Myron and Norah would like to form Originals, Inc., to do business in the art market.
Generally, the articles of incorporation for a corporation do not include
a. the name of the corporations registered agent.
b. the duration and purpose of the corporation.
c. the number of shares the corporation is authorized to issue.
d. the minutes of the first organizational meeting.
In contemplation of death during risky sur-gery, Donnelly, a guitarist, gives his 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.
Clay offers to pay Dot $50 for a golf lesson for Eula. They agree to meet the day after
tomorrow to exchange the cash for the lesson. These parties have
a. a bilateral contract.
b. aquasi contract.
c. a unilateral contract.
d. no contract.
Natural Foods, Inc., orders “Grade A oil from Olive Grove Farms to process and sell to
Pic N Pay Grocers. Olive Grove ships “Grade B oil, which Natural Foods accepts. To
recover damages for the nonconformity, Natural Foods must give notice of the breach
within a reasonable time to
a. Olive Grove only.
b. Olive Grove, Pic N Pay, and the appropriate government agency.
c. Pic N Pay only.
d. the appropriate government agency only.
A person who holds the entire bundle of rights in property is the owner in fee simple.
a. True
b. False
Once a discharge is granted, it may not be revoked, even if, for example, a debtor
concealed property to defraud a creditor.
a. True
b. False
Kims Pony Rides orders ten saddles from Little Horse Saddles, Inc. The sales contract
states that if the saddles are defective, Kims will allow Little Horse Saddles to repair or
replace them instead of rejecting the shipment. When the saddles arrive, they are
defective. In this case, the perfect tender rule
a. does not apply.
b. applies to both parties.
c. applies only to Little Horse Saddles.
d. applies only to Kims Pony Rides.
A forum-selection clause indicates the forum, or location, for the delivery of goods
purchased online.
a. True
b. False
Airline passengers are subjects of a bailment.
a. True
b. False
The primary purpose of the Statute of Frauds is to ensure that all parties to a contract
understand all the terms of the contract.
a. True
b. False
Newt is considering forms of business organization for Newton Design, an
ar-chitectural firm. An advantage of a limited liability partnership is that partners can
avoid personal liability for
a. their own wrongful acts.
b. only other partners malpractice.
c. only partnership obligations that exceed capital contributions.
d. only partnership obligations that fall within capital contributions.
Warranties of title do not arise in most sales contracts.
a. True
b. False
Heavy Hauling, Inc., is a public company whose shares are traded in the public
securities markets. Under the Sarbanes-Oxley Act of 2002, to ensure that Heavy
Haulings financial results are accurate and timely, the firms senior officers must set up
and maintain
a. internal “disclosure controls and procedures.
b. external “release and reveal timetables.
c. personal “peruse and review liability policies.
d. public “information and discussion forums.
A corporate name must include the word Corporation, Incorporated, Company, or
Limited, or abbreviations of these terms.
a. True
b. False
If a third party will be affected by a contract, the parties to the contract are in privity
with the third party.
a. True
b. False
Barry buys a bulldozer from Big Sandbox Equipment Company. Barry is unaware that
there is a lien against the bulldozer when he buys it. Under the UCC, if the creditor
reposes the bulldozer, Barry
a. can recover from Big Sandbox Equipment for breach of warranty.
b. cando nothing.
c. canfile criminal charges against Big Sandbox Equipment.
d. can recover damages from the creditor.
The doctrine of commercial impracticability only extends to problems that are
unforeseen.
a. True
b. False
An accountant is not liable for a misstatement to a purchaser of securities who knew of
the misstatement but invested anyway.
a. True
b. False
An agency can terminate once its purpose is achieved.
a. True
b. False
Craft Engineering, Inc., contracts for a sale of technical instruments to Detail Design
Company. Before the date on which performance is due, Craft notifies Detail that it will
not perform. This is
a. anticipatory repudiation.
b. perfect tender.
c. rejection of performance.
d. revocation of acceptance.
Punitive damages are meant to reward the defendant.
a. True
b. False
Paula develops a new espresso machine that she names “Sure Shot. She also writes an
operating manual for the machine. Paula can obtain trademark protection for
a. the espresso machine.
b. the “newness of the espresso machine.
c. the name “Sure Shot.
d. the operating manual.
The amount in controversy in a diversity of citizenship case must be more than $1
million before a federal court can take jurisdiction.
a. True
b. False
If a sale involves crops that are to be harvested within twelve months, iden-tification
takes place when the seeds for the crops are purchased.
a. True
b. False
Brenda is a purchasing agent for Commodities Exchange Corporation. Dennis, a
Commodities corporate officer, gives Brenda written authority to buy for the firm as
many computers and peripheral devices as necessary. The next day, Dennis calls Brenda
and tells her to buy only fifty note-book computers and nothing else. Brenda shows the
written authority to E-Products, Inc., and enters into a contract with E-Products to buy
sixty note-book computers and a selection of printers, scanners, and extra storage
media. E-Products ships the order to Commodities. Is Commodities li-able to
E-Products under the contract? Is Brenda liable? In each case, if so, why?If not, why
not?
Sweet Candy, Inc., and Tasty Treats stores enter into a contract for a sale of confections.
Sweet, a merchant who deals in goods of the kind sold, makes express warranties in
connection with the sale. Under the UCC, at the time a contract is formed, an express
warranty can be disclaimed or modified
a. byclear, conspicuous language called to the buyers attention.
b. by implied affirmations of fact relating to the goods.
c. in any way that the seller sees fit for the ordinary purpose.
d. in no way.
Rikki signs a check “pay to the order of Scholar University drawn on Rikkis account in
Town Bank to pay her tuition. Rikki is
a. the certifier.
b. the drawee.
c. the drawer.
d. the payee.
The United States Supreme Court has original jurisdiction in some situations.
a. True
b. False
An accountants liability under the Section 10(b) and Rule 10b-5 of the Securities
Exchange Act of 1934 re-quires privity of contract.
a. True
b. False
Shareholders own a corporation.
a. True
b. False
The “first-in-time rule means that an unperfected security interest takes priority over a
perfected security interest.
a. True
b. False