JD 26241 | Course Paper

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Under which sections of the UCC are buyers and lessees obligated to accept and pay for

conforming goods in accordance with the contract?

A. 2-301 and 2A-516(1)

B. 2-508 and 2A-513

C. 2-613 and 2A-221

D. 2-612(2) and 2A-510(1)

E. 1-205(1) and 208(1)

Kite Sales. Wendy is president of a business that manufactures kites. The kites of her

company, ABC Kites, are sold to large toy stores. After Wendy learned a great deal

about kites, she started to make kites at home and to promote them to large toy stores.

She also started selling kites to friends. Some of the directors learned about her kite

sales and accused her of wrongdoing. Wendy denied any wrongdoing. What remedy

will be imposed on Wendy, if any, for her home kite sales?

A. Nothing because Wendy did not engage in any wrongdoing.

B. She will be required to cede to the corporation half of any profits she earned as a

result of the breach.

C. She will be required to cede to the corporation only profits she earned as a result of

the breach that the corporation can prove by a preponderance of the evidence it lost as a

result of her actions.

D. She will be required to cede to the corporation any profits she earned as a result of

the breach unless she can by a preponderance of the evidence that the corporation lost

no sales as a result of her actions.

E. She will be required to cede to the corporation all the profits she earned as a result of

the breach.

________________ is the agency responsible for enforcing the Federal Food, Drug, and

Cosmetic Act.

A. The U.S. Food and Drug Administration

B. The Federal Consumer Administration

C. The Federal Consumption Administration

D. The Federal Safety Commission

E. The U.S. Uniform Drug Commission

Hot Toaster. Rebecca bought a toaster from Super Store and brought it home. A friend

of hers, Greg, was at her house making toast. The toaster malfunctioned and shocked

Greg resulting in a small burn to his hand requiring medical attention. At a garage sale,

Rebecca also purchased a blender from a friend, Samantha. When she paid for the

blender, Rebecca said that it would be great for making smoothies. Samantha said

nothing and just smiled while taking Rebecca’s money. Unfortunately, the blender was

not powerful enough to make smoothies. Based on the facts presented, what type of

warranty did Super Store give Rebecca?

A. An express warranty.

B. An implied warranty of merchantability.

C. An implied warranty of fitness for a particular purpose.

D. An express warranty, an implied warranty of merchantability, and an implied

warranty of fitness for a particular purpose.

E. An implied warranty of merchantability and an implied warranty of fitness for a

particular purpose, but not an express warranty.

Which of the following is the supreme court of appeal in England?

A. The House of Lords

B. The Crown Court

C. The Supreme Court

D. The High Court

E. The Queen’s Bench

An instrument that reads, “Pay to the order of Jones or Green,” is payable to _________

payees.

A. joint

B. concurrent

C. consecutive

D. alternative

E. alternate

Which of the following are written documents signed by a party that makes an

unconditional promise to pay a specific sum of money on demand or at a certain time to

the holder of the instrument?

A. Negotiable instrument.

B. Informal contracts.

C. Simple contracts.

D. Letters of credit.

E. Formal contracts.

Roofing Issues. Sally agrees to roof a house for Bob. After doing his research, Bob

chooses Sally based on her great reputation for being conscientious and doing good

work. Bob knows little about roofing and stays away from all the noise involved. Sally

provides her own tools for herself and other workers, sets her own schedule, and

charges a flat rate of $10,000 to be paid when the job is completed. Sally hires Trudy,

Glen, and Fred to help with the roofing. She pays them an hourly rate, supervises their

work, provides them with tools and materials, and sets their schedules. Curious about

what is going on there, Bob’s friend Spencer walks by the house while the roofing is

being done. Glen absent-mindedly throws some old shingles off the roof and hits

Spencer in the head resulting in him going to the local emergency room and receiving a

couple of stitches in his scalp. Spencer decides to sue all the roofers and also Bob and

Sally for his hospital expenses and for pain and suffering. Assuming Glen was

negligent, which of the following is the most likely result in a lawsuit against Trudy and

Fred brought by Spencer?

A. Spencer will win because Trudy and Fred were coworkers with Glen.

B. Spencer will win because Trudy and Fred were independent contractors on the same

job as Glen.

C. Spencer will win only if it can be established that both Sally and Bob are insolvent

and unable to pay any judgment.

D. Spencer will lose because Trudy and Fred were not negligent and were not

employees of Spencer.

E. Spencer, Trudy, and Fred must all bear 1/3 of any judgment because they are

employees of the same rank.

Shaky Bicycles. Rhonda, an incorporator who filed the articles of incorporation for

ABC Corporation, a corporation set up to sell bicycles, listed the correct town and street

but incorrectly put the wrong street number in the document. Helen, a manufacturer of

bicycle parts, had sold a number of parts to ABC Corporation. Unfortunately, the

corporation was not making any profit, and Helen was not paid in a timely manner.

Rhonda told her that the corporation was not liable because it was not validly formed

due to the address mistake. Bernice, another creditor of ABC Corporation, also claimed

that a shareholder of Shaky Bicycles, Slick, was personally liable to her. Bernice

alleged that Slick committed fraud against her when he told her that ABC Corporation

was making large amounts of money, that if she would only loan $50,000 to the

corporation he would marry her, and that the corporation would make so much money

that she would be wealthy in six months. She loaned the funds, but the corporation has

been unable to repay her. Slick told her that he is sorry, but that her only avenue of

recovery is through the corporation. Which of the following is the likely result of

Helen’s attempt to hold the corporation liable for her debt?

A. She will likely be successful.

B. She will be successful only if ABC Corporation removes its de jure status.

C. She will be successful only if ABC Corporation removes its de facto status.

D. She will be successful only if ABC Corporation has at least 50 shareholders.

E. She will likely be unsuccessful.

George offers to sell Penelope a ring that George found in his yard. He and Penelope

look at the ring and decide that they are not sure what it is, probably just a shiny stone.

Penelope pays George $10 for the ring. The ring turns out to be a diamond worth much

more than $10. George wants the ring back, and Penelope refuses. What is the most

likely result?

A. The ring will be returned to George because of mutual mistake.

B. The ring will be returned to George because of unilateral mistake.

C. The ring will be returned to George because of equity.

D. The ring will remain with Penelope unless George can establish that she was

negligent in not recognizing the ring’s true value.

E. The ring will remain with Penelope because the parties contracted on the assumption

that they did not know the value of the ring.

An agent’s obligation to inform the principal of the agent’s actions on the principal’s

behalf and of all relevant information is a __________________.

A. duty of notification

B. duty of information

C. requirement of conveyance

D. constructive notification

E. constructive information

In which of the following cases did the U.S. Supreme Court rely on precedent to strike

down a school’s admissions policy that reserved slots for members of minority races?

A. Story v. Price

B. Brown v. Board of Education

C. University of California v. Bakke

D. Grover v. University of Mississippi

E. Adkins v. Price

The Burial Emporium. Fred operates a funeral home called Fred’s Burial Emporium.

Fred likes to keep things simple. He has one flat price with no itemization and requires

that customers purchase a complete package from him if they want any services

whatsoever. Fred also goes door-to-door selling funeral packages. He tries to visit

neighborhoods in which there has been a recent death because residents in the

neighborhood will have final arrangements on their minds. He believes and informs

customers that once customers sign a contract for burial services, there is no backing

out. Fred also obtains a good deal of business from phone solicitation. He enjoys calling

late at night, between 10 p.m. and 11 p.m., when people are tired, but before they go to

bed. He believes that if people do not feel well, they are more likely to consider funeral

arrangements. After some pesky consumer complaints, the Federal Trade Commission

and other federal agencies investigate Fred. He hires a good lawyer with his profits in

an attempt to stay out of trouble. Which of the following is true regarding Fred’s

door-to-door solicitation and his practice of informing customers that there is no

backing out of contracts entered into for funeral services?

A. There is no problem with Fred’s actions so long as he truly gives specific notice that

he will not agree to any cancellations.

B. Fred must give customers at least 24 hours in which to cancel such a contract, but

that is only because funeral services are involved.

C. There is no problem with Fred’s actions even if he does not give specific notice that

he will not agree to any cancellations.

D. Because door-to-door sales are involved, Fred must give consumers 24 hours in

which to cancel.

E. Because door-to-door sales re involved, consumers must have three days in which to

cancel purchases.

Which of the following is used as a basis for discharge by operation of law when

performance is still objectively possible but would be extraordinarily injurious or

expensive to one party?

A. Frustration of purpose

B. Commercial impracticability

C. Alteration of the contract

D. Anticipatory repudiation

E. None of these because there is no such concept.

What do business laws protect?

A. All contracts

B. Employment decisions

C. Payments to suppliers

D. Embezzlement

E. All contracts, employment decisions, and payments to suppliers

___________________ are directors who are not officers or employees of the

corporation.

A. Approved directors

B. Outside directors

C. Inside directors

D. Affiliated directors

E. Unaffiliated directors

Which type of law involves the rights and responsibilities involved in relationships

between persons, and between persons and their government?

A. Criminal

B. Procedural

C. Civil

D. Natural

E. Positive

Garage sale. Richard, who is cleaning out his garage, offers to sell Dawn a used

computer for $200. Dawn replies that “I’ll think about it and buy it if I decide to do so.”

Richard also calls Denise and offers to give Denise a used business law book. She is

excited to receive the book and tells him that she will pick it up the next day. Richard

also agrees to sell a communications book for $50 to Jill who promises to pick it up the

next day. Meanwhile, Sam comes to visit, offers Richard $20 for the business law book

and Richard sells it to him. Sam also offers Richard $50 for the used computer. Richard

sells it to Sam because he does not expect to hear from Dawn. Sam sees the

communications book and offers Richard $60 for it. Richard decides to forget about Jill

and proceeds to sell the book to Sam for $60. Denise is very angry because Richard did

not save the book for her and claims that he breached a contract because she had

accepted his offer. Jill is also angry because Richard sold the communications book and

informs him that he breached the contract he had with her. Exactly 31 days later, Dawn

tells Richard that she would like the computer. She tells him that her response

constituted consideration in that it bound him to an option contract and that he should

have awaited her final decision. Richard tells Sam that he needs to return everything for

a full refund. Sam refuses. Which of the following is true regarding Denise’s claim that

Richard breached a contract with her because Richard did not save the book for her

after she had accepted his offer?

A. Denise is correct, and Richard breached a contract he had with her.

B. Denise is correct only if she can show that she had given past consideration in other

dealings with Richard.

C. Denise is correct only if she can show that Richard did not really need the money.

D. Denise is incorrect because her acceptance was illusory.

E. Denise is incorrect because she did not provide any consideration.

Self-Centered President. Tina is the new president of “We Manage You,” a corporation

set up to manage physician practices. Tina has never been very concerned with minority

shareholders because she does not believe that they have any influence over the

company because they cannot even elect a director. She is told, however, that the

corporation has a practice of cumulative voting. An election is coming up in which 10

directors will be elected. Minority shareholders own 2,000 shares while majority

shareholders own 8,000 shares. Tina tells her vice president, George, that she wants to

ignore minority shareholders and focus her interests on majority shareholders and the

directors. She also tells George that she wants to be particularly conscientious toward

directors because the directors appoint officers, and she does not believe that she owes

any actual duties to shareholders. She further orders George to destroy some documents

subpoenaed in a criminal investigation against the company for illegal tax evasion.

When George protests, Tina tells him not to worry because officers cannot be held

responsible for criminal actions so long as the actions are done as part of the duties of

an officer. She explains to him that only the corporation can be charged with liability in

such cases. How many votes will the minority shareholders have in the election?

A. 2,000

B. 4,000

C. 6,000

D. 10,000

E. 20,000

In a(n) _____ relationship, the agent is authorized to act for and on behalf of the

principal, who hires the agent to represent him or her.

A. authority

B. principality

C. agency

D. decreed

E. conferred

The ______ is a significant body of law to business activities including sales, banking,

and warranty.

A. Federal Business Code

B. Model Business Code

C. Uniform Transactional Model

D. Uniform Commercial Code

E. Marketing Transaction Code

The _____ terms of a contract are those terms that would allow a court to determine

what the damages would be in the event that one of the parties breaches the contract.

A. important

B. significant

C. material

D. adequate

E. identifiable

What type of notice prevents a holder from being a holder in due course?

A. Notice that the instrument is overdue.

B. Notice that the instrument has been dishonored.

C. Notice that the instrument was issued as part of a series that is in default.

D. Notice that the instrument is overdue, notice that the instrument has been

dishonored, and also notice that the instrument was issued as part of a series that is in

default.

E. Notice that the instrument is overdue or notice that the instrument has been

dishonored, but not notice that the instrument was issued as part of a series that is in

default.

Positive abstractions that capture our sense of what is good or desirable are ______.

A. ethical ideas

B. values

C. conscience demands

D. desirable principles

E. action goals

Pet Pig Farm. Marcy wanted to buy Lucy’s land and use it to breed small pigs to be kept

as pets. Marcy told Lucy that having water on the property was very important. Lucy

assured her that a spring ran through one corner of the property. Therefore, Marcy

agreed to buy the farm. Although she did not ask Lucy anything about it, Marcy, who

loved pigs, assumed that the neighbors would be pleased with the pigs being in the area.

In a separate contract, Lucy also agreed to sell Marcy a used truck for $5,000. After the

contract for the land sale was entered into, it was discovered that actually the spring did

not run through the corner of Lucy’s property. The area in which the spring ran actually

belonged to a neighbor. Additionally, when Lucy brought Marcy the used truck, Marcy

said, “That’s not the truck!” It was discovered that Lucy, who had two trucks, thought

that Marcy had bought the older truck when Marcy thought she had purchased the

newer truck. Marcy was also surprised when she received a petition signed by all

surrounding landowners objecting to the presence of the pigs and threatening to sue

Marcy for nuisance. Assuming that Lucy fraudulently made a misrepresentation

regarding the spring running through the corner of the farm knowing the statement was

not correct, considering only the lack of a spring issue, which of the following is true if

Marcy does not want to go through with the sale of the farm?

A. Marcy may rescind the contract, and she will recover $10,000 in damages that is an

amount set by federal law.

B. Marcy may rescind the contract, but she may not recover damages.

C. Marcy may sue for damages regardless of whether she can establish injury, but she

may not rescind the contract.

D. Marcy may rescind the contract, and she may also sue for damages if she can

establish injury.

E. Marcy may rescind the contract and she may also recover damages, but only nominal

damages.

A firm offer must be _____.

A. oral and indefinitely revocable

B. oral and irrevocable for up to one year

C. in writing and indefinitely revocable

D. in writing and irrevocable for up to three months

E. in writing and irrevocable for up to one year

Which of the following is true of the Supreme Court in Japan?

A. The Japanese system utilizes a well-developed jury system.

B. The Japanese discovery process is similar to that in the U.S.

C. The Japanese legal system has a distinct pretrial stage.

D. At the first meeting between the parties, discovery is conducted.

E. None of these.

What do UCC Sections 2-601 and 2A-509 indicate in reference to the perfect tender

rule?

A. That if goods or tender of delivery fail in any respect to conform to the contract, the

buyer/lessee has the right to accept the goods, reject the entire shipment, or accept part

and reject part.

B. That if goods or tender of delivery fail in any material respect to conform to the

contract, the buyer/lessee has the right to accept the goods, reject the entire shipment, or

accept part and reject part.

C. That if goods or tender of delivery fail in any respect to conform to the contract, the

buyer/lessee has the right to accept the goods or reject the entire shipment, but not the

right to accept part and reject part.

D. That if goods or tender of delivery fail in any material respect to conform to the

contract, the buyer/lessee has the right to accept the goods or reject the entire shipment,

but not the right to accept part and reject part.

E. That if goods or tender of delivery fail in any respect to conform to the contract, the

buyer/lessee only has the right to accept the entire shipment and sue for damages.

The process of questioning potential jurors to ensure that the jury will be not show

biases towards the parties is:

A. Discovery.

B. Voir dire.

C. Peremptory challenge.

D. Motion.

E. Opening statement.

Which of the following is true regarding rights of a trustee in a Chapter 7 bankruptcy?

A. The trustee takes possession of the debtor’s property and has it appraised.

B. If someone else holds the debtor’s property, the trustee has the power to require the

person to return that property.

C. The trustee may temporarily take over the debtor’s business.

D. The trustee takes possession of the debtor’s property and has it appraised; if someone

else holds the debtor’s property, the trustee has the power to require the person to return

that property; and the trustee may temporarily take over the debtor’s business.

E. The trustee takes possession of the debtor’s property and has it appraised; and if

someone else holds the debtor’s property, the trustee has the power to require the person

to return that property; but the trustee may not take over the debtor’s business even

temporarily.

In which of the following does a shareholder sue alleging that he or she has suffered

damages caused by the corporation?

A. Investigative action

B. Shareholder’s action suit

C. Shareholder’s direct suit

D. Shareholder’s derivative suit

E. Active allocation suit