1) Savers Mart, Inc., distributes its merchandise on an interstate basis. Under the
commerce clause, Congress has the power to regulate
a.any commercial activity in the United States.
b.only activities that are in intrastate commerce.
c.only activities that are in local commerce.
d.none of the choices.
2) Island Breeze Company designs and makes desk, window, and ceiling fans. In a
product liability suit based on negligence, Island Breeze could be liable for violating its
duty of care with respect to all of the following except
a.the design of the fans.
b.the production process used to make the fans.
c.the warnings on the labels of the fans.
d.a consumer’s unforeseeable misuse of a fan.
3) Natural Gas, Inc., and Olio Energy Company refine and sell natural gas. To limit the
supply of natural gas on the market and thereby raise prices, Natural Gas and Olio
Energy agree to buy “excess” supplies from dealers and “dispose” of it.
The Natural Gas and Olio Energy deal is
a.a deal that neither restrains trade nor harms competition.
b.a legal restraint of trade.
c.a per se violation of antitrust law.
d.subject to analysis under the rule of reason.
4) Over the course of a year, Suites & Sets Corporation sells household furnishings to
customers to whom it extends credit. Suites & Sets orders the furnishings from The
Storage Depot’s warehouse, from which the items are shipped via common carrier to
Suites & Sets customers. Article 2 of the UCC governs
a.all of the parties’ sales of the goods.
b.Suites & Sets’ extension of credit.
c.The Storage Depot’s storage of the goods.
d.each company’s management of its operations.
5) Shasta offers to sell a used hay baler to Roberto, but receives a letter of acceptance
from Quito, who has no relation to Roberto. A valid contract exists between
a.Shasta and Roberto.
b.Shasta and Quito.
c.Roberto and Quito.
d.none of the choices.
6) Replay Sports Stores and Sports Power Products, Inc., enter into a contract for a sale
of trampolines. Sports Power Products is 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.
7) Fact Pattern 29-2B
Robin’s home is in a state that has a $30,000 homestead exemption. Robin defaults on a
$60,000 debt that she owes to Suburban Mortgage Company. Robin’s home is sold at
auction for $80,000.
Refer to Fact Pattern 29-2B. Robin will receive
a.$0.
b.$30,000.
c.$50,000.
d.$60,000.
8) Liu enters Mountain Triathlon, an athletic competition in which Liu has never
competed. Regarding the risk of injury, Liu assumes the risks
a.attributable to the triathlon in any way.
b.different from the risks normally associated with the triathlon.
c.greater than the risks normally associated with the triathlon.
d.normally associated with the triathlon.
9) Sales & Revenue, Inc., discovers that defamatory statements about its policies and
products are being posted in an online forum. TransWeb Inc., the Internet service
provider whose users are posting the messages, refuses to disclose the identity of the
person or persons responsible. Sales & Revenue files a suit against the anonymous
users. The plaintiff can obtain from TransWeb the identity of the persons responsible for
the defamatory messages by
a.using the authority of the court.
b.gaining unauthorized access to TransWeb ‘s servers.
c.deceiving TransWeb into revealing the posters ‘ identities.
d.no legal or illegal means.
10) Condos & Course Development, Inc., fills a wetlands area that it owns without a
permit from the U.S. Army Corps of Engineers. Condos & Course Development plan to
build a golf course and residences on the site. Under the Clean Water Act, this is most
likely
a.a violation.
b.not a violation because a permit is not needed to fill wetlands.
c.not a violation because the area was filled before construction.
d.not a violation because there was no discharge of pollution.
11) Trucking Dispatch Company and Ucello put their agency agreement into a written
document that describes the rights and duties of both parties. Ucello, as the agent, has
a.apparent authority.
b.none of the choices.
c.express authority.
d.implied authority.
12) Ultrahazard Removal & Disposal Corporation transports radioactive materials.
Vincent, an Ultrahazard employee, is diagnosed with radiation sickness after exposure
to the materials. Vincent€s suit against Ultrahazard to recover for the injury is known as
a.an environmental impact statement.
b.a nuisance.
c.a toxic tort.
d.a hazardous substance response.
13) Congress enacts the Ad Restriction Act (ARA) to limit advertising in certain
circumstances. The ARA will be considered valid if it directly advances a substantial
government interest
a.and goes no further than necessary to achieve its purpose.
b.without regard to how “far” it goes.
c.and the parties affected by it can elect how “far” to go in applying it.
d.and goes further than necessary to ensure full coverage.
14) Kalin, Liza, and other consumers form MuniMart Cooperative. This form of
business organization makes it possible for these individuals to
a.avoid personal liability for the acts of the cooperative.
b.obtain an exemption from state laws governing corporations.
c.pay no taxes on their business income.
d. pool their resources to gain an advantage in the marketplace.
15) Secure Investments, Inc., a U.S. firm, expands into international markets through a
joint venture. In this situation, Secure Investments owns
a.all of the operation.
b.as much of the operation as Secure Investments wants.
c.none of the operation.
d.part of the operation.
16) In Precise Paving Company’s suit against Ride, Park n’ Go, Inc., the jury returns a
verdict in Precise Paving’s favor. The company will most likely ask the court to
a.enter a judgment in accordance with the verdict.
b.enter a judgment n.o.v.
c.enter a judgment on the pleadings.
d.order a new trial.
17) Restoration, Inc., contracts to repair a crack in a supporting beam for Stagecraft
Theater for $10,000. If Restoration does not perform, Stagecraft must pay
a.$10,000.
b.$5,000.
c.$1,000.
d.$0.
18) 3.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.
19) A jury€s good sense and careful consideration of consequences is known as
jurisprudence.
20) Rashi is a student at State University. In need of funds to pay for tuition and books,
Rashi asks Tiempo Loans, Inc., for a short-term loan. The lender agrees to make a loan
if Rashi will have someone who is financially responsible guarantee the loan payments.
Umberto, a well-known businessperson and a friend of Rashi’s family, calls Tiempo and
agrees to pay the loan if Rashi cannot. Because of Umberto’s reputation, the loan is
made. Rashi is making the payments, but because of illness he is unable to work for one
month. He asks Tiempo to extend the loan for three months. The lender agrees, raising
the interest rate for the extended period. Umberto is not notified of the extension (and
thus does not consent to it). One month later, Rashi drops out of school. All attempts to
collect the remainder of the loan from Rashi fail. Can Tiempo assert a claim against
Umberto on the debt?
21) Under the UCC, a firm offer for a sale or lease of goods made by a merchant
without consideration can be revoked at any time before acceptance.
22) Unlike statutes, administrative regulations do not have a binding effect.
23) Some provisions of U.S. bribery laws are directed toward accountants.
24) To have standing to sue, a party must have complaining sufficient stake in a matter
to justify seeking relief through the court system.
25) Any written material, including information stored electronically, can be the object
of a discovery request.