Daria writes a check for $100 drawn on Village Bank and presents it to Fast Cash, Inc.,
for payment. If the check is not backed by sufficient funds, Daria may be prosecuted for
a. forgery.
b. fraud.
c. negligence.
d. nothing.
Without a permit, Timberline Plywood Company discharges its untreated wastewater
into Urban City’s storm drainage pipes, which empty into Valley Creek. Under the
Clean Water Act, this discharge is most likely
a. a violation.
b. not a violation because the company does not have a permit.
c. not a violation because water is not a stationary source.
d. not a violation because a storm drainage pipe is not a point source.
Qang and other foreign citizens allege human rights violations committed overseas by
the government of Burma on behalf of Railway Construction Company, a U.S. firm. To
seek redress for their injuries in a U.S. court, these citizens can
a. allege antitrust injuries under the Sherman Act.
b. bring civil suits under the Alien Tort Claims Act.
c. file criminal complaints under Title VII of the Civil Rights Act.
d. do nothing.
Hi-Five Aero Corporation is required to register its securities under Section 12 of the
Securities Exchange Act of 1934. Section 14(a) of the act regulates
a. the declaration of dividends by Hi-Five’s board of directors.
b. the later re-registration of Hi-Five’s securities.
c. the short-swing activities of Hi-Five’s insiders.
d. the solicitation of proxies from Hi-Five’s shareholders.
U.S. Cars, a U.S. firm, owns property in Argentina. The government of Argentina seizes
the property. U.S. Cars claims that this is confiscation. The government of Argentina
claims that it is expropriation. The burden of proof lies with
a. the U.S. government.
b. the government of Argentina.
c. U.S. Cars.
d. the U.S. Supreme Court.
On Monday, Michelle deposits in her account at Fiscal Bank a local check for $500.
After 5:00 p.m. on Friday, from these funds, Michelle can withdraw no more than
a. $100.
b. $400.
c. $500.
d. $600.
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.
Big Screen Video Corporation sells high-definition television sets. Under most circum-
stances, Big Screen Video will be presumed to have warranted that its title to the TVs is
a. the same as each brand’s name.
b. none of the choices’a warranty of title is not presumed.
c. good and valid.
d. the best that money can buy.
Milo buys an all-terrain-vehicle (ATV) from No-Limit Toys, Inc., on credit but makes
no payments on the account. Odell, the owner of No-Limit Toys, calls Milo at home on
a Monday morning at three a.m. Odell represents himself as PayNow Collection
Agency and demands payment “or else.” The next day, Odell sends Milo notice that he
has thirty days in which to request verification of the debt and that its payment will be
suspended during that time, but that if he does not pay the full amount due within five
business days, Odell will arrange for the “destruction of Milo’s good credit rating.”
Which laws has Odell violated, if any, and in what ways?
Jane enters into a contract with Jill to provide 100 roses for a dinner party. Jane fails to
deliver the roses. Jill initiates a suit against Jane, asking the court to order Jane to
deliver the roses. Jill is
a. the plaintiff.
b. the defendant.
c. the binding authority.
d. the persuasive authority.
Jen agrees to buy Kev’s Dirt Bike business on the express condition that Valley Credit
Union approves the financing. This approval is
a. a concurrent condition.
b. a condition precedent.
c. a condition subsequent.
d. an implied condition.
Bild-It-Rite Corporation is a public company that is preparing to issue securities that do
not qualify for an exemption from registration. This means that Bild-It-Rite must
a. file a registration statement with the SEC.
b. issue the securities through an online registration site.
c. refrain from issuing the securities to unregistered investors.
d. register the securities with a national stock exchange.
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.
Flynn, an accountant, helps Grange Supply Company prepare and file a false federal
corporate income tax return. Under the Internal Revenue Code, this is
a. a felony punishable by a fine and imprisonment.
b. a felony punishable only by a fine.
c. a misdemeanor punishable only by a fine.
d. a civil violation subject to a liability suit but not a crime.
Clean Health Insurance, Inc. sends Kathy a health insurance termination. The health
insurance termination is
a. governed by the E-SIGN Act.
b. not governed by the E-SIGN Act.
c. governed by Article 2 of the UCC.
d. governed by Article 2A of the UCC.
Lovett County Bank offers to lend money to Kino, the owner of Java Stop, at 15 percent
interest. Before Kino accepts, a state statute is enacted prohibiting loans at rates greater
than 12 percent. Kino and the bank have
a. have a contract for a loan at 15 percent interest.
b. have a contract for a loan at 12 percent interest.
c. have a contract for a loan at 0 percent interest.
d. no contract for a loan.
Sally’s Sweet Fruits contracts with Fruits to You, Inc. for a delivery of two hundred
pounds of strawberries to be delivered by Keep Kool Trucking, a trucking company
with refrigerated trucks. On the day of delivery, the refrigeration units on Keep Kool’s
trucks are not working. Fruits to You
a. may ship the goods to Sally’s using another trucking company with refrigerated
trucks.
b. must refund Sally’s money and cancel the contract.
c. must wait to ship the strawberries until Keep Kool has fixed its trucks.
d. must ship the goods through a different carrier and pay Sally incidental damages.
Luke is an owner of Lucky Luke’s Corporation. Luke uses the corporate entity of Lucky
Luke’s to perpetuate fraud. In this case, a court is likely to expose Luke to personal
liability by
a. piercing the corporate veil.
b. issuing a de facto judgment.
c. issuing a de jure judgment.
d. issuing a ultra vires judgment.
The payment of Waldo’s debt to Main Street Bank is guaranteed by Waldo’s personal
property. This is governed by
a. the Uniform Commercial Code.
b. the Federal Trade Commission.
c. the U.S. Constitution’s commerce clause.
d. the Bankruptcy Reform Act of 2005.
Fact Pattern 22-2
24-Hour Credit Corporation issues high-cost and high-fee mortgage products to people,
including Benny, who could not easily obtain credit under other loan programs.
Refer to Fact Pattern 22-2. Under federal law, disclosures with respect to one of
24-Hour Credit’s loans must be provided
a. a certain number of days after the loan is finalized.
b. a certain number of days before the loan is finalized.
c. at the same time at which the loan is finalized.
d. at whatever time is most rational and appropriate.
Flip is a member of Great States Trucking LLC. Flip’s relationship to Great States ends,
but the firm continues to do business. This is
a. dissociation.
b. dissolution.
c. winding up.
d. wrongful.
Bernard is an expert on exotic flowers. Fine Floral Fixtures, Inc. (FFF) hires Bernard to
order exotic flowers from various greenhouses. Bernard does not bother to examine the
quality of the flowers he purchases on behalf of FFF. Bernard has breached
a. the duty of performance.
b. the duty of loyalty.
c. no duty.
d. the duty of notification.
Levi’s Toy Store orders one hundred board games from Big Board Games Warehouse.
When the games are delivered, they are all missing pieces. Levi’s Toy Store rejects the
shipment. Big Board Games wants to cure. Big Board Games must
a. promptly notify Levi’s Toy Store of the intent to cure.
b. pay Levi’s Toy store a cure fee.
c. send a truck to pick up the nonconforming goods before the end of the business day.
d. create a new contract with Levi’s Toy Store.
A Rhode Island state statute requires machinery in industrial plants to include automatic
shut-off switches accessible to each employee working on the machine. Steel
Company’s equipment does not have the switches. Trudy, a Steel employee, suffers an
injury that an accessible shut-off switch would have prevented. Trudy’s best theory for
recovery is
a. assault.
b. assumption of risk.
c. invasion of privacy.
d. negligence.
Forest & Field Company makes and leases a backhoe to Zac. Due to a defect
attributable to Forest & Field’s negligence, Zac is injured in an accident in which his
neighbor Aaron is also hurt. In a product liability suit based on negligence, Forest &
Field may be liable to
a. Aaron only.
b. no one.
c. Zac and Aaron.
d. Zac only.
Bob operated a pet grooming shop under a franchise agreement with Clean Pets Corp
(CPC). The agreement allowed CPC to terminate the franchise if Bob was fined for
cruelty to animals. After an investigation initiated by a customer complaint, Bob was
fined for cruelty. CPC terminated the franchise. Bob filed a suit against CPC for
wrongful termination. The court will most likely rule in favor of
a. Bob, because CPC had no good cause to terminate the franchise.
b. Bob, because the fine for cruelty was based on a customer complaint.
c. CPC, because a franchisor can terminate a franchise at any time.
d. CPC, because the franchise was terminated for good cause.
Orange Manufacturing Corporation (OMC) orders twelve job-training and on-the-job
safety DVDs from Plum Productions, Inc., which delivers the disks to OMC’s plant.
This is most likely
a. a gift.
b. a lease of goods.
c. a sale of goods.
d. a service contract.
Under the E-SIGN Act, Phillip may use an e-signature in all of the following instances
except
a. opening an account with a financial institution.
b. obtaining a mortgage.
c. buying insurance.
d. signing his will.
Billy opens a bicycle shop that sells an innovative new kind of bicycle. He decides to
call the bicycles “Bicycles.” Billy extensively markets his product, has a high sales
volume and becomes well known for selling Bicycles. The term Bicycle
a. is automatically protected against trademark infringement.
b. receives no protection against trademark infringement.
c. can be registered as a trademark to obtain protection against trademark infringement.
d. can be registered as a certification mark.
Mary Kate Corporation allows Ashley Company to use Mary Kate’s trademark as part
of Ashley’s domain name. This is
a. a license.
b. a likelihood of consumer confusion.
c. cybersquatting.
d. trademark dilution.
Franzea is injured in an accident caused by Gentry. Gentry agrees to pay Franzea
$2,500 if she agrees to release him from further liability. She agrees. If Franzea’s
damages ultimately exceed $2,500, she can collect
a. the balance from Gentry in a breach-of-contract suit.
b. the balance from Gentry in a tort suit.
c. the balance from Gentry on the ground of unforeseen difficulties.
d. nothing more from Gentry.
Yokio, Ltd., and Zeno, S.A., transact an international sale of goods. At the request of
these parties, a court in Portugal resolves a dispute between them. A U.S. court will
most likely honor the judgment
a. if it is consistent with U.S. laws and public policy.
b. if it is consistent with Portuguese laws and public policy.
c. if it does not benefit the U.S. to deny it.
d. under no circumstances.
RiteMade Machinery, Inc., designs, makes, and sells a drill press. Steel Equipment
Company copies the design without RiteMade’s permission. Steel’s conduct is
actionable provided that
a. consumers are confused.
b. Steel’s conduct is intentional.
c. Steel’s conduct reduces the value of RiteMade’s design.
d. RiteMade’s design is patented.
Hoppy, who works as an employee for Imperial Power Corporation, suffers an injury in
an accident. Hoppy will be compensated under state worker’ compensation laws
a. only if the injury occurred during working hours.
b. only if the injury occurred off the job.
c. only if the injury occurred on the job.
d. whenever and wherever the injury occurred.
Secure Investments, Inc., a U.S. firm, expands into international markets through a joint
venture. In this situation, Secure owns
a. all of the operation, and its profits and liabilities.
b. all of the operation, and none of its profits and liabilities.
c. none of the operation, and none of its profits and liabilities.
d. part of the operation, and shares its profits and liabilities.
Before a seller can have an insurable interest in goods, the goods must be identified to a
contract.
State law may mandate that an incontestability clause be included in an insurance
policy.
Creative Solutions Corporation (CSC) sells business application softwareaccounting
and bookkeeping programs, blank business forms, inventory control functions, and the
likein different combinations, in different packages, at different prices, downloadable
online. To complete a deal, a purchaser clicks on a button that, with reference to certain
terms, states, “I agree.” What is this sort of agreement called? Do the parties have a
binding, enforceable contract that includes the terms? Explain.
An expression of opinion will usually create a warranty.
An action may be legal and ethical.
Duress is a defense to the enforcement of a contract, but not a ground for rescission of a
contract.
Entrusting goods to a merchant who deals in goods of the kind gives the merchant the
power to transfer all rights to a buyer in the ordinary course of business.
The Federal Reserve System acts as a clearinghouse where banks exchange checks.
Federal law does not prohibit employers from engaging in gender-based wage
discrimination.
If a director fails to use a reasonable amount of supervision over corporate officers and
employees, then the director can be held liable for negligence.
In choosing a form of business organization for a new enterprise, important factors
include the ease of creation.
National Drilling Company ships its only pump to American Hydraulics Corporation,
the manufacturer, for repair. National hires Overland Transport, Inc., to take the pump
to American Hydraulics and to return it to National as soon as the repair is complete.
National is forced to suspend operations without a pump, but Overland does not know
this. National expects to be without the pump for five days and to lose profits of $5,000.
When the pump is not returned by the end of the fifth day, National rents a pump at a
cost of $100 per day. Overland delays five more days before returning the pump.
National files a suit against Overland, asking for compensatory, consequential, and
punitive damages. Will National recover?
The Sarbanes-Oxley Act applies to domestic, but not foreign, public accounting firms
that provide auditing services to “issuers.”
If a principal cannot be contacted in an emergency situation, an agent cannot deviate
from previously given instructions.
A partner may dissociate from a partnership by declaring bankruptcy..
A condition that must be fulfilled before a party’s performance can be required is a
concurrent condition.
Cody signs and returns a letter from Dora, referring to her sale of the Bar-D Ranch and
its price. When Cody attempts to complete the deal, Dora refuses, claiming that they
have no contract. Cody claims they do. What standard determines whether these parties
have a contract?
The possession of land without right is a tenancy at will.
Protection against discrimination under the Civil Rights Act of 1964 does not extend to
situations in which individuals are harassed by members of the same gender.
In order to truly understand our legal system, it is important to understand the origins of
the common law tradition.