While a minor, Jason buys a large-screen HD TV and home theatre system that he
continues to use after reaching the age of majority. After a reasonable time has passed,
Jason will be considered to have
a. disaffirmed the contract.
b. ratified the contract.
c. rejected the contract.
d. rescinded the contract.
USA Transport Company uses a mark associated with its name to distinguish its
services from those of other transport firms. The mark is
a. a certification mark.
b. a collective mark.
c. a service mark.
d. trade dress.
Opie enters into a contract with Belle. Later, Opie is adjudged mentally incompetent.
Raye, Opies daughter, attempts to void Opies contract with Belle on the ground of
Opies incompetency. The contract is
a. enforceable if Opie had capacity at the time the contract was formed.
b. enforceable if Belle is also incompetent.
c. enforceable if Raye knew of the contract when it was formed.
d. void.
Clay offers to pay Dorianne $50 for a golf lesson for Estee. They agree to meet the day
after tomorrow to exchange the cash for the lesson. These parties have
a. a bilateral contract.
b. a trilateral contract.
c. a unilateral contract.
d. no contract.
Urbana performs a contract with Virgil to add a sun porch to Virgils house, but Virgil
does not pay. In most states, Urbana can create a lien and place it on Virgils property by
filing
a. a written guaranty contract.
b. a writ of attachment.
c. a writ of execution.
d. a written notice of lien.
The process behind the production of “Numb3rs, a suite of business accounting and
inventory software, is protected by
a. copyright law.
b. patent law.
c. trademark law.
d. trade secrets law.
Nero makes an honest but erroneous statement that misrepresents a material fact in a
contractual transaction with Odell. Nero is guilty of
a. a unilateral mistake.
b. duress.
c. fraud.
d. innocent misrepresentation.
Fedro is an employee of Earth & Sea Mining Company. Under federal law, Fedro and
other employees have the right to
a. bargain collectively with Earth & Sea through their representative.
b. insist that Earth & Sea require union membership to work.
c. require Earth & Sea to contribute financially to their union.
d. refuse to bargain with Earth & Sea through their representative.
Doral, Eduard, and Francesca are co-sureties of Glendas debt to Hi-Credit Company.
Doral pays Glendas entire debt. Dorals right to seek proportionate payments from
Eduard and Francesca is the right of
a. contribution.
b. redemption.
c. reimbursement.
d. subrogation.
Desi reaches into Ednas pocket and takes her money, without her consent and without
her immediate awareness. Unlike robbery, picking pockets does not involve
a. breaking and entering.
b. force or fear.
c. large amounts of money.
d. weapons.
Sterling Bank wants to perfect its security interest in timber owned by Ridgeline
Lumber, Inc. Most likely, a financing statement should be filed with
a. the local chamber of commerce.
b. the county clerk.
c. a federal loan officer.
d. the secretary of states office.
Investors Commercial Property Corporation obtains an insurance policy that protects
against any losses incurred as a result of existing claims against or liens on certain
property at the time of its purchase. This is
a. casualty insurance.
b. fire insurance.
c. life insurance.
d. title insurance.
A barge owned by Oceanic Shipping Company accidentally runs aground, spilling the
oil contained in its hold into the sea and onto the shore. Under the Clean Water Act, this
is most likely
a. a violation.
b. not a violation because an oil spill is an accident.
c. not a violation because a floating barge is not a stationary source.
d. not a violation because a ships hold is not a point source.
Dale signs a contract with Everbest Insurance Company that intentionally confers a
benefit on Flo as the designated beneficiary. Flos rights under the contract will vest
a. automatically.
b. if she demonstrates her consent to the promise at Dales request.
c. if Everbest attempts to modify the terms of the contract.
d. never.
Fact Pattern 14-B3
In selling a house, Robin tells Destry that the wiring and plumbing are of a certain
quality. Robin knows nothing about the quality, but it is not as she specifies. Destry
buys the house.
Under these circumstances, Destrys best course of action is most likely to
a. scam Robin.
b. induce Robin to give him the commission on her next sale.
c. recover damages or rescind the contract to buy the house.
d. sabotage Robins career with bad publicity.
Fact Pattern 32-1B
Liz and Molly work as clerks in Nias Dress Shop. Nia withholds federal taxes from
their pay, and controls the methods and details of the performance of their work. Liz
and Molly are not authorized to modify the prices or other terms of a sale at the shop.
Refer to Fact Pattern 32-1B. At the shop, Liz and Molly are
a. independent contractors.
b. Nias employees only.
c. Nias employees and agents.
d. Nias principals.
Pharma Company, Quitox Corporation, and Renal, Inc., are drug makers. Med Sales
Company and National OTC, Inc., are drug distributors. In a suit against all of these
parties in which market-share liability is imposed, most likely to be liable are
a. neither the distributors nor the makers.
b. the distributors and the makers.
c. the distributors only.
d. the makers only.
Yokima, Ltd., and Zenota, S.A., transact an international sale of goods. For these
parties, and other international buyers and sellers, the United Nations Convention on
Contracts for the International Sale of Goods spells out the duties that apply
a. if Article 2 of the Uniform Commercial Code does not apply.
b. if a dispute is submitted to the International Court of Justice.
c. if the parties have not agreed otherwise in their contracts.
d. under all circumstances.
Imperio Caffeine Corporation makes and sells coffee under a variety of brand names.
Imperio wants to merge with Java Company, its main competitor. In weighing a
challenge to the deal, a court looks at the relevant product market. This most likely
includes coffee and
a. no other products.
b. products that are not identical but are related, such as spin-offs.
c. products that are reasonably interchangeable.
d. products with identical attributes only.
Fact Pattern 12-A2
Cut-Rate Construction Company (CCC) begins building a restaurant for Diners
Restaurants, Inc., but after two months demands an extra $100,000. Diners agrees to
pay.
If CCC offers, as a reason for the extra $100,000, that ordinary business expenses have
increased, the agreement is
a. enforceable as an accord and satisfaction.
b. enforceable because of unforeseen difficulties.
c. unenforceable as an illusory promise.
d. unenforceable due to the preexisting duty rule.
Lexy obtains a check payable to her order from Maven. To negotiate this order
instrument to Nicole requires
a. Lexys indorsement and delivery.
b. Mavens indorsement and delivery.
c. Nicoles indorsement and delivery.
d. delivery without anyones indorsement.
Field Gardens and Gourmet Restaurant, Inc., enter into a contract for a sale of lettuce.
When Field learns that Gourmet is insolvent, Field can stop delivery of the goods in
transit
a. only if the quantity is at least a carload.
b. only if the quantity is at least a planeload.
c. only if the quantity is at least a truckload.
d. regardless of the quantity.
Fact Pattern 37-1B
Brad, Carlos, and Dora are general partners in Eastside Physicians, a medical clinic.
Their agreement states it is a breach of the agreement for any partner to assign his or
her interest to a creditor without the consent of the other partners.
Refer to Fact Pattern 37-1B. The partners decide to dissolve Eastside. Dora collects and
distributes the firms assets. This results in
a. nothing with respect to the firms existence.
b. the continuation of the firms business.
c. the termination of the firms legal existence.
d. the temporary suspension of the firms business.
Mike, an advocate of a certain religion, publishes an article in New Times magazine
insisting that Congress base all federal law on his religions principles. The First
Amendment guarantees Mikes freedom of
a. religion only.
b. speech only.
c. the press only.
d. the press, speech, and religion.
Richard is an employee of Stealth Security Company. Stealth discharges Richard for
refusing to infiltrate a competitors organization to learn its trade secrets. With respect to
the employment-at-will doctrine, this is
a. an example of the doctrine.
b. an exception based on contract theory.
c. an exception based on public policy.
d. an exception based on tort theory.
Horizon Corporation makes cell phones. Ginvera files a product liability suit against
Horizon, alleging a design defect. Under the Restatement (Third) of Torts: Products
Liability, in deciding whether to hold Horizon liable, the court may consider the
“reasonableness of
a. the manufacturers intentions.
b. the sellers method of accounting.
c. the manufacturers quality control efforts.
d. an available alternative design.
Leo slips and falls in Mornin Breakfast Café and is injured. Leo files a suit against
Mornin for $50,000. If Leo is 20 percent at fault and Mornin is 80 percent, under a
contributory negligence doctrine, Leo would recover
a. $0.
b. $25,000.
c. $40,000.
d. $50,000.
Bild-Rite, Inc., is a Colorado-based firm that does business with clients throughout
North America. Bild-Rite oversees construction projects, and buys and sells commercial
buildings, undeveloped land, and construction supplies and other goods. Bild-Rite has
had to deal with work-site theft and vandalism. With respect to these circumstances, the
Uniform Commercial Code (UCC) provides a framework for
a. commercial transactions for the sale of and payment for goods.
b. international construction contracts.
c. domestic and foreign transactions in real estate.
d. prosecuting crimes against business interests.
Tiffany transfers a draft by signing it and delivering it to Uma. Tiffany is
a. an indorser.
b. a draft dodger.
c. a drafter.
d. a promisor.
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.
To acquire the ownership of a vacant lot by adverse possession, Durwood must occupy
the lot exclusively, continuously, and peaceably for a specified period of time
a. in an, open, hostile, and adverse manner.
b. until the owner files a suit.
c. without the owners knowledge.
d. with the states permission.
Quotient Corporation and Precision Products, Inc., are the principal suppliers of their
product in their market. They agree that Quotient will sell exclusively to retailers and
Precision will sell exclusively to wholesalers. Under antitrust law, this is most likely
a. a per se violation.
b. a violation only if their competitors make similar deals.
c. a violation only if their customers agree to honor the deal.
d. not a violation.
A surety can assert his or her own bankruptcy as a defense to avoid liability on a
principal debtors obligation.
Cody signs and returns a letter from Deb, referring to Debs Double-D Ranch and its
price. When Cody attempts to complete the deal, Deb refuses, claiming that they have
no contract. Cody claims they do. What standard determines whether these parties have
a contract?
A gift of real estate other than by will is called a devise.
Frequently, disputes over violations of administrative rules are resolved through
informal adjudication proceedings.
A limited liability companys members must be its managers.
Under the UCC, an agreement modifying a contract needs no consideration to be
binding.
Jai owns an orchard behind Keys house and property. The only access to the orchard is
Keys driveway, which Jai uses to get to her orchard. Jai sells the orchard to Laurentz.
Can Laurentz use the right-of-way across Keys property?
In an exclusive-dealing contract, a seller conditions the sale of a product on the buyers
agreement to buy another product produced by the same seller.
Only a plaintiff may file a motion for summary judgment.
Corporate officers cannot be subject to penalties for violations of the Clean Air Act.
An auction”we ask you to bid on this itemis an offer.
An instrument payable to two persons jointly requires the indorsement of only one of
the payees for negotiation.
A recording statute allows deeds to be recorded in the public record.
A contract lacking a quantity term, when appropriate, may not be enforceable.
Only a customer or a person authorized to draw on an account can order a bank not to
pay a check when it is presented for payment.
If a court deems any clause in a contract to have been unconscionable at the time it was
made, the court can limit its application.
An extension clause allows the date of maturity of an instrument to be extended into the
future.
An attorney may be helpful when a business negotiates a franchise agreement.