Norma Jean files for Chapter 7 bankruptcy. She turns her assets over to Addie, who
sells the assets and then distributes the proceeds to Norma Jean’s creditors. Addie is a
a. creditor.
b. federal judge.
c. bankruptcy trustee.
d. debtor.
The articles of Equestrian Stables Inc. list an incorrect address for its incorporator.
Under this circumstance, Equestrian Stables is most likely
a. a corporation by estoppel.
b. a de facto corporation.
c. a de jure corporation.
d. ultra vires.
Digital Storage, Inc., offers to sell provide cloud-computing services to Entrepreneur
Enterprises, Inc., but mistakenly transposes some of the digits in the price so that
$15,400 appears in the offer as $14,500. Entrepreneur Enterprises accepts the written
offer.Entrepreneur Enterprises’ best argument in favor of enforcement of the contract is
that
a. a bilateral mistake does not afford relief from a contract.
b. a mistake of value does not afford relief from a contract.
c. a unilateral mistake does not afford relief from a contract.
d. the price was below the prices of comparable devices.
Dag is an employee of Ridge Mining Company. Under federal labor law, Dag and other
employees have the right to
a. bargain collectively with Eagle through their representatives.
b. insist that Ridge require union membership as a condition of work.
c. interfere with the efforts of others to form labor organizations.
d. refuse to bargain with Ridge through their representatives.
Mary’s home is in a state that has a $30,000 homestead exemption. Mary defaults on a
$60,000 debt that she owes to Nina. Mary’s home is sold at auction for $80,000.
Other property Mary may own that may be exempt from satisfaction of judgment debts
includes
a. any property that Mary wishes to exempt.
b. investments that Mary has made in her family’s businesses.
c. recreational vehicles that Mary uses on weekends.
d. tools that Mary uses in her trade.
Megan goes to visit her friend Kathleen. While visiting, Megan downloads Kathleen’s
copy of Photoshop onto her computer’s random access memory without Kathleen’s
permission. Megan is guilty of
a. copyright infringement.
b. patent infringement.
c. cybersquatting.
d. trademark dilution.
Sweet Styles, Inc., a franchisor of clothing stores, wishes to standardize the pricing
practices of its franchisees that have engaged in price-cutting to increase their
respective shares of the market. The most prudent action might be for Sweet to
a. mandate the prices at which its franchisees sell their products.
b. suggest the prices at which its franchisees sell their products.
c. require its franchisees to buy inventory exclusively from Sweet.
d. threaten its franchisees with a material breach of contract.
Flo tells Ginger during a phone call that she will buy her textbook from last semester
for $65. Ginger agrees. These parties have
a. no contract.
b. an express contract.
c. an implied contract.
d. a quasi contract.
Worldwide Realtors, Inc., sells a franchise to XL Sales Company. XL is
a. a franchisee.
b. a franchisor.
c. an agent.
d. a principal.
Moses sells an apartment building to Noelle with a promise to install a new heating and
air conditioning system , before September 1. The following February 1, Moses sends
Ollie, an HVAC technician, to begin the installation. Noelle orders Ollie to leave and
refuses to make further payments to Moses, who files a suit against Noelle.
Noelle’s refusal to make further payments is most likely
a. a material breach.
b. complete performance.
c. excused by Moses’s failure to timely install the ventilation system.
d. substantial, but not complete, performance.
Suisse Internationale, a Swiss maker of athletic equipment, enters into a price fixing
agreement with Total World Sports, a U.S. wholesaler of Suisse’s products. U.S. courts
will apply U.S. antitrust laws if
a. the agreement was made in Switzerland.
b. the agreement was made in the United States.
c. the price fixing has a substantial effect on U.S. commerce.
d. the Swiss government agrees to be sued in the United States.
John is sales manager for Kleen “N Brite Products, Inc. Compared to John’s personal
activities, his business activities most likely involve
a. more complex ethical issues.
b. no ethical issues.
c. simpler ethical issues.
d. the same ethical issues.
Kirby is a manager of Jumpstart Fitness LLC, a limited liability company. Jumpstart is
formed in a state that imposes fiduciary duties on LLC managers. Kirby owes these
duties to
a. Jumpstart’s members.
b. Jumpstart’s suppliers.
c. Jumpstart’s customers.
d. none of the choices.
Creighton applies to BigData Corporation for a position as a software engineer.
Creighton has no training in computers or programming and no background as an
engineer. After Creighton is hired, BigData learns the truth. BigData can
a. not rescind the contract.
b. rescind the contract on the basis of fraud.
c. rescind the contract on the basis of mistake.
d. rescind the contract on the basis of undue influence.
Vinnie, the owner of Caf Rico, knows about, but does not take any action to prevent,
the sexual harassment of employees. Vinnie and the caf may be liable for such
harassment by
a. an employee’s previous employer.
b. a customer or a co-worker.
c. an employee’s spouse or other close relative.
d. none of the choices.
Frothy Beverage Corporation is a public company whose shares are traded in the public
securities markets. Under the Securities Act of 1933, Frothy is required to
a. contribute to the operations of national stock exchanges.
b. disclose financial and other information about its securities.
c. engage in market surveillance to deter undesirable practices.
d. solicit proxies for voting.
Ginny obtains a health-insurance policy for her family from Hope Insurance Company.
The policy includes an incontestability clause. Under such a clause, after a policy has
been in force for a specified period or time, such as two or three years
a. Ginny cannot contest Hope’s insurable interest.
b. Ginny cannot contest Hope’s refusal to pay a claim under the policy.
c. Hope cannot contest Ginny’s eligibility for continued coverage.
d. Hope cannot contest Ginny’s statements in the application.
Safety Supply Corporation in New York sells a truckload of protective suits, masks, and
other safety gear to Toxic Recovery, Inc., in Connecticut, “F.O.B. New York.” Safety
Supply arranges with US Truckline to transport the goods. The cost of the transport will
be paid by
a. Safety Supply.
b. Toxic Recovery.
c. US Truckline.
d. Toxic Recovery’s clients by an increase in the price of loss control services.
Flip Gymnastics & Karate, Inc., grants a franchise to Gibby to operate a Flip gym. Flip
may require Gibby to pay the franchisor a percentage of his
a. annual sales or volume of business.
b. weekly payroll expense.
c. monthly overhead savings.
d. none of the choices.
Harbor Bay Bank has made mortgage loans to consumers that qualify for the Home
Affordable Modification Program (HAMP), which offers incentives to lenders to
change the terms of certain loans. The purpose of HAMP is to
a. convey property through lenders to consumers who can afford it.
b. force lenders to forgive all high-risk mortgages.
c. reduce monthly payments to levels that homeowners can pay.
d. transfer affordable property to investors to lease to consumers.
Jane is the secured party in a secured transaction with Margaret. Jane could also be
referred to as the
a. debtor.
b. secured creditor.
c. collateral.
d. filing officer.
The Food and Drug Administration (FDA) is investigating reports that Caplets
Pharmaceutical Corporation is putting potentially harmful additives in Doze, a new
pain-relief medication. The FDA’s demands for particular documents from Caplets
a. must be specific and adequately describe the material being sought.
b. must be non-specific so an incriminating item is not overlooked.
c. must be general so as to force an uncooperative party’s compliance.
d. may, but need not, be specific because the FDA is a federal agency.
Go! is a handheld video game featuring races between imaginary creatures and
vehicles. The graphics used in the game are protected by
a. copyright law.
b. patent law.
c. trademark law.
d. trade secrets law.
Maggie and Nate enter into a contract for the sale of a car, but Nate later refuses to
deliver the car. Maggie asks a court to order Nate to perform as promised. Ordering a
party to perform what was promised is
a. specific performance.
b. damages.
c. rescission.
d. beyond the court’s authority.
Yellowbox, a DVD rental company, would like to change its corporate status to that of
an S corporation to avoid income taxes at the corporate level. To qualify, Yellowbox
must
a. be located in the United States.
b. have more than one hundred shareholders.
c. be a non-profit corporation.
d. have more than one class of stock.
Bill and Charlene enter into a contract for the clearing, plowing, and preparing of
Charlene’s 100-acre tract for which she agrees to pay $1,000. Bill transfers his duty
under this contract to Dewey. Dewey is
a. a delegatee.
b. an assignee.
c. an obligee.
d. a delegator.
Peyton, Qiana, and River form a syndicate to buy a professional basketball franchise.
This syndicate could be set up as
a. a joint venture.
b. a corporation.
c. a sole proprietorship.
d. a limited liability company.
Bette backs out of City Parking Garage, colliding with Dill’s car. Dill may recover
$7,500 to cover the cost of the repairs if Bette failed to act as
a. a blameless person.
b a faultless person.
c. a holistic person.
d. a reasonable person.
Players Video Game Centers, Inc., wants to issue stock of $1 million in a single
offering. Players must provide all investors with material information about itself, its
business, and its securities if
a. all investors are accredited.
b. under any circumstances.
c. any investors are accredited.
d. any investors are unaccredited.
Zeke files a petition for bankruptcy under Chapter 13. Zeke’s Chapter 13 plan must
provide for
a. the turnover of his future income to the trustee.
b. his attendance at a credit-counseling briefing.
c. adequate means for the petition’s execution.
d a preference for one creditor over another.
Olga enters into a contract to buy a refrigerator from a Prairie States Appliance store
with the price to be paid in monthly installments. After thirty-six months of payments,
Olga has paid more than twice the price of a similar stove. Eighteen payments remain
due under the contract.
Under the UCC, the court can evaluate the contract to determine whether it was
unreasonably unfair and one sided
a. at the time it was made.
b. at the end of its term.
c. in the middle of its performance.
d. at the time of Olga’s suit.
Corporate business matters are presented at a shareholders’ meeting in the form of
a. resolutions.
b. proxies.
c. articles of incorporation.
d. bylaws.
In a dispute over a sale involving a restored 1937 Ford Roadster, Garth argues that for
the purpose of the sale, Hoyt’s Pawn Shop, where Garth bought the auto, is a merchant.
A court may determine whether Hoyt’s is a merchant by assessing whether
a. it has sold any restored autos within the last year.
b. it holds itself out by occupation as having knowledge or skill unique to the auto in
the transaction.
c. its owner enjoys motoring.
d. it subscribes to Restoration, a biweekly trade magazine.
Miklos employs Nathalie to handle a list of financial transactions on Miklos’s behalf.
This power will terminate on
a. any transaction causing a loss to Miklos.
b. Miklos’s death or incapacity.
c. Miklos’s sixty-fifth birthday.
d. Nathalie’s handling of one of each stipulated transaction.
Alf rents an apartment. The lease does not specify how long it will last, but it does
specify that Alf must pay rent every month. Alf’s tenancy is
a. a fixed-term tenancy.
b. a periodic tenancy.
c. a tenancy at will.
d. not a tenancy.
State limited liability company statutes are uniform.
A secured party can release any collateral described in the financing statement, thereby
terminating its security interest in that collateral.
A finder of mislaid property is an involuntary bailee.
A borrower has the right to purchase the property after default by paying the full
amount of the debt, plus any interest and costs that have accrued.
Under the exclusionary rule, all evidence must be included in a criminal prosecution.
For individual debtors, the plan in a reorganization case must be completed before
discharge will be granted.
Savory Cooking Sauces, Inc., a U.S. business firm, makes and sells distinctively
flavored cooking sauces. Although the recipes are secret, the ingredients could be
revealed and the sauces could be reconstructed with diligent efforts. What can Savory
do to prevent its products from being “decoded” and pirated abroad?
When a member dissociates form a limited liability company, the member’s duty of
loyalty continues.
A limited liability company (LLC) formed in one state but doing business in another
state is referred to in the second state as a foreign LLC.
Like statutory law, administrative law is created by legislatures.
A condition is a qualification in a contract based on a future event that is certain to
occur.
The primary goal of the North American Free Trade Agreement is to eliminate tariffs
among the United States, Canada, and Mexico.
In cyberspace, trademarks are sometimes called cyber marks.
In a bailment, possession of the property is transferred to the bailee.
Final administrative rules have binding legal effect unless the courts later overturn
them.
The Second Amendment to the U.S. Constitution reserves all powers not delegated to
the national government to the states.
A minor has a reasonable time, after the minor reaches the age of majority, to disaffirm
a contract.
A summary judgment is granted only if there is no genuine question of law.