Anthony believes that he needs to obtain a Chapter 13 discharge in bankruptcy. A
Chapter 13 case can be initiated by a filing of a voluntary petition by
a. a creditor only.
b. a corporation only.
c. a debtor only.
d. a trustee only.
Jason files a suit against Maybelline. If Maybelline fails to respond, Jason
a. must appeal the case to a different court.
b. must refile the suit in the same court.
c. will be awarded the remedy sought.
d. will have a default judgment entered against him.
Joey reproduces Mina’s copyrighted work Storm on the Mountain without paying
royalties. Joey is most likely excepted from liability for copyright infringement under
the “fair use” doctrine if
a. Joey copies the entire work.
b. Joey distributes the copies without charge to the public.
c. Joey’s use has no effect on the market for Mina’s work.
d. Joey’s use is for a commercial purpose.
Kingston promises to pay Melina $500 to install a sump pump in his warehouse. Melina
completes the installation. The act of installing the pump
a. imposes a moral obligation on Kingston to pay Melina.
b. imposes no obligation on Kingston unless he is satisfied with the job.
c. is not sufficient consideration because it is not goods or money.
d. is the consideration that creates Kingston’s obligation to pay Melina.
Levi, a well-known lumber dealer with a good reputation, buys a load of lumber and
pays for it with a check that is later dishonored. Sam, who is unaware of the bad check,
buys the lumber from Levi. Sam is a(n)
a. good faith purchaser.
b. bad faith purchaser.
c. insolvent purchaser.
d. bailee.
In Benny v. City Car Dealership, a state supreme court held that a minor could cancel a
contract for the sale of a car. Now a trial court in the same state is deciding Daphne v.
Even Steven Auto Deals, Inc.,, a case with similar facts. Under the doctrine of stare
decisis, the trial court is likely to
a. allow the minor to cancel the contract.
b. disregard the Benny case.
c. order the minor to cancel the contract.
d. require the minor to fulfill the contract.
Quality Sales Corporation enters into contracts over the Internet. Quality can protect
itself against disputes involving these contracts by making important terms
a. reasonably clear.
b. difficult to notice.
c. impossible to find.
d. standardized.
Frooty Drinks, Inc., and Great Gulp Bottling Company have a processing-plant
franchise arrangement. This involves the transfer of
a. a license.
b. a trade name.
c. the formula to make a certain product.
d. the ownership of the business.
Ryan invents a pen that digitally “remembers” what is written or drawn with it. To
obtain a patent for the pen, Ryan does not have to show that it is
a. novel.
b. marketable.
c. useful.
d. not obvious in light of current technology.
Rollo promises to perform, for a price, shoe repair services in affiliation with Togs n
Things, a clothing store. To support a contract, the consideration exchanged by the
parties must be
a. adequately considerate.
b. equally valuable.
c. legally sufficient.
d. wisely priced.
Sweet Treats, Inc., wants to market a new snack food. On the product’s label, standard
nutrition facts are
a. prohibited.
b. required.
c. strictly voluntary.
d. warranted by the nature of the food.
Homer’s Remodeling, LLC, is a limited liability company. Among the members, a
dispute arises that their operating agreement does not cover. No statute applies. The
dispute is governed by the principles of
a. corporate law.
b. partnership law.
c. sole proprietorship law.
d. joint venture law.
Katie and Linda enter into a contract for Katie to buy Linda’s house in which there are
several terms that are subject to more than one reasonable interpretation. If Katie and
Linda attach materially different meanings to a term
a. only Katie will be able to void the contract.
b. only Linda will be able to void the contract.
c. neither Katie nor Linda will be able to void the contract.
d. either Katie or Linda will be able to void the contract.
Great Gates, Inc. has a board of ten directors. Great Gate’ bylaws do not state any
quorum requirements. In most states, a quorum for Great Gates will be defined as
a. two directors.
b. six directors.
c. nine directors.
d. ten directors.
Jackson is accused of a crime. Jackson can refuse to provide informationabout his
allegedly criminal activities
a. if he suspects the information will be used to prosecute him.
b. if the police do not promise to keep the information confidential.
c. if the information is “fruit of the poisonous tree.”
d. under no circumstances.
Uri discovers a boat adrift, and retrieves and anchors it. The boat features a number on
its side and other evidence pointing to its owner, Vera. This is
a. an involuntary bailment.
b. a voluntary bailment.
c. an express bailment.
d. no bailment.
Bobbie claims that Carly breached their contract. Carly responds that she never
intended to enter into a contract with Bobbie. The intent to enter into a contract is
determined with reference to
a. the conscious theory of contracts.
b. the objective theory of contracts.
c. the personal theory of contracts.
d. the subjective theory of contracts.
Bob, a salesperson at a Carpets Galore store, tells Dita, a customer, “Buy your carpet
here, and Ill install it for half of what the store would charge.” Dita buys the carpet,
which Bob installs for half the store’s price. Bob keeps the money. Bob has breached
a. no duty.
b. the duty of loyalty.
c. the duty of notification.
d. the duty of obedience.
Brenda induces Carmen to enter into a contract for the sale of a gas station and
convenience store. Brenda tells Carmen that she is the sole owner, but their signed,
written contract lists Brenda’s parents as co-owners. The parol evidence rule governs
a. contracts that are induced by fraud.
b. contracts that must be in writing to be enforceable.
c. the admissibility in court of oral evidence.
d. the merging of oral and written statements into one contract.
Rite Contractors, Inc., agrees to build a motel for Sleep Inn Corporation. The project
proceeds according to plan, but before it is done, Sleep tells Rite to quit. Rite may
recover
a. the contract price less costs of materials and labor.
b. the contract price.
c. the costs needed to complete construction.
d. profits plus the costs incurred up to the time of the breach.
In deciding questions of corporate social responsibility, Valley Disposal & Recycling,
Inc., is concerned with
a. how the corporation can best fulfill any ethical duty to society.
b. the effect on corporate profits of ignoring any ethical duty to society.
c. whether the corporation owes any ethical duty to society.
d. all of the choices.
Davis points a gun at Eton, threatening to shoot him if he does not stealfrom his
employer, Freddy’s Convenience Store, and give the stolen funds toDavis. Charged with
theft, Eton can successfully claim, as a defense
a. nothing.
b. duress.
c. entrapment.
d. self-defense.
Gert, an accountant, contracts to conduct an audit for Hailey. In performing the audit,
Gert fails to detect certain misconduct. Gert is most likely
a. liable if a normal audit would have revealed the misconduct.
b. liable if Gert issues a specifically qualified opinion.
c. not liable if Gert generally disclaims any liability.
d. not liable if the misconduct was due to Hailey’s negligence.
Chatsworth loans his laptop to Zelda. This is
a. a bailment.
b. a tenancy in common.
c. a gift.
d. lost property.
Cash National Bank is an HDC of a note for $1,000 on which there is the forged
signature of “Dudley.” If sued on the note by Cash
a. Dudley must pay the note.
b. Dudley’s best defense would be fraud in the execution.
c. Dudley’s best defense would be material alteration.
d. Dudley’s best defense would be forgery.
SuperBumperCars, Inc. requires all customers to sign a release that contains a clause
that releases SuperBumperCars from all liability in the event of an injury occurring
during a bumper car ride, no matter who is at fault. This is an example of
a. a covenant not to compete.
b. an adhesion contract.
c. an exculpatory clause.
d. an illusory promise.
Tyler, a citizen of West Virginia, files a suit in a West Virginia state court against
Louisville Sales Corporation, a Kentucky state company that does business in West
Virginia. The court has original jurisdiction, which means that
a. the case is being heard for the first time.
b. the court has a unique method of deciding whether to hear a case.
c. the court has unusual procedural rules.
d. the subject matter of the suit is interesting and new.
Windstar Heli-Pads, Inc., enters into a contract to employ Valerie as an on-site project
manager for two years. Windstar breaches the contract. Valerie has a duty to
a. do nothing.
b. reduce the damages that Valerie might otherwise suffer.
c. breach the contract with Windstar.
d. sue Windstar to deter others from similar acts.
Carol files a suit against Andy in a state trial court and loses. Carol
a. cannot take her case any higher in the court system.
b. can insist that the United States Supreme Court hear her case.
c. can plead her case before an appellate court.
d. can plead her case before a small claims court.
Mona offers Ned, a building inspector, $5,000 to overlook the violations in her new
warehouse. Ned accepts the cash and overlooks the violations. Mona is charged with
the crime of bribery. The crime occurred when
a. Mona decided to offer the bribe.
b. Mona offered the bribe.
c. Ned accepted the bribe.
d. Ned overlooked the violations.
Lulu, an accountant, conducts an audit of Microstuff Toys, Inc. After the conclusion of
the audit, the working papers created in preparing the audit must be
a. disposed of immediately.
b. kept until the Public Company Accounting Oversight Board’s review.
c. maintained for seven years.
d. retained forever.
In most situations, a termination statement must be filed or sent within twenty days
after the debt is paid.
A closing argument is a statement by a party that results in a summary judgment in that
party’s favor.
International Exports, L.P., is a limited partnership, with $100,000 in declared but
unpaid profits. International’s creditors include Friendly Credit Corporation for $5,000
and Gwen, one of International’s limited partners, also for $5,000. When Harry, one of
International’s general partners, decides to retire, the other general partners vote to
liquidate and dissolve the firm. The limited partners, who are not asked their opinions,
want International to continue in business and file a suit against the general partners to
compel this result. Can the court order International to continue? If not, what is the
priority of the distribution of International’s assets on its dissolution?
An accountant’s working papers are the documents that are used and developed during
an audit.
If a customer does not have sufficient funds to pay a check available in his or her
checking account and the bank dishonors the check, the bank is liable to the customer.
In most bailments, the bailee can retain the goods given by the bailor and return
equivalent property.
A person who acquires an instrument knowing that the instrument contains an
unauthorized signature can still be afforded HDC protection.
A continuation statement is effective only if it is filed within six months before the
expiration of a financing statement.
The main individual beneficiaries of stock buybacks are corporate executives.
Few companies provide any kind of support such as ethical training programs and
seminars to make their ethical codes more effective.
The loan that a lender provides to enable a borrower to purchase real property is a
mortgage.
Under the Statute of Frauds, an oral contract for the transfer of a mortgage is
enforceable.
A registration statement must state how a corporation plans to use the proceeds from the
sale of the securities.
In mediation, the mediator proposes a solution that includes what compromises are
necessary to reach an agreement.
Partnership profits must be shared in the same proportion as the partner’ investment of
capital in the firm.
There are twelve justices on the United States Supreme Court and they all receive
life-time appointments.
A bank that pays a customer’s check with a forged drawer’s signature can generally pass
the loss onto the customer.
A license permits the use of another’s intellectual property for certain limited purposes.
A breach of contract entitles the nonbreaching party to sue for monetary damages.
A law that limits the liberty of all persons may violate substantive due process.