Sparky offers Teodora $1,000 for her collection of rare coins. She accepts. If a dispute
arises, a court would likely
a. enforce the deal after questioning the adequacy of consideration.
b. not question the adequacy of the consideration.
c. rewrite the deal after questioning the adequacy of consideration.
d. set aside the deal after questioning the adequacy of consideration.
Shade Tree Lending Corporation advertises loans as fixed-rate loans but, in fact, their
rates or payment amounts will change. This is
a. a legal and ethicalbut morally arguablefinancial ruse.
b. a legalbut unethicalbusiness practice.
c. a necessary tactic to generate a profitable loan in today’s market.
d. a violation of the law.
Utility Power Company has the right to run its power lines across Velma’s land. This is
a. a license.
b. an easement.
c. a profit.
d. a tenancy at sufferance.
Refined Commodities, Inc., agrees to deliver ten tons of sheet metal to Select Builders
Corporation. The agreement states that delivery is to be within “3” days, although the
parties intend “30” days. Refined cannot convince Select to amend the contract. Refined
should seek
a. damages.
b. reformation.
c. rescission.
d. specific performance.
Opal conveys three acres of wetlands to Pristine Places, Inc., with a deed that warrants
only that Opal held good title during her ownership of the property. This deed is
a. a grant deed.
b. a quitclaim deed.
c. a special warranty deed.
d. a warranty deed.
Lebron, an attorney, allows a statute of limitations to lapse on a claim by Midwest
Metal Fabrication Company, a client. Lebron
a. can be held liable for malpractice.
b. has violated an ethical standard but cannot be held liable.
c. is subject to criminal penalties under the statute of limitations.
d. will be automatically disbarred.
Grain Farms, LLC, and Harvest-to-Market Truck & Transport Company sign a written
contract that does not involve a sale of goods. To be enforceable, the writing must
include
a. a correct title, such as “Shipment Contract.”
b. all essential and nonessential terms.
c. a statement of the consideration.
d. a description of the parties’ businesses.
NutriRich, Inc., sells fifty cases of Omega 3 capsules to Good Health stores, but before
Good Health takes physical possession, the cases are lost. Under the UCC, the parties’
rights and obligations with respect to the loss depend on the concept of
a. identification.
b. insurable interest.
c. risk of loss.
d. title.
Bonita and Chad enter into a contract for Chad to plant trees on Bonita’s property for
which she agrees to pay $500. When Chad’s schedule conflicts, he contacts Dirk, to
whom he “assigns all rights under the contract.” Chad is
a. absolved of any liability under the contract.
b. in breach of the contract with Bonita.
c. liable to Bonita if Dirk does not perform.
d. liable to Dirk for inducing a prohibited contract.
The payment of Eden’s debt to Flem is guaranteed by Eden’s personal property. This
property is
a. a secured party.
b. a secured transaction.
c. a security interest.
d. collateral.
Quin, an accountant, prepares for Reddy, Inc., a financial statement that omits a
material fact. The statement is included in Reddy’s registration statement with the
Securities and Exchange Commission. Timor, who reads the statement, and Ubi, who
does not, each buy Reddy stock. Velma reads the statement but does not buy the stock.
Under Section 11 of the Securities Act of 1933, Quin may be liable to
a. no one.
b. Timor and Ubi.
c. Timor, Ubi, and Velma.
d. Ubi only.
Conrad and Delilah are employees of AgriBio Feed & Seed Corporation. Under the
Equal Pay Act of 1963, AgriBio can legitimately pay different wages on the basis of
a. seniority.
b. job descriptions.
c. substantial equality of skill, effort, and responsibility.
d. gender.
Brandy forges Caleb’s signature on a check “payable to the order of Brandy” drawn on
Caleb’s account in Downtown Bank. Caleb’s forged signature is
a. effective if an innocent third party accepts the check.
b. effective to the degree that it matches Caleb’s genuine signature.
c. effective to the extent that Downtown Bank debits Caleb’s account.
d. not effective.
Tom draws a check, on his account in State Bank in New York, payable to Digital
Media, Inc., in San Francisco. Digital deposits the check in its account at First National
Bank.
Tom’s bank is
a. the cashing bank.
b. the depositary bank.
c. the intermediary bank.
d. the payor bank.
Bayou Boats, Inc., contracts for the sale of seven swamp boats to Eventide Fishing
Tours. Bayou repudiates the contract. Eventide’s recovery is measured at the time
a. Bayou advertised the goods.
b. Eventide ordered the goods.
c. Eventide learned of the breach.
d. Bayou knew that it would repudiate the contract.
Jake and John make an illegal contract that unjustly enriches Jake at the expense of
John. A court will
a. not be concerned with the unjust enrichment of Jake.
b. force Jake to pay damages to John.
c. reform the contract to prevent undue burdens.
d. enforce the contract as it was originally written.
William goes to Saddle Up Stables in the middle of the night when no one is around and
takes five saddles. William’s crime is
a. forgery.
b. larceny.
c. robbery.
d. embezzlement.
Sally contracts with Tasty Pizza Company to deliver its products. Both parties change
their minds, however, and inform each other that they would like to cancel the contract.
Sally and Tasty
a. may rescind their entire contract.
b. may rescind their contract to the extent that it is executory.
c. must perform their entire contract.
d. must perform the part of their contract that is executory.
The commerce clause of the U.S. Constitution is found in
a. Article I, Section 8.
b. Article I, Section 2.
c. Article VIII, Section 1.
d. Article II, Section 8.
The state of Illinois enacts a usury statute. The purpose is to
a. establish a maximum rate of interest that may be charged for loans.
b. establish a minimum rate of interest that may be charged for loans.
c. prevent the misuse of money advanced as loans.
d. prevent the misuse of money paid back on loans.
Reusable Energy Corporation regularly expresses opinions on political issues. Under
the First Amendment, corporate political speech is
a. discouraged.
b. forbidden.
c. protected.
d. required.
Patsy possesses twenty-four acres of remote, rugged land. Patsy has the right to use the
property, including extracting silver from an existing mine, for life. Patsy also has the
right to lease the land for a period not to exceed her life. Patsy’s ownership interest is
a. a fee simple absolute.
b. a leasehold estate.
c. a life estate.
d. the power of eminent domain.
Bridey defends against a suit for breach of contract by Continental Mortgage Company
by claiming that their deala mortgage loan secured by Bridey’s purchase of a housewas
unfair because the consideration for their contract was inadequate.
“Adequacy” of consideration refers to
a. “how much” consideration is given.
b. legally sufficient value in the eyes of the law.
c. the intangible value to a contracting party of a thing exchanged.
d. the substantiality of the consideration exchanged.
Susan is unhappy with the way her mother has made out her will. Susan has a lawyer
draft a new will and then signs her mother’s name to it without her mother’s consent.
Susan has committed
a. larceny.
b. no crime.
c. robbery.
d. forgery.
Mobile Media Company contracts to hire Nada for one year at $35 per hour, reserving
the right to cancel the contract at any time after Nada begins performance by giving two
weeks’ notice. This promise is
a. an enforceable contract.
b. an illusory promise.
c. an option-to-cancel clause.
d. a requirement contract.
Diversified Corporation’s articles of incorporation prohibit a sale of its assets without a
vote of the board of directors. Diversified’s officers sell some assets to Enterprise
Company without notice to the board. The officers also fail to pay Diversified’s taxes on
time, and some Diversified funds are not accounted for.
With respect to Diversified’s shareholders, this conduct is most likely
a. not oppressive because it is undertaken by Diversified’s officers.
b. oppressive because Diversified’s directors may be personally liable.
c. oppressive because Diversified’s shareholders may be personally liable.
d. oppressive because it departs from the standards of fair dealing.
Shae’s Caf and Tommy’s Grill form a joint venture. Shae can participate in the venture’s
management
a. only to the extent that she assumes liability for the venture’s debts.
b. only to the extent of her investment in the venture.
c. to any extent.
d. to no extent.
Jon, a law enforcement official, monitors Kelsey’s Internet activitiese-mail and Web site
visitsto gain access to her personal financial data and student information. This may
violate Kelsey’s right to
a. equal protection of the law.
b. privacy.
c. procedural due process.
d. substantive due process.
Refined Grains, Inc., agrees to sell to Sunny Breakfast Cereal Company a certain
quantity of refined oats each week but no mention is made of where the goods are to be
delivered. In general, the UCC requires that the delivery take place at
a. a neutral place of business halfway between the parties’ locations.
b. a “reasonable” place of delivery.
c. Refined’s place of business.
d. Sunny’s place of business.
Jaime, an accountant, contracts to perform services for Kase. Jaime acts in good faith
and conforms to generally accepted accounting principles, but makes a mistake in
judgment. Jaime is most likely
a. liable if Jaime failed to discover a defalcation.
b. liable if Jaime failed to discover a fraud.
c. liable if Jaime failed to discover an impropriety.
d. not liable.
The primary purpose of the Uniform Electronic Transactions Act (UETA) is to remove
barriers to e-commerce.
Thor Power Products Corporation permits its directors to be elected by cumulative
voting. This
a. allows minority shareholders to be represented on the board.
b. assures directors that they will be selected by their peers.
c. guarantees Thor’s executive officers of the final choice.
d. ensures against persons who may “cloud” the corporate direction.
Bean Vendors, Inc., and Java Bistros Corporation dispute a term in their contract.
If Bean and Java have a long-standing business relationship that they would like to
continue, they may prefer to settle their dispute through mediation because
a. the case will be heard by a mini-jury.
b. the dispute will eventually go to trial.
c. the process is not adversarial.
d. the resolution of the dispute will be decided an expert.
Eli owes Martin $10,000. Martin assigns the claim to Jack. Jack does not notify Eli of
the assignment. A week later, Martin assigns the same claim to Allen. Allen
immediately notifies Eli of the assignment. Jack
a. has priority to payment in all states.
b. has priority to payment in states that follow the English rule.
c. does not have priority to payment in any state.
d. has priority to payment in most states.
A sharing of both profits and losses is the only requirement of a partnership.
Under the Restatement (Third) of Torts, accountants can be held liable for negligence to
any third parties.
A novation requires the existence of a previous, valid obligation.
An implied warranty of merchantability does not arise in every lease by a merchant
who deals in goods of the kind leased.
When each party’s performance is conditioned on the other party’s performance,
concurrent conditions are present.
The person who owes the payment of a secured obligation is the secured party.
Shareholder voting agreements are usually held to be invalid and unenforceable.
Odiferous Waste Company is a subsidiary of Precarious Investments, Inc. Odiferous
operates a hazardous waste disposal site. QuikChem Corporation is one of many parties
who generate waste disposed of at the site. Odiferous borrows money from Regal Bank,
which takes over the site when Odiferous goes bankrupt. The Environmental Protection
Agency discovers a leak at the site. Can any of these private parties be forced to pay for
the clean up? If so, who?
The owner of intellectual property may put restrictions on the use of the intellectual
property in a license agreement.
The Administrative Procedure Act does not apply to a particular agency procedure.
The states and the federal government provide for the registration of trademarks.
If a contract requires that performance be rendered directly to a third party, the third
party is an intended beneficiary.
Normally, a franchisee determines the territory that it will serve.
Public water system operators must meet the Environmental Protection Agency’s
standards regardless of the economic and technological feasibility.
A price-fixing agreement that is reasonable does not violate antitrust law.
According to utilitarianism, an action that affects the majority adversely is morally
wrong.
Even if goods are not identified to the contract, the title and risk of loss can still pass
from the seller to the buyer.
The doctrine of promissory estoppel does not apply if there exists a clear and definite
promise.