Alpha Communications, a partnership, publishes consumer periodicals, including
Science Today. Beta Publications, also a partnership, publishes professional periodicals,
including Technology Review. Alpha and Beta agree to pool their resources in a
one-time deal to print and market a book, Unlimited Future. In contracting with Gamma
Printing Supplies, Inc., for paper to print the book, Alpha commits fraud. In contracting
with Delta Literary Agency for articles to use in Technology Review, Beta commits
fraud. Gamma and Delta file suits against Alpha and Beta. What type of business
organization has Alpha and Beta formed? To whom, if anyone, is Alpha liable? To
whom, if anyone, is Beta liable?
The River City Council, the Santa Clara County Board, the Texas state legislature, and
the U.S. Congress enact laws. These laws constitute
a. administrative law.
b. case law.
c. stare decisis.
d. statutory law.
Genetic Innovations, LP, is a limited partnership. The partners sign an agreement
purporting to state how the firms profits and losses are to be divided. The profits and
losses of the firm will be divided
a. according to the agreement.
b. equally, despite the agreement.
c. in proportion to capital contributions, despite the agreement.
d. in proportion to each partners participation in the firms management, despite the
agreement.
Guy and Hanna do business as G-H Associates. If G-H is a partnership, it is governed
by the Uniform Partnership Act
a. in the absence of an express agreement.
b. in the absence of an implied agreement.
c. only in the presence of an express agreement.
d. under all circumstances.
Jennifer finds a full duffel bag that she believes may be subject to an estray statute.
Estray statutes apply to
a. abandoned property.
b. bailed property.
c. lost property.
d. mislaid property.
Smitty enters into an illegal bargain with Taylor. Smitty can enforce the contract or re-
cover for its value if he has been induced to enter into the bargain as a result of
a. fraud.
b. his desire to obtain the object of the deal.
c. a persuasive ‘sell by Taylor.
d. his belief that Taylor would do right by him.
Pruit performs a contract with Quint to reshingle the roof on Quints house, but Quint
does not pay. Pruit notifies Quint that the property will be sold to satisfy the debt. This
is
a. a judicial lien.
b. a mechanics lien.
c. an artisans lien.
d. a violation of most state laws.
Commercial Wholesale, Inc., conducts its operations unethically, which, when revealed,
will likely affect its
a. good will only.
b. profits only.
c. reputation only.
d. good will, profits, and reputation.
Readymade Construction Corporation offers to buy from Set-Still Cement Company a
certain quantity of cement for a certain price. Set-Still can accept the offer by
a. a material alteration of the terms within a reasonable time.
b. a promise to ship or a prompt shipment of the cement.
c. a prompt shipment of the cement only.
d. a shipment of nonconforming goods with a notice of accommodation.
Jacquie signs a contract to buy a car just before reaching the age of majority. After
reaching the age of majority, Jacquie does not take possession or make payments. Most
courts would hold, with respect to the contract, that this is
a. disaffirmance.
b. emancipation.
c. ratification.
d. rescission.
Fact Pattern 29-1A
Luxuro Vehicles, Inc., makes and sells automobiles to auto dealers, including
MotorPros Auto & Truck Sales. MotorPros sells the cars to consumers and businesses.
Refer to Fact Pattern 29-1A. Nani, a professional driver, buys a customized Luxuro
from MotorPros to drive in a Grand Prix race. Nanis Luxuro is
a. a consumer good.
b. an instrument.
c. equipment.
d. inventory.
On January 1, Kane issues a note payable to Lorena on May On April 29, Kane dies. In
this situation, the note is
a. dishonored.
b. payable immediately.
c. payable within a reasonable time.
d. payable May 1.
Liu signs a check “pay to the order of Marv drawn on Lius account in National Bank.
Liu later orders National not to pay the check, but the bank pays it over Lius order.
Subsequent checks written on Lius account “bounce. Most likely liable for the costs to
Liu is
a. any party to whom a subsequent check was written.
b. Liu.
c. Marv.
d. National.
Bowie owns a 1957 Chevrolet coupe, which Danica customizes and details to Bowies
specifications. The car earns several awards at regional vehicle customizing
competition shows. The result of Danicas efforts is
a. accession.
b. acquisition.
c. conversion.
d. dominion.
Tia signs a lease that states any change in the zoning law that affects the lease will
cause its termination. Union Citys zoning board adopts an affecting zoning
classification. This adoption satisfies
a. no condition.
b. the condition precedent.
c. the concurrent condition.
d. the condition subsequent.
Jim agrees to act on Kits behalf, subject to Kits control, and Kit trusts Jim to so act.
This describes a relationship between
a. a business and its competitors.
b. a government and its governed.
c. a parent and a child.
d. a principal and an agent.
The government of Japan sets a limit on the amount of rice that can be imported from
the United States. This is
a. a dumping duty.
b. an antidumping duty.
c. a quota.
d. a tariff.
Nursing Home Care Company is charged with violating a rule of the Social Security
Administration. Most likely, Nursing Home Care will be required to appear at a hearing
presided over by
a. a federal appellate court judge.
b. a federal district court judge.
c. an administrative law judge.
d. a U.S Marshal.
Fact Pattern 30-1A
Stacy sells her all-terrain vehicle (ATV) to her brother Terrill for $1,000. Twelve days
later, Stacy files a petition in bankruptcy for relief through a liquidation.
Refer to Fact Pattern 30-1A. Terrill dies while riding the ATV. Stacy is Terrills only heir.
With respect to the bankruptcy estate, the inheritance is
a. exempt property.
b. part of the estate if Terrill died more than 180 days after Stacys filing.
c. part of the estate if Terrill died within 180 days after Stacys filing.
d. part of the estate if the accident was in some way Stacys fault.
Interstate Coffee Brokers, Inc. (ICBI), offers to sell Java Roasters, Inc., fifty bags of
coffee beans. Java rejects the offer. The offer is
a. terminated.
b. valid for a reasonable time to give Java a ‘second chance.
c. valid for the period of time prescribed by a state statute.
d. valid until ICBI revokes the offer.
Bubbly Cola features Sparkly Colas trademark without its owners permission. Bubblys
use of the mark is actionable provided
a. consumers are confused.
b. Bubblys use is intentional.
c. Bubbly and Sparkly are not otherwise competitors.
d. Sparklys mark is registered.
Tyro has the right to drive across Ulas land, which is next to Tyros property, to reach an
access road. Tyros right is
a. an easement appurtenant.
b. an easement in gross.
c. a profit appurtenant.
d. a profit in gross.
Khalil holds a security interest in inventory owned by Luc. Khalil assigns his interest in
the inventory to Mal. Mal becomes the secured party of record
a. automatically.
b. if Khalil advises Luc of the assignment.
c. if Mal advises Luc of the assignment.
d. if Mal files a uniform amendment form.
National Computer Corporation (NCC) employs Cynthia as an agent. NCC gives her an
exclusive territory in which to sell NCC products. NCC cannot compete with her in that
territory under the duty of
a. compensation.
b. cooperation.
c. indemnification.
d. reimbursement.
Mace copies Nicks book, Off the Beaten Path, in its entirety and sells it to Parkland
Books, Inc., without Nicks permission. Parkland publishes it under Maces name. This is
a. copyright infringement.
b. fair use.
c. licensing.
d. protected expression.
Eustace and Durango Oil Company enter into an oral contract under which Eustace
agrees to work on a Durango oil rig for not less than six months. This contract is
enforceable by
a. Eustace.
b. Durango.
c. any interested third party, such as a member of Eustaces family.
d. none of the choices.
Finest Office Company employs General Construction, Inc. (GCI), to renovate an office
and signs a note for $10,000 payable to GCI. GCI breaches the contract, but sells the
note for $5,000 to Happy Collection Agency, which knows that GCI has not performed.
Happy is an HDC of the note in the amount of
a. $0.
b. $5,000.
c. $10,000.
d. $15,000.
Fact Pattern 31-1B
Northeast Bank makes mortgage loans to consumers, including Mai, to buy homes.
Refer to Fact Pattern 31-1B. Under federal law, disclosures with respect to one of
Northeasts loans must be provided
a. a certain number of days after the loan is finalized.
b. a certain number of days before the loan is finalized.
c. at the same time at which the loan is finalized.
d. at whatever time is most rational and appropriate.
Flite Airline Corporation is poised to issue securities in a transaction that, under the
Securities Act of 1933, is “exempt. This enables Flite to
a. avoid the costs and complications of registration.
b. buy and sell the securities without liability for “recaptures.
c. make forward-looking financial forecasts without liability.
d. withhold inside information from accredited investors.
Checkerboard Pizza, Inc. (CPI), files a petition in bankruptcy for relief through a
reorganization. CPIs reorganization plan must contain
a. a plan to turn over its future income to the trustee.
b. a certificate proving attendance at a credit-counseling briefing.
c. a provision of adequate means for the plans execution.
d a statement of preference for one creditor over another.
Charlie, the owner of Charlies Foreign Auto Repair Service, files a suit against the state
of Delaware, claiming that a state law violates the commerce clause. The court will
agree if the statute
a. affects citizens private activities.
b. imposes a substantial burden on interstate commerce.
c. imposes a substantial burden on the state.
d. promotes the public order, health, safety, morals, or general welfare.
Major credit reporting agencies must provide consumers with free copies of their own
credit reports every twelve months.
Anticipatory repudiation discharges a contract.
A partys intent to enter into a contract is judged by their personal, subjective intent or
belief.
Sierra borrows $175,000 from Regional Home Finance Corporation to buy a home. The
loan is a twenty-year, 3/1, adjustable-rate mortgage, with an initial interest rate of 4.0
percent for three years and potential increases of up to 3.0 percent to a cap of 10
percent. Before the loan is completed, the lender discloses the amount of the loan
principal, the initial interest rate, the initial annual percentage rate, and associated fees
and costs. Not disclosed are material details about the amounts of the payments when
the interest rate changes. Before the first increase takes effect, Sierra decides that she
wants to rescind the loan. What is a “twenty-year, 3/1, adjustable-rate mortgage? Can
Sierra rescind this loan? Why or why not?
A person cannot be both an independent contractor and an agent.
Whether the federal government has preempted a certain area is always clear.
Law is a body of enforceable rules governing relationships among individuals and
between individuals and their society.
A loss sustained between the time of application and the delivery of an insurance policy
may not be covered.
A large business must provide notice before implementing a mass layoff.
Directors are not obligated to refrain from self-dealing.
When an agency relationship is gratuitous, the agent does not act in exchange for
payment.
A nuncupative will is a will that is completely in the handwriting of the testator.
If a principal is disclosed, the agent may be liable to a third party for the principals
nonperformance of a contract.
Midstates Utility Corporation contracts with North American Energy Company to buy
50,000 gallons of heating oil. North American agrees to deliver the oil in five equal
installments between October 1 and the following March 15. The winter is the warmest
on record, however, and after the last agreed delivery, Midstates has accepted only
30,000 gallons of the oil. When North American tenders the rest of the oil, Midstates
refuses to take it, citing the weather and claiming to be acting in good faith. Will North
American succeed in a suit against Midstates for breach of contract?
A security interest that provides for a security interest in after-acquired property is a
floating lien.
In most states, if neither party requests a jury, the court will seat a jury on its own
motion.
Tender is an unconditional offer to perform.
Brie is a student at Collegiate University. In need of funds to pay for tuition and books,
Brie asks Dependable Bank for a short-term loan. The bank agrees to make a loan if
Brie will have someone who is financially responsible guarantee the loan payments.
Esperanza, a well-known businessperson and a friend of Bries family, calls the bank
and agrees to pay the loan if Brie cannot. Because of Esperanzas reputation, the loan is
made. Brie is making the payments, but because of illness she is unable to work for one
month. She asks Dependable extend the loan for three months. The bank agrees, raising
the interest rate for the extended period. Esperanza is not notified of the extension (and
thus does not consent to it). One month later, Brie drops out of school. All attempts to
collect the remainder of the loan from Brie fail. Can Dependable assert a claim against
Esperanza on the debt?