Della, an officer for Energy Petrol Corporation (EPC), buys 100 shares of EPC stock.
One week later, EPC announces that it will merge with a competitor, Fuel Oil Company,
and the price of EPC stock increases. One month later, Della sells her shares for a
profit. Under Section 16(b) of the Securities Exchange Act of 1934, Della would not be
liable if, after buying the stock, she had waited
a. less than fourteen days to sell it.
b. more than six months to sell it.
c. ninety days to sell it.
d. two months to sell it.
A course of performance is the conduct that occurs under the terms of a particular
agreement.
a. True
b. False
Jenilee promises to pay Kyle $500 because “he does not have as much money as other
people. Jenilees promise is
a. enforceable because society wants people to keep their promises.
b. enforceable because the redistribution of wealth is a valid social goal.
c. not enforceable because Jenilee could have paid Kyle more.
d. not enforceable because Kyle has not given consideration in return.
Cow Country Corporation (CCC) sells half of its land to the Double R Ranch. On the
land is a reservoir. In the deed, CCC retains the right to remove a lim-ited amount of
water per day from the res-ervoir. This right is
a. a leasehold estate.
b. a license.
c. an easement.
d. a profit.
For an item to be characterized as a “good under the UCC, it must be intangible.
a. True
b. False
Jack promises to buy Lizettes used textbook for $60. Jack is
a. an executor.
b. an offeree.
c. a promisee.
d. a promisor.
Simone is a manager of Rolling Hills Resort LLC, a limited liability company. Rolling
Hills is formed in a state that does not explicitly create fiduciary duties for LLC
managers but does require the exercise of good business judgment. Unless a court rules
otherwise, Simone owes fiduciary duties to
a. Rolling Hillss members.
b. Rolling Hillss suppliers.
c. Rolling Hillss customers.
d. none of the choices.
Natures Products, Inc., sends its standard order form to Interbusiness Distribution
Corporation (IDC) to evidence a sale of packing materials. IDC responds with its own
standard purchase order form. Additional terms in the purchase order automatically
become part of the contract unless
a. the terms materially alter the original contract.
b. the original offer expressly required acceptance of its terms.
c. the offeror objects to the new terms within a reasonable time.
d. any of the choices.
The categorical imperative cannot be applied to many business actions.
a. True
b. False
On April 1 Richard arranges to buy a sixteen-speed bike from his neighbor Phil for
$500. Phil agrees to deliver the bike on May 1. Richard writes a draft for $500 payable
to Phil on May 1. In this situation, the draft is a
a. certificate of deposit.
b. time draft.
c. sight draft.
d. promissory note.
Dona downloads music into her computers random access memory, or RAM, without
authorization. This is
a. copyright infringement.
b. within Donas rights as a computer user.
c. a basis of liability for the computer maker if it does not act against Dona.
d. none of the choices.
Even-Bilt Construction contracts to build a warehouse for Discount E-Sales Company.
Even-Bilt completely performs. Discount E-Sales is entitled to
a. an accord.
b. rescission.
c. novation.
d. nothing more.
General Leasing Company (GLC) buys equipment for use as inventory, borrow-ing $1
million from Helpful Finance Corporation for a security in-terest in the equipment. The
next day, GLC borrows $500,000 from Interstate Bank, also for a security interest in the
equipment. GLC defaults on the loans.
Refer to Fact Pattern 19-1. Suppose that Helpful perfects its se-curity in-ter-est when
GLC takes possession of the equipment. In that cir-cum-stance, the party with pri-ority
to the collateral on GLCs default would be a. GLC
b. Helpful and Interstate proportionately.
c. Helpful only.
d. Interstate only.
Mineral Products Corporation, which owns no land, has a right to mine the copper from
Natural Resource Companys land. Minerals right is
a. a leasehold estate.
b. a license.
c. an easement.
d. a profit.
Saf-T Lenders, Inc., takes possession of Tiaras stock in Urgent Care Corporation to
perfect Saf-Ts security interest in the stock. This is
a. after-acquired property.
b. a pledge.
c. a purchase-money security interest.
d. a violation of most state laws.
The drawee who signs a draft or check is not primarily liable to any subsequent holders.
a. True
b. False
RiteMade Machinery, Inc., designs, makes, and sells a unique drillpress. Steel
Equipment Company copies the design without RiteMades permission. Steels conduct
is actionable provided that
a. consumers are confused.
b. Steels conduct is intentional.
c. Steels conduct reduces the value of RiteMades design.
d. RiteMades design is patented.
Giving an agent a power of attorney confers implied authority.
a. True
b. False
The right to cure is the right of a party who tenders nonconforming performance to
correct his or her performance within the contract period.
a. True
b. False
A landlord is usually required to give some period of notice to terminate a periodic
tenancy.
a. True
b. False
An express contract doesnotneed to be in writing.
a. True
b. False
A contract entered into under undue influence is voidable.
a. True
b. False
Absolute mandates such as the commandment “Thou shalt not steal can be justifiably
broken if there is a benevolent motive.
a. True
b. False
Specific performance is an equitable remedy requiring exactly the performance that was
specified in a contract.
a. True
b. False
In a general partnership, the acts of one partner in the ordinary course of business
subjects both the partner and the firm to liability.
a. True
b. False
Beef Burgers, Inc. contracts to buy five hundred steers from Fattening Feedlots. Before
Fattening Feedlots can deliver the steers, there is an outbreak of disease in the feedlot,
and all the cattle are quarantined. In this case the perfect tender rule
a. applies to both parties.
b. does not apply.
c. applies only to Beef Burgers.
d. applies only to Fattening Feedlots.
Under a dram shop act, liability can be imposed without proof of negligence.
a. True
b. False
Cotton Products Corporation is a public company whose shares are traded in the public
securities markets. The Securities Act of 1933 requires Cotton to disclose financial and
other significant information concerning its securities in order to
a. increase corporate accountability by imposing responsibility on chief corporate
executives.
b. prevent insiders from trading among themselves.
c. protect investors.
d. provide a ‘safe harbor for companies that make forward-looking statements.
An expression of opinion”this is perfect!is an effective offer as long as it is not made in
jest.
a. True
b. False
An employee can usually recover workers compensation for injuries occurring on the
commute to and from work.
a. True
b. False
A preemptive right is a preference over other shareholders to cast the determining vote
on fundamental changes affecting the corporation.
a. True
b. False
Omni Corporation provides cell phones, laptops, and tablets for its employees to use “in
the ordinary course of its business. Omni intercepts the employees business
communications made on these devices. This is
a. a violation of the rights of Omnis employees.
b. a matter for which Omni must obtain its employees consent.
c. a subject for dispute resolution by the communications providers that Omni uses.
d. excluded from the coverage of the Electronic Communications Privacy Act.
Divestiture of a business interest is a possible penalty under RICO.
a. True
b. False