Price-Cut Discount Stores are open to consumers. The UCC requirement of good faith
imposes
a. a higher duty on consumers than Price-Cut.
b. a higher duty on Price-Cut than on consumers.
c. no duty on either Price-Cut or consumers.
d. the same duty on Price-Cut and consumers.
John is sales manager for Kleen N Brite Products, Inc. Compared to Johns personal
activities, his business activities most likely involve
a. more complex ethical issues.
b. no ethical issues.
c. simpler ethical issues.
d. the same ethical issues.
Elmo advertises a reward for the return of his lost dog. Floyd, who does not know of the
reward, finds and returns the dog. Floyd cannot recover the reward because he
a. did not confer a benefit on Elmo by returning the dog.
b. did not know of the reward when he found and returned the dog.
c. does not need the money.
d. returned the dog.
Yvon asks Zack, “Do you want to buy one of my fishing rods? This is
a. a valid offer.
b. not a valid offer because the terms are not definite.
c. not a valid offer because Yvon did not state an intent.
d. not a valid offer because Zack did not respond.
Pilar is interested in buying a franchise from Quixotic Bike Corporation. Quixotic must
disclose material facts that Pilar needs to make an informed decision concerning this
purchase, according to
a. no law.
b. the Petroleum Marketing Practices Act of 1979.
c. the Federal Trade Commissions Franchise Rule.
d. the Uniform Commercial Code.
Diana is a state court judge. In her court, as in most state courts, she may grant in a
particular case
a. a legal remedy only.
b. an equitable remedy or a legal remedy but not both.
c. equitable and legal remedies.
d. neither an equitable nor a legal remedy.
Evelyn is a beneficiary of a business trust. As a beneficiary, she is required to
a. distribute the trusts profits.
b. assume responsibility for the trusts debts.
c. draft a written trust agreement.
d. none of the choices.
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.
Jessicas Jumpin Jelly Beans, LLC, is a limited liability company. Unless indicated
otherwise on Jessicas federal tax form, the firm will be taxed as
a. a cooperative.
b. a corporation.
c. a joint venture.
d. a partnership.
Fact Pattern 26-1B
Jake is the maker of a $2,000 promissory note payable to Kim. Kim indorses the note to
Lyron who, in turn, indorses it to Mona, who then indorses it to Neville, the present
holder.
Refer to Fact Pattern 26-1B. Neville properly presents the note to Jake for payment, but
Jake dishonors it. With timely notice to the proper parties, Neville may collect payment
on the note from
a. Kim, Lyron, or Mona.
b. Kim or Lyron only.
c. Mona only.
d. no one.
Fact Pattern 25-1B
Belle obtains a check payable to her order from Charmayne. Belle signs the back and
adds the notation “without recourse.
Refer to Fact Pattern 25-1B. When Belle signs the back and adds the notation “without
recourse, the check becomes
a. a bearer instrument.
b. an order instrument.
c. a promissory note.
d. a nonnegotiable instrument.
Kenton borrows $150,000 from Liberty Home Finance Corporation to buy a home.
Federal law concerns primarily
a. borrowers ability to avoid clear terms in financing documents when the effect may be
harsh.
b. how many loans a specific lender can make.
c. the highest prices for which real property can be sold.
d. what must be disclosed with respect to a mortgage.
Bret and Courtney form Delite Day Care, Inc. Ultimate responsibility for policy
decisions necessary to the management of corporate affairs rests with Delites
a. board of directors.
b. incorporators.
c. officers.
d. shareholders.
Mongo Ltd., a resource processor and refiner, generates waste that is discharged into
the air and water, contaminating the environment, which includes foreign countries. It
has been shown that the quickest, most effective, and most efficient way to reduce
pollution is most likely
a. economic development.
b. environmental education.
c. international protocols.
d. persuasive debating points.
Delicioso Tea Company and Savory Stores, Inc., enter into a contract for a sale of
organic tea. The contract includes the term “F.O.B. River City, which is Savorys
location. This means that the contract is
a. a bill of lading.
b. a destination contract.
c. a shipment contract.
d. a warehouse receipt.
Tyrone draws a check payable to “Cash and presents it to Urban Bank for payment.
This instrument is
a. a bearer instrument.
b. an order instrument.
c. valid but nonnegotiable.
d. void.
Glen, the owner of Harvest Farm, and Ima, the tenant of the farmhouse on the property,
may create a fixed-term tenancy by
a. deed.
b. express contract.
c. implication.
d. sufferance.
Philo wants to start a new business enterprise. Because it is difficult, if not impossible,
to keep up with the many legal rules that govern business conduct, Philo most likely
needs to consult
a. an accountant.
b. an attorney.
c. an experienced small-business owner.
d. a partner.
Bob rents a golf cart at Country Club Golf Course. The brakes are worn, and while Bob
is driving the cart, they fail. The cart crashes into a tree, and Bob is injured. Country
Club could have discovered, with reasonable diligence, that the brakes were worn.
Liability for Bobs injuries most likely rests with
a. Bob and Country Club.
b. Bob only.
c. Country Club only.
d. neither Bob nor Country Club.
In an emergency situation, Milena, an emergency medical technician, renders aid to
Lothar, who needs help. Lothar would most likely be prohibited from suing Milena for
negligence under
a. any circumstances.
b. a Good Samaritan statute.
c. a social host statute.
d. no circumstances.
Safe-T Guard Services enters into a contract to secure Taylors Business Park from
vandalism and theft between 6 p.m. and 6 a.m. nightly for six months. At the end of the
term, if there has been no vandalism or theft in the Park, Safe-Ts performance will have
been
a. absolute.
b. complete.
c. conditional.
d. substantial.
Darwin signs a check “pay to the order of Eva Marie drawn on Darwins account in First
Funds Bank and dates the check “April Eva Marie presents the check to the bank for
payment on November 12. This is
a. a stop-payment order.
b. an overdraft.
c. a postdated check.
d. a stale check.
Gorgeous 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.
Lucille, an accountant, is subject to the accounting conventions, rules, and procedures
that constitute generally accepted accounting principles (GAAP). GAAP are determined
by
a. the International Accounting Standards Board.
b. the American Bar Association.
c. the American Institute of Certified Public Accountants.
d. the Financial Accounting Standards Board.
Harvey, a resident of Indiana, has an accident with Janette, a resident of Kentucky,
while driving through that state. Janette files a suit against Harvey in Kentucky.
Regarding Harvey, Kentucky has
a. diversity jurisdiction.
b. in personam jurisdiction.
c. in rem jurisdiction.
d. no jurisdiction.
On Monday, Eve deposits in her account at First State Bank a local check for $500.
After 5:00 p.m. on Friday, from these funds, Eve can withdraw no more than
a. $100.
b. $400.
c. $500.
d. $600.
As a judge, Diane applies common law rules. These rules develop from
a. decisions of the courts in legal disputes.
b. regulations issued by administrative agencies.
c. statutes enacted by Congress and the state legislatures.
d. uniform laws drafted by legal scholars.
Zero Sum Games Corporation has forty-three shareholders. The minimum number that
must be present at a meeting for a shareholders vote is
a. all of the shareholders.
b. a quorum.
c. a proxy.
d. three of the shareholders.
The brakes on a train owned by Western & Eastern Railroad Company malfunction.
The train rolls towards maintenance workers on the tracks. Everyone gets out of the
way except Vincent, who wants to show off. The train hits Vincent, who sues United
Hydraulics, Inc., the brakes manufacturer. United Hydraulics can raise the defense of
a. a component-part manufacturer.
b. assumption of risk.
c. consumer expectations.
d. product misuse.
Dan has AIDS, Eve is blind, and both work for First National Bank. Considered
disabled under the Americans with Disabilities Act
a. are Dan and Eve.
b. is Dan only.
c. is Eve only.
d. is neither Dan nor Eve.
An agreement between shareholders to restrict the transfer of a closely held
corporations stock is illegal.
An innocent party can enforce a fraudulent contract.
Intentional failure to comply with the terms of a contract is a breach.
Vicarious liability is liability without regard to personal fault.
Unilateral conduct can not result in a violation of antitrust law.
A seller is prohibited from making an exclusive-dealing contract if the effect is to
substantially lessen competition.
Dishonor occurs when acceptance of an instrument cannot be obtained within the
prescribed time.
When a buyer has breached a sales contract, and the goods are in his or her possession,
the seller can sue to recover the purchase price.
Tangible personal property represents a set of rights and interests but has no real
physical existence.
A business plan describes a company, its products, and its anticipated future
performance.
If a party to a franchise contract fails to perform its contractual duties, the other party
may be subject to a lawsuit for breach of contract.
In a limited partnership, a limited partner has full responsibility for the partnership and
for all its debts.
A state constitution is supreme within the states borders.
A partner owes to the partnership and the other partners a duty of care.
Overestimating the value of an object is a mistake for which a court will normally
provide relief.
Under the doctrine of strict liability, liability is imposed strictly according to fault.
An oral contract for a sale of land may be enforceable if the contract has been partially
performed.
Apparent authority is authority declared in clear, direct, definite terms.