Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
Dwayne and Ewell enter into a contract for the design of an addition to Dwayne's house
for which he agrees to pay Ewell. Ewell transfers his right to payment under the
contract to Flex Construction Company. Flex is
a. a delegatee.
b. an assignee.
c. an obligee.
d. a prohibitee.
In making decisions for United Merchandising Company, Vance uses a cost-benefit
analysis. This is part of
a. duty-based ethics.
b. Kantian ethics.
c. the principle of rights.
d. utilitarianism.
Ira signs Jill's name, without her authorization, on the back of a check made out to her.
This is
a. burglary.
b. forgery.
c. larceny.
d. no crime.
Pola wants to transfer a check to Quin. The check is defective if it
a. has been previously dishonored.
b. has no irregularities on its face.
c. is not overdue.
d. is so complete that no element of negotiability is lacking.
Adult Shoppe in Beach City sells a variety of publications, including child
pornography. Beach City enacts an ordinance prohibiting the sale of such materials.
This ordinance is most likely
a. an invalid restriction of individuals' privacy.
b. an unconstitutional restriction of speech.
c. a violation of adults' rights to enjoy certain privileges.
d. constitutional under the First Amendment.
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.
Corn Candy Corporation (CCC) has a right of action against Bio Farms, Inc. CCC
merges with Agri Sweeteners, Inc., with Agri absorbing CCC. After the merger, CCC's
right of action against Bio Farms can be exercised by
a. CCC.
b. Agri Sweeteners.
c. Bio Farms.
d. no one.
Guard Personnel Company is charged with using hiring practices that do not meet
requirements set by the Transportation Safety Administration (TSA). The administrative
law judge orders Guard to comply with the TSA's regulations. Guard may
a. appeal to the commission that governs the TSA.
b. appeal to Congress, which created the TSA.
c. appeal to a different, separate agency.
d. ignore the order.
National Consumer Goods Corporation and Paula Purchaser agree to resolve their
dispute in arbitration. The arbitrator's decision is called
a. a conclusion of law.
b. a finding of fact.
c. an award.
d. a verdict.
Mae is granted immunity after she agrees to testify about a crime. Mae has an absolute
privilege against self-incrimination and
a. can be prosecuted only for a crime about which she agreed to testify.
b. cannot be prosecuted for any crime.
c. cannot refuse to testify on Fifth Amendment grounds.
d. can refuse to testify on Fifth Amendment grounds.
The Internal Revenue Service (IRS) wants to seize certain documents of Monetary
Propriety, Inc. Whether it is permissible for the IRS to request or seize the documents
depends on whether the documents are
a. incriminating.
b. relevant.
c. technical.
d. valuable.
Keri's will states, "I give to my sister Liz my condominium in Malibu, California." This
is
a. a general bequest.
b. an abatement.
c. a residuary.
d. a specific devise.
Events Promotion Corporation licenses trademarks to Fandom Souvenirs, Inc., to use in
selling caps, sweatshirts, and similar goods. This is
a. a franchise.
b. an entrepreneur.
c. a principal-agent relationship.
d. a sole proprietorship.
Ollie files a petition in bankruptcy. At the moment of filing
a. an automatic stay goes into effect.
b. Ollie's debts are discharged.
c. Ollie's petition is dismissed.
d. Ollie's property is distributed to his creditors.
Baked Stuff Company agrees to supply Comida Café with all the corn chips that it re-
quires for a year. A sudden blight caused by an organism hitherto unknown in the
United States results in a shortage of corn, and the price rises sharply. Baked Stuff asks
Comida to pay a higher price for the chips. This request is
a. invalid as an attempt at extortion or the so-called holdup game.
b. invalid under the preexisting duty rule.
c. valid as a risk ordinarily assumed in business.
d. valid due to the unforeseen difficulty of the sudden price increase.
The Securities Exchange Commission (SEC) is an administrative agency. Like other
administrative agencies, the SEC was established to
a. act as a liaison between federal and state governments.
b. impose uniform laws on the states.
c. perform a specific function.
d. standardize laws for the executive and judicial branches.
Wilbur signs a note that includes a clause under which the note's holder can delay the
date of its payment indefinitely. This is
a. an acceleration clause.
b. an extension clause.
c. an immaturity clause.
d. a stop-payment clause.
Kasper, the owner of Lakeview Farm, and Milt, the tenant of the farmhouse on the
property, may create a tenancy for years by
a. deed.
b. express contract.
c. implication.
d. sufferance.
In selling inventory control software to Apex Auto Parts Corporation, Bond tells Apex's
purchasing agent that the software is "almost human." This is
a. fraud.
b. duress.
c. puffery.
d. undue influence.
Wisconsin, like other states, may regulate private activities to protect or promote the
public order, health, safety, and general welfare under its
a. police powers.
b. taxing powers.
c. spending powers.
d. supreme powers.
Bob rents a golf cart at Country Club Golf Course. The brakes are worn, and while Bob
is driving the cart, they fail. The cart crashes into a tree, and Bob is injured. Country
Club could have discovered, with reasonable diligence, that the brakes were worn.
Liability for Bob's injuries most likely rests with
a. Bob and Country Club.
b. Bob only.
c. Country Club only.
d. neither Bob nor Country Club.
Hobie, the chief executive officer of Ideal Gamers, Inc. (IGI), intentionally understates
the amount of IGI's debts in information provided to investors as part of an issue of IGI
stock. Jaq buys the stock and suffers a loss. Hobie may be subject to
a. government prosecution and Jaq's suit.
b. neither government prosecution nor Jaq's suit.
c. only government prosecution.
d. only Jaq's suit.
The police arrest Lou, who confesses to a crime. Later, Lou refutes the confession and
demands a trial, at which witnesses testify they saw him commit the crime. Lou is
convicted and sentenced. The U.S. Constitution provides safeguards against all of the
following except
a. deprivations of life or liberty without due process of law.
b. not being allowed to question witnesses.
c. punishment.
d. self-incrimination.
Fact Pattern 26-2
In January, Jazz Dance Studio owes Kay, its musical director, $1,800 for current wages,
receives $700 as a down payment for dance lessons from Lora, and pays a Music, Inc.,
a sheet music supplier, $1,500 of $3,000 owed. In February, the studio files for
bankruptcy under Chapter 7.
Refer to Fact Pattern 26-2. Based on the size of the studio's estate in bankruptcy, each
of Jazz's creditors will get only 10 percent of their claims. Regarding the payment to
Music, Inc., the trustee may
a. not recover it because Music's claim has priority.
b. not recover it unless Music is an insider.
c. recover it as a fraudulent transfer.
d. recover it as a voidable preference.
Refined Commodities, Inc., agrees to deliver ten tons of sheet metal to Select Builders
Corporation. The agreement states that delivery is to be within "3" days, although the
parties intend "30" days. Refined cannot convince Select to amend the contract. Refined
should seek
a. damages.
b. reformation.
c. rescission.
d. specific performance.
Lost in a canyon near Gila, Arizona, Hester writes her will in crayon, on a paper bag,
while Ivan states orally how he wants his estate distributed. Most states do not permit
a. an olographic will.
b. a nuncupative will.
c. a will written on a paper bag.
d. a will written in crayon.
Timekeep Watches, Inc., ships an assortment of timepieces to Unique Jewelers, Inc.,
which agrees to pay for items that are not returned within six months. This is
a. a bailment.
b. a consignment.
c. a sale on approval.
d. a sale or return.
The Environmental Protection Agency (EPA) has the authority to regulate "any air
pollutant." In issuing standards for the discharge of soot and other pollutants, the EPA
a. does not have to take economic costs into account.
b. must take into account the economic costs to businesses.
c. must take into account the economic costs to government.
d. must take into account the economic costs to the general public.
Leah gains access to government records and alters certain dates and amounts in her
favor. This is
a. embezzlement.
b. forgery.
c. larceny.
d. no crime.
Oven Products Company makes microwave ovens. Pico discovers that his Oven
Products oven is defective and sues the maker for product liability based on strict
liability. To win, Pico must show that
a. Oven Products sold the oven to Pico.
b. Pico knew and appreciated the risk caused by the defect.
c. Pico suffered an injury caused by the defect.
d. the "defect" was a commonly known danger.
Quik Fix-It, Inc., offers Pam a job as a plumber. No time for acceptance is specified in
the offer. The offer will terminate
a. after a reasonable period of time.
b. after a typical work week (five business days).
c. after a usual month (thirty calendar days).
d. never.
Ira is declared mentally incompetent. Jay, Ira's son, is named his guardian. At Jay's
insistence, Ira transfers his assets to Jay "for safekeeping." A court might conclude that
this gift is not effective on the ground that there was no
a. acceptance.
b. delivery.
c. donative intent.
d. donor's acknowledgment.
Yvon, an accountant, is charged with negligence by Zesty Sauce, Inc., a client. Yvon
may successfully defend against the claim if she can show that
a. scienter was lacking.
b. she complied with all generally accepted accounting principles.
c. the negligence was not the proximate cause of the client's losses.
d. the negligence was only contributory.
Lew, a member of a protected class, applies for a job with Mit-E Construction
Company, but fails Mit-E's 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.
Publishing false information about another's product is conversion.
To succeed in a strict product liability suit, an injured plaintiff must show that a
product's defect was the proximate cause of the injury.
A business firm's profits may suffer if the firm is not a "good corporate citizen."
The completion of an originally incomplete instrument in an unauthorized manner is a
defense against payment on the instrument to an HDC.
Persons in foreign nations cannot be subject to U.S. antitrust law.
Identification takes place when specific goods are designated as the subject matter of a
sales or lease contract.
Monetary damages is a remedy at law.
A future advance against a line of credit must be of the same type as the original
advance to be subject to the same collateral.
A sole proprietorship continues in business despite the death of the owner.
Efrem owns Fans & Players, a retail sporting goods shop. When Great Hill Lodge, a
new ski resort, is built in the area, Efrem decides to expand and borrows a large sum
from Hometown Bank. The bank takes a security interest in Efrem's present inventory
and any after-acquired inventory as collateral for the loan. The bank properly perfects
the security interest by filing a financing statement. Efrem's business is profitable, and
he begins doubling his inventory. A year later, an avalanche destroys the ski slope and
lodge. Efrem's business takes a turn for the worse, and he defaults on his debt to the
bank. The bank seeks possession of his entire inventory, even though the inventory is
twice as large as it was when the loan was made. Efrem claims that the bank has rights
to only half of his inventory. Is Efrem correct? Explain.
Only experts can submit comments on a proposed administrative rule.
Ethical reasoning is the process through which an individual rationalizes whatever
action he or she chooses to take.
A certificate of deposit may be negotiable even if it does not contain an express promise
to pay.
If a debt is liquidated, an accord and satisfaction cannot take place.
A court may not order a bank, as a result of a garnishment proceeding, to turn over
funds belonging to a debtor to pay a debt.
A contract entered into under undue influence is unavoidable.
Securities of charitable organizations are exempt from the registration requirement of
the 1933 Securities Act.
