Machine Corporation requires its employees to have a high school diploma, claiming a
definite connection between a high school education and job performance. In a suit
against Machine Corporation under Title VII, this requirement is shown to have a
discriminatory effect. The employer has
a. no defense.
b. a bona fide occupational qualification defense.
c. a business necessity defense.
d. a seniority systems defense.
Hi-Five Aero Corporation is required to register its securities under Section 12 of the
Securities Exchange Act of 1934. Section 14(a) of the act regulates
a. the declaration of dividends by Hi-Five’s board of directors.
b. the later re-registration of Hi-Five’s securities.
c. the short-swing activities of Hi-Five’s insiders.
d. the solicitation of proxies from Hi-Five’s shareholders.
Jason contracts with Golf Carts Unlimited, Inc. to buy five golf carts. The contract lists
the five carts as GC001, GC002, GC003, GC004, GC005. Identification
a. requires that Jason verify his identity to take possession of the carts.
b. has taken place.
c. cannot take place until the contract is reviewed by a court.
d. will take place only when Jason pays for the golf carts.
Fact Pattern 14-2
Tom draws a check, on his account in State Bank in New York, payable to Digital
Media, Inc., in San Francisco. Digital deposits the check in its account at First National
Bank.
Refer to Fact Pattern 14-2. Digital’s bank is
a. the cashing bank.
b. the depositary bank.
c. the intermediary bank.
d. the payor bank.
Garth owns two all-terrain vehicles (ATVs), worth $1,000 and $500, respectively. Helen
agrees to buy “Garth’s ATV” for $750. Garth believes, in good faith, that he is selling
the $500 ATV. Helen believes, in good faith, that she is buying the $1,000 ATV. In this
situation
a. Garth is entitled to $750 for the $500 ATV.
b. Helen is entitled to the $1,000 ATV for $750.
c. Helen must buy both ATVs for $1,500.
d. there is no contract.
Liu enters Mountain Triathlon, an athletic competition in which Liu has never
competed. Regarding the risk of injury, Liu assumes the risks
a. attributable to the triathlon in any way.
b. different from the risks normally associated with the triathlon.
c. greater than the risks normally associated with the triathlon.
d. normally associated with the triathlon.
North Mining Company and South Excavation Company agree to abide by the
decisions of East Coast Financial Corporation as to their respective levels of
production, markets, and prices, effectively reducing competition and increasing profits.
This is most likely
a. a common, legal, time-honored type of business arrangement.
b. an illegal restraint on trade.
c. an innovative, legally efficient approach to doing business.
d. an outdated, but legal business trust.
Fact Pattern 16-1
Northeast Bank makes mortgage loans to consumers, including Mai, to buy homes.
Refer to Fact Pattern 16-1. Under federal law, disclosures with respect to one of
Northeast’s loans must be provided
a. a certain number of days after the loan is finalized.
b. a certain number of days before the loan is finalized.
c. at the same time at which the loan is finalized.
d. at whatever time is most rational and appropriate.
Ian buys a cell phone in Jiffy Mart, using the means that accounts for more retail
payments than any other. This means of payment is
a. a commercial check.
b. a debit card.
c. a personal check.
d. a cash.
Fact Pattern 16-2
24-Hour Credit Corporation issues high-cost and high-fee mortgage products to people,
including Benny, who could not easily obtain credit under other loan programs.
Refer to Fact Pattern 16-2. Under federal law, disclosures with respect to one of
24-Hour Credit’s loans must be provided
a. a certain number of days after the loan is finalized.
b. a certain number of days before the loan is finalized.
c. at the same time at which the loan is finalized.
d. at whatever time is most rational and appropriate.
Levi, a well-known lumber dealer with a good reputation, buys a load of lumber and
pays for it with a check that is later dishonored. Sam, who is unaware of the bad check,
buys the lumber from Levi. Sam is a(n)
a. good faith purchaser.
b. bad faith purchaser.
c. insolvent purchaser.
d. bailee.
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.
Leigh wants to go into the business of construction contracting. Among the reasons that
would probably convince Leigh to set up his business as a sole proprietorship would be
a. its greater organizational flexibility.
b. its limited liability.
c. its perpetual existence.
d. the ease of transferring the business to other family members.
Yellowbox, a DVD rental company, would like to change its corporate status to that of
an S corporation to avoid income taxes at the corporate level. To qualify, Yellowbox
must
a. be located in the United States.
b. have more than one hundred shareholders.
c. be a non-profit corporation.
d. have more than one class of stock.
Dani is considering forms of business organization for her financial advisory firm. Like
most states, Dani’s state requires that to form a limited liability company, she must file
with a central state agency
a. articles of certification.
b. articles of formation.
c. articles of organization.
d. no specific documents.
Jean buys a bike from Mike’s Bike Shop. She wants to make sure that there is a
warranty of title. Jean
a. does not need to do anything because warranties of title arise automatically in most
sales contracts.
b. must request a written warranty of title.
c. must request an oral warranty of title.
d. must request both a written and an oral warranty of title.
Scott presents an instrument that states “pay to the order of Scott” to Town Bank for
payment. This instrument is the most common type of negotiable instrument, which is
a. a commercial wire transfer.
b. a check.
c. a note.
d. a substitute check.
Shingle & Tile Roofing Contractor, LLC, obtains an insurance policy against liability
for injuries or losses sustained by employees during the course of their employment.
The policy covers claims not covered by workers’ compensation insurance. This is
a. casualty insurance.
b. fidelity or guaranty insurance.
c. key-person life insurance.
d. employer’s liability insurance.
Bob, a salesperson at a Carpets Galore store, tells Dita, a customer, “Buy your carpet
here, and I”ll install it for half of what the store would charge.” Dita buys the carpet,
which Bob installs for half the store’s price. Bob keeps the money. Bob has breached
a. no duty.
b. the duty of loyalty.
c. the duty of notification.
d. the duty of obedience.
Gulf Air, Inc., is the major wholesale distributor of software in the state of Florida. Its
closest competitor is Fluid Systems Company, another Florida firm. The two firms
agree that Gulf Air will operate in south Florida and Fluid Systems will operate in north
Florida. This is
a. a group boycott.
b. a market division.
c. a joint venture.
d. an exclusive-dealing contract.
Cody is a partner in Delta Accounting Service. Cody can inspect
a. all of Delta’s books and records.
b. Delta’s books and records only as the firm’s management permits.
c. Delta’s books and records only for a reasonable purpose.
d. Delta’s books and records relating to Cody’s capital contribution only.
The operations of Metal Refining Industries, Inc., are major sources of air pollution.
These operations must use
a. the absolutely cleanest air technology.
b. the best available filter technology.
c. the maximum achievable control technology.
d. the most affordable scrubbing technology.
Tory borrows $10,000 from USA National Bank to remodel a room in her home. This
transaction is subject to
a. no federal law.
b. the Consumer Leasing Act.
c. the Consumer Product Safety Act.
d. the Truth-in-Lending Act.
A Rhode Island state statute requires machinery in industrial plants to include automatic
shut-off switches accessible to each employee working on the machine. Steel
Company’s equipment does not have the switches. Trudy, a Steel employee, suffers an
injury that an accessible shut-off switch would have prevented. Trudy’s best theory for
recovery is
a. assault.
b. assumption of risk.
c. invasion of privacy.
d. negligence.
Franzea is injured in an accident caused by Gentry. Gentry agrees to pay Franzea
$2,500 if she agrees to release him from further liability. She agrees. If Franzea’s
damages ultimately exceed $2,500, she can collect
a. the balance from Gentry in a breach-of-contract suit.
b. the balance from Gentry in a tort suit.
c. the balance from Gentry on the ground of unforeseen difficulties.
d. nothing more from Gentry.
Biff signs a note “payable to the order of County Credit Union.” Unless Biff has a valid
defense against payment, Biff’s liability on this note is
a. nothing.
b. primary.
c. secondary.
d. conditional.
Without a permit from the U.S. Army Corps of Engineers, Holiday Timeshares, Inc.,
fills a wetlands area that it owns before constructing a residential resort. Under the
Clean Water Act, this is most likely
a. a violation.
b. not a violation because a permit is not needed to fill wetlands.
c. not a violation because the area was filled before construction.
d. not a violation because there was no discharge of pollution.
Jane enters into a contract with Jill to provide 100 roses for a dinner party. Jane fails to
deliver the roses. Jill initiates a suit against Jane, asking the court to order Jane to
deliver the roses. Jill is
a. the plaintiff.
b. the defendant.
c. the binding authority.
d. the persuasive authority.
Jared is arrested and found guilty of a misdemeanor. His punishment will not include
a. imprisonment for six months.
b. a fine of $100.
c. death.
d. imprisonment for six months and a fine of $500.
Property Management Corporation (PMC) owns several apartment buildings in two
states. Regarding standards for maintenance of the buildings, PMC should consult
a. the applicable city ordinances and state statutes.
b. the previous owners.
c. the long-term tenants.
d. the Uniform Landlords’ Maintenance Manual.
Goldtone Corporation makes cell phones. Haji files a product liability suit against
Goldtone, alleging a design defect. In deciding whether to hold Goldtone liable, the
court may consider an alternative design’s
a. popularity among industrial designers.
b. attractiveness to consumers.
c. aesthetics.
d. effect on the product.
Uma wants to initiate a suit against Valley Vacation Tours by filing a complaint. The
complaint should include
a. an explanation to refute any defense the defendant might assert.
b. a motion for summary judgment.
c. a motion to dismiss.
d. a statement of the facts necessary to show Uma is entitled to relief.
Checkerboard Pizza, Inc. (CPI), files for bankruptcy under Chapter 11. CPI’s Chapter
11 plan must contain
a. a plan to turn over its future income to the trustee.
b. a certificate proving attendance at a credit-counseling briefing.
c. a provision of adequate means for the plan’s execution.
d a statement of preference for one creditor over another.
Sonny agrees to buy a unique collection of Olympics memorabilia for $7,000 from Jana
and sends $1,500 as a down payment. When Sonny sends Jana the rest of the price, she
refuses to ship the collection. Sonny should seek
a. a penalty.
b. liquidated damages.
c. restitution.
d. specific performance.
Ridgeline Bank provides Stanley with a mortgage to buy a home. The rate of interest is
fixed for three years and then adjusts annually. This is
a. a fixed-rate mortgage.
b. an adjustable-rate mortgage.
c. an interest-only mortgage.
d. a violation of the law.
A trademark does not need to be registered to support a trademark infringement action.
Stored-value cards are a form of digital cash.
Liens usually do not take priority over other claims against the same property.
A fictitious payee is a payee on a negotiable instrument whom the maker or drawer does
not intend to have an interest in the instrument.
Section 10(b) of the Securities Exchange Act of 1934 covers only corporate officers and
directors.
Restrictions on imports may include prohibitions.
In a joint venture, the parent company in the United States retains complete ownership
and authority over all phases of the operation.
The Uniform Commercial Code governs checks.
In a general partnership, the acts of one partner in the ordinary course of business can
subject the other partners and the firm to liability.
A member of a limited liability company (LLC) has the power and the right to
dissociate from the LLC at any time.
A bank may contractually shift to the customer the risk of forged checks created by the
use of facsimile or other nonmanual signatures.
Setting realistic workplace goals can increase the probability that employees will act
unethically.
An instrument payable “with ten hours of services” is negotiable.
A limited liability company is not a citizen of any state.
Statutes are laws enacted by Congress and the state legislatures and comprise one of the
sources of American law.
In cyberspace, no two businesses can use the same domain name.
To determine whether a duty of care has been breached, a judge asks how a reasonable
person would have acted in the same circumstances.
Pam borrows $5,000 from Quality Auto Sales to buy a car. When Pam does not pay the
loan or return the car, Quality wants to transfers the right to the payment to Rapid
Collection Agency. Rapid agrees to pay Quality for this right, but for a price that is less
than the amount owed. Can Quality transfer this right to Rapid without Pam’s consent?
If so, and Quality committed fraud in the deal with Pam, could Pam legitimately refuse
to pay Rapid? Explain.
Before any interest in specific goods can pass from the seller to the buyer, the goods
must exist and be identified to the contract.