Intoxicated, Clio agrees to sell her restaurant, Diners Café, to Evan for half of its real
market value. This deal is most likely void if
a. Clio appeared intoxicated to Evan.
b. Clio disaffirms the contract after becoming sober.
c. Clio was so intoxicated as to have no memory of the deal.
d. Evan fraudulently induced Clio to become intoxicated.
Ians mortgage debt to Jeff is past due. Jeff brings a legal action against Ian to collect the
debt. Jeff asks the court to order the sale of the mortgaged property and the payment of
a portion of the proceeds to Jeff. This is a request for
a. a deficiency judgment.
b. a foreclosure.
c. a right of reimbursement.
d. redemption.
Orin claims that a Pennsylvania state statute infringes on his ‘substantive due process
rights. This claim focuses on
a. procedures used to make decisions to take life, liberty, or property.
b. the content of the statute.
c. the similarity of the treatment of similarly situated individuals.
d. the steps to be taken to protect Orins privacy.
Lora files a suit in Michigan against Ned over the ownership of a boat docked in a
Michigan harbor. Lora and Ned are residents of Ohio. Ned could ask for a change of
venue on the ground that Ohio
a. has a sufficient stake in the matter.
b. has jurisdiction.
c. has sufficient minimum contacts with the parties.
d. is a more convenient location to hold the trial.
In Export Co. v. Imports, Inc., there is no precedent on which the court can base a
decision. The court can consider
a. neither public policy nor social customs and values.
b. public policy only.
c. public policy or social customs and values.
d. social customs and values only.
Steele Toole Companys decision makers view a particular risk in the use of Steeles
product as open and obvious. Continuing to market the product without telling
consumers of the risk could be justified from a perspective of
a. duty-based ethics.
b. Kantian ethics.
c. rights-based ethics.
d. utilitarian ethics.
Research Statistics Corporation uses a merit system to pay its employees according to
their job performance. Suki, a female, and Troy, a male, are Research employees with
comparable jobs. Due to superior performance, Suki is paid more than Troy. This is
a. disparate-impact discrimination.
b. gender discrimination.
c. not discrimination.
d. reverse discrimination.
Omni Corporation is a Pennsylvania-based firm that does business throughout the
United States. With respect to this circumstance, the UCC has been adopted by, and
applies in,
a. a few of the states.
b. all of the states, in whole or in part.
c. half of the states.
d. none of the states, to date.
Excel Corporation conditions shipments of its products to Federated Stores, Inc., on
Federateds agreement not to buy products from Great Goods Company, Excels
competitor. This is
a. an exclusive-dealing contract.
b. a tying arrangement.
c. price discrimination.
d. a unilateral refusal to deal.
North Mining Company and South Excavation Company agree to abide by the
decisions of East Coast Financial Corporation as to their respective levels of
production, markets, and prices, effectively reducing competition and increasing profits.
This is most likely
a. a common, legal, time-honored type of business arrangement.
b. an illegal restraint on trade.
c. an innovative, legally efficient approach to doing business.
d. an outdated, but legal business trust.
Steve steals one of Tricias checks and forges her signature. Tricias bank, Unity Bank,
pays the check. Tricia can recover from
a. Steve, but not Unity Bank.
b. Unity Bank, which cannot recover from Steve.
c. Unity Bank, which can recover from Steve.
d. no one.
In Las Vegas, Nevada, Kurt places a bet on a football game with a bookmaker via a
Web site based in Las Vegas. In Cleveland, Ohio, Dorothy places a bet on the same
game with a bookmaker via a Web site based in Cleveland. Gambling is regulated in
a. all states.
b. only a few states.
c. no state.
d. Ohio only.
Trudy forges Umas signature on a check “payable to the order of Trudy drawn on Umas
account in Verity Bank. Most likely, if the bank pays the check
a. the Federal Reserve will reimburse all parties for their costs.
b. the loss will be apportioned among all of Veritys customers.
c. Uma will be liable for the amount.
d. Verity will have to recredit Umas account.
Lynn files a suit against Karl. Karl denies Lynns charges and sets forth his own claim
that Lynn breached their contract and owes Karl money for the breach. This is
a. a counterclaim.
b. a crossclaim.
c. an affirmative defense.
d. an irrelevant response.
Nate tells Opal, “I might sell the skis that I bought last fall since I havent used them and
the skiing season is almost over. This is
a. an acceptance of an offer.
b. an invitation to accept an offer.
c. an offer.
d. a statement of future intent.
Cody believes that Delta Corporation has discriminated against him on the basis of
gender. Cody files a suit against Delta under Title VII. To establish a prima facie case of
employment discrimination, Cody must show that
a. Cody is a member of a protected class.
b. Delta has no legal defenses against the claim.
c. discriminatory intent motivated Deltas act.
d. other firms in Deltas industry have committed discriminatory acts.
On behalf of the rock group Uno, their manager Thalia agrees to a performance in
Seaside Amphitheatre on July 4. Rex, acting for Seaside Productions, sends a written
copy of the agreement to Thalia to be signed. Typically, businesspersons put their
contracts in writing to
a. ensure proof of the contracts existence.
b. create substance from form.
c. obtain a check or other negotiable instrument.
d. practice their “letters of credit.
Uri borrows Veras boat to enjoy for a weekend. Uri negligently runs the boat aground
near Waters Edge Beach, damaging the hull. Liable for the cost of repairing the boat is
a. Uri and Vera equally.
b. Uri only.
c. Vera only.
d. the owner of Waters Edge Beach.
Pat, the manager of Quik Mart, deposits the stores 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.
Farm Equip, Inc., makes farming machinery. Gail discovers that her Farm Equip tractor
is defective and sues the maker for product liability based on negligence. To win, Gail
must show that
a. Farm Equip sold the tractor to Gail.
b. Gail knew and appreciated the risk caused by the defect.
c. Gail suffered an injury caused by the defect.
d. the “defect was a commonly known danger.
Dino hires Eve to perform at Dinos Club, but Eve later breaches the agreement to
accept a higher-paying job at First Star Arena. Dino files a suit against Eve. The court
will most likely
a. award damages to Dino.
b. cancel Dino and Eves contract.
c. order Eve to perform the contract.
d. reform Dino and Eves contract.
The Constitution provides that no person shall be deprived of “life, liberty, or property
without due process of law. Under this clause, “persons include
a. animals and other “beings in nature.
b. buildings and other “manmade creations.
c. corporations and other “legal persons.
d. none of the choices.
Master Manufacturing Corporation has exclusive control over the market for its
product. Under the Sherman Act, this is
a. a per se violation.
b. a violation if it acquired this power through “business acumen.
c. a violation if it acquired this power through “anticompetitive means.
d. not a violation.
National Consumer Goods Corporation and Paula Purchaser agree to resolve their
dispute in arbitration. The arbitrators decision is called
a. a conclusion of law.
b. a finding of fact.
c. an award.
d. a verdict.
Tundi is a partner in WooHoo! Amusement, a new partnership. A WooHoo! debt comes
due. Tundi is
a. not liable for the debt.
b. only liable for the debt up to the amount of her capital contribution.
c. personally liable only to the extent other partners do not want to pay.
d. personally liable to the full extent of the debt.
Qang and other foreign citizens allege human rights violations committed overseas by
the government of Burma on behalf of Railway Construction Company, a U.S. firm. To
seek redress for their injuries in a U.S. court, these citizens can
a. allege antitrust injuries under the Sherman Act.
b. bring civil suits under the Alien Tort Claims Act.
c. file criminal complaints under Title VII of the Civil Rights Act.
d. do nothing.
Fact Pattern 8-2
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 8-2. If, as Brad claims, the consideration in this problem is
inadequate, it may indicate a lack of
a. accord in Brads satisfaction with the value of the deal.
b. bargained-for exchange or mutual assent.
c. flexibility on the part of College Credit to accommodate Brads needs.
d. “heft, ‘substance, or “weight in the terms of the contract.
Dina and Elle agree that Elle can satisfy a preexisting debt owed to Dina by paying the
money directly to Fava. The designation of this contract as a third party beneficiary
contract is determined by the intent to benefit
a. Dina, Elle, and Fava.
b. Dina only.
c. Elle only.
d. Fava only.
Fact Pattern 21-2
Sid, a director of Tech Software Company, learns that a Tech engineer has developed a
new, exciting video game. Sid buys Tech stock and tells his friend Uri, who also buys
Tech stock. When the new game is released three weeks later, Sid and Uri sell their
stock for a big profit.
Refer to Fact Pattern 21-2. Under SEC Rule l0b-5, Sid would not be liable if he had
waited to buy Tech stock until
a. after Sid told Uri of the new game.
b. after Uri bought Tech stock.
c. after the public release of the game.
d. just before the game was released.
Vela and other farmers in Washington County form a business organization to provide,
without profit, an economic service to its members. This is
a. a business trust.
b. a cooperative.
c. a corporation.
d. a joint stock company.
Jim organized, and owns and operates, Jims Landscaping Service in the simplest form
of business organization. This is
a. a corporation.
b. a limited liability company.
c. a partnership.
d. a sole proprietorship.
An oral promise that an employer makes to employees regarding discharge policy may
be considered part of an implied contract.
A finder acquires title to lost property good against the whole world, including the
original owner.
The owners of an incorporated cooperative are personally liable for its obligations.
A state court can exercise jurisdiction over any property within the boundaries of the
state regardless of the property owners location.
Willful violations of the Sarbanes-Oxley Act of 2002 may be subject to criminal
prosecution.
To create an enforceable security interest, the secured party must give value.
Compensatory damages are only available for victims of intentional employment dis-
crimination.
A license permits the use of intellectual property for certain limited purposes.
A foreign citizen can bring a civil suit in a U.S. court for a violation of a treaty of the
United States.
Money laundering includes making “dirty money “clean of legitimate businesses.
A payee whose name is misspelled on an instrument cannot indorse the instrument.
The concept of a floating lien does not apply to a shifting stock of goods.
Criminal liability depends on the performance of a prohibited act.
A business firm may have to comply with the laws of any jurisdiction in which it
actively targets customers.
An Internet service provider cannot be held liable for disseminating defamatory
remarks under any circumstances.
Resolving whether a promise should be enforced is the essence of contract law.
An employer can require an employee to take a lie-detector test when investigating
losses attributable to theft.
An independent contractor is an employer who controls his or her agents performance.