Quiz 4

Which of the following apply to a sole proprietorship

A person is in a business for himself

Limited liability is

An advantage to the corporate form of organization

A board of directors fiduciary duty of loyalty requires that

Directors place the interest of the corporation before their own interests

Before a person may file for bankruptcy the person must

Go to credit counseling

To establish and agency relationship

The principal and agent must agree to form an agency

There are two types of dissolution of a corporation

Voluntary and involuntary

For an agency to be valid in most states

the agent must be subject to the principal's control

To create a corporation

the corporation's articles of incorporation are filed with the appropriate officer of the state

You post a notice at school that you will sell your laptop computer for $600. A buyer comes by your room to look at it while you are gone and your roommate sells it for $500, thinking you would be happy with that price, which you did not authorize.

you can accept the deal by express or implied ratification

Lisa works for sally. Lisa's jobs include selling he folk-art Santa Claus statutes that sally hand makes as well as purchasing the woods for the statues. In this case Lisa is

A servant and an agent

You hire an agent to sell your house for you. Typically, such an agent receives a fee only if they actually sell the house. This person is most likely

A special agent

Lois was the agent of Lester, who owned a store in Walton, Iowa. While Lester was away on vacation, the Mississippi River reached record flood. As an agent, Lois only had permission to engage in sales at the store and purchase certain items. Faced with the prospect of losing all goods, Lois shipped lesters inventory to a storage facility 200 miles away, out of the path of the flood waters. This incurred costs, but saved the inventory. Lois acted in

Accordance with her duty of reasonable care

The UCC modified the common law perfect tender rule by

Allowing the buyer to accept less than the entire shipment

Barbara, a purchasing agent for UTA, was fired for good reason. Being angry about her dismissal, she calls one of the UTA's suppliers and orders 1000 purple widgets UTA does not need. If UTA, the principal, is held liable for this transaction, it is because Barbara had

Apparent authority

Voluntary Chapter 13 bankruptcies:

Apply to individuals only

The company name, the address of the company or its registered agent, the names and addresses of company members and whether any members are to be liable for company debts are all included in a limited liability company's

Articles of organizations

A good is tangible it it

Can be seen and touched

Millie takes her old VW to george's garage for repairs. George works on a cash only basis. He gives the problems for $687. He tells her he will keep the car until she pays. Millie pays $150, george may

Continue to hold onto the car until Millie pays and force the sale of the car

Which of the following is an advantage to having the ability to use agents

Expanded business opportunities

Suppose parties to a contract that is under the UCC fail to specify some term. The UCC:

Has rules to fill the gap about a silent term

Bill is an attorney in Ohio. Marla hires bill to create a trust for his children. Bill has not been keeping up with developments in trust law, and so creates an inefficient trust. Under recent Ohio law, he could have created a much more beneficial trust. In this case bill:

Has violated a duty of reasonable care

When a court "pierced the corporate veil" it

Holds shareholders personally liable for corporate debts

The modern corporation was developed

In the United States during the eighteenth century

Suppose a contract to buy chickens is under the CISG, but the contract does not state what the age of the chickens should be. In a dispute, the courts would look to

Industry practice

If a country has adopted the United Nations convention on the recognition and enforcement of foreign arbitrable awards then

It's courts are bound to recognize and enforce arbitration decisions that have followed proper procedure

Governments disfavor bearer instruments because:

Law enforcement agencies find it difficult to trace money transferred in bearer form

Which of the following is common problem with employee handbooks

Making promises about discipline procedures that are not followed consistently

Under a floating lien

New inventory is used to replace collateral that is sold

A buyer ordered custom made equipment. The delivery date was not set, but the seller promised to do the job in a reasonable time. When the equipment was no ready when the buyer hoped, the buyer cancelled the order. The seller demanded payment. You would expect the court to hold that

No delivery date was fixed, but the seller worked on the equipment and so will be paid for the work done up to time of cancellation

Kurt works for Jeris. One evening Kurt decided to use the company truck to pick up his date. On his way home from the movies, after dropping his date off, Kurt runs a red light and smashes into Bob. Is Jeris liable to Bob?

No, because Kurt was acting outside the scope of his employment

Language that attempts to dismiss an express warranty is ____ when the disclaimer is inconsistent with the warranty

Not effective

Adam enters into an oral agreement with tushar that Tushar will sell Adams house for him. A week later, the house burns downs Adam and tushars agency is now

Terminated by operation of law

Most states accept the UCC's provisions on most topics because

The benefits of lowering the costs of doing business across state lines was so great

An attached interest means

The customer has transferable rights in the collateral and has signed the debt instrument

If a good has been stolen and is then sold to an unsuspecting buyer

The good title does not pass to the buter

Andrea has been working very hard for her employers bill. Two weeks before Andrea is due for a bonus payments bill fires her for no reason. Andrea could make a case that

The implied covenant of good faith and fair dealing has been violatex

If a negotiable instrument is assigned, the assignee has

The same contract rights and responsibilities as the assignor

If the parties to a sale under the UCC do not specify when the title to the goods passes, then, assuming goods have to be shipped title passes to the buyer when

The seller completes all obligations regarding delivery

If a repossessed product is sold for more than what is owed by the debtor

The seller is obligated to return the difference

Lisa goes to the local appliance store and buys an oven on credit. The store extends her credit. The stores security interest in the oven perfects when

The store files the financing statement l with the the Secretary of State

The buyers damage provisions under the UCC are designed

To put the buyer in as good a position as if the seller had performed according to the contract

A buyer and seller have been doing business for months without a formal contract. On mondays the seller delivers supplies to the buyers business. On Thursdays, the buyer pays the invoice by mail. Difficult times arrive. The buyer fails to make payment and the seller sued for breach of contract. Is there a contract?

Under the UCC, a contract has been formed by the conduct of the parties. The seller will prevail

An agent is trying to sell a house for $100,000 for her principal. The principal will sell the house for as little as $80,000, but wants to get as much as possible. The agent tells her cousin to offer $81,000. The agent's actions are:

a violation of the duty of loyalty

When you go on vacation you give your neighbor authority to pick up your mail and watch for burglars for you. You tell the neighbor not to go into the house or let anyone else in. A fire on the hills threatens your house. The neighbor goes in to carry out valuables before the house burns. This action is:

an agency through operation of law

A California winery shipped its rotgut red wine to the house of wines. The wine was improperly bottled, causing the wine to blow its corks and spew wine all over wines carpeting. In wines suit against the winery, the damages to the carpet will be considered

consequential damages

Scott is an agent for Lee and his duties require him to fly to Chicago from Cleveland. Scott gets up late and misses his flight to Chicago so he has to buy a second plane ticket. As principal, Lee:

does not have a duty to reimburse Scott for the second plane ticket because it was Scott's fault he had to buy it

Partners in a partnership owe each other:

fiduciary duty

If a payment amount is not specified in the agency agreement, a principal's duty to compensate means that the principal must pay the agent:

for the reasonable value of the services provided

Lyle is Thelma's agent. Thelma has made it clear to Lyle that she does not want him to sign the contracts that he negotiates; she retains that power. If, despite Thelma's instructions, Lyle negotiates and signs a contract with Tom committing Thelma to spend thousands of dollars, what will the consequences of Lyle's actions be?

if Tom was justified in presuming Lyle had authority to sign the contract, Thelma will be responsible

The scope of an agents authority is determined from the

oral or written expressions of the principal or the principal's conduct

In the case of bankruptcy, which of the following classes of creditors have highest priority?

secured creditors

Carter, who had even convicted of violent crimes, was hired as an independent contractor to sell vacuum cleaners door-to-door. He assaulted a customer in her home who sued the vacuum cleaner company. You would expect the Texas high court to hold that company:

was liable for negligence in hiring

If a shareholder supplies needed material to the business then he:

will become a creditor of the corporation and will enjoy the same rights of recovery against the corporation as any other creditor