The chief aim of the European Union and other trade organizations is to minimize trade
barriers among their members.
a. True
b. False
BurgerBoy Restaurant Corporation allows its trademark to be used as part of a domain
name for BurgerBoyNY, Inc., an unaffiliated company. BurgerBoyNYdoes not obtain
ownership rights in the mark. This is
a. goodwill.
b. fair use.
c. a license.
d. a safe harbor.
Ryan, the owner of SuperMart Stores, Inc., adheres to the “principle of rights theory.
Under this theory, a key factor in determining whether a business decision is ethical is
how that decision affects
a. the right determination under a cost-benefit analysis.
b. the rights of others.
c. the “right thing to do.
d. the right to make a profit.
Bean Vendors, Inc., and Java Bistros Corporation dispute a term in their contract.Refer
to Fact Pattern 2-1. If Bean and Java have a long-standing business relationship that
they would like to continue, they may prefer to set-tle their dispute through mediation
because
a. the case will be heard by a mini-jury.
b. the dispute will eventually go to trial.
c. the process is not adversarial.
d. the resolution of the dispute will be decided an expert.
Letters of credit are formal contracts that are often used in international sales contracts.
a. True
b. False
Fred has six nieces, ages five to sixteen. He writes an order instrument for $50 that
states, “Pay to the order of my niece. The order instrument is
a. negotiable.
b. nonnegotiable, because the amount of money is less than $500.
c. nonnegotiable, because it is illegal to write an order instrumentpayable to a relative.
d. nonnegotiable, because there is no specific person identified.
Some risks are obvious but that does not necessarily excuse a business owner from the
duty to protect customers from foreseeable harm.
a. True
b. False
Under the Americans with Disabilities Act of 1990, an employer must hire unqualified
applicants who have disabilities.
a. True
b. False
In most cases, a contract that prohibits its assignment cannot be assigned.
a. True
b. False
Ted and Svetlana orally agree to several different oral contracts. The Statute of Frauds
will bar enforcement of an oral contract for
a. a deal that will be performed within a year.
b. a primary obligation.
c. a sale of goods for $100.
d. a sale of land.
Kirby is a manager of Jumpstart Fitness LLC, a limited liability company. Jumpstart is
formed in a state that imposes fiduciary duties on LLC managers. Kirby owes these
duties to
a. Jumpstarts members.
b. Jumpstarts suppliers.
c. Jumpstarts customers.
d. none of the choices.
John is sales manager for Kleen N Brite Products, Inc. Compared to Johns personal
activities, his business activities most likely involve
a. more complex ethical issues.
b. no ethical issues.
c. simpler ethical issues.
d. the same ethical issues.
Mary writes a check drawn on County Bank for $400 “payable to Bill on May 1. Mary
dies on May 3. Bill presents the check to County Bank on May 5. County Bank
a. may not pay the check.
b. may pay the check.
c. must consult with Marys heirs before paying the check.
d. must read Marys will before paying the check.
A contract is valid only if both of the parties entering into it have the capacity to do so.
a. True
b. False
Avatar, Inc., and Bling Corporation sign a contract in which Avatar agrees to deliver
t-shirts emblazoned with video game characters in exchange for Blings prom-ise to pay.
Avatar delivers. The contract is
a. void.
b. executed.
c. executive.
d. executory.
Oak Grove Residences, Inc., owns apartment buildings. Pedro leases one of Oak
Groves apartments. Pedros transfer of his interest in the lease to Quito for a period
shorter than the lease term is
a. an assignment.
b. an eviction.
c. a right of entry.
d. a sublease.
A buyer and a seller cannot normally have an insurable interest in iden-tical goods at
the same time.
a. True
b. False
Any lawful contract can potentially form the basis for an action based on wrongful
in-terference with a contractual relationship.
a. True
b. False
Ronalds debt to Greg is past due. Ronald obtains a judgment against Greg to collect the
debt, but Greg will not pay. Ronald requests a writ of execution. The property that is
seized under the writ of execution must be
a. in Ronalds possession.
b. inGregs possession.
c. in the possession of Gregs employer or other third party.
d. located within the courts geographic jurisdiction.
Sayers is very clever and spends lots of time creating new things. Which of the
following is not copyrightable?
a. A sculpture of Sayerss dog
b. A book about Sayerss business successes
c. A movie about Sayerss life
d. Sayerss idea for a new way to play the guitar
Region Construction Company has a right to drive its trucks across Staple Business,
Inc.s property, which is adjacent to Regions office. This right is
a. a leasehold estate.
b. a license.
c. an easement.
d. a profit.
A profit is the right to make limited use of another persons real property without taking
anything from the property.
a. True
b. False
Business Rental Corporation (BRC) and Cartage Trucking Company enter into a
contract for a lease of ten hydraulic lifts. Under the perfect tender rule, BRC must ship
or tender goods to the lessee that
a. approximately conform to all of the details of the contract.
b. entirely conform to the contract except in one or two details.
c. exactly conform to the contract in every detail.
d. substantially conform to the contract in most details.
Pete borrows $5,000 from Willy in a secured transaction using Petes BMW as
collateral. Pete then borrows $7,000 from Janet using the same car as collateral. Neither
Willy nor Janet perfects their security interests. Pete defaults on the loans. The party
with priority is
a. Willy, because his interest was the first to attach.
b. Janet, because Pete owes her more money.
c. Janet, because her interest was the second to attach.
d. Willy, because Pete owes him less money.
Zoe and other users of Facebook and other social networking sites post trademarked
images and copyrighted materials on these sites without permission. This
a. isa violation of the intellectual property rights of the owners of the images and
materials.
b. iswithin the rights of the users of social networks.
c. isa subject for dispute resolution by the providers of the social networks.
d. fallsunder the “business-extension exception to the Electronic Communications
Privacy Act.
Kit loses her suit against Lou in a Minnesota state trial court. Kit appeals to the state
court of appeals and loses again. Kit would appeal next to
a. a U.S. district court.
b. the Minnesota Supreme Court.
c. the United States Supreme Court.
d. the U.S. Court of Appeals for the Eighth Circuit.
The duty owed under the mitigation of damages doctrine depends on the nature of the
contract.
a. True
b. False
Using anothers trademark in a meta tag does not normally constitute trademark
infringement, even if it is done without the owners permission.
a. True
b. False
Substantive due process limits what the government may do in its legislative capacity.
a. True
b. False
An implied warranty of merchantability does not arise in every lease by a merchant
who deals in goods of the kind leased.
a. True
b. False