Quin, a clerk at PC Computer Store, takes a computer from the store without PCs
permission. Quin is liable for conversion
a. if he damages the computer.
b. if he does not have a good reason for taking the computer.
c. if he fails to prevent a theft of the computer from his possession.
d. under any circumstances.
Ian and Jackie take title to a drive-through Koffee Kiosk in such a way that if one dies,
the other will be the sole owner. Ian and Jackie own the kiosk as
a. co-owners in fee simple.
b. joint tenants.
c. tenants by the entirety.
d. tenants in common.
Muir County imposes a moratorium on building until the county issues its land-use
plan. According to the majority in Tahoe-Sierra Preservation Council, Inc. v. Tahoe
Regional Planning Agency, this moratorium most likely is
a. a taking and requires compensation.
b. a taking but does not require compensation.
c. not a taking and does not require compensation.
d. not a taking but does require compensation.
Fact Pattern 27-2B
Thom draws a check, on his account in State Bank in New York, payable to Digital
Computers, Inc., in San Francisco. Digital deposits the check in its account at First
National Bank. First National deposits the check in the Federal Reserve Bank of San
Francisco, which transfers it to the Federal Reserve Bank of New York. That Federal
Reserve Bank sends the check to State Bank.
Refer to Fact Pattern 27-2B. Thoms bank is
a. the cashing bank.
b. the depositary bank.
c. the intermediary bank.
d. the payor bank.
Weightless Workouts, Inc., offers to sell a home gym to Jessica and sends it to her on a
trial basis. This is
a. a consignment.
b. a delivery ex-ship.
c. a sale on approval.
d. a sale or return.
Denise, Ervin, and Flem occupy the positions of directors on the board of Gallery
Corporation. As directors, they may not
a. authorize major corporate policy decisions.
b. decide to issue stock and bonds, and declare dividends.
c. select and remove corporate officers.
d. support businesses that directly compete with Gallery.
Biff wrongfully takes an unopened carton from a Cold Storage Warehouse loading
dock, puts the carton in his car, and drives away. This is
a. burglary.
b. robbery.
c. larceny.
d. no crime.
Global Distribution Corporation suggests that its employees apply the “categorical
imperative to ethical issues that arise at work. This requires that the employees
a. categorize the issues according to legality, morality, and profitability.
b. consider only the benefits that would accrue to them personally.
c. look only at the result, regardless of the means to attain it.
d. weigh the consequences that would follow if everyone acted the same.
New York enacts a statute that requires a label on a video game to warn parents when
“the range of options available to a player include dismembering or sexually assaulting
the image of a human being. On appeal from a challenge by gamemakers, the state asks
a federal court to enforce the statute. Based on the decisions of other federal courts in
cases involving similar statutes, the court in this case is most likely to
a. refuse to extend restrictions on sex-based content to violence in video games.
b. expand the labels warning to include other forms of violence.
c. impose market-share liability on makers of violent video games.
d. replace the voluntary rating system currently in use.
Veronica offers to sell Rowena her luxury sedan and says that it has never been in an
accident. Rowena hires Laszlo, a mechanic, to appraise the vehicle. Laszlo says that it
most likely has been in an accident. In spite of this information, Rowena buys the car.
Later, when it develops mechanical problems, she can
a. not rescind the contract.
b. rescind the contract on the basis of fraud.
c. rescind the contract on the basis of mistake.
d. rescind the contract on the basis of unconscionability.
My-Tee Shirt Corporation orders from Celebrity Sales, Inc., goods that are stored in a
Realty, Inc., warehouse. My-Tee pays for the goods, delivery is via the transfer of a
negotiable warehouse receipt, and My-Tee moves the goods out of the warehouse. The
risk of loss passes to My-Tee when it
a. orders the goods.
b. pays for the goods.
c. receives the negotiable warehouse receipt.
d. moves the goods out of the warehouse.
RingTone Corporation is a public company whose securities are traded among
investors. Under the Securities Act of 1933, a security is
a. almost any stake in the ownership or debt of a company.
b. an investment that is guaranteed to make a profit.
c. only such common forms of debt and equity as bonds and stocks.
d. whatever a company represents to the public as a security.
Hoppy, who works as an employee for Integrated Systems Corporation, suffers an
injury in an accident. Hoppy will be compensated under state workers compensation
laws
a. only if the injury occurred during working hours.
b. only if the injury occurred off the job.
c. only if the injury occurred on the job.
d. whenever and wherever the injury occurred.
Discount Factory Outlets, Inc., issues bonds. Bonds
a. are issued by businesses only.
b. are sometimes referred to as ‘stock with preferences.
c. have maturity dates.
d. require periodic interest payments from their owners.
Simpatico Business, Inc., a U.S. firm, expands into international markets through a joint
venture. In the venture, Simpatico shares
a. both the profits and liabilities.
b. none of the profits or liabilities.
c. the profits but not the liabilities.
d. the liabilities but not the profits.
Miklos grants an ordinary power of attorney to Nathalie to handle a list of financial
transactions on Mikloss behalf. This power will terminate on
a. any transaction causing a loss to Miklos.
b. Mikloss death or incapacity.
c. Mikloss sixty-fifth birthday.
d. Nathalies handling of one of each stipulated transaction.
Bob, an accountant, intentionally misstates a material fact to mislead Consolidated
Industries, Inc., a client. Consolidated justifiably relies on the misstatement to its
detriment. Bob is most likely liable for
a. actual fraud.
b. constructive fraud.
c. destructive fraud.
d. virtual fraud.
Domino causes a disturbance at El Nino Cafe. He is arrested and charged with
disorderly conduct, a misdemeanor. A misdemeanor is a crime punishable by
a. a fine only.
b. imprisonment up to one year.
c. imprisonment up to six months.
d. imprisonment up to ten days.
Dotty tells a representative of Education Loan Company over the phone that she will
pay Felipes student loan if he does not. Dotty does not get any personal benefit for the
promise. This promise is enforceable as a contract by
a. Dotty.
b. Education Loan Company.
c. any interested third party, such as Felipe or a member of his family.
d. none of the choices.
Odell, Prince, and Quinn are shareholders of Rite Corporation. Before a shareholders
meeting, they agree in writing to vote their shares together in a certain manner. Usually,
such agreements are held to be
a. invalid and unenforceable.
b. oppressive and irresponsible.
c. suspect and voidable.
d. valid and enforceable.
Clu, Dolf, and Elton do business as Fertile Valley Farm. Clus relationship to the firm
ends, but it continues to do business. This is
a. dissociation.
b. dissolution.
c. winding up.
d. wrongful.
Rolf, a citizen of New Mexico, wants to file a suit against Sandy, a citizen of Texas.
Their diversity of citizenship may be a basis for
a. no court to exercise jurisdiction.
b. a federal court to exercise original jurisdiction.
c. a state court to exercise appellate jurisdiction.
d. the United States Supreme Court to refuse jurisdiction.
Bret buys a franchise from Comida Mexicano Ltd. If their agreement is like most
franchise agreements, it will specify that Comida can terminate the franchise
a. at will.
b. for any reason.
c. for cause only.
d. for no reason.
Sydney borrows money from Rite Now Loan Company. For Rite Now to obtain a writ
of execution, Sydney must
a. be unable or refuse to pay the amount of a judgment.
b. be unable to redeem Sydneys exempt property.
c. notify Rite Now in writing (in a “writ) of his intent.
d. surrender possession of his property to a court.
Rollos Super Store sells goods to consumers and businesses in a rural county in the
Midwest. Most of the goods are sold on credit. Rollos often takes a security interest
with the goods as collateral. Classification of the collateral determines
a. when or how to perfect a security interest.
b. the terms of a sale.
c. the effective time duration of credit.
d. the general rules of priority.
Edna and Flavia buy a boat that they dock in a marina near Gulfport, Mississippi. On
the death of either owner, that owners interest in the boat passes to her heirs. This is
a. a joint tenancy.
b. a life estate.
c. a tenancy in common.
d. ownership in fee simple absolute.
Zeke files a petition in bankruptcy for relief through an individuals repayment plan.
Zekes plan must provide for
a. the turnover of his future income to the trustee.
b. his attendance at a credit-counseling briefing.
c. adequate means for the petitions execution.
d a preference for one creditor over another.
Mona is an agent for Nationwide Restaurant Corporation (NRC). In acting as an agent,
Mona follows all of NRCs clearly stated instructions. This responsibility arises under
a. no agents duty.
b. the agents duty of loyalty.
c. the agents duty of notification.
d. the agents duty of obedience.
Fact Pattern 18-B1
Bella Homes enters into a contract to buy 132 acres from Watershed Holdings to
subdivide and sell in fifth-acre lots for Pristine Acres, a residential development.
Refer to Fact Pattern 18-1. If Bella breaches the contract, Watersheds remedy would
most likely be
a. a certain ratio of the amount that Bella has in liquidated funds.
b. a percentage of Bellas unrealized profit.
c. the difference between the lands contract and market prices.
d. specific performance.
Max is married to Nina. Max executes a will, leaving certain property to Nina and other
property to Opal, who is unrelated to Max and Nina. On Maxs death
a. neither Nina nor Opal can renounce their shares.
b. Nina and Opal can both renounce their shares.
c. Nina can take only what the will provides but Opal can renounce her share.
d. Opal can take only what the will provides but Nina can renounce her share.
Mango Corporation believes that Melon Corporation engages in anticompetitive
behavior in an attempt to drive Mango, its chief competitor, out of the market. Antitrust
laws can be enforced against Melon by
a. only a disinterested third party.
b. Congress.
c. Mango.
d. none of the choices.
Ollie, an employee of Payroll Management Corporation, is arrested at work. A grand
jury issues a formal charge against Ollie for larceny. This charge is
a. an arraignment.
b. an indictment.
c. an information.
d. an inquisition.
The South Carolina Supreme Court decides the case of Toy Co. v. Umbrella Corp. The
court issues an opinion that does not indicate which justice authored it. This opinion is
a. a concurring opinion.
b. a dissenting opinion.
c. an en banc decision.
d. a per curiam opinion.
The Financial Institutions Association would like a certain law enacted, administered,
interpreted, and enforced in the best interest of its members, which include banks.
Under the Constitution, Congress
a. administers the laws.
b. enforces the laws.
c. interprets the laws.
d. makes the laws.
A contractual obligation may not be discharged through novation.
A promise to pay for an act that has yet to occur is unenforceable.
State laws may restrict a businesss discharge of chemicals into the air or water.
Remedies in equity include injunctions and decrees of specific performance.
Under the UCC, the right of ownership is the central concept in sales law.
An assignees rights are free of the defenses that the obligor has against the assignor.
Vishing is phishing that involves voice communication.
The Environmental Protection Agency has concluded that greenhouse gases, including
carbon dioxide emissions, do not constitute a public danger.
A license permits the use of intellectual property for certain limited purposes.
A contract between Kwik Import Company in Los Angeles and Macro Retail
Corporation in New York does not expressly state which party bears the risk of loss but
says only that Kwik is “to ship goods at the sellers expense. At what point does the risk
of loss of the goods pass from the seller to the buyer?
A continuation statement will continue the effectiveness of a financing statement for
five years.
Market power is the economic power to buy what you want in a given market.
Directors have a right to participate in all board of directors meetings.
Federal law governs garnishment actions.
Conversion cannot occur when a person mistakenly believes that he or she is entitled to
the goods.
A security interest is enforceable only if the collateral is in the secured partys
possession.
A financing statement cannot be filed electronically.
The Civil Rights Act of 1964 does not prohibit job discrimination on the basis of
national origin.
The most common reason that ethical problems occur in business is an overemphasis on
long-run profit maximization.
An integrated contract is the complete and final statement of the terms of the
agreement.