Rollo is an attorney whose clients include Superior Credit Company. If Rollo is
negligent in his work for Superior, under the Restatement (Second) of Torts, Rollo may
be liable to Superior and
a. any third party.
b. no third party.
c. third parties who are foreseen users of the work.
d. third parties who are reasonably foreseeable users of the work.
Lacy is an accountant who prepares her clients tax returns. Muff is not an accountant,
but he also prepares tax returns for clients. Under the Internal Revenue Code, liability
for preparing a false return may be imposed on
a. Lacy and Muff.
b. Lacy only.
c. Muff only.
d. neither Lacy nor Muff.
Felicia invents a new valve to cap undersea oil spills, which she names “Great Catch.
She also writes the installation manual to be included with each valve. Felicia could
obtain copyright protection for
a. the valve.
b. the “newness of the valve.
c. the name.
d. the installation manual.
Stable Tool Company makes hedge trimmers. Troy is injured while using a Stable
trimmer and sues the company for product liability based on negligence. To win, Troy
must show that
a. Stable did not use due care with respect to the trimmer.
b. Stable misrepresented a material fact regarding the trimmer.
c. Troy was experienced in the use of trimmers.
d. Troy was in privity of contract with Stable.
Shaes Café and Tommys Grill form a joint venture. Shae can participate in the ventures
management
a. only to the extent that she assumes liability for the ventures debts.
b. only to the extent of her investment in the venture.
c. to any extent.
d. to no extent.
Kade and Lila each press certain quantities of olive oil to sell to Mediterranean
Products, Inc., and agree to share storage costs until Mediterranean can take delivery.
The oil is commingled so that Kades cannot be distinguished from Lilas. This is
a. accession.
b. confusion.
c. conversion.
d. dominion.
Justice For All, a political organization, files a claim to challenge a Colorado statute that
limits the liberty of all persons to broadcast “annoying radio commercials. This claim is
most likely based on the right to
a. equal protection of the law.
b. privacy.
c. procedural due process.
d. substantive due process.
Diego is a truck driver for Entertainment Supplies Company (ESC). Diego does exactly
what ESC tells him. Diego is
a. an employee.
b. an employer.
c. an independent contractor.
d. a principal.
Consumer Credit Union pays Derby $10,000 to design an ad campaign. The next day,
Derby tells the credit union that he has accepted a job in Boston and cannot design the
campaign. As compensatory damages, the credit union can recover
a. $100,000.
b. $10,000.
c. $1,000.
d. $0.
Sullivan and Taylor want to form a corporation to provide catering services. The first
step in the incorporation procedure is to
a. file the articles of incorporation.
b. hold the first organizational meeting.
c. secure a corporate name.
d. select a state in which to incorporate.
Fact Pattern 41-1A
Cherry Grove Apartments, Inc., merges with Dutch Elm Realty, Inc. Only Dutch Elm
remains.
Refer to Fact Pattern 41-1A. Cherry Grove owed money to Eager Beaver Repair
Service and other creditors. After the merger, Dutch Elm must pay
a. all of Cherry Groves debts.
b. half of Cherry Groves debts.
c. none of Cherry Groves debts.
d. only debts that Cherry Grove incurred after a merger was proposed.
Daria writes a check for $100 drawn on Estimable Bank and presents it to Fast Cash,
Inc., for payment. If the check is not backed by sufficient funds, Daria may be
prosecuted for
a. forgery.
b. fraud.
c. negligence.
d. nothing.
Mercy, the chief executive officer of Medico Hospital Corporation, claims that certain
actions by the state of New York infringe on rights guaranteed by the Bill of Rights.
Most of these rights are held to limit
a. federal governmental actions only.
b. federal and state governmental actions.
c. state governmental actions only.
d. actions by non-governmental entities only.
Delia enters into, and fails to disaffirm soon after reaching the age of majority, a
contract with Electronics Stores, Inc. (ESI). Later Delia attempts to disaffirm the
contract. ESI files a suit against her. The court will most likely consider the contract
ratified if it is
a. executed.
b. exculpatory.
c. disaffirmed.
d. rescinded.
Pink Boutique Company and Purple Kiosk Company decide to consolidate. This
corporate combination does not require the approval of
a. Pink and Purples directors.
b. Pink and Purples officers.
c. Pinks shareholders.
d. Purples shareholders.
Suki is a registered agent for Trans-state Trucking, Inc. (TTI), which incorporated in
Utah. As a registered agent, Suki
a. agreed to buy stock in TTI before it existed.
b. applied to Utah on behalf of TTI to obtain its corporate charter.
c. does business for TTI in Utah.
d. receives legal documents on behalf of TTI.
Tyler, a citizen of Utah, files a suit in a Utah state court against Veritas Sales
Corporation, a Washington state company that does business in Utah. The court has
original jurisdiction, which means that
a. the case is being heard for the first time.
b. the court has a unique method of deciding whether to hear a case.
c. the court has unusual procedural rules.
d. the subject matter of the suit is interesting and new.
Flem sells an all-terrain, off-road vehicle to Esteban without disclosing that the odome-
ter, which reads 30,000 miles, was disconnected 50,000 miles ago. Flem is most likely
liable for
a. duress.
b. fraud.
c. mistake.
d. nothing.
Fact Pattern 49-1B
Town Transport Company (TTC) agrees to pick up two containers for Unlimited Sales,
Inc., and store their contents, to be delivered later. While TTC unloads one container,
the other disappears from TTCs loading dock.
Refer to Fact Pattern 49-1B. These facts give rise to
a. a presumption of negligence by TTC.
b. a presumption of theft by a third party.
c. a presumption of theft by TTC.
d. Unlimited Saless liability for the containers loss.
Omega Corporation makes and markets digital timers, clocks, and related products.
Like other business corporations, Omega issues securities to
a. increase its market share.
b. obtain financing.
c. reduce its production costs.
d. safeguard its facilities.
Myrna serves in a representative capacity for Locke. With respect to binding Locke to
contracts, Myrnas authority
a. may be implied or apparent.
b. must be implied and apparent.
c. must be implied and not apparent.
d. cannot be implied or apparent.
Meri, an accountant, includes a false statement in a report for Novelty Paper Products,
Inc. (NPPI) that is filed with the Securities and Exchange Commission. When Otho
buys stock in NPPI and loses money on the investment, he files a suit against Meri,
alleging fraud under the 1934 Securities Exchange Act. To avoid liability, Meri can
show that she
a. intended to defraud NPPI, not Otho.
b. intended to profit on stock trades generally, not only with Otho.
c. is an otherwise competent accountant.
d. was not aware her statement was false.
Myra claims that a Nebraska state statute infringes on her “procedural due process
rights. This claim focuses on
a. procedures used in making decisions to take life, liberty, or property.
b. the content of the statute.
c. the similarity of the treatment of similarly situated individuals.
d. the steps to be taken to protect Marys privacy.
Clay issues a check payable to Discount Mart. Ernestina, Discounts cashier, forges the
stores indorsement and deposits the check in her bank account. Clays bank, First
Friendly Bank, pays the check. Clay can recover from
a. Ernestina, who can recover from First Friendly Bank.
b. First Friendly Bank, which cannot recover from Ernestina.
c. First Friendly Bank, which can recover from Ernestina.
d. no one.
Deb buys a song through eSongs, an online music vendor. Before completing the
purchase and downloading the song, Deb must agree to a provision not to make and sell
copies of the song. This provision is
a. a browse-wrap term.
b. a click-on agreement.
c. a shrink-wrap agreement.
d. a choice-of-law clause.
Expando Global Corporation, a U.S. firm, establishes a wholly owned subsidiary firm
in Germany. In this situation, Expando retains complete ownership of
a. all of the facilities.
b. only those facilities in the United States.
c. none of the facilities.
d. less than half of the facilities.
Ruth files a suit against Solid Products, Inc. Solid responds that even if Ruths statement
of the facts is true, according to the law Solid is not liable. This is
a. a counterclaim.
b. a motion for judgment on the pleadings.
c. a motion for summary judgment.
d. a motion to dismiss.
Halley, a lawyer on the staff of International Group, applies the utilitarian theory of
ethics in business contexts. Utilitarianism focuses on
a. moral values.
b. religious beliefs.
c. the consequences of an action.
d. the nature of an action.
Lost in a canyon near Gila, Arizona, Hedy writes her will in crayon, on a paper bag,
while Ivan states orally how he wants his estate distributed. Most states do not permit
a. an olographic will.
b. a nuncupative will.
c. a will written on a paper bag.
d. a will written in crayon.
Deepwater Mining Corporation offers to sell East China Refining, Inc., a certain
quantity of unrefined oil. If East China sends an acceptance via Deepwaters authorized
mode of communication, it will be effective when it is
a. in transit.
b. received.
c. sent.
d. written.
Fact Pattern 14-B3
In selling a house, Robin tells Destry that the wiring and plumbing are of a certain
quality. Robin knows nothing about the quality, but it is not as she specifies. Destry
buys the house.
On learning the truth, Destry confronts Robin, who says she was not trying to fool
himshe was only trying to make a sale. This is
a. a mistake of value.
b. fraud.
c. innocent misrepresentation.
d. unconscionable.
Vision Optical Company and Wide Eyes Open, Inc. decide to combine. Xavier, a Wide
Eyes shareholder, is dissatisfied with the price that he will receive for his stock. In the
absence of fraud or other illegal conduct, Xaviers 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. urge other shareholders to insist on a higher price.
Yves negotiates an instrument to Zachary. Negotiation is the transfer of an instrument
a. for valuable consideration under a contract.
b. in a form and by a means that makes the transferee a holder.
c. pursuant to preliminary contract discussions.
d. without the payment of a recognized medium of exchange.
Fact Pattern 25-1B
Belle obtains a check payable to her order from Charmayne. Belle signs the back and
adds the notation “without recourse.
Refer to Fact Pattern 25-1B. Belles signature and the notation “without recourse
constitute
a. a blank indorsement.
b. a qualified indorsement.
c. a special indorsement.
d. a restrictive indorsement.
Refer to Fact Pattern 9- Minkas secretly installed software allows her to forward
transmissions from her unauthorized network to even more systems. This network is
a. a hacker.
b. a bot.
c. a botnet.
d. a worm.
If a lessor is a merchant, the risk of loss passes to a lessee on the lessees receipt of the
goods.
A concentrated industry is one in which either a single firm or a small number of firms
control a large percentage of market sales.
When an offeror does not specify a means of acceptance, acceptance can be made by
any means of communication that is reasonable.
Discovery is the process of obtaining information from an apposing party before trial.
A buyer may reject a sellers goods only if they fail to conform to a material term of the
contract.
A merger involves the legal combination of two or more corporations, only one of
which continues to exist.
Making any material modification in the terms of a debtors contract, without the
consent of the surety, will not discharge the suretys obligation.
A bank has no right to charge a customers account for the amount of a stale check.
A partys oral promise to pay anothers debt is enforceable if the guarantors main purpose
is to secure a personal benefit.
Often, an administrative agency enforces it own rules.
Plant life is not considered to be real property.
An attorney may be liable in negligence to any third party.
Under rules of professional conduct, an attorney should not engage in conduct
involving “misrepresentation.
When a third party harms a corporation, only the shareholders can bring a suit in the
corporations name against that party.
The three major stages of litigation are filing, answering, and appealing.