Solid Toolmakers, Inc., contracts to sell its business to Titan Hardware Corporation.
Before either party has performed, rescission of this contract requires
a. a mutual agreement to rescind.
b. consideration.
c. performance by all of the parties.
d. an accord and satisfaction.
Listen Up! Corporation books and promotes concerts and other entertainment events,
for which Listen Up! also sells tickets. In weighing a challenge to Listen Up!’s
“monopolistic” ticket prices, a court looks at the relevant geographic market. This
encompasses
a. only areas in which Listen Up! does not have monopoly power.
b. only areas in which Listen Up! has monopoly power.
c. the area in which Listen Up! and its competitors sell, and their customers buy, the
tickets.
d. the entire United States in all cases.
Creekside Property Corporation enters into a contract with Downstream Management
Associates to manage and maintain Creekside’s apartment complex. Their contract
provides that neither party can recover damages for a non-fraudulent or unintentional
breach. This is
a. a limitation-of-liability clause.
b. an exculpatory clause.
c. an illegal clause.
d. a quasi contract.
Relax Chair Company contracts to deliver 100 chairs to Stuffy Furnishings Store on
May 1 for which Stuffy agrees to pay. Relax tells Stuffy on April 15 that delivery will
be delayed until June 1. Stuffy may
a. await performance, sue Relax, or suspend its own performance.
b. only await Relax’s performance for a commercially reasonable time.
c. only sue Relax for breach of contract.
d. only suspend its own performance.
Miley and Rico enter into a contract for the closing of a sale of Miley’s recording
studio. When Rico’s schedule conflicts, he asks Oliver to perform his duties at the
closing. This transfer of duties is
a. a delegation.
b. an assignment.
c. prohibited.
d. a negotiation.
County Bank wants to perfect its security interest in collateral owned by Direct Sales
Company. Most likely, a financing statement should be filed with
a. the local chamber of commerce.
b. the county clerk.
c. the federal loan officer.
d. the secretary of state’s office.
Lars accuses Moe, an attorney, of committing malpractice. Malpractice is
a. a breach of ethics.
b. a defalcation.
c. a mistake in judgment.
d. professional negligence.
To acquire monopoly power in its market, Perfect Plastics, Inc., sets its prices lower
than its competitors. Under the Sherman Act, this is
a. a per se violation.
b. a violation if its competitors make similar deals.
c. a violation if it thereby acquires monopoly power.
d. not a violation.
Regional Products, Inc., agrees to sell to Quantity Dealers Corporation a certain amount
of goods but no mention is made of where the goods are to be delivered. In general, the
UCC requires that the delivery take place at
a. a neutral place of business halfway between the parties’ locations..
b. a UCC-designated warehouse.
c. Regional’s place of business.
d. Quantity’s place of business.
Marie, an employee of Nickel Tool Company, files a sexual-harassment suit against
Owen, her supervisor. Marie wins. Nickel may also be liable if it had effective
harassment policies and complaint procedures, and
a. Marie failed to follow them.
b. Marie followed them.
c. Owen failed to follow them.
d. Owen followed them.
Commercial Development Corporation (CDC) hires Delta Construction Company to
work at a site as an independent contractor. Whether CDC will be liable for torts
committed at the site by Delta depends on
a. what Delta bid for the job.
b. whether exceptionally hazardous activities are involved.
c. which party obtained insurance to cover tort liability.
d. who is paying Delta.
Ewa is a shareholder of Farm Fresh Foods, Inc., whose management is considering a
tender offer by Growers Market Corporation. Ewa elects appraisal rights. This affects
a. Farm Fresh’s consideration of the offer.
b. Ewa’s shareholder status.
c. Growers Market’s offer.
d. nothing.
Jill is fifteen. In most states, Jill would be considered a minor because she is under the
age of
a. sixteen.
b. eighteen.
c. twenty.
d. twenty-one.
Superior Home Products, Inc., is a corporation. Superior’s implied powers enable it to
a. amend the articles of incorporation.
b. bring a derivative suit.
c. declare dividends.
d. perform all acts reasonably appropriate and necessary to accomplish its corporate
purposes.
Rural Development Corporation (RDC) and Sid enter into a contract for the
clear-cutting of RDC’s fifty-acre tract for which RDC agrees to pay Sid. Sid transfers
his duty to log the tract under the contract to Timber Logging Company. Timber is
a. a delegatee.
b. an assignee.
c. an obligee.
d. a prohibitee.
Any decision by the management of Fast-Food Franchise Corporation may significantly
affect its
a. operators only.
b. operators, owners, suppliers, the community, or society as a whole.
c. owners only.
d. suppliers, the community, or society as a whole only.
Mike, an advocate of a certain religion, publishes an article in New Times magazine
insisting that Congress base all federal law on his religion’s principles. The First
Amendment guarantees Mike’s freedom of
a. religion only.
b. speech only.
c. the press only.
d. religion, speech, and the press.
Fact Pattern 11-2
Brad defends against a breach-of-contract suit by College Credit Corporation by
claiming that their deala student loan accruing interest at a certain rate and payable
beginning on a certain datewas unfair because the consideration for their contract was
inadequate.
Refer to Fact Pattern 11-2. If, as Brad claims, the consideration in this problem is
inadequate, it may indicate a lack of
a. accord in Brad’s satisfaction with the value of the deal.
b. bargained-for exchange or mutual assent.
c. flexibility on the part of College Credit to accommodate Brad’s needs.
d. “heft,” ‘substance,” or “weight” in the terms of the contract.
Tone Style Stores orders leather jackets from Universa Clothing Company. Universa
mistakenly ships denim jackets, which Tone rejects and returns via Valu Transport, Inc.
During the return, the jackets are lost. The loss is suffered by
a. Tone only.
b. Tone and Universa, but not Valu.
c. Tone, Universa, and Valu.
d. Universa only.
Scot and Tiffany enter into an implied-in-fact contract. The parties’ conduct
a. defines the contract’s terms.
b. finds the contract’s facts.
c. terminates any unintended consequences.
d. undercuts any terms based on the facts.
Cow Country Corporation (CCC) sells half of its land to the Double R Ranch. On the
land is a reservoir. In the deed, CCC retains the right to remove a limited amount of
water per day from the reservoir. This right is
a. a leasehold estate.
b. a license.
c. an easement.
d. a profit.
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-in-fact contract.
d. on a theory of quasi contract.
On Monday, Neil tells Outdoor Landscaping, Inc., that he will pay Outdoor $500 if a
variety of tasks are completed by Friday. On Wednesday, when Outdoor is more than
half done with the work, Neil says that he has changed his mind. These parties had
a. an expired contract when Neil said that he had changed his mind.
b. a quasi contract when Neil said that he would pay for certain work.
c. a unilateral contract as soon as Outdoor began to perform.
d. no contract.
Upson Down Company sells its wares to consumers over the Internet. Upson’s site
includes an on-screen notice indicating its refund and return policies, where its business
is physically located, its legal name, and other details. This is
a. dictated by members of the Good Business Association.
b. mandated by federal law.
c. required by California state law.
d. strictly voluntary.
Over the course of a year, Real Deal Corporation sells appliances to customers to whom
it extends credit. Real Deal orders the appliances from Superior Appliance Company’s
warehouse, from which the items are shipped via common carrier to Real Deal’s
customers. Article 2 of the UCC governs
a. all of the parties’ sales of the goods.
b. Real Deal’s extension of credit.
c. Superior’s storage of the goods.
d. the common carrier’s delivery of the goods.
Vision Optical Company and Wide Eyes Open, Inc. decide to combine. Xavier, a Wide
Eyes shareholder, is dissatisfied with the price that he will receive for his stock. In the
absence of fraud or other illegal conduct, Xavier’s exclusive remedy is to
a. exercise an appraisal right.
b. file a suit to delay the process.
c. refuse to agree to the deal, which cannot then proceed.
d. urge other shareholders to insist on a higher price.
When Jeff’s car breaks down, he asks Kwik Tow, Inc., to tow it from its location to
Loyal Repair Shop. There is no discussion of a price, and Jeff and Kwik do not sign any
documents. After the tow, Kwik sends Jeff a bill. With respect to Jeff’s obligation to pay
the bill, this is
a. an express contract.
b. an implied-in-fact contract.
c. an implied-in-law contract.
d. no contract.
Fact Pattern 30-3
Lita replaces Manny in his job at Neighborly Business Corporation (NBC).
Refer to Fact Pattern 30-3. Manny believes that he has been discriminated against on
the basis of his age. For the Age Discrimination in Employment Act of 1967 to apply
a. all parties must be forty years of age or younger.
b. Lita must be forty years of age or older.
c. Manny must be forty years of age or older.
d. NBC must have been in existence for at least forty years.
Orin creates a living trust to pass his assets, including stock in Petro Oil Company and
other business investments, to his heirs. One advantage of this arrangement is that
a. income taxes do not have to be paid on trust earnings.
b. the assets are sheltered from the payment of estate taxes.
c. the assets can be transferred without going through probate.
d. the trust does not come into existence until the grantor’s death .
Phil invents “PhutureNow,” new Web site design software, and applies for a patent. If
Phil is granted a patent, his invention will be protected
a. for ten years.
b. for twenty years.
c. for the life of the inventor plus seventy years.
d. forever.
Ruth gives Seth a computer as a gift. Using the computer, Seth develops a new game,
for which he obtains intellectual property protection, and forms Top Games, Inc., to
make and market the game. Seth’s acquisition of the game is by
a. a bailment.
b. accession.
c. confusion.
d. production.
Xtra Finance Company is a creditor beneficiary in a deal that involves Yvon and Zack.
Xtra, like most creditor beneficiaries, is
a. a donee beneficiary.
b. an incidental beneficiary.
c. an intended beneficiary.
d. none of the choices.
Rona and Stiv do business as Treasure Island Traders. In acting on the firm’s behalf in a
deal with Unlimited Potential, Inc., Rona makes an honest error in overestimating the
profit. To her firm, Rona is
a. liable for breach of the duty of care.
b. liable for breach of the duty of economic sense.
c. liable for breach of the duty of loyalty.
d. not liable.
Garden Tool Company makes hedge trimmers. Troy is injured while using a Garden
Tool trimmer and sues the company for product liability based on negligence. To win,
Troy must show that
a. Garden Tool did not use due care with respect to the trimmer.
b. Garden Tool misrepresented a material fact regarding the trimmer.
c. Troy was experienced in the use of trimmers.
d. Troy was in privity of contract with Garden Tool.
Kyla is a salesperson for Liberty Financial Corporation. Micky is also a Liberty
salesperson. Neil is Kyla and Micky’s supervisor. Owen is a Liberty customer. Liberty
may be liable for sexual harassment to Kyla by
a. Micky only.
b. Micky, Neil, or Owen.
c. Micky or Neil only.
d. Neil only.
Like statutory law, administrative law is created by legislatures.
Fraud has occurred online but not by e-mail.
An agent is authorized to act on behalf of a principal in doing business with third
parties.
A statement of opinion is generally subject to a claim of fraud.
It is not a crime to defraud the public through the use of ads on television.
A consumer may be denied credit on the basis of a credit report.
Under a dram shop act, liability can be imposed without proof of negligence.
A person may not be responsible for a criminal act if, as a result of a mental defect, he
or she did not appreciate the wrongfulness of the act.
Environmental clean-up efforts include control of toxic chemicals used in agriculture
and in industry.
A tender offer can be conditioned on the receipt of a specified number of outstanding
shares by a certain date.
Personal property may become real property by attaching it to real property.
A holding company is a company whose business activity consists of holding shares in
another company.
A third party beneficiary contract is formed when a contract confers a benefit on any
third party.
Oral evidence of the meaning of a contract with incomplete terms can be introduced at a
trial.
An employer can dismiss an employee because his or her wages are being garnished.
The First Amendment protects obscene speech.