Mark is creating a Web site through which he will enter into contracts over the Internet.
Important terms to include in his offers include
a. provisions specifying the remedies if the contract is breached.
b. a detailed history of his business.
c. glowing reviews from former customers.
d. his educational background.
Coast-to-Coast Distribution, Inc., is a direct-mail distribution company. Like most
corporations, Coast-to-Coast’s employees include its
a. board of directors.
b. incorporators.
c. officers.
d. shareholders.
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.
Clay offers to pay Dot $50 for a golf lesson for Eula. 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.
Jillian obtains an insurance policy that protects her against liability for personal injuries
and property damage resulting from the operation of her vehicle. This is
a. casualty insurance.
b. liability insurance.
c. malpractice insurance.
d. automobile insurance.
Sarah has a checking account at Secure Bank. Sarah buys her roommate Sophie’s two
tickets to a Broadway musical for $200. Sarah writes Sophie a check for the tickets. In
this situation, Secure Bank is the
a. drawee.
b. indorser.
c. payee.
d. drawer.
A nation is a sovereign entity. This means that
a. a nation must submit to international law.
b. there is no higher authority to which a nation must submit.
c. a nation must adhere to the standards of the United Nations.
d. a nation is subject to the laws of its neighboring nations.
Jacob owns five acres of land. On his land Jacob has a house and a toolshed.
There are ten large maple trees around the house that were there when Jacob bought the
land. Since buying the land, Jacob has planted an apple tree. Jacob’s real property
includes
a. the house and toolshed only.
b. the house only.
c. the house, toolshed and maple trees only.
d. the house, toolshed, maple tress and apple tree.
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.
Organic Cheeses, Inc., Fine & Fresh Foods Company, and Healthy Whole Foods, Inc.
organize together to exchange information and share advertising. This is an example of
a
a. trade association.
b. resale price maintenance agreement.
c. monopoly.
d. territorial restriction.
Tami’s Tasty Tacos, a fast food outfit, files a suit against the state of Utah, claiming that
a Utah state law violates the commerce clause. The court will agree if the statute
imposes a substantial burden on
a. a local government.
b. interstate commerce.
c. noneconomic activity.
d. the state.
Which of the following is NOT a requirement for a holder of a negotiable instrument to
obtain HDC status?
a. The holder must have taken the instrument for value.
b. The holder must have taken the instrument in good faith.
c. The holder must have inherited the instrument.
d. The holder must have taken the instrument without notice that it has been dishonored.
Magic Math Corporation makes business accounting software, which is packaged with
a shrink-wrap agreement. National Distribution Company distributes the software to
retailers, including an Office Stuff store, where Peg buys a package of it. The parties to
the shrink-wrap agreement are
a. Magic Math and National Distribution only.
b. Magic Math and Peg only.
c. Magic Math, National Distribution, Office Stuff, and Peg.
d. Office Stuff and Peg only.
Regal Autos, Inc., sells cars to consumers. To avoid liability for oral express warranties,
each sales agreement should note that a car is sold
a. as is.
b. in perfect condition.
c. subject to warranties included in the written contract only.
d. with no known defects.
The Merit Systems Protection Board issues a rule. Like other administrative agencies’
rules, this rule is as
a. binding as a law passed by Congress.
b. persuasive as an expert’s opinion.
c. suggestive as a newspaper’s editorial.
d. unenforceable as a salesperson’s puffery.
Bernard is an expert on exotic flowers. Fine Floral Fixtures, Inc. (FFF) hires Bernard to
order exotic flowers from various greenhouses. Bernard does not bother to examine the
quality of the flowers he purchases on behalf of FFF. Bernard has breached
a. the duty of performance.
b. the duty of loyalty.
c. no duty.
d. the duty of notification.
Orange Company makes sunglasses. The company’s ad states that “if you aren”t
wearin” an Orange, you aren”t gettin” any ‘see”.” The Federal Trade Commission would
consider this ad
a. false and misleading.
b. false only.
c. misleading only.
d. neither false nor misleading.
Ruth contracts to provide Stan with fifty hours of telepathic personal coaching. The
state legislature subsequently passes a law making telepathic personal coaching illegal.
This law will
a. discharge the contract.
b. fulfill the contract.
c. not affect the contract.
d. require immediate performance of the contract.
Ronald’s debt to Greg is past due. Ronald obtains a judgment against Larry to collect
the debt, but Larry will not pay. Ronald requests a writ of execution. The property that
is seized under the writ of execution must be
a. worth more than Larry’s debt to Ronald.
b. worth less than Larry’s debt to Ronald.
c. intangible.
d. located within the court’s geographical jurisdiction.
Precision Press Corporation, a disk manufacturer, sells its DVDs in certain quantities to
Quik Shows, a retailer, for $275 but charges Rite Views, a competitive retailer, $350.
This is most likely a violation of
a. the Clayton Act.
b. the Federal Trade Commission Act.
c. the Sherman Act.
d. no antitrust law.
Stan incorporates his scientific products business as Tech Supply, Inc. Under most state
corporation statutes, Tech Supply can have
a. only a finite, yet-to-be-determined existence.
b. only a one-year, nonrenewable existence.
c. only a one-year, renewable existence.
d. perpetual existence.
Mutual Company enters into a contract to employ Neil as an investment manager for
two years. During the first year, Neil is often absent without explanation and when
present fails to adequately monitor and manage Mutual’s investments.
Refer to Fact Pattern 16-1. With respect to Mutual’s duties, Neil’s performance most
likely
a. discharges Mutual from the contract.
b. has no effect on Mutual’s performance.
c. increases Mutual’s duties under the contract.
d. suspends Mutual’s duty to perform.
Miranda is a U.S. citizen working in Europe for Tourist Vacations, Inc., a U.S. travel
agency. Tourist fires Miranda for reasons that she believes violate U.S.
antidiscrimination laws. Those laws apply
a. extraterritorially.
b. only to signatories of the North American Free Trade Agreement.
c. only to members of the World Trade Organization.
d. only within U.S. borders.
On May 1 Jill offers to sell Andrea a herd of sheep. On May 3 Jill mails Andrea a letter
revoking the offer. Andrea receives the letter on May 5. Jill’s revocation of the offer to
sell the sheep became effective on
a. May 1.
b. May 3.
c. May 4.
d. May 5.
The Class Action Fairness Act of 2005
a. shifted jurisdiction over certain class-action lawsuits from the state courts to the
federal courts.
b. shifted jurisdiction over certain class-action lawsuits from the federal courts to the
state courts.
c. made forum shopping punishable by large fines.
d. limited the amount of damages that could be awarded in a medical malpractice suit.
Ellen pays State Bank $500 plus a service fee to draw a check on itself payable to Paul’s
Plumbing. Which of the following parties is responsible for paying the check?
a. Only Ellen
b. Both Ellen and State Bank
c. Only State Bank
d. None of the parties
Pam is an administrative employee of Quality Assurance Company. Social Security
contributions to help pay for Pam’s loss of income on retirement are made by
a. neither Pam nor Quality Assurance.
b. Pam and Quality Assurance.
c. Pam only.
d. Quality Assurance only.
Persons who favor the creation of a National Biotech Agency to regulate the production
of genetically altered agricultural products should concentrate their lobbying efforts on
a. Congress.
b. federal administrative agencies that oversee agricultural products.
c. the United States Supreme Court.
d. the president of the United States.
Sandra promises to pay Jay $50 per month if he will let her park her car in his parking
space at work. Sandra’s consideration is
a. the destruction of a legal relationship.
b. the creation of a legal relationship.
c. a forbearance.
d. an exchange of money.
Beans Coffee & Cocoa Company makes and sells a chocolate-flavored coffee drink
under the name “CoCoCafe.” Darkroast Java, Inc., later markets a similar tasting drink
under the name “KoKoKafe.” This is most likely
a. copyright infringement.
b. patent infringement.
c. trademark infringement.
d. a theft of trade secrets.
Nina is a director of Omega, Inc. Under the standard of due care owed by directors of a
corporation, Nina’s decisions must be
a. ambiguous and questionable.
b. arguable and defensible.
c. informed and reasonable.
d. perfect and unassailable.
RayAnn is a corporate officer for Timmy’s Trees, Inc. As a corporate officer, RayAnn is
a. the head of the board of directors.
b. involved in the day-to-day operations of Timmy’s Trees.
c. not involved in the day-to-day operations of Timmy’s Trees.
d. in charge of selecting members of the board of directors.
A restraint of trade is an agreement between firms that has the effect of reducing
competition in the marketplace.
An implied contract is implied from the conduct of the parties.
Confiscation occurs when a government seizes private property for an illegal purpose or
without just compensation.
After two years of research and an investment of a substantial amount of money,
Coast-to-Coast Company (CC) develops a new product that it hopes will produce
substantial profits. CC learns that a competitor, National Sales, Inc., has made and
begun to sell a nearly identical product. CC learns from a reliable source that National
paid a CC employee to obtain the plans for CC’s product when it was in development.
What legal recourse does CC have against National?
A person can insure anything in which he or she has an insurable interest.
A tenant has a right to obtain possession of leased property at the beginning of a lease
term and retain possession until the end of the term.
A market division by class of customer between rival firms violates antitrust law.
A constructive eviction occurs when the tenant wrongfully performs or fails to perform
any of the undertakings the lease requires.
Each partner in a partnership has the right to full and complete information concerning
the conduct of all aspects of partnership business.
A minor may enter into a contract for the sale of alcoholic beverages if the other
contractual party is an adult.
“Major medical” and “marine” insurance are military policies.
A sole proprietorship continues in business despite the death of the owner.
For twenty years, Ozzie works for Players Paradise, a destination for vacationers from
across the United States, maintaining golf carts. After a steady stream of positive job
evaluations and merit pay raises, Ozzie is promoted to the position of supervisor of
golf-cart maintenance at three of Players’s courses. Five years later, a new employee,
Quentin, is hired to oversee operations at all ten of Players’s courses. Quentin demotes
Ozzie, who is now over the age of forty, to running only one of the three cart facilities,
and freezes his salary. Quentin demotes five other employees over the age of forty and
places one of Ozzie’s former facilities under the supervision of Richie, who is
twenty-three. Ozzie overhears Richie say, “We”re going to have to do away with these
old, senile men.” Less than a year later, Quentin reconsolidates the three cart facilities’
operations under Richie’s charge. Ozzie quits and files a suit against Players for
employment discrimination. Should he prevail? Explain.
In a friendly foreclosure, the property is conveyed to the lender in satisfaction of the
mortgage.
Insurance companies are exempt from antitrust laws whenever state regulation exists.