Frida hires Gert, a real estate broker, to act as her agent to sell her house. The house
burns down before being sold. The agency agreement is likely
a. still in force if Frida gives Gert additional consideration.
b. still in force if Gert does not tell prospective customers.
c. terminated by mutual consent of the parties.
d. terminated by operation of law.
Oven Products Company makes microwave ovens. Pico discovers that his Oven
Products oven is defective and sues the maker for product liability based on strict
liability. To win, Pico must show that
a. Oven Products sold the oven to Pico.
b. Pico knew and appreciated the risk caused by the defect.
c. Pico suffered an injury caused by the defect.
d. the “defect was a commonly known danger.
Hill & Dale Credit Corporation makes mortgage loans to consumers secured by their
principal homes. For a Hill & Dale loan to qualify as a Higher-Priced Mortgage Loan
(HPML), its annual percentage rate must exceed, by a certain amount,
a. the average prime offer rate for a comparable transaction.
b. the consumers income-to-debt ratio.
c. the percentage of income that a consumer can devote to its payment.
d. the projected increase in market value of the consumers home.
Ansel owns Bar-B Ranch. Ansels only son Cy owns Double-D Ranch in the same
county. Ansel gives 90 percent of the Bar-B to Etta, a short-term employee. This gift
a. may lack the required element of “donative intent.
b. may lack the required element of “donors acknowledgement.
c. may lack the required element of “heirs acquiescence.
d. meets all of the requirements for an effective gift.
Cory enters into a contract with Dian to act as her personal sports trainer. If they later
dispute the meaning, and the contract contains unclear terms, the rules of contract
interpretation will give effect to
a. the parties intent as expressed in their contract.
b. what the defendant claims was the parties intent.
c. what the plaintiff claims was the parties intent.
d. what the parties now agree they intended.
Esteban and Florian want to form a limited liability company (LLC) to manage their
business, Gordian Nuts. LLC statutes have been adopted in
a. every state.
b. no state.
c. less than one-fifth of the states.
d. only Wyoming.
BroadView Company arranges to have Carrier Corporation, a common carrier, transport
500 DVD players from New York to California. Dan is Carriers driver. BroadView will
have no cause of action against Carrier if Carrier fails to deliver the players on time
because
a. authorities are stopping and searching all trucks entering California.
b. Carriers dispatcher mistakenly delays Dans departure.
c. Carriers truck is broken into and the players are stolen.
d. Dan has to wait two days in Denver for the truck to be repaired.
Odell, Prince, and Quinn are shareholders of Rite Corporation. Before a shareholders
meeting, they agree in writing to vote their shares together in a certain manner. Usually,
such agreements are held to be
a. invalid and unenforceable.
b. oppressive and irresponsible.
c. suspect and voidable.
d. valid and enforceable.
Kennedy Capital Corporation provides other firms with funds to expand operations. If
Kenney strictly complies with existing laws, the firm will
a. fulfill all business ethics obligations.
b. fulfill no business ethics obligations.
c. fulfill some business ethics obligations.
d. not need to fulfill any business ethics obligations.
Sid borrows Tonys paint sprayer to paint his house. Uma allows Vic to store his
posthole digger in her shed. The party with a right to use the bailed property is
a. neither Sid nor Uma.
b. Sid and Uma.
c. Sid only.
d. Uma only.
Hadley, an accountant, accumulates working papers while performing an audit for Ilene.
After the audit, these documents belong to
a. Hadley, with Ilene having a right of access to the papers.
b. Ilene, with Hadley having a right of access to the papers.
c. neither Hadley nor Ilenethe papers must be disposed of.
d. the Public Company Accounting Oversight Board.
The Constitution provides that no person shall be deprived of “life, liberty, or property
without due process of law. Under this clause, “persons include
a. animals and other “beings in nature.
b. buildings and other “manmade creations.
c. corporations and other “legal persons.
d. none of the choices.
Fact Pattern 31-1
First State Bank issues a letter of credit in favor of Oboe Company, an American firm,
to facilitate an international sales contract to buy resources from Lapland Mining, Ltd.,
a Finnish company.
Refer to Fact Pattern 31-1. First State Bank
a. is responsible for making sure that the parties perform the contract.
b. will make payment once the transaction has been completed.
c. will make payment when Lapland presents the proper documents.
d. none of the above.
Mary induces Nick to sign a contract by placing a gun to Nicks head. The contract is
void
a. only if the contract has an illegal purpose.
b. only if the terms are unfair to Nick.
c. under any circumstances.
d. only if the gun was loaded.
Hud and Iggy form Jerry-Bilt Construction to enter into a contract to build one bridge.
Under their partnership agreement, Jerry-Bilt is to dissolve when the bridge is built.
Iggy signs a contract for the firm to build a second bridge. Jerry-Bilt
a. dissolves as soon as the first bridge is built.
b. dissolves as soon as the second bridge is built.
c. dissolves immediately on Iggys signing of the second contract.
d. does not dissolve.
Uri and Vicky orally agree on the sale of Uris Nite Club to Vicky and note terms on a
pair of the Clubs napkins, which they both sign. A written memorandum evidencing an
oral contract that would otherwise be unenforceable must contain
a. every term.
b. the essential terms.
c. the preliminary terms.
d. the qualitative terms.
Fact Pattern 17-3
Mike loses his National Bank access card. He realizes his loss the next day but waits a
week to call National. Meanwhile, Opal finds and uses Mikes card to withdraw $3,000
from Mikes account.
Refer to Fact Pattern 17-3. When Mike receives his National statement, he demands
that the bank investigate the matter and recredit his account. The bank
a. has no duty to investigate.
b. must investigate and, if the dispute is not resolved within ten days, recredit Mikes
account (at least until the dispute is resolved).
c. must investigate and immediately recredit Mikes account (at least until the dispute is
resolved).
d. must investigate but need not recredit Mikes account.
Ollie negotiates an order instrument to Phil by
a. assignment of its rights under a contract.
b. delivery with any necessary indorsement.
c. making an unconditional promise to pay.
d. presenting it in response to a demand by B.
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.
Network Corporation files a suit against Omega, Inc., alleging that Omega breached a
contract to design and install custom software in Networks computer system. Network
is
a. the appellant.
b. the appellee.
c. the defendant.
d. the plaintiff.
The truncation (shortening) requirement of the Fair and Accurate Credit Transactions
Act of 2003 applies only to receipts that are “electronically printed. Eagle Motorcycle
Rents accepts reservations on-site and online. On-site customers are given tangible
paper receipts. Online customers are sent an online confirmation. The truncation
requirement applies to
a. Eagles online confirmations only.
b. Eagles tangible paper receipts only.
c. Eagles online confirmations and tangible receipts.
d. none of Eagles confirmations or receipts.
It is possible to copyright an idea.
Pattys parents give her a car as a graduation present. While Patty spends the summer in
Europe, her friend Rita agrees to keep the car in her garage. On Pattys part, this is
acquisition of property by
a. bailment.
b. capture.
c. find.
d. gift.
Lightspeed Corporation makes computers, each of which is packaged with a
shrink-wrap agreement. Milo buys a Lightspeed desktop. The shrink-wrap agreement is
most likely enforceable if
a. Milo buys the computer directly from Lightspeed.
b. Milo expressly agrees to the terms in the shrink-wrap agreement.
c. Milo reads the shrink-wrap agreement.
d. the terms in the shrink-wrap agreement concern warranties.
Faye owns the land on which Golden Spurs Ranch is situated, plus the ranch house,
barn, and other structures permanently attached to the land. Fayes brother Huey owns
everything else in the ranchs operationlivestock, feed, and so on. The personal property
is owned by
a. Faye and Huey.
b. Faye only.
c. Golden Spurs Ranch.
d. Huey only.
Cheesy Pizza Company contracts to sell 1,000 cases of frozen pizzas to Roller Rinks,
Inc., but refuses to deliver. Due to a spice shortage, Roller Rinks cannot obtain pizza
elsewhere. Roller Rinkss right to recover the goods from Cheesy is the right of
a. cover.
b. cure.
c. replevin.
d. specific performance.
In 2010, Online Marketing Corporation registers its trademark as provided by federal
law. After the first renewal, this registration
a. is renewable every ten years.
b. is renewable every twenty years.
c. runs for the life of the corporation plus seventy years.
d. runs forever.
Marbled Granite Company files a suit against Natural Stone, Inc., in a Colorado court
with general jurisdiction. In a Delaware court with limited jurisdiction, E-Sales
Corporation files a suit against First State Bank. The difference between general and
limited jurisdiction is
a. the subject matter of the cases that the courts can decide.
b. whether a case is being heard for the first time.
c. whether a suit is filed against a single individual or many people.
d. whether a suit is filed by a citizen or by a business.
Windshield Repair Shop (WRS) promises to pay Vincent $1,000 a week to work for
WRS. Vincent accepts and quits his job with Ultra Glass. WRS fails to provide a job for
Vincent. Vincent has a cause of action based on
a. an illusory promise.
b. a release.
c. past consideration.
d. promissory estoppel.
Rhett works at Scarletts Sandwich Café. After work, in the parking lot, Rhett finds a
diamond ring lost by Thalia. Title to the ring is possessed by
a. Rhett.
b. Scarletts.
c. Thalia.
d. the state.
Consumer Payments Processing Corporation (CPPC) and Mall Kiosk Company make a
deal for CPPCs services, via e-records. Under the UETA, an e-record is considered
received when
a. it enters the recipients processing system in a readable form.
b. the recipient is aware of its receipt.
c. the recipient is aware that it has been sent.
d. it leaves the senders control.
Aromatic Tea Company and Savory Stores, Inc., enter into a contract for a sale of tea.
The contract includes the term “F.O.B. Upriver City, which is Savorys location. This
means that the contract is
a. a bailment contract.
b. a destination contract.
c. a shipment contract.
d. a transportation contract.
The implied warranty of habitability does not apply to substantial physical defects that a
landlord has had a reasonable time to repair.
A lawsuit involving a federal question can originate in a federal court.
If a buyer wrongfully refuses to accept goods that conform to a contract, the seller may
recover damages.
Overestimating the value of an object is a mistake for which a court will normally
provide relief.
On May 1, Brand Name Industries, Inc. (BNI), sent Carol a letter, via overnight
delivery, offering to employ her to audit BNIs financial statements for the current year
for $10,000. In the letter, BNI stated that Carol had ten days to accept. On May 5, Carol
sent BNI a fax that stated, “The price for the audit seems too low. Would you consider
paying $12,000? BNI received the fax. The next day, Dan offered to conduct the audit
for $8,000. On learning of Dans offer, Carol immediately e-mailed BNI, agreeing to do
the work for $10,000. BNI received this e-mail on May 7. Explain why BNI and Carol
do, or do not, have a contract.
To be negotiable, an instrument must be payable in money.
A license permits the use of intellectual property for certain limited purposes.
False imprisonment occurs when a person restrains another intentionally and without
justification.
Misrepresentation of an opinion is an element of fraud.
If a nonconforming installment substantially impairs the value of a whole contract, the
buyer can treat the entire contract as having been breached.
There is at least one circumstance in which a person cannot refuse to testify.
Malpractice is professional negligence.
An offer to form a unilateral contract is accepted by a promise to perform.
Limited liability companies (LLCs) are governed by state LLC statutes.
The state can bring an action to dissolve a corporation that has failed to pay its annual
taxes.
An accountants liability under the Section 10(b) and Rule 10b-5 of the Securities
Exchange Act of 1934 requires privity of contract.
A business firm can sometimes predict whether a given action is legal.
Pumping up a company occurs when a single person using multiple aliases on an online
forum creates the illusion of widespread interest in a stock.