1) Gold & Sweet Company bottles and sells maple syrup from its plant in Vermont. On
the labels is a logo that states “100% Genuine New England Maple Syrup Certified by
the Northeast Maple Syrup Harvesters Association.” This logo is
a.a certification mark.
b.none of the choices.
c.a service mark.
d.trade dress.
2) Dredging, Inc., borrows $50,000 from Equity Financing Corporation in a secured
transaction using Dredging’s equipment as collateral. Dredging then borrows $70,000
from First Choice Lenders, Inc., using the same equipment as collateral. Neither Equity
Financing nor First Choice perfects its security interest. Dredging defaults on the loans.
The party with priority is
a.Equity Financing, because its interest was the first to attach.
b.First Choice, because Dredging owes it more money.
c.First Choice, because its interest was the second to attach.
d.Equity Financing, because Dredging owes it less money.
3) 14.Deb buys a song through eSongs, an online music vendor. Before completing the
purchase and downloading the song, Deb must review a provision stating that she will
not make and sell copies of the song and is required to click “I agree.” This provision is
a.a browse-wrap term.
b.a click-on agreement.
c.a shrink-wrap agreement.
d.none of the choices.
4) Maggie and Nate enter into a contract for the sale of a car, but Nate later refuses to
deliver the car. Maggie asks a court to order Nate to perform as promised. Ordering a
party to perform what was promised is
a.specific performance.
b.damages.
c.rescission.
d.beyond the court€s authority.
5) Stores & Shops, Inc., leases space in a certain mall to Trends Clothing Company
and Unique Fashions Store. Later, Unique Fashions begins to sell items that are similar
to Trends Clothing’s goods, and Trends Clothing abandons its space before the end of
the lease term.
Trends Clothing is liable to
a.no one.
b.Stores & Shops and Unique Fashions for disputing Unique Fashions’s business
decision.
c.Stores & Shops for at least some of the unpaid rent.
d.Stores & Shops’s tenants, except Unique Fashions, for abandoning Trends Clothing’s
space.
6) Uri and Victor enter into a contract by which Uri promises to deliver business cards,
advertising banners, and other marketing materials to Victor. Uri later transfers his duty
under the contract to Wren. Uri is
a.a delegator and an obligor.
b.a delegate and an obligee.
c.an assignor and an assignee.
d.none of the choices.
7) Skip is accused of a crime. Skip can refuse to provide information about his
allegedly criminal activities
a.if he suspects the information will be used to prosecute him.
b.if the police do not promise to keep the information confidential.
c.if the information is “fruit of the poisonous tree.”
d.under no circumstances.
8) Ryland, an officer for Sports Park, Inc., attempts to apply a duty-based approach to
ethical reasoning in conflicts that occur on the job. This approach is based on the idea
that a person must
a.achieve the greatest good for the most people.
b.avoid unethical behavior regardless of the consequences.
c.conform to society’s ethical standards.
d.place his or her employer’s interest first.
9) To buy a stuffed cow, Ken executes a check “pay to Laura or bearer” and gives it to
Laura, who does not own a stuffed cow. This check is
a.negotiable.
b.nonnegotiable, because it does not indicate a specific payee.
c.nonnegotiable, because it may be a joke.
d.nonnegotiable, because Laura does not own a stuffed cow.
10) Lorena files a suit against Milton. Before going to trial, the parties, with their
attorneys, meet to try to resolve their dispute. A third party suggests or proposes a
resolution, which the parties may or may not decide to adopt. This is
a.arbitration.
b.mediation.
c.negotiation.
d.not a legitimate form of dispute resolution.
11) Beef Burgers, Inc. contracts to buy five hundred steers from Fattening Feedlots.
Before Fattening Feedlots can deliver the steers, there is an outbreak of disease in the
feedlot, and all the cattle are quarantined. In this case the perfect tender rule
a.applies to both parties.
b.does not apply.
c.applies only to Beef Burgers.
d.applies only to Fattening Feedlots.
12) Grain Mills Corporation is required to register its securities under Section 12 of the
Securities Exchange Act of 1934. Section 14(a) of the act regulates
a.the declaration of dividends by Grain Mills′s board of directors.
b.the later re-registration of Grain Mills′s securities.
c.the short-swing activities of Grain Mills′s insiders.
d.the solicitation of proxies from Grain Mills′s shareholders.
13) Ribeye RestaurantsInc. wants to acquire or merge with SteakHouse Corporation.
Ribeye should
a.file a plan of merger with the secretary of state.
b.file an article of merger with SteakHouse.
c.make a tender offer to the SteakHouse shareholders.
d.make a tender offer to the Ribeye shareholders.
14) Silvano owns Textbooks Plus, a sole proprietorship that sells textbooks and other
school supplies. When Silvano dies, Textbooks Plus will automatically
a.dissolve.
b.pass to Silvano’s heirs.
c.pass to the state.
d.be offered for sale to its creditors and competitors.
15) Precision Crafted Tools, Inc., makes tools for consumers and construction
professionals. While using a Precision Crafted tool to replace an electrical fixture,
Quinn neglects to shut off the power and is electrocuted. Quinn’s heirs file a suit against
Precision Crafted. In a contributory negligence jurisdiction, the plaintiffs could recover
a.only if both parties were equally at fault.
b.only if Quinn was less than 50 percent at fault.
c.only if Precision Crafted was more than 51 percent at fault.
d.nothing.
16) Chaz uses his computer to secretly install software on thousands of personal
computers without their owners’ knowledge. The program can reproduce itself and
spread from one computer to another via any USB port. This program is a
a.hacker.
b.botnet.
c.virus.
d.worm.
17) Cotton Products Corporation is a public company whose shares are traded in the
public securities markets. With respect to financial and other significant information
concerning its securities, the Securities Act of 1933
a.imposes increased responsibility on chief corporate executives.
b.prevents insiders from trading among themselves.
c.requires disclosure.
d.creates a ″safe harbor″ for companies to make forward-looking statements.
18) Pizza Now!, a delivery, dine-in, or takeout restaurant, buys a delivery vehicle on
credit from Quality Auto & Truck Dealers Corporation, but does not make a payment
on the loan for several months. Quality Auto repossesses the vehicle by towing it from a
public street. Pizza Now! sues Quality Auto for breach of the peace. Pizza Now! will
probably
a.not prevail, because Quality Auto did not use judicial process.
b.not prevail, because the repossession was not a breach of the peace.
c.prevail, because Pizza Now! did not default on the loan.
d.prevail, because the repossession was a breach of the peace.
19) Grid Tool Company makes and sells tools. One of the tools is believed to be haz-
ardous. The appropriate government agency may require Grid to
a.export the tool and sell it only abroad.
b.increase the price to cover the cost of any injuries or damage.
c.reduce the price to indicate the hazard to consumers.
d.remove the tool from the market.
20) No partner is deemed to be an agent of the other partners and of the partnership.
21) State laws protect individuals€ privacy rights, often to a significant degree.
22) If a principal ratifies a contract without knowing all of the facts, the principal can
rescind the contract.
23) To successfully assert a design defect, a plaintiff has to show that no reasonable
alternative design was available.
24) Misrepresentation in an ad is enough to show an intent to induce the reliance of
anyone who may use the product.
25) A promise to do what one already has a legal duty to do constitutes legally sufficient
consideration.
26) Stardust Coffee Company a U.S. business firm, makes and sells distinctively
flavored coffee beverages. Although the recipes are secret, the ingredients could be
revealed and the sauces could be reconstructed with diligent efforts. What can Stardust
do to prevent its products from being “decoded” and pirated abroad?
27) Discount Retail Warehouse Corporation pays its employees every two weeks. Ethel,
a Discount Retail employee, receives her paycheck and indorses the back (“Ethel
Smith”), but loses the check before cashing it or depositing it. Garth finds it. Has the
check been negotiated to Garth? If Garth signs the back of the check beneath Ethel’s
signature, can he cash it?If so, what might Ethel have done to avoid the loss?
28) On a cashier’s check, the drawer is also always the payee.
29) If either the principal or the agent petitions for bankruptcy, the agency is not usually
terminated.