Loni and Myra enter into a contract for a sale of clarinets and other wind instruments.
Loni delivers, but Myra does not pay. Loni can normally recover as damages the
difference between
a. any loss avoided and any profit gained.
b. the actual price and the hoped-for price.
c. the contract price and the market price.
d. the current prices in the parties locations.
Vicky contracts with Warren for the delivery of hospice services to benefit Xavier. This
is
a. a delegation.
b. an assignment.
c. a third party beneficiary contract.
d. a novation.
Rig Heli-Pads, Inc., enters into a contract to employ Scott as an on-site project manager
for two years. If Rig breaches the contract, Scott has a duty to
a. do nothing.
b. reduce the damages that Scott might otherwise suffer.
c. rescind the contract with Rig.
d. punish Rig and set an example to deter others from similar acts.
Natural Foods, Inc., orders “Grade A oil from Olive Grove Farms to process and sell to
Pic N Pay Grocers. Olive Grove ships “Grade B oil, which Natural Foods accepts. To
recover damages for the nonconformity, Natural Foods must give notice of the breach
within a reasonable time to
a. Olive Grove only.
b. Olive Grove, Pic N Pay, and the appropriate government agency.
c. Pic N Pay only.
d. the appropriate government agency only.
Dora writes a check for $100 drawn on Eastern Bank and presents it to Fast Cash, Inc.,
for payment. If the check is not backed by sufficient funds, Dora may be prosecuted for
a. forgery.
b. fraud.
c. negligence.
d. robbery.
Theo and Uma orally agree on the sale of Theos Fitness Center to Uma and note the
terms on a sheet of the centers stationery, which includes the Centers letterhead but
which neither party signs. This agreement is most likely enforceable against
a. neither Theo nor Uma.
b. Theo and Uma.
c. Theo only.
d. Uma only.
Home Products Store buys furniture from Relax Furniture, Inc. The parties agree that
the furniture will be shipped “F.O.B. Relaxs warehouse to Home Products via Swifty
Shipping Corporation. The furniture is lost in transit. The loss is suffered by
a. Home Products and Relax Furniture, but not Swifty Shipping.
b. Home Products, Relax Furniture, and Swifty Shipping.
c. Home Products only.
d. Relax Furniture only.
In relation to Edies solicitation of investors in a nonexistent business, she is charged
with “mail fraud. This requires, among other things,
a. claiming that an item is “in the mail when it is not.
b. deceiving postal authorities as to the content of an item of mail.
c. depositing items in the postal system without proper postage.
d. mailing or causing someone else to mail a writing.
Cole drives into Dinos Service Station and asks Erin, the attendant, to fill the tank in
Coles hybrid vehicle. After Erin fills the tank, but before Cole pays for the gas, any
contract between Cole and Dinos is
a. executed.
b. executory.
c. quasi.
d. unenforceable.
Florida public policy is to protect consumers from unfair and deceptive business
practices. A state statute declares unenforceable any waiver of its provisions, which
include a provision for consumer class actions. WISP Inc. requires its customers to sign
an agreement that designates South Dakota courts and law to govern all disputes. In a
suit by a group of Florida consumers against WISP, the court is most likely to rule that
the agreement is, under the principles discussed in “A Sample Court Case, Doe 1 v.
AOL LLC
a. enforceable because there is no reason not to enforce it.
b. enforceable because the parties had equal “bargaining power.
c. unenforceable as a violation of Florida policy and law.
d. unenforceable as a violation of South Dakota policy and law.
By contract, Quality Metals Corporation forbids Resource Refining, Inc., a wholesale
buyer of Qualitys products, from purchasing the products of Qualitys competitors. This
is allowed
a. under any circumstances.
b. unless its effect is to cause a competitor a loss of any business.
c. unless its effect is to substantially lessen competition.
d. unless there is no effect on a competitor.
Fiona invents a new deep-sea fishing net, which she names “Great Catch. She also
writes the operating manual to be included with each net. Fiona could obtain copyright
protection for
a. the net.
b. the “newness of the net.
c. the name.
d. the operating manual.
Tasty Eatin Corporation merges with Hasty Burgers, Inc. This merger between firms
that compete with each other in the same market is
a. a horizontal merger.
b. an interlocking directorate.
c. a tying arrangement.
d. a vertical merger.
Jen makes a gift of a check to Kilroy who takes it in good faith and without notice of
any claim, defense, or defect. With respect to this check, Kilroy is
a. an extraordinary holder in due course.
b. an ordinary check passer.
c. an ordinary holder.
d. an ordinary holder in due course.
Sela agrees to act on Thoms behalf, subject to Thoms control, and Thom trusts Sela to
so act. They set out the terms in a written document, which they both sign. This is
a. an agency by agreement.
b. an agency by estoppel.
c. an agency by ratification.
d. not the creation of an agency relationship.
Rita is appointed as an agent for Superior Sales, Inc. The agency agreement is silent as
to the level of sales that Rita is expected to achieve. She must
a. achieve nothing because the agreement says nothing on the issue.
b. attain the level that Rita achieved with her previous employer.
c. maintain the level Superior attained before Rita became an agent.
d. use reasonable diligence and skill in selling.
Flite-Craft Corporation makes and sells aircraft parts. In most states, the minimum
number of directors that must be present before Flite-Crafts board can transact its
business is
a. all of the directors authorized in the articles or bylaws.
b. a majority of the number authorized in the articles or bylaws.
c. any odd number.
d. one.
Call Center Corporation, a U.S. firm, owns property in India. The government of India
seizes the property for a proper public purpose and pays Call Center just compensation.
This is
a. confiscation.
b. defalcation.
c. dumping.
d. expropriation.
GR8 Stuf Company files a registration statement with the SEC before making an
offering to the general public. The registration contains false, immaterial statements of
which the investors are unaware. GR8 Stuf is charged with violating the Securities Act
of 1933. GR8 Stufs best defense is
a. the investors were not aware of the misrepresentations.
b. the issuer reasonably believed the misstatements were true.
c. the offering was made available to the general public.
d. the untrue statements were not material.
Svetlana, a fifty-five-year-old member of a racial minority with a disability, believes
that she is a victim of employment discrimination. Potentially the most widespread
form of discrimination is based on
a. age.
b. disability.
c. gender.
d. race.
Kai files a suit against Lana based on one of Lanas statements that Kai alleges is
fraudulent. To give rise to fraud, the statement must be one of
a. emotion.
b. fact.
c. illusion.
d. opinion.
New Apps Company develops “Browser Lite, software to speed the display of graphics
on Web sites. Browser Lite has the most copyright protection under
a. the Berne Convention.
b. the Paris Convention
c. the TRIPS Agreement.
d. the Madrid Protocol.
Universal Assembly Company makes espresso machines and sells one to Vim through a
misrepresentation on the label on which Vim relies and that results in an injury to Vim.
Universal is most likely liable for
a. a commonly known danger.
b. fraud.
c. privity.
d. puffery.
In cyberspace, Bret attempts to steal consumers credit card numbers stored in the
networked computers of Cinco Corporation, a financial payments service provider. The
quantity of data that can be stolen is limited by
a. the distance between the computers of Bret and Cinco.
b. the discrepancy in time between the locations of Bret and Cinco.
c. the speed of the connection between the computers of Bret and Cinco.
d. the same physical limits that exist in the “real world.
Applied Business Corporation makes and markets its products nationwide. Under the
stakeholder approach, to be considered socially responsible when making a business
decision, Applied must take into account the needs of
a. its consumers, the community, and society only.
b. its employees and owners only.
c. its employees, owners, consumers, the community, and society.
d. no one.
In Eds suit against First National Bank, the discovery phase would include all of the
following except
a. Eds complaint.
b. Eds deposition.
c. Eds requests for First Nationals admissions.
d. First Nationals replies to Eds interrogatories.
Fact Pattern 14-1
Ewa signs an instrument unconditionally promising to pay to “First State Bank $5,000
with interest in installments with the final payment due June 1, 2012.
Refer to Fact Pattern 14-1. With respect to this instrument, First States Bank is
a. the drawee.
b. the drawer.
c. the maker.
d. the payee.
Grant offers to sell his Honda Civic for $10,000 to Ivy. Referring to the prices for
similar Hondas, Ivy says, “Ill pay no more than $5,000. Grant says, “Forget it. Grants
offer was terminated by
a. Grant.
b. Honda.
c. Ivy.
d. no oneGrants offer is still open.
Raw Resources Corporation authorizes Stefan, its employee, to oversee its mining
operation. In the course of this employment, Stefan disposes of the mines waste
illegally. Liability for this crime most likely rests with
a. neither Raw Resources nor Stefan.
b. Raw Resources and Stefan.
c. Raw Resources but not Stefan.
d. Stefan but not Raw Resources.
The payment of Neros debt to Olly is guaranteed by Neros personal property. Nero is
located in Pennsylvania. Olly communicates to the appropriate state official a security
agreement that uses only Quality Engineering, the trade name of Neros business. To
perfect Ollys interest, this is
a. irrelevant.
b. not sufficient.
c. sufficient if Quality Engineering is a sole proprietorship.
d. sufficient if the trade name is spelled correctly or misspelled slightly.
Jean is playing a computer game on a bad disk that melts in her drive, starting a fire that
injures her hands. Jean files a suit against K-Tech, Inc., the games manufacturer.
K-Tech is held liable under the doctrine of strict liability. A significant application of
this doctrine is in the area of
a. cyber torts.
b. intentional torts.
c. product liability.
d. unintentional torts.
A surety is released from his or her obligation if a debtor cannot pay a debt.
Until the time for performance under a contract expires, the seller has a right to cure.
To recruit employees from other countries, an employer must first complete a
verification process.
A disclosed principal is not liable to a third party for contracts made by the agent acting
outside the scope of his or her authority.
A defendant may be relieved of liability by showing that a criminal act was necessary to
prevent an even greater harm.
If a note is payable in thirty days, payment is due by midnight on the thirtieth day.
A private citizen can enforce a federal environmental law if he or she has standing.
An insurer has a duty to avoid the payment of claims.
A motion for a judgment notwithstanding the verdict seeks to set aside a verdict and
enter a new verdict in favor of the nonprevailing party.
The term cure refers to the right of the seller to reject, adjust, or replace nonconforming
goods.
Insurance is classified according to the amount of the payment on a claim.
A profit is a right to make a profit from some part of land or some product of the land,
and the right terminates once that profit is made.
A check “payable to the order of bearer is neither an order instrument nor a bearer
instrument.
For an effective bailment, the bailor must deliver possession of the bailed property with
its title.
Force majeure clauses in international business contracts commonly set forth the major
clauses of the contracts.
Under the theory of negligence, the duty of care requires one person to come to the aid
of another in “peril.
The Uniform Partnership Act governs the operation of partnerships.
In sales law, a warranty is an assurance by one party of the existence of a fact on which
the other party can rely.
A mistake of fact can only be bilateral.
Sales of securities must occur within twenty days of registration.