Business Law Notes For Test

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An office of international sales corporation makes overtures to a representative of global distribution inc, regarding a business deal. Under the objective theory of contracts, the officers words and conduct are held to mean whatever

a reasonable person in the representatives psoition would think they mean

What contract may be assigned?

an assignment invovling the right to receive payment of money

Acurately describes third party beneficiary rights?

beneficary may enforce a contract if the parties intended to benifit him and if enforcing the promise will satisfy a duty of the promisee to the beneificary

An unenforcebale contract is one that cannot be enforced because of?

certain legal defenses aganist it

Will falsely states a material fact to jack, who relies on it to her detriment, Will's statement

constitues fraud only if both justifiable reliance and the intent to deceive are present

Joe, a minor, is living at home with his parents but signs a lease with a landlord to rent an apartment. Joe can?

disaffirm the contract without further liability

Any promise made by the parties-unless they are close relations

do NOT have to be supported by legally sufficent and bargained for consideration

What is specific performance?

equitable remedy sometimes used when money damages are inadquate

Edwin advertises a reward for the return of his lost cat. Fred, who doesnt no of this reward, find and returns the cat. Fred cannot recover the reward becuase?

fred did not know of the reward when he returned the cat

M&E contracted to sell 500 music stand to coda inc. M&E shipped the stands in accordance with the agreement, Coda paid for the stands as promised. THe contract between ME and coda is discharged by?

full performance

Claude agrees to elase his house to irvin for nine months, the lease to begin 6 months from the signing of the contract. Under the statue of frauds?

the lease is required to be in writting because of the one year rule

Jill offers to pay ken 500 if he jogs across the golden gate bridege. Ken can accept the offer only by jogging across the brudge. If ken jogs across the brudge, he and kill will have formed a?

unilateral contract

Lee, a sales rep, files a suit aganist worldwide corporation asking the court to enfore a contract between the parties under the doctrine of promissory estoppel. According to thid doctrine, the court can enforce the contract if?

worldwide made a promise on which lee justifably relied to his detriment

prima facie case

A case in which the plaintiff has produced sufficient evidence of his or her conclusion that the case can go to a jury; a case in which the evidence compels the plaintiff's conclusion if the defendant produces no evidence to disprove it.

Describe: How Common Law affects Whistle Blowers

Most courts will prohibit the discharge of employees who report illegal activity that relates to their own jobs.

Immigration Reform and Control Act of 1986 ("IRCA")

Makes it illegal to hire, recruit, or refer for a fee someone not authorized to work in the United States

Describe: Replacement Workers

Management has the right to hire replacement workers during a strike

Definiteness of Offer (element of a contract)

The offer must have reasonably definite terms, including the following terms: (1) parties (WHO); (2) object or subject matter of, or work performance for the K (WHAT); (3) consideration (HOW); and (4) time of payment, delivery, or performance (WHEN)

Jay tells Kim that he will buy her textbook from the last semester for $80. Kim agrees. Jay and Kim have

an express contract.

The UETA creates rules for electronic transactions.

false

The terms of a contract must have been read to be enforced.

false

If a court awards nominal damanges, it will?

generally award very little money

partial performance (reliance damages?)

generally recover for work performed, plus expectation damages for the work not yet performed.

For a consideration to have "legally sifficent value" is does not need to consist of?

goods or money

conforming goods

goods that conform to the contract description in every way

administrative agency

make rules for the entire industry (ex. FDA)

Describe: No-Strike Clause

prohibits the union from striking while the CBA is in force.

Equitable remedies?

recission and restutition, specific performance and reformation

For pete to recover the benefit of his abrain from a breach real estate contract with quality inc., the most approrpriate remedy is?

specific performance

Describe: Right to Work Laws

state statutes that restrict or even outlaw union shop and agency shop agreements

Describe: Preemption Policy

state's have no jurisdiction to regulate any labor issue that is governed by federal law

T/F: A company that subcontracts in order to maintain its economic viability is probably not required to bargain first; however, bargaining is mandatory if the subcontracting is designed to replace union workers with cheaper labor.

True

T/F: A union is allowed to discipline a member for certain acts, such as engaging in an illegal strike or working for wages below union scale.

True

T/F: A union's decision not to file a grievance is illegal only if it was arbitrary, discriminatory, or in bad faith.

True

Trade dress can qualify for trademark protection if customers associate it with the product.

True

Under federal law, financial institutions must report transactions in excess of $10,000.

True

When a buyer makes a purchase without relying on the seller's skill and judgment, no warranty of fitness for a particular purpose exists.

True

T/F: No-Strikes & No-Lockout Clauses are generally legal.

True (as part of a CBA that is in effect)

List the Remedies available for an Employment Law suit.

* hiring, * reinstatement, * retroactive seniority, * back pay, * reasonable attorney's fees, * damages up to $300,000

List the three categories of wrongful discharge claims:

* public policy, * contract law, and * tort law

A contract between Kim and Larry to lease real property contains an exculpatory clause. This clause is

***NOT generally enforceable as a matter of public policy.***

A sole proprietorship's income is taxed as the firm's profits, not as the owner's personal income.

False

A void contract is enforceable if it is in writing.

False

An e-record is considered received under the UETA only if a person is aware of its receipt.

False

The addition of any new terms in the acceptance, including terms that relate to mere clerical detail, converts the acceptance into a counteroffer.

False

The prosecution in a criminal case need only establish by a preponderance of the evidence that the defendant committed the crime.

False

The terms of a contract must have been read to be enforced.

False

Under the Electronic Signatures in Global and National Commerce Act, a signature may be denied legal effect solely because it is in electronic form.

False

Farley and Gregor want to market a new line of fishing gear. To avoid income taxes at the corporate level and anticipate having more than 150 shareholders, they should form: a. a C corporation. b. an LLC. c. an S corporation. d. none of the above.

What defenses exist for strict liability?

Few, if any.

a. Sam withdrew or revoked the offer prior to Rhonda accepting Sam's offer

Sam offers to Rhonda Sam's collection of rare books. Before Rhonda even has a chance to accept Sam's offer, Sam says, "Sorry, I changed my mind, no deal." This is an example of: a. a revocation. b. a rejection. c. a counteroffer. d. a restitution.

An acceptance must be absolute and unconditional.

True

A contract clause which specifices the amount of damages to be paid in the event of a breach is called?

a liquidated damages clause

What is not assignable?

a right to receive personal services

Reps of american manufacutirng co and national sales corporation orally agree to several different contracts, THe statue of frauds will not bar enforcement of an oral contract for?

a sale of goods for $300

For Carla's solicitation of investors in a nonexistent business, she is charged with mail fraud. This requires

a scheme to defraud and the use of the mail system.

Sources of Contract Law

-Common Law: Governs all contracts except those that have been modified or replaced by statutory law, such as the Uniform Commercial Code (UCC), or administrative agency regulations -UCC: Governs contracts regarding the sale and lease of goods (to the extent the UCC modified the common law)

Gert contracts to sell two tracks of land to Hank. Both parties

...

Obligations of Buyer

1) Payment 2) Right of inspection 3) Acceptance

An incidental beneficiary?

To create an offer, an offeror must intend, or it must appear that the offeror intends, to be bound to a contractual relationship.

Agency

A "fiduciary" relationship between a principal and agent, which relationship is based on trust and confidence

a. A bilateral contract involves the exchange of promises. If all of the other requirements for a valid contract are met, both parties will be obligated to perform their respective promises

A bilateral contract is one in which: a. two promises are exchanged. b. a promise is given in return for an act. c. a third party guarantees the promise of one of the parties. d. a unilateral contract accomplishes an exchange of promises

Disclosure of Conflicts of Interest

A corporation can enter into a transaction in which a director or officer has a conflict of interest, but the conflicting director or officer must fully disclose the conflict and abstain from voting on the proposed matter

Bilateral Contract

A promise for a promise, K formed when the offeree makes response promise, Most K's are bilateral

tangible employment action

A significant change in employment status, such as firing or failing to promote an employee, reassigning the employee to a position with significantly different responsibilities, or effecting a significant change in employment benefits.

constructive discharge

A termination of employment brought about by making an employee's working conditions so intolerable that the employee reasonably feels compelled to leave.

Constructive Discharge

A termination of employment that occurs by making the EE's working conditions so intolerable that the EE reasonably feels compelled to quit

Intended Beneficiary

A third party for whose benefit a K is formed, who can sue the promisor if such a K is breached (i.e. privity of K exists between the promisor and the intended beneficiary)

Enforceable Contract

A valid K that can be enforced because there are no legal defenses

Prospectus

A written document that describes the (1) security being sold, (2) financial operations of the issuing corporation, and (3) investment risk attaching to the security. It is an abridged version of the Registration Statement. Purposes of Registration Statement and Prospectus: To supply sufficient information to enable unsophisticated investors to evaluate the financial risk involved with the opportunity

First National Bank decides to consolidate its operations with Overseas Bank to create a new firm called International Bank. Overseas Bank had certain rights in assets. After the consolidation, International Bank

Acquired all of the rights automatically.

Franchise

Any arrangement in which the owner of a trademark, trade name, or copyright licenses another to use that trademark, trade name, or copyright, under specified conditions or limitations, in the selling of goods and services

Articles of incorporation contain: a. a set of governing rules adopted by a corporation. b. resolutions of the board of directors. c. information about the corporation, including its purpose, organization, and functions. d. the minutes of meetings of the board of directors

Jay and Kyle are accountants and members of the Jay and Kyle PC, a professional corporation

As a member Jay may be personally liable for the malpractice committed by an employee under his supervision.

Carol pays Dick $10,000 to design an ad campaign for Carol's Coffee Stand chain. The next day, Dick tells Carol that he has accepted a job in New York and cannot design her campaign. Carol files a suit against Dick. As compensatory damages, Carol can recover a. $100,000. b. $10,000. c. $1,000. d. $0.

B. $10,000.

seller

Basic obligation of ____ is to transfer and deliver conforming goods

Brett and Courtney form Delite Day Care, Inc. Ultimate responsibility for policy decisions necessary to the management of corporate affairs rests with: a. its board of directors. b. its incorporators. c. its officers. d. its shareholders

Right of Inspection

Buyer has absolute right to check goods before making payment, verify goods tendered are what was contracted for (opportunity for checking is therefore condition precedent to enforce payment)

Form agency by estoppel (apparent authority)

By the principal's actions or the environment (i.e. inferred by custom), (1) a third party believes that another person is the principal's agent and (2) the third party acts to his detriment in reasonable reliance on that belief

Carol pays Dick $10,000 to design an ad campaign for Carol's Coffee Stand chain. The next day, Dick tells Carol that he has accepted a job in New York and cannot design her campaign. Carol files a suit against Dick. Carol can hire another campaign designer for the same price without incurring any incidental expenses. As compensatory damages, Carol can recover a. $100,000. b. $10,000. c. $1,000. d. $0.

Coast-to-Coast Distribution, Inc. is a direct-mail distribution company. Like most corporations, Coast-to-Coast's employees include its: a. board of directors. b. incorporators. c. officers. d. shareholders.

Adam and Betty are holders of preferred stock in Mega corp. So Adam and Betty have priority over

Common stock holders, Payment of any dividends, and on dissolution of Mega corp.

National distribution Corporation can demonstrate a commitment to ethical behavior by

Complying with the law, establishing ethics codes, and making money

Delta, Inc., agrees to assume a debt of Excel Company to First State Bank. The agreement is not in writing. To be enforceable, the promise must be for the benefit of

Delta

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 bonds and declare dividends. c. select and remove corporate officers. d. support businesses that directly compete with Gallery.

Earl runs a livestock breeding business and owes Cattle Ranch $1000. Earl agrees to pay Cattle Ranch a percentage of his profits each month until the debt is paid. Because of this agreement, the Cattle Ranch is

Earl's creditor only.

Unforeseeable contingencies

Exceptions to perfect tender rule -- commercial impracticability only applies for ________ _____

Equitable Remedies-- Purpose

Exist because damages are an inadequate remedy at law, so to seek justice or prevent unjust enrichment, the nonbreaching party may ask the court for an equitable remedy or seek it through the contract provisions

A bribe must consist of money to be a crime.

False

Parents are liable for contracts signed by their minor children if the terms are reasonable.

False

Resale (Seller's (lessor's) remedies when buyer (lessee) breaches):

Find another buyer, the seller's equivalent of the buyer's cover. Resell the goods. If when the seller resells the goods that is below the value of the original contract, the seller can sue the buyer for the difference lower resell contract price and the original contract price.

Hillside Homes, Inc. and Idyll Builders, Inc. enter into a construction contract that includes six pages of detailed calculations. Later Hillside, whose project manager compiled the figures, discovers that some numbers were multiplied incorrectly—a significant, material mistake. Idyll refuses to make changes. A court would most likely

assurances

If ________ are demanded and not received within 30 days, may treat as repudiation

Describe: Secondary Boycotts

Illegal picketing an innocent company to stop it from doing business with an employer the union was fighting

Bob and Jenny act as the incorporators for the National Sales Limited. After the first board meeting, subsequent directors are selected by a

Majority vote of national shareholders.

Perfect Tender Rule

In a contract for the sale of goods, if the goods fail to conform exactly to the description in the contract (whether as to quality, quantity or manner of delivery) the buyer may reject the goods.

b. The limited partnership must file a certificate of limited partnership with a designated state official

In order for a limited partnership to be legally valid, it must? a. File articles of organization. b. File a certificate of limited partnership. c. File amended articles of partnership. d. File a certificate of incorporation.

seniority system

In regard to employment relationships, a system in which those who have worked longest for the company are first in line for promotions, salary increases, and other benefits; they are also the last to be laid off if the workforce must be reduced.

sexual harassment

In the employment context, the granting of job promotions or other benefits in return for sexual favors or language or conduct that is so sexually offensive that it creates a hostile working environment.

"Equal Dignity Rule"

Indicates that if the law requires a written contract, the Agent's authority from the principal must be in writing to be valid, except for officer acting for corporation or agent acting in the presence of the principal

William is the director of Harrison lumber Inc. Under the standard of due care that is owed by directors of a Corp. William must carry out his responsibility in an

Informed businesslike manner.

Disparate-Treatment Discrimination

Intentional discrimination by an ER of persons in a protected class

American engineering inc, defends aganist a breach of contract suit by beta corporation by claiming that the consideration for their contract was inadequate. A court will not normally evaluate the adequacy of consideration?

Jane promises to pay her secertartygrossly inadquate

Implied Contract

K formed, in whole or in part, by the parties' conduct

Express Contract

K where the terms are stated, whether an oral or written K

At an auction for the first time, Sally raises her hand to bid on an object, believing that the auctioneer requested an amount smaller than the price actually asked. Sally is

Liable on the bid.

Third Party Rights-- Assignments

Meaning of Assignments: A party to the contract assigns his contractual rights to a third party

c. This statement is a statement of future intent and thus not an offer. Because intent has to be current

Nate tells Opal, "I might sell the skis that I bought last fall since I haven't used them and the skiing season is almost over." This is a. an acceptance of an offer. b. an offer. c. not an offer. d. a firm offer

Executory Contract

Neither party has fully performed the contract

Sole Proprietorship (Admission)

No admission options

Void Agreement

No contract exists. Possible reasons: Purpose of "K" is illegal or a party does not have legal contractual capacity (i.e. was not competent)

Agreement

Offer and Acceptance

Third Party Beneficiary

One for whose benefit a promise is made in a K but who is not a party to the K

One of the key advantages of the corporate form of business is: a. the limited liability of shareholders. b. the unlimited liability of shareholders. c. the "double taxation" of the corporate form. d. that no formalities are required to create a corporation

Owen and Colin agree to operate an espresso stand. They purchase their supplies and split the cost equally. They agree to share profits equally. They decide both of them will have an equal say on how to run the stand. Nothing has been put in writing, but

Owen and Colin had formed a partnership.

Describe: Federal Employment Discrimination Laws

Provide minimum level of protection for employees; States may give employees more rights, but not less rights, than they have under federal law

damages

Right to recover _____ for accepted goods -- give notice of defects, measure of ______ = diff between value of goods as accepted and value if they had been delivered as warranted (incidental & consequential when appropriate)

Riley and Shelia enter into a written contract for the sale of Riley's condominium to Sheila. Sheila transfers her right to be recorded as the owner of the property to her daughter Tricia. This transfer is a. a delegation. b. an assignment. c. a rescission. d. a negotiation

Shareholder Derivative Suits

Shareholders' ability to sue a 3rd party on behalf of the corporation if the corporation's directors fail or refuse to correct the wrong or injury after demand from the shareholders, with any damages recovered in the shareholder derivative suit going to the corporation

Defamation consisting of the publication or communication of false, spoken words is termed:

Slander.

The Bayside restaurant is a partnership. For tax purposes, the Bayside Restaurant is required to file an information return, but is not a

Taxpaying entity.

Describe: No-Strikes & No-Lockout Clauses

That the union promises not to strike during the term of the contract. In turn, unions insist on a no-lockout clause, meaning that in the event of a labor dispute, management will not prevent union members from working.

Agent for Agency

The actor (i.e. the person who is acting on behalf of the principal)

The bylaws of Retail Sales, Inc.: a. establish the operating name of the corporation. b. establish the value and classes of the corporation stock. c. are adopted at the first organizational meeting or its equivalent written consent. d. are submitted for approval to the public official in charge.

Commercial Products Company markets its products nationwide. When making a decision CPC must take into account the needs of

The consumers and employees, owners and shareholders, society and the community.

Intent is the first thing you should consider when determining if an offer to contract has been initiated.

True

Retaliatory Discharge

The firing of an employee in response to taking negative action against the Employer

Dissolution

The formal disbanding of an organization.

Contractual Capacity

The legal ability to enter into a contractual relationship Reasons not to enter in CC: minors, intoxication, mental incompetency

d. Once an acceptance is dispatched (sent, communicated) in an authorized way, it is effective

The mailbox rule states that: a. an offer is valid only if mailed. b. an acceptance is valid only if mailed. c. an offer is valid once it is deposited in a mailbox. d. an acceptance is effective upon dispatch by an authorized means of acceptance

Dissociation

The occurrence when an owner ceases to be associated in the continuation of the business.

Limited Liability

The principle that liability is limited to an investor's capital contribution

What is a Gift

This a promise that does not induce the recipient to suffer a detriment or make a promise in bargained-for exchange. ANother type of this: It is conditional.

Compensatory Damages

To cover direct losses and costs to the nonbreaching party, compensating the nonbreaching party for loss of the bargain/agreement. Damages actually occurred and proved to arise directly from the breach of K. REMEMBER Privity of K

Which of the following is a defense to defamation?

Truth

T/F: Courts usually consider these subjects to be non-mandatory: product type and design, advertising, sales, financing, corporate organization, and location of plants.

Ture

Gamma Corporation agrees to buy seven servers from Omega Computer Products, Inc. If the servers have less capacity than Gamma and Omega believe, Gamma may

Void or enforce the contract.

List the Mandatory Subjects of bargaining

Wages, hours, terms/conditions of employment

Hostile-enviornment harrasment

When an employee is subjected to offensive sexual comments.

Can SILENCE count as ACCEPTANCE?

Yes

Describe: Disparate Treatment

treated differently because of her sex, race, color, religion, or national origin.

A contract entered into under undue influence is voidable.

true

Jeff and Kris sign a written contract for the sale of Jeff's Koffee Kiosk to Kris. The parties intend their written contract to be a final statement of the terms of their agreement. The writing that Jeff and Kris signed is

a completely integrated contract

a liquidated damages clause.

Cathy assures Don that she will deliver his products as he directs. An assurance that one will do something in the future is part of the definition of

a promise

Cathy assures Don that she will deliver his products as he directs. An assertion that one will do something in the future is part of the definition of

a promise.

Describe: Hostile work environment in relation to Sexual Harassment.

a valid claim of sexual harassment if sexual talk and innuendo are so pervasive that they interfere with her (or his) ability to work. (This is a more subtle claim and the one that managers worry about most.)

Boyd is a minor. As a minor, Boyd has the capacity to enter into

a valid contract

If an offeree accepts an offer before it is effectively revoked:

a valid contract is formed.

Stu makes an offer to Tina enter into a contract. Tina accepts the offer. A valid contract requires

a valid offer and a valid acceptance

Enabling legislation

administrative agencies are created by congress through passage of enabling legislation, statute that specifies the name, functions and specific powers of the new agency

Comparative negligence:

allows a comparison of negligence between plaintiff and defendant.

Consequential damages

arise when seller can be characterized as "lost-volume" seller (excess capacity to produce a product of stable price and a willing buyer, no lost sale can be adequately made up for, even by another sale (total sales can never be more than n-1 where n = total seller's sales)

because it is a promise of something of value

Fred and Ed sign a contract by which Fred agrees to deliver a washing machine on July 31 in exchange for Ed's promise to pay the $500 purchase price on July 31. The delivery of the washing machine and the payment of $500 are examples of

concurrent conditions.

Defintion of other loss

consequential and incidental damages, if any.

Sam and Tiffany enter into an implied-in-fact contract. This is a contract in which the parties' conduct

defines the contract's terms

Scot and Tiffany enter into an implied-in-fact contract. The parties' conduct

defines the contract's terms.

Pitts, whose family owns and operates a farm, agrees to sell Armstrong ten bushels of strawberries. A fire destroys the strawberries, through no fault of either party, before they are delivered to Armstrong. This

discharges the obligations of both parties under the contract.

Legal detriment is NOT equivelent to?

economic benefit

Jill tells Ken, who has no knowledge of literary comedy, that she will tutor him in the subject for $50. As an offer, this is

effective.

Cary is fifteen. In most states, Cary would be considered a minor because she is under the age of

eighteen

Under UCC, article 2, good faith for merchants means?

honest in fact and the exercise of resonable commerical standards of fair dealing

Duty of cooperation

if one party depends on cooperation of other and cooperation not forthcoming, other party can suspend own performance without liability and hold uncooperative party in breach or proceed to perform contract in reasonable manner

shipment contract

if seller fails to notify buyer that shipment has been made/fails to make contract for transportation, buyer can treat as breach and reject goods but only if material loss of goods or significant delay results

Right to reject the goods

in whole or in part, can reject the goods, obtain cover, can contract or sue for damages for breach of contract as if seller refused to deliver goods

COst to rent a vechicle for a short period of time after an auto dealer fails to deliver a purchased vehicle would be ?

incidental damages

Kit offers to sell her boat to Liu. Liu accepts and, unknown to Kit, builds a dock for the boat. Kit's later attempt to revoke the offer will be

ineffective because Liu justifiably relied on Kit's offer

John owed Barney money. Barney called John's home several times per day for five weeks asking for repayment, with some of the calls coming after midnight. Barney might be liable for:

infliction of emotional distress.

If an offeree dies before the offer has been accepted, the offer:

is automatically revoked by the death of the offeree.

An acceptance made in a telegram that never is delivered to the offeror:

is effective as an acceptance at the time that it is given by the offeree to the telegraph office for sending to the offeror.

Suz goes to bar, has a number of drinks and agrees to purchase aliminum shutters for double their normal price from a salesperson. Suz is?

liable on the contract if she understoof the legal consequences of the contract

Statues of Limitations?

limit the time in which an injured party may sure for the breach of a contract

single delivery

normally all goods must be tendered in ______ _____ unless otherwise specified (installments)

Subscriptions to religous, educational and chartiable organizations are?

not supported by legally sufficent considerations and promises to make gifts

Eagle warehouse offers to sell a forklift to Forest Lumber Company, but it is stolen before Forest accepts. Eagle must obtain

nothing for Forest, because the theft terminated the offer

Dot, a real estate agent, tells Ed, a home seller, that her commission is 12 percent. Ed agrees that Dot can sell his house but refuses to sign a contract unless the amount of the commission is reduced. After the house is sold, Ed refuses to pay 12 percent. Dot is most likely to recover

on a theory of a quasi contract

Eve tells Frank that she will pay Frank $50 if he unloads her truck. Frank's acceptance is complete

only after Frank unloads the truck

Rite agrees to asusme a debt of sam to city credit company. This promise is NOT for the benefit of rita. To be enforceable, the promise must be in writting if the debt is for

over 5,500

Describe: Occupational Safety and Health Act of 1970 (OSHA)

passed to ensure safe working conditions.

The duty to perform is discharged if?

performance is contingent on the occurence of a condition and that condition does not occur

legislative

policy expressions that have the affect of law

A-One Pavers, Inc., contracts with Best Building Corporation to repave Best's parking lot. The elements of a contract do not include

practicality.

Harry, a computer programmer for Inventory Control Corporation, is arrested in his employer's parking lot on suspicion of larceny. Harry must be informed of his right to

remain silent.

Describe: Duty of Fair Representation in relation to NLRA.

requires that a union represent all members fairly, impartially, and in good faith.

government in sunshine act

requires that agency business meetings be open to the public

freedom of information act

requires that federal agencies publish in the general register places where the public can obtain information from them

What contract must be in writting to be enforceable?

sale of a house

Sam offers to sell a high speed modem to randy, but sam receives a letter of acceptance from ford. A valid contract exits between

sam, randy and ford

Interstate Coffee Brokers, Inc., (ICBI), offers to sell Java Roasters, Inc., fifty bags of coffee beans. Java rejects the offer. The offer is

terminated

The degree of care required of a person is:

that which an ordinarily prudent person would exercise under similar circumstances.

the apartment lease and the car purchase only

Retail Outlets, Inc., contracts with Superior Contractors to build a store. Superior assigns the contract to Town Builders, which has a poor record of completing projects. Retail could most successfully argue that the contract cannot be assigned because

the assignment will materially increase the risk of nonperformance.

On July 1, General Contractors (GC) contracts to build a retail store for Sue at a specific location. On August 1, the zoning law are changed to prohibit the construction of commercial buildings at that location. Sue files a suit against GC. In this situation

the contract is discharged.

A contract doesnt need to be in writting to be enforceable IF?

the contract makes performance within one year possible

A fraudulent contract may be enforced by?

the innocent party

Bob claims that Carol breached their contract. Carol responds that she never intended to enter into a contract with Bob. The intent to enter into a contract is determined with reference to

the objective theory of contacts

Cory enters into a contract with Diane to act as her personal sports trainer. If they later dispute the meaning, and the contract contains unclear terms, the rules of the contract interpretation will give effect to

the parties' intent as expressed in their contract

Property Development Company and Quality Land Corporation sign a written contract for a sale of land. In some states, to be enforceable, this contract must include

the parties' names

Open price item?

the price is the "reasonable" price at the time of delivery

Nano Corporation offers to sell a robotic device to Onyx Assembly, Inc., but mistakenly transposes some of the digits in the price so that $15,400 appears in the offer as $14,500. Onyx accepts the written offer. Nano's best defense against enforcement of the contract is that Onyx knew

the price was below the prices of comparable devices.

An intended beneficiary is entilied to sue?

the promisor directly to enforce his/her promise

Ruth, a minor, charges groceries at Sam's Mini-Mart. Two days later, Ruth disaffirms the purchase. Ruth owes Sam's

the resonable value of groceries

Eagle Corporation and Finest Products, Inc., enter into a contract. To be enforceable, the contract must include

the signature of the party against whom enforcement is sought.

Macro Corporation and Micro, Inc., enter into an agreement. To constitute a contract

the terms may be express, implied, or a mix of both

Macro Corporation and Micro, Inc., enter into an agreement. To constitute a contract

the terms may be express, implied, or a mix of both.

Mac enages in fraud to procure tinas assent to an expensive, one-sided contract. In a fraudulet transaction?

the transaction is not voluntary because there is no "mutal assent"

Brad convinced of arson for buring down his warehouse to collect the insurance. On an application for insurance on a new building, in answer to a quetion about prior convictions, bart doesnt disclose his conviction. This makes the contract

voidable at the option of the insurance company because the statement is material to the decision to issue coverage

Fay is mentally incompetent but has not been so adjudged by a court. Any contract Fay enters into is

voidable if the other party does not realize that Fay is incompetent

Employment Sources, Inc., enters into a contract with Fred. If Fred is a minor, this contract is most likely

voidable.

Condition precedent?

when a condition operates to terminate a artys absoulte promise to perform

Al hires Mac to build an office building. He inserts this condition precedent into the contract: "I will not pay unless completely satisfied." After the work is done, Al claims that he is dissatisfied. Can he avoid payment?

yes, but only if a reasonable person would be dissatisfied EXPLANATION: In a contract involving mechanical or structural fitness like this one, a party's actual personal satisfaction is irrelevant. They can only refuse payment if a reasonable person would be dissatisfied with the work.

Sole Proprietorship (Ownership Requirements)

•Simplest form of business. •No separate entity. The owner is the business proprietor

Mayfair Company offers to sell a certain mall to Galleria Stores, Inc., for a certain price if it accepts before 10 A.M. Monday. A contract is formed if Galleria's acceptance is received a. before 10 A.M. Monday. b. before midnight Monday. c. before twenty-four hours of 10 A.M. Monday. d. within a reasonable time of 10 A.M. Monday.

a. before 10 A.M. Monday.

Briana, an employee of Cotillion Bank, is charged with embezzlement, which requires a. fraudulently appropriating another's property. b. obtaining lawful possession of property. c. physically taking property from its owner. d. the use of force or fear.

a. fraudulently appropriating another's property.

Network Systems, Inc, offers to sell a computer system to Office Supplies Company but mistakenly transposes some of the digits in the price so that $5,300 appears in the offer as $3,500. Office accepts the written offer. Network's best defense against enforcement of the contract is that Office

Knew the price was far below the prices of comparable systems.

Definition of a Contract

A legally enforceable, binding agreement where there is a legal basis for enforcing the promise, through bargained-for consideration.

Legality (element of agreement)

An agreement to do something prohibited by statute or contrary to public policy= void agreement (i.e. K never existed)

S Corporation ("S-Corp") (Profits)

Distributions must be proportionate to stock ownership

A counteroffer does not terminate but continues an offer.

False

A limited liability company must have an operating agreement.

False

A partnership is never considered a legal entity apart from its owners.

False

An offer may be made only to a specific person.

False

Under federal law, an e-document is as valid as a paper document, without exceptions.

False

National Insurance Company violates a state statue when selling an insurance policy to Opal. The policy may be enforced by

Opal only

Negligence

Tort

It is not possible to copyright an idea.

True

S and C Corporation

Unless otherwise provided for in an organizational document or shareholders agreement, shares are freely transferable and the transferee shareholder has full rights

Describe: Grievance

a formal complaint with the company, notifying management that the union claims a contract violation

Uma makes a contract with Val with the intent to benefit Wat. This is

a third party beneficiary contract.

Hawaii enacts a state law that violates the U.S. Constitution. This law can be enforced by a. no one. b. the federal government only. c. the state of Hawaii only. d. the United States Supreme Court only.

a. no one.

Marcy and candy wish to discharge their obligations under a prior agreement by executing and performing a new agreement. They need to execute and perform?

an accord and satisfaction

Dina files a suit against Engineering Associates to enforce a written con¬tract between the parties. Parol evidence will be admitted to prove

an orally agreed-on condition

subpoena duces tecum

an order to appear and bring specified documents

Specific performance may be avaliable for the breach of a contract to sell?

an original painting

Chocolate Bites, Inc., and Delite Distribution, Inc., sign a written con¬tract for a sale of goods. To be enforceable, this written contract must include a. a correct title, such as "Purchase Order" or "Sales Invoice." b. a declaration of the subject matter. c. a quantity term. d. the parties' names.

c. a quantity term.

Evelyn, who owns and operates Eve's Farm & Garden Company, agrees to sell Hill & Dale Produce, Inc., fifty bush¬els of apples. Evelyn dies before the apples are delivered to Hill & Dale. The contract with Hill & Dale is a. breached. b. discharged. c. not affected. d. suspended.

c. not affected.

Breach of Warranty:

contract theory, in common law. Disclaimer is a contract defense.

Under the Constitution, Congress a. administers the laws. b. enforces the laws. c. interprets the laws. d. makes the laws.

d. makes the laws.

Augustus, who is Bertha's guardian, convinces her to buy a certain parcel of land from Christy at a greatly inflated price. Augustus may be liable for a. mistake. b. puffery. c. unconscionability. d. undue influence.

d. undue influence.

Under a contract for the sale of land, the statute of frauds?

requires the defendent to sign the agreement

Under the UCC, stature of frauds, the writting must?

state quantity

The UCC defines a sale as occuring when?

title passes from the seller to the buyer for a price

A unilateral contract is formed when the one receiving the offer completes the requested act or performance.

true

To rescind a contract, the party that received a benefit in exchange for his or her promise to perform is required to return the benefit.

true

Elmo, a minor, misrepresents his age to be twenty-one and contracts to buy a car from Fine New Autos. Ordinarily, Elmo can disaffirm the contract

under any circumstances

What legislation amplify/modify Whistle Blowing protections & requirements?

• False Claims Act • Constitutional Protection for Government Employees • Civil Service Reform Act in 1978 (Protection for Federal Employees ) • Whistleblower Protection Act in 1989 (Protection for Federal Employees ) • Sarbanes-Oxley Act of 2002 (Employees of Publicly Traded Companies) • State Statutes • Common Law

List provisions included in the LMRDA.

• Governs internal operations of labor unions • Requires certain financial disclosures by unions • Establishes civil and criminal penalties for financial abuses by union officials • "Labor's Bill of Rights" designed to protect employees from their own unions

List when a Strike would be illegal

• during the Cooling Off Period • by Statutory Prohibition • when considered a Partial, Violent or Sit-Down Strike

Dina signs a contract with Ellen to kill Frank. Dina pays Ellen but she refuses to perform. Dina can

do nothing with respect to the contract

Gary threatens physical harm to force Hugh to sell his business, Imported Goods, Inc., to Gary for a below-market price. This is

duress.

Greg uses threats of physical harm to force Kim to enter into a contract. This is

duress.

Delia promises to buy a house from Edwin, who promises to vacate the property on July 1. If these promises are in writing, they are most likely.

enforceable

Intoxicated but fully aware of the consequences, Uri agrees to a two-year cell-phone service contract with Wander Talk, Inc., at more than the average market price. This contract is

enforceable

Describe: Quid Pro Quo in relation to Sexual Harassment.

occurs if any aspect of a job is made contingent upon sexual activity.

tender of delivery

occurs when seller makes conforming goods available to buyer and gives buyer whatever notification is reasonable necessary to enable buyer to take delivery (reasonable hour and reasonable manner)

Jack receives an MP3 player stolen from Kate. To be criminally liable, Jack must know or should have known

only that the player is stolen.

Eve tells Frank that she would like to buy his Great Goodies store. Frank declines, but later decides to sell and sends to Eve, and others, a flyer describing the detail. Eve responds with a letter of "acceptance." Eve and Frank have

no contract, because Frank sent the letter to more than one party

Reliance on a misrepresentation is required in an action based on fraud.

true

AAA Loans, Inc., is one of Beta Business Corporation's creditors. AAA guarantees Beta's debt to City Bank to forestall litigation. To be enforceable, this guarantee must be in writing

under no circumstances

Craig decides to sell his Double-D Ranch in an auction "without reserve." If Craig changes his mind at the auction, he can withdraw his property

under no circumstances

MicroCorp hires Nick to work for one month at a weekly salary of $400. A MicroCorp representative orally agrees two weeks later to double Nick's salary. This agreement is

unenforceable because Nick has incurred no additional detriment in exchange for MicroCorp's promise

Chris, a minor, signs a contract to buy alcoholic beverages for Dine & Drink, his parents' restaurant. The contract is

void as a matter of law

Ralph, a minor, signs a contract on behalf of the high school football team he plays on, to purchase alcholohic beverages for the tream party. The contract is?

void as a matter of law

Jane offers to sell Kyle three desks for his Lights & Lamps Company administrative office. Kyle sends a rejection first, then changes his mind and sends an acceptance. Whether they have a contract is determined by

whether Kyle's rejection or acceptance is received first

Limited Partnership ("LP") (Dissolution)

The LP terminated (1) pursuant to the terms of the LP agreement; (2) by termination of the last General Partner (whether by death, withdrawal or otherwise); or (3) by termination of the last Limited Partner (whether by death, withdrawal or otherwise)

Form agency by operation of law (apparent authority)

The agent acting outside of the scope of his duty because of necessity or emergencies

Remedies for Conversion

This is FMV of the goods At the time of the buyer's dominion and control over the goods

Declaratory Judgment

This is an adjudication of the rights and duties of a party under K when 1) the rights and obligations of the parties under a contract are unclear, and 2) an actual dispute exists between the parties concerning those rights 3) BUT, not available, however, to resolve moot issues or theoretical problems that have not risen to an actual dispute.

MAILBOX Rule and Post-Rejection Acceptance

This rule DOES NOT APPLY IF a communication is sent REJECTING the offer BUT then later sent communication ACCEPTING the Contract. RESULT: First in time, first will bind - The first communication that reaches the offeror FIRST, that communication will prevail, REGARDLESS of whether offeror reads that communication.

Consequential (or Special) Damages

To cover indirect and foreseeable losses, caused by special circumstances that does not directly or immediately result from the breach, such as lost profits

Liquidated Damages

To establish a predetermined damage amount

Punitive Damages (rare)

To punish and deter wrongdoing

Strict Liability

Tort

Specific Performance

Trigger: When damages are AN INADEQUATE REMEDY, can pursue this equitable remedy. 1) The test for whether damages are inadequate: i) Difficulty of proving damages with reasonable certainty; ii) Difficulty of procuring a suitable substitute performance by means of money awarded as damages; and iii) Likelihood that an award of damages will be collected. AND 2) Court must be able to supervise enforcement Not normally awarded for Ks for PERSONAL Services (but may issue injunction, if the K has a noncompete clause) NOTE: This remedy appropriate where: Contracts involving the transfer of an interest in real property...because every parcel of real property is considered unique. OR Under UCC, when the goods are rare or unique, or in other circumstances—such as for breach of a requirements contract when there is not another convenient supplier. UCC § 2-716.

A baby food company that says its ingredients are all natural when they are actually loaded with additives may be liable for fraud under negligence in tort law.

True

A novation is a substitution of a new contract involving a third party.

True

Compensatory damages are designed to compensate a nonbreaching party for the loss of the bargain

True

Disaffirmance is the legal avoidance of a contractual obligation.

True

Generally, any duty can be delegated.

True

Past benefits already received by a promisor cannot be consideration for a later promise.

True

T/F: An employer is not required to bargain over the closing of a plant, only the effects of the closing.

True

T/F: An offensive lockout is legal if the parties have reached a bargaining impasse.

True

T/F: Employee Handbooks can create a binding contract between employers and employees even under employment at-will.

True

T/F: Employees have right to talk among themselves about forming a union, handing out literature and ultimately whether to join.

True

T/F: Under the Employee Polygraph Protection Act, employers may not require, or even suggest, that an employee or job candidate submit to a lie detector test, except as part of an "on-going investigation" into crimes that have occurred.

True

T/F: The employer may not make any unilateral change concerning a mandatory subject until bargaining has reached an impasse.

True (Management may not unilaterally change wages, hours, or terms and conditions of employment without bargaining the issues to impasse; the employer may implement new policies after impasse, it may implement only what it has proposed at the table)

T/F: Mangini, Inc. sent an e-mail to all of its employees presenting its anti-union views. An employer may vigorously present its anti-union views, but may not use either threats or promises of benefits to defeat a union drive.

True (The employer may communicate to the employees why it believes a union would be harmful, but must limit itself to explanation and advocacy.)

In most cases, a merchant offeree may ignore any offer by another merchant.

False

Lyle and May want to rescind their contract under which Lyle sold a laser printer to May for $200. To rescind the contract

Lyle must return the $200 and May must return the printer.

For Macro Corporation to complete a short-form merger with its subsidiary, Micro Company, the merger must be approved by the board(s) of directors of

Macro only.

T/F: Roseanna was unhappy with her union. Consequently, Roseanna sent an e-mail to all of the union members criticizing the union officials. The union cannot discipline Roseanna.

True (The union may not discipline a union member for criticizing union leadership.)

Olin convinces Pia, who has no artistic ability, that Pia has considerable talent and induces Pia to pay Olin $10,000 for art lessons. When Pia realizes the truth, she files a suit against Olin. Pia is most likely to recover on the basis of a. fraud. b. mistake. c. puffery. d. undue influence.

a. fraud.

Sal is chairman of the board of Tasty Foods Corporation. Tina, a consumer, falls sick after eating a Tasty product. Tina sues Taste and Sal, individually. Tasty may pay Sal's legal fees: a. only if Sal wins the suit. b. only if Tasty wins the suit. c. only if Tina wins the suit. d. in most cases regardless of the outcome

Digital Equipment Corporation and Electronics, Inc., plan to consolidate. The plan must be approved by

Their boards and their shareholders.

A famous mark may be diluted by the use of a similar mark if it reduces the value of the famous mark.

True

After a ULP strike, a union member is entitled to their job back, even if that means the employer must lay off a replacement worker.

True

All evidence obtained in violation of the Fourth, Fifth, and Sixth Amendments normally must be excluded from a criminal trial.

True

An express warranty is basically any statement of fact or promise made about the goods that becomes part of the basis of the bargain.

True

An option contract gives one of the parties an absolute right to enter into a second contract at a later date.

True

Mary does not need to know the identity of the owner of the boot leg DVD she purchased or the name of the person (theif) who sold it to her in the salon to be guilty of larceny.

True

Mary purchases the boot leg DVD to her favorite movie while getting her hair done. Mary has committed the crime of larceny.

True

Only the government prosecutes criminal defendants.

True

Parties can form a contract without putting the terms in writing.

True

Parties with contractual capacity may form an enforceable contract.

True

Reliance on a misrepresentation is required in an action based on fraud

True

T/F: Although managers sometimes feel overwhelmed by the long list of laws that protect workers, the United States guarantees its workers fewer rights than virtually any other industrialized nation.

True

Travis sends Una a link to a purported e-birthday card that when clicked on downloads software to her computer to record her keystrokes and send the data to Travis. He uses the data to obtain her personal information and access her financial resources. This is a. identity theft. b. birthday bashing. c. regifting. d. Windows shopping.

a. identity theft.

Operation Of Law

1. Death or Insanity 2. Impossibility- due to the loss of the item or because of the law 3. Changed Circumstance 4. War or Other Political Prohibition- similar to the "force majeure" provision in a contract (bankruptcy or Insolvency or the Inability to pay debts when due - Does not necessarily terminate the agency relationship)

Duties of Agents to Principals

1. Duty of Loyalty- The obligation to act solely for the benefit of the principal and not in the agent's or a 3rd party's interest. Confidentiality is part of the duty of loyalty 2. Duty of Care- The obligation to exercise good business judgment and to use ordinary care in meeting the agency obligation

Ewald and First Star Company enter into an oral contract under which Ewald agrees to pro¬vide delivery service for First Star for nine months. This con¬tract is enforceable by a. Ewald only. b. either party. c. First Star only. d. neither party.

b. either party.

Roy owns Roy's Cafe. A fire destroys the cafe, and Roy is arrested on sus¬picion of setting it to collect the insurance. At the time of the arrest, Roy is not informed of his rights. Any statement Roy makes will be admissible a. in all circumstances. b. in some circumstances. c. in no circumstances. d. regardless of the circumstances.

b. in some circumstances.

Olsen Grocery Company files a suit against Pickle Products, Inc. Pickle responds that even if Olsen's statement of the facts is true, according to the law Pickle is not liable. This is a. a counterclaim. b. a motion for judgment on the pleadings. c. a motion for summary judgment. d. a motion to dismiss.

d. a motion to dismiss.

Bette backs out of City Parking Garage, colliding with Dill's car. Dill may recover $7,500 to cover the cost of the repairs if Bette failed to act as a. a blameless person. b a faultless person. c. a reliable person. d. a reasonable person.

d. a reasonable person.

Alan offers to transfer Beth's videotapes to CDs for $500. The mailbox rule will not apply if Beth accepts the offer by

e-mail

Through fraudulent means, Roy induces Sal to sign a contract to invest with him her profits from Tasty CafÈ. When Sal learns the truth, she may

enforce the contract or recover the money paid.

Lora signs a covenant not to compete with her employer, Midstate Distribution, Inc. The covenant will be enforced if it

if it is reasonable with respect to geographic area and time.

National Business Company and One-State Sales, Inc., agree to simultaneously rescind their contract and enter into a new agreement under which their duties are the same. National later sues One-State to enforce the new agreement. The court

may apply the preexisting rule or allow the rescission

Describe: Proof of Discrimination (Title VII)

means firing, refusing to hire, failing to promote, or otherwise reducing a person's employment opportunities because of race, color, religion, sex, or national origin.

Describe: Closed Shop Clause

means the employer must hire only union members.

Describe: Union Shops Clause

membership in the union becomes compulsory after the employee has been hired

To serve as a basis for an action for graud, misleading statements must be consiously false and have been made with the intent of?

misleading another person

When a party to a contract breaches the contract, the other party is legally entiled to?

money damages

Payment

should be made at time and place goods are received, if made on credit, obligated by credit terms, credit period usually begins on date of shipment, ________ can be made by any means agreed on by parties

Steve, whos wesleys guardian, convinces wesley that buying a certain parcel of land from steves brother-in-law at a price that is greatly inflated is a good deal. If in fact its not a good deal, steve may be liable for?

undue influence

XL Retail Sales, Inc., promises its salaried employees a bonus at the end of the year if management thinks it is warranted. This promise is

unenforceable because it is not supported by consideration

Baked Goods Company agrees to supply Comida Cafe with all the corn ships that it requires for a year. A sudden demand for ethanol results in a shortage of corn, and the price rises sharply. Baked Goods asks Comida to pay a higher price for the chips. This request is

valid due to the unforeseen difficulty of the sudden price increase

May tries to start her car with no success. She yells that she will sell the car to anyone for $10. Nick, a passerby, who owns Nick's Pre-owned Autos, hands May $10. This is

not a valid acceptance because May does not seriously intend to sell

Ordinarily, a promise to perform an existing legal obligation is:

not consideration.

punishment.

Ray agrees to purchase 10,000 tons of coal on alices land. Ray is required to remove the coal himself. The transaction is governed by?

real property law

Brick Products, Inc., files a suit against City Trucking Service for breach of contract, based on what Brick claims was City's offer. For a court to determine if a contract has been breached, under the common law, the offer must include terms that are

reasonable definite

In a partnering agreement, a seller and a buyer agree in advance on the terms that will apply to all of their later electronic transactions.

True

Iggy uses his computer to break into Hye Technology Company's computer. Iggy is a. a hacker. b. a bot. c. a botnet. d. a worm.

a. a hacker.

Tom enters a coffee shop in which he has an open account, fills a cup of coffee, holds it up so the cashier can see it, acknowledges the cashier's nod, and walks out with the coffee, knowing that he will be billed for it at the end of the month. Tom has formed

an implied-in-fact contract.

Todos Ltd. agrees to supply United Steel, Inc., with minerals from Venezuela. When the government is unexpectedly overthrown in a revolution, Todos can obtain the goods only at a much higher price. United agrees to pay but later files a suit to recover the difference. The court will most likely rule that

an unforeseen difficulty supported the contract modification here

In order to establish the tort of false imprisonment, a person must show imprisonment for:

any amount of time.

Ira signs Jill's name, without her authorization, on the back of a check made out to her. This is a. burglary. b. forgery. c. larceny. d. no crime.

b. forgery.

Jon, a law enforcement official, monitors Kelsey's Internet activities—e-mail and Web site visits—to gain access to her personal financial data and student information. This may violate Kelsey's right to a. equal protection of the law. b. privacy. c. procedural due process. d. substantive due process.

b. privacy.

Raw Material, Inc., and Sewn Fabric Corporation enter into a contract for a sale of muslin. The terms do not clearly indicate whether it is a destination or shipment contract. A court would most likely presume that it is a. a bailment contract. b. a destination contract. c. a shipment contract. d. a transportation contract.

c. a shipment contract.

Lark enters into a contract to mine gravel in Milena's quarry, sell it, and share the profits on its sale with Milena. If the duties under this con¬tract are discharged like those under most contracts, the duties will be a. repudiated. b. breached. c. performed. d. rescinded.

c. performed

In selling paving stones to Yard & Garden Supply, Trey tells Yard & Garden's buying representative that the stones are "soft as carpet." This is a. unconscionable. b. fraud. c. mistake. d. puffery.

d. puffery.

Betty, a minor, signs a contract to buy an SUV by misrepresenting her age to be twenty-one. In most states, Betty may

disaffirm the contract.

hybrid agencies

do not fall into one category or the other

Bob and Carol sign a contract that intentionally confers a benefit on Doug. Doug's rights under the contract will vest

if he demonstrates manifest assent to the contract or materially alters his position in detriment reliance on it.

Yvon and Zack are minors who marry each other. Their minority status may be terminated under the laws of

some states

Glen and Haj sign a written contract. Glen claims that the parties later orally agreed to modify the contract. Any oral modification is likely not enforceable if it falls under

the Statute of Frauds

the employment contract and the laptop purchase only

Describe: Partial Strike.

when employees stop working temporarily, then resume, then stop again, and so forth

Describe: How State Statutes affect Whistle Blowers

* all 50 states have statutes that protect whistle blowers from retaliation by their employers. * scope of this protection varies greatly from state to state.

Shipment Contract

1) Put goods into hands of carrier 2) Make contract for their transportation that is reasonable according to nature of goods and their value (i.e. refrigerated goods) 3) Obtain and promptly deliver/tender to buyer any documents necessary to enable the buyer to obtain possession of the goods from the carrier 4) Promptly notify the buyer that shipment has been made

What areas of law are covered within "Cyberlaw"?

Tort, contract, and constitutional.

Nora is a dissenting shareholder of Omega Company whose management is considering a tender offer by Power Products, Inc. Nora and Omega cannot agree on the fair value of the stock. The value will be determined by a

Court

Eve, a First Bank employee, deposits into her account checks that are given to her by bank customers to deposit into their accounts. This is

Embezzlement

Describe: Electronic Communication Privacy Act (ECPA)

Employers can monitor workers telephone calls and e-mails as long as certain conditions are met.

Ann offers to sell her car to Mike for $5,000. Mike says, "I'll buy it if you will take it to my mechanic tomorrow and he says it is in good working order." Ann agrees. What has happened here?

a. Mike has made a counteroffer. b. Mike has inserted a condition precedent. c. Mike has made a condition subsequent. (d. both A and B)

Elin decides to try to sell her collection of celebrity memorabilia in an auction "with reserve." If Elin changes her mind, she can withdraw her collection a. only before the auctioneer announces that the items are sold. b. only before the auctioneer delivers the items to the buyers. c. under no circumstances. d. within thirty days after the auction.

a. only before the auctioneer announces that the items are sold.

A minor may disaffirm a contract entered into with?

an adult

Jill is fifteen. In most states, Jill would be considered a minor because she is under the age of a. sixteen. b. eighteen. c. twenty. d. twenty-one.

b. eighteen.

Max begins to perform, intending that the completion of his performance act as an acceptance of Nia's offer, which can only be accepted by the completion of the act. Nia can revoke her offer any time

before Max has substantially begun performance of the act.

Twyla buys a bicycle from U-Pik-It Bike Store, which agrees to keep the bike for Twyla until she picks it up. Before Twyla gets the bike, a fire destroys the store and the bike. The loss is suffered by a. neither Twyla nor U-Pik-It b. Twyla and U-Pik-It. c. Twyla only. d. U-Pik-It only.

d. U-Pik-It only.

Phaedra and Raul contract with Sheldon to transfer the ownership of their lake cottage to him. This is a. a delegation. b. an assignment. c. a third party beneficiary contract. d. an alienation.

d. an alienation.

Auto Body Repair Shop (ABRS) promises to pay Ben $1,000 a week to work for ABRS. Ben accepts and quits his job with Car Care Service. ABRS fails to provide a job for Ben. Ben has a cause of action based on a. an illusory promise. b. a release. c. past consideration. d. promissory estoppel.

d. promissory estoppel.

Perfect Tender Rule

if goods/tender of delivery fails in any respect to conform to the contract, buyer or lessee has right to accept the goods, reject entire shipment, or accept part and reject part

Betty visits a grocery store in which she has an open account, holds up an pple so that the clerk can see it, acknowledges the clerks no and pockets the apple knowing that she will be billed for it at the end of the month. Betty has formed a?

implied-in-fact contract

A contract under seal is a formal contract.

true

Duties of Principal to Agent

1. Compensation- Agreed upon in advance in writing to avoid legal disputes 2. Reimbursement 3. Indemnification- Subject to the terms of the agency agreement, the Principal is obligated to "make whole" the Agent for liabilities incurred because of performing authorized and lawful actions and transactions on behalf of the Principal 4. Cooperation and Safe Working Conditions

List the Steps of a typical Grievance Process

1. File Grievance 2. Review by Company Manager (informal) 3. Review by Senior Management/Board (More Formal) 4. Arbitration (Rigid Formal/third party) 5. Appeal to Federal Court

Chip is a director of Diners Restaurants, Inc. Chip would breach his duty of loyalty if he: a. becomes a director of Fluffy Mattresses, Inc., a noncompeting firm. b. buys a controlling interest in Gulpin Foods Corporation, a competing firm. c. votes for Diners to buy a controlling interest in Eateries, Inc., which causes Diners to suffer loss. d. votes against Dinners' purchase of a controlling interest in Eateries, Inc., which causes Diners to suffer a loss

Alpha Cable Company, a subcontractor, understates it bid on a project for Beta Communications, Inc., the general contractor, due to an addition error. Alpha can most likely

Rescind the contract.

Nominal Damages

To recognize wrongdoing when no monetary loss is shown

Privity of Contract

Traditionally only the parties to the K have rights and liabilities under the K

Employment Discrimination

Treating employees or job applicants unequally based on race, color, national origin, religion, gender, age, or disability

In Case 7.1, The Coca-Cola Co. v. The Koke Co. of America, the United States Supreme Court upheld an injunction prohibiting competing beverage companies from calling their products "Koke.

True

In the United States, a patent is given to the first person to invent a product or process, even though someone else may have been the first to file for the patent.

True

Liquidated damage clauses typically require a party who breaches a contract to pay a certain amount to the nonbreaching party.

True

T/F: Both the union and the employer must bargain in good faith with an open mind. However, they are not obligated to reach an agreement.

True

T/F: Courts generally find these subjects to be mandatory: pay, benefits, order of layoffs and recalls, production quotas, work rules (such as safety practices), retirement benefits, and in-plant food service and prices.

True

T/F: The United States and Australia are the only industrialized nations that do not require employers to provide paid maternity leave.

True

T/F: The statute permits an employer to restrict organizing discussions if they interfere with discipline or production.

True

Acceptance

______ constituted by 1) If after reasonable opportunity of inspection, buyer signifies to seller that goods are conforming/________ 2) If reasonable opportunity of inspection, has failed to reject within reasonable period of time, _______ is presumed 3) If buyer performs any act inconsistent with seller's ownership, then buyer deemed to have _______ 4) If goods don't conform to contract, and seller failed to cure, buyer can make partial ______ or if nonconformity not discovered prior to ______ 5) Buyer can't accept less than a single commercial unit (unit of goods that by commercial usage, viewed as "single whole", purposes of sale, its division would materially impair the character of the unit, its market value or use)

Harriet raises and sells hippos. in order to keep her hippos happy and healthy, she feeds them hippo chow, which she buys from the local pet store. Under the UCC< harriet is?

a merchant of hippos, but not of hippo chow

Earl holds 1,000 pounds of perishable fruit in storage for Fresh Food Corporation. Fresh Food does not pay for the storage. Earl sells the fruit to Green Grocery Stores, Inc. This sale represents

a mitigation of damages.

National Manufacturing, Inc., contracts to sell its business to MegaCorp. Neither party has performed. To rescind this contract requires

a mutual agreement to rescind.

To Cody, the written law of a particular society at a particular time is most significant. Cody is a. a legal positivist. b. a legal rationalist. c. a legal realist. d. a person who adheres to the natural law school.

a. a legal positivist.

Recreation Supplies, Inc. (RSI), and Sam, the owner of a Tourist Time shop, orally agree to a sale of beach balls and seashells for $1,000. Sam gives RSI a check for $400 as a partial payment. This contract is a. enforceable to the extent of $400. b. fully enforceable because it is for specially made goods. c. fully enforceable because it is oral. d. not enforceable.

a. enforceable to the extent of $400.

Consideration is not required in:

agreements to modify contracts for the sale of goods.

Kelly is injured when she slips and falls on Layla's sidewalk. To determine whether Layla owed a duty of care to Kelly, Layla is subject to the standard of a. a realistic person. b. a reasonable person. c. a recognizable person. d. a reliable person.

b. a reasonable person.

Cathy and Dave sign a contract for a sale of goods. Cathy is to set the price for the goods at the time of delivery, but on delivery, refuses to do so. Dave may only a. fix a reasonable price. b. fix a reasonable price or treat the contract as canceled. c. treat the contract as canceled. d. wait for Cathy to set the price.

b. fix a reasonable price or treat the contract as canceled.

Edy borrows $1,000 from First County Bank. Gil orally promises First County that he will repay the loan if Edy does not. Gil does not get any personal benefit for the promise. Gil's promise is

not enforceable

Ira orally agrees to buy a unique collection of sports memorabilia for $1,000 from Jane and sends her $250 as a down payment. When Ira sends her the rest of the price, Jane refuses to ship Ira the collection. Ira should seek

specific performance.

Describe: Statutory Prohibition of a Strike

state statutes that ensure unions do not use the public health or welfare as a weapon to secure an unfair bargaining advantage

A contract between Lou and Val requires a transfer of stolen goods for counterfeit currency. Contract is?

void

List the Primary functions of NLRB.

• Monitoring conduct of employer and union during an election to determine whether workers want to be represented by a union • Preventing and remedying unfair labor practices by employers/unions • Establishing rules to interpret the National Labor Relations Act

Securities Registration (33 Act Related)

►Unless exempt, an offering of securities must be registered before offered to the "public" generally. ►The issuing corporation must file a registration statement and prospectus with the SEC, with the prospectus being later distributed to investors (i.e. the "investor disclosure document").

b. You have contractual capacity if you are legally able to enter into a contractual relationship

A definition of the term contractual capacity is: a. the ability to enter into a void contract. b. the ability to enter into a contractual relationship. c. the ability to mitigate contractual damages. d. the ability to physically with one's hand write a contract.

Joint and Several Liability

A doctrine under which the owners (typically in a partnership arrangement) are liable regardless of his participation and for any and all of the liability. Thus, in a lawsuit, the 3rd party can sue all partners together or one or more partners separately to collect

Conditions of Performance

A qualification, provision, or clause in a K, the occurrence or nonoccurrence of which creates, suspends, or terminates the obligations of the contracting parties

Statute of Frauds

A state by state statute that specifies what types of contracts must be in writing and signed by the defending party to be enforceable

Incidental Beneficiary

A third party who incidentally benefits from a K but whose benefit was not the reason the K was formed. Thus, such party has no rights in a K (i.e. no privity of K) and cannot sue to have the K enforced

Unenforceable Contract

A valid K that cannot be enforced because of a legal defense (i.e. K requiring writing and no writing). The court will not enforce the contract

Lola agrees to assume Mira's debt to New Sales Corporation. Lola does not get any personal benefit for the agreement. To be enforceable, the promise must be in writing if the debt is for

$50, $500, or $5,000

Revocation of acceptance - elements- defendant has to show:

(1) material nonconformity (2) subjected it to what would be a reasonable inspection that wouldn't uncover the nonconformity. (not discoverable). Another situation is if the buyer finds the nonconformity and the seller fails to cure nonconformity like he promised.

Carol pays Dick $10,000 for Dick to design an advertising campaign for Carol's health club. The next day, Dick tells Carol that he has accepted a job in New York and cannot design the campaign. Carol files a suit against Dick. As restitution, Carol can recover

$10,000.

List the Congressional Acts that prevent Employment Discrimination

* Equal Pay Act of 1963 * Title VII of the Civil Rights Act of 1964 * Pregnancy Discrimination Act of 1978 * Age Discrimination in Employment Act (ADEA) of 1967 * Americans with Disabilities Act (ADA)

What are the 6 elements of a Contract

1) An offer 2) Acceptance of that offer 3) Consideration 4) Definite and Certain Terms 5) Compliance with the SOF when it applies 6) and NO valid defenses to bar validity and enforceability.

What is the MAILBOX rule?

1) Mailed within the allotted response time. 2) Posted, not upon reciept. 3) Properly addressed and correct postage included. 4) AND the offer is NOT irrevocable. Result; Acceptance effective upon posting.

Remedies of Seller

1) cancel/rescind contract 2) resell goods and sue for damages 3) sue to recover purchase price 4) sue to recover damages for buyer's non-acceptance 5) Right to cancel contract 6) right to withhold delivery 7) right to sell/dispose of goods 8) right to recover

three types of rules

1. procedural 2. interpretive 3. legislative

Voidable Contract

A valid K where one or both parties have the option to avoid / RESCIND the K (i.e. K with a minor); If the K is voided, both parties are released, and if the K is ratified both parties are legally obligated

Consideration

Legally sufficient and bargained-for value received or promised to entice the offeree to make the arrangement

disparate-treatment discrimination

A form of employment discrimination that results when an employer intentionally discriminates against employees who are members of protected classes.

List the Congressional Acts affecting Safety and Privacy in the Workplace

* Occupational Safety and Health Act of 1970 (OSHA) * Fair Labor Standards Act of 1938 (FLSA)

three types of agency rule making

1. formal 2. informal 3. hybrid

informal limitations

1. freedom of information act 2. government in sunshine act 3. privacy act

A contract never can be both executory and executed.

An offer may not be revoked before it is accepted.

False

Embezzlement can be committed only by physically taking property from the possession of another.

False

Ira orally agrees to buy a unique collection of sports memorabilia for $1,000 from Jane and sends her $250 as a down payment. When Ira sends Jane the rest of the purchase price, Jane refuses to ship Ira the collection. Ira should seek a. damages. b. reformation. c. rescission. d. specific performance

Undue Influence

The situation in which the innocent party lacks free will in entering into the K, which makes the K voidable by the innocent party

It is possible for an offeree to?

accept an offer silently

When Overseas Exports, Inc., based in New York, does business internationally, the firm may be subject to international law. The sources of this law include a. the laws of individual nations only. b. treaties and international organizations only. c. the laws of individual nations, and treaties and international organizations. d. none of the choices.

c. the laws of individual nations, and treaties and international organizations.

Odell and Pete sign a contract for the sale of Odell's Pizza Parlor to Pete. The parties intend their written contract to be a final statement of most, but not all, of the terms of their agreement—Odell must first buy the building from Quin, after which Odell and Pete will negotiate a final price. Pete later disputes some of the provisions of the deal with Odell. If the dispute results in litigation, a court will most likely admit evidence of

consistent additional terms

Gwen agrees to paint Holly's Gift Shop. Gwen does the work, but Holly does not pay. To recover the price, Gwen can collect from Holly on the basis of their

express contract.

International Business, Inc. (IBI, agrees to assume a debt of Southern Export Company to First National Bank. This promise is for the benefit of IBI. To be enforceable, the promise must be in writing if the debt is for

none of the above

The Statewide Distributors Inc. is a corporation. Owen is an officer of SDI. Of the following list, the one that possesses a Fifth Amendment right in a criminal case would be

Owen only.

Owen, a famous chef, sells to Pat a restaurant that Owen closed years ago. Pat discovers in the restaurant a collection of Owen's recipes, which are considered valuable. In a suit to obtain the recipes, Owen will likely

Prevail because there was no mutual assent.

In a suit against Owen, Phil obtains specific performance. This is a. an order to do or to refrain from doing a particular act. b. an order to perform what was promised. c. a payment of money or property as compensation. d. the cancellation of a contract.

b. an order to perform what was promised.

Creekside Property Corporation enters into a contract with Delta Management Associates to manage and maintain Creekside's apartment complex. Their contract provides that neither party can recover damages for a non-fraudulent or unintentional breach. This is a. a limitation-of-liability clause. b. an exculpatory clause. c. an illegal clause. d. a quasi contract.

a. a limitation-of-liability clause.

Kip sells an apartment building to Lacy with a promise to repair the roof, which violates the local housing code, within six months. One year later, Kip sends Milo, a carpenter, to fix the roof. Lacy orders Milo to leave and refuses to make further payments to Kip, who files a suit against Lacy. Kip's late attempt to fix the roof is most likely a. a material breach. b. complete performance. c. excused by Lacy's refusal to make further payments. d. substantial, but not complete, performance.

a. a material breach.

Pablo and Melia enter into an oral contract for Pablo's sale to Melia of a laptop computer for $400. Assuming the terms can be proved, the con¬tract is enforceable by a. the seller or the buyer. b. the manufacturer of the laptop. c. any third party who overheard the parties making the agreement. d. none of the choices.

a. the seller or the buyer.

Orange Computer Corporation sells Pad-brand MP3 players to Quik Discount Stores and other retailers. Orange will have an insurable interest in the players as long as a. Orange remains in business. b. Orange retains title to the goods. c. the goods are in existence. d. there is no risk of loss.

b. Orange retains title to the goods.

Rani leaves a pair of new shoes at Soles Shoe Store to be dyed. Soles sells the shoes to Tia, who does not know that the shoes belong to Rani. Rani can recover from a. neither Tia nor Soles Shoe Store. b. Soles Shoe Store only. c. Soles Shoe Store or Tia. d. Tia only.

b. Soles Shoe Store only

Vacation Village enacts an ordinance to allow only a few street vendors to op¬er¬ate in certain areas, for the purpose of reducing traffic. A court would likely subject this ordinance to a. a police power test under the commerce clause. b. a "rational basis" test under the equal protection clause. c. intermediate scrutiny under the due process clause. d. strict scrutiny under the First Amendment.

b. a "rational basis" test under the equal protection clause.

Brad defends against a breach-of-contract suit by College Credit Corporation by claiming that their deal—a student loan accruing interest at a certain rate and payable beginning on a certain date—was unfair because the consideration for their contract was inadequate. If, as Brad claims, the consideration in this problem is inadequate, it may indicate a lack of a. accord in Brad's satisfaction with the value of the deal. b. bargained-for exchange or mutual assent. c. flexibility on the part of College Credit to accommodate Brad's needs. d. "heft," "substance," or "weight" in the terms of the contract.

b. bargained-for exchange or mutual assent.

Dirk, an employee of Ergonomic Elevators, Inc., pays Ferbie, an employee of Ergonomic's competitor G-Force Risers Company, for a secret G-Force pricing schedule. This is a. an effective marketing strategy. b. commercial bribery. c. creative legal bookkeeping. d. money laundering.

b. commercial bribery.

Safe-T Guard Services enters into a contract to secure Taylor's Business Park from vandalism and theft between 6 P.M. and 6 A.M. nightly for six months. At the end of the term, if there has been no vandalism or theft in the Park, Safe-T's performance will have been a. absolute. b. complete. c. conditional. d. substantial.

b. complete.

Posing as a representative of Global Games Company, Ferris e-mails Evan, a job seeker, asking him to forward personal banking information so that if he is hired, payroll checks can be deposited directly into his account. Evan supplies the data, which Ferris promptly sells to Dixie. This is a. cyber stalking. b. employment fraud. c. phishing. d. vishing.

b. employment fraud.

Genie.com initiates an online dating service. To attract subscribers and encourage participation, Genie.com creates and posts profiles of fictitious persons and exaggerated profiles of actual users. Fooled by the false profiles, Ham buys a subscription. He is most likely a victim of a. undue influence. b. fraud. c. mistake. d. nothing.

b. fraud.

Cook's Pantry Appliances, a retail store, must use reasonable care on its premises to warn its patrons of a. all risks. b. hidden risks. c. obvious risks. d. no risks.

b. hidden risks.

Riley, a State Bank employee, deposits into his account checks that are given to him by bank customers to deposit into their accounts. This is a. embezzlement. b. larceny. c. money laundering. d. no crime.

b. larceny.

Bret and Cory enter into a contract under which Bret agrees to sell his textbook to Cory for $60 at the end of the fall semester. Bret wants to transfer his right to payment for the book to Del. This transfer a. is prohibited. b. may be oral or written. c. must be implied. d. must be in writing.

b. may be oral or written.

Suki works for Renaldo. At the end of her first year, Renaldo promises to pay her a bonus for her "four quarters of success." Renaldo's promise is a. unenforceable because Suki's performance was a preexisting duty. b. unenforceable because Suki's performance is past. c. enforceable. d. unenforceable because Suki's performance is not legally sufficient.

b. unenforceable because Suki's performance is past.

Grant offers to sell his Honda Civic for $10,000 to Ivy. Referring to the prices for similar Hondas, Ivy says, "I'll pay no more than $5,000." Grant says, "Forget it." Grant's offer was terminated by a. Grant. b. Honda. c. Ivy. d. no one—Grant's offer is still open.

c. Ivy.

Theo and Uma orally agree on the sale of Theo's Fitness Center to Uma and note the terms on a sheet of the center's letterhead stationery, which only Theo signs. This agreement is most likely enforceable against a. neither Theo nor Uma. b. Theo and Uma. c. Theo only. d. Uma only.

c. Theo only.

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 witnesses' sworn statements. This is a. a counterclaim. b. a motion for judgment on the pleadings. c. a motion for summary judgment. d. a motion to dismiss.

c. a motion for summary judgment.

Kip, a representative for Little Shipping Company, delivers a bill of lading to Meg, the owner of Normal Warehouse. A bill of lading is a. an invoice for payment for loading and carting. b. an order to ship goods by carrier to a certain destination. c. a receipt for goods signed by a carrier. d. a receipt issued by a warehouser for goods in a warehouse.

c. a receipt for goods signed by a carrier.

Flo enters into a contract under Gail's threats. Later, Flo refuses to perform, claiming that she acted under duress. Gail sues to enforce the contract. To be guilty of duress, Gail must have threatened a. a civil suit. b. a lost opportunity. c. a social snubbing. d. a wrongful act.

d. a wrongful act.

Dino and Elle engage in a transaction that involves e-documents. The E-SIGN Act applies if those documents include a. a divorce decree or a prenuptial agreement. b. a health-insurance termination. c. an agreement subject to Article 2 of the Uniform Commercial Code. d. an eviction or a foreclosure.

c. an agreement subject to Article 2 of the Uniform Commercial Code.

Cody and Debora enter into an oral contract under which Cody agrees to work on Debora's ranch for not less than ten days. This contract is enforce¬able by a. Cody only. b. Debora only. c. either party. d. neither party.

c. either party.

Through fraudulent means, Roy induces Sal to sign a contract to in¬vest with him her profits from Tasty Café. When Sal learns the truth, she may a. do nothing with respect to the contract. b. enforce the contract only. c. enforce the contract or recover the money paid. d. recover the money paid only.

c. enforce the contract or recover the money paid.

Liu enters Mountain Triathlon, an athletic competition in which Liu has never competed. Regarding the risk of injury, Liu assumes the risks a. attributable to the Triathlon in any way. b. different from the risks normally associated with the Triathlon. c. greater than the risks normally associated with the Triathlon. d. normally associated with the Triathlon.

d. normally associated with the Triathlon.

Transnational Corporation and United Shipping, Inc., agree to a contract that includes an arbitration clause. If a dispute arises, a court having ju¬ris¬dic¬tion may a. monitor any arbitration until it concludes. b. order an arbitrator to rule in a particular way. c. order a party to bring the dispute to court. d. order a party to submit to arbitration.

d. order a party to submit to arbitration.

Expert Pavers, Inc., contracts with Fabricated Building Corporation to repave Fabricated's parking lot for which Fabricated agrees to pay. The requirements of this, and any other, contract do not include a. consideration. b. capacity. c. legality. d. practicality.

d. practicality.

Herb, a computer programmer for Inventory Control Corporation, is arrested in his employer's parking lot on suspicion of larceny. Herb must be informed of his right to a. a trial by jury. b. punishment. c. question witnesses. d. remain silent.

d. remain silent.

The River City Council, the Santa Clara County Board, the Texas state legislature, and the U.S. Congress enact laws. These laws constitute a. administrative law. b. case law. c. stare decisis. d. statutory law.

d. statutory law.

the speakers only

What are the two forms of mistakes of fact?

unilateral and mutual

Punitive Damages

very rarely available in contract actions. Some statutes apply them for the purpose of punishing fraud, violation of fiduciary duty, and acts of bad faith, and for deterrence. Under the Restatement 2nd, NOT recoverable "UNLESS the conduct constituting the breach is also a tort for which punitive damages [can be recovered]."

Eli obtains a consumer loan from First State Bank at an interest rate that exceeds the state's maximum. First State has

violated the usury laws

General Partnership (Ownership Reqs.)

•Not a separate entity in most states. The owner is the partners. However, under the Uniform Partnership Act the partnership is treated as an entity.

A court adjudicates Holly mentally incompetent and appoints a guardian. Holly subsequently signs a contract to sell her house. The contract is a. enforceable if Holly comprehended the consequences. b. enforceable if Holly knew she was entering into a contract. c. enforceable if the house was entirely paid for. d. void.

d. void.

Employment Sources, Inc., enters into a contract with Fred. If Fred is a mi¬nor, this contract is most likely a. enforceable. b. unenforceable. c. void. d. voidable.

d. voidable.

Beth is a victim of Carl's violation of a criminal law. Criminal law is con¬cerned with a. the prosecution of private individuals by other private individuals. b. the prosecution of public officials by private individuals. c. the relief available when a person's rights are violated. d. wrongs committed against the public as a whole.

d. wrongs committed against the public as a whole.

The primary purpose of the common law rules of contract interpretation is to?

determine the parties intent from the language of their agreement and give effect to that intent

Ada mistakenly pays property taxes that should have been assessed against Bud. Ada can recover the amount from Bud in quantum meriut

even if Bud was not aware of the error

Mia, a physician, renders aid to Noel, who is injured and unconscious. Mia can recover the cost of the aid from Noel

even if Noel was not aware of the aid (implied-in-law: Quasi contract)

independent agencies

governed by a board of commissioners, one of whom is chair, picked by president with help from senate, serve fixed terms, narrow authority over many facets of one particular industry, focus on economic growth

Curt, a doctor, renders medical care to Dora, a minor. According to the reasoning of the court in Case 13.1 Yale Diagnostic Radiology v. Estate of Harun, a contract between Curt and Dora is

implied in law

Describe: Cooling Off Period

may not strike to terminate the agreement, or modify it, without giving management 60 days' notice

Lara is a real estate broker licensed only in Minnesota. Lara concludes a sale in North Dakota. She can successfully sue to

neither collect the commission nor keep it

Loni and Myra enter into a contract for a sale of clarinets and other wind instruments. Loni delivers, but Myra does not pay. Loni can normally recover as damages the difference between a. any loss avoided and any profit gained. b. the actual price and the hoped-for price. c. the contract price and the market price. d. the current prices in the parties' locations.

c. the contract price and the market price.

Greco promises to buy illegal copies of CDs and DVDs from Fava, who promises to deliver on April 15. These promises are most likely a. enforceable. b. valid. c. void. d. voidable.

c. void.

Yvon asks Zac, "Do you want to buy one of my fishing rods?" This is a. a valid offer. b. not a valid offer because the terms are not definite. c. not a valid offer because Yvon did not state an intent. d. not a valid offer because Zack did not respond.

b. not a valid offer because the terms are not definite.

Leif offers Miley $1,000 for her three-year-old laptop computer. Miley ac¬cepts. If a dispute arises, a court would likely a. enforce the deal after questioning the adequacy of consideration. b. not question the adequacy of the consideration. c. rewrite the deal after questioning the adequacy of consideration. d. set aside the deal after questioning the adequacy of consideration.

b. not question the adequacy of the consideration.

Macho Marketing, Inc., and Nacho Food Corporation (NFC) discuss the terms of a contract. Macho faxes NFC a memo on Macho's letterhead that summarizes the items on which they agree, including a two-year term. NFC begins to perform, but Macho refuses to pay. NFC begins to perform, but Macro refuses to pay. The transaction between Macho and NFC falls within the Statute of Frauds' a. collateral-promise provision. b. one-year rule. c. sales-of-goods stipulation. d. secondary-contracts section.

b. one-year rule.

Any decision by the management of Fast-Food Franchise Corporation may significantly affect its a. operators only. b. operators, owners, suppliers, the community, or society as a whole. c. owners only. d. suppliers, the community, or society as a whole only.

b. operators, owners, suppliers, the community, or society as a whole.

Sam, an engineer, supervises the construction of a new bridge. When the bridge col¬lapses due to faulty construction, Sam is sued by those injured in the collapse. As a professional, Sam is held to the same standard of care as a. ordinary persons. b. other engineers. c. other professionals, including doctors, dentists, and lawyers. d. those injured in the collapse of the bridge.

b. other engineers.

Dobry Die & Mold, Inc., enters into a contract with Chet's Refitting Service to fix Dobry's precisely engineered molding equipment. If Chet's delays the repair for five days, knowing that Dobry will lose a certain percentage of profit for the delay, Dobry might be awarded consequential damages to a. establish, as a matter of principle, that Chet's acted wrongfully. b. provide Dobry with funds for a foreseeable loss beyond the contract. c. provide Dobry with funds for its loss of the bargain. d. punish Chet's and set an example to deter others from similar acts.

b. provide Dobry with funds for a foreseeable loss beyond the contract.

Refined Commodities, Inc., agrees to deliver ten tons of sheet metal to Select Builders Corporation. The agreement states that delivery is to be within "3" days, although the parties intend "30" days. Refined cannot convince Select to amend the contract. Refined should seek a. damages. b. reformation. c. rescission. d. specific performance.

b. reformation.

Kit loses her suit against Lou in a Minnesota state trial court. Kit appeals to the state court of appeals and loses again. Kit would appeal next to a. a U.S. district court. b. the Minnesota Supreme Court. c. the United States Supreme Court. d. the U.S. Court of Appeals for the Eighth Circuit

b. the Minnesota Supreme Court.

Herm promises to pay Nixie to work as an assistant buyer for his Organic Foods stores. Nixie agrees and quits her job with Pic-U Grocery, but Herm does not hire her. Herm is most likely liable to Nixie under a. the concept of accord and satisfaction. b. the doctrine of promissory estoppel. c. the preexisting duty rule. d. no circumstances.

b. the doctrine of promissory estoppel.

Bobbie claims that Carl breached their contract. Carl responds that he never intended to enter into a contract with Bobbie. The intent to enter into a contract is determined with reference to a. the conscious theory of contracts. b. the objective theory of contracts. c. the personal theory of contracts. d. the subjective theory of contracts.

b. the objective theory of contracts.

Under Ohio's state constitution, the Ohio Environmental Protection Agency issues a new rule, the Polk County Commission approves a new property tax measure, and the professors and students at Ohio Law School publish the results of their most recent legal research. Sources of law do not include a. the measures approved by local governing bodies. b. the results of legal scholars' research. c. the rules issued by state administrative agencies. d. the states' constitutions.

b. the results of legal scholars' research.

The Federal Trade Commission (FTC) is a government agency that issues rules, orders, and decisions. The Georgia state legislature enacts statutes. The Jackson County Board and the Peach City Council enacts or¬di¬nances. Administrative law includes a. all law that affects a business's operation. b. the rules, orders, and decisions of the Federal Trade Commission. c. statutes enacted by the Georgia state legislature. d. ordinances created by the Jackson County Board and the city coun¬cil of Peach City, Georgia.

b. the rules, orders, and decisions of the Federal Trade Commission.

Jocasta contracts to provide lawn-mowing services to Kevin for $140 per month. Jocasta can¬not transfer this duty a. under any circumstances. b. without continuing to be potentially liable. c. without Kevin's consent. d. without paying Kevin at least one monthly fee.

b. without continuing to be potentially liable.

Fine Properties, Inc., negotiates with General Maintenance Corporation to include a liquidated damages clause in their contract. To be enforceable, the clause must

both a and b.

Most common way to discharge or terminate, contractual duties is?

by performance

Braxton questions whether there is consideration for his contract with Tawny to exchange his accounting services for her payment of a certain amount. To constitute consideration, there must be a. a payment of money. b. a performance of services. c. a bargained-for exchange. d. detrimental reliance.

c. a bargained-for exchange.

Minka uses her computer to secretly install software on hundreds of personal computers without their owners' knowledge. Minka's secretly installed software allows her to forward transmissions from her unauthorized network to even more systems. This network is a. a hacker. b. a bot. c. a botnet. d. a worm.

c. a botnet.

Floyd and Grady enter into a contract by which Floyd promises to deliver fer¬tilizer to Grady. Floyd subsequently transfers this duty to Hiram. Floyd is a. a delegatee and an obligee. b. a delegatee but not an obligee. c. a delegator and an obligor. d. a delegator but not an obligor.

c. a delegator and an obligor.

Commercial Storage (CS), a bailee, holds goods for Delta Distributors, Inc., which has contracted to sell them to Eagle Company. The goods are to be delivered without being moved. The risk of loss will pass to Eagle when Eagle receives a. a copy of Delta's contract with CS. b. a copy of Delta's contract with Eagle. c. a negotiable document of title. d. a notice that Eagle's payment for the goods has cleared.

c. a negotiable document of title.

Peter offers to pay Quik Delivery (QD) $50 if it picks up and delivers to him a package from Rico within 30 minutes. QD can ac¬cept the offer only by meeting the deadline. If QD performs as directed, these parties will have a. a bilateral contract. b. a trilateral contract. c. a unilateral contract. d. no contract.

c. a unilateral contract.

Nano Corporation offers to sell a robotic device to Opal Assembly, Inc., but mistakenly transposes some of the digits in the price so that $15,400 appears in the offer as $14,500. Opal accepts the written offer. Opal's best argument in favor of enforcement of the contract is that a. a bilateral mistake does not afford relief from a contract. b. a mistake of value does not afford relief from a contract. c. a unilateral mistake does not afford relief from a contract. d. the price was below the prices of comparable devices.

c. a unilateral mistake does not afford relief from a contract.

Boris programs software to prompt a computer to continually crash and reboot. Boris's goal is to install this program on various companies' computer systems without the companies' knowledge. The program can reproduce itself, but must be attached to a host file to travel from one computer network to another. This program is a. a hacker. b. a bot. c. a virus. d. a worm.

c. a virus.

Bayside Construction Company enters into a contract with Clio to remodel Dewey's Home Store, using products from Eagle Building Supplies. Fresh Food Café is next to Dewey's Home Store. The remodeling is a gift from Clio to Dewey, Clio's nephew and the owner of Dewey's Home Store. Eagle will realize a profit from the sale of prod¬ucts to Bayside to remodel Dewey's store. Eagle is a. a delegatee. b. an assignee. c. an incidental beneficiary. d. an intended beneficiary.

c. an incidental beneficiary.

Vladimir is a "payday" lender charged with filing false claims in bankruptcy proceedings against his customer-debtors. The standard of proof to find a defendant who has been charged with a crime guilty is a. a preponderance of the evidence. b. beyond all doubt. c. beyond a reasonable doubt. d. clear and convincing evidence.

c. beyond a reasonable doubt.

Mae is granted immunity after she agrees to testify about a crime. Mae has an absolute privilege against self-incrimination and a. can be prosecuted only for a crime about which she agreed to testify. b. cannot be prosecuted for any crime. c. cannot refuse to testify on Fifth Amendment grounds. d. can refuse to testify on Fifth Amendment grounds.

c. cannot refuse to testify on Fifth Amendment grounds.

Vince offers to buy a book owned by Sun-Hi for twice what Sun-Hi paid for it. She accepts and hands the book to Vince. Sun-Hi's delivery of the book is a. not consideration because its transfer is a preexisting duty. b. not consideration because its exchange is not a bargain. c. consideration. d. not consideration because its value is legally insufficient.

c. consideration.

Kennedy Capital Corporation provides other firms with funds to expand op¬erations. If Kenney strictly complies with existing laws, the firm will a. fulfill all business ethics obligations. b. fulfill no business ethics obligations. c. fulfill some business ethics obligations. d. not need to fulfill any business ethics obligations.

c. fulfill some business ethics obligations.

Mariah takes off her ring and places it on her desk while she works. Without her knowledge or consent, her coworker Nita picks up the ring, puts it on, and walks away. Nita has likely committed a. burglary. b. forgery. c. larceny. d. no crime.

c. larceny.

Jen questions whether there is consideration for her contract with Isaac to exchange her catering services for his payment of a certain amount. To constitute consideration, the value of whatever is exchanged must be a. objectively worthy. b. grossly inadequate. c. legally sufficient. d. practically sound.

c. legally sufficient.

Pete, the owner of Quality Orchards, contracts to sell fruit to Ripe Produce, Inc. When Pete refuses to per¬form, Ripe Produce files a suit to enforce the contract. To defend successfully on the ground of un¬con¬scionability, Pete must show that enforcement of the contract would be a. economically meaningless. b. legally worthless. c. manifestly unfair or oppressive. d. undeniably valuable.

c. manifestly unfair or oppressive.

Quito contracts with Rewind Graphix, Inc., to pay $5,000 for its work on the animated film "Song." After Rewind performs, they sign an accord, in which Quito promises to pay $4,000 within ten days instead of $5,000 later. But Quito does not pay. Rewind can sue Quito a. under no circumstances. b. on the accord only. c. on the accord or the original obligation. d. on the original obligation only.

c. on the accord or the original obligation.

Ralph, a van driver for Speedy Delivery Company, causes a multi-vehicle accident on a city street. Ralph and Speedy are liable to a. all those who were injured. b. only those who were uninsured. c. only those whose injuries could have been reasonably foreseen. d. only those whose vehicles were closest to Ralph's van.

c. only those whose injuries could have been reasonably foreseen.

The Securities Exchange Commission (SEC) is an administrative agency. Like other administrative agencies, the SEC was established to a. act as a liaison between federal and state governments. b. impose uniform laws on the states. c. perform a specific function. d. standardize laws for the executive and judicial branches.

c. perform a specific function.

Mica, a minor, signs a contract to pay National Fitness Club a monthly fee for twenty-four months to use its facilities. Six months later, after reaching the age of majority, Mica continues to use the club. This act is a. disaffirmance. b. emancipation. c. ratification. d. unconscionable.

c. ratification.

Cheesy Pizza Company contracts to sell 1,000 cases of frozen pizzas to Roller Rinks, Inc., but refuses to deliver. Due to a spice shortage, Roller Rinks cannot obtain pizza elsewhere. Roller Rinks's right to recover the goods from Cheesy is the right of a. cover. b. cure. c. replevin. d. specific performance.

c. replevin.

George has a badly infected right foot. Herb, George's physician, prescribes amputation. George agrees. During the operation, Herb amputates the left foot. In George's suit against Herb, George's best theory for recovery is a. assumption of risk. b. negligence per se. c. res ipsa loquitur. d. strict liability.

c. res ipsa loquitur.

Uri sells 100 cases of vitamins to Wanda, but before she takes physical possession, the cases are lost. Under the UCC, the parties' rights and obligations with respect to the loss depend on the concept of a. physical possession. b. product liability. c. risk of loss. d. title.

c. risk of loss.

Equipment Rental Corporation and Family Farm, Inc., are parties to an oral agreement for a lease of goods with payments in excess of $10,000. They may satisfy the Statute of Frauds by a. mutually agreeing not to commit fraud. b. restating the terms in a phone call. c. setting out the terms in an e-mail. d. shaking hands on the deal.

c. setting out the terms in an e-mail.

Expendable Energy Corporation regularly expresses opinions on political issues. Under the First Amendment, corporate political speech is given a. little protection. b. no protection. c. significant protection. d. total protection.

c. significant protection.

Inferior Company sells products that are poorly made. Jack, who has never bought an Inferior product, files a suit against the company, alleging that its products are defective. The firm's best ground for dis¬missal of the suit is that Jack does not have a. certiorari. b. jurisdiction. c. standing. d. sufficient minimum contacts.

c. standing.

Lake Port Services enters into a contract to load Max's Great Lakes barges with the cargo that Max designates. Lake Port's offer to perform, when Lake Port is ready, willing, able to do so, is a. tandem. b. tonnage. c. tender. d. tinder.

c. tender.

Ludwig receives from Milo a marimba stolen from Nadine. To be criminally liable, Ludwig must know a. Milo. b. Nadine. c. that the marimba is stolen. d. what a marimba is.

c. that the marimba is stolen.

Roy contracts to sell his Double-R Ranch to Sam on May 1. On April 20, Roy tells Sam that he will not go through with the deal. Sam files a suit against Roy. Sam can recover a. the cost of any ranch that would suit him. b. the cost of a similar, nearby ranch. c. the Double-R Ranch. d. nothing.

c. the Double-R Ranch.

Beta Grocers orders by phone twenty cartons of canned beets from Carotene Food Packers, Inc. After ten cartons are delivered and accepted, Beta repudiates the contract. Carotene can enforce the contract to a. any extent because the order was placed orally. b. no extent because the order was placed orally. c. the extent of the ten accepted cartons. d. the extent of the twenty ordered cartons.

c. the extent of the ten accepted cartons.

Blueberry Café signs an agreement with County Credit Bank to borrow $40,000 at 20 percent interest. Later, the state legislature passes a law lowering the maximum permissible rate of interest to 15 per¬cent. Blueberry's best argument for avoiding payment to County Credit is that a. performance of the contract is commercially impracticable. b. payment of the loan would force the debtor into bankruptcy. c. the law has rendered performance of the contract illegal. d. the specific subject matter of the contract has been destroyed.

c. the law has rendered performance of the contract illegal.

NuTech Company agrees to sell computer equipment to Office Stores, Inc. (OSI) for OSI to market to its customers. Their contract will not be enforceable unless it includes a. the duration of the deal. b. the price of the goods. c. the quantity of the goods. d. the requirements of OSI's customers.

c. the quantity of the goods.

Gary, a minor, buys a car from Hot Cars, Inc., in a state in which a duty of restitution is imposed. After wrecking the car, Gary wants to return it. Gary

can return the car but must may for the damage

Don, a businessperson, is charged with RICO offenses. Don may be subject to penalties under RICO only if he

committed two or more certain federal or state crimes.

Caleb is driving a car in which Dotty is a passenger when an accident occurs. Caleb and Dotty are emotionally rattled, but neither is physically hurt. Caleb is not liable to Dotty on a negligence theory because a. both parties were emotionally rattled. b. Caleb did not apparently intend to cause an accident. c. Dotty must have been comparatively negligent. d. Dotty was not injured.

d. Dotty was not injured.

Text Publishers, Inc., contracts for a sale of textbooks to University Bookstores, Inc. Vital Shipping Corporation, the carrier, transports the books to Warehouse Storage Company. Text's right to stop delivery is lost when University's rights to the goods are acknowledged by a. the appropriate government agency only. b. Vital Shipping only. c. Vital Shipping or Warehouse Storage. d. Warehouse Storage only.

d. Warehouse Storage only.

Ollie transmits unsolicited ads to millions of virtual mailboxes, using misleading and deceptive information, including false return addresses. Under federal law, this is a. a crime only if the recipients previously asked to be "opted out." b. a crime only if HHH and the recipients are in foreign jurisdictions. c. not a crime. d. a crime.

d. a crime.

Drew contracts to sell a residential duplex to Evan. The contract pro¬vides that if Drew does not close the deal by September 15, he must pay Evan one-half of the contract price. This provision is not enforceable be¬cause it is a. a liquidated damages clause. b. a mitigation clause. c. a nominal damages clause. d. a penalty clause.

d. a penalty clause.

Cathy assures Don that she will deliver his products as he directs. An as¬sertion that one will do something in the future is part of the defini¬tion of a. a declaration. b. a moral obligation. c. an ethical principle. d. a promise.

d. a promise.

Leon files a suit against Moira, a medical doctor, alleging negligence. As a physician, Moira is held to the standard of a. a blameless individual. b a faultless ordinary person. c. a reliable professional. d. a reasonable physician.

d. a reasonable physician.

Lois takes out a life insurance policy with Mega Insurance Corporation that names her son, Nero, as the bene¬ficiary. This is a. a delegation. b. an assignment. c. a third party incidental beneficiary contract. d. a third party intended beneficiary contract.

d. a third party intended beneficiary contract.

Jared uses his computer to secretly install software on thousands of personal computers without their owners' knowledge. The program can reproduce itself and spread from one computer to another via any USB port. This program is a. a hacker. b. a bot. c. a virus. d. a worm.

d. a worm.

Crestview Properties. Inc., and Deft Investment Corporation enter into a con¬tract for a sale of land. To be enforceable, the contract must be in writing if the land is valued at a. more than $500. b. more than $5,000. c. more than $50,000. d. any price.

d. any price

Fernando obtains a consumer loan from Greater Regional Credit Union at an interest rate that exceeds the state's maximum. Greater Regional has a. created a risk for the purpose of assuming it. b engaged in a restraint of trade. c. violated a licensing statute. d. committed usury.

d. committed usury.

Avatar, Inc., and Bling Corporation sign a contract in which Avatar agrees to deliver t-shirts emblazoned with video game characters in exchange for Bling's prom¬ise to pay. Avatar delivers. The contract is a. voidable. b. executed. c. executive. d. executory.

d. executory.

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 the merits with value as a precedent. b. indicates agreement with the Idaho court's decision. c. means nothing. d. means that the Idaho court's decision is the law in Idaho.

d. means that the Idaho court's decision is the law in Idaho.

Elle, a minor acting on her own, signs a contract to buy a horse from Field Equine Ranch. Later, Elle disaffirms the deal. Liability most likely rests with a. Elle and her parents. b. Elle only. c. Elle's parents only. d. neither Elle nor her parents.

d. neither Elle nor her parents.

Lovett County Bank offers to lend money to Kino, the owner of Java Stop, at 15 percent interest. Before Kino accepts, a state statute is enacted prohibiting loans at rates greater than 12 percent. Kino and the bank have a. have a contract for a loan at 15 percent interest. b. have a contract for a loan at 12 percent interest. c. have a contract for a loan at 0 percent interest. d. no contract for a loan.

d. no contract for a loan.

Pep Paints agrees to sell to Quality Painters Grade A-1 latex outdoor paint to be delivered May 8. On May 7, Pep tenders Grade B-2 paint. Quality rejects the Grade B-2 paint. Two days later, Pep tenders Grade C-3 paint with an offer of a price allowance. Pep has a. additional, unlimited time to cure. b. a reasonable, additional time to cure. c. one more day to cure. d. no more time to cure.

d. no more time to cure.

Jolie signs a contract with Keaton, an unlicensed physician, to perform plastic surgery—a medical procedure. This contract is enforceable by a. Jolie. b. Jolie's medical insurance company. c. Keaton. d. no one.

d. no one.

Super Resources, Inc., sells unprocessed minerals to commercial processors in Texas. With regard to the UCC's good faith requirement, Super can a. avoid it only by a conspicuous written disclaimer. b. avoid it only by oral disclaimer. c. avoid it with or without a disclaimer. d. not disclaim it.

d. not disclaim it.

Jean promises to pay Khalil $500 because "he does not have as much money as other people." Jean's promise is a. enforceable because society wants people to keep their promises. b. enforceable because the redistribution of wealth is a valid social goal. c. not enforceable because Jean could have given more. d. not enforceable because Khalil has not given consideration in return.

d. not enforceable because Khalil has not given consideration in return.

Wally's Warehouse offers to sell a certain used forklift to Value Lumber Outlet, but it is stolen before Value ac¬cepts. Most likely, Wally's must obtain a. a forklift for Value if Wally's insurance covers the loss. b. a forklift for Value if it still wants one. c. nothing for Value because that would extend the time of the offer. d. nothing for Value because the theft termi¬nated the offer.

d. nothing for Value because the theft termi¬nated the offer.

Outdoor Properties, Inc. (OPI), agrees to sell certain acreage to Pia. OPI repudiates the deal. Pia sues OPI and recovers damages. Pia can now obtain a. an amount in a quasi-contractual recovery. b. damages representing restitution. c. specific performance of the deal. d. nothing more.

d. nothing more.

Nico is a passenger in a car driven by Owen, whose negligence causes an accident, injuring himself. Nico, uninjured, accompanies Owen to Parkside Hospital in an ambulance. The ambulance is hit by a car driven by Quin, injuring Nico. Nico files a suit against Owen, whose best defense is a. assumption of risk. b. contributory negligence. c. negligence per se. d. superseding cause.

d. superseding cause.

Glen and Haj sign a written contract. Glen claims that the parties later orally agreed to modify the contract. Any oral modification is likely not enforceable if it falls under a. the doctrine of promissory estoppel. b. the "main purpose" exception. c. the "partial performance" exception. d. the Statute of Frauds.

d. the Statute of Frauds.

Congress enacts a law that sets out a rigorous medical-device premarket approval process for the U.S. Food and Drug Administration to follow. The law includes a preemption provision. Joe is injured by a device that underwent the process and files a claim under New Hampshire state law to recover for the injury. The court will most likely rule that a. Joe's state law claim preempts the federal law. b. the federal law and state law claim are concurrent. c. the federal and state law claim cancel each other out. d. the federal law preempts Joe's state law claim.

d. the federal law preempts Joe's state law claim.

Ramon sets fire to his house. At common law, the crime of arson could be committed only if a person burned down a. a commercial building. b. an unoccupied structure. c. his or her own house. d. the house of another person.

d. the house of another person.

Timber Products, Inc., and Walt, a consumer, enter into a contract for a sale of plywood. If the contract includes a clause that is perceived as grossly unfair to Walt, its enforcement may be challenged under the doctrine of a. good faith. b. square dealing. c. the mere image rule. d. unconscionability.

d. unconscionability.

Cut-Rate Construction Company (CCC) begins building a restaurant for Diners Restaurants, Inc., but after two months demands an extra $100,000. Diners agrees to pay. If CCC offers, as a reason for the extra $100,000, that ordinary business expenses have increased, the agree¬ment is a. enforceable as an accord and satisfaction. b. enforceable because of unforeseen difficulties. c. unenforceable as an illusory promise. d. unenforceable due to the preexisting duty rule.

d. unenforceable due to the preexisting duty rule.

Cut-Rate Construction Company (CCC) begins building a restaurant for Diners Restaurants, Inc., but after two months demands an extra $100,000. Diners agrees to pay.If CCC offers no reason for the extra $100,000, but says only that it will otherwise stop construction, the agreement is a. enforceable as an accord and satisfaction. b. enforceable because of unforeseen difficulties. c. unenforceable as an illusory promise. d. unenforceable due to the preexisting duty rule.

d. unenforceable due to the preexisting duty rule.

Tasty Pastries, Inc., and other bakers refer to a "baker's dozen" as consisting of a collection of thirteen baked goods. This is an example of a. course of dealing. b. course of performance. c. square dealing. d. usage of trade.

d. usage of trade.

Solid Tool Company's decision makers view a particular risk in the use of Solid's product as open and obvious. Continuing to market the product without telling consumers of the risk could be justified from a perspective of a. duty-based ethics. b. Kantian ethics. c. rights-based ethics. d. utilitarian ethics.

d. utilitarian ethics.

Jill, a minor, is living at home with her parents, but signs a lease with a landlord to rent an apartment. Jill can

disaffirm the lease without liability

Cody and Dora enter into an oral contract under which Cody agrees to work on Dora's farm for not less than one week. This contract is enforceable by

either party

Don enters into a contract w/ Emma, who doesnt have contracutal capacity. The law will permit Don to enforce the contract, only if emma?

elects not to avoid the contract

Essen Corporation buys from Fallow Farms, Inc., a rice crop that Fallow plans to plant and harvest during the next growing season. Essen plans to sell the rice to Gourmet Grocery Stores. After the rice is planted, but before it is harvested, an insurable interest in the rice exists in a. Essen and Fallow, but not Gourmet Grocery. b. Essen, Fallow, and Gourmet Grocery. c. Essen only. d. Fallow only.

a. Essen and Fallow, but not Gourmet Grocery.

Quality Products, Inc., files a suit against Retail Sales Corporation. Sid is a witness for Quality. Tod is a witness for Retail. Quality may direct interrogatories to a. Retail only. b. Retail, Sid, or Tod. c. Sid only. d. Sid or Tod only.

a. Retail only.

Quincy buys a car under a warranty from Ride Motors. Quincy soon discovers that the car has a defect that significantly affects its value and use. In all states and the District of Columbia, Quincy may have remedies under a. a lemon law. b. Article 74 of the CISG. c. a transit law. d. the Automobile Dealers' Day in Court Act.

a. a lemon law.

Creekside Property Corporation enters into a contract with Downstream Management Associates to manage and maintain Creekside's apartment complex. Their contract provides that neither party can recover damages for a non-fraudulent or unintentional breach. This is a. a limitation-of-liability clause. b. an exculpatory clause. c. an illegal clause. d. a quasi contract.

a. a limitation-of-liability clause.

Home Delivery Corporation and Interstate Transport, Inc., sign an agree¬ment that provides for the payment of "$1,000 by whichever party commits a material breach of the contract that creates damages difficult to esti¬mate but approximately $1,000." This is a. a liquidated damages clause. b. a mitigation of damages clause. c. a nominal damages clause. d. a penalty clause.

a. a liquidated damages clause.

Spencer Hydraulics Corporation's ethics committee is asked a business ethics question—should the firm bid low to obtain a contract that it knows it can fulfill only at a higher price? A practical method to investigate and solve this question involves all of the following steps except a. absolution. b. decision. c. inquiry. d. justification.

a. absolution.

Quik Fix-It, Inc., offers Pam a job as a plumber. No time for acceptance is specified in the offer. The offer will terminate a. after a reasonable period of time. b. after a typical work week (five business days). c. after a usual month (thirty calendar days). d. never.

a. after a reasonable period of time.

Retail Music, Inc., offers to buy from Super Products Corporation (SPC) 1,000 blank CDs of a certain brand. Without notifying Retail, SPC timely ships CDs of a different brand. This shipment is a. an acceptance of the offer and a breach of the parties' contract. b. an acceptance of the offer and a fulfillment of the parties' contract. c. a refusal of the offer and a breach of the parties' contract. d. a refusal of the offer and a fulfillment of the parties' contract.

a. an acceptance of the offer and a breach of the parties' contract.

California enacts a statute to ban advertising in "bad taste." This stat¬ute would likely be held by a court to be a. an unconstitutional restriction of speech. b. constitutional under the First Amendment. c. justified by the need to protect individual rights. d. necessary to protect national interests.

a. an unconstitutional restriction of speech.

Congress enacts the Tight Money Act (TMA) of 2010 to ban "major busi¬ness entities" from making political contri¬bu¬tions that individuals can make. A court would likely hold the TMA to be a. an unconstitutional restriction of speech. b. constitutional under the First Amendment. c. justified by the need to protect individual rights. d. necessary to protect national interests.

a. an unconstitutional restriction of speech.

Cordial Drinks, Inc., markets alcoholic beverages. A federal regulation bans the disclosure of the alcohol content of liquor on Cordial's labels and those of other marketers. A court would likely hold this regulation to be a. an unconstitutional restriction of speech. b. constitutional under the First Amendment. c. justified by the need to protect individual rights. d. necessary to protect national interests.

a. an unconstitutional restriction of speech.

Delta Products Corporation contracts with Excel Trucking Company to take goods to Flight Airlines, Inc., with Flight to transport the goods to a Geo Storage Company warehouse. Excel, Flight, and Geo each acknowledge possession of the goods by a document of title. Excel, Flight, and Geo are a. bailees. b. consignees. c. lessees. d. sellers.

a. bailees.

Stardust Coffee Company is a Texas-based firm that does business throughout the world. Stardust manages retail and wholesale operations, buys and sells commercial venues, undeveloped land, and coffee beans, and other goods. Stardust has had to deal with employee and customer theft. With respect to these circumstances, the Uniform Commercial Code (UCC) provides a framework for a. commercial transactions for the sale of and payment for goods. b. international distribution agreements. c. domestic and foreign transactions in real estate. d. prosecuting crimes against business interests.

a. commercial transactions for the sale of and payment for goods.

Naomi, a businessperson, is charged with RICO offenses. Naomi may be subject to penalties under RICO only if she a. committed two or more certain federal or state crimes. b. has never been convicted of a crime. c. intends to commit future RICO offenses. d. was previously convicted of a crime.

a. committed two or more certain federal or state crimes.

Fruits & Vegetables, Inc., and Great Grocery Stores dispute the interpretation of an ambiguous phrase in their contract. In a suit between the parties to construe the contract, a court may accept evidence of a. consistent additional terms only. b. consistent additional terms and contradictory terms only. c. contradictory terms only. d. anything extrinsic to the contract.

a. consistent additional terms only.

In negotiations with Coastal Distribution Company, Briggs Trucking, Inc., in¬sists that their contract be drafted ac¬cording to certain plain language laws. These laws concern the phrasing of a. contracts. b. ads. c. product instruction manuals. d. documents of delivery.

a. contracts.

Betty, a minor, signs a contract to buy an SUV by misrepresenting her age to be twenty-one. In most states, Betty may a. disaffirm the contract. b. disaffirm the contract only if she first makes full payment. c. disaffirm the contract only if she returns the SUV in orig¬inal condition. d. not disaffirm the contract.

a. disaffirm the contract.

Substitution of Carriers

if commercially reasonable substitute is available, seller must use substitute performance which is sufficient tender to buyer

Mei writes a check to Nat in an amount that represents half of her debt to him. On the back of the check, Mei includes the words "payment in full." Nat cashes the check. This discharges the entire debt

if the debt is unliquidated

Standard Purchasing Corporation and Total Sales, Inc., enter into a partnering agreement. Under a partnering agreement, parties agree

in advance to terms that apply to their future e-transactions.

Jed makes an honest but erroneous statement that misrepresents a material fact in a contractual transaction with cynthis. Jed is guilty of ?

innocent misrepresentation

Flo agrees to work as Gary's personal accountant for one year but dies in the sixth month of the contract. Flo's estate a. is discharged from any contractual liability. b. must find a competent accountant to fulfill the contract. c. must pay liquidated damages. d. must refund any money paid to Flo on the contract.

a. is discharged from any contractual liability.

overhead

lost profits of seller including reasonable allowance for ______ + other expenses

Wisconsin, like other states, may regulate private activities to protect or promote the public order, health, safety, and general welfare under its a. police powers. b. taxing powers. c. spending powers. d. supreme powers.

a. police powers.

Marie claims that a Nebraska state statute infringes on her "procedural due process" rights. This claim focuses on a. procedures used in making decisions to take life, liberty, or property. b. the content of the statute. c. the similarity of the treatment of similarly situated individuals. d. the steps to be taken to protect Mary's privacy.

a. procedures used in making decisions to take life, liberty, or property.

Congress enacts a law prohibiting toys made in China from being sold in the United States. The Hawaii state legislature enacts a law allowing the sale of Chinese-made toys. Hawaii's law will most likely be a. rendered invalid under the supremacy clause. b. rendered valid the free exercise clause. c. struck down under the due process clause. d. upheld under the commerce clause.

a. rendered invalid under the supremacy clause.

Sam, a citizen of Tennessee, files a suit in a Tennessee state court against United Sales Corporation, a Wyoming company that does business in Tennessee. The court has original jurisdiction, which means that a. the case is being heard for the first time. b. the court does not have concurrent jurisdiction. c. the court has standing. d. the court has venue.

a. the case is being heard for the first time.

Sal contracts with Tasty Pizza Company to deliver its products. Both parties change their minds, however, and inform each other that they would like to cancel the contract Sal and Tasty

may rescind their contract to the extent that it is executory

Curt, a doctor, renders medical care to Dora, a minor. Happy for a success¬ful outcome, Dora buys and sends a gift to Curt, and hires the band Elation to perform at her next birthday celebration. Most likely to be considered a necessary is a. the medical care. b. the thank-you gift. c. the band. d. none of the choices.

a. the medical care.

Outstate Properties, Inc. (OPI), agrees to sell certain acreage to Pia. OPI repudiates the deal. Pia sues OPI and recovers damages. Pia can now obtain

nothing more.

Describe: Equal Pay Act of 1963

an employee may not be paid at a lesser rate than employees of the opposite sex for equal work.

With respect to a contract, a condition is?

an event, the occurrence or nonoccurrence of which triggers the performance of a contractual obligation or terminates an existing obligation.

Great Marketing Company and Hot Tunes, Inc., sign a document that states Great agrees to create a marketing campaign for Hot and Hot agrees to pay Great for the service. Great and Hot have

an express contract

appreciate the wrongfulness of his conduct or obey the law.

Incidental Damages

awarded to the non-breaching party as compensation for commercially reasonable expenses incurred as a result of the other party's breach. In the sale of goods, such damages may include the cost of inspecting, transporting, caring for, or maintaining custody over goods.

Jack, a minor, takes out an automobile insurance policy and pays a $1,000 pre¬mi¬um. If Jack disaffirms the contract, he can most likely recover a. $500. b. $1,000. c. $1,500. d. nothing.

b. $1,000.

Pam contracts to buy a Quotient-brand computer set-up from Regal Systems for $5,000, but Regal fails to deliver. Pam buys the computer elsewhere for $6,500. Pam's measure of damages is a. $1,500 only. b. $1,500 plus incidental damages. c. incidental damages only. d. $0.

b. $1,500 plus incidental damages.

Pam contracts to buy a Quotient-brand computer set-up from Regal Systems for $5,000, but Regal fails to deliver. Pam buys the computer else¬where for $6,500. Pam's measure of damages is a. $1,500 only. b. $1,500 plus incidental damages. c. incidental damages only. d. $0.

b. $1,500 plus incidental damages.

Clarice pays Damien $10,000 to design an ad campaign for her Sweetwater Coffee Stand chain. The next day, Damien tells Clarice that he has accepted a job in New York and cannot design her campaign. She files a suit against Damien. As compensatory damages, she can recover a. $100,000. b. $10,000. c. $1,000. d. $0.

b. $10,000.

Lava Excavators, Inc., needs a drill to continue its operations and orders one for $3,000 from Mining Supplies Company. Lava tells Mining that it must receive the drill by Tuesday or it will lose $10,000. Mining ships the drill late. Lava can recover a. $13,000. b. $10,000. c. $3,000. d. $0.

b. $10,000.

Kris contracts to work exclusively for Little Manufacturing Company during May for $5,000. On April 30, Little cancels the contract. Kris finds another job dur¬ing May but earns only $3,000. Kris files a suit against Little. As compen¬satory damages, Kris can recover a. $3,000. b. $2,000. c. $1,000. d. $0.

b. $2,000.

Curtis enters into a contract with Drive-Away Lease Company for a three-year lease of a car. This contract is subject to a. Article 2 of UCC. b. Article 2A of the UCC. c. Article 11 of the CISG. d. the common law only.

b. Article 2A of the UCC.

Bayside Construction Company enters into a contract with Clio to remodel Dewey's Home Store, using products from Eagle Building Supplies. Fresh Food Café is next to Dewey's Home Store. The remodeling is a gift from Clio to Dewey, Clio's nephew and the owner of Dewey's Home Store. Halfway through the project, Bayside refuses to finish the job. The contract can be enforced against Bayside by a. Clio only. b. Clio or Dewey only. c. Clio, Dewey, or Eagle only. d. Clio, Dewey, Eagle, or Fresh Food.

b. Clio or Dewey only.

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. Neighbors justifiably refused to fulfill a promise to Milo. d. Neighbors justifiably relied on Milo's promise to its detriment.

b. Milo justifiably relied on Neighbors's promise to his detriment.

Describe: Employee Retirement Income Security Act (ERISA)

protection for workers covered by private pension plans

Bill offers to sell his Consumer Service Center business to Dina for $100,000. Dina replies, "The price is too high. I will buy it for $90,000." Dina has

rejected the offer and made a counteroffer

Sam, a citizen of New Mexico, wants to file a suit against Tanya, a citizen of Texas. Their diversity of citizenship may be a basis for a. any court to exercise in rem jurisdiction. b. a federal district court to exercise original jurisdiction. c. a U.S. court of appeals to exercise appellate jurisdiction. d. the United States Supreme Court to issue a writ of certiorari.

b. a federal district court to exercise original jurisdiction.

A enters into a contract with B to provide surface material for A's tennis courts by April 1 for a tournament to begin May 1. The contract specifies an amount to be paid if the contract is breached. This is a liquidated damages clause if the amount is a. an excessive estimate of the loss on a breach. b. a reasonable estimate of the loss on a breach. c. designed to penalize the breaching party. d. intended to quickly provide cash to the nonbreaching party.

b. a reasonable estimate of the loss on a breach.

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 delegatee. b. an assignee. c. an obligee. d. a prohibitee.

b. an assignee.

Fitch and Gert enter into a contract for the distribution of Fitch''s produce to local restaurants and wineries for which Fitch agrees to pay Gert. Gert transfers his right to payment under the contract to Honor Bank. This transfer is a. a delegation. b. an assignment. c. an obligato. d. prohibited.

b. an assignment.

McCall and Teresa enter into a contract for the distribution of McCall's produce to local restaurants for which Teresa agrees to pay. McCall transfers his right to payment under the contract to Midtown Bank. This transfer is a. a delegation. b. an assignment. c. a novation. d. prohibited.

b. an assignment.

Nashville Harmonies Inc. and Taylor enter into a contract for Taylor to write six songs for which Nashville agrees to pay her. Taylor transfers her right to payment under the contract to Omni Entertainment Agency. In the transfer of rights, Taylor is a. a delegator. b. an assignor. c. an obligor. d. an alien.

b. an assignor.

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. a commercial cyber presence in Missouri. b. conducted substantial business with Missouri residents. c. general maximum contact with Missouri. d. solicited virtual business in Missouri.

b. conducted substantial business with Missouri residents.

Lyra induces Moe to enter into a contract for the sale of an apartment about which Lyra fraudulently misrepresents a number of material facts. Lyra tells Moe that her commission is 6 percent, but their signed, written contract states "12 percent." The Statute of Frauds governs a. contracts that are induced by fraud. b. contracts that must be in writing to be enforceable. c. the admissibility in court of oral evidence. d. the reformation of oral and written statements into one contract.

b. contracts that must be in writing to be enforceable.

The Constitution sets out the authority and the limits of the branches of the government. The term checks and balances means that a. Congress writes checks and the president balances the budget. b. each branch of government has some power to limit the actions of the other branches. c. each branch of government may exercise the authority of the other branches. d. the president "checks" the courts, which "balance" the laws.

b. each branch of government has some power to limit the actions of the other branches.

Cole drives into Dino's Service Station and asks Erin, the attendant, to fill the tank in Cole's hybrid vehicle. After Erin fills the tank, but before Cole pays for the gas, any contract between Cole and Dino's is a. executed. b. executory. c. quasi. d. unenforceable.

b. executory.

Lew angrily accuses Mandy, a broker with New Financial Services, of fraudulently inducing him to invest in Open Pit Oil Company, whose wells are dry. The reliance that gives rise to liability for fraud is normally based on a statement of a. emotion. b. fact. c. opinion. d. puffery.

b. fact.

In negotiating a contract with Mikayla for the use of an empty bottling plant to bottle and market natural spring water, Nero makes a statement that he believes not to be true with respect to a ma¬te¬rial fact in the deal. Nero is guilty of a. a mistake. b. fraud. c. puffery. d. nothing.

b. fraud.

Tori files a suit against the state of Utah, claiming that a Utah state law violates the commerce clause. The court will agree if the statute a. impinges on citizens' private activities. b. imposes a substantial burden on interstate commerce. c. imposes a substantial burden on the state. d. promotes the public order, health, safety, morals, or general welfare.

b. imposes a substantial burden on interstate commerce.

Lora signs a covenant not to compete with her employer, Midstate Distribu¬tion, Inc. The covenant will be enforced if it a. does not require either party to obtain a business license. b. is reasonable with respect to geographic area and time. c. is supported by consideration. d. none of the choices.

b. is reasonable with respect to geographic area and time.

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. it has sold any bikes within the last year. b. it holds itself out by occupation as having knowledge or skill unique to the bike in the transaction. c. its owner enjoys biking. d. it subscribes to Bike, a biweekly trade magazine.

b. it holds itself out by occupation as having knowledge or skill unique to the bike in the transaction.

Double D Ranch and Esau enter into a contract on August 1 for the sale of 200 cattle. Esau cancels the contract ten days later. Double D is unable to sell the cattle to another buyer. Double D is entitled to a. force Esau to accept the cattle and recover the contract price. b. keep the cattle and recover the contract price from Esau. c. keep the cattle only. d. recover the contract price from Esau but must destroy the cattle.

b. keep the cattle and recover the contract price from Esau.

On the orders of their corporate employer, Della and Efron, employees of Fabulous Fashionista, a clothing store, switch trademarks on clothing that comes into the store to be sold to consumers. This is a. forgery. b. larceny. c. obtaining goods by false pretenses. d. no crime.

b. larceny.

Restitutionary Damages

restore to the plaintiff whatever benefit was conferred upon the defendant prior to the breach. Generally, the benefit may be measured by EITHER: the reasonable value of the defendant obtaining that benefit from another source , OR the increase in the defendant's wealth (e.g., the increase in value of property owned by the defendant) from having received that benefit. However, when justice requires, recovery may be limited to one of the two measurements. NOTE: IF, however, at the time of the defendant's breach, the plaintiff has fully performed the contract, and the defendant owes only money and not some other kind of performance, then the plaintiff's recovery is LIMITED TO ONLY expectation damages (generally the contract price minus the cost of completion). Also available in Quasi-contract Ks (i.e. no K, or an unforceable K, and lack of recoverywould be unjust b/c of bneefit converred...limit recovery to fair value of benefit conferred.

the admissibility in court of oral evidence

Diners Restaurant signs an agreement with Eagle Bank to borrow $10,000 at 20 percent interest. Later, the state legislature passes a law lowering the maximum permissible rate of interest from 15 percent. Diners' best argument for avoiding payment to Eagle is that

the law has rendered performance of the contract illegal.

General Electronics, Inc., uses shrink-wrap agreements. In most cases, a shrink-wrap agreement is between

the manufacturer of hardware or software and its user.

unenforceable due to the preexisting duty rule

Define: Sexual Harassment (Title VII)

unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature.

Edgar promises alice that a certain used car will give her a "smooth ride". Edgar offers to let alice take the care for a test drive but alice declines. She pays for the car and drives off but soon realizes the cars systems in poor condition. Alice

was not defrauded

On Tad's eighteenth birthday he decides that he no longer wants to keep a car he bought from U-Pick Autos, Inc., when he was seventeen. His right to disaffirm the deal with depend on

whether Tad acts within a reasonable period of time

Local Delivery Service, Inc., offers to deliver computers to Micro Store's customers for a certain price. Local's intent to extend a serious offer to Micro is determined by reference to Local's

words and conduct

Form agency by agreement (actual authority)

written agreement or oral agreement

Clay contracts with Discount City Store to buy an MP3 player for $200 and a pair of stereo speakers for $600 from Discount City Store. Clay also downloads $300 worth of digital music from E-music.com. To be an enforceable contract, the contract that must be in writing is the purchase of a. the digital music, the MP3 player, and the speakers. b. the digital music and the speakers only. c. the speakers only. d. none of these items.

Regional Delivery, Inc., and Safe Storage Company enter into a long-term lease for a warehouse. To be enforceable, the lease must be in writing if the land is valued at

$50, $500, or $5,000

Best products corporation and international Inc enter into a contract for a sale of goods. TO be enforceable, the contract must be in writing if the goods are values at more than?

$500

b. A Taco Bell, Chick-fil-a, Burger King, and McDonald's are examples of a chain-style business operation

A local Taco Bell restaurant is an example of which kind of franchise: a. a manufacturing arrangement franchise. b. a chain-style business operation. c. a distribution franchise. d. a processing-plant arrangement

Mitigating Damages

A party to a contract must avoid or mitigate damages to the extent possible by taking such steps as to not involve undue risk, expense, or inconvenience. The non-breaching party is held to a standard of reasonable conduct in preventing loss. If FAILURE to meet this Duty, then that failure only reduces the damages that may be recovered by the non-breaching party.

c. To be valid, an agreement must include an offer and acceptance

An agreement to form a contract must include: a. a fair bargain b. a fair price c. an offer and an acceptance. d. a physical sample of the good for sale

Describe: Basic common law rule of employment

An employee at will could be fired for a good reason, a bad reason, or no reason at all

Describe: Bona Fide Occupational Qualification

An employer is permitted to establish discriminatory job requirements if they are essential to the position in question. (Courts rarely support this argument)

A voidable contract is one that is otherwise valid but may be rejected or set aside by one of the parties.

Legal Contractual Capacity

Characteristics recognized by law for one having the "quality" to engage in contractual activities

Bill and Carol are the only partners of an accounting firm. Regarding bankruptcy, The partnership can be treated as an

Entity for bankruptcy.

Any contract breach excuses the nonbreaching party's duty to perform.

False

Home Delivery Corporation and Interstate Transport, Inc. signed an agreement that provides for the payment of "$1,000 by whatever party commits a material breach of the contract that creates damages difficult to estimate but approximately $1,000." This is a. a liquidated damages clause. b. a mitigation of damages clause. c. a no-damages clause. d. a penalty clause

Security

Instruments evidencing interest in a business organization or a promise of the repayment of indebtedness of a business organization, which instruments of interest include the following categories: ◘Stock (common stock, preferred stock, treasury stock). ◘Debt Instruments (bonds, debentures, notes, certificates of deposit, or other evidence of indebtedness) ◘Future Interests in Securities (stock options, warrant, puts, calls, or other rights to purchase security) ◘Investment Contracts (interest in land, investment schemes) ►The "Howery" Test: U.S. Supreme Court case where the Court held that a "security" exists in any transaction in which a person invests in a common enterprise reasonably expecting profits derived primarily from others' management or entrepreneurial efforts.

Sam is a shareholder of Top Goods, Inc., whose management is considering a tender offer by United Sales Corporation. If Sam elects to exercise his statutory appraisal rights, then he may not be able to

Participate in shareholder votes, receive dividends, sue to block the tender offer

b. Proxy statement because a registration does not need to contain a proxy statement

The 1933 Securities Act requires that organizations with nonexempt securities or transactions must file a registration statement with the SEC prior to issuing securities. Which of the following items must the statement contain? a. a marketing plan for the organization b. a financial statement certified by an independent public accounting firm c. a tombstone ad d. a proxy statement applicable for all new shareholders

Fiduciary

The agent must put her own needs second to the principal's interest

Duty of Loyalty

The obligation to subordinate personal interests to the welfare of the corporation, which includes: *No competition with the corporation; *No engaging in conflict of interest transactions or matters (unless a majority of the disinterested directors approve the transaction after full disclosure from the interested director); *No insider trading; *No taking advantage of corporate opportunities; and *No transaction that is detrimental to the minority shareholders. **Two prong test: (1) whether the opportunity was reasonably related to the corporation's line of business and (2) whether the corporation was financially able to undertake the opportunity.

Preemptive Rights

The preference for existing shareholders to purchase a prorated share of newly issued stock within a certain period of time, which provision is typically set forth in the Articles/Certificate of Incorporation. ►Significance: A mechanism to prevent the dilution of equity ownership in the corporation and thus the loss of control.

employment discrimination

Treating employees or job applicants unequally on the basis of race, door, national origin, religion, gender, age, or disability; prohibited by federal statutes.

A rescinding party must restore the other party to that party's original position.

True

A third party beneficiary contract is formed when a contract confers a benefit on any third party.

True

T/F: The NLRA guarantees the right of employees to engage in concerted action for mutual aid or protection.

True

Multiple Choice: Employees of Sun Food Co. have gone out on strike seeking better pay. Sun Food: a. can hire replacement workers at any time. b. can hire replacement workers if it gives the union 60 days notice prior to actually hiring the replacement employees. c. cannot hire replacement workers during the strike since this action would constitute an unfair labor practice. d. can hire replacement workers only if the collective bargaining agreement expressly gave it the right to do so.

a (Management has the right to hire replacement workers during a strike.)

Clay offers to pay Dot $50 for a golf lesson for Eula. They agree to meet the day after tomorrow to exchange the cash for the lesson. These parties have

a bilateral contract

When an offer has been accepted:

a binding agreement probably is formed.

Grady is a judge. In his court, Grady may bar a suit if it is not filed within a proper time according to a. a statute of limitations. b. the doctrine of stare decisis. c. the chancellor's discretion. d. the king's conscience.

a. a statute of limitations.

Damages for Seller

amt = difference between contract price and market price at time/place of tender of goods + incidental damages

When the parties enter into a contract into a second agreement in which they agree that one party will sibstitute a new kind of performance in place if the orginial contract obligation, then if the parties perform the revised agreement they have created?

an accord and satisfaction

Uri and Vicky orally agree on the sale of Uri's Nite Club to Vicky and note terms on a pair of the Club's napkins, which they both sign. A written memorandum evidencing an oral contract that would otherwise be unenforceable must contain a. every term. b. the essential terms. c. the preliminary terms. d. the qualitative terms.

b. the essential terms.

because it is a promise of something of value

Retail Investment Company offers to sell a certain mall to Shopping Stores, Inc., if it accepts before 10 a.m. Monday. A contract is formed if Shopping Stores' acceptance is received

before 10a.m. Monday

Bret contracts to work for City Construction Corporation (CCC) dur¬ing July for $4,500. On June 30, CCC cancels the contract. Bret declines a similar job with Downtown Builders, Inc., which would have paid $4,000. Bret files a suit against CCC. As compensatory damages, Bret can recover a. $4,500. b. $4,000. c. $500. d. $0.

c. $500.

Drake pushes Evon into the path of an oncoming car driven by Flip. Gina tries to rescue Evon. Drake is liable for any injuries to a. Evon and Flip but not Gina. b. Evon and Gina but not Flip. c. Evon, Flip, and Gina. d. none of the parties.

c. Evon, Flip, and Gina.

Standard Office Corporation pays Tech Products $1,000 to use a Tech computer for a month. For purposes of the UCC, this is a. a bailment. b. a consignment. c. a lease. d. a sale.

c. a lease.

Tania promises to buy Saki's handheld game-player for $75. Saki is a. an executee. b. an offeror. c. a promisee. d. a promisor.

c. a promisee.

Relax Recreation Toys, Inc., allows Sandy to take a Relax boat for a "test run." Sandy tries the boat for a few hours, returns, and buys it. This is a. a bailment. b. a consignment. c. a sale on approval. d. a sale or return.

c. a sale on approval.

Variety Goods, Inc., and World Sales Corporation enter into a contract that does not specify the payment terms. Payment may be made in a. any commercially acceptable means except cash. b. cash only. c. cash or any commercially acceptable substitute. d. cash or check only.

c. cash or any commercially acceptable substitute.

Parsley, a world-famous chef, signs a contract to give lessons in French cooking to Curry. Parsley wants to transfer his duties under the con¬tract to Relish, the operator of a hot dog concession. The transfer is a. valid because the performance required is of a nonpersonal nature. b. valid if Relish is a highly regarded vendor. c. not valid because performance depends on Parsley's personal skills. d. not valid if Curry does not hold Relish in high regard.

c. not valid because performance depends on Parsley's personal skills.

Sam signs a covenant not to compete with his employer, Topp Sales Company. A court decides that the covenant is overly restrictive. The court will likely a. enforce it as written so as not to interfere with the parties' freedom of contract. b. enforce it but evaluate its effects over time. c. reform its terms to prevent any undue burdens. d. refuse to enforce it unless Topp pays additional consideration.

c. reform its terms to prevent any undue burdens.

If the plaintiff has either engaged in or refrained from actions that are at least partially to blame for the injuries received, what negligence has occurred?

contributory

NuStores accepts a shipment of DVD players from Open-Ur-Eyes Video, Inc. NuStores later discovers a defect in the players, revokes acceptance, and returns the players via Playback, Inc. During the return, the players are lost. The loss is suffered by a. NuStores only. b. NuStores and Open-Ur-Eyes, but not Playback. c. NuStores, Open-Ur-Eyes, and Playback. d. Open-Ur-Eyes only.

d. Open-Ur-Eyes only.

Leather Products Stores, Inc., rejects a shipment of goods that does not conform to its contract with Manufactured Cowhide Corporation, but is unable to obtain instructions from the seller. Leather Products may a. resell or return the goods only. b. resell or store the goods only. c. return or store the goods only. d. resell, return, or store the goods.

d. resell, return, or store the goods.

Posing as Sterling Bank, Roxanne e-mails Quentin, asking him to update his personal banking information by calling a certain phone number. He makes the call and supplies the data, which Roxanne promptly sells to Porcio. This is a. cyber stalking. b. employment fraud. c. phishing. d. vishing.

d. vishing.

Elmo advertises a reward for the return of his lost dog. Floyd, who does not know of the reward, finds and returns the dog. Floyd cannot recover the reward because he

did not know of the reward when he found and returned the dog

Describe: Bargaining Order

direction the NLRB uses when an employer has shown extreme anti-union animus

Max, a minor subject to his parents' care and control, signs a contract to rent an apartment from Noel for one year. Before the end of the term, Max moves out. Noel sues for the rent for the rest of the term. Max can

disaffirm the contract and avoid liability for the rent

Dana enters into an agreement with joe to provide her with palm reading services for one hour each month for a year. The state legislature subsequently passes a law making palm reading illegal. This law will?

discharge the contract

Describe: Confidential Employees

employees who work so closely with executives or other management employees that there would be a conflict of interest if the employee were in the bargaining unit. (Admin Asst. is one example)

Through fraudulent means, Frank induces Ethel to sign a contract to invest with him the profits from her business. When Ethel learns the truth, she may

enforce the contract or recover what she invested with Frank.

Tom and sally enter into an oral contract under which tom agrees to provide delivery service for sally for 6 months. This contract is

enforceable by either party

Tom and Sally enter into an oral contract under which Tom agrees to provide delivery service for Sally for six months. This contract is

enforceable by either party.

Avatar, Inc., and Bling Corporation sign a contract in which Avatar agrees to deliver t-shirts emblazoned with video game characters in exchange for Bling's promise to pay. Avatar delivers. The contract is

executory

Local Investment Company and Midstate Properties, Inc., contract for the sale of a retail mall. A mutual mistake of fact will make it possible for either party to rescind the contract

if the mistake of fact is material.

Business Properties, Inc., offers to sell a warehouse to Corporate Investments. Corporate saya that it will pay BPI $100 to hold the offer open for three business days. This

makes the offer irrevocable for three days if BPI accepts

Joy signs a contract with Kent, an unlicensed physician, to perform a medical procedure. This contract is enforceable by

no one.

Adam attempts to free himself from the duties of his contract with Beth by telling Beth to find someone else to perform them. This is

none of the above.

List the criteria for a Community of Interest.

• Rough equality of pay and benefits, and methods of computing both • Similar total hours per week and type of work • Similar skills and training, and • Previous bargaining history and the number of authorization cards from any different groups within the unit.

Describe: Appropriate Bargaining Unit

• employees share a community of interest. • Managerial employees must be excluded from the bargaining unit. • Confidential employees are generally excluded from the bargaining unit.

S Corporation ("S-Corp") (Ownership Reqs)

•Name must include "Corporation," "Company," "Incorporated," "Limited," an abbreviation thereof, or another permitted. •Legal entity separate and distinct from its owners. •Shareholders can only be only individuals, estates, or certain trusts. •Cannot be a member of an affiliated group of corporations. •Must have 100 or fewer shareholders. •Must have only one class of stock, but shareholders in the one class of stock can have different voting rights. •Shareholders must be U.S. citizens or residents. *S-Corp automatically converts to a C-Corp if it does not meet the formation requirements.

Limited Partnership ("LP") (Ownership Reqs.)

•Name must include "Limited Partnership" or "LP". •Legal entity separate and distinct from its owners. •Has two or more partners one of which has to be a General Partner and the other a Limited Partner. •Has no restriction on the type of owners.

Steve contracts to sell his boat to debbie. Debbie builds a dock behind her house in which to keep the boat. Steve then attempt to cancel contract will?

not be effective because debbie has detrimentally relied on steves offer

Diamond Camera Shop receives lenses from Excel Optical, Inc., under a sale or return agreement. While the lenses are in Diamond's possession, title is held by a. Diamond and Excel jointly. b. Diamond only. c. Diamond's creditors only. d. Excel only.

b. Diamond only.

Describe: Family and Medical Leave Act of 1993 (FMLA)

guarantees both men and women up to 12 weeks of unpaid leave each year for childbirth, adoption or medical emergencies for themselves or a family member. (The FMLA applies only to companies with at least 50 workers and to employees who have been with the company full-time for at least a year—this is about 60 percent of all employees.)

Describe: Section 8(b) of NLRA

makes it an unfair labor practice for a union (per Taft-Hartley Act): • To interfere with employees who are exercising their labor rights under §7 • To encourage an employer to discriminate against a particular employee because of a union dispute • To refuse to bargain collectively, or • To engage in an illegal strike or boycott, particularly secondary boycotts.

Definition of loss avoided

the beneficial effect of the breach due to the non-breaching party's ability to salvage or reallocate resources that otherwise would have been devoted to performing under the contract. NOTE: subtracted only if the savings results from the injured party not having to perform rather than from some unrelated event.

Development Associates ("DA") agrees to buy five acres of land from Eastside Properties for $15,000. Eastside fails to go through with the deal on the agreed date, when the market price of the land is $17,000. If DA cannot recover the land, DA may recover in damages in the amount of a. $17,000. b. $15,000. c. $2,000. d. $12,000

UCC

Duties and obligations include those specified by agreement, by custom, and by ____, ____ imposes duty of good faith

d. The court will most likely evaluate the adequacy of consideration if there is a gross disparity in the value of the consideration exchanged

Corporation A defends against a breach-of-contract suit by Company B claiming that the deal for the sale of assets was unfair because the consideration for their contract was inadequate. A court is most likely to evaluate the adequacy of consideration if a. a thing exchanged has no intangible value to one of the parties. b. something exchanged is not of direct economic or financial value. c. the items exchanged were of unequal value. d. there is a gross disparity in the value of the consideration exchanged

Don, a minor, takes out a loan from a bank to get her own apartment and includes that fact in the loan application. THe bank makes the loan with the understand that its to be used for rent payments but doesnt moniotr how the moneys being psent (and thus fails to learn that don uses it to purchase dance lessons) the loan is?

not a necessary and don will not be obligated to repay it

Eve borrows $10,000 from First National Bank. Frank orally promises the bank that he will repay the loan if Eve does not. Frank's promise is

not enforceable.

Beth foes to Dr Carl for surgery. Carl says that Beth should be fully healed within a week. Beth is not healed within a week. With respect to breach of contract, Carl is

not liable, because the statement was an opinion

subpoena

order to appear at a particular time and place and provide testimony

National Steel, Inc., and Overland Transport Company enter into a contract. Superior Oil Corporation, which will indirectly benefit from the deal, is prevented from having rights under the contract by the principle of

privity

Describe: Americans with Disabilities Act of 1990 (ADA)

prohibits employers from discriminating on the basis of disability.

Ira persuades Jake to buy his horse by telling Ira that the horse rides "like the wind." Ira's statement is

puffery.

Describe: Fair Labor Standards Act

regulates wages and limits child labor.

Cure

right of seller to repair, adjust, replace nonconforming/defective goods; notify buyer promptly of intention to ______ and then do so within contract time for performance

Don wants to exchange his performance for Earl's promise. As consideration, performance

**not- may consist of an act only.** pg 222

The status of a third party is determined by?

the intent of the contracting parties

In which of the following cases is a contract between A and B binding?

A makes a mistake of material fact.

Building Restoration, Inc. ("BRI") enters into a contract to refurbish an old train depot for Casual Dining, Inc. to open as Eat Up! Restaurant. BRI completes all but a minor piece of the work promised in the contract. BRI's performance is a. absolute. b. complete. c. material. d. substantial.

C Corporation ("C-Corp") (Profits)

Distributions must be proportionate to stock ownership

Describe: Intentional Infliction of Emotional Distress

Employers who condone cruel treatment of their workers face liability under the tort of intentional infliction of emotional distress.

Rob agrees to sell to Sue, for $1,500, a remote parcel of land. They believe the land to be worthless, but Sue later sells it for $15,000. A court would

Enforce the contract.

Enforceable because Network must bear the responsibility for its mistake.

the law has rendered performance of the contract illegal.

False

Sole Proprietorship (Formation and Restrictions)

No formation exists so used by one who does not want to create an organization

List the major Union Security Issues

No-strikes/No Lockouts Clauses Closed Shop Union & Agency Shops Right To Work Laws Hot Cargo Clauses

Earl, driving while intoxicated, causes a car accident that results in the death of Frank. Earl is arrested and charged with a felony. A felony is a crime punishable by death or imprisonment for more than.

One year

The duty of loyalty that directors and officers owe to the corporation involves: a. the duty of directors and officers to act in their own best interests. b. the duty of directors and officers to subordinate their personal interests to the welfare of the corporation. c. the duty of directors and officers to use available funds to pay themselves before paying the corporation's debts. d. overseeing the activities of employees during their daily work.

Best Goods Inc. and Consumer Products Corporation plan to merge. The plan must be approved by

Their boards and their shareholders

A properly mailed acceptance takes effect when mailed, even if it never is received by the offeror.

True

T/F: Title VII of the Civil Rights Act permits employers to develop affirmative action plans.

True

T/F: Under ERISA, employers are not required to establish pension plans, but if they do, they must follow these federal rules.

True

T/F: Under FLSA, the wage provisions do not apply to managerial, administrative, or professional staff.

True

T/F: If an employer states that it is financially unable to meet the union's demands, the union is entitled to see records that support the claim.

True (Refusal to supply documents is a ULP!)

Cover (Buyer's (lessee's) remedies when seller (lessor) breaches):

a buyer more than likely will not only cancel but also pursue another remedy. The buyer goes out and finds substitute goods in an open market of another vendor. If buyer has to pay more then the buyer goes out to the seller for the difference between the cover contract price and the original contract price.

a partially integrated contract

Fine Services Company and Great Distributors, Inc., sign a written contract that does not involve a sale of goods. To be enforceable, this written contract must include

a statement of consideration

Nate tells Opal, "I might sell the skis that I bought last fall since I haven't used them and the skiing season is almost over." This is

a statement of future intent

Describe: Whipsaw Strike

a strike against one of a group of employers during a unions negotiation with them all (illegal)

Describe: Economic Strike

a strike intended to gain wages or benefits

Describe: Violent Strike

a strike that physically prevents workers from accessing a job site

Vicky makes a contract with Warren with the intent to benefit Alex. This is

a third party beneficiary contract.

Lois takes out a life insurance policy that names her son, Matt, as the beneficiary. This is

a third party intended beneficiary contract.

In Ed's suit against First National Bank, the discovery phase would in¬clude all of the following EXCEPT a. Ed's complaint. b. Ed's deposition. c. Ed's requests for First National's admissions. d. First National's replies to Ed's interrogatories

a. Ed's complaint.

Elmore offers to sell a Ford F-150 for $7,500 to Grace. Before Grace can respond, Elmore refers to the prices for similar Fords and says, "Forget it. I changed my mind." Elmore's offer was terminated by a. Elmore. b. Ford. c. Grace. d. no one—Elmore's offer is still open.

a. Elmore.

With a bill of lading, Cartage Common Carrier Company acknowledges possession of certain goods and contracts to deliver them. Cartage is a. a bailee. b. a buyer in the ordinary course of business. c. a good faith purchaser for value. d. an F,O,B.

a. a bailee.

Clay offers to pay Dot $50 for a golf lesson for Eula. They agree to meet the day after tomorrow to exchange the cash for the lesson. These parties have a. a bilateral contract. b. a trilateral contract. c. a unilateral contract. d. no contract.

a. a bilateral contract.

Desktop Company offers to sell eRetail, Inc., 1,000 computers for a $500,000, states that the offer will be open for six days, and asks for a response by fax. On the fourth day, eRetail sends an acceptance to Desktop via the mail, which is received on the sixth day. In this deal a. a contract is formed. b. no contract is formed, because Desktop asked for a response by fax. c. no contract is formed, because Desktop received the acceptance late. d. no contract is formed, because eRetail sent the acceptance late.

a. a contract is formed.

Lynn files a suit against Karl. Karl denies Lynn's charges and sets forth his own claim that Lynn breached their contract and owes Karl money for the breach. This is a. a counterclaim. b. a crosclaim. c. an affirmative defense. d. an irrelevant response.

a. a counterclaim.

Berkie's bicycle is damaged in an accident caused by Imogene. Berkie agrees not to sue Imogene if she will pay for the damage. If she fails to pay, Berkie can bring an action for breach of contract. This is a. a covenant not to sue. b. an accord and satisfaction. c. an illusory promise. d. a release.

a. a covenant not to sue.

Via the Internet, Rocky sabotages the computer system of Quik Chik'n Company, a food manufacturer, with the purpose of altering the levels of ingredients of the company's products so that consumers of the food become ill. Rocky is a. a cyberterrorist. b. a botnet. c. a virus. d. a worm.

a. a cyberterrorist.

In Ben v. City Car Dealership, a state supreme court held that a minor could cancel a con¬tract for the sale of a car. Now a trial court in the same state is decid¬ing Daphne v. Even Steven Auto Deals, Inc.,, a case with similar facts. Under the doctrine of stare de¬cisis, the trial court is likely to a. allow the minor the Daphne case to cancel the contract. b. disregard the Ben case. c. order the minor in the Daphne case to cancel the contract. d. require the minor in the Daphne case to fulfill the contract.

a. allow the minor the Daphne case to cancel the contract.

Lacy uses undue influence to induce Mina to sign a contract to invest her National Education Fund student loan money in Overseas Bank. Mina may a. avoid the contract. b. do nothing after Mina signs the contract. c. recover from National for a failure to monitor Mina's money. d. recover from Overseas for a failure to undo Lacy's influence.

a. avoid the contract.

Dave's Hobby Town and Eva's Yarn Shoppe are adjacent stores with adjoining parking lots. Dave offers Eva a discount on purchases from Dave's store if Eva will not tow the cars of Dave's customers who park in Eva's lot. Eva's forbearance from towing is legally sufficient consid¬eration a. because it is a promise of something of value. b. only if Dave's customers park in Eva's lot. c. only if Eva's customers cannot park in her lot because it is full. d. under no circumstances.

a. because it is a promise of something of value.

Joel contracts to hire Huong for one year to tend the orchids in his commercial greenhouse but reserves the right to cancel the employment on one month's notice at any time after Huong begins work. This promise is a. enforceable. b. illusory. c. unliquidated. d. unforeseen.

a. enforceable.

Best Sales, Inc., is the offeror and City Goods Corporation is the offeree under a unilateral sales contract in which Delta Products Company is also interested. Best is not notified of City's performance within a reasonable time. Best a. may treat the offer as having lapsed. b. must assume that City has started to perform. c. must contact City. d. must contract with Delta.

a. may treat the offer as having lapsed.

John is sales manager for Kleen 'N Brite Products, Inc. Compared to John's personal activities, his business activities most likely involve a. more complex ethical issues. b. no ethical issues. c. simpler ethical issues. d. the same ethical issues.

a. more complex ethical issues.

Gladstone regularly sends unsolicited commercial e-mail to hundreds of millions of recipients. This e-mail is prohibited or regulated in a. most states. b. only a few states. c. no state. d. California only.

a. most states.

Fitch agrees to assume Gandy's debt to Hybrid Seed Corporation. Fitch does not get any personal benefit for the agreement. To be enforceable, the prom¬ise a. must be in writ¬ing. b. must be in writ¬ing only if the debt is valued at $500 or more. c. must be in writing only if the debt will not be repaid within one year. d. need not be in writing.

a. must be in writ¬ing.

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. c. with respect to any dispute arising between them. d. with respect to this dispute only.

a. not at all.

A state trial court has before it Eagle Manufacturing Co. v. Four Feathers Products Corp., a case with no binding authority. The court can a. not refuse to decide the Eagle case. b. postpone deciding Eagle indefinitely. c. postpone deciding Eagle until there is binding authority. d. refuse to decide Eagle.

a. not refuse to decide the Eagle case.

Roc buys a farm from Steve, who claims that it would be a prime site for a housing subdivision. Roc later learns that the law does not permit the land to be used for housing. Roc may a. not rescind the contract. b. rescind the contract only if Roc did not know the law before the deal. c. rescind the contract only if Steve knew about the law before the deal. d. rescind the contract only if the law is not common knowledge.

a. not rescind the contract.

A common ethical dilemma faced by the management of General Holdings Corporation involves the effect that its decision will have on a. one group as opposed to another. b. the firm's competitors. c. the government. d. the U.S. Chamber of Commerce.

a. one group as opposed to another.

The legislature of the state of Missouri enacts a new statute that sets stan¬dards for the liability of businesses selling defective products. This statute applies a. only in Missouri. b. only in Missouri and its border states. c. in all states. d. in all states but only to matters not covered by other states' laws.

a. only in Missouri.

Sierra digitally copies "Rampage" and other recent films without the authorization of the owners and transfers those copies freely to others via file-sharing Web sites. This is a. piracy. b. spamming. c. phishing. d. vishing

a. piracy.

John promises to buy Tommy's car for $6,000. This is an example of a(n)

absolute promise. EXPLANATION: This promise is absolute because it must be done or John will have breached the contract. There is no condition laid out that allows him to avoid performance.

Evans sale of rights he has under a contract with federated retail inc is

an assignment

Eagle Company sells new and used motorcycles. Some of the motorcycles are held on consignment, including six consigned by Fine Cycles, Inc. While the Fine cycles are in Eagle's possession, title to them is held by a. Eagle and Fine jointly. b. Eagle only. c. Eagle's creditors only. d. Fine only.

b. Eagle only

The federal government and the state governments constitute the U.S. le¬gal system. This system is based on the legal system of a. Ancient Greece. b. England. c. France. d. the natural law school.

b. England.

Fine Material Corporation in New Jersey sells fifty tons of fabric to Great Clothing, Inc., in Ohio, F.O.B. New Jersey. The cost of transporting the fabric to Ohio will be paid by a. Fine Material. b. Great Clothing. c. New Jersey. d. Ohio.

b. Great Clothing.

Mona offers Ned, a building inspector, money to overlook the violations in her new warehouse. Ned accepts the money and overlooks the viola¬tions. Mona is charged with the crime of bribery. The crime occurred when a. Mona decided to offer the bribe. b. Mona offered the bribe. c. Ned accepted the bribe. d. Ned overlooked the violations.

b. Mona offered the bribe.

Minka uses her computer to secretly install software on hundreds of personal computers without their owners' knowledge. Each of the computers that Minka has appropriated and installed software on is a. a hacker. b. a bot. c. a botnet. d. a worm.

b. a bot.

Dom, an EZ Baked Goods salesperson, follows Flora, a salesperson for Goody Pastries, Inc., as she attempts to make sales to food stores. Dom solicits each of Flora's customers. Dom is most likely liable for wrongful inter¬ference with a. a bargaining relationship. b. a business relationship. c. a contractual relationship. d. a customer relationship.

b. a business relationship.

Tomato Farms (TF) offers to sell United Grocers, Inc., a boxcar load of tomatoes. The offer is sent via fax. An acceptance is re¬quired urgently. It would be most reasonable for United to accept via a. a fax, a letter, or a phone call to TF within two weeks. b. a fax sent to TF as soon as the offer is received. c. a letter mailed to TF within two days. d. a phone call to TF within five business days.

b. a fax sent to TF as soon as the offer is received.

Odell and Poppy sign a contract for the sale of Odell's Pizza Parlor to Poppy. The parties intend their written contract to be a final statement of most, but not all, of the terms of their agreement—Odell must first buy the building from Quin, after which Odell and Poppy will negotiate a final price. Poppy later disputes some of the provisions of the deal with Odell. If the dispute results in litigation, a court will most likely admit evidence of a. ambiguous additional terms. b. consistent additional terms. c. contradictory additional terms. d. fraudulent additional terms.

b. consistent additional terms.

A Minnesota state statute restricts certain kinds of advertising to protect consumers from being misled. A court would likely hold this statute to be a. an unconstitutional restriction of speech. b. constitutional under the First Amendment. c. justified by the need to protect individual rights. d. necessary to protect national interests.

b. constitutional under the First Amendment.

Serene 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 against the city, a court would likely hold the ordinance to be a. an unconstitutional restriction of speech. b. constitutional under the First Amendment. c. justified by the need to protect individual rights. d. necessary to protect national interests.

b. constitutional under the First Amendment.

As a judge, Potter applies common law rules. These rules develop from a. administrative regulations. b. court decisions. c. federal and state statutes. d. proposed uniform laws.

b. court decisions.

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.

b. emancipation.

Cut-Rate Construction Company (CCC) begins building a restaurant for Diners Restaurants, Inc., but after two months demands an extra $100,000. Diners agrees to pay. If CCC offers, as a reason for the extra $100,000, that extraordinary unforeseen difficulties will add consid¬erable cost to the project, the agreement is a. enforceable as an accord and satisfaction. b. enforceable because of unforeseen difficulties. c. unenforceable as an illusory promise. d. unenforceable due to the preexisting duty rule.

b. enforceable because of unforeseen difficulties.

Jill contracts to sell Ken her MP3 player for $50. This contract will be fully discharged when Jill and Ken a. agree to sign a bill of sale. b. exchange the player for the $50. c. sign a receipt. d. shake hands and go their separate ways.

b. exchange the player for the $50.

XL Retail Sales, Inc., promises its head buyer Yancey and other salaried employees a bonus at the end of the year if management thinks that the circumstances indicate "a job well done." This promise is a. enforce¬able. b. unenforce¬able because it is not supported by consideration. c. unenforce¬able because the dollar amount is missing. d. unenforce¬able because the employees are paid salaries.

b. unenforce¬able because it is not supported by consideration.

A contract between Lou and Mike requires a transfer of stolen goods for counterfeit currency. This contract is a. enforceable. b. void. c. voidable at the option of either party. d. voidable at the option of the party having less bargaining power.

b. void.

Federico, the president of Gems Retail Corporation, claims that certain ac¬tions by the federal government and the state of New Mexico infringe on rights guar¬anteed by the Bill of Rights. Most of these rights limit a. neither New Mexico nor the federal government. b. the federal government only. c. New Mexico and the federal government. d. New Mexico only.

c. New Mexico and the federal government.

Office Corporation (OC) orders five inkjet printers from Print Products, Inc. (PPI), to be delivered by PPI. Before PPI's truck arrives with the goods, OC tells PPI it will not pay. The printers are destroyed in transit. The loss is suffered by a. OC and PPI equally. b. OC only. c. OC to the extent of a deficiency in PPI's insurance coverage only. d. PPI only.

c. OC to the extent of a deficiency in PPI's insurance coverage only.

Vernon contracts with Whitney to provide concierge services to Yerba Buena Hotel. This is a. a delegation. b. an assignment. c. a third party beneficiary contract. d. a novation.

c. a third party beneficiary contract.

On Monday, Neil tells Outdoor Landscaping, Inc., that he will pay Outdoor $500 if a variety of tasks are completed by Friday. On Wednesday, when Outdoor is more than half done with the work, Neil says that he has changed his mind. These parties had a. an expired contract when Neil said that he had changed his mind. b. a quasi contract when Neil said that he would pay for certain work. c. a unilateral contract as soon as Outdoor began to perform. d. no contract.

c. a unilateral contract as soon as Outdoor began to perform.

Metro City and Nu Hi-way Construction Company enter into a construction contract that includes six pages of detailed estimates. Later Metro, whose engineer compiled the figures, discovers that some numbers were added incorrectly, but Nu refuses to make changes. Metro may a. not rescind the contract. b. rescind the contract on the basis of fraud. c. rescind the contract on the basis of mistake. d. rescind the contract on the basis of economic duress.

c. rescind the contract on the basis of mistake.

On May 1, City Auto & Truck Sales agrees to sell a car to Dino. Five days later, Dino refuses delivery and cancels the contract. City is entitled to a. force Dino to accept the car. b. recover any damages from Dino but not resell the car. c. resell the car and recover any damages from Dino. d. resell the car but not recover any damages from Dino.

c. resell the car and recover any damages from Dino.

Omar sends Nell an e-mail ad touting software that will cloak its user in "the anonymity of the Internet." Nell pays Omar for the software, which is never delivered to her. This is online a. auction fraud. b. puffery. c. retail fraud. d. frustration but not fraud.

c. retail fraud.

Sonic Board Corporation files a suit against Custom Fabricators Company, claiming that the consideration for their contract is inadequate. The court will most likely not examine the adequacy of the considera¬tion if a. there is a large disparity in the amount of consideration exchanged. b. Sonic asserts that there is inadequate consideration. c. something of value passed between the parties. d. the consideration is worth less than $100.

c. something of value passed between the parties.

Sharon, the human resources director for Tempo Corporation, at¬tempts to comply with the law in dealing with applicants and employ¬ees. One of the challenges Sharon faces is that the legality of an action is a. always clear. b. never clear. c. sometimes clear. d. usually clear.

c. sometimes clear.

Beachside Pools, Inc., agrees to build a swimming pool for Candy, but fails to build it according to the contract specifications. Candy hires Do-We Fix-It Company to finish the project. Candy may recover from Beachside a. the contract price less costs of materials and labor. b. the contract price. c. the costs needed to complete construction. d. profits plus the costs incurred up to the time of the breach.

c. the costs needed to complete construction.

Oklahoma enacts a law requiring all businesses in the state to donate 10 per¬cent of their profits to Protestant churches that provide certain services to persons whose income is below the poverty level. PriceLess Stores files a suit to block the law's enforcement. The court would likely hold that this law violates a. no clause in the U.S. Constitution. b. the establishment clause. c. the free exercise clause. d. the supremacy clause.

c. the free exercise clause.

Quinn enters into a series of agreements with Reba involving a sale of a Suite Dreams Motel, including the land, building, furnishings, shares of stock in Suite Dreams Company, and a contract with Trudy to create an ad campaign. Reba suspects that Quinn may be misrepresenting the facts. The UCC Statute of Frauds governs the sale of a. any of the property evidenced by a writing. b. any of the property that may involve fraud. c. the furnishings priced at $500 or more. d. the land and the building.

c. the furnishings priced at $500 or more.

In making business decisions, Glenda, personnel manager for HVAC Maintenance, Inc., applies his belief that all persons have fundamental rights. This is a. a religious rule. b. the categorical imperative. c. the principle of rights. d. utilitarianism.

c. the principle of rights.

Java Cafes, Inc., and Kaffe Import Corporation dispute a term in their contract. If Java and Kaffe have a long-standing business relationship that they would like to continue, a preferred method of set¬tling their dispute may be mediation because a. the case will be heard by a mini-jury. b. the dispute will eventually go to trial. c. the process is not adversarial. d. the resolution of the dispute will be decided an expert

c. the process is not adversarial.

A Rhode Island state statute imposes a prison term, without a trial, on all street vendors who operate in certain areas. A court would likely hold this statute to be a. constitutional under the due process clause. b. constitutional under the equal protection clause. c. unconstitutional under the due process clause. d. unconstitutional under the equal protection clause.

c. unconstitutional under the due process clause.

Sandy, a businessperson, is convicted of RICO offenses. Sandy's penalties may include

closing down a business, forfeiting its assets, or selling it.

Jack promises to buy Kris's computer for $400. Jack is a. an executor. b. an offeree. c. a promisee. d. a promisor.

d. a promisor.

Toni files a suit against Universal Media Corporation for defamation. Actual malice must be shown for recovery of damages if Toni is a. a corporate officer. b. a non-employee. c. a private individual. d. a public figure.

d. a public figure.

Nate tells Opal, "I might sell the skis that I bought last fall since I haven't used them and the skiing season is almost over." This is a. an acceptance of an offer. b. an invitation to accept an offer. c. an offer. d. a statement of future intent.

d. a statement of future intent.

Ula wants to initiate a suit against Valley Farms by filing a complaint. The complaint should include a. an explanation to refute any defense the defendant might assert. b. a motion for summary judgment. c. a motion to dismiss. d. a statement of the facts necessary to show Ula is entitled to relief

d. a statement of the facts necessary to show Ula is entitled to relief.

Intoxicated, Clio agrees to sell her restaurant, Diners Café, to Evan for half of its real market value. This deal is most likely voidable if Clio a. appears intoxicated to Evan. b. disaffirms the contract after becoming sober. c. is so intoxicated as to have no memory of the deal. d. is so intoxicated as to lack comprehension of the legal consequences.

d. is so intoxicated as to lack comprehension of the legal consequences.

Bret runs an illegal business and pays Cal, a law enforcement officer, not to interfere. The payments are discovered. Bret and Cal are sent to prison. Bret can successfully sue Cal for the return of a. all of the money paid to Cal. b. only the money paid to Cal that has been spent. c. only the money paid to Cal that has not been spent. d. none of the choices.

d. none of the choices.

Debit & Credit Accounting Services and Brickwork Construction Company negotiate a con¬tract. Terms in the contract that are the subject of separate negotiation will be con¬sidered subordinate to a. standardized terms. b. terms that can be understood only by lawyers and judges. c. terms that are not negotiated separately. d. none of the choices.

d. none of the choices.

Garden & Yard Landscaping enters into an oral contract with Penelope under which she agrees to work on a Garden & Yard project on Valley Country Club's golf course for sixteen months. The con¬tract is enforceable by a. Garden & Yard. b. Penelope. c. any interested third party, such as Valley Country Club. d. none of the choices. Q

d. none of the choices.

Tanya attempts to free herself from the duties of her contract with Drew by telling Drew to find someone else to perform them. This is a. a delegation. b. an assignment. c. a third party beneficiary contract. d. none of the choices.

d. none of the choices.

Timber, Inc., and Wood Corporation enter into an oral contract for the sale of a lumber mill and the land on which it is situated from Timber to Wood. Under the Statute of Frauds, this contract is enforceable by a. the seller. b. the buyer. c. any interested third party, such as the mortgagee or title company. d. none of the choices.

d. none of the choices.

Nero and Oona negotiate a contract. Nero prints out a hard copy to review before both parties sign the electronic form of the contract. Neither party signs the hard copy. Under the Electronic Signatures in Global and National Commerce Act (E-SIGN Act), the signatures can a. be denied effect because they are in electronic form. b. be denied effect because Nero has not signed a hard copy. c. be denied effect because Oona has not signed a hard copy. d. not be denied effect because they are in electronic form.

d. not be denied effect because they are in electronic form.

A contract between E-Debits, Inc., and First Credit Corporation includes a provision excluding liability as a result of fraud. This provision is a. enforceable because the parties are protected from liability. b. enforceable because the parties consented to it. c. enforceable if the parties have equal bargaining power. d. not enforceable.

d. not enforceable.

Nano Corporation offers to sell a robotic device to Opal Assembly, Inc., but mistakenly transposes some of the digits in the price so that $15,400 appears in the offer as $14,500. Opal accepts the written offer. Nano's best defense against enforcement of the contract is that Opal knew a. a bilateral mistake supports the cancellation of a contract. b. a mistake of value supports the cancellation of a contract. c. a unilateral mistake supports the cancellation of a contract. d. the price was below the prices of comparable devices.

d. the price was below the prices of comparable devices.

Over the course of a year, Retail Marketers, Inc., sells goods from its inventory and one of its warehouses. In exchange, Retail receives checks and other items that substitute for cash, which Retail uses to repay a loan from Savings Bank. Article 2 of the UCC governs a. the checks. b. the payment of the loan. c. the sale of the buildings. d. the sale of the goods.

d. the sale of the goods.

Jake is charged with embezzlement. Embezzlement is not robbery because embezzlement may be committed without a. a criminal act. b. a criminal intent. c. taking property from its owner. d. the use of force or fear

d. the use of force or fear.

Commercial Impracticability

delay in delivery/nondelivery in whole isn't breach hen performance made impracticable by occurrence of contingency the nonoccurrence of which was a basic assumption on which contract was made (seller should notify buyer ASAP)

Describe: Taft-Hartley Act (Labor-Management Relations Act) (1947)

designed to curb union abuses: • prohibits union abuses such as coercing employees to join. • outlaws secondary boycotts. (amended Section 8 of NLRA to outlaw certain unfair labor practices by unions)

An offer is a promise of commitment to?

do, or refrain from doing, some specified thing in the future

Olga, a minor, signs a contract to buy a computer from Phil, the owner of Quality Computer Store. Olga's right to disaffirm the contract

does not change the fact that Phil is bound by the contract

Cosumer sales inc, send its catelouge to carol and includes a "personalized" letter inviting her to buy an item in the catalgue at the advertised place. This

does not consitiute an offer

Zipp Co offers to sell "from one to one million zippers for 1 dollar each" to wide load inc and specifies that wide load inc should "state the desired number in the acceptence". A contract

does not wxit, unless Wide load specifices the number of zippers that it wishes to purchases

enforceable because of the unforeseen difficulties

Barb and Dale enter into an oral contract for sale of bars 100 dollar cycle. Before Dale takes possession, under the statue of grauds, this contract is?

enforceable by another party

Carol and dan enter into an oral contract for carols sales to dan of a computer monitor for 400. Before dan takes possession of the monitor, this conract is?

enforceable by either party

Rob and Bob, both merchants, orally agree to a contract for the sale of $5000 of accessories. Bob, the buyer, sends to Rob, the seller, a written confirmation of the sale, which is sufficient against Bob under the statute of frauds and which Bob signs. Rob fails to perform the contract and doesn't ship out the goods. Bob sues. This contract is?

enforceable; even without Robs signature because both parties are merchants

The state of NY enacts a usury statute. The prupose is to?

establish a maximum rate of interest that may be charged for loans

Pitts, whose family owns and operates a farm, agrees to sell Armstrong ten bushels of strawberries. Pitts dies before the strawberries are delivered to Armstrong. This

has no effect on the obligations of both parties

Pitts, whose family owns and operates a farm, agrees to sell Armstrong ten bushels of strawberries. Pitts dies before the strawberries are delivered to Armstrong. This

has no effect on the obligations of both parties.

If you do not voluntarily consent to a contract, you may?

rescind or cancel the contract

The "duo tones" rock group assigns its payment under a performance contract to the costume shop, which supplied group with outfts and to which the group owes a great sum of money. Under this arrangement, the Duo Tones rock group is?

the assignor

Mark induces claude to sign a contract by putting a gun to his head. The contract is void if?

under any circumstances

Duress

►Use of threats, blackmail, or extortion to force / induce a party to enter into a K. ►Duress is both a defense to a K (i.e. allow K to be voidable by the innocent party) and allows rescission of the K by the innocent party. ►The threat to take legal action against someone ordinarily is not duress.

"Piercing the corporate veil" occurs when a court: a. disregards the corporate entity and holds the shareholders personally liable. b. disregards the corporate entity and holds corporate creditors personally liable. c. imposes liability on an alleged corporation as if it were an actual corporation. d. decides that a corporation has de facto status and not de jure status

Jack, a minor, takes out an automobile insurance policy and pays a $1,000 premium.If Jack disaffirms the contract, he can most likely recover

$1,000

List who that may receive benefits from Social Security

* Retired * Disabled * Temporarily Unemployed * Spouses and children of disabled or deceased workers

City Construction Corporation substantially performs its contract with Downtown Apartments, Inc. Downtown is entitled to

***NOT nothing more or specific performance. Response Feedback: Learning Objective 1 & 2 - Textbook Page 280

Performance Obligations

1) Duties and obligations include those specified by agreement, by custom, and by UCC, UCC imposes duty of good faith 2) If contract leaves open some particulars for performance, parties must exercise good faith and commercial reasonableness when later specifying details 3) Basic obligation of seller is to transfer and deliver conforming goods 4) Basic obligation of buyer is to accept and pay for conforming goods in accordance with contract

The American Goods Inc. is a corporation. Responsibility for overall management is entrusted to the

Board of Directors.

Consequential Damages

Lost profits.

An offer of a reward for the arrest and conviction of a criminal is an example of: A) a unilateral contract. B) a bilateral contract. C) a quasi contract. D) a formal contract.

a unilateral contract.

Trudy and Uri enter into a contract for the sale of Trudy's house for which Uri agrees to pay her $250,000. Uri wants to transfer his right to the ownership of the house to Val, his niece. This transfer generally a. cannot be prohibited. b. cannot be allowed. c. can be prevented. d. can be circumvented.

a. cannot be prohibited.

The transfer of contract rights to a 3rd person is known as?

an assignment

Development Associates (DA) agrees to buy five acres of land from Eastside Properties for $15,000. Eastside fails to go through with the deal on the agreed date, when the market price of the land is $17,000. DA may recover a. $17,000. b. $15,000. c. $2,000. d. $0.

c. $2,000.

Administrative Law

consists of the substantive and procedural rules created by these bodies

cover

damages= diff between contract price and cost of _____ + incidental/consequential damages less expenses saved as result of breach

interpretive

explain how the agency views the meaning of the statutes

An obligation is enforceable only if it is supported by past consideration.

false

Delivery via Carrier

in carrier contracts, seller fulfills obligation to deliver goods thru either shipment contract or destination contract

Eagle Oil Company and Federated Refining, Inc., attempt to enter into a contract in electronic form. Under the Electronic Signatures in Global and National Commerce (E-SIGN) Act, solely because this contract is in electronic form, it

may not be denied legal effect.

If a minor breach is cured or fixed, the non-breaching party?

must resume performance of her contractual duties

George and martha enter into an oral contract for a sale of georges lumber mill. Before martha takes possesion, under the statute of fraud this contract is

no enforceable

Paul makes an honest, but erroneous statement that misrepresents a material fact in a contractual transactions with quin. Pauls guilty of

nonfraudulent misrepresentation

Jane promises to pay her secertary 1000 in consideration of the services the secertary provided over the years. Jane later reneges on the promise. Jane is?

not liabale because the considerations in the past

Harry goes to dr.power for surgery. powers says that harry should be fully healed within a week, Harry doesnt heal within a week, Dr.power...

not liable for breach of contract, because the statement was an opinion

Quality Vechicles, Inc., offers to sell a truck to Regional Delivery Company. Before accepting the offer, Regional learns that the truck as been sold to State Trucking, Inc. Quality is

not liable, because the sale revoked the offer to Regional

List and briefly describe the types of Wrongful Discharge claims related to Public Policy

o Refusing to Violate the Law - employees may not be discharged for refusing to break the law; o Exercising a Legal Right - may not discharge a worker for exercising a legal right if that right supports public policy o Performing a Legal Duty - Courts have consistently held that an employee may not be fired for serving on a jury. o Whistle Blowing - employees who disclose illegal behavior on the part of their employer.

Macro Marketing, Inc., and National Food Corporation (NFC) discuss the terms of a contract. Macro then faxes NFC a memo on Macro's letterhead that summarizes the items on which they agreed, including a two-year term. NFC begins to perform, but Macro refuses to pay. The transaction between Marco and NFC falls within the Statue of Frauds'

one-year rule

Elin decides to sell her collection of celebrity memorabilia in an auction "with reserve." If Elin changes her mind, she can withdraw her collection

only before the auctioneer announces that the items are sold

Jake contracts to develop a marketing strategy for Delta Candy Company for $1,500. This contract will, like most contracts, be discharged by

performance.

prevail because there was no mutual assent

An oral contract for the sale of goods may be enforceable if the goods are?

priced at $499.99 or less

Describe: Norris-LaGuardia Act

prohibited federal court injunctions in nonviolent labor disputes.

Describe: Hot Cargo Clause

prohibits an employer from doing business with a specified company.

Define: Wrongful Discharge

prohibits an employer from firing a worker for a bad reason.

What is the purpose of Public Policy as related to Wrongful Discharge

prohibits an employer from firing a worker for a reason that violates basic social rights, duties, or responsibilities.

Describe: Age Discrimination in Employment Act of 1967 (ADEA)

prohibits discrimination against employees or job applicants who are at least 40 years old.

Describe: Enforcement Clauses of the Collective Bargaining Agreement

provide for their own enforcement, typically through grievance-arbitration.

Describe: Federal Unemployment Tax Act (FUTA)

provides support to the unemployed (as part of social security system)

Describe: Consolidated Omnibus Budget Reconciliation Act (COBRA)

provides that former employees must be allowed to continue their health insurance for 18 months after leaving their job, but they must pay for the costs themselves. (The catch is that employees must pay for it themselves, up to 102 percent of the cost. COBRA applies to any company with 20 or more workers.)

informal rule making

publish proposal in Federal Register, comments and suggestions can be submitted, publish final rule in Federal Register

formal rule making

publish proposal in Federal Register, public hearing, publish final rule in Federal Register

Ira persuades Jake to buy his sailboat by telling Ira that his boat sails "like the wind". Iras statement is?

puffery

Consequential Damages

reasonably foreseeable losses to a nonbreaching party that go beyond expectation damages. Ex as loss of profits. TEST: 1) if they were the natural and probable consequences of breach, 2) OR if they were "in the contemplation of the parties at the time the contract was made," 3) OR were otherwise foreseeable.

New Cell Phone Company offers to buy a laser printer, with a case of paper and an extra cartridge, from Office Products, Inc. (OPI), for $200. Paul, OPI's representative, says, "okay, but no paper and no extra cartridge." Paul has

rejected the offer and made a counter offer

Amber offers to buy a laser printer, with a case of paper and an extra cartridge, from Best Office Products for $200. Cris, Best's representative, says, "OK, but no paper and no extra cartridge." Cris has

rejected the offer and made a counteroffer.

Describe: Landrum-Griffin Act or Labor-Management Reporting and Disclosure Act (LMRDA) (1959)

requires union leadership to make certain financial disclosures and guarantees free speech and fair elections within a union.

Partial Performance

seller required to allocate in fair/reasonable manner any remaining production/deliveries among those to whom it is contractually obligated to deliver goods, allocation may take into account regular customers

Fine mining Corporation offers to sell Great Foundries, Inc., seven ons of aluminum. Great Foundries sends an acceptance via Fine Mining's authorized mode of communication. This acceptance is effective when it is

sent

Al and ben enter into a contract for the sale of a wearhouse. Al promises to vacate the proerpty, and ben promises to pay on july 1. later, Al promises to take sue out for lunch. The common law of contracts assures these parties of compliance with?

some of the promises

E-Business, Inc. files a suit against Federated Financial Corporation, asking the court to enforce an oral contract between the parties under the doctrine of promissory estoppel. This doctrine applies in

some states

Quality Steel Corporation files a suit against Rite Tool Company, claiming that the consideration of their contract is inadequate. The court will most likely not examine the adequacy of the consideration if

something of value passed between the parties

Todd sues Owen for fraud. Todd must prove that he suffered an injury

to recover damages.

List the two primary tasks of the NLRB.

• Representation. The Board decides whether a particular union is entitled to represent a group of employees. • Unfair Labor Practices. The Board adjudicates claims by either the employer or workers that the other side has committed a ULP.

Development Associates (DA) agrees to buy five acres of land from Eagle Properties for $15,000. Eagle fails to go through with the deal on the agreed date, when the market price of the land is $17,000. DA may recover

$2,000.

Century Properties. Inc., and Dandy Capital Corporation enter into a con¬tract for a sale of land. To be enforceable, the contract must be in writing if the land is valued at

$50, $500, or $5,000

Terminate an Agency Relationship

1. Lapse of Time 2. Mutual Agreement 3. Terminate Provision- either party or both parties terminate the agreement after a reasonable time as provided in the agreement 4. Purpose Achieved 5. Occurrence of "Trigger Event"

First Financial provides capital to other firms to expand operations. Questions of what is ethical involved to the extent of which First Financial has ethical duties beyond the duties mandated by law.

An ethical duty goes beyond those duties that are mandated by the law

buyer

Basic obligation of _____ is to accept and pay for conforming goods in accordance with contract

Defenses against non-breaching party's suit (where formation and enforceability are not at issue)

Equitable defense like: laches or unclean hands

Jack sells Jim a used car that Jack falsely described as having been driven only 12,000 miles. Fraud has occurred if:

Jim relied upon Jack's statement.

Ben wrongfully takes an unopened carton from a City Warehouse loading dock, puts the carton in his car, and drives away. A person who wrongfully or fraudulently takes and carries away another's personal property is guilty of

Larceny

Loyal Engineers, Inc., needs a drill to continue its operations and orders one for $3,000 from Mining Supplies Company. Loyal tells Mining that it must receive the drill by Tuesday or it will lose $10,000. Mining ships the drill late. Loyal can recover

Page 288...**not 'nothing'**

Fred and Diane want to market a new type of computer game. They must form a corporation that avoids income tax at the corporate level. This type of corporation is known as an

S-Corporation.

T/F: The FLSA prohibits "oppressive child labor," which means that children under 14 may work only in agriculture and entertainment.

True (Note - children older than 14 have varying restrictions until they reach the age of majority)

Sole Proprietorship (Liability)

Unlimited liability as the business proprietor is personally liable for all business debts

General Partnership (Liability)

Unlimited liability as the partners jointly and severally liable for the losses of the business no matter when enter the partnership

Control

Where the principal authorizes the agent to act (i.e. client - attorney; client - real estate agent) or by status the agent is authorized to act on behalf of the principal (i.e. corporation - CEO); Control over the time, manner, and method of executing the work

Glen falsely accuses Hu of stealing from Island Tours, Inc., their employer. Glen's statement is defamatory only if a. a third party hears it. b. Hu has not been caught. c. the statement is puffery. d. the statement is true.

a. a third party hears it.

Noddy threatens physical harm to force Odell to sell his business, Pasta Palace, Inc., to Noddy for a below-market price. This is a. duress. b. fraud. c. puffery. d. undue influence.

a. duress.

Demi promises to buy a house from Caleb, who promises to vacate the prop¬erty on June 1. If these promises are in writing, they are most likely a. enforceable. b. unenforceable. c. void. d. voidable.

a. enforceable.

Replevin

action to recover specific goods in the hands of a party who is wrongfully withholding them from theother party, can do this if seller repudiated/breached contract

investigation

agencies have the power to convince parties to reach a settlement via consent order (binding decision) but has the authority to render an order after hearing

Smitty, driving while intoxicated, causes a car accident that results in the death of Tiffany. Smitty is arrested and charged with a felony. A felony is a crime punishable by death or imprisonment for a. any period of time. b. more than one year. c. more than six months. d. more than ten days.

b. more than one year.

Doctors Medical Clinic orders 1,000 bandages from Emergency Supplies Company but fails to specify the sizes. The bandages are delivered in an assortment of sizes. Doctors Medical Clinic may a. accept the bandages "as is" only. b. accept the bandages "as is" or reject the entire shipment only. c. accept only the bandages that it wants and reject the rest. d. reject the entire shipment only.

c. accept only the bandages that it wants and reject the rest.

Rikki and Sid enter into a sales contract. With respect to the specific contractual provisions set out in the UCC, Rikki and Sid may a. agree to different terms only to a reasonable extent. b. agree to different terms unless they "get caught." c. agree to whatever terms they wish. d. not agree to different terms.

c. agree to whatever terms they wish.

National Consumer Goods Corporation and Paula Purchaser agree to re¬solve their dispute in arbitration. The arbitrator's decision is called a. a conclusion of law. b. a finding of fact. c. an award. d. a verdict.

c. an award.

In business deals, Felipe, the chief executive officer of Glazed Donuts, Inc., follows duty-based ethical standards. These are most likely derived from a. a corporate ethics code. b. a cost-benefit analysis. c. philosophical reasoning. d. the law.

c. philosophical reasoning.

eneral Contractors, Inc., contracts to build an office building for RP Properties Company. If General substantially performs, RP is entitled to

damages.

Bob contracts with Ace Plumbing, Inc., to pay $700 over six-month period for its services. After Ace performs, they sign an accord, in which Bob promises to pay Ace $500 next week in lieu of the $700. Bob does not pay the $500. Ace can bing an action against Bob based on

either the accord or the original contract.

An offer may not be revoked before it is accepted.

false

Anticipatory repudiation discharges a contract.

false

Only a mistake of fact allows a contract to be avoided.

false

If no termination date is specified for an offer, the offer will remain open:

for a reasonable time.

Procedural

govern the internal operations of the agency

Joy signs a contract with Kent, an unlicensed physician, to perform a medical procedure. This contract is enforceable by

no one

List four aspects of Employee Privacy

* Off-Duty Conduct * Alcohol and Drug Testing * Lie Detector Tests * Electronic Monitoring of the Workplace

Exceptions to Perfect Tender Rule

1) Agreement of Parties 2) Cure 3) Substitution of Carriers 4) Commercial Impracticability 5) Destruction of Identified Goods 6) Assurance and Cooperation

limitations on agency powers

1. political limitations 2. statutory limitations 3. judicial limitations 4. informal limitations

A contract for a sale of an apartment complex from Unique Properties, Inc. to Variety Investments Corporation contains an erroneous legal description, which neither party noticed. Both parties desire to continue with the contract. The most appropriate remedy for these parties is a. damages. b. reformation. c. rescission. d. specific performance

b. Partners must act consistently with the obligations of good faith and fair dealing.

A partner's fiduciary duty includes which of the following? a. Undue care. b. Duties of loyalty and care. c. Proximate cause. d. That the partner always has to assume a management role.

Alan, a representative of Beta Services, Inc., make an offer to Carol, the owner of Delta Products, Inc. The offer is effective even if

Alan secretly does not intend to be bound by the offer

Governance of Franchises

Governed by contract law, agency law, and federal and state regulatory laws

Ace Tool Corporation and Best Hardware Company combine so that all that remains after the papers have been signed is Ace Tool Corporation. This is a

Merger.

Piercing the Corporate Veil

Occurs when a court, in the interest of justice or fairness, holds shareholders personally liable for corporate acts.

Cathy causes a disturbance at Diners Cafe. She is arrested and charged with disorderly conduct, a misdemeanor. A misdemeanor is a crime punishable by imprisonment up to

One year

T/F: In Agency Shops, worker may insist on paying only the percentage of dues that is devoted to collective bargaining, contract administration, and grievances.

True

a. Of this list, the insurance company is most likely to qualify as an accredited investor or "sophisticated" investor.

Which of the following is most likely to be an accredited investor? a. an insurance company b. an hourly wage shipyard worker c. a family farmer with a small 40 acre farm in rural Georgia d. a recent college graduate from a working class family and with moderate economic means

b. This statement is not a valid offer because the terms of the statement from Yvonne to Zach are not definite, and one of the three elements for an offer is definitiveness of terms.

Yvonne asks Zach, "Do you want to buy one of my fishing rods?" This is a. a valid offer. b. not a valid offer because the terms are not definite. c. not a valid offer because Yvonne did not state an intent. d. not a valid offer because Zach did not respond.

Situation in which the seller is a merchant under UCC, article 2?

Zompa Incem toy manufacturer, contracted to sell dolls to TOn TOn department store

Timeliness & reason

_________ & _______ for rejection are required -- reasonable amount of time, seasonable notify seller, buyer must designate defects

Consumer Goods, Inc., and Delta Distribution, Inc., sign a written contract for a sale of goods. To be enforceable, this written contract must include

a quantity term

Adam is charged with the commission of a crime. To find criminal liability, most crimes require

a specified state of mind and the performance of a prohibited act.

Lana applies for a firefighter's job with Metro City, which responds with a letter setting an appointment for a medical exam. The letter also states that it is "a conditional employment offer." Based on the court's reasoning in Case 7.1, Ardito v. City of Providence, this letter is

a unilateral contract that Lana can accept by passing the exam.

Nano Corporation offers to sell a robotic device to Onyx Assembly, Inc., but mistakenly transposes some of the digits in the price so that $15,400 appears in the offer as $14,500. Onyx accepts the written offer. Onyx's best argument in favor of enforcement of the contract is that

a unilateral mistake does not afford relief from a contract.

Describe: Section 9 of NLRA

a validly recognized union is the exclusive representative of the employees

a written contract

Brad defends against a breach-of-contract suit by College Credit Corporation by claiming that their deal—a student loan accruing interest at a certain rate and payable beginning on a certain date—was unfair because the consideration for their contract was inadequate. "Adequacy" of consideration refers to a. "how much" consideration is given. b. legally sufficient value in the eyes of the law. c. the intangible value to a contracting party of a thing exchanged. d. the substantiality of the consideration exchanged.

a. "how much" consideration is given.

Lyle, vice-president of sales for Mi-T Electric, Inc., adheres to Judeo-Christian relig¬ious ethical standards. With respect to their application, these standards are a. absolute. b. analytical. c. discretionary. d. utilitarian.

a. absolute

Jaime operates Internet gambling sites in countries where this is legal. Jaime accepts e-payments at the sites and pays winnings through foreign-based banks. U.S. federal law bars a. using e-payments at online gambling sites. b. placing bets in countries where Internet gambling is legal. c. paying gambling winnings through foreign-based banks. d. none of the choices.

a. using e-payments at online gambling sites.

ABC reality co and fine investiments inc enter into a contract for a sale of land. To be enforceable, the contract must be in writting if the land is valued at?

above 5,500

Optimal Sales Corporation plans to move to a new office. Optimal offers to sell its office furniture to Plentiful Marketing, Inc., but does not specify a time for Plentiful to respond. The offer expires

after a reasonable period of time

Dina buys from E-Things, Inc., a product that includes a shrink-wrap agreement. A dispute arises, and E-Things files a suit against Dina. The court will enforce the agreement if Dina used the product

after having had an opportunity to read the agreement.

Performance thats of legally sufficent value may consist of?

an act, a forbearance, OR creation/modifcation/destruction of a legal relation

Diane sells shoes for a retail store. What is Diane?

an agent and an employee of the store

Ira and Jill can discharge their contract through novation. This requires

an agreement by all of the parties to a new contract.

Fred and paul sign a contract in which fred agrees to paint pauls house in exchange for 500. Fred and paul agree one week later that paul will pay fred daughter, emma, the 500 directly. They notify emma. Emma is?

an assignee

Ann and Burt sign a contract in which Ann agrees to paint Burt's house for $2,000. They agree later that Burt will pay Ann's supplier, City Pain Store, the $2,000 directly. City Paint Store is

an assignee.

Describe: Pregnancy Discrimination Act of 1978

an employer may not fire, refuse to hire, or fail to promote a woman because she is pregnant.

Flo tells Gregor that she will buy his textbook from last semester for $65. Gregor agrees. Flo and Gregor have

an express contract

A contract may not be assigned when?

assignement will materially increase the risk of nonperformance, is expressly prohibited by the terms of the contract or the contract is uniquely personal in anture

John agrees to sell his sports equipment store to Kay and, as part of the sale, promises not to open a similar store in the United States for twenty years. John's promise is a. an unreasonable restraint of trade like all covenants not to compete. b. unreasonable in terms of geographic area and time. c. unreasonable in terms of Kay's "goodwill" and "reputation." d. valid and enforceable.

b. unreasonable in terms of geographic area and time.

Brad defends against a breach-of-contract suit by College Credit Corporation by claiming that their deal - a student loan accruing interest at a certain rate and payable beginning on a certain date - was unfair because the consideration for their contract was inadequate If, as Brad claims, the consideration in this problem is inadequate, it may indicate a lack of

bargained-for exchange or mutual assent

After an accident with a driver for General Transport Company (GTC), Paul signs a covenant not to sue GTC for damages in a tort action if it pays for the damage to his car. This covenant

bars recovery only if GTC pays

Bob offers to sell Carol his computer but the conditions of the sale on Carol accepting the offer by May 1. Bob may revoke the offer

before Carol accepts the offer

administrative agencies

bodies of the city, county, state of fed gov that carry out specific regulatory duties

Phil enters into a contract with Vacation Resorts, Inc., to work as a chef. Under the plain meaning rule, the meaning of this contract must be deter¬mined by reference to a. any available evidence. b. any relevant extrinsic evidence. c. the face of the instrument. d. the later testimony of the parties.

c. the face of the instrument.

Excel Autos & Trucks, Inc., contracts to sell five trucks to First Leasing Corporation, which contracts to lease the trucks to General Delivery Company. Article 2A of the UCC applies to a. neither the lease nor the sale. b. the lease and the sale. c. the lease only. d. the sale only.

c. the lease only.

Chris, a minor, signs a contract to buy alcoholic beverages for Dine & Drink, his parents' restaurant. The contract is a. valid but may be disaffirmed. b. valid but may not be disaffirmed. c. void as a matter of law. d. void unless it is also signed by Edie, the manager of Dine & Drink.

c. void as a matter of law.

Paul signs a lease that provides any change in zoning law will result in an automatic termination of the lease. THe zoning board adpots a new zoning classification before the lease expires. The changes is zoning satisfies the?

condition subsequent

Evelyn, who owns and operates Eve's Farm & Garden Company, agrees to sell Hill & Dale Produce, Inc., fifty bush¬els of apples. A strike delays delivery of the apples by ten days. The contract with Hill & Dale is a. breached. b. discharged. c. not affected. d. suspended.

d. suspended.

Nora signs a contract to buy a car just before reaching the age of majority. After reaching the age of majority, Nora does not take posession or make payments. Most courts would hold that she had

disaffirmed the contract

Nora signs a contract to buy a car just before reaching the age of majority. After reaching the age of majority, Nora does not take possession or make payments. Most courts would hold that she had

disaffirmed the contract.

Nina and Owen enter into an oral contract for Nina's sale to Owen of a laser printer for $400. Before Owen takes possession of the printer, the contract is enforceable by

either party

While intoxicated, Tim contracts to buy a bicycle for double its normal price. The contract is

enforceable only if Tim understood its legal consequences.

Little Goods Store and Major TV Sales Corporation enter into an oral contract for Major's sale to Little of eight DVD players for $100 each. After Little takes possession of the players, but before payment, this contract is

enforceable whether it is in oral or in writing

Alan and Beth enter into an oral contract for Alan's sale to Beth of eight DVD players for $100 each. After Beth takes possession of the players, but before she makes payment, this contract is

enforceable whether it is oral or in writing.

Jill agrees to build a warehouse for Ken and orders supplies from Larry for the job. Ken promises Larry that Ken guarantees payment for the supplies. Ken's promise is

enforceable whether it is oral or in writing.

Axel, the owner of Bar-B-Q Cafe, announces that he plans to paint its front fluorescent red. Cleo, the owner of Delicate Dress Shop next door, promises to pay Axel $1,000 to use a more conservative color. Axel agrees. Cleo's promise is

enforceable, because Axel agreed to refrain from doing something that he was legally entitled to do

Superior-Plus Properties, Inc., and Topps Construction Company sign a contract that specifies the amount to be paid. Additional compensation may be justified by

extraordinary difficulties unforeseen at the time of the contract

A person seeking to void a contract based on intoxication must show that he or she was so intoxicated as to?

fail to comprehend the legal consquences of entering into a contract

To be valid, a contract must be enforceable by all of the parties to it.

false

Under federal law, an e-signature is as valid as a signature on paper, without exceptions.

false

Under the UETA, a signature may be denied legal effect solely because it is in electronic form.

false

privacy act

federal agencies may not disclose information about an individual to other agencies or organizations without consent

Economic waste

hen the amount of damages awarded is disproportional to any economic benefit or utility gained as a result of the award. Thus courts may use discretion to award damages equal to Diminution in Value, UNLESS the breach is WILLFUL AND only completion of the K gives the Nobreaching party the benefit of its bargain.

Definition of cost avoided

is the additional costs that the non-breaching party can avoid by rightfully discontinuing performance under the contract as a result of the other party's breach.

Alan promises to pay Beth $500 to install a pump in his factory. Beth completes the installation. The act of installing the pump

is the consideration that creates Alan's obligation to pay Beth.

Ron breaches his lease with Sunny Properties and vacates the premises six months before the end of the term. In some states, the landlord would have to a. avoid reletting the premises to recover any damages from Ron.

make reasonable efforts to relet the premises to mitigate the damages recoverable from Ron.

Describe: Section 8(a) of NLRA

makes it an unfair labor practice (ULP) for an employer: • To interfere with union organizing efforts • To dominate or interfere with any union • To discriminate against a union member, or • To refuse to bargain collectively with a union. (Prohibits employer from interfering w/union organizing or discriminating against union members)

Elements of fradulent misrepresentation?

must be intent to deceieve called scienter, innocent party must have jusifiably relied on misrepresentation and misrep must concern a material fact

Nina, a seventeen-year-old, signs a contract to sell her car to OK Used Cars. Nina receives a better offer the next day from Perfect Pre-Owned Cars, Inc., and accepts the new offer. Nina is

not liable to OK becuase the sale of the car disaffirmed their deal

Repudiation

o Treat _________ as final breach by pursuing a remedy o Wait to see if breaching party will decide to honor contract despite avowed intentioned to renege -Breaching party can retract ______, indicate intent to perform as long as since time of ______, the other party has cancelled or material changed position or otherwise indicated that _______ is final

Pete, a judge, can apply the doctrine of quasi contract to a dispute between Quality Service Company and Regulated Office Systems

only if there is not a valid contact covering the area in question

Describe: Title VII of the Civil Rights Act of 1964

prohibits employers from discriminating on the basis of race, color, religion, sex, or national origin.

Describe: False Claims Act.

prohibits employers from firing workers who file suit under the statute. A successful whistleblower receives between 15 and 30 percent of any damages awarded to the government.

Jock and Kyla decide to wager, in violation of a state statute, on the outcome of a football game. They each deposit money with Len, who agrees to pay the winner of the bet. Before the game begins. Kyla tells Len that she changed her mind about the bet. Kyla can recover

the amount of her bet only

List the two major effects of Workers Compensation.

• provide a fixed, certain recovery to the injured employee, no matter who was at fault for the accident. (employee win) • employees are not permitted to sue their employers for negligence. (employer win)

A key advantage of the LLC is that: a. the liability of members is limited to the amount of their investments. b. the entity is treated as a partnership for liability purposes. c. there are no formalities associated with creating an LLC. d. state statutes limit the flexibility of LLCs.

Describe: Senority as a Defense of discrimination.

A legitimate seniority system is legal, even if it perpetuates past discrimination.

"how much" consideration is given

Bill orders 100 kegs of Budweiser for his new bar which will open June 1. The beer costs $30 per keg to make, and is sold to Bill for $40 per keg. The contract says, "Delivery by June 1, time is of the essence." The beer is not delivered on time, and Bill hurriedly orders 100 kegs from another brewery. The Budweiser delivery is made on June 3. What amount must Bill pay Budweiser?

$0 EXPLANATION: Usually, if performance is slightly late, the other side still has to pay. However, if a contract expressly states that time is vital, a late delivery usually excuses performance. Bill is free to refuse to accept the beer and pay nothing.

Mel has a contract with Bob in which he will deliver 100 bottles of tequila for $1,000. One night, Mel puts correction fluid over the price on his copy of the contract, and changes the dollar amount to $1,800. He delivers the goods, and demands $1,800 from Bob after showing him the contract. Bob remembers very well how much he was supposed to pay, and is furious at this attempted scam. He refuses to accept the delivery. How much is Bob obligated to pay in this situation?

$0 EXPLANATION: When one party materially alters a contract without consent, the other side may treat the contract as discharged.

Bill contracts to work exclusively for TechCorp during April for $3,000. On March 31, TechCorp cancels the contract. Bill finds another job during APril but earns only $2,000. Bill files a suit against TechCorp. As compensatory damages, Bill can recover

$1,000.

List the two types of Proof of Workplace Discrimination (Title VII)

* Disparate Treatment * Disparate Impact

List the Congressional Acts that affect Financial Protection within Employment Law.

* Fair Labor Standards Act of 1938 (FLSA) * Workers' Compensation Statutes * Social Security * Federal Unemployment Tax Act (FUTA) * Employee Retirement Income Security Act (ERISA)

List the Defenses against charges of discrimination.

* Merit, * Seniority, and * Bona Fide Occupational Qualifications.

List the Congressional Acts related to Employment Security.

* National Labor Relations Act (NLRA or the Wagner Act) (1935) * Family and Medical Leave Act (FMLA) (1993) * Consolidated Omnibus Budget Reconciliation Act (COBRA)

List two types of Sexual Harassment claims.

* Quid Pro Quo and * Hostile work environment.

Alpha Design Company and Beta Products, Inc., sign a document that states Alpha agrees to design a Web page for Beta and Beta agrees to pay Alpha for this service. Alpha and Beta have made

***NOT***an implied-in-fact contract.

Business Office, Inc., hires Carl to repair a computer on site for $400, but Carl does not show up as agreed. Business Office hires Dan to do the job for $350. Business Office may recover from Carl

***NOT- compensatory damages. Response Feedback: Learning Objective 1 & 2 - Textbook Page 289

Adam, a seventeen-year-old, signs a contract to sell his car to Best Used Cars. Adam receives a better offer the next day from Cars & Trucks, Inc., and accepts the new offer. Adam is

**not- not liable to Best because he is a minor** pg 237

Through fraudulent means, Roy induces Sal to sign a contract to invest with him her profits from Tasty CafÈ. When Sal learns the truth, she may

**not- recover the money paid only.** pg 252

Employee vs Independent Contractor

-In an EE, the ER is liable for their actions in the scope of the agency (liable for taxes too like SS, protected under employment laws -IC needs a "work for hire" agreement from ER

Limited Partnership ("LP") (Admission)

LP interest can be transferred by a partner, but to become a member the transferee partner needs the consent of the other partners and the Certificate of Limited Partnership has to be amended to reflect the transfer.

Which of the following is a major power held by shareholders: a. the power to appoint corporate officers. b. the power to manage and supervise daily operations of the corporation. c. the power to declare dividends. d. the power to elect the board of directors

Burger King is an arbitrary trade mark.

True

Damages compensate a party for harm suffered as a result of another's wrongful act.

True

Going to the store and writing a check knowing that you do not have the funds in the bank to cover the check may be grounds for a criminal charge of larceny.

True

If John is using his lawnmower and is injured by a manufacturer defect and then his cousin using the same lawnmower is injured can both gentlemen sue the manufacturer of the lawnmower?

True

If Tyson walks off with Mary's briefcase he may not be guilty because there was no theft, but can he be charged with a civil tort?

True

In a sole proprietorship, the owner receives all of the risk.

True

Informal contracts are usually based on substance rather than form.

True

T/F: After an economic strike, an employer may not discriminate against a striker, but the employer is not obligated to lay off a replacement worker to give a striker his job back.

True

T/F: An accommodation is not reasonable if it would create undue hardship for the employer.

True

T/F: Employer can present anti-union views to employees, but cannot use threats/promises of benefits to defeat a union

True

T/F: Employers must make reasonable accommodation for a worker's religious beliefs unless the request would cause undue hardship for the business.

True

T/F: FLSA does not limit the number of hours a week that an employee can work, but it does specify that workers must be paid time and a half for any hours over 40 in one week.

True

T/F: Government employees can be tested for drug and alcohol use only if they show signs of use or if they are in a job where this type of abuse endangers the public.

True

T/F: In an appeal of arbitration for the Grievance Process, a court may refuse to enforce an arbitrator's award that is contrary to public policy.

True

T/F: Some of these statutes permit any lawful activity when off-duty, including drinking socially, having high cholesterol, being overweight, or engaging in dangerous hobbies

True

The higher burden of proof in criminal cases reflects a fundamental social value--that it is worse to convict an innocent individual than to let a guilty person go free.

True

The principle behind the quasi contract is to prevent unjust enrichment.

True

T/F: As a US Agency, OSHA may assess fines for violations and order employers to correct unsafe conditions.

True (Appeals are possible)

T/F: The EEOC can sue on behalf of the plaintiff, if they decide not to, the plaintiff may proceed on their own in court.

True (EEOC will send a "Right to Sue" letter to confirm this right)

T/F: The employees of Vibrato, Inc. went on strike because Vibrato refused to bargain in good faith with the union. After the strike, the union members are entitled to their jobs back even if that means Vibrato must lay off replacement workers.

True (If the strike is due to an unfair labor practice, such as the refusal to bargain in good faith, the union member is entitled to his or her job back.)

3. T/F: An employer may not disqualify a job applicant because of a disability if they can perform the essential functions of the job with reasonable accommodation.

True (This is a requirement of the Americans with Disabilities Act.)

Place of Delivery

UCC provides for _____ __ _________ only if contract does not, parties may agree on particular destination, if not specified goods made available to buyer at seller's place of business/residence; location of goods can be _______ __ _______

In studying business law professor smith's students also study ethics. Ethics is the study in

What constitutes right or wrong behavior

When a corporation suffers a wrong and the corporate directors fail to take action to redress that wrong, one effective and appropriate way to obtain redress is through: a. the issuance of preemptive rights. b. the use of stock warrants. c. a shareholder's derivative suit. d. shareholders voting in new officers

Quid pro quo harassment

When promotions, etc, are doled out on the basis of sexual favors.

Parole Evidence Rule

When two parties make an integrated contract - intent to be final expression of agreement - neither party can use outside provisions to contradict, vary, or add to the written contract terms

Describe: Strikes

When workers walk off the job to disrupt a company's production capabilities.

Legal Detriment is..

Where the parties bargain for each person's detriment to do something they are legally entitled to do or refrain from doing, in exchange for a promise from the other party, such that . . . The promise must induce the detriment & The detriment must induce the promise.

Multiple Choice: Jeremy was terminated by his employer for violating company rules. He challenged the termination by filing a grievance. Eventually, the matter went to arbitration and Jeremy's termination was ruled to have been improper. The employer filed a claim in court to have the arbitrator's ruling overturned since it claimed the facts clearly demonstrated Jeremy had violated the express rules of the company. The employer claimed that the arbitrator had ignored the obvious and had committed a serious mistake of fact. a. A court may overturn an arbitrator's ruling if it is proven that the arbitrator made a serious error of fact. b. A court may overturn an arbitrator's ruling if the court finds the ruling is contrary to public policy. c. Both of the above are correct. d. Neither of the above is correct.

D (A is factually incorrect, only on bias can an artibitrator be turned over; B is factually correct but does not apply as it is not related to any sated public policy; A&B make C incorrect. This leaves D as the only possible correct answer)

Even-Flo Hydraulics enters into a contract to repair valves and fittings in Fiesta Company's plant. If Even-Flo breaches the contract, Fiesta can a. do nothing but make a deal with .a different service provider. b. do nothing but temporarily suspend operations and wait. c. file a criminal complaint against Even-Flo. d. sue Even-Flo for damages.

D.sue Even-Flo for damages.

Dependable Appliances, Inc., is a private, for-profit corporation that (a) was formed for the purpose of manufacturing and distributing a newly patented kitchen appliance for a profit; (b) is owned by five shareholders; (c) is subject to double taxation; and (d) has made no public offering of its shares. Dependable is: a. an S corporation. b. a close corporation. c. a nonprofit corporation. d. a professional corporation

Ordinary measures of damages (Buyer's (lessee's) remedies when seller (lessor) breaches):

Difference between market price and contract price at the time they learned at the breach.

Stealing computer time is not a crime.

False

T/F: A union may insist on a Hot Cargo Clause because they are legal.

False

The "necessaries" of minors are concisely defined by law.

False

The Merchants Firm Offer Rule is irrevocable when a customer provides consideration for the purchase.

False

The UETA requires the use of security procedures to verify changes to e-documents.

False

The doctrine of promissory estoppel cannot be applied if there is no consideration for the promise which was relied upon.

False

Under the Statute of Frauds, all promises must be in writing to be enforceable.

False

2. T/F:The Age Discrimination in Employment Act prohibits discrimination based on age against those over age 50.

False (Discrimination against those over age 40 is prohibited.)

T/F: Closed Shop, Union Shop and Agency Shop Clauses are all legal.

False (closed shops clauses are illegal, union & agency shop clauses are generally legal.)

1. T/F: Remedies under title VII include unlimited punitive damages.

False (The available remedies are hiring, reinstatement, retroactive seniority, back pay, reasonable attorney fees, and punitive damages which are statutorily capped, depending on the size of the employer.)

Beth claims that her contract with Cari is voidable. If the contract is avoided

both parties are released from it

Lou's Bicycle Store contracts to buy fifty bicycles from Mountain Bikes, Inc. Unless the contract states otherwise, this is a. a bill of lading. b. a destination contract. c. a shipment contract. d. a warehouse receipt.

c. a shipment contract.

Mei writes a check to Nat in an amount that represents half of her debt to him. On the back of the check, Mei includes the words "payment in full." Nat cashes the check. This dis¬charges the entire debt a. if the debt is liquidated. b. if the debt is past due. c. if the debt is unliquidated. d. under no circumstances.

c. if the debt is unliquidated.

Alan, the president of Bayside Investments, Inc., and Colin, Bayside's accountant, are charged with a crime, after the police search Bayside's offices. Under the exclusionary rule a. certain Bayside records are excluded from subpoena. b. certain parties to a criminal action may be excluded from a trial. c. illegally obtained evidence must be excluded from a trial. d. persons who have biases that would prevent them from fairly decid¬ing the case may be excluded from the jury.

c. illegally obtained evidence must be excluded from a trial.

Hua, a resident of Illinois, owns a warehouse in Indiana. A dispute arises over the ownership of the warehouse with Jac, a resident of Kentucky. Jac files a suit against Hua in Indiana. Regarding this suit, Indiana has a. federal question jurisdiction. b. in personam jurisdiction. c. in rem jurisdiction. d. no jurisdiction.

c. in rem jurisdiction.

Rick manages an illegal gambling operation in his Sushi Bar & Grill. Rick reports the profits of the gambling operation as income from Sushi's legitimate activities on its tax returns. This is a. embezzlement. b. larceny. c. money laundering. d. no crime

c. money laundering.

An Iowa state statute requires amusement parks to maintain equipment in specific condition for the protection of patrons. Jack's Fun Park fails to maintain its equipment. Key, a patron, is injured. Jack's has committed a. a dram shop act. b. contributory negligence. c. negligence per se. d. res ipsa loquitur.

c. negligence per se.

Jean is playing a computer game on a bad disk that melts in her drive, starting a fire that injures her hands. Jean files a suit against K-Tech, Inc., the game's manufacturer. K-Tech is held liable under the doctrine of strict liability. A significant appli¬cation of this doctrine is in the area of a. cyber torts. b. intentional torts. c. product liability. d. unintentional torts.

c. product liability.

Hybrid Corporation enters into a contract with Insure Service, Inc. (ISI), to obtain health insurance for Hybrid employees. If ISI breaches the contract and Hybrid is awarded compensatory damages, the purpose would be to a. establish, as a matter of principle, that ISI acted wrongfully. b. provide Hybrid with funds for a foreseeable loss beyond the contract. c. provide Hybrid with funds for its loss of the bargain. d. punish ISI and set an example to deter others from similar acts.

c. provide Hybrid with funds for its loss of the bargain.

In Export Co. v. Imports, Inc., there is no precedent on which the court can base a decision. The court can consider a. neither public policy nor social customs and values. b. public policy only. c. public policy or social customs and values. d. social customs and values only.

c. public policy or social customs and values.

In selling inventory control software to Apex Auto Parts Corporation, Bond tells Apex's purchas¬ing agent that the software is "almost human." This is a. fraud. b. duress. c. puffery. d. undue influence.

c. puffery.

Federal retial corporation and regional distribution inc sign a written contract that doesnt involve a sale of goods. TO be enforceable, this written contract must include?

consideration, quanitity term, subject matter

Local Delivery Service contracts to sell its business to Regional Transport Corporation (RTC). Before the deal is completed, they contract to sell RTC's rights in the deal to National Distribution, Inc. This new contract will discharge the original contract if the new contract is supported by

consideration.

contracts that must be in writing to be enforceable

Jeff and Kris sign a written contract for the sale of Jeff's Koffee Kiosk to Kris. The parties intend their written contract to be a final statement of the terms of their agreement. Kris later disputes some of the provisions of the deal with Jeff. If the dispute results in litigation, a court will most likely exclude evidence that

contradicts the written terms

Mary, who is charged with a crime, claims that Nick, a government agent, entrapped her. For entrapment to be a valid defense a. Mary must not have been predisposed to commit the crime. b. Nick must have pressured Mary into committing the crime. c. Nick must have suggested that the crime be committed. d. all of the choices.

d. all of the choices.

Bayside Construction Company enters into a contract with Clio to remodel Dewey's Home Store, using products from Eagle Building Supplies. Fresh Food Café is next to Dewey's Home Store. The remodeling is a gift from Clio to Dewey, Clio's nephew and the owner of Dewey's Home Store. Dewey is a. a delegatee. b. an assignee. c. an incidental beneficiary. d. an intended beneficiary.

d. an intended beneficiary.

Natalie agrees to assume Orina's debt to Consumer Credit Corporation. Natalie does not get any personal benefit for the agreement. To be enforceable, the prom¬ise must be in writing if the debt is for a. more than $500. b. more than $5,000. c. more than $50,000. d. any amount.

d. any amount.

Kim sends an offer to Leo to cut down and remove a tree for $200. Kim says, "If you say nothing, I will consider you to have accepted my offer." If Leo does not respond, he will be deemed to a. accept the offer. b. make a counteroffer. c. reject the offer. d. none of the choices.

d. none of the choices.

Dot, a real estate agent, tells Elbert, a home seller, that her commission is 12 percent. Elbert agrees that Dot can sell his house but refuses to sign a contract unless the amount of the commission is reduced. After the house is sold, Elbert refuses to pay 12 percent. Dot is most likely to recover a. nothing. b. on a theory of an express contract. c. on a theory of an implied-in-fact contract. d. on a theory of quasi contract.

d. on a theory of quasi contract.

Lively Toys Store and Movin' Products Company (MPC) enter into an e-contract under which MPC agrees to ship a case of electronic, remote-controlled bugs to Lively Toys, which agrees to pay on delivery. The Uniform Electronics Transactions Act (UETA) a. denies the enforcement of such contracts. b. does not apply to such contracts. c. preempts all other laws with respect to such contracts. d. supports the enforcement of such contracts.

d. supports the enforcement of such contracts.

Sam contracts to harvest Tina's crop on August 1. Due to an unexpected regional fuel shortage, Sam cannot perform on the specified date. This a. breaches the contract. b. discharges the contract. c. has no effect on the contract. d. suspends the contract.

d. suspends the contract.

Dru, a U.S. citizen, is the owner of Egret, Inc. Egret's competitors include Feathered Friends Company (FFC), which is owned by Greg and Huey. The Bill of Rights embod¬ies a series of protections for Dru against types of interference by a. FFC and its other competitors only. b. FFC, Greg, Huey, others, and the government. c. Greg, Huey, and other private individuals only. d. the government only.

d. the government only.

A contract under which one or both parties have not yet fully performed is termed a(n):

executory contract

Applications Corporation (AC) sends an electronic record to Best Systems, Inc., an AC customer. Under the UETA, the record will be considered received when it

enters Best's processing system in a readable form, even if no person is aware of its receipt.

executive agencies

generally located within the executive branch, can make rules covering a broad spectrum of industries and activities and tend to focus on social regulation, transition with president

A contract between Eppie and Fab to lease real property contains an exculpatory clause. This clause is

generally unenforceable

Test for Enforceability of Lquidated Damages CLAUSE

i) The parties intended to agree in advance to the settlement of damages that might arise from the breach; ii) The amount of liquidated damages was reasonable at the time of contracting, bearing some relation to the damages that might be sustained; and iii) Actual damages would be uncertain in amount and difficult to prove. RESULT: if the liquidated damages are disproportionate to the actual damages, then the clause will not be enforced, and recovery will be limited to the actual damages proven. NOTE: When the contract contains a liquidated damages clause, the party seeking to repudiate that clause must show that the agreed-to damage is so exorbitant as to be in the nature of a penalty. Additionally, the damages contained in a liquidated damages clause must be for a specific amount for a specific breach; the provision may not merely serve as a threat to secure performance or as a means to punish nonperformance. Although exculpatory language in the contract stating that the liquidated damages provision is not a penalty does not control, it should be given some weight.

Policy statements

general statements about directions in which an agency intends to proceed with respect to its rule making or enforcement activities no binding impact anyone, do not directly affect anyone's legal rights

Which of the following is not among the types of contracts that are often said to be contrary to public policy? a. a contract for the sale of live farm animals. b. an exculpatory contract. c. an adhesion contract. d. a contract in restraint of trade.

b. The SEC does not issue government bonds; the U.S. Treasury Department makes such issuances

Which of the following is not one of the major responsibilities of the SEC: a. investigating potential insider trading volations. b. issuing government bonds. c. regulating trade in securities. d. investigating securities fraud

c. The franchisee typically controls the day-to-day operations of a franchise

Who typically controls the day-to-day operations of a franchise? a. The management of the franchisor. b. The employees of the franchisor. c. The franchisee. d. The shareholders of the franchisor

Describe: Disparate Impact

a rule that, on its face, is not discriminatory, but in practice excludes too many people in a protected group. (A condition in which employment practices are seemingly neutral yet disproportionately exclude a protected group from employment opportunities.)

Mary and Nick make a deal that comes under the UETA. Under the UETA, "information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form" is

a record.

Dag and Enita are in an auto accident. Dag offers B $2,000 if Enita promises not to pursue her potential legal claim against Dag. Enita agrees. Later, Enita discovers that it will cost $1,500 to repair her car and $4,000 to cover the medical expenses for a latent injurt. The agreement between Dag and Enita is

a release

Jean contracts to sell her backhoe to Kyla for $2,000. Before performing, Jean and Kyla decide to cancel the deal. This is an example of

a rescission.

Carl promises to trim the hedge in Donna's yard in exchange for Donna's promise to fix Evan's mailbox. This is

a third party beneficiary contract.

Lara applies for a firefighter's job with Metro City, which responds with a letter setting an appointment for a medical exam. The letter also states that it is "a conditional employment offer." Based on the courts reasoning in Case 10.1, Ardito v. City of Providence, this letter is

a unilateral contact that Lara can accept by passing the exam

Flexo Trucking Company transports hazard¬ous waste. Garn is a Flexo driver, whom the company knows drives longer hours than federal regulations permit. One night, Garn exceeds the limit and has an accident. Spilled chemicals contaminate Hill City's water source, forcing the residents to move away. Flexo acted unethically because a. Flexo showed reckless disregard for Hill City's residents and others. b. Garn exceeded the federal time limit. c. harm was caused by an unfortunate accident. d. Hill City should have better protected its water source.

a. Flexo showed reckless disregard for Hill City's residents and others.

Leo buys a bicycle from his brother, Mike, who is a used car dealer. Mike agrees to keep the bike at his house until Leo picks it up. A tree falls on Mike's garage and destroys the bike. The loss is suffered by a. Leo and Mike. b. Leo only. c. Mike only. d. neither Leo nor Mike.

b. Leo only.

The elements of a contract include all of the following except:

an illegal purpose.

General Credit Corporation's promise to pay its employees a year-end bonus "if it seems like a good idea at the time" is

an illusory contract

Bay Construction, Inc., a contractor, asks Cool Electric, a subcontractor, to provide certain services. Nothing is expressed about payment. Cool provides the services, but Bay refuses to pay. In Cool's suit to recover, the chief issue is most likely to be whether these parties had

an implied-in-fact contract

Tom enters a coffee shop in which he has an open account, fills a cup of coffee, holds it so the cashier can see it, acknowledges the cashier's nod, and walks out with the coffee, knowing that he will be billed for it at the end of the month, Tom has formed

an implied-in-fact contract

When Jeff's car breaks down, he asks Kwik Tow, Inc., to tow it from its location to Loyal Repair Shop. There is no discussion of a price, and Jeff and Kwik do not sign any documents. After the tow, Kwik sends Jeff a bill. With respect to Jeff's obligation to pay the bill, this is

an implied-in-fact contract

Ron makes a contract with Sue that indirectly benefits Tim, although neither Ron nor Sue intended that result. Tim is

an intended beneficiary.

Describe: "Employment at Will"

any employee not employed under a contract/collective bargaining agreement (may quit for any reason/no reason at all, with no required notice to employer; employer may fire employee at any time, with no notice, for almost any reason)

Able Corporation agrees to buy 1,500 acres of land from Baker Properties, Inc. If the actual plot is smaller than Able and Baker believe, Able may

avoid or enforce the contract.

5. Multiple Choice: Title VII of the Civil Rights Act prohibits discrimination based on which of the following? a. Education b. Religion c. Economic status d. Political affiliation

b (It also prohibits discrimination based on race, color, sex or national origin.)

Best Construction, Inc., contracts to build a store for Cheesy Pizza Company, with Cheesy's payment due on June 1. On June 1, Cheesy's bank is closed, and for this reason, Cheesy claims it cannot pay Best on time. In this situation a. Cheesy's bank is in breach of contract. b. Cheesy is in breach of contract. c. the contract is discharged. d. the contract is suspended.

b. Cheesy is in breach of contract.

Delta, Inc., agrees to assume a debt of Evenflo Company to First State Bank. The agreement is not in writing. To be enforceable, the promise must be for the benefit of a. any party. b. Delta. c. Evenflo. d. First State.

b. Delta.

Final Foto, Inc., makes photo and video editing software, which includes a shrink-wrap agreement. Gert buys a package of the software. With respect to the contract for the software's purchase, the shrink-wrap agreement may not be enforced if a. Gert does not read it. b. Gert learns of it after contracting. c. Gert learns of it before contracting. d. the quality of the software is poor.

b. Gert learns of it after contracting.

Different recognizable forms of Consideration

i) A return promise to do something; ii) A return promise to refrain from doing something legally permitted; iii) The actual performance of some act; or iv) Refraining from doing some act. BUT NOT: v) At CL, a Preexisting Duty (EXCEPTION: a third party offers a promise ,contingent upon performance of a contractual obligation by a party. vi) OR, PAST Consideration (but modern trend is an equitable remedy to prevent injustice where the promisee (a) did NOT intended his act as a gift, AND (b) DID expect compensation for his act. vii) Or NOMINAL C?

Assurance

if 1 party has reasonable grounds to believe other party won't perform as contract, may in writing demand adequate ________ of due performance (i.e. payments) without liability

Destruction of Identified Goods

if goods identified at time contract was formed, parties excused from performance, if only partially destroyed, buyer can inspect and treat as void or accept goods with reduction of contract price

Jay is mentally incompetent but has not been so adjusting by a court. Any contract Jay enters into is voidable?

if he either does not know it is a contract or doesnt comprehend the consquences

Local Investment Company and Midstate Properties, Inc., contract for the sale of a retail mall. A mutual mistake of fact will make it possible for wither party to rescind the contract

if the mistake of fact is material

Ned hires Bart to mow his lawn for the summer. One week before Bart is to start mowing, Ned tells him, "I've changed my mind. I'm going to make my heathen sons do my yardwork instead." When may Bart sue Ned for damages, if ever?

immediately EXPLANATION: When one party refuses to perform in this manner, it is called an anticipatory repudiation. The other side may sue immediately for damages.

Describe: Sit-Down Strike

members stop working but remain at their job posts, physically blocking replacement workers from taking their places

Alice strikes Mary, but the action is not purposeful. Mary should sue Alice for:

negligence.

Andy and Biz Company (BC) enter into an oral contract under which Andy agrees to clean BC's office for two years. This contract is enforceable by

neither party

General Contractors (GC) and Holly enter into an oral contract under which Holly agrees to work on a GC project for sixteen months. This contract is enforceable by

neither party

Mia orally promises Nick that she will buy his fishing trawler for $10,000. Before either party acts in reliance on this promise, under the doctrine of promissory estoppel, the transaction is enforceable by

neither party

Royal Properties, Inc., mails a flyer to hundreds of firms, advertising a building for sale. Standard Manufacturing Company responds by saying, "We accept your offer." Between Royal and Standard, there is

no contract

Bruno is a businessperson with investments in legal and illegal opera¬tions. Bruno may be subject to penalties under RICO a. for making an unprofitable, but legal, investment. b. for the commission of any business fraud. c. only in a case involving a "racket." d. only in a case involving organized crime.

b. for the commission of any business fraud.

Leah gains access to government records and alters certain dates and amounts in her favor. This is a. embezzlement. b. forgery. c. larceny. d. no crime.

b. forgery.

Darla sells a all-terrain, off-road vehicle to Esteban without disclosing that the odome¬ter, which reads 30,000 miles, was disconnected 50,000 miles ago. Darla is most likely liable for a. duress. b. fraud. c. mistake. d. nothing.

b. fraud.

Dale signs a contract with Everbest Insurance Company that intentionally confers a benefit on Flo. Flo's rights under the contract will vest a. automatically. b. if she manifests assent to the contract or materially al¬ters her po¬si¬tion in justifiable reliance on it. c. only if she manifests assent. d. only if she materially alters her position in justifiable reliance.

b. if she manifests assent to the contract or materially al¬ters her po¬si¬tion in justifiable reliance on it.

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 mistake negates the mental state necessary to commit a crime. c. if the perpetrator was intoxicated. d. under any circumstances.

b. if the mistake negates the mental state necessary to commit a crime.

Business Investment Company and Chic Properties, Inc., contract for the sale of a retail mall. A mutual mistake of fact will make it possible for ei¬ther party to rescind the contract a. if the mistake of fact is immaterial. b. if the mistake of fact is material. c. under any circumstances. d. under no circumstances.

b. if the mistake of fact is material.

Domino causes a disturbance at El Nino Cafe. He is arrested and charged with disorderly conduct, a misdemeanor. A misdemeanor is a crime punish¬able by a. a fine only. b. imprisonment up to one year. c. imprisonment up to six months. d. imprisonment up to ten days.

b. imprisonment up to one year.

Moby, a resident of New Jersey, has an accident with Ogden, a resident of New York, while driving through that state. Ogden files a suit against Moby in New York. Regarding Moby, New York has a. federal question jurisdiction. b. in personam jurisdiction. c. in rem jurisdiction. d. no jurisdiction.

b. in personam jurisdiction.

To assist in detecting illegal bribes, Cut Rite Contractors, Inc., and all U.S. companies, must a. conceal financial records that reveal past bribes. b. keep records that "accurately and fairly" reflect financial activities. c. make bribes through third parties rather than directly to officials. d. permit payments to foreign officials that are unlawful in that country.

b. keep records that "accurately and fairly" reflect financial activities.

Rural Utility, Inc., enters into a contract with Shovel Excavation Service to dig up, replace, and rebury Rural's cables in a certain location. Rural advances Shovel 10 percent of its cost. If the parties rescind the contract, Shovel's refund of the payment would be a. a penalty. b. liquidated damages. c. restitution. d. specific performance.

b. liquidated damages.

Revocation of acceptance

not effective until seller notified, within reasonable time after buyer discovers or should have discovered grounds for revocation, or before goods have undergone any substantial change (i.e. spoilage) 1) Acceptance was predicated on reasonable assumption that nonconformity would be cured, 2) Buyer or lessee didn't discover the nonconformity before acceptance, either b/c it was and difficult to discover before acceptance or because assurances made by seller or lessor that goods were conforming kept buyer from inspecting goods

Digital Computers (DC) agrees to sell 100 hard drives to Eagle Computer Stores. Later, to obtain a higher profit, DC demands an extra $100 per drive to complete delivery. With no other source for DC drives, Eagle reluctantly agrees. Regarding this agreement, a court would likely

not enforce it

Mary promises to pay her assistant Ned $10,000 in consideration of the services he provided over the years. Mary never pays Ned. Mary is

not liable, because the consideration is in the past

Jill and Karl contract for the sale of Jill's horse for $1,000. Unknown to either party, the house had died. Karl is

not required to pay due to the mutual mistake

Paula and Quinn contract for the sale of Paula's horse for $1,000. Unknown to either party, the horse has died. Quinn is

not required to pay due to the mutual mistake.

To have a contract you must have:

both an offer and an acceptance.

Jay and Kim enter into a contract by which Jay agrees to sell Kim his laptop computer for $500. The contract will be fully discharged when

both b and c.

Describe: "Bargaining to Impasse"

both parties must continue to meet and bargain in good faith until it is clear that they cannot reach an agreement.

Ann, a seller, and Bill, a buyer, make a deal over the Internet that involves e-signatures. Under the E-SIGN Act, for the e-signatures to be enforceable

both parties must have agreed to use e-signatures.

First Design Corporation, a business firm, and Gary, a consumer, make a deal over the Internet that involves e-signatures. Under the E-SIGN Act, for the e-signatures to be enforceable

both parties must have agreed to use e-signatures.

Speedy Assembly Company promises its employees a 10-percent raise at the end of the year if productivity has increased and management feels it is warranted. Speedy must

do nothing.

Ed and First Star Company enter into an oral contract under which Ed agrees to provide delivery service for First Star for nine months. This contract is enforceable by

either party

Don enters into a contract with Edie, who does not have contractual capacity. The law will permit Don to enforce the contract only if Edie

elects not to avoid the contract

Describe: Managerial Employees

employees so closely aligned with management that their membership in the bargaining unit would create a conflict of interest between her union membership and their actual work.

Describe: Qualified Privilege

employers are liable only for false statements that they know to be false or that are primarily motivated by ill will

adjudication

enables statutes delegate judicial power to agencies to settle or adjudicate individual disputes that an agency may have with businesses or individuals

Through fradulent means, Fred induces Gail to sign a contract to invest with him the profits from High Styles, her clothing store. When Gail learns the truth, she may

enforce the contract or recover the payment

Coverage, Inc. (CI), coordinates an insurance network that includes 1 million potential patients. By contracting with CI, a medical provider gains access to the network in exchange for accepting payment at lower than market rates. Doctors, Inc., contracts with CI but, when few patients are forthcoming, files a suit to recover the difference between the contract and the market rates. The court will most likely rule that the contract is

enforceable only because the contract does not lack consideration

Opie enters into a contract with Pia. Later, Opie is adjudged mentally incompetent and Quint is appinted Opie's gaurdian. Raye, Opie's daughter, attempts to void Opie's contract with Pia on the ground of Opie's incompetency. The contract is

enforceable only if Opie does not attempt to disaffirm it

Employment Sources, Inc., enters into a contract with Fred. If Fred is a minor, this contract is most likely

**not- unenforceable** Page 209

List the Disparate Treatment Case Steps

- Plaintiff must present evidence of discrimination - Defendant must show legitimate, nondiscriminatory reason for rejecting said plaintiff - Plaintiff must now prove that defendant discriminated by showing that the reasons offered were simply a pretext

Sarbanes-Oxley Act of 2002

Attempts to increase corporate accountability by imposing stricter disclosure requirements and harsh penalties for violations in an effort to restore investor confidence in the U.S. capital markets. Applies to all publicly-traded companies

Gail is a private lender who is charged with filing false claims in bankruptcy proceedings against her debtors. The standard of proof to find a defendant who has been charged with a crime guilty is

Beyond a reasonable doubt.

Describe: Collective Bargaining Agreement (CBA)

Contract between employer and union workers

Describe: Constitutional Protection for Government Employees

Employees of federal, state, and local governments have a right to free speech under the United States Constitution.

2 Elements of Consideration

Legally Sufficient Value: doing or giving up something that the party has no obligation to do Bargained-for-Exchange: The thing of value must be given in exchange for the return promise. This element distinguishes a gift from a K

Third Party Rights-- Delegations

The transfer of a contractual duty to a 3rd party

A merchant has greater warranty liability than does a casual seller.

True

A mistake of fact can be a defense to criminal liability.

True

An assignee can compel the obligor to perform.

True

If seller ____ to allow the buyer that inspection then the seller has ____ the contract.

refuses; breached

reg-neg

regulated negotiations, structured bargaining among competing interest groups, if people have a say they are more likely to commit to plan

Pitts, whose family owns and operates a farm, agrees to sell Armstrong ten bushels of strawberries. A strike delays delivery of the strawberries by two weeks. This delay

suspends the obligations of both parties until the contract can be performed.

Pitts, whose family owns and operates a farm, agrees to sell Armstrong ten bushels of strawberries. A strike delays delivery of he strawberries by two weeks. This delay

suspends the obligations of both parties until the contract can be performed.

Sal breaches his contract with neal to purchase the 500 pairs of sock he has pomised to buy. Neal is able to sell the soaks to ren for much lower the amount. Neal than sues sal for damages. Neal will be able to recover?

the difference between sals contract price and the amount paid by ren

Definition for Loss in Value

the difference between the performance that the non-breaching party should have received under the contract and what was actually received, if anything.

the essential terms

Laura and Mike enter into what Laura later claims is a contract. In deciding whether a valid contract was formed, a court will not look at

the parties' subjective beliefs at the time of the alleged contract

trying someone for a criminal offense.

Wolf signs an employment agreement to work for Razor Products as a chemical engineer but is drafted into the army and is required to serve until the war ends six years later. Razor Products will probably be

unable to enforce the contract due to the passage of time. and unable to enforce the contract due to changes in the parties' circumstances.

Applied Methods Corporation promises to give stock options to Brad, a production designer, for processes he has already designed. This promise is

unenforceable

unenforceable due to the preexisting duty rule

A court adjudicates Huck mentally incompetent and appoints Inez to be his guardian. Later, without Inez's knowledge, Huck signs a contract to sell his farm to Kyle for its real market value. The contract is

void

Odell owns Payroll Company, a bookkeeping service losing market share to Quik Qork, Inc. Odell pays Remy $5,000 to steal a list of Quik's clients, to whom Odell will aggressively market Payroll's services. This deal is

void

Employment Sources, Inc., enters into a contract with Fred. If Fred is a minor, this contract is most likely

voidable

Jon agrees to sell his K9 sports equipment store to Lacy. As part of the sale, Jon promises never to open a similiar, competing store anywhere. Jon's promise is most likely

invalid because of the unreasonable terms of area and time

A price list?

is NOT considered an offer

Fred promises to pay bill $50 for painting the house. Bill proceeds to paint the house. The act of painting the house?

is the consideration that creates freds contractual obligation to pay Bill.

Bo offers to sell a laser printer to ike, but its lsot in a fire before ike accepts it. Bo

isnt required to obtain a similar printer for ike because the destruction of the original printer automatically terminated the offer

Lind agrees to buy missys dog for 2000. The night before delivery, the dog runs away never to been seen again.

linda owes missy nothing

Ace Contractors, Inc., agrees to build a motel for Best Motels Corporation. The project proceeds according o plan, but before it is done, Best tells Ace to quit. Ace may recover

profits plus the costs incurred up to the time of the breach.

Freida and Gail enter into a bilateral contract, which is created when Freida gives a promise in exchange for Gail's

promise only

Destination Contract

seller agrees to deliver conforming goods to buyer at particular destination, must provide buyer with any documents of title necessary to enable buyer to procure goods from carrier

Define: Disabled Person

someone with a physical or mental impairment that substantially limits a major life activity, or someone who is regarded as having such an impairment

Describe: Workers Compensation

statutes ensure that employees receive payment for injuries incurred at work.

Buyer can make a demand in writing for the seller to give them adequate assurance of due performance in a certain time frame and until then the buyer will ____ their own performance.

suspend

Alan and Beth, consumers, transact a deal over the Internet. Their contract does not mention the UETA. The UETA covers

the entire contract.

the extent of the ten accepted cartons

Ray is a minor. Under some circumstances, ray can disaffirm a contract for ?

a loan or an insurance policy

Describe: Subcontracting

a manufacturer, rather than producing all parts of a product and then assembling them, contracts for other companies

Jack promises to buy Kris's computer for $400. Jack is

a promisor

Adam attempts to free himself from the duties of his contract with beth by telling beth to find someone else to perform them. This is NOT a

3rd party beneficiary or delegation

Ron and Nancy form the Eagle Equipment Corp. EEC has a board of directors, CEO, COO, and 52 shareholders. Eagle is governed by its

Board of Directors.

Describe: NLRB Review Process.

The General Counsel investigates such claims. If the General Counsel's office believes that a party has committed a ULP, it prosecutes the case before an Administrative Law Judge.

Jill offers to pay Kyle $500 if he jogs across the Golden Gate Bridge. Kyle can accept the offer only by jogging across the bridge. If Kyle jogs across the bridge, he and Jill will have formed

a unilateral contract.

Opie offers to sell his guitar to Pinky for $100. Pinky agrees. They complete and sign a printed form that includes, near the blanks for their signatures, the word "seal." This is a. a formal contract. b. an informal contract. c. a social contract. d. no contract.

a. a formal contract.

Limited Partnership ("LP") (Profits)

Distributions can be specified in the LP Agreement. Otherwise they are based on ownership interests

First National Bank decides to consolidate its operations with Overseas Bank to create a new firm called International Bank. The terms of the consolidation agreement conflict with First National Bank's articles of incorporation. These articles of incorporation

Do not block the consolidation and are replaced by the articles of consolidation.

Valid Contract

K with the necessary elements for K formation (agreement, consideration, legal contractual capacity of the parties, and legal purpose)

Define: Merit as a Defense of discrimination.

A defendant is not liable if he shows that the person he favored was the most qualified.

Sole Proprietorship (Dissolution)

Duration of the sole proprietorship determined by the owner, and the sole proprietorship automatically dissolved on owner's death

Inadequacy of consideration may be evidence of:

The exercise of undue influence, Taking advantage of the condition of the other party, unconscionability.

Tom owns the ABC enterprise, a sole proprietorship. In a sole proprietorship, the liability of the owner is

Unlimited.

When is an Offeror's revocation of his offer EFFECTIVE?

When this takes effect UPON RECEIPT by the offeree.

Which of the following statements made by the seller probably will not form an express warranty?

"This looks beautiful on you."

List the three conditions under which an Employer to legally monitor an employees e-mail communication.

(1) the employee consents, (2) the monitoring occurs in the ordinary course of business, (3) in the case of e-mail, the employer provides the e-mail system.

Exceptions to Prohibitions to the Assignment of Contracts

(1) the receipt of money; (2) complete rights in real estate - (reason: against public policy for restraints on alienation); **a provision for the right of first refusal with respect to real property is permissible. (3) negotiable instruments, including checks and promissory notes (reason: encourage the free flow of money and credit); (4) in a contract for the sale of goods, the right to receive damages for breach of K or payment of an account owed.

Definition of Expectation Damages

1) intended to put the injured party in the same position as if the contract had been performed. 2) arise naturally and obviously from the breach and are normally measured by the market value of the promised performance less the consideration promised by the non-breaching party. 3) To CALCULATE: subtract the contract price from the market value of performance. The market value of performance is whatever it reasonably costs to get the performance that was promised in the contract. [...] = loss in value + other loss - cost avoided - loss avoided 4) AND Must be FORESEEABLE 5) AND the NON-breaching party must be able to prove them with reasonable certainty.

Elements for Ratification

1- Agent acts on behalf of principal 2- Principal must affirm the the entire deal/ matter (if 3rd party, before the 3rd party withdraws from deal/matter) 3- Principal and 3rd party must have legal capacity to contract when agent made the deal/matter and the principal's legal capacity also must be at ratification 4- Principal must know all the material facts in the deal/matter

List the Steps to Organizing a Union

1. Campaign 2. Authorization Cards 3. Recognition (by Employer) - Voluntary/but not required 4. Petition (to NLRB) 5. Election - requires >50% of unit to agree to union.

List the four common topics/concerns of Employment Law

1. Employment Security, 2. Safety and Privacy in the Workplace, 3. Financial Protection, and 4. Employment Discrimination.

Contract Law Purposes

1. Represents a reflection of social values, interests, policy, and expectations at a given point in time. (i.e. what promises should be upheld and acceptable excuses to society for breaking promises) 2. Sets a framework for enforcing the promises that society views should be upheld and allowing for excuses that society views as acceptable 3. Provides stability, predictability, and certainty for buyers and sellers and other contracting parties in the marketplace 4. Serves as a backup to moral obligations, protecting promises or giving relief

business necessity

A defense to allegations of employment discrimination in which the employer demonstrates that an employment practice that discriminates against members of a protected class is related to job performance.

Protected Class

A group of persons protected by specific laws because of the group's defining characteristics (e.g. race, color, religion, national origin, gender, age, and disability)

Form agency by ratification (apparent authority)

Principal by act or agreement, ratifies conduct of a person who at the time of acting was not the principal's agent or did not have acting authority

A+ Autos contracts to sell a customized car to Ben. A+ installs a slightly used engine in the car. Ben demands that A+ replace it, but A+ refuses, arguing that would be too costly. Ben sues A+. The court will most likely rule in favor of

A+, if the difference between the used engine and a new engine is trivial.

AAA Autos contracts to sell a customized car to Barb. AAA installs a slightly used engine in the car, arguing that a new engine would be too costly. Barb sues AAA. The court will most likely rule in favor of

AAA, if the difference between the used and new engines is trivial.

exempted rule making

APA allows an agency to decide whether public participation will be allowed in rule making with regards to military affairs or agency management or personnel

A merger between Able Corporation and Baker, Inc. can be expressed as

Able + Baker = Able

General Partnership (Admission)

Admission only by agreement of the then existing partners

Adam is the owner of Adam's Apples a sole proprietorship. He wishes to increase his business capital while maintaining control. This can best be accomplished by

Borrowing funds.

Brad is a shareholder of Concert Promotion Corporation. As a shareholder, Brad can: a. authorize major corporate policy decisions. b. declare dividends. c. select and remove corporate officers. d. vote to amend the articles if incorporation or bylaws.

reimbursement

Duties of merchant buyers and lessees when goods are rejected - merchant buyer has good faith obligation to follow reasonable instructions received from seller with respect to goods, buyer entitled to _______ for care & cost in following instructions, buyer can resell goods in good faith if no instructions are forthcoming and goods are perishable

Delta Corporation merges with Echo Corporation. It is agreed that Echo will absorb Delta. On merging

Echo will continue as the surviving corporation.

Define: Voluntary Action in relation to Affirmative Action.

Employers can voluntarily introduce an affirmative action plan to remedy the effects of past practices or to achieve equitable representation of minorities and women.

A click-on agreement is an agreement whose terms are expressed inside a box in which the goods are packaged.

False

A generic term is not protected under trademark law unless it acquires a secondary meaning.

False

Current Intention to make an offer (element of a contract)

Intent is determined by the "reasonable person standard" ►Future intent ≠ an offer. ►Invitations negotiations (i.e. price lists) and RFPs ≠ an offer. ►Preliminary agreement (with all essential and no disputed terms) = offer ►Preliminary agreement (open essential terms but agreement to negotiate later) = offer

Noni, a seventeen-year-old (in a state were the age of majority is eighteen), signs a contract to sell her car to OK Used Cars. The next day, Noni tells OK that she's decided not to sell the car. Noni is a. liable to OK and must sell it a car of comparable value. b. liable to OK and must sell it her car. c. liable to OK for the amount of its profit on the deal. d. not liable to OK.

General Partnership (Profits)

Partners share the profits from the business. The partners share profits based on the Partnership Agreement arrangement and if it silent they share profits equally with losses being shared in the same manner.

Paul, Prince, and Peter are shareholders in Rite Corporation, each owning 20% of Rite's shares. Before a shareholders' meeting, they agree in writing to vote their shares together in a certain manner. Usually, such agreements are held to be: a. invalid and unenforceable. b. oppressive and irresponsible. c. suspect and voidable. d. valid and enforceable

Ray is the director of the board of a drug company. The corporation and Ray individually have been sued by consumer that became ill after using a product produced by the corporation. The corporation may

Pay Ray's legal fees regardless of the outcome of the lawsuit

Immigration Act of 1990

Places caps on the number of visas (entry permits) that can be issued to immigrants each year by a U.S. business

Elements of an Agency

Principal, Agent, Mutual consent from the principal that the agent will act on the principal's behalf, Agent is subject to the principal's control, Fiduciary duty - legal relationship of confidence or trust, Legal purpose and cannot be contrary to public policy (No consideration from the principal to the agent is required for an agency relationship; The principal but not the agent needs contractual capacity)

Great Games is a firm that specialized in Research and Development of computer games and operated as a partnership. Much of the law that governs the operation of a partnership is based on the

Principles of agency law.

Unilateral Contract

Producer says to Theo, "I'll pay you $200 to be the set photographer on next Saturday for my new romantic comedy, A Promise for a Promise." Theo says nothing in response, but shows up to the set on Saturday and starts taking photographs.

c. QT is not liable because the sale to Speedy for which Rapid has notice prior to Rapid's acceptance of the QT offer revokes the offer to Rapid

QT Transport, Inc. offers to sell a truckload of palettes to Rapid Delivery Company. Before accepting the offer, Rapid learns that the palettes have been sold to Speedy Trucking Corporation. QT is a. Liable to Rapid for breach of contract. b. Liable to Speedy for breach of contract. c. Not liable because the sale revoked the offer to Rapid. d. Not liable if QT offers substitute goods to Rapid

Rally offers to sell Sophie, who is seventeen years of age, a car about which Rally intentionally misrepresents several material facts. In reliance on the misrepresentation, Sophie buys the car. To prove fraud in this transaction, Sophie would have to show that a. Rally intentionally deceived Sophie. b. Rally made statements that were obviously exaggerated. c. Sophie does not know anything about cars. d. Sophie is under eighteen years of age

FHP is a corporation; the implied powers are powers necessary to perform all acts

Reasonably appropriate and necessary to accomplish its corporate purposes.

Rusty and Sylvia are shareholders of Tri Hotel Corporation. Tri's directors fail to declare a dividend. Rusty and Sylvia could succeed in asking a court to order the directors to meet and declare a dividend: a. if Tri has sufficient earnings available to pay a dividend. b. if Tri has cash reserves even if earmarked for a different purpose. c. if withholding a dividend is an abuse of the directors' discretion. d. under no circumstances

Formal Contract

Requires a special form for creation (i.e. international sales contracts)

Informal Contract

Requires no special form for creation, other than certain Ks must be in writing

Suppose that a corporation formed in Georgia does business in Alabama. In Alabama, that corporation would be referred to as: a. an alien corporation. b. a foreign corporation. c. a certified corporation. d. an ultra virus corporation

Describe: Concerted Action

Tactics union members take in unison to gain bargaining advantage

Business Judgment Rule ("BJR")

The principle pursuant to which a director or officer is immunized from liability from consequences of a business decision that turns negative as long as the decision was reasonable, informed, made in good faith, and in the best interest of the corporation. *The courts do not require directors and officers to manager "in hindsight," so in determining BJR protection courts look at the circumstances at the time of the decision.

Insider Trading (34 Act Related)

The purchase and sell of securities on the basis of inside information, meaning information that has not been made available to the public. Liability exists to the provider of the inside information and the person taking advantage of the inside information with knowledge that the information is inside information. ◘Tipper: A person who provides inside information. ◘Tippee: A person who is given inside information

Disparate-Impact Discrimination

The result to a protected class of persons who are adversely affected by an ER's practices and procedures, even though they may not appear to be discriminatory (i.e. unintentional discrimination; discrimination in effect)

The simplest form of business is: a. a partnership. b. a joint venture. c. a sole proprietorship. d. a corporation.

Highway Trucking Company and Interstate Distribution Corporation plan to consolidate. A certificate of consolidation must be issued by

The state only

Fine Shops, Inc., and Great Stores Corporation plan to merge. A certificate of merger must be issued by

The state only.

Local Holding Corporation and Regional Investments, Inc., plan to consolidate. The articles of consolidation will be filed, most likely with

The state secretary of state.

A company who creates rat poison that looks like candy may be liable under the product liability doctrine if it were foreseeable that a child would think the poison was candy, potential of harm of consumption, the availablity of an alternative design, as well as if the harm was preventable.

True

Keith offers to sell his business to debbie for 125,000. debbie replies "your price is too high, i will buy your business for 100,000". Debbie response is

a counter offer

Lou claims that he and Mira entered into an implied-in-fact contract. To establish this contract, it is not necessary to show that

a court imposed a promise in the interest of fairness

Miley and Rico enter into a contract for the closing of a sale of Miley's recording studio. When Rico's schedule conflicts, he asks Oliver to perform his duties at the closing. This transfer of duties is a. a delegation. b. an assignment. c. prohibited. d. a negotiation.

a. a delegation.

Bilt-Well Construction Corporation makes a side payment to a govern¬ment official in Nigeria to obtain a contract. In the United States, this is a. illegal and unethical. b. illegal but not unethical. c. unethical but not illegal. d. legal and ethical.

a. illegal and unethical.

rule making

administrative agencies can issue rules that control individual and business behavior

Quik Fix-It, Inc., offers Pam a job as a plumber. No time for acceptance is specified in the offer. The offer will terminate

after a reasonable period of time

Kris contracts to work exclusively for Little Manufacturing Company during May for $5,000. On April 30, Little cancels the contract. Kris finds another job during May but earns only $3,000. Kris files a suit against Little. As compensatory damages, Kris can recover a. $3,000. b. $2,000. c. $1,000. d. $0.

b. $2,000.

Which of the following is covered by the Statute of Frauds?

contract for sale of land, new car and sale of right to walk across your neighbors yard in order to get to beach

Bob contracts with Ace Plumbing, Inc., to pay $700 over a six-month period for its services. After Ace performs, they sign an accord, in which Bob promises to pay Ace $500 next week in lieu of the $700. Bob does not pay the $500. Ace can bring an action against Bob based on

either the accord or the original contract.

In order to prevent plaintiffs from recovering twice, plaintiffs are required under the common law to?

elect which remedy they wish to persue

Alan owns two motorcycles, worth 1000 and 500. Alan and dan enter into a contract for the sale of "alans motorcycle for 750". Alan believes, in good faith, hes selling the 500 cycle while dan believes, in good faith, thats hes buying the 1000 cycle. Due to their mistake?

there is no contract

Curt promises to buy ILLEGAL copies of CDs and DVDs from Donna, who promises to deliver on May 1. These promises are most likely

void

George pruchases a TV from TV inc that does not work, George wants a refund from TV and is willing tot return the defective TV. Hes seeking the remedy of?

rescission of the contract

Example of incidental damages you might incur if you are wrongfully terminated from your job?

the cost of mailing resumes to prospective empployers

Jackie hired Charlies to lay down new carpet in her room, Charlies does such a bad job that the only way to fix the carpet is to start over by relaying it down.

this is a material breach, jackie owes nothing to charies

Reformation is?

equitable remedy

Jay is mentally incompentent but has not been so adjusted by the court. Any contract Jay enters into is voidable

if he either doesnt know it is a contract or doesnt comprehend the consquences

Lena acts as the incorporator for NuGame Corporation. After the first board of directors is chosen, subsequent directors are elected by a majority vote of NuGame's: a. board of directors. b. incorporators. c. officers. d. shareholders

Lexy, a salesperson for Fine Corporation, learns that Fine Corporation will increase the dividend that it pays to shareholders. Lexy buys 10,000 shares of Fine Corporation stock. When the price of Fine Corporation's stock increases due to the increased dividend payment announcement, Lexy sells her Fine Corporation shares for a profit. Lexy would not be liable for insider trading if the information about the dividend was: a. material when she sold the stock. b. public after she bought the stock. c. public before she bought the stock. d. speculative when she bought the stock.

A collective mark is used to distinguish the services of one person or company from those of another.

False

A guardian cannot enter into a legally binding contract on behalf of a mentally incompetent person.

False

A merchant that receives non-conforming goods has the right to accept the goods, return the goods and ask to keep the goods until a reasonable time.

False

Three elements--agreement, consideration, and contractual capacity--are sufficient to form a binding contract.

False

Limited Liability Company ("LLC") (Liability)

Limited liability as the owners ("members") have limited liability in that they are not liable for the LLC's debts/losses except to the individual member's capital contributions

b. Even though one partner may have contributed more money to the partnership than the other, Larsen and Kyle have equal management rights unless they agree otherwise.

Assume that Kyle and Larsen have a general partnership for a dog grooming business and did not agree to any special management rights. In this situation, what rights does each have regarding the management of the dog grooming business? a. One partner must be the superior in rights. b. They have equal management rights. c. One partner must conduct the partnership business, while the other provides the capital. d. The partner who put in more money has a bigger voice in management.

Ann files a suit against Beta Company. While the suit is pending, Gamma Corporation merges with Beta. Gamma absorbs Beta. After the merger, liability in the suit exists in

Gamma.

Generally, the liability of shareholders is: a. unlimited. b. just like that of partners. c. limited to their investment in the stock of the corporation. d. limited to a maximum of $50,000

Geof owns two cars. He offers to sell the Honda for $20,000 to Ilsa, who says, "I'll pay not more than $15,000." Geof offers to sell the Jeep for $20,000 to Kiki, but before Kiki responds, Geof says, "Forget it. I changed my mind." Geof's offer was terminated by

Geof and Ilsa

Gina induces Hu to enter into a contract for the purchase of a condominium about which Gina knowingly misrepresents a number of material features. When Hu discovers the truth, Hu can a. not rescind the contract. b. rescind the contract on the basis of fraud. c. rescind the contract on the basis of mistake. d. rescind the contract on the basis of undue influence

Amy wants to go into the business of construction contracting. Among the reasons that would probably convince her to set up her business as a sole proprietorship would be its

Greater organizational flexibility.

Describe: Section 7 of NLRA

Guarantees workers' right to organize unions and bargain collectively through representatives of their own choosing

Describe the Procedures and Remedies outlined in Title VII of the Civil Rights Act

Plaintiff must first file complaint with the Equal Employment Opportunity Commission (EEOC) before litigation.

Betty owns 100 shares of Mega Corp. Mega Corporation makes a new issue of 10,000 shares. According to her stock certificate, Betty is entitled to buy another 100 shares at the time of new issue. This is an example of

Preemptive rights

Readmore Bookstore Corporation files a registration statement with the SEC and provides a prospectus describing the securities to investors. These items are intended to provide sufficient information so that the financial risks involved can be evaluated by: a. market professionals to explain to all investors. b. government regulators to disclose to the general public. c. sophisticated investors only. d. unsophisticated investors.

Riley, an engineer for Shred-Gro Corporation, learns that Shred-Gro has developed a corn hybrid to triple the output of any farm. Riley buys 20,000 shares of Shred-Gro stock. He tells Tess, who buys 15,000 shares. After the new hybrid is announced publicly, the price of Shred-Gro stock increases. Riley and Tess sell their shares for a profit. Under the Securities Exchange Act of 1934, liability may be imposed on: a. Riley only. b. Riley and Tess. c. Riley, Shred-Gro, and Tess. d. none of these parties.

Omega Corporation combines its assets and debts with those of Xantha Corporation and a new corporation, OXCorp, is born. To accomplish this combination, which of the following procedures was not necessary?

Submission of the proposal to the court for approval

Limited Partnership ("LP") (Management)

Unless otherwise agreed to in the LP agreement, each General Partner has a direct and equal voice in the management of the LP. A Limited Partner may not retain limited liability if it participates in the management

Revocation (way to terminate an offer)

Unless the offer was made irrevocable, with notification to the offeree or offeree's agent (via express statement or action), the offeror can revoke an offer prior to the offeree's acceptance

Limited Partnership ("LP") (Liability)

Unlimited liability of all general partners, but limited liability for all limited partners beyond their capital contributions.

Mailbox Rule

Used by a majority of courts, the acceptance occurs at the time the offeree sends or delivers the acceptance communication by the agreed upon delivery mode

Alan promises to pay beth 500 to install a pump in his factory. Beth completes the istallation. The at of installaing the pump

is the consideration that creates alans obligation to pay beth

Al orders a computer, monitor, mouse and keyboard for IBM. They will be delivered on June 3, and will cost $1,500. On June 3, everything but the mouse arrives by mail. The mouse has a value of $20. What must Al pay, and when?

$1,500, when the mouse is delivered EXPLANATION: When a minor breach happens, it suspends the duty of the other side to perform until the minor defect is remedied.

Paul contracts to buy a Quality-brand computer from ROyal Networking Systems for $5,000, but Royal fails to deliver. Paul buys the computer elsewhere for $6,700. Paul's measure of damages is

$1,700 plus incidental damages.

$10,000.

Alpha Engineers, Inc., needs a drill to continue its operations and orders one for $1,500 from Mining Supplies Company. Alpha tells the supplier that it must receive the drill by Tuesday or it will lose $5,000. The supplier ships the drill late. Alpha can recover

$5,000.

Under what conditions may an employer require a Medical Exam?

(1) job-related (it must be related to the essential functions of the job) (2) required of all applicants for similar jobs. (However, drug testing is permitted.)

Ways to terminate an offer by operation of law

(1) lapse of time; **time starts counting when offer received **midnight of the day specified in the offer (2) death or incapacity of the offeror or offeree; (3) subject matter destruction; and (4) the K purpose has become illegal

List three common Collective Bargaining Conflicts

(1) whether an issue is a mandatory subject of bargaining, (2) whether the parties are bargaining in good faith, and (3) how to enforce the agreement.

List what Title VII prohibits.

* Discrimination in the workplace, * Sexual Harassment, and * Discrimination Because of Pregnancy.

Features of Franchise

*Licensor and Licensee Relationship exists. *License Fee: Ordinarily requires the franchise purchaser ("franchisee") to pay a price for the franchise license. *Geographical Restriction: Franchise agreement specifies the territory the franchisee firm can serve. *Supply Purchases: The franchise agreement may require that the franchisee purchase certain supplies from the franchisor at an established price. *Marketing: The franchise agreement may require that the franchisor's marketing platform applies to the franchise firm. *Revenues: The franchise agreement may require that the franchisee pays a certain percentage of revenues from the franchise firm to the franchiser. *Standards: The franchise agreement may require that the franchisee abide by certain quality standards relating to the product or service offered. *Termination: The franchise agreement typically covers the duration and termination components, but state and federal law protects franchisees regarding good faith and fair dealings by the franchiser.

Obligations that cannot be delegated

*Personal skills of the obligor contracted for *Prohibited by contract *Special trust placed on obligor *When performance by a third party will vary materially from that expected by the obligee under the K

Types of Equitable Remedies and Sample K Situations

*Rescission and Restitution - Undo or cancel a K, returning the nonbreaching party to pre-transaction state and requiring the parties to return the goods, property, or funds previously conveyed. *Specific Performance - Performance of the act called for in the K typically granted when monetary damages are inadequate. Sale of land and unique goods; personal services no because against public policy. *Reformation - The situation where an agreement has been entered into, but the K or other memorializing instrument, in its written form, does not express the intent of the parties so the court could order the K be modified to reflect the intentions, agreement, and understanding of the parties. The courts role is to utilize the evidence and determine the intent of the parties in order to correct the K language. However, the court's role is not to develop a new K. Ks where fraud or a mutual mistake or CNCs in blue pencil states are most often when courts reform contracts.

Rights of Directors

*Right to participate in the corporation's strategic and major policy decisions and to inspect the corporate books and records. *Right to Compensation. *Right to indemnification. If a director is sued for acts as a director, the corporation typically guarantees indemnification (i.e. reimbursement) or purchases liability insurance to protect the directors from personal liability for director acts.

List the Disparate Impact Case Steps

- Plaintiff must present evidence of discrimination - Defendant must show that the employment practice was a job-related business necessity - the plaintiff must now prove either that the employer's reason is a pretext or that other, less discriminatory rules would achieve the same results

The buyer has the right to inspect the goods...

...both before accepting and paying for them.

Three Qs to ask yourself on the MBE

1) Has an ENFORCEABLE K been formed? (I.e. Contract Formation) 2) Has the K been PERFORMED (OR, has the HAS the BEEN EXCUSED)? (Contract Performance) 3) What are the Remedies for BREACH? (Contract Remedies)

Remedies of Buyer

1) Right to cancel contract 2) right to obtain goods on insolvency 3) right to obtain specific performance 4) right of cover 5) right to replevy goods 6) right to recover damages 7)right to reject goods (nonconforming) 8) revocation of acceptance (nonconforming) 9) right to recover damages for accepted goods (nonconforming

Definition for an incidential beneficiary

1) one who benefits from a contract even though there is no contractual intent to benefit that person. 2) AND THUS, has no rights to enforce the contract. EXAM NOTE: On the exam, if the promise indicates that the promisor will pay the third party directly to relieve the promissee from a debt, then the third party is likely an intended beneficiary. In contrast, if the promisor is to pay the promissee in order that she may pay the third party, then the third party is most likely an incidental beneficiary.

Affects of Assignments

1. Unconditional assignment -The party making the assignment ("assignor") relinquishes all rights to the person receiving the assignment (the "assignee"), with the assignee having the ability to demand action from the other original party ("obligor"); The assignee however only has the contractual rights that the assignor had 2. Unassignable rights - Certain rights are unassignable: (1) prohibited by contract (subject to exceptions); (2) against statutory law or public policy; (3) materially increase or alter the risk or duties of the obligor unless agreed; and (4) personal in nature (unless all that remains is a money payment)

types of administrative agencies

1. executive agencies 2. independent agencies 3. hybrid agencies

A general partner is personally liable for partnership debts if the firm cannot pay its creditors.

True

disparate-impact discrimination

A form of employment discrimination that results from certain employer practices or procedures that, although not discriminatory on their face, have a discriminatory effect.

protected class

A class of persons with identifiable characteristics who historically have been victimized by discriminatory treatment for certain purposes. Depending on the context, these characteristics include age, color, gender, national origin, race, and religion.

A corporation is a legal entity that is: a. created by the local government. b. created and recognized by an entrepreneurial agency. c. managed internally by the federal government. d. created and recognized by state law in most case

A definition of the term contractual capacity would be: a. the ability to enter into a void contract. b. the legal ability to enter into a contractual relationship. c. the ability to physically write a contract. d. none of the above.

Registration Statement (Form S-1)

A document filed with the SEC by the issuer of securities that contains detailed information about the firm that plans to sell the securities to the public, which issuance is not exempt from registration. Contents of Registration Statement: ◘The securities being offered for sale, including their relationship to the registrant's other capital securities. ◘The corporation's properties and business (including a financial statement certified by an independent accounting firm). ◘Management of the corporation, including managerial compensation and other benefits and any interests of directors or officers in any materials transactions. ◘How the corporation intends to use the proceeds of the sale. ◘Any pending lawsuits or special risk factors.

Unilateral Contract

A promise for an act, K formed when offeree acts; K cannot be modified once Offeree starts performing, and K cannot be revoked upon substantial performance by the Offeree, unless terms specify otherwise

First State Bank merges with Community Bank. Only First State Bank remains. Community Bank held certain rights in certain financial assets. After the merger, First State Bank

Acquired all of the rights automatically.

Describe: National Labor Relations Board (NLRB)

Administers/interprets the employment law statutes and adjudicates labor cases • has five members, all appointed by the president • has no power to enforce its orders (If it is evident that the losing party will not comply, the Board must petition a federal appeals court to enforce the order.)

Specific Performance

Advantages: Attractive to nonbreaching party because it calls for the exact bargained for promise. Avoids problem of suing for damages, collecting the judgment and arranging another contract. For certain Ks, such as unique products, the actual performance is more valuable than the monetary damages Disadvantages: Limited use as typically available only when monetary damages are inadequate. Not available for personal services Ks

Rescission and Restitution

Advantages: The parties are returned to their position prior to the K. There are no court obligations Disadvantages: Not all contractual arrangements can be rescinded. If one party has performed a portion of the K, the other party has to compensate for value received - restitution. Under SOF, original contracts requiring a writing require a writing for rescission. The contracting parties have to make another K.

Reformation

Advantages: The parties' true intentions are reflected in the reformed agreement. The parties do not have to enter into a new K. Disadvantages: There may be inadequate information to demonstrate the true intentions of the parties. The court has a large amount of control/discretion

b. Jackson's bankruptcy will cause him to be dissociated from the partnership. He did not withdraw, and the partnership is not terminated because the other partners desire to continue the partnership

After Ross, Jones, and Jackson have been partners for three years, Jackson declares bankruptcy. What will happen to the partnership as a result if Jones and Ross determine to continue the partnership and the partnership agreement contains a provision allowing such? a. Nothing. The partnership will continue as always. b. Jackson will be dissociated from the partnership. c. The partnership will terminate due to the bankruptcy. d. The partnership will terminate due to withdrawal of Jackson

Mutual Consent

Agreement between the principal and the agent.

Billy and Chrysler have a valid contract which calls for Billy to make car payments for the next three years. Billy runs out of money, and needs Amanda to help him make payments. Which of the following situations is/are a novation?

Amanda promises the bank she will make the payments, and the bank agrees. EXPLANATION: A novation occurs when all parties agree to have a third party substitute for the original parties.

Liquidated Damages - Definition and Enforceability

An amount contractually stipulated as a reasonable estimation of actual damages to be recovered by one party if the other party breaches. Not enforceable b/c usury-- A term fixing unreasonably large liquidated damages is unenforceable on grounds of public policy as a penalty. Enforceable-- A provision for liquidated damages is enforceable and not construed as a penalty if the amount of damages stipulated in the contract is reasonable in relation to either the actual damages suffered or the damages that might be anticipated at the time the contract was made.

A suspect who is informed of her right to remain silent is automatically protected from having her confession entered as evidence against her.

False

A said to B, "I'll give you $100 for that bracelet." B replied, "$135." A said, "NO thanks." B then said that B accepted the $100, but A was no longer interested and said there was no contract. B insists there is a contract. Result?

B's counteroffer of $135 terminated A's offer of $100.

Nominal Damages

B/c Damages do not need to be alleged in a cause of action for breach, and if no damages are alleged or none are proved, THEN the plaintiff is still entitled to a judgment for "nominal" damages (e.g., one dollar).

Describe: Equal Employment Opportunity Commission (EEOC)

Before a plaintiff can file suit, the must first file a complaint with the EEOC.

Bell Medical Education Service enters into a contract to employ Chris as an instructor for two years to begin May 1. One month before the term begins, Bell is underbid by a competitor and loses a major client, Delta Hospital Center. Bell now refuses to hire Chris. Bell's failure to hire Chris is a. a material breach. b. a minor breach. c. Chris's breach. d. no breach.

Bell Medical Education Service enters into a contract to employ Chris as an instructor for two years to begin May 1. One month before the term begins, Bell is underbid by a competitor and loses a major client, Delta Hospital Center. Bell now refuses to hire Chris. With respect to Chris's obligations, Bell's repudiation most likely a. discharges Chris from the contract. b. has no effect on Chris's obligations. c. increases Chris's obligations under the contract. d. suspends Chris's obligation to perform.

Bill offers Carol, a building inspector, money to overlook the violations in his new warehouse. Carol accepts the money and overlooks the violations. The crime of bribery occurred when

Bill offered the bribe.

Blue sky laws: a. are state laws regulating intrastate sales of securities. b. are federal laws regulating mutual funds. c. are municipal ordinances outlawing commercial activity on Sundays. d. are interstate laws governing non-securities sales

Bob signs a five-year contract with CSB, a television station, to host a TV show. One year later, CSB replaces Bob with a younger host. Bob is paid, but does not appear on TV. Bob sues CSB for breach of contract. The court is most likely to rule in favor of

Bob, because he lost the opportunity to build and maintain his pro&SHY;fessional marketability

Executed Contract

Both parties have fully performed the contract; If one party has fully performed and the other party has not fully performed the contact, the completed portion is executed and the uncompleted portion is executory

Ann, an emergency medical technician, renders medical care to Brad, a minor. Under the ruling og the court in Case 13.1, Yale Diagnostic Radiology v. Estate of Harun, Ann may recover the cost from

Brad or Brad's parent

Build-It-Rite Corporation is a public company that is preparing to issue securities that do not qualify for an exemption from registration. This means that Build-It-Rite must: a. file a registration statement with the SEC. b. issue the securities through an online registration site. c. register the securities with a national stock exchange. d. none of the above.

Building Restoration, Inc. ("BRI") enters into a contract to refurbish an old train depot for Casual Dining, Inc. to open as Eat Up! Restaurant. BRI completes all but a minor piece of the work promised in the contract. Casual Dining most likely is entitled to a. damages for the uncompleted portion. b. nothing. c. reformation. d. specific performance.

Building Restoration, Inc. ("BRI"), enters into a contract to refurbish an old train depot for Casual Dining, Inc., to open at Eat Up! Restaurant. BRI completes most of the work promised in the contract. If Casual Dining can easily hire another contractor to complete the work, it is entitled to a. damages. b. nothing. c. reformation. d. specific performance

Sole Proprietorship (Management)

Business proprietor has sole management rights

Sole Proprietorship (Profits)

Business proprietor personally owns all profits.

Cotton Products Corporation is a publicly traded company whose shares are traded in the public securities markets. The Securities Act of 1933 requires Cotton Products to disclose financial and other significant information concerning its securities in order to: a. increase corporate accountability by imposing responsibility on chief corporate executives. b. prevent insiders from trading among themselves. c. protect investors. d. provide a "safe harbor" for companies that make forward-looking statements

Handy Hardware Store agrees to hire Ilsa for one year at a salary of $500 per week. When Handy cancels the contract, Ilsa spends $100 to obtain a similar job that pays $450 per week for a year. Ilsa is entitled to recover a. the amount of the wages that Handy promised only. b. the difference between the wages at the two jobs only. c. the difference between the wages at the two jobs plus $100. d. $100 only.

C. the difference between the wages at the two jobs plus $100.

Define: Litigation in relation to Affirmative Action.

Courts have the power under Title VII to order affirmative action to remedy the effects of past discrimination.

Jill is a lawyer on the staff of international marketing group. They apply the utilitarian theory of ethics in the business context. Utilitarianism focuses on

Consequences of an action

b. Consideration is something of value that a person gives in exchange for a promise of some sort

Consideration may be defined as: a. a socially approved way to provide for the poor. b. something of value given in exchange for a promise. c. an arrangement for transferring and allocating risk. d. a way to promote healthy living

Office Company and Kappa Company wish to combine all assets, stock, and personnel into a new firm to be called OK Corporation. This is a

Consolidation.

Omega Corporation combines its assets and debts with those of Xantha Corporation and a new corporation, OXCorp, is born. The formation of OXCorp is an example of

Consolidation.

Corporation A defends against a breach-of-contract suit by Company B claiming that the deal for the sale of assets was unfair because the consideration for their contract was inadequate. If, as Corporation A claims, the consideration in this problem is inadequate, it may indicate a lack of a. accord in Corporation A's satisfaction with the value of the deal. b. bargained-for-exchange. c. flexibility on the part of Company B. d. "substance" or "weight" in the terms of the contract

Cafe Corporation plans to merge with Cream & Sugar, Inc. Before the merger, Cafe brought a suit against a rival firm for trademark infringement. After the merger

Cream and Sugar may continue the suit

Limited Liability Company ("LLC") (Profits)

Distributions can be specified in the LLC Agreement. Otherwise they are based on capital contribution proportion

Types of Franchises

Distributorship: The manufacturer governs how the retailer distributes its product by granting the franchisee the authority to distribute the manufacturer's goods using the manufacturer's name and trademark. The franchisee typically pays a fee or purchases a minimum inventory for these rights. Example: Automobile dealerships. Chain-style operations: The franchisor provides the franchisee a license to make and sell its products or distribute services to the public from a retail outlet serving an exclusive territory. Example: Fast-food chains. Manufacturing/processing plant arrangement: A franchise that provides an organization with the right to produce or manufacture a product and sell it to the public, using the franchisor's name and trademark. Example: found mostly in food and beverage industry (i.e. soft-drink bottling companies)

First State Bank merges with Community Bank. Only First State Bank remains. . The terms of the merger agreement conflict with First State Bank's articles of incorporation. These articles of incorporation

Do not block the merger and are deemed amended to include any differences.

Corporation Types

Domestic Corporation - A corporation within its home state (i.e. the state of its incorporation). Foreign Corporation - A corporation in any state outside of the home state. Alien Corporation - A corporation formed outside of the United States but does business in the United States. Public Corporation - A corporation that offers securities (stocks/shares or bonds/loans) for sale to the general public, typically through a stock exchange. Private Corporation - A corporation that does not offer or trade its company's securities to the general public on through a stock exchange or over the counter market, but rather the company's securities are offered, owned, and traded or exchanged privately. Close Corporation - A "small" corporation whose shares are held by family or relatively few persons. There is no trading market for shareholders. Shareholders are generally officers and board members. Privately-owned Corporation - A government-owned corporation. Nonprofit Corporation - A corporation that typically uses surplus profits to achieve its mission rather than distribute them as a dividend or use for shareholder value maximizing purposes. In the U.S., many nonprofits have the IRS designation 501(c).

Commercial Construction, Inc. (CCI), contracts to build a restaurant for Don, with Don's payment due on May 1. On May 1, Don's bank is closed, and for this reason, Don claims it cannot pay CCI on time. CCI files a suit against Don. In this situation

Don is in breach of contract.

Dora, an accountant, uses undue influence to induce her client, Emily, to invest in Fiery Stocks, Ltd., a business with little potential. When Emily learns the truth, she can a. do nothing as she has no defenses. b. enforce the contract but not rescind it. c. enforce the contract or rescind it. d. rescind the contract but not enforce it

Elle, a minor acting on her own without her guardian, signs a contract to buy a car. Later, after taking possession of the car, Elle disaffirms the contract. She a. can keep the car. b. must return the car. c. can sell the car to her twenty-one year old brother. d. none of the above.

Describe: Defamation

Employers may be liable for defamation when they give false and unfavorable references about a former employee.

Describe: Intentional Infliction of Emotional Distress (Tort Law)

Employers who condone cruel treatment of their workers face liability under the tort of intentional infliction of emotional distress

Contractual Employment

Employment arrangement pursuant to a formal agreement, specifying the terms of such employment arrangement

At Will Employment

Employment relationship in which either party can break the relationship without liability, provided that there is no express contractual provisions providing otherwise and where the employee is not a part of a collective bargaining arrangement (i.e. union)

Eric holds 1,000 pounds of perishable fruit for Fresh Stuff Corporation which it was suppose to purchase. Fresh Stuff does not pay for the fruit. Eric sells the fruit to Green Grocers, Inc. This sale represents a. a breach of contract. b. a mitigation of damages. c. rescission and restitution. d. specific performance

Intoxicated, Clio agrees to sell her restaurant, Diner's Cafe, to Evan for half of its real market value. This deal is most likely void if

Evan fruadulently induced Clio to become intoxicated

Eve files a suit against Financial Associates, Inc. (FA), to enforce an oral contract that would otherwise be unenforceable under the Statute of Frauds. The court could enforce such a contract if

Eve foreseeably, justifiably, and detrimentally relied on a promise by FA

An incidental beneficiary can sue directly to enforce a promisor's promise.

False

Consideration is required to modify a contract for the sale of goods.

False

Criminal liability does not depend on the commission or omission of an act.

False

Denise is purchasing a flat screen plasma television from Ellie for $523.00. Ellie is in a hurry and does not have time to write a receipt. If Denise has reason to file a claim against Ellie will she be successful?

False

In a limited partnership, the liability of a general partner is limited to the amount of capital he or she has invested in the partnership.

False

In most cases, a merchant offeree may ignore any offer without fear of acceptance of the offeror's offer.

False

Julie wants to purchase a violin for her audition with the Miami Orchestra. She goes to Ms. Mabels house of violins in her home town to purchase a new violin. When she enters the store Ms. Mable greets and tells Julie that the "A Core" violin will work "just fine" for her debut and is on sale today for $152.00. Julie goes to her audition and the Director of the Miami Orchestra tells her that the Miami O. is a professional orchestra and why did she come to her audition with a "child like" violin. He tells Julie she is apparently not ready for the Miami Orchestra and tells her to leave. Julie in tears calls her dad and tells him what is happening and he immediately files a complaint against Ms. Mable for Implied Warrent of Merchantability.

False

Flux Corporation is a publicly traded company whose shares are traded in the public securities markets. Under the Sarbanes-Oxley Act of 2002, Flux is subject to the direct corporate governance requirements of: a. any other public company with which Flux exchanges shares. b. any state in which Flux does business. c. the federal government. d. the state in which Flux is incorporated

Doug gains access to government records and alters certain dates and amounts in his favor.

Forgery

Ira signs Jill's name, without her authorization, to the back of a check made out to her. This is

Forgery

C Corporation ("C-Corp") (Formation and Restrictions)

Formed in compliance with applicable state's statutory requirements, by filing an official document with the applicable state unit. •The traditional state unit is the Secretary of State. •A legal "person" under state and federal law with rights, as with individual, to due process, equal protection, free speech, access to courts, and freedom from unreasonable search and seizure. However, has no 5th amendment right to remain silent. *Governing Document: Certificate/Articles of Incorporation, Bylaws, and Shareholders Agreement (if shareholders and corporation enter into such).

Goals and Provisions of SOX

Goals: ◘Make Reporting Company management responsible for financial reporting.◘Provide additional means of investor transparency.◘Increase the internal controls and corporate auditing standards. Provisions:◘Requires CEOs and CFOs to take responsibility for accuracy of financial statements filed with the SEC. ◘Requires independent auditor report except for certain small companies (companies of less than $75 million market capitalization).

Callie owns two trucks. She offers to sell the Dodge for $20,000 to Evan, who accepts. She offers to sell the Ford for $20,000 to Gwen, who says, "Too much." Callie's offer was terminated by

Gwen only

bona fide occupational qualification (BFOQ)

Identifiable characteristics reasonably necessary for the normal operation of a particular business. These characteristics can include gender, national origin, and religion but not race.

Executory, Bilateral, Express Contract (becomes executed after Gloria completes acting and receives the final payment)

Identify types of Contract: Producer says to Gloria, "I'll pay you $2 million to star in a my new romantic comedy, A Promise for a Promise, which we are shooting three months from now in Santa Fe." Gloria says, "It's a deal."

Define: Government Contracts in relation to Affirmative Action.

If an employer found that women or minorities were underrepresented in its workplace, it was required to establish goals and timetables to correct the deficiency.

good faith

If contract leaves open some particulars for performance, parties must exercise _____ _____ and commercial reasonableness when later specifying details

What determines the place of tender?

If it is a shipment contract, then it would be where the goods originated, if it a delivery contract, the place of tender would be where it was going to.

Rejection (way to terminate an offer)

If the offeree rejects the offer, the original offer is terminated, effective when the offeror or the offeror's agent receives the rejection 1. Counteroffer: An offeree's response to a original offer, where the offeree rejects the original offer and issues a new offer 2. Mirror Image Rule: Requires the acceptance of an offer for the same terms as the offer, otherwise a counteroffer exists

b. In an operating agreement, the members of the LLC can decide and document how to operate the various aspects of the business

In an LLC, the members themselves can decide how to operate the various aspects of the business by forming: a. nothing. b. an operating agreement. c. the articles of incorporation. d. articles of dissolution.

Conditions Precedent

In contrast to an absolute promise, the condition in a K that must be met before a party's promise of performance becomes absolute. If the condition(s) precedent is not met or does not occur, the parties are discharged. With an absolute promise, nonperformance results in a breach of contract by the nonperforming party

Third Party Rights - Third Party Beneficiaries Rights

Intended Beneficiary: As the intended beneficiary of the K, the 3rd party has legal rights and can sue the promisor directly for a breach of K. Incidental Beneficiary: An incidental beneficiary cannot sue to enforce the K (Most contracts will have language stating that there are no third party beneficiaries to the K. One reason that most Ks do not contain 3rd party beneficiaries is that the contracting parties want to make sure that the rights and obligations by K flow to the contracting parties)

Jill and Karl contract for the sale of Jill's horse for $1,000. Unknown to either party, the horse has died. Karl is a. entitled to another horse of equivalent value. b. not required to pay due to the mutual mistake. c. not required to pay due to the unilateral mistake. d. required to pay because he assumed the risk the horse might die

affirmative action

Job-hiring policies that give special consideration to members of protected classes in an effort to overcome present effects of past discrimination.

Joe is the shareholder of American computers inc. Joe will be deemed to have a fiduciary duty to American Computers Inc. and to the minority shareholders if.

Joe has a sufficient number of shares (controlling shareholders) to exercise de facto control of the corporation

Limited Liability Company ("LLC") (Admission)

LLC interest can be transferred, but the transferee member does not have full ownership rights of a member until admitted into the LLC by the other members (i.e. transferee member will have rights to the profits and distribution allocations)

Lilly is a shareholder in Matchless Corporation with preemptive rights. With respect to these rights, Lilly can: a. buy a prorated share of a new issue of stock before other buyers. b. put her shares for purchase by a buyer. c. "preempt" managerial decisions that affect shareholders. d. sell a prorated share of new issue of stock before other sellers

If the conduct of the international software corporation is perceived as unethical it will likely suffer

Lost profits and negative publicity

Luke is a director of Motor Parts Corporation. Luke makes decisions with respect to Motor Parts in good faith, in what he believes is the firm's best interest, and without violating any duties owed to it. If, despite these circumstances, Luke makes a business decision that has a negative result for Motor Parts, under the business judgment rule he is: a. immune from liability. b. liable only to the extent that he gained as a result. c. liable only to the extent that Motor Parts suffers as a result. d. wholly liable.

Maria and Barb are competing for head cheerleader. With intent to cause emotional harm to Maria, Barb repeatedly made terrible, harassing, and obscene phone calls to Maria. Maria was so frightened by the calls that she suffered a nervous breakdown requiring her to be hospitalized. Under these facts:

Maria can sue Barb for the tort of intentional infliction of emotional distress.

c. Not a valid offer because Mary does not seriously intend to sell and one of the three elements of an offer is current intent to make an offer which is based on a "reasonable person" standard

Mary tries to start her car with no success. She yells that she will sell the car to anyone for $10. Nick, a passerby who owns Nick's Pre-owned Autos, hands Mary $10. This is a. a valid acceptance because Mary is seriously frustrated. b. a valid acceptance because Nick is a car dealer. c. not a valid offer because Mary does not seriously intend to sell. d. not a valid acceptance because Nick is a car dealer

c. Paul rejected the original offer from NuCell and made a counteroffer because he rejects the original offer and makes a new offer

NuCell Phone Company offers to buy a laser printer, with a case of paper and an extra cartridge, for $200 from Office Products, Inc. ("OPI"). Paul, OPI's representative says, "Okay, but no paper and no extra cartridge." Paul has a. accepted the offer. b. made a counteroffer without rejecting the offer. c. rejected the offer and made a counteroffer. d. rejected the offer without making a counter offer

First State Bank merges with Community Bank. Only First State Bank remains. Community Bank owed money to creditors. After the merger, with respect to the debts, First State Bank is

Obligated to pay all.

First National Bank decides to consolidate its operations with Overseas Bank to create a new firm called International Bank. Overseas Bank owed money to creditors. International Bank is

Obligated to pay the debts.

b. Contract law gives parties a way to enforce many of the promises that are made to them

One of the main purposes of contract law is: a. to ensure that one party does not threaten another. b. to ensure that certain types of promises made among private parties are enforceable. c. to discourage harms against society. d. To discourage misuse of the environment.

b. Section 10(b) of the 34 Act and SEC Rule 10b-5 prohibits insider trading of securities.

One of the major goals of Section 10(b) of the 34 Act and SEC Rule 10b-5 is: a. to promote blue sky laws. b. to prevent insider trading. c. to prohibit underwriting. d. to ensure that proxies be used when voting for directors.

Quality Contractors contracts to build a warehouse for Retail Storage Company. Quality completely performs pursuant to the contract. Retail Storage is entitled to a. damages. b. rescission. c. specific performance. d. nothing more.

Rory threatens physical harm to force Susan to sell her business, Toney Tours, Inc., to Rory for a below-market price. This is a. a legitimate business tactic. b. duress. c. fraud. d. undue influence.

Roy and Sheila are parties to a contract. They subsequently agree that Tony should take Roy's place and assume all of his rights and duties under the contract. This is a. a consideration. b. a modification. c. an accord and satisfaction. d. a novation.

Rural Utility, Inc. enters into a contract with Shovel Excavation Service to dig up, replace, and rebury Rural's cables in a certain location. Rural advances Shovel 10% of its cost. If the parties rescind the contract, Shovel's refund of the payment would be a. a penalty. b. liquidated damages. c. restitution. d. specific performance

d. SEC Rule 10b-5 is applicable to virtually all cases concerning the trading of securities, whether in organized exchanges, in over-the-counter markets, or in private transactions.

SEC Rule 10b-5 is applicable: a. only when securities are traded in over-the-counter markets. b. only when securities are traded in organized exchanges. c. only to private securities transactions. d. in virtually all cases concerning the trading of securities.

Sal contracts with Tasty Pizza Company to deliver its products. Later, both parties change their minds and mutually agree to terminate the contract. After mutually terminating the contract, the next day, Sal again offers to deliver Tasty's products. Tasty is willing to deal with Sal, but at a new price. Sal and Tasty a. can agree to a new contract, but it cannot include a new price. b. can agree to a new contract that includes a new price. c. must perform their original contract. d. Must perform the part of their original contract that is executory.

Snow Corporation distributes beverages in the greater Northwest. Snow's board of directors can delegate some of its functions to: a. Snow's incorporators. b. Snow's officers. c. Snow's shareholders. d. Snow's creditors.

Describe: Picketing

Striking workers are permitted to establish picket lines at the employer's job site and to urge all others—employees, replacement workers, and customers—not to cross the line.

Candy Corporation has a right of action against Donna. Sweets, Inc., merges with Candy Corporation. Sweets absorbs Candy. After the merger, Candy's right of action against Donna can be exercised by

Sweets.

c. The 1933 Act focuses on reporting requirements.

The Securities Act of 1933 was designed to do which of the following: a. regulate the operations of national stock exchanges. b. oversee and regulate the work of national securities associations. c. prohibit various forms of fraud and stabilize the securities industry by requiring disclosure of all relevant information concerning the issuance of securities to the public. d. promote the effective, efficient, and nonfraudulent use of proxies by shareholders.

Ollie buys a cup of coffee for $2, a magazine for $5, and a boombox for $600. The requirement of a writing for the enforceability of a contract for a sale of goods at, or for more than, a certain price is governed by

The Uniform Commercial Code

The best definition of a quorum is which of the following: a. a quorum is 51 percent of all shareholders. b. a quorum is 66 percent of all directors. c. a quorum is the minimum number of members of a decision-making body that must be present before business may be transacted. d. a quorum is the number of voters who must agree to a revision before corporate bylaws may be changed or otherwise amended

b. Despite their drinking, boasting, and bragging, the parties created a valid contract, which had to be performed. The party seeking to void the contract would have to prove that he/she lacked the mental capacity to comprehend the legal consequences

The case of Lucy v. Zehmer involves an offer to sell property during an evening of drinking. If the decision turns on the element of legal contractual capacity, the court mostly likely will hold that: a. because the parties were drinking, there was no valid contract. b. despite the fact that the parties were drinking, there was a valid contract. c. there was no clear acceptance of the contract terms. d. the parties failed to clarify the essential terms of the contract due to excessive drinking.

A core requirement for strict product liability is that the product must be in a defective condition when the manufacturer sold it.

True

Omega Corporation combines its assets and debts with those of Xantha Corporation and a new corporation, OXCorp, is born. OXCorp assumes

The debts and assets of Xantha and Omega.

Ordinary measures (Seller's (lessor's) remedies when buyer (lessee) breaches):

The difference between the contract price of the goods and the market price at the time and place for tender of the goods.

Director or Officer Liability

The director's / officer's failure to meet the duty of care and duty of loyalty obligation subjects it to personal liability

Performance

The fulfillment of a contracting party's obligation arising under a K, and the typical way of discharging one's contractual responsibilities

General Partnership (Dissolution)

The general partnership terminated pursuant to the terms of the agreement, by the death of one or more of the partners or by the withdrawal of a partner

d. These are the characteristics of a limited liability company

The key characteristics of a limited liability company ("LLC") are? a. The tax characteristics of a corporation plus the liability of directors. b. The tax characteristics of a partnership plus the liability of partners. c. The tax characteristics of a corporation plus the liability of a partnership. d. The tax characteristics of a partnership plus the liability of a corporation.

Quorum

The minimum number of parties within a group (e.g. directors or shareholders) that must be present to conduct official organizational business, which minimum number usually is a majority

Duty of Care

The obligation to act in good faith and the best interest of the corporation, which includes: *Making an informed and reasonable decision (i.e. perform due diligence before making a decision); *If expertise is needed, engage and rely on competent consultants and experts; and *Exercise reasonable supervision over officers. **Director Dissent: A dissenting director that has his/her dissent recorded in the minutes/consent is rarely held liable for breach of duty of care on that applicable action.

Communication of offer to offeree (element of a contract)

The offer must be communicated to the offeree, which communication gives the offeree the power to transfer the offer to a binding, legal obligation with acceptance

Agency Principal

The recipient (i.e. the person for whom an agent is acting)

Alternative Dispute Resolution ("ADR")

The resolution of disputes in ways other than those involved in the traditional judicial process such as the court process and proceedings

Jersey Resorts, Inc., and Kaiser Hotel Corporation plan to merge. The articles of merger will be filed, most likely with

The state secretary of state.

Flow-through Tax Treatment

The tax treatment for entities where the income "flows through" to the investors/owners (i.e. the income of the organization is treated as the income of the investors/owners)

Double Taxation

The taxation of profits at the corporate tax level, then again when shareholders receive dividends

Discharge

The termination or completion of or release from a contractual obligation

Affects of Delegation

The transferring party ("delegator") remains liable to the other party if the party to whom the duty has been delegated ("delegatee") fails to perform the contract obligation

A young woman received an unordered diamond ring in the mail along with a bill for $850. She called the store and was told it was a sales promotion and she should pay for the ring or return it. She said, "Thank you for the free ring." The young woman kept the ring, did not pay, and was sued. Result?

The young woman may keep the ring without liability.

Theo and Uma orally agree on the sale of Theo's Fitness Center to Uma and note the terms on a sheet of the center's stationery, which includes the Center's letterhead but which neither party signs. This agreement is most likely enforceable against

Theo only

Remedies under UCC - for the buyer

These depend on the nature of the seller's conduct AT THE TIME Seller's performance is required per the K agreeement: THRESHOLD (NOTICE of SELLER'S BREACH: (where the seller BREACHES the K by doing nothing, or failing to make a nonconfirming tender that does NOT fall into an exception from the PTR; AND BUYER GIVES NOTICE of EITHER KIND OF BREACH TO THE SELLER W/in REASONABLE TIME that BUYER DISCOVERS or SHOULD HAVE discovered that seller's BREACH) 1) Damages a- Market price (price at time of Breach, at place where tender supposed to have occurred per the K) minus K price b - Incidental damages - (damages incdent to sell's failed perf, like transit costs, inspect, etc) c - Consequential Damages - losses from general or certain req and need that seller had reason to know and could NOT have reasonably prevented by BUYER getting substitue goods) Can K these out, UNLESS uncsoncionable 2) OR ALTERNATIVELY COVER (the repalcement price munis K price, to comp buyer for purchasing similar goods elsewhere) 3) OR, Spefifice Perf, but only for UNIQUE goods, or inabiity to cover. 4) Replevin (if partial payment for identified goods, and buyer tenders unpaid portion of price to seller OR can't Cover) - buyer wants the undelivered goods from seller 5) Where Nonconfirming Tender - Right to accept or reject, with right to inspect before reching either choice IF REJECTED, can seek remedies available as if NO TENDER was made by Seller.

Definition for BARGAINED-FOR Consideration

This requires a deal in which 1) the parties exchange promises 2) involving EITHER (a) Some legal detriment [to promisee] (refraining from something you have a legal right TO DO, or doing something you have a legal right NOT to do); OR (b) benefit [to promisor] between the parties; 3) And EITHER the detriment OR benefit were a bargained for exchange 3) Regardless of the objective value of the benefit to the promisor. (courts do NOT evaluate the ADEQUACY of the consideration).

The UCC statute of limitations is four years. May parties to a contract lengthen or shorten this period by mutual consent?

Yes, they may shorten it EXPLANATION: The time period can be reduced to as little as one year, but cannot be extended beyond four years.

Multiple Choice: Jessica was a former employee of Mark. When potential employers called Mark for a reference about Jessica, he stated she was not a very good worker and had been fired for excessive absences. He said he believed Jessica was on drugs, but he did not know for sure. Jessica learned what Mark was saying and sued him. In most states: a. it was legal for Mark to say what he said if it was true and Mark was not motivated by ill will. b. it was legal for Mark to say what he said, since courts have consistently ruled that former employers are immune from lawsuits for giving references. c. it was not proper for Mark to say what he said, since courts have consistently ruled that former employers should not give references over the telephone or in writing without the former employee's written authorization. d. though it was proper for Mark to talk about Jessica's work-related history, he acted improperly when he said he thought she was on drugs.

4. Multiple Choice: The New York City Fire Department has a height requirement of at least 5'10" for all employees. If challenged under Title VII, the requirement: a. probably violates Title VII unless the City can show there is a necessary purpose for the requirement. b. is valid as a bona fide occupational requirement. c. is valid because it is a "reasonable business necessity." d. is valid because it does not discriminate against a protected group.

a (This requirement probably violates Title VII because it has a disparate impact on a protected group.)

Over the Internet, Alpha Contractors, Inc., arranges to lease storage space from Beta Services Company. To complete the deal, Alpha clicks on a button that says, in reference to certain terms, "I agree." Most likely, the parties have

a binding contract that includes the terms.

Greg's agrees to buy Hal's Sports Store on condition that he is approved by First State Bank for the financing. This approval is

a condition precedent

Tomato Farms (TF) offers to sell Unified Grocers, Inc., a boxcar load of tomatoes. The offer is sent via overnight delivery because an acceptance is required urgently. It would be most reasonable for Unified to accept via

a fax sent to TF as soon as the offer is received

Corner Convenience (Store) (CCS) takes out a full-page ad in a local newspaper and runs a thirty-second commercial on a local television station, offering a reward for information leading to the apprehension of a certain criminal. CCS could normally terminate the offer by placing

a full-page ad in the paper and a thirty-second commercial on the local station

. Al and Shelia are parties to a contract. They subse&SHY;quently agree that Bill should take the place of Al and assume all of his rights and duties under the contract. This is

a novation

Jill promises to buy Kent's handheld game-player for $75. Kent is

a promisee

Mica, a minor, signs a contract to pay Natural Health Club a monthly fee for twenty-four months to use it facilities. Six months later, after reaching the age of majority, Mica continues to use the club. This act is

a ratification

An officer of International Sales Corporation makes overtures to a representative of Global Distribution, Inc., regarding a business deal. Under the objective theory of contracts, the officer's words and conduct are held to mean whatever

a reasonable person in the representativ'es position would think they meant

Professionals have a duty to perform their jobs at the level of:

a reasonable professional in the same business.

Flo enters into a contract under Gail's threats. Later, Flo refuses to perform, claiming that she acted under duress. Flo sues to rescind the contract. Gail claims that duress is a defense to enforcement of a contract, not a ground for re¬scission. The court will probably rule in favor of a. Flo only. b. Flo and Gail. c. Flo or Gail, but not both. d. Gail only.

a. Flo only.

Ideal Gadgets, Inc., and Jolly Outlets Corporation enter into a contract for a sale of kitchenware. The contract requires Ideal to deliver the goods to Ladle Carrier Company for transport to Jolly's warehouse in Metro City. Risk of loss passes to Jolly when a. Ideal delivers the goods to Ladle. b. Ideal identifies the goods to the contract. c. Ladle transports the goods to Jolly's warehouse. d. the goods arrive in Metro City.

a. Ideal delivers the goods to Ladle.

International Gem Corporation agrees to sell Jewelry Outlets, Inc. (JOI), fifty new diamonds, but the contract does not specify a place of delivery. JOI is expected to pick up the goods. The place of delivery is a. International's place of business. b. JOI's place of business. c. the Annual Gems and Jewels Convention. d. the U.S. Postal Service office nearest to JOI's place of business.

a. International's place of business.

Jelly Jar Company includes in its online offers a provision that indicates any disputes arising under the contract must be resolved in Kansas. Lena, a resident of Maine, accepts Jelly Jar's offer. If a dispute arises, a court will most likely rule that it must be resolved in a. Kansas. b. Kansas or Maine. c. Maine. d. the location selected by the first party to file a suit.

a. Kansas.

Lou and Mira want to rescind their contract under which Lou sold an MP3 player to Mira for $50. To rescind the contract a. Lou must return the $50 and Mira must return the player. b. Lou must return the $50 only. c. Mira must return the player only. d. the parties can keep the "benefits" of their bargain.

a. Lou must return the $50 and Mira must return the player.

Nori files a suit against Mica to enforce an oral contract for the sale of lakeshore property that would otherwise be unenforceable under the Statute of Frauds. The court could enforce the deal if a. Nori foreseeably and justifiably relied on Mica's promise to her detriment. b. Mica denies the existence of any contract. c. neither party has begun to perform. d. the deal does not involve customized goods.

a. Nori foreseeably and justifiably relied on Mica's promise to her detriment.

Oakley posts a defamatory remark about Pierre in "Roominate," an online social network maintained by SocNet, Inc., an Internet service provider. Most likely to be held liable for the remark is a. Oakley. b. Pierre. c. Roominate. d. SocNet.

a. Oakley.

Natural Foods, Inc., orders "Grade A" oil from Olive Grove Farms to process and sell to Pic 'N Pay Grocers. Olive Grove ships "Grade B" oil, which Natural Foods accepts. To recover damages for the nonconformity, Natural Foods must give notice of the breach within a reasonable time to a. Olive Grove only. b. Olive Grove, Pic 'N Pay, and the appropriate government agency. c. Pic 'N Pay only. d. the appropriate government agency only.

a. Olive Grove only.

Quik Sales Corporation orders goods from Re Stock Company. Re plans to market the goods to consumers generally. Re identifies the goods. Before they are shipped to Quik, an insurable interest in the goods exists in a. Quik and Re, but not consumers generally. b. Quik only. c. Quik, Re, and consumers generally. d. Re only.

a. Quik and Re, but not consumers generally.

Ralph offers to sell Sophie, who is seventeen years of age, a car about which Ralph intentionally misrepresents several material facts. In reliance on the misrepresentations, Sophie buys the car. To prove fraud in this transaction, Sophie would have to show that a. Ralph intentionally deceived Sophie. b. Ralph made statements that were obviously exaggerated. c. Sophie does not know anything about cars. d. Sophie is under eighteen years of age.

a. Ralph intentionally deceived Sophie.

Grover contracts to sell two tracts of land to Hank. Both parties believe that the two tracts are adjacent, but in fact they are not. Grover is still willing to sell the land, but under these circumstances the deal would adversely affect Hank. The parties' belief about the adjacency of the property is a. a bilateral mistake. b. a fraudulent misrepresentation. c. a unilateral mistake. d. unconscionable.

a. a bilateral mistake.

Sid and Tony enter a contract for a sale of Sid's collection of electric guitars. Before the time for performance, Sid tells Tony that he does not want to deliver the guitars. Anticipatory repudiation is a. a breach of contract. b. a compromise between two parties who are unable to perform. c. a remedy available only to a breaching party. d. a remedy available only to a nonbreaching party.

a. a breach of contract.

Mica buys "Nature," a movie, through Open View, an online entertainment vendor. Before completing the purchase and downloading "Nature," Mica must review a warning not to make and sell a copy of it. This warning is a. a browse-wrap term. b. a click-on agreement. c. a shrink-wrap agreement. d. none of the choices.

a. a browse-wrap term.

Kelly and Lucas sign a written contract for the sale of Kelly's Coffee Kiosk to Lucas. The parties intend their written contract to be a final statement of the terms of their agreement. The writing that Kelly and Lucas signed is a. a completely integrated contract. b. a conditionally integrated contract. c. an agreeably integrated contract. d. an obviously integrated contract.

a. a completely integrated contract.

The Texas Supreme Court decides the case of Livewire Co. v. Power Corp. Of nine justices, five believe the judgment should be in Livewire's fa¬vor. Justice Bellamy, one of the five, writes a separate opinion. The four justices who believe the judgment should be in Power's favor join in a third separate opinion. Bellamy's opin¬ion is a. a concurring opinion. b. a dissenting opinion. c. a majority opinion. d. a per curiam opinion.

a. a concurring opinion.

Lou claims that he and Myra entered into an implied-in-fact contract. To establish this contract, it is not necessary to show that a. a court imposed a promise in the interest of fairness. b. Lou expected to be paid for providing services or prop¬erty. c. Lou provided Myra with services or property. d. Myra failed to reject services or property provided by Lou.

a. a court imposed a promise in the interest of fairness.

Rural Development Corporation (RDC) and Sid enter into a contract for the clear-cutting of RDC's fifty-acre tract for which RDC agrees to pay Sid. Sid transfers his duty to log the tract under the contract to Timber Logging Company. Timber is a. a delegatee. b. an assignee. c. an obligee. d. a prohibitee.

a. a delegatee.

Reba and Sly enter into a contract by which Reba promises to deliver newly printed marketing brochures to Sly. Reba later transfers her duty under the contract to Troy. Reba is a. a delegator and an obligor. b. a delegator only. c. an obligor only. d. none of the choices.

a. a delegator and an obligor.

Commercial Shipping, Inc., and Dock Services Corporation enter into a contract under which Commercial agrees to pay Dock to load Commercial's trucks. Dock transfers its duty to load the trucks to East Harbor Transport Company. Dock is a. a delegator. b. an assignor. c. a payor. d. a righter.

a. a delegator.

Rashad accesses Quant Company's computer system without authority to obtain protected financial data. Under federal law, this is a. a felony if it is committed for a commercial purpose. b. a felony if Quant brings a civil suit against Rashad. c. not a crime. d. a crime, but not a felony.

a. a felony if it is committed for a commercial purpose.

Corner Convenience Store (CCS) takes out a full-page ad in a local newspaper and runs a thirty-second commercial on a local television station, offering a reward for information lead¬ing to the apprehension of a certain criminal. CCS could normally terminate the offer by placing a. a full-page ad in the local paper and a thirty-second commercial on the local station. b. a notice in the "Legal Announcements" section of the paper. c. a notice to the news departments of the local stations. d. any, or none, of the choices.

a. a full-page ad in the local paper and a thirty-second commercial on the local station.

Digital Architecture, Inc., enters into a contract to design robotic software for Chassis Assembly Corporation. The freedom to enter into contracts is a. a fundamental public policy of the United States. b. an ambiguous business goal that is irrelevant in terms of the law c. a philosophical concept that underlies international law. d. a principle that describes contracting parties' intent.

a. a fundamental public policy of the United States.

Home Delivery Corporation and Interstate Transport, Inc., sign an agreement that provides for the payment of "$1,000 by whichever party commits a material breach of the contract that creates damages difficult to estimate but approximately $1,000." This is a. a liquidated damages clause. b. a mitigation of damages clause. c. a nominal damages clause. d. a penalty clause.

a. a liquidated damages clause.

Bell Medical Education Service enters into a contract to employ Chris as an instructor for two years to begin May 1. One month before the term begins, Bell is underbid by a competitor and loses a major client, Delta Hospital Center. Bell now refuses to hire Chris. Bell's repudiation is most likely a. a material breach. b. a minor breach. c. Chris's breach. d. no breach.

a. a material breach.

Mutual Company enters into a contract to employ Neil as an investment man¬ager for two years. During the first year, Neil is often absent without explana¬tion and when present fails to adequately monitor and manage Mutual's investments. Neil's performance is most likely a. a material breach. b. a minor breach. c. Mutual's breach. d. no breach.

a. a material breach.

In Harley's suit against Irma, the parties meet before going to trial, and each party's attorney argues the party's case before the other party. A third party renders an opinion as to how a court would likely decide the dispute. This is a. a mini-trial. b. arbitration. c. a summary jury trial. d. early neutral case evaluation

a. a mini-trial.

Solid Toolmakers, Inc., contracts to sell its business to Titan Hardware Corpo¬ration. Before either party has performed, rescission of this con¬tract requires a. a mutual agreement to rescind. b. consideration. c. performance by all of the parties. d. an accord and satisfaction.

a. a mutual agreement to rescind.

Lina, an employee of Manual Labor Industries (MLI), is injured in a work-related accident. Based on the diagnosis of Newt, a doctor, Lina accepts $50,000 from MLI and waives the right to future claims. Newt's diagnosis later proves to have been wrong. Newt's misdiagnosis is, in terms of its impact on Lina's agreement with MLI,

a. a mutual mistake of fact.

Ben and Ivy enter into a contract under which Ben agrees to cater Ivy's wedding in exchange for a cash down payment. The contract expressly prohibits any transfer of rights. A contract right may be transferred, however, if the transfer involves a. a right to receive payment. b. a right to Ben's services. c. rights under Ivy's insurance policy against Ben's failing to perform. d. a right whose transfer is otherwise expressly prohibited by statute.

a. a right to receive payment.

Krystal is a federal judge. Krystal's judicial decisions are part of case law. This law includes interpretations of primary sources of law. These sources include a. administrative regulations. b. articles in law reviews and other legal journals. c. compilations summarizing court decisions on particular topics. d. legal encyclopedias.

a. administrative regulations.

Kelly files a suit against Lewis in a state court. The case proceeds to trial, after which the court renders a verdict. The case is appealed to an appellate court After its review of Kelly v. Lewis, the appellate court can a. affirm, reverse, or remand all or part of the lower court's decision. b. only affirm or reverse all or part of the lower court's decision. c. only remand all or part of the lower court's decision. d. only reverse or remand all or part of the lower court's decisiona. affirm, reverse, or remand all or part of the lower court's decision.

a. affirm, reverse, or remand all or part of the lower court's decision.

A specific grade of corn that fills Dean and Ethel's silo is fungible. This means that the corn is a. alike naturally or by agreement or trade usage. b. fundamentally different. c. fundamentally edible. d. perishable.

a. alike naturally or by agreement or trade usage.

Alaskan salmon that fill the hold of Bill and Carla's fishing boat are fungible if the salmon are a. alike naturally or by agreement or trade usage. b. fundamentally different. c. fun, good, and edible. d. liable to deteriorate over time.

a. alike naturally or by agreement or trade usage.

Rally Corporation enters into a contract to sell ski gear to SnoSportz Company, which sells a pair of the skis to Tyra, a consumer, who later sells them to Uli, another consumer. Article 2 of the UCC applies to the sales transactions between a. all of the buyers and sellers. b. Rally and SnoSportz only. c. SnoSportz and Tyra only. d. Tyra and Uli only.

a. all of the buyers and sellers.

Over the course of a year, Real Deal Corporation sells appliances to customers to whom it extends credit. Real Deal orders the appliances from Superior Appliance Company's warehouse, from which the items are shipped via common carrier to Real Deal's customers. Article 2 of the UCC governs a. all of the parties' sales of the goods. b. Real Deal's extension of credit. c. Superior's storage of the goods. d. the common carrier's delivery of the goods.

a. all of the parties' sales of the goods.

High n' Mighty Mart, Inc., is an Illinois-based firm that does business throughout the United States. With respect to this circumstance, the UCC has been adopted by, and applies in, a. all of the states, in whole or in part. b. most of the states on the Atlantic and Pacific coasts. c. none of the states, to date. d. only the states on the Mississippi, Missouri, and Ohio Rivers.

a. all of the states, in whole or in part.

In Las Vegas, Nevada, Kurt places a bet on a football game with a bookmaker via a Web site based in Las Vegas. In Cleveland, Ohio, Dorothy places a bet on the same game with a bookmaker via a Web site based in Cleveland. Gambling is regulated in a. all states. b. only a few states. c. no state. d. Ohio only.

a. all states.

Hillside Homes, Inc., and Ideal Builders, Inc., enter into a construction contract that includes six pages of detailed calculations. Later Hillside, whose project manager compiled the figures, discovers that some numbers were multiplied incorrectly, but Ideal refuses to make changes. A court would most likely a. allow the parties to rescind the contract. b. award damages to Hillside for the mistakes. c. award damages to Ideal for the mistakes. d. enforce the contract without requiring changes.

a. allow the parties to rescind the contract.

Crater Tools Company may be subject to regulations issued by the Occupational Safety and Health Administration (OSHA). Like other administrative agencies, the OSHA affects a. almost every aspect of a business's operations. b. almost no aspect of a business's operations. c. a firm's capital structure and financing, but nothing else. d. a firm's hiring and firing procedures, but nothing else.

a. almost every aspect of a business's operations.

Fiorella and Midwest Agri-Ship, Inc., enter into a contract for Midwest to transport a silo of corn for which Fiorella agrees to pay Midwest. Due to schedule conflicts, Midwest contacts Hybrid Crop Transport Company, to which Midwest "assigns all rights under the contract." This transfer is a. an assignment and a delegation. b. an alienation and a negotiation. c. an obligation and a cancelation. d. prohibited.

a. an assignment and a delegation.

Livewire Company and Kitchen Products, Inc., sign a document that states Livewire agrees to design a Web page for Kitchen Products, which agrees to pay for the service. Livewire and Kitchen Products have made a. an express contract. b. an implied-in-fact contract. c. an implied-in-law contract. d. a quasi contract.

a. an express contract.

MaxiMart, Inc., is a discount retailer. MaxiMart's customer service employees are on strike. Sixty of the workers block the entrances to one of MaxiMart's stores. To get them away from the doors, MaxiMart should seek a. an injunction. b. damages. c. rescission. d. specific performance.

a. an injunction.

Ginamarie files a suit against Gaming Innovators Unlimited, Inc., to enforce a written con¬tract between the parties. If the court finds that the parties intended the contract to be the final statement of their agreement, parol evidence can be admitted to prove a. an orally agreed-on condition precedent. b. terms discussed orally before the contract but not contained in it. c. terms discussed orally at the time of the contract that contradict the written terms. d. nothing.

a. an orally agreed-on condition precedent.

Beachside City enacts an ordinance that bans the distribu¬tion of all printed materials on city streets. Carl opposes the city's latest "revenue-enhancing" measure and wants to protest by distributing handbills. In his suit against the city, a court would likely hold the printed-materials ban to be a. an unconstitutional restriction of speech. b. constitutional under the First Amendment. c. justified by the need to protect individual rights. d. necessary to protect national interests.

a. an unconstitutional restriction of speech.

A contract between Drill-Bit Sharpeners, Inc., and East Oil Mining Corporation contains a clause stating that any assignment is "void." This ordinarily prohibits a. any assignment. b. no assignment. c. only an assignment of contract rights to personal services. d. only an assignment that would change the obligor's risk.

a. any assignment.

Savers Mart, Inc., distributes its merchandise to retail outlets on an inter¬state basis. Under the commerce clause, Congress has the power to regulate a. any commercial activity in the United States. b. only activities that are in intrastate commerce. c. only activities that are in local commerce. d. only activities that are not in commerce.

a. any commercial activity in the United States.

Java Cafes, Inc., and Kaffe Import Corporation dispute a term in their contract. Resolving the dispute between Java and Kaffe by having a neutral third party render a binding decision is one of the ad¬van¬tages of a. arbitration. b. conciliation. c. intervention. d. mediation.

a. arbitration.

Jim files a suit against Kay. Before going to trial, the parties meet, with their attorneys to represent them, to present their dispute to a third party who is not a judge but who renders a legally binding decision. This is a. arbitration. b. litigation. c. mediation. d. negotiation

a. arbitration.

Louis—larger and stronger than Mica—threatens to hit Mica before hitting and injuring him. Mica files a suit against Louis for assault and battery. Mica will most likely recover for a. assault and battery. b. assault but not battery. c. battery but not assault. d. neither assault nor battery

a. assault and battery.

On behalf of Bay Oyster Company, Celia types her name at the bottom of an e-mail purchase order and submits the order to Deepwater Parts Company. Under the UETA, qualifying Celia's name as her "signature" is a. attribution. b. cybernotarization. c. acceptance. d. agreement.

a. attribution.

Harvey puts up a guitar for bids on eWay, a Web auction site. Faith makes the highest bid and sends the payment, which Harvey receives, but he does not send the guitar to her. This is online a. auction fraud. b. puffery. c. retail fraud. d. frustration but not fraud.

a. auction fraud.

Gregor uses duress to force Honi to agree to pay him for protecting Honi's Coffee Shop against vandalism and destruction. Honi may a. avoid the contract or choose to carry it out. b. do nothing once she has agreed to pay. c. recover from her insurer for a failure to direct her "protection." d. recover from the local police for a failure to protect her "direction."

a. avoid the contract or choose to carry it out.

Relax Chair Company contracts to deliver 100 chairs to Stuffy Furnishings Store on May 1 for which Stuffy agrees to pay. Relax tells Stuffy on April 15 that delivery will be delayed until June 1. Stuffy may a. await performance, sue Relax, or suspend its own performance. b. only await Relax's performance for a commercially reasonable time. c. only sue Relax for breach of contract. d. only suspend its own performance

a. await performance, sue Relax, or suspend its own performance.

Dino hires Eve to perform at Dino's Club, but Eve later breaches the agreement to accept a higher-paying job at First Star Arena. Dino files a suit against Eve. The court will most likely a. award damages to Dino. b. cancel Dino and Eve's contract. c. order Eve to perform the contract. d. reform Dino and Eve's contract.

a. award damages to Dino.

The state legislature of Iowa enacts a transportation statute that impinges on interstate commerce. This statute will be a. balanced in terms of Iowa's interest in regulating a certain matter against the burden placed on interstate commerce. b. balanced in terms of the burden on Iowa against the merit and purpose of interstate commerce. c. struck down. d. upheld.

a. balanced in terms of Iowa's interest in regulating a certain matter against the burden placed on interstate commerce.

In a skateboarding accident with Ryan, Starla is injured. Ryan's insurance company's offers her $25,000 to release him from liability, and she accepts. Later, she learns that her injuries are more serious than she realized. The release a. bars Starla's further recovery from Ryan. b. is unenforceable because Starla's injuries are unforeseeably difficult. c. is unenforceable because Ryan has a preexisting duty to pay. d. is unenforceable because the release is an illusory promise.

a. bars Starla's further recovery from Ryan.

Dave's Hobby Town and Eva's Yarn Shoppe are adjacent stores with adjoining parking lots. Dave offers Eva a discount on purchases from Dave's store if Eva will not tow the cars of Dave's customers who park in Eva's lot. Dave's discount is legally sufficient consid¬eration a. because it is a promise of something of value. b. only if Dave adds a cash rebate. c. only if Eva uses it. d. under no circumstances.

a. because it is a promise of something of value.

Vernon claims that his contract with Ulani is voidable. If their contract is avoided a. both parties are released from it. b. both parties must fully perform their obligations under it. c. a wholly different contract is agreed to. d. a wholly different contract is imposed "as if" the parties had agreed. `

a. both parties are released from it.

Evelyn, who owns and operates Eve's Farm & Garden Company, agrees to sell Hill & Dale Produce, Inc., fifty bush¬els of apples. When the market price for apples exceeds the price in the contract with Hill & Dale, Evelyn decides not to deliver the apples. The contract with Hill & Dale is a. breached. b. discharged. c. not affected. d. suspended.

a. breached.

Bell Medical Education Service enters into a contract to employ Chris as an instructor for two years to begin May 1. One month before the term begins, Bell is underbid by a competitor and loses a major client, Delta Hospital Center. Bell now refuses to hire Chris. Under the circumstances, with respect to damages, Chris can a. bring an action immediately. b. bring an action only after the contract's two-year term begins. c. bring an action only after the contract's two-year term ends. d. do nothing

a. bring an action immediately.

Cleo sells kitchen appliances, and occasionally cleaning supplies, to persons who come into her store, Discount Appliances. One afternoon, Cleo sells a used display shelf to Earl. Under the UCC, Cleo is a merchant of a. cleaning supplies and kitchen appliances only. b. cleaning supplies, display shelves, and kitchen appliances. c. cleaning supplies only. d. kitchen appliances only.

a. cleaning supplies and kitchen appliances only.

Bild-Rite, Inc., is a Colorado-based firm that does business with clients throughout North America. Bild-Rite oversees construction projects, and buys and sells commercial buildings, undeveloped land, and construction supplies and other goods. Bild-Rite has had to deal with work-site theft and vandalism. With respect to these circumstances, the Uniform Commercial Code (UCC) provides a framework for a. commercial transactions for the sale of and payment for goods. b. international construction contracts. c. domestic and foreign transactions in real estate. d. prosecuting crimes against business interests.

a. commercial transactions for the sale of and payment for goods.

The title of a case appears as "Duck Sales Corp. v. Egret Supply Co." The party in whose favor the case was decided a. could be either party. b. must be neither party. c. must be Duck. d. must be Egret.

a. could be either party.

Rocky and Slim enter into a contract for a sale of five rowboats. Circumstance make it difficult for Rocky to perform, and the contract is breached. Slim looks for remedies. Unlike the common law, under the UCC, remedies are a. cumulative. b. exclusive. c. limited. d. unlimited.

a. cumulative.

Nestor establishes a phony account in Meet+Greet, a social network, and creates a fictitious persona to cyberbully Leona. This is a. cyber stalking. b. employment fraud. c. phishing. d. vishing.

a. cyber stalking.

Via e-mail, Vern makes repeated credible threats to Ursula that put her in reasonable fear for her safety. This is a. cyber stalking. b. employment fraud. c. phishing. d. vishing

a. cyber stalking.

Red's Plumbing Service substantially performs its contract with Shady Grove Condominiums, Inc. Shady Grove is entitled to a. damages. b. nothing more. c. repudiation. d. alteration.

a. damages.

Scot and Tiffany enter into an implied-in-fact contract. The parties' conduct a. defines the contract's terms. b. finds the contract's facts. c. terminates any unintended consequences. d. undercuts any terms based on the facts.

a. defines the contract's terms.

Metro Daily and New City Newsstand enter into a contract under which Metro agrees to deliver a certain quantity of newspapers to New City each day. The contract does not include a price term. In a suit between the parties over the price, a court will a. determine a reasonable price. b. impose the lowest market price. c. refuse to enforce the agreement. d. return the parties to the positions they held before the contract.

a. determine a reasonable price.

Jacquie signs a contract to buy a car just before reaching the age of major¬ity. After reaching the age of majority, Jacquie does not take possession or make payments. Most courts would hold, with respect to the contract, that this is a. disaffirmance. b. emancipation. c. ratification. d. rescission.

a. disaffirmance.

Mutual Company enters into a contract to employ Neil as an investment man¬ager for two years. During the first year, Neil is often absent without explana¬tion and when present fails to adequately monitor and manage Mutual's investments. With respect to Mutual's duties, Neil's per¬formance most likely a. discharges Mutual from the contract. b. has no effect on Mutual's performance. c. increases Mutual's duties under the contract. d. suspends Mutual's duty to perform.

a. discharges Mutual from the contract.

Owen, in Pennsylvania, and Quik Jobs, Inc., in Maryland agree to have their dispute resolved in arbitration according to the law of Virginia. This is a ground for a court to a. do nothing. b. review the merits of the dispute. c. review the sufficiency of the evidence. d. set aside the award.

a. do nothing.

Dinsmore Corporation employs Coolwater Cyberspace Security, Inc. to protect the integrity of Dinsmore's computer system. Coolwater assigns Brigit and each of Dinsmore's other authorized users an individualized password. A serious security problem would most likely exist if Brigit a. does not change the password. b. changes the password immediately. c. changes the password on a regular basis. d. changes the password at irregular intervals

a. does not change the password.

Dante enters into a contract with Rosalinda, who does not have contractual ca¬pacity. Dante can enforce the contract if Rosalinda a. does not choose to avoid the contract. b. is a minor. c. can obtain the funds to pay for the benefits of the contract. d. is intoxicated or men¬tally incompetent.

a. does not choose to avoid the contract.

Bella owns a farm in Colorado. Doyle drives his sport utility vehicle off a highway and onto Bella's land. Doyle commits trespass if he a. does not have Bella's permission to drive on the property. b. drives onto the property for recreational purposes. c. harms the property in a material way. d. harms the property in any way.

a. does not have Bella's permission to drive on the property.

Regal Manufacturing Company contracts to sell sweaters to Superb Styles Store. Before the sweaters are delivered, Superb indicates that it will not be able to pay. Regal can resell the goods a. either after finishing the job (and identifying the goods), or after stopping the job. b. only after finishing the job and identifying the goods. c. only if Regal immediately stops the job. d. under no circumstances.

a. either after finishing the job (and identifying the goods), or after stopping the job.

Overseas Corporation (OC), a U.S. firm, orally agrees to sell six freezers to Pisa Pizza, Ltd., in Italy. OC fails to deliver. Under the CISG, Pisa Pizza can a. enforce the agreement. b. not enforce the agreement because it is not in writing. c. not enforce the agreement because the price term is not specified. d. not enforce the agreement because there is no consideration.

a. enforce the agreement.

ail enters into a contract with Hi-Price Appliances, Inc. In a suit between the parties over payment under the contract, Gail claims that a certain clause is unconscionable. If the court agrees, it may a. enforce, limit, or refuse to enforce the contract or the disputed clause. b. enforce the contract without the disputed clause only. c. limit the application of the disputed clause only. d. refuse to enforce the entire contract only.

a. enforce, limit, or refuse to enforce the contract or the disputed clause.

Opie enters into a contract with Belle. Later, Opie is adjudged mentally in¬competent. Raye, Opie's daughter, attempts to void Opie's contract with Belle on the ground of Opie's incompetency. The contract is a. enforceable if Opie had capacity at the time the contract was formed. b. enforceable if Belle is also incompetent. c. enforceable if Raye knew of the contract when it was formed. d. void.

a. enforceable if Opie had capacity at the time the contract was formed.

On behalf of the rock group Uno, their manager Thalia agrees to a performance in Seaside Amphitheatre on July 4. Rex, acting for Seaside Productions, sends a written copy of the agreement to Thalia to be signed. Typically, businesspersons put their contracts in writing to a. ensure proof of the contracts' existence. b. create substance from form. c. obtain a check or other negotiable instrument. d. practice their "letters of credit."

a. ensure proof of the contracts' existence.

A enters into a contract with B Fitness Club for discounted memberships for A's employees. If B breaches the contract and A enters into a contract with D Sports for the same service at a lower price, A might be awarded nominal damages to a. establish, as a matter of principle, that B acted wrongfully. b. provide A with funds for a foreseeable loss beyond the contract. c. provide A with funds for its loss of the bargain. d. punish B and set an example to deter others from similar acts.

a. establish, as a matter of principle, that B acted wrongfully.

Medical Centre enters into a contract with Local Motion Fitness Club for discounted memberships for the Centre's employees. If the Club breaches the contract and the Centre enters into a contract with KO Sports for the same service at a lower price, the Centre might be awarded nominal damages to a. establish, as a matter of principle, that the Club acted wrongfully. b. provide the Centre with funds for a foreseeable loss beyond the contract. c. provide the Centre with funds for its loss of the bargain. d. punish the Club and set an example to deter others from similar acts.

a. establish, as a matter of principle, that the Club acted wrongfully.

Hubert mistakenly pays property taxes that should have been assessed against Jesse. Hubert can recover the amount from Jesse in quasi contract a. even if Jesse was not aware of the error. b. only if Jesse tried to conceal the error. c. only if Jesse was aware of the error. d. under no circumstances.

a. even if Jesse was not aware of the error.

Delia enters into, and fails to disaffirm soon after reaching the age of ma¬jority, a contract with Electronics Stores, Inc. (ESI). Later Delia attempts to disaffirm the contract. ESI files a suit against her. The court will most likely consider the contract ratified if it is a. executed. b. exculpatory. c. disaffirmed. d. rescinded.

a. executed.

In studying the legal environment of business, Professor Dooley's students also review ethics in a business context. Ethics includes the study of what constitutes a. fair or just behavior. b. financially rewarding behavior. c. legal behavior. d. religious behavior.

a. fair or just behavior.

American Products Company and Best Manufacturing, Inc. (BMI), enter into a contract for the sale of a certain quantity of machine parts, with BMI to determine the price. The price must be fixed according to the concept of a. good faith. b. square dealing. c. the mere image rule. d. unconscionability.

a. good faith.

Eden, the chief executive officer of Flo-Thru Piping Corporation, wants to en¬sure that Flo-Thru's activities are legal and ethical. The best course for Eden and Flo-Thru is to act in a. good faith. b. ignorance of the law. c. regard for the firm's shareholders only. d. their own self interest.

a. good faith.

Value Acquisitions, Inc., contracts to buy Wobbling Corporation's assets. Wobbling breaches the contract. Value files a suit against Wobbling, seeking various remedies. The doctrine of election of remedies has been eliminated in contracts involving sales of a. goods. b. intellectual property. c. real property. d. services.

a. goods.

Ike pushes Joan, who falls and breaks her arm. Ike is liable for the injury a. if Ike intended to push Joan. b. only if Ike did not intend to break Joan's arm. c. only if Ike had a bad motive for pushing Joan. d. only if Ike intended to break Joan's arm.

a. if Ike intended to push Joan.

In 2010, Congress enacts the Act to Restrict Commercial Speech (ARCS). The ARCS will be considered valid a. if it directly advances a substantial government interest but goes no further than necessary. b. if it directly advances a substantial government interest regard¬less of how "far" it goes. c. under any circumstances. d. under no circumstances.

a. if it directly advances a substantial government interest but goes no further than necessary.

Office Equipment Leasing, Inc. (OEL), agrees to lease five computer workstations to Product Promotion Corporation (PPC). Before any interest in the workstations can pass from OEL to PPC, they must be a. in existence and identified as the goods in the contract. b. in existence only. c. identified as the specific goods designated in the contract only. d. none of the choices.

a. in existence and identified as the goods in the contract.

A orally agrees to pay B to plant and harvest a quarter of A's farm acreage for four corn-planting seasons. After B prepares the land and plants the first crop, A says that their deal is off. B can most likely recover a. in quasi contract. b. in reformation. c. in restitution. d. on the parties' existing contract.

a. in quasi contract.

Karson orally agrees to pay Jaime to plant and harvest a quarter of Karson's farm acreage for four corn-planting seasons. After Jaime prepares the land and plants the first crop, Karson says that their deal is off. Jaime can most likely recover a. in quasi contract. b. in reformation. c. in restitution. d. on the parties' existing contract.

a. in quasi contract.

Tilly, the chief financial officer for USA Products Corporation, at¬tempts to apply Christian precepts in making ethical decisions and in do¬ing business. In applying duty-based ethical standards that are derived from a religious source, Tilly would consider the motive behind an act to be a. irrelevant. b. the least important consideration. c. the most important consideration. d. the only consideration.

a. irrelevant.

Frank agrees to lease an apart¬ment from Gena for one day to see Harry, the president of the United States, deliver a speech in the street below. The speech is can¬celed ten days before its date. Frank's con¬tract with Gena a. is discharged. b. is not affected. c. is postponed until another event is scheduled. d. must be performed immediately.

a. is discharged

Patricia commits an act via e-mail against Othman Finance Company, a business in California, where the act is a cyber crime. Patricia resides in New York where the act is not a crime. Prosecution of Patricia in California involves questions of a. jurisdiction. b. "maximum contacts." c. the immunity of Internet service providers. d. encryption.

a. jurisdiction.

Machismo Motor Sales Corporation regularly advertises its off-the-road and all-terrain vehicles and other products. Under the First Amendment, these ads and other commercial speech are given a. less protection than noncommercial speech. b. more protection than symbolic speech. c. no protection. d. the same protection as defamatory speech.

a. less protection than noncommercial speech.

At an auction, Vigo bids on an object, believing that it is worth more than the price asked. When the item proves to be less valuable, Vigo is a. liable on the bid. b. not liable on the bid because Vigo misestimated the value. c. not liable on the bid because the auctioneer misstated the value. d. not liable on the bid because the object was probably overpriced.

a. liable on the bid.

Minka uses her computer to secretly install software on hundreds of personal computers without their owners' knowledge. Minka's software is harmful to the computers on which she installed it. This program is a. malware. b. badware. c. harmware. d. infectware.

a. malware.

Nationwide Business Company and One-State Sales, Inc., agree to si¬multa¬neously rescind their contract and enter into a new agreement under which their duties are the same. Nationwide later sues One-State to enforce the new agreement. The court a. may apply the preexisting rule or allow the rescission. b. must allow the rescission. c. must apply the preexisting duty rule. d. must not apply the preexisting rule or allow the rescission.

a. may apply the preexisting rule or allow the rescission.

In Sales Distribution Corp. v. Consumer Products Co., the court decides that a precedent is incorrect or in¬ap¬plicable. The court a. may rule contrary to the precedent. b. must apply the precedent. c. must ask a higher court to rule on the case. d. must refuse to decide the case.

a. may rule contrary to the precedent.

In posts in online chat-rooms, Ramona makes repeated credible threats to Pierce that put him in reasonable fear for his safety. This is a crime in a. most states. b. only a few states. c. no state. d. California only.

a. most states.

Stuffed Fauna, Inc., and Taxidermy Storage Company enter into a long-term lease for a warehouse. To be enforceable, the lease a. must be in writ¬ing. b. must be in writ¬ing only if the lease is valued at $500 or more. c. must be in writing only if the lease is for longer than one year. d. need not be in writing.

a. must be in writing.

May is a stockbroker. Due to May's statements, Nora believes that the price of OK!, Inc., a widely traded stock, is going to in¬crease sub¬stantially. Nora buys 500 shares of OK! at $10 per share, but the price soon drops to $2. Nora can successfully recover

a. nothing.

Lewis is a state court judge. Like other judges, Lewis often refers to secondary sources of law for guidance. These sources include a. official comments to statutes. b. other states' statutes. c. state constitutions. d. the U.S. Constitution.

a. official comments to statutes.

Chloe files a suit against Digital Associates, Inc. (DAI), to enforce a contract. The only written evidence of the contract is a memo on DAI's letterhead as signed by a DAI officer in its files. The contract can be enforced if the memo includes

all essential terms

Fashion Retail Center enters into a contract with Great Promotions, Inc., to provide Fashion with a plan to retool its merchandising strategy. If Great Promotions breaches the contract, Fashion has a duty to a. reduce the damages that Fashion might otherwise suffer. b. reduce the loss that Great Promotions might otherwise suffer. c. punish Great Promotions and deter others from similar acts. d. take no action.

a. reduce the damages that Fashion might otherwise suffer.

Rossi uses cyber tools to steal the personal information of unsuspecting consumers online. Like other cyber thieves, Rossi is most likely to a. sell the data to other thieves online. b. use the data to make purchases online. c. use the data in retail outlets in the "real" world. d. sell the data on a street corner in the "real" world.

a. sell the data to other thieves online.

Maksum floods virtual mailboxes with unsolicited junk e-mail, consisting of ads and other messages. This e-mail is a. spam. b. bot. c. piracy. d. phish.

a. spam.

Order Processing Corporation and Pinpoint Data, Inc., enter into a con¬tract online in a state that has enacted an unmodified version of the UETA. With regard to the E-SIGN Act a. the E-SIGN Act does not preempt this version of the UETA. b. the E-SIGN Act preempts this version of the UETA. c. the "fit" between the acts is an issue for a court to determine. d. the two acts "cancel" each other's application.

a. the E-SIGN Act does not preempt this version of the UETA.

Standard Business Company appeals a decision against it, in favor of Top Flight Corporation, from a lower court to a higher court. Standard is a. the appellant. b. the appellee. c. the defendant. d. the plaintiff.

a. the appellant.

Bret enters into a contract with Collegiate University over the Internet to take an online course titled "Internet Law." This is an e-contract because a. the contract was entered into over the Internet. b. the contract was formed between a student and a university. c. the contract will be performed online. d. the subject matter of the contract is "Internet Law."

a. the contract was entered into over the Internet.

Doyle steals Carmen's computer and its software. This is computer crime in which the computer is a. the object of the crime. b. the subject of the crime. c. the instrument of the crime. d. irrelevant to the crime.

a. the object of the crime.

Cory enters into a contract with Dian to act as her personal sports trainer. If they later dispute the meaning, and the contract contains unclear terms, the rules of contract interpretation will give effect to a. the parties' intent as expressed in their contract. b. what the defendant claims was the parties' intent. c. what the plaintiff claims was the parties' intent. d. what the parties now agree they intended.

a. the parties' intent as expressed in their contract.

Green Grocers, Inc., enters into a contract with Hiway Transport Company for the deliv¬ery of a shipment of fresh produce. If the language in the contract has more than one meaning, it will be construed against a. the party who drafted the contract. b. the party with the greater bargaining power. c. the promisor. d. the promisee.

a. the party who drafted the contract.

Ruth, a minor, charges groceries at Sam's Mart. Two days later, Ruth disaf¬firms the purchase. Ruth owes Sam's Mart a. the reasonable value of the groceries. b. the retail value of the groceries. c. the wholesale value of the groceries. d. nothing

a. the reasonable value of the groceries.

Marbled Granite Company files a suit against Natural Stone, Inc., in a Colorado court with gen¬eral jurisdiction. In a Delaware court with limited jurisdiction, E-Sales Corporation files a suit against First State Bank. The differ¬ence between general and limited ju¬risdiction is a. the subject matter of the cases that the courts can decide. b. whether a case is being heard for the first time. c. whether a suit is filed against a single individual or many people. d. whether a suit is filed by a citizen or by a business.

a. the subject matter of the cases that the courts can decide.

Dale files a suit against Eve, alleging that she used fraud to induce him to enter into a con¬tract with her. Proof of an injury is required a. to recover damages. b. to rescind the contract. c. to undo Eve's influence. d. under no circumstances.

a. to recover damages.

Michelle gives out a business card with an e-mail address on it. According to the comments that accompany the UETA, it may be reasonable to infer that Michelle has consented to a. transact business electronically. b. submit to the jurisdiction of any selected forum. c. accept and respond to any correspondence sent to that address. d. nothing.

a. transact business electronically.

Under a contract with Bucolic Farms, Agro Excavation, Inc., begins digging an agricultural pond. In mid-project, Agro asks for $15,000 over the contract price, claiming an increase in the "cost of doing business." Bucolic agrees but later refuses to pay. Their agreement is a. unenforceable because Agro's performance was a preexisting duty. b. unenforceable because Bucolic's promise was illusory. c. enforceable. d. unenforceable because its performance is unforeseeably difficult.

a. unenforceable because Agro's performance was a preexisting duty.

Mark rents a small apartment for $2,000 a month because it overlooks Wrigley Field. One day, a new scoreboard is installed that blocks the view from his balcony. Will Mark have any chance to get out of the rest of his lease?

a. yes, because viewing the games has become objectively impossible b. yes, because viewing the games has become subjectively impossible (C. yes, because the purpose for which he leased the apartment has been frustrated) d. no EXPLANATION: Choices A and B are not likely to help Mark, since the lease is related to his occupying the apartment, which is still possible. However, in some cases when a change of events makes the real, unspoken purpose of a contract impossible, courts will discharge duties under the frustration of purpose doctrine.

Magic Math Corporation makes business accounting software, which is packaged with a shrink-wrap agreement. National Distribution Company distributes the software to retailers, including an Office Stuff store, where Peg buys a package of it. The parties to the shrink-wrap agreement are a. Magic Math and National Distribution only. b. Magic Math and Peg only. c. Magic Math, National Distribution, Office Stuff, and Peg. d. Office Stuff and Peg only.

b. Magic Math and Peg only.

Lightspeed Corporation makes computers, each of which is packaged with a shrink-wrap agreement. Milo buys a Lightspeed desktop. The shrink-wrap agreement is most likely enforceable if a. Milo buys the computer directly from Lightspeed. b. Milo expressly agrees to the terms in the shrink-wrap agreement. c. Milo reads the shrink-wrap agreement. d. the terms in the shrink-wrap agreement concern warranties.

b. Milo expressly agrees to the terms in the shrink-wrap agreement.

Moore Properties, Inc., offers in writing to sell to Lawn Acres Development Corporation a certain half-acre of land for "$112,000." After Lawn Acres signs the offer in acceptance and returns it, Moore discovers that the price should have been stated as "$121,000." The effect of Moore's misstatement of the price will most likely fall on a. Moore and Lawn Acres, who must split the difference. b. Moore only. c. Lawn Acres only. d. neither Moore nor Lawn Acres.

b. Moore only.

Deb buys a song through eSongs, an online music vendor. Before completing the purchase and downloading the song, Deb must agree to a provision not to sell copies of the song. This provision is a. a browse-wrap term. b. a click-on agreement. c. a shrink-wrap agreement. d. none of the choices.

b. a click-on agreement.

Daphne agrees to buy Eduardo's Chef's Table restaurant on the condi¬tion that Financial Credit Company approves the financing. This ap¬proval is a. a concurrent condition. b. a condition precedent. c. a condition subsequent. d. a condition conjectural.

b. a condition precedent.

Flem, a user of GameCenter.com's Web site, can download gaming software for free if he first clicks on "I accept" after viewing certain terms. This is a. a contract that does not include the terms. b. a contract that includes the terms. c. not a contract but the terms are enforceable. d. unenforceable.

b. a contract that includes the terms.

United Farms offers to sell Valu Bakeries, Inc., fifty bushels of wheat. Valu's representative Wendy responds, "We agree to buy fifty bushels only if the wheat is Grade A quality." Wendy's statement is a. a breach of the parties' contract. b. a counteroffer. c. a fulfillment of the parties' contract. d. an acceptance.

b. a counteroffer.

Swinborn sells "Tyger" steroids over the Internet. He is arrested and charged with the sale of a controlled substance. This is cyber crime, which is a. a crime in which the letter "y" is used in the misspelling of a word. b. a crime .that occurs in the virtual community of the Internet. c. a crime that is less real than the same crime in the physical world. d. no crime.

b. a crime .that occurs in the virtual community of the Internet.

To prepare for a trial between Large Lots Development Corporation (LLDC) and MiniMansion Construction Company (MMCC), MMCC's attorney places LLDC's president under oath. A court reporter makes a record of the attorney's questions and the officer's answers. This is a. a cross-examination. b. a deposition. c. an imposition. d. an interrogatory.

b. a deposition.

Real Tea Company and Savory Stores, Inc., enter into a contract for a sale of tea. The contract includes the term "F.O.B. Upriver City," which is Savory's location. This means that the contract is a. a bailment contract. b. a destination contract. c. a shipment contract. d. a transportation contract.

b. a destination contract.

Overnight Delivery Service delivers a package to Pam. At the request of Overnight's delivery person, to acknowledge receipt Pam signs a digital pad. This signing creates a. a cybernotarized signature. b. a digitized handwritten signature. c. an asymmetric .cryptosystemic signature. d. a public-key infrastructure digital signature.

b. a digitized handwritten signature.

The Texas Supreme Court decides the case of Livewire Co. v. Power Corp. Of nine justices, five believe the judgment should be in Livewire's fa¬vor. Justice Bellamy, one of the five, writes a separate opinion. The four justices who believe the judgment should be in Power's favor join in a third separate opinion. The opinion joined by the four justices who favor Power is known as a. a concurring opinion. b. a dissenting opinion. c. a majority opinion. d. a per curiam opinion.

b. a dissenting opinion.

Price-Cut Discount Stores are open to consumers. The UCC requirement of good faith imposes a. a higher duty on consumers than Price-Cut. b. a higher duty on Price-Cut than on consumers. c. no duty on either Price-Cut or consumers. d. the same duty on Price-Cut and consumers.

b. a higher duty on Price-Cut than on consumers.

Earl holds 1,000 pounds of perishable fruit in storage for Fresh Food Corporation. Fresh Food does not pay for the storage. Earl sells the fruit to Green Grocers, Inc. This sale represents a. a breach of contract. b. a mitigation of damages. c. rescission and restitution. d. specific performance.

b. a mitigation of damages.

Earl holds 1,000 pounds of perishable fruit in storage for Fresh Food Corpo¬ration. Fresh Food does not pay for the storage. Earl sells the fruit to Green Grocers, Inc. This sale represents a. a breach of contract. b. a mitigation of damages. c. rescission and restitution. d. specific performance.

b. a mitigation of damages.

In Nebraska, the highest-ranking (superior) law is a. a case decided by the Nebraska Supreme Court. b. a provision in the Nebraska constitution. c. a rule created by a Nebraska state administrative agency. d. a statute enacted by the Nebraska legislature.

b. a provision in the Nebraska constitution.

Mikayla enters into a contract with Logan to provide surface material for Mikayla's tennis courts by April 1 for a tournament to begin May 1. The contract specifies an amount to be paid if the contract is breached. This is a liquidated damages clause if the amount is a. an excessive estimate of the loss on a breach. b. a reasonable estimate of the loss on a breach. c. designed to penalize the breaching party. d. intended to quickly provide cash to the nonbreaching party.

b. a reasonable estimate of the loss on a breach.

Hi-Tech Company contracts to sell fiber optic cable to Internet Services, Inc. Hi-Tech may bring an action to recover the purchase price and incidental damages if Internet a. accepts the cable and pays for it. b. accepts the cable but does not pay for it. c. rejects the cable. d. revokes acceptance of the cable.

b. accepts the cable but does not pay for it.

Les is indicted. Madge, the arresting officer, advises Les of his right to counsel. Les waives the right and confesses to the crime. Later, Les claims that his confession should be excluded as evidence from his trial. The statement will most likely be a. admitted because Les knew he did the crime and confessed. b. admitted because Les made it after being advised of his rights. c. excluded because a confession is not admissible in a criminal trial. d. excluded because it was elicited before Les was advised of his rights.

b. admitted because Les made it after being advised of his rights.

Chloe files a suit against Digital Consultants, Inc. (DCI), to enforce a con¬tract. The only written evidence of the contract is a memo in DCI's files written on DCI's let¬terhead and signed by a DCI officer. The con¬tract can be en¬forced if the memo includes a. a correct title, such as "Chloe-DCI Contract." b. all essential terms. c. a statement of the consideration. d. the parties' addresses.

b. all essential terms.

Omni Corporation is a Pennsylvania-based firm that does business throughout the United States. With respect to this circumstance, the UCC has been adopted by, and applies in, a. a few of the states. b. all of the states, in whole or in part. c. half of the states. d. none of the states, to date.

b. all of the states, in whole or in part.

George and Halle disagree as to the exact amount one owes the other. They form a new agreement that, on fulfillment, will discharge the prior obli¬gation. This is a. a covenant not to sue. b. an accord and satisfaction. c. a release. d. promissory estoppel.

b. an accord and satisfaction.

Peak & Vale Accountants provides other firms with accounting services. Questions of what is ethical involve the extent to which Peak & Vale has a. a legal duty beyond those duties mandated by ethics. b. an ethical duty beyond those duties mandated by law. c. any duty beyond those mandated by both ethics and the law. d. any duty when it is uncertain whether a legal duty exists.

b. an ethical duty beyond those duties mandated by law.

Flo tells Gregor that she will buy his textbook from last semester for $65. Gregor agrees. Flo and Gregor have a. an executed contract. b. an express contract. c. an implied-in-fact contract. d. a quasi contract.

b. an express contract.

GR8 Marketing Company and Hot Tunes, Inc., sign a document that states GR8 agrees to create a marketing campaign for Hot and Hot agrees to pay GR8 for the service. GR8 and Hot have a. an executed contract. b. an express contract. c. an implied-in-fact contract. d. a quasi contract.

b. an express contract.

General Credit Corporation promises to pay its chief finance officer Hughie and other employees a year-end bonus "if it seems like a good idea at that time." This is a. an enforceable contract. b. an illusory contract. c. an unconscionable contract. d. a unilateral contract.

b. an illusory contract.

b. an implied-in-fact contract

Britney, an employee of Computer Associates, is arrested at work. A grand jury issues a formal charge against Britney for larceny. This charge is a. an arraignment. b. an indictment. c. an information. d. an inquisition.

b. an indictment.

Bess runs Creditors Asset Recovery. She recruits clients by misrepresenting the facts and pretending to be licensed in various occupations in Michigan. Bess's conduct most likely warrants a. an ethical admonishment but no other sanctions. b. an injunction plus other sanctions. c. no sanctions but no praise. d. praise for her aggression in recovering the assets of "deadbeat" debtors.

b. an injunction plus other sanctions.

Esther and Faisal agree that Esther will fix Faisal's car in exchange for his paying a preexisting debt owed by Esther to Gladys. Gladys is a. an assignee. b. an intended beneficiary. c. an incidental beneficiary. d. a delegatee.

b. an intended beneficiary.

Kai files a suit against Lana based on one of Lana's statements that Kai alleges is fraudulent. To give rise to fraud, the statement must be one of a. emotion. b. fact. c. illusion. d. opinion.

b. fact.

Sam is a judge hearing the case of Local Co. v. National Corp. Applying the relevant rule of law to the facts of the case requires Sam to find previ¬ously decided cases that, in relation to the case under con¬sidera¬tion, are a. as different as possible. b. as similar as possible. c. at odds. d. exactly identical.

b. as similar as possible.

Dion, an accountant for Entertainment Sports, Inc., attempts to apply a duty-based approach to ethical reasoning in conflicts that occur on the job. This approach is based on the idea that a person must a. achieve the greatest good for the most people. b. avoid unethical behavior regardless of the consequences. c. conform to society's ethical standards. d. place his or her employer's interest first.

b. avoid unethical behavior regardless of the consequences.

Screen Perfect, Inc., and TV Stores enter into a contract for a sale of high-definition television sets. Screen Perfect ships goods that do not exactly conform to the contract in some details. TV Stores a. cannot reject the entire shipment. b. can reject the entire shipment. c. must accept the entire shipment. d. must reject the entire shipment.

b. can reject the entire shipment.

Vehicle Leasing Agency (VLA) and Wander Trucking Company enter into a contract for a lease of eight cargo vans. VLA delivers eight vans, but they are not cargo-sized. Wander a. cannot reject the entire shipment. b. can reject the entire shipment. c. must accept the entire shipment. d. must reject the entire shipment.

b. can reject the entire shipment.

Eton and Fiona sign a contract by which Eton agrees to deliver a wash¬ing machine on July 31 in exchange for Fiona's promise to pay the $500 pur¬chase price on July 31. The delivery of the washing machine and the payment of $500 are ex¬amples of a. conditions precedent. b. concurrent conditions. c. conditions subsequent. d. speculative conditions.

b. concurrent conditions.

Belle enters into a contract to subdivide and sell housing lots in Cole's hillside field if Dell City annexes the property within the next year. Belle's duty to perform is a. absolute. b. conditional. c. illusional. d. irresolute.

b. conditional.

Xavier enters into a contract to operate a Yummy Yogurt franchise, which Yummy agrees to support as long as Xavier maintains his busi¬ness license. Yummy's duty to perform is a. absolute. b. conditional. c. licentious. d. operational.

b. conditional.

Kelly and Lucas sign a written contract for the sale of Kelly's Coffee Kiosk to Lucas. The parties intend their written contract to be a final statement of the terms of their agreement. Lucas later disputes some of the provisions of the deal with Kelly. If the dispute results in litigation, a court will most likely exclude evidence that a. buttresses the written terms. b. contradicts the written terms. c. duplicates the written terms. d. reinforces the written terms.

b. contradicts the written terms.

In a suit against Sandy, Taylor obtains a remedy. In the U.S. legal system, this remedy will most likely be a. an injunction. b. damages. c. rescission. d. specific performance.

b. damages.

Timber Mills Corporation and Ur-Choice Lumberyards enter into a contract for a sale of plywood. Under a destination contract, the seller must a. allow the buyer to reject the goods for any reason. b. deliver the goods to a particular destination. c. inspect the goods before tendering their delivery. d. place the goods into the hands of a carrier.

b. deliver the goods to a particular destination.

Dudley, a minor who is under his parents' care and control, signs a contract to rent an apartment from Ewan for one year. Before the end of the term, Dudley moves out. Ewan sues for the rent for the rest of the term. Dudley can a. avoid liability for the rent but not disaffirm the contract. b. disaffirm the contract and avoid liability for the rent. c. disaffirm the contract but not avoid liability for the rent. d. not disaffirm the contract nor avoid liability for the rent.

b. disaffirm the contract and avoid liability for the rent.

Clyde contracts with Deephole Excavation, Inc., to dig an agricultural pond on his farm. Deephole is to keep the excavated gravel in payment. Clyde's neighbor Earl challenges the dig as an illegal gravel pit. A court orders the digging to stop. Clyde's contract with Deephole is a. breached. b. discharged. c. not affected. d. suspended.

b. discharged.

Evelyn, who owns and operates Eve's Farm & Garden Company, agrees to sell Hill & Dale Produce, Inc., fifty bush¬els of apples. Through no fault of Eve's Farm & Garden, a fire de¬stroys the apples before they are delivered. The contract with Hill & Dale is a. breached. b. discharged. c. not affected. d. suspended.

b. discharged.

Evelyn, who owns and operates Eve's Farm & Garden Company, agrees to sell Hill & Dale Produce, Inc., fifty bush¬els of apples. When bad weather destroys Eve's Farm & Garden's apple crop, the obliga¬tion to deliver apples to Hill & Dale is a. breached. b. discharged. c. not affected. d. suspended.

b. discharged.

Edie files a suit against Frank. If this suit is like most cases, it will be a. dismissed during a trial. b. dismissed or settled before a trial. c. resolved only after a trial. d. settled at a trial.

b. dismissed or settled before a trial.

Page points a knife at Ray's daughter, threatening to hold her hostage and "cut" her unless Ray takes a certain file from Skelter Supplies Corporation, his employer. Charged with theft, Ray can successfully claim as a defense a. insanity. b. duress. c. entrapment. d. self-defense.

b. duress.

Regular Insurance Company violates a state statute when selling an insur¬ance policy to Simone. As a member of the class of persons protected by the state statute, Simone can a. do nothing with respect to the contract. b. enforce the contract or recover the payment. c. only enforce the contract. d. only recover the payment.

b. enforce the contract or recover the payment.

Ray breaches his lease with Sunny Properties and vacates the premises six months before the end of the term. In some states, Sunny would have to a. avoid reletting the premises to recover damages from Ray. b. make reasonable efforts to relet the premises to mitigate damages. c. relet the premises to recover damages from Ray. d. sell the premises to recover damages from Ray.

b. make reasonable efforts to relet the premises to mitigate damages

Ray breaches his lease with Sunny Properties and vacates the premises six months before the end of the term. In some states, Sunny would have to a. avoid reletting the premises to recover damages from Ray. b. make reasonable efforts to relet the premises to mitigate dam¬ages. c. relet the premises to recover damages from Ray. d. sell the premises to recover damages from Ray.

b. make reasonable efforts to relet the premises to mitigate dam¬ages.

Business Properties, Inc. (BPI), offers to sell a warehouse to Corporate Investments. Corporate says that it will pay BPI $100 to hold the offer open for three business days. This a. creates an illegal contract by adding a clause to BPI's offer. b. makes the offer irrevocable for three days if BPI accepts. c. negates BPI's offer by changing the price term. d. voids BPI's offer by extending the time term.

b. makes the offer irrevocable for three days if BPI accepts.

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. practically no situations

b. many situations.

Sal contracts with Tasty Pizza Company to deliver its frozen pizza and pasta products to U-Chuse Market and other grocery stores. Both parties change their minds, however, and inform each other that they would like to cancel the contract. The next day, Sal changes her mind again and once more offers to deliver Tasty's products. Tasty is willing to deal, but for a new price. Sal and Tasty a. may agree to a new contract, but it cannot include a new price. b. may agree to a new contract that includes the new price. c. must perform their original contract. d. must perform the part of their original contract that is executory.

b. may agree to a new contract that includes the new price.

Sal contracts with Tasty Pizza Company to deliver its frozen pizza and pasta products to U-Chuse Market and other grocery stores. Both parties change their minds, however, and inform each other that they would like to cancel the contract. Sal and Tasty a. may rescind their entire contract. b. may rescind their contract to the extent that it is executory. c. must perform their entire contract. d. must perform the part of their contract that is executory.

b. may rescind their contract to the extent that it is executory.

A state statute requires machinery in industrial plants to include automatic shut-off switches accessible to each employee working on the machine. Steel Company's (SC's) equipment does not have the switches. Trudy, an SC employee, suffers an injury that an accessible shut-off switch would have prevented. Trudy's best theory for recovery against SC is a. assumption of risk. b. negligence per se. c. res ipsa loquitur. d. strict liability.

b. negligence per se.

Wanda tells Vito that she would like to buy his Chocolate Goodies store. Vito declines, but later decides to sell and sends to Wanda, and others, a flyer describing the de¬tails. Wanda responds with a letter of "acceptance." Wanda and Vito have a. a contract. b. no contract, because Vito sent the letter to more than one party. c. no contract, because Vito was only inviting bids. d. no contract, because the letter was an invitation to negotiate.

b. no contract, because Vito sent the letter to more than one party.

Brad stands in front of Rustler's Round-Up Café, shouting "fighting words" that are likely to incite Rustler's patrons to respond violently. The First Amendment protects such speech a. all of the time. b. none of the time. c. only if it is noncommercial. d. only if it is symbolic.

b. none of the time.

b. not required to pay due to the mutual mistake.

Dag and Enita are in an auto accident. Dag offers Enita $2,000 if she promises not to pursue her potential legal claim against him. Enita agrees. Later, Enita discovers that it will cost $1,500 to repair her car and $4,000 to cover her medical expenses for a latent injury. In Enita's suit against Dag to recover her repair and medical expenses, Enita will most likely recover a. half the amount to pay those costs over what Dag already paid her. b. nothing. c. the estimated amount to pay those costs and any other liability. d. the exact amount to pay those costs and no more.

b. nothing.

Contractors Construction Corporation offers to buy from Dandy Cement Company a certain quantity of cement for a certain price. Dandy can accept the offer by a. doing nothing. b. promising to ship or promptly shipping the cement. c. promising to ship the cement only. d. promptly shipping the cement only.

b. promising to ship or promptly shipping the cement.

Lia works for Media Marketing Company. Her job includes putting "spin" on the firm's successes and failures. In this context, ethics consist of a. "bad" versus "good" publicity. b. questions of rightness and wrongness. c. the firm's quarterly revenue. d. whatever is legal.

b. questions of rightness and wrongness.

Rig Heli-Pads, Inc., enters into a contract to employ Scott as an on-site project manager for two years. If Rig breaches the contract, Scott has a duty to a. do nothing. b. reduce the damages that Scott might otherwise suffer. c. rescind the contract with Rig. d. punish Rig and set an example to deter others from similar acts.

b. reduce the damages that Scott might otherwise suffer.

A contract for a sale of land from United Properties, Inc., to Variety Investments Corporation contains an erroneous legal description. The most appropriate remedy for these parties is a. damages. b. reformation. c. rescission. d. specific performance.

b. reformation.

Cooper offers to sell Gable his sport utility vehicle (SUV) and says that it has never been in an accident. Relying on Cooper's statement, Gable buys the SUV. Later, when it develops mechanical problems, Gable can a. not rescind the contract. b. rescind the contract on the basis of fraud. c. rescind the contract on the basis of mistake. d. rescind the contract on the basis of puffery.

b. rescind the contract on the basis of fraud.

Gina induces Hugh to enter into a contract for the purchase of a condominium about which Gina knowingly misrepresents a number of material features. When Hugh discovers the truth, he can a. not rescind the contract. b. rescind the contract on the basis of fraud. c. rescind the contract on the basis of mistake. d. rescind the contract on the basis of undue influence.

b. rescind the contract on the basis of fraud.

Shelby offers to make digital copies of Relay Company's business conference videotapes, CDs, DVDs, and other media for $500. Under the mailbox rule and the Uniform Electronic Transactions Act (UETA), Relay's acceptance by e-mail will be considered effective when a. received. b. sent. c. followed up by a confirmation letter sent by regular mail. d. composed on a Relay computer.

b. sent.

In newspaper ads, Lo-Price Autos falsely accuses My-T Value Vehicles, a competitor, of selling stolen cars. My-T's sales decrease. Lo-Price has most likely committed a. slander of quality. b. slander of title. c. wrongful interference with a business relationship. d. none of the choices.

b. slander of title.

Expert Stitching Corporation enters into a contract to sell denim clothing to Fine Fashion Company, which in turn sells a pair of jeans to Grady, a consumer. In contrast 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.

b. special business standards.

Olivia contracts for the sale of this year's strawberry crop to Phoenix, with payment to go to Rural Cooperative Association. The contract reserves to Olivia and Phoenix the right to modify its terms. Rural Cooperative's right to payment is a. not affected by the reservation. b. subject to any change that Olivia and Phoenix make. c. limited only if Rural Cooperative agrees to any changes. d. terminated by the reservation.

b. subject to any change that Olivia and Phoenix make.

Elle buys a new textbook for $100 and a used car for $5,000, and signs a one-year lease for an apartment for $1,000 monthly rent to start at the beginning of the next month. The Statute of Frauds covers a. the apartment lease, and the textbook and car purchases. b. the apartment lease and the car purchase only. c. the apartment lease only. d. the textbook and car purchases only.

b. the apartment lease and the car purchase only.

Orin claims that a Pennsylvania state statute infringes on his "substantive due process" rights. This claim focuses on a. procedures used to make decisions to take life, liberty, or property. b. the content of the statute. c. the similarity of the treatment of similarly situated individuals. d. the steps to be taken to protect Orin's privacy.

b. the content of the statute.

Lem buys a used MP3 player for $50 and a new laptop for $1,500, and signs a one-year employment contract for a $4,000 monthly salary to start at the beginning of the next month. The Statute of Frauds covers a. the employment contract, and the laptop and MP3 purchases. b. the employment contract and the laptop purchase only. c. the employment contract only. d. the laptop and MP3 purchases only.

b. the employment contract and the laptop purchase only.

Bailey, the president of Carmichael Commodities Company, claims that certain actions by the federal government and by the state of Delaware infringe on rights guar¬anteed by the Bill of Rights. All of these rights limit a. neither Delaware nor the federal government. b. the federal government only. c. Delaware and the federal government. d. Delaware only.

b. the federal government only.

Ryan, the owner of SuperMart Stores, 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 affects a. the right determination under a cost-benefit analysis. b. the rights of others. c. the "right" thing to do. d. the right to make a profit.

b. the rights of others.

Mariah works in the public relations department of New Trends Sales Company. Her job includes portraying New Trends's activities in their best light. In this context, ethics consist of a. a different set of principles from those that apply to other activities. b. the same moral principles that apply to non-business activities. c. those principles that produce the most favorable financial outcome. d. whatever saves New Trends's "face."

b. the same moral principles that apply to non-business activities.

Elisa steals Filbert's personal information from Filbert's computer. This is computer crime in which the computer is a. the object of the crime. b. the subject of the crime. c. the instrument of the crime. d. irrelevant to the crime.

b. the subject of the crime.

In case of seller's insolvency (Buyer's (lessee's) remedies when seller (lessor) breaches):

buyer is ready to perform and seller becomes insolvent. Can go into bankruptcy court and ask for a temporary lift of the automatic stay so the buyer can recover the goods and buyer pays the purchase price.

Multiple Choice: Several workers at Trico, Inc. were interested in organizing a union. When the President of Trico heard about the employees discussions, she sent an e-mail to all its workers stating that a union will only hurt the company and that "we are a family that can solve any problems ourselves -- we do not need union activists from outside our company trying to tell us what to do!" Which statement is correct? a. If union activists from outside the company are involved in the unionization drive, Trico can obtain an injunction halting the drive. b. If the union will hurt the company, Trico can obtain an injunction halting the unionizing drive. c. Trico cannot stop the employees from organizing a union. d. As a small family business, Trico can obtain an injunction halting the unionizing drive.

c (It is an unfair labor practice for an employer to interfere with a union organizing effort.)

Development Associates (DA) agrees to buy five acres of land from Eastside Properties for $15,000. Eastside sells the acreage to Fealty Realty, and fails to go through with DA's deal on the agreed date, when the market price of the land is $17,000. DA may recover a. $17,000. b. $15,000. c. $2,000. d. $0.

c. $2,000

Frank slips and falls on Guy's Harbor Tour Boat and is injured. Frank files a suit against Guy's for $500,000. If Frank is 20 percent at fault and Guy's is 80 percent, under the "50 percent rule" comparative neg¬ligence principles, Frank would recover a. $0. b. $250,000. c. $400,000. d. $500,000.

c. $400,000.

Amble 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, Amble refuses to go through with the deal. Blacksmith can recover a. $1,500. b. $1,000. c. $500. d. 0.

c. $500.

Bret contracts to work for City Construction Corporation (CCC) during July for $4,500. On June 30, CCC cancels the contract. Bret declines a similar job with Downtown Builders, Inc., which would have paid $4,000. Bret files a suit against CCC. As compensatory damages, Bret can recover a. $4,500. b. $4,000. c. $500. d. $0.

c. $500.

Diner's Cafe orders five gallons of transfat-free olive oil from EZ Distributors, Inc. EZ mistakenly ships soy oil, which Diner's keeps, despite the nonconformity. The oil is destroyed in a fire. The loss is suffered by a. Diner's and EZ, but not Diner's customers. b. Diner's, EZ, and Diner's customers. c. Diner's only. d. EZ only.

c. Diner's only.

Delta Boats, Inc., and Eventide Fishing Tours enter into a contract for a sale of seven custom-made swamp boats. Eventide pays for the goods, but Delta does not deliver. Eventide can use replevy as a remedy if a. Delta is lawfully withholding the goods. b. Eventide cannot effectively cure the defect. c. Eventide is unable to cover for the goods. d. the goods have not been identified to the contract.

c. Eventide is unable to cover for the goods.

Clear Day Company, which is based in Delaware, agrees to sell fifty windows, currently stored in Florida, to Great Vu, Inc., which is based in Hawaii. Absent an agreement to the contrary, the place of delivery is in a. California. b. Delaware. c. Florida. d. Hawaii.

c. Florida.

Home Products Store buys furniture from Ideal Furniture, Inc. The parties agree that the furniture will be shipped "F.O.B. Ideal's warehouse" to Home Products via Jiffy Shipping Corporation. The furniture is lost in transit. The loss is suffered by a. Home Products and Ideal Furniture, but not Jiffy Shipping. b. Home Products, Ideal Furniture, and Jiffy Shipping. c. Home Products only. d. Ideal Furniture only.

c. Home Products only.

BBQ, Inc., makes and sells grills to Grill Mart, a retailer, which sells one of the grills to Hope, a consumer. BBQ and Grill Mart include in their contracts a limitation on consequential damages for personal injuries arising from a breach of warranty. This is prima facie unconscionable with respect to a. all of these parties. b. BBQ and Grill Mart, but not Hope. c. Hope only. d. none of these parties.

c. Hope only.

Regional Products, Inc., agrees to sell to Quantity Dealers Corporation a certain amount of goods but no mention is made of where the goods are to be delivered. In general, the UCC requires that the delivery take place at a. a neutral place of business halfway between the parties' locations. b. a UCC-designated warehouse. c. Regional's place of business. d. Quantity's place of business.

c. Regional's place of business.

List sources of Affirmative Action programs.

o Litigation o Voluntary Action o Government Contracts

In Fancy Frills Corporation's suit against Glamour Stores, Inc., the jury re¬turns a verdict in Fancy's favor. Glamour files a motion asking the judge to set aside the verdict and begin new proceedings. This is a mo¬tion for a. a judgment in accordance with the verdict. b. a judgment on the pleadings. c. a new trial. d. judgment n.o.v.

c. a new trial.

Jane and Kelly want Lucy to replace Kelly as a party to their con¬tract. They can best accomplish this by a. a mutual agreement to rescind. b. an accord and satisfaction. c. a novation. d. an alteration of the contract.

c. a novation.

Odell and Poppy sign a contract for the sale of Odell's Pizza Parlor to Poppy. The parties intend their written contract to be a final statement of most, but not all, of the terms of their agreement—Odell must first buy the building from Quin, after which Odell and Poppy will negotiate a final price. The writing that Odell and Poppy signed is a. a completely integrated contract. b. a conditionally integrated contract. c. a partially integrated contract. d. a supplementally integrated contract.

c. a partially integrated contract.

Dag and Enita are in an auto accident. Dag offers Enita $2,000 if she promises not to pursue her potential legal claim against him. Enita agrees. Later, Enita discovers that it will cost $1,500 to repair her car and $4,000 to cover her medical expenses for a latent injury. The agreement between Dag and Enita is a. a covenant not to sue. b. an accord and satisfaction. c. a release. d. promissory estoppel.

c. a release.

Great Workouts, Inc., offers to sell a home gym to Ida and sends it to her on a trial basis. This is a. a consignment. b. a delivery ex-ship. c. a sale on approval. d. a sale or return.

c. a sale on approval.

Nemo pays Office Supply Company $1,500 for a laptop computer. Under the UCC, this is a. a gift. b. a lease. c. a sale. d. not a gift, a lease, or a sale.

c. a sale.

George promises to repair Ford's boat dock in exchange for Efrem's promise to plant trees on George's property. This is a. a delegation. b. an assignment. c. a third party beneficiary contract. d. an alienation.

c. a third party beneficiary contract.

Lana applies for a firefighter's job with Metro City, which responds with a letter setting an appointment for a medical exam. The letter also states that it is "an employment offer conditioned on the applicant passing the exam." This letter is a. a bilateral contract that Lana accepted by applying for the job. b. a quasi contract on which Lana can rely for employment. c. a unilateral contract that Lana can accept by passing the exam. d. no contract.

c. a unilateral contract that Lana can accept by passing the exam.

Moore Properties, Inc., offers in writing to sell to Lawn Acres Development Corporation a certain half-acre of land for "$112,000." After Lawn Acres signs the offer in acceptance and returns it, Moore discovers that the price should have been stated as "$121,000." Moore's misstatement of the price is a. a bilateral mistake. b. a fraudulent misrepresentation. c. a unilateral mistake. d. unconscionable.

c. a unilateral mistake.

Macho Marketing, Inc., and Nacho Food Corporation (NFC) discuss the terms of a contract. Macho faxes NFC a memo on Macho's letterhead that summarizes the items on which they agree, including a two-year term. NFC begins to perform, but Macho refuses to pay. NFC begins to perform, but Macro refuses to pay. Between Macho and NFC, the memo is a. an oral contract. b. a pre-contract. c. a written contract. d. no contract.

c. a written contract.

Bay City Construction, Inc., a contractor, asks Cool Electric, a subcontractor, to provide certain services. Nothing is expressed about payment. Cool provides the services, but Bay City refuses to pay. In Cool's suit to recover, the chief issue is most likely to be whether these parties had a. a formal contract. b. an actual contract. c. an implied-in-fact contract. d. a voidable contract.

c. an implied-in-fact contract.

Bayside Construction Company enters into a contract with Clio to remodel Dewey's Home Store, using products from Eagle Building Supplies. Fresh Food Café is next to Dewey's Home Store. The remodeling is a gift from Clio to Dewey, Clio's nephew and the owner of Dewey's Home Store. The value of Fresh Food's property will increase after Dewey's store is remodeled. Fresh Food is a. a delegatee. b. an assignee. c. an incidental beneficiary. d. an intended beneficiary.

c. an incidental beneficiary.

Linus and Marlena agree that Linus will fix Marlena's roof in exchange for $8,000. Linus spends half of the amount due under the contract to acquire the materials for the job from Natural Roofing Supplies. Natural Roofing is a. a delegatee. b. an intended beneficiary. c. an incidental beneficiary. d. an alien to the contract.

c. an incidental beneficiary.

Mike is arrested at a warehouse in North Industrial Park. A government prosecutor issues a formal charge against Mike for receiving stolen property. This charge is a. an arraignment. b. an indictment. c. an information. d. an inquisition.

c. an information.

Xtra Finance Company is a creditor beneficiary in a deal that involves Yvon and Zack. Xtra, like most creditor beneficiaries, is a. a donee beneficiary. b. an incidental beneficiary. c. an intended beneficiary. d. none of the choices.

c. an intended beneficiary.

Evan is charged with a crime. Almost all federal courts and some state courts would not hold Evan liable if, at the time of the offense, as a result of a mental disease or defect, Evan lacked substantial capacity to a. appreciate the wrongfulness of his conduct only. b. appreciate the wrongfulness of his conduct and obey the law. c. appreciate the wrongfulness of his conduct or obey the law. d. obey the law only.

c. appreciate the wrongfulness of his conduct or obey the law.

Triple-D Cinemas promises to pay Shakir $1,000 to repair and clean its marquee. The act of doing this work is a. not consideration because its performance is a preexisting duty. b. not consideration because its exchange is not a bargain. c. consideration. d. not consideration because its value is legally insufficient.

c. consideration.

Dian, a clerk at an Entertainment Unlimited store, takes a DVD player from the store without permission. Dian is liable for a. appropriation. b. benefiting an employee. c. conversion. d. wrongful interference with a business relationship.

c. conversion.

The Constitution provides that no person shall be deprived of "life, liberty, or property without due process of law." Under this clause, "persons" include a. animals and other "beings in nature." b. buildings and other "manmade creations." c. corporations and other "legal persons." d. none of the choices.

c. corporations and other "legal persons."

Roy's Chick'n Shack orders chicken from Standard Food Supplier, but Standard does not deliver. Roy's will probably be unable to enforce the agreement if the parties a. did not limit the duration of the deal. b. did not specify a payment term. c. did not specify a quantity term. d. have not begun to perform.

c. did not specify a quantity term.

Daphne, an accountant, uses undue influence to induce her client Emily to invest in Faux Plastico, Ltd., a business with little potential. When Emily learns the truth, she can a. do nothing. b. enforce the contract but not rescind it. c. enforce the contract or rescind it. d. rescind the contract but not enforce it.

c. enforce the contract or rescind it.

First National Bank signs an agreement not to compete with City Bank that will bar City Bank from continuing to operate in the state in which both banks do almost all of their business. The agreement is likely a. an unreasonable restraint of trade. b. enforceable. c. enforceable if it is ancillary to an agreement by the First National Bank to purchase all of the assets of the City Bank. d. none of the choices.

c. enforceable if it is ancillary to an agreement by the First National Bank to purchase all of the assets of the City Bank.

Little's Video Store and Major TV Sales Corporation enter into an oral contract for Major's sale to Little's of eighteen DVD players for $80 each. After Little's takes possession of the players, but before it makes payment, this contract is a. enforceable only if it is in writing. b. enforceable only if it is oral. c. enforceable whether it is oral or in writing. d. not enforceable.

c. enforceable whether it is oral or in writing.

Business Rental Corporation (BRC) and Cartage Trucking Company enter into a contract for a lease of ten hydraulic lifts. Under the perfect tender rule, BRC must ship or tender goods to the lessee that a. approximately conform to all of the details of the contract. b. entirely conform to the contract except in one or two details. c. exactly conform to the contract in every detail. d. substantially conform to the contract in most details.

c. exactly conform to the contract in every detail.

Genuine Seed Company and Hillside Farmers Cooperative enter into a contract for a sale of hybrid seeds. Under the perfect tender rule, Genuine Seed must ship or tender seeds to Hillside that a. approximately conform to all of the details of the contract. b. entirely conform to the contract except in one or two details. c. exactly conform to the contract in every detail. d. substantially conform to the contract in most details.

c. exactly conform to the contract in every detail.

Kip sells an apartment building to Lacy with a promise to repair the roof, which violates the local housing code, within six months. One year later, Kip sends Milo, a carpenter, to fix the roof. Lacy orders Milo to leave and refuses to make further payments to Kip, who files a suit against Lacy. Lacy's refusal to make further payments is most likely a. a material breach. b. complete performance. c. excused by Kip's failure to fix the roof. d. substantial, but not complete, performance.

c. excused by Kip's failure to fix the roof.

Ethical standards would most likely be considered violated if Retail Mart Corporation deals with a company in a developing nation that a. agrees to produce goods at Retail Mart's desired price. b. goes unnoticed by "corporate watch" groups. c. exploits its workers. d. pays its workers less than the U.S. minimum wage.

c. exploits its workers.

Superior-Plus Properties, Inc., and Topps Construction Company sign a contract that specifies the amounts to be paid for a building project at various stages and on its completion. Additional compensation may be jus¬tified by a. any business obstacles that arise after the time of the contract. b. changes in the market price of needed materials during the contract. c. extraordinary difficulties unforeseen at the time of the contract. d. no circumstances.

c. extraordinary difficulties unforeseen at the time of the contract.

Applied Business Corporation makes and markets its products nationwide. Under the stakeholder approach, to be considered socially responsible when making a business decision, Applied must take into account the needs of a. its consumers, the community, and society only. b. its employees and owners only. c. its employees, owners, consumers, the community, and society. d. no one.

c. its employees, owners, consumers, the community, and society.

Biff wrongfully takes an unopened carton from a Cold Storage Warehouse loading dock, puts the carton in his car, and drives away. This is a. burglary. b. forgery. c. larceny. d. no crime.

c. larceny.

Joy and Kris enter into a contract for Kris to lay sod in Joy's yard for which she agrees to pay Kris. When Kris's schedule conflicts, she contacts Leza, to whom Kris "assigns all rights under the contract." Kris is a. absolved of any liability under the contract. b. in breach of the contract with Joy. c. liable to Joy if Leza does not perform. d. liable to Leza for inducing a prohibited contract.

c. liable to Joy if Leza does not perform.

Fealty Credit Corporation asks its employees to evaluate their actions and get on the ethical business decision-making "bandwagon." Guidelines for judging individual actions include all of the following except a. an individual's conscience. b. business rules and procedures. c. loopholes in the law or company policies. d. promises to others.

c. loopholes in the law or company policies.

Food Packaging, Inc., agrees to sell 50,000 6-ounce yogurt containers to Golden Dairy Company. Food can obtain only 20,000 of the 6-ounce containers, but also ships 30,000 more expensive 8-ounce containers for the same price. Under these circumstances, Golden a. cannot reject delivery, and Food cannot later replace the containers. b. cannot reject delivery, but Food can later replace the containers. c. may reject delivery, and notice to Golden of Food's intent to cure will give Food a reasonable time to replace the containers. d. may reject delivery, but Food cannot later replace the containers.

c. may reject delivery, and notice to Golden of Food's intent to cure will give Food a reasonable time to replace the containers.

Sid files a suit against Tina. Before going to trial, the parties, with their at¬torneys, meet to try to resolve their dispute. A third party helps them to reach an agreement. This is a. arbitration. b. litigation. c. mediation. d. negotiation.

c. mediation.

Melanie engages in speech that harms others' good reputations on her blog at no.lie.com. The First Amendment gives such speech a. less protection than obscene speech. b. more protection than symbolic speech. c. no protection. d. the same protection as any noncommercial speech.

c. no protection.

Office Accounting, Inc., hires Perry to repair a computer on site for $400, but Perry does not show up as agreed. Office Accounting hires Raul to do the job for $350. Office Accounting may recover from Perry a. compensatory damages. b. consequential damages. c. nominal damages. d. punitive damages.

c. nominal damages.

Dante, a popular performer, dies. His spouse Caitlin sells their house to Buck. Un¬known to Caitlin or Buck, in one of the closets is the mas¬ter recording of an unreleased album. With respect to this recording, Buck can a. keep it because Caitlin should have known about it. b. keep it because the sale of a house includes everything in it. c. not keep it because there was no voluntary consent to its sale. d. not keep it because the sale of a house includes nothing in it.

c. not keep it because there was no voluntary consent to its sale.

InTown Delivery Service promises to deliver a certain couch to Kurt, who promises to pay for the service. If InTown does not perform, the firm may be required to a. do nothing. b. make another promise. c. pay damages. b. perform a different service.

c. pay damages.

Posing as Platinum Bank, Oswald e-mails Nadia, asking her to update her personal banking information through a link in the e-mail. She clicks on the link and types in the data, which Oswald promptly sells to Moe. This is a. cyber stalking. b. employment fraud. c. phishing. d. vishing.

c. phishing.

The police arrest Lou, who confesses to a crime. Later, Lou refutes the confession and demands a trial, at which witnesses testify they saw him commit the crime. Lou is convicted and sentenced. The U.S. Constitution provides safeguards against all of the following except a. deprivations of life or liberty without due process of law. b. not being allowed to question witnesses. c. punishment. d. self-incrimination.

c. punishment.

My-Tee Purchasing Corporation orders from National Sales, Inc., goods that are stored in a Outstate Properties, Inc., warehouse. My-Tee pays for the goods, delivery is via the transfer of a negotiable warehouse receipt, and My-Tee moves the goods out of the warehouse. The risk of loss passes to My-Tee when it a. orders the goods. b. pays for the goods. c. receives the negotiable warehouse receipt. d. moves the goods out of the warehouse.

c. receives the negotiable warehouse receipt.

As part of a sale of a business, Lee signs a covenant not to compete that is unreasonable in its essential terms. To prevent undue hardship, a court will most likely a. enforce the covenant as written. b. enforce the covenant but evaluate its effects over time. c. reform the covenant's terms. d. refuse to enforce the covenant without additional consideration.

c. reform the covenant's terms.

In a suit against Clem, Dona obtains the cancellation of a contrac¬t. This is a. an injunction. b. damages. c. rescission. d. specific performance.

c. rescission.

Clay, a minor, signs a contract to buy a car from Delta Motors by mis¬repre¬senting his age as twenty-one. Clay fails to make the pay¬ments. Delta sues. In most states, Clay can a. not return the car nor avoid further liability. b. not return the car but can avoid further liability. c. return the car and avoid further liability. d. return the car but cannot avoid further liability.

c. return the car and avoid further liability.

EZ Equipment Corporation leases six forklifts to Faulty Refining Company, but as the forklifts are delivered, they are lost in an explosion. Under the UCC, the parties' rights and obligations with respect to the loss depend on the concept of a. physical possession. b. product liability. c. risk of loss. d. title.

c. risk of loss.

Candy enters into a contract under which she agrees to pay Dino for a business survey and review of her competitors. Dino agrees to deliver the survey by July 1. Candy's offer, on July 1, to pay Dino is a. complete. b. substantial. c. tender. d. tough.

c. tender.

Jill is an appellate court judge. In this capacity, Jill establishes a rule of law. Under the doctrine of stare decisis, the principle must be adhered to by a. all courts. b. courts of lower rank only. c. that court and courts of lower rank. d. that court only.

c. that court and courts of lower rank.

Sid induces Ty to enter into a contract for the sale of a warehouse about which Sid fraudulently misrepresents a number of material facts. Sid also tells Ty that his commission is 6 percent, but their signed, written contract states "12 percent." The parol evidence rule governs a. contracts that are induced by fraud. b. contracts that must be in writing to be enforceable. c. the admissibility in court of oral evidence. d. the reformation of oral and written statements into one contract.

c. the admissibility in court of oral evidence.

Desiree and Eduardo decide to wager, in violation of a state statute, on the out¬come of a soccer game. They each deposit money with Felipe, who agrees to pay the winner of the bet. Before the game begins, Eduardo tells Felipe that he has changed his mind about the bet. Eduardo can recover a. the amount of his bet and the amount of Desiree's bet. b. the amount of his bet minus Felipe's expenses. c. the amount of his bet only. d. nothing.

c. the amount of his bet only.

Halley, a lawyer on the staff of International Group, applies the utilitarian theory of ethics in business contexts. Utilitarianism focuses on a. moral values. b. religious beliefs. c. the consequences of an action. d. the nature of an action.

c. the consequences of an action.

On April 1, OK Contractors, Inc., contracts to build a store for Lo-Cost Jewelers at a specific location in Metro City. On May 1, Metro changes its zoning laws to prohibit the construction of a commercial building at that location. When the store is not built, Lo-Cost files a suit against OK. In this situation a. OK is in breach of contract. b. Metro is in breach of contract. c. the contract is discharged. d. the contract is suspended

c. the contract is discharged.

Ghangzhou, Ltd., in China and Hot Togs, Inc., in the United States enter into a contract for a sale of casual clothing. Under the United Nations Convention on Contracts for the International Sale of Goods (CISG), on a breach of the contract, the nonbreaching party can normally recover as damages the difference between a. any loss avoided and any profit gained. b. the actual price and the hoped-for price. c. the contract price and the market price. d. the current prices in the parties' two countries.

c. the contract price and the market price.

Owen and Pablo enter into a contract for a sale of fifty Western saddles. Pablo pays, but Owen does not deliver. Pablo can normally recover as damages the difference between a. any loss avoided and any profit gained. b. the actual price and the hoped-for price. c. the contract price and the market price. d. the current prices in the parties' locations.

c. the contract price and the market price.

Estelle enters into a contract to buy 132 acres from Desmond to subdivide and sell in quarter-acre lots for Country Acres, a residential development. If Estelle breaches the contract, Desmond's remedy would most likely be a. a certain ratio of the amount that Estelle has in liquid funds. b. a percentage of Estelle's unrealized profit. c. the difference between the land's contract and market prices. d. specific performance.

c. the difference between the land's contract and market prices.

c. the difference between the wages at the two jobs plus $100.

Through a series of e-mail messages, Hudson convinces Gwen to transfer funds to Hudson to invest in Fried Critter Company stock on Gwen's behalf. Fired Critter stock does not exist. This is computer crime in which the computer is a. the object of the crime. b. the subject of the crime. c. the instrument of the crime. d. irrelevant to the crime

c. the instrument of the crime

Mona contracts to repair a computer for NuData, Inc. (NDI). Mona knows that without the computer, NDI will lose a sale. Mona does not perform as promised. NDI files a suit against Mona. As consequential damages, NDI can recover a. the cost of a new computer. b. the difference between Mona's price and the actual cost of repair. c. the loss of profit from the lost sale. d. nothing.

c. the loss of profit from the lost sale.

In cyberspace, Bret attempts to steal consumers' credit card numbers stored in the networked computers of Cinco Corporation, a financial payments service provider. The quantity of data that can be stolen is limited by a. the distance between the computers of Bret and Cinco. b. the discrepancy in time between the locations of Bret and Cinco. c. the speed of the connection between the computers of Bret and Cinco. d. the same physical limits that exist in the "real" world.

c. the speed of the connection between the computers of Bret and Cinco.

The U.S. Congress enacts a new federal statute that imposes liability on businesses emitting significant amounts of a certain pollutant into the environment. This statute applies a. only to matters not covered by state law. b. only to those states that adopt the statute. c. to all of the states. d. to none of the states.

c. to all of the states.

Bob is arrested at his home, after the police search it and seize certain property to be used as evidence. A judge sets Bob's bail, as required by a state statute, and Bob is put on trial. The U.S. Constitution provides safeguards against all of the following except a. arrests without probable cause. b. excessive bail. c. trying someone for a criminal offense. d. unreasonable searches and seizures.

c. trying someone for a criminal offense.

Craig decides to sell his Double-D Ranch in an auction "without reserve." If Craig changes his mind at the auction, he can withdraw his property a. only before the auctioneer announces that the ranch is sold. b. only before the auctioneer delivers the deed to the buyer. c. under no circumstances. d. within thirty days after the auction.

c. under no circumstances.

The police obtain a search warrant and search Dave's apartment. After yelling obscenities at the officers, Dave confesses to a crime and impli¬cates his friends. The Constitution protects against a. obscene speech only. b. others' implication only. c. unreasonable searches only. d. obscene speech, others' implication, and unreasonable searches.

c. unreasonable searches only

On Tad's eighteenth birthday, he decides that he no longer wants to keep a car he bought from U-Pick Autos, Inc., when he was seventeen. His right to disaffirm the deal will depend on a. the car's condition when Tad bought it. b. the car's current condition. c. whether Tad acts within a reasonable period of time. d. whether U-Pick has the right to disaffirm.

c. whether Tad acts within a reasonable period of time.

Ron operates a scrap metal business and contracts to provide ten tons of scrap steel at $50 per ton to be delivered to Paul in six months. An unforeseen shortage of scrap steel suddenly develops, making it impossible for Ron to fulfill his contract for less than $500 per ton. Ron's best defense against performing the contract would be

commercial impracticability.

Mike, a recent law school graduate, takes the bar exam in July. He expects to get the results in the mail in September. In August, he is hired by the law firm of Dewey, Cheatum, and Howe. His contract says, "You can start immediately at $42,000 per year, but if you fail the bar exam, you will be terminated immediately." The bar exam clause is a(n)

condition subsequent. EXPLANATION: Do not mistake this for a condition precedent because the exam was taken before employment started. Conditions do not follow a time line. This is a condition subsequent because it gives the firm a way to terminate a contract that has already started if an uncertainty occurs. If the contract had said, "We will hire you, if you pass the bar," then it would by a condition precedent.

As part of a sale of her marketing firm, Peggy signs a covenant not to compete that is unreasonable in its essential terms. To prevent undue hardship, a court will most likely a. convert the un

convert the unreasonable terms into reasonable ones.

Multiple Choice: Megan was employed by a large company. Her supervisor told her to falsify government reports. She refused and was fired. She sued for wrongful discharge. Her employer claimed that, since Megan was an at-will employee, she had no legal right to claim the company was liable for damages. Is the employer right? a. Yes. An at-will employee does not have a legal right to claim wrongful discharge of employment. b. Yes. As an employee, Megan owes a duty of loyalty to her employer. If the company was found to have acted illegally by falsifying the reports, it (not Megan) would be liable. c. No. Even though Megan was an at-will employee, such employees may not be fired without just cause. d. No. Though at-will employees do not have extensive rights relative to job security, they may not be legally fired for refusing to perform an illegal act.

Quiet Soles, Inc., and Retail Footwear Stores enter into a contract for the sale of shoes. The contract indicates that the price includes transportation costs to a specific destination by including the term a. C.I.F. b. delivery ex-ship. c. F.A.S. d. F.O.B.

d. F.O.B.

Heather and Genice agree that Genice can satisfy her debt to Heather by pay¬ing the money directly to Fava (to whom Heather owes a debt). The designation of this con¬tract as a third party benefi¬ciary contract is determined by the intent to benefit a. all of the parties. b. Heather only. c. Genice only. d. Fava only.

d. Fava only.

Little Jewelry Store orders display racks from Marketing Supplies, Inc. (MSI). MSI mistakenly ships racks of the wrong size and color, which Little rejects and returns via New Shipping Company. During the return, the racks are lost. The loss is suffered by a. Little only. b. Little and MSI, but not New Shipping. c. Little, MSI, and New Shipping. d. MSI only.

d. MSI only.

Martin buys 1,000 bales of hay from Nuevo Farms. The parties agree that the hay will be transported F.A.S. via Overland Transport Company. Nuevo Farms' truck carrying the hay explodes before reaching Overland Transport. The loss is suffered by a. Martin and Nuevo Farms, but not Overland Transport. b. Martin, Nuevo Farms, and Overland Transport. c. Martin only. d. Nuevo Farms only.

d. Nuevo Farms only.

Perfect Furnishings, Inc., agrees to lease a desk to Research Resources, Inc. (RRI), which requests that the desk be left outside Streetside Warehouse for RRI to pick up. Before RRI retrieves the desk, it is stolen. The loss is suffered by a. Perfect Furnishings and RRI, but not Streetside Warehouse. b. Perfect Furnishings only. c. Perfect Furnishings, RRI, and Streetside Warehouse. d. RRI only.

d. RRI only.

Brothers Cafe buys 100 bags of oranges from Sisters Citrus Company. The parties agree to ship the oranges "F.O.B. Brothers Cafe" via Tonnage Trucking Company. The oranges rot in transit. The loss is suffered by a. Brothers Cafe and Sisters Citrus, but not Tonnage Trucking. b. Brothers Cafe only. c. Brothers Cafe, Sisters Citrus, and Tonnage Trucking. d. Sisters Citrus only.

d. Sisters Citrus only.

In Case 20.3, Jones v. Star Credit Corp., which of the following factors was not considered by the court when it declared a contract for the purchase of a freezer unconscionable a. The price the plaintiffs were charged was more than four times the freezer's retail value. b. The credit charges alone exceeded the freezer's retail value. c. The seller knew of the buyers' limited resources. d. The freezer was not merchantable.

d. The freezer was not merchantable.

Emma advertises a reward for the return of her lost dog. Frank, who does not know of the reward, finds and returns the dog. Frank cannot recover the reward because he

did not know of the reward when Frank found and returned the dog.

Town Style Stores orders leather jackets from Unique Clothing Company. Unique mistakenly ships denim jackets, which Town rejects and returns via Value Transport, Inc. During the return, the jackets are lost. The loss is suffered by a. Town and Unique, but not Value. b. Town only. c. Town, Unique, and Value. d. Unique only.

d. Unique only.

XL Electronics orders thirty hard drives from Yang Computers, Inc. The hard drives are stored in City Warehouse. Under the terms of the order, Yang must give XL a warehouse receipt for the goods, which XL will then pick up. Title to the goods passes to XL when a. City Warehouse stores the goods. b. XL orders the goods. c. XL picks up the goods. d. Yang gives XL a warehouse receipt for the goods.

d. Yang gives XL a warehouse receipt for the goods.

Impersonating Sophie, Ralph makes provocative comments online that deceive others into threatening Sophie, putting her in reasonable fear for her safety. Under federal law, this is a. a crime only if a person who believes the comments acts on them. b. a crime only if Sophie and Ralph are in the same jurisdiction. c. not a crime. d. a crime.

d. a crime.

Taylor digitally copies business software without the authorization of the owners and sells the copies to others via the Internet. Under federal law, this is a. a crime only if the copies are not the same as, or close to, the original. b. a crime only if Taylor and the buyers are in different jurisdictions. c. not a crime. d. a crime.

d. a crime.

Drew contracts to sell a residential duplex to Evan. The contract provides that if Drew does not close the deal by September 15, he must pay Evan one-half of the contract price. This provision is not enforceable because it is a. a liquidated damages clause. b. a mitigation clause. c. a nominal damages clause. d. a penalty clause.

d. a penalty clause.

Emil wants to initiate a suit against Fast Credit Company by filing a complaint. The complaint should include a. an explanation of the proof to be offered at trial. b. a motion for judgment n.o.v. c. a motion for judgment on the pleadings. d. a statement of the grounds for the court to exercise jurisdiction

d. a statement of the grounds for the court to exercise jurisdiction.

Molly files a suit against Naomi. They meet, and each party's at¬torney ar¬gues the party's case before a judge and jury. The jury presents an advi¬sory ver¬dict, after which the judge meets with the parties to en¬courage them to set¬tle their dispute. This is a. court-ordered arbitration. b. early neutral case evaluation. c. a mini-trial. d. a summary jury trial.

d. a summary jury trial.

In deciding questions of corporate social responsibility, Valley Disposal & Recycling, Inc., is concerned with a. how the corporation can best fulfill any ethical duty to society. b. the effect on corporate profits of ignoring any ethical duty to society. c. whether the corporation owes any ethical duty to society. d. all of the choices.

d. all of the choices.

Sandy, a businessperson, is convicted of RICO offenses. Sandy's penalties may include a. closing down a business, but not forfeiting its assets or selling it. b. forfeiting business assets, but not closing it down or selling it. c. selling a business, but not closing it down or forfeiting its assets. d. closing down a business, forfeiting its assets, or selling it.

d. closing down a business, forfeiting its assets, or selling it.

Adult Shoppe in Beach City sells a variety of publications, including child pornography. Beach City enacts an ordinance prohibiting the sale of such materials. This ordinance is most likely a. an invalid restriction of individuals' privacy. b. an unconstitutional restriction of speech. c. a violation of adults' rights to enjoy certain privileges. d. constitutional under the First Amendment.

d. constitutional under the First Amendment.

Jeri is indicted. Before she is arrested, she confesses to the crime in a conversation with Kelly, the arresting officer. Kelly then arrests Jeri and advises her of the right to counsel. Later, Jeri claims that her statement should be excluded as evidence from her trial. The statement will most likely be a. admitted because Jeri knew she did the crime and confessed. b. admitted because Jeri made it before being advised of her rights. c. excluded because a confession is not admissible in a criminal trial. d. excluded because it was elicited before Jeri was advised of her rights.

d. excluded because it was elicited before Jeri was advised of her rights.

A contract between Kim and Larry to lease real property contains an excul¬patory clause. This clause is a. enforceable only if either party is in a business important to the pub¬lic interest. b. enforceable only if the lease involves residential property. c. generally enforceable as a matter of public policy. d. generally unenforceable.

d. generally unenforceable.

Lora files a suit in Michigan against Ned over the ownership of a boat docked in a Michigan harbor. Lora and Ned are residents of Ohio. Ned could ask for a change of venue on the ground that Ohio a. has a sufficient stake in the matter. b. has jurisdiction. c. has sufficient minimum contacts with the parties. d. is a more convenient location to hold the trial

d. is a more convenient location to hold the trial.

Consumer Payments Processing Corporation (CPPC) and Mall Kiosk Company make a deal for CPPC's services, via e-records. Under the UETA, an e-record is considered received when a. it enters the recipient's processing system in a readable form. b. the recipient is aware of its receipt. c. the recipient is aware that it has been sent. d. it leaves the sender's control.

d. it leaves the sender's control.

In Restful Motel's suit against Sleepy Hotels, Inc., the jury returns a verdict in Restful's favor. Sleepy files a motion stating that even if the evidence is viewed in the light most favorable to Restful, a reasonable jury should not have found in its favor. This is a motion for a. a judgment in accordance with the verdict. b. a judgment on the pleadings. c. a new trial. d. judgment n.o.v.

d. judgment n.o.v.

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 back-up system. c. is composed on the sender's computer. d. leaves the sender's control.

d. leaves the sender's control.

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 to the content of an item of mail. c. depositing items in the postal system without proper postage. d. mailing or causing someone else to mail a writing.

d. mailing or causing someone else to mail a writing.

Holiday Sales Company and Global Distributors, Inc., enter into an express contract for the delivery of imported specialty goods. Express contract terms are given a. less priority than the parties' prior dealing. b. less priority than the trade usage in the parties' industry. c. less priority than the parties' course of performance. d. more priority than the prior dealing, course of performance, and trade usage.

d. more priority than the prior dealing, course of performance, and trade usage.

Trudy and Uri enter into a contract for the sale of Trudy's house for which Uri agrees to pay her $250,000. Uri wants to transfer his right to the ownership of the house to Val, his niece. This transfer a. is prohibited. b. may be oral or written. c. must be implied. d. must be in writing.

d. must be in writing.

Reel Graphics, Inc., agrees to assume a debt of Suave Marketing Company to Town Credit Union. This promise is for Reel's benefit. To be enforceable, the promise a. must be in writ¬ing. b. must be in writ¬ing only if the debt is valued at $500 or more. c. must be in writing only if the debt will not be repaid within one year. d. need not be in writing.

d. need not be in writing.

Java Cafes, Inc., and Kaffe Import Corporation dispute a term in their contract. The least expensive method to resolve the dis¬pute between Java and Kaffe may be a. arbitration because the case will be heard by a mini-jury. b. litigation because each party will pay its own legal fees. c. mediation because the dispute will be resolved by a non-expert. d. negotiation because no third parties are needed.

d. negotiation because no third parties are needed.

Betty files a suit against Carl. Before going to trial, the parties meet, with their attorneys to represent them, to try to resolve their dispute without involving a third party. This is a. arbitration. b. litigation. c. mediation. d. negotiation

d. negotiation.

Business Markets Coalition (BMC), a political lobbying group, wants a certain policy enacted into law. If BMC's policy conflicts with the U.S. Constitution, a law embodying it can be enacted by a. any state legislature and Congress. b. any state legislature but not Congress. c. Congress but not any state legislature. d. none of the choices.

d. none of the choices.

Kirk Custodial Service and Green Energy Company enter into an oral contract under which Kirk agrees to provide custodial service for Green's facilities for two years. This contract is en¬forceable by a. Kirk. b. Green. c. any interested third party, such as a janitorial supplies provider. d. none of the choices.

d. none of the choices.

Liz trespasses on Mega Corporation's property. Through the use of rea¬sonable force, Mega's security guard Ned detains Liz until the police ar¬rive. Mega is liable for a. assault and battery. b. false imprisonment. c. intentional infliction of emotional distress. d. none of the choices.

d. none of the choices.

Manny wants to transfer his right to buy $400 of pistachio nuts under a contract with Nila to Opie. To ensure that the transfer of the right is valid, Manny must a. designate Opie as a "delegate." b. file a notice of assignment in the public records. c. tell Nila that he has no right and no liability under the contract. d. none of the choices.

d. none of the choices.

Mei orally promises Nester that she will buy his fishing trawler for $10,000. Before either party acts in reliance on this promise, under the doctrine of promissory estoppel, the transaction is enforceable by a. the seller or the buyer. b. the marina where the trawler is docked. c. the state in which the trawler is located. d. none of the choices.

d. none of the choices.

OK Dry-Cleaning advertises so effectively that the regular customers of its competitor Purity Cleaners patronize OK instead of Purity. This is a. appropriation. b. conversion. c. wrongful interference with a contractual relationship. d. none of the choices.

d. none of the choices.

Ilsa and Jiffy Loan Company enter into an oral contract under which Ilsa agrees to pay Kyle's debt if he does not. Ilsa does not get any per¬sonal benefit from the agreement. This contract is enforceable by a. any party. b. Jiffy only. c. Jiffy or Kyle. d. none of the parties.

d. none of the parties.

Clyde enters Desert Decathlon, an athletic competition in which Clyde has often competed. Regarding the risk of injury, Clyde assumes the risks a. attributable to the Decathlon in any way. b. different from the risks normally associated with the Decathlon. c. greater than the risks normally associated with the Decathlon. d. normally associated with the Decathlon.

d. normally associated with the Decathlon.

Superior Energy Corporation engages in ethical behavior solely for the purpose of get¬ting good publicity and thereby increasing profits. Superior is a. acting unethically in its pursuit of publicity. b. acting unethically in its pursuit of profits. c. acting unethically in its setting of priorities. d. not acting unethically.

d. not acting unethically.

Rite Clothiers, Inc., sells t-shirts to Brand Name Stores, Inc., under an existing contract. When textile costs increase, Brand agrees to a price increase, but later wants to cancel the contract. Brand may a. cancel the contract immediately. b. cancel the contract only after accepting a final shipment. c. cancel the contract only on reasonable notice. d. not cancel the contract.

d. not cancel the contract.

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 does not object after learning of Nick's status. b. enforceable only if Pat knows that Nick is unlicensed. c. enforceable only if the outcome is successful. d. not enforceable.

d. not enforceable.

To avoid liability for intentional injuries, Vermont Power Corporation includes in its contracts an exculpatory clause. This is a. enforceable if the other parties are protected from liability. b. enforceable if the other parties consent to it. c. enforceable if the other parties have equal bargaining power. d. not enforceable.

d. not enforceable.

To avoid liability for intentional injuries, Vermont Power Corporation in¬cludes in its contracts an exculpatory clause. This is a. enforceable if the other parties are protected from liability. b. enforceable if the other parties consent to it. c. enforceable if the other parties have equal bargaining power. d. not enforceable.

d. not enforceable.

Jim is an appliance salesperson. To make a sale, he asserts that a certain model of a Kitchen Helper refrigerator is the "best one ever made." This is a. fraud if the statement is the truth. b. fraud if Jim believes that this statement is not true. c. fraud if Jim is stating his opinion, not the facts. d. not fraud.

d. not fraud.

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 must sell it a car of comparable value. b. liable to Gusto and must sell it his car. c. not liable to Gusto because he is a minor. d. not liable to Gusto because the sale of the car disaffirmed their deal.

d. not liable to Gusto because the sale of the car disaffirmed their deal.

Even-Bilt Construction contracts to build a warehouse for Discount Sales Mart. Even-Bilt completely performs. Discount Sales is entitled to a. an accord. b. rescission. c. damages. d. nothing more.

d. nothing more.

Jean sends e-mail to Irwin promising a percentage of the amount in an African bank account for assistance in transferring the funds to a U.S. bank account. Irwin forwards his account number, but the funds are never sent. Instead, Jean quickly withdraws the funds in Irwin's account. This is a. online greed but not fraud. b. an online "fool-me-once, shame on you" occurrence but not fraud. c. online gambling but not fraud. d. online fraud.

d. online fraud.

Julio meets Inez on Hello!, a social networking Web site. Inez asks Julio to pay her expenses to travel to meet him in Center City. He sends the funds, but she does not make the date. This is a. online embarrassment but not fraud. b. online date-dumping but not fraud. c. an online wake-up call but not fraud. d. online fraud.

d. online fraud.

Jen is a third party beneficiary under a contract between Kyla and Leo. Kyla and Leo can modify or rescind their contract without Jen's consent a. at any time. b. at no time. c. only after Jen's rights have vested. d. only before Jen's rights have vested.

d. only before Jen's rights have vested.

Dylan enters into a contract to manage the operations of Cash's account¬ing office for one year, renewable for subsequent one-year terms. If this contract is discharged like most contracts, it will be a. canceled. b. compromised. c. altered. d. performed.

d. performed.

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 particular destination. c. inspect the goods before shipping them. d. place the goods into the hands of a carrier.

d. place the goods into the hands of a carrier.

Rite Contractors, Inc., agrees to build a motel for Sleep Inn Corporation. The project proceeds according to plan, but before it is done, Sleep tells Rite to quit. Rite may recover a. the contract price less costs of materials and labor. b. the contract price. c. the costs needed to complete construction. d. profits plus the costs incurred up to the time of the breach.

d. profits plus the costs incurred up to the time of the breach.

Primo Pools Company and Aquatic Recreation, Inc., enter into a contract for a sale of prefabricated swimming pools. Under either a shipment contract or a destination contract, the seller must a. allow the buyer to reject the goods for any reason. b. deliver the goods to a particular destination. c. place the goods into the hands of a carrier. d. provide the buyer with any necessary documents of title.

d. provide the buyer with any necessary documents of title.

Pure Oil Company enters into a contract with QuikBilt, Inc., to construct an oil pipeline to withstand specific conditions. If QuikBilt fails to meet this standard, which is construed as a breach of contract and a breach of a duty of care, Pure might be awarded punitive damages to a. establish, as a matter of principle, that QuikBilt acted wrongfully. b. provide Pure with funds for a foreseeable loss beyond the contract. c. provide Pure with funds for its loss of the bargain. d. punish QuikBilt and deter others from similar acts.

d. punish QuikBilt and deter others from similar acts.

At a prison in Ohio, inmate Steve recruits other inmates to play Towers & Trolls, a potentially violent, fantasy, role-playing game. Ryan, the prison's warden, confiscates the game materials and bans its play at the prison. Under the principles discussed in "A Sample Court Case," Singer v. Raemisch, Ryan most likely acted a. in violation of Steve's rights under the First Amendment. b. reasonably in taking the game materials but not in banning its play. c. reasonably in banning the game but not in taking the materials. d. reasonably in the circumstances and under the law.

d. reasonably in the circumstances and under the law.

Joy invites Ken into her apartment. Ken commits trespass to land if he a. enters the apartment with fraudulent intent. b. harms the apartment in any way. c. makes disparaging remarks about Joy to others. d. refuses to leave when Joy asks him to go.

d. refuses to leave when Joy asks him to go.

Design Architects, Inc., and Excel Supply Company contract for a sale of office furniture. Design Architects, which is insolvent, breaches the contract. Excel can stop delivery of the goods in transit a. only if the quantity is at least a carload. b. only if the quantity is at least a planeload. c. only if the quantity is at least a truckload. d. regardless of the quantity.

d. regardless of the quantity.

Field Gardens and Gourmet Restaurant, Inc., enter into a contract for a sale of lettuce before Gourmet declares bankruptcy. Field can stop delivery of the goods in transit a. only if the quantity is at least a carload. b. only if the quantity is at least a planeload. c. only if the quantity is at least a truckload. d. regardless of the quantity.

d. regardless of the quantity.

Mike, an advocate of a certain religion, publishes an article in New Times magazine insisting that Congress base all federal law on his religion's principles. The First Amendment guarantees Mike's freedom of a. religion only. b. speech only. c. the press only. d. religion, speech, and the press.

d. religion, speech, and the press.

The Texas Supreme Court decides the case of Livewire Co. v. Power Corp. Of nine justices, five believe the judgment should be in Livewire's fa¬vor. Justice Bellamy, one of the five, writes a separate opinion. The four justices who believe the judgment should be in Power's favor join in a third separate opinion. These opinions are collected and published in volumes called a. citations. b. codes. c. regulations. d. reporters.

d. reporters.

Leyte believes an old comic book he owns has little value, but Milo is con¬vinced it is a valu¬able collector's item. Leyte sells it to Milo for $10 before learning it is worth $1,000. Leyte can a. not rescind the contract. b. rescind the contract on the basis of fraud. c. rescind the contract on the basis of mistake. d. rescind the contract on the basis of puffery.

d. rescind the contract on the basis of puffery.

Vance points a gun at Workman, threatening to shoot him. Workman hits Vance, causing his death. Charged with homicide, Workman can successfully claim as a defense a. insanity. b. duress. c. entrapment. d. self-defense.

d. self-defense.

Rita orders 1,000 cases of 1/4-inch nuts from Steel Parts Company's 10,000-case lot. Steel Parts separates 1,000 cases from the lot. Title and risk of loss a. remain with Steel Parts until Rita acknowledges tender of delivery. b. remain with Steel Parts until Rita accepts 1,000 cases. c. shift to Rita after she accepts the nuts and inspects them for defects. d. shift to Rita when Steel Parts separates the cases.

d. shift to Rita when Steel Parts separates the cases.

Gina, a minor, enters into a contract to buy a tractor from Herb, an adult. If the deal is set aside, restoring Gina and Herb to the positions they held be¬fore the contract is required in a. all states. b. most states. c. no states. d. some states.

d. some states.

Estelle enters into a contract to buy 132 acres from Desmond to subdivide and sell in quarter-acre lots for Country Acres, a residential development. If Desmond breaches the contract, Estelle's remedy would most likely be a. a certain ratio of the amount that Desmond has in liquid funds. b. a percentage of Desmond's unrealized profit. c. the difference between the land's contract and market prices. d. specific performance.

d. specific performance.

For Petra to recover the benefit of her bargain from a breached real estate contract with Quality Properties, Inc., the most appropriate remedy is a. damages. b. quasi-contractual recovery. c. rescission. d. specific performance.

d. specific performance.

Grady enters into a contract to buy 440 acres from Hollis to expand Grady's ranch. If Hollis breaches the contract, Grady's normal remedy would be a. damages. b. quasi contract. c. reformation. d. specific performance.

d. specific performance.

Building Restoration, Inc. (BRI), enters into a contract to refurbish an old train depot for Casual Dining, Inc., which plans to open Eat Up Restaurant in that location. If BRI completes most of the work promised in the contract, its performance will be a. absolute. b. complete. c. material. d. substantial.

d. substantial.

Justice For All, a political organization, files a claim to challenge a Colorado statute that limits the liberty of all persons to broadcast "annoying" radio commercials. This claim is most likely based on the right to a. equal protection of the law. b. privacy. c. procedural due process. d. substantive due process.

d. substantive due process

d. sue Even-Flo for damages.

Kelly offers to buy cooking oil from Jim. Jim believes Kelly asks for 10,000 gallons and orally agrees to the sale. When the parties later dispute the deal in court, Jim's claim of 10,000 gallons and Kelly's testimony that she ordered only 1,000 gallons a. prevents the enforcement of any contract between these parties. b. supports an enforceable contract for 10,000 gallons. c. supports an enforceable contract for 5,500 gallons. d. supports an enforceable contract for 1,000 gallons.

d. supports an enforceable contract for 1,000 gallons.

Chuckie, president of DrinkUp Fresh Beverages, Inc., does not ap¬ply utilitarianism to business ethical issues. One problem with utilitari¬an¬ism is that it a. gives business profits priority over production costs. b. ignores the practical costs of a given set of circumstances. c. requires complex cost-benefit analyses of simple situations. d. tends to justify human costs that many find unacceptable.

d. tends to justify human costs that many find unacceptable.

Ollie buys a cup of coffee for $2, a magazine for $5, and a cellphone for $600. The requirement of a writing for the enforceability of a contract for a sale of goods at a certain price or more is governed by a. the common law. b. the parol evidence rule. c. the parties' agreement. d. the Uniform Commercial Code.

d. the Uniform Commercial Code.

Rodeo, S.A., which is based in Spain, enters into a contract for the sale of seven hydraulic lifts to Tonnage Shipping Company, which is based in the United States. This contract is governed by a. Spanish law. b. the provisions in the laws of both countries that are similar. c. the UCC. d. the United Nations Convention on Contracts for the International Sale of Goods.

d. the United Nations Convention on Contracts for the International Sale of Goods.

Made4U Goods, Inc., asks its employees, many of whom are mem¬bers of the National Machinists Union, to apply the utilitarian theory of ethics. This theory does not require a. a choice among alternatives to produce the maximum so¬cietal utility. b. a determination of whom an action will affect. c. an assessment of the effects of alternatives on those affected. d. the acquiring of the means of production by workers.

d. the acquiring of the means of production by workers.

Tia signs a lease that states that any change in the zoning law that af¬fects the lease will cause its termination. Union City's zoning board adopts a new zoning classification that affects the lease. This adoption satis¬fies a. no condition. b. the condition precedent. c. the concurrent condition. d. the condition subsequent.

d. the condition subsequent.

Jaime and Kip, consumers, transact a deal over the Internet. Their contract does not mention the UETA. The UETA covers a. none of the contract. b. only the part of the contract that involves computer data. c. only the part of the contract that does not involve computer data. d. the entire contract.

d. the entire contract.

Mona asserts that a contract she entered into with Nate is unenforceable. Defenses to the enforcement of a contract include a. a desire not to perform. b. adverse economic consequences. c. results that do not match expectations. d. the lack of a party's genuine assent.

d. the lack of a party's genuine assent.

In an action against Elin, Frank obtains a remedy. This is a. an administrative agency's enforcement of its rule. b. a principle of the law derived from earlier court cases. c. a statute enacted by a state legislature or Congress. d. the legal means to recover a right or to redress a wrong.

d. the legal means to recover a right or to redress a wrong.

Bob, research manager for CornAgri Products, Inc., ap¬plies utilitarian ethics to determine that an action is morally cor¬rect when it produces the greatest good for a. Bob. b. CornAgri. c. the fewest people. d. the most people.

d. the most people.

Network Corporation files a suit against Omega, Inc., alleging that Omega breached a contract to sell Network a computer system. Network is a. the appellant. b. the appellee. c. the defendant. d. the plaintiff.

d. the plaintiff.

During the trial phase of Fuel Corporation's suit against Gas Stations, Inc., their attorneys engage in voir dire. This is a. the assessment of the arguments on the issues. b. the determination of the issues to be argued. c. the litigation of the issues and arguments. d. the selection of jurors.

d. the selection of jurors.

Clay buys an MP3 player for $200 and a pair of stereo speakers for $600 from a Discount City store, and downloads $300 worth of digital music from E-Music.com. To be enforceable, the contract that must be in writing is the purchase of a. the digital music, the MP3 player, and the speakers. b. the MP3 player and the speakers only. c. the MP3 player only. d. the speakers only.

d. the speakers only.

Dru tells his Excel Company coworkers that Fiona, Excel's office manager, is stealing from their employer. The statement is defamatory only if a. a coworker believes it. b. Fiona feels as if she were falsely imprisoned. c. the statement is true. d. the statement is false.

d. the statement is false.

Jaqy distributes a handbill among her neighbors accusing one of them—Ked—of being a convicted sex offender. The statement is defamatory only if a. a neighbor repeats it. b. Ked suffers emotional distress. c. the statement is true. d. the statement is false.

d. the statement is false.

Levi, a citizen of Maryland, obtains a federal license to operate a commercial fishing boat in Chesapeake Bay. The Maryland state legislature enacts a law that bans all commercial fishing in the bay. The state law most likely violates a. no provision in the U.S. Constitution. b. the commerce clause. c. the due process clause. d. the supremacy clause.

d. the supremacy clause.

Brad defends against a breach-of-contract suit by College Credit Corporation by claiming that their deal—a student loan accruing interest at a certain rate and payable beginning on a certain date—was unfair because the consideration for their contract was inadequate. A court is most likely to evaluate the adequacy of consid¬era¬tion if a. a thing exchanged has no intangible value to one of the parties. b. something exchanged is not of direct economic or financial value. c. the items exchanged were of unequal value. d. there is a gross disparity in the value of the consideration exchanged.

d. there is a gross disparity in the value of the consideration exchanged.

As a joke, Jem takes Kyla's business law textbook and hides it so that Kyla cannot find it during the week before the exam. Jem may have committed a. appropriation. b. conversion. c. intentional infliction of emotional distress. d. trespass to personal property.

d. trespass to personal property.

Dan steals Eve's necklace and sells it to Fiona. Eve can recover the necklace from Fiona a. only if Fiona did not know that the necklace was stolen. b. only if Fiona gave legally sufficient consideration for the necklace. c. only if Fiona knew that the necklace was stolen. d. under any circumstances.

d. under any circumstances.

Bree is a real estate broker licensed only in Minnesota. She concludes a sale in North Dakota on O'Reilly's behalf. Bree's contract with O'Reilly to be paid a certain commission for the sale is a. enforceable if O'Reilly comprehended the consequences. b. enforceable if O'Reilly knew Bree was not licensed in North Dakota. c. enforceable if the amount of her commission is reasonable. d. unenforceable.

d. unenforceable.

Numeric Methods Corporation promises to give stock options to Orin, a project schedule manager, for projects that have already been completed ahead of schedule. This promise is a. enforceable because it is a new contract. b. enforceable because it is an illusory promise. c. enforceable because it is supported by past consideration. d. unenforce¬able.

d. unenforce¬able.

DeLouse Plastics Corporation pays its executives an excessive amount relative to other employees and to what executives at competitive companies are paid. This is most likely to be challenged as a. illegal and unethical. b. illegal only. c. neither illegal nor unethical. d. unethical only.

d. unethical only.

According the court in Case 22.1, Maple Farms, Inc. v. City School District of Elmira, the defense of commercial impracticability will not excuse the performance of a contractual obligation when there is an increase in the seller's costs while the contract is in force a. unless the increase in the seller's costs is substantial. b. under any circumstances. c. unless the increase in the seller's costs makes it impossible for the seller to perform without losing money. d. unless the increase in the seller's costs was not foreseeable at the time the contract was formed.

d. unless the increase in the seller's costs was not foreseeable at the time the contract was formed.

In making decisions for United Merchandising Company, Vance uses a cost-benefit analysis. This is part of a. duty-based ethics. b. Kantian ethics. c. the principle of rights. d. utilitarianism.

d. utilitarianism.

Baked Stuff Company agrees to supply Comida Café with all the corn chips that it re¬quires for a year. A sudden blight caused by an organism hitherto unknown in the United States results in a shortage of corn, and the price rises sharply. Baked Stuff asks Comida to pay a higher price for the chips. This request is a. invalid as an attempt at extortion or the so-called holdup game. b. invalid under the preexisting duty rule. c. valid as a risk ordinarily assumed in business. d. valid due to the unforeseen difficulty of the sudden price increase.

d. valid due to the unforeseen difficulty of the sudden price increase.

Grover contracts to sell two tracts of land to Hank. Both parties believe that the two tracts are adjacent, but in fact they are not. Grover is still willing to sell the land, but under these circumstances the deal would adversely affect Hank. Because of the parties' belief about the adjacency of the property, their contract is a. unavoidable. b. unconscionable. c. unenforceable. d. voidable.

d. voidable.

Dom, a salesperson for Excel Autos, promises Fern that a certain car will give her a "smooth ride." Dom offers a test drive, which Fern de¬clines. She buys the car but soon realizes that its suspension is in poor condi¬tion. Fern a. can rescind the contract on the ground of fraud. b. can rescind the contract on the ground of misrepresentation. c. can rescind the contract on the ground of mistake. d. was not defrauded.

d. was not defrauded.

Global Distribution Corporation suggests that its employees apply the "categorical imperative" to ethical issues that arise at work. This re¬quires that the employees a. categorize the issues according to legality, morality, and profitability. b. consider only the benefits that would accrue to them personally. c. look only at the result, regardless of the means to attain it. d. weigh the consequences that would follow if everyone acted the same.

d. weigh the consequences that would follow if everyone acted the same.

City Storage Company holds goods for Downtown Sales Corporation, which contracts to sell them to eStores, Inc. The goods are to be delivered without being moved and are represented by a negotiable bill of lading. The risk of loss passes to eStores a. if City refuses to honor the bill of lading. b. if Downtown gives the bill of lading to City. c. if the goods are lost due to an "act of God." d. when eStores receives the bill of lading.

d. when eStores receives the bill of lading.

Jane offers to sell Kyle three desks for his Lights & Lamps Company administrative office. Kyle sends a rejec¬tion first, then changes his mind and sends an acceptance. Whether they have a contract is determined by a. Kyle's rejection. b. Kyle's subjective intent. c. whatever Jane decides. d. whether Kyle's rejection or acceptance is received first.

d. whether Kyle's rejection or acceptance is received first.

Reaching for a bottle of soda from a display in a Bargain Mart store, Cody slips in a puddle of spilled soda and falls, suffering an injury. Bargain Mart's employees are not aware of the spilled soda until Cody falls. In a suit against Bargain Mart, Cody will most likely a. lose, because Bargain Mart's employees were not aware of the spill. b. lose, because Cody should have exercised more care. c. win, because Bargain Mart can recover from the soda bottler. d. win, because the spilled soda was foreseeable.

d. win, because the spilled soda was foreseeable.

A breach of contract occurs only when a party fails to perform all of his or her duties under a contract.

false

Describe: Lockouts

management prohibits workers from entering the premises, denying the employees work and a chance to earn a paycheck. (Most, but not all, lockouts are legal.)

Sal contracts with Tasty Pizza Company to deliver its products. Both parties change their minds, however, and inform each other that they would like to cancel the contract The next day, Sal changes her mind and again offers to deliver Tasty's products. Tasty is willing to deal, but for a new price. Sal and Tasty

may agree to a new contract that includes the new price

Collection of EZ Sales Company's debt to First Storage Corporation is barred by a statute of limitations. A new promise by EZ to pay the debt

may become enforceable if payments are made

A minor cannot avoid a contract to purchase a car if the:

minor is able to return the car but does not do so.

Toolmakers, Inc., contracts to sell its business to United Hardware Corporation. Before either party has performed, rescission of this contract requires

mutual agreement to rescind.

International Inventory, Inc., does business online. Contracts may be formed online for the purpose of

neither licensing nor sales of goods and services

Pacific Applications, Inc., and Quality Resale Company (QRC) enter into an oral contract for Pacific's sale to QRC of six used forklifts for $1,900 each. Before QRC takes possession of the items, this contract is enforceable by

neither party

Timber, Inc., and United Corporation enter into an oral contract for a sale of a lumber mill. Under the Statute of Frauds, before United takes possession, this contract is enforceable by

neither party

Describe: Agency Shops Clause

new hire must pay union fees but need not actually join the organization (prevents free-riders)

Allen applies for a police officer's job with Bay City, which responds with a letter setting an appointment for a psychological exam. The letter does not state that it is "a conditional employment offer." Based on the court's reasoning in Case 10.1, Ardito v. City of Providence, this letter is

no contract

First State Bank offers to lend money to Todd at 15 percent interest. Before Todd accepts, a stature is enacted prohibiting loans at interest rates greater than 12 percent. Todd and the bank have

no contract for a loan

A customer went into a store and saw a beautiful leather jacket bearing a price tag of $29. The customer handed the cashier a $50.00 bill and said, "I accept. We have a deal." The cashier then noticed the price tag and told the customer an error had been made and that the price was $229. In this case:

no contract was formed because the customer's offer was refused.

National Expeditions needs a tent for a mountain-climbing trip and orders one for $500 from Outdoor Supplies. National does not tell Outdoor about the trip, or that it must receive the tent by July 1 or it will lose $10,000. Outdoor ships the tent July 15. National can recover

nominal damages.

Boz runs an illegal gambling business and pays Colin, a law enforcement officer, not to interfere. The payments are discovered. Boz and Colin are sent to prison. With respect to the amount of the payments, Boz can recover

none of it

Kim sends an offer to Leo to cut down and remove a tree for $400. Kim says, "If you say nothing, I will consider you to have accepted my offer." If Leo does not respond, he will be deemed to

none of the choices (accept, counter, reject)

High-Tech Services, Inc., and Internet Investments Corporation enter into a contract that would otherwise be subject to the UETA but purports to "opt out." The UETA covers

none of the contract.

Ilsa and Jiffy Loan Company enter into an oral contract under which Ilsa agrees to pay Kyle's debt if he does not. Ilsa does not get any personal benefit for the agreement. This contract is enforceable by

none of the parties

Yvon asks Zack, "Do you want to buy one of my fishing rods?" This is

not a valid offer because the terms are not definite

Consumer Sales, Inc. (CSI), sends its catalogue to Dean and includes a "personalized" letter inviting him to buy any item in the catalogue at the advertised price. This is

not an offer

Neil represents himself as a contractor in Ohio, but he is not licensed in that state. A contract between Pam and Neil by which Neil agrees to build a warehouse for Pam in Ohio is

not enforceable

Jill promises to pay Kyle $500 because "he does not have as much money as other people." Jill's promise is

not enforceable because Kyle has not given consideration in return

Quick Transport, Inc., offers to sell a truckload of palettes to Rapid Delivery Company. Before accepting the offer, Rapid learns that the palettes have been sold to Speedy Trucking Corporation. Quick is

not liable, because the sale revoked the offer to Rapid

Quality Contractors contracts to build a warehouse for Retail Storage Company. Quality completely performs. Retail Storage is entitled to

nothing more.

nothing.

List the common claims used under Tort Law for Employment Security

o Defamation. o Intentional Infliction of Emotional Distress.

List and describe the common claims used under Contract Law for Job Security.

o Truth in Hiring - Oral promises made during the hiring process can be enforceable, even if not approved by the company's top executives. o Employee Handbooks - An employee handbook creates a contract o Covenant of Good Faith and Fair Dealing - prohibits one party to a contract from interfering with the other's right to benefit under the contract.

John says to Kris, "I would like to sell you my sports memorabilia collection." This is not an offer because it

only invites Kris to negotiate

Define: Collective Bargaining Unit

precisely defined group of employees who will be represented by a particular union (It is the union's exclusive right to bargain for the unit that gives the organization its power.)

The warranty of merchantability guarantees that the:

product is fit for its normal use at the time of the sale.

Hybrid rule making

publish proposal in Federal Register, informal public hearing and can submit comments/suggestions, publish final rule in Federal Register

Right of cover

purchasing,leasing other goods to substitute for those due under contract, available when seller repudiates contract/fails to deliver goods or buyer has rightfully rejected goods/revoked acceptance ( in good faith, without unreasonable delay), can recover damages after

State Trucking Company mails to Transport Delivery, Inc., an offer to sell a delivery truck and to hold the offer open for five days. The five-day period begins to run when the offer is

received

Reliance Damages

recovered if a non-breaching party incurs expenses in reasonable reliance upon the promise that the other party would perform., REGARDLESS of whether the breaching part or defent benefits from the non-breaching party's expenditures. Can choose over expectation damages, but then the damage award is mitigated by any losses that plaitniff would have suffered, if the K had been performed.

Ralph signs a covenant to to compete with his employer, Super Sales Company. A court decides that the covenant is overly restrictive. The court will most likely

reform its terms to prevent any undue burdens

A contract for a sale of land from Best Properties, Inc., to Commercial Investments Corporation contains an erroneous legal description. The most appropriate remedy for these parties is

reformation.

A contract for a sale of land from United Properties, Inc., to Commercial Investments Corporation contains an erroneous legal description. The most appropriate remedy for these parties is

reformation.

Alpha Commodities, Inc., agrees to deliver ten tons of sheet metal to Beta Builders Corporation. The agreement states that delivery to be within "3" days, although the parties intend "30" days. Alpha cannot convince Beta to amend the contract. Alpha should seek

reformation.

Which of the following can be consideration for a promise?

refraining from smoking cigarettes

A counteroffer is a(n):

rejection of the original offer

Local Delivery Service, Inc., offers to deliver computers to Micro Store's customers for a certain price. Local's intent to extend a serious offer to Micro is determined by reference to Local's

words and conduct.

Maria intentionally attempts to have Patty break a contract Patty has with Alfred. Maria will be liable under which theory of tort?

wrongful interference with a contract

Al hires Vincent to paint a portrait of his daughter. He inserts this condition precedent into the contract: "I will not pay unless completely satisfied." After the painting is done, Al thinks it is unflattering. Can he avoid payment?

yes, but only if he is dissatisfied in good faith

List the protections afforded by the ADA.

• An employer may not disqualify an employee or job applicant because of disability as long as she can, with reasonable accommodation, perform the essential functions of the job. • An employer may not ask about disabilities before making a job offer. • After a job offer has been made, an employer may require a medical test. • An employer may not discriminate against someone because of his relationship with a disabled person.

Describe: National Labor Relations Act of 1935 (NLRA)

• Created the National Labor Relations Board (NLRB) to enforce labor laws • Prohibits employers from penalizing workers who engage in union activity • Requires employers to "bargain in good faith" with unions. (created over distress by anti-union violence & the direction courts were heading in common law)

List the OSHA requirements.

• Employers must comply with specific health and safety standards. • Employers are under a general obligation to keep their workplace "free from recognized hazards that are causing or are likely to cause death or serious physical harm" • Must keep records of all workplace injuries and accidents. • The OSHA may inspect workplaces to ensure that they are safe.

Describe: National Labor Relations Act (NLRA)

• ensures the right of workers to form unions and encourages management and unions to bargain collectively and productively • establishment and maintenance of industrial peace, to preserve the flow of commerce. • established the National Labor Relations Board (NLRB) to administer and interpret the statute and to adjudicate labor cases.

List the allowed reasons a union may conduct a strike

• exert economic pressure on management, • to protest an unfair labor practice, or • to preserve work that the employer is considering sending elsewhere.

List limitations imposed on Union Shops Clause

• new members need not join the union for 30 days. • new members, after joining the union, can only be required to pay initiation fees and union dues. • If the new hire decides he does not want to participate in the union, the union may not compel him to do so, and management may not terminate him for his refusal.

Describe: Social Security

• pays benefits to workers who are retired, disabled, or temporarily unemployed and to the spouses and children of disabled or deceased workers. • provides medical insurance to the retired and disabled. • financed through a tax on wages that is paid by employers, employees, and the self-employed.

S and C Corporation (Dissolution)

•Can have perpetual existence or formed for a specific period of time. •Unless otherwise provided in the organizational documents, shareholders have the right to a pro-rata share of assets upon dissolution.

Purposes and Goals of Damages

•Compensatory: Compensates the nonbreaching party for the loss of the bargain of the deal and for the harm suffered as a result of the other party's wrongful act. •Fairness: Place the nonbreaching party in the position it would have been in if the K was fully performed. •Economic: Relieve the nonbreaching party for loss of profits (present or future). •Deterrence: Punish the breaching party with the goal of deterring future bad behavior of that party and others. •Predictability: Certain damages, such as liquidated damages or indemnification provisions, make the outlay and recovery of damages expectant for the parties

General Partnership (Formation and Restrictions)

•Created by express or implied agreement of the parties ("partners"). •Courts usually look for the following essential elements if a dispute on the existence of a partnership: (1) A sharing of profits and losses. (2) A joint ownership of the business. (3) An equal right to be involved in the management of the business. *Governing Documents: Partnership Agreement.

S Corporation ("S-Corp") (Formation and Restrictions)

•Formed in compliance with applicable state's statutory requirements, by filing an official document with the applicable state unit. •The traditional state unit is the Secretary of State. •S-Corp must be a U.S. corporation. •A legal "person" under state and federal law with rights, as with individual, to due process, equal protection, free speech, access to courts, and freedom from unreasonable search and seizure. However, has no 5th amendment right to remain silent. •Must make a timely S-corporation election with the IRS on Form 2553 done no more than two months and fifteen days after the beginning of the tax year in which the election is to take effect. *Governing Document: Certificate/Articles of Incorporation, Bylaws, and Shareholders Agreement (if shareholders and corporation enter into such).

Limited Partnership ("LP") (Formation and Restrictions)

•Formed under state law by filing an official document with the applicable state unit. •The traditional state unit is the Secretary of State. Created by express agreement to carry on business for a profit, with a Certificate of Limited Partnership filed with the applicable state agency. •At least one party must be a general partner and the others limited partners. *Governing Documents: Limited Partnership Agreement.

Limited Liability Company ("LLC") (Formation and Restrictions)

•Formed under state law by filing an official document with the applicable state unit. •The traditional state unit is the Secretary of State. •The typical official filing document is the Articles of Organization or Certificate of Organization. *Governing Documents: Limited Liability Company/Operating Agreement.

S and C Corporation (Liability)

•Limited liability of shareholders typically exists, meaning that shareholders normally are not personally liable for the debts of the corporation beyond the shareholders capital investment. •Tort liability exists meaning that the corporation is liable for the torts committed by its officers or agents within the course and scope of their employment (i.e. respondeat superior). •Criminal liability sometimes can be transferred from the employees/agents of the corporation to the corporation.

Limited Liability Company ("LLC") (Management)

•Members participate in management of the LLC via the operating agreement (also called limited liability company agreement or membership agreement). •Management can be Member-Managed or Manager-Managed, with a presumption for Member-Managed. If Manager-Managed, there can be a formal "Board of Managers." •Managers can (but need not to) designate officers to run the LLC's day-to-day operations.

C Corporation ("C-Corp") (Ownership Reqs)

Limited Liability Company ("LLC") (Ownership Reqs)

•Name must include "Limited Liability Company" or "LLC," as such denotes to the public the organization is a limited liability company. •Legal entity separate and distinct from its owners. •Can be a single member LLC, but most states require at least 2 owners. However, must have 2 or more members to be taxed as a partnership. •There is no restriction on the number of members. Thus, in addition to individuals, members may be corporations, LLCs, or partnerships. •Members may be residents of other countries. •Permissible to classify membership interests into different classes.

Purposes and Goals of ADR

•Reduce Parties' Cost: To reduce the cost of resolving disputes, as litigation is an expensive process. •Preserve Parties' Time: To expedite the resolution process since litigation is a time-consuming process. For example, it may take years for a case to be tried give case backlog in many courts. •Enable Taxpayer Savings: To reduce the caseload of traditional courts and thus the costs to the public of paying for certain expenses of the court system. •Give Parties' Flexibility: Given the various methods of resolving disputes and their processes, flexibility exists for the disputing parties in resolving disputes. •Preserve Relationships: With litigation, the goal/environment is win/lose, "doing battle," and emphasizing how the parties' positions differ. With ADR, the goal is win/win, a mutual satisfactory resolution, trying to preserve the relationship, and emphasizing the common ground of the parties

S and C Corporation

•Shareholders elect directors, who set policy/strategy for the management of the S/C-Corp and hire officers. •The board of directors may designate certain of its decision making to committees. •Officers run the day-to-day business of the S/C-Corp. •Certain major decisions need shareholder approval (e.g. amendment of bylaws or article/certificate of incorporation; merger; sale of all or substantially all of assets - "Big Ticket Items")

General Partnership (Management)

•Unless otherwise agreed, the partners have equal management rights. •Decisions that significantly affect the nature of the partnership or that are not for ordinary course of business require unanimous consent (e.g. admission of new partners, amendment of articles of partnership or partnership agreement, engage in a new business, or undertake an act that would make conduct of the partnership impossible).

Limited Liability Company ("LLC") (Dissolution)

•Unless otherwise provided in the organizational documents or a single-member LLC, perpetual existence exists •Members have a right to their share of assets upon dissolution based upon their LLC capital accounts

Increasing Minority Shareholders Voting Power

►Cumulative Voting: A voting method that improves minority SHs' chances of naming representatives to the board. As opposed to in regular or statutory voting, where shareholders apportion their votes equally among director candidates (one vote per candidate), cumulative voting allows SHs to cast all their votes for one candidate. ►Shareholder Voting Agreement (aka "Pooling Agreement"): An agreement in which two or more SHs agree to vote together as a unit on certain or all matters subject to SH vote. -"Specific SH Voting" Agreement: Resolution in the agreement on how the SHs will vote. Example: SH1 and SH2, each owners 30% of XYZ Corp. which has three shareholders, sign a SH voting agreement in which SH1 and SH2 each agree to vote for each other as directors for so long as the SH voting agreement lasts. -"Agreement-to-Agree" SH Voting Agreement: Parties merely commit to vote together without specifying which way to vote as the parties will agree to such in the future. Example: SH1 and SH2, each own 30% of XYZ Corp. which has three shareholders, sign a SH voting agreement in which SH1 and SH2 each promises that as to any matter on which a SH vote is required to confer with each other and vote together as a unit. ►Voting Trust: Pursuant to a voting trust, the SHs trying to increase their minority interest power create a voting trust. Such SHs transfer the legal title to their shares to the voting trust, and pursuant to the voting trust agreement, the trust votes the transferred shares.Beneficial ownership - stays with the transferring SH. Voting Rights - transfer to the Voting Trust. ►Concentrated Voting Through Proxies

Responsibilities / Liabilities of Shareholders

►Duty: Shareholders have a duty to act in the best interests of the corporation and the shareholders as a whole. ►Stock Subscription Completion: Stock subscriptions are written irrevocable contracts of the shareholder to purchase capital stock of the corporation prior to the corporation's incorporation, and a failure to sell or buy the subscribed shares is a breach of contract. ►Watered Stock: When a corporation issues shares to a shareholder for less than the FMV of the shares, the shares are "watered stock," and the shareholder is liable to the corporation for the difference between the FMV and the lesser amount paid for the stock. ►Illegal Dividends: If the shareholders knew of the illegal nature of the dividend payment, the shareholders must return the dividend. ►Piercing of Corporate Veil

Shareholder Rights (Generally)

►Generally no management rights. ►Approval of "Big Ticket Items" (i.e. fundamental / functional changes to the corporation - amendments to articles of incorporation and certain bylaw provisions; approval of mergers and acquisitions and dissolution). These changes often are subject first to director approval and recommendation to the shareholders. ►Elect and remove directors. ►May enter into a shareholders' agreement. ►Shareholder meetings must occur at least annually, unless otherwise provided for. A quorum must be present at shareholder meetings. In lieu of certain meetings, shareholder written consent generally is acceptable (but usually with unanimous written consent). Special meetings require notice, indicating the time, place and the reason for the meeting, which meeting can only deal with that matter. ►Typically, common shareholders are entitled to one vote per share and preferred shareholders typically have no voting rights. The governing document(s) will specify the voting rights. ►Typically, shareholder approval is majority approval, but "Big Ticket Items" may require supermajority approval/consent. ►Receive dividends (if applicable). ►Inspect corporate records. ►Transfer sharers subject to exceptions. ►Receive a proportionate share of corporate assets upon dissolution.

Types of ADR

►Negotiation: Negotiation is the simplest and least expensive form of ADR. It is where the parties come together, with or without their attorneys and try to reach a settlement without the involvement of a third party. As the attorneys are advocates for their clients, they must put their clients' interests first in the negotiation process. ►Mediation: Mediation is a form of ADR in which the parties select a neutral third party, the mediator, who helps the parties try to facilitate a resolution to the matter. The mediator lacks the power to resolve the matter for the parties, but may provide suggestions for resolution. In most cases, the mediation decision is final and non-appealable. ►Arbitration: The form of ADR where a neutral third party expert or a panel of experts ("arbitrator" or "arbitrators") hear a dispute and imposes an often binding resolution on the parties.

Contracts Requiring a Writing (MYLEG)

►Promise made in consideration of marriage ►Agreements that cannot by their terms be performed within one year from the date after the date of formation ►Agreements for an interest in land ►Promise made by an executor of an estate to pay debt personally (or promise to answer the debt of another) (e.g. executor or surety contracts) ►Agreements for the sale of goods at $500 (some states $5,000) or more - U.C.C

Securities Exchange Act of 1934 ("34 Act")

►Purpose: Continuous disclosures law - Requires periodic information disclosure to investors by publicly traded companies with $10 million in assets and 500 or more shareholders. Also applies to brokers and dealers. ►Functions: (1) Provides authority over proxy solicitation and registration of organized securities exchanges. (2) Sets disclosure requirements for securities in the secondary market. (3) Regulates insider trading. ►Violations of the 34 Act - Section 10(b) and Rule 10b-5: Such violation provides for criminal penalties and civil sanctions. ◘Section 10(b) - The violator had scienter, meaning the intent to defraud by using false statements or wrongfully failing to disclose material facts.

Securities Act of 1933 ("33 Act")

►Purpose: One-time disclosure law - Requires full disclosure regarding material information in security sales and transfers. ►Functions: (1) Regulates solicitation and buying and selling of securities. (2) Designed to prohibit fraud and stabilize the securities industry. ►Violations of the 33 Act: Such violation provides for criminal penalties and civil sanctions. ◘Intentional or negligent defrauding of investors by misrepresenting or omitting material information in the registration statement or prospectus. Defenses: *The statement omitted was not material. *Plaintiff knew about the misrepresentation and purchased the stock anyway. *Registrant believed the statements were true. ◘Selling securities before the effective date of the registration statement or under an exemption for which the securities do not quality.

Reasons that Court may Pierce the Corporate Veil

►The court concludes that the shareholder(s) used the corporation as a "shield" for illegal activity. ►Statutory formalities of the corporation structure are not followed. ►Corporation was not set up to make a profit, remains insolvent, or is under capitalized. ►The corporation serves as the "alter ego" of the majority shareholder and personal and corporate interests are commingled such that the corporation has no separate identity. ►With respect to shareholder and other insider loans, arms-length loans are not made. Courts carefully scrutinize "insider loans"/"interested party" loans.

Exempt Securities and Exempt Transactions (Generally) of Securities Registration

◘Importance: Enables an issuer to avoid the time, complicated procedures, and high costs associated with registering securities. ◘Exempt Securities: Certain types of securities exempt from SEC registration. Example: Government issued securities; bank and financial institution securities, which are regulated by banking authorities; short-term notes and drafts such as negotiable instruments with a maturity date 9 months or less; securities of nonprofit, education, and charitable organizations; securities issued by common carriers (railroads and trucking companies); an insurance, endowment, or annuity contract issued by a state-regulated insurance company; securities issued in a corporate reorganization in which one security is exchanged for another or in a bankruptcy proceeding; securities issued in stock dividends and stock splits. ◘Exempt Transactions: Certain types of securities transaction offerings exempt from SEC registration subject to certain notifications and other requirements.

Registration Process (Generally) of Securities Registration

◘Pre-filing period: Securities cannot be offered or sold. ◘Filing of Registration Statement with SEC. ◘Waiting Period: Because the Registration Statement must be approved by the SEC, securities can be offered but not sold. All issuers can distribute a red herring prospectus, advertise with a tombstone ad, and a free-writing prospectus. -Red herring prospectus: The prospectus that is given to potential investors in a new security issue before the selling price has been set and before the issuer's registration statement has been approved by the SEC for accuracy and completeness. Name comes from the statement in red that says "the issue has not yet been approved by the SEC." -Tombstone ad: An advertisement for a securities issue, which lists the security with some specificity and a list of members of the syndicate selling the issue. ◘Post-effective Period: Issuer must provide a final prospectus (or link to download) to the parties that received a preliminary or free-writing prospectus. Securities can now be sold. ◘Registration Process Relaxation: In 2005, the SEC revised the registration process to relax it and create new categories of issuers to assist Well-Known Seasoned Issuers. Well-Known Seasoned Issuers have issued $1 billion in securities during the last 3 years or have $700 million outstanding stock with the public.

Nancy, as an employee of quick change inc, promises to change the oil in owens car. A party who makes its promises is?

a promisor

The remedy of reformation ?

can be used to correct mistakes in the orignal contract

Sam, the seller, enters into a contract agreement to buy bettys house on the condition that hes able to secure financing at or below 9% per yr. This is a ?

condition precent

In a "mixed contract" one involving a sale of both goods and services, the court will?

first determine the dominant prupose of the contract. If the sale of goods dominates,t he court will apply the law of UCC article 2. If service dominates the contract, court will apply common law.

Mary assets that any contract she entered into with niki is unenforceable. Defenses to the enforcement of a contract include?

improper form and the lack of a partys genuine assent

Kate begins to perform, intending that the coompletion of her performance act as an acceptance of kyles offer. Under the modern-day view, an offer that can only be accepted by completion of a specific act can?

not be revoked once performance has substanitally begun

Harry agreed to pay 100 to rent a rooftop for NYE. THe festitvitie were cancelled due to a terrorist threat, Harry is?

not onligated to pay under the frustation of purpose doctrine

Ron, an architect, sells to jan, an apartment he hasnt lived in in years. After jan moves in, she discovers a number of his painting in the closest which she considers to be valuable. Ron files a lawsuit to get the paintings. ROn should

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