Seaside Cannery, Inc., is one of many producers of canned seafood. Seaside refuses to
sell its products to Port Harbor Restaurant Corporation. This refusal is most likely
a. an anticompetitive practice in violation of the Clayton Act.
b. a per se violation of the Sherman Act.
c. a violation of the Sherman Act under the rule of reason.
d. not a violation of antitrust law.
Special Roast Coffee, Inc., processes and sells a variety of coffee products. Special
Roasts product packages must include
a. neither the contents net quantity nor the products identity.
b. the contents net quantity and the products identity.
c. the contents net quantity only.
d. the products identity only.
Rafe is interested in buying a franchise from Sportz Rulez Company. In this transaction,
the Federal Trade Commissions Franchise Rule
a. does not apply.
b. enables Rafe to weigh the deals risks and benefits.
c. enables Sportz Rulez to weigh the deals risks and benefits.
d. prohibits certain types of anticompetitive agreements.
Quotient Financial Corporation is a secured party with a security interest in property
owned by Retail Sales Company. Perfection of this security interest may not protect
Quotient Financial against the claim of
a. a bank.
b. a buyer in the ordinary course of business.
c. a subsequent lien creditor.
d. a trustee in bankruptcy.
Overnight Delivery Service delivers a package to Pam. At the request of Overnights
delivery person, to acknowledge receipt Pam signs a digital pad. This signing creates
a. a cybernotarized signature.
b. a digitized handwritten signature.
c. an asymmetric cryptosystemic signature.
d. a public-key infrastructure digital signature.
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.
Yoko, Ltd., and Zeno, S.A., transact an international sale of goods. For these parties,
and other international buyers and sellers, the United Nations Convention on Contracts
for the International Sale of Goods spells out the duties that apply
a. if Article 2 of the Uniform Commercial Code does not apply.
b. if a dispute is submitted to the International Court of Justice.
c. if the parties have not agreed otherwise in their contracts.
d. under all circumstances.
Commercial Development Corporation (CDC) hires Delta Construction Company to
work at a site as an independent contractor. Whether CDC will be liable for torts
committed at the site by Delta depends on
a. what Delta bid for the job.
b. whether exceptionally hazardous activities are involved.
c. which party obtained insurance to cover tort liability.
d. who is paying Delta.
Gourmet Foods, Inc., requires all distributors of its products to sell them at a specified
minimum price. Under the Sherman Act, this is a violation
a. if the anticompetitive effects outweigh the competitive benefits.
b. if the competitive benefits outweigh the anticompetitive effects.
c. under any circumstances.
d. under no circumstances.
The legislature of the state of Missouri enacts a new statute that sets standards for the
liability of businesses selling defective products. This statute applies
a. only in Missouri.
b. only in Missouri and its border states.
c. in all states.
d. in all states but only to matters not covered by other states laws.
Page points a knife at Rays daughter, threatening to hold her hostage and “cut her unless
Ray takes a certain file from Skelter Supplies Corporation, his employer. Charged with
theft, Ray can successfully claim as a defense
a. insanity.
b. duress.
c. entrapment.
d. self-defense.
Bret obtains a fire insurance policy on his rental house with Continental Insurance
Company. Like all insurance, this policy is an arrangement for
a. avoiding the assumption of responsibility.
b. predicting a potential loss based on unknown factors.
c. shifting the imposition of liability.
d. transferring and allocating risk.
Dreem Land Corporation and EZ Investments Company transfer their property to
Financial Managers, Inc., which manages the property and distributes the profits to
Dreem and EZ. This form of a business organization is
a. a business trust.
b. a joint stock company.
c. a joint venture.
d. a syndicate.
Alaskan salmon that fill the hold of Bill and Carlas fishing boat are fungible if the
salmon are
a. alike naturally or by agreement or trade usage.
b. fundamentally different.
c. fun, good, and edible.
d. liable to deteriorate over time.
Fact Pattern 3-1
Java Cafes, Inc., and Kaffe Import Corporation dispute a term in their contract.
Refer to Fact Pattern 3-1. If Java and Kaffe have a long-standing business relationship
that they would like to continue, a preferred method of settling their dispute may be
mediation because
a. the case will be heard by a mini-jury.
b. the dispute will eventually go to trial.
c. the process is not adversarial.
d. the resolution of the dispute will be decided an expert.
Donalds debt to Everett is past due. Everett brings a legal action against Donald to
collect the debt. To ensure that a judgment in Everetts favor will be collectible, Everett
asks the court to order the seizure of Donalds property. This is a request for
a. a guaranty (or suretyship) contract.
b. an order that would violate most state laws.
c. a writ of attachment.
d. a writ of execution.
Lewis is a state court judge. Like other judges, Lewis often refers to secondary sources
of law for guidance. These sources include
a. official comments to statutes.
b. other states statutes.
c. state constitutions.
d. the U.S. Constitution.
Fabio makes a living by farming near Gastric Combustibles, Inc., which has discharged
pollutants into the areas air and water. If Fabio brings a suit asking for an injunction
against Gastric on the ground of nuisance, the court is most likely to rule in Gastrics
favor if
a. Fabios operation also pollutes, with pesticides and herbicides.
b. Fabios operation suffers harm distinct from the general public.
c. Gastrics operation is the core of the local economy.
d. Gastrics operation uses reasonable care to avoid harm to Fabio.
The graphics used in “Go!, a handheld video game featuring racecars, are protected by
a. copyright law.
b. patent law.
c. trademark law.
d. trade secrets law.
Double D Ranch and Esau enter into a contract on August 1 for the sale of 200 cattle.
Esau cancels the contract ten days later. Double D is unable to sell the cattle to another
buyer. Double D is entitled to
a. force Esau to accept the cattle and recover the contract price.
b. keep the cattle and recover the contract price from Esau.
c. keep the cattle only.
d. recover the contract price from Esau but must destroy the cattle.
Bruno is a businessperson with investments in legal and illegal operations. Bruno may
be subject to penalties under RICO
a. for making an unprofitable, but legal, investment.
b. for the commission of any business fraud.
c. only in a case involving a “racket.
d. only in a case involving organized crime.
Ric designs a new computer hard drive, which he names “Sci Phi. He also writes the
operating manual to be included with each final product. Ric could obtain patent
protection for
a. the hard drive.
b. the “newness of the hard drive.
c. the name.
d. the operating manual.
Kelsy obtains a business liability insurance policy from Luminous Insurance Company
for Kelsys Framing & Art Supplies store. When an event occurs that gives rise to a
claim, Luminous has a duty to
a. investigate to determine the facts.
b. file a suit against Kelsy so that a court can settle the claim.
c. find a third party on whom to impose liability.
d. refund any unearned amount of the premium.
Clu serves in a representative capacity for Digger. Elmo is injured through Clus
negligence. Digger may be liable to Elmo if Clus conduct occurred
a. due to a propensity Digger was not and could not have been aware of.
b. during normal working hours.
c. in the course and scope of Clus employment.
d. outside the parties employment relationship.
In a suit against Clem, Dona obtains the cancellation of a contract. This is
a. an injunction.
b. damages.
c. rescission.
d. specific performance.
Bob rents a golf cart at Country Club Golf Course. The brakes are worn, and while Bob
is driving the cart, they fail. The cart crashes into a tree, and Bob is injured. Country
Club could have discovered, with reasonable diligence, that the brakes were worn.
Liability for Bobs injuries most likely rests with
a. Bob and Country Club.
b. Bob only.
c. Country Club only.
d. neither Bob nor Country Club.
MaxiMart, Inc., is a discount retailer. MaxiMarts customer service employees are on
strike. Sixty of the workers block the entrances to one of MaxiMarts stores. To get them
away from the doors, MaxiMart should seek
a. an injunction.
b. damages.
c. rescission.
d. specific performance.
Secure Investments, Inc., a U.S. firm, expands into international markets through a joint
venture. In this situation, Secure owns
a. all of the operation, and its profits and liabilities.
b. all of the operation, and none of its profits and liabilities.
c. none of the operation, and none of its profits and liabilities.
d. part of the operation, and shares its profits and liabilities.
An antitrust action is brought against Tri-State Transport Company, alleging the offense
of attempted monopolization. To be guilty of this offense, Tri-States attempt must have
a. a dangerous probability of success.
b. a deadly guaranty of success.
c. a distant possibility of success.
d. a distinct improbability of success.
Dhani is the beneficiary of a life insurance policy on Elmos life obtained from Famed
Insurance Company. The insured under this policy is
a. Dhani.
b. Elmo.
c. Famed.
d. the agent or broker through whom the policy was obtained.
Caleb is driving a car in which Dotty is a passenger when an accident occurs. Caleb and
Dotty are emotionally rattled, but neither is physically hurt. Caleb is not liable to Dotty
on a negligence theory because
a. both parties were emotionally rattled.
b. Caleb did not apparently intend to cause an accident.
c. Dotty must have been comparatively negligent.
d. Dotty was not injured.
Longhaul Trucking Company transports radioactive materials. Marla suffers from
cancer. To succeed in a strict liability action against Longhaul, Marla must show that
her injury was caused by
a. Longhauls failure to use reasonable care to prevent harm to Marla.
b. Longhauls intentional lack of regard for the general public.
c. Longhauls operation.
d. radiation from any source.
The verdict in a summary jury trial is binding.
A conditional promise to pay is not a negotiable instrument.
A contract is a promise to act.
The choice of a corporate name is subject to state approval.
A principal is not liable to a third party for any contract made by the agent acting
outside the scope of his or her authority.
The basis for contributions to help pay for an employees loss of income on retirement is
the employees annual wage base.
Tariffs are imposed only on exports.
An alteration of an instrument is material if it changes the terms between two parties in
any way.
In a limited liability company, members cannot participate in its management.
State securities laws apply only to interstate transactions.
A business organization and its actions cannot be based on trust.
Stealing software is not a crime.
A gift causa mortis is effective only if the donor dies and the donee lives.
False imprisonment occurs when a person is restrained by another intentionally and
without justification.
An agency relationship can be formed without consideration.
Maximum resale price maintenance agreements are subject to analysis under the rule of
reason.
A forged signature is effective as the signature of a drawer to the extent that is
resembles the drawers actual signature.