Sights Unseen, Inc., (SUI) sells telescopes with distinctively designed lenses and
mirrors. Later, without SUI’s permission, Telescopes Etc. Corporation begins to sell
scopes with identical structures of lenses and mirrors. This is most likely
a. copyright infringement.
b. patent infringement.
c. trademark infringement.
d. not infringement.
Cory believes that he and Dian agreed that he would act as her personal sports trainer
for seven workout sessions. In a later dispute, the existence of any contract can be
judged by
a. the partie’ intent as expressed in their contract.
b. what the defendant claims was the partie’ intent.
c. what the plaintiff claims was the partie’ intent.
d. what the parties agree they intended.
Trevor’s operates The Spicy Chocolatier Café chain of restaurants. “The Spicy
Chocolatier Café” is a
a. certification mark.
b. collective mark.
c. service mark.
d. trade name.
After Edie solicits clients to invest in a nonexistent business, she is charged with “mail
fraud.” This requires, among other things,
a. claiming that an item is “in the mail” when it is not.
b. deceiving postal authorities as to the content of an item of mail.
c. depositing items in the postal system without proper postage.
d. mailing or causing someone else to mail a writing.
George and James create an agency relationship to facilitate the sale of illegal narcotics.
This agency relationship
a. is illegal.
b. is legal.
c. will be recognized by some states, but not others.
d. can exist, but will be subject to sanctions for illegal activity.
ViolentVideoGames, Inc. markets a variety of shooting, fighting and hunting video
games. A state statue is enacted that requires all video game manufacturers to label any
games with an option to kill something as “excessively violent.” A court would likely
hold this regulation to be
a. an unconstitutional restriction of speech.
b. constitutional under the First Amendment.
c. justified by the need to protect individual rights.
d. necessary to protect national interests.
Clear Lake Credit Corporation lends funds to Donny, a consumer, to apply to the cost of
a boat, which is the collateral for the loan. An enforceable security interest requires
a. a written agreement and Clear Lake’s possession of the boat.
b. a written agreement or Clear Lake’s possession of the boat.
c. the boat seller’s acknowledgement of the loan in writing.
d. Donny’s possession of the boat.
Dave is an officer for Sweet Somethings Candies, Inc. In 2012, chocolate hearts were
very popular. Acting within his managerial authority and the powers of the corporation,
Dave signs a contract for an increase in chocolate heart production for 2013. In 2013
chocolate hearts do not sell well and Sweet Somethings Candies loses money. Dave is
most likely
a. liable for breach of duty of care.
b. liable for breach of duty of loyalty.
c. none of the choices.
d. liable for violation of the business judgment rule.
Ivan signs Jeb’s name, without his authorization, to the back of a check.
This is
a. no crime.
b. forgery.
c. larceny.
d. robbery.
Lionel files a voluntary petition for bankruptcy under Chapter 7. The court will likely
deny a discharge of Lionel’s debts if he
a. conceals records of his financial condition with the intent to defraud a creditor.
b. does not have sufficient assets to pay all his secured creditors.
c. filed for bankruptcy twelve years ago.
d. has a criminal record.
Big Red Drinks, Inc. contracts to buy two tons of cranberries from Super Fruits, Inc.
The contract states that Super Fruits is required to ship the cranberries to Big Red
Drinks by Speedy Wind Air Freight. The contract is
a. a bill of lading.
b. a destination contract.
c. a shipment contract.
d. a warehouse receipt.
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.
Dina asks Edie to co-sign a credit application so that she can borrow money and buy a
truck from First Street Motors. If, after the loan agreement is signed, Dina agrees to a
higher rate of interest without telling Edie, then Edie is
a. discharged from the agreement.
b. liable at the higher rate of interest.
c. liable at the lower rate of interest.
d. liable for the principal only.
Jay files a bankruptcy petition under Chapter 7. Among his debts are unpaid taxes, fines
owed to the government, student loans owed to Mega University, and support owed to
his ex-wife Kris. Most likely to be discharged are
a. the back taxes if they accrued within the previous three years.
b. the fines if they have been outstanding less than eight years.
c. the student loans if their payment would impose undue hardship.
d. the support debts.
Bilt-Well Construction Corporation makes a side payment to a government official in
Nigeria to obtain a contract. In the United States, this is
a. illegal and unethical.
b. illegal but not unethical.
c. unethical but not illegal.
d. legal and ethical.
Debit & Credit Accounting Services and Brickwork Construction Company negotiate a
contract. Terms in the contract that are the subject of separate negotiation will be con-
sidered subordinate to
a. standardized terms.
b. terms that can be understood only by lawyers and judges.
c. terms that are not negotiated separately.
d. none of the choices.
Jin, Karlo, and other consumers form Metro Purchasing Cooperative. This form of
business organization makes it possible for these individuals to
a. avoid personal liability for the acts of the cooperative.
b. obtain an exemption from state laws governing corporations.
c. pay no taxes on their business income.
d. pool their resources to gain an advantage in the market.
Laney is a resident of Maine. Delacorte is a Canadian. They dispute the ownership of
Petite Isle, an island in North Rapids River on the border between Canada and the
United States. The diversity of the partie’ citizenship could serve as a basis for
a. federal jurisdiction.
b. general jurisdiction.
c. limited jurisdiction.
d. universal jurisdiction.
Consumer Credit, Inc. (CCI), lends $1,000 to Joe. Kay acts as Joe’s surety. If Kay pays
the loan, she gets
a. any right that CCI had against Joe, but not a right to be reimbursed by Joe.
b. a right to be reimbursed by Joe, but not any right that CCI had against Joe.
c. any right that CCI had against Joe and a right to be reimbursed by Joe.
d. none of the choices.
Jason and Katrina work on the loading dock for Longhaul Transport Company. Jason
has a disability. Katrina has seniority. Jason asks for a transfer, which would represent
an accommodation for his disability. Longhaul gives the transfer to Katrina on the basis
of her seniority. Jason files a suit against Longhaul for discrimination on the basis of his
disability. The court is most likely to rule that
a. Katrina’s seniority is a good defense.
b. Jason’s disability is a sufficient basis for relief.
c. Longhaul’s action was a business necessity.
d. Longhaul’s action was a reasonable accommodation.
Silas sells his farm to Kathy. The title is transferred by deed. Kathy is the
a. grantee.
b. grantor.
c. tenant.
d. adverse possessor.
Lorna borrows $175,000 from Mountainside Credit Union to buy a home. Among the
terms that must be disclosed under federal law is the annual percentage rate. This is
a. the actual cost of the loan on a yearly basis.
b. the average prime offer rate.
c. the interest rate at which the loan is made.
d. the loan principal.
Much of American law is based on
a. the English legal system.
b. the Spanish legal system.
c. the civil law of the Greeks.
d. Ancient Chinese law.
Clutch Auto Parts enters into a contract with Bio Health Club for discounted
memberships for Clutch’s employees. Bio breaches the contract and Clutch enters into a
contract with Apex Fitness for the same service at a lower price. Clutch might be
awarded nominal damages to
a. establish, as a matter of principle, that Bio acted wrongfully.
b. provide Clutch with funds for a foreseeable loss beyond the contract.
c. provide Clutch with funds for its loss of the bargain.
d. punish Bio and set an example to deter others from similar acts.
Grace purchases three tons of fine merino wool on behalf of Woolen Creations. Woolen
Creations wants the wool to remain in the warehouse where it is being stored until it is
needed. Grace makes an offer for the wool on Monday. The offer is accepted on
Tuesday. The warehouser gives Woolen Creations a warehouse receipt on Wednesday.
Woolen Creations picks up the wool from the warehouse three months after the sale.
Title for the wool passed to Woolen creations
a. on Monday.
b. on Tuesday.
c. on Wednesday.
d. three months after the sale.
The Constitution sets out the authority and the limits of the branches of the government.
The term checks and balances means that
a. Congress writes checks and the other branches balance the budget.
b. each branch has some power to limit the actions of the others.
c. the courts balance their authority to the other branche’ checklists.
d. the president “checks” the courts, which “balance” the laws.
Lou uses undue influence to induce Mona to sign a contract to invest her student loan
funds in National Overseas Bank. Mona may
a. avoid the contract or choose to carry it out.
b. do nothing once she has signed the contract.
c. recover from her lender for a failure to influence her “due.”
d. recover from the bank for a failure to undo Lou’s influence.
Ski Resorts, Inc., wants to add a new run to its facility in a national park on federal
land. For this action, an environmental impact statement is
a. prohibited.
b. required.
c. unnecessary.
d. voluntary.
Kai files a suit against Lana based on one of Lana’s statements that Kai alleges is
fraudulent. To give rise to fraud, the statement must be one of
a. emotion.
b. fact.
c. illusion.
d. opinion.
Heavy Hauling, Inc., is a public company whose shares are traded in the public
securities markets. Under the Sarbanes-Oxley Act of 2002, to ensure that Heavy
Hauling’s financial results are accurate and timely, the firm’s senior officers must set up
and maintain
a. internal “disclosure controls and procedures.”
b. external “release and reveal timetables.”
c. personal “peruse and review liability policies.”
d. public “information and discussion forums.”
A primary obligation is created when a party agrees to pay for something on the
condition that a certain other party does not make the payment.
Banks may not assign their loan contracts to other firms.
If a principal does not ratify an authorized contract, the principal is not bound.
Federal law permits a partnership to be treated as an entity in suits in federal courts.
The primary responsibility for preventing and controlling air pollution rests with the
federal government.
A restraint of trade is an agreement between firms that has the effect of reducing
competition in the marketplace.
A lease is enforceable even if the premises are intended for an illegal purpose.
The implied warranty of habitability does not apply to substantial physical defects that a
landlord has had a reasonable time to repair.
A business firm may have an insurable interest in the life of any of its employees,
except a key employee.
An opinion that disclaims any liability for false or misleading financial statements is too
general.
The Internet is changing the notion of the size and limits of a relevant geographic
market.
State laws regarding corporations are uniform.
Buying or selling securities on the basis of nonpublic information is illegal only if the
profit from the transaction is unreasonable.
Beta Software Company and Gamma Sales Corporation agree to follow a certain
security procedure in transacting their business online. Beta fails to follow the
procedure, however. Due to this failure, Beta does not detect an error in the deal, which
will have a negative impact on Gamma’s interest in the deal. Can Gamma avoid the
effect of this error? How?
Information that is not or cannot be protected under trademark, patent, or copyright law
may be protected under the law of trade secrets.