1) The rights and remedies of secured parties are not cumulative – if a creditor is
unsuccessful in enforcing rights by one method, he or she cannot pursue another
method.
2) A seller is prohibited from charging different prices to competing buyers for identical
goods or services.
3) A codicil is a will substitute that avoids the cost of probate.
4) Authentication means to sign, execute, or adopt any symbol on an electronic record
that verifies that the person signing has the intent to adopt or accept the record.
5) A member of a limited liability company (LLC) has the power and the right to
dissociate from the LLC at any time.
6) If a franchisor’s decision to terminate a franchise is made in the normal course of
business and reasonable notice is given, it is less likely that the termination will be
considered wrongful.
7) A testator may revoke a will by intentionally tearing it.
8) The Environmental Protection Agency has not concluded that greenhouse gases,
including carbon dioxide emissions, constitute a public danger.
9) Substantive due process limits what the government can do in its legislative and
executive capacities.
10) 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.
11) Labels on fresh meats are not required to indicate where the food originated.
12) A license permits the use of another’s intellectual property for certain purposes.
13) The credit department of Discount Retail Stores Inc. calls Emmett at work about an
overdue bill. Emmett’s employer objects. Discount Retail’s credit department continues
to call Emmett at work. This is a violation of
a.no federal law.
b.the Fair and Accurate Credit Transactions Act.
c.the Fair Debt Collection Practices Act.
d.the Truth-in-Lending Act.
14) Shipping Corporation applies to TransInsurance Company for a fire insurance pol-
icy on Shipping’s warehouse. On the application, Shipping understates the age of the
property to obtain a lower premium. When a fire destroys the warehouse,
TransInsurance can
a.deny payment, because a fire destroyed the warehouse.
b.deny payment, because of fraud in the application.
c.not deny payment, because a fire destroyed the warehouse.
d.not deny payment, because the application is not part of the policy.
15) Standard Purchasing Corporation and Topmost Sales, Inc., enter into a partnering
agreement. Under a partnering agreement, parties agree
a.in advance to terms that apply to their future e-transactions.
b.to become partners.
c.to conduct transactions solely in electronic form.
d.to resolve all disputes without involving a third party.
16) Shane’s Auto Parts orders twenty tires from Tough Tires, Inc. The truck delivering
the tires to Shane’s is in an accident and ten of the tires are damaged. Shane’s Auto Parts
a.cannot reject the entire shipment.
b.must still pay for all twenty tires at the original contract price.
c.may inspect the tires and accept the shipment with a reduction in price.
d.must reject the entire shipment.
17) 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.
18) Otto mistakenly pays property taxes that should have been assessed against Pip.
Otto can recover the amount from Pip in quantum meruit
a.even if Pip was not aware of the error.
b.only if Pip tried to conceal the error.
c.only if Pip was aware of the error.
d.only if Pip consents.
19) Brewster, the chief executive officer of Cog & Gear Lubricants Corporation, wants
to ensure that Cog & Gear’s activities are legal and ethical. The best course for Brewster
and Cog & Gear is to act
a.in good faith.
b.out of ignorance of the law.
c.with regard for the firm’s shareholders only.
d.in their own self-interest.
20) Leon contracts to install automatic watering troughs in Kendall’s dairy barn. Leon
then becomes seriously ill and contracts with Jake to install the troughs. Jake is
unreliable and never shows up to install the troughs. Kendall can sue
a.no one.
b.Jake only.
c.Leon only.
d.Jake or Leon.
21) Kamal reproduces Lorena’s copyrighted work “Musica” without paying royalties.
Kamal is most likely excepted from liability for copyright infringement under the “fair
use” doctrine if
a.Kamal copies the entire work.
b.Kamal distributes the copies without charge to the public.
c.Kamal’s use has no effect on the market for Lorena’s work.
d.Kamal’s use is for a commercial purpose.
22) Durant obtains a life insurance policy with no cash surrender value or cash value,
and names his daughter Elise as the beneficiary. This is
a.limited-payment life insurance.
b.term insurance.
c.universal insurance.
d.whole life insurance.
23) Trucks & Trailers, Inc. (T&T), and United Delivery Service enter into a contract for
a lease of trucks. T&T is a merchant who deals in goods of the kind leased. Under the
UCC, an implied warranty of merchantability arises
a.automatically.
b.only if the lessee asks for such a warranty.
c.only if the lessor expresses such a warranty.
d.only in conjunction with sales contracts, not lease contracts.
24) Dyan, the owner of Expert Restoration Services, Inc., adheres to the “principle of
rights” theory. Under this theory, a key factor in determining whether a business
decision is ethical is how that decision
a.compares to religious principles.
b.affects the rights of others.
c.effects consequences that would follow if everyone in society acted the same way.
d.supports the right to make a profit.
25) Kay and Leo enter into a contract that falls within the provisions of the UETA.
Under the UETA, “an electronic sound, symbol, or process attached to or logically
associated with a record and executed or adopted by a person with the intent to sign the
record” is
a.an e-document.
b.an e-signature.
c.an e-transaction.
d.a record.
26) Flannery is seventeen years old. Under the Fair Labor Standards Act, she cannot
work
a.during school hours.
b.in a hazardous job.
c.more than eighteen hours per week.
d.without a special permit.
27) Fact Pattern 35-1B
Kyla replaces Lomax in his job at Motor Vehicle Manufacturing Corporation (MVMC).
Refer to Fact Pattern 35-1B. To succeed with an age-discrimination claim against
MVMC, Lomax will have to show that
a.Kyla is not qualified for Lomax’s job.
b.Lomax is qualified for his job.
c.MVMC’s qualifications for Lomax’s job are too high.
d.no one could do Lomax’s job as well as he could.
28) Lost in a canyon near Death Valley, California, Edina writes her will in crayon, on a
paper bag, while Farrow states orally how he wants his estate distributed. Most states
do not permit
a.a holographic will.
b.a nuncupative will.
c.a will written on a paper bag.
d.a will written in crayon.
29) To identify Omar and verify his eligibility to work in the United States, Poultry
Processing Corporation relies on a school identification card. The card later proves to
be invalid. Poultry Processing may
a. be sanctioned for violating antidiscrimination law.
b.be sanctioned for violating immigration law.
c.not be sanctioned for violating any law.
d.be sanctioned for violating principal-agent law.
30) Motor Vehicles Service Company orders NoBounce-brand shock absorbers from
Parts & Tools, Inc., to be delivered by the seller. Before Parts & Tools’ truck arrives
with the goods, Motor Vehicles tells Parts & Tools it will not pay. The shock absorbers
are destroyed in transit. The loss is suffered by
a.all of the parties’ insurance companies pro rata.
b.NoBounce’s insurance company.
c.Motor Vehicles to the extent of a deficiency in Parts & Tools’ insurance coverage.
d.Parts & Tools to the extent of a deficiency in Motor Vehicles’ insurance coverage.
31) Data Analytics, Inc., is a corporation engaged in the business of compiling,
analyzing, and marketing data. To accomplish its purposes, Data Analytics obtains
financing, and hires and fires employees. Laws and government regulations affect such
business activities as
a.hiring and firing decisions.
b.the manufacturing and marketing of products.
c.business financing.
d.all of the choices.
32) A unilateral contract is formed at the moment when the contract is performed.
33) To be negotiable, an instrument must be in writing.
34) Under what circumstances would Quality Market, a small store in Rustic, an
isolated town, be considered a monopoly? If Quality Market is a monopoly, is it in
violation of antitrust law?
35) A contract that can, by its own terms, be performed within one year from the day
after the contract is formed must be in writing to be enforceable under the Statute of
Frauds.
36) Games Galore Corporation hires Haley, a minor, to create new customized game
software for certain clients. Haley signs a contract that requires her to work for Games
Galore for eighteen months. Before beginning work, however, Haley tells Games
Galore that she will not create new software for Games Galore and that she is going to
work for Ideal Worldcraft, Inc., a Games Galore competitor. Is Games Galore’s contract
with Haley enforceable? Why or why not?
37) The partnership is a pass-through entity and a taxpaying entity.
38) Donatello is a director and officer of Enzio’s Pizza Corporation. Donatello selects
an ad campaign that consumers find offensive-a marketing decision that results in a
dramatic decrease in profits for the firm and its shareholders. The shareholders accuse
Donatello of breaching his fiduciary duty to the corporation. What is Donatello’s best
defense against this accusation? Later, a resolution comes before Enzio’s board to
expand its menu to compete with Fabio’s Pasta Palace RestaurantsInc. Donatello is a
director and shareholder of Fabio’s. What is Donatello’s responsibility in this situation?