Gen Bus 301 Exam 2 questions with
100% complete solutions
Bouton Case (promissory estoppel) - correct answer ✔✔Bouton was tenure prof @Washburn; claimed
promissory estoppel against Byers(Father) for breaching promise for inheriting ranch to her.
She left tenure to help manage cattle ranch, byers denied 1MM,
Bouton filed Prom estop for damages equal to forgone tenure salaries bc she was under promise that
she would inherit land upt to 1MM
Court orig denied Boutoun, later remanded
The courts will enforce a promise that the promisor should reasonably expect to induce detrimental
reliance by the promisee if the promisee takes such action and justice requires enforcement.
Anderson Case (exculpatory clause) - correct answer ✔✔Anderson joined McOskar's fitness club, curves.
She signed waive of liablity for negligent injuries: exculpatory clause. She then worked out, felt injured,
checked with trainer, then got surgery. Sued club. Club won, affirmed in appeals
Two prong test: 1) disparity in bargain power of parties
2) types of services offered
Clear from release that Anderson agreed to exonerate Curves from liability for negligence, being part of
the express agreement that Anderson accepted and solely negligence of which Curves is accused
An exculpatory clause is valid if it is limited in scope, not ambiguous, and not contrary to public policy.
New England Rock Case (modification without consideration) - correct answer ✔✔New england rock
provided contracting duties for Empire paving. Empire=general city contractor.
,They agreed on price/time basis, but then water problem hindered Rock's ability to complete. Empire
failed to control water. Rock tried to work around, harder/costlier.
Modified contract to complete on time/material basis. Empire refused to pay Rock for balance.
Court sided with Rock, modification valid, affirmed later
Modification of an executory contract is binding if it is fair and equitable in the light of surrounding facts
that the parties had not anticipated when the contract was made
Contracts in Violation of statutes or tortious conduct - correct answer ✔✔Generally Unenforceable
legally for any statute viol
States normally don't recognize gambling contracts
Courts will not permit contract law to violate the law of torts.
ex) bribing a sales rep
Regulatory license - correct answer ✔✔licensing statute that is intended to protect the public against
unqualified persons; an unlicensed person may not recover for services she has performed
unless public policy really outweighs
Revenue license - correct answer ✔✔licensing statute that seeks to raise money; an unlicensed person
may recover for services he has performed
Unsury statute - correct answer ✔✔Law establishing a maximum rate of permissible interest for which a
lender and borrower of money may contract.
,(1) a loan
(2) of money
(3) that is repayable absolutely and in all events
(4) for which an interest charge is exacted in excess of the interest rate allowed by law
Certain expenses/scenarios can go above the max
covenant not to compete - correct answer ✔✔A contractual promise of one party to refrain from
conducting business similar to that of another party for a certain period of time and within a specified
geographical area.
For sales of buz's (protect goodwill) or part of employee's contract (protect trade secrets and from
competitors)
Weigh public policy of buz and person
Payroll Advance, Inc. v. Yates (non compete clauses) - correct answer ✔✔Payroll had non compete clause
with Yates, manager at branch office. Yates got fired, worked for competitor.
Payroll filed complaint for injunctive relief from soliciting clients/using client info/trade secrets. And
damages for breach/fees
Court determined she didn't breach, covenenant very unreasonable as yates wouldn't be able to work in
126 cities, or any bank, credit union...
Favored Yates, affirmed in appeal court
Noncompete clauses in employment agreements can be enforced only to the extent necessary to protect
the employer's legitimate interests and only if reasonably limited in duration and geographic scope.
Exculpatory clause - correct answer ✔✔Provision intended to relieve a party for liability for a tort that
the party committed
, Careful scrutiny in courts, commonly voided/unenforceable against public policy
Person who wants to enforce has burden to satisfy court to enforce it
Elements
1) Other party had actual knowledge of excuplpatory provision
2) Prove that either doesn't weight against enforce
a) Social importance of subject matter
b) Circumstances surrounding the execution
If social importance so great, law will not permit party to force another to give up tort rights
If inequality in bargaining power=unfair to let stronger party take advantage
Type with high risk of injury=commerically reasonable risk mgmt
unconscionable contract - correct answer ✔✔a contract that courts refuse to enforce in part or at all
because it is so oppressive or manifestly unfair as to be unjust
Unconscionablity only exists as a DEFENSE TO ENFOREABILITY
Some states require both substantive and procedural uncons
MATTER OF LAW FOR JUDGE TO DECIDE
Procedural Unconscionably - correct answer ✔✔involves scrutiny for the presence of "bargaining
naughtiness." In other words, was the negotiation process fair? Or were there procedural irregularities
100% complete solutions
Bouton Case (promissory estoppel) - correct answer ✔✔Bouton was tenure prof @Washburn; claimed
promissory estoppel against Byers(Father) for breaching promise for inheriting ranch to her.
She left tenure to help manage cattle ranch, byers denied 1MM,
Bouton filed Prom estop for damages equal to forgone tenure salaries bc she was under promise that
she would inherit land upt to 1MM
Court orig denied Boutoun, later remanded
The courts will enforce a promise that the promisor should reasonably expect to induce detrimental
reliance by the promisee if the promisee takes such action and justice requires enforcement.
Anderson Case (exculpatory clause) - correct answer ✔✔Anderson joined McOskar's fitness club, curves.
She signed waive of liablity for negligent injuries: exculpatory clause. She then worked out, felt injured,
checked with trainer, then got surgery. Sued club. Club won, affirmed in appeals
Two prong test: 1) disparity in bargain power of parties
2) types of services offered
Clear from release that Anderson agreed to exonerate Curves from liability for negligence, being part of
the express agreement that Anderson accepted and solely negligence of which Curves is accused
An exculpatory clause is valid if it is limited in scope, not ambiguous, and not contrary to public policy.
New England Rock Case (modification without consideration) - correct answer ✔✔New england rock
provided contracting duties for Empire paving. Empire=general city contractor.
,They agreed on price/time basis, but then water problem hindered Rock's ability to complete. Empire
failed to control water. Rock tried to work around, harder/costlier.
Modified contract to complete on time/material basis. Empire refused to pay Rock for balance.
Court sided with Rock, modification valid, affirmed later
Modification of an executory contract is binding if it is fair and equitable in the light of surrounding facts
that the parties had not anticipated when the contract was made
Contracts in Violation of statutes or tortious conduct - correct answer ✔✔Generally Unenforceable
legally for any statute viol
States normally don't recognize gambling contracts
Courts will not permit contract law to violate the law of torts.
ex) bribing a sales rep
Regulatory license - correct answer ✔✔licensing statute that is intended to protect the public against
unqualified persons; an unlicensed person may not recover for services she has performed
unless public policy really outweighs
Revenue license - correct answer ✔✔licensing statute that seeks to raise money; an unlicensed person
may recover for services he has performed
Unsury statute - correct answer ✔✔Law establishing a maximum rate of permissible interest for which a
lender and borrower of money may contract.
,(1) a loan
(2) of money
(3) that is repayable absolutely and in all events
(4) for which an interest charge is exacted in excess of the interest rate allowed by law
Certain expenses/scenarios can go above the max
covenant not to compete - correct answer ✔✔A contractual promise of one party to refrain from
conducting business similar to that of another party for a certain period of time and within a specified
geographical area.
For sales of buz's (protect goodwill) or part of employee's contract (protect trade secrets and from
competitors)
Weigh public policy of buz and person
Payroll Advance, Inc. v. Yates (non compete clauses) - correct answer ✔✔Payroll had non compete clause
with Yates, manager at branch office. Yates got fired, worked for competitor.
Payroll filed complaint for injunctive relief from soliciting clients/using client info/trade secrets. And
damages for breach/fees
Court determined she didn't breach, covenenant very unreasonable as yates wouldn't be able to work in
126 cities, or any bank, credit union...
Favored Yates, affirmed in appeal court
Noncompete clauses in employment agreements can be enforced only to the extent necessary to protect
the employer's legitimate interests and only if reasonably limited in duration and geographic scope.
Exculpatory clause - correct answer ✔✔Provision intended to relieve a party for liability for a tort that
the party committed
, Careful scrutiny in courts, commonly voided/unenforceable against public policy
Person who wants to enforce has burden to satisfy court to enforce it
Elements
1) Other party had actual knowledge of excuplpatory provision
2) Prove that either doesn't weight against enforce
a) Social importance of subject matter
b) Circumstances surrounding the execution
If social importance so great, law will not permit party to force another to give up tort rights
If inequality in bargaining power=unfair to let stronger party take advantage
Type with high risk of injury=commerically reasonable risk mgmt
unconscionable contract - correct answer ✔✔a contract that courts refuse to enforce in part or at all
because it is so oppressive or manifestly unfair as to be unjust
Unconscionablity only exists as a DEFENSE TO ENFOREABILITY
Some states require both substantive and procedural uncons
MATTER OF LAW FOR JUDGE TO DECIDE
Procedural Unconscionably - correct answer ✔✔involves scrutiny for the presence of "bargaining
naughtiness." In other words, was the negotiation process fair? Or were there procedural irregularities
