Merchant Supply Company and National Discount Stores enter into a contract for a
lease of cash registers. Merchant assures National that it has valid title to the goods.
Under the UCC, a warranty of title arises
a. automatically in most lease contracts.
b. only if the lessee asks for such a warranty.
c. only if the lessor expresses such a warranty.
d. only in conjunction with sales contracts, not lease contracts.
Clean Health Insurance, Inc. sends Kathy a health insurance termination. The health
insurance termination is
a. governed by the E-SIGN Act.
b. not governed by the E-SIGN Act.
c. governed by Article 2 of the UCC.
d. governed by Article 2A of the UCC.
RayAnn is a corporate officer for Timmy’s Trees, Inc. As a corporate officer, RayAnn is
a. the head of the board of directors.
b. involved in the day-to-day operations of Timmy’s Trees.
c. not involved in the day-to-day operations of Timmy’s Trees.
d. in charge of selecting members of the board of directors.
Mai is a third party beneficiary under a contract between Novia and Otis. Novia and
Otis can modify or rescind their contract without Mai’s consent
a. at any time.
b. at no time.
c. after Mai’s rights have vested.
d. before Mai’s rights have vested.
National Capital Corporation and International Investments, Inc., form a joint stock
company. The ownership of a joint stock company is represented by
a. partnership certificates.
b. shares of stock.
c. title documents.
d. trust certificates.
Medico Inc. enters into a contract to sell medical supplies to New Hospital Corporation,
which sells some of the items to Physicians Clinic, which later sells them to Oscar, a
patient and consumer. Article 2 of the UCC applies to the sales transactions between
a. all buyers and sellers.
b. Medico and New Hospital only.
c. New Hospital and Physicians Clinic only.
d. Physicians Clinic and Oscar only.
The Consumer Product Safety Commission (CPSC) wants Monster Toy Company to
produce certain records for review. To obtain the records, the CPSC will issue
a. an order for specific performance.
b. a rule for parol evidence.
c. a formal complaint.
d. a subpoena.
The idea for “On Your Mark,” a computer game featuring world-class athletic
competition in extreme and unique contests, is protected by
a. copyright law.
b. patent law.
c. trademark law.
d. trade secrets law.
It is possible to copyright an idea.
Fashion Retail Center enters into a contract with Great Promotions, Inc., to provide
Fashion with a plan to retool its merchandising strategy. If Great Promotions breaches
the contract, Fashion has a duty to
a. reduce the damages that Fashion might otherwise suffer.
b. reduce the loss that Great Promotions might otherwise suffer.
c. punish Great Promotions and deter others from similar acts.
d. take no action.
OK Dry-Cleaning advertises so effectively that the regular customers of its competitor
Purity Cleaners patronize OK instead of Purity. This is
a. appropriation.
b. conversion.
c. wrongful interference with a contractual relationship.
d. no tort.
Nina is a director of Omega, Inc. Under the standard of due care owed by directors of a
corporation, Nina’s decisions must be
a. ambiguous and questionable.
b. arguable and defensible.
c. informed and reasonable.
d. perfect and unassailable.
Riley invents a new valve to cap undersea oil spills. He names the valve “Great Catch.”
He also writes the installation manual to be included with each valve. Riley can obtain
copyright protection for
a. the valve.
b. the “newness” of the valve.
c. the name.
d. the installation manual.
Optima Medico Corporation, a U.S. firm, signs a contract with Pharma Beneficial, Ltd.,
a Canadian firm, to give Pharma the right to sell Optima’s products in Canada. This is
a. a distribution agreement.
b. a joint venture.
c. direct exporting.
d. licensing.
Wrugged Woolens, Inc., a U.S. corporation, sets up a specialized marketing
organization in Scotland by appointing a foreign agent. This is called
a. direct exporting.
b. indirect exporting.
c. a joint venture.
d. piracy.
Property Management Corporation (PMC) owns several apartment buildings in two
states. Regarding standards for maintenance of the buildings, PMC should consult
a. the applicable city ordinances and state statutes.
b. the previous owners.
c. the long-term tenants.
d. the Uniform Landlords’ Maintenance Manual.
Daisy files a suit against Elton to enforce an oral contract that would otherwise be
unenforceable under the Statute of Frauds. The court could enforce such a contract if
a. Daisy foreseeably and justifiably relied on Elton’s promise to her detriment.
b. Elton denies the existence of any contract.
c. neither party has begun to perform.
d. the deal does not involve customized goods.
Under the E-SIGN Act, Phillip may use an e-signature in all of the following instances
except
a. opening an account with a financial institution.
b. obtaining a mortgage.
c. buying insurance.
d. signing his will.
Dobry Die & Mold, Inc., enters into a contract with Chet’s Refitting Service to fix
Dobry’s precisely engineered molding equipment. If Chet’s delays the repair for five
days, knowing that Dobry will lose a certain percentage of profit for the delay, Dobry
might be awarded consequential damages to
a. establish, as a matter of principle, that Chet’s acted wrongfully.
b. provide Dobry with funds for a foreseeable loss beyond the contract.
c. provide Dobry with funds for its loss of the bargain.
d. punish Chet’s and set an example to deter others from similar acts.
Veggie Grocers orders by phone twenty cartons of canned beets from Organic Food
Packers, Inc. After ten cartons are delivered and accepted, Veggie repudiates the
contract. Organic can enforce the contract to
a. any extent because the order was placed orally.
b. no extent because the order was placed orally.
c. the extent of the ten accepted cartons.
d. the extent of the twenty ordered cartons.
Transnational Corporation and United Shipping, Inc., agree to a contract that includes
an arbitration clause. If a dispute arises, a court having jurisdiction may
a. monitor any arbitration until it concludes.
b. order an arbitrator to rule in a particular way.
c. order a party to bring the dispute to court.
d. order a party to submit to arbitration.
Holiday Sales Company and Global Distributors, Inc., enter into a contract for the
delivery of imported specialty goods. Until the goods are delivered and paid for, these
parties have
a. an executory contract.
b. no contract.
c. a quasi contract.
d. an informal contract.
Via the Internet, Rocky sabotages the computer system of Quik Chik”n Company, a
food manufacturer, to alter the levels of ingredients in the
company’s products so that consumers of the food become ill. Rocky is a
a. cyberterrorist.
b. botnet.
c. virus.
d. worm.
Equipment Rental Corporation and Floodlights, Inc., are parties to an oral agreement
for a lease of goods with payments in excess of $10,000. They may satisfy the Statute
of Frauds by
a. mutually agreeing not to commit fraud.
b. restating the terms in a phone call.
c. setting out the terms in an e-mail.
d. shaking hands on the deal.
Grandview Office Suites, Inc., merges with Hilltop Commercial Properties, Inc. Only
Hilltop remains.
The articles of merger include changes that differ from Hilltop’s articles of
incorporation. The articles of incorporation
a. are deemed amended to include the changes.
b. are replaced by the articles of merger.
c. effectively prevent the merger.
d. preempt the articles of merge.
Newt is considering forms of business organization for Newton Design, an architectural
firm. An advantage of a limited liability partnership is that partners can avoid personal
liability for
a. their own wrongful acts.
b. only other partners’ malpractice.
c. only partnership obligations that exceed capital contributions.
d. only partnership obligations that fall within capital contributions.
Machine Corporation requires its employees to have a high school diploma, claiming a
definite connection between a high school education and job performance. In a suit
against Machine Corporation under Title VII, this requirement is shown to have a
discriminatory effect. The employer has
a. no defense.
b. a bona fide occupational qualification defense.
c. a business necessity defense.
d. a seniority systems defense.
Leonardo contracts to install automatic watering troughs in Kendall’s dairy barn.
Leonardo then becomes seriously ill and contracts with Jake to install the troughs. Jake
is unreliable and never shows up to install the troughs. Kendall can sue
a. no one.
b. Jake only.
c. Leonardo only.
d. Jake or Leonardo.
Ivan signs Jeb’s name, without his authorization, to the back of a check.
This is
a. no crime.
b. forgery.
c. larceny.
d. robbery.
Trucks & Trailers, Inc. (T&T), and United Delivery Service enter into a contract for a
lease of trucks. T&T is a merchant who deals in goods of the kind leased. Under the
UCC, an implied warranty of merchantability arises
a. automatically in lease contracts.
b. only if the lessee asks for it.
c. only if the lessor does not expressly disclaim it.
d. only in conjunction with sales contracts, not lease contracts.
Vance points a gun at Workman and threatens to shoot him. Workman hits Vance,
causing his death. Charged with homicide, Workman can successfully claim as a
defense
a. nothing.
b. duress.
c. entrapment.
d. self-defense.
Builders Construction Company performs a contract with Christina to add a sun porch
to her house, but she does not pay. In most states, Builders Construction could create a
lien and place it on Christina’s property by filing
a. a creditor’s composition agreement.
b. a writ of attachment.
c. a writ of execution.
d. a written notice of lien.
Restoration, Inc., contracts to repair a crack in a supporting beam for Stagecraft Theater
for $10,000. If Restoration does not perform, Stagecraft must pay
a. $10,000.
b. $5,000.
c. $1,000.
d. $0.
Mountain Bikes, Inc. (MBI), and Nero enter into a contract for a sale of a mountain
bike. MBI, a merchant who deals in goods of the kind sold, makes implied and express
warranties in connection with the sale. The Magnuson-Moss Warranty Act attempts to
prevent deception in warranties by
a. displacing the UCC as the primary source of warranty rules.
b. making warranties easier to understand.
c. prohibiting disclaimers of warranties.
d. requiring sellers to give written warranties for consumer goods.
A default judgment is a judgment entered against the party who brought the claim
before the court.
Abner owes Borrowers Bank $15,000 but refuses to pay. Borrowers wants to obtain a
garnishment order and serve it on Abner’s employer, Caf de Jeuner. What is the
procedure for obtaining a garnishment order? Is one order enough to garnish all of
Abner’s wages for each pay period until the debt is paid? Can Abner’s employer dismiss
him due to the garnishment?
Sophie is the president of Tasty Foods Corporation, a wholesale grocery company. An
inspection by Uri, a government agent, uncovers unsanitary conditions in the company’s
warehouse caused by Vic, a Tasty Foods employee. Will, a Tasty Foods vice president,
assures Uri that the situation will be corrected, but a later inspection finds that the
warehouse is still unsanitary. Sophie knows nothing about any of this. Can Tasty Foods
be convicted of a crime in these circumstances? Can Sophie be held personally liable?
A prenuptial agreement must be in writing to be enforceable.
Hoppy steals two checks from Eagle Retail Stores, Inc.a blank check and a check
payable to the order of General Supplies Company (GSC), drawn on Eagle’s account
with First National Bank. Hoppy forges Eagle’s signature on the blank check and makes
it payable to himself. Hoppy forges GSC’s indorsement on the back of the check
payable to GSC, and adds “Pay to the order of Hoppy.” At Friendly Credit, Inc., Hoppy
indorses the back of both checks with his own name and gives them to Friendly for
cash. Friendly does not know about the theft or the forged signatures and presents the
checks to First National, which pays them. Eagle, which was not negligent, discovers
the forgeries and asks First National to recredit its account. Who suffers the loss on
each check?
Defamation is one person’s use of another’s name without permission.
Common law judicial decisions that serve to protect the interests of consumers are not
classified as consumer law.
A partner always has the power and the right to dissociate from the partnership.
An installment contract is breached if a seller tenders any nonconforming goods.
A state court can dissolve a corporation for engaging in ultra vires acts.
Puffery creates an express warranty.
Floors n” More, Inc., hires Gordon to renovate Floors n” Mores showroom. Gordon
submits plans that Floors n” More approves. Gordon completes the major
reconstruction, paints the interior, and buys the fixtures and furnishings. Floors n” More
rejects some of these items because they do not match the plans, and subsequently
refuses to allow Gordon to finish the work or to collect payment. Could Gordon sue
successfully for payment for the entire contract?
A course of performance is the conduct that occurs under the terms of a particular
agreement.
The simplest form of business is a sole proprietorship.
Normally, when a nonbreaching party has been damaged by a breach of contract, he or
she does not have a duty to mitigate those damages.
Federal law does not restrict employers’ use of the results of genetics tests.
Government authorities cannot enforce national law.
Olaf, an executive with Pharma Product Distribution, Inc., has to decide whether to
market a product that might have undesirable side effects for a small percentage of
users. How should Olaf decide whether to sell the product? How does the standard of
ethics that is applied affect this answer?
A debtor is the person in whose favor there is a security interest.