In Call-Me Cell Companys suit against Rude Ringtones, Inc., the jury returns a verdict
in Call-Mes favor. Call-Me will most likely ask the court to
a. enter a judgment in accordance with the verdict.
b. enter a judgment n.o.v.
c. enter a judgment on the pleadings.
d. order a new trial.
Hobby Farms, Inc., owns rural property that it leases to various tenants, including Ira.
Iras transfer of his entire interest in the leased property to a Jason is
a. an assignment.
b. an eviction.
c. a right of entry.
d. a sublease.
It is possible to copyright an idea.
Macro Corporation and Micro, Inc., enter into an agreement. To constitute a contract,
the terms
a. must all be express.
b. must all be implied.
c. may be express, implied, or a mix of both.
d. may be express or implied, but not both.
Stingo operates Tropic Burger Restaurant as a corporation. A customer slips and breaks
her ankle in the restaurant and is awarded damages by a court. Those damages must
most likely be paid by
a. Stingo.
b. Tropic Burger.
c. the customer.
d. the company that supplies the restaurants burgers.
Donato borrows the funds from Eveready Bank to buy real estate and build a home.
Donatos first draw of funds pays for the land. Subsequent draws occur at various stages
of construction until the house is ready for occupancy. This is
a. a balloon mortgage.
b. a construction loan.
c. a participation loan.
d a reverse mortgage.
A clause in a contract between Tall Timber Corporation, a U.S. firm, and Wang Woods,
Ltd., a Japanese firm, specifies that disputes over the contract will be adjudicated in the
United States. This is
a. a domestic-dispute clause.
b. a forum-selection clause.
c. an adjudication clause.
d. an arbitration clause.
Radiant Phone Company and Precision Works, Inc. (PWI), enter into a contract for the
sale of a certain quantity of cell-phone parts, with PWI to determine the price. The price
must be set according to
a. the concept of good faith.
b. the principle of fair trade.
c. the predominant-factor test.
d. the doctrine of unconscionability.
Joy and Kersey want to open a magic and novelty shop as Jo-Kers, with a plan to open
other shops in the future. To attain limited liability for the lowest cost and the fewest
start-up formalities, their best option is to form
a. a corporation.
b. a limited liability company.
c. a limited partnership.
d. a sole proprietorship.
Elias repays his debt, incurred to buy consumer goods, to Finance Bank and
immediately files a written request for a termination statement. Finance
a. must comply within one month of receipt of the letter.
b. must comply within twenty days of receipt of the letter.
c. must refund $500 to Elias.
d. is not required not comply.
Xtreme Publications, Inc., disseminates obscene materials. This is
a. a crime under numerous state and federal statutes.
b. a privilege under Article IV, Section 2.
c a right under the commerce clause.
d. a right under the First Amendment.
Clear Day Company, which is based in Delaware, agrees to sell fifty windows,
currently stored in Florida, to Great Vu, Inc., which is based in Hawaii. Absent an
agreement to the contrary, the place of delivery is in
a. California.
b. Delaware.
c. Florida.
d. Hawaii.
Irma files a civil suit against Jim. To succeed, Irma must prove her case
a. beyond a reasonable doubt.
b. by a preponderance of the evidence.
c. by indisputable proof.
d. within an iota of the truth.
Roxanne, a minor, is living at home with her parents, but signs a lease with a landlord
to rent an apartment. Roxanne can
a. disaffirm the lease because her parents can be held liable.
b. disaffirm the lease without liability.
c. not disaffirm the lease because an apartment is a “necessary.
d. not disaffirm the lease because her parents could be liable.
Shep buys a car from his neighbor, Tyrone, for $8,000 and agrees to make monthly
payments of $800 until the price is paid. This transaction is not subject to federal credit
regulations because
a. the parties are two consumers.
b. the transaction is a sale.
c. the sale involves a car.
d. the parties are neighbors.
Fact Pattern 37-1B
Brad, Carlos, and Dora are general partners in Eastside Physicians, a medical clinic.
Their agreement states it is a breach of the agreement for any partner to assign his or
her interest to a creditor without the consent of the other partners.
Refer to Fact Pattern 37-1B. Carloss assignment of his interest in Eastside to General
Credit Corporation results in
a. nothing with respect to Carlos or Eastside.
b. the automatic termination of Eastsides legal existence.
c. Carloss liability for all of Eastsides debts.
d. Carloss wrongful dissociation and liability for any damages.
Fact Pattern 24-2B
Ewa signs an instrument unconditionally promising to pay to “Sunny State Bank $5,000
with interest in installments with the final payment due June 1, 2013.
Refer to Fact Pattern 24-2B. With respect to this instrument, Sunny States Bank is
a. the drawee.
b. the drawer.
c. the maker.
d. the payee.
Boyd files a suit in a federal district court against Cathy. Cathy loses the suit, appeals to
the U.S. Court of Appeals for the Second Circuit, and loses again. Cathy asks the
United States Supreme Court to hear the case. The Court is
a. not required to hear the case.
b. required to hear the case because Cathy lost in a federal court.
c. required to hear the case because Cathy lost in a lower court.
d. required to hear the case because it is an appeal.
Valley Disposal Center operates a recycling plant. Wendy and other Valley neighbors
file a suit, alleging injuries from the plant. To succeed, they must show that Valley
failed to use reasonable care if the suit is based on
a. a negligence theory.
b. a nuisance theory.
c. any legal theory.
d. a strict liability theory.
Roth and Starr are shareholders of Triumph Hotel Corporation. Triumphs directors fail
to declare a dividend. Roth and Starr could succeed in asking a court to order the
directors to meet and declare a dividend
a. if Triumph has sufficient earnings available to pay a dividend.
b. if Triumph has cash reserves earmarked for a different purpose.
c. if withholding a dividend is an abuse of the directors discretion.
d. under no circumstances.
To generate sales, Yakkity-Yak, Inc., uses phone solicitation. Under federal law, in
soliciting business, Yakkity-Yaks telemarketers must
a. disclose all material facts related to a sale.
b. identify the sellers name (only if asked).
c. refrain from calling consumers who have not requested a call.
d. speak clearly and conspicuously.
Nick contracts for the sale of this years strawberry crop to Phoenix, with payment to go
to Rural Cooperative Association. The contract reserves to Nick and Phoenix the right
to modify its terms. Rural Cooperatives right to payment is
a. not affected by the reservation.
b. subject to any change that Nick and Phoenix make.
c. limited only if Rural Cooperative agrees to any changes.
d. terminated by the reservation.
Glen is an agent for Hi-Flite, Inc. On Hi-Flites behalf and at its request, Glen pays Ian
for certain plane maintenance and repair services. Glens right to obtain the amount of
those payments from Hi-Flite arises under the principals duty of
a. avoidance.
b. cooperation.
c. indemnification.
d. reimbursement.
Rally Corporation enters into a contract to sell ski gear to SnoSportz Company, which
sells a pair of the skis to Tyra, a consumer, who later sells them to Uli, another
consumer. Article 2 of the UCC applies to the sales transactions between
a. all of the buyers and sellers.
b. Rally and SnoSportz only.
c. SnoSportz and Tyra only.
d. Tyra and Uli only.
Dragonaire Corporation contracts with Excel Trucking Company to take goods to
Fly-By Airlines, Inc., with Fly-By to transport the goods to a Geo Storage Company
warehouse. Excel, Fly-By, and Geo each acknowledge possession of the goods by a
document of title. Excel, Fly-By, and Geo are
a. bailees.
b. consignees.
c. lessees.
d. sellers.
Mold & Dye Corporation is a private employer involved in an employment
discrimination suit under the Civil Rights Act of 1964. Punitive damages may be
recovered against Mold & Dye only if the employer
a. acted with malice or reckless indifference.
b. can easily afford to pay the amount.
c. has one hundred or more employees.
d. consents.
Bemis is forming Cool Air Company to make and sell a device that removes the heat
from working kitchens and other hot rooms. In exchange for legal services to Bemis
and his new firm at the start-up stage, an attorney is not likely to accept
a. an equity stake in Cool Air.
b. a promise of Bemiss future legal business.
c. a flat fee or a retainer.
d. a promise to keep the attorneys legal advice confidential.
Fact Pattern 14-B2
Nano Corporation offers to sell a robotic device to Motor Assembly, Inc., but
mistakenly transposes some of the digits in the price so that $15,400 appears in the offer
as $14,500. Motor accepts the written offer.
Nanos best defense against enforcement of the contract is that Opal knew
a. a bilateral mistake supports the cancellation of a contract.
b. a mistake of value supports the cancellation of a contract.
c. a unilateral mistake supports the cancellation of a contract.
d. the price was below the prices of comparable devices.
Quin, an accountant, prepares for Reddy, Inc., a financial statement that omits a
material fact. The statement is included in Reddys registration statement with the
Securities and Exchange Commission. Timor, who reads the statement, and Ubi, who
does not, each buy Reddy stock. Velma reads the statement but does not buy the stock.
Under Section 11 of the Securities Act of 1933, Quin may be liable to
a. no one.
b. Timor and Ubi.
c. Timor, Ubi, and Velma.
d. Ubi only.
NuStores accepts a shipment of QuikView-brand 3D HD DVD players from
Open-Ur-Eyes, Inc. NuStores later discovers a defect in the players, revokes
acceptance, and returns the players via Playback, Inc. During the return, the players are
lost. The loss is suffered by
a. NuStores.
b. Playback.
c. QuikView.
d. Open-Ur-Eyes.
Quackity Quack Companys ad states that its product is “the best on the market today.
Because of this ad, the Federal Trade Commission is most likely to
a. do nothing.
b. draft a formal complaint.
c. issue a cease-and-desist order.
d. require counteradvertising.
Gus dies without a will. Under applicable laws, the debts of his estate are paid by Guss
a. estate, after the assets are distributed.
b. estate, before the assets are distributed.
c. heirs, after the estates assets are distributed.
d. heirs, before the estates assets are distributed.
Longlast Tools, Inc., sells power tools, power tool parts, and related supplies under “full
warranties. Under the Magnuson-Moss Warranty Act, this means that Longlast must
provide
a. free repair or replacement of any defective part.
b. a toll-free number for a Longlast-approved service company.
c. a complete catalog of products and parts available for sale.
d. repair or replacement of any defective part at a reduced charge.
A breach of a contract is a failure to perform it.
Labels on fresh meat must indicate where the food originated.
Dan, a driver for EZ Delivery Company, leaves the truck’s motor running in neutral and
carelessly forgets to set the parking brake while he makes a delivery. The truck rolls and
crashes into a nearby gas station pump, igniting a fire that spreads quickly to a
construction site a block away. A burned wall collapses onto a crane, which falls on,
and injures, a bystander, Flo. What must Flo show to recover damages from Dan?
Comprehensive general liability insurance can encompass as many risks as the insurer
agrees to cover.
A court will not pierce the corporate veil of a corporation that is formed merely to
evade an existing legal obligation.
It may be unethical for a company with a product that is outlawed in one country to
look elsewhere for a market.
Any point source emitting pollutants into water must have a permit.
Estray statutes determine ownership rights in wild animals that have gone “estray.
Spice Corp. wants to acquire all the assets of Sugar Corp. Spice plans to pay for the
assets by issuing its own corporate stock. Spices board of directors has already
approved the merger. In what circumstances would the approval of Spices shareholders
be required for this merger? Is the approval of Sugars shareholders necessary? Explain.
Discharge of a debt is never denied because of the nature of a claim.
The effect of a conditional indorsement on the back of an instrument is the same as the
effect of conditional language that appears on its face.
Proximate cause exists when injuries sustained were too remotely connected to an
incident to trigger liability.
On dissolution, corporate assets are distributed to shareholders according to their stock
rights and any remaining assets are used to pay creditors.
A party seeking to recover in quasi contract must show that there was an actual contract
or agreement between the parties.
The shelter principle allows persons who formerly held instruments to improve their
positions by later reacquiring the instruments from HDCs.
A wrongful mental state is typically required for criminal liability.