Larceny relies on fear and force.
An order for relief in a bankruptcy proceeding amounts to a discharge of the debts of
the party petitioning for bankruptcy protection.
Sierra borrows $175,000 from Regional Home Finance Corporation to buy a home. The
loan is a twenty-year, 3/1, adjustable-rate mortgage, with an initial interest rate of 4.0
percent for three years and potential increases of up to 3.0 percent to a cap of 11.0
percent. Before the loan is completed, the lender discloses the amount of the loan
principal, the initial interest rate, the initial annual percentage rate, and associated fees
and costs. Not disclosed are material details about the amounts of the payments when
the interest rate changes. Before the first increase takes effect, Sierra decides that she
wants to rescind the loan. What is a “twenty-year, 3/1, adjustable-rate mortgage”? Can
Sierra rescind this loan? Why or why not?
Safe-T Guard Services enters into a contract to secure Taylor’s Business Park from
vandalism and theft between 6 p.m. and 6 a.m. nightly for six months. At the end of the
term, if there has been no vandalism or theft in the Park, Safe-T’s performance will have
been
a. absolute.
b. complete.
c. conditional.
d. substantial.
The Environmental Protection Agency (EPA) discovers that Super Fisheries, Inc. has
violated an EPA regulation. If no negotiated settlement can be reached, the EPA will
then
a. issue a formal complaint against Super Fisheries.
b. do nothing.
c. take the matter to the U.S. Supreme Court.
d. fine Super Fisheries.
Andy offers to pay Ryan to marry Andy’s youngest daughter. To be enforceable, the
contract must be in writing if the amount Andy promises to pay is
a. $50.
b. $500.
c. $5,000.
d. $50, $500, or $5,000.
Bret obtains a fire insurance policy on his rental house with Continental Insurance
Company. Like all insurance, this policy is an arrangement for
a. avoiding the assumption of responsibility.
b. predicting a potential loss based on unknown factors.
c. shifting the imposition of liability.
d. transferring and allocating risk.
Dina, an employee of Excavation Associates, is injured in a work-related accident.
Based on the diagnosis of Filbert, a doctor, Dina accepts $50,000 from her employer
and waives the right to future claims. Filbert’s diagnosis later proves to have been
wrong. This misdiagnosis is, in terms of its impact on Dina’s agreement with her
employer,
a. a bilateral mistake of fact.
b. a unilateral mistake of fact.
c. fraudulent misrepresentation.
d. nonfraudulent misrepresentation.
Global Distribution Corporation suggests that its employees apply the “Golden Rule” to
ethical issues that arise at work. This requires that the employees
a. categorize the issues according to legality, morality, and profitability.
b. consider only the benefits that would accrue to them personally.
c. look only at the result, regardless of the means to attain it.
d. consider how they would like to have other treat them in a similar situation.
Martin’s will states, “I leave my gold pocket watch to Laurie.” Laurie dies before
Martin. This creates a(n)
a. abatement.
b. general devise.
c. lapsed legacy.
d. residuary legacy.
Jillian has a mortgage loan for $50,000 with Midtown Bank. Jillian misses one
payment. Midtown Bank forecloses on the entire amount of the loan. Midtown Bank
can do this if the loan documents include
a. a notice of default.
b. a notice of sale.
c. an acceleration clause.
d. a deficiency judgment.
Clyde issues a check payable to Discount Mart. Elle, Discount’s cashier, forges the
store’s indorsement and deposits the check in her bank account. Clyde’s bank, First
State Bank, pays the check. Clyde can recover from
a. Elle, but not First State Bank.
b. First State Bank, which cannot recover from Elle.
c. First State Bank, which can recover from Elle.
d. no one.
Derrick buys a hunting license and goes hunting. He shoots a deer, cleans it, and takes it
back to his truck. He takes the deer to town and has the meat processed. Derrick’s
acquisition of the deer is by
a. possession.
b. a bailment.
c. confusion.
d. production.
Uri discovers a boat adrift, and retrieves and anchors it. The boat features a number on
its side and other evidence pointing to its owner, Vera. This is
a. a constructive bailment.
b. a voluntary bailment.
c. an express bailment.
d. no bailment.
Perfect Potato Chip Company makes an offer that Snack Foods Corporation would like
to accept. Under the “mirror image rule” relating to offer and acceptance, an acceptance
a. may include additional terms not contained in the offer so long as they do not
materially alter the agreement.
b. may include additional terms not contained in the offer that will become part of the
agreement if the offeror does not object within a reasonable period of time.
c. must include only those terms and conditions contained in the offer.
d. may contain additional terms as long as all parties agree to the additional terms.
Investment Properties Corporation conveys an office building to Bob with a deed that
makes the greatest number of warranties and provides the most extensive protection
against defects of title. This deed is
a. a grant deed.
b. a quitclaim deed.
c. a sheriff’s deed.
d. a warranty deed.
Billy tells Raymond that he can come swimming in Billy’s lake whenever he wants.
Raymond comes to Billy’s lake several times over the course of five years. Billy then
decides that he does not want Raymond to come swimming anymore. Billy
a. can withdraw the license he gave Raymond.
b. cannot withdraw the license he gave Raymond because it has been more than three
years since he gave it.
c. must obtain a court order to stop Raymond from coming and swimming.
d. must notify Raymond of his decision in writing and continue to allow Raymond to
come swimming for sixty days.
Raven is a shareholder of Quantum Mechanix Corporation. Raven could normally
exercise appraisal rights if Quantum participated in
a. a consolidation.
b. a dissolution.
c. a liquidation.
d. a winding up.
Equity Company and Faye enter into a contract for Faye to cater a meeting of Equity’s
shareholders. When Faye’s schedule conflicts, she asks Gudren to serve Faye’s coffee
and pastries at the meeting. This transfer of duties is
a. a delegation.
b. an assignment.
c. a third party beneficiary contract.
d. prohibited by law.
Alpha Company issues a trade acceptance with itself and Beta Company as parties. A
trade acceptance is
a. a draft.
b. an order to accept delivery of money.
c. a promise to accept delivery of goods.
d. a promise to deliver goods.
Finn and Glenda want to form and do business as Hobby Crafts Corporation. A
corporation is
a. a natural person.
b. a tangible thing.
c. an artificial being.
d. a visible radiance.
Chet is a partner in Diligent Accounting Service. Chet can inspect
a. all of Diligent’s books and records.
b. Diligent’s books and records only as the firm’s management permits.
c. Diligent’s books and records only for a reasonable purpose.
d. Diligent’s books and records relating only to Chet’s capital contribution.
Richly Retail Outlets, Inc., contracts with Stand-Rite Contractors to build a store.
Stand-Rite assigns the contract to Town Builders, which has a poor record of
completing projects. Richly could most successfully argue that the contract cannot be
assigned because
a. Richly did not consent to the assignment.
b. Richly did not receive adequate consideration for the assignment.
c. the assignment will materially increase the risk of nonperformance.
d. Town Builders was not an original party to the deal.
After an accident with a driver for Onyx Security Company, Paul signs a covenant not
to sue Onyx for damages in a tort action if it pays for the damage to his car. This
covenant
a. bars recovery only if Onyx pays.
b. is an illusory contract.
c. is barred by the preexisting duty rule.
d. is unconscionable.
An insurance policy that provides for the replacement of a portion of the insured’s
monthly income from employment in the event that illness or injury causes a short or
long-term disability is
a. life insurance.
b. health insurance.
c. disability insurance.
d. credit insurance.
To borrow money to finance the start-up of his business, Bob executes an instrument in
favor of City Bank. For the instrument to be negotiable, the signature must be
a. anywhere on the instrument.
b. anywhere on the lower half of the instrument only.
c. in the lower left-hand corner of the instrument only.
d. in the lower right-hand corner of the instrument only.
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.
Emil wants to initiate a suit against Fast Credit Company by filing a complaint. The
complaint should include
a. an explanation of the proof to be offered at trial.
b. a motion for judgment on the pleadings.
c. a writ of certiorari.
d. a statement of the grounds for the court to exercise jurisdiction.
International Corporation (IC) makes and sells kitchen appliances. To cover injuries to
consumers if the appliances prove defective, IC should obtain
a. group insurance.
b. health insurance.
c. liability insurance.
d. life insurance.
Which of the following is NOT a type of ADR?
a. Negotiation
b. Mediation
c. Arbitration
d. A civil lawsuit
Phillipa is the sole proprietor of Fun Floral Arrangements. As a sole proprietor, Phillipa
a. does not pay income taxes on Fun Floral Arrangements’ profits.
b. pays only personal income taxes on Fun Floral Arrangements’ profits.
c. is taxed twice on Fun Floral Arrangements’ profits.
d. pays both personal and sole proprietor income taxes on Fun Floral Arrangements’
profits.
Fact Pattern 25-2
Tom draws a check, on his account in State Bank in New York, payable to Digital
Media, Inc., in San Francisco. Digital deposits the check in its account at First National
Bank.
Refer to Fact Pattern 25-2. Tom’s bank is
a. the cashing bank.
b. the depositary bank.
c. the intermediary bank.
d. the payor bank.
T.J. owns a red sports car. T.J. can use the car as he wishes and he can also dispose of it
if he wishes. When T.J. dies, the car will descend to his son. T.J. is an owner in
a. joint tenancy.
b. tenancy in common.
c. fee simple.
d. community.
Tania promises to buy Saki’s handheld game-player for $40. Saki is
a. an executee.
b. an offeror.
c. a promisee.
d. a promisor.
Exculpatory means serving to clear of blame.
Since stock is intangible personal property, the ownership right to stock exists
independently of a stock certificate.
When a U.S. firm wishes to increase its involvement in an international market, it
normally establishes an agency relationship with a foreign firm.
A per capita method of distribution shares equally among heirs in the same class.
A manufacturer’s liability to an injured party on a strict product liability theory is
limited to a refund or a replacement of the defective product.
Mitch is a director and officer of Numero Uno, Inc. Mitch makes a marketing decision
that results in a dramatic decrease in profits for Numero Uno and its shareholders. The
shareholders accuse Mitch of breaching his fiduciary duty to the corporation. What is
Mitch’s best defense against this accusation? Later, the Numero Uno board considers a
resolution for the firm to compete with One-of-a-Kind Corporation. Mitch is a director
and shareholder of One-of-a-Kind. What is Mitch’s responsibility in this situation?
Quest Resources, Inc., contracts with Ring Communications Corporation (RCC) for
RCC to design and build an all-weather communications system for Quest’s field
operations. RCC builds the system, but it functions effectively only in good weather. Is
this a breach of the contract? If so, what remedies does Quest have?
A product is unmerchantable if an accident could arise in connection with the goods.
A preference occurs when a debtor transfers property or money favoring one creditor
over others.
Insurers can estimate fairly accurately the amount they will have to pay if they insure
the members of a particular group.
Once the seller has tendered delivery, the buyer is obligated to accept the goods and pay
for them.
Before the guarantor of a debt can be required to answer for the debt of a debtor, the
debtor must have defaulted on the underlying obligation.
Appraisal rights are often extended to regular mergers and consolidations.
Concurrent jurisdiction exists when both federal and state courts have the power to hear
a particular case.
An acceptance must be unequivocal.
Under an antilapse clause, an insurance policy will not lapse under any circumstances.