Wrugged Woolens, Inc., a U.S. corporation, sets up a specialized marketing
organization in Scotland by appointing a foreign agent. This is called
a. direct exporting.
b. indirect exporting.
c. a joint venture.
d. piracy.
To obtain office supplies for All-Care Medical Clinic, Britney executes a draft in favor
of Chris. A draft is
a. a conditional promise to pay money.
b. an unconditional written order to pay money.
c. a qualified promise to set aside a sum of money.
d. a restricted promise to deliver goods at a future date.
Kofi files a petition for bankruptcy. Kofi must include with the petition
a. a plan to turn over his future income to the trustee.
b. a certificate proving attendance at a credit-counseling briefing.
c. a provision of adequate means for the petition’s execution.
d a statement of preference for one creditor over another.
Ralph, a van driver for Speedy Delivery Company, causes a multi-vehicle accident on a
city street. Ralph 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 Ralph’s van.
Bulbous Cordials, Inc., a U.S. firm, enters into an agreement with Columbiana Cacao,
S.A., a South American firm, to fix the price of dark chocolate in the U.S. market. If the
agreement is a per se violation of U.S. antitrust laws, a U.S. court could exercise
jurisdiction over
a. Bulbous Cordials and Columbiana Cacao.
b. Bulbous Cordials only.
c. Columbiana Cacao only.
d. neither Bulbous Cordials nor Columbiana Cacao.
The Federal Trade Commission (FTC) orders GR8 Steaks Company to reveal certain
information. GR8 Steaks complains to a court, arguing that the order is an abuse of the
FTC’s discretion. Like other agencies, the FTC can use a subpoena to
a. compel a party to testify, but not to obtain documents.
b. obtain any information except what a party refuses to reveal.
c. harass an uncooperative business or individual.
d. reveal regulatory violations.
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 is
a. Oakley.
b. Pierre.
c. Roominate.
d. SocNet.
Tabitha defaults on her mortgage loan and her lender, Top Bank, proceeds to
foreclosure. A court supervises the foreclosure process. This is
a. forbearance.
b. judicial foreclosure.
c. prepackaged bankruptcy.
d. power of sale foreclosure.
Lily is a farmer. When bad weather destroys her crop, her obligation to deliver it under
an outstanding contract with Macro Food Corporation is
a. discharged.
b. enforced completely.
c. enforced only to the extent of finding an alternative supply.
d. enforced only to the extent of transferring to the next year’s crop.
Flexo Trucking Company transports hazardous waste. Garn is a Flexo driver, whom the
company knows drives longer hours than federal regulations permit. One night, Garn
exceeds the limit and has an accident. Spilled chemicals contaminate Hill City’s water
source, forcing the residents to move away. Flexo acted unethically because
a. Flexo showed reckless disregard for Hill City’s residents and others.
b. Garn exceeded the federal time limit.
c. harm was caused by an unfortunate accident.
d. Hill City should have better protected its water source.
Middling Credit Corporation asks Little Supply Company to agree to a security
agreement that provides for coverage of the proceeds from the sale of after-acquired
property. This is
a. a first-in-time rule.
b. a floating lien.
c. a funds guaranty.
d. in violation of secured transactions law.
The brakes on a River Valley Railroad train malfunction and it rolls towards
maintenance workers on the tracks. Everyone gets out of the way except Dick, who
wants to show off. The train hits Dick, who sues Stops-it, Inc., the brakes’ manufacturer.
Stops-it can raise the defense of
a. a component-part manufacturer.
b. assumption of risk.
c. consumer participation.
d. product misuse.
Beth and Celia are involved in an action. The best definition of an action is
a. a criminal prosecution, not a civil proceeding.
b. a failure to perform a legal obligation.
c. a judicial proceeding for the resolution of a dispute.
d. a way to raise capital so that a business can grow.
Caleb is driving a car in which Duffy is a passenger when an accident occurs. Caleb and
Duffy are emotionally rattled, but neither is physically hurt. Caleb is not liable to Dufy
on a negligence theory because
a. both parties were emotionally rattled.
b. Caleb did not apparently intend to cause an accident.
c. Duffy must have been comparatively negligent.
d. Duffy was not injured.
Fun Toyz Corporation makes skateboards, which it sells to consumers, including Holly
and Ira. Due to a defect, Holly is injured while using her new board. Ira’s board has the
same defect, but he is not injured. In a product liability suit based on strict product
liability, Fun Toyz may be liable to
a. Holly and Ira.
b. Holly only.
c. Ira only.
d. no one.
First Design Corporation, a business firm, and Glen, a consumer, make a deal over the
Internet that involves e-signatures. Under the E-SIGN Act, the e-signatures
a. are as valid as signatures on a paper document.
b. must be encrypted to be enforceable.
c. must have been inscribed on a digital tablet to be authenticated.
d. must relate to a partnering agreement.
Niche Stores, Inc., must hold a shareholders’ meeting
a. once a month.
b. once a year.
c. once every two years.
d. only when it is called by the board of directors.
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.
The Securities and Exchange Commission decides to create a new rule relating to the
dissemination of material nonpublic information through corporate Web sites. The first
step is
a. compile the rule with others in the Code of Federal Regulations.
b. conduct an on-site inspection.
c. publish a notice of the proposed rulemaking.
d. solicit public comment.
Javier owns a duplex that he leases to Yvon and Zach. Javier may sell
a. the duplex at any time.
b. the duplex, but only after the lease expires and the tenants move out.
c. the duplex, but only with the tenants’ permission.
d. the lease, but not the duplex.
Summer Breeze, Inc., contracts for the sale of fifty ceiling fans to Island Dcor store. If
Summer Breeze fails to deliver the goods, Island Dcor must commence a suit for breach
of contract within
a. four years.
b. not more than one year.
c. not less than four years.
d. thirty days.
Sarah buys a computer game developed by Al’s Gaming Company. One month later,
Sarah and several other customers of Al’s Gaming Company are sued by George’s Fun
Games, Inc. because the game from Al’s is a direct copy of a copyrighted game sold by
George’s. Sarah
a. must notify a court that deals with copyright issues.
b. must notify Al’s Gaming Company of the lawsuit in a reasonable time.
c. should ignore the lawsuit.
d. must return the game to Al’s Gaming Company.
The Nuclear Regulatory Commission is an independent regulatory agency. Its basic
functions include making rules, investigating activities that it regulates, enforcing its
rules and adjudicating disputes. All of these functions are part of
a. the judicial process.
b. the legislative process.
c. the administrative process.
d. the executive process.
Rupert is a victim of Sara’s violation of a criminal law. Criminal law is concerned with
a. the prosecution of private individuals by other private individuals.
b. the prosecution of public officials by private individuals.
c. the relief available when a person’s rights are violated.
d. wrongs committed against the public as a whole.
Rona and Stiv do business as Treasure Island Traders. In a deal with Unlimited
Potential, Inc., Rona makes a bid in competition with her firm. Rona is
a. liable for breach of the duty of care.
b. liable for breach of the duty of economic sense.
c. liable for breach of the duty of loyalty.
d. not liable.
Clara is a saleswoman in The Corner Store. When Carla makes a sale to Jenny, the sale
is
a. binding on The Corner Store.
b. binding on Carla.
c. binding on The Corner Store only if the owner of The Corner Store is present when
the sale is made.
d. not binding on anyone.
Socrates Software Corporation wants to hire Tomas, a noncitizen. To hire Tomas,
Socrates must petition
a. the U.S. Department of Labor.
b. the U.S. Department of State.
c. Immigration and Customs Enforcement.
d. the National Labor Relations Board.
At an auction for the first time, Max bids on an object, believing that the auctioneer
requested an amount less than the price actually asked. Max is
a. liable on the bid.
b. not liable on the bid because Max misunderstood the auctioneer.
c. not liable on the bid because the auctioneer misstated the price.
d. not liable on the bid because the object is probably overpriced.
Sweetwater Caf orders five gallons of trans fat-free cooking oil from Restaurant Supply,
Inc. The seller mistakenly ships the wrong oil, which the buyer keeps, despite the
nonconformity. The oil is destroyed in a kitchen fire. The loss is suffered by
a. Sweetwater and Restaurant Supply, but not Sweetwater customers.
b. Sweetwater, Restaurant Supply, and Sweetwater customers.
c. Sweetwater only.
d. Restaurant Supply only.
Lionel files a voluntary petition for bankruptcy under Chapter 7. The court will likely
deny a discharge of Lionel’s debts if he
a. conceals records of his financial condition with the intent to defraud a creditor.
b. does not have sufficient assets to pay all his secured creditors.
c. filed for bankruptcy 12 years ago.
d. has a criminal record.
An instrument is not defective simply because it is overdue.
An exculpatory clause in an employment contract is not enforceable if the clause is
against public policy.
A record is an interaction between two or more people relating to business, commercial,
or governmental activities.
Delivery of intangible personal property is never accomplished by constructive
delivery.
A fact is objective and verifiable.
In an assignment, the party receiving the rights is known as the assignor.
To be valid, a deed must contain a legally sufficient description of the land.
Gender can be a bona fide occupational qualification.
A business firm may have an insurable interest in the life of a key employee.
A remedy is the relief provided to an innocent contracting party when the other party
breaches the contract.
Many different laws may apply to a single business transaction.
A partner may dissociate from a partnership by declaring bankruptcy..
Shareholders own a corporation.
“Consideration” refers to the voluntary assent of all of the parties to a contract.
In contracts involving a sale of unborn animals to be born within twelve months,
identification takes place when the animals are born.
A maker is primarily liable on an instrument.