Lake Port Services enters into a contract to load Maxs Great Lakes barges with the
cargo that Max designates. Lake Ports offer to perform, when Lake Port is ready,
willing, able to do so, is
a. complete.
b. substantial.
c. tender.
d. tough.
A specific grade of corn that fills Dean and Ethels silo is fungible. This means that the
corn is
a. alike naturally or by agreement or trade usage.
b. fundamentally different.
c. fundamentally edible.
d. perishable.
Ross e-mails Super Surfboard Companys marketing campaign to Summer Sports
Corporation, Supers competitor, without its permission. This is
a. a sneaky but legal method to shock a business rival.
b. a secretive but lawful way to exact revenge on a supervisor.
c. a simple, legitimate attempt to create a job opportunity.
d. a theft of trade secrets.
Julie signs a check payable to the order of Kwik Mart Stores, Inc., that does not include
a date. This check is
a. negotiable.
b. nonnegotiable, because it does not include a date.
c. nonnegotiable, because it is payable to a corporation.
d. nonnegotiable, because it is signed by the drawer.
In Restful Motels suit against Sleepy Hotels, Inc., Restful serves a written request for
Sleepy to admit the truth of matters relating to the trial. Sleepys admission in response
is the equivalent of
a. an admission in court.
b. a statement to the media.
c. information to which Sleepy has a right of privacy.
d. irrelevant evidence.
Vernon claims that his contract with Ulani for catering services is voidable. If their
contract is avoided
a. both parties are released from it.
b. both parties must fully perform their obligations under it.
c. a wholly different contract is agreed to.
d. a wholly different contract is imposed “as if the parties had agreed.
Primo Pools Company and Aquatic Recreation, Inc., enter into a contract for a sale of
prefabricated swimming pools. Under either a shipment contract or a destination
contract, the seller must
a. allow the buyer to reject the goods for any reason.
b. deliver the goods to a particular destination.
c. place the goods into the hands of a carrier.
d. provide the buyer with any necessary documents of title.
Handy Hardware Store agrees to hire Ilsa for one year at a salary of $500 per week.
When Handy cancels the contract, Ilsa spends $100 to obtain a similar job that pays
$450 per week for a year. Ilsa is entitled to recover
a. the amount of the wages that Handy promised only.
b. the difference between the wages at the two jobs only.
c. the difference between the wages at the two jobs plus $100.
d. $100 only.
Fact Pattern 26-1A
Seymour writes a check on his account at Platinum Bank to Teri to pay a debt. Teri
negotiates the check by indorsement to Rosanna, who presents it for payment to Onyx
Bank.
Refer to Fact Pattern 26-1A. Teri is
a. not liable for payment under any circumstances.
b. primarily liable.
c. secondarily liable.
d. simultaneously liable.
Ginny obtains a health insurance policy for her family from Hope Insurance Company.
The policy includes an incontestability clause. Under such a clause, after a policy has
been in force for two or three years
a. Ginny cannot contest Hopes insurable interest.
b. Ginny cannot contest Hopes refusal to pay a claim under the policy.
c. Hope cannot contest Ginnys eligibility for continued coverage.
d. Hope cannot contest Ginnys statements in the application.
Jen agrees to buy Kevs Dirt Bike business on the express condition that Valley Credit
Union approves the financing. This approval is
a. a concurrent condition.
b. a condition precedent.
c. a condition subsequent.
d. an implied condition.
Jody and Kent each own one-half of Local Motion, a club, as a tenant in common. Kent
sells his interest to Meri, who now owns
a. no interest in the firm.
b. the firm in fee simple.
c. the firm with Jody as joint tenants.
d. the firm with Jody as tenants in common.
Trudy and Uri enter into a contract for the sale of Trudys house for which Uri agrees to
pay her $200,000. Uri wants to transfer his right to the ownership of the house to Val,
his niece. This transfer
a. is prohibited.
b. may be oral or written.
c. must be implied.
d. must be in writing.
Stacy contracts to buy a franchise from Tender Steak House Company. In this contract,
as in most franchise contracts, the determination of the territory to be served is made by
a. a court.
b. Stacy.
c. Tender Steak House.
d. the Federal Trade Commission.
Consumers in Bayside City form a business organization to provide, without profit, an
economic service to its members. This is
a. a business trust.
b. a cooperative.
c. a corporation.
d. a joint stock company.
Dotty creates a trust by her will for the benefit of Eppie and her family to come into
existence on Dottys death. This is
a. a constructive trust.
b. an inter vivos trust.
c. a resulting trust.
d. a testamentary trust.
National Business Systems Corporation (NBS) files a suit against Molly, its former
accountant, alleging constructive fraud. NBS need not prove
a. detrimental reliance.
b. intent to deceive.
c. justifiable reliance.
d. materiality.
Fact Pattern 21-A1
Internet Cafés, Inc., contracts to buy all of its requirements for coffee, at a minimum of
1 million pounds per year, from Java Corporation for six years. After three years,
Internet tells Java that it plans to sell its assets to Bagel Bistros, Inc. Bagel Bistros
refuses to assure Java that it will continue Internets contract.
Java can
a. assign its rights under the contract but cannot terminate it.
b. terminate the contract and seek damages.
c. suspend performance under the contract until Java is fully paid.
d. do nothing.
Hometown Shops Retail Company has assets of less than $10 million and fewer than
five hundred shareholders. Interstate Outlets, Inc., has assets of more than $10 million
and more than five hundred shareholders. The Securities Exchange Act of 1934 applies
to
a. Hometown Shops and Interstate Outlets.
b. Hometown Shops only.
c. Interstate Outlets only.
d. neither Hometown Shops nor Interstate Outlets.
The term for the legal death of the artificial “person of Skytop Services, Inc., or any
other corporation, is
a. surviving corporation.
b. dissolution.
c. takeover.
d. winding up.
Jill and Karl contract for the sale of Jills horse for $1,000. Unknown to either party, the
horse has died. Karl is
a. entitled to another horse of equivalent value.
b. not required to pay due to the mutual mistake.
c. not required to pay due to the unilateral mistake.
d. required to pay because she assumed the risk the horse might die.
Eden, the chief executive officer of Flo-Thru Piping Corporation, wants to ensure that
Flo-Thrus activities are legal and ethical. The best course for Eden and Flo-Thru is to
act in
a. good faith.
b. ignorance of the law.
c. regard for the firms shareholders only.
d. their own self interest.
Over the course of a year, Moms Appliance Company sells its wares to customers to
whom it extends credit. Moms orders the appliances from NET Appliance Depots
warehouse, from which the items are shipped via common carrier to Moms customers.
Article 2 of the UCC governs
a. all of the parties sales of the goods.
b. Moms extension of credit.
c. NETs storage of the goods.
d. the common carriers delivery of the goods.
Sari buys a new sport utility vehicle (SUV) from Tastic Cars & Trucks, Inc. The most
important factor in determining whether an express warranty is created is whether
a. Sari expresses to Tastic what she wants warranted.
b. Saris desire for the SUV becomes part of her motivation to deal.
c. Tastic expresses to Sari what it expects of its customers.
d. Tastics promise becomes part of the basis of the bargain.
Lee wants to begin importing athletic shoes under the corporate name Mercury, Inc.
Mercury should include most of its corporate rules in
a. the articles of incorporation.
b. the bylaws.
c. the corporate charter.
d. the minutes of the first meeting of the board of directors.
Nash buys a car under a warranty from Rough Ride Motors. Nash soon discovers that
the car has a defect that significantly affects its value and use. In all states and the
District of Columbia, Nash may have remedies under
a. a lemon law.
b. a letter of credit.
c. Article 74 of the CISG.
d. the Automobile Dealers Day in Court Act.
Wendy is a consumer who files for, and is granted, a discharge of her debts in
bankruptcy. The consequences to Wendy of this discharge are most likely to include
a. blemished credit ratings for up to ten years.
b. favorable publicity.
c. lower interest charges for new debts.
d. unexpected job offers from potential employers.
Clem gets a $100 check as a gift from Daria. Clem crudely increases the amount of the
check to $1,00the alteration is obviousand transfers it to eReady Sets, Inc., in exchange
for a 3D HD TV. eReady deposits the check in its bank account at First Town Bank.
HDCs of this check include
a. Clem, eReady, and First Town Bank.
b. Clem only.
c. eReady and First Town Bank only.
d. none of these parties.
According to the terms of Carmens will, specific gifts are made, and taxes and other es-
tate expenses and debts are paid. The assets of Carmens estate that remain are most
likely to be distributed
a. by codicil.
b. holographically.
c. per capita.
d. through a residuary clause.
WiFi Corporation, a U.S. firm, signs a contract with Bueno Computadores, Ltd., an
Argentinean firm, for a shipment and payment for WiFis goods. This is
a. a distribution agreement.
b. a joint venture.
c. direct exporting.
d. licensing.
Eagle Properties, a real estate investment and sales firm, presents a form contract to its
customer Floyd, who wants to buy a certain quarter acre of land in a proposed housing
subdivision that Eagle is marketing. Eagle does not pressure Floyd to sign a contract,
but offers its form on a take-it-or-leave basis. If Floyd signs the form, is it enforceable?
Anyone who writes a book has copyright protection in every country in the world.
The definition of security in the Securities Act of 1933 does not include instruments and
interests commonly known as securities.
Eminent domain is the right of an owner in fee simple absolute to transfer property to
whomever he or she wishes.
A public policy underlying the imposition of strict product liability is that consumers
should be protected against unsafe products.
Through agents, a principal can conduct multiple business operations simultaneously.
Businesses usually pay taxes on the personal property they own, use, or lease.
If a debt is liquidated, an accord and satisfaction cannot take place.
A bargained-for exchange is one of the elements of consideration.
If a lessee is insolvent, a lessor can stop a carrier or bailee from delivering the goods
regardless of the quantity shipped.
The UCC imposes special business standards on merchants because of their relatively
high degree of commercial expertise.
It may be a crime to take anothers property, but it is not a crime to receive stolen goods.
A reverse mortgage starts as a fixed-rate mortgage and then converts into an
adjustable-rate mortgage.
A corporation has perpetual existence regardless of what the articles of incorporation
state.
Winnie opened her first Xtreme Sportz outlet six years ago. To open outlets in more
locations, Winnie needs capital and wants to attract investors. How can she do this?
Ian transfers a note, for consideration, to Jock by blank indorsement and delivery. Jock
transfers the note to Kelly, who takes it in good faith. What does Ian warrant to Kelly?
An event must be certain to occur to constitute a contractual condition.
Contractual capacity refers to the size or volume of a contract.
Ethics is the branch of philosophy that focuses on what constitutes right and wrong
behavior.
Self-defense is a defense to a charge of assault.