Larceny relies on fear and force.
Marvin is a very good businessman. He starts Marvin’s Bike Company in the small
town of Wheatland, South Dakota. There is one other bike store in Wheatland. Through
good business management, Marvin’s Bike Company obtains a great deal of market
power in Wheatland. This acquisition of monopoly power is
a. a per se violation of Section 1 of the Sherman Act.
b. an illegal restraint on trade.
c. not an antitrust violation.
d. a per se violation of Section 2 of the Sherman Act.
Events Promotion Corporation licenses trademarks to Fandom Souvenirs, Inc., to use in
selling caps, sweatshirts, and similar goods. This is
a. a franchise.
b. an entrepreneur.
c. a principal-agent relationship.
d. a sole proprietorship.
Etta is a director of Trendy Stuff Corporation. Without informing Trendy, Etta goes into
business with GR8 Things, Inc., in competition with Trendy. Etta is liable for breach of
a. no duty or rule
b. the business judgment rule.
c. the duty of care.
d. the duty of loyalty.
Efron transfers an instrument to First Citizens Bank. This is not a negotiation unless
a. the parties bargained over the amount paid for the instrument.
b. the transfer is an assignment.
c. the instrument is a negotiable instrument.
d. the transfer includes rights under a contract.
Fred has six nieces, ages five to sixteen. He writes an order instrument for $50 that
states, “Pay to the order of my niece.” The order instrument is
a. negotiable.
b. nonnegotiable, because the amount of money is less than $500.
c. nonnegotiable, because it is illegal to write an order instrument
payable to a relative.
d. nonnegotiable, because there is no specific person identified.
Rocco gives Sequoia a smartphone as a gift. Sequoia develops a new game app for the
phone. She obtains intellectual property protection, and forms Titan Games, LLC, to
make and market the game. Sequoia’s acquisition of the game is by
a. gift.
b. accession.
c. confusion.
d. production.
Medical Accounts Collection enters into a contract to employ Natalie as a billing and
credit manager for two years. During the first year, Natalie is often absent without
explanation and when present fails to adequately do her job.
Natalie’s performance is most likely
a. a material breach.
b. a minor breach.
c. a reasonable breach.
d. no breach.
Drill Makers, Inc., and Edge Mine & Mill Supply Stores enter into a contract for a sale
of mining drill bits. The contract indicates that the price includes transportation costs to
a specific destination by including the term
a. C.I.F.
b. delivery ex-ship.
c. F.A.S.
d. F.O.B.
A court deems an agreement between Silver Saddles Saddlery and Time Tested Tack,
Inc. to be a per se violation of the Sherman Act. The court is
a. prevented from determining whether the agreement’s benefits outweigh its
anticompetitive effects.
b. required to unanimously decide whether the agreement’s benefits outweigh its
anticompetitive effects.
c. required to apply the rule of reason.
d. required to issue a formal complaint against Silver Saddles and Time Tested Tack.
Upton borrows $150,000 from Valley Credit Union to buy a home, which secures the
loan. Three years into the term, Upton stops making payments on it. Valley Credit
repossesses and auctions off the property to Wesley. The sale proceeds are not enough
to cover the unpaid amount of the loan. In most states, Valley Credit can ask a court for
a. a deficiency judgment.
b. a reverse mortgage.
c. a short sale.
d. nothing.
The Regulatory Flexibility Act has helped reduce record-keeping burdens for
Hometown Gas Company and other small business firms in the area of
a. accounting practices.
b. asset acquisition.
c. hazardous waste management.
d. tax reporting.
Ground-Up Construction Corporation (CCC) has a right of action against Heavyquip,
Inc. Ground-Up Construction merges with Investors Development, Inc., with Investors
absorbing Ground-Up. After the merger, Ground-Up’s right of action against Heavyquip
can be exercised by
a. Ground-Up.
b. Investors.
c. Heavyquip.
d. no one.
Claudia pledges to donate $10,000 to Disaster Relief & Recovery Inc. (DR&R). On the
basis of the pledge, DR&R orders additional supplies. If Claudia does not fulfill the
pledge, a court may enforce it
a. under the preexisting duty rule.
b. on the basis of unforeseen difficulties.
c. as a requirement contract.
d. under the doctrine of promissory estoppel.
Lyle and Miranda agree that Lyle will fix the refrigeration unit in Miranda’s Buns n”
Burgers in exchange for her payment of a debt that Lyle owes to New Credit
Corporation. New Credit is
a. a delegate.
b. an intended beneficiary.
c. an incidental beneficiary.
d. an assignor.
Eliza is a state court judge. Flora appears in a case in Eliza’s court, claiming that Glover
breached a contract. Which of the following actions may Eliza take?
a. Award damages or issue a decree of specific performance
b. Imprison Glover, but not Flora
c. Imprison Flora, but not Glover
d. Order the parties to pay Eliza to render a favorable ruling
Danko sells new and used sports equipment to persons who come into his store, Eyes
on the Prize. One afternoon, Danko sells a used display shelf to Felipe. At a garage sale
at his home, Danko sells a used flat-screen TV to Faye. Under the UCC, Danko is a
merchant of
a. sports equipment only.
b. sports equipment and display shelves only.
c. sports equipment, display shelves, and flat-screen TVs.
d. anything that he chooses to sell.
Bilt-Well Construction Corporation makes a side payment to a government official in
Nigeria to obtain a contract. In the United States, this is
a. illegal and unethical.
b. illegal but not unethical.
c. unethical but not illegal.
d. legal and ethical.
Dita takes out a student loan from Everloan Bank. When she fails to make the
scheduled payments for six months, Everloan advises her of further action that it will
take. This violates
a. no federal law.
b. the Fair and Accurate Credit Transactions Act.
c. the Fair Debt Collection Practices Act.
d. the Truth-in-Lending Act.
Lizzie, a clerk at a Movies Unlimited store, takes a DVD player from the store without
permission. Lizzie is liable for
a. appropriation.
b. benefiting an employee.
c. conversion.
d. wrongful interference with a business relationship.
Will and Jay form Northwest Air Express, a general partnership. The essential elements
of this partnership do not include
a. a sharing of profits and losses.
b. a joint ownership of the business.
c. an equal right to management in the business.
d. goodwill.
Richard suspects his supervisor of unethical accounting practices. However, he does not
want to lose his job if he reports the supervisor and the supervisor finds out who
reported him. An important feature of online reporting systems like EthicsPoint is
a. the employee reporting the unethical behavior can do so anonymously.
b. the employee reporting the unethical behavior is financially compensated if he loses
his job as a result of the report.
c. the employee reporting the unethical behavior must give his full name when making
the report.
d. the employee reporting the unethical behavior must have another employee
supporting him.
The U.S. Social Security Administration is a federal agency. The Iowa Department of
Social Services is a parallel state agency. If these agencies’ regulations conflict
a. the federal agency’s regulations take precedence.
b. the state agency’s regulations take precedence.
c. the two agencies’ regulations take equal precedence.
d. the two agencies’ regulations cancel each other.
Dhani, an accountant for Eureka, Inc., learns of undisclosed company plans to market a
new laptop. Dhani buys 1,000 shares of Eureka stock. He reveals the company plans to
Fay, who buys 500 shares. Fay tells Geoff, who tells Hu. Both Geoff and Hu buy 100
shares. They know that Fay got her information from Dhani. When Eureka publicly
announces its new laptop, Dhani, Fay, Geoff, and Hu sell their stock for a profit.
Under the Securities Exchange Act of 1934, Fay is most likely
a. liable for insider trading.
b. not liable because Fay did not prevent others from profiting.
c. not liable because Fay did not solicit information from Dhani.
d. not liable because Fay does not work for Eureka.
Scot and Tiffany enter into an implied contract. The parties’ conduct
a. defines the contract’s terms.
b. finds the contract’s facts.
c. terminates any unintended consequences.
d. undercuts any terms based on the facts.
Dhani signs a check “pay to the order of Etan” drawn on Dhani’s account in First State
Bank and dates the check “May 1.” Etan presents the check to the bank for payment on
December 15. This is
a. a cashier’s check.
b. an overdraft.
c. a certified check.
d. a stale check.
Simone is a manager of Rolling Hills Resort LLC, a limited liability company. Rolling
Hills is formed in a state that does not explicitly create fiduciary duties for LLC
managers but does require the exercise of good business judgment. Unless a court rules
otherwise, Simone owes fiduciary duties to
a. Rolling Hills’s members.
b. Rolling Hills’s suppliers.
c. Rolling Hills’s customers.
d. none of the choices.
Roald writes a check for $700 to Savannah. Savannah indorses the check in blank and
transfers it to Twitchell, who alters the check to read $7,000 and presents it to Union
Bank, the drawee, for payment. The bank cashes it. Roald discovers the alteration and
files a suit against the bank. Roald can recover
a. $7,000.
b. $6,300.
c. $700.
d. 0.
Quality Metals Company and Superior Fabrication, Inc., enter into a contract under
which Quality Metals agrees to deliver a certain quantity of sheet metal to Superior
Fabrication each month. The contract does not include a price term. In a suit between
the parties over the price, a court will
a. determine a reasonable price.
b. impose the lowest market price.
c. impose the highest market price.
d. return the parties to the positions they held before the contract.
Dee, an accountant, does not work for Emergent Company, but wrongfully obtains
inside information concerning Emergent. Based on the information, Dee buys and sells
Emergent stock for personal gain. The Securities and Exchange Commission prosecutes
Dee, arguing that she is liable because she stole information rightfully belonging to
another. This argument is
a. the blue-sky theory.
b. the misappropriation theory.
c. the red-herring theory.
d. the tipper/tippee theory.
Hilton enters into a contract to erect a fence around Irene’s cattle pasture. When the
fence is built, Hilton’s performance will be
a. absolute.
b. complete.
c. conditional.
d. substantial.
SurgeStop Company makes electrical cords and other connectors for electronic devices.
Rollo files a product liability suit against SurgeStop, alleging a warning defect. In
deciding whether to hold SurgeStop liable, the court may consider
a. consumers’ general lack of desire to read the product’s warnings.
b. the plaintiff’s specific lack of desire to read the product warnings.
c. the obvious risks of other products.
d. the obvious risks of this product.
Under the UCC, an agreement modifying a contract needs no consideration to be
binding.
A warranty against infringement is a promise by the seller that the product is free from
any patent, trademark, or copyright claims of a third person.
Shareholders do not need to approve fundamental changes affecting the corporation
before the changes can be effected.
J.T., a minor, is a motocross competitor. At Monster Mountain MX Park, he signs a
waiver of liability to “hold harmless the park for any loss due to negligence.” Riding
around the Monster Mountain track, J.T. rides over a blind jump, becomes airborne, and
crashes into a tractor that he does not see until he is in the air. To recover for his
consequent injuries, J.T. files a suit against Monster Mountain, alleging negligence for
its failure to remove the tractor from the track. Does the liability waiver bar this claim?
Explain.
Constructive delivery occurs when property is physically transferred.
Any breach excuses the nonbreaching party’s duty to perform.
The office in which a financing statement should be filed depends on the creditor’s
location.
Healthy Harvest Company runs a candy and fruit processing and packaging plant. Most
of Healthy Harvest’s business is done during holiday seasons, especially between
Halloween and New Year’s Day, and in the spring. The company hires a large temporary
workforce during its busiest times. Occasionally, a position opens for an individual with
highly specialized skills, particularly to operate and maintain the company’s inventory
and sales control systems. Can Healthy Harvest hire noncitizens for its temporary,
seasonal work? Can the company hire a noncitizen with special skills for certain jobs?
If so, what procedures must the employer follow in both situations to do this hiring? If
not, how can Healthy Harvest be assured that it is hiring only citizens?
The terms of a fully integrated contract can be contradicted by evidence of any prior
agreements.
A seller with voidable title can transfer good title to a good faith purchaser for value.
Inadequate consideration always indicates undue influence.
A hacker is someone who uses one computer to break into another.
Interrogatories are written questions for which written answers are prepared and signed
under oath.
College Copy Shop (CCS) compiles, copies, and sells reading materials to students. The
compilations are prepared on the instructions of professors, who indicate which parts of
which publications should be included for their students. The copied materials include
texts published by Deep Topics, Inc. CCS does not obtain the permission of Deep
Topics, or any of the other original publishers of the copied materials, and does not pay
royalties on the sales of the compilations. Deep Topics and others file a suit against
CCS, alleging infringement of their intellectual property rights. Which type of
intellectual property is involved in this situation? What is CCS’s likely defense? How is
a court most likely to rule? Explain.
Business ethics is not more complicated than personal ethics.