Kris presents an instrument that states “pay to the order of Kris” to Metro Bank for
payment. This is a special type of draft drawn on a bank, ordering the bank to pay a
fixed amount of money on demand. This is
a. a commercial wire transfer.
b. a check.
c. a debit card transaction receipt.
d. a cash transaction
Susan takes her car to Ken’s repair shop and asks him to fix the car’s brakes. Ken
completes the work and sends Susan a bill for $100. Susan refuses to pay so Ken
refuses to return Susan’s car. Susan can probably successfully sue Ken for
a. battery.
b. conversion.
c. trespass to property.
d. none of the choices.
Mythic Games Company employs two hundred workers full-time. If Mythic Games
plans to have a mass layoff, it must provide its employees with at least
a. thirty days of notice.
b. sixty days of notice.
c. ninety days of notice.
d. one year of notice.
Dwayne can be described as “a reasonably competent general practitioner of ordinary
skill, experience, and capacity.” This is the normal standard for judging the performance
of
a. a client.
b. an accountant.
c. an attorney.
d. a tax preparer.
Lovey is a shareholder of Matchless Corporation with preemptive rights. With these
rights, Lovey can
a. buy a prorated share of a new issue of stock before other buyers.
b. choose to have Matchless act exclusively in a certain area.
c. “preempt” managerial decisions that affect shareholders.
d. sell a prorated share of a new issue of stock before other sellers.
Jim tells Dana that he will take her out to lunch on Thursday. Jim has made Dana a
a. prediction.
b. promise.
c. bilateral contract.
d. void contract.
Ric designs a new tablet computer that he names “Sci Phi.” He also writes the operating
manual to be included with each final product. Ric can obtain patent protection for
a. the tablet computer.
b. the “newness” of the tablet computer.
c. the name.
d. the operating manual.
A Montana state court can exercise jurisdiction over Endurance Insurance Corporation,
an out-of-state defendant, but the defendant must have
a. minimum contacts with the state.
b. maximum contacts with the state.
c. legitimate contacts with the state.
d. legal contacts with the state.
The Tenth Amendment to the U.S. Constitution
a. reserves to the states all powers not granted to the federal government.
b. reserves to the federal government all powers not granted to the states.
c. requires each state in the union to have its own constitution.
d. does not exist.
John is sales manager for Kleen N Brite Products, Inc. Compared to John’s personal
activities, his business activities most likely involve
a. more complex ethical issues.
b. no ethical issues.
c. simpler ethical issues.
d. the same ethical issues.
Kerin obtains a property insurance policy for her art collection from Lawton Insurance
Company. Kerin can cancel the policy
a. at any time.
b. only at the end of a period for which a premium has been paid.
c. only if Kerin no longer has an insurable interest in the property.
d. only on advance written notice.
Flynn is a drug addict who has completed a supervised drug-rehabilitation program.
Gert used drugs casually in the past. Heath reports to work while under the influence of
alcohol. Considered to have a disability under the Americans with Disabilities Act of
1990 is
a. Flynn.
b. Gert.
c. Heath.
d. all of the choices.
Mountain Mining Company, a U.S. firm, owns property in Bolivia. The government of
Bolivia seizes the property for an illegal purpose without paying just compensation.
This is
a. confiscation.
b. defalcation.
c. dumping.
d. expropriation.
The Class Action Fairness Act of 2005
a. shifted jurisdiction over certain class-action lawsuits from the state courts to the
federal courts.
b. shifted jurisdiction over certain class-action lawsuits from the federal courts to the
state courts.
c. made forum shopping punishable by large fines.
d. limited the amount of damages that could be awarded in a medical malpractice suit.
Bret buys a franchise from Comida Mexicano Ltd. If their agreement is like most
franchise agreements, it will specify that Comida can terminate the franchise
a. at will.
b. for any reason.
c. for cause only.
d. for no reason.
Jack and Jill, citizens of Vermont, are involved in a case related to the adoption of their
child. The Vermont state courts
a. have concurrent jurisdiction with federal courts over this case.
b. have original jurisdiction over this case.
c. have exclusive jurisdiction over this case.
d. do not have jurisdiction for over case.
A suit is filed against Adroit Drilling Tools Corporation, alleging that the firm commit-
ted the offense of monopolization. To determine whether Adroit has monopoly power
requires looking at
a. the definition of monopoly in the Sherman Act.
b. Adroit’s size alone.
c. Adroit’s production methods and marketing techniques.
d. the relevant market.
Elton presents an uncertified check for payment more than six months after its date. The
check was drawn by Dakota on her account in First Community Bank. The usual
banking practice in such a case is to
a. cash the check.
b. consult the customer.
c. refuse to cash the check.
d. ask the payee what he or she would prefer.
The Arkansas state legislature enacts a statute that prohibits the advertising of video
games “because the games might be harmful to minors.” Despite this new statute, the
president of Games Marketing, Inc. (GMI), orders GMI marketers to place ads in
various media. When a GMI ad appears on HDTV, a local television station, GMI and
HDTV are charged with violating the statute. What is the defendant’ best defense
against a conviction?
George has a badly infected right foot. Herb, George’s physician, prescribes amputation.
George agrees. During the operation, Herb amputates the left foot. In George’s suit
against Herb, George’s best theory for recovery is
a. assumption of risk.
b. negligence per se.
c. res ipsa loquitur.
d. strict liability.
Sweet Styles, Inc., a franchisor of clothing stores, wishes to standardize the pricing
practices of its franchisees that have engaged in price-cutting to increase their
respective shares of the market. The most prudent action might be for Sweet to
a. mandate the prices at which its franchisees sell their products.
b. suggest the prices at which its franchisees sell their products.
c. require its franchisees to buy inventory exclusively from Sweet.
d. threaten its franchisees with a material breach of contract.
Rita buys a Super Grill franchise. Super Grill requires that its franchisees buy its
products for every phase of their operations. Because Rita wishes to buy less expensive
products, she challenges the requirement. Her best argument is probably that the re-
quirement violates
a. the commerce clause.
b. the Equal Protection Clause.
c. the federal antitrust laws.
d. the First Amendment.
Michael contracts with Jill to fix the brakes on her Honda Civic. Jill leaves her car with
Michael, but refuses to pay when the work is done. Michael refuses to return the car
until she pays. Michael’s lien on Jill’s car will end
a. in thirty days.
b. in sixty days.
c. when Michael voluntarily surrenders possession of the car.
d. when Jill obtains a court order requiring Michael to return the car.
Fact Pattern 30-1
Ray is a shareholder of Small Biz Company (SBC). When the directors fail to undertake
an action to redress a wrong suffered by SBC, Ray files a suit on the firm’s behalf.
Refer to Fact Pattern 30-1. Any damages recovered by Ray’s suit will go to
a. Ray.
b. SBC.
c. SBC’s directors.
d. the state in which SBC is incorporated.
Scienter exists if
a. Martin knows that the transmission on his truck is defective, but does not tell this fact
to potential buyers.
b. The racehorse that Karen is trying to sell has a genetic defect, but Karen does not
know about the defect, and so she does not warn potential buyers.
c. Jake, a real estate agent, tells a client that he has a house that “will make all her
dreams come true.”
d. Jon forces Bill to sign a contract to sell Jon a car below market value.
Dale files a suit against Evelyn, alleging her fraud in entering into a contract with him.
Proof of an injury is required
a. to recover damages.
b. to rescind the contract.
c. to undo Evelyn’s influence.
d. under no circumstances.
Civil law is
a. a body of law in the form of rules, regulations, orders, and decisions of administrative
agencies
b. the branch of law dealing with the definition and enforcement of all private or public
rights.
c. federal law, as opposed to state law.
d. law that provides for societal order.
Eighty-year-old Clark exhibits confusion, forgetfulness, and disorientation. Dave,
Clark’s doctor, believes that the symptoms indicate dementia. Elsa, who has significant
contact with Clark, believes that he is in a state of mental decline. These facts indicate
a. an urgency that Clark distribute his assets.
b. Clark’s lack of capacity.
c. Dave’s misdiagnosis.
d. Elsa’s intent to take advantage of Clark.
Tami’s Tasty Tacos, a fast food outfit, files a suit against the state of Texas, claiming that
a Texas state law violates the commerce clause. The court will agree if the statute
imposes a substantial burden on
a. a local government.
b. interstate commerce.
c. noneconomic activity.
d. the state.
Verna makes a living by commercial fishing in a river allegedly polluted by Wall Paint
Company. To bring a suit against Wall Paint on the ground of private nuisance, Verna
must allege that she suffers from
a. a distinct harm separate from that affecting the general public.
b. a lesser harm than an injunction would impose on Wall Paint.
c. Wall Paint’s failure to use reasonable care to avert herm to Verna.
d. the same harm as that affecting the general public.
Under Ohio’s state constitution, the Ohio Environmental Protection Agency issues a
new rule, the Polk County Commission approves a new property tax measure, and the
professors and students at Ohio Law School publish the results of their most recent
legal research. Sources of law do not include
a. the measures approved by local governing bodies.
b. the results of legal scholar’ research.
c. the rules issued by state administrative agencies.
d. the state’ constitutions.
Roy’s Chickn Shack orders chicken from Standard Food Supplier, but Standard does not
deliver. Roy’s will probably be unable to enforce the agreement if the parties
a. did not limit the duration of the deal.
b. did not specify a payment term.
c. did not specify a quantity term.
d. have not begun to perform.
David, the chief accounting officer of Tension Fencing Corporation, wants to be sure
that all the company’s accounts are legal and ethical. Sometimes, however, he is unsure
exactly what is legal and what is illegal. David should
a. not worry about what is legal or illegal as long as the corporate executives benefit in
the short run.
b. try his best to not do anything illegal and keep documentation showing that he
always acts in good faith.
c. not worry about what is legal or illegal as long as it benefits the shareholders.
d. not worry about what is legal or illegal as long as it benefits the chief executive of the
corporation.
Cooper’s Brakes, Inc., enters into a contract with Byron’s Service to fix Cooper’s
hydraulic equipment. Byron delays the repair for three days, but is not aware that
Cooper loses a certain percentage of profit each day the equipment is out of service.
Cooper is most likely to be awarded
a. compensatory damages.
b. nominal damages.
c. punitive damages.
d. no damages.
Lexy and Mort act as the incorporators for NuGame Corporation. After the first board
of directors is chosen, subsequent directors are elected by a vote of NuGame’s
a. board of directors.
b. employees.
c. officers.
d. shareholders.
Willful violations of the Sarbanes-Oxley Act of 2002 may be subject to harsh penalties.
Manufacturers are required to report on any products intended for sale if the products
have proved to be hazardous.
A sole proprietor must create a separate business organization to create a sole
proprietorship.
A plaintiff alleging wage discrimination must file a complaint within a certain period of
time of the decision that set the discriminatory pay.
A forged signature is effective as the signature of a drawer to the extent that is
resembles the drawer’s actual signature.
The minimum number of members of a body of officials that must be present before
business can validly be transacted is known as a quorum.
A prenuptial agreement must be in writing to be enforceable.
A remedy is the relief provided to an innocent contracting party when the other party
breaches the contract.
Tariffs are imposed only on exports.
Commercial Credit Company has in its possession an instrument dated May 1, 201 The
instrument is payable to the order of Alpha Company “on June 1, 2013,” for $5,000. In
the upper left corner is an address for Beta Corporation10 Corporate Park Avenue,
Chicago, Illinois’and 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, 201″ 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?
An action in strict product liability requires that the product not be in a defective
condition when the defendant sells it.
The last security interest to be perfected is the first in priority over any other perfected
security interests.
When a limited liability company is dissolved, any member who did not wrongfully
dissociate may participate in the winding up process.
The First Amendment requires a complete separation of church and state.
A bank employee stealing funds from a client is an example of embezzlement.
A limited liability company is not a citizen of any state.
The Norris-LaGuardia Act effectively declared a national policy permitting employees
to organize.