Solar Power, Inc., files a suit against Thunder Bay Utility Company and seeks to
examine electronic documents in Thunder’s possession. A legitimate reason for this
examination is that the documents contain
a. evidence about the case.
b. private information about Thunder’s operations.
c. public information about energy generation.
d. irrelevant data that can be eliminated from consideration.
Liz trespasses on Mega Corporation’s property. Through the use of reasonable force,
Mega’s security guard Ned detains Liz until the police arrive. Mega is liable for
a. assault.
b. battery.
c. false imprisonment.
d. none of the choices.
Office Accounting, Inc., hires Perry to repair a computer on site for $400, but Perry
does not show up as agreed. Office Accounting hires Raul to do the job for $350. Office
Accounting may recover from Perry
a. compensatory damages.
b. consequential damages.
c. nominal damages.
d. punitive damages.
Kelly, Lars, and Mona agree to be partners in Neighborhood Delivery Service (NDS),
splitting the profits equally. Kelly contributes 67 percent of the capital. When NDS is
dissolved, its liabilities are greater than its assets. The losses are paid by
a. all of the partners in proportion to their capital contributions.
b. all of the partners in proportion to their shares of the profits.
c. Kelly because she contributed most of the capital.
d. Lars and Mona because they contributed the least of the capital.
Robert uses the Internet to defraud Prairie Valley Credit Union. He is found guilty of
wire fraud. He can be punished by
a. imprisonment for not more than one year.
b. imprisonment for up to thirty years and fines of up to $1 million.
c. fines for not more than $50,000.
d. death.
Brendan signs a check “pay to the order of City College Bookstore” drawn on his
account in Delta Bank to pay for his current semester’s textbooks. The bookstore
deposits the check in its account in Eagle Bank. Like most checks, this check is
a. a one-party instrument.
b. a nonnegotiable instrument.
c. a special type of draft.
d. not a substitute for cash.
Bay City Mall requires its tenants to sign a lease that includes a clause releasing Metro
from liability in the event of monetary or physical injury no matter who is at fault.
Coco’s Chocolate Creations signs a lease with Bay City that contains the clause.
This clause is
a. a covenant not to compete.
b. an adhesion contract.
c. an exculpatory clause.
d. an illusory promise.
Nouveau Riche Corporation’s officers, directors, and shareholders buy and sell
securities. SEC Rule 10b-5 applies to
a. only the purchase or sale of a security by a financial corporation.
b. only the purchase or sale of a security involving an officer or director.
c. only the purchase or sale of a security involving a shareholder.
d. the purchase or sale of any security.
Natural Laminate Corporation and Oak Wood Flooring Company combine so that all
that remains after the papers have been signed is Natural Laminate. This is
a. a consolidation.
b. a merger.
c. a purchase of assets.
d. a share exchange.
A contract between Fresh Fruit Corporation and Green Grocer, Inc., requires Fresh Fruit
to deliver goods to Green Grocer’s place of business. This is
a. a bill of lading.
b. a destination contract.
c. a shipment contract.
d. a warehouse receipt.
Cam enters into a contract with Tractors & Lifts Lease Company for a two-year lease of
a backhoe. This contract is subject to
a. Article 2 of UCC.
b. Article 2A of the UCC.
c. Article 11 of the CISG.
d. the common law only.
The Texas Supreme Court decides the case of Livewire Co. v. Power Corp. Of nine
justices, five believe the judgment should be in Livewire’s favor. Justice Bellamy, one
of the five, writes a separate opinion. The four justices who believe the judgment should
be in Power’s favor join in a third separate opinion.
Refer to Fact Pattern 1-1. These opinions are collected and published in volumes called
a. citations.
b. codes.
c. regulations.
d. reporters.
Marine Expeditions, Inc., pays Nate’s Boats $4,000 to use an oceangoing vessel for a
month. For the purposes of the UCC, this is
a. a service contract.
b. a gift.
c. a lease.
d. a sale.
Opportunity Market Company (OMC) and Pierce enter into a contract for Pierce to cut
and trim the landscaping around OMC’s building before a meeting of the company’s
sales staff. When Pierce’s schedule conflicts, he asks Rachel to do the cutting and
trimming. This transfer of duties is
a. a delegation.
b. an assignment.
c. a third party beneficiary contract.
d. prohibited.
Hi-Yield Agriculture, Inc., makes a pesticide with a one-in-a-million risk to people of
developing cancer from exposure. This substance must be
a. disposed of before anyone develops cancer.
b. registered before it is sold.
c. taken off the market and placed in temporary storage.
d. used only in a way that avoids exposure to people.
Jon writes a check to LocoMotion, Inc., as payment for a golf cart but soon discovers
the cart is broken. He goes to Fairway Bank, the drawee, and orally authorizes Lolly, a
bank officer, to stop payment on the check. This order is valid for
a. fourteen days.
b. fourteen months.
c. fourteen attempts to cash it.
d. fourteen subsequent “on-us” items.
Quality Energy Company, a U.S. firm, and Royal Petro, a Dutch firm, enter into a
contract that includes an arbitration clause. This clause must provide that the arbitrator
will be
a. any specified third party.
b. the American Arbitration Association.
c. the Dutch Arbitration Organization.
d. the International Chamber of Commerce.
Beth is a minor. She buys a set of sessions with a personal trainer, and a water bottle
and some weights from a fitness store. Later, Beth decides that she does not want the
water bottle or weights. In most states, Beth
a. can disaffirm the contract and return the water bottle and weights, but keep the
training sessions.
b. can only disaffirm the contract if she returns all the goods.
c. cannot disaffirm the contract.
d. can disaffirm the contract and keep all the goods.
Employers are not allowed to interfere with employees’ efforts to form or join a union
under
a. the Norris-LaGuardia Act.
b. the National Labor Relations Act.
c. the Labor-Management Reporting and Disclosure Act.
d. the Labor-Management Relations Act.
Samson is a government employee. Samson is limited in drug testing by the
a. First Amendment.
b. Second Amendment.
c. Fourth Amendment.
d. Eighth Amendment.
Elections for union officers are regulated by
a. the Labor-Management Relations Act.
b. the Civil Rights Act.
c. the Labor-Management Reporting and Disclosure Act.
d. no federal law.
TalkTalk, Inc., offers to buy from Voice Media Corporation (VMC) 100,000
smartphones. Without notifying TalkTalk, VMC timely ships phones of a different
quality. With respect to the offer and a possible contract, this shipment is
a. an acceptance and a breach.
b. an acceptance and an accommodation.
c. an acceptance and complete performance.
d. a rejection and a counteroffer.
A Massachusetts state statute imposes a prison term, without a trial, on all street
performers who operate in certain areas. A court would likely review this statute under
the principles of
a. the commerce clause.
b. the equal protection clause.
c. the due process clause.
d. the First Amendment.
Patsy files a petition in bankruptcy. At the moment of filing
a. an automatic stay goes into effect.
b. Patsy’s debts are discharged.
c. Patsy’s petition is dismissed.
d. Patsy’s property is distributed to her creditors.
Brasilia, a real estate broker licensed only in Connecticut, concludes a land sale in
Delaware. She can
a. collect the commission if it has not been paid.
b. keep the commission if it has already been paid.
c. foreclose on the property to obtain any unpaid amount.
d. not collect the commission, keep it, or foreclose on the property.
Orange Company makes cellphones. The company’s ad states that “if you aren”t usin”
an Orange, you aren”t gettin” any “C.”” The Federal Trade Commission would consider
this ad
a. false and misleading.
b. impermissibly vague and general.
c. a deceptive half-truth.
d. none of the choices.
Adult Shoppe in Bay City sells a variety of publications, including child pornography.
Bay City enacts an ordinance prohibiting the sale of such materials. This ordinance is
most likely
a. an invalid restriction of individuals’ privacy.
b. an unconstitutional restriction of speech.
c. a violation of adults’ rights to enjoy certain privileges.
d. constitutional under the First Amendment.
Rhea is a director of Spex Corporation, which makes and sells sunglasses and other
eyewear. As a Spex director, Rhea sits on the board, which
a. governs Spex.
b. is governed by the Spex incorporators.
c. is governed by the Spex officers.
d. is governed by the Spex shareholders.
Paltry Assembly Company makes espresso machines and sells one to Vim through a
misrepresentation on the label on which Vim relies and that results in an injury to Vim.
Paltry is most likely liable for
a. a commonly known danger.
b. fraud.
c. privity.
d. puffery.
Will owes Jenny $1,000. Brad owes Will $1,000. Will unconditionally assigns his rights
to Jenny. Will’s right to the $1,000 is then
a. unchanged.
b. extinguished.
c. incidental.
d. assigned to a court.
Sweet Selections is a general partnership that sells candy, cards and flowers. Sweet
Selections has ten partners. Jill and Amy each have a 25 percent interest in the
partnership. All the other members have a 10 percent interest. To pass a management
decision
a. a majority of the partners must agree to the decision.
b. both Jill and Amy must agree to the decision.
c. Jill or Amy must agree to the decision.
d. 30 percent of the partners must agree to the decision.
A firm named Scientific Discovery Corporation (SDC) makes an attempt to incorporate
for a purpose other than making a profit. SDC is
a. a foreign corporation.
b. an alien corporation.
c. a nonprofit corporation.
d. not a corporation.
Skyla and Terry want to form and do business as Unique Boutique Corporation. Its
existence depends generally on
a. city or county corporate codes.
b. the Entrepreneur’s Corporate Handbook.
c. the federal Administrative Procedure Act.
d. state law.
Bay City Merchants Corporation has six shareholders, four of whom are members of
the same family. All of Bay City’s shareholders agree in writing to operate without
shareholders’ meetings. Under the Revised Model Business Corporation Act, this most
likely warrants
a. no penalties or sanctions.
b. the imposition of a fine on Bay City.
c. the imprisonment of Bay City’s shareholders.
d. the piercing of Bay City’s corporate veil.
Any employee, except an undocumented alien, can bring an action for employment
discrimination.
The basic duty of a trustee is to collect the debtor’s available estate and reduce it to cash
for distribution.
Under a dram shop act, liability can be imposed without proof of negligence.
A state constitution may resolve a conflict among documents involving a corporation.
Advertising will not be deemed deceptive so long as it appears to be based on factual
evidence, even if it is not.
In most bailments, the bailee can retain the goods given by the bailor and return
equivalent property.
Under the UCC, a sale is the passing of title from a seller to a buyer for a price.
An accountant is required to discover every impropriety, defalcation, and fraud in a
client’s books.
The relationship between a principal and an independent contractor always involves an
agency relationship.
The articles of corporation cannot exclude or limit shareholders’ voting rights.
A profit is the right to make limited use of another person’s real property without taking
anything from the property.
Any judgment is enforceable.
Negative amortization occurs when the monthly payments are insufficient to cover the
interest due on a loan.
Monopoly power is a minor amount of market power.
The termination provision of a franchise contract is usually more favorable to the
franchisor.
Under the Statute of Frauds, oral contracts are void.