Sable and Rex agree while talking on the phone to form a partnership to deal in
transfers of real property. Their partnership agreement is legally binding
a. only if a copy of the agreement is filed in the appropriate state office.
b. only if the agreement is reduced to writing.
c. only if the parties exchange valid consideration.
d. without more.
Courtney promises to buy illegal digital copies of music and movies from Devin, who
promises to deliver on August 15. These promises are most likely
a. enforceable.
b. valid.
c. void.
d. voidable.
National Grocers, Inc., enters into a contract with Overland Shipping Company for the
delivery of a shipment of fresh produce. If ambiguities appear in the contract, they will
be construed against
a. the party who drafted the contract.
b. the party with the greater bargaining power.
c. the promisor.
d. the promisee.
Lou and Mira want to rescind their contract under which Lou sold an MP3 player to
Mira for $50. To rescind the contract
a. Lou must return the $50 and Mira must return the player.
b. Lou must return the $50 only.
c. Mira must return the player only.
d. the parties can keep the “benefits” of their bargain.
Gladys is a shareholder of Frozen Yogurt, Inc. As a shareholder, Gladys must approve
a. amending the bylaws.
b. declaring a corporate dividend.
c. hiring a chief executive officer.
d. issuing additional shares.
Sari buys a new sport utility vehicle (SUV) from Terrific Cars & Trucks, Inc. The most
important factor in determining whether an express warranty is created is whether
a. Sari expresses to Terrific what she wants warranted.
b. Sari’s desire for the SUV becomes part of her motivation to deal.
c. Terrific expresses to Sari what it expects of its customers.
d. Terrific promise becomes part of the basis of the bargain.
Rona and Savannah do business as Treasure Island Traders. In acting on the firm’s
behalf in a deal with Unlimited Potential, Inc., Rona makes an honest error in
overestimating the profit. To her firm, Rona is
a. liable for breach of the duty of care.
b. liable for breach of the duty of economic sense.
c. liable for breach of the duty of loyalty.
d. not liable.
Ginger wants to file a suit against Fred. For a court to hear the case
a. Fred must agree.
b. the court must have jurisdiction.
c. the parties must have no minimum contact with each other.
d. the parties must own property.
Sullivan and Taylor want to form a corporation to provide catering services. The first
step in the incorporation procedure is to
a. file the articles of incorporation.
b. hold the first organizational meeting.
c. secure a corporate name.
d. select a state in which to incorporate.
Obie accuses Portia, a broker with QT Financial Services, of fraudulently inducing him
to invest in Riske Development Company, whose stock price declines in value. The
reliance that gives rise to liability for fraud requires
a. a subjective, not an objective, statement.
b. misrepresentation of a fact knowing that it is false.
c. puffery.
d. seller’s talk.
Sid induces Ty to enter into a contract for the sale of a warehouse about which Sid
fraudulently misrepresents a number of material facts. Sid also tells Ty that his
commission is 6 percent, but their signed, written contract states “12 percent.” The parol
evidence rule governs
a. contracts that are induced by fraud.
b. contracts that must be in writing to be enforceable.
c. the admissibility in court of oral evidence.
d. the reformation of oral and written statements into one contract.
Fiona owns one share of stock in GR8 Boards Corporation, as evidenced by a stock
certificate. Fiona loses the certificate. Her ownership of the stock is
a. forfeited immediately.
b. forfeited within ten days of a third party’s claim to ownership.
c. forfeited within thirty days if she cannot find the certificate.
d. not affected.
Crosby believes that he and Dakota agreed he would act as her personal sports trainer
for seven workout sessions. In a later dispute, the existence of any contract can be
judged by
a. the parties’ statements at the time of their alleged contract.
b. what the defendant claims was the parties’ intent.
c. what the plaintiff claims was the parties’ intent.
d. what the parties agree they intended.
Desi reaches into Edna’s pocket and takes her money, without her consent and without
her immediate awareness. Unlike robbery, picking pockets does not involve
a. breaking and entering.
b. force or fear.
c. large amounts of money.
d. weapons.
Felicity and Gideon want to form and do business as Home Healthcare Corporation. A
corporation is
a. a natural person.
b. a tangible person.
c. an artificial person.
d. a visible person.
Posing as a representative of Global Games Company, Ferris e-mails Evan, a job
seeker, asking him to forward personal banking information so that if he is hired,
payroll checks can be deposited directly into his account. Evan supplies the data, which
Ferris promptly sells to Dixie. This is
a. no crime.
b. employment fraud.
c. phishing.
d. vishing.
Lon enters into a contract to mine limestone in Mica’s quarry, sell it, and share the
profits on its sale with Mica. If the duties under this contract are discharged like those
under most contracts, the duties will be
a. assigned.
b. breached.
c. performed.
d. rescinded.
Boyd files a suit in a federal district court against Cathy. Cathy loses the suit, appeals to
the U.S. Court of Appeals for the Second Circuit, and loses again. Cathy asks the
United States Supreme Court to hear the case. The Court is
a. not required to hear the case.
b. required to hear the case because Cathy lost in a federal court.
c. required to hear the case because Cathy lost in a lower court.
d. required to hear the case because it is an appeal.
Pixie files a suit against Quiver. Before going to trial, the parties meet, with their
attorneys to represent them, to present their dispute to a third party who is not a judge
but who imposes a resolution on the parties. This is
a. arbitration.
b. mediation.
c. negotiation.
d. not a legitimate form of dispute resolution.
Brad defends against a breach-of-contract suit by College Credit Corporation by
claiming that their deala student loan accruing interest at a certain rate and payable
beginning on a certain datewas unfair because the consideration for their contract was
inadequate.
If, as Brad claims, the consideration in this problem is inadequate, it may indicate a lack
of
a. accord in Brad’s satisfaction with the value of the deal.
b. bargained-for exchange or mutual assent.
c. flexibility on the part of College Credit to accommodate Brad’s needs.
d. “heft,” ‘substance,” or “weight” in the terms of the contract.
Homer is an officer of Integrity Corporation. With respect to binding Integrity to
contracts, Homer’s authority
a. may be actual or apparent.
b. must be actual and apparent.
c. must be actual and not apparent.
d. cannot be actual or apparent.
Gail is a “payday” lender charged with filing false claims in bankruptcy proceedings
against her debtors. The standard of proof to find a defendant who has been charged
with a crime guilty is
a. a preponderance of the evidence.
b. beyond all doubt.
c. beyond a reasonable doubt.
d. clear and convincing evidence.
Kelly, the owner of Llama Farms, a sole proprietorship, wants to obtain additional busi-
ness capital but to maintain control. This can best be accomplished by
a. borrowing funds.
b. bringing in partners.
c. issuing stock.
d. selling the business.
Debit & Credit Accounting Services and Brickwork Construction Company negotiate a
contract. If it has all of the elements necessary for one of the parties to enforce it in
court, it is
a. a valid contract.
b. a voidable contract.
c. a void contract.
d. an unenforceable contract.
Rockstar Software, Inc., develops a new series of performance-related video games.
The games are most likely protected by
a. copyright law.
b. patent law.
c. trademark law.
d. trade secrets law.
Clyde enters Desert Decathlon, an athletic competition in which Clyde has often
competed. Regarding the risk of injury, Clyde assumes the risks
a. attributable to the Decathlon in any way.
b. different from the risks normally associated with the Decathlon.
c. greater than the risks normally associated with the Decathlon.
d. normally associated with the Decathlon.
Melody Instrument Company and Gazebo Band enter into a contract for a sale of
clarinets and other wind instruments. Melody delivers, but Gazebo does not pay.
Melody 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.
Start-Up Corporation substantially complies with all conditions precedent to incorpo-
ration. Start-Up has
a. corporate existence by estoppel.
b. de facto existence.
c. de jure existence.
d. ultra vires existence.
Clark is a shareholder of Bedrest Mattress Company. Clark will be deemed to have a
fiduciary duty to Bedrest and its minority shareholders if he has
a. preferred stock.
b. a right of first refusal.
c. a sufficient number of shares to exercise de facto control.
d. watered stock.
Travis sends Ursula a link to a purported e-birthday card that when clicked on
downloads software to her computer to record her keystrokes and send the data to
Travis. He uses the data to obtain her personal information and access her financial
resources. This is
a. identity theft.
b. no crime.
c. regifting.
d. Windows shopping.
In selling software to Payroll Services Corporation, Ray tells Payroll’s purchasing agent
that the software is “almost human.” This is
a. fraud.
b. duress.
c. puffery.
d. undue influence.
An advertisement”this property for sale”is an offer.
A copy must be exactly the same as the original to infringe a copyright.
A long arm statute permits a court to obtain jurisdiction over an out-of-state defendant.
A sharing of profits from the ownership of property creates a presumption that a
partnership exists.
Constitutional law includes only the U.S. Constitution.
An agent’s authority to act on behalf of a principal must be actual and apparent.
The board of directors normally can remove a corporate officer at any time with or
without cause.
State laws often significantly protect individuals’ privacy rights.
When a member dissociates form a limited liability company, the member’s duty of
loyalty continues.
A corporation is referred to as a domestic corporation by its home state.
According to utilitarianism, an action that affects the majority adversely is morally
wrong.
In a contract for a sale of goods, the usual measure of compensatory damages is the
difference between the contract price and the market price.
Intent to deceive is an element of fraud.
In a general partnership, the partners are personally liable for the debts of the
partnership.
A trade name cannot be protected if it is unusual or fanciful.
A defendant is a person against whom a lawsuit is brought.
A business firm’s profits may suffer if the firm is not a “good corporate citizen.”
A principal may be liable for the tort of an agent committed within the scope of the
agency or employment.