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.
Lorna borrows $175,000 from Mountainside Credit Union to buy a home. Among the
terms that must be disclosed under federal law is the annual percentage rate. This is
a. the actual cost of the loan on a yearly basis.
b. the average prime offer rate.
c. the interest rate at which the loan is made.
d. the loan principal.
Ester is a lighting technician who hires out on a per-project basis to film and television
production companies, as well as theatres and other venues that stage dramatic and
musical performances. In this capacity, Ester is
a. an agent.
b. an employee.
c. an independent contractor.
d. a principal.
Dixie May enters into a contract to buy one hundred pounds of pecans from Margaret.
The contract must be in writing if the pecans cost
a. $100.
b. $150.
c. $250.
d. $500.
Richard is an adult. He enters into a contract to sell sixteen-year-old Jane his car for
$3,000. The next day Richard recieves an offer of $4,000 for his car from
twenty-year-old Bill. Richard
a. cannot disaffirm his contract with Jane because he is an adult.
b. can disaffirm his contract with Jane because Bill is an adult and contracts with adults
take precedence over contracts with minors.
c. cannot disaffirm his contract with Jane because she is a minor.
d. can disaffirm his contract with Jane because the contract has not been ratified.
Office Suppliers, Inc. and Little Office Shop enter into a contract for a sale of office
supplies. Office Suppliers is the seller. Under a shipment contract, the Office Suppliers
does not have to
a. obtain and promptly deliver or tender to the buyer any documents necessary to enable
the buyer to obtain the goods.
b. deliver the goods to a particular destination.
c. put the goods in the hands of the carrier.
d. promptly notify the buyer when the shipment has been made.
Alpha Company issues a trade acceptance with itself and Beta Company as parties. A
trade acceptance is
a. a draft.
b. an order to accept delivery of money.
c. a promise to accept delivery of goods.
d. a promise to deliver goods.
Jacob writes Phillip an uncertified check for $500 on January 1. Seven months later,
Phillip presents the check at the bank. The bank pays the check in good faith without
consulting Jacob. The bank
a. does not have the right to charge Jacob’s account for $500.
b. only has the right to charge Jacob’s account for $250.
c. has the right to charge Jacob’s account for $500.
d. can be held liable for breach of contract.
Jay files a bankruptcy petition under Chapter 7. Among his debts are unpaid taxes, fines
owed to the government, student loans owed to Mega University, and support owed to
his ex-wife Kris. Most likely to be discharged are
a. the back taxes if they accrued within the previous three years.
b. the fines if they have been outstanding less than eight years.
c. the student loans if their payment would impose undue hardship.
d. the support debts.
Homer’s Remodeling, LLC, is a limited liability company. Among the members, a
dispute arises that their operating agreement does not cover. No statute applies. The
dispute is most likely governed by the principles of
a. corporate law.
b. partnership law.
c. sole proprietorship law.
d. joint venture law.
Roger wants Andy to work late on a project. He tells Andy that the morally correct
thing to do is to stay late at the office and work on the project. Andy feels obligated to
stay and work late due to the moral pressure from Roger. Andy stays late at the office,
even though he does not want to. Andy can sue Roger for
a. false imprisonment.
b. battery.
c. defamation.
d. no tort.
CheezBurger Heaven, Inc., conducts a chain-style franchise. This involves the transfer
to Clive, one of its franchisees, of
a. a license.
b. a trade name.
c. the formula to make a product.
d. the ownership of the business.
Thirty-one days before filing a petition in bankruptcy, Dee transfers property and makes
payments that favor one creditor over another. These are
a. affirmation agreements.
b. preferences.
c. secured interests.
d. unsecured debts.
With respect to Egor’s land, Fig has an easement, Gabe has a profit, and Huck has a
license. A right to possess the land is owned by
a. Egor.
b. Fig.
c. Gabe.
d. Huck.
Frooty Drinks, Inc., and Great Gulp Bottling Company 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.
Leah gains access to government records and alters certain dates and amounts in her
favor. This is
a. embezzlement.
b. forgery.
c. larceny.
d. no crime.
Caramello Chip & Cookie Corporation (4C) obtains, and gives its employees, a list of
the customers of Sugar & Spice Sales, Inc. (3S). Under the law that applies to trade
secrets, 4C’s conduct is actionable provided
a. consumers are confused.
b. 4C’s conduct is intentional.
c. 4C uses the list.
d. 4C does not have 3S’s permission to use the list.
Origami Paper Products Corporation meets all of the requirements to be subject to the
federal employment discrimination laws. These laws restrict the ability of employers to
discriminate against workers on the basis of
a. experience.
b. gender.
c. intelligence.
d. skill.
Senator Brown and other politicians want to restrict the flow of technologically
advanced products and data from the United States to other countries. To restrict or
encourage exports, Congress can
a. do nothing.
b. assess antidumping duties.
c. impose export taxes.
d. set export quotas.
When a conflict arises among the documents that involve Express Flights Corporation,
the first priority for resolving the conflict is given to
a. resolutions of the board of directors.
b. Express Flights’s bylaws.
c. state statues.
d. the U.S. Constitution.
Rural Electric Company submits a bid to build a dam on federal land as part of a federal
project. For this action, an environmental impact statement is most likely
a. prohibited.
b. required.
c. unnecessary.
d. voluntary.
Lew, a member of a protected class, applies for a job with Mit-E Construction
Company, but fails Mit-E’s employment test and is not hired. Lew believes that the test
has an unintentionally discriminatory effect. If so, this is
a. reverse discrimination.
b. disparate-impact discrimination.
c. disparate-treatment discrimination.
d. not discrimination.
Hubert borrows $100,000 from Integrity Mortgage Mart to buy a home. Soon after
obtaining the mortgage, Integrity convinces Hubert to refinance. This is
a. a short sale.
b a subprime mortgage.
c. loan flipping.
d. steering and targeting.
Dina asks Edie to co-sign a credit application so that she can borrow money and buy a
truck from First Street Motors. If, after the loan agreement is signed, Dina agrees to a
higher rate of interest without telling Edie, then Edie is
a. discharged from the agreement.
b. liable at the higher rate of interest.
c. liable at the lower rate of interest.
d. liable for the principal only.
The Arkansas state legislature enacts a statute that prohibits the advertising of video
games “because the games might be harmful to minors.” Despite this new statute, the
president of Games Marketing, Inc. (GMI), orders GMI marketers to place ads in
various media. When a GMI ad appears on HDTV, a local television station, GMI and
HDTV are charged with violating the statute. What is the defendants’ best defense
against a conviction?
Jon says to Kristy, “I would like to sell you my sports memorabilia collection.” This is
not an offer because it
a. does not describe the subject matter sufficiently.
b. does not include a price term.
c. only expresses an opinion.
d. only invites Kristy to negotiate.
SuperBumperCars, Inc. requires all customers to sign a release that contains a clause
that releases SuperBumperCars from all liability in the event of an injury occurring
during a bumper car ride, no matter who is at fault. This is an example of
a. a covenant not to compete.
b. an adhesion contract.
c. an exculpatory clause.
d. an illusory promise.
A contract between Fresh Fruit Corporation and Green Grocer, Inc., requires Fresh Fruit
to deliver goods to Green Grocer’s place of business. This is
a. a bill of lading.
b. a destination contract.
c. a shipment contract.
d. a warehouse receipt.
Catalina promises high returns to Darby and other investors, who then agree to trust
their funds to Catalina. She uses these funds to pay previous investors. This is
a. a Ponzi scheme.
b. a stock option.
c. an accredited investor.
d. a tombstone ad.
Master Manufacturing Corporation has exclusive control over the market for its
product. Under the Sherman Act, this is
a. a per se violation.
b. a violation if it acquired this power through “business acumen.”
c. a violation if it acquired this power through “anticompetitive means.”
d. not a violation.
Jonah tells Levi he will give him an Xbox if Levi does Jonah’s chores for a month. Levi
promises to do the chores. Jonah and Levi have formed a
a. bilateral contract.
b. unilateral contract.
c. void contract.
d. unenforceable contract.
The consideration paid to an insurer to obtain an insurance policy is the premium.
Generally, a tenant must pay agreed-to rent even if the tenant moves out.
SEC Rule 10b-5 prohibits the commission of fraud in connection with the purchase or
sale of any security.
A special indorsement names the indorsee.
The basic purpose of antitrust law is to regulate economic competition.
Negotiation is the most complex form of alternative dispute resolution.
When dissolution takes place by voluntary action, the shareholders are responsible for
winding up the affairs of the corporation.
A price-fixing agreement that is reasonable does not violate antitrust law.
A beverage company that competes with Coca-Cola Company cannot call its products
“Koke.”
Through agents, a principal can conduct multiple business operations simultaneously.
If a principal ratifies a contract without knowing all of the facts, the principal can
rescind the contract.
A bank may not pay any checks on a customer’s account after the date of the customer’s
death.
To be negotiable, an instrument must be payable in a fixed amount.
A maker of an instrument that is payable at a definite time does not have the option of
paying before the stated date.
The only requirement for a valid contract is that the parties voluntarily entered into it.
Some promises create moral, but not legal, obligations.
A trademark can be diluted by the use of a similar mark.
A finder of abandoned property acquires title to it, and the title is good against the
whole world, including the original owner.