Beans Coffee & Cocoa Company makes and sells a chocolate-flavored coffee drink
under the name “CoCoCafe.” Darkroast Java, Inc., later markets a similar tasting drink
under the name “KoKoKafe.” This is most likely
a. copyright infringement.
b. patent infringement.
c. trademark infringement.
d. a theft of trade secrets.
Doc’s Sports Club enters into a franchise agreement with Elite Fitness Centers that
provides for termination at any time for “cause.” Doc’s fails to meet Elite’s “Friends and
Family” membership sales quota. Is this “cause” for termination? Explain.
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.
Pat and Quint sign a five-year partnership agreement to do business as “Pat’s
Landscaping Service.” At the end of the fifth year, they decide to continue without
specifying a new term. This partnership is terminable
a. at any time by either partner.
b. only after an additional five-year term.
c. only if Pat dissociates from the firm.
d. only if Quint dissociates from the firm.
Frothy Beverage Corporation is a public company whose shares are traded in the public
securities markets. Under the Securities Act of 1933, Frothy is required to
a. contribute to the operations of national stock exchanges.
b. disclose financial and other information about its securities.
c. engage in market surveillance to deter undesirable practices.
d. solicit proxies for voting.
To adjust debt and institute a repayment plan, Rolf, a family farmer, may file a petition
in bankruptcy under the Bankruptcy Code’s Chapter
a. 1)
b. 3)
c. 5)
d. 12)
Spencer Hydraulics Corporation’s ethics committee is asked a business ethics
questionshould the firm bid low to obtain a contract that it knows it can fulfill only at a
higher price? A practical method to investigate and solve this question involves all of
the following steps except
a. absolution.
b. decision.
c. inquiry.
d. justification.
Briana, an employee of Cotillion Bank, is charged with embezzlement, which requires
a. fraudulently appropriating another’s property.
b. obtaining lawful possession of property.
c. physically taking property from its owner.
d. the use of force or fear.
Office Applications Company (OAC) orders six laser printers from Printing Products,
Inc. (PPI), to be delivered by PPI. Before PPI’s truck arrives with the goods, OAC tells
PPI it will not pay. The printers are lost in transit. The loss is suffered by
a. OAC only.
b. OAC to the extent of a deficiency in PPI’s insurance coverage only.
c. PPI to the extent of a deficiency in OAC’s insurance coverage only.
d. PPI only.
Tomato Farms (TF) offers to sell United Grocers, Inc., a boxcar load of tomatoes. The
offer is sent via fax. An acceptance is required urgently. It would be most reasonable for
United to accept via
a. a fax, a letter, or a phone call to TF within two weeks.
b. a fax sent to TF as soon as the offer is received.
c. a letter mailed to TF within two days.
d. a phone call to TF within five business days.
To assist in detecting illegal bribes, Cut Rite Contractors, Inc., and all U.S. companies,
must
a. conceal financial records that reveal past bribes.
b. keep records that “accurately and fairly” reflect financial activities.
c. make bribes through third parties rather than directly to officials.
d. permit payments to foreign officials that are unlawful in that country.
Kerin obtains a property insurance policy for her art collection from Lawton Insurance
Company. Kerin can cancel the policy
a. at any time.
b. only at the end of a period for which a premium has been paid.
c. only if Kerin no longer has an insurable interest in the property.
d. only on advance written notice.
Dag is the secured party in a secured transaction with Elmo. In this transaction, Dag
a. has a security interest.
b. owes payment.
c. owes performance.
d. owns collateral.
Gail enters into a contract with Hi-Price Appliances, Inc. In a suit between the parties
over payment under the contract, Gail claims that a certain clause is unconscionable. If
the court agrees, it may
a. refuse to enforce the contract, enforce the contract without the disputed clause, or
limit the application of the disputed clause.
b. enforce the contract without the disputed clause only.
c. limit the application of the disputed clause only.
d. refuse to enforce the entire contract only.
USA Oil Corporation signs an instrument that states it is being executed “in accord with
a contract for the purchase of 4,000 barrels of oil dated May 1.” This instrument is
a. negotiable.
b. nonnegotiable, because information about the sale must be obtained from another
source.
c. nonnegotiable, because it states an express condition to payment.
d. nonnegotiable, because the terms of the sale are not clear.
Fact Pattern 22-1
Ewa signs an instrument unconditionally promising to pay to “First State Bank” $5,000
with interest in installments with the final payment due June 1, 2012.
Refer to Fact Pattern 22-1. With respect to this instrument, First States Bank is
a. the drawee.
b. the drawer.
c. the maker.
d. the payee.
State Bank receives a check drawn by Tricia. The check is received after the established
“cutoff” hour. Payment can be postponed without dishonor
a. indefinitely.
b. under no circumstances.
c. unless Tricia personally demands acceptance.
d. until the close of the next business day.
Superior-Plus Properties, Inc., and Topps Construction Company sign a contract that
specifies the amounts to be paid for a building project at various stages and on its
completion. Additional compensation may be justified by
a. any business obstacles that arise after the time of the contract.
b. changes in the market price of needed materials during the contract.
c. extraordinary difficulties unforeseen at the time of the contract.
d. no circumstances.
Dee, an accountant, does not work for Emergent Company, but wrongfully obtains
inside information concerning Emergent. Based on the information, Dee buys and sells
Emergent stock for personal gain. The Securities and Exchange Commission prosecutes
Dee, arguing that she is liable because she stole information rightfully belonging to
another. This argument is
a. the blue-sky theory.
b. the misappropriation theory.
c. the red-herring theory.
d. the tipper/tippee theory.
Jaime operates Internet gambling sites in countries where this is legal. Jaime accepts
e-payments at the sites and pays winnings through foreign-based banks. U.S. federal
law bars
a. using e-payments at online gambling sites.
b. placing bets in countries where Internet gambling is legal.
c. paying gambling winnings through foreign-based banks.
d. none of the choices.
Gina, a minor, enters into a contract to buy a tractor from Herb, an adult. If the deal is
set aside, restoring Gina and Herb to the positions they held before the contract is
required in
a. all states.
b. most states.
c. no states.
d. some states.
Penn files a suit against Roadway Sign Company While the suit is pending, Roadway
consolidates with Synchronized Signal Corporation to form Traffic Management, Inc.
Now, liability in the suit, if any, rests with
a. Traffic.
b. Roadway and Synchronized.
c. Penn.
d. no one.
Business Markets Coalition (BMC), a political lobbying group, wants a certain policy
enacted into law. If BMC’s policy conflicts with the U.S. Constitution, a law embodying
it can be enacted by
a. any state legislature and Congress.
b. any state legislature but not Congress.
c. Congress but not any state legislature.
d. none of the choices.
Uri is an employee of Verity Security Services. For Uri to obtain the benefits of federal
wage-hour requirements, Verity must be engaged in
a. business activity.
b. employment at will.
c. international commerce.
d. interstate commerce.
Carl sells Direct Marketing Enterprises, a sole proprietorship, to Erv. This is a transfer
of
a. a license.
b. a trade name.
c. the formula to make a product.
d. the ownership of the business.
On May 1, Doug signs a check that is payable to the order of Extra Credit Corporation
and that is dated July 1. This check is
a. negotiable.
b. nonnegotiable, because it is payable to Extra Credit Corporation.
c. nonnegotiable, because it is postdated.
d. nonnegotiable, because it is signed by Doug.
Secure Investments, Inc., a U.S. firm, expands into international markets through a joint
venture. In this situation, Secure owns
a. all of the operation, and its profits and liabilities.
b. all of the operation, and none of its profits and liabilities.
c. none of the operation, and none of its profits and liabilities.
d. part of the operation, and shares its profits and liabilities.
QuizBooks LLC is a limited liability company. Like any other LLC, unless QuizBooks
chooses otherwise, the firm will be taxed as
a. a corporation.
b. a joint venture.
c. a partnership.
d. a sole proprietorship.
Expert Capital Company and Frugal Financial Bank are secured parties with security
interests in property owned by Grande Corporation. Between these security interests,
the first to be filed or perfected has priority over other filed or perfected security
interests in
a. most circumstances.
b. no circumstances.
c. states that have not adopted Article 9 of the UCC.
d. states that require a security agreement to be signed and dated by the creditor.
Piku files an employment discrimination suit against Quotient Accounting, Inc., under
Title VII, based on its discharge of Piku. In these circumstances, possible relief under
Title VII includes
a. damages only.
b. damages or job reinstatement.
c. job reinstatement only.
d. neither damages or job reinstatement.
Fact Pattern 25-3
Chocolate! Chocolate! Corporation is a new company that needs to borrow money to
meet its payroll. Dayna, president and owner of Chocolate! Chocolate!, asks Evermore
Credit Union to loan the funds to Chocolate! Chocolate!
Refer to Fact Pattern 25-3. If Evermore insists that Dayna sign the loan application,
making her personally liable for payment only if Chocolate! Chocolate! defaults, Dayna
will be
a. a surety.
b. a lienor.
c. a garnishee.
d. a guarantor.
Daphne, an accountant, uses undue influence to induce her client Emily to invest in
Faux Plastico, Ltd., a business with little potential. When Emily learns the truth, she can
a. do nothing.
b. enforce the contract but not rescind it.
c. enforce the contract or rescind it.
d. rescind the contract but not enforce it.
Jim and Kyle are partners in J&K Sales, which exports technical equipment under a
three-year partnership agreement. The U.S. government declares that the equipment can
no longer be exported. J&K
a. dissolves as soon as the stated term expires.
b. dissolves as soon as the partners agree to dissolve it.
c. dissolves immediately unless the partners change its business.
d. does not dissolve.
General Packaging Corporation, a U.S. employer, may hire Hilo, a noncitizen, if Hilo is
a. a lawful permanent resident of the United States.
b. an unlawful but hopefully permanent resident in the United States.
c. an unlawful but only temporary resident in the United States.
d. any of the choices.
The graphics used in “Go!,” a handheld video game featuring racecars, are protected by
a. copyright law.
b. patent law.
c. trademark law.
d. trade secrets law.
An instrument is not defective simply because it is overdue.
Contract disputes rarely arise on a promise of future performance.
Dissolution can be brought about voluntarily by the directors and shareholders of a
corporation.
Under the UCC, a seller’s tender of goods that do not conform in every way to a
contract is not a valid tender.
Food is the only thing that courts have been willing to define as “necessary.”
Injured individuals can rely on the common law to obtain damages and injunctions
against business polluters.
Unless otherwise agreed, the result of an online dispute resolution proceeding may not
be appealed to a court.
Giving control of a joint venture to one of its participants does not affect the status of
the relationship.
A cyberterrorist might target a government agency, but not a business.
The Uniform Commercial Code governs the operation of partnerships.
A purchase-money security interest arises only when a seller provides a buyer with the
“purchase money” to buy goods.
To avoid liability for negligence, a business owner must protect its patrons against all
risks.
The employment-at-will doctrine is little used today.
An independent contractor is an employer who controls his or her agent’s performance.
Final administrative rules have binding legal effect unless the courts later overturn
them.