1) Gerald files a petition in bankruptcy. An automatic stay will apply to actions by
creditors seeking to collect Gerald’s debts comprised of
a.alimony.
b.child-support.
c.none of the choices.
d.car payments.
2) Megan reaches into Ned’s pocket and takes his wallet-without his consent and
without his immediate awareness. Unlike robbery, picking pockets does not involve
a.breaking and entering.
b.force or fear.
c.large amounts of cash.
d.weapons.
3) A statute enacted by the Arizona state legislature to regulate trucking affects
interstate commerce. In evaluating this statute, the courts will balance the burden that it
imposes on interstate commerce against
a.the courts€ authority to determine that a law is unconstitutional.
b.the purpose of interstate commerce.
c.the state€s interest in regulating the matter.
d.the statute€s impact on noneconomic activity.
4) Physicians Clinic orders by phone seven boxes of single-use latex gloves from
Quality Medical Supplies, Inc. After three boxes are delivered and accepted, Physicians
Clinic repudiates the contract. Quality Medical can enforce the contract to
a.any extent because the order was placed orally.
b.no extent because the order was placed orally.
c.the extent of the three accepted boxes.
d.the extent of the four undelivered boxes.
5) UniVision Corporation, a U.S. company, sets up a firm in Vietnam. UniVision
remains in the United States and retains ownership of the Vietnamese branch, as well as
authority and control over all phases of the operation. This is
a.a franchise.
b.a wholly owned subsidiary.
c.a joint venture.
d.direct exporting.
6) Mallory promises to buy illegal digital copies of movies from Napoleon, who
promises to deliver on October 31. These promises are most likely
a.enforceable.
b.valid.
c.void.
d.voidable.
7) Digital Analytics, Inc., considers the impact of its corporate decisions on various
groups and often acts in the interest of a group that has a greater stake in a decision than
Digital’s shareholders. This approach is most likely to attract potential employees who
are
a.investors focused on short-term profits.
b.older professionals.
c.information technology specialists.
d.recent college graduates.
8) Tully files a petition for bankruptcy. Tully must include with the petition
a.proof of each creditor’s claim.
b.a list of creditors and the amount of the debt owed to each.
c.all of his debit and credit cards to be disposed of by the court.
dan affidavit testifying to his having read the Bankruptcy Code.
9) Lana agrees to work as Michelle’s personal assistant for one year but dies in the ninth
month of the contract. Lana’s estate
a.is discharged from any contractual liability.
b.must find a competent assistant to fulfill the contract.
c.must pay damages.
d.must refund any money paid to Lana on the contract.
10) Bonds & Stocks Corporation, and its officers, directors, and shareholders, buy and
sell securities. SEC Rule 10b-5 applies to the purchase or sale of
a.a security by a financial corporation only.
b.a security involving a corporate insider only.
c.a security involving short-swing profits only.
d.any security.
11) Fact Pattern 27-1B
Charlton is the maker of a $200,000 promissory note payable to Development & Sales
Corporation. Development & Sales indorses the note to Equity Lenders, which in turn
indorses it to First Select Investors, which then indorses it to Global Bank, the present
holder.
Refer to Fact Pattern 27-1B. Global Bank properly presents the note to Charlton for
payment, but he dishonors it. With timely notice to the proper parties, Global Bank may
collect payment on the note from
a.Development & Sales, Equity Lenders, or First Select.
b.Development & Sales or Equity Lenders only.
c.First Select only.
d.no one.
12) Kenneth has a periodic tenancy that requires him to pay rent weekly. Kenneth
wishes to terminate his tenancy. Under the common law, he must give his landlord
notice of at least
a.one week.
b.two weeks.
c.thirty days.
d.sixty days.
13) App Developers, Inc. (ADI), enters into a contract with Carmen, the chief executive
officer of SalesCorp, to create an app for the firm. To fulfill the contract, ADI hires Max
and ten other student interns. With respect to the contract, Max is
a.an intended beneficiary.
b.an incidental beneficiary.
c.a delegatee.
d.an assignee.
14) Edward, an attorney, allows a statute of limitations to lapse on a claim by
Fabrication Company, a client. Edward
a.can be held liable for malpractice.
b.has violated an ethical standard but cannot be held liable.
c.is subject to criminal penalties under the statute of limitations.
d.will be automatically disbarred.
15) Jenny Lee is an appliance salesperson. To make a sale, she asserts that a certain
model of a Kitchen Helper refrigerator is the “best one ever made.” This is
a.fraud if the statement is not true.
b.fraud if Jenny Lee believes that this statement is not true.
c.fraud if Jenny Lee is stating her opinion, not the facts.
d.not fraud.
16) Nancy joins with other creditors to force Odette, a debtor, into bankruptcy. One of
the goals of bankruptcy law with respect to creditors is to
a.provide that creditors will continue to lend to insolvent debtors.
b.protect creditor assets from diminution in value.
c.ensure equitable treatment of creditors who are competing for a debtor’s assets.
d.make all debtor property available for creditors.
17) Best RecordingCorporation and CD ProductionCompany wish to combine all
assets, stock, and personnel into a new firm to be called DigiSongs Inc. This is
a.a consolidation.
b.a merger.
c.a share exchange.
d.a takeover.
18) Fact Pattern 26-1B
Destiny obtains a check payable to her order from Eugenia. Destiny signs the back and
adds the notation “without recourse.”
Refer to Fact Pattern 26-1B. Destiny’s signature and the notation “without recourse”
constitute
a.a blank indorsement.
b.a qualified indorsement.
c.a special indorsement.
d.a restrictive indorsement.
19) Watercourse Pipe Company includes in its contracts a provision that reads, in large
red letters, “There are no warranties that extend beyond the description on the face
hereof.” This disclaimer negates
a.the implied warranty of fitness for a particular purpose.
b.the implied warranty of merchantability.
c.the implied warranty of title.
d.none of the choices.
20) A contract entered into by an intoxicated person is never valid.
21) Technology has limited the potential for copyright infringement via the Internet.
22) The full faith and credit clause prevents a state from imposing unreasonable
burdens on citizens of another, particularly with regard to means of doing business.
23) Under the UCC, the meaning of any agreement must be interpreted in light of
commercial practices.
24) Compensatory damages compensate a party injured by a breach of contract by
punishing the party that breached the contract.
25) A restrictive indorsement does not destroy negotiability.
26) Presentment warranties cannot be disclaimed with respect to checks.
27) A blank indorsement can consist of a mere signature.
28) Merchants are not required to warrant that the goods they sell are fit for their
ordinary purpose.