Bryce’s accountant is Caleb and his attorney is Delilah. All states protect, as privileged
information, Bryce’s communications with
a. Caleb and Delilah.
b. Caleb only.
c. Delilah only.
d. neither Caleb nor Delilah.
Precise Device Corporation and Quality Instruments, Inc., decide to merge. This
corporate combination does not require the approval of
a. Precise and Quality’s directors.
b. Precise and Quality’s officers and employees.
c. Precise’s shareholders.
d. Quality’s shareholders.
Kathy is the secured party in a transaction with Julie, who is the debtor. The collateral is
a 2007 Chevrolet F150 pick-up truck. Kathy files a financing statement in which she
describes the collateral as “a vehicle.” To perfect Kathy’s interest this is
a. not sufficient.
b. sufficient.
c. sufficient as long as the financing statement also includes Julie’s signature.
d. sufficient as long as the financing statement also includes the location of the
collateral.
Michael, a citizen of Ireland, and Nina, a citizen of the United States, enter into a
contract. When Nina breaches the contract, Michael obtains an award of damages in an
Irish court. He asks a U.S. court to enforce the award. The U.S. court defers to and
enforces the Irish court’s decree. This is
a. a travesty of justice.
b. the act of state doctrine.
c. the doctrine of sovereign immunity.
d. the principle of comity.
Lee is seventy years old and Mira is gay. Based on this information, members of
protected classes include
a. Lee and Mira.
b. Lee only.
c. Mira only.
d. neither Lee nor Mira.
Lava Excavators, Inc., needs a drill to continue its operations and orders one for $3,000
from Mining Supplies Company. Lava tells Mining that it must receive the drill by
Tuesday or it will lose $10,000. Mining ships the drill late. Lava can recover
a. $13,000.
b. $10,000.
c. $3,000.
d. $0.
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.
InterComp normally sells $50,000 worth of software to Power Source, a retail
electronics store, each summer on terms requiring payment in sixty days. One year,
InterComp wants cash, but Power Source wants the usual sixty days. To meet both
needs, the parties can arrange
a. a certificate of deposit.
b. a bearer bond.
c. a trade acceptance.
d. an international letter of credit.
Checkerboard Pizza, Inc. (CPI), files for bankruptcy under Chapter 11. CPI’s Chapter
11 plan must contain
a. a plan to turn over its future income to the trustee.
b. a certificate proving attendance at a credit-counseling briefing.
c. a provision of adequate means for the plan’s execution.
d a statement of preference for one creditor over another.
Sela agrees to act on Thom’s behalf, subject to Thom’s control, and Thom trusts Sela to
so act. They set out the terms in a written document, which they both sign. This is
a. an agency by agreement.
b. an agency by estoppel.
c. an agency by ratification.
d. not the creation of an agency relationship.
Bren leases an apartment from Cris for one year. After two months, she sublets the
premises for the next six months to Dee, without obtaining Cris’s consent. Dee pays the
rent for only four months. For the last two months of Dee’s six-month term, Bren is
a. liable for the rent, because Dee defaulted.
b. liable for the rent, because the sublease lacked Cris’s consent.
c. not liable for the rent, because Bren does not own the apartment.
d. not liable for the rent, because Bren sublet the premises to Dee.
Broncobuster BarBQ Company and Cowpuncher Cuisine, Inc. decide to combine.
Deanna, a Cowpuncher shareholder, is dissatisfied with the price that she will receive
for her stock. In the absence of fraud or other illegal conduct, Deanna’s exclusive
remedy is to
a. exercise an appraisal right.
b. file a suit to delay the process.
c. refuse to agree to the deal, which cannot then proceed.
d. acquire stock from the other shareholders and thereby obtain corporate control.
Vernon claims that his contract with Ulani is voidable. If their contract is avoided
a. both parties are released from it.
b. both parties must fully perform their obligations under it.
c. both parties agree to a wholly different contract.
d. a wholly different contract is imposed “as if” the parties had agreed.
The operations of Metal Refining Industries, Inc., are major sources of air pollution.
These operations must use
a. the absolutely cleanest air technology.
b. the best available filter technology.
c. the maximum achievable control technology.
d. the most affordable scrubbing technology.
Shakira issues a check drawn on Thrifty Bank to Ranch & Farm Supply to pay for a
rototiller. Later, Shakira discovers a defect in the device and orders Thrifty to stop
payment on the check. Shakira does not renew the order, and the bank clears the check
eight months later. The bank
a. must recredit Shakira’s account.
b. must obtain funds from Ranch & Farm to cover the check.
c. must substitute acceptable goods.
d. need not recredit Shakira’s account.
Sheri files a petition for bankruptcy. She must include with the petition
a. a plan to turn over her future income to a trustee.
b. a certificate proving credit-counseling from an approved agency.
c. a provision of adequate means to make periodic cash payments to creditors.
d a statement of preference for one creditor over another.
Diversified Corporation’s articles of incorporation prohibit a sale of its assets without a
vote of the board of directors. Diversified’s officers sell some assets to Enterprise
Company without notice to the board. The officers also fail to pay Diversified’s taxes on
time, and some Diversified funds are not accounted for.
The appropriate remedy is most likely
a. a sale of the rest of Diversified’s assets to its directors and shareholders.
b. Diversified’s consolidation or merger with Enterprise.
c. Diversified’s dissolution.
d. payment of damages to Diversified’s officers.
Kristal is a member of Laboratory CSI Services, LLC, a limited liability company.
Kristal can participate in the firm’s management
a. only to the extent that she assumes liability for the firm’s debts.
b. only to the extent of her investment in the firm.
c. to any extent.
d. to no extent.
Truman applies for a job at Skylight Canopy Corporation for which he is well qualified,
but for which he is rejected. Skylight continues to seek applicants and eventually fills
the position with a person who is not a member of a minority. Truman is most likely to
succeed in a suit against Skylight for discrimination if he is a member of
a. a protected class.
b. a majority group.
c. an employers’ association.
d. a union.
Mary’s home is in a state that has a $30,000 homestead exemption. Mary defaults on a
$60,000 debt that she owes to Nina. Mary’s home is sold at auction for $80,000.
If Nina recovers less than she is owed, she can realize the difference from
a. any property that Mary owns.
b. only exempt property that Mary owns.
c. only nonexempt property that Mary owns.
d. property that any other member of Mary’s family owns.
With some exceptions, every portion of every meeting of the Federal Reserve System
Board of Governors and other federal administrative agencies must be open to public
observation under
a. no federal or state law.
b. the Freedom of Information Act.
c. the Government in the Sunshine Act.
d. the Public Accountability Act.
According to the terms of Diego’s will, specific gifts are made, and taxes and other
estate expenses and debts are paid. The assets of Diego’s estate that remain are most
likely to be distributed
a. by codicil.
b. holographically.
c. per capita.
d. through a residuary clause.
Elton and Florida sign a contract by which Elton agrees to deliver and install a utility
sink on May 15 in exchange for Florida’s promise to pay the $250 price on May 15. The
delivery and installation of the sink and the payment of the price are examples of
a. conditions precedent.
b. concurrent conditions.
c. conditions subsequent.
d. implied conditions.
Petro Oil Refinery asks Quality Bank for a loan to increase its oil inventory. Quality
requires Robin, Petro’s president, sign a personal guaranty to pay the debt if Petro
defaults. Meanwhile, to sell fifty barrels of refined oil to Slick Lubricants, Inc., Petro
asks its outside accountant Tina to co-sign a credit application.
If Tina signs the application but fails to condition her signature on Petro’s agreement to
pursue its legal remedies against Slick before looking to her, then Tina is
a. a surety.
b. a lienor.
c. a guarantor.
d. a creditor.
Qatar Global Investments is a foreign entitya firm owned and operated by investors in a
foreign country. With respect to a limited liability company in the United States, Qatar
Global can
a. act as a creditor, but cannot otherwise invest or participate.
b. become a member.
c. not become a member, but can participate in its operations.
d. not become a member or otherwise participate in its operations.
Judge Julia decides that the precedent for the case she is hearing is no longer correct
due to technological changes. She overturns the precedent when she decides the case. It
is most likely that her case will
a. go unnoticed by the public.
b. be thrown out of court.
c. receive a great deal of publicity.
d. be ignored by the media.
Realty Credit Company and Second Mortgage Corporation plan to consolidate. Most
likely, the articles of consolidation will be filed with
a. the county recording office.
b. the Securities and Exchange Commission.
c. the state’s secretary of state.
d. the local chamber of commerce.
Big Valu Grocery Stores is an unincorporated cooperative. Big Valu and other
unincorporated cooperatives are generally treated like
a. business trusts.
b. corporations.
c. joint stock companies.
d. partnerships.
To drive its competitors out of a certain geographic segment of its market, Fryin”
Potatoes, Inc., sets the prices of its products below cost for the buyers in that area. This
is
a. a refusal to deal.
b. business acumen.
c. predatory bidding.
d. price discrimination.
KO Marketing Company, a U.S. firm, signs a contract with Librador Corporacion, a
Chilean firm, to give Librador the right to use Innovative’s animation techniques and
characters in product promotions. This is
a. a distribution agreement.
b. a joint venture.
c. direct exporting.
d. licensing.
William is a surety for Jeannie’s loan from Richard. Richard knows of William’s
existence. When the loan comes due, Jeannie tries to pay Richard, but Richard rejects
the payment. William is
a. released from any obligation on the debt.
b. required to pay the amount of the debt to Richard.
c. required to pay up to half of the amount of the debt to Richard.
d. required to pay the amount of the debt to Jeannie.
Lana applies for a firefighter’s job with Metro City, which responds with a letter setting
an appointment for a medical exam. The letter also states that it is “an employment offer
conditioned on the applicant passing the exam.” This letter is
a. a bilateral contract that Lana accepted by applying for the job.
b. a quasi contract on which Lana can rely for employment.
c. a unilateral contract that Lana can accept by passing the exam.
d. no contract.
Kim’s Pony Rides orders ten saddles from Little Horse Saddles, Inc. The sales contract
states that if the saddles are defective, Kim’s will allow Little Horse Saddles to repair or
replace them instead of rejecting the shipment. When the saddles arrive, they are
defective. In this case, the perfect tender rule
a. does not apply.
b. applies to both parties.
c. applies only to Little Horse Saddles.
d. applies only to Kim’s Pony Rides.
Qiara is a holder of preferred stock in Rio Grande Irrigation & Development, Inc. Qiara
has priority over holders of Rio common stock as to
a. nothing.
b. payments of dividends.
c. the date on which Rio must repurchase the shares.
d. upward changes in the market price of the shares.
Roland files for Chapter 7 bankruptcy. After all his assets have been sold and the
proceeds distributed among his creditors, Roland’s remaining debts
a. are discharged.
b. paid by the court.
c. must be paid by Roland.
d. are put on hold until Roland has sufficient means to pay them.
A transfer of contract rights to a third person is generally prohibited.
A restriction on commercial speech is valid as long as it forbids only the expression of
views on controversial issues.
In general, a buyer’s duty to pay for tendered goods becomes absolute before the buyer
has had an opportunity to inspect the goods.
A business that holds itself out as being a corporation may not be able to deny corporate
status, even if it makes no attempt to incorporate.
A guarantor can be required to pay an obligation only after the principal debtor defaults.
A law that has any impact on religion is unconstitutional.
Under the doctrine of strict liability, people are liable for the results of their acts only if
their intentions are malicious.
Statutes of limitations in all states require a debtor to pay a debt within a specified
period of time.
A security interest is not enforceable after the creditor’s rights have attached to the
collateral.
The purpose of the exclusionary rule is to deter police from misconduct.
Under federal law, only key employees who take temporary family or medical leave are
entitled to job reinstatement.
Compensatory damages compensate an injured party for damages arising from the loss
of a bargain caused by a breach of contract.
The contract term “delivery ex-ship” means that the risk of loss does not pass to the
buyer until the goods are properly unloaded from the ship or other carrier.
A bearer instrument is an instrument that does not designate a specific payee.
Acting in good faith gives a business firm a better chance of defending its actions in
court.
Cumulative voting refers to the accumulation of proposals presented annually for a
shareholders’ vote.
A principal owes an agent a duty of compensation.
Loan flipping occurs when a lender convinces a homeowner to refinance soon after
obtaining a mortgage.
Efrem owns Fans & Players, a retail sporting goods shop. When Great Hill Lodge, a
new ski resort, is built in the area, Efrem decides to expand and borrows a large sum
from Hometown Bank. The bank takes a security interest in Efrem’s present inventory
and any after-acquired inventory as collateral for the loan. The bank properly perfects
the security interest by filing a financing statement. Efrem’s business is profitable, and
he begins doubling his inventory. A year later, an avalanche destroys the ski slope and
lodge. Efrem’s business takes a turn for the worse, and he defaults on his debt to the
bank. The bank seeks possession of his entire inventory, even though the inventory is
twice as large as it was when the loan was made. Efrem claims that the bank has rights
to only half of his inventory. Is Efrem correct? Explain.
A court can refuse to enforce a contract that the court deems to have been
unconscionable at the time it was made.