1) Mainstay, Inc., sponsors NowUCMe, a social-networking, video- and photo-sharing
site. To use NowUCMe, Mainstay requires users to accept terms of service associated
with the site. By clicking on “accept,” users enter into a contract
a.after thirty days.
b.as soon as they begin to use the service.
c.when a court declares that a contract exists.
d.under no circumstances.
2) In his will, Bryson makes a gift of $12,000 to Curtis. This is
a.a general bequest.
b.a general devise.
c.a specific bequest.
d.a specific devise.
3) Khalil holds a security interest in inventory owned by Luc. Khalil protects his claim
to the inventory in the event of Luc’s default by
a.assignment.
b.perfection.
c.redemption.
d.retention.
4) Eartha receives from Fergie a guitar stolen from Harper. To be criminally liable,
Eartha must
a.know that Fergie is the thief.
b.know that Harper is the true owner.
c.know that the guitar is stolen.
d.have paid for the guitar .
5) Region Construction Company has a right to drive its trucks across Staple Business,
Inc.’s property, which is adjacent to Region’s office. This right is
a.a license.
b.an easement.
c.a profit.
d.the power of eminent domain.
6) Lucille is married to Marcus. Lucille buys food for their children’s lunches and
charges the cost to Marcus’s account. This is
a.an agency by operation of law.
b.an agency by estoppel.
c.an agency by ratification.
d.not an agency relationship.
7) Leif contracts to sell his Micro Brewery & Pub to Naomi on April 1. On March 15,
Leif tells Naomi that he will not go through with the deal. Naomi can recover
a.the cost of any property that Naomi would find suitable.
b.the cost of a similar, nearby brewery and pub.
c.the Micro Brewery & Pub.
d.nothing.
8) Investment Sales Corporation wants to monitor its employees’ electronic
communications. Investment Sales’s best course of action to avoid liability under laws
related to employee monitoring is to notify
a.no one.
b.its employees.
c.its clients.
d.the public generally.
9) Build-It Construction Company contracts with Classic Beverage Corporation to build
Classic Beverage’s corporate headquarters. Build-It Construction contracts with
Dependable Tools & Materials Inc. for construction supplies but refuses to pick up the
order. Meanwhile, Classic Beverage hires Elmo, a certified public accountant, to work
in its cost-accounting division as an employee, with no authority to hire or supervise
others. Elmo asks Fayette, an outside experienced accountant, to advise him on certain
accounting procedures but fails to pay Fayette for the service. Classic Beverage also
contracts with Gloria, a salesperson, to solicit orders for its products in a designated
territory. Gloria obtains an order from Highpoint Concessions, Inc., which is assured
the order will be filled soon. But Gloria does not follow through with the paperwork
and fails to submit the order to Classic Beverage. Highpoint Concessions suffers a loss.
Dependable Tools, Fayette, and Highpoint Concessions claim Classic Beverage is liable
under agency law. Discuss fully whether an agency relationship was created by Classic
Beverage with Build-It Construction, Elmo, or Gloria.
10) Luther leaves his pick-up truck at Midtown Auto Service for an oil change. This is
a.a bailment.
b.accession.
c.none of the choices.
d.production.
11) OntheWeb Company is an Internet service provider. OntheWeb ‘s customer Phoebe
commits copyright infringement. OntheWeb is not liable for Phoebe ‘s activity
a.unless OntheWeb is aware of Phoebe ‘s violation.
b.unless OntheWeb is not aware of Phoebe ‘s violation.
c.unless OntheWeb shuts down Phoebe after learning of the violation.
d.under any circumstances.
12) 2.
Fact Pattern 15-B1
Digital Storage, Inc., offers to sell provide cloud-computing services to Entrepreneur
Enterprises, Inc., but mistakenly transposes some of the digits in the price so that
$15,400 appears in the offer as $14,500. Entrepreneur Enterprises accepts the written
offer.
Refer to Fact Pattern 15-B1. Digital Storage’s best defense against enforcement of the
contract is that Entrepreneur Enterprises knew
a.a bilateral mistake supports the cancellation of a contract.
b.a mistake of value supports the cancellation of a contract.
c.a unilateral mistake supports the cancellation of a contract.
d.the price was below the prices of comparable devices.
13) Bill’s Barber Supplies, Inc., is the major distributor of barber supplies in the state of
Colorado. Bill’s closest competitor is Dona’s Beauty Products Company, another
Colorado firm. They agree that Bill’s will distribute its products in western Colorado
and Dona’s will distribute its products in the eastern part of the state. This is
a.a group boycott.
b.a market division.
c.none of the choices.
d.a tying arrangement.
14) Norman is an accountant. Norman’s violation of generally accepted accounting
principles and generally accepted auditing standards
a.does not indicate that Norman was negligent.
b.is prima facie evidence that Norman was negligent.
c.precludes Norman from raising any defense against a negligence claim.
d.is embarrassing but will never subject Norman to liability.
15) In a sale or return, a buyer has an option to return the goods and undo the sale.
16) Specifically targeting the customers of a competitor is always a legitimate business
practice.
17) If work is usually done under the employer’s direction, this indicates
independent-contractor status.
18) A life insurance contract involves an intended beneficiary.
19) To be legally sufficient, consideration must be evidenced by something tangible.
20) Under a theory of market-share liability, a manufacturer sells ‘shares” of its
potential strict liability and thereby spreads the risk and the cost.
21) Under the Statute of Frauds, all contracts must be in writing to be enforceable.
22) It is always clear what is ethical in a given situation.
23) Bankruptcy law attempts to balance the rights of the debtors and the creditors.
24) In certain circumstances, bargains are so oppressive that the courts relieve innocent
parties of part or all of their duties.