Lora files a suit in Michigan against Ned over the ownership of a boat docked in a
Michigan harbor. Lora and Ned are residents of Ohio. Ned could ask for a change of
venue on the ground that Ohio
a. has a sufficient stake in the matter.
b. has jurisdiction.
c. has sufficient minimum contacts with the parties.
d. is a more convenient location to hold the trial.
To finance the purchase of a car from Giant Auto Sales, Hoppy signs an instrument
promising to pay to “Ideal Credit Union $18,000 with interest in installments with the
final payment due May 15, 2014. To be negotiable, this instrument must include on its
face
a. any conditions on the sale of the car.
b. any conditions to the disbursement of the funds.
c. any conditions to the repayment of the loan.
d. no conditions.
Dinas debit card, issued by Eminent Bank, is stolen and used without Dinas permission.
Dina tells Eminent Bank within thirty days. Dina may be required to pay no more than
a. $5.
b. $50.
c. $500.
d. $5,000.
Jewel Property Company hires Klint, an independent contractor, to wash the windows
of Jewels commercial building. Jewels tenant Lucy is injured when Klint closes a
window on her hand. In determining whether Jewel is liable for Lucys injury, the most
important factor is
a. Jewels employment of Klint.
b. Jewels investigation of Klints background and experience.
c. the condition of the premises, especially the window.
d. the degree of control that Jewel maintained over Klints actions.
Isabel obtains a fire insurance policy on her home from Justice Insurance Company.
The home is lost in a fire, but the parties dispute the amount of Justices liability under
an ambiguous clause in the policy. A court would most likely
a. interpret the clause against Isabel.
b. interpret the clause against Justice.
c. rewrite the clause and apply it as rewritten.
d. strike the clause from the policy.
Liu signs a check “pay to the order of Marv drawn on Lius account in National Bank.
Liu later orders National not to pay the check, but the bank pays it over Lius order.
Subsequent checks written on Lius account “bounce. Most likely liable for the costs to
Liu is
a. any party to whom a subsequent check was written.
b. Liu.
c. Marv.
d. National.
Jill loans her laptop to Kyle. This is a bailment for
a. neither partys benefit.
b. the parties mutual benefit.
c. the sole benefit of the bailee.
d. the sole benefit of the bailor.
Pace is an attorney, whose clients include Quikfeet Running Shoes Company. Unless
Quikfeet has violated securities law, the contents of Paces file on Quikfeet may be
disclosed to someone other than Quikfeet
a. only to a third party who is a foreseeable user of the information.
b. only under a court order (with or without Quikfeets consent).
c. only with Quikfeets consent.
d. under any circumstances.
Craig is an accountant whose clients include Digby Excavation Corporation. Elbert is
Craigs attorney. Under the common law and by statute in many states, working papers
that Craig develops when preparing financial reports for Digby are owned by
a. Craig.
b. Digby.
c. Elbert.
d. no onethe papers must be destroyed immediately after use.
Fact Pattern 9-2
Brad defends against a breach-of-contract suit by College Credit Corporation by
claiming that their deala student loan accruing interest at a certain rate and payable
beginning on a certain datewas unfair because the consideration for their contract was
inadequate.
Refer to Fact Pattern 9-2. “Adequacy of consideration refers to
a. “how much consideration is given.
b. legally sufficient value in the eyes of the law.
c. the intangible value to a contracting party of a thing exchanged.
d. the substantiality of the consideration exchanged.
Rikki and Sid enter into a sales contract. With respect to the specific contractual
provisions set out in the UCC, Rikki and Sid may
a. agree to different terms only to a reasonable extent.
b. agree to different terms unless they “get caught.
c. agree to whatever terms they wish.
d. not agree to different terms.
Juli types onto a computer what she intends to be “My Will and prints it out. Juli has
capacity. “My Will is
a. invalid.
b. valid if Juli signs it.
c. valid if Juli signs it and has three witnesses sign it.
d. valid if Juli signs it, has three witnesses sign it, and files it in a certain state office.
Neil goes to Oil Shop to change the oil in his car. Perry, the service technician, learns
that Neil plans to take a trip and advises the use of a certain type of oil. The oil breaks
down during the trip, damaging the car. Neil may recover from Oil Shop for breach of
a. an express warranty.
b. an implied warranty of fitness for a particular purpose.
c. an implied warranty of merchantability.
d. a warranty of title.
Theo and Uma orally agree on the sale of Theos Fitness Center to Uma and note the
terms on a sheet of the centers stationery, which includes the Centers letterhead but
which neither party signs. This agreement is most likely enforceable against
a. neither Theo nor Uma.
b. Theo and Uma.
c. Theo only.
d. Uma only.
Fact Pattern 11-1
Mutual Company enters into a contract to employ Neil as an investment manager for
two years. During the first year, Neil is often absent without explanation and when
present fails to adequately monitor and manage Mutuals investments.
Refer to Fact Pattern 11-1. With respect to Mutuals duties, Neils performance most
likely
a. discharges Mutual from the contract.
b. has no effect on Mutuals performance.
c. increases Mutuals duties under the contract.
d. suspends Mutuals duty to perform.
The payment of Hus debt to Ian is guaranteed by Hus personal property. To give public
notice of his interest in Hus property, Ian is most likely to
a. attach a bright label to Hus property.
b. e-mail other potential creditors.
c. file a financing statement with the appropriate authority.
d. publish a collection notice in local newspapers.
Fact Pattern 19-2
Marys home is in a state that has a $30,000 homestead exemption. Mary defaults on a
$60,000 debt that she owes to Nina. Marys home is sold at auction for $80,000.
Refer to Fact Pattern 19-2. Nina may recover
a. 0.
b. $30,000.
c. $50,000.
d. $60,000.
Rafi, a director of Super Service Station Corporation, does not attend a board meeting
for three years. During that time, Twyla, Supers president, makes improper loans that
cost the company $100,000. Rafi is most likely
a. liable for negligence or mismanagement.
b. liable for violation of the business judgment rule.
c. not liable because missing meetings is an honest mistake.
d. not liable because missing meetings is only poor judgment.
Delite Toys, Inc., makes EZ Goo, a famous childrens toy. Without Delites consent, Fast
Adhesives Company begins to use “ezgoo as part of the URL for Fasts Web site. Fast
claims that no consumer would confuse the Web site with the toy. Fast has committed
a. copyright infringement.
b. patent infringement.
c. trademark infringement.
d. no actionable violation.
Filtration Products, Inc., files a suit against Emmett, its former accountant, alleging
constructive fraud. Emmett may be held liable
a. if Filtration cannot prove actual fraud.
b. if Emmett was grossly negligent in the performance of his duties.
c. only if Emmett acted with fraudulent intent.
d. only if Emmett impersonated someone else who could be liable for fraud.
Lara induces Moe to enter into a contract for the sale of an apartment about which Lara
fraudulently misrepresents a number of material facts. Lara tells Moe that her
commission is 6 percent, but their signed, written contract states “12 percent. The
Statute of Frauds governs
a. contracts that are induced by fraud.
b. contracts that must be in writing to be enforceable.
c. the admissibility in court of oral evidence.
d. the merging of oral and written statements into one contract.
Lively Toys Store and Movin Products Company (MPC) enter into an e-contract under
which MPC agrees to ship a case of electronic, remote-controlled bugs to Lively Toys,
which agrees to pay on delivery. The Uniform Electronics Transactions Act (UETA)
a. denies the enforcement of such contracts.
b. does not apply to such contracts.
c. preempts all other laws with respect to such contracts.
d. supports the enforcement of such contracts.
Readmore Bookstore Corporation files a registration statement with the Securities and
Exchange Commission and provides a prospectus describing the securities to investors.
These items are intended to provide sufficient information so that the financial risks
involved can be evaluated by
a. market professionals to explain to all investors.
b. government regulators to disclose to the general public.
c. sophisticated investors only.
d. unsophisticated investors.
Franz asks Gateway Mortgage Credit for a loan to pay for the purchase of a home. With
a poor credit score and a high current debt-to-income ratio, Franz does not qualify for a
standard mortgage. Gateway is most likely to provide
a. a deed in lieu of foreclosure.
b. a reverse mortgage.
c. a subprime mortgage.
d. a workout agreement.
Procter, who is not in contemplation of imminent death, tells his daughter Opal that she
can have his Dodge truck on his death, whenever that happens. This is
a. a valid gift causa mortis.
b. a valid gift inter vivos.
c. a valid gift largesse.
d. not a valid gift.
Beth is an accountant with Coffee Sales Corporation. Doral buys Coffee Sales stock and
loses money on the investment. To recover from Beth under Section 10(b) of the
Securities Exchange Act of 1934 and SEC Rule 10b-5, Doral must prove
a. none of the choices.
b. fraud and reliance only.
c. fraud, reliance, and materiality only.
d. scienter, fraud, reliance, materiality, and causation only.
Bella owns a farm in Colorado. Doyle drives his sport utility vehicle off a highway and
onto Bellas land. Doyle commits trespass if he
a. does not have Bellas permission to drive on the property.
b. drives onto the property for recreational purposes.
c. harms the property in a material way.
d. harms the property in any way.
Krystal is a federal judge. Krystals judicial decisions are part of case law. This law
includes interpretations of primary sources of law. These sources include
a. administrative regulations.
b. articles in law reviews and other legal journals.
c. compilations summarizing court decisions on particular topics.
d. legal encyclopedias.
Curtis enters into a contract with Drive-Away Lease Company for a three-year lease of
a car. This contract is subject to
a. Article 2 of UCC.
b. Article 2A of the UCC.
c. Article 11 of the CISG.
d. the common law only.
Duran applies to EZ Credit Mortgage Company for $100,000 to buy a home. EZ Credit
steers Duran toward an adjustable-rate mortgage even though he qualifies for a
fixed-rate mortgage. This is
a. a short sale.
b a subprime mortgage.
c. loan flipping.
d. steering and targeting.
Frawsty Corporation distributes beverages in the greater Northwest. Frawstys board of
directors can delegate some of its functions to
a. Frawstys incorporators.
b. Frawstys officers.
c. Frawstys shareholders.
d. no one.
Oral evidence of otherwise clear terms in a contract can be introduced at a trial to
contradict those terms.
A partner owes to the partnership and the other partners a duty of loyalty.
An attorney may be liable to a third party who relies on the attorneys legal opinion to
the third partys detriment
A check carries with it an implied promise to reimburse the bank for paying the check.
College Copy Shop (CCS) compiles, copies, and sells reading materials to students on
the instructions of their professors, who indicate which parts of which publications
should be included. These include texts published by Deep Topics, Inc. CCS does not
obtain the permission of Deep Topics, or any of the other original publishers of the
copied materials, and does not pay royalties on the sales of the compilations. Deep
Topics and others file a suit against CCS, alleging infringement of the plaintiffs
intellectual property rights. Which type of intellectual property is involved in this
situation? What is CCSs likely defense? How is a court most likely to rule? Explain.
A fiduciary relationship involves trust and confidence.
A will is probated in part to establish its validity.
Common law is a term for the law that is known to most of us.
If a lender fails to provide certain material disclosures, a borrower has up to seven years
to rescind the mortgage.
The public disclosure of private facts about a person is not an invasion of privacy if it is
done without the persons knowledge or consent.
Force majeure clauses in international business contracts commonly set forth the major
clauses of the contracts.
The jurisdiction of a state court of appeal is substantially limited to hearing appeals.
Under the Constitution, the states retain all powers not specifically delegated to the
federal government.
No special form is required to create a delegation of duties.
On the breach of a contract involving the sale of land, money damages is always the
most appropriate remedy.