Precise GPS Company’s ad states that its product is “the finest that money can buy.”
Because of this ad, the Federal Trade Commission is most likely to issue
a. a cease-and-desist order.
b. a counteradvertising order.
c. a multiple product order.
d. none of the choices.
On May 1 Jill offers to sell Andrea a herd of sheep. On May 3 Jill mails Andrea a letter
revoking the offer. Andrea receives the letter on May 5. Jill’s revocation of the offer to
sell the sheep became effective on
a. May 1.
b. May 3.
c. May 4.
d. May 5.
Shasta offers to sell a used hay baler to Roberto, but receives a letter of acceptance from
Quito, who has no relation to Roberto. A valid contract exists between
a. Shasta and Roberto.
b. Shasta and Quito.
c. Roberto and Quito.
d. none of the choices.
Procter, who is not in contemplation of imminent death, tells his daughter Opal that she
can have his Dodge truck on his death, whenever that happens. This is
a. an effective gift causa mortis.
b. an effective gift inter vivos.
c. an effective gift largesse.
d. not an effective gift.
Regal Autos, Inc., sells cars to consumers. To avoid liability for oral express warranties,
each sales agreement should note that a car is sold
a. as is.
b. in perfect condition.
c. subject to warranties included in the written contract only.
d. with no known defects.
Ada is the maker of a note, on which Bart is secondarily liable. Cash & Credit
Company (C&C) is the current holder of the note. Bart will be obligated to pay the note
if
a. Ada defaults on the note.
b. C&C breaches a transfer warranty.
c. C&C negotiates the note to Delta Collection Agency, a third party.
d. C&C presents the note for payment.
Jayme’s voluntary petition for bankruptcy is found to be proper. The order for relief is
effective as soon as
a. Jayme files the petition.
b. Jayme posts a bond to cover the costs of the proceedings.
c. Jayme’s creditors agree to the terms.
d. the trustee collects and distributes the property of Jayme’s estate.
Jerzy is an accountant whose clients include Kopper Kettle Restaurants, Inc. For a
violation of securities laws, Jerzy may be subject to
a. comprehensive liability.
b. corporate liability.
c. criminal liability.
d. no liability.
Gourmet Foods, Inc., requires all distributors of its products to sell them at a specified
minimum price. Under the Sherman Act, this is a violation
a. if the anticompetitive effects outweigh the competitive benefits.
b. if the competitive benefits outweigh the anticompetitive effects.
c. under any circumstances.
d. under no circumstances.
Congress enacts a statute to outlaw a specific type of anticompetitive business
agreement. Like other laws that regulate economic competition, this law is referred to
as
a. a federal trade commission act.
b. an antitrust law.
c. an interstate commerce act.
d. a suppressive restraint on trade.
Riverview Bank makes a mortgage loan of $95,000 to Pomeroy to buy a home. Under
federal law, if Riverview fails to provide certain material disclosures with respect to the
loan, Pomeroy’s right to rescind the loan
a. expires at midnight on the day the loan is finalized.
b. is canceled immediately.
c. is extended for up to three years.
d. is tolled for the duration of the mortgage payments.
Hilda signs a contract with Indemnity Insurance Company that intentionally confers a
benefit on Hilda’s daughter Jackie as the designated beneficiary. Jackie’s rights under
the contract will vest
a. automatically.
b. if she demonstrates her consent to the promise at Hilda’s request.
c. if Indemnity attempts to modify the terms of the contract.
d. on the occurrence of the event for which the insurance was procured.
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.
Sweet Candy, Inc., and Tasty Treats stores enter into a contract for a sale of confections.
Sweet, a merchant who deals in goods of the kind sold, makes express warranties in
connection with the sale. Under the UCC, at the time a contract is formed, an express
warranty can be disclaimed or modified
a. by clear, conspicuous language called to the buyer’s attention.
b. by implied affirmations of fact relating to the goods.
c. in any way that the seller sees fit for the ordinary purpose.
d. in no way.
Mango Corporation believes that Melon Corporation engages in anticompetitive
behavior in an attempt to drive Mango and its other competitors out of the market.
Antitrust laws can be enforced against Melon by
a. Mango and its competitors only.
b. Mango, its competitors, and the Federal Trade Commission only.
c. Mango, its competitors, the Federal Trade Commission, and the U.S. Department of
Justice.
d. the Federal Trade Commission and U.S. Department of Justice only.
Yokio, Ltd., and Zeno, S.A., transact an international sale of goods. At the request of
these parties, a court in Portugal resolves a dispute between them. A U.S. court will
most likely honor the judgment
a. if it is consistent with U.S. laws and public policy.
b. if it is consistent with Portuguese laws and public policy.
c. if it does not benefit the U.S. to deny it.
d. under no circumstances.
Consumer Finance Corporation (CFC) extends credit to consumers. CFC is subject to
the Equal Credit Opportunity Act, which prohibits credit discrimination based on
a. intelligence.
b. education.
c. income.
d. race.
Olga, a salesperson for Pre-owned Cars & Trucks, Inc., tells Quincy, “This is the best
car I”ve ever seen.” This statement is
a. an express warranty.
b. an implied warranty.
c. a warranty of title.
d. puffery.
Lexy and Mort act as the incorporators for NuGame Corporation. After the first board
of directors is chosen, subsequent directors are elected by a vote of NuGame’s
a. board of directors.
b. employees.
c. officers.
d. shareholders.
Root & Branch Lumber Company obtains a fire insurance policy from Statistical
Insurers, Inc., on a $400,000 warehouse. The policy includes an 80-percent coinsurance
clause. Root & Branch insures the property for $320,000. In a fire, the warehouse
suffers $200,000 in damage. Root & Branch can recover
a. $400,000.
b. $320,000.
c. $200,000.
d. $80,000.
Verna makes a living by commercial fishing in a river allegedly polluted by Wall Paint
Company. To bring a suit against Wall Paint on the ground of private nuisance, Verna
must allege that she suffers from
a. a distinct harm separate from that affecting the general public.
b. a lesser harm than an injunction would impose on Wall Paint.
c. Wall Paint’s failure to use reasonable care to avert herm to Verna.
d. the same harm as that affecting the general public.
Gulf Air, Inc., is the major wholesale distributor of software in the state of Florida. Its
closest competitor is Fluid Systems Company, another Florida firm. The two firms
agree that Gulf Air will operate in south Florida and Fluid Systems will operate in north
Florida. This is
a. a group boycott.
b. a market division.
c. a joint venture.
d. an exclusive-dealing contract.
Jim agrees to act on Kit’s behalf, subject to Kit’s control, and Kit trusts Jim to so act.
This describes a relationship between
a. a business and its competitors.
b. a government and its governed.
c. a parent and a child.
d. a principal and an agent.
CPA Accounting, LLC, is a limited liability company. If the law in CPA’s state is like
the law in most states, unless the members have agreed otherwise, participants in the
firm’s management will be considered to include
a. all members.
b. no member.
c. one member.
d. two members, including at least one general partner.
Sari buys a new sport utility vehicle (SUV) from Terrific Cars & Trucks, Inc. The most
important factor in determining whether an express warranty is created is whether
a. Sari expresses to Terrific what she wants warranted.
b. Sari’s desire for the SUV becomes part of her motivation to deal.
c. Terrific expresses to Sari what it expects of its customers.
d. Terrific’s promise becomes part of the basis of the bargain.
Ellen offers to sell her math textbook to Julia for $50. Julia does not respond. Ellen and
Julia do not have a contract because they lack the requirement of
a. agreement.
b. capacity.
c. consideration.
d. legality.
Pete, an accountant, convinces his client Kasey to invest her savings in a nonexistent
social-networking Web site. When Kasey learns the truth, she can
a. seek to void the contract on the ground of undue influence.
b. recover damages based on a claim of mistake of value.
c. rescind the contract to invest in the Web site.
d. seek to void the contract on the ground of unconscionability.
Painless Dental Equipment Company is incorporated in Colorado. In Wyoming,
Painless is
a. a domestic corporation.
b. a foreign corporation.
c. an alien corporation.
d. a non-entity.
Lou and Mira want to rescind their contract under which Lou sold an MP3 player to
Mira for $50. To rescind the contract
a. Lou must return the $50 and Mira must return the player.
b. Lou must return the $50 only.
c. Mira must return the player only.
d. the parties can keep the “benefits” of their bargain.
To Cody, the written law of a particular society at a particular time is most significant.
Cody is a
a. legal positivist.
b. legal rationalist.
c. legal realist.
d. person who adheres to the natural law school.
Hanson and Taylor sign a written contract for the transfer of Hanson’s Foot & Ankle
Clinic to Taylor. Hanson claims that the parties later orally agreed to modify it. Any oral
modification is likely not enforceable if it falls under
a. the doctrine of promissory estoppel.
b. the “main purpose” rule.
c. the “partial performance” exception.
d. the Statute of Frauds.
Mary’s home is in a state that has a $30,000 homestead exemption. Mary defaults on a
$60,000 debt that she owes to Nina. Mary’s home is sold at auction for $80,000.
Nina may recover
a. $0.
b. $30,000.
c. $50,000.
d. $60,000.
To raise $12 million to expand operations, Star Corporation makes a stock offering
directly to sixty accredited investors and twenty sophisticated, but unaccredited
investors. Star plans to notify the SEC of sales. Under the Securities Act of 1933, this
issue may qualify as an “exempt” transaction
a. as is.
b. if all of the investors are also given certain material information.
c. if the offering is also made available to the general public.
d. under no circumstances.
The board of directors of Integral Components Corporation consists of Frida, Gayla,
and Hart. A quorum is the minimum number of these directors
a. who must be at odds in a dispute to call for its resolution.
b. who must be present to validly transact business.
c. that the shareholders may remove from office at any one time.
d. whose positions must be vacant to warrant an election.
When no delivery terms are specified in a contract for a sale of goods, there is no basis
for determining a remedy.
In a consolidation, the consolidating corporations become subsidiaries of the new
corporation.
A collateral promise is one made by a third party to assume the debts or obligation of a
primary party to a contract if the primary party does not perform.
An employer may avoid laws regulating monitoring activities by informing employees
that they are subject to monitoring.
An integrated contract is a contract with more than one subject or part.
Consequential damages are awarded to cover all of the remote consequences of
whatever injury a nonbreaching party suffers.
A surety can be required to pay an obligation only after the principal debtor defaults
and usually only after the creditor has made an attempt to collect from the debtor.
Americans with a Better Cause (ABC), a nonprofit organization, files a suit against the
U.S. Department of Justice (DOJ), claiming that a certain federal statute the DOJ is
empowered to enforce conflicts with the U.S. Constitution and with a state constitution.
In each situation, which source of law has priority?
ADR proceedings are always strictly regulated by federal statutes.
Accountants may be subject to criminal penalties for violations of federal securities
laws.
Killing a wild animal amounts to assuming ownership of it.
On a trade acceptance, the drawer is also the payee.
Rulings from bankruptcy courts are finalthey cannot be appealed.
Discount Mart, Inc., files a suit in a state court against Elements Computer Corporation,
alleging that Elements breached a contract to sell 500 notebook computers to Discount.
During the course of the suit, Discount files a motion for judgment on the pleadings,
Elements files a motion for a directed verdict, and both parties file motions for
summary judgment. When and for what purpose are each of these motions made?
A law that limits only some persons’ exercise of a fundamental right is valid under any
circumstances.
An assignee has a right to demand performance from the obligor.