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Ada is the maker of a note, on which Bart is secondarily liable. Cash & Credit
Company (C&C) is the current holder of the note. Bart will be obligated to pay the note
if
a. Ada defaults on the note.
b. C&C breaches a transfer warranty.
c. C&C negotiates the note to Delta Collection Agency, a third party.
d. C&C presents the note for payment.
Richard wants to hire Sam to mow Richard's lawn every week for the summer. Richard
writes up the offer on June 1. In his offer, Richard specifies that Sam must accept the
offer within five days. Richard signs the offer on June 2 and mails it to Sam on June 3.
Sam receives the offer on June 4. Sam's five day acceptance period began on
a. June 1.
b. June 2.
c. June 3.
d. June 4.
High-Tech Services, Inc., and Internet Investments Corporation enter into a contract
that would otherwise be subject to the UETA but purports to "opt out." The UETA
covers
a. none of the contract.
b. only the part of the contract that concerns computer data.
c. only the part of the contract that does not concern computer data.
d. the entire contract.
Consumer Credit, Inc. (CCI), lends $1,000 to Joe. Kay acts as Joe's surety. If Kay pays
the loan, she gets
a. any right that CCI had against Joe, but not a right to be repaid by Joe.
b. a right to be repaid by Joe, but not any right that CCI had against Joe.
c. any right that CCI had against Joe and a right to be repaid by Joe.
d. none of the choices.
End-Run Energy Company (ERE) is a public utility. To avoid liability for negligence,
ERE can normally obtain a court order to enforce
a. a covenant not to compete.
b. an adhesion contract.
c. an exculpatory clause.
d. none of the choices.
Fact Pattern 28-1
Lita replaces Manny in his job at Neighborly Business Corporation (NBC).
Refer to Fact Pattern 28-1. To succeed with an age-discrimination claim against CBC,
Manny will have to show that
a. Lita is not qualified for Manny's job.
b. Manny is qualified for his job.
c. NBC's qualifications for Manny's job are too high.
d. no one could do Manny's job as well as he could.
Ted has a mortgage that requires low payments for seven years and then a large
payment for the entire balance of the mortgage loan after the seven years have passed.
Ted's mortgage is
a. a balloon mortgage.
b. an interest-only mortgage.
c. a subprime mortgage.
d. a fixed-rate mortgage.
Odell and Paula sign a contract for the sale of Odell's Pizza Parlor to Paula. The parties
intend their written contract to be a final statement of most, but not all, of the terms of
their agreementOdell must first buy the building from Quin, after which Odell and
Paula will negotiate a final price.
Refer to Fact Pattern 14-2. Paula later disputes some of the provisions of the deal with
Odell. If the dispute results in litigation, a court will most likely admit evidence of
additional terms that are
a. ambiguous.
b. consistent.
c. contradictory.
d. fraudulent.
Mike applies for a mortgage loan at Quality Assured Bank. Mike qualifies for a
fixed-rate loan, but the Quality Assured agent manipulates Mike into agreeing to an
ARM even though the fixed-rate loan would be better for Mike. This is
a. an acceptable way to conduct business.
b. steering and targeting.
c. loan flipping.
d. unjustified lending.
Victor leaves his Dodge sport utility vehicle at Gordo's Auto Service for an oil change.
This is
a. a bailment.
b. a gift.
c. confusion.
d. abandoned property.
Wytex, Inc., a U.S. firm, and Findora Commercial, a Nigerian firm, are parties to a
contract that specifies that the official language of the contract is English. This is
a. a choice-of-forum clause.
b. a choice-of-language clause.
c. a choice-of-law clause.
d. an arbitration clause.
Leona enters into a contract with Munchie Bakery to cater a sales conference. When the
conference is postponed indefinitely, Leona asks a court to cancel the contract and
return the parties to the positions that they held before its formation. This request
involves
a. an equitable remedy.
b. an unenforceable demand.
c. a remedy at law.
d. a type of harm.
Sunny Energy Company wants to genetically test its workers for potentially significant,
future health problems. Sunny may
a. discharge employees who test "positive."
b. discriminate against job applicants who test "positive."
c. deny group health insurance for its employees who test "positive."
d. not make employment decisions based on genetic testing.
Lani is asked to serve as a witness to Mona's will. To qualify, Lani must be
a. a collateral heir.
b. a lineal descendant.
c. eighteen years of age or older.
d. mentally competent.
To fall under the Sherman Act, an activity must
a. substantially affect interstate commerce.
b. involve monopolization.
c. promote competition.
d. involve international trade.
City Bank's financing statement in collateral owned by Delta Waters Corporation will
expire in less than a year. Filed timely, a continuation statement could extend the
effectiveness of the financing statement for
a. one year.
b. two years.
c. five years.
d. ten years.
The employees of Slaughterhouse Corporation designate Meatpackers Union as their
bargaining representative. Slaughterhouse refuses to bargain with the union. This
violates
a. federal labor law.
b. federal elections law.
c. federal employment discrimination law.
d. no federal law.
Odell and Paula sign a contract for the sale of Odell's Pizza Parlor to Paula. The parties
intend their written contract to be a final statement of most, but not all, of the terms of
their agreementOdell must first buy the building from Quin, after which Odell and
Paula will negotiate a final price.
Refer to Fact Pattern 14-2. The writing that Odell and Paula signed is a contract that is
a. completely integrated.
b. conditionally integrated.
c. partially integrated.
d. supplementally integrated.
Elinor performs ten hours of house cleaning for Zack in exchange for a promissory note
for $400. At the time that Elinor accepts the note, she is aware that bankruptcy
proceedings are being filed against Zack. Elinor
a. can obtain HDC status.
b. cannot obtain HDC status, because she knows that there are bankruptcy proceedings
against Zack.
c. cannot obtain HDC status, because she did not fulfill the value requirement.
d. cannot obtain HDC status, because she did not fulfill the good faith requirement.
Fala asks Jessie to contract with fellow high school classmates to babysit for Fala's new
baby. Jessie orally agrees to do so. This is
a. an agency by agreement.
b. an agency by estoppel.
c. an agency by ratification.
d. not the creation of an agency relationship.
A contract between Fresh Fruit Corporation and Green Grocer, Inc., requires Fresh Fruit
to deliver goods to Green Grocer's place of business. This is
a. a bill of lading.
b. a destination contract.
c. a shipment contract.
d. a warehouse receipt.
Barbara is selling her car. She knows that the brakes do not work. When a potential
buyer asks Barbara if there are any problems with the car, Barbara assures the buyer
that there are no problems. The buyer purchases the car based on the assurance that
there is nothing wrong with it. The buyer may be able to sue Barbara for
a. assault.
b. defamation.
c. fraudulent misrepresentation.
d. appropriation.
Maggie uses John's garage to store her car. She does not pay rent. John decides that he
needs the garage for his own car. To terminate Maggie's tenancy, John
a. must give Maggie at least one week's notice.
b. must give Maggie at least two week's notice.
c. must give Maggie a reasonable amount of time to find a new place to park her car.
d. need not give Maggie any notice.
The Federal Trade Commission (FTC) rules that Hairy Heads, Inc., engages in
deceptive advertising when it markets its product Hairy Head Helper as able to
eliminate baldness in two weeks or less. In an action against Hairy Heads regarding
Hairy Head Helper, the FTC orders Hairy Heads to run a series of ads informing the
public that Hairy Head Helper cannot actually eliminate baldness. This is
a. bait-and-switch advertising.
b. a cease-and-desist order.
c. a counteradvertising order.
d. excessive abuse of authority.
Edy obtains a homeowners' insurance policy with First Source Insurance Company.
First Source can cancel the policy
a. if Edy appears as a witness in a case against First Source.
b. if Edy fails to pay the premiums.
c. if Edy makes changes that add to the home's value.
d. under no circumstances.
Oscar owns Payroll Company, a bookkeeping service losing market share to Quik
Bookwork, Inc. Oscar pays Remy $5,000 to steal a list of Quik's clients, to whom Oscar
will aggressively market Payroll's services. This deal is
a. enforceable.
b. void.
c. voidable at the option of either party.
d. voidable at the option of the party having less bargaining power.
Ben files a suit in a federal district court against Cathy. Cathy loses the suit, appeals to
the U.S. Court of Appeals for the Second Circuit, and loses again. Cathy asks the
United States Supreme Court to hear the case. The Court agrees to hear the case. This
means that
a. at least four justices approve of hearing the case.
b. Cathy's petition does not raise a possibility of an important constitutional question.
c. the amount in controversy in Cathy's suit is greater than $100,000.
d. the Court feels that the lower courts' judgments were erroneous.
Grover contracts to sell two tracts of land to Hank. Both parties believe that the two
tracts are adjacent, but in fact they are not. Grover is still willing to sell the land, but
under these circumstances the deal would adversely affect Hank.
Refer to Fact Pattern 13-2. Because of the parties' belief about the adjacency of the
property, their contract is
a. unavoidable.
b. unconscionable.
c. unenforceable.
d. voidable.
Martha brings a suit against SafeCars, Inc. claiming that she was injured during a car
crash due to defects in the car she had purchased from SafeCars. There is no evidence
that Martha was injured in the accident, but the trial court awards her $1 million in
damages. SafeCars appeals the decision. The appellate court will most likely
a. not modify the trial court's finding of fact because appellate courts are forbidden to
look at questions of fact.
b. modify the trial court's finding of fact because the finding was clearly erroneous.
c. modify the trial court's finding of fact because the award amount was more than
$25,000.
d. modify the trial court's finding of fact because the award amount was less than $5
million.
Boutique Corporation would like to change its corporate status to that of an S
corporation to avoid income taxes at the corporate level. To qualify, the shareholders
must not be
a. corporations.
b. estates.
c. individuals.
d. partnerships.
Inadvertently, Bret leaves his briefcase at Chatty Caf when he stops for coffee and an
hour of Web surfing. The briefcase is
a. abandoned property.
b. bailed property.
c. lost property.
d. mislaid property.
Land includes all of the waters on or under its surface.
Generally, acceptance of an offer to lease goods may be made in any reasonable manner
and by any reasonable means.
The UETA does not require the use of security procedures to verify changes to
electronic documents and to correct errors.
The doctrine of commercial impracticability only extends to problems that are
unforeseen.
All international sales contracts should have a choice-of-language clause to designate
the official language by which the contract will be interpreted.
Very few states have limited the amount of damages that can be awarded in tort cases.
If a seller discovers that the buyer has received goods on credit and is insolvent, the
seller can only demand the return of the goods if he or she does so on the same day that
the buyer received the goods.
An electrical company can avoid liability for negligent maintenance of its lines if it has
an exculpatory clause in its contract.
Non-workers do not have a right to picket an employer during a strike.
In general, minors are personally liable for their contracts.
Foreign exchange markets comprise a worldwide system for buying and selling
currency.
Shareholders' meetings must occur at least annually.
If one of the wrongdoers in an illegal contract is unjustly enriched at the expense of the
other, the courts will usually require restitution.
Under the UCC, parties to sales and lease contracts are NOT free to establish whatever
terms they wish.
A seller does not have to provide a written warranty for consumer goods.
