Geoffrey does not qualify for a standard mortgage. He can apply for
a. a balloon mortgage.
b. an interest-only mortgage.
c. a subprime mortgage.
d. a construction loan.
Klondike and Leola own 10,000 shares of stock in My-T Gro Corporation. On the death
of either owner, that owner’s interest in the stock passes to the surviving owner. This is
a. a joint tenancy.
b. community property.
c. a tenancy in common.
d. ownership in fee simple.
Owen and Pablo enter into a contract for a sale of fifty Western saddles. Pablo pays, but
Owen does not deliver. Pablo can normally recover as damages the difference between
a. any loss avoided and any profit gained.
b. the actual price and the hoped-for price.
c. the contract price and the market price.
d. the current prices in the parties’ locations.
David, the chief accounting officer of Texas Fencing Corporation, wants to be sure that
all the company’s accounts are legal and ethical. Sometimes, however, he is unsure
exactly what is legal and what is illegal. David should
a. not worry about what is legal or illegal as long as the corporate executives benefit in
the short run.
b. try his best to not do anything illegal and keep documentation showing that he
always acts in good faith.
c. not worry about what is legal or illegal as long as it benefits the shareholders.
d. not worry about what is legal or illegal as long as it benefits the chief executive of the
corporation.
Fact Pattern 31-1
Ray is a shareholder of Small Biz Company (SBC). When the directors fail to undertake
an action to redress a wrong suffered by SBC, Ray files a suit on the firm’s behalf.
Refer to Fact Pattern 31-1. Any damages recovered by Ray’s suit will go to
a. Ray.
b. SBC.
c. SBC’s directors.
d. the state in which SBC is incorporated.
In a dispute over a sale involving a bicycle, Dain argues that as to this deal Emil’s
Hobby Shop, where Dain bought the bike, is a merchant. A court may determine
whether Emil’s is a merchant by assessing whether
a. it has sold any bikes within the last year.
b. it holds itself out by occupation as having knowledge or skill unique to the bike in
the transaction.
c. its owner enjoys biking.
d. it subscribes to Bike, a biweekly trade magazine.
McCall and Teresa enter into a contract for the distribution of McCall’s produce to local
restaurants for which Teresa agrees to pay. McCall transfers his right to payment under
the contract to Midtown Bank. This transfer is
a. a delegation.
b. an assignment.
c. a void contract.
d. prohibited by law.
Soleful Shoes, Inc. owns property in Kenya. The Kenyan government seizes the
property. In order for the seizure to be considered an expropriation and not a
confiscation, the Kenyan government must
a. pay just compensation to Soleful Shoes.
b. give Soleful Shoes at least 30 days notice of the seizure.
c. give Soleful Shoes at least 90 days notice of the seizure.
d. notify the U.S. government before the seizure.
Clayton dies without a will. The distribution of Clayton’s property, including his farm
near Lincoln, Nebraska, is prescribed by
a. a court-appointed executor.
b. federal probate statutes.
c. state intestacy laws.
d. the degree of consanguinity between Clayton and his next of kin.
Marvin is an employee of Wild Thing Farms. Marvin finds out that the head of Wild
Thing Farms is illegally importing endangered animals to sell as pets. If Marvin reports
his employer’s illegal activities he will probably be protected by
a. unemployment statutes.
b. worker compensation statutes.
c. whistleblower statutes.
d. no statutes.
Frida hires Gert, a real estate broker, to act as her agent to sell her house. The house
burns down before being sold. The agency agreement is likely
a. still in force if Frida gives Gert additional consideration.
b. still in force if Gert does not tell prospective customers.
c. terminated by mutual consent of the parties.
d. terminated by operation of law.
Corporate business matters are presented at a shareholders’ meeting in the form of
a. resolutions.
b. proxies.
c. articles of incorporation.
d. bylaws.
Big Beef, Inc. raises calves to sell. Big Beef breeds its cows in April, and the cows
calve in February of the following year. In January Andrea contracts with Big Beef to
buy fifty calves. Identification takes place in
a. January, when the contract is signed.
b. April, when the calves are conceived.
c. February, when the calves are born.
d. a reasonable period of time.
Birgir and Roger have an agency relationship in which Roger is the agent and Birgir is
the principal. Roger is empowered to enter into contracts that must be in writing under
the Statute of Frauds. Roger’s authority
a. must be in writing from Birgir.
b. can be orally given by Birgir.
c. only needs to be in writing from Birgir if a contract is breached.
d. is subject to a court’s approval.
Fruits & Vegetables, Inc., employs hundreds of seasonal and permanent workers, both
skilled and unskilled, in seven states. Fruits & Vegetables can hire illegal immigrants
a. if either the employer or the immigrants file special forms.
b. only if the employer files a special form.
c. only if the immigrants file special forms.
d. under no circumstances.
Ron makes a contract with Stu that indirectly benefits Tim, although neither Ron nor
Stu intended that result. Tim is
a. a delegatee.
b. an assignee.
c. an incidental beneficiary.
d. an intended beneficiary.
Jack wants to buy a promissory note due on April 1 from Jill. To be able to be a HDC,
Jack
a. must purchase the note before midnight on April 1.
b. must purchase the note before noon on April 1.
c. must purchase the note before 8:00 A.M. on April 1
d. can purchase the note at anytime within thirty days of April 1.
Vicky contracts with Warren for the delivery of hospice services to benefit Xavier. This
is
a. a delegation.
b. an assignment.
c. a third party beneficiary contract.
d. prohibited by law.
Beth is a minor. She purchases a set of sessions with a personal trainer, a water bottle
and some weights from a fitness store. Later, Beth decides that she does not want the
water bottle or weights. Beth
a. can disaffirm the contract and return the water bottle and weights, but keep the
training sessions.
b. can only disaffirm the contract if she returns all the goods.
c. cannot disaffirm the contract.
d. can disaffirm the contract and keep all the goods.
Fact Pattern 38-1
Nika owns land in Ohio. Her ownership rights include the right to sell or give away the
property without restriction, and the right to commit waste, if she chooses.
Refer to Fact Pattern 38-1. Polly allows Rhianna to camp on her land for several days
and take photos for an upcoming exhibit. Polly has given Rhianna
a. a fee simple absolute.
b. a license.
c. a life estate.
d. an easement.
Kelly and Lucas sign a written contract for the sale of Kelly’s Koffee Kiosk to Lucas.
The parties intend their written contract to be a final statement of the terms of their
agreement.
Refer to Fact Pattern 14-1. The writing that Kelly and Lucas signed is a contract that is
a. completely integrated.
b. conditionally integrated.
c. agreeably integrated.
d. obviously integrated.
A contract between Kim and Larry to lease residential property contains an exculpatory
clause. This clause is
a. enforceable as a matter of public policy.
b. enforceable if either party is in a business important to the public.
c. enforceable if an event occurs to which the clause applies.
d. generally unenforceable.
Oklahoma enacts a law requiring all businesses in the state to donate 10 percent of their
profits to Protestant churches that provide certain services to persons whose income is
below the poverty level. PriceLess Stores files a suit to block the law’s enforcement.
The court would likely hold that this law violates
a. no clause in the U.S. Constitution.
b. the establishment clause.
c. the free exercise clause.
d. the supremacy clause.
Fun Times Gaming Company employs two hundred workers full-time. If Fun Times
plans to have a mass layoff, it must provide its employees with at least
a. thirty days of notice.
b. sixty days of notice.
c. ninety days of notice.
d. one year of notice.
Ann and Burt are partners in Delta Associates. Burt takes advantage of a partnership
opportunity for personal gain that causes Delta’s business to suffer. A court orders Burt
to hold the profits in trust for the partnership. This is
a. a constructive trust.
b. an living trust.
c. a resulting trust.
d. a testamentary trust.
Community Construction Corporation offers to buy from Solid Cement Company a
certain quantity of cement for a certain price. Solid can accept the offer by
a. doing nothing.
b. promising to ship or promptly shipping the cement.
c. promising to ship the cement only.
d. promptly shipping the cement only.
Mace copies Nick’s book, Off the Beaten Path, in its entirety and sells it to Parkland
Books, Inc., without Nick’s permission. Parkland publishes it under Mace’s name. This
is
a. copyright infringement.
b. fair use.
c. licensing.
d. protected expression.
Posing as Platinum Bank, Oswald e-mails Nadia, asking her to update her personal
banking information through a link in the e-mail. She clicks on the link and types in the
data, which Oswald promptly sells to Moe. This is
a. hacking.
b. identity theft.
c. cyberterrorism.
d. bribery.
Diners Cafe, Inc., leases a building from Eagle Corporation. When the lease expires,
Diners moves out, leaving the building in a seriously damaged condition. Eagle makes
repairs, and leases the building to Fine Pizza Company. For all damage beyond ordinary
wear and tear,
a. Diners and Eagle are each liable for half of the cost.
b. Diners is liable for the entire cost.
c. Eagle is liable for the entire cost.
d. Fine Pizza is liable for the entire cost.
Dina, Ed, and Fran are co-sureties of Glen’s debt to Hi-Credit Company. Dina pays
Glen’s entire debt. Dina’s right to seek proportionate payments from Ed and Fran is the
right of
a. contribution.
b. redemption.
c. reimbursement.
d. subrogation.
Quotient Financial Corporation is a secured party with a security interest in property
owned by Retail Sales Company. Perfection of this security interest may not protect
Quotient Financial against the claim of
a. a bank.
b. a buyer in the ordinary course of business.
c. a subsequent lien creditor.
d. a trustee in bankruptcy.
Curtis enters into a contract with Drive-Away Lease Company for a three-year lease of
a car. This contract is subject to
a. Article 2 of UCC.
b. Article 2A of the UCC.
c. Article 3 of the UCC.
d. the common law only.
Bill leases an apartment from Cathy. Two months later, Bill moves out, and arranges
with Dian to move in and pay the rent to Cathy for the rest of the term. This is
a. an assignment.
b. an eviction.
c. a tenancy at sufferance.
d. a sublease.
Eli owes Martin $10,000. Martin assigns the claim to Jack. Jack does not notify Eli of
the assignment. A week later, Martin assigns the same claim to Allen. Allen
immediately notifies Eli of the assignment. Allen
a. has priority to payment in all states.
b. has priority to payment in states that follow the English rule.
c. does not have priority to payment in any state.
d. has priority to payment in most states.
Bango! Business, Inc., a U.S. firm, may have committed, in Chile, acts that would
constitute, in the United States, violations of U.S. antitrust laws. These 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.
Monopoly power may be proved by evidence that a firm used its power to control
prices.
A manufacturer’s duty of care does extend to the inspection and testing of products
bought to incorporate in the final product.
An employer may not hire substitute workers to replace strikers.
An employee can continue the health benefits provided by his or her employer for a
period of time only on an involuntary loss of employment.
A creditor’s composition agreement may be entirely enforceable.
State laws regarding corporations are uniform.
The right to purchase corporate shares before the property is offered for sale to others is
known as the right of first refusal.
Stare decisis is a doctrine obligating judges to follow the precedents established within
their jurisdictions.
Under the Fourth Amendment, a general search warrant and a general search through a
person’s belongings are permitted.
A lien is an encumbrance on property to satisfy a debt or protect a claim for the
payment of a debt.
Uniform laws apply in all states, including those in which the laws have not been
adopted.
Aron owns a certificate of deposit with Beth, his sister, and an apartment building with
Carl, his brother, in both cases as a joint tenant. Aron, a partner with Debra in Aron &
Debra Accountants, obtains a life insurance policy with Debra as the designated
beneficiary. Aron writes a will that gives particular items of personal property, as well
as specific amounts of cash, to his children and his friends. The will leaves the residue
of the estate to Eve, Aaron’s favorite cousin. Carl dies. Aron, on his deathbed, makes a
gift to the United Way. Will the certificate of deposit, the apartment building, the
proceeds from the life insurance policy, and the gift to the United Way become part of
Aron’s estate and be distributed under the will? If not, how will these items be
distributed and to whom?
A criminal case must be proved beyond a reasonable doubt.
A conveyance of property for the life of a specified individual creates a fee simple
defeasible.
Real estate transactions are always governed by Article 2 of the UCC.
Risk management is the transfer of certain risks from an individual to an insurance
company.
The agreement resulting from a buyer clicking on a box containing the words “I agree”
is known as a click-on agreement.