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.
In an action against Elin, Frank obtains a remedy. This is
a. an administrative agencys enforcement of its rule.
b. a principle of the law derived from earlier court cases.
c. a statute enacted by a state legislature or Congress.
d. the legal means to recover a right or to redress a wrong.
On behalf of Digital Cable Company, Elvin signs an instrument in which he promises to
deliver 1,000 feet of optic fiber cable to Financiers eBank on March This instrument is
a. negotiable.
b. nonnegotiable, because cable is not a medium of exchange authorized or adopted by
a government as currency.
c. nonnegotiable, because it does not indicate a specific type of cable.
d. nonnegotiable, because it does not recite any consideration.
Doctors Medical Clinic orders 1,000 bandages from Emergency Supplies Company but
fails to specify the sizes. The bandages are delivered in an assortment of sizes. Doctors
Medical Clinic may
a. accept the bandages “as is only.
b. accept the bandages “as is or reject the entire shipment only.
c. accept only the bandages that it wants and reject the rest.
d. reject the entire shipment only.
To Serena, the written law of a particular society at a particular time is most significant.
Serena is
a. a legal positivist.
b. a legal rationalist.
c. a legal realist.
d. a person who adheres to the natural law tradition.
Rona is Stus administrative assistant and both work for TriCounty Labor Inc. Stu tells
Rona that for sexual favors, he will give her an excellent performance review and
recommend a raise. This is
a. harassment on the basis of sexual orientation.
b. hostile-environment harassment.
c. not harassment.
d. quid pro quo harassment.
Nikita operates a sole proprietorship, a corporation, and a partnership. Nikita wants to
obtain relief for her individual debts and the debts of her corporation and partnership.
For each of these, Nikita may file a petition in bankruptcy for relief through
a. a liquidation.
b. a reorganization.
c. a repayment plan.
d. a family-farmer bankruptcy plan.
Global Tours, a travel agency, is a limited liability company. Global is exempt from
legal requirements that relate to
a. business name registration.
b. occupational licensing.
c. state tax registration.
d. none of the choices.
Sylvia creates a profile for Todays Date, Inc., an online dating service. She exaggerates
her appealing features and posts a photo of her friend Uva, whom Sylvia thinks is
prettier. Enticed by the profile, Van subscribes to the service so that he can contact
Sylvia. Van is most likely a victim of
a. undue influence.
b. fraud.
c. mistake.
d. nothing.
Blueberry Café signs an agreement with County Credit Bank to borrow $40,000 at 20
percent interest. Later, the state legislature passes a law lowering the maximum
permissible rate of interest to 15 percent. Blueberrys best argument for avoiding
payment to County Credit is that
a. performance of the contract is commercially impracticable.
b. payment of the loan would force the debtor into bankruptcy.
c. the law has rendered performance of the contract illegal.
d. the specific subject matter of the contract has been destroyed.
A firm named Scientific Discovery Corporation (SDC) makes an attempt to incorporate
for a purpose other than making a profit. SDC is
a. a foreign corporation.
b. an alien corporation.
c. a nonprofit corporation.
d. not a corporation.
Ridgeline Trucking wants to initiate a suit against Valley Farms by filing a complaint.
The complaint should include
a. an explanation to refute any defense the defendant might assert.
b. a motion for summary judgment.
c. a motion to dismiss.
d. a statement alleging the facts establishing Ridgelines basis for relief.
In the global environment of business, the law of a particular nation, such as Brazil,
China, or India, is classified as
a. environmental law.
b. global law.
c. international law.
d. national law.
To notify the public of a proposed rule, the Food Safety and Inspection Service, like
other federal agencies, publishes the proposal in
a. the news media.
b. a trade journal available to members of the industry.
c. the Federal Register.
d. an office memo that employees are free to take home.
Mica buys “Nature, a movie, through Open View, an online entertainment vendor.
Before completing the purchase and downloading “Nature, Mica is asked to review a
warning not to make and sell a copy of it but is not required to click “I agree. This
warning is
a. a browse-wrap term.
b. a click-on agreement.
c. a shrink-wrap agreement.
d. none of the choices.
An anonymous person posts online a defamatory message about Dewitt. Not knowing
the posters identity, Dewitt files a suit against “John Doe. Using the authority of the
court, Dewitt can obtain from the posters Internet service provider
a. an apology.
b. damages.
c. the identity of the poster.
d. none of the choices.
Davis points a gun at Eton, threatening to shoot him if he does not steal from his
employer, Freddys Convenience Store, and give the stolen funds to Davis. Charged with
theft, Eton can successfully claim, as a defense
a. nothing.
b. duress.
c. entrapment.
d. self-defense.
Fact Pattern 37-1A
Desi starts up eSites, an Internet service, and leases office space in a building owned by
Fred. The lease requires Desi to pay Fred a base rental of $1,250, plus 10 percent of
eSites profits, each month. The term is two years. Desi hires Gwen to work at eSites
tech support desk at an hourly wage of $12.50, plus a commission of 10 percent of the
profits. The term is also two years.
Refer to Fact Pattern 37-1A. Desi and Gwen are
a. not partners, because Gwen does not have an ownership interest or management
rights in eSites.
b. not partners, because the pay includes an hourly wage.
c. not partners, because the pay includes only 10 percent of the profits.
d. partners in a partnership for two years.
Fact Pattern 29-1A
Luxuro Vehicles, Inc., makes and sells automobiles to auto dealers, including
MotorPros Auto & Truck Sales. MotorPros sells the cars to consumers and businesses.
Oakes, a police officer, buys a Luxuro from MotorPros to drive in his off-duty hours.
Oakess Luxuro is
a. a consumer good.
b. an instrument.
c. equipment.
d. inventory.
Value Ventures, Inc., contracts to buy Umbrage Corporations assets. Umbrage breaches
the contract. Value files a suit against the corporation, seeking various remedies. The
doctrine of election of remedies has been eliminated in contracts involving sales of
a. goods.
b. intellectual property.
c. real property.
d. services.
Persons who favor the creation of a federal biotech agency to regulate the production of
genetically altered agricultural products should concentrate their lobbying efforts on
a. Congress.
b. federal administrative agencies that oversee agricultural products.
c. the United States Supreme Court.
d. the president of the United States.
Pam files a successful suit against Quality Market based on Qualitys negligence.
Normally, an award in such a suit consists of
a. comparative damages.
b. compensatory damages.
c. contributory damages.
d. punitive damages.
On April 1, KO Contractors, Inc., contracts to build a store for Lo-Cost Housewares at a
specific location in Metro City. On May 1, Metro changes its zoning law to prohibit the
construction of a commercial building at that location. Lo-Cost files a suit against KO.
In this situation
a. KO is in breach of contract.
b. Lo-Cost is in breach of contract.
c. the contract is discharged.
d. the contract is suspended.
Daria signs an instrument payable to the order of Employees Credit Union “on or before
June 15. This instrument is
a. negotiable.
b. nonnegotiable, because the maker can move up the payment date.
c. nonnegotiable, because moving up the payment date is optional.
d. nonnegotiable, because the exact payment date cannot be determined from the face of
the instrument.
During a union election campaign, Sapphire Blue Finance Company prohibits on-site,
work-hour solicitations by Credit Workers Union, which is seeking the workers
unionization, while permitting charities to solicit the same workers on-site and during
work hours. This violates
a. federal labor law.
b. federal election law.
c. federal solicitation law.
d. no federal law.
Before being transported, hazardous waste generated by Xtreme Industries, Inc., must
be properly labeled and packaged under the Resource Conservation and Recovery Act
by
a. the federal Environmental Protection Agency.
b. the local Resource Conservation and Recovery Committee.
c. the state Environmental Regulatory Commission.
d. Xtreme Industries, Inc.
Teona files a voluntary petition in bankruptcy for relief through a liquidation. Debts that
will not be discharged include claims for
a. domestic-support obligations.
b. money to be paid for goods not delivered.
c. contributions to employee benefit plans.
d. long overdue credit-card debt.
Bruno is an accountant. Under the Sarbanes-Oxley Act of 2002, the degree of
government oversight over the public accounting practices of Bruno and other
accountants was
a. decreased.
b. increased.
c. eliminated.
d. unchanged.
Sunny Glass Company and Collision Repair Center enter into a contract under which
Sunny agrees to deliver a certain quantity of auto glass to Collision Repair each month.
The contract does not include a price term. In a suit between the parties over the price, a
court will
a. determine a reasonable price.
b. impose the lowest market price.
c. impose the highest market price.
d. return the parties to the positions they held before the contract.
Harvey puts up a guitar for bids on eWay, a Web auction site. Faith makes the highest
bid and sends the payment, which Harvey receives, but he does not send the guitar to
her. This is online
a. auction fraud.
b. puffery.
c. retail fraud.
d. frustration but not fraud.
Flite-Craft Corporation makes and sells aircraft parts. In most states, the minimum
number of directors that must be present before Flite-Crafts board could transact its
business is
a. all of the directors authorized in the articles or bylaws.
b. a majority of the number authorized in the articles or bylaws.
c. any odd number.
d. one.
Danica borrows $1,000 from Evermore Bank, using her motorcycle as collateral. To
perfect its security interest, the bank must file its financing statement with
a. the secretary of state.
b. the county clerk.
c. the city treasurer.
d. the ward alderman.
When a breach of contract occurs, the innocent injured party has a duty to mitigate the
damages.
On the entry of an order for relief in a reorganization case, the creditors generally take
over the operation of the debtors business.
A borrower has the right to purchase the property after default by paying the full
amount of the debt, plus any interest and costs that have accrued.
On a partners dissociation, his or her duty of care to the partnership ends with respect to
events that occurred before the dissociation.
A mini-trial is a private proceeding in which each partys attorney argues the partys case
before the other party.
Typically, state laws have disclosure requirements and antifraud provisions patterned
after Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5.
Arnold is the chief executive officer of Beta Corporation. Arnolds responsibilities
include decisions on product development, marketing, and other significant business
directions. Arnold is subject to the approval and oversight of Betas board of directors.
Carol is a Beta manager whose duties include the firms day-to-day hiring, firing,
purchasing, and selling. Dave is a Beta salesperson, whose daily activities are con-
trolled by Carol. Erin writes technical manuals for Beta products according to Arnolds
instructions and subject to Betas control, but has no dealings with Beta customers or
suppliers. Fred edits the manuals on a contract-per-manual basis and is not otherwise
subject to Betas control. Who is a principal? Who is an agent? Who is an employee?
Who is an independent contractor?
If a buyer repudiates a contract, the seller cannot recover damages.
A drawers liability does not arise until presentment and notice of dishonor.
An offeror must have a serious intention to become bound by the offer.
For consideration to have “legally sufficient value, it must consist of goods or money.
Stanford Engineering, Inc., and Cornell Code Corporation market competitive software
products. Stanford launches an advertising campaign claiming that Cornell, instead of
testing its software before it is marketed, has its customers “test the software by using it.
Cornell knows this is not true but begins to lose sales to Stanford. On what grounds
could Cornell sue Stanford for injury to Cornells reputation?
Implied powers of a corporation are expressed in state statutes.
Once the time for performance under a contract has expired, the seller or lessor loses
the right to cure.
Those who find abandoned property cannot acquire ownership rights through mere
possession of it.
A judgment may go unpaid.
A lessor is a party who acquires a right to the possession and use of goods under a lease.
The joint ownership of property is a method of accomplishing a property transfer
without a will.
There is no cap on damages for discrimination in violation of the Civil Rights Act of
1964.
If no time for performance is stated in a contract, any time is acceptable.