The River City Council, the Santa Clara County Board, the Texas state legislature, and
the U.S. Congress enact laws. These laws constitute
a. administrative law.
b. case law.
c. stare decisis.
d. statutory law.
Glen is an agent for Hi-Flite, Inc. On Hi-Flite’s behalf and at its request, Glen pays Ian
for certain plane maintenance and repair services. Glen’s right to obtain the amount of
those payments from Hi-Flite arises under the principal’s duty of
a. avoidance.
b. cooperation.
c. indemnification.
d. reimbursement.
Dex and Carmen are in an auto accident. Dex offers Carmen $2,000 if she promises not
to pursue her potential legal claim against Dex. Carmen agrees. Later, Carmen
discovers that it will cost $1,500 to repair her car and $4,000 to cover the medical
expenses for a latent injury.
In Carmen’s suit against Dex to recover her repair and medical expenses, Carmen will
most likely recover
a. half the amount to pay the costs over what Dex already paid Carmen.
b. nothing.
c. the estimated amount to pay those costs and any other liability.
d. the exact amount to pay those costs and no more.
Rikki and Sid enter into a sales contract. With respect to the specific contractual
provisions set out in the UCC, Rikki and Sid may
a. agree to different terms only to a reasonable extent.
b. agree to different terms unless they “get caught.”
c. agree to whatever terms they wish.
d. not agree to different terms.
Macro Marketing, Inc., and National Food Corporation (NFC) discuss the terms of a
contract. Macro faxes NFC a memo on Macro’s letterhead that summarizes the items on
which they agree. NFC begins to perform, but Macro refuses to pay. Between Macro
and NFC, the memo is
a. an oral contract.
b. a pre-contract.
c. a written contract.
d. no contract.
Kato and Leilani dispute the quality of a collection of sports memorabilia sold over the
Internet. They agree to resolve this dispute in 2BRNot2B.com, an online forum. Like
most online forums, 2BRNot2B.com applies
a. general, universal legal principles.
b. the provisions of the Federal Arbitration Act.
c. jurisprudence developed by the United Nations.
d. the law of California (or another specific U.S. jurisdiction) .
Pier shops in a Rowdy Ranch & Farm Store. Enticed by a display, Pier takes an item to
examine it and, when she is done, places it on the floor. Tanner, a consumer enticed by
the same display, does not see the item on the floor, trips over it, falls, and suffers an
injury. With respect to the danger, Rowdy had
a. a duty to advise its patrons that they assume all such risks.
b. a duty to discover and remove the hazard.
c. a duty to carry insurance to cover such risks.
d. no duty.
Tilly, the chief financial officer for USA Products Corporation, attempts to apply
Christian precepts in making ethical decisions and in doing business. In applying
duty-based ethical standards that are derived from a religious source, Tilly would
consider the motive behind an act to be
a. irrelevant.
b. the least important consideration.
c. the most important consideration.
d. the only consideration.
Diners Café 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. Diners and Restaurant Supply, but not Diners’s customers.
b. Diners, Restaurant Supply, and Diners’s customers.
c. Diners only.
d. Restaurant Supply only.
Deepwater Mining Corporation offers to sell East China Refining, Inc., a certain
quantity of unrefined oil. If East China sends an acceptance via Deepwater’s authorized
mode of communication, it will be effective when it is
a. in transit.
b. received.
c. sent.
d. written.
Java Cafes, Inc., and Kaffe Import Corporation dispute a term in their contract.If Java
and Kaffe have a long-standing business relationship that they would like to continue, a
preferred method of settling their dispute may be mediation because
a. the case will be heard by a mini-jury.
b. the dispute will eventually go to trial.
c. the process is not adversarial.
d. the resolution of the dispute will be decided an expert.
Swinborn sells “Tyger” steroids over the Internet. He is arrested and charged with the
sale of a controlled substance. This is cyber crime, which is
a. a crime in which the letter “y” is used in the misspelling of a word.
b. a crime that occurs in the virtual community of the Internet.
c. a crime that is less real than the same crime in the physical world.
d. no crime.
Intoxicated but fully aware of the consequences, Uri agrees to a two-year cell-phone
service contract with Wander Talk, Inc., at more than the average market price. This
contract is
a. enforceable.
b. not enforceable because contracting parties can change their minds.
c. not enforceable because the contract clearly favors Wander Talk.
d. not enforceable because Uri was intoxicated when he agreed to it.
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.
Quick Transport, Inc., offers to sell a truckload of palettes to Rapid Delivery Company.
Before accepting the offer, Rapid learns that the palettes have been sold to Speedy
Trucking Corporation. Quick is
a. liable to Rapid for breach of contract.
b. liable to Speedy for breach of contract.
c. not liable, because the sale revoked the offer to Rapid.
d. not liable, if Quick offers substitute goods to Rapid.
Sincere Forms, Inc., uses, in its ads, a trademark that is similar, but not identical, to the
famous, registered mark of Desired Objects, Inc. Sincere’s unauthorized use of the mark
constitutes trademark dilution provided
a. consumers are confused.
b. Sincere and Desired are competitors.
c. Sincere’s use is intentional.
d. Sincere’s use lessens the value of Desired’s mark.
On behalf of the jazz group Synco-Passion, their manager Raul agrees to a performance
in the Quay Club on May 1. Portia, acting for Quay Club, sends a written copy of the
agreement to Raul to be signed. Typically, businesspersons put their contracts in writing
to
a. ensure proof of the contracts’ existence.
b. create substance from form.
c. obtain a check or other negotiable instrument.
d. practice their “plain meaning.”
On behalf of the rock group Uno, their manager Thalia agrees to a performance in
Seaside Amphitheatre on July 4. Rex, acting for Seaside, sends a written copy of the
agreement to Thalia to be signed. If Thalia signs the copy, the parties will have
a. an express contract.
b. an implied contract.
c. a quasi contract.
d. no contract.
Following negotiations with Merchants Storage Company, Lonny enters into an
informal contract to clean the loading dock. This means that the parties’ contract
a. requires no special form.
b. must be drafted “in form” to be valid.
c. is indefinite and imprecise.
d. does not exist.
Rita is appointed as an agent for Superior Sales, Inc. The agency agreement is silent as
to the level of sales that Rita is expected to achieve. She must
a. achieve nothing because the agreement says nothing on the issue.
b. attain the level that Rita achieved with her previous employer.
c. maintain the level Superior attained before Rita became an agent.
d. use reasonable diligence and skill in selling.
Nick and Roberta contract for the sale of computer equipment, reserving the right to al-
ter a particular provision in the contract. The rights of any third party beneficiary of that
contract are
a. not affected by the reservation.
b. limited to the extent of the reservation.
c. limited only if the beneficiary agrees to the reservation.
d. none of the choices.
CPA Accounting, LLC, is a limited liability company. If the law in CPA’s state is like
the law in most states, unless the members have agreed otherwise, participants in the
firm’s management will be considered to include
a. all members.
b. no member.
c. one member.
d. two members, including at least one general partner.
A court adjudicates Huck mentally incompetent and appoints Inez to be his guardian.
Later, without Inez’s knowledge, Huck signs a contract to sell his farm to Kyle for its
real market value. The contract is
a. enforceable if Huck comprehended the consequences.
b. enforceable if Huck knew the market value of the farm.
c. enforceable if Huck was the record owner of the farm.
d. void.
Desi starts up eSites, an Internet service, and leases office space in a building owned by
Fred. The lease requires Desi to pay Fred a base rental of $1,250, plus 10 percent of
eSites’ profits, each month. The term is two years. Desi hires Gwen to work at eSites’
tech support desk at an hourly wage of $12.50, plus a commission of 10 percent of the
profits. The term is also two years.
Desi and Fred are
a. not partners, because Fred does not have an ownership interest or management rights
in eSites.
b. not partners, because the lease includes a “base rental.”
c. not partners, because the rent includes only 10 percent of the profits.
d. partners in a partnership for two years.
Ric designs a new computer hard drive, which he names “Sci Phi.” He also writes the
operating manual to be included with each final product. Ric could obtain patent
protection for
a. the hard drive only.
b. the name only.
c. the operating manual only.
d. the hard drive, the name, and the operating manual.
In making decisions for United Merchandising Company, Vance uses a cost-benefit
analysis. This is part of
a. duty-based ethics.
b. Kantian ethics.
c. the principle of rights.
d. utilitarianism.
An Illinois state statute requires commercial vehicle drivers to “fully attend to the
operation of the vehicle.” Jerry, a driver for Crosstown Taxi Company, is driving and
talking on his cell phone when his cab collides with Kayla’s car, injuring her. Kayla’s
best theory for recovery against Jerry and Crosstown is
a. a Good Samaritan statutes.
b. negligence per se.
c. res ipsa loquitur.
d. the “danger invites rescue” doctrine.
A federal statute regulates an employment practice. To resolve a dispute concerning the
practice, Paula, a judge, will most likely apply
a. a common law doctrine that applied before the statute was enacted.
b. a common law doctrine that applies to other, different practices.
c. Paula’s personal philosophy of law.
d. the statute.
Office Equipment Leasing, Inc. (OEL), agrees to lease five computer workstations to
Product Promotion Corporation (PPC). Before any interest in the workstations can pass
from OEL to PPC, they must be
a. in existence and identified as the goods in the contract.
b. in existence only.
c. identified as the specific goods designated in the contract only.
d. none of the choices.
USA Transport Company uses a mark associated with its name to distinguish its
services from those of other transport firms. The mark is
a. a certification mark.
b. a collective mark.
c. a service mark.
d. trade dress.
Food Packaging, Inc., agrees to sell 50,000 6-ounce yogurt containers to Golden Dairy
Company. Food can obtain only 20,000 of the 6-ounce containers, but also ships 30,000
more expensive 8-ounce containers for the same price. Under these circumstances,
Golden
a. cannot reject delivery, and Food cannot later replace the containers.
b. cannot reject delivery, but Food can later replace the containers.
c. may reject delivery, and notice to Golden of Food’s intent to cure will give Food a
reasonable time to replace the containers.
d. may reject delivery, but Food cannot later replace the containers.
Neil goes to Oil Shop to change the oil in his car. Perry, the service technician, learns
that Neil plans to take a trip and advises the use of a certain type of oil. The oil breaks
down during the trip, damaging the car. Neil may recover from Oil Shop for breach of
a. an express warranty.
b. an implied warranty of fitness for a particular purpose.
c. an implied warranty of merchantability.
d. a warranty of title.
Page points a knife at Ray’s daughter, threatening to hold her hostage and “cut” her
unless Ray takes a certain file from Skelter Supplies Corporation, his employer.
Charged with theft, Ray can successfully claim as a defense
a. insanity.
b. duress.
c. entrapment.
d. self-defense.
In an action against Elin, Frank obtains a remedy. This is
a. an administrative agency’s enforcement of its rule.
b. a principle of the law derived from earlier court cases.
c. a statute enacted by a state legislature or Congress.
d. the legal means to recover a right or to redress a wrong.
State Bank offers to lend money to Rodeo Promotions, Inc., at 15 percent interest.
Before Rodeo accepts, a statute is enacted prohibiting loans at interest rates greater than
12 percent. Rodeo and the bank have
a. have a contract for a loan at 15 percent interest.
b. have a contract for a loan at 12 percent interest.
c. have a contract for a loan at 0 percent interest.
d. no contract for a loan.
Under the UCC, an oral contract for a sale of goods is enforceable unless payment has
been made and accepted.
A minor may disaffirm a contract only after attaining the age of majority.
Ron is an accountant in Standard Business Company’s accounting department. Ron’s
daughter’s college tuition is due within a week, or she cannot continue taking classes.
To meet the due date, Ron transfers funds from Standard to a fictitious bank account,
planning to repay the firm within one month. The transfer is discovered before the firm
is repaid, and Ron is arrested. What crime, or crimes, if any, has Ron committed?
A personal name is protected under trademark law if it acquires a secondary meaning.
Limited liability companies (LLCs) are governed by state LLC statutes.
A person who enters into a contract when he or she is intoxicated can void the contract
if the terms are obviously favorable to the other party.
Preemption is a doctrine under which a state law takes precedence over a conflicting
federal law.
A person can reproduce copyrighted material for purposes such as teaching, including
multiple copies for classroom use, without paying royalties.
To be legally sufficient, consideration must include something of economic value.
Express powers of a corporation are found in its articles of incorporation.
Diversity of citizenship cases are only those arising between citizens of different states.
A breach of a contract is a failure to perform it.
Inadequate consideration may indicate undue influence.
In a transaction for the sale of a warehouse, Standard Storage Company tells Tri-County
Investment Corporation that the office furniture is included. The contract says nothing
about office furniture, but does state, “This document supercedes all oral promises
relating to the sale.” Is the furniture part of the sale? Why or why not?
When an agent fails to perform his or her duties, liability for breach of contract may
result.