Under an antilapse clause, an insurance policy will lapse only if no premium is paid on
the date due.
An employer may be liable for the harassment of nonemployees if the employer knew
about the harassment and failed to take corrective action.
Insider trading occurs when persons buy or sell securities on the basis of information
that is not available to the pubic.
If a buyer breaches a contract while the seller is still in possession of the goods, the
seller can resell the goods and hold the buyer liable for any loss.
A court will review a contract for validity even if it contains an arbitration clause.
In some states, lawyers are not allowed to represent people in small claims courts.
In most states, one individual cannot be both an officer and a director.
The procedure for filing a family-farmer bankruptcy plan is very similar to the proce-
dure for filing a repayment plan.
Ben, an accountant, certifies several audit reports on Corporate Business, Inc. (CBI),
Bens client, knowing that CBI intends to use the reports to borrow money from Delta
Credit Company. Ben believes that the reports are true and does not intend to deceive
Delta, but does not check the reports before certifying them. Can Ben be held liable to
Delta?
A limited liability company can be taxed as a partnership.
The existence of an express contract does not bar an action in quasi contract concerning
the same transaction.
Misrepresentation of a material fact is an element of fraud.
A credit-card company is not required to provide advance notice to consumers before
changing credit-card terms.
States may restrict emissions from motor vehicles.
Frances has lived in an apartment for ten years when she decides to buy a house. Her
one-year lease will end on May On April 15, she orally contracts to buy Smiths house
for $100,000, with the closing (transfer of the deed) to take place on June Smiths
lawyer, who is out of town on vacation, is to draft a written contract of sale on his
return to his office on May 15. Because Francess lease is terminating, Smith agrees to
let her take possession of the house on May 1 if Frances gives him a “down payment on
the house of $5,000. Frances agrees and gives Smith the $5,000. She moves into the
house on May 2, and the following weekend plants trees in the back yard. On May 10,
Smith receives a written offer from Green to buy Smiths house for $120,000. Smith
accepts Greens offer, asks Frances to move out of the house, and tries to return the
$5,000 to Frances. Frances claims that she has an enforceable contract to buy the house.
Smith claims that any such contract must be in writing to be enforceable under the
Statute of Frauds. Who is correct and why?
Any action challenged as an attempt to monopolize must have been specifically
intended to exclude competitors and garner monopoly power.
A court may refuse to enforce an exculpatory clause on the ground that it is
unconscionable.
Efrem owns Fans & Players, a retail sporting goods shop. When Great Hill Lodge, a
new ski resort, is built in the area, Efrem decides to expand and borrows a large sum
from Hometown Bank. The bank takes a security interest in Efrems present inventory
and any after-acquired inventory as collateral for the loan. The bank properly perfects
the security interest by filing a financing statement. Efrems business is profitable, and
he begins doubling his inventory. A year later, an avalanche destroys the ski slope and
lodge. Efrems business takes a turn for the worse, and he defaults on his debt to the
bank. The bank seeks possession of his entire inventory, even though the inventory is
twice as large as it was when the loan was made. Efrem claims that the bank has rights
to only half of his inventory. Is Efrem correct? Explain.
An acceptor is primarily liable on an instrument.
A business organization and its actions cannot be based on trust.