Summit Supply Company contracts for a sale of medical equipment to Valley
Immediate Care Corporation. Summit can enforce its right to payment
a. only after Valley has actually inspected the goods.
b. only after Valley has had an opportunity to inspect the goods.
c. only before Valley has inspected the goods.
d. whether or not Valley has had the chance to inspect the goods.
Roy and Sheila are parties to a contract. They subsequently agree that Tony should take
Roy’s place and assume all of his rights and duties under the contract. This is
a. a novation.
b. an accord and satisfaction.
c. an assignment.
d. a modification.
Clay buys an MP3 player for $200 and a pair of stereo speakers for $600 from a
Discount City store, and downloads $270 worth of digital music from eMusic.com. To
be enforceable, the contract that must be in writing is the purchase of
a. the digital music, the MP3 player, and the speakers.
b. the MP3 player and the speakers only.
c. the MP3 player only.
d. the speakers only.
Office Application Corporation (OAC) sends an e-record to Precision Design, Inc.
Under the UETA, the record will be considered received when
a. it enters Precision’s processing system in a readable form.
b. a Precision representative is aware of its receipt.
c. it is midway between the parties’ processing systems.
d. passes out of OAC’s control even if it is not in a readable form.
Holiday Sales Company and Global Distributors, Inc., enter into a contract for the
delivery of imported specialty goods. Until the goods are delivered and paid for, these
parties have
a. an executory contract.
b. no contract.
c. a quasi contract.
d. an informal contract.
Niki owns O.K. Oil Corporation. Niki uses O.K.’s funds to pay her personal expenses,
creates Pure Fuel Corporation to engage in the same business as O.K., transfers O.K.’s
assets to Pure Fuel, and petitions O.K. into bankruptcy. This most likely warrants
a. a bonus to Niki for financial maneuvers.
b. a discharge for O.K. in bankruptcy.
c. a pierce of O.K.’s corporate veil.
d. a review of Pure Fuel’s articles of incorporation.
Elmo advertises a reward for the return of his lost dog. Floyd, who does not know of the
reward, finds and returns the dog. Floyd cannot recover the reward because he
a. did not confer a benefit on Elmo by returning the dog.
b. did not know of the reward when he found and returned the dog.
c. does not need the money.
d. returned the dog.
Windshield Repair Shop (WRS) promises to pay Vincent $1,000 a week to work for
WRS. Vincent accepts and quits his job with Ultra Glass. WRS fails to provide a job for
Vincent. Vincent has a cause of action based on
a. an illusory promise.
b. a release.
c. past consideration.
d. promissory estoppel.
Grover contracts to sell two tracts of land to Hank. Both parties believe that the two
tracts are adjacent, but in fact they are not. Grover is still willing to sell the land, but
under these circumstances the deal would adversely affect Hank.
The parties’ belief about the adjacency of the property is
a. a bilateral mistake.
b. a fraudulent misrepresentation.
c. a unilateral mistake.
d. unconscionable.
MaxiMart, Inc., is a discount retailer. MaxiMart’s customer service employees are on
strike. Sixty of the workers block the entrances to one of MaxiMart’s stores. To get
them away from the doors, MaxiMart should seek
a. a clause of free exercise.
b. a decree of specific performance.
c. an injunction.
d. an order of due process.
Reusable Energy Corporation regularly expresses opinions on political issues. Under
the First Amendment, corporate political speech is
a. discouraged.
b. forbidden.
c. protected.
d. required.
Matchless Clothing Company buys clothing assembled by Nantra, Ltd., a foreign firm
that employs young children for long hours and low pay. Nantra’s nation does not
enforce its child labor laws. Human International Politics (HIP), a political activist
organization, discovers Matchless’s connection to Nantra and plans to reveal this
information. Before HIP does so, however, Matchless publicly releases the information
itself and announces that it is severing its relationship with Nantra. Matchless publicizes
its action in its advertising, and the company’s sales and profits increase, apparently as a
direct result. Has Matchless acted unethically in any way? From an ethical perspective,
is Matchless’s conduct in this situation more important than whatever its motive might
be?
Federico enters Gunther’s property to read an electric meter. Gunther charges Federico
with trespass to land. Federico has
a. a complete defense.
b. a partial defense.
c. a possible defense.
d. no defense.
Jen is a third party beneficiary under a contract between Kyla and Leo. Kyla and Leo
can modify or rescind their contract without Jen’s consent
a. at any time.
b. at no time.
c. only after Jen’s rights have vested.
d. only before Jen’s rights have vested.
Location! Realty LLC is a limited liability company (LLC). Like other LLCs, for
federal jurisdictional purposes, Location! Realty is most likely a citizen of
a. all states.
b. every state in which its members are citizens.
c. no state.
d. only the state in which it was formed.
Expert Pavers, Inc., contracts with Fabricated Building Corporation to repave
Fabricated’s parking lot for which Fabricated agrees to pay. The elements of this, and
any other, contract include
a. capability.
b. consideration.
c. formation.
d. practicality.
B2B, LLC, is a limited liability company. Among its members, a dispute arises that the
operating agreement does not cover. The dispute is governed by
a. the applicable state LLC statute.
b. the federal Uniform LLC Law.
c. the principles of partnership law.
d. the state corporation statute.
Medical Centre enters into a contract with Local Motion Fitness Club for discounted
memberships for the Centre’s employees. If the Club breaches the contract and the
Centre enters into a contract with KO Sports for the same service at a lower price, the
Centre might be awarded nominal damages to
a. establish, as a matter of principle, that the Club acted wrongfully.
b. provide the Centre with funds for a foreseeable loss beyond the contract.
c. provide the Centre with funds for its loss of the bargain.
d. punish the Club and set an example to deter others from similar acts.
Symphony, Inc., a U.S. jewelry designer and maker, files a suit against Kawa, Ltd., a
Japanese jewelry maker, for the infringement of intellectual property rights under
Japan’s national laws. Under the TRIPS agreement, Symphony is entitled to receive
a. better treatment than Kawa.
b. the same treatment as Kawa.
c. worse treatment than Kawa.
d. nothing.
Clay offers to pay Dorianne $50 for a golf lesson for Estee. They agree to meet the day
after tomorrow to exchange the cash for the lesson. These parties have
a. a bilateral contract.
b. a trilateral contract.
c. a unilateral contract.
d. no contract.
Picabo drives a truck as an employee for Quik Delivery, Inc. Picabo would most likely
be considered acting outside the scope of her employment if she
a. crashed into a car at the airport while off duty.
b. hit a pedestrian in a parking lot during a “working” lunch.
c. ran over an attendant at a gas station while refueling the truck.
d. smashed into a store-front while intoxicated on-duty.
Lewey’s Bicycle Store contracts to buy fifty bicycles from Mountain Bikes, Inc. Unless
the contract states otherwise, this is
a. a bill of lading.
b. a destination contract.
c. a shipment contract.
d. a warehouse receipt.
Nate tells Opal, “I might sell the skis that I bought last fall since I haven”t used them
and the skiing season is almost over.” This is
a. an acceptance of an offer.
b. an invitation to accept an offer.
c. an offer.
d. a statement of future intent.
Elegant Carpets, Inc., and Fantastic Floors Stores enter into a contract for a sale of
carpeting. Under a shipment contract, the seller must
a. allow the buyer to reject the goods for any reason.
b. deliver the goods to a particular destination.
c. inspect the goods before shipping them.
d. place the goods into the hands of a carrier.
Ross e-mails Super Surfboard Company’s marketing campaign to Summer Sports
Corporation, Super’s competitor, without its permission. This is
a. a sneaky but legal method to shock a business rival.
b. a secretive but lawful way to exact revenge on a supervisor.
c. a simple, legitimate attempt to create a job opportunity.
d. a theft of trade secrets.
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.
In relation to Edie’s solicitation of investors in a nonexistent business, she is charged
with “mail fraud.” This requires, among other things,
a. claiming that an item is “in the mail” when it is not.
b. deceiving postal authorities as to the content of an item of mail.
c. depositing items in the postal system without proper postage.
d. mailing or causing someone else to mail a writing.
The police obtain a search warrant and search Errol’s apartment. After yelling
obscenities at the officers, Errol confesses to a crime and implicates his friends. The
Constitution protects against
a. obscene speech.
b. implication of others.
c. unreasonable searches.
d. none of the choices.
Housemate, Inc., makes and sells a variety of household products. With a fair amount of
certainty, Housemate’s decision makers can predict whether a given business action
would be legal in
a. all situations.
b. many situations.
c. no situations.
d. practically no situations.
Ivan signs Jeb’s name, without his authorization, to the back of a check. This is
a. no crime.
b. forgery.
c. larceny.
d. robbery.
Scot enters into a contract with Tiffany that later proves voidable at Tiffany’s option. If
she elects to avoid any duty to perform under the contract
a. both parties are released from it.
b. neither party is released from it.
c. only Scot is released from it.
d. only Tiffany is released from it.
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. board of directors.
b. incorporators.
c. officers.
d. shareholders.
Dependable Appliances, Inc., and Elain enter into a contract for a sale of kitchen
appliances. Dependable, a merchant who deals in goods of the kind sold, notes that its
goods come with an implied warranty of merchantability. Under the UCC, this means
that the goods are reasonably
a. fit for the buyer’s particular purpose.
b. fit for the ordinary purpose for which such goods are used.
c. suitable for resale at an acceptable price.
d. the best quality that money can buy.
In negotiations with Diamond Refining Company, Coastal Oil, Inc., insists that their
contract be drafted according to certain plain language laws. These laws concern the
phrasing of
a. contracts that include unfamiliar legal terms.
b. ads that contain vague guaranties.
c. instruction manuals that are difficult to follow.
d. epithets that are too colorful.
An agency relationship may be terminated by an act of the parties but not by operation
of law.
Normally, all employees who deal with third parties are deemed to be agents.
Only a foreseeable intervening event can break the connection between a wrongful act
and an injury to another.
How judges apply the law to specific disputes may depend in part on their personal
philosophical views.
A guardian can enter into legally binding contracts on behalf of a mentally incompetent
person.
Some constitutional protections apply to business entities.
Owen plans to open Owen’s Pets Store, a pet supplies outlet, and to hire Quinn and
Ruth. Owen will invest only his own money. He does not expect to make any profit for
at least two years and to make almost no profit for the first three years, but he hopes to
expand eventually. Which form of business organization would be most appropriate?
A consumer lease is exempted from coverage under the UCC.
The First Amendment does not protect corporate political speech.
According to utilitarianism, it does not matter how many people suffer a negative effect
from an act.
An ethics program can clarify what a company considers to be unacceptable conduct.
The doctrine of commercial impracticability only extends to problems that could have
been foreseen.
An offeree’s power of acceptance is terminated when the offeror dies unless the offer is
irrevocable.
The right to due process of law applies to corporations.
In determining whether a copyrighted work is infringed under the “fair use” doctrine,
one factor is the effect of the use on the market for the work.
An invitation to submit bids”how much would you charge to do this work?”is an offer.