Compliance with the law does not necessarily fulfill all ethical obligations.
a. True
b. False
A license permits the use of anothers intellectual property for certain limited purposes.
a. True
b. False
Merchants are not required to warrant that the goods they sell are fit for their ordinary
purpose.
a. True
b. False
Earl holds 1,000 pounds of perishable fruit in storage for Fresh Food Corpo-ration.
Fresh Food does not pay for the storage. Earl sells the fruit to Green Grocers, Inc. This
sale represents
a. a breach of contract.
b. a mitigation of damages.
c. rescission and restitution.
d. specific performance.
Hiring corporate officers and determining their compensation are decisions that would
be made by a corporations board of directors.
a. True
b. False
GR8 Marketing Company and Brainfreeze Tunes, Inc., sign a document that states GR8
agrees to create a marketing campaign for Brainfreeze, which agrees to pay GR8 for the
service. GR8 and Brainfreeze have
a. an executed contract.
b. an express contract.
c. an implied contract.
d. a quasi contract.
Jack and Jill, citizens of Vermont, are involved in a case related to the adoption of their
child. Over this case, the Vermont state courts have
a. concurrent jurisdiction with federal courts.
b. concurrent jurisdiction with other state courts.
c. exclusive jurisdiction.
d. no jurisdiction.
Punitive damages are generally available in contract disputes.
a. True
b. False
Stature Loan Company has notice that a promissory note is overdue if the note is a
demand instrument and Stature takes it
a. an unreasonable time after its due date.
b. before its due date.
c. on its due date.
d. without noticing its due date.
Preemption occurs when Congress chooses to act exclusively in a concurrent area and a
valid federal statue or regulation takes precedence over a conflicting state or local law.
a. True
b. False
A special warranty deed provides the most protection against defects of title.
a. True
b. False
Data Analytics, Inc., is a corporation engaged in the business of compiling, analyzing,
and marketing data. To accomplish its purposes, Data Analytics obtains financing, and
hires and fires employees. Laws and government regulations affect such business
activities as
a. hiring and firing decisions.
b. the manufacturing and marketing of products.
c. business financing.
d. all of the choices.
Roslyn is an inventor. She has many tools, including a hammer, a handsaw and a drill.
Roslyn has a patent on her most recent invention and she owns stock in Handy
Appliances, Inc., which is a company that often uses her inventions. Roslyns tangible
personal property includes the
a. hammer, handsaw and drill.
b. Handy Appliances stock only
c. patent on her invention only
d. Handy Appliances stock and the patent on her invention.
A Massachusetts state statute imposes a prison term, without a trial, on all street
performers who operate in certain areas. A court would likely review this statute under
the principles of
a. the commerce clause.
b. the equal protection clause.
c. the due process clause.
d. the First Amendment.
To use attachment as a remedy, a creditor must have an enforceable right to payment of
the debt.
a. True
b. False
The measure of damages for breach of a construction contract depends on which party
breaches and when.
a. True
b. False
Stan rents a safe-deposit box at Main Street Bank under a contract that gives Stan
exclusive knowledge and control over its contents. This is
a. a bailment.
b. accession.
c. production.
d. confusion.
Under the UCC, there are no exceptions to the perfect tender rule.
a. True
b. False
Leatherbound Stores, Inc., rejects a shipment of goods that does not conform to its
contract with Cowhide Corporation, but is unable to obtain instructions from the seller.
Leatherbound may
a. resell or return the goods only.
b. resell or store the goods only.
c. return or store the goods only.
d. resell, return, or store the goods.
Penalties exist for anyone who circumvents encryption software or other technological
antipiracy protection.
a. True
b. False
Bay City Construction, Inc., a contractor, asks Cool Electric, a subcontractor, to provide
certain services. Nothing is said about payment. Cool provides the services, but Bay
City refuses to pay. In Cools suit to recover, the chief issue is most likely to be whether
these parties had
a. a formal contract.
b. an express contract.
c. an implied contract.
d. a voidable contract.
A discharge will be denied to a debtor who received a discharge within eight years of
filing the current petition.
a. True
b. False
Ray is a shareholder of Small Biz Company (SBC). When the direc-tors fail to
undertake an action to redress a wrong suffered by SBC, Ray files a suit on the firms
behalf.
Refer to Fact Pattern 25-1. Any damages recovered by Rays suit will go to
a. Ray.
b. SBC.
c. SBCs directors.
d. the state in which SBC is incorporated.
There are three categories of property.
a. True
b. False
International law is a body of law that governs relations between and among citizens,
not countries.
a. True
b. False
The idea for “On Your Mark, a computer game featuring world-class athletic
competition in extreme and unique contests, is protected by
a. copyright law.
b. patent law.
c. trademark law.
d. trade secrets law.
Some companies set up confidential systems for employees to “raise red flags about
suspected unethical practices.
a. True
b. False
Tom and Bill are partners in Tough Trucks Towing. James is not a partner. In dealing
with Fred, James holds himself out to be a partner in Tough Trucks Towing and Fred
contracts to have Tough Trucks Towing tow some vehicles for him. If Tough Trucks
fails to tow the vehicles, a court may conclude that
a. a partnership by estoppel exists and James is liable to Fred.
b. no partnership exists and James is not liable to Fred.
c. a partnership by estoppel exists and Fred has all partnership rights.
d. no partnership exists, but Tom and Bill are liable to Fred.
The assets in Hongs estate, including the value of his home on Elm Street and its
contents, are insufficient to pay in full all of the gifts provided for in his will. His heirs
will receive
a. full payment in order of seniority until the assets are exhausted.
b. nothingthe assets will descend to the state.
c. reduced benefits.
d. the option of distributing the assets according to their wishes.
Nico is a passenger in a car driven by Owen, whose reckless driving causes an accident,
injuring himself. Nico, uninjured, accompanies Owen to Parkside Hospital in an
ambulance. The ambulance is hit by a car driven by Quin, and Nico is injured. Nico
files a suit against Owen, alleging negligence. The element most likely to be a question
for the court to decide is
a. causation in fact.
b. proximate cause.
c. the duty of care.
d. the injury requirement.
In most courts, auditors cannot be held liable to third parties for negligence in the
performance of their duties.
a. True
b. False
David, an Alabama resident, files a suit in an Alabama court against QuickAds, an
Internet company based in Georgia that provides advertising services. QuickAdss only
contact with persons in Alabama has been through QuickAdss passive advertising. In
this case, the Alabama court most likely
a. has jurisdiction.
b. does not have jurisdiction.
c. has concurrent jurisdiction with a Georgia state court.
d. has concurrent jurisdiction with a federal court.