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.
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.
Fact Pattern 33-2
Amy signs a lease on behalf of Business Start-up, Inc. (BSI), with Cool Properties, Inc.
As part of the lease, Amy signs a document titled “GUARANTY,” which states that it is
“an absolute guaranty” of the lease’s performance.
Refer to Fact Pattern 33-2. Amy will be held liable for unpaid rent because:
a. Amy signed the lease “on BSI’s behalf.”
b. Amy signed a “GUARANTY.”
c. Cool leases the property to different tenants at different times.
d. Cool wrongly insisted that Amy sign an alleged “GUARANTY.”
Best Banking Bank creates a paper reproduction of customer Sophie’s check with the
statement “This is a legal copy of your check. You can use it in the same way you
would use the original check.” This is a
a. certified check.
b. cashier’s check.
c. substitute check.
d. void check.
A failure of the Federal Bureau of Investigation to comply with a request under the
Freedom of Information Act (FOIA) may be challenged in
a. a federal district court.
b. a hearing before the U.S. Freedom of Information Agency.
c. a meeting with Congress’s FOIA subcommittee.
d. a special conference with the president of the United States.
Wendy works as a weather announcer for a TV station under the character name
Weather Wendy. Wendy can register her name as a
a. a certification mark.
b. a collective mark.
c. a service mark.
d. a trade name.
Hal contracts with Credit Services, Inc. (CSI), to pay $500 for its services. After CSI
performs, they sign an accord, in which Hal promises to pay $400 within ten days
instead of the $500. Hal does not pay. CSI can sue Hal under
a. neither the accord nor the contract.
b. the accord only.
c. the accord or the contract.
d. the contract only.
Webline Retail Sales, Inc., promises its salaried employees a bonus at the end of the
year if management thinks it is warranted. This promise is
a. enforceable.
b. unenforceable because it is not supported by consideration.
c. unenforceable because the dollar amount is missing.
d. unenforceable because the employees are paid salaries.
Civil law is
a. a body of law in the form of rules, regulations, orders and decisions of administrative
agencies
b. the branch of law dealing with the definition and enforcement of all private or public
rights.
c. federal law, as opposed to state law.
d. law that provides for societal order.
Dyan executes her will to give “to my nephew Esau my stock in Fargo, Inc.” Later,
Dyan writes separately, with the same formalities required for a will, to leave the stock
to her niece Ginny and cash to Esau. This writing
a. does not affect the will’s gift of the stock to Esau.
b. requires a gift of the stock in equal shares to Esau and Ginny.
c. revokes the whole will, which must be redrafted.
d. revokes the will’s gift of the stock to Esau.
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.
Bea is a shareholder of Candy Confections Corporation. The right to inspect corporate
books and records is
a. held by Bea only if she is a director.
b. held by Bea, without restrictions.
c. held by Bea, with some restrictions.
d. not held by Bea.
Garden Field Farms and Haute Gourmet Restaurant, Inc., enter into a contract for a sale
of lettuce before Haute Gourmet becomes insolvent. Garden Field can stop delivery of
the goods in transit
a. unless Haute Gourmet pays on credit.
b. under no circumstances.
c. unless Haute Gourmet files a claim for the goods.
d. unless Haute Gourmet pays in cash.
Inez and Jason are the shareholders and directors of Kleen Kustodial Corporation. Lily
and Moe are Kleen’s officers. As in other corporations, the responsibility for the overall
management of Kleen rests with
a. the board of directors.
b. the officers.
c. the owners.
d. the shareholders.
Eden, the chief executive officer of Flo-Thru Piping Corporation, wants to ensure that
Flo-Thru’s activities are legal and ethical. The best course for Eden and Flo-Thru is to
act in
a. good faith.
b. ignorance of the law.
c. regard for the firm’s shareholders only.
d. their own self interest.
The Regulatory Flexibility Act requires that whenever a new regulation will have a
significant impact on a substantial number of small businesses, the issuing agency must
do all of the following EXCEPT
a. measure the cost that the rule will impose on small businesses..
b. consider less burdensome alternatives.
c. conduct a regulatory flexibility analysis.
d. adjust the rule to the satisfaction of the regulated businesses.
Hal’s Hardware store defaults on a debt to Intrastate Bank, which takes possession of
the collateral securing the debt. Intrastate sells the collateral. The proceeds from the sale
are applied first to
a. Hal’s debt to Intrastate.
b. Hal’s debts to other creditors.
c. Intrastate’s fees for the sale.
d. payments Hal’s made on the debt to Intrastate.
Sonia manages a Tasty Pastry store for United Food Company. To manage the business,
Sonia’s authority can be implied by
a. an inference from the position Sonia occupies.
b. any inference a reasonable customer or supplier would make.
c. any inference Sonia chooses to make.
d. no inference.
Demi promises to buy a house from Caleb, who promises to vacate the property on June
1. If these promises are in writing, they are most likely
a. enforceable.
b. unenforceable.
c. void.
d. voidable.
The False Claims Reform Act of 1986 requires that workers who disclose information
relating to a fraud perpetrated against the U.S. government be
a. fired from his or her position.
b. given a new position at a higher pay grade.
c. given a comparable position at a different company.
d. rewarded with a percentage of the proceeds if the government sues the wrongdoer.
Consumer Payments Processing Corporation (CPPC) and Mall Kiosk Company make a
deal for CPPC’s services, via e-records. Under the UETA, an e-record is considered
received when
a. it enters the recipient’s processing system in a readable form.
b. the recipient is aware of its receipt.
c. the recipient is aware that it has been sent.
d. it leaves the sender’s control.
Kelsy, a minority business owner, obtains a business liability insurance policy from
Luminous Insurance Company for Kelsy’s Framing & Art Supplies store. Luminous can
cancel the policy
a. if Kelsy increases the hazard covered by the insurance.
b. if Kelsy files a claim.
c. if Luminous decides to no longer insure minority business owners.
d. under no circumstances.
Brad defends against a breach-of-contract suit by College Credit Corporation by
claiming that their deala student loan accruing interest at a certain rate and payable
beginning on a certain datewas unfair because the consideration for their contract was
inadequate.
Refer to Fact Pattern 10-2. A court is most likely to evaluate the adequacy of
consideration if
a. a thing exchanged has no intangible value to one of the parties.
b. something exchanged is not of direct economic or financial value.
c. the items exchanged were of unequal value.
d. there is a gross disparity in the value of the consideration exchanged.
Doug agrees with Elinor to sell methamphetamine to patrons of Elinor’s nightclub
Garden of Eden for 25 percent of the take. Doug sells the drugs but keeps all of the
money. Elinor can
a. recover her share of the money only if she did not aid in the crime.
b. not enforce the deal.
c. recover the total amount of the sales.
d. recover her costs but none of the illegal profit.
Julia leases an apartment in Washington, D.C. for $2,200 per month. She buys a TV and
a stereo system for $500. When she needs to visit her aunt in Virginia, Julia leases a car
for the day for $65. Which of Julia’s transactions is/are governed by Article 2A of the
UCC?
a. The apartment lease only
b. Both the apartment lease and the car lease
c. The car lease only
d. The TV and stereo purchase only
Veggie Grocers orders by phone twenty cartons of canned beets from Capital Food
Packers, Inc. After ten cartons are delivered and accepted, Veggie repudiates the
contract. Capital can enforce the contract to
a. any extent because the order was placed orally.
b. no extent because the order was placed orally.
c. the extent of the ten accepted cartons.
d. the extent of the twenty ordered cartons.
Flo tells Ginger during a phone call that she will buy her textbook from last semester
for $65. Ginger agrees. These parties have
a. no contract.
b. an express contract.
c. an implied contract.
d. a quasi contract.
Lora is a resident of Illinois. Ned is a Canadian. They dispute the ownership of a boat
docked in a Michigan harbor. This diversity of citizenship could serve as a basis for
a. federal jurisdiction.
b. general jurisdiction.
c. limited jurisdiction.
d. universal jurisdiction.
A state court can exercise jurisdiction over an out-of-state defendant, but the defendant
must have
a. minimum contacts with the state.
b. maximum contacts with the state.
c. legitimate contacts with the state.
d. legal contacts with the state.
Dru signs a check “pay to the order of Eppie” drawn on Dru’s account in First Federal
Bank. Greta forges Eppie’s indorsement. First Federal pays the check. Most likely
a. Dru will be liable for the amount.
b. Eppie will have to pay Dru for the amount.
c. First Federal will have to recredit Dru’s account.
d. the Federal Reserve will reimburse all parties for their costs.
Kris transfers a note, on which Liu is the maker, to Mia, who takes it for value and in
good faith. Mia knows that Kris breached the contract underlying the note, giving Liu a
defense against payment. With respect to this note, Mia is
a. a knowledgeable holder in due course.
b. an ordinary holder.
c. an ordinary holder in due course.
d. an ordinary note taker.
The payment of Mo’s debt to Neil is guaranteed by Mo’s personal property. This is
governed by
a. the Uniform Commercial Code.
b. the Federal Trade Commission.
c. the U.S. Constitution’s commerce clause.
d. the Bankruptcy Reform Act of 2005.
The Food and Drug Administration (FDA) wants Big Medicine, Inc. to hand over some
records. If Big Medicine does not voluntarily give up the records, the FDA can gain
access to the records through
a. a subpoena ad tesifcandum.
b. a subpoena duces tecum.
c. an executive order.
d. a petition.
Bakri owns a house. In the house, on a tile floor is a throw rug. Most likely to meet the
definition of a fixture is
a. the house.
b. the throw rug.
c. the tile floor.
d. none of these choices.
Ownership of property exists independently of the legal system.
An executor is a personal representative appointed by a court for a decedent who dies
without a will.
When a landlord sells leased premises to a third party, any existing leases terminate
automatically.
The exterior boundaries of land extend straight down for 500 feet and straight up for
500 feet.
Congress can charge an administrative agency with carrying out the terms of particular
laws.
A decedent is a person who has died.
The annual percentage rate of a loan is the actual cost of the loan on a yearly basis.
A secured party in possession of the collateral must use reasonable care in preserving it.
A majority shareholder does not owe a fiduciary duty to minority shareholders under
any circumstances.
A certified check is a check that has been signed by a notary public.
A party seeking to recover in quasi contract must show that he or she has been unjustly
enriched.
A buyer who obtains substitute goods to replace goods that a seller did not deliver can
also recover damages from the seller.
Specific performance is an equitable remedy requiring exactly the performance that was
specified in a contract.
A surety can never assert fraud as a defense.
The House of Representatives alone can create a new federal administrative agency.
The Freedom of Information Act of 1966 requires the federal government to disclose
certain records only if the person requesting the records can give a reasonable reason
for the request.
An agent’s duties to the principal are implied from the agency relationship only if the
identity of the principal is disclosed to a third party.