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ANSWER: l POINTS: 1 ANSWER: s POINTS: 1 ANSWER: i POINTS: 1 ANSWER: t PART I: THE LEGAL ENVIRONMENT OF BUSINESS. Match the following: a. Person who files a lawsuit in a trial court. b. Part of private law dealing […]

ANSWER: g POINTS: 1 2. breach ANSWER: e POINTS: 1 PART II: CONTRACTS. Match the following: a. A contract that binds an offeror to keep an offer open for a specified period of time. b. Improper physical or mental coercion […]

ANSWER: c POINTS: 1 ANSWER: a POINTS: 1 POINTS: 1 PART III: AGENCY. Match the following: a. A principal’s obligation to compensate an agent for loss whenever the agent makes a payment or incurs an expense while acting on behalf […]

ANSWER: a POINTS: 1 ANSWER: h POINTS: 1 3. procedural unconscionability ANSWER: g POINTS: 1 ANSWER: f POINTS: 1 PART IV: SALES. Match the following: a. A sequence of previous conduct between parties establishing a common basis for interpreting their […]

ANSWER: c POINTS: 1 ANSWER: h POINTS: 1 ANSWER: b PART V: NEGOTIABLE INSTRUMENTS. Match the following: a. The sender of a payment order. b. A specialized form of draft; an order to pay money, drawn on a bank and […]

ANSWER: k POINTS: 1 ANSWER: g ANSWER: f POINTS: 1 ANSWER: m POINTS: 1 ANSWER: j PART VI: UNINCORPORATED BUSINESS ASSOCIATIONS. Match the following: a. An association of two or more persons to carry on as co-owners a business for […]

ANSWER: u POINTS: 1 ANSWER: o POINTS: 1 PART VII: CORPORATIONS. Match the following: a. Unsecured bonds, having only the obligation of the corporation behind them. b. Corporation created under the laws of a given state. c. Corporation created under […]

POINTS: 1 ANSWER: m PART VIII: DEBTOR AND CREDITOR RELATIONS. Match the following: a. The right in personal property that insures payment or performance of an obligation. b. Making a security interest effective against third parties who assert competing interests. […]

ANSWER: i POINTS: 1 PART IX: REGULATION OF BUSINESS. Match the following: a. Conclusively presumed unreasonable and therefore illegal. b. Acquisition by one company of a competing company. c. Established environmental protection as a goal of federal policy; created the […]

40. American jurists and defined law in a functional sense as predictions of the way that a court will decide specific legal questions. a. Roscoe Pound and Alexander Hamilton b. Blackstone and Austin c. Roscoe Pound and Benjamin Cardozo d. […]

Part One: The Legal Environment of Business CONTENTS Chapter 1 Introduction to Law Chapter 2 Business Ethics and the Social Responsibility of Business Chapter 3 Civil Dispute Resolution Chapter 4 Constitutional Law Chapter 5 Administrative Law Chapter 6 Criminal Law […]

Chapter 1. Introduction to Law 1. Philosophers and jurists agree on a single definition of law: rules of civil conduct prescribed by the supreme power of a state, commanding what is right and prohibiting what is wrong. a. True b. […]

CASE 10-3 OSPREY L.L.C. v. KELLY–MOORE PAINT CO., INC. Supreme Court of Oklahoma, 1999 1999 OK 50, 984 P.2d 194 http://scholar.google.com/scholar_case?case=15066374301719252497&q=984+P.2d+194&hl=en&as_sdt=2,34 Kauger, J. [In 1977, the defendant, Kelly-Moore Paint Company, entered into a fifteen-year commercial lease with the plaintiff, Osprey, […]

ANSWERS TO PROBLEMS Ames, seeking business for his lawn maintenance firm, posted the following notice in the meeting room of the Antlers, a local lodge: “To the members of the Antlers—Special this month. I will resod your lawn for two […]

Chapter 10 MUTUAL ASSENT I. Offer 3. Rejection A. Essentials of an Offer 4. Counteroffer 1. Communication 5. Death or Incompetency 2. Intent 6. Destruction of Subject Matter a. Preliminary Negotiations 7. Subsequent Illegality b. Advertisements II. Acceptance of Offer […]

49. In general, which of the following will not terminate an offer? a. The death of the offeree b. The death of the offeror c. An inquiry by the offeree as to size or materials d. An acceptance that adds […]

Chapter 10. Mutual Assent 1. On Tuesday morning John sends a letter to Arlene rejecting her offer, but later the same day John changes his mind and sends a letter of acceptance to Arlene. The letter of acceptance will be […]

ANSWER: c POINTS: 1 ANSWER: d POINTS: 1 ANSWER: m POINTS: 1 PART X: PROPERTY. Match the following: a. Interest in land created by a written document that provides security for payment of the debt. b. An interest that is […]

Chapter 11. Conduct Invalidating Assent 1. Marjorie has been cared for by her family physician for 35 years. She decides to assume the mortgage on his new clinic. The contract is automatically invalid because of undue influence. a. True b. […]

ANSWERS TO PROBLEMS 1. Anita and Barry were negotiating, and Anita’s attorney prepared a long and carefully drawn contract, which was given to Barry for examination. Five days later and prior to its execution, Barry’s eyes became so infected that […]

*** Chapter Outcome *** Identify the types of fraud and the elements that must be shown to establish the existence of each. C. FRAUD Fraud prevents agreement from being knowingly given. There are two distinct types: fraud in the execution […]

Chapter 11 CONDUCT INVALIDATING ASSENT A. Duress 1. Physical Compulsion 2. Improper Threats B. Undue Influence C. Fraud 1. Fraud in the Execution 2. Fraud in the Inducement a. False Representation b. Fact c. Materiality d. Knowledge of Falsity and […]

45. A contract was made for 125 bales of cotton to arrive on a ship named “Peerless” from Bombay. Unbeknownst to either party to the contract, there were two ships named “Peerless,” both of which were sailing from Bombay. One […]

Chapter 12. Consideration 1. Consideration can be present regardless of whether the parties intend an exchange. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: SRBL.MANN.15. 12.01 – 12.01 NATIONAL STANDARDS: United States – AICPA: BB-Risk Analysis […]

CASE 12-3 NEW ENGLAND ROCK SERVICES, INC. v. EMPIRE PAVING, INC. Appellate Court of Connecticut, 1999 53 Conn App. 771, 731 A.2d 784 cert. denied, 250 Conn. 921, 738 A.2d 658 http://scholar.google.com/scholar_case? case=2815205762460431873&q=731+A.2d+784&hl=en&as_sdt=2,34 Schaller, J. The defendants, Empire Paving, Inc. […]

Chapter 12 CONSIDERATION A. Legal Sufficiency 1. Adequacy 2. Unilateral Contracts 3. Bilateral Contracts 4. Illusory Promises a. Output and Requirement Contracts b. Exclusive Dealing Contracts c. Conditional Promises 5. Preexisting Public Obligation 6. Preexisting Contractual Obligation a. Modification of […]

ANSWERS TO PROBLEMS 1. In consideration of $1800 paid to him by Joyce, Hill gave Joyce a written option to purchase his house for $180,000 on or before April 1. Prior to April 1, Hill verbally agreed to extend the […]

50. Marilyn contracted with Bravo Builders to build an addition to her house for $15,000. After digging the foundation, Bravo decides that it will take more work and more concrete than it had originally thought and that it will need […]

39. Before granting an injunction enjoining a former employee from competing in a described territory, the courts insist that the employer demonstrate that the restriction is: a. exculpatory. b. conscionable. c. necessary to protect the employer’s legitimate interest. d. in […]

ANSWERS TO PROBLEMS 1. Johnson and Wilson were the principal shareholders in Matthew Corporation, located in the city of Jonesville, Wisconsin. This corporation was engaged in the business of manufacturing paper novelties, which were sold over a wide area in […]

CASE 13-3 ANDERSON v. MCOSKAR ENTERPRISES, INC. Court of Appeals of Minnesota, 2006 712 N.W.2d 796 http://scholar.google.com/scholar_case?case=14986343261318628809&q=712+N.W.2d+796&hl=en&as_sdt=2,10 Shumaker, J. Respondent McOskar Enterprises, Inc. owns and operates a fitness and health club in Monticello known as “Curves for Women.” [Plaintiff/] Appellant […]

Chapter 13 ILLEGAL BARGAINS A. Violations of Statutes 1. Licensing Statutes 2. Gambling Statutes 3. Usury Statutes 4. Sunday Statutes B. Violations of Public Policy 1. Common Law Restraint of Trade a. Sale of a Business b. Employment Contracts 2. […]

Chapter 13. Illegal Bargains 1. As a general rule, illegal contracts are unenforceable and neither party can successfully sue the other for breach or recover for any performance rendered. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Easy LEARNING […]

Chapter 14. Contractual Capacity 1. Kris, age 17, who looks 18 or older, makes a contract to buy a car from Maisie, who is the age of majority. Maisie finds out Kris’s age. Maisie may avoid the contract even if […]

ANSWERS TO PROBLEMS 1. Michael, a minor, operates a one-man automobile repair shop. Anderson, having heard of Michael’s good work on other cars, takes her car to Michael’s shop for a thorough engine overhaul. Michael, while overhauling Anderson’s engine, carelessly […]

CASE 14-3 ZELNICK v. ADAMS Supreme Court of Virginia, 2002 263 Va. 601, 561 S.E.2d 711 http://scholar.google.com/scholar_case? case=13963993610436500611&q=561+S.E.2d+711+&hl=en&as_sdt=2,34 Lemons, J. In this appeal, we consider whether a contract for legal services entered into on behalf of a minor is voidable […]

Chapter 14 CONTRACTUAL CAPACITY A. Minors 1. Liability on Contracts a. Dissaffirmance b. Ratification 2. Liability for Necessaries 3. Liability for Misrepresentation of Age 4. Liability for Tort Connected with Contract B. Incompetent Persons 1. Person Under Guardianship 2. Mental […]

46. Tim, who is a minor, enters into a contract with Violet, who is an adult. Which of the following is correct? a. Violet may not disaffirm the contract. b. Violet may disaffirm the contract at any time. c. Violet […]

Chapter 15 CONTRACTS IN WRITING I. Statute of Frauds A. Contracts Within the Statute of Frauds 1. Electronic Records 2. Suretyship Provision a. Original Promise b. Main Purpose Doctrine c. Promise Made to Debtor 3. Executor-Administrator Provision 4. Marriage Provision […]

ANSWERS TO PROBLEMS 1. Rafferty was the principal shareholder in Continental Corporation, and, as a result, he received the lion’s share of Continental Corporation’s dividends. Continental Corporation was anxious to close an important deal for iron ore products to use […]

18. Presti claims that he reached an oral agreement with Wilson by telephone in October 2013 to buy a horse for $60,000. Presti asserts that he sent Wilson a bill of sale and a postdated check, which Wilson retained. Presti […]

*** Chapter Outcome *** Identify and describe the other methods of complying with the general contract and the UCC statute of frauds provisions. Sales of Goods The UCC provides that a contract for the sale of goods (movable personal property) […]

Chapter 15. Contracts in Writing 1. The parol evidence rule is an exclusionary rule of evidence. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: SRBL.MANN.15. 15.04 – 15.04 NATIONAL STANDARDS: United States – AICPA: BB-Risk Analysis […]

46. Which of the following promises does not have to be evidenced by writing in order to be enforceable? a. Jones’ agreement with Smith to sell his condominium for $100,000 b. Stewart’s promise to work for Austin for a two-year […]

Chapter 16 THIRD PARTIES TO CONTRACTS A. Assignment of Rights 1. Law Governing Assignments 2. Requirements of an Assignment a. Revocability of Assignments b. Partial Assignments 3. Rights that Are Assignable 4. Rights that Are Not Assignable a. Assignments That […]

ANSWERS TO PROBLEMS 1. On December 1, Euphonia, a famous singer, contracted with Boito to sing at Boito’s theater on December 31 for a fee of $45,000 to be paid immediately after the performance. (a) Euphonia, for value received, assigns […]

*** Chapter Outcome *** Identify those situations in which a delegation of duties is not permitted. B. DELEGATION OF DUTIES Delegable Duties Most contract duties may be delegated except when: — the nature of the duties are personal in that […]

Chapter 16. Third Parties to Contracts 1. After an assignment, only the assignee has a right to the obligor‘s performance. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: SRBL.MANN.15. 16.01 – 16.01 NATIONAL STANDARDS: United States […]

46. The voluntary transfer of a contractual right to a third party is known as a(n): a. implied warranty. b. assignment. c. delegation. d. novation. 47. A(n) obligee. is a method of discharging a contract in which a third party […]

Chapter 17 PERFORMANCE, BREACH AND DISCHARGE A. Conditions 1. Express Conditions a. Satisfaction of a Contracting Party b. Satisfaction of a Third Party 2. Implied-in-Fact Conditions 3. Implied-in-Law Conditions 4. Concurrent Conditions 5. Conditions Precedent 6. Conditions Subsequent B. Discharge […]

1. A–1 Roofing Co. entered into a written contract with Jaffe to put a new roof on the latter’s residence for $1,800, using a specified type of roofing, and to complete the job without unreasonable delay. A–1 undertook the work […]

Chapter 17. Performance, Breach, and Discharge 1. The law assumes that respective performances under a contract are concurrent conditions, unless there is an agreement to the contrary. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: SRBL.MANN.15. […]

40. A(n) is a contract between a promisee and a promisor by which the promisee agrees to accept and the promisor agrees to render a substituted performance in satisfaction of an existing contractual duty. a. accord b. mutual rescission c. […]

Chapter 18. Contract Remedies 1. An employee’s promise of providing ordinary personal services may be enforced by an injunction against serving another employer. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: SRBL.MANN.15. 18.03 – 18.03 NATIONAL […]

ANSWERS TO PROBLEMS 1. Edward, a candy manufacturer, contracted to buy 1,000 barrels of sugar from Marcia. Marcia failed to deliver and Edward was unable to buy any sugar in the market. As a direct consequence he was unable to […]

Chapter 18 CONTRACT REMEDIES A. Interests Protected by Contract Remedies B. Monetary Damages 1. Compensatory Damages a. Loss of Value b. Cost Avoided c. Incidental Damages d. Consequential Damages 2. Nominal Damages 3 Reliance Damages 4. Damages for Misrepresentation a. […]

CASE 18-3 REAL ESTATE ANALYTICS, LLC v. VALLAS Court of Appeal, Fourth District, Division 1, California, 2008 160 Cal.App.4th 463, 72 Cal.Rptr.3d 835, review denied 2008 http://scholar.google.com/scholar_case?case=16761955053572987435&q=72+cal.rptr.3d+835&hl=en&as_sdt=2,34 Haller, J. Real Estate Analytics, LLC (REA) is a limited liability company formed […]

41. The majority of states follow the rule in awarding damages for fraud. a. benefit-of-the-bargain b. out–of-pocket c. liquidated d. restitution ANSWER: a POINTS: 1 DIFFICULTY: Moderate LEARNING OBJECTIVES: SRBL.MANN.15. 18.01 – 18.01 NATIONAL STANDARDS: United States – AICPA: BB-Risk […]

Chapter 19. Relationship of Principal and Agent 1. An agent, acting within the scope of authority granted by the principal, may bind the principal to contracts, but may not negotiate terms of the contracts. a. True b. False ANSWER: False […]

*** Chapter Outcome *** List and explain the duties owed by an agent to her principal. C. DUTIES OF AGENT TO PRINCIPAL The duties are usually defined in the contract. Other duties are imposed by law, unless the parties agree […]

ANSWERS TO PROBLEMS 1. Parker, the owner of certain unimproved real estate in Chicago, employed Adams, a real estate agent, to sell the property for a price of $250,000 or more and agreed to pay Adams a commission of 6 […]

Part Three: Agency CONTENTS Chapter 19………………………………………………………………….……………..Relationship of Principal and Agent Chapter 20………………………………………………………………………………………..Relationship with Third Parties ETHICS QUESTIONS RAISED IN THIS PART 1. Under what circumstances should a principal (employer) be responsible for the torts committed by an agent (employee)? If […]

43. The duty of requires the agent to act in the principal’s affairs only as authorized by the principal and to obey all reasonable instructions and directions given by the principal. a. accounting b. obedience c. fiduciary d. diligence ANSWER: […]

Chapter 2. Business Ethics and the Social Responsibility of Business 1. Ethics can be broadly defined as the study of what is good or right for human beings. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: […]

ANSWERS TO PROBLEMS 1. You have an employee who has a chemical imbalance in the brain that causes him to be severely unstable. The medication that is available to deal with this schizophrenic condition is extremely powerful and decreases the […]

Chapter 2 BUSINESS ETHICS AND THE SOCIAL RESPONSIBILITY OF BUSINESS A. Law versus Ethics D. Ethical Responsibilities of Business B. Ethical Theories 1. Regulation of Business 1. Ethical Fundamentalism 2. Corporate Governance 2. Ethical Relativism 3. Arguments against Social Responsibility […]

CASE Oliver Winery, Inc. BACKGROUND Paul Oliver, Sr., immigrated to the United States in 1930 from Greece. After working for several wineries, he started Oliver Winery, Inc., which eventually found a market niche in nonvarietal jug wines. Through mass-marketing techniques, […]

CASE Vulcan, Inc. THE COMPANY Vulcan, Inc. is a multinational Fortune 200 company engaging principally in the exploration for and extraction of minerals. It is listed on the New York Stock Exchange and has more than 615 million shares outstanding. […]

40. In 2002, Congress passed what legislation seeking to prevent business scandals by increasing corporate responsibility through imposing additional corporate governance requirements on publicly held corporations? a. The Securities and Exchange Act b. The Sarbanes-Oxley Act c. The Kohlberg Act […]

47. Authority that is not found in the express or explicit words of the principal, but that is inferred from the words is known as: a. apparent authority. b. indirect authority. c. delegated authority. d. None of these. 48. Which […]

ANSWERS TO PROBLEMS 1. Alice was Peter’s traveling salesperson and was authorized to collect accounts. Before the agreed termination of the agency, Peter wrongfully discharged Alice. Peter did not notify anyone of Alice’s termination. Alice then called on Tom, an […]

CASE 20-3 CONNES v. MOLALLA TRANSPORT SYSTEM, INC. Supreme Court of Colorado, 1992 831 P.2d 1316 http://scholar.google.com/scholar_case?case=2485973325983137183&q=831+P.2d+1316&hl=en&as_sclt=2,34 Quinn, J. [Terry Taylor was an employee of Molalla Transport. In hiring Taylor, Molalla followed its standard hiring procedure, which includes a personal […]

Chapter 20 RELATIONSHIP WITH THIRD PARTIES I. Relationship of Principal and Third Persons A. Contract Liability of the Principal 1. Types of Authority a. Actual Express Authority b. Actual Implied Authority c. Apparent Authority 2. Delegation of Authority 3. Effect […]

Chapter 20. Relationship with Third Parties 1. Roy is the promoter of a new corporation that has not yet been organized. On behalf of the as–yet unincorporated business, he enters into a three-year lease agreement for office space and personally […]

ANSWERS TO PROBLEMS 1. Adams orders one thousand widgets at $5 per widget from International Widget to be delivered within sixty days. After the contract is consummated and signed, Adams requests that International deliver the widgets within thirty days rather […]

Part Four: Sales CONTENTS Chapter 21 Introduction to Sales and Leases Chapter 22 Performance Chapter 23 Transfer of Title and Risk of Loss Chapter 24 Products Liability: Warranties and Strict Liability in Tort Chapter 25 Sales Remedies ETHICS QUESTIONS RAISED […]

II. FORMATION OF SALES & LEASE CONTRACTS The Code will strive to recognize a contract if the intent of the parties is consistent with such a conclusion. *** Chapter Outcome *** Compare and contrast the manifestation of mutual assent under […]

Chapter 21. Introduction to Sales and Leases 1. Until the early 1900s, sales transactions were completely governed by general contract law, but now sales of tangible personal property are predominantly governed by statute. a. True b. False ANSWER: True POINTS: […]

37. Richard owns and operates a small business at an outdoor market where he sells fruits and vegetables. What does the UCC specifically require of Richard with respect to his customers? a. Observance of reasonable commercial standards of fair dealing […]

39. A buyer in Atlanta enters into a sales contract with a seller in Chicago. If the contract does not mention the place for delivery of the goods, the place of delivery will be: a. at the seller‘s business or […]

Chapter 22. Performance 1. A merchant buyer of goods receives nonconforming goods. The merchant buyer rightfully rejects and appropriately notifies the seller, but the seller has no agent in the buyer’s city. The goods are perishable and threaten to decline […]

*** Chapter Outcome *** Explain what constitutes acceptance by the buyer and the buyer’s right to revoke acceptance. Acceptance Acceptance of goods means a willingness by the buyer to become the owner of the goods tendered or delivered to him […]

ANSWERS TO PROBLEMS 1. Tammie contracted with Kristine to manufacture, sell, and deliver to Kristine and put in running order a certain machine. After Tammie set up the machine and put it in running order, Kristine found it unsatisfactory and […]

Chapter 22 PERFORMANCE A. Performance by the Seller 1. Time and Manner of Tender 2. Place of Tender a. Shipment Contracts b. Destination Contracts c. Goods Held by Bailee 3. Perfect Tender Rule a. Agreement by the Parties b. Cure […]

B. RISK OF LOSS Losses are borne by either the seller, the buyer or both when goods have been damaged, destroyed, or lost without the fault of either the seller or the buyer. If the loss is placed on the […]

ANSWERS TO PROBLEMS 1 Stein, a mechanic, and Beal, a life insurance agent, entered into a written contract for the sale of Stein’s tractor to Beal for $6,800 cash. It was agreed that Stein would tune the motor on the […]

Chapter 23 TRANSFER OF TITLE AND RISK OF LOSS A. Transfer of Title 1. Identification a. Insurable Interest b. Security Interest 2. Passage of Title a. Physical Movement of the Goods b. No Movement of the Goods 3. Power to […]

Chapter 23. Transfer of Title and Risk of Loss 1. Title to existing, identified goods can pass whenever the parties agree it will pass. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: SRBL.MANN.15. 23.03 – 23.03 […]

42. Although he knows the ring is really valuable, Alex tells Mona her ring contains artificial gems, but he would be willing to buy it for $50. Mona agrees. Alex quickly takes the ring to Hanna’s Antique Jewelry Shop and […]

17. Mrs. Embs went into Stamper’s Cash Market to buy soft drinks for her children. She had removed five bottles from an upright soft drink cooler, placed them in a carton, and turned to move away from the display when […]

ANSWERS TO PROBLEMS 1. At the start of the social season, Aunt Lavinia purchased a hula skirt in Sadie’s dress shop. The salesperson told her, “This superior garment will do things for a person.” Aunt Lavinia’s houseguest, her niece, Florabelle, […]

II. STRICT LIABILITY IN TORT Section 402A of the Restatement, Second, of Torts imposes strict liability in tort on merchant sellers for both personal injuries and property damage that result from selling a product in a defective condition, which makes […]

Chapter 24 PRODUCTS LIABILITY: WARRANTIES AND STRICT LIABILITY IN TORT I. Warranties A. Types of Warranties 1. Warranty of Title 2. Express Warranties a. Creation b. Basis of Bargain 3. Implied Warranties a. Merchantability b. Fitness for Particular Purpose B. […]

Chapter 24. Products Liability: Warranties and Strict Liability in Tort 1. The U.S. Consumer Product Safety Commission’s estimate that the cost of deaths, injury, and property damage from consumer product incidents is about $800 million each year led Congress to […]

36. Which of the following would most likely be a defect under 402A of the Restatement of Torts? a. A chair produced without inserting the appropriate screws b. A product with a defective design that is “state of the art” […]

ANSWERS TO QUESTIONS 1. Mae contracted to sell one thousand bushels of wheat to Lloyd at $5.00 per bushel. Just before Mae was to deliver the wheat, Lloyd notified her that he would not receive or accept the wheat. Mae […]

CASE 25-3 MIDWEST HATCHERY v. DOORENBOS POULTRY Court of Appeals of Iowa, 2010 783 N.W.2D 56 http://scholar.google.com/scholar_case? q=783+N.W.2d+56&hl=en&as_sdt=2,34&case=17039907567362199216&scilh=0 Zimmer, S.J. Doorenbos Poultry, Inc., is a company that keeps chickens for egg production, and sells the eggs. The company conducts its […]

Chapter 25 SALES REMEDIES A. Remedies of the Seller 1. To Withhold Delivery of the Goods 2. To Stop Delivery of the Goods 3. To Identify Goods to the Contract 4. To Resell the Goods and Recover Damages 5. To […]

14. Through information provided by S-2 Yachts, Inc., the plaintiff, Barr, located a yacht to his liking at the Crow’s Nest marina and yacht sales company. When Barr asked the price, he was told that, although the yacht normally sold […]

Chapter 25. Sales Remedies 1. The Code’s remedies are cumulative; therefore, a seller may both withhold delivery of the goods and identify goods to the contract. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: SRBL.MANN.15. 25.01 […]

42. Which of the following is correct with respect to consequential damages under the Code? a. Consequential damages include damages for destruction of a warehouse caused by the explosion of nonconforming goods. b. Consequential damages include damages for lost profits […]

ANSWERS TO PROBLEMS 1. State whether the following provisions impair or preclude negotiability, the instrument in each instance being otherwise in proper form. Answer each statement with either “Negotiable” or “Nonnegotiable” and explain why. a. A note for $2,000 payable […]

Part Five: Negotiable Instruments CONTENTS Chapter 26 Form and Content Chapter 27 Transfer and Holder in Due Course Chapter 28 Liability of Parties Chapter 29 Bank Deposits, Collections, and Funds Transfers ETHICS QUESTIONS RAISED IN THIS PART 1. Should a […]

40. Which of the following is not a reason for the use of negotiable instruments? a. Reduction of the chance of forgery or material alteration b. Convenience c. Elimination of the risk of loss or theft of cash d. Reduction […]

Chapter 26. Form and Content 1. A substitute check created under Check 21 is the legal equivalent of the original check and contains all the information contained on the original check. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: […]

Chapter 27 TRANSFER AND HOLDER IN DUE COURSE I. Transfer A. Negotiation 1. Negotiation of Bearer Paper 2. Negotiation of Order Paper a. The Impostor Rule b. The Fictitious Payee Rule 3. Negotiations Subject to Rescission B. Indorsements 1. Blank […]

ANSWERS TO PROBLEMS 1. Roy Rand executed and delivered the following note to Sue Sims: “Chicago, Illinois, June 1, 2014; I promise to pay to Sue Sims or bearer, on or before July 1, 2014, the sum of $7,000. This […]

15. Donna gives Peter a check for $3,000 in return for a desktop computer. The check is dated December 2. Peter transfers the check for value to Howard on December 14, and Howard deposits it in his bank on December […]

CASE 27-4 ANY KIND CHECKS CASHED, INC. v. TALCOTT Court of Appeal of Florida, Fourth District, 2002 830 So.2d 160, 48 U.C.C. Rep.Serv.2d 800, rehearing denied http://scholar.google.com/scholar_case? case=12205265320792531036&q=830+So.2d+160&hl=en&as_sdt=2,10 Gross, J. [In the mid-1990s, D. J. Rivera, a “financial advisor,” sold […]

57. A(n) indorsement is an indorsement made by a person that is not the holder of the instrument. The effect of this indorsement is to make the signer liable on the instrument as an indorser. a. anomalous b. blank c. […]

Chapter 27. Transfer and Holder in Due Course 1. Under the shelter rule, the transferee gets the rights of the transferor who is a holder in due course even if the transfer is not for value. a. True b. False […]

Chapter 28 LIABILITY OF PARTIES I. Contractual Liability A. Signature 1. Authorized Signatures 2. Unauthorized Signatures a a. Ratification of Unauthorized Signature b. Negligence Contributing to Forged Signature B. Liability of Primary Parties 1. Makers 2. Acceptors C. Liability of […]

ANSWERS TO PROBLEMS 1. $900.00 Smalltown, Illinois November 15, 2014 The undersigned promises to pay to the order of John Doe, Nine Hundred Dollars with interest from date of note. Payment to be made in five monthly installments of One […]

CASE 28-3 DAVIS v. WATSON BROTHERS PLUMBING, INC. Court of Civil Appeals of Texas, Dallas, 1981 615 S. W.2d 844 http://scholar.google.com/scholar_case?case=16807682647541897506&hl=en&as_sdt=2&as_vis=1&oi=scholarr Akin, J. Defendant was the drawer of a check for $152.38 payable to its employee Arnett Lee. Lee, in […]

43. Jan Arthur writes a $200 check to Bruce Nole who indorses it “Bruce Nole.” Bruce gives the check to Anne Tate who indorses it “Without Recourse. Anne Tate.” Anne sends the check to Joe Black, MD to pay her […]

Chapter 28. Liability of Parties 1. Warranty liability may be imposed on both nonsigners and signers of an instrument. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: SRBL.MANN.15. 28.01 – 28.01 NATIONAL STANDARDS: United States – […]

40. ABC Bank sent Joanne, a depositor, her January statement on January 31. Within what length of time after this date will Joanne have to examine the statement and enclosed items and notify ABC bank of any errors? a. 10 […]

ANSWERS TO PROBLEMS 1. On November 9, Jane Jones writes a check for $5,000 payable to Ralph Rodgers in payment for goods to be received later in the month. Before the close of business on November 9, Jane notifies the […]

Chapter 29 BANK DEPOSITS, COLLECTIONS, AND FUNDS TRANSFERS I. Bank Deposits and Collections A. Collection of Items 1. Collecting Banks a. Duty of Care b. Duty to Act Timely c. Indorsements d. Warranties e. Final Payment 2. Payor Banks B. […]

CASE 29-3 Seigel v. Merrill Lynch, Pierce, Fenner & Smith, Inc. Steadman J. * * * The events giving rise to this lawsuit arose in January and February of 1997 * * * . During that time period, plainti /appellant […]

Chapter 29. Bank Deposits, Collections, and Funds Transfers 1. If a depositor in First Bank takes a check written on Valley Bank to First Bank to deposit, it will normally be credited to the depositor’s account at the time of […]

49. A traffic offense, such as a speeding ticket, would be heard by a: a. U.S. District Court. b. state inferior trial court. c. state probate court. d. U.S. Court of Federal Claims. ANSWER: b POINTS: 1 DIFFICULTY: Easy LEARNING […]

Chapter 3. Civil Dispute Resolution 1. A U.S. Court of Appeals is the final step in the appeal process within the federal court system. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: SRBL.MANN.15.03.01 – 03.01 NATIONAL […]

Chapter 3 CIVIL DISPUTE RESOLUTION I. The Court System III. Civil Dispute Resolution A. The Federal Courts A. Civil Procedure 1. District Courts 1. The Pleadings 2. Courts of Appeals a. Complaint and Summons 3. The Supreme Court b. Responses […]

III. CIVIL DISPUTE RESOLUTION The most prominent mechanism to settle disputes is judicial resolution, governed by certain rules. Civil disputes are governed by the rules of civil procedure, which we will discuss in the first part of this section. Criminal […]

ANSWERS TO PROBLEMS 1. On June 15, a newspaper columnist predicted that the coast of State X would be flooded on the following September 1. Relying on this pronouncement, Gullible quit his job and sold his property at a loss […]

Chapter 30. Formation and Internal Relations of General Partnerships 1. A corporation may not be a partner in a partnership. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: SRBL.MANN.15. 30.02 – 30.02 NATIONAL STANDARDS: United States […]

I. RELATIONSHIPS AMONG PARTNERS The operation and management of a partnership involves interactions among the partners as well as their interactions with third persons. This chapter will consider both of these relationships. The first part of the chapter focuses on […]

Part Six: Unincorporated Business Associations CONTENTS Chapter 30 Formation and Internal Relations of General Partnerships Chapter 31 Operation and Dissolution of General Partnerships Chapter 32 Limited Partnerships and Limited Liability Companies ETHICS QUESTIONS RAISED IN THIS PART 1. From an […]

ANSWERS TO PROBLEMS 1. Lynn and Jack jointly own shares of stock of a corporation, have a joint bank account, and have purchased and own as tenants in common a piece of real estate. They share equally the dividends paid […]

CASE 30-1 IN RE KEYTRONICS Supreme Court of Nebraska, 2008 274 Neb. 936, 744 N.W.2d 425 http://scholar.google.com/scholar_case?case=18315123236442947796&q=744+N.W.2d+425&hl=en&as_sdt=2,34 McCormack, J. [In 1999 King was doing business under the name of “Washco” as a sole proprietorship engaged in selling, installing, and servicing […]

42. A partner. is an unincorporated business association consisting of at least one general partner and at least one limited a. joint venture b. limited liability company c. limited liability partnership d. limited partnership ANSWER: d POINTS: 1 DIFFICULTY: Moderate […]

ANSWERS TO PROBLEMS 1. Albert, Betty, and Carol own and operate the Roy Lumber Company. Each contributed one-third of the capital, and they share equally in the profits and losses. Their partnership agreement provides that two partners must authorize all […]

Chapter 31 OPERATION AND DISSOLUTION OF GENERAL PARTNERSHIPS I. Relationship of Partners and Partners with Third Parties A. Contracts of Partnership 1. Authority to Bind Partnership a. Actual Express Authority b. Actual Implied Authority c. Apparent Authority 2. Partnership by […]

13. Ames, Bell, and Cole were equal partners in the ABC Construction Company. Their written partnership agreement provided that the partnership would dissolve upon the death of any partner. Cole died on June 30, and his widow, Cora Cole, qualified […]

CASE 31-3 HORIZON/CMS HEALTHCARE CORPORATION v. SOUTHERN OAKS HEALTH CARE, INC. Court of Appeal of Florida, Fifth District, 1999 732 So.2d 1156, petition for review denied, 744 So.2d 454 http://scholar.google.com/scholar_case?case=12151982165035491195&q=732+So. +2d+1156&hl=en&as_sdt=2,34 Goshorn, J. [Horizon is a large, publicly traded provider […]

*** Chapter Outcome *** Distinguish between the liability of an incoming partner for debts arising before his or her admission and those arising after admission. D. LIABILITY OF INCOMING PARTNER A person admitted as a partner into an existing partnership […]

39. Under the UPA, dissolution by operation of law occurs: a. if a partner has been adjudicated mentally incompetent. b. upon the bankruptcy of a partner. c. when a partner has engaged in conduct prejudicial to the business. d. when […]

Chapter 31. Operation and Dissolution of General Partnerships 1. The law of partnership differs greatly from the law of agency. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: SRBL.MANN.15. 31.01 – 31.01 NATIONAL STANDARDS: United States […]

Chapter 32. Limited Partnerships and Limited Liability Companies 1. Creation of a limited partnership does not require more formalities than formation of a general partnership. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: SRBL.MANN.15. 32.01 – […]

ANSWERS TO PROBLEMS 1. John Palmer and Henry Morrison formed the limited partnership of Palmer & Morrison for the management of the Huntington Hotel. The limited partnership agreement provided that Palmer would contribute $400,000 and be a general partner and […]

Chapter 32 LIMITED PARTNERSHIPS & LIMITED LIABILITY COMPANIES A. Limited Partnerships 1. Definition 2. Formation a. Filing of Certificate b. Name c. Contributions d. Defective Formation e. Foreign Limited Partnerships 3. Rights a. Control e. Voting Rights b. Choice of […]

CASE 32-4 ESTATE OF COUNTRYMAN v. FARMERS COOP. ASS’N Supreme Court of Iowa, 2004 679 N.W.2d 598 http://scholar.google.com/scholar_case?q=679+n.w.2d+598&hl=en&as_sdt=2,34&case=12820500586608385138&scilh=0 Cady, J. In the afternoon of September 6, 1999, an explosion leveled the home of Jerry Usovsky (Usovsky) in Richland, Iowa. Tragically, […]

43. A partnership interest: a. is personal property that may be assigned without dissolving the limited partnership. b. may be assigned to a person who then becomes a partner. c. may not be assigned without dissolving the limited partnership. d. […]

Chapter 33. Nature, Formation, and Powers 1. A corporation has perpetual existence unless otherwise stated in its articles of incorporation. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: SRBL.MANN.15. 33.02 – 33.02 NATIONAL STANDARDS: United States […]

ANSWERS TO PROBLEMS 1. After part of the shares of a proposed corporation had been successfully subscribed, the promoter hired a carpenter to repair a building that was intended to be conveyed to the proposed corporation. The promoter subsequently secured […]

III. RECOGNITION OR DISREGARD OF CORPORATENESS Errors or omissions in incorporation procedures may or may not cause the courts to regard an organization as a non-corporation. Conversely, even a properly formed corporation may be regarded as a non-corporation if justice […]

Part Seven: Corporations CONTENTS Chapter 33 Nature, Formation, and Powers Chapter 34 Financial Structure Chapter 35 Management Structure Chapter 36 Fundamental Changes ETHICS QUESTIONS RAISED IN THIS PART 1. Corporations owe their existence to the issuance of a charter by […]

46. Under the RMBCA, the articles of incorporation must include all EXCEPT which one of the following? a. The number of authorized shares b. The name of the registered agent c. The names of the initial shareholders d. The address […]

ANSWERS TO PROBLEMS 1. Olympic National Agencies was organized with an authorized capitalization of preferred stock and common stock. The articles of incorporation provided for a 7 percent annual dividend for the preferred stock. The articles further stated that the […]

III. DIVIDENDS AND OTHER DISTRIBUTIONS A. TYPES OF DIVIDENDS & OTHER DISTRIBUTIONS The Revised Act definition of a “distribution”: “a direct or indirect transfer of money or other property (except its own shares) or incurrence of indebtedness, by a corporation […]

Chapter 34 FINANCIAL STRUCTURE I. Debt Securities A. Authority to Issue Debt Securities B. Types of Debt Securities 1. Unsecured Bonds 2. Secured Bonds 3. Income Bonds 4. Convertible Bonds 5. Callable Bonds II. Equity Securities A. Issuance of Shares […]

43. Which of the following is incorrect with regard to treasury shares? a. No dividends may be paid on treasury shares. b. They are issued but not outstanding. c. A corporation may sell treasury shares for any amount the board […]

Chapter 34. Financial Structure 1. Warrick makes a $10,000 investment in a debenture issued by F & M Company. Warrick is now a secured creditor of F & M Company. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Moderate […]

Chapter 35. Management Structure 1. Directors have the power to bind the corporation when acting individually rather than as a board. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: SRBL.MANN.15.35.03 – 35.03 NATIONAL STANDARDS: United States […]

Chapter 35 MANAGEMENT STRUCTURE I. Corporate Governance II. Role of Shareholders A. Voting Rights of Shareholders 1. Shareholder Meetings 2. Quorum and Voting 3. Election of Directors a. Straight Voting b. Cumulative Voting 4. Removal of Directors 5. Approval of […]

ANSWERS TO PROBLEMS 1. Brown, the president and director of a corporation engaged in owning and operating a chain of motels, was advised, on what seemed to be good authority, that a superhighway was to be constructed through the town […]

CASE 35-4 BREHM v. EISNER Supreme Court of Delaware, 2000 746 A.2d 244 http://scholar.google.com/scholar_case? q=746+A.2D+244+&hl=en&as_sdt=2,34&case=2721397479365362562&scilh=0 Veasey, C. J. [On October 1, 1995, Disney hired as its president Michael S. Ovitz, who was a long-time friend of Disney Chairman and CEO […]

III. ROLE OF DIRECTORS AND OFFICERS By statute, management of a corporation is vested in the board of directors. The board determines general corporate policy and appoints offcers to execute the policy and administer the day-to-day operations of the corporation. […]

55. Officers and directors of a corporation owe to the corporation the subordination of their self-interest to the interest of the corporation and owe constant loyalty to the corporation. This duty is the: a. fiduciary duty. b. business judgment duty. […]

42. The Revised Act grants dissenters’ rights to: a. a shareholder when any amendment to the articles of incorporation materially and adversely affects that dissenter’s rights regarding his shares. b. dissenting shareholders of a corporation leasing substantially all of its […]

Chapter 36 FUNDAMENTAL CHANGES A. Charter Amendments 1. Approval by Directors and Shareholders 2. Approval by Directors B. Combinations 1. Purchase or Lease of All or Substantially All of the Assets a. Regular Course of Business b. Other Than In […]

CASE 36-2 SHAWNEE TELECOM RESOURCES, INC. v. BROWN Supreme Court of Kentucky, 2011 354 S.W.3D 542 http://scholar.google.com/scholar_case? q=354+S.W.3D+542&hl=en&as_sdt=2,34&case=295706676174884700&scilh=0 Abramson, J. [In December 2003, Shawnee Technology, Inc. (Shawnee Tech), a Kentucky corporation, merged into Appellant Shawnee Telecom Resources, Inc. (Shawnee Tel), […]

ANSWERS TO PROBLEMS 1. The stock in Hotel Management, Inc., a hotel management corporation, was divided equally between two families. For several years the two families had been unable to agree on or cooperate in the management of the corporation. […]

Chapter 36. Fundamental Changes 1. Shareholder approval of a fundamental change in a corporation would normally need to be unanimous. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: SRBL.MANN.15. 36.01 – 36.01 NATIONAL STANDARDS: United States […]

52. Jill owns and operates a donut shop. Under the Code, the flour, sugar, and other goods used by Jill to make donuts are classified as: a. farm products. b. fixtures. c. consumer goods. d. inventory. ANSWER: d POINTS: 1 […]

CASE 37-2 KIMBRELL’S OF SANFORD, INC. v. KPS, INC. Court of Appeals of North Carolina, 1994 113 N.C.App 830,440 S.E.2d 329 http://scholar.google.com/scholar_case?case=59507666894516031 62&hl=en&as_sdt=2&as_vis=1 i=scholarr McCrodden, J. This action arises out of plaintiff’s attempt to recover from defendant KPS, Inc. a […]

ANSWERS TO PROBLEMS 1. Victor sells to Bonnie a refrigerator for $600 payable in monthly installments of $30 for twenty months. Bonnie signs a security agreement granting Victor a security interest in the refrigerator. The refrigerator is installed in the […]

Part Eight: Debtor and Creditor Relations CONTENTS Chapter 37 Secured Transactions and Suretyship Chapter 38 Bankruptcy ETHICS QUESTIONS RAISED IN THIS PART 1. Is it ethical for a business to refuse to deal with a customer if the customer has […]

Chapter 37. Secured Transactions and Suretyship 1. UCC Article 9 applies to secured transactions in which the debtor provides a security interest to secure payment of a debt, such as pledging warehoused goods to a creditor or the creditor’s having […]

54. Edith files a Chapter 7 petition in bankruptcy. She owns the following property: (1) an automobile valued at $1,000; (2) a homestead valued at $75,000, on which First Bank holds a mortgage of $50,000; (3) personal jewelry valued at […]

Chapter 38. Bankruptcy 1. Federal district courts may hear all matters collateral to the bankruptcy, even if these matters are not normally permitted to be brought in federal court. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Easy LEARNING […]

Chapter 38 BANKRUPTCY I. Federal Bankruptcy Law A. Case Administration-Chapter 3 1. Commencement of the Case a. Voluntary Petitions b. Involuntary Petitions 2. Dismissal 3. Automatic Stays 4. Trustees 5. Meetings of Creditors B. Creditors, the Debtor, and the Estate-Chapter […]

CASE 38-2 RADLAX GATEWAY HOTEL, LLC v. AMALGAMATED BANK Supreme Court of the United States, 2012 566 U.S. ____, 132 S.CT. 2065, 182 L. Ed. 2d 967 http://scholar.google.com/scholar_case?q=132+S.CT. +2065+&hl=en&as_sdt=2,34&case=15917701183349776872&scilh=0 Scalia, J. [In 2007, RadLAX Gateway Hotel, LLC and RadLAX Gateway […]

ANSWERS TO PROBLEMS 1. (a) Benson goes into bankruptcy. His estate is not sufficient to pay all taxes owed. Explain whether Benson’s taxes are discharged by the proceedings. (b) Benson obtained property from Anderson on credit by representing that he […]

Chapter 39. Protection of Intellectual Property 1. The Family Entertainment and Copyright Act of 2005 established criminal penalties for willful copyright infringement of musical works or motion pictures, but does allow for the sale and use of technology that can […]

CASE 39-3 SUPAP KIRTSAENG v. JOHN WILEY & SONS, INC. Supreme Court of the United States, 2013 568 U.S. ____, 133 S.Ct. 1351, 185 L.Ed.2d 392 http://scholar.google.com/scholar_case?case=15712401143530412161&q=133+S.Ct.+1351&hl=en&as_sdt=2,34 Breyer, J. [The business of respondent, John Wiley & Sons, Inc., includes publishing […]

ANSWERS TO PROBLEMS 1. Keller, a professor of legal studies at Rhodes University, is a diligent instructor. Late one night, while reading a newly published, copyrighted treatise of 1,800 pages written by Gilbert, he came across a three-page section discussing […]

Part Nine: Regulation of Business CONTENTS Chapter 39 Protection of Intellectual Property Chapter 40 Antitrust Chapter 41 Consumer Protection Chapter 42 Employment Law Chapter 43 Securities Regulation Chapter 44 Accountants’ Legal Liability Chapter 45 Environmental Law Chapter 46 International Business […]

45. An artist would like to protect one of his original oil paintings from being sold as original prints. He may protect his painting by applying for a: a. copyright. b. patent. c. trademark registration. d. service mark registration. ANSWER: […]

CASE 4-3 DEPARTMENT OF REVENUE OF KENTUCKY v. DAVIS, ET AL. United States Supreme Court, 2008 553 U.S. 328, 128 S.Ct. 1801, 170 L.Ed.2d 685 http://scholar.google.com/scholar_case?q=128+S.Ct. +1801&hl=en&as_sdt=2,34&case=15768194217522904809&scilh=0 Souter, J. Like most other States, the Commonwealth of Kentucky taxes its residents’ […]

Chapter 4 CONSTITUTIONAL LAW A. Basic Principles of Constitutional Law C. Limitations On Government 1. Federalism 1. Contract Clause 2. Federal Supremacy and Preemption 2. First Amendment 3. Judicial Review a. Corporate Political Speech 4. Separation of Powers b. Commercial […]

ANSWERS TO PROBLEMS 1. In May, Patricia Allen left her car on the shoulder of a road in the city of Erehwon after the car stopped running. A member of the Erehwon police dept. came upon the car later that […]

Chapter 4. Constitutional Law 1. The Bill of Rights was included in the original U.S. Constitution. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: SRBL.MANN.15.04.01 – 4.01 NATIONAL STANDARDS: United States – AICPA: BB-Risk Analysis STATE […]

51. Which of the following is correct with regard to the powers of government in the United States? a. The federal government is a government of enumerated powers. b. The federal government is all-powerful except in cases of state criminal […]

CASE 40-3 EASTMAN KODAK CO. v. IMAGE TECHNICAL SERVICES, INC. Supreme Court of the United States, 1992 504 U.S. 451, 112 S.Ct. 2072, 119 L.Ed.2d 265 http://scholar.google.com/scholar_case? case=6652719385155799724&q=504+U.S.+451&hl=en&as_sdt=2,22 Blackmun, J. * * * Kodak manufactures and sells complex business machines—as […]

ANSWERS TO PROBLEMS 1. Discuss the validity and effect of each of the following: (a) A, B, and C, manufacturers of radios, orally agree that due to the disastrous, cutthroat competition in the market, they will establish a reasonable price […]

Chapter 40 ANTITRUST A. Sherman Act 1. Restraint of Trade a. Standards b. Horizontal and Vertical Restraints c. Concerted Action d. Price Fixing e. Market Allocations f. Boycotts g. Tying Arrangements 2. Monopolies a. Monopolization b. Attempts to Monopolize c. […]

48. Which of the following remedies are available under the Sherman Act? a. Injunctive b. Damages of four times the amount of actual loss sustained c. Consequential damages d. All of these ANSWER: a POINTS: 1 DIFFICULTY: Moderate LEARNING OBJECTIVES: […]

Chapter 40. Antitrust 1. The main goal of antitrust regulation is to prevent competitive behavior among firms. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: SRBL.MANN.15.40.03 – 40.03 NATIONAL STANDARDS: United States – AICPA: BB-Risk Analysis […]

Chapter 41. Consumer Protection 1. A consumer transaction would include one in which the purchaser uses the item at a hotel while on vacation. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: SRBL.MANN.15. 41.02 – 41.02 […]

CASE 41-2 HOUSEHOLD CREDIT SERVICES, INC. v. PFENNIG Supreme Court of the United States, 2004 541 U.S. 232, 124 S. Ct. 1741,158 L.Ed.2d 450 http://scholar.google.com/scholar_case?case=6616956060046722608&q=541+U.S.+232&hl=en&as_sdt=2,10 Thomas, J. [Sharon Pfennig, holds a credit card initially issued by Household Credit Services, Inc. […]

ANSWERS TO PROBLEMS 1. The Federal Trade Commission (FTC) brings a deceptive trade practice action against Beneficial Finance Company based on Beneficial’s use of its “instant tax refund” slogan. The FTC argues that Beneficial’s advertising a tax refund loan or […]

Chapter 41 CONSUMER PROTECTION A. State and Federal Consumer Protection Agencies 1. State and Local Consumer Protection Agencies 2. The Federal Trade Commission a. Standards b. Remedies 3. The Consumer Product Safety Commission 4. Consumer Financial Protection Bureau 5. Other […]

46. The Consumer Product Safety Commission: a. only has the authority to educate the public concerning product safety problems. b. uses data it gathers to set uniform product safety standards for goods such as toys and lawn mowers. c. can […]

17. At Whirlpool’s manufacturing plant in Ohio, overhead conveyors transported household appliance components throughout the plant. A wire mesh screen was positioned below the conveyors in order to catch falling components and debris. Maintenance employees frequently had to stand on […]

CASE 42-5 TOYOTA MOTOR MANUFACTURING, KENTUCKY, INC. v. WILLIAMS Supreme Court of the United States, 2002 534 U.S. 184, 122 S.Ct. 681, 151 L.Ed.2d 615 http://scholar.google.com/scholar_case?case=3382304874478067867&q=534+U.S. +184&hl=en&as_sdt=2,34 O’Connor, J. Under the Americans with Disabilities Act of 1990 (ADA or Act), […]

ANSWERS TO PROBLEMS 1. Gooddecade manufactures and sells automobile parts throughout the eastern part of the United States. Among its full-time employees are 220 fourteen- and fifteen-year-olds. These teenagers are employed throughout the company and are paid at an hourly […]

Chapter 42 EMPLOYMENT LAW A. Labor Law 1. Norris-La Guardia Act 2. National Labor Relations Act 3. Labor-Management Relations Act 4. Labor-Management Reporting and Disclosure Act B. Employment Discrimination Law 1. Equal Pay Act 2. Civil Rights Act of 1964 […]

CASE 42-3 RICCI v. DESTEFANO Supreme Court of the United States, 2009 567 U.S. 557, 129 S. Ct. 2658, 174 L.Ed.2d 490 http://scholar.google.com/scholar_case?case=8509283780298736470&q=557+U.S.+.557&hl=en&as_sdt=2,34 Kennedy. J. In 2003, 118 New Haven firefighters took examinations to qualify for promotion to the rank […]

Chapter 42. Employment Law 1. The Norris-La Guardia Act gave federal courts the power to issue injunctions in nonviolent labor disputes. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: SRBL.MANN.15. 42.01 – 42.01 NATIONAL STANDARDS: United […]

52. A “closed shop” is: a. the same as a “runaway” shop. b. one in which a union once existed but has since been voted out. c. one in which a union is barred. d. outlawed by the Taft-Hartley Act. […]

49. Types of securities that are exempt from registration under the federal securities laws include: a. securities of domestic banks. b. securities of a charitable organization. c. bonds issued by a city. d. All of these are exempt. 50. Which […]

*** Chapter Outcome *** Discuss the potential civil liabilities under the 1933 Act. Unregistered Sales Section 12(1) of the act imposes express civil liability for • the sale of an unregistered security that is required to be registered, • the […]

ANSWERS TO PROBLEMS 1. Acme Realty, a real estate development company, is a limited partnership organized in Georgia. It is planning to develop a 200-acre parcel of land for a regional shopping center and needs to raise $1,250,000. As part […]

CASE 43-4 UNITED STATES v. O’HAGAN Supreme Court of the United States, 1997 521 U.S. 642, 117 S.Ct. 2199, 138 L.Ed.2d 724 http://scholar.google.com/scholar_case?q=117+S.CT. +2199&hl=en&as_sdt=2,34&case=287189961484150105&scilh=0 Ginsburg, J. Respondent James Herman O’Hagan was a partner in the law firm of Dorsey & […]

Chapter 43 SECURITIES REGULATION I. The Securities Act of 1933 A. Definition of a Security B. Registration of Securities 1. Disclosure Requirements 2. Integrated Disclosure 3. Shelf Registrations 4. Communications 5. Emerging Growth Companies C. Exempt Securities 1. Short-term Commercial […]

CASE 43-3 MATRIXX INITIATIVES, INC. v. SIRACUSANO Supreme Court of the United States, 2011 563 U.S. ___, 131 S.CT. 1309, 179 L.ED.2D 398 http://scholar.google.com/scholar_case?q=131+S.+Ct. +1309&hl=en&as_sdt=2,34&case=15831619199744263593&scilh=0 Sotomayor, J. [Matrixx develops, manufactures, and markets over-the-counter pharmaceutical products. Its core brand of products […]

Chapter 43. Securities Regulation 1. The Securities and Exchange Commission can seek civil injunctions and recommend that the Justice Department bring criminal prosecution against violators of federal securities laws. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Easy LEARNING […]

Chapter 44. Accountants’ Legal Liability 1. Mary tells her accountant, “I must have this year’s audit completed by March 1.” The accountant agrees to complete the audit by March 1. Under general contract law, if the audit is not completed […]

ANSWERS TO PROBLEMS 1. Baldwin Corporation made a public offering of $25 million of convertible debentures and registered the offering with the SEC. The registration statement contained financial statements certified by Adams and Allen, Certified Public Accountants. The financial statements […]

Chapter 44 ACCOUNTANT’S LEGAL LIABILITY A. Common Law 1. Contract Liability 2. Tort Liability a. Negligence b. Fraud 3. Criminal Liability 4. Client Information a. Working Papers b. Accountant-Client Privilege B. Federal Securities Law 1. Securities Act of 1933 2. […]

40. What sort of liability does an accountant have under the Securities Exchange Act of 1934? a. Civil liability where there is scienter b. Criminal liability where there is a willful violation c. Both of these are correct. d. Neither […]

Chapter 45. Environmental Law 1. Although in recent years certain developed countries, such as the United States, have made significant progress in controlling pollutants, this is not the case worldwide. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Easy […]

Chapter 45 ENVIRONMENTAL LAW I. Common Law Actions for Environmental Damage A. Nuisance 1. Private Nuisance 2. Public Nuisance B. Trespass to Land C. Strict Liability for Abnormally Dangerous Activities D. Problems Common to Private Causes of Action II. Federal […]

*** Chapter Outcome*** Explain the regulation of both point and nonpoint sources of pollution by the Clean Water Act. Point Sources The EPA administrator establishes euent limitations for categories of existing point sources. An euent limitation is a technology-based standard […]

ANSWERS TO PROBLEMS 1. Atlantic Cement operated a large cement plant. Neighboring landowners sued for damages and an injunction, claiming that their properties were injured by the dirt, smoke, and vibrations coming from the plant. The lower court found that […]

37. Because private causes of action have proved to be adequate to recompense and prevent environmental damage, the federal, state, and local governments have chosen to create few statutes designed to protect the environment. a. True b. False 38. The […]

Chapter 46 INTERNATIONAL BUSINESS LAW A. The International Environment 1. International Court of Justice 2. Regional Trade Communities a. European Union b. NAFTA 3. International Treaties B. Jurisdiction Over Actions of Foreign Governments 1. Sovereign Immunity 2. Act of State […]

ANSWERS TO PROBLEMS 1. Three banks that are wholly owned by the Republic of Costa Rica had issued promissory notes, payable in U.S. dollars in New York City. The notes are now in default due solely to actions of the […]

44. How does a distributor differ from an agent? a. The agent pays royalties to the multinational enterprise. b. The distributorship shares profits with the multinational enterprise. c. The distributor takes title to the merchandise it receives and thereby bears […]

Chapter 46. International Business Law 1. The International Monetary Fund was established in 1945 to promote international monetary cooperation and now has approximately 50 member countries. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: SRBL.MANN.15. 46.01 […]

Chapter 47. Introduction to Property, Property Insurance, Bailments, and Documents of Title 1. The same item may not be the object of both tangible and intangible property rights. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: […]

II. PROPERTY INSURANCE The insurance industry is huge and old, with origins possibly dating as far back as 1300 in Europe, when ships’ cargoes began to be insured. Today, insurance sales of all kinds fiourish because individuals want to lessen […]

20. Donna drove an automobile into Terry’s garage and requested him to make repairs for which the charge would be $125. Donna, however, never returned to get the automobile. Two months later, Carla saw the automobile in Terry’s garage and […]

ANSWERS TO PROBLEMS 1. In January, Roger Burke loaned his favorite nephew, Jimmy White, his valuable Picasso painting. Knowing that Jimmy would celebrate his twenty-first birthday on May 15, Burke sent a letter to Jimmy on April 14 stating: Dear […]

Part Ten: Property CONTENTS Chapter 47 Introduction to Property, Property Insurance, Bailments, and Documents of Title Chapter 48 Interests in Real Property Chapter 49 Transfer and Control of Real Property Chapter 50 Trusts and Decedents’ Estates ETHICS QUESTIONS RAISED IN […]

49. The Constitution protects against taking of property: a. by a corporation. b. without notice. c. for public use. d. without due process. 50. A transaction in which the owner gives possession of his personal property to another to secure […]

Chapter 48. Interests in Real Property 1. A possessory interest in real property is called an estate. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: SRBL.MANN.15.48.01 – 48.01 NATIONAL STANDARDS: United States – AICPA: BB-Risk Analysis […]

43. The characteristics of a qualified or base fee estate include(s) that: a. it is possible to convey or will property to a person to enjoy absolutely, subject to its being taken away at a later date should a certain […]

Chapter 48 INTERESTS IN REAL PROPERTY A. Freehold Estates 1. Fee Estates a. Fee Simple Estate b. Qualified or Base Fee Estate 2. Life Estates 3. Future Interests a. Reversions b. Remainders B. Leasehold Estates 1. Creation and Duration a. […]

ANSWERS TO PROBLEMS 1. Kirkland conveyed a farm to Sandler to have and to hold for and during his life and on Sandler’s death to Rubin. Some years thereafter, oil was discovered in the vicinity. Sandler thereupon made an oil […]

CASE 48-2 TUCKER v. HAYFORD Washington Court of Appeals, Division 3, 2003 118 Wash App. 246, 75 P.3d 980 http://scholar.google.com/scholar_case?case=4713939053717898068&hl=en&as_sdt=2&as_vis=1&oi=scholar Sweeney, J. We again note that a claim for personal injuries by a tenant can be premised on three distinct […]

Chapter 49 TRANSFER AND CONTROL OF REAL PROPERTY I. Transfer of Real Property A. Contract of Sale 1. Formation 2. Marketable Title 3. Implied Warranty of Habitability B. Deeds 1. Types of Deeds a. Warranty b. Special Warranty c c. […]

II. PUBLIC AND PRIVATE CONTROLS A. ZONING • Is the principal method of public control over land use. • The validity of zoning is rooted in the police power of the state, which is the inherent power of the government […]

ANSWERS TO PROBLEMS 1. Arthur was the father of Bridgette, Clay, and Dana and the owner of Redacre, Blackacre, and Greenacre. Arthur made and executed a warranty deed conveying Redacre to Bridgette. The deed provided that “this deed shall become […]

52. If Stan‘s land is condemned in order to build a subway system for the city, he must be given: a. the fair market value of the property. b. equivalent property. c. the option of keeping the property. d. his […]

Chapter 49. Transfer and Control of Real Property 1. General contract law provisions govern the sale of real property. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: SRBL.MANN.15.49.01 – 49.01 NATIONAL STANDARDS: United States – AICPA: […]

39. Where there has been informal rulemaking or informal adjudication by an administrative agency and the decision by that agency is then appealed to the courts, the court will generally apply what test in reviewing factual determinations? a. The unwarranted […]

Chapter 5. Administrative Law 1. Administrative law is the branch of private law created by agencies in the form of rules, regulations, orders, and decisions to carry out regulatory powers and duties. a. True b. False ANSWER: False POINTS: 1 […]

CASE 5-3 SACKETT v. ENVIRONMENTAL PROTECTION AGENCY Supreme Court of the United States, 2012 566 U.S. ___, 132 S.CT. 1367, 182 L.Ed.2d 367 http://scholar.google.com/scholar_case?q=132+S.CT. +1367&hl=en&as_sdt=2,34&case=13663798285804514473&scilh=0 Scalia, J. [The Clean Water Act (Act) prohibits “the discharge of any pollutant by any […]

Chapter 5 ADMINISTRATIVE LAW A. Operation of Administrative Agencies 1. Judicial Review 1. Rulemaking a. General Requirements a. Legislative Rules b. Questions of Law b. Interpretive Rules c. Questions of Fact c. Procedural Rules 2. Legislative Control 2. Enforcement 3. […]

ANSWERS TO PROBLEMS 1. In 1942, Congress passed the Emergency Price Control Act in the interest of national defense and security. The stated purpose of the Act was “to stabilize prices and to prevent speculative, unwarranted and abnormal increases in […]

Chapter 50. Trusts and Decedents’ Estates 1. A trust can only be created by a written document, although no particular words are necessary. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: SRBL.MANN.15. 50.02 – 50.02 NATIONAL […]

46. The characteristics of a totten trust include that: a. it is a bank account opened by the settlor of the trust. b. it is tentative. c. transfer of ownership is complete only on the depositor‘s death. d. All of […]

Chapter 50 TRUSTS AND DECEDENTS’ ESTATES I. Trusts A. Types of Trusts 1. Express Trusts a. Testamentary Trusts b. Inter Vivos Trusts c. Charitable Trusts d. Spendthrift Trusts e. Totten Trusts 2. Implied Trusts a. Constructive Trusts b. Resulting Trusts […]

CASE 50-3 PRINE v. BLANTON Supreme Court of Georgia, 2012 290 GA. 307, 720 S.E.2D 600 http://scholar.google.com/scholar_case? q=Testamentary+Capacity+and+Power+&hl=en&as_sdt=2,34&as_ylo=2011&case=9029015898403998192&scil h=0 Hunstein, J [Debra Prine challenged the validity of her father’s will on the grounds that he lacked testamentary capacity and was […]

ANSWERS TO PROBLEMS 1. State whether or not a trust is created in each of the following situations: (a) A declares herself trustee of “the bulk of my securities” in trust for B. (b) A, the owner of Blackacre, purports […]

*** Chapter Outcome*** List and define the oenses against business. C. CRIMES AGAINST BUSINESS In the United States, crimes against business property amount to losses in the hundreds of billions of dollars each year. In this section, you will learn […]

ANSWERS TO PROBLEMS 1. Sam said to Carol, “Kim is going to sell me a good used car next Monday and then I’ll deliver it to you in exchange for your computer, but I’d like to have the computer now.” […]

Chapter 6 CRIMINAL LAW A. Nature of Crimes 5. Burglary 1. Essential Elements 6. Extortion and Bribery 2. Classification 7. Forgery 3. Vicarious Liability 8 Bad Checks 4. Liability of the Corporation D. Defenses to Crimes B. White-Collar Crime 1. […]

55. Two boys held up a liquor store at gunpoint and ran off with a bag of money. The police saw them run into Jill‘s apartment building where there are only four apartments off a common hall and no apparent […]

Chapter 6. Criminal Law 1. In a criminal trial, the plaintiff must prove the case by a preponderance of the evidence. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: SRBL.MANN.15. 06.01 – 06.01 NATIONAL STANDARDS: United […]

Chapter 7. Intentional Torts 1. In order to constitute a battery, contact need not cause physical injury. a. True b. False ANSWER: True POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: SRBL.MANN.15.01.01 – 1.01 NATIONAL STANDARDS: United States – AICPA: BB-Risk Analysis […]

Chapter 7 INTENTIONAL TORTS A. Intent 3. Misuse of Legal Procedure B. Harm to the Person D. Harm to Property 1. Battery 1. Real Property 2. Assault a. Trespass 3. False Imprisonment b. Nuisance 4. Infliction of Emotional Distress 2. […]

ANSWERS TO PROBLEMS 1. The Penguin intentionally hits Batman with his umbrella. Batman, stunned by the blow, falls backwards, knocking Robin down. Robin’s leg is broken in the fall, and he cries out, “Holy broken bat bones! My leg is […]

CASE 7-3 FRANK B. HALL & CO., INC. v. BUCK Court of Appeals of Texas, Fourteenth District, 1984 678 S.W.2d 612, cert. denied, 472 U.S. 1009, 105 S.Ct. 2704, 86 L.Ed.2d 720 (1985) http://scholar.google.com/scholar_case? q=678+S.W.2d+612&hl=en&as_sdt=2,34&case=17495651340574040653&scilh=0 Junell, J. [On June 1, […]

51. Defenses to intentional torts include: a. self-defense and consent. b. defense of others and consent. c. self-defense and defense of property. d. All of these are valid defenses. 52. A(n) is a non–trespassory invasion of another‘s interest in the […]

Chapter 8. Negligence and Strict Liability 1. A blind person will be held to the standard of care of a reasonable blind person rather than that of the reasonable sighted person for purposes of determining negligence. a. True b. False […]

53. An action for negligence consists of five elements, each of which the plaintiff must prove. These elements include: a. harm. b. res ipsa loquitur. c. a reasonable person. d. All of these. 54. Joe intentionally pushed Bill into a […]

CASE 8-3 PALSGRAF v. LONG ISLAND RAILROAD CO. Court of Appeals of New York, 1928 248 N.Y. 339, 162 N.E. 99 http://www.nycourts.gov/reporter/archives/palsgraf_lirr.htm Cardozo, C. J. Plaintiff was standing on a platform of defendant’s railroad after buying a ticket to go […]

ANSWERS TO PROBLEMS 1. A statute requiring railroads to fence their tracks is construed as intended solely to prevent animals that stray onto the right of way from being hit by trains. B & A Railroad Co. fails to fence […]

Chapter 8 NEGLIGENCE AND STRICT LIABILITY I. Negligence 1. Scope of Liability (Proximate Cause) A. Breach of Duty of Care 2. Foreseeability 1. Reasonable Person Standard 3. Superseding Cause a. Children C. Harm b. Physical Disability D. Defenses to Negligence […]

40. Promissory estoppel is a contractual doctrine that includes the following considerations: a. The courts use the doctrine of promissory estoppel to enforce unilateral promises. b. Under this doctrine the promisor reasonably expects that the promisee, in reliance on the […]

Chapter 9. Introduction to Contracts 1. Contracts are primarily governed by the Uniform Commercial Code. a. True b. False ANSWER: False POINTS: 1 DIFFICULTY: Easy LEARNING OBJECTIVES: SRBL.MANN.15. 09.01 – 09.01 NATIONAL STANDARDS: United States – AICPA: BB-Risk Analysis STATE […]

Part Two: Contracts CONTENTS Chapter 9 Introduction to Contracts Chapter 10 Mutual Assent Chapter 11 Conduct Invalidating Assent Chapter 12 Consideration Chapter 13 Illegal Bargains Chapter 14 Contractual Capacity Chapter 15 Contracts in Writing Chapter 16 Third Parties to Contracts […]

ANSWERS TO PROBLEMS 1. Owen telephones an order to Hillary’s store for certain goods, which Hillary delivers to Owen. Neither party says anything about the price or payment terms. What are the legal obligations of Owen and Hillary? Answer: Implied […]

*** Chapter Outcome *** List the essential elements of a contract. C. REQUIREMENTS OF A CONTRACT 1. Mutual assent — The parties must show by words or conduct that they have agreed to enter into a contract. The usual method […]

An association of banks created for the purpose of settling accounts with each other on a daily basis is a: a. payor banking group. b. clearinghouse. c. provisional reserve. d. None of these. Under the RUPA, a partner who does […]

Regarding drug and alcohol testing of employees by employers: a. the NLRB makes it a mandatory subject of collective bargaining in a union setting. b. the constitutional protection from unwarranted search and seizure protects private sector employees from the practice. […]

Most lemon laws define a lemonas a car that: a. was sold by a dealer who refuses to make reasonable attempts to correct the problem. b. continues to have a defect that substantially impairs its use, value, or safety, even […]

Costs incurred to acquire a nondelivered performance from some other source are consequential damages. a. True b. False Under the RMBCA, if a quorum exists, a shareholder action such as the election of directors is approved if the votes cast […]

The fair market value of a 10-foot fishing boat is $1,000. In a special promotion, J’s Marina purchases a 10-foot fishing boat for $900. The boat is badly scratched when it arrives. J’s Marina, however, accepts the shipment and notifies […]

Statutes of repose were enacted to give consumers more rights against large manufacturers. a. True b. False If a principal debtor defaults on a loan, an absolute surety will have to pay upon demand of the creditor. a. True b. […]

Eliza was an antique expert. She went to a tea party at Grandma Jones’ house and saw a magnificent Queen Anne table out on the back porch. She asked Grandma about it and was told it was in the way […]

Since its inception in 1946, the U.N. Secretariat has registered and published approximately how many treaties that expressly or indirectly concern international business? a. 100 b. 550 c. 30,000 d. 75,000 The Worker Adjustment and Retraining Notification Act requires an […]

Most states have adopted the theory that a mortgage is a lien on real property for the payment of a debt. a. True b. False “Acceptance” under the UCC always means taking possession of goods. a. True b. False Answer: […]

There is no necessity to distinguish language which constitutes an offer from that which merely solicits or invites offers. a. True b. False If a shareholder dissents to a proposed business combination, he is entitled to receive the fair value […]

A(n) is a measure designed to protect the public from unqualified practitioners. a. exculpatory clause b. revenue license c. regulatory license d. usury statute Ordinarily, an agent may delegate his duties to an equally qualified subagent. a. True b. False […]

If dividends are not declared for five years, but the company has accumulated earnings each year, the shareholders may: a. petition the court of law for redress. b. override the board with a two-thirds vote. c. ask for an injunction […]

Al has a tax service and accounting business in Redwood City. He decides to move to Center City, which is 150 miles away and sells his accounting practice to Able and Baker, a CPA firm. In the sales contract, he […]

Hannah, as a joke, offers to sell her violin to Mike. Her statement would have legal effect if: a. the intended jest is so successful that Mike as a reasonable person under the circumstances believes the joke is an offer […]

All states have authorized the formation of limited liability companies. a. True b. False Bob took a check written by Jack to Jack’s bank to be certified. The bank stamped “Certified” on it and gave it back to Bob. What […]

All price discrimination is illegal under the Robinson-Patman Act. a. True b. False Seth and Maricela enter into a contract for a sale of goods for a contract price of $1,200 and Maricela has made a down payment of $200. […]

The concept of sovereign immunity provides that a nation’s judicial branch should not question the validity of the actions a foreign government takes within its own borders. a. True b. False After a breach by the seller, buyer may replevy […]

An employer can be liable for an agent’s negligence, but he will never be liable for his intentional torts. a. True b. False What is the effect of a payor bank’s dishonor of a check? a. It returns the check […]

Barbara, an antique dealer, intentionally represents the value of an antique chest of drawers, as $6,000 when she has reason to know the value is considerably less. Margaret agrees to buy it for $5,500. It is worth $2,500. In a […]

Identify the ways a partnership is dissolved by operation of law under the UPA. List the circumstances under which a court will order a dissolution of a partnership. Failure to give notice of dishonor will discharge the drawer from having […]

The “perfect tender rule” would allow a buyer to keep merchandise that deviates from the contract without having to perform himself. a. True b. False Mr. and Mrs. Weaver have a duty to: a. control the behavior of their minor […]

Under the UCC, a(n)___is a sequence of previous conduct between the parties to an agreement which may befairly regarded as establishing a common basis of understanding for interpreting their conduct under the contract. a. course of dealing b. usage of […]

Which of the following best expresses the policy behind the Truth-in-Lending Act? a. To help borrowers by requiring lenders to charge a “reasonable” rate of interest as determined by the Federal Reserve Board. b. To help small business by prohibiting […]

The word “merchantability” must be mentioned in a disclaimer of an implied warranty of merchantability. a. True b. False In most, if not all, cases where there is a legal detriment to the promisee, there is also a legal benefit […]

Which of the following is true about a constructive trust? a. It normally contains detailed instructions for the trustee to follow. b. The court to redress an injustice imposes it. c. It is revocable by the trustee. d. It carries […]

Any action for breach of a sales contract must be begun within: a. four years after the cause of action accrued. b. five years after the cause of action accrued. c. whatever period of time the parties have set in […]

Agencies may deny access to which of the following types of records? a. Those related to national defense and specifically authorized to be kept secret b. Those relating to internal personnel rules c. Trade secrets d. All of these. Damages […]

Dale defaults on a car loan secured by his car and guaranteed by both Sam and Dave. Subrogation would allow Sam, who paid Dale’s full obligation, to: a. repossess the car. b. collect from Dave. c. collect from Dale. d. […]

Which of the following is generally NOT a defense to a claim against a manufacturer under 402A? a. Contributory negligence on the part of the plaintiff b. Express assumption of the risk c. Misuse or abuse of the product d. […]

A general partner, but not a limited partner, may be either a secured or unsecured creditor of the partnership with the same rights as a person who is not a partner. a. True b. False The RUPA treats a partnership […]

Upon rightful rejection or justifiable revocation of acceptance, the buyer loses all property interest in the goods. a. True b. False When the nonconformity or default substantially impairs the value of the installment but not the value of the entire […]

The Revised Model Business Corporation Act has been adopted at least in part by more than half of the states. a. True b. False Insurance protects a business from: a. tort liability. b. strict liability. c. negligence. d. All of […]

A basic objective of the Securities Act of 1933 is: a. to provide investors with material information concerning securities offered for sale to the public. b. to prohibit misrepresentation and other fraudulent acts in the sale of only registered securities. […]

The Code’s firm offer rule applies only to offers in writing that are made by a merchant offeror. a. True b. False All states except one have adopted either the 1976 or 1985 RULPA. a. True b. False Answer: True […]

The delivery of personal property to a creditor as security for the payment of a debt is: a. perfection. b. a pledge. c. attachment. d. a general intangible. Which of the following is not covered by the Government in the […]

To satisfy the statute of frauds, the person who wants to bring the lawsuit must sign a memorandum. a. True b. False Bill has had a problem with vandalism at his business. He rigs up a spring gun at the […]

An agreement in connection with the sale of a business that prohibits the seller from engaging in the same or a similar business for a period of twenty-five years would be unreasonable. a. True b. False Under the NLRA, an […]

An oral promise by a limited partner to contribute to the limited partnership is enforceable. a. True b. False Alice offers to sell her computer, monitor, and printer to Bradley for $300. Bradley says he will accept provided thatAlice includes […]

Pam certified a statement prepared by John, her employee, without checking John’s work. He was never known to be anything but diligent and his integrity had never been questioned. The audit contained gross misstatements. Pam defends a suit against her […]

A judicial lien against a partner’s transferable interest in a partnership is known as a(n): a. legal aggregate. b. delegation of assets. c. charging order. d. assignment. Tender can be made any time of the day or night when the […]

When an injured party is required to elect remedies, which of the following would be mutually exclusive? a. Restitution and liquidated damages b. Specific performance and compensation for incidental damages c. Specific performance and restitution d. Incidental and consequential damages […]

In a condominium: a. all residents own shares in the corporation that owns the building. b. each resident purchases a living unit in the building. c. the tenant owns a reversionary interest in the property. d. the tenant creates a […]

Which of the following contracts is covered by Article 2 of the Uniform Commercial Code? a. The sale of a house b. The sale of a new car c. An employment agreement d. A sale of automobile insurance If a […]

Administrative agencies create more legal rules and adjudicate more controversies than all the legislatures and courts combined. a. True b. False Gary mails an offer to Brian on June Brian receives the offer on June Gary mails a revocation of […]

Which of the following may influence a promoter to choose to incorporate in a particular state? a. Its restrictions on dividend payments b. Its tax on corporate earnings c. The rights granted to shareholders d. All of these Which of […]

A quorum consists of how many justices on the U.S. Supreme Court? a. 3 b. 5 c. 6 d. 7 Richard owns and operates a small business at an outdoor market where he sells fruits and vegetables. What does the […]

If a bank pays on a check after the death of its customer, the customer’s estate is not automatically entitled to reimbursement. a. True b. False Which of the following would ordinarily NOT be considered a security under the federal […]

A certificate of deposit differs from a promissory note in that, with a certificate of deposit: a. the maker is always a bank. b. there are three parties to the transaction. c. the payee of a CD must be paid […]

In 1995, Congress enacted the Administrative Dispute Resolution Act to require federal agencies to use arbitration or mediation to resolve disputes. a. True b. False An implied-in-fact condition and constructive condition are the same. a. True b. False Answer: False […]

A cease and desist order, issued by the FTC, directs a party to stop a certain practice or face punishment, such as a fine. a. True b. False No implied warranty exists: a. if it is disclaimed in any manner. […]

All but which of the following is required of a negotiable instrument? a. It must be payable only out of a particular fund. b. It must contain an unconditional promise to pay a fixed amount in money. c. It must […]

Which of the following terms would indicate a destination contract? a. F.O.B. city of buyer b. F.O.B. city of seller c. C.I.F. d. F.A.S. seller’s port A true statement of a highly personal nature made to embarrass someone is defamation. […]

Article 2A, in a provision analogous to Article 2’s warranty of title provision, protects the lessee’s right to possession and use of the goods from claims of other parties arising from an act or omission of the lessor. a. True […]

Generally, whether or not the parties deal at arm’s length does not affect whether silence alone amounts to fraud. a. True b. False Which of the following is NOT true about Social Security? a. Disability insurance is one program within […]

Scienter is the element of fraud that requires that the person who makes the misrepresentation knows that it is false or has reckless indifference as to its truthfulness. a. True b. False Scott buys a television from Joe’s TV Store, […]

A stock split results in a larger proportion of corporate ownership by the shareholder. a. True b. False Intellectual property consists of which of the following? a. Trade secrets b. Patents c. Trade symbols d. All of these are considered […]

Both design and manufacturing defects can subject a manufacturer or seller to products liability. a. True b. False Bearer paper runs to whomever is in possession of it. a. True b. False Answer: True The Clean Water Act requires the […]

Assume an offeree mails a rejection to the offeror on November This rejection arrives at the offeror’s place of business on November In the meantime, on November 4, the offeree sends the offeror an acceptance that arrives November Which of […]

Although under GATT’s most-favored nation provision all signatories must treat each other as favorably as they treat any other country, nations may give preferential treatment to developing nations and may enter into free trade areas. a. True b. False Often […]