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Bev is a shareholder of All-Terrain Vehicle Company. As a shareholder, Bev does not
have
a. a right to compensation.
b. dividend rights.
c. inspection rights.
d. preemptive rights.
To avoid liability for intentional injuries, Northwest Power Corporation includes in its
contracts an exculpatory clause. This is
a. enforceable if the other parties are protected from liability.
b. enforceable if the other parties consent to it.
c. enforceable if the other parties have equal bargaining power.
d. not enforceable.
Dick works for First City Bank. When his spouse Elin is diagnosed with Lou Gehrigs
disease, Dick asks to take temporary leave to care for her. First City discharges him. He
files a suit against the bank under the Americans with Disabilities Act of 1990. Most
likely, Dick can
a. recover for association discrimination.
b. recover for reverse discrimination.
c. recover for disparate-impact discrimination.
d. not recover.
Jumbo Juice Inc. offers entrepreneurs the opportunity to operate a franchise under the
Jumbo Juice trade name as a member of a select group of dealers that engage in retail
juice sales. To potential investors, the franchisor must provide
a. actual earnings figures.
b. hypothetical earnings figures.
c. projected earnings figures.
d. none of the choices.
Dominique buys a franchise from Cheyenne Artisans, Inc. This provides Cheyenne with
an outlet for the firms goods, some of which Dominique is required to buy at an
established price. In their agreement, Cheyenne may also specify
a. the franchisors non-culpability for any breach of the agreement.
b. the franchises business organizational form.
c. the retail prices at which Dominique must resell the goods she buys.
d. none of the choices.
Heather and Genice agree that Genice can satisfy her debt to Heather by paying the
money directly to Fava (to whom Heather owes a debt). The designation of this contract
as a third party beneficiary contract is determined by the intent to benefit
a. all of the parties.
b. Heather only.
c. Genice only.
d. Fava only.
To prevent its competitors from obtaining sufficient supplies to make their products,
Molded Plastics, Inc., uses its market power to increase the prices of those supplies.
This is
a. a refusal to deal.
b. business judgment.
c. predatory bidding.
d. predatory pricing.
Seafood Canning Corporation keeps a file of I-9 verifications forms. To inspect this file,
the appropriate government officer must obtain
a. a subpoena and a warrant.
b. a subpoena or a warrant.
c. a special executive order.
d. none of the choices.
Cooper offers to sell Gable his sport utility vehicle (SUV) and says that it has never
been in an accident. Relying on Coopers statement, Gable buys the SUV. Later, when it
develops mechanical problems, Gable can
a. not rescind the contract.
b. rescind the contract on the basis of fraud.
c. rescind the contract on the basis of mistake.
d. rescind the contract on the basis of puffery.
The Ohio state legislature passes a law to regulate local delivery services. The final
authority regarding the constitutionality of this law is
a. the judicial system.
b. the president of the United States.
c. the governor of Ohio.
d. the U.S. Congress.
Sia plays Town & Country (T&C), a virtual world in which T&C dollars are traded for
real dollars at a ratio of 250 to To play the game, Sia had to agree that T&C has the
right to erase all of Sias virtual property on her death. To avoid this fate, Sia should
a. change all passwords without informing T&C.
b. name a digital executor to collect Sias passwords after her death.
c. disavow any and all affiliation with T&C.
d. exchange all virtual assets for virtual dollars.
Excel Products Company files a suit against Flying Distribution, Inc., over a contract.
Before the trial, Excel can obtain from Flying
a. all documents in Flyings possession relating to the contract.
b. any documents in Flyings possession.
c. no documents in Flyings possession.
d. only those documents that Flying agrees to release.
Master Fabrication Corporation has exclusive control over the market for its product.
Under antitrust law, this is
a. a per se violation.
b. a violation if it acquired this power through "business judgment.
c. a violation if it acquired this power through "anticompetitive means.
d. not a violation.
The state legislature of Kansas enacts a statute to regulate trucking that affects interstate
commerce. This statute will be balanced in part in terms of
a. the courts authority to determine that a law is unconstitutional.
b. the purpose of interstate commerce.
c. the states interest in regulating the matter.
d. the statutes impact on noneconomic activity.
Isaac and Holiday Fruit Company enter into an oral contract under which Isaac agrees
to provide delivery service for holiday Fruit for nine months. This contract is
enforceable by
a. Isaac.
b. Holiday Fruit.
c. any interested third party, such as a Holiday Fruit customer.
d. none of the choices.
Lester and Myrtle want to rescind their contract under which Lester sold an MP3 player
for $40. To rescind the contract
a. Lester must return the $40 and Myrtle must return the player.
b. Lester must return the $40 only.
c. Myrtle must return the player only.
d. the parties can keep the "benefits of their bargain.
Kirk receives an unsolicited credit card in the mail and tosses it on his desk. Without
Kirks permission, his roommate Leif uses the card to buy a new personal computer for
$1,000. Kirk is
a. liable for $1,000.
b. liable for $500.
c. liable for $50.
d. not liable for any amount.
To pay for investment advice from financial consultants Smith and Jones, Tony signs a
check payable to "Smith or Jones. A proper indorsement of the check is
a. not possible.
b. "Smith and "Jones only.
c. "Smith only, or "Jones only, but not "Smith and "Jones.
d. "Smith only, or "Jones only, or "Smith and "Jones.
Lex reproduces Minas copyrighted work without paying royalties. Lex is most likely
excepted from liability for copyright infringement under the "fair use doctrine if
a. Lex copies the entire work.
b. Lex distributes the copies freely to the public.
c. Lexs use has no effect on the market for Minas work.
d. Lexs use is for a commercial purpose.
Celfone Corporation is required to file a registration statement with the Securities and
Exchange Commission. This statement must contain
a. a copy of prospectuses to be provided to investors.
b. a description of securities being offered for sale.
c. a record of pre-registration sales in securities.
d. a sample of advertising to be used to attract investments in Celfone.
Nico is a passenger in a car driven by Owen, whose negligence causes an accident,
injuring himself. Nico, uninjured, accompanies Owen to Parkside Hospital in an
ambulance. The ambulance is hit by a car driven by Quin, injuring Nico. Nico files a
suit against Owen, whose best defense is
a. assumption of risk.
b. contributory negligence.
c. negligence per se.
d. superseding cause.
Residence Painting Company has a claim against Stuarts property to satisfy a debt that
takes priority over other claims against the same property. This is
a. a lien.
b. a violation of most state laws.
c. a writ of attachment.
d. a garnishment.
Riley, a Sterling Bank employee, deposits into his account checks that are given to him
by bank customers to deposit into their accounts. This is
a. burglary.
b. embezzlement.
c. larceny.
d. money laundering.
Peyton, Qiana, and River form a syndicate to buy a professional basketball franchise.
This syndicate could be set up as
a. a joint venture.
b. a corporation.
c. a sole proprietorship.
d. a limited liability company.
Fact Pattern 12-A1
Jesse defends against a breach-of-contract suit by College Credit Corporation by
claiming that their deala student loan accruing interest at a certain rate and payable
beginning on a certain datewas unfair because the consideration for their contract was
inadequate.
"Adequacy of consideration refers to
a. "how much consideration is given.
b. legally sufficient value in the eyes of the law.
c. the intangible value to a contracting party of a thing exchanged.
d. the substantiality of the consideration exchanged.
Todos Ltd. agrees to supply United Steel, Inc., with minerals from Venezuela. When the
government is unexpectedly overthrown in a revolution, Todos can obtain the goods
only at a much higher price. United agrees to pay but later files a suit to recover the
difference. The court will most likely rule that
a. a change in government is a risk ordinarily assumed in business.
b. an unforeseen difficulty supported the contract modification here.
c. Todos engaged in extortion or the so-called holdup game.
d. Todos had a preexisting duty to supply the goods at the initial price.
Toby signs a note "payable to the order of United Credit Union. Unless Toby has a valid
defense against payment, Tobys liability on this note is
a. immediate.
b. imposed only after payment is demanded.
c. postponed until the note is dishonored by United Credit Union.
d. suspended until payment is due.
Design Architects, Inc., and Office Supply Company contract for a sale of office
furniture. Design Architects, which is insolvent, breaches the contract. Office Supply
can stop delivery of the goods in transit
a. only if the quantity is at least a carload.
b. only if the quantity is at least a planeload.
c. only if the quantity is at least a truckload.
d. regardless of the quantity.
Speedy Delivery Company buys a white van from Toms Terrific Vehicles, on credit
under a guaranty signed by Ulysses, Speedys president, making him personally liable if
Speedy does not pay. Ulysses is
a. a surety.
b. a lienor.
c. a guarantor.
d. a creditor.
Fact Pattern 7-A1
Roy owns an apartment building that contains units of different sizes. The sidewalks
around the building are in poor repair. Many sections have buckled from the growth of
tree roots over the years.
As the landlord of the building, when a prospective tenant asks about the size of an
apartment, Ray has a duty to
a. arrange to correct the rent to match the tenants ability to pay.
b. do nothing.
c. supply correct information.
d. tell tenants what they want to hear even if it is not correct.
Grady obtains a business loan from Farmers County Bank. To keep Grady in business,
and thereby obtain the benefits of a deal between them, Dakota promises the banks loan
officer that she will repay the loan if Grady does not. To be enforceable, Dakotas
promise
a. need not be in writing.
b. must be in writing because it benefits Grady.
c. must be in writing because the bank is not a party to the other deal.
d. must be in writing because it benefits Dakota.
Kobe files a suit against Joanna. They meet, and each partys attorney argues the partys
case before a judge and jury. The jury presents an advisory verdict, after which the
judge meets with the parties to encourage them to settle their dispute. This is
a. a mini-trial.
b. a summary jury trial.
c. early neutral case evaluation.
d. not a legitimate form of dispute resolution.
Linus and Marlena agree that Linus will fix Marlenas roof in exchange for $8,000.
Linus spends half of the amount due under the contract to acquire the materials for the
job from Natural Roofing Supplies. Natural Roofing is
a. a delegatee.
b. an intended beneficiary.
c. an incidental beneficiary.
d. an alien to the contract.
In a commercial bailment, the bailee must exercise ordinary care.
A tangible employment action is a significant change in employment status or benefits.
A statement of opinion is generally subject to a claim of fraud.
Selling securities after the effective date of the registration statement results in liability.
A default occurs when a debtor fails to pay a creditor as promised.
Hoppy steals two checks from Eagle Retail Stores, Inc.: a blank check and a check
payable to the order of General Supplies Company (GSC), drawn on Eagles account
with First National Bank. Hoppy forges Eagles signature on the blank check and makes
it payable to himself. Hoppy forges GSCs indorsement on the back of the check payable
to GSC, and adds "Pay to the order of Hoppy. At Friendly Credit, Inc., Hoppy indorses
the back of both checks with his own name and gives them to Friendly for cash.
Friendly does not know about the theft or the forged signatures and presents the checks
to First National, which pays them. Eagle, which was not negligent, discovers the
forgeries and asks First National to recredit its account. Who suffers the loss on each
check?
The rights and remedies of secured parties are not cumulativeif a creditor is
unsuccessful in enforcing rights by one method, he or she cannot pursue another
method.
Certain debts are not dischargeable in bankruptcy.
A principal owes his or her agent a duty to act in good faith.
An employer who violates the law by hiring an unauthorized alien is subject only to the
penalty of a forced discharge of the employee.
A member of a limited liability company must be a natural person.
A lenders failure to comply with federal mortgage disclosure requirements extends the
borrowers right to rescind the loan to no more than seven days.
A guaranty contract must be in writing to be enforceable.
Whether a law is constitutional depends on its source.
Limited liability companies (LLCs) are governed by state LLC statutes.
The Securities Exchange Act of 1934 is a one-time disclosure law.
Every state has adopted some or all of the Uniform Commercial Code.
Some states provide that in the absence of an agreement to the contrary each member of
a limited liability company has one vote.
