The United States has ____ percent of the worlds population and consumes about ____
percent of the worlds energy.
a. 20; 65
b. 25; 10
c. 10; 50
d. 5; 25
Which of the following is correct?
a. A copyright can be renewed once it expires.
b. A patent can be renewed once it expires.
c. A trademark can be renewed as long as the mark is still in use.
d. None of the above.
Which of the following can be negotiable?
a. A promissory note that states, “Pay to Floyd Burchett $3000 on September 1, 2015.”
b. A check written on the standard check form that does not state the date it was issued.
c. A promissory note from Farmer Douglas to Hainey Seeds, Inc. promising to pay for
the seed purchased in the spring with bushels of grain harvested in the fall.
d. An oral promise to pay to the order of Justin $500 on demand.
A sellers form clearly states no warranty is included. The buyers form states that the
seller warrants the goods for one year. In this case:
a. no contract can be created.
b. the warranty term is a “different term, and the majority of states hold that a contract
can be formed but the contradictory terms cancel each other out.
c. the warranty term is an “additional term that becomes part of the contract in most
states.
d. the warranty term is a “different term, which in most states becomes part of the
contract unless the seller promptly objects.
Police Officer Paul apprehends a wanted criminal and then demands the $10,000
reward offered by Crime Stoppers. Which of the following statements is true?
a. Police Officer Paul is not entitled to the reward because past consideration is never
valid consideration.
b. Police Officer Paul is entitled to the reward because he puts his life on the line every
day.
c. Police Officer Paul is not entitled to the reward because he was under a pre-existing
duty to make the arrest.
d. Police Officer Paul is not entitled to the reward but may have an argument under
promissory estoppel.
Megan was employed by a large company. Her supervisor told her to falsify
government reports. She refused and was fired. She sued for wrongful discharge. Her
employer claimed that, since Megan was an at-will employee, she had no legal right to
claim the company was liable for damages. Is the employer right?
a. Yes. An at-will employee does not have a legal right to claim wrongful discharge of
employment.
b. Yes. As an employee, Megan owes a duty of loyalty to her employer. If the company
was found to have acted illegally by falsifying the reports, it (not Megan) would be
liable.
c. No. Even though Megan was an at-will employee, such employees may not be fired
without just cause.
d. No. Though at-will employees do not have extensive rights relative to job security,
they may not be legally fired for refusing to perform an illegal act.
The term F.O.B.:
a. can indicate a destination or shipment contract.
b. stands for “freight on board.”
c. requires the seller to insure the goods for the buyer’s benefit.
d. shifts the risk of loss to the buyer when the goods are identified.
Tony raped Jane in the parking lot of Joe’s Brew Pub. The District Attorney’s office
prosecuted Tony on rape charges. Subsequently, Jane filed a lawsuit against Tony for
money damages. Classify each legal action.
a. The District Attorney’s case was a criminal case; Jane’s lawsuit was a civil case.
b. The District Attorney’s case was a civil case. Jane’s lawsuit was a criminal case.
c. Both cases are criminal.
d. Both cases are civil.
Under FTC rules, a customer can cancel a door-to-door sales contract within:
a. three business days of the sale.
b. five business days of the sale.
c. one calendar week from the date the sale was made.
d. a “reasonable time after the sale was made.
James and his band played a very familiar song. However, they made up different
words for the song that were intended to be funny. James’s version of the popular song
with different words is known as:
a. a “knock off.”
b. a parody.
c. a “mockarama.”
d. a “link.”
Under which of the following warranties must the seller be a merchant?
a. Express warranties.
b. Implied warranty of merchantability.
c. Implied warranty of fitness for a particular purpose.
d. Both b and c.
A sales representative at Oxtren, Inc. orally told the purchasing agent at Wety, Inc. that
its industrial saw will cut through metal up to 5 inches thick. Wety purchased the saw.
Which statement is correct concerning the claim that the saw can cut through metal up
to five inches thick?
a. The claim is an express warranty.
b. The claim is an implied warranty of merchantability.
c. The claim is not a warranty because it is not in writing.
d. The claim is not a warranty because it is sales puffery.
The United States and Singapore have signed the Convention on Contracts for the
International Sale of Goods (CISG). Notren, Inc., a U.S. company, and SWT, a
Singapore company, have entered into a contract under which SWT is to ship party
supplies to Notren. One of the terms of the contract states, “The validity and
performance of this contract will be governed by the Uniform Commercial Code (UCC)
of the state of New York, not the Convention of the International Sale of Goods
(CISG).” The contract will be governed by the:
a. CISG.
b. Uniform Commercial Code of New York.
c. common law.
d. World Trade Law.
Mike sold his car to Beth, who was to pick the car up at Mike’s house by 12:00 noon on
September 1. Mike was at his house waiting for Beth but she was late. In fact, when
Beth arrived she discovered Mike’s home and the car destroyed by a fire that started at
1:00 p.m. The risk of loss falls on:
a. Mike because Beth had not taken possession of the car.
b. Beth because Mike was ready, willing, and able to tender the car at 12:00 noon.
c. Beth because under the UCC, the buyer bears the risk of loss.
d. Mike, as he had possession of the car.
Tuan is president and sole shareholder of Entertainment, Inc. Entertainment, Inc. wishes
to borrow money, but to do so, the bank requires Tuan to orally agree to personally pay
the debt of the corporation if Entertainment, Inc. cannot. Tuan’s guarantee to repay is:
a. enforceable under the parol evidence rule.
b. unenforceable because there is no insurable interest.
c. enforceable because of the leading object rule.
d. unenforceable because it is a collateral promise.
The status of a third party is determined by:
a. the type of contract.
b. whether the third party gave consideration.
c. the reasonable expectations of the third party.
d. the intent of the contracting parties.
Chapter 13 bankruptcy:
a. is used by businesses to reorganize their financial situations.
b. is an involuntary bankruptcy.
c. can be used only by individuals with a regular source of income.
d. is used by businesses to liquidate their debts.
John discovered his company’s accountant was ‘skimming” money from the business.
The accountant agreed to pay John a one-time payment of $25,000 not to report the
skimming to company officials. The accountant promised she would pay the money
back when she could. John accepted the money and never reported what he knew. A
year later the accountant was fired when the embezzlement was discovered. She was
also prosecuted for theft. The payment to John was never discovered. Which statement
is correct?
a. John’s act was unethical and illegal.
b. John’s act was unethical but not necessarily illegal.
c. John’s act was ethical since he believed the accountant would return the money;
however, it was illegal.
d. Based on the facts, John’s conduct was both ethical and legal given the special
circumstances of this case.
A general warranty deed is different from a quitclaim deed because:
a. a general warranty deed is more limited in the number of warranties made by the
seller to the buyer than the warranties made in a quitclaim deed.
b. a general warranty deed makes five warranties or promises, whereas a quitclaim deed
does not contain any promises.
c. a quitclaim deed does not require the seller’s signature, but a general warranty deed
does require the seller’s signature.
d. None of the above are correct.
Truan, Inc. has decided to market a new pesticide. Truan must register the pesticide
with the EPA.
Buyer Bob breaches his contract for the sale of goods with Seller Suzie. Suzie still has
possession of the goods at the time of the breach. Suzie can refuse to deliver the goods
and:
a. resell the goods and sue Bob for the total contract price.
b. either resell the goods or sue, but not both.
c. resell the goods and sue for any loss on the sale plus incidental damages less
expenses saved.
d. resell the goods and sue only for incidental damages.
The United States Supreme Court has the power to:
a. appoint judges to serve on the Supreme Court.
b. declare an act of Congress unconstitutional.
c. issue executive orders.
d. ratify treaties.
First Bank has agreed to loan Teresa $10,000 for use in her cosmetics business. If
Teresa sells the business to Melissa before the loan is disbursed, Teresa can assign her
right to the loan to Melissa.
Which of the following are tasks of the National Labor Relations Board?
a. To adjudicate claims that an employer has committed an unfair labor practice.
b. To adjudicate claims that a union has committed an unfair labor practice.
c. To decide whether a particular union is entitled to represent a group of employees.
d. All the above are tasks of the National Labor Relations Board.
When a person indorses a check, the indorser assumes contractual liability based on the
indorsement. This liability expires unless presentment is made:
a. within 3 days of indorsement.
b. within 7 days of indorsement.
c. within 30 days of indorsement.
d. within a reasonable time after the indorsement.
What does RICO prohibit
a. using criminal money to purchase a legitimate business
b. acquiring a business through criminal activity
c. operating a business through criminal activity
d. all of these answers are correct
Buyer is located in Des Moines, Iowa and seller is located in Sacramento, California.
The contract specifies F.O.B. Des Moines. This contract is a:
a. destination contract.
b. sale or return.
c. shipment contract.
d. sale on approval.
The fastest growing method of dispute resolution in the United States is:
a. arbitration.
b. negotiation.
c. mediation.
d. litigation.
Reba orders a pair of custom-made cowboy boots, C.O.D. from Home on the Range
Western Wear. When the boots arrive, Reba pays the carrier for the boots, then opens
the package, only to discover that the boots are the wrong snake skin color and three
sizes too big. At this point:
a. she is entitled to inspect the goods after payment (due to the C.O.D. terms) and she
can reject the boots because they are nonconforming.
b. Reba cannot revoke the acceptance, because the wrong color and size of the boots are
not substantial impairments.
c. Home on the Range can allege that Reba did not conduct a proper inspection;
therefore, though Home on the Range must cure, Reba is obligated to pay for the return
of the incorrect boots and the shipment of replacement boots.
d. None of the above.
Advantages of Alternative Dispute Resolution (ADR) include:
a. ADR is faster than litigation.
b. ADR keeps the parties talking rather than fighting.
c. ADR is less expensive than litigation.
d. All of the above are advantages of ADR.
Tom, the production manager at Esday, was told by his supervisor to hire Elton, a 15-
year-old, to operate an industrial machine. Hiring the 15-year-old violates the child
labor laws. Tom:
a. should hire Elton. Tom has a duty to obey Esday’s instructions.
b. should hire Elton. Tom has a duty of care to ensure that the government does not
discover that Elton is 15 years old.
c. should not hire Elton. Tom has a duty of care and he would not be caring for Elton.
d. should not hire Elton. Tom has a duty to obey Esday’s instructions only if they are
legal and ethical.
Costs to store a vehicle for a short period of time after an auto dealer fails to complete
the contract to purchase the vehicle would be:
a. compensatory damages.
b. incidental damages.
c. consequential damages.
d. punitive damages.
Tommie, a six-year-old child, was seriously injured when he stuck a fork into an
electrical outlet. His parents sued the restaurant where the incident occurred, claiming it
should have had child protective guards on the outlets. Whether the restaurant is liable
will be dependent upon whether:
a. the incident was reasonably foreseeable.
b. all of these answers are correct
c. this is negligence per se.
d. this is an ultrahazardous activity.
Which of the following forms of organization is a compromise between starting one’s
own business as an entrepreneur and working for someone else as an employee?
a. Limited liability company.
b. Business trust.
c. Close corporation.
d. Franchise.
Which of the following will discharge an instrument?
a. A payor tenders payment in full.
b. The parties agree to a discharge.
c. The terms of the instrument are intentionally changed.
d. All of the above.
Explain what a domain name is. Discuss if and how a domain name can be registered as
a trademark or if a trademark can be registered as a domain name.
Silas asks his friend Shelby to come to his property to go fishing at his pond. If he fails
to warn her that the dock has a rotten spot and she falls through and is injured, Silas
would be held liable in most states.
Candy, Inc. signed an agreement with Sweet Plantation. Under the contract, Candy, Inc.
agreed to purchase all the sugar cane Sweet Plantation grew during the coming season.
This contract will be unenforceable due to its vagueness.
Discuss the four major provisions of the Clean Air Act.
Life Principles are set by your parents and do not change over time.
Rob agrees to act as an agent for Diane in selling her car. Diane has a duty of loyalty to
Rob.
In some industries it is a routine practice to draft contracts permitting imperfection in
the sellers goods, thereby limiting the effect of the perfect tender rule by the parties
agreement.
Trudy wishes to buy a national franchise. What information is the seller legally required
to provide before she buys the franchise?
A product liability case may be brought in warranty, negligence, or strict liability, but it
must have the element that a person or business has been hurt by goods.
A shareholder proxy is generally revocable at any time.
Under Section 230 of the Communications Decency Act, Internet service providers are
held responsible for defamatory postings by their members or users.
A de jure corporation is not legal and cannot be recognized as a corporation because the
incorporation process was defective.
Under corporate law, a corporation that officially states its purpose is “to engage in any
lawful activity for which corporations may be organized under the General Corporation
Law of Idaho” is too broad. A corporation’s purpose must be more narrowly defined.
“Scriveners error is another (fancier) name for a typo.
The management of Northeastern Manufacturing may not close one of its
manufacturing plants without bargaining that issue with the union if its workers are
represented by a collective bargaining unit.
Lucy and Rick sign a contract in which Lucy agrees to deliver 10 boxes of chocolates in
exchange for Rick’s promise to pay $5 per box. Lucy delivers the candy. Rick pays for
the goods. This contract is fully executory.