Jo files a suit against Lara in a Missouri state court. Lara’s only connection to Missouri
is an ad on the Web originating in Nebraska. For Missouri to exercise jurisdiction, the
issue is whether Lara, through her ad, has
a. a commercial cyber presence in Missouri.
b. conducted substantial business with Missouri residents.
c. general maximum contact with Missouri.
d. solicited virtual business in Missouri.
Ultra Kleen, Inc., operates a chain of laundry establishments throughout the United
States. The government entities that are most likely to be involved in regulating the
chain’s environmental impact are
a. Congressional committees.
b. federal and state administrative agencies.
c. local chambers of commerce.
d. local police departments.
Jean is playing a computer game on a bad disk that melts in her drive, starting a fire that
injures her hands. Jean files a suit against K-Tech, Inc., the game’s manufacturer.
K-Tech is held liable under the doctrine of strict liability. A significant application of
this doctrine is in the area of
a. cyber torts.
b. intentional torts.
c. product liability.
d. unintentional torts.
Fab is the owner and manager of a business trust. Gilly is the beneficiary.
Responsibility for the debts and obligations of the trust rest with
a. Fab and Gilly.
b. Fab only.
c. Gilly only.
d. neither Fab nor Gilly.
The government of Iran violates an international law. Persuasive tactics to remedy the
situation fail. The only recourse of other nations is to
a. approve the European Union’s enforcement of the law.
b. ask the International Court of Justice to enforce sanctions.
c. seek enforcement of the law through the United Nations.
d. take coercive actionsever relations, impose boycotts, go to war.
Fact Pattern 3-1
Java Cafes, Inc., and Kaffe Import Corporation dispute a term in their contract.
Refer to Fact Pattern 3-1. If Java and Kaffe have a long-standing business relationship
that they would like to continue, a preferred method of settling their dispute may be
mediation because
a. the case will be heard by a mini-jury.
b. the dispute will eventually go to trial.
c. the process is not adversarial.
d. the resolution of the dispute will be decided an expert.
Lena borrows from Mac and Nicol, using the same collateral for both loans. Only Nicol
has a perfected security interest. Lena defaults on both loans. The party with first rights
to the collateral is
a. Lena.
b. Mac and Nicol, in proportion to Lena’s debt to each.
c. Mac only.
d. Nicol only.
Lani is asked to serve as a witness to Mona’s will. To qualify, Lani must be
a. a collateral heir.
b. a lineal descendant.
c. eighteen years of age or older.
d. mentally competent.
The Association of Southeast Asian Nations is a regional trade association that was
created through
a. a bilateral agreement.
b. a lateral agreement.
c. a multilateral agreement.
d. a unilateral agreement.
Leon files a suit against Moira, a medical doctor, alleging negligence. As a physician,
Moira is held to the standard of
a. a blameless individual.
b a faultless ordinary person.
c. a reliable professional.
d. a reasonable physician.
Residence Painting Company has a claim against Stuart’s property to satisfy a debt that
takes priority over other claims against the same property. This is
a. a lien.
b. a violation of most state laws.
c. a writ of attachment.
d. a garnishment.
Ross e-mails Super Snowboard Company’s marketing campaign to Winter Sports
Corporation, Super’s competitor, without its permission. This is
a. copyright infringement.
b. patent infringement.
c. trademark infringement.
d. a theft of trade secrets.
Fact Pattern 13-3
Moore Properties, Inc., offers in writing to sell to Lawn Acres Development
Corporation a certain half-acre of land for “$112,000.” After Lawn Acres signs the offer
in acceptance and returns it, Moore discovers that the price should have been stated as
“$121,000.”
Refer to Fact Pattern 13-3. The effect of Moore’s misstatement of the price will most
likely fall on
a. Moore and Lawn Acres, who must split the difference.
b. Moore only.
c. Lawn Acres only.
d. neither Moore nor Lawn Acres.
Fabiola, or any foreign citizen, can bring a civil suit in a U.S. court for
a. a violation of a treaty of the United States only.
b. a violation of a treaty of the United States or of the law of nations.
c. a violation of the law of nations only.
d. no purpose.
Estes, an accountant, contracts to perform services for Frasier. In performing those
services, Estes uncovers a suspicious financial transaction. Estes is most likely not
liable if he
a. acted negligently in failing to discover the transaction sooner.
b. conceals the discovery and otherwise finishes the work.
c. investigates and reports the discovery to Frasier.
d. obtains restitution from the perpetrator without Frasier’s knowledge.
Fact Pattern 25-5
Mary’s home is in a state that has a $30,000 homestead exemption. Mary defaults on a
$60,000 debt that she owes to Nina. Mary’s home is sold at auction for $80,000.
Refer to Fact Pattern 25-5. Mary will receive
a. $0.
b. $30,000.
c. $50,000.
d. $60,000.
Roy owns Roy’s Cafe. A fire destroys the cafe, and Roy is arrested on suspicion of
setting it to collect the insurance. At the time of the arrest, Roy is not informed of his
rights. Any statement Roy makes will be admissible
a. in all circumstances.
b. in some circumstances.
c. in no circumstances.
d. regardless of the circumstances.
Tia signs a lease that states that any change in the zoning law that affects the lease will
cause its termination. Union City’s zoning board adopts a new zoning classification that
affects the lease. This adoption satisfies
a. no condition.
b. the condition precedent.
c. the concurrent condition.
d. the condition subsequent.
Fact Pattern 13-2
Grover contracts to sell two tracts of land to Hank. Both parties believe that the two
tracts are adjacent, but in fact they are not. Grover is still willing to sell the land, but
under these circumstances the deal would adversely affect Hank.
Refer to Fact Pattern 13-2. The parties’ belief about the adjacency of the property is
a. a bilateral mistake.
b. a fraudulent misrepresentation.
c. a unilateral mistake.
d. unconscionable.
Darla sells a all-terrain, off-road vehicle to Esteban without disclosing that the odome-
ter, which reads 30,000 miles, was disconnected 50,000 miles ago. Darla is most likely
liable for
a. duress.
b. fraud.
c. mistake.
d. nothing.
Kai files a suit against Lana based on one of Lana’s statements that Kai alleges is
fraudulent. To give rise to fraud, the statement must be one of
a. emotion.
b. fact.
c. illusion.
d. opinion.
Lovett County Bank offers to lend money to Kino, the owner of Java Stop, at 15 percent
interest. Before Kino accepts, a state statute is enacted prohibiting loans at rates greater
than 12 percent. Kino and the bank have
a. have a contract for a loan at 15 percent interest.
b. have a contract for a loan at 12 percent interest.
c. have a contract for a loan at 0 percent interest.
d. no contract for a loan.
Text Publishers, Inc., contracts for a sale of textbooks to University Bookstores, Inc.
Vital Shipping Corporation, the carrier, transports the books to Warehouse Storage
Company. Text’s right to stop delivery is lost when University’s rights to the goods are
acknowledged by
a. the appropriate government agency only.
b. Vital Shipping only.
c. Vital Shipping or Warehouse Storage.
d. Warehouse Storage only.
Luke owns a farm near Marshalltown, Iowa, with stands of trees serving as windbreaks.
Luke grows corn on the property. When Luke sells the farm to Nina, if the contract does
not specify otherwise, the sale includes
a. neither the crops nor the trees.
b. the crops and the trees.
c. the crops only.
d. the trees only.
George and Halle disagree as to the exact amount one owes the other. They form a new
agreement that, on fulfillment, will discharge the prior obligation. This is
a. a covenant not to sue.
b. an accord and satisfaction.
c. a release.
d. promissory estoppel.
Alan, the president of Bayside Investments, Inc., and Colin, Bayside’s accountant, are
charged with a crime, after the police search Bayside’s offices. Under the exclusionary
rule
a. certain Bayside records are excluded from subpoena.
b. certain parties to a criminal action may be excluded from a trial.
c. illegally obtained evidence must be excluded from a trial.
d. persons who have biases that would prevent them from fairly deciding the case may
be excluded from the jury.
Home Delivery Corporation and Interstate Transport, Inc., sign an agreement that
provides for the payment of “$1,000 by whichever party commits a material breach of
the contract that creates damages difficult to estimate but approximately $1,000.” This
is
a. a liquidated damages clause.
b. a mitigation of damages clause.
c. a nominal damages clause.
d. a penalty clause.
Mineral Products Corporation, which owns no land, has a right to mine the copper from
Natural Resource Company’s land. Mineral’s right is
a. a leasehold estate.
b. a license.
c. an easement.
d. a profit.
Global Services Corporation engages in trade practices that may violate antitrust law.
The Federal Trade Commission has the power to act against unfair trade practices under
a. the Clayton Act.
b. the Federal Trade Commission Act.
c. the Sherman Act.
d. no law.
Rita is appointed as an agent for Superior Sales, Inc. The agency agreement is silent as
to the level of sales that Rita is expected to achieve. She must
a. achieve nothing because the agreement says nothing on the issue.
b. attain the level that Rita achieved with her previous employer.
c. maintain the level Superior attained before Rita became an agent.
d. use reasonable diligence and skill in selling.
In a skateboarding accident with Ryan, Starla is injured. Ryan’s insurance company’s
offers her $25,000 to release him from liability, and she accepts. Later, she learns that
her injuries are more serious than she realized. The release
a. bars Starla’s further recovery from Ryan.
b. is unenforceable because Starla’s injuries are unforeseeably difficult.
c. is unenforceable because Ryan has a preexisting duty to pay.
d. is unenforceable because the release is an illusory promise.
Safe-T Guard Services enters into a contract to secure Taylor’s Business Park from
vandalism and theft between 6 p.m. and 6 a.m. nightly for six months. At the end of the
term, if there has been no vandalism or theft in the Park, Safe-T’s performance will have
been
a. absolute.
b. complete.
c. conditional.
d. substantial.
Fact Pattern 36-3
Mediterranean Investment Corporation’s (MIC) articles of incorporation prohibit a sale
of its assets without a vote of the board of directors. MIC’s officers sell some assets to
North Atlantic Company without notice to the board. The officers also fail to pay MIC’s
taxes on time, and some MIC funds are not accounted for.Refer to Fact Pattern 36-3.
The appropriate remedy is most likely
a. a sale of the rest of MIC’s assets to its directors and shareholders.
b. MIC’s consolidation or merger with North Atlantic.
c. MIC’s dissolution.
d. payment of damages to MIC’s officers.
Opie enters into a contract with Belle. Later, Opie is adjudged mentally incompetent.
Raye, Opie’s daughter, attempts to void Opie’s contract with Belle on the ground of
Opie’s incompetency. The contract is
a. enforceable if Opie had capacity at the time the contract was formed.
b. enforceable if Belle is also incompetent.
c. enforceable if Raye knew of the contract when it was formed.
d. void.
Urban County operates its own municipal public drinking water system for which the
Environmental Protection Agency has set maximum levels of pollutants. Urban does
not use any equipment to meet these standards. With regard to any contamination of the
water, this is most likely
a. a violation.
b. not a violation because Urban does not set the standards.
c. not a violation because water is not a stationary source.
d. not a violation because Urban does not use any equipment.
An effective offer requires a reasonable price related to market value.
When a contract party alters a written contract, the other party must adapt his or her
performance accordingly.
Before filing for bankruptcy, a consumer-debtor must receive credit counseling.
Only state law governs drug tests of private-sector employees.
Estray statutes determine ownership rights in fungible goods that have been ‘strayed.”
Administrative agencies cannot make legislative rules, or substantive rules, that are as
legally binding as laws that the Congress passes.
Cities and counties may not restrict emissions from motor vehicles.
A target corporation’s attempted takeover of an acquiring corporation is referred to as
the Pac-Man defense.
Any third party beneficiary to a contract who is not an intended beneficiary is
incidental.
A bank is subject to a civil suit if its customer writes a bad check.
There are no exceptions to the employment-at-will doctrine.
A victim of alleged discrimination must bring a suit against an employer before filing a
claim with the Equal Employment Opportunity Commission.
An electronic symbol, adopted by a person with the intent to sign an e-record, is an
e-signature.
State law may mandate that an incontestability clause be included in an insurance
policy.
The basis for contributions to help pay for an employee’s loss of income on retirement
is the employee’s annual wage base.
A director is a fiduciary of a corporation.
Stored-value cards are a form of digital cash.
A corporation that is selling all of its assets must obtain approval only from its
shareholders.
A franchisor cannot impose quality standards on a franchisee.
In some circumstances, a shareholder may petition a court to have the corporation
dissolved.