Bea is a shareholder of Candy Confections Corporation. The right to inspect corporate
books and records is
a. held by Bea only if she is a director.
b. held by Bea, without restrictions.
c. held by Bea, with some restrictions.
d. not held by Bea.
Gina induces Hugh to enter into a contract for the purchase of a condominium about
which Gina knowingly misrepresents a number of material features. When Hugh
discovers the truth, he can
a. not rescind the contract.
b. rescind the contract on the basis of fraud.
c. rescind the contract on the basis of mistake.
d. rescind the contract on the basis of undue influence.
Dom, an EZ Baked Goods salesperson, follows Flora, a salesperson for Goody Pastries,
Inc., as she attempts to make sales to food stores. Dom solicits each of Floras
customers. Dom is most likely liable for wrongful interference with
a. a bargaining relationship.
b. a business relationship.
c. a contractual relationship.
d. a customer relationship.
Ginny obtains a health-insurance policy for her family from Hope Insurance Company.
The policy includes an incontestability clause. Under such a clause, after a policy has
been in force for a specified period or time, such as two or three years
a. Ginny cannot contest Hopes insurable interest.
b. Ginny cannot contest Hopes refusal to pay a claim under the policy.
c. Hope cannot contest Ginnys eligibility for continued coverage.
d. Hope cannot contest Ginnys statements in the application.
Twyla buys a bicycle from U-Pik-It Bike Store, which agrees to keep the bike for Twyla
until she picks it up. Before Twyla gets the bike, a fire destroys the store and the bike.
The loss is suffered by
a. neither Twyla nor U-Pik-It
b. Twyla and U-Pik-It.
c. Twyla only.
d. U-Pik-It only.
Pola files a petition in bankruptcy. Polas non-dischargeable debts include
a. domestic-support obligations.
b. student loans if payment would impose undue hardship.
c. unpaid loans to finance home repairs.
d. unsecured credit-card debt.
Holly obtains an insurance policy from Inviolable Insurance Corporation (IIC). IIC may
cancel, or refuse to renew, the policy because of
a. Hollys appearance as a witness against IIC.
b. Hollys national origin.
c. Hollys race.
d. none of the choices.
Wheels & Deals Corporation is subject to the Truth-in-Lending Act, which concerns
a. the credit-worthiness of certain financial institutions and lenders.
b. the disclosure of credit terms in certain transactions.
c. the limits on certain types of credit that a creditor may grant.
d. the limits on certain types of debt that a consumer can accrue.
Greta is the only female employee in the maintenance department of Hydraulics Inc.
Gretas supervisor and co-workers tease and play tricks on her so relentlessly that she
feels compelled to quit. This is
a. a constructive discharge on the basis of gender discrimination.
b. a harassing discharge on the basis of treatment discrimination.
c. a voluntary discharge on the basis of impact discrimination.
d. not a discharge or discrimination.
Rally Corporation enters into a contract to sell ski gear to SnoSportz Company, which
sells a pair of the skis to Tyra, a consumer, who later sells them to Uli, another
consumer. Article 2 of the UCC applies to the sales transactions between
a. all of the buyers and sellers.
b. Rally and SnoSportz only.
c. SnoSportz and Tyra only.
d. Tyra and Uli only.
Rona is Stus administrative assistant and both work for TriCounty Labor Inc. Stu tells
Rona that for sexual favors, he will give her an excellent performance review and
recommend a raise. This is
a. harassment on the basis of sexual orientation.
b. hostile-environment harassment.
c. not harassment.
d. quid pro quo harassment.
Jean sends e-mail to Irwin promising a percentage of the amount in an African bank
account for assistance in transferring the funds to a U.S. bank account. Irwin forwards
his account number, but the funds are never sent. Instead, Jean quickly withdraws the
funds in Irwins account. This is
a. online greed but not fraud.
b. an online “fool-me-once, shame on you occurrence but not fraud.
c. online gambling but not fraud.
d. online fraud.
Mary claims that a Nebraska state statute infringes on her “procedural due process
rights. This claim focuses on
a. procedures used in making 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 Marys privacy.
Office Equipment Leasing, Inc. (OEL), agrees to lease five computer workstations to
Product Promotion Corporation (PPC). Before any interest in the workstations can pass
from OEL to PPC, they must be
a. in existence and identified as the goods in the contract.
b. in existence only.
c. identified as the specific goods designated in the contract only.
d. none of the choices.
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.
According to the court in Case 16.1, Maple Farms, Inc. v. City School District of
Elmira, the defense of commercial impracticability will not excuse the performance of a
contractual obligation when there is an increase in the sellers costs while the contract is
in force
a. unless the increase in the sellers costs is substantial.
b. under any circumstances.
c. unless the increase in the sellers costs makes it impossible for the seller to perform
without losing money.
d. unless the increase in the sellers costs was not foreseeable at the time the contract
was formed.
Gas Up, Inc., designs, makes, and sells a fuel injection system that copies Hybrid
Corporations design without Hybrids permission. This is most likely
a. copyright infringement.
b. patent infringement.
c. trademark infringement.
d. a theft of trade secrets.
Iggy hires Joy to act as his agent to purchase Kup-a-Koffee Kompany. Iggy tells Joy to
reveal only that she is buying the firm on behalf of a third party, without telling
Kup-a-Koffees seller who that third party is. Iggy is
a. a disclosed principal.
b. an implied principal.
c. an undisclosed principal.
d. a partially disclosed principal.
Like other manufacturers and sellers, Happy Household Products Company packages
its products with labels. Under federal law, such labels must be
a. accurate and use easily understood words.
b. bright and feature eye-catching colors.
c. graphically distinctive and well-designed.
d. interesting and revealing to the average consumer.
Flux Corporation is a public company whose shares are traded in the public securities
markets. Under the Sarbanes-Oxley Act of 2002, Flux is subject to the direct corporate
governance requirements of
a. any other public company with which Flux exchanges shares.
b. any state in which Flux does business.
c. the federal government.
d. the state in which Flux incorporated.
Beachtime Pools, Inc., agrees to build a swimming pool for Candy, but fails to build it
according to the contract specifications. Candy hires Do-We Fix-It Company to finish
the project. Candy may recover from Beachtime
a. the contract price less costs of materials and labor.
b. the contract price.
c. the costs needed to complete construction.
d. profits plus the costs incurred up to the time of the breach.
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, To be negotiable, this instrument must include the signature of
a. a non-party witness.
b. Tuna or Tunas realtor.
c. Uri.
d. Veritys chief financial officer.
Sabin and Tyler agree while talking on the phone to form a partnership. Their
partnership agreement is legally binding
a. only if a third person knows of the agreement.
b. only if the agreement is reduced to writing.
c. only if the parties exchange valid consideration.
d. without more.
Tori files a suit against the state of Utah, claiming that a Utah state law violates the
commerce clause. The court will agree if the statute
a. impinges on citizens private activities.
b. imposes a substantial burden on interstate commerce.
c. imposes a substantial burden on the state.
d. promotes the public order, health, safety, morals, or general welfare.
Ceramic Tile Company designs and makes floor tiles. In a product liability suit based
on negligence, Ceramic could be liable for violating its duty of care with respect to
a. neither the design nor the making of the tiles.
b. the design and the making of the tiles.
c. the design of the tiles only.
d. the making of the tiles only.
Home Delivery Corporation and Interstate Transport, Inc., sign an agreement that
provides for the payment of “$1,000 by whichever party commits a material breach of
the contract that creates damages difficult to estimate but approximately $1,000. This is
a. a liquidated damages clause.
b. a mitigation of damages clause.
c. a nominal damages clause.
d. a penalty clause.
Instead of setting up a business to market her own products, Krissy considers entering
into a distributorship franchise with Little Breweries Corporation. This involves the
transfer of
a. a license.
b. a trade name.
c. the formula to make a certain product.
d. the ownership of the business.
Lew, a member of a protected class, applies for a job with Mit-E Construction
Company, but fails Mit-Es employment test and is not hired. Lew believes that the test
has an unintentionally discriminatory effect. If so, this is
a. desperate-measure discrimination.
b. disparate-impact discrimination.
c. disparate-treatment discrimination.
d. not discrimination.
Hillside Homes, Inc., and Ideal Builders, Inc., enter into a construction contract that
includes six pages of detailed calculations. Later Hillside, whose project manager
compiled the figures, discovers that some numbers were multiplied incorrectly, but
Ideal refuses to make changes. A court would most likely
a. allow the parties to rescind the contract.
b. award damages to Hillside for the mistakes.
c. award damages to Ideal for the mistakes.
d. enforce the contract without requiring changes.
Jake is charged with embezzlement. Embezzlement is not robbery because
embezzlement may be committed without
a. a criminal act.
b. a criminal intent.
c. taking property from its owner.
d. the use of force or fear.
Willful violations of the Securities Act of 1933 may be subject to criminal prosecution.
An invitation to submit bids”how much would you charge to do this work?is an offer.
Joint ownership of property in and of itself creates a partnership.
Private parties cannot sue violators of Section 10(b) and Rule 10b-5.
A fiduciary relationship allows parties to avoid obligations without liability.
An unpaid seller can bring an action to recover the purchase price, on the buyers breach
of a contract, only if the goods are first disposed of.
Anything less than substantial performance is a material breach of contract.
Bubbly Bottling Company is engaged in the soft-drink bottling and distribution industry
in the states of New York and New Jersey. The firm currently has about 40 percent of
the market for these products and related services. Carbonate Distribution Corporation
competes with Bubbly in the same states. Carbonate has about 35 percent of the market.
If Bubbly were to acquire the stock and assets of Carbonate, would Bubbly be in
violation of any of the antitrust laws? If so, which one? Discuss fully.
In most states, a general partner is jointly and severally liable for all partnership
obligations.
To have standing to sue, a party must have been harmed or have been threatened with
harm by the action about which he or she complains.
Employees who deal with third parties are agents of their employers.
A product is unmerchantable if an accident could arise in connection with the goods.
An acceptance that materially changes a term in the offer will still be considered an
acceptance.
An assumption of risk defense does not require that a risk be voluntarily assumed.
The procedure and content of a Chapter 12 plan are similar to the procedure and content
of a Chapter 13 plan.
A fiduciary relationship involves trust and confidence.
In many corporations, the directors are also the chief corporate officers.
A bank that encodes information on an item after its issue warrants to any subsequent
bank that the information is correct.
Business ethics is consistent only with short-run profit maximization.