Owen is a federal judge whose judicial decisions are part of case law, which does not
include interpretations of
a. other case law.
b. constitutional provisions.
c. statutes.
d. sound bites in the media.
Fresh Produce, Inc., and Great Grocery Stores dispute the interpretation of an
ambiguous phrase in their contract. In a suit between the parties to construe the
contract, a court may accept evidence of
a. consistent additional terms only.
b. consistent additional terms and contradictory terms only.
c. contradictory terms only.
d. anything extrinsic to the contract.
Dru signs a check “pay to the order of Eppie” drawn on Dru’s account in Bayside Bank.
Greta forges Eppie’s indorsement. Bayside pays the check. Most likely
a. Dru will be liable for the amount.
b. Eppie will have to pay Dru for the amount.
c. Bayside will have to recredit Dru’s account.
d. the Federal Reserve will reimburse all parties for their costs.
Rubin writes a check drawn on his account at Clearwater Bank and payable to the order
of Gwyn. The bank does not pay the check. Rubin is
a. absolved of liability on the check.
b. liable to Gwyn for the amount of the check.
c. liable to the bank for the amount of the check.
d. entitled to payment of the amount of the check from Gwyn.
Sweetwater Caf orders five gallons of transfat-free cooking oil from Restaurant Supply,
Inc. The seller mistakenly ships the wrong oil, which the buyer keeps, despite the
nonconformity. The oil is destroyed in a kitchen fire. The loss is suffered by
a. Sweetwater and Restaurant Supply, but not Sweetwater customers.
b. Sweetwater, Restaurant Supply, and Sweetwater customers.
c. Sweetwater only.
d. Restaurant Supply only.
Fact Pattern 22-1
Cardio, Inc., makes and sells Drawdown, the most prescribed name-brand heart
medication. Emitate Corporation has the potential to make a generic version of the
same drug.
Refer to Fact Pattern 22-1. Cardio pays Emitate not to sell its product. This is
a. a customer restriction.
b. a joint venture.
c. an exclusive-dealing contract.
d. a price-fixing agreement.
Trevor’s operates The Spicy Chocolatier Caf chain of restaurants. “The Spicy
Chocolatier Caf” is a
a. certification mark.
b. collective mark.
c. service mark.
d. trade name.
Shane’s Auto Parts orders twenty tires from Tough Tires, Inc. The truck delivering the
tires to Shane’s is in an accident and ten of the tires are damaged. Shane’s Auto Parts
a. cannot reject the entire shipment.
b. must still pay for all twenty tires at the original contract price.
c. may inspect the tires and accept the shipment with a reduction in price.
d. must reject the entire shipment.
Briana, an employee of Cotillion Bank, is charged with embezzlement, which requires
a. fraudulently appropriating another’s property.
b. obtaining lawful possession of property.
c. physically taking property from its owner.
d. the use of force or fear.
Vehicle Leasing Agency (VLA) and Wander Trucking Company enter into a contract
for a lease of eight cargo vans. VLA delivers eight vans, but they are not cargo-sized.
Wander
a. cannot reject the entire shipment.
b. can reject the entire shipment.
c. must accept the entire shipment.
d. must reject the entire shipment.
William is a surety for Jeannie’s loan from Richard. Richard knows of William’s
existence. When the loan comes due, Jeannie tries to pay Richard, but Richard rejects
the payment. William is
a. released from any obligation on the debt.
b. required to pay the amount of the debt to Richard.
c. required to pay up to half of the amount of the debt to Richard.
d. required to pay the amount of the debt to Jeannie.
The best definition of a precedent is
a. a law developed from custom.
b. a judicial proceeding for the determination of a dispute between parties in which
rights are enforced or protected.
c. a proceeding by one person against another in court.
d. a court decision that furnishes an example or authority for deciding subsequent cases
involving identical or similar facts.
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.
Yokio, Ltd., and Zeno, S.A., transact an international sale of goods. At the request of
these parties, a court in Portugal resolves a dispute between them. A U.S. court will
most likely honor the judgment
a. if it is consistent with U.S. laws and public policy.
b. if it is consistent with Portuguese laws and public policy.
c. if it does not benefit the U.S. to deny it.
d. under no circumstances.
Louise is a director for Icy Ices, Inc. Louise is also a director for Creamy Creams, Inc.
When Icy Ices enters into a contract with Creamy Creams, Louise
a. must resign from one of the boards.
b. must resign from both boards.
c. must make a full disclosure of any conflicts of interest and abstain from voting on the
proposed transaction.
d. need not do anything.
Sweet Stuff is a general partnership that sells candy, cards, and flowers. Sweet Stuff has
ten partners. Jill and Amy each have a 25 percent interest in the firm. The other partners
each have a 10 percent interest. In management matters
a. each partner has one equal vote.
b. each partner votes in proportion to his or her interest.
c. only the two partners with the largest interests have votes.
d. only a partner charged with managing the firm has a vote.
The Arizona Supreme Court rules against Jennifer in a case against Kut Rate Stores,
Inc. Jennifer wants to appeal her case to the United States Supreme Court. She must ask
the Court to issue a writ of
a. appeal.
b. certiorari.
c. jurisdiction.
d. summons.
Transnational Corporation and United Shipping, Inc., agree to a contract that includes
an arbitration clause. If a dispute arises, a court having jurisdiction may
a. monitor any arbitration until it concludes.
b. order an arbitrator to rule in a particular way.
c. order a party to bring the dispute to court.
d. order a party to submit to arbitration.
Dan, a computer programmer, holds a garage sale to sell a lawnmower, some clothes,
some CDs and some old clothes. Will, a lawyer, sells Thelma his collection of seashells.
Philip, a CEO of a successful company, sells George his pet parakeet. Judy, an expert
horse trainer, sells Bob a horse. Which person would be considered a merchant under
the UCC?
a. Dan
b. Will
c. Judy
d. Philip
Solar Power, Inc., files a suit against Thunder Bay Utility Company and seeks to
examine electronic documents in Thunder’s possession. A legitimate reason for this
examination is that the documents contain
a. evidence about the case.
b. private information about Thunder’s operations.
c. public information about energy generation.
d. irrelevant data that can be eliminated from consideration.
Mary writes a check drawn on County Bank for $400 “payable to Bill” on May 1. Mary
dies on May 3. Bill presents the check to County Bank on May 5. County Bank
a. may not pay the check.
b. may pay the check.
c. must consult with Mary’s heirs before paying the check.
d. must read Mary’s will before paying the check.
Don, a U.S. citizen, is the owner of Egrets Unlimited, Inc. Egret’s competitors include
Feathered Friends Company (FFC), which is owned by Greg and Huey. The Bill of
Rights embodies a series of protections for Don against types of interference by
a. FFC and its other competitors only.
b. FFC, Greg, Huey, others, and the government.
c. Greg, Huey, and other private individuals only.
d. the government only.
Real World Sports Corporation (RWSC) is a U.S. firm with a workplace in Switzerland.
Generally, RWSC must abide by U.S. anti-discrimination laws in Switzerland
a. under any circumstances.
b. under no circumstances.
c. unless to do so would contravene the cultural norms of Switzerland.
d. unless to do so would violate the law of Switzerland.
Maria signs an instrument payable to the order of National Loans, Inc., “on or before”
June 15. This instrument is
a. negotiable.
b. nonnegotiable, because the maker can move up the payment date.
c. nonnegotiable, because moving up the payment date is optional.
d. nonnegotiable, because the exact payment date cannot be determined from the face of
the instrument.
Congress enacts a law prohibiting toys made in China from being sold in the United
States. The Hawaii state legislature enacts a law allowing the sale of Chinese-made
toys. Hawaii’s law will most likely be struck down under
a. the commerce clause.
b. the equal protection clause.
c. the due process power.
d. the supremacy clause.
Lyn files a suit against Karl. Karl denies Lyn’s charges and sets forth his own claim that
Lyn breached their contract and owes Karl money for the breach. Karl’s claim is
a. a contrary charge.
b. a counterclaim.
c. a counterpoint.
d. a cross complaint.
Sarah has a checking account at Secure Bank. Sarah buys her roommate Sophie’s two
tickets to a Broadway musical for $200. Sarah writes Sophie a check for the tickets. In
this situation, Secure Bank is the
a. drawee.
b. indorser.
c. payee.
d. drawer.
The idea for “On Your Mark,” a computer game featuring world-class athletic
competition in extreme and unique contests, is protected by
a. copyright law.
b. patent law.
c. trademark law.
d. trade secrets law.
Fact Pattern 14-2
Tom draws a check, on his account in State Bank in New York, payable to Digital
Media, Inc., in San Francisco. Digital deposits the check in its account at First National
Bank.
Refer to Fact Pattern 14-2. Tom’s bank is
a. the cashing bank.
b. the depositary bank.
c. the intermediary bank.
d. the payor bank.
Donna goes through an involuntary bankruptcy proceeding. An involuntary bankruptcy
occurs when
a. a debtor files forms designated for the purpose in a bankruptcy court.
b. a debtor is unable to pay his or her debts as they come due.
c. a debtor’s creditors force the debtor into bankruptcy proceedings.
d. a debtor’s debts exceed the fair market value of his or her assets.
Donald applies for a life insurance policy with Equity Insurance Company through
Fletch, an agent who works for Equity. Donald pays the initial premium. Fletch writes a
binder, which
a. acknowledges the application and promises to consider it.
b. attests to the truth of each statement in the application
c. evidences receipt of the payment of the initial premium.
d. indicates that a policy is pending and states its essential terms.
Procedural due process requires that any government decision to take a person’s
property must be made fairly.
Compensatory damages compensate the injured party for injuries sustained due to loss
of the contract and also punish the party that breached the contract.
Arbitration is always legally binding.
Section 1 of the Sherman Act condemns monopolization.
An oral stop payment order is valid for fourteen days.
Force majeure clauses in international business contracts commonly set forth the major
clauses of the contracts.
Those who knowingly violate the Clean Air Act are exempt from criminal penalties.
If a seller repudiates a contract, the buyer’s damages do not have to be adjusted to
reflect any expenses that were saved as a result of the breach.
Cody signs and returns a letter from Dora, referring to her sale of the Bar-D Ranch and
its price. When Cody attempts to complete the deal, Dora refuses, claiming that they
have no contract. Cody claims they do. What standard determines whether these parties
have a contract?
Under the UCC, a seller’s tender of goods that do not conform in every way to a
contract is still a valid tender.
Under the employment-at-will doctrine, an employer can end an employment
relationship at any time.
National Drilling Company ships its only pump to American Hydraulics Corporation,
the manufacturer, for repair. National hires Overland Transport, Inc., to take the pump
to American Hydraulics and to return it to National as soon as the repair is complete.
National is forced to suspend operations without a pump, but Overland does not know
this. National expects to be without the pump for five days and to lose profits of $5,000.
When the pump is not returned by the end of the fifth day, National rents a pump at a
cost of $100 per day. Overland delays five more days before returning the pump.
National files a suit against Overland, asking for compensatory, consequential, and
punitive damages. Will National recover?
Generally, stock offerings that involve a small dollar amount are exempt from the
registration requirement.
A principal is responsible for all intentional torts committed by an agent.
A mechanic’s lien is possessory.
A price-fixing agreement is an agreement by two or more sellers to boycott a particular
person or firm.
Under the “danger invites rescue” doctrine, a person who tries to rescue another
individual from harm is liable for any injuries to that individual.
If it can be shown that a trespass to land was warranted, a complete defense exists.
For a minor to disaffirm a contract, he or she must present the contract to a court.
Before filing a registration statement, an issuer must offer to sell securities.