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Multiple Choice: Each Multiple Choice Question is worth Two Points.
1. On Tuesday, Jon 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, Jon agreed to sell the CDs to Jason, and Jason immediately gave Jon a letter that stated
“Jon, 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 Jon’s receipt of this letter on Wednesday, what best describes Jon’s contract agreement(s)?
a) By forming an agreement with Jason, Jon breached his contract with Sandy because he did not effectively revoke his offer to Sandy.
b) Jon has formed contracts with both Jason and Sandy because Jon did not effectively revoke his offer to Sandy and created an enforceable written agreement with Jason.
c). Jon and Jason have formed a valid, enforceable contract; Jon’s offer to Sandy was properly revoked.
d) Jon 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.
2. 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.
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3. 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.”
4. 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.
5. 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 involves the sale of goods which is valid under UCC rules, thus, the state constitution does not apply.
Answer question 6 regarding the following scenario
Scenario: Jones, a resident of Arizona, booked reservations for a vacation at World Hotels, Inc. in Cabo Mar, Mexico. World Hotels is an international hotel chain incorporated in Delaware with hotels in North and South America; World Hotels has no hotels in Arizona but does advertise and book reservations for all its hotels over the internet, in any state. World Hotels has booked reservations in the past with residents of Arizona.
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.
6. Jones wants to sue World Hotels, Inc. for negligence 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.
Essays: Each Essay is worth six points
1. 1. Refer to the scenario for Multiple Choice question 6 above to answer the following essay question #1 only
Jones sued World 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 World Hotels? Explain fully why or why not. (6 points)
2. Dan, Fran and Stan want to establish a bike sales and rental shop. Dan and Fran will be actively involved in managing the business operations, and Stan is investing most of the money. The 3 want to use a form of business organization that will give limited liability to each of them. Discuss what would be the best type of business organization to limit their liability, and why? (6 points)
3. 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. (6 points)
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