InTown Delivery Service promises to deliver a certain couch to Kurt, who promises to
pay for the service. If InTown does not perform, the firm may be required to
a. do nothing.
b. make another promise.
c. pay damages.
b. perform a different service.
Kailin owns a farm near Manhattan, Kansas, with a farmhouse, barn, and other
structures permanently attached. Kailin grows soybeans on the property. A pond lies
within the boundaries. Land includes
a. the pond, the soil, and the structures.
b. the pond and the soil only.
c. the soil only.
d. the structures and the soil only.
Gert, an accountant, contracts to conduct an audit for Hailey. In performing the audit,
Gert fails to detect certain misconduct. Gert is most likely
a. liable if a normal audit would have revealed the misconduct.
b. liable if Gert issues a specifically qualified opinion.
c. not liable if Gert generally disclaims any liability.
d. not liable if the misconduct was due to Haileys negligence.
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 buyers 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.
Natalie is a shareholder of Off-Road Vehicle Company. As a shareholder, Natalie does
not have
a. a right to compensation.
b. dividend rights.
c. inspection rights.
d. preemptive rights.
Fun Toyz Corporation makes skateboards, which it sells to consumers, including Holly
and Ira. Due to a defect, Holly is injured while using her new board. Iras board has the
same defect, but he is not injured. In a product liability suit based on strict product
liability, Fun Toyz may be liable to
a. Holly and Ira.
b. Holly only.
c. Ira only.
d. no one.
Shingle & Tile Roofing Contractor, LLC, obtains an insurance policy against liability
for injuries or losses sustained by employees during the course of their employment.
The policy covers claims not covered by workers compensation insurance. This is
a. casualty insurance.
b. fidelity or guaranty insurance.
c. key-person life insurance.
d. employers liability insurance.
Ramblin Country Stables contracts to buy 1,000 horseshoes from Blacksmith, Inc., for
$1 per shoe. When the market price decreases to 50 cents per shoe, Ramblin refuses to
go through with the deal. Blacksmith can recover
a. $1,500.
b. $1,000.
c. $500.
d. $0.
Socrates Software Corporation wants to hire Tomas, a noncitizen. To hire Tomas,
Socrates must petition
a. Citizenship and Immigration Services.
b. the U.S. Department of State.
c. Immigration and Customs Enforcement.
d. the National Labor Relations Board.
The payment of Neros debt to Olly is guaranteed by Neros personal property. Nero is
located in Pennsylvania. Olly communicates to the appropriate state official a security
agreement that uses only Quality Engineering, the trade name of Neros business. To
perfect Ollys interest, this is
a. irrelevant.
b. not sufficient.
c. sufficient if Quality Engineering is a sole proprietorship.
d. sufficient if the trade name is spelled correctly or misspelled slightly.
Chiang Ltd., a Chinese firm, imports its goods into the United States and offers those
goods for sale at “less than fair value. This is
a. confiscation.
b. defalcation.
c. dumping.
d. expropriation.
Yvon asks Zac, “Do you want to buy one of my fishing rods? This is
a. a valid offer.
b. not a valid offer because the terms are not definite.
c. not a valid offer because Yvon did not state an intent.
d. not a valid offer because Zack did not respond.
Oakley posts a defamatory remark about Pierre in “Roominate, an online social network
maintained by SocNet, Inc., an Internet service provider. Most likely to be held liable
for the remark is
a. Oakley.
b. Pierre.
c. Roominate.
d. SocNet.
Craig decides to sell his Double-D Ranch in an auction “without reserve. If Craig
changes his mind at the auction, he can withdraw his property
a. only before the auctioneer announces that the ranch is sold.
b. only before the auctioneer delivers the deed to the buyer.
c. under no circumstances.
d. within thirty days after the auction.
Frida is an employee of Green Recycled Products Company. A state statute protects
Frida from Greens retaliation if Frida reports to state officials, or others, that Green is
involved in unsafe or illegal activity. With respect to the employment-at-will doctrine,
this is
a. an example of the doctrine.
b. an exception based on contract theory.
c. an exception based on public policy.
d. an exception based on tort theory.
On behalf of Bay Oyster Company, Celia types her name at the bottom of an e-mail
purchase order and submits the order to Deepwater Parts Company. Under the UETA,
qualifying Celias name as her ‘signature is
a. attribution.
b. cybernotarization.
c. acceptance.
d. agreement.
Over the course of a year, Real Deal Corporation sells appliances to customers to whom
it extends credit. Real Deal orders the appliances from Superior Appliance Companys
warehouse, from which the items are shipped via common carrier to Real Deals
customers. Article 2 of the UCC governs
a. all of the parties sales of the goods.
b. Real Deals extension of credit.
c. Superiors storage of the goods.
d. the common carriers delivery of the goods.
Rodeo, S.A., which is based in Spain, enters into a contract for the sale of seven
hydraulic lifts to Tonnage Shipping Company, which is based in the United States. This
contract is governed by
a. Spanish law.
b. the provisions in the laws of both countries that are similar.
c. Article 2 of the UCC.
d. the United Nations Convention on Contracts for the International Sale of Goods.
Dion, an accountant for Entertainment Sports, Inc., attempts to apply a duty-based
approach to ethical reasoning in conflicts that occur on the job. This approach is based
on the idea that a person must
a. achieve the greatest good for the most people.
b. avoid unethical behavior regardless of the consequences.
c. conform to societys ethical standards.
d. place his or her employers interest first.
Kip, a representative for Lite-Weight Shipping Company, delivers a bill of lading to
Meg, the owner of Capacity Storage Warehouse. A bill of lading is
a. an invoice for payment for loading and carting.
b. an order to ship goods by carrier to a certain destination.
c. a receipt for goods signed by a carrier.
d. a receipt issued by a warehouser for goods in a warehouse.
Lorna borrows $175,000 from Mountainside Credit Union to buy a home. Among the
terms that must be disclosed under federal law is the annual percentage rate. This is
a. the actual cost of the loan on a yearly basis.
b. the average prime offer rate.
c. the interest rate at which the loan is made.
d. the loan principal.
Michelle gives out a business card with an e-mail address on it. According to the
comments that accompany the UETA, it may be reasonable to infer that Michelle has
consented to
a. transact business electronically.
b. submit to the jurisdiction of any selected forum.
c. accept and respond to any correspondence sent to that address.
d. nothing.
Demi promises to buy a house from Caleb, who promises to vacate the property on June
1. If these promises are in writing, they are most likely
a. enforceable.
b. unenforceable.
c. void.
d. voidable.
George has a badly infected right foot. Herb, Georges physician, prescribes amputation.
George agrees. During the operation, Herb amputates the left foot. In Georges suit
against Herb, Georges best theory for recovery is
a. assumption of risk.
b. negligence per se.
c. res ipsa loquitur.
d. strict liability.
Text Publishers, Inc., contracts for a sale of textbooks to University Bookstores, Inc.
Vital Shipping Corporation, the carrier, transports the books to Warehouse Storage
Company. Texts right to stop delivery is lost when Universitys rights to the goods are
acknowledged by
a. the appropriate government agency only.
b. Vital Shipping only.
c. Vital Shipping or Warehouse Storage.
d. Warehouse Storage only.
Fact Pattern 19-2
Marys home is in a state that has a $30,000 homestead exemption. Mary defaults on a
$60,000 debt that she owes to Nina. Marys home is sold at auction for $80,000.
Refer to Fact Pattern 19-2. If Nina recovers less than she is owed, she can realize the
difference from
a. any property that Mary owns.
b. only exempt property that Mary owns.
c. only nonexempt property that Mary owns.
d. property that any other member of Marys family owns.
Wallys Warehouse offers to sell a certain used forklift to Value Lumber Outlet, but it is
stolen before Value accepts. Most likely, Wallys must obtain
a. a forklift for Value if Wallys insurance covers the loss.
b. a forklift for Value if it still wants one.
c. nothing for Value because that would extend the time of the offer.
d. nothing for Value because the theft terminated the offer.
Ideal Gadgets, Inc., and Jolly Outlets Corporation enter into a contract for a sale of
kitchenware. The contract requires Ideal to deliver the goods to Ladle Carrier Company
for transport to Jollys warehouse in Metro City. Risk of loss passes to Jolly when
a. Ideal delivers the goods to Ladle.
b. Ideal identifies the goods to the contract.
c. Ladle transports the goods to Jollys warehouse.
d. the goods arrive in Metro City.
Venerable Company stores office furniture with Warehouse Storage, Inc. (WSI), under a
contract that limits the warehouse companys liability for lost or damaged property to
$500. Venerable declines the option to pay a higher storage rate for an increase in the
liability limit. The furniture is lost through no fault of WSI. The loss is most likely
suffered by
a. Venerable and WSI.
b. Venerable only.
c. WSI only.
d. neither Venerable nor WSI.
China Bank is a foreign entitya firm owned and operated by investors in a foreign
country. With respect to an LLC in the United States, China Bank can
a. act as a creditor, but cannot otherwise invest or participate.
b. become a member.
c. not become a member, but can participate in its operations.
d. not become a member or otherwise participate in its operations.
Quincy draws a check payable to “Replay Stadium to buy two season tickets to the next
years State College football games. This instrument is
a. a bearer instrument.
b. an order instrument.
c. valid but nonnegotiable.
d. void.
Hi-Five Aero Corporation is required to register its securities under Section 12 of the
Securities Exchange Act of 1934. Section 14(a) of the act regulates
a. the declaration of dividends by Hi-Fives board of directors.
b. the later re-registration of Hi-Fives securities.
c. the short-swing activities of Hi-Fives insiders.
d. the solicitation of proxies from Hi-Fives shareholders.
Quinn enters into a series of agreements with Reba involving a sale of a Suite Dreams
Motel, including the land, building, furnishings, shares of stock in Suite Dreams
Company, and a contract with Trudy to create an ad campaign. Reba suspects that
Quinn may be misrepresenting the facts. The UCC Statute of Frauds governs
a. the sale of any of the property evidenced by a writing.
b. the entire deal, including the marketers services.
c. the sale of the furnishings priced at $500 or more.
d. the sale of the land and the building.
Lava Excavators, Inc., needs a drill to continue its operations and orders one for $3,000
from Mining Supplies Company. Lava tells Mining that it must receive the drill by
Tuesday or it will lose $10,000. Mining ships the drill late. Lava can recover
a. $13,000.
b. $10,000.
c. $3,000.
d. $0.
Inadvertently, Morris leaves his backpack at NuWay Launderers when he stops to pick
up his clothes. The backpack is
a. abandoned property.
b. gifted property.
c. lost property.
d. mislaid property.
The injury suffered by a nonbreaching party due to the breach of a contract may be
remedied by payment of compensatory damages.
Forcing someone to enter into a contract through fear created by threats is undue
influence.
Until the time for performance under a contract expires, the seller has a right to cure.
Dieters will provides for a distribution of his assets on his death. Who will “distribute
Dieters property, and what are the steps involved?
A party seeking to recover in quasi contract must show that he or she has been unjustly
enriched.
A seller must use words such as “warrant to make an express warranty.
The content of a family-fisherman bankruptcy plan is basically the same as that of a
repayment plan.
An unpaid seller can bring an action to recover the purchase price, on the buyers breach
of a contract, only if the goods are first disposed of.
If a homeowner defaults, the lender has the right to foreclose on the mortgaged
property.
In most bailments, the bailor must notify the bailee of hidden defects that the bailor
knows or could have discovered with reasonable diligence.
Stored-value cards are a form of digital cash.
Equitable remedies include injunctions.
To qualify as a commercially reasonable sale, a secured partys sale of collateral, after
default and repossession, must be public.
Expression of all kinds is subject to reasonable restrictions.
Any judgment is enforceable.
Under a destination contract, if a lessor is a merchant, the risk of loss passes to a lessee
when the lessee takes physical possession of the goods.
A conditional promise to pay is not a negotiable instrument.
The UCC has replaced the common law concept of title in part with the concept of
identification.