Bruno is a businessperson with investments in legal and illegal operations. Bruno may
be subject to penalties under RICO
a. for making an unprofitable, but legal, investment.
b. for the commission of any business fraud.
c. only in a case involving a “racket.”
d. only in a case involving organized crime.
Orange Manufacturing Corporation (OMC) orders twelve job-training and on-the-job
safety DVDs from Plum Productions, Inc., which delivers the disks to OMC’s plant.
This is most likely
a. a gift.
b. a lease of goods.
c. a sale of goods.
d. a service contract.
Mary admires Julia’s collection of scarves. Julia says, “I might sell you a few someday,
if I get tired of them.” Julia’s statement is
a. an effective offer.
b. not an effective offer because it has not been communicated to Mary.
c. not an effective offer because the Julia does not show a serious intent to be bound.
d. an acceptance.
Fact Pattern 18-1
Beth, who has a disability, is an employee of Corporate Office Company (COC). After
the installation of new doors on COC’s building, Beth finds it nearly impossible to get
in and out. For repeatedly failing to be on time, COC replaces Beth with Dian, who
does not have a disability.
Refer to Fact Pattern 18-1. To successfully defend against Beth’s claim, COC will have
to show that
a. Beth consistently failed to meet the essential requirements of her job.
b. COC cannot make changes to the doors without undue hardship.
c. Dian is qualified for Beth’s position.
d. the doors were not installed as an act of intentional discrimination.
Trudy forges Uma’s signature on a check “payable to the order of Trudy” drawn on
Uma’s account in Verity Bank. Most likely, if the bank pays the check
a. the Federal Reserve will reimburse all parties for their costs.
b. the loss will be apportioned among all of Verity’s customers.
c. Uma will be liable for the amount.
d. Verity will have to recredit Uma’s account.
In making business decisions, Glenda, personnel manager for HVAC Maintenance, Inc.,
applies her belief that all persons have fundamental rights. This is
a. a religious rule.
b. the categorical imperative.
c. the principle of rights.
d. utilitarianism.
Edna and Flavia buy a boat that they dock in a marina near Gulfport, Mississippi. On
the death of either owner, that owner’s interest in the boat passes to her heirs. This is
a. a joint tenancy.
b. community property.
c. a tenancy in common.
d. ownership in fee simple.
Wilson buys a promissory note from Oli. The note is due on December 5. December 5
is a Sunday. The note is
a. payable anytime the week of December 6.
b. payable December 6.
c. payable on December 5 only.
d. defective.
Mineral Products Corporation, which owns no land, has a right to mine the copper from
Natural Resource Company’s land. Mineral’s right is
a. eminent domain.
b. a license.
c. an easement.
d. a profit.
A provision in the California state constitution conflicts with a provision in the U.S.
Constitution. If challenged
a. neither provision will be enforced.
b. the provisions will be balanced to reach a compromise.
c. the state provision, not the U.S. Constitution, will be enforced.
d. the U.S. Constitution, not the state provision, will be enforced.
Oakley posts a defamatory remark about Pierre in “Roominate,” an online social
network maintained by SocNet, Inc., an Internet service provider. Most likely to be held
liable for the remark will be
a. Oakley.
b. Pierre.
c. Roominate.
d. SocNet.
Fact Pattern 15-1
Mary’s home is in a state that has a $30,000 homestead exemption. Mary defaults on a
$60,000 debt that she owes to Nina. Mary’s home is sold at auction for $80,000.
Refer to Fact Pattern 15-1. Other property Mary may own that may be exempt from
satisfaction of judgment debts includes
a. any property that Mary wishes to exempt.
b. investments that Mary has made in her family’s businesses.
c. recreational vehicles that Mary uses on weekends.
d. tools that Mary uses in her trade.
Jeannie runs a dude ranch called J Bar B Dude Ranch and has a Web site called
www,jbarbduderanch.com. Ben starts another dude ranch and registers a Web site called
www,jbarbduderanch.com. Ben is
a. cybersquatting.
b. cyberstalking.
c. not doing anything illegal.
d. counterfeiting.
A suit is filed against Adroit Drilling Tools Corporation, alleging that the firm
committed the offense of monopolization. To determine whether Adroit has monopoly
power requires looking at
a. the definition of monopoly in the Sherman Act.
b. Adroit’s size alone.
c. Adroit’s production methods and marketing techniques.
d. the relevant market.
Location! Realty LLC is a limited liability company. Like other LLCs, for federal
jurisdictional purposes, Location! Realty is most likely a citizen of
a. all states.
b. every state in which its members are citizens.
c. no state.
d. only the state in which it was formed.
Heavy Hauling, Inc., is a public company whose shares are traded in the public
securities markets. Under the Sarbanes-Oxley Act of 2002, to ensure that Heavy
Hauling’s financial results are accurate and timely, the firm’s senior officers must set up
and maintain
a. internal “disclosure controls and procedures.”
b. external “release and reveal timetables.”
c. personal “peruse and review liability policies.”
d. public “information and discussion forums.”
An Iowa state statute requires amusement parks to maintain equipment in specific
condition for the protection of patrons. Jack’s Fun Park fails to maintain its equipment.
Keely, a patron, is injured. Jack’s has committed
a. abuse of process.
b. battery.
c. false imprisonment.
d. negligence.
Go! is a handheld video game featuring races between imaginary creatures and
vehicles. The graphics used in the game are protected by
a. copyright law.
b. patent law.
c. trademark law.
d. trade secrets law.
Clancy sells shares in Darling Pool & Spa Company to Eton. Clancy does not deliver
the actual possession of the shares to Eton, but gives him the key to a safety-deposit box
in First State Bank in which the stock certificates are locked. Presenting the key is
a. real delivery.
b. constructive delivery.
c. delivery by agent .
d. no delivery.
Eye Appliance Company and Fresh Views, Inc., wish to combine all of their assets,
stock, and personnel into a new firm to be called Goggles Corporation. This is
a. a consolidation.
b. a merger.
c. an exchange of assets.
d. a takeover.
Bud approves on behalf of Codybut without authorizationa contract with Dik to build a
new silo. Cody does not ratify the contract. Later, Dik tries to enforce the deal. This
attempt will be
a. partly successful.
b. partly unsuccessful.
c. totally successful.
d. totally unsuccessful.
Levi’s Toy Store orders one hundred board games from Big Board Games Warehouse.
When the games are delivered, they are all missing pieces. Levi’s Toy Store rejects the
shipment. Big Board Games wants to cure. Big Board Games must
a. promptly notify Levi’s Toy Store of the intent to cure.
b. pay Levi’s Toy store a cure fee.
c. send a truck to pick up the nonconforming goods before the end of the business day.
d. create a new contract with Levi’s Toy Store.
Betty is selling her used clothing shop on Main Street. In the sale agreement, there is a
covenant not to compete that prohibits Betty from opening another used clothing shop
within 300 miles of the shop she is selling. A court will most likely conclude that this
restriction on competition is
a. reasonable.
b. unreasonable and order Betty’s successor to stop doing business.
c. unreasonable and may reform the covenant .
d. unreasonable and prohibit both parties from opening used clothing shops.
Mountain Mining Company, a U.S. firm, owns property in Bolivia. The government of
Bolivia seizes the property for an illegal purpose without paying just compensation.
This is
a. confiscation.
b. defalcation.
c. dumping.
d. expropriation.
Big Beef, Inc. raises calves to sell. Big Beef breeds its cows in April, and the cows
calve in February of the following year. In January Andrea contracts with Big Beef to
buy fifty calves. Identification takes place in
a. January, when the contract is signed.
b. April, when the calves are conceived.
c. February, when the calves are born.
d. a reasonable period of time.
Uri discovers a boat adrift, and retrieves and anchors it. The boat features a number on
its side and other evidence pointing to its owner, Vera. This is
a. an involuntary bailment.
b. a voluntary bailment.
c. an express bailment.
d. no bailment.
Mineral Resource Company contracts to provide several manufacturers with tin. When
a cartel of tin-producing countries suddenly embargoes future shipments of tin to
Mineral Resource so that it cannot fulfill its contracts, the distributor
a. can substitute some other material for the tin.
b. is excused from the performance of its contracts.
c. is liable for breach of contract.
d. must still supply the tin needs of its customers.
Lexy, a salesperson for My-T-Fine Corporation, learns that My-T-Fine will increase the
dividend it pays to shareholders. Lexy buys 10,000 shares of My-T-Fine stock. When
the price increases, Lexy sells the shares for a profit. Lexy would not be liable for
insider trading if the information about the dividend was
a. material when she sold the stock.
b. public after she bought the stock.
c. public before she bought the stock.
d. speculative when she bought the stock.
Ocean Vessels, Inc., and Pacific Harbor Company enter into a contract for a sale of a
boat. Ocean is a merchant who deals in goods of the kind sold. The goods are defective.
Under the UCC, the implied warranty of merchantability is breached
a. only if Ocean did not know about and could not have discovered the defect.
b. only if Ocean did not know about the defect.
c. only if Ocean knew about or could have discovered the defect.
d. regardless of what Ocean knew or could have discovered.
Jacqi tells Kenneth, who does not know how to perform comedy, that she will tutor him
in the subject for $500. As an offer, this is
a. effective.
b. not effective, because comedy is not a serious subject.
c. not effective, because Jacqi’s tutoring will be subjective.
d. not effective, because Kenneth has no knowledge of the subject.
North American Properties, Inc., and its officers, directors, and shareholders, buy and
sell securities. Section 16(b) of the Securities Exchange Act of 1934 covers
a. all purchases and sales of securities.
b. only purchases and sales of securities involving misappropriation.
c. only purchases and sales of securities involving short-swing profits.
d. only purchases and sales of securities involving tippers and tippees.
Based on Nan’s conduct, Odel reasonably believes that Poppy has the authority to act
on Nan’s behalf even though Poppy does not have the actual authority to do so. In this
circumstance, Poppy has
a. apparent authority.
b. express authority.
c. implied authority.
d. no authority.
Muni Investment Company signs a check payable to Enterprise Lenders, Inc., to buy a
promissory note executed by Fallow Corporation. This check
a. does not constitute sufficient consideration for HDC status.
b. does not satisfy the value requirement for HDC status.
c. satisfies the consideration requirement for HDC status.
d. satisfies the value requirement for HDC status.
Doc’s Sports Club enters into a franchise agreement with Elite Fitness Centers that
provides for termination at any time for “cause.” Doc’s fails to meet Elite’s “Friends and
Family” membership sales quota. Is this “cause” for termination? Explain.
A bank that encodes information on an item after its issue warrants to any subsequent
bank that the information is correct.
A party is entitled to cancel a contract based on the other party’s material breach.
A state court can exercise jurisdiction over an out-of-state defendant who does business
in the state over the Internet.
A merger and a consolidation are not two legally distinct proceedings.
A contract for the sale of minerals is considered to be a contract for the sale of goods if
the severance is to be made by the seller.
A sharing of profits and losses is the only requirement of a partnership.
Only the federal government sets safety standards governing workplaces.
Under the principle of comity, one nation may defer and give effect to the laws and
judicial decrees of another country.
Any contract entered into with an unlicensed party is unenforceable.
Picking pockets is larceny.
The Environmental Protection Agency periodically updates the air pollution standards.
Government authorities cannot enforce national law.
In some states, misrepresentation of age by a minor is enough to prohibit disaffirmance.
If a customer does not have sufficient funds to pay a check available in his or her
checking account and the bank dishonors the check, the bank is liable to the customer.
Under the Americans with Disabilities Act of 1990, an employer must hire unqualified
applicants who have disabilities.
A corporation has an implied power to extend credit to those with whom it has a legal
or contractual relationship.
A credit-card company is not required to provide advance notice to consumers before
changing credit-card terms.
There are additional disclosure requirements for a loan that carries a high rate of
interest or entails high fees for the borrower.
Before filing for bankruptcy, a consumer-debtor must receive credit counseling.