Carol files a suit against Downwind Boat Corporation. Downwind responds that it
appears from the pleadings the parties do not dispute the facts and the only question is
how the law applies to those facts. Downwind supports this response with witnesses’
sworn statements. This is
a. a counterclaim.
b. a motion for judgment on the pleadings.
c. a motion for summary judgment.
d. a motion to dismiss.
Cleaners & Solvents, Inc. (CSI), engages in deceptive advertising when it markets its
product Dirt Remover as able to kill germs over long periods of time. In an action
against CSI regarding Dirt Remover, the firm is ordered to stop its false advertising of
Dirt Remover and other products. This is
a. a counteradvertising order.
b. a multiple product order.
c. a “cooling-off” law.
d. a validation notice.
Fact Pattern 34-2
Bertram, Claudia, and Dynah form Eat Local, Inc., a closely held corporation, and agree
to restrict the transfer of its stock to anyone else. The agreement provides that if one of
the shareholders dies, his or her shares of stock in Eat Local will be divided to maintain
the proportionate control of the survivors.
Refer to Fact Pattern 34-2. A reasonable purpose for a stock transfer restriction in a
closely held corporation, like the agreement between Bertram, Claudia, and Dynah, is
a. a desire to limit the participation of outsiders in the firm.
b. a goal to restrain insiders from taking advantage of their position.
c. an attempt to restrain the free flow of commerce among investors.
d. a wish to restrict the transfer of the shareholders’ physical assets.
Jack promises to buy Kris’s computer for $400. Jack is
a. an executor.
b. an offeree.
c. a promisee.
d. a promisor.
Bee Hive Honey, LLC’s 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.
Ruby Red Corporation has six shareholders, four of whom are members of the same
family. All of Ruby’s shareholders agree in writing to operate without shareholders’
meetings. Under the Revised Model Business Corporation Act, this most likely warrants
a. no penalties or sanctions.
b. the imposition of a fine on Ruby.
c. the imprisonment of Ruby’s shareholders.
d. the piercing of Ruby’s corporate veil.
Gladstone regularly sends unsolicited commercial e-mail to hundreds of millions of
recipients. This e-mail is prohibited or regulated in
a. most states.
b. only a few states.
c. no state.
d. California only.
Doyle steals Carmen’s computer and its software. This is computer crime in which the
computer is
a. the object of the crime.
b. the subject of the crime.
c. the instrument of the crime.
d. irrelevant to the crime.
Regional Lumber Company and Superior Builders Corporation enter into a contract for
a sale of wood products. Regional, a merchant who deals in goods of the kind sold,
makes implied and express warranties in connection with the sale. Under the UCC, if
these are inconsistent
a. all implied warranties displace all express warranties.
b. all express warranties displace all implied warranties.
c. the implied warranty of fitness for a particular purpose takes precedence.
d. the implied warranty of merchantability takes precedence.
Beth is a victim of Carl’s violation of a criminal law. Criminal law is concerned with
a. the prosecution of private individuals by other private individuals.
b. the prosecution of public officials by private individuals.
c. the relief available when a person’s rights are violated.
d. wrongs committed against the public as a whole.
Boris programs software to prompt a computer to continually crash and reboot. Boris’s
goal is to install this program on various companies’ computer systems without the
companies’ knowledge. The program can reproduce itself, but must be attached to a host
file to travel from one computer network to another. This program is
a. a hacker.
b. a bot.
c. a virus.
d. a worm.
Trek Transport Company uses a mark associated with its name to distinguish its
services from those of other trucking firms. This mark is
a. a certification mark.
b. a collective mark.
c. a service mark.
d. trade dress.
Expendable Energy Corporation regularly expresses opinions on political issues. Under
the First Amendment, corporate political speech is given
a. little protection.
b. no protection.
c. significant protection.
d. total protection.
Worldwide Realtors, Inc., sells a franchise to XL Sales Company. XL is
a. a franchisee.
b. a franchisor.
c. an agent.
d. a principal.
Herm promises to pay Nixie to work as an assistant buyer for his Organic Foods stores.
Nixie agrees and quits her job with Pic-U Grocery, but Herm does not hire her. Herm is
most likely liable to Nixie under
a. the concept of accord and satisfaction.
b. the doctrine of promissory estoppel.
c. the preexisting duty rule.
d. no circumstances.
Gregor uses duress to force Honi to agree to pay him for protecting Honi’s Coffee Shop
against vandalism and destruction. Honi may
a. avoid the contract or choose to carry it out.
b. do nothing once she has agreed to pay.
c. recover from her insurer for a failure to direct her “protection.”
d. recover from the local police for a failure to protect her “direction.”
Reaching for a bottle of soda from a display in a Bargain Mart store, Cody slips in a
puddle of spilled soda and falls, suffering an injury. Bargain Mart’s employees are not
aware of the spilled soda until Cody falls. In a suit against Bargain Mart, Cody will
most likely
a. lose, because Bargain Mart’s employees were not aware of the spill.
b. lose, because Cody should have exercised more care.
c. win, because Bargain Mart can recover from the soda bottler.
d. win, because the spilled soda was foreseeable.
Delite Candy Company hires Elton to sell Delite’s products in a certain area. Delite
agrees to pay Elton a salary, plus commission, for a trial period. They also agree that
Elton can sell using any methods and during any hours that seem appropriate. The key
factor in whether Elton is Delite’s employee is
a. the amount of Elton’s salary.
b. the control Delite has over the details of the work.
c. the length of the trial period.
d. the title that designates Elton’s position.
Firelite Corporation wants to purchase all of the assets of Glo Power Products, Inc.
Hadji is an Firelite shareholder. The approval of Hadji and other Firelite shareholders is
necessary
a. in all circumstances.
b. in no circumstances.
c. only if Firelite plans to pay with unauthorized, unissued stock.
d. only if the purchase extends Firelite’s control over more assets.
Before adopting new regulations to govern Internet-based phone services, the Federal
Communications Commission may not
a. hold hearings to acquire facts pertinent to the proposed rules.
b. ignore the Administrative Procedure Act to streamline proceedings.
c. order manufacturers to provide certain documents.
d. solicit testimony from interest groups and consumers.
Garden Field Farms and Haute Gourmet Restaurant, Inc., enter into a contract for a sale
of lettuce before Haute Gourmet declares bankruptcy. Garden Field can stop delivery of
the goods in transit
a. only if the quantity is at least a carload.
b. only if the quantity is at least a planeload.
c. only if the quantity is at least a truckload.
d. regardless of the quantity.
Biff wrongfully takes an unopened carton from a Cold Storage Warehouse loading
dock, puts the carton in his car, and drives away. This is
a. burglary.
b. forgery.
c. larceny.
d. no crime.
Diamond Financial Planners employs Ella, who is the firm’s most productive performer.
Ella, dissatisfied with the commission structure, quits to work for Feldstar Investments,
Inc. She takes her list of Diamond clients to induce them to switch to Feldstar. Trade
secrets law covers
a. Diamond’s list of clients.
b. Ella’s performance.
c. Feldstar’s commission structure.
d. none of the choices.
First National Bank may subject its employees to lie-detector tests when investigating
a. health and medical conditions.
b. losses attributable to theft.
c. prior work history.
d. suspected drug use.
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.
Rita is a surety for Sue’s loan from Total Finance Company. Rita’s right to ‘step into the
shoes” of Total Finance, after paying Sue’s debt, and exercise any of the Total Finance’s
rights against Sue is the right of
a. contribution.
b. redemption.
c. reimbursement.
d. subrogation.
Even-Bilt Construction contracts to build a warehouse for Discount Sales Mart.
Even-Bilt completely performs. Discount Sales is entitled to
a. an accord.
b. rescission.
c. damages.
d. nothing more.
Ike pushes Joan, who falls and breaks her arm. Ike is liable for the injury
a. if Ike intended to push Joan.
b. only if Ike did not intend to break Joan’s arm.
c. only if Ike had a bad motive for pushing Joan.
d. only if Ike intended to break Joan’s arm.
Pete, the owner of Quality Orchards, contracts to sell fruit to Ripe Produce, Inc. When
Pete refuses to perform, Ripe Produce files a suit to enforce the contract. To defend
successfully on the ground of unconscionability, Pete must show that enforcement of
the contract would be
a. economically meaningless.
b. legally worthless.
c. manifestly unfair or oppressive.
d. undeniably valuable.
Delta, Inc., agrees to assume a debt of Evenflo Company to First State Bank. The
agreement is not in writing. To be enforceable, the promise must be for the benefit of
a. any party.
b. Delta.
c. Evenflo.
d. First State.
Suki works for Renaldo. At the end of her first year, Renaldo promises to pay her a
bonus for her “four quarters of success.” Renaldo’s promise is
a. unenforceable because Suki’s performance was a preexisting duty.
b. unenforceable because Suki’s performance is past.
c. enforceable.
d. unenforceable because Suki’s performance is not legally sufficient.
Thermo Gas, Inc., and Uno Oil Corporation refine and sell gasoline and other
petroleum products. To limit the supply of gas on the market and thereby raise prices,
Thermo Gas and Uno Oil agree to buy “excess” supplies from dealers and “dispose” of
it. This is
a. a horizontal restraint.
b. a lateral restraint.
c. a vertical restraint.
d. not a restraint.
Dhani is the beneficiary of a life insurance policy on Elmo’s life obtained from Famed
Insurance Company. The insured under this policy is
a. Dhani.
b. Elmo.
c. Famed.
d. the agent or broker through whom the policy was obtained.
An employer is not liable for the sexual harassment of an employee by the employee’s
supervisor.
One of the advantages of a sole proprietorship is that the owner is not liable for the
actions of the business.
The person to whom rights in a contract are assigned is the delegatee.
Damages are designed to punish a breaching party and deter others from similar
conduct.
Adverse possession is a means of obtaining title to property without the delivery of a
deed.
A design defect is not the sort of product defect that will support the imposition of
liability on a strict product liability basis.
Stealing software is not a crime.
Under a destination contract, the risk of loss passes to the buyer when the goods are
duly delivered to the carrier.
An accountant who prepares a financial statement in good faith may avoid liability
under Section 18 of the Securities Exchange Act of 1934.
Shareholder voting agreements are usually held to be invalid and unenforceable.
If a seller is to remove a structure attached to land, the sale of the structure is treated as
one involving goods as opposed to realty.
Courts typically consider the adequacy of consideration.
A promise to do what one already has a legal duty to do is legally sufficient
consideration.
An instrument is not defective because it has been previously dishonored.
Certain debtors may not qualify to have all debts discharged in bankruptcy.
Currently, it is not clear which, if any, laws apply to the security of e-money payment
information.
Restrictions on exports may include tariffs.