Veggie Grocers orders by phone twenty cartons of canned beets from Organic Food
Packers, Inc. After ten cartons are delivered and accepted, Veggie repudiates the
contract. Organic can enforce the contract to
a. any extent because the order was placed orally.
b. no extent because the order was placed orally.
c. the extent of the ten accepted cartons.
d. the extent of the twenty ordered cartons.
Obie accuses Portia, a broker with QT Financial Services, of fraudulently inducing him
to invest in Risky Development Company, whose stock price declines in value. The
reliance that gives rise to liability for fraud requires
a. a subjective statement.
b. misrepresentation of a fact knowing that it is false.
c. puffery.
d. sellers talk.
Salt Corporation wants to acquire or merge with Pepper Corporation. Salt should
a. file a plan of merger with the secretary of state.
b. file an article of merger with Pepper.
c. make a tender offer to the shareholders of Pepper.
d. make a tender offer to the shareholders of Salt.
In certain instances of fraud, a court may “pierce the corporate veil to hold the
shareholders individually liable.
a. True
b. False
A click-on agreement is an agreement whose terms are expressed inside a box in which
the goods are packaged.
a. True
b. False
Prenuptial agreements are agreements made during a wedding ceremony that define
each partners duties to one another during the marriage.
a. True
b. False
Peter, an agent for Zippy Cars, Inc., writes a letter to Cassandra on March 1 stating that
he will sell her a 2011 Suburu Outback for $20,000 between March 1 and April 30.
Peters letter to Cassandra is
a. a firm offer.
b. an acceptance.
c. a bilateral contract.
d. a breach.
Albert buys a surround sound system from his neighbor George at Georges garage sale.
Albert writes George a check for $250 for the sound system. George is
a. the certifier.
b. the drawee.
c. the drawer.
d. the payee.
Evan is charged with a crime. Almost all federal courts and some state courts would not
hold Evan liable if, at the time of the offense, as a result of a mental disease or defect,
Evan lacked substantial capacity to
a. appreciate the wrongfulness of his conduct only.
b. appreciate the wrongfulness of his conduct and obey the law.
c. appreciate the wrongfulness of his conduct or obey the law.
d. obey the law only.
Because insurance law follows contract law, bad faith tort actions against insurers are
not allowed.
a. True
b. False
For a party to take by adverse possession, the partys possession must not be open,
visible, or notorious.
a. True
b. False
Beans Coffee & Cocoa Company makes and sells a chocolate-flavored coffee drink
under the name “CoCoCafe. Darkroast Java, Inc., later markets a similar drink under
the name “KoKoKafe. This is most likely
a. copyright infringement.
b. patent infringement.
c. trademark infringement.
d. a theft of trade secrets.
A delegator is a party who transfers his or her obligation under a contract to another
party.
a. True
b. False
Will and Jay form Northwest Air Express, a general partnership. The essential elements
of this partnership do not include
a. a sharing of profits and losses.
b. a joint ownership of the business.
c. an equal right to management in the business.
d. goodwill.
Kris wants one of Jasmines purebred Persian kittens. Kris signs an instrument in which
she promises to pay Jasmine for a kitten. The instrument will be negotiable if it is
payable in
a. goods of equal market value.
b. money.
c. any of the choices.
d. shares in stock.
Through tort law, society compensates those who suffer injuries as a result of others
wrongful conduct.
a. True
b. False
Sweets Store buys chocolate from Tasty Candies, Inc. The parties agree that the
chocolate will be shipped “F.O.B. Sweets via United Railroad Corporation. The
chocolate is lost in transit. The loss is suffered by
a. Sweets and Tasty, but not United.
b. Sweets only.
c. Sweets, Tasty, and United.
d. Tasty only.
A forged signature is effective as the signature of a drawer to the extent that is
resembles the drawers actual signature.
a. True
b. False
Fresh Cream, Inc., wants to make an initial public offering of securi-ties. Fresh believes
that it qualifies for an exemption under Regulation A from the full registration
requirement of the federal Securities Act of 1933.
Refer to Fact Pattern 26-1. Fresh decides to sell its new securities via the Internet. This
offering
a. will avoid the payment of commissions to brokers or underwriters.
b. is an investment scam.
c. is a Ponzi scheme.
d. constitutes insider trading.
Players Video Game Centers, Inc., wants to issue stock of $1 million in a single
offer-ing. Players must provide all investors with material in-forma-tion about itself, its
business, and its securities if
a. all investors are accredited.
b. under any circumstances.
c. any investors are accredited.
d. any investors are unaccredited.
In a suit against Knut, Largo obtains an injunction. This is
a. an order to do or to refrain from doing a particular act.
b. an order to perform what was promised.
c. a payment of money or property as compensation.
d. the cancellation of a contract.
Patricia commits an act via e-mail against Othman Finance Company, a business in
California, where the act is a cyber crime. Patricia resides in New York where the act is
not a crime. Prosecution of Patricia in California involves questions of
a. jurisdiction.
b. “maximum contacts.
c. the immunity of Internet service providers.
d. encryption.
Edgar, Jon and Phoebe do business as Reliable Movers. Phoebe develops a debilitating
illness and can no longer work. Phoebe
a. may dissociate from the partnership.
b. may not dissociate from the partnership without Edgar and Jons consent.
c. must pay damages to Edgar and Jon for the loss of her work.
d. may terminate the partnership.
A secured party can release any col-lateral described in the financing statement, thereby
terminating its security interest in that collateral.
a. True
b. False
All employers must provide their employees with up to twelve months of family or
medical leave.
a. True
b. False
Employees who deal with third parties are agents of their employers.
a. True
b. False
The basis for India to give effect to the laws and court decisions of the United States is
primarily
a. courtesy and respect.
b. fear and intimidation.
c. admiration and envy.
d. payments of cash and exchanges of property.
A person who enters into a contract when he or she is intoxicated can void the contract
under any circumstances.
a. True
b. False
Which of the following is considered personal property
a. Stocks and bonds
b. Land
c. A garage
d. A boundary fence
All forms of gambling are legal in all states.
a. True
b. False
KupaJava hires Lola to manage one of KupaJavas seven drive-through coffee stands.
KupaJava agrees to pay Lola a salary, plus commission. KupaJava stipulates the
standards that should be observed, the goals that should be attained, and the methods
that should be used. Lola is most likely KupaJavas
a. employee.
b. independent contractor.
c. principal.
d. power of attorney.
A certification mark distinguishes products approved, or “certified, by the government.
a. True
b. False
Toyoda Company buys gas pedals and other parts from suppliers and puts them in its
vehicles without changing their composition. If the pedals or other parts are defective,
strictly liable for any damage caused by the defects are
a. neither Toyoda nor the suppliers.
b. Toyoda and the suppliers.
c. thesuppliers only.
d. Toyoda only.
A bank is not obligated to pay an uncertified check presented less than six months from
its date.
a. True
b. False
A federal law regarding the labeling of pesticides directly conflicts with a state law. The
state law will be rendered invalid due to
a. the supremacy clause.
b. the commerce clause.
c. the federal spending power.
d. the federal spending power.