Bret buys a franchise from Comida Mexicano Ltd. If their agreement is like most
franchise agreements, it will specify that Comida can terminate the franchise
a. at will.
b. for any reason.
c. for cause only.
d. for no reason.
Edy obtains a property insurance policy with First Source Insurance Company for Edy’s
fishing trawler. 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 trawler’s value.
d. under no circumstances.
Two Japanese firmsMikato, Ltd., and Shuzushi, Ltd.enter into a joint venture in an
attempt to increase their market share of the U.S. auto market. If the joint venture is not
a per se violation of U.S. antitrust laws, a U.S. court could exercise jurisdiction over the
firms
a. if the joint venture has a substantial effect on U.S. commerce.
b. if the joint venture has any effect on U.S. commerce.
c. if the joint venture was entered into in the United States.
d. under no circumstances.
Duffy and Elbert agree to hijack a truck carrying a load of pecans. If Duffy later refuses
to go through with the crime, Elbert can
a. enforce the agreement.
b. obtain damages from Duffy in the amount of Duffy’s probable share of the illegal
profits.
c. recover in quasi contract for the loss of his share of the illegal profits.
d. do nothing.
Mitch and Nadine enter into a contract for a sale of seventy-six specially made motion
detectors. When Nadine does not deliver within a reasonable time after the agreed
delivery date, Mitch files a suit for breach. Nadine asserts the doctrine of commercial
impracticability. This doctrine extends only to problems that are
a. foreseen.
b. preventable.
c. unforeseen.
d. ordinarily assumed by a seller or lessor.
24-Hour Credit Corporation issues high-cost and high-fee mortgage products to people,
including Benny, who could not easily obtain credit under other loan programs.
Under federal law, disclosures with respect to one of 24-Hour Credit’s loans must be
provided
a. a certain number of days after the loan is finalized.
b. a certain number of days before the loan is finalized.
c. at the same time at which the loan is finalized.
d. at whatever time is most rational and appropriate.
Ranchland Properties and Prairie State Investments sign a written contract for a sale of
land. In some states, to be enforceable, this contract must include
a. a correct title, such as “Land Transfer” or “Real Estate Agreement.”
b. a declaration of the contract’s purpose.
c. a statement of the source of financing.
d. a description of the land.
Tory borrows $10,000 from USA National Bank to remodel a room in her home. This
transaction is subject to
a. no federal law.
b. the Consumer Leasing Act.
c. the Consumer Product Safety Act.
d. the Truth-in-Lending Act.
Kari, a real estate agent, assures Linc that a certain parcel of commercial property fronts
on the most highly trafficked street in Metro City. Linc buys the property and then
discovers that the street has no more traffic than any other in its vicinity. Linc is most
likely a victim of
a. opinion.
b. fraud.
c. mistake.
d. nothing.
Dave’s uncle tells Dave that if “he feels that Dave deserves it,” he will give Dave
$1,000 when Dave graduates from college. Dave’s uncle’s promise is
a. illusory.
b. enforceable.
c. a forbearance.
d. a preexisting duty.
Doug agrees with Elinor to sell methamphetamine to patrons of Elinor’s nightclub
Garden of Eden for 25 percent of the take. Doug sells the drugs but keeps all of the
money. Elinor can
a. recover her share of the money only if she did not aid in the crime.
b. not enforce the deal.
c. recover the total amount of the sales.
d. recover her costs but none of the illegal profit.
Otis is interested in buying a franchise from Plentiful Inc. This transaction, like other
franchise deals, is regulated to protect
a. certain types of anticompetitive agreements.
b. franchisors from dishonest prospective franchisees.
c. prospective franchisees from dishonest franchisors.
d. the government’s power to restrict freedom of contract.
To raise capital to form Plasticity Corporation with Quinn, Rona sells bonds and stock
in other companies, and plans to register an initial public offering under the Securities
Act of 1933. SEC Rule l0b-5 covers
a. most forms of securities.
b. only bonds.
c. only securities registered under the Securities Act of 1933.
d. only stock.
Freight Transport Company is subject to a decision by the National Labor Relations
Board. Freight Transport appeals the decision, arguing that it is arbitrary and capricious.
This could mean that the decision
a. followed a consideration of legally appropriate factors.
b. justifiably changed the agency’s prior policy.
c. was accompanied by a rational explanation.
d. was plainly contrary to the evidence.
Noni and Myra enter into a contract for a sale of clarinets and other wind instruments.
Noni does not deliver. Myra can normally recover as damages the difference between
a. any loss avoided and any profit gained.
b. the actual price and the hoped-for price.
c. the contract price and the market price.
d. the current prices in the parties’ locations.
Fiona owns one share of stock in SK8 Boards Corporation, as evidenced by a stock
certificate. Fiona loses the certificate. Her ownership of the stock is
a. forfeited immediately.
b. forfeited within ten days of a third party’s claim to ownership.
c. forfeited within thirty days if she cannot find the certificate.
d. not affected.
Briana, an employee of Cotillion Bank, is charged with embezzlement, which requires
a. fraudulently appropriating another’s property.
b. obtaining lawful possession of property.
c. physically taking property from its owner.
d. the use of force or fear.
Filtration Products, Inc., files a suit against Emmett, its former accountant, alleging
constructive fraud. Emmett may be held liable
a. if Filtration cannot prove actual fraud.
b. if Emmett was grossly negligent in the performance of his duties.
c. only if Emmett acted with fraudulent intent.
d. only if Emmett impersonated someone else who could be liable for fraud.
Sandy, a resident of Illinois, wants to file suit against Carl, a resident of Kansas, over
Carl’s failure to pay Sandy for work on his house. The amount in dispute is $15,000.
Under diversity of citizenship requirements
a. no court can exercise jurisdiction.
b. a state court cannot take jurisdiction because the amount in controversy is less than
$25,000.
c. a federal court cannot take jurisdiction because the amount in controversy is more
than $10,000.
d. a federal court cannot take jurisdiction because the amount in controversy is less than
$75,000.
Kirk receives an unsolicited credit card in the mail and tosses it on his desk. Without
Kirk’s permission, his roommate Leif uses the card to buy a new laptop for $1,800. Kirk
is
a. liable for $1,000.
b. liable for $500.
c. liable for $50.
d. not liable for any amount.
Marco and Fred enter into a contract for the sale of Marco’s apartment for which Fred
agrees to pay him $100,000. Marco cannot prohibit Fred from transferring his right to
the ownership of the apartment because such a prohibition is
a. against public policy.
b. immoral.
c. unconscionable.
d. a crime.
Devon and Edmond enter into a contract for the closing of a sale of Devon’s recording
studio. When Edmond’s schedule conflicts, he asks Ferdie to perform his duties at the
closing. This transfer of duties is
a. a delegation.
b. an assignment.
c. prohibited.
d. a negotiation.
Red’s Plumbing Service substantially performs its contract with Shady Grove
Condominiums, Inc. Shady Grove is entitled to
a. damages.
b. nothing more.
c. repudiation.
d. alteration.
Philip is elected as a director for Fatless Foods, Inc. His term of office will most
probably last for
a. three months.
b. six months.
c. nine months.
d. one year.
In business deals, Fiona, the chief executive officer of Snacks n” Bites, Inc., follows
duty-based ethical standards. These are most likely derived from
a. a corporate ethics code.
b. a cost-benefit analysis.
c. philosophical reasoning.
d. the law.
Dom, an EZ Baked Goods salesperson, follows Flora, a salesperson for Goody Pastries,
Inc., as she attempts to make sales to food stores. Dom solicits each of Flora’s
customers. Dom is most likely liable for wrongful interference with a
a. bargaining relationship.
b. business relationship.
c. contractual relationship.
d. customer relationship.
The payment of Hu’s debt to Ian is guaranteed by Hu’s personal property. To give notice
of his interest in Hu’s property to other creditors, Ian is most likely to
a. attach a bright label to Hu’s property.
b. e-mail other potential creditors.
c. file a financing statement with the appropriate authority.
d. publish a collection notice in local newspapers.
Neverend Music Company and Monotonous Metronome Corporation form a joint stock
company. A joint stock company can be formed for, at the most,
a. an implied duration of not more than six months.
b. a perpetual existence.
c. a single activity or transaction.
d. a stated duration of not more than one year.
Davis points a gun at Eton, threatening to shoot him if he does not steal from his
employer, Freddy’s Convenience Store, and give the stolen funds to Davis. Charged
with theft, Eton can successfully claim, as a defense
a. nothing.
b. duress.
c. entrapment.
d. self-defense.
Ben allows Cody to store his trailer on Ben’s property for $20 a month while Cody is
out of town on a job for Plains States Sales, his employer. The bailor is
a. Ben.
b. Cody.
c. Plains States.
d. no one.
Lou uses undue influence to induce Mona to sign a contract to invest her student loan
funds in National Overseas Bank. Mona may
a. avoid the contract or choose to carry it out.
b. do nothing once she has signed the contract.
c. recover from her lender for a failure to influence her “due.”
d. recover from the bank for a failure to undo Lou’s influence.
When a sale of assets amounts to what in fact is a consolidation, the acquiring
corporation inherits the selling corporation’s liabilities.
Counterfeiting is robbery.
Property voluntarily placed by its owner and inadvertently forgotten is mislaid property.
A merger and a consolidation are not two legally distinct proceedings.
There are no exceptions to the writing requirement of the Statute of Frauds.
The term cure refers to the right of the buyer to reject, adjust, or replace nonconforming
goods.
Requirements contracts are common in the business world and normally are
enforceable.
State constitutions are supreme within their respective borders.
One goal of bankruptcy law is to protect a debtor.
Prepayment penalties are severely restricted for a higher-priced mortgage loan.
The agreement resulting from a buyer clicking on a box containing the words “I agree”
is known as a click-on agreement.
When rights under a contract are assigned unconditionally, the rights of the assignor are
extinguished.
Under the Americans with Disabilities Act of 1990, an employer must hire unqualified
applicants who have disabilities.
A corporation does not possess the same right of access to the courts as natural persons.
A novation occurs when there is a substitution, by agreement, of a new contract for an
old one, with the rights under the old one being terminated.
EthicsPoint is an organization through which employees can report unethical behavior
as long as they are willing to identify themselves.
A tariff is always a flat rate per unit.
Under the UCC, if a contract is unilateral, the offeror must be notified of the offeree’s
performance.
In a limited partnership, a general partner’s dissociation from the firm may lead to
dissolution.
Like a corporation, the ownership of a joint stock company is represented by shares of
stock.