Rally Speedboat Corporation refuses to sell its products to Super Weekends, Inc., a
recreational water products dealership. This is
a. an exclusive-dealing contract.
b. a horizontal market division.
c. attempted monopolization.
d. a unilateral refusal to deal.
Fact Pattern 10-1
Mutual Company enters into a contract to employ Neil as an investment manager for
two years. During the first year, Neil is often absent without explanation and when
present fails to adequately monitor and manage Mutuals investments. Refer to Fact
Pattern 10-1. Neils performance is most likely
a. a material breach.
b. a minor breach.
c. Mutuals breach.
d. no breach.
Aromatic Tea Company and Savory Stores, Inc., enter into a contract for a sale of tea.
The contract includes the term “F.O.B. Upriver City, which is Savorys location. This
means that the contract is
a. a bailment contract.
b. a destination contract.
c. a shipment contract.
d. a transportation contract.
Sierra digitally copies “Rampage and other recent films without the authorization of the
owners and transfers those copies freely to others via file-sharing Web sites. This is
a. piracy.
b. spamming.
c. phishing.
d. vishing.
Wallys Warehouse offers to sell a certain used forklift to Value Lumber Outlet, but it is
stolen before Value accepts. Most likely, Wallys must obtain
a. a forklift for Value if Wallys insurance covers the loss.
b. a forklift for Value if it still wants one.
c. nothing for Value because that would extend the time of the offer.
d. nothing for Value because the theft terminated the offer.
Ula wants to initiate a suit against Valley Farms by filing a complaint. The complaint
should include
a. an explanation to refute any defense the defendant might assert.
b. a motion for summary judgment.
c. a motion to dismiss.
d. a statement of the facts necessary to show Ula is entitled to relief.
Midwest Power Corporation wants to build a nuclear power plant on private land, for
which a federal permit is required. For this action, an environmental impact statement is
a. prohibited.
b. required.
c. unnecessary.
d. voluntary.
Cray returns a digital music player that he bought from Discount City, which refunds
the price. Their exchange involves
a. emancipation.
b. ratification.
c. restitution.
d. severability.
Roy leaves his Honda sport utility vehicle at Sams Auto Service for an oil change. This
is a bailment for
a. neither partys benefit.
b. the parties mutual benefit.
c. the sole benefit of the bailee.
d. the sole benefit of the bailor.
To pay for a new desk bought at Office Outlet, Pete makes a check payable to “Offs
Outlet. A proper indorsement of the check is
a. “Office Outlet only.
b. “Offs Outlet only.
c. “Office Outlet or “Offs Outlet.
d. “Pete only.
Scott presents an instrument that states “pay to the order of Scott to Town Bank for
payment. This instrument is the most common type of negotiable instrument, which is
a. a certificate of deposit.
b. a check.
c. a note.
d. a trade acceptance.
Fruits & Vegetables, Inc., employs hundreds of seasonal and permanent workers, both
skilled and unskilled, in seven states. Under the Immigration Act of 1990, Fruits &
Vegetables can hire illegal immigrants
a. if either the employer or the immigrants file special forms.
b. only if the employer files a special form.
c. only if the immigrants file special forms.
d. under no circumstances.
Food Packaging, Inc., agrees to sell 50,000 6-ounce yogurt containers to Golden Dairy
Company. Food can obtain only 20,000 of the 6-ounce containers, but also ships 30,000
more expensive 8-ounce containers for the same price. Under these circumstances,
Golden
a. cannot reject delivery, and Food cannot later replace the containers.
b. cannot reject delivery, but Food can later replace the containers.
c. may reject delivery, and notice to Golden of Foods intent to cure will give Food a
reasonable time to replace the containers.
d. may reject delivery, but Food cannot later replace the containers.
McCall and Teresa enter into a contract for the distribution of McCalls produce to local
restaurants for which Teresa agrees to pay. McCall transfers his right to payment under
the contract to Midtown Bank. This transfer is
a. a delegation.
b. an assignment.
c. a novation.
d. prohibited by law.
EZ Credit Company signs an instrument payable to the order of Flem that states, “The
maker of this note at the date of maturity, May 1, 2013, can extend the time of payment,
but for no more than a reasonable time. This instrument is
a. negotiable.
b. nonnegotiable, because it includes an extension clause.
c. nonnegotiable, because it is not payable within a definite time.
d. nonnegotiable, because it is payable to a specific payee.
Little City Company operates a public water supply system. Little City must send to
every household that it supplies with water an annual statement describing
a. Little Citys financial situation and material facts that affect it.
b. other businesses in which Little City is involved and to what extent.
c. parties who might be held liable if pollution problems arise.
d. the source of the water, and any contaminants and health concerns.
Cheesy Pizza Company contracts to sell 1,000 cases of frozen pizzas to Roller Rinks,
Inc., but refuses to deliver. Due to a spice shortage, Roller Rinks cannot obtain pizza
elsewhere. Roller Rinkss right to recover the goods from Cheesy is the right of
a. cover.
b. cure.
c. replevin.
d. specific performance.
Flem is an employee of Glo Goods, Inc. Flem reports to state officials that Glo is
illegally shipping unsafe goods to unsuspecting customers. When Glo learns of Flems
report, Glo fires him. He successfully sues Glo for wrongful discharge. 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 tort theory.
The police arrest Lou, who confesses to a crime. Later, Lou refutes the confession and
demands a trial, at which witnesses testify they saw him commit the crime. Lou is
convicted and sentenced. The U.S. Constitution provides safeguards against all of the
following except
a. deprivations of life or liberty without due process of law.
b. not being allowed to question witnesses.
c. punishment.
d. self-incrimination.
Fact Pattern 9-1
Moore Properties, Inc., offers in writing to sell to Lawn Acres Development
Corporation a certain half-acre of land for “$112,000. After Lawn Acres signs the offer
in acceptance and returns it, Moore discovers that the price should have been stated as
“$121,000.
Refer to Fact Pattern 9-1. The effect of Moores misstatement of the price will most
likely fall on
a. Moore and Lawn Acres, who must split the difference.
b. Moore only.
c. Lawn Acres only.
d. neither Moore nor Lawn Acres.
Fresh Seasonal Fruit Company has assets of less than $10 million and fewer than fifty
shareholders. Gourmand Pastries, Inc., has assets of more than $50 million and more
than five hundred shareholders. The Securities Exchange Act of 1934 applies to
a. Fresh Seasonal Fruit and Gourmand Pastries.
b. Fresh Seasonal Fruit only.
c. Gourmand Pastries only.
d. neither Fresh Seasonal Fruit nor Gourmand Pastries.
To assist in detecting illegal bribes, Cut Rite Contractors, Inc., and all U.S. companies,
must
a. conceal financial records that reveal past bribes.
b. keep records that “accurately and fairly reflect financial activities.
c. make bribes through third parties rather than directly to officials.
d. permit payments to foreign officials that are unlawful in that country.
The Association of Software Makers, which does not include all software producers,
refuses to deal with any parties who do not carry the products of its members. Under the
Sherman Act, this is
a. a per se violation if it eliminates competition or prevents entry into a given market.
b. a per se violation under all circumstances.
c. subject to the rule of reason.
d. not a violation.
Clay buys an MP3 player for $200 and a pair of stereo speakers for $600 from a
Discount City store, and downloads $300 worth of digital music from eMusic.com. To
be enforceable, the contract that must be in writing is the purchase of
a. the digital music, the MP3 player, and the speakers.
b. the MP3 player and the speakers only.
c. the MP3 player only.
d. the speakers only.
Mix-It Concrete Company has the right to enter Nims land and remove the rock from
Nims quarry. This is
a. a fee simple absolute.
b. a license.
c. an easement.
d. a profit.
Under Ohios state constitution, the Ohio Environmental Protection Agency issues a new
rule, the Polk County Commission approves a new property tax measure, and the
professors and students at Ohio Law School publish the results of their most recent
legal research. Sources of law do not include
a. the measures approved by local governing bodies.
b. the results of legal scholars research.
c. the rules issued by state administrative agencies.
d. the states constitutions.
Luke owns a farm near Marshalltown, Iowa, with stands of trees serving as windbreaks.
Luke grows corn on the property. When Luke sells the farm to Nina, if the contract does
not specify otherwise, the sale includes
a. neither the crops nor the trees.
b. the crops and the trees.
c. the crops only.
d. the trees only.
Brad stands in front of Rustlers Round-Up Café, shouting “fighting words that are
likely to incite Rustlers patrons to respond violently. The First Amendment protects
such speech
a. all of the time.
b. none of the time.
c. only if it is noncommercial.
d. only if it is symbolic.
Edy obtains a homeowners insurance policy with First Source Insurance Company.
First Source can cancel the policy
a. if Edy appears as a witness in a case against First Source.
b. if Edy fails to pay the premiums.
c. if Edy makes changes that add to the homes value.
d. under no circumstances.
Diners Corporation, a U.S. firm, signs a contract with Essen, A,G., a German firm, to
give Essen the right to use Diners trademark in restaurants in Germany. This is
a. a distribution agreement.
b. a joint venture.
c. direct exporting.
d. licensing.
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.
The legality of an action is always clear.
Gender can be a determining factor in an employers decision to hire, fire, or promote an
employee.
Starting a sole proprietorship is easier and less costly than starting any other form of
business.
Under the Americans with Disabilities Act of 1990, a person with a mental impairment
that ‘substantially limits everyday activities is not disabled.
A principal is not liable for an agents fraud unless the agent has the apparent authority
to commit torts.
A check carries with it an implied promise to reimburse the bank for paying the check.
Owen plans to open Owens Pets Store, a pet sales and pet supplies outlet, and to hire
Quimby and Ruth. Owen will invest only his own money. He does not expect to make
any profit for at least two years and to make almost no profit for the first three years,
but he hopes to expand eventually. Which form of business organization would be most
appropriate? What are the chief characteristics, advantages, and disadvantages of this
form of business organization? If Owen wants to obtain additional capital to expand the
business, but does not want to lose control of the firm, what is his best option?
A fixed-term tenancy terminates automatically when its terms ends.
A manufacturers liability to an injured party on a strict product liability theory is limited
to a refund or a replacement of the defective product.
A business incorporated in one state has an automatic right to do business in any other
state.
If a customers debit card is lost or stolen, the customer will not be liable for any
unauthorized use of the card.
A covenant not to compete is enforceable only if it is necessary to restrain trade.
A business firm can sometimes predict whether a given action is legal.
Thinking about killing someone constitutes the crime of attempted murder.
Taking private property for public use requires the payment of “just compensation.
One of the requirements of a valid contract is its acceptance.
Defamation is one persons use of anothers name without permission.