Suki files a reorganization plan as part of a bankruptcy proceeding under Chapter 13.
The court can approve the plan by applying specific rules to the value of the property to
be distributed if there is an objection to the plan by
a. an insider.
b. an unsecured creditor.
c. a preferred creditor.
d. any innocent third party.
Fact Pattern 22-2
Jake is the maker of a $2,000 promissory note payable to Kim. Kim indorses the note to
Lou who, in turn, indorses it to Mona, who then indorses it to Nat, the present holder.
Refer to Fact Pattern 22-2. Nat properly presents the note to Jake for payment, but Jake
dishonors it. With timely notice to the proper parties, Nat may collect payment on the
note from
a. Kim, Lou, or Mona.
b. Kim or Lou only.
c. Mona only.
d. no one.
A suit is filed against Maxi Corporation, alleging that the firm committed the offense of
monopolization. To determine whether Maxi has monopoly power requires looking at
a. only Maxi’s size.
b. only the relevant geographical market.
c. only the relevant product market.
d. the relevant geographical market and the relevant product market.
Idaho Farms mistakenly puts its potatoes in Jackson Co-op’s storage bin, which already
contains Kelly Spud Farm’s potatoes. It is impossible to tell which potatoes originally
belonged to which party. This is
a. a bailment.
b. accession.
c. confusion.
d. production.
CPA Accounting, LLC, is a limited liability company. If the law in CPA’s state is like
the law in most states, unless the members have agreed otherwise, participants in the
firm’s management will be considered to include
a. all members.
b. no member.
c. one member.
d. two members, including at least one general partner.
Retail Music, Inc., offers to buy from Super Products Corporation (SPC) 1,000 blank
CDs of a certain brand. Without notifying Retail, SPC timely ships CDs of a different
brand. This shipment is
a. an acceptance of the offer and a breach of the parties’ contract.
b. an acceptance of the offer and a fulfillment of the parties’ contract.
c. a refusal of the offer and a breach of the parties’ contract.
d. a refusal of the offer and a fulfillment of the parties’ contract.
On Tad’s eighteenth birthday, he decides that he no longer wants to keep a car he bought
from U-Pick Autos, Inc., when he was seventeen. His right to disaffirm the deal will
depend on
a. the car’s condition when Tad bought it.
b. the car’s current condition.
c. whether Tad acts within a reasonable period of time.
d. whether U-Pick has the right to disaffirm.
Avatar, Inc., and Bling Corporation sign a contract in which Avatar agrees to deliver
t-shirts emblazoned with video game characters in exchange for Bling’s promise to pay.
Avatar delivers. The contract is
a. voidable.
b. executed.
c. executive.
d. executory.
Forest & Field Company makes and leases a backhoe to Zach. Due to a defect
attributable to Forest & Field’s negligence, Zach is injured in an accident in which his
neighbor Aron is also hurt. In a product liability suit based on negligence, Forest &
Field may be liable to
a. Aron only.
b. no one.
c. Zach and Aron.
d. Zach only.
Consumer Finance Corporation (CFC) extends credit to consumers. CFC is subject to
the Equal Credit Opportunity Act, which prohibits credit discrimination based on
a. disability.
b. education.
c. income.
d. race.
Waste Management Services, LLC, is a member-managed limited liability company. If
the law in Waste’s state is like the law in most states, unless the members have agreed
otherwise, voting rights are apportioned according to
a. capital contributions.
b. participation in management.
c. seniority.
d. transactions with the firm.
Dave and Eiger are partners in First-Place Athletic Supplies, which sells sports
equipment. Dave manages the business. Unless the partnership agreement states
otherwise, Dave is
a. entitled to compensation in proportion to its effect on the business.
b. entitled to compensation in proportion to the effort expended.
c. entitled to compensation in proportion to the effort required.
d. not entitled to compensation for his effort.
Luke is a director of Motor Parts Corporation. Luke makes decisions with respect to
Motor Parts in good faith, in what he believes is the firm’s best interest, and without
violating any duties owed to it. If, despite these circumstances, Luke exercises poor
business judgment, under the business judgment rule Luke is
a. immune from liability.
b. liable only to the extent that he gains as a result.
c. liable only to the extent that Motor Parts suffers as a result.
d. wholly liable.
US Products Company and Vital Manufacturing, Inc., enter into a contract for the sale
of a certain quantity of machine parts. The UCC reads into this contract is the concept
of
a. good faith.
b. square dealing.
c. the mirror image rule.
d. unconscionability.
Debtors who are not eligible for relief under Chapter 11 include
a. Kasey, a sole proprietor who operates Luscious Donut Shop.
b. MiniParks Associates, a partnership that operates a chain of miniature golf courses.
c. Neighborly Plumbers, Inc., a corporation that does not own real estate and has less
than $2 million in liabilities.
d. Orin, an individual self-employed as a commodities broker who deals primarily in
energy resources.
Dobry Die & Mold, Inc., enters into a contract with Chet’s Refitting Service to fix
Dobry’s precisely engineered molding equipment. If Chet’s delays the repair for five
days, knowing that Dobry will lose a certain percentage of profit for the delay, Dobry
might be awarded consequential damages to
a. establish, as a matter of principle, that Chet’s acted wrongfully.
b. provide Dobry with funds for a foreseeable loss beyond the contract.
c. provide Dobry with funds for its loss of the bargain.
d. punish Chet’s and set an example to deter others from similar acts.
Mix-It Concrete Company has the right to enter Nim’s land and remove the rock from
Nim’s quarry. This is
a. a fee simple absolute.
b. a license.
c. an easement.
d. a profit.
Buyers Club is an incorporated cooperative. Like other incorporated cooperatives,
Buyers Club distributes profits to its owners on the basis of
a. the amount of capital they contribute.
b. the degree to which they participate in management.
c. their transactions with the cooperative.
d. the requirements of the state in which it was incorporated.
Fact Pattern 30-4
Beth, who has a disability, is an employee of Corporate Office Company (COC). After
the installation of new doors on COC’s building, Beth finds it nearly impossible to get
in and out. For repeatedly failing to be on time, COC replaces Beth with Dian, who
does not have a disability.
Refer to Fact Pattern 30-4. To successfully defend against Beth’s claim, COC will have
to show that
a. Beth consistently failed to meet the essential requirements of her job.
b. COC cannot make changes to the doors without undue hardship.
c. Dian is qualified for Beth’s position.
d. the doors were not installed as an act of intentional discrimination.
Lina, an employee of Manual Labor Industries (MLI), is injured in a work-related
accident. Based on the diagnosis of Newt, a doctor, Lina accepts $50,000 from MLI and
waives the right to future claims. Newt’s diagnosis later proves to have been wrong.
Newt’s misdiagnosis is, in terms of its impact on Lina’s agreement with MLI,
a. a mutual mistake of fact.
b. a unilateral mistake of fact.
c. fraud.
d. puffery.
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.
National Capital Corporation and International Investments, Inc., form a joint stock
company. The ownership of a joint stock company is represented by
a. partnership certificates.
b. shares of stock.
c. title documents.
d. trust certificates.
Ray, Sully, and Toma form a syndicate to buy a professional football team. This
syndicate could be set up as
a. a corporation only.
b. a corporation or a partnership.
c. a partnership only.
d. neither a corporation nor a partnership.
Superior Company draws a check payable to Ted. Uri makes a note payable to Vital
Finance Corporation. Primarily liable parties include
a. neither Superior nor Uri.
b. Superior and Uri.
c. Superior only.
d. Uri only.
Edna and Flavia buy a boat that they dock in a marina near Gulfport, Mississippi. On
the death of either owner, that owner’s interest in the boat passes to her heirs. This is
a. a joint tenancy.
b. a tenancy by the entirety.
c. a tenancy in common.
d. ownership in fee simple absolute.
Frooty Drinx, Inc., and Gert have a processing-plant franchise arrangement. This
involves the transfer of
a. a license.
b. a trade name.
c. the formula to make a certain product.
d. the ownership of the business.
Melanie engages in speech that harms others’ good reputations on her blog at
no.lie.com. The First Amendment gives such speech
a. less protection than obscene speech.
b. more protection than symbolic speech.
c. no protection.
d. the same protection as any noncommercial speech.
Fact Pattern 25-3
Chocolate! Chocolate! Corporation is a new company that needs to borrow money to
meet its payroll. Dayna, president and owner of Chocolate! Chocolate!, asks Evermore
Credit Union to loan the funds to Chocolate! Chocolate!
Refer to Fact Pattern 25-3. If Evermore insists that Dayna sign the loan application,
making her personally liable for payment whether or not Chocolate! Chocolate!
defaults, Dayna will be
a. a surety.
b. a lienor.
c. a garnishee.
d. a guarantor.
Serene City enacts an ordinance that bans the use of ‘sound amplifying systems” on
public streets. Tyler wants to campaign for a seat on the city council by broadcasting his
message through speakers mounted on a truck. In Tyler’s suit against the city, a court
would likely hold the ordinance to be
a. an unconstitutional restriction of speech.
b. constitutional under the First Amendment.
c. justified by the need to protect individual rights.
d. necessary to protect national interests.
Fact Pattern 20-1
Internet Cafes, Inc., contracts to buy all of its requirements for coffee, at a minimum of
1 million pounds per year, from Java Corporation for six years. After three years,
Internet tells Java that it plans to sell its company to Kwik Eateries, Inc. Kwik refuses
to assure Java that it will continue Internet’s contract.
Refer to Fact Pattern 20-1. Java can
a. assign its rights under the contract but cannot terminate it.
b. do nothing.
c. suspend performance under the contract until Java is fully paid.
d. terminate the contract and seek damages.
Cory employs Daily Delivery Agency as an agent under a written agreement that
describes the rights and duties of both parties. This is
a. apparent authority.
b. equal authority.
c. express authority.
d. implied authority.
Svetlana, a fifty-five-year-old member of a racial minority with a disability, believes
that she is a victim of employment discrimination. Potentially the most widespread
form of discrimination is based on
a. age.
b. disability.
c. gender.
d. race.
The federal government and the state governments constitute the U.S. legal system.
This system is based on the legal system of
a. Ancient Greece.
b. England.
c. France.
d. the natural law school.
A corporation whose security does not qualify for an exemption can avoid the cost and
complexity associated with registration.
A law that distinguishes between or among individuals violates the equal protection
clause.
There is a precise definition of what makes an administrative rule arbitrary and
capricious.
In most states, the seller of a new house warrants that it is fit for habitation.
The terms of a shrink-wrap agreement may be enforced in the same way as the terms of
other contracts.
For purposes of diversity of citizenship, a corporation is a citizen only of the state in
which it is incorporated.
If a contract condition is not satisfied, the obligations of the contracting parties are
discharged.
A drawer is liable to the holder of a check if the check is not honored.
Administrative agencies are established to perform specific functions.
Under the Securities Exchange Act of 1934, an accountant may be liable for a
misleading statement that affects the price of a security even if the accountant acted in
good faith.
In many states, the plaintiff’s negligence is a defense that may be raised in a product
liability suit based on strict liability.
To be enforceable, a contract for a sale of goods ay any price must be in writing.
When a corporation is dissolved voluntarily, the corporation must file articles of
dissolution with the state.
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?
Performance of an accord discharges an original contractual obligation.
All adsboth online and offlinemust be truthful.