The Kelsoe v. International Wood Products, Inc. case was an example of:
a. promissory estoppel.
b. partial performance.
c. illusory promises.
d. lack of consideration.
Which of the following is generally covered under casualty insurance?
a. Employee theft or embezzlement.
b. Disability.
c. Transportation insurance.
d. Vandalism.
When considering both imports and exports, the country trading the most goods with
the United States is:
a. Canada.
b. China.
c. Japan.
d. Mexico.
If Morales and Rolfes Supply negotiate for the purchase and sale of a supply of fuel for
a three-year period for Morales business:
a. the contract may indicate a method for determining the price, without stating a
definite price.
b. Morales and Rolfes must depend on the UCCs gap-filler provisions to determine a
price since the fuel is a “good covered by Article 2 of the UCC.
c. the contract price must remain the same for the entire three-year contractual period.
d. their contractual requirements regarding definiteness would be the same under the
UCC and the common law.
Betty’s BBQ orally contracts with Denny’s Design House for 10,000 matchbooks at the
price of 10 cents per matchbook. The matchbooks are to be embossed with a logo to be
designed by Denny’s Design promoting Betty’s BBQ. Price, payment terms, delivery
terms are agreed upon between the parties. Denny’s Design creates the logo, gets Betty’s
BBQ’s approval of the design and begins applying the logo on the matchbook covers.
Denny’s Design has almost finished the order when Betty’s BBQ calls to say it has
decided to make the eatery a smoke-free restaurant and cancels the order. Denny’s
Design sues, but Betty’s BBQ states that the agreement is unenforceable under the
statute of frauds. Who wins?
a. Denny’s Design House wins. This situation falls under an exception to the statute of
frauds.
b. Denny’s Design House wins. This is a service contract for design of a logo.
Therefore, the UCC, including the statute of frauds provisions of Article 2, does not
apply.
c. Betty’s BBQ wins. This is a contract for $1000. The statute of frauds requires all sales
contracts in excess of $500 be in writing.
d. Betty’s BBQ wins. The statute of frauds only applies to merchants. Betty’s BBQ is
not a merchant in this instance because it intended to give the matchbooks away and not
sell them.
John enters into a contract to paint Chad’s house. When Chad decides on a color, John
will buy the paint and paint the house for the price of $2,500. This contract is governed
by:
a. the common law of contracts governs because this is a mixed contract (one for
services and goods).
b. the common law of contracts governs because the predominant factor of the contract
is for the sale of services and not goods.
c. the Uniform Commercial Code governs because a sale of goods is involved.
d. both the common law and the Uniform Commercial Code will govern this contract.
Contracts that do not arise from mutual agreement but are created by courts to avoid
unjust enrichment are:
a. express contracts.
b. implied contracts.
c. quasi-contracts.
d. unilateral contracts.
On its Web site, Otrex, Inc. claimed that its pain reliever was more effective than
Nelton, a competing pain reliever. Discuss the elements that Nelton must prove to win a
case under Section 43(a) of the Lanham Act.
Ralph is a professional football player. He signs a valid contract with the Jets. Later, the
Giants offer him more money, so he signs a contract with them. If the Jets sue Ralph,
the most likely result would be?
a. The court will order Ralph to play with the Jets.
b. The court will order Ralph to play with the Jets, but Ralph is entitled to be paid the
amount he negotiated under the Giants contract.
c. The court will enjoin Ralph from playing with any team other than the Jets.
d. The court will order Ralph to pay compensatory damages in the amount of the
difference between the two contracts.
E-presto, Inc. has established an EthicsLine. EthicsLine is a toll-free phone number that
employees can call any time of the day, any day of the week to discuss ethics and report
suspected unethical or improper conduct. Why would E-presto establish the EthicsLine?
a. Ethical behavior improves productivity.
b. Ethical behavior increases job stability.
c. Unethical behavior can destroy a business.
d. All of the above are reasons that would justify establishing an EthicsLine.
The Basic Books, Inc. v. Kinko’s Graphic Corp. case held:
a. professors could print and sell lengthy course packets of copyrighted material under
the “fair use” doctrine.
b. professors could not print and sell lengthy course packets of copyrighted material
under the “fair use” doctrine.
c. professors could not use commercial printing companies under the “fair use”
doctrine.
d. None of the above.
Collector Carl displays his beer can collection at the local swap meet. Mary sees the
collection and is interested in buying it. Carl says he will sell the collection for $1,500.
Mary says she really likes the collection but is only willing to pay $1,000. Which of the
following is correct?
a. Mary’s counteroffer terminates Carl’s offer of $1,500.
b. If Carl rejects Mary’s counteroffer, she can still accept Carl’s offer of $1,500.
c. Neither offer is valid. Who would ever pay $1,000 or $1,500 for a beer can
collection?
d. Mary’s offer is a firm offer. Carl has an exclusive right to consider her offer for a
reasonable period of time.
The corporate form of business:
a. was first known and used by the Greeks and then spread through the Romans to
England.
b. was not known until about 1737 when Sir Francis LaRue developed the concept.
c. was first allowed in the State of New York around 1811 and is considered to be an
American creation.
d. None of the above.
Forever Yours, Inc. has a secured and perfected security interest in Sally’s big-screen
TV. On the filing date of Sally’s Chapter 7 petition, the balance of the debt owed to
Forever Yours is $2,000. The value of the TV is estimated at $1,500. This means that
Forever Yours:
a. is secured for the entire debt, $2,000.
b. is unsecured for $500, the excess of the debt over the value of the TV.
c. has a high priority claim of $500. This means that Forever Yours, Inc. will be allowed
$500 worth of other unsecured property before other unsecured creditors get anything.
d. is unsecured for the entire debt.
An insurance policy must meet which of the following?
a. State statutory requirements for tort law.
b. Federal statutory requirements for tort law.
c. Common law requirements for contracts.
d. Common law requirements for tort law.
The bankruptcy designed for family farmers is:
a. Chapter 7.
b. Chapter 9.
c. Chapter 11.
d. Chapter 12.
The primary purpose of RICO was:
a. to be a tool against organized crime.
b. to raise revenue.
c. to prosecute non-citizens.
d. to prosecute those engaged in tax fraud.
Mary owes $3,800 on her credit card. She sends the credit card company a check for
$800 with the notation “payment in full on the check. If the credit card issuer cashes the
check:
a. Marys balance will automatically be paid in full if the $3,800 amount was a
liquidated debt.
b. Marys balance will automatically be paid in full regardless of whether the amount of
$3,800 was liquidated or unliquidated.
c. the check may be subject to a UCC exception to the general rules for accord and
satisfaction cases involving checks.
d. Marys balance will automatically be paid in full if the $3,800 amount was an
unliquidated debt.
One of the factors leading courts away from a laissez-faire approach to contract law
was:
a. the movement away from requiring a writing and a seal on contracts.
b. a change in relative bargaining power between parties to contracts.
c. the assumption that promises are not legally significant.
d. the assumption that parties had freedom to contract and would have to live with the
consequences.
In Banker v the Estate of Banker
a. The court held that it could not intervene in the affairs of a partnership.
b. The court held that absent proof of an agreement a partner could not receive
compensation for work done.
c. the court held that unjust enrichment dictated that a partner was entitle to
reimbursement for act that furthered the partnership business.
d. the court held that all parties doing work for a partnership were entitled to
compensation for work done to further the partnership business.
Which of the following statements concerning a Chapter 11 reorganization plan is true?
a. A reorganization plan will be confirmed by the court only if a majority of each class
of creditors votes in favor of the plan.
b. A reorganization plan can be confirmed by the court over objections of some
creditors if the court determines that the plan is feasible and fair.
c. Only the bankruptcy court has the authority to confirm or reject the reorganization
plan. Creditors do not have a right to vote on the plan.
d. A reorganization plan binds only the debtor and not the creditors.
The issue in the Gray v. American Express Co. case involved:
a. lost credit cards.
b. disputed bills.
c. unfair interest rates.
d. privacy.
Which one of the following warranties arises in a sale of goods?
a. Implied warranty of title.
b. Warranty against adverse possession.
c. Implied warranty of quiet enjoyment.
d. All of the above arise in a sale of goods.
The Grand Performance Hall is in the process of remodeling and is scheduled to open
for business after being closed for 50 years. As part of the remodeling, it is installing a
new sound system. The sound system is to be installed by Sound Systems, Inc. on or
before April 10. Opening night of the hall is May 1. The contract states that “time is of
the essence” because of the opening-night deadline. Sound Systems has some financial
difficulties and doesnt deliver the system until April 20. Grand Hall refuses to accept it,
and Sound Systems sues. What result?
a. Grand Hall wins; the contract date was strictly enforceable.
b. Sound Systems wins; the contract was substantially performed.
c. Grand Hall wins; there was commercial frustration.
d. Sound Systems wins; there was a true impossibility.
Sarah has car insurance. While driving her automobile, Sarah negligently ran a red light
and hit Vi’s car. Which type of coverage will pay for the damage done to Vi’s car?
a. Liability insurance.
b. Comprehensive insurance.
c. Collision insurance.
d. Uninsured motorist insurance.
Which of the following is correct concerning anti-takeover efforts?
a. Most states have passed laws to deter hostile takeovers, but these statutes have not
totally eliminated hostile takeovers.
b. Federal statutes have been more effective than state statutes in eliminating hostile
corporate takeovers.
c. The most effective federal statute has been the Poison Pill Act.
d. Both b and c are correct.
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.
Esmeralda is a debtor in a Chapter 7 bankruptcy proceeding. Which of the following is
not a duty of Esmeralda under Chapter 7?
a. To undergo credit counseling with an approved agency before filing.
b. To provide a repayment schedule for the debt owed to each creditor listed on the
creditor list.
c. To provide a list of all her assets and debts.
d. To provide a schedule of all her income and expenditures.
Lying on her hospital bed alone one night, Phyllis grabs a pen and paper. With the last
of her strength, she wrote her last will and testament leaving all her worldly possessions
to her next-door neighbor, Aaron. This type of will is:
a. a nuncupative will.
b. disinherited children’s share will.
c. holographic will.
d. None of the above.
In Delaware, lawsuits involving corporations are tried in a special court called:
a. corporate court.
b. CEOs court.
c. common court.
d. chancery court.
Under the Fair Debt Collection Practices Act, a collection company is legally permitted
to:
a. call the debtor between 8 a.m. and 9 p.m.
b. call acquaintances of the debtor to locate the debtor.
c. contact the debtor at work if not prohibited by the employer.
d. All of the above are permissible.
Wedney, Inc. has a purchase money security interest in one of Yoro Chicken’s meat
processing machines. Wedney filed a financing statement on the day the machine was
delivered, perfecting its interest. Great State Bank already had a security interest in the
machine. Which party has superior priority rights in the meat processing machine?
a. Wedney. A PMSI in collateral other than inventory takes priority over a conflicting
security interest if the PMSI is perfected at the time the debtor receives the collateral or
within 20 days after he receives it.
b. Great State Bank, since it had an earlier security interest.
c. The party who is first to repossess the collateral.
d. The creditors have equal priority.
Miles purchased a lawnmower with an attached warning that said, “The manufacturer is
not responsible in the case of an injury caused by the lawnmower.” If Miles is injured
because of a defect in the mower and sues the lawnmower manufacturer, he will most
likely:
a. lose, as he agreed to not hold the lawnmower manufacturer liable.
b. lose, as he assumed the risk.
c. win, as this warning would be unenforceable.
d. win, as all lawnmower manufacturers are strictly liable.
The Tavern’s secret recipe for its pizza sauce would be considered:
a. a trade secret, and an employment noncompete clause would be enforceable to
protect it.
b. a trade secret, and an employment noncompete clause would NOT be enforceable to
protect it.
c. just a secret recipe and not something the Tavern could protect in a noncompete
clause.
d. an exculpatory clause and not enforceable.
Pushy Pat, a persuasive salesman, talked Nice Nancy into purchasing something she
didn’t really need or want. Nice Nancy may rescind the contract because of undue
influence.
List and discuss the protections afforded criminal defendants by the Bill of Rights.
Patsy is shopping for a used car. She finds a car she likes at Morley Motors. Discuss the
standard of conduct the UCC imposes on the parties in performing the sales transaction.
As a general rule, an agent is liable on contracts entered into on behalf of a fully
disclosed principal.
Paid surrogacy contracts are viewed by the legislative majority in all states as immoral
and illegal.
An agent must clearly indicate that he or she is signing on behalf of a principal in order
to bind the principal.
Criminal defendants have the right to a lawyer at all the important stages of the criminal
process.
Kyle, Pedro, and Madeline form a partnership. There is no agreement as to the duration
of the partnership. The partnership is a partnership at will.
What are three general defenses an employer can raise if sued for violating Title VII of
the Civil Rights Act?
MegaCorp has five directors. The company has 1,050 shares of voting stock. Jessica
would like to purchase enough stock to elect herself to the board of directors. The
company allows for cumulative voting. Explain the concept of cumulative voting and
also state how many shares of MegaCorp stock Jessica will need to own to assure
herself a place on the board of directors.
Rachel works for the Internal Revenue Service, but keeps some personal information on
her computer at work. The Fourth Amendment to the Constitution, prohibiting
unreasonable searches and seizures, does not apply to the government’s right to obtain
personal information on her computer.
In January, All Seasons, Inc. ordered $4000 of fireworks from Kaboom Ltd. with
delivery to be on or before June 1. On April 15, Kaboom notifies All Seasons that it will
not be able to perform the contract as agreed. How will the law characterize Kaboom’s
actions? Does All Seasons have to wait until June 1 before buying fireworks from
another supplier?
The United States of America v. Angevine case held that the professor had no reasonable
expectation of privacy in his office computer.
Gadberry lives in a “common interest development” (CID) and has parked his new
pickup truck in his driveway. The Neighborhood Association informs him that,
according to their regulations, he may not have a truck in the sight of passersby. The
Association has made an unconstitutional restriction of the property rights of residents
of the CID.
Tiny Tim Toy Company (TTT) entered into a contract with the manufacturing firm of
Charles, Dickens, and Scrooge (C,D&S) to purchase Christmas toys. The shipment was
due to arrive on September 1, in time for the Christmas sales. By August 15, after
hearing from other toy companies that C,D&S were falling far behind on meeting
delivery dates, TTT wrote a letter demanding assurances that the goods would arrive as
scheduled. The only response received was a letter on C,D&S letterhead that said, “Bah
Humbug! You’ll get the shipment by November 1.” Discuss TTT’s possible remedies at
this point.
Juan has the right to walk (or drive) across his neighbor’s property to reach the highway.
Juan’s right is referred to an easement appurtenant which runs with the land.
Alberta is not employed by E-prise, Inc. but she is a member of E-prise’s board of
directors. Alberta is an outside director.
Spencer, age 18 and of sound mind, has the legal capacity to contract.
During the hiring interview, Supervisor Staci told Henry that as long as he did his job as
requested, he would have a job until he retired. Courts have been willing to enforce
such an oral promise under the Truth in Hiring doctrine, even if the companys top
management did not approve the statement.