Convenience Mart, Inc., is a closely held corporation. Convenience Mart is
a. eligible to make public offerings of securities.
b. exempt from filing a certificate of incorporation.
c. generally allowed to restrict the transfer of its stock.
d. taxed in the same manner as a partnership.
Sylvia is an officer of Triad Hotel Company. As an officer, with respect to the
corporation, Sylvia is
a. a fiduciary.
b. a forum.
c. a proxy.
d. a quorum.
Creekside Property Corporation enters into a contract with Downstream Management
Associates to manage and maintain Creekside’s apartment complex. Their contract
provides that neither party can recover damages for a non-fraudulent or unintentional
breach. This is
a. a limitation-of-liability clause.
b. an exculpatory clause.
c. an illegal clause.
d. a quasi contract.
Kim uses, on her new recording Let’s Go, the guitar solo from Malcolm’s digital sound
recording without his permission. This is
a. copyright infringement.
b. fair use.
c. licensing.
d. protected expression.
Vacation Vistas, Inc., agrees to sell certain acreage to Umiko, who intends to develop a
destination resort. Vacation Vistas repudiates the deal. Umiko sues Vacation Vistas and
recovers damages. She can now obtain
a. an amount in a quasi-contractual recovery.
b. damages representing restitution.
c. specific performance of the deal.
d. nothing more.
Eden, the chief executive officer of Flo-Thru Piping Corporation, wants to ensure that
Flo-Thru’s activities are legal and ethical. The best course for Eden and Flo-Thru is to
act in
a. good faith.
b. ignorance of the law.
c. regard for the firm’s shareholders only.
d. their own self interest.
Myra owns a house, which she advertises for sale for $400,000. On May 1, Nico offers
Myra $380,000 for the house. On May 5, Myra has delivered to Nico at his office a
form that includes additional terms but does not state a price. At 9 a.m. on May 6, Nico
signs the form and gives it to Odell, his administrative assistant, with instructions to
mail it. At 10 a.m., Myra calls to tell Nico that the deal is off. The next day, Odell mails
the signed form to Myra. When she refuses to sell the house to Nico, he files a suit
against her, alleging breach of contract. Myra claims that there was no contract. What
are arguments supporting each party’s position? What is the court likely to rule?
Explain.
Mariah works in the public relations department of New Trends Sales Company. Her
job includes portraying New Trends’s activities in their best light. In this context, ethics
consist of
a. a different set of principles from those that apply to other activities.
b. the same moral principles that apply to non-business activities.
c. those principles that produce the most favorable financial outcome.
d. whatever saves New Trends’s “face.”
To Serena, the written law of a particular society at a particular time is most significant.
Serena is
a. a legal positivist.
b. a legal rationalist.
c. a legal realist.
d. a person who adheres to the natural law tradition.
Oak Valley Mall contains two video game stores, Pirates Pick and Game Quest.
Pirates’s manager Ryan stands in the mall near Game Quest’s entrance to divert
customers to his store. Game Quest’s manager Sara asks Ryan to leave. He refuses.
Ryan has committed
a. conversion.
b. no tort.
c. trespass to land.
d. wrongful interference with a business relationship.
In an emergency situation, Milena, an emergency medical technician, renders aid to
Lothar, who needs help. Lothar would most likely be prohibited from suing Milena for
negligence under
a. any circumstances.
b. a Good Samaritan statute.
c. a social host statute.
d. no circumstances.
Raw Material, Inc., and Sewn Fabric Corporation enter into a contract for a sale of
muslin. The terms do not clearly indicate whether it is a destination or shipment
contract. A court would most likely presume that it is
a. a bailment contract.
b. a destination contract.
c. a shipment contract.
d. a transportation contract.
Flem, a user of GameCenter.com’s Web site, can download gaming software for free if
he first clicks on “I accept” after viewing certain terms. This is
a. a contract that does not include the terms.
b. a contract that includes the terms.
c. not a contract but the terms are enforceable.
d. unenforceable.
Bill offers to sell his Consumer Service Center business to Dina for $100,000. Dina
replies, “The price is too high. I will buy it for $90,000.” Dina has
a. accepted the offer.
b. made a counteroffer without rejecting the offer.
c. rejected the offer and made a counteroffer.
d. rejected the offer without making a counteroffer.
Trevor’s business is The Spicy Chocolatier Café chain. “The Spicy Chocolatier Café” is
a. a certification mark.
b. a collective mark.
c. a service mark.
d. a trade name.
Sustainable Café LLC is a limited liability company. Like any other LLC, unless
Sustainable Café chooses otherwise, the firm will be taxed as
a. a corporation.
b. a sole proprietorship.
c. a partnership.
d. none of the choices.
Glen and Hadley sign a written contract. Glen claims that the parties later orally agreed
to modify the contract. Any oral modification is likely not enforceable if it falls under
a. the doctrine of promissory estoppel.
b. the “main purpose” exception.
c. the “partial performance” exception.
d. the Statute of Frauds.
The Tourist Travelers Association wants the federal government to spend money to
build a new highway. Congress can spend revenues
a. only to carry out its enumerated powers.
b. to promote any objective that it deems worthwhile.
c. as long as the funds are spent uniformly among the states.
d. without regard to whether the expense violates the Constitution.
Domino causes a disturbance at El Nino Cafe. He is arrested and charged with
disorderly conduct, a misdemeanor. A misdemeanor is a crime punishable by
a. a fine only.
b. imprisonment up to one year.
c. imprisonment up to six months.
d. imprisonment up to ten days.
Electric Autos, Inc., sells cars to consumers. To avoid liability for oral express
warranties, each sales agreement should note that a car is sold
a. as is.
b. in perfect condition.
c. subject to warranties included in the written contract only.
d. with no known defects.
Rally Corporation enters into a contract to sell ski gear to SnoSportz Company, which
sells a pair of the skis to Tyra, a consumer, who later sells them to Uli, another
consumer. Article 2 of the UCC applies to the sales transactions between
a. all of the buyers and sellers.
b. Rally and SnoSportz only.
c. SnoSportz and Tyra only.
d. Tyra and Uli only.
Guy and Hanna do business as G-H Associates. If G-H is a partnership, it is governed
by the Uniform Partnership Act
a. in the absence of an express agreement.
b. in the absence of an implied agreement.
c. only in the presence of an express agreement.
d. under all circumstances.
Desi starts up eSites, an Internet service, and leases office space in a building owned by
Fred. The lease requires Desi to pay Fred a base rental of $1,250, plus 10 percent of
eSites’ profits, each month. The term is two years. Desi hires Gwen to work at eSites’
tech support desk at an hourly wage of $12.50, plus a commission of 10 percent of the
profits. The term is also two years.
. Desi and Gwen are
a. not partners, because Gwen does not have an ownership interest or management
rights in eSites.
b. not partners, because the pay includes an hourly wage.
c. not partners, because the pay includes only 10 percent of the profits.
d. partners in a partnership for two years.
Over the course of a year, Real Deal Corporation sells appliances to customers to whom
it extends credit. Real Deal orders the appliances from Superior Appliance Company’s
warehouse, from which the items are shipped via common carrier to Real Deal’s
customers. Article 2 of the UCC governs
a. all of the parties’ sales of the goods.
b. Real Deal’s extension of credit.
c. Superior’s storage of the goods.
d. the common carrier’s delivery of the goods.
Bell Medical Education Service enters into a contract to employ Chris as an instructor
for two years to begin May 1. One month before the term begins, Bell is underbid by a
competitor and loses a major client, Delta Hospital Center. Bell now refuses to hire
Chris.
Bell’s repudiation is most likely
a. a material breach.
b. a minor breach.
c. Chris’s breach.
d. no breach.
Mountain Bikes, Inc. (MBI), and Nero enter into a contract for a sale of a mountain
bike. MBI, a merchant who deals in goods of the kind sold, makes implied and express
warranties in connection with the sale. The Magnuson-Moss Warranty Act attempts to
prevent deception in warranties by
a. displacing the UCC as the primary source of warranty rules.
b. making warranties easier to understand.
c. prohibiting disclaimers of warranties.
d. requiring sellers to give written warranties for consumer goods.
The Ohio state legislature passes a law to regulate local delivery services. The final
authority regarding the constitutionality of this law is
a. the judicial system.
b. the president of the United States.
c. the governor of Ohio.
d. the U.S. Congress.
Massive Equipment Company and Wastewater Management Corporation agree in
writing to submit a dispute to arbitration. In most circumstances, submission to
arbitration is possible
a. for any commercial matter.
b. for no commercial matter.
c. only after a dispute arises.
d. only before a dispute arises.
Xtreme Publications, Inc., disseminates obscene materials. This is
a. a crime under numerous state and federal statutes.
b. a privilege under Article IV, Section 2.
c a right under the commerce clause.
d. a right under the First Amendment.
Quinn is a state court judge. In the case of Royal Banners, Inc. v. Superior Flags Co.,
Quinn establishes a logical relationship by comparing the facts in the case to the facts in
other cases and, to the extent the facts are similar, applies the same rule. This is
a. deductive reasoning.
b. faulty reasoning.
c. linear reasoning.
d. reasoning by analogy.
Randy and Beach Biz Company enter into an oral contract under which Randy agrees to
clean Beach Biz’s office for two years. This contract is enforceable by
a. Randy only.
b. Beach Biz only.
c. either party.
d. neither party.
In 2011, Sara writes Terror at the Track, a novel about racecar driving. Sara does not
register the work with the appropriate government office. Under federal copyright law,
Sara’s work is protected
a. for ten years.
b. for twenty years.
c. for the life of the author plus seventy years.
d. forever.
Mica, a minor, signs a contract to pay Natural Health Club a monthly fee for
twenty-four months to use its facilities. Six months later, after reaching the age of
majority, Mica continues to use the club. This act is
a. a disaffirmance.
b. an emancipation.
c. a ratification.
d. a necessary.
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.
If a buyer wrongfully refuses to accept goods that conform to a contract, the seller can
maintain an action to recover the damages sustained.
A person assumes all risks associated with any activity in which he or she participates.
General Construction Company (GCC) tells Industrial Supplies, Inc., that it needs an
adhesive to do a particular job. Industrial provides a five-gallon bucket of a certain
brand. When it does not perform to GCC’s specifications, GCC sues Industrial, which
claims, “We didn’t expressly promise anything.” What should GCC argue?
A principal who authorizes an agent to commit a tort is not liable to persons or property
injured thereby.
Substantive due process limits what the government can do in its legislative capacity.
A state constitution is supreme within the state’s borders.
Cody signs and returns a letter from Deb, referring to Deb’s Double-D Ranch and its
price. When Cody attempts to complete the deal, Deb refuses, claiming that they have
no contract. Cody claims they do. What standard determines whether these parties have
a contract?
A merchant can disclaim an implied warranty of merchantability.
Kino sees a DVD player on the porch of Lulu’s house, takes the player to his home, and
tells everyone he owns it. Maya, holding a knife, forces Nick to give her his boom box,
and runs away with it. Ollie breaks into Pam’s apartment, takes a computer, and leaves.
Quico sells Randi an expensive wristwatch for a fraction of its value, admitting that the
watch is stolen property but claiming that he is not the thief. Which of these acts are
crimes, and what are the differences among them?
A seller must provide a written warranty for consumer goods.
Any third party beneficiary to a contract who is not an intended beneficiary is
incidental.
Harbor Bay Development hires Guthrie to act as its agent to buy a 100-acre waterfront
tract of land from Frankie for $1,000 per acre. Harbor Bay does not want Frankie to
know that it is the principal or that Guthrie is its agent. Harbor Bay wants the land for a
new marina, and believes that Frankie may not sell the land for that purpose or may
demand a premium price. Guthrie makes the purchase, signing only his name on the
contract as the buyer and not disclosing to Frankie the agency relationship. Harbor Bay
gives Guthrie the amount to pay for the land, but Guthrie absconds with the funds.
Frankie soon learns of Harbor Bay’s identity. Can Frankie enforce the contract against
Harbor Bay? against Guthrie?
Any event that makes its unlawful for a partnership to continue its business will result
in dissolution.
The first step in the incorporation process is to select a state in which to operate.
Forcing someone to enter into a contract through fear created by threats is undue
influence.