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.
Noah and Orin do business as Pest Control Partners. In most states, for the purposes of
suing and being sued, Pest Control Partners would be treated as
a. an aggregate of the individual partners.
b. a natural person.
c. an entity.
d. a non-existent party.
Fact Pattern 10-4
Kelly and Lucas sign a written contract for the sale of Kellys Koffee Kiosk to Lucas.
The parties intend their written contract to be a final statement of the terms of their
agreement.
Refer to Fact Pattern 10-4. The writing that Kelly and Lucas signed is
a. a completely integrated contract.
b. a conditionally integrated contract.
c. an agreeably integrated contract.
d. an obviously integrated contract.
Safe-T Guard Services enters into a contract to secure Taylors 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-Ts performance will have
been
a. absolute.
b. complete.
c. conditional.
d. substantial.
Sam contracts to harvest Tinas crop on August 1. Due to an unexpected regional fuel
shortage, Sam cannot perform on the specified date. This
a. breaches the contract.
b. discharges the contract.
c. has no effect on the contract.
d. suspends the contract.
Mona asks Ned if she can store her furniture in his garage while she serves a tour of
duty with the U.S. Marines Corps. Ned agrees. 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.
Kris transfers a note, on which Liu is the maker, to Mia, who takes it for value and in
good faith. Mia knows that Kris breached the contract underlying the note, giving Liu a
defense against payment. With respect to this note, Mia is
a. a knowledgeable holder in due course.
b. an ordinary holder.
c. an ordinary holder in due course.
d. an ordinary note taker.
The payment of Fridas debt to Gianini is guaranteed by Fridas personal property.
Gianini is
a. a debtor.
b. a secured party.
c. a secured transaction.
d. a security interest.
Dobry Die & Mold, Inc., enters into a contract with Chets Refitting Service to fix
Dobrys precisely engineered molding equipment. If Chets delays the repair for five
days, knowing that Dobry will lose a certain percentage of profit for the delay, Dobry
might be awarded consequential damages to
a. establish, as a matter of principle, that Chets acted wrongfully.
b. provide Dobry with funds for a foreseeable loss beyond the contract.
c. provide Dobry with funds for its loss of the bargain.
d. punish Chets and set an example to deter others from similar acts.
Corner Convenience Store (CCS) takes out a full-page ad in a local newspaper and runs
a thirty-second commercial on a local television station, offering a reward for
information leading to the apprehension of a certain criminal. CCS could normally
terminate the offer by placing
a. a full-page ad in the local paper and a thirty-second commercial on the local station.
b. a notice in the “Legal Announcements section of the paper.
c. a notice to the news departments of the local stations.
d. any, or none, of the choices.
Lil Canine Company (LCC) uses a trademark that neither LCC nor anyone else has
registered with the government. Under federal trademark law, LCC
a. can register the mark for protection.
b. cannot register a mark that has been used in commerce.
c. has committed trademark infringement.
d. must put off registration until the mark is out of use for six months.
Myles obtains a business liability insurance policy from Nova Insurance Company for
Myless Hydraulics & Transmission Repair shop. Nova can cancel the policy
a. if Myles increases the risk assumed by the Nova.
b. if Myles files a claim under the policy.
c. if Myles appears as a witness in a case brought against Nova.
d. under no circumstances.
Expert Pavers, Inc., contracts with Fabricated Building Corporation to repave
Fabricateds parking lot for which Fabricated agrees to pay. The requirements of this,
and any other, contract do not include
a. consideration.
b. capacity.
c. legality.
d. practicality.
Steve steals one of Tricias checks and forges her signature. Tricias bank, Unity Bank,
pays the check. Tricia can recover from
a. Steve, but not Unity Bank.
b. Unity Bank, which cannot recover from Steve.
c. Unity Bank, which can recover from Steve.
d. no one.
The Association of Southeast Asian Nations is a regional trade association that was
created through
a. a bilateral agreement.
b. a lateral agreement.
c. a multilateral agreement.
d. a unilateral agreement.
GR8 Stores, Inc., hires Haul-Way Company, a common carrier, to transport fifty
large-screen HDTVs from San Diego to Phoenix. En route, a pothole causes the truck to
crash, damaging the goods. Liability for the damage most likely rests with
a. GR8 Stores and Haul-Way.
b. GR8 Stores only.
c. Haul-Way only.
d. neither GR8 Stores nor Haul-Way.
Ben allows Cody to store his trailer on Bens property for $20 a month while Cody is out
of town. Later, Ben notices rainwater collecting in the trailer and covers it with a tarp at
a cost of $40. This cost is most likely borne by
a. Ben and Cody.
b. Ben only.
c. Cody only.
d. neither Ben nor Cody.
Development Associates (DA) agrees to buy five acres of land from Eastside Properties
for $15,000. Eastside sells the acreage to Fealty Realty, and fails to go through with
DAs deal on the agreed date, when the market price of the land is $17,000. DA may
recover
a. $17,000.
b. $15,000.
c. $2,000.
d. $0.
Reaching for a bottle of soda from a display in a Bargain Mart store, Cody slips in a
puddle of spilled soda and falls, suffering an injury. Bargain Marts employees are not
aware of the spilled soda until Cody falls. In a suit against Bargain Mart, Cody will
most likely
a. lose, because Bargain Marts employees were not aware of the spill.
b. lose, because Cody should have exercised more care.
c. win, because Bargain Mart can recover from the soda bottler.
d. win, because the spilled soda was foreseeable.
Kasper, the owner of Lakeview Farm, and Milt, the tenant of the farmhouse on the
property, may create a tenancy for years by
a. deed.
b. express contract.
c. implication.
d. sufferance.
Beachside City enacts an ordinance that bans the distribution of all printed materials on
city streets. Carl opposes the citys latest “revenue-enhancing measure and wants to
protest by distributing handbills. In his suit against the city, a court would likely hold
the printed-materials ban to be
a. an unconstitutional restriction of speech.
b. constitutional under the First Amendment.
c. justified by the need to protect individual rights.
d. necessary to protect national interests.
Bernie wants to go into the business of trucking refrigeration units. Among the reasons
that would probably convince Bernie to set up his business as a sole proprietorship
would be
a. its greater flexibility.
b. its limited liability.
c. its perpetual existence.
d. the ease of transferring the business to others.
Bill and Cody agree to guarantee Wyatts debt. Bills maximum liability is $60,000, and
Codys is $40,000. Wyatt owes $40,000 and is in default. Bill pays the creditor the entire
amount. In the absence of an agreement to the contrary, Bill can recover from Cody
a. $0.
b. $16,000.
c. $20,000.
d. $40,000.
Mae is granted immunity after she agrees to testify about a crime. Mae has an absolute
privilege against self-incrimination and
a. can be prosecuted only for a crime about which she agreed to testify.
b. cannot be prosecuted for any crime.
c. cannot refuse to testify on Fifth Amendment grounds.
d. can refuse to testify on Fifth Amendment grounds.
In Ben v. City Car Dealership, a state supreme court held that a minor could cancel a
contract for the sale of a car. Now a trial court in the same state is deciding Daphne v.
Even Steven Auto Deals, Inc.,, a case with similar facts. Under the doctrine of stare de-
cisis, the trial court is likely to
a. allow the minor in the Daphne case to cancel the contract.
b. disregard the Ben case.
c. order the minor in the Daphne case to cancel the contract.
d. require the minor in the Daphne case to fulfill the contract.
Rodeo Ranchs agent Slim is authorized to draw checks on Rodeo Ranchs account in
Town Bank. Upper Range Corporation is a Rodeo Ranch supplier. Slim writes a check
“pay to the order of Upper Range [signed] Slim, indorses the check in Upper Ranges
name, and deposits it in his account in Verity Bank. If Verity Bank collects payment, the
ultimate party most likely to suffer the loss is
a. no one.
b. Rodeo Ranch.
c. Town Bank.
d. Upper Range.
To prepare for a trial between Large Lots Development Corporation (LLDC) and
MiniMansion Construction Company (MMCC), MMCCs attorney places LLDCs
president under oath. A court reporter makes a record of the attorneys questions and the
officers answers. This is
a. a cross-examination.
b. a deposition.
c. an imposition.
d. an interrogatory.
Frank slips and falls on Guys Harbor Tour Boat and is injured. Frank files a suit against
Guys for $500,000. If Frank is 20 percent at fault and Guys is 80 percent, under the “50
percent rule comparative negligence principles, Frank would recover
a. $0.
b. $250,000.
c. $400,000.
d. $500,000.
Lucky owns Mud Flats Ranch, which is situated on certain Nevada acreage. The
exterior boundaries of the land extend
a. 100 feet into the earth and 100 feet into the atmosphere.
b. one mile into the earth and one mile into the atmosphere.
c. to infinity and beyond.
d. to the center of the earth and up to the farthest reaches of the atmosphere.
Bayou Boats, Inc., and Eventide Fishing Tours enter into a contract for a sale of seven
swamp boats. Eventide pays for the goods, but Bayou does not deliver. Eventide can
use replevin as a remedy if
a. Bayou is lawfully withholding the goods.
b. Eventide cannot effectively cure the defect.
c. Eventide is unable to cover for the goods.
d. the goods have not been identified to the contract.
Delilah files a petition in bankruptcy. The proceeding is governed by the Bankruptcy
Code, which is part of
a. state law.
b. federal law.
c. the U.S. Constitution.
d. international law.
Vehicle Leasing Agency (VLA) and Wander Trucking Company enter into a contract
for a lease of eight cargo vans. VLA delivers eight vans, but they are not cargo-sized.
Wander
a. cannot reject the entire shipment.
b. can reject the entire shipment.
c. must accept the entire shipment.
d. must reject the entire shipment.
Rewind Investments Inc. owns 90 percent of Swift Blades Inc. (SBI). Rewinds majority
shareholders are also its directors and the directors of SBI. SBIs business is the design
and assembly of wind-driven turbines. SBI is offered the opportunity to buy Typhoon
Turbines, Inc., a competitor, but SBIs board turns it down. Within six months, Rewind
buys Typhoon. Based on the courts reasoning in Notz v. Everett Smith Group, Ltd.,, a
minority SBI shareholder could bring
a. a claim against Typhoons former directors.
b. a direct claim against SBIs majority shareholders.
c. a shareholders derivative suit against Rewind.
d. no claim.
A contract will be discharged if foreseeable circumstances make it impossible to attain
the contracts purpose.
If a buyer breaches a contract and the seller resells the goods to another party, the seller
cannot recover any loss from the breaching buyer.
Generally, stock offerings that are made in a limited manner during any twelve-month
period are not exempt from the registration requirement.
Only blue-collar crimes are prosecuted under RICO.
An integrated contract is the final embodiment of the terms of an agreement.
For a party to take by adverse possession, the partys possession must not be open,
visible, or notorious.
Stocks are an example of property that does not come under UCC Article
A guardian can enter into legally binding contracts on behalf of a mentally incompetent
person.
Insurance coverage is never effective until a formal written policy is issued.
An item cannot be a fixture unless it is physically attached to the land.
The terms in a click-on agreement may be enforced if the parties expressly agreed to
them.
A sharing of profits from the ownership of property creates a presumption that a
partnership exists.
An offer must be communicated to the offeree to be effective.
The rules governing firm offers apply to all merchants.
A lenders failure to comply with federal mortgage disclosure requirements extends the
borrowers right to rescind the loan to no more than seven days.
Any corporate funds are legally available for paying dividends.
The law establishes rights, duties, and privileges that are consistent with the values of
society.