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The chief aim of the European Union and other trade organizations is to minimize trade barriers among their members. A lease is enforceable even if the premises are intended for an illegal purpose. Answer: F A personal check cannot be […]

Fact Pattern 14-1 Echo takes her car to Fix-It, Inc., which repairs the car and bills Echo for $500. Echo writes out a check drawn on Capital Bank, but later, believing that Fix-It did not repair the car properly, issues […]

A course of performance is the conduct that occurs under the terms of a particular agreement. Insurance coverage is never effective until a formal written policy is issued. Answer: F All states require that members of certain professions to have […]

Regional Wood Products Company and Sylvia enter into a contract for a sale of lumber. Regional knows the purpose for which Sylvia will use the goods. Under the UCC, an implied warranty of fitness of a particular purpose arises a. […]

Under the Fourth Amendment, a general search warrant and a general search through a person’s belongings are permitted. Recovery in a product liability case may be limited when it can be shown that the plaintiff misused the product. Answer: T […]

Ramblin” Country Stables contracts to buy 1,000 horseshoes from Blacksmith, Inc., for $1 per shoe. When the market price decreases to 50 cents per shoe, Ramblin” refuses to go through with the deal. Blacksmith can recover a. $1,500. b. $1,000. […]

Under the Age Discrimination in Employment Act of 1967, a plaintiff must prove that he or she was replaced by a person “outside the protected class.” A contract is valid only if both of the parties entering into it have […]

To obtain office supplies for All-Care Medical Clinic, Britney executes a draft in favor of Chris. A draft is a. a conditional promise to pay money. b. an unconditional written order to pay money. c. a qualified promise to set […]

A promise to give value in the future is sufficient to confer the rights of an HDC on one in possession of a negotiable instrument. The establishment clause of the U.S. Constitution prohibits the federal government from establishing a state-sponsored […]

Cynthia tells Darryl that she will deliver his boxes of Paradise Cookies as he directs. A declaration that one will do something in the future is part of the definition of a. a prediction. b. a premise. c. a principle. […]

An assignment of rights in real estate often cannot be prohibited. In order to truly understand our legal system, it is important to understand the origins of the common law tradition. Answer: T The contract term “delivery ex-ship” means that […]

All unemployed workers who are willing and able to work are eligible for unemployment compensation. An installment contract is breached if a buyer accepts any nonconforming goods. Answer: F The minimum number of members of a body of officials that […]

If a principal does not ratify an unauthorized contract, the principal is not bound. If a seller is not a merchant, and the goods are not to be moved, the risk of loss passes to a buyer on tender of […]

Mango Corporation believes that Melon Corporation engages in anticompetitive behavior in an attempt to drive Mango and its other competitors out of the market. Antitrust laws can be enforced against Melon by a. Mango and its competitors only. b. Mango, […]

Machine Corporation requires its employees to have a high school diploma, claiming a definite connection between a high school education and job performance. In a suit against Machine Corporation under Title VII, this requirement is shown to have a discriminatory […]

Pat, a world famous musician and composer, agrees to give ten piano lessons to Quinn in exchange for $1,000. Pat’s attempt to delegate his contract to Ruth, an inexperienced pianist, will probably be a. permitted because contracts may be freely […]

Community Construction Corporation offers to buy from Solid Cement Company a certain quantity of cement for a certain price. Solid can accept the offer by a. doing nothing. b. promising to ship or promptly shipping the cement. c. promising to […]

Browse-wrap terms are arguably not enforceable. Article I, Section 8, of the U.S. Constitution permits Congress to regulate interstate commerce. Answer: T A customer who writes a bad check may be subject to criminal prosecution. Answer: T With an interest-only […]

George and James create an agency relationship to facilitate the sale of illegal narcotics. This agency relationship a. is illegal. b. is legal. c. will be recognized by some states, but not others. d. can exist, but will be subject […]

Dee, an accountant, does not work for Emergent Company, but wrongfully obtains inside information concerning Emergent. Based on the information, Dee buys and sells Emergent stock for personal gain. The Securities and Exchange Commission prosecutes Dee, arguing that she is […]

Some agreements are so blatantly and substantially anticompetitive that they are deemed illegal per se under Section 1 of the Sherman Act. Which of the following is not a per se violation? a. A price-fixing agreement b. A group boycott […]

A board of directors governs every corporation. The doctrine of sovereign immunity cannot immunize a foreign nation from the jurisdiction of U.S. courts. Answer: F The mirror image rule requires an acceptance to adhere exactly to an offer to create […]

An employer may not hire an illegal immigrant under any circumstances. A lottery is an example of an offer for a unilateral contract. Answer: T There is at least one federal district court in every state. Answer: T The Clayton […]

Ralph signs an instrument promising to pay a total of $10,000 to Martha in $1,000 monthly installments with the final payment being made on August 1. Ralph unexpectedly inherits $10,000 from his aunt on May 15. Ralph may a. not […]

Joy and Karl contract for the sale of Joy’s prize-winning show dog for $1,000. Unknown to either party, the dog has died. Karl is a. entitled to another dog of equivalent value. b. not required to pay due to the […]

Recreation & Sports Equipment Corporation sells a product that is capable of seriously injuring consumers who misuse it in a foreseeable way. Does the firm owe an ethical duty to take this product off the market? What conflicts might arise […]

Owen is a federal judge whose judicial decisions are part of case law, which does not include interpretations of a. other case law. b. constitutional provisions. c. statutes. d. sound bites in the media. Fresh Produce, Inc., and Great Grocery […]

An agency can terminate once its purpose is achieved. Joint venturers have the authority to enter into contracts that will bind the joint venture. Answer: T A divestiture is an order to a company to cease, or divest itself of, […]

Larceny relies on fear and force. Office Accounting, Inc., hires Perry to repair a computer on site for $400, but Perry does not show up as agreed. Office Accounting hires Raul to do the job for $350. Office Accounting may […]

Employers can treat their employees more or less favorably based on their religious beliefs or practices. An easement can be created by prescription. Answer: T Management’s behavior sets the ethical tone of a firm. Answer: T Gelato Cheese Company, a […]

Corner Market sells groceries. Delite Food & Drug Store sells groceries and fills prescriptions. The chief responsibility to prevent unsafe food and drugs from being sold rests with a. the Consumer Product Safety Commission. b. no single federal agency. c. […]

Securities that are exempt from the registration requirement can generally be sold and resold without being registered. Under the power of eminent domain, the government may take private property only for private use, not for public benefit. Answer: F The […]

Corporate governance can be defined as the relationship between a corporation and its directors. Any conspiracy that has a substantial effect on U.S. commerce is within the reach of the U.S. antitrust laws. Answer: T A merchant is a person […]

Elizabeth buys a car from Silas, who is sixteen years old. Elizabeth then wants to sell the car to her neighbor, John. Elizabeth’s title to the car is a. valid. b. voidable. c. void. d. good. SurgeStop Company makes electrical […]

Ralph contracts to sell his Double-R Ranch to Samantha on May 1. On April 20, Ralph tells Samantha that he will not go through with the deal. Samantha can recover a. the cost of any property that Samantha would find […]

May tries to start her new car with no success. She yells that she will sell the car to anyone for $10. Nick, a passerby who owns Nick’s Pre-owned Autos, hands May $10. This is a. a valid acceptance because […]

Delite Candy Company hires Elton to sell Delite’s products in a certain area. Delite agrees to pay Elton a salary, plus commission, for a trial period. They also agree that Elton can sell using any methods and during any hours […]

Bankruptcy proceedings are held in federal courts. A covenant not to compete is never enforceable. Answer: F Brock is a shareholder of Competent Homebuilders Corporation (CHC). For the last few years, business has not been profitable for CHC. The firm […]

In a dispute between Cosmic Games Corporation and Mythic Engineering Associates, Inc., the court applies the doctrine of stare decisis. What is this doctrine? What does this doctrine have to do with the American legal system? Plant life is not […]

Bruno is a businessperson with investments in legal and illegal operations. Bruno may be subject to penalties under RICO a. for making an unprofitable, but legal, investment. b. for the commission of any business fraud. c. only in a case […]

Divestiture of a business interest is a possible penalty under RICO. A forged signature is effective as the signature of a drawer to the extent that is resembles the drawer’s actual signature. Answer: F To rescind a contract, each party […]

The Foreign Sovereign Immunities Act spells out what a “foreign state” includes. Constructive delivery occurs when property is physically transferred. Answer: F For a creditor to have an enforceable security interest, the creditor must give something of value to the […]

Richard is an avid baseball fan and attends baseball games whenever he can. Richard considers himself an expert on all things, including risks, related to baseball. One day a ball flies into the stands, hits Richard in the head and […]

NuTown Construction, Inc., wants to build a parking ramp to connect to its NuTown Mall, both of which are on private land. For this action, an environmental impact statement is a. prohibited. b. required. c. unnecessary. d. voluntary. Megan, a […]

Little Local Bank wrongfully fails to honor a check signed by its customer Andrea. Little Local Bank is a. not liable to Andrea for damages resulting from its refusal to pay. b. only liable to Andrea for damages resulting from […]

The measure of damages for the breach of a contract for a sale of land depends on which party breaches and when. The Civil Rights Act of 1964 does not prohibit job discrimination on the basis of national origin. Answer: […]

Precise Device Corporation and Quality Instruments, Inc., decide to merge. This corporate combination does not require the approval of a. Precise and Quality’s directors. b. Precise and Quality’s officers and employees. c. Precise’s shareholders. d. Quality’s shareholders. Bean Vendors, Inc., […]

The Second Amendment to the U.S. Constitution reserves all powers not delegated to the national government to the states. Equity is a branch of law, founded in justice and fair dealing, which seeks to supply a remedy when no adequate […]

Preemption occurs when Congress chooses to act exclusively in a concurrent area and a valid federal statue or regulation takes precedence over a conflicting state or local law. Under the Statute of Frauds, oral contracts are void. Answer: F Different […]

Jackson Lumber hires Owen to purchase wood from various sources on behalf of Jackson Lumber. In this relationship, Jackson Lumber is the a. employee. b. independent contractor. c. principal. d. agent. Megan goes to visit her friend Kathleen. While visiting, […]

Mariah promises to pay her assistant Nadine $10,000 in consideration of the services she provided over the years. Mariah never pays Nadine. Mariah is a. liable for payment of the $10,000. b. liable only if Nadine still works for Mariah. […]

The rights and duties of a bank and its customer are contractual. Insurance is classified according to the amount of the payment on a claim. Answer: F The UCC imposes some different rules on merchants. Answer: T An oral contract […]