Mabel and Nahim want to start up and incorporate a new business enterprise. The first
step in the incorporation process is to
a. choose and file a corporate name with a state office.
b. draft the bylaws to govern the corporation.
c. hold an initial board of directors meeting.
d. prepare and file articles of incorporation with a state office.
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.
Elmores offer was terminated by
a. Elmore.
b. Ford.
c. Grace.
d. no oneElmores offer is still open.
With a bill of lading, Cartage Common Carrier Company acknowledges possession of
certain goods and contracts to deliver them. Cartage is
a. a bailee.
b. a buyer in the ordinary course of business.
c. a good faith purchaser for value.
d. an F.O.B.
Mary Kate Corporation allows Ashley Company to use Mary Kates trademark as part of
Ashleys domain name. This is
a. a license.
b. a likelihood of consumer confusion.
c. cybersquatting.
d. trademark dilution.
Vincenzo is a pilot for Wayfarer Airlines. Wayfarers policy is to restrict Vincenzo and
its other pilots from flight responsibilities after a certain age. This is most likely
a. a legitimate bona fide occupational qualification.
b. discrimination on the basis of age.
c. association discrimination.
d. discrimination on the basis of disability.
Longhaul Freight, Inc., files a suit against Midge, an accountant, under the antifraud
provisions of the Securities Exchange Act of 1934 and Rule 10b-5 of the Securities and
Exchange Commission. To succeed, Longhaul must show that Midge
a. acted with scienter.
b. bought or sold a security.
c. is incompetent.
d. knows nothing about securities.
Connie, Drew, and Ellen are the general partners of Foreign Auto Repair, a limited
partnership. Connie dies. The partnership can
a. continue only after a distribution of its assets.
b. continue only as a general partnership.
c. continue only if Drew and Ellen consent.
d. not continue because Connies death dissolves the firm.
Espresso Roast Company hires Forrest to work on Espressos shipping dock, checking
outgoing loads and dispatching Espressos drivers. With respect to Forrest, Espresso is
most likely
a. an agent.
b. an independent contractor.
c. a principal.
d. a work for hire.
Business Properties, Inc. (BPI), offers to sell a warehouse to Corporate Investments.
Corporate says that it will pay BPI $100 to hold the offer open for three business days.
This
a. creates an illegal contract by adding a clause to BPIs offer.
b. makes the offer irrevocable for three days if BPI accepts.
c. negates BPIs offer by changing the price term.
d. voids BPIs offer by extending the time term.
Dolph is an employee of Enterprise Company (EC). The federal government raids EC
and determines that Dolph and many of his co-workers are illegal immigrants, whom
are then detained and later deported. Frey, Dolphs EC manager, is imprisoned for
federal law violations related to the immigrants hiring. Unable to attract replacement
workers at a competitive wage, EC shuts its doors. Reasons for reforming U.S.
immigration laws include
a. the disruption of business caused by federal raids on employers.
b. the economic conditions prompting immigration to the United States.
c. the imprisonment of those who violate U.S. laws.
d. the low wages offered by employers for jobs that should pay more.
Senator Smith 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.
Attorneys are required to be familiar with well-settled principles of law applicable to a
casa.
Coco is considering forms of business organization for her concessions businessCocos
Cupcakes. Most states require that a limited liability company have at least
a. no minimum number of members.
b. at least one member.
c. at least two members.
d. at least three members, including at least one general partner.
GR8 Skates Company makes and sells a pair of skates to Homer. GR8 fails to exercise
“due care to make the skates safe, and Homer is injured as a result. GR8 is most likely
liable for
a. assumption of risk.
b. knowledgeable use.
c. negligence.
d. foreseeable misuse.
George has a badly infected right foot. Herb, Georges physician, prescribes amputation.
George agrees. During the operation, Herb amputates the left foot. In Georges suit
against Herb, Georges best theory for recovery is
a. assumption of risk.
b. negligence per se.
c. res ipsa loquitur.
d. strict liability.
During a trial in Genes suit against Homer over the use of Genes lakeside cabin, Genes
attorney asks questions of the plaintiffs witness Illya. This is
a. a cross-examination.
b. a deposition.
c. a direct examination.
d. an interrogatory.
The case of Max v. National Credit Co. is heard in a trial court. The case of O! Boy! Ice
Cream Co. v. Pickled Peppers, Inc., is heard in an appellate court. The difference
between a trial and an appellate court is whether
a. a trial is being held.
b. the court is appealing.
c. the parties question how the law applies to their dispute.
d. the subject matter of the case involves complex facts.
Tippi believes that she needs to obtain a discharge in bankruptcy through an individuals
repayment plan. This proceeding can be initiated by a filing of a petition by
a. a creditor.
b. a debtor.
c. a corporation.
d. a partnership.
On May 1, City Auto & Truck Sales agrees to sell a car to Dino. Five days later, Dino
refuses delivery and cancels the contract. City is entitled to
a. force Dino to accept the car.
b. recover any damages from Dino but not resell the car.
c. resell the car and recover any damages from Dino.
d. resell the car but not recover any damages from Dino.
Quia and Rafi form SA, LLC, a limited liability company, to operate Superior Athletics,
a fitness center. Compared to a sole proprietorship and a general partnership, a limited
liability company has limited
a. business purposes.
b. investment opportunities.
c. personal liability.
d. requirements.
Walt, a consumer, needs medical information. On the Internet, Walt goes to social
network to consult with other consumers about diagnosis and treatment. Due in part to
the Food and Drug Administrations rules, pharmaceutical companies are reluctant to
advertise on the Web. Thus Walt is most likely to find
a. accurate information online.
b. all of the necessary information in a tweet.
c. incomplete information in traditional outlets, such as television.
d. incorrect information online.
Dog n Cat Company makes and sells pet supplies, including toys and chew items. One
of the chew items is believed to be hazardous. The appropriate government agency may
require Dog n Cat to
a. export the item and sell it only abroad.
b. increase the price to cover the cost of any injuries or damage.
c. reduce the price to indicate the hazard to consumers.
d. remove the item from the market.
Through careless manufacturing practices, Insta-Market Company makes and sells
unsafe products to Jess and other consumers. This may be subject to sanctions under
a. federal and state law.
b. federal law only.
c. no law, according to the principles of freedom to contract.
d. state law only.
The graphics used in Go! a handheld computer game featuring racing cars, is protected
by
a. copyright law.
b. patent law.
c. trademark law.
d. none of the choices.
Freida and Gail enter into a bilateral contract, which is created when Freida gives a
promise in exchange for Gails
a. payment of money only.
b. performance of a particular act only.
c. promise only.
d. prudent awareness only.
Superior Health Clubs marketing strategies entice many of Tone-Up Exercise Clubs
members to change clubs. After less than a year in business, Superior surpasses
Tone-Up in numbers of members. Superior is liable for
a. appropriation.
b. conversion.
c. no tort.
d. wrongful interference with a business relationship.
Urban City and Thru-way Construction Company enter into a contract that includes
calculations. Urban, whose engineer, Sergei, compiled the figures, discovers later that
some numbers were added incorrectly, but Thru-way refuses to make changes. Urban
can
a. not rescind the contract.
b. rescind the contract on the basis of fraud.
c. rescind the contract on the basis of mistake.
d. rescind the contract on the basis of economic duress.
The Merit Systems Protection Board issues a rule. Like other administrative agencies
“legislative rules, this rule is as
a. binding as a law passed by Congress.
b. persuasive as an experts opinion.
c. suggestive as a newspapers editorial.
d. unenforceable as a salespersons puffery.
Boyce 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.
Ruth is a supervisor for Subs & Suds, a restaurant. Tim is a Subs employee. The owner
announces that some employees will be discharged. Ruth tells Tim that if he has sex
with her, he can keep his job. This is
a. harassment on the basis of sexual orientation.
b. not harassment.
c. quid pro quo harassment.
d. same-gender harassment.
Parker owns and operates Rancho Mirage Corporation, a destination resort in Arizona
that features horseback riding and bunkhouse accommodations. The Constitution
provides that no person shall be deprived of “life, liberty, or property without due
process of law. Included as “legal persons under this clause are
a. the bunkhouses and other “manmade creations.
b. the corporation and Parker.
c. horses and other “beings in nature.
d. none of the choices.
Nano Games Corporations creditors agree to a workout with the firm. This is
a. an agreement to pay a debt dischargeable in bankruptcy.
b. an accountants summary of a debtors financial situation.
c. a privately negotiated adjustment of creditor-debtor relations.
d. a reorganization of corporate debts and debtors.
Dylan enters into a contract to manage the operations of Cashs accounting office for
one year, renewable for subsequent one-year terms. If this contract is discharged like
most contracts, it will be
a. canceled.
b. compromised.
c. altered.
d. performed.
Leslie, an accountant, enters into a contract to provide services to Marty. Leslie does
not finish the work within the contracts deadline. Leslie is
a. liable for breach of contract.
b. not liable, because Leslie is a professional.
c. not liable, because Leslies failure must have been Martys fault.
d. not liable, because the work took longer than foreseen.
Fanny tells Eden that she will sign a lease if it includes a clause permitting Fanny to ex-
tend the lease at the same amount of rent. Fannys intent to sign the lease is determined
by reference to Fannys
a. assumptions.
b. beliefs.
c. unspoken opinions.
d. words and action.
By delegating some of its authority to make and implement laws, Congress violates the
U.S. Constitution.
A court will not review an administrative agencys decision until the case is “ripe for
review.
Whenever the parties to an international transaction fail to specify in writing the precise
terms of the contract, the United Nations Convention on Contracts for the International
Sale of Goods (CISG) will be applied.
No tenant has a qualified right to the exclusive possession of leased real property.
A court, after notice and a hearing, may dismiss a case under reorganization “for cause.
Business ethics applies only to the owners, operators, and employees of corporations.
Filing a financing statement with the appropriate public office is the only way to perfect
a security interest.
Voir dire is a process for presenting evidence in a case.
A firm may have a legitimate reason for imposing a territorial or customer restriction.
A person who keeps a domestic animal is always strictly liable for any harm that the
animal inflicts.
The unauthorized use of anothers mark in a domain name is generally permissible
because the Internet is vast.
A contract must be in writing to be enforceable if performance is impossible within one
year.
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.
An unconscionable contract is a contract entered into unconsciously.
Remedies under the UCC are cumulative.
When an agent fails to perform his or her duties, liability for breach of contract may
result.
Under the mailbox rule, an acceptance takes effect at the time it is sent.
A demand instrument is overdue on the day after its date.
A cooperative must be incorporated.