Orin relinquishes the right to his daughter Neko’s control, care, custody, and earnings.
This act is
a. disaffirmance.
b. emancipation.
c. ratification.
d. severability.
Standard Business Corporation can be compelled to dissolve by
a. its creditors only.
b. itself, through its shareholders and directors, only.
c. itself, through its shareholders and directors, or the state.
d. the state only.
E-Bank, an online financial institution, gives financial information about Paula and
other customers to a federal agency without the customers’ permission. E-Bank may be
liable under
a. the Federal Trade Commission Act.
b. the Financial Services Modernization Act.
c. the Right to Financial Privacy Act.
d. the Uniform Electronic Transactions Act.
Inadvertently, Bret leaves his briefcase at Clean n Dry Launderers when she stops to
pick up her clothes. The briefcase is
a. abandoned property.
b. bailed property.
c. lost property.
d. mislaid property.
Comfort Wear, Inc., a franchisor of shoe stores, wishes to standardize the pricing
practices of its franchisees that have engaged in price-cutting to increase their
respective shares of the market. The most prudent remedy might be for Comfort to
a. reduce the quantity of the products that it sells to its franchisees.
b. suggest the prices at which its franchisees sell their products.
c. terminate the franchisees who cut prices.
d. undercut the business of those franchisees who cut prices by opening competing
stores in the franchisees’ territory.
The Nuclear Regulatory Commission (NRC) files a complaint against General
Construction Corporation (GCC). GCC may want to settle the dispute, before formal
adjudicatory proceedings begin, to avoid
a. appearing uncooperative.
b. eliminating the need for additional proceedings.
c. rectifying the problem to the NRC’s satisfaction.
d. saving the expense of formal proceedings and later appeals.
Bubbly Soda Company hires Carlo to work on Bubbly’s shipping dock, checking
outgoing loads and dispatching Bubbly’s drivers. With respect to Carlo, Bubbly is most
likely
a. an employee.
b. an agent.
c. an independent contractor.
d. a principal.
Sophie and Tiny incorporate their beverage-container business as U-Twist Products,
Inc. The first board of directors may be appointed by the firm’s
a. employees.
b. incorporators.
c. officers.
d. shareholders.
Dante enters into a contract with Rosalinda, who does not have contractual capacity.
Dante can enforce the contract if Rosalinda
a. does not choose to avoid the contract.
b. is a minor.
c. can obtain the funds to pay for the benefits of the contract.
d. is intoxicated or mentally incompetent.
The Regulatory Flexibility Act has helped reduce record-keeping burdens for
Hometown Gas Company and other small business firms in the area of
a. accounting practices.
b. asset acquisition.
c. hazardous waste management.
d. tax reporting.
Machine Operations, Inc. (MO), employs four hundred workers at three locations in
three states. Workers who do not have a right to continue group health benefits provided
by MO for a limited time after the loss of their jobs include those who
a. are fired for gross misconduct.
b. are laid off for budgetary reasons.
c. have their hours decreased from full-time to part-time.
d. quit their jobs voluntarily.
Lauren owns a 1967 Ford Mustang, which Mike customizes and details to Lauren’s
specifications. The car earns several awards at regional vehicle customizing
competition shows. The result of Mike’s efforts is
a. accession.
b. acquisition.
c. conversion.
d. resolution.
Vernon contracts with Whitney to provide concierge services to Yerba Buena Hotel.
This is
a. a delegation.
b. an assignment.
c. a third party beneficiary contract.
d. a novation.
Quinn enters into a series of agreements with Reba involving a sale of a Suite Dreams
Motel, including the land, building, furnishings, shares of stock in Suite Dreams
Company, and a contract with Trudy to create an ad campaign. Reba suspects that
Quinn may be misrepresenting the facts. The UCC Statute of Frauds governs
a. the sale of any of the property evidenced by a writing.
b. the entire deal, including the marketer’s services.
c. the sale of the furnishings priced at $500 or more.
d. the sale of the land and the building.
A clause in a contract between Timber Corporation, a U.S. business, and Wang, Ltd., a
Japanese business, specifies that disputes over the contract will be adjudicated in the
United States. This is
a. a choice-of-forum clause.
b. a choice-of-law clause.
c. a force majeure clause.
d. an arbitration clause.
Jen files a suit against Kopper Kettle Company. While the suit is pending, Kopper
Kettle merges with Luminous Pans, Inc., with Luminous absorbing Kopper Kettle.
Now, liability in the suit, if any, rests with
a. Jen.
b. Kopper Kettle.
c. Luminous.
d. no one.
Bill and Cody agree to guarantee Dave’s debt. Bill’s maximum liability is $60,000, and
Cody’s is $40,000. Dave owes $40,000 and is in default. Bill pays the creditor the entire
amount. In the absence of an agreement to the contrary, Bill can recover from Cody
a. $0.
b. $16,000.
c. $20,000.
d. $40,000.
Hua, a resident of Illinois, owns a warehouse in Indiana. A dispute arises over the
ownership of the warehouse with Jac, a resident of Kentucky. Jac files a suit against
Hua in Indiana. Regarding this suit, Indiana has
a. federal question jurisdiction.
b. in personam jurisdiction.
c. in rem jurisdiction.
d. no jurisdiction.
Floyd and Grady enter into a contract by which Floyd promises to deliver fertilizer to
Grady. Floyd subsequently transfers this duty to Hiram. Floyd is
a. a delegatee and an obligee.
b. a delegatee but not an obligee.
c. a delegator and an obligor.
d. a delegator but not an obligor.
Mariah works in the public relations department of New Trends Sales Company. Her
job includes portraying New Trends’s activities in their best light. In this context, ethics
consist of
a. a different set of principles from those that apply to other activities.
b. the same moral principles that apply to non-business activities.
c. those principles that produce the most favorable financial outcome.
d. whatever saves New Trends’s “face.”
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. a certified check.
c. a trade acceptance.
d. a traveler’s check.
Vladimir is a “payday” lender charged with filing false claims in bankruptcy
proceedings against his customer-debtors. The standard of proof to find a defendant
who has been charged with a crime guilty is
a. a preponderance of the evidence.
b. beyond all doubt.
c. beyond a reasonable doubt.
d. clear and convincing evidence.
Jay is considering forms of business organization for Jay’s Designs, an architectural
firm. An advantage of a limited liability partnership is that partners can avoid personal
liability for
a. any partnership obligation.
b. only other partners’ wrongdoing.
c. only partnership obligations that exceed capital contributions.
d. only partnership obligations that fall within capital contributions.
Diners Cafe orders five gallons of corn oil from EZ Distributors, Inc. EZ mistakenly
ships olive oil, which Diners keeps, despite the nonconformity. The oil is destroyed in a
fire. The loss is suffered by
a. Diners and EZ, but not Diners’ customers.
b. Diners, EZ, and Diners’ customers.
c. Diners only.
d. EZ only.
WiFi Corporation, a U.S. firm, signs a contract with Bueno Computadores, Ltd., an
Argentinean firm, for a shipment and payment for WiFi’s goods. This is
a. a distribution agreement.
b. a joint venture.
c. direct exporting.
d. licensing.
Lewis is a state court judge. Like other judges, Lewis often refers to secondary sources
of law for guidance. These sources include
a. official comments to statutes.
b. other states’ statutes.
c. state constitutions.
d. the U.S. Constitution.
Bakri owns a house. In the house, on a tile floor is a throw rug. Most likely to meet the
definition of a fixture is
a. the house.
b. the throw rug.
c. the tile floor.
d. none of these choices.
Fact Pattern 15-2
Mutual Company enters into a contract to employ Neil as an investment manager for
two years. During the first year, Neil is often absent without explanation and when
present fails to adequately monitor and manage Mutual’s investments.
Refer to Fact Pattern 15-2. Neil’s performance is most likely
a. a material breach.
b. a minor breach.
c. Mutual’s breach.
d. no breach.
Screen Perfect, Inc., and TV Stores enter into a contract for a sale of high-definition
television sets. Screen Perfect ships goods that do not exactly conform to the contract in
some details. TV Stores
a. cannot reject the entire shipment.
b. can reject the entire shipment.
c. must accept the entire shipment.
d. must reject the entire shipment.
Speedy Shipping Corporation applies to TransInsurance Company for a fire insurance
policy on Speedy’s warehouse. On the application, Speedy misrepresents the age of the
property to obtain a lower premium. When a fire soon destroys the warehouse,
TransInsurance can
a. deny payment, because a fire destroyed Speedy’s warehouse.
b. deny payment, because of Speedy’s fraud in the application.
c. not deny payment, because a fire destroyed Speedy’s warehouse.
d. not deny payment, because the application is not part of the policy.
United Industrial Corporation gives preferential treatment in hiring and promotion to
the members of all protected classes. This treatment results in discrimination against
members of the majority. This is
a. a bona fide occupational practice.
b. a business necessity.
c. constructive discharge.
d. reverse discrimination.
Jody is an agent for Insta Cross Country Trucking Inc. In the course of Jody’s
performance for the firm, Jody pays Heck for certain vehicle maintenance and repair
services. Jody’s right to obtain the amount of those payments from Insta arises under the
principal’s duty of
a. avoidance.
b. cooperation.
c. indemnification.
d. reimbursement.
The Merit Systems Protection Board issues a rule. Like other administrative agencies’
“legislative rules,” this rule is as
a. binding as a law passed by Congress.
b. persuasive as an expert’s opinion.
c. suggestive as a newspaper’s editorial.
d. unenforceable as a salesperson’s puffery.
A fixed-term tenancy is created when a lease does not specify its duration.
The Clean Water Act includes special provisions for oil spills.
Computer fraud is a state, not a federal, crime.
A person can insure anything in which he or she has an insurable interest.
A security agreement must be filed in person to be valid and enforceable.
Transfer warranties attempt to impose liability on the wrongdoer or the party who dealt
most immediately with the wrongdoer.
Under the exclusionary rule, all illegally obtained evidence must be included in any
criminal prosecution.
A debt-collection agency is someone who regularly attempts to collect debts on behalf
of someone else, usually for a percentage of the amount owed.
Because insurance law follows contract law, bad faith tort actions against insurers are
not allowed.
Political speech that would otherwise be protected by the First Amendment is
prohibited if its source is a corporation.
A principal who causes a third person to believe that another person is the principal’s
agent can be estopped from denying the agency relationship.
Courts can rely on the common law as a guide to interpreting legislation.
A tenant cannot withhold rent for any reason.
If collateral consists of consumer goods subject to a purchase-money security interest,
the secured party must “purchase” the goods on default.
Under the UCC, a contract for a sale of goods that includes open terms is void.