business test 2

Smith & Jones, Accountants, is a limited liability partnership (LLP). The major features of an LLP are that it limits the personal liability of the partners and​

. ​it allows the partnership to continue as a pass-through tax entity.

Nevin negotiates a deal for the sale of twenty-five acres of farmland to Otis. Nevin promises to hold the offer open for thirty days in return for a small payment.This is an example of

an option contract.

Zeke files a petition for bankruptcy under Chapter 13. Zeke's Chapter 13 plan must provide for​

he turnover of his future income to the trustee.

Rita and Susan want to form and do business as Trips & Travel, Inc. They will serve as the firm's directors and officers, and will initially hold all of the stock in the company. Rita and Susan own the corporation because they are

the shareholders.

Security Insurance, Inc., has a board of five directors. Security's bylaws do not state any quorum requirements. In most states, a quorum for Security's board meetings would be

three directors.

Gene, an accountant, convinces his client Hazel to sign a contract to invest her savings in 2Gether, a nonexistent social-networking Web site. There is clear and convincing evidence that Hazel did not act out of her free will. This is​

undue influence.

Pay-Mor Convenience Stores, Inc., is a franchisor. Randy operates a Pay-Mor franchise. Sam is one of Randy's employees. As a franchisor, if Pay-Mor controls the day-to-day operations of the business to a significant degree, it may be liable for tortious acts by​

​Pay-Mor, Randy, or Sam.

Refined Grains, Inc., agrees to sell to Sunny Cereal Company a certain quantity of refined oats each week but no mention is made of where the goods are to be delivered. In general, the UCC requires that the delivery take place at​

​Refined's place of business.

Roma and Swain are partners in Roma & Swain Attorneys, LLP, a limited liability partnership. Roma supervises their firm's associate Taylor, who negligently fails to appear in court on behalf of Umberto, a client. Liability to Umberto rests only with​

​Roma and Taylor.

Riverside, a general partnership, operates a bait-and-tackle shop. Riverside has five partners. Steve has a one-third interest in the partnership. Each of the other partners has a one-sixth interest. With respect to management decisions​

​a majority of the partners must agree.

Spicy Pizza, Inc., files for bankruptcy under Chapter 11. Spicy's reorganization plan must contain​

​a provision of adequate means for the plan's execution.

Play-It-Loud, LLC, provides music-streaming services online subject to complex pricing schedules. To control specific offers for the services and thus the resulting contracts, important terms to provide online include​

​a provision relating to the resolution of any dispute.

Vince buys 500 shares of common stock in Water Services, Inc. As a shareholder of record, Vince owns a proportionate interest with regard to Water's​

​all of the choices.

On behalf of the jazz group Fusion, their manager Greg agrees to a performance in Hillside Amphitheatre on July 4. Hillside sends a written copy of the agreement to Greg to be signed. If Greg signs the copy, the parties will have​

​an express contract.

Nina, the owner of Organic Farm, a sole proprietorship, wants to obtain additional capital to operate. This can be accomplished by​

​any of the choices.

Otto is considering forms of business organization for Pro Tree Service, his landscaping firm. Like most states, Otto's state requires that to form a limited liability company, he must file with a central state agency​

​articles of organization

​Jason and Kelly enter into a contract for Jason to renovate Kelly's house by a certain date. Jason never performs. After the applicable limitations period has passed, Kelly decides to bring a suit against Jason for breach. This suit

​can no longer be brought.

Amy and Bob enter into a contract for Bob to perform waste management services for Amy's commercial properties. Later, Bob alters a material term—increases the price—without Amy's knowledge or consent. Amy​

​can treat the contract as discharged.

Berry enters into a contract with Clyde for a guided tour of Deep Canyon. Clyde represents that he is an experienced, knowledgeable guide, when in reality he has never been in the canyon. Berry is most likely a victim of​

​fraud.

Building Restoration, Inc. (BRI), enters into a contract to refurbish an old train depot for Casual Dining, Inc., to open as Eat Up Restaurant. If BRI completes most of the work promised in the contract, its performance will be​

. ​substantial.

South Carolina enacts a statute to ban advertising in "bad taste." This statute would likely be held by a court to be​

.​an unconstitutional restriction of speech.

Nora and Owen do business as Profit & Property, a real estate investment partnership. In acting on the firm's behalf in a deal with Village Mall, Nora takes advantage of an opportunity to make a secret profit on her own behalf. To her firm, Nora is liable for​

.​breach of the duty of loyalty

Start-Ups, LLC, is a limited liability company without a written operating agreement. Among the members, a dispute arises concerning the division of profits. Under most LLC statutes, the profits will be​

.​divided equally among the members.

A contract between Rides & Games, Inc., and State Fair Corporation includes a provision excluding liability as a result of fraud. This provision is​

.​not enforceable.

A contract for a sale of land from Bayside Properties, Inc., to City Development Corporation contains an erroneous legal description. The most appropriate remedy for these parties is​

.​reformation.

Soup Factory, Inc., uses a Web site to provide downloadable information to prospective franchisees. This electronic information is the equivalent of an offer that must comply with​

.​the Federal Trade Commission's Franchise Rule.

Cow's Milk Creamery, Inc., needs a certain part for its pasteurizing equipment to continue its operations and orders one for $3,000 from Dairy Supplies Company. Cow's Milk tells Dairy Supplies that it must receive the part by Tuesday or it will lose $10,000. Dairy Supplies ships the part late. Cow's Milk can recover​

10,000.

To adjust debt and institute a repayment plan, Don, a family fisherman in the Pacific Ocean off the coast of Alaska, may file a petition in bankruptcy for relief under the Bankruptcy Code's Chapter​

12

Robin's home is in a state that has a $30,000 homestead exemption. Robin defaults on a $60,000 debt that she owes to Suburban Mortgage Company. Robin's home is sold at auction for $80,000. From the proceeds, Suburban may recover​

50000

Car Lot's salesperson Dick offers to sell Ernie, who is twenty years old, a car. Dick intentionally misrepresents the vehicle's use and repairs. In reliance, Ernie buys the car. To prove fraud, Ernie does not have to show that​

Ernie is under twenty-one.

Roofing Company buys asphalt tiles from Shingles, Inc. The parties agree that the tile will be shipped "F.O.B. Shingles warehouse" to Roofing's location via Shipping Corporation. The tiles are lost in transit. The loss is suffered by​

Roofing Company.

Quest Outdoor Store orders RiverRun-brand kayaks from Sports Merchandise, Inc. Sports Merchandise mistakenly ships kayaks of the wrong size, which Quest rejects and returns via Trans-State Shipping Company. During the return, the kayaks are lost. The loss is suffered by

Sports Merchandise.

Suisse Internationale, a Swiss maker of athletic equipment, enters into a price fixing agreement with Team Sports, a U.S. wholesaler of Suisse's products. U.S. courts will apply U.S. antitrust laws if

The price fixing has a substantial effect on U.S. commerce.

Sean is the incorporator of Twisty Pretzels Corporation. Ross is a shareholder, Phyllis is a director, and Velma is an officer. The day-to-day operations of Twisty are overseen by​

Velma.

Talk, Inc., offers to buy from Ultra Corporation 1,000 phones. Without notifying Talk, Ultra timely ships phones of a different quality. With respect to the offer and a possible contract, this shipment is an acceptance and​

a breach.

Wings2Go Corporation fails to hold an organizational meeting. In this circumstance, Wings2Go is most likely​

a de facto corporation.

Copper Circuit, Inc., and Direct Electric LLC 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 liquidated damages clause.

Troy files a petition for bankruptcy. Troy must include with the petition

a list of creditors and the amount of the debt owed to each

To adjust debt and institute a repayment plan, Diana—who is not a corporation, a partnership, or a family farmer or fisherman—may file a petition in bankruptcy for relief through​

a repayment plan.

The United States taxes each barrel of imported oil at a flat rate. This is

a tariff

Ron offers to pay Sara to pick up and deliver certain business documents within thirty minutes. Sara can accept the offer only by completing the task within the deadline. If she does, Ron and Sara will have​

a unilateral contarct

Revenue & Sales Corporation and Software, Inc., enter into a contract for the design of custom software for which Revenue & Sales agrees to pay $64,500. Software transfers the right to payment under the contract to CreditLine LLC. This transfer is​

an assignments

Under the commerce clause, Congress has the power to regulate

any commercial activity in the United States that substantially affects interstate commerce.

Nell is considering forms of business organization for Optic Center, a medical eye clinic. An advantage of a limited liability partnership is that, depending on the applicable state statute, partners can avoid personal liability for

any partnership obligation.

​Ann offers to buy Beth's land only if an appraiser estimates that its current value is more than a certain price. Later, the appraiser deems the worth of the land to be less than Beth's price. Ann and Beth's obligations

are discharged

Techno Talent, Inc., is a corporation. Techno Talent's implied powers enable it to

borrow funds and lend funds.

World Media, Inc., a U.S. firm, expands into international markets through a joint venture. In the venture, World Media shares responsibilities and

both the profits and liabilities.

Home Construction LLC enters into a contract with Irene to build a house. Before Home starts to work, the market price for its services increases—in effect, Home will lose money if it fulfills its contract with Irene. Home notifies her that it will not perform. Home's obligation to perform is

breached.

While sailboarding, Jolene is injured when Kirby carelessly crosses her path. Kirby's insurance company offers Jolene $50,000 to release Kirby from liability, and she accepts. Later, Jolene learns that her injuries are more serious than she realized. The release is​

enforceable

Rico borrows $110,000 from Sterling Bank to buy a home. If he fails to make payments on the mortgage, the bank has the right to repossess and auction off the property securing the loan. This is​

foreclosure

The Outer Space Treaty expresses general principles for space exploration. One principle NOT included in the Outer Space Treaty is

it declares exclusive international jurisdiction over space objects and the personnel on them

The 1980 United Nations Convention on Contracts for the International Sale of Goods (CISG) has been adopted by eighty-four countries, including the United States and China. Glide Ride Inc. in the U.S. and Hangzhou Bikes Ltd. in China enter into a contract for a sale of bicycle parts. A dispute arises that leads to a conflict between the CISG and the UCC. In this situation, the CISG applies because

it is a treaty of the U.S. national government

Tax Accounting, LLC, is a member-managed limited liability company. If the law in Tax Accounting's state is like the law in most states, unless the members have agreed otherwise, decisions are made according to

majority vote.

Isaac holds one ton of perishable fruit in storage for Juice Smoothies Corporation. Juice Smoothies does not pay for the storage. Isaac sells the fruit to Kayo Beverage Company. This sale represents​

mitigation of damages.

In selling 300 acres of rural land to Organic Farms, Peyton tells the buyer that the land "will be worth twice as much by next year." This is

opinion

Nick and Orlando are limited partners in Port City Exports, a limited partnership. To avoid personal liability for the firm's obligations, they must not​

participate in the firm's management.

Don enters into a contract with Eve, who claims to have access to a stock-trading algorithm that will multiply an investment many times over. When the results do not match this promise, Don learns that Eve does not have access to any unique software and files a suit, alleging fraud. Proof of an injury is required to​

recover damages.

Rafi offers a tour of Bay Harbor aboard his sailboat, Sea Siren, to Tiara's Travel Group for $500. Referring to the prices for similar tours, Tiara's says, "We'll pay no more than $400." Rafi's offer is

rejected and subject to a counteroffer.

Swift Trucking, Inc., and Trailer Rents Corporation are parties to an oral agreement for a one-year lease of six doublewides with payments totaling more than $40,000. They may satisfy the Statute of Frauds by​

setting out the terms in a memo.

A rule promulgated by the Environmental Protection Agency (EPA) limits the amount of carbon that can be emitted from a car's exhaust system. New York has a state law that allows for much higher emissions. In this situation, under the supremacy clause:

the EPA's decision takes precedence.

Roy, a director of Service & Sales Corporation, does not attend a board meeting for three years. During that time, Terry, the firm's president, makes improper loans that cost the company $10 million. Roy is most likely liable for breach of

the duty to exercise reasonable supervision

Brad, a citizen of California, obtains a federal license to operate a commercial fishing boat in a certain area off the coast. The California state legislature enacts a law that bans all commercial fishing in that area. The state law most likely violates

the equal protection clause.

Spicy Sauces, Inc., and Tom's Bottling Plant have a manufacturing franchise arrangement. This involves the transfer of​

the formula to make a certain product.

Telfonix Corporation, a U.S. firm, and Adex, Inc., a British firm, are parties to a contract with an arbitration clause, a forum selection clause, and a choice-of-law clause. If a dispute arises under the agreement,

the parties will first submit to arbitration before any lawsuit can be filed.

TackMaker, Inc., and Silver Stallion Stables enter into a contract for a sale of bridles, saddlery, and other equine equipment. TackMaker delivers, but Silver does not pay. TackMaker can normally recover as damages​

the purchase price plus incidental damages.

River Gear Company and Scenic Trips, Inc., enter into a contract on August 1 for the sale of fifty inflatable river rafts. Scenic cancels the contract ten days later, before the goods have been delivered . River Gear's available remedies include all of the following except

the right to resell or dispose of the goods.

Guido and Hal want to rescind their contract under which Guido sold Hal a mountain bike for $100. To rescind the contract​

​Guido must return the $100 and Hal must return the bike

Without creating a separate business organization, Roy starts up Sole Savers, a new, pre-owned auto sales enterprise. Roy is​

​a sole proprietor.

Real Gear Corporation enters into a contract to sell ski equipment to Sno-Sports Inc., which sells a pair of the skis to Tyra, a consumer, who later sells them to Upton, another consumer. Article 2 of the UCC applies to the sales transactions between​

​all of the buyers and sellers.

The basis for India to give effect to the laws and court decisions of the United States is primarily

​courtesy and respect.

Rollo is a member of Smooth Operators LLC, a limousine service. Rollo's relationship to Smooth Operators ends, but the firm continues to do business. This is​

​dissociation.

Western Rodeo LLC is a limited liability company (LLC). Like other LLCs, for federal jurisdictional purposes, Western Rodeo is most likely a citizen of​

​every state of which its members are citizens.

​Kali contracts to sell Leony her car for $3,000. This contract will be fully discharged when Kali and Leony

​exchange the car for the $3,000.

Sheila is a shareholder of Travels & Trips Inc. She has the right to inspect corporate books and records​

​for a proper purpose.

Alan induces Beth to enter into a contract for the purchase of a Chef's Burger House restaurant. Alan knowingly misrepresents a number of material features about the restaurant and the business. When Beth discovers the truth, she can rescind the contract on the basis of​

​fraud.

Rob's creditors try to force him into involuntary bankruptcy. The creditors will be unsuccessful if Rob​

​is a farmer.

Orin signs a covenant not to compete with his employer, Product Distribution, Inc. The covenant will be enforced if it​

​is reasonable with respect to geographic area and duration.

Star Flights Inc. launches exploratory and commercial space flights from its base in the United States. In the event of a collision with other space objects, under the Outer Space Treaty, liability for injury or damage

​is subject to a determination of fault.

Juan and Isidro enter into a contract to buy, restore and reopen the Coastal Park Carousel. Before either party begins to perform, they agree to cancel their deal. This is​

​mutual rescission.

Teri files a petition for bankruptcy. Her creditors must file with the court their proof of claims against her assets within​

​ninety days of the creditors' meeting.

Dry Gulch Farms hires Elliot to repair its irrigation system on site on a certain date for $2,500, but Elliot does not show up as agreed. Dry Gulch hires Fernando to do the job for $2,000. Dry Gulch may recover from Elliot​

​nominal damages.

Quisa and Reilly are partners in Sport Bikes, which rents and sells bikes, bike accessories, and related gear. Quisa manages the business. Unless the partnership agreement states otherwise, Quisa is​

​not entitled to compensation.

Carlos and David contract for the sale of five hundred head of Carlos's cattle for $95 per head. Unknown to either party, an unforeseen storm has struck the herd and many of the cattle have died. David is​

​not required to pay due to the bilateral mistake.

​Quinn contracts to provide ten tons of scrap steel at $500 per ton to Rendered Materials, Inc. An unforeseen shortage of scrap steel suddenly develops, making it impossible for Quinn to fulfill the contract for less than $5,000 per ton. Quinn's best defense against performing the contract would be that

​performance of the contract is commercially impracticable.

Rosa is a partner in Silver Dragon, a partnership consisting of the owners of a restaurant. Silver Dragon incurs debt for new dining tables and chairs. With respect to this debt, Rosa is

​personally liable to the full extent.

Thirty-one days before filing a petition in bankruptcy, Gavin transfers property and makes payments that favor one creditor over another. These are​

​preferences.

​Global Enterprise enters into a contract with HealthCare Insurance to obtain insurance for Global employees. HealthCare breaches the contract and Global is awarded compensatory damages. The purpose is to

​provide Global with funds for its loss of the bargain.

Nina is a director of Outback Outfitters, Inc. Under the standard of due care owed by directors of a corporation, Nina's decisions must be informed and​

​reasonable.

Rob promises to pay Sara, his niece, $5,000 if she obtains her degree at Tech University, where she is in her third year. Sara graduates. Rob is​

​required to pay because Sara obtained a degree at Tech.

Venezuela seizes the assets of World Oil, Inc., a U.S. firm. World Oil's recovery from Venezuela in a U.S. court may be prevented by

​the act of state doctrine.

Phone Apps, LLC, is a limited liability company. Among its members, a dispute arises that the operating agreement does not cover. The dispute is governed by​

​the applicable state LLC statute.

Contractors LLC agrees to build a store for Discount Retail, Inc., at a specific location. Before construction begins, the local zoning law is changed to prohibit commercial buildings at that location. In this situation​

​the contract is discharged.

Tropic Foods Corporation, a U.S. firm, owns property in Ecuador. When the Ecuadoran government seizes the property, Tropic Foods asks a U.S. court to order the property's return. The court rules that Ecuador is exempt from the court's jurisdiction. This is

​the doctrine of sovereign immunity.

The board of Management Consultants, Inc., can delegate some of its responsibilities to​

​the firm's officers.

​Tile & Grout (T&G) contracts to resurface the insides of the pools at Water Park. T&G knows that without the resurfacing, Water Park will have to delay its seasonal opening. T&G does not perform as promised. As consequential damages, Water Park can recover

​the loss of profit from the delayed opening.

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 covers​

​the sale of the furnishings priced at $500 or more.

World Sports Corporation is a U.S. firm with a facility in Spain. Generally, World Sports must abide by U.S. anti-discrimination laws in Spain

​unless to do so would violate the law of Spain.

The police obtain a search warrant and search Jordan's apartment. After yelling obscenities at the officers, Jordan confesses to a crime and implicates his friends. The Constitution protects against​

​unreasonable searches.

Oceans Inc., a seafood distributor, agrees to buy from Paul, a commercial fisherman, any "overstock" of fish that Paul catches in excess of his legal limit. This agreement is most likely​

​void.

Stefani and Tyler agree in an exchange of e-mail to form a partnership to buy and sell real property. Their partnership agreement is legally binding​

​without more.