Business Law Midterm Exam – Part I (25 Points)
The following questions comprise Part I of the Midterm Exam. This section is worth
25 points. You may consult any source EXCEPT FOR human beings other than
Professor Fell. Please be sure to type your name by the Honor Code statement at the
start of the exam and turn it in with your answers. All answers must be typed. This is
due by 11:59PM on June 28, 2015. Late submissions will not be accepted unless
I give you express approval in advance of the deadline. The subject line of your
email must read “Your Name – Business Law – Final Exam Part 1”. Please
don’t forget to complete Part II of the Midterm Exam on BlackBoard. Good luck!
I have not received any help or assistance on this exam from any other
attorneys or individuals other than Professor Joe Fell.
____________________________________________________________
Question A
After being drafted by the Browns, Johnny Manziel moves into a fully furnished
apartment in downtown Cleveland. Unfortunately, the bed within the apartment is a
very low quality bed, so he buys a large metal bed from Norton Furniture for
$300. Marc Norton, the owner of Norton Furniture, is very informal and he wants to
agree to the deal by shaking hands. Mr. Manziel isn’t keen on doing business in such
an informal manner, but he agrees to the deal in this manner anyway. On the way out,
Mr. Manziel notices that the bed does not have a headboard. He tells Mr. Norton that
he wants a headboard. Mr. Norton offers to include a headboard attached to the bed
for the price of $250 and he tells Mr. Manziel that the bed and headboard will be sold
together in one unit for a single price. Mr. Manziel agrees to purchase the bed from
Mr. Norton for this price and this time Mr. Manziel is thrilled to agree to the deal by
shaking hands because he is in a hurry and doesn’t want to wait for a written contract
to be drafted. After Mr. Manziel purchases and assembles the bed, he lies down for a
night of sleep only to have the entire bed shatter and fall apart. Mr. Manziel then
realizes that the bed was actually made out of metal-colored plastic instead of actual
metal. The advertisement for the bed indicated that it was made out of genuine
copper. Mr. Manziel then files suit against Mr. Norton, who responds by claiming that
they did not have an enforceable contract because it is not in writing. Is Mr. Norton
correct? Will their contract be enforceable? Why or why not? Please explain
your answer. Your answer should contain all of the relevant law and an
application of law to facts in addition to an answer to this question. Your
explanation needs to be an explanation that can easily be understood by a nonlawyer. (5 Points)
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Business Law Midterm Exam – Part I (25 Points)
The contract is enforceable in court. The Statute of Frauds is the law that
determines whether or not a contract needs to be in writing to be enforced in
court, and anything below $500 does not require the contract to be in writing to
be enforceable. Therefore, Mr. Manziel can file suit because the purchase price
allows it to be enforceable without writing.
One could also argue that due to the extremely high cost of copper and other
precious metals, selling an entire bedframe made from genuine copper for $300
would not even cover the materials to build the bed and Norton Furniture
would incur an almost guaranteed financial loss and/or hardship from
entering into such a contract at that price and could be considered an
unconscionable contract.
Question B
Bilbo Baggins owns a small house in The Shire. He is in the process of writing a book
about his experiences during a long journey in which he helped a group of dwarves
retake their gold from a dragon. He is also in the midst of planning a big birthday
party, and he has posted a large sign that says “No Admittance Except On Party
Business” outside of his house. Unfortunately for Bilbo, his relatives are more
interested in finding out whether they will inherit his estate than in allowing him to
have the peace and quiet that he needs to finish his book. One day, Bilbo’s lawyer
(Gandalf the White) visited him to help him draw up the terms of his will. Lobelia
Sackville-Baggins, one of Bilbo’s greedy relatives, went onto his land and hid
underneath Bilbo’s window in the hopes of overhearing Bilbo as he dictated the terms
of his will. While looking out the window while reminiscing about his happy
memories from his journey, Bilbo saw her hiding there, screamed at her, and told her
to leave. She apologized and ran away promptly without disturbing any of Bilbo’s
flowers. Frustrated, Bilbo wants to do something to ensure that this will not happen
again in the future. He comes into your office and wants to know if he can sue
Lobelia Sackville-Baggins under any tort theories. Can Bilbo sue her under any
intentional tort theories? If so, which one? Will he be successful? Please
explain your answer. Your answer should contain all of the relevant law and an
application of law to facts in addition to an answer to this question. Your
explanation needs to be an explanation that can easily be understood by a nonlawyer. (5 Points)
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Business Law Midterm Exam – Part I (25 Points)
Bilbo can file suit against Lobelia as an Intentional Tort against property.
Lobelia, the Tortfeasor, had intent to come onto Bilbo’s lot with the specific
goal of overhearing the terms of his will. He should be successful if he were to
sue her on grounds of Trespass to Land, since she came onto his property and
there was a posted sign warning trespassers not affiliated with party business.
Punitive Damages do not apply, Lobelia left immediately when asked without
causing damage to person or property. By trespassing standards this does not
strike me as a particularly heinous example of such a crime.
Question C
Kylie Jenner is a 17 year old model who is best known to America as the sister of Kim
Kardashian. After a particularly tiring photo shoot with Seventeen Magazine, she
decides that she wants to reward herself with a new car. She stops by the Bentley
dealership and decides to buy a 2013 Bentley. Kylie offers to pay $100,000 for the car
in two separate installments of $50,000 and the salesman accepts her offer. The two
parties sign a written contract that includes these terms. She gives the salesman the
first $50,000 and tells him that she will be back tomorrow with the other $50,000.
When she gets home, her mother (Kris Jenner, the mother of Kim Kardashian) tells
Kylie that the money from the photo shoot was meant to be for her college fund and
that she needs to return the car tomorrow. Kylie tells her mother that she signed a
contract for the purchase of the car and that it is too late to return the car. Her
mother tells her that she can still get out of the contract and get her money back. Is
Kris Jenner right? Why or why not? Please explain your answer. Your answer
should contain all of the relevant law and an application of law to facts in
addition to an answer to this question. Your explanation needs to be an
explanation that can easily be understood by a non-lawyer. (5 Points)
Kris Jenner is right, Kylie can disaffirm the contract because she is a minor and
lacks capacity to contract. The advantages that a minor lacking capacity has in
getting out of a contract compared to an adult makes it riskier to enter into
contract with one compared to an adult. If Kylie disaffirms the contract, the
salesman will need to return her down payment. Kylie can also ratify the
contract when she turns 18 if she so desired.
Question D
Barkevious Mingo signs an endorsement contract with Bil-Jac Dog Food. Under the
terms of the contract, Bil-Jac will pay him $100,000 for 5 promotional appearances
throughout the course of the Browns’ 2014 season. The terms of the contract state
that this is a “complete and exclusive statement of the entire agreement between Mr.
Mingo and Bil-Jac”. Mr. Mingo was excited to sign his first endorsement contract and
he didn’t read over the terms of the contract until after he signed it. He was confused
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Business Law Midterm Exam – Part I (25 Points)
as to whether the terms meant that he would receive $100,000 for each of the 5
appearances or whether he would receive a total of $100,000 for all 5 appearances.
Mr. Mingo called up the CEO of Bil-Jac and asked this question; the CEO responded
by saying that the contract language was written a bit poorly and unclearly but that he
thought that Mr. Mingo would receive $100,000 for each of the 5 appearances for a
total of $500,000. Mr. Mingo said that he agreed with that interpretation of the
contract terms and that he just wanted to make sure that they were on the same page.
The CEO put this in writing and sent it to Mr. Mingo. After Mr. Mingo did his 5
appearances, he received a check for $100,000, which was far less than the $500,000
that Mr. Mingo had believed that he would be paid after receiving the CEO’s letter.
Mr. Mingo comes to your office and tells you that he wants to sue Bil-Jac. Mr. Mingo
is wondering if the letter that he received from the CEO of Bil-Jac will be admitted
into evidence to provide some clarity about the terms of the contract. Will the
CEO’s letter be admitted into evidence by the court under the Parol Evidence
Rule? Why or why not? Please explain your answer. Your answer should
contain all of the relevant law and a clear application of law to facts in addition
to an answer to this question. Your explanation needs to be an explanation that
can easily be understood by a non-lawyer. (5 Points)
Both parties are in agreeance that it is not entirely clear on the contract itself
how much Mr. Mingo is getting paid, so the courts would examine the
contract itself and interpret what was on it, regardless of any further
communication that may exist between the two parties. If the total sum of
$500,000 is nowhere to be found on either copy of the contract, Mr. Mingo will
not be in very good standing to sue Bil-Jac.
Question E
In an effort to drum up positive publicity, the Cleveland Indians sign the legendary
Jim Thome to a contract for the 2015 season. The terms of the written contract state
that Thome will only earn his salary of $1,000,000 on the condition that he hits 30 or
more home runs during the 2015 season. Thome hits 28 home runs during the 2015
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Business Law Midterm Exam – Part I (25 Points)
season, including a game winning home run in Game 7 of the World Series. Shortly
after the championship parade, Thome stops by the Indians’ payroll office to collect
his check. Thome is told that he did not earn any salary for the 2015 season. Thome
said that he signed a contract with the Indians in which his duty was to hit home runs
and the Indians’ duty was to pay him. Thome said that he did his duty and now it is
time for the Indians to do their duty. Is Thome right? Do the Indians have a duty
under the contract to pay him? Why or why not? Please explain your answer.
Your answer should contain all of the relevant law and a clear application of
law to facts in addition to an answer to this question. Your explanation needs
to be an explanation that can easily be understood by a non-lawyer. (5 Points)
The contract is operating under the theory of Strict performance. The Indians
presumably have a written contract that clearly explains the terms that 30 or
more home runs are needed in order for Mr. Thorne to receive his salary for
that year, and both parties have the duty to perform under Condition
Precedent. A numerical figure is outlined in the terms of the contract for both
parties. The court will examine the number of home runs he achieved under
the standards of Strict Performance to see if Mr. Thorne performed. If Mr.
Thorne does not hit 30 home runs, The Cleveland Indians do not have the duty
to pay him a salary until that event happens, and a lack of performance could
be construed as a material breach of contract.
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