Marie, an employee of Nickel Tool Company, files a sexual-harassment suit against
Owen, her supervisor. Marie wins. Nickel may also be liable if it had effective
harassment policies and complaint procedures, and
a. none of the employees followed them.
b. Marie followed them.
c. all of the employees were aware of them.
d. Owen followed them.
Gem Jewelers files a voluntary petition for bankruptcy. In listing its assets, Gem in-
tentionally omits certain valuable stones. After Gem is granted a discharge, Hor
dOuerve Catering, one of Gems unsecured creditors whose claims were discharged,
learns of the fraud. Hor dOuerve can
a. do nothing.
b. enforce its claim against Gem.
c. file an involuntary petition for bankruptcy against Gem.
d. take possession of the stones with or without a breach of the peace.
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.
On the orders of their corporate employer, Della and Efron, employees of Fabulous
Fashionista, a clothing store, switch trademarks on clothing that comes into the store to
be sold to consumers. This is most likely
a. forgery.
b. larceny.
c. robbery.
d. no crime.
Svetlana, a fifty-five-year-old member of a racial minority with a disability, believes
that she is a victim of employment discrimination. Potentially the most widespread
form of discrimination is based on
a. age.
b. disability.
c. gender.
d. race.
Molly signs a promissory note payable to Nano Credit Corporation while mentally
incompetent but before a court judges her to be mentally incompetent. The note is
a. payable to any bearer of the note.
b. payable to any holder of the note.
c. payable to the court only.
d. voidable.
By contract, Quality Metals Corporation forbids Resource Refining, Inc., a wholesale
buyer of Qualitys products, from purchasing the products of Qualitys competitors. This
exclusive-dealing contract is allowed
a. under any circumstances.
b. unless its effect is to cause a competitor a loss of any business.
c. unless its effect is to substantially lessen competition.
d. unless there is no effect on a competitor.
Without authorization, Rolf contracts on behalf of Sari to have Tige paint the interior
and exterior of Saris house. Sari ratifies the contract. Later, Sari tries to rescind the part
of the contract relating to the exterior. This attempt will be
a. partly successful.
b. partly unsuccessful.
c. totally successful.
d. totally unsuccessful.
Fact Pattern 41-3A
Atlantic Corporations articles of incorporation prohibit a sale of its assets without a vote
of the board of directors. Atlantics officers sell some assets to Pacific Company without
notice to the board. The officers also fail to pay Atlantics taxes on time, and some
Atlantic funds are not accounted for.
Refer to Fact Pattern 41-3A. The appropriate remedy is most likely
a. a sale of the rest of Atlantics assets to its directors and shareholders.
b. Atlantics consolidation or merger with Pacific.
c. Atlantics dissolution.
d. payment of damages to Atlantics officers.
Ethical behavior on the part of Plastics Products Company may be inhibited by
a. clear ethical standards.
b. collective decision making.
c. legislative determinations of what represents societys best interest.
d. managers dissent to unethical decisions.
Ray and Strip Mines, Inc., enter into a contract for a sale of the coal beneath Rays land
for a fraction of the value of the coal and the cost to restore the land. A court is most
likely to determine that this deal is unfair under
a. the concept of unconscionability.
b. the doctrine of promissory estoppel.
c. the principle of freedom of contract.
d. the Statute of Frauds.
Jen is a third party beneficiary under a contract between Kyla and Leo. Kyla and Leo
can modify or rescind their contract without Jens consent
a. at any time.
b. at no time.
c. after Jens rights have vested.
d. before Jens rights have vested.
Like other corporations, Biopesticide Corporation can extend its operations through
a. a share exchange.
b. a dissolution.
c. a termination.
d. a winding up.
Federico enters Gunthers property to read an electric meter. Gunther charges Federico
with trespass to land. Federico has
a. a complete defense.
b. a partial defense.
c. a possible defense.
d. no defense.
Stable Hydraulics Corporations articles list an incorrect address for its incorporator.
Under this circumstance, Stable is most likely
a. a corporation by estoppel.
b. a de facto corporation.
c. a de jure corporation.
d. ultra vires.
Michelle gives out a business card with an e-mail address on it. According to the
comments that accompany the UETA, it may be reasonable to infer that Michelle has
consented to
a. transact business electronically.
b. submit to the jurisdiction of any selected forum.
c. accept and respond to any correspondence sent to that address.
d. nothing.
Esther and Faisal agree that Esther will fix Faisals car in exchange for his paying a debt
owed by Esther to Gladys. Gladys is
a. a delegatee.
b. an intended beneficiary.
c. an incidental beneficiary.
d. an alien to the contract.
In all states, Exercise & Fitness Club Company and other corporations can pay
dividends from
a. gross profits.
b. net profits.
c. retained earnings.
d. surplus.
Cardio, Inc., makes and sells Drawdown, the most prescribed name-brand heart
medication. Emitate Corporation has the potential to make a generic version of the
same drug. Cardio pays Emitate not to sell its product. This price-fixing agreement is
most likely
a. a deal that neither restrains trade or harms competition.
b. a legal restraint of trade.
c. a per se violation of antitrust law.
d. subject to analysis under the rule of reason.
Fact Pattern 35-2A
Beth, who has a disability, is an employee of Corporate Office Company (COC). After
the installation of new doors on COCs building, Beth finds it nearly impossible to get in
and out. For repeatedly failing to be on time, COC replaces Beth with Dian, who does
not have a disability.
Refer to Fact Pattern 35-2A. To succeed with a claim against COC under the Americans
with Disabilities Act, Beth will have to show that
a. Beth consistently met the essential requirements of her job.
b. COC refused to make reasonable accommodation for Beth.
c. Dian is unqualified for Beths position.
d. the doors were installed as an act of intentional discrimination.
With Megs permission, Nell cuts the trees growing on Megs land. Nell sells the timber
to Olin, who converts it to a variety of wood products. Personal property includes
a. after the trees are cut, the timber and the wood products.
b. only, after the trees are cut and sold, the wood products.
c. only, after the trees are cut, the timber.
d. only the trees while they are growing on the land.
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 Paints failure to use reasonable care to avert herm to Verna.
d. the same harm as that affecting the general public.
Maggie and Nate enter into a contract for the sale of car, but Nate later refuses to
deliver the goods. Maggie asks a court to order Nate to perform as promised. Ordering a
party to perform what was promised is
a. an equitable remedy.
b. an unenforceable demand.
c. a remedy at law.
d. a type of harm.
Riki files a suit against Stevedore Shipping Corporation under the Civil Rights Act of
1964, alleging employment discrimination on the basis of gender on a disparate-impact
theory. To succeed, Riki must show that Stevedore hires fewer women than the per-
centage of
a. qualified women in the local labor market.
b. qualified women in the United States.
c. women in Stevedores state.
d. women who apply to Stevedore for work.
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 Kaylas car, injuring her. Kaylas
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.
Socrates Software Corporation wants to hire Tomas, a noncitizen of “extraordinary
ability. To hire Tomas, Socrates must petition
a. U.S. Citizenship and Immigration Services.
b. the Social Security Administration.
c. U.S. Immigration and Customs Enforcement.
d. the National Labor Relations Board.
Toms Timber Outlet and Olivia, a consumer, enter into a contract for a sale of plywood.
If the contract includes a clause that is perceived as grossly unfair to Olivia, its
enforcement may be challenged under
a. the mirror image rule.
b. the principle of fair trade.
c. the predominant-factor test.
d. the doctrine of unconscionability.
Green Grocers, Inc., enters into a contract with Hiway Transport Company for the
delivery of a shipment of fresh produce. In a later dispute between these parties over the
delivery, the doctrine of quasi contract cannot be used because
a. both of the parties involved are businesses.
b. at least one of the parties had greater bargaining power.
c. the subject of the contract was a service.
d. there is an actual contract covering the subject in dispute.
Following negotiations with Lesters Landscaping for maintenance services for a lawn
and garden, Moore enters into an informal contract. This means that the parties contract
a. requires no special form.
b. is not enforceable.
c. is not a true contract.
d. is voidable.
Inger is a franchisee of Honey Bear Restaurants, LLC Their contract gives Honey Bear
the right to control virtually all aspects of Ingers operation, including the hiring of
employees. One of the employees, Joris commits a tort against Kiley, one of Ingers
customers. Kiley files a suit against Honey Bear. Honey Bear is most likely
a. liable because Honey Bear exercises control over Ingers operation.
b. liable because Kiley was Honey Bears customer.
c. not liable because Inger is responsible for the employees.
d. not liable because Kiley was Ingers customer.
Jack owns land located outside Metro City. Jack sells the land to Quality Disposal, Inc.,
which establishes a hazardous waste disposal facility at the site. Quality Disposal
accepts only waste transported by Regional Trucking Company exclusively from
Consolidated Industries, Inc. Several years later, Quality Disposal closes its facility and
sells the land to Price Rite Corporation, which builds a Price Rite Discount Store on the
site. Meanwhile, some of Metros citizens complain to the Environmental Protection
Agency (EPA) that Metros municipal water supply is polluted. The EPA investigates
and discovers that the sources of the pollution are leaks of hazardous waste from what
is now the Price Rite property. The EPA cleans up the site. Who can be held liable for
the cost of cleaning up the site? What standards must Metro meet regarding the water?
In a brief filed in Leas suit against Mica in a state court, Neil, Leas attorney, cites, Ole!
Cafe v. Pan Foods Corp., an unpublished opinion. With respect to the persuasiveness of
unpublished opinions, most states
a. allow their courts to consider such opinions.
b. do not allow their courts to consider such opinions.
c. impose certain hierarchical rankings.
d. require their courts to consider such opinions.
In-Home Maid Service Company uses a Web site to provide downloadable information
to prospective franchises. This online information is the equivalent of an offer that must
comply with
a. the Automobile Dealers Franchise Act of 1965.
b. the Petroleum Marketing Practices Act of 1979.
c. the Federal Trade Commissions Franchise Rule.
d. the state Franchise Disclosure Document, or FDD.
In the pursuit of profits, Global Enterprises Corporation engages in what some
observers consider to be bad corporate behavior. The worldwide explosion of
information technology has led to a transparent global economy that makes socially
responsible behavior
a. more important.
b. less important.
c. neither more nor less important.
d. both more and less important.
The full faith and credit clause ensures that rights established under a contract in one
state are honored by other states.
MicroWare hosts a Web site that advertises its software products, features upgrades and
“patches for its existing software products, and accepts orders for the products from
consumers throughout the world. Mary, who owns and operates Business Records, Inc,,
a small bookkeeping and payroll business in Colorado, orders from the Web site a copy
of MicroWares Office Books software. Office Books is designed to help accountants
and bookkeepers keep accurate business records. When Office Books is found to have a
defect in its calculating program, MicroWare offers a patch on its Web site to fix the
problem. Mary has already lost several customers because of the miscalculating defect,
however, and files a suit against MicroWare in a Colorado state court. Can the court
exercise jurisdiction over MicroWare? Why or why not?
One characteristic of an abnormally dangerous activity is that it involves a low degree
of risk.
A person who does not qualify as an HDC but who derives his or her title through an
HDC can acquire the rights and privileges of an HDC.
In many states, the plaintiffs negligence is a defense that may be raised in a negligence
suit.
Shareholders are the ultimate authority in every corporation.
A partys lack of understanding of contract terms can deprive him or her of any
meaningful choice.
A principal owes an agent a duty of estoppel.
Congress may tax some states and exempt others.
Informal contracts are usually based on their substance rather than their form.
When a condition operates to terminate a partys promise to perform, it is a condition
subsequent.
For an instrument to be negotiable, it need not be signed.
There are no plans to develop national standards regulating the fuel economy and
emissions for medium- and heavy-duty trucks.
Except in a short-form merger, the shareholders of both corporations must approve a
merger or other plan of consolidation.
Gaining unauthorized access to an electronic fund transfer system constitutes a federal
felony.
A certification mark distinguishes products approved, or “certified, by the government.
The terms of a fully integrated contract can be contradicted only by evidence of any
prior agreements.