Rupert, an agent for Star Productions, Inc., enters into an unauthorized contract with
Theatrical Transport Corporation purportedly on behalf of Star, which refuses to
perform. Rupert is liable
a. for breach of contract to Star and Theatrical Transport.
b. for misrepresentation to Star only.
c. for misrepresentation to Theatrical Transport only.
d. to no one.
Energy Services Corporation engages in trade practices that may violate antitrust law.
The Federal Trade Commission has the power to act against anticompetitive behavior
under
a. Section 1 of the Sherman Act.
b. the Federal Trade Commission Act.
c. no federal law.
d. Section 2 of the Sherman Act.
Beth obtains a life insurance policy from Consumers Insurance Company, naming her
spouse Don as the beneficiary. Beth and Don are divorced. There is no provision in the
policy about divorce. On Beths death, Consumers must
a. not pay because Don and Beth were divorced.
b. not pay because Don had no insurable interest on Beths death.
c. pay Don.
d. pay Beths estate.
Wild Alaskan sockeye salmon that fill the hold of Dexters fishing boat are fungible if
the fish are
a. alike naturally, by agreement, or by trade usage.
b. fundamentally different.
c. fun, good, and edible.
d. rotting due to a broken freezer in the hold.
Yvon, a golf pro, convinces Zach, who has no athletic ability, that he has considerable
talent and induces him to pay Yvon $10,000 for golf lessons. When Zach realizes the
truth, he files a suit against Yvon. Zach is most likely to recover on the basis of
a. duress.
b. misrepresentation.
c. unconscionability.
d. none of the choices.
Rodeo, S.A., which is based in Spain, enters into a contract for the sale of seven
hydraulic lifts to Tonnage Shipping Company, which is based in the United States. This
contract is governed by
a. Spanish law.
b. the provisions in the laws of both countries that are similar.
c. the Uniform Commercial Code.
d. the United Nations Convention on Contracts for the International Sale of Goods.
Fact Pattern 25-A1
Rollo obtains a check payable to his order from Simone. Rollo signs the back and gives
the check to Trey. Trey writes “Pay to Trey above Rollos signature.
Refer to Fact Pattern 25-1. When Trey writes “Pay to Trey above Rollos signature,
Rollos signature becomes
a. a blank indorsement.
b. a qualified indorsement.
c. a special indorsement.
d. a restrictive indorsement.
Pixie files a suit against Quiver. Before going to trial, the parties meet, with their
attorneys to represent them, to present their dispute to a third party who is not a judge
but who imposes a resolution on the parties. This is
a. arbitration.
b. mediation.
c. negotiation.
d. not a legitimate form of dispute resolution.
Nero signs a check “pay to the order of Olive drawn on Neros account in Peachtree
Bank. Olive signs the back of the check. Secondary liability on this check extends to
a. Nero and Olive only.
b. Nero and Peachtree Bank only.
c. Nero only.
d. Peachtree Bank only.
Speedy Assembly Company promises its employees a 10-percent raise at the end of the
year if productivity has increased and management feels it is warranted. Speedy must
a. do nothing.
b. give the employees a 10-percent raise only at the end of the year.
c. give the employees a 10-percent raise only if productivity increases.
d. give the employees a 10-percent raise under any circumstances.
Beth is injured in a car accident and sues Cash, alleging negligence. Cash claims that
Beth was driving more carelessly than he was. Comparative negligence may reduce
Beths recovery
a. even if Beth was only slightly at fault.
b. only if Beth was as equally at fault as Cash.
c. only if Beth was less at fault than Cash.
d. only if Beth was more at fault than Cash.
Candace enters into a contract to pay Parker for a business survey and review of
Candaces competitors, which Parker delivers on June Candaces offer, on the same date,
to pay Parker is
a. tandem.
b. tonnage.
c. tender.
d. tinder.
The Federal Emergency Management Agency (FEMA) discovers that Goodnuff
Trailers, Inc., is violating a FEMA regulation. If this situation is resolved like most such
disputes, the outcome will be
a. a negotiated settlement.
b. a trial and a fine.
c. a trial and an appeal to a higher authority.
d. a trial and the dissolution of the business.
Loren and Kendra enter into a contract for the distribution of Lorens produce to local
restaurants for which he agrees to pay Kendra. Kendra transfers her right to payment
under the contract to County Bank. This transfer is
a. a delegation.
b. an assignment.
c. an alienation.
d. prohibited.
Moby leases from National Theater Corporation a theater in which to stage a series of
concerts. Ollie buys a ticket to the series. What distinguishes Moby, a tenant, from
Ollie, a licensee, is
a. the exclusivity of possession.
b. the quiet enjoyment of rights.
c. the temporary nature of possession.
d. the title to the property.
Melissa agrees to work as Garrys personal accountant for one year but dies in the sixth
month of the contract. Melissas estate
a. is discharged from any contractual liability.
b. must find a competent accountant to fulfill the contract.
c. must pay damages.
d. must refund any money paid to Melissa on the contract.
Bay City exercises its power of eminent domain to acquire land for a public project,
including part of a mass transit monorail and a traffic bypass. Bay City relocates more
than 10,000 residents from the land and destroys their homes to begin the project. Chos
Sweet Treats is a bakery at the edge of the area. Chos loses most of its business when
the residents are moved. Chos files a suit against Bay City, alleging that the citys
acquisition of the land resulted in a taking of the bakerys property interest, entitling it to
compensation. What is a taking? What might Chos claim is its “property interest to
support this allegation? What is the court likely to rule? Why?
A Fact Pattern 17-A2
Evelyn, who owns and operates Eves Farm & Garden Company, agrees to sell Hill &
Dale Produce, Inc., fifty bushels of apples.
A strike delays delivery of the apples by ten days. Evelyns contract with Hill & Dale is
a. breached.
b. discharged.
c. not affected.
d. suspended.
Wilbur signs a note that includes a clause under which the notes holder can delay the
date of its payment indefinitely. This is
a. an acceleration clause.
b. an extension clause.
c. an immaturity clause.
d. a stop-payment clause.
Sven receives an MP3 player stolen from Tomas. To be criminally liable, Sven must
know
a. the player is stolen.
b. Tomas is the true owner.
c. how to operate an MP3 player.
d. what an MP3 player is.
Pie Sales Corporation orders ReadyMade-brand pies from Savory Foods Company.
Savory identifies the goods. Before they are shipped to Pie Sales, an insurable interest
in the goods exists in
a. Pie Sales and Savory Foods.
b. ReadyMade and Savory Foods.
c. Pie Sales and ReadyMade.
d. all of the parties as tenants in common.
Fun Toyz Corporation makes skateboards, which it sells to consumers, including
Gitana. Gitana is injured due to a defect in the board that causes an accident in which
Haley, a bystander, is also injured. In a product liability suit based on strict product
liability, Fun Toyz may be liable to
a. Gitana and Haley.
b. Gitana only.
c. Haley only.
d. no one.
Kareem writes a check for $1,000 drawn on Liberty Bank and presents it to Maris.
Maris presents the check for payment to Liberty Bank, which dishonors it. The party
most likely liable to Maris is
a. Kareem in a civil suit.
b. Kareem in a criminal prosecution.
c. Liberty Bank in an administrative proceeding.
d. the Federal Reserve.
Rikki signs a check “pay to the order of Scholar University drawn on Rikkis account in
State Bank to pay her tuition. Rikki is
a. the certifier.
b. the drawee.
c. the drawer.
d. the payee.
Simone is a manager of Rolling Hills Resort LLC, a limited liability company. Rolling
Hills is formed in a state that does not explicitly create fiduciary duties for LLC
managers but does require the exercise of good business judgment. Unless a court rules
otherwise, Simone owes fiduciary duties to
a. Rolling Hillss members.
b. Rolling Hillss suppliers.
c. Rolling Hillss customers.
d. none of the choices.
Precision Motors Corporation (PMC), a U.S. firm, expands into international markets
through a joint venture. In this venture, PMC owns
a. all of the operation.
b. as much of the operation as PMC wants.
c. none of the operation.
d. part of the operation.
Sable and Rex agree while talking on the phone to form a partnership to deal in
transfers of real property. Their partnership agreement is legally binding
a. only if a copy of the agreement is filed in the appropriate state office.
b. only if the agreement is reduced to writing.
c. only if the parties exchange valid consideration.
d. without more.
Delacroix discovers a boat adrift, and retrieves and anchors it. The boat features a
number on its side and other evidence pointing to its owner, Elvira. This is
a. an involuntary bailment.
b. a voluntary bailment.
c. an express bailment.
d. no bailment.
Fact Pattern 47-1B
Thermo Gas, Inc., and Uno Oil Corporation refine and sell gasoline and other
petroleum products. To limit the supply of gas on the market and thereby raise prices,
Thermo Gas and Uno Oil agree to buy “excess supplies from dealers and “dispose of it.
Refer to Fact Pattern 47-1B. The deal between Thermo Gas and Uno Oil is
a. a deal that neither restrains trade or harms competition.
b. a legal restraint of trade.
c. a per se violation of antitrust law.
d. subject to analysis under the rule of reason.
The payment of Hus debt to Ian is guaranteed by Hus personal property. To give public
notice of his interest in Hus property, Ian is most likely to
a. attach a bright label to Hus property.
b. e-mail other potential creditors.
c. file a financing statement with the appropriate authority.
d. publish a collection notice in local newspapers.
Woodgrain Products Company and Sylvia enter into a contract for a sale of lumber.
Woodgrain knows the purpose for which Sylvia will use the goods. Under the UCC, an
implied warranty of fitness of a particular purpose arises
a. if the buyer is relying on the seller to select suitable goods.
b. if the buyer asks for it.
c. if the seller is a merchant who deals in goods of the kind sold.
d. in conjunction with lease contracts, not sales contracts.
Fact Pattern 29-1A
Luxuro Vehicles, Inc., makes and sells automobiles to auto dealers, including
MotorPros Auto & Truck Sales. MotorPros sells the cars to consumers and businesses.
Refer to Fact Pattern 29-1A. A car in MotorPross possession is most likely
a. a consumer good.
b. an instrument.
c. equipment.
d. inventory.
Hearsay evidence is a statement made by someone who was not under oath at the time.
Remedies of the agent for breach of duty by the principal follow normal contract and
tort remedies.
No oral contract is enforceable under the UCC.
A codicil is a will substitute that avoids the cost of probate.
In a limited partnership, with the exception of the right to participate in management,
limited partners have essentially the same rights as general partners.
Federal and state laws prohibiting discrimination in employment relationships protect
employees and independent contractors.
If a person purchasing an instrument does not know and has no reason to know that it
has been dishonored, the person cannot become an HDC.
A seller is not prohibited from charging a lower price to one buyer than is charged to
that buyers competitors.
Sally and Tom decide to go into business, selling discounted merchandise through their
Web site “e-Buy. They sign a partnership agreement that requires Sally to contribute
$12,000 and Tom to contribute $8,000 in capital to start the firm. The agreement also
states that only Sally will have the authority to bind the partnership in deals with third
parties, but the agreement says nothing about the management of the firm or a division
of profits. Without Sallys knowledge, Tom tells United Computer Products, Inc., that he
represents the firm and signs a contract with United to buy hard drives for resale on
e-Buy. In the first year, e-Buy makes a profit of $50,000. What are the partners rights
with respect to the management of the firm? Is the partnership bound to the contract
with United? Do the partners split the first years profits? If so, how much is each
entitled to?
Quixotic Corporation decides to respond to what it sees as a moral obligation to correct
for past gender discrimination by adjusting pay differences among its male and female
employees. Does this raise an ethical conflict among those employees? Between the
employer and the employees? Between the corporation and its shareholders? If so, how
should it be resolved?
A sharing of profits from the ownership of property creates a presumption that a
partnership exists.
Unintentionally causing a party to break a contract may constitute wrongful interference
with a contractual relationship.
The Securities and Exchange Commission does not regulate the content of proxy
statements.
Alienation is a transfer of contract rights between citizens of different nations.
The implied warranty of habitability does not apply to substantial physical defects that a
landlord has had a reasonable time to repair.