Screen Perfect, Inc., and TV Stores enter into a contract for a sale of high-definition
television sets. Screen Perfect ships goods that do not exactly conform to the contract in
some details. TV Stores
a. cannot reject the entire shipment.
b. can reject the entire shipment.
c. must accept the entire shipment.
d. must reject the entire shipment.
Lew angrily accuses Mandy, a broker with New Financial Services, of fraudulently
inducing him to invest in Open Pit Oil Company, whose wells are dry. The reliance that
gives rise to liability for fraud is normally based on a statement of
a. emotion.
b. fact.
c. opinion.
d. puffery.
Ike pushes Joan, who falls and breaks her arm. Ike is liable for the injury
a. if Ike intended to push Joan.
b. only if Ike did not intend to break Joans arm.
c. only if Ike had a bad motive for pushing Joan.
d. only if Ike intended to break Joans arm.
Egan is a director of First Realty Corporation. As a director, Egan can act as an agent to
bind First Realty
a. in all circumstances.
b. in no circumstances.
c. to any contract in which Egan does not have a conflict of interest.
d. to any contract that represents a corporate opportunity for First Realty.
Maple Products Corporation is a public company, which New Hampshire regulates and
in which Orin invests. The Sarbanes-Oxley Act of 2002 introduced direct federal
corporate governance requirements to
a. public companies.
b. private investors.
c. state regulators.
d. none of these choices.
The government of Japan sets a limit on the amount of rice that can be imported from
the United States. This is
a. a dumping duty.
b. an antidumping duty.
c. a quota.
d. a tariff.
Gladys is a shareholder of Frozen Yogurt, Inc. As a shareholder, Gladys must approve
a. amending the bylaws.
b. declaring a corporate dividend.
c. hiring a chief executive officer.
d. issuing additional shares.
Standard Corporation can not claim a trademark in the phrase “Quality Is Standard if
the phrase
a. has a secondary meaning.
b. is descriptive.
c. is generic.
d. means nothing.
Sweet Candy, Inc., and Tasty Treats Stores enter into a contract for a sale of candy.
Sweet, a merchant who deals in goods of the kind sold, makes express warranties in
connection with the sale. Under the UCC, at the time a contract is formed, an express
warranty can be disclaimed or modified
a. by clear, conspicuous language called to the buyers attention.
b. by implied affirmations of fact relating to the goods.
c. in any way that the seller sees fit for the ordinary purpose.
d. in no way.
Rikki sells shares in Sunn Energy Company to Telsa. Rikki does not deliver the actual
possession of the shares to Telsa, but gives her the key to a safety-deposit box in Unity
Bank in which the stock certificates are locked. Presenting the key is
a. accession.
b. constructive delivery.
c. confusion.
d. conversion.
Home Delivery Corporation and Interstate Transport, Inc., sign an agreement 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.
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.
A specific grade of corn that fills BioFuel Cooperatives silo is fungible. This means that
the corn is
a. alike naturally or by agreement or trade usage.
b. fundamentally different.
c. fundamentally edible.
d. perishable.
Amigos, Ltd., and Bueno, S.A., are Chilean firms. Amigos owns a majority of the
shares of Bueno. The government of Chile owns a few shares of Amigos. Under the
decision in Dole Food Co. v. Patrickson, parties who are immune from suit in U.S.
courts under the Foreign Sovereign Immunities Act, as instrumentalities of foreign
states, would include
a. Amigos and Bueno.
b. neither Amigos nor Bueno.
c. only Amigos.
d. only Bueno.
Arnie posts online a note that “I have good pix of child & me with a link to several
pictures of minors engaged in sex. Arnie is charged with violating a statute that makes it
a crime to distribute material intended to make others believe it is child pornography.
He argues that the statute is unconstitutional. The court is most likely to hold that the
statute is
a. unconstitutional because it criminalizes speech.
b. unconstitutional because it is overbroad.
c. unconstitutional because it is impermissibly vague.
d. valid because it does not prohibit a substantial amount of protected speech.
Olsen Grocery Company files a suit against Pickle Products, Inc. Pickle responds that
even if Olsens statement of the facts is true, according to the law Pickle is not liable.
This is
a. a counterclaim.
b. a motion for judgment on the pleadings.
c. a motion for summary judgment.
d. a motion to dismiss.
Machine Corporation requires its employees to have a high school diploma, claiming a
definite connection between a high school education and job performance. In a suit
against Machine Corporation under Title VII, this requirement is shown to have a
discriminatory effect. The employer has
a. an after-acquired evidence defense.
b. a bona fide occupational qualification defense.
c. a business necessity defense.
d. no defense.
Mona, an accountant, prepares for NuTech Corporation a financial statement that omits
a material fact. The financial statement is included in NuTechs registration statement,
which Pam reads. Pam buys NuTech stock. Under Section 11 of the Securities Act of
1933, for Mona to be liable for the omission, Pam must show that
a. Pam relied on the omission.
b. Pam suffered a loss on the stock.
c. Pam knew about the omission before making her purchase.
d. the omission had no causal connection to her loss.
Fact Pattern 25-1
Ruben is a shareholder of Speed Bikes Company (SBC). When the directors fail to
undertake an action to redress a wrong suffered by SBC, Ruben files a suit on the firms
behalf.
Refer to Fact Pattern 25-1. Any damages recovered by Rubens suit will normally go to
a. Ruben.
b. SBC.
c. SBCs directors.
d. the state in which SBC is incorporated.
Hi-Tech Company contracts to sell fiber optic cable to Internet Services, Inc. Hi-Tech
may bring an action to recover the purchase price and incidental damages if Internet
a. accepts the cable and pays for it.
b. accepts the cable but does not pay for it.
c. rejects the cable.
d. revokes acceptance of the cable.
Bette backs out of City Parking Garage, colliding with Dills car. Dill may recover
$7,500 to cover the cost of the repairs if Bette failed to act as
a. a blameless person.
b a faultless person.
c. a reliable person.
d. a reasonable person.
Fact Pattern 10-3
Odell and Paula sign a contract for the sale of Odells Pizza Parlor to Paula. The parties
intend their written contract to be a final statement of most, but not all, of the terms of
their agreementOdell must first buy the building from Quin, after which Odell and
Paula will negotiate a final price.
Refer to Fact Pattern 10-3. Paula later disputes some of the provisions of the deal with
Odell. If the dispute results in litigation, a court will most likely admit evidence of
a. ambiguous additional terms.
b. consistent additional terms.
c. contradictory additional terms.
d. fraudulent additional terms.
Corbin, a partner in Doctors Medical Clinic, applies for a loan with Evermore Bank
allegedly on Doctors behalf but without the authorization of the other partners.
Evermore knows that Corbin is not authorized to take out the loan. Corbin defaults on
the loan. Liability for its unpaid amount is imposed on
a. Corbin and Doctors, jointly.
b. Corbin only.
c. Doctors only.
d. Evermore only.
Svetlana, a fifty-five-year-old member of a racial minority with a disability, believes
that she is a victim of employment discrimination. Potentially the most widespread
form of discrimination is based on
a. age.
b. disability.
c. gender.
d. race.
Fact Pattern 18-2
General Leasing Company (GLC) buys equipment for use as inventory, borrowing $1
million from Helpful Finance Corporation for a security interest in the equipment. The
next day, GLC borrows $513,000 from Interstate Bank, also for a security interest in the
equipment. GLC defaults on the loans.
Refer to Fact Pattern 18-2. Suppose that two weeks after GLC takes possession of the
equipment, Helpful and Interstate file financing statements, with Interstate filing first.
In that circumstance, the party with priority to the equipment is
a. GLC.
b. Helpful and Interstate proportionately.
c. Helpful only.
d. Interstate only.
Genuine Seed Company and Hillside Farmers Cooperative enter into a contract for a
sale of hybrid seeds. Under the perfect tender rule, Genuine Seed must ship or tender
seeds to Hillside that
a. approximately conform to all of the details of the contract.
b. entirely conform to the contract except in one or two details.
c. exactly conform to the contract in every detail.
d. substantially conform to the contract in most details.
Todd indorses a check, “Pay to Interstate Trucking if they deliver the lumber by May 1,
2013. This is
a. a blank indorsement.
b. a qualified indorsement.
c. a restrictive indorsement.
d. a special indorsement.
Fact Pattern 9-1
Daves Hobby Town and Evas Yarn Shoppe are adjacent stores with adjoining parking
lots. Dave offers Eva a discount on purchases from Daves store if Eva will not tow the
cars of Daves customers who park in Evas lot.
Refer to Fact Pattern 9-1. Evas forbearance from towing is legally sufficient consid-
eration
a. because it is a promise of something of value.
b. only if Daves customers park in Evas lot.
c. only if Evas customers cannot park in her lot because it is full.
d. under no circumstances.
Toni files a suit against Universal Media Corporation for defamation. Actual malice
must be shown for recovery of damages if Toni is
a. a corporate officer.
b. a non-employee.
c. a private individual.
d. a public figure.
In Smartphone Games Inc.s suit against Thermopylae Apps Corporation, Thermopylae
seeks to discover electronically stored information (ESI) that should be in Smartphones
possession. If Smartphone did not preserve the ESI despite a clear duty to do so, the
company should most likely
a. ask the court to sanction Thermopylae for an unreasonable request.
b. reconstruct the ESI to the best of its ability.
c. refuse to provide the ESI on the ground that it is confidential.
d. settle the dispute.
Livewire Company and Kitchen Products, Inc., sign a document that states Livewire
agrees to design a Web site for Kitchen Products, which agrees to pay for the service.
Livewire and Kitchen Products have made
a. an express contract.
b. an implied contract.
c. a quasi contract.
d. no contract.
As a judge, Potter applies common law rules. These rules develop from
a. administrative regulations.
b. court decisions.
c. federal and state statutes.
d. proposed uniform laws.
Patent protection begins on the date that a patent is issued.
An accountant is not liable for a misleading statement that affects the price of a security
if the accountant acted in good faith.
A certificate of deposit is a type of draft.
An instrument payable to two persons jointly requires the indorsement of only one of
the payees for negotiation.
An insureds lack of an insurable interest is an absolute defense against payment.
A failure to follow generally accepted accounting principles and generally accepted
auditing standards is proof of a lack of due diligence.
The minimal acceptable standard for ethical behavior is compliance with the law.
Even after a tenant sublets leased premises, the tenant may be obligated to pay rent.
A bankruptcy court may deny a discharge based on the debtors conduct.
In some circumstances, a shareholder may petition a court to have the corporation
dissolved.
If a contract specifies a certain carrier, a substitution of a different carrier for any reason
breaches the contract.
The establishment clause of the U.S. Constitution prohibits the federal government
from establishing an official religion.
The Bill of Rights confers absolute rights, not subject to interpretation by the United
States Supreme Court.
A third partys right to control the details of performance of a contract indicates that the
third party is an intended beneficiary.
The UETA applies to an e-transaction unless the parties “opt out.
The board of directors of each corporation involved must approve a share exchange.
Accountants and other professionals may not be held liable for negligence in the
performance of their service.
In most courts, auditors cannot be held liable to third parties for negligence in the
performance of their duties.
Payment of the principal obligation will not discharge the surety from the obligation.
To be valid, a security agreement must contain a description of the collateral.