Larry enters into a contract with Motivational Education Services to host a panel
discussion at a sales conference. When the conference is postponed indefinitely, Larry
asks a court to cancel the contract and return the parties to the positions that they held
before its formation. This request involves
a. specific performance.
b. an injunction.
c. rescission.
d. an action that the court cannot order.
As the beneficiary of a business trust, Kevins liability for trust debts and obligations is
a. limited to his capital investment in the trust.
b. limited to his personal assets.
c. nothing.
d. unlimited.
Rodrick, the chief executive officer of Social Post Host Inc., claims that certain actions
by the state of Texas infringe on rights guaranteed by the Bill of Rights.Most of these
guaranteeshave been held to limit
a. federal actions only.
b. federal and state actions.
c. federal and state actions, and actions by nongovernment entities.
d. actions by nongovernment entities only.
On March 1,Eugene retains Farley to act as his authorized agent. On April 1, Eugene
dies. On April 2, before Farley knows of Eugenes death, he enters into a contract on
Eugenes behalf. The contract is
a. binding on Eugenes heirs.
b. binding on Farley.
c. void.
d. voidable.
On May 1,Garage Prefabricators, Inc., agrees to sell four portable garages to Hiway
Truck Service Center. Five days later, Hiway refuses delivery and cancels the contract.
Garage Prefabricatorsis entitled to
a. forceHiway to accept the garage.
b. recover any damages from Hiway but not resell the garage.
c. resell the garage and recover any damages from Hiway.
d. resell the garage but not recover any damages from Hiway.
Nora enters into a contract with Oceanic Transport, Inc., to insure and ship a painting
from France to the United States for a certain price. But Oceanic makes a mistake in
adding the costs, which results in a contract price that is $1,000 less than the true cost.
Most likely, a court would
a. allow the parties to rescind the contract.
b. award damages to Nora for the mistake.
c. award damages to Oceanic for the mistake.
d. enforce the contract as is.
Hudson and Ilka want to market a new line of kayaks and related gear under the brand
name Journeys as a corporationJourneys, Inc. To avoid income taxes at the corporate
level, they should form
a. a C corporation.
b. a close corporation.
c. an S corporation.
d. a private corporation.
Garage Magic, Inc., contracts for the sale of a certain number of garage door openers to
Home & Yard Hardware stores. Ian buys one of openers. The applicable statute of
limitations prescribes a period of four years. To bring a product liability claim against
Garage Magic, Ian must file a suit within four years of
a. Ians discovery of an injury caused by the opener.
b. Garage Magics sale of the opener to Home & Yard.
c. Garage Magics design of the opener.
d. Home & Yards sale of the opener to Ian.
Margoworks as an administrator and receptionist in Neons Garage Door Store. Neon
withholds federal taxes from Margos pay, and controls the methods and details of the
performance of her work. Margo is not authorized to modify the prices or other terms of
a sale at the store. Omar installs Neons Garage Door products at the buyers locations.
Neon authorizes Omar to sell garage door upgrades and accessories at the buyers lo-
cations at prices that Omar negotiates with those buyers. With respect to sales at those
locations, Omar is
a. an independent contractor.
b. Neons employee only.
c. Neons employee and agent.
d. Neons principal.
To Sam, the written law of a particular society at a particular time is most significant.
Sam is a
a. legal positivist.
b. person who adheres to the historical school of legal thought.
c. legal realist.
d. person who adheres to the natural law tradition.
Owen uses the Internet to defraud Prairie Valley Credit Union. He is found guilty of
wire fraud. He can be punished by
a. imprisonment for not more than one year.
b. imprisonment for up to thirty years and fines of up to $1 million.
c. fines for not more than $50,000.
d. death.
Charles is a federal judge whose judicial decisions are part of case law, which does not
include interpretations of
a. regulations created by administrative agencies.
b. constitutional provisions.
c. statutes enacted by legislatures.
d. sound bites in the media.
Dinner Theater files a suit against Entertainers Agency, Inc., to enforce a contract. The
only written evidence of the contract is a memo on Entertainerss letterhead signed by
Fiorello, a company officer. The contract can be enforced if the memo includes
a. a correct title, such as “Dinner TheaterEntertainers Artist Contract.
b. Fiorellos title.
c. all essential terms.
d. a reference to the source of the funds to be paid.
Dreyfus points a gun at Eton, threatening to shoot him if he does not steal from his
employer, Freddys Gas & Shop store, and give the stolen funds to Dreyfus. Charged
with theft, Eton can successfully claim, as a defense
a. nothing.
b. duress.
c. entrapment.
d. self-defense.
A court declares Jimi to be mentally incompetent and appoints Krispin to be his guard-
ian. Later, without Krispins knowledge, Jimi signs a contract to sell his lake cabin to
Lazar for its real market value. The contract is
a. enforceable if Jimi comprehended the consequences.
b. enforceable if Jimi knew the market value of the farm.
c. enforceable if Lazar has been recordedto be the owner of the cabin.
d. void.
Standard Purchasing Corporation and Topmost Sales, Inc., enter into a partnering
agreement. Under a partnering agreement, parties agree
a. in advance to terms that apply to their future e-transactions.
b. to become partners.
c. to conduct transactions solely in electronic form.
d. to resolve all disputes without involving a third party.
Jim is shorter than Kevin, and Lonna is less attractive than Merilyn. Research shows
that compared with taller men and more attractive individuals, Jim will likely make less
income and Lonna will receive poorer performance reviews and a lower salary.
Appearance-based discrimination has been barred by
a. Michigan and at least six cities.
b. none of the choices.
c. all of the states.
d. the federal government.
Fletcherbuys a Great Big Burgers, Inc., franchise. Great Big Burgers requires that its
franchisees buy its products exclusively for every phase of their operations. Because
Fletcher wishes to buy less expensive products, he challenges the requirement. His best
argument is probably that the requirement violates
a. the implied covenant of good faith and fair dealing.
b. the Federal Trade Commissions Franchise Rule.
c. federal antitrust laws.
d. Great Big Burgerss marketing image.
Kali contracts to sell Leony her car for $3,000. This contract will be fully discharged
when Kali and Leony
a. agree to sign a bill of sale.
b. exchange the car for the $3,000.
c. sign a receipt.
d. shake hands and go their separate ways.
County Dentists Clinic offers to buy from Dental & Medical Supplies Company a
certain quantity of floss and other items for a certain price. Dental & Medical can ac-
cept 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 goods.
c. aprompt shipment of the goods only.
d. a shipment of nonconforming goods with a notice of accommodation.
Best Silo Storage applies for a business loan from County Credit Union. To help Best
Silo get the loan so that it will be able to stay in business and fulfill a deal it has made
with her, Dakota promises the credit unions loan officer that she will repay the loan if
Best Silo does not. To be enforceable, Dakotas promise
a. need not be in writing.
b. must be in writing because it benefits Best Silo.
c. must be in writing because the credit union is not a party to the other deal.
d. must be in writing because it benefits Dakota.
Lyn files a suit against Karl. Karl denies Lyns charges and sets forth his own claim that
Lyn breached their contract and owes Karl money for the breach. Karls claim is
a. counterclaim.
b. motion for judgment on the pleadings.
c. motion for summary judgment.
d. motion to dismiss.
Diverse Diversions, Inc., makes computer, video, and mobile device games. Ember
buys a hard copy of Final Infinity. Inside the package is a shrink-wrap agreement. With
respect to the contract for the games purchase, the shrink-wrap agreement may not be
enforced if
a. Ember does not read it.
b. Ember learns of it after contracting.
c. Ember learns of it before contracting.
d. theplay of the game is poor.
Francie drives into Gages Auto Service and asks Hong, a Gages employee, to replace a
tire onFrancies car. After Hong replaces the tire, but before Francie pays for it, any
contract between Francie and Gages is
a. executed.
b. executory.
c. void.
d. unenforceable.
Great Looks Clothing Corporation sends daily e-mail ads to its previous customers and
those who have opted to receive the notices.Hot Trends, Inc., sends e-mail ads to any
e-mail address that Hot Trends can find on the Web or otherwise generate. Ilene sends
e-mail notes to her friends, relatives, and co-workers, discussing personal issues and
recommending products or services that she likes.
Refer to Fact Pattern 9-1. Federal law preempts state antispam laws
a. with no exceptions.
b. except for laws that require the use of spam by business entities.
c. except for statutes that ban the use of spam altogether.
d. except for provisions that prohibit false and deceptive e-mailing practices.
Chazuses his computer to secretly install software on thousands of personal computers
without their owners knowledge. The program can reproduce itself and spread from one
computer to another via any USB port. This program is a
a. hacker.
b. botnet.
c. virus.
d. worm.
Ileana orally agrees to pay Jaime to plant and harvest a quarter of Ileanas farm acreage
for four corn-planting seasons. After Jaime prepares the land and plants the first crop,
Ileana says that their deal is off. Jaime can most likely recover
a. in quasi contract.
b. in reformation.
c. in restitution.
d. on the parties existing contract.
Jenna files a civil suit against Keshia. To succeed, Jenna must prove her case
a. beyond a reasonable doubt.
b. by a preponderance of the evidence.
c. by indisputable proof.
d. to the extent promised in her attorneys opening statement.
Luella trespasses on Merchandise Marts property. Through the use of reasonable force,
Merchandise Marts security guard Norris detains Luella until the police arrive.
Merchandise Mart is liable for
a. assault.
b. battery.
c. false imprisonment.
d. none of the choices.
Meatpackers, Inc., enters into a contract with Nemiahs Ranch for the delivery of a
certain number of beef cattle on a set schedule. Nemiahs delays the first delivery for
five days, aware that Meatpackers loses a certain percentage of profit each day. An
award to Meatpackersof consequential damages would
a. establish, as a matter of principle, that Nemiahsacted wrongfully.
b. provide Meatpackerswith funds for a foreseeable loss beyond the contract.
c. provide Meatpackerswith funds for its loss of the bargain.
d. punishNemiahs and set an example to deter other suppliers from similar acts.
The Pennsylvania legislature enacts a state law that violates the U.S. Constitution. This
law can be enforced by
a. no one.
b. the federal government only.
c. the state of Pennsylvania only.
d. the United States Supreme Court only.
The study of business ethics is concerned with the purposes of a business and how that
business achieves those purposes.
A bilateral contract comes into existence at the moment promises are exchanged.
Interrogatories are written questions for which written answers are prepared by a judge.
For purposes of diversity of citizenship, a corporation is a citizen only of the state in
which its principal place of business is located.
Implied warranties can arise from a “usage of trade.
An overemphasis on long-run profit maximizationis the most common reason that
ethical problems occur in business.
Laws would be meaningless without the courts to interpret and apply them.
No federal statute specifically addresses cyber crime.
In a lawsuit between Cloud Computing Corporation and Digital Enterprises, Inc., the
court applies the doctrine of stare decisis.What is this doctrine? What does this doctrine
have to do with the American legal system?
Few countries guarantee compensation to foreign investors if their property is taken.
Contract law demonstrates which excuses our society accepts for breaking certain types
of promises.
Cybersquatting is illegal only if a domain name is identical to the trademark of another,
not if the name is merely confusingly similar.
Some states require that a franchisor submit advertising aimed at prospective
franchisees to the state for approval.
Procedural law does not have a significant impact on a persons ability to pursue a legal
claim.
Apparent authority usually comes into existence through a principals pattern of conduct
over time.
Able Trucking Corporation files a suit in a state court against Bobs Service Company
(BSC), and wins. BSC appeals the courts decision, asserting that the evidence presented
at trial to support Able Truckings claim was so scanty that no reasonable jury could
have found for the plaintiff. Therefore, argues BSC, the appellate court should reverse
the trial courts decision. Is the appellate court likely to reverse the trial courts findings
with respect to the facts? Explain.