1) The decisions made by the courts establish the boundaries of the law as it applies to
almost all business relationships.
2) Whenever a work-related injury or disease occurs, employers must make reports
directly to the Occupational Safety and Health Administration.
3) The debtor has the right to request a confirmation of the unpaid debt or list of
collateral without charge every six months.
4) A condition that must be fulfilled before a party’s performance can be required is a
condition subsequent.
5) A debt-collection agency is someone who regularly attempts to collect debts on
behalf of someone else, usually for a percentage of the amount owed.
6) Expression-oral, written, or symbolized by conduct-is not subject to restrictions.
7) Most states imply a warranty – the implied warranty of habitability – in the sale of
new homes.
8) A client’s negligence is never a defense to a charge of negligence against an
accountant.
9) Fact Pattern 9-B2
CallTalk Corporation, a smartphone and phone-time seller, chooses to use and register
“calltalk” as its second-level domain. Later, CallTalk ‘s less successful competitor,
CellTalk Company, chooses to use and register “caltalk” (an intentional misspelling of
“calltalk”) as its second-level domain. Still later, Call&Talk, Inc., uses the domain name
“callltalk” (also a deliberate misspelling of “calltalk”) without CallTalk ‘s authorization,
to sell pornographic phone conversations.
Refer to Fact Pattern 9B-2. CallTalk wants to sue Call&Talk for its unauthorized use of
the domain name “callltalk.” Before bringing the suit, CallTalk has to ask the court for a
subpoena to discover
a.the true identity of the owner of the unauthorized site.
b.the amount of the profits of the unauthorized site.
c.the estimated costs of the court proceedings and discovery.
d.all of the registered variations of the name “calltalk.”
10) In a one-care auto accident, Carmel is rendered unconscious and otherwise injured.
At the scene, Dana, a physician, acts to save Carmel’s life. Later, Dana seeks to recover
for the cost of the aid. She is most likely to recover
a.nothing.
b.on a theory of an express contract.
c.on a theory of an implied contract.
d.on a theory of a quasi contract.
11) Pualani and Quentin do business as partners in Rio Vista Builders, a residential
construction firm. For federal income tax purposes, Rio Vista would be treated as
a.a pass-through entity.
b.a natural person.
c.a tax-paying entity.
d.a partnership by estoppel.
12) Jayne develops a new color of lipstick. To market her lipstick, Jayne uses a
computer design program to show a famous model using Jayne’s lipstick. Jayne does
not ask the model’s permission. The model can sue Jayne for
a.battery.
b.fraudulent misrepresentation.
c.defamation.
d.appropriation.
13) Nikita, an employee-agent of Operational Processes, Inc., is authorized to access
company trade secrets. Nikita downloads those secrets onto a thumb drive. She then
quits Operational’s employ and goes to work for Quantum Analysis, Inc., an
Operational competitor, with whom she shares the secrets. With respect to the agent’s
duty of loyalty to her principal, this is
a.unethical, but not illegal.
b.neither unethical nor illegal.
c.illegal, but not unethical.
d.unethical and illegal.
14) Grace applies for a homeowners’ insurance policy on her house with Heroic
Insurance Company through Ian, a broker. In this transaction, Ian is
a.an agent for both parties.
b.Grace’s agent, and not Heroic’s agent.
c.Heroic’s agent, and not Grace’s agent.
d.not an agent for either party.
15) Merinaand Nelliform Orchids, Inc. Ultimate responsibility for policy decisions
necessary to the management of corporate affairs rests with Orchids’s
a.board of directors.
b.incorporators.
c.officers.
d.shareholders.
16) 1.Big Beef, Inc. raises calves to sell. Big Beef breeds its cows in April, and the
cows calve in February of the following year. In January Andrea contracts with Big
Beef to buy fifty calves. Identification takes place in
a.January, when the contract is signed.
b.April, when the calves are conceived.
c.February, when the calves are born.
d.a reasonable period of time.
17) Misha and Nguyen are shareholders of Outsourcing Solutions, Inc. Misha’s written
authorization to Nguyen to vote her shares at a shareholders’ meeting is
a.a violation of the duty of loyalty.
b.a preemptive right.
c.a proxy.
d.a quorum.
18) Byron agrees to sell to Charity, for $1,500, a remote parcel of land. They believe the
land to be worthless, but beneath it is a gold mine. Byron can
a.not rescind the contract.
b.rescind the contract on the basis of fraud.
c.rescind the contract on the basis of mistake.
d.rescind the contract on the basis of undue influence.
19) 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
Toys’s plant.
c.stay in Unix Toys’s plant without working.
d.all of the choices.
20) Metro Movers Miami Corporation allows Metro Movers Milwaukee Company to
use Metro Movers’ trademark as part of its company advertising. This is
a.a license.
b.a likelihood of consumer confusion.
c.a generic use.
d.trademark dilution.
21) Donald approves on behalf of Evelyn-but without authorization-a contract with
Farouk to build a new silo. Evelyn does not ratify the contract. The deal with Farouk is
a.an enforceable contract with Donald.
b.a voidable contract.
c.an enforceable contract with Evelyn.
d.an unaccepted offer.
22) Francie drives into Gage’s Auto Service and asks Hong, a Gage’s employee, to
replace a tire on Francie’s car. After Hong replaces the tire, but before Francie pays for
it, any contract between Francie and Gage’s is
a.executed.
b.executory.
c.void.
d.unenforceable.
23) Grover signs an installment contract with Home Appliance Store to finance the
purchase of new kitchen appliances-stove, refrigerator, dishwasher, microwave, and
toasteroven-for $3,999. This transaction is subject to
a.no federal law.
b.the Fair Credit Reporting Act.
c.the Telecommunications Act.
d.the Truth-in-Lending Act.
24) In 2014, Kelly writes Like the Wind, a novel about marathoners and
ultramarathoners. Kelly does not register the work with the appropriate government
office. Under federal copyright law, Kelly’s work is protected
a.for ten years.
b.for twenty years.
c.for the life of the author plus seventy years.
d.forever.
25) Luella trespasses on Merchandise Mart’s property. Through the use of reasonable
force, Merchandise Mart’s security guard Norris detains Luella until the police arrive.
Merchandise Mart is liable for
a.assault.
b.battery.
c.false imprisonment.
d.none of the choices.
26) Solar Power Panels Corporation requires its employees to have a high school
diploma, claiming a connection between a high school education and job performance.
In a suit against Solar Power under the Civil Rights Act of 1964, this is shown to have a
discriminatory effect. Solar Power has
a.an affirmative action defense.
b.a bona fide occupational qualification defense.
c.a business necessity defense.
d.no defense.
27) Garage Magic, Inc., contracts for the sale of a certain number of garage door
openers to Home & Yard Hardware stores. Ian buys one of openers. The applicable
statute of limitations prescribes a period of four years. To bring a product liability claim
against Garage Magic, Ian must file a suit within four years of
a.Ian’s discovery of an injury caused by the opener.
b.Garage Magic’s sale of the opener to Home & Yard.
c.Garage Magic’s design of the opener.
d.Home & Yard’s sale of the opener to Ian.
28) Port Harbor City enacts an ordinance that bans the distribution of all printed
materials on city streets. Later, Quint protests a new “revenue-enhancing” measure also
enacted by the city by distributing handbills. When Quint is charged with violating the
printed-materials ban, he files a suit against the city. Most likely, the court will hold that
the ban is
a.an unconstitutional restriction of speech.
b.constitutional under the First Amendment.
c.justified by the need to protect individual rights.
d.necessary to protect national interests.
29) Chase is injured in an accident while driving an off-road vehicle made by Drivers
Edge, Inc., an out-of-state corporation. Chase files a suit against Drivers Edge, alleging
negligence, and mails a summons and a copy of the complaint to the firm by certified
mail, return receipt requested. The envelope is addressed in part to €Elvin, President,
Drivers Edge, Inc.€ The receipt is returned with the signature of €Francine,€ a Drivers
Edge employee. A U.S. Postal employee later testifies that Francine usually receives
mail on Drivers Edge’s behalf. Drivers Edge does not respond to the suit. In a default
judgment, Chase is awarded damages of $500,000. Later, Elvin claims that he was not
notified of the suit and asks the court to set aside the judgment. What is the issue in this
set of facts? What rule applies? What should be the result on the application of the rule?
Why?
30) Common law is a term for the laws that are familiar to most of us.
31) The assignment of the same contract right to two different parties automatically
cancels both assignments.
32) Greensward Landscaping Company enters into a contract with Kent to landscape
Hillview Country Club’s golf course, using Intown Nursery to supply trees and
shrubbery. Jonas owns a lot next to Hillview’s 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?
33) Precision Tool Corporation sells a product that is capable of seriously injuring
consumers who misuse it in a foreseeable way, even though the label warns against the
misuse. Does the firm have an ethical duty to take this product off the market? What
conflicts might arise if the firm stops selling this product?
34) To be enforceable, a memorandum evidencing an oral contract that would otherwise
be unenforceable must include all essential and non-essential terms.