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Delia refuses to pay Ewing $500 in cash on their contract to repair certain theater sets,
which Ewing still possesses. Ewings lien on the sets will terminate
a. if Ewing continues to maintain possession.
b. if Ewing does not file a written notice of lien within thirty days.
c. if Ewing voluntarily surrenders possession.
d. within thirty days.
Jim, an accountant, contracts to perform services for Kasey. Jim acts in good faith and
conforms with generally accepted accounting principles, but makes a mistake in
judgment. Jim is most likely
a. liable if Jim failed to discover a defalcation.
b. liable if Jim failed to discover a fraud.
c. liable if Jim failed to discover an impropriety.
d. not liable.
Repair Prepare Parts Company charges different buyers different prices for identical
goods. This is
a. market power.
b. predatory pricing.
c. price discrimination.
d. price-fixing.
Ilsa works as a clerk for Java Café at minimum wage. The minimum-wage rate is
revised
a. annually, according to the rate of inflation.
b. every seven years, according to changes in the cost of living.
c. periodically by Congress.
d. whenever the president issues an executive order to revise the rate.
Congress enacts a statute to outlaw a specific type of anticompetitive business
agreement. Like other laws that regulate economic competition, this law is referred to
as
a. a federal trade commission act.
b. an antitrust law.
c. an interstate commerce act.
d. a suppressive restraint on trade.
Homers Remodeling, LLC, is a limited liability company. Among the members, a
dispute arises that their operating agreement does not cover. No statute applies. The
dispute is governed by the principles of
a. corporate law.
b. partnership law.
c. sole proprietorship law.
d. joint venture law.
Jay seeks information about Kim and other well-known businesspersons under the
Freedom of Information Act. To obtain the information, Jay must
a. agree not to reveal any trade secrets.
b. describe the information.
c. get a court order.
d. have Kims and the others permission.
Double D Ranch and Esau enter into a contract on August 1 for the sale of 200 cattle.
Esau cancels the contract ten days later. Double D is unable to sell the cattle to another
buyer. Double D can
a. force Esau to accept the cattle and pay for them.
b. recover the contract price from Esau but must hold the cattle for him.
c. recover the contract price from Esau and keep the cattle.
d. recover the contract price from Esau but must destroy the cattle.
Fact Pattern 14-B1 Gert contracts to sell two tracts of land to Hank. Both parties believe
that the two tracts are adjacent, but in fact they are not. Gert is still willing to sell the
land, but under these circumstances the deal would adversely affect Hank.
Refer to Fact Pattern 14-1. The parties belief about the adjacency of the property is
a. a bilateral mistake.
b. a fraudulent misrepresentation.
c. a unilateral mistake.
d. unconscionable.
Reconstruction Building Services receives a discharge in bankruptcy, even though some
creditors hold judgments on overdue debts against it and others filed actions to collect
on overdue debts before the bankruptcy. Reconstructions discharge will
a. absolve the liability of any co-debtors.
b. permit the debtor to enter into reaffirmation agreements.
c. allow the debtor to file a petition for a reorganization.
d. prohibit actions and void judgments regarding overdue debts.
Cathy uses, on her new recording Drive By, the melody of a song written by Ed,
without Eds permission. This is
a. copyright infringement.
b. patent infringement.
c. trademark infringement.
d. none of the choices.
Fact Pattern 25-1B
Belle obtains a check payable to her order from Charmayne. Belle signs the back and
adds the notation "without recourse.
Refer to Fact Pattern 25-1B. After Belle signs the back and adds the notation "without
recourse, further negotiation of the check
a. requires Belles re-indorsement and delivery.
b. requires delivery alone.
c. requires Charmaynes indorsement and delivery.
d. is not possible.
Carl sells Direct Marketing Enterprises, a sole proprietorship, to Eve. This is a transfer
of
a. a license.
b. a trade name.
c. the formula to make a product.
d. the ownership of the business.
Consuelo and Gabriela enter into a contract for a sale of saxophones and other brass
instruments. Consuelo delivers, but Gabriela does not pay. Consuelo can normally
recover as damages
a. any profit lost minus any loss avoided.
b. whatever amount the seller wishes to claim.
c. the purchase price plus incidental damages.
d. the market price at the place at which the seller delivered the goods.
Nina is a Jew and Odell is a college student. Based on this information, members of
protected classes include
a. neither Nina nor Odell.
b. Nina and Odell.
c. Nina only.
d. Odell only.
Players Video Game Centers, Inc., wants to issue stock of $1 million in a single offer-
ing. Players must provide all investors with material information about itself, its
business, and its securities if
a. all investors are accredited.
b. under any circumstances.
c. any investors are accredited.
d. any investors are unaccredited.
Elin, an agent for First Credit Corporation (FC), enters into an unauthorized contract
with Great Expectations, Inc. (GE), purportedly on FCs behalf. This contract will be
enforceable if it is ratified by
a. any third party.
b. Elin.
c. FC.
d. GE.
Sylvia is an officer of Triad Hotel Company. As an officer, with respect to the
corporation, Sylvia is
a. a fiduciary.
b. a forum.
c. a proxy.
d. a quorum.
Reel CGI Animé Company issues a promissory note as a demand instrument with a due
date of October 5. Syncopated Loan Company accepts the note. Syncopated has notice
that the note is overdue if the firm takes the note
a. after October 5.
b. before October 5.
c. on October 5.
d. at any time.
Gourmet Foods, Inc., requires all distributors of its products to sell them at a specified
minimum price. This is a violation of antitrust law
a. if the anticompetitive effects outweigh the competitive benefits.
b. if the competitive benefits outweigh the anticompetitive effects.
c. under any circumstances.
d. under no circumstances.
Picabo drives a truck as an employee for Quik Delivery, Inc. Picabo would most likely
be considered acting outside the scope of her employment if she
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.
Pier shops in a Rowdy Ranch & Farm Store store. Enticed by a display, Pier takes an
item to examine it and, when she is done, places it on the floor. Tanner, a consumer
enticed by the same display, does not see the item on the floor, trips over it, falls, and
suffers an injury. With respect to the danger, Rowdy had
a. a duty to advise its patrons that they assume all such risks.
b. a duty to discover and remove the hazard.
c. a duty to carry insurance to cover such risks.
d. no duty.
Frawsty Corporation distributes beverages in the greater Northwest. Frawstys board of
directors can delegate some of its functions to
a. Frawstys incorporators.
b. Frawstys officers.
c. Frawstys shareholders.
d. no one.
Sullivan signs a check "pay to the order of Tilly drawn on Sullivans account in
Universal Bank. Velma forges Tillys indorsement, Washington Bank cashes the check.
Velma disappears. Universal pays Washington and debits Sullivans account. Most
likely, the ultimate loss will fall on
a. Sullivan.
b. Tilly.
c. Universal Bank.
d. Washington Bank.
Fiona owns one share of stock in GR8 Boards Corporation, as evidenced by a stock
certificate. Fiona loses the certificate. Her ownership of the stock is
a. forfeited immediately.
b. forfeited within ten days of a third partys claim to ownership.
c. forfeited within thirty days if she cannot find the certificate.
d. not affected.
Clerical Workers Union represents the employees of Miracle Medical Research
Company. The management of the firm refuses to bargain with the union over the hiring
of unnecessary workers. This most likely violates
a. federal labor law.
b. state right-to-work laws.
c. federal wage-and-hour laws.
d. no federal or state law.
Sustainabilityeconomic development that meets the needs of the present without
compromising the ability of future generations to meet their needshas been legislatively
committed to by
a. no state statute or federal law.
b. at least one stateOregon.
c. federal statutes only.
d. international law only.
Gino files a suit against Free-Flo Plumbing Corporation under the doctrine of prom-
issory estoppel. Gino must show that
a. he justifiably refused to fulfill a promise to Free-Flo.
b. he justifiably relied on Free-Flos promise to his detriment.
c. Free-Flo justifiably refused to fulfill a promise to him.
d. Free-Flo justifiably relied on his promise to its detriment.
Fact Pattern 35-2B
Ida replaces Hector in his job at Grocers Market Corporation (GMC).
Refer to Fact Pattern 35-2B. To succeed with an age-discrimination claim against GMC,
Hector will have to show that
a. Ida is not qualified for Hectors job.
b. Hector is qualified for his job.
c. GMCs qualifications for Hectors job are too high.
d. no one could do Hectors job as well as he could.
Recreation Supplies, Inc. (RSI), and Sam, the owner of a Tourist Time shop, orally
agree to a sale of beach balls and seashells for $1,000. Sam gives RSI a check for $400
as a partial payment. This contract is
a. enforceable to the extent of $400.
b. fully enforceable because it is for specially made goods.
c. fully enforceable because it is oral.
d. not enforceable.
Squeaky Clean Corporation wants to make an offering of securities to the public. This
offering is not exempt from registration under the Securities Act of 1933. Before
Squeaky sells its securities, it must provide investors with
a. a forward-looking financial forecast.
b. an investment contract.
c. a prospectus.
d. samples of is products.
Rye signs a $1,000 note payable, at 6 percent interest, on May 1 to Suburban Bank and
writes on its face that it is "nonnegotiable. This note is
a. negotiable.
b. nonnegotiable, because it is dated.
c. nonnegotiable, because it is payable with interest.
d. nonnegotiable, because it includes the notation "nonnegotiable.
Far Afield Inc. announces its intent to acquire Eversmall Company. Despite this
announcement, Eversmalls directors do not prepare for a buyoutthey do not determine a
price or seek out other buyers, and negotiate with Far Afield for only a short time.
Former Eversmall shareholders allege that the directors breached their fiduciary duties.
The directors best defense is
a. the right to indemnification
b. the business judgment rule.
c. the shareholders preemptive rights.
d. the limited liability of the corporation.
Beachside City enacts an ordinance that bans the distribution of all printed materials on
city streets. Carl opposes the citys latest "revenue-enhancing measure and wants to
protest by distributing handbills. In his suit against the city, a court would likely hold
the printed-materials ban to be
a. constitutional under the First Amendment.
b. not subject to the U.S. Constitution.
c. unconstitutional under the commerce clause.
d. unconstitutional under the First Amendment.
Fact Pattern 27-1B
Echo takes her car to Fix-It, Inc., which repairs the car and bills Echo for $500. Echo
writes out a check drawn on Capital Bank, but later, believing that Fix-It did not repair
the car properly, issues a stop-payment order.
Refer to Fact Pattern 27-1B. Capital Bank
a. is liable to Fix-It for the amount of the check.
b. must stop payment if Capital has a reasonable time to act.
c. need not stop payment unless Echo had a valid reason to act.
d. need not follow Echos order unless the check was certified.
A person who accepts an instrument that has been completed without knowing that it
was incomplete when issued can take it as an HDC.
A quasi contract is a true contract.
The Foreign Sovereign Immunities Act broadly defines commercial activity.
Resource Mining Companys (RMC) complex spews smoke and odors. The site features
its own rail system, and trucks enter and exit the complex night and day. Sam and other
residents of an adjacent neighborhood can feel the vibrations of the trains and trucks,
and suffer other effects from RMCs operations. Sam and others file a suit against RMC.
Why might the court rule in favor of RMC?
To protect trade secrets, a company may include a covenant not to compete in an
employment contract.
Credit can be denied solely on the basis of marital status.
Land includes all of the waters on or under its surface.
On a partners dissociation, his or her duty of loyalty to the partnership ends.
A counterclaim is raised by a plaintiff against a defendants answer.
Under their police powers, states can regulate private activities to protect or promote
the public order, health, safety, morals, and general welfare.
The doctrine of quasi contract can be used only when there is an actual contract that
covers the matter in controversy.
An independent contractor may not act in the capacity of an agent.
Warranty liability on a negotiable instrument does not require a signature and extends to
both signers and nonsigners.
Constructive eviction occurs when a tenant moves off the premises in retaliation against
the landlord.
Any employee who works more than eight hours per day must be paid overtime .
A default judgment is entered against a party who fails to respond to the allegations in a
complaint.
In most instances, an agency is not required to obtain a search warrant before a physical
search for evidence is conducted.
Anything that an agent obtains by virtue of the agency relationship belongs to the
principal.
The members of a joint venture have more implied and apparent authority than the
partners in a partnership.
