Archives: Quiz

A party’s oral agreement to pay another’s debt is NOT enforceable if the party’s main purpose is to derive a benefit for himself or herself. In a general partnership, the acts of one partner in the ordinary course of business […]

Under the doctrine of promissory estoppel, a promise will not be enforced unless it is supported by consideration. Once the time for performance under the contract has expired, the seller or lessor can never exercise the right to cure. Answer: […]

An accountant can avoid liability by proving that his or her negligence was only the proximate cause of the client’s loss. There are no exceptions to the rule that any duty can be delegated. Answer: F The means test forces […]

Corporate governance can be defined as the relationship between a corporation and its directors. A customer who writes a bad check may be subject to criminal prosecution. Answer: T Under Title VII of the Civil Rights Act of 1964, most […]

Under the Constitution, the judicial branch is responsible for foreign affairs. An accountant’s liability under the Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 requires privity of contract. Answer: F A seller does not have to […]

Prenuptial agreements are agreements made during a wedding ceremony that define each partner’s duties to one another during the marriage. A contract can include a provision stating that no damages can be recovered for certain types of breaches. Answer: T […]

On a motion for judgment on the pleadings, a court may consider evidence outside the pleadings. If a contractual promise is not fulfilled, the person who made it may be required to perform the promised act. Answer: T Sierra borrows […]

A third party cannot sue one of the partners of a partnership without suing all of the partners of the partnership. Any breach allows the nonbreaching party to sue for damages. Answer: T The alter-ego doctrine can be applied to […]

Ruff Games, Inc., wishes to acquire a controlling interest in Smart Toy Company by buying its stock. Smart Toy is a. an alien corporation. b. an acquiring corporation. c. a receiver. d. a target corporation. Valley Bank retains the cancelled […]

Bread & Bagels Corporation wants to purchase all of the assets of Coffee & Tea Inc. Dolly is a Coffee & Tea shareholder. The approval of Dolly and other Coffee & Tea shareholders is necessary a. in all circumstances. b. […]

Geoff serves in a representative capacity for Huck. To accomplish the objectives of this relationship, Geoff’s authority can be implied a. by contradiction. b. by custom. c. by lack of reason. d. under no circumstances. Milo files a suit against […]

CheezBurger Heaven, Inc., conducts a chain-style franchise. This involves the transfer to Clive, one of its franchisees, of a. a license. b. a trade name. c. the formula to make a product. d. the ownership of the business. With respect […]

The payment of Waldo’s debt to Main Street Bank is guaranteed by Waldo’s personal property. This is governed by a. the Uniform Commercial Code. b. the Federal Trade Commission. c. the U.S. Constitution’s commerce clause. d. the Bankruptcy Reform Act […]

Labor Recruiters, Inc., has been ordered to appear at a hearing before an administrative law judge of the National Labor Relations Board. A significant difference between a trial and an administrative hearing is that a. attorneys are not allowed to […]

In reviewing the actions of the U.S. Office of Nuclear Energy and other agencies, the courts a. are usually reluctant to review questions of fact. b. rarely defer to the technical expertise of administrative agencies. c. often rule on the […]

Ira is declared mentally incompetent. Jay, Ira’s son, is named his guardian. At Jay’s insistence, Ira transfers his assets to Jay “for safekeeping.” A court might conclude that this gift is not effective on the ground that there was no […]

Roslyn is an inventor. She has many tools, including a hammer, a handsaw and a drill. Roslyn has a patent on her most recent invention and she owns stock in Handy Appliances, Inc., which is a company that often uses […]

George burns an American flag in his backyard. He films his actions and posts the video on YouTube.com. George’s actions are a. expressly prohibited by the U.S. Constitution. b. protected by the First Amendment of the U.S. Constitution. c. considered […]

Metallic Metals, Inc., a U.S. firm, files a suit against a Venezuela government agency. The agency has committed a tort in the United States. Under the Foreign Sovereign Immunities Act a. the Venezuelan government agency is not immune from the […]

To resolve a dispute, Amy in Boston and Chris in Denver utilize E-Solution, an online dispute resolution (ODR) service. This limits these parties’ recourse to the courts a. not at all. b. until the ODR service has issued a decision. […]

Sonia manages a Tasty Pastry store for United Food Company. To manage the business, Sonia’s authority can be implied by a. an inference from the position Sonia occupies. b. any inference a reasonable customer or supplier would make. c. any […]

Solar Power, Inc., files a suit against Thunder Bay Utility Company and seeks to examine electronic documents in Thunder’s possession. A legitimate reason for this examination is that the documents contain a. evidence about the case. b. private information about […]

Jackson Lumber hires Owen to purchase wood from various sources on behalf of Jackson Lumber. In this relationship, Jackson Lumber is the a. employee. b. independent contractor. c. principal. d. agent. Doyle and Emily are officers of Fresh Bottled Water […]

Venture Capital, LP, is a limited partnership. Its limited partners include more than 150 sophisticated investors and investment professionals. A Venture limited partner loses his or her limited liability if he or she a. acts as the firm’s manager. b. […]

Cole is a shareholder of Donut Holes, Inc. Cole will be deemed to have a fiduciary duty to Donut Holes and its minority shareholders if he has a. a restriction on the transferability of his shares. b. a right of […]

Serenity City enacts an ordinance that bans the use of “sound amplifying systems” on public streets. Tyler wants to campaign for a seat on the city council by broadcasting his message through speakers mounted on a truck. In Tyler’s suit […]

Hal’s Hardware store defaults on a debt to Intrastate Bank, which takes possession of the collateral securing the debt. Intrastate sells the collateral. The proceeds from the sale are applied first to a. Hal’s debt to Intrastate. b. Hal’s debts […]

Caramello Chip & Cookie Corporation (4C) obtains, and gives its employees, a list of the customers of Sugar & Spice Sales, Inc. (3S). Under the law that applies to trade secrets, 4C’s conduct is actionable provided a. consumers are confused. […]

Bryce’s accountant is Caleb and his attorney is Delilah. All states protect, as privileged information, Bryce’s communications with a. Caleb and Delilah. b. Caleb only. c. Delilah only. d. neither Caleb nor Delilah. Precise Device Corporation and Quality Instruments, Inc., […]

Norma Jean files for Chapter 7 bankruptcy. She turns her assets over to Addie, who sells the assets and then distributes the proceeds to Norma Jean’s creditors. Addie is a a. creditor. b. federal judge. c. bankruptcy trustee. d. debtor. […]

Bret buys a franchise from Comida Mexicano Ltd. If their agreement is like most franchise agreements, it will specify that Comida can terminate the franchise a. at will. b. for any reason. c. for cause only. d. for no reason. […]

Summer Breeze, Inc., contracts for the sale of fifty ceiling fans to Island Dcor store. If Summer Breeze fails to deliver the goods, Island Dcor must commence a suit for breach of contract within a. four years. b. not more […]

Ramblin” Country Stables contracts to buy 1,000 horseshoes from Blacksmith, Inc., for $1 per shoe. When the market price decreases to 50 cents per shoe, Ramblin” refuses to go through with the deal. Blacksmith can recover a. $1,500. b. $1,000. […]

Phil owns a farm in South Dakota. He does not like it when planes from the local airport fly over his property. Phil is unlikely to win a case claiming that airplanes flying over his land violate his property rights […]

Money Mortgage Mart makes a mortgage loan to Natalie to allow her to buy a home and establishes an escrow account. Most likely, this account holds payments for a. homeowners’ insurance and property taxes. b. property repairs and maintenance. c. […]

Housemate, Inc., makes and sells a variety of household products. With a fair amount of certainty, Housemate’s decision makers can predict whether a given business action would be legal in a. all situations. b. many situations. c. no situations. d. […]

Bob operated a pet grooming shop under a franchise agreement with Clean Pets Corp (CPC). The agreement allowed CPC to terminate the franchise if Bob was fined for cruelty to animals. After an investigation initiated by a customer complaint, Bob […]

Donna goes through an involuntary bankruptcy proceeding. An involuntary bankruptcy occurs when a. a debtor files forms designated for the purpose in a bankruptcy court. b. a debtor is unable to pay his or her debts as they come due. […]

Precise GPS Company’s ad states that its product is “the finest that money can buy.” Because of this ad, the Federal Trade Commission is most likely to issue a. a cease-and-desist order. b. a counteradvertising order. c. a multiple product […]

Investors Fund, a large financial institution, announces that it will start monitoring its employees’ electronic communications. If Mary, an Investors Fund employee, resists this policy, her best argument is that the monitoring violates a. employee privacy rights. b. worker health […]

Glen falsely accuses Hu of stealing from Island Tours, Inc., their employer. Glen’s statement is NOT defamatory if a. only Hu hears it. b. a third party hears it. c. the statement is published. d. the statement is a lie. […]

StartUp Investors, LLC, is a limited liability company without a written operating agreement. Among the members, a dispute arises concerning the division of profits. Under most LLC statutes, the profits will be a. distributed according to the members’ proportionate shares […]

Merchant Supply Company and National Discount Stores enter into a contract for a lease of cash registers. Merchant assures National that it has valid title to the goods. Under the UCC, a warranty of title arises a. automatically in most […]

Vieux Carr S.A., a French firm, imports its goods into the United States and offers those goods for sale at “less than fair value.” “Fair value” is the price of a. comparable goods in a select “basket” of other countries. […]

Gigi, a twenty-year-old, wants to execute a will before she undertakes a mountain-climbing trip on a peak in the Himalaya Mountains. In most states, the legal age for executing a will is a. sixteen years of age. b. eighteen years […]

Through a certain transaction, Coffee Bean Cafs, Inc., acquires all of the shares of Deli Dining Corporation for some of Coffee Bean’s shares. Both Coffee Bean and Deli Dining continue to exist. This is a. a consolidation. b. a share […]

Hudson and Ilka want to market a new line of kayaks and related gear under the brand name Journeys as a corporationJourneys Inc. To avoid income taxes at the corporate level, they should form a. a C corporation. b. a […]

Quest Holdings, Inc., orally contracts for a lease of its facilities to Ray to use for his Swamp & Bayou Fishing Camp. Ray pays part of the rent, takes possession, and improves the property for use by his enterprise. The […]

Vivian and Rob enter into a contract under which Vivian will clean Rob’s house every week for a year. Under the E-SIGN Act, in order for e-signatures to be enforceable for this contract a. Vivian and Rob must both agree […]

Flynn, an accountant, helps Grange Supply Company prepare and file a false federal corporate income tax return. Under the Internal Revenue Code, this is a. a felony punishable by a fine and imprisonment. b. a felony punishable only by a […]