Elegant Carpets, Inc., and Fantastic Floors Stores enter into a contract for a sale of
carpeting. Under a shipment contract, the seller must
a. allow the buyer to reject the goods for any reason.
b. deliver the goods to a particular destination.
c. inspect the goods before shipping them.
d. place the goods into the hands of a carrier.
Fact Pattern 15-3
Bell Medical Education Service enters into a contract to employ Chris as an instructor
for two years to begin May 1. One month before the term begins, Bell is underbid by a
competitor and loses a major client, Delta Hospital Center. Bell now refuses to hire
Chris.
Refer to Fact Pattern 15-3. Bell’s repudiation is most likely
a. a material breach.
b. a minor breach.
c. Chris’s breach.
d. no breach.
Quik Sales Corporation orders goods from Re Stock Company. Re plans to market the
goods to consumers generally. Re identifies the goods. Before they are shipped to Quik,
an insurable interest in the goods exists in
a. Quik and Re, but not consumers generally.
b. Quik only.
c. Quik, Re, and consumers generally.
d. Re only.
Labor Recruiters, Inc., has been ordered to appear at a hearing before an administrative
law judge of the National Labor Relations Board. A significant difference between a
trial and an administrative hearing is that
a. attorneys are not allowed to attend administrative hearings.
b. clients are not allowed to communicate with their attorneys during administrative
hearings.
c. hearsay can be introduced as evidence in an administrative hearing.
d. the burden of proof is on the charged party to prove innocence.
Lana applies for a firefighter’s job with Metro City, which responds with a letter setting
an appointment for a medical exam. The letter also states that it is “an employment offer
conditioned on the applicant passing the exam.” This letter is
a. a bilateral contract that Lana accepted by applying for the job.
b. a quasi contract on which Lana can rely for employment.
c. a unilateral contract that Lana can accept by passing the exam.
d. no contract.
Fact Pattern 39-1
Cardio, Inc., makes and sells Drawdown, the most prescribed name-brand heart
medication. Emitate Corporation has the potential to make a generic version of the
same drug.
Refer to Fact Pattern 39-1. Cardio pays Emitate not to sell its product. This is
a. a customer restriction.
b. a joint venture.
c. an exclusive-dealing contract.
d. a price-fixing agreement.
Frida is an employee of Green Recycled Products Company. A state statute protects
Frida from Greens retaliation if Frida reports to state officials, or others, that Green is
involved in unsafe or illegal activity. With respect to the employment-at-will doctrine,
this is
a. an example of the doctrine.
b. an exception based on contract theory.
c. an exception based on public policy.
d. an exception based on tort theory.
Jacquie signs a contract to buy a car just before reaching the age of majority. After
reaching the age of majority, Jacquie does not take possession or make payments. Most
courts would hold, with respect to the contract, that this is
a. disaffirmance.
b. emancipation.
c. ratification.
d. rescission.
During a union election campaign at Skyscraper Construction Corporation, the
employer can, without monitoring or regulating by the National Labor Relations Board,
threaten employees with
a. a layoff only.
b. a layoff or a reduction in benefits and wages.
c. a reduction in benefits and wages only.
d. neither a layoff nor a reduction in benefits and wages.
Isabel obtains a fire insurance policy on her home from Justice Insurance Company.
The home is lost in a fire, but the parties dispute the amount of Justice’s liability under
an ambiguous clause in the policy. A court would most likely
a. interpret the clause against Isabel.
b. interpret the clause against Justice.
c. rewrite the clause and apply it as rewritten.
d. strike the clause from the policy.
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 Flora’s
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.
As the beneficiary of a business trust, Kevin’s liability for trust debts and obligations is
a. limited to his capital investment in the trust.
b. limited to his personal assets.
c. nothing.
d. unlimited.
In a suit against Sandy, Taylor obtains a remedy. In the U.S. legal system, this remedy
will most likely be
a. an injunction.
b. damages.
c. rescission.
d. specific performance.
Evan is charged with a crime. Almost all federal courts and some state courts would not
hold Evan liable if, at the time of the offense, as a result of a mental disease or defect,
Evan lacked substantial capacity to
a. appreciate the wrongfulness of his conduct only.
b. appreciate the wrongfulness of his conduct and obey the law.
c. appreciate the wrongfulness of his conduct or obey the law.
d. obey the law only.
Seafood Restaurant Company pays income and other taxes collected by the Internal
Revenue Service (IRS). Like other federal administrative agencies, the IRS was created
by
a. Congress, through enabling legislation.
b. the courts, through the adjudicatory process.
c. the U.S. Constitution, through the First Amendment.
d. the U.S. Department of the Treasury, through a final order.
Fact Pattern 22-1
Ewa signs an instrument unconditionally promising to pay to “First State Bank” $5,000
with interest in installments with the final payment due June 1, 2012.
Refer to Fact Pattern 22-1. The instrument that Ewa signed is most likely
a. a certificate of deposit.
b. a draft.
c. an order to pay.
d. a promissory note.
Von seeks information about Wes and other well-known businesspersons under the
Freedom of Information Act. To obtain the information, Von must
a. agree not to reveal any trade secrets.
b. reasonably describe the information.
c. get a court order.
d. have Wes’s and the others’ permission.
In Sales Distribution Corp. v. Consumer Products Co., the court decides that a
precedent is incorrect or inapplicable. The court
a. may rule contrary to the precedent.
b. must apply the precedent.
c. must ask a higher court to rule on the case.
d. must refuse to decide the case.
A contract between Drill-Bit Sharpeners, Inc., and East Oil Mining Corporation
contains a clause stating that any assignment is “void.” This ordinarily prohibits
a. any assignment.
b. no assignment.
c. only an assignment of contract rights to personal services.
d. only an assignment that would change the obligor’s risk.
Feder prepares federal corporate income tax returns for Giant Stores, Inc., and other
firms. Under the Internal Revenue Code, with respect to an understatement of a client’s
tax liability, Feder may be liable for
a. negligent or willful misconduct.
b. no misconduct.
c. only negligent misconduct.
d. only willful misconduct.
Excel Corporation conditions shipments of its products to Federated Stores, Inc., on
Federated’s agreement not to buy products from Great Goods Company, Excel’s
competitor. This is
a. an exclusive-dealing contract.
b. a tying arrangement.
c. price discrimination.
d. a unilateral refusal to deal.
Chuckie, president of DrinkUp Fresh Beverages, Inc., does not apply utilitarianism to
business ethical issues. One problem with utilitarianism is that it
a. gives business profits priority over production costs.
b. ignores the practical costs of a given set of circumstances.
c. requires complex cost-benefit analyses of simple situations.
d. tends to justify human costs that many find unacceptable.
Mabel and Nicol do business as One World Realty. In acting on the firm’s behalf in a
deal with Property Acquisition Company, Mabel fails to account for the profit. To her
firm, Mabel is
a. liable for breach of the duty of care.
b. liable for breach of the duty of economic sense.
c. liable for breach of the duty of loyalty.
d. not liable.
Deb buys a song through eSongs, an online music vendor. Before completing the
purchase and downloading the song, Deb must agree to a provision not to sell copies of
the song. This provision is
a. a browse-wrap term.
b. a click-on agreement.
c. a shrink-wrap agreement.
d. none of the choices.
Congress enacts a law that sets out a rigorous medical-device premarket approval
process for the U.S. Food and Drug Administration to follow. The law includes a
preemption provision. Joe is injured by a device that underwent the process and files a
claim under New Hampshire state law to recover for the injury. The court will most
likely rule that
a. Joe’s state law claim preempts the federal law.
b. the federal law and state law claim are concurrent.
c. the federal and state law claim cancel each other out.
d. the federal law preempts Joe’s state law claim.
Fealty Credit Corporation asks its employees to evaluate their actions and get on the
ethical business decision-making “bandwagon.” Guidelines for judging individual
actions include all of the following except
a. an individual’s conscience.
b. business rules and procedures.
c. loopholes in the law or company policies.
d. promises to others.
Select Furniture Store sells household consumer goods. To create a purchase-money
security interest, Select Furniture must
a. assign, to a collecting agent, a portion of its accounts payable.
b. assign, to a collecting agent, a portion of its accounts receivable.
c. extend credit for part or all of the purchase price of the goods.
d. refer purchasers to a third-party lender.
Jean promises to pay Khalil $500 because “he does not have as much money as other
people.” Jean’s promise is
a. enforceable because society wants people to keep their promises.
b. enforceable because the redistribution of wealth is a valid social goal.
c. not enforceable because Jean could have given more.
d. not enforceable because Khalil has not given consideration in return.
Lloyd and Milly are employees of NuTech Corporation. They have the same job. Under
the Equal Pay Act, NuTech can legitimately pay Lloyd more than Milly on the basis of
a. Lloyd’s greater production only.
b. Lloyd’s greater production or seniority.
c. Lloyd’s greater seniority only.
d. neither Lloyd’s greater production nor his greater seniority.
Joy invites Ken into her apartment. Ken commits trespass to land if he
a. enters the apartment with fraudulent intent.
b. harms the apartment in any way.
c. makes disparaging remarks about Joy to others.
d. refuses to leave when Joy asks him to go.
To be ethical is to “do the right thing” but it does not otherwise “pay.”
U.S. firms may be subject to other nations’ antitrust laws.
Under the UCC, the validity of a contract depends on its price term.
To qualify as a commercially reasonable sale, a secured party’s sale of collateral, after
default and repossession, must be public.
A service mark distinguishes products used, or “put into service,” by the government.
A public authoritysuch as a state’s attorney generalcan sue to stop a “public” nuisance.
Shareholders have a right to inspect corporate books and records.
One of the requirements of a valid contract is its acceptance.
An improper filing renders a secured party unperfected.
If a price quotation contains a mistake in the adding of a number of figures, the contract
may not be enforceable.
A decision on a given issue by a court is not binding on an inferior court.
An agency relationship can be formed without consideration.
Generally, a corporation that purchases the assets of another corporation is not
automatically responsible for the liabilities of the selling corporation.
An agency relationship may not occur by operation of law in a family.
Tangible personal property represents a set of rights and interests but has no real
physical substance.
A unilateral refusal to deal with a specific party is never a violation of antitrust law.
An alteration of an instrument is material if it changes the terms between two parties in
any way.
In some circumstances, a bankruptcy court can conduct a jury trial.
A suggestive use of ordinary words may not be trademarked.