Business Law 62797

Type

Quiz

Book Title

Business Law with UCC Applications 14th Edition

ISBN 13

978-0077733735

March 1, 2019

A compilation of all the statutes of a particular state or the federal government is known

as a code.

A security agreement can either be oral or in writing.

If a child's income from interest and dividends is less than $1,500, it cannot be taxed.

The administrator of an estate is a person named by the court, if none is named in a

will.

Persuasive precedent is a precedent that courts must follow.

Under the RUPA, partnerships at will are automatically dissolved when a partner dies or

enters bankruptcy.

An assignment of a lease occurs when the interest in the leased premises is transferred

by the lessee to another person for a part of the term, but not for the remainder of it.

A derivative suit is based on a direct injury to a shareholder.

A partnership is the easiest business organization to form.

NAFTA is designed to establish a trading market free from tariff barriers.

Limited partners receive a return on their investment, while risking only that original

investment.

A corporation is considered a citizen of the state in which it is incorporated and not the

state where it has its principal place of business.

Persons who receive unordered merchandise in the mail may treat it as a gift.

Living an ethical lifestyle means simply doing what is legal.

A defendant is a person who begins a lawsuit by filing a complaint against a plaintiff in

a trial court of general jurisdiction.

A restrictive covenant in a contract for the sale of a business will be upheld if it is

reasonable in time even if it extends beyond the areas where the business conducts

business.

Tom owns land on one side and Tammy owns land on the other side of a navigable

stream. Both own to the middle of the stream.

LLCs are not usually subjected to double taxation.

The principle of restoration requires that the defeated nation pay the victor the expense

incurred in the war.

Having been called for jury selection, Lawrence discovered that the defendant in the

trial is the brother of his stockbroker. The lawyers may rightfully reject Lawrence on

the grounds that his relationship with the stockbroker may affect his ability to be an

unbiased juror.

Acorn Outfitters advertises a large tent, usually selling for $250, to be sold to the first

customer the next morning for $25. Samuel is the first in line, but Acorn claims that the

tent has already been sold. Acorn has engaged in a bait-and-switch confidence game.

If Big Co. wrongfully discharges Max, but later discovers that Max has been stealing

petty cash, Big Co. can use this as an after-acquired evidence defense.

If Nina, a payee, deposits a check made payable to herself in her own account in a bank

that is not the payor bank, any settlement given by the depositary bank is final.

In a shipment contract, risk of loss does not pass from the seller to the buyer until the

buyer receives the goods.

According to the Statute of Frauds, written agreements must always be signed by both

parties.

The defense of contributory negligence involves the failure of the injured party to be

careful enough to ensure his or her personal safety.

Jared is physically unable to sign his will. He may direct another person to sign for him.

Julie has a nine month old certified check drawn on Harold Bank. Harold Bank is

obligated to pay the check.

The arguments of promissory estoppel and implied contract are one and the same.

Kentle Bank decides to not honor a United Manufacturing check issued to Joe, an

employee, which he cashed at the bank. Kentle Bank must notify Joe by midnight of the

next banking day.

During a lunch with Russell, Josephine offers to sell Russell her car for $5,000. Russell

rejects her offer during the lunch, but the next day, before Josephine has taken any

additional action, Russell calls her to say, "I've changed my mind, I'll take the car." An

effective contract has been formed, and Josephine must sell Russell her car for $5,000.

When a petition is filed under Chapter 7 of the Bankruptcy Code, an automatic stay

goes into effect, prohibiting the creditors from collecting debts on amounts owed for

back taxes, family support, and student loans.

An employer can rightfully refuse employee benefits to a pregnant woman on the

grounds that she is unable to discharge her duties properly.

Under FICA, the amount that an employee is assessed is based on the employee's

monthly wage base.

Claudia contracts with Friendly Paving Co. to install a new driveway. To pay for this

work, Claudia transfers to Friendly Paving Co. her right to receive payment from

Clifford for a loan she made him. Friendly Paving Co. is now a(n):

A. creditor beneficiary.

B. donee beneficiary.

C. executor.

D. fiduciary.

____________ includes the freedom of the press, freedom of speech, freedom of

assembly, and freedom of religion.

A. The Fifth Amendment

B. The Fourth Amendment

C. The Articles of Confederation

D. The First Amendment

In a road rage incident, Jack aims a firearm at Reagan. No shots are fired and the

incident is over in less than 15 seconds. Reagan may sue Jack for:

A. assault.

B. battery.

C. false imprisonment.

D. disparagement.

Sear Enterprises wants to continue in business, but needs some relief from creditors'

claims. Sear Enterprises should consider filing under Chapter ____________ of the

Bankruptcy Code.

A. 7

B. 11

C. 12

D. 13

According to the ___________________, whenever an ambiguous term, clause, or line

is found in a prewritten contract, that ambiguity is interpreted against the party who

wrote the contract.

A. Standard construction rule

B. Parol evidence rule

C. Best evidence rule

D. Equal dignities rule

Green Grocer Wholesale, Inc. received an $850.00 check from Bob for a grocery

purchase. The check was from Forest Enterprises to Ana and had been indorsed to Bob

who, in turn, indorsed the check to Green. The clerk at Green failed to carefully

examine the check, not noticing that the number 5 had been changed to an 8. Green

Grocer has:

A. not taken the instrument in good faith.

B. taken the instrument in good faith.

C. not taken the instrument in good faith to $500.

D. taken the instrument in good faith to $300.

In an ____________, after the auctioneer calls for bids on an article or lot, that article

or lot cannot be withdrawn unless no bid is made within a reasonable time.

A. auction with reserve

B. enforced auction

C. auction without reserve

D. entitled auction

A(n) ____________ is an amount of any loss that is to be paid by the insured and can

be a specified dollar amount, a percentage of the claim amount, or a specified amount

of time that must elapse before benefits are paid.

A. loan value

B. deductible

C. annuity

D. cash surrender value

Jim tells his independent accountant, Rachelle, to prepare a financial statement for his

business associate, Mel. If Rachelle is negligent in her preparation of this financial

statement:

A. Rachelle will be liable if Mel suffers actual financial loss due to her negligence.

B. Jim will be liable if Mel suffers actual financial loss due to Rachelle's negligence.

C. Rachelle will still not be liable to Mel.

D. Mel will not recover any money for financial loss due to her negligence because the

business associate is not an actually named third party.

Which of the following is considered to be future goods?

A. Office furniture

B. Stocks

C. Fish in the sea

D. Gasoline at a gas station

A(n) ____________ loan is one in which creditors have something of value, usually

called ____________, which they can ____________ if the debtor ____________.

A. priority; collateral; sell; defaults

B. unsecured; collateral; sell; dies

C. unsecured; collateral; possess; defaults

D. secured; collateral; possess; defaults

____________ history is a technique for determining how world leaders will probably

act in a given world order when facing a crisis or mapping out a future global strategy.

A. International initial conditions

B. Predictive political

C. International behavior

D. Realpolitik

Assuming he has the right, Tom's promise ____________, also called ____________, is

____________ when it is supported by ____________.

A. of forbearance; promissory estoppel; enforceable; consideration

B. to donate money; charitable pledge; enforceable; firm offer

C. not to sue; forbearance; enforceable; consideration

D. not to sue; consideration; enforceable; legal detriment

Tom orders $24,000 worth of premium bicycles from Budnitz, a premium bicycle

manufacturer, to sell in his Tom's Bike store. After the bicycles are loaded into the

freight truck and are on their way to Tom, Budnitz discovers that Tom is insolvent and

unlikely to be able to pay for them. Budnitz has the right to:

A. stop the delivery and sue for any damages.

B. cure the delivery and sue for any damages.

C. cover the tender and sue for any damages.

D. seasonably reject the tender.

Tom gave celebrity Lynnetta Landau a blank sheet of paper and asked her to sign her

autograph on it. Then, without Lynetta's knowledge, Tom wrote a promissory note made

payable to him for $3,000 above her signature. This kind of fraud is known as fraud:

A. as to the essential nature of the transaction, which may not be used as a defense

against a holder in due course.

B. as to the essential nature of the transaction, which may be used as a defense against a

holder in due course.

C. in the inducement, which may not be used as a defense against a holder in due

course.

D. in the inducement, which may be used as a defense against a holder in due course.

At the conclusion of a tort trial, the jury finds the plaintiff about 30% responsible for

the damages she suffered and the defendant about 70% responsible for causing the

damages. The jury determines the actual damages totals to $100,000. How much will

the plaintiff recover under comparative negligence?

A. $50,000

B. $30,000

C. $70,000

D. $100,000

____________ requires that both the parties return to the other any consideration

already received or pay for any services or materials already rendered.

A. Termination by waiver

B. Novation

C. Mutual rescission

D. General release

After Sarah works three years for Global Industries, Inc., her pension benefits provided

by Global must be vested according to ERISA.

The prime target of the ____________ has been handguns.

A. Consumer Product Safety Act

B. dangerous per se rule

C. telemarketing sales rule

D. negative option rule

Joe, a resident of Ohio, and Maria, a resident of New Mexico, have an auto accident in

New Mexico. A federal court would have jurisdiction over this case if:

A. Ohio and New Mexico had different laws regarding this type of accident.

B. a federal auto title was involved.

C. an amount over $75,000 was involved.

D. an amount over $15,000 was involved.

NIOs that are completely dependent upon their member nations and would be unable to

do anything without their support are referred to as:

A. entity level NIOs.

B. semi-autonomous NIOs.

C. aggregate NIOs.

D. trans-national NIOs.

A statute that made burning a cross to rouse fear a criminal offence would be an

example of what type of crime?

A. Assault

B. Hate speech

C. Arson

D. Terrorism

Big Co. and Gantt Co. have entered into a contract for a long-term construction project.

The companies opt to use a partnering process to resolve disputes. The partnering

process between them will begin:

A. after the contract has been finalized, but before the project has begun.

B. when the first dispute between the two parties arises.

C. only if both mediation and arbitration procedures have failed.

D. once the project has begun and the parties are aware of possible problems.

Alan sells merchandise on credit to ABC Co. ABC fails to pay for the merchandise.

Alan later discovers that ABC is not a corporation, but a partnership consisting of Alice,

Betty, and Charles. Which legal doctrine might shield Alice, Betty, and Charles from

personal liability?

A. De facto corporation

B. De jure corporation

C. Corporation by estoppel

D. Piercing the corporate veil

An employment relationship based on a(n) ____________ is an employment

relationship that would have been at-will, had the employer not said or done something

that insinuated the existence of a contract.

A. collective bargaining agreement

B. implied contract

C. explicit contract

D. good faith and fair dealing agreement

Lizzie works as an entertainment journalist for a tabloid newspaper. The editor of a

competing tabloid tells her that if she produces a story defaming a television celebrity,

she will be given a job at the competing tabloid. After Lizzie produces the article and

publishes it in the tabloid she works for, the competing tabloid refuses to hire her.

Lizzie wants to bring a breach of contract lawsuit against the competing tabloid for not

hiring her. Which of the following is true of this case?

A. Lizzie has committed a crime and hence, cannot file a lawsuit.

B. Lizzie can bring forth a lawsuit, as her contract with the competing tabloid contained

all five elements.

C. Lizzie's contract has been executed; hence, the court is likely to award her damages

for breach of contract.

D. Lizzie has committed a tort and her contract with the competing tabloid will not be

upheld in the court.

State laws known as ____________ limit the time within which a party is allowed to

bring suit to collect a debt.

A. promises not to sue

B. charitable pledges

C. option contracts

D. statutes of limitation

A debtor who continues to run a business and performs most of the functions that a

trustee performs in other types of bankruptcy is called a(n):

A. debtor in bankruptcy.

B. debtor in possession.

C. unimpaired debtor.

D. suspended debtor.

In a general partnership, which of the following is true of limited partners?

A. Limited partners take an active part in the management of the firm.

B. A limited partner's nonpartnership property can be used to satisfy any debts owed by

the firm.

C. Limited partners are nonparticipating investors.

D. Limited partners have unlimited liability for the firm's debts.

If the only question a corporate manager asks before she takes an action is whether the

benefit to the shareholders will outweigh the cost to the corporation, she would most

likely using a(n) ____________ ethical model.

A. descriptive theory

B. concurrent validity

C. prescriptive theory

D. utility thinking

John takes leave under FMLA. Discuss the obligations of John's employer to John.

A credit card company has cheated one million cardholders out of 50 cents each.

Marlene, one of the defrauded cardholders, wants to sue the credit card company but

should attempt to:

A. approach the legislature for special suit legislation.

B. approach the U.S. Supreme Court to grant original jurisdiction.

C. bring a petition to the Congress signed by the cardholders.

D. bring a class action suit.

If an insured purchases a guaranteed insurability provision on a life insurance policy,

the:

A. insured is allowed to pay an extra initial premium in exchange for an assured option

to buy more insurance at certain specified times later with no questions asked.

B. insurer is allowed to excuse the insured from paying premiums if the insured

becomes disabled.

C. insured has to pay an extra $25 in exchange for a guarantee of coverage by the

insurance, should the insured become disabled.

D. insurer has to pay double the amount of the policy to the beneficiary if the insured

dies from accidental causes.

Cristina receives a new credit card from Seventh National Bank that does not provide a

means for a retailer to verify that the holder of the card is in fact authorized to use it.

The next day, Cristina discovers that she has lost her card. As soon as she discovers the

card is missing, she calls Seventh National to report the loss. Already, $620 worth of

unauthorized charges have been made on her credit card. Under the Truth-in-Lending

Act Cristina will:

A. have to pay for the entire $620 of unauthorized charges.

B. have to pay for $50 of the unauthorized charges.

C. not have to pay any amount of the unauthorized charges.

D. have to pay for 50% of the unauthorized charges.

Jason parked his car on a hill, but failed to set his parking brakes. The car rolled down

the hill and hit another car, damaging it significantly. The owner of the other car, Yang,

filed a lawsuit of negligence against Jason, who pledged that he had no intention of

damaging anybody's property and that he shouldn't be made to compensate. Discuss the

methods the court and the jury could use to arrive at a fair decision.

While visiting her uncle, Jackson remarked that she admired her uncle's collection of

rare books. Her uncle then said to her, "I've been meaning to tell you that I want you to

have them. Instead of leaving them to you in my will, I'm going to give them to you

right now. You can consider the books yours. However, please keep them here on my

shelves so that my library looks full." Would a court hold that Jackson owns the books?

Explain.

The Three Mile Island accident was a core meltdown in Unit2 (a pressurized water

reactor) of the Three Mile Island Nuclear Generating Station in Dauphin County,

Pennsylvania near Harrisburg, United States in 1979. It let large amounts of nuclear

reactor coolant escape. Which organization handles such cases and how does it ensure

that they are not repeated again?

Dave, a manager for Small Co., has authority to contract for credit sales of up to

$100,000. Dave decides to extend $300,000 of credit for Christmas merchandise to a

new customer with solid financial statements. Discuss if Small Co.

Emilio takes his unconscious friend Todd to the hospital. However, the hospital will

admit Todd only if someone can promise to pay Todd's medical bills. Emilio orally

promises to do so, and the hospital admits Todd. Discuss in detail whether or not this

statement is legally binding on Emilio and/or Todd.

Mullroy has complained to the local police about the vandalism in his neighborhood.

However, the police have taken little interest in curbing the vandalism, much to

Mullroy's disappointment. Determined to resolve the problem, Mullroy invites the local

sheriff to his daughter's birthday party and offers him free weekend dinners at Mullroy's

family restaurant if the sheriff promises to look into the vandalism problem. Discuss the

nature of consideration and contract in this case.

A demand negotiable note for $500 issued by Sabin and given to Norm is altered to

read $5,000 and subsequently presented for payment by Bridget, a holder in due course.

Discuss the case.

Justin, who is on a business trip 500 miles away from home, decides to try a "free"

Internet service that requires a credit card number and ends up costing $275. Justin

wants to contest this charge. Explain in detail what he should do.

Matrix, Inc. is considering opening a restaurant in Smallville and has located a prime

vacant land location that is for sale. Matrix wants to do some market research and

obtain financing for construction before purchasing the land, but is concerned that a

competitor, Zion, Inc., will purchase the land if Matrix does not act immediately. What

legal steps should Matrix take, short of purchasing the land now, to prevent Zion from

acting before them? Explain.

Sue wants to sell products on the Internet, but is concerned that she might be sued in a

distant state by a dissatisfied customer. How might Sue best design a website to avoid

this possibility?

Seth was the highest bidder for an antique chest at an auction sale. There was nothing to

indicate whether the auction was with or without reserve. The auctioneer withdrew the

chest from the auction without accepting Seth's bid because the bid was too low. Is the

auctioneer legally entitled to withdraw the chest from the sale? Explain.

Suri purchased a new laptop for $2,500 from Gadget World. To pay for it, she borrowed

money from ATS Finance, which took a security interest in the laptop by entering into a

security agreement with Suri. How will the security interest be perfected in this case?

On Saturday, Hussein purchases a sofa from Big Box Furniture Inc. who agrees to

deliver the sofa without charge to Hussein at 3 p.m. the following Monday. Hussein

forgets about the delivery and is not home at 3 p.m. on Monday when the Big Box

delivery truck arrives. The delivery truck takes the sofa back to the Big Box store where

it is destroyed in a fire that occurs at 9 p.m. Monday. Discuss the risk of loss in this

case.

Jones orally agreed to sell his iPad Air to McKay for $475. He tried later to back out of

the deal on the grounds that the oral agreement was unenforceable. Discuss the case.

Roxta Biscuits and Seven Eleven Supermarkets enter a contract where the

biscuit-making company will supply 1,000 biscuit packs a day at $50 each to the

supermarket chain for the next six months.

John is a director of both Small Co., with an aggregate worth of $75,000, and Medium

Co., with an aggregate worth of $7,500,000. Small and Medium are competitors in the

auto repair business. Discuss the legal implications of John's service.

Seventy shareholders of a large chemical plant entered into a pooling agreement to vote

against the corporation's plan to acquire a smaller chemical manufacturing company.

On the day of the vote, 25 of the shareholders in the pooling agreement broke the

agreement and voted for the acquisition. Brian, one of the shareholders in the pooling

agreement who voted against the acquisition, said he was going to bring a lawsuit for

breach of contract against the shareholders who broke the agreement. Can Brian expect

to win such a lawsuit? Why or why not?

Jackson, Thomas, and Susan are partners in an investment firm. There is a vote taken to

sell government bonds owned by the partnership, with Thomas and Susan opposed and

Jackson in favor. Jackson decides to sell the government bonds and the partnership

loses $50,000. Discuss Jackson's liability to the partnership.