Paychex Loan Company extends credit in the ordinary course of its business. Under the
Truth-in-Lending Act, Paychex must inform potential borrowers of
a. credit terms offered by other lenders and its own credit terms.
b. no credit terms.
c. only its own credit terms.
d. only the credit terms that will convince borrowers to “close the deal.”
Hu, Ivan, and Juana apply to work for King Meatpacking Company. These individuals’
identities and eligibility to work must be verified by
a. the employer.
b. the individuals.
c. the individuals’ countries of origin.
d. the U.S. Citizenship and Immigration Services.
Hu believes that he is a victim of a form of employment discrimination that falls under
Title VII of the Civil Rights Act. Compliance with this statute is monitored by
a. employees and job applicants, not an administrative agency.
b. employers and businesses, not an administrative agency.
c. the courts and Congress, not an administrative agency.
d. the Equal Employment Opportunities Commission.
Special Roast Coffee, Inc., processes and sells a variety of coffee products. Special
Roast’s product packages must include
a. the company owner’s identity.
b. the contents’ net quantity.
c. the restaurants and stores in which the product is sold.
d. the type of consumer most likely interested in the product.
Eighty-year-old Clark exhibits confusion, forgetfulness, and disorientation. Dave,
Clark’s doctor, believes that the symptoms indicate dementia. Elsa, who has significant
contact with Clark, believes that he is in a state of mental decline. These facts indicate
a. an urgency that Clark distribute his assets.
b. Clark’s lack of capacity.
c. Dave’s misdiagnosis.
d. Elsa’s intent to take advantage of Clark.
Frank agrees to lease an apartment from Gena for one day to see Harry, the president of
the United States, deliver a speech in the street below. The speech is canceled ten days
before its date. Frank’s contract with Gena
a. is discharged.
b. is not affected.
c. is postponed until another event is scheduled.
d. must be performed immediately.
Link and Meryl are employees of Natural Resources, Inc. (NRI). When Odel, the
president of NRI, learns that Link and Meryl are active in union activities, he discharges
them. Link and Meryl may bring an action against NRI under
a. federal labor law.
b. federal or state unemployment law.
c. state workers’ compensation law.
d. the employment at-will doctrine.
Fact Pattern 23-1
Echo takes her car to Fix-It, Inc., which repairs the car and bills Echo for $500. Echo
writes out a check drawn on Capital Bank, but later, believing that Fix-It did not repair
the car properly, issues a stop-payment order.
Refer to Fact Pattern 23-1. Capital Bank pays the check. Capital
a. can sue Echo for a wrongful stop-payment order.
b. can sue Fix-It for breach of contract.
c. can sue no one because it paid a check that was not properly payable.
d. is liable for Echo’s loss due to the wrongful payment.
KupaJava hires Lola to manage one of KupaJava’s seven drive-through coffee stands.
KupaJava agrees to pay Lola a salary, plus commission. KupaJava stipulates the
standards that should be observed, the goals that should be attained, and the methods
that should be used. Lola is most likely KupaJava’s
a. employee.
b. independent contractor.
c. principal.
d. work for hire.
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.
Fact Pattern 23-1
Echo takes her car to Fix-It, Inc., which repairs the car and bills Echo for $500. Echo
writes out a check drawn on Capital Bank, but later, believing that Fix-It did not repair
the car properly, issues a stop-payment order.
Refer to Fact Pattern 23-1. Capital Bank
a. is liable to Fix-It for the amount of the check.
b. must stop payment if Capital has a reasonable time to act.
c. need not stop payment unless Echo had a valid reason to act.
d. need not follow Echo’s order unless the check was certified.
Roc buys a farm from Steve, who claims that it would be a prime site for a housing
subdivision. Roc later learns that the law does not permit the land to be used for
housing. Roc may
a. not rescind the contract.
b. rescind the contract only if Roc did not know the law before the deal.
c. rescind the contract only if Steve knew about the law before the deal.
d. rescind the contract only if the law is not common knowledge.
Oak Grove Residences, Inc., owns apartment buildings. Pedro leases one of Oak
Grove’s apartments. Pedro’s transfer of his interest in the lease to Quito for a period
shorter than the lease term is
a. an assignment.
b. an eviction.
c. a right of entry.
d. a sublease.
Karson orally agrees to pay Jaime to plant and harvest a quarter of Karson’s farm
acreage for four corn-planting seasons. After Jaime prepares the land and plants the first
crop, Karson says that their deal is off. Jaime can most likely recover
a. in quasi contract.
b. in reformation.
c. in restitution.
d. on the parties’ existing contract.
In posts in online chat-rooms, Ramona makes repeated credible threats to Pierce that
put him in reasonable fear for his safety. This is a crime in
a. most states.
b. only a few states.
c. no state.
d. California only.
Sam, or any U.S. citizen, can bring a civil suit in a U.S. court against a foreign entity
for
a. a tort allegedly committed in the United States only.
b. a tort allegedly committed in the United States or overseas.
c. a tort allegedly committed overseas only.
d. no purpose.
At an auction, Vigo bids on an object, believing that it is worth more than the price
asked. When the item proves to be less valuable, Vigo is
a. liable on the bid.
b. not liable on the bid because Vigo misestimated the value.
c. not liable on the bid because the auctioneer misstated the value.
d. not liable on the bid because the object was probably overpriced.
Emil wants to initiate a suit against Fast Credit Company by filing a complaint. The
complaint should include
a. an explanation of the proof to be offered at trial.
b. a motion for judgment n.o.v.
c. a motion for judgment on the pleadings.
d. a statement of the grounds for the court to exercise jurisdiction.
First State Bank holds a mortgage on Gigi’s property. Gigi defaults on the debt. The
bank forecloses. If the proceeds of the foreclosure sale are insufficient to pay the costs
of the sale and the debt, the bank can
a. obtain a deficiency judgment against Gigi.
b. prorate the costs to its other debtors.
c. reclaim the property as a voidable transfer.
d. use the equity of redemption to redeem the property.
To adjust debt and institute a repayment plan, Charliewho is not a corporation, a
partnership, or a family farmer or fishermanmay file a petition in bankruptcy for relief
through
a. a liquidation.
b. a reorganization.
c. a repayment plan.
d. a family-farmer bankruptcy plan.
North Mining Company and South Excavation Company agree to abide by the
decisions of East Coast Financial Corporation as to their respective levels of
production, markets, and prices, effectively reducing competition and increasing profits.
This is most likely
a. a common, legal, time-honored type of business arrangement.
b. an illegal restraint on trade.
c. an innovative, legally efficient approach to doing business.
d. an outdated, but legal business trust.
Seth files a petition for bankruptcy. Seth must include with the petition
a. proof of each creditor’s claim.
b. a list of creditors and the amount of the debt owed to each.
c. all of his debit and credit cards to be disposed of by the court.
d an affidavit testifying to his having read the Bankruptcy Code.
Flip is a member of Great States Trucking LLC. Flip’s relationship to Great States ends,
but the firm continues to do business. This is
a. dissociation.
b. dissolution.
c. winding up.
d. wrongful.
Frank slips and falls on Guy’s Harbor Tour Boat and is injured. Frank files a suit against
Guy’s for $500,000. If Frank is 20 percent at fault and Guy’s is 80 percent, under the
“50 percent rule” comparative negligence principles, Frank would recover
a. $0.
b. $250,000.
c. $400,000.
d. $500,000.
Rex, an accountant, enters into a contract to provide services to Sofi. Rex does not
finish the work within the contract’s deadline. Sofi pays a penalty as a result of the
missed deadline and hires Trey to complete the job. Rex is most likely liable for
a. nothing.
b. Sofi’s penalty and the cost to hire Trey.
c. Sofi’s penalty only.
d. the cost to hire Trey only.
Elle, a minor acting on her own, signs a contract to buy a horse from Field Equine
Ranch. Later, Elle disaffirms the deal. Liability most likely rests with
a. Elle and her parents.
b. Elle only.
c. Elle’s parents only.
d. neither Elle nor her parents.
Fact Pattern 14-2
Kelly and Lucas sign a written contract for the sale of Kelly’s Coffee Kiosk to Lucas.
The parties intend their written contract to be a final statement of the terms of their
agreement.
Refer to Fact Pattern 14-2. Lucas later disputes some of the provisions of the deal with
Kelly. If the dispute results in litigation, a court will most likely exclude evidence that
a. buttresses the written terms.
b. contradicts the written terms.
c. duplicates the written terms.
d. reinforces the written terms.
Fact Pattern 7-1
Minka uses her computer to secretly install software on hundreds of personal computers
without their owners’ knowledge.
Refer to Fact Pattern 7-1. Minka’s software is harmful to the computers on which she
installed it. This program is
a. malware.
b. badware.
c. harmware.
d. infectware.
Rick and Sandy are limited partners in Total Profit Enterprises, a limited partnership. To
avoid personal liability for partnership obligations, they must not
a. acquire an interest in the firm.
b. contribute property to the firm.
c. engage in activities independent of the firm’s business.
d. participate in the firm’s management.
Orange Company makes computers. The company’s ad states that “if you aren”t eatin”
an Orange, you aren”t gettin” any C.” ” The Federal Trade Commission would consider
this ad
a. false and misleading.
b. impermissibly vague and general.
c. a deceptive half-truth.
d. none of the choices.
Fact Pattern 24-2
General Leasing Company (GLC) buys equipment for use as inventory, borrowing $1
million from Helpful Finance Corporation for a security interest in the equipment. The
next day, GLC borrows $513,000 from Interstate Bank, also for a security interest in the
equipment. GLC defaults on the loans.Refer to Fact Pattern 24-2. Suppose that two
weeks after GLC takes possession of the equipment, Helpful and Interstate file
financing statements, with Interstate filing first. In that circumstance, the party with
priority to the equipment is
a. GLC.
b. Helpful and Interstate proportionately.
c. Helpful only.
d. Interstate only.
Chicago Coca-Cola Bottling Company is
a. a chain-style franchise.
b. a distributorship franchise.
c. a manufacturing franchise.
d. no franchise.
Heather and Genice agree that Genice can satisfy her debt to Heather by paying the
money directly to Fava (to whom Heather owes a debt). The designation of this contract
as a third party beneficiary contract is determined by the intent to benefit
a. all of the parties.
b. Heather only.
c. Genice only.
d. Fava only.
Corner Convenience Store (CCS) takes out a full-page ad in a local newspaper and runs
a thirty-second commercial on a local television station, offering a reward for
information leading to the apprehension of a certain criminal. CCS could normally
terminate the offer by placing
a. a full-page ad in the local paper and a thirty-second commercial on the local station.
b. a notice in the “Legal Announcements” section of the paper.
c. a notice to the news departments of the local stations.
d. any, or none, of the choices.
Fact Pattern 11-1
Dave’s Hobby Town and Eva’s Yarn Shoppe are adjacent stores with adjoining parking
lots. Dave offers Eva a discount on purchases from Dave’s store if Eva will not tow the
cars of Dave’s customers who park in Eva’s lot.
Refer to Fact Pattern 11-1. Dave’s discount is legally sufficient consideration
a. because it is a promise of something of value.
b. only if Dave adds a cash rebate.
c. only if Eva uses it.
d. under no circumstances.
Most state trial court decisions are not published.
The UCC has replaced the common law concept of title in part with the concept of
identification.
A surety is not discharged from his or her obligation if someone other than the debtor
pays it.
A party seeking court review of an administrative action must first exhaust all of his or
her administrative remedies before seeking court review.
For consideration to have “legally sufficient value,” it must consist of goods or money.
An acceptance that materially changes a term in the offer will still be considered an
acceptance.
An individual director does not act as an agent to bind the corporation.
The dissociation of a member of a limited liability company in violation of the
operating agreement is legally wrongful.
A cooperative may take the form of a corporation.
After two years of research and an investment of a substantial amount of money,
Coast-to-Coast Company (CC) develops a new product that it hopes will produce
substantial profits. CC learns that a competitor, National Sales, Inc., has made and
begun to sell a nearly identical product. CC learns from a reliable source that National
paid a CC employee to obtain the plans for CC’s product when it was in development.
What legal recourse does CC have against National?
Intent to deceive is an element of fraud.
Job requirements that relate to job performance cannot violate employment
discrimination laws.
A market in which there is more than one seller, even if only a limited number, cannot
be a monopoly.
Almost all types of property can be garnished.
The UETA does not create rules for e-transactions.