Ramblin” Country Stables contracts to buy 1,000 horseshoes from Blacksmith, Inc., for
$1 per shoe. When the market price decreases to 50 cents per shoe, Ramblin” refuses to
go through with the deal. Blacksmith can recover
a. $1,500.
b. $1,000.
c. $500.
d. $0.
On April 1 Richard arranges to buy a sixteen-speed bike from his neighbor Phil for
$500. Phil agrees to deliver the bike on May 1. Richard writes a draft for $500 payable
to Phil on May 1. In this situation, the draft is a
a. certificate of deposit.
b. time draft.
c. sight draft.
d. promissory note.
Pine Mills Corporation and Ur-Choice Lumberyards enter into a contract for a sale of
plywood. Under a destination contract, the seller must
a. allow the buyer to reject the goods for any reason.
b. deliver the goods to a particular destination.
c. inspect the goods before tendering their delivery.
d. place the goods into the hands of a carrier.
Echo takes her car to Fix-It, Inc., which repairs the car and bills Echo for $500. Echo
writes out a check drawn on Capital Bank, but later, believing that Fix-It did not repair
the car properly, issues a stop-payment order.
Capital Bank pays the check. Capital
a. can sue Echo for a wrongful stop-payment order.
b. can sue Fix-It for breach of contract.
c. can sue no one because it paid a check that was not properly payable.
d. is liable for Echo’s loss due to the wrongful payment.
As a joke, Jem takes Kyla’s business law textbook and hides it so that Kyla cannot find
it during the week before the exam. Jem may have committed
a. appropriation.
b. conversion.
c. disparagement of property.
d. trespass to personal property.
Ruth is a supervisor for Subs & Suds, a restaurant. Tim is a Subs employee. The owner
announces that some employees will be discharged. Ruth tells Tim that if he has sex
with her, he can keep his job. This is
a. harassment on the basis of sexual orientation.
b. not harassment.
c. quid pro quo harassment.
d. same-gender harassment.
In selling a 300-acre farm to Rural Land Investments, Inc., Simone tells the buyer’s
representative that the land “will be worth twice as much by next year.” This is
a. undue influence.
b. fraud.
c. a mistake.
d. an opinion.
Ellen pays State Bank $500 plus a service fee to draw a check on itself payable to Paul’s
Plumbing. Which of the following parties is responsible for paying the check?
a. Only Ellen
b. Both Ellen and State Bank
c. Only State Bank
d. None of the parties
Metal Smelting, Inc., operates a planta “major source”that emits hazardous air
pollutants for which the Environmental Protection Agency has set maximum levels of
emission. The plant does not use any equipment to reduce its emissions. Under the
Clean Air Act, this is most likely
a. a violation.
b. not a violation because a “major source” is exempt.
c. not a violation because the plant does not use any equipment.
d. not a violation because the plant is not a mobile source.
To reduce traffic, Harbor Town enacts an ordinance that allows only a few street
vendors to operate in certain areas. A court would likely review this ordinance under the
principles of
a. the commerce clause.
b. the equal protection clause.
c. the due process clause.
d. the First Amendment.
Silas sells his farm to Kathy. The title is transferred by deed. Kathy is the
a. grantee.
b. grantor.
c. tenant.
d. adverse possessor.
Ron signs an instrument using an “R” with a circle around it. With this mark for a
signature, the instrument is
a. negotiable.
b. nonnegotiable, because an initial does not state the signer’s name.
c. nonnegotiable, because an initial is not a signature.
d. nonnegotiable, because a simple initial implies a lack of binding intent.
Sam, or any U.S. citizen, can bring a civil suit in a U.S. court against a foreign entity
for
a. a tort allegedly committed in the United States only.
b. a tort allegedly committed in the United States or overseas.
c. a tort allegedly committed overseas only.
d. no purpose.
In-Home Maid Service Company uses a Web site to provide downloadable information
to prospective franchises. This online information is the equivalent of an offer that must
comply with
a. the Automobile Dealers’ Franchise Act of 1965.
b. no law.
c. the Federal Trade Commission’s Franchise Rule.
d. the state Franchise Disclosure Document, or FDD.
Playground Equipment, Inc., is subject to regulations issued by the Occupational Safety
and Health Administration (OSHA). Like other federal administrative agencies, the
OSHA was created by
a. Congress, through enabling legislation.
b. the Federal Trade Commission, through the rulemaking process.
c. the president, through an executive order.
d. the U.S. Department of Labor, through a final order.
Craig is an accountant whose clients include Digby Excavation Corporation. Elbert is
Craig’s attorney. Under the common law and by statute in many states, working papers
that Craig develops when preparing financial reports for Digby are owned by
a. Craig.
b. Digby.
c. Elbert.
d. no onethe papers must be destroyed immediately after use.
Business Computer Solutions Education Service enters into a contract to employ
Chandra as an instructor for two years to begin June 1. One month before the term
begins, Business Computer is underbid by a competitor and loses a major client, Debt
Consolidation Corporation. Business Computer now refuses to hire Chandra.
Business Computer’s repudiation of its contract to employ Chandra is most likely
a. a material breach.
b. a minor breach.
c. a condition subsequent.
d. not a breach.
Damian owns a pick-up truck and a motorcycle. He sells the motorcycle to Eden for
$10,000. Eden pays for the cycle with a check, knowing that she had insufficient funds
in her account to cover the amount. A week later, Damian files a petition in bankruptcy
for relief through a liquidation.
Regarding the pick-up truck, Damian
a. can exempt an interest in it up to $3,675 from the bankruptcy.
b. must include it as part of the estate because Damian sold the cycle.
c. must include it as part of the estate because Eden’s check did not cover the cost of the
cycle.
d. must include it as part of the estate unless the trustee recovers the price from Eden.
George is the founder of Excellent Exotics Corporation. Wilson is a shareholder and
director and Bill is an officer. The daily business operations of Excellent Exotics are
overseen by
a. Bill.
b. Wilson.
c. George.
d. George and Wilson.
Jake is charged with embezzlement. Embezzlement may be committed without
a. a criminal act.
b. a criminal intent.
c. taking property from its owner.
d. the use of force or fear.
Apple & Pear Orchards contracts to hire Brigit for one year to tend the fruit in its
commercial orchards but reserves the right to cancel the employment on thirty days’
notice at any time after Brigit begins work. This promise is
a. enforceable.
b. illusory.
c. unliquidated.
d. unforeseen.
Rudy files a suit against Shakes & Shingles, Roofing Contractor, Inc., under the
doctrine of promissory estoppel. Rudy must show that
a. he justifiably refused to fulfill a promise to Shakes & Shingles.
b. he justifiably relied on Shakes & Shingles’ promise to his detriment.
c. Shakes & Shingles justifiably refused to fulfill a promise to him.
d. Shakes & Shingles justifiably relied on his promise to its detriment.
A barge owned by Oceanic Shipping Company discharges some of the oil contained in
its hold into the sea and onto the shore. Under the Oil Pollution Act, this is most likely
a. a violation.
b. not a violation because an oil discharge is not pollution.
c. not a violation because a floating barge is not a stationary source.
d. not a violation because a ship’s hold is not a point source.
The United States taxes each barrel of imported oil at a flat rate. This is
a. an antidumping duty.
b. a dumping duty.
c. a quota.
d. a tariff.
Without authorization, Rolf contracts on behalf of Sari to have Tige paint the interior
and exterior of Sari’s house. Sari ratifies the contract. Later, Sari tries to rescind the part
of the contract relating to the exterior. This attempt will be
a. partly successful.
b. partly unsuccessful.
c. totally successful.
d. totally unsuccessful.
Cory employs Daily Delivery Agency as an agent under a written agreement that
describes the rights and duties of both parties. This is
a. apparent authority.
b. equal authority.
c. express authority.
d. implied authority.
Chocolate Sundry LLC’s members and managers are Devlin, Effie, and Flavia. After
Devlin’s relationship to the firm ends, Effie and Flavia agree to discontinue the
business. This is
a. illegal.
b. optional.
c. required.
d. wrongful.
Office Suppliers, Inc. and Little Office Shop enter into a contract for a sale of office
supplies. Office Suppliers is the seller. Under a shipment contract, the Office Suppliers
does not have to
a. obtain and promptly deliver or tender to the buyer any documents necessary to enable
the buyer to obtain the goods.
b. deliver the goods to a particular destination.
c. put the goods in the hands of the carrier.
d. promptly notify the buyer when the shipment has been made.
Principal Resources Corporation contracts with Quality Construction to build an
addition to Principal’s corporate office building. Quality contracts with Rite Supply
Company for materials for the addition but refuses to pick up the materials. Meanwhile,
Principal hires Skye, a certified public accountant, to work in its cost-accounting
division as an employee, with no authority to hire or supervise others. Skye asks Theo,
an outside experienced accountant, to advise her on certain accounting procedures but
fails to pay Theo for the service. Principal also contracts with Uma, a salesperson, to
solicit orders for its products in a designated territory. Uma obtains an order from Verity
Industries, Inc., which is assured the order will be filled soon. But Uma does not follow
through with the paperwork and fails to submit the order to Principal. Verity suffers a
loss. Rite Supply, Theo, and Verity Industries claim Principal is liable under agency law.
Discuss fully whether an agency relationship was created by Principal with Quality
Construction, Skye, or Uma.
Sully signs a contract to borrow $200,000 from Riverside Bank to buy a house. In the
contract, Sully agrees to pay a certain rate of interest on the amount of borrowed funds
at monthly intervals for thirty years. This debt is
a. an illusory promise.
b. liquidated.
c. past consideration.
d. unliquidated.
The procedure for filing a family-farmer bankruptcy plan is similar to the procedure for
filing a repayment plan.
The minimum number of members of a body of officials that must be present before
business can validly be transacted is known as a quorum.
If a customer’s debit card is lost or stolen, the customer will not be liable for any
unauthorized use of the card.
Colby contracts in writing to sell his 2005 Dodge-brand pick-up truck to Efrem for
$10,500. Colby agrees to deliver the truck on Friday, and Efrem promises to pay the
$10,500 on the following Monday. On Thursday, Efrem tells Colby that he changed his
mind and will not buy the truck. Over the weekend, Efrem changes his mind again and
tenders $10,500 to Colby on Monday. Colby has not sold the truck to another party but
refuses the tender and refuses to deliver. Efrem claims that Colby has breached their
contract. Colby contends that Efrem’s repudiation released him from his duty to perform
under the contract. Who is correct, and why?
A gift is effective whether or not it is accepted.
The owner of real property has relatively exclusive rights to the airspace above the land.
It is a violation of federal law to destroy or deface any labeling required on a pesticide
or herbicide.
A short-form merger is the legal combination of two or more corporations online.
At least in theory, Congress can regulate every commercial enterprise in the United
States.
An accountant’s working papers are the documents that are used and developed during
an audit.
The same principles that govern the filing of a liquidation petition apply to
reorganization proceedings.
An employee can usually recover workers’ compensation for injuries occurring on the
commute to and from work.
A corporation has perpetual existence in most states unless the articles of incorporation
state otherwise.
Child-support debts will be suspended by a voluntary bankruptcy filing.
The clerk of a bankruptcy court must provide consumer-debtors with information on the
types of services available from credit counseling agencies.
A click-on agreement is an agreement whose terms are expressed inside a box in which
the goods are packaged.
Under the Check Clearing in the 21st Century Act, a bank has to credit a customer’s
account as soon as the bank receives the funds.
Creditors can agree with a debtor to discharge the debtor’s debts on payment of a sum
less than that owed.