Business Rental Corporation (BRC) and Cartage Trucking Company enter into a
contract for a lease of ten hydraulic lifts. Under the perfect tender rule, BRC must ship
or tender goods to the lessee that
a. approximately conform to all of the details of the contract.
b. entirely conform to the contract except in one or two details.
c. exactly conform to the contract in every detail.
d. substantially conform to the contract in most details.
Cherry and Basil are minors who marry each other. Their minority status may be
terminated under the laws of
a. all states.
b. most states.
c. some states.
d. no states.
Handy Hardware Store agrees to hire Ilsa for one year at a salary of $500 per week.
When Handy cancels the contract, Ilsa spends $100 to obtain a similar job that pays
$450 per week for a year. Ilsa is entitled to recover
a. the amount of the wages that Handy promised only.
b. the difference between the wages at the two jobs only.
c. the difference between the wages at the two jobs plus $100.
d. $100 only.
Direct Mail Sales, Inc., regularly advertises its products. Under the First Amendment, in
comparison to noncommercial speech, these ads are given
a. equal protection.
b. less protection.
c. more protection.
d. no protection.
Elle buys a new textbook for $100 and a used car for $5,000, and signs a one-year lease
for an apartment for $1,000 monthly rent to start at the beginning of the next month.
The Statute of Frauds covers
a. the apartment lease, and the textbook and car purchases.
b. the apartment lease and the car purchase only.
c. the apartment lease only.
d. the textbook and car purchases only.
Jackson files a suit against Lance. Before going to trial, the parties, with their attorneys,
meet to try to resolve their dispute. A third party suggests or proposes a resolution,
which the parties may or may not decide to adopt. This is
a. arbitration.
b. mediation.
c. negotiation.
d. not a legitimate form of dispute resolution.
Bernie wants to go into the business of construction contracting. Among the reasons
that would probably convince Bernie to set up his business as a sole proprietorship
would be
a. its greater flexibility.
b. its limited liability.
c. its perpetual existence.
d. the ease of transferring the business to other family members.
With a bill of lading, Cartage Common Carrier Company acknowledges possession of
certain goods and contracts to deliver them. Cartage is
a. a bailee.
b. a buyer in the ordinary course of business.
c. a good faith purchaser for value.
d. an F.O.B.
Rocco is a director of Spa Lids & Tubs, Inc. Under the standard of due care owed by di-
rectors of a corporation, Rocco’s decisions must be
a. unwavering and unquestionable.
b. arguable and defensible.
c. informed and reasonable.
d. perfect and unassailable.
Coco is considering forms of business organization for her concessions businessCoco’s
Cupcakes. Most states require that a limited liability company have at least
a. no minimum number of members.
b. at least one member.
c. at least two members.
d. at least three members, including at least one general partner.
Rolf, a citizen of New Mexico, wants to file a suit against Sandy, a citizen of Texas.
Their diversity of citizenship may be a basis for
a. no court to exercise jurisdiction.
b. a federal court to exercise original jurisdiction.
c. a state court to exercise appellate jurisdiction.
d. the United States Supreme Court to refuse jurisdiction.
Standard Corporation can not claim a trademark in the phrase “Quality Is Standard” if
the phrase
a. has a secondary meaning.
b. is descriptive.
c. is generic.
d. is memorable.
Pola develops a new espresso machine, which she names “Jump Shot.” She also writes
the operating manual. Pola can obtain trademark protection for
a. the espresso machine.
b. the “newness” of the espresso machine.
c. the name.
d. the operating manual.
Ada mistakenly pays property taxes that should have been assessed against Bud. Ada
can recover the amount from Bud in quantum meriut
a. even if Bud was not aware of the error.
b. only if Bud tried to conceal the error.
c. only if Bud was aware of the error.
d. under no circumstances.
Rangler contracts with Siena to buy a certain horse for her. Rangler makes a deal with
Timberline Stables, the owner of the horse, and makes a down payment. Siena fails to
pay the rest of the price. Timberline sues Rangler for breach of contract. His right to
hold Siena liable for any damages that he has to pay is the right of
a. avoidance.
b. cooperation.
c. indemnification.
d. reimbursement.
Spencer Hydraulics Corporation’s ethics committee is asked a business ethics
questionshould the firm bid low to obtain a contract that it knows it can fulfill only at a
higher price? A practical method to investigate and solve this question involves all of
the following steps except
a. absolution.
b. decision.
c. inquiry.
d. justification.
Aromatic Tea Company enters into a contract to sell tea to Savory Stores, Inc.. The
contract includes the term “F.O.B. Upriver City,” which is Savory’s location. This
means that the contract is
a. a bailment contract.
b. a destination contract.
c. a shipment contract.
d. a transportation contract.
Odell owns Payroll Company, a bookkeeping service losing market share to Quik Work,
Inc. Odell pays Remy $5,000 to steal a list of Quik’s clients, to whom Odell will
aggressively market Payrolls services. This deal is
a. enforceable.
b. void.
c. voidable at the option of either party.
d. voidable at the option of the party having less bargaining power.
Hud and Iggy form Jerry-Bilt Construction to enter into a contract to build one bridge.
Under their partnership agreement, Jerry-Bilt is to dissolve when the bridge is built.
Iggy signs a contract for the firm to build a second bridge. Jerry-Bilt
a. dissolves as soon as the first bridge is built.
b. dissolves as soon as the second bridge is built.
c. dissolves immediately on Iggy’s signing of the second contract.
d. does not dissolve.
Kay and Leo copy and exchange MP3 music files over the Internet without anyone’s
permission. With respect to songs owned by Natural Recording Company, this is
a. copyright infringement.
b. fair use.
c. licensing.
d. protected expression.
Through fraudulent means, Fred induces Gail to sign a contract to build resort cabins on
land that Fred does not own. Gail performs, but Fred does not pay. When Gail learns the
truth, she may
a. do nothing with respect to the contract.
b. recover for the performance or its value.
c. recover for the performance only.
d. recover the value of the performance only.
Home Delivery Corporation and Interstate Transport, Inc., sign an agreement that
provides for the payment of “$1,000 by whichever party commits a material breach of
the contract that creates damages difficult to estimate but approximately $1,000.” This
is
a. a liquidated damages clause.
b. a mitigation of damages clause.
c. a nominal damages clause.
d. a penalty clause.
Mineral Resource Company contracts to provide several manufacturers with tin. When
a cartel of tin-producing countries suddenly embargoes future shipments of tin to
Mineral Resource so that it cannot fulfill its contracts, the distributor
a. can substitute some other material for the tin.
b. is excused from the performance of its contracts.
c. is liable for breach of contract.
d. must still supply the tin needs of its customers.
Dizzy is not Edwina’s agent but enters into a contract with Frida on Edwina’s behalf.
Edwina later contacts Frida to approve the contract. This is
a. an agency by agreement.
b. an agency by estoppel.
c. an agency by ratification.
d. not the creation of an agency relationship.
Canada and the United States are signatories of the Berne Convention. Doug, a citizen
of Canada, publishes a book first in Canada and then in the United States. Doug’s
copyright must be recognized by
a. Canada only.
b. Canada and the United States only.
c. all of the signatories of the Berne Convention.
d. none of the choices.
Intoxicated, Clio agrees to sell her restaurant, Diners Café, to Evan for half of its real
market value. This deal is most likely void if
a. Clio appeared intoxicated to Evan.
b. Clio disaffirms the contract after becoming sober.
c. Clio was so intoxicated as to have no memory of the deal.
d. Evan fraudulently induced Clio to become intoxicated.
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.
In business deals, Felipe, the chief executive officer of Glazed Donuts, Inc., follows
duty-based ethical standards. These are most likely derived from
a. a corporate ethics code.
b. a cost-benefit analysis.
c. philosophical reasoning.
d. the law.
Ron makes a contract with Stu that indirectly benefits Tim, although neither Ron nor
Stu intended that result. Tim is
a. a delegatee.
b. an assignee.
c. an incidental beneficiary.
d. an intended beneficiary.
Development Associates (DA) agrees to buy five acres of land from Eastside Properties
for $15,000. Eastside sells the acreage to Fealty Realty, and fails to go through with
DA’s deal on the agreed date, when the market price of the land is $17,000. DA may
recover
a. $17,000.
b. $15,000.
c. $2,000.
d. $0.
VuTech Company agrees to sell digital video equipment to Home & Business Stores,
Inc., for Home & Business to market to its customers. Their contract will not be en-
forceable unless it includes
a. a payment term.
b. the price of the goods.
c. the quantity of the goods.
d. the requirements of Home & Business’s customers.
If the purpose of a licensing statute is to protect the public from unlicensed
practitioners, a contract with an unlicensed professional is illegal.
Informal contracts are usually based on their substance rather than their form.
No court offers mediation as an option before a case goes to trial.
Normally, a court of law will not question the adequacy of consideration.
An illusory promise is a promise that is enforceable without consideration.
If an offeror does not expressly authorize a certain mode of acceptance, then acceptance
may be made by any reasonable means.
An implied warranty of merchantability arises in every sale or lease by a merchant who
deals in goods of the kind sold or leased.
A void contract is enforceable if it is in writing.
A judge’s function is to make the law.
The First Amendment does not protect commercial speech as extensively as
noncommercial speech.
Anything less than substantial performance is a material breach of contract.
An implied contract is implied from the words of the parties.
No oral contract is enforceable under the UCC.
A buyer may reject a seller’s goods under any circumstances.
Under the theory of negligence, the duty of care requires an intentional act.
If there is a statute that prohibits a certain action, a contract to do it is unenforceable.
The doctrine of quasi contract can be used only when there is an actual contract that
covers the matter in controversy.
Before shareholders can bring a derivative suit, they must submit a written demand to
the corporation, asking the board of directors to take action.
Rescission is the substitution of one party to a contract for a third party, who agrees to
assume the contractual duties.