florida-bul2131-mod-6-exam

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QUESTION 1

  1. Marvin entered the auto dealership to buy a new car. Very elderly, Marvin walked with difficulty and when he discussed cars with the salesperson, he asked questions about speed and gas mileage. Marvin signed a contract to buy the car, and allowed the dealership to charge $500 as a non-refundable deposit and downpayment on his credit card. Marvin promised to return the next day with the remainder of the money, and slowly walked down the street toward home.

    The next day, Marvin returned, accompanied by his 50-year old son, The son explained that Marvin was incapacitated by dementia and didn’t fully understand the nature of the purchase or how much he was spending on the car. The son asked for the $500 back, and the dealership refused to do that, citing that Marvin didn’t appear to have diminished capacity.

    Marvin and his son sued the dealership in small claims court, to get the $500 back plus the the $260 in court fees. Will Marvin and his son prevail?

    A.
    B.
    C.
    D.

10 points

QUESTION 2

  1. Maxwell and Minnie are the two children of Bob and Bobbie Smith. While Bob and Bobbie are at work, the children are in school, or at the day care center that picks them up after school and watches them until a parent picks them up.

    Max and Min were picked up at school by the day-care bus, and taken to the day care center until their parents would pick them up at 6 p.m. The brother and sister found some acetone in a storage closet. Between 5 and 5:30 p.m., they used the spray bottle on the play ground, spraying the cars of some of the day care workers by squirting the spray through the chain link fence. The acetone damaged the paint jobs, and about a half dozen cars would require repainting. When their actions and the damage were discovered, Bob and Bobbie were notified that they would be expected to pay the damages caused by the kids vandalism.

    Will Bob and Bobbie be responsible for the acts of Max and Min?

    A.
    B.
    C.
    D.

10 points

QUESTION 3

  1. Roger operates a day-care center that employs five child-care workers. The most recent hire was Marley. Roger told her that she would have an initial one-year contract period, and that after the year, she’d be evaluated for permanent work. Six months after she was hired, the state passed a law that prohibited any day-care operations within a mile of an electric power generation plant. Because Roger’s day care center was within a half-mile of the power plant, it was shut down by the new law.

    Marley sued Roger for the remaining six months on her contract, arguing that he breached his promise, which was an unconditional promise to pay her for a year. Roger defended by saying that there was no longer a contract, so it could not be breached.

    Will Roger or Marley prevail?

    A.
    B.
    C.
    D.

10 points

QUESTION 4

  1. Robert agreed to buy Charlie’s business for $500,000, including the building, fixtures, supplies and inventory. As part of the agreement, Charlie agreed not to compete with Robert in the local community for a period of three years. At the same time, Robert knew that a former manager at Charlie’s place, Pat, had retired, but might want to re-enter the market as a competitor to Robert now that he’s bought Charlie’s place. To prevent that re-entry by Pat, Robert agreed to pay Pat $50,000 to not compete with him for a period of three years. Robert reasoned that three years would give him a chance to establish his own reputation in the community, and he could thereafter withstand any challenge by Charlie or Pat reentering the local market.

    Are these actions taken by Robert enforceable contracts?

    A.
    B.
    C.
    D.

10 points

QUESTION 5

  1. Tish rented a home she owns to Jean. As part of the rental contract, the parties agreed that Tish will not assume any liability for any injury to Jean arising out of the possession or enjoyment of the rented property. Tish reasoned that this is a good way to not have to worry about being sued by Jean for some unforeseen event that might disclose negligence on Tish’s part. Jean agreed because she understood that without such a clause, she would have to pay about a $100 more per month, and she reasoned that she can benefit more by the certainty of $100 less per month, rather than having the opportunity to sue Tish in the extremely unlikely event that Jean is injured by Tish’s negligence regarding the property.

    If Jean is injured because Tish negligently failed to remember to have the garage door fixed one day, will Tish be liable for Jean’s injuries or not?

    A.
    B.
    C.
    D.

10 points

QUESTION 6

  1. Tom offered to sell his car to Henry. Tom sent Henry an e-mail, and the pertinent part of that e-mail is presented here: “My car is a 1992 Geo Metro Convertible in perfect condition with 80000 miles on it.” Henry replied that he would be willing to pay no more than $5000 for it. Tom was surprised because the car was probably worth about $1800, but he shrugged and took the deal. Henry sent the $5000. The car was shipped by car transport van to Henry, and when Henry saw it, he realized that he had misread the e-mail and thought that the car only had 8,000 miles when in fact it was 80000. Henry explained the problem to Tom, and offered to pay to have the car shipped back to Tom, or to sell it for him in Henry’s town. Tom refused, saying that he’d sold the car to Henry.

    If Henry sues Tom in Small Claims Court to recover the difference between what he paid ($5000) and the true value of the car ($1800) will Henry prevail?

    A.
    B.
    C.
    D.

10 points

QUESTION 7

  1. Regrettable Insurance Company agreed to provide homeowner insurance for Michelle and her husband Barry at their new home at 1600 Pennsylvania Avenue in a major U.S. city. The first year, the policy was correct in all respects, but when it was renewed, a clerical error occurred that changed the address to 1200 Pennsylvania Avenue. Neither the insurance company nor Barry and Michelle noticed the clerical error, and they paid bill.

    Later, while Barry was hosting a beer get-together with one of his old university professors and a police officer, the guests both fell on the steps in the Rose Garden and injured themselves, then sued Barry and Michelle for not reasonably marking the step so that they would have seen it. The courts found Barry and Michelle liable because not only was the step not marked, but the couple knew the visitors would be having a beer.

    Only then did Regrettable Insurance notice that the insured property was listed as 1200, not 1600 Pennsylvania Avenue. On that basis, Regrettable denied payment of the claims. Will the insurance company avoid paying because the wrong property was insured?

    A.
    B.
    C.
    D.

10 points

QUESTION 8

  1. Andy was interested in selling his car to Abigail. Abigail asked Andy three questions about the car: (1) Has it ever been in an accident? (2) Has all maintenance been performed? and (3) are there recessed child car-seat D-rings in the back seat?

    Andy realized the car had been in an accident, but it wasn’t a bad one, so he said it was accident-free. He said that the car had been fully maintained on schedule, and believed that to be true, but he had forgotten about the 30,000 mile maintenance that was not done because of the cost. He said that he knows there are recessed rings for child car seats in the back because his sister had used child seats. What he didn’t know was that she had used the lap and shoulder belt because there were no D-rings recessed.

    Will Andy be liable to Abigail for any of the incorrect statements made during the creation of this contract?

    A.
    B.
    C.
    D.

10 points

QUESTION 9

  1. Bob was being cared for at home by his nephew Robert. Robert got free room and board for taking care of Bob, and Robert went to the local university, so it worked out well for everyone. Robert knew that Bob had several hundred thousand dollars invested in certificates of deposit, and was amazed that Bob earned such little return on that investment. He repeatedly discussed with his uncle the need to diversify and invest in more productive assets. After several weeks of this, Bob finally agreed to purchase some mutual funds that Robert recommended, and the funds promptly tanked in a bad recession.

    Can Bob prevail in the argument that his decision to purchase stocks was not really his own, and thereby get out of the contract?

    A.
    B.
    C.
    D.

10 points

QUESTION 10

  1. Fox CPA Services agreed to do Donner Partnership’s income tax return for the last year, for a price of $2,500. On April 14, Fox CPA realized that the Donner return was more complicated than Fox had assumed and that it would take about twice as long as expected to finish the return. Fox called Donner, explaining the situation, and said that Fox would not be able to complete the tax return by April 15 unless Donner agreed to pay $5,000, not $2,500.

    Looking at the calendar, Donner realized that it basically had no alternative because another firm couldn’t pick up the job this late and make the April 15 deadline, so Donner agreed to pay the $5,000 fee, which was double the original agreement. After the income tax return was filed by Fox, Fox billed Donner for the $5,000 and Donner sent a check for $2,500.

    Will Fox prevail if it brings legal action against Donner for non-payment of the additional $2,500?

    A.
    B.
    C.
    D.

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Title: florida-bul2131-mod-6-exam

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