farmer A and his land lord couldn’t come to terms and the third year’s lease was never signed. Under these facts, what is A’s best theory of recovery of the value of the land preparations he made?

1) A should sue for breach of contract to recover his lost profits for the crops he didn’t get to plant.

2) A should sue in quasi-contract to recovery the value of the work he did in preparing the land for planting in the third year.

3) A has no remedy in contract law because he should have been more careful about working the land before he had a binding contract.

4) A should sue for promissory estoppel because he was relying on the third year’s lease to make his living.

8. Merchant A offers in writing to sell your company certain goods at a certain price and also promises in writing to keep the offer open until June 1. You are considering your options but have not accepted yet as it is still before June 1. Merchant A realizes that he can get a better price by selling the same goods to another company; therefore he sends you a revocation letter informing you the deal is off. He then sends a letter to Merchant C offering to keep his offer to sell at higher price open until June 15 What best describes the legal obligations of Merchant A in this fact pattern?

1) Merchant A can revoke his original offer because you have not accepted.

2) Merchant A can revoke his original offer because you have not paid any consideration to create an option contract to keep his offer open until June 1.

3) Merchant A is still obligated to hold his offer open you as required by the UCC.

4) Merchant A has formed a valid option contract with Merchant C.

9. Brodsky is interested in buying Culbertson’s land. He asks him to hold the land open and not sell to anyone else but him. They sign the following agreement: “In consideration of Culbertson’s promise to not sell to anyone else during the next 30 days, Brodsky will deposit a personal check in an escrow account at his bank, Lone Star Bank, which will be returned to him at the end of 30 days.” Under these facts, which statement is most accurate?

1) A valid option contract is formed.

2) Brodsky must buy the land at the end of the 30 days.

3) Culbertson is obligated to not sell to anyone else during the next 30 days.

4) Brodsky’s promise is illusory; there is no consideration for his side of the bargain.

10. Blue Chip, Inc. has agreed in writing to sell 100,000 of its programmable chips to Mr. Chips, Inc. for $10,000, to be delivered November 9th. Blue Chip has suffered a loss of skilled workers due to a strike and as a result its production capacity is greatly reduced. Wishing to stay on good terms with it customer, Blue Chip immediately informs Mr. Chips of the slowdown. Mr. Chips reluctantly agrees in writing to accept the chips on November 22. Under these facts and under the UCC:

1) This written modification of contract governed by the UCC needs no new consideration to be binding.

2) Mr. Chips can change its mind and immediately demand the chips because Blue Chip is under a preexisting duty to deliver on November 9.

3) Both A and B

4) Mr. Chips can still sue for breach of contract if the chips are not there on November 9th because there was no consideration for its promise to accept a later delivery time.