Draco agrees to assume Mira’s debt to NuSales Corporation. Draco does not get any
personal benefit for the agreement. To be enforceable, the promise must be in writing if
the debt is for
a. $50.
b. $500.
c. $5,000.
d. $50, $500, or $5,000.
Coco agrees to work as Darcy’s personal accountant for one year but dies in the sixth
month of the contract. Coco’s estate
a. is discharged from any contractual liability.
b. must find a competent accountant to fulfill the contract.
c. must pay liquidated damages.
d. must refund any money Darcy paid to Coco on the contract.
Clu, Dolf, and Elton do business as Fertile Valley Farm. Clu’s relationship to the firm
ends, but it continues to do business. This is
a. dissociation.
b. dissolution.
c. winding up.
d. wrongful.
Lyn files a suit against Karl. Karl denies Lyn’s charges and sets forth his own claim that
Lyn breached their contract and owes Karl money for the breach. Karl’s claim is
a. a contrary charge.
b. a counterclaim.
c. a counterpoint.
d. a cross complaint.
The commerce clause of the U.S. Constitution is found in
a. Article I, Section 8.
b. Article I, Section 2.
c. Article VIII, Section 1.
d. Article II, Section 8.
Kelly transfers shares of stock that she owns in Lone Starz Company to Max. A
shareholders’ meeting takes place before Max’s ownership is entered in Lone Starz’s
stock book. A vote at the meeting can be cast by
a. Kelly and Max.
b. Kelly only.
c. Max only.
d. neither Kelly nor Max.
Kelly leases an office from Local Property Company (LPC) for a four-year term with
the rent payable monthly. At the end of the term, Kelly retains possession of the office
with LPC’s consent and continues to pay monthly rent. This is
a. a periodic tenancy.
b. a tenancy at sufferance.
c. a tenancy at will.
d. a fixed-term tenancy.
The main problem with contract reformation is that
a. judges are notoriously corrupt.
b. it takes a long time.
c. the judge becomes a party to the contract.
d. it requires many additional court fees.
Juan and Isidro enter into a contract to buy, restore and reopen the Coastal Park
Carousel. Before either party begins to perform, they agree to cancel their deal. This is
a. specific performance.
b. mutual rescission.
c. accord and satisfaction.
d. novation.
John is a business manager for a small corporation. Which of the following is not an
ethical dilemma that John is likely to encounter?
a. Deciding what kind of pizza to order for a company meeting.
b. Deciding whether to lay off three employees or keep paying their salaries and take a
loss in corporate profits.
c. Deciding whether to say something to an employee who has been making rude sexual
jokes in the workplace.
d. Deciding what to tell a reporter about the recent drop in corporate stock prices.
Sara has a flat-screen TV, a Blu-ray disc player, set of computer games and an
investment portfolio that includes stock in the internet game company Zynga. Sara’s
intangible property includes
a. the TV and Blu-ray player.
b. the computer games.
c. the Zynga stock.
d. the TV only.
On April 1, O.K. Contractors, Inc., contracts to build a store for Lo-Cost Jewelers at a
specific location in Metro City. On May 1, Metro changes its zoning laws to prohibit
the construction of a commercial building at that location. When the store is not built,
Lo-Cost files a suit against O.K. In this situation
a. O.K. is in breach of contract.
b. Metro is in breach of contract.
c. the contract is discharged.
d. the contract is suspended.
Reusable Energy Corporation regularly expresses opinions on political issues. Under
the First Amendment, corporate political speech is
a. discouraged.
b. forbidden.
c. protected.
d. required.
Brasilia, a real estate broker licensed only in Connecticut, concludes a land sale in
Delaware. She can
a. collect the commission if it has not been paid.
b. keep the commission if it has already been paid.
c. foreclose on the property to obtain any unpaid amount.
d. not collect the commission, keep it, or foreclose on the property.
Roger wants Andy to work late on a project. He tells Andy that the morally correct
thing to do is to stay late at the office and work on the project. Andy feels obligated to
stay and work late due to the moral pressure from Roger. Andy stays late at the office,
even though he does not want to. Andy can sue Roger for
a. false imprisonment.
b. battery.
c. defamation.
d. no tort.
Harley induces Gene to sign a contract by placing a gun to Gene’s head. The contract is
void
a. only if the contract has an illegal purpose.
b. only if the terms are unfair to Gene.
c. under any circumstances.
d. only if the gun was loaded.
Lather Up Soap Products Company grants its agent Kathy an exclusive territory in
which to sell Lather Up products. The firm cannot compete with Kathy in that territory
under the principal’s duty of
a. avoidance.
b. cooperation.
c. indemnification.
d. reimbursement.
Digital Products Company includes a shrink-wrap agreement in a transaction with
Eagle Engineering Corporation. A shrink-wrap agreement is an agreement whose terms
are expressed
a. in code at the end of a computer program .
b. inside a box in which goods are packaged.
c. in small print at the end of a paper contract signed by both parties.
d. on a computer screen.
Michael performs a contract with Jill to fix the brakes on her car. Jill leaves her car with
Michael, but then she refuses to pay Michael after he completes the work. Michael tells
Jill that he will not return her car until she pays. Michael’s lien on Jill’s car will end
a. in 30 days.
b. in 60 days.
c. when Michael voluntarily surrenders possession of the car.
d. when Jill obtains a court order requiring Michael to return the car.
Wilma owes Jill $5,000. Jill assigns the claim to Andrew. Jill
a. must notify Wilma of the assignment immediately.
b. must notify Wilma of the assignment within thirty days.
c. must notify Wilma of the assignment to make the assignment effective.
d. is not legally required to notify Wilma of the assignment.
Sela agrees to act on Thom’s behalf, subject to Thom’s control, and Thom trusts Sela to
so act. They set out the terms in a written document, which they both sign. This is
a. an agency by agreement.
b. an agency by estoppel.
c. an agency by ratification.
d. not the creation of an agency relationship.
The Food and Drug Administration (FDA) is investigating reports that Caplets
Pharmaceutical Corporation is putting potentially harmful additives in Doze, a new
pain-relief medication. The FDA’s demands for particular documents from Caplets
a. must be specific and adequately describe the material being sought.
b. must not be specific or an incriminating item might be overlooked.
c. must be general so as to force an uncooperative party’s compliance.
d. may, but need not, be specific because the FDA is a federal agency.
Fact Pattern 38-1
Nika owns land in Ohio. Her ownership rights include the right to sell or give away the
property without restriction, and the right to commit waste, if she chooses.
Refer to Fact Pattern 38-1. Nika deeds some of her land to Polly. The deed states, “To
Polly, for life, then to Quay.” Nika has given Polly
a. a fee simple absolute.
b. a license.
c. a life estate.
d. an easement.
The Arkansas state legislature enacts a statute that prohibits the advertising of video
games “because the games might be harmful to minors.” Despite this new statute, the
president of Games Marketing, Inc. (GMI), orders GMI marketers to place ads in any
media. When a GMI ad appears on HDTV, a local television station, GMI and HDTV
are charged with violating the statute. What is the defendants’ best defense against a
conviction?
The graphics used in “Go!,” a handheld video game featuring racecars, are protected by
a. copyright law.
b. patent law.
c. trademark law.
d. trade secrets law.
Rena wants to bring a case against the United States of America.
a. Both federal and state courts have jurisdiction over Rena’s case.
b. Neither a federal nor a state court has jurisdiction over Rena’s case.
c. Only a federal court has jurisdiction over Rena’s case.
d. Only a state court has jurisdiction over Rena’s case.
Ewa signs an instrument unconditionally promising to pay to “First State Bank” $5,000
with interest in installments with the final payment due June 1, 2014. The instrument
that Ewa signed is most likely
a. a certificate of deposit.
b. a draft.
c. an order to pay.
d. a promissory note.
Integrity Manufacturing, Inc., and Jiffy Delivery Service make a deal over the Internet
that involves e-documents. Under the E-SIGN Act, for an e-document to be
enforceable, it must be in a form that can be
a. accurately reproduced only.
b. retained only.
c. accurately reproduced and retained.
d. encrypted.
The owners of Designer Software, Inc., want to execute wills. Eve is fifteen years old,
Fran is seventeen, and Gail is nineteen. In most states, those with the capacity to
execute a will are
a. all of the owners of Designer Software.
b. Fran and Gail only.
c. Gail only.
d. none of the owners of Designer Software.
An antitrust action is brought against Tri-State Transport Company, alleging the offense
of attempted monopolization. To be guilty of this offense, Tri-State’s attempt must have
a. a dangerous probability of success.
b. a deadly guaranty of success.
c. a distant possibility of success.
d. a distinct improbability of success.
International franchisees usually do NOT pay fees for the license to use a trademark or
trade name.
In a tort action, the state prosecutes and punishes persons who cause injury to others.
An installment contract is a single contract that requires or authorizes delivery in two or
more separate lots to be paid for in one payment.
Independent regulatory agencies are outside the federal executive departments.
A contract entered into under undue influence is voidable.
A price-fixing agreement is an agreement by two or more sellers to boycott a particular
person or firm.
Flights over private land normally do NOT violate the property owners’ rights.
A license permits the use of intellectual property for certain limited purposes.
Revocation is effective on dispatch.
A preemptive right is a preference over other shareholders to cast the determining vote
on fundamental changes affecting the corporation.
An insurance policy is an example of a right that can be assigned.
An individual is not liable for any amount of unauthorized charges on his or her credit
card.
In some states, a judgment creditor must obtain a separate order of garnishment to cover
each of the debtor’s pay periods.
Quotas are limits on the amounts of goods that can be exported.
The filing of a petition for bankruptcy will automatically stay most legal actions against
the debtor.
A copyright is tangible personal property.
The market-share test measures a firm’s percentage share of a market.
Contracts entered into in e-commerce are known as e-contracts.
To be enforceable, a writing evidencing an oral contract must have been signed by the
party who is to be held liable.