A contract can include a provision stating that no damages can be recovered for certain
types of breaches.
a. True
b. False
Valley Bank retains the cancelled checks of its customers. Valley must be able to
provide customers with legible copies of checks paid for
a. one year.
b. five years.
c. seven years.
d. nine years.
If a buyer repudiates a contract, the seller cannot re-cover damages.
a. True
b. False
Joli, acting within the scope of her authority for the Cake Bake Shop, contracts with
Valley View Berry Farms to buy an assortment of fruit. Cake Bake is liable on the
contract, and Joli is not, if Cake Bake is
a. a disclosed principal.
b. a partially disclosed principal.
c. an undisclosed principal.
d. an apparent agent.
Federal law permits the sending of unsolicited commercial e-mail and does not prohibit
spamming activities.
a. True
b. False
Before any interest in specific goods can pass from the seller to the buyer, the goods
must exist and be identified to the contract.
a. True
b. False
Stare decisis is a doctrine obligating judges to follow the precedents established within
their jurisdictions.
a. True
b. False
Under the E-SIGN Act, Phillip may use an e-signature in all of the following instances
except
a. opening an account with a financial institution.
b. obtaining a mortgage.
c. obtaining a mortgage.
d. signing his will.
Boutique Corporation would like to change its corporate status to that of an S
corporation to avoid in-come taxes at the corporate level. To qualify, the shareholders
must not be
a. corporations.
b. estates.
c. individuals.
d. partnerships.
Cases involving diversity of citizenship arise only between citizens of different states.
a. True
b. False
Public officials prosecute criminal defendants.
a. True
b. False
Confiscation occurs when a government seizes private property for an illegal purpose or
without just compensation.
a. True
b. False
Foreign firms cannot obtain U.S. patent protection on items that they sell in the United
States.
a. True
b. False
Ewa is Diamond Financial Planners most productive employee. She is dissatisfied with
the commission structure, however, so she quits to work for Feldstar Investments, Inc.
When she leaves Diamonds employ, she takes her list of Diamonds clients so that she
can induce them to switch to Feldstar. Trade secrets law covers
a. Diamonds list of clients.
b. Ewas performance.
c. Feldstars commission structure.
d. none of the choices.
An installment contract is breached if a buyer accepts any nonconforming goods.
a. True
b. False
Colleen is intoxicated, but still mentally capable of understanding the consequences of
her actions when she signs a contract to sell the rights to her latest phone app design to
Addie. The contract is
a. enforceable only if Colleen does not attempt to disaffirm it.
b. enforceable even if Colleen attempts to disaffirm it.
c. unenforceable if Addie attempts to disaffirm it.
d. enforceable only if Addie does not attempt to disaffirm it.
It is basic tenet of agency law that notice to the agent is notice to the principal.
a. True
b. False
George and James create an agency relationship to facilitate the sale of illegal narcotics.
This agency relationship
a. is illegal.
b. is legal.
c. will be recognized by some states, but not others.
d. can exist, but will be subject to sanctions for illegal activity.
During a union election campaign, Autowerks Repair, Inc., prohibits on-site
solicitations by any party, including Mechanics Union, which is seeking the workers
unionization. This violates
a. federal labor law.
b. federal elections law.
c. federal employment discrimination law.
d. no federal law.
To take goods free of any security interest, a buyer in the ordinary course of business
cannot know about the interest.
a. True
b. False
Holiday Sales Company and Global Distributors, Inc., enter into a contract for the
delivery of imported specialty goods. Until the goods are delivered and paid for, these
parties have
a. an executory contract.
b. no contract.
c. a quasi contract.
d. an informal contract.
Bob, a salesperson at a Carpets Galore store, tells Dita, a customer, “Buy your carpet
here, and Ill install it for half of what the store would charge. Dita buys the carpet,
which Bob in-stalls for half the stores price. Bob keeps the money. Bob has breached
a. no duty.
b. the duty of loyalty.
c. the duty of notificaion.
d. the duty of obedience.
Anthony believes that he needs to obtain a Chapter 13 discharge in bank-ruptcy. A
Chapter 13 case can be initiated by a filing of a voluntary pe-tition by
a. a creditor only.
b. a corporation only.
c. a debtor only.
d. a trustee only.
The payment of Joses debt to Klint is guaranteed by Joses personal property. The
process by which Klint can protect himself against the claims of third parties to this
property is
a. attachment.
b. default.
c. perfection.
d. termination.
North American Properties, Inc., and its officers, directors, and share-holders, buy and
sell securities. Section 16(b) of the Securities Exchange Act of 1934 covers
a. all purchases and sales of securities.
b. only purchases and sales of securities involving misappropriation.
c. only purchases and sales of securities involving short-swing profits.
d. only purchases and sales of securities involving tippers and tippees.
Very few states have limited the amount of damages that can be awarded in tort cases.
a. True
b. False
The verdict in a summary jury trial is binding.
a. True
b. False
Rough & Ready Timber Company orally contracts with Shawn for the purchase of five
acres of Shawns timberland. Shawn makes the transfer but Rough & Ready does not
pay the price. The lack of a written contract could bar enforcement of this deal. If so,
Shawn could most likely recover on a theory of
a. reformation.
b. restitution.
c. liquidated damages.
d. quasi contract.
If no time for acceptance is specified in an offer, the offer terminates after a reasonable
length of time.
a. True
b. False
Raul agrees to ship to Ben one hundred ceil-ing fans for $5,000. Raul ini-tials his notes
of the deal, which in-clude the terms, and files the notes in his office. Ben initials his
own notes of the deal, which include the terms, and files the notes in his office. Raul
fails to ship the fans. Against Raul, as a contract, the deal is
a. enforceable, because under the UCC a contract need not written.
b. enforceable, because Rauls initialed notes are a sufficient writing.
c. enforceable, because Bens initialed notes are a sufficient writing.
d. not enforceable.
Phil enters into a contract to hire Bobs Building Business to build a warehouse for Phil.
The contract specifies that the warehouse should be built with HighQual Bricks. When
construction starts, HighQual Bricks cannot provide enough bricks for the warehouse.
Bobs Building Business substitutes Big Red Bricks, which are comparable in quality
and price to HighQual Bricks. This deviation from the contract
a. discharges Phil from the contract.
b. has no effect on the contract.
c. increases Bobs Building Businesss duties under the contract.
d. suspends Bobs Building Businesss duty to perform.
Sid, a director of Tech Software Company, learns that a Tech engineer has developed a
new, exciting video game. Sid buys Tech stock and tells his friend Uri, who also buys
Tech stock. When the new game is released three weeks later, Sid and Uri sell their
stock for a big profit.
Refer to Fact Pattern 26-2. Regarding Sids profits on the purchase and sale of Tech
stock, under Section 16(b) of the Securities Exchange Act of 1934 Tech may recapture
a. all of Sids profits
b. half of Sids profits.
c. 10 percent of Sids profits
d. none of Sids profits.
An agency relationship must be based on an express or implied agreement that the
agent will act for principal and that the principal agrees to have the agent so act.
a. True
b. False
Digital Products Company includes a shrink-wrap agreement in a transac-tion with
Eagle Engineering Corporation. A shrink-wrap agreement is an agreement whose terms
are expressed
a. in code at the end of a computer program .
b. inside a box in which goods are packaged.
c. in small print at the end of a paper contract signed by both parties.
d. on a computer screen.