Mythic Games Company employs two hundred workers full-time. If Mythic Games
plans to have a mass layoff, it must provide its employees with notice of at least
a. thirty days.
b. sixty days.
c. ninety days.
d. one year.
Online GPS Corporation owns 95 percent of the shares of Pinpoint App Inc. Through a
certain transaction, Online GPS combines with Pinpoint App, but only Online GPS
continues to exist. This is
a. a consolidation.
b. a share exchange.
c. a short-form merger.
d. a termination.
Orla leases a building to Pleasant Valley Residence, an assisted living facility. During
the term of the lease, Orla installs a new roof and commercial kitchen appliances, and
repaves the parking lot. Most likely to meet the definition of a trade fixture is
a. the kitchen appliances.
b. the parking lot.
c. the roof.
d. none of these choices.
Ribeye Restaurants Inc. wants to acquire or merge with SteakHouse Corporation.
Ribeye should
a. file a plan of merger with the secretary of state.
b. file an article of merger with SteakHouse.
c. make a tender offer to the SteakHouse shareholders.
d. make a tender offer to the Ribeye shareholders.
Grande Floors, Inc., and Home Decor Stores enter into a contract for a sale of carpeting.
Grande Floors, 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.
Emylee, an employee of Farm Supplies, Inc., files a sexual-harassment suit against
Gowan, her supervisor. Emylee wins. Farm Supplies may also be liable if it had
effective harassment policies and complaint procedures, and
a. none of the employees followed them.
b. Emylee followed them.
c. all of the employees were aware of them.
d. Gowan followed them.
Eloise is a director for Frozen Yogurt Company. Eloise is also a director for Gelato
Desserts, Inc. When the board of Frozen Yogurt considers entering into a contract with
Gelato Desserts, Eloise must
a. resign from one of the boards.
b. resign from both boards.
c. make a full disclosure of any conflict of interest.
d. use her best business judgment in voting on the proposed deal.
Mikayla, an agent for Nahir, enters into a contract on Nahir’s behalf with Onora that
must be in writing to be enforceable under the Statute of Frauds. Mikayla’s authority to
enter into this contract is not in writing. Under the equal dignity rule, this contract is
a. enforceable.
b. void.
c. voidable at Nahir’s option.
d. voidable at Onora’s option.
Ground-Up Construction Corporation (CCC) has a right of action against Heavyquip,
Inc. Ground-Up Construction merges with Investors Development, Inc., with Investors
absorbing Ground-Up. After the merger, Ground-Up’s right of action against Heavyquip
can be exercised by
a. Ground-Up.
b. Investors.
c. Heavyquip.
d. no one.
Study Aids Inc. offers to buy the stock of Test Prep Products Corporation. Test Prep’s
directors oppose the offer. Some of the Test Prep shareholders file a suit, alleging a
breach of the directors’ fiduciary duties. Most likely, the court will
a. apply the business judgment rule to analyze the directors’ acts.
b. dismiss the suit as a non-judicial dispute over “fair value.”
c. evaluate the terms of the deal on the basis of antitrust law.
d. order the shareholders to be paid a “premium” for their stock.
Grid Tool Company makes and sells tools. One of the tools is believed to be hazardous.
The appropriate government agency may require Grid to
a. export the tool and sell it only abroad.
b. increase the price to cover the cost of any injuries or damage.
c. reduce the price to indicate the hazard to consumers.
d. remove the tool from the market.
Lost in a canyon near Death Valley, California, Edina writes her will in crayon, on a
paper bag, while Farrow states orally how he wants his estate distributed. Most states
do not permit
a. a holographic will.
b. a nuncupative will.
c. a will written on a paper bag.
d. a will written in crayon.
Orsa is a shareholder in Pickles & Preserves Corporation. In some states, Orsa may be
liable to the firm’s creditors for unpaid corporate debts if she
a. accepts a dividend knowing that it was paid from retained earnings.
b. receives shares issued by the firm for less than fair-market value.
c. fails to fulfill her fiduciary duty to the majority shareholders.
d. sells her shares.
April is an accountant whose clients include Bistro Restaurants Inc. If April is negligent
in her work for Bistro, most courts would hold her liable to Bistro and
a. any third party.
b. no third party.
c. third parties who are foreseen users of the work.
d. third parties who are reasonably foreseeable users of the work.
Ramon is a shareholder of Quantum Mechanix Corporation. Ramon could normally ex-
ercise appraisal rights if Quantum participated in
a. a consolidation.
b. a dissolution.
c. a liquidation.
d. a winding up.
Geno’s Italiano Ristorantes, Inc., employs three hundred workers at four locations in
two states. Under federal law, Geno’s must provide each employee, during any
twelve-month period, family or medical leave of up to twelve
a. days.
b. weeks.
c. months.
d. years.
Fact Pattern 25-1B
Open Pit Excavation Inc. operates a rock quarry next to Robyn’s vineyard and winery.
Robyn files a suit against Open Pit, alleging that the quarry is a nuisance and
unreasonably interferes with Robyn’s enjoyment of her property.Refer to Fact Pattern
25-1B. The court is most likely to award Robyn damages
a. if letting the pollution continue is equally as harmful as stopping it.
b. if letting the pollution continue is less harmful than stopping it.
c. if letting the pollution continue is more harmful than stopping it.
d. under no circumstances.
Renee is a director of Sharp Focus Lens Corporation. With respect to Sharp Focus,
Renee can access the corporation’s books and records. Renee has this access under
a. the director’s right to participation.
b. the director’s right of inspection.
c. the director’s right to indemnification.
d. the articles of incorporation or corporate bylaws.
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. initial board of directors.
b. incorporators.
c. first officers.
d. preferred shareholders.
Employment Personnel Company draws a check payable to Felix. Felix indorses the
back and negotiates the check to Guaranty Bank. Primarily liable on the check is
a. Employment Personnel.
b. Felix.
c. Guaranty Bank.
d. none of the choices.
Celine issues a note “payable to the order of Celine,” forges Dash’s signature as the
maker, and indorses the note “pay to Erica.” Celine sells the note to Erica, who
negotiates it by indorsement and delivery to Forest. Forest can extend liability to
a. no one.
b. Celine.
c. Dash.
d. all of the parties.
Gulf Bank receives a check drawn by Hayward. The check is received after the
established “cutoff” hour. Payment can be postponed without dishonor
a. indefinitely.
b. under no circumstances.
c. for thirty days.
d. until the following business day.
Logan is Mining Corporation’s agent and is authorized to write checks on Mining’s
account in Northwest Bank. Logan writes a check “pay to the order of Oceanside
Resort.” Logan signs the check “Mining Corporation, by Logan, agent.” Northwest
Bank dishonors the check. Liability extends to
a. Logan.
b. Oceanside.
c. Mining Corporation.
d. no one.
Rafe obtains a fire insurance policy on his vacation cabin near Smoky Mountain from
Torchlight Insurance Company. The cabin is lost in a fire, but the parties dispute the
amount of Torchlight’s liability under an ambiguous clause in the policy. A court would
most likely
a. interpret the clause against Rafe.
b. interpret the clause against Torchlight.
c. rewrite the clause and apply it as rewritten.
d. strike the clause from the policy.
La-Z Days Motels, Inc., and Beds R Us Corporation enter into a contract that does not
specify the payment terms. Payment may be made in
a. any commercially normal or acceptable means except credit card.
b. cash only.
c. any commercially normal or acceptable means.
d. cash or check only.
Mallory’s sister Naomi gives Mallory a leather working kit for Christmas. Mallory uses
the kit to make a saddle. Mallory’s acquisition of the saddle is by
a. gift.
b. accession.
c. confusion.
d. production.
Marco conveys three acres of wetlands to Nature Preserves, Inc., with a deed that
warrants only that Marco held good title during his ownership of the property. This
deed is
a. a grant deed.
b. a quitclaim deed.
c. a special warranty deed.
d. a warranty deed.
Rochelle, an accountant, enters into a contract to provide services to Sky Transport Inc.
Rochelle does not finish the work within the contract’s deadline. Sky Transport pays a
penalty for the missed deadline and hires Turbo to complete the job. Rochelle is most
likely liable for
a. nothing.
b. Sky Transport’s penalty and the cost to hire Turbo.
c. Sky Transport’s penalty only.
d. the cost to hire Turbo only.
Oswald, an employee of Pipes & Plumbing Company, fills out his time sheets by
rounding off his hours and thus effectively listing more time than he actually worked.
Pipes & Plumbing submits the time sheets to a federal regulatory agency. For Oswald to
be held criminally liable for lying, the false information on his time sheets must be
a. considered material.
b. made under oath.
c. made after a warning about the consequences of a false statement.
d. in writing.
Northwest Energy Corporation signs an instrument that states it is being executed “as
per contract for a purchase of 4,000 barrels of oil dated September ” This instrument is
a. negotiable.
b. nonnegotiable, because information about the sale must be obtained from another
source.
c. nonnegotiable, because it states an express condition to payment.
d. nonnegotiable, because the terms of the contract are not clear on the face of the
instrument.
Garden Supply Company and Home & Lawn Corporation plan to consolidate. Most
likely, the articles of consolidation will be filed with
a. the county recording office.
b. the local retailers’ association.
c. the state’s secretary of state.
d. the U.S. Department of Commerce.
Olivia is Physicians Clinic agent and is not authorized to sign checks or notes on its
behalf. Despite the lack of authority, Olivia issues a note “payable to the order of Quik
Loan Company [signed] Physicians Clinic, by Olivia.” Liability on this note extends to
a. Physicians Clinic.
b. Olivia.
c. Quik Loan.
d. no one.
Data & Data Accountants, a private employer, handles bookkeeping for small
employers. In most circumstances, with exceptions, federal law clearly prohibits Data
& Data from subjecting its employees to
a. job-skills tests.
b. monitoring of business communications.
c. drug tests.
d. lie-detector tests.
Estelle, who owns and operates a commercial dairy farm, obtains a policy from Farm &
Ranch Insurance Company, which agrees to pay $500,000 to Gabe, Estelle’s son and
beneficiary, on her death. This is
a. disability insurance.
b. health insurance.
c. liability insurance.
d. life insurance.
Blaise is an officer with Core Business Services, Inc. Blaise is in a position to acquire
assets that would benefit the company if acquired in its name. Blaise’s usurping this
opportunity may violate the duty of
a. acting in one’s own interest.
b. agency.
c. care.
d. loyalty.
The National Pollutant Discharge Elimination System focuses on industrial wastewater
and storm water discharges.
For civil sanctions to be imposed under Section 10(b) of the Securities Exchange Act of
1934 and SEC Rule 10b-5, the violator must not have had an intent to defraud or
knowledge of his or her misconduct.
Rashi is a student at State University. In need of funds to pay for tuition and books,
Rashi asks Tiempo Loans, Inc., for a short-term loan. The lender agrees to make a loan
if Rashi will have someone who is financially responsible guarantee the loan payments.
Umberto, a well-known businessperson and a friend of Rashi’s family, calls Tiempo and
agrees to pay the loan if Rashi cannot. Because of Umberto’s reputation, the loan is
made. Rashi is making the payments, but because of illness he is unable to work for one
month. He asks Tiempo to extend the loan for three months. The lender agrees, raising
the interest rate for the extended period. Umberto is not notified of the extension (and
thus does not consent to it). One month later, Rashi drops out of school. All attempts to
collect the remainder of the loan from Rashi fail. Can Tiempo assert a claim against
Umberto on the debt?
Generally, the law assumes that the principal is aware of any information acquired by
the agent that is relevant to the agency.
When a bailee is holding goods that are to be delivered under a contract without being
moved, the risk of loss cannot pass to a buyer.
Generally, under employment-at-will doctrine, an employer may fire an employee even
if doing so would violate a federal or state statute.
Predatory pricing is a legitimate marketing practice, not a form of anticompetitive
conduct.
Negotiating order instruments requires either delivery or indorsement but not both.
A buyer in the ordinary course of business takes the goods free from any security
interest created by the seller unless the security interest is perfected.
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.
Anyone can submit comments on a proposed administrative rule.
On a partner’s dissociation, the partner’s duty of loyalty ends.
Title and risk of loss can pass to the buyer from the seller before the goods are
identified to the contract.
A easement is the revocable right of a person to come onto another person’s land.
The equal dignity rule requires that if a contract entered into by an agent is in writing,
the principal must honor it.
A bailee must exercise reasonable care in preserving the bailed property.
Directors are prevented from ever having financial dealings with the corporations they
serve.
Water-quality standards are set by the Environmental Protection Agency.