In most contracts, promises of performance are expressly qualified.
a. True
b. False
Future advances against a line of credit can be subject to the same collateral.
a. True
b. False
One purpose of criminal sanctions is to deter others from committing similar crimes in
the future.
a. True
b. False
Information that is not or cannot be protected under trademark, patent, or copyright
lawmaybe protected under the law of trade secrets.
a. True
b. False
The only requirement for a valid contract is that the parties voluntarily entered into it.
a. True
b. False
Wilma, who lives in New York, enters into a contract to buy a painting from Fred, who
lives in France. The contract includes all the costs of insuring and shipping the painting
from France to New York. The agent that made the shipping estimate makes a mistake
when adding up the costs and, as a result, the shipping cost listed in the contract is
$1,000 less than the shipping actually costs. A court will most likely
a. allow the parties to rescind the contract.
b. award damages to Wilma for the mistakes.
c. award damages to Fred for the mistakes.
d. enforce the contract without requiring changes.
Bea is a shareholder of Candy Confections Corporation. The right to inspect corporate
books and records is
a. held by Bea only if she is a director.
b. held by Bea, without restrictions.
c. held by Bea, with some restrictions.
d. not held by Bea.
Dora leases a house from Evan for a two-year term. To ensure the valid-ity of their
lease, it should include
a. a description of the premises.
b. a due date for the payment of the property taxes.
c. a due date for the payment of the property taxes..
d. a requirement that Evan carry liability insurance
Bakri owns a house. In the house, on a tile floor is a throw rug. Most likely to meet the
definition of a fixture is
a. the house.
b. the throw rug.
c. the tile floor.
d. none of these choices.
Daria writes a check for $100 drawn on Village Bank and presents it to Fast Cash, Inc.,
for payment. If the check is not backed by sufficient funds, Daria may be prosecuted for
a. forgery.
b. fraud.
c. negligence.
d. nothing.
Expert Pavers, Inc., contracts with Fabricated Building Corporation to repave
Fabricateds parking lot for which Fabricated agrees to pay.The requirements of this, and
any other, contract do not include
a. consideration.
b. capacity.
c. legality.
d. practicality.
Bribery of foreign government officials is both an ethical and a legal issue.
a. True
b. False
Giant Lift Corporation purchases all of the assets of Heavy Hydraulics Corporation.
With respect to Heavy Hydraulicss liabilities, Giant Lift is
a. automatically responsible.
b. not responsible under any circumstances.
c. responsible if Heavy Hydraulics is a competitor of Giant Lift.
d. responsible if the sale is in fact a merger or consolidation.responsible if the sale is in
fact a merger or consolidation.
Ocean Vessels, Inc., and Pacific Harbor Company enter into a contract for a sale of a
boat. Ocean is a merchant who deals in goods of the kind sold. The goods are defective.
Under the UCC, the implied warranty of merchantability is breached
a. only if Ocean did not know about and could not have discovered the defect.
b. only if Ocean did not know about the defect.
c. only if Ocean knew about or could have discovered the defect.
d. regardless of what Ocean knew or could have discovered.
KO Marketing Company, a U.S. firm, signs a contract with Librador Corporacion, a
Chilean firm, to give Librador the right to use Innovatives animation techniques and
characters in product promotions. This is
a. a distribution agreement.
b. a joint venture.
c. direct exporting.
d. licensing.
Courts in many jurisdictions will consider the negligent actions of both the plaintiff and
the defendant when apportioning liability in a product liability action.
a. True
b. False
Wilson wants to file an ordinary, or straight, bankruptcy. Wilson should file using
a. Chapter
b. Chapter
c. Chapter
d. his states bankruptcy code.
Dee, an accountant, does not work for Emergent Company, but wrong-fully obtains
inside information concerning Emergent. Based on the in-forma-tion, Dee buys and
sells Emergent stock for personal gain. The Securities and Exchange Commission
prose-cutes Dee, arguing that she is liable because she stole in-formation right-fully
belonging to another. This argument is
a. the blue-sky theory.
b. the misappropriation theory.
c. the red-herring theory.
d. the tipper/tippee theory.
Universal defenses are good against all holders except HDCs and holders through
HDCs.
a. True
b. False
State workers compensation laws establish a procedure for employees injured on the
job to sue their employers.
a. True
b. False
Lou uses undue influence to induce Mona to sign a contract to invest her student loan
funds in National Overseas Bank. Mona may
a. avoid the contract or choose to carry it out.
b. do nothing once she has signed the contract.
c. recover from her lender for a failure to influence her “due.
d. recover from the bank for a failure to undo Lous influence.
Bobby has fifteen creditors. To force Bobby into bankruptcy proceedings, at least three
creditors must join the petition and their unsecured claims must add up to at least
a. $500.
b. $10,250.
c. $14,425.
d. $50,000.
Maple Products Corporation is a public company, which New Hampshire regulates and
in which Orin invests. The Sarbanes-Oxley Act of 2002 introduced direct federal
corporate governance requirements to
a. public companies.
b. private investors.
c. state regulators.
d. none of these choices.
Freds Paper Shop frequently buys paper from Online Office Supplies, Inc. Online
Office Supplies and Freds Paper Shop decide to enter into a partnering agreement. One
of the advantages of entering into a partnering agreement is that
a. the costs of all transactions will be reduced.
b. the likelihood that disputes will arise under their contract is reduced.
c. neither party will be able to file suit for breach of contract.
d. Freds Paper Shop will not be able to file suit for breach of contract.
Performance that provides a party with most of the benefits of a con-tract, in spite of a
deviation from the terms, is substantial performance.
a. True
b. False
Call Center Corporation, a U.S. firm, owns property in India. The government of India
seizes the property for a proper public purpose and pays Call Center just compensation.
This is
a. confiscation.
b. defalcation.
c. dumping.
d. expropriation.
A law that limits the liberty of all persons may violate substantive due process.
a. True
b. False
In business deals, Fiona, the chief executive officer of Snacks n Bites, Inc., follows
duty-based ethical standards. These are most likely derived from
a. a corporate ethics code.
b. a cost-benefit analysis.
c. philosophical reasoning.
d. the law.
In a tenancy in common, the interests are divided.
a. True
b. False
Forward-looking financial forecasts are prohibited under SEC Rule 10b-5.
a. True
b. False
U.S. district courts have original jurisdiction in federal matters.
a. True
b. False
Home Delivery Corporation and Interstate Transport, Inc., sign an agree-ment that
provides for the payment of “$1,000 by whichever party commits a material breach of
the contract that creates damages difficult to esti-mate but approximately $1,000. This
is
a. a liquidated damages clause.
b. a mitigation of damages clause.
c. a nominal damages clause.
d. a penalty clause.
The Arizona Supreme Court rules against Jennifer in a case against Kut Rate Stores,
Inc. Jennifer wants to appeal her case to the United States Supreme Court. She must ask
the Court to issue a writ of
a. appeal.
b. certiorari.
c. jurisdiction.
d. summons.
SealCoat Paving enters into a contract with Royal Golf & Tennis Club to provide
surface material for Royals tennis courts by April 1 for a tournament to begin May 1.
The contract specifies an amount to be paid if the contract is breached. This is a
liquidated damages clause if the amount is
a. meant to pay for additional liquid sealant in the event of damage.
b. a reasonable estimate of the loss on a breach.
c. designed to penalize the breaching party.
d. intended to quickly provide cash to the nonbreaching party.
In a limited partnership, a limited partner has full responsibility for the partnership and
for all its debts.
a. True
b. False