To be negotiable, an instrument must be payable in afixed amount.
a. True
b. False
Under the Statute of Frauds, fixtures, such as buildings, growing crops and minerals,
are treated as real property.
a. True
b. False
Sales & Revenue, Inc., discovers that defamatory statements about its policies and
products are being posted in an online forum. TransWeb Inc., the Internet service
provider whose users are posting the messages, refuses to disclose the identity of the
person or persons responsible. Sales & Revenuefiles a suit against the anonymous
users. The plaintiff can obtain from TransWeb the identity of the persons responsible for
the defamatory messages by
a. using the authority of the court.
b. gaining unauthorized access to TransWebs servers.
c. deceiving TransWeb into revealing the posters identities.
d. no legal or illegal means.
To execute a valid will, a testator must remember the “natural objects of his or her
bounty.
a. True
b. False
Dumping is the sale of imported goods at “less than fair value.
a. True
b. False
Senator Brown and other politicians want to restrict the flow of technologically
advanced products and data from the United States to other countries. To restrict or
encourage exports, Congress can
a. do nothing.
b. assess antidumping duties.
c. impose export taxes.
d. set export quotas.
Philip is elected as a director for Fatless Foods, Inc. His term of office will most
probably last for
a. three months.
b. six months.
c. nine months.
d. one year.
Whistleblower statutes protect employees from retaliatorydischarge.
a. True
b. False
Savers Mart, Inc., distributes its merchandise to retail outlets on an inter-state
basis.Under the commerce clause, Congress has the power to regulate
a. any commercial activity in the United States.
b. only activities that are in intrastate commerce.
c. only activities that are in local commerce.
d. only activities that are not in commerce.
Echo takes her car to Fix-It, Inc., which repairs the car and bills Echo for $500. Echo
writes out a check drawn on Capital Bank, but later, believing that Fix-It did not repair
the car properly, issues a stop-payment order.
Refer to Fact Pattern 18-1. Capital Bank
a. is liable to Fix-It for the amount of the check.
b. must stop payment if Capital has a reasonable time to act.
c. need not stop payment unless Echo had a valid reason to act.
d. need not follow Echos order unless the check was certified.
Under the UCC, if a contract is unilateral, the offeror must be notified of the of-ferees
performance.
a. True
b. False
Idle Investments, Inc., and Harbor Bank are secured parties with secu-rity interests in
property owned by GR8 Manufacturing Corporation. Priority between these security
interests is generally determined by
a. the amount of the claim.
b. the custom in the trade.
c. the time of perfection.
d. the time the security agreement was signed.
It is estimated that over 70 percent of the goods imported to the United States are
counterfeit.
a. True
b. False
Accountants and other professionals do not face liability under the common law for any
breach of contract.
a. True
b. False
Doctors Medical Associates obtains an insurance policy that protects its members
against negligence claims by their pa-tients. This is
a. casualty insurance.
b. fidelity or guaranty insurance.
c. malpractice insurance.
d. workers compensation insurance.
In studying the legal environment of business, Professor Dooleys students also review
ethics in a business context. Ethics includes the study of what constitutes
a. fair or just behavior.
b. financially rewarding behavior.
c. legal behavior.
d. religious behavior.
Rita, the manager of the State University (SU) soccer team, orally agrees to lease a
certain number of specially made SU banners from Top Banners, Inc. This lease is
enforceable only if Top has made a substan-tial start on making the banners and
a. Rita agreed to the lease on behalf of the SU soccer team.
b. SU does not have other, similar banners available.
c. the banners are not suitable for others in the course of Tops business.
d. the soccer season has not ended and SU goes to the finals.
Philomena dies without a will. A court appoints Quigley to handle the probate of
Philomenas estate. The administrator of the estate is
a. Philomenas closest blood relative.
b. Philomena.
c. Quigley.
d. the court.
It is legal to charge any interest rate for an ordinary loan.
a. True
b. False
Olivia, a minor, signs a contract to buy a bike from Phil, the owner of SuperCycles Bike
Store. Olivias right to disaffirm the contract
a. does not change the fact that Phil is bound by the contract.
b. does not yet exist because Olivia is still a minor.
c. gives Phil, an adult, the right to disaffirm the contract.
d. is not valid because a bike is a “necessary.
Energy Unlimited, LP, is a limited partnership to which its partners, in-cluding Fink,
have contributed capital. Energys creditors include Graves Engineering, Inc. On
Energys dissolution, its assets will be distributed to pay
a. Fink and Graves proportionately.
b. Fink first.
c. Graves first.
d. neither Fink nor Graves.
There is no debate that employees have an absolute right to free expression to make
negative posts in social media about other employees and managers.
a. True
b. False
Fred goes to Carla, a knowledgeable dog breeder, and tells her that he wants to get a
dog that will be good with small children. Carla sells Fred a dog. When Fred takes the
dog home, it bites both his small children and causes them serious injuries. Fred can sue
Carla for breach of
a. an express warranty.
b. an implied warranty of fitness for a particular purpose.
c. an implied warranty of merchantability.
d. a warranty of title.
April and other employees of Bodegas & Bistros Inc. (2B) maintain a
password-protected social media page to “vent about work. When 2B learns of the page,
the company intimidates April into revealing the password, and after reviewing the
posts, fires her and the other participants. Most likely, this is
a. a violation of the Stored Communications Act.
b. within 2Bs rights as an employer.
c. a subject for dispute resolution by the communications providers that the employees
page uses.
d. a “business-extension exception under the Electronic Communications Privacy Act.
Symbolic speech is defined as nonverbal expressions of belief and is protected by the
First Amendment.
a. True
b. False
Pluto accuses Quark, an accountant, of committing defalcation. This is
a. embezzlement.
b. general misconduct.
c. professional negligence.
d. throwing something out of a window.
In sales law, product liability is assurance by one party of the existence of a fact on
which the other party can rely.
a. True
b. False
Dirk, an employee of Ergonomic Elevators, Inc., pays Ferbie, an employeeof
Ergonomics competitor G-Force Risers Company, for a secret G-Forcepricing schedule.
This is
a. an effective marketing strategy.
b. commercial bribery.
c. creative legal bookkeeping.
d. money laundering.
When an instrument is dishonored, only written notice is sufficient to hold secondary
parties liable.
a. True
b. False
Lebron, an attorney, allows a statute of limitations to lapse on a claim by Midwest
Metal Fabrication Company, a client. Lebron
a. can be held liable for malpractice.
b. has violated an ethical standard but cannot be held liable.
c. is subject to criminal penalties under the statute of limitations.
d. will be automatically disbarred.
Dhani, an accountant for Eureka, Inc., learns of undisclosed com-pany plan-s to market
a new laptop. Dhani buys 1,000 shares of Eureka stock. He re-veals the company plans
to Fay, who buys 500 shares. Fay tells Geoff, who tells Hu. Both Geoff and Hu buy 100
shares. They know that Fay got her informa-tion from Dhani. When Eureka publicly
an-nounces its new laptop, Dhani, Fay, Geoff, and Hu sell their stock for a profit.
Refer to Fact Pattern 26-3. Under the Securities Ex-change Act of 1934, Hu is most
likely
a. liable for insider trading.
b. not liable because Hu is only a tippee, not a tipper.
c. not liable because Hu is too far down the chain of disclosure.
d. not liable because Hu traded on the basis of a true fact.