Dales debts are discharged in a liquidation bankruptcy. With respect to Dales
prebankruptcy debt, Even Stevens Credit Reporting Agency must automatically report
a. nothing.
b. the debt as “discharged, except the nondischargeable debt.
c. the debt as “discharged, including the nondischargeable debt.
d. the debt as “unpaid.
Kailin owns a farm near Manhattan, Kansas, with a farmhouse, barn, and other
structures permanently attached. Kailin grows soybeans on the property. A pond lies
within the boundaries. Land includes
a. the pond, the soil, and the structures.
b. the pond and the soil only.
c. the soil only.
d. the structures and the soil only.
Hobie, the chief executive officer of Ideal Gamers, Inc. (IGI), intentionally understates
the amount of IGIs debts in information provided to investors as part of an issue of IGI
stock. Jack buys the stock and suffers a loss. Hobie may be subject to
a. government prosecution and Jacks suit.
b. neither government prosecution nor Jacks suit.
c. only government prosecution.
d. only Jacks suit.
Excel Aviation 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 Excels board of directors.
b. the later re-registration of Excels securities.
c. the short-swing activities of Excels insiders.
d. the solicitation of proxies from Excels shareholders.
Congress enacts a law that sets out a medical-device approval process for the Food and
Drug Administration to follow. The law includes a preemption provision. A device that
goes through the process injures Joe, who files a claim under state law to recover. The
court will most likely rule that
a. Joes state law claim preempts the federal law.
b. the federal law and state law claim are concurrent.
c. the federal and state law claim cancel each other out.
d. the federal law preempts Joes state law claim.
Flip is a member of Great States Trucking LLC. Flips relationship to Great States ends,
but the firm continues to do business. This is
a. dissociation.
b. dissolution.
c. winding up.
d. wrongful.
Fact Pattern 15-B1
Odell and Pete sign a contract for the sale of Odells Pizza Parlor to Pete. The parties
intend their written contract to be a final statement of most, but not all, of the terms of
their agreementOdell must first buy the building from Quin, after which Odell and Pete
will negotiate a final price.
The writing that Odell and Pete signed is
a. a completely integrated contract.
b. a conditionally integrated contract.
c. a partially integrated contract.
d. a supplementally integrated contract.
Desiree signs a contract with Elena to kill Francois. Desiree pays Elena but she refuses
to perform. Desiree can
a. do nothing with respect to the contract.
b. enforce the contract or recover the payment.
c. only enforce the contract.
d. only recover the payment.
Fact Pattern 23-1B
Sociedad Guarantia (SG), a Mexican firm, borrows $1 million from Tri-national Bank,
a U.S. firm. Later, SG files for bankruptcy under Mexican law and asks the Mexican
court to order the reimbursement of payments on the loan. Tri-national files a suit
against SG in a U.S. court, arguing that the funds do not belong to SG.
Refer to Fact Pattern 23-1B. Under the principle of comity, the U.S. court in
Tri-nationals suit is most likely to
a. ask the Mexican court to drop SGs petition.
b. ask Tri-national to drop its suit.
c. dismiss Tri-nationals suit.
d. order the Mexican court to deny SGs request.
Joel contracts to hire Huong for one year to tend the orchids in his commercial
greenhouse but reserves the right to cancel the employment on one months notice at any
time after Huong begins work. This promise is
a. enforceable.
b. illusory.
c. unliquidated.
d. unforeseen.
Pola develops a new espresso machine, which she names “Sure Shot. She also writes
the operating manual. Pola can obtain trademark protection for
a. the espresso machine.
b. the “newness of the espresso machine.
c. the name.
d. the operating manual.
Delta Services, Inc., is the major wholesale distributor of software in the state of
Florida. Its closest competitor is Efficient Systems Company, another Florida firm. The
two firms agree that Delta will operate in south Florida and Efficient will operate in
north Florida. This is
a. a group boycott.
b. a market division.
c. a price-fixing agreement.
d. a tying arrangement.
Vladimir negotiates a bearer instrument to Wendy by
a. assignment.
b. delivery.
c. presenting it in response to a demand by Wendy.
d. promising to pay.
Rita owes $6,000 in unpaid taxes. In the sand of Seaside Beach, she executes an
instrument for that amount that otherwise meets the requirements for negotiability. This
instrument is likely
a. negotiable.
b. nonnegotiable, because an instrument must be on paper.
c. nonnegotiable, because sand is not sufficiently permanent.
d. nonnegotiable, because the government does not appreciate it.
Consumer Sales, Inc. (CSI), sends its catalogue to Dean and includes a “personalized
letter inviting him to buy any item in the catalogue at the advertised price. This is
a. an offer because of the “personalized letter.
b. an offer because there is no room for price negotiation.
c. an offer only if Dean previously bought items from CSI.
d. not an offer.
Clem, a Delite Dairy salesperson, follows Edna, a salesperson for Festive Foods, a
Delite competitor, as Edna visits stores to make sales. Clem solicits each of Ednas
customers. Clem is most likely liable for
a. conversion.
b. trespass to personal property.
c. wrongful interference with a business relationship.
d. trade libel.
Trey, an agent for Uno Music Corporation, executes an unauthorized contract with
Variety Recording, Inc., that is highly advantageous to Uno. Variety withdraws from the
deal before Uno ratifies the contract. The contract is
a. valid.
b. variable.
c. void.
d. voidable.
Rockstar Software, Inc., develops a new series of performance-related video games.
The games are most likely protected by
a. copyright law.
b. patent law.
c. trademark law.
d. trade secrets law.
Executive control over the Federal Communications Commission, and other agencies,
may be exercised through a presidential veto of
a. Congresss modifications of the agencys authority.
b. the agencys final rules.
c. the agencys final orders.
d. none of the choices.
Owen and Pablo enter into a contract for a sale of fifty Western saddles. Owen does not
deliver. Pablo can normally recover as damages the difference between
a. any loss avoided and any profit gained.
b. the actual price and the hoped-for price.
c. the contract price and the market price.
d. the current prices in the parties locations.
Conrad and Delilah are employees of AgriBio Feed & Seed Corporation. Under the
Equal Pay Act of 1963, AgriBio can legitimately pay different wages on the basis of
a. seniority.
b. job descriptions.
c. substantial equality of skill, effort, and responsibility.
d. gender.
Fact Pattern 28-1B
Chocolate! Chocolate! Corporation is a new company that needs to borrow money to
meet its payroll. Dayna, president and owner of Chocolate! Chocolate!, asks Evermore
Credit Union to loan the funds to Chocolate! Chocolate!
Refer to Fact Pattern 28-1B. If Evermore insists that Dayna sign the loan application,
making her personally liable for payment whether or not Chocolate! Chocolate!
defaults, Dayna will be
a. a surety.
b. a lienor.
c. a garnishee.
d. a guarantor.
Tanya attempts to free herself from the duties of her contract with Drew by telling Drew
to find someone else to perform them. This is
a. a delegation.
b. an assignment.
c. a third party beneficiary contract.
d. none of the choices.
Vince offers to buy a book owned by Sun-Hi for twice what Sun-Hi paid for it. She
accepts and hands the book to Vince. Sun-His delivery of the book is
a. not consideration because its transfer is a preexisting duty.
b. not consideration because its exchange is not a bargain.
c. consideration.
d. not consideration because its value is legally insufficient.
Lois takes out a life insurance policy with Mega Insurance Corporation that names her
son, Nero, as the beneficiary. This is
a. a delegation.
b. an assignment.
c. a third party incidental beneficiary contract.
d. a third party intended beneficiary contract.
A common ethical dilemma faced by the management of General Holdings Corporation
involves the effect that its decision will have on
a. one group as opposed to another.
b. the firm’s competitors.
c. the government.
d. the U.S. Chamber of Commerce.
Ruby Red Corporation has six shareholders, four of whom are members of the same
family. All of Rubys 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 Ruby.
c. the imprisonment of Rubys shareholders.
d. the piercing of Rubys corporate veil.
Building Restoration, Inc. (BRI), enters into a contract to refurbish an old train depot
for Casual Dining, Inc., to open as Eat Up Restaurant. If BRI completes most of the
work promised in the contract, its performance will be
a. absolute.
b. complete.
c. material.
d. substantial.
MaxiMart, Inc., is a discount retailer. MaxiMarts customer service employees are on
strike. Sixty of the workers block the entrances to one of MaxiMarts stores. To get them
away from the doors, MaxiMart should seek
a. a clause of free exercise.
b. a decree of specific performance.
c. an injunction.
d. an order of due process.
Fact Pattern 41-3A
Atlantic Corporations articles of incorporation prohibit a sale of its assets without a vote
of the board of directors. Atlantics officers sell some assets to Pacific Company without
notice to the board. The officers also fail to pay Atlantics taxes on time, and some
Atlantic funds are not accounted for.
Refer to Fact Pattern 41-3A. With respect to Atlantics shareholders, this conduct is most
likely
a. not oppressive because it is undertaken by Atlantics officers.
b. oppressive because Atlantics directors may be personally liable.
c. oppressive because Atlantics shareholders may be personally liable.
d. oppressive because it departs from the standards of fair dealing.
Global Shipping Corporation enters into contracts with distributors and other buyers in
e-commerce and in traditional commerce. The UETA applies, if at all, only to those
transactions in which the parties agree to use
a. electronic means.
b. paper documents.
c. updates and cross-checks to orally verify any e-terms.
d. notarized documents.
Rona and Savannah do business as Treasure Island Traders. In acting on the firms
behalf in a deal with Unlimited Potential, Inc., Rona makes an honest error in
overestimating the profit. To her firm, Rona is
a. liable for breach of the duty of care.
b. liable for breach of the duty of economic sense.
c. liable for breach of the duty of loyalty.
d. not liable.
In Brick n Mortar Corporations suit against Online Mall, Inc. (OMI), the jury returns a
verdict in Brick n Mortars favor. OMI files a motion asking the judge to set aside the
verdict and begin new proceedings. This is a motion for
a. a judgment in accordance with the verdict.
b. a judgment on the pleadings.
c. a new trial.
d. judgment n.o.v.
A destination contract requires or authorizes a seller to ship goods by a carrier but does
not require delivery of goods at a particular destination.
Real Estate Sales Corporation (RESC) orders office equipment from Standard Goods,
Inc., which has an unperfected security interest in the equipment until it is paid for.
Meanwhile, RESC takes out a loan from Trend Credit, Inc., subject to a security interest
in RESCs building and equipment, which Trend perfects. RESC files a petition in
bankruptcy for relief in a liquidation proceeding. If the petition is granted, in what order
will RESCs creditors be paid?
A discharge in bankruptcy will ordinarily bar enforcement of most of a debtors
contracts by creditors.
Electro, Inc., makes and sells electric bikes, as well as parts and service, to customers in
the United States and other countries. Can Electro prevent its employees from revealing
its customer lists, pricing policies, and other confidential information, if the employees
resign to work for a competitor or to enter the same business themselves? How?
Corporations can be perceived as owing ethical duties to groups other than their
shareholders.
Some of the employees of Relay Computers, Inc., decide that they want to be
represented by the Science Workers Union in bargaining with Relay over overtime pay
and the times that the plant opens and closes. Relay, and some employees, including
Tracy, are against the union. Who can demand that a union election be held? If the
union is elected, does it have to represent Tracy? If the union is elected, does Relay
have to bargain over overtime pay and the times that the plant opens and closes?
An agency relationship may be terminated by an act of the parties or by operation of
law.
An attorney is not helpful when a business negotiates agreements to license intellectual
property.
Under federal law, an electronic signature can be as valid as a signature on paper.
Limited liability companies (LLCs) are governed by a federal LLC statute.
The crime of bribery occurs when the bribe is offered even if it is not accepted.
Worldwide Trucking Corporation files a suit in a state court against XL Service
Company, and wins. XL appeals the courts decision, asserting that the evidence
presented at trial to support Worldwides claim was such that no reasonable jury could
have found for the plaintiff. Therefore, argues XL, the appellate court should reverse
the trial courts decision. May an appellate court ever reverse a trial courts findings with
respect to questions of fact?
Discriminatory contracts are invalid.
Dishonor occurs if payment of an instrument is refused with the prescribed time.
Franchising is a form of licensing.
The management of Sportz Shoes Corporation, a U.S. firm, wants to expand into
foreign investment and employment markets. They are considering either opening their
own production facility in a foreign country or entering into a licensing agreement with
a foreign firm. What are the advantages and disadvantages of each of these courses of
action?
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