A party seeking to recover in quasi contract must show that he or she has been unjustly
enriched.
Shares issued for more than their fair market value are known as watered stock.
If an action is ethical from an outcome-based perspective, it is always ethical from a
duty-based perspective.
To recover for fraud, a plaintiff must be under twenty-one years of age.
A contract involving a sale is the only contract relating to an interest in land that must
be in writing to be enforceable.
Gender can be a determining factor in an employer’s decision to hire, fire, or promote
an employee.
Withdrawal from a partnership for a term prematurely does not constitute a breach of
the partnership agreement.
Theoretically, Congress can regulate every commercial enterprise in the United States.
The same principles that govern the filing of a liquidation petition apply to
reorganization proceedings.
Attorneys are required to be familiar with well-settled principles of law applicable to a
case.
Subrogation refers to the right of a co-surety to recover from the other co-sureties the
amount paid above his or her proportionate share of a debt.
Corporate ethical policies must be clearly communicated to be effective.
The loan that a lender provides to enable a borrower to purchase real property is a
mortgage.
Under the doctrine of strict liability, liability is imposed strictly according to fault.
Federal mortgage disclosure requirements apply to the written materials that a lender
provides and to any oral representations.
An agency can terminate once its purpose is achieved.
Shareholder voting agreements are usually held to be invalid and unenforceable.
Divestiture of a business interest is a possible penalty under RICO.
Stocks are an example of property that does not come under UCC Article 2.
Foreclosure is the postponement, for a limited time, of part or all of the payments on a
loan in jeopardy of repossession and sale.
A foreign citizen can bring a civil suit in a U.S. court for a violation of international
law.
Most contracts are discharged by performance.
A partner always has the power and the right to dissociate from the partnership.
The Magnuson-Moss Warranty Act modifies UCC warranty rules to some extent in
consumer transactions.
A lender can make a higher-priced mortgage loan based on the value of the consumer’s
home without verifying the consumer’s other credit obligations.
A testator is a decedent who dies without a will.
In raising capital, a sole proprietor is limited to his or her personal funds-a personal
loan is not possible.
Only a statement made after a contract is entered into can be an express warranty.
Specific performance is the remedy customarily used when one party has breached a
contract for personal services.
The only defense to criminal liability that justifies the use of force is self-defense.
An “X” can qualify as a signature on a will.
All bailments include a bailee’s right to use the bailed property.
Leilani, a high school student, gains unauthorized access to a plagiarism service’s
database to which she and other students had been asked to submit their assignments. A
federal court is most likely to find that this access violates
A.the Computer Fraud and Abuse Act.
B.the Virginia Computer Crimes Act.
C.federal copyright law.
D.no federal or state law.
Cold Stuf, Inc., makes snowboards, which it sells to Deep Freeze Sports Store (DFS).
DFS sells Cold Stuf boards to consumers, including Ed. Ed is injured while using the
board. In a product liability suit based on strict liability, Ed may recover from
A.Cold Stuf only.
B.Cold Stuf or DFS.
C.DFS only.
D.no one.
Rona and Savannah do business as Treasure Island Traders. Acting in good faith on the
firm’s behalf in a deal with Unlimited Potential, Inc., Rona makes an honest error in
overestimating the profit. To her firm, Rona is
A.liable for breach of the duty of care.
B.liable for breach of the duty of economic sense.
C.liable for breach of the duty of loyalty.
D.not liable.
Meri, an accountant, includes a false statement in a report for Novelty Paper Products,
Inc. (NPPI) that is filed with the Securities and Exchange Commission. When Otho
buys stock in NPPI and loses money on the investment, he files a suit against Meri,
alleging fraud under the 1934 Securities Exchange Act. To avoid liability, Meri can
show that she
A.intended to defraud NPPI, not Otho.
B.intended to profit on stock trades generally, not only with Otho.
C.is an otherwise competent accountant.
D.was not aware her statement was false.
Kelsy obtains a business liability insurance policy from Luminous Insurance Company
for Kelsy’s Framing & Art Supplies store. When an event occurs that gives rise to a
claim, Luminous has a duty to
A.investigate to determine the facts.
B.file a suit against Kelsy so that a court can settle the claim.
C.find a third party on whom to impose liability.
D.refund any unearned amount of the premium.
WiFi Corporation, a U.S. firm, signs a contract with Bueno Computadores, Ltd., an
Argentinean firm, for a shipment and payment for WiFi’s goods. This is
A.a distribution agreement.
B.a joint venture.
C.direct exporting.
D.licensing.
Michelle gives out a business card with an e-mail address on it. According to the
comments that accompany the UETA, it may be reasonable to infer that Michelle has
consented to
A.transact business electronically.
B.submit to the jurisdiction of any selected forum.
C.accept and respond to any correspondence sent to that address.
D.nothing.
Omega Corporation makes and markets digital timers, clocks, and related products.
Like other business corporations, Omega issues securities to
A.increase its market share.
B.obtain financing.
C.reduce its production costs.
D.safeguard its facilities.
Phil and Kelsey enter into a contract for a sale of Harmonica, a dog. Phil pays the price,
but Kelsey does not deliver. Phil can use specific performance as a remedy if
A.Kelsey is lawfully withholding delivery of Harmonica.
B.Phil cannot effectively cure the defect.
C.Harmonica is unique.
D.Harmonica has not been identified to the contract.
Beans Coffee & Cocoa Company makes and sells a chocolate-flavored coffee drink
under the name “CoCoCafe.” Darkroast Java, Inc., later markets a similar tasting drink
under the name “KoKoKafe.” This is most likely
A.copyright infringement.
B.patent infringement.
C.trademark infringement.
D.a theft of trade secrets.
OmniChem Corporation applies for a patent for a certain chemical compound.
Meanwhile, OmniChem licenses its products, including the compound, to Pharmo, Inc.,
which uses the compound to make an anti-cancer prescription drug. Under the terms of
the license, Pharmo agrees to pay royalties on OmniChem’s “patented” products. When
a patent is granted on the compound, OmniChem asks Pharmo to pay royalties on the
sales of the anti-cancer drug or stop selling it. Pharmo files a challenge to the validity of
OmniChem’s patent. Both firms assert their claims less from an interest in profit than a
belief in the “rightness” of their respective causes. This position might arguably be
A.illegal.
B.optimal.
C.socially irresponsible.
D.unethical.
Fact Pattern 26-1
Fresh Goods, Inc., wants to make an initial public offering of securities. Fresh believes
that it qualifies for an exemption under Regulation A from the full registration
requirement of the federal Securities Act of 1933.
Refer to Fact Pattern 26-1. If Fresh is exempt from the federal registration requirement,
Fresh is
A.automatically exempt from any state registration requirement.
B.not subject to any state securities laws.
C.not necessarily exempt under a state registration requirement.
D.automatically subject to all state registration requirements.
Paris knowingly divulges to Media Exposure magazine information about Randy’s
e-money payments to City Bank. The payments were in transmission to City Bank
when Paris, without the consent of Randy or City Bank, discovered and revealed them.
This may be a violation of
A.the Electronic Communications Privacy Act.
B.the Federal Reserve Board’s Regulation E.
C.the Right to Financial Privacy Act.
D.the Uniform Electronic Transactions Act.
Pat, the manager of Quik Mart, deposits the store’s receipts in its account at Regional
Bank. As to the receipts, the relationship between Quik Mart and the bank is
A.attorney and client.
B.creditor and debtor.
C.guardian and ward.
D.trustee and beneficiary.
Kitsch Niche Corporation is a noninvestment company that wants to issue $3 million of
stock in a twelve-month period. Kitsch Niche, with less than $20 million in annual
sales, qualifies as a small business issuer. Before Kitsch Niche sells the stock, it must
provide investors with
A.an offering circular.
B.a notice of the issue.
C.a red herring prospectus.
D.a tombstone ad.
On April 1, OK Contractors, Inc., contracts to build a store for Lo-Cost Jewelers at a
specific location in Metro City. On May 1, Metro changes its zoning laws to prohibit
the construction of a commercial building at that location. When the store is not built,
Lo-Cost files a suit against OK. In this situation
A.OK is in breach of contract.
B.Metro is in breach of contract.
C.the contract is discharged.
D.the contract is suspended.
To finance the purchase of a house from Tuna, Uri signs an instrument promising to pay
to “Verity Mortgage Service” $160,000 with interest in installments with the final
payment due July 10, 2040. To be negotiable, this instrument must include the signature
of
A.a non-party witness.
B.Tuna or Tuna’s realtor.
C.Uri.
D.Verity’s chief financial officer.
Sela agrees to act on Thom’s behalf, subject to Thom’s control, and Thom trusts Sela to
so act. They set out the terms in a written document, which they both sign. This is
A.an agency by agreement.
B.an agency by estoppel.
C.an agency by ratification.
D.not the creation of an agency relationship.
Cara and Dru are officers of EZ Trucking Corporation. As corporate officers, the rights
of Cara and Dru are
A.determined by their employment contracts.
B.specified in state corporation statutes.
C.the same as those of the directors.
D.the same as those of the shareholders.
One night, Bertram discovers Clu, an intruder, in Bertram’s Deli Delite store after the
store is closed. Bertram shoots and kills Clu. With respect to criminal prosecution for
this use of deadly force, under a duty-to-retreat law Bertram
A.is presumed innocent or may be exempt from prosecution.
B.must prove that he first told Clu to “Get out!” or to “Retreat!”
C.must prove that he first tried to retreat or that his life was in danger.
D.must prove that Clu did not try to retreat or acted without regard for his own life.
McCall and Teresa enter into a contract for the distribution of McCall’s produce to local
restaurants for which Teresa agrees to pay. McCall transfers his right to payment under
the contract to Midtown Bank. This transfer is
A.a delegation.
B.an assignment.
C.a novation.
D.prohibited by law.
A merger between Grain Mills Corporation and Farm2Fork Distribution Inc. can be
expressed as Grain Mills + Farm2Fork =
A.Farm2Fork.
B.Harvest Dining Corporation.
C.Harvest Dining Corporation + EZ Brewing Company.
D.EZ Brewing Company.
In the facts of the previous question, suppose that Thalia had had access to Rhett’s
checks through his carelessness. The majority in the Prestridge case would then most
likely hold Silverado liable for
A.all checks.
B.checks that were cashed less than thirty days after the statement.
C.checks that were cashed more than thirty days after the statement.
D.no checks.
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.
Fact Pattern 2-1
Java Cafes, Inc., and Kaffe Import Corporation dispute a term in their contract.
Refer to Fact Pattern 2-1. 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.
Boz runs an illegal gambling business and pays Colin, a police officer, not to interfere.
The payments are discovered. Boz and Colin are sent to prison. With respect to the
amount of the payments, Boz can recover
A.all of it.
B.none of it.
C.only as much as Colin has not spent.
D.only as much as Colin has spent.
Mona offers Ned, a building inspector, money to overlook the violations in her new
warehouse. Ned accepts the money and overlooks the violations. Mona is charged with
the crime of bribery. The crime occurred when
A.Mona decided to offer the bribe.
B.Mona offered the bribe.
C.Ned accepted the bribe.
D.Ned overlooked the violations.
Simon signs a check “pay to the order of Tilly” drawn on Simon’s account in United
Bank. Vela forges Tilly’s indorsement, First Federal Bank cashes the check, and Vela
disappears. United pays First Federal and debits Simon’s account. Most likely, the
ultimate loss will fall on
A.Simon.
B.Trudy.
C.United Bank.
D.First Federal Bank.
Peter offers to pay Quik Delivery (QD) $50 if it picks up and delivers to him a package
from Rico within 30 minutes. QD can accept the offer only by meeting the deadline. If
QD performs as directed, these parties will have
A.a bilateral contract.
B.a trilateral contract.
C.a unilateral contract.
D.no contract.
Lena offers Miguel a job, representing falsely that it will be long term. In reliance,
Miguel takes the job but is laid off shortly thereafter and successfully sues Lena for
fraud. With respect to the employment-at-will doctrine, this is
A.an example of the doctrine.
B.an exception based on contract theory.
C.an exception based on public policy.
D.an exception based on tort theory.
Home Development Company employs llya to buy property for a future residential
development. Ilya secretly buys some of the property and sells it to Home Development
at a profit. Ilya has breached
A.no duty.
B.the duty of accounting.
C.the duty of loyalty.
D.the duty of notification.