Cara is a bankruptcy trustee. As a bankruptcy trustee, Cara cannot
a. cancel fraudulent transactions made by the debtor within two years of the filing of the
petition.
b. ask the court for a writ of execution.
c. avoid preferences.
d. pay the lowest priority creditors first.
Nero and Oona negotiate a contract. Nero prints out a hard copy to review before both
parties sign the electronic form of the contract. Neither party signs the hard copy. Under
the Electronic Signatures in Global and National Commerce Act (E-SIGN Act), the
signatures can
a. be denied effect because they are in electronic form.
b. be denied effect because Nero has not signed a hard copy.
c. be denied effect because Oona has not signed a hard copy.
d. not be denied effect because they are in electronic form.
Ross makes out a will in which Steve is appointed to administer the will. After Ross
dies, Steve cannot administer the will, and a court appoints Terry to handle the probate
of Ross’s estate. In this situation, the executor is
a. Ross.
b. Steve.
c. Terry.
d. the court.
Financial Services Company and Steve’s Landscaping, Inc., sign a written contract that
does not involve a sale of goods. To be enforceable, this written contract must include
a. a correct title, such as “Service Contract.”
b. all non-essential terms.
c. a statement of the consideration.
d. the addresses of the parties.
Paris knowingly divulges to Media Exposure magazine information about Randy’s
e-money payments to City Bank. The payments were in transmission to City Bank
when Paris, without the consent of Randy or City Bank, discovered and revealed them.
This may be a violation of
a. the Electronic Communications Privacy Act.
b. the Federal Reserve Board’s Regulation E.
c. the Right to Financial Privacy Act.
d. the Uniform Electronic Transactions Act.
Roslyn is an inventor. She has many tools, including a hammer, a handsaw and a drill.
Roslyn has a patent on her most recent invention and she owns stock in Handy
Appliances, Inc., which is a company that often uses her inventions. Roslyn’s tangible
personal property includes the
a. hammer, handsaw and drill.
b. Handy Appliances stock only.
c. patent on her invention only.
d. Handy Appliances stock and the patent on her invention.
Megan, a resident of Ohio, runs a red light in Texas and hits Sarah, a Texas resident.
Sarah files suit against Megan. The statute that allows the Texas court to exercise
jurisdiction over Megan is called a(n)
a. long arm statute.
b. in personam statute.
c. in rem statute.
d. out-of-state jurisdiction statute.
Kris presents an instrument that states “pay to the order of Kris” to Metro Bank for
payment. This is a special type of draft drawn on a bank, ordering the bank to pay a
fixed amount of money on demand. This is
a. a commercial wire transfer.
b. a check.
c. a debit card transaction receipt.
d. a cash transaction
Scott presents an instrument that states “pay to the order of Scott” to Town Bank for
payment. This instrument is the most common type of negotiable instrument, which is
a. a commercial wire transfer.
b. a check.
c. a note.
d. a substitute check.
Dani is considering forms of business organization for her financial advisory firm. Like
most states, Dani’s state requires that to form a limited liability company, she must file
with a central state agency
a. articles of certification.
b. articles of formation.
c. articles of organization.
d. no specific documents.
Gina, a minor, enters into a contract to buy a tractor from Herb, an adult. If the deal is
set aside, restoring Gina and Herb to their original positions prior to a contract is
a. ratification.
b. emancipation.
c. disaffirmance.
d. restitution.
Yokio, Ltd., and Zeno, S.A., transact an international sale of goods. At the request of
these parties, a court in Portugal resolves a dispute between them. A U.S. court will
most likely honor the judgment
a. if it is consistent with U.S. laws and public policy.
b. if it is consistent with Portuguese laws and public policy.
c. if it does not benefit the U.S. to deny it.
d. under no circumstances.
Leo buys a bicycle from his brother, Mike, who is a used car dealer. Mike agrees to
keep the bike at his house until Leo picks it up. A tree falls on Mike’s garage and
destroys the bike. The loss is suffered by
a. Leo and Mike.
b. Leo only.
c. Mike only.
d. neither Leo nor Mike.
The U.S. Patent and Trademark Office (USPTO) wants to review certain records of
Verity Corporation. The USPTO can gain access to the records through
a. a subpoena only.
b. neither Verity’s consent nor a subpoena.
c. Verity’s consent only.
d. Verity’s consent or a subpoena.
Machismo Motor Sales Corporation regularly advertises its off-the-road vehicles,
all-terrain vehicles, and other products. Under the First Amendment, these ads and other
commercial speech are given
a. less extensive protection than noncommercial speech.
b. more extensive protection than symbolic speech.
c. no protection.
d. the same protection as defamatory speech.
Fact Pattern 42-1
Cardio, Inc., makes and sells Drawdown, the most prescribed name-brand heart
medication. Emitate Corporation has the potential to make a generic version of the
same drug.
Refer to Fact Pattern 42-1. Cardio pays Emitate not to sell its product. This is
a. a customer restriction.
b. a joint venture.
c. an exclusive-dealing contract.
d. a price-fixing agreement.
Jared has a mortgage loan that has a prepayment penalty clause. If Jared repays his
mortgage within the period specified in the clause he will
a. have to pay a penalty.
b. get money back from the lender.
c. be prevented from getting another mortgage for one year.
d. get a bad credit rating.
Ed and First Star Company enter into an oral contract under which Ed agrees to provide
delivery service for First Star for nine months. This contract is enforceable by
a. Ed only.
b. either party.
c. First Star only.
d. neither party.
Amy does not create a will before she dies. Amy dies with no heirs. Her property
a. escheats.
b. terminates.
c. will be given to charity.
d. abates.
Jared writes Lisa a check for $500. Because the check does not specify a time of
payment, it is considered a
a. certificate of deposit.
b. demand instrument.
c. nonnegotiable instrument.
d. promissory note.
Ann rents an apartment from Best Home Properties. The apartment is destroyed in a fire
that is not the fault of either party. For the rest of the lease term, Ann
a. is entitled to payment of the amount of the rent from Best Home.
b. is no longer obligated to pay any of the rent.
c. must continue to pay the rent, in a reduced amount.
d. must continue to pay the rent, in the full amount.
Expert Stitching Corporation enters into a contract to sell denim clothing to Fine
Fashion Company, which in turn sells a pair of jeans to Grady, a consumer. In contrast
to standards that apply to consumers, the UCC imposes on merchants
a. less strict legal standards.
b. special business standards.
c. stricter ethical standards.
d. the same overall standards.
California enacts a statute to ban advertising in “bad taste.” This statute would likely be
held by a court to be
a. an unconstitutional restriction of speech.
b. constitutional under the First Amendment.
c. justified by the need to protect individual rights.
d. necessary to protect national interests.
Rodney signs a contract with Stan, a door-to-door salesperson for Tutors, Inc., to buy a
foreign-language course. To cancel the contract, Rodney has up to
a. three business days.
b. thirty business days.
c. sixty calendar days.
d. ninety calendar days.
Dhani is the beneficiary of a life insurance policy on Elmo’s life obtained from Famed
Insurance Company. The insured under this policy is
a. Dhani.
b. Elmo.
c. Famed.
d. the agent or broker through whom the policy was obtained.
Rikki signs a check “pay to the order of Scholar University” drawn on Rikki’s account
in State Bank to pay her tuition. Rikki is
a. the certifier.
b. the drawee.
c. the drawer.
d. the payee.
The payment of Frida’s debt to Gianini is guaranteed by Frida’s personal property.
Gianini is
a. a debtor.
b. a secured party.
c. a secured transaction.
d. a security interest.
Master Manufacturing Corporation has exclusive control over the market for its
product. Under the Sherman Act, this is
a. a per se violation.
b. a violation if it acquired this power through “business acumen.”
c. a violation if it acquired this power through “anticompetitive means.”
d. not a violation.
Clear Day Company, which is based in Delaware, agrees to sell fifty windows,
currently stored in Florida, to Far Vu, Inc., which is based in Hawaii. Absent an
agreement to the contrary, the place of delivery is in
a. California.
b. Delaware.
c. Florida.
d. Hawaii.
In 2013, Congress enacts the Act to Restrict Commercial Speech (ARCS). The ARCS
will be considered valid
a. if it directly advances a substantial government interest but goes no further than
necessary.
b. if it directly advances a substantial government interest regardless of how “far” it
goes.
c. under any circumstances.
d. under no circumstances.
Ric designs a new tablet computer, which he names “Sci Phi.” He also writes the
operating manual to be included with each final product. Ric could obtain patent
protection for
a. the tablet computer.
b. the “newness” of the tablet computer.
c. the name.
d. the operating manual.
Horizon Corporation makes cell phones. Inez files a product liability suit against
Horizon, alleging a design defect. In deciding whether to hold Horizon liable, the court
may consider an alternative design’s
a. popularity among industrial designers.
b. attractiveness to consumers.
c. aesthetics.
d. effect on the product.
Southwestern Foods Corporation operates a packaging plant near the border between
the United States and Mexico. Due to the location, it would be easier for Southwestern
to employ noncitizens. With respect to persons not authorized to work in the United
States, an employer can
a. hire them.
b. recruit them.
c. refer them for a fee.
d. not hire them, recruit them, or refer them for a fee.
Elvin publishes a book titled First Place, which includes a chapter from Frank’s
copyrighted book Great Racecar Drivers. Elvin’s use of the chapter is actionable
provided
a. consumers are confused.
b. Elvin’s use is intentional.
c. Elvin’s use reproduces Frank’s chapter exactly.
d. Elvin does not have Frank’s permission.
The simplest way for a U.S. firm to do business in a foreign market is to export its
products directly to that market.
Under the UCC, a seller’s tender of goods that do not conform in every way to a
contract is still a valid tender.
An installment contract is breached if a seller tenders any nonconforming goods.
An oral agreement to form a partnership can never be enforced.
Under the Statute of Frauds, oral contracts are void.
Under the Statute of Frauds, an oral contract for the transfer of a mortgage is
enforceable.
A transfer of contract rights to a third party is a delegation.
Bubbly Bottling Company is engaged in the soft-drink bottling and distribution industry
in the states of New York and New Jersey. The firm currently has about 40 percent of
the market for these products and related services. Carbonate Distribution Corporation
competes with Bubbly in the same states. Carbonate has about 35 percent of the market.
If Bubbly were to acquire the stock and assets of Carbonate, would Bubbly be in
violation of any of the antitrust laws? If so, which one? Discuss fully.
To be negotiable, an instrument must be payable in a certain amount.
A contract is sometimes voidable if one party is aware that the other party made a
mistake of fact.
Federal law does NOT restrict employers’ use of the results of genetics tests.
Primary liability is unconditional.
A business firm may have to comply with the laws of any jurisdiction in which it
actively targets customers.
The Second Amendment to the U.S. Constitution reserves all powers not delegated to
the national government to the states.
If the goods or their tender fail to conform to the contract, the buyer can accept part and
reject part.
A mechanic’s lien can be enforced to obtain payment for work that adds value to real
property.
Real estate brokers are independent contractors.
Sara needs $1,500 to buy textbooks and other school supplies. Tomas agrees to loan
Sara $1,500, accepting as collateral Sara’s car. They put their agreement in writing and
sign it. Sara keeps possession of the car. Does Tomas have an enforceable security
interest? How can Tomas let other creditors know of his interest in the car?
An invitation to negotiate”can you afford this?”is an offer.