Dunn and Etta are limited partners in Fancee Fashion Stores, a limited partnership. In
terms of the firm’s books, Dunn and Etta are entitled to
a. access in proportion to their participation in management of the firm.
b. access to the parts that directly relate to their capital contributions.
c. no access.
d. total access.
Under a contract with Bucolic Farms, Agro Excavation, Inc., begins digging an
agricultural pond. In mid-project, Agro asks for $15,000 over the contract price,
claiming an increase in the “cost of doing business.” Bucolic agrees but later refuses to
pay. Their agreement is
a. unenforceable because Agro’s performance was a preexisting duty.
b. unenforceable because Bucolic’s promise was illusory.
c. enforceable.
d. unenforceable because its performance is unforeseeably difficult.
ValuRich Tools, Inc., sells tools, tool parts, and related supplies under “full” warranties.
Under the Magnuson-Moss Warranty Act, this means that ValuRich must provide
a. a choice between a refund or replacement if a product cannot be fixed and repair or
replacement of defective parts.
b. neither a choice of a refund or replacement, or repair of defective parts.
c. only a choice of a refund or replacement if a product cannot be fixed.
d. only repair or replacement of defective parts.
Grant offers to sell his Honda Civic for $10,000 to Ivy. Referring to the prices for
similar Hondas, Ivy says, “I”ll pay no more than $5,000.” Grant says, “Forget it.”
Grant’s offer was terminated by
a. Grant.
b. Honda.
c. Ivy.
d. no oneGrant’s offer is still open.
Fred starts up, and assumes the financial risk of, Graphic Ads, a new marketing
enterprise. Fred is
a. a franchisee.
b. a franchisor.
c. an agent.
d. a sole proprietor.
Dandy Disposal Center operates a recycling plant. Edwin and other Dandy neighbors
file a suit, alleging injuries from the plant. To succeed, they must show that Dandy
failed to use reasonable care if the suit is based on
a. a negligence theory.
b. a nuisance theory.
c. any legal theory.
d. a strict liability theory.
Flem, a user of GameCenter.com’s Web site, can download gaming software for free if
he first clicks on “I accept” after viewing certain terms. This is
a. a contract that does not include the terms.
b. a contract that includes the terms.
c. not a contract but the terms are enforceable.
d. unenforceable.
Fits-Like-A-Glove Shoes, Inc., and Retail Footwear Stores enter into a contract for a
sale of shoes. The contract indicates that the price includes transportation costs to a
specific destination by including the term
a. C.I.F.
b. delivery ex-ship.
c. F.A.S.
d. F.O.B.
Moto Company sells new and used motorcycles. Some of the motorcycles are held on
consignment, including six consigned by Nu Cycles, Inc. While the u cycles are in
Moto’s possession, title to them is held by
a. Moto and Nu jointly.
b. Moto only.
c. Moto’s creditors only.
d. Nu only.
Vera gives Willy a $500 check as payment for a debt. Willy crudely raises the amount
of the check to $5,000 and transfers it to Xtreem Sportz store for a new bike. Xtreem
deposits the check in its Yankee Bank account. Vera is liable for the payment of $5,000
to
a. no one.
b. Willy, Xtreem Sportz, and Yankee Bank.
c. Willy only.
d. Xtreem Sportz and Yankee Bank only.
Glen falsely accuses Hu of stealing from Island Tours, Inc., their employer. Glen’s
statement is defamatory only if
a. a third party hears it.
b. Hu has not been caught.
c. the statement is puffery.
d. the statement is true.
Jen is a third party beneficiary under a contract between Kyla and Leo. Kyla and Leo
can modify or rescind their contract without Jen’s consent
a. at any time.
b. at no time.
c. only after Jen’s rights have vested.
d. only before Jen’s rights have vested.
Mei writes a check to Nat in an amount that represents half of her debt to him. On the
back of the check, Mei includes the words “payment in full.” Nat cashes the check. This
discharges the entire debt
a. if the debt is liquidated.
b. if the debt is past due.
c. if the debt is unliquidated.
d. under no circumstances.
RingTone Corporation is a public company whose securities are traded among
investors. Under the Securities Act of 1933, a security is
a. almost any stake in the ownership or debt of a company.
b. an investment that is guaranteed to make a profit.
c. only such common forms of debt and equity as bonds and stocks.
d. whatever a company represents to the public as a security.
With respect to Egor’s land, Fig has an easement, Gabe has a profit, and Huck has a
license. A right to possess the land is owned by
a. Egor, Fig, and Gabe only.
b. Egor and Gabe only.
c. Egor only.
d. Fig, Gabe, and Huck only.
The board of directors of Integral Components Corporation consists of Frida, Gayla,
and Hart. A quorum is the minimum number of these directors
a. who must be at odds in a dispute to call for its resolution.
b. who must be present to validly transact business.
c. that the shareholders may remove from office at any one time.
d. whose positions must be vacant to warrant an election.
Sonic Board Corporation files a suit against Custom Fabricators Company, claiming
that the consideration for their contract is inadequate. The court will most likely not
examine the adequacy of the consideration if
a. there is a large disparity in the amount of consideration exchanged.
b. Sonic asserts that there is inadequate consideration.
c. something of value passed between the parties.
d. the consideration is worth less than $100.
Imported Carpets Store and Jill enter into a contract for a sale of an Oriental rug.
Imported Carpets, a merchant who deals in goods of the kind sold, generally describes
the goods, details technical specifications, and shows a sample. Under the UCC, if these
are inconsistent
a. the general description displaces the sample.
b. the general description displaces the technical specifications.
c. the sample takes precedence over the general description.
d. the sample takes precedence over the technical specifications.
Fay is a member of Garden Groves LLC. Like other members of limited liability
companies, Fay’s liability for Garden Groves’s obligations resembles the liability of
a. a member of a joint venture.
b. an owner of a sole proprietorship.
c. a partner of a partnership.
d. a shareholder of a corporation.
Brad borrows $20,000 from Citizens Bank to repair his home and to buy a car. Brad
buys a stereo from Deep Discount Store in a transaction financed by Deep. If these
parties are subject to the Truth-in-Lending Act, Regulation Z applies to
a. the car loan only.
b. the home repair loan only.
c. the retail installment sale only.
d. the car loan, the home repair loan, and the retail installment sale.
Clay buys an MP3 player for $200 and a pair of stereo speakers for $600 from a
Discount City store, and downloads $300 worth of digital music from E-Music.com. To
be enforceable, the contract that must be in writing is the purchase of
a. the digital music, the MP3 player, and the speakers.
b. the MP3 player and the speakers only.
c. the MP3 player only.
d. the speakers only.
Scott presents an instrument that states “pay to the order of Scott” to Town Bank for
payment. This instrument is the most common type of negotiable instrument, which is
a. a certificate of deposit.
b. a check.
c. a note.
d. a trade acceptance.
Loni and Myra enter into a contract for a sale of clarinets and other wind instruments.
Loni delivers, but Myra does not pay. Loni can normally recover as damages the
difference between
a. any loss avoided and any profit gained.
b. the actual price and the hoped-for price.
c. the contract price and the market price.
d. the current prices in the parties’ locations.
Caleb is driving a car in which Dotty is a passenger when an accident occurs. Caleb and
Dotty are emotionally rattled, but neither is physically hurt. Caleb is not liable to Dotty
on a negligence theory because
a. both parties were emotionally rattled.
b. Caleb did not apparently intend to cause an accident.
c. Dotty must have been comparatively negligent.
d. Dotty was not injured.
Oakley posts a defamatory remark about Pierre in “Roominate,” an online social
network maintained by SocNet, Inc., an Internet service provider. Most likely to be held
liable for the remark is
a. Oakley.
b. Pierre.
c. Roominate.
d. SocNet.
Mary, who is charged with a crime, claims that Nick, a government agent, entrapped
her. For entrapment to be a valid defense
a. Mary must not have been predisposed to commit the crime.
b. Nick must have pressured Mary into committing the crime.
c. Nick must have suggested that the crime be committed.
d. all of the choices.
Chip is a director of Diners Restaurants, Inc. Chip would breach his duty of loyalty if
he
a. becomes a director of Fluffy Mattresses, Inc., a noncompeting firm.
b. buys a controlling interest in Gulpin” Foods Corporation, a competing firm.
c. votes for Diners to buy a controlling interest in Eateries, Inc., which causes Diners to
suffer a loss.
d. votes against Diners’ purchase of a controlling interest in Eateries, Inc., which causes
Diners to suffer a loss.
Nero signs a check “pay to the order of Olive” drawn on Nero’s account in Plum Bank.
Olive signs the back of the check. Secondary liability on this check extends to
a. Nero and Olive only.
b. Nero and Plum Bank only.
c. Nero only.
d. Plum Bank only.
Leo buys a boat from his neighbor Moe, who is a fishing guide. Moe agrees to keep the
boat in his storage shed until Leo picks it up. A tree falls on Moe’s shed and destroys the
boat. The loss is suffered by
a. Leo and Moe.
b. Leo only.
c. Moe only.
d. neither Leo nor Moe.
Crestview Properties. Inc., and Deft Investment Corporation enter into a contract for a
sale of land. To be enforceable, the contract must be in writing if the land is valued at
a. more than $500.
b. more than $5,000.
c. more than $50,000.
d. any price.
It is not identity theft to use a fabricated identity to access online funds.
Force majeure clauses in international business contracts commonly set forth the major
clauses of the contracts.
Divestiture of a business interest is a possible penalty under RICO.
A professional owes a duty to his or her client to honor the terms of their contract.
Borealis Power Company is subject to mandatory workers’ compensation laws in the
states in which it does business. Chad and Dex work for Borealis as part of a crew that
travels to remote locations to repair downed power lines and other damaged equipment.
At a distant site, Chad is injured in an accident that is entirely Dex’s fault. Chad files a
claim for workers’ compensation. Should the claim be granted? What would be
Borealis’s best defense against it?
The extreme risk of an activity is a primary basis for imposing strict liability.
Harm must be foreseeable to be considered the proximate cause of an injury in
negligence.
A gift to a dying donee is a gift causa mortis.
A party who substantially performs his or her duties under a contract can enforce the
contract against the other party.
In a family limited liability partnership, only persons related to each other may be
partners.
In most bailments, the bailee has a right to place a lien on the bailed property until he or
she is fully compensated.
If a contract requires performance to the personal satisfaction of a party, the party must
in all cases be personally satisfied.
Compensatory damages compensate the nonbreaching party for injuries or damages
sustained by that party.
A lease is enforceable even if the premises are intended to be used for an illegal
purpose.
Rules issued by administrative agencies now affect almost no aspect of a business’s
operations.
No person may be a director for two competing corporations at the same time.
Normally, when a nonbreaching party has been damaged by a breach of contract, he or
she has a duty to mitigate those damages.