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spring 05 midterm makeup by HC12071100392


									                                         Business Law 201
                               Spring 2005 Mid-Term Make-up Exam
                                      Professor Steven L. Isler
                                           May 27, 2005

1. Of the following acts, the one that is not a crime is

[A] arson.
[B] embezzlement.
[C] slander.
[D] shoplifting.

2. Of the following actions, the best example of larceny is

[A] blackmailing someone.
[B] stealing an automobile.
[C] breaking into a store to steal money.
[D] taking another’s property by force.

3. Joels, a bank vice president, regularly took money for his own use from customer accounts
and made false entries in the bank records. Joels committed the crime of

[A] robbery.
[B] blackmail.
[C] embezzlement.
[D] burglary.

4. A basic similarity between the adult and juvenile criminal justice systems is

[A] that both a juvenile and an adult are guaranteed constitutional rights and due process at
pretrial, trial, and posttrial proceedings.
[B] that both a juvenile and an adult may be arrested on less than probable cause.
[C] that the primary purpose of both the juvenile and adult criminal justice systems is
protection and treatment.
[D] none of these.

5. Four essential elements are necessary to create a valid contract. Which of the following is not
one of these elements?

[A] Something of value must be given by each party.
[B] The parties must be competent.
[C] The offeror and offeree must reach agreement.
[D] The agreement must be in writing.

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6. Whether a contract is unilateral or bilateral depends on the

[A] offeree.
[B] type of acceptance required of the offeror by the offeree.
[C] type of acceptance required of the offeree by the offeror.
[D] performance required of the offeror.

7. Joy promised to pay Terry $150 if he repaired Joy’s computer. Terry repaired the computer
but has not yet been paid. At this point, this contract is

[A] valid, bilateral, and executory.
[B] valid, unilateral, and executory.
[C] valid, bilateral, and executed.
[D] valid, unilateral, and executed.

8. Young offered to sell his boat to Alvarez for $2,000 without knowing that the boat had just
been destroyed. This agreement is

[A] voidable.
[B] unenforceable.
[C] void.
[D] valid.

9. A voidable contract

[A] lacks one of the essential elements of a contract.
[B] is enforceable against all parties unless a party has a right to back out of it.
[C] is limited to simple transactions.
[D] is required to be in writing.

10. A contract implied in law is known as a(n)

[A] unilateral contract.
[B] quasi contract.
[C] voidable contract.
[D] express contract.

11. Consideration may be

[A] a promise not to do something you have the legal right to do.
[B] money.
[C] property.
[D] all of these.

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12. Which agreement is unenforceable because of lack of valid consideration?

[A] Philips promised his nephew $5,000 if the boy would refrain from smoking until he reached
21 years of age. Because of this promise, the nephew complied.

[B] Boyd agreed to sell his used motorboat to Yates for $300. Yates tendered the $300.

[C] Johnson agreed to donate $1,000 to the United Hospital Building Fund. Based upon this and
similar promises, construction was started.

[D] Davis promised to give his neighbor’s young son $50 if the boy would refrain from
trespassing on his property. Because of Davis’s promise, the boy complied.

13. Jennings found and returned Martin’s lost wallet. Martin promised to give Jennings a
reward the next day after he cashed a check. Martin is not legally bound to pay a reward as he
promised, because the consideration for the promise was

[A] present.
[B] not legal.
[C] future.
[D] past.

14. A beauty shop owner offered one of her employees a bonus of $100 over a six-month period
if she would promise to give all customers excellent service. This promise by the beauty shop
owner is

[A] sufficient to give the employee the right to sue if she does provide good service and the
beauty shop owner fails to pay.
[B] not valid because the employee is already legally bound to give excellent service.
[C] based on past consideration.
[D] based on forbearance.

15. In which of the following situations would the courts enforce an oral agreement to pay extra

[A] A builder promises to complete a contract on the date previously agreed upon if he is given
extra compensation.

[B] An accountant promises to complete an audit 60 days ahead of time if she is given extra

[C] A police officer promises a neighborhood deli owner that, for a fee, he will keep a sharp
lookout for burglars on the nights that he is on duty.

[D] In no case will the courts allow the payment of extra compensation when the request is
based on an oral contract.

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16. A creditor’s agreement to accept part payment as full settlement of a debt is enforceable

[A] at all times.
[B] in all of these cases.
[C] if the creditor receives additional consideration from the debtor.
[D] when the due date is extended.

17. Part payment of a liquidated claim
[A] discharges the remainder of the claim if the creditor marks “paid in full” on any receipt
given to the debtor.

[B] discharges the remainder of the claim if, in addition to the part payment, the debtor gives
additional consideration.

[C] discharges the remainder of the claim.

[D] discharges the remainder of the claim if the debtor states that he or she has no more funds
with which to pay the remainder of the debt.

18. If a person owes several people money, that person can give each of the creditors part of the
total amount owed. If this arrangement is agreed to by all creditors, it is called

[A] promissory estoppel.
[B] a pledge.
[C] a composition of creditors.
[D] past consideration.

19. Promises to make charitable subscriptions

[A] are based on promissory estoppel.
[B] may not be valid unless large sums of money are involved.
[C] are not legally enforceable.
[D] are exempted from the necessity of consideration.

20. Miller said to Avid, a retail merchant, “Deliver this $1,500 computer to my nephew Ronald
McDonald and send the bill to me.” Avid did as he was requested, but Miller refused to pay the
bill, claiming that the nephew was really not interested in using the computer. Is Miller liable?

[A] Yes; an oral promise to pay the debt of another is binding.

[B] No; an oral promise to pay the debt of another is not binding.

[C] No; there was no consideration for the oral promise.

[D] Yes; an oral promise to pay one’s own debt is binding.

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21. One example of a contract that must be in writing is a contract to

[A] pay a friend’s debts.
[B] care for someone for the rest of her or his life.
[C] rent an apartment for six months.
[D] purchase a computer for $350.

22. A contract to answer for the debt of another person is called a

[A] prenuptial agreement.
[B] contract of adhesion.
[C] contract of guaranty.
[D] parol contract.

23. The statute of frauds applies only to

[A] informal contracts.
[B] executory contracts.
[C] executed contracts.
[D] formal contracts.

24. Reba was appointed as administrator of her father’s estate. She orally promised Mintz, a
creditor of the estate, that if there were inadequate funds in the estate, she (Reba) would pay the
debt from her personal funds. To be enforceable, the agreement must be

[A] for debts over $500.
[B] for a period of less than one year.
[C] in writing.
[D] for debts for personal property only.

25. Mangin agreed to sell and Restov agreed to buy a small strip of land adjoining Restov’s
property. This agreement would be binding if made

[A] orally with a small down payment.
[B] through an exchange of telephone conversations.
[C] through an exchange of letters.
[D] orally before two witnesses.

26. After a minor reaches the legal age of majority, he or she may disaffirm an executed contract
for a luxury made while a minor only if he or she

[A] disaffirms in writing.
[B] accurately represented his or her age when the item was purchased.
[C] acts within a reasonable length of time.
[D] returns the luxury item in new or unused condition.

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27. Bell, a minor, entered into a contract to sell some real property he owned to Franz, an adult.
Bell may legally disaffirm this contract

[A] on the day he signs the contract of sale.
[B] within a reasonable time after attaining his majority.
[C] any time before attaining his majority.
[D] none of these.

28. After Michaels, a minor aged 16, purchased a compact disc player from Rollins Electronics,
he decided to return it. Before he got a chance to do so, his little brother smashed it with a
hammer. In order to disaffirm the contract under the majority view, he

[A] must pay for any damage to the compact disc player.

[B] need only return the damaged compact disc player.

[C] must pay for any damage and pay for the use of the compact disc player.

[D] must pay for any depreciation to the compact disc player.

29. Ratification of a contract by a minor may be

[A] implied from the minor’s actions.
[B] written.
[C] oral.
[D] all of these.

30. When a minor misrepresents his or her age, most states will

[A] permit the minor to disaffirm an agreement and recover any consideration paid.

[B] not permit the minor to disaffirm an agreement and recover any consideration paid.

[C] allow the adult to recover for damages resulting from the minor’s misrepresentation.

[D] not permit the minor to disaffirm an agreement and recover any consideration paid, and
most states will allow the adult to recover for damages resulting from the minor’s

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31. Craven, a minor, sold her exercise bicycle to Franklin, an adult, who resold it to Lavin, a
good faith purchaser. Lavin’s title to the bicycle is

[A] void.

[B] unenforceable.

[C] valid.

[D] voidable.

32. An intoxicated person may avoid a contract on becoming sober

[A] under any circumstances.
[B] only if he or she was slightly intoxicated.
[C] only if the other party had reason to know that the person was drunk and did not
understand the consequences of the transaction.
[D] only if the contract is one for necessaries.

33. Martinson used his van to deliver illegal drugs to users throughout a particular city. Because
the van was old, he decided to trade it in for a new van. The contract that Martinson makes with
the car agency to purchase a new van is

[A] legal; therefore, Martinson would have to pay for the van when it is delivered to him.

[B] illegal; therefore, Martinson would not have to pay for the van when it is delivered to him,
but when Martinson receives the van, he must return it to the car agency.

[C] illegal; therefore, when Martinson receives the van, he must return it to the car agency.

[D] illegal; therefore, Martinson would not have to pay for the van when it is delivered to him.

34. A state’s gambling statute is most likely to be violated by

[A] an all-night poker game at a private party in which one participant in the game takes a “cut”
of the winnings of the other game participants.

[B] a state-run lottery.

[C] parimutuel betting at racetracks.

[D] all of these.

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35. The First National Bank lends Simmons $1,000. Simmons agrees to pay the bank the original
loan plus $1,500 interest within a six-month period. This is an example of a(n)

[A] revolving loan.
[B] usurious loan by the First National Bank.
[C] exculpatory clause in a contract involving a loan of money.
[D] price-fixing agreement.

36. Nick asked Dom if he could store a tractor on Dom's property. A few days later, Dom
overheard Nick tell a mutual friend that the tractor was stolen. Unbeknownst to Nick, Dom was
a reliable police informant, who advised the local sheriff's office of Nick's statement. Dom told
the sheriff that the tractor was now located on Dom's property, but that Nick had kept an
ignition key. He told the sheriff that Nick was actively trying to sell the tractor by phoning
potential buyers.

With Dom's consent, the sheriff inspected the tractor. By tracing an identification number
stamped on the tractor, the sheriff located the owner, who confirmed that his tractor had
recently been stolen. The sheriff obtained a warrant authorizing a search of Nick's house for the
stolen tractor's ignition key, as well as "any other property which would be considered

During a search of a closed cabinet in Nick's house, the sheriff found a gun wrapped in clear
plastic and adjacent to it, an ignition key for the tractor. Later, another gun wrapped in cloth
was found hidden underneath Nick's bathroom sink. Both guns were unregistered.

The sheriff also obtained a warrant to place a wiretap on Nick's telephone line. The warrant
application specified Nick's home address and the phone number for the telephone line, the
only one which serviced his residence. It also set forth the reasons for believing Nick committed
a crime and the type of communications sought to be intercepted, which included admissions of
his theft of a tractor and his efforts to sell it by telephone. No other representations appeared in
the application for the warrant. Between the time of the issuance of the warrant, which specified
the phone number set forth in the application, and the installation of the wiretap, the phone
number for the line was changed, although the line continued to be listed in Nick's name. After
40 days, the sheriff intercepted a telephone communication by Nick that he stole the tractor. The
following day Nick was arrested and charged with grand larceny and possession of unlicensed

Nick pled not guilty to the charges, and his counsel moved to suppress the evidence seized in
the search and any admissions recorded during the phone wiretap. As the newest member of
the District Attorney's office, you are asked to prepare a memorandum for the District Attorney
outlining the likely outcome of the motion to suppress.

Was the search Warrant Valid?

[A] Yes, whether there was probable cause or not
[B] Yes, because it was based on probable cause
[C] No because it violates the 5th Amendment
[D] No, because the warrant was not specific enough in detailing the items searched for

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[E] Yes, because the warrant was executed in a timely fashion

37. Using the fact pattern in question 36, should any of the evidence gathered during the search
be suppressed?

[A] No, because both guns were in “plain view.”
[B] Yes based on the 6th Amendment
[C] No because the warrant was valid
[D] Yes because the search was improper, both guns and the key should be excluded

38. Whit Fowler, owner of a small camera shop, sent the following letter to a good customer on
March 1, 1998: "Dear Sam: I am pleased to offer you a Y-model camera at a special price of $600,
payable in cash or by check. My offer will remain open until July 1, 1998. W.F."

When Sam received the letter on March 5, he called Whit to ask if he could pay with a credit
card. Whit said, "No." Sam said he'd think about Whit's offer some more.

On March 14, Whit sent Sam a note withdrawing his offer. Sam received the note on March 15.

On March 18, Sam sent Whit the following: "Whit: I accept your offer, and enclose a $600
check. However, I expect you to provide free repairs if the camera breaks within a year. Sam

On March 26, Whit returned Sam's check, and refused to deliver the camera to Sam, claiming
there was no contract.

Sam called other dealers for a Y-model camera, but most were out of stock. On April 15, Sam
bought a Z-model camera from another dealer for $800. The Z-model is similar to the Y-model,
but has a special lens the Y-model lacks. The market price of a Y-model camera was $700 in late
March, but rose to $900 in mid-April, when it was unexpectedly endorsed by the host of a
national television talk show. Does Sam have any rights against Whit?

[A] Yes, because Whit's note of 3/14 was not an effective withdrawal of the offer.

[B] Yes, because Whit is a merchant and a merchant who makes an offer in writing, in which
s/he unambiguously states that the offer will be held open for a certain period of time, will not
be allowed to withdraw the offer even if no consideration is paid

[C] Yes, because although Whit's firm offer was for four months, Sam’s acceptance came well
within the three-month maximum, and so the offer was still irrevocable at that time.

[D] All of the above

[E] No

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39. Refer to question 38 above. Does the contract for sale satisfy the Statute of Frauds?

[A] No and the Statute of Frauds need not be satisfied in this case

[B] Yes because to comply, it must be in writing, with the quantity identified, and it must be
signed by the party to be charged and all of these elements are satisfied here.

[C] I do not know but the next time that you tell me that the make-up exam will be hard, I’ll
believe you!

[D] No because Whit only initialed the letter

40. Police officers Martin and Driscoll received a radio call reporting a vehicle leaving the scene
of an armed robbery. The following information was provided to officers Martin and Driscoll
about the incident: a detailed description of the car, its location, the driver, and sufficient
information to establish probable cause to believe that the car and driver were connected to the
armed robbery in which the driver of the car took a black attaché case containing three valuable

Based on that probable cause, but with no warrant, officers Martin and Driscoll pulled over a
car matching the description about half an hour after receiving the report. Upon stopping the
car, the officers noticed that, in addition to the driver (Abel), a passenger (Barton) was sitting in
the car.

The officers ordered both men out of the car. They immediately cuffed Abel, placing him under
arrest. They ordered Barton to put his hands out to be cuffed as well, but Barton, instead of
complying, attempted to flee. As he was fleeing, he dropped a glassine envelope, which Officer
Martin picked up. Officer Martin determined that it contained cocaine.

Immediately thereafter, Officer Driscoll overpowered Barton, cuffed him, and placed him under

The police then searched the car. They found the black attaché case under the passenger seat,
opened it, and determined that it contained the three missing necklaces. They then found a
leather jacket on the back seat, unzipped its pockets and found a small quantity of heroin in one
of them. Finally, they opened the trunk where they spotted a small sack. Barton exclaimed:
"That belongs to me. This guy just picked me up hitchhiking about ten minutes ago and let me
throw my stuff in the trunk." Nevertheless, the police opened the sack, which contained a small
quantity of marijuana.

Abel and Barton do not contest the search and seizure of the attaché case or any charges arising
from that search and seizure. However, Abel was charged with possession of heroin and
marijuana and seeks to suppress the drugs as fruits of illegal police conduct. Is Abel Correct?

[A] No

[B] yes

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           Answer Key

[1] [C]
[2] [B]
[3] [C]
[4] [A]
[5] [D]
[6] [C]
[7] [B]
[8] [C]
[9] [B]
[10] [B]
[11] [D]
[12] [D]
[13] [D]
[14] [B]
[15] [B]
[16] [C]
[17] [B]
[18] [C]
[19] [D]
[20] [D]
[21] [A]
[22] [C]
[23] [B]
[24] [C]
[25] [C]
[26] [C]
[27] [B]
[28] [B]
[29] [D]
[30] [A]
[31] [C]
[32] [C]
[33] [A]
[34] [A]
[35] [B]
[36] [D]
[37] [D]
[38] [C]
[39] [B]
[40] [A]

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