Housemate, Inc., makes and sells a variety of household products. With a fair amount of
certainty, Housemate’s decision makers can predict whether a given business action
would be legal in
a. all situations.
b. many situations.
c. no situations.
d. practically no situations.
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.
Iggy hires Joy to act as his agent to purchase Kup-a-Koffee Company. Iggy tells Joy to
reveal only that she is buying the firm on behalf of a third party, without telling
Kup-a-Koffee’s seller who that third party is. Iggy is
a. a disclosed principal.
b. an implied principal.
c. an undisclosed principal.
d. a partially disclosed principal.
A petition for a discharge in bankruptcy under Chapter 13 may be filed by
a. Gracie, the sole proprietor of Home Net Services.
b. Internet Portals & Pages, a partnership.
c. World Web Services, Inc., a corporation.
d. Internet Portals & Pages or World Web Services, Inc..
Teatro Restoration, Inc., begins renovating an old theater for Urban Edge Productions,
but after three months Teatro demands an extra $250,000. Urban Edge agrees to pay. If
Teatro says it is asking for the extra $250,000 because it has encountered extraordinary
unforeseen difficulties that will add considerable cost to the project, the agreement is
a. enforceable as the consideration is past.
b. enforceable because of unforeseen difficulties.
c. unenforceable as an illusory promise.
d. unenforceable due to the preexisting duty rule.
Laney is a resident of Maine. Delacorte is a Canadian. They dispute the ownership of
Petite Isle, an island in North Rapids River on the border between Canada and the
United States. The diversity of the parties’ citizenship could serve as a basis for
a. federal jurisdiction.
b. general jurisdiction.
c. limited jurisdiction.
d. universal jurisdiction.
On Monday, Neil tells Outdoor Landscaping, Inc., that he will pay Outdoor $500 if
various tasks are completed by Friday. On Wednesday, when Outdoor has finished more
than half of the work, Neil says that he has changed his mind. These parties had
a. an expired contract when Neil said that he had changed his mind.
b. a quasi contract when Neil said that he would pay for certain work.
c. a unilateral contract as soon as Outdoor began to perform.
d. no contract.
Precise Engineering, P.C., is a California-based firm that does business with clients
throughout North America. Precise Engineering plans and executes construction
projects, and buys and sells developed and undeveloped land, and related equipment
and supplies. Precise Engineering has had to confront work-site theft and vandalism.
With respect to these circumstances, the Uniform Commercial Code (UCC) provides a
framework for
a. commercial transactions for the sale of and payment for goods.
b. international construction contracts.
c. domestic and foreign transactions in real estate.
d. prosecuting crimes against business interests.
Garth dies without a will. The distribution of Garth’s property, including his eleven
forested acres near Hope, Arkansas, is prescribed by
a. a court-appointed executor.
b. federal probate statutes.
c. state intestacy laws.
d. Garth’s relatives.
Community Construction Corporation offers to buy from Solid Cement Company a
certain quantity of cement for a certain price. Solid can accept the offer by
a. doing nothing.
b. promising to ship or promptly shipping the cement.
c. promising to ship the cement only.
d. promptly shipping the cement only.
Elmo pays First National Bank $1,000 plus a service fee to draw a check on itself made
payable to Go Delivery Service. This is
a. a cashier’s check.
b. an overdraft.
c. a stale check.
d. a stop-payment order.
First Design Corporation, a business firm, and Glen, a consumer, make a deal over the
Internet that involves e-signatures. Under the E-SIGN Act, the e-signatures
a. are as valid as signatures on a paper document.
b. must be
encrypted to be enforceable.
c. must have been inscribed on a digital tablet to be authenticated.
d. must relate to a partnering agreement.
Garden Field Farms and Haute Gourmet Restaurant, Inc., enter into a contract for a sale
of lettuce before Haute Gourmet declares bankruptcy. Garden Field can stop delivery of
the goods in transit
a. only if the quantity is at least a carload.
b. only if the quantity is at least a planeload.
c. only if the quantity is at least a truckload.
d. regardless of the quantity.
Emil enters into a contract to buy Foley’s cultivated bottomland and hill and bench
acreage if County AgriCredit will lend Emil the funds to pay for the land. Emil’s duty to
perform is
a. absolute.
b. conditional.
c. manifest.
d. irresolute.
Fern contracts to buy a franchise from Gooseberry Grocers, Inc. The contract is silent
on the issue of territorial rights. Gooseberry allows a competing franchise to be
established near Fern’s store, which suffers a significant loss in profits. This is most
likely a violation of
a. no law.
b. the ban on certain types of anticompetitive agreements.
c. the Federal Trade Commission’s Franchise Rule.
d. the implied covenant of good faith and fair dealing.
Anthony believes that he needs to obtain a Chapter 13 discharge in bankruptcy. A
Chapter 13 case can be initiated by a filing of a voluntary petition by
a. a creditor only.
b. a corporation only.
c. a debtor only.
d. a trustee only.
Jonah tells Levi he will give him an Xbox if Levi does Jonah’s chores for a month. Levi
promises to do the chores. Jonah and Levi have formed a
a. bilateral contract.
b. unilateral contract.
c. void contract.
d. unenforceable contract.
Elegant Carpets, Inc., and Fantastic Floors Stores enter into a contract for a sale of
carpeting. Under a shipment contract, the seller must
a. allow the buyer to reject the goods for any reason.
b. deliver the goods to a particular destination.
c. inspect the goods before shipping them.
d. place the goods into the hands of a carrier.
Lexy, a salesperson for My-T-Fine Corporation, learns that My-T-Fine will increase the
dividend it pays to shareholders. Lexy buys 10,000 shares of My-T-Fine stock. When
the price increases, Lexy sells the shares for a profit. Lexy would not be liable for
insider trading if the information about the dividend was
a. material when she sold the stock.
b. public after she bought the stock.
c. public before she bought the stock.
d. speculative when she bought the stock.
Moby leases from National Theater Corporation a theater in which to stage a series of
concerts. Ollie buys a ticket to the series. What distinguishes Moby, a tenant, from
Ollie, a licensee, is
a. the exclusivity of possession.
b. the quiet enjoyment of rights.
c. the temporary nature of possession.
d. the title to the property.
Juan and Isidro enter into a contract to buy, restore, and reopen the Coastal Park
Carousel. Before either party begins to perform, they agree to cancel their deal. This is
a. substantial performance.
b. mutual rescission.
c. accord and satisfaction.
d. novation.
The payment of Frida’s debt to Gianini is guaranteed by Frida’s personal property.
Gianini is
a. a debtor.
b. a secured party.
c. a secured transaction.
d. a security interest.
Erasmus files a suit against Drain-Pro Plumbing & Repair LLC under the Civil Rights
Act of 1964, claiming reverse discrimination. To support this claim, Erasmus must
show that he is a member of
a. a protected class.
b. a majority group.
c. an employers’ association.
d. a union.
Celfone Corporation is required to file a registration statement with the Securities and
Exchange Commission. This statement must contain
a. a copy of prospectuses to be provided to investors.
b. a description of securities being offered for sale.
c. a record of pre-registration sales in securities.
d. a sample of advertising to be used to attract investments in Celfone.
Livewire Company and McCoy’s Candy, Inc., sign a document that states Livewire
agrees to design a Web page for McCoy’s, which agrees to pay for the service. This is
a. an actual contract.
b. a fictional contract.
c. an implied contract.
d. a quasi contract.
The payment of Paul’s debt to Ryan is guaranteed by Paul’s 2002 Honda Civic. Ryan
filed the financing statement on July 1, 2012. If Ryan does nothing else, the financing
statement will be effective until
a. July 1, 2013.
b. July 1, 2014.
c. July 1, 2017.
d. July 1, 2022.
At an auction for the first time, Dulcinea bids on a one-hundred-year-old Edison-brand
phonograph, believing that it is worth more than the price asked. When the item proves
to be less valuable, Dulcinea is
a. liable on the bid.
b. not liable on the bid because Dulcinea overestimated the value of the auctioned item.
c. not liable on the bid because the auctioneer overstated the value of the auctioned
item.
d. not liable on the bid because this was Dulcinea’s first auction.
Chris, a minor, signs a contract to purchase alcoholic beverages for Dine & Drink, his
parents’ restaurant. The contract is
a. valid but may be disaffirmed.
b. valid but may not be disaffirmed.
c. void as a matter of law.
d. void unless it is also signed by Edie, the manager of Dine & Drink.
Lather Up Soap Products Company grants its agent Kathy an exclusive territory in
which to sell Lather Up products. The firm cannot compete with Kathy in that territory
under the principal’s duty of
a. avoidance.
b. cooperation.
c. indemnification.
d. reimbursement.
Lewis, an employee of Silos, Inc., makes a substantial mathematical error in totaling the
estimated costs for a project for which AgriCo-op is seeking bids. Consequently, Silos’s
bid is significantly low. Any contract with AgriCo-op that includes the mistake may be
rescinded
a. if the mistake involves a material fact.
b. if the mistake involves any fact.
c. if the mistake is one of value or quality.
d. under no circumstances.
Clerical Workers Union represents the employees of Miracle Medical Research
Company. The management of the firm refuses to bargain with the union over the hiring
of unnecessary workers. This violates
a. federal labor law.
b. state right-to-work laws.
c. federal employment discrimination law.
d. no federal or state law.
Applied Business Corporation makes and markets its products nationwide. Under the
stakeholder approach, to be considered socially responsible when making a business
decision, Applied must take into account the needs of
a. its consumers, the community, and society only.
b. its employees and owners only.
c. its employees, owners, consumers, the community, and society.
d. no one.
Ross, an employee at Super Snowboard Company, is laid off. Before he exits Super’s
building, he e-mails the company’s marketing campaign to Winter Sports Corporation,
Super’s competitor, without permission. This is
a. copyright infringement.
b. patent infringement.
c. trademark infringement.
d. a theft of trade secrets.
Promises of fact made during the bargaining process are express warranties.
Every shareholder is entitled to inspect corporate records for a proper purpose.
Borealis Power Company is subject to mandatory workers’ compensation laws in the
states in which it does business. Chad and Dex work for Borealis as part of a crew that
travels to remote locations to repair downed power lines and other damaged equipment.
At a distant site, Chad is injured in an accident that is entirely Dex’s fault. Chad files a
claim for workers’ compensation. Should the claim be granted? What would be
Borealis’s best defense against it?
If no time for acceptance is specified in an offer, the offer terminates after a reasonable
length of time.
Frequently, disputes over violations of administrative rules are resolved through
informal adjudication proceedings.
When the harassment by co-workers creates a hostile working environment, an
employee may have a cause of action against the employer.
When a seller keeps the goods for pickup, if the seller is a merchant, the risk of loss
passes to a buyer when the buyer actually takes physical possession of the goods.
An implied contract is implied from the conduct of the parties.
A sole proprietor has unlimited liability for all obligations that arise in doing business.
An easement can be created by prescription.
If an owner holds fungible goods as a tenant in common, he or she can pass title
without actually separating the goods.
Real estate transactions are always governed by Article 2 of the UCC.
A corporation cannot be formed without a profit-making purpose.
A personal check cannot be a negotiable instrument.
The validity of a provision permitting the franchisor to establish and enforce certain
quality standards is questionable.
Under the Fourth Amendment, a general search warrant and a general search through a
person’s belongings are permitted.