Homestead Insurance Company tells its customer Teresa that she need not respond to
questions about her national origin or race on her insurance application. Teresa provides
the information anyway. Homestead
a. can use the information to avoid its obligations under its policy with Teresa.
b. cannot use the information to avoid its obligations under its policy with Teresa.
c. can use the information to refuse to renew its policy with Teresa.
d. cannot use the information, except to cancel its policy with Teresa.
Gail enters into a contract with Hi-Price Appliances, Inc. In a suit between the parties
over payment under the contract, Gail claims that a certain clause is unconscionable. If
the court agrees, it may
a. enforce, limit, or refuse to enforce the contract or the disputed clause.
b. enforce the contract without the disputed clause only.
c. limit the application of the disputed clause only.
d. refuse to enforce the entire contract only.
Kathleen offers to buy Richard’s prize stallion for $10,000 only if a licensed
veterinarian certifies that the horse is sound for breeding. After inspecting the stallion,
the veterinarian concludes that the stallion is sterile and thus not fit for breeding.
Kathleen
a. must still buy the stallion.
b. does not have to buy the stallion.
c. must still buy the stallion, but may pay a lower price.
d. does not have to buy the stallion, but must buy another horse of similar value from
Richard.
Eliza is a state court judge. Flora appears in a case in Eliza’s court, claiming that Glover
breached a contract. Which of the following actions may Eliza take?
a. award damages..
b. imprison Glover for 10 years.
c. cancel the contract..
d. award damages or cancel the contract.
Lyle, vice-president of sales for Mi-T Electric, Inc., adheres to Judeo-Christian religious
ethical standards. With respect to their application, these standards are
a. absolute.
b. analytical.
c. discretionary.
d. utilitarian.
Venerable Company leases office furniture to Design Architects, Inc., under a contract
that states, “Bailee agrees to pay Bailor for any damage to the furniture.” The furniture
is stained by inks used in computer printers, copiers, fax machines, and so on. Most
likely liable for the damage is
a. Venerable.
b. Design Architects.
c. “Bailor.”
d. no one.
Dan, a computer programmer, holds a garage sale to sell a lawnmower, some clothes,
some CDs and some old clothes. Will, a lawyer, sells Thelma his collection of seashells.
Philip, a CEO of a successful company, sells George his pet parakeet. Judy, an expert
horse trainer, sells Bob a horse. Which person would be considered a merchant under
the UCC?
a. Dan
b. Will
c. Judy
d. Philip
Sally is the secured party in a transaction with Lilly, who is the debtor. Sally files a
financing statement with the appropriate state official. The financing statement must
contain
a. Lilly’s signature.
b. Sally’s bank account information.
c. Lilly’s credit report.
d. a photograph of the collateral.
DVD Rental Corporation would like to change its corporate status to that of an S
corporation to avoid income taxes at the corporate level. To qualify, DVD Rental
Corporation must
a. be located in the United States.
b. have more than one hundred shareholders.
c. be a non-profit corporation.
d. have more than one class of stock.
Elmo files a petition in bankruptcy. If the court concludes that Elmo only seeks an
advantage over his creditors and that his financial situation does not warrant relief, the
court will most likely
a. dismiss Elmo’s petition.
b. discharge Elmo’s debts.
c. distribute Elmo’s property to Elmo’s creditors.
d. issue an automatic stay against any actions by Elmo’s creditors.
Jake meets Bill in the parking lot outside of a bar. He grabs Bill roughly by the shoulder
and demands that Bill sell Jake Bill’s custom milled skis. Jake says, “You wouldn”t
want to get roughed up, would you?” Bill agrees to sell the skis to Jake. The contract is
a. unenforceable because Bill agreed to it under duress.
b. unenforceable because Jake’s consideration is inadequate.
c. enforceable because Jake’s consideration is legally sufficient.
d. enforceable because Jake’s consideration is adequate.
Kai files a suit against Lana based on one of Lana’s statements that Kai alleges is
fraudulent. To give rise to fraud, the statement must be one of
a. emotion.
b. fact.
c. illusion.
d. opinion.
App Developers, Inc. (ADI), enters into a contract with Carmen, the chief executive
officer of SalesCorp, to create an app for the firm. To fulfill the contract, ADI hires Max
and ten other student interns. With respect to the contract, Max is
a. an intended beneficiary.
b. an incidental beneficiary.
c. a delegatee.
d. an assignee.
Karen obtains a mortgage loan from First Class Bank so that she can purchase a new
house. The house costs $100,000. Karen makes a down payment of $10,000. First Class
Bank will
a. probably require Karen to purchase mortgage insurance.
b. not require Karen to purchase mortgage insurance.
c. not charge Karen interest for at least a year because she made a down payment that
was 10 percent of the purchase price.
d. require Karen to make another $10,000 payment within one year.
Erica obtains a mortgage loan from Capital Bank. Because a mortgage loan involves the
transfer of real property
a. it can be oral or written.
b. it must be oral.
c. it must be written.
d. it must be witnessed by a judge.
James and MaryElise enter into a contract. James agrees to mow MaryElise’s yard every
week for the summer. MaryElise is the
a. obligor.
b. obligee.
c. assignee.
d. assignor.
Chita owns the land on which Downwind Farm is situated, plus the farmhouse, barn,
and other structures permanently attached to the land. Chita’s brother Elvin owns
everything else on the farmimplements, seed, and so on. The real property is owned by
a. Chita and Elvin.
b. Chita only.
c. Downwind Farm.
d. Elvin only.
Wilson is the payee for a check written by Fred. Cash Credit Corporation (CCC)
accepts the check from Wilson as part of a payment. CCC cannot become a HDC if
a. the check has been transferred more than once.
b. the check has been outstanding for one week.
c. the check has been outstanding for more than ninety days.
d. there are bankruptcy proceedings against Fred.
Cody believes that Delta Corporation has discriminated against him on the basis of
gender. Cody files a suit against Delta under Title VII. To establish a prima facie case of
employment discrimination, Cody must show that
a. Cody is a member of a protected class.
b. Delta has no legal defenses against the claim.
c. discriminatory intent motivated Delta’s act.
d. other firms in Delta’s industry have committed discriminatory acts.
Odina signs a covenant not to compete with her employer, Penultimate Sales
Corporation. A court decides that the covenant is overly restrictive. The court will likely
a. enforce it as written so as not to undercut the freedom of contract.
b. enforce it but evaluate its effects over time.
c. reform its terms to prevent any undue burden.
d. refuse to enforce it unless Penultimate pays additional consideration.
Jay is a member of Klondike Coffee, LLC, a limited liability company. Jay is liable for
Klondike’s debts
a. in proportion to the total number of members.
b. to the extent of his investment in the firm.
c. to the extent that the other members do not pay the debts.
d. to the full extent.
Ron signs an instrument using an “R” with a circle around it. With this mark for a
signature, the instrument is
a. negotiable.
b. nonnegotiable, because an initial does not state the signer’s name.
c. nonnegotiable, because an initial is not a signature.
d. nonnegotiable, because a simple initial implies a lack of binding intent.
A trade association
a. is always a per se violation of Section 1 of the Sherman Act.
b. may be legal if it is sufficiently beneficial to both the association and the public.
c. is an innovative, legally efficient approach to doing business.
d. always creates illegal territorial or customer restrictions.
Sterling Bank runs thirty-second TV commercials, offering a reward to anyone giving
information leading to the apprehension of a certain criminal. The bank could normally
terminate the offer by
a. posting a notice of termination on its front door.
b. placing a quarter-page notice of termination in a local newspaper.
c. informing bank employees that the offer is terminated.
d. running thirty-second TV commercials withdrawing the offer.
Quality Watches, Inc., ships an assortment of timepieces to Retail Jewelers, Inc., which
agrees to pay for items that are not returned within six months. This is
a. a bailment.
b. a consignment.
c. a sale on approval.
d. a sale or return.
Jason contracts with Golf Carts Unlimited, Inc. to buy five golf carts. The contract lists
the five carts as GC001, GC002, GC003, GC004, GC005. Identification
a. requires that Jason verify his identity to take possession of the carts.
b. has taken place.
c. cannot take place until the contract is reviewed by a court.
d. will take place only when Jason pays for the golf carts.
Property Management Corporation (PMC) owns several apartment buildings in two
states. Regarding standards for maintenance of the buildings, PMC should consult
a. the applicable city ordinances and state statutes.
b. the previous owners.
c. the long-term tenants.
d. the Uniform Landlords’ Maintenance Manual.
John Jones decides to use his personal name for a line of clothing he is developing.
Whether or not the name John Jones acquires a secondary meaning will depend on
a. how extensively John markets his line of clothing.
b. the market for John’s line of clothing.
c. the number of clothing sales John makes.
d. all of the choices are correct.
Ideal Gadgets, Inc., and Jolly Outlets Corporation enter into a contract for a sale of
kitchenware. The contract requires Ideal to deliver the goods to Ladle Carrier Company
for transport to Jolly’s warehouse in Metro City. Risk of loss passes to Jolly when
a. Ideal delivers the goods to Ladle.
b. Ideal identifies the goods to the contract.
c. Ladle transports the goods to Jolly’s warehouse.
d. the goods arrive in Metro City.
Seth offers to buy a house from Tia for less than Tia paid for it, stating that he would
“hate to see anything bad happen to Tia or her house.” Tia agrees to sell. Regarding this
agreement, a court would likely
a. enforce it.
b. not enforce it.
c. rescind it.
d. order the parties to renegotiate it.
Jeannie runs a dude ranch called J Bar B Dude Ranch and has a website called
www.jbarbduderanch.com. Ben starts another dude ranch and registers a website called
www.jbarsbduderanches.com. Ben is
a. cybersquatting.
b. cyberstalking.
c. not doing anything illegal.
d. counterfeiting.
Craft Engineering, Inc., contracts for a sale of technical instruments to Detail Design
Company. Before the date on which performance is due, Craft notifies Detail that it will
not perform. This is
a. anticipatory repudiation.
b. perfect tender.
c. rejection of performance.
d. revocation of acceptance.
Final Foto, Inc., makes photo and video editing software, which includes a shrink-wrap
agreement. Gibby 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. Gibby does not read it.
b. Gibby learns of it after contracting.
c. Gibby learns of it before contracting.
d. the quality of the software is poor.
All states have intermediate appellate courts.
Appointment of corporate officers and determination of their compensation are
decisions that would be made by a corporation’s board of directors.
In some states, misdemeanors are punishable by imprisonment for up to 10 years.
An online offer should include provisions relating to dispute settlement.
A trade name can be protected if it is unusual or fanciful.
In a judicial foreclosure, a court supervises the process.
A drawer’s liability does not arise until presentment and notice of dishonor.
A plaintiff who proves that unlawful discrimination occurred may be awarded
reinstatement, back pay, but NOT retroactive promotions.
A gift must be supported by legally sufficient consideration.
An agency relationship created for an illegal purpose is enforceable.
Stare decisis is a doctrine obligating judges to help persons who have failed to protect
their own rights.
Symbolic speech is defined as nonverbal expressions of belief and is protected by the
First Amendment.
Bob is shopping in Carl’s Hardware Store when a nail gun in use by Dan, one of Carl’s
employees, fires without warning and hits Bob in the leg. Carl checks the gun and
discovers that it was assembled improperly. Bob files a suit against Eagle Tools, Inc.,
the manufacturer of the gun, for product liability, on the ground of strict liability. What
are the elements for an action based on strict liability? In whose favor is the court likely
to rule and why?
Ciera buys a car from Town Motors. Less than a year later, Ciera files for bankruptcy
under Chapter 13. Her plan must provide that Town retains a lien on the car until the
entire debt is paid
A. under no circumstances.
B. if Town extended credit for all or part of the purchase price of the car.
C. if Ciera surrenders the car to Town.
D. if Ciera’s other creditors do not object.
An agency relationship cannot exist in the absence of a formal agreement.
A maker of an instrument that is payable at a definite time may NOT pay early.