A check carries with it an implied promise to reimburse the bank for paying the check.
A warranty deed provides the most protection against defects of title.
Service of process is the process of obtaining information from an opposing party
before trial.
Specific performance is the remedy customarily used when one party has breached a
contract for a sale of land.
Securities of charitable organizations are not exempt from the registration requirement
of the 1933 Securities Act.
An action may be legal but not ethical.
A license is the revocable right of a person to come onto another person’s land.
An offer to form a bilateral contract is accepted only by completing the contract
performance.
Normally, a dissociated member of a limited liability company (LLC) has the right to
have his or her interest in the LLC bought by the other members.
If a customer’s debit card is lost or stolen, the customer will not be liable for any
unauthorized use of the card.
A contract between parties residing in different countries is subject to Article 2A of the
UCC.
A forum-selection clause indicates the place for the resolution of a dispute arising under
a contract.
A contract for an international business deal should specify the currency in which
payment is to be made.
Willful violations of the Sarbanes-Oxley Act of 2002 may be subject to criminal
prosecution.
The concept of a floating lien does not apply to a shifting stock of goods.
A product is unmerchantable if an accident could arise in connection with the goods.
A corporation whose security does not qualify for an exemption can avoid the cost and
complexity associated with registration.
Overestimating the value of an object is a mistake for which a court will normally
provide relief.
False imprisonment occurs when a person restrains another intentionally and without
justification.
In many states, an operating agreement is not required for a limited liability company to
exist.
A federal case typically originates in a federal district court.
A nuncupative will is a will that is completely in the handwriting of the testator.
Performance that provides a party with most of the benefits of a contract, in spite of a
deviation from the terms, is complete performance.
Administrative agencies are established to perform specific functions.
Inadequate consideration may indicate undue influence.
If goods fail to conform to a contract in any way, the buyer or lessee must reject them.
The Securities Exchange Act of 1934 provides for continuous, periodic disclosures by
publicly held corporations.
Certain employers must provide their employees with up to twelve weeks of family or
medical leave during any twelve-month period.
To have standing to sue, a party must have been harmed or have been threatened with
harm by the action about which he or she complains.
Contracts that are executory on both sides can be rescinded by agreement.
Filing a financing statement with the appropriate public office is the only way to perfect
a purchase-money security interest in consumer goods.
The Uniform Partnership Act governs the operation of partnerships.
Because insurance law follows contract law, bad faith tort actions against insurers are
not allowed.
One requirement for a product liability suit based on strict liability is a failure to
exercise reasonable care.
A borrower has the right to purchase the property after default by paying the full
amount of the debt, plus any interest and costs that have accrued.
If there is a statute that prohibits a certain action, a contract to do it is unenforceable.
An instrument is not defective because it has been previously dishonored.
Under the principle of comity, a foreign business that deals with a U.S. business may be
subject to U.S. law.
An agency relationship may be created for any legal purpose.
Good Tire Company and Hiway Auto Service enter into a contract for a sale of tires.
Good Tire is a merchant who deals in goods of the kind sold. Under the UCC, an
implied warranty of merchantability arises
A.automatically in sales contracts.
B.only if the buyer asks for it.
C.only if the seller does not expressly disclaim it.
D.only in conjunction with lease contracts, not sales contracts.
Wisconsin, like other states, may regulate private activities to protect or promote the
public order, health, safety, and general welfare under its
A.police powers.
B.taxing powers.
C.spending powers.
D.supreme powers.
Wanda tells Vito that she would like to buy his Chocolate Goodies store. Vito declines,
but later decides to sell and sends to Wanda, and others, a flyer describing the details.
Wanda responds with a letter of “acceptance.” Wanda and Vito have
A.a contract.
B.no contract, because Vito sent the letter to more than one party.
C.no contract, because Vito was only inviting bids.
D.no contract, because the letter was an invitation to negotiate.
Riverview Bank makes a mortgage loan of $95,000 to Pomeroy to buy a home. Under
federal law, if Riverview fails to provide certain material disclosures with respect to the
loan, Pomeroy’s right to rescind the loan
A.expires at midnight on the day the loan is finalized.
B.is canceled immediately.
C.is extended for up to three years.
D.is tolled for the duration of the mortgage payments.
RockStar Software, Inc., develops a new series of performance-related video games.
This software is most likely protected by
A.copyright law.
B.patent law.
C.trademark law.
D.trade secrets law.
Sid borrows Tony’s paint sprayer to paint his house. Uma allows Vic to store his
posthole digger in her shed. The party with a right to use the bailed property is
A.neither Sid nor Uma.
B.Sid and Uma.
C.Sid only.
D.Uma only.
According to the court in the Media General Operations, Inc. v. National Labor
Relations Board case, in determining whether a discharge for an employee’s “outburst”
in violation of a workplace rule violates the NLRA, significant factors include
A.the ability of the employee to obtain employment elsewhere.
B.the nature of an employee’s outburst.
C.the sensitivity of those who witness the outburst.
D.the specific phrasing of the rule.
In relation to Edie’s solicitation of investors in a nonexistent business, she is charged
with “mail fraud.” This requires, among other things,
A.claiming that an item is “in the mail” when it is not.
B.deceiving postal authorities as to the content of an item of mail.
C.depositing items in the postal system without proper postage.
D.mailing or causing someone else to mail a writing.
Nate tells Opal, “I might sell the skis that I bought last fall since I haven’t used them
and the skiing season is almost over.” This is
A.an acceptance of an offer.
B.an invitation to accept an offer.
C.an offer.
D.a statement of future intent.
Yvon asks Zac, “Do you want to buy one of my fishing rods?” This is
A.a valid offer.
B.not a valid offer because the terms are not definite.
C.not a valid offer because Yvon did not state an intent.
D.not a valid offer because Zack did not respond.
Felicity and Gideon want to form and do business as Home Healthcare Corporation. A
corporation is
A.a natural being.
B.a tangible thing.
C.an artificial person.
D.a visible radiance.
Moby, a resident of New Jersey, has an accident with Ogden, a resident of New York,
while driving through that state. Ogden files a suit against Moby in New York.
Regarding Moby, New York has
A.federal question jurisdiction.
B.in personam jurisdiction.
C.in rem jurisdiction.
D.no jurisdiction.
Rex, an accountant, enters into a contract to provide services to Sofi. Rex does not
finish the work within the contract’s deadline. Sofi pays a penalty as a result of the
missed deadline and hires Trey to complete the job. Rex is most likely liable for
A.nothing.
B.Sofi’s penalty and the cost to hire Trey.
C.Sofi’s penalty only.
D.the cost to hire Trey only.
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.
Oscar is Precise Service Company’s chief executive officer. On Precise’s behalf, Oscar
solicits business, hires and fires workers, and handles the finances. Precise pays Oscar
varying amounts, depending on his “needs.” Oscar is most likely
A.a principal.
B.an employee.
C.an employer.
D.an independent contractor.
Juli types onto a computer what she intends to be “My Will” and prints it out. Juli has
capacity. “My Will” is
A.invalid.
B.valid if Juli signs it.
C.valid if Juli signs it and has three witnesses sign it.
D.valid if Juli signs it, has three witnesses sign it, and files it in a certain state office.
Unicameral Production, Inc., files for bankruptcy. Vance, Unicameral’s bankruptcy
trustee, wants to recover a transfer that Unicameral made to Wisconsin State University
(WSU) less than ninety days earlier. WSU asserts its sovereign immunity. Under the
majority’s holding in Central Virginia Community College v. Katz, the party most likely
to prevail in this situation is
A.both Vance and WSU.
B.neither Vance nor WSU.
C.Vance.
D.WSU.
John is sales manager for Kleen ‘N Brite Products, Inc. Compared to John’s personal
activities, his business activities most likely involve
A.more complex ethical issues.
B.no ethical issues.
C.simpler ethical issues.
D.the same ethical issues.
To raise $12 million to expand operations, Star Corporation makes a stock offering
directly to sixty accredited investors and twenty sophisticated, but unaccredited
investors. Star plans to notify the SEC of sales. Under the Securities Act of 1933, this
issue may qualify as an “exempt” transaction
A.as is.
B.if all of the investors are also given certain material information.
C.if the offering is also made available to the general public.
D.under no circumstances.
LaDonna signs a one-year lease with Mae to occupy an apartment in Ames, Iowa, near
the University of Iowa. LaDonna needs the apartment only for two semesters and may
have to sublet it for the rest of the term. LaDonna’s tenancy is
A.a periodic tenancy.
B.a tenancy at will.
C.a tenancy by the entirety.
D.a fixed-term tenancy.
In a dispute over a sale involving a bicycle, Dain argues that as to this deal Elle’s Hobby
Shop, where Dain bought the bike, is a merchant. A court may determine whether Elle’s
is a merchant by assessing whether
A.it has sold any bikes within the last year.
B.it holds itself out by occupation as having knowledge or skill unique to the bike in the
transaction.
C.its owner enjoys biking.
D.it subscribes to Bike, a biweekly trade magazine.
Boyd is a minor. As a minor, Boyd has the capacity to enter into
A.an invalid contract.
B.an unavoidable contract.
C.a valid contract.
D.no contract.
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.
Marquis Company’s liabilities exceed its assets, but the firm’s employees falsify its
books to reflect a positive net worth. Marquis hires Nan & Ollie, an accounting firm, to
prepare a balance sheet, which is certified to show a positive net worth. Pure Credit
Corporation relies on the balance sheet to make a loan to Marquis. When the firm
defaults, Pure Credit files a suit against Nan & Ollie. Under the Ultramares rule, the
accounting firm is most likely
A.liable because Nan & Ollie owed a duty of care to all third parties.
B.liable because Nan & Ollie owed a duty of care to Marquis.
C.liable because Nan & Ollie owed a duty to any foreseeable user.
D.not liable because Nan & Ollie and Pure Credit were not in privity.
Mary, who is charged with a crime, claims that Nick, a government agent, entrapped
her. For entrapment to be a valid defense
A.Mary must not have been predisposed to commit the crime.
B.Nick must have pressured Mary into committing the crime.
C.Nick must have suggested that the crime be committed.
D.all of the choices.
Liberty Bank provides Michelle with a standard mortgage with an unchanging rate of
interest to buy a home. Payments on the loan remain the same for the duration of the
mortgage. This is
A.a fixed-rate mortgage.
B.an adjustable-rate mortgage.
C.an interest-only mortgage.
D.a violation of the law.
Frank slips and falls on Guy’s Harbor Tour Boat and is injured. Frank files a suit against
Guy’s for $500,000. If Frank is 20 percent at fault and Guy’s is 80 percent, under the
“50 percent rule” comparative negligence principles, Frank would recover
A.$0.
B.$250,000.
C.$400,000.
D.$500,000.
Gas Up, Inc., designs, makes, and sells a fuel injection system that copies Hybrid
Corporation’s design without Hybrid’s permission. This is most likely
A.copyright infringement.
B.patent infringement.
C.trademark infringement.
D.a theft of trade secrets.
Chocolate Chip Cookie Corporation (4C) obtains, and gives its employees, a list of the
customers of Sugar & Spice Sales, Inc. (3S). Under the law that applies to trade secrets,
4C’s conduct is actionable provided
A.consumers are confused.
B.4C’s conduct is intentional.
C.4C uses the list.
D.4C does not have 3S’s permission to use the list.
Capital Properties. Inc., and Broadview Corporation enter into a contract for a sale of
land. To be enforceable, the contract must be in writing if the land is valued at
A.$50.
B.$500.
C.$5,000.
D.any price.
Orin creates a living trust to pass his assets, including stock in Petro Oil Company and
other business investments, to his heirs. One advantage of this arrangement is that
A.income taxes do not have to be paid on trust earnings.
B.the assets are sheltered from the payment of estate taxes.
C.the assets can be transferred without going through probate.
D.the trust does not come into existence until the grantor’s death.
North American Properties, Inc., and its officers, directors, and shareholders, buy and
sell securities. Section 16(b) of the Securities Exchange Act of 1934 covers
A.all purchases and sales of securities.
B.only purchases and sales of securities involving misappropriation.
C.only purchases and sales of securities involving short-swing profits.
D.only purchases and sales of securities involving tippers and tippees.