Cynthia tells Darryl that she will deliver his boxes of Paradise Cookies as he directs. A
declaration that one will do something in the future is part of the definition of
a. a prediction.
b. a premise.
c. a principle.
d. a promise.
Treadwell Tire Manufacturing Company employs Uri as an agent. To terminate Uri’s
authority, Treadwell must notify
a. only third parties who are aware of the agency relationship.
b. the public generally.
c. Uri and any third parties who are aware of the agency relationship.
d. Uri only.
Daria writes a check for $100 drawn on Village Bank and presents it to Fast Cash, Inc.,
for payment. If the check is not backed by sufficient funds, Daria may be prosecuted for
a. forgery.
b. fraud.
c. negligence.
d. nothing.
Mary Kate Corporation allows Ashley Company to use Mary Kate’s trademark as part
of Ashley’s domain name. This is
a. a license.
b. a likelihood of consumer confusion.
c. cybersquatting.
d. trademark dilution.
Faye owns the land on which Golden Spurs Ranch is situated, plus the ranch house,
barn, and other structures permanently attached to the land. Faye’s brother Huey owns
everything else in the ranch’s operationlivestock, feed, and so on. The personal property
is owned by
a. Faye and Huey.
b. Faye only.
c. Golden Spurs Ranch.
d. Huey only.
Ruth is a supervisor for Subs & Suds, a restaurant. Tim is a Subs employee. The owner
announces that some employees will be discharged. Ruth tells Tim that if he has sex
with her, he can keep his job. This is
a. harassment on the basis of sexual orientation.
b. not harassment.
c. quid pro quo harassment.
d. same-gender harassment.
Fealty Credit Corporation asks its employees to evaluate their actions and get on the
ethical business decision-making “bandwagon.” Guidelines for judging individual
actions most likely include all of the following except
a. an individual’s conscience.
b. business rules and procedures.
c. loopholes in the law or company policies.
d. promises to others.
Listen Up! Corporation books and promotes concerts and other entertainment events,
for which Listen Up! also sells tickets. In weighing a challenge to Listen Up!’s
“monopolistic” ticket prices, a court looks at the relevant geographic market. This
encompasses
a. only areas in which Listen Up! does not have monopoly power.
b. only areas in which Listen Up! has monopoly power.
c. the area in which Listen Up! and its competitors sell, and their customers buy, the
tickets.
d. the entire United States in all cases.
Paradise Footwear buys a franchise from Reliant Athletic Shoes Inc. This relationship,
like all other franchise relationships, is governed by
a. contract law.
b. no law.
c. the Franchise Disclosure Document, or FDD.
d. the rules of the National Collegiate Athletic Association.
Fact Pattern 22-1
Cardio, Inc., makes and sells Drawdown, the most prescribed name-brand heart
medication. Emitate Corporation has the potential to make a generic version of the
same drug.
Refer to Fact Pattern 22-1. A court would most likely rule that the agreement between
Cardio and Emitate 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.
Early one morning, Tab agrees to lend his bike to Sheila, who promises to return it in
the evening. Because there is no consideration, there is no contract. This is
a. a constructive bailment.
b. an involuntary bailment.
c. an express bailment.
d. no bailment.
Fresh Harvest Company, which is based on Georgia, packages and sells vegetables.
Jack, who is a resident of North Carolina, buys a Fresh Harvest product, eats it, and
suffers severe food poisoning. Jack wants to file a suit against Fresh Harvest. The
diversity of citizenship between these parties means that
a. federal and state courts have concurrent jurisdiction.
b. federal courts have exclusive jurisdiction.
c. no court has jurisdiction.
d. state courts have exclusive jurisdiction.
Elmo pays First National Bank $1,000 plus a service fee to draw a check on itself made
payable to Go Delivery Service. This is
a. a cashier’s check.
b. an overdraft.
c. a stale check.
d. a stop-payment order.
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.
Hailey, a lawyer on the staff of International Group, always considers the consequences
of an action rather than the nature of the action itself when making ethical decisions in a
business context. Hailey is applying
a. the utilitarian theory of ethics in business contexts.
b. religious beliefs in business contexts.
c. Kantian ethics in business contexts.
d. the principle of rights theory of ethics in business contexts.
The United States and other members of a certain organization agree to grant normal
trade relations status to each other with regard to imports and exports. This organization
is
a. the Convention on Contracts for the International Sale of Goods.
b. the International Export-Import Bank.
c. the United Nations.
d. the World Trade Organization.
Feta is a partner in the game design firm GR8 Games, Inc., which obtains key-person
life insurance on Feta in the amount of $1 million from Halo Insurance Company. Feta
quits GR8 Games to join Icy Applications, Inc. Feta dies. Under the principle of
insurable interest, Halo must pay the $1 million to
a. Feta’s spouse Jo.
b. GR8 Games.
c. Icy Applications.
d. no one.
Green Grocers, Inc., enters into a contract with Hiway Transport Company for the
delivery of a shipment of fresh produce. In a later dispute between these parties over the
delivery, the doctrine of quasi contract cannot be used because
a. both of the parties involved are businesses.
b. at least one of the parties had greater bargaining power.
c. the subject of the contract was a service.
d. there is an actual contract covering the subject in dispute.
Kris wants one of Jasmine’s purebred Persian kittens. Kris signs an instrument in which
she promises to pay Jasmine for a kitten. The instrument will be negotiable if it is
payable in
a. goods of equal market value.
b. money.
c. any of the choices.
d. shares in stock.
New Apps Company develops “Browser Lite” software, which speeds the display of
graphics on Web sites. Browser “Lite” has the most copyright protection under
a. the Berne Convention.
b. the Paris Convention
c. the TRIPS Agreement.
d. the Madrid Protocol.
Drummond wants to make a federal case out of his dispute with Elena. Federal cases
originate in
a. federal courts of appeals.
b. federal district courts.
c. state trial courts.
d. the United States Supreme Court.
Livewire Company and McCoy’s Candy, Inc., sign a document that states Livewire
agrees to design a Web page for McCoy’s, which agrees to pay for the service. This is
a. an express contract.
b. no contract.
c. an implied contract.
d. a quasi contract.
Quik Collection Agency calls Pat several times a day, and sometimes in the middle of
the night, about an overdue bill that Regal Sporting Goods turned over to Quik for
collection. This is a violation of
a. no federal law.
b. the Fair and Accurate Credit Transactions Act.
c. the Fair Debt Collection Practices Act.
d. the Truth-in-Lending Act.
Quinn is an employee of Regional Industries, Inc. Quinn is threatened with a discharge
when he refuses a transfer to a Regional department in which several employees
suffered serious injuries from exposure to hazardous chemicals. Quinn may be entitled
to protection from discharge under
a. no law.
b. the Family and Medical Leave Act.
c. the Occupational Safety and Health Act.
d. the state workers’ compensation act.
Wilson buys a lottery ticket at his local gas station. Wilson has accepted an offer for a
a. bilateral contract.
b. unilateral contract.
c. void contract.
d. unenforceable contract.
Beth, an accountant for Credits & Debits, acquires a negotiable instrument from Ellen
by promising to pay its face value in thirty days. Beth acquires the status of an HDC
when she
a. acquires possession of the negotiable instrument.
b. agrees with Ellen to buy the negotiable instrument.
c. pays the face value due on the instrument.
d. transfers the instrument to another party.
In studying the legal environment of business, Professor Dooley’s students also review
ethics in a business context. Ethics includes the study of what constitutes
a. fair or just behavior.
b. financially rewarding behavior.
c. legal behavior.
d. religious behavior.
Silas Paving Co. contracts to buy some construction machinery from Massive
Earthmovers, Inc. Before either party performs, Massive sells its assets to Phoenix
Equipment Corp. On learning of the sale, Silas is concerned about its contract with
Massive. Silas should
a. demand assurances of performance from Massive.
b. consider the contract repudiated and sue Massive for breach.
c. buy the machinery from a different supplier and bill Massive for the price.
d. buy the machinery from a different supplier and bill Phoenix for the price.
Trek Transport Company uses a mark associated with its name to distinguish its
services from those of other trucking firms. This mark is
a. a certification mark.
b. a collective mark.
c. a service mark.
d. a trade name.
Clear Day Company, which is based in Delaware, agrees to sell fifty windows,
currently stored in Florida, to Far Vu, Inc., which is based in Hawaii. Absent an
agreement to the contrary, the place of delivery is in
a. California.
b. Delaware.
c. Florida.
d. Hawaii.
Dana defaults on a debt to Rachel. Rachel will NOT be able to recover the debt from
a. the sale of Dana’s prize winning pet dog.
b. the sale of Dana’s investments in stocks.
c. Dana’s wages.
d. Dana’s lottery winnings.
Ruby is young and healthy when she gives Pearl a prize-winning horse. The gift meets
all the requirements to be effective. This is a gift
a. inter vivos.
b. causa mortis.
c. by accession.
d. by confusion.
Secure Investments, Inc., a U.S. firm, expands into international markets through a joint
venture. In this situation, Secure owns
a. all of the operation, and its profits and liabilities.
b. all of the operation, and none of its profits and liabilities.
c. none of the operation, and none of its profits and liabilities.
d. part of the operation, and shares its profits and liabilities.
Major credit reporting agencies must provide consumers with free copies of their own
credit reports every twelve months.
Under the UCC, parties to a contract cannot limit or exclude consequential damages.
According to the Foreign Sovereign Immunities Act, a foreign state that waived its
immunity by implication is subject to the jurisdiction of the U.S. courts.
An instrument “payable to bearer” is transferable but not negotiable.
An artisan’s lien is a security device created at statutory law through which a creditor
can recover payment for labor and materials used to increase the value of real property.
In most situations involving sales, rights and liabilities are determined by who has the
title to the goods.
Corporations can be perceived as owing ethical duties to groups other than their
shareholders.
Unless otherwise agreed, inspection of goods can take place at any reasonable place and
time and in any reasonable manner.
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 Bean’s 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?
Bob is shopping in Carl’s Hardware Store when a nail gun in use by Dan, one of Carl’s
employees, fires without warning and hits Bob in the leg. Carl checks the gun and
discovers that it was assembled improperly. Bob files a suit against Eagle Tools, Inc.,
the manufacturer of the gun, for product liability, on the ground of strict liability. What
are the elements for an action based on strict liability? In whose favor is the court likely
to rule and why?
There are no circumstances under which a contract can be tendered by multiple
deliveries of goods.
A license permits the use of another’s intellectual property for certain limited purposes.
In determining the legality of a merger, a crucial consideration is market concentration.
A group boycott is not a per se violation.
A business firm’s profits may suffer if the firm is not a “good corporate citizen.”
Creative Solutions Corporation (CSC) sells business application softwareaccounting
and bookkeeping programs, blank business forms, inventory control functions, and the
likein different combinations, in different packages, at different prices, downloadable
online. To complete a deal, a purchaser clicks on a button that, with reference to certain
terms, states, “I agree.” What is this sort of agreement called? Do the parties have a
binding, enforceable contract that includes the terms? Explain.
Olaf, an executive with Pharma Product Distribution, Inc., has to decide whether to
market a product that might have undesirable side effects for a small percentage of
users. How should Olaf decide whether to sell the product? How does the standard of
ethics that is applied affect this answer?
In certain instances of fraud, a court may “pierce the corporate veil” to hold the
shareholders individually liable.
An adhesion contract is a contract drafted by one party and presented to another on a
take-it-or-leave-it basis.