Sharon, the human resources director for Tempo Corporation, attempts to comply with
the law in dealing with applicants and employees. One of the challenges Sharon faces is
that the legality of an action is
a. always clear.
b. never clear.
c. sometimes clear.
d. usually clear.
Caffeine Café, Inc., files its articles of incorporation with the appropriate government
agency. Least likely to appear in the articles is the name of
a. each of the corporation’s incorporators.
b. each of the corporation’s shareholders.
c. the corporation.
d. the corporation’s initial registered agent.
Elias repays his debt, incurred to buy consumer goods, to Fidelity Bank and
immediately files a written request for a termination statement. Fidelity
a. must comply within one month of receipt of the letter.
b. must comply within twenty days of receipt of the letter.
c. must refund $513 to Elias.
d. need not comply.
Summit Supply Company contracts for a sale of medical equipment to Valley
Immediate Care Corporation. Summit can enforce its right to payment
a. only after Valley has actually inspected the goods.
b. only after Valley has had an opportunity to inspect the goods.
c. only before Valley has inspected the goods.
d. whether or not Valley has had the chance to inspect the goods.
A Rhode Island state statute imposes a prison term, without a trial, on all street vendors
who operate in certain areas. A court would likely hold this statute to be
a. constitutional under the due process clause.
b. constitutional under the equal protection clause.
c. unconstitutional under the due process clause.
d. unconstitutional under the equal protection clause.
Brad is a shareholder of Concert Promotion Corporation. As a shareholder, Brad can
a. authorize major corporate policy decisions.
b. decide to issue stock and bonds, and declare dividends.
c. select and remove corporate officers.
d. vote to amend the articles of incorporation or bylaws.
Glen and Haj sign a written contract. Glen claims that the parties later orally agreed to
modify the contract. Any oral modification is likely not enforceable if it falls under
a. the doctrine of promissory estoppel.
b. the “main purpose” exception.
c. the “partial performance” exception.
d. the Statute of Frauds.
A contract between Lou and Mike requires a transfer of stolen goods for counterfeit
currency. This contract is
a. enforceable.
b. void.
c. voidable at the option of either party.
d. voidable at the option of the party having less bargaining power.
The Environmental Protection Agency (EPA) has the authority to regulate “any air
pollutant.” Fresher Air Group, a private organization that supports cleaner air, can file a
suit against the EPA to
a. compel the EPA to act only.
b. compel the EPA to act or prevent it from acting.
c. neither compel the EPA to act nor prevent it from acting.
d. prevent the EPA from acting only.
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.
John agrees to sell his sports equipment store to Kay and, as part of the sale, promises
not to open a similar store in the United States for twenty years. John’s promise is
a. an unreasonable restraint of trade like all covenants not to compete.
b. unreasonable in terms of geographic area and time.
c. unreasonable in terms of Kay’s “goodwill” and “reputation.”
d. valid and enforceable.
Julio meets Inez on Hello!, a social networking Web site. Inez asks Julio to pay her
expenses to travel to meet him in Center City. He sends the funds, but she does not
make the date. This is
a. online embarrassment but not fraud.
b. online date-dumping but not fraud.
c. an online wake-up call but not fraud.
d. online fraud.
Drew is a beneficiary of a business trust. As a beneficiary, Drew is required to
a. distribute the profits and manage the property.
b. distribute the profits only.
c. manage the property only.
d. neither distribute the profits nor manage the property.
EZ Rentals Company wants to insure the equipment that it rents to the public. To obtain
insurance, EZ must have an insurable interest in the equipment
a. at any time.
b. at the time a loss occurs.
c. at the time a policy is obtained.
d. continuously from the time a policy is obtained to the time a loss occurs.
Dirk steals Effie’s necklace and sells it to Fiona. Effie can recover the necklace from
Fiona
a. only if Fiona did not know that the necklace was stolen.
b. only if Fiona gave legally sufficient consideration for the necklace.
c. only if Fiona knew that the necklace was stolen.
d. under any circumstances.
Nico is interested in buying a franchise from Oz Inc. For Nico to make an informed
decision concerning this purchase, Oz must disclose in writing or online
a. general estimates of costs and sales, but not the basis for them.
b. material facts such as the basis of projected earnings figures.
c. no information.
d. start-up requirements, but not renewal conditions.
Fact Pattern 37-1
Fresh Goods, Inc., wants to make an initial public offering of securities. Fresh believes
that it qualifies for an exemption under Regulation A from the full registration
requirement of the federal Securities Act of 1933.
Refer to Fact Pattern 37-1. If Fresh is exempt from the federal registration requirement,
Fresh is
a. automatically exempt from any state registration requirement.
b. not subject to any state securities laws.
c. not necessarily exempt under a state registration requirement.
d. automatically subject to all state registration requirements.
Dylan enters into a contract to manage the operations of Cash’s accounting office for
one year, renewable for subsequent one-year terms. If this contract is discharged like
most contracts, it will be
a. canceled.
b. compromised.
c. altered.
d. performed.
Pablo and Melia enter into an oral contract for Pablo’s sale to Melia of a laptop
computer for $400. Assuming the terms can be proved, the contract is enforceable by
a. the seller or the buyer.
b. the manufacturer of the laptop.
c. any third party who overheard the parties making the agreement.
d. none of the choices.
Gallop Western Ranch is a family limited liability partnership (FLLP). In an FLLP, all
of the partners must be
a. natural persons only.
b. natural persons or persons acting as fiduciaries for natural persons.
c. persons acting as fiduciaries for natural persons only.
d. related.
Mia’s voluntary petition for bankruptcy is found to be proper. The order for relief is
effective as soon as
a. Mia files the petition.
b. Mia posts a bond to cover the costs of the proceedings.
c. Mia’s creditors agree to the terms.
d. the trustee collects and distributes the property of Mia’s estate.
Triple-D Cinemas promises to pay Shakir $1,000 to repair and clean its marquee. The
act of doing this work is
a. not consideration because its performance is a preexisting duty.
b. not consideration because its exchange is not a bargain.
c. consideration.
d. not consideration because its value is legally insufficient.
Tyrone draws a check payable to “Cash” and presents it to United Bank for payment.
This instrument is
a. a bearer instrument.
b. an order instrument.
c. valid but nonnegotiable.
d. void.
Jane offers to sell Kyle three desks for his Lights & Lamps Company administrative
office. Kyle sends a rejection first, then changes his mind and sends an acceptance.
Whether they have a contract is determined by
a. Kyle’s rejection.
b. Kyle’s subjective intent.
c. whatever Jane decides.
d. whether Kyle’s rejection or acceptance is received first.
Sudan seizes the assets of Triage Medical, Inc., a U.S. firm. Triage’s recovery from
Sudan in a U.S. court may be prevented by
a. the act of state doctrine.
b. the doctrine of sovereign immunity.
c. the Foreign Corrupt Practices Act.
d. the principle of comity.
Sela agrees to act on Thom’s behalf, subject to Thom’s control, and Thom trusts Sela to
so act. They set out the terms in a written document, which they both sign. This is
a. an agency by agreement.
b. an agency by estoppel.
c. an agency by ratification.
d. not the creation of an agency relationship.
Dani is considering forms of business organization for her financial advisory firm. Like
most states, Dani’s state requires that to form a limited liability company, she must file
with a central state agency
a. articles of certification.
b. articles of formation.
c. articles of organization.
d. no specific documents.
Intoxicated, Clio agrees to sell her restaurant, Diners Café, to Evan for half of its real
market value. This deal is most likely voidable if Clio
a. appears intoxicated to Evan.
b. disaffirms the contract after becoming sober.
c. is so intoxicated as to have no memory of the deal.
d. is so intoxicated as to lack comprehension of the legal consequences.
Mona files an employment discrimination suit against Nationwide Corporation (NC)
under Title VII. If Mona shows that NC acted with malice or reckless indifference, she
may recover
a. compensatory damages only.
b. compensatory or punitive damages.
c. neither compensatory nor punitive damages.
d. punitive damages only.
Elle buys a new textbook for $100 and a used car for $5,000, and signs a one-year lease
for an apartment for $1,000 monthly rent to start at the beginning of the next month.
The Statute of Frauds covers
a. the apartment lease, and the textbook and car purchases.
b. the apartment lease and the car purchase only.
c. the apartment lease only.
d. the textbook and car purchases only.
Under the Marine Protection, Research, and Sanctuaries Act (the Ocean Dumping Act),
Bayside Chemical Company may dump its chemical waste into the ocean
a. after obtaining a permit.
b. before obtaining a permit.
c. without a permit.
d. not at all.
No oral contract is enforceable under the UCC.
An obligor is a person to whom a duty is owed.
A bank that encodes information on an item after its issue warrants to any subsequent
bank that the information is correct.
A holder takes an instrument for value by performing the promise for which the
instrument was issued.
Contract law governs franchise relationships.
“Blue sky laws” are state securities laws.
Advertisements can include express warranties.
Hackers sometimes rent their “crimeware” as a service.
An insurer has a duty to avoid the payment of claims.
A state deceptive trade practice statute may limit the actions of franchisors.
U.S. antitrust law may protect foreign consumers and competitors from violations by
U.S. firms.
Ethical codes of conduct can set the ethical tone of a firm.
The Madrid Protocol concerns trademarks.
The UCC imposes the same rules of conduct on all parties in all circumstances.
Tender is an unconditional offer to perform.