An expression of opinion by a seller will not usually create a warranty.
An employer is not liable for the sexual harassment of an employee by the employee’s
supervisor.
UCC Articles 3 and 4 govern checks.
Restrictions on imports may include quotas.
If a seller is a merchant, and the seller holds the goods, the risk of loss passes to a buyer
when the buyer takes physical possession of the goods.
An independent contractor’s physical conduct is controlled, or subject to control, by his
or her employer.
In a bailment, possession of the property is transferred to the bailee.
A minor may disaffirm a contract only after attaining the age of majority.
Those who find abandoned property cannot acquire ownership rights through mere
possession of it.
For federal income tax purposes, one-member limited liability companies are
automatically taxed as sole proprietorships.
An effective offer requires reasonably certain terms.
Under a letter of credit, the issuer is bound to pay the beneficiary after the beneficiary
complies with the terms of the letter.
A deceased joint tenant’s interest in jointly held property passes to his or her heirs.
Promises of fact made during the bargaining process are not express warranties.
A director is a fiduciary of a corporation.
Officers are required to exercise a reasonable amount of supervision over the corporate
directors.
When a secured debt is paid, the secured party must file a termination statement
regardless of the goods’ classification.
Employers who provide pension plans for retired workers must comply with certain
standards in managing the plans.
The measure of damages for the breach of a contract for a sale of land depends on
which party breaches and when.
Trademark dilution requires proof that consumers are likely to be confused by the
unauthorized use of the mark.
A disclosed principal is not liable to a third party for contracts made by the agent acting
outside the scope of his or her authority.
It may be a crime to take another’s property, but it is not a crime to receive stolen goods.
A customer has sixty days from the date of receipt of a statement of an electronic
transfer to notify the financial institution of any errors.
A check “payable to the order of bearer” is neither an order instrument nor a bearer
instrument.
Quotas are limits on the amounts of goods that can be imported.
Under the doctrine of comparative negligence, both the plaintiff’s and the defendant’s
negligence are taken into consideration.
An oral stop payment order is valid for thirty days.
Restrictions on exports may include tariffs.
The courts can decide whether the other branches of government have acted within the
scope of their constitutional authority.
A court’s review of an arbitrator’s award may be restricted.
To recruit employees from other countries, an employer must first complete a
verification process.
Grady enters into a contract to buy 440 acres from Hollis to expand Grady’s ranch. If
Hollis breaches the contract, Grady’s normal remedy would be
A.damages.
B.quasi contract.
C.reformation.
D.specific performance.
Toni files a suit against Universal Media Corporation for defamation. Actual malice
must be shown for recovery of damages if Toni is
A.a corporate officer.
B.a non-employee.
C.a private individual.
D.a public figure.
Fact Pattern 11-2
Bell Medical Education Service enters into a contract to employ Chris as an instructor
for two years to begin May 1. One month before the term begins, Bell is underbid by a
competitor and loses a major client, Delta Hospital Center. Bell now refuses to hire
Chris.
Refer to Fact Pattern 11-2. Under the circumstances, with respect to damages, Chris can
A.bring an action immediately.
B.bring an action only after the contract’s two-year term begins.
C.bring an action only after the contract’s two-year term ends.
D.do nothing.
Uri and Vicky orally agree on the sale of Uri’s Nite Club to Vicky and note terms on a
pair of the Club’s napkins, which they both sign. A written memorandum evidencing an
oral contract that would otherwise be unenforceable must contain
A.every term.
B.the essential terms.
C.the preliminary terms.
D.the qualitative terms.
Fresh Seasonal Fruit Company has assets of less than $10 million and fewer than fifty
shareholders. Gourmand Pastries, Inc., has assets of more than $50 million and more
than five hundred shareholders. The Securities Exchange Act of 1934 applies to
A.Fresh Seasonal Fruit and Gourmand Pastries.
B.Fresh Seasonal Fruit only.
C.Gourmand Pastries only.
D.neither Fresh Seasonal Fruit nor Gourmand Pastries.
Orin is a shareholder of Pinkwater Corporation. In some states, Orin might incur
personal liability for unpaid Pinkwater debts if he
A.accepts a dividend knowing that it was paid from retained earnings.
B.buys stock for less than its fair-market value.
C.fails to fulfill his fiduciary duty to the majority shareholders.
D.sells his shares.
Ansel owns Bar-B Ranch. Ansel’s only son Cy owns Double-D Ranch in the same
county. Ansel gives 90 percent of the Bar-B to Etta, a short-term employee. This gift
A.may lack the required element of “donative intent.”
B.may lack the required element of “donor’s acknowledgement.”
C.may lack the required element of “heir’s acquiescence.”
D.meets all of the requirements for an effective gift.
Nick and Roberta contract for the sale of computer equipment, reserving the right to
alter a particular provision in the contract. The rights of any third party beneficiary of
that contract are
A.not affected by the reservation.
B.limited to the extent of the reservation.
C.limited only if the beneficiary agrees to the reservation.
D.none of the choices.
CPA Accounting, LLC, is a limited liability company. If the law in CPA’s state is like
the law in most states, unless the members have agreed otherwise, participants in the
firm’s management will be considered to include
A.all members.
B.no member.
C.one member.
D.two members, including at least one general partner.
Tracy borrows $30,000 from Secure State Bank. The lender accepts Tracy’s equity in
her home as collateral, which can be seized if the loan is not repaid on time. With
respect to any proceeding that occurs if Tracy fails to make the payments, this loan is
subordinated. This means that it
A.takes a higher priority.
B.takes a lower priority.
C.has the same priority as the primary mortgage.
D.fluctuates with the market value of the property.
Urbana performs a contract with Virgil to add a sun porch to Virgil’s house, but Virgil
does not pay. In most states, Urbana can create a lien and place it on Virgil’s property by
filing
A.a written guaranty contract.
B.a writ of attachment.
C.a writ of execution.
D.a written notice of lien.
Dahlia borrows $125,000 from Clearview Credit Union to buy a home. The interest rate
and other terms that are required to be disclosed under federal law must be
A.based on uniform formulas of calculation.
B.expressed in lenders’ language.
C.set out in a formula unique to each loan.
D.stated in “legalese.”
Kris contracts to work exclusively for Little Manufacturing Company during May for
$5,000. On April 30, Little cancels the contract. Kris finds another job during May but
earns only $3,000. Kris files a suit against Little. As compensatory damages, Kris can
recover
A.$3,000.
B.$2,000.
C.$1,000.
D.$0.
Sam is a judge hearing the case of Local Co. v. National Corp. Applying the relevant
rule of law to the facts of the case requires Sam to find previously decided cases that, in
relation to the case under consideration, are
A.as different as possible.
B.as similar as possible.
C.at odds.
D.exactly identical.
Senator Wyden and other politicians want to restrict the flow of technologically
advanced products and data from the United States to other countries. To restrict or
encourage exports, Congress can
A.do nothing.
B.assess antidumping duties.
C.impose export taxes.
D.set export quotas.
Fact Pattern 9-1
Dave’s Hobby Town and Eva’s Yarn Shoppe are adjacent stores with adjoining parking
lots. Dave offers Eva a discount on purchases from Dave’s store if Eva will not tow the
cars of Dave’s customers who park in Eva’s lot.
Refer to Fact Pattern 9-1. Dave’s discount is legally sufficient consideration
A.because it is a promise of something of value.
B.only if Dave adds a cash rebate.
C.only if Eva uses it.
D.under no circumstances.
Raw Resources Corporation authorizes Stefan, its employee, to oversee its mining
operation. In the course of this employment, Stefan commits a tort. Liability for this tort
most likely rests with
A.neither Raw Resources nor Stefan.
B.Raw Resources and Stefan.
C.Raw Resources but not Stefan.
D.Stefan but not Raw Resources.
Elmer can write checks on his account at Finance Bank. Gina steals the checks, forges
Elmer’s signature, and cashes the checks at Finance. The bank is excused from any
liability if, after receipt of the first forged check, Elmer fails to report the forgeries
within
A.five business days.
B.fourteen consecutive days.
C.one year.
D.three years.
Big Screen Video Corporation sells high-definition television sets. Under most
circumstances, Big Screen Video will be presumed to have warranted that its title to the
TVs is
A.the same as each brand’s name.
B.none of the choices-a warranty of title is not presumed.
C.good and valid.
D.the best that money can buy.
Nina, a high school teacher, requires Milo and her other students to submit their
assignments to a plagiarism service to be compared to the contents of an online
database of scholarly works. The assignments are also archived in the database. A
federal court is most likely to find that this
A.infringes the students’ copyright interests.
B.qualifies as “fair use” and does not infringe the students’ copyrights.
C.falls under the definition of “loss” in the Computer Fraud and Abuse Act.
D.fits within the “damages” clause of the Virginia Computer Crimes Act.
Ric designs a new computer storage drive, which he names “Sci Phi.” He also writes the
operating manual to be included with each final product. Ric could obtain patent
protection for
A.the storage drive.
B.the “newness” of the storage drive.
C.the name.
D.the operating manual.
John writes a check to Kay as payment for a DVD player but soon discovers the player
is broken. He goes to the drawee bank and orally authorizes Larry, a bank officer, to
stop payment on the check. This order is valid for
A.fourteen days.
B.fourteen months.
C.thirty days.
D.six months.
Dru signs a check “pay to the order of Eppie” drawn on Dru’s account in First Federal
Bank. Greta forges Eppie’s indorsement. First Federal pays the check. Most likely
A.Dru will be liable for the amount.
B.Eppie will have to pay Dru for the amount.
C.First Federal will have to recredit Dru’s account.
D.the Federal Reserve will reimburse all parties for their costs.
Mayfair Company offers to sell a certain mall to Galleria Stores, Inc., for a certain price
if it accepts before 10 a.m. Monday. A contract is formed if Galleria’s acceptance is
received
A.before 10 a.m. Monday.
B.before midnight Monday.
C.before twenty-four hours of 10 a.m. Monday.
D.within a reasonable time of 10 a.m. Monday.
Heidi and Ian are directors and shareholders of Globe Software, Inc. Heidi’s written
authorization to Ian to vote Heidi’s shares at a Globe shareholders’ meeting is
A.a violation of the duty of loyalty.
B.a preemptive right.
C.a proxy.
D.a quorum.
Employment Sources, Inc., enters into a contract with Fred. If Fred is a minor, this
contract is most likely
A.enforceable.
B.unenforceable.
C.void.
D.voidable.
Fact Pattern 18-1
Excel Vehicles, Inc., makes and sells automobiles to auto dealers, including Fine Auto
Sales. Fine sells the cars to consumers and businesses.
Refer to Fact Pattern 18-1. A car in Fine’s possession is probably
A.a consumer good.
B.an accession.
C.equipment.
D.inventory.
To pay for a new desk bought at Office Outlet, Pete makes a check payable to “Offs
Outlet.” A proper indorsement of the check is
A.”Office Outlet” only.
B.”Offs Outlet” only.
C.”Office Outlet” or “Offs Outlet.”
D.”Pete” only.
Denise and Elke do business as Final Curtain Decorators. In most states, for purposes of
holding title to property, this partnership would be treated as
A.an aggregate of the individual partners.
B.a natural person.
C.an entity.
D.a non-existent party.
Doctors Medical Clinic orders 1,000 bandages from Emergency Supplies Company but
fails to specify the sizes. The bandages are delivered in an assortment of sizes. Doctors
Medical Clinic may
A.accept the bandages “as is” only.
B.accept the bandages “as is” or reject the entire shipment only.
C.accept only the bandages that it wants and reject the rest.
D.reject the entire shipment only.
Erin and Dooley, a married couple, borrow $120,000 from Capital & Credit Bank to
buy a home. When Erin and Dooley divorce, they are unable to make payments on the
mortgage. The market value of the home has declined to less than the balance of the
loan. Capital & Credit agrees to a sale of the property for this amount. This is
A.a deed in lieu of foreclosure.
B.a home equity loan.
C.a reverse mortgage.
D.a short sale.