If a lessor’s tender of delivery fails to conform to a contract in any way, the lessee can
reject the goods.
A joint tenant’s sale of his or her interest terminates the joint tenancy.
An Internet service provider cannot be held liable for disseminating defamatory
remarks under any circumstances.
Malpractice is professional negligence.
An acceptance must be unequivocal.
Only state law governs drug tests of private-sector employees.
An employee can continue the health benefits provided by his or her employer for a
period of time only on an involuntary loss of employment.
Transfer warranties attempt to impose liability on the wrongdoer or the party who dealt
most immediately with the wrongdoer.
A gift is a voluntary transfer of property for which no consideration is given.
Creditors may contract with a debtor for discharge of the debtor’s liquidated debts.
Misrepresentation of a material fact cannot occur through conduct alone.
A buyer who rightfully rejects nonconforming goods can resell the goods and keep the
proceeds.
A special warranty deed provides the most protection against defects of title.
Plant life is not considered to be real property.
If a buyer repudiates a contract, the seller cannot recover damages.
A contract will be discharged if foreseeable circumstances make it impossible to attain
the contract’s purpose.
Federal law permits a partnership to be treated as an entity in suits in federal courts.
A bank that fails to detect an alteration to its customer’s check is liable to the customer
for the loss.
An integrated contract is the final embodiment of the terms of an agreement.
Shareholders have no responsibility for the day-to-day management of a corporation.
Any judgment is enforceable.
A finder acquires title to lost property good against the whole world, except the original
owner.
The legality of an action is always clear.
The jurisdiction of a state court of appeal is substantially limited to hearing appeals.
An easement arises when the owner of one piece of land occupies the real property of a
neighbor and eventually acquires title to it.
Stare decisis is a doctrine obligating judges to help persons who have failed to protect
their own rights.
A buyer who obtains substitute goods to replace goods that a seller did not deliver can
also recover damages from the seller.
An offer to form a unilateral contract is accepted by a promise to perform.
Until the time for performance under a contract expires, the seller has a right to cure.
The purpose of tort law is to provide remedies when various protected interests have
been invaded.
An unpaid seller can bring an action to recover the purchase price, on the buyer’s breach
of a contract, only if the goods are first disposed of.
Currently, it is not clear which, if any, laws apply to the security of e-money payment
information.
In most states, the seller of a new house warrants that it is fit for habitation.
Federal statutes apply to all states.
A secured party can release the collateral described in a filed financing statement only if
the debtor has paid the debt.
Ren is a shareholder of Star Corporation. Ren wants to amend Star’s bylaws to require it
to publish the names of shareholder-nominated candidates for positions on the board of
directors. Under the Securities and Exchange Commission’s “notice and access” e-proxy
rules, Ren can solicit proxies from other Star shareholders on this proposal by posting
proxy materials on a publicly accessible Web site and sending a paper notice to
A.any Star shareholder Ren selects.
B.each Star shareholder.
C.Star Corporation.
D.the Securities and Exchange Commission.
Fact Pattern 10-3
Odell and Paula sign a contract for the sale of Odell’s Pizza Parlor to Paula. The parties
intend their written contract to be a final statement of most, but not all, of the terms of
their agreement-Odell must first buy the building from Quin, after which Odell and
Paula will negotiate a final price.
Refer to Fact Pattern 10-3. Paula later disputes some of the provisions of the deal with
Odell. If the dispute results in litigation, a court will most likely admit evidence of
A.ambiguous additional terms.
B.consistent additional terms.
C.contradictory additional terms.
D.fraudulent additional terms.
In the facts of the previous question, under the dissent’s reasoning in Notz v. Everett
Smith Group, Ltd., a minority BC shareholder could bring
A.a claim against Typhoon’s former directors.
B.a direct claim against SBI’s majority shareholders.
C.a shareholder’s derivative suit against Rewind.
D.no claim.
Dian, a clerk at an Entertainment Unlimited store, takes a DVD player from the store
without permission. Dian is liable for
A.appropriation.
B.benefiting an employee.
C.conversion.
D.wrongful interference with a business relationship.
Lebron, an attorney, allows a statute of limitations to lapse on a claim by Midwest
Metal Fabrication Company, a client. Lebron
A.can be held liable for malpractice.
B.has violated an ethical standard but cannot be held liable.
C.is subject to criminal penalties under the statute of limitations.
D.will be automatically disbarred.
Merchant Supply Company and National Discount Stores enter into a contract for a
lease of cash registers. Merchant assures National that it has valid title to the goods.
Under the UCC, a warranty of title arises
A.automatically in most lease contracts.
B.only if the lessee asks for such a warranty.
C.only if the lessor expresses such a warranty.
D.only in conjunction with sales contracts, not lease contracts.
Dag is an employee of Eagle Mining Company. Under federal labor law, Dag and other
employees have the right to
A.bargain collectively with Eagle through their representatives.
B.insist that Eagle require union membership as a condition of work.
C.interfere with the efforts of others to form labor organizations.
D.refuse to bargain with Eagle through their representatives.
Quinn enters into a series of agreements with Reba involving a sale of a Suite Dreams
Motel, including the land, building, furnishings, shares of stock in Suite Dreams
Company, and a contract with Trudy to create an ad campaign. Reba suspects that
Quinn may be misrepresenting the facts. The UCC Statute of Frauds governs
A.the sale of any of the property evidenced by a writing.
B.the entire deal, including the marketer’s services.
C.the sale of the furnishings priced at $500 or more.
D.the sale of the land and the building.
Owen is a holder of a promissory note obtained from Purchase Money, Inc. Regarding
the defenses against payment of the note to which Purchase Money is subject, Owen, as
an ordinary holder, is subject to
A.more defenses.
B.no defenses.
C.some defenses, but not as many.
D.the same defenses.
Farm Equip, Inc., makes farming machinery. Gail discovers that her Farm Equip tractor
is defective and sues the maker for product liability based on negligence. To win, Gail
must show that
A.Farm Equip sold the tractor to Gail.
B.Gail knew and appreciated the risk caused by the defect.
C.Gail suffered an injury caused by the defect.
D.the “defect” was a commonly known danger.
Rikki sells shares in Sunn Energy Company to Telsa. Rikki does not deliver the actual
possession of the shares to Telsa, but gives her the key to a safety-deposit box in Unity
Bank in which the stock certificates are locked. Presenting the key is
A.accession.
B.constructive delivery.
C.confusion.
D.conversion.
The Constitution provides that no person shall be deprived of “life, liberty, or property
without due process of law.” Under this clause, “persons” include
A.animals and other “beings in nature.”
B.buildings and other “manmade creations.”
C.corporations and other “legal persons.”
D.none of the choices.
Bubbly Soda Company hires Carlo to work on Bubbly’s shipping dock, checking
outgoing loads and dispatching Bubbly’s drivers. With respect to Carlo, Bubbly is most
likely
A.an employee.
B.an agent.
C.an independent contractor.
D.a principal.
Vernon claims that his contract with Ulani is voidable. If their contract is avoided
A.both parties are released from it.
B.both parties must fully perform their obligations under it.
C.a wholly different contract is agreed to.
D.a wholly different contract is imposed “as if” the parties had agreed.
Bayou Boats, Inc., and Eventide Fishing Tours enter into a contract for a sale of seven
swamp boats. Eventide pays for the goods, but Bayou does not deliver. Eventide can
use replevin as a remedy if
A.Bayou is lawfully withholding the goods.
B.Eventide cannot effectively cure the defect.
C.Eventide is unable to cover for the goods.
D.the goods have not been identified to the contract.
Primo Pools Company and Aquatic Recreation, Inc., enter into a contract for a sale of
prefabricated swimming pools. Under either a shipment contract or a destination
contract, the seller must
A.allow the buyer to reject the goods for any reason.
B.deliver the goods to a particular destination.
C.place the goods into the hands of a carrier.
D.provide the buyer with any necessary documents of title.
Property Financial Corporation makes loans that qualify, under a Federal Reserve
Board amendment to Regulation Z, as Higher-Priced Mortgage Loans (HPMLs). Quinn
applies to Property Financial for an HPML. To make the loan, the lender must
A.convince an appraiser to inflate the value of the property.
B.impose a prepayment penalty for the duration of the loan.
C.structure the loan to specifically evade the HPML protections.
D.verify the borrower’s ability to repay the loan.
Pizza & Cookies, LLC, is a limited liability company. Among its members, a dispute
arises that the operating agreement and the state LLC statute do not cover. The dispute
is governed by
A.no law.
B.the federal Uniform LLC Law.
C.the principles of partnership law.
D.the state corporation statute.
Craft Engineering, Inc., contracts for a sale of technical instruments to Detail Design
Company. Before the date on which performance is due, Craft notifies Detail that it will
not perform. This is
A.anticipatory repudiation.
B.perfect tender.
C.rejection of performance.
D.revocation of acceptance.
Webline Retail Sales, Inc., promises its salaried employees a bonus at the end of the
year if management thinks it is warranted. This promise is
A.enforceable.
B.unenforceable because it is not supported by consideration.
C.unenforceable because the dollar amount is missing.
D.unenforceable because the employees are paid salaries.
Madison is the chief executive officer of Nitro Medico, Inc., which is required to file
certain financial reports with the Securities and Exchange Commission (SEC). Under
the Sarbanes-Oxley Act of 2002, Madison must
A.certify that the reports are complete and accurate.
B.designate a corporate official to assume liability for inaccuracies.
C.do nothing.
D.read the reports and be prepared to answer questions about them.
Yvon is charged with the crime of theft for taking Zach’s briefcase, which Yvon
mistakenly thought was hers. A mistake of fact is a defense
A.if the fact was not reasonably made known to the public.
B.if the mistake negates the mental state necessary to commit a crime.
C.if the perpetrator was intoxicated.
D.under any circumstances.
Rikki signs a check “pay to the order of Scholar University” drawn on Rikki’s account
in State Bank to pay her tuition. Rikki is
A.the certifier.
B.the drawee.
C.the drawer.
D.the payee.
The Fair and Accurate Credit Transactions Act of 2003 prohibits merchants from
printing more than the last five digits of a credit card number or the expiration date on
any receipt provided to the cardholder at the point of sale. According to recent court
decisions, this requirement applies to
A.e-mailed receipts only.
B.paper receipts and paperless receipts of all kinds.
C.paper receipts only.
D.Web page screen shots and paper receipts only.
Britney, an employee of Computer Associates, is arrested at work. A grand jury issues a
formal charge against Britney for larceny. This charge is
A.an arraignment.
B.an indictment.
C.an information.
D.an inquisition.
Betty files a suit against Carl. Before going to trial, the parties meet, with their
attorneys to represent them, to try to resolve their dispute without involving a third
party. This is
A.arbitration.
B.litigation.
C.mediation.
D.negotiation.
Ralph offers to sell Sophie, who is seventeen years of age, a car about which Ralph
intentionally misrepresents several material facts. In reliance on the misrepresentations,
Sophie buys the car. To prove fraud in this transaction, Sophie would have to show that
A.Ralph intentionally deceived Sophie.
B.Ralph made statements that were obviously exaggerated.
C.Sophie does not know anything about cars.
D.Sophie is under eighteen years of age.
Fact Pattern 10-1
Moore Properties, Inc., offers in writing to sell to Lawn Acres Development
Corporation a certain half-acre of land for “$112,000.” After Lawn Acres signs the offer
in acceptance and returns it, Moore discovers that the price should have been stated as
“$121,000.”
Refer to Fact Pattern 10-1. Moore’s misstatement of the price is
A.a bilateral mistake.
B.a fraudulent misrepresentation.
C.a unilateral mistake.
D.unconscionable.
Scot and Tiffany enter into an implied-in-fact contract. The parties’ conduct
A.defines the contract’s terms.
B.finds the contract’s facts.
C.terminates any unintended consequences.
D.undercuts any terms based on the facts.
Applied Business Corporation makes and markets its products nationwide. Under the
stakeholder approach, to be considered socially responsible when making a business
decision, Applied must take into account the needs of
A.its consumers, the community, and society only.
B.its employees and owners only.
C.its employees, owners, consumers, the community, and society.
D.no one.
Pam contracts to buy a Quotient-brand computer set-up from Regal Systems for $1,000,
but Regal fails to deliver. Pam buys the computer elsewhere for $1,500. Pam’s measure
of damages is
A.$500 only.
B.$500 plus incidental damages.
C.incidental damages only.
D.$0.
Joy induces Kelly to enter into a contract for the purchase of a condominium about
which Joy knowingly misrepresents a number of material features. When Kelly
discovers the truth, Kelly can
A.enforce the contract and seek damages.
B.enforce the contract but not seek damages.
C.neither enforce the contract nor seek damages.
D.seek damages but not enforce the contract.
Summit Credit Corporation lends funds to Toby, a consumer, to apply to the cost of a
sport utility vehicle (SUV), which is the collateral for the loan. An enforceable security
interest also requires
A.a written agreement and Summit’s possession of the SUV.
B.a written agreement or Summit’s possession of the SUV.
C.the vehicle seller’s acknowledgement of the loan in writing.
D.Toby’s possession of the SUV.
Dina’s debit card, issued by Eminent Bank, is stolen and used without Dina’s
permission. Dina tells Eminent Bank within thirty days. Dina may be required to pay no
more than
A.$5.
B.$50.
C.$500.
D.$5,000.