Denise and Elke do business as Final Curtain Decorators. In most states, for purposes of
holding title to property, this partnership would be treated as
a. an aggregate of the individual partners.
b. a natural person.
c. an entity.
d. a non-existent party.
Tab stores video equipment with U-Store-It, Inc., under a contract that excuses the
warehouser from liability for any damage. A fire due to U-Store-Its negligence destroys
the equipment. The loss is most likely to be imposed on
a. neither Tab nor U-Store-It.
b. Tab and U-Store-It.
c. Tab only.
d. U-Store-It only.
Ira signs Jills name, without her authorization, on the back of a check made out to her.
This is
a. burglary.
b. forgery.
c. larceny.
d. no crime.
Idle Investments, Inc., and Harbor Bank are secured parties with security interests in
property owned by GR8 Manufacturing Corporation. Priority between these security
interests is generally determined by
a. the amount of the claim.
b. the custom in the trade.
c. the time of perfection.
d. the time the security agreement was signed.
Jim files a suit against Kay. Before going to trial, the parties meet, with their attorneys
to represent them, to present their dispute to a third party who is not a judge but who
renders a legally binding decision. This is
a. arbitration.
b. litigation.
c. mediation.
d. negotiation.
Biff signs a note “payable to the order of County Credit Union. Unless Biff has a valid
defense against payment, Biffs liability on this note is
a. lateral.
b. primary.
c. secondary.
d. tertiary.
Hong, Ivan, and Juana apply to work for King Meatpacking Company. These
individuals identities and eligibility to work must be verified by
a. the employer.
b. the individuals.
c. the individuals countries of origin.
d. the U.S. Citizenship and Immigration Services.
Lena offers Miguel a job, representing falsely that it will be long term. In reliance,
Miguel takes the job but is laid off shortly thereafter and successfully sues Lena for
fraud. 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.
Rita believes that Shady Grove Apartments, Inc., her landlord, has violated the law in a
way that entitles her to withhold the rent. This remedy is generally associated with
a. breach of the covenant of quiet enjoyment.
b. breach of the implied warranty of habitability.
c. discrimination.
d. failure to provide security against crimes in common areas.
Bay City Construction, Inc., a contractor, asks Cool Electric, a subcontractor, to provide
certain services. Nothing is expressed about payment. Cool provides the services, but
Bay City refuses to pay. In Cools suit to recover, the chief issue is most likely to be
whether these parties had
a. a formal contract.
b. an actual contract.
c. an implied contract.
d. a voidable contract.
Consumer Goods, Inc., and Delta Distribution, Inc., sign a written contract for a sale of
goods. To be enforceable, this written contract must include
a. a correct title, such as “Purchase Order or “Sales Invoice.
b. a declaration of the subject matter.
c. a quantity term.
d. the parties names.
Don writes a check to Eve drawn on Dons account at First Bank. Eve presents the check
for payment to First Bank, which accepts it. The bank is
a. not liable for payment.
b. primarily liable for payment.
c. secondarily liable for payment.
d. simultaneously liable, with Don, for payment.
Medical Centre enters into a contract with Local Motion Fitness Club for discounted
memberships for the Centres employees. If the Club breaches the contract and the
Centre enters into a contract with KO Sports for the same service at a lower price, the
Centre might be awarded nominal damages to
a. establish, as a matter of principle, that the Club acted wrongfully.
b. provide the Centre with funds for a foreseeable loss beyond the contract.
c. provide the Centre with funds for its loss of the bargain.
d. punish the Club and set an example to deter others from similar acts.
Iowa enacts a statute that requires a label on a video game to warn parents when “the
range of options available to a player include killing and maiming the image of a human
being. Gamemakers file a suit against the state to block the statutes enforcement. Based
on the decision of a California court in a case involving a similar statute, the court in
this case is most likely to rule that the statute
a. extends restrictions on sex-based content to violence in video games.
b. violates the First Amendments guarantee of freedom of speech.
c. imposes market-share liability on makers of violent video games.
d. replaces the voluntary rating system currently in use.
Mineral Products Corporation, which owns no land, has a right to mine the copper from
Natural Resource Companys land. Minerals right is
a. a leasehold estate.
b. a license.
c. an easement.
d. a profit.
Rita is appointed as an agent for Superior Sales, Inc. The agency agreement is silent as
to the level of sales that Rita is expected to achieve. She must
a. achieve nothing because the agreement says nothing on the issue.
b. attain the level that Rita achieved with her previous employer.
c. maintain the level Superior attained before Rita became an agent.
d. use reasonable diligence and skill in selling.
First Community Bank agrees to accept a check by setting aside sufficient funds to
cover the amount. This check is considered
a. cashed.
b. certified.
c. deposited.
d. provisionally credited.
Cray returns a digital music player that he bought from Discount City, which refunds
the price. Their exchange involves
a. an emancipation.
b. a ratification.
c. restitution.
d. severability.
Superior Home Products, Inc., is a corporation. Superiors implied powers enable it to
a. amend the articles of incorporation.
b. bring a derivative suit.
c. declare dividends.
d. perform all acts reasonably appropriate and necessary to accomplish its corporate
purposes.
Beyond-the-Sea Corporation and Homeport Company make a deal for Homeports
products, via e-records. Under the UETA, an e-record is considered sent when it
a. is signed and encrypted, and will be sent without changes.
b. is stored in the senders back-up system.
c. is composed on the senders computer.
d. leaves the senders control.
Big Screen Video Corporation sells high-definition television sets. Under most circum-
stances, Big Screen Video will be presumed to have warranted that its title to the TVs is
a. the same as each brands name.
b. none of the choicesa warranty of title is not presumed.
c. good and valid.
d. the best that money can buy.
Wisconsin, like other states, may regulate private activities to protect or promote the
public order, health, safety, and general welfare under its
a. police powers.
b. taxing powers.
c. spending powers.
d. supreme powers.
Fact Pattern 24-1
Mountaintop Clearview Corporation authorizes Niles, its employee, to oversee its
timber operation. In the course of his employment, Niles disposes of the operations
waste illegally. Orson is a Mountaintop shareholder.
Refer to Fact Pattern 24-1. With respect to Mountaintop and Niles, liability for this
crime most likely rests with
a. neither Mountaintop nor Niles.
b. Mountaintop and Niles.
c. Mountaintop only.
d. Niles only.
Lucille, an accountant, is subject to the accounting conventions, rules, and procedures
that constitute generally accepted accounting principles (GAAP). GAAP are determined
by
a. the International Accounting Standards Board.
b. the American Bar Association.
c. the American Institute of Certified Public Accountants.
d. the Financial Accounting Standards Board.
More than thirty days after Rhett receives his account statement from Silverado Bank,
he notifies the bank that Thalia forged Rhetts name on some of the checks that the bank
has cashed. The majority in Prestridge v. Bank of Jena would most likely hold Silverado
liable for
a. all checks.
b. checks that were cashed less than thirty days after the statement.
c. checks that were cashed more than thirty days after the statement.
d. no checks.
Ginny obtains a health-insurance policy for her family from Hope Insurance Company.
The policy includes an incontestability clause. Under such a clause, after a policy has
been in force for a specified period or time, such as two or three years
a. Ginny cannot contest Hopes insurable interest.
b. Ginny cannot contest Hopes refusal to pay a claim under the policy.
c. Hope cannot contest Ginnys eligibility for continued coverage.
d. Hope cannot contest Ginnys statements in the application.
Lewis is a state court judge. Like other judges, Lewis often refers to secondary sources
of law for guidance. These sources include
a. official comments to statutes.
b. other states statutes.
c. state constitutions.
d. the U.S. Constitution.
Cotton Products Corporation is a public company whose shares are traded in the public
securities markets. The Securities Act of 1933 requires Cotton to disclose financial and
other significant information concerning its securities in order to
a. increase corporate accountability by imposing responsibility on chief corporate
executives.
b. prevent insiders from trading among themselves.
c. protect investors.
d. provide a ‘safe harbor for companies that make forward-looking statements.
Dwayne and Ewell enter into a contract for the design of an addition to Dwaynes house
for which he agrees to pay Ewell. Ewell transfers his right to payment under the
contract to Flex Construction Company. Flex is
a. a delegatee.
b. an assignee.
c. an obligee.
d. a prohibitee.
Doug is an accountant whose clients include Everyday Products, Inc. (EPI). Under the
Ultramares rule, if Doug is negligent in his work for EPI, he could be liable to
a. EPI and any third party.
b. EPI and third parties who are foreseen users of his work for EPI.
c. EPI and third parties who are reasonably foreseeable users of his work for EPI.
d. EPI only.
Norwest Trucking Corporation files a suit in a state court against Bobs Service
Company (BSC), and wins. BSC appeals the courts decision, asserting that the evidence
presented at trial to support Norwests claim was so scanty that no reasonable jury could
have found for the plaintiff. Therefore, argues BSC, the appellate court should reverse
the trial courts decision. Is the appellate court likely to reverse the trial courts findings
with respect to the facts? If not, why not? What are an appellate courts options after
reviewing a case?
An association cannot be a partnership without an express agreement.
In a general partnership, all partners have equal rights in managing the partnership.
To be valid, a contract must be enforceable by all of the parties to it.
A restriction on commercial speech that implements a substantial government interest
may be valid.
When state regulations affect interstate commerce, commerce must always yield to the
regulations.
If the parties to a sales contract state that a certain remedy is exclusive, then it is the
sole remedy.
A party cannot recover damages for severe emotional distress absent a showing of
physical injury.
The bank on which a check is drawn is the payor bank.
Money laundering includes making “dirty money “clean of legitimate businesses.
An accountant who prepares a financial statement in good faith may avoid liability
under Section 18 of the Securities Exchange Act of 1934.
Any corporation with more than $10 million in assets and five hundred or more
shareholders must register their securities with the Securities and Exchange
Commission.
Most contracts are discharged by performance.
Marbled Meats Corporation (MMC) proposes to combine with Natural Farms, Inc., and
asks MMC shareholders to vote on the proposal. Omar, an MMC shareholder, votes
against it, but is outvoted by the other shareholders. Is there an action that Omar can
take to avoid being forced to go along with the transaction? If so, what can he do? After
the combination, Natural Farms ceases to exist. MMC is the surviving firm. What type
of combination is this?
Patty, who is divorced, owns a house. She has no reasonable expectation of benefit from
the life of Quinn, her ex-spouse, but she applies for insurance on his life anyway. She
also obtains a fire insurance policy on the house, which she later sells. Five years later,
Quinn dies and the house is destroyed in a fire. Can Patty obtain payment on either the
death of Quinn or the loss of the house? Explain.
A lessor is a party who acquires a right to the possession and use of goods under a lease.
Courts never depart from precedents.
Compensatory damages are foreseeable damages that arise from a partys breach of a
contract.
Most employees can continue the group health benefits provided by their employers for
a limited period of time after the loss of employment.