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Gulf Air, Inc., is the major wholesale distributor of software in the state of Florida. Its
closest competitor is Fluid Systems Company, another Florida firm. The two firms
agree that Gulf Air will operate in south Florida and Fluid Systems will operate in north
Florida. This is
a. a group boycott.
b. a market division.
c. a joint venture.
d. an exclusive-dealing contract.
Food Packaging, Inc., agrees to sell 50,000 6-ounce yogurt containers to Golden Dairy
Company. Food can obtain only 20,000 of the 6-ounce containers, but also ships 30,000
more expensive 8-ounce containers for the same price. Under these circumstances,
Golden
a. cannot reject delivery, and Food cannot later replace the containers.
b. cannot reject delivery, but Food can later replace the containers.
c. may reject delivery, and notice to Golden of Food's intent to cure will give Food a
reasonable time to replace the containers.
d. may reject delivery, but Food cannot later replace the containers.
Lucky owns Mud Flats Ranch, which is situated on certain Nevada acreage. The
exterior boundaries of the land extend
a. 100 feet into the earth and 100 feet into the atmosphere.
b. one mile into the earth and one mile into the atmosphere.
c. to infinity and beyond.
d. to the center of the earth and up to the farthest reaches of the atmosphere.
Federico, the president of Gems Retail Corporation, claims that certain actions by the
federal government and the state of New Mexico infringe on rights guaranteed by the
Bill of Rights. Most of these rights limit
a. neither New Mexico nor the federal government.
b. the federal government only.
c. New Mexico and the federal government.
d. New Mexico only.
Bret runs an illegal business and pays Cal, a law enforcement officer, not to interfere.
The payments are discovered. Bret and Cal are sent to prison. Bret can successfully sue
Cal for the return of
a. all of the money paid to Cal.
b. only the money paid to Cal that has been spent.
c. only the money paid to Cal that has not been spent.
d. none of the choices.
Jean sends e-mail to Irwin promising a percentage of the amount in an African bank
account for assistance in transferring the funds to a U.S. bank account. Irwin forwards
his account number, but the funds are never sent. Instead, Jean quickly withdraws the
funds in Irwin's account. This is
a. online greed but not fraud.
b. an online "fool-me-once, shame on you" occurrence but not fraud.
c. online gambling but not fraud.
d. online fraud.
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.
Principal Resources Corporation contracts with Quality Construction to build an
addition to Principal's corporate office building. Quality contracts with Rite Supply
Company for materials for the addition but refuses to pick up the materials. Meanwhile,
Principal hires Skye, a certified public accountant, to work in its cost-accounting
division as an employee, with no authority to hire or supervise others. Skye asks Theo,
an outside experienced accountant, to advise her on certain accounting procedures but
fails to pay Theo for the service. Principal also contracts with Uma, a salesperson, to
solicit orders for its products in a designated territory. Uma obtains an order from Verity
Industries, Inc., which is assured the order will be filled soon. But Uma does not follow
through with the paperwork and fails to submit the order to Principal. Verity suffers a
loss. Rite Supply, Theo, and Verity Industries claim Principal is liable under agency law.
Discuss fully whether an agency relationship was created by Principal with Quality
Construction, Skye, or Uma.
Seafood Canning Corporation keeps a file of I-9 verifications forms. To inspect this file,
the appropriate government officer must obtain
a. a subpoena and a warrant.
b. a subpoena or a warrant, but not both.
c. not a subpoena, a warrant, or the employer's consent.
d. the employer's consent.
Computer World (CW), after repossessing a multimedia system from Dave, a consumer,
decides to keep the system instead of reselling it. CW sends written notice to Dave. CW
can now keep the system
a. only after attempting an unsuccessful public sale of the system.
b. only after notifying any other appropriate secured party.
c. unless Dave objects.
d. under any circumstances.
A failure of the Federal Bureau of Investigation to comply with a request under the
Freedom of Information Act (FOIA) may be challenged in
a. a federal district court.
b. a hearing before the U.S. Freedom of Information Agency.
c. a meeting with Congress's FOIA subcommittee.
d. a special conference with the president of the United States.
Over a forty-year period, Ewa worked in a variety of jobs. She was also occasionally
unemployed, briefly hospitalized, and suffered a temporary disability. She retired last
year. The key law on all of these subjects is
a. the Consolidated Omnibus Budget Reconciliation Act.
b. the Employee Retirement Income Security Act.
c. the Federal Insurance Contributions Act.
d. the Social Security Act.
Serious Gamers, LLC, is a limited liability company. Among the members, a dispute
arises that their operating agreement does not cover. No statute applies. The dispute is
governed by the principles of
a. corporate law.
b. partnership law.
c. sole proprietorship law.
d. syndicate law.
Pink Boutique Company and Purple Kiosk Company decide to consolidate. This
corporate combination does not require the approval of
a. Pink and Purple's directors.
b. Pink and Purple's officers and employees.
c. Pink's shareholders.
d. Purple's shareholders.
Fact Pattern 32-2
Brad, Carlos, and Dora are general partners in Eastside Physicians, a medical clinic.
Refer to Fact Pattern 32-2. Brad's dissociation from the firm results in
a. the automatic termination of the firm's legal existence.
b. the partnership's buyout of Brad's interest in the firm.
c. the immediate maturity of all partnership debts.
d. the temporary suspension of the partnership's business.
Ollie buys a cup of coffee for $2, a magazine for $5, and a cellphone for $600. The
requirement of a writing for the enforceability of a contract for a sale of goods at a
certain price or more is governed by
a. the common law.
b. the parol evidence rule.
c. the parties' agreement.
d. the Uniform Commercial Code.
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. a wholly different contract is agreed to.
d. a wholly different contract is imposed "as if" the parties had agreed.
Fact Pattern 35-1
Ray is a shareholder of Small Biz Company (SBC). When the directors fail to undertake
an action to redress a wrong suffered by SBC, Ray files a suit on the firm's behalf.
Refer to Fact Pattern 35-1. Ray's suit is a shareholder's
a. business-judgment rule suit.
b. derivative suit.
c. duty-of-care suit.
d. duty-of-loyalty suit.
The government of Japan sets a limit on the amount of rice that can be imported from
the United States. This is
a. a dumping duty.
b. an antidumping duty.
c. a quota.
d. a tariff.
Final Foto, Inc., makes photo and video editing software, which includes a shrink-wrap
agreement. Gert buys a package of the software. With respect to the contract for the
software's purchase, the shrink-wrap agreement may not be enforced if
a. Gert does not read it.
b. Gert learns of it after contracting.
c. Gert learns of it before contracting.
d. the quality of the software is poor.
Sid induces Ty to enter into a contract for the sale of a warehouse about which Sid
fraudulently misrepresents a number of material facts. Sid also tells Ty that his
commission is 6 percent, but their signed, written contract states "12 percent." The parol
evidence rule governs
a. contracts that are induced by fraud.
b. contracts that must be in writing to be enforceable.
c. the admissibility in court of oral evidence.
d. the reformation of oral and written statements into one contract.
Fact Pattern 25-2
Rico signs a lease on behalf of Start-Up Games, Inc., with Tower Office Suites. As part
of the lease, Rico signs a document titled "GUARANTY," which states that it is "an
absolute guaranty" of the lease's performance.
Refer to Fact Pattern 25-2. If Start-Up stops paying the rent, it is most likely that li-
ability or loss for the unpaid amount will rest with
a. no one.
b. Rico and Start-Up.
c. Tower Office Suites.
d. the other tenants on the same property.
On behalf of RiteNow Collection Agency, Sid poses as a police officer in an attempt to
collect payment from Tylo for a shipment of scuba equipment that she returned to
Undersea Company two months earlier. This violates
a. no federal law.
b. the Fair Credit Reporting Act.
c. the Fair Debt Collection Practices Act.
d. the Truth-in-Lending Act.
Overnight Delivery Service delivers a package to Pam. At the request of Overnight's
delivery person, to acknowledge receipt Pam signs a digital pad. This signing creates
a. a cybernotarized signature.
b. a digitized handwritten signature.
c. an asymmetric .cryptosystemic signature.
d. a public-key infrastructure digital signature.
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.
Maksum floods virtual mailboxes with unsolicited junk e-mail, consisting of ads and
other messages. This e-mail is
a. spam.
b. bot.
c. piracy.
d. phish.
Fact Pattern 11-5
Dag and Enita are in an auto accident. Dag offers Enita $2,000 if she promises not to
pursue her potential legal claim against him. Enita agrees. Later, Enita discovers that it
will cost $1,500 to repair her car and $4,000 to cover her medical expenses for a latent
injury.
Refer to Fact Pattern 11-5. The agreement between Dag and Enita is
a. a covenant not to sue.
b. an accord and satisfaction.
c. a release.
d. promissory estoppel.
Flexo Trucking Company transports hazardous waste. Garn is a Flexo driver, whom the
company knows drives longer hours than federal regulations permit. One night, Garn
exceeds the limit and has an accident. Spilled chemicals contaminate Hill City's water
source, forcing the residents to move away. Flexo acted unethically because
a. Flexo showed reckless disregard for Hill City's residents and others.
b. Garn exceeded the federal time limit.
c. harm was caused by an unfortunate accident.
d. Hill City should have better protected its water source.
Steve steals one of Tricia's checks and forges her signature. Tricia's bank, Unity Bank,
pays the check. Tricia can recover from
a. Steve, but not Unity Bank.
b. Unity Bank, which cannot recover from Steve.
c. Unity Bank, which can recover from Steve.
d. no one.
Felicity and Gideon want to form and do business as Home Healthcare Corporation. A
corporation is
a. a natural being.
b. a tangible thing.
c. an artificial person.
d. a visible radiance.
A corporate officer is not an agent for the corporation.
A seller must provide a written warranty for consumer goods.
An agreement that requires a franchisee to buy materials exclusively from the
franchisor may violate antitrust laws.
A mistake of fact can be a defense to criminal liability.
An accountant's liability under the Securities Act of 1933 requires privity of contract
with the purchaser of a security.
In May 2009, National Biotech Corporation generally advertises that it will make a $4
million offering of stock in June. National makes the offering as advertised and, ten
days after the first sale, notifies the Securities and Exchange Commission (SEC). All
buyers of the stock are given material information about the company, its business, and
the stock. Before the end of the year, the offering is completely sold out. The buyers
include forty unaccredited investors and fifty accredited investors. National does not
register the offering. The SEC files a suit against National, seeking civil sanctions on
the ground that this offering was not exempt from registration. National argues that the
applicable exemption is Rule 505 of Regulation D of the Securities Act of 1933 and that
because of this exemption, any resale of the stock is also exempt. Who is correct?
A breach of contract may entitle the innocent party to rescind the contract.
For federal income tax purposes, a limited liability company can choose to be taxed like
a corporation.
Reformation allows a court to rewrite a contract to reflect the parties' true intentions.
Informal agency actions are exempt from the Administrative Procedure Act's
requirements.
Incredible eSales Corporation is a new Internet business. How can Incredible eSales
obtain capital to finance its operations?
A person who commits larceny can be sued under tort law.
Federal statutes and regulations do not cover stationary sources of air pollution.
Corporations, unlike persons, cannot be liable for crimes.
In a consolidation, two or more corporations combine so that each corporation
continues to exist.
Certain employers must provide their employees with up to twelve weeks of family or
medical leave during any twelve-month period.
Under rules of professional misconduct, an attorney should not engage in conduct
involving deceit.
Proceeds consist of whatever is received when collateral is sold.
Under a letter of credit, the issuer is bound to pay the beneficiary after the beneficiary
complies with the terms of the letter.
