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Wedney, Inc. sold a meat processing machine to Yoro Chickens, taking a security
interest in the machine. Yoro Chickens defaulted on the loan. Wedney repossessed the
machine. Wedney would like to retain the machine to use as a model. Which of the
following statements is correct?
a. Wedney must notify the debtor that it intends to retain the machine and give Yoro 20
days to object.
b. By taking possession, Wedney automatically foreclosed on the collateral. Wedney has
valid title and need do nothing else.
c. Since the machine is equipment, Wedney cannot retain the machine. Wedney must
dispose of the collateral in a commercially reasonable manner.
d. Wedney can retain the machine but must pay Yoro the surplus, the difference between
the fair market value of the machine and the amount of the debt.
In 1992, the North Carolina Supreme Court ruled in a case entitled Goodman v. Wenco
Foods, Inc., that when a substance in food causes injury to a consumer of the food, it is
not a bar to recovery against the seller that the substance was natural to the food. If, in a
2008 case involving a consumers injury caused by a fish bone in a bowl of fish
chowder, the court followed the decision in Goodman v. Wenco Foods, Inc., the court's
action in the second case is an example of:
a. stare decisis.
b. statutory law.
c. public law.
d. criminal law.
Exec-Pac, Inc. is extremely opposed to having its employees organize. The union
attempting to organize a collective bargaining unit filed an unfair labor practices claim
with the National Labor Relations Board (NLRB), alleging that Exec-Pac illegally
interfered with its unionization drive. The NLRB, convinced that an election would be
pointless, waived the requirement of an election and certified the union as the exclusive
representative of Exec-Pac's workers. Which statement is correct?
a. The NLRB had to be convinced that the employer's interference with the union's
attempt to organize the workers was outrageous.
b. The NLRB has the authority to waive the requirement of a union election if it
believes the employer has shown anti-union bias.
c. The NLRB may waive an election if the employer has distributed written materials
stating it is opposed to a union.
d. None of the above.
A college professor copies seven chapters from a book called "How to Get Better
GradesA Creative Approach to College Success!" There are ten chapters in the book.
She incorporates this material into a packet of material that is printed in her college's
copy center. The packet is then placed in the local book store and is placed on the
required materials list for students to purchase. The author of the book on getting better
grades believes the professor has violated his copyright.
a. The author is right. The professor should not have copied the chapters and placed
them for sale in the bookstore.
b. The author is technically correct. However, even though an infringement occurred, he
cannot sue the professor since educational personnel are exempt from liability under
copyright law.
c. The author is not correct. Under the "fair use doctrine" a college professor can copy
material and distribute it to students for educational purposes.
d. The author is not correct. It does not appear that the professor actually made any
money from the alleged copyright infringement.
When Angelena was shopping for a new lawn mower, the salesman, Mark, told her the
model she was interested in cuts an 18 swath and the only maintenance it needs is an oil
change and a new sparkplug at the beginning of each mowing season. He hands her a
warranty booklet which describes that model as a mulching mower and says it has a
five-year full warranty. The booklet also disclaims "any warranties or statements made
by any agent or salesperson or that appear elsewhere in this booklet. The effect of the
written disclaimer is:
a. that it is valid to disclaim only the written warranties within the booklet.
b. that it is valid to disclaim both oral and written warranties.
c. it does not disclaim either the oral or written warranties.
d. that it disclaims the oral warranties, but not the written warranties.
The intent of the offeror to extend an offer to the offeree is generally determined by
reference to:
a. the beliefs of the offeror.
b. the subjective intention of the offeror.
c. the assumptions of the offeror.
d. the words and conduct of the offeror.
In order to disclaim a warranty of fitness for a particular purpose, a merchant:
a. need do nothing; such a warranty will not exist unless the merchant intends to create
the warranty.
b. must make the disclaimer orally and directly to the buyer.
c. may disclaim the warranty with any language that is clear and conspicuous.
d. None of the above. Implied warranties cannot be disclaimed.
Debra and Lawrence have an equal partnership. This year, after expenses, the
partnership had a profit of $200,000. Debra and Lawrence will each pay taxes on:
a. whatever they receive from the partnership.
b. $50,000.
c. $100,000.
d. None of the above. The partnership itself will pay the taxes on the businesss profit.
The difference between the UCC requirement of good faith and doctrine of
unconscionability is that:
a. good faith prohibits shockingly one-sided terms in a contract.
b. good faith focuses on the parties' behavior as they perform the contract.
c. unconscionability looks at the parties' attempt to carry out the terms of the contract in
a reasonable manner.
d. unconscionability focuses on whether a party is honest in fact and exercises
reasonable commercial standards of fair dealing.
The Fair Labor Standards Act:
a. wage provisions do not apply to professional or managerial employees.
b. limits the number of hours an employer can require a person to work in any given
week.
c. does not apply to children.
d. preempts any state wage regulation.
Longs Department Store contracted to buy 1,000 drop-waist velour dresses in heather
gray from Durham. Subsequently, Durham called and asked to ship mink-colored
dresses instead of heather gray. Long agreed, in writing, to the change. Which statement
is correct?
a. The modification is not enforceable since there was no consideration for the change.
b. The modification is not enforceable since the parties are merchants.
c. The modification is enforceable.
d. Whether the modification is enforceable depends on the gap-filler rule.
An express warranty can be created by which of the following?
a. An affirmation of fact or promise.
b. A description.
c. A model.
d. All of the above.
Generally accepted accounting principles are the rules for preparing financial
statements.
The Clayton Act prohibits anti-competitive mergers.
If directors serve on the boards of multiple corporations, the executives of those
corporations are less likely to be overpaid.
Char-Glo Industries contracted with Evergreen Lawn Service to mow and trim the
companys lawn. In the contract, Char-Glo included a clause prohibiting Evergreen from
delegating its duties. Courts will ordinarily not enforce such a clause.
If Velma, as a birthday present, assigns to Jim her contractual right to collect $50 from
Wood Co., this would be a gratuitous assignment.
Lian contracted for financial services from E-wise. This contract is governed by Article
2 of the UCC.
Gary, Louise, and Brian, who own competing gas stations in town, happen to see each
other at a restaurant one morning and have breakfast together. While talking, they
decide to set their gas prices at the same amount. They have committed an illegal act
only if the agreed price is unfair to consumers.
Derrick buys a CD, but after listening to it, decides he doesnt like the music. May he
legally sell the CD to someone else? If he thinks his cousin would enjoy the music,
may he legally copy the CD for her?
It is not a violation of United States law for a domestic company to pay money to a
foreign governmental official in order to obtain a contract with the foreign government
if this type of "commission is commonly paid in that foreign country.
On March 1 Donna wrote a check for $296 to Sun Services. When will the check be
overdue? What is the effect of the checks being overdue? What is the effect if the check
is stamped "Insufficient Funds by Donnas bank?
Personal and real defenses are valid against an ordinary holder, only real defenses can
be used against a holder in due course.
Commercial paper is a contract to pay money.
What are some of the advantages for a business to incorporate in Delaware?
The "takings clause" prevents the government from taking private property for any
reason.
Every criminal defendant has a right to a jury trial.
Opinion is generally a valid defense in a defamation lawsuit because it is not meant to
be a factual statement.
You leave your watch with Bryte Jewelers for repair. Bryte could not transfer ownership
interests in the watch to a customer of the jewelry shop without your permission.
