Hal’s Hardware store defaults on a debt to Intrastate Bank, which takes possession of
the collateral securing the debt. Intrastate sells the collateral. The proceeds from the sale
are applied first to
a. Hal’s debt to Intrastate.
b. Hal’s debts to other creditors.
c. Intrastate’s fees for the sale.
d. payments Hal’s made on the debt to Intrastate.
Cecilia’s Day Spa, LLC, is a member-managed limited liability company. If the law in
Cecilia’s state is like the law in most states, unless the members have agreed otherwise,
voting rights are apportioned according to
a. capital contributions.
b. participation in management.
c. the number of members.
d. transactions with the firm.
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.
Skyler dies after having made a valid will. Skyler has died
a. in escheat.
b. in probate.
c. intestate.
d. testate.
Jacob owns five acres of land in northern California. On his land Jacob has a house and
a toolshed. There are ten large maple trees around the house that were there when Jacob
bought the land. Since buying the land, Jacob has planted an apple tree. Jacob’s real
property includes
a. the house and toolshed only.
b. the house only.
c. the house, toolshed and maple trees only.
d. the house, toolshed, maple tress and apple tree.
Olga enters into a contract to buy a refrigerator from a Prairie States Appliance store
with the price to be paid in monthly installments. After thirty-six months of payments,
Olga has paid more than twice the price of a similar stove. Eighteen payments remain
due under the contract.
Olga files a suit against Prairie States, claiming that their contract is so unfair and one
sided that it would be unreasonable to enforce it. Olga is asserting
a. the concept of good faith.
b. the principle of fair trade.
c. the predominant-factor test.
d. the doctrine of unconscionability.
Kris contracts to work exclusively for Little Manufacturing Company during May for
$5,000. On April 30, Little cancels the contract. Kris finds another job during May but
earns only $3,000. Kris files a suit against Little. As compensatory damages, Kris can
recover
a. $3,000.
b. $2,000.
c. $1,000.
d. $0.
Frida hires Gert, a real estate broker, to act as her agent to sell her house. The house
burns down before being sold. The agency agreement is likely
a. still in force if Frida gives Gert additional consideration.
b. still in force if Gert does not tell prospective customers.
c. terminated by mutual consent of the parties.
d. terminated by operation of law.
Phil enters into a contract to hire Bob’s Building Business to build a warehouse for Phil.
The contract specifies that the warehouse should be built with HighQual Bricks. When
construction starts, HighQual Bricks cannot provide enough bricks for the warehouse.
Bob’s Building Business substitutes Big Red Bricks, which are comparable in quality
and price to HighQual Bricks. This deviation from the contract
a. discharges Phil from the contract.
b. has no effect on the contract.
c. increases Bob’s Building Business’s duties under the contract.
d. suspends Bob’s Building Business’s duty to perform.
Ridgeline Bank provides Stanley with a mortgage to buy a home. The rate of interest is
fixed for three years and then adjusts annually. This is
a. a fixed-rate mortgage.
b. an adjustable-rate mortgage.
c. an interest-only mortgage.
d. a violation of the law.
Scienter exists if
a. Martin knows that the transmission on his truck is defective, but does not tell this fact
to potential buyers.
b. The racehorse that Karen is trying to sell has a genetic defect, but Karen does not
know about the defect, and so she does not warn potential buyers.
c. Jake, a real estate agent, tells a client that he has a house that “will make all her
dreams come true.”
d. Jon forces Bill to sign a contract to sell Jon a car below market value.
Kathryn signs a lease agreement for an apartment. Kathryn has entered into a(n)
a. express contract.
b. implied contract.
c. quasi contract.
d. unenforceable contract.
Thelma is an employee at Foreign Food Mart. Thelma is called for jury duty and as a
result cannot work her scheduled shift at Foreign Food Mart. Foreign Food Mart fires
Thelma. This is a violation of
a. an example of the doctrine.
b. an exception based on contract theory.
c. an exception based on public policy.
d. an exception based on tort theory.
Rite Contractors, Inc., agrees to build a motel for Sleep Inn Corporation. The project
proceeds according to plan, but before it is done, Sleep tells Rite to quit. Rite may
recover
a. the contract price less costs of materials and labor.
b. the contract price.
c. the costs needed to complete construction.
d. profits plus the costs incurred up to the time of the breach.
Sparkling Gem Corporation agrees to sell Jewel Outlets, Inc. (JOI), fifty new diamonds,
but the contract does not specify a place of delivery. JOI is expected to pick up the
goods. The place of delivery is
a. Sparkling’s place of business.
b. JOI’s place of business.
c. the Annual Gems and Jewels Convention in New York City.
d. the U.S. Postal Service office nearest to JOI’s place of business.
Oakley posts a defamatory remark about Pierre in “Roominate,” an online social
network maintained by SocNet, Inc., an Internet service provider. Most likely to be held
liable for the remark will be
a. Oakley.
b. Pierre.
c. Roominate.
d. SocNet.
Sayers is very clever and spends lots of time creating new things. Which of the
following is not copyrightable?
a. A sculpture of Sayers’s dog
b. A book about Sayers’s business successes
c. A movie about Sayers’s life
d. Sayers’s idea for a new way to play the guitar
Ronald’s debt to Greg is past due. Ronald obtains a judgment against Greg to collect the
debt, but Greg will not pay. Ronald requests a writ of execution. The property that is
seized under the writ of execution must be
a. in Ronald’s possession.
b. in Greg’s possession.
c. in the possession of Greg’s employer or other third party.
d. located within the court’s geographic jurisdiction.
Pluto accuses Quark, an accountant, of committing defalcation. This is
a. embezzlement.
b. general misconduct.
c. professional negligence.
d. throwing something out of a window.
Ilene and Jerry enter into a contract under which Ilene agrees to provide
groundskeeping services for Jerry’s Family Fun Center. Under an antidelegation clause,
the contract can prohibit and prevent the transfer of
a. only duties that are personal in nature.
b. only duties that are impersonal in nature.
c. no duties under the contract.
d. all duties under the contract.
Sally contracts with Tasty Pizza Company to deliver its products. Both parties change
their minds, however, and inform each other that they would like to cancel the contract.
The next day, Sally changes her mind and again offers to deliver Tasty’s products. Tasty
is willing to deal, but for a new price. Sally and Tasty
a. may agree to a new contract, but it cannot include a new price.
b. may agree to a new contract that includes the new price.
c. must perform their original contract.
d. must perform the part of their original contract that is executory.
Victor leaves his Dodge sport utility vehicle at Gordo’s Auto Service for an oil change.
This is
a. a bailment.
b. a gift.
c. accession.
d. production.
In making decisions for Smartt Investments, Rita uses a cost-benefit analysis. This is a
part of
a. duty-based ethics.
b. Kantian ethics.
c. rights-based ethics.
d. utilitarian ethics.
Natalie is a shareholder of Off-Road Vehicle Company. As a shareholder, Natalie does
not have
a. a right to compensation.
b. dividend rights.
c. inspection rights.
d. preemptive rights.
Big Dog Security Service, Inc. orally agrees to provide security services for NorthGate
Mall for as long as NorthGate Mall requires them. This contract is enforceable by
a. Big Dog Security only.
b. NorthGate Mall only.
c. either party.
d. neither party.
Mary enters a gas station and points a gun at the clerk. She then forces the clerk to open
the cash register and give her all the money. Mary can be charged with
a. robbery.
b. forgery.
c. larceny.
d. embezzlement.
Julia, the head executive of Fine Woolen Sweaters, Inc., is a committed Christian who
strongly adheres to the Ten Commandments. One of Julia’s employees is found to be
stealing sweaters and giving them to a local homeless shelter. Julia is likely to
a. punish the employee for stealing even though the employee’s motive was benevolent.
b. view the employee’s actions as justified because the employee was clothing the poor.
c. contribute more sweaters to the homeless shelter.
d. gently reprimand the employee without suggesting that the employee’s actions were
unethical.
Agnes borrows $110,000 from Bay Harbor Bank to buy a home under a mortgage with
an acceleration clause. After eighteen payments, Agnes stops making payments on the
mortgage. Bay Harbor
a. can foreclose once on the entire amount of the loan.
b. may seek only the amount of the missed payments, not the entire loan.
c. must foreclose on small amounts over time as each payment comes due.
d must notify Agnes to accelerate the steps to cure the default.
Ruby Red Corporation is incorporated in South Carolina. In that state, Ruby Red is
a. a domestic corporation.
b. a foreign corporation.
c. an alien corporation.
d. a non-entity.
May tries to start her new car with no success. She yells that she will sell the car to
anyone for $10. Nick, a passerby who owns Nick’s Pre-owned Autos, hands May $10.
This is
a. a valid acceptance because May is seriously frustrated.
b. a valid acceptance because Nick is a car dealer.
c. not a valid acceptance because May does not seriously intend to sell.
d. not a valid acceptance because Nick is a car dealer.
Hadley, an accountant, accumulates working papers while performing an audit for Ilene.
After the audit, these documents belong to
a. Hadley, with Ilene having a right of access to the papers.
b. Ilene, with Hadley having a right of access to the papers.
c. neither Hadley nor Ilenethe papers must be disposed of.
d. the Public Company Accounting Oversight Board.
Home Appliance Corporation contracts with Instate Trucking Company to take a
selection of appliance repair parts to Journey Airlines, Inc., with Journey to transport
the goods to a KeepSafe Company warehouse. Instate Trucking, Journey Airlines, and
KeepSafe each acknowledge possession of the goods by a document of title. Instate
Trucking, Journey Airlines, and KeepSafe are
a. bailees.
b. buyers.
c. lessees.
d. sellers.
To adjust debt and institute a repayment plan, Delton, a family fisherman in the Gulf of
Mexico, may file a petition in bankruptcy for relief under the Bankruptcy Code’s
Chapter
a. 1.
b. 3.
c. 5.
d. 12.
An executed contract is one that has been fully performed by both parties.
The duty owed under the mitigation of damages doctrine depends on the nature of the
contract.
If a seller is not a merchant, and the goods are not to be moved, the risk of loss passes
to a buyer on tender of delivery.
A guarantor is secondarily liable on an obligation.
Federal executive agencies are outside the federal executive departments.
Under the UCC, there are no exceptions to the perfect tender rule.
Labels must use words that are easily understood by the ordinary marketing executive.
An agency relationship created for an illegal purpose is enforceable.
The Environmental Protection lists all hazardous air pollutants (HAPs) on a prioritized
schedule.
Both intended and incidental beneficiaries acquire legal rights in a contract.
Bankruptcy law is state law.
Starr Cardio, Inc., is a small business. Ted, Uma, and eleven other members of the Starr
family own all of its stock. Currently, Starr’s income is taxed at the corporate level and,
after being distributed to the family members, at the shareholder level. Can Starr retain
its corporate status but otherwise avoid this double taxation? If so, how?
Unlike those who violate statutes, violators of agency rules are not punished.
Uniform laws apply in all states, including those in which the laws have not been
adopted.
Under the exhaustion doctrine, a party must feel “exhausted” about an administrative
action or regulation to challenge it in court.
Stock buybacks are illegal and serve no legitimate purposes.
The possession of monopoly power alone does not constitute the offense of
monopolization.