Book Title
Business Law with UCC Applications 14th Edition

BLAW 50731

March 1, 2019
Tender of payment requires the buyer of goods to offer legal tender only.
In a registered limited liability partnership (LLP), each partner is personally liable and
may be sued in a separate action or in a joint action.
Maria's daughter is seriously ill. Desperate, Maria deeds her $250,000 house to a
physician for $2,500 of medical treatment. This contract is likely unconscionable.
The just war theory states that war is a function of the relationships between the leaders
of nation-states.
A trade secret agreement occurs when the producer of a product allows a purchaser to
use the product only if the purchaser agrees to respect the producer's desire for secrecy.
A disclaimer is a type of qualified opinion.
If the deceased dies without a will and is survived by no issue and no blood relatives,
the surviving spouse is entitled to the entire estate.
Furniture loans, home improvement loans, student loans, and construction loans are
examples of mortgage-backed securities.
When a debtor files for bankruptcy under the Chapter 12 Fishing Business Debt
Adjustment Act, it does not automatically create a stay on the collection of most debts.
Hospitals cannot be held liable for the negligence of a physician if that physician is not
an employee of the hospital.
If the terms of a contract make it impossible to complete the agreement within one year,
the contract must be in writing.
Janice and her daughter have a joint checking account. The basic insurance coverage by
the FDIC can protect this account only up to $100,000.
Linda puts up her land as collateral for a loan from Small Bank. Linda is a mortgagee.
Under a special warranty deed, no warranties are made as to the defects in title that
arose before the grantor owned the property.
Generally, parents are only liable for a contract executed by a minor when they cosign
the agreements.
The World Trade Organization recognizes the right of individual member nations to use
quotas to regulate imports.
Under contract law, facsimile signatures are always as valid as original signatures.
In the Nicastro v. McIntyre (2010) case, the New Jersey Supreme Court applied the
stream of commerce test to determine liability.
Subject matter jurisdiction in federal court cannot arise in cases of diversity if no
federal law is involved.
David's house suffers $5,000 of water damage due to the fire department fighting a fire
at his house. David may recover for this loss under his fire insurance policy.
The government can interfere in a woman's right to have her child if it has a compelling
interest to do so.
When a contract is unconscionable, it is said to shock the court's conscience.
Textualism insists that judges consider the legislative goals of a statute.
A 900 telephone number bills the consumer for the telephone charge.
A "click-on" acceptance is a valid method of accepting an e-contract.
A federal court that only has the power to hear immigration cases is a court of special
Utilitarianism focuses on the circumstances that an individual faces.
If an agent becomes insane, it automatically terminates the authority of the agent.
Formal criminal charges may be brought against a defendant in state court without a
grand jury being involved.
The amendments to the Identity Theft and Assumption Deterrence Act added a new
crime to the original statute, called aggravated identity theft.
Carl takes out insurance on his life and names a homeless stranger, Troy, as beneficiary.
Troy can collect the life insurance when Carl dies.
The Electoral College was a political compromise created so that the President would
be chosen by electors, rather than directly by the people.
A lease option permits a party to lease real property while at the same time holding an
option to purchase that property.
Desmond, obeying the instructions of his employer, Bigger Company, sells Harry a
computer system that is not capable of being expanded. Harry is now suing Desmond
asserting fraud, but Desmond defends that Harry did not request an expandable system.
What responsibility if any, does Bigger Company owe Desmond?
A. Bigger has no responsibilities, since Desmond has a defense to fraud.
B. As Bigger's agent following instructions, Desmond is entitled to indemnification.
C. Bigger's only duty is to cooperate while Desmond defends the lawsuit.
D. Bigger's responsibility is to support Harry's lawsuit against Desmond.
Agents are also entitled to indemnification (i.e., payment for loss or damage suffered) if
they incur a loss or are damaged as a result of a request made by the principal.
The primary purpose of tort law is to:
A. prevent and punish criminal offenders.
B. protect people from being tried twice for the same crime.
C. compensate for the injured party's loss.
D. protect victims' rights.
Nodest Co., a Delaware corporation, wants to do business in California. Since Nodest is
a foreign corporation, it ____________.
A. does not need to take any particular action
B. must incorporate in California
C. must obtain a certificate of authority from California
D. must obtain certificates of authority from both California and Delaware
Which of the following is true of a bad-check statute?
A. The payee does not have the obligation of informing the drawer of the nonpayment
of the check.
B. Bad-check statutes are effectively used as a means of collection.
C. The payee can prosecute the drawer immediately after being notified of a bad check
by the drawee bank.
D. The drawee bank can prosecute the payee in case of dishonor of a check.
____________ sees law and morality as united in a common and fundamental bond.
A. Ethical relativism
B. Social contract theory
C. Utilitarianism
D. Natural law
The insurance company's liability under comprehensive coverage is limited to the
____________ of the vehicle at the time of the loss.
A. actual cash value
B. outstanding loan value
C. replacement value
D. stated value
Courts with appellate jurisdiction are empowered to determine whether the lower courts
have made errors of law using the ____________ standard.
A. plenary review
B. clearly erroneous
C. abuse of discretion
D. de novo review
Jack and Jill live in a community property state. Jill works full time, and Jack stays
home taking care of their children. What is the legal status of the earnings Jill makes
that are used to purchase a new home?
A. Owned by Jill
B. Owned by Jill, subject to an one-third interest Jack has
C. Jointly owned by Jack and Jill
D. Owned by Jill, Jack, and the children
Generally, if the Florida Supreme Court issues a decision, that decision would be
A. persuasive precedent in all Florida state courts.
B. binding precedent in all Florida state courts.
C. binding in neighboring state courts.
D. binding precedent in all Florida federal courts.
A written promise not to sue is commonly called a:
A. consideration.
B. forbearance.
C. detriment.
D. release.
Ted gave Stanly a $300 negotiable note for repairs to his car. Stanly did not do the
repairs, but indorsed the note to Nami who did not know of Stanley's lack of work and
paid Stanly for its note. Nami gave the note to her daughter, Sopan, for Christmas and
Sopan attempted to collect the note. What is Sopan's legal status?
A. Sopan is not a holder in due course, but has the rights of a holder in due course.
B. Sopan is not a holder in due course and has no rights of a holder in due course.
C. Sopan is not a holder in due course, but does qualify as a holder in gift status.
D. Sopan has no rights, since she did not give consideration.
According to ____________, whether an action is moral or not depends on the ultimate
effects of that action.
A. natural law
B. market value ethics
C. utilitarianism
D. rational ethics
The willingness of an emancipated minor to abide by contractual obligations is:
A. ratification.
B. emancipation.
C. rescission.
D. devolution.
A(n) ____________ agreement is a written contract which identifies the secured goods
and is signed by the debtor.
A. subordination
B. security
C. consumer loan
D. equitable redemption
John knows that The Franklin Enterprises Partnership, in which John is a partner, is
interested in purchasing a particular tract of land for a business location. Can John
lawfully have his aunt buy the land, so that she may resell the land to Franklin
A. No, it violates John's duty of care.
B. Yes, assuming the price to Franklin was a fair market price.
C. No, it violates John's duty of loyalty.
D. Yes, the aunt is not a Franklin partner and has no loyalty to it.
Senator Smith, speaking on the floor of the U.S. Senate, makes a statement about Ms.
Doe, a private citizen, that is false. In order for to prevail at trial, she must prove
Senator Smith made the ____________ statement with ____________ because of his
status as a ____________.
A. disparaging; malice; public figure
B. privileged; recklessness; public figure
C. privileged; actual malice; public figure
D. false; malice; temporary public figure
The Wagner Act does all of the following except:
A. authorize the NLRB to hold hearings on unfair labor practice petitions.
B. outlaw certain practices by employers as unfair labor practices.
C. allow states to legislate right-to-work laws.
D. authorize the NLRB to conduct representative elections.
In the Opening Case, PNC Bank vs. Michael Farinacci, the main issue was whether the
defendants be held jointly liable under the old law (UPA) or jointly and severally liable
under the new law (RUPA).
Joseph owes $15,000 to Carmel Enterprises, $8,500 to Vulcan Co., $11,000 to David
and $11,500 to Sigma Enterprises. He has not been making payments on these debts for
the past 20 months. Which of these creditors can force Joseph into involuntary
A. Carmel Enterprises only
B. Carmel Enterprises and David only
C. Carmel Enterprises, Sigma Enterprises, David, and Vulcan Co.
D. Sigma Enterprises, David and Vulcan Co. only
The ____________ new world order sees the nations of the world grouped together
based on politics.
A. economic
B. ideological
C. civilizational
D. globalized
An employee who is addicted to illegal drugs could claim a disability under the ADA.
The "Opening Case" Garcetti v. Ceballos, involved a question of whether, as a
____________, ____________ memo was protected by the ____________.
A. public employee; Ceballos'; Fifth Amendment
B. public employee; Garcetti's; Fourth Amendment
C. private blogger; Garcetti's; First Amendment
D. public employee; Ceballos'; First Amendment
____________ involves any false statement communicated to others that questions the
quality of an item of property.
A. Invasion of privacy
B. Defamation
C. False imprisonment
D. Disparagement
Pogisa is a director at Trendz Corp. After studying and consulting with experts, Pogisa
votes to have Trendz sell a tract of land for $500 per acre. Within a year, the land is
worth $2,000 per acre, and Trendz shareholders want to sue Pogisa for her vote to sell
the land. Under the ____________, Pogisa may be entitled to legal protection.
A. Fairness Rule
B. Business Judgment Rule
C. Insider Trading Rule
D. Actual Authority Rule
Bill has a $500,000 life insurance policy naming his minor children as beneficiaries.
Bill is shot and killed while breaking into his neighbor's home. Will Bill's children
likely be able to collect the life insurance proceeds?
A. No, policies often do not cover the insured when he/she violates the law.
B. Yes, as it would not be against public policy for beneficiaries to receive insurance
proceeds in such a case.
C. Yes, but not entirely. They will be given an allowance for necessaries with the
balance going to others.
D. No, all the proceeds will go to a state administrated crime victims' fund.
The Federal Rules of Civil Procedure now refer to computerized evidence as:
A. electronic lockbox.
B. electronic data interchange.
C. e-commerce.
D. electronically stored information.
Which of the following is true of using the defense of failure of consideration by a
maker or drawer of an instrument?
A. It can be used when the instrument is negotiated to a holder in due course.
B. It can be used when no consideration exists in the underlying contract for which the
instrument was issued.
C. It can be used when one of the parties breaches the contract by not furnishing the
agreed consideration.
D. It can be used if a party, induced by a fraudulent statement to enter a contract, is the
holder of a negotiable instrument issued as part of the transaction.
Agnes borrowed a cup of sugar from her next-door neighbor. She intended to return the
sugar the next day. This transaction was a:
A. bailment for the sole benefit of the bailor.
B. mutuum.
C. mutual-benefit bailment.
D. bailment for the sole benefit of the bailee.
Aqua, LLC is a member-managed LLC. Andrew, a member, agrees to resolve a dispute
with a customer by submitting the claim to binding arbitration. This action by Andrew
A. legally binding on Aqua.
B. not legally binding on Aqua.
C. legally binding on Aqua if the claim is under $1,000.
D. not legally binding on Aqua until approved by a court.
____________ refer(s) to the body of previously recorded legal decisions made by the
courts in specific cases.
A. Statutes
B. Amendments
C. A constitution
D. The common law
In a joint tenancy, time, title, interest, and possession are known as the four:
A. certainties.
B. factors.
C. unities.
D. components.
A(n) ____________ is a promise to do something that one is already obligated to do by
law or some other agreement that cannot be made consideration for a new contract.
A. reaffirmation
B. option
C. promissory estoppel
D. preexisting duty
Which of the following statements holds true for employee responsibilities under the
Family and Medical Leave Act (FMLA)?
A. Employees must notify the employer at least 30 days before they intend to take the
B. Employees need not notify the employer if the need for a leave is unpredictable.
C. Employees must accept the right of the employer to offer reduced pay on their return
after the leave.
D. Employees must discharge partial duties during the period of the leave.
Martina flew her ultra light airplane 200 feet above the surface of a vacant lot owned by
Jacobs. When Jacobs complained, Martina claimed she was flying in navigable
airspace. Was Martina correct? Explain.
Ruben promises to pay Talana $200 if she steals Jessica's business law textbook. Talana
steals the business law book, but Ruben, who now feels guilty for his act, refuses to pay
Talana and asks her to return the book. Discuss ways in which Reuben has breached the
Sally is angry with George, her attorney, and wants to sue him for malpractice. Discuss
what Sally must prove to win her case.
An undercover police investigator logs into a computer chat room posing as a 15-year
old girl. An older man, knowing the asserted age of the "girl", suggests that they meet at
a local motel and expresses his intentions. The man checks into the motel at the
pre-arranged time, and is arrested for attempted statutory rape under a state Internet
enticement law. Discuss the case in brief.
Warren left his watch to be cleaned at a jewelry store. By mistake, a clerk sold the
watch to Foley. Foley did not know that the watch rightfully belonged to Warren.
Analyze the case.
Due to a severely cold winter, the city's water mains connected to Mountain Apartments
froze and broke leaving Mountain tenants without water or heat from the Mountain
boiler. Discuss what liability, if any, Mountain has to the tenants.
Andrews forged the signature of Baumann on a check and gave it to Callas in payment
for merchandise. Callas indorsed the check and delivered it to Davis as down payment
on a car. When Davis presented the check to the bank for payment, the forgery was
recognized. Callas claimed that he was not liable to Davis because he had no
knowledge of the forgery. Discuss.
Samantha applied for a personal loan at a local bank in Illinois. The bank asked her to
fill in an application form in which she was asked for her employment and marital
status, as well as her age and her Social Security number. After reviewing her
application, the bank denied her the loan because, it said, she was a 43-year-old
divorcee—albeit a successful attorney—who received alimony payments and therefore,
constituted a high risk. Analyze the case and Samantha's rights.
Jarvis Enterprises ordered 50 boxes of blueberries from Agricultural Wholesalers, Inc.
Agriculture delivered 50 boxes of blackberries. Jarvis rejected the blackberries and
attempted to contact Agriculture. After many unsuccessful attempts, Jarvis decided to
sell the blackberries to Cold Ice Cream Co. for $500. Jarvis was ready to forward the
money after deducting its expenses and a commission to Agriculture, but when
Agriculture learned the sale price, it objected. Agriculture feels that the blackberries had
a fair market value of $1,200, and that Jarvis sold the blackberries too cheaply. Discuss
the legal rights and duties of Jarvis in this situation.
Jasmine discovered that she had been slammed by her old company, Voicetone, after
she had paid her telephone bill to the company, Distant Enterprise. Discuss Jasmine's
legal rights.
When Kiros and Alphonse entered into a partnership agreement, they decided to submit
all disputes to binding arbitration and included this clause in their partnership
agreement. When a dispute arose, an arbitrator was called in and passed judgment
against Kiros. Kiros appealed to the courts, and the arbitrator's ruling was overturned.
Discuss a possible explanation for this.
The Pillsbo Corporation failed to file annual reports for three years. The Secretary of
State in the state where Pillsbo incorporated told Pillsbo's chief executive officer that
she was going to ask the state attorney general to bring a quo warranto action against
Pillsbo for failing to file the annual reports. Can she legally do so for this reason? Why
or why not?
Striuli asks Sarducci to become a limited partner in Avionics Ltd., a limited partnership
that will sell computer software. Both Striuli and Sarducci delay filing the certificate of
limited partnership. If the limited partnership is sued before the certificate is filed, will
Sarducci be named as a defendant? Explain.
Malone purchased a painting by Van Gogh and took out a $1 million insurance policy
on it.
Rae's mortgage payment check is received a day late by Big Bank. Big Bank refuses the
check and accelerates the mortgage debt. Rae is unable to pay this demand, and Big
Bank brings action to foreclose the mortgage. Discuss what defenses, if any, Rae has to
the foreclosure action.