Dr. Edmonds
Spring Term 2016
Second Exam
This is a closed book examination. Any conversation or communication between students during the Examination will be considered prima facie evidence of academic dishonesty.
Questions 1 and 2 are based upon the following facts. Rogers and Hammerstein are merchants. Rogers makes and sells widgets; Hammerstein uses widgets in her manufacturing process. Rogers makes an offer to sell 1,000 widgets to
Hammerstein at $12 a widget. Roger’s offer specifies that payment is due in full at time of delivery. Hammerstein’s written acceptance document specifies that the terms of payment are a 2% discount if paid within 10 days and full price if paid within 30 days (“2/10 – N 30”). The widgets are delivered and accepted. There is a problem with the payment; both sides insist that their payment terms control.
1. What result in court? a. Buyer’s payment terms control. b. Seller’s payment terms control. c. The two terms cancel each other and a UCC “gap filler” payment term will control. d. There is no contract; there was never a “meeting of the minds”.

2. Which of the following sections of the UCC would control the outcome of the previous question? a. UCC 2-315 b. UCC 2-316 c. UCC 2-712 d. UCC 2-207
Questions 3 and 4 are based upon the following facts. Acme Accounting Services is a small company that makes and sells computer software that provides payroll accounting services to businesses. Acme sells a package that is designed to compute all aspects of a payroll including withholding taxes and automatically remit appropriate withholding tax amounts to the Federal and State governments.
Acme sells the package to Huge Company for $40,000. An IT person at Huge
Company loads the software onto the Huge Company payroll computer. As the IT person is loading the software, a box containing written terms and conditions of the sale appears and the IT person must click on “We Accept” the terms to continue loading the software. She does so. Contained in those terms and conditions is the following language: “Buyer and Seller agree that if this product fails to perform as indicated, Seller will only be responsible for refunding to Buyer, Buyer’s purchase price. Buyer and Seller agree that under no circumstances will Seller be responsible for any of Buyer’s damages beyond the refund of the purchase price.”
Months later Huge Company discovers the software was defective and has screwed up Huge Company’s payroll and withholding to the point where it will cost over a million dollars to fix the problem and pay fines.
3. Assuming that the IT person had the power to bind Huge Company, are the terms she clicked “yes” to enforceable? a. Yes; it is called a click wrap agreement. b. No, they weren’t negotiated. c. Yes, it is called a shrink wrap agreement. d. No, they weren’t discussed before the purchase. e. Both b and d.

4. Which of these types of damages that Seller has attempted to exclude would be the most economically significant to Huge Company and Acme? a. Direct. b. Incidental. c. Consequential. d. Pain and Suffering.
Question 5 is based upon the following facts. Sara runs a club for underprivileged kids. The club operates a gym for the kids to play basketball. The club furnishes gym shoes for the kids to use as they seldom can afford their own. Sara needs new gym shoes; she finds an online supplier with a suitable assortment of sizes and a very attractive price. Sara places a large order. There is no discussion regarding warranties and Seller’s written purchase confirmation contains no reference to warranties of any kind.
When the shoes arrive and are put to use, they immediately show excessive wear and fall apart in short order. Sara calls the Seller to complain. Seller points out that
Seller made no express warranties of any kind and notes that cheap shoes don’t last long in use. Seller refuses to accept any responsibility.
5. Has Seller made any warranty to Sara? a. Yes, an implied warranty under UCC 2-314 b. Yes, an express warranty under UCC 2-313 c. Yes, an implied warranty under UCC 2-315 d. No.
Questions 6 and 7 are based upon the following facts. Zahida drops her car off at the Speedy Lube shop for a routine oil change. She signs a work order specifying that her oil and filter are to be changed for a fee of $49.50. Max drops his car off the same day at the same Speedy Lube, but Max contracts to have his car completely detailed for $150.00. As fate would have it, both Zahida and Max own identical cars. A Speedy Lube employee (who smoked a little cannabis sativa on his lunch hour) proceeds to detail the wrong car; Zahida’s. As fate would further have it, Zahida does have her car detailed once a month and was due for her monthly detailing. She pays $29.95 for each detailing at another business.

6. If Speedy Lube is going to get anything for the detailing it accidentally did to
Zahida’s car, it must prevail in court under which of the following legal theories? a. Contract implied in fact. b. Promissory estoppel. c. Quasi Contract. d. Fair market value doctrine.
7. If the court agrees that Zahida must pay something for the detailing, it should award Speedy Lube which of the following? a. Quantum Meriut. b. The amount of $29.95 c. $150.00 minus $29.95 d. Both a and b.
Questions 8 and 9 are based upon the following facts. Richard is negotiating the purchase of a new car. He wants to buy the car from a local dealership for convenience of service, but the local dealership cannot match the price from a
Grand Rapids dealership; the local dealership is $150 higher and won’t go lower.
The salesperson wants to make the sale so he tells Richard “We will throw in free oil changes for a year if you buy from us today.” Richard knows the free oil changes will easily equal $150 in the first year, so he accepts the offer and signs a contract for the purchase of the car for $32,750.00. All goes well until Richard comes into the dealership service department several months later for his first
“free” oil change. When he advises the service department of his free oil changes, they refuse to honor the agreement, saying that they have never done free oil changes.
Richard reviews the contract he signed (the first time he has ever bothered to read it) and discovers that it makes no mention of free oil changes but does contain the following clause: “Buyer and Seller agree that this written contract is the sum total of their agreement, and that any oral representations or promises made by anyone including a representative of Seller during the negotiation of this agreement not reduced to writing and contained in this agreement are of no force or effect.”

The salesperson Richard dealt with has been fired, but Richard has a witness to the salesperson’s promise of the free oil changes; his roommate was with him at the time of the purchase.
8. Did this entire contract have to be in writing to be binding? a. Yes, the Statute of Frauds would require it to be in writing. b. No, it could be performed within one year. c. Yes, the parol evidence rule requires it to be in writing. d. No, it isn’t for the sale of goods. e. both b and d.
9. Richard sues the dealership in court for breach of contract. Will Richard be allowed to use his testimony and that of his roommate to prove the existence of the salesperson’s promise of the free oil changes? a. Yes; it is relevant because it proves Richard’s case. b. No, it would violate the Statute of Frauds. c. No, it would violate the parol evidence rule. d. Yes, it proves the real terms of the agreement. e. Both a and d.
Questions 10- 12 are based upon the following facts. Rocco doesn’t like David.
Rocco sneaks up behind David one fine spring day and smacks David on the back of his head with Rocco’s open hand. David does not see Rocco coming or even know what has happened when he is struck. It is Rocco’s intent to inflict pain on
David but not to do him serious harm. Unbeknownst to Rocco, David has a very thin skull and as a result, David suffers serious and lasting harm.

10. Which of the following torts has Rocco committed? a. Assault and Battery. b. Assault. c. Battery. d. Bodily Trespass. e. Dope Slap.
11. Which of the following damages may David potentially collect if he successfully sues Rocco? a. Actual damages including pain and suffering. b. All medical expenses, past and future. c. Only those limited expenses that result from the foreseeable injuries from a simple, openhanded slap. d. Both a and b, along with punitive damages.
12. Can Rocco also be charged with a crime? a. Yes, Assault and Battery. b. No, it would be double jeopardy. c. Not assault, he didn’t perceive the attack before it was over. d. Only battery.
Questions 13 and 14 are based upon the following facts. Dr. I. P. Freely is a prominent urologist specializing in diseases of the human bladder. John seeks treatment from Dr. Freely for a persistent bladder infection. Dr. Freely does all the usual and logical tests on John and prescribes an antibiotic appropriate for the type of bacterial infection the tests reveal John has. Both John and Dr. Freely are unaware that John is allergic to the type of antibiotic Dr. Freely has prescribed.
John’s reaction to the drug is severe and he is hospitalized for a week.
John is angered by his condition while in the hospital and posts the following on several social media: “Warning: Dr. I.P. Freely is a quack. He is horrible doctor who made me very sick by his incompetence and I know several other people who he has almost killed.”

In reality John doesn’t know anything about any other of Dr. Freely’s patients. Dr.
Freely is incensed; he is losing patients. Freely consults you because he wants to sue John.
13. Which of the following are true about what John has done? a. John has engaged in slander. b. John has engaged in libel d. John has only engaged in opinion. e. John has engaged in libel. per se.
c. John has engaged in Slander per se.
John consults you regarding the possibility of suing Dr. Freely for medical malpractice.
14. You advise John that medical malpractice is: a. A negligent tort. b. Must be based on a breach of contract claim. c. Impossible to prove. d. Not appropriate in John’s case; Dr. Freely didn’t owe John a duty of care.
Questions 15 – 18 are based upon the following facts. Susan is driving to Chicago on I-94. She is late for a business meeting so she is driving at 85 MPH in a 70
MPH zone. A driver going the other way is intoxicated and driving recklessly in violation of two laws; one making driving while intoxicated a crime and one making driving recklessly a crime.
Both laws are designed to protect the public. The drunk driver loses control of his vehicle and crosses the median striking Susan’s car head on. Susan is seriously injured.

15. Susan wants to sue the drunk driver. Upon which of the following theories should she base her lawsuit? a. Negligence b. per se.
Res ipsa loquitur. c. Strict Liability. d. Breach of contract.
Susan sues the drunk driver. The case goes to trial. Experts tell the jury that as a result of Susan’s driving in excess of the speed limit, Susan’s injuries were made more severe. The experts attribute 50% of Susan’s injuries to her own act of speeding.
16. The trial court is required by state law to dismiss Susan’s case (and make no award to Susan) when the jury agrees with the experts and attributes 50% or more of Susan’s injuries to her own misconduct. Which of the following correctly explains what has happened to Susan? a. She lives in a state that still uses the doctrine of contributory negligence for all negligent tort cases. b. She lives in a state that uses the doctrine of comparative negligence. c. Her state has adopted the 50% rule. d. Both a and c. e. Both b and c.
17. Susan has experienced severe pain and suffering as a result of the crash. Pain and suffering are classified as which of the following: a. Consequential damages. b. Compensatory damages. c. Punitive damages. d. Incidental damages.

We will change the facts for the following question. Assume that the court lets the jury in Susan’s case apportion the damages in her case between Susan and the drunk in any percentage ration the jury finds supported by fact. The jury awards
Susan 45% of her actual damages, attributing 55% of her injuries to her own misconduct.
18. Which of the following legal doctrines is the court following now? a. Pure comparative negligence. b. Pure contributory negligence. c. Strict liability. d. Both b and c.
Questions 19 and 20 are based upon the following facts. Ray is walking down a public sidewalk. Suddenly an air conditioning unit falls from a window ledge and injures poor Ray. Ray sues the building owner/operator.
19. Which of the following legal theories should Ray base his suit upon? a. Negligence per se. b. Res ipsa loquitur . c. Strict product liability. d. Breach of contract.
20. Under the theory you have selected for the question above, Ray must prove which of the following? a. Negligence on the part of the building owner/operator. b. That the building owner/operator had exclusive control over the installation and maintenance of the air conditioning unit. c. That the building owner/operator had the last clear chance to avoid the problem. d. All of the above.

Question 21 is based upon the following facts. Ruth purchases a new electric lawn mower from her local big box store. It was manufactured by Acme Company.
Ruth takes her mower home and unpacks it. She sets it up exactly as the instruction manual tells her to do so. The first time Ruth attempts to mow her front yard with her new mower, the shaft between the motor and blade breaks. The blade flies out and injures Ruth’s neighbor across the street who was working in his garden.
21. Ruth’s neighbor wants to sue Acme. Which of the following statements is true with regard to her neighbor’s ability to successfully file a lawsuit against Acme? a. Neighbor must bring his suit on a theory of contract. b. Neighbor must prove privity with Acme. c. Neighbor must bring his suit on a theory of tort. d. Neighbor cannot sue Acme. e. Both a and b.
Questions 22 and 23 are based upon the following facts. The City of Kalamazoo is located in Michigan and experiences heavy snow during the winter months. The
City has an ordinance (a law) that reads: “It shall be the duty of each property owner in this City whose property abuts a paved sidewalk to keep such sidewalk free of accumulated ice and snow for the safety of pedestrians using such sidewalk.” Jan owns a house and lot which abut a city paved sidewalk. One evening it snows a great deal and the sidewalk becomes covered in ice and snow.
The next day dawns clear and sunny but cold. Jan makes no effort to clear the sidewalk. In the late afternoon, Ralph walks to the nearest bus stop and in doing so, uses the sidewalk in front of Jan’s house. Ralph slips and falls as a result of the accumulated ice and snow and is injured. Ralph sues Jan.
22. Which of the following legal doctrines would support Ralph’s claim against
Jan? a. Strict liability. b. Negligence per se.
c. Res ipsa loquitur. d. Breach of warranty.

Ralph’s injuries are made more serious because at the time of the fall, Ralph was carrying an illegal switch blade knife with a defective spring that opened during
Ralph’s fall, and stabbed Ralph in leg.
23. Does the knife and the stabbing have any impact upon Ralph’s potential recovery of damages from Jan? (Remember, we are using Michigan tort law) a. Yes. Jan may assert the defense of contributory negligence. b. Yes, Jan may assert the defense of comparative negligence. c. No, Jan is responsible for all consequences of his failure to clear the side walk. d. No, Jan has strict liability for his failure to clear the side walk. e. Both c and d.
Questions 24 –30 are based upon the following facts. Susan is a graduate of
Whatsa Matta U. with an ISM major and a Law Minor. She is employed by
Generous Motors (GM) in GM’s supply chain management program. Susan is assigned to a group which oversees the administration of contracts with suppliers.
She is specifically assigned the procurement of windshields for passenger automobiles. Susan is currently negotiating a contract with Glass Co for windshields to be installed in a new line of sporty two seater roadsters. The line is to be introduced this spring and the CEO of GM wants every GM dealer to have at least six cars in inventory by May 30 th for the role out campaign.
Susan’s supervisor gives her the following instructions regarding the contract she is negotiating: “Set this contract up so that GM sends an inspector to their plant when they are ready to ship an installment and that the inspector does a clarity and color inspection. Specify that if any unit the inspector checks fails to meet our specifications for clarity and color, the entire shipment is rejected and we are released from any further obligations under the contract. Oh and by the way, also specify that if the windshields don’t fit properly when we try and install them, then we can revoke our acceptance, we are released from the contract and may seek the windshields from another supplier.” “One last thing; make sure they understand that these windshields are going into sports cars and that GM is relying upon Glass
Co to select the proper glass formula and thickness.”

Susan makes sure the final contract contains one clause that reads “Buyer and
Seller agree that buyer will physically inspect any and all shipments at Seller’s plant before shipment for color and clarity, and should any windshield inspected fail to meet GM’s standards for either color or clarity, then GM may reject the entire shipment and will have no further liability under this agreement and may purchase the windshields from another supplier.”
24. This clause is called: a. A “Critical Term”. b. A condition precedent c. A condition subsequent d. A “rejection term” e. A “term”
Susan also makes certain that the final contract contains another clause that reads
“Buyer and Seller agree that should windshields supplied under this agreement and accepted by GM fail to fit properly when GM personnel attempt to install them,
GM may revoke its acceptance of the windshields and that GM will have no further obligation under this agreement and that GM may seek windshields from another supplier. If this occurs, Seller agrees to pay GM the costs of “cover” as described in UCC 2-712.”
25. This clause is called: a. A “Critical Term”. b. A condition precedent c. A condition subsequent d. A “rejection term” e. None of the above

26. What is meant by “cover” under the UCC? a. A charge to get into a bar b. All of buyer’s lost profits c. All of seller’s lost profits d. The difference between contract price and the cost of substituted goods e. Only buyer’s incidental damages
Susan also remembered from her law class to include a clause with the following language: “Buyer and Seller agree that this written agreement is the final and complete agreement between the parties, and that any prior or contemporaneous oral agreements not contained herein are of no force or effect. Any subsequent modification of this written agreement must be in writing and signed by both parties.”
27. The contract is in writing. The cost of the windshields under the contract was
$1,300,000. Did it have to be in writing to be enforceable and why? a. Yes, as required by the Statute of Frauds b. Yes, as required by the Parol Evidence Rule c. No, it can be completed within one year d. Gimme a break; I skipped class that day
28. This clause is called: a. A “modification clause”. b. A “merger clause” c. an “unconscionable clause” d. A “Santa Clause”

29. This clause is designed to insure that which of the following legal doctrines applies to this contract? a. The Statute of Frauds b. The “Integration Principle” c. The “Plain Meaning Doctrine” d. The “Parol Evidence Rule”
Susan inserts an additional clause into the agreement and Glass Co accepts the agreement and signs it. The last clause reads as follows: “Buyer and Seller further agree that Seller understands that Buyer is relying upon Seller’s skill and judgment to select the proper formula and thickness for these windshields given Buyer’s intended use in convertible sports cars.” The written contract is silent with regard to warranties.
30. Has Glass Co made any warranties under this contract? a. Yes, two implied warranties under UCC Sections 2-314 and 2-315. b. Yes, one implied warranty under UCC Section 2-207 c. Yes, an expressed warranty under UCC Section 2- 712 d. If the contract doesn’t contain warranty language, no warranty has been made.