Readmore Bookstore Corporation files a registration statement with the Securities and
Exchange Commission and provides a prospectus describing the securities to investors.
These items are intended to provide sufficient information so that the financial risks
involved can be evaluated by
a. market professionals to explain to all investors.
b. government regulators to disclose to the general public.
c. sophisticated investors only.
d. unsophisticated investors.
Tyrone draws a check payable to “Cash and presents it to United Bank for payment.
This instrument is
a. a bearer instrument.
b. an order instrument.
c. valid but nonnegotiable.
d. void.
Pola develops a new espresso machine, which she names “Quik Shot. She also writes
the operating manual. Pola can obtain trademark protection for
a. the espresso machine.
b. the “newness of the espresso machine.
c. the name.
d. the operating manual.
Ben and Ivy enter into a contract under which Ben agrees to cater Ivys wedding in
exchange for a cash down payment. The contract expressly prohibits any transfer of
rights. A contract right may be transferred, however, if the transfer involves
a. a right to receive payment.
b. a right to Bens services.
c. rights under Ivys insurance policy against Bens failing to perform.
d. a right whose transfer is otherwise expressly prohibited by statute.
The payment of Johns debt to Kirsten is guaranteed by Johns personal property. Kirsten
is most likely to perfect her interest by
a. attaching a bright label to Johns property.
b. calculating the precise amount of Johns debt.
c. correcting grammatical errors in the parties written agreement.
d. filing a financing statement with the appropriate authority.
Owen, Paula, Quinn, and Rita combine to finance the building of Super Stores, a
shopping mall. Their selected form of business organization is an investment group, or
a. a business trust.
b. a joint stock company.
c. a joint venture.
d. a syndicate.
Petra signs a check payable to Quincy, who indorses the back, gives it to Regional
Credit Union, and receives cash. The transfer of the check from Quincy to the credit
union is
a. an assignment.
b. a negotiation.
c. a payment.
d. a sale.
To generate sales, Yakkity-Yak, Inc., uses phone solicitation. Under federal law and
Federal Trade Commission regulations, in soliciting business, Yakkity-Yaks
telemarketers must
a. disclose all material facts related to a sale.
b. identify the sellers name (only if asked).
c. refrain from calling consumers who have not requested a call.
d. speak clearly and conspicuously.
Quinn enters into a series of agreements with Reba involving a sale of a Suite Dreams
Motel, including the land, building, furnishings, shares of stock in Suite Dreams
Company, and a contract with Trudy to create an ad campaign. Reba suspects that
Quinn may be misrepresenting the facts. The UCC Statute of Frauds governs
a. the sale of any of the property evidenced by a writing.
b. the entire deal, including the marketers services.
c. the sale of the furnishings priced at $500 or more.
d. the sale of the land and the building.
Thalia is an employee of Universal Insurance Company. Universals employee manual
states that workers will be dismissed only for good cause. With respect to the
employment-at-will doctrine, this is
a. an example of the doctrine.
b. an exception based on contract theory.
c. an exception based on public policy.
d. an exception based on tort theory.
The United States is a member of the World Trade Organization, which, among its
members,
a. does not affect trade barriers.
b. maximizes trade barriers.
c. minimizes trade barriers.
d. outlaws trade barriers.
Bakri owns a house. In the house, on a tile floor is a throw rug. Most likely to meet the
definition of a fixture is
a. the house.
b. the throw rug.
c. the tile floor.
d. none of these choices.
Giant Lift Corporation purchases all of the assets of Heavy Hydraulics Corporation.
With respect to Heavy Hydraulicss liabilities, Giant Lift is
a. automatically responsible.
b. not responsible under any circumstances.
c. responsible if Heavy Hydraulics is a competitor of Giant Lift.
d. responsible if the sale is actually a merger or consolidation.
Ray signs a promissory note for $10,000 in favor of State University (SU). The note
does not specify the date of its payment. Ray defaults. In SUs suit to collect on the note,
the court will most likely rule in favor of
a. Ray, because SU assumed the risk that the note would not be paid.
b. Ray, because the note is not payable at a definite time or on demand.
c. SU, because the note is an unconditional promise to pay the holder.
d. SU, because there is a uniform “default time for repayment when a date is not
specified.
Xavier owns a duplex that he leases to Yvon and Zack. Xavier may sell
a. the duplex at any time.
b. the duplex, but only after the lease expires and the tenants move out.
c. the duplex, but only with the tenants permission.
d. the lease, but not the duplex.
Cross-Country Trucking Company contracts with Baldwin to transport crated goods to a
certain destination for $5,000. Cross-Country delivers the crates, but Baldwin does not
pay. Cross-Country learns that the crates contained stolen goods. Cross-Country can
a. do nothing with respect to the contract.
b. recover $5,000 from Baldwin.
c. recover the goods but not the $5,000 from Baldwin.
d. recover the goods or the $5,000 from Baldwin.
Rural Holding Company (RHC) possesses farmland. RHC has the right to use the
property, including harvesting the crops, for ten years. RHC does not have the right to
extract the coal under the land. This is
a. a fee simple absolute.
b. a leasehold estate.
c. a life estate.
d. an easement.
Kelly, the owner of Llama Farms, a sole proprietorship, wants to obtain additional busi-
ness capital but to maintain control. This can best be accomplished by
a. borrowing funds.
b. bringing in partners.
c. issuing stock.
d. selling the business.
Sam, or any U.S. citizen, can bring a civil suit in a U.S. court against a foreign entity
for
a. a tort allegedly committed in the United States only.
b. a tort allegedly committed in the United States or overseas.
c. a tort allegedly committed overseas only.
d. no purpose.
Pola wants to transfer a check to Quin. The check is defective if it
a. has been previously dishonored.
b. has no irregularities on its face.
c. is not overdue.
d. is so complete that no element of negotiability is lacking.
Drake pushes Evon into the path of an oncoming car driven by Flip. Gina tries to rescue
Evon. Drake is liable for any injuries to
a. Evon and Flip but not Gina.
b. Evon and Gina but not Flip.
c. Evon, Flip, and Gina.
d. none of the parties.
A state statute requires machinery in industrial plants to include automatic shut-off
switches accessible to each employee working on the machine. Steel Companys (SCs)
equipment does not have the switches. Trudy, an SC employee, suffers an injury that an
accessible shut-off switch would have prevented. Trudys best theory for recovery
against SC is
a. assumption of risk.
b. negligence per se.
c. res ipsa loquitur.
d. strict liability.
Biff wrongfully takes an unopened carton from a Cold Storage Warehouse loading
dock, puts the carton in his car, and drives away. This is
a. burglary.
b. forgery.
c. larceny.
d. no crime.
Fashion Retail Center enters into a contract with Great Promotions, Inc., to provide
Fashion with a plan to retool its merchandising strategy. If Great Promotions breaches
the contract, Fashion has a duty to
a. reduce the damages that Fashion might otherwise suffer.
b. reduce the loss that Great Promotions might otherwise suffer.
c. punish Great Promotions and deter others from similar acts.
d. take no action.
Modern Clothing, Inc., and National Denim Corporation use the mark “Made by
Members of the U.S. Textile Workers Union on the tags of their products to indicate the
participation of the union in the manufacture. Modern and National are not in business
together and do not own this mark. This mark is
a. a certification mark.
b. a collective mark.
c. a service mark.
d. trade dress.
Optima Medico Corporation, a U.S. firm, signs a contract with Pharma Beneficial, Ltd.,
a Canadian firm, to give Pharma the right to sell Optimas products in Canada. This is
a. a distribution agreement.
b. a joint venture.
c. direct exporting.
d. licensing.
Wisconsin, like other states, may regulate private activities to protect or promote the
public order, health, safety, and general welfare under its
a. police powers.
b. taxing powers.
c. spending powers.
d. supreme powers.
Summit Credit Corporation lends funds to Toby, a consumer, to apply to the cost of a
sport utility vehicle (SUV), which is the collateral for the loan. An enforceable security
interest also requires
a. a written agreement and Summits possession of the SUV.
b. a written agreement or Summits possession of the SUV.
c. the vehicle sellers acknowledgement of the loan in writing.
d. Tobys possession of the SUV.
In 2010, 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,
Saras work is protected
a. for ten years.
b. for twenty years.
c. for the life of the author plus seventy years.
d. forever.
GR8 Fashion, Inc., complains to the Federal Trade Commission (FTC) about an ad
broadcast by Hotte Clothes Company, GR8s competitor. The FTC investigates and
concludes that the ad is deceptive. The FTCs next step is to
a. conduct negotiations between the competitors.
b. draft a formal complaint.
c. issue a cease-and-desist order.
d. permit GR8 to broadcast similarly deceptive counteradvertising.
Federal agencies cannot share information with foreign agencies investigating
spamming.
Good Health & Life Insurance Corporation suffers a security breach in its computer
network. Before the company discovers the breach, the perpetrator obtains corporate
financial records and other confidential data, including marketing plans. Is this a crime?
If so, what are its elements? What steps might Good Health & Life take to ensure that
going forward only authorized users access the data on its computers? Whose
effortsthose of the federal government or Good Health & Lifeare most important in
securing the companys computer infrastructure and why?
No person may be a director for two competing corporations at the same time.
The owners of a joint stock company are personally liable for its obligations.
Federal law encourages the use of electronic payments at Internet gambling sites.
An answer can admit to the allegations made in a complaint.
A person who holds all rights in property owns the property in fee simple.
A director may not sit on the board of more than one corporation at a time.
A blank indorsement specifies no particular indorsee.
Any corporation with more than $10 million in assets and five hundred or more
shareholders must register their securities with the Securities and Exchange
Commission.
If a lessor is a merchant, the risk of loss passes to a lessee when the lessee takes
physical possession of the goods.
The minimal acceptable standard for ethical behavior is compliance with the law.
An instrument is not defective because it has been previously dishonored.
Colby contracts in writing to sell his 2005 Dodge-brand pick-up truck to Efrem for
$10,500. Colby agrees to deliver the truck on Friday, and Efrem promises to pay the
$10,500 on the following Monday. On Thursday, Efrem tells Colby that he changed his
mind and will not buy the truck. Over the weekend, Efrem changes his mind again and
tenders $10,500 to Colby on Monday. Colby has not sold the truck to another party but
refuses the tender and refuses to deliver. Efrem claims that Colby has breached their
contract. Colby contends that Efrems repudiation released him from his duty to perform
under the contract. Who is correct, and why?
Norwest Trucking Corporation files a suit in a state court against Bobs Service
Company (BSC), and wins. BSC appeals the courts decision, asserting that the evidence
presented at trial to support Norwests claim was so scanty that no reasonable jury could
have found for the plaintiff. Therefore, argues BSC, the appellate court should reverse
the trial courts decision. Is the appellate court likely to reverse the trial courts findings
with respect to the facts? If not, why not? What are an appellate courts options after
reviewing a case?
Generally, states have antifraud patterned after federal securities law.
International law is the law of a foreign nation and varies from country to country.
A holder takes an instrument for value by performing the promise for which the
instrument was issued.
A marketing technique can be a trade secret.