James and Will enter into an oral contract on May 1 under which James agrees to
deliver a collection of exotic wines by April 30 of the following year. This contract is
enforceable by
a. James only.
b. Will only.
c. either party.
d. neither party.
Clancy sells shares in Darling Pool & Spa Company to Eton. Clancy does not deliver
the actual possession of the shares to Eton, but gives him the key to a safety-deposit box
in First State Bank in which the stock certificates are locked. Presenting the key is
a. real delivery.
b. constructive delivery.
c. delivery by agent .
d. no delivery.
Jason owes Stephen $1,000 for yard work Stephen performed for Jason. The money is
due on May 1. On April 30, Jason goes to the bank to get the money and discovers that
the bank will be closed until May 2. Jason
a. will be in breach of contract when he fails to pay Stephen on May 1.
b. will not be in breach of contract when he fails to pay Stephen on May 1 due to
objective impossibility.
c. is discharged from any contractual liability to Stephen.
d. will not be in breach of contract when he fails to pay Stephen on May 1 as long as he
pays the $1,000 plus ten percent interest on May 2.
William buys Liz’s house for $100,000, which is the fair market value of the house. If
the contract is later disputed in court, the court is likely to declare William’s
consideration
a. inadequate.
b. unconscionable.
c. legally sufficient.
d. illusory.
Clark obtains from Delta Insurance, Inc., a policy that provides if a dispute arises
between the parties concerning the settlement of a claim, the dispute must be submitted
to an impartial third party, not a court, for resolution. This is
a. an antilapse clause.
b. an arbitration clause.
c. an appraisal clause.
d. an incontestability clause.
Alaskan salmon that fill the hold of Bill and Carla’s fishing boat are fungible if the
salmon are
a. alike naturally or by agreement or trade usage.
b. fundamentally different.
c. fun, good, and edible.
d. liable to deteriorate over time.
Jim tells Dana that he will take her out to lunch on Thursday. Jim has made Dana a
a. prediction.
b. promise.
c. bilateral contract.
d. void contract.
Ginny brings her bicycle to Jackson for repairs. After Jackson completes the repairs,
Ginny refuses to pay him. Which of the following conditions is NOT necessary for
Jackson to have an artisan’s lien on Ginny’s bicycle?
a. Jackson must have retained possession of the bicycle.
b. Jackson must have agreed to provide his repair services on a cash basis.
c. Jackson must have agreed to provide his repair services on a credit basis.
d. Jackson must not have agreed to provide his repair services on a credit basis.
Wilson buys a promissory note from Oli. The note is due on December 5. December 5
is a Sunday. The note
a. is payable anytime the week of December 6.
b. is payable December 6.
c. is payable on December 5 only.
d. is considered defective.
Martha has a checking account with Hometown Bank. Martha signs a check “payable to
Phillipa” drawn on Martha’s Hometown Bank account. Hometown Bank is
a. the payer.
b. the drawee.
c. the drawer.
d. the payee.
Bret is a general partner in Capitol Realty, LLLP, a limited liability limited partnership,
which cannot pay its debts. Bret is personally liable for the debts
a. in proportion to the number of partners in the firm.
b. to no extent.
c. to the extent of his capital contribution.
d. to the full extent.
American Auto Parts Company applies to Liberty Business Insurance Corporation for a
liability policy. If there is an ambiguity in the policy, the provision will be interpreted
against
a. the insured.
b. the insurance company.
c. the state in which the insurance company is based.
d. the federal government.
Hi-Lite Manufacturing, Inc., orders supplies online from Indigo Parts Company. To
complete the order, the buyer is required to click on a button that says, in reference to
certain terms, “I agree.” This is
a. a click-on agreement.
b. a default agreement.
c. an attribution agreement.
d. a shrink-wrap agreement.
SuperMeds Corporation has just developed a new drug that controls severe acne. The
drug is not approved by the FDA for use in the United States because it contains a
chemical known to produce negative side effects after many years of continuous use.
SuperMeds finds that it can profitably sell the drug in Mexico because the questionable
chemical is not banned there. Whether it is ethical to sell the drug in Mexico depends
on
a. the number of years before side effects show up.
b. the number of potential customers.
c. which legal standards are applied.
d. which ethical standards are applied.
Food Packaging, Inc., agrees to sell 50,000 6-ounce yogurt containers to Golden Dairy
Company. Food can obtain only 20,000 of the 6-ounce containers, but also ships 30,000
more expensive 8-ounce containers for the same price. Under these circumstances,
Golden
a. cannot reject delivery, and Food cannot later replace the containers.
b. cannot reject delivery, but Food can later replace the containers.
c. may reject delivery, and notice to Golden of Food’s intent to cure will give Food a
reasonable time to replace the containers.
d. may reject delivery, but Food cannot later replace the containers.
Brandy forges Caleb’s signature on a check “payable to the order of Brandy” drawn on
Caleb’s account in Downtown Bank. Caleb’s forged signature is
a. effective if an innocent third party accepts the check.
b. effective to the degree that it matches Caleb’s genuine signature.
c. effective to the extent that Downtown Bank debits Caleb’s account.
d. not effective.
Liz offers to sell Jock her iPad for $500 without any accessories. Under the mirror
image rule, Jock’s response will be considered an acceptance if
the terms of the acceptance
a. exactly mirror those of the offer.
b. change the items offered, but do not change the price.
c. change the price, but do not change the items offered.
d. change both the price and the items offered.
Elton presents an uncertified check for payment more than six months after its date. The
check was drawn by Dakota on her account in First Community Bank. The usual
banking practice in such a case is to
a. cash the check.
b. consult the customer.
c. refuse to cash the check.
d. ask the payee what he or she would prefer.
Four-Square Construction Company enters into a contract with Ben to remodel Carol’s
Home Store, using products from Delta Building Supplies. Eatery Caf is next to Carol’s
Home Store. The remodeling is a gift from Ben to Carol.
Refer to Fact Pattern 15-1. The value of Eatery’s property will increase after Carol’s
store is remodeled. Eatery is
a. a delegatee.
b. an assignee.
c. an incidental beneficiary.
d. an intended beneficiary.
Mango Corporation believes that Melon Corporation engages in anticompetitive
behavior in an attempt to drive Mango and its other competitors out of the market.
Antitrust laws can be enforced against Melon by
a. Mango and its competitors only.
b. Mango, its competitors, and the Federal Trade Commission only.
c. Mango, its competitors, the Federal Trade Commission, and the U.S. Department of
Justice.
d. the Federal Trade Commission and U.S. Department of Justice only.
A Massachusetts state statute imposes a prison term, without a trial, on all street
performers who operate in certain areas. A court would likely review this statute under
the principles of
a. the commerce clause.
b. the equal protection clause.
c. the due process clause.
d. the First Amendment.
Four-Square Construction Company enters into a contract with Ben to remodel Carol’s
Home Store, using products from Delta Building Supplies. Eatery Caf is next to Carol’s
Home Store. The remodeling is a gift from Ben to Carol.
Refer to Fact Pattern 15-1. Carol is
a. a delegatee.
b. an assignee.
c. an incidental beneficiary.
d. an intended beneficiary.
Inferior Company, which is based on South Carolina, makes and sells products that are
poorly made. Jack, who is a resident of North Carolina, buys an Inferior product and
suffers an injury through its use. The diversity of citizenship between these parties
means that
a. federal and state courts have concurrent jurisdiction.
b. federal courts have exclusive jurisdiction.
c. no court has jurisdiction.
d. state courts have exclusive jurisdiction.
Justice For All, a political organization, files a claim to challenge a Colorado statute that
limits the liberty of all persons to broadcast “annoying” radio commercials. This claim
is most likely based on the right to
a. equal protection of the law.
b. indictment.
c. procedural due process.
d. substantive due process.
Penny Stock Company faxes ads to Quality Personnel Corporation and other businesses
without the recipients’ permission. This is
a. illegal.
b. legal and smart because such ads are generally cheap.
c. legal but not smart because such ads are generally ineffective.
d. legal but only potentially smart, depending on the response rate.
Over a forty-year period, Ellen worked in a variety of jobs. She was also occasionally
unemployed, briefly hospitalized, and suffered a temporary disability. She retired last
year. The key federal law on all of these subjects is
a. the Consolidated Omnibus Budget Reconciliation Act.
b. the Employee Retirement Income Security Act.
c. the Federal Insurance Contributions Act.
d. the Social Security Act.
Loan flipping
a. may result in prepayment penalties for the borrower.
b. is always a good idea for a homeowner.
c. rarely benefits the lender.
d. usually benefits both the borrower and the lender.
Clarice pays Damien $10,000 to design an ad campaign for her Sweetwater Coffee
Stand chain. The next day, Damien tells Clarice that he has accepted a job in New York
and cannot design her campaign. She files a suit against Damien. As compensatory
damages, she can recover
a. $100,000.
b. $10,000.
c. $1,000.
d. $0.
Following a union election campaign by Gamester Craftworkers Union among the
employees of Vivid Video, Inc., the union does not obtain a majority vote in the
election. This most likely violates
a. federal labor law.
b. federal elections law.
c. federal employment discrimination law.
d. no federal law.
Used Car Lot’s salesperson Vic offers to sell Will, who is twenty years of age, a car
about which Vic intentionally misrepresents its past use and repairs. In reliance on the
misrepresentations, Will buys the car. To prove fraud in this transaction, Will does not
have to show that
a. Vic intentionally deceived Will.
b. Vic misrepresented several material facts.
c. Will is under twenty-one years of age.
d. Will justifiably relied on Vic’s misrepresentations.
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.
Burt obtains from Capital Insurance Company a policy that provides that if the parties
cannot agree on the amount of a loss covered by the policy, an estimate of the value by
an impartial third party can be demanded. This is
a. an antilapse clause.
b. an arbitration clause.
c. an appraisal clause.
d. an incontestability clause.
If a contract benefits a third party only incidentally, the third party will not have the
power to enforce the contract.
There are legal questions involved when considering ways to raise capital so a business
can grow.
State regulations take precedence over conflicting federal regulations.
A tort is the only type of wrong that exists in the law.
The day-to-day business of a corporation is managed by officers employed by the board
of directors.
A suggestive use of ordinary words may be trademarked.
When workers must be laid off, an employer must consider union participation in
deciding whom to fire.
The offense of monopolization does NOT require the intent to monopolize.
A covenant not to compete included in the sale of an ongoing business is unenforceable.
Grapple Market Share Corporation would like to know what information federal
agencies have about Grapple’s operations, so that the firm will know what its
competitors may be able to learn about it. Can Grapple require the agencies to disclose
whatever information they may have concerning it? If so, how should the firm make its
request? What federal law applies? Is any information exempt?
A corporation does NOT possess the same right of access to the courts as citizens.
The U.S. Tax Court is a trial court with original jurisdiction.
A patent and a copyright are examples of intellectual property, but a trademark is not an
example of intellectual property.
Quasi contracts are often used by courts, even in cases where there is an actual contract
that covers the area in controversy.
Under the implied warranty of habitability, a tenant impliedly warrants that he or she
will “habitate” on the premises during the term of the lease.
A fixed-term tenancy does not terminate.
An innocent party may NEVER rescind a fraudulent contract.
Some risks are obvious but, with respect to the duty of care required to establish
negligence, a warning is always necessary.
A collateral promise is one made by a third party to assume the debts or obligation of a
primary party to a contract if the primary party does not perform.
A warranty of good title means that a seller warrants that they have valid title to the
goods and that the transfer of the title is rightful.