Like other manufacturers and sellers, Happy Household Products Company packages
its products with labels. Under federal law, such labels must be
a. accurate and use easily understood words.
b. bright and feature eye-catching colors.
c. graphically distinctive and well-designed.
d. interesting and revealing to the average consumer.
Eve wants to file a suit against Fred. For a court to hear the case
a. Fred must agree.
b. the court must have jurisdiction.
c. the court must issue a deposition.
d. the parties must own property.
When applying the rule of reason to determine whether an agreement violates Section 1
of the Sherman Act, a court will NOT consider
a. the purpose of the agreement.
b. the parties’ market ability to implement the agreement.
c. the effect of the agreement on international trade.
d. the potential effect of the agreement on competition.
Tyro has the right to drive across Ula’s land, which is next to Tyro’s property, to reach
an access road. Tyro’s right is
a. a license.
b. an easement.
c. a profit.
d. the power of eminent domain.
Frawsty Corporation distributes beverages in the greater Northwest. Frawsty’s board of
directors can delegate some of its functions to
a. Frawsty’s incorporators.
b. Frawsty’s officers.
c. Frawsty’s shareholders.
d. no one.
Ben allows Cody to store his trailer on Ben’s property for $20 a month while Cody is
out of town on a job for Plain States Construction, his employer. The bailor is
a. Ben.
b. Cody.
c. Plain States.
d. no one.
Sari buys a new sport utility vehicle (SUV) from Terrific Cars & Trucks, Inc. The most
important factor in determining whether an express warranty is created is whether
a. Sari expresses to Terrific what she wants warranted.
b. Sari’s desire for the SUV becomes part of her motivation to deal.
c. Terrific expresses to Sari what it expects of its customers.
d. Terrific’s promise becomes part of the basis of the bargain.
Timber Products, Inc., and Walt, a consumer, enter into a contract for a sale of plywood.
If the contract includes a clause that is perceived as grossly unfair to Walt, its
enforcement may be challenged under the doctrine of
a. good faith.
b. square dealing.
c. the mirror image rule.
d. unconscionability.
Retail Music, Inc., offers to buy from Super Products Corporation (SPC) 1,000 blank
CDs of a certain brand. Without notifying Retail, SPC timely ships CDs of a different
brand. This shipment is
a. an acceptance of the offer and a breach of the parties’ contract.
b. an acceptance of the offer and a fulfillment of the parties’ contract.
c. a refusal of the offer and a breach of the parties’ contract.
d. a refusal of the offer and a fulfillment of the parties’ contract.
The United States and other members of a certain organization agree to grant normal
trade relations status to each other with regard to imports and exports. This organization
is
a. the Convention on Contracts for the International Sale of Goods.
b. the International Export-Import Bank.
c. the United Nations.
d. the World Trade Organization.
Myron is an employee of Woody. Either party can terminate the employment
relationship at any time for any reason without liability. With respect to the
employment-at-will doctrine, this is
a. an example of the doctrine.
b. an exception based on contract theory.
c. an exception based on public policy.
d. an exception based on a statute.
In business deals, Fiona, the chief executive officer of Glazed Donuts, Inc., follows
duty-based ethical standards. These are most likely derived from
a. a corporate ethics code.
b. a cost-benefit analysis.
c. philosophical reasoning.
d. the law.
Dino and Elle engage in a transaction that involves e-documents. The E-SIGN Act
applies if those documents include
a. a divorce decree or a prenuptial agreement.
b. a health-insurance termination.
c. an agreement subject to Article 2 of the Uniform Commercial Code.
d. an eviction or a foreclosure.
Standard Purchasing Corporation and Total Sales, Inc., enter into a partnering
agreement. Under a partnering agreement, parties agree
a. in advance to terms that apply to their future e-transactions.
b. to become partners.
c. to conduct transactions solely in electronic form.
d. to resolve all disputes without involving a third party.
Fiona goes to GreatNuTech, a consumer electronics store in Houston, Texas, to buy a
pocket calculator. Ilsa, the salesperson, sells Fiona a top-of-the-line home theater, which
Fiona does not need and cannot afford. This is a violation of
a. no federal or state law.
b. the Consumer Sales Act.
c. the Texas Deceptive Trade Practices Act.
d. the Truth-in-Lending Act.
John arranges a Bingo tournament at his house to raise money for the local nursing
home. The Bingo tournament is
a. illegal because it is a form of gambling.
b. legal if John lives in a state that allows games of chance for charitable purposes.
c. illegal because gambling is never allowed on private property.
d. legal as long as John is unaware of any statutes against games of chance.
Grant wants to transfer the ownership of his warehouse to Hal by deed. To do so
requires
a. the grantee’s signature only.
b. the grantor’s signature only.
c. the grantee’s and the grantor’s signatures.
d. a judge’s signature.
May tries to start her new car with no success. She yells that she will sell the car to
anyone for $10. Nick, a passerby who owns Nick’s Pre-owned Autos, hands May $10.
This is
a. a valid acceptance because May is seriously frustrated.
b. a valid acceptance because Nick is a car dealer.
c. not a valid acceptance because May does not seriously intend to sell.
d. not a valid acceptance because Nick is a car dealer.
Mona offers Ned, a building inspector, money to overlook the violations in her new
warehouse. Ned accepts the money and overlooks the violations. Mona is charged with
the crime of bribery. The crime occurred when
a. Mona decided to offer the bribe.
b. Mona offered the bribe.
c. Ned accepted the bribe.
d. Ned overlooked the violations.
Big Dog Security Service, Inc. orally agrees to provide security services for NorthGate
Mall for as long as NorthGate Mall requires them. This contract is enforceable by
a. Big Dog Security only.
b. NorthGate Mall only.
c. either party.
d. neither party.
Newt is considering forms of business organization for Newton Design, an architectural
firm. An advantage of a limited liability partnership is that partners can avoid personal
liability for
a. their own wrongful acts.
b. only other partners’ malpractice.
c. only partnership obligations that exceed capital contributions.
d. only partnership obligations that fall within capital contributions.
Ralph signs an instrument promising to pay a total of $10,000 to Martha in $1,000
monthly installments with the final payment being made on August 1. Ralph
unexpectedly inherits $10,000 from his aunt on May 15. Ralph may
a. not complete his $10,000 payment before August 1.
b. complete his $10,000 payment before August 1.
c. increase his monthly payments by five percent, but not more.
d. increase his monthly payments by ten percent, but not more.
Scott, a State Bank employee, deposits into his account checks that are given to him by
bank customers to deposit into their accounts. This is
a. embezzlement.
b. larceny.
c. money laundering.
d. no crime.
Jim organized, and owns and operates, Jim’s Landscaping Service in the simplest form
of business organization. This is
a. a limited liability partnership.
b. a limited liability company.
c. a partnership.
d. a sole proprietorship.
Larry borrows money from Joan. To use a writ of execution as a remedy, Joan must first
a. be unable to collect the amount of a judgment against Larry.
b. be unable to redeem Larry’s exempt property before a sale will occur.
c. notify Larry in writing (in a “writ”) of her intent.
d. obtain and maintain possession of Larry’s property.
Kelly is injured when she slips and falls on Layla’s sidewalk. To determine whether
Layla owed a duty of care to Kelly, Layla is subject to the standard of
a. a realistic person.
b. a reasonable person.
c. a recognizable person.
d. a reliable person.
Gail owes $5,000 in unpaid taxes. Using the back of an old t-shirt, she executes an
instrument for $5,000 that otherwise meets the requirements for negotiability. This
instrument is likely
a. negotiable.
b. nonnegotiable, because an instrument must be on paper.
c. nonnegotiable, because a t-shirt is not sufficiently permanent.
d. nonnegotiable, because the government does not appreciate it.
Cara and Dru are officers of EZ Trucking Corporation. As corporate officers, the rights
of Cara and Dru are
a. determined by their employment contracts.
b. specified in state corporation statutes.
c. the same as those of the directors.
d. the same as those of the shareholders.
Lia works for Media Marketing Company. Her job includes putting ‘spin” on the firm’s
successes and failures. In this context, ethics consist of
a. “bad” versus “good” publicity.
b. questions of rightness and wrongness.
c. the firm’s quarterly revenue.
d. whatever is legal.
Grey rents an apartment to Hugh, who retains possession of the apartment after the
lease expires without making any payments of rent. This is
a. a periodic tenancy.
b. a tenancy at sufferance.
c. a tenancy at will.
d. a fixed-term tenancy.
Sharon, the human resources director for Tempo Corporation, attempts to comply with
the law in dealing with applicants and employees. One of the challenges Sharon faces is
that the legality of an action is
a. always clear.
b. never clear.
c. sometimes clear.
d. usually clear.
Milo files a suit against Nick in an Ohio state court, noting that Nick operates a Web
site through which Ohio residents have done substantial business with him. The court is
most likely to have jurisdiction over Nick if Milo’s claim arises from
a. anything an Ohio resident has done.
b. Nick’s Web site activities.
c. nothing an Ohio resident has done.
d. something other than Nick’s Web site.
Fiona owns one share of stock in GR8 Boards Corporation, as evidenced by a stock
certificate. Fiona loses the certificate. Her ownership of the stock is
a. forfeited immediately.
b. forfeited within ten days of a third party’s claim to ownership.
c. forfeited within thirty days if she cannot find the certificate.
d. not affected.
A warranty against infringement is a promise by the seller that the product is free from
any patent, trademark, or copyright claims of a third person.
The 1995 Federal Trademark Dilution Act allowed trademark owners to bring suit in
federal court for trademark dilution.
Counteradvertising is when the FTC requires a company found guilty of deceptive
advertising to advertise anew to inform the public about earlier misinformation.
Unsecured creditors do not have a vote to confirm a Chapter 13 plan.
Administrative agencies can obtain information through on-site searches.
Shippers Dispatch Corporation orders office equipment from Office Outfitters, Inc.,
which has an unperfected security interest in the equipment until it is paid for.
Meanwhile, Shippers Dispatch takes out a loan from Capital Credit, Inc., subject to a
security interest in Shippers Dispatch’s building and equipment, which Capital perfects.
Shippers Dispatch files a bankruptcy petition under Chapter 7. If the petition is granted,
in what order will Shippers Dispatch’s creditors be paid?
Bribing foreign officials to obtain favorable business contracts is NOT a crime.
A partnership may be sued.
With an interest-bearing instrument, it is necessary to know the exact interval during
which the interest will accrue.
Writers acquire ownership of their work through production.
An employer can refuse to bargain collectively with an elected employee representative.
One purpose of quasi contracts is to prevent unjust enrichment of one party at the
expense of another.
The First Amendment protects corporate political speech.
A railroad may be a Chapter 7 debtor.
In May, Alex agrees to work for Beta Sales Company at $800 per week for a year
beginning June 1. The following January, Competitive Merchandising, Inc., offers Alex
the same work at $900 per week. Alex tells Beta about the offer. Beta offers to enter
into a new contract with Alex at $875 per week. If Alex agrees, is the new Beta contract
enforceable? Why or why not?
Federal agencies must prepare guides that explain in “plain English” how small
businesses can comply with federal regulations.
To qualify as a commercially reasonable sale, a secured party’s sale of collateral, after
default and repossession, must be private.