Glen falsely accuses Hu of stealing from Island Tours, Inc., their employer. Glen’s
statement is NOT defamatory if
a. only Hu hears it.
b. a third party hears it.
c. the statement is published.
d. the statement is a lie.
Denise and Elke do business as Final Curtain Decorators. In most states, for purposes of
holding title to property, this partnership would be treated as
a. an aggregate of the individual partners.
b. a natural person.
c. an entity.
d. a non-existent party.
Gail enters into a contract with Hi-Price Appliances, Inc. In a suit between the parties
over payment under the contract, Gail claims that a certain clause is unconscionable. If
the court agrees, it may
a. enforce, limit, or refuse to enforce the contract or the disputed clause.
b. enforce the contract without the disputed clause only.
c. limit the application of the disputed clause only.
d. refuse to enforce the entire contract only.
RingTone Corporation is a public company whose securities are traded among
investors. Under the Securities Act of 1933, a security is
a. almost any stake in the ownership or debt of a company.
b. an investment that is guaranteed to make a profit.
c. only such common forms of debt and equity as bonds and stocks.
d. whatever a company represents to the public as a security.
Barbara is selling her car. She knows that the brakes do not work. When a potential
buyer asks Barbara if there are any problems with the car, Barbara assures the buyer
that there are no problems. The buyer purchases the car based on the assurance that
there is nothing wrong with it. The buyer may be able to sue Barbara for
a. assault.
b. defamation.
c. fraudulent misrepresentation.
d. appropriation.
Hi-Lite Manufacturing, Inc., orders supplies online from Indigo Parts Company. To
complete the order, the buyer is required to click on a button that says, in reference to
certain terms, “I agree.” This is
a. a click-on agreement.
b. a default agreement.
c. an attribution agreement.
d. a shrink-wrap agreement.
Brad leaves an iPod at Computer Sales & Repair (CSR) to have the battery replaced.
CSR sells the iPod to Doris, who does not know that it belongs to Brad. Brad can
recover from
a. no one.
b. CSR.
c. Doris.
d. Apple, Inc., the maker of the iPod.
Petro Oil Refinery asks Quality Bank for a loan to increase its oil inventory. Quality
requires Robin, Petro’s president, sign a personal guaranty to pay the debt if Petro
defaults. Meanwhile, to sell fifty barrels of refined oil to Slick Lubricants, Inc., Petro
asks its outside accountant Tina to co-sign a credit application.
If Tina signs the application only after language is included that requires Petro to
exhaust its legal remedies against Slick before looking to her, then Tina is
a. a surety.
b. a lienor.
c. a guarantor.
d. a creditor.
Justice For All, a political organization, files a claim to challenge a Colorado statute that
limits the liberty of all persons to broadcast “annoying” radio commercials. This claim
is most likely based on the right to
a. equal protection of the law.
b. indictment.
c. procedural due process.
d. substantive due process.
Muffins-2-Go buys a truck from Street Vehicles, Inc., under a contract signed by Riley,
Muffins-2-Go’s president, making him personally liable if Muffins-2-Go does not pay
the loan. Riley is
a. a guarantor.
b. a surety.
c. a co-surety.
d. a co-creditor.
Stubbs buys a Tred-brand bicycle from his brother, Uriah. Uriah agrees to keep the bike
at his house until Stubbs picks it up. During a storm, a tree falls from Victor’s yard onto
Uriah’s garage and destroys the bike. The loss of the bike is suffered by
a. Stubbs.
b. Uriah.
c. Tred.
d. Victor.
Lani is asked to serve as a witness to Mona’s will. To qualify, Lani must be
a. a collateral heir.
b. a lineal descendant.
c. eighteen years of age or older.
d. mentally competent.
UniOil, a U.S. firm, owns property in Venezuela. When the government of Venezuela
seizes the property, UniOil asks a U.S. court to order the property’s return. The court
rules that Venezuela is exempt from the court’s jurisdiction. This is
a. a travesty of justice.
b. the act of state doctrine.
c. the doctrine of sovereign immunity.
d. the principle of comity.
Pace is an attorney, whose clients include Quikfeet Running Shoes Company. Unless
Quikfeet has violated securities law, the contents of Pace’s 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 Quikfeet’s consent).
c. only with Quikfeet’s consent.
d. under any circumstances.
Dirk, an employee of Ergonomic Elevators, Inc., pays Ferbie, an employee of
Ergonomics’ competitor G-Force Risers Company, for a secret G-Force pricing
schedule. This is
a. an effective marketing strategy.
b. commercial bribery.
c. creative legal bookkeeping.
d. money laundering.
Recycled Sales Company and Standard Purchasing Corporation enter into a contract for
a sale of goods. To be enforceable, the contract should be in writing if the goods are
valued at more than
a. $5.
b. $15.
c. $50.
d. $500.
Smalltown, Alabama is incorporated by the government. Smalltown is
a. a foreign corporation.
b. a public corporation.
c. a private corporation.
d. an alien corporation.
Garden Tool Company makes hedge trimmers. Troy is injured while using a Garden
Tool trimmer and sues the company for product liability based on negligence. To win,
Troy must show that
a. Garden Tool did not use due care with respect to the trimmer.
b. Garden Tool misrepresented a material fact regarding the trimmer.
c. Troy was experienced in the use of trimmers.
d. Troy was in privity of contract with Garden Tool.
A franchise agreement between Simple Software Company and Total Game, Inc., is
silent on a time for termination of the franchise. Simple may
a. never terminate.
b. terminate at any time.
c. terminate on reasonable notice.
d. terminate on three days notice.
Instead of setting up a business to market her own products, Krissy considers entering
into a distributorship franchise with Little Breweries Corporation. 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.
To obtain a contract with the Chinese government, Bammo Engineering Corporation, a
U.S. firm, gives a Chinese official a sport utility vehicle. This may violate
a. the act of state doctrine.
b. the doctrine of sovereign immunity.
c. the Foreign Corrupt Practices Act.
d. the principle of comity.
Consumer Credit, Inc. (CCI), lends $1,000 to Joe. Kay acts as Joe’s surety. If Kay pays
the loan, she gets
a. any right that CCI had against Joe, but not a right to be reimbursed by Joe.
b. a right to be reimbursed by Joe, but not any right that CCI had against Joe.
c. any right that CCI had against Joe and a right to be reimbursed by Joe.
d. none of the choices.
Ben files a suit in a federal district court against Cathy. Cathy loses the suit, appeals to
the U.S. Court of Appeals for the Second Circuit, and loses again. Cathy asks the
United States Supreme Court to hear the case. The Court agrees to hear the case. This
means that
a. at least four justices approve of hearing the case.
b. Cathy’s petition does not raise a possibility of an important constitutional question.
c. the amount in controversy in Cathy’s suit is greater than $100,000.
d. the Court feels that the lower courts’ judgments were erroneous.
Peter offers to pay Quik Delivery (QD) $50 if it picks up and delivers to him a package
of business documents from Rico within thirty minutes. QD can accept the offer only
by meeting the deadline. If QD performs as directed, these parties will have
a. a bilateral contract.
b. a trilateral contract.
c. a unilateral contract.
d. no contract.
Jamal signs a lease with Kelvin to occupy a house on Leech Lake in Minnesota for the
summer. Jamal’s tenancy is
a. a fixed-term tenancy.
b. a periodic tenancy.
c. a tenancy at sufferance.
d. a tenancy at will.
Richard is an adult. He enters into a contract to sell sixteen-year-old Jane his car for
$3,000. The next day Richard receives 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.
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.
On January 10, Winchester Pet Supplies orders fifty small dog collars from Quality
Collars, Inc. to be delivered by January 15. On January 13, Quality Collars tenders fifty
large dog collars. Winchester Pet Supplies rejects the shipment. Quality Collars has
a. no right to cure.
b. until January 15 to cure.
c. until the end of the business day on January 13 to cure.
d. unlimited time to cure.
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.
Marquis Company’s liabilities exceed its assets, but the firm’s employees falsify its
books to reflect a positive net worth. Marquis hires Nan & Ollie, an accounting firm, to
prepare a balance sheet, which is certified to show a positive net worth. Pure Credit
Corporation relies on the balance sheet to make a loan to Marquis. When the firm
defaults, Pure Credit files a suit against Nan & Ollie. Under the Ultramares rule, the
accounting firm is most likely
a. liable because Nan & Ollie owed a duty of care to all third parties.
b. liable because Nan & Ollie owed a duty of care to Marquis.
c. liable because Nan & Ollie owed a duty to any foreseeable user.
d. not liable because Nan & Ollie and Pure Credit were not in privity.
Wilson buys a promissory note from Oli. The note is due on December 5. December 5
is a Sunday. The note is
a. payable anytime the week of December 6.
b. payable December 6.
c. payable on December 5 only.
d. defective.
Certain debtors may not qualify to have all debts discharged in bankruptcy.
If no harm results from an allegedly negligent act, there is no liability.
In interpreting a commercial agreement, a court will assume that the usage of trade was
taken into account when the agreement was phrased.
If there is no definite period stated, a firm offer by a merchant is irrevocable without the
necessity of consideration for up to six months.
Sellers or lessors are liable only for products that are reasonably dangerous.
A party can challenge an administrative regulation as so irrational as to be arbitrary and
capricious.
The UETA does not require the use of security procedures to verify changes to
electronic documents and to correct errors.
Individuals who are arrested must be informed of certain constitutional rights.
The First Amendment protects corporate political speech.
A court’s review of an arbitrator’s award may be restricted.
In choosing a form of business organization for a new enterprise, important factors
include the liability of the owner.
Administrative law is a source of American law that is comprised of statutes.
A default occurs when a debtor fails to pay a creditor as promised.
There is no limit to the amount that can be taken from a debtor’s weekly take-home pay
through garnishment.
A contract entered into under undue influence is voidable.
In a limited partnership, a limited partner has full responsibility for the partnership and
for all its debts.
The duty of good faith is imposed on the parties involved in commercial contracts by
the Uniform Commercial Code.
Oral evidence of otherwise clear terms in a contract can be introduced at a trial to
contradict those terms.
On a partner’s dissociation, his or her duty of loyalty to the partnership ends.