Business Law Exam: Solutions, Analysis, and Legal Principles

This document presents a comprehensive solution to a Business Law exam, providing answers and explanations to a variety of legal scenarios. The solutions cover key areas of business law including contract law, agency, partnership, sole proprietorship, and negligence. Each question is addressed with the correct answer and a rationale, helping students understand the underlying legal principles and apply them to different situations. The document analyzes cases involving breach of contract, shareholder agreements, liabilities of business owners, and the responsibilities of directors. It also addresses issues of insurance, government regulations, and property rights, offering a thorough review of the subject matter. This resource is designed to assist students in preparing for their exams and improving their grasp of business law concepts, demonstrating how legal principles apply to real-world business situations.

Running head: Business Law Exam
Business Law Exam
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Business Law Exam
11.
Option (b) is the correct option, i.e. the conditional seller can seize the truck and sue for the
balance amount.
12.
Option (d) is the correct option. The situation could have been avoided had there been a
shareholders’ agreement signed by all the shareholders for such situations.
13.
A.
Vanessa would be paid for the number of weeks or months that would be proper notice of
termination period for her. Thus, option (b) is the correct option.
B.
Option (a) is the correct option she was fired in a rude and unnecessarily nasty manner.
14.
Ace would not be bound by the act of agent, Grant, as he not followed the instructions he was
given by the company. Thus, option (b) is the correct option.
15.
Jane can successfully sue the directors for breach of contract as the directors have failed to
discharge their responsibilities as directors. Hence option (d) is the right option.
16.
Option (c) is the right answer. In case Ted’s dad too involved in the management he would be
deemed as a general partner.
17.
Option (c) is the correct option, i.e. partnership exists where Joe and Mary own a shoe store
business with the profit and losses divided in 60/40.
18.
No, since the agreement does not contain any specific details regarding the suitability of the farm
for cattle. The oral discussion between the Shirin and Joanie would not be considered for the
purpose of determining liability of Joanie as even she had no idea about the cattle farming.
19.
Since the business is a sole proprietorship business and in the name of Janice hence, the
liabilities of the business is liabilities of Janice only. James is not liable for the liabilities of the

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Business Law Exam
sole proprietorship business. Hence, Willle’s Wax Suppliers will have right to recover the dues
of $10,000 from the personal property of Janice but not from James as the business is a sole
proprietorship business of Janice.
20.
(a) The liability in this case rests solely with Karla as she was visiting her boyfriend in the time
of duty. Since, Karla’s employer was absolutely unaware of such action of Karla the employer
will not be liable to George. Hence, Karla will be personally liable to George to make good the
losses and damages to George subsequent to the accident.
(b) No, nothing changes in respect of liabilities of Karla and her employer even if George is an
employee of Billie’s courier service except that George’s employee will take responsibility to
provide him with necessary accidental and other employment benefits in such situations.
21.
(a):
The insurance company can use the callous and careless attitude of Dieter. Thus, insurance
company can used negligence as the cause that resulted in fire thus, the company is not liable to
pay. The company would be quite successful in its claim.
(b)
Yes, the insurance company can refuse to pay. Because it was negligence on the part of Dieter
that resulted fire and Insurance Company does not cover for negligence.
22.

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Business Law Exam
The Government can use the act which was enacted to allow only people below the age of 19 to
sue Municipalities. Thus, the Government can use the provision as a defence against the petition
filed by Zelda.
23.
The bank will have the remedy to recover the dues from Tim however, there would be no
liability to Dough as he will have a good right on the property as he purchased the property
believing that the seller has a good right.
24.
Joan will have no right against the Museum as there was no contract between Joan and the
Museum. However, Joan can sue Leonardo for fraud and recover damages from him for signing
the contract to sell the painting to the Museum at $450,000.