Ben and Ivy enter into a contract under which Ben agrees to cater Ivy’s wedding in
exchange for a cash down payment. The contract expressly prohibits any transfer of
rights. A contract right may be transferred, however, if the transfer involves
a. a right to receive payment.
b. a right to Ben’s services.
c. rights under Ivy’s insurance policy against Ben’s failing to perform.
d. a right whose transfer is otherwise expressly prohibited by statute.
Viola is a director of Water Pure Corporation. With respect to Water Pure, Viola’s most
important right is the right of
a. compensation.
b. indemnification.
c. participation.
d. certification.
The case of Max v. National Credit Co. is heard in a trial court. The case of O! Boy! Ice
Cream Co. v. Pickled Peppers, Inc., is heard in an appellate court. The difference
between a trial and an appellate court is whether
a. a trial is being held.
b. the court is appealing.
c. the parties question how the law applies to their dispute.
d. the subject matter of the case involves complex facts.
Greta is a member of Hovercraft LLC. As a member, Greta is
a. a manager or officer, but not an owner.
b. an investor, but not a manager, officer, or owner.
c. an owner.
d. a participant, but not an investor, manager, officer, or owner.
Great Tans, Inc., uses, in its radio ads, a recording by Holly, who owns the rights,
without paying for the use. Over time, the song comes to be associated with Great Tans.
In Holly’s suit against Great Tans, the firm is most likely liable for
a. appropriation.
b. conversion.
c. wrongful interference with a customary relationship.
d. no tort.
Expert Stitching Corporation enters into a contract to sell denim clothing to Fine
Fashion Company, which in turn sells a pair of jeans to Grady, a consumer. In contrast
to standards that apply to consumers, the UCC imposes on merchants
a. less strict legal standards.
b. special business standards.
c. stricter ethical standards.
d. the same overall standards.
Ergonomic Corporation convenes its employees for its managers to announce (1) a new
company-wide ethical code of conduct, (2) an ad campaign to publicize the new code,
and (3) the discharge of employees who do not adhere to the code. One of the most
effective ways to set a tone of ethical behavior within a business organization is
a. to create an ethical code of conduct.
b. to discharge employees who do not create the appearance of impropriety.
c. to post a marketing campaign online touting the firm’s ethical tone.
d. for management to direct employees to “do as we say, not as we do.”
Jay is a member of Kitchen Cookouts, LLC, a limited liability company. Jay is liable
for Kappa’s debts
a. in proportion to the total number of members.
b. to the extent of his investment in the firm.
c. to the extent that the other members do not pay the debts.
d. to the full extent.
Bilt-Well Construction Corporation makes a side payment to a government official in
Nigeria to obtain a contract. In the United States, this is
a. illegal and unethical.
b. illegal but not unethical.
c. unethical but not illegal.
d. legal and ethical.
Frida and Gregor want to market a new line of fishing gear. To avoid income taxes at
the corporate level, they should form
a. a C corporation.
b. a close corporation.
c. an S corporation.
d. a private corporation.
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.
Owen, in Pennsylvania, and Quonset Structures, Inc., in Maryland agree to have their
dispute resolved in arbitration according to the law of Virginia. This is a ground for a
court to
a. do nothing.
b. review the merits of the dispute.
c. review the sufficiency of the evidence.
d. set aside the award.
Shelly and Tom disagree over the amount of money due under their contract. To avoid
involving any third party in a resolution of the dispute, Shelly and Tom might prefer to
use the alternative dispute resolution method of
a. arbitration.
b. litigation.
c. mediation.
d. negotiation.
Child’s Play, Inc., sells a toy with a dangerous defect. Drew buys the toy for his son but
discovers the defect before the child is injured. Drew files a suit against Child’s Play.
The firm’s best ground for dismissal of the suit is that Drew does not have
a. certiorari.
b. jurisdiction.
c. standing to sue.
d. sufficient minimum contacts.
Harvey puts up a guitar for bids on eWay, a Web auction site. Faith makes the highest
bid and sends the payment, which Harvey receives, but he does not send the guitar to
her. This is online
a. auction fraud.
b. puffery.
c. retail fraud.
d. frustration but not fraud.
Congress enacts a law that sets out a medical-device approval process for the Food and
Drug Administration to follow. The law includes a preemption provision. A device that
goes through the process injures Joe, who files a claim under state law to recover. The
court will most likely rule that
a. Joe’s state law claim preempts the federal law.
b. the federal law and state law claim are concurrent.
c. the federal and state law claim cancel each other out.
d. the federal law preempts Joe’s state law claim.
Earl holds 1,000 pounds of perishable fruit in storage for Fresh Food Corporation. Fresh
Food does not pay for the storage. Earl sells the fruit to Green Grocers, Inc. This sale
represents
a. a breach of contract.
b. a mitigation of damages.
c. rescission and restitution.
d. specific performance.
Inferior Company sells products that are poorly made. Jock, who has never bought an
Inferior product, files a suit against Inferior, alleging that its products are defective. The
firm’s best ground for dismissal of the suit is that Jock does not have
a. certiorari.
b. jurisdiction.
c. standing.
d. sufficient minimum contacts.
Informal contracts include all contracts other than formal contracts.
Most lawsuits are settled or dismissed before they go to trial.
A limited liability company must be managed by non-member managers.
A lessor is a party who acquires a right to the possession and use of goods under a lease.
Reformation allows a court to rewrite a contract to reflect the parties’ true intentions.
An auction”we ask you to bid on this item”is an offer.
Liquidated damages are damages that are certain in amount.
An agreement to form an agency relationship can be oral.
A limited liability company is not a citizen of any state.
A contract may have to be in writing to be enforceable even if its performance is
possible within a year.
Corporate profits can be subject to double taxation.
If a seller is not a merchant, and the seller holds the goods, the risk of loss cannot pass
to a buyer.
Stanford Engineering, Inc., and Cornell Code Corporation market competitive software
products. Stanford launches an advertising campaign claiming that Cornell, instead of
testing its software before it is marketed, has its customers “test” the software by using
it. Cornell knows this is not true but begins to lose sales to Stanford. On what grounds
could Cornell sue Stanford for injury to Cornell’s reputation?
Disparagement of property is another term for appropriation.
Nominal damages normally establish that the defendant acted wrongly.
Statutory law does not include county ordinances.
“Consideration” refers to the voluntary consent of all of the parties to a contract.
A marketing technique can be a trade secret.
The crime of bribery occurs when the bribe is offered even if it is not accepted.
A bailee is a buyer or lessee.