The U.S. Green Building Council verifies that a building meets certain standards before
issuing a Leadership in Energy and Environmental Design (LEED) certification. Lolly
hires Myron, a subcontractor, and insists that his work conform to the requirements of
the LEED rating system. If the standards are not conformed to, then
a. certain tax credits may not be available.
b. the U.S. Green Building Council may impose sanctions.
c. Lolly must pay “just compensation to the local zoning authority.
d. Myron may be denied a zoning variance.
Natural Seed Company and Mill Valley Farmers Cooperative enter into a contract for a
sale of hybrid seeds. Under the perfect tender rule, Natural must ship or tender seeds
that
a. approximately conform to the contract description.
b. entirely conform to the contract description in most ways.
c. conform to the contract description in every way.
d. substantially conform to the contract description.
Fact Pattern 50-1B
Shopping Mall, Inc. (SMI), leases space to Toney Goods Company and Uneek Stuf
Store. Later, Uneek begins to sell items that are similar to Toneys goods, and Toney
abandons its space before the end of the lease term.
Refer to Fact Pattern 50-1B. In a growing number of jurisdictions, SMI would be
a. entitled to damages from Uneek for its business decision.
b. entitled to increase other tenants rent to cover Toneys unpaid rent.
c. entitled to the unpaid rent from Toney.
d. required to mitigate its damages.
Ben, who runs a livestock breeding business, owes the Circle C Ranch $40,000. Ben
agrees to pay the Circle C a percentage of his profits each month until the debt is paid.
Because of this agreement, the Circle C is
a. Bens creditor and partner.
b. Bens creditor only.
c. Bens partner only.
d. neither Bens creditor nor his partner.
Fact Pattern 3-A3
Liz files a suit against Moe in a state court. The case proceeds to trial, after which the
court renders a verdict.
If Liz decides to appeal to a state appellate court, Lizs attorney must file, with the clerk
of the appellate court within a prescribed period of time
a. a demand to be heard.
b. a motion for a judgment n.o.v.
c. a notice of appeal.
d. a request for affirmance, remand, or reversal.
Finn wants to incorporate his game store as GameZ, Inc., and files the name with the
Idaho secretary of state. Filing will protect the name
a. only within Idaho.
b. throughout the Pacific Northwest.
c. throughout the United States.
d. throughout North America.
Effervescent Soda Bottling Company is
a. a chain-style franchise.
b. a distributorship franchise.
c. a manufacturing franchise.
d. no franchise.
Jordan and Isabel enter into a contract under which Jordan agrees to cater Isabels
wedding in exchange for $5,000. The contract can expressly prohibit and prevent the
transfer of
a. Jordans right to receive funds.
b. Isabels right to receive personal services.
c. no rights under the contract.
d. all rights under the contract.
Sid induces Ty to enter into a contract for the sale of a warehouse about which Sid
fraudulently misrepresents a number of material facts. Sid also tells Ty that his
commission is 6 percent, but their signed, written contract states “12 percent. The parol
evidence rule governs
a. contracts that are induced by fraud.
b. contracts that must be in writing to be enforceable.
c. the admissibility in court of oral evidence.
d. the reformation of oral and written statements into one contract.
Shad signs a promissory note payable to Theresa “with interest on which he
conspicuously notes that it is “nonnegotiable. This instrument is
a. negotiable.
b. nonnegotiable, because it includes the notation “nonnegotiable.
c. nonnegotiable, because it does not specify a rate of interest.
d. nonnegotiable, because the exact amount payable cannot be determined from the face
of the instrument.
Regular Business, Inc. (RBI), obtains a fire insurance policy from Statistical Insurance
Company on a $400,000 warehouse. The policy includes an 80-percent coinsurance
clause. RBI insures the property for $320,000. In a fire, the warehouse suffers $200,000
in damage. RBI can recover
a. $400,000.
b. $320,000.
c. $200,000.
d. $80,000.
Frida and Gregor want to market a new line of fishing gear. To avoid income taxes at
the corporate level, they should form
a. a C corporation.
b. a closely held corporation.
c. an S corporation.
d. a private corporation.
Eli agrees to pay a debt to Financial Credit, Inc., which is otherwise dischargeable in
bankruptcy. This is
a. a cram-down.
b. a revocation.
c. a reaffirmation.
d. a workout.
The Anti-Counterfeiting Trade Agreement is most likely to apply to
a. pirated copyrighted works distributed via the Internet.
b. personal financial information on its owners laptop.
c. legally downloaded recordings on a users iPod.
d. a business firms trade secrets cached on the firms server.
Raul is chairman of the board of Swif-Vac Corporation. Pinky, a consumer, is injured
while using a Swif-Vac product. Pinky sues Swif-Vac, and Raul individually. Swif-Vac
may pay Rauls legal fees under
a. the directors right to certification.
b. the directors right to compensation.
c. the directors right to indemnification.
d. no circumstances.
Breakfast Foods Corporation markets waffle irons, one of which proves defective and
injures Chelsea. Breakfast Foodss strict liability to Chelsea for the harm caused by the
defective waffle iron is based in part on the fact that
a. Breakfast Foods profits from the sale of its waffle irons.
b. Chelsea is a person, not a corporation like Breakfast Foods.
c. marketing is an “abnormally dangerous activity.
d. the doctrine of strict liability is the norm rather than the exception.
Kip opens an account at a Lotsa Goodies Store, and buys a digital music player and
other items, but makes no payments on the account. To collect the debt, Mako, the
manager, contacts Kips parents. 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.
Rhea is a director of Spex Corporation, which makes and sells sunglasses and other
eyewear. As a Spex director, Rhea sits on the board, which
a. governs Spex.
b. is governed by the Spex incorporators.
c. is governed by the Spex officers.
d. is governed by the Spex shareholders.
Brad is an employee of Custodial Service, Inc. In deciding whether Brad acts within the
scope of his employment when he commits a tort against Didi, a court will not consider
whether
a. Brad indicated that he was acting on behalf of Custodial.
b. Custodial authorized the act.
c. Custodial furnished the means by which the injury was inflicted.
d. the act is one commonly performed by employees for their employers.
Petro Oil Company wants to conduct genetic testing of its workers to identify those
who might develop significant health problems in the future. Under federal law, Petro
may use genetic information to
a. make decisions about hiring or firing.
b. make decision about job placement or promotion.
c. deny group health-care coverage or charge a higher premium.
d. none of the choices.
Hi-Yield Agriculture, Inc., makes a pesticide with a one-in-a-million risk to people of
developing cancer from exposure. This substance must be
a. disposed of before anyone develops cancer.
b. registered before it is sold.
c. taken off the market and placed in temporary storage.
d. used only in a way that avoids exposure to people.
Corner Café Company offers its stock for sale only in a single state. The law in Corners
state is like the law in most states. Corners offer is subject to state securities statutes
that include
a. antifraud and disclosure provisions.
b. antifraud provisions only.
c. disclosure provisions only.
d. neither antifraud nor disclosure provisions.
Kay carelessly bumps into Lyle, knocking him to the ground. Kay has committed the
tort of negligence
a. only if Lyle is injured.
b. only if Lyle is not injured.
c. under any circumstances.
d. under no circumstances.
Fact Pattern 37-2A
Luann and Mace are partners in Networx, a computer peripherals firm.
Refer to Fact Pattern 37-2A. Mace dissociates from Networx. Luann signs a contract
with Physik Drives, a wholesale component supplier, apparently on Networxs behalf.
Physik does not know of Maces dissociation. The contract is binding on
a. Luann, Mace, and Networx.
b. Luann only.
c. Networx only.
d. Physik only.
Gwyn dies without a will, survived by her nephew Halsey and her aunt Ilene. Halsey
and Ilene are Gwyns
a. collateral heirs.
b. grantors.
c. testators.
d. lineal descendants.
Fashion Retail Center enters into a contract with Great Promotions, Inc., to provide
Fashion with a plan to retool its merchandising strategy. If Great Promotions breaches
the contract, Fashion has a duty to
a. reduce the damages that Fashion might otherwise suffer.
b. reduce the loss that Great Promotions might otherwise suffer.
c. punish Great Promotions and deter others from similar acts.
d. take no action.
Guard Personnel Company is charged hiring practices that do not meet requirements set
by the Transportation Safety Administration (TSA). The administrative law judge or-
ders Guard to comply with the TSAs regulations. Guard may
a. appeal to the commission that governs the TSA.
b. appeal to Congress, which created the TSA.
c. appeal to a different, separate agency.
d. ignore the order.
Traviss will states, “I give to my brother Ubi my gold pocket watch. This is
a. a general legacy.
b. a residuary.
c. a specific bequest.
d. a specific devise.
Fact Pattern 26-1B
Jake is the maker of a $2,000 promissory note payable to Kim. Kim indorses the note to
Lyron who, in turn, indorses it to Mona, who then indorses it to Neville, the present
holder.
Refer to Fact Pattern 26-1B. Suppose that Mona pays Neville on the note. With timely
notice to the proper parties, Mona may collect payment on the note from
a. Jake, Kim, or Lyron.
b. Jake or Kim only.
c. Lyron only.
d. no one.
Doctors Medical Associates obtains an insurance policy that protects its members
against negligence claims by their patients. This is
a. casualty insurance.
b. fidelity or guaranty insurance.
c. malpractice insurance.
d. workers compensation insurance.
The Association of Southeast Asian Nations is a regional trade association that was
created through
a. a bilateral agreement.
b. a lateral agreement.
c. a multilateral agreement.
d. a unilateral agreement.
Cross-Country Trucking Company contracts with Baldwin to transport crated goods to a
certain destination for $5,000. Cross-Country delivers the crates, but Baldwin does not
pay. Cross-Country learns that the crates contained stolen goods. Cross-Country can
a. do nothing with respect to the contract.
b. recover $5,000 from Baldwin.
c. recover the goods but not the $5,000 from Baldwin.
d. recover the goods or the $5,000 from Baldwin.
Fact Pattern 24-1B
Dominion Sales Ltd. in Canada and Eagle Buying Company in the United States enter a
contract for a sale of forestry products. Dominion draws a draft unconditionally
ordering Great Federal Bank, Eagles bank, to pay $60,000 to Dominions order in sixty
days. Eagle signs and dates the draft.
Refer to Fact Pattern 24-1B. This instrument is
a. a bankers acceptance.
b. a nonnegotiable instrument.
c. a promissory note.
d. a trade acceptance.
Delilahs debit card, issued by Encarta Bank, is stolen and used without Delilahs
permission. Delilah tells the bank within thirty days. Delilah may be required to pay no
more than
a. $5.
b. $50.
c. $500.
d. $5,000.
Criminal law focuses on duties that exist between persons.
A borrower has a right to rescind a mortgage within three business days.
If a contract calls for a lease of specific and ascertained goods already in existence,
identification takes place at the time the contract is made.
A contract does not need to be in writing to be enforceable if it makes performance
possible within any definite period of time.
Under the National Pollutant Discharge Elimination System, firms that have discharge
permits need not monitor their own performance.
When the principal-agent relationship is not contractual, the agent has no right to
specific performance.
Exemptions from federal securities laws are exemptions from state laws.
Property acquired by the partnership is the property of the partners individually.
At the present time, it is not clear which, if any, laws apply to the security of e-money
issuers financial records.
Ordinarily, the remedy for a sellers breach of a contract for a sale of real estate is
specific performance.
A motion for summary judgment may be made before, during, or after a trial.
The key consideration in determining whether an employment manual creates an
implied contract is the reasonable expectation of the employer.
One who dies without a valid will creates a bequest.
Misrepresentation of a material fact can occur through conduct alone.
An involuntary bankruptcy occurs when a debtors creditors are forced to accept a
discharge of the debtors debts.
Information stored electronically cannot be the object of a discovery request.
Ben owns Copyshop and wants to sell Copyshop franchises throughout the United
States. In doing so, Ben wants to prevent competitors from imitating the distinctive
Copyshop logo and thereby misleading consumers. How can Ben protect the logo?
In a general partnership, the acts of one partner in the ordinary course of business
subjects the other partners to personal liability.
Courts in a few states have held that all employment contracts an implied covenant of
good faith.
A fire insurance policy covers losses to the insured as a result of fire and lightning, but
not damage from smoke and water.