Ewald and First Star Company enter into an oral contract under which Ewald agrees to
provide delivery service for First Star for nine months. This contract is enforceable by
a. Ewald only.
b. either party.
c. First Star only.
d. neither party.
Chita owns the land on which Downwind Farm is situated, plus the farmhouse, barn,
and other structures permanently attached to the land. Chita’s brother Elvin owns
everything else on the farmimplements, seed, and so on. The real property is owned by
a. Chita and Elvin.
b. Chita only.
c. Downwind Farm.
d. Elvin only.
Timber Mills Corporation and Ur-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.
Dhani signs a check “pay to the order of Etan” drawn on Dhani’s account in First State
Bank and dates the check “May 1.” Etan presents the check to the bank for payment on
December 15. This is
a. a dishonored check.
b. an overdraft.
c. a postdated check.
d. a stale check.
Silky Coordinates, a women’s clothing store, employs female attendants to assist
customers in the dressing rooms. Radley, a forty-one-year-old male, applies for an
attendant’s job, but is not hired. In Radley’s suit against Silky for employment
discrimination under Title VII, the store has
a. an after-acquired evidence defense.
b. a bona fide occupational qualification defense.
c. a business necessity defense.
d. a seniority systems defense.
Fact Pattern 30-2
Kit, manager of Long-Term Care Company’s office in Metro City, decides to replace the
office’s male employees with females. Nia, an assistant manager transferred from a
different Long-Term Care office, refuses to cooperate. Kit retaliates against Nia, who
quits. Within a year, the male employees also quit.
Refer to Fact Pattern 30-2. Liability for Kit’s conduct most likely rests with
a. Long-Term Care male employees, who should have acted themselves.
b. Long-Term Care, which should have known, and Kit, who acted.
c. Nia, who did not cooperate.
d. no one, because no law was violated.
Kailin owns a farm near Manhattan, Kansas, with a farmhouse, barn, and other
structures permanently attached. Kailin grows soybeans on the property. A pond lies
within the boundaries. Land includes
a. the pond, the soil, and the structures.
b. the pond and the soil only.
c. the soil only.
d. the structures and the soil only.
Deep Storage Company holds goods for EZ Sales Corporation, which contracts to sell
them to Fabric Stores, Inc. The goods are to be delivered without being moved and are
represented by a negotiable bill of lading. The risk of loss passes to Fabric Stores
a. if Deep refuses to honor the bill of lading.
b. if EZ gives the bill of lading to Deep.
c. if the goods are lost due to an “act of God.”
d. when Fabric Stores receives the bill of lading.
Doctors Clinic orders 1,000 bandages from Emergency Supplies Company but fails to
specify the sizes. The bandages are delivered in an assortment of sizes. Doctors Clinic
may
a. accept the bandages “as is” only.
b. accept the bandages “as is” or reject the entire shipment only.
c. accept only the bandages that it wants and reject the rest.
d. reject the entire shipment only.
Marbled Granite Company files a suit against Natural Stone, Inc., in a Colorado court
with general jurisdiction. In a Delaware court with limited jurisdiction, E-Sales
Corporation files a suit against First State Bank. The difference between general and
limited jurisdiction is
a. the subject matter of the cases that the courts can decide.
b. whether a case is being heard for the first time.
c. whether a suit is filed against a single individual or many people.
d. whether a suit is filed by a citizen or by a business.
Cathy assures Don that she will deliver his products as he directs. An assertion that one
will do something in the future is part of the definition of
a. a declaration.
b. a moral obligation.
c. an ethical principle.
d. a promise.
Loni delivers her Mazda to be repaired at Nile’s Body Shop. She agrees to pay cash.
Nile repairs the car, but Loni refuses to pay the bill. Nile tells Loni that he will keep the
car until she pays. This is
a. a judicial lien.
b. a mechanic’s lien.
c. an artisan’s lien.
d. a violation of most states’ laws.
Begin Anew Enterprise, Inc., completes its registration process and issues a free-writing
prospectus. This tells prospective investors
a. about investing freely.
b. how to write their own prospectus.
c. that they can “freely write their own ticket” to buy Begin’s securities.
d. that they may obtain the prospectus at the SEC’s Web site.
Elise goes through an involuntary bankruptcy proceeding. An involuntary bankruptcy
occurs when
a. creditors are forced to accept a discharge of a debtor’s debts.
b. a debtor is unable to pay his or her debts as they come due.
c. a debtor’s creditors force the debtor into bankruptcy proceedings.
d. a debtor’s debts exceed the fair market value of his or her assets.
Sweet Candy, Inc., and Tasty Treats Stores enter into a contract for a sale of candy.
Sweet, a merchant who deals in goods of the kind sold, makes express warranties in
connection with the sale. Under the UCC, at the time a contract is formed, an express
warranty can be disclaimed or modified
a. by clear, conspicuous language called to the buyer’s attention.
b. by implied affirmations of fact relating to the goods.
c. in any way that the seller sees fit for the ordinary purpose.
d. in no way.
Tasty Pastries, Inc., and other bakers refer to a “baker’s dozen” as consisting of a
collection of thirteen baked goods. This is an example of
a. course of dealing.
b. course of performance.
c. square dealing.
d. usage of trade.
Fact Pattern 14-3
Odell and Poppy sign a contract for the sale of Odell’s Pizza Parlor to Poppy. The
parties intend their written contract to be a final statement of most, but not all, of the
terms of their agreementOdell must first buy the building from Quin, after which Odell
and Poppy will negotiate a final price.
Refer to Fact Pattern 14-3. The writing that Odell and Poppy signed is
a. a completely integrated contract.
b. a conditionally integrated contract.
c. a partially integrated contract.
d. a supplementally integrated contract.
Trendee Clothiers, Inc., sells t-shirts to U-Pik-It Stores, Inc., under an existing contract.
When textile costs increase, U-Pik-It agrees to a price increase, but later wants to cancel
the contract. U-Pik-It may
a. cancel the contract immediately.
b. cancel the contract only after accepting a final shipment.
c. cancel the contract only on reasonable notice.
d. not cancel the contract.
Fact Pattern 27-1
First State Bank issues a letter of credit in favor of Oboe Company, an American firm,
to facilitate an international sales contract to buy resources from Lapland Mining, Ltd.,
a Finnish company.
Refer to Fact Pattern 27-1. First State Bank
a. is responsible for making sure that the parties perform the contract.
b. will make payment once the transaction has been completed.
c. will make payment when Lapland presents the proper documents.
d. none of the above.
Fact Pattern 39-1
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 39-1. A court would most likely rule that the agreement between
Cardio and Emitate is
a. a deal that neither restrains trade or harms competition.
b. a legal restraint of trade.
c. a per se violation of the Sherman Act.
d. subject to analysis under the rule of reason.
Essential Foods Corporation makes and markets a variety of processed food products.
The federal agency responsible for enforcing health regulations concerning food is
a. the Consumer Product Safety Commission.
b. the Federal Reserve Board of Governors.
c. the Federal Trade Commission.
d. the Food and Drug Administration.
Riley is interested in buying a franchise from Soft Shoe Corporation. Soft Shoe must
disclose material facts that Riley needs to make an informed decision concerning this
purchase, according to
a. no law.
b. the federal service-station franchise termination law.
c. the Federal Trade Commission’s Franchise Rule.
d. the Illinois Franchise Disclosure Act.
Fact Pattern 32-2
Brad, Carlos, and Dora are general partners in Eastside Physicians, a medical clinic.
Refer to Fact Pattern 32-2. The partners decide to dissolve Eastside. Dora collects and
distributes the firm’s assets. This results in
a. nothing with respect to the firm’s existence.
b. the continuation of the firm’s business.
c. the termination of the firm’s legal existence.
d. the temporary suspension of the firm’s business.
The payment of Hu’s debt to Ian is guaranteed by Hu’s personal property. To give public
notice of his interest in Hu’s property, Ian is most likely to
a. attach a bright label to Hu’s property.
b. e-mail other potential creditors.
c. file a financing statement with the appropriate authority.
d. publish a collection notice in local newspapers.
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.
Regal Manufacturing Company contracts to sell sweaters to Superb Styles Store. Before
the sweaters are delivered, Superb indicates that it will not be able to pay. Regal can
resell the goods
a. either after finishing the job (and identifying the goods), or after stopping the job.
b. only after finishing the job and identifying the goods.
c. only if Regal immediately stops the job.
d. under no circumstances.
Bret obtains a fire insurance policy on his rental house with Continental Insurance
Company. Like all insurance, this policy is an arrangement for
a. avoiding the assumption of responsibility.
b. predicting a potential loss based on unknown factors.
c. shifting the imposition of liability.
d. transferring and allocating risk.
Cathy uses, on her new recording Drive By, the exact note-for-note melody of a song
written by Earl without his permission. This is
a. copyright infringement.
b. patent infringement.
c. trademark infringement.
d. a theft of trade secrets.
Fact Pattern 22-2
Jake is the maker of a $2,000 promissory note payable to Kim. Kim indorses the note to
Lou who, in turn, indorses it to Mona, who then indorses it to Nat, the present holder.
Suppose that Mona pays Nat on the note. With timely notice to the proper parties, Mona
may collect payment on the note from
a. Jake, Kim, or Lou.
b. Jake or Kim only.
c. Lou only.
d. no one.
Bay City Construction, Inc., a contractor, asks Cool Electric, a subcontractor, to provide
certain services. Nothing is expressed about payment. Cool provides the services, but
Bay City refuses to pay. In Cool’s suit to recover, the chief issue is most likely to be
whether these parties had
a. a formal contract.
b. an actual contract.
c. an implied-in-fact contract.
d. a voidable contract.
Edy obtains a homeowners’ insurance policy with First Source Insurance Company.
First Source can cancel the policy
a. if Edy appears as a witness in a case against First Source.
b. if Edy fails to pay the premiums.
c. if Edy makes changes that add to the home’s value.
d. under no circumstances.
Michael, a citizen of Ireland, and Nina, a citizen of the United States, enter into a
contract. When Nina breaches the contract, Michael obtains an award of damages in an
Irish court. He asks a U.S. court to enforce the award. The U.S. court defers to and
enforces the Irish court’s decree. This is
a. a travesty of justice.
b. the act of state doctrine.
c. the doctrine of sovereign immunity.
d. the principle of comity.
Bo and Clancy decide to do business as Marketing & Promotion Services. To be a
partnership, this association can result from an agreement that is
a. express, but not from an agreement that is implied.
b. implied, but not from an agreement that is express.
c. oral, written, or implied by conduct.
d. written, but not from an agreement that is oral or implied.
Even-Flo Hydraulics enters into a contract to repair valves and fittings in Fiesta
Company’s plant. If Even-Flo breaches the contract, Fiesta can
a. do nothing but make a deal with .a different service provider.
b. do nothing but temporarily suspend operations and wait.
c. file a criminal complaint against Even-Flo.
d. sue Even-Flo for damages.
Corporate officers and directors owe no duty to individual shareholders.
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?
A pipe in Gert’s house springs a leak. Gert contracts with Holly’s Plumbing &
Construction Company to repair the pipe and fix the damage to Gert’s house. Gert pays
10 percent of the price in advance. Holly’s does the work, but Gert refuses to pay the
rest of the price. What can Holly’s do, and how is it done?
A complex criminal scheme cannot be initiated on a personal computer in a person’s
home.
An adult may disaffirm a contract entered into with a minor.
A court’s direction to a party to do or to refrain from doing a particular act is a
rescission.
Any point source emitting pollutants into water must have a permit.
Certified checks are instruments that have been accepted for payment by the institutions
on which they are drawn.
If a sales contract is unilateral, the offeror need not be notified of the offeree’s
performance.
On default, unless the security agreement states otherwise, the secured party has the
right to repossess collateral.
Most securities can be resold without registration.
Discount Mart, Inc., files a suit in a state court against Elements Computer Corporation,
alleging that Elements breached a contract to sell 500 notebook computers to Discount.
During the course of the suit, Discount files a motion for judgment on the pleadings,
Elements files a motion for a directed verdict, and both parties file motions for
summary judgment. When and for what purpose are each of these motions made?
U.S. laws that prohibit discrimination in employment do not apply to U.S. employees
working for U.S. firms located abroad.
A check is a special type of certificate of deposit.
The UETA covers only e-records and e-signatures relating to a transaction.
A financing statement is effective for no more than five months from the date of filing.
Frenchy’s Fast Fries (3F) requires that its employees wear uniforms and protective
clothing while on the job. 3F provides a locker room for the employees to leave their
street clothes and personal items while working. A sign on the back of the locker room
door states, “Frenchy’s is not responsible for the loss of any property in the locker
room.” Grant, a 3F employee, changes his clothes in the locker room before starting
work and leaves his wallet and watch in a pocket of his jacket hanging in his locker.
When he returns after his shift, the wallet and watch are gone. Does Grant’s leaving
personal items in the locker room constitute a bailment? If so, what type of bailment? If
not, what legal relationship is it? Does 3F’s sign exculpate the company for Grant’s
loss? Why or why not?