Archives: Quiz

A franchise is a form of business organization. For a creditor to have an enforceable security interest, the debtor must have title to the collateral. Answer: F A warranty deed provides the most protection against defects of title. Answer: T […]

Unlike stalking in the “real” world, cyberstalking requires an “incredible threat.” For an effective bailment, the bailor must deliver possession of the bailed property with its title. Answer: F Express powers of a corporation can be found in the corporate […]

A party who unintentionally uses the trademark of another is not liable for trademark infringement. Bubbly Bottling Company is engaged in the soft-drink bottling and distribution industry in the states of New York and New Jersey. The firm currently has […]

The officers and other employees of each corporation involved must approve a merger. A contract of suretyship must be in writing to be enforceable. Answer: F The holder of a life estate has the right to use property for whatever […]

A buyer who obtains substitute goods to replace goods that a seller did not deliver can also recover damages from the seller. An owner’s license of a formula to make a certain product to an outside party is a franchise. […]

A power of attorney is a written document. An unconscionable contract is a contract entered into unconsciously. Answer: F A trustee has the power to set aside a sale of the debtor’s property. Answer: t City, county, and local governments […]

The Magnuson-Moss Warranty Act modifies UCC warranty rules to some extent in consumer transactions. Under the Statute of Frauds, all written contracts are enforceable. Answer: F Whether the federal government preempted a certain area is always clear. Answer: F A […]

Resolving whether a promise should be enforced is the essence of contract law. In a limited liability limited partnership, the liability of a general partner is the same as the liability of a limited partner. Answer: T A customer must […]

A voidable contract is a valid contract that can be avoided at the option of at least one of the parties to it. Colby contracts in writing to sell his 2005 Dodge-brand pick-up truck to Efrem for $10,500. Colby agrees […]

Jen operates Jen’s Fruits & Vegetables, a small market stocked entirely with produce grown on her adjacent farm. Under what clause of the Constitution can the federal government regulate Jen’s activities? What is Jen’s best argument against federal regulation of […]

State law governs the procedures that must be followed to create a mechanic’s lien. A guarantor is primarily liable on an obligation. Answer: F A maker is secondarily liable on an instrument. Answer: F A contract may have to be […]

A small difference in job content can justify higher pay for one gender. The owners of a joint stock company are personally liable for its obligations. Answer: T A person can reproduce copyrighted material for purposes such as teaching, including […]

For most purposes, the law recognizes a partnership as an aggregate of its members. Generally, stock offerings that are made in a limited manner during any twelve-month period are not exempt from the registration requirement. Answer: F Congress determines the […]

Tune Products, Inc., offers to sell to Unlimited Sales Company one hundred MP3 players at $50 a piece, subject to certain specific delivery dates. Unlimited replies with a signed purchase order that reads, “Accept your offer for 100 I-appliances at […]

A remedy is the relief provided to an innocent contracting party when the other party breaches the contract. A bank that fails to detect an alteration to its customer’s check is liable to the customer for the loss. Answer: T […]

Land includes all of the waters on or under its surface. If a contract for a sale of goods does not include a price term, a reasonable price can be determined by looking at the market for the goods. Answer: […]

Under the Americans with Disabilities Act of 1990, a person with a physical impairment that ‘substantially limits” everyday activities is disabled. Bankruptcy law has one goalto encourage the continued use of credit Answer: F A bank has no right to […]

An employer is not liable for the sexual harassment of an employee by a co-worker. A unilateral contract is formed when the one receiving the offer completes the requested act or performance. Answer: T Anticipatory repudiation discharges a contract. Answer: […]

Common law is a term for the law that is known to most of us. Express warranties displace all inconsistent implied warranties. Answer: F Employers can agree with unions not to handle, use, or deal in non-union-produced goods. Answer: F […]

A treaty is a contract or other agreement between two or more nations that must be ratified by the United Nations to take effect. Whether a contract’s limitation-of-liability clause will be enforced depends on the type of breach that the […]

A misdemeanor is a crime punishable only by a fine. A person who holds all rights in property owns the property in fee simple. Answer: T Creditors are required to provide consumers with copies of records that can help the […]

Insurance coverage is never effective until a formal written policy is issued. Andy leases to Burgertown Franchise Corporation a 10,000 square-foot building under a written lease with a twenty-year term, rent payable annually. The lease includes a clause stating that […]

Normally, corporate shareholders are personally liable for the obligations of the corporation. No special form is required to create a delegation of duties. Answer: T Under a shipment contract, the risk of loss passes to the buyer when the seller […]

All bailments include a bailee’s right to use the bailed property. A condition precedent must be met before a party’s performance can be required. Answer: T Despite deviations from the specifications in a construction contract, a builder can be considered […]

Under certain conditions, a purchase-money security interest will take priority over a previous creditor’s interest in after-acquired property. In mediation, the mediator proposes a solution that includes what compromises are necessary to reach an agreement. Answer: T Guy is Hot […]

Most franchise agreements provide that termination must be “for cause.” To vote their shares, shareholders must attend a meeting and vote in person. Answer: F States’ authority to regulate Internet gambling is limited to their physical boundaries. Answer: T Quotas […]

Any person who buys common stock acquires voting rights in a corporation. After a contract is made, a supervening event may make performance impossible and discharge the contract. Answer: T A unilateral mistake of fact will usually enable a party […]

Dumping is the sale of imported goods at “greater than fair value.” Lack of discriminatory intent is a complete defense to a charge of unlawful employment discrimination. Answer: F The crime of theft requires the taking of property, without regard […]

The Federal Reserve System acts as a clearinghouse where banks exchange checks. If a sale involves crops that are to be harvested within twelve months, identification takes place when the crops are planted. Answer: T Counteradvertising requires a company to […]

To be enforceable, a writing evidencing an oral contract that would otherwise be unenforceable must include every term. Constitutional law includes only the U.S. Constitution. Answer: F Evergreen Landscapers, Inc., owes Friendly Finance Company $5,000. Evergreen enters into a contract […]

National Drilling Company ships its only pump to American Hydraulics Corporation, the manufacturer, for repair. National hires Overland Transport, Inc., to take the pump to American Hydraulics and to return it to National as soon as the repair is complete. […]

An involuntary bankruptcy occurs when a debtor’s creditors are forced to accept a discharge of the debtor’s debts. Cooperative research by small-business firms is exempt from antitrust law. Answer: T Pricing information cannot be a trade secret. Answer: F Shareholder […]

A limited liability partnership can be formed in virtually any state. A bank cannot recover from a holder who cashes a check bearing a forged indorsement once the bank has accepted and paid the item. Answer: F To establish a […]

Generally, a corporation that purchases the assets of another corporation is automatically responsible for the liabilities of the selling corporation. A price-fixing agreement has the potential to lessen competition. Answer: T The Bill of Rights confers absolute rights, not subject […]

Firms overseas have almost total legal protection against government acts in the countries in which they operate, under the act of state doctrine. The state can bring an action to dissolve a corporation that has failed to pay its annual […]

Administrative agencies generally exercise substantial discretion over the type of hearing procedures that they use. A principal is responsible for all intentional torts committed by an agent. Answer: F Filing a financing statement with the appropriate public office is the […]

Courts have no difficulty applying traditional laws to crimes committed in cyberspace. A buyer in the ordinary course of business has priority over any security interest created by the seller. Answer: T A power of attorney can be given only […]

A right to receive damages on a breach of a contract for a sale of goods may be assigned. Courts do not apply the business judgment rule to analyze whether the directors acted reasonably in resisting a takeover attempt. Answer: […]

An auction”we ask you to bid on this item”is an offer. A personal name is not protected under trademark law unless it acquires a secondary meaning. Answer: T Shareholders have no responsibility for the day-to-day management of a corporation. Answer: […]

To recruit employees from other countries, an employer must first complete a verification process. An independent contractor’s physical conduct is controlled, or subject to control, by his or her employer. Answer: F A short-form merger is the legal combination of […]

The concept of a floating lien does not apply to a shifting stock of goods. If the subject matter of a contract turns out to be more valuable than one of the parties believed it would be, that party can […]

Once certified, a pesticide may be used in unlimited quantities on food crops. The members, managers, and agents of a limited liability company are liable for its obligations by virtue of their status. Answer: F A joint venture is taxed […]

Premier Clothing, Inc., a U.S. firm, obtains a judgment in a U.S. court against Quang Tri, Ltd., a Vietnamese business. Whether the court’s judgment will be enforced by a court in Vietnam depends on the Vietnamese court’s application of a. […]

Dwayne and Ewell enter into a contract for the design of an addition to Dwayne’s house for which he agrees to pay Ewell. Ewell transfers his right to payment under the contract to Flex Construction Company. Flex is a. a […]

Pat enters into an agreement with Ole! Food, Inc., to operate a franchise in Region City. Later, Ole! grants franchises to others within the city, Pat files a suit to close them. This suit will likely a. fail because excluding […]

Benny dies without a will, with no surviving spouse or child. Benny’s survivors include his granddaughter Callie, his nephew Doug, and his cousin Earl. In most states, his estate would pass to a. Callie. b. Doug. c. Earl. d. the […]

Khali’s debt to Lew is past due. Lew obtains a judgment against Khali to collect the debt, but Khali refuses to pay. Lew asks the court to order Khali’s employer to pay a portion of Khali’s paycheck to Lew. This […]

Fact Pattern 25-3 Chocolate! Chocolate! Corporation is a new company that needs to borrow money to meet its payroll. Dayna, president and owner of Chocolate! Chocolate!, asks Evermore Credit Union to loan the funds to Chocolate! Chocolate! Refer to Fact […]

Dunn and Etta are limited partners in Fancee Fashion Stores, a limited partnership. In terms of the firm’s books, Dunn and Etta are entitled to a. access in proportion to their participation in management of the firm. b. access to […]

Jo files a suit against Lara in a Missouri state court. Lara’s only connection to Missouri is an ad on the Web originating in Nebraska. For Missouri to exercise jurisdiction, the issue is whether Lara, through her ad, has a. […]