1) Garth owns two all-terrain vehicles (ATVs), worth $1,000 and $500, respectively.
Helen agrees to buy “Garth’s ATV” for $750. Garth believes, in good faith, that he is
selling the $500 ATV. Helen believes, in good faith, that she is buying the $1,000 ATV.
In this situation
a.Garth is entitled to $750 for the $500 ATV.
b.Helen is entitled to the $1,000 ATV for $750.
c.Helen must buy both ATVs for $1,500.
d.there is no contract.
2) Fact Pattern 35-1B
Kyla replaces Lomax in his job at Motor Vehicle Manufacturing Corporation (MVMC).
Refer to Fact Pattern 35-1B. Lomax believes that he has been discriminated against on
the basis of his age. For the Age Discrimination in Employment Act of 1967 to apply
a.Kyla must be forty years of age or younger.
b.Kyla must be forty years of age or older.
c.Lomax must be forty years of age or older.
d.Lomax must have been MVMC’s employee for at least forty years.
3) HazMat Waste Corporation operates a hazardous waste storage facility. Concerned
that there may be a release of chemicals from the site, HazMat sells the property to
Investment Holdings, Inc. If there is a release, HazMat is most likely
a.liable.
b.not liable because the site was sold before the release.
c.not liable because HazMat was concerned about the release.
d.not liable because HazMat no longer operates the facility.
4) Rico does not work for Street Bikes Company, but wrongfully obtains inside
information concerning the firm. Based on the information, Rico buys and sells Street
Bikes stock for personal gain. The Securities and Exchange Commission prosecutes
Rico, arguing that he is liable because he stole information rightfully belonging to
another. This argument is
a.the blue-sky theory.
b.the misappropriation theory.
c.the free-writing prospectus theory.
d.the tipper/tippee theory.
5) Regal Autos, Inc., sells cars to consumers. To avoid liability for oral express
warranties, each Regal sales agreement should note that a car is sold
a.as is.
b.in perfect condition.
c.subject to warranties included in the written contract only.
d.with no known defects.
6) Rafi, a van driver for Speedy Delivery Company, causes a multi-vehicle accident on
a city street. Rafi and Speedy are liable to
a.all those who were injured.
b.only those who were uninsured.
c.only those whose injuries could have been reasonably foreseen.
d.only those whose vehicles were closest to Rafi’s van.
7) The Fish House, a seafood restaurant, obtains from Guaranty Insurance Company a
policy that provides if a dispute arises between the parties concerning the settlement of
a claim, the dispute must be submitted to an impartial third party, not a court, for
resolution. This is
a.an antilapse clause.
b.an arbitration clause.
c.an appraisal clause.
d.an incontestability clause.
8) 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.counterclaim.
b.motion for judgment on the pleadings.
c.motion for summary judgment.
d.motion to dismiss.
9) The Bay City Planning Department, the Coastal County Zoning Commission, the
Delaware Environmental Quality Agency, and the U.S. Bureau of Land Management
issue regulations. These rules constitute
a.administrative law.
b.case law.
c.stare decisis.
d.statutory law.
10) Bread & Bagels Bakery enters into a contract with Cineplex for discounted tickets
for Bread & Bagels’ employees. Cineplex breaches the contract and Bread & Bagels
enters into a contract with DigiMovies for the same service at a lower price. Bread &
Bagels might be awarded nominal damages to
a.establish, as a matter of principle, that Cineplex acted wrongfully.
b.provide Bread & Bagels with funds for a foreseeable loss beyond the contract.
c.provide Bread & Bagels with funds for its loss of the bargain.
d.punish Cineplex and set an example to deter others from similar acts.
11) Global Outfitters Outlet and Hyacinth, a consumer, enter into a contract for a sale of
ultra-weather camping gear. If the contract includes a clause that is perceived as grossly
unfair to Hyacinth, its enforcement may be challenged under
a.the mirror image rule.
b.the principle of fair trade.
c.the predominant-factor test.
d.the doctrine of unconscionability.
12) Rudy files a suit against Shakes & Shingles, Roofing Contractor, Inc., under the
doctrine of promissory estoppel. Rudy must show that
a.he justifiably refused to fulfill a promise to Shakes & Shingles.
b.he justifiably relied on Shakes & Shingles’ promise to his detriment.
c.Shakes & Shingles justifiably refused to fulfill a promise to him.
d.Shakes & Shingles justifiably relied on his promise to its detriment.
13) Oh! Wow! Markets, Inc., rejects a shipment of turkey that does not conform to its
contract with Poultry Processing Corporation, but is unable to obtain instructions from
the seller. Oh! Wow! Markets can
a.destroy the goods.
b.cure the goods to make them conform to the contract.
c.retain the goods without paying for them.
d.reship or store the goods for the seller.
14) There are no limitations on the shelter principle.
15) When there is a breach of an underlying contract for which an instrument was
issued, the drawer of a check can order his or her bank to stop payment on the check.
16) A purchaser can become an HDC of an instrument even if it is so incomplete that an
element of negotiability is lacking.
17) Merchants are absolute insurers against all accidents arising in connection with the
goods.
18) The states can establish laws and regulations that would interfere with trade and
commerce among themselves.
19) In contract law, the term consideration refers to the serious thought that underlies a
party’s intent to enter into a contract.
20) Cameron is an accountant in the accounting department of Data Analytics
Company. Cameron’s son’s college tuition is due within a week, or he cannot continue
taking classes. To meet the due date, Cameron transfers funds from Data Analytics to a
fictitious bank account, planning to repay the firm within one month. The transfer is
discovered before the firm is repaid, and Cameron is arrested. What crime, or crimes, if
any, has Cameron committed?
21) An expert witness is a person who is directly involved in the events concerning a
lawsuit.
22) All parties to a negotiable instrument will be discharged when any party liable on it
pays to a holder the full amount due.
23) Sebastian was the manager of Thai Bistro, a restaurant specializing in Southeast
Asian foods. Sebastian opened a bank account in Thai Bistro’sname, signing the
account signature card as “owner.” Umeko, who was often at Thai Bistroand had free
access to its office, told others that she was “an owner” and “a partner.” She also opened
a bank account in Thai Bistro’sname, and signed the account signature card as “owner.”
Sebastian told Vijay, the owner of Wong Noodles, Inc., that Umeko was a member of a
partnership that owned Thai Bistro. On this basis, Wong Noodlesdelivered its goods to
Thai Bistroon credit. In fact, Thai Bistrowas owned by a corporation. When the unpaid
account totaled more than $10,000, Wong Noodlesfiled a suit against Umekoto collect.
On what basis might Umekobe liable for the debt?