Kailin owns a farm near Manhattan, Kansas, with a farmhouse, barn, and other
structures permanently attached. Kailin grows soybeans on the property. A pond lies
within the boundaries. Land includes
a. the pond, the soil, and the structures.
b. the pond and the soil only.
c. the soil only.
d. the structures and the soil only.
Fact Pattern 10-2
Haruko, who owns and operates Garden Orchard, agrees to sell Fresh Produce
Cooperative ten bushels of apples. Refer to Fact Pattern 10-2. When the market price
for apples exceeds the price in the contract with Fresh Produce, Haruko decides not to
deliver the apples. This
a. breaches the contract.
b. discharges the contract.
c. has no effect on the contract.
d. suspends the contract.
In Ben v. City Car Dealership, a state supreme court held that a minor could cancel a
contract for the sale of a car. Now a trial court in the same state is deciding Daphne v.
Even Steven Auto Deals, Inc.,, a case with similar facts. Under the doctrine of stare de-
cisis, the trial court is likely to
a. allow the minor the Daphne case to cancel the contract.
b. disregard the Ben case.
c. order the minor in the Daphne case to cancel the contract.
d. require the minor in the Daphne case to fulfill the contract.
Bob, research manager for CornAgri Products, Inc., applies utilitarian ethics to
determine that an action is morally correct when it produces the greatest good for
a. Bob.
b. CornAgri.
c. the fewest people.
d. the most people.
Fact Pattern 15-3
Mike loses his National Bank access card. He realizes his loss the next day but waits a
week to call National. Meanwhile, Opal finds and uses Mikes card to withdraw $3,000
from Mikes account.
Refer to Fact Pattern 15-3. Mike is responsible for
a. $0.
b. $50.
c. $500.
d. $3,000.
Pharma Company, Oral Meds Corporation, and Narco, Inc., are drug makers. Medico
Company and Lab Source, Inc., are drug distributors. In a suit against all of these
parties in which market-share liability is imposed, most likely to be liable are
a. neither the distributors nor the manufacturers.
b. the distributors and the manufacturers.
c. the distributors only.
d. the manufacturers only.
To finance the purchase of a car from Giant Auto Sales, Hoppy signs an instrument
promising to pay to “Ideal Credit Union $18,000 with interest in installments with the
final payment due May 15, 2014. To be negotiable, this instrument must include on its
face
a. any conditions on the sale of the car.
b. any conditions to the disbursement of the funds.
c. any conditions to the repayment of the loan.
d. no conditions.
Prime Equity Company extends credit in the ordinary course of its business to
consumers. Under the Truth-in-Lending Act, Prime must inform a prospective borrower
of
a. other lenders credit terms.
b. Primes credit terms.
c. Primes financial situation.
d. the borrowers credit score.
EZ Equipment Corporation leases six forklifts to Fresco Refining Company, but as the
forklifts are delivered, they are lost in an explosion. Under the UCC, the parties rights
and obligations with respect to the loss depend on the concept of
a. physical possession.
b. product liability.
c. risk of loss.
d. title.
Olga, a salesperson for Pre-owned Cars & Trucks, Inc., tells Quincy, “This is the best
car Ive ever seen. This statement is
a. an express warranty.
b. an implied warranty.
c. a warranty of title.
d. puffery.
Odell owns Payroll Company, a bookkeeping service losing market share to Quik Work,
Inc. Odell pays Remy $5,000 to steal a list of Quiks clients, to whom Odell will
aggressively market Payrolls 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.
Brad is an employee of Custodial Service, Inc. In deciding whether Brad acts within the
scope of his employment when he commits a tort against Didi, a court will not consider
whether
a. Brad indicated that he was acting on behalf of Custodial.
b. Custodial authorized the act.
c. Custodial furnished the means by which the injury was inflicted.
d. the act is one commonly performed by employees for their employers.
Midwest Agri-Products Corporation offers to sell its sugar substitute to Nice Candies,
Inc., only if Nice Candies agrees to buy all the corn it needs from Midwest
Agri-Products, even though there are other corn sellers from whom Nice Candies could
buy. This is
a. an exclusive-dealing contract.
b. a tying arrangement.
c. price discrimination.
d. a group boycott.
Cooks Pantry Appliances, a retail store, must use reasonable care on its premises to
warn its patrons of
a. all risks.
b. hidden risks.
c. obvious risks.
d. no risks.
Hi-Tech Company contracts to sell fiber optic cable to Internet Services, Inc. Hi-Tech
may bring an action to recover the purchase price and incidental damages if Internet
a. accepts the cable and pays for it.
b. accepts the cable but does not pay for it.
c. rejects the cable.
d. revokes acceptance of the cable.
Dan writes a check to Emma on his account at First State Bank. The bank dishonors the
check even though Dan has sufficient funds in his account. The bank is
a. liable to Dan only.
b. liable to Dan and Emma.
c. liable to Emma only.
d. not liable to Dan or Emma.
Kip writes a check for $1,000 drawn on Local Bank and presents it to Mira. Mira
presents the check for payment to Local Bank, which dishonors it. The party most likely
liable to Mira is
a. Kip in a civil suit.
b. Kip in a criminal prosecution.
c. Local Bank in an administrative proceeding.
d. neither Kip nor Local Bank.
Fact Pattern 15-2
Tom draws a check, on his account in State Bank in New York, payable to Digital
Media, Inc., in San Francisco. Digital deposits the check in its account at First National
Bank. First National deposits the check in the Federal Reserve Bank of San Francisco,
which transfers it to the Federal Reserve Bank of New York. That Federal Reserve Bank
sends the check to State Bank.
Refer to Fact Pattern 15-2. When Digitals bank received the check, it was required to
pass it on
a. before midnight of the next banking day.
b. before midnight of the next day, even if it was not a “banking day.
c. before noon of the next banking day.
d. within five business days.
Fact Pattern 7-1
Minka uses her computer to secretly install software on hundreds of personal computers
without their owners knowledge.
Refer to Fact Pattern 7-1. Each of the computers that Minka has appropriated and
installed software on is
a. a hacker.
b. a bot.
c. a botnet.
d. a worm.
Thelma signs a check “pay to the order of Uri drawn on Thelmas account in Verity
Bank. Thelma has $400 in her account but the amount of the check is $500, which the
bank pays. This is
a. a dishonored check.
b. an overdraft.
c. a postdated check.
d. a stale check.
Finn and Glenda want to form and do business as Hobby Crafts Corporation. A
corporation is a legal entity created and recognized by
a. a central federal administrative agency.
b. a city or county clerks office.
c. an artificial legal person.
d. state law.
In the ordinary course of business, Xtra Charge Company sells goods to Yvon and other
consumers on credit under installment sales contracts that typically require at least one
year of monthly payments. Xtra does not disclose all of the credit terms to its
customers. This practice is most likely to result in
a. a cease-and-desist order.
b. a fine.
c. no sanctions.
d. rescission of the contracts.
Patricia commits an act via e-mail against Othman Finance Company, a business in
California, where the act is a cyber crime. Patricia resides in New York where the act is
not a crime. Prosecution of Patricia in California involves questions of
a. jurisdiction.
b. “maximum contacts.
c. the immunity of Internet service providers.
d. encryption.
Rashad accesses Quant Companys computer system without authority to obtain
protected financial data. Under federal law, this is
a. a felony if it is committed for a commercial purpose.
b. a felony if Quant brings a civil suit against Rashad.
c. not a crime.
d. a crime, but not a felony.
Star Resorts Corporation wants to terminate its franchise arrangement with Tony. Their
contract does not provide for notice of termination or set a time for winding up the
business. This means that to wind up, Tony
a. has a reasonable time, with notice.
b. has whatever time A determines, with or without notice.
c. is entitled to notice, but nothing more.
d. must close immediately.
Cathy uses, on her new recording Drive By, the exact note-for-note melody of a song
written by Earl without his permission. This is
a. copyright infringement.
b. patent infringement.
c. trademark infringement.
d. a theft of trade secrets.
Elegant Carpets, Inc., and Fantastic Floors Stores enter into a contract for a sale of
carpeting. Under a shipment contract, the seller must
a. allow the buyer to reject the goods for any reason.
b. deliver the goods to a particular destination.
c. inspect the goods before shipping them.
d. place the goods into the hands of a carrier.
Loni, Michel, and Nita are investors in Oceanic Exploration, a business trust. A
business trust is managed by its
a. directors and officers.
b. general partners.
c. managing members.
d. trustees.
GR8 Marketing Company and Hot Tunes, Inc., sign a document that states GR8 agrees
to create a marketing campaign for Hot and Hot agrees to pay GR8 for the service. GR8
and Hot have
a. an executed contract.
b. an express contract.
c. an implied-in-fact contract.
d. a quasi contract.
A suit is filed against Maxi Corporation, alleging that the firm committed the offense of
monopolization. To determine whether Maxi has monopoly power requires looking at
a. only Maxis size.
b. only the relevant geographical market.
c. only the relevant product market.
d. the relevant geographical market and the relevant product market.
To resolve a dispute, Amy in Boston and Chris in Denver utilize E-Solution, an online
dispute resolution (ODR) service. This limits these parties recourse to the courts
a. not at all.
b. until the ODR service has issued a decision.
c. with respect to any dispute arising between them.
d. with respect to this dispute only.
A personal name is not protected under trademark law unless it acquires a secondary
meaning.
In the United States, a patent is given to the first person to file for it.
A coinsurance clause provides that two or more people will be covered by the same life
insurance policy.
Financial institutions that exchange digital images of checks do not have to exchange
the original paper checks.
It is not a crime to defraud the public through the use of ads on television.
A tenant is not responsible for the ordinary wear and tear of leased premises.
Impersonating a victim to make provocative comments online is vishing.
The First Amendment does not protect commercial speech as extensively as
noncommercial speech.
Currently, it is not clear which, if any, laws apply to the security of e-money payment
information.
A corporation whose security does not qualify for an exemption can avoid the cost and
complexity associated with registration.
Corporations can be good citizens by promoting goals that society deems worthwhile.
Charging different prices to different buyers for identical goods is price discrimination.
The UCC imposes the same rules of conduct on all parties in all circumstances.
Venue is the term for the subject matter of a case.
A contract must be in writing to be enforceable unless its performance is impossible
within one year.
When the drawee of an unaccepted draft or check pays to a holder the amount due in
full, all parties to the instrument are discharged.
A state law that places a significant burden on religion is unconstitutional.
Overestimating the value of an object is a mistake for which a court will normally
provide relief.