Shelby offers to make digital copies of Relay Company’s business conference
videotapes, CDs, DVDs, and other media for $500. Under the mailbox rule, Relay’s
acceptance by e-mail will be considered effective when
a. received.
b. sent.
c. followed up by a confirmation letter sent by regular mail.
d. composed on a Relay computer.
Congress leaves it to the Environmental Protection Agency to regulate the highly
technical areas of air and water pollution. This is
a. the constitutional principle of checks and balances.
b. a delegation of tasks.
c. arbitrary and capricious.
d. a conflict with state administrative agencies, which take precedence.
Ground Minerals, Inc. and SuperSupplements, Inc. enter into an oral contract for the
purchase of mineral rights to a piece of property owned by Ground Minerals. Ground
Minerals then refuses to allow SuperSupplements to extract minerals from the property.
SuperSupplements files suit against Ground Minerals for breach of contract. Ground
Minerals can use the __________ as a defense.
a. Uniform Commercial Code
b. Statute of Frauds
c. One-Year Rule
d. Main Purpose Rule
To pay for a previous order of apples, oranges and pears, Bella signs a check that is
payable to “Sweet Fruit Co. or order.” This check is
a. negotiable.
b. nonnegotiable, because it is not payable to a specific person.
c. nonnegotiable, because it is not payable “to the order of Sweet Fruit Co.”.
d. nonnegotiable, because it is issued to pay for a previous order.
Lovey is a shareholder of Matchless Corporation with preemptive rights. With these
rights, Lovey can
a. buy a prorated share of a new issue of stock before other buyers.
b. choose to have Matchless act exclusively in a certain area.
c. “preempt” managerial decisions that affect shareholders.
d. sell a prorated share of a new issue of stock before other sellers.
Levi’s Toy Store orders one hundred board games from Big Board Games Warehouse.
When the games are delivered, they are all missing pieces. Levi’s Toy Store rejects the
shipment. Big Board Games wants to cure. Big Board Games must
a. promptly notify Levi’s Toy Store of the intent to cure.
b. pay Levi’s Toy store a cure fee.
c. send a truck to pick up the nonconforming goods before the end of the business day.
d. create a new contract with Levi’s Toy Store.
Interstate Coffee Brokers, Inc. (ICBI), offers to sell Java Roasters, Inc., fifty bags of
coffee beans. Java rejects the offer. The offer is
a. terminated.
b. valid for a reasonable time to give Java a ‘second chance.”
c. valid for the period of time prescribed by a state statute.
d. valid until ICBI revokes the offer.
U-Rents Company wants to insure the equipment that it rents to consumers. To obtain
insurance, U-Rents must have an insurable interest in the property
a. at any time.
b. at the time a loss occurs.
c. at the time a policy is obtained.
d. continuously from the time a policy is obtained to the time a loss occurs.
Iggy hires Joy to act as his agent to purchase Kup-a-Koffee Company. Iggy tells Joy to
reveal only that she is buying the firm on behalf of a third party, without telling
Kup-a-Koffee’s seller who that third party is. Iggy is
a. a disclosed principal.
b. an implied principal.
c. an undisclosed principal.
d. a partially disclosed principal.
Bobbie claims that Carly breached their contract. Carly responds that she never
intended to enter into a contract with Bobbie. The intent to enter into a contract is
determined with reference to
a. the conscious theory of contracts.
b. the objective theory of contracts.
c. the personal theory of contracts.
d. the subjective theory of contracts.
In making business decisions, Glenda, personnel manager for HVAC Maintenance, Inc.,
applies her belief that all persons have fundamental rights. This is
a. a religious rule.
b. the categorical imperative.
c. the principle of rights.
d. utilitarianism.
Imperio Caffeine Corporation makes and sells coffee under a variety of brand names.
Imperio wants to merge with Java Company, its main competitor. In weighing a
challenge to the deal, a court looks at the relevant product market. This most likely
includes coffee and
a. no other products.
b. products that are not identical but are related, such as spin-offs.
c. products that are sometimes substituted for coffee.
d. products with identical attributes only.
Idle Investments, Inc., and Harbor Bank are secured parties with security interests in
property owned by GR8 Manufacturing Corporation. Priority between these security
interests is generally determined by
a. the amount of the claim.
b. the custom in the trade.
c. the time of perfection.
d. the time the security agreement was signed.
Phyllis applies for a loan from Crystal Bank. Crystal Bank provides Phyllis with all of
the appropriate documents required by the Truth-in-Lending Act. Phyllis does not read
the documents. An agent from Crystal Bank orally misrepresents the terms of the loan
to Phyllis. Phyllis can
a. claim fraud.
b. not claim fraud.
c. claim fraud if she can prove that the agent intended to deceive her.
d. claim fraud if she does so within three days of receiving the documents.
Fay pays $800 for a new iPad to Global Goods, Inc. Global holds the iPad until Fay
picks it up. Global is
a. a bailee.
b. a consignee.
c. a lessee.
d. a seller.
The Pennsylvania legislature enacts a state law that violates the U.S. Constitution. This
law can be enforced by
a. no one.
b. the federal government only.
c. the state of Pennsylvania only.
d. the United States Supreme Court only.
Aromatic Tea Company and Savory Stores, Inc., enter into a contract for a sale of tea.
The contract includes the term “F.O.B. Upriver City,” which is Savory’s location. This
means that the contract is
a. a bailment contract.
b. a destination contract.
c. a shipment contract.
d. a transportation contract.
Dana defaults on a debt to Rachel. Rachel will NOT be able to recover the debt from
a. the sale of Dana’s prize winning pet dog.
b. the sale of Dana’s investments in stocks.
c. Dana’s wages.
d. Dana’s lottery winnings.
Which of the following is NOT a requirement for a party who is secondarily liable for a
negotiable instrument to pay on the instrument?
a. The instrument is properly and timely presented
b. The instrument is dishonored
c. The instrument is transferred
d. Timely notice of dishonor is given to the secondarily liable party
The National Conference of Commissioners on Uniform State Laws was formed
because
a. conflicting state statutes frequently made trade and commerce between states very
difficult.
b. the Eleventh Amendment of the U.S. Constitution required it.
c. Congress wanted to create a uniform set of laws for interstate commerce.
d. President Grover Cleveland ordered it.
Staffing Solutions Corporation is subject to the Social Security Act, which
a. covers only employees who do not receive employer-paid pensions.
b. governs state unemployment compensation funds.
c. provides retirement, survivors, and disability insurance.
d. regulates disputes between unions and management.
David’s Diamonds, Inc. is hiring a new clerk and interviews four applicants. Phillip has
AIDS, Josie has heart disease, Martha is a kleptomaniac and George has diabetes.
Under the Americans with Disabilities Act, all of the applicants are considered disabled
except
a. Phillip.
b. Martha.
c. George.
d. Josie.
Brad is an employee of Custodial Service, Inc. In deciding whether Brad acts within the
scope of his employment when he commits a tort against Didi, a court will not consider
whether
a. Brad was acting within the scope of the agency.
b. Brad was acting within the scope of his employment.
c. Custodial authorized the act.
d. Custodial was personally at fault.
Harold applies for a mortgage loan. The fees for the loan are 10 percent of the loan
amount. Harold’s loan
a. can qualify for protection under the Home Ownership and Equity Protection Act.
b. cannot qualify for protection under the Home Ownership and Equity Protection Act.
c. is illegal in some states.
d. is illegal in all states.
During a union election campaign, Sapphire Blue Finance Company prohibits on-site
solicitations by Credit Workers Union, which is seeking the workers’ unionization,
while permitting charities to solicit the same workers. This violates
a. federal labor law.
b. federal elections law.
c. federal employment discrimination law.
d. no federal law.
Mead, Nero, and Olen do business as Pipe & Plumbing Services. After Mead’s
relationship to the firm ends, Nero and Olen agree to discontinue the business. This is
a. dissociation.
b. dissolution.
c. gross negligence.
d. simple misconduct.
Gourmet Foods, Inc., requires all distributors of its products to sell them at a specified
minimum price. Under the Sherman Act, this is a violation
a. if the anticompetitive effects outweigh the competitive benefits.
b. if the competitive benefits outweigh the anticompetitive effects.
c. under any circumstances.
d. under no circumstances.
Mabel files a petition in bankruptcy. The initial proceeding on this petition will be in
a. a federal bankruptcy court.
b. a state bankruptcy court.
c. the highest court in the state in which Mabel is located.
d. the United States Supreme Court.
Julia has a home valued at $150,000. She owes $100,000 on her mortgage. Julia can
obtain a home equity loan for up to
a. $50,000.
b. $100,000.
c. $150,000.
d. $300,000.
The Tenth Amendment of the U.S. Constitution
a. defines the powers and limitations of the federal government.
b. gives state law precedence over federal law.
c. gives the federal government the power to tax state governments.
d. gives all citizens the right to bear arms.
Elections for union officers are regulated by
a. the Labor-Management Relations Act.
b. the Civil Rights Act.
c. the Labor-Management Reporting and Disclosure Act.
d. no federal law.
A written stop payment order is only valid for thirty days.
A court may depart from a precedent if the precedent is no longer valid.
There is really no reason to be acquainted with business laws and government
regulations, except to pass this test.
Cody signs and returns a letter from Dora, referring to Dora’s Bar-D Ranch and its
price. When Cody attempts to complete the deal, Dora refuses, claiming that they have
no contract. Cody claims they do. What standard determines whether these parties have
a contract?
Click-on agreements are NOT the Internet equivalents of shrink-wrap agreements.
A partnership cannot be a shareholder in an S corporation.
All parties to a contract have a duty to disclose all facts that might be of interest to the
other parties, even if they are not expressly asked to do so.
Creative Solutions Corporation (CSC) sells business application softwareaccounting
and bookkeeping programs, blank business forms, inventory control functions, and so
onin different combinations, in different packages, at different prices, downloadable
online. To complete a deal, a purchaser clicks on a button that, with reference to certain
terms, states, “I agree.” What is this sort of agreement called? Do the parties have a
binding, enforceable contract that includes the terms? Explain.
Often, when both parties to a contract are mistaken as to the same material fact, either
party can rescind the contract.
A point-of-sale system is a type of electronic fund transfer system.
To support the imposition of strict product liability, a product must be substantially
changed from the time it is sold to the time an injury occurs.
A personal check cannot be a negotiable instrument.
Automobile insurance can be canceled for suspension of the insured’s driver’s license.
A power of attorney can be given only to an actual attorney.
An “infant” is a legal term for a minor.
In a transaction for the sale of a warehouse, Standard Storage Company tells Tri-County
Investment Corporation that the office furniture is included. The contract says nothing
about office furniture, but does state, “This document supersedes all oral promises
relating to the sale.” Is the furniture part of the sale? Why or why not?
An answer never admits to the allegations made in a complaint.