BUL4310 Chapter 11 Quiz, Chapter 23 - Warranties, ch.20, Chapter 11, chapter 11-12 review, Chapter 10, BLAW Chapter 10., BLAW 310 Edwards - Chapter 11, Chapter 17 Study questions BL 556, BLAW Chpt. 7, Business Law Ch 42 MC, BLAW exam 12 part 2, Ch. 3…

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Viveca promises high returns to Waverly and other investors, who then agree to trust their funds to Viveca. She uses these funds to pay previous investors. This is a. a stock option. b. an accredited investor. c. a short-swing profit. d. a Ponzi scheme

d. a Ponzi scheme

in contract law, the term consideration refers to the serious thought that underlies a party's intent to enter into a contract

false

the only requirement for a valid contract is that the parties voluntarily entered into it

false

the writing requirement under the statute of frauds means that an agreement must be a formal written contract

false

to be legally sufficient, consideration must be evidenced by something tangible

false

Monopolies and other restraints on trade primarily are governed by XXXX.

federal law.

Global Trade Corporation is a public company that is poised to issue securities that do not qualify for an exemption from registration. This means that Global Trade must

file a registration statement with the SEC.

For products that are sold nationwide, the relevant geographic market encompasses the entire United States.

true

In determining the legality of a merger, a crucial consideration is market concentration.

true

Insurance companies are exempt from antitrust laws whenever state regulation exists.

true

Labor unions can organize and bargain without violating antitrust law.

true

Resale price maintenance agreements are subject to analysis under the rule of reason.

true

Some promises are not legally binding

true

The Clayton Act prohibits certain classes of price discrimination.

true

The Sherman Act, the Clayton Act and the Federal Trade Commission Act are all examples of legislation designed to curb anticompetitive business practices.

true

The basic purpose of antitrust law is to regulate economic competition.

true

The possession of monopoly power alone does not constitute the offense of monopolization.

true

a bilateral contract comes into existence at the moment promises are exchanged

true

a contract to do something that is prohibited by statutory law is void

true

a counteroffer is a rejection of the original offer adn the simultaneous making of a new offer

true

a prmosie of bargained for exchange distinguishes contracts from gifts

true

a promise to do what one already has a legal duty to does not legally sufficient consideration

true

an acceptance sent by means not expressly or impliedly authorized is not effective until it is received

true

an acceptance that changes the terms of the original offer may considered a counteroffer

true

an exectued contract is one that has been fuly performed

true

every state has a statute that stipulates what types of contracts must be writing

true

if a voidable contract is ratified, the parties must fully perform their respective legal obligations

true

in certain circumstances, bargains are so oppressive that the courts relieve innocent parties of part or all of their duties

true

the element bargained for exchange distinguishes contracts from gifts

true

under the federal law, an electronic signature is as valid as a signature on paper

true

under the mailbox rule, an acceptance takes effect at the same time it is sent

true

unilateral contract is formed when the party receiving the offer completes the request act or performance

true

Section 1 of the Sherman Antitrust Act requires XXXX.

two or more persons.

Under a contract with Bucolic Farms, argo excavation inc. begins digging an agricultural pond. In midproject, Agro asks for $15000 over the contract price, claiming an increase in the "cost of doing business" Bucolic agrees but later refuses to pay. Their agreement is

unenforceable because Agro's performance was a preexisting duty

Guitar Factory Corporation files a registration statement and delivers a prospectus to the appropriate parties. These items are intended to enable the evaluation of certain financial risks by

unsophisticated investors.

Sonya and Taylor enter into an oral contracts that is required to be in writing to be enforceable. Such a contract is normally

voidable by a party who does not wish to follow through with it

Like the bylaws of other corporations, the bylaws of Farmland Equipment, Inc.,

were adopted at its first organizational meeting

Refer to Fact Pattern 21-1. Drilling Tools decides to sell its new securities via the Internet. This offering

will avoid the payment of commissions to brokers or underwriters.

Sun & Ski Tours Corporation is poised to issue securities that, under the Securities Act of 1933, are "exempt." This means that the securities can be sold

without being registered.

Household Products Corporation wants to make an offering of securities to the public. This offering is not exempt from registration under the Securities Act of 1933. Before Household Products sells its securities, it must provide investors with a. forward-look financial forecasts b. an investment contract ç. a prospectus d. samples of its products

ç. a prospectus

By contract, Oil Shale Corporation forbids Petro Refining, Inc., a wholesale buyer of Oil Shale's products, from purchasing the products of its competitors. This exclusive-dealing contract is not permitted a. under any circumstances. b. if its effect is to cause a competitor a loss of any business. c. if its effect is to substantially lessen competition. d. unless there is no effect on a competitor..

c. if its effect is to substantially lessen competition.

Dondi contracts to buy a custom espresso maker from Caffee Specialties, Inc., for $4,500, but Caffee fails to deliver. Dondi buys the appliance else-where for $5,500. Dondi's measure of damages is

$1,000 plus incidental damages.

Nogales Ceramics pays Omar $15,000 to propose an online marketing campaign. Two days later, Omar tells Nogales that he has accepted a job in Silicon Valley and cannot plan the campaign. As compensatory damages, Nogales can recover

$15,000.

under no circumstances

. Fruits & Vegetables, Inc., employs hundreds of seasonal and permanent workers, both skilled and unskilled, in seven states. Fruits & Vegetables can hire illegal immigrants..

Stock Option

An opportunity for corporate officers to purchase shares of the corporation's stock at a set price. This option gives officers a financial stake in the corporation and should encourage them to works for it success

The body of federal and state laws and statutes protecting trade and commerce from unlawful restraints, price discrimination, price fixing, and monopolies.

Antitrust Laws

to the extent of his capital contribution.

Buckley is a general partner in Cut-Rate Shipping, LLLP, a limited liability limited partnership, which cannot pay its debts. Buckley is personally liable for the debts

not rescind the contract

Byron agrees to sell to Charity, for $1,500, a remote parcel of land. They believe the land to be worthless, but beneath it is a gold mine. Byron can

A market division by class of customer between rival firms does not violate antitrust law. a. True b. False

A restraint of trade is an agreement between firms that has the effect of reducing anticompetitive business practices. a. True b. False

For products that are sold nationwide, the relevant geographic market is the entire globe. a. True b. False

In determining the legality of a merger, market concentration has no significance. a. True b. False

It is in society's interest to condemn every firm that acquires a position of power. a. True b. False

Joint refusals to deal are not subject to scrutiny under the Sherman Act. a. True b. False

Market power is the ability of a firm to enter a given market. a. True b. False

Monopoly power in and of itself constitutes the offense of monopolization. a. True b. False

Predatory pricing involves selling a product at prices substantially above the fair market value. a. True b. False

Private parties cannot sue violators of Section 10(b) and Rule 10b-5.

Resale price maintenance agreements are per se violations of the Sherman Act. a. True b. False

Section 1 of the Sherman Act condemns monopolization. a. True b. False

Size alone determines whether a firm is a monopoly. a. True b. False

The U.S. Department of Justice can prosecute violations of all of the antitrust laws. a. True b. False

Under an exclusive-dealing contract, a seller promises a buyer a certain territory in which the buyer will have no direct competition. a. True b. False

Unilateral conduct cannot result in a violation of antitrust law. a. True b. False

Violations of the Securities Exchange Act of 1934 may be subject to criminal prosecution, but not civil liability.

Any agreement among competitors to fix prices is subject to evaluation under the rule of reason. a. True b. False

False

Conditioning the sale of one product on the purchase of another is an exclusive-dealing contract.

False

Foreign governments may never be sued for violation of U.S. antitrust laws. True False

False

Foreign investors cannot participate in a limited liability company

False

Goods must be of the highest quality possible to be merchantable. T/F

False

In a limited liability partnership, a partner is personally liable for the malpractice of other partners.

False

In a limited partnership, a limited partner has full responsibility for the partnership and for all its debts.

False

Merchants are not required to warrant that the goods they sell are fit for their ordinary purpose. T/F

False

Monopoly power in and of itself constitutes the offense of monopolization under Section 2 of the Sherman Act. True False

False

Officers hire the directors and other executive employees.

False

One of the key advantages of the corporate form is the unlimited liability of its owners.

False

Resale price maintenance agreements are always considered per se violations of Section 1 of the Sherman Act. True False

False

Shareholders are personally liable for the debts of a corporation.

False

Shareholders' meetings need not occur at any certain interval.

False

The Revised Model Business Corporation Act gives a close corporation less flexibility in determining its rules of operation.

False

Title and risk of loss can pass to the buyer from the seller before the goods are identified to the contract. T/F

False

whistleblower statutes

Marvin is an employee of Wild Thing Farms. Marvin finds out that the head of Wild Thing Farms is illegally importing endangered animals to sell as pets. If Marvin reports his employer's illegal activities he will probably be protected from retaliatory discharge by...

17. Both employers and employees contribute to help pay for benefits that will partially make up for the employees' loss of income on retirement. A. True B. False

19. All unemployed workers who are willing and able to work are eligible for unemployment compensation. A. True B. False

20. There is federal regulation of employers' retirement plans for employees. A. True B. False

21. Employers that fall under the provisions of the federal unemployment tax act of 1935 are taxed at regular intervals. A. True B. False

employee privacy rights

Investors Fund, a large financial institution, announces that it will start monitoring its employees' electronic communications. If Mary, an Investors Fund employee, resists this policy, her best argument is that the monitoring violates...

annual wage base

Jo works for Tall Tales Publishing, Inc. The basis for Jo's contribution under the Federal Insurance Contribution Act (FICA) is based on her...

opi and other employees

Julie works as an employee for Organic Produce Express, Inc. (OPI). Rowan, who is unemployed, collects unemployment compensation. This compensation is provided by a tax on...

Kirby is a manager of Jumpstart Fitness LLC, a limited liability company. Kirby owes fiduciary duties to

Jumpstart and its members

an express warranty

Livestock Feedlot orders one hundred sacks of cattle feed from MegaNutrient Feed, Inc. Each sack is stamped with the phrase "Twenty percent protein." This is

23. Generally, an employer's monitoring of electronic communications in the workplace does not violate employees' privacy rights. A. True B. False

24. An employer may avoid laws regulating monitoring activities by informing employees that they are subject to monitoring. A. True B. False

26. Employees of private employers have some privacy protection under tort law and state constitutions. A. True B. False

28. An employer may not hire an illegal immigrant under any circumstances. A. True B. False

29. To hire employees from other countries, an employer must first obtain the approval of the u.s. immigration and customs enforcement. A. True B. False

3. An employee who is fired outside of the terms of an implied employment contract may succeed in an action for breach of contract. A. True B. False

30. The norris-laguardia act effectively declared a national policy permitting employees to organize. A. True B. False

5. Whistleblower statutes protect employees from retaliatory discharge. A. True B. False

A corporation can recapture any profits realized by an insider on any purchase or sale of the firm's stock within any six-month period.

A major problem facing the Securities and Exchange Commission is how to enforce the antifraud provisions of the securities laws in the online environment.

A registration statement must include a financial statement certified by an independent public accounting firm.

A registration statement must state how a corporation plans to use the proceeds from the sale of the securities.

A trade association practice or agreement that restrains trade is analyzed under the rule of reason. a. True b. False

An act must substantially affect interstate commerce to violate antitrust law. a. True b. False

Any action challenged as an attempt to monopolize must have been specifically intended to exclude competitors and garner monopoly power. a. True b. False

Corporations' chief executive officers are directly accountable for the accuracy of financial statements filed with the Securities and Exchange Commission.

Generally, stock offerings that are made in a limited manner during any twelve-month period are ex¬empt from the registration requirement.

Generally, stock offerings that involve a small dollar amount are ex¬empt from the registration requirement.

Insurance companies are exempt from antitrust laws whenever state regulation exists a. True b. False

Labor unions can organize and bargain without violating anti trust law. a. True b. False

Monopoly power is an extreme amount of market power. a. True b. False

Monopoly power may be proved by evidence that a firm used its power to control prices. a. True b. False

One of the most common forms of securities are bonds issued by corporations.

Price discrimination occurs when a seller charges different prices to competing buyers for identical goods or services. a. True b. False

Private offerings of securities in unlimited amounts can be exempt from the registration requirement of the Securities Act of 1933.

Private parties can sue violators of the Securities Act of 1933.

SEC Rule 10b-5 applies to almost all cases involving the trading of securities.

SEC Rule 10b-5 prohibits the commission of fraud in connection with the purchase or sale of any security.

Securities that are exempt from the registration requirement can generally be sold and resold without being registered.

State securities laws apply mainly to intrastate transactions.

Territorial and customer restrictions are judged under the rule of reason. a. True b. False

The Clayton Act prohibits price discrimination. a. True b. False

The Securities Exchange Act of 1934 provides for continuous, periodic disclosures by publicly held corporations.

The Sherman Act is an example of legislation designed to curb anticompetitive business practices. a. True b. False

The key to liability under Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 is whether undisclosed inside information is material.

The purpose of antitrust legislation is to foster competition. a. True b. False

When a small number of companies share a large part of a market, the market is concentrated. a. True b. False

Willful violations of the Sarbanes-Oxley Act of 2002 may be subject to harsh penalties.

A free-writing prospectus may be used before the Securities and Exchange Commission completes its review of a related registration statement.

T, during the waiting period

using lie-detector tests to investigate losses due to theft

The Employee Polygraph Protection Act of 1988 prohibits most private employers from doing all of the following except...

Foreign persons, including foreign governments, may sue under U.S. antitrust laws in U.S. courts. True False

True

Good faith and fair dealing are important in terminating a franchise relationship

True

I identification takes place when specific goods are designed as the subject matter. T/F

True

If there is no limited liability company (LLC) agreement covering a topic under dispute, the state LLC statute will govern the outcome.

True

In choosing a form of business organization for a new enterprise, important factors include the ease of creation.

True

In choosing a form of business organization for a new enterprise, important factors include the liability of the owner

True

In many states, an operating agreement is not required for a limited liability company to exist.

True

In most monopolization cases, intent may be inferred from evidence that the firm had monopoly power and engaged in anticompetitive behavior. True False

True

Labor unions can organize and bargain without violating antitrust law.

True

Monopoly power may be proved by evidence that a firm used its power to control prices

True

Partners are subject to personal liability for partnership obligations

True

Shareholders must approve fundamental changes affecting the corporation before the changes can be implemented.

True

Some vertical restraints are per se violations of whereas others are judged under the rule of reason. True False

True

Statements of fact made during the bargaining process are express warranties. T/F

True

The United Nations Convention on Contracts for the International Sale of Goods (CISG) is the uniform international sales law of countries that account for more than two-thirds of all global trade. T/F

True

an assignment

Loren and Kendra enter into a contract for the distribution of Loren's produce to local restaurants for which he agrees to pay Kendra. Kendra transfers her right to payment under the contract to County Bank. This transfer is

Mango, its competitors, the Federal Trade Commission, and the U.S. Department of Justice.

The contract term "free on board" indicates that the selling price of goods includes transportation costs to the specific F.O.B. place named in the contract. T/F

True

The federal government regulates franchising through laws that apply to specific industries.

True

The franchise relationship is defined by a contract.

True

The members of a limited liability company enjoy limited liability.

True

The possession of monopoly power alone does not constitute the offense of monopolization

True

The primary document needed to incorporate a business is the articles of incorporation.

True

To pierce the corporate veil means to ignore the corporate structure, exposing the shareholders to personal liability.

True

Under a shipment contract, if the seller does not make a reasonable contract for transportation or notify the buyer of the shipment, the buyer can reject the goods if a material loss results. T/F

True

Under the UCC, good faith means honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade. T/F

True

An agreement between a buyer and a seller in which the buyer of a specific product or service becomes obligated to purchase additional products or services from the seller.

Tying Arrangement

cannot work in hazardous occupation

Tyrone is seventeen years old. Under the Fair Labor Standards Act, he...

Guitar Factory Corporation files a registration statement and delivers a prospectus to the appropriate parties. These items are intended to enable the evaluation of certain financial risks by

Unsophisticated Investors

Best Burger, Speedy Grill, and Fast Food are competitors in the New York City area. They have a secret agreement not to purchase any beef from Northeast Beef Growers Cooperative. Their agreement is tying arrangement a group boycott a horizontal market division price discriminationItem.

a group boycott

HVAC Parts Company charges different buyers different prices for identical goods. HVAC's prices are subject to evaluation under a. the Clayton Act. b. the Federal Trade Commission Act. c. the Sherman Act. d. no antitrust law.

Lightning Cycles, Inc., makes Lightning-brand motorcycles and accessories, which are distributed to authorized dealers, including Macho Motors, Inc. Macho operates dealerships in several locations. Lightning imposes restrictions on Macho to limit the areas in which they sell the bikes and insulate other dealers from direct competition. This is a. a territorial restriction. b. a resale price maintenance agreement. c. a refusal to deal. d. a price-fixing agreement.

Organic Cheeses, Inc., Fine & Fresh Foods Company, and Healthy Whole Foods, Inc. organize together to exchange information and share advertising. This is an example of a a. trade association. b. resale price maintenance agreement. c. monopoly. d. territorial restriction.

Precious Metals Corporation, a raw materials vendor, sells its commodities in certain quantities to Quarry Refining Company for a certain price but charges Rich Assets, Inc., a Quarry competitor, a higher price. This is most likely a violation of a. the Clayton Act. b. the Federal Trade Commission Act. c. the Sherman Act. d. no antitrust law.

On behalf of bobble head manufacturing company, carmela types her name at the bottom of an email purchase order adn submits the order to designer parts company. under the ueta, carmela's typed name qualifies as

a "signature"

Lamar offers to pay melanie 150 for a hot air balloon ride for nina. they agree to meet at dawn the next day to exchange the cash for the ride. At this point, these parties have

a bilateral contract

jonah tells levi he will give him an xbox is levi does jonahs chores for a month. Levi promises to do the chores. Jonah and levi have formed a

a bilateral contract

deb buys a song through esongs, an online music vendor. Before completing the purchase and downloading the song. deb must review a provision stating that she will not make and sell copies of the song and is required to click "iagre" this provision is

a click on agreement

a group boycott

River Vista Inc. enters into a contract with Stable Realty Management to manage and maintain River Vista's commercial real estate. Their contract provides that neither party can recover damages for a non-fraudulent or unintentional breach. This is

a limitation-of-liability clause.

vita asks walter, a cobbler and shoe salesperson, to repair a pari of work boots. There is no discussion of a price, and vita and walter do not sign any documents. With respect to vitas obligation to pay the bill, this is

an implied contract

App Developers, Inc. (ADI), enters into a contract with Carmen, the chief executive officer of SalesCorp, to create an app for the firm. To fulfill the contract, ADI hires Max and ten other student interns. With respect to the contract between ADI and Carmen, Max is

an incidental beneficiary.

36. Cellphones & Calltime, Inc., makes an offer to Delores to enter into a contract to work as a salesperson for a certain base salary plus commission for ninety days subject to one year renewal based on her performance. delores accepts the offer, a valid contract requires

an offer and an aceptance

Greta is a member of Hovercraft LLC. As a member, Greta is

an owner

Tumble Gymnastics & Karate, Inc., grants a franchise to Stefan to operate a Tumble gym. Tumble may require Stefan to pay the franchisor a percentage of the business's

annual sales or volume

Cattle Ranch Company offers its stock for sale only in a single state. The law in Cattle Ranch's state is like the law in most states. Cattle Ranch's offer is subject to state securities statutes that include

antifraud and disclosure provisions.

Bonds & Stocks Corporation, and its officers, directors, and shareholders, buy and sell securities. SEC Rule 10b-5 applies to the purchase or sale of

any security.

Hawaiian Shirts, Inc., wants to issue stock of $4 million in a single offering. The corporation must provide disclosure documents that generally are the same as those used in registered offerings to

any unaccredited investors.

Dani is considering forms of business organization for her financial advisory firm. Like most states, Dani's state requires that to form a limited liability company, she must file with a central state agency

articles of organization

Coco is considering forms of business organization for her concessions business—Coco's Cupcakes. Most states require that a limited liability company have at least

at least one member

Under the Sarbanes-Oxley Act of 2002, chief executive officers no longer need to certify the accuracy of information in corporate financial statements. a. True b. False

b. False

Bret buys a subscription to the catalog of music provided by Concerto, an online music vendor. Before accessing the catalog, bret must agree to a provision stating that she will not make and sell copies of the music. This provision is

a click-on agreement

ricci, a user of smartphoneapps.com web site can download apps for free if she first clicks on "i accept" after viewing certain items, This is

a contract that includes the terms

Farm2Fork, LLC, is a limited liability company. Rather than distribute its profits to its members, Energy wants to reinvest the profits in its business. For this reason, Energy may prefer to be taxed as

a corporation

An antitrust action is brought against Tri-State Transport Company, alleging the offense of attempted monopolization. To be guilty of this offense, Tri-State's attempt must have

a dangerous probability of success.

Social Media Sites Corporation is required to file a registration statement with the Securities and Exchange Commission. This statement must contain

a description of securities being offered for sale.

Ruby Red Restaurant Corporation is incorporated in South Carolina. In that state, Ruby Red is

a domestic corporation

As part of a stock offering for Designer Studio Corporation, the firm's accountant Evelyn intentionally misrepresents material facts in the prospectus. Flores buys the stock unaware of the misrepresentation and suffers a loss. Evelyn may be subject to

a fine, imprisonment, and damages.

Henry promises not to open his Hanks lunchbox Cafe before 10am if Isis, who owns Isis's Danish and Donuts next door promises to close by 4 pm Henry's consideration is

a forbearance

Express powers of a corporation are found in its articles of incorporation.

True

A divestiture is an order to a company to cease, or divest itself of, its an-ticompetitive conduct. a. True b. False

A firm is not a monopolist unless it is the sole seller in a market. a. True b. False

Accredited Investor

"Sophisticated" investors, such as banks, insurance companies, investment companies, the issuer's executive officers and directors, and persons whose income or net worth exceeds certain limits

not hire them, recruit them or refer them for a fee

. Southwestern Foods Corporation operates a packaging plant near the border between the United States and Mexico. Due to the location, it would be easier for Southwestern to employ noncitizens. With respect to persons not authorized to work in the United States, an employer can...

36. Workbilt hardware company employs workers, including gina, at six locations in two states. Workbilt's discharge of gina outside the terms of an employment contract may result in A. Workbilt's liability for damages. B. Gina's deportation under the immigration act. C. Discontinuance of gina's health-plan coverage. D. Monitoring workbilt's communications for privacy violations.

39. Tyrone is seventeen years old. Under the fair labor standards act, he A. Cannot work in a hazardous occupation. B. Cannot work during school hours. C. Must obtain a permit to work. D. None of the choices.

51. Investors fund, a large financial institution, announces that it will start monitoring its employees' electronic communications. If mary, an investors fund employee, resists this policy, her best argument is that the monitoring violates A. Employee privacy rights. B. Worker health and safety. C. Federal labor law. D. The employment-at-will doctrine.

59. Hu, ivan, and juana apply to work for king meatpacking company. These individuals' identities and eligibility to work must be verified by A. The employer. B. The individuals. C. The individuals' countries of origin. D. The u.s. citizenship and immigration services.

Bild-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 Bild-It-Rite must a. file a registration statement with the SEC. b. issue the securities through an online registration site. c. refrain from issuing the securities to unregistered investors. d. register the securities with a national stock exchange.

Catalina promises high returns to Darby and other investors, who then agree to trust their funds to Catalina. She uses these funds to pay previous investors. This is a. a Ponzi scheme. b. a stock option. c. an accredited investor. d. a tombstone ad.

Dhani, an accountant for Eureka, Inc., learns of undisclosed com¬pany plan¬s to market a new laptop. Dhani buys 1,000 shares of Eureka stock. He re¬veals the company plans to Fay, who buys 500 shares. Fay tells Geoff, who tells Hu. Both Geoff and Hu buy 100 shares. They know that Fay got her informa¬tion from Dhani. When Eureka publicly an¬nounces its new laptop, Dhani, Fay, Geoff, and Hu sell their stock for a profit. Refer to Fact Pattern 20-3. Under the Securities Ex¬change Act of 1934, Fay is most likely a. liable for insider trading. b. not liable because Fay did not prevent others from profiting. c. not liable because Fay did not solicit information from Dhani. d. not liable because Fay does not work for Eureka.

Dhani, an accountant for Eureka, Inc., learns of undisclosed com¬pany plan¬s to market a new laptop. Dhani buys 1,000 shares of Eureka stock. He re¬veals the company plans to Fay, who buys 500 shares. Fay tells Geoff, who tells Hu. Both Geoff and Hu buy 100 shares. They know that Fay got her informa¬tion from Dhani. When Eureka publicly an¬nounces its new laptop, Dhani, Fay, Geoff, and Hu sell their stock for a profit. Refer to Fact Pattern 20-3. Under the Securities Ex¬change Act of 1934, Geoff is most likely a. liable for insider trading. b. not liable because Geoff did not prevent others from profiting. c. not liable because Geoff did not solicit information from Dhani. d. not liable because Geoff does not work for Eureka.

Dhani, an accountant for Eureka, Inc., learns of undisclosed com¬pany plan¬s to market a new laptop. Dhani buys 1,000 shares of Eureka stock. He re¬veals the company plans to Fay, who buys 500 shares. Fay tells Geoff, who tells Hu. Both Geoff and Hu buy 100 shares. They know that Fay got her informa¬tion from Dhani. When Eureka publicly an¬nounces its new laptop, Dhani, Fay, Geoff, and Hu sell their stock for a profit. Under the Securities Ex¬change Act of 1934, Hu is most likely a. liable for insider trading. b. not liable because Hu is only a tippee, not a tipper. c. not liable because Hu is too far down the chain of disclosure. d. not liable because Hu traded on the basis of a true fact.

Fresh Cream, Inc., wants to make an initial public offering of securi¬ties. Fresh believes that it qualifies for an exemption under Regulation A from the full registration requirement of the federal Securities Act of 1933. Refer to Fact Pattern 20-1. Fresh decides to sell its new securities via the Internet. This offering a. will avoid the payment of commissions to brokers or underwriters. b. is an investment scam. c. is a Ponzi scheme. d. constitutes insider trading.

Heavy Hauling, Inc., is a public company whose shares are traded in the public securities markets. Under the Sarbanes-Oxley Act of 2002, to ensure that Heavy Hauling's financial results are accurate and timely, the firm's senior officers must set up and maintain a. internal "disclosure controls and procedures." b. external "release and reveal timetables." c. personal "peruse and review liability policies." d. public "information and discussion forums."

Kitsch Niche Corporation is a noninvestment company that wants to is¬sue $3 million of stock in a twelve-month period. Kitsch Niche, with less than $20 mil¬lion in annual sales, qualifies as a small business issuer. Before Kitsch Niche sells the stock, it must provide investors with a. an offering circular. b. a notice of the issue. c. a red herring prospectus. d. a tombstone ad.

Madison is the chief executive officer of Nitro Medico, Inc., which is required to file certain financial reports with the Securities and Exchange Commission (SEC). Under the Sarbanes-Oxley Act of 2002, Madison must a. certify that the reports are complete and accurate. b. designate a corporate official to assume liability for inaccuracies. c. do nothing. d. read the reports and be prepared to answer questions about them.

Maple Products Corporation is a public company, which New Hampshire regulates and in which Orin invests. The Sarbanes-Oxley Act of 2002 introduced direct federal corporate governance requirements to a. public companies. b. private investors. c. state regulators. d. none of these choices.

pay employees higher wages for working in more dangerous areas

Big Drill Oil Company employees one hundred workers. Big Drill must do all of the following except...

RingTone Corporation is a public company whose securities are traded among investors. Under the Securities Act of 1933, a security is a. almost any stake in the ownership or debt of a company. b. an investment that is guaranteed to make a profit. c. only such common forms of debt and equity as bonds and stocks. d. whatever a company represents to the public as a security.

Sid, a director of Tech Software Company, learns that a Tech engineer has developed a new, exciting video game. Sid buys Tech stock and tells his friend Uri, who also buys Tech stock. When the new game is released three weeks later, Sid and Uri sell their stock for a big profit. Refer to Fact Pattern 20-2. Regarding Sid's profits on the purchase and sale of Tech stock, under Section 16(b) of the Securities Exchange Act of 1934 Tech may recapture a. all of Sid's profits. b. half of Sid's profits. c. 10 percent of Sid's profits. d. none of Sid's profits.

To raise capital to form Plasticity Corporation with Quinn, Rona sells bonds and stock in other companies, and plans to register an initial public of¬fer¬ing under the Securities Act of 1933. SEC Rule l0b-5 covers a. most forms of securities. b. only bonds. c. only securities registered under the Securities Act of 1933. d. only stock.

Investment Company

A company that acts on behalf of many smaller shareholder-owners by buying a large portfolio of securities and professionally managing that portfolio

Prospectus

A document required by federal or state securities laws that describes the financial operations of a corporation, thus allowing investors to make informed decisions

Tippee

A person who receives inside information

SEC Rule 10b-5

A rule of the SEC that makes it unlawful, in connection with the purchase or sale of any security, to make any untrue statement of material fact or to omit a material fact id such omission causes the statement to be misleading

Mutual fund

A specific type of of investment company that continually buys or sells to investors shares of ownership in a portfolio

Some agreements are so blatantly and substantially anticompetitive that they are deemed illegal per se under Section 1 of the Sherman Act. Which of the following is not a per se violation?

A trade association.

Investment Contract

A transactions in which a person invest in a common enterprise reasonably expecting profits that are derived primarily from the efforts of others

Livestock Feedlot orders one hundred sacks of cattle feed from MegaNutrient Feed, Inc. Each sack is stamped with the phrase, "twenty percent protein." This is A. An express warranty. B. An implied warranty C. A warranty of title. D. Puffery

A. An express warranty.

Riverside Ranch is a horse breeding facility. Steed Stables is a customer looking for a new stallion for its breeding program. Riverside's representative Thomas shows Steed a stallion that he says is very fertile and can easily breed twenty mares per year. This statement is A. An express warranty. B. An implied warranty. C. A warranty of title. D. Puffery.

A. An express warranty.

Fuel Connector Products, Inc., agrees to sell Go-Flo, Inc., a certain quantity of hose couplings and fittings, but the contract does not specify a place of delivery. Go-Flo is expected to pick up the goods. The place of delivery is A. Fuel Connector's place of business. B. Go-Flo's place of business. C. The current location of the holes couplings and fittings. D. The U.S. Postal Service office nearest to Go-Flo's place of business.

A. Fuel Connector's place of business

Arnold buys a backbone from Big Dig Equipment Inc. Arnold is unaware that Credit Collection Company hold a lien against the backhoe when he buys it. If Credit Collection repossesses the backhoe, Arnold can A. Recover from Big Dig for breach of warranty. B. Do nothing. C. File criminal charges against Big Dig and Credit Collection. D. Recover damages from Credit Collection for breach of warranty.

A. Recover from Big Data for breach of warranty.

Trucks & Trailers, Inc. (T&T), and United Delivery Service enter into a contract for a lease of trucks. T&T is a merchant who deals in goods of the kind leased. Under the UCC, an implied warranty of merchantability arises A. Automatically B. Only if the lessee asks for such a warranty C. Only if the lessor expresses such a warranty

A. automatically

Sweet Fruits contracts with Fruits to You Inc. for delivery of two hundred pounds of strawberries to be delivered by Keep Kool Trucking, a trucking company with refrigerated. On the day of delivery, the refrigeration units on Keep Kool's trucks are not working. Fruits to you A. May ship the goods to Sweet Fruits using another trucking company with refrigerated trucks. B. Must refund Sweet Fruits' money and cancel the contract. C. Must wait to ship the strawberries until Keep Kool has fixed its trucks D. Must ship the good through a different carrier and pay Sweet Fruits incidental damages.

A. may ship the goods to Sweet Fruits using another trucking company with refrigerated trucks

specific performance

Ambrose enters into a contract to buy 350 acres from Belle Vista Farms to cultivate grapes and open a winery. If Ambrose breaches the contract, Belle Vista's remedy would most likely be

Free-writing prospectus

Any type of written, electronic, or graphic offer of securities that describes the issuing corporation or its securities and includes a legend indicating that the investor may obtain the prospectus from the SEC's website

40. Cash is an employee of drowsy resort, inc., covered by federal overtime provisions, which apply only after an employee has worked more than A. Eight hours in a day. B. Forty hours in a week. C. 160 hours in a month. D. One year for the same employer.

41. Mythic games company employs two hundred workers full-time. If mythic games plans to have a mass layoff, it must provide its employees with at least A. Thirty days of notice. B. Sixty days of notice. C. Ninety days of notice. D. One year of notice.

42. Café cuisine dining, inc., employs one hundred workers at three locations in two states. Under federal law, café cuisine must provide its employees, during any twelve-month period, family or medical leave of up to A. Twelve days. B. Twelve weeks. C. Twelve months. D. Twelve years.

45. Jo works for tall tales publishing, inc. The basis for jo's contribution under the federal insurance contribution act (fica) is based on her A. Seniority at tall tales. B. Annual wage base. C. Special job skills. D. County of residence.

50. Which of the following is not a common form of electronic surveillance of employees in the workplace? A. Reviewing employees' emails B. Requiring employees to wear electronic location monitoring bracelets C. Video-recording job performance D. Listening to employees' telephone conversations

52. Network industries, inc., wants to monitor its employees' electronic communications. To avoid liability under laws related to employee monitoring, network should announce the monitoring to A. No one. B. The employees. C. The government. D. The public generally.

Celfone Company is required to file a registration statement with the Securities and Exchange Commission. This statement must contain a. a copy of prospectuses to be provided to investors. b. a description of securities being offered for sale. c. a record of pre-registration sales in securities. d. a sample of advertising to be used to attract investments in Celfone.

Dee, an accountant, does not work for Emergent Company, but wrong¬fully obtains inside information concerning Emergent. Based on the in¬forma¬tion, Dee buys and sells Emergent stock for personal gain. The Securities and Exchange Commission prose¬cutes Dee, arguing that she is liable because she stole in¬formation right¬fully belonging to another. This argument is a. the blue-sky theory. b. the misappropriation theory. c. the red-herring theory. d. the tipper/tippee theory.

Della, an officer for Energy Petrol Corporation (EPC), buys 100 shares of EPC stock. One week later, EPC announces that it will merge with a competitor, Fuel Oil Company, and the price of EPC stock increases. One month later, Della sells her shares for a profit. Under Section 16(b) of the Securities Exchange Act of 1934, Della would not be liable if, after buying the stock, she had waited a. less than fourteen days to sell it. b. more than six months to sell it. c. ninety days to sell it. d. two months to sell it.

Foamy Soap Corporation is a public company whose shares are traded in the public securities markets. The Securities Act of 1933 provides that, unless exempt, all of Foamy's securities transactions must be a. conducted through national stock exchanges. b. registered with the Securities and Exchange Commission. c. subjected to surveillance to deter undesirable practices. d. accredited by sophisticated investors.

Riley, an engineer for Shur-2-Gro Seed Corporation, learns that Shur-2-Gro has developed a corn hybrid to triple the output of any farm. Riley buys 20,000 shares of Shur-2-Gro stock. He tells Tess, who buys 15,000 shares. After the new hybrid is announced publicly, the price of Shur-2-Gro stock in-creases. Riley and Tess sell their shares for a profit. Under the Securities Exchange Act of 1934, liability may be imposed on a. none of these parties. b. Riley and Tess only. c. Riley only. d. Riley, Shur-2-Gro, and Tess.

To raise $12 million to expand operations, Star Corporation makes a stock offering directly to sixty accredited investors and twenty sophisticated, but unaccredited investors. Star plans to notify the SEC of sales. Under the Securities Act of 1933, this issue may qualify as an "exempt" transaction a. as is. b. if all of the investors are also given certain material information. c. if the offering is also made available to the general public. d. under no circumstances.

Big Beef, Inc. raises calves to sel. Big Beef breeds its cows in April, and the cows calve in February of the following year. In January Andrea contracts with Big Beef to buy fifty calves. Identification takes place in A. January, when the contract is signed. B. April, when the calves are conceived. C. February, when the calves are born. D. A reasonable period of time.

B. April, when the calves are conceived

On July 10th, Pet Supply Store orders fifty small dog collars from Quality Collars, Inc. to be delivered by July 15. On July 13, Quality Collars tenders fifty large dog collars. Pet Supply rejects the shipment. Quality Collars has A. No right to cure. B. Until July 15 to cure. C. Until the end of the business day on July 13 to cure. D. Unlimited time to cure.

B. Until July 15 to cure

a legal entity apart from the owners.

Bee Hive Honey, LLC's members include Chad, Dolores, and others. Forpurposes of suing and being sued, Bee Hive Honey is

37. Marvin is an employee of wild thing farms. Marvin finds out that the head of wild thing farms is illegally importing endangered animals to sell as pets. If marvin reports his employer's illegal activities he will probably be protected from retaliatory discharge by A. Unemployment statutes. B. Worker compensation statutes. C. Whistleblower statutes. D. No statutes.

38. Thelma is an employee at foreign food mart. Thelma is called for jury duty and as a result cannot work her scheduled shift at foreign food mart. Foreign food mart fires thelma. This is a violation of A. An example of the doctrine. B. An exception based on contract theory. C. An exception based on public policy. D. An exception based on tort theory.

44. Quinn is an employee of regional industries, inc. Quinn is threatened with a discharge when he refuses a transfer to a regional department in which several employees suffered serious injuries from exposure to hazardous chemicals. Quinn may be entitled to protection from discharge under A. No law. B. The family and medical leave act. C. The occupational safety and health act. D. The state workers' compensation act.

46. Hoppy, who works as an employee for imperial power corporation, suffers an injury in an accident. Hoppy will be compensated under state workers' compensation laws A. Only if the injury occurred during working hours. B. Only if the injury occurred off the job. C. Only if the injury occurred on the job. D. Whenever and wherever the injury occurred.

47. Clive works for digby excavation corporation. While operating a backhoe, clive suffers an injury. Clive will be compensated under state workers' compensation laws only if A. He does not have health insurance. B. He is completely disabled. C. His injury was accidental. D. His injury was intentional.

49. Julie works as an employee for organic produce express, inc. (opi). Rowan, who is unemployed, collects unemployment compensation. This compensation is provided by a tax on A. Julie and other employees. B. Julie, opi, and other employees and employers. C. Opi and other employers. D. Not julie, opi, or other employees or employers.

53. Samson is a government employee. Samson is limited in drug testing by the A. First amendment. B. Second amendment. C. Fourth amendment. D. Eighth amendment.

Auto Parts & Products Corporation is a public company whose shares are traded in the public securities markets. The purpose of the Securities Act of 1933 is to a. impose new responsibilities on chief corporate executives. b. prevent insiders from trading among themselves. c. require disclosure of all essential information concerning the issuance of securities. d. provide a "safe harbor" for companies that make forward-looking statements.

Dhani, an accountant for Eureka, Inc., learns of undisclosed com¬pany plan¬s to market a new laptop. Dhani buys 1,000 shares of Eureka stock. He re¬veals the company plans to Fay, who buys 500 shares. Fay tells Geoff, who tells Hu. Both Geoff and Hu buy 100 shares. They know that Fay got her informa¬tion from Dhani. When Eureka publicly an¬nounces its new laptop, Dhani, Fay, Geoff, and Hu sell their stock for a profit. Refer to Fact Pattern 20-3. If Dhani is liable under the Securities Ex¬change Act of 1934, it will be because the infor¬mation on which he based his purchase of Eureka stock was a. a forward-looking forecast. b. not material. c. not yet public. d. not yet true.

Fresh Cream, Inc., wants to make an initial public offering of securi¬ties. Fresh believes that it qualifies for an exemption under Regulation A from the full registration requirement of the federal Securities Act of 1933. Refer to Fact Pattern 20-1. If Fresh is exempt from the federal registration requirement, Fresh is a. automatically exempt from any state registration requirement. b. not subject to any state securities laws. c. not necessarily exempt under a state registration requirement. d. automatically subject to all state registration requirements.

Fresh Seasonal Fruit Company has assets of less than $10 million and fewer than fifty shareholders. Gourmand Pastries, Inc., has assets of more than $50 mil¬lion and more than five hundred shareholders. The Securities Exchange Act of 1934 applies to a. Fresh Seasonal Fruit and Gourmand Pastries. b. Fresh Seasonal Fruit only. c. Gourmand Pastries only. d. neither Fresh Seasonal Fruit nor Gourmand Pastries.

Lexy, a salesperson for My-T-Fine Corporation, learns that My-T-Fine will in¬crease the dividend it pays to shareholders. Lexy buys 10,000 shares of My-T-Fine stock. When the price increases, Lexy sells the 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.

North American Properties, Inc., and its officers, directors, and share-holders, buy and sell securities. Section 16(b) of the Securities Exchange Act of 1934 covers a. all purchases and sales of securities. b. only purchases and sales of securities involving misappropriation. c. only purchases and sales of securities involving short-swing profits. d. only purchases and sales of securities involving tippers and tippees.

Sid, a director of Tech Software Company, learns that a Tech engineer has developed a new, exciting video game. Sid buys Tech stock and tells his friend Uri, who also buys Tech stock. When the new game is released three weeks later, Sid and Uri sell their stock for a big profit. Refer to Fact Pattern 20-2. Under SEC Rule l0b-5, Sid would not be li¬able if he had waited to buy Tech stock until a. after Sid told Uri of the new game. b. after Uri bought Tech stock. c. after the public release of the game. d. just before the game was released.

Squeaky Clean Corporation wants to make an offering of securities to the pub¬lic. This offering is not exempt from registration under the Se¬curities Act of 1933. Before Squeaky sells its securities, it must provide in¬vestors with a. a forward-looking financial forecast. b. an investment contract. c. a prospectus. d. samples of its products.

Outdoor Outfitters Store contracts to buy fifty tents from Pitched Camp, Inc. Unless the contract states otherwise, it is assumed to be A. None of the choices. B. A destination contract. C. A shipment contract. D. A delivery ex-ship.

C. A shipment contract

8. Employees who receive tips on the job cannot be paid less in direct wages than the federal minimum wage. A. True B. False

Ferris is refinishing his kitchen floor and need a floor sander to complete the job. Ferris's neighbor Gerda suggests that he call Home Repair Rentals, Inc. Home Repair leases Ferris a floor sander. In this transaction, the lessor is A. Ferris. B. Gerda. C. Home Repair. D. None of these parties.

C. Home Repair

Shane's Auto Parts orders twenty tires from Tough Tires, Inc. The truck delivering the tires to Shane's is in an accident and ten of the tires are damaged. Shane's Auto Parts A. Cannot reject the entire shipment. B. Must still pay for all twenty tires at the original contract price C. May inspect the tires and accept the shipment with a reduction in price. D. Must reject the entire shipment

C. May inspect the tires and accept the shipment with a reduction in price

Megan, an agent for a department store, orders one hundred dresses from Sal's Clothing Shop for the Spring Blossom Sale. There's no specific agreement in the sale contract indicating when title will pass to the department store. The title will pass to the department store when A. Megan signs the contract B. Megan and the Sal's Clothing Shop agent sign the contract. C. Sal's Clothing Shop physically delivers the dresses to the department store. D. Megan pays Sal's Clothing Shop for the dresses.

C. Sal's Clothing Shop physically delivers the dresses to the department store

twelve weeks

Café Cuisine Dining, Inc., employs one hundred workers at three locations in two states. Under federal law, Café Cuisine must provide its employees, during any twelve-month period, family or medical leave of up to...

all of the states, in whole or in part.

Canyon Creek Corporation is a Delaware-based firm that does business throughout the United States. With respect to this circumstance, the UCC has been adopted by, and applies in,

forty hours in a week

Cash is an employee of Drowsy Resort, Inc., covered by federal overtime provisions, which apply only after an employee has worked more than...

none of the choices.

no federal or state law

Clerical Workers Union represents the employees of Miracle Medical Research Company. The management of the firm refuses to bargain with the union over the hiring of unnecessary workers. This violates...

his injury was accidental

Clive works for Digby Excavation Corporation. While operating a backhoe, Clive suffers an injury. Clive will be compensated under state workers' compensation laws only if...

at least one member.

Coco is considering forms of business organization for her concessions business—Coco's Cakes. Most states require that a limited liability company have

conform to the contract description in every way.

Commercial Leasing Corporation and Quarry Construction Company enter into a contract for a lease of three excavators. Under the perfect tender rule, Commercial Leasing must ship or tender goods to the lessee that

if the buyer is relying on the seller to select suitable goods.

Construction Products Company and Dante enter into a contract for a sale of bricks and stones. Construction Products knows the purpose for which Dante will use the goods. Under the UCC, an implied warranty of fitness of a particular purpose arises

a partnership

Custom Auto Body & Detailing, LLC, is a limited liability company. Unless indicated otherwise on the Custom Auto's federal tax form, the firm will be taxed as

43. Big drill oil company employees one hundred workers. Big drill must do all of the following except A. Keep occupational injury and illness records for each employee. B. Report any work-related diseases directly to osha. C. Report any employee death due to a work-related incident to osha within eight hours. D. Pay employees higher wages for working in more dangerous areas.

48. Phyllis intentionally injures herself while performing her job for stone cutters, inc. Phyllis will be entitled to A. Full workers' compensations. B. Half of the normal workers' compensation. C. 10 percent of the normal workers' compensation. D. No workers' compensation.

9. Employees are entitled to overtime pay only at their employer's discretion. A. True B. False

A contract under which a seller forbids a buyer to purchase products from the seller's competitors is a tying arrangement. a. True b. False

54. The employee polygraph protection act of 1988 prohibits most private employers from doing all of the following except A. Requiring or causing employees or job applicants to take lie-detector tests. B. Using, accepting, or referring to, or asking about the results of lie-detector tests taken by employees or applicants. C. Taking or threatening negative employment-related action against employees or applicants based on results of lie-detector tests. D. Using lie-detector tests to investigate losses due to theft.

55. Nimble numbers accounting corporation, a private employer, handles bookkeeping for small employers. In most circumstances, with exceptions, federal law clearly prohibits nimble from subjecting its employees to A. Job-skills tests. B. Monitoring of business communications. C. Drug tests. D. Lie-detector tests.

56. Sunny energy company wants to genetically test its workers for potentially significant, future health problems. Sunny may A. Discharge employees who test "positive." B. Discriminate against job applicants who test "positive." C. Deny group health insurance for its employees who test "positive." D. Not make employment decisions based on genetic testing.

57. Southwestern foods corporation operates a packaging plant near the border between the united states and mexico. Due to the location, it would be easier for southwestern to employ noncitizens. With respect to persons not authorized to work in the united states, an employer can A. Hire them. B. Recruit them. C. Refer them for a fee. D. Not hire them, recruit them, or refer them for a fee.

58. Mineral mining corporation is a u.s. employer. Mineral, and other u.s. employers, must perform i-9 verifications for A. A random selection of new hires. B. Every other new hire. C. New hires with certain racial or ethnic characteristics. D. Each new hire.

60. Fruits & vegetables, inc., employs hundreds of seasonal and permanent workers, both skilled and unskilled, in seven states. Fruits & vegetables can hire illegal immigrants A. If either the employer or the immigrants file special forms. B. Only if the employer files a special form. C. Only if the immigrants file special forms. D. Under no circumstances.

Flo-Thru Corporation is poised to issue securities that, under the Securities Act of 1933, are "exempt." This means that the securities can be sold a. on the basis of a material omission or misrepresentation. b. on the basis of nonpublic information. c. within any six-month period by certain insiders. d. without being registered.

GR8 Stuf Company files a registration statement with the SEC before making an offering to the general public. The registration contains false, immaterial statements of which the investors are unaware. GR8 Stuf is charged with violating the Securities Act of 1933. GR8 Stuf's best defense is a. the investors were not aware of the misrepresentations. b. the issuer reasonably believed the misstatements were true. c. the offering was made available to the general public. d. the untrue statements were not material.

Global Investments Corporation buys and sells securities. Section 10(b) of the Securities Ex¬change Act of 1934 applies to a. only the purchase or sale of a security involving an insider. b. only the purchase or sale of a security involving short-swing profits. c. only the purchase or sale of a security involving a tipper and tippee. d. the purchase or sale of any security.

Hi-Five Aero Corporation is required to register its securities under Section 12 of the Securities Exchange Act of 1934. Section 14(a) of the act regulates a. the declaration of dividends by Hi-Five's board of directors. b. the later re-registration of Hi-Five's securities. c. the short-swing activities of Hi-Five's insiders. d. the solicitation of proxies from Hi-Five's shareholders.

Nouveau Riche Corporation's officers, directors, and sharehold¬ers buy and sell securities. SEC Rule 10b-5 applies to a. only the purchase or sale of a security by a financial corporation. b. only the purchase or sale of a security involving an officer or director. c. only the purchase or sale of a security involving a shareholder. d. the purchase or sale of any security.

Olive Grove Enterprises, Inc., completes its registration process and issues a free-writing prospectus. This tells pro¬spective investors a. about investing freely. b. how to write their own prospectus. c. that they can "freely write their own ticket" to buy Olive's securities. d. that they may obtain the prospectus at the SEC's Web site.

Players Video Game Centers, Inc., wants to issue stock of $1 million in a single offer¬ing. Players must provide all investors with material in¬forma-tion about itself, its business, and its securities if a. all investors are accredited. b. under any circumstances. c. any investors are accredited. d. any investors are unaccredited.

Readmore Bookstore Corporation files a registration statement with the Securities and Exchange Commission 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.

Nature's Products, Inc., sends it standard order form to Omni Distribution Corporation to evidence a sale of packing materials. Omni responds with its own standard purchase order form. Additional terms in the purchase order automatically become part of the contract unless A. The terms materially alter the original contract. B. The original offer expressly required acceptance of its terms. C. The offeror objects to the new terms within a reasonable time. D. Any of these choices.

D. Any of these choices

Chord Guitars Inc. sells guitars and other stringed instruments to consumers. A Chord salesperson says to a potential customer, "This Chord is the best guitar you'll find anywhere, even online. "This statement is A. An implied warranty of fitness for a particular purpose. B. An implied warranty of merchantability. C. An express warranty. D. None of the choices.

D. None of the choices

Quaff n' Quench Café buys twenty-five bags of Columbia coffee beans from Roasted Bean Brokers, Inc. The parties agree to ship the oranges not in transit. The loss is suffered by A. Quaff n' Quench. B. Swiftline. C. Columbia D. Roasted Bean

D. Roasted Bean

A group boycott that is intended to eliminate competition is legal. a. True b. False

Toro, S.A., which is based in Mexico, enters into a contract for the purchase of portable livestock fencing from the United States. This contract is governed by A. Mexican law. B. The provisions in the laws of both countries that are similar. C. The Uniform Commercial Code. D. The United States Nations Convention on Contracts for the International Sale of Goods

D. The United States Nations Convention on Contracts for the International Sale of Goods

bargain collectively with eagle through their reps

Dag is an employee of Ridge Mining Company. Under federal labor law, Dag and other employees have the right to...

the loss of profit from the canceled game

Damon contracts to repair the turf on a soccer field for Carousel Sports Park. Damon knows that without the repair, Carousel will have to cancel an upcoming game. Damon does not perform as promised. As consequential damages, Carousel can recover

No federal law

During a union election campaign, Autowerks Repair, Inc., prohibits on-site solicitations by any party, including Mechanics Union, which is seeking the workers' unionization. This violates...

federal labor law

During a union election campaign, Sapphire Blue Finance Company prohibits on-site solicitations by Credit Workers Union, which is seeking the workers' unionization, while permitting charities to solicit the same workers. This violates...

the labor-management reporting discolsure act

Elections for union officers are regulated by...

the national labor relations act

Employers are not allowed to interfere with employees' efforts to form or join a union under...

Nothing more

Even-Bilt Construction contracts to build a warehouse for Discount E-Sales Company. Even-Bilt completely performs. Discount E-Sales is entitled to

An agreement under which a seller forbids a buyer to purchase products from the seller's competitors.

Exclusive Dealing Contract

10. All employers must provide their employees with up to twelve months of family or medical leave. A. True B. False

11. Under federal law, only key employees who take temporary family or medical leave are entitled to job reinstatement. A. True B. False

13. State workers' compensation laws establish a procedure for employees injured on the job to sue their employers. A. True B. False

15. Only the federal government sets safety standards governing workplaces. A. True B. False

16. An employee can usually recover workers' compensation for injuries occurring on the commute to and from work. A. True B. False

18. The basis for an employee's contribution to social security is the employee's age. A. True B. False

2. A promise that an employer makes in an employee handbook regarding discharge will not be considered part of an implied contract. A. True B. False

22. An employee can continue the health benefits provided by his or her employer for a period of time only on an involuntary loss of employment. A. True B. False

25. Only federal law governs drug tests of private-sector employees. A. True B. False

27. Federal law does not restrict employers' use of the results of genetics tests. A. True B. False

31. Unfair labor practices are defined by the norris-laguardia act. A. True B. False

32. An employer can refuse to bargain collectively with a duly designated employee representative. A. True B. False

33. Individual states may pass their own right-to-work laws. A. True B. False

35. An employer may not hire substitute workers to replace strikers. A. True B. False

4. A whistleblower is an employee who reveals confidential information about a fellow employee to an employer. A. True B. False

6. Whistleblower statutes protect employers who report their employees' wrongdoing. A. True B. False

7. Children must be at least thirteen years old to work in hazardous occupations. A. True B. False

Against a charge of a violation of the Securities Act of 1933, only an issuer of stock can assert the due diligence defense.

F, a defendant can avoid liability by proving: 1. statement or omission was not material 2.plaintiff knew about the misrepresentation at the time of purchase 3. defendant exercised due diligence in preparing the registration and reasonable believed that the statements were true and there was no ommission of material facts

Sales of securities must occur within five days of registration.

F, after registration there is a pre-filing period which must last at least 20 days then a waiting period

Willful violations of the Securities Act of 1933 may be subject to civil liability, but not criminal prosecution.

F, civil and criminal liabilities with hold. liability is also imposed on those who are negligent for not discovering the fraud.

"Blue sky laws" regulate securities data stored in cloud computing servers.

F, each state has 'blue sky laws' which operate within each states boarder

Only outsiders who would ordinarily be deemed fiduciaries of the corporations in whose stock they trade can be liable for insider trading.

F, everyone can including employees

A corporation whose security does not qualify for an exemption can avoid the cost and complexity associated with registration.

F, exempt securities are very broad and cane able an issuer to avoid the high cost and complicated procedures associated with registration

"Forward-looking" financial forecasts are prohibited under SEC Rule 10b-5.

F, future financial information that is predicted may not always be correct. cannot mislead shareholders to buy your stock when value isn't there

Corporate governance can be defined as the relationship between a corporation and its directors.

F, how a corporation is owned and operated

Section 10(b) of the Securities Exchange Act of 1934 covers only corpo¬rate officers and di¬rectors.

F, insider trading and misappropriation theory

Before filing a registration statement, an issuer must offer to sell securities.

F, it does not become effective until it is reviewed by SEC unless it is a a well known seasoned issuer (WKSI)

Few securities can be resold without registration.

F, most are re-sold without

Generally, federal se¬curities laws are patterned after states' antifraud laws.

F, patterned after section 10(b) of securities exchange act of 1934

Buying or selling securities on the basis of nonpublic information is illegal only if the profit from the transaction is unreasonable.

F, there is always benefit from trading with nonpublic information.

Securities of nonprofit, educational, and charitable organizations are not exempt from the registration requirement of the 1933 Securities Act.

F, they are exempt as well as government issued securities, bank and financial institution securities, short term notes and drafts (that have a maturity date not exceeding nine months), securitites issued by common carriers (trucking/railroad companies), any iinsurance collected by a state insurance company, securities issued in stock dividends or splits

Any corporation with less than $10 million in assets and fewer than five hundred shareholders must register their securities with the Securi¬ties and Exchange Commission.

F, you do not have to for small companies

A bill of lading is a receipt signed by a warehouse for good stored in a warehouse T/F

False

A buyer who rightfully rejects nonconforming goods may obtain cover or cancel the contract, but may not seek damages. T/F

False

A buyer's failure to cover will bar him or her from using any other remedies available under the UCC. T/F

False

A contract for a sale of real property or services is a contract for a sale of goods. T/F

False

A limited partner has every right to participate in the management and operation of a limited partnership.

False

A partner who pursues his or her own interest automatically violates his or her fiduciary duties to the partnership.

False

A partnership ends if one partner dissociates from the firm.

False

A sharing of profits from the ownership of property is enough to create a partnership.

False

A sole proprietor must create a separate business organization to create a sole proprietorship.

False

An S corporation is treated the same as a regular corporation for tax purposes

False

An agreement that is deemed a per se violation will be examined by a court to determine whether the agreement actually constitutes a reasonable restraint of trade. a. True b. False

False

An expression of opinion will usually create a warranty. T/F

False

State Municipal Foreign Federal courts have exclusive jurisdiction over antitrust cases brought under the Sherman Act.

Federal

federal labor law

Finance Professionals Union represents the workers of Business & Commerce Banking Corporation. The management of the firm refuses to bargain with the union. This violates...

Esmeralda promises to pay Fiorello $400 becuase he does not have as much mony as other people, Esmeraldas promise is not enforceable because

Fiorello has not given consideration in return

no federal law

Following a union election campaign by Service Employees International Union among the employees of Quality Hotels & Resorts, Inc., the union does not obtain a majority vote in the election. This most likely violates...

no federal law

Food Packagers Union represents the workers of Garden Variety, Inc. The company does not require its workers to join the union as a prerequisite to obtaining employment. The union would like the employer to require the workers to join after a specified amount of time on the job. This would violate...

Charlie is the founder of Dream Job Apps Corporation. Eloise is a shareholder and director, and Francie is an officer. The day-to-day business operations of Dream Job Apps are overseen by

Francie

rescind the contract of the basis of fraud

Garland induces Jules to enter into a contract for the purchase of a Chef's Burger House restaurant. Garland knowingly misrepresents a number of material features about the restaurant and the business. When Jules discovers the truth, he can

There is no contract

Garth owns two all-terrain vehicles (ATVs), worth $1,000 and $500, respectively. Helen agrees to buy "Garth's ATV" for $750. Garth believes, in good faith, that he is selling the $500 ATV. Helen believes, in good faith, that she is buying the $1,000 ATV. In this situation

Dissolution

Gizelle, Haya, and Ivy do business as Janitorial Services, Limited Partnership. After Gizelle's relationship to the firm ends, Haya and Ivy agree not to continue the business. This is

Fresh Fruit Company has assets of less than $10 million and fewer than fifty shareholders. Gourmand Pastries, Inc., has assets of more than $50 mil-lion and more than five hundred shareholders. The Securities Exchange Act of 1934 applies to

Gourmand Pastries only.

The refusal to deal with a particular person or firm by a group of competitors; prohibited by the Sherman Act

Group Boycott

only if the injury occurred on the job

Hoppy, who works as an employee for Imperial Power Corporation, suffers an injury in an accident. Hoppy will be compensated under state workers' compensation laws...

A merger between two firms that are competing in the same market.

Horizontal Mergers

the employer

Hu, Ivan, and Juana apply to work for King Meatpacking Company. These individuals' identities and eligibility to work must be verified by...

Joy only

Hugh is a limited partner and Ida is a general partner in HI Volume, a limited partnership. Joy is one of HI Volume's creditors. On HI Volume's dissolution, the party whose rights have the first priority to the firm's assets is

resell the goods and recover any damages from Inflo.

Hydro Source Company contracts to sell pumps, tanks, and water storage systems to Inflo Irrigation, Inc. Before the goods are delivered, Inflo indicates that it will not be able to pay. Hydro Source can

each new hire

Mineral Mining Corporation is a U.S. employer. Mineral, and other U.S. employers, must perform I-9 verifications for...

A term generally used to describe a market in which there is a single seller or a limited number of sellers.

Monopoly

The ability of a monopoly to dictate what prices and quantities offered in a given market.

Monopoly Power

sixty days of notice

Mythic Games Company employs two hundred workers full-time. If Mythic Games plans to have a mass layoff, it must provide its employees with at least...

the employees

Network Industries, Inc., wants to monitor its employees' electronic communications. To avoid liability under laws related to employee monitoring, Network should announce the monitoring to...

participate in the firm's management

Nikki and Orlando are limited partners in Port City Exports, a limited partnership. To avoid personal liability for partnership obligations, they must not

lie-detector tests

Nimble Numbers Accounting Corporation, a private employer, handles bookkeeping for small employers. In most circumstances, with exceptions, federal law clearly prohibits Nimble from subjecting its employees to...

specific performance

Nonny agrees to buy a unique collection of Olympics memorabilia for $7,000 from Piper and sends $1,500 as a down payment. When Nonny sends Piper the rest of the price, she refuses to ship the collection. Nonny should seek

until July 15 to cure.

On July 10, Pet Supply Store orders fifty small dog collars from Quality Collars, Inc. to be delivered by July 15. On July 13, Quality Collars tenders fifty large dog collars. Pet Supply rejects the shipment. Quality Collars has

articles of organization

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

Wild & Scenic River Tours, Inc., is a corporation. Wild & Scenic has the implied power to

PERFORM ALL ACTS REASONABLY appropriate and necessary to accomplish its corporate purposes

A type of anticompetitive agreement—such as a horizontal price-fixing agreement—that is considered to be so injurious to the public that there is no need to determine whether it actually injures market competition; rather, it is in itself (per se) a violation of the Sherman Act.

Per se Violation

no workers' compensation

Phyllis intentionally injures herself while performing her job for Stone Cutters, Inc. Phyllis will be entitled to...

the contract price and the market price.

Precious Stones, Inc., and Sparkling Jewelry stores enter into a contract for a sale of gemstones. Precious Stones does not deliver. The buyer can normally recover as damages the difference between

Setting prices in such a way that two competing buyers pay two different prices for an identical product or service.

Price Discrimination

An agreement between competitors in which the competitors agree to fix the prices of products or services at a certain level; prohibited by the Sherman Act.

Price-fixing agreement

determine a reasonable price.

Quality Metals Company and Superior Fabrication, Inc., enter into a contract under which Quality Metals agrees to deliver a certain quantity of sheet metal to Superior Fabrication each month. The contract does not include a price term. In a suit between the parties over the price, a court will

the occupational safety and health act

Quinn is an employee of Regional Industries, Inc. Quinn is threatened with a discharge when he refuses a transfer to a Regional department in which several employees suffered serious injuries from exposure to hazardous chemicals. Quinn may be entitled to protection from discharge under...

An agreement between a manufacturer and a retailer in which the manufacturer specifies the minimum retail price of its products. Resale price maintenance agreements are illegal per se under the Sherman Act.

Resale Price Maintenance Agreement

Any contract or combination that tends to eliminate or reduce competition, effect a monopoly, artificially maintain prices, or otherwise hamper the course of trade and commerce as it would be carried on if left to the control of natural economic forces.

Restraints of Trade

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

Round-Up Ranch and Smith & Jones, Accountants, are limited liability partnerships (LLPs). The major features of an LLP are that it limits the personal liability of the partners and

A test by which a court balances the positive effects (such as economic efficiency) of an agreement against its potentially anticompetitive effects.

Rule of Reason

Ricardo is a shareholder of Speedy Bikes Company (SBC). When the directors fail to undertake an action to redress a wrong suffered by SBC, Ricardo files a suit on the firm's behalf. Any damages recovered by Ricardo's suit will normally go to

SBC

a liquidated damages clause

SFX Paintball Games, Inc., and Truck & Trailer Delivery Corporation 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

fourth amendment

Samson is a government employee. Samson is limited in drug testing by the...

.Section 2 Section 7 Section 9 Section of the Clayton Act prohibits price discrimination.

Section 2

XXXX of the Clayton Act prohibits exclusive-dealing contracts when they substantially lessen competition or tend to create a monopoly. Section 2 Section 3 Section 7 Section 9

Section 3

XXXX of the Clayton Act is the statutory authority for preventing mergers that could result in monopoly power. Section 2 Section 3 Section 7 Section 9

Section 7

XXXX of the Clayton Act deals with interlocking directorates. Section 2 Section 3 Section 6 Section 7 Section 8

Section 8

The first major federal law intended to prevent monopolies was the XXXX.

Sherman Antitrust Act.

The most famous trust in the late 1800s was the Union Pacific Railroad Trust Farmington Oil Trust Standard Oil Trust Chevron Oil Trust.

Standard Oil Trust

divided equally among the members

StartUp Investors, 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

Blue Sky Laws

State laws that regulate the offer and sale of securities

not make employment decisions based on genetic testing

Sunny Energy Company wants to genetically test its workers for potentially significant, future health problems. Sunny may...

1. Under the employment-at-will doctrine, an employer can end an employment relationship at any time. A. True B. False

12. A key employee is defined as an employee whose pay falls within the top 10 percent of the firm's workforce. A. True B. False

14. If an employee dies in a work-related incident, the employer must notify osha within eight hours. A. True B. False

Directors have a right to participate in all board of directors' meetings.

True

assumption of risk.

The brakes on Dirk's Tour de Valle bicycle malfunction, but he continues to ride it because he likes the thrill of the unstoppable acceleration. One night, enjoying a fast downhill pace, he speeds through a stop sign and is struck by a truck. In Dirk's suit against Tour de Valle, the bike maker can raise the defense of

the strikers form a picket line

The employee union at Top Tech Toys decides to go on strike. Their strike will be legal if...

Insider trading

The purchase or sale of of securities on the basis of "inside information" (information that has not been made available to the public) in violation of a duty owned to the company whose stock is being traded

Corporate Governance

The relationship between a corporation and its shareholders-- specifically, a system that details the distributions of rights and responsibilities if those within the corporation and spells out the rules and procedures for making corporate decisions

an exceptioin based on public policy

Thelma is an employee at Foreign Food Mart. Thelma is called for jury duty and as a result cannot work her scheduled shift at Foreign Food Mart. Foreign Food Mart fires Thelma. This is a violation of...

automatically

A director must make a full disclosure of any potential conflict of interest that might arise in any corporate transaction.

True

A director or officer is not liable to the corporation for a bad business decision.

True

A dominant market share may be the result of good business judgment or the development of a superior product. True False

True

A limited liability company is operated in compliance with state law.

True

A market division by class of customer between rival firms violates antitrust law

True

A sole proprietor may own and manage any type of business.

True

A warranty of good title means that a seller warrants that he or she has valid title to the goods and that transfer of the title is rightful. T/F

True

Any conspiracy in violation of Section 1 of the Sherman Act that has a substantial affect on U.S. commerce, no matter where in the world it occurs, is within the reach of the Sherman Act. True False

True

As a general rule, the validity of a provision permitting the franchisor to establish and enforce certain quality standards is questionable.

True

Before shareholders can bring a derivative suit, they must submit a written demand to the corporation, asking the board of directors to take action.

True

Bonds represent the borrowing of funds by firms.

True

A situation that exists when a small number of firms share the market for a particular good or service.

Vertical Mergers

The acquisition by a company at one stage of production of a company at a higher or lower stage of production (such as its supplier or retailer).

Vertical Mergers

Any restraint of trade created by agreements between firms at different levels in the manufacturing and distribution process.

Vertical Restraint

A firm that carries out two or more functional phases—such as manufacture, distribution, retailing—of a product.

Vertically Integrated Firms

requiring employees to wear electronic location monitoring bracelets

Which of the following is not a common form of electronic surveillance of employees in the workplace?

workbilt's liability for damages

Workbilt Hardware Company employs workers, including Gina, at six locations in two states. Workbilt's discharge of Gina outside the terms of an employment contract may result in...

A court deems an agreement between Silver Saddles Saddlery and Time Tested Tack, Inc. to be a per se violation of the Sherman Act. The court is a. prevented from determining whether the agreement's benefits outweigh its anticompetitive effects. b. required to unanimously decide whether the agreement's benefits outweigh its anticompetitive effects. c. required to apply the rule of reason. d. required to issue a formal complaint against Silver Saddles and Time Tested Tack.

A suit is filed against Dormroom Furniture Unlimited, Inc., alleging that the firm has committed the offense of monopolization. To determine whether Dormroom has committed this offense, the court will consider the extent of Dormroom's market power and a. how Dormroom acquired its power. b. how Dormroom makes its products. c. Dormroom's customers. d. Dormroom's suppliers.

A unilateral refusal to deal can violate antitrust laws if the refusal a. is likely to have an anticompetitive effect on a particular market. b. results in lower prices for consumers. c. provides no economic benefits for consumers. d. is likely to increase competition.

An antitrust action is brought against Tri-State Transport Company, alleging the offense of attempted monopolization. To be guilty of this offense, Tri-State's attempt must have a. a dangerous probability of success. b. a deadly guaranty of success. c. a distant possibility of success. d. a distinct improbability of success.

Big U.S. Oil Company joins with a foreign cartel to control the price of oil. If the cartel has a substantial effect on U.S. commerce a. both Big U.S. Oil and the foreign cartel can be sued for violation of U.S. antitrust laws. b. neither Big U.S. Oil nor the foreign cartel can be sued for violation of U.S. antitrust laws. c. only Big U.S. Oil can be sued for violation of U.S. antitrust laws. d. only the foreign cartel can be sued for violation of U.S. antitrust laws .

City Manufacturing Corporation conditions shipments of its products to Exurb Stores, Inc., on Exurb's agreement not to buy products from Regional Works Company, City's competitor. This is a. an exclusive-dealing contract. b. a tying arrangement. c. price discrimination. d. a unilateral refusal to deal.

Edgy Engine Components, Inc., a maker of vehicle parts, refuses to sell to Fidgety Fix-It, Inc., a national vehicle service firm. Edgy Engine convinces Greasy Motor Parts Company, a competitor, to do the same. This is a. a group boycott. b. a market division. c. a joint venture. d. an exclusive-dealing contract.

Gourmet Foods, Inc., requires all distributors of its products to sell them at a specified minimum price. Under the Sherman Act, this is a violation a. if the anticompetitive effects outweigh the competitive benefits. b. if the competitive benefits outweigh the anticompetitive effects. c. under any circumstances. d. under no circumstances.

The registered agent is the person who can receive legal punishment (such as fines and imprisonment) on behalf of the corporation. a. True b. False

b. False

. SFX Paintball Games, Inc., and Truck & Trailer Delivery Corporation 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 liquidated damages clause.

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

a market division

Business Computer Solutions Education Service enters into a contract to employ Chandra as an instructor for two years to begin June 1. One month before the term begins, Business Computer is underbid by a competitor and loses a major client, Debt Consolidation Corporation. Business Computer now refuses to hire Chandra. Business Computer's repudiation of its contract to employ Chandra is most likely

a material breach.

Drainage & Irrigation Equipment, Inc., contracts to sell its assets to Earth & Sky Aquatic Corpo-ration. Before either party has performed, rescission of this con-tract requires

a mutual agreement to rescind

Gliding Light, LLC, and Hang Gliders, Inc., are parties to a contract. They subse-quently 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 novation

Niki owns O.K. Oil Corporation. Niki uses O.K.'s funds to pay her personal expenses, creates Pure Fuel Corporation to engage in the same business as O.K., transfers O.K.'s assets to Pure Fuel, and petitions O.K. into bankruptcy. This most likely warrants

a pierce of O.K.'s corporate veil.

a prospectus.

Heidi and Ian are directors and shareholders of Globe Software, Inc. Heidi's written authorization to Ian to vote Heidi's shares at a Globe shareholders' meeting is

a proxy

Zero Sum Games Corporation has forty-three shareholders. The minimum number that must be present at a meeting for a shareholders' vote is

a quorum

Julia owns and operates Collectable Dolls without creating a separate business organization. She receives all the profits from the doll sales. Collectable Dolls is most likely a

a sole proprietorship

on monday, oshea tells patterson that she will pay patterson 100 if osheas bill processing and office are completed by friday

a unilateral contract as soon as patterson began to perform

Master Manufacturing Corporation has exclusive control over the market for its product. Under the Sherman Act, this is

a violation if it acquired this power through "anticompetitive means."

Any conspiracy—even if it occurs outside the United States—that has a substantial effect on U.S. commerce is within the reach of the Sherman Act. a. True b. False

a. True

An anti trust action is brought against Carrier Transport Company, alleging the offense of attempted monopolization. To be guilty of this offense, Carrier's attempt must have a. a dangerous probability of success. b. a deadly guaranty of success. c. a distant possibility of success. d. a distinct improbability of success.

a. a dangerous probability of success.

Pump Makers Inc. makes pumps for fire trucks and conditions shipments of its products to Quality Motors Corporation—a maker of fire trucks—on Quality's agreement to buy additional pumps only from Pump Makers. This is a. an exclusive-dealing contract. b. a tying arrangement.. c. price discrimination. d. a group boycott.

a. an exclusive-dealing contract.

Grip-All Tires, Inc., conditions the sale of one of its products on Harvey's Service Stores agreeing to buy another of Grip-All's products. This deal is legal a. depending on its purpose and the effect on competition. b. depending on production and transportation costs. c. under any circumstances. d. under no circumstances.

a. depending on its purpose and the effect on competition

Gearbox, Inc., a manufacturer of vehicle parts, refuses to sell to Motor Repair & Replace, Inc., a national vehicle service firm. Gearbox convinces Cam & Cylinder Company, a competitor, to do the same. This is a. a group boycott. b. an exclusive-dealing contract. c. a tying arrangement. d. a market division.

a. a group boycott.

Frictionless Lubricant Corporation and Grease Inc. are the principal suppliers of their product in their market. They agree that Frictionless will sell exclusively to retailers and Grease will sell exclusively to wholesalers. Under anti trust law, this market division is most likely a. a per se violation. b. a violation only if their competitors make similar deals. c. a violation only if their customers agree to honor the deal. d. not a violation.

a. a per se violation.

To establish a violation of Section 2, a plaintiff must only prove one of the elements of monopolization, either monopoly power or intent to monopolize. a. True b. False

b. False

Rugged Bikes, Inc., makes and distributes Rugged-brand bicycles and accessories to authorized dealers, including Super Sports Stores, Inc. Super Sports operates dealerships in several locations. To insulate other dealers from direct competition, Rugged Bikes imposes limits on where Super Sports can sell Rugged products. This is a. a territorial restriction. b. a resale price maintenance agreement. c. a unilateral refusal to deal. d. a price-fixing agreement.

a. a territorial restriction.

Sunrich Company can process solar energy into an inexpensive fuel for internal combustion engines. As an innovator in its market, Sunrich currently has the power to affect the price of its product. This is a. market power. b. predatory pricing. c. price discrimination. d. monopsony power.

a. market power.

a. the Clayton Act.

Jill buys a refrigerator and pays the company to have it delivered. While the contract covers both a good and a service, this transaction is likely governed by: a. Article 2 of the UCC. b. common law. c. Article 2B of the UCC. d. Article 2A of the UCC.

a. Article 2 of the UCC

Quade is an expert in twentieth-century art. Rachel visits Quade's gallery, seeking to buy artwork as an investment. Quade shows her a painting that in his opinion is by Picasso. Quade's statement is a. an express warranty. b. an implied warranty. c. an opinion. d. puffery.

a. an express warranty.

Riverside Ranch is a horse breeding facility. Steed Stables is a customer looking for a new stallion for its breeding program. Riverside's representative Tomas shows Steed a stallion that he says is very fertile and can easily breed twenty mares per year. This statement is a. an express warranty. b. an implied warranty. c. a warranty of title. d. puffery.

a. an express warranty.

A foreign corporation normally does not need a certificate of authority to sell goods or services via the Internet or by mail. a. True b. False

a. True

A well-known seasoned issuer cannot file a registration statement until after it announces a new offering. a. True b. False

a. True

Both Section 1 and Section 2 of the Sherman Act seek to curtail market practices that result in undesired monopoly pricing and output behavior. a. True b. False

a. True

For criminal sanctions to be imposed under Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5, scienter must exist. a. True b. False

a. True

Most securities can be resold without registration. a. True b. False

a. True

The more narrowly a product market is defined, the greater the chance that the plaintiff can prove a high degree of market power. a. True b. False

a. True

To prevail in an exclusive-dealing contract case, a plaintiff must present affirmative evidence that performance of the agreement will foreclose competition and harm consumers. a. True b. False

a. True

Under the Sarbanes-Oxley Act of 2002, chief financial officers must certify the accuracy of information in corporate financial statements and reports that are filed with the Securities and Exchange Commission. a. True b. False

a. True

23. 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.

Lou claims that he and Myra entered into an implied 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.

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.

Collin offers to sell to Phillip an antique chest of drawers worth more than $2,500. Phillip agrees to buy the chest and signs a contract for the purchase. The price of the chest, however, is left out of the contract. Collin and Phillip have: a. a valid contract as long as the court can determine a reasonable price at the time for delivery. b. no contract because parties cannot leave the price term out of a valid contract under the UCC. c. a valid contract, only if Phillip is able to produce evidence that Collin defrauded him. d. a valid contract, only if Collin refuses to name a price.

a. a valid contract as long as the court can determine a reasonable price at the time for delivery.

Livestock Feedlot orders one hundred sacks of cattle feed from MegaNutrient Feed, Inc. Each sack is stamped with the phrase "Twenty percent protein." This is a. an express warranty. b. an implied warranty. c. a warranty of title. d. puffery.

a. an express warranty.

Phoenix, a salesperson for Quality Fruit, Inc., shows Robert, a buyer for Sweet Home Fruit Company, samples of peaches, stating that any shipment will match the samples. This statement is a. an express warranty. b. an implied warranty. c. a warranty of title. d. puffery.

a. an express warranty.

The Securities and Exchange Commission does not regulate the content of proxy statements. a. True b. False

b. False

Riverwalk Restaurants Corporation is a noninvestment company that wants to issue stock of $3 million in a twelve-month period. Riverwalk, with less than $20 million in annual sales, qualifies as a small business issuer. Before Riverwalk sells the stock, it must provide investors with a. an offering circular b. a notice of the issue c. a red herring prospectus d. a tombstone ad

a. an offering circular

Band Instruments, Inc., sells seventy-six trombones to Community & School Band Source, Inc. To avoid liability for most implied warranties, Band Instruments should state in writing that the trombones are sold a. as is. b. by a merchant. c. in perfect condition. d. with no known defects.

a. as is.

Medical Equipment Supply Company and Natural Rehabilitation Center enter into a contract for a lease of a certain number of wheelchairs. Medical Equipment assures the lessee that it has valid title to the goods. Under the UCC, this type of title warranty arises a. automatically. b. only if the buyer asks for such a warranty. c. only if the seller expresses such a warranty. d. only if the seller actually has valid title to the goods.

a. automatically.

Replay Sports Stores and SportsPower Products, Inc., enter into a contract for a sale of trampolines. SportsPower Products is a merchant who deals in goods of the kind sold. Under the UCC, an implied warranty of merchantability arises a. automatically. b. only if the buyer asks for such a warranty. c. only if the seller expresses such a warranty. d. only in conjunction with lease contracts, not sales contracts.

a. automatically.

Trucks & Trailers, Inc. (T&T), and United Delivery Service enter into a contract for a lease of trucks. T&T is a merchant who deals in goods of the kind leased. Under the UCC, an implied warranty of merchantability arises a. automatically. b. only if the lessee asks for such a warranty. c. only if the lessor expresses such a warranty. d. only in conjunction with sales contracts, not lease contracts.

a. automatically.

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.

Vernon claims that his contract with Ulani is voidable. If their contract is voided 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.

Kylie signs a covenant not to compete as part of a sale of her ongoing medical equipment business to Lake Valley Medico, Inc., in exchange for a bonus payment. The covenant is most likely enforceable by a. both parties. b. Kylie, but not Lake Valley. c. Lake Valley, but not Kylie. d. no one.

a. both parties.

Grande Floors, Inc., and Home Decor Stores enter into a contract for a sale of carpeting. Grande Floors, a merchant who deals in goods of the kind sold, makes express warranties in connection with the sale. Under the UCC, at the time a contract is formed, an express warranty can be disclaimed or modified a. by clear, conspicuous language called to the buyer's attention. b. by implied affirmations of fact relating to the goods. c. in any way that the seller sees fit for the ordinary purpose. d. in no way.

a. by clear, conspicuous language called to the buyer's attention.

Lyman is the chief financial officer of Moneysworth Corporation, which is required to file certain financial statements with the Securities and Exchange Commission (SEC). Under the Sarbanes-Oxley Act of 2002, Lyman must personally a. certify that the statements are accurate. b. delegate the responsibility for preparing the statements. c. prepare the statements. d. deliver the statements to the appropriate SEC officer.

a. certify that the statements are accurate.

Charlotte, who is from the United States, and Pierre, who is from France, have negotiated a contract that includes a provision establishing where a dispute will be litigated, otherwise known as a: a. choice-of-forum clause. b. choice-of-law clause. c. force majeure clause. d. choice-of-language clause.

a. choice-of-forum clause.

Rita eats Salsa Caliente made and sold by Salsa Zest Corporation and becomes ill. Rita files a suit against Salsa Zest, alleging that its product was not merchantable. Merchantable food is food that is fit to eat on the basis of a. consumer expectations. b. what constitutes a perfect condition. c. its maker's intentions. d. its producer's experience.

a. consumer expectations.

Alyssa wants to purchase two large tents for use at family social events, but she doesn't have the cash necessary to buy the tents. She convinces the owner of Ajax Supplies, an outdoor equipment store, to lease the tents to her. They have created a: a. consumer lease. b. finance lease. c. utility lease. d. trade usage lease.

a. consumer lease.

Scot and Tiffany enter into an implied 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.

Thornton, who makes commercial signs, agrees over the telephone to make a sign for Mason's business for $1,000. The sign will read "Mason's Mighty Muffin Shop." After Thornton makes the sign, Mason decides that he does not want it. The contract is: a. enforceable, even though the contract was oral. b. invalid because Thornton is a merchant and the Statute of Frauds applies. c. unconscionable. d. invalid because the contract was oral.

a. enforceable, even though the contract was oral.

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.

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. d. practice their "letters of credit."

a. ensure proof of the contracts' existence.

Kibble Bites and Chow Hound, two makers of dog food, agree that Kibble Bites will sell its lamb and rice dog food in New Jersey but not in Delaware, and Chow Hound will sell its lamb and rice dog food in Delaware but not in New Jersey. Their agreement is a a. horizontal market division. b. refusal to deal. c. vertical agreement. d. resale price maintenance agreement.

a. horizontal market division.

Silicon Corporation, which controls 40 percent of the computer-chip market in the United States, merges with Micro Processors, Inc., which controls 15 per-cent of the same market. This merger is a violation a. if the result more clearly concentrates the market and makes it more difficult for potential competitors to enter the market. b. under no circumstances. c. only if the result more clearly concentrates the market. d. only if the result makes it more difficult for potential competitors to enter the market

a. if the result more clearly concentrates the market and makes it more difficult for potential competitors to enter the market.

Check My Work Tyler, who runs his business in the United States, enters into a contract with Abigail, a business owner in Australia. Tyler offers to sell factory equipment to Abigail for $30,000. Abigail responds that she will "take it, but you have to give me a warranty on top of it." Under the CISG, Tyler and Abigail have: a. no contract because of the mirror image rule. b. no contract because of the UCC. c. a contract for the factory equipment only. d. a contract for the factory equipment and the warranty.

a. no contract because of the mirror image rule.

Wonder Bread begins selling is bread at a loss by cutting its price by more than one-half in an attempt to gain a considerable market share over its competitors. Once its competitors are out of the picture, Wonder Bread raises the price of its bread by 300%. This type of action is known as a. predatory pricing. b. restraint of trade. c. price discrimination. d. monopoly.

a. predatory pricing.

A court deems an agreement between Silver Saddles Saddlery and Time Tested Tack, Inc. to be a per se violation of the Sherman Act. The court is a. prevented from determining whether the agreement's benefits outweigh its anticompetitive effects. b. required to apply the rule of reason. c. required to unanimously decide whether the agreement's benefits outweigh its anticompetitive effects. d. required to issue a formal complaint against Silver Saddles and Time Tested Tack.

a. prevented from determining whether the agreement's benefits outweigh its anticompetitive effects.

Boats & Yachts Corporation is a public company, which California regulates and in which Dorian invests. The Sarbanes-Oxley Act of 2002 introduced direct federal corporate governance requirements to a. public companies b. private investors c. state regulators d. The SEC

a. public companies

Arnold buys a backhoe from Big Dig Equipment Inc. Arnold is unaware that Credit Collection Company holds a lien against the backhoe when he buys it. If Credit Collection repossesses the backhoe, Arnold can a. recover from Big Dig for breach of warranty. b. do nothing. c. file criminal charges against Big Dig and Credit Collection. d. recover damages from Credit Collection for breach of warranty.

a. recover from Big Dig for breach of warranty.

Fleet Delivery Corporation is a public company with a market capitalization of less than $75 million. Fleet is poised to issue securities in a transaction that, under the Securities Act of 1933, is "exempt." This enables Fleet to a. reduce the compliance costs by not requiring an auditor report b. buy and sell the securities without liability for recaptures c. make forward-looking financial forecasts without liability d. withheld inside information from accredited investors

a. reduce the compliance costs by not requiring an auditor report

To fall under the Sherman Act, an activity must a. substantially affect interstate commerce. b. involve international trade. c. involve monopolization. d. promote competition.

a. substantially affect interstate commerce.

Watercourse Pipe Company includes in its contracts a provision that reads, in large red letters, "There are no warranties that extend beyond the description on the face hereof." This disclaimer negates a. the implied warranty of fitness for a particular purpose. b. the implied warranty of merchantability. c. the implied warranty of title. d. none of the choices.

a. the implied warranty of fitness for a particular purpose.

Marcos buys a pneumatic drill from NuTools Inc. Owen leases a table saw from Piecework Tools Sales & Lease Company. Later, Marcos and Owen become aware of defects in the goods that indicate breaches of warranty. An action for breach of warranty accrues when a. the seller or lessor tenders delivery. b. the buyer or lessee becomes aware of the breach. c. the nonbreaching party notifies the breaching party of the breach. d. four years have passed since the breach occurred.

a. the seller or lessor tenders delivery.

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.

Ferris is refinishing his kitchen floor and needs a floor sander to complete the job. Ferris's neighbor Gena suggests that he call Home Repair Rentals, Inc. Home Repair leases Ferris a floor sander. In this transaction, the lessor is a. Home Repair. b. Gena. c. Ferris. d. none of the parties.

a. Home Repair.

Check My Work Rice River Farms offers to sell Sensei Sushi Restaurants, Inc., five hundred bushels of rice. Sensei responds, "We agree to buy five hundred bushels only if the rice is Grade A quality." This statement is a. a counteroffer. b. an acceptance. c. a confirmation. d. a breach.

a. a counteroffer.

Rally Corporation enters into a contract to sell ski gear 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 a. all of the buyers and sellers. b. Sno-Sports and Tyra only. c. Rally and Sno-Sports only. d. Tyra and Upton only.

a. all of the buyers and sellers.

Omni Metals Company and Piecework Fabrication, Inc., enter into a contract under which Omni agrees to deliver a certain quantity of sheet metal to Piecework each month. 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 at the time for delivery. b. impose the lowest market price. c. impose the highest market price. d. return the parties to the positions they held before the contract.

a. determine a reasonable price at the time for delivery.

In a dispute over a sale involving a bicycle, Dain argues that as to this deal Ed's Hobby Shop, where Dain bought the bike, is a merchant. A court may determine whether Ed's is a merchant by assessing whether a. it holds itself out by occupation as having knowledge or skill unique to the bike in the transaction. b. it subscribes to Bike, a biweekly trade magazine. c. it has sold any bikes within the last year. d. its owner enjoys biking

a. it holds itself out by occupation as having

Fresh Dairy, Inc., is the offeror and Gelato Ice Cream Company is the offeree under a unilateral sales contract in which Hector's Helado Corporation is also interested. Gelato is not notified of Fresh Dairy's performance within a reasonable time. Gelato a. may treat the offer as having lapsed. b. must notify Hector's. c. must contact Fresh Dairy. d. must assume that Fresh Dairy has started to perform.

a. may treat the offer as having lapsed.

Coffee Roasters, Inc., sells whole bean and ground coffee to Delicioso Deli under an existing contract. When the cost of coffee beans increases, Delicioso agrees to a price increase, but later wants to cancel the contract. Delicioso may a. not cancel the contract. b. cancel the contract only on reasonable notice. c. cancel the contract immediately. d. cancel the contract only after accepting a final shipment.

a. not cancel the contract.

Farmers Produce, Inc., and Growers Market enter into a contract for the delivery of locally grown fruits and vegetables. The parties use a standard Farmers Produce form that contains some of the terms the parties agree on but not others. Some of the produce spoils before it can be cooked, served, and eaten, or sold. Growers Market refuses to pay for the spoiled goods. Refer to Fact Pattern 20-1. Farmers Produce files a suit against Growers Market, claiming that the buyer assumed the risk of the spoilage of the unsold goods. The court may allow evidence of this term if it finds that the parties' contract is a. not fully integrated. b. none of the choices. c. a complete and final statement of their agreement. d. fully integrated.

a. not fully integrated.

Jack sells a grand piano to Kyle for $5,000 and a gold ring to Lauren for $999. A writing is required to enforce the sale of a. the piano and the gold ring. b. neither the piano nor the gold ring. c. the gold ring only. d. the piano only.

a. the piano and the gold ring.

Under Section 2 of the Sherman Antitrust Act, the size in relation to the market is what matters because monopoly involves the power to XXXX.

affect prices.

deluxa awnings inc. offers elbert a job as an installer. No time for acceptance is specified in the offer. The offer will terminate

after a reasonable period of time.

Nora enters into a contract with Oceanic Transport, Inc., to insure and ship a painting from France to the United States for a certain price. But Oceanic makes a mistake in adding the costs, which results in a contract price that is $1,000 less than the true cost. Most likely, a court would

allow the parties to rescind the contract.

NuTrend Clothing Corporation is a public company whose securities are traded among investors. Under the Securities Act of 1933, a security is

almost any stake in the ownership or debt of a company.

Gladys is a shareholder of Frozen Yogurt, Inc. As a shareholder, Gladys must approve

amending the bylaws

Frida and Gregor want to market a new line of fishing gear. To avoid income taxes at the corporate level, they should form

an S Corporation

Congress enacts a statute to outlaw a specific type of anti-competitive business agreement. Like other laws that regulate economic competition, this law is referred to as

an antitrust law

an assignment.

city Manufacturing Corporation conditions shipments of its products to Exurb Stores, Inc., on Exurb's agreement not to buy products from Regional Works Company, City's competitor. This is

an exclusive-dealing contract.

bilbo signs a lease agreemt for an apartment with cato, who owns and manages the deer creek apartments complex. these parties have

an express contract

an illegal restraint on trade

an illegal restraint on trade.

Nick, a salesperson for Olive Grove Corporation, learns that Olive Grove will in-crease the dividend it pays to shareholders. Nick buys 10,000 shares of Olive Grove stock. When the dividend is announced to the public and the price of the stock increases, Nick sells his shares for a profit. Nick would not be liable for insider trading if the information about the dividend was

available to the public before Nick bought the stock.

A trade association a. is always a per se violation of Section 1 of the Sherman Act. b. may be legal if it is sufficiently beneficial to both the association and the public. c. is an innovative, legally efficient approach to doing business. d. always creates illegal territorial or customer restrictions.

Congress enacts a statute to outlaw a specific type of anticompetitive business agreement. Like other laws that regulate economic competition, this law is referred to as a. a federal trade commission act. b. an antitrust law. c. an interstate commerce act. d. a suppressive restraint on trade.

Global Services Corporation engages in trade practices that may violate antitrust law. The Federal Trade Commission has the power to act against unfair trade practices under a. the Clayton Act. b. the Federal Trade Commission Act. c. the Sherman Act. d. no law.

North Mining Company and South Excavation Company agree to abide by the decisions of East Coast Financial Corporation as to their respective levels of production, markets, and prices, effectively reducing competition and increasing profits. This is most likely a. a common, legal, time-honored type of business arrangement. b. an illegal restraint on trade. c. an innovative, legally efficient approach to doing business. d. an outdated, but legal business trust.

Spa Selectiva Company makes and sells beauty salon supplies. By selling its product at prices substantially below the normal cost of production, Spa Selectiva hopes to drive its competitors from the market. This is a. market power. b. predatory pricing. c. price discrimination. d. price-fixing.

Clear View Corporation offers to sell its flat-panel display monitors to Best Computer & Video, Inc., only if Best agrees to buy Clear View's servicing of its products along with the monitors. This is a. an exclusive-dealing contract. b. a tying arrangement. c. price discrimination. d. business acumen.

b. a tying arrangement.

Dredgers, Inc., is the major wholesale distributor of heavy equipment in the state of Georgia. Its closest competitor is Excavators Company, another Georgia firm. The two firms agree that Excavators will operate in southern Georgia and Dredgers will operate in northern Georgia. This is a. a group boycott. b. a market division. c. a price-fixing agreement. d. a tying arrangement.

b. a market division.

Congress enacts a statute to outlaw a specific type of anti competitive business agreement. Like other laws that regulate economic competition, this law is referred to as a. a federal trade commission act. b. an antitrust law. c. an interstate commerce act. d. a suppressive restraint on trade.

b. an antitrust law.

b. an illegal restraint on trade.

Spa Selectiva Company makes and sells beauty salon supplies. By selling its product at prices substantially below the normal cost of production, Spa Selectiva hopes to drive its competitors from the market. This is a. predatory bidding. b. predatory pricing. c. price discrimination. d. price-fixing.

b. predatory pricing.

Which of the following is not a per se violation of Section 1 of the Sherman Act? a. A group boycott b. A trade association c. A price-fixing agreement d. A market division

b. A trade association

Accredited investors include banks, but not investment companies. a. True b. False

b. False

Corporate "outsiders" may not be held liable for insider trading under Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5. a. True b. False

b. False

Market power relates to a firm's ability to change its output anytime it wants to. a. True b. False

b. False

The Securities and Exchange Commission cannot exempt persons, securities, and transactions from the requirements of the securities laws. a. True b. False

b. False

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.

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.

Omega Sewing Machines is a nationally known manufacturer, having started in business almost 50 years ago. Omega and Betty's Sewing Store agree that Betty will be the only dealer in her state that will sell Omega machines. This type of agreement is most likely a. not allowed under the rule of reason because Betty has not demonstrated need for the restriction. b. allowed under the rule of reason. c. an attempted monopolization. d. prohibited by Section 1 of the Sherman Act as a per se violation.

b. allowed under the rule of reason

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 contract. d. no contract.

b. an express contract.

North Mining Company and South Excavation Company agree to abide by the decisions of East Coast Financial Corporation as to their respective levels of production, markets, and prices, effectively reducing competition and increasing profits. This is most likely a. an innovative, legally efficient approach to doing business. b. an illegal restraint on trade. c. an outdated, but legal business trust. d. a common, legal, time-honored type of business arrangement.

b. an illegal restraint on trade.

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 a. an express contract. b. an implied contract. c. a formal contract. d. no contract.

b. an implied contract.

Freddi buys bike shoes from Get n' Gear Store, telling the clerk that she wants the shoes to compete in High Pace Triathlon. The shoes break apart during the competition, causing Freddi to be injured in a fall. Get n' Gear most likely breached a. an express warranty. b. an implied warranty of fitness for a particular purpose. c. an implied warranty of merchantability. d. a warranty of title.

b. an implied warranty of fitness for a particular purpose.

Hawaiian Shirts, Inc., wants to issue stock of $1 million in a single offering. The corporation must provide disclosure documents that generally are the same as those used in registered offerings to a. the Securities and Exchange Commission. b. any unaccredited investors. c. any accredited investors. d. all investors and the Securities and Exchange Commission.

b. any unaccredited investors.

Bart orders 20,000 Class A widgets from Salvatore. Salvatore promptly ships to Bart 20,000 Class B widgets instead. Under the UCC, Salvatore has: a. made a counteroffer to Bart's offer. b. both accepted and breached the contract. c. accepted the contract and not breached the contract. d. not accepted the contract.

b. both accepted and breached the contract.

Holiday Baskets, Inc., refuses to buy products from GMO Farms. This can violate antitrust laws if the refusal a. provides no economic benefits for consumers. b. is likely to have an anticompetitive effect on a particular market. c. is likely to increase competition. d. results in lower prices for consumers.

b. is likely to have an anticompetitive effect on a particular market.

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.

Sunrich Company can process solar energy into an inexpensive fuel for internal combustion engines. As an innovator in its market, Sunrich currently has the power to affect the price of its product. This is a. price discrimination. b. market power. c. price-fixing. d. predatory pricing.

b. market power.

U-Can-Own-It Corporation sells appliances to less educated consumers, including Viv, on installment plans. U-Can-Own-It files a suit against Viv when she stops making payments. Viv claims that the deal is unconscionable. The court will most likely consider a. the geographic area of the relevant market. b. the parties' relative bargaining power. c. the quality of related products in the general market. d. the relation of this deal to those of other customers.

b. the parties' relative bargaining power.

Northern Manufacturers is prosecuted for antitrust violations by the Department of Justice, which wins its case. The judge agrees to impose criminal sanctions against Northern for the injuries it caused its competitor, Mini Lake, Inc. Mini Lake a. is eligible to sue only for money damages because the Department of Justice prevailed in the criminal action. b. may recover treble damages and attorneys' fees. c. may also sue for punitive damages. d. has no additional recourse against Northern because the criminal trial was successful.

b. may recover treble damages and attorneys' fees

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

Bee Well is one of three suppliers of portable toilets located near the border between Oregon and California. All three companies operate in both states. Bee Well charges different prices to different customers depending on the distance to the locale and the number of units rented. This is a. a violation of Section 1 of the Sherman Act because charging different rates is a per se violation. b. not a violation of the Clayton Act because Bee Well can justify charging the different rates. c. a violation of the Clayton Act because charging different rates is a per se violation. d. not a violation of Section 1 of the Sherman Act because Bee Well can justify charging the different rates.

b. not a violation of the Clayton Act because Bee Well can justify charging the different rates.

Honey Pots is one of three suppliers of portable toilets located near the Oregon-California border. All three companies operate in both states. Honey Pots charges different prices depending on the distance to the locale and the number of units rented. This is: a. a violation of the Clayton Act because charging different rates is a per se violation. b. not a violation of the Clayton Act because Honey Pots can justify charging the different rates. c. a violation of Section 1 of the Sherman Act because charging different rates is a per se violation.

b. not a violation of the Clayton Act because Honey Pots can justify charging the different rates

b. predatory pricing.

When applying the market-share test, a court often determines the "relevant market" for the product by considering the: a. number of competitors. b. product markets and the geographic markets in which the goods or services are sold. c. ease with which new companies can enter a market.

b. product markets and the geographic markets in which the goods or services are sold.

Imperio Caffeine Corporation makes and sells coffee under a variety of brand names. Imperio wants to merge with Java Company, its main competitor. In weighing a challenge to the deal, a court looks at the relevant product market. This most likely includes coffee and a. products that are not identical but are related, such as spin-offs. b. products that are sometimes substituted for coffee. c. products with identical attributes only. d. no other products.

b. products that are sometimes substituted for coffee.

Panini Vittles, Inc., contracts with Qino to deliver its sandwiches. Later, the parties decide to cancel their contract. They can a. rescind their entire contract. b. rescind their contract to the extent that it is executory. c. rescind their contract if they make a new contract at the same time. d. not rescind their contract.

b. rescind their contract to the extent that it is executory.

Shelby offers to make digital copies of Relay Company's business conference videotapes, CDs, DVDs, and other media for $500. Under the mailbox rule, 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.

Healthcare Device, Inc., has exclusive control over the market for its product. Healthcare Device's market power is most likely a. a per se violation. b. subject to further evaluation. c. not a violation. d. "an unfair or deceptive act or practice."

b. subject to further evaluation.

Precious Metals Corporation, a raw materials vendor, sells its commodities in certain quan-ti-ties to Quarry Refining Company for a certain price but charges Rich Assets, Inc., a Quarry com-peti-tor, a higher price. This is most likely a violation of a. the Federal Trade Commission Act. b. the Clayton Act. c. the Sherman Act. d. no antitrust law.

b. the Clayton Act.

Beginners Run Ski Shop sells a pair of skis to Crystal. When Crystal first uses the skis, they snap in two. The cause is something that Beginners Run did not know about and could not have discovered. Beginners Run breached a. the merchant's implied duty of inspection. b. the implied warranty of merchantability. c. no duty or warranty because Beginners Run knew nothing about the defect that made the goods unsafe. d. no duty or warranty because consumers should reasonably expect to occasionally find a product that does not work as warranted.

b. the implied warranty of merchantability.

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.

Drilling Tools, Inc., wants to make an initial public offering of securities. Drilling Tools believes that it qualifies for an exemption under Regulation A from the full registration requirement of the federal Securities Act of 1933. Refer to Fact Pattern 42-1A. Drilling Tools decides to sell its new securities via the Internet. This offering a. is an investment scam. b. will avoid the payment of commissions to brokers or underwriters. c. constitutes insider trading. d. is a Ponzi scheme

b. will avoid the payment of commissions to brokers or underwriters.

Curt enters into a contract with Drivers Lease Company for a three-year lease of a car. This contract is subject to a. none of the choices. b. Article 2A of the UCC. c. Article 11 of the CISG. d. the common law only.

b. Article 2A of the UCC.

County Dentists Clinic offers to buy from Dental & Medical Supplies Company a certain quantity of floss and other items for a certain price. Dental & Medical can accept the offer by a. a material alteration of the terms within a reasonable time. b. a prompt promise to ship or a prompt or current shipment of the goods. c. any of the choices. d. a shipment of nonconforming goods with a notice of accommodation.

b. a prompt promise to ship or a prompt or current shipment of the goods.

Car n' Truck Body & Paint Company orders custom paint from Diverse Hues Inc., but Diverse does not deliver. Car n' Truck will probably be unable to enforce the agreement if the parties omitted a. shipping arrangements. b. a quantity term. c. a price term. d. a delivery date.

b. a quantity term.

Sara and Tim enter into a contract for a sale of orchids. With respect to the specific contractual provisions set out in the UCC, these parties may a. agree to different terms unless they "get caught." b. agree to whatever terms they wish. c. agree to different terms only to a reasonable extent. d. not agree to different terms.

b. agree to whatever terms they wish.

Qatar Global Investments is a foreign entity—a firm owned and operated by investors in a foreign country. With respect to a limited liability company in the United States, Qatar Global can

become a member

signe offers to sell thomas her textbook but conditions the sale on thomas accepting the offer by march 1. signe may revoke the offer

before thomas accpets the offer

Bret and Courtney form Delite Day Care, Inc. Ultimate responsibility for policy decisions necessary to the management of corporate affairs rests with Delite's

board of directors

VeriVisual Company makes HD 3D film and video equipment. VeriVisual is like most corporations in that its officers are hired by the firm's

board of directors

bruce, a minor, enters into a contract with coralee to buy her car. Later, bruce opts to avoid the deal, with respect to the contract, this releases

both parties

Cardio, Inc., makes and sells Drawdown, the most prescribed name-brand heart medication. Emitate Corporation has the potential to make a generic version of the same drug. A court would most likely rule that the agreement between Cardio and Emitate is a. a deal that neither restrains trade or harms competition. b. a legal restraint of trade. c. a per se violation of the Sherman Act. d. subject to analysis under the rule of reason.

Imperio Caffeine Corporation makes and sells coffee under a variety of brand names. Imperio wants to merge with Java Company, its main competitor. In weighing a challenge to the deal, a court looks at the relevant product market. This most likely includes coffee and a. no other products. b. products that are not identical but are related, such as spin-offs. c. products that are sometimes substituted for coffee. d. products with identical attributes only.

Listen Up! Corporation books and promotes concerts and other entertainment events, for which Listen Up! also sells tickets. In weighing a challenge to Listen Up!'s "monopolistic" ticket prices, a court looks at the relevant geographic market. This encompasses a. only areas in which Listen Up! does not have monopoly power. b. only areas in which Listen Up! has monopoly power. c. the area in which Listen Up! and its competitors sell, and their customers buy, the tickets. d. the entire United States in all cases.

Luminescent Silicon Corporation, which controls 40 percent of the computer-chip market in the United States, merges with Micro Processors, Inc., which controls 15 per-cent of the same market. This merger is a violation a. only if the result more clearly concentrates the market. b. only if the result makes it more difficult for potential competitors to enter the market. c. if the result more clearly concentrates the market and makes it more difficult for potential competitors to enter the market. d. under no circumstances.

Bodycare pays Deja Vu not to sell its product. This is a. a market division. b. a refusal to deal. c. an exclusive-dealing contract. d. a price-fixing agreement.

d. a price-fixing agreement.

Mango Corporation believes that Melon Corporation engages in anticompetitive behavior in an attempt to drive Mango and its other competitors out of the market. Antitrust laws can be enforced against Melon by a. Mango and its competitors only. b. Mango, its competitors, and the Federal Trade Commission only. c. Mango, its competitors, the Federal Trade Commission, and the U.S. Department of Justice. d. the Federal Trade Commission and U.S. Department of Justice only.

Marvin starts Marvin's Bike Company in Wheatland, South Dakota. There is one other bike store in Wheatland. Through good business management, Marvin's Bike Company obtains a great deal of market power in Wheatland. This acquisition of monopoly power is a. a per se violation of Section 1 of the Sherman Act. b. an illegal restraint on trade. c. not an antitrust violation. d. a per se violation of Section 2 of the Sherman Act.

Master Manufacturing Corporation has exclusive control over the market for its product. Under the Sherman Act, this is a. a per se violation. b. a violation if it acquired this power through "business acumen." c. a violation if it acquired this power through "anticompetitive means." d. not a violation.

Some agreements are so blatantly and substantially anticompetitive that they are deemed illegal per se under Section 1 of the Sherman Act. Which of the following is not a per se violation? a. A price-fixing agreement. b. A group boycott. c. A trade association. d. A market division.

Thermo Gas, Inc., and Uno Oil Corporation refine and sell gasoline and other petroleum products. To limit the supply of gas on the market and thereby raise prices, Thermo Gas and Uno Oil agree to buy "excess" supplies from dealers and "dispose" of it. This is a. a deal that neither restrains trade or harms competition. b. a legal restraint of trade. c. a per se violation of the Sherman Act. d. subject to analysis under the rule of reason.

To acquire monopoly power in its market, Perfect Plastics, Inc., sets its prices lower than its competitors. Under the Sherman Act, this is a. a per se violation. b. a violation if its competitors make similar deals. c. a violation if it thereby acquires monopoly power. d. not a violation.

To acquire monopoly power in its market, Global Condiments, Inc., sets its prices substantially below the normal costs of production. Under antitrust law, this is a. a per se violation. b. a violation if the firm's competitors set similar prices. c. a violation if the firm thereby acquires monopoly power. d. not a violation.

c. a violation if the firm thereby acquires monopoly power.

To prevent its competitors from obtaining sufficient supplies to make their products, Continental Steel, Inc., uses its market power to increase the prices of those supplies. This is a. price discrimination. b. business judgment. c. predatory bidding. d. predatory pricing.

c. predatory bidding

Gaucho Ranchland Supplies Corporation believes that Vaquero Stock & Equipment Corporation engages in anti competitive behavior in an attempt to drive Gaucho, its chief competitor, out of the market. Anti trust laws can be enforced against Vaquero by a. only a disinterested third party. b. Congress. c. Gaucho. d. none of the choices.

c. Gaucho.

The Association of Organic Food Growers, which does not include all organic farmers and ranchers, refuses to deal with any parties who do not carry the products of its members. This group boycott is a. a situation that neither restrains trade nor harms competition. b. a legal restraint of trade. c. a per se violation of antitrust law. d. subject to analysis under the rule of reason.

c. a per se violation of antitrust law.

A court would most likely rule that the agreement between Bodycare and Deja Vu is a. a deal that neither restrains trade or harms competition. b. a legal restraint of trade. c. a per se violation of the Sherman Act. d. subject to analysis under the rule of reason.

c. a per se violation of the Sherman Act.

Agreements that are deemed per se violations of Section 1 of the Sherman Act include all of the following except a. a price-fixing agreement. b. a group boycott. c. a trade association. d. a market division.

c. a trade association.

Glass worx Corporation has exclusive control over the market for its products. Under anti trust law, this is a. a per se violation. b. a violation if it acquired this power through "business judgment." c. a violation if it acquired this power through "anticompetitive means." d. not a violation.

c. a violation if it acquired this power through "anticompetitive means."

Frozen Confections Corporation makes and sells ice cream under a variety of brand names. Frozen wants to merge with Grocers Products Company, its main competitor. In considering a challenge to the deal, a court looks at the relevant product market. This most likely includes ice cream and a. no other products. b. products that are not identical but are related, such as spin-offs. c. products that are reasonably interchangeable. d. products with identical attributes only.

c. products that are reasonably interchangeable.

Pads & Pods Corporation requires all distributors of its products to sell the products at specified minimum prices. This resale price maintenance agreement is a. a per se violation of antitrust law. b. a legal restraint of trade. c. subject to evaluation under the rule of reason. d. not subject to antitrust law.

c. subject to evaluation under the rule of reason.

Soft Drink Corporation is charged with violating the Sherman Act through conduct subject to the rule of reason. When applying the rule of reason in this situation, a court will not consider a. the purpose of the agreement. b. the parties' market ability to implement the agreement. c. the effect of the agreement on international trade. d. the potential effect of the agreement on competition.

c. the effect of the agreement on international trade.

Janis owns an operating copper mine. She regularly sells the copper from her mine to Travis, who uses the raw materials in his factory. Their sales contracts are covered by: a. Article 2A of the UCC. b. the common law because they involve real property. c. Article 2 of the UCC. d. Article 3 of the UCC.

c. Article 2 of the UCC.

Fresh Fruit Company has assets of less than $10 million and fewer than fifty shareholders. Gourmand Pastries, Inc., has assets of more than $50 million and more than five hundred shareholders. The Securities Exchange Act of 1934 applies to a. Fresh Fruit and Gourmand Pastries b. Fresh Fruit only c. Gourmand Pastries d. neither Fresh Fruit nor Gourmand Pastries

c. Gourmand Pastries only

Mango Corporation believes that Melon Corporation engages in anticompetitive behavior in an attempt to drive Mango and its other competitors out of the market. Antitrust laws can be enforced against Melon by a. Mango, its competitors, and the Federal Trade Commission only. b. Mango and its competitors only. c. Mango, its competitors, the Federal Trade Commission, and the U.S. Department of Justice. d. the Federal Trade Commission and U.S. Department of Justice only.

c. Mango, its competitors, the Federal Trade Commission, and the U.S. Department of Justice

Oscar owns a jewelry store. Maura agrees to buy a watch for $3,150 that Oscar has ordered from Germany. Oscar and Maura fail to specify where delivery will take place. Under the UCC: a. Oscar must receive the watch at his own home, where Maura will pick it up. b. the open delivery term invalidates the contract. c. Maura must take delivery of the watch at Oscar's store. d. Oscar must deliver the watch to Maura's home.

c. Maura must take delivery of the watch at Oscar's store.

The differences between Section 1 and Section 2 of the Sherman Act include that: a. Section 2 applies to only two or more persons. b. Section 1 requires three or more persons. c. Section 2 can apply to one person.

c. Section 2 can apply to one person.

an advertisement "we buy gold" is an offer

false

Gabby, who is planning to move, offers to sell her sofa to her friend Trent for $750. Trent says, "I'll take it, and I would like you to throw in the coffee table along with it." Under the UCC, Gabby and Trent have: a. no contract because of the mirror image rule. b. a contract for the sofa and coffee table. c. a contract for the sofa only. d. no contract because Gabby did not accept the counteroffer.

c. a contract for the sofa only.

An antitrust action is brought against Tri-State Transport Company, al-leging the offense of attempted monopolization. To be guilty of this of-fense, Tri-State's attempt must have a. a distant possibility of success. b. a deadly guaranty of success. c. a dangerous probability of success. d. a distinct improbability of success

c. a dangerous probability of success.

Edgy Engine Components, Inc., a maker of vehicle parts, refuses to sell to Fidgety Fix-It, Inc., a national vehicle service firm. Edgy Engine convinces Greasy Motor Parts Company, a competitor, to do the same. This is a. a market division. b. a joint venture. c. a group boycott. d. an exclusive-dealing contract.

c. a group boycott.

4. 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 bilateral 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.

To acquire monopoly power in its market, Global Positioning Systems, Inc., sets its prices substantially below the normal costs of production. Under antitrust law, this is a. a per se violation. b. a violation if its competitors set similar prices. c. a violation if it thereby acquires monopoly power. d. not a violation.

c. a violation if it thereby acquires monopoly power.

A relevant product market includes: a. many dissimilar products. b. just those similar products in the immediate area of the manufacturer. c. all products produced by all firms that have identical attributes.

c. all products produced by all firms that have identical attributes

MotorCo Inc. makes and sells auto parts to retail repair services, vehicle sales outlets, and consumer parts stores. On one MotorCo box is a label that reads "Contains one gross (144) sparkplugs, assorted sizes." This statement is a. an implied warranty of fitness for a particular purpose. b. an implied warranty of merchantability. c. an express warranty. d. none of the choices.

c. an express warranty.

Foreign Steel Exports, a company based in Brazil, colludes with other steel export companies from around the world to agree on the price of steel sold in the U.S., which causes the price of steel in the U.S. to substantially increase. This type of agreement a. falls outside of U.S. regulation. b. must be addressed by an international trade association. c. can be a violation of the Sherman Act. d. can only be considered a violation under Brazil's laws.

c. can be a violation of the Sherman Act.

In a well-established market, ComBuilt produces the nation's best-selling bookkeeping software. The program is far superior to all other similar programs. ComBuilt requires all its distributors and retailers to sell the program at a specified price. This is: a. allowed by antitrust laws because it is a superior product. b. known as a price maintenance agreement and is a per se violation of Section 1 of the Sherman Act. c. known as a price maintenance agreement and is subject to the rule-of-reason test to determine whether it is a violation of Section 1 of the Sherman Act. d. exempt from antitrust laws because it does not constitute an interference with competition.

c. known as a price maintenance agreement and is subject to the rule-of-reason test to determine whether it is a violation of Section 1 of the Sherman Act.

Rollo promises to perform, for a price, shoe repair services in affiliation with Togs 'n Things, a clothing store. To support a contract, the consid¬eration ex-changed by the parties must be a. adequately considerate. b. equally valuable. c. legally sufficient. d. wisely priced.

c. legally sufficient.

Vineyard owners and wine producers join together to form Vino Veritas, a trade association. This a. is a per se violation of Section 1 of the Sherman Act. b. creates illegal territorial or customer restrictions. c. may be legal if it is sufficiently beneficial to both the association and the public. d. is an innovative, legally efficient approach to doing business.

c. may be legal if it is sufficiently beneficial to both the association and the public.

an econtract must meet basic requirements that are different from those required of a paper contract

false

Craig and Kathy are disputing a contract that a court has determined is fully integrated. Because of this finding, a court: a. may look to the terms and definitions as defined or used in the industry of the parties to give additional evidence to the meaning of the terms. b. may use the course of dealing between the parties to give additional evidence to the meaning of the terms. c. may not look at any additional evidence of the agreement. d. may look at the behavior of the parties to determine the meaning of the terms.

c. may not look at any additional evidence of the agreement.

Midwest Manufacturers is successfully prosecuted for antitrust violations by the Department of Justice and the judge imposes criminal sanctions against Midwest for the injuries it caused its competitor Great Lakes, Inc. Great Lakes: a. has no additional recourse. b. may sue for punitive damages. c. may recover treble (triple) damages and attorney's fees.

c. may recover treble (triple) damages and attorney's fees.

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.

To drive its competitors out of a certain geographic segment of its market, Superior Piping, Inc., sets the prices of its products below cost for the buyers in that area. This is a. predatory pricing. b. business judgment. c. price discrimination. d. predatory bidding.

c. price discrimination.

Cotton Products Corporation is a public company whose shares are traded in the public securities markets. With respect to financial and other significant information concerning its securities, the Securities Act of 1933 a. imposes increased responsibility on chief corporate executives b. creates a "safe harbor" for companies to make forward-looking statements c. requires disclosure d. prevents insiders from trading among themselves

c. requires disclosure

Quality Aluminum Corporation files a suit against Rite Tool 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. it is obvious that the consideration is adequate. b. Rite Tool asserts that there is adequate consideration. c. something of value passed between the parties. d. the consideration is worth more than $100.

c. something of value passed between the parties.

Regal Autos, Inc., sells cars to consumers. To avoid liability for oral express warranties, each Regal sales agreement should note that a car is sold a. as is. b. in perfect condition. c. subject to warranties included in the written contract only. d. with no known defects.

c. subject to warranties included in the written contract only.

Rita and Jim have signed several contracts between them, including a contract for the sale of a dining room set, the sale of several shares of stock, the sale of a small piece of real estate on the outskirts of town, and the sale of a portrait sitting. Of these four contracts, the UCC will govern the contract for the sale of: a. the portrait sitting. b. the shares of stock. c. the dining room set. d. the real estate.

c. the dining room set.

When applying the rule of reason to determine whether an agreement violates Section 1 of the Sherman Act, a court will not consider

c. the effect of the agreement on international trade.

Eden Valley Ranch and Farm Supply Corporation enter into a contract for a sale of fencing materials. Farm Supply, a merchant who deals in goods of the kind, makes implied and express warranties in connection with the sale. Under the UCC, if these are inconsistent a. all implied warranties displace all express warranties. b. all express warranties displace all implied warranties. c. the implied warranty of fitness for a particular purpose takes precedence. d. the implied warranty of merchantability takes precedence.

c. the implied warranty of fitness for a particular purpose takes precedence.

an implied contract is not an actual contract

false

Seth owns and runs a small shoe factory. He finds a source of leather that is perfect for the new styles he has designed. To ensure himself a steady supply of the leather, he wants to buy the leather-processing plant. Seth's proposal is known as a a. horizontal merger and will most likely be legal, because Seth will have over 80 percent of the market if he goes through with the merger. b. vertical merger and will most likely be illegal, because it places unreasonable restrictions on trade. c. vertical merger and will most likely be legal, because it will not prevent competitors of either firm from competing in the market. d. horizontal merger and will most likely be illegal, because it constitutes foreclosure of the market.

c. vertical merger and will most likely be legal, because it will not prevent competitors of either firm from competing in the market.

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.

Predatory bidding occurs: a. when a buyer bids down the price of an input so low that its competitors can buy everything. b. when a buyer bids down the price so low that the seller goes out of business. c. when a buyer bids up the price of an input too high for its competitors to pay.

c. when a buyer bids up the price of an input too high for its competitors to pay.

Great Harvest Farms offers to sell Hearty Bakeries, Inc., fifty bushels of wheat. Hearty's representative Ilene responds, "We agree to buy fifty bushels only if the wheat is Grade A quality." Between Great Harvest and Hearty Bakeries a. a contract is formed. b. a contract is formed only if Great Harvest can deliver the wheat fast. c. Ilene's statement is not an acceptance. d. Ilene's statement is an acceptance.

c. Ilene's statement is not an acceptance.

Talk, Inc., offers to buy from Ultra Corporation 1,000 smartphones. 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. a counteroffer. b. complete performance. c. a breach. d. an accommodation.

c. a breach.

Marine Expeditions, Inc., pays Nate's Boats $4,000 to use an oceangoing vessel for a month. For the purposes of the UCC, this is a. a sale. b. an option contract. c. a lease. d. a merchant's firm offer.

c. a lease.

Containers, Inc., sends its standard order form to Distribution Corporation to evidence a sale of packing materials. Distribution responds with its own standard purchase order form. Additional terms in the purchase order automatically become part of the contract unless a. the offeror objects to the new terms within a reasonable time. b. the original offer expressly required acceptance of its terms. c. any of the choices. d. the terms materially alter the original contract.

c. any of the choices.

Discount Retail Corporation may be engaging in conduct that violates the Sherman Act. To bring an action against the firm requires that its conduct have a significant impact on a. international commerce. b. Internet commerce. c. interstate commerce. d. intrastate commerce.

c. interstate commerce.

Check My Work Downtown Contractors LLC and Equipment Rental Corporation are parties to an oral agreement for a one-year lease of a crane with payments totaling more than $10,000. They may satisfy the Statute of Frauds by a. mutually agreeing not to commit fraud. b. repeating the terms in a phone call. c. setting out the terms in a memo. d. shaking hands on the deal.

c. setting out the terms in a memo.

Josefina owns a condominium that she leases to Katrina. Josefina gives her daughter Lucia $450 on her sixteenth birthday. Josefina sells her car to her neighbor Maria for $1,500. UCC Article 2 covers a. the gift to Lucia. b. the lease with Katrina. c. the sale to Maria. d. all of the choices.

c. the sale to Maria.

Mead, Nero, and Olen do business as Pipe & Plumbing Services. After Mead's relationship to the firm ends, Nero and Olen

can continue to do business

Rollo is the chief executive officer of Specialty Magazines, Inc., which is required to file certain financial reports with the Securities and Exchange Commission (SEC). Under the Sarbanes-Oxley Act of 2002, Rollo must

certify that the reports are complete and accurate.

certify that the statements are accurate.

clayton act

Because the Internet is so important today, the XXXX of geographic markets is less relevant than before.

concept

Emil enters into a contract to buy Foley's cultivated bottomland and hill and bench acreage if County AgriCredit will lend Emil the funds to pay for the land. Emil's duty to perform is

conditional

Naomi and Ogden are shareholders of MediCare Residences, Inc. As shareholders, they must approve

conducting a merger

home and barn const inc contracts with idull farms to build a new dairy barn on idylls property for which idyll agrees to pay. the elements of this, and any other, contract include

consideration

Sylvester buys a franchise from Resistance Athletic Shoes Inc. This relationship, like all other franchise relationships, is governed by

contract law

The primary issue with a monopoly is the ability to XXXXl and XXXX the market price of a product or service.

control, affect

When transportation XXXX are significant, the geographic market is more limited.

costs

A suit is filed against Adroit Drilling Tools Corporation, alleging that the firm committed the offense of monopolization. To determine whether Adroit has monopoly power requires looking at a. the definition of monopoly in the Sherman Act. b. Adroit's size alone. c. Adroit's production methods and marketing techniques. d. the relevant market.

Cardio, Inc., makes and sells Drawdown, the most prescribed name-brand heart medication. Emitate Corporation has the potential to make a generic version of the same drug. Refer to Fact Pattern 39-1. Cardio pays Emitate not to sell its product. This is a. a customer restriction. b. a joint venture. c. an exclusive-dealing contract. d. a price-fixing agreement.

Fresh Vegetables, Inc., a wholesaler, refuses to sell its produce to Good Mart Stores, Inc., a retailer. This is a. "an unfair or deceptive act or practice." b. a per se violation. c. not a violation. d. subject to analysis under the rule of reason.

Rally Speedboat Corporation refuses to sell its products to Super Weekends, Inc., a recreational water products dealership. This is a. an exclusive-dealing contract. b. a horizontal market division. c. attempted monopolization. d. a unilateral refusal to deal.

To drive its competitors out of a certain geographic segment of its market, Fryin' Potatoes, Inc., sets the prices of its products below cost for the buyers in that area. This is a. a refusal to deal. b. business acumen. c. predatory bidding. d. price discrimination.

Speedee Snoboards, Inc., refuses to sell its products to Timber Mountain Winter Sports Stores, Inc., a retail snowboard dealership. This is a. an exclusive-dealing contract. b. a territorial restriction. c. attempted monopolization. d. a unilateral refusal to deal.

d. a unilateral refusal to deal.

. Earth grown Flora, Inc., is one of many producers of cut flowers. Earthgrown refuses to sell its products to Florist Shops Corporation. Under anti trust law, this refusal is most likely a. a per se violation. b. a violation if its competitors make similar deals. c. a violation if it thereby acquires monopoly power. d. not a violation.

d. not a violation.

To drive its competitors out of a certain geographic segment of its market, Drone Drives, Inc., sets the prices of its products below cost for the buyers in that area. This is a. price-fixing. b. business acumen. c. predatory pricing. d. price discrimination.

d. price discrimination.

Fresh Vegetables, Inc., a wholesaler, refuses to sell its produce to Good Foods Marketplace, Inc., a retailer. This is a. "an unfair or deceptive act or practice." b. a per se violation. c. not a violation. d. subject to analysis under the rule of reason.

d. subject to analysis under the rule of reason.

in contract law, intent is determinedby the personal or subjective intent, or belief, of a party

false

Domestic Oil Company joins with a foreign cartel to control the price of oil. The cartel has a substantial effect on U.S. commerce. A suit for violation of U.S. anti trust laws can be brought against a. Domestic Oil and the foreign cartel. b. the foreign cartel. c. Domestic Oil. d. all of the choices.

d. all of the choices.

Fiesta Food Company, Gourmet Cheeses, Inc., and Healthy Eats, Inc. agree to exchange information and share advertising. This trade association agreement is a. a deal that inherently neither restrains trade nor harms competition. b. a legal restraint of trade. c. a per se violation of antitrust law. d. subject to analysis under the rule of reason.

d. subject to analysis under the rule of reason.

. Healthcare Device, Inc., has exclusive control over the market for its product. Healthcare Device's market power is most likely a. "an unfair or deceptive act or practice." b. a per se violation. c. not a violation. d. subject to further evaluation.

d. subject to further evaluation.

A suit is filed against AgriSeeds Corporation, alleging that the firm committed the offense of monopolization. To determine whether AgriSeeds has monopoly power requires looking at a. the company's size alone. b. the marketing practices of AgriSeeds's competitors. c. AgriSeeds's marketing techniques. d. the relevant market.

d. the relevant market.

Filbert, an engineer for Geo Processes Corporation, learns that Geo Processes has developed a resource reclamation method that can triple the output of any mining enterprise. Filbert buys 20,000 shares of Geo Processes stock. He tells Hunter, who buys 15,000 shares. After the new method is announced publicly, the price of Geo Processes stock increases. Filbert and Hunter sell their shares for a profit. Under the Securities Exchange Act of 1934, liability may be imposed on a. Filbert, Geo Processes, and Hunter. b. Filbert only. c. none of these parties. d. Filbert and Hunter only

d. Filbert and Hunter only

Andrea is a famous rodeo competitor. She contracts with Wild Ride Horse Sales to purchase five pedigreed horses, which are designated by their registration numbers. In this contract, identification: a. State Conference of Commissioners on Uniform State Laws. b. Global Conference of Commissioners on Uniform State Laws. c. International Conference of Commissioners on Uniform State Laws. d. National Conference of Commissioners on Uniform State Laws.

d. National Conference of Commissioners on Uniform State Laws.

An antitrust action is brought against Tri-State Transport Company, alleging the offense of attempted monopolization. To be guilty of this offense, Tri-State's attempt must have a. a distinct improbability of success. b. a deadly guaranty of success. c. a distant possibility of success. d. a dangerous probability of success.

d. a dangerous probability of success.

Predatory pricing occurs when: a. a firm raises its price over those of its competitors. b. a firm's market share decreases. c. competitors agree to charge the same price for similar goods. d. a firm prices sells its products substantially below cost to drive out competition.

d. a firm prices sells its products substantially below cost to drive out competition.

Farmed Crops Corporation offers to sell its wheat substitute to Gluten-Free, Inc., only if Gluten-Free agrees to buy all of the wheat substitute that it needs from Farmed Crops, even though there are other sellers from whom Gluten-Free could buy. This is a. business acumen. b. an exclusive-dealing contract. c. price discrimination. d. a tying arrangement

d. a tying arrangement.

City Manufacturing Corporation conditions shipments of its products to Exurb Stores, Inc., on Exurb's agreement not to buy products from Regional Works Company, City's competitor. This is a. a tying arrangement. b. a unilateral refusal to deal. c. price discrimination. d. an exclusive-dealing contract.

d. an exclusive-dealing contract.

Nester, a salesperson for Olive Grove Corporation, learns that Olive Grove will increase the dividend it pays to shareholders. Nester buys 10,000 shares of Olive Grove stock. When the dividend is announced to the public and the price of the stock increases, Nester sells his shares for a profit. Nester would not be liable for insider trading if the information about the dividend was a. available to the public after he bought the stock. b. material when he sold the stock. c. forward-looking when he bought the stock. d. available to the public before he bought the stock

d. available to the public before he bought the stock

Jenna, a minor acting on her own, signs a contract to buy a horse and its tack from Field Equine Ranch. Later, after taking possession of the horse and tack, Jenna disaffirms the deal. She a. can keep the horse and the tack. b. can keep the horse but not the tack. c. can keep the tack but not the horse. d. must return both the horse and the tack.

d. must return both the horse and the tack.

Adele decides to purchase several silver tea sets from Vaughn's gift store. In their sales contract, Adele and Vaughn do not specify how many silver tea sets Adele will purchase. They now have: a. a valid output contract. b. a valid contract with an open delivery term. c. a valid contract with an open price term. d. no contract at all.

d. no contract at all.

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. a contract for a loan at 15 percent interest. b. a contract for a loan at 12 percent interest. c. a contract for a loan at 0 percent interest. d. no contract.

d. no contract.

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.

Chord Guitars Inc. sells guitars and other stringed instruments to consumers. A Chord salesperson says to a potential customer, "This Chord is the best guitar you'll find anywhere, even online." This statement is a. an implied warranty of fitness for a particular purpose. b. an implied warranty of merchantability. c. an express warranty. d. none of the choices.

d. none of the choices.

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.

Platte River Meat Packing Company maintains a 3 percent share of the beef packing industry in the United States. Last year, it launched an unsuccessful effort to harm its competitors and garner monopoly share of the beef packing industry. Platte River's efforts are a. actionable because Platte River possessed intent to harm its competitors regardless of whether its efforts were successful. b. actionable as a per se attempt to monopolize the meat packing industry c. not actionable because antitrust laws do not punish unsuccessful attempts to monopolize, but only those that succeed. d. not actionable because Platte River lacked sufficient market power to ensure a dangerous probability of success and consequent serious threat of monopolization.

d. not actionable because Platte River lacked sufficient market power to ensure a dangerous probability of success and consequent serious threat of monopolization.

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.

an important rule to keep in mind is that the offeree (the buyer) controls the acceptance and thus the resulting contract

false

Aerospace, Inc., makes and sells flight navigation equipment, through independent salespersons, to retailers for resale to consumers. The Magnuson-Moss Warranty Act covers a. implied warranties, oral statements, and written promises. b. only implied warranties that consumers are aware of. c. only a salesperson's oral statements. d. only a seller's written promises.

d. only a seller's written promises.

To fall under the Sherman Act, an activity must a. involve monopolization. b. involve international trade. c. promote competition. d. substantially affect interstate commerce.

d. substantially affect interstate commerce.

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.

Daniel owns a small business that he is considering selling. He contracts with Blair, a business attorney, to provide him with legal advice on the sale of his business. Daniel's contract with Blair is governed by: a. Article 2 of the UCC. b. Article 2A of the UCC. c. Article 6 of the UCC. d. the common law of contracts.

d. the common law of contracts

A suit is filed against AgriSeeds Corporation, alleging that the firm commit-ted the offense of monopolization. To determine whether AgriSeeds has monopoly power requires looking at a. the company's size alone. b. the marketing practices of the company's competitors. c. production methods and marketing techniques. d. the relevant geographic market and the relevant product market.

d. the relevant geographic market and the relevant product market.

Space Trips Inc. files a registration statement with the SEC before making an offering to the general public. The registration contains false, immaterial statements of which the investors are unaware. Space Trips is charged with violating the Securities Act of 1933. Space Trips's best defense is a. the investors were aware of the misrepresentations b. the issuer reasonably believed the misstatements were true c. the offering made available to the general public d. the untrue statements were not material

d. the untrue statements were not material

eBookstore Corporation files a registration statement with the Securities and Exchange Commission 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. government regulators to disclose to the general public. b. sophisticated investors only. c. market professionals to explain to all investors. d. unsophisticated investors.

d. unsophisticated investors.

Chip's Chips Company agrees to supply Delicioso Café with all the corn chips that it re¬quires for a year. A sudden demand for ethanol results in a shortage of corn, and the price rises sharply. Chip's asks Delicioso 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.

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.

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.

if voidable contract is avoided, the promisee, but not the promisor is released from it

false

Brian, an agent for Clarion Motors, Inc., writes a letter on behalf of Clarion Motors to Dina on November 1 stating that he will sell her a 2016 Subaru Outback for $20,000 between November 1 and December 31. Brian's letter to Dina is a. an option contract. b. an acceptance. c. none of the choices. d. a merchant's firm offer.

d. a merchant's firm offer.

Manufacturing Corporation orders twelve safety videos from Productions, Inc., which delivers the videos. This is most likely a. a lease of goods. b. a service contract. c. a gift. d. a sale of goods.

d. a sale of goods.

Jacob offers to sell Bill a collection of baseball cards. For their transaction to be a sale under the UCC, Bill a. must pay for the cards in cash. b. must pay the fair market value of the cards. c. must pay for the cards with services. d. may pay for the cards with cash, goods, or services.

d. may pay for the cards with cash, goods, or services.

Ed's Electric substantially performs its contract with Forest Hills Apartments, Inc., to deliver and install an alarm system and parking lot lighting. Forest Hills is entitled to

damages.

Trail Bike Corporation is a public company whose shares are traded in the public securities markets. Under the Securities Act of 1933, Trail Bike is required to

disclose financial and other information about its securities.

The term monopoly is defined as "control of a single market by a single entity" in XXXX.

economic theory

Stella is fifteen. In most states, for contractual purposes, Stella would be considered a minor until she it

eighteen

For products that are sold nationally, the geographic boundaries of the market can XXXX the entire United States.

encompass

intoxicated but still capable for comprehending the consequences of her actions, Cricket signs a contrast to sell her phone app design to Downloads, Inc. This contract is

enforceable

Trade associations XXXX information among members and represent the members' business interests before governmental bodies.

exchange

Illya owes Jenny $1,000. In a separate deal, Kasey owes Illya $1,000. Illya unconditionally assigns his rights in the deal with Kasey to Jenny. Illya's right to the $1,000 is then

extinguished.

In concentrated industries, trade associations have often been used as a means to XXXX anticompetitive actions, such as fixing prices or allocating markets.

facilitate

A contract entered into by a minor is voidable at the option of either of the contracting parties

false

A divestiture is an order to a company to cease, or divest itself of, its anticompetitive conduct.

false

A group boycott is not a per se violation.

false

A person who has been determined by a court to be mentally competent cannot form a legally binding contract with another party

false

A price-fixing agreement is an agreement by two or more sellers to boycott a particular person or firm.

false

A price-fixing agreement that is reasonable does not violate antitrust law.

false

An agreement that is deemed a per se violation will be examined by a court to determine whether the agreement's benefits outweigh its anticompetitive effects.

false

Conditioning the sale of one product on the purchase of another is an exclusive-dealing contract.

false

If a contractural promise if not fulfilled, the person who made it is not subject to the sanctions of a court

false

Market concentration refers to the number of firms in the market.

false

No offer may be revoked before it is accepted

false

No person may be a director for two competing corporations at the same time.

false

Predatory pricing involves selling a product at prices substantially above the fair market value.

false

Section 1 of the Sherman Act condemns monopolization.

false

Territorial and consumer restrictions are per se violations.

false

The offense of monopolization does not require the intent to monopolize.

false

The primary measure of monopoly power is a competitor's assessment of the acts of a firm under review.

false

Under an exclusive-dealing contract, a seller promises a buyer a certain territory in which the buyer will have no direct competition.

false

a contract entered into by an intoxicated person is never valid

false

a contract involving property of any kind must be in writing to be enforceable

false

a request or invitation to negotaite an offer

false

a statement of future intent "i plan to sell my car" is an offer

false

an acceptance can impose new conditions or change the terms of the original offer without rejecting it

false

Kari, a real estate agent, assures Linc that a certain parcel of commercial property fronts on the most highly trafficked street in Metro City. Linc buys the property and then discovers that the street has no more traffic than any other in its vicinity. Linc is most likely a victim of

fraud.

iggy tells jade, "imight sell the snwboarrd that i bought this winter since i havent used it and the season is almost over" this is a statemtn of

future intent

Adrian, the chief executive officer of Beds+Sofas, Inc., intentionally understates the amount of Beds+Sofas' debts in information provided to investors as part of an issue of Beds+Sofas' stock. Cassie buys the stock and suffers a loss. Adrian may be subject to

government prosecution and Cassie's suit.

Reale Properties, LP, is a limited partnership. Its limited partners include more than sixty sophisticated investors and investment professionals. Each Reale limited partner

has no right to participate in the firms management

Section 1 of the Sherman Act prohibits price discrimination exclusive dealing horizontal and vertical restraints tying arrangements

horizontal and vertical restraint

Pure-Bred and Hearty-Made are two makers of dog food and they agree that Pure-Bred will sell its lamb and rice dog food in New Jersey, but not Delaware and vise versa for Hearty-Made. Their agreement is a vertical agreement horizontal market division resale price maintenance agreement refusal to deal

horizontal market division

Lewis, an employee of Silos, Inc., makes a substantial mathematical error in totaling the estimated costs for a project for which AgriCo-op is seeking bids. Consequently, Silos's bid is significantly low.

if AgriCo-op knew or should have known of the mistake.

Gourmet Foods, Inc., requires all distributors of its products to sell them at a specified minimum price. Under the Sherman Act, this is a violation

if the anticompetitive effects outweigh the competitive benefits.

Refer to Fact Pattern 13-1. Any contract with AgriCo-op that includes the mistake may be rescinded

if the error was made inadvertently and without gross negligence.

To raise $120 million to expand operations, Premiere Movies Corporation makes a stock offering directly to sixty accredited investors and twenty sophisticated, but unaccredited investors. Premiere Movies plans to notify the SEC of sales. Under the Securities Act of 1933, this issue may qualify as an "exempt" transaction

if the offering is also made available to the general public?

Sophie and Tiny incorporate their beverage-container business as U-Twist Products, Inc. The first board of directors may be appointed by the firm's

incorporators

The geographic market is that section of the country within which a firm can XXXX its price without attracting new sellers or without losing many customers.

increase

HVAC Heating & Air Conditioning, Inc., is a public company whose shares are traded in the public securities markets. Under the Sarbanes-Oxley Act of 2002, to ensure that HVAC's financial results are accurate and timely, the firm's senior officers must set up and maintain

internal "disclosure controls and procedures."

chicken and eggs farms promises to pay dex $500 to install a sump pump in its warehouse. Dex completes the installation. The act of installing the pump

is not sufficient consideration becuase it is not goods or money

Leigh wants to go into the business of construction contracting. Among the reasons that would probably convince Leigh to set up his business as a sole proprietorship would be

its greater organizational flexibility

Refer to Fact Pattern 21-2. Under the Securities Exchange Act of 1934, Giselle is most likely

liable for insider trading.

Refer to Fact Pattern 21-3. Under the Securities Exchange Act of 1934, Fay is most likely

liable for insider trading.

Refer to Fact Pattern 21-3. Under the Securities Exchange Act of 1934, Geoff is most likely

liable for insider trading.

Antitrust laws are direct descendants of common law actions that promote discrimination limit restraint of trade prohibit nuisance limit breach of contract.

limit restraint of trade

The critical consideration in most merger cases is geographic concentration ability to price fix market concentration vertical integration.

market concentration

The power of a firm to control the market price of its product. A monopoly has the greatest degree of market power.

market power

To determine if a monopoly exists, the U.S. Supreme Court has defined monopolization as involving the following two elements: 1. The possession of monopoly power in the relevant XXXX; and 2. The XXXX acquisition or maintenance of the power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident

market, willful

A trade association

may be legal if it is sufficiently beneficial to both the association and the public.

Ed, Jon, and Phoebe do business as Reliable Movers. Phoebe develops a debilitating illness and can no longer work. Phoebe

may dissociate from the partnership

Resourced Minerals Inc. agrees to deliver ten tons of coal to Static Energy Corporation. The agreement states that delivery is to be within "9" days, although the parties intend "90" days. Resourced Minerals cannot convince Static Energy to amend the contract. Resourced Minerals should seek

reformation

Karin, an officer for Liquified Natural Gas Corporation (LNG), buys 10,000 shares of LNG stock. One week later, LNG announces that it will merge with a competitor, Mining & Piping Company, and the price of LNG stock increases. One month later, Karin sells her shares for a profit. Under Section 16(b) of the Securities Exchange Act of 1934, Karin would not be liable if, after buying the stock, she had waited

more than six months to sell it.

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

no one

Jolie signs a contract with, Keaton, an unlicensed physician, to perform plastic surgery- a medical procedure. This contract is enforceable by

no one

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.

Kelby enters into a contract with Lara on a social media network to buy her stock in mobile devices corp. neither party prints out a hard copy. Under the electronic signatures in global and national commerce act (esign act) this contract can

not be "denied legal effect" solely becuase it is an electronic form

Genovese Contracting Inc. agrees to build a warehouse for Hawthorne Wholesale Distributors. When Genpvese runs into the types of difficulties that contractors ordinarily confront, Hawthorne agrees to pay extra compensation to overcome them, Regarding the agreement to pay more, a court would likely

not enforce it

Seth offers to buy a house from Tia for less than Tia paid for it, stating that he would "hate to see anything bad happen to Tia or her house." Tia agrees to sell. Regarding this agreement, a court would likely

not enforce it.

Refer to Fact Pattern 21-1. If Drilling Tools is exempt from the federal registration requirement, Drilling Tools is

not necessarily exempt under a state registration requirement.

Byron agrees to sell to Charity, for $1,500, a remote parcel of land. They be-lieve the land to be worthless, but beneath it is a gold mine. Byron can

not rescind the contract.

Refer to Fact Pattern 21-2. If Eddie is liable under the Securities Ex-change Act of 1934, it will be because the information on which he based his purchase of Fresh Dairy stock was

not yet public.

Water Rites, LLC, enters into a contract to site and dig a well for Rancho Verde. Water Rites completely performs. Rancho Verde is entitled to

nothing more.

Section 2 of the Sherman Antitrust Act applies to XXXX.

one person or two or more persons.

Global Resources Corporation, and its officers, directors, and shareholders, buy and sell securities. Section 10(b) of the Securities Exchange Act of 1934 applies to the purchase or sale of a security

only involving short-swing profits.

Dharma enters into a contract to manage the operations of Esther's dental office for one year, renewable for subsequent one-year terms. If this contract is discharged like most contracts, it will be

performed

Jeri and Knute are members of Lighthouse Tours LLC, a limited liability company. With respect to Lighthouse Tours's liability, as members, Jeri and Knute are shielded from

personal liability

predatory pricing

A court deems an agreement between Silver Saddles Saddlery and Time Tested Tack, Inc. to be a per se violation of the Sherman Act. The court is

prevented from determining whether the agreement's benefits outweigh its anticompetitive effects.

to drive its competitors out of a certain geographic segment of its market, Fryin' Potatoes, Inc., sets the prices of its products below cost for the buyers in that area. This is

price discrimination.

Each of the following may violate the Clayton Act except: price discrimination price fixing tying arrangements exclusive dealings contracts

price fixing

All of the following are exempt from federal antitrust laws except labor union professional baseball professional football insurance companies

professional football

Builders, Inc., agrees to construct an office building for Champion Hotels. The project proceeds according to plan, but before it is done, Champion tells Builders to quit. Builders may recover

profits plus the costs incurred up to the time of the breach.

mark is creating nu2u.com a web site through which he will enter into contracts over the internet. Important terms to include in his offer include

provision specifying the remedies if the contract is breached

Boats and Yachts Corporation is a public company, which California regulates and in which Dorian invests. The Sarbanes-Oxley Act of 2002 introduced direct federal corporate governance requirements to

public companies.

Drake 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, Drake learns that Eve does not have access to any unique software and files a suit against her, alleging fraud. Proof of an injury is required to

recover damages.

reduce the compliance costs by not requiring an auditor report.

Odina signs a covenant not to compete with her employer, Penultimate Sales Corp. A court decides that the covenant is overly restrictive. Depending on the jurisdiction, the court will likely

reform its terms to prevent any undue burden

An act must substantially affect interstate commerce to violate antitrust law.

true

Rikki agrees to sell her Sunrise Breakfast Café to Tia. As part of the deal, Rikki signs a covenant not to open a competing business within a hundred-mile radius for ten years. If this covenant is later determined to be unreasonable, the appropriate remedy is most likely

reformation

Fabien offers to sell his graphic signs llc, business to hana for 100000. hana replies "the price is too high. I will buy it for 75000 hana has

rejected the offer and made a counteroffer

Shoes & Sox Corporation is a public company whose shares are traded in the public securities markets. With respect to financial and other significant information concerning its securities, the Securities Act of 1933

requires disclosure.

Following negotiations, Office Park, Inc., enters into an informal contract with Quality Janitorial Company for custodial services for Office Park's buildings. This means that the parties contract

requires no special form

rescind the contract on the basis of fraud.

Mona is induced by her guardian Newt to sign a contract to invest her student loan funds in Overseas Bank through Newt's investment firm. Unknown to Mona, Newt realizes ongoing commissions from the investment. Most likely, Mona may

rescind the contract on the basis of undue influence.

Panini Vittles Inc. contracts with Qino deliver its sandwiches. Later, the parties decide to cancel their contract. They can

rescind their contract to the extent that it is executory

Rural Power 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. The parties rescind the contract. Shovel's refund of the payment is

restitution.

Generally, the XXXX is applied to many of these horizontal actions.

rule of reason

Reba is a director of Quantum Mechanix Corporation. Reba's rights, as a director, do not include a right to

self-dealing

OnSpec, Inc., and its officers, directors, and shareholders, buy and sell securities. Section 16(b) of the Securities Exchange Act of 1934 covers purchases and sales of securities involving

short-swing profits.

A monopoly is a market in which there is a XXXX or a XXXX.

single seller, very limited number of sellers.

Ambrose enters into a contract to buy 350 acres from Belle Vista Farms to cultivate grapes and open a winery. If Ambrose breaches the contract, Belle Vista's remedy would most likely be

specific performance

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

specific performance

Trade associations also frequently are involved in setting regulatory XXXX to govern the industry profession

standards

Fresh Vegetables, Inc., a wholesaler, refuses to sell its produce to Good Mart Stores, Inc., a retailer. This is

subject to analysis under the rule of reason.

Carpets n' Rugs, Inc., agrees to carpet Downtown Realty's offices, using a particular brand of durable carpet. Carpets n' Rugs completes the job but uses a dif-ferent brand of wear- and weather-resistant carpeting. This is most likely

substantial performance.

To fall under the Sherman Act, an activity must

substantially affect interstate commerce

CrossCountry Trucking & Transport enters into a contract with Discount Outlet Stores to load, transport, deliver, and unload the cargo that Discount designates. CrossCountry's offer to perform, when the company is ready, willing, and able to do so, is

tender.

A franchise agreement between Software2 Company and Games3, Inc., is silent on a time for termination of the franchise. Software2 may

terminate on reasonable notice

Skyla and Terry want to form and do business as Unbound Games Corporation. Most statutes governing the formation and use of corporations are guided by

the Revised Model Business Corporation Act.

Raul is chairman of the board of Swif-Vac Corporation. Pinky, a consumer, is injured while using a Swif-Vac product. Pinky sues Swif-Vac, and Raul individually. Swif-Vac may pay Raul's legal fees under

the director's right to indemnification

Antitrust legislation was created because of the belief that competition leads to lower prices.

true

Cooperative research by small-business firms is exempt from antitrust law.

true

Genna is a director of Fab Stuff Corporation. Without informing Fab, Genna starts up Evertrendy, Inc., to compete with Fab. Genna is liable for breach of

the duty of loyalty

hen applying the rule of reason to determine whether an agreement violates Section 1 of the Sherman Act, a court will not consider

the effect of the agreement on international trade.

Solder Welding Corporation is a public company whose shares are traded in the public securities markets. Under the Sarbanes-Oxley Act of 2002, Solder Welding is subject to the direct corporate governance requirements of

the federal government.

Sasha contracts to buy a franchise from TrustMe Financial Consultants Inc. The contract is silent on the issue of territorial rights. When TrustMe allows a competing franchise to be established near Sasha's office, she suffers a significant loss in profits. This is most likely a violation of

the implied covenant of good faith and fair dealing.

omar asserts that a deal he enterered into with patty to sponsor and host a motivational conference for independent sales representatives is an uneforceable contract. Defenses to the enforement of a contract include

the lack of a partys voluntary consent

the loss of profit from the canceled game.

Rico does not work for Street Bikes Company, but wrongfully obtains inside information concerning the firm. Based on the information, Rico buys and sells Street Bikes stock for personal gain. The Securities and Exchange Commission prosecutes Rico, arguing that he is liable because he stole information rightfully belonging to another. This argument is

the misappropriation theory.

FreezE Yogurt Corporation provides its prospective franchisees with projected earnings figures based on actual data. FreezE Yogurt must also disclose

the number and percentage of franchisees that achieved the figures.

Lucy agrees to work for Mung Manufacturing, Ltd., as a Chinese/ English/ French translator. In determining whether a contract has been formed, an element of prime importance is

the parties intent

ethan believes that he and fiorina agreed that he would find the best location for a well on her ranch and then dig the well. in a later dispute, whether a contract was formed can be determind by

the parties statements at the time of their alleged contract

A suit is filed against Adroit Drilling Tools Corporation, alleging that the firm committed the offense of monopolization. To determine whether Adroit has monopoly power requires looking at

the relevant market.

Grain Mills Corporation is required to register its securities under Section 12 of the Securities Exchange Act of 1934. Section 14(a) of the act regulates

the solicitation of proxies from Grain Mills's shareholders.

Orbital Flights, Inc., is required to register its securities under Section 12 of the Securities Exchange Act of 1934. Section 16(b) of the act covers

the solicitation of proxies from Orbital's shareholders.

the untrue statements were not material.

Garth owns two all-terrain vehicles (ATVs), worth $1,000 and $500, re-spec-tively. Helen agrees to buy "Garth's ATV" for $750. Garth believes, in good faith, that he is selling the $500 ATV. Helen believes, in good faith, that she is buying the $1,000 ATV. In this situation

there is no contract.

Moby negotiates a contract with Nora via email. It is reasonable to infer that Moby has consented to

transact business electronically

A market division by class of customer between rival firms violates antitrust law.

true

A restraint of trade is an agreement between firms that has the effect of reducing competition in the marketplace.

true

A trade association practice or agreement that restrains trade is analyzed under the rule of reason.

BUL4310 Chapter 11 Quiz, Chapter 23 - Warranties, ch.20, Chapter 11, chapter 11-12 review, Chapter 10, BLAW Chapter 10., BLAW 310 Edwards - Chapter 11, Chapter 17 Study questions BL 556, BLAW Chpt. 7, Business Law Ch 42 MC, BLAW exam 12 part 2, Ch. 3…

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