Brians pick-up truck collides with Mirandas semi-trailer on a county highway.
Weighing Brians liability for the collision, Rachel, a judge, reasons by analogy. To
reason by analogy is to
a. compare the facts in previous cases and apply the same rule of law.
b. compile summaries of court decisions on particular topics.
c. employ logic through a major premise, a minor premise, and a conclusion.
d. proceed from one point to another with the focal point being the result.
Office Application Corporation (OAC) sends an e-record to Precision Design, Inc.
Under the UETA, the record will be considered received when
a. it enters Precisions processing system in a readable form.
b. a Precision representative is aware of its receipt.
c. it is midway between the parties processing systems.
d. passes out of OACs control even if it is not in a readable form.
Fidelio Corporation enters into a contract with Equi Insurance, Inc., to obtain health
insurance for Fidelio employees. Equi breaches the contract. If Fidelio is awarded
compensatory damages, the purpose would be to
a. establish, as a matter of principle, that Equi acted wrongfully.
b. provide Fidelio with funds for a foreseeable loss beyond the contract.
c. provide Fidelio with funds for its loss of the bargain.
d. punish Equi and set an example to deter others from similar acts.
Bread & Pastries Baking Company operates a commercial baking planta “major
sourcethat emits hazardous air pollutants for which the Environmental Protection
Agency has set maximum levels of emission. The plant does not use any equipment to
reduce its emissions. Under the Clean Air Act, this is most likely
a. a violation.
b. not a violation because baking is not considered to be polluting.
c. not a violation because the plant does not use any equipment.
d. not a violation because the plant is not a mobile source.
Jenna, a minor acting on her own, signs a contract to buy a horse and its tack from Field
Equine Ranch. Later, after taking possession of the horse and tack, Jenna disaffirms the
deal. She
a. can keep the horse and the tack.
b. can keep the horse but not the tack.
c. can keep the tack but not the horse.
d. must return both the horse and the tack.
Video Products Company operates a DVD manufacturing plant on Wandering River.
Discharging pollutants from the plant into the river can result in
a. civil penalties and criminal penalties.
b. civil penalties only.
c. criminal penalties only.
d. no penalties.
In selling paving stones to Yard & Garden Supply, Trey tells Yard & Gardens buying
representative that the stones are ‘soft as carpet. This is
a. adhesion.
b. fraud.
c. mistake.
d. puffery.
Retail Investment Company offers to sell a certain mall to Shopping Stores, Inc., if it
accepts before 10 a.m. Monday. A contract is formed if Shopping Stores acceptance is
received
a. any time on Monday.
b. before 10 a.m. Monday.
c. before 11 a.m. Monday.
d. within twenty-four hours of 10 a.m. Monday.
Fact Pattern 16-B1
Bayside Construction Company enters into a contract with Clio to remodel
Deweys Home Store, using products from Eagle Building Supplies. Fresh Food
Café is next to Deweys Home Store.
Refer to Fact Pattern 16-1. The value of Fresh Foods property will increase after
Deweys store is remodeled. Fresh Food is
a. a delegatee.
b. an assignee.
c. an incidental beneficiary.
d. an intended beneficiary.
In a suit against Evan, Floyd obtains an injunction. This is
a. an order to do or to refrain from doing a particular act.
b. an order to perform what was promised.
c. a payment of money or property as compensation.
d. the cancellation of a contract.
Teresa is a celebrity. Without her permission, Sinclair Enterprises includes in an ad an
image that resembles her. Sinclair does not use Teresas name or actual likeness. This is
most likely
a. appropriation.
b. conversion.
c. no tort.
d. slander of quality.
Grady, an obese individual, files a suit against Fry Fast Food Corporation (FFFC),
alleging that FFFCs food is unhealthy because, as Grady knows, it contains high levels
of cholesterol and saturated fat. Grady is most likely to
a. lose, because Grady assumed the risk when he bought FFFCs food.
b. lose, because Grady knows of the foods unhealthiness.
c. win, because FFFCs food poses an unhealthy risk to Grady.
d. win, because Grady knows of the foods unhealthiness.
Amber shops in a Breezy Bargains store, whose employee Connor recently mopped the
floor. Amber slips, falls, and suffers an injury. Breezy is liable to Amber on a
negligence theory if there was a “Wet Floor warning sign and
a. Amber cannot read it.
b. Amber was distracted by other patrons.
c. Amber was enticed by a nearby display.
d. Connor did not place the sign near the wet floor.
Digital Architecture, Inc., agrees to design robotic software for equipment owned by
Chassis Assembly Corporation. Whether or not this agreement meets all of the
requirements of a contract, the parties are most likely to follow the rules of contract law
because they
a. want to avoid potential disputes.
b. are conscious of those rules.
c. are not conscious of those rules.
d. have a moral obligation to do so.
Gina induces Hu to enter into a contract for the purchase of a condominium about
which Gina knowingly misrepresents a number of material features. When Hu discovers
the truth, Hu can
a. not rescind the contract.
b. rescind the contract on the basis of fraud.
c. rescind the contract on the basis of mistake.
d. rescind the contract on the basis of undue influence.
Intoxicated but fully aware of the consequences, Uri agrees to a two-year cell-phone
service contract with Wander Talk, Inc., at more than the average market price. This
contract is
a. enforceable.
b. not enforceable because contracting parties can change their minds.
c. not enforceable because the contract clearly favors Wander Talk.
d. not enforceable because Uri was intoxicated when he agreed to it.
Tyrone transfers a note by signing it and delivering it to Uri. Tyrone is
a. an indorser.
b. a notary.
c. a note passer.
d. a promisor.
Darling is the secured party in a secured transaction with Elmo. In this transaction,
Darling
a. has a security interest.
b. owes payment.
c. owes performance.
d. owns collateral.
Fact Pattern 28-1A
Dollar Value Motors asks Estimable Bank for a loan to increase its vehicle inventory.
Estimable requires Flair, Dollar Values president, sign a personal guaranty to pay the
debt if Dollar Value defaults. Meanwhile, to buy a pick-up truck from Dollar Value,
Gina asks Harper to co-sign a credit application.
Refer to Fact Pattern 28-1A. If, after the loan agreement is signed, Gina agrees to a
higher rate of interest without telling Harper, then Harper is
a. discharged from the agreement.
b. liable at the higher rate of interest.
c. liable at the lower rate of interest.
d. liable for the principal only.
Faye owns the land on which Golden Spurs Ranch is situated, plus the ranch house,
barn, and other structures permanently attached to the land. Fayes brother Huey owns
everything else in the ranchs operationlivestock, feed, and so on. The personal property
is owned by
a. Faye and Huey.
b. Faye only.
c. Golden Spurs Ranch.
d. Huey only.
Karif orally agrees to buy a unique collection of sports memorabilia for $1,000 from
Jane and sends her $250 as a down payment. When Karif sends her the rest of the price,
Jane refuses to ship the collection. Karif should seek
a. damages.
b. reformation.
c. rescission.
d. specific performance.
BBQ, Inc., makes and sells grills to Grill Mart, a retailer, which sells one of the grills to
Hope, a consumer. Their contracts limit consequential damages for personal injuries
arising from a breach of warranty. This is prima facie unconscionable with respect to
a. BBQ.
b. Grill Mart.
c. Hope.
d. none of these parties.
Toyoda Company buys gas pedals and other parts from subcontractors and puts them in
its vehicles without changing their composition. If the pedals or other parts are
defective, strictly liable for any damage caused by the defects are
a. neither Toyoda nor the subcontractors.
b. Toyoda and the subcontractors.
c. the subcontractors only.
d. Toyoda only.
Ryder and Sergei are partners in Timberline Gear, which sells mountain- and
rock-climbing equipment. Ryder manages the business. Unless the partnership
agreement states otherwise, Ryder is
a. entitled to compensation in proportion to his effect on the business.
b. entitled to compensation in proportion to his effort.
c. entitled to compensation in proportion to his capital contribution.
d. not entitled to compensation.
Ryan, the owner of SuperMart Stores, Inc., adheres to the “principle of rights theory.
Under this theory, a key factor in determining whether a business decision is ethical is
how that decision affects
a. the right determination under a cost-benefit analysis.
b. the rights of others.
c. the “right thing to do.
d. the right to make a profit.
Fact Pattern 29-2B
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 $500,000 from Interstate Bank, also for a security interest in the
equipment. GLC defaults on both loans.
Refer to Fact Pattern 29-2B. 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.
Elin manages a real estate development project. She wants to hire green specialists to
oversee certain stages of the project. The risks include builders who overpromise or fail
to clearly express what “green means, and subcontractors who fail to meet
environmentally friendly standards. An effective way to assess these risks is to
a. hire a skilled attorney who has worked on other green projects.
b. focus only on the initial cost of the project.
c. work with stakeholders who focus only on their specialties.
d. omit express warranties and insurance provisions in contracts.
Owen signs an installment contract with Pixel Video Store to finance the purchase of a
new Quotient-brand 3D HD-TV for $4,999. This transaction is subject to
a. no federal law.
b. the Fair Credit Reporting Act.
c. the Telecommunications Act.
d. the Truth-in-Lending Act.
Frostys Appliance Store advertises freezers at a “Special Low Price of $299. When
Garth tries to buy one of the freezers, Huey, the salesperson, tells him that they are all
sold and no more are obtainable. Huey adds that Frostys has other freezers for $2,299.
This is
a. a legitimate sales technique.
b. bait-and-switch advertising.
c. counteradvertising.
d. puffery.
Peri, a world famous musician and composer, agrees to give ten piano lessons to Quinn
in exchange for $1,000. Peris attempt to transfer her contract duties to Roth, an in-
experienced pianist, will probably be
a. permitted because contracts may be freely delegated.
b. permitted because the contract is concerned with music lessons.
c. prohibited because contracts may not be freely delegated.
d. prohibited because Peri and Roth have very different skill levels.
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.
In Islamic countries, the law is often influenced by the religious law of Islam.
To determine whether a duty of care has been breached, a judge asks how he or she
would have acted in the same circumstances.
In ethical terms, a cost-benefit analysis is an assessment of the negative and positive
effects of alternative actions on individuals.
Fred, the owner and manager of Green Grocer Store, contracts to buy sixty crates of
fresh peaches from Holly, the owner and manager of Ideal Farms. Suppose that Holly
dies before she can harvest and deliver the peaches. How does Hollys death affect their
contract? If Holly does not die, but does not deliver, and Fred suffers a loss, is there any
limit to the time within which Fred can file a suit against Holly for breach of contract?
If so, how might Fred extend this time?
A bailee has a responsibility to take appropriate care of the bailed property.
Restrictions on imports may include tariffs.
Unlike those who violate statutes, violators of agency rules are not punished.
Only serious threats of monopolization are condemned as violations of antitrust law.
A surety is primarily liable for the debt of a principal.
The UCCs good faith provision can never be disclaimed.
In a contract between merchants, additional terms in the parties separate standard forms
always automatically become part of the contract.
Under federal law, an electronic document can be as enforceable as a paper one.
It is presumed that a co-tenancy is a joint tenancy unless there is a clear intention to
establish a tenancy in common.
The basic purpose of antitrust law is to restrict competition.