In relation to Edie’s solicitation of investors in a nonexistent business, she is charged
with “mail fraud.” This requires, among other things,
a. claiming that an item is “in the mail” when it is not.
b. deceiving postal authorities as to the content of an item of mail.
c. depositing items in the postal system without proper postage.
d. mailing or causing someone else to mail a writing.
An Iowa state statute requires amusement parks to maintain equipment in specific
condition for the protection of patrons. Jack’s Fun Park fails to maintain its equipment.
Key, a patron, is injured. Jack’s has committed
a. a dram shop act.
b. contributory negligence.
c. negligence per se.
d. res ipsa loquitur.
Corner Market sells groceries. Delite Food & Drug Store sells groceries and fills
prescriptions. The chief responsibility to prevent unsafe food and drugs from being sold
rests with
a. Corner Market and Delite Food & Drug Store.
b. those who consume the products.
c. the Federal Trade Commission.
d. the Food and Drug Administration.
Lacy uses undue influence to induce Mina to sign a contract to invest her National
Education Fund student loan money in Overseas Bank. Mina may
a. avoid the contract.
b. do nothing after Mina signs the contract.
c. recover from National for a failure to monitor Mina’s money.
d. recover from Overseas for a failure to undo Lacy’s influence.
Under Ohio’s 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.
Leif offers Miley $1,000 for her three-year-old laptop computer. Miley accepts. If a
dispute arises, a court would likely
a. enforce the deal after questioning the adequacy of consideration.
b. not question the adequacy of the consideration.
c. rewrite the deal after questioning the adequacy of consideration.
d. set aside the deal after questioning the adequacy of consideration.
On behalf of the rock group Uno, their manager Thalia agrees to a performance in
Seaside Amphitheatre on July 4. Rex, acting for Seaside Productions, sends a written
copy of the agreement to Thalia to be signed. Typically, businesspersons put their
contracts in writing to
a. ensure proof of the contracts’ existence.
b. create substance from form.
c. obtain a check or other negotiable instrument.
d. practice their “letters of credit.”
Congresswoman Pelosi and other politicians want to prohibit the import of certain
agricultural products that pose a danger to domestic crops. With respect to these
products’ import, Congress can
a. do nothing.
b. impose quotas, but not tariffs.
c. impose tariffs, but not quotas.
d. prohibit the imports.
Pep Paints agrees to sell to Quality Painters Grade A-1 latex outdoor paint to be
delivered May 8. On May 7, Pep tenders Grade B-2 paint. Quality rejects the Grade B-2
paint. Two days later, Pep tenders Grade C-3 paint with an offer of a price allowance.
Pep has
a. additional, unlimited time to cure.
b. a reasonable, additional time to cure.
c. one more day to cure.
d. no more time to cure.
Sam is a judge hearing the case of Local Co. v. National Corp. Applying the relevant
rule of law to the facts of the case requires Sam to find previously decided cases that, in
relation to the case under consideration, are
a. as different as possible.
b. as similar as possible.
c. at odds.
d. exactly identical.
Lulu, an accountant, conducts an audit of Microstuff Toys, Inc. After the conclusion of
the audit, the working papers created in preparing the audit must be
a. disposed of immediately.
b. kept until the Public Company Accounting Oversight Board’s review.
c. maintained for seven years.
d. retained forever.
Curtis enters into a contract with Drive-Away Lease Company for a three-year lease of
a car. 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.
Xavier enters into a contract to operate a Yummy Yogurt franchise, which Yummy
agrees to support as long as Xavier maintains his business license. Yummy’s duty to
perform is
a. absolute.
b. conditional.
c. licentious.
d. operational.
Expert Pavers, Inc., contracts with Fabricated Building Corporation to repave
Fabricated’s 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.
Pharma Company, Oral Meds Corporation, and Narco, Inc., are drug makers. Medico
Company and Lab Source, Inc., are drug distributors. In a suit against all of these
parties in which market-share liability is imposed, most likely to be liable are
a. neither the distributors nor the manufacturers.
b. the distributors and the manufacturers.
c. the distributors only.
d. the manufacturers only.
Loni, Michel, and Nita are investors in Oceanic Exploration, a business trust. A
business trust is managed by its
a. directors and officers.
b. general partners.
c. managing members.
d. trustees.
Fact Patter 36-2
Petro Drilling Corporation combines its assets and debts with those of Oil Refining
Company to form New Energy, Inc.
Refer to Fact Pattern 36-2. New Energy acquires
a. all of Petro’s and Oil’s assets.
b. half of Petro’s and Oil’s assets.
c. none of Petro’s and Oil’s assets.
d. only assets that Petro and Oil acquired after a combination was proposed.
Build-Rite Construction Corporation and Deals-R-Us, Inc., combine their efforts to
build an office and retail complex. Their form of business organization is
a. a business trust.
b. a joint stock company.
c. a joint venture.
d. a syndicate.
Fact Pattern 32-1
Hal, Ira, and Jill are partners in Kappa Accessories, a computer peripherals firm.
Refer to Fact Pattern 32-1. Hal signs a contract with Lycra Chips, a retail component
supplier, allegedly on Kappa’s behalf. The contract is binding on
a. Hal, Ira, Jill, and Kappa.
b. Hal only.
c. Kappa only.
d. no one.
Congress enacts a law prohibiting toys made in China from being sold in the United
States. The Hawaii state legislature enacts a law allowing the sale of Chinese-made
toys. Hawaii’s law will most likely be
a. rendered invalid under the supremacy clause.
b. rendered valid the free exercise clause.
c. struck down under the due process clause.
d. upheld under the commerce clause.
Fact Pattern 36-1
Cherry Grove Apartments, Inc., merges with Dutch Elm Realty, Inc. Only Dutch Elm
remains.
Refer to Fact Pattern 36-1. Cherry Grove owed money to Eager Beaver Repair Service
and other creditors. After the merger, Dutch Elm must pay
a. all of Cherry Grove’s debts.
b. half of Cherry Grove’s debts.
c. none of Cherry Grove’s debts.
d. only debts that Cherry Grove incurred after a merger was proposed.
Fact Pattern 7-1
Minka uses her computer to secretly install software on hundreds of personal computers
without their owners’ knowledge.
Refer to Fact Pattern 7-1. Each of the computers that Minka has appropriated and
installed software on is
a. a hacker.
b. a bot.
c. a botnet.
d. a worm.
Big Screen Video Corporation sells high-definition television sets. Under most circum-
stances, Big Screen Video will be presumed to have warranted that its title to the TVs is
a. the same as each brand’s name.
b. none of the choicesa warranty of title is not presumed.
c. good and valid.
d. the best that money can buy.
The Securities and Exchange Commission decides to create a new rule relating to the
dissemination of material nonpublic information through corporate Web sites. The first
step is
a. compile the rule with others in the Code of Federal Regulations.
b. conduct an on-site inspection.
c. publish a notice of the proposed rulemaking.
d. solicit public comment.
Joey reproduces Mina’s copyrighted work without paying royalties. Joey is most likely
excepted from liability for copyright infringement under the “fair use” doctrine if
a. Joey copies the entire work.
b. Joey distributes the copies freely to the public.
c. Joey’s use has no effect on the market for Mina’s work.
d. Joey’s use is for a commercial purpose.
Fashion Retail Center enters into a contract with Great Promotions, Inc., to provide
Fashion with a plan to retool its merchandising strategy. If Great Promotions breaches
the contract, Fashion has a duty to
a. reduce the damages that Fashion might otherwise suffer.
b. reduce the loss that Great Promotions might otherwise suffer.
c. punish Great Promotions and deter others from similar acts.
d. take no action.
Cookie Kiosk LLC’s members and managers are Dwight, Emma, and Fawn. After
Dwight’s relationship to Cookie Kiosk ends, Emma and Fawn agree to discontinue the
firm’s business. This is most likely
a. advisable.
b. optional.
c. required.
d. wrongful.
Rafe is interested in buying a franchise from Sportz Rulez Company. In this transaction,
the Federal Trade Commission’s Franchise Rule
a. does not apply.
b. enables Rafe to weigh the deal’s risks and benefits.
c. enables Sportz Rulez to weigh the deal’s risks and benefits.
d. prohibits certain types of anticompetitive agreements.
Through a certain transaction, Corporate Properties, Inc., acquires all of the shares of
Downtown Realty Corporation for some of Corporate Properties’s shares. Both
Corporate Properties and Downtown Realty continue to exist. This is
a. a consolidation.
b. a share exchange.
c. a short-form merger.
d. a hold-up.
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.
The term for the legal death of the artificial “person” of Skytop Services, Inc., or any
other corporation, is
a. surviving corporation.
b. dissolution.
c. takeover.
d. winding up.
Emma, Frick, Glenda, and Huey are employees of different-sized employers in different
industries. A minimum wage must be paid to employees in
a. all industries.
b. covered industries only.
c. no industries.
d. small-business industries only.
Fact Pattern 23-2
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. First National deposits the check in the Federal Reserve Bank of San Francisco,
which transfers it to the Federal Reserve Bank of New York. That Federal Reserve Bank
sends the check to State Bank.
Refer to Fact Pattern 23-2. When Digital’s bank received the check, it was required to
pass it on
a. before midnight of the next banking day.
b. before midnight of the next day, even if it was not a “banking” day.
c. before noon of the next banking day.
d. within five business days.
Oral evidence of otherwise clear terms in a contract can be introduced at a trial to
contradict those terms.
Under current law, an employer cannot adopt an affirmative action plan.
Any crime that requires knowledge of computer technology for its prosecution is a
computer crime.
A business organization and its actions cannot be based on trust.
Directors are rarely compensated, but when they are, they cannot set their own
compensation.
A reorganization plain is a plan to conserve and administer the debtor’s assets in the
hope that all of the creditors will eventually be paid in full.
A stale check is one that has been outstanding for longer than one month.
If the meaning of a statute’s language is unclear and an agency interprets it, a court must
overturn the interpretation.
Under the UCC, title determines all of the rights and remedies of the parties to a sales
contract.
Only private individuals can enforce the antitrust laws.
A surety is released from his or her obligation if a debtor cannot pay a debt.
A crime can be committed only against persons.
A failure to return personal property is conversion even if the rightful owner consented
to the initial taking.
A spendthrift trust provides for a beneficiary’s transfer of his or her right to future
payments of trust funds.
A joint refusal to deal with a particular person or firm is always a violation of antitrust
law.