Richard suspects his supervisor of unethical accounting practices. However, he does not
want to lose his job if he reports the supervisor and the supervisor finds out who
reported him. An important feature of online reporting systems like EthicsPoint is
a. the employee reporting the unethical behavior can do so anonymously.
b. the employee reporting the unethical behavior is financially compensated if he loses
his job as a result of the report.
c. the employee reporting the unethical behavior must give his full name when making
the report.
d. the employee reporting the unethical behavior must have another employee
supporting him.
Sof” Chair Company contracts to deliver 100 chairs to Stuffy Furnishings Store on May
1 for which Stuffy agrees to pay. Sof” tells Stuffy on April 15 that delivery will be
delayed until June 1. Stuffy may
a. await performance, sue Sof”, or suspend its own performance.
b. only await Sof’s performance for a commercially reasonable time.
c. only sue Sof” for breach of contract.
d. only suspend its own performance.
To widen a highway, the state of Ohio obtains, through a judicial proceeding, title to the
individual lots in a residential neighborhood. A subsequent proceeding will determine
a. how much the former owners should be paid for their property.
b. how soon the former owners should vacate their property.
c. how wide the highway should be.
d. whether the planned highway would violate any zoning laws.
Fact Pattern 25-1
Echo takes her car to Fix-It, Inc., which repairs the car and bills Echo for $500. Echo
writes out a check drawn on Capital Bank, but later, believing that Fix-It did not repair
the car properly, issues a stop-payment order.
Refer to Fact Pattern 25-1. Capital Bank pays the check. Capital
a. can sue Echo for a wrongful stop-payment order.
b. can sue Fix-It for breach of contract.
c. can sue no one because it paid a check that was not properly payable.
d. is liable for Echo’s loss due to the wrongful payment.
Hi-Tech Company contracts to sell fiber optic cable to Internet Services, Inc. Hi-Tech
may bring an action to recover the purchase price and incidental damages if Internet
a. accepts the cable and pays for it.
b. accepts the cable but does not pay for it.
c. rejects the cable.
d. revokes acceptance of the cable.
Pete and Will have an option contract for the sale of some fresh vegetables. Jane and
Ashley have an option contract for the sale of some books. Neither contract has an
exact period of time specified in the option. The reasonable period of time implied is
a. the same for both contracts.
b. shorter for the vegetable contract than for the book contract.
c. longer for the vegetable contract than for the book contract.
d. determined by state laws.
Caf Cuisine Dining, Inc., employs one hundred workers at three locations in two states.
Under federal law, Caf Cuisine must provide its employees, during any twelve-month
period, family or medical leave of up to
a. twelve days.
b. twelve weeks.
c. twelve months.
d. twelve years.
Janice lives in Wendy’s beach house without paying rent. Janice’s tenancy is
a. a fixed-term tenancy.
b. a tenancy at will.
c. an illegal tenancy.
d. a periodic tenancy.
William goes to Saddle Up Stables in the middle of the night when no one is around and
takes five saddles. William’s crime is
a. forgery.
b. larceny.
c. robbery.
d. embezzlement.
Big Drill Oil Company employees one hundred workers. Big Drill must do all of the
following except
a. keep occupational injury and illness records for each employee.
b. report any work-related diseases directly to OSHA.
c. report any employee death due to a work-related incident to OSHA within eight
hours.
d. pay employees working more dangerous areas higher wages.
Olaf is the creditor in a transaction with Phil. Once certain requirements are met, Olaf’s
rights will attach, which means that Olaf will have
a. an indivisible ownership right to Phil’s property.
b. an enforceable security interest in Phil’s property.
c. a notice affixed to Phil’s property.
d. the permission of a court to seize Phil’s property.
Denise and Elke do business as Final Curtain Decorators. In most states, for purposes of
holding title to property, this partnership would be treated as
a. an aggregate of the individual partners.
b. a natural person.
c. an independent entity.
d. a non-existent party.
Dorothy files a petition for bankruptcy under Chapter 13. If she is granted a discharge,
debts that will most likely be discharged include
a. claims not provided for by the plan.
b. payments
on retirement accounts.
c. claims for domestic support obligations.
d. credit-card debt incurred more than one year before filing.
Oak Grove Residences, Inc., owns apartment buildings. Pedro leases one of Oak
Grove’s apartments. Pedro’s transfer of his interest in the lease to Quito for a period
shorter than the lease term is
a. an assignment.
b. an eviction.
c. a periodic tenancy.
d. a sublease.
Peter and Ray are riding their horses together. Peter jokingly tells Ray that Ray’s horse
is too slow. Ray laughs and jokingly responds “Yes, he is too slow! I would sell him for
$5!” Peter hands Ray $5. This is
a. a valid acceptance because Peter gave Ray the money in a reasonable time.
b. a valid acceptance because there is consideration on both sides.
c. not a valid acceptance because Ray’s offer was made in jest.
d. not a valid acceptance because Ray’s horse is worth more than $5.
Todos Ltd. agrees to supply Petro Refining, Inc., with oil from Venezuela. When the
government unexpectedly nationalizes the oil industry, Todos can obtain the resource
only at a much higher price. Petro agrees to pay but later files a suit to recover the
difference. The court will most likely rule that
a. a change in government is a risk ordinarily assumed in business.
b. an unforeseen difficulty supported the contract modification.
c. Todos engaged in extortion or the so-called holdup game.
d. Todos had a preexisting duty to supply the goods at the initial price.
Shasta offers to sell a used hay baler to Roberto, but receives a letter of acceptance from
Quito. A valid contract exists between
a. Shasta and Roberto.
b. Shasta and Quito.
c. Roberto and Quito.
d. none of the choices.
Canada and the United States are signatories of the Berne Convention. Doug, a citizen
of Canada, publishes a book first in Canada and then in the United States. Doug’s
copyright must be recognized by
a. all of the signatories of the Berne Convention.
b. Canada and the United States only.
c. Canada only.
d. none of the signatories of the Berne Convention.
Mutual Company enters into a contract to employ Neil as an investment manager for
two years. During the first year, Neil is often absent without explanation and when
present fails to adequately monitor and manage Mutual’s investments.
Refer to Fact Pattern 16-1. Neil’s performance is most likely
a. a material breach.
b. a minor breach.
c. Mutual’s breach.
d. no breach.
The payment of Jose’s debt to Klint is guaranteed by Jose’s personal property. The
process by which Klint can protect himself against the claims of third parties to this
property is
a. attachment.
b. default.
c. perfection.
d. termination.
On behalf of the rock group Uno, their manager Thalia agrees to a performance in
Seaside Amphitheatre on July 4. Rex, acting for Seaside, sends a written copy of the
agreement to Thalia to be signed. If Thalia signs the copy, the parties will have
a. an express contract.
b. an implied contract.
c. an implied-in-law contract.
d. no contract.
Margery defaults on her mortgage loan and her lender proceeds to foreclosure. Before
the foreclosure sale occurs, Margery’s aunt dies and leaves Margery a large inheritance.
Margery buys back her property by paying the full amount of the debt, plus all interest
and costs that have accrued. Margery has exercised her
a. right to forbearance.
b. equitable right of redemption.
c. right to short sale.
d. equitable right of foreclosure.
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.
Scienter exists in which of the following cases?
a. Martin knows that the transmission on his truck is defective, but does not tell this fact
to potential buyers.
b. The racehorse that Karen is trying to sell has a genetic defect, but Karen does not
know about the defect, and so she does not warn potential buyers.
c. Jake, a real estate agent, tells a client that he has a house that “will make all her
dreams come true.”
d. John forces Bill to sign a contract to sell John a car below market value.
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.
Jackson pays Phil in good faith for a promissory note. Phil warrants that the draft has
not been altered. This warranty is a
a. presentment warranty.
b. consideration warranty.
c. conditional warranty.
d. fixed warranty.
Valley Tack Shop signs a contract with Gary’s Boots and Saddles for delivery of five
saddles that cost $200 each. To be enforceable under the Statute of Frauds, the written
contract must designate
a. the method of delivery.
b. the method of payment.
c. the quantity of saddles.
d. the seller.
Tundi is a partner in YooHoo! Amusement, a new partnership. A YooHoo! debt comes
due. Tundi is
a. not liable for the debt.
b. only liable for the debt up to the amount of his capital contribution.
c. personally liable only to the extent the other partners do not pay.
d. personally liable to the full extent of the debt.
Wheels & Deals Corporation is subject to the Truth-in-Lending Act, which concerns
a. the credit-worthiness of certain financial institutions and lenders.
b. the disclosure of credit terms in certain transactions.
c. the limits on certain types of credit that a creditor may grant.
d. the limits on certain types of debt that a consumer can accrue.
Kris wants one of Jasmine’s purebred Persian kittens. Kris signs an instrument in which
she promises to pay Jasmine for a kitten. The instrument will be negotiable if it is
payable in
a. goods of equal market value.
b. money.
c. government bonds.
d. shares in stock.
Eye Appliance Company and Fast Courier, Inc., wish to combine all of their assets,
stock, and personnel into a new firm to be called Glasses2Go Corporation. This is
a. a consolidation.
b. a merger.
c. an exchange of assets.
d. a takeover.
During a union election campaign, Autowerks Repair, Inc., prohibits on-site
solicitations by any party, including Mechanics Union, which is seeking the workers’
unionization. This violates
a. federal labor law.
b. federal elections law.
c. federal employment discrimination law.
d. no federal law.
Finest Coffee Company agrees to buy an unspecified quantity of coffee beans from
Global AgriCorp. Global breaches the contract. Finest can most likely
a. enforce the agreement to the extent of a reasonable quantity.
b. enforce the agreement to the extent of Finest’s requirements.
c. enforce the agreement to the extent of Global’s output of coffee beans.
d. not enforce the agreement.
Jen files a suit against Kopper Kettle Company. While the suit is pending, Kopper
Kettle merges with Luminous Pans, Inc., with Luminous absorbing Kopper Kettle.
Now, liability in the suit, if any, rests with
a. Jen.
b. Kopper Kettle.
c. Luminous.
d. no one.
An insurer has a duty to investigate to determine the facts and provide reasons for any
decision to deny or reduce coverage of a particular claim.
An employer may avoid laws regulating monitoring activities by telling employees that
they are subject to monitoring.
A sale of “things attached to the land” is always considered a sale of goods.
A contract that calls for the performance of a legal act is enforceable.
To create an enforceable security interest, the secured party must give value.
To recruit employees from other countries, an employer must first obtain the approval
of the U.S. Department of Labor.
Chapter 7 of the Bankruptcy Code covers liquidations.
Recovery in a product liability case may be limited when it can be shown that the
plaintiff misused the product.
Secured parties have priority over unsecured parties to the proceeds from the
disposition of collateral on the distribution of a debtor’s estate.
The rules governing firm offers apply to all merchants.
A power of sale foreclosure is supervised by a judge.
The legality of an action is always clear.
A person who acquires an instrument knowing that the instrument contains an
unauthorized signature can still be afforded HDC protection.
Conditioning the sale of one product on the purchase of another is an exclusive-dealing
contract.
A partnering agreement reduces the likelihood that a dispute will arise under a contract.
A customer who writes a bad check may be subject to criminal prosecution.