Hi-Tech Company contracts to sell fiber optic cable to Internet Services, Inc. Hi-Tech
may bring an action to recover the purchase price and inci-dental damages if Internet
a. accepts the cable and pays for it.
b. accepts the cable but does not pay for it.
c. rejects the cable.
d. revokes acceptance of the cable.
Foreign exchange markets comprise a worldwide system for buying and selling
currency.
a. True
b. False
Sound Financials Corporation sends daily e-mail ads to its previous customers and
those who have opted to receive the notices.Instable Investments, Inc., sends e-mail ads
to any e-mail address that Instable can find on the Web or otherwise generate.
Refer to Fact Pattern 6-1.Sound Financials and Instable Investments are subject to the
laws of the states in which they are located and do business. Thirty-six states
a. prohibit or regulates the use of spam.
b. require the use of spam by business entities.
c. ban the use of spam altogether.
d. preempt the application of state law to commercial e-mail.
Joy and Karl contract for the sale of Joys prize-winning show dog for $1,000. Unknown
to either party, the dog has died. Karl is
a. entitled to another dog of equivalent value.
b. not required to pay due to the bilateral mistake.
c. not required to pay due to the unilateral mistake.
d. required to pay because he assumed the risk the dog might die.
Smalltown, Alabama is incorporated by the government. Smalltown is
a. a foreign corporation.
b. a public corporation.
c. a private corporation.
d. an alien corporation.
Marys home is in a state that has a $30,000 homestead exemption. Mary de-faults on a
$60,000 debt that she owes to Nina. Marys home is sold at auc-tion for $80,000.
Refer to Fact Pattern 20-1. Nina may recover
a. $0.
b. $30,000.
c. $50,000.
d. $60,000.
The Federal Reserve System acts as a clearinghouse where banks exchange checks.
a. True
b. False
Consequential damages are foreseeable damages that arise from a partys breach of a
contract.
a. True
b. False
A guarantor is secondarily liable on an obliga-tion.
a. True
b. False
An instrument “payable to bearer is negotiated by delivery.
a. True
b. False
Opie offers to sell his guitar to Pinky for $200. Pinky agrees. They complete and sign a
printed form and Pinky gives Opie a check for the price. The check is
a. a formal contract.
b. an informal contract.
c. aquasi contract.
d. no contract.
Privity of contract establishes the basic concept that third parties have no rights in
contracts to which they are not parties.
a. True
b. False
Ellen pays State Bank $500 plus a service fee to draw a check on itself payable to Pauls
Plumbing. Which of the following parties is responsible for paying the check?
a. Only Ellen
b. Both Ellen and State Bank
c. Only State Bank
d. None of the parties
The agreement resulting from a buyer clicking on a box containing the words “I agree is
known as a click-on agreement.
a. True
b. False
A gift to a dying donee is a gift causa mortis.
a. True
b. False
During a union election campaign, Sapphire Blue Finance Company prohibits on-site
solicitations by Credit Workers Union, which is seeking the workers unionization, while
permitting charities to solicit the same workers. This violates
a. federal labor law.
b. federal elections law.
c. federal employment discrimination law.
d. no federal law.
Online defamation is wrongfully hurting a persons reputation by communicating false
statements about that person to others online.
a. True
b. False
The manufacture, import, sale, and distribution of devices or services for the
circumvention of encryption software is prohibited.
a. True
b. False
Amelia executes a separate written instrument to amend her prior will. This separate
document is
a. a codicil.
b. a holographic will.
c. a living will.
d. a nuncupative will.
Even if goods are not identified to the contract, the title and risk of loss can still pass
from the seller to the buyer.
a. True
b. False
Delivery of intangible personal property is never accomplished by constructive
delivery.
a. True
b. False
Lora files a suit in Michigan against Ned over the ownership of a boat docked in a
Michigan harbor. Lora and Ned are residents of Ohio. Ned could ask for a change of
venue on the ground that Ohio
a. has a sufficient stake in the matter.
b. has jurisdiction.
c. has sufficient minimum contacts with the parties.
d. is a more convenient location to hold the trial.
A customer who writes a bad check may be subject to criminal prosecution.
a. True
b. False
A corporation whose shares are held by relatively few persons is a close corporation.
a. True
b. False
Criminal acts are prohibited only by federal government statutes.
a. True
b. False
Scienter exists if a party makes a statement that he or she be-lievesto be scientifically
verifiable.
a. True
b. False
Dwayne, an electrician, files a suit against Electro Mechanix, Inc., alleging that its
circuit breakers are unreasonably dangerous due to the possibility of electrical shock.
Dwaynes suit is most likely to
a. fail, because Dwayne assumes the risk if he uses an Electro product.
b. fail, because Dwayne is a knowledgeable user.
c. succeed, because the danger is open and obvious.
d. succeed, because Electros products are not safe for all uses.
If a buyer wrongfully refuses to accept goods that conform to a contract, the seller can
recover damages.
a. True
b. False
ViolentVideoGames, Inc. markets a variety of shooting, fighting and hunting video
games. A state statue is enacted that requires all video game manufacturers to label any
games with an option to kill something as “excessively violent. A court would likely
hold this regulation to be
a. an unconstitutional restriction of speech.
b. constitutional under the First Amendment.
c. justified by the need to protect individual rights.
d. necessary to protect national interests.
Tristan hires Stefani to perform at Tristans Club, but she breaches the agreement to
accept a higher-paying job at Rock Star Arena. Tristan files a suit against her. The court
will most likely
a. award damages to Tristan.
b. cancel Stefani and Rock Stars contract.
c. order Stefani to perform the contract.
d. reform Tristan and Stefanis contract.