Nadine is a spectator at the Metro City Softball Tournament, an athletic competition.
Regarding the risk of injury, Nadine assumes the risks
a. attributable to the tournament in any way.
b. different from the risks normally associated with the tournament.
c. greater than the risks normally associated with the tournament.
d. normally associated with the tournament.
Equipment Rental Corporation and Family Farm, Inc., are parties to an oral agreement
for a lease of farm equipment with payments in excess of $10,000. They may satisfy the
Statute of Frauds by
a. mutually agreeing not to commit fraud.
b. repeating the terms in a phone call.
c. setting out the terms in a memo.
d. shaking hands on the deal.
Duran applies to EZ Credit Mortgage Company for $100,000 to buy a home. EZ Credit
steers Duran toward an adjustable-rate mortgage even though he qualifies for a
fixed-rate mortgage. This is
a. a short sale.
b a subprime mortgage.
c. loan flipping.
d. steering and targeting.
Sweet Treats, Inc., wants to market a new snack food. On the products label, standard
nutrition facts are
a. prohibited.
b. required.
c. strictly voluntary.
d. warranted by the nature of the food.
3D FX, LLC, and Vivid Star CG, Inc., are parties to a contract. They subsequently
agree that Pixellated Inc. should take 3Ds place and assume all of its rights and duties
under the contract. This is
a. a mutual agreement to rescind.
b. an accord and satisfaction.
c. a novation.
d. commercial impracticability.
The Alabama Consumer Protection Agency (ACPA) investigates the marketing
practices of Beta Sales, Inc. The ACPA serves a subpoena on Beta, ordering the firm to
provide certain business records, including its marketing agreements with other
companies. Beta refuses to comply with the subpoena. On what is Beta most likely
basing its refusal? Is a court likely to support Betas position? Why or why not?
Even-Flo Hydraulics enters into a contract to repair valves and fittings in Fiesta
Companys plant. If Even-Flo breaches the contract, Fiesta can
a. do nothing but make a deal with .a different service provider.
b. do nothing but temporarily suspend operations and wait.
c. file a criminal complaint against Even-Flo.
d. sue Even-Flo for damages.
Hu, Ivan, and Juana apply to work for King Meatpacking Company. These individuals
identities and eligibility to work must be verified by
a. the employer.
b. the individuals.
c. the individuals countries of origin.
d. the U.S. Citizenship and Immigration Services.
Felicity and Gideon want to form and do business as Home Healthcare Corporation. A
corporation is
a. a natural being.
b. a tangible thing.
c. an artificial person.
d. a visible radiance.
Neighborly Insurance Company and Ollie put their agency agreement into a written
document that describes the rights and duties of both parties. Ollie, as the agent, has
a. apparent authority.
b. equal authority.
c. express authority.
d. implied authority.
Fact Pattern 17-B1
Kip sells an apartment building to Lacy with a promise to repair the roof, which
violates the local housing code, within six months. One year later, Kip sends Milo, a
carpenter, to fix the roof. Lacy orders Milo to leave and refuses to make further
payments to Kip, who files a suit against Lacy.
Refer to Fact Pattern 17-1. Kips late attempt to fix the roof is most likely
a. a material breach.
b. complete performance.
c. excused by Lacys refusal to make further payments.
d. substantial, but not complete, performance.
Viola assures Wendell that she will deliver a truckload of pine seedlings to his tree
farm. A persons manifestation of an intent to act in a specified way is part of the defini-
tion of
a. an expectation.
b. a moral obligation.
c. an ethical principle.
d. a promise.
Fact Pattern 28-4B
Marys home is in a state that has a $30,000 homestead exemption. Mary defaults on a
$60,000 debt that she owes to Nina. Marys home is sold at auction for $80,000.
Refer to Fact Pattern 28-4B. Nina may recover
a. 0.
b. $30,000.
c. $50,000.
d. $60,000.
Reed borrows $150,000 from Suburban Credit Union to buy a home, which secures the
loan. Three years later, Reed stops making payments on the loan. After Suburban Credit
repossesses and auctions off the property to Tyler, equity remains. This amount most
likely belongs to
a. Reed.
b. Suburban Credit Union.
c. Tyler.
d. the county in which the property is located.
Floyd and Gert enter into a contract by which Floyd promises to deliver fertilizer to
Gert. Floyd subsequently transfers this duty to Hazel. Floyd is
a. a delegatee.
b. an obligee.
c. an obligor.
d. an assignee.
Dora leases a house from Evan for a two-year term. To ensure the validity 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 requirement that Dora perform structural repairs to the house.
d. a requirement that Evan carry liability insurance.
Energy Unlimited, LP, is a limited partnership to which its partners, including Fink,
have contributed capital. Energys creditors include Graves Engineering, Inc. On
Energys dissolution, its assets will be distributed to pay
a. Fink and Graves proportionately.
b. Fink first.
c. Graves first.
d. neither Fink nor Graves.
Denise borrows $90,000 from Clear Lake Credit Union to buy a home. Denise loses her
job and fails to make payments on the mortgage, but assures Clear Lake Credit that she
will soon secure a new job. The lender agrees to postpone the payments. This is
a. a bridge loan.
b. forbearance.
c. a reamortization.
d. a restructure.
Desmond is Cassandras agent. Despite ethical concerns, Cassandras legal duties to
Desmond do not include
a. compensation.
b. cooperation.
c. loyalty.
d. reimbursement.
Belle enters into a contract to subdivide and sell housing lots in Colins hillside field if
Dell City annexes the property within the next year. Belles duty to perform is
a. absolute.
b. conditional.
c. illusional.
d. irresolute.
Khalis debt to Lew is past due. Lew obtains a judgment against Khali to collect the
debt, but Khali refuses to pay. Lew asks the court to order Khalis employer to pay a
portion of Khalis paycheck to Lew. This is a request for
a. a mechanics lien.
b. an order of garnishment.
c. an order that would violate most state laws.
d. a writ of attachment.
Timberline Plywood Company discharges its untreated wastewater into Urban Citys
storm drainage pipes, which empty into Valley Creek. Under the Clean Water Act, this
discharge is most likely
a. a violation.
b. not a violation because the company does not own the pipes.
c. not a violation because water is not a stationary source.
d. not a violation because a storm drainage pipe is not a point source.
USA Cellphone Corporation requires all distributors of its products to sell the products
at specified minimum prices. This resale price maintenance agreement is
a. a per se violation of antitrust law.
b. a legal restraint of trade.
c. subject to evaluation under the rule of reason.
d. not subject to antitrust law.
The Environmental Protection Agency (EPA) has the authority to regulate “any air
pollutant. Fresher Air Group, a private organization, supports cleaner air. Fresher Air
can file a suit against the EPA to
a. compel the EPA to act only.
b. compel the EPA to act or prevent it from acting.
c. neither compel the EPA to act nor prevent it from acting.
d. prevent the EPA from acting only.
DrugCo, Inc., makes and markets Evenflo, a prescription drug. Food and Drug
Administration (FDA) rules require ads for prescription drugs to disclose all of the
potential negative side effects. Display ads on the Web are not amenable to such lists.
Thus to comply with FDA rules, on the Web DrugCo should run
a. a general, disease-related search ad.
b. an ad for Evenflo without a list of side effects.
c. a tweet.
d. no ads.
Twyla buys a Voracious-brand bicycle from U-Pik-It Bike Store, which agrees to keep
the bike for Twyla until she picks it up. Before Twyla gets the bike, a fire destroys the
store and the bike. The loss of the bike is suffered by
a. no one.
b. Voracious.
c. Twyla.
d. U-Pik-It.
Fact Pattern 14-A2
Moore Properties, Inc., offers in writing to sell to New Development Corporation
(NDC) a certain half-acre of land for “$112,000. After New Development signs the
offer in acceptance and returns it, Moore discovers that the price should have been
stated as “$121,000.
The effect of Moores misstatement of the price will most likely fall on
a. Moore and NDC, who must split the difference.
b. Moore only.
c. NDC only.
d. neither Moore nor NDC.
Focus Camera Shop receives Sharpview-brand lenses from Optical, Inc., under a sale or
return agreement. While the lenses are in Focuss possession, title is held by
a. Optical.
b. Focus.
c. Focuss creditors.
d. Sharpview.
Development Associates (DA) agrees to buy five acres of land from Eastside Properties
for $15,000. Eastside fails to go through with the deal on the agreed date, when the
market price of the land is $17,000. DA may recover
a. $17,000.
b. $15,000.
c. $2,000.
d. $0.
Cleo sells kitchen appliances to persons who come into her store, Buy n Sell
Appliances. One afternoon, Cleo sells a used display shelf to Earline. At a garage sale at
her home, Cleo sells a used sofa to Flavia. Under the UCC, Cleo is a merchant of
a. kitchen appliances only.
b. kitchen appliances and display shelves only.
c. kitchen appliances, display shelves, and sofas.
d. none of the choices.
Generally, a contract is assumed to be a destination contract if nothing to the contrary is
stated in the contract.
Java Bean Company imports coffee beans and sells them under two-year contracts to
Mellow Roast, Inc., and other coffeemakers. The contracts require that during the
two-year term a coffeemaker not buy beans from Java Beans competitors. The contracts
do not limit the coffeemakers purchase of tea or other beverage ingredients from other
suppliers, however. In the second year of the contract, Mellow Roast protests that this
arrangement violates antitrust law. Is Mellow Roast correct? If not, why not? If so,
under which antitrust statute, or statutes, could these contracts be held illegal?
The public must be provided with adequate advance notice of scheduled federal
administrative agency meetings and agendas.
Misrepresentation of a material fact cannot occur by silence.
After two years of research and an investment of a substantial amount of money,
Coast-to-Coast Company (CC) develops a new product that it hopes will produce
substantial profits. CC learns that a competitor, National Sales, Inc., has made and
begun to sell a nearly identical product. CC learns from a reliable source that National
paid a CC employee to obtain the plans for CCs product when it was in development.
What legal recourse does CC have against National?
A contract is not discharged by a foreseeable circumstance no matter how difficult or
costly the performance may become.
A limited liability partnership may exempt its partners from personal liability for any
partnership obligation.
The four broad types of damages in contract law are conciliatory, consecutive, punctual,
and nominative.
Dissolution can be brought about voluntarily by the directors and shareholders of a
corporation.
Resolving whether a promise should be enforced is a function of contract law.
Whenever a bank-customer relationship is established, certain contractual rights and
duties arise.
Mediation is adversarial in nature.
A principal does not have the right to control an agents conduct in matters entrusted to
the agent.
Shareholders are personally liable for the debts of a corporation.
A release bars further recovery beyond the terms stated in the release.
In most courts, accountants are subject to liability for negligence only to their clients.
Repeated annoyances coupled with threats are sufficient to recover for the infliction of
emotional distress.
Penalties for aiding or assisting in the preparation of false tax returns are limited to one
penalty per taxpayer per tax year.
After a contract is made, a supervening event may make performance impossible and
discharge the contract.
Any event that makes its unlawful for a partnership to continue its business will result
in dissolution.