Examples of Examination Questions with Solutions

Insight into the Final Examination Questions

The following are examples of examination questions, with solutions for your reference. These questions are similar to what you will see on the final examination, but this document does not reflect the actual length and content of the examination.
1. Indicate whether each of the following independent statements is correct. Explain your responses.
a) Under strict liability, the person who caused the injury is liable only if fault attaches to their action.
b) Under the principle of vicarious liability, an injured customer can recover damages from either the employer or the employee who caused the injury, but not both.
c) A tort occurs only when a person’s actions inadvertently or unintentionally cause a loss to the other person or their property.
d) The standard of care expected from a professional is higher in their area of expertise than that expected from an ordinary reasonable person.
Solution:
a) Incorrect. Under strict liability, the person who caused the injury is liable, regardless of whether any fault attaches to that person’s actions.
b) Incorrect. While vicarious liability makes the employer liable for torts committed
by an employee in the course of the employee’s work, the employee remains personally liable in tort.
c) Incorrect. Torts may also involve intentional conduct; for example, assault and battery, trespass to land, false imprisonment, nuisance, or defamation.
d) Correct. First, a professional must have the skills and abilities that one would expect from an expert in that field. Second, a professional must exercise these skills and abilities as a reasonably prudent member of the profession would.
2. Examine each of the following independent situations. Identify whether each raises issues with regard to the law governing the formation of contracts. For each situation, first clearly state the applicable legal rule(s), and then apply the legal rules to the facts of the situation.
a) Randolf Singh, a minor, ordered some gaming software on the internet from GS Inc. (GS). GS accepted the order and charged the credit card that Randolf provided. Just prior to shipping the order, GS learned that Randolf was a minor and repudiated the contract. Randolf wishes to sue GS for breach of contract.
b) Harry Boyd, the plaintiff in an action, was attempting to enforce a contract in which the defendant, Kris Sures, agreed to sell Harry his property, Blackacre, for $100,000. As proof of the contract, Harry provided a letter that he wrote to Kris and signed accepting the offer. Explain whether the court will accept Harry’s letter as proof of the contract of sale of the land.
Solution:
a) Unless a contract is for necessaries or for the benefit of the minor, it is voidable at the option of the minor that is, the other party remains bound by the contract until the minor repudiates it.
GS does not have the option of repudiating the contract and is bound by the contract until Randolf repudiates it.
b) Contracts for the sale of land must be evidenced in writing to satisfy the Statute of Frauds. The writing need only be signed by the person trying to deny the existence of the contract.
Since Harry is trying to prove the existence of the contract, the writing needs to be signed by Kris. Since it is signed by Harry, the court will not accept this as proof of the contract of sale of the land.
3. Jon Lowe and Dan Denysios are partners in a home furniture business, JD Home Furniture (JDHF). Jon looks after the retail selling and Dan deals with the wholesale purchasing. Because of their respective areas of expertise, if either of them should die, JDHF would face severe challenges. After discussion, Jon and Dan agreed to purchase a $500,000 life insurance policy on each other in order to provide some cash flow to the other partner in case such an event should occur. Jon suddenly died, and the insurer, Full Life Insurance Co., refused to indemnify Dan.
Required:
Explain the legal rules that would apply in this situation and explain the likely outcome.
Solution:
In a life insurance contract, the insurable interest is the amount of the policy. There must be a business relationship or a family relationship between the beneficiary and the insured person. If it is a business associate whose life is insured, their written consent is also required. The insurance policy is for $500,000, and this is the insurable interest of Dan in the life of Jon. Dan and Jon had agreed to take out life insurance on each other; however, it does not seem that they gave their consent in writing. This is required for insurance on the life of a business associate. Consequently, Full Life Insurance Co. could refuse to pay out on the policy to Dan.
4. Song Li has a one-person firm, Accounts Now. Song hires Hedwig VanDramar to install new accounting software, to configure the software for her professional needs, and to input all the data from Accounts Now clients into the computer for use with the new software. Hedwig has just done the same work for UR Accountants. Song and Hedwig agree that Song will pay Hedwig $4,000 per month for the work and that it will be done over three months, from January 1 to March 31.