The E-Sign Act preempts the uniform version of the Uniform Electronic Transactions
Act (UETA).
To finance the purchase of a house from Tuna, Uri signs an instrument promising to pay
to “Verity Mortgage Service $160,000 with interest in installments with the final
payment due July 10, To be negotiable, this instrument must include the signature of
a. a non-party witness.
b. Tuna or Tunas realtor.
c. Uri.
d. Veritys chief financial officer.
Fact Pattern 28-1
Nika owns land in Ohio. Her ownership rights include the right to sell or give away the
property without restriction, and the right to commit waste, if she chooses.
Refer to Fact Pattern 28-1. Nika conveys some of her land to Reggie with the right to
possess and use the property for a certain period of time. Nika has given Reggie
a. a fee simple absolute.
b. a leasehold estate.
c. a life estate.
d. an easement.
Rural Development Corporation (RDC) and Smike enter into a contract for the
clear-cutting of RDCs fifty-acre tract for which RDC agrees to pay Smike. Smike
transfers his duty to log the tract under the contract to Timber Logging Company.
Timber is
a. a delegatee.
b. an assignee.
c. an obligee.
d. a prohibitee.
Elmo, a minor, misrepresents his age to be twenty-one and contracts to buy a car from
Fine New Autos. Ordinarily, Elmo can disaffirm the contract
a. only if he can prove that Fine New Autos did not know his true age.
b. only if he can prove that Fine New Autos knew his true age.
c. under any circumstances.
d. under no circumstances.
Fact Pattern 25-1
Ruben is a shareholder of Speed Bikes Company (SBC). When the directors fail to
undertake an action to redress a wrong suffered by SBC, Ruben files a suit on the firms
behalf.
Refer to Fact Pattern 25-1. Rubens suit is a shareholders
a. indemnification suit.
b. derivative suit.
c. proxy suit.
d. preemptive suit.
In the Braddock case, in weighing the facts that made up the elements of the plaintiffs
claim, the majority cited as a significant factor
a. assurances that were not incorporated into written documents.
b. the arms length business transactions between the parties.
c. the expectation of the good faith of a family member.
d. the plaintiffs business and professional experience in the industry.
Brad is an employee of Custodial Service, Inc. In deciding whether Brad acts within the
scope of his employment when he commits a tort against Didi, a court will not consider
whether
a. Brad indicated that he was acting on behalf of Custodial.
b. Custodial authorized the act.
c. Custodial furnished the means by which the injury was inflicted.
d. the act is one commonly performed by employees for their employers.
United Industrial Corporation gives preferential treatment in hiring and promotion to
the members of all protected classes. This treatment results in discrimination against
members of the majority. This is
a. a bona fide occupational practice.
b. a business necessity.
c. constructive discharge.
d. reverse discrimination.
On behalf of Premier Shipbuilding Corporation (PSC), Rita orders 1,000 cases of
1/4-inch nuts from Steel Parts Companys 10,000-case lot. Steel Parts separates 1,000
cases from the lot. Title and risk of loss
a. remain with Steel Parts until PSC acknowledges tender of delivery.
b. remain with Steel Parts until PSC accepts 1,000 cases.
c. shift to PSC after it accepts the nuts and inspects them for defects.
d. shift to PSC when Steel Parts separates the cases.
Marquis Companys liabilities exceed its assets, but the firms employees falsify its
books to reflect a positive net worth. Marquis hires Nan & Ollie, an accounting firm, to
prepare a balance sheet, which is certified to show a positive net worth. Pure Credit
Corporation relies on the balance sheet to make a loan to Marquis. When the firm
defaults, Pure Credit files a suit against Nan & Ollie. Under the Ultramares rule, the
accounting firm is most likely
a. liable because Nan & Ollie owed a duty of care to all third parties.
b. liable because Nan & Ollie owed a duty of care to Marquis.
c. liable because Nan & Ollie owed a duty to any foreseeable user.
d. not liable because Nan & Ollie and Pure Credit were not in privity.
Patsy possesses twenty-four acres of remote, rugged land. Patsy has the right to use the
property, including extracting silver from an existing mine, for life. Patsy also has the
right to lease the land for a period not to exceed her life. Patsys ownership interest is
a. a fee simple absolute.
b. a leasehold estate.
c. a life estate.
d. the power of eminent domain.
Sudan seizes the assets of Triage Medical, Inc., a U.S. firm. Triages recovery from
Sudan in a U.S. court may be prevented by
a. the act of state doctrine.
b. the doctrine of sovereign immunity.
c. the Foreign Corrupt Practices Act.
d. the principle of comity.
Cathy assures Don that she will deliver his products as he directs. An assertion that one
will do something in the future is part of the definition of
a. a declaration.
b. a moral obligation.
c. an ethical principle.
d. a promise.
Yvon is charged with the crime of theft for taking Zachs briefcase, which Yvon
mistakenly thought was hers. A mistake of fact is a defense
a. if the fact was not reasonably made known to the public.
b. if the mistake negates the mental state necessary to commit a crime.
c. if the perpetrator was intoxicated.
d. under any circumstances.
The Fair and Accurate Credit Transactions Act of 2003 prohibits merchants from
priniting more than the last five digits of a credit card number or the expiration date on
any receipt provided to the cardholder at the point of sale. According to recent court
decisions, this requirement applies to
a. e-mailed receipts only.
b. paper receipts and paperless receipts of all kinds.
c. paper receipts only.
d. Web page screen shots and paper receipts only.
Nero signs a check “pay to the order of Olive drawn on Neros account in Plum Bank.
Olive signs the back of the check. Secondary liability on this check extends to
a. Nero and Olive only.
b. Nero and Plum Bank only.
c. Nero only.
d. Plum Bank only.
Joy and Kris enter into a contract for Kris to lay sod in Joys yard for which she agrees
to pay Kris. When Kriss schedule conflicts, she contacts Leza, to whom Kris “assigns
all rights under the contract. Kris is
a. absolved of any liability under the contract.
b. in breach of the contract with Joy.
c. liable to Joy if Leza does not perform.
d. liable to Leza for inducing a prohibited contract.
Clark is a shareholder of Bedrest Mattress Company. Clark will be deemed to have a
fiduciary duty to Bedrest and its minority shareholders if he has
a. preferred stock.
b. a right of first refusal.
c. a sufficient number of shares to exercise de facto control.
d. watered stock.
Swim & Trim Fitness Corporation wants to formulate a plan under which it pays a
portion of its debts and is discharged of the remainder while continuing in business. To
accomplish this goal, Swim & Trim should file a petition in bankruptcy for relief
through
a. a liquidation.
b. a reorganization.
c. a repayment plan.
d. a family-farmer bankruptcy plan.
Urbana performs a contract with Virgil to add a sun porch to Virgils house, but Virgil
does not pay. In most states, Urbana can create a lien and place it on Virgils property by
filing
a. a written guaranty contract.
b. a writ of attachment.
c. a writ of execution.
d. a written notice of lien.
Property Financial Corporation makes loans that qualify, under a Federal Reserve
Board amendment to Regulation Z, as Higher-Priced Mortgage Loans (HPMLs). Quinn
applies to Property Financial for an HPML. To make the loan, the lender must
a. convince an appraiser to inflate the value of the property.
b. impose a prepayment penalty for the duration of the loan.
c. structure the loan to specifically evade the HPML protections.
d. verify the borrowers ability to repay the loan.
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.
Macro Marketing, Inc., and National Food Corporation (NFC) discuss the terms of a
contract. Macro faxes NFC a memo on Macros letterhead that summarizes the items on
which they agree. NFC begins to perform, but Macro refuses to pay. Between Macro
and NFC, the memo is
a. an oral contract.
b. a pre-contract.
c. a written contract.
d. no contract.
The payment of Mos debt to Neil is guaranteed by Mos personal property. This is
a. governed by Article 2 of the UCC.
b. governed by Article 3 of the UCC.
c. governed by Article 9 of the UCC.
d. not governed by the UCC.
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.
Sharon, the human resources director for Tempo Corporation, attempts to comply with
the law in dealing with applicants and employees. One of the challenges Sharon faces is
that the legality of an action is
a. always clear.
b. never clear.
c. sometimes clear.
d. usually clear.
Hillside Homes, Inc., and Ideal Builders, Inc., enter into a construction contract that
includes six pages of detailed calculations. Later Hillside, whose project manager
compiled the figures, discovers that some numbers were multiplied incorrectly, but
Ideal refuses to make changes. A court would most likely
a. allow the parties to rescind the contract.
b. award damages to Hillside for the mistakes.
c. award damages to Ideal for the mistakes.
d. enforce the contract without requiring changes.
Owen takes a Paisley-made pinball machine to Quality Games, Inc., for repair. Lacking
certain parts, Quality ships the game to Regal Repair Company. While in Regals
possession, the game is damaged. Quality can recover for the damage from
a. no one.
b. Owen.
c. Paisley.
d. Regal.
Lyle, vice-president of sales for Mi-T Electric, Inc., adheres to Judeo-Christian religious
ethical standards. With respect to their application, these standards are
a. absolute.
b. analytical.
c. discretionary.
d. utilitarian.
A party must own property to have an insurable interest in it.
Stocks represent the borrowing of funds by firms.
In the United States, a patent is given to the first person to invent a product or process.
A business firm may have an insurable interest in the life of any of its employees,
except a key employee.
Restrictions on exports may include tariffs.
A seller with void title can transfer good title to a good faith purchaser for value.
The loan that a lender provides to enable a borrower to purchase real property is a
mortgage.
A power of attorney can be given only to an actual attorney.
The officers employees of each corporation involved must approve a merger.
Anything less than substantial performance is a material breach of contract.
It is not unlawful for an employer to retaliate against an employee who has opposed a
discriminatory employment practice.
Quasi contracts allow the courts to act as if a contract exists when there is no contract.
Accountants and other professionals do not face liability under the common law for any
breach of contract.
Mitch is a director and officer of Numero Uno, Inc. Mitch makes a marketing decision
that results in a dramatic decrease in profits for Numero Uno and its shareholders. The
shareholders accuse Mitch of breaching his fiduciary duty to the corporation. What is
Mitchs best defense against this accusation? Later, the Numero Uno board considers a
resolution for the firm to compete with One-of-a-Kind Corporation. Mitch is a director
and shareholder of One-of-a-Kind. What is Mitchs responsibility in this situation?
A contract for an international business deal should not specify a method of payment.