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. theMicro Brewery & Pub.
d. nothing.
Devon and Edmond enter into a contract for the closing of a sale of Devons recording
studio. When Edmonds schedule conflicts, he asks Ferdie to perform his duties at the
closing. This transfer of duties is
a. a delegation.
b. an assignment.
c. prohibited.
d. a negotiation.
Lucille files a suit against Murray. They meet, and each partys attorney argues the
partys case before a judge and jury. The jury presents an advisory verdict, after which
the judge meets with the parties to encourage them to settle their dispute. This is
a. a mini-trial.
b. a summary jury trial.
c. early neutral case evaluation.
d. not a legitimate form of dispute resolution.
Chord Guitars, Inc., sells guitars and other stringed instruments to consumers. A Chord
salesperson says to a potential customer, “This Chord is the best guitar youll find
anywhere, even online. This statement is
a. an implied warranty of fitness for a particular purpose.
b. an implied warranty of merchantability.
c. an express warranty.
d. none of the choices.
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 Enterprisesaccepts the written
offer.
Digital Storagesbest defense against enforcement of the contract is that Entrepreneur
Enterprisesknew
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.
Sales Marketing Corporation and Tech Support, Inc., negotiate a contract. If the
contract has all of the elements necessary for one of the parties to enforce it in court, it
is
a. a valid contract.
b. a voidable contract.
c. a void contract.
d. an unenforceable contract.
Over the course of a year, Suites & Sets Corporation sells household furnishings to
customers to whom it extends credit. Suites & Sets orders the furnishings from The
Storage Depots warehouse, from which the items are shipped via common carrier to
Suites & Sets customers. Article 2 of the UCC governs
a. all of the parties sales of the goods.
b. Suites &Setsextension of credit.
c. The Storage Depots storage of the goods.
d. each companys management of its operations.
Contracting parties cannot opt out of the terms of the UETA.
Noracontracts with Odellto sell land that, unknown to either party, has groundwater
contaminated from adjacent land that was occupied several decades earlier by a paper
pulp processing plant. When this is discovered, Noraasserts the doctrine of commercial
impracticability. This doctrine applies only when, with respect to an event that renders
performance impossible, at the time the contract was formed the parties
a. could not have reasonably foreseen the supervening event.
b. couldhave reasonably foreseen the supervening event.
c. should have foreseen the supervening event, reasonable or not.
d. should not have foreseen any supervening events.
Ricardo suspects his supervisor Simone of unethical accounting practices. But Ricardo
does not want to report Simone if she will find out who reported her and fire Ricardo.
An important feature of online reporting systems like EthicsPoint is that an employee
reporting unethical behavior
a. can do so anonymously.
b. is financially compensated if he or she is fired as a result of a report.
c. must fully identify themselves when making a report.
d. must have additional employee support to make a report.
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. Great Looks and Hot Trends are subject to the laws of the
states in which they are located and do business. Many states
a. prohibit false and deceptive e-mailing practices.
b. require the use of spam by business entities.
c. ban the use of spam altogether.
d. preempt the application of federal law to commercial e-mail.
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 judges personal values.
c. would lead to unintended consequences.
d. would not bring about the result the judge prefers.
Economy Bank issues a letter of credit in favor of Finish & Refining Company, a U.S.
firm, to facilitate an international sales contract to buy resources from Global Mining,
Ltd., a British company.
Global Miningis entitled to payment when it
a. enters into the contract with Finish & Refining.
b. verifies that Finish & Refining has the money to pay for the purchase.
c. complies with the terms and conditions of the letter of credit.
d. asks to be paid.
Daves uncle tells Dave that if “he feels that Dave deserves it, he will give Dave $10,000
when Dave graduates from college. Daves uncles promise is
a. illusory.
b. a contract.
c. a forbearance.
d. a preexisting duty.
Helene, a disabled person, applies for a job at Industrial Engineering Applications,
Inc.,for which she is well qualified, but for which she is rejected. Industrial Engineering
continues to seek applicants and eventually fills the position with a person who is not
disabled. Heleneis most likely to succeed in a suit against Industrial Engineering for
discrimination under the Americans with Disabilities Act if she can show that
a. she was not hired solely because of her disability.
b. she can function well with corrective devices or on medication.
c. her disability causes her undue hardship.
d. she could not perform the job even with reasonable accommodation.
CallTalk Corporation, a smartphone and phone-time seller,chooses to use and register
“calltalk as its second-level domain. Later, CallTalks 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 CallTalks authorization, to
sell pornographic phone conversations.
Refer to Fact Pattern 9B-2. CallTalk wants to sue Call&Talk for its unauthorized use of
the domain name “callltalk. Before bringing the suit, CallTalk has to ask the court for a
subpoena to discover
a. the true identity of the owner of the unauthorized site.
b. the amount of the profits of the unauthorized site.
c. the estimated costs of the court proceedings and discovery.
d. all of the registered variations of the name “calltalk.
Vijay enters into a contract to sell his laptop to Winnie. Winnie takes possession of the
laptop as a minor and continues to use it well after reaching the age of majority. Winnie
has
a. expressly ratified the contract.
b. impliedly ratified the contract.
c. disaffirmed the contract.
d. none of the choices.
Rafi, a van driver for Speedy Delivery Company, causes a multi-vehicle accident on a
city street. Rafi and Speedy are liable to
a. all those who were injured.
b. only those who were uninsured.
c. only those whose injuries could have been reasonably foreseen.
d. only those whose vehicles were closest to Rafis van.
HoneyBee Foods, Inc., in Illinois, and Jelly Roll Pastries, in Kentucky, consent to have
their dispute resolved in arbitration according to the law of Illinois. This is a ground for
a court to
a. compel arbitration.
b. review the merits of the dispute.
c. review the sufficiency of the evidence.
d. set aside any award.
Arnold loses his suit against Buffy in a Coloradostate trial court. Arnold appeals to a
state intermediate court of appeals and loses again. Arnold would appeal next to
a. a U.S. district court.
b. theColoradoSupreme Court.
c. the United States Supreme Court.
d. the U.S. Court of Appeals for the Ninth Circuit.
Seiko works for TallTales Publishing, Inc. The basis for Seikos contribution under the
Federal Insurance Contribution Act to help pay for benefits that will partially make up
for her loss of income on retirement is her
a. seniority at TallTales.
b. annual wage base.
c. special job skills.
d. county of residence.
Shop n Pay Convenience Stores, Inc., is a franchisor. Tonya operates a Shop n Pay fran-
chise. Ulysses is one of Tonyas employees. As a franchisor, if Shop n Pay controls the
day-to-day operations of the business to a significant degree, it may be liable for
tortious acts by
a. no one.
b. Shop n Pay only.
c. Shop n Pay and Tonya, but not Ulysses.
d. Shop n Pay, Tonya, or Ulysses.
Flannery is seventeen years old. Under the Fair Labor Standards Act, she cannot work
a. during school hours.
b. in a hazardous job.
c. more than eighteen hours per week.
d. without a special permit.
First Community Credit Union and General Hydraulics. Inc., have their dispute re-
solved in arbitration. Before determining the award, the arbitrator meets with First
Communitys representative to discuss the dispute withoutGeneral
Hydraulicsrepresentative being present. If this meeting substantially prejudicesGeneral
Hydraulicsrights, a court will most likely
a. compel arbitration.
b. review the merits of the dispute.
c. review the sufficiency of the evidence.
d. set aside any award.
Lucille is married to Marcus. Lucille buys food for their childrens lunches and charges
the cost to Marcuss account. This is
a. an agency by operation of law.
b. an agency by estoppel.
c. anagency by ratification.
d. not an agency relationship.
Comfort Foods Corporation makes and markets its products nationwide. To be
considered socially responsible when making a business decision, Comfort Foods must
take into account the needs of
a. its customers and the communityonly.
b. its employees and owners only.
c. its employees, owners, customers, creditors, suppliers, and the community.
d. no one.
Jon, a law enforcement official, monitors Kelseys Internet activitiese-mail and Web site
visitsto gain access to her personal financial data and student information. This may
violate Kelseys right to
a. equal protection of the law.
b. privacy.
c. procedural due process.
d. substantive due process.
Merry Music Inc. and Nayda enter into a contract for Nayda to write six songs for
which Merry Music agrees to pay her. Nayda transfers her right to payment under the
contract to Omni Artists Agency. In the transfer of rights, Nayda is
a. a delegator.
b. an assignor.
c. an obligor.
d. an alien.
Merlin is a drug addict who has completed a supervised drug-rehabilitation program.
Nabil used drugs casually in the past. Both work for Omni Insurance & Investments
Inc. Considered to have a disability under the Americans with Disabilities Act of 1990
a. areMerlin and Nabil.
b. isMerlin only.
c. isNabil only.
d. none of the choices.
Sun Power, Inc., sells solar power cells and panels to commercial dealers in the
Southwest. With regard to the UCCs good faith requirement, Sun Power can
a. avoid it only by a conspicuous written disclaimer.
b. avoid it only by oral disclaimer.
c. avoid it with or without a disclaimer.
d. not disclaim it.
Dharma enters into a contract to manage the operations of Esthers dental office for one
year, renewable for subsequent one-year terms. If this contract is discharged like most
contracts, it will be
a. canceled.
b. breached.
c. altered.
d. performed.
Expressly designating a third party as a beneficiary in a contract does not indicate
whether the beneficiary is intended or incidental.
Generally, all contractsare assumed to be shipment contracts if nothing to the contrary
is stated in the contract.
Terms in a shrink-wrap agreement have been enforced in the same way as the terms of
other contracts.
To recover workers compensation, an employee must prove that an injury did not occur
on the job or in the course of employment.
A contract that has been fully performed by the parties is called an executory contract.
Compensatory damages compensate a party injured by a breach of contract by
punishing the party that breached the contract.
If a limited liability company (LLC) agreement does not cover a topic, the state LLC
statute will govern.
Decisions by higher courtsare not binding on lower courts.
No offer can be accepted by silence.
Thegoal of tort law is to put a defendant in the position that he or she would have been
in had the tort occurred to the defendant.
Franchising is a form of licensing.
A promise to do what one already has a legal duty to do constitutes legally
sufficientconsideration.
An agents implied authority can be implied by custom.
An employer is charged with the knowledge of any dangerous condition discovered by
an employee and pertinent to the employment situation.
Contracts in restraint of trade usually positively affect the public policy that favors
competition in the economy.
In a contract for a sale of goods, the usual measure of compensatory damages is the
difference between the contract price and the market price.