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Big Deal! Marketing Company, a U.S. firm, signs a contract with Comercio Exterior,
Ltd., a Chilean firm, to give Comercio the right to use Big Deal!s animation techniques
and characters in product promotions. This is
a. a distribution agreement.
b. a joint venture.
c. direct exporting.
d. licensing.
Band Instruments, Inc., sells seventy-six trombones to Community & School Band
Source, Inc. To avoid liability for most implied warranties, Band Instruments should
state in writing that the trombones are sold
a. as is.
b. by a merchant.
c. in perfect condition.
d. with no known defects.
Effervescent Egg Cream Companys trademark is used by Fizzy Drinks without its
owners permission. Fizzys use of the mark is actionable provided that
a. consumers are confused.
b. Fizzys use is intentional.
c. Fizzy and Effervescent are competitors.
d. Effervescents mark is registered.
A provision in the California state constitution conflicts with a provision in the U.S.
Constitution. If challenged
a. neither provision will be enforced.
b. the provisions will be balanced to reach a compromise.
c. the state provision, not the U.S. Constitution, will be enforced.
d. the U.S. Constitution, not the state provision, will be enforced.
Sly includes in his song "Sneaky a few seconds of Wilys copyrighted sound recording
"Wits without permission. Some federal courts have found that such digital sampling is
a. a violation of copyright law.
b. a "fair use exception to the provisions of the act.
c. not a "fair use exception to the provisions of the act.
d. all of the choices.
Orb, Inc., does business online around the globe. The United Nations Convention on the
Use of Electronic Communications in International Contracts and other international
agreements improve global commercial certainty by
a. all of the choices.
b. determining an Internet users location for legal purposes.
c. providing that e-signatures are the equivalent of signatures on paper.
d. providing for the recognition of judgments by other nations courts.
Nini, a police officer, wants to search the offices of Operational Business Corporation.
She asks Judge Pearl to issue a warrant. Under the Fourth Amendment, no warrant for a
search can be issued without
a. double jeopardy.
b. probable cause.
c. reasonable doubt.
d. immunity.
To resolve a dispute in nonbinding arbitration, Alyson in Baltimore and Chuck in
Denver utilize E-Resolve, an online dispute resolution (ODR) service. This limits these
parties recourse to the courts
a. not at all.
b. until the ODR service has issued a decision.
c. with respect to any dispute arising between them.
d. with respect to this dispute only.
Arnold buys a backhoe from Big Dig Equipment Inc. Arnold is unaware that Credit
Collection Company holds a lien against the backhoe when he buys it. If Credit
Collection repossesses the backhoe, Arnold can
a. recover from Big Dig for breach of warranty.
b. do nothing.
c. file criminal charges against Big Dig and Credit Collection.
d. recover damages from Credit Collection for breach of warranty.
Technicians Union represents the workers of Unix Toys. A strike by the union will be
legal if the strikers
a. form a picket line.
b. form a massed barrier and deny management and nonunion workers access to Unix
Toyss plant.
c. stay in Unix Toyss plant without working.
d. all of the choices.
Mona is induced by her guardian Newt to sign a contract to invest her student loan
funds in Overseas Bank through Newts investment firm. Unknown to Mona, Newt
realizes ongoing commissions from the investment. Most likely, Mona may
a. not rescind the contract.
b. rescind the contract on the basis of undue influence.
c. rescind the contract on the basis of mistake.
d. rescind the contract on the basis of unconscionability.
Elaine owns the Fabric & Yarn store. Goldie is a salesperson in the store. When Goldie
makes a sale to Heather, the sale is binding on
a. Elaine.
b. Goldie.
c. Fabric & Yarn onlyand only if Elaine is present at the sale.
d. no one.
A franchise agreement between Grid Tools Company and Hometown Hardware, Inc., is
silent on a time for termination of the franchise. Grid Tools may
a. never terminate.
b. terminate at any time.
c. terminate on reasonable notice.
d. terminate on three days notice.
Martin files a suit against Nichelle in a state court over payment due on a short-term
employment contract. The case proceeds to trial, after which the court renders a verdict.
The case is appealed to an appellate court.
After the states highest courts review of Martinv. Nichelle, a party can appeal the
decision to the United States Supreme Court if
a. a federal question is involved.
b. a question of state law remains unresolved.
c. the party is unsatisfied with the result.
d. the state trial and appellate court rulings are different.
Nuncio serves in a representative capacity for Obadiah. With respect to binding
Obadiahto contracts, Nuncios authority
a. may be actual or apparent.
b. must be actual and apparent.
c. must be actual and not apparent.
d. cannot be actual or apparent.
Ferris is refinishing his kitchen floor and needs a floor sander to complete the job.
Ferriss neighbor Gerda suggests that he call Home Repair Rentals, Inc. Home Repair
leases Ferris a floor sander. In this transaction, the lessor is
a. Ferris.
b. Gerda.
c. Home Repair.
d. none of the parties.
Replay Sports Stores and SportsPower Products, Inc., enter into a contract for a sale of
trampolines. SportsPower Productsis a merchant who deals in goods of the kind sold.
Under the UCC, an implied warranty of merchantability arises
a. automatically.
b. only if the buyer asks for such a warranty.
c. only if the seller expresses such a warranty.
d. only in conjunction with lease contracts, not sales contracts.
Lana agrees to work as Michelles personal assistant for one year but dies in the ninth
month of the contract. Lanas estate
a. is discharged from any contractual liability.
b. must find a competent assistant to fulfill the contract.
c. must pay damages.
d. must refund any money paid to Lana on the contract.
Physicians Clinic orders by phone seven boxes of single-use latex gloves from Quality
Medical Supplies, Inc. After three boxes are delivered and accepted, Physicians Clinic
repudiates the contract. Quality Medical can enforce the contract to
a. any extent because the order was placed orally.
b. no extent because the order was placed orally.
c. the extent of the three accepted boxes.
d. the extent of the four undelivered boxes.
Bay City Merchants Corporation has six shareholders, four of whom are members of
the same family. All of Bay Citys shareholders agree in writing to operate without
shareholders meetings. Under the Revised Model Business Corporation Act, this most
likely warrants
a. no penalties or sanctions.
b. the imposition of a fine on Bay City.
c. the imprisonment of Bay Citys shareholders.
d. the piercing of Bay Citys corporate veil.
Eudora is interested in buying a franchise from First Home Realty Company. In this
transaction, the Federal Trade Commissions Franchise Rule
a. does not apply.
b. enables Eudora to weigh the deals risks and benefits.
c. enables First Home to weigh the deals risks and benefits.
d. prohibits certain types of anticompetitive agreements.
Boni, the owner of Café Rico, knows about, but does not take any action to prevent, the
sexual harassment of employees. Boni and the café may be liable for such harassment
by
a. an employees previous employer.
b. a customer or a co-worker.
c. an employees spouse or other close relative.
d. none of the choices.
Cookie Shops, Inc., sells a franchise to Donuts & Desserts, a mall food-court vendor.
Cookie Shops is
a. a franchisee.
b. a franchisor.
c. an agent.
d. a principal.
The brakes on a train owned by Rolling Stock Railway, Inc., malfunction. The train
rolls towards maintenance workers on the tracks. Everyone gets out of the way except
Sid, who wants to show off. The train hits Sid, who sues Train Components, Inc., the
brakes manufacturer. Train Components can raise the defense of
a. a component-part manufacturer.
b. assumption of risk.
c. privity.
d. product misuse.
Edge is a video game featuring interactive extreme sports. The graphics used in the
game are protected by
a. copyright law.
b. patent law.
c. trademark law.
d. none of the choices.
Able Contractors, Inc., enters into a contract with Beau to repair, rebuild, and remodel
Coastal Marina & Boardwalk, using products from Delta Lumber & Marine. Eatwell
Café is next to Coastal Marina.
Coastal Marina is
a. a delegatee.
b. an assignee.
c. an incidental beneficiary.
d. an intended beneficiary.
Eden Valley Ranch and Farm Supply Corporation enter into a contract for a sale of
fencing materials. Farm Supply, a merchant who deals in goods of the kind, makes
implied and express warranties in connection with the sale. Under the UCC, if these are
inconsistent
a. all implied warranties displace all express warranties.
b. all express warranties displace all implied warranties.
c. the implied warranty of fitness for a particular purpose takes precedence.
d. the implied warranty of merchantability takes precedence.
Foster contracts with Golf Carts Unlimited, Inc. to buy five golf carts. The contract lists
the five carts as GC001, GC002, GC003, GC004, GC005. Identification
a. requires that Foster verify his identity to take possession of the carts.
b. has taken place.
c. cannot take place until the contract is reviewed by a court.
d. will take place only when Foster pays for the golf carts.
Todos, Ltd., agrees to market the products of United Sales, Inc., in Venezuela. When the
government is unexpectedly overthrown in a revolution, Todos can continue to fulfill its
contract butonly for a much higher price. United agrees to pay but later files a suit to
recover the difference. The court will most likely rule that
a. a change in government is a risk ordinarily assumed in business.
b. an unforeseen difficulty supported the contract modification here.
c. Todos engaged in extortion or the so-called holdup game.
d. Todos had a preexisting duty to supply the goods at the initial price.
Lucy, a minor, disaffirms a contract for necessaries without returning the goods. To
Mannys Food Mart, the seller, Lucy is required to pay
a. nothing.
b. the reasonable value of the goods.
c. the sales price of the goods.
d. the ultimate worth of the goods.
Quest Holdings, Inc., orally contracts for a lease of its facilities to Ray to use for his
Swamp & Bayou Fishing Camp. Ray pays part of the rent, takes possession, and
improves the property for use by his enterprise. The contract is most likely enforceable
by
a. Quest Holdings andRay.
b. Quest Holdings but not Ray.
c. any interested third party, such as a Swamp & Bayou client.
d. no one.
Steel ProductionIndustries, Inc., employs five hundred workers. For the Occupational
Safety and Health Administration, Steel Production must do all of the following except
a. keep occupational injury and illness records for each employee.
b. report any work-related diseases.
c. report any employee death due to a work-related incident within eight hours.
d. pay employees higher wages for working in more dangerous areas.
On July 10, Pet Supply Store orders fifty small dog collars from Quality Collars, Inc. to
be delivered by July 15. On July 13, Quality Collars tenders fifty large dog collars. Pet
Supply rejects the shipment. Quality Collars has
a. no right to cure.
b. until July 15 to cure.
c. until the end of the business day on July 13 to cure.
d. unlimited time to cure.
Rosalind, a seventeen-year-old, signs a contract to sell her car to Street Fleet Used Cars.
The next day, Rosalind tells Street Fleet that shes decided not to sell the car. Rosalind is
liable to Street Fleet for
a. the cost of a car of comparable value.
b. the value of her performance under the contract.
c. the amount of its profit on the deal.
d. nothing.
Desdemona works for eInnovation, Inc. Her job includes putting 'spin on the firms
successes and failures. In this context, ethics has to do with how businesspersons, in
making their decisions, apply
a. legal doctrine.
b. moral and ethical principles.
c. corporate guidelines.
d. financial priorities.
A manufacturing defect is a departure from a product units design specifications that
results in products that are physically flawed.
In May, Zach agrees to work for Affordable Plumbing Supplies Company at $800 per
week for a year beginning June The following January, Budget Pipes & Fittings, Inc.,
offers Zach the same work at $900 per week. Zach tells Affordable Plumbing about the
offer. Affordable Plumbing offers to enter into a new contract with Zach at $875 per
week. If Zach agrees, is the new Affordable Plumbing contract enforceable? Why or
why not?
A principal is always directly responsible for an agents misrepresentation made within
the scope of the agents authority.
An assignee has a right to demand performance from the obligor.
After a partner dissociates from a continuing partnership, the partnership is no longer
bound by the acts of the dissociated partner, even on a theory of apparent authority.
A statute or court decision that makes an offer illegal automatically terminates the offer
Any party who does not receive what he or she considers a fair bargain can argue
mistake.
A person must have contractual capacity to be an agent.
Agents and employees of Deco Arts Corporation and Echo Imitations, Inc., are
convicted of conspiring to violate a federal law that is punishable by a term of
imprisonment and a fine. Can the corporations be held liable for these crimes? If so,
how can they be punished?
Greensward Landscaping Company enters into a contract with Kent to landscape
Hillview Country Clubs golf course, using Intown Nursery to supply trees and
shrubbery. Jonas owns a lot next to Hillviews course that will benefit from the
improved landscaping. The landscaping is a gift from Kent, a wealthy club member, to
Hillview. What type of beneficiary is Hillview? What type of beneficiary is Jonas?
What type of beneficiary is Intown Nursery? If Greensward refuses to do the job, who
can enforce the contract against it?
An acceptance can impose new conditions or change the terms of the original offer
without rejecting it.
An integrated contract is the complete and final statement of the terms of the
agreement.
A court will pierce the corporate veil of a corporation that is formed to evade an
existing legal obligation.
In most contracts, promises of performance are notexpressly conditioned or qualified.
If work is usually done under the employers direction, this indicates
independent-contractor status.
