RockStar Software, Inc., develops a new series of performance-related video games.
This software is most likely protected by
a. copyright law.
b. patent law.
c. trademark law.
d. trade secrets law.
Bob, research manager for CornAgri Products, Inc., applies utilitarian ethics to
determine that an action is morally correct when it produces the greatest good for
a. Bob.
b. CornAgri.
c. the fewest people.
d. the most people.
Mall Stores Corporation owns 95 percent of the shares of Niche Retail Corporation.
Mall Stores combines with Niche Retail, but only Mall Stores continues to exist. This
transaction was
a. a consolidation.
b. a share exchange.
c. a short-form merger.
d. a termination.
Beachside Pools, Inc., agrees to build a swimming pool for Candy, but fails to build it
according to the contract specifications. Candy hires Do-We Fix-It Company to finish
the project. Candy may recover from Beachside
a. the contract price less costs of materials and labor.
b. the contract price.
c. the costs needed to complete construction.
d. profits plus the costs incurred up to the time of the breach.
Final Foto, Inc., makes photo and video editing software, which includes a shrink-wrap
agreement. Gert buys a package of the software. With respect to the contract for the
softwares purchase, the shrink-wrap agreement may not be enforced if
a. Gert does not read it.
b. Gert learns of it after contracting.
c. Gert learns of it before contracting.
d. the quality of the software is poor.
Cross-Country Trucking Company contracts with Baldwin to transport crated goods to a
certain destination for $5,000. Cross-Country delivers the crates, but Baldwin does not
pay. Cross-Country learns that the crates contained stolen goods. Cross-Country can
a. do nothing with respect to the contract.
b. recover $5,000 from Baldwin.
c. recover the goods but not the $5,000 from Baldwin.
d. recover the goods or the $5,000 from Baldwin.
Forest & Field Company makes and leases a backhoe to Zach. Due to a defect
attributable to Forest & Fields negligence, Zach is injured in an accident in which his
neighbor Aron is also hurt. In a product liability suit based on negligence, Forest &
Field may be liable to
a. Aron only.
b. no one.
c. Zach and Aron.
d. Zach only.
Peter offers to pay Quik Delivery (QD) $50 if it picks up and delivers to him a package
from Rico within 30 minutes. QD can accept the offer only by meeting the deadline. If
QD performs as directed, these parties will have
a. a bilateral contract.
b. a trilateral contract.
c. a unilateral contract.
d. no contract.
Fact Pattern 10-1
Moore Properties, Inc., offers in writing to sell to Lawn Acres Development
Corporation a certain half-acre of land for “$112,000. After Lawn Acres signs the offer
in acceptance and returns it, Moore discovers that the price should have been stated as
“$121,000.
Refer to Fact Pattern 10-1. Moores misstatement of the price is
a. a bilateral mistake.
b. a fraudulent misrepresentation.
c. a unilateral mistake.
d. unconscionable.
Lars accuses Moe, an attorney, of committing malpractice. Malpractice is
a. a breach of ethics.
b. a defalcation.
c. a mistake in judgment.
d. professional negligence.
Commercial Development Corporation (CDC) hires Delta Construction Company to
work at a site as an independent contractor. Whether CDC will be liable for torts
committed at the site by Delta depends on
a. what Delta bid for the job.
b. whether exceptionally hazardous activities are involved.
c. which party obtained insurance to cover tort liability.
d. who is paying Delta.
On Monday, Neil tells Outdoor Landscaping, Inc., that he will pay Outdoor $500 if a
variety of tasks are completed by Friday. On Wednesday, when Outdoor is more than
half done with the work, Neil says that he has changed his mind. These parties had
a. an expired contract when Neil said that he had changed his mind.
b. a quasi contract when Neil said that he would pay for certain work.
c. a unilateral contract as soon as Outdoor began to perform.
d. no contract.
The Warehouse Workers Union represents Valley Transfer Companys employees in
collective bargaining negotiations over a new contract. In a memo to the employees,
Valleys president Uri accuses the union of delaying tactics. Later, Troy, a Valley
employee, tells Stella, his supervisor, that Uri is “a m*****f****r. Stella fires Troy for
violating a company rule against “threats. Troy files a suit against Valley. Under the
holding in Media General Operations, Inc. v. National Labor Relations Board, the court
will most likely conclude that the National Labor Relations Act
a. did not protect Troy from discharge.
b. does not apply to the use of profanity.
c. protected Troy from discharge.
d. requires Troys immediate arrest.
Olive Grove Enterprises, Inc., completes its registration process and issues a
free-writing prospectus. This tells prospective investors
a. about investing freely.
b. how to write their own prospectus.
c. that they can “freely write their own ticket to buy Olives securities.
d. that they may obtain the prospectus at the SECs Web site.
Fact Pattern 16-1
Ewa signs an instrument unconditionally promising to pay to “First State Bank $5,000
with interest in installments with the final payment due June 1, 2012.
Refer to Fact Pattern 16-1. The instrument that Ewa signed is most likely
a. a certificate of deposit.
b. a draft.
c. an order to pay.
d. a promissory note.
Sol is chairman of the board of Tasty Foods Corporation. Uma, a consumer, falls sick
after eating a Tasty product. Uma sues Tasty, and Sol individually. Tasty may pay Sals
legal fees
a. only if Sol wins the suit.
b. only if Tasty wins the suit.
c. only if Uma wins the suit.
d. regardless of the outcome.
Eduardo is an employee of Free-Flo Plumbing Corporation. With respect to the
workplace, under federal health and safety statutes, Free-Flo has
a. a general duty to keep it safe and to meet specific standards.
b. no general duty to keep it safe but must meet specific standards.
c. no general duty to keep it safe or to meet specific standards.
d. only a general duty to keep it safe.
Fact Pattern 1-1
The Texas Supreme Court decides the case of Livewire Co. v. Power Corp. Of nine
justices, five believe the judgment should be in Livewires favor. Justice Bellamy, one of
the five, writes a separate opinion. The four justices who believe the judgment should
be in Powers favor join in a third separate opinion.
Refer to Fact Pattern 1-1. These opinions are collected and published in volumes called
a. citations.
b. codes.
c. regulations.
d. reporters.
In making business decisions, Glenda, personnel manager for HVAC Maintenance, Inc.,
applies his belief that all persons have fundamental rights. This is
a. a religious rule.
b. the categorical imperative.
c. the principle of rights.
d. utilitarianism.
Riley, an engineer for Shur-2-Gro Seed Corporation, learns that Shur-2-Gro has
developed a corn hybrid to triple the output of any farm. Riley buys 20,000 shares of
Shur-2-Gro stock. He tells Tess, who buys 15,000 shares. After the new hybrid is
announced publicly, the price of Shur-2-Gro stock increases. Riley and Tess sell their
shares for a profit. Under the Securities Exchange Act of 1934, liability may be
imposed on
a. none of these parties.
b. Riley and Tess only.
c. Riley only.
d. Riley, Shur-2-Gro, and Tess.
Fact Pattern 2-1
Java Cafes, Inc., and Kaffe Import Corporation dispute a term in their contract.
Refer to Fact Pattern 2-1. Resolving the dispute between Java and Kaffe by having a
neutral third party render a binding decision is one of the advantages of
a. arbitration.
b. conciliation.
c. intervention.
d. mediation.
Bret contracts to work for City Construction Corporation (CCC) during July for $4,500.
On June 30, CCC cancels the contract. Bret declines a similar job with Downtown
Builders, Inc., which would have paid $4,000. Bret files a suit against CCC. As
compensatory damages, Bret can recover
a. $4,500.
b. $4,000.
c. $500.
d. $0.
OK Dry-Cleaning advertises so effectively that the regular customers of its competitor
Purity Cleaners patronize OK instead of Purity. This is
a. appropriation.
b. conversion.
c. wrongful interference with a contractual relationship.
d. none of the choices.
Garth dies without a will. The distribution of Garths property, including his eleven
forested acres near Hope, Arkansas, is prescribed by
a. a court-appointed executor.
b. federal probate statutes.
c. state intestacy laws.
d. Garths relatives.
Uri is an employee of Verity Security Services. For Uri to obtain the benefits of federal
wage-hour requirements, Verity must be engaged in
a. business activity.
b. employment at will.
c. international commerce.
d. interstate commerce.
In the facts of the previous question, according to the court in the Central case, a party
that would prefer a different result should seek relief from
a. Congress.
b. the courts.
c. the president.
d. the students of WSU and other state schools.
Federal law requires new car labels to state fuel economy estimates. California state law
proscribes deceptive advertising. Chad buys a new car from Drive-Away Sales in
California. Later, Chad files a suit against the cars manufacturer, claiming that the car
does not attain the fuel economy estimate and thus its maker engaged in deceptive
advertising in violation of state law. In the opinion of the dissent in Paduano v.
American Honda Motor Co., the court should hold that
a. the federal law does not preempt Chads state law claim.
b. the federal law preempts Chads state law claim.
c. Californias state law preempts the federal fuel economy law.
d. the federal and state laws preempt each other.
Jake is charged with embezzlement. Embezzlement is not robbery because
embezzlement may be committed without
a. a criminal act.
b. a criminal intent.
c. taking property from its owner.
d. the use of force or fear.
Owen and Pablo enter into a contract for a sale of fifty Western saddles. Pablo pays, but
Owen does not deliver. Pablo can normally recover as damages the difference between
a. any loss avoided and any profit gained.
b. the actual price and the hoped-for price.
c. the contract price and the market price.
d. the current prices in the parties locations.
Gretel, an obese individual, files a suit against Hot n Tasty, Inc., alleging that its food is
unhealthy because, as is well known, it contains high levels of salt and sugar. Gretels
suit is most likely to
a. fail, because salt and sugar are not unhealthy ingredients in food.
b. fail, because the danger is well known to a reasonable consumer.
c. succeed, because consumers are not aware of the danger.
d. succeed, because the food is most likely a cause of Gretels obesity.
A void contract is enforceable if it is in writing.
A patent applicant must demonstrate that the invention, discovery, or design is
commercially practicable to receive a patent.
In an ordinary bailment, a bailee has the right to limit his or her liability.
If a contract requires performance to the personal satisfaction of a party, the party must
in all cases be personally satisfied.
Before a principal can ratify a contract, the principal must know all of the material facts
involved in the deal.
An instrument is not defective because it has been previously dishonored.
The doctrine of quasi contract applies only if there is an actual contract.
Shareholders own a corporation.
Sally and Tom decide to go into business, selling discounted merchandise through their
Web site “e-Buy. They sign a partnership agreement that requires Sally to contribute
$12,000 and Tom to contribute $8,000 in capital to start the firm. The agreement also
states that only Sally will have the authority to bind the partnership in deals with third
parties, but the agreement says nothing about the management of the firm or a division
of profits. Without Sallys knowledge, Tom tells United Computer Products, Inc., that he
represents the firm and signs a contract with United to buy hard drives for resale on
e-Buy. In the first year, e-Buy makes a profit of $50,000. What are the partners rights
with respect to the management of the firm? Is the partnership bound to the contract
with United? Do the partners split the first years profits? If so, how much is each
entitled to?
A buyer in the ordinary course of business has priority over any security interest created
by the seller.
In most bailments, the bailee has a right to place a lien on the bailed property until he or
she is fully compensated.
Corporate directors and officers are insurers of business success.
Olaf, an executive with Pharma Product Distribution, Inc., has to decide whether to
market a product that might have undesirable side effects for a small percentage of
users. How should Olaf decide whether to sell the product? How does the standard of
ethics that is applied affect this answer?
Scienter exists if a party makes a statement that he or she does not believe is true.
Parties can form a contract without putting the terms in writing.