Eden Property Sales Corporation and Dion agree to resolve their dispute in arbitration.
The arbitrators decision is called
a. a conclusion of law.
b. a finding of fact.
c. an award.
d. a verdict.
A Fact Pattern 17-A2
Evelyn, who owns and operates Eves Farm & Garden Company, agrees to sell Hill &
Dale Produce, Inc., fifty bushels of apples.
Evelyn dies before the apples are delivered to Hill & Dale. Evelyns contract with Hill &
Dale is
a. breached.
b. discharged.
c. not affected.
d. suspended.
Quickly Motor Company makes the Rock, a new model of sport utility vehicle, and
sells it at the markets lowest price. The Rock does not, however, satisfy federal
emission standards and Quickly fails to maintain relevant, required records. The
Environmental Protection Agency may assess
a. civil penalties, additional fines, and criminal penalties.
b. civil penalties and additional fines only.
c. civil penalties only.
d. criminal penalties, including fines and imprisonment, only.
Jody owns KuppaJava Kiosks, a sole proprietorship. Jodys liability is
a. limited by state statute and varies from state to state.
b. limited to the extent of capital expenditures.
c. limited to the extent of his or her original investment.
d. unlimited.
Final Foto, Inc., makes photo and video editing software, which includes a shrink-wrap
agreement. Gert buys a package of the software. With respect to the contract for the
softwares purchase, the shrink-wrap agreement may not be enforced if
a. Gert does not read it.
b. Gert learns of it after contracting.
c. Gert learns of it before contracting.
d. the quality of the software is poor.
Fact Pattern 17-B2
Bell Medical Education Service enters into a contract to employ Chris as an instructor
for two years to begin May 1. One month before the term begins, Bell is underbid by a
competitor and loses a major client, Delta Hospital Center. Bell now refuses to hire
Chris.
Bells repudiation is most likely
a. a material breach.
b. a minor breach.
c. Chriss breach.
d. no breach.
Hawaii enacts a state law that violates the U.S. Constitution. This law can be enforced
by
a. no one.
b. the federal government only.
c. the state of Hawaii only.
d. the United States Supreme Court only.
Helio Company can process hydrogen into an inexpensive fuel for internal combustion
engines. As an innovator in its market, Helio currently has the power to affect the price
of its product. This is
a. market power.
b. predatory pricing.
c. price discrimination.
d. price-fixing.
Ron, the manager of Sav-Mart Discount Store, detains Tina, whom Ron suspects of
shoplifting. Tina sues Ron, alleging that the detention was false imprisonment. Ron is
liable if Tina
a. did not actually shoplift.
b. had not shoplifted in the past.
c. had probable cause to leave the premises.
d. was detained for an unreasonably long time.
Barrie is induced to leave a sales position with Car Town Auto Dealership due to a false
promise by Delacroix, a sales supervisor at Rev Up Motors, as to the amount of
compensation Barrie would earn at Rev Up. Barrie is most likely a victim of
a. fraud.
b. mistake.
c. nothing.
d. puffery.
Peg obtains from QT Insurance Company a policy that provides that after it has been in
force for a certain time, QT cannot question statements made in the application. This is
a. an antilapse clause.
b. an arbitration clause.
c. an appraisal clause.
d. an incontestability clause.
Oceanic Vessels, Inc., and Pacific Harbor Company enter into a contract for a sale of a
barge. Oceanic 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 Oceanic did not know about and could not have discovered the defect.
b. only if Oceanic did not know about the defect.
c. only if Oceanic knew about or could have discovered the defect.
d. regardless of what Oceanic knew or could have discovered.
Erte applies for, and obtains, casualty insurance coverage from Friendly Insurance
Company for his business, Golf Club, Inc. The effective date of the policy is the date
a. Erte submits the application.
b. Friendly Insurance accepts the first premium.
c. Friendly Insurance issues the policy.
d. the application specifies as the effective date.
U.S. Oil Company and Vehicle Fuel Corporation enter into a contract for the sale of
refined oil. Either partys nonperformance may be excused, because of unforeseen
circumstances, under the doctrine of commercial
a. good faith.
b. impracticability.
c. square dealing.
d. unconscionability.
Smitty, driving while intoxicated, causes a car accident that results in the death of
Tiffany. Smitty is arrested and charged with a felony. A felony is a crime punishable by
death or imprisonment for
a. any period of time.
b. more than one year.
c. more than six months.
d. more than ten days.
Fact Pattern 26-1A
Seymour writes a check on his account at Platinum Bank to Teri to pay a debt. Teri
negotiates the check by indorsement to Rosanna, who presents it for payment to Onyx
Bank.
Refer to Fact Pattern 26-1A. If Onyx Bank dishonors the check, Rosanna can obtain
payment from Teri
a. if Rosanna timely notifies Teri.
b. only if Seymour refuses to pay the check.
c. under any circumstances.
d. under no circumstances.
Trina pays a premium to Unity Insurance Corporation for fire insurance against the loss
of her Viewpoint Office Building. After Trina sells the building to Wade, it burns down.
Under the policy, Unity must pay
a. neither Trina nor Wade.
b. Trina and Wade.
c. Trina only.
d. Wade only.
Crosscreek County and Bridgework Corporation enter into a construction contract that
includes mathematical specifications. Later Crosscreek, whose engineer, Damon,
compiled the specs, learns that some of the dollar figures are incorrect. Bridgework
refuses to agree to changes. A court would most likely
a. award damages to both parties for the mistakes.
b. order Damon to be discharged for fraud.
c. enforce the contract without requiring changes.
d. reform the contract to reflect the figures accurately.
Venture Capital Corporation loans Wally $15,000 to start a new business. Wally does
not pay, but Venture fails to sue within the time prescribed by the applicable statute of
limitations. Wallys promise to pay the debt even though recovery is barred
a. needs new consideration.
b. needs no consideration.
c. is unenforceable regardless of any consideration.
d. needs legally sufficient and adequate consideration.
To finance the purchase of a car from Giant Auto Sales, Hoppy signs an instrument
promising to pay to “Ideal Credit Union $18,000 with interest in installments with the
final payment due May 15, 2014. To be negotiable, this instrument must include on its
face
a. any conditions on the sale of the car.
b. any conditions to the disbursement of the funds.
c. any conditions to the repayment of the loan.
d. no conditions.
Olga, a salesperson for Pre-owned Cars & Trucks, Inc., tells Quincy, “This is the best
car Ive ever seen. This statement is
a. an express warranty.
b. an implied warranty.
c. a warranty of title.
d. puffery.
Boyd is a minor. As a minor, Boyd has the capacity to enter into
a. an invalid contract.
b. an unavoidable contract.
c. a valid contract.
d. no contract.
Don executes a will leaving half of his farm to his spouse Elsie and the rest to his sons,
Frank and Greg, in equal shares. The will disinherits a third son, Hal. Don and Elsie
divorce, but Don dies before changing his will. Under the Uniform Probate Code
a. Elsie receives half of the farm, and Frank and Greg share the rest.
b. Elsie receives half of the farm, and Frank, Greg, and Hal share the rest.
c. Frank and Greg receive the entire estate in equal shares.
d. the state inherits the entire estate.
Clutch Auto Parts enters into a contract with Bio Health Club for discounted
memberships for Clutchs employees. Bio breaches the contract and Clutch enters into a
contract with Apex Fitness for the same service at a lower price. Clutch might be
awarded nominal damages to
a. establish, as a matter of principle, that Bio acted wrongfully.
b. provide Clutch with funds for a foreseeable loss beyond the contract.
c. provide Clutch with funds for its loss of the bargain.
d. punish Bio and set an example to deter others from similar acts.
Hud and Iggy form Jerry-Bilt Construction to enter into a contract to build one bridge.
Under their partnership agreement, Jerry-Bilt is to dissolve when the bridge is built.
Iggy signs a contract for the firm to build a second bridge. Jerry-Bilt
a. dissolves as soon as the first bridge is built.
b. dissolves as soon as the second bridge is built.
c. dissolves immediately on Iggys signing of the second contract.
d. does not dissolve.
Milo buys an all-terrain-vehicle (ATV) from No-Limit Toys, Inc., on credit but makes
no payments on the account. Odell, the owner of No-Limit Toys, calls Milo at home on
a Monday morning at three a.m. Odell represents himself as PayNow Collection
Agency and demands payment “or else. The next day, Odell sends Milo notice that he
has thirty days to request verification of the debt, during which its payment will be
suspended, but that if he does not pay the full amount due within five business days,
Odell will arrange for the “destruction of Milos good credit rating. Which laws has
Odell violated, if any, and in what ways?
Noni, a seventeen-year-old, signs a contract to sell her car to Metro Used Cars. The next
day, Noni tells Metro that shes decided not to sell the car. Noni is
a. liable to Metro and must sell it a car of comparable value.
b. liable to Metro and must sell it her car.
c. liable to Metro for the amount of its profit on the deal.
d. not liable to Metro.
Della, an officer for Energy Petrol Corporation (EPC), buys 100 shares of EPC stock.
One week later, EPC announces that it will merge with a competitor, Fuel Oil Company,
and the price of EPC stock increases. One month later, Della sells her shares for a
profit. Under Section 16(b) of the Securities Exchange Act of 1934, Della would not be
liable if, after buying the stock, she had waited
a. less than fourteen days to sell it.
b. more than six months to sell it.
c. ninety days to sell it.
d. two months to sell it.
Jaclyn, an agent for Kilpatrick, enters into a contract on Kilpatricks behalf with Leif
that must be in writing to be enforceable under the Statute of Frauds. Under the equal
dignity rule, Jaclyns authority to enter into this contract
a. may be oral or written.
b. must be oral and written.
c. must be written.
d. cannot be oral or written.
Kelly signs an instrument in favor of Leo that states it is ‘subject to a certain agreement
between Kelly and Mona. This instrument is
a. negotiable.
b. nonnegotiable, because it is made subject to a separate agreement.
c. nonnegotiable, because it refers to a separate agreement.
d. nonnegotiable, because Kelly and Mona are not the same persons.
International Properties, Inc. (IPI), signs an instrument in favor of Financial
Investments Corporation that includes the statement “IPI plans to pay this debt from the
proceeds of the sale of the IPI Office Building in Montreal. This instrument is
a. negotiable.
b. nonnegotiable, because banks cannot easily process office buildings.
c. nonnegotiable, because it refers to a separate sale.
d. nonnegotiable, because Montreal is in Canada, not the United States.
Marine Recreation, Inc., allows Nels to take a Marine Recreation boat for a “test run.
Nels tries the boat for a few hours, returns, and buys it. This is
a. a bailment.
b. a consignment.
c. a sale on approval.
d. a sale or return.
Lauren transfers an instrument to Miguel in a form and by a means that makes Miguel a
“holder. This is
a. a holding.
b. an assignment.
c. negotiation.
d. presentment.
Pacific Bicycle, Inc., is the major distributor of bikes in the state of California. Pacifics
closest competitor is Golden State Bike Company, another California firm. They agree
that Golden State will distribute bikes in northern California and Pacific will distribute
bikes in southern California. This is
a. a group boycott.
b. a market division.
c. a price-fixing agreement.
d. a tying arrangement.
Uberto and Vicki are married and own a mountain cabin in Wyoming in such a way that
neither may transfer separately his or her interest during his or her lifetime. Uberto and
Vicki own the lodge as
a. community property owners.
b. tenants at sufferance.
c. tenants by the entirety.
d. tenants in common.
An agents authority must be express for the agents act to bind a principal.
In all circumstances, title passes to the buyer at the time and place the seller performs
by delivering the goods.
Vesting gives an employee a legal right to receive pension benefits at some future date
when he or she stops working.
Dumping is the exporting of environmentally polluting goods to a foreign market.
Courts do not apply the business judgment rule to analyze whether the directors acted
reasonably in resisting a takeover attempt.
An adult may avoid any contract with a minor.
A promise to do something that one has a prior legal duty to do is not consideration.
Contractual capacity includes the financial ability to pay for the benefits of a contract.
The owner of real property has relatively exclusive rights to the airspace above the land.
Any breach discharges the nonbreaching party from the contract.
Property voluntarily placed by its owner with no intention of reclaiming it is mislaid
property.
An attempted takeover can succeed even if it would result in a substantial increase in
the acquiring corporations market power.
Under the Age Discrimination in Employment Act of 1967, when an older worker is
laid off as part of a restructuring, he or she must present evidence that the layoff was
motivated by age bias.
An agent has the right to perform agency duties without interference by the principal.
When a consolidation takes place, the newly formed corporation issues shares or pays
fair consideration to the shareholders of any corporation that ceases to exist.
Federal courts are superior to state courts.
Express conditions are provided for by the parties agreement.