Michael, a citizen of Ireland, and Nina, a citizen of the United States, enter into a
contract. When Nina breaches the contract, Michael obtains an award of damages in an
Irish court. He asks a U.S. court to enforce the award. The U.S. court defers to and
enforces the Irish courts decree. This is
a. a travesty of justice.
b. the act of state doctrine.
c. the doctrine of sovereign immunity.
d. the principle of comity.
Eton files a suit in a federal district court against Florida, alleging employment
discrimination under the Age Discrimination in Employment Act of 1967. The state
asks the court to dismiss the suit. The court is most likely to rule that
a. the state is immune from the suit.
b. the suit can proceed.
c. Eton is immune from any defense the state might offer.
d. the court is immune from such request.
Fact Pattern 37-1B
Brad, Carlos, and Dora are general partners in Eastside Physicians, a medical clinic.
Their agreement states it is a breach of the agreement for any partner to assign his or
her interest to a creditor without the consent of the other partners.
Refer to Fact Pattern 37-1B. Brads dissociation from the firm results in
a. the automatic termination of the firms legal existence.
b. the partnerships buyout of Brads interest in the firm.
c. the immediate maturity of all partnership debts.
d. the temporary suspension of the partnerships business.
Special Roast Coffee, Inc., processes and sells a variety of coffee products. Special
Roasts product packages must include
a. the company owners identity.
b. the contents net quantity.
c. the restaurants and stores in which the product is sold.
d. the type of consumer most likely interested in the product.
Safe-T-Made Company makes electrical cords and other connectors for electronic
devices. Rowena files a product liability suit against Safe-Rite, alleging a warning
defect. Under the Restatement (Third) of Torts: Products Liability, in deciding whether
to hold Safe-T-Made liable, the court may consider
a. the expectations of the seller.
b. the identities of the companys owner.
c. the intentions of the manufacturer.
d. the characteristics of expected users.
Office Reports Corporation (ORC) orders five Zippy-brand inkjet printers from Prime
Printers, Inc. (PPI), to be delivered by PPI. Before PPIs truck arrives with the goods,
ORC tells PPI it will not pay. The printers are destroyed in transit. The loss is suffered
by
a. all of the parties insurance companies pro rata.
b. Zippys insurance company.
c. ORC to the extent of a deficiency in PPIs insurance coverage.
d. PPI to the extent of a deficiency in ORCs insurance coverage.
Pure Oil Company enters into a contract with QuikBilt, Inc., to construct an offshore oil
pipeline to withstand specific conditions. If QuikBilt fails to meet this standard, which
is construed as a breach of contract and a breach of a duty of care, Pure might be
awarded punitive damages to
a. establish, as a matter of principle, that QuikBilt acted wrongfully.
b. provide Pure with funds for a foreseeable loss beyond the contract.
c. provide Pure with funds for its loss of the bargain.
d. punish QuikBilt and deter others from similar acts.
Natures Foods, Inc., orders “Grade A oil from Olive Grove Farms to process and sell to
Pic N Pay Grocers. Olive Grove ships “Grade B oil, which Natures Foods accepts. To
recover damages for the nonconformity, Natures Foods must give notice of the breach
within a reasonable time to
a. Olive Grove.
b. Pic N Pay.
c. no one.
d. the appropriate government agency.
Flip Gymnastics & Karate, Inc., grants a franchise to Gibby to operate a Flip gym. Flip
may require Gibby to pay the franchisor a percentage of his
a. annual sales or volume of business.
b. weekly payroll expense.
c. monthly overhead savings.
d. none of the choices.
Cory enters into a contract with Diane to act as her personal sports trainer. If they later
dispute the meaning, and the contract contains unclear terms, the rules of contract
interpretation will give effect to
a. the parties intent as expressed in their contract.
b. what the defendant claims was the parties intent.
c. what the plaintiff claims was the parties intent.
d. what the parties now agree they intended.
Fact Pattern 15-B1
Odell and Pete sign a contract for the sale of Odells Pizza Parlor to Pete. The parties
intend their written contract to be a final statement of most, but not all, of the terms of
their agreementOdell must first buy the building from Quin, after which Odell and Pete
will negotiate a final price.
Pete later disputes some of the provisions of the deal with Odell. If the dispute results in
litigation, a court will most likely admit evidence of
a. ambiguous additional terms.
b. consistent additional terms.
c. contradictory additional terms.
d. fraudulent additional terms.
Joe sees Karo floundering in Lake Rough Waters. Joe is liable on the ground of
negligence
a. if Joe attempts to rescue Karo and Karo drowns.
b. if Joe does not attempt to rescue Karo and Karo drowns.
c. if Joe does not attempt to rescue Karo whether or not Karo drowns.
d. under no circumstances.
Jill tells Ken, who has no knowledge of literary comedy, that she will tutor him in the
subject for $50. As an offer, this is
a. effective.
b. not effective, because comedy is not a serious subject.
c. not effective, because Jills tutoring will be subjective.
d. not effective, because Ken has no knowledge of the subject.
Kai files a suit against Lana based on one of Lanas statements that Kai alleges is
fraudulent. To give rise to fraud, the statement must be one of
a. emotion.
b. fact.
c. illusion.
d. opinion.
Fact Pattern 21-A1
Internet Cafés, Inc., contracts to buy all of its requirements for coffee, at a minimum of
1 million pounds per year, from Java Corporation for six years. After three years,
Internet tells Java that it plans to sell its assets to Bagel Bistros, Inc. Bagel Bistros
refuses to assure Java that it will continue Internets contract.
Bagel Bistross refusal is
a. a justified response based on Bagel Bistross relation to the contract.
b. an assignment of Internets rights under the contract.
c. a reasonable suspension of performance under the contract.
d. a repudiation of the contract.
Trustworthy Insurance, Inc., has a valid reason to cancel a policy issued to USA Sales
Company. In most states, Trustworthy could cancel the policy on
a. advance oral notice.
b. oral or written notice, advance or contemporaneous.
c. without notice.
d. advance written notice.
Sweet Tooth Pastries, Inc., and other bakers refer to a “bakers dozen as consisting of a
collection of thirteen baked goods. This is an example of
a. course of dealing.
b. course of performance.
c. square dealing.
d. usage of trade.
California caps noneconomic damages in medical malpractice cases at $250,000.
California and other states hope that such limits will reduce health-care expenditures by
reducing
a. the frequency and severity of medical malpractice claims.
b. the frequency and severity of occurrences of medical negligence.
c. the number of legal and financial personnel, including attorneys.
d. the size of medical staffs, including “nonessential personnel.
Dhani is the beneficiary of a life insurance policy on Elmos life obtained from Famous
Insurance Company. The insurer of this policy is
a. Dhani.
b. Elmo.
c. Famous.
d. the agent or broker through whom the policy was obtained.
Bree is a real estate broker licensed only in Minnesota. She concludes a sale in North
Dakota on OReillys behalf. Brees contract with OReilly to be paid a certain
commission for the sale is
a. enforceable if OReilly comprehended the consequences.
b. enforceable if OReilly knew Bree was not licensed in North Dakota.
c. enforceable if the amount of her commission is reasonable.
d. unenforceable.
Maple Products Corporation is a public company, which New Hampshire regulates and
in which Orin invests. The Sarbanes-Oxley Act of 2002 introduced direct federal
corporate governance requirements to
a. public companies.
b. private investors.
c. state regulators.
d. none of these choices.
Philomena dies without a will. A court appoints Quigley to handle the probate of
Philomenas estate. The administrator of the estate is
a. Philomenas closest blood relative.
b. Philomena.
c. Quigley.
d. the court.
In the ordinary course of business, EZ Funds Corporation offers credit to Fay and other
consumers and reports on the loans to credit agencies. To save time and money, EZ
generally does not correct or update its reported information. This is most likely to
result in
a. a levy of a nominal fine.
b. an assessment of damages.
c. an order of rescission of the loan contracts.
d. no sanctions.
Fact Pattern 28-2B
Rico signs a lease on behalf of Start-Up Games, Inc., with Tower Office Suites. As part
of the lease, Rico signs a document titled “GUARANTY, which states that it is “an
absolute guaranty of the leases performance.
Refer to Fact Pattern 28-2B. The reason for the result in the previous question is that
a. Rico signed a “GUARANTY.
b. Tower Office Suites owns the property and can re-rent the premises.
c. the other tenants can equitably absorb a slight increase in rent.
d. Start-Up will likely move out when it stops paying the rent.
Massive Equipment Company and Wastewater Management Corporation agree in
writing to submit a dispute to arbitration. In most circumstances, submission to
arbitration is possible
a. for any commercial matter.
b. for no commercial matter.
c. only after a dispute arises.
d. only before a dispute arises.
Fact Pattern 40-1A
Ruben is a shareholder of Speed Bikes Company (SBC). When the directors fail to
undertake an action to redress a wrong suffered by SBC, Ruben files a suit on the firms
behalf.
Refer to Fact Pattern 40-1A. Any damages recovered by Rubens suit will normally go
to
a. Ruben.
b. SBC.
c. SBCs directors.
d. the state in which SBC is incorporated.
Based on Blutos conduct, Cass reasonably believes that Dee has the authority to act on
Blutos behalf even though Dee does not have the actual authority to do so. Cass makes
a payment to Dee for Bluto. Dee keeps the money and disappears. Bluto
a. can demand that Cass make a repayment directly to Bluto.
b. can obtain damages from Cass for Dees misconduct.
c. may be estopped from denying that Dee had authority.
d. must repudiate Dees misconduct to avoid liability.
Ghani is Hueys agent. Ethically, Ghani cannot
a. disclose Ghanis interest in property that Huey is buying.
b. exhibit loyalty to Huey.
c. profit from the agency relationship, even with Hueys consent.
d. represent Ilya in a transaction with Huey.
Rodeo Ranchs agent Slim is authorized to write checks on Rodeo Ranchs account in
Town Bank. Upper Range Corporation is a Rodeo Ranch supplier. Slim writes a check
on Rodeo Ranchs account “pay to the order of Upper Range [signed] Slim, indorses it
in Upper Ranges name, and deposits it in his own account in Verity Bank. If Verity
Bank collects payment, the ultimate party most likely to suffer the loss is
a. no one.
b. Rodeo Ranch.
c. Town Bank.
d. Upper Range.
Fact Pattern 35-1A
Erasmus applies for a job at Drain-Pro Plumbing & Repair LLC for which he is well
qualified. He passes a test to determine which applicants are eligible for hiring, but the
employer discards the results, and Erasmus is rejected. Drain-Pro continues to seek
applicants.
Refer to Fact Pattern 35-1A. Erasmus files a suit against Drain-Pro under the Civil
Rights Act of 1964, claiming reverse discrimination. To support this claim, Erasmus
must show that he is a member of
a. a protected class.
b. a majority group.
c. an employers association.
d. a union.
Great Plains Bank provides a loan to enable Helene to buy real property. This loan is
a. a down payment.
b. a mortgage.
c. a short sale.
d. a workout agreement.
Elle is a trustee for a federal bankruptcy court. Elles duties include
a. collecting the property in a bankruptcy estate.
b. establishing priority for the payment of unsecured creditors.
c. operating a debtors business to obtain maximum profit for creditors.
d. submitting to an examination under oath by the creditors.
Intentional cancellation of an instrument discharges the liability of all parties.
A business firm may have to comply with the laws of any jurisdiction in which it
actively targets customers.
A seller with void title can transfer good title to a good faith purchaser for value.
Exchanging pirated, copyrighted works with others is not infringement unless money is
involved.
An agency relationship created for a purpose that is illegal is unenforceable.
An action may be legal and ethical.
Only through its agents can a corporation function and enter into contracts.
Exchanging pirated, copyrighted works with others is not a crime unless money is
involved.
In a repayment plan case, the plan must provide for payment of all obligations in full.
Venue is the term for the subject matter of a case.
Due to a lower default rate, lenders charge a lower interest rate for subprime loans.
Malpractice is professional negligence.
Harbor Bay Development hires Guthrie to act as its agent to buy a 100-acre waterfront
tract of land from Frankie for $1,000 per acre. Harbor Bay does not want Frankie to
know that it is the principal or that Guthrie is its agent. Harbor Bay wants the land for a
new marina, and believes that Frankie may not sell the land for that purpose or may
demand a premium price. Guthrie makes the purchase, signing only his name on the
contract as the buyer and not disclosing to Frankie the agency relationship. Harbor Bay
gives Guthrie the amount to pay for the land, but Guthrie absconds with the funds.
Frankie soon learns of Harbor Bays identity. Can Frankie enforce the contract against
Harbor Bay? against Guthrie?
A corporation that is selling all of its assets must obtain approval only from its board of
directors.
Most group boycotts are legal.
Tira obtains two fire insurance policies on her house. Each is an open policy with a pro
rata clause. Tiras policy with Unity Insurance Company is for a maximum amount of
$100,000. Her policy with Verity Insurance Company is for a maximum amount of
$50,000. Each policy includes a pro rata clause. Due to defective electrical wiring, Tiras
house catches fire and burns completely. The value the house at the time of the loss is
$120,000. Tira files a proof of loss with each insurer. What is an open policy? What is a
pro rata clause? What is the liability of Unity and Verity for this event?
A will is probated in part to establish its validity.
The chief aim of the European Union and other trade organizations is to minimize trade
barriers among their members.