Money Mortgage Mart makes a mortgage loan to Natalie to allow her to buy a home
and establishes an escrow account. Most likely, this account holds payments for
a. homeowners’ insurance and property taxes.
b. property repairs and maintenance.
c. commissions and other costs related to the purchase of the home.
d. the lender’s administrative expenses.
On Monday, Merlin buys a tablet for $500 from a Pads & Pods store. On Tuesday, he
returns to the store and buys a GPS device for $200. On Wednesday, he downloads
$100 worth of tunes from singsong.com. To be enforceable, the contract must be in
writing for the purchase of
a. the tunes, the GPS device, and the tablet.
b. the GPS device and the tablet only.
c. the tablet only.
d. the tunes only.
Ozzie contracts for the sale of 500 shares of stock in Premium Quality, Inc., to Ray,
with payment to go to Scholar University to pay Thalia’s tuition. The contract reserves
to Ozzie and Ray the right to modify its terms. Scholar’s right to payment is
a. not affected by the reservation.
b. subject to any change that Ozzie and Ray make.
c. limited only if Thalia agrees to any changes.
d. terminated by the reservation.
Jim is an appliance salesperson. To make a sale, he asserts that a certain model of a
Kitchen Helper refrigerator is the “best one ever made.” This is
a. fraud if the statement is the truth.
b. fraud if Jim believes that this statement is not true.
c. fraud if Jim is stating his opinion, not the facts.
d. not fraud.
Car n” Truck Body & Paint Company orders custom paint from Diverse Hues Inc., but
Diverse does not deliver. Car n” Truck will probably be unable to enforce the agreement
if the parties omitted
a. a price term.
b. a payment term.
c. a quantity term.
d. shipping arrangements.
Melanie files an employment discrimination suit against Natural Gas Industries Corp.
under Title VII on a disparate-impact theory. To succeed, Melanie must show that a
protected group of people are adversely affected by any of the following except the
employer’s
a. practices.
b. procedures.
c. tests.
d. seniority system.
Wally offers to sell a certain used forklift to Valu Lumber Outlet, but Wally dies before
Valu accepts. Most likely, Wally’s death
a. did not affect the offer.
b. shortened the time of the offer but did not terminate it.
c. extended the time of the offer.
d. terminated the offer.
Milo buys an all-terrain-vehicle (ATV) from No-Limit Toys, Inc., on credit but makes
no payments on the account. Odell, the owner of No-Limit Toys, calls Milo at home on
a Monday morning at three a.m. Odell represents himself as PayNow Collection
Agency and demands payment “or else.” The next day, Odell sends Milo notice that he
has thirty days in which to request verification of the debt and that its payment will be
suspended during that time, but that if he does not pay the full amount due within five
business days, Odell will arrange for the “destruction of Milo’s good credit rating.”
Which laws has Odell violated, if any, and in what ways?
Lorna borrows $175,000 from Mountainside Credit Union to buy a home. Among the
terms that must be disclosed under federal law is the annual percentage rate. This is
a. the actual cost of the loan on a yearly basis.
b. the average prime offer rate.
c. the interest rate at which the loan is made.
d. the loan principal.
Goldtone Corporation makes cell phones. Haji files a product liability suit against
Goldtone, alleging a design defect. In deciding whether to hold Goldtone liable, the
court may consider an alternative design’s
a. popularity among industrial designers.
b. attractiveness to consumers.
c. aesthetics.
d. effect on the product.
Gert, an accountant, contracts to conduct an audit for Hailey. In performing the audit,
Gert fails to detect certain misconduct. Gert is most likely
a. liable if a normal audit would have revealed the misconduct.
b. liable if Gert issues a specifically qualified opinion.
c. not liable if Gert generally disclaims any liability.
d. not liable if the misconduct was due to Hailey’s negligence.
Roasters Corporation and Outdoor Barbecue, Inc., enter into a contract for a sale of a
commercial grill. The contract requires Roasters to deliver the goods to Speedy
Delivery Company for transport to Outdoor. Risk of loss passes to Outdoor when
a. Roasters delivers the goods to Speedy.
b. Roasters and Outdoor enter into their contract.
c. Speedy transports the goods to Outdoor.
d. Outdoor begins to use the grill.
Reno is the beneficiary of a life insurance policy on Sula’s life obtained from
Traditional Insurance Company. The underwriter of this policy is
a. Reno.
b. Sula.
c. Traditional.
d. the agent or broker through whom the policy was obtained.
Roy’s Chick”n Shack orders chicken from Standard Food Supplier, but Standard does
not deliver. Roy’s will probably be unable to enforce the agreement if the parties
a. did not limit the duration of the deal.
b. did not specify a payment term.
c. did not specify a quantity term.
d. have not begun to perform.
Fred’s Paper Shop frequently buys paper from Online Office Supplies, Inc. Online
Office Supplies and Fred’s Paper Shop decide to enter into a partnering agreement. One
of the advantages of entering into a partnering agreement is that
a. the costs of all transactions will be reduced.
b. the likelihood that disputes will arise under their contract is reduced.
c. neither party will be able to file suit for breach of contract.
d. Fred’s Paper Shop will not be able to file suit for breach of contract.
Wytex, Inc., a U.S. firm, and Findora Commercial, a Nigerian firm, are parties to a
contract that specifies that the official language of the contract is English. This is
a. a choice-of-forum clause.
b. a choice-of-language clause.
c. a choice-of-law clause.
d. an arbitration clause.
Giant Lift Corporation purchases all of the assets of Heavy Hydraulics Corporation.
With respect to Heavy Hydraulics’s liabilities, Giant Lift is
a. automatically responsible.
b. not responsible under any circumstances.
c. responsible if Heavy Hydraulics is a competitor of Giant Lift.
d. responsible if the sale is in fact a merger or consolidation.
Jayson and MaryElise enter into a contract. Jayson agrees to mow MaryElise’s yard
every week for the summer. MaryElise is the
a. obligor.
b. obligee.
c. assignee.
d. assignor.
Sangfroid Business Corporation can be compelled to dissolve by
a. its creditors only.
b. itself, through its shareholders and directors, only.
c. itself, through its shareholders and directors, or the state.
d. the state only.
Canyon Creek Corporation is a Delaware-based firm that does business throughout the
United States. With respect to this circumstance, the UCC has been adopted by, and
applies in,
a. a few of the states.
b. all of the states, in whole or in part.
c. half of the states.
d. none of the states, to date.
North Mining Company and South Excavation Company agree to abide by the
decisions of East Coast Financial Corporation as to their respective levels of
production, markets, and prices, effectively reducing competition and increasing profits.
This is most likely
a. a common, legal, time-honored type of business arrangement.
b. an illegal restraint on trade.
c. an innovative, legally efficient approach to doing business.
d. an outdated, but legal business trust.
Frisco offers to buy a Gibson guitar owned by Hayden for twice what she paid for it.
She accepts and hands the guitar to Frisco. Her delivery of the guitar is
a. not consideration because her voluntary consent may be lacking.
b. not consideration because the exchange is not a bargain.
c. consideration.
d. not consideration because the value is not legally sufficient.
Lars accuses Moe, an attorney, of committing malpractice. Malpractice is
a. a breach of ethics.
b. a defalcation.
c. a mistake in judgment.
d. professional negligence.
Haya obtains an insurance policy from Inviolable Insurance Corporation (IIC). IIC may
cancel, or refuse to renew, the policy because of
a. Haya’s appearance as a witness against IIC.
b. Haya’s gender.
c. Haya’s national origin.
d. none of the choices.
Wendy works as a weather announcer for a TV station under the character name
Weather Wendy. Wendy can register her name as a
a. a certification mark.
b. a collective mark.
c. a service mark.
d. a trade name.
The U.S. Citizenship and Immigration Service issues a rule. Like the rules of other
federal administrative agencies, this rule is compiled in
a. the Administrative Register of the Federal Government.
b. the Code of Federal Regulations.
c. the Federal Rules of Civil Procedure.
d. the United States Code.
Beck seeks information about Donatello and other well-known businesspersons under
the Freedom of Information Act. To obtain the information, Beck must
a. agree not to reveal any trade secrets.
b. reasonably describe the information.
c. get a court order.
d. have the businesspersons’ permission.
Pricey Auto Corporation gives notice to Quint that Pricey is terminating their franchise
arrangement. Winding up the business requires
a. a new franchise agreement.
b. nothing more than closing immediately.
c. Quint’s death, disability, or insolvency.
d. the return of Pricey’s property.
Green Grocers, Inc., enters into a contract with Hiway Transport Company for the
delivery of a shipment of fresh produce. In a later dispute between these parties over the
delivery, the doctrine of quasi contract cannot be used because
a. both of the parties involved are businesses.
b. at least one of the parties had greater bargaining power.
c. the subject of the contract was a service.
d. there is an actual contract covering the subject in dispute.
Umiko files a petition for bankruptcy. Her creditors must file with the court their proof
of claims against her assets within
a. fifteen days of the order for relief.
b. thirty days of the filing of the petition.
c. sixty days of the automatic stay.
d. ninety days of the creditors’ meeting.
Smitty, driving while intoxicated, causes a car accident that results in the death of
Tiffany. Smitty is arrested and charged with a felony. A felony is a crime punishable by
death or imprisonment for
a. any period of time.
b. more than one year.
c. more than six months.
d. more than ten days.
Under a contract with Valley Vineyard, Walsh begins grading a terraced hillside for the
planting of grapes. Halfway through the project, Walsh asks for $5,000 over the
contract price, claiming an increase in the “cost of doing business.” Valley agrees but
later refuses to pay. Their agreement is
a. unenforceable because Walsh’s performance was a preexisting duty.
b. unenforceable because Valley’s promise was illusory.
c. enforceable.
d. unenforceable because Walsh’s request modified the contract.
Generally, Sports Fitness Club Company and other corporations can pay dividends if
a. the corporation can continue to pay its debts as they come due.
b. the amount of the dividends exceed the corporation’s net worth.
c. the shareholders approve.
d. the corporation’s assets equal its total liabilities.
An appraisal right is available only when a state statute specifically provides for it.
Selecting the state in which to incorporate is an important step in the incorporation
procedure.
Real estate sales contract are often made contingent on the buyer obtaining financing.
A signature must be the full name of a party.
Petra, Queenie, and Randall want to form Sales-to-Infinity, LLC (limited liability
company). What should they provide in their operating agreement? If they fail to
include some important operating details, what determines these details?
Adequacy of consideration refers to how much consideration is given.
Class-action lawsuits are suits in which a number of persons join together to bring an
action.
A promissory note can be a negotiable instrument.
Wrongfully taking personal property without the owner’s permission is conversion.
If a nonmerchant-seller’s offer expressly conditions acceptance on a
nonmerchant-buyer’s agreement to the terms of the offer, the buyer’s positive response
is an acceptance even if it contains additional terms.
In a suretyship relationship, a third person’s credit becomes the security for a debt.
Recording a mortgage protects the creditor’s security interest in the property.
A check “payable to the order of bearer” is neither an order instrument nor a bearer
instrument.
Protection against discrimination under the Civil Rights Act of 1964 does not extend to
situations in which individuals are harassed by members of the same gender.
If a buyer breaches a contract while the seller is still in possession of the goods, the
seller can resell the goods and hold the buyer liable for any loss.