Kay and Leo copy and exchange MP3 music files over the Internet without anyones
permission. With respect to songs owned by Natural Recording Company, this is
a. copyright infringement.
b. fair use.
c. licensing.
d. protected expression.
On Tims eighteenth birthday, he decides that he no longer wants to keep a car he bought
from Woodys Autos, Inc., when he was seventeen. His right to disaffirm the deal will
depend on
a. the cars condition when Tim bought it.
b. the cars current condition.
c. whether Tim acts within a reasonable period of time.
d. whether Woodys has the right to disaffirm.
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, the
check becomes
a. a bearer instrument.
b. an order instrument.
c. a promissory note.
d. a nonnegotiable instrument.
Fred misstates his age in applying for a life insurance policy with Gamma Insurance
Company. Due to this “error, Gamma can
a. adjust the amount of the premium or the benefits.
b. cancel the policy.
c. file criminal charges against Fred for fraud.
d. “misstate the amount payable to the policys beneficiary.
Fact Pattern 14-B4
Pete, the owner of Quality Orchards, contracts to sell fruit to Ripe Produce, Inc. When
Pete refuses to perform, Ripe Produce files a suit to enforce the contract.
If Pete and Ripe Produce are in a state that does not recognize the doctrine of
unconscionability, to defend successfully against enforcement of the contract on similar
grounds, Pete might rely on traditional notions of
a. fraud.
b. materiality.
c. mistake.
d. unconscionability.
Burger Heaven, Inc., conducts a chain-style franchise. This involves the transfer to
Chester, one of its franchisees, of
a. a license.
b. a trade name.
c. the formula to make a product.
d. the ownership of the business.
Giant Lift Corporation purchases all of the assets of Heavy Hydraulics Corporation.
With respect to Heavy Hydraulicss liabilities, Giant Lift is
a. automatically responsible.
b. not responsible under any circumstances.
c. responsible if Heavy Hydraulics is a competitor of Giant Lift.
d. responsible if the sale is actually a merger or consolidation.
Fact Pattern 25-1B
Belle obtains a check payable to her order from Charmayne. Belle signs the back and
adds the notation “without recourse.
Refer to Fact Pattern 25-1B. After Belle signs the back and adds the notation “without
recourse, she adds “Pay to Desiree. This constitutes
a. a blank qualified indorsement.
b. a special qualified indorsement.
c. a restrictive indorsement.
d. none of the choices.
Timber Products Corporation and 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.
Baksheesh owns a house. In the house, on a tile floor is a throw rug. Most likely to meet
the definition of a fixture is
a. the house.
b. the throw rug.
c. the tile floor.
d. none of these choices.
Royal Properties, Inc., mails a flyer to hundreds of firms, advertising a building for sale.
Standard Manufacturing Company responds by saying, “We accept your offer. Between
Royal and Standard, there is
a. a contract for the sale of the building.
b. a contract to consider the offer before any others.
c. a contract to negotiate a sale of the building.
d. no contract.
Ada mistakenly pays property taxes that should have been assessed against Bud. Ada
can recover the amount from Bud in quantum meriut
a. even if Bud was not aware of the error.
b. only if Bud tried to conceal the error.
c. only if Bud was aware of the error.
d. under no circumstances.
The Motor Vehicle Insurance Association wants the federal government to spend money
to build a new highway. Congress can spend revenues
a. only to carry out Congresss enumerated powers.
b. to promote any objective that Congress deems worthwhile.
c. without regard to whether the expense violates the Bill of Rights.
d. without regard to whether the expense violates the Constitution.
Chemco Sales, Corporation wants to monitor its employees electronic communications.
To avoid liability under laws related to employee monitoring, Chemco should notify
a. no one.
b. the employees.
c. the government.
d. the public generally.
The Constitution sets out the authority and the limits of the branches of the government.
The term checks and balances means that
a. Congress writes checks and the other branches balance the budget.
b. each branch has some power to limit the actions of the others.
c. the courts balance their authority to the other branches checklists.
d. the president “checks the courts, which “balance the laws.
Mona lives in New Jersey, but she works in New York. Mona borrows $1,000 from
National Bank, using her motorcycle as collateral. To perfect its security interest, the
bank must file its financing statement in at least
a. every state.
b. New Jersey.
c. New Jersey and New York.
d. New York.
DeLouse Plastics Corporation pays its executives an excessive amount relative to other
employees and to what executives at competitive companies are paid. This is most
likely to be challenged as
a. illegal and unethical.
b. illegal only.
c. neither illegal nor unethical.
d. unethical only.
Mona asks Ned if she can store her furniture in his garage while she serves a tour of
duty with the U.S. Marines Corps. Ned agrees. This is a bailment for
a. neither partys benefit.
b. the parties mutual benefit.
c. the sole benefit of the bailee.
d. the sole benefit of the bailor.
Fact Pattern 17-A1
Mutual Company enters into a contract to employ Neil as an investment manager for
two years. During the first year, Neil is often absent without explanation and when
present fails to adequately monitor and manage Mutuals investments. With respect to
Mutuals duties, Neils performance most likely
a. discharges Mutual from the contract.
b. has no effect on Mutuals performance.
c. increases Mutuals duties under the contract.
d. suspends Mutuals duty to perform.
Iona files a suit against Javier for conversion of property that Javier asserts he owns.
Javier will not be liable if he can show that
a. Iona has no intent to use the property.
b. Iona has no interest in the property.
c Javier did not damage the property.
d. Javier did not intend to keep the property.
Biff signs a note “payable to the order of County Credit Union. Unless Biff has a valid
defense against payment, Biffs liability on this note is
a. lateral.
b. primary.
c. secondary.
d. tertiary.
Eighty-year-old Clark exhibits confusion, forgetfulness, and disorientation. To Clarks
doctor Dave, the symptoms indicate dementia. Elsa, who has significant contact with
Clark, believes that he is in a state of mental decline. These facts indicate
a. an urgency that Clark distribute his assets.
b. Clarks lack of capacity.
c. Daves misdiagnosis.
d. Elsas intent to take advantage of Clark.
Engine Components, Inc., a manufacturer of vehicle parts, refuses to sell to Fix-It, Inc.,
a national vehicle service firm. Engine Components convinces Greasy Motor Parts
Company, a competitor, to do the same. This is
a. a group boycott.
b. an exclusive-dealing contract.
c. a price-fixing agreement.
d. a tying arrangement.
Oak Valley Mall contains two video game stores, Pirates Pick and Game Quest. Piratess
manager Ryan stands in the mall near Game Quests entrance to divert customers to his
store. Game Quests manager Sara asks Ryan to leave. He refuses. Ryan has committed
a. conversion.
b. no tort.
c. trespass to land.
d. wrongful interference with a business relationship.
Luke is a director of Motor Parts Corporation. Luke makes decisions with respect to
Motor Parts in good faith, in what Luke believes is the firms best interest, and without
violating any duties owed to it. If, despite these circumstances, Luke exercises poor
business judgment, under the business judgment rule Luke is
a. immune from liability.
b. liable only to the extent that Luke gains as a result.
c. liable only to the extent that Motor Parts suffers as a result.
d. wholly liable.
Garden & Yard Landscaping and Penelope enter into an oral contract under which she
agrees to work on a Garden & Yard project on Valley Country Clubs golf course for
sixteen months. This contract is enforceable by
a. Garden & Yard.
b. Penelope.
c. any interested third party, such as Valley Country Club.
d. none of the choices.
Corner Market sells groceries. Delite Food & Drug Store sells groceries and fills
prescriptions. The party with the chief responsibility to prevent unsafe food and drugs
from being sold is
a. Corner Market and Delite Food & Drug Store.
b. Delite Food & Drug Store only.
c. the Federal Trade Commission.
d. the Food and Drug Administration.
Excel Autos & Trucks, Inc., contracts to sell five trucks to First Leasing Corporation,
which contracts to lease the trucks to General Delivery Company. Article 2A of the
UCC applies to
a. neither the lease nor the sale.
b. the lease and the sale.
c. the lease only.
d. the sale only.
George and Hildy disagree as to the exact amount one owes the other. They form a new
agreement that, on fulfillment, will discharge the prior obligation. This is
a. a covenant not to sue.
b. an accord and satisfaction.
c. a release.
d. promissory estoppel.
Laurel borrows $150,000 from Marketplace Mortgage Loans to buy a home. The
financing documents require Laurel to maintain the property, obtain homeowners
insurance, and pay all property taxes and other assessments through the lender. With
respect to these terms, a court is most likely to
a. enforce them.
b. refuse to enforce them.
c. rescind them.
d. rewrite them.
Dakota believes that Credit Services Corporation (CSC) has discriminated against her
on the basis of gender. She files a suit against CSC under the Civil Rights Act of 1964.
To establish a prima facie case of employment discrimination, Dakota must show that
a. she is a member of a protected class.
b. CSC has no legal defenses against the claim.
c. discriminatory intent motivated CSCs act.
d. no other firm in CSCs industry has committed a discriminatory act.
If property is owned as community property, a spouse owns an undivided one-half
interest in it.
Baby Products, Inc., hires Cole to develop and implement an e-commerce strategy for
marketing Babys products. Cole signs a contract that includes a clause prohibiting him
from competing with Baby during and after the employment. Before the strategy is
implemented, Cole resigns from Babys employ and opens a business to compete with
Baby. In Babys suit against Cole, to determine whether Cole may compete with Baby,
what is the most important factor the court should consider?
A minor may disaffirm a contract for necessaries and avoid liability for the reasonable
value of the goods.
If the parties to a contract attach materially different meanings to a contract term, the
contract cannot be rescinded.
A stolen credit card is more likely to hurt a consumer than a merchant.
Many qualifications are required for directors.
Extraordinary difficulties that were unforeseen at the time a contract was formed do not
justify a demand for additional compensation.
A reference to “28 U.S.C. Section 1332 means that a statute can be found in section
1332 of title 28 of the United States Code.
Puffery constitutes deceptive advertising.
The duties and obligations under the terms of a contract include those specified by
custom.
It is always wrong to disclose material, nonpublic information about a company to a
person who would not otherwise be privy to it.
Confiscating property without compensation does not normally violate principles of
international law.
A joint tenants sale of his or her interest terminates the tenancy.
Administrative agencies generally exercise substantial discretion over the type of
hearing procedures that they use.
Normally, fraud occurs only when there is reliance on a statement of truth.
Normally, if employees are informed that their communications are being monitored,
they cannot expect those communications to be private.
The Civil Rights Act of 1964 does not prohibit job discrimination in the hiring process.
A suggestive use of ordinary words may not be trademarked.
Foreclosure is the postponement, for a limited time, of part or all of the payments on a
loan in jeopardy of repossession and sale.