Disc & Shoe Brakes Corporation, a brake manufacturer, sells its products to Eastside
Motors, a retailer, at lower prices than it charges Fast Brake, a competitive retailer. This
price discrimination is legal
a. under any circumstances.
b. unless its effect is to cause a competitor a loss of any business.
c. unless its effect is to substantially lessen competition.
d. unless there is no effect on a competitor.
Fact Pattern 11-1B
Kyla replaces Lomax in his job at Motor Vehicle Manufacturing Corporation (MVMC).
Refer to Fact Pattern 11-1B. Lomax believes that he has been discriminated against on
the basis of his age. For the Age Discrimination in Employment Act to apply
a. Kyla must be forty years of age oryounger.
b. Kyla must be forty years of age or older.
c. Lomax must be forty years of age or older.
d. Lomax must have been MVMC’s employee for at least forty years.
Giuseppe writes a check “payable to bearer” and hands it to Hamilton. Imogene steals
the check and delivers it to Jocelyn, an innocent third person. Hamilton can recover the
proceeds of the check from
a. Imogene.
b. Jocelyn.
c. Giuseppe.
d. no one.
Satin, Silk & Swimwear, a women’s clothing store, employs female attendants who as-
sist customers in the dressing rooms. Toribio, a forty-one-year-old male, applies for an
attendant’s job, but is not hired. In Toribio’s suit against Satin, Silk & Swimwear for
employment discrimination under the Civil Rights Act of 1964, the store has
a. no defense.
b. a bona fide occupational qualification defense.
c. a business necessity defense.
d. an affirmative action defense.
Entrepreneur Auto Rentals owes Sole Saver Auto Dealership $20,000. Entrepreneur
executes a note to Sole Saver as security for the debt. This security
a. does not constitute sufficient consideration for HDC status.
b. does not satisfy the value requirement for HDC status.
c. satisfies the consideration requirement for HDC status.
d. satisfies the value requirement for HDC status.
Best Recording Corporation and CD Production Company wish to combine all assets,
stock, and personnel into a new firm to be called DigiSongs Inc. This is
a. a consolidation.
b. a merger.
c. a share exchange.
d. a takeover.
Cloud Computing & Processing Corporation wants to hire Dhani, a noncitizen of
“extraordinary ability.” To hire Dhani, Cloud Computing must petition
a. U.S. Citizenship and Immigration Services.
b. the Social Security Administration.
c. U.S. Immigration and Customs Enforcement.
d. the National Labor Relations Board.
InterComp normally sells $50,000 worth of software to Power Source, a retail elec-
tronics store, each summer on terms requiring payment in sixty days. One year,
InterComp wants cash, but Power Source wants the usual sixty days. To meet both
needs, the parties can arrange
a. a certificate of deposit.
b. a bearer bond.
c. a trade acceptance.
d. an international letter of credit.
Mango Corporation believes that Melon Corporation engages in anticompetitive
behavior in an attempt to drive Mango and its other competitors out of the market.
Antitrust laws can be enforced against Melon by
a. Mango and Melon’s other competitors.
b. Mango and Melon’s customers.
c. any federal government agency.
d. any business with a significant impact on interstate commerce.
Diego is the payee of a bearer instrumenta promissory note in the amount of $1,000.
Emil offers to harvest Diego’s field of alfalfa in October in exchange for the note. Diego
agrees and delivers the note to Emil. Emil is not an HDC of the note because he
a. was not the original payee on the note.
b. did not take the note without notice.
c. did not acquire the note in good faith.
d. did not give value for the note.
Korean Hot Dogs Inc. offers entrepreneurs the opportunity to operate a franchise under
the Korean Hot Dogs trade name as a member of a select group of dealers that engage
in retail fast food sales. To potential investors, the franchisor must provide
a. actual earnings figures.
b. hypothetical earnings figures.
c. projected earnings figures.
d. none of the choices.
Dionne is an officer of Event Ticketing, Inc. As an officer, with respect to the
corporation, Dionne is
a. a fiduciary.
b. a forum.
c. a proxy.
d. a quorum.
In contemplation of death during surgery, Donnelly gives his guitars to Ezri. The
surgery is successful, and Donnelly recovers from the operation. The gift of the guitars
is
a. not revoked because it was a gift causa mortis.
b. not revoked because it was a gift inter vivos.
c. revoked because it was a gift causa mortis.
d. revoked because it was a gift inter vivos.
Armando is a witness in a controversy involving the U.S. Bureau of Tobacco and
Firearms. Armando can be compelled to appear before an administrative law judge if he
is served with
a. an order for specific performance.
b. an executive order.
c. a subpoena.
d. a search warrant.
Grace signs an instrument payable to the order of Hillside Credit Union “on or before”
June 15. This instrument is
a. negotiable.
b. nonnegotiable, because the maker can move up the payment date.
c. nonnegotiable, because moving up the payment date is optional.
d. nonnegotiable, because the exact payment date cannot be determined from the face of
the instrument.
Rubin writes a check drawn on his account at Clearwater Bank and payable to the order
of Gwyn. The bank does not pay the check. Rubin is
a. absolved of liability on the check.
b. liable to Gwyn for the amount of the check.
c. liable to the bank for the amount of the check.
d. entitled to payment of the amount of the check from Gwyn.
Nashville, Tennessee, passes an ordinance to regulate waste disposal. The disposal of
waste may also be regulated by
a. all other levels of government.
b. no other levels of government.
c. the federal government only .
d. the Tennessee state government only.
The functions of the National Transportation Safety Board, like those of other federal
administrative agencies, include
a. adjudication.
c. declaration.
b. enunciation.
d. pronunciation.
The Occupational Safety and Health Administration (OSHA) discovers that Petro
Refinery, Inc., is violating an OSHAS regulation. If this situation is resolved like most
such disputes, the outcome will be
a. a negotiated settlement.
b. a trial and a fine.
c. a trial and an appeal to a higher authority.
d. a trial and the dissolution of the business.
Tory borrows $10,000 from USA National Bank to remodel a room in her home. This
transaction is subject to
a. no federal law.
b. the Consumer Leasing Act.
c. the Consumer Product Safety Act.
d. the Truth-in-Lending Act.
Stop n” Gas Convenience Stores, Inc., is an East Coast-based firm that does business
throughout the United States. With respect to this circumstance, the UCC has been
adopted by, and applies in,
a. all of the states, in whole or in part.
b. only the states on the Atlantic and Pacific coasts.
c. none of the states, to date.
d. only the lower forty-eight statesnot Alaska or Hawaii.
On March 1, Eugene retains Farley to act as his authorized agent. On April 1, Eugene
dies. On April 2, before Farley knows of Eugene’s death, he enters into a contract on
Eugene’s behalf. The contract is
a. binding on Eugene’s heirs.
b. binding on Farley.
c. void.
d. voidable.
Foster contracts with Golf Carts Unlimited, Inc. to buy five golf carts. The contract lists
the five carts as GC001, GC002, GC003, GC004, GC005. Identification
a. requires that Foster verify his identity to take possession of the carts.
b. has taken place.
c. cannot take place until the contract is reviewed by a court.
d. will take place only when Foster pays for the golf carts.
Eden signs a promissory note payable to the order of First Mortgage Company. The
note states that it is payable “with interest at the legal rate.” This note is
a. negotiable.
b. nonnegotiable, because it does not specify a rate of interest.
c. nonnegotiable, because it is payable with interest.
d. nonnegotiable, because the exact amount payable cannot be determined from the face
of the instrument.
Loading Ramps Plus Inc. contracts to sell sixteen aluminum loading ramps to Moving
Services, Inc. Loading Ramps ships the ramps, which Moving Services accepts but does
not pay for. Loading Ramps can
a. sue to recover the purchase price plus incidental damages.
b. sue to recover the purchase price minus incidental damages.
c. resell the ramps to any buyer willing to reclaim them from Moving Services.
d. require Moving Services to revoke its acceptance of the ramps.
Trucks & Trailers, Inc. (T&T), and United Delivery Service enter into a contract for a
lease of trucks. T&T is a merchant who deals in goods of the kind leased. Under the
UCC, an implied warranty of merchantability arises
a. automatically.
b. only if the lessee asks for such a warranty.
c. only if the lessor expresses such a warranty.
d. only in conjunction with sales contracts, not lease contracts.
Cattle Ranch Company offers its stock for sale only in a single state. The law in Cattle
Ranch’s state is like the law in most states. Cattle Ranch’s offer is subject to state
securities statutes that include
a. antifraud and disclosure provisions.
b. antifraud provisions only.
c. disclosure provisions only.
d. neither antifraud nor disclosure provisions.
Cleo writes a check for $100 drawn on Debit & Credit Bank and presents it to Elegant
Jewelers for payment. If the check is not backed by sufficient funds, Cleo may be
prosecuted for
a. forgery.
b. fraud.
c. negligence.
d. nothing.
Fact Pattern 2-1B
Bryn, Cornell, and Duke are general partners in Equity Lending, a consumer credit,
mortgage, and investment firm. Their agreement states that 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.
Bryn’s dissociation from the firm results in
a. the automatic termination of the firm’s legal existence.
b. the partnership’s buyout of Bryn’s interest in the firm.
c. the immediate maturity of all partnership debts.
d. Bryn’s purchase of her interest in the partnership from the firm.
Misha and Nguyen are shareholders of Outsourcing Solutions, Inc. Misha’s written
authorization to Nguyen to vote her shares at a shareholders’ meeting is
a. a violation of the duty of loyalty.
b. a preemptive right.
c. a proxy.
d. a quorum.
Ultrahazard Removal & Disposal Corporation transports radioactive materials. Vincent,
an Ultrahazard employee, is diagnosed with radiation sickness after exposure to the
materials. Vincent’s suit against Ultrahazard to recover for the injury is known as
a. an environmental impact statement.
b. a nuisance.
c. a toxic tort.
d. a hazardous substance response.
Coco is considering forms of business organization for her concessions businessCoco’s
Cakes. Most states require that a limited liability company have
a. no minimum number of members.
b. at least one member.
c. at least two members.
d. at least three members, including one general partner.
Qiana gives Rick a $50 check as payment for a debt. Rick crudely raises the amount of
the check to $500 and transfers it to SmartPhones & Minutes Store for a new phone.
SmartPhones & Minutes deposits the check in its Trade Market Bank account. Qiana is
liable for the payment of $500 to
a. no one.
b. Trade Market Bank.
c. Rick.
d. SmartPhones & Minutes.
Gena borrows $350,000 from Fish Island Bank to buy a home, which secures the
mortgage. In the seventh year of the loan, Gena stops making payments. After the bank
repossesses the property but before it is sold, Gena may buy it by paying
a. an amount that equals the potential proceeds from the property’s sale.
b an amount that exceeds the potential proceeds from the property’s sale.
c. the amount of the missed payments, but not more.
d. the full amount of the debt, plus any interest and costs.
Fact Pattern 18-B1
Economy Bank issues a letter of credit in favor of Finish & Refining Company, a U.S.
firm, to facilitate an international sales contract to buy resources from Global Mining,
Ltd., a British company.
Refer to Fact Pattern 18-1. In this letter of credit, the account party is
a. Global Mining.
b. Finish & Refining.
c. Economy Bank.
d. Great Britain.
If delivery of goods becomes impossible, a party who has issued a draft or note under
the contract has a defense for not paying it.
With respect to negotiability, the location of a signature on a document is important.
An agent’s implied authority can be implied by custom.
Checks are usually three party instruments.
Either the security agreement or the financing statementbut not bothmust describe the
collateral in which the secured party has a security interest.
Every act of the partner concerning partnership business and “business of the kind” and
every contract signed in the partnership’s name bind the partner, but not the firm.
A limited liability company can be taxed as a partnership.
There is a requirement that testators give their estate to the natural heirs.
A holder is any person in possession of a negotiable instrument that is payable either to
the bearer or to an identified person who is the person in possession.
Warrants are required to conduct administrative searches in all highly regulated
industries.
When a release of hazardous chemicals from a site occurs, potentially responsible
parties can avoid liability through transfer of ownership.
A testamentary trust is created by will and comes into existence on the grantor’s death.
A debtor must be insolvent to file for bankruptcy relief.
The key to liability under Section 10(b) of the Securities Exchange Act of 1934 and
SEC Rule 10b-5 is whether information omitted or misrepresented in connection with
the purchase or sale of a security is material.
A person who transfers an instrument for consideration makes transfer warranties to all
subsequent transferees and holders who take the instrument in good faith.
Attorneys are required to find relevant law that is applicable to a case and can be
discovered through a reasonable amount of research.
A Only the U.S. Department of Justice can prosecute violations of all of the antitrust
laws.
It is not an unfair labor practice for an employer to contribute financial or other support
to a labor organization.