Jane and Phil enter into a contract, but make a bilateral mistake. For the contract to be
rescinded by either party, the bilateral mistake must be about
a. a material fact.
b. value.
c. an opinion.
d. a prediction.
Rice River Farms offers to sell Sensei Sushi Restaurants, Inc., five hundred bushels of
rice. Sensei responds, “We agree to buy five hundred bushels only if the rice is Grade A
quality.” This statement is
a. a breach.
b. a counteroffer.
c. a confirmation.
d. an acceptance.
Vehicle Leasing Agency (VLA) and Wander Trucking Company enter into a contract
for a lease of eight cargo vans. VLA delivers eight vans, but they are not cargo-sized.
Wander
a. cannot reject the entire shipment.
b. can reject the entire shipment.
c. must accept the entire shipment.
d. must reject the entire shipment.
Carrie Ann works at Paper Products, Inc. She considers taking home a few sheets of
stationery so she can write letters to her ailing grandmother. Since Paper Products
produces thousands of sheets of stationery every day no one will miss the few sheets
she takes and company profits will not be affected. Carrie Ann then considers what
would happen if every employee took some stationery home and decides not to take
any. Carrie Ann is being influenced by
a. the categorical imperative.
b. the principle of rights.
c. a cost-benefit analysis.
d. outcome-based ethics.
HVAC Parts Company charges different buyers different prices for identical goods.
HVAC’s prices are subject to evaluation under
a. the Clayton Act.
b. the Federal Trade Commission Act.
c. the Sherman Act.
d. no antitrust law.
Eleanora offers Flossy the amount of an investment in Flossy’s start-up business venture
if she marries Eleanora’s son Glenn. This promise is enforceable
a. only if it is in writing.
b. only if the amount of the investment is more than $500.
c. only if Glenn agrees to marry Flossy.
d. under no circumstances.
The basis for India to give effect to the laws and court decisions of the United States is
primarily
a. courtesy and respect.
b. fear and intimidation.
c. admiration and envy.
d. payments of cash and exchanges of property.
Moses sells an apartment building to Noelle with a promise to install a new heating and
air conditioning system , before September 1. The following February 1, Moses sends
Ollie, an HVAC technician, to begin the installation. Noelle orders Ollie to leave and
refuses to make further payments to Moses, who files a suit against Noelle.
Moses’s late attempt to install the ventilation system is most likely
a. a material breach.
b. complete performance.
c. excused by Noelle’s refusal to make further payments.
d. substantial, but not complete, performance.
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.
Levi’s Toy Store orders one hundred board games from Big Board Games Warehouse.
When the games are delivered, they are all missing pieces. Levi’s Toy Store rejects the
shipment. Big Board Games wants to cure. Big Board Games must
a. promptly notify Levi’s Toy Store of the intent to cure.
b. pay Levi’s Toy store a cure fee.
c. send a truck to pick up the nonconforming goods before the end of the business day.
d. create a new contract with Levi’s Toy Store.
Rio Business Corporation pays potential clients, including private foreign companies
and the representatives of foreign labor organizations to facilitate business. If Rio
knows that the payments will be passed on to a foreign government, this practice is
a. illegal if the payments violate the Foreign Corrupt Practices Act.
b. legal because a third party acts as a “go-between.”
c. legal because private parties are involved on both sides of the deal.
d. legal because the payments are intended to facilitate business.
Kip opens an account at a Lotsa Goodies Store, and buys a digital music player and
other items, but makes no payments on the account. To collect the debt, Mako, the
manager, contacts Kip’s parents. This violates
a. no federal law.
b. the Fair and Accurate Credit Transactions Act.
c. the Fair Debt Collection Practices Act.
d. the Truth-in-Lending Act.
Pat, a world famous musician and composer, agrees to give ten piano lessons to Quinn
in exchange for $1,000. Pat’s attempt to delegate his contract to Ruth, an inexperienced
pianist, will probably be
a. permitted because contracts may be freely delegated.
b. permitted because the contract is concerned with music lessons.
c. prohibited because contracts may not be freely delegated.
d. prohibited because Pat and Ruth have very different skill levels.
Custom Cabinets & Carpentry Company has a claim against Duane’s property to satisfy
a debt that takes priority over other claims against the same property. This is
a. a lien.
b. a violation of most state laws.
c. a composition agreement.
d. a contract of suretyship.
Big Drill Oil Company employees one hundred workers. Big Drill must do all of the
following except
a. keep occupational injury and illness records for each employee.
b. report any work-related diseases directly to OSHA.
c. report any employee death due to a work-related incident to OSHA within eight
hours.
d. pay employees higher wages for working in more dangerous areas.
The U.S. Fish and Wildlife Service utilizes notice-and-comment rulemaking. This
involves a period during which
a. judges, legislators, and the president are asked about a proposed rule.
b. potential violators of a proposed rule are notified and publicized.
c. the administrators “notice” a problem and “comment” on it.
d. the public is asked to comment on a proposed rule.
Owen, Paula, Quinn, and Rita combine to finance the building of Super Stores, a
shopping mall. Their selected form of business organization is an investment group, or
a. a business trust.
b. a joint stock company.
c. a joint venture.
d. a syndicate.
Cash National Bank is an HDC of a note for $1,000 on which there is the forged
signature of “Dudley.” If sued on the note by Cash
a. Dudley must pay the note.
b. Dudley’s best defense would be fraud in the execution.
c. Dudley’s best defense would be material alteration.
d. Dudley’s best defense would be forgery.
Jessica’s Jumpin” Jelly Beans, LLC, is a limited liability company. Unless indicated
otherwise on Jessica’s federal tax form, the firm will be taxed as
a. a cooperative.
b. a corporation.
c. a joint venture.
d. a partnership.
Virgil borrows $175,000 from United Finance Bank to buy a home. Federal law
regulates primarily
a. mortgage terms that must be disclosed in writing.
b. oral representations with respect to the terms of a loan.
c. the lowest prices for which real property can be sold.
d. who can buy real property, where they can buy it, and why.
Secure Investments, Inc., a U.S. firm, expands into international markets through a joint
venture. In this situation, Secure owns
a. all of the operation, and its profits and liabilities.
b. all of the operation, and none of its profits and liabilities.
c. none of the operation, and none of its profits and liabilities.
d. part of the operation, and shares its profits and liabilities.
Over the Internet, Red & White Contractors, Inc., arranges to lease storage space from
Blue Services Company. To complete the deal, Red & White clicks on a button that
says, in reference to certain terms, “I agree.” Most likely, the parties have
a. a binding contract that includes the terms.
b. a binding contract that does not include the terms.
c. an unenforceable contract that includes the terms.
d. an unenforceable contract that does not include the terms.
A suit is filed against Adroit Drilling Tools Corporation, alleging that the firm
committed the offense of monopolization. To determine whether Adroit has monopoly
power requires looking at
a. the definition of monopoly in the Sherman Act.
b. Adroit’s size alone.
c. Adroit’s production methods and marketing techniques.
d. the relevant market.
Stan incorporates his scientific products business as Tech Supply, Inc. Unless the
articles of incorporation state otherwise, Tech Supply most likely has
a. a finite, yet-to-be-determined existence.
b. a one-year, nonrenewable existence.
c. a one-year, renewable existence.
d. perpetual existence.
The Constitution sets out the authority and the limits of the branches of the government.
The term checks and balances means that
a. Congress writes checks and the other branches balance the budget.
b. each branch has some power to limit the actions of the others.
c. the courts balance their authority to the other branches’ checklists.
d. the president “checks” the courts, which “balance” the laws.
Julie orally agrees to assume Carlyle’s debt to FunGames, Inc. Julie gets a substantial
personal benefit from the agreementCarlyle agrees to work for Julie’s landscaping
service for six months. Julie’s oral assumption of the debt is enforceable by
a. Julie or Carlyle only.
b. FunGames only.
c. any of the parties.
d. no one.
Ralph, a representative for Statewide Truck & Transport Company, delivers a
warehouse receipt to Thelma, the owner of United Storage Warehouse. A warehouse
receipt is
a. an invoice for payment for loading and carting verified by a seller.
b. an order to ship goods signed by a buyer.
c. a receipt for goods signed by a carrier.
d. a receipt issued by a warehouser for goods in a warehouse.
Alpha Company issues a trade acceptance with itself and Beta Company as parties. A
trade acceptance is
a. a draft.
b. an order to accept delivery of money.
c. a promise to accept delivery of goods.
d. a promise to deliver goods.
Executive control over the Federal Communications Commission, and other agencies,
may be exercised through a presidential veto of
a. Congress’s modifications of the agency’s authority.
b. the agency’s final rules.
c. the agency’s final orders.
d. none of the choices.
Lacy is an accountant who prepares her clients’ tax returns. Muff is not an accountant,
but he also prepares tax returns for clients. Under the Internal Revenue Code, liability
for preparing a false return may be imposed on
a. Lacy and Muff.
b. Lacy only.
c. Muff only.
d. neither Lacy nor Muff.
Flo-Thru Corporation is poised to issue securities that, under the Securities Act of 1933,
are “exempt.” This means that the securities can be sold
a. on the basis of a material omission or misrepresentation.
b. on the basis of nonpublic information.
c. within any six-month period by certain insiders.
d. without being registered.
Ray is a shareholder of Small Biz Company (SBC). When the directors fail to undertake
an action to redress a wrong suffered by SBC, Ray files a suit on the firm’s behalf.
Any damages recovered by Ray’s suit will go to
a. Ray.
b. SBC.
c. SBC’s directors.
d. the state in which SBC is incorporated.
Twyla’s dock is damaged in an accident caused by Ulric’s negligence. Twyla agrees not
to sue him if he will pay for the damage. If Ulric fails to pay, Twyla can bring an action
for breach of contract. This agreement is
a. a covenant not to sue.
b. an accord and satisfaction.
c. unliquidated.
d. a release.
Kitsch Niche Corporation is a noninvestment company that wants to issue $3 million of
stock in a twelve-month period. Kitsch Niche, with less than $20 million in annual
sales, qualifies as a small business issuer. Before Kitsch Niche sells the stock, it must
provide investors with
a. an offering circular.
b. a notice of the issue.
c. a red herring prospectus.
d. a tombstone ad.
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.
To rescind a contract, each party essentially advances to the position he or she would
have been in if the contract had been fully executed.
If, before the time for performance, a buyer communicates an intent not to perform, the
seller can consider the buyer in breach and pursue a remedy.
Recovery in a product liability case may be limited when it can be shown that the
plaintiff misused the product.
To determine whether a duty of care has been breached, a judge asks how a reasonable
person would have acted in the same circumstances.
An adjustable-rate mortgage is a standard mortgage with an unchanging rate of
interest.
No contract can prohibit delegation of the duties of the contract.
A registration statement must state how a corporation plans to use the proceeds from the
sale of the securities.
A fixed-rate mortgage is a standard mortgage with a rate of interest that changes
periodically.
Compensatory damages compensate the injured party for injuries sustained due to loss
of the contract and also punish the party that breached the contract.
Each partner in a partnership has the right to full and complete information concerning
the conduct of all aspects of partnership business.
Obeying the law does not necessarily fulfill all ethical obligations.
Statutes often set forth rules specifying the terms of contracts.
Constructive discharge is a theory that plaintiffs can use to establish any type of
discrimination claims under the Civil Rights Act of 1964.
State laws regarding corporations are uniform.
If a corporation is dissolved, its assets can be liquidated without further notice to a party
with a claim against the firm.