1) Efron borrows money to pay his tuition and signs a note payable to First Citizens
Bank. The bank assigns the note to Guaranty Bank. The assignment
a.does not affect Efron’s obligation to pay the note as promised.
b.frees Efron of the obligation to pay the note.
c.results in Guaranty Bank’s co-liability on the note with Efron.
d.results in Guaranty Bank’s co-liability on the note with First Citizens Bank.
2) Root & Branch Lumber Company obtains a fire insurance policy from Security
Insurance, Inc., on a $400,000 warehouse. The policy includes an 80-percent
coinsurance clause. Root & Branch insures the property for $320,000. In a fire, the
warehouse suffers $200,000 in damage. Root & Branch can recover
a.$400,000.
b.$320,000.
c.$200,000.
d.$80,000.
3) 20.
Fact Pattern 16-B1
Alain and Brie sign a contract for the sale of Alain’s Coffee Caf© to Brie. The parties
intend their written contract to be a final statement of most, but not all, of the terms of
their agreement-Alain must first buy the building from Developed Commercial
Properties, Inc., after which Alain and Brie will negotiate a price.
The owners of Ngai Rice Valley Farms, Inc., and Ozuru Markets, Ltd., are citizens of
countries that had ratified the Convention on Contracts for the International Sale of
Goods. They enter into a contract for a sale of rice. To be enforceable, this contract
a.need not be in writing.
b.may be oral or written, but has certain requirements as to form.
c.must be in writing.
d.must comply with the UCC’s Statute of Frauds provisions.
4) Kiefer, Lori, and Moira are shareholders of Nationmade Flags & Banners
Corporation. Before a shareholders’ meeting, they agree in writing to vote their shares
together in a certain manner. Usually, such agreements are held to be
a.invalid and unenforceable.
b.oppressive and irresponsible.
c.suspect and voidable.
d.valid and enforceable.
5) Bean House Coffees and Java Distributors, Inc., have a long-standing business
relationship that they would like to continue. For this reason, they may prefer to settle
any dispute between them through mediation because
a.the case will be heard by a mini-jury.
b.the dispute will eventually go to trial.
c.the process is not adversarial.
d.the resolution of the dispute will be decided an expert.
6) Julia, a world-famous chef, signs a contract to give lessons in French cooking to
Kyle. Julia wants to transfer her duties under the contract to Leila, a short-order cook at
Mom’s Caf©. The transfer is
a.valid because the performance required is of a nonpersonal nature.
b.valid if Leila is a highly regarded short-order cook.
c.not valid because performance depends on Julia’s personal skills.
d.not valid if Kyle does not hold Leila in high regard.
7) Lamont applies for a health insurance policy with MedInsure, Inc., an insurance
company, through Netta, an agent who works for MedInsure. Lamont pays the initial
premium. Netta writes a binder, which
a.acknowledges the application and promises to consider it.
b.attests to the truth of each statement in the application
c.evidences receipt of the payment of the initial premium.
d.indicates that a policy is pending and states its essential terms.
8) Oakes enters Parnell’s property to read an electric meter. Parnell asks Oakes to leave.
Oakes refuses. Oakes has most likely committed
a.trespass to land.
b.trespass to personal property.
c.slander of title.
d.no tort.
9) Nguyen Imports, Inc., accuses Ogilvie, an accountant, of committing defalcation.
This is
a.embezzlement.
b.general misconduct.
c.professional negligence.
d.misrepresentation of professional expertise.
10) 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 court€s decision.
c.means nothing.
d.means that the Montana court€s decision is the law in Montana.
11) 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.
12) Miranda is a U.S. citizen working in Europe for Tourist Vacations, Inc., a U.S.
travel agency. Tourist fires Miranda for reasons that she believes violate U.S. antidis-
crimination laws. Those laws apply
a.extraterritorially.
b.only to signatories of the North American Free Trade Agreement.
c.only to members of the World Trade Organization.
d.only within U.S. borders.
13) 13.Equestrian Stables Corporation’s articles list an incorrect address for its
incorporator. Under this circumstance, Equestrian Stables is most likely
a.a corporation by estoppel.
b.ade facto corporation.
c.ade jure corporation.
d.ultra vires.
14) In the case of Retail Sales Corp. v. Trucking Delivery Co., the court may rule
contrary to a precedent if the court decides that the precedent
a.is incorrect or inapplicable.
b.is not in line with the judge€s personal values.
c.would lead to unintended consequences.
d.would not bring about the result the judge prefers.
15) Fact Pattern 33-1B
Barney hires Clean Air, Inc., to install a new air conditioning system in his Dental
Clinic, LLP. Barney does not have the right to control the details of Clean Air’s
performance.
Refer to Fact Pattern 33-1B. The relationship between Barney and Clean Airis
a. client and independent contractor.
b. employer and employee.
c. master and servant.
d. principal and agent.
16) Spicy Salsa, Inc., complains to the Federal Trade Commission (FTC) about an ad
broadcast by Tangy Taco Sauce Company, Spicy Salsa’s competitor. The FTC
investigates and concludes that the ad is deceptive. The FTC’s next step is to
a.conduct negotiations between the competitors.
b.draft a formal complaint.
c.issue a cease-and-desist order.
d.permit Spicy Salsa to broadcast similarly deceptive counteradvertising.
17) The means test forces more people to file for Chapter 7 bankruptcy rather than gave
their debts discharged under Chapter 13.
18) Carney & Deb, Accountants, perform a variety of tasks for their clients€financial
statements and tax returns, for example. To accomplish these tasks, Carney & Deb
collects their clients’ personal and financial information. Carney & Deb can store the
personal and financial information of its clients on any electronic device, including a
smartphone, a tablet, a flash drive, a laptop, and a copier. When Carney & Deb
upgrades its storage media, the information is transferred between devices. Does
Carney & Deb have an ethical obligation to its clients with respect to this information?
If so, what are the ethics in the situation?
19) The expenses associated with an appeal can be considerable.
20) For an infringement of copyright to occur, the reproduction must be exactly the
same as the original.
21) A contractual obligation may not be discharged through novation.
22) Business Solutions Corporation (BSC) sells business application software-wage,
price, and inventory coordinating programs, for example-in different combinations and
packages, at different prices, downloadable online. To complete a deal, a purchaser
clicks on a button that, with reference to certain terms, states, “I agree.” What is this
sort of agreement called? Do the parties have a binding, enforceable contract that
includes the terms? Explain.