Investors Fund, a large financial institution, announces that it will start monitoring its
employees’ electronic communications. If Mary, an Investors Fund employee, resists
this policy, her best argument is that the monitoring violates
a. employee privacy rights.
b. worker health and safety.
c. federal labor law.
d. the employment-at-will doctrine.
Jacqi tells Kenneth, who does not know how to perform comedy, that she will tutor him
in the subject for $500. As an offer, this is
a. effective.
b. not effective, because comedy is not a serious subject.
c. not effective, because Jacqi’s tutoring will be subjective.
d. not effective, because Kenneth has no knowledge of the subject.
SealCoat Paving enters into a contract with Royal Golf & Tennis Club to provide
surface material for Royal’s tennis courts by April 1 for a tournament to begin May 1.
The contract specifies an amount to be paid if the contract is breached. This is a
liquidated damages clause if the amount is
a. meant to pay for additional liquid sealant in the event of damage.
b. a reasonable estimate of the loss on a breach.
c. designed to penalize the breaching party.
d. intended to quickly provide cash to the nonbreaching party.
Shale Oil Processing Corporation combines its assets and debts with those of Tierra
Frakking Company to form United Resources, Inc. Shale and Tierra cease to exist.
United Resources acquires
a. all of Shale’s and Tierra’s assets.
b. half of Shale’s and Tierra’s assets.
c. none of Shale’s and Tierra’s assets unless there is a formal transfer.
d. only assets that Shale and Tierra acquired after a combination was proposed.
When applying the rule of reason to determine whether an agreement violates Section 1
of the Sherman Act, a court will not consider
a. the purpose of the agreement.
b. the parties’ market ability to implement the agreement.
c. the effect of the agreement on international trade.
d. the potential effect of the agreement on competition.
Dwayne can be described as “a reasonably competent general practitioner of ordinary
skill, experience, and capacity.” This is the normal standard for judging the performance
of
a. a client.
b. an accountant.
c. an attorney.
d. a tax preparer.
Sweets Store buys chocolate from Tasty Candies, Inc. The parties agree that the
chocolate will be shipped “F.O.B. Sweets” via United Railroad Corporation. The
chocolate is lost in transit. The loss is suffered by
a. Sweets and Tasty, but not United.
b. Sweets only.
c. Sweets, Tasty, and United.
d. Tasty only.
Delany & Sons, Inc., owes Evermore Bank $50,000. Delany enters into a contract with
Floyd under which Delany promises to manage and oversee Floyd’s Seaside Marina.
Under the contract, Floyd promises to pay Evermore the amount that will be due
Delany until his debt to Evermore is paid. Delany performs as promised, but Floyd does
not pay the bank. Can Evermore succeed in a suit against Floyd? Why or why not?
Albert buys a surround sound system from his neighbor George at George’s garage sale.
Albert writes George a check for $250 for the sound system. George is
a. the certifier.
b. the drawee.
c. the drawer.
d. the payee.
Zoe invents “All for One,” new business inventory control software, and applies for a
patent. If Zoe is granted a patent, it will protect her product
a. for ten years.
b. for twenty years.
c. for the life of the inventor plus seventy years.
d. forever.
Raoul is a surety for Suzu’s loan from Turnkey Credit, Inc. Raoul’s right to “step into
the shoes” of Turnkey, after paying Suzu’s debt, and exercise any of the Turnkey’s rights
against Suzu is the right of
a. contribution.
b. redemption.
c. reimbursement.
d. subrogation.
Riley, an engineer for Shur-2-Gro Seed Corporation, learns that Shur-2-Gro has
developed a corn hybrid to triple the output of any farm. Riley buys 20,000 shares of
Shur-2-Gro stock. He tells Tess, who buys 15,000 shares. After the new hybrid is
announced publicly, the price of Shur-2-Gro stock increases. Riley and Tess sell their
shares for a profit. Under the Securities Exchange Act of 1934, liability may be
imposed on
a. none of these parties.
b. Riley and Tess only.
c. Riley only.
d. Riley, Shur-2-Gro, and Tess.
James is in an art gallery when Mitch, 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 Mitch 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 Mitch to pay James
the full purchase price.
Phillipa is the sole proprietor of Fun Floral Arrangements. As a sole proprietor, on Fun
Floral Arrangements’ profits, Phillipa
a. does not pay income taxes.
b. pays only personal income taxes.
c. is taxed twice.
d. pays both personal and sole proprietor income taxes.
Quality Sales Corporation enters into contracts over the Internet. Quality can protect
itself against disputes involving these contracts by making important terms
a. reasonably clear.
b. difficult to notice.
c. impossible to find.
d. standardized.
Jim and Kyle are partners in J&K Sales, which exports technical equipment under a
three-year partnership agreement. The U.S. government declares that the equipment can
no longer be exported. J&K
a. dissolves as soon as the stated term expires.
b. dissolves as soon as the partners agree to dissolve it.
c. dissolves immediately unless the partners change its business.
d. does not dissolve.
Sally is the secured party in a transaction with Lilly, who is the debtor. Sally files a
financing statement with the appropriate state official. The financing statement must
contain
a. Lilly’s signature.
b. Sally’s bank account information.
c. Lilly’s credit report.
d. a photograph of the collateral.
Windstar Heli-Pads, Inc., enters into a contract to employ Valerie as an on-site project
manager for two years. Windstar breaches the contract. Valerie has a duty to
a. do nothing.
b. reduce the damages that Valerie might otherwise suffer.
c. breach the contract with Windstar.
d. sue Windstar to deter others from similar acts.
Aron questions whether there is consideration for his contract with Banquet Hall to
exchange his musical performance of country tunes at select social events for Banquet’s
payment of a certain amount. To constitute consideration, the value of whatever is
exchanged must be
a. objectively worthy.
b. precisely adequate.
c. legally sufficient.
d. practically sound.
Fresh Fast Service, Inc., offers to deliver produce to Growers’ Market’s customers for a
certain price. Fresh’s intent to extend a serious offer to Growers’ Market is determined
by reference to
a. Fresh’s assumptions.
b. Fresh’s beliefs.
c. Fresh’s intentions.
d. what a reasonable person in Growers’ position would conclude Fresh’s words and
actions meant.
Corbin, a partner in Doctors Medical Clinic, applies for a loan with Evermore Bank
allegedly on Doctors’ behalf but without the authorization of the other partners.
Evermore knows that Corbin is not authorized to take out the loan. Corbin defaults on
the loan. Liability for its unpaid amount is imposed on
a. Corbin and Doctors, jointly.
b. Corbin only.
c. Doctors only.
d. Evermore only.
Erin is a shareholder in African Adventures. As a shareholder, Erin
a. owns shares of stock in African Adventures.
b. is the founder of African Adventures.
c. has no say in the election of African Adventure’s board of directors.
d. is liable for all the debts of African Adventures.
A failure of the Federal Bureau of Investigation to comply with a request under the
Freedom of Information Act (FOIA) may be challenged in
a. a federal district court.
b. a hearing before the U.S. Freedom of Information Agency.
c. a meeting with Congress’s FOIA subcommittee.
d. a special conference with the president of the United States.
Steel Tool Company makes and sells tools. One of the tools is believed to be hazardous.
The appropriate government agency may require Steel to
a. export the tool and sell it only abroad.
b. increase the price to cover the cost of any injuries or damage.
c. reduce the price to indicate the hazard to consumers.
d. remove the tool from the market.
Corner Market sells groceries. Delite Food & Drug Store sells groceries and fills
prescriptions. The chief responsibility to prevent unsafe food and drugs from being sold
rests with
a. the Consumer Product Safety Commission.
b. no single federal agency.
c. the Federal Trade Commission.
d. the Food and Drug Administration.
Alan, the president of Bayside Investments, Inc., and Colin, Bayside’s accountant, are
charged with a crime, after the police search Bayside’s offices. Under the exclusionary
rule
a. certain Bayside records are excluded from subpoena.
b. certain parties to a criminal action may be excluded from a trial.
c. illegally obtained evidence must be excluded from a trial.
d. persons who have biases that would prevent them from fairly deciding the case may
be excluded from the jury.
Independent regulatory agencies such as the Federal Trade Commission are
a. not part of the government’s executive branch.
b. outside the major departments of the government’s executive branch.
c. subagencies of executive agencies.
d. subject to more executive authority than executive agencies.
Franz asks Gateway Mortgage Credit for a loan to pay for the purchase of a home. With
a poor credit score and a high current debt-to-income ratio, Franz does not qualify for a
standard mortgage. Gateway is most likely to provide
a. a deed in lieu of foreclosure.
b. a home equity loan.
c. a subprime mortgage.
d. a workout agreement.
Business Rental Corporation (BRC) and Cartage Trucking Company enter into a
contract for a lease of ten hydraulic lifts. Under the perfect tender rule, BRC must ship
or tender goods to the lessee 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.
Mae is granted immunity after she agrees to testify about a crime. Mae has an absolute
privilege against self-incrimination and
a. can be prosecuted only for a crime about which she agreed to testify.
b. cannot be prosecuted for any crime.
c. cannot refuse to testify on Fifth Amendment grounds.
d. can refuse to testify on Fifth Amendment grounds.
Paxton agrees to pay QuikChek Lenders a debt that is otherwise dischargeable in
bankruptcy. This is
a. a reaffirmation.
b. a rescission.
c. a reorganization.
d. a revocation.
WiFi Corporation, a U.S. firm, signs a contract with Bueno Computadores, Ltd., an
Argentinean firm, for a shipment and payment for WiFi’s goods. This is
a. a distribution agreement.
b. a joint venture.
c. direct exporting.
d. licensing.
Sharon, the human resources director for Tempo Corporation, attempts to comply with
the law in dealing with applicants and employees. One of the challenges Sharon faces is
that the legality of an action is
a. always clear.
b. never clear.
c. sometimes clear.
d. usually clear.
Global Investments Corporation buys and sells securities. Section 10(b) of the
Securities Exchange Act of 1934 applies to
a. only the purchase or sale of a security involving an insider.
b. only the purchase or sale of a security involving short-swing profits.
c. only the purchase or sale of a security involving a tipper and tippee.
d. the purchase or sale of any security.
In a bilateral contract, communication of acceptance is necessary.
In direct exporting, a U.S. company signs a sales contract with a foreign purchaser that
provides for the conditions of shipment and payment of goods.
A security interest cannot be perfected without the filing of a financing statement.
All powers not specifically delegated to the federal government are reserved to the
states.
Today, most checks are processed manually.
An offeree is a person who makes an offer.
A receipt issued by a warehouser for goods stored in a warehouse is a bill of lading.
Most courts apply the same principles to joint ventures as they apply to corporations.
Confiscation occurs when a government seizes private property for an illegal purpose or
without just compensation.
The last security interest to be perfected is the first in priority over any other perfected
security interests.
When a document of title is required, title passes to a buyer when and where the
document is delivered.
Generally, the agent owes the principal no duties.
Statements made by in judicial proceedings are NOT privileged communications and
may be the basis for defamation.
When both parties to a contract are minors, both of them may disaffirm the contract.
Some unilateral contracts do not require that an offeror be notified of acceptance.
State courts cannot have exclusive jurisdiction.
A limited liability company is operated in compliance with state law.
Appraisal rights normally extend to regular mergers and consolidations.