1) Red Owl Stores, Inc induced the Hoffmans to give up their current successful business to run a Red Owl Franchise. Although no contract was ever signed, the Hoffmans incurred numerous expenses in excess of $5,000 based on Red Owl's representations. When the deal ultimately fell through because of Red Owl's failure to keep its promise concerning the operation of the franchise agency store, the Hoffmans brought suit to recover their losses from the business they left behind and their out of pocket expenses on the Red Owl project. Will the Hoffmans recover any or all of their money?

A) No, the Hoffmans cannot recover anything because the Statute of Frauds should apply.

B) No, because the business they left behind was not part of the contract with Red Owl.

C) Yes, the can recover everything under the doctrine of promissory estoppel.

D) Yes, they can recover their out of pocket expenses on the Red Owl project because they relied to their detriment on Red Owl.

2. Owens, a federal prisoner, was transferred from federal prison to the Nassau County Jail pursuant to a contract between the U.S. Bureau of Prisons and the county. The contract included a policy statement that required the receiving prison to provide for the safekeeping and protection of the transferred federal prisoners. While in the Nassau County Jail, Owens was beaten severely by prison guards and suffered lacerations, bruises, and a lasting impairment that caused blackouts. Can Owens, as a third party beneficiary, sue the county for breach of its agreement with the U.S. Bureau of Prisons?

A) Yes, because  the intention to benefit a third party may be gleaned from the contract as a whole.

B) No, because while the contract implies the intention to benefit a third party it does not specifically identify which party.

C) Yes, because the contract was made to benefit third parties and it is not necessary to identify the third party.

D) No, because Owen was a mere incidental beneficiary to the contract.

3) Patricia Aiken suffered a heart attack and was hospitalized at Phoenix Baptist Hospital and Medical Center, Inc. Later she passed away. At the time of her admission, the Aikens told the hospital that they did not have the money to pay for medical care. At the same time, Patricia's husband, Thomas, signed an agreement to pay her medical expenses. He did not read what he signed, no one explained the agreement and he later claimed that he was so upset that he couldn't remember signing anything. When the bills were not paid, the hospital filed suit. Will the Aikens have to pay the hospital?

A) Yes, because the hospital relied on the signed agreement and performed.

B) No, because while there was a written agreement the performance resulted in Mrs. Aikens demise.

C) Yes, because even though the hospital was aware of the Aiken's lack of funds, Mr. Aiken should have known when he took his wife to the hospital that they did not give care for free.

D) No, because the agreement was an adhesion contract obtained under circumstances that made it unenforceable and it was not explained to him at the time by the hospital.

 4) Steven Lanci was involved in an automobile accident with an uninsured motorist. Lanci was insured with Metropolitan Insurance Co., although he did not have a copy of the insurance policy. Lanci told Metropolitan that he did not have a copy of the policy and entered into negotiations with them in the meantime. Ultimately Lanci settled for $15,000, noting in a letter to Metropolitan that this was the "sum you represented to be the...policy limits applicable to the claim." After signing a release, Lanci learned that the policy limits were actually $250,000 and he refused to accept the settlement proceeds. Lanci argued that the release had been signed as a result of a mistake and therefore is unenforceable. Should the court enforce the contract?

 A) Yes, because Lanci as a reasonable person should have known what the policy limits were.

B) Yes, because Lanci entered into the negotiations knowing that he did not have a copy of the policy and he assumed the risk of being unprepared.

C) No, because ethically Metropolitan should have given him another copy before the negotiations.

D) No, because Metropolitan knew the policy limits, knew that Lanci thought them to be $15,000 and that he entered into the contract because of that mistake of a material fact.

5) Southard was stranded in Hawaii as a result of an airline strike.  He had purchased a round trip ticket before leaving his home in Denver. He sued the union for tortuous interference with his contract with airline and sought to recover the additional expense he incurred on another airline.  Was the union liable to Mr. Southward?

A) The union was liable because they were the proximate cause of Mr. Southward's need to spend additional monies to return home.

B) The union was liable because they intentionally tried to prevent Mr. Southward from returning home.

C) The union is not liable because the strike was  legal and therefore one of the permitted interferences with a contractual or business relationship.

D) Both A and B 

6) Glen Grove brought a 1936 Pontiac from Bernard Stanfield. Stanfield signed the certificate of title, which stated that the car was sold for $1,000. No other terms of sale were mentioned in the certificate, and none were incorporated by reference. Three years later, Stanfield filed suit against Grove in a Missouri State Court, claiming that Grove still owed $9,000 for the price of the car. At trial, Stanfield testified that he and Grove had an oral agreement by which Grove was to pay $1,000 for the "title document" and $9,000 for the actual car. The court entered a judgment for Stanfield. What will happen on appeal?

A) The court will uphold the entrance of the parole evidence and keep the verdict for Stanfield intact.

B) The court will uphold the verdict for Stanfield because the writing was not sufficient enough to constitute a written contract so oral evidence can be heard to explain the terms of the agreement.

C) The court will overturn the verdict of the lower court because the title is a legally sufficient document to form a contract.  Oral evidence should not be allowed to amend the terms of the contract.

D) The court will overturn the verdict because any reasonable person would have not turned the title over to someone else without getting all his money. Giving more money to Stanfield would unjustly enrich him.

7) John Agosta and his brother Salvatore had formed a corporation, but disagreements between the two brothers caused John to petition for voluntary dissolution of the corporation. According to the dissolution agreement, the total assets of the corporation, which included a warehouse and inventory, would be split between the two brothers by Salvatore's selling his stock to John for $500,000. The agreement was approved, but shortly before payment was made, a fire destroyed the warehouse and inventory which were the major assets of the corporation. John refused to pay Salvatore the $500,000, and Salvatore brought suit against him for breach of contract. Will John win?

A) Yes, because the value of the stock he is purchasing is not worth $500,000 anymore due to the fire.

B) Yes, because the court cannot require him to specifically perform to Salvatore's unjust enrichment.

C) No, because the agreement was for the sale of stock not a functional business.

D) No, The subject matter of the agreement, the shares of stock was not destroyed in the fire. The doctrine of impossibility of performance does not apply and John cannot avoid his contract.

8) Southeast Shipping Company challenges an Alabama statute, claiming that it unlawfully interferes with interstate commerce. A court will likely

a) balance Alabama's interest in regulating against the burden on interstate commerce.

b) balance the burden on Alabama against the merit and purpose of interstate commerce

c) strike the statute.

d) uphold the statute.

9) Vern, the security guard for WiFi Communications, detains Yao, a customer, whom Vern suspects of shoplifting. This is false imprisonment if

a) Vern detains Yao for an unreasonably long time.

b) Yao did not shoplift.

c) Yao has probable cause to suspect Vern of deceit.

d) Yao protests her innocence

10) Nu ProduxInc (NPI) agrees to sell 100 cell phones to MYTALK Cell Service. NPI identifies the goods by marking the crate with red stripes. Before the crate is shipped, an insurable interest exists in

a) not NPI or MyTalk.

b) NPI and My Talk.

c) NPI only.

d) MyTalk only.