Multiple Choice Questions with Explanations


Part 2-A: Multiple Choice Questions with Explanations – Each of the 15 questions in this part of the exam has two parts – Multiple Choice then Explanation. Please write your answers to the questions and their sub-parts in the space provided. Please make sure that the answers are legible. If I cannot read an answer, you might not get credit for it! (2 points per question – total of 30 points)

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  1. Richard entered Smith Rock’s Rocking Used Cars to purchase a used car. Richard found a 2014 Mazda CX-5 with a sales price of $11,000. After Smith answered all of Richard’s questions about the car, Richard and Smith agreed to a cash sale at the listed price. As Richard was leaving Rocking Used Cars to go to his bank to get the money to pay for the car, Smith told Richard that he heard that Gloria Estefan formerly owned the car. Richard later learned that Gloria Estefan had never owned the car. If Richard seeks to rescind the deal based on Smith’s statement, Richard will (A) win because he relied on the misrepresentation; (B) win because the salesman made a misrepresentation of a

material fact; (C) lose because he did not rely on the misrepresentation.; (D) lose because Smith made a unilateral mistake.

Answer: (B) win because the salesman made a misrepresentation.

Explanation: Richard is innocent; Smith gave him information that was not right. Richard will win because he relied on the information he was given, and later, he realizes that the information was not correct.

  1. In June 2019, Gwen entered into a contract with a theatrical producer to star in a new Broadway musical during the 2020-2021 theatrical season. The show went into rehearsals in November 2019, began preview performances in early February 2020, and then opened for an indefinite run on March 10, 2020. Gwen’s contract called for her to remain in the lead role for the shorter of one year from the opening night or the show’s entire run. Unfortunately, during the preview performances, Gwen had been spending time with an old friend who had just returned from a tour of China. At the cast party after the opening night, Gwen developed severe respiratory symptoms and had to be rushed to the emergency room. She was diagnosed with coronavirus, fell into extremely labored and difficulty breathing was placed on a ventilator, and died on March 14, 2020. Her estate (A) is obligated to find another performer of similar talents who will agree to take over Gwen’s role for the remainder of her contract term; (B) is discharged from any further obligations under the contract; (C) will be discharged from any obligations under the contract only if it can be shown that Gwen’s death was unexpected; (D) will not be discharged and, if the play’s producers have to pay more to hire a comparable substitute performer at the last minute, the estate will be responsible for the difference in pay.

Answer (C) will be discharged from any obligations under the contract only if it can be shown that Gwen’s death was unexpected.

Explanation: The estate will only be discharged if there is clear evidence that Gwen’s death was so sudden that she could not participate in the performances. Thus Gwen’s estate will be discharged from any obligations that were signed under the contract.

  1. Ma Rainey made the following offer to Levee: “I will pay you $500 if you agree to play trumpet on my next recording.” Levee replied that he promised to play trumpet on Ma’s next recording. At this point, the contract is an (A) executed, bilateral, express contract; (B) executory, bilateral, implied-in-law contract; (C) executed, unilateral, express contract; (D) executory, bilateral, express contract.

Answer (D) executory, bilateral, express contract.

Explanation: This involves a contract that has not been entirely performed and is not fulfilled. It involves two people that is; Ma Rainey and Levee. It involves an obligation where Levee should be paid money despite the obligation is material.

  1. Shiloh and Francesca are debating whether to put their contract into writing. In making their determination, which of the following factors would it be usual practice for Shiloh and Francesca NOT to consider? (A) whether or not the agreement falls within the Statute of Frauds; (B) the complexity of the agreement; (C) the length of time covered by the agreement; (D) the length and strength of the relationship between the two parties (here, Shiloh and Francesca).

Answer (D) the length and strength of the relationship between the two parties.

Explanation: A contract should not indicate the strength of the relationship. The length and strength will often not fit in employing the agreements of the contract.

  1. Now, let us revisit our friend Richard, whom we met in question 1. Suppose instead of buying the used Mazda CX-5, Richard instead bought from Smith Rock’s Rocking Used Cars a 2017 Jaguar F- Pace on credit for $30,000. Smith then assigned to Bruno all his rights to receive money from Richard to settle some old gambling debts. Neither Smith nor Bruno informed Richard of the assignment at the time that it is was made. Therefore, Richard continued to make his required monthly loan payments directly to Smith. After about six months, Smith left the country for the Bahamas with the money. If Bruno then sues Richard for the missing six payments, (A) Bruno will not be able to collect the money from Richard; (B) Bruno will be able to collect the money from Richard; (C) Richard is liable for the six-monthly payments because Bruno paid consideration for the assignment through the forgiveness of Smith’s gambling debts; (D) Richard cannot raise the defense of last payment.

Answer (A) Bruno will not be able to collect the money from Richard

Explanation: There is no contract informing Richard about the signing of the assignment to Bruno by Smith. This indicates that Richard will not continue making the payments.

  1. Trans Global Airlines offered to sell ten round-trip tickets to Silvestre. Trans Global stated in the offer that the acceptance must be in writing and delivered by USPS next-day service. Which of the following acceptances will create a contract between Trans Global and Silvestre? (A) Silvestre calls the Trans Global reservation number and states that he will buy the tickets. (B) Silvestre sends a fax to the Trans Global sales office stating he will buy the tickets. (C) Silvestre sends a letter by USPS next-day service to Trans Global stating that he will buy the tickets. (D) These responses will create a contract between Trans Global and Silvestre because they constitute reasonable means of communication.

Answer (C) Silvestre sends a letter by USPS next-day service to Trans Global stating that he will buy the tickets.

Explanation: The contract clearly states that the offer should be written for the contract to meet the other partner’s needs. For the round tickets to be delivered, only a letter can make it possible.

  1. Lois had been a children’s daycare provider for several years in the small town of Smallville. She started a small business, Loving Care with Lois LLC, pursuant to which she operates a daycare facility. At one point in time, Lois decided to give up small-town living and move to Metropolis, the closest big city, for excitement and adventure. She sold Loving Care with Lois LLC to Jimmy. In the purchase and sale agreement with Jimmy, Lois agrees not to open a competing business within five miles of Smallville for a period of two years. After nine months of the big city life and a failed romance with Clark, who always seemed to be missing when Lois needed him most, Lois lost interest in living in Metropolis and moved back to Smallville. She opened a small daycare facility in Bellemeade, the town directly adjacent to Smallville. Jimmy then filed suit against Lois to enforce the non-competition provision of the purchase and sale agreement. What is the most likely result of Jimmy’s lawsuit against Lois? (A) Jimmy wins because the non-competition agreement is enforceable. (B) Lois wins because the non-competition agreement is denying her the right to do the only thing she knows how to do. (C) Lois wins because the non-competition agreement is against public policy. (D) Lois wins because the non-competition agreement is unreasonable as to the time and geographic scope of the restrictions.

Answer. (C) Lois wins because the non-competition agreement is against public policy.

Explanation: The agreement incorporates public property policies where it states that after a period of 2 years and a distance of 5 miles seems unrealistic.

  1. Upon graduating from college, Angelina announced her plans to enter law school the following fall and marry Edwin in December. Angelina’s father was afraid that marriage during her first year in law school might cause her to fall behind in her studies or cause her to drop out of school. He called Angelina and promised her $10,000 if she postponed her wedding until after completion of her first year of law school. Angelina agreed and postponed the wedding for a year. Angelina successfully completed her first year of law school, but soon after that, her father died. The administrator of her father’s estate claimed Angelina was not entitled to the $10,000 because there was no consideration for her father’s promise. If Angelina sues the estate, she probably will be (A) unsuccessful because her father’s death terminated the contract; (B) successful because there was a consideration; (C) unsuccessful because her father received no benefit; (D) unsuccessful because it was merely fatherly advice not to get married during the first year of law school.

Answer (A) unsuccessful because her father’s death terminated the contract

Explanation: The agreement was still fresh until her father died. There was no contract written, but the promise was made via the call.

  1. The local municipal Little League Baseball program ordered 500 wooden baseball bats from Bats in the Belfry, Inc., for delivery on June 1. On May 15, the Little League program received 500 aluminum bats instead of the wooden ones. As of May 16, Bats in the Belfry, Inc. (A) may cure the delivery of non-conforming goods by June 1; (B) has breached the contract and is liable for damages; (C) has breached the contract only if the baseball team rejects the goods; (D) may cure if the Little League program gives Bats in the Belfry, Inc. permission to do so.

Answer (C) has breached the contract only if the baseball team rejects the goods.

Explanation: Bat in the Belfry breached the contract for bringing baseball bats not made of the material ordered by Little League.

  1. Big Bang for the Buck Inc. (BBB) operated a dynamite manufacturing plant in a rural area in the state of Bucolica. On one stormy night, Andre was driving along the highway in Bucolica on which BBB’s facility was located. Just as Andre approached the boundary of the BBB property, one of the large trees that BBB used to screen its facility from the highway came down in a crash as a strong gust of wind blew through the area. Andre’s car was demolished when the tree fell on it, and Andre suffered serious but not fatal injuries. Upon recovering, Andre filed an action against BBB based on a theory of strict liability. Does Andre have a valid claim? (A) Yes, because BBB was engaged in an ultrahazardous activity on its property in Bucolica. (B) Yes, because it was negligence per se for BBB to use tall trees to screen its facility from the highway. (C) No, because the accident was not caused by the ultrahazardous activity on BBB’s property or the ultrahazardous nature of BBB’s product. (D) No, because Andre was contributorily negligent by driving near a dynamite manufacturing plant.

Answer (D) No, because Andre was contributorily negligent by driving near a dynamite manufacturing plant.

Explanation: Andre should have used ways that are far from the dynamite manufacturing plant. This is because the occurrence of the accident was unplanned and unintentional.

  1. Marty, a 16-year-old, contracts with Cream-of-the-Crop Cycles to buy an $8,000 motorcycle. Marty agrees to make monthly payments in the installment sales contract until the purchase price plus interest is paid in full. The installment sales contract also has a provision in it, directly over the signature blocks and printed in boldface type, that notifies the purchaser that all motorcycle sales are final. Three months into the contract’s term, Marty has an accident with the motorcycle that causes $1,500 worth of damage to the motorcycle and causes him some minor personal injuries. After talking the matter over with his older friend, Doc Brown, Marty decides to return the motorcycle to Cream-of-the-Crop Cycles. Which of the following is correct? (A) The contract is voidable by Marty, and he will be entitled to the return of all amounts that he has paid pursuant to the contract. (B) The contract is voidable by Cream-of-the-Crop Cycles as long as Cream-of-the-Crop Cycles returns to Marty all amounts that he has paid pursuant to the contract. (C) The contract is voidable by Marty, and he will be entitled to the return of all amounts that he has paid pursuant to the contract, less the value of the damage to the motorcycle from the accident. (D) The contract is enforceable pursuant to its terms because of the express provision in it, making all sales final.

Answer (B) The contract is voidable by Cream-of-the-Crop Cycles as long as Cream-of-the-Crop Cycles returns to Marty all amounts that he has paid pursuant to the contract.

Explanation: The contract can be avoided by Cream crop so long as Marty returns all the amounts.  There is a contract made indicating that Marty agreed, and later, he is found falling short of the contract.

  1. Kawamura Co. has entered into a series of contracts in connection with its cleaning and maintenance business. In which of the following contracts is the predominant purpose of the agreement the sale of goods, thus making the contract subject to the UCC?  (A) Kawamura Co. hires a new accounting consultancy firm, and the consultancy firm provides some of its promotional materials (some pens, mousepads, and coffee mugs) to the office staff; (B) Kawamura Co. purchases some new, heavy-duty cleaning equipment, and the manufacturer’s representative provides some in-house training on the safe use of the equipment; (C) the CEO of Kawamura Co. purchases a season box at the local minor league baseball stadium to entertain clients and prospective clients; (D) Kawamura Co. opens a PayPal business account to enable its customers to make payments.

Answer (B) Kawamura Co. purchases some new, heavy-duty cleaning equipment, and the manufacturer’s representative provides some in-house training on the safe use of the equipment;

Explanation: This shows the contract made involves cleaning and maintenance businesses. The predominant purpose of the sales goods incorporates purchases made by Kawamura.

  1. Adam enters a dentist’s office and, without saying any words, points to a damaged tooth that is causing him obvious pain. The dentist, Dr. Louis, treats the tooth immediately. Adam willingly complies with the medical/dental instructions that Dr. Louis gives to him while Dr. Louis works on the tooth. If Adam then refuses to pay and Dr. Louis sues Adam, what would be the result? (A) Adam would win because there was no contract. (B) Adam would win because of provisions in the UCC. (C) Dr. Louis would win because there was an implied contract between Adam and Dr. Louis. (D) Dr. Louis would win based on quantum meruit.

Answer. (C) Dr. Louis would win because there was an implied contract between Adam and Dr. Louis.

Explanation: Dr. Louis wins because there was an implied contract. This contract is legally binding. Some circumstances led to an agreement being met, and they both agreed.

  1. Billy bought a rotisserie in preparation for a party he was planning. When he put a chicken on the rotisserie, it would not rotate but stayed in one position where it burned the chicken on one side and left it raw on the other. When Billy returned the rotisserie to the store, the salesperson disclaimed any responsibility because he had never told Billy that the rotisserie would rotate the food as it cooked. Does Billy have any recourse against the store? (A) No, the salesperson did not make any express warranties. (B) Yes, the salesperson made an express warranty just by selling the goods. (C) Yes, because although the salesperson did not make any express warranties, the UCC imposes an express warranty on the sale. (D) Yes, because although the salesperson did not make any express warranties, the UCC imposes an implied warranty on the sale.

Answer (A) No, the salesperson did not make any express warranties.

Explanation: There is no warranty issued to Billy indicating that if the equipment does not work, it should be returned or repaired.

  1. Harry is a poor Hogwarts student struggling to work and keep up with his advanced studies in magical law enforcement. Petunia, his aunt, promises to pay Harry support of $200 per month for the next six months. Although Petunia did not ask him to, he quits his current part-time job at the Ministry of Magic to devote full time to his studies for the next six months. Petunia makes one payment and then stops with no explanation. If Harry sues, what is the likely result (assuming, of course, that American law prevails even in the magical world)? (A) Petunia would win, as she did not ask Harry to quit his job. (B) Harry would win, as a contract was formed when Petunia promised to pay him the support. (C) Petunia would win, as family members cannot sue each other for breach of an oral promise. (D) Harry might win under the doctrine of promissory estoppel.

Answer (D) Harry might win under the doctrine of promissory estoppel.

Explanation This doctrine states that Harry should recover from the promise made by Petunia. The promise was reasonable, and it triggered Harry to quit job and continue with the studies.



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