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If Kay, a partner in an auction business, has a personal creditor who is aggressive about collecting the debt: a. Kay can sell her share in the partnership to repay the debt, regardless of what her partners want her to […]

Two universities located within 30 miles of each other agree to divide their market so as to help them both. The two schools draw a line down a map and each university agrees to accept students only on their side […]

A fundamental aim of the National Labor Relations Act is the establishment of industrial peace and the preservation of the flow of commerce. Adherents of the Post Chicago School use an antitrust analysis based solely on whether competition has been […]

The form of business ownership that is the most easily transferable is the: a. general partnership. b. corporation. c. limited liability company. d. limited partnership. A Japanese company operates a ship called the Kinia. If the Kinia sails in U.S. […]

The economic loss doctrine states that, when the injured party is a corporation and the harm is purely economic, the only remedies available are those under the common law. If Valley Bridge contracts with Rainbow Painters to paint a bridge […]

The Kelsoe v. International Wood Products, Inc. case was an example of: a. promissory estoppel. b. partial performance. c. illusory promises. d. lack of consideration. Which of the following is generally covered under casualty insurance? a. Employee theft or embezzlement. […]

If repossessed collateral is sold or otherwise disposed of by the creditor, the time, place, manner, and method of disposal must be: a. commercially reasonable. b. scheduled with the debtor so that the debtor is able to attend. c. court […]

Sandy may be charged a fee, but will not face criminal penalties for writing checks on an account with insufficient funds to pay them. Mark and Cynthia work for Bryson Supply Co. If the company files for Chapter 7 bankruptcy […]

The statute of limitations for breach of warranty under the UCC is? a. one year. b. two years. c. three years. d. four years. John purchased $600 worth of clothes from Clothing Mart. He paid for the clothes with a […]

Oxtron, Inc. is considering establishing a program that actively encourages ethical behavior. What reasons would support Oxtron’s adoption of an ethics program? Lance sued Mega Corp. for negligence, and a jury awarded him $1.2 million. Mega Corp. filed a motion […]

Which of the following opinions indicates that the company’s financial statements fairly present its financial condition according to GAAP? a. Qualified opinion. b. Adverse opinion. c. Disclaimer of opinion. d. Unqualified opinion. Under a state law, a dog owner is […]

Jamie is building a house on her lot. She invites Earnie of Earnie’s Excavation to bid on the excavation job. Earnie observes that the lot next to Jamie’s is also under excavation and the soil in that lot is normal […]

Shirley is an actress under contract with Twentieth Century. Shirley agreed to perform the lead role in a musical to be filmed in Hollywood by Twentieth Century. At the last minute, Twentieth Century decided to scrap the musical and assigned […]

David has worked as a CPA for Accountants R Us for about eight months. When his wife had a baby, he requested to take some time off. He believes he is allowed to do so pursuant to the Family and […]

Hayden owes Luther $5000. Hayden will only be able to pay this debt if he is able to sell his one-year-old Harley motorcycle, valued at $20,000. Hayden writes a check to Luther that reads, “Payable to the order of Luther […]

Which of the following would be an example of a civil lawsuit? a. George is being prosecuted for bank fraud. b. The government has initiated an action against Jeff for operating a motor vehicle under the influence of alcohol. c. […]

Monic, a college professor, makes 30 photocopies of a magazine article and passes the article out to her students. The students are assigned to read the article and write an opinion paper about it. Has Monic violated copyright law? a. […]

Shelly offers to sell Jane goods both parties know are stolen. Jane accepts the offer, and agrees to pay for the goods. Later, Jane refuses to accept or pay for the goods. If Shelly sues Jane for breach of contract, […]

Paula is a sales agent for The Rock Insurance Company. Paula accepts a check from a customer made payable to her in payment for the premium on an insurance policy. Prior to depositing the check in The Rock’s bank account, […]

Under European Union law, any agreement, contract, or discussion that distorts competition within European Union countries is illegal. Drawers and indorsers are secondarily liable on negotiable instruments. Answer: T Identify and discuss six values that are almost universal. Answer: The […]

Marvin contracts with House Painters R Us to paint the interior of his house lemon yellow throughout. The total contract price is $7,000. House Painters R Us’s anticipated profit on the job is $4500. If Marvin breaches the contract before […]

Under the UCC, no warranty of title arises unless the contract is in writing. Sweet Plantation, Inc. made a written contract with Candy, Inc. whereby Sweet Plantation agreed to supply all of Candy’s sugar requirements for the next year at […]

Ramiro is dissociated from the partnership he helped form ten years ago. If his partners want to continue the business, what must they do? Does it make any difference if the dissociation was wrongful? Tony signed a contract agreeing to […]

MegaCorp is incorporated under Delaware law. It is registered to do business in New York. Legally, in New York MegaCorp is known as what kind of corporation? a. Domestic. b. Foreign. c. Alien. d. Cumulative. What is the purpose of […]

Wedney, Inc. sold a meat processing machine to Yoro Chickens, taking a security interest in the machine. Yoro Chickens defaulted on the loan. Wedney repossessed the machine. Wedney would like to retain the machine to use as a model. Which […]

Solomon breaches his contract with Neal to purchase the 500 pairs of socks he had promised to buy. Neal is able to sell the 500 pairs to Renny for a much lower amount. Neal then sues Solomon for damages. Neal […]

An accommodation party and a co-maker of a note have the same liability on an instrument. Southern Bar-B-Q owns a special, secret recipe for sauce which it guards because it gives the restaurant a competitive advantage. If Mort willfully misappropriates […]

Identify four ways a trust can be terminated. After her 18th birthday Lora may, by words or action, ratify a contract she made during the previous year. Answer: T Kris, a shareholder of E-Max, Inc., claimed that the business was […]

Hensley and Boyer have been negotiating for several months over issues related to the purchase and sale of some real estate. They draft a letter of intent which: a. protects both parties by ensuring the other side is serious and […]

Chapters 11 and 13 are liquidation chapters. Doyle contributed $10,000 when he became a general partner in the existing partnership of R & Z Heating. If Albert wins a judgment for $25,000 against R & Z on a claim that […]

Betty wants to hire a secretary who is “mature.” In particular, she wants to hire a woman with experience and whose children are grown (so she will not have to be staying home with sick children, etc.). She also wants […]

Which of the following is an example of incidental damages you might be awarded if you are wrongfully terminated from your job? a. The costs of psychological counseling. b. The costs of mailing resumes to prospective employers. c. The costs […]

The United States has ____ percent of the worlds population and consumes about ____ percent of the worlds energy. a. 20; 65 b. 25; 10 c. 10; 50 d. 5; 25 Which of the following is correct? a. A copyright […]

Tyron purchased a $2900 promissory note from Jared for the discounted amount of $2500. Tyron paid value, in good faith and without notice of any outstanding claims against this promissory note that read, “Pay to the order of Jared $2900 […]

A homeowner has a contract with a firewood supplier to bring a rick of hardwood at the beginning of each month from October through March. If the supplier has brought a mixture of hard and soft woods for the first […]

The FTC blocked the merger of Staples, Inc. and Office Depot because they controlled a large percentage of the national market for office supplies. It is unethical to use your lawyer as an excuse for a provision of a contract, […]

The Administrative Procedure Act: a. applies to all federal agencies. b. applies to executive branch agencies but not to independent agencies. c. applies to independent agencies but not to executive branch agencies. d. does not apply to federal agencies. Farmer […]

Immanuel Kant was a German philosopher who was a proponent of utilitarian ethics. In hopes of speeding up the approval process and making it more accurate, the Patent and Trademark Office has begun a pilot program which allows anyone to […]

Accounting contracts can be either written or oral. A claim in recoupment can be used against a holder in due course. Answer: F An Environmental Impact Statement must be prepared for every major federal action that significantly affects the quality […]

Shortly after Brian started to work at Trevit, Inc., a co-worker, Ann, began asking him out. Brian said no. Nevertheless, Ann persisted. One day Ann playfully, but intentionally touched Brian “below the belt. Which statement is correct? a. Ann defamed […]

Luella just purchased 5 shares of common stock in TriColor, Inc. for $250. Luella has the right to: a. manage the day-to-day business of the corporation. b. set executive compensation. c. require that a proposal be placed in the companys […]

The Federal Trade Commission promulgated Telemarketing Sales Rules regulating the activities of telemarketers. One of the rules prohibits telemarketers from calling a person’s residence at any time other than between 8:00 a.m. and 9:00 p.m. This legislative rule has the […]

Victoria registered a trademark under the Lanham Act. Six years later Don noticed Victoria’s trademark and filed a lawsuit to enjoin her from using it. He proved he had registered the mark in several states more than ten years before […]

The United States is the worlds largest exporter of agricultural products. An agreement may violate public policy even if the agreement does not require a party to commit a crime, tort, or violate a statute. Answer: T The prohibition against […]

If a court determines a manager’s corporate decision amounted to self-dealing: a. the business judgment rule will not apply. b. the transaction being challenged will be automatically voided. c. the manager is automatically personally liable to the corporation. d. All […]

Notren, Inc., a U.S. company, and SWT, a Singapore company, entered into a contract under which SWT is to ship party supplies to Notren. One of the terms of the contract states, “Any disputes that arise under this contract will […]

The Solomans own a cabin on the south side of Mount Henry. One day, the Solomans told Bennie and Claudia they could live in the cabin and use it as they wished until the Solomans wanted to use it again. […]

A bailment is different from a gift because: a. a gift requires consideration, but a bailment does not. b. a gift requires delivery, but a bailment does not. c. in a bailment, only possession of the property is transferred to […]

A corporation is not allowed to issue dividends to shareholders unless it is solvent. Explain the difference between an ISP and a Web host, and discuss whether they are treated alike under the Communications Decency Act (CDA). Answer: An Internet […]

Hill Computers is a retailer, which buys its inventory from Acme Co. on credit, giving Acme a security interest in the inventory. Hubert buys a computer from Hill in the normal course of business. Hubert’s title in the computer is: […]

The directors of MegaCorp learn that an outsider is planning on buying enough voting stock to get herself elected to the board of directors. MegaCorp, which has cumulative voting, quickly puts together a vote of shareholders to eliminate the company’s […]

Generally, reasonable liquidated damage clauses will be enforced: a. when actual damages are easily determined. b. when actual damages are difficult to determine. c. almost always. d. only in real estate sales contracts. Robin and Bellman, both merchants, orally agree […]

Which school of jurisprudence is based on the philosophy that what matters is not what is written as law, but who enforces the law and by what process? a. Legal positivism. b. Natural law. c. Legal realism. d. Sovereign selection. […]