CONTRACTS X and Y
PROFESSOR JANICE KOSEL
FINAL EXAM
DECEMBER 2001

INSTRUCTIONS

This is a closed book exam. There are TWO PARTS to this examination -- MULTIPLE CHOICE and ESSAY.

PART I

The MULTIPLE CHOICE segment, is WORTH 1/3 of your grade. Indicate the best answer on the ParSCORE Test Form provided.

PART II

The ESSAY segment, is WORTH 2/3 of your grade. If you believe you lack sufficient facts to answer the question, please specify what additional information you require and how it will affect your answer.

The total time for this exam is 3 hours. You may allocate your time as you wish.

Read, think and analyze before you begin to write.

Good luck and have a great holiday!

II

On September 11, 2001, four commercial airliners were hijacked by terrorists. As a result, nearly four thousand people were killed. The following stories are completely apocryphal renditions of subsequent events:

A

People from across the country made charitable contributions in record amounts to help the victims of the tragedy. Debbie signed a pledge card promising to donate $1,000 to the 911 Fund and received a baseball cap emblazoned FDNY in recognition of her pledge. Now, however, seeing the great amount of charitable funds already available to victims, she has decided to renege and contribute instead to efforts to relieve the suffering of children in Afghanistan.

Advise Debbie.

B

A firefighter and a bond trader carried a physically challenged executive, George S., down eighteen flights of stairs in the World Trade Center to safety only thirty seconds before the tower collapsed. The executive, overwhelmed with gratitude, orally promised his rescuers each a pair of lifetime season tickets to the Yankees. Now George has decided to break his promise and treat one of his rescuers (the firefighter was killed in action later that day) to dinner at Windows on the World when and if the towers are rebuilt. Even though the Yankees lost the World Series, the four tickets would still cost about $8,000 a year.

Advise George.

C

Believing that it is an ill wind that blows no one good, Sammy (a former Navy seal) decided to capitalize on the tragedy. He formed a new business to provide personal security for those in need. Because Sammy was in a hurry to get the business up and running, he drafted a form agreement himself. It read in its entirety:

"Sammy agrees to provide twenty-four hour a day personal security for customer at a price of $5,000 a day. If customer is not completely satisfied, he/she may terminate this agreement at any time on ten days notice to Sammy."

Frightened and disoriented by the events of September 11, Frieda signed up for the personal security service. Several days later, after she had calmed down a bit, Frieda decided to cancel the service -- not because of its quality but because of its price.

Advise Frieda.