Joli, acting within the scope of her authority for the Cake Bake Shop, contracts with
Valley View Berry Farms to buy an assortment of fruit. Cake Bake is liable on the
contract, and Joli is not, if Cake Bake is
a. a disclosed principal.
b. a partially disclosed principal.
c. an undisclosed principal.
d. an apparent agent.
Business Rental Corporation (BRC) and Cartage Trucking Company enter into a
contract for a lease of ten hydraulic lifts. Under the perfect tender rule, BRC must ship
or tender goods to the lessee that
a. approximately conform to all of the details of the contract.
b. entirely conform to the contract except in one or two details.
c. exactly conform to the contract in every detail.
d. substantially conform to the contract in most details.
Allen applies for, and obtains, casualty insurance coverage from Business Insurance
Company for his business, Country Club, Inc. The effective date of the policy is the
date
a. Allen submits the application.
b. Business Insurance accepts the first premium.
c. Business Insurance issues the policy.
d. the application specifies as the effective date.
Jack offers to sell Ben a new car for $10,000. Ben accepts the offer and sells his old car
so that he will have money for the new one. Jack’s offer is probably
a. revocable because the terms of the offer were not definite.
b. irrevocable because Ben sold his old car because of justifiable reliance on Jack’s offer
to sell him a new car.
c. revocable because any offer is revocable.
d. irrevocable because Jack’s offer represents an opinion contract.
Sparkling Gem Corporation agrees to sell Jewel Outlets, Inc. (JOI), fifty new diamonds,
but the contract does not specify a place of delivery. JOI is expected to pick up the
goods. The place of delivery is
a. Sparkling’s place of business.
b. JOI’s place of business.
c. the Annual Gems and Jewels Convention in New York City.
d. the U.S. Postal Service office nearest to JOI’s place of business.
Juli types onto a computer what she intends to be “My Will” and prints it out. Juli has
capacity. “My Will” is
a. invalid.
b. valid if Juli signs it.
c. valid if Juli signs it and has three witnesses sign it.
d. valid if Juli signs it, has three witnesses sign it, and files it in a certain state office.
The payment of Hu’s debt to Ian is guaranteed by Hu’s personal property. To give notice
of his interest in Hu’s property to other creditors, Ian is most likely to
a. attach a bright label to Hu’s property.
b. e-mail other potential creditors.
c. file a financing statement with the appropriate authority.
d. publish a collection notice in local newspapers.
Carrie Ann works at Paper Products, Inc. She considers taking home a few sheets of
stationery so she can write letters to her ailing grandmother. Since Paper Products
produces thousands of sheets of stationery every day no one will miss the few sheets
she takes and company profits will not be affected. Carrie Ann then considers what
would happen if every employee took some stationery home and decides not to take
any. Carrie Ann is being influenced by
a. the categorical imperative.
b. the Golden Rule.
c. the Ten Commandments.
d. duty-based ethics.
Donald’s debt to Everett is past due. Everett brings a legal action against Donald to
collect the debt. To ensure that a judgment in Everett’s favor will be collectible, Everett
asks the court to order the seizure of Donald’s property. This is a request for
a. a guaranty (or suretyship) contract.
b. an order that would violate most state laws.
c. a writ of attachment.
d. a writ of execution.
Ed is a debtor. Financial Loans, Inc., and the government are Ed’s creditors. For these
parties, a bankruptcy proceeding under Chapter 13 could be initiated by the filing of a
petition by
a. Ed alone or by his creditors jointly.
b. Ed only.
c. Financial Loans only.
d. the government only.
Genovese Contracting, Inc., agrees to build a warehouse for Hawthorne Distributors.
Genovese runs into the types of difficulties that contractors ordinarily confront, and
Hawthorne agrees to pay extra compensation to overcome them. Regarding the
agreement to pay more, a court would likely
a. enforce it.
b. rescind it.
c. order the parties to renegotiate it.
d. not enforce it.
Manhattan Developers, Inc., pays Northeast Trust Company to release its claim to a
strip of waterfront property. Northeast gives Manhattan a deed that conveys only
whatever interest Northeast has in the strip. This deed is
a. a grant deed.
b. a quitclaim deed.
c. a sheriff’s deed.
d. a warranty deed.
During the rulemaking process, agencies conduct investigations to obtain information
about a particular industry. After the final rules are issued, agencies conduct
investigations
a. to determine consumer satisfaction.
b. to determine whether affected businesses are satisfied.
c. to monitor compliance with the rules.
d. to determine what type of agency needs to be created next.
Dave’s Hobby Town and Estelle’s Yarn Shoppe are adjacent stores with adjoining
parking lots. Dave offers Estelle a discount on purchases from Dave’s store if Estelle
will not tow the cars of Dave’s customers who park in Estelle’s lot.
Refer to Fact Pattern 10-1. Estelle’s forbearance from towing is legally sufficient
consideration
a. because it is a promise of something of value.
b. only if Dave’s customers park in Estelle’s lot.
c. only if Estelle’s customers cannot park in her lot because it is full.
d. under no circumstances.
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.
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.
Trek Transport Company uses a mark associated with its name to distinguish its
services from those of other trucking firms. This mark is
a. a certification mark.
b. a collective mark.
c. a service mark.
d. a trade name.
Don writes a check to Eve drawn on Don’s account at First Town Bank. Eve presents
the check for payment to the bank, which accepts the check. The bank is
a. not liable for payment.
b. primarily liable for payment.
c. secondarily liable for payment.
d. simultaneously liable for payment.
Deb buys a song through eSongs, an online music vendor. Before completing the
purchase and downloading the song, Deb must agree to a provision not to sell copies of
the song. This provision is
a. a browse-wrap term.
b. a click-on agreement.
c. a shrink-wrap agreement.
d. a wrap-on agreement.
The Indiana Supreme Court rules against Jennifer in a case against Kut Rate Stores, Inc.
Jennifer wants to appeal her case to the United States Supreme Court. She must ask the
Court to issue a writ of
a. appeal.
b. certiorari.
c. jurisdiction.
d. summons.
Etta is a director of Fab Stuff Corporation. Without informing Fab, Etta goes into
business with GR8 Things, Inc., in competition with Fab. Etta is liable for breach of
a. no duty or rule
b. the business judgment rule.
c. the duty of care.
d. the duty of loyalty.
Ira is declared mentally incompetent. Jay, Ira’s son, is named his guardian. At Jay’s
insistence, Ira transfers his assets to Jay “for safekeeping.” A court might conclude that
this gift is not effective on the ground that there was no
a. acceptance.
b. delivery.
c. donative intent.
d. donor’s acknowledgment.
Levi, a well-known lumber dealer with a good reputation, buys a load of lumber and
pays for it with a check that is later dishonored. Sam, who is unaware of the bad check,
buys the lumber from Levi. Sam is a(n)
a. good faith purchaser.
b. bad faith purchaser.
c. insolvent purchaser.
d. bailee.
Bay City Construction, Inc., a contractor, asks Cool Electric, a subcontractor, to provide
certain services. Nothing is said about payment. Cool provides the services, but Bay
City refuses to pay. In Cool’s suit to recover, the chief issue is most likely to be whether
these parties had
a. a formal contract.
b. an express contract.
c. an implied contract.
d. a voidable contract.
A suit is filed against Maxi Corporation, alleging that the firm committed the offense of
monopolization. To determine whether Maxi has monopoly power requires looking at
a. only Maxi’s size.
b. only the relevant geographical market.
c. only the relevant product market.
d. the relevant geographical market and the relevant product market.
The Financial Institutions Association would like a certain law enacted, administered,
interpreted, and enforced in the best interest of its members, which include banks.
Under the Constitution, Congress
a. administers the laws.
b. enforces the laws.
c. interprets the laws.
d. makes the laws.
Mary owns a small real estate company that arranges apartment leases for college
students. She leases an apartment for nine months to Sara, a new undergraduate in the
area. On her son’s eighteenth birthday, Mary gives him a gift of a car. On her daughter’s
sixteenth birthday, Mary gives her a gift of $500. Mary sells her home gym to her
neighbor for $1,000. Which of Mary’s transactions would be covered by Article 2 of the
UCC?
a. The nine month lease of the apartment
b. The gift of the car
c. The gift of the $500
d. The sale of the home gym
Mineral Products Corporation, which owns no land, has a right to mine the copper from
Natural Resource Company’s land. Mineral’s right is
a. a license.
b. an easement.
c. a profit.
d. a fee simple absolute.
Big Eggs, Inc. agrees to supply Omelet Express with five hundred eggs. Big Eggs
cannot reasonably ask Omelet Express to pick up the eggs at
a. 1:00 P.M.
b. 2:00 P.M.
c. 3:00 P.M.
d. 4:30 A.M.
Jody, a minor, is living at home with her parents, but signs a lease with Idyll Grove
Apartments, a landlord, to rent an apartment. Jody can
a. disaffirm the lease because her parents can be held liable for it.
b. disaffirm the lease without liability.
c. not disaffirm the lease because an apartment is a “necessary.”
d. not disaffirm the lease because she intended to live on her own.
Detroit Automotive Company (DAC) agrees with its employees’ union not to buy any
nonunion-produced component parts from other firms for use in DAC products. This is
a. a permissible secondary boycott.
b. a prohibited secondary boycott.
c. a technically legal secondary boycott.
d. a unilateral one-party boycott.
Jackson Lumber hires Owen to purchase wood from various sources on behalf of
Jackson Lumber. In this relationship, Jackson Lumber is the
a. employee.
b. independent contractor.
c. principal.
d. agent.
Premier Clothing, Inc., a U.S. firm, obtains a judgment in a U.S. court against Quang
Tri, Ltd., a Vietnamese business. Whether the court’s judgment will be enforced by a
court in Vietnam depends on the Vietnamese court’s application of
a. the act of state doctrine.
b. the doctrine of sovereign immunity.
c. the principle of comity.
d. the World Trade Organization.
Tom executes a will in which he leaves everything to his spouse, Victoria, and in which
he appoints Warren to administer his estate. This must be signed by
a. Tom only.
b. Tom and Victoria only.
c. Tom, Victoria, and Warren.
d. a probate judge.
Margaret is walking out of a department store. She is carrying lots of packages and
talking on her cell phone. She is so distracted that she forgets to open the door and
walks into it. She falls and breaks her ankle. Margaret can sue the department store for
a. negligence.
b. battery.
c. breach of duty of care.
d. none of the choices.
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. Which of these acts are crimes, and what are the differences
among them?
A small business owner is likely to face legal questions when determining ways to
reduce his small business’s taxes.
On the back of an envelope, Phoebe writes, “I promise to pay Quint or bearer $600 on
demand. [Signed] Phoebe.” What type of instrument is this? Is it negotiable? If not, why
not?
A delegator is a party who transfers his or her obligation under a contract to another
party.
Under the doctrine of comparative negligence, only the plaintiff’s negligence is taken
into consideration.
All employers must provide their employees with up to twelve months of family or
medical leave.
State courts cannot have exclusive jurisdiction.
Contract law assures the parties to private agreements that the promises they make will
be enforceable.
Suppliers are generally required to expect reasonably foreseeable misuses of their
products.
An employee may be legally fired for refusing an order to do something illegal in the
course of his or her job.
Administrative agencies make administrative rules.
Compensatory damages compensate the injured party for injuries sustained due to loss
of the contract and also punish the party that breached the contract.
A union may discriminate against workers who do not wish to “join” the union.
In some jurisdictions, minors who misrepresent their ages are not liable for the tort of
deceit.
Misrepresentation of a material fact can occur through words alone.
The transfer of a negotiable instrument from one person to another is governed by
Article 2 of the Uniform Commercial Code.