BUL 3310 Exam 3 FSU Woodyard- Test
Questions & Answers
A contractor begins construction on a hotel. Due to the porous nature of the sand (a condition
unknown to both parties), the foundation supports needed are more extensive than anticipated.
Owner agrees to additional compensation for the contractor. In a suit to collect the additional
money contractor should argue: Correct Ans-Unforeseen difficulties.
W agrees to give L one half of all profits received in return for L giving W the exclusive right to
market her products. L breaks the contract and is sued by W. L maintains the contract lacks
consideration Correct Ans-There is an exclusive dealing contract with an implied obligation
to use one's best effort, so W prevails.
Seller and Buyer entered into an agreement whereby Seller sold his business to Buyer and agreed
not to compete in the same business for ten years within 100 miles. Seller does compete and is
sued by Buyer. Correct Ans-Seller wins only if the court finds the time or area restrictions
unreasonable.
Employee signs an employment contract whereby he agrees that if he is hurt due to the
employee's negligence, he will exculpate the employer for liability. Correct Ans-The
exculpatory clause is invalid because it is against public policy.
Blue laws violate the establishment clause of the First Amendment. Correct Ans-False
,An agreement that restrains trade must be ancillary to a legitimate business interest or it will be
construed as unreasonable. Correct Ans-True
In some states courts will modify unlawful covenants not to compete. Correct Ans-True
Exculpatory clauses exempting one party from tort liability are usually enforceable if the
exculpation is for intentional rather than negligent acts. Correct Ans-False
A state law which required physicians to be licensed is revenue-raising rather than regulatory.
Correct Ans-False
A contract provision which exempts an employer for liability to an employee for a job-related
injury is enforceable. Correct Ans-false
A contract can be avoided on grounds of duress only if a reasonable person would have felt
threatened Correct Ans-False
A necessary element of undue influence is misrepresentation Correct Ans-False
A tells B he is signing a receipt for goods delivered; in fact the document is a note. This
constitutes fraud in the execution. Correct Ans-True
A false statement is a misrepresentation even if the declarant thought it was true Correct Ans-
True
, To be the basis for rescission, a non-fraudulent misrepresentation must be material. Correct
Ans-True
When one party to a contract is mistaken about the subject matter, the contract is ordinarily
voidable. Correct Ans-False
A mutual mistake as to value is grounds for avoiding the contract. Correct Ans-False
Max is licensed to practice law in Illinois. He moves to Iowa and prior to obtaining a license
performs legal services for Mike. Mike refuses to pay the bill when tendered by Max. Correct
Ans-Mike can avoid payment on grounds of illegality
David tells Kendria that if she pays him $100 a month, he will not open an ice cream shop next
to hers for one year. This agreement is Correct Ans-Invalid because it is not ancillary
B, a coin dealer, sells a nickel to P for $500. The coin was examined by P and thought to be
genuine by both parties. The coin later turns out to be a fake. P sues to rescind the contract.
Correct Ans-P wins because there was a mutual mistake as to the coin.
Sam's auto is damaged by Bill. Sam tells Bill he will sue him if Bill does not pay to have the car
repaired. Bill gives Sam $480; later Bill seeks a return of his money. Correct Ans-Bill will
lose
Questions & Answers
A contractor begins construction on a hotel. Due to the porous nature of the sand (a condition
unknown to both parties), the foundation supports needed are more extensive than anticipated.
Owner agrees to additional compensation for the contractor. In a suit to collect the additional
money contractor should argue: Correct Ans-Unforeseen difficulties.
W agrees to give L one half of all profits received in return for L giving W the exclusive right to
market her products. L breaks the contract and is sued by W. L maintains the contract lacks
consideration Correct Ans-There is an exclusive dealing contract with an implied obligation
to use one's best effort, so W prevails.
Seller and Buyer entered into an agreement whereby Seller sold his business to Buyer and agreed
not to compete in the same business for ten years within 100 miles. Seller does compete and is
sued by Buyer. Correct Ans-Seller wins only if the court finds the time or area restrictions
unreasonable.
Employee signs an employment contract whereby he agrees that if he is hurt due to the
employee's negligence, he will exculpate the employer for liability. Correct Ans-The
exculpatory clause is invalid because it is against public policy.
Blue laws violate the establishment clause of the First Amendment. Correct Ans-False
,An agreement that restrains trade must be ancillary to a legitimate business interest or it will be
construed as unreasonable. Correct Ans-True
In some states courts will modify unlawful covenants not to compete. Correct Ans-True
Exculpatory clauses exempting one party from tort liability are usually enforceable if the
exculpation is for intentional rather than negligent acts. Correct Ans-False
A state law which required physicians to be licensed is revenue-raising rather than regulatory.
Correct Ans-False
A contract provision which exempts an employer for liability to an employee for a job-related
injury is enforceable. Correct Ans-false
A contract can be avoided on grounds of duress only if a reasonable person would have felt
threatened Correct Ans-False
A necessary element of undue influence is misrepresentation Correct Ans-False
A tells B he is signing a receipt for goods delivered; in fact the document is a note. This
constitutes fraud in the execution. Correct Ans-True
A false statement is a misrepresentation even if the declarant thought it was true Correct Ans-
True
, To be the basis for rescission, a non-fraudulent misrepresentation must be material. Correct
Ans-True
When one party to a contract is mistaken about the subject matter, the contract is ordinarily
voidable. Correct Ans-False
A mutual mistake as to value is grounds for avoiding the contract. Correct Ans-False
Max is licensed to practice law in Illinois. He moves to Iowa and prior to obtaining a license
performs legal services for Mike. Mike refuses to pay the bill when tendered by Max. Correct
Ans-Mike can avoid payment on grounds of illegality
David tells Kendria that if she pays him $100 a month, he will not open an ice cream shop next
to hers for one year. This agreement is Correct Ans-Invalid because it is not ancillary
B, a coin dealer, sells a nickel to P for $500. The coin was examined by P and thought to be
genuine by both parties. The coin later turns out to be a fake. P sues to rescind the contract.
Correct Ans-P wins because there was a mutual mistake as to the coin.
Sam's auto is damaged by Bill. Sam tells Bill he will sue him if Bill does not pay to have the car
repaired. Bill gives Sam $480; later Bill seeks a return of his money. Correct Ans-Bill will
lose
