Ski Resorts, Inc., wants to add a new run to its facility in a national park on federal
land. For this action, an environmental impact statement is
a. prohibited.
b. required.
c. unnecessary.
d. voluntary.
Kipper files a petition in bankruptcy. Kipper’s dischargeable debts include
a. domestic-support obligations.
b. student loans unless the lender would suffer undue hardship.
c. unpaid state and federal taxes.
d. unsecured credit-card debt.
Sid files a suit against Tina. Before going to trial, the parties, with their attorneys, meet
to try to resolve their dispute. A third party helps them to reach an agreement. This is
a. arbitration.
b. litigation.
c. mediation.
d. negotiation.
To adjust debts and institute a repayment plan that is less expensive and less
complicated than other options, Brunch & Lunch Café, a small business, may file a
petition in bankruptcy for relief through
a. a liquidation.
b. a reorganization.
c. a repayment plan.
d. a family-farmer bankruptcy plan.
Exotic Stuff Company and First Pier, Inc., form a business organization to engage in
importing and exporting. Its property is held in the names of the members and its
shareholders have personal liability. This business organization is
a. a business trust.
b. a joint stock company.
c. a joint venture.
d. a syndicate.
Jin, Karlo, and other consumers form Metro Purchasing Cooperative. This form of
business organization makes it possible for these individuals to
a. avoid personal liability for the acts of the cooperative.
b. obtain an exemption from state laws governing corporations.
c. pay no taxes on their business income.
d. pool their resources to gain an advantage in the market.
Milo buys an all-terrain-vehicle (ATV) from No-Limit Toys, Inc., on credit but makes
no payments on the account. Odell, the owner of No-Limit Toys, calls Milo at home on
a Monday morning at three a.m. Odell represents himself as PayNow Collection
Agency and demands payment “or else.” The next day, Odell sends Milo notice that he
has thirty days in which to request verification of the debt and that its payment will be
suspended during that time, but that if he does not pay the full amount due within five
business days, Odell will arrange for the “destruction of Milo’s good credit rating.”
Which laws has Odell violated, if any, and in what ways?
Omar can be described as “a reasonably competent general practitioner of ordinary
skill, experience, and capacity.” This is the normal standard for judging
a. a client’s performance.
b. an attorney’s performance.
c. anyone’s performance.
d. no one’s performance.
Dag is an employee of Eagle Mining Company. Under federal labor law, Dag and other
employees have the right to
a. bargain collectively with Eagle through their representatives.
b. insist that Eagle require union membership as a condition of work.
c. interfere with the efforts of others to form labor organizations.
d. refuse to bargain with Eagle through their representatives.
Savers Mart, Inc., distributes its merchandise to retail outlets on an interstate basis.
Under the commerce clause, Congress has the power to regulate
a. any commercial activity in the United States.
b. only activities that are in intrastate commerce.
c. only activities that are in local commerce.
d. only activities that are not in commerce.
Before undergoing surgery that could cause death, Donnelly, a guitarist, gives his of
guitars to Cathy. The surgery is successful, and Donnelly does not die. The gift of the
guitars is
a. not revoked because it was a gift causa mortis.
b. not revoked because it was a gift inter vivos.
c. revoked because it was a gift causa mortis.
d. not revoked because it was a gift largesse.
Fact Pattern 24-1
Excel Vehicles, Inc., makes and sells automobiles to auto dealers, including Fine Auto
Sales. Fine sells the cars to consumers and businesses.
Refer to Fact Pattern 24-1. Holly, a professional driver, buys an Excel from Fine to
drive in a Grand Prix race. Holly’s Excel is
a. a consumer good.
b. an accession.
c. equipment.
d. inventory.
Fact Pattern 37-3
Dhani, an accountant for Eureka, Inc., learns of undisclosed company plans to market a
new laptop. Dhani buys 1,000 shares of Eureka stock. He reveals the company plans to
Fay, who buys 500 shares. Fay tells Geoff, who tells Hu. Both Geoff and Hu buy 100
shares. They know that Fay got her information from Dhani. When Eureka publicly an-
nounces its new laptop, Dhani, Fay, Geoff, and Hu sell their stock for a profit.
Refer to Fact Pattern 37-3. If Dhani is liable under the Securities Exchange Act of 1934,
it will be because the information on which he based his purchase of Eureka stock was
a. a forward-looking forecast.
b. not material.
c. not yet public.
d. not yet true.
Via e-mail, Vern makes repeated credible threats to Ursula that put her in reasonable
fear for her safety. This is
a. cyber stalking.
b. employment fraud.
c. phishing.
d. vishing.
Ian buys a cell phone in Jiffy Mart, using the means that accounts for more retail
payments than any other. This means of payment is
a. a commercial check.
b. a debit card.
c. a personal check.
d. a trade acceptance.
Mit-E Clean Corporation wants to make an offering of securities to the public. This
offering is not exempt from registration under the Securities Act of 1933. Before the
firm sells its securities, it must provide investors with
a. a forward-looking financial forecast.
b. an investment contract.
c. a prospectus.
d. a road show.
Fact Pattern 34-1
Mountaintop Clearview Corporation authorizes Niles, its employee, to oversee its
timber operation. In the course of his employment, Niles disposes of the operation’s
waste illegally. Orson is a Mountaintop shareholder.
Refer to Fact Pattern 34-1. Liability for Niles’s act most likely rests with Orson to
a. no extent.
b. the proportionate extent of the number of shares Orson owns.
c. the amount of Orson’s investment in the firm.
d. the full extent.
Fact Pattern 30-2
Kit, manager of Long-Term Care Company’s office in Metro City, decides to replace the
office’s male employees with females. Nia, an assistant manager transferred from a
different Long-Term Care office, refuses to cooperate. Kit retaliates against Nia, who
quits. Within a year, the male employees also quit.
Refer to Fact Pattern 30-2. Kit’s conduct is most likely a violation of
a. no law.
b. the Age Discrimination in Employment Act.
c. the Americans with Disabilities Act.
d. Title VII of the Civil Rights Act.
Olga, a salesperson for Pre-owned Cars & Trucks, Inc., tells Quincy, “This is the best
car I”ve ever seen.” This statement is
a. an express warranty.
b. an implied warranty.
c. a warranty of title.
d. puffing.
Gins pays $2,000 for a new HDTV to Imagine Corporation. Imagine holds the set until
Gina picks it up. Imagine is
a. a bailee.
b. a consignee.
c. a lessee.
d. a seller.
Eton and Fiona sign a contract by which Eton agrees to deliver a washing machine on
July 31 in exchange for Fiona’s promise to pay the $500 purchase price on July 31. The
delivery of the washing machine and the payment of $500 are examples of
a. conditions precedent.
b. concurrent conditions.
c. conditions subsequent.
d. speculative conditions.
Bread & Pastries Baking Company operates a commercial baking planta “major
source”that emits hazardous air pollutants for which the Environmental Protection
Agency has set maximum levels of emission. The plant does not use any equipment to
reduce its emissions. Under the Clean Air Act, this is most likely
a. a violation.
b. not a violation because baking is not considered to be polluting.
c. not a violation because the plant does not use any equipment.
d. not a violation because the plant is not a mobile source.
Vacation Village enacts an ordinance to allow only a few street vendors to operate in
certain areas, for the purpose of reducing traffic. A court would likely subject this
ordinance to
a. a police power test under the commerce clause.
b. a “rational basis” test under the equal protection clause.
c. intermediate scrutiny under the due process clause.
d. strict scrutiny under the First Amendment.
Quality Energy Company, a U.S. firm, and Royal Petro, a Dutch firm, enter into a
contract that includes an arbitration clause. This clause must provide that the arbitrator
will be
a. any specified third party.
b. the American Arbitration Association.
c. the Dutch Arbitration Organization.
d. the International Chamber of Commerce.
Vanna and many other consumers complain to the Federal Trade Commission (FTC)
that a Whoopie Wonders Company ad is deceptive. The FTC’s first step is to
a. draft a formal complaint.
b. investigate.
c. issue a cease-and-desist order.
d. require counteradvertising.
Missoula, Montana, passes an ordinance to regulate waste disposal. The disposal of
waste may also be regulated by
a. all other levels of government.
b. no other levels of government.
c. the federal government only .
d. the Montana state government only.
Genuine Seed Company and Hillside Farmers Cooperative enter into a contract for a
sale of hybrid seeds. Under the perfect tender rule, Genuine Seed must ship or tender
seeds to Hillside that
a. approximately conform to all of the details of the contract.
b. entirely conform to the contract except in one or two details.
c. exactly conform to the contract in every detail.
d. substantially conform to the contract in most details.
Diners Corporation, a U.S. firm, signs a contract with Essen, A,G., a German firm, to
give Essen the right to use Diners’ trademark in restaurants in Germany. This is
a. a distribution agreement.
b. a joint venture.
c. direct exporting.
d. licensing.
To raise $12 million to expand operations, Star Corporation makes a stock offering
directly to sixty accredited investors and twenty sophisticated, but unaccredited
investors. Star plans to notify the SEC of sales. Under the Securities Act of 1933, this
issue may qualify as an “exempt” transaction
a. as is.
b. if all of the investors are also given certain material information.
c. if the offering is also made available to the general public.
d. under no circumstances.
Dave has AIDS, Erin is blind, and both work for First Financial Centre. Considered
disabled under the Americans with Disabilities Act
a. are Dave and Erin.
b. is Dave only.
c. is Erin only.
d. is neither Dave nor Erin.
In the ordinary course of business, EZ Funds Corporation offers credit to Fay and other
consumers and reports on the loans to credit agencies. To save time and money, EZ
generally does not correct or update its reported information. This is most likely to
result in
a. a levy of a nominal fine.
b. an assessment of damages.
c. an order of rescission of the loan contracts.
d. no sanctions.
Ilsa and Jiffy Loan Company enter into an oral contract under which Ilsa agrees to pay
Kyle’s debt if he does not. Ilsa does not get any personal benefit from the agreement.
This contract is enforceable by
a. any party.
b. Jiffy only.
c. Jiffy or Kyle.
d. none of the parties.
General Equity Corporation enters into a contract with Honi, who agrees to create
artwork for General’s main office building. Honi delays and eventually refuses to
perform. Meanwhile, General contracts to sell the building to Ideal Investments, Inc.,
but before the transaction is complete, Jewel Funds Company offers to pay a higher
price. General refuses to transfer the building to Ideal. In separate suits by General
against Honi and by Ideal against General, each plaintiff seeks specific performance.
How might the court rule in each case, and why?
State laws often provide more sweeping and significant protections for the consumer
than federal laws.
An employee can continue the health benefits provided by his or her employer for a
period of time only on an involuntary loss of employment.
Clean Machines Company makes washing machines. Over the phone, Clean offers to
sell Dealers Appliance Outlet one hundred model EZ2000 washers at a price of $150
per unit. Clean says that it will keep the offer open for ninety days. Dealers responds
that within two or three weeks it will decide whether to accept. One week later, Clean
faxes, and Dealer receives, notice that the offer is withdrawn. Dealer immediately
phones Clean to accept the $150-per-unit offer. When Clean refuses to deliver at that
price, Dealer files a suit. Clean asserts, first, that there is no contract and, second, that if
there is a contract, it is unenforceable. Discuss Clean’s assertions.
Discharge of a debt is never denied because of the nature of a claim.
Most fast-food chains are distributorships.
A corporation can extend its operations through a consolidation.
Recreation & Sports Equipment Corporation sells a product that is capable of seriously
injuring consumers who misuse it in a foreseeable way. Does the firm owe an ethical
duty to take this product off the market? What conflicts might arise if the firm stops
selling this product?
In most states, if neither party requests a jury, there will be no jury trial.
Cozy City lies on the shore of a bay that empties into the Atlantic Ocean. Downcycler
Waste Company picks up garbage and trash from local businesses. Further inland,
Eschew Corporation collects radioactive waste from the local utility’s nuclear power
plant. On the other side of the bay, Fort Cozy Military Base stores chemical warfare
supplies for disposal. Can Downcycler, Eschew, or Fort Cozy dump their waste in the
ocean?
If, within a certain time after a discharge, it is discovered that a debtor concealed
property to defraud a creditor, the discharge may be revoked.
Bait-and-switch advertising occurs when an ad appears to be based on factual evidence
but in fact is not reasonably supported by evidence.
A product is unmerchantable if an accident could arise in connection with the goods.
A principal owes an agent a duty of ratification.
The role played by women may present some difficult ethical problems for firms doing
business internationally.
An “assignment of all rights” absolves the assignor of all liability under the contract that
created the rights.
Courts do not depart from precedents.
State law other than the UETA always determines the effect of an error on an agreement
between contracting parties.
Working papers are the documents through which a court orders an accountant to audit
a public company.