Book Title
Business Law with UCC Applications 14th Edition

LGST 94832

March 1, 2019
A civilization with a recognized central state is generally less stable and more war-like
than one without a recognized central state.
A gift is legally considered the same as a sale, since title passes in both a gift and a sale.
Under other provisions of the Taft-Hartley Act, unions are not legally obligated to give
notice to the employer of an intention to strike prior to the termination date of a
collective bargaining contract.
ABC Co. promises to pay Sarah $1,000 for the "excellent work she has done in the
past." When ABC does not pay, Sarah may sue and collect the $1,000.
Sonia's warehouse is holding Joe's goods. Joe is selling the goods to Monique. If Sonia
tells Monique that she may pick up the goods, tender by the seller has occurred.
The "Opening Case" involved a question of whether the Diocese was vicariously liable
for the intentional acts of one of its priests.
If due notice has been given and the obligor makes payment to the assignor, the obligor
is excused from making payment to the assignee.
A "hot-cargo" contract allows a union to handle stolen property that has been recovered
by the police and sold at a police auction.
An independent contractor has no power to bind the proprietor to a contract, even if
expressly authorized to do so.
Once the amounts agreed to under a Chapter 13 plan are paid, all remaining debts are
ADR is intended as a replacement for the legal system.
The Norris-LaGuardia Act outlawed so-called "yellow-dog" contracts.
The language of the law helps in the execution of the law.
The satisfactory performance by a car dealer of a contract for the purchase of a new car
would be judged by a subjective standard.
A merchant's firm offer for the sale of goods can exceed three months in duration.
Melody agrees to "sell" title of all of her assets to her cousin, Erin, for $1.00. The
reason Melody sold her possessions was to hide them from creditors. The transfer of
assets is a valid exercise of Melody's ownership rights.
To make a case based on promissory estoppel, Thomas must demonstrate that his
employer promised him job security despite the apparent at-will nature of the
employment relationship.
An individual cannot be convicted for a criminal act unless it is proved that he or she
had an evil motive for committing the crime.
A "profit prendre" may be created by deed, will, or adverse use.
In a Chapter 11 reorganization, a qualified debtor creates a plan that alters the
repayment schedule.
If Nadia, a licensed physician, operated on a patient without consent, Nadia could be
guilty of battery.
Wrongful death statutes allow a creditor to bring a lawsuit on behalf of the deceased.
The FTC's "Cooling-Off" Rule applies to sales that are entered completely by phone or
by mail.
An agent must terminate an agency relationship by a written revocation.
Ratification is the subsequent approval by a corporate board of a previously
unauthorized act by a manager.
To be licensed as an attorney, Eva does not have to meet an experience requirement.
An accountant who prepares a fraudulent financial statement is liable to anyone who
can be reasonably foreseen as relying on that statement.
Mutual assent involves the legal ability to make a contract.
While the law protects our rights, only ethical principles can stop us from doing
something that is wrong.
"Slamming" is the illegal practice of changing a consumer's telephone service without
Ajax Co. has six directors. Three of the directors favor corporate expansion and three
directors want to keep Ajax at its current size and distribute the surplus profit. How will
a court likely resolve this deadlock?
A. Appoint a seventh director to break the tie.
B. Appoint an arbitrator.
C. Order an involuntary dissolution of Ajax.
D. Order the directors to make an agreement or be in contempt of court.
Vanessa has received gifts subject to the provisions of the Uniform Transfer to Minors
Act. When Vanessa graduates from high school at age 17 and moves away from home,
she wants to terminate the custodianship. At what age does the custodianship terminate?
A. 17
B. 18
C. 21
D. The age is decided on case-by-case basis.
Which of the following entities are allowed to send merchandise through the mail to
people who did not order it?
A. Hospitals
B. Local businesses
C. Governmental units
D. Charitable organizations
Linda calls a cab in the morning to get to work. The fare that Linda would pay to the
cab is a(n) ____________ for the ride to work.
A. exchange
B. donation
C. consideration
D. conversion
Which of the following is true of an exclusion of the implied warranty of fitness for a
particular purpose?
A. The exclusion can be an oral or written statement, promise or other representation
about the quality of a product.
B. The exclusion can occur by excusing buyers from examining the goods, the sample,
or model.
C. The exclusion must be in writing, bold type, and be conspicuous.
D. Using expressions such as "as is", "with all faults", or some similar language would
not exclude the implied warranty of fitness for a particular purpose.
Those who support governmental control demand that the government have a seat in
every corporate boardroom in America.
A new administrative regulation allowed the Social Security Administration to charge
women for Social Security cards, yet enabled men to obtain the cards for free. A lawsuit
was filed challenging the constitutionality of this new regulation. If you were a justice
on the Supreme Court you would most likely
A. review common law to see whether a precedent exists.
B. use statutory interpretation to clarify the law.
C. rule the regulation unconstitutional.
D. let the regulation stand.
____________ occurs when false statements or actions, or a combination thereof, are
made by one party in a way that causes another party to rely on those
misrepresentations and then suffers an injury or loss as a result.
A. Disparagement
B. Invasion of privacy
C. Abuse of process
D. Fraudulent misrepresentation
If Titanic Co. makes a tender offer to acquire more than ____________ of the shares of
a target, Titanic Co. must file a statement with the SEC.
A. 5%
B. 10%
C. 15%
D. 20%
Sheena was flying New York Airlines to Florida via a stop in Richmond, Virginia.
However, the flight was delayed by ten hours at the Richmond airport and later
cancelled, with no refund or alternate flights for the passengers. As a result, Sheena was
forced to breach a $100,000 contract with a Florida client. Sheena files a lawsuit against
New York Airlines and the Richmond airport for causing inconvenience during transit
and for monetary loss. In response to her lawsuit, New York Airlines acknowledges the
inconvenience caused but cross-claimed that the Richmond airport did not allow the
connecting flight to land, hence the cancellation. Richmond defended the cancellation
based on extreme weather conditions. Analyze the situation.
Which of the following is an equitable remedy under contract law?
A. Injunction
B. Monetary damages
C. Human servitude
D. Specific damages
Booksellers, Inc. makes a written offer to sell Smallville City Library 20,000 books at
$5 each. In writing, Booksellers also agrees to keep the offer open for sixty (60) days.
However, before the 60 days have passed, Booksellers sells all the books to Universal
Library for $7 each. Which of the following is true of this situation?
A. Smallville cannot file a legal claim, since a firm offer may be revoked prior to
B. Smallville can file a legal claim, since Booksellers agreed to hold the offer open,
even though no consideration was given.
C. Smallville had not taken possession of the books, nor paid any of the purchase
prices, and hence cannot file a lawsuit.
D. Smallville can bring a lawsuit, since Booksellers engaged in bait-and-switch tactics.
Jenna hangs her fur coat on a rack in the unattended waiting room of Physicians
Associated Office. After her visit with Dr. Wong, Jenna prepares to leave, but discovers
her fur coat is missing. What liability, if any, do Physicians Associated and Dr. Wong
have for the missing coat?
A. None, since they had no control over the coat.
B. Physicians Associated is liable, since the coat rack was in its waiting room.
C. Dr. Wong is personally liable as Jenna had come to meet him.
D. None, since it was a mutual benefit bailment.
____________ give(s) shareholders more voting control, because this voting method
states that each share of stock has as many votes as there are directors to be elected.
A. Voting trusts
B. Proxy voting
C. Pooling agreements
D. Cumulative voting
Miguel lives in an area with a high percentage of Hispanic workers. Many of these
workers are legal immigrants who have relatively little college training. If, when
Miguel applies for his job, he is given an examination designed for a college graduate,
and if he and most Hispanic applicants fail to pass the test, the employer:
A. might be engaged in disparate-harm discrimination.
B. might have violated the Americans with Disabilities Act (ADA).
C. might be engaged in disparate-impact discrimination.
D. has almost certainly done nothing wrong.
A child is killed by the violent behavior of his mother's boyfriend. The mother was
aware of the possible danger her boyfriend posed to her son, yet failed to take steps to
prevent or reduce the risk of harm to her son. She can be convicted of a crime due to
which of the following requisite states of mind?
A. She acted with negligence.
B. She acted with knowledge.
C. She acted with recklessness.
D. She acted with purpose.
The ____________ is a unified set of statutes designed to govern almost all commercial
A. Uniform Common Law Code
B. Uniform Commercial Code
C. Uniform Civil Code
D. Uniform State Code
Charles orally promises Holly that he will marry her. He also states that if they ever get
divorced, then he will transfer one-half of his assets to Holly. They marry and divorce
within a year. Which of the following is true of Charlie's promise to Holly?
A. The promise qualifies as an enforceable oral contract.
B. The promise is legally enforceable only if it does not involve the transfer of land.
C. The promise is not legally enforceable unless Holly proves that the promise
influenced her decision to marry him.
D. The promise is not legally enforceable because it was not written.
If both parties are merchants, the UCC modifies the common law "____________" rule,
by allowing ____________ terms to become a part of the contract, unless they
____________ change it.
A. hybrid contract; additional; materially
B. course of dealing; additional; materially
C. plain view; different; slightly
D. mirror image; additional; materially
On a snowy day in early January, Jeremy is visiting his friend Manny at Manny's
apartment at the Snooty Fox. While walking up the exterior wooden steps to get to
Manny's third floor apartment, one of the steps—which is rotten—breaks. Jeremy falls
through to the ground and is severely injured. What result?
A. The Snooty Fox is liable based on ejectment in a common area.
B. The Snooty Fox is not liable based on unlawful detainer.
C. The Snooty Fox is not liable because of the weather conditions.
D. The Snooty Fox is liable based on defect in a common area.
When forming online contracts, ____________ is a cyber-technique that preserves
electronic data of offer and acceptance without using local hard drives and flash drives.
A. social media
B. encryption
C. cloud computing
When Arizona passed state statutes to inspect the identification papers of illegal
immigrants, the ____________ sued the State of Arizona claiming the state statutes
violated the ___________ Clause of the U.S. Constitution.
A. Department of Justice; Rights and Privileges
B. Arizona Attorney General; Equal Protection
C. Department of Justice; Supremacy Clause
D. Department of Justice; Freedom of Speech
Which of the following do positive law theory and natural law theory have in common?
A. Both believe that human decency will ultimately triumph over human cruelty.
B. Both believe that human values apply to all people at all times.
C. Both depend on an outside source for their understanding of law, morality, and
D. Both believe in forming and dictating ethical decisions to people.
Henry borrows money from Commerce Bank to purchase a house. However, he moves
to another city to attend graduate school and sells the house to Maria. Henry wants to be
released from his payment obligations to Commerce Bank. Which of the following
would release Henry from his liability to Commerce Bank?
A. A delegation of the payment obligation by Henry to Maria will release Henry from
B. The sale of the house by Henry to Maria involuntarily releases his payment
C. A delegation of the payment obligation to Maria along with a written notice to
Commerce Bank can release Henry from the liability.
D. A novation in which Commerce Bank agrees to substitute Maria for Henry will
release Henry.
The term ____________ has been used to describe a crime in which the offender causes
actual physical harm to the victim.
A. arson
B. aggravated menacing
C. violence
D. battery
Eve, an experienced automotive engineer, signs a ____________ agreement with her
employer, Environmental Auto Co., that she will never work in the auto industry after
she leaves employment with Environmental. A court considering this agreement will
A. noncompete; declare it void as geographical area is not specified
B. restrictive employment; enforce the agreement in any event
C. noncompete; only enforce the agreement if it resulted from a bargained-for exchange
D. noncompete; enforce the agreement only if such agreements are customary in the
auto industry
Once a federal regulation is finalized, it is included in the:
A. Administrative Register.
B. Code of Federal Regulations.
C. Uniform Commercial Code.
D. Modern Federal Register.
A business asks a court to interpret the way in which a newly enacted shoplifter
detention statute will be applied if the business, at some future point, detains a
suspected shoplifter. The court may:
A. issue an advisory memorandum.
B. convene a conference of business and consumer representatives.
C. not interpret the statute until a lawsuit is filed challenging the statute.
D. ask the legislature to issue an advisory memorandum.
Morgan, a resident of New York, had an antique car collection garaged in New Jersey.
The car titles were kept in a safety deposit box of a bank in Delaware. If Morgan dies
intestate, the law of which state will determine the ownership of the cars?
A. New Jersey
B. New York
C. Delaware
D. New Jersey, New York, and Delaware
Gordon Gibbs accidentally grated his plow along his neighbor's driveway, ruining the
driveway. The neighbor wants Gordon to pay the $1,500 cost of paving the driveway. If
this case enters litigation, it will most likely be heard by ____________ court.
A. a state intermediate appellate
B. the state supreme
C. a family
D. a small-claims
A lease agreement may give the tenant which, if any, of the following rights?
A. Right to rent control
B. Right to require a security deposit
C. Right to renew or purchase
D. Neither the right to renew or purchase
Permits issued under the Clean Water Act relate to the:
A. use of river water for agricultural purposes.
B. use of potable water for industrial purposes.
C. use of water by industries beyond permissible limits.
D. release of pollutants into the waterways within legal limits.
If Anthony is concerned only with corporate benefits and problems, rather than the
benefits and problems that will result for others outside the boardroom, he most likely
believes in:
A. utility thinking.
B. rational ethics.
C. social contract theory.
D. ethical relativism.
When shareholders join together in a temporary arrangement, it is called a:
A. voting trust.
B. cumulative voting arrangement.
C. shareholder proposal.
D. pooling agreement.
A ____________ is a symbol, picture, image, name, device, color, or word that a
business uses to distinguish itself from its competitors.
A. patent
B. copyright
C. royalty
D. trademark
A developing nation wants to protect its farmers from competition from advanced
nations. Due to technology and economies of scale, the advanced nations are able to
export food to the developing nation at a price lower than the cost of production by
local farmers. At the same time, the developing nation wants to be a member of the
World Trade Organization. What can the developing nation do to protect its farmers and
still be member of the World Trade Organization?
Amanda Hutchins sued her managers for making merger decisions that caused
shareholders to lose money. The managers argued that they made decisions based on the
long-term benefits of the merger to everyone involved, including the local community
and the state. Hutchins argued that the shareholders' profits should be the managers'
first priority. Analyze the case and the possible ruling of the court.
Jason decides not to cheat on an exam since he considers himself a morally reasonable
person and the action of cheating on exams will undermine the value of degrees issued
by his educational institution. Name and explain the ethical system Jason has used to
make this decision.
Chuck likes to grow "natural" flowers, such as dandelions, in his yard, while his
neighbor Patty sees these as weeds whose seeds constantly blow into her yard. Both
Chuck and Patty anticipate living in their homes for many years to come. Discuss a
form of dispute resolution that would best fit this situation.
Sam, a manager at Small Co., is confronted with a difficult business decision. Discuss
what Sam must do to meet the duty of due diligence in making his decision.
Roberts bought a new ride-on lawn mower and allowed his son, Don, to be the first
person to drive it. Due to a factory defect, the mower's gearshift stuck in reverse. Don
was seriously injured when the mower backed into a ditch and tipped over. When Don
sued the manufacturer for his injuries, the manufacturer argued that it was not liable
because Don had not purchased the mower. Is Don likely to win his case? Why or why
In June, the Daniels contracted with Twining to build a stone path leading from the road
to their vacation home. They asked him to complete the job within 11 months. Explain
whether Twining and the Daniels must enter into a written agreement for such a
contract to be enforceable.
Small Hospital uses independent physicians and allows them to wear a Small
identification tag and issue orders to Small employees. Discuss the risk Small hospital
is taking.
Alex, a painting contractor, purchased a movable Little Giant basket platform from
Builder's Equipment Co. from which he or his employees could paint up to sixty feet
off the ground. The platform malfunctioned, and Alex was injured when he fell from
thirty feet. Discuss the type of product liability claim that Alex might bring against
Builder's and Little Giant.
Norbert receives an official-looking written notice which states that Mountain Mortgage
Inc., from whom he had borrowed money to purchase his house, has assigned Walter all
rights to receive payment and that Norbert should make all future mortgage payments to
Walter. Discuss Norbert's rights and duties.
Brad is a riparian owner in a state that follows the riparian rights doctrine. Brad
believes that he owns the soil beneath the stream that flows through his land and that he
has the right to bottle and sell, in a new business venture, the water in the stream. Does
Brad have the right to do so? Why or why not?
Martin entered into a written contract to sell Anna his football card collection for
$10,000, payable in five installments. Martin then orally told Cathy that she could
collect the proceeds of his sale. Discuss Cathy's legal rights.
Gracie was a single mother of ten children, three of whom were adopted, and two of
whom were stepchildren. One day, Gracie was struck by a car and killed. She died
intestate. Will all her children inherit from her? Explain.
Brianna is purchasing an apartment building from Austin that already has a $500,000
mortgage on it. Brianna is uncertain if she can make money on this purchase and
certainly does not want the responsibility of paying the mortgage. Discuss how Brianna
might structure this purchase to avoid responsibility for the preexisting mortgage.
Tim's mother was concerned that Tim would develop cancer if he used tobacco, so she
promised Tim $10,000 if he would refrain from any use of tobacco until age 30. Tim
did so, but his mother refused to give him the $10,000. Does Tim have a legal right to
the $10,000? Explain.
Whitney signs her will and then realizes that she needs witnesses. She finds two friends,
tells them the signature is hers and the two friends sign the document. Discuss if this
method is valid.

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