Opalina asks Paolo, who does not understand English, to sign what Opalina says is an
application to open a bank account. In fact, the “application is a note. If sued on the
note by an HDC
a. Paolo must pay the note.
b. Paolos best defense would be fraud in the execution.
c. Paolos best defense would be fraud in the inducement.
d. Paolos best defense would be mistake.
CPA Accounting, LLC, is a limited liability company. If the law in CPAs state is like the
law in most states, unless the members have agreed otherwise, participants in the firms
management will be considered to include
a. all members.
b. no member.
c. one member.
d. two members, including at least one general partner.
SFX Paintball Games, Inc., and Truck & Trailer Delivery Corporation sign an agree-
ment that provides for the payment of “$1,000 by whichever party commits a material
breach of the contract that creates damages difficult to estimate but approximately
$1,000. This is
a. a liquidated damages clause.
b. a mitigation of damages clause.
c. a nominal damages clause.
d. a penalty clause.
Ridgeline Sports Gear, Inc., is required to register its securities under Section 12 of the
Securities Exchange Act of 1934. Section 16(b) of the act covers
a. the declaration of dividends by Ridgelines board of directors.
b. the later re-registration of Ridgelines securities.
c. the short-swing activities of Ridgelines insiders.
d. the solicitation of proxies from Ridgelines shareholders.
Integrated Software, Inc., conditions the sale of one of its products on Inventory Office
Systems agreeing to buy another of Integrateds products. This deal is
a. legal, depending on its purpose and the effect on competition.
b. legal, depending on production and transportation costs.
c. legal under any circumstances.
d. not legal under any circumstances.
New Town Construction, Inc., wants to build a parking ramp to connect to its New
Town Mall, both of which are on private land. For this action, an environmental impact
statement is
a. prohibited.
b. required.
c. unnecessary.
d. voluntary.
Pace is an attorney, whose clients include Quikfeet Running Shoes Company. Unless
Quikfeet has violated securities law, the contents of Paces file on Quikfeet may be
disclosed to someone other than Quikfeet
a. only to a third party who is a foreseeable user of the information.
b. only under a court order (with or without Quikfeets consent).
c. only with Quikfeets consent.
d. under any circumstances.
Tamis Tasty Tacos, a mobile vendor, 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.
Fact Pattern 21-B1
First State Bank issues a letter of credit in favor of Oboe Company, an American firm,
to facilitate an international sales contract to buy resources from Lapland Mining, Ltd.,
a Finnish company.
Refer to Fact Pattern 21-1. Lapland is entitled to payment when it
a. enters into the contract with Oboe.
b. verifies that Oboe has the money to pay for the purchase.
c. complies with the terms and conditions of the letter of credit.
d. asks to be paid.
Quibble Companys liabilities exceed its assets. Quibble hires Roo & Slay, an
accounting firm, to prepare a balance sheet. Through Roo & Slays negligent omissions,
the sheet shows a net worth. Town Bank relies on the balance sheet to make a loan to
Quibble. When Quibble defaults, Town files a suit against Roo & Slay. Under the
Restatement rule, Roo & Slay is most likely
a. liable because Roo & Slay owed a duty of care to Quibble.
b. liable because Roo & Slay owed a duty to any foreseeable user.
c. liable if Roo & Slay knew that Town would rely on the balance sheet.
d. not liable because Roo & Slay and Town were not in privity.
Bill and Cody agree to guarantee Wyatts debt. Bills maximum liability is $60,000, and
Codys is $40,000. Wyatt owes $40,000 and is in default. Bill pays the creditor the entire
amount. In the absence of an agreement to the contrary, Bill can recover from Cody
a. 0.
b. $16,000.
c. $20,000.
d. $40,000.
Kirk is the chief financial officer of Lemon Corporation, which is required to file
certain financial statements with the Securities and Exchange Commission (SEC).
Under the Sarbanes-Oxley Act of 2002, Kirk must personally
a. certify that the statements are accurate.
b. delegate the responsibility for preparing the statements.
c. deliver the statements to the appropriate SEC officer.
d. prepare the statements.
Fact Pattern 28-4B
Marys home is in a state that has a $30,000 homestead exemption. Mary defaults on a
$60,000 debt that she owes to Nina. Marys home is sold at auction for $80,000.
Refer to Fact Pattern 28-4B. Mary will receive
a. 0.
b. $30,000.
c. $50,000.
d. $60,000.
The government of Iran violates an international law. Persuasive tactics to remedy the
situation fail. The only recourse of other nations is to
a. approve the European Unions enforcement of the law.
b. ask the International Court of Justice to enforce sanctions.
c. seek enforcement of the law through the United Nations.
d. take coercive actionsever relations, impose boycotts, go to war.
Fact Pattern 3-B1
Orin and Pia engage in a business transaction from which a dispute arises. Orin initiates
a lawsuit against Pia by filing a complaint.
Refer to Fact Pattern 3-1. If Pia files a motion to dismiss, and the court denies it
a. Orin will be given more time to file an amended complaint.
b. Orin will have a judgment entered in his favor.
c. Pia will be given more time to file another response.
d. Pia will have a judgment entered in her favor.
Jaime, a cocoa bean farmer in Columbia, forms an alliance with Irwin, an importer and
marketer in the United States. Their products carry a Fair Trade label. This means that
Jaime
a. accepts whatever price for his products that the market will bear.
b. receives a stable minimum price for his products.
c. employs forced labor at a fair price whenever possible.
d. produces crops as cheaply as possible to keep his prices minimal.
Under federal law, the calorie content of the food on a menu must be posted by Organic
Mix, LLC, if Organic Mix is
a. a restaurant chain with twenty or more locations.
b. a food distributor with twenty or more customers.
c. a food processor with twenty or more products.
d. a food producer with twenty or more acres.
Joaquin wants to transfer his right to the payment of his wages under an employment
contract with Free-Flo Plumbing Company to Inez. In most states, this transfer
a. is prohibited.
b. may be oral or written.
c. must be implied.
d. must be in writing.
Joy invites Ken into her apartment. Ken commits trespass to land if he
a. enters the apartment with fraudulent intent.
b. harms the apartment in any way.
c. makes disparaging remarks about Joy to others.
d. refuses to leave when Joy asks him to go.
Energy Resources Company develops its marketing strategies in terms of what its
management perceives as its ethical obligations, which represent its
a. legal liability.
b. profitability.
c. standards of right and wrong.
d. unilateral corporate duties.
Brenda is a purchasing agent for Commodities Exchange Corporation. Dennis, a
Commodities corporate officer, gives Brenda written authority to buy for the firm as
many computers and peripheral devices as necessary. The next day, Dennis calls Brenda
and tells her to buy only fifty notebook computers and nothing else. Brenda shows the
written authority to E-Products, Inc., and enters into a contract with E-Products to buy
sixty notebook computers and a selection of printers, scanners, and extra storage media.
E-Products ships the order to Commodities. Is Commodities liable to E-Products under
the contract? Is Brenda liable? In each case, if so, why? If not, why not?
BizOnline.com uses an electronic agent, or e-agent, to perform certain tasks in
e-commerce. With respect to the e-agents actions, BizOnline.com is bound by
a. all of the actions.
b. only those actions of which BizOnline.com is aware.
c. only those actions that BizOnline.com does not refute.
d. only those actions that BizOnine.com ratifies.
In a skateboarding accident with Ryan, Starla is injured. Ryans insurance companys
offers her $25,000 to release him from liability, and she accepts. Later, she learns that
her injuries are more serious than she realized. The release
a. bars Starlas further recovery from Ryan.
b. is unenforceable because Starlas injuries are unforeseeably difficult.
c. is unenforceable because Ryan has a preexisting duty to pay.
d. is unenforceable because the release is an illusory promise.
Lilith promises to buy Marvs handheld game-player for $75. Marv is
a. an executee.
b. an offeror.
c. a promisee.
d. a promisor.
Otis is interested in buying a franchise from Plentiful Markets Inc. This transaction, like
other franchise deals, is regulated to protect
a. certain types of anticompetitive agreements.
b. franchisors from dishonest prospective franchisees.
c. prospective franchisees from dishonest franchisors.
d. the governments power to restrict freedom of contract.
One summer afternoon, Eve, Faruk, and Galen decide to each draft and sign a “Last
Will and Testament. Eve is fifteen years old, Faruk is seventeen, and Galen is nineteen.
In most states, those with the capacity to execute a will would be
a. Eve, Faruk, and Galen.
b. Faruk and Galen only.
c. Galen only.
d. not Eve, Faruk, or Galen.
Floyd tells his daughter Glenda that she can have his Harley Davidson when he dies,
but he does not add this to his will. This is
a. a valid gift causa mortis.
b. a valid gift inter vivos.
c. a valid gift testamentary.
d. not a valid gift.
Switch/On Company develops “Instant, software to speed the display of graphics on
Web sites. “Instant has the most copyright protection under
a. the Federal Trademark Dilution Act.
b. the Internet Corporation for Assigned Names and Numbers.
c. the Trade-Related Aspects of Intellectual Property Rights agreement.
d. the Uniform Trade Secrets Act.
Bodies application to City Bank for a credit card is denied. Bodie can obtain
information on her credit history in a credit agencys files under
a. no federal law.
b. the Equal Credit Opportunity Act.
c. the Fair Credit Reporting Act.
d. the Fair Debt Collection Practices Act.
Roy leaves his pick-up truck at Sams Auto Service for an oil change. This is a bailment
for
a. neither partys benefit.
b. the parties mutual benefit.
c. the sole benefit of the bailee.
d. the sole benefit of the bailor.
Kris contracts to work exclusively for Little Manufacturing Company during May for
$5,000. On April 30, Little cancels the contract. Kris finds another job during May but
earns only $3,000. Kris files a suit against Little. As compensatory damages, Kris can
recover
a. $3,000.
b. $2,000.
c. $1,000.
d. $0.
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 trade acceptance.
Fabio makes a living by farming near Gastric Combustibles, Inc., which has discharged
pollutants into the areas air and water. In a suit by Fabio for an injunction against
Gastric on the ground of nuisance, the court is most likely to rule in Gastrics favor if
a. Fabios operation also pollutes, with pesticides and herbicides.
b. Fabios operation suffers harm distinct from the general public.
c. Gastrics operation is the core of the local economy.
d. Gastrics operation uses reasonable care to avoid harm to Fabio.
Jolie signs a contract with Keaton, an unlicensed physician, to perform plastic surgerya
medical procedure. This contract is enforceable by
a. Jolie.
b. Jolies medical insurance company.
c. Keaton.
d. no one.
A spendthrift trust provides for a beneficiarys transfer of his or her right to future
payments of trust funds.
Generally, your trademark must be the same as anothers mark or so similar that
confusion results.
The Statute of Frauds requires that fraud must be proved by a writing.
Payment of the principal obligation will not discharge the surety from the obligation.
If a homeowner defaults, the lender has the right to foreclose on the mortgaged
property.
If a defendants act constitutes causation in fact with respect to a plaintiffs injury, the
defendant is liable without further consideration.
Acceptance of goods is presumed when a buyer or lessee fails to reject the goods within
a reasonable time.
A creditor-debtor relationship can exist between a bank and its customer.
Proceeds from the disposition of collateral after default on the underlying debt are
distributed equally among lienholders who have made demands.
Express warranties displace inconsistent implied warranties with no exception.
The verdict in a summary jury trial is binding.
A search warrant must particularly describe whatever is to be searched.
The simplest way for a U.S. firm to do business in a foreign market is to export its
products directly to that market.
A limited liability partnership allows its partners to avoid personal liability for the
malpractice of other partners.
Any relevant evidence may be used to prove that an e-record is the act of a particular
person.
The only defense to criminal liability that justifies the use of force is self-defense.