A forum-selection clause indicates the place for the resolution of a dispute arising under
a contract.
An online offer should include provisions relating to dispute settlement.
One way to acquire ownership rights to property is merely to possess it.
When a buyer breaches a contract, the risk of loss immediately shifts to the buyer.
A person who commits larceny can be sued under tort law.
If a life insurance applicant pays a premium but dies before the physical exam, there is
obviously no coverage.
An acceptance that materially changes a term in the offer will still be considered an
acceptance.
Accountants may be subject to criminal penalties for violations of federal securities
laws.
A bribe must consist of money to be a crime.
Unless otherwise agreed, the result of an online dispute resolution proceeding may not
be appealed to a court.
Hackers sometimes rent their “crimeware” as a service.
Jurisdiction can be a key issue in a case involving a cyber crime.
A justiciable controversy is a case in which the court’s decision-the “justice” that will be
served-will be controversial.
A contract entered into under duress is voidable.
If confusion occurs as a result of the act of a third party, that third party acquires
ownership rights in proportion to the amount confused.
An innocent party can enforce a fraudulent contract.
Bonds represent the purchase of ownership in a business firm.
The verdict in a summary jury trial is binding.
An executory contract is one that has been fully performed.
Certain debtors may not qualify to have all debts discharged in bankruptcy.
Generally, states have antifraud laws patterned after federal securities law.
Under the principle of rights theory, one person’s set of values is as “right” as another’s.
When the words in a contract have more than one meaning, they are cut from the
contract.
Tangible personal property represents a set of rights and interests but has no real
physical substance.
Bribery of foreign government officials is both an ethical and a legal issue.
A reverse mortgage starts as a fixed-rate mortgage and then converts into an
adjustable-rate mortgage.
An expression of opinion-“your customers will like this”-is an offer.
Stored-value cards are a form of digital cash.
Any breach of contract discharges the breaching party.
A principal who causes a third person to believe that another person is the principal’s
agent can be estopped from denying the agency relationship.
In Case 5.1, Coca-Cola Co. v. The Koke Co. of America, the United States Supreme
Court upheld an injunction prohibiting competing beverage companies from calling
their products “Koke.”
A constructive trust is “constructed” by a property owner to fulfill certain unique
functions outside the usual bounds of a trust.
Tortfeasor is the term for a person who commits a tort.
A fiduciary relationship allows parties to avoid obligations without liability.
A public policy underlying the imposition of strict product liability is that a
manufacturer who makes an unsafe product should be put out of business.
Mix-It Concrete Company has the right to enter Nim’s land and remove the rock from
Nim’s quarry. This is
A.a fee simple absolute.
B.a license.
C.an easement.
D.a profit.
Bay City Construction, Inc., a contractor, asks Cool Electric, a subcontractor, to provide
certain services. Nothing is expressed about payment. Cool provides the services, but
Bay City refuses to pay. In Cool’s suit to recover, the chief issue is most likely to be
whether these parties had
A.a formal contract.
B.an actual contract.
C.an implied contract.
D.a voidable contract.
Ezra, an accountant, intentionally misstates a material fact to mislead Fruit Packing
Industries, Inc., a client. Fruit Packing justifiably relies on the misstatement to its
detriment. Ezra is most likely liable for
A.actual fraud.
B.constructive fraud.
C.destructive fraud.
D.virtual fraud.
Caffeine Caf, Inc., files its articles of incorporation with the appropriate government
agency. Least likely to appear in the articles is the name of
A.each of the corporation’s incorporators.
B.each of the corporation’s shareholders.
C.the corporation.
D.the corporation’s initial registered agent.
In Fancy Frills Corporation’s suit against Glamour Stores, Inc., the jury returns a verdict
in Fancy’s favor. Glamour files a motion asking the judge to set aside the verdict and
begin new proceedings. This is a motion for
A.a judgment in accordance with the verdict.
B.a judgment on the pleadings.
C.a new trial.
D.judgment n.o.v.
Jim is an appliance salesperson. To make a sale, he asserts that a certain model of a
Kitchen Helper refrigerator is the “best one ever made.” This is
A.fraud if the statement is the truth.
B.fraud if Jim believes that this statement is not TRUE.
C.fraud if Jim is stating his opinion, not the facts.
D.not fraud.
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.
Sustainable Caf LLC is a limited liability company. Like any other LLC, unless
Sustainable Caf chooses otherwise, the firm will be taxed as
A.a corporation.
B.a sole proprietorship.
C.a partnership.
D.none of the choices.
Picabo drives a truck as an employee for Quik Delivery, Inc. Picabo would most likely
be considered acting outside the scope of her employment if she
A.crashed into a car at the airport while off duty.
B.hit a pedestrian in a parking lot during a “working” lunch.
C.ran over an attendant at a gas station while refueling the truck.
D.smashed into a store-front while intoxicated on-duty.
Thalia is an employee of Universal Insurance Company. Universal’s employee manual
states that workers will be dismissed only for good cause. 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.
Raul is chairman of the board of Swif-Vac Corporation. Pinky, a consumer, is injured
while using a Swif-Vac product. Pinky sues Swif-Vac, and Raul individually. Swif-Vac
may pay Raul’s legal fees under
A.the director’s right to certification.
B.the director’s right to compensation.
C.the director’s right to indemnification.
D.no circumstances.
China Bank is a foreign entity-a firm owned and operated by investors in a foreign
country. With respect to an LLC in the United States, China Bank can
A.act as a creditor, but cannot otherwise invest or participate.
B.become a member.
C.not become a member, but can participate in its operations.
D.not become a member or otherwise participate in its operations.
Alan, the president of Bayside Investments, Inc., and Colin, Bayside’s accountant, are
charged with a crime, after the police search Bayside’s offices. Under the exclusionary
rule
A.certain Bayside records are excluded from subpoena.
B.certain parties to a criminal action may be excluded from a trial.
C.illegally obtained evidence must be excluded from a trial.
D.persons who have biases that would prevent them from fairly deciding the case may
be excluded from the jury.
Halley, a lawyer on the staff of International Group, applies the utilitarian theory of
ethics in business contexts. Utilitarianism focuses on
A.moral values.
B.religious beliefs.
C.the consequences of an action.
D.the nature of an action.
Tasty Pastries, Inc., and other bakers refer to a “baker’s dozen” as consisting of a
collection of thirteen baked goods. This is an example of
A.course of dealing.
B.course of performance.
C.square dealing.
D.usage of trade.
Network Corporation files a suit against Omega, Inc., alleging that Omega breached a
contract to design and install custom software in Network’s computer system. Network
is
A.the appellant.
B.the appellee.
C.the defendant.
D.the plaintiff.
GR8 Products, Inc., warrants its goods to be free of defects. If Heck issues an
instrument to obtain goods from GR8 that prove defective, Heck can avoid paying on
the instrument
A.only if it is a check.
B.only if it is a note.
C.whether it is a check or a note.
D.under no circumstances.
Sights Unseen, Inc., (SUI) sells scopes with distinctively designed and made lenses and
mirrors to scientists. Telescopes, Etc. Corporation later begins to sell scopes with
identical set-ups of lenses and mirrors, without SUI’s permission, to consumers. This is
most likely
A.copyright infringement.
B.patent infringement.
C.trademark infringement.
D.not infringement.
Rolling Transport & Storage Corporation wants to insure its warehouse to obtain the
maximum possible recovery for the lowest possible premium. To obtain the maximum
recovery under a coinsurance clause, the percentage of the value of the property that
should be insured is
A.80 percent.
B.90 percent.
C.100 percent.
D.120 percent.
Feta is a partner in the game design firm GR8 Games, Inc., which obtains key-person
life insurance on Feta in the amount of $1 million from Halo Insurance Company. Feta
quits GR8 Games to join Icy Applications, Inc. Feta dies. Under the principle of
insurable interest, Halo must pay the $1 million to
A.Feta’s spouse Jo.
B.GR8 Games.
C.Icy Applications.
D.no one.
It is possible to copyright an idea.
Opal conveys three acres of wetlands to Pristine Places, Inc., with a deed that warrants
only that Opal held good title during her ownership of the property. This deed is
A.a grant deed.
B.a quitclaim deed.
C.a special warranty deed.
D.a warranty deed.
The payment of Hu’s debt to Ian is guaranteed by Hu’s personal property. To give public
notice of his interest in Hu’s property, Ian is most likely to
A.attach a bright label to Hu’s property.
B.e-mail other potential creditors.
C.file a financing statement with the appropriate authority.
D.publish a collection notice in local newspapers.
Maple Products Corporation is a public company, which New Hampshire regulates and
in which Orin invests. The Sarbanes-Oxley Act of 2002 introduced direct federal
corporate governance requirements to
A.public companies.
B.private investors.
C.state regulators.
D.none of these choices.
Speedy Shipping Corporation applies to TransInsurance Company for a fire insurance
policy on Speedy’s warehouse. On the application, Speedy misrepresents the age of the
property to obtain a lower premium. When a fire soon destroys the warehouse,
TransInsurance can
A.deny payment, because a fire destroyed Speedy’s warehouse.
B.deny payment, because of Speedy’s fraud in the application.
C.not deny payment, because a fire destroyed Speedy’s warehouse.
D.not deny payment, because the application is not part of the policy.
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.
Teona files a voluntary petition in bankruptcy for relief through a liquidation. Debts that
will not be discharged include claims for
A.domestic-support obligations.
B.money to be paid for goods not delivered.
C.contributions to employee benefit plans.
D.long overdue credit-card debt.
Federal law requires new car labels to state fuel economy estimates. California state law
proscribes deceptive advertising. Chad buys a new car from Drive-Away Sales in
California. Later, Chad files a suit against the car’s manufacturer, claiming that the car
does not attain the fuel economy estimate and thus its maker engaged in deceptive
advertising in violation of state law. In the opinion of the dissent in Paduano v.
American Honda Motor Co., the court should hold that
A.the federal law does not preempt Chad’s state law claim.
B.the federal law preempts Chad’s state law claim.
C.California’s state law preempts the federal fuel economy law.
D.the federal and state laws preempt each other.
Elmore offers to sell a Ford F-150 for $7,500 to Grace. Before Grace can respond,
Elmore refers to the prices for similar Fords and says, “Forget it. I changed my mind.”
Elmore’s offer was terminated by
A.Elmore.
B.Ford.
C.Grace.
D.no one-Elmore’s offer is still open.
In Nebraska, the highest-ranking (superior) law is
A.a case decided by the Nebraska Supreme Court.
B.a provision in the Nebraska constitution.
C.a rule created by a Nebraska state administrative agency.
D.a statute enacted by the Nebraska legislature.
Bigg Business Corporation, a U.S. firm, and Comercial Grande, S.A., a Mexican firm,
are parties to a contract that does not specify a choice of law. The governing law is that
of
A.any third country.
B.Spain.
C.the buyer’s place of business.
D.the seller’s place of business.
Bud approves on behalf of Cody-but without authorization-a contract with Dik to build
a new silo. Cody does not ratify the contract. Later, Dik tries to enforce the deal. This
attempt will be
A.partly successful.
B.partly unsuccessful.
C.totally successful.
D.totally unsuccessful.