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Orin owns Pilots Landing Office Park. His ownership rights include the right to sell or
give away the property without restriction, as well as the right to commit waste, if she
chooses. Orins ownership interest is
a. a fee simple absolute.
b. a leasehold estate.
c. a life estate.
d. the power of eminent domain.
USA Oil Corporation signs an instrument that states it is being executed "as per contract
for a purchase of 4,000 barrels of oil dated May This instrument is
a. negotiable.
b. nonnegotiable, because information about the sale must be obtained from another
source.
c. nonnegotiable, because it states an express condition to payment.
d. nonnegotiable, because the terms of the contract are not clear on the face of the
instrument.
Gabe owns Hazard Landfill, a toxic waste dump that must be cleaned up. Ethical
questions arise, with respect to the clean up, because
a. everyone knows the cost.
b. no one knows the cost.
c. only Gabe knows the cost.
d. only the Environmental Protection Agency knows the cost.
Caffeine Café, Inc., files its articles of incorporation with the appropriate government
agency. Least likely to appear in the articles is the name of
a. each of the corporations incorporators.
b. each of the corporations shareholders.
c. the corporation.
d. the corporations initial registered agent.
Congress leaves it to the Bureau of Prisons to oversee the promulgation of detailed
regulations in areas under the agencys jurisdiction. This is
a. divine right.
b. the delegation of legislative powers.
c. the gap-filling power.
d. unconstitutional conduct.
Inferior Company sells products that are poorly made. Jock, who has never bought an
Inferior product, files a suit against Inferior, alleging that its products are defective. The
firms best ground for dismissal of the suit is that Jock does not have
a. certiorari.
b. jurisdiction.
c. standing.
d. sufficient minimum contacts.
Fact Pattern 15-A2 )
Radford and Serenity sign a written contract for the sale of Rads Coffee & Bagels
business to Serenity. The parties intend their written contract to be a final statement of
the terms of their agreement.
The writing that Radford and Serenity signed is
a. a completely integrated contract.
b. a divisibly integrated contract.
c. a partially integrated contract.
d. a severably integrated contract.
A Commercial Construction, Inc. (CCI), contracts to build a store for Ritas Pizza
Company with Ritas payment due on June On June 1, Ritas bank is closed, and for this
reason, Ritas claims it cannot pay on time. In this situation
a. CCI is in breach of contract.
b. Ritas is in breach of contract.
c. the contract is discharged.
d. the contract is suspended.
Rollo promises to perform, for a price, shoe repair services in affiliation with Togs n
Things, a clothing store. To support a contract, the consideration exchanged by the
parties must be
a. adequately considerate.
b. equally valuable.
c. legally sufficient.
d. wisely priced.
The U.S. Patent and Trademark Office (USPTO) wants to review certain records of
Verity Corporation. The USPTO can legitimately gain access to the records through
a. agency coercion.
b. infiltrating Veritys computers without the firms knowledge.
c. public comment.
d. Veritys consent.
Regular Insurance Company violates a state statute when selling an insurance policy to
Simone. As a member of the class of persons protected by the state statute, Simone can
a. do nothing with respect to the contract.
b. enforce the contract or recover the payment.
c. only enforce the contract.
d. only recover the payment.
Far Trade Company and Global Shipping. Inc., have their dispute resolved in
arbitration. The arbitrator meets with Fars representative to discuss the dispute outside
the presence of Globals representative, before determining the award. If this meeting
substantially prejudiced Globals rights, a court will most likely
a. do nothing.
b. review the merits of the dispute.
c. review the sufficiency of the evidence.
d. set aside the award.
Fact Pattern 37-1B
Brad, Carlos, and Dora are general partners in Eastside Physicians, a medical clinic.
Their agreement states it is a breach of the agreement for any partner to assign his or
her interest to a creditor without the consent of the other partners.
Refer to Fact Pattern 37-1B. Brad, Carlos, and Dora decide to admit Faisal as a new
partner in Eastside Physicians. Faisals liability for partnership debts incurred before his
admission is
a. limited to his capital contribution to the firm.
b. limited to his personal assets.
c. nothing.
d. unlimited.
Brents Barber Shop hires only independent contractors such as Christi as workers. This
hiring practice allows the employer to avoid all laws governing
a. employment relationships.
b. workplace safety.
c. business liability.
d. tax obligations.
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.
Emily checks her luggage at Flyaway Airliness ticket counter before boarding her flight
to Houston. Subject to a bailment is
a. Emily.
b. Emilys luggage.
c. Emilys ticketed seat on the flight.
d. none of the choices.
Fact Pattern 40-1A
Ruben is a shareholder of Speed Bikes Company (SBC). When the directors fail to
undertake an action to redress a wrong suffered by SBC, Ruben files a suit on the firms
behalf.
Refer to Fact Pattern 40-1A. Rubens suit is a shareholders
a. indemnification suit.
b. derivative suit.
c. proxy suit.
d. preemptive suit.
After notice-and-comment rulemaking, the U.S. Bureau of Land Management (BLM)
issues a new rule and applies it to Clearcut Timber Company. Clearcut appeals the
application to a federal court. The court will most likely defer to the BLMs
interpretation of
a. the facts and the law.
b. the agencys authority.
c. procedural requirements.
d. the Constitution.
Bild-It-Rite Corporation uses independent contractors. Bild-It-Rite can
a. be sued by a contractor for a violation of discrimination laws.
b. exercise little control over how the contractors perform.
c. obtain workers compensation insurance for the contractors.
d. withhold income taxes from payments to the contractors.
Midwest Agri-Products Corporation offers to sell its sugar substitute to Nice Candies,
Inc., only if Nice Candies agrees to buy all the corn it needs from Midwest
Agri-Products, even though there are other corn sellers from whom Nice Candies could
buy. This is
a. an exclusive-dealing contract.
b. a tying arrangement.
c. price discrimination.
d. price fixing.
Sam, an engineer, supervises the construction of a new bridge. When the bridge col-
lapses due to faulty construction, Sam is sued by those injured in the collapse. As a
professional, Sam is held to the same standard of care as
a. ordinary persons.
b. other engineers.
c. other professionals, including doctors, dentists, and lawyers.
d. those injured in the collapse of the bridge.
Shingle & Tile Roofing Contractor, LLC, obtains an insurance policy against liability
for injuries or losses sustained by employees during the course of their employment.
The policy covers claims not covered by workers compensation insurance. This is
a. casualty insurance.
b. fidelity or guaranty insurance.
c. key-person life insurance.
d. employers liability insurance.
Ester is a lighting technician who hires out on a per-project basis to film and television
production companies, as well as theatres and other venues that stage dramatic and
musical performances. In this capacity, Ester is
a. an agent.
b. an employee.
c. an independent contractor.
d. a principal.
Truman applies for a job at Skylight Canopy Corporation for which he is well qualified,
but for which he is rejected. Skylight continues to seek applicants and eventually fills
the position with a person who is not a member of a minority. Truman is most likely to
succeed in a suit against Skylight for discrimination if he is a member of
a. a protected class.
b. a majority group.
c. an employers association.
d. a union.
Deloress Restaurante borrows $100,000 at 6 percent interest from El Credito y Dinero
Company and signs a promissory note for that amount. El Credito changes the amount
of the note to $120,000 and increases the rate to 8 percent. Deloress best defense
against payment on the note is
a. breach of warranty.
b. failure of consideration.
c. material alteration.
d. nondelivery of an instrument.
Based on Nans conduct, Odel reasonably believes that Poppy has the authority to act on
Nans behalf even though Poppy does not have the actual authority to do so. In this
circumstance, Poppy has
a. apparent authority.
b. express authority.
c. implied authority.
d. no authority.
Congresswoman Jones and other politicians want to prohibit the import of certain
agricultural products that pose a danger to domestic crops. With respect to these
products import, Congress can
a. do nothing.
b. impose quotas, but not tariffs.
c. impose tariffs, but not quotas.
d. prohibit the imports.
In making business decisions, Glenda, personnel manager for HVAC Maintenance, Inc.,
applies his belief that all persons have fundamental rights. This is
a. a religious rule.
b. the categorical imperative.
c. the principle of rights.
d. utilitarianism.
On Monday, Neil tells Outdoor Landscaping, Inc., that he will pay Outdoor $500 if a
variety of tasks are completed by Friday. On Wednesday, when Outdoor is more than
half done with the work, Neil says that he has changed his mind. Under the present-day
view, these parties had
a. an expired contract when Neil said that he had changed his mind.
b. a quasi contract when Neil said that he would pay for certain work.
c. a unilateral contract as soon as Outdoor began to perform.
d. no contract.
Fact Pattern 15-A1
Macro Marketing, Inc., and National Food Corporation (NFC) discuss the terms of a
contract. Macro then faxes NFC a memo on Macros letterhead that summarizes the
items on which they agreed, including a two-year term. Macro begins to perform, but
NFC refuses to pay. Macro files a suit to collect. NFC claims that there is no contract.
The transaction between Macro and NFC falls within the Statute of Frauds
a. collateral-promise provision.
b. one-year rule.
c. sales-of-goods stipulation.
d. secondary-contracts section.
Precise GPS Companys ad states that its product is "the finest that money can buy.
Because of this ad, the Federal Trade Commission is most likely to issue
a. a cease-and-desist order.
b. a counteradvertising order.
c. a multiple product order.
d. none of the choices.
Common law is the best and only source of legal authority.
The United States Supreme Court has original jurisdiction in rare instances.
State limited liability company statutes are uniform.
If the tender or delivery of goods is so nonconforming that the lessee has the right to
reject them, the risk of loss remains with the lessor until cure or acceptance.
Malicious prosecution can occur if a party initiates a lawsuit out of malice.
An agent has a duty to follow all clearly stated instructions of the principal, lawful or
not.
Fungible goods are goods that can be delivered only by transport.
Business networks do not help to identify a knowledgeable attorney.
Many agency rules require compliance reporting from regulated entities, and such a
report can not trigger an enforcement investigation.
The state governments retain all powers not specifically delegated to the federal
government.
Max plots a new Batman adventure and carefully and skillfully imitates the art of DC
Comics to create an authentic-looking Batman comic. Max is not affiliated with the
owners of the copyright to Batman. Can Max publish the comic without infringing on
the owners copyright?
Patent infringement occurs only if an invention is copied in its entirety.
Good Health & Life Insurance Corporation suffers a security breach in its computer
network. Before the company discovers the breach, the perpetrator obtains corporate
financial records and other confidential data, including marketing plans. Is this a crime?
If so, what are its elements? What steps might Good Health & Life take to ensure that
going forward only authorized users access the data on its computers? Whose
effortsthose of the federal government or Good Health & Lifeare most important in
securing the companys computer infrastructure and why?
The parties to a sales or lease contract can vary their respective rights and obligations
by contractual agreement.
An obligation is enforceable only if it is supported by past consideration.
Whether a contracts limitation-of-liability clause will be enforced depends on the type
of breach that the clause excuses.
Incredible eSales Corporation is a new Internet business. How can Incredible eSales
obtain capital to finance its operations?
When the words in a contract have more than one meaning, they are cut from the
contract.
College Copy Shop (CCS) compiles, copies, and sells reading materials to students on
the instructions of their professors, who indicate which parts of which publications
should be included. These include texts published by Deep Topics, Inc. CCS does not
obtain the permission of Deep Topics, or any of the other original publishers of the
copied materials, and does not pay royalties on the sales of the compilations. Deep
Topics and others file a suit against CCS, alleging infringement of the plaintiffs
intellectual property rights. Which type of intellectual property is involved in this
situation? What is CCSs likely defense? How is a court most likely to rule? Explain.
