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Holiday Sales Company and Global Distributors, Inc., enter into an express contract for the delivery of imported specialty goods. Express contract terms are given a. less priority than the parties prior dealing. b. less priority than the trade usage in […]

The payment of Johns debt to Kirsten is guaranteed by Johns personal property. Kirsten is most likely to perfect her interest by a. attaching a bright label to Johns property. b. calculating the precise amount of Johns debt. c. correcting […]

Contracts that are executory on both sides can be rescinded by agreement. A deceased joint tenants interest in jointly held property passes to his or her heirs. Answer: F If the purpose of a licensing statute is to protect the […]

Bea is a shareholder of Candy Confections Corporation. The right to inspect corporate books and records is a. held by Bea only if she is a director. b. held by Bea, without restrictions. c. held by Bea, with some restrictions. […]

To be enforceable, a memorandum evidencing an oral contract that would otherwise be unenforceable must include all essential terms. In most states, if neither party requests a jury, there will be no jury trial. Answer: T A seller must provide […]

To be ethical is to “do the right thing but it does not otherwise “pay. If a note is payable in thirty days, payment is due by midnight on the thirtieth day. Answer: t Under federal law, an employer can […]

Fact Pattern 28-1 Nika owns land in Ohio. Her ownership rights include the right to sell or give away the property without restriction, and the right to commit waste, if she chooses. Refer to Fact Pattern 28-1. Nikas ownership interest […]

Each bank in a collection chain must pass a check on before midnight of the day of its receipt. An offer to form a bilateral contract is accepted only by completing the contract performance. Answer: F One guideline to evaluating […]

Persons whose names appear in a corporations stock book are ordinarily entitled to notice of shareholders meetings and the right to vote. Securities that are exempt from the registration requirement can generally be sold and resold without being registered. Answer: […]

Good Tire Company and Hiway Auto Service enter into a contract for a sale of tires. Good Tire is a merchant who deals in goods of the kind sold. Under the UCC, an implied warranty of merchantability arises a. automatically […]

Denise and Elke do business as Final Curtain Decorators. In most states, for purposes of holding title to property, this partnership would be treated as a. an aggregate of the individual partners. b. a natural person. c. an entity. d. […]

Thor Power Products Corporation permits its directors to be elected by cumulative voting. This a. allows minority shareholders to be represented on the board. b. assures directors that they will be selected by their peers. c. guarantees Thors executive officers […]

The payment of Edens debt to Flem is guaranteed by Edens personal property. This property is a. a secured party. b. a secured transaction. c. a security interest. d. collateral. Fact Pattern 20-1 Northeast Bank makes mortgage loans to consumers, […]

Leather Products Stores, Inc., rejects a shipment of goods that does not conform to its contract with Manufactured Cowhide Corporation, but is unable to obtain instructions from the seller. Leather Products may a. resell or return the goods only. b. […]

Rona and Savannah do business as Treasure Island Traders. Acting in good faith on the firms behalf in a deal with Unlimited Potential, Inc., Rona makes an honest error in overestimating the profit. To her firm, Rona is a. liable […]

Ralph offers to sell Sophie, who is seventeen years of age, a car about which Ralph intentionally misrepresents several material facts. In reliance on the misrepresentations, Sophie buys the car. To prove fraud in this transaction, Sophie would have to […]

Screen Perfect, Inc., and TV Stores enter into a contract for a sale of high-definition television sets. Screen Perfect ships goods that do not exactly conform to the contract in some details. TV Stores a. cannot reject the entire shipment. […]

Mountain Bikes, Inc. (MBI), and Nero enter into a contract for a sale of a mountain bike. MBI, a merchant who deals in goods of the kind sold, makes implied and express warranties in connection with the sale. The Magnuson-Moss […]

An acceptance must be unequivocal. When a corporation is dissolved voluntarily, the corporation must file articles of dissolution with the state. Answer: T A borrower has the right to purchase the property after default by paying the full amount of […]

Yves is an accountant charged with negligence by Zesty Soup Company, a client. Yves may successfully defend against the claim if he can show that a. scienter was lacking. b. he complied with all International Financial Reporting Standards. c. the […]

In sales law, a warranty is an assurance by one party of the existence of a fact on which the other party can rely. Each partner is an agent of the partnership in carrying out the usual business of the […]

A receipt issued by a warehouser for goods stored in a warehouse is a bill of lading. Bob is shopping in Carls Hardware Store when a nail gun in use by Dan, one of Carls employees, fires without warning and […]

A mistake of fact can only be bilateral. An incidental beneficiary can sue directly to enforce a promisees promise. Answer: F “Unless otherwise explicitly agreed, title passes to the buyer at the time and place at which the seller physically […]

Diners Corporation, a U.S. firm, signs a contract with Essen, A,G., a German firm, to give Essen the right to use Diners trademark in restaurants in Germany. This is a. a distribution agreement. b. a joint venture. c. direct exporting. […]

An auction”we ask you to bid on this itemis an offer. Only two persons can hold property as tenants in common. Answer: F Some U.S. bribery laws are directed toward accountants. Answer: T A corporation cannot refuse a shareholders request […]

The E-Sign Act preempts the uniform version of the Uniform Electronic Transactions Act (UETA). To finance the purchase of a house from Tuna, Uri signs an instrument promising to pay to “Verity Mortgage Service $160,000 with interest in installments with […]

Fact Pattern 17-2 Tom draws a check, on his account in State Bank in New York, payable to Digital Media, Inc., in San Francisco. Digital deposits the check in its account at First National Bank. First National deposits the check […]

An employer is not liable for the sexual harassment of an employee by a co-worker. A service mark distinguishes products used, or “put into service, by the government. Answer: F The legality of an action is always clear. Answer: F […]

Klondike and Leola own 10,000 shares of stock in My-T Gro Corporation. On the death of ether owner, that owners interest in the stock passes to the surviving owner. This is a. a joint tenancy. b. a tenancy by the […]

A bank is obligated to pay an uncertified check presented less than six months from its date. After two years of research and an investment of a substantial amount of money, Coast-to-Coast Company (CC) develops a new product that it […]

Frida hires Gert, a real estate broker, to act as her agent to sell her house. The house burns down before being sold. The agency agreement is likely a. still in force if Frida gives Gert additional consideration. b. still […]

Some states limit the governments ability to take private property and give it to private developers. An opinion that disclaims any liability for false or misleading financial statements is too general. Answer: T A fiduciary relationship allows parties to avoid […]

Debit & Credit Accounting Services and Brickwork Construction Company negotiate a contract. Terms in the contract that are the subject of separate negotiation will be con- sidered subordinate to a. standardized terms. b. terms that can be understood only by […]

Elin decides to try to sell her collection of celebrity memorabilia in an auction “with reserve. If Elin changes her mind, she can withdraw her collection a. only before the auctioneer announces that the items are sold. b. only before […]

Tyrone draws a check payable to “Cash and presents it to United Bank for payment. This instrument is a. a bearer instrument. b. an order instrument. c. valid but nonnegotiable. d. void. Green Landscape Company buys a backhoe on credit […]

A contract may have to be in writing to be enforceable even if its performance is possible within a year. Anyone who writes a book has automatic copyright protection in every country in the world. Answer: F The simplest form […]

Express warranties displace all inconsistent implied warranties. To be legally sufficient, consideration must include something of economic value. Answer: F In most states, a person must be sixteen years of age to execute a valid will. Answer: F An ethics […]

RockStar Software, Inc., develops a new series of performance-related video games. This software is most likely protected by a. copyright law. b. patent law. c. trademark law. d. trade secrets law. Bob, research manager for CornAgri Products, Inc., applies utilitarian […]

InTown Delivery Service promises to deliver a certain couch to Kurt, who promises to pay for the service. If InTown does not perform, the firm may be required to a. do nothing. b. make another promise. c. pay damages. b. […]

Opal conveys three acres of wetlands to Pristine Places, Inc., with a deed that warrants only that Opal held good title during her ownership of the property. This deed is a. a grant deed. b. a quitclaim deed. c. a […]

An invitation to negotiate”can you afford this?is an offer. All nations have restrictions on imports. Answer: T A foreign state is immune from the jurisdiction of U.S. courts as long as the state is involved in commercial activity in the […]

Cody believes that Delta Corporation has discriminated against him on the basis of gender. Cody files a suit against Delta under Title VII. To establish a prima facie case of employment discrimination, Cody must show that a. Cody is a […]

International law attempts to reconcile the authority of each nation over its own affairs with its desire to benefit from trade and harmonious relations. A writ of execution is a court order to execute a debtor after the entry of […]

Certain reorganization cases may be converted to repayment plan cases with the consent of the debtor. Good intention is a complete defense to conversion. Answer: F An insurance application is part of the insurance contract. Answer: T Strict liability applies […]

Bobbie claims that Carl breached their contract. Carl responds that he never intended to enter into a contract with Bobbie. The intent to enter into a contract is determined with reference to a. the conscious theory of contracts. b. the […]

If a contract for a sale of goods does not include a quantity term, it is a requirements contract. Corporations, unlike persons, cannot be liable for crimes. Answer: F Federal law encourages private lenders to modify mortgages so as to […]

The initial interest rate is the part of a purchase price that is paid up front in cash. A court may depart from a precedent if the court decides that the precedent should no longer be followed. Answer: T Under […]

One requirement for a product liability suit based on strict liability is a failure to exercise reasonable care. Performance of an accord discharges an original contractual obligation. Answer: T An oral stop payment order is valid for thirty days. Answer: […]

Home Products Store buys furniture from Relax Furniture, Inc. The parties agree that the furniture will be shipped “F.O.B. Relaxs warehouse to Home Products via Swifty Shipping Corporation. The furniture is lost in transit. The loss is suffered by a. […]

In 2012, Sara writes Terror at the Track, a novel about racecar driving. Sara does not register the work with the appropriate government office. Under federal copyright law, Saras work is protected a. for ten years. b. for twenty years. […]

Elmore offers to sell a Ford F-150 for $7,500 to Grace. Before Grace can respond, Elmore refers to the prices for similar Fords and says, “Forget it. I changed my mind. Elmores offer was terminated by a. Elmore. b. Ford. […]

Pat, the manager of Quik Mart, deposits the stores receipts in its account at Regional Bank. As to the receipts, the relationship between Quik Mart and the bank is a. attorney and client. b. creditor and debtor. c. guardian and […]

Attorneys are required to be familiar with well-settled principles of law applicable to a case. When a secured debt is paid, the secured party must file a termination statement regardless of the goods classification. Answer: F Certified checks are instruments […]

U.S. laws that prohibit discrimination in employment do not apply to U.S. employees working for U.S. firms located abroad. Withdrawal from a partnership for a term prematurely does not constitute a breach of the partnership agreement. Answer: F Oral evidence […]

Nouveau Riche Corporations officers, directors, and shareholders buy and sell securities. SEC Rule 10b-5 applies to a. only the purchase or sale of a security by a financial corporation. b. only the purchase or sale of a security involving an […]

Ethical standards based on religious teachings tend to be absolute. Currently, it is not clear which, if any, laws apply to the security of e-money payment information. Answer: T Misrepresentation of a material fact cannot occur through conduct alone. Answer: […]

Property voluntarily discarded by its owner with no intention of reclaiming it is lost property. Under their police powers, states can regulate only public activities, such as political demonstrations. Answer: F The role played by women may present some difficult […]

Luke is a director of Motor Parts Corporation. Luke makes decisions with respect to Motor Parts in good faith, in what he believes is the firms best interest, and without violating any duties owed to it. If, despite these circumstances, […]

Fact Pattern 9-2 Brad defends against a breach-of-contract suit by College Credit Corporation by claiming that their deala student loan accruing interest at a certain rate and payable beginning on a certain datewas unfair because the consideration for their contract […]

The last security interest to be perfected is the first in priority over any other perfected security interests. Plant life is not considered to be real property. Answer: F Buying or selling securities on the basis of nonpublic information is […]

Signal Sets Company contracts to deliver one hundred 52-inch plasma high-definition television sets to a new retail customer, Tuner TV Store, on May 1, with payment to be made on delivery. Signal tenders delivery in its own truck. Tuners manager […]

An easement arises when the owner of one piece of land occupies the real property of a neighbor and eventually acquires title to it. Under the doctrine of comparative negligence, both the plaintiffs and the defendants negligence are taken into […]

It may be a crime to take anothers property, but it is not a crime to receive stolen goods. Crimes occurring in a business context are popularly referred to as white-collar crimes. Answer: T A person who enters into a […]

Under the Statute of Frauds, all written contracts are enforceable. Acting in good faith gives a business firm a better chance of defending its actions in court. Answer: T The owner of real property has relatively exclusive rights to the […]

Lora files a suit in Michigan against Ned over the ownership of a boat docked in a Michigan harbor. Lora and Ned are residents of Ohio. Ned could ask for a change of venue on the ground that Ohio a. […]

Insurance is classified according to the amount of the payment on a claim. Professionals are obligated to adhere to standards of performance generally accepted within their profession. Answer: T Specific performance is the remedy customarily used when one party has […]

Mac files a petition for a discharge in bankruptcy. Macs failure to appear at a meeting of the creditors listed in Macs schedules may result in Mac being a. denied a discharge of bankruptcy. b. fined. c. held in contempt. […]