1) It is a violation of federal law to sell a pesticide or herbicide that has a chemical
strength different from the concentration declared on the label.
2) International treaties never stipulate arbitration for resolving disputes.
3) Most courts apply the same principles to joint ventures as they apply to partnerships.
4) The bank is liable to the payee or the holder of check in a civil suit if a check is
dishonored for insufficient funds.
5) The Uniform Commercial Code has been adopted in all fifty states.
6) In corporate law, acts of a corporation that are beyond its express or implied powers
are de facto or de jure acts.
7) Contracts in restraint of trade usually positively affect the public policy that favors
competition in the economy.
8) The franchise is not strictly speaking a business organizational form.
9) An intoxicated person, after becoming sober, may ratify a contract expressly or
impliedly.
10) When a bailee is holding goods that are to be delivered under a contract without
being moved, the risk of loss cannot pass to a buyer.
11) Abuse of process applies to any person using a legal process against another in an
improper manner.
12) Haute Dogs, Inc., sells a franchise to Ilene’s Cuisine, a lunch truck. Ilene’s Cuisine
is
a.a franchisee.
b.a franchisor.
c.an agent.
d.a principal.
13) Blaise is an officer with Core Business Services, Inc. Blaise is in a position to
acquire assets that would benefit the company if acquired in its name. Blaise’s usurping
this opportunity may violate the duty of
a.acting in one’s own interest.
b.agency.
c.care.
d.loyalty.
14) Omega, Ltd., imports athletic shoes made in Southeast Asia into the United States.
To obtain a larger share of the U.S. market, Omega sells the athletic shoes at lower
prices here than in its exporting countries. With respect to these imports, the United
States may
a.do nothing.
b.assess antidumping duties.
c.order the return of the athletic shoes to the exporting countries.
d.confiscate the athletic shoes without just compensation.
15) Rashi contracts to work for Social Data Analysis Corporation during June for
$4,500. On May 31, Social Data cancels the contract. Rashi declines a job of a different
type and rank with Tech Collection, Inc., which would have paid $3500. Rashi files a
suit against Social Data. As compensatory damages, Rashi can recover
a.$4,500.
b.$4,000.
c.$500.
d.$0.
16) Ortensia is married to Paolo. Ortensia executes a will, leaving certain property to
Paolo and other property to Quito, who is unrelated to Ortensia and Paolo. On
Ortensia’s death, the share of property given under the will can be renounced by
a.neither Paolo nor Quito.
b.Paolo and Quito.
c.Paolo but not Quito.
d.Quito but not Paolo.
17) Handcrafts & Hobbies Store agrees to hire Iliana for one year at a salary of $600
per week. When Handcrafts & Hobbies cancels the contract, Iliana spends $150 to
obtain a similar job that pays $450 per week for a year. Iliana is entitled to recover
a.the amount of the wages that Handcrafts & Hobbies promised only.
b.the difference between the wages at the two jobs only.
c.the difference between the wages at the two jobs plus $150.
d.$150 only.
18) The brakes on a train owned by Rolling Stock Railway Inc. malfunction. The train
rolls towards maintenance workers on the tracks. Everyone gets out of the way except
Sid, who wants to show off. The train hits Sid, who sues Train Components, Inc., the
brakes’ manufacturer. Train Components can raise the defense of
a.a component-part manufacturer.
b.assumption of risk.
c.privity.
d.product misuse.
19) Arnold buys a backhoe from Big Dig Equipment Inc. Arnold is unaware that Credit
Collection Company holds a lien against the backhoe when he buys it. If Credit
Collection repossesses the backhoe, Arnold can
a.recover from Big Dig for breach of warranty.
b.do nothing.
c.file criminal charges against Big Dig and Credit Collection.
d.recover damages from Credit Collection for breach of warranty.
20) When Hester’s car breaks down, she asks Insta-Tow, Inc., to tow it to Jerry’s Repair
Shop. There is no discussion of a price, and Hester and Insta-Tow do not sign any
documents. Later, Insta-Tow sends Hester a bill. With respect to Hester’s obligation to
pay the bill, this is
a.an express contract.
b.an implied contract.
c.no contract.
d.a quasi contract.
21) Stop n’ Gas Convenience Stores, Inc., is an East Coast-based firm that does business
throughout the United States. With respect to this circumstance, the UCC has been
adopted by, and applies in,
a.all of the states, in whole or in part.
b.only the states on the Atlantic and Pacific coasts.
c.none of the states, to date.
d.only the lower forty-eight states-not Alaska or Hawaii.
22) Cellphones & Calltime, Inc., makes an offer to Delores to enter into a contract to
work as a salesperson for a certain base salary plus commission for ninety days subject
to a one-year renewal based on her performance. Delores accepts the offer. A valid
contract requires
a.a price and a subject.
b.a duration and termination provision.
c.an offer and an acceptance.
d.specific quality standards.
23) Fact Pattern 29-2B
Robin’s home is in a state that has a $30,000 homestead exemption. Robin defaults on a
$60,000 debt that she owes to Suburban Mortgage Company. Robin’s home is sold at
auction for $80,000.
Refer to Fact Pattern 29-2B. If Suburban Mortgage recovers less than it is owed, it can
realize the difference from
a.any property that Robin owns.
b.only exempt property that Robin owns.
c.only nonexempt property that Robin owns.
d.property that any other member of Robin’s family owns.
24) Keralyn creates a Web site to post threatening messages about celebrities. The First
Amendment protects such speech
a.all of the time.
b.none of the time.
c.only if it is noncommercial.
d.only if it is symbolic.
25) Garry drives a truck as an employee for Heavy Hauling, Inc. Garry would most
likely be considered acting outside the scope of her employment if he
a.crashed into a car at the airport while off duty.
b.hit a pedestrian in a parking lot during a “working” lunch.
c.ran over an attendant at a gas station while refueling the truck.
d.smashed into a store-front while intoxicated on-duty.
26) An employer’s failure to remit state withholding taxes that were collected from
employee wages cannot constitute a crime.
27) Lunch Trucks, Inc., contracts to deliver and serve Meals Catering Service’s products
to its clients for $5,000 per event, payable in advance. Meals Catering pays the money,
but Lunch Trucks fails to perform. Can Meals Catering rescind the contract? Can Meals
Catering also obtain restitution? What does it mean to “rescind” a contract? How is a
contract rescinded? What is restitution? How is restitution accomplished? Explain.
28) Legislative rules simply declare policy and do not affect legal rights or obligations.
29) The element of justifiable reliance requires the misrepresentation to be the sole
factor in inducing the deceived party to enter into the contract.
30) Chris promises Doreen $40,000 if she graduates from Eagle College. Doreen
enrolls in Eagle, attends full-time for four years, and graduates. When Doreen asks
Chris for $40,000, Chris says, “I don’t remember promising you $40,000. But if there
was a promise, it’s not enforceable, because we didn’t bargain for it. And even if there
was a promise that would otherwise be enforceable, I revoke it now.” Can Doreen en-
force Chris’s “promise”? Why or why not?
31) In a limited number of instances, the UCC imposes presumes that special business
standards ought to be imposed on merchants because of their relatively high degree of
commercial expertise.
32) A principal cannot be estopped from denying that an agent has authority.
33) Franz, the owner and manager of Green’s Grocery Store, contracts to buy sixty
crates of fresh peaches from Holly, the owner and manager of Ideal Farms. Suppose
that Holly dies before she can harvest and deliver the peaches. How does Holly’s death
affect their contract? If Holly does not die, but does not deliver, and Franz suffers a
loss, is there any limit to the time within which Franz can file a suit against Holly for
breach of contract? If so, how might Franz extend this time?