Trend-Rite Clothiers, Inc., sells t-shirts to Brand Name Stores, Inc., under an existing
con-tract. When textile costs increase, Brand agrees to a price increase, but later wants
to cancel the con-tract. Brand may
a. cancel the contract immediately.
b. cancel the contract only after accepting a final shipment.
c. cancel the contract only on reasonable notice.
d. not cancel the contract.
Every contract involves at least two parties.
a. True
b. False
A firm offer by a merchant may be oral.
a. True
b. False
Statutes are laws enacted by Congress and the state legislatures and comprise one of the
sources of American law.
a. True
b. False
Corporations chief executive officers are directly accountable for the accuracy of
financial statements filed with the Securities and Exchange Commission.
a. True
b. False
Only a statement made after a contract is entered into can be an express warranty.
a. True
b. False
Foreclosure is the legal process by which a lender repossesses and auctions off property
that has secured a loan.
a. True
b. False
Bo and Clancy decide to do business as Marketing & Promotion Services. To be a
partnership, this association can result from an agreement that is
a. express, but not from an agreement that is implied.
b. implied, but not from an agreement that is express.
c. oral, written, or implied by conduct.
d. written, but not from an agreement that is oral or implied.
Corporate Bank wants to perfect its security interest in inventory owned by Outdoor
Outfitters, Inc. Most likely, a financing statement should be filed with
a. the bank manager.
b. the county clerk.
c. the U.S. Department of the Interior.
d. the secretary of state.
Congress enacts a statute, the Federal Deposit Insurance Corporation (an administrative
agency) issues rules, the Southeast Financial Institutions Association (a private
organizations) issues instructions, South Valley Bank posts a memo with orders for its
employees, and Tina tells her co-worker about a recent news story. Sources of law
include
a. the instructions issued by private associations.
b. the orders posted by employers.
c. the rules issued by federal administrative agencies.
d. the stories released by news agencies.
Samson is a government employee. Samson is limited in being subjected to drug testing
under
a. the First Amendment.
b. the Second Amendment.
c. the Fourth Amendment.
d. the Eighth Amendment.
If a customer does not have sufficient funds to pay a check available in his or her
checking account and the bank dishonors the check, the bank is liable to the customer.
a. True
b. False
A party seeking to recover in quasi contract must show that there was an actual contract
or agreement between the parties.
a. True
b. False
An ethics program can clarify what a company considers to be unacceptable conduct.
a. True
b. False
Laws and government regulations affect almost all business activities.
a. True
b. False
Flynn is a drug addict who has completed a supervised drug-rehabilitation program.
Gert used drugs casually in the past. Heath reports to work while under the influence of
alcohol. Considered to have a disability under the Americans with Disabilities Act of
1990 is
a. Flynn.
b. Gert.
c. Heath.
d. all of the choices.
Property voluntarily placed by its owner and inadver-tently forgotten is mislaid
property.
a. True
b. False
Hal contracts with Credit Services, Inc. (CSI), to pay $500 for its serv-ices. After CSI
performs, they sign an accord, in which Hal promises to pay $400 within ten days
instead of the $500. Hal does not pay. CSI can sue Hal under
a. neither the accord nor the contract.
b. the accord only.
c. the accord or the contract.
d. the contract only.
The primary purpose of the Uniform Electronic Transactions Act (UETA) is to remove
barriers to e-commerce.
a. True
b. False
An installment contract is breached if a buyer accepts any nonconforming goods.
a. True
b. False
A limited liability company must be managed by its members.
a. True
b. False
A holder takes an instrument for value if he or she gives a check as pay-ment for it.
a. True
b. False
Consumer Shops, Inc., signs a lease for a storefront owned by Downtown Building
Company. Unlike a purchaser of real property, Consumer Shops
a. acquires only temporary possession of the premises.
b. enjoys exclusive possession of the premises.
c. holds only temporary title to the premises.
d. retains temporary, exclusive possession and title to the premises.
Phil owns a farm in South Dakota. He does not like it when planes from the local
airport fly over his property. Phil is unlikely to win a case claiming that airplanes flying
over his land violate his property rights unless
a. the planes fly over more than twice a day.
b. he can prove there are more efficient routes for the planes to take.
c. the flights are low and frequent and cause direct interference with Phils enjoyment of
the land.
d. the planes belong to private individuals
Justin wants to file a suit against Kemel. For a court to hear the case
a. Kemel must agree.
b. the court must have jurisdiction.
c. the court must issue a deposition.
d. the parties must own property.
Kris contracts to work exclusively for Little Manufacturing Company during May for
$5,000. On April 30, Little cancels the contract. Kris finds another job dur-ing May but
earns only $3,000. Kris files a suit against Little. As compen-satory damages, Kris can
recover
a. $3,000.
b. $2,000.
c. $1,000.
d. $0.
In ethical terms, a cost-benefit analysis is an assessment of the negative and positive
effects of alternative actions on individuals.
a. True
b. False
In contract law, intent is determined by the objective theory of contracts.
a. True
b. False
An incidental beneficiary can sue directly to enforce a promisors promise.
a. True
b. False
Lizzie, a clerk at a Movies Unlimited store, takes a DVD player from the store without
permission. Lizzie is liable for
a. appropriation.
b. benefiting an employee.
c. conversion.
d. wrongful interference with a business relationship.
Pastry Dough, Inc., sends its catalogue to Octavio and includes a “per-son-alized letter
inviting him to buy any item in it at the ad-vertised price. This is
a. an offer because of the “person-alized letter.
b. an offer because there is no room for price negotiation.
c. an offer only if Octavio previously bought items from Pastry Dough.
d. not an offer.
Sally contracts with Tasty Pizza Company to deliver its products. Both parties change
their minds, however, and inform each other that they would like to cancel the contract.
Refer to Fact Pattern 10-1. Sally and Tasty
a. may rescind their entire contract.
b. may rescind their contract to the extent that it is executory.
c. must perform their entire contract.
d. must perform the part of their contract that is executory.
Ridgeline Excavation & Construction, LLC, creates an internal code of ethics. Like the
codes of other firms, Ridgelines company code is not
a. law.
b. a set of rules that the company can enforce.
c. an outline of the companys policies.
d. a guide for decision makers facing ethical questions.
Martha has a checking account with Homeplace Bank. Martha signs a check “payable
to Phillipa drawn on Marthas account. Homeplace Bank is
a. the payer.
b. the drawee.
c. the drawer.
d. the payee.