Archives: Quiz

Elegant Carpets, Inc., and Fantastic Floors Stores enter into a contract for a sale of carpeting. Under a shipment contract, the seller must a. allow the buyer to reject the goods for any reason. b. deliver the goods to a […]

Lather Up Soap Products Company grants its agent Kathy an exclusive territory in which to sell Lather Up products. The firm cannot compete with Kathy in that territory under the principal’s duty of a. avoidance. b. cooperation. c. indemnification. d. […]

Milo files a suit against Neighbors Insurance Corporation under the doctrine of prom- issory estoppel. Milo must show that a. Milo justifiably refused to fulfill a promise to Neighbors. b. Milo justifiably relied on Neighbors’s promise to his detriment. c. […]

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. John writes a check to […]

Rita believes that Shady Grove Apartments, Inc., her landlord, has violated the law in a way that entitles her to withhold the rent. This remedy is generally associated with a. breach of the covenant of quiet enjoyment. b. breach of […]

Salt Corporation wants to acquire or merge with Pepper Corporation. The board and the shareholders of Pepper are resisting. Salt should a. file a plan of merger with the secretary of state. b. file an article of merger with Pepper. […]

Beyond-the-Sea Corporation and Homeport Company make a deal for Homeport’s products, via e-records. Under the UETA, an e-record is considered sent when it a. is signed and encrypted, and will be sent without changes. b. is stored in the sender’s […]

Fernando, a seventeen-year-old, signs a contract to sell his car to Gusto Used Autos. Fernando receives a better offer the next day from Hi-Valu Cars & Trucks, Inc., and accepts the new offer. Fernando is a. liable to Gusto and […]

Finn and Glenda want to form and do business as Hobby Crafts Corporation. A corporation is a legal entity created and recognized by a. a central federal administrative agency. b. a city or county clerk’s office. c. an artificial legal […]

Clifton is a director of Dri-Cleaning Corporation. In this capacity, Clifton has a right of a. accounting. b. loyalty. c. participation. d. service. Rig Heli-Pads, Inc., enters into a contract to employ Scott as an on-site project manager for two […]

Faye owns the land on which Golden Spurs Ranch is situated, plus the ranch house, barn, and other structures permanently attached to the land. Faye’s brother Huey owns everything else in the ranch’s operationlivestock, feed, and so on. The personal […]

Mello Coffee Shops, Inc., sells a franchise to Noah’s Arch, a café. Mello is a. a franchisee. b. a franchisor. c. an agent. d. a principal. Vieux Carré S.A., a French firm, imports its goods into the United States and […]

Ski Resorts, Inc., wants to add a new run to its facility in a national park on federal land. For this action, an environmental impact statement is a. prohibited. b. required. c. unnecessary. d. voluntary. Kipper files a petition in […]

Skyla and Terry want to form and do business as Unique Boutique Corporation. The state statute governing the formation and operation of their corporation is most likely guided by a. city or county corporate codes. b. the Entrepreneur’s Corporate Handbook. […]

Sharon, the human resources director for Tempo Corporation, attempts to comply with the law in dealing with applicants and employees. One of the challenges Sharon faces is that the legality of an action is a. always clear. b. never clear. […]

Paychex Loan Company extends credit in the ordinary course of its business. Under the Truth-in-Lending Act, Paychex must inform potential borrowers of a. credit terms offered by other lenders and its own credit terms. b. no credit terms. c. only […]

Holly obtains an insurance policy from Inviolable Insurance Corporation (IIC). IIC may cancel, or refuse to renew, the policy because of a. Holly’s appearance as a witness against IIC. b. Holly’s national origin. c. Holly’s race. d. none of the […]

Beans Coffee & Cocoa Company makes and sells a chocolate-flavored coffee drink under the name “CoCoCafe.” Darkroast Java, Inc., later markets a similar tasting drink under the name “KoKoKafe.” This is most likely a. copyright infringement. b. patent infringement. c. […]

Yvon is charged with the crime of theft for taking Zach’s briefcase, which Yvon mistakenly thought was hers. A mistake of fact is a defense a. if the fact was not reasonably made known to the public. b. if the […]

Edgy Engine Components, Inc., a maker of vehicle parts, refuses to sell to Fidgety Fix-It, Inc., a national vehicle service firm. Edgy Engine convinces Greasy Motor Parts Company, a competitor, to do the same. This is a. a group boycott. […]

Detailed Designs Company, an architectural firm, wants to hire Eduardo, a noncitizen. A temporary work visa is most likely to be set aside for a noncitizen who is a. a “person of ethnic similarity to the employer’s workforce.” b. a […]

Suki files a reorganization plan as part of a bankruptcy proceeding under Chapter 13. The court can approve the plan by applying specific rules to the value of the property to be distributed if there is an objection to the […]

Cotton Products Corporation is a public company whose shares are traded in the public securities markets. The Securities Act of 1933 requires Cotton to disclose financial and other significant information concerning its securities in order to a. increase corporate accountability […]

Rely Credit Company loans Standard Manufacturing Company $50,000 and takes a se- curity interest in the equipment that Standard buys with the funds and receives on July 1. Standard files for bankruptcy on July 12.Rely does not perfect its security […]

In relation to Edie’s solicitation of investors in a nonexistent business, she is charged with “mail fraud.” This requires, among other things, a. claiming that an item is “in the mail” when it is not. b. deceiving postal authorities as […]

The Idaho Supreme Court rules against Jiffy Mart in a case against Kwik Stop Stores, Inc. Jiffy Mart files an appeal with the United States Supreme Court. The Court does not hear the case. This a. is a decision on […]

Ewald and First Star Company enter into an oral contract under which Ewald agrees to provide delivery service for First Star for nine months. This contract is enforceable by a. Ewald only. b. either party. c. First Star only. d. […]

Star Resorts Corporation wants to terminate its franchise arrangement with Tony. Their contract does not provide for notice of termination or set a time for winding up the business. This means that to wind up, Tony a. has a reasonable […]

It is possible to copyright an idea. UniOil, a U.S. firm, owns property in Venezuela. When the government of Venezuela seizes the property, UniOil asks a U.S. court to order the property’s return. The court rules that Venezuela is exempt […]

Energy Resources, LLC, is a limited liability company. Rather than distribute its profits to its members, Energy wants to reinvest the profits in its business. For this reason, Energy may prefer to be taxed as a. a corporation. b. a […]

Fact Pattern 44-1 Nika owns land in Ohio. Her ownership rights include the right to sell or give away the property without restriction, and the right to commit waste, if she chooses. Refer to Fact Pattern 44-1. Nika deeds some […]

Orin relinquishes the right to his daughter Neko’s control, care, custody, and earnings. This act is a. disaffirmance. b. emancipation. c. ratification. d. severability. Standard Business Corporation can be compelled to dissolve by a. its creditors only. b. itself, through […]

Carol files a suit against Downwind Boat Corporation. Downwind responds that it appears from the pleadings the parties do not dispute the facts and the only question is how the law applies to those facts. Downwind supports this response with […]

Solid Toolmakers, Inc., contracts to sell its business to Titan Hardware Corporation. Before either party has performed, rescission of this contract requires a. a mutual agreement to rescind. b. consideration. c. performance by all of the parties. d. an accord […]

Elmo is the owner and manager of a business trust. Under the terms of a business trust, Elmo is required to a. distribute the profits and manage the property. b. distribute the profits only. c. manage the property only. d. […]

In a dispute over a sale involving a bicycle, Dain argues that as to this deal Elle’s Hobby Shop, where Dain bought the bike, is a merchant. A court may determine whether Elle’s is a merchant by assessing whether a. […]

Fact Pattern 41-1 Rock Mining Company operates a gravel pit next to Sid’s residence. Sid files a suit against Rock, alleging that the pit is a nuisance and unreasonably interferes with Sid’s enjoyment of his property. Refer to Fact Pattern […]

Motor Parts Corporation offers to buy the stock of NASCAR Products Corporation (NPC). NPC’s directors oppose the offer. Orin and other NPC shareholders file a suit, alleging a breach of the directors’ fiduciary duties. Most likely, the court will a. […]

Denise, Ervin, and Flem occupy the positions of directors on the board of Gallery Corporation. As directors, they may not a. authorize major corporate policy decisions. b. decide to issue stock and bonds, and declare dividends. c. select and remove […]

Nick represents himself as a contractor in Ohio, but he is not licensed in that state. A contract between Pat and Nick by which Nick agrees to build a warehouse for Pat in Ohio is a. enforceable only if Pat […]

Gulf Air, Inc., is the major wholesale distributor of software in the state of Florida. Its closest competitor is Fluid Systems Company, another Florida firm. The two firms agree that Gulf Air will operate in south Florida and Fluid Systems […]

Limited partnerships are created under, and governed by, state statutes. The corporate existence typically begins when the articles of incorporation are signed. Answer: F Some states require limited liability partner- ships to carry liability insurance to protect the partners from […]

The board of directors may notappoint a com- mittee to A. Over see the compensation of the corpora-tion’s officer sand directors B. supervise the audit of the corporation’s financial statements. C. oversee any litigation the business may be involved in. […]

Upon incorporation, the corporation becomes liable for any preincorporation agreements en- tered into by its promoters. The limited partnership is generally taxed as a separate entity. Answer: F In recent years, the number of shares traded via NASDAQ has surpassed […]

All corporations must have their tax year end on December The terms merger and consolidation are interchangeable. Answer: F A stock subscription agreement does not usu- ally include the A. Subscriber’s name and address B. name of the corporation. C. […]

Most limited liability companies are not subject to federal securities regulation. Much of modern corporate law has been derived from the decisions of the courts of Delaware. Answer: T All corporations contemplating a merger must file notice with the Federal […]

Under the Revised Uniform Limited Partnership Act, the—- does not necessarily cause the dissolution of the limited partnership. A. withdrawal of a limited partner B. expiration of the time period specified in the limited partnership certificate C. withdrawal of the […]

In states that follow the Revised Uniform limited partnersship Act, the —neednot be included in the certificate of limitedpartnership. A. names and addresses of all limited partners B.namesandaddress esofallgeneralpartners C.nameandaddressoftheagentforserviceof D. name of the limited partnership In several states, a(n) […]

In states that follow the Model Business Corporation Act, the foreign corporation is notrequired to when applying for authority to transact business in that state. A. file an application for a certificate of au- thority with the secretary of state […]

The Sarbanes-Oxley Act of 2002 does not pro- vide for A. creation of the Public Company Account- ing Oversight Board. B. limited liability for the board of directors. C. certification of the corporation’s 10-K and10-Q by the chief executive officer […]