A contract between Lou and Mike requires a transfer of stolen goods for counterfeit
currency. This contract is
a. enforceable.
b. void.
c. voidable at the option of either party.
d. voidable at the option of the party having less bargaining power.
Workbilt Hardware Company employs workers, including Gina, at six locations in two
states. Workbilt’s discharge of Gina outside the terms of an employment contract may
result in
a. Workbilt’s liability for damages.
b. Gina’s deportation under the Immigration Act.
c. discontinuance of Gina’s health-plan coverage.
d. monitoring Workbilt’s communications for privacy violations.
Cory employs Daily Delivery Agency as an agent under a written agreement that
describes the rights and duties of both parties. This is
a. apparent authority.
b. equal authority.
c. express authority.
d. implied authority.
Owen is a federal judge whose judicial decisions are part of case law, which does not
include interpretations of
a. administrative regulations..
b. constitutional provisions..
c. statutes..
d. the media.
Allie applies for a life insurance policy with Long Life Insurance Company. The
consideration Allie pays to Long Life is a(n)
a. premium.
b. fee.
c. policy.
d. insurable interest.
Mary creates a t-shirt design that expresses her support for a presidential candidate and
distributes t-shirts to all her friends. The t-shirts are an example of
a. unprotected speech.
b. controlled speech.
c. symbolic speech.
d. illegal speech.
Maggie and Nate enter into a contract for the sale of car, but Nate later refuses to
deliver the goods. Maggie asks a court to order Nate to perform as promised. Ordering a
party to perform what was promised is
a. an equitable remedy.
b. an unenforceable demand.
c. a remedy at law.
d. a type of harm.
Sally contracts with Tasty Pizza Company to deliver its products. Both parties change
their minds, however, and inform each other that they would like to cancel the contract.
Refer to Fact Pattern 10-3. Sally and Tasty
a. may rescind their entire contract.
b. may rescind their contract to the extent that it is executory.
c. must perform their entire contract.
d. must perform the part of their contract that is executory.
Based on Nan’s conduct, Odel reasonably believes that Poppy has the authority to act
on Nan’s behalf even though Poppy does not have the actual authority to do so. In this
circumstance, Poppy has
a. apparent authority.
b. express authority.
c. implied authority.
d. no authority.
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.
On behalf of Bay Oyster Company, Celia types her name at the bottom of an e-mail
purchase order and submits the order to Deepwater Parts Company. Under the UETA,
qualifying Celia’s name as her ‘signature” is
a. attribution.
b. cybernotarization.
c. acceptance.
d. agreement.
Ian buys a cell phone in Jiffy Mart, using the means that accounts for more retail
payments than any other. This means of payment is
a. a commercial check.
b. a debit card.
c. a personal check.
d. a cash.
Drew and Earl are brothers. They agree to act as guarantors on a loan made by their
sister, Flo. Flo defaults on the payments and Drew refuses to pay. Earl pays the debt.
Earl can recover from
a. Drew and Flo under the right of proportionate liability.
b. Drew and Flo under the right of reimbursement.
c. Drew under the right of contribution and Flo under the right of subrogation.
d. no one, because the parties are brothers and sister.
The Constitution sets out the authority and the limits of the branches of the government.
The term checks and balances means that
a. Congress writes checks and the other branches balance the budget.
b. each branch has some power to limit the actions of the others.
c. the courts balance their authority to the other branches’ checklists.
d. the president “checks” the courts, which “balance” the laws.
A contract for a sale of a certain quantity of drum kits from Rimshot Drum Company to
Musicians Warehouse specifies Urban City as the place for delivery but leaves open the
particular address. Obliged to specify the address is
a. Rimshot Drum Company.
b. Musicians Warehouse.
c. the Urban City Chamber of Commerce.
d. the appropriate state officer (usually the secretary of state).
Windshield Repair Shop (WRS) promises to pay Vincent $1,000 a week to work for
WRS. Vincent accepts and quits his job with Ultra Glass. WRS fails to provide a job for
Vincent. Vincent has a cause of action based on
a. an illusory promise.
b. a release.
c. past consideration.
d. promissory estoppel.
Network Industries, Inc., wants to monitor its employees’ electronic communications.
To avoid liability under laws related to employee monitoring, Network should announce
the monitoring to
a. no one.
b. the employees.
c. the government.
d. the public generally.
Miklos employs Nathalie to handle a list of financial transactions on Miklos’s behalf.
This power will terminate on
a. any transaction causing a loss to Miklos.
b. Miklos’s death or incapacity.
c. Miklos’s sixty-fifth birthday.
d. Nathalie’s handling of one of each stipulated transaction.
Rita, the manager of the State University (SU) soccer team, orally agrees to lease a
certain number of specially made SU banners from Top Banners, Inc. This lease is
enforceable only if Top has made a substantial start on making the banners and
a. Rita agreed to the lease on behalf of the SU soccer team.
b. SU does not have other, similar banners available.
c. the banners are not suitable for others in the course of Top’s business.
d. the soccer season has not ended and SU goes to the finals.
To buy a stuffed cow, Ken executes a check “pay to Laura or bearer” and gives it to
Laura, who does not own a stuffed cow. This check is
a. negotiable.
b. nonnegotiable, because it does not indicate a specific payee.
c. nonnegotiable, because it may be a joke.
d. nonnegotiable, because Laura does not own a stuffed cow.
Carol enters into a contract to hire Joanne to paint a portrait of Carol’s favorite cat.
Joanne agrees to do the portrait to Carol’s satisfaction for $100. When Joanne finishes
the portrait, Carol announces that she is not satisfied with the portrait because it does
not look like her cat. Carol
a. must accept the portrait and pay Joanne $100.
b. must accept the portrait and pay Joanne $50.
c. must accept the portrait and pay Joanne $25.
d. does not have to accept the portrait or pay Joanne any money.
Two Japanese firmsMikato, Ltd., and Shuzushi, Ltd.enter into a joint venture in an
attempt to increase their market share of the U.S. auto market. If the joint venture is not
a per se violation of U.S. antitrust laws, a U.S. court could exercise jurisdiction over the
firms
a. if the joint venture has a substantial effect on U.S. commerce.
b. if the joint venture has any effect on U.S. commerce.
c. if the joint venture was entered into in the United States.
d. under no circumstances.
Mason creates a trust for his son, Newt, the beneficiary, to come into existence on
Mason’s death. This is
a. an living trust.
b. a constructive trust.
c. a resulting trust.
d. a testamentary trust.
Fact Pattern 32-1
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 32-1. Suppose that two weeks after GLC takes possession of the
equipment, Helpful and Interstate file financing statements, with Interstate filing first.
In that circumstance, the party with priority to the equipment is
a. GLC.
b. Helpful and Interstate proportionately.
c. Helpful only.
d. Interstate only.
Harbor Town enacts an ordinance to allow only a few street vendors to operate in
certain areas, for the purpose of reducing traffic. A court would likely review this
ordinance under the principles of
a. the commerce clause.
b. the equal protection clause.
c. the due process clause.
d. the First Amendment.
On April 1 Richard arranges to buy a sixteen-speed bike from his neighbor Phil for
$500. Phil agrees to deliver the bike on May 1. Richard writes a draft for $500 payable
to Phil on May 1. In this situation, the draft is a
a. certificate of deposit.
b. time draft.
c. sight draft.
d. promissory note.
Noah and Orin do business as Personnel Partners. In most states, for purposes of suing
and being sued, Personnel Partners would be treated as
a. an aggregate of the individual partners.
b. a natural person.
c. an independent entity.
d. a non-existent party.
Theo and Uma orally agree on the sale of Theo’s Fitness Center to Uma and note the
terms on a sheet of the center’s stationery, which includes the Center’s letterhead and
which only Theo signs. This agreement is most likely enforceable against
a. neither Theo nor Uma.
b. Theo and Uma.
c. Theo only.
d. Uma only.
Patricia commits an act via e-mail against Othman Finance Company, a business in
California, where the act is a cyber crime. Patricia resides in New York where the act is
not a crime. Prosecution of Patricia in California involves questions of
a. jurisdiction.
b. “maximum contacts.”
c. the immunity of Internet service providers.
d. encryption.
Cole is a shareholder of Donut Holes, Inc. Cole will be deemed to have a fiduciary duty
to Donut Holes and its minority shareholders if he has
a. a restriction on the transferability of his shares.
b. a right of first refusal.
c. a sufficient number of shares to exercise de facto control.
d. voting rights.
Krissa, a horse breeder, shows Maggie, a customer looking for a new stallion for her
breeding program, a stallion and tells her that the stallion is very fertile and can easily
breed twenty mares per year. Krissa’s statement is
a. an express warranty.
b. an implied warranty.
c. a warranty of title.
d. puffery.
If a seller asks a buyer to store nonconforming goods overnight, then the buyer is
entitled to reimbursement for the costs involved.
Economic need is always sufficient to constitute duress.
No state has adopted the Uniform Commercial Code in its entirety.
Expropriation usually violates generally observed principles of international law.
In a limited liability partnership, a partner can be exempt from personal liability for the
malpractice of other partners.
A security interest is enforceable only if the collateral is in the secured party’s
possession.
Letters of credit are formal contracts that are often used in international sales contracts.
A promise to give value in the future is NOT sufficient to confer the rights of an HDC
on one in possession of a negotiable instrument.
The management of Sport Shoes Corporation, a U.S. firm, wants to expand into foreign
investment and employment markets. They are considering either opening their own
production facility in a foreign country or entering into a licensing agreement with a
foreign firm. What are the advantages and disadvantages of each of these courses of
action?
If a debtor will not pay a judgment, a creditor can resort only to ‘self-help” to collect.
A corporation cannot be a member of a limited liability company.
Being a small-business owner means that you will never have to take on the role of
finance manager, marketing manager or accountant.
A drawer’s discharge in bankruptcy will defeat the claim of an HDC.
Patty, who is divorced, owns a house. She has no reasonable expectation of benefit from
the life of Quinn, her ex-spouse, but she applies for insurance on his life anyway. She
also obtains a fire insurance policy on the house, which she later sells. Five years later,
Quinn dies and the house is destroyed in a fire. Can Patty obtain payment on either the
death of Quinn or the loss of the house? Explain.
For products that are sold nationwide, the relevant geographic market encompasses the
entire United States.
To recover workers’ compensation, an employee must prove that an injury was the fault
of the employer.
All-Mart Discount Stores Corporation contracts to buy ten acres from Suburban
Enterprises, Inc., as a site for a new store. The contract calls for a “warranty deed.”
According to a survey that All-Mart commissions, one corner of an adjacent, enclosed
parking lot is on part of the property that Suburban is attempting to convey. Can
All-Mart avoid the contract? If so, on what basis? If not, why not?
The Truth-in-Lending Act applies to persons who, in the ordinary course of their
business, lend money, sell on credit, or arrange for the extension of credit.