Strict liability applies to the suppliers of component parts.
A U.S. citizen can bring a civil suit in a U.S. court against a U.S. entity for a tort
allegedly committed overseas.
Publishing false information about another’s product is conversion.
A signature can consist of initials signed by a party.
A lender can make a higher-priced mortgage loan based on the value of the consumer’s
home without verifying the consumer’s ability to repay the loan.
An unconditional assignment of rights in a contract does not extinguish the rights of the
assignor.
An accountant normally will be held liable to the client for incorrect judgment.
An assignment of an insurance policy can be prohibited.
A covenant not to sue is against public policy.
In some circumstances, a shareholder may petition a court to have the corporation
dissolved.
If a contract for a sale of goods does not include a price term, a reasonable price can be
determined by looking at the market for the goods.
Reformation allows a court to rewrite a contract to reflect the parties’TRUE intentions.
In most bailments, the bailor must notify the bailee of hidden defects that the bailor
knows or could have discovered with reasonable diligence.
The function of the courts is to interpret and apply the law.
A state court can exercise jurisdiction over any property within the boundaries of the
state regardless of the property owner’s location.
A covenant not to compete is enforceable only if it is necessary to restrain trade.
International law attempts to reconcile the authority of each nation over its own affairs
with its desire to benefit from trade and harmonious relations.
Dumping is the sale of imported goods at “greater than fair value.”
A security interest may attach to intangible collateral but cannot be perfected.
A principal is responsible for all intentional torts committed by an agent.
An individual director does not act as an agent to bind the corporation.
A transfer by negotiation can make it possible for a holder to receive more rights in the
instrument than its prior possessor had.
Property voluntarily discarded by its owner with no intention of reclaiming it is lost
property.
When a contract party alters a written contract, the other party must adapt his or her
performance accordingly.
A party who substantially performs his or her duties under a contract can enforce the
contract against the other party.
To pierce the corporate veil means to ignore the corporate structure, exposing the
shareholders to personal liability.
An accountant’s working papers are the documents that are used and developed during
an audit.
Under the Fourth Amendment, a general search warrant and a general search through a
person’s belongings are permitted.
A lawsuit involving a federal question can originate in a federal court.
The annual percentage rate is the actual cost of a loan on a yearly basis.
A contract for an international business deal should not specify a method of payment.
The federal government cannot regulate commerce within a state, regardless of the
effect of the commerce on other states.
Proximate cause exists when the connection between an act and an injury is strong
enough to justify imposing liability.
Shareholders’ meetings do not have to occur on any regular basis.
An agent is authorized to act on behalf of a principal in doing business with third
parties.
Adult Shoppe in Beach City sells a variety of publications, including child
pornography. Beach City enacts an ordinance prohibiting the sale of such materials.
This ordinance is most likely
A.an invalid restriction of individuals’ privacy.
B.an unconstitutional restriction of speech.
C.a violation of adults’ rights to enjoy certain privileges.
D.constitutional under the First Amendment.
Lana applies for a firefighter’s job with Metro City, which responds with a letter setting
an appointment for a medical exam. The letter also states that it is “an employment offer
conditioned on the applicant passing the exam.” This letter is
A.a bilateral contract that Lana accepted by applying for the job.
B.a quasi contract on which Lana can rely for employment.
C.a unilateral contract that Lana can accept by passing the exam.
D.no contract.
More than thirty days after Rhett receives his account statement from Silverado Bank,
he notifies the bank that Thalia forged Rhett’s name on some of the checks that the bank
has cashed. The majority in Prestridge v. Bank of Jena would most likely hold
Silverado liable for
A.all checks.
B.checks that were cashed less than thirty days after the statement.
C.checks that were cashed more than thirty days after the statement.
D.no checks.
Della, an officer for Energy Petrol Corporation (EPC), buys 100 shares of EPC stock.
One week later, EPC announces that it will merge with a competitor, Fuel Oil Company,
and the price of EPC stock increases. One month later, Della sells her shares for a
profit. Under Section 16(b) of the Securities Exchange Act of 1934, Della would not be
liable if, after buying the stock, she had waited
A.less than fourteen days to sell it.
B.more than six months to sell it.
C.ninety days to sell it.
D.two months to sell it.
Tom and Sydney enter into a contract for the sale of Tom’s house for which Sydney
agrees to pay $350,000. Sydney wants to transfer her right to the ownership of the
house to Rena, her niece. This transfer generally
A.cannot be prohibited.
B.cannot be allowed.
C.can be prevented.
D.can be circumvented.
Thirty-one days before filing a petition in bankruptcy, Frida transfers property and
makes payments that favor one creditor over another. These are
A.affirmation agreements.
B.preferences.
C.secured interests.
D.unsecured debts.
Amigos, Ltd., and Bueno, S.A., are Chilean firms. Amigos owns a majority of the
shares of Bueno. The government of Chile owns a few shares of Amigos. Under the
decision in Dole Food Co. v. Patrickson, parties who are immune from suit in U.S.
courts under the Foreign Sovereign Immunities Act, as instrumentalities of foreign
states, would include
A.Amigos and Bueno.
B.neither Amigos nor Bueno.
C.only Amigos.
D.only Bueno.
Corbin, a partner in Doctors Medical Clinic, applies for a loan with Evermore Bank
allegedly on Doctors’ behalf but without the authorization of the other partners.
Evermore knows that Corbin is not authorized to take out the loan. Corbin defaults on
the loan. Liability for its unpaid amount is imposed on
A.Corbin and Doctors, jointly.
B.Corbin only.
C.Doctors only.
D.Evermore only.
Carl sells Direct Marketing Enterprises, a sole proprietorship, to Eve. This is a transfer
of
A.a license.
B.a trade name.
C.the formula to make a product.
D.the ownership of the business.
Jake is charged with embezzlement. Embezzlement is not robbery because
embezzlement may be committed without
A.a criminal act.
B.a criminal intent.
C.taking property from its owner.
D.the use of force or fear.
Unity Production Company is suspected of employing illegal immigrants. The
government conducts random compliance audits and other enforcement measures
against those who might violate immigration laws through
A.the CIS.
B.the H1-B.
C.the ICE.
D.the NLRB.
On Monday, Eve deposits in her account at Fiscal Bank a local check for $500. After
5:00 p.m. on Friday, from these funds, Eve can withdraw no more than
A.$100.
B.$400.
C.$500.
D.$600.
To avoid liability for intentional injuries, Vermont Power Corporation includes in its
contracts an exculpatory clause. This is
A.enforceable if the other parties are protected from liability.
B.enforceable if the other parties consent to it.
C.enforceable if the other parties have equal bargaining power.
D.not enforceable.
Claudia enters into a contract with Bayside Inn to provide Bayside’s guests with
complimentary breakfast foods. When a dispute arises over the terms of their contract,
Bayside files a suit against Claudia. If the contract’s writing is clear and unequivocal, a
court will
A.enforce it according to its obvious terms.
B.give greater consideration to standardized terms.
C.give greater consideration to general language.
D.interpret it against the party who did not draft the contract.
Raw Material, Inc., and Sewn Fabric Corporation enter into a contract for a sale of
muslin. The terms do not clearly indicate whether it is a destination or shipment
contract. A court would most likely presume that it is
A.a bailment contract.
B.a destination contract.
C.a shipment contract.
D.a transportation contract.
Orin enters into a contract with Natalie. Later, Orin is adjudged mentally incompetent
and Moseby is appointed Orin’s guardian. Lila, Orin’s daughter, attempts to void Orin’s
contract with Natalie on the ground of Orin’s incompetency. The contract is
A.enforceable if Orin does not attempt to disaffirm it.
B.enforceable if Natalie is also incompetent.
C.enforceable if Moseby knew of the contract when he was appointed.
D.void.
Cielo is fifteen. In most states, Cielo would be considered a minor because she is under
the age of
A.sixteen.
B.eighteen.
C.twenty.
D.twenty-one.
Dot, a real estate agent, tells Elbert, a home seller, that her commission is 12 percent.
Elbert agrees that Dot can sell his house but refuses to sign a contract unless the amount
of the commission is reduced. After the house is sold, Elbert refuses to pay 12 percent.
Dot is most likely to recover
A.nothing.
B.on a theory of an express contract.
C.on a theory of an implied contract.
D.on a theory of quasi contract.
Jody is an agent for Insta Cross Country Trucking Inc. In the course of Jody’s
performance for the firm, Jody pays Heck for certain vehicle maintenance and repair
services. Jody’s right to obtain the amount of those payments from Insta arises under the
principal’s duty of
A.avoidance.
B.cooperation.
C.indemnification.
D.reimbursement.
Genna is a director of Fashion NOW Corporation. Without informing Fashion NOW,
Genna starts up Evertrendy, Inc., to compete. Genna is liable for breach of
A.no duty or rule
B.the business judgment rule.
C.the duty of loyalty.
D.the right of participation.
Via the Internet, Rocky sabotages the computer system of Quik Chik’n Company, a food
manufacturer, with the purpose of altering the levels of ingredients of the company’s
products so that consumers of the food become ill. Rocky is
A.a cyberterrorist.
B.a botnet.
C.a virus.
D.a worm.
Olin convinces Pia, who has no artistic ability, that Pia has considerable talent and
induces Pia to pay Olin $10,000 for art lessons. When Pia realizes the truth, she files a
suit against Olin. Pia is most likely to recover on the basis of
A.fraud.
B.mistake.
C.undue influence.
D.none of the choices.
Jelly Jar Company includes in its online offers a provision that indicates any disputes
arising under the contract must be resolved in Kansas. Lena, a resident of Maine,
accepts Jelly Jar’s offer. If a dispute arises, a court will most likely rule that it must be
resolved in
A.Kansas.
B.Kansas or Maine.
C.Maine.
D.the location selected by the first party to file a suit.
Bubbly Cola features Sparkly Cola’s trademark without its owner’s permission.
Bubbly’s use of the mark is actionable provided
A.consumers are confused.
B.Bubbly’s use is intentional.
C.Bubbly’s use reduces the value of Sparkly’s mark.
D.Sparkly’s mark is registered.
Fiona owns one share of stock in GR8 Boards Corporation, as evidenced by a stock
certificate. Fiona loses the certificate. Her ownership of the stock is
A.forfeited immediately.
B.forfeited within ten days of a third party’s claim to ownership.
C.forfeited within thirty days if she cannot find the certificate.
D.not affected.
Fact Pattern 9-1
Dave’s Hobby Town and Eva’s Yarn Shoppe are adjacent stores with adjoining parking
lots. Dave offers Eva a discount on purchases from Dave’s store if Eva will not tow the
cars of Dave’s customers who park in Eva’s lot.
Refer to Fact Pattern 9-1. Eva’s forbearance from towing is legally sufficient
consideration
A.because it is a promise of something of value.
B.only if Dave’s customers park in Eva’s lot.
C.only if Eva’s customers cannot park in her lot because it is full.
D.under no circumstances.
Opie offers to sell his guitar to Pinky for $100. Pinky agrees and writes a check payable
to the order of Opie for the price. This check is
A.a formal contract.
B.an informal contract.
C.a social contract.
D.no contract.
Wild & Scenic River Tours, Inc., is a corporation. Wild & Scenic has the implied power
to
A.issue stocks and bonds.
B.execute contracts and negotiable instruments.
C.buy and sell (or lease) property.
D.perform all acts reasonably appropriate and necessary to accomplish its corporate
purposes.
Timber Mills Corporation and Ur-Choice Lumberyards enter into a contract for a sale of
plywood. Under a destination contract, the seller must
A.allow the buyer to reject the goods for any reason.
B.deliver the goods to a particular destination.
C.inspect the goods before tendering their delivery.
D.place the goods into the hands of a carrier.
Chiang Ltd., a Chinese firm, imports its goods into the United States and offers those
goods for sale at “less than fair value.” This is
A.confiscation.
B.defalcation.
C.dumping.
D.expropriation.