Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
Shortly after Brian started to work at Trevit, Inc., a co-worker, Ann, began asking him
out. Brian said no. Nevertheless, Ann persisted. One day Ann playfully, but
intentionally touched Brian "below the belt. Which statement is correct?
a. Ann defamed Brian.
b. Ann committed the tort of trespass.
c. Ann committed the tort of interference with a prospective advantage.
d. Ann committed the tort of battery.
Rodney was employed by Deluxe Discount Store. Rodney's manager directed him to
check the prices of dog food at Huge Savings Store. The manager of Huge Savings
Store saw Rodney writing down prices and asked him to leave. Rodney, fearful that he
would be fired by Deluxe, refused to leave. Rodney committed the tort of:
a. larceny.
b. trespass.
c. misrepresentation.
d. conversion.
Under most state statutes, a corporation may:
a. include in its charter a provision indemnifying directors unless they have engaged in
intentional misconduct or bad faith.
b. include in its charter a provision indemnifying directors under any circumstances in
the conduct of their duties for the corporation.
c. not include in its charter a provision indemnifying directors who engage in negligent
conduct of their duties.
d. not include in its charter any provisions regarding indemnification of directors.
Which of the following is NOT one of the four focused steps in reading a contract?
a. Pre-reading.
b. The first read.
c. Re-write with a lawyer.
d. The second read.
Liz and Jeff live in California, a state that recognizes community property. Jeff is a
machinist who makes $30,000 a year. Liz is the owner of a franchise where her
take-home profit is approximately $75,000 a year. Jeff and Liz purchased a house
during their marriage wherein Liz paid three-fourths of the purchase price and Jeff paid
one-fourth. Which of the following statements is correct with regard to Jeff and Liz?
a. Each owns one-half of the real property and other assets they acquire during the
marriage.
b. The community property rules allow Jeff and Liz to maintain separate ownership of
assets they each bring to the marriage or inherit.
c. Community property cannot be sold by Jeff or Liz without consent by the other.
d. All of the above are correct.
The intent required to commit a burglary would be:
a. general intent.
b. reckless conduct.
c. strict liability.
d. specific intent.
Joel is displeased with his sons lifestyle choices and, instead of dividing his estate, Joel
wants to leave all of his property to his daughter, Marie, when he dies. Joel:
a. may not leave everything to his daughter and nothing to his son. If Joel tries to do
this, his son can take a forced share of his fathers estate.
b. may disinherit his son, but he must indicate in the will his reason for doing so.
c. may disinherit his son for any reason as long as Joel indicates in the will that the son
was omitted on purpose.
d. may disinherit his son only if Joel leaves the son a nominal amount, such as $1.
Quick Supply House breached a contract with MegaCorp. The breach resulted in the
loss of a great deal of money to MegaCorp. The board of directors for MegaCorp vote
not to sue the supply house since it believes the legal costs would be more than it would
probably recover. If a group of shareholders wish to sue the supply house, this would:
a. be a type of direct lawsuit.
b. have to be a derivative lawsuit.
c. be a settlement lawsuit.
d. be an SEC lawsuit.
The accounting firm of Gray & Co. did accounting work for both Regional Bank and
Carter Electronics. Without Carters knowledge or approval, Gray & Co. discussed
Carters financial problems with Regional Bank. Gray & Co.:
a. breached a legal obligation to keep all client information confidential.
b. breached a moral, but not a legal, obligation of confidentiality.
c. did not breach any obligations to its clients.
d. acted properly because it was protecting its client, Regional Bank, from possibly
making an unwise loan to Carter Electronics.
Larry has the largest pizza business in the city. He learns that Henry is thinking of
opening a competing pizza and pasta delivery business. Larry gives Henry $25,000 to
not open his proposed business in the same city. Which statement is correct?
a. The contract is voidable at Larry's option.
b. The contract is void for lack of consideration.
c. The contract is illegal and void.
d. The contract is enforceable.
Kjell is the vice president of international sales for Oxtren, Inc, a U.S. company. To
secure a multimillion dollar contract for his company, Kjell paid a Mongolian
governmental officer $10,000. Kjell:
a. has violated the Foreign Corrupt Practices Act.
b. has not violated the Foreign Corrupt Practice Act because the payment was a grease
payment.
c. has not violated the Foreign Corrupt Practices Act because the government official
was from Mongolia, not the United States.
d. has not done anything illegal because Congress has not ratified the Convention of
Combatting Bribery of Foreign Public Officials in International Transactions.
Sarah works for a company that has offered a promotion if she was willing to relocate.
Sarah accepted the position and put her house on the market right away. She sold her
house the first day that the realtor held an open house. The buyer agreed to pay cash for
the full purchase price of the house. Sarah was thrilled, except that it meant that she
would have to put her furniture in storage until she found another house in her new city.
She entered into a written contract with Safe Storage, Inc. The agreement included a
clause excusing Safe Storage, Inc. from any liability for loss or damage, even if the loss
or damage resulted from Safe Storage's negligent acts. Because of Self Storage's
negligence, a fire destroyed the warehouse and all of its contents, including Sarah's
household goods and furniture. Sarah claims that Safe Storage, Inc. is liable for the full
value of the contents, which is approximately $10,000. Is Sarah correct?
a. Yes, because storage warehouses are strictly liable for loss or damage, regardless of
fault and regardless of exculpatory clauses.
b. No, because there was equal bargaining power between Sarah and Safe Storage, Inc.
c. Yes, because exculpatory clauses are illegal and never enforceable.
d. Probably, because often a court will reject an exculpatory clause against a bailor who
is a consumer.
Illegally obtained evidence is not permitted to be used at a criminal trial based upon the:
a. silver plate doctrine.
b. exclusionary rule
c. fair play doctrine.
d. Eighth Amendment.
In a derivative lawsuit, the named plaintiff:
a. is the corporation on whose behalf the lawsuit is filed.
b. is the particular class of shareholders primarily injured by the wrong.
c. consists of all the corporation's shareholders.
d. is the board of directors for the corporation.
If a court awards nominal damages it will generally:
a. award compensatory damages as well.
b. not make a determination as to whether there has been a breach of the contract.
c. award punitive damages for the intentional breach of the contract.
d. award a very small amount of money.
Gateway sold a big-screen TV and entertainment center to Iris for $2000 on credit. Iris
signed a promissory note and gave Gateway a security interest in the TV and
entertainment center. Gateway filed a financing statement in the appropriate public
office. When Iris defaulted on her monthly payments owing a balance of $1780,
Gateway's attorney made arrangements to have the TV and entertainment center
repossessed. The attorney then placed classified ads in the local newspaper to sell the
goods. The attorney's fees are $300, the repo company charged $150, and the
advertising costs are $50.
(A) If Iris chooses to redeem the property, how much must she pay to Gateway to
recover the property?
(B) If Iris does not redeem and the TV and entertainment center are sold for $1750,
how will the money be disbursed?
If the final registration statement contains a material misstatement or omission, the
purchaser of the security can recover damages from:
a. everyone who signed the registration statement..
b. the company's directors, but not the chief officers.
c. the experts who signed the registration statement, but not any other parties.
d. the issuer of the security, but not the companys directors or chief officers.
Wizardry Corporation's purpose clause in its charter states, "To operate a home-cleaning
service business." After a few years of successful operation, Wizardry is offered the
challenge of landscaping a neighboring business. If Wizardry accepts the offer, it would
be violating its charter under:
a. the de jure doctrine.
b. the de facto doctrine.
c. the ultra vires doctrine.
d. an estoppel theory.
A "fundamental change" in a corporation would be illustrated by:
a. E-prise, Inc. merging with Vitta Corporation.
b. the voluntary dissolution of Oldtry, Inc.
c. the amendment to bylaws of Chaney Company.
d. All of the above.
Graham, an adult, purchases a car from a minor, and subsequently sells it to Harlow,
another adult. Harlow paid full value for the car and had no reason to know that
Graham had purchased the car from a minor. Which of the following best describes this
situation?
a. Graham had good title and Harlow gets good title.
b. Graham had good title and Harlow gets a voidable title.
c. Graham had voidable title and Harlow gets good title.
d. Graham had void title and Harlow gets void title.
First Bank loaned $400,000 to Thomas, taking a security interest in his yacht. Thomas
defaulted on the loan and First Bank repossessed the boat. First Bank sold the yacht at a
public sale. The sale yielded $50,000 more than the debt. First Bank:
a. must pay Thomas the $50,000.
b. is entitled keep the $50,000.
c. must share the $50,000 equally with Thomas.
d. must pay the surplus to the Secretary of State.
All but which of the following may be used as collateral in a secured transaction under
UCC Revised Article 9?
a. Bank deposit accounts.
b. Personal injury tort claims of individuals.
c. Tort claims of a corporation.
d. A computer program if, by purchasing a computer, the buyer of the computer
acquires the right to use that embedded program.
e. Both b and c.
Vivian goes to an auction and sees a rare antique lamp that is an identical match to one
she already has. At the proper time she bids on the lamp and is the highest bidder. Even
though she is the highest bidder, the auctioneer refuses to accept her bid and withdraws
the lamp from the auction. Can the auctioneer do that?
a. Unless otherwise stated, the auctioneer had the right to withdraw the item before the
fall of the hammer.
b. Generally, the auctioneer must sell to the highest bidder. Vivian will get the lamp.
c. Generally, the auctioneer is the offeror and the bidders are the offerees so there is a
contract and Vivian will get the lamp.
d. Most auctions are without reserve and therefore the auctioneer cannot withdraw the
lamp.
Anne and Mike were winding up their partnership. Mike was approached by a person
who wanted the partnership to do some work for him. Mike agreed that the partnership
would do the work. Generally speaking, in such a situation:
a. Anne is not liable since the partnership was in the winding up phase.
b. Anne is not liable since she did not consent to the work.
c. Anne is not liable since Mike's conduct was wrongful.
d. Anne is liable unless she filed a statement of dissolution with the Secretary of State
within 90 days of when Mike entered the contract.
If a company has violated antitrust laws:
a. the Justice Department can initiate only noncriminal charges against the violator.
b. the Federal Trade Commission may file criminal proceedings against the violator.
c. any private person or company that has been harmed by the violator can file a lawsuit
to recover damages.
d. All the above.
Which of the following would be notice of an overdue instrument?
a. Taking a demand instrument after a request for payment is made.
b. Taking an instrument one day after the due date.
c. Taking a check 91 days after its issue date.
d. All of the above illustrate overdue instruments.
Landscaper Lottie used her machinery, employee labor, and her expertise to landscape
Opal's new guest home. Opal fails to pay for the landscaping because she has run out of
money. Lottie files a lien against the real property. This lien is called:
a. an artisan's lien; her landscape design is a work of art.
b. a landlord's lien; Opal is planning to rent the guest house to a tenant.
c. a mechanic's lien; it was created by improving real property.
d. a purchase money security interest.
A defense to a civil action brought under Section 10(b) and Rule 10b-5 of the 1934 Act
would be:
a. that the statute of frauds was not observed.
b. that the seller of the securities was not in privity of contract with the plaintiffs.
c. that the sellers did not intentionally or recklessly make a false representation.
d. All of the above.
Leonna orders five table settings of china from Elite China. Each set includes a dinner
plate, cup & saucer, bowl, and dessert plate. The china is sold only in sets. When the
delivery arrives, Leonna discovers that Elite China sent the wrong pattern. Leonna
immediately calls Elite China and is instructed to send the shipment back. While
repacking the shipment, Leonna changes her mind and decides to keep the cups and
saucers. She returns everything else. Can she do this?
The bank who lends money in exchange for a mortgage on the borrower's house is
considered to be the:
a. mortgagee.
b. mortgagor.
c. profitor.
d. profitee.
Dick offers to sell Jane his 1955 Thunderbird convertible. Before Jane can accept the
offer, lightning strikes the car and it is totally destroyed. Which of the following is true?
a. Jane can still accept the offer and John must find a 1955 Thunderbird to sell.
b. The offer is terminated by law.
c. Dick can still revoke his offer so long as he does so before Jane accepts.
d. Jane can still accept the offer. She will be entitled to the insurance proceeds.
Mulligan Domestics Co. breached a contract by refusing to accept its order for 60 bolts
of fabric from Wellington Mills, although the fabric met the contract specifications.
Wellington:
a. has at least four remedies under the UCC.
b. may resell the goods to someone else and, if it sues Mulligan, Wellington will be
assured of being awarded the difference between the original contract price with
Mulligan and the price received from the resale.
c. may choose not to resell the fabric and settle for the difference between the contract
price and the market value.
d. would be awarded consequential damages by most courts.
In the Fears v. Wilhelmina Model Agency, Inc. case, the court held:
a. parallel business behavior conclusively establishes agreement sufficient to constitute
a Sherman Act offense.
b. in this case the defendants did not possess a common rational motive to conspire.
c. plaintiffs offering parallel conduct as evidence of an antitrust conspiracy must
demonstrate additional circumstances in order to infer a conspiracy.
d. plaintiffs did not need to demonstrate "plus factors in this case since the defendants
conduct was egregious.
If Rudy offers Oscar $200 for his laptop valued at $600 and Oscar agrees, a court will
probably:
a. set aside the agreement as being unfair.
b. set aside the agreement because the consideration is inadequate.
c. not set aside the agreement based on the adequacy of the consideration.
d. not set aside the agreement because of the UCC.
The Rameys are selling their home. They did not set forth in the sales agreement
whether the washer and dryer, the draperies, and a cherry corner cabinet which was in
the dining room were to be included in the sale or whether they were planning to take
these items with them. The buyers are claiming these items are fixtures and should stay
with the house. The Rameys are claiming they are movable goods and they should not
be part of the real estate which was sold. Define "fixtures, identify the tests used to
determine whether an item is a fixture, and explain whether you think each of the
contested items is a fixture and why or why not.
Since 1900, the number of workplace injuries and deaths has decreased, partly due to
the OSHA, even though the size of the workforce has increased fivefold.
Ed wants to give Howard his old car, but Howard says he doesnt want it. Howard later
reconsiders and tells Ed he does want the car. His previous repudiation means there is
no gift, and Howard has no rights in the car.
To recover for an alleged violation of SEC Rule 10(b)-5, a plaintiff is required to prove
reliance on a misstatement or omission relative to the purchase of the security.
Actus reus means the "guilty act" and is one element the prosecution must prove in a
criminal case.
Tess, a tenant, moves from her apartment in breach of the lease agreement. The
landlord, Lenny, may not attempt to rent the apartment until the date of the lease
expiration, and so has no recourse to minimize damages.
The UCC is federal legislation enacted by Congress.
Rest Well Hotel orally ordered 1,000 blankets monogrammed with its initials, RWH,
from TriColor Textiles. TriColor had just finished monogramming the blankets when
Rest Well called and canceled the order. TriColor will be able to enforce the agreement
even though there was no writing.
A wholesaler of coffee notifies a retailer that it cannot fulfill its contractual obligation to
deliver 1,000 pounds of coffee at the agreed upon price of $2.00 per pound next month
because of recent price increases in coffee. The retailer may treat the wholesaler as
having breached the contract and sue for damages even though the wholesaler's
performance is not due until next month.
The Equal Credit Opportunity Act makes it illegal for a lender to discriminate against a
potential borrower because of race, national origin, religion, or sex, but it is permissible
to treat a borrower differently if he or she is on welfare.
The FTC may consider an act unfair if it simply violates public policy.
Discuss the purpose of an injunction and how the two types of injunctions covered in
the textbook are used.
Unethical behavior is a bar to financial success.
"Bait and switch" tactics are not a violation of FTC rules if the consumer is given a
choice of which product to buy.
Identify and briefly discuss the management rights and duties of a partner.
