Kris contracts to work exclusively for Little Manufacturing Company during May for
$5,000. On April 30, Little cancels the contract. Kris finds another job during May but
earns only $3,000. Kris files a suit against Little. As compensatory damages, Kris can
recover
a. $3,000.
b. $2,000.
c. $1,000.
d. $0.
Joy and Kris enter into a contract for Kris to lay sod in Joy’s yard for which she agrees
to pay Kris. When Kris’s schedule conflicts, she contacts Leza, to whom Kris “assigns
all rights under the contract.” Kris is
a. absolved of any liability under the contract.
b. in breach of the contract with Joy.
c. liable to Joy if Leza does not perform.
d. liable to Leza for inducing a prohibited contract.
Pure Water Company is subject to a decision by the Environmental Protection Agency.
Pure Water appeals the decision, arguing that it is arbitrary and capricious. This could
mean that the decision
a. changed the agency’s prior policy without justification.
b. followed a consideration of all relevant factors.
c. was accompanied by a rational explanation.
d. was plainly warranted by the evidence.
Phil agrees to work for Vacation Resorts, Inc., as a chef. In determining whether a
contract has been formed, an element of prime importance is
a. the parties’ intent.
b. Phil’s rate of pay.
c. Phil’s education.
d. the terms of Phil’s employment.
James is in an art gallery when Will, who has no special art expertise, points to a
painting and says “That artist is so good. That piece will be worth a fortune in a few
years!” James buys the painting, which does not turn out to be valuable. James tries to
return the painting and recover his purchase price. A court will
a. order the art gallery to pay James the full purchase price.
b. order Will to pay James the full purchase price.
c. enforce the contract between James and the art gallery.
d. enforce the contract between James and the art gallery, but order Will to pay James
the full purchase price.
David, an Alabama resident, files a suit in an Alabama court against QuickAds, an
Internet company based in Georgia that provides advertising services. QuickAds only
contact with persons in Alabama has been through QuickAds’s passive advertising. The
Alabama court is
a. likely to have jurisdiction over the case.
b. not likely to have jurisdiction over the case.
c. likely to refer the case to a higher district court.
d. likely to refer the case to an appellate court.
Opal asks Paolo, who does not understand English, to sign what Opal says is an
application to open a bank account. In fact, the “application” is a note. If sued on the
note by an HDC, Paolo’s best defense would be
a. extreme duress.
b. fraud in the execution.
c. fraud in the inducement.
d. mistake.
Picabo drives a truck as an employee for Quik Delivery, Inc. Picabo would most likely
be considered acting outside the scope of her employment if she
a. crashed into a car at the airport while off duty.
b. hit a pedestrian in a parking lot during a “working” lunch.
c. ran over an attendant at Quik’s gas station while refueling the truck.
d. smashed into a store-front while intoxicated on-duty.
Utility Power Company has the right to run its power lines across Velma’s land. This is
a. a license.
b. an easement.
c. a profit.
d. a fee simple absolute.
Pat leases an apartment from Quality Rental Company. During the lease term, Real
Estate, Inc., claims to have superior title to the apartment and tells Pat to vacate the
premises. This is a violation of
a. a tenancy at sufferance.
b. the covenant of quiet enjoyment.
c. the implied warranty of habitability.
d. the unconscionability concept.
Maria signs an instrument payable to the order of National Loans, Inc., “on or before”
June 15. This instrument is
a. negotiable.
b. nonnegotiable, because the maker can move up the payment date.
c. nonnegotiable, because moving up the payment date is optional.
d. nonnegotiable, because the exact payment date cannot be determined from the face of
the instrument.
Jill handwrites what she intends to be her will on a blank sheet of paper in ink. If Jill
has capacity, this “will” is
a. invalid.
b. valid if Jill signs it.
c. valid if Jill signs it and has at least three witnesses sign it.
d. valid if Jill signs it, has at least three witnesses sign it, and files it in the appropriate
state or county office.
Mariah promises to pay her assistant Nadine $10,000 in consideration of the services
she provided over the years. Mariah never pays Nadine. Mariah is
a. liable for payment of the $10,000.
b. liable only if Nadine still works for Mariah.
c. not liable, because the consideration is in the past.
d. not liable, because the consideration was unintentional.
Thermo Gas, Inc., and Uno Oil Corporation refine and sell gasoline and other
petroleum products. To limit the supply of gas on the market and thereby raise prices,
Thermo Gas and Uno Oil agree to buy “excess” supplies from dealers and “dispose” of
it. This is
a. a deal that neither restrains trade or harms competition.
b. a legal restraint of trade.
c. a per se violation of the Sherman Act.
d. subject to analysis under the rule of reason.
Fancy’s Feedlot orders one hundred sacks of cattle feed from Bovine Feeders, Inc. Each
bag has the words “Twenty percent protein” printed on the front. This is
a. an express warranty.
b. an implied warranty.
c. a warranty of title.
d. puffery.
Dale and Elin sign a contract that intentionally confers a benefit on Federica. Federica’s
rights under the contract will vest
a. automatically.
b. if she manifests assent to the contract or materially alters her position in detrimental
reliance on it.
c. only if she manifests assent.
d. only if she materially alters her position in detrimental reliance.
National Shipping Corporation and Office Software Company (OSC) make a deal for
OSCs products, communicating entirely online. Under the UETA, an electronic record
is considered sent
a. only at a midway point between the sender and recipient.
b. only on coming into the recipient’s control.
c. only on leaving the sender’s control.
d. when it leaves the sender’s control or comes into the recipient’s control.
Paula wants to transfer a check to Quinn. The check is defective if it
a. has been previously dishonored.
b. has no irregularities on its face.
c. is not overdue.
d. is so complete that no element of negotiability is lacking.
Kathy and John decide to form a partnership to sell fish food to local fish farms for the
next five years. To be enforceable under the Statute of Frauds, the partnership
agreement
a. must be signed by a notary public.
b. must be in writing.
c. must be oral.
d. cannot involve a third party.
Riley owns Superior Apartments. He promises his tenants that during the lease term,
neither he nor anyone with a superior title to the property will disturb the tenants’ use
and enjoyment of the premises. This is
a. a tenancy at sufferance.
b. the covenant of quiet enjoyment.
c. the implied warranty of habitability.
d. the unconscionability concept .
Realty Credit Company and Second Mortgage Corporation plan to consolidate. Most
likely, the articles of consolidation will be filed with
a. the county recording office.
b. the Securities and Exchange Commission.
c. the state’s secretary of state.
d. the U.S. Department of Justice.
Leigh wants to go into the business of construction contracting. Among the reasons that
would probably convince Leigh to set up his business as a sole proprietorship would be
a. its greater organizational flexibility.
b. its limited liability.
c. its perpetual existence.
d. the ease of transferring the business to other family members.
Ciera is fifteen. In most states, Ciera would be considered a minor because she is under
the age of
a. sixteen.
b. eighteen.
c. twenty.
d. twenty-one.
Big U.S. Oil Company joins with a foreign cartel to control the price of oil. If the cartel
has a substantial effect on U.S. commerce
a. both Big U.S. Oil and the foreign cartel can be sued for violation of U.S. antitrust
laws.
b. neither Big U.S. Oil nor the foreign cartel can be sued for violation of U.S. antitrust
laws.
c. only Big U.S. Oil can be sued for violation of U.S. antitrust laws.
d. only the foreign cartel can be sued for violation of U.S. antitrust laws
Dex and Carmen are in an auto accident. Dex offers Carmen $2,000 if she promises not
to pursue her potential legal claim against Dex. Carmen agrees. Later, Carmen
discovers that it will cost $1,500 to repair her car and $4,000 to cover the medical
expenses for a latent injury.
Refer to Fact Pattern 10-4. The agreement between Dex and Carmen is
a. a covenant not to sue.
b. an accord and satisfaction.
c. a release.
d. promissory estoppel.
Nyoko signs a covenant not to compete with her employer, Midstate Distribution, Inc.
The covenant will be enforced if it
a. does not require either party to obtain a business license.
b. is reasonable with respect to geographic area and time.
c. relieves Midstate from liability for any injury to Nyoko due to simple negligence.
d. none of the choices.
Because stock is intangible personal property, a stockholder’s ownership of the stock
a. exists independently of the stock certificate itself.
b. cannot exist without a tangible stock certificate.
c. cannot exist without the original stock certificate.
d. cannot be transferred to another person.
Phil is a minor. He makes many purchases. For which of the following items will Phil
be held liable for the reasonable value of the goods?
a. Apples
b. Insurance
c. Baseball cards
d. A car
Which of the following does not necessarily make material obscene?
a. The average person finds that it violates contemporary community standards.
b. The work taken as a whole appeals to a prurient interest in sex.
c. The work shows patently offensive sexual conduct.
d. The work shows animals mating.
Lem buys a used MP3 player for $50 and a new air hockey table for $1,500, and signs a
one-year employment contract for a $4,000 monthly salary to start at the beginning of
the next month. The Statute of Frauds covers
a. the employment contract, and the air hockey table and MP3 purchases.
b. the employment contract and the air hockey table purchase only.
c. the employment contract only.
d. the air hockey table and MP3 purchases only.
There are no circumstances under which a contract can be tendered by multiple
deliveries of goods.
Breach of contract or warranty is no defense to payment of a negotiable instrument to
any holder.
An applicant for an insurance policy is called an underwriter.
American courts follow the adversary system of justice.
The intended business activities of a corporation must be specified in its articles of
incorporation.
Destroying records in relation to a bankruptcy proceeding can be in a company’s best
interest.
With a couple of new ideas regarding software design, Carol and Ray start a partnership
that, with business success, becomes Pacific Applications Company. The company
grows to include a staff of twenty-one employees. Over time, Pacific develops a new
computer operating system. The firm signs licensing contracts with several computer
manufacturers, but needs to double the number of its employees to fulfill those
contracts. Is Pacific subject to federal antidiscrimination laws? If so, what should it
consider in hiring new employees?
A fixed-term tenancy is created by an express contract.
All collateral promises must be in writing to be enforceable.
Certain types of property are exempt from writs of execution or attachment.
A codicil is a clause in a will affirming an administrator’s testamentary capacity.
Women are an example of a protected class.
It is illegal for a company with a product that is outlawed in one country to look
elsewhere for a market.
Best Products, Inc., hires Cole to develop and implement an e-commerce strategy for
marketing Best’s products. Cole signs a contract that includes a clause prohibiting him
from competing with Best during and after the employment. Before the strategy is
implemented, Cole resigns from Best’s employ and opens a business to compete with
Best. In Best’s suit against Cole, to determine whether Cole may compete with Best,
what is the most important factor the court should consider?
When a sale of assets amounts to what in fact is a consolidation, the acquiring
corporation inherits the selling corporation’s liabilities.