Albert wants to build a new house, but he needs to borrow money to do so. Albert
should obtain
a. a balloon mortgage.
b. an interest-only mortgage.
c. a subprime mortgage.
d. a construction loan.
Nimble Numbers Accounting Corporation, a private employer, handles bookkeeping for
small employers. In most circumstances, with exceptions, federal law clearly prohibits
Nimble from subjecting its employees to
a. job-skills tests.
b. monitoring of business communications.
c. drug tests.
d. lie-detector tests.
Carol files a suit against Andy in a state trial court and loses. Carol
a. cannot take her case any higher in the court system.
b. can insist that the United States Supreme Court hear her case.
c. can plead her case before an appellate court.
d. can plead her case before a small claims court.
Brad stands in front of Rooster’s Round-Up Caf, shouting “fighting words” that are
likely to incite Rooster’s patrons to respond violently. The First Amendment protects
such speech
a. all of the time.
b. none of the time.
c. only if it is noncommercial.
d. only if it is symbolic.
Smitty, driving while intoxicated, causes a car accident that results in the death of
Tiffany. Smitty is arrested and charged with a felony. A felony is a crime punishable by
death or imprisonment for
a. any period of time.
b. more than one year.
c. more than six months.
d. more than ten days.
Paul wants to lease a condo for two years from Cool Condos Company. In most states
the lease agreement
a. must be in writing.
b. can be oral or written.
c. must be oral.
d. must be signed by a judge.
Boz runs an illegal gambling business and pays Colin, a police officer, not to interfere.
The payments are discovered. Boz and Colin are sent to prison. With respect to the
amount of the payments, Boz can recover
a. all of it.
b. none of it.
c. only as much as Colin has not spent.
d. only as much as Colin has spent.
Dave leases a bulldozer from Construction Rentals, Inc. Wilson from Construction
Rentals delivers the bulldozer to Dave, but does not collect any money. Sally from
Construction Rentals picks up the bulldozer from Dave and collects the payment for the
lease from Dave on behalf of Construction Rentals. In this situation the lessee is
a. Wilson.
b. Dave.
c. Sally.
d. Construction Rentals.
Barb, a minor, takes out a loan from City Bank, noting on the loan application that she
plans to use the money to rent an apartment. City makes the loan but does not monitor
how the money is spent (and thus fails to learn that Barb uses it to buy an entertainment
center). The loan is
a. a necessary that Barb must repay.
b. a necessary but Barb need not repay it.
c. not a necessary but Barb must repay it.
d. not a necessary and Barb need not repay it.
The payment of Eric’s debt to Ryan is guaranteed by Eric’s 2002 Volkswagen Bug. Ryan
filed the financing statement on July 1, 2012. If Ryan does nothing else, the financing
statement will be effective until
a. July 1, 2013.
b. July 1, 2014.
c. July 1, 2017.
d. July 1, 2022.
The Uniform Commercial Code has been adopted, at least in part, in
a. all states.
b. forty-five states.
c. thirty-five states.
d. no state.
Venture Capital, LP, is a limited partnership. A Venture limited partner loses his or her
limited liability if he or she
a. acts as the firm’s manager.
b. has full awareness of the firm’s business activities.
c. invests in the firm’s competitor.
d. votes on the firm’s sale or dissolution.
The government of Japan sets a limit on the amount of rice that can be imported from
the United States. This is
a. a dumping duty.
b. an antidumping duty.
c. a quota.
d. a tariff.
Bill and Stacy enter into a contract that falls within the provisions of the UETA. Under
the UETA, “information that is inscribed on a tangible medium or that is stored in an
electronic or other medium and is retrievable in perceivable form” is
a. an e-document.
b. an e-signature.
c. an e-transaction.
d. a record.
Marie claims that a Nebraska state statute infringes on her “procedural due process”
rights. This claim focuses on
a. procedures used in making decisions to take life, liberty, or property.
b. the content of the statute.
c. the similarity of the treatment of similarly situated individuals.
d. the steps to be taken to protect Marie’s privacy.
Lenore is the sole proprietor of Mall Kiosks. With respect to contracting for her own
business interests, Lenore is
a. an agent and has the authority.
b. an agent but does not have the authority.
c. not an agent and does not have the authority.
d. not an agent but does have the authority.
Jason and Thomas have a dispute. Instead of taking a lawsuit to court, Jason and
Thomas present their dispute to a third party who then makes a legally binding decision
regarding the dispute. Jason and Thomas have settled their dispute through
a. negotiation.
b. arbitration.
c. mediation.
d. online dispute resolution.
When a conflict arises among the documents that involve Fast Flights Corporation, the
first priority for resolving the conflict is given to
a. resolutions of the board of directors.
b. Fast Flights’s bylaws.
c. state statues.
d. the U.S. Constitution.
Thor Power Products Corporation permits its directors to be elected by cumulative
voting. This
a. allows minority shareholders to be represented on the board.
b. assures directors that they will be selected by their peers.
c. guarantees Thor’s executive officers of the final choice.
d. ensures against persons who may “cloud” the corporate direction.
Peter borrows $5,000 from Willy in a secured transaction using Peter’s sports car as
collateral. Peter then borrows $7,000 from Jane using the same sports car as collateral.
Neither Willy nor Jane perfects their security interests. Peter defaults on the loans. The
party with priority is
a. Willy, because his interest was the first to attach.
b. Jane, because Peter owes her more money.
c. Jane, because her interest was the second to attach.
d. Willy, because Peter owes him less money.
Rolf is an emergency medical technician. Medical personnel such as Rolf are prohibited
by state statute from working more than a certain number of consecutive hours. One
month, Rolf works more than the legal limit. Rolf
a. must resign from his job.
b. can recover for the extra hours of service.
c. both a and b.
d. none of the choices.
Cool Fruit, Inc., ships a boxcar-load of fruit cross-country to Dandy Grocers, Inc., for
$8,000. Cool e-mails that it will accept $7,000 in full payment. After Dandy pays
$7,000, Cool files a suit against Dandy for another $1,000. Under the E-SIGN Act, Cool
is most likely entitled to
a. an additional $15,000.
b. an additional $7,000.
c. an additional $1,000.
d. nothing more.
Jack buys Jill’s house for $1.00. If the contract is later disputed in court, the court is
likely to declare Jack’s consideration
a. unconscionable.
b. legally sufficient.
c. adequate.
d. a forbearance.
Rhett works at Scarlett’s Sandwich Caf. After work, in the parking lot, Rhett finds a
diamond ring lost by Thalia. Title to the ring is possessed by
a. Rhett.
b. Scarlett’s.
c. Thalia.
d. the state.
Starlight Caf has a cause of action, which is best defined as
a. a criminal prosecution, not a civil proceeding.
b. a failure to perform a legal obligation.
c. a judicial proceeding for the resolution of a dispute.
d. a situation giving a person a right to initiate a judicial proceeding.
Harold is a doctor. To protect himself against malpractice claims brought against him by
his clients, Harold should obtain
a. liability insurance.
b. life insurance.
c. health insurance.
d. malpractice insurance.
Toyoda Company buys gas pedals and other parts from subcontractors and puts them in
its vehicles without changing their composition. If the pedals or other parts are
defective, strictly liable for any damage caused by the defects are
a. neither Toyoda nor the subcontractors.
b. Toyoda and the subcontractors.
c. the subcontractors only.
d. Toyoda only.
Rally Speedboat Corporation refuses to sell its products to Super Weekends, Inc., a
recreational water products dealership. This is
a. an exclusive-dealing contract.
b. a horizontal market division.
c. attempted monopolization.
d. a unilateral refusal to deal.
Bob writes a check on his account at County Bank to Dona, a famous singer. The
person claiming to be Dona is an imposter, however, named Edy. Edy indorses the
check to Frank, for whom County Bank cashes it. Ultimately, the loss will most likely
fall on
a. Bob.
b. County Bank.
c. Dona.
d. Frank.
Bret enters into a contract with Collegiate University over the Internet to take an online
course titled “Internet Law.” This is an e-contract because
a. the contract was entered into in e-commerce.
b. the contract was formed between a student and a university.
c. the contract will be performed online.
d. the subject matter of the contract is “Internet Law.”
Regal Recreation Sales, Inc., allows Sandy to take a Regal boat for a “test run.” Sandy
tries the boat for a few hours, returns, and buys it. This is
a. a bailment.
b. a consignment.
c. a sale on approval.
d. a sale or return.
Gus dies intestate. The debts of the estate are paid by
a. Gus’s estate, after its assets are distributed.
b. Gus’s estate, before its assets are distributed.
c. Gus’s heirs, after the estate’s assets are distributed.
d. Gus’s heirs, before the estate’s assets are distributed.
Bob, a salesperson at a Carpets Galore store, tells Dita, a customer, “Buy your carpet
here, and I”ll install it for half of what the store would charge.” Dita buys the carpet,
which Bob installs for half the store’s price. Bob keeps the money. Bob has breached
a. no duty.
b. the duty of loyalty.
c. the duty of notification.
d. the duty of obedience.
Ryan invents a new kind of pen for taking notes in history classes. Which of the
following is NOT a necessary step in obtaining a patent for Ryan’s invention?
a. Proving that the invention is novel
b. Proving that the invention is marketable
c. Proving that the invention is useful
d. Proving that the invention is not obvious in light of current technology
In studying the legal environment of business, Professor Dooley’s students also review
ethics in a business context. Ethics includes the study of what constitutes
a. fair or just behavior.
b. financially rewarding behavior.
c. legal behavior.
d. religious behavior.
To rescind a contract, each party essentially advances to the position he or she would
have been in if the contract had been fully executed.
A purchaser who takes a check that has been outstanding for six months will be
considered on notice that the instrument is overdue.
If there are insufficient funds to cover the amount of a check in a customer’s account,
the bank may pay the item and create an overdraft without the customer’s authorization.
Misrepresentation can occur through conduct.
Arbitration is always legally binding.
Interested parties must be given an opportunity to comment on a proposed rule.
If an offeror does not expressly specify a certain mode of acceptance, then acceptance
can be made by any reasonable means.
An unauthorized signature will NOT necessarily bind the person whose name is forged.
A financing statement must include a description of the collateral by type or item.
A resulting trust is a trust implied in law.
Under the UETA, a typed name at the end of an email message is NOT considered an
e-signature.
An adult may avoid any contract with a minor.
The main individual beneficiaries of stock buybacks are corporate executives.
A usurious contract involves the purchase and sale of usable goods.
Browse-wrap terms require a user to affirmatively indicate his or her consent.
A director can be elected by the other members of the board.
Territorial and consumer restrictions are per se violations.
A gift causa mortis is effective only if the donor dies and the donee lives.
The unconscionability concept is one of the most important of the contract doctrines
applied to leases.
A generic term is not protected under trademark law unless it acquires a secondary
meaning.