The payment of Brian’s debt to Chuck is guaranteed by Brian’s personal property. This
is
a. an attachment.
b. a secured transaction.
c. perfection.
d. a violation of most state laws.
Gage buys from Fishing Guide Corporation the exclusive right to sell Fishing Guide
rods and reels in a certain area. Their franchise agreement requires Gage to pay certain
administrative expenses. Their agreement may also require Gage to pay a percentage of
the franchisor’s
a. advertising costs.
b. personal expenses.
c. retirement income.
d. none of the choices.
Bayou Development Corporation (BDC) hires Gulfview Brokerage Associates to sell
the condominiums in a building at BDC’s coastal resort. The agency will terminate
a. after the condos have been sold.
b. if the prices of the condos must be reduced to sell them.
c. once BDC obtains insurance to cover the property.
d. when BDC pays Gulfview its first commission.
Procter, who is not in contemplation of imminent death, tells his daughter Opal that she
can have his Dodge truck on his death, whenever that happens. This is
a. an effective gift causa mortis.
b. an effective gift inter vivos.
c. an effective gift largesse.
d. not an effective gift.
Connie, Drew, and Ellen are the general partners of Foreign Auto Repair, a limited
partnership. Connie dies. The partnership can
a. continue only after a distribution of its assets.
b. continue only as a general partnership.
c. continue only if Drew and Ellen consent.
d. not continue because Connie’s death dissolves the firm.
Vivian and Rob enter into a contract under which Vivian will clean Rob’s house every
week for a year. Under the E-SIGN Act, in order for e-signatures to be enforceable for
this contract
a. Vivian and Rob must both agree to use e-signatures.
b. only Vivian needs to agree to use e-signatures.
c. only Rob needs to agree to use e-signatures.
d. Vivian and Rob must both register their e-signatures with the federal government.
Dyan executes her will to give “to my nephew Esau my stock in Fargo, Inc.” Later,
Dyan writes separately, with the same formalities required for a will, to leave the stock
to her niece Ginny and cash to Esau. This writing
a. does not affect the will’s gift of the stock to Esau.
b. requires a gift of the stock in equal shares to Esau and Ginny.
c. revokes the whole will, which must be redrafted.
d. revokes the will’s gift of the stock to Esau.
Skyla and Terry want to form and do business as Unique Boutique Corporation. Its
existence depends generally on
a. city or county corporate codes.
b. the Entrepreneur’s Corporate Handbook.
c. the federal Administrative Procedure Act.
d. state law.
Some agreements are so blatantly and substantially anticompetitive that they are
deemed illegal per se under Section 1 of the Sherman Act. Which of the following is not
a per se violation?
a. A price-fixing agreement
b. A group boycott
c. A trade association
d. A market division
At age seventeen, Daryl enters into a contract to buy a dozen movies from eHD TV
Stream, Inc., an online video service. Soon after reaching the age of majority, Daryl
attempts to disaffirm the contract. eHD files a suit against him. The court will most
likely consider the contract ratified if it is
a. executed.
b. exculpatory.
c. express or implied.
d. emancipated.
Ryan, the owner of SuperMart Stores, Inc., adheres to the “principle of rights” theory.
Under this theory, a key factor in determining whether a business decision is ethical is
how that decision affects
a. the right determination under a cost-benefit analysis.
b. the rights of others.
c. the “right” thing to do.
d. the right to make a profit.
Cash is an employee of Drowsy Resort, Inc., covered by federal overtime provisions,
which apply only after an employee has worked more than
a. eight hours in a day.
b. forty hours in a week.
c. 160 hours in a month.
d. one year for the same employer.
Elias repays his debt, incurred to buy consumer goods, to Fidelity Bank and
immediately files a written request for a termination statement. Fidelity
a. must comply within one month of receipt of the letter.
b. must comply within twenty days of receipt of the letter.
c. must refund $500 to Elias.
d. need not comply.
Eagle Financial Corporation merges with First Bank Corporation, with Eagle Financial
absorbing First Bank. After the merger
a. a different, new corporation is the surviving corporation.
b. Eagle Financial and First Bank are both surviving corporations.
c. Eagle Financial is the surviving corporation.
d. First Bank is the surviving corporation.
The Pennsylvania legislature enacts a state law that violates the U.S. Constitution. This
law can be enforced by
a. no one.
b. the federal government only.
c. the state of Pennsylvania only.
d. the United States Supreme Court only.
Gina sells “Bulk Up” steroids over the Internet. She is arrested and charged with the
sale of a controlled substance. This is cyber crime, which is
a. a new category of crime that is not related to older types of crime.
b. a crime that occurs the virtual community of the Internet.
c. a crime that is less real than the same crime in the physical world.
d. no crime.
Will and Jay form Northwest Air Express, a general partnership. The essential elements
of this partnership do not include
a. a sharing of profits and losses.
b. a joint ownership of the business.
c. an equal right to management in the business.
d. goodwill.
Perfect Potato Chip Company makes an offer that Snack Foods Corporation would like
to accept. Under the “mirror image rule” relating to offer and acceptance, an acceptance
a. may include additional terms not contained in the offer so long as they do not
materially alter the agreement.
b. may include additional terms not contained in the offer that will become part of the
agreement if the offeror does not object within a reasonable period of time.
c. must include only those terms and conditions contained in the offer.
d. may contain additional terms as long as all parties agree to the additional terms.
To “publish” a will means to release it to the media.
Ocean Vessels, Inc., and Pacific Harbor Company enter into a contract for a sale of a
boat. Ocean is a merchant who deals in goods of the kind sold. The goods are defective.
Under the UCC, the implied warranty of merchantability is breached
a. only if Ocean did not know about and could not have discovered the defect.
b. only if Ocean did not know about the defect.
c. only if Ocean knew about or could have discovered the defect.
d. regardless of what Ocean knew or could have discovered.
Bo and Clancy decide to do business as Marketing & Promotion Services. To be a
partnership, this association can result from an agreement that is
a. express, but not from an agreement that is implied.
b. implied, but not from an agreement that is express.
c. oral, written, or implied by conduct.
d. written, but not from an agreement that is oral or implied.
Olivia applies for a job with Petro Company. Petro does not hire Olivia because of her
ethnicity, or national origin. This is
a. reverse discrimination.
b. disparate-impact discrimination.
c. disparate-treatment discrimination.
d. not discrimination.
Elton and Florida sign a contract by which Elton agrees to deliver and install a utility
sink on May 15 in exchange for Florida’s promise to pay the $250 price on May 15. The
delivery and installation of the sink and the payment of the price are examples of
a. conditions precedent.
b. concurrent conditions.
c. conditions subsequent.
d. implied conditions.
Ida, Jerzy, and Kit are the directors of Liberty Convenience Stores, Inc. Liberty has nine
officers and forty-six shareholders. Dividends are ordered by the firm’s
a. board of directors.
b. incorporators.
c. officers.
d. shareholders.
Miley and Otis are involved in a case. The best definition of a case is
a. a criminal prosecution, not a civil proceeding.
b. a failure to perform a legal obligation.
c. a judicial proceeding for the resolution of a dispute.
d. a type of regulation applied to a business.
Consumers in Delta City form a business organization to provide, without profit, an
economic service to its members. This is
a. a business trust.
b. a cooperative.
c. a corporation.
d. a joint stock company.
Fact Pattern 20-1
General Leasing Company (GLC) buys equipment for use as inventory, borrowing $1
million from Helpful Finance Corporation for a security interest in the equipment. The
next day, GLC borrows $500,000 from Interstate Bank, also for a security interest in the
equipment. GLC defaults on the loans.
Refer to Fact Pattern 20-1. Suppose that Helpful perfects its security interest when GLC
takes possession of the equipment. In that circumstance, the party with priority to the
collateral on GLC’s default would be
a. GLC.
b. Helpful and Interstate proportionately.
c. Helpful only.
d. Interstate only.
App Developers, Inc. (ADI), enters into a contract with Carmen, the chief executive
officer of SalesCorp, to create an app for the firm. To fulfill the contract, ADI hires Max
and ten other student interns. With respect to the contract, Max is
a. an intended beneficiary.
b. an incidental beneficiary.
c. a delegatee.
d. an assignee.
Wrugged Woolens, Inc., a U.S. corporation, sets up a specialized marketing
organization in Scotland by appointing a foreign agent. This is called
a. direct exporting.
b. indirect exporting.
c. a joint venture.
d. piracy.
Ramblin Country Stables contracts to buy 1,000 horseshoes from Blacksmith, Inc., for
$1 per shoe. When the market price decreases to 50 cents per shoe, Ramblin refuses to
go through with the deal. Blacksmith can recover
a. $1,500.
b. $1,000.
c. $500.
d. $0.
Brad is an employee of Custodial Service, Inc. In deciding whether Brad acts within the
scope of his employment when he commits a tort against Didi, a court will not consider
whether
a. Brad was acting within the scope of the agency.
b. Brad was acting within the scope of his employment.
c. Custodial authorized the act.
d. Custodial was personally at fault.
Even if goods are not identified to the contract, the title and risk of loss can still pass
from the seller to the buyer.
If a principal does not ratify an unauthorized contract, the principal is not bound.
Stare decisis is a doctrine obligating judges to help persons who have failed to protect
their own rights.
Recording a mortgage protects the creditor’s security interest in the property.
In no states are communications between an accountant and his or her client privileged.
All forms of gambling are legal in all states.
Foreign exchange markets comprise a worldwide system for buying and selling
currency.
A record is an interaction between two or more people relating to business, commercial,
or governmental activities.
State worker’ compensation laws establish a procedure for employees injured on the job
to sue their employers.
All employers must provide their employees with up to twelve months of family or
medical leave.
Under the Constitution, the judicial branch is responsible for foreign affairs.
Informal contracts require a special form or method of creation.
Defense of others is a defense to an allegation of battery, but not assault.
A partnership agreement can include almost any terms that the partners wish.
Interrogatories are written questions for which written answers are prepared and signed
under oath.
Generally, stock offerings that involve a small dollar amount are exempt from the
registration requirement.
Common law is the same as statutory law.
The Statute of Frauds is a compilation of all the laws and regulations related to fraud.
Future goods are goods that are not both existing and identified to the contract.