Neil goes to Oil Shop to change the oil in his car. Perry, the service technician, learns
that Neil plans to take a trip and advises the use of a certain type of oil. The oil breaks
down during the trip, damaging the car. Neil may recover from Oil Shop for breach of
A.an express warranty.
B.an implied warranty of fitness for a particular purpose.
C.an implied warranty of merchantability.
D.a warranty of title.
Bret enters into a contract with Collegiate University over the Internet to take an online
course titled “Internet Law.” This is an e-contract because
A.the contract was entered into over the Internet.
B.the contract was formed between a student and a university.
C.the contract will be performed online.
D.the subject matter of the contract is “Internet Law.”
Ludwig receives from Milo a marimba stolen from Nadine. To be criminally liable,
Ludwig must know
A.Milo.
B.Nadine.
C.that the marimba is stolen.
D.what a marimba is.
Verna files a petition in bankruptcy in a liquidation proceeding. If the court administers
the means test and concludes that Verna is abusing the bankruptcy process by filing for
a liquidation, the court will most likely
A.force Verna to file for relief through an individual repayment plan.
B.discharge Verna’s debts.
C.distribute Verna’s property to Verna’s creditors.
D.issue an automatic stay against any actions by Verna’s creditors.
Clyde issues a check payable to Discount Mart. Elle, Discount’s cashier, forges the
store’s indorsement and deposits the check in her bank account. Clyde’s bank, First
State Bank, pays the check. Clyde can recover from
A.Elle, but not First State Bank.
B.First State Bank, which cannot recover from Elle.
C.First State Bank, which can recover from Elle.
D.no one.
Home Products Company and House & Yard, Inc., use the mark “Good Housekeeping
Seal of Approval” to certify the quality of their products. Home Products and House &
Yard are not in business together and do not own this mark. This mark is
A.a certification mark.
B.a collective mark.
C.a service mark.
D.trade dress.
Bob, research manager for CornAgri Products, Inc., applies utilitarian ethics to
determine that an action is morally correct when it produces the greatest good for
A.Bob.
B.CornAgri.
C.the fewest people.
D.the most people.
Pluto accuses Quark, an accountant, of committing defalcation. This is
A.embezzlement.
B.general misconduct.
C.professional negligence.
D.throwing something out of a window.
The payment of John’s debt to Kirsten is guaranteed by John’s personal property.
Kirsten is most likely to perfect her interest by
A.attaching a bright label to John’s property.
B.calculating the precise amount of John’s debt.
C.correcting grammatical errors in the parties’ written agreement.
D.filing a financing statement with the appropriate authority.
Lem buys a used MP3 player for $50 and a new laptop for $1,500, and signs a one-year
employment contract for a $4,000 monthly salary to start at the beginning of the next
month. The Statute of Frauds covers
A.the employment contract, and the laptop and MP3 purchases.
B.the employment contract and the laptop purchase only.
C.the employment contract only.
D.the laptop and MP3 purchases only.
Fizzical Fitness, a gym, leased its facilities and equipment from Gym Gear Inc. Fizzical
agreed to buy towels and other supplies only from Gym Gear at prices set by the seller
at the time of delivery. Later, Fizzical filed a suit against Gym Gear, alleging that the
prices were set improperly. According to the majority in Casserlie v. Shell Oil Co., an
inquiry into Gym Gear’s motive in setting the prices is not necessary if it acted
A.in good faith.
B.with the motive of driving competitors out of business.
C.with the intent of making the most profit in the least time.
D.to set commercially unreasonable and discriminatory prices.
The assets in Hong’s estate, including the value of his home on Elm Street and its
contents, are insufficient to pay in full all of the gifts provided for in his will. His heirs
will receive
A.full payment in order of seniority until the assets are exhausted.
B.nothing-the assets will descend to the state.
C.reduced benefits.
D.the option of distributing the assets according to their wishes.
Musical, Inc., sells fifty MP3 players to Noise Stores, Inc. To avoid liability for most
implied warranties, in some states Musical could simply state in writing that the players
are sold
A.as is.
B.by a merchant.
C.in perfect condition.
D.with no known defects.
Nico is a passenger in a car driven by Owen, whose negligence causes an accident,
injuring himself. Nico, uninjured, accompanies Owen to Parkside Hospital in an
ambulance. The ambulance is hit by a car driven by Quin, injuring Nico. Nico files a
suit against Owen, whose best defense is
A.assumption of risk.
B.contributory negligence.
C.negligence per se.
D.superseding cause.
Tilly, the chief financial officer for USA Products Corporation, attempts to apply
Christian precepts in making ethical decisions and in doing business. In applying
duty-based ethical standards that are derived from a religious source, Tilly would
consider the motive behind an act to be
A.irrelevant.
B.the least important consideration.
C.the most important consideration.
D.the only consideration.
Global Distribution Corporation suggests that its employees apply the “categorical
imperative” to ethical issues that arise at work. This requires that the employees
A.categorize the issues according to legality, morality, and profitability.
B.consider only the benefits that would accrue to them personally.
C.look only at the result, regardless of the means to attain it.
D.weigh the consequences that would follow if everyone acted the same.
Ramblin’ Country Stables contracts to buy 1,000 horseshoes from Blacksmith, Inc., for
$1 per shoe. When the market price decreases to 50 cents per shoe, Ramblin’ refuses to
go through with the deal. Blacksmith can recover
A.$1,500.
B.$1,000.
C.$500.
D.$0.
Fits Like A Glove Shoes, Inc., and Retail Footwear Stores enter into a contract for a sale
of shoes. The contract indicates that the price includes transportation costs to a specific
destination by including the term
A.C.I.F.
B.delivery ex-ship.
C.F.A.S.
D.F.O.B.
Roy and Sheila are parties to a contract. They subsequently agree that Tony should take
Roy’s place and assume all of his rights and duties under the contract. This is
A.a novation.
B.an accord and satisfaction.
C.an assignment.
D.a modification.
Myles obtains a business liability insurance policy from Nova Insurance Company for
Myles’s Hydraulics & Transmission Repair shop. Nova can cancel the policy
A.if Myles increases the risk assumed by the Nova.
B.if Myles files a claim under the policy.
C.if Myles appears as a witness in a case brought against Nova.
D.under no circumstances.
Clem attempts to free himself from the duties of his contract with Drew by telling Drew
to find someone else to perform them. This is
A.a delegation.
B.an assignment.
C.a third party beneficiary contract.
D.none of the choices.
Rite Contractors, Inc., agrees to build a motel for Sleep Inn Corporation. The project
proceeds according to plan, but before it is done, Sleep tells Rite to quit. Rite may
recover
A.the contract price less costs of materials and labor.
B.the contract price.
C.the costs needed to complete construction.
D.profits plus the costs incurred up to the time of the breach.
In Smartphone Games Inc.’s suit against Thermopylae Apps Corporation, Thermopylae
seeks to discover electronically stored information (ESI) that should be in Smartphone’s
possession. If Smartphone did not preserve the ESI despite a clear duty to do so, the
company should most likely
A.ask the court to sanction Thermopylae for an unreasonable request.
B.reconstruct the ESI to the best of its ability.
C.refuse to provide the ESI on the ground that it is confidential.
D.settle the dispute.
Petulia is a debtor. Her employer Quantum Investments, Inc., her alma mater State
University, and TimePay Credit Company are her creditors. For these parties, a petition
in bankruptcy for relief through an individual’s repayment plan could be filed on
Petulia’s behalf by Petulia and
A.none of the other parties.
B.her employer or her creditors.
C.her creditors only.
D.her employer only.
Beachside Pools, Inc., agrees to build a swimming pool for Candy, but fails to build it
according to the contract specifications. Candy hires Do-We Fix-It Company to finish
the project. Candy may recover from Beachside
A.the contract price less costs of materials and labor.
B.the contract price.
C.the costs needed to complete construction.
D.profits plus the costs incurred up to the time of the breach.
Paula develops a new espresso machine, which she names “Quik Shot.” She also writes
the operating manual. Paula can obtain trademark protection for
A.the espresso machine.
B.the “newness” of the espresso machine.
C.the name.
D.the operating manual.
Dependable Appliances, Inc., and Elain enter into a contract for a sale of kitchen
appliances. Dependable, a merchant who deals in goods of the kind sold, notes that its
goods come with an implied warranty of merchantability. Under the UCC, this means
that the goods are reasonably
A.fit for the buyer’s particular purpose.
B.fit for the ordinary purpose for which such goods are used.
C.suitable for resale at an acceptable price.
D.the best quality that money can buy.
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.
Bowie owns a 1957 Chevrolet coupe, which Danica customizes and details to Bowie’s
specifications. The car earns several awards at regional vehicle customizing
competition shows. The result of Danica’s efforts is
A.accession.
B.acquisition.
C.conversion.
D.dominion.
Khalil holds a security interest in inventory owned by Luc. Khalil assigns his interest in
the inventory to Mal. Mal becomes the secured party of record
A.automatically.
B.if Khalil advises Luc of the assignment.
C.if Mal advises Luc of the assignment.
D.if Mal files a uniform amendment form.
Upton borrows $150,000 from Valley Credit Union to buy a home, which secures the
loan. Three years into the term, Upton stops making payments on it. Valley Credit
repossesses and auctions off the property to Wesley. The sale proceeds are not enough
to cover the unpaid amount of the loan. In most states, Valley Credit can ask a court for
A.a deficiency judgment.
B.a reverse mortgage.
C.a short sale.
D.nothing.
The law of Chile, Germany, or Japan is
A.global, transnational law.
B.national law.
C.private international law.
D.public international law.
A specific grade of corn that fills BioFuel Cooperative’s silo is fungible. This means
that the corn is
A.alike naturally or by agreement or trade usage.
B.fundamentally different.
C.fundamentally edible.
D.perishable.
International Gem Corporation agrees to sell Jewel Outlets, Inc. (JOI), fifty new
diamonds, but the contract does not specify a place of delivery. JOI is expected to pick
up the goods. The place of delivery is
A.International’s place of business.
B.JOI’s place of business.
C.the Annual Gems and Jewels Convention.
D.the U.S. Postal Service office nearest to JOI’s place of business.