1) When the risk of loss for goods passes from a seller to a buyer is generally
determined by the contract between the parties.
2) No federal court has held that digitally sampling a copyrighted sound recording of
any length constitutes copyright infringement.
3) Advertising that appears to be based on factual evidence will not be deemed
deceptive even if it is not reasonably supported by evidence.
4) A minor who enters into a contract for necessaries may disaffirm the contract but
remains liable for the reasonable value of the goods.
5) All oral contracts are enforceable under the UCC.
6) Nuncio serves in a representative capacity for Obadiah. With respect to binding
Obadiah to contracts, Nuncio’s authority
a.may be actual or apparent.
b.must be actual and apparent.
c.must be actual and not apparent.
d.cannot be actual or apparent.
7) BurgerBoy Restaurant Corporation allows its trademark to be used as part of a
domain name for BurgerBoyNY, Inc., an unaffiliated company. BurgerBoyNY does not
obtain ownership rights in the mark. This is
a.goodwill.
b.fair use.
c.a license.
d.a safe harbor.
8) The Prosthetic Legs and Arms Act (PLAA) sets up a no-fault compensation program
for persons injured through the use of medical prostheses. The PLAA protects
prosthesis makers from liability for unavoidable side effects. When Quint is injured in
an auto accident, his physician prescribes and fits him for a certain prosthetic. When
Quint suffers injuries from its use, he, files a suit against Replacement Limbs LLC, the
maker of the prosthetic, alleging strict product liability. Is there a defense that
Replacement Limbs might successfully assert in this case? If so, what is it, and why?
9) Soda Bubbles Corporation makes and sells soft drinks. Talia buys and drinks a Soda
Bubbles beverage, which proves defective and injures her. One justification for holding
Soda Bubbles strictly liable for the harm caused to Talia by its defective product is that
a.Soda Bubbles is making a profit from its activities.
b.Talia is a person, not a business.
c.making and selling products are abnormally dangerous activities.
d.Soda Bubbles and Talia are in privity.
10) Rooster Red LLC grants a franchise to Qiana to open and operate a Rooster Red
restaurant. Rooster Red will likely charge Qiana
a.an initial fee or lump sum price for the franchise license.
b.a percentage of Qiana’s weekly payroll expense.
c.an amount of Qiana’s monthly overhead savings, if any.
d.none of the choices.
11) Miklos employs Nathalie to handle a list of financial transactions on Miklos’s
behalf. This power will terminate on
a.any transaction causing a loss to Miklos.
b.Miklos’s death or incapacity.
c.Miklos’s sixty-fifth birthday.
d.Nathalie’s handling of one of each stipulated transaction.
12) Office Warehouse Inc. and Paperclips Inc. are the chief competitors in their market.
They agree that Office Warehouse will operate only east of the Mississippi River and
Paperclips will operate only west of the waterway. Under antitrust law, this is most
likely
a.a per se violation.
b.a violation only if their competitors make similar deals.
c.a violation only if their customers agree to honor the deal.
d.not a violation.
13) The Wisconsin state legislature enacts a statute that prohibits the advertising of
video games “because the games might be harmful to minors.” Despite this new statute,
the president of xGamez, Inc., orders xGamez marketers to place ads in various media.
When an xGamez ad appears on YUTV, a local television station, xGamez and YUTV
are charged with violating the statute. What is the defendants€ best defense against a
conviction?
14) Fact Pattern 9-B2
CallTalk Corporation, a smartphone and phone-time seller, chooses to use and register
“calltalk” as its second-level domain. Later, CallTalk ‘s less successful competitor,
CellTalk Company, chooses to use and register “caltalk” (an intentional misspelling of
“calltalk”) as its second-level domain. Still later, Call&Talk, Inc., uses the domain name
“callltalk” (also a deliberate misspelling of “calltalk”) without CallTalk ‘s authorization,
to sell pornographic phone conversations.
Refer to Fact Pattern 9-B2. By using a similar domain name to CallTalk ‘s, CellTalk is
most likely attempting to profit from its competitor ‘s
a.goodwill.
b.fair use.
c.license.
d.safe harbor.
15) 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.
16) Mai is a third party beneficiary under a contract between Novia and Otis. Novia and
Otis can modify or rescind their contract without Mai’s consent
a.at any time.
b.at no time.
c.after Mai’s rights have vested.
d.before Mai’s rights have vested.
17) 10.
Fact Pattern 18-B1
Moses sells an apartment building to Noelle with a promise to install a new heating and
air conditioning system , before September 1. The following February 1, Moses sends
Ollie, an HVAC technician, to begin the installation. Noelle orders Ollie to leave and
refuses to make further payments to Moses, who files a suit against Noelle.
Refer to Fact Pattern 18-B1. Noelle’s refusal to make further payments is most likely
a.a material breach.
b.complete performance.
c.excused by Moses’s failure to timely install the ventilation system.
d.substantial, but not complete, performance.
18) Boni, the owner of Caf© Rico, knows about, but does not take any action to
prevent, the sexual harassment of employees. Boni and the caf© may be liable for such
harassment by
a.an employee’s previous employer.
b.a customer or a co-worker.
c.an employee’s spouse or other close relative.
d.none of the choices.
19) Fact Pattern 29-1B
Michael contracts with Jill to fix the brakes on her Honda Civic. Jill leaves her car with
Michael, but refuses to pay when the work is done.
Refer to Fact Pattern 29-1B. If Michael imposes a lien on Jill’s car, it will end
a.in thirty days.
b.in sixty days.
c.when Michael voluntarily surrenders possession of the car.
d.when Jill obtains a court order requiring Michael to return the car.
20) 16.BriteCosmetics Corporation purchases all of the assets of Color-AllLipsticks
Corporation. With respect to BriteCosmetics’liabilities, Color-All Lipsticks is
a.automatically responsible.
b.not responsible under any circumstances.
c.responsible if Color-All Lipsticks is a competitor of Bright Cosmetics.
d.responsible if the sale is actually a merger or consolidation.
21) Medical Professionals Supply Source is an unincorporated cooperative.
Unincorporated cooperatives are often treated like
a. business trusts.
b. corporations.
c. joint stock companies.
d. partnerships.
22) Commerce Bank files a suit against Drake, its former accountant, alleging
constructive fraud. Drake may be held liable
a.if Commerce Bank cannot prove actual fraud.
b.if Drake was grossly negligent in the performance of his duties.
c.only if Drake acted with fraudulent intent.
d.only if Drake impersonated someone who could be liable for fraud.
23) Oklahoma enacts a law requiring all businesses in the state to donate 10 percent of
their profits to Protestant churches that provide certain services to persons whose
income is below the poverty level. Price-Lo Mart files a suit to block the law€s
enforcement. The court would likely hold that this law violates
a.no clause in the U.S. Constitution.
b.the establishment clause.
c.the free exercise clause.
d.the supremacy clause.
24) Rhys owns Solar Fuel Corporation. Rhys uses Solar Fuel’s funds to pay his personal
expenses, creates Thermal Power Corporation to engage in the same business as Solar
Fuel, transfersSolar Fuel’s assets to Thermal Power, and petitions Solar Fuel into
bankruptcy. This most likely warrants
a.a bonus to Rhys for financial maneuvers.
b.a discharge for Solar Fuel in bankruptcy.
c.a pierce of the corporate veil.
d.a review of Thermal Power’s articles of incorporation.
25) Unless a contract provides otherwise, an installment contract is breached when only
one nonconforming installment impairs the value of the whole contract, no matter how
slight the impairment.
26) The United States Supreme Court can review any case decided by any of the federal
courts of appeals.
27) Limits on a partner’s authority normally are effective only with respect to third
parties who are notified of the limitation.
28) Oral evidence of the modification of a contract after its making can be introduced at
a trial.
29) An important rule to keep in mind is that the offeree (the buyer) controls the
acceptance and thus the resulting contract.