Gliding Light, LLC, and Hang Gliders, Inc., are parties to a contract. They subsequently
agree that High Riders Inc. should take Gliding Lights place and assume all of its rights
and duties under the contract. This is
a. a mutual agreement to rescind.
b. an accord and satisfaction.
c. a novation.
d. a settlement agreement.
Refer to Fact Pattern 30-1B. The partners decide to dissolve Equity Lending. Duke
collects and distributes the firms assets. This results in
a. nothing with respect to the firms existence.
b. the continuation of the firms business.
c. the termination of the firms legal existence.
d. the temporary suspension of the firms business.
Abner tells a representative of Brass & Woodwind Musical Instruments, Inc., that he
will pay for Claudias trumpet if she does not. Abner does not secure any personal
benefit for this promise. Abners oralpromise is enforceable as a contract by
a. Brass & Woodwind Musical Instruments, Inc.
b. Claudia.
c. Abner.
d. none of the choices.
To prepare for a trial between SmartPhones, Inc., and TechApps Company, TechApps
attorney places SmartPhones chief executive officer (CEO) under oath. A court official
makes a record of the attorneys questions and the CEOs answers. This is
a. a cross-examination.
b. a deposition.
c. voir dire.
d. an interrogatory.
Martin files a suit against Nichelle in a state court over payment due on a short-term
employment contract. The case proceeds to trial, after which the court renders a verdict.
The case is appealed to an appellate court.After its review of Martinv. Nichelle, the
appellate court upholds the lower courts verdict. The appellate court has
a. affirmed the case.
b. reversed the case.
c. remanded the case.
d. reversed and remanded the case.
Aaron questions whether there is consideration for his contract with Banquet Hall to
exchange his musical performance of country tunes at select social events for Banquets
payment of a certain amount. To constitute consideration, the value of whatever is
exchanged must be
a. objectively worthy.
b. precisely adequate.
c. legally sufficient.
d. practically sound.
Orson files a suit against Portia. Before going to trial, the parties meet, with their
attorneys to represent them, to present their dispute to a third party who is not a judge
but who imposes a resolution on the parties. This is
a. arbitration.
b. mediation.
c. negotiation.
d. not a legitimate form of dispute resolution.
Oh! Wow!Markets, Inc., rejects a shipment of frozen turkey that does not conform to its
contract with Poultry Processing Corporation, but is unable to obtain instructions from
the seller. Oh! Wow! Marketscan
a. destroy the goods.
b. cure the goods to make them conform to the contract.
c. retain the goods without paying for them.
d. reship or store the goods for the seller.
UniVision Corporation, a U.S. company, sets up a firm in Vietnam. UniVision remains
in the United States and retains ownership of the Vietnamese branch, as well as
authority and control over all phases of the operation. This is
a. a franchise.
b. a wholly owned subsidiary.
c. a joint venture.
d. direct exporting.
Otto is considering forms of business organization for Pro Tree Service, his landscaping
firm. Like most states, Ottos state requires that to form a limited liability company, he
must file with a central state agency
a. articles of certification.
b. articles of formation.
c. articles of organization.
d. no specific documents.
Natures Products, Inc., sends its standard order form to Omni Distribution Corporation
to evidence a sale of packing materials. Omni responds with its own standard purchase
order form. Additional terms in the purchase order automatically become part of the
contract unless
a. the terms materially alter the original contract.
b. the original offer expressly limited acceptance to its terms.
c. the offeror objects to the new terms within a reasonable time.
d. any of the choices.
Diet & Health Food stores orders 1,000 boxes of granola bars from Energy Products,
Inc., but fails to specify the varieties. The granola bars are delivered in an assortment of
varieties. Diet & Health may
a. acceptall of the granola bars “as is only.
b. acceptall of the granola bars “as is or reject the entire shipment only.
c. accept only the granola bars that it wants and reject the rest.
d. reject the entire shipment only.
The Montana Supreme Court rules against Natural Grocery Mart in a case against One
Stop 2 Shop Stores, Inc. Natural Grocery files an appeal with the United States
Supreme Court. The Court does not hear the case. This
a. is a decision on the merits that has value as a precedent.
b. indicates agreement with the Montana courts decision.
c. means nothing.
d. means that the Montana courts decision is the law in Montana.
Industrial Engineering, Inc., promises to give stock options to Jasmine for processes she
has already designed for the firm. This promise is enforceable
a. because it is a new contract.
b. because it is an illusory promise.
c. because it is supported by past consideration.
d. under no circumstances.
To bid on a job, RoadCrew Construction Company relies on the oral promise of Surface
Paving, Inc., to perform certain work at a certain price. Smooth Paving fails to perform.
RoadCrew Construction can
a. not recover due to the principle of freedom of contract.
b. not recover due to the Statute of Frauds.
c. recover under the concept of unconscionability.
d. recover under the doctrine of promissory estoppel.
Mikayla, an agent for Nahir, enters into a contract on Nahirs behalf with Onora that
must be in writing to be enforceable under the Statute of Frauds. Mikaylasauthority to
enter into this contract is not in writing. Under the equal dignity rule, this contract is
a. enforceable.
b. void.
c. voidable at Nahirs option.
d. voidable at Onoras option.
Jewelry & Coin Company hires Kelly Ann to buygems and precious metals from
various sources on its behalf. In this relationship, Jewelry & Coin is
a. anemployee.
b. anindependent contractor.
c. aprincipal.
d. anagent.
Quik Downtown Delivery contracts with Ricos Tacos to deliver its products. Both
parties change their minds, however, and inform each other that they would like to
cancel the contract. Quik and Ricos
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.
Garry drives a truck as an employee for Heavy Hauling, Inc.Garry would most likely be
considered acting outside the scope of her employment if he
a. crashed into a car at the airport while off duty.
b. hit a pedestrian in a parking lot during a “working lunch.
c. ran over an attendant at a gas station while refueling the truck.
d. smashed into a store-front while intoxicated on-duty.
Medical Equipment Supply Company and Natural Rehabilitation Center enter into a
contract for a lease of a certain number of wheelchairs. Medical Equipment assures the
lessee that it has valid title to the goods. Under the UCC, this type of title warranty
arises
a. automatically.
b. only if the buyer asks for such a warranty.
c. only if the seller expresses such a warranty.
d. only if the seller actually has valid title to the goods.
Coco is considering forms of business organization for her concessions businessCocos
Cakes. Most states require that a limited liability company have
a. no minimum number of members.
b. at least one member.
c. at least two members.
d. at least three members, including one general partner.
Solar Power Panels Corporation requires its employees to have a high school diploma,
claiming a connection between a high school education and job performance. In a suit
against Solar Power under the Civil Rights Act of 1964, this is shown to have a
discriminatory effect. Solar Power has
a. an affirmative action defense.
b. a bona fide occupational qualification defense.
c. a business necessity defense.
d. no defense.
Illya owes Jenny $1,000. In a separate deal, Kasey owes Illya $1,000. Illya
unconditionally assigns his rights in the deal with Kasey to Jenny. Illyas right to the
$1,000 is then
a. unchanged.
b. extinguished.
c. incidental.
d. assigned to a court.
Miracle Mobile Devices, Inc., is a private, for-profit corporation that (1) was formed for
the purpose of manufacturing and distributing a newly patented tablet, (2) is owned by
five shareholders, (3) is subject to double taxation, and (4) has made no public offering
of its shares. Miracle is
a. an S corporation.
b. aclose corporation.
c. a nonprofit corporation.
d. a professional corporation.
Rafaela Art Gallery and Sequoia Exhibitions form a joint venture. When a dispute
arises, Rafaela files a suit against Sequoia. The court is most likely to apply the same
principles to this joint venture as it applies to
a. business trusts.
b. cooperatives.
c. corporations.
d. partnerships.
Bayou Development Corporation hiresCoastal Brokerage Associates to sell the
condominiums in a building at Bayou Developments resort. The agency will terminate
a. after the condos have been sold.
b. if the prices of the condos must be reduced to sell them.
c. once Bayou Development obtains insurance to cover the property.
d. when Bayou Development pays Coastal Brokerage its first commission.
Deepwater Dredging & Excavationholds itself out to others as being a corporation but
makes no attempt to incorporate. Estuary Marinasigns a contract with Deepwater that is
not performed. Estuary Marina files a suit against the firm. The court will likely hold
that Deepwater is
a. a corporation by estoppel.
b. an alien corporation.
c. an S corporation.
d. ultra vires.
Quaff n Quench Café buys twenty-five crates of oranges from Reynaldo Produce, Inc.
The parties agree to ship the oranges “F.O.B. Quaff n Quench via Swiftline Trucking
Company. The oranges rot in transit. The loss is suffered by
a. Quaff n Quench.
b. Swiftline.
c. Columbia.
d. Reynaldo Produce.
The Pennsylvania Consumer Protection Agency (PCPA) investigates the marketing
practices of Respond Now!, Inc. The PCPAserves a subpoena on Respond Now!,
ordering the firm to provide certain business records, including its marketing
agreements with other companies. Respond Now!refuses to comply with the subpoena.
On what is the company most likely basing its refusal? Is a court likely to support this
position? Why or why not?
Restocking Warehouse Corporation keeps a file of I-9 verifications forms. To inspect
this file, the appropriate government officer must obtain
a. a subpoena and a warrant.
b. a subpoena or a warrant.
c. a special executive order.
d. none of the choices.
If goods identified to a contract are destroyed through no fault of either party, both
parties are excused from performance.
Duress is a defense to the enforcement of a contract, but not a ground for rescission of a
contract.
Ethics is as well defined as the law.
The franchisor may require that the business use a particular organizational form and
capital structure.
The concept of corporate social responsibility is imposed on corporations by law.
The checks and balances in the U.S. Constitution prevent any one branch of
government from exercising too much power.
Identification takes place when specific goods are designated as the subject mater of a
sales or lease contract.
Using anothers trademark in a meta tag is not permissible, even if the use is reasonably
necessary.
The assignment of the same contract right to two different parties automatically cancels
both assignments.
An offer may invite an acceptance to be worded in specific terms but that cannot make
the contract definite.
Limited liability companies are treated as citizens of every state of which their members
are citizens.
Moral pressure constitutes false imprisonment.
Abuse of process applies to any person using a legal process against another in an
improper manner.
Many courts have broadened the concept of unconscionability to apply it in situations
other than sales of goods.
Browse-wrap terms are often unenforceable.