Jim is an appliance salesperson. To make a sale, he asserts that a certain model of a
Kitchen Helper refrigerator is the “best one ever made. This is
a. fraud if the statement is the truth.
b. fraud if Jim believes that this statement is not true.
c. fraud if Jim is stating his opinion, not the facts.
d. not fraud.
To complain about Ultra Corporations products, Toby opens a Web site with the domain
name “ultracorporationsucks.com. Ultra files a suit against Toby. If the court rules in
Tobys favor, it will most likely be on the basis of
a. a likelihood of confusion.
b. a right to privacy.
c. the freedom of speech.
d. trademark law.
City Times, a newspaper, knowingly publishes an article falsely stating that the
inventory of Walco, a discount store, consists of stolen goods. City Times is liable for
a. defamatory mischief.
b. malicious mischief.
c. slander of quality.
d. slander of title.
Florencia, who is not a GigaBank customer, attempts to cash a check drawn on the
bank. The check is considered dishonored if GigaBank
a. refuses to pay it.
b. charges a fee to cash it.
c. asks Florencia for reasonable identification.
d. asks Florencia to sign a receipt for the payment on the check.
Cory employs Daily Delivery Agency as an agent under a written agreement that
describes the rights and duties of both parties. This is
a. apparent authority.
b. equal authority.
c. express authority.
d. implied authority.
Rio Engineering Corporation pays PC Technologies, Inc., $1,000 to use a computer for
a month. For purposes of the UCC, this is
a. a crime.
b. a consignment.
c. a lease.
d. a sale.
George promises to repair Fords boat dock in exchange for Efrems promise to plant
trees on Georges property. This is
a. a delegation.
b. an assignment.
c. a third party beneficiary contract.
d. an alienation.
Residential Construction Company agrees with its employees union not to buy any
nonunion-produced goods from other firms for use on Residential Construction job
sites. This is
a. a permissible secondary boycott.
b. a prohibited secondary boycott.
c. a technically legal secondary boycott.
d. a unilateral one-party boycott.
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.
Bonnie contracts to deliver a crop of soybeans to Farmers Co-op. A tornado destroys the
crop on her farm. The buyer insists that she deliver by acquiring soybeans on the open
market. She claims that this is prohibitively expensive. Her best argument against
enforcing the contract is
a. frustration of purpose.
b. objective impossibility of performance.
c. anticipatory repudiation.
d. commercial impracticability.
Leona enters into a contract with Munchie Bakery to cater a sales conference. When the
conference is postponed indefinitely, Leona asks a court to cancel the contract. This
request involves
a. an equitable remedy.
b. an unenforceable demand.
c. a remedy at law.
d. a type of harm.
Hermione starts up, and assumes the financial risk of, Graphic Ads, a new enterprise.
Hermione is
a. a franchisee.
b. a franchisor.
c. an agent.
d. a sole proprietor.
Pacific Bank receives a check drawn by Qiana. The check is received after the
established “cutoff hour. Payment can be postponed without dishonor
a. indefinitely.
b. under no circumstances.
c. unless Qiana personally demands acceptance.
d. until the close of the next business day.
Wild & Scenic River Tours, Inc., is a corporation. Wild & Scenic has the implied power
to
a. issue stocks and bonds.
b. execute contracts and negotiable instruments.
c. buy and sell (or lease) property.
d. perform all acts reasonably appropriate and necessary to accomplish its corporate
purposes.
Fact Patter 41-2A
Petro Drilling Corporation combines its assets and debts with those of Oil Refining
Company to form New Energy, Inc.
Refer to Fact Pattern 41-2A. New Energy acquires
a. all of Petros and Oils assets.
b. half of Petros and Oils assets.
c. none of Petros and Oils assets.
d. only assets that Petro and Oil acquired after a combination was proposed.
Upton borrows $150,000 from Valley Credit Union to buy a home, which secures the
loan. Three years into the term, Upton stops making payments on it. Valley Credit
repossesses and auctions off the property to Wesley. The sale proceeds are not enough
to cover the unpaid amount of the loan. In most states, Valley Credit can ask a court for
a. a deficiency judgment.
b. a reverse mortgage.
c. a short sale.
d. nothing.
Congress enacts a law prohibiting toys made in China from being sold in the United
States. The Hawaii state legislature enacts a law allowing the sale of Chinese-made
toys. Hawaiis law will most likely be
a. rendered invalid under the supremacy clause.
b. rendered valid the equal protection clause.
c. struck down under the taxing and spending clause.
d. upheld under the commerce clause.
Swim & Trim Fitness Corporation wants to formulate a plan under which it pays a
portion of its debts and is discharged of the remainder while continuing in business. To
accomplish this goal, Swim & Trim should file a petition in bankruptcy for relief
through
a. a liquidation.
b. a reorganization.
c. a repayment plan.
d. a family-farmer bankruptcy plan.
Caleb is a witness in a controversy involving the U.S. Drug Enforcement
Administration. Caleb can be compelled to appear before an administrative law judge if
he is served with
a. an order for specific performance.
b. a rule for parol evidence.
c. a subpoena.
d. a politely worded request.
Rally Speedboat Corporation refuses to sell its products to Super Weekends, Inc., a
recreational water products dealership. This is
a. a group boycott.
b. a horizontal market division.
c. attempted monopolization.
d. a unilateral refusal to deal.
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.
Detailed Designs Company, an architectural firm, wants to hire Eduardo, a noncitizen.
A temporary work visa is most likely to be set aside for a noncitizen who is
a. a “person of ethnic similarity to the employers workforce.
b. a “person of extraordinary ability.
c. a “person of ordinary ability and ambition.
d. a “person with an extraordinary work ethic.
The functions of the Social Security Administration, like those of other administrative
agencies, include
a. adjudication.
c. declaration.
b. enunciation.
d. pronunciation.
Julius is a judge. How the Julius and the judges in other courts interpret a particular
statute determines
a. how that statute will be applied.
b. how the law needs to be changed.
c. how the common law should be codified.
d. nothing.
Under the Constitution
a. neither the national government nor the states have sovereign power.
b. the national government and the states share sovereign power.
c. the national government has all sovereign power.
d. the states have all sovereign power.
Regional Lumber Company and Superior Builders Corporation enter into a contract for
a sale of wood products. Regional, a merchant who deals in goods of the kind sold,
makes implied and express warranties in connection with the sale. Under the UCC, if
these are inconsistent
a. all implied warranties displace all express warranties.
b. all express warranties displace all implied warranties.
c. the implied warranty of fitness for a particular purpose takes precedence.
d. the implied warranty of merchantability takes precedence.
Iggy hires Joy to act as his agent to purchase Kup-a-Koffee Kompany. Iggy tells Joy to
reveal only that she is buying the firm on behalf of a third party, without telling
Kup-a-Koffees 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.
Fact Pattern 31-1A
24-Hour Credit Corporation issues high-cost and high-fee mortgage products to people,
including Benny, who could not easily obtain credit under other loan programs.
Refer to Fact Pattern 31-1A. Under federal law, disclosures with respect to one of
24-Hour Credits loans must be provided
a. a certain number of days after the loan is finalized.
b. a certain number of days before the loan is finalized.
c. at the same time at which the loan is finalized.
d. at whatever time is most rational and appropriate.
Lila obtains a life insurance policy with no cash surrender value and names her son
Maurice as the beneficiary. This is
a. casualty insurance.
b. decreasing-term life insurance.
c. health insurance.
d. term life insurance.
In Rendezvous Cafes suit against Sanitary Waste Services, Inc., the court issues a
judgment in Rendezvouss favor. The judgment can be appealed to an appropriate court
of appeals by
a. neither party.
b. Rendezvous only.
c. Rendezvous or Sanitary.
d. Sanitary only.
Remote Disposal Company operates a hazardous waste storage facility. Concerned that
there may be a release of chemicals from the site, Remote sells the property to Serene
Developers, Inc. If there is a release, Remote is most likely
a. liable.
b. not liable because the site was sold before the release.
c. not liable because Remote was concerned about the release.
d. not liable because Remote no longer operates the facility.
A suit is filed against Urbana Corporation, alleging that the firm committed the offense
of monopolization. To determine whether Urbana has monopoly power requires looking
at
a. the companys size alone.
b. business ethics and corporate gamesmanship.
c. production methods and marketing techniques.
d. the relevant geographic market and the relevant product market.
Rio Business Corporation pays potential clients, including private foreign companies
and the representatives of foreign labor organizations to facilitate business. If Rio
knows that the payments will be passed on to a foreign government, this practice is
a. illegal if the payments violate the Foreign Corrupt Practices Act.
b. legal because a third party acts as a “go-between.
c. legal because private parties are involved on both sides of the deal.
d. legal because the payments are intended to facilitate business.
Any lawful contract can form the potential basis for an action based on wrongful in-
terference with a contractual relationship.
Any crime that requires knowledge of computer technology for its investigation is a
computer crime.
Only a guardian can enter into legally binding contracts on behalf of a mentally
incompetent person.
The simplest form of business is a sole proprietorship.
Businesspersons who would choose to act unethically may be deterred from doing so
because of public opinion.
A time draft is payable at a definite future time.
Under the theory of negligence, the duty of care requires one person to come to the aid
of another in “peril.
A partys obligations under a contract may be excused if, due to an unforeseen
circumstance, the partys benefit will be reduced.
Joy steals a check from Kyle, forges his signature, and transfers the check to Loco
Loans, Inc., for value. Unaware that the signature is not Kyles, Loco Loans presents the
check to Metro Bank, the drawee, which cashes the check. Kyle discovers the forgery
and insists that Metro recredit his account. Can Metro refuse? If not, from whom can
the bank recover?
If a trust provides for its termination on the beneficiarys death, the death will end the
trust.
An illusory promise is a promise that is enforceable without consideration.
An unauthorized signature will not bind the person whose name is signed even if his or
her negligence substantially contributed to the forgery.
Causation in fact exists if an injury would not have occurred without the defendants act.
Apparent authority usually comes into existence through a principals pattern of conduct
over time.
An employee may not act in the capacity of an agent.
Each director has a right of access to the corporations books and records, facilities, and
premises.
A buyer who obtains substitute goods to replace goods that a seller did not deliver can
not also recover damages from the seller.
A unilateral contract is formed when the one receiving the offer completes the requested
act or performance.