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Buddy was hired to play drums for a rock group scheduled to tour the Midwest. Part
way through the tour, Buddy was tragically killed in a plane crash. The tour had to be
discontinued until a new drummer could be found. The band lost money on the tour. Is
Buddy's estate or agent responsible for the loss to the band?
A bailee always has a right:
a. to possession of the bailed property. Anyone who interferes with this right is liable to
the bailee. Even the bailor himself is liable for wrongful interference with the bailees
possession.
b. to use the bailed property.
c. to compensation.
d. All of the answers are correct.
Most contracts are discharged by mutual agreement of the parties.
a. True
b. False
Shirley is an actress under contract with Twentieth Century. Shirley agreed to perform
the lead role in a musical to be filmed in Hollywood by Twentieth Century. At the last
minute, Twentieth Century decided to scrap the musical and assigned its rights in
Shirley to MGM. MGM was planning to film a western in Australia requiring Shirley to
spend six months filming in Australia. Can Shirley successfully prevent this
assignment?
The only defense available to a defendant in a per se violation is that the violation never
occurred.
a. True
b. False
The UCC "perfect tender" provision provides:
a. the buyer can reject the entire shipment if any portion of the goods are
nonconforming.
b. the buyer must accept the goods if the defects are minor and correctable.
c. the buyer may not accept the conforming part of a shipment and reject the
nonconforming part.
d. a buyer must reject nonconforming goods.
Under the Uniform Commercial Code, an agreement modifying a contract:
a. always requires consideration.
b. requires consideration only when the sale of goods is involved.
c. may not require consideration.
d. requires consideration only when one of the parties is incompetent.
The 1933 Act prohibits fraud only in transactions involving registered securities.
a. True
b. False
Alimony and child support obligations are considered priority claims.
a. True
b. False
Forever Yours, Inc. has a secured and perfected security interest in Sally's big-screen
TV. On the filing date of Sally's Chapter 7 petition, the balance of the debt owed to
Forever Yours is $2,000. The value of the TV is estimated at $1,500. This means that
Forever Yours:
a. is secured for the entire debt, $2,000.
b. is unsecured for $500, the excess of the debt over the value of the TV.
c. has a high priority claim of $500. This means that Forever Yours, Inc. will be allowed
$500 worth of other unsecured property before other unsecured creditors get anything.
d. is unsecured for the entire debt.
Under the UCC, no warranty of title arises unless the contract is in writing.
a. True
b. False
Punitive damages are intended to punish the defendant for conduct that is extreme and
outrageous.
a. True
b. False
An illusory promise is valid consideration.
a. True
b. False
Wever, Inc. is considering relocating a facility to Mexico. The interests of the various
stakeholders affected by this decision may conflict.
a. True
b. False
On January 8, Quastrar, Inc. sent Hylavian Company a letter offering to sell $10,000 in
restaurant supplies. On January 18, Hylavian mailed a letter to Quastrar accepting the
offer. Quastrar received the acceptance letter on January 20. On January 17, Quastrar
sent a letter revoking the offer. Hylavian received this letter on January A contract
between Quastrar and Hylavian:
a. was not formed because the revocation was effective before the acceptance was sent.
b. was not formed because the revocation was effective before the acceptance was
received.
c. was formed on January 18.
d. was formed on January 20.
Candy, Inc. signed an agreement with Sweet Plantation. Under the contract, Candy, Inc.
agreed to purchase all the sugar cane Sweet Plantation grew during the coming season.
This contract will be unenforceable due to its vagueness.
a. True
b. False
The Sherman Act was designed to prevent extreme concentrations of economic power.
a. True
b. False
The Computer Fraud and Abuse Act prohibits all but which of the following?
a. Computer trespass.
b. Sending spam.
c. Negligent damage to a computer attached to the Internet.
d. Trafficking in computer passwords.
Tuan, Inc. contracted to buy 200 monogrammed blankets from Titex, Inc. Tuan paid for
the blankets in advance. Before segregating and monogramming the blankets, Tuan
filed for bankruptcy. Tuan will not be able to recover the blankets because:
a. Tuan is a merchant.
b. the blankets were not identified to the contract.
c. Tuan became bankrupt after the contract was formed.
d. the goods were specially manufactured.
John discovered his company's accountant was 'skimming" money from the business.
The accountant agreed to pay John a one-time payment of $25,000 not to report the
skimming to company officials. The accountant promised she would pay the money
back when she could. John accepted the money and never reported what he knew. A
year later the accountant was fired when the embezzlement was discovered. She was
also prosecuted for theft. The payment to John was never discovered. Which statement
is correct?
a. John's act was unethical and illegal.
b. John's act was unethical but not necessarily illegal.
c. John's act was ethical since he believed the accountant would return the money;
however, it was illegal.
d. Based on the facts, John's conduct was both ethical and legal given the special
circumstances of this case.
The Sarbanes-Oxley Act makes it a crime to retaliate against someone who blows the
whistle on any federal offense.
a. True
b. False
Raymond agrees to transfer an easement right to Sandra for $1,000. This contract is
within the statute of frauds and therefore needs to be in writing to be enforceable.
a. True
b. False
Dewayne sold a space heater to Vivian, telling her it would heat a 200-square-foot area,
even though he knew it would effectively heat only about one third of that space.
Dewayne is liable for the intentional tort of fraud.
a. True
b. False
President Nixon issued wage-price controls in an effort to stabilize the economy. This
use of executive power was:
a. an illegal usurpation of legislative powers which belong to the Congress.
b. a valid use of power, known as an executive order.
c. a valid use of power creating a treaty.
d. an illegal usurpation of the regulatory powers of administrative agencies.
Which of the following offers are considered to be irrevocable for a given period?
a. Firm offers.
b. Option contracts.
c. A writing signed by a merchant offering to hold open an offer for the sale of goods
for a stated period.
d. All of the above.
Rest Well Hotel orally ordered 1,000 blankets monogrammed with its initials, RWH,
from TriColor Textiles. TriColor had just finished monogramming the blankets when
Rest Well called and canceled the order. TriColor will be able to enforce the agreement
even though there was no writing.
a. True
b. False
Contracts generally do not require bargaining that leads to an exchange between the
parties.
a. True
b. False
In January, Eddie contracts to sell 100 bushels of soybeans that fall. This contract:
a. is void. He cannot contract to sell a crop before it is even planted; the goods must be
in existence.
b. is void. The soybeans must be identified to the contract at the time he contracts to sell
them.
c. can be valid; but title to the soybeans cannot pass until the soybeans exist.
d. can be valid, and title to the soybeans passes when the contract is signed.
In a tort case, the statute of limitations runs from the time the defect was discovered.
a. True
b. False
Harriett raises and sells hippos. In order to keep her hippos happy and healthy, she feeds
them Hippo Chow, which she buys from the local pet store. Under the UCC, Harriett is:
a. a merchant of both hippos and Hippo Chow.
b. a merchant of hippos, but not of Hippo Chow.
c. a merchant of Hippo Chow, but not of hippos.
d. not a merchant of either hippos or Hippo Chow.
When promissory estoppel is used by the courts, it is because there is NOT an
enforceable contract present.
a. True
b. False
Seth told the salesperson at Outdoor Times that he wanted the sleeping bag that was
advertised in the Sunday paper; one that would keep him comfortable if the temperature
drops to 10 degrees Fahrenheit. The salesperson told Seth they were sold out of that
bag, but there were two other styles that would meet his needs and were the same price.
Seth insisted he wanted the advertised bag and threatened to sue for breach of contract.
Which is true?
a. Outdoor Times is guilty of "bait and swap.
b. Seth will prevail in his case, as Outdoor Times is responsible for having sufficient
stock of advertised items.
c. Seth will not prevail, as the advertisement was simply an invitation to negotiate.
d. Outdoor Times must provide Seth with a raincheck, ensuring he can buy the same
bag at the sales price at a later date.
Which statement is true about definitions in a contract?
a. All ambiguous terms must be defined.
b. Definitions must be grouped together in a separate section of the contract.
c. Definitions must be located on the same page where the term is first used.
d. The parties to the contract may be defined with shorter designations than their actual
names.
Suppose that Lenny Lawyer enters into an agreement with Cindy Client that his fee will
be a percentage of the recovery Lenny obtains for Cindy in her pending divorce. State
law makes such a contingency fee arrangement illegal in divorce actions. What will be
the probable outcome if Lenny attempts to enforce the agreement?
a. The contract will be valid. Cindy would not have been able to afford an attorney
otherwise and therefore Lenny was doing a public service.
b. The contract will be voidable at Cindy's option.
c. The contract will be void as violating a statute. Lenny will not be able to recover
anything.
d. The contract will be unenforceable if Lenny did not get the agreement in writing.
Briefly discuss how an offer can be accepted. Include offers for both bilateral and
unilateral contracts.
Peter purchased a new car from Monster Motors. As he drove away from the dealership
in the new car, the steering mechanism failed. Peter lost control of the car and plunged
down an embankment. Peter was seriously injured. If Peter sues the car manufacturer
under strict liability, what does he have to prove? Will Peter be successful?
Herb was interviewed for a job on Wednesday. The employer orally offered Herb a job
right on the spot. Herb orally agreed to start working the following Monday, to be
employed from that Monday, for one year thereafter. Three weeks after starting the job
Herb was fired without cause and replaced by the employer's friend. Will Herb be
successful in an action brought against the employer for breach of contract?
Compare and contrast the following forms of business organization: sole proprietorship,
general partnership, limited partnership, limited liability company, and corporation as to
ease of formation, liability of owners, management, and tax implications.
Identify the term for and discuss the legality of a governments taking of property owned
by foreign investors. Discuss what action a company might take if it wants to do
business abroad but is concerned about losing its property to a foreign government.
Discuss the four most important limitations on the power of federal administrative
agencies.
Discuss the purpose of an injunction and how the two types of injunctions covered in
the textbook are used.
Misha, Gretchen, and Sam were stranded on a mountainside after their plane went down
in a snow storm. They had no means of radio communication and virtually no food or
other supplies. After 18 days, Misha and Gretchen killed Sam, the weakest survivor.
Misha and Gretchen ate Sam. This allowed them to survive until they were rescued.
After they were rescued, they were charged with premeditated first degree murder
under the relevant state statute. Discuss the three schools of jurisprudence and how each
would influence a finding of guilt or innocence for the three charged.
Define discovery, and identify and explain five of the most important forms of
discovery.
Explain when presentment warranties apply. Identify the presentment warranties on a
check and a promissory note.
Discuss common abuses that occur with auctions on the Internet and how these abuses
are being addressed.
Kalina is the CEO of Northfield Corporation. Who sets her compensation, and what
types of compensation would she likely receive in addition to her salary? Can
shareholders do anything to challenge her level of compensation if they think it is
unfairly high in comparison to average employee compensation within the company?
Briefly define a patent, copyright, and trademark and distinguish among them.
List the warranties a transferor of a negotiable instrument makes.
Alex worked for years for MegaCorp. During his employment with MegaCorp, he
learned a great deal of confidential information and knew that if this information got
into the hands of competitors or the general public, MegaCorp could suffer great
business losses. Alex claims that he was wrongfully fired by MegaCorp and accordingly
he believes he has no obligation to MegaCorp to keep any information he acquired with
them as confidential. MegaCorp claims that Alex is under a continuing duty to keep
confidential information secret, even though he is no longer with the company. Who is
right? Why?
Rick wrote a song entitled "Wonderful." At the bottom of the first page of music he
wrote " 1990 by Rick Reed." Four months later a local band was playing his song at a
bar. Rick felt that the bar was an inappropriate setting for his music. What is his
remedy?
What is a limited liability company? Explain the advantages and disadvantages of this
type of business ownership?
List the types of agreements that are within the statute of frauds and explain the
consequences if the parties do not comply with the requirements of the statute of frauds.
