Exam 2 HomeWork Questions _ BADM
Dim threatens physical harm to force Ed to sell his business, Flowers, Inc., to Dim for a below-market price. This is: a. fraud. b. duress. c. undue influence. d. mistake.
B) duress
Without creating a separate business organization, Roy starts up Sole Savers, a new, pre-owned auto sales enterprise. Roy is: a. a franchisee. b. none of the choices. c. a franchisor. d. a sole proprietor.
d. a sole proprietor.
Laura owns and operates Meditation Center without creating a separate business organization. She receives all the profits from the fees for the classes and the sales of the center's merchandise. This is most likely: a. a partnership. b. none of the choices. c. a franchise. d. a sole proprietorship.
d. a sole proprietorship.
Paradise Footwear buys a franchise from Quad Shoes Inc . This relationship, like all other franchise relationships, is governed by: a. the Franchise Disclosure Document, or FDD. b. the Automobile Dealers' Day in Court Act. c. no law. d. contract law.
d. contract law.
Gwen and Hugo do business as Gwen & Hugo Civil Engineers, a partnership. This firm is governed by the Uniform Partnership Act: a. in the absence of an implied agreement. b. only under an express agreement. c. under all circumstances. d. in the absence of an express agreement.
d. in the absence of an express agreement.
Ross 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. Ross is: a. required to pay because a job can be hard to find after college. b. not required to pay because Sara was already at Tech. c. not required to pay because obtaining a degree benefits Sara. d. required to pay because Sara obtained a degree at Tech.
d. required to pay because Sara obtained a degree at Tech.
Moe threatens physical harm to force Norel to contract to pay him for protecting her store against vandalism and destruction. Norel may: a. recover from the local police for their failure to protect her store. b. do nothing once she has agreed to pay. c. recover from her insurer for the cost. d. rescind the contract or refuse to comply with its terms.
d. rescind the contract or refuse to comply with its terms.
Carly pledges to donate $10,000 to Disaster Recovery Inc. (DRI). On the basis of the pledge, DRI orders additional supplies. If Carly does not fulfill the pledge, a court may enforce it: a. under the preexisting duty rule. b. on the basis of unforeseen difficulties. c. as an illusory promise. d. under the doctrine of promissory estoppel.
d. under the doctrine of promissory estoppel.
Colin, Demi, and Erin agree to be partners in Fajita Pizza, splitting the profits equally. Colin contributes 65 percent of the capital. When Fajita Pizza is dissolved, its liabilities are greater than its assets. In the absence of a contrary agreement, the losses are paid by: a. Colin because he contributed most of the capital. b. all of the partners in proportion to their shares of the profits. c. all of the partners in proportion to their capital contributions. d. Demi and Erin because they contributed the least of the capital.
b. all of the partners in proportion to their shares of the profits.
Ken owns and operates Living Earth Garden Shop as a sole proprietorship. When Ken dies, Living Earth will automatically: a. pass to Ken's heirs. b. dissolve. c. be offered for sale to its creditors and competitors. d. pass to the state.
b. dissolve
Omni Insurance Company violates a state licensing statute when selling a policy to Petra, in whose state Omni is not licensed to sell insurance. As a member of the class of persons protected by the statute, Petra can: a. do nothing with respect to the policy. b. enforce the policy and recover from the insurer. c. only enforce the policy. d. only recover from the insurer.
b. enforce the policy and recover from the insurer.
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: A) opinion B) adhesion C) fraud D) mistake
A) opinion
Khan offers to buy Lonnie's 1967 Mustang only if an appraiser estimates that it can be restored for less than a certain price. This requirement is: a. a condition precedent. b. a condition subsequent. c. an implied condition. d. a concurrent condition.
A) A condition precedent
Digital Enterprise, Inc., promises to pay its employees a year-end bonus "if profits continue to be high and management agrees at the time." This is: a. an illusory promise. b. an option-to-cancel clause. c. an enforceable contract. d. an output contract.
A) an illusory promise
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: a. an option contract. b. an invitation to negotiate. c. the mirror image rule. d. an agreement to agree.
A) an option contract
Laredo advertises a reward for the return of his lost dog. Miguel, who does not know of the reward, finds and returns the dog, without asking for the reward. Miguel cannot recover the reward, because he: a. did not know of the reward when he returned the dog. b. returned the dog. c. did not ask for the reward when he returned the dog. d. did not confer a benefit on Laredo by returning the dog.
A) did not know of the reward when he returned the dog.
Dennis sells a motorcycle to Elton without disclosing that the odometer, which reads 10,000 miles, was disconnected 100,000 miles ago. Dennis is most likely liable for: a. fraud. b. mistake. c. none of the choices. d. undue influence.
A) fraud
Kent buys Lizzie's house for $100,000, which is the fair market value of the house. If the contract is later disputed in court, the court is likely to declare Kent's: a. legally sufficient. b. illusory. c. past. d. inadequate.
A) legally sufficient
Fabien offers to sell his Graphic Signs, LLC, business to Hanna for $100,000. Hanna replies, "The price is too high. I will buy it for $75,000." Hanna has: a. rejected the offer and made a counteroffer. b. rejected the offer without making a counteroffer. c. accepted the offer. d. made a counteroffer without rejecting the offer.
A) rejected the offer and made a counteroffer
At an auction, Benny bids on a 1957 Chevy coupe, believing that it is worth more than the price asked. When the car proves to need more repairs than Benny estimated, and thus is worth less as is, Benny is: a. still liable on the bid. b. not liable on the bid because an auction is not subject to contract law. c. not liable on the bid because the auctioneer misrepresented the value. d. not liable on the bid because he underestimated the cost of repairs.
A) still liable on the bid
Francisca and Garden Estate, Inc., enter into a contract for the use of a Victorian mansion and its grounds for a wedding and reception. If ambiguities appear in the contract, they will be construed against the party who: a. drafted the contract. b. offers the most confusing explanation of the terms. c. made the offer to contract. d. has the greater bargaining power.
A) drafted the contract.
Gliding Light, LLC, and Hang Gliders, Inc., are parties to a contract. They subsequently agree that High Riders Inc. should take Gliding Light's place and assume all of its rights and duties under the contract. This is: a. an accord and satisfaction. b. a novation. c. a mutual agreement to rescind. d. a settlement agreement.
B) A novation
Excavate n' Fill, Inc., enters into a contract with Fred to fill and landscape an abandoned quarry on Fred's land. Fred advances Excavate n' Fill 10 percent of its cost. The parties rescind the contract. Excavate n' Fill's refund of the payment is: a. reformation. b. restitution. c. a penalty. d. liquidated damages.
B) Restitution
A valid contract requires: a. specific quality standards. b. an offer and an acceptance. c. a duration and termination provision. d. a price and a subject.
B) an offer and an acceptance
Floyd signs a contract to buy a drum kit just before reaching the age of majority. After reaching the age of majority, Floyd does not take possession or make payments. With respect to the contract, most courts would hold that this is: A) restitution B) disaffirmance C) ratification D) emancipation
B) disaffirmance
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: a. $13,000. b. $3,000. c. $10,000. d. $0.
C) $10,000
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: a. absolute. b. material. c. substantial. d. complete.
C) Substantial
Ren 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, Ren and Sara will have: a. a void contract. b. a bilateral contract. c. a unilateral contract. d. an executive contract.
C) a unilateral contract
Kali contracts to sell Leony her car for $3,000. This contract will be fully discharged when Kali and Leony: a. shake hands and go their separate ways. b. agree to sign a bill of sale. c. exchange the car for the $3,000. d. sign a receipt.
C) exchange the car for $3000
Desi's Uncle Eduardo tells Desi, "If I feel you deserve it at the time, I will give you a new car when you graduate from college." This promise: a. consists of a preexisting duty. b. relies on forbearance. c. is illusory. d. is enforceable.
C) is illusory
Movers LLC promises to deliver a certain couch to Nora, who promises to pay for the service. If Movers does not perform, it may be required to: a. cease business. b. perform a different service. c. pay money damages. d. make another promise.
C) pay money damages.
Even-Bilt Construction contracts to build a warehouse for Discount E-Sales Company. Even-Bilt substantially performs. Even-Bilt is entitled to: a. suspend performance. b. to be excused from performance. c. the full contract price less any damages they caused by their failure to comply with the contract. d. the full contract price.
C) the full contract price less any damages they caused by their failure to comply with the contract.
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: a. novation. b. accord and satisfaction. c. specific performance. d. mutual rescission.
D) Mutual Rescission
Intoxicated but capable of comprehending the consequences of her actions, Cricket signs a contract to sell her phone app design to Download, Ltd. This contract is: a. unenforceable because Cricket was intoxicated. b. unenforceable if Download disaffirms it. c. unenforceable if Cricket disaffirms it. d. enforceable.
D) enforceable
Lana, who is 17, enters into a contract with Rent-U-N-Go to lease a stereo for six months. After paying rent for three months, Lana decides she no longer wants the stereo. Lana: a. may not void the contract, but Rent-U-N-Go may. b. may void the contract, but only by providing sufficient written justification for her actions to Rent-U-N-Go. c. may void the contract, but only if Rent-U-N-Go agrees to release her from liability. d. may void the contract.
D) may void the contract (because she is a minor).
Bob wants to sell his recreational vehicle (RV) for $21,000. He e-mails Curt with an offer, but mistakenly types that the price is $20,100. Curt accepts the offer and pays Bob $20,100. Bob: a. can avoid the deal due to a bilateral mistake. b. can avoid the deal due to a unilateral mistake. c. can avoid the deal due to a mistake of value. d. must deliver the RV.
D) must deliver the RV
Fagin and Gage agree to hijack a truck carrying a load of almonds. If Fagin later refuses to go through with the crime, Gage can: a. enforce the agreement. b. obtain damages in the amount of his own share of the illegal profits. c. obtain damages in the amount of his partner's share of the illegal profits. d. none of the choices.
D) none of the choices
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: A) fraud B) mistake C) duress D) undue influence
D) undue influence
Mona is induced by her guardian Newt to sign a contract to invest her student loan funds in OptiBank through Newt's investment firm. Unknown to Mona, Newt realizes a commission from the investment. Most likely, Mona may rescind the contract on the basis of: A) fraud B) mistake C) duress D) undue influence
D) undue influence
Oscar owns Payroll Company, a bookkeeping service. Oscar pays Remy $5,000 to steal a list of a competitor's clients, to whom Oscar will aggressively market Payroll's services. This deal is: a. enforceable. b. voidable at the option of the party having less bargaining power. c. voidable at the option of either party. d. void.
D) void
Ray promises to give Steve his iPod in exchange for Steve's promise to pay Ray $50. Later, they exchange the device for the funds. A contract was created when: a. Ray offered to sell his iPod. b. Ray exchanged his iPod for $50. c. Steve paid Ray $50 for the iPod. d. Steve promised to pay Ray for the iPod.
D) Steve promised to pay Ray for the iPod.
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: a. must adapt his performance accordingly. b. can alter a material term, such as the payment date, without Bob's consent. c. must determine whether Bob's alteration constitutes substantial performance. d. can treat the contract as discharged.
D) can treat the contract as discharged.
Maya tries to start her new car with no success. She yells that she will sell the car to anyone for $10. Nero, a passerby who owns Nero's Motors, hands Maya $10. This is: a. a valid acceptance because Nero is a professional dealer. b. not a valid acceptance because Nero is only passing by. c. a valid acceptance because Maya is seriously frustrated. d. not a valid acceptance because Maya does not seriously intend to sell.
D) not a valid acceptance because Maya does not seriously intend to sell.
Del owns Everlast Painting, a sole proprietorship. Del's liability is: a. unlimited. b. limited to the extent of his or her original investment. c. limited to the extent of capital expenditures. d. limited by state statute and varies from state to state.
a. Unlimited
Sweet Selections, a general partnership, operates as a gift shop. Sweet Selections has ten partners. Jill and Amy each have a 25 percent interest in the partnership. All the other members have a 10 percent interest. Unless the partners otherwise agree, with respect to management decisions: a. a majority of the partners must agree. b. both Jill and Amy must agree. c. the senior partner decides. d. 30 percent of the partners must agree.
a. a majority of the partners must agree.
Hudson and Ilsa want to market a new line of kayaks and related gear under the brand name Journeys as a corporation—Journeys Inc. To avoid income taxes at the corporate level, they should form: a. an S corporation. b. an alien corporation. c. a private corporation. d. a C corporation.
a. an S corporation.
Dana is a member of Earthground Coffee, LLC, a limited liability company. Dana is liable for Earthground's debts: a. to the extent of her investment in the firm. b. in proportion to the total number of members. c. to the full extent. d. in proportion to her profit derived from the company.
a. to the extent of her investment in the firm.
Carl starts up, and assumes the financial risk of, DataWorks, a new Web marketing enterprise. Carl and DataWorks must meet legal requirements relating to: a. all of the choices. b. intellectual property laws. c. business name and state tax registration. d. occupational licensing.
a. all of the choices.
Western Rodeo LLC is a limited liability company (LLC). Like other LLCs, for federal jurisdictional purposes, Western Rodeo is most likely a citizen of: a. every state of which its members are citizens. b. all states in the United States. c. no state—an LLC is not a "citizen." d. any state in which it does business.
a. every state of which its members are citizens.
Laurel enters into a contract to sell her bike to Melanie. Melanie takes possession of the bike as a minor and continues to use it well after reaching the age of majority. She has: a. impliedly ratified the contract. b. impliedly disaffirmed the contract. c. expressly ratified the contract. d. expressly disaffirmed the contract.
a. impliedly ratified the contract.
Orin signs a covenant not to compete with his employer, Product Distribution, Inc. The covenant will be enforced if it: a. is reasonable with respect to geographic area and duration. b. relieves the employer from liability for any injury to Orin. c. does not require either party to obtain a business license. d. none of the choices.
a. is reasonable with respect to geographic area and duration.
Ralph enters into a contract with Skye to buy her land based on her assertion that the land is open to development. After the sale, Ralph learns that only a small section of the land can be built on—a local law prohibits construction on the rest of the property. Ralph can: a. not avoid the contract because persons are assumed to know the law. b. avoid the contract due to a mutual mistake. c. avoid the contract due to fraud. d. avoid the contract due to a mistake in value.
a. not avoid the contract because persons are assumed to know the law.
Cherry Creek Development, LP, is a limited partnership that invests in residential real estate projects. Its limited partners include more than 150 sophisticated investors and investment professionals. A Cherry Creek limited partner loses his or her limited liability if he or she: a. participates in the firm's management. b. votes to sell or dissolve the firm. c. does not participate in the firm's management. d. invests in a project that Cherry Creek has declined.
a. participates in the firm's management.
Rosalee is a general partner in Silver Dragon, a partnership consisting of the owners of a Chinese and American restaurant. Silver Dragon incurs debt for new dining tables and chairs. With respect to this debt, Rosalee is: a. only liable in proportion to the number of partners in the firm. b. personally liable to the full extent. c. only liable to the amount of her capital contribution. d. not liable.
b. personally liable to the full extent.
Fay is mentally incompetent but has not been so adjudged by a court. Any contract Fay enters into is: a. unavoidable. b. voidable if Fay lacks the capacity to comprehend the consequences. c. voidable if the other party does not realize that Fay is incompetent. d. voidable if Fay has a lucid interval at the time of contracting.
b. voidable if Fay lacks the capacity to comprehend the consequences.
Ruby Red Corporation is incorporated in South Carolina. In that state, Ruby Red is: a. an alien corporation. b. a domestic corporation. c. a non-entity. d. a foreign corporation.
b. a domestic corporation.
Dollars & Sense, Inc., is incorporated in the state of New Jersey and is doing business in the state of New York. In New York, Dollars & Sense is properly referred to as: a. a public corporation. b. a foreign corporation. c. a domestic corporation. d. an alien corporation.
b. a foreign corporation.
A firm named Biometric Research makes an attempt to incorporate for a purpose other than making a profit. Biometric is: a. a foreign corporation. b. a nonprofit corporation. c. not a corporation. d. an alien corporation.
b. a nonprofit corporation.
Rita and Salvatore do business as Tech Fixers, a partnership. In most states, for the purposes of collecting judgments and having accounting performed, this firm would be treated as: a. an aggregate of individuals. b. an entity. c. a non-entity. d. a person.
b. an entity.
Nina, the owner of Organic Farm, a sole proprietorship, wants to obtain additional capital to operate. This can be accomplished by: a. a state grant. b. any of the choices. c. a Small Business Administration Loan. d. a bank loan.
b. any of the choices.
Kim and Lyle are partners in K&L Sales, which exports technical equipment. If Congress declares that the equipment can no longer be exported, K&L: a. can continue its business indefinitely. b. dissolves immediately unless the partners change its business. c. can continue its business for one twelve-month period. d. is immediately subject to criminal prosecution and penalties.
b. dissolves immediately unless the partners change its business.
Data Analytics, LLC, is a limited liability company. Unless the articles of organization specify otherwise, it will most likely be assumed that the firm is: a. run by an outside professional management group. b. member-managed. c. manager-managed. d. an aggregate of member and non-member managers.
b. member-managed.
Jenny promises to pay Kay $500 because "she does not have as much money as other people." Jenny's promise is: a. enforceable because the redistribution of wealth is a valid social goal. b. not enforceable because Kay has not given consideration in return. c. not enforceable because Jenny could have paid Kyle more. d. enforceable because society wants people to keep their promises.
b. not enforceable because Kay has not given consideration in return.
Kay and Linda decide to do business as Marketing & Promotion. To be a partnership, this association can result from an agreement that is: a. express, but not implied. b. oral, written, or implied by conduct. c. implied, but not express. d. written, but not oral or implied.
b. oral, written, or implied by conduct.
Sierra is a holder of preferred stock in Rio Grande Irrigation, Inc. Sierra has priority over holders of Rio common stock as to: a. upward changes in the market price of the shares. b. payments of dividends. c. nothing. d. the date on which Rio must repurchase the shares.
b. payments of dividends.
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: a. the Uniform Limited Liability Company Act. b. the applicable state LLC statute. c. the principles of partnership law. d. the federal LLC statutes.
b. the applicable state LLC statute.
Mark fails to reveal a material fact in a business deal with Nancy. This constitutes fraud if: a. Mark is not aware of the fact or his failure to reveal it. b. the fact concerns a serious defect known to Mark but not to Nancy. c. the amount of consideration is grossly inadequate. d. any of the choices.
b. the fact concerns a serious defect known to Mark but not to Nancy.
Mother & Daughter Jewelers breaches its lease with Longview Mall and vacates the premises six months before the end of the term. In some states, Longview would have to: a. avoid reletting the premises to recover damages. b. use reasonable means to find a new tenant to mitigate damages. c. relet the premises to recover any damages. d. sell the premises to recover any damages.
b. use reasonable means to find a new tenant to mitigate damages.
Home Healthcare, LLC's owners are Inez and Jan. For purposes of entering into contracts, Home Healthcare is: a. an aggregate of its owners. b. a non-participating third party. c. a legal entity apart from its owners. d. a non-entity.
c. a legal entity apart from its owners.
The shares of Home Mortgage Corporation are publicly traded in securities markets. Home Mortgage Corporation is: a. a close corporation. b. a privately held corporation. c. a publicly held corporation. d. a public corporation.
c. a publicly held corporation
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: a. control. b. earnings. c. all of the choices. d. net assets.
c. all of the choices.
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. A corporation is owned by: a. the board of directors. b. the officers. c. the shareholders. d. the employees.
c. the shareholders
All of the following are reasons a franchisor may wish to maintain some degree of control and supervision over the franchisee, except: a. to protect the franchise's name and reputation. b. to establish certain standards for a facility. c. to avoid liability under the doctrine of respondeat superior. d. to maintain a certain level of food quality
c. to avoid liability under the doctrine of respondeat superior.
Cliff is a member of Dental Clinic, LLC. Cliff can participate in the firm's management to: a. the extent of his investment in the firm. b. the extent that he assumes liability for the firm's debts. c. any extent. d. no extent.
c. any extent.
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: a. dissolution. b. unethical but not a violation of the law. c. dissociation. d. a violation of the law.
c. dissociation.
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: a. reinvested in the business until the dispute is resolved. b. forfeited to the state. c. divided equally among the members. d. distributed according to members' proportionate ownership in the firm.
c. divided equally among the members.
The state of Illinois enacts a usury statute. The purpose is to: a. prevent the misuse of money advanced as loans. b. establish a minimum rate of interest that may be charged for loans. c. establish a maximum rate of interest that may be charged for loans. d. prevent the misuse of money paid back on loans.
c. establish a maximum rate of interest that may be charged for loans.
Chet is a partner in Diligent Accounting Service. Chet can inspect Diligent's books and records: a. only as the firm's management permits. b. only for a reasonable purpose. c. in their entirety. d. only in relation to Chet's capital contribution.
c. in their entirety.
Kim promises to pay Leo $500 to install a sump pump in Kim's warehouse. Leo completes the installation. The act of installing the pump: a. imposes a moral obligation on Kim to pay Leo. b. is not sufficient consideration because it is not goods or money. c. is the consideration that creates Kim's obligation to pay Leo. d. imposes no obligation on Kim unless she is satisfied with the job.
c. is the consideration that creates Kim's obligation to pay Leo.
Lee wants to go into the business of architectural design. Among the reasons that might convince Lee to set up his business as a sole proprietorship would be: a. its limited liability. b. its perpetual existence. c. its greater organizational flexibility. d. the ease of transferring the business to other family members.
c. its greater organizational flexibility.
Beth and Carol want to form a limited liability company to manage their business, DoReMi Music. Their state has adopted the Uniform Limited Liability Company Act, which has been adopted in: a. all states. b. no state. c. less than one-fifth of the states. d. about half of the states.
c. less than one-fifth of the states.
Marketing Solutions Inc. promises to employ Niki as a software engineer. In reliance on the promise, Niki quits her job with Online Ad Company, but Marketing Solutions does not hire her. Most likely, Marketing Solutions is: a. liable to Niki under the concept of rescission and new contract. b. liable to Niki under the preexisting duty rule. c. liable to Niki under the doctrine of promissory estoppel. d. not liable to Niki.
c. liable to Niki under the doctrine of promissory estoppel.
Intoxicated and not aware of the consequences, Grady agrees to a two-year phone service contract with Horizon, Inc., at more than the average market price. This contract is: a. not enforceable because contracting parties can change their minds. b. not enforceable because the contract favors Horizon. c. not enforceable if Grady was intoxicated enough to lack mental capacity. d. enforceable.
c. not enforceable if Grady was intoxicated enough to lack mental capacity.
Ford is the sole proprietor of Go, a game app subscription service. As a sole proprietor, on the business's profits, Ford pays: a. no income taxes. b. both personal and business income taxes. c. only personal income taxes. d. only business income taxes.
c. only personal income taxes.
Darin is a limited partner in Eco Baits, a pest control service organized as a limited partnership, which cannot pay its debts. Darin is liable for the debts: a. to the full extent. b. to no extent. c. to the extent of her capital contribution to the firm. d. in proportion to the number of partners in the firm.
c. to the extent of her capital contribution to the firm.
Industrial Engineering, Inc., promises to give stock options to Jasmine for processes she has already designed for the firm. This promise is enforceable: a. because it is a new contract. b. because it is supported by past consideration. c. under no circumstances. d. because it is an illusory promise.
c. under no circumstances.
Bee Hive Honey, LLC's members include Charlie and Donna. For purposes of suing and being sued, Bee Hive Honey is: a. a non-participating third party. b. a non-entity. c. an aggregate of its members. d. a legal entity apart from its members.
d. a legal entity apart from its members.
Techno Talent, Inc., is a corporation. Techno Talent's implied powers enable it to: a. bind the corporation to an action that will greatly affect its purpose. b. none of the choices. c. depart significantly from traditional corporate formalities. d. borrow funds and lend funds.
d. borrow funds and lend funds.
Flo and Glen form Health Food Inc. to coordinate the purchase, sale, and delivery of food products from organic farms to hospitals and other institutions. The stated purpose is to make a profit and to have a material positive impact on society and the environment. Health Food is: a. not a corporation. b. a nonprofit corporation. c. a private corporation. d. a benefit corporation.
d. a benefit corporation.
Under a contract with Valley Vineyard, Walsh begins grading a terraced hillside for the planting of grapes. Halfway through the project, Walsh asks for $5,000 over the contract price, claiming an increase in the "cost of doing business." Valley agrees but later refuses to pay. Valley's agreement to pay more is: a. unenforceable because Walsh's request modified the contract. b. enforceable. c. unenforceable because Valley's promise was illusory. d. unenforceable because Walsh's performance was a preexisting duty.
d. unenforceable because Walsh's performance was a preexisting duty.
