Erasmus files a suit against Drain-Pro Plumbing & Repair LLC under the Civil Rights
Act of 1964, claiming reverse discrimination. To support this claim, Erasmus must
show that he is a member of
a. a protected class.
b. a majority group.
c. an employer’ association.
d. a union.
Bess wishes to appeal a decision from a federal bankruptcy court. Bess must appeal to
a. a county court.
b. a federal district court.
c. the U.S. Supreme Court.
d. a state court.
Wilson wants to file an ordinary, or straight, bankruptcy. Wilson should file using
a. Chapter 7.
b. Chapter 11.
c. Chapter 13.
d. his state’s bankruptcy code.
Avatar, Inc., and Bling Corporation sign a contract in which Avatar agrees to deliver
t-shirts emblazoned with video game characters in exchange for Bling’s promise to pay.
Avatar delivers. The contract is
a. voidable.
b. executed.
c. executive.
d. executory.
Which of the following is not a common form of electronic surveillance of employees
in the workplace?
a. Reviewing employee’ emails
b. Requiring employees to wear electronic location monitoring bracelets
c. Video-recording job performance
d. Listening to employee’ telephone conversations
Fact Pattern 32-1
Cardio, Inc., makes and sells Drawdown, the most prescribed name-brand heart
medication. Emitate Corporation has the potential to make a generic version of the
same drug.
Refer to Fact Pattern 32-1. Cardio pays Emitate not to sell its product. This is
a. a customer restriction.
b. a joint venture.
c. an exclusive-dealing contract.
d. a price-fixing agreement.
Uma wants to initiate a suit against Valley Vacation Tours by filing a complaint. The
complaint should include
a. an explanation to refute any defense the defendant might assert.
b. a motion for summary judgment.
c. a motion to dismiss.
d. a statement of the facts necessary to show Uma is entitled to relief.
Upton borrows $150,000 from Valley Credit Union to buy a home, which secures the
loan. Three years into the term, Upton stops making payments on it. Valley Credit
repossesses and auctions off the property to Wesley. The sale proceeds are not enough
to cover the unpaid amount of the loan. In most states, Valley Credit can ask a court for
a. a deficiency judgment.
b. a reverse mortgage.
c. a short sale.
d. nothing.
Flexo Trucking Company transports hazardous waste. Garn is a Flexo driver, whom the
company knows drives longer hours than federal regulations permit. One night, Garn
exceeds the limit and has an accident. Spilled chemicals contaminate Hill City’s water
source, forcing the residents to move away. Flexo acted unethically because
a. Flexo showed reckless disregard for Hill City’s residents and others.
b. Garn exceeded the federal time limit.
c. harm was caused by an unfortunate accident.
d. Hill City should have better protected its water source.
When applying the rule of reason to determine whether an agreement violates Section 1
of the Sherman Act, a court will not consider
a. the purpose of the agreement.
b. the partie’ market ability to implement the agreement.
c. the effect of the agreement on international trade.
d. the potential effect of the agreement on competition.
The case of Max v. National Credit Co. is heard in a trial court. The case of O! Boy! Ice
Cream Co. v. Refrigerated Transport, Inc. is heard in an appellate court. The difference
between a trial and an appellate court is whether
a. the proceedings focus on the presentation of evidence and the examination of
witnesses.
b. the court is appealing.
c. the parties question how the law applies to their dispute.
d. the subject matter of the case involves complex facts.
Kathy and John decide to form a partnership to sell fish food to local fish farms for the
next five years. To be enforceable under the Statute of Frauds, the partnership
agreement
a. must be signed by a notary public.
b. must be in writing.
c. must be oral.
d. cannot involve a third party.
Pastry Dough, Inc., sends its catalogue to Octavio and includes a “personalized” letter
inviting him to buy any item in it at the advertised price. This is
a. an offer because of the “personalized” letter.
b. an offer because there is no room for price negotiation.
c. an offer only if Octavio previously bought items from Pastry Dough.
d. not an offer.
Fact Pattern 21-1
Mary’s home is in a state that has a $30,000 homestead exemption. Mary defaults on a
$60,000 debt that she owes to Nina. Mary’s home is sold at auction for $80,000.
Refer to Fact Pattern 21-1. Mary will receive
a. $0.
b. $30,000.
c. $50,000.
d. $60,000.
Peter offers to pay Quik Delivery (QD) $50 if it picks up and delivers to him a package
of business documents from Rico within thirty 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.
Fiona borrows $1,000 from Garden State Bank, using her motorcycle as collateral. To
perfect its security interest, the bank must file its financing statement with
a. the secretary of state.
b. the county clerk.
c. the city treasurer.
d. the ward alderman.
Mineral Products Corporation, which owns no land, has a right to mine the copper from
Natural Resource Company’s land. Mineral’s right is
a. a leasehold estate.
b. a license.
c. an easement.
d. a profit.
Perfect Tone Phones, Inc., is a corporation. Perfect Tone’s implied powers enable it to
a. amend the articles of incorporation.
b. bring a derivative suit.
c. declare dividends.
d. borrow funds, extend credit, and make charitable contributions.
Paradise Footwear buys a franchise from Reliant Athletic Shoes Inc. This relationship,
like all other franchise relationships, is governed by
a. contract law.
b. no law.
c. the Franchise Disclosure Document, or FDD.
d. the rules of the National Collegiate Athletic Association.
Text Publishers, Inc., contracts for a sale of textbooks to University Bookstores, Inc.
Viable Shipping Corporation, the carrier, transports the books to Warehouse Storage
Company. Text’s right to stop delivery is lost when University’s rights to the goods are
acknowledged by
a. the appropriate government agency.
b. the students who opt to buy the books.
c. University Bookstores.
d. Warehouse Storage.
Global Services Corporation engages in trade practices that may violate antitrust law.
The Federal Trade Commission has the power to act against unfair trade practices under
a. the Clayton Act.
b. the Federal Trade Commission Act.
c. the Sherman Act.
d. no law.
Pace is an attorney, whose clients include Quikfeet Running Shoes Company. Unless
Quikfeet has violated securities law, the contents of Pace’s file on Quikfeet may be
disclosed to someone other than Quikfeet
a. only to a third party who is a foreseeable user of the information.
b. only under a court order (with or without Quikfeet’s consent).
c. only with Quikfeet’s consent.
d. under any circumstances.
Ratzo is asked to be a witness to Sade’s will. Before attesting to the will,
a. Ratzo does not have to read the will or be informed of its contents.
b. Ratzo must read the will and recite its contents.
c. Sade must orally tell Ratzo of the will’s contents.
d. Sade’s attorney must read the will aloud to Ratzo.
Marquis Company’s liabilities exceed its assets, but the firm’s employees falsify its
books to reflect a positive net worth. Marquis hires Nan & Ollie, an accounting firm, to
prepare a balance sheet, which is certified to show a positive net worth. Pure Credit
Corporation relies on the balance sheet to make a loan to Marquis. When the firm
defaults, Pure Credit files a suit against Nan & Ollie. Under the Ultramares rule, the
accounting firm is most likely
a. liable because Nan & Ollie owed a duty of care to all third parties.
b. liable because Nan & Ollie owed a duty of care to Marquis.
c. liable because Nan & Ollie owed a duty to any foreseeable user.
d. not liable because Nan & Ollie and Pure Credit were not in privity.
Moby leases from National Theater Corporation a theater in which to stage a series of
concerts. Ollie buys a ticket to the series. What distinguishes Moby, a tenant, from
Ollie, a licensee, is
a. the exclusivity of possession.
b. the quiet enjoyment of rights.
c. the temporary nature of possession.
d. the title to the property.
Salt Corporation wants to acquire or merge with Pepper Corporation. Salt should
a. file a plan of merger with the secretary of state.
b. file an article of merger with Pepper.
c. make a tender offer to the shareholders of Pepper.
d. make a tender offer to the shareholders of Salt.
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.
Julia opens a checking account with Washington Bank and deposits funds into the
account. Julia and Washington Bank
a. do not have a contractual relationship.
b. have a creditor-debtor relationship in which Julia is the creditor and Washington
Bank is the debtor.
c. have a creditor-debtor relationship in which Washington Bank is the creditor and
Julia bank is the debtor.
d. do not have a creditor-debtor relationship.
Conrad and Delilah are employees of AgriBio Feed & Seed Corporation. Under the
Equal Pay Act of 1963, AgriBio can legitimately pay different wages on the basis of
a. seniority.
b. job descriptions.
c. substantial equality of skill, effort, and responsibility.
d. gender.
Good Tire Company and Hiway Auto Service enter into a contract for a sale of tires.
Good Tire is a merchant who deals in goods of the kind sold. Under the UCC, an
implied warranty of merchantability arises
a. automatically in sales contracts.
b. only if the buyer asks for it.
c. only if the seller does not expressly disclaim it.
d. only in conjunction with lease contracts, not sales contracts.
Pikabo files an employment discrimination suit against Quantitative Analysis, Inc.,
under the Civil Rights Act of 1964, based on its discharge of Pikabo. Possible relief
includes
a. imprisonment.
b. reinstatement.
c. fines.
d. an order to shutdown the employer’s business.
Generally, Sports Fitness Club Company and other corporations can pay dividends if
a. the corporation can continue to pay its debts as they come due.
b. the amount of the dividends exceed the corporation’s net worth.
c. the shareholders approve.
d. the corporation’s assets equal its total liabilities.
Henry promises not to open his restaurant before 10:00 A.M. if Suzy, who owns a
bakery next door to him, promises to close her bakery by 4:00 P.M. Henry’s
consideration is
a. the destruction of a legal relationship.
b. the creation of a legal relationship.
c. a forbearance.
d. an exchange of money.
Origami Paper Products Corporation meets all of the requirements to be subject to the
federal employment discrimination laws. These laws restrict the ability of employers to
discriminate against workers on the basis of
a. experience.
b. gender.
c. intelligence.
d. skill.
Philomena dies without a will. A court appoints Quigley to handle the probate of
Philomena’s estate. The administrator of the estate is
a. Philomena’s closest blood relative.
b. Philomena.
c. Quigley.
d. the court.
Government authorities cannot enforce national law.
Being a small-business owner means that you will never have to take on the role of
finance manager, marketing manager or accountant.
Under the Foreign Sovereign Immunities Act, a foreign state can be a political
subdivision of a foreign state.
A breach of contract occurs only when a party fails to perform all of his or her duties
under a contract.
Professionals are obligated to adhere to standards of performance generally accepted
within their profession.
A buyer may reject a seller’s goods under any circumstances.
A tax preparer that fails to give a taxpayer a copy of his or her tax return may be subject
to a penalty under the Internal Revenue Code.
The intention to enter into a contract is judged by objective facts as interpreted by a
reasonable person.
The trustee is the person for whose benefit a trust is held.
A right can be assigned even if the assignment will significantly alter the risks or duties
of the obligor.
A Chapter 11 reorganization plan must provide for payment of tax claims over a
five-year period.
The Environmental Protection Agency can regulate a toxic substance that poses an
imminent hazard but cannot prohibit its use altogether.
A corporation whose shares are held by relatively few persons is a close corporation.
Self-defense is a defense to an allegation of both assault and battery.
A finder of abandoned property acquires title to it, and the title is good against the
whole world, including the original owner.
When a landlord sells leased premises to a third party, any existing leases terminate
automatically.
Goods must be of the highest quality possible to be merchantable.
Size alone does not determine whether a firm is a monopoly.
A bailee must exercise reasonable care in preserving the bailed property.