The largest source of new law is court decisions.
a. True
b. False
Tom receives an e-mail from someone alleging to be a Nigerian government official
who has stolen money from the government. He needs some place safe to keep the
money for a short time. The official promises that, if Tom lets his bank account be used
for this purpose, Tom will be allowed to keep a percentage of the stolen money. Tom
gives in to the temptation and provides his account information. Instead of receiving
money, Tom loses everything he had in the account to the scammer. In this situation:
a. prosecution can be under state law.
b. prosecution can be under the Computer Fraud and Abuse Act.
c. a civil action can be brought under Section 5 of the FTC Act.
d. All of the above.
Article 9 applies to any transaction intended to create a security interest in real property.
a. True
b. False
An agency relationship can be created:
a. by the conduct of the parties.
b. by an oral agreement in all circumstances.
c. only by a written agreement.
d. only by the meeting of all the standards of contract law.
April put an advertisement in the newspaper advertising the sale of her computer for
$500. Simultaneously, six people responded to the ad by mail with formal written
acceptances. April is bound on all six contracts to sell her computer for $500.
a. True
b. False
Grady receives a $12,940 credit card bill in the mail from a company with which he did
not open an account. He fears he is a victim of identity theft. Does he have any
recourse?
a. Yes, under the Fair and Accurate Credit Transactions Act (FACTA), Grady can place
an alert in his credit files using the National Fraud Alert System.
b. Yes, under the Fair Credit Billing Act he may call the credit card company to
complain about the bill, and the credit card company must investigate and correct any
errors.
c. Yes, under the Truth in Lending Act, Grady is liable only for the first $50 in
unauthorized charges.
d. No, he should have been more careful with his personal information so no one could
have applied for credit in his name.
Peter Dementas helped Jack Tallas with numerous personal and business chores
towards the end of his life. Two months before his death, Tallas dictated a memorandum
to Dementas, in Greek, stating: PETER K. DEMENTAS is my best friend I have in this
country, … he treats me like a father and I think of him as my own son. …For all the
services Peter has given me all these years, I owe to him the amount of $50,000 (Fifty
Thousand Dollars). I will shortly change my will to include him as my heir. Tallas
signed the memorandum, but he did not in fact alter his will to include Dementas.
This was a real case. The Utah appeals court would rule:
a. there was no consideration to support Tallass promise.
b. there is a “moral obligation exception to the requirement of consideration, and
therefore Tallass promise was supported by consideration.
c. because Utah does not recognize the “moral obligation exception to the requirement
of consideration, Dementas prevails.
d. the trial courts finding that the services rendered by Dementas to Tallas were
performed gratuitously was erroneous.
An agent may not engage in inappropriate behavior that reflects badly on the principal.
This rule applies to conduct:
a. during working hours.
b. during off-duty time.
c. during both working hours and off-duty time.
d. only by public officials.
After the plaintiff has presented her case, the defendant may be granted a:
a. directed verdict.
b. summary judgment.
c. judgment n.o.v.
d. judgment on the pleadings.
The union representing workers at Blue Ridge Co. were unable to reach a collective
bargaining agreement with management. The union may legally stage a strike in which
members stop working but remain at their job posts, physically blocking replacement
workers from taking their places, so the strike is more effective.
a. True
b. False
An express warranty can be created by which of the following?
a. An affirmation of fact or promise.
b. A description.
c. A model.
d. All of the above.
Which of the following represents a unilateral offer?
a. “I will pay you $50 if you mow my lawn.”
b. “I will pay you $50 if you promise to trim that tree.”
c. “I will pay you $50 for your CD player.”
d. “I will pay you $50 for your backpack.”
Abby dies, and her good friend, Clay is appointed to administer Abby’s estate. Abby’s
house was in poor condition, so Clay orally hired a contractor to make repairs. Clay
also orally promised that if the estate could not pay the repair bill, he would pay it even
though he does not live in the house and has no entitlement under Abby’s estate. The
estate does not pay the repair bill. Who can the contractor collect from, if anyone?
a. The contractor can collect from either the estate or Clay.
b. The contractor can collect from the estate only.
c. The contractor can collect from Clay only.
d. The contractor must collect from the estate first, and then collect any deficiency from
Clay.
M & E contracted to sell 500 music stands to Coda, Inc. M & E shipped the stands in
accordance with the agreement. Coda paid for the stands as promised. The contract
between M & E and Coda is discharged by:
a. full performance.
b. agreement.
c. rescission.
d. accord and satisfaction.
Employees of Mega Corp. have gone out on strike seeking better pay. Mega Corp.
announces that if the union does not end the strike it will begin hiring replacement
workers. Which statement is correct?
a. Hiring replacement workers during a strike is an unfair labor practice.
b. Mega Corp can only hire replacement workers if the collective bargaining agreement
expressly gives the company the right to do so.
c. Mega Corp can only hire replacement workers if it gives the union 14 days’ notice
prior to actually bringing in the replacement employees.
d. Mega Corp can hire replacement workers at any time during a strike.
A Tippee
a. knows the information he is providing is confidential
b. know it was from an insider.
c. must deal with information provided by an insider who expects a profit.
d. all of these answers are correct.
Generally, either party to an agency relationship has the power to terminate it at any
time.
a. True
b. False
Charlie Sheens drug use and violent behavior:
a. were bad enough to warrant CBSs firing him from a hit TV show.
b. have no impact on his job as an actor.
c. enhance his reputation as a “tough guy and should be tolerated.
d. are false accusations.
Mason bought a rotisserie in preparation for a party he was planning. When he put a
chicken on the rotisserie, it would not rotate, but stayed in one position where it burned
the chicken on one side and left it raw on the other. When he returned the rotisserie to
the store, the salesperson disclaimed any responsibility because he had never told
Mason the rotisserie would rotate the food as it cooked. Does Mason have any
recourse?
a. No, the salesperson did not make any express warranties.
b. Yes, the salesperson made an express warranty just by selling the goods.
c. Yes, although the salesperson did not make any express warranties, the UCC imposes
an express warranty on the sale.
d. Yes, although the salesperson did not make any express warranties, the UCC imposes
an implied warranty of merchantability under which the rotisserie is guaranteed to be fit
for the ordinary purposes for which it is used.
Ambiguities in contracts are always interpreted in favor of the side that wrote the
contract, since they are the ones who know what the provision is supposed to mean.
a. True
b. False
Utilitarian ethics holds that decisions should be made on the basis of practicality, and
whatever action is most convenient should be favored.
a. True
b. False
Which of the following duties can probably be delegated?
a. An agreement to perform an operation.
b. A contract to paint a picture.
c. An agreement by an attorney to draft a contract.
d. An agreement to paint a house.
Zebra Toy Company, located in Chicago, sells $500,000 worth of toys to a London,
England, a wholesaler. This contract could be governed by:
a. Illinois’s Uniform Commercial Code.
b. English law.
c. the CISG.
d. All the above are correct.
Theft is to the criminal law as ____ is to the civil law.
a. stealing
b. appropriating
c. conversion
d. trespass
Research has shown that the least important motivation for managers in behaving
ethically is:
a. they want to feel good about themselves.
b. they want to feel good about the decisions they make.
c. they value their reputation.
d. profitability.
Which of the following may be a legitimate, nondiscriminatory criterion for selection of
an employee?
a. Age
b. Race
c. Color
d. Educational level
Larson entered Forrester’s Auto Mart to purchase a used car. Larson found a vehicle
with a sales price of $11,000. After Forrester answered all of Larson’s questions,
Forrester and Larson agreed to a sale. As Larson was leaving to get the money to pay
for the car, Forrester told Larson that Robert Redford formerly owned the car. Larson
later learned that Robert Redford had never owned the car. If Larson seeks to rescind
the deal based on Forresters statement, Larson will:
a. win because he relied on the misrepresentation.
b. win because there was a misrepresentation of a material fact.
c. lose because he will not be able to prove reliance on the misrepresentation.
d. lose because Forrester made a unilateral mistake.
A buyer who accepts goods but notifies the seller the goods are non-conforming:
a. cannot recover any damages.
b. can recover the difference between the goods as promised and as delivered, plus
incidental and consequential damages.
c. cannot recover incidental damages.
d. cannot recover consequential damages.
If repossessed collateral is sold or otherwise disposed of by the creditor, the time, place,
manner, and method of disposal must be:
a. commercially reasonable.
b. scheduled with the debtor so that the debtor is able to attend.
c. court ordered.
d. perfected.
The Marcel Company is opening an office in Mexico. The cost to obtain electrical
service is $500, but the clerk suggests that service could be started faster if an
additional $50 is paid, which the clerk will keep. If the Marcel official pays the
additional $50:
a. he will have violated the Foreign Corrupt Practices Act.
b. he will not have violated the Foreign Corrupt Practices Act because this would be
considered a “grease or facilitating payment, which is legal.
c. he will be guilty of violating the Foreign Corrupt Practices Act only if the payment
was illegal under the written law of Mexico.
d. he will be guilty of violating both the Foreign Corrupt Practices Act and the
Convention of Combatting Bribery of Foreign Public Officials in International Business
Transactions.
Define and compare the terms “vagueness and “ambiguity.
Discuss the effect of the Uniform Commercial Code on the law of sales contracts in the
area of open terms.
Identify and describe the four principal contract interests a court may seek to protect.
J.T. Tidwell entered into an oral contract with Robert Anthony for the purchase of 100
head of cattle at a price of $500 each. When the oral contract was made, Tidwell gave
Anthony a check for $1000 as “earnest money or good faith money towards the
purchase of the cattle.” Anthony sold the cattle to someone else. Tidwell sued, asking
the court to either compel Anthony to perform the contract or to pay damages that
Tidwell suffered from the alleged breach of contract. What issues do you see and how
would you resolve those issues?
Many of Americas largest consumer product companies, such as Wal-Mart, Nike, and
Lands End, buy fabric produced in China by Fountain Set Holdings Ltd. Chinese
government investigators recently discovered that Fountain Set has contaminated a
local river by dumping dye waste into it. What responsibility do U.S. companies have to
ensure safe environmental practices by overseas suppliers?
List and briefly describe the basic elements of a contract.
Rameriz and Cox enter a contract obligating Cox to supply Rameriz with 2,000 bushels
of corn by the end of September. Weather conditions are poor and Cox is unable to
grow that much corn himself, but could obtain enough to make up the required
difference at a financial loss. Discuss the general purpose of contracts and the result of
seeking enforcement of this contract both in a court exercising judicial restraint and in a
court practicing judicial activism.
Loraine is a shareholder of Taley Corp. She would like to inspect and copy the
company’s minute book, accounting records, and shareholder lists. Under what
circumstances is Loraine allowed to inspect or copy corporate records?
Explain the origin and purpose of the World Trade Organization.
What does the term ‘substantial performance” mean? What factors are generally
considered when determining whether one of the parties has substantially performed?
Kirk purchases a sailboat on credit from Lakefront Sales, and Lakefront keeps a
security interest in the boat. Lakefront then assigns the security interest to First Finance
Co. Explain what having a security interest means. Under the UCC, what defenses can
Kirk assert against First Finance?
Big Corporation is served with a subpoena to turn over business records to an
administrative agency. What are three possible legal grounds the company can raise to
avoid producing the requested records?
Smalltown has two family-owned hardware stores that have been in business for years.
Major Hardware decides that Smalltown would be a good place to build one of its
superstores. Major opens, advertising unbelievably low prices; in fact, at below cost.
Because Major owns stores nationally, it is able to keep prices extremely low until both
of the family-owned stores have to go out of business because they cannot compete.
After Major is the only hardware store in town, it raises its prices enough to make up
for its former losses and to make some additional profit. Discuss this behavior in
relation to antitrust law.
Discuss the Miller test to determine if a creative work is obscene.
On March 1 Donna wrote a check for $296 to Sun Services. When will the check be
overdue? What is the effect of the checks being overdue? What is the effect if the check
is stamped “Insufficient Funds by Donnas bank?
Lance sued Mega Corp. for negligence, and a jury awarded him $1.2 million. Mega
Corp. filed a motion for judgment NOV, and that motion was denied by the trial court.
Mega Corp. then appealed the case. Discuss a judgment NOV and when it is
appropriate for a judge to grant such a judgment.
Trudy wishes to buy a national franchise. What information is the seller legally required
to provide before she buys the franchise?