1) The minimum-contacts requirement is usually met if a corporation advertises or sells
its products within a state.
2) A public authority, such as a state€s attorney general, can sue to stop a ‘public′
nuisance.
3) A business organization cannot obtain insurance on the life of a person, even on the
life of an individual who is important to that organization.
4) The testator’s signature must appear on the will.
5) U.S. antitrust laws may be applied to protect foreign consumers and competitors
from violations committed by U.S. business firms.
6) A check is a special type of draft that is drawn on a bank, ordering the bank to pay a
fixed amount of money on demand.
7) Trade fixtures belong to the owner of the property on which they are installed
regardless of the purpose of their installation or who installed them.
8) Corporate ″outsiders″ may not be held liable for insider trading under Section 10(b)
of the Securities Exchange Act of 1934 and SEC Rule 10b-5.
9) In choosing a form of business organization for a new enterprise, important factors
include the ability to raise capital.
10) If a person in custody is to be subjected to interrogation, he or she must first be
informed in clear and unequivocal terms that he or she has the right to remain silent.
11) If an employee presents false documentation of eligibility to work in the United
States, his or her employer is subject to deportation.
12) A joint tenant cannot transfer his or her rights by sale or gift without the consent of
the other joint tenants.
13) Bobbie enters into a contract with Claire, who agrees to paint Bobbie’s studio
apartment for $500. Claire is the
a.obligor.
b.obligee.
c.assignee.
d.assignor.
14) In a bike shop, Barrie, who is not knowledgeable about bikes, overhears Cullen say,
“This bike could win any race!” Barrie buys the bike, but does not win any races with it.
Cullen’s statement is
a.a mistake.
b.fraudulent.
c.an opinion.
d.an attempt at undue influence.
15) Ed’s Electric substantially performs its contract with Forest Hills Apartments, Inc.,
to deliver and install an alarm system and parking lot lighting. Forest Hills is entitled to
a.damages.
b.nothing more.
c.to be excused from performance.
d.suspend performance.
16) Instead of setting up a business to market her own products, Rita considers entering
into a distributorship franchise with Sports Equipment Corporation. This involves the
transfer of
a.a license.
b.a trade name.
c.the formula to make a certain product.
d.the ownership of the business.
17) Raven, the owner of Strawberry Fields, contracts to sell its harvest to Tender Fruits,
Inc. When Raven refuses to perform, Tender Fruits files a suit to enforce the contract.
Raven and Tender Fruits are in a state that does not recognize the doctrine of
unconscionability. To defend successfully against enforcement of the contract on similar
grounds, Raven might rely on traditional notions of
a.fraud.
b.materiality.
c.mistake.
d.value.
18) Beginners Run Ski Shop sells a pair of skis to Crystal. When Crystal first uses the
skis, they snap in two. The cause is something that Beginners Run did not know about
and could not have discovered. Beginners Run breached
a.the merchant’s implied duty of inspection.
b.the implied warranty of merchantability.
c.no duty or warranty because Beginners Run knew nothing about the defect that made
the goods unsafe.
d.no duty or warranty because consumers should reasonably expect to occasionally find
a product that does not work as warranted.
19) Lucy takes out a student loan from Midtown Bank. When she fails to make the
scheduled payments for six months, Midtown advises her of further action that it will
take. This violates
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.
20) Edgar possesses a check that is “payable to cash.” Fawn steals the check and
delivers it to Godfrey, an innocent third person. All rights to the check are
a.Edgar’s.
b.Fawn’s.
c.Godfrey’s.
d.lost.
21) Brie wants one of Cari’s purebred Dalmations. Brie signs an instrument in which
she promises to pay Jasmine for a puppy. The instrument will be negotiable if it is
payable in
a.goods of equal market value.
b.money.
c.any of the choices.
d.shares of stock.
22) 4.Great Gear, Inc., enters into a contract to sell sports clothing and equipment to
Healthways Workout store, which in turn sells a pair of bike shorts to Ilene, a consumer.
In comparison to standards that apply to consumers, the UCC imposes on merchants
a.less strict legal standards.
b.special business standards.
c.stricter ethical standards.
d.the same overall standards.
23) Brasilia, a real estate broker licensed only in Connecticut, concludes a land sale in
Delaware. She can
a.collect the commission if it has not been paid.
b.keep the commission if it has already been paid.
c.foreclose on the property to obtain any unpaid amount.
d.not collect the commission, keep it, or foreclose on the property.
24) HVAC Heating & Air Conditioning, Inc., is a public company whose shares are
traded in the public securities markets. Under the Sarbanes-Oxley Act of 2002, to
ensure that HVAC′s financial results are accurate and timely, the firm′s senior officers
must set up and maintain€
a.internal ″disclosure controls and procedures.″
b.external ″release and reveal timetables.″
c.personal ″peruse and review liability policies.″
d.public″information and discussion forums.″
25) Fact Pattern 26-1B
Destiny obtains a check payable to her order from Eugenia. Destiny signs the back and
adds the notation “without recourse.”
Refer to Fact Pattern 26-1B. After Destiny signs the back and adds the notation
“without recourse,” she adds, “Pay to Florence.” This constitutes
a.a blank qualified indorsement.
b.a special qualified indorsement.
c.a restrictive indorsement.
d.none of the choices.
26) Landon is arrested at a warehouse in Metro Corporate Park. A government
prosecutor issues a formal charge against Landon for receiving stolen property. This
charge is an
a.arraignment.
b.indictment.
c.information.
d.interrogation.
27) Courts of appeals conduct new trials in which evidence is submitted to the court and
witnesses are examined.
28) The shelter principle extends the benefits of HDC status and is designed to aid the
HDC in readily disposing of the instrument.
29) Equity Credit Company has in its possession an instrument dated May 1, 2014. The
instrument is payable to the order of First Choice Moving & Storage Company “on June
1, 2015,” for $5,000. In the upper left corner is an address for Greater Metro
Development Corporation – 10 Corporate Park Avenue, Chicago, Illinois – and in the
lower right corner is the signature of “Hilltop Investments, Inc., By Ida, President.” In
the lower left corner is stamped “ACCEPTED: Greater Metro Development
Corporation by John, President, May 5, 2014.” On the back is the signature of “First
Choice Moving & Storage Company by Kathleen, President.” Who, if anyone, is
primarily liable on this instrument on May 1? On May 5? Who, if anyone, is
secondarily liable on this instrument?
30) Unless a party against whom enforcement of an oral contract is sought admits under
oath that a contract for sale was made, the contract will not be enforceable.
31) The articles of incorporation serve as a primary source of authority for the
corporation’s future organization and business functions.
32) For business purposes, an adult may petition a court to treat minors as adults.
33) Goods must be of the highest quality possible to be merchantable.
34) Trademarks may be registered only with the federal government.
35) A delay in payment or a refusal to pay an instrument will dishonor the instrument in
all circumstances.