Edgy Engine Components, Inc., a maker of vehicle parts, refuses to sell to Fidgety
Fix-It, Inc., a national vehicle service firm. Edgy Engine convinces Greasy Motor Parts
Company, a competitor, to do the same. This is
a. a group boycott.
b. a market division.
c. a joint venture.
d. an exclusive-dealing contract.
Toni files a suit against Universal Media Corporation for defamation. Actual malice
must be shown for recovery of damages if Toni is
a. a corporate officer.
b. a non-employee.
c. a private individual.
d. a public figure.
A common ethical dilemma faced by the management of General Holdings Corporation
involves the effect that its decision will have on
a. one group as opposed to another.
b. the firm’s competitors.
c. the government.
d. the U.S. Chamber of Commerce.
Mineral Mining Corporation is a U.S. employer. Mineral, and other U.S. employers,
must perform I-9 verifications for new hires working under the employers direct
supervision
a. excluding contractors and day workers.
b. excluding contractors but including day workers.
c. excluding day workers but including contractors.
d. including contractors and day workers.
Relax Chair Company contracts to deliver 100 chairs to Stuffy Furnishings Store on
May 1 for which Stuffy agrees to pay. Relax tells Stuffy on April 15 that delivery will
be delayed until June 1. Stuffy may
a. await performance, sue Relax, or suspend its own performance.
b. only await Relaxs performance for a commercially reasonable time.
c. only sue Relax for breach of contract.
d. only suspend its own performance.
Guy and Hanna do business as G-H Associates. If G-H is a partnership, it is governed
by the Uniform Partnership Act
a. in the absence of an express agreement.
b. in the absence of an implied agreement.
c. only in the presence of an express agreement.
d. under all circumstances.
Inferior Company sells products that are poorly made. Jack, who has never bought an
Inferior product, files a suit against the company, alleging that its products are
defective. The firms best ground for dismissal of the suit is that Jack does not have
a. certiorari.
b. jurisdiction.
c. standing.
d. sufficient minimum contacts.
A clause in a contract between Timber Corporation, a U.S. business, and Wang, Ltd., a
Japanese business, specifies that disputes over the contract will be adjudicated in the
United States. This is
a. a choice-of-forum clause.
b. a choice-of-law clause.
c. a force majeure clause.
d. an arbitration clause.
Clay offers to pay Dot $50 for a golf lesson for Eula. They agree to meet the day after
tomorrow to exchange the cash for the lesson. These parties have
a. a bilateral contract.
b. a trilateral contract.
c. a unilateral contract.
d. no contract.
Oak Grove Residences, Inc., owns apartment buildings. Pedro leases one of Oak
Groves apartments. Pedros transfer of his interest in the lease to Quito for a period
shorter than the lease term is
a. an assignment.
b. an eviction.
c. a right of entry.
d. a sublease.
Fact Pattern 1-1
The Texas Supreme Court decides the case of Livewire Co. v. Power Corp. Of nine
justices, six believe the judgment should be in Livewires favor. Justice Bellamy, one of
the six, writes a separate opinion. The four justices who believe the judgment should be
in Powers favor join in a third separate opinion.
Refer to Fact Pattern 1-1. The opinion joined by the four justices who favor Power is
known as
a. a concurring opinion.
b. a dissenting opinion.
c. a majority opinion.
d. a per curiam opinion.
Sam, an engineer, supervises the construction of a new bridge. When the bridge col-
lapses due to faulty construction, Sam is sued by those injured in the collapse. As a
professional, Sam is held to the same standard of care as
a. ordinary persons.
b. other engineers.
c. other professionals, including doctors, dentists, and lawyers.
d. those injured in the collapse of the bridge.
Liz trespasses on Mega Corporations property. Through the use of reasonable force,
Megas security guard Ned detains Liz until the police arrive. Mega is liable for
a. assault and battery.
b. false imprisonment.
c. intentional infliction of emotional distress.
d. none of the choices.
Fact Pattern 18-1
Kit, manager of Long-Term Care Companys office in Metro City, decides to replace the
offices male employees with females. Nia, an assistant manager transferred from a
different Long-Term Care office, refuses to cooperate. Kit retaliates against Nia, who
quits. Within a year, the male employees also quit.
Refer to Fact Pattern 18-1. Liability for Kits conduct most likely rests with
a. Long-Term Care male employees, who should have acted themselves.
b. Long-Term Care, which should have known, and Kit, who acted.
c. Nia, who did not cooperate.
d. no one, because no law was violated.
Tire Manufacturing Company employs Uri as an agent. To terminate Uris authority, Tire
Manufacturing must notify
a. only third parties who are aware of the agency relationship.
b. the public generally.
c. Uri and any third parties who are aware of the agency relationship.
d. Uri only.
Nico is a passenger in a car driven by Owen, whose negligence causes an accident,
injuring himself. Nico, uninjured, accompanies Owen to Parkside Hospital in an
ambulance. The ambulance is hit by a car driven by Quin, injuring Nico. Nico files a
suit against Owen, whose best defense is
a. assumption of risk.
b. contributory negligence.
c. negligence per se.
d. superseding cause.
Owen is a holder of a promissory note obtained from Purchase Money, Inc. Regarding
the defenses against payment of the note to which Purchase Money is subject, Owen, as
an ordinary holder, is subject to
a. more defenses.
b. no defenses.
c. some defenses, but not as many.
d. the same defenses.
Hoppy, who works as an employee for Imperial Power Corporation, suffers an injury in
an accident. Hoppy will be compensated under state workers compensation laws
a. only if the injury occurred during working hours.
b. only if the injury occurred off the job.
c. only if the injury occurred on the job.
d. whenever and wherever the injury occurred.
Rafe signs a one-year lease with Suki to occupy an apartment in Lawrence, Kansas,
near the University of Kansas. Rafe needs the apartment only for two semesters and
may have to sublet it for the rest of the term. Rafes tenancy is
a. a periodic tenancy.
b. a tenancy at will.
c. a tenancy at sufferance.
d. a fixed-term tenancy.
Quality Steel Corporation files a suit against Rite Tool Company, claiming that the
consideration for their contract is inadequate. The court will most likely not examine
the adequacy of the consideration if
a. it is obvious that the consideration is adequate.
b. Rite Tool asserts that there is adequate consideration.
c. something of value passed between the parties.
d. the consideration is worth more than $100.
In Sales Distribution Corp. v. Consumer Products Co., the court decides that a
precedent is incorrect or inapplicable. The court
a. may rule contrary to the precedent.
b. must apply the precedent.
c. must ask a higher court to rule on the case.
d. must refuse to decide the case.
Louislarger and stronger than Micathreatens to hit Mica before hitting and injuring him.
Mica files a suit against Louis for assault and battery. Mica will most likely recover for
a. assault and battery.
b. assault but not battery.
c. battery but not assault.
d. neither assault nor battery.
Realty Credit Company and Second Mortgage Corporation plan to consolidate. Most
likely, the articles of consolidation will be filed with
a. the county recording office.
b. the Securities and Exchange Commission.
c. the states secretary of state.
d. the U.S. Department of Justice.
Ollie transmits unsolicited ads to millions of virtual mailboxes, using misleading and
deceptive information, including false return addresses. Under federal law, this is
a. a crime only if the recipients previously asked to be “opted out.
b. a crime only if HHH and the recipients are in foreign jurisdictions.
c. not a crime.
d. a crime.
During the last years of her life, Barbs chief companion was Sylvia. Barb told Sylvia
that she could have a certain painting when Barb died. Barb died without a valid will.
Her family refused to give the painting to Sylvia, however, who filed a suit to obtain its
possession. Based on the decision in Case 23.1, In re Estate of Piper, the court will most
likely rule in favor of
a. Barbs family, because the painting was never delivered to Sylvia.
b. Sylvia, because Barb intended to give the painting to Sylvia.
c. Barbs family, because there was no will.
d. Sylvia, because Barbs family never cared about Barbara.
Olin convinces Pia, who has no artistic ability, that Pia has considerable talent and
induces Pia to pay Olin $10,000 for art lessons. When Pia realizes the truth, she files a
suit against Olin. Pia is most likely to recover on the basis of
a. fraud.
b. mistake.
c. undue influence.
d. none of the choices.
Thermo Gas, Inc., and Uno Oil Corporation refine and sell gasoline and other
petroleum products. To limit the supply of gas on the market and thereby raise prices,
Thermo Gas and Uno Oil agree to buy “excess supplies from dealers and “dispose of it.
This is
a. a horizontal restraint.
b. a lateral restraint.
c. a vertical restraint.
d. not a restraint.
Evan is charged with a crime. Almost all federal courts and some state courts would not
hold Evan liable if, at the time of the offense, as a result of a mental disease or defect,
Evan lacked substantial capacity to
a. appreciate the wrongfulness of his conduct only.
b. appreciate the wrongfulness of his conduct and obey the law.
c. appreciate the wrongfulness of his conduct or obey the law.
d. obey the law only.
Fact Pattern 25-1
First State Bank issues a letter of credit in favor of Oboe Company, an American firm,
to facilitate an international sales contract to buy resources from Lapland Mining, Ltd.,
a Finnish company.
Refer to Fact Pattern 25-1. In a letter of credit, the beneficiary is
a. Lapland.
b. Oboe.
c. First State Bank.
d. none of the above.
Hobby Farms, Inc., owns rural property that it leases to various tenants, including Ira.
Iras transfer of his entire interest in the leased property to a Jason is
a. an assignment.
b. an eviction.
c. a right of entry.
d. a sublease.
Fact Pattern 3-1
Java Cafes, Inc., and Kaffe Import Corporation dispute a term in their contract.
Refer to Fact Pattern 3-1. The least expensive method to resolve the dispute between
Java and Kaffe may be
a. arbitration because the case will be heard by a mini-jury.
b. litigation because each party will pay its own legal fees.
c. mediation because the dispute will be resolved by a non-expert.
d. negotiation because no third parties are needed.
Hi-Five Aero Corporation is required to register its securities under Section 12 of the
Securities Exchange Act of 1934. Section 14(a) of the act regulates
a. the declaration of dividends by Hi-Fives board of directors.
b. the later re-registration of Hi-Fives securities.
c. the short-swing activities of Hi-Fives insiders.
d. the solicitation of proxies from Hi-Fives shareholders.
Jeri is indicted. Before she is arrested, she confesses to the crime in a conversation with
Kelly, the arresting officer. Kelly then arrests Jeri and advises her of the right to
counsel. Later, Jeri claims that her statement should be excluded as evidence from her
trial. The statement will most likely be
a. admitted because Jeri knew she did the crime and confessed.
b. admitted because Jeri made it before being advised of her rights.
c. excluded because a confession is not admissible in a criminal trial.
d. excluded because it was elicited before Jeri was advised of her rights.
Cash is an employee of Drowsy Resort, Inc., covered by federal overtime provisions,
which apply only after an employee has worked more than
a. eight hours in a day.
b. forty hours in a week.
c. 160 hours in a month.
d. one year for the same employer.
Silky Coordinates, a womens clothing store, employs female attendants to assist
customers in the dressing rooms. Radley, a forty-one-year-old male, applies for an
attendants job, but is not hired. In Radleys suit against Silky for employment
discrimination under Title VII, the store has
a. an after-acquired evidence defense.
b. a bona fide occupational qualification defense.
c. a business necessity defense.
d. a seniority systems defense.
Corporations chief executive officers are directly accountable for the accuracy of
financial statements filed with the Securities and Exchange Commission.
A party cannot recover damages for severe emotional distress absent a showing of
physical injury.
All bailments include a bailees right to use the bailed property.
A security agreement must be filed in person to be valid and enforceable.
If a buyer wrongfully refuses to accept goods that conform to a contract, the seller can
maintain an action to recover the damages sustained.
One of the disadvantages of a sole proprietorship is that the owner is liable for the
losses of the business.
Computer fraud is a state, not a federal, crime.
Hoppy steals two checks from Eagle Retail Stores, Inc.: a blank check and a check
payable to the order of General Supplies Company (GSC), drawn on Eagles account
with First National Bank. Hoppy forges Eagles signature on the blank check and makes
it payable to himself. Hoppy forges GSCs indorsement on the back of the check payable
to GSC, and adds “Pay to the order of Hoppy. At Friendly Credit, Inc., Hoppy indorses
the back of both checks with his own name and gives them to Friendly for cash.
Friendly does not know about the theft or the forged signatures and presents the checks
to First National, which pays them. Eagle, which was not negligent, discovers the
forgeries and asks First National to recredit its account. Who suffers the loss on each
check?
Insurance companies are exempt antitrust laws whenever state regulation exists.
A market in which there is more than one seller, even if only a limited number, cannot
be a monopoly.
The measure of damages on a breach of contract is the amount that will impress on the
breaching party the harm that has been done.
A merchant can disclaim an implied warranty of merchantability.
The Bill of Rights protects individuals against types of interference by the states.
A director usually serves on a corporations board for a life term.
A covenant not to compete in the sale of an ongoing business is unenforceable.
After a contract is made, an unforeseen event may make performance impossible and
discharge the contract.
Quasi contracts allow the courts to act as if a contract exists when there is no contract.
Those who violate the Clean Water Act may be subject to civil penalties.
Only certain funds are legally available for paying dividends.