Janet and Julie work at ABC Interiors. Janet is a designer who works with clients of
ABC on interior design projects. ABC closely supervises all of its designers, and
dictates their work schedules. Julie works part-time in the evenings cleaning the offices.
Refer to Fact Pattern 32-1A. Janet is ABCs
a. employee, agent, and independent contractor.
b. employee and agent.
c. employee but not agent.
d. independent contractor.
Janet and Julie work at ABC Interiors. Janet is a designer who works with clients of
ABC on interior design projects. ABC closely supervises all of its designers, and
dictates their work schedules. Julie works part-time in the evenings cleaning the offices.
Refer to Fact Pattern 32-1A. Julie is ABCs
a. agent but not employee.
b. employee and agent.
c. employee or independent contractor, depending on whether ABC controls the details
of her physical performance.
d. independent contractor.
Amelia executes a separate written instrument to amend her prior will. This separate
document is
a. a codicil.
b. a holographic will.
c. a living will.
d. a nuncupative will.
Fruits & Vegetables, Inc., employs hundreds of seasonal and permanent workers, both
skilled and unskilled, in seven states. Under federal immigration law, Fruits &
Vegetables can hire illegal immigrants
a. if either the employer or the immigrants file special forms.
b. only if the employer files a special form.
c. only if the immigrants file special forms.
d. under no circumstances.
Fern and Gray want to form a limited partnership to manage two restaurants: Café Latte
and Deli Delite. In most states, a limited partnership will be created when
a. a certificate of limited partnership is filed.
b. a partnership agreement is executed.
c. the business for which the firm is formed actually opens its doors.
d. the partners make their capital contributions.
Lars is considering forms of business organization for his auto repair firm. Like most
states, Larss state requires that to form a limited liability company, he must file with a
central state agency
a. articles of certification.
b. articles of formation.
c. articles of organization.
d. no specific documents.
A Fact Pattern 17-A1
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 Mutuals investments. Neils
performance is most likely
a. a material breach.
b. a minor breach.
c. Mutuals breach.
d. no breach.
Filtration Products, Inc., files a suit against Emmett, its former accountant, alleging
constructive fraud. Emmett may be held liable
a. if Filtration cannot prove actual fraud.
b. if Emmett was grossly negligent in the performance of his duties.
c. only if Emmett acted with fraudulent intent.
d. only if Emmett impersonated someone else who could be liable for fraud.
Verns Roofing Company and Weatherall Tiles, Inc., sign a written contract for a sale of
goods. To be enforceable, this written contract must include
a. a correct title, such as “Purchase Order or “Sales Invoice.
b. a date, such “November 11, 2011 or “11/11/11.
c. a quantity term, such as “50 pallets or “100 cartloads.
d. the parties cell phone numbers or e-mail addresses.
Bret and Cory enter into a contract for the sale of Brets textbook at the end of the fall
semester for which Cory agrees to pay Bret $60. Cory wants to transfer her right to
payment for the book to Del. This transfer
a. is prohibited.
b. may be oral or written.
c. must be implied.
d. must be in writing.
Mix-It Concrete Company has the right to enter Nims land and remove the rock from
Nims quarry. This is
a. a fee simple absolute.
b. a license.
c. an easement.
d. a profit.
Catalyst Corporation is a small, U.S.-based business that makes sophisticated polymers
for export. Under the National Export Initiative, the federal government is
a. erecting barriers to deny free access to foreign markets.
b. boosting lending to small businesses, especially for export purposes.
c. placing less emphasis on exports than other governments.
d. playing a less active role in promoting exports in emerging markets.
Bret and Courtney form Delite Day Care, Inc. Ultimate responsibility for policy
decisions necessary to the management of corporate affairs rests with Delites
a. board of directors.
b. incorporators.
c. officers.
d. shareholders.
London knowingly divulges to BreakingNews.com information about Neandros
e-money payments to Oracle Oil Corporation without the consent of Neandro or Oracle.
London may be in violation of federal law
a. if the e-payments were in electronic storage at the time.
b. if the e-payments were legitimate.
c. if the e-payments are not represented by physical evidence.
d. under none of these circumstances.
When Jeffs car breaks down, he asks Kwik Tow, Inc., to tow it from its location to
Loyal Repair Shop. There is no discussion of a price, and Jeff and Kwik do not sign any
documents. After the tow, Kwik sends Jeff a bill. With respect to Jeffs obligation to pay
the bill, this is
a. an express contract.
b. an implied contract.
c. a quasi contract.
d. no contract.
Metro Credit Corporation lends to borrowers to finance the construction of new houses
and the sale and purchase of existing homes. Despite a decline in the housing market
and other “red flags, Metros directors do not change the lending practices of the firm,
which suffers significant losses. The directors are most likely liable for a breach of
a. no duty, right, or rule
b. the business judgment rule.
c. the duty of loyalty.
d. the right of compensation.
Fact Pattern 43-B1
Jordan and Kacy own and operate Safety Tables, a small-business enterprise that sells
adjustable tables that allow workers to safely work with large, heavy, or oddly shaped
objects. The enterprise does not pay taxes on its profits, but distributes them to Jordan
and Kacy who pay taxes on these amounts as their individual income. Jordan and Kacys
personal liability for Safety Tabless debts and obligations is limited.
Refer to Fact Pattern 43-1. Safety Tables is exempt from legal requirements that relate
to
a. health and environmental permits.
b. zoning and building codes.
c. import/export regulations.
d. none of the choices.
Bartleby owes $5,000 to Countryside Credit Union. As a prejudgment remedy to collect
the debt, Countryside could use
a. attachment.
b. contribution.
c. execution.
d. subrogation.
Lyn is injured when she is struck by debris floating on her property flooded by a breach
of Mining Companys reservoir. The rule that a person who engages in certain activities
may be liable under the doctrine of strict liability for any harm that results was
established in
a. Lyn v. Mining Co.
b. Palsgraf v. Long Island Railroad Co.
c Rylands v. Fletcher.
d. Congress.
Sights Unseen, Inc., (SUI) sells scopes with distinctively designed and made lenses and
mirrors to scientists. Telescopes, Etc. Corporation later begins to sell scopes with
identical set-ups of lenses and mirrors, without SUIs permission, to consumers. This is
most likely
a. copyright infringement.
b. patent infringement.
c. trademark infringement.
d. none of the choices.
Liu and MidgeNeros creditorscontract with Nero for the discharge of Neros liquidated
debts on payment of a lesser sum. This is
a. a composition agreement.
b. a subrogation.
c. a suretyship agreement.
d. in violation of most states laws.
Colorado enacts a statute that bans the distribution of anonymous political leaflets. A
court would likely hold this to be
a. an unconstitutional restriction of speech.
b. constitutional under the First Amendment.
c. justified by the need to protect individual rights.
d. necessary to protect state interests.
Corona Storage Company holds goods for Durango Sales Corporation, which contracts
to sell them to El Dorado Stores, Inc. The goods are to be delivered without being
moved and are represented by a negotiable bill of lading. The risk of loss passes to El
Dorado
a. if Corona refuses to honor the bill of lading.
b. if Durango gives the bill of lading to Corona.
c. if the goods are lost due to an “act of God.
d. when El Dorado receives the bill of lading.
Fact Pattern 3-A1
Mac and Nan engage in a business transaction from which a dispute arises. Mac
initiates a lawsuit against Nan by filing a complaint.
The sheriff serves Nan with a summons. If Nan chooses to ignore it
a. Mac must file an amended complaint.
b. Mac will have a judgment entered in his favor.
c. Nan must be served with a second summons.
d. Nan will have a judgment entered in her favor.
Contracting parties cannot opt out of the terms of the UETA.
Fact Pattern 12-A1
Jesse 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 Jesse claims, the consideration in this problem is inadequate, it may indicate a
lack of
a. accord in Jesses satisfaction with the value of the deal.
b. bargained-for exchange or mutual assent.
c. flexibility on the part of College Credit to accommodate Jesses needs.
d. “heft, ‘substance, or “weight in the terms of the contract.
Jay holds himself out as possessing special accounting skills. As an agent, he must
exercise the degree of skill or care expected of
a. a person having those skills.
b. an average, unskilled person.
c. a reasonable person.
d. the principal.
During a trial between Laramie and Mikayla over a sale of allegedly diseased livestock,
Mikaylas attorney asks questions of the plaintiffs witness Nilson. This is
a. a cross-examination.
b. a deposition.
c. a direct examination.
d. an interrogatory.
Iggy uses his computer to break into Hye Technology Companys computer. Iggy is
a. a hacker.
b. a bot.
c. a botnet.
d. a worm.
Bee Hive Honey, LLCs members include Chad. For purposes of suing and being sued,
Bee Hive Honey is
a. an aggregate of Chad and the other members.
b. a natural person in the members “family.
c. a legal entity apart from the owners.
d. a non-participating third party.
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,
Celias typed name qualifies as
a. her ‘signature.
b. a cybernotary.
c. a partnering agreement.
d. nothing.
Global Properties, Inc. (GPI), a U.S. firm, owns property in Hong Kong. The
government in Hong Kong takes GPIs property without paying for it. A U.S. court will
probably not examine the validity of this act committed by China within its own
territory, under
a. the act of state doctrine.
b. the doctrine of sovereign immunity.
c. the principle of comity.
d. the World Trade Organization .
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.
Fact Pattern 42-1B
Sid, a director of Tech Software Company, learns that a Tech engineer has developed
“Ur Call, a new, exciting video game. Sid buys Tech stock and tells his friend Velma,
who also buys Tech stock. When the new game is released three weeks later, Sid and
Velma sell their stock for a big profit.
Refer to Fact Pattern 42-1B. Under SEC Rule l0b-5, Sid would not be liable if he had
waited to buy Tech stock until
a. after Sid told Velma of the new game.
b. after Velma bought Tech stock.
c. after the public release of the game.
d. just before the game was released.
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.
Naomi and Ogden are shareholders of MediCare Residences, Inc. As shareholders, they
must approve
a. conducting a merger.
b. deciding to pursue new business opportunities.
c. terminating a managerial employee.
d. negotiating a contract between management and labor.
Investment Properties, Inc., hires Justus Construction Company to renovate the interior
of Investments office building. Justus submits plans that Investment approves. Justus
completes the major reconstruction, paints the interior, and buys the fixtures and
furnishings. Investment rejects some of the furnishings because they do not match the
plans, and subsequently refuses to allow Justus to finish the work or to collect payment.
Could Justus sue successfully for payment for the entire contract?
Generally, your trademark must not be the same as anothers mark or so similar that
confusion results.
A bearer instrument can be converted into an order instrument through indorsement.
In some states, the courts will treat a corporation as a legal corporation despite a defect
in its formation.
An insurance company may cancel an insureds policy if the insured appears as a
witness in a case against the company.
An accountant normally will be held liable to the client for a mistake in judgment.
A contract that has not been fully performed by the end of a year from the day of its
making must be rewritten to continue in force.
Commercial Credit Company has in its possession an instrument dated May 1, 2009.
The instrument is payable to the order of Alpha Company “on June 1, 2009, for $5,000.
In the upper left corner is an address for Beta Corporation10 Corporate Park Avenue,
Chicago, Illinoisand in the lower right corner is the signature of “Delta, Inc., By Eve,
President. In the lower left corner is stamped “ACCEPTED: Beta Corporation by Frank,
President, May 5, 2009. On the back is the signature of “Alpha Company by Gail,
President. Who, if anyone, is primarily liable on this instrument on May 1? On May 5?
Who, if anyone, is secondarily liable on this instrument?
Strict liability is imposed for reasons other than fault.
Plain language laws regulate some types of contracts to require “legalese.
A condition that must be fulfilled before a partys performance can be required is a
concurrent condition.
A customer has a right to stop payment on a check that has been certified.
To constitute an express warranty, a representation must be in writing.
If an investigation reveals a suspected violation of an administrative rule, the agency
can not issue a formal complaint against the suspected violator.
Food products are not required to bear labels detailing the nutritional content.
All transactions involving the delivery of property from one person to another create a
bailment.
Once executed, a will cannot be revoked.
Cato promises Isabella $40,000 if she graduates from State College. Isabella enrolls in
State, attends full-time for four years, and graduates. When she asks Cato for $40,000,
he says, “I dont remember promising you $40,000. But if there was a promise, its not
enforceable, because we didnt bargain for it. And even if there was a promise that
would otherwise be enforceable, I revoke it now. Can Isabella enforce Catos “promise?
Why or why not?