BUS251: Chapters 1-31
Under the UCC, if the seller has not made a specific promise or representation about the product, the buyer may still be protected by a UCC-imposed _______ warranty.
implied
Generally, liquidated damages clauses are enforceable if the amount of harm caused by the breach must be ________ or _______
impossible; difficult to estimate
Partial performance can render an offer temporarily _________ because the offer concerts to a unilateral offer if the offeror makes clear that acceptance can only occur with __________.
irrevocable; performance
Each form of business entity has its attendant advantages, drawbacks, and legal consequences for the owners, known as ________, of the business.
principals
An LLC offers principals the same liability coverage as that of:
principals in corporations with pass-through taxation
Generally, a(n) ______________ refers to a plan of action and are helpful when one is operating under conditions of ____________.
strategy; uncertainty
If the product being warranted costs $_______ or more, the Magnuson-Moss Act requires that the warranty itself contain a label that _______.
$10; states the conditions of the warranty
Title to the goods does not pass, since the lessor retains it is in the form of a _____ interest in the goods.
residual
An indorsement that says "For Deposit Only" is a type of _______ that is allowed for checks.
restrictive indorsement
The simplicity of the _______ makes this entity a top choice for start-up businesses with relatively low annual revenues and expenses.
sole proprietorship
_______ have no oversight committees (such as a board of directors), do not require any agreements among principals, and may be converted to another form of entity.
sole proprietorships
A ____________ specifically identifies the party to whom the instrument is to be payable.
special indorsement
The principle of ________ requires all lower courts, such as trial courts, to follow the case precedent, meaning that any similar case from that point in time onward would be decided according to the _________.
stare decisis; precedent
In general, contracts for services are governed by ___________.
state common law
A(n) _______ transaction carries all the legal liabilities accrued by that business over its past and all of the risks that company faces in its commercial environment.
stock purchase
In a(n) ________, a buyer buys the shares but does not control the target company being purchased.
stock purchase
Attorneys who play an active role in helping the business person translate the important terms of the contract are called ________.
strategically qualified attorneys
Carlos is a member of an LLC along with three others. After one year, despite their best efforts, the business closes and the bank that extended them a loan sues for repayment. The bank may:
sue the LLC but may not sue Carlos
Finance leases involve a relationship among three separate parties: the _______, the _______, and the finance _______.
supplier; lessee; lessor
A franchise agreement that covers _______ rights usually provides the franchisee with an exclusive geographic area.
territory
If the time of delivery is not specified in a contract, the UCC provides _______.
that delivery take place at a reasonable time under the circumstances.
All of the following are characteristics of a general partnership except:
the association is only recognized in the state of incorporation
If performance of the contracted obligation becomes illegal, then the contract may be discharged by law based on _____________.
the doctrine of impossibility
If a person to an agreement lacks capacity, that person may challenge the agreement if ______________ chooses to do so.
the person who lacked capacity
The right to cure may exist after the time period for performance has come due, if _____________.
the seller believes the nonconforming goods will be acceptable
The shipment of nonconforming goods by the seller means that the risk of loss remains with the seller until _______, or _______.
the seller corrects the problem; the buyer accepts the goods
When a contract has the required elements, it is called a(n) _________ contract.
valid
The law has evolved to protect consumers and largely eliminate the privity of _________ requirement.
warranty
To avoid the property provision, before the partnership is started, a partner must decide: _______ or _______.
whether the property is owned individually; whether the property is a capital contribution
Morgan downloads some software for a video gaming system. By completing the download she agrees to the terms in what type of agreement?
Browse-wrap
_______ damages are damages that the parties agree to ahead of time and written into contract.
Liquidated
The _______ Act regulates warranties given by a seller or lessor to a consumer but does not apply to purely _______ transactions.
Magnuson-Moss Warranty; merchant
Sprite and Gerizon were competing cellular phone services providers that decide they want to combine their companies to become Sperizon and dominate more of the cellular phone service market. This is an example of:
a merger
A(n) _______ is a written note that indicates a bank has received money as a loan and promises to repay the amount in the future with interest.
certificate of deposit
Generally speaking, _______ applies to contracts involving the provision of services, while _______ applies to contracts involving the sale of goods.
common law; Article 2 of the UCC
Fraud generally arises out of affirmative promises, but sometimes fraud may occur when one party actively ____________ a ___________ fact.
conceals; material
__________ is similar to course of performance in that both refer to patterns of performance by the parties.
course of dealing
The RULLC attempts to clarify the following two matters: _______ and the _______
deadlocks; rights of departing LLC members
A paradigm for ethical decision-making may include: ___________.
defining the dilemma, identifying the impact, applying standards.
A partner is entitled to a(n) _______ under the default rules.
equal share of profits
Statutory law is created by a legislative body and approved or disapproved by the _______ branch of government.
executive
Suppose that your neighbor's child is playing catch with her friends and she hits a ball through your front window. You and your neighbor agree that if she pays for the cost of replacement, you'll promise not to file an insurance claim. Your promise not to file a claim, also called _________, is legal consideration.
forbearance
A limited partnership has at least one _______ partner (managing principal) and at least one _______ partner (investing principal).
general; limited
Click wrap agreements are __________.
generally enforceable.
Option contracts for an offer that is __________.
irrevocable
__________ by the parties that one party may be unable to perform despite both parties' best efforts can result in anticipatory repudiation.
knowledge
A(n) _______ partnership is an entity that exists by virtue of a state statute and has at least one general partner and one _______ partner.
limited; limited
According to the UCC, a(n) ________ is one who is regularly engaged in the sale of that product or who holds herself out as having knowledge or skill peculiar to the practices or goods involved in the transaction.
merchant
Suppose the UCC governs the transaction between Sam Seller and Bob Buyer, and Bob orders 1,000 widgets from Sam. If the widgets are acceptable when delivered, Bob _______.
must make full payment for the goods
A(n) _______ mistake in which both parties hold an erroneous belief, may be the basis for canceling (or avoiding) a contract.
mutual
If a party is claiming impossibility, the circumstances must make performance __________ impossible.
objectively
When a contract is missing key provisions of the contract it is called a(n):
open contract
The UCC's approach toward _______ terms is its _______ role because the UCC provides a variety of answers based on what terms are missing.
open; gap-filling
Partnership and agency law governs the relationship between the partnership and outside third parties and cannot be altered by a(n) _______ agreement.
partnership
A partnership where the partners have not agreed to remain partners until the expiration of a definite term or event is known as:
partnership at will
Like _______ agreements, _______ agreements cover many of the internal rules for the actual operation of the business, including a flexibility in terms of the rights and responsibilities of each member.
partnership; operating
With regard to taxation, LLPs are treated as:
pass-through entities
A check that states the magic words of negotiability, "_______" assumes a strict formality required by the UCC, and is considered a negotiable instrument.
pay to the order of John Mason; pay to bearer; pay to cash
Suppose Tom promises to pay Joe $1,500 on September 1st. Assuming all other requirements are met, this is a negotiable instrument because it is _________.
payable at a definite time
If a corporation is a start-up or has limited assets, creditors will almost always require that the shareholders give a(n) _______.
personal guarantee
A condition _________ requires that an event must occur ___________ performance under a contract is due.
precedent; before
_______ loans are typically through individuals who negotiate such items as interest rate directly with the proprietor.
private
The origins of LLPs were rooted in protection of:
professional service partnerships
In a general partnership:
profits and losses may be unequally split based on the partnership agreement
Examples of illusory promises include: ____________, ____________, and _________.
promises of a gift, promises of love and friendship, deathbed promises
When an individual begins to carry out a business venture's activities before actually filing the articles of incorporation, the individual is known as a(n) _______.
promoter
A buyer must give notice to the seller of a breach of warranty within a _________ tie after the breach is discovered.
reasonable
Suppose Sam Seller ships 100 widgets to Bob Buyer. Unless the parties have agreed otherwise, under the UCC Bob has a(n) _______ time period to _______ the goods to be sure they conform to the contract.
reasonable; inspect
The UCC requires the court to determine a _______ price at the _______, based on industry customs and market value.
reasonable; time of delivery
If a partner within the ordinary course of business makes a payment on behalf of the partnership, the partner must be _______ for the expense.
reimbursed
To create a __________ offer the offeror agrees to hold an offer open for a certain period of time in exchange for ____________.
firm; consideration
A transaction in which the board of a target company has no prior knowledge of an acquirer's purchase offer is called a:
hostile takeover
A requirement for a lease to qualify as a finance lease is that the finance lessor's acquisition of the goods must be "_______."
"in connection with the lease"
Japheth offers to purchase a wedding cake from Edible Dreams Bakery for $400.00. He states they have two days to accept the offer. This is an example of which type of offer?
A firm offer
An act of God, or something that is beyond our control is called __________.
Force Majeur
Purchasing a soda from a soda machine is an example of a ____________ contract.
Implied
Maddie cannot read. She signs a cell phone agreement without being able to read the document. This is an example of __________.
Information asymmetry
_________ is demonstrated when parties to a contract indicate through words or behaviors that they willingly agree to enter into a contract.
Mutual assent
Limited partnerships may not sell ownership rights through the ______.
NYSE; NASDAQ
Business Corporation Law is an example of what type of law?
Public law
What must be present under the UCC for title to a good to pass to a buyer at the time of contract creation?
The good must actually exist at the time of creation of the contract and it must be identified to the contract.
Nobel Prize-winning economist Milton Friedman believed that __________.
The only responsibility a business has is to maximize shareholder wealth
In the example of MF Global case study, accord to the House of Representatives report, John Corzine created an environment in the company __________________.
Where no one could challenge his decision, thereby impeding any processes for monitoring conduct.
A check is a specialized type of order and draft payable on demand and drawn on ______.
a bank
One of the first considerations for principals forming a corporation is _______.
choosing the state in which to incorporate
The age when an individual becomes an adult is an example of a __________.
bright-line rule
The "________ test" is useful when deciding whether a manager or a company is acting in an ethical manner by asking "How would I feel if my business decision was announced on public social media or the national news?"
broadcast news
If a party to a contract breaks her promise to the other party she might be liable for ____________ contract.
breach of
Illegal contracts are _________.
void
A negotiable instrument(s) is/are payable:
"to order;" "to bearer;" "to cash" (all of the above)
Standardized, preprinted contracts are called _____________.
Adhesion contracts
If Joe leases a car from Tom Terrific dealership, most likely the lease is governed by _________ of the UCC.
Article 2A
Knowing ___________ is essential because the leasing industry now makes up a large part of the modern economy.
Article 2A
Negotiable instruments are subject to __________ of the Uniform Commercial Code held.
Article 3 of the Uniform Commercial Code
The Code of Hammurabi is a ____________ legal code that dates back to 1754 BC, most of which deals with contract law.
Babylonian
The court in Hadley v. Baxendale ruled in favor of _______ because _______ had not shown that a _______ person could have foreseen the plaintiffs ongoing damages.
Baxendale; Hadley; reasonable
In the __________ v. American Electric Power Services Corp., the court ruled _______ who had signed an employment agreement that assigned all of his rights for any invention made in the scope of employment to his employer "in consideration of the sum of One Dollar" even though the $1 was never paid.
Bennett; against the employee
A document that shows a delivery of title is:
Bill of lading
Christin and Paola operate a business in which both have contributed $50,000 to the business's capitalization. Christin makes all business decisions, and Paola made Christin sign a partnership agreement saying that Paola is liable only for partnership debts up to $50,000.
Christin is a general partner, and Paola is a limited power
The _______ sets and enforces regulations on some industries and the courts are highly _________ agency decisions and enforcement.
EPA; deferential to
____________ is derived from the courts.
Equity law
The International Chamber of Commerce abbreviation indicating that goods are to be delivered by the seller to the carrier for shipment is:
FOB
When the parties perform the contract, the courts presume ____________ is present
Good faith
In Birdsong v. Apple, Inc., Birdsong brought a class action suit against Apple, alleging that iPod owners had suffered hearing loss using the iPod earbuds set at the highest decibel level. Birdsong claimed Apple breached an implied warranty of merchantability.
In favor of Apple because the ordinary use of the iPod was to listen to music and the product was fit for that use.
When one person has more or better information than the other is an example of __________.
Information asymmetry
Your Business Law professor walks into a regularly scheduled class today and states that she will not teach class unless each student enrolled in the class pays her $5.00 to teach today. Does consideration exist?
No. While money has legal value, the service of teaching the class is a pre existing duty.
_________ means that constitutional law is supreme over other sources of law such as state statutes
Preemption
Modern legal doctrines have evolved into a relatively complex system of _________________.
Principles and protections.
_________ law sets a structure and rules for pursuing ___________ rights.
Procedural, substantive
Under the _______ partners do not have rights to _______ partnership property.
RUPA; specific
_________ law provide individuals with rights and create certain duties.
Substantive
What type of damages are often allowed in fraud cases?
Treble damages
Evan promises to pay Joseph $100.00 if he does not swear for the entire weekend. This is an example of a ___________ contract.
Unilateral
A disagreement among partners is resolved through ______, and a _______ is usually required to win.
a vote; majority vote
Not all contracts require ___________ to be enforceable, nor must a contract be in a prescribed format.
a writing
A(n) _________ agreement is one where the terms of an agreement are located on a website, but the user does not have the opportunity to click "I agree."
browse-wrap
_______ is the Latin term meaning "buyer beware."
caveat emptor
A(n) _______ loan is usually collateralized by an asset of equivalent value typically consisting of the proprietor's personal assets to get a lower interest rate.
commercial
Corporations often borrow money from either: _______ or _______ to fund day-to-day operations.
corporate lenders; private investors
Courts will sometimes pierce the corporate veil when _______ demands it.
fairness
True or false: Both the common law and the UCC have the same inflexible requirements for written contracts.
false
A(n) _______ should be thought of as a method of conducting business that centers on a contractual relationship rather than as a business entity.
franchise
A secured transaction occurs when the seller retains a security _____ in the goods being sold.
interest
Selling a loan that is a negotiable instrument, such as a promissory note, offers:
liquidity; encourages lending; provides an investment opportunity for the purchaser (all of the above)
The parties _______ add a liquidated damages provision to define and limit the amount of monetary damages in the event of a breach.
may
Parties to the contract who are _________, _________, or ________ may lack the required capacity to enter into an enforceable contract.
minors; mentally incapacitated, or intoxicated
Under the RUPA, a partnership agreement may _______ the fiduciary duties.
not completely eliminate
Technically, substantial performance is a deviation from the agreement that is __________, which means the deviation did not change the fundamental basis of the agreement.
not material
The seller has a duty under the UCC to __________ the goods to the buyer.
tender; perfectly
With regard to consideration in a sales contract, the UCC differs from the common law that:
terms of a sales contract may be modified without additional consideration.
The source of warranty law is governed under:
the UCC
A(n) _______ partnership is legally defined as: (1) an association of two or more people (2) who are co-owners and co-managers of the business and (3) who share in the profits of their ongoing business.
general
LLP statutes provide ______ partnerships with the right to convert their entity and gain the protective shield ordinarily afforded only to limited partners or corporate shareholders.
general
In a limited partnership, _______ partners manage the business but _______ partners may not participate in daily management of the business.
general; limited
If the time for the seller's performance has not expired, the seller may cure by (1) ______ and (2) ______.
giving notice of her intent to cure; tendering conforming goods to replace rejected goods
The _______ standard requires that partners exercise appropriate discretion in dealing with other partners and third parties concerning the partnership's business.
good faith
_______ is defined in the UCC as "honesty" in fact in the conduct or transaction
good faith
A(n) _______ is someone who acts honestly and provides ________ value for the goods.
good faith buyer; reasonable
In analyzing the corporate opportunity doctrine, courts look for _______ and _______.
good faith; disclosure
In order to prevail in a substantial performance case, the party trying to enforce the contract must show that she acted in ___________ and that any deviation from the required performance was _________.
good faith; not material
The law recognizes a party's __________ effort to substantially perform her obligations by allowing that performance to satisfy the requirements of the agreement and trigger the other party's _____________.
good faith; obligation to perform
Bundy's Bicycle Corporation, a U.S. corporation, had a windfall year in profits and is looking for legal loopholes to avoid paying taxes on its massive profit. To avoid taxes Bundy's merges with a foreign business, simply to avoid paying for taxes in a proces called _________.
Corporate inversion
Mandy, a minor, disaffirms an agreement to purchase a car from Jamie, an adult, for $1,000.00. Must Mandy give back the car?
Yes, in order to disaffirm it, the minor must return whatever consideration received.
A franchise conducts business:
according to an established contract
Unlike a(n) _______, an LLC does not issue shares.
corporation
The UCC provides both ________and ______ relief for parties who acted in good faith and sustained damages through no fault of their own.
legal; equitable
Modern legal doctrines have evolved into a relatively complex system of : _________________________.
principles and protections
If the goods do not exist at the time of contracting, title ____________ transferred to the buyer.
cannot
Absent specific agreements between the parties, the reasonableness requirement of the UCC governing delivery of goods requires each of the following except:
the goods must be delivered on a weekday
Contract obligations also may be discharged under certain circumstances through ____________ where fairness demands it.
the operation of law
Limited Liability means that:
the owners' personal assets are insulated from any business debts or liability if the LLC fails
A(n) ____________ nonprofit is typically a(n) __________ entity created for the purpose of serving the community and has no ___________.
community-based; tax-exempt; shareholders
When Jill, a homeowner, hires Tom to mow her lawn, the exchange of the cash paid and the service rendered (mowing the lawn) is the contract ____________.
consideration
A(n) _______ occurs when the offeree rejects the original offer and proposes a new offer with different terms.
counteroffer
An offer may be terminated by action of the parties in one of three ways ________, _________, or ___________.
counteroffer; revocation; rejection
The ______ is a method to show what the parties intended through their own actions in performing the specific contract in question.
course of peformance
What may be a method to show what the parties intended through their own actions in performing the specific contract in question?
course of performance
A(n) personal guarantee allows a _______ to obtain a judgment against the personal assets of one or more shareholders in the event of a default by the corporation. (Choose two correct answers)
creditor
A charge of homicide would be a violation of ______ law.
criminal
The ______ UCC provisions are connected to the notion of a(n) _______ contract which fully specifies the rights and duties of the parties to the contract.
Article 2; complete
Examples of contracts against public policy include all of the following except for a(n) ____________. A) contract for an unreasonable restraint against trade. B) contract for a reasonable restraint against trade. C) agreement between public corporations that interferes with their public duties. D) agreement to procure government contracts by political influence.
B.
Which of the following is not an example of when a contract must be in writing according to the statute of frauds? A) Sadie sells Shirley five acres of land. B) Reid agrees to cosign on Gabrielle's student loan. C) Jeff agrees to mow Julie's lawn for $100.00. D) Jessica sells her car to Tina for $5,000.00.
C.
_________ law is the foundation for all other law in the United States and is the _________ law of the land.
Constitutional; supreme
Examples of characteristics of individuals who lack capacity include all of the following except: A) Minors B) Intoxicated individuals C) Mental Incompetents D) Impulsive Individuals
D.
The _______ is the federal regulatory authority that oversees the regulation of franchisors.
Federal Trade Commission (FTC)
An operating agreement generally includes the following aspects of the LLC: _______.
Governing structure; dissolution; voting rights
The utilitarian approach to moral philosophy was founded by __________.
Jeremy Bentham
The requirement that both the subject matter and performance of a contract must be legal is called __________.
Legality
_________ that causes a person injury would be an example of civil law.
Negligence
What involves a third party solution?
Novation
LLPs are capitalized in the same way as a partnership, through _______ or _______.
debt; equity
A state's appellate court has made a decision in a particular case. That decision becomes case precedent in all cases except the cases heard in _________.
The state's appellate supreme or highest court
If a contract does not state when the title will pass, the UCC will apply ______ to determine when the title passes.
default rules
Provisions of UCC Article 2 can be used as a(n) _________, and if an unexpected problem does occur, courts will then apply those default rules to fill any gaps in a contract.
default rules
_______ contracts require the seller to deliver the goods to a specified destination.
destination
Under both _______ and ______, each partner has the right to be informed of the partnership's business.
UPA; RUPA
__________, although rare, may occur in the case where a contract is so burdensome to one party that is can provide a legal defense to enforcement.
Unconscionability
A business securing patents for all of their creations and inventions is an example of what type of business strategy?
Value Creation
ABC Technologies sells to Devon a television with a fair market value of $1,000.00. According to the UCC, must this contract be in writing to be enforceable?
Yes as contracts with goods with a total value of $500.00 or more must be in writing to be enforceable.
If a contract does not require shipment the title of goods passes to the buyer when the seller delivers ________ to the buyer.
documents of title
Which of the following require(s) a formal filing to be recognized as a valid business entity?
a limited partnership
One of the reasons an additional term in a contract between merchants would not automatically be included in a contract is that the term proposes ________ that diverges _______ from those in the offer.
a material term; significantly
Jenny owes Jamie $100 to repay a short-term loan they agreed to one evening at a restaurant. They signed this agreement on a bar napkin. Jamie owes Johnny $100 for babysitting services. Jamie can order Jenny to pay Johnny because it is:
a negotiable instrument
Courts employ the objective theory of contracts to determine if _____________.
a reasonable person would believe the offeror's actions or words indicated that person was serious when making the offer.
The UCC is important because _________.
every state has not adopted all, or substantially all, of the provisions of the UCC
If the buyer purchases goods from the seller's __________ of goods that are for sale, the goods are in fact ___________.
existing inventory; identified
A(n) _______ (or takeover) is the purchase of one company by another company and the acquired company "disappears."
acquisition
Situations that require a unanimous vote under the RUPA include: _______.
admission of a. new partner; acts outside the ordinary course of business; amending the partnership agreement)
The goal of a default rule is to _____________.
allow the court to fill in the gaps to save an incomplete contract.
In order to have mutual asset, there must be ___________________.
an offer and an acceptance that is the precise mirror image of the offer.
In a(n) _______, a buyer buys the assets of the target company which leaves the target company as an empty shell if the buyer buys out all of its assets.
asset
The RULLCA does not allow any manager or member to avoid personal liability based on her _______ or _______.
bad faith; willful misconduct
Conforming goods simply means the goods ________ in an agreement.
bargained for
When someone goes to a store to purchase a lawnmower the exchange of goods (the lawnmower and the debit and the debit card (cash) payment) is consideration, which is also called a(n) __________.
bargained-for exchange
Courts have held that a crucial factor in determining the validity of a _________ agreement is whether the user was given actual notice or _________ of the website's terms and conditions.
browse-wrap; constructive notice
Good faith is defined in the UCC as "honesty in _______ in the conduct or transaction concerned"
fact
A(n) _______ agreement allows remaining partners to purchase the partnership interest of a(n) _______ partner.
buy-sell; withdrawing
Under the UCC, there are four critical dates that impact the rights and duties of the _____ and _______ and the availability of remedies to either of them.
buyer; seller
A responsibility to act in the best interests of a partnership by the partners is called a(n):
fiduciary duty
Because it is not a taxable entity, an LLP:
files an information tax return
A(n) _______ by a merchant is _________ under the Uniform Commercial Code.
firm offer; irrevocable
As long as the offer ________, the offeree may accept the terms of the offer, thereby forming an agreement.
has not been terminated
A dramatic type of acquisition is the so-called _______, when the board of a target company has no prior knowledge of an acquirer's purchase offer.
hostile takeover
In the ________ case, a federal court held that a networking company that entered into a(n) ________ to purchase software was bound by a provision that severely limited to software manufacturer's liability in the event of a dispute.
i.Lan, Inc. v. NetScout; click-wrap
Goods in the contract become _______ when the seller marks, ships, or separates the goods for sale to the buyer.
identified
Unlike an accord and satisfaction, a substitute agreement ___________ any obligations under the original contract.
immediately discharges
Anderson (A) agrees to sell Wal-Smart (WS) 5,000 bicycles. Prior to the A-WS contract, A contracted with BicycleManufacturer (BM), to supply him with 5,000 bicycles. BM halts production and cannot produce all the Bicycles for A. In this case, A may be discharged by _______ based on the means of performance.
impossibility
The doctrine of ___________ may seek to discharge the contractual obligations of the subject matter of the contract is destroyed.
impossibility
Anticipatory repudiation can occur when action by the promisor renders her performance _________.
impossible
An offer is the expression of a willingness to enter into a contract by the offeror's promising an offeree that she will perform certain obligations _________ some legal benefit from the offeree.
in exchange for
Under Section 1-201 of the UCC, a good faith buyer _______ may acquire valid title to goods that were entrusted to a _______ seller.
in the ordinary course of business; merchant
If counsel is a part of the executive management team the counsel is referred to as __________.
in-house counsel/general counsel
One important factor courts consider in piercing the corporate veil is _______.
inadequate capitalization
A non-material representation is often called __________ misrepresentation, as a distinguished from ____________ misrepresentation.
innocent; fraudulent
Parties may wish to _______ goods under various scenarios after the goods have been purchased to cover losses or damage to the goods.
insure; inherit
Currently, LLPs are often used to protect family businesses as they provide a way to resolve
issues of family fiduciary duties and rights to represent and bind the businesses
What is an advantage of a Subchapter S corporation that a standard corporation does not have?
it does not face double taxation
Which statement below is correct about a sole proprietorship?
it has low start-up costs and minimal filing.
Black's Law Dictionary, first published in 1891, is the authoritative source for _________.
legal terms
Warranties are recognized as _______ enforceable promises under state statutory laws based on Article 2 of the UCC.
legally
The ________, who acquires the right to the temporary possession and use of goods under a lease.
lessee
Generally, if Joe leases a car from Tom Terrific Motors, Joe would be the _______ and Tom Terrific would be the _______.
lessee; lessor
As long as a contract satisfies the writing requirement of the UCC, any other terms not included in the writing:
may be proven by testimony and evidence concerning oral agreements.
Eduardo emails Skyler "Hey, I will sell you my Business Law text for $50.00." Skyler immediately responds "$50??!! Cool! YES!" This is an example that illustrates what concept of contract formation?
meeting of the minds
Article 2 of the UCC facilitates business transactions by providing both _________ and ___________ with a standard set of default rules for the sale of goods.
merchants; consumers
The fulfillment of __________ stipulated in a contract generally ____________ contractual duties and legally terminates a contract.
mutual promises; discharges
If Sammy Seller has shipped _______ parts to to Megan Manufacturer and Megan accepts them, the UCC allows Megan to revoke her acceptance only if the _______ the value of the goods.
nonconforming; nonconformity substantially impairs
A corporation formed to maintain a charitable operation is called a:
nonprofit corporation
A(n) _______ lacks any type of language that seeks to limit the negotiability of an instrument or conditions to its payment or transfer.
nonrestrictive indorsement
When a new third-party is substituted for one of the original parties, the original agreement is discharged by a(n) ____________.
novation
Essentially, a(n) ___________ is a form of a substitute agreement that involves a substitute ____________ rather than a substitute promise.
novation; third party
Bill and Tom are heavily intoxicated and after his 9th beer, Bill says to Tom, "I'll sell you my hunting truck for a 6 pack of beer," and they shake hands on it. The next day, Tom comes with a six pack and asks for the keys. Bill doesn't remember a thing and refuses to hand over the keys. The issue is whether Bill had __________.
objective intent
The corporation's _______ are hired by the board and carry out the day-to-day operations of the corporation, by executing the strategy and mandates set out by the board of directors.
officers
The amount and methods of capitalizing an LLC are often controlled by the:
operating agreement
An offer is irrevocable in the form of a(n) ________ contract or is detrimentally __________.
option; relied upon
Suppose Carol owes Joseph $5,000 to repay a loan, and that Joseph owes Bruce $5,000 for the purchase of a car. Joseph can order Carol to pay Bruce, and if the _______ is in the correct form, it can be considered a(n) _______.
order; negotiable instrument
The main difference between a lease and a sale is that the sale transfers ________ to the goods from the seller to the buyer, while a lease does not transfer title.
ownership
A(n) __________ breach is not material and does not concern a fundamental aspect of the agreement.
partial
In the Jacob and Youngs v. Kent case, the court held that the breach was ______ and awarded the _______ party equal to the difference in price between the contracted-to brand pipe and the pipe actually used.
partial; nonbreaching
What must be included in a finance lease?
parties; goods; time for performance
Business firms must ensure that their contracts are not only ____________ but also _____________.
properly formed; legally enforceable
Just laws and outcomes must balance competing interests to achieve a(n) _______ that is fair and balanced for the parties involved and those similarly situated.
proportional outcome
The United States Postal System is an example of what type of corporation?
public
Legality of __________ means that contracts that are contrary to existing laws or public policy are likely to be rendered enforceable.
purpose
Fundamentally, officers and directors must exercise the degree of skill, diligence, and care that a(n) _______ would exercise under the same circumstances.
reasonably prudent person
If the parties have imperfectly expressed their agreement which results in a dispute, a court may _______ the contract by modifying it to more accurately conform to _______.
reform; the parties' actual intentions
When an anticipatory ________ occurs, the nonbreaching party __________.
repudiation; may file suit immediately
Fraudulent misrepresentation requires __________.
scienter
Inadequate capitalization may mean that a corporation is a(n) _______ company with nothing invested, or that _______ siphoned the profits and assets.
shell; shareholders
Most states recognize at least ______ forms of business entities.
six
Duress is based on the __________ of the paties.
subjective belief
In Smith v. Van Gorkom, the court considered whether the business judgment rule protected board members who permitted the sale of a significant amount of stock by the retiring chairman of the board at an undervalued price, devaluing the company. Regarding the board's liability, in this case, the court stated each of the following except:
the board in this case had the expertise to make decisions without consulting outside experts but made a poor decision.
The underlying policy goal of Article 2 of the UCC is to: _______ and _______.
the completion of business transactions; promote commercial efficiency
If the contract does not require shipping or the delivery of documents of title, title passes to the buyer when ________ and the goods _________.
the contract is effective; are identified
The business judgment rule protects officers and directors from liability for decisions that may have been unwise but did not breach ______.
the duty of care
Under the perfect tender rule:
the goods must match the contract terms in every respect
Suppose Marvin Manufacturer ships 1,500 widgets to Sally Supplier via an installment contract. After arrival of the widgets, if Sally discovers the widgets in this installment are nonconforming, she has the right under the UCC to reject the entire installment if _______, and _______.
the nonconformity cannot be cured; the nonconformity substantially impairs the value of the entire installment
A buyer can accept one installment without giving up the right to reject any additional installments that are nonconforming which is an exception to:
the perfect tender rule
Which is true of open-price-term contracts?
the price becomes the reasonable price at the time goods are delivered
The right to cure may exist after the time period for performance has come due, if ________.
the seller believes the nonconforming goods will be acceptable
Under the theory of promissory estoppel, a relying party may recover damages if ___________, ____________, and ____________.
there is a justified reliance by the promise, there is a reasonable promise made by the promisor, reliance was reasonably foreseeable
All of the following statements about a hostile takeover are true except:
there must be some preexisting animosity between the competing boards
Which of the following is not true regarding venture capital firms?
they are generally long-term investors
The buyer's primary obligation _______ is triggered when the seller tenders delivery of conforming goods (aka the ______ rule).
to pay; perfect tender
The main goal of both the ULLCA and the RULLCA is:
to promote uniformity among various state LLC laws
Generally, a person is in _________ of her contract when she fails to fulfill a fundamental term of the contract.
total breach; material breach
Reid Sterling owns a sole proprietorship called Dunkle Distributing. Dunkle Distributing is a:
trade name
A negotiation is the various steps used to _______ a negotiable instrument from party to party through a legally defined process.
transfer
The sale of goods is governed by the UCC and involves the _______ from a seller to a buyer.
transfer of title
The parties may craft their own remedies in their sales agreements, but UCC terms will apply if the terms are declared _________.
unconscionable
Will and Kendrick live in a state that requires that contracts involving transactions over $500 to be in writing. If they enter a verbal agreement to buy a car for $1,500, this contract is _________.
unenforceable
Suppose Joe contracts with Marvin to frame out a shop at Joe's ranch for $10,000. During the framing Marvin discovers the costs of framing will be $2,500 more than he anticipated, and threatens to walk off the job unless Joe agrees to pay the additional $2,500. Joe agrees to the price increase. Most courts today would hold the agreement to pay the additional $2,500 to be _______ the agreement based on a(n) __________.
unenforceable; preexisting duty
The purpose behind a secondary source of law is to increase the level of _________ and __________ across courts in all 50 states.
uniformity
When examining whether the business judgment rule applies, most courts look at the following factors: _______.
used the best information available; rational belief; no private interest
The consequence-based approach stems from the _______ stream of moral philosophy which states that an action is ethically sound if.it produces _______ or the least harm for most people.
utilitarian; positive results
Which of the following statements about a stock purchase is correct?
when one purchases a controlling share of stocks in a corporation, all of the debts and liabilities that were incurred in the past carries over in the purchase
If a contract requires the seller to deliver goods to a common freight carrier who will transport the goods to the buyer's location, title passes _________.
when the seller delivers the goods to a common freight carrier
The UCC permits disclaimers of warranties:
when the seller disclaims properly
In order to determine if a de facto merger occurred the courts will consider all of the following factors except:
whether the reasonable person would have determined that a merger occured
Liquidated damages clauses _______ be enforced if the amount is unreasonably high and functions as a penalty.
will not
Leases of goods under Article 2A of the Uniform Commercial Code (UCC)
1C
Ethical dilemmas face by managers ________.
Are often complex, with no clear ethical choice.
In Lucy v. Zehmer, the court ruled that under the objective theory of contracts ___________.
Lucy and Zehmer's conduct and language would be viewed by a reasonable person as a serious intent to contract.
In terms of intoxication, in the ______________ case, even though the parties had been drinking alcohol, the contract to sell Zehmer's farm was upheld because of _______________.
Lucy v. Zehmer; objective intent
Aimee and Claire both own their own bakeries in Edwardsville. They both agree with each other to sell their cupcakes for $5.00. Is this contract enforceable?
No as it is a restraint on trade which is against public policy
"What if everyone took these same actions?" is a question sometimes called the ___________.
Universalization approach
An action by a minor to avoid obligations under a contract that has been performed is _____________.
a disaffirmance
A draft involves three parties:
a drawer, a drawee, and a payee
A partnership is considered fully terminated:
after winding up
Kant's idea of the _________, a moral test to help individuals decide right from wrong, is a central theme in his work.
categorical imperative
Sole proprietors may raise money through _______ loans which is a more formal process from a lender such as a bank.
commercial
The UCC provides that if delivery and billing are done in two or more separate lots for cash flow or other business reasons the parties may do so via the use of a(n) _______ contract.
installment
For an implied warranty of fitness for a particular purpose to exist, the buyer must prove the following two elements: the seller _______ and the buyer _______.
knew of buyer's plan to use the product in a particular way; relied on the seller's advice and reccomendation
The term ______ has been defined in a variety of ways throughout history.
law
Before a party can be legally bound to a contract, he must have the capacity to understand and appreciate contract terms. There are capacity issues for: _______________, _______________, and _____________.
mental incompetents; intoxicated persons; minors
The law imposes an obligation on the parties in a contract to _______ their damages, by taking appropriate steps to avoid incurring damages and losses.
mitigate
Under the UCC, _______ is defined as a medium of exchange authorized or adopted by a domestic or foreign government.
money
Jed wants to pass his sole proprietorship on to his son Luke in his will. Can her do this?
no.
Suppose that ABC Law Firm located in Idaho makes Tom an offer to join the firm conditioned on Tom being licenced to practice Law in Idaho, and to remain in good standing during his employment. The condition to be licensed is a condition __________, and remaining in good standing is a condition ____________ to his employment.
precedent; subsequent
Event-related conditions fall under three general categories: conditions ____________, conditions ____________, or conditions _____________.
precedent; subsequent; concurrent
Generally a unilateral mistake is not grounds to cancel a contract, unless the nonmistaken party had: _____________ or ____________.
reason to know of the mistake; her actions caused the mistake
A lack of genuine assent occurs in cases of: __________, ____________, _____________, and ____________.
undue influence; duress; fraud; misrepresentation
A promise that can be accepted only be the performance of the person to whom it is offered is an example of a _______________.
unilateral contract
A(n) _______ does not include any language that limits the indorser's nonpayment liability.
unqualified indorsement
Under the UCC, if the total payments to be made under the lease are $_______ or more (excluding payments for options to renew or buy) the lease must be in writing.
$1,000
What is the minimum amount that a product must cost to require a label starting condition of the warranty under the Magnuson-Moss Act?
$10
What section of the UCC requires the seller to guarantee that the goods are free of any security interests or lein?
2-312 implied warranty of title
In his book, __________ (1971) John Rawls imagines a world in which people negotiate their own ethical rules and principles for themselves.
A Theory of Justice
Monmouth Publishing employs very brilliant attorneys to search through the laws to find legal loopholes that benefit their profit margin. They find a legal loophole which allows them to require a certain sect of employees to work far under minimum wage, often times taking advantage of people. Therefore, they decide to fire all of their current employees in favor of the sect of employees they can pay under minimum wage. Are they acting unethically?
A particular act can be deemed unethical yet still be legal.
Bill is a very skilled attorney with a very strong background in Latin. Therefore, when he writes contracts for his clients, he uses much legalese and Latin legal terminology as possible. Which statement below is correct? A) Whenever possible, an attorney should avoid legalese and instead use plain-English to make contracts easier to understand. B) Whenever possible, an attorney should use as much legalese so as to make the contract difficult to understand by anyone except an attorney. C) Whenever possible, an attorney should use as many Latin terms in a contract so that it looks professional. D) Contracts must contain as much legalese as possible to make it clear and enforceable.
A.
To date, how many states in the US have adopted all or substantial portions of the Revised Uniform Partnership Act?
About 80 percent, 40 states
_________ law is the source of law that authorizes the exercise of authority by executive branch agencies and independent government agencies.
Administrative
Michael Motors enter into a business contract with Charles to sell Charles a car. The contract specifically states that upon the date that both parties sign the contract, Michael motors is not responsible for any damages that occur to the car during delivery to Charles' house. This is an example of what type of default rule?
Allocating Risk
____________ terms are constructed by the court against the interest of the the side that drafted the agreement and if the contract is silent on a term courts may supply a(n) _________ term.
Ambiguous; reasonable
Virtue ethics which dates back to ________, evaluates conduct based on whether it promotes good moral character.
Aristotle
Marty Company, located in Illinois, learns that the state of Illinois will be increasing taxes on all businesses. Before the tax goes into effect, Marty Company relocates to Missouri where taxes are far lower on businesses. This type of business strategy is called __________.
Avoidance
In 1971 Poorwa offered to sell her new Ford Mustang to Tom for $2,000.00. Tom asked to think about her offer and get back to Poorwa. 40 years later, Tom realizes Poorwa still has the Mustang that is now worth $121,000.00. He calls up Poorwa and says that he has finally had time to think about it and now accepts Poorwa's offer from 1971 to buy the Mustang at $2,000.00. Which statement below is correct? A) Since the facts do not indicate that Poorwa ever formally revoked the offer, it remained open and Tom's acceptance created mutual assent. B) Since Poorwa allowed Tom to think about it, the offer remained open until Tom notified her of his decision. C) The offer terminated after a reasonable amount of time had lapsed. D) All offers under the Uniform Commercial Code automatically terminate after 10 years.
C.
Japan for example, does not rely extensively on precedent, but rather adheres to a strict interpretation of a legislatively established code or regulation. What type of system of law is that called?
Civil law system
Angel, a financial consultant, enters into a contract to advise Randy about the best investments given in his financial situation. She writes down everything she states and gives it to Randy in a binder. Which source of law would apply?
Common law
___________ occurs when the minor attempts to avoid obligation under a contract, even though the contract has been partially performed.
Disaffirmance
Meghan has some very embarrassing pictures of Kalieh. Meghan tells Kalieh that she will post the pictures all over various social media accounts unless Kalieh agrees to sell Meghan an antique wedding ring for $500.00. Out of feat that Meghan will indeed publish the pictures, Kalieh agrees to sell the ring for $500.00. Kalieh will be able to claim defense of __________.
Duress
True or false: All parties have the duty to disclose all information to each other when forming a contract.
False
True or false: Discharge of an accord and satisfaction obligation occurs only when the terms of the accord are promised.
False
Gabrielle purchase a coffee press from Coffees R Us! to be delivered. When packing the product at Coffees R Us! the employee accidentally breaks it, but ships it anyway. When the box is delivered to Gabrielle's house she accepts the sealed box and immediately runs into the house to open the box. She immediately notices that the coffee press is broken and calls Coffees R Us! to request her money back. What will most likely be the outcome of this situation under the UCC?
Gabrielle may reject the broken coffee press
The knowing and voluntary and mutual approval of the terms of contract by each party required for a contract to be enforceable is ______________.
Genuine assent
A recognition that we all have the rights to "life, liberty, and the pursuit of happiness" in the Preamble of the Declaration of Independence, according to Natural law, is a recognition of what type of rights?
Inherent
While driving across the country, Katherine and Ryan play their favorite game, "What would you do if you won the Mega-millions lottery?" Katherine states, "If I won the Mega-million I would give you $10,000,000.00." Two years later, Katherine actually wins the Mega-millions and Ryan demands his promised money. Katherine refused. What would most likely be the outcome of this case?
Katherine's statement is an illusory promise; therefore, the court will not enforce it.
_________ is characterized by long, complex sentences written in a passive voice with many embedded clauses that employ obscure archaic terms such as "hereby," "sayeth," or "witnesseth".
Legalese
Nobel Prize-winning economist _________ proposed that the only responsibility in a business has is to maximize shareholder wealth (the ________ theory)
Milton Friedman; maximizing profits
Suppose Nayeli tells Sam, if you mow my lawn I will pay you $25. Does the offer become irrevocable if Sam begins to mow the lawn?
Most likely yes, because of partial performance
Gigi Hilonder, an up and coming tennis star on the tennis circuit, travels to Atlanta to compete in a tournament. Officer Grand, an Atlanta police officer on duty during her tournament, offers to give Gigi "added" security for an additional $100 a day, by standing outside her door and promising to aid her before anyone else should she need it. Gigi readily agrees as her popularity is skyrocketing and her fans are intrusive. Is this a contract?
No because a public officer cannot accept greater pay other than what is fixed by law as it is against public policy
Triton Industries hires Carolyne to make aprons at their plant for sale in the Triton Industries Store. Will Article 2 of the UCC apply to the terms of the contract?
No because employment contracts do not involve the sale of goods.
Dawn offers Tom $1000.00 to create a social media marketing campaign for her new shoe business. In the letter that she sends to job with this offer, she states, "if you accept this job, please sign this form and return it to me in the self-addressed stamped envelope by Friday." Tom immediately texts Dawn, "Hi Dawn! I happily will do your marketing." Has Tom accepted the offer?
No because if the offer specifies a method of acceptance, that is the only effective method to accept.
Black Cat Corp. wishes to conduct an asset purchase of Shylo Inc. so that it does not incur the unpaid taxes debt that Black Cat acquired prior to the asset purchase. Will the asset purchase achieve this goal?
No because taxes are an exception to the rule that debts and liabilities do not transfer to the buyer with and asset purchase.
Lorna visited Beaulah, her hairstylist every Friday of her adult life to have her hair fixed. She always paid a week ahead of time to ensure that Beaulah always reserved the time the following week. In between visits, Lorna dies and her family asked Beaulah to come to the funeral home and fix Lorna's hair there. Beaulah refuses. Will Lorna's family be successful in a breach of contract case because Beaulah refuses to fix Lorna's hair after her death?
No because the death of one of the parties of the contract makes the contract impossible and thus the parties are discharged.
Kristen hires Gabby to babysit her three kids for the day. As soon as Gabby sees Kristen pull out of the driveway, she tells the kids to be quiet and just sit there because she wants to sleep. While Gabby sleeps, the wild children destroy the house. Is Kristen obligated to pay Gabby the price she agreed for babysitting?
No because while courts do not require perfect performance, they do require a good faith attempt at perfect performance
Caleb contracts with Eliza to beat up Mickey for $50.00. Is that agreement enforceable?
No it is illegal
Suppose on Monday 1st, April emails Nicole and offers to sell her car to Nicole for $12,000. The offer expires Friday the 5th at noon. Suppose further that Nicole responds to the offer at 3:30pm. Is there a contract?
No, Nicole's response is a counteroffer.
Gelissa receives her car as a graduation gift from her grandma. Two days after her grandma gives her the car it breaks down and costs Gelissa a substantial amount of money to repair. Can Gelissa sue her grandma for damages for a breach of contract as her grandma gave her a defective car?
No, a contract was formed as it lacked a key element of a contract, consideration.
Suppose on September 11, Tom sends an email to Joe revoking Tom's offer. Joe is away from the office, but Joe's administrative assistant receives the email, but Joe never actually sees the email. The next day, from his hotel room in Tokyo, Joe called Tom to accept Tom's offer made on September 11. Does a contract exist?
No, because Joe's agent received the email and because Joe made a counter offer.
Pitzer Medical Services enters in to an agreement with Doctor Jones to sell him a kidney of a person who is willing to sell one of his kidneys. The sale of body organs is illegal, however, all parties to this situation are entering into the agreement willingly, voluntarily and will full-knowledge of the circumstances. The agreement even states this in it. Therefore, will the courts enforce the agreement as a business contract?
No, mandatory rules cannot be overridden even if the parties specifically address it.
Shannon Steamers, a carpet cleaning business, enters into a contract with Danyelle to clean her carpeting and also sell her carpet spot remover solution in a bottle. Will Article 2 of the UCC apply in this situation?
No, since the main purpose of the contract is the service of cleaning the contract.
Suppose Pottery Barn sells an antique chair to Margaret, an ordinary consumer. On the sales contract Margaret writes in "conditioned 90 day sale on approval by my husband James" but Pottery Barn does not initial the terms. Under the UCC, do the terms become a part of the sales contract?
No, the contract is formed as originally offered.
Suppose Tom works at Wal-Smart as an at-will employee. One day Wal-Smart management threatens to terminate Tom because a customer complained. If Tom continues to work at Wal-Smart, can he sue Wal-Smart for duress?
No, the threat by Wal-Smart was lawful and not duress
Each day that Tara goes to work she parks on the streets in front of an expired meter. She is fully aware she will get a $3.00 parking ticket each time that she does this. The closest parking lot charges $100.00 a month to park there. Therefore, Tara decides that it is cheaper to disregard the law because benefit outweighs the cost in that it is cheaper for her to pay the daily parking ticket than the monthly rate for the parking lot. This type of strategy is called ____________.
Non-compliance
What is an example that falls under the one-year rule of the statute of frauds?
Shana hires Robert to do her homework for three years.
_________ attorneys have the skills and qualifications to work with managers to generate opportunities and value.
Strategically qualified
The "general counsel," may also ____________.
Supervise one or more attorneys, usually called "associate counsel"
Hannah shops at a high-end doggy boutique and purchases a designer dog collar for $3,500.00. As soon as she got home, she put it on her dog who wore it for a couple of days. After a few days, she realized that she could not afford the collar and did not really like it. She attempted to return it to the store and they refused. Hannah filed suit against the store stating they charged way too much for their products and made and unfair and unreasonable profit. What would most likely be the outcome of the case?
The court will rule that as long as Hannah understood her actions there was consideration as two things of legal value were exchanged.
Makybuya Futbol World ordered 500 U.S.A. replica soccer jerseys from Smith Apparel, a sports apparel manufacturer. The jerseys were to be delivered to Makubuya's place of business. When the shipment arrived, Makubuya discovered that it received 500 pairs of replica shorts but no jerseys. Before Makubuya could notify Smith and return the shorts, a fire destroyed the building in which the shorts were stored. Which of the following statements is true?
This was a destination contract and the shorts were nonconforming goods, so Smith did not complete the performance and retained the risk of loss.
Bosco Bibles sells 500 Bibles to Liberty Christian Academy. Due to the value and importance of the shipment, Bosco Bibles and Liberty Christian Academy want to purchase insurance to cover the Bibles while in transit for delivery and specify it in the contract itself. Which statement below is correct according to the UCC?
This would be considered overlapping insurance and the UCC does allow it.
___________, was a medieval theologian who developed the theory which state natural law is given by God; it is the authoritative over all human beings; and it is knowable through the use of reason.
Thomas Aquinas
_________ is the legal term for a claim of ownership to property.
Title
Cell phone contracts are examples of which type of contract?
Transactional
Which of the following statements about a franchise is correct?
a franchise faces mandatory disclosures/
When a seller ships _______ goods the buyer is protected against _________.
a risk of loss; nonconforming
Which of the following does not require a duty of care or good faith to other principals?
a sole proprietorship
Black's Law Dictionary, as cited in the textbook, defines "law" as including each of the following except _____________.
a tool for regulating personal ethics.
An offer of a reward, if it is fulfilled, forms ___________.
a unilateral contract
If the promises to perform in a contract are not conditional, the duty to perform is __________.
absolute
Courts are suspicious of pre-printed _________ contracts, because the nondrafter did not bargain for the terms of the agreement.
adhesion
A Verizon cell phone contract is an example of a(n) ____________.
adhesion contract
A requirement for a finance lease is that one of four stated methods must be used to give the lessee _______ of applicable warranties and promises by the supplier.
advance notice
As a practical matter, seller representations are often made through ____________.
advertising
A law imposes a(n) ___________ duty of ___________ and fair dealing in performing contract obligations.
affirmative; good faith
Generally, a minor need not do any __________ act in order to derive the benefit of this general rule of __________.
affirmative; voidability
If a term in a contract is ambiguous and unclear, when interpreting the term the court will generally construe the terms ___________.
against the drafter
A corporation formed outside the United States that transacts business in the United States is known as a(n) _______.
alien corporation
How many states have adopted the Uniform Commercial Code?
all
The UCC Article 2 rules apply to _________, unless the parties explicitly agree to override it with a different rule of their choosing.
all parties to a transaction
Today, _______ recognize LLCs and provide both procedural (formation) and internal default rules (in the event the parties are unable to agree otherwise) for the operation of LLCs.
all states
Where the language is not unequivocal but more _______, or when _______ is the basis for determining the repudiation, the analysis is more complex and may not equal anticipatory repudiation.
ambiguous; conduct
All of the following statements are true about double taxation except:
an LLC cannot face double-taxation
When the seller makes a promise regarding the goods or a representation of fact about the goods, this is known as:
an express warranty
Habana4U (H4U) promises to buy 1,000 Cuban cigars from HonduranCigarMaker (HCM) who will import them via the Dominican Republic. Subsequent to the agreement, but before HCM ships the cigars, Congress passes a federal statute imposing a complete trade embargo on the Dominican Republic. Under the circumstances the parties _______.
are discharged from their obligations based on illegality
To form a corporation, principals file _______ with a state authority that sets out the corporation's name, purpose, number of shares issued, and address of the corporation's headquarters.
articles of incorporation
An LLC is formed by filing the _______ (also called the certificate of organization) with the designated public official in that state, such as the secretary of state or the state's corporation bureau.
articles of organization
Two of the major advantages of a pass-through entity are that investors can _______ and _______.
assume the tax deductions and losses; earnings can be distributed without double taxation
Article 2 requires that payment is due _______ of where the seller is to make delivery, and may be made in _______ form.
at the time and place; any commercially reasonable
Business owners who rely exclusively on ____________ to drive the legal decision-making process may create significant risks for the business.
attorneys
For the adversely affected party to cancel the contract, the mistake must concern a ____________ on which the contract was made.
bassic assumption
When merchants have conflicting terms and forms, the UCC provides guidelines to resolve disputes on the "_______."
battle of the forms
Under UCC Section 2-313, if the goods turn out not to have the advertised qualities, the buyer may sue for _______.
breach of an express warranty
In the Baxter v. Ford Motor Co. case, the court held that a buyer who had reasonably relied on the "shatterproof" representations and had no reason to suspect they were false, could sue for ______.
breach of express warranty
All of the following are hostile takeover defense strategies except:
budet bidding
To claim protection under the _______ rule, a director must have had no financial self-interest (or _______) in the disputed transactions or decision. (Choose two correct answers)
business judgement, self-dealing; duty of loyalty, self-dealing
A corporation's _______ typically specify the date, time, and place for the annual shareholders meetings, as well as the number of officers and directors of the corporation.
bylaws
Which is not an example of a warranty? a. merchantability. b. express. c. puffery. c. fitness for a particular purpose.
c.
Default rules ________ at the time they enter into their contract because the parties can 'overrule' or __________.
can be modified by the parties; create their own terms and conditions
Directors owe shareholders a special fiduciary duty of _____ as well as a duty of ______.
care; loyalty
The UCC requires contracts for over $500 to be in writing for _________ and __________ reasons.
cautionary;evidentiary
If Big Bank issues a written note to Joseph that indicates Bank has received $1,500 as a loan and promises to repay the amount in the future with interest, this would be an example of a(n) _______.
certificate of deposit (COD)
A(n) ____________ is based on an Internet transaction where a website provider posts terms and conditions and the user clicks an "I Accept" button located on the web page of the purchase.
click-wrap agreement
________ is the property subject to a security interest.
collateral
Historically, recorded law was initially a(n) __________ made by a powerful tribal chieftain to perpetuate his domination.
collection of rules
The UCC applies the _______ rule when the nondelivery of goods has been made impracticable by the occurrence of an unanticipated event, and the unanticipated event directly affects a basic assumption of the contract.
commercial impracticability
What source of law applies to service contracts?
common law
Recall that _______ contracts must be supported by _______ and most contracts involving non-sale-of-goods contracts cannot be modified without some additional consideration.
common law; bargained-for consideration
Article 2 of the UCC provide that that the acceptance of an offer in a sales contract is not as rigid as the _______ rules, allowing for an acceptance to be made in any "_______."
common law; reasonable manner
In a lawsuit for breach of contact, money damages are primarily limited to: _______, _______, and _______.
compensatory damages; restitution damages; consequential damages
A(n) ___________ is an event which can alter the ___________ obligations stipulated under the contract.
condition; performance
Goods that exactly meet the specifications of a contract are called:
conforming goods
A buyer may incur incidental and _______ damages at any point due to the seller's breach.
consequential
Commitment in a contract relates to the required element of _________.
consideration
_________ requires both sides to obtain something of value (legal benefit) and to give up something of value (legal detriment)
consideration
__________ is defined as the mutual exchange of benefits and detriments.
consideration
Proper _______ require(s) that the parties suffer some type of ______ that the law recognizes as adequate.
consideration; detriment
The UCC does require _______ to support a sales contract, but unlike the common law, does not require additional consideration for contracts to be ________.
consideration; modified
Over the course of three millennia, the purpose of law evolved to ensure __________________.
consistency and fairness.
In the United States, examples of primary sources of law would include: ____________________.
constitutional law, statutory law, common law
A __________ is defined as one who purchases or leases a good with the intent of using it for personal reasons rather than for resale or use in a business.
consumer
A(n) buy-sell agreement helps ensure the _______ of the partnership business and can avoid legal disputes if a valuation methodology is provided.
continuity
The seller may breach the contract if he delivers nonconforming goods or goods that are not the type described in the ________.
contract
When a contract for the sale of goods is missing provisions such as delivery, quantity and payment terms, under the UCC the ___________________.
contract will be acceptable so long as the contract shows that the parties intended to enter into a contract.
The statute of frauds applies to the following types of contracts: ___________________, ________________, _______________.
contracts for the sale of land; contracts for the sale of goods for $500 or more; contracts in contemplation of marriage
Under the statute of frauds, the one year rule states _________.
contracts that by their very terms cannot possibly be completed within a year must be in writing.
A sole proprietorship is generally not subject to _______ income taxation, and no tax return is filed on behalf of the business.
corporate
In a minority of the states, the articles of incorporation are called the:
corporate charter
The broad view of CSR involves the notion of "________" which means a business should strive to promote the economic, legal, ethical, and philanthropic social responsibilities expected of it by its stakeholders.
corporate citizenship
Even after commencement of business operations, officers and directors have a responsibility to comply with _______.
corporate formalities
In examining the _______ doctrine, courts consider whether the officer, director, or controlling shareholder learned of the opportunity because of his role in the corporation.
corporate opportunity
Generally, the ___ shields shareholders, directors, and officers of a corporation from personal liability in case the corporation runs up large debts.
corporate veil
Compared to other entities, a(n) _______ has perhaps the most formal filing and reporting requirements.
corporation
An attorney in the business context is called ________.
counsel
Karen offers to sing five songs at Meyer's wedding for $500.00. Meyer responds that he will pay her $500.00, but he needs to sing six songs. Meyer's actions constitute a ___________.
counter offer
Suppose Tom (seller) and Joe (buyer) have a contract that calls for "top shelf scotch" to be delivered in five installments over the course of a year. The _________ between the parties would be based on the quality of the first installment of scotch delivered by Tom and accepted by Joe.
course of performance
Statutory law is ___________.
created by the legislative branch and approved by the executive branch
LLCs are mainly capitalized via _______ or through the sale of _______ ownership in the LLC itself.
debt; equity
Limited partnerships are generally funded either through _______ (e.g., by borrowing money from the principals or a commercial lender) or by selling _______ (e.g., by selling a percentage of ownership rights in the partnership and any profits of the business).
debt; equity
Because LLPs are pass-through entities, _______ are _______ and may sometimes help to reduce taxes on other sources of revenue on the individual's tax return.
deductible; losses
The best business practice for those tasked with creating is contract is to ___________.
define any unclear terms within the contract itself
A seller's primary duty is to ______ to the buyer that match what was bargained for in the agreement.
deliver conforming goods
If Tom signs a promissory note to Joseph for $1,000 and there is no date, the note would be called a(n) ________.
demand note
The best values management programs also provide either a(n) __________ or a(n) _____________ to report any violations.
direct contact person; anonymous hotline
When a minor _________ a contract, the majority of states would rule that the minor is still entitled to the return of the consideration he parted with.
disaffirms
In order to ______ a warranty, the seller must do so in a conspicuous writing such as capital letters to bold print.
disclaim
Section 2-316(3)(b) of the UCC allows a seller to _______ defects by making the goods available to the buyer for inspection.
disclaim
The UCC allows a seller to avoid the risks associated with warranties and _______ both implied and express warranties under certain conditions.
disclaim
Statements in bold caps "AS IS" or "WITH ALL FAULTS" are most likely a(n) _______.
disclaimers of fitness for a particular purpose
Generally, parties do not have a duty to _________ to each other but some courts have held that misrepresentation can be a defense if a party has asserted a(n) ___________ that leads to an overall misrepresentation.
disclose all information; half-truth
The Federal Trade Commission regulations focus on mandatory _______ regarding the financial condition of the franchise, success rates, and other important
disclosures
A lessor may not only repossess the goods following a default by the lessee, a lessor is not required to: _______ nor _______.
dispose of the goods; distribute any proceeds
A(n) LLC _______ occurs when an individual member decides to exercise the right to withdraw from the partnership.
dissociation
Frank wants to leave his partnership and wants to stop being a principal. What is this process called?
dissociation
Linda, Nancy and Pam stated an LLC two years again. Nancy wishes to now leave the LLC. This process is called:
dissociation
The process when an individual member of an LLC exercises the right to withdraw from the partnership is called ___________.
dissociation
Under RUPA, a partner's bankruptcy is a(n) _______ by law.
dissociation
When a partner no longer wishes to be a principal in the partnership, she may choose to leave the partnership. This is called ______.
dissociation
Upon a dissociation, the remaining LLC members may decide either to continue the LLC, or to trigger a(n)_______.
dissolution
Privity of contract dealing with the _______ chain is referred to as _______ privity, and most states have done away with this requirement.
distribution; vertical privity
If Joe Just-in-Time makes widgets to order, and Carol Cupcake orders a specially manufactured widget from Joe, then at the time of her order her widget _______ and she _______.
does not exist; cannot take title
When there is a sale of goods, the seller ________ to the goods.
does not retain any ties
In the state of its incorporation, a corporation is referred to as a(n) ________.
domestic corporation
A draft has three parties: the _______ is the party issuing the payment order, the _______ is the party who must make the specified payment, to the _______ the person receiving the funds.
drawer; drawee; payee
All of the following terms are used to indicate where one company splits into two except:
duplication
Religious-based principles establish ______ that are generally not subject to exceptions, except by other religious principles such as mercy and justice.
duties
The common characteristic of American law is that it creates: ________________ that reflect accepted views of the society.
duties, obligations, and rights
Courts hold that a director breaches her _______ when she has failed to fulfill her role in oversight.
duty of care
When a party to an agreement is a member of the class of persons for whose protection to the contract was made illegal, he may either: _______________ or ______________.
enforce the agreement; obtain restitution
Suppose Bill (16 year old painter), promises Greg (20 years old) to paint Greg's house. The contract is _____________ against Greg who is not protected by the capacity rule but is ___________ by Bill.
enforceable; voidable
Unless the partnership agreement specifies otherwise, all partners have which of the following?
equal management rights
The UCC applies its warranty rules for the sale of goods to leases so the UCC has rules for _______ and _______ warranties when goods are leased.
express; implied
In a limited partnership, one of the primary differences between general partners and limited partners is: _______.
extent of day-to-day management
_________ and justice would be applied in a court of equity.
fairness
True or False: A broken engagement is an example of a force majeur.
false
True or false: Article 2 of the UCC adopts the common law's "mirror image" rule.
false
True or false: Bearer instruments should not be viewed and treated as cash.
false
True or false: Dissociation is the only way that a partnership may be dissolved.
false
True or false: LiquidatorsPlus sells Joe a washer-dryer combo for $950. The contract is governed by the common law.
false
True or false: The UCC does not require that any disclaimer of the warranty of merchantability actually use the word "merchantability" in the disclaimer.
false
True or false: The UCC requires that the promise to repay must be conditional, which means no other occurrence must happen for payment.
false
true of false: a firm offer automatically occurs when an offer or promise is made by one merchant to another.
false
The fundamental purpose of a _______ limited partnership is to enable wealthy members of one generation to _______ as a gift to heirs.
family; distribute assets
A corporation is a(n) _______ legal entity that exists as an independent individual separate from its principals.
ficticious
In some states, if Joan Gates does business as "Gates Consulting" she would file for a certificate of _________ with a local or state office.
fictitious name
Partners owe each other other several _______ duties which means acting in the partnership's best interests.
fiduciary
The duty of a partner to act in the best interests of the partnership is called ___________ duty.
fiduciary
Friedman argued that managers who pursue social initiatives with corporate funds are violating their ________ to the _________, the owners of the corporation.
fiduciary duties; shareholders
In general, members of the board of directors have a(n) _______ relationship to the shareholders of the corporation, to always act in the best interests of the corporation regardless of _______.
fiduciary; personal interests
In a(n) _______ lease transaction, lessors serve a unique middleman role that facilitates the _______ acquisition of the goods from a supplier.
finance; lessee's
In a(n) _______ lease, the lessor is not the fundamental supplier of the goods leased, but leases goods to _______ as a means of financing its acquisition from the supplier.
finance; lessees
To quality as a _______ lease under Article 2A an agreement must satisfy ______ conditions.
finance; three
If a lease is a secured transaction, the seller should file a UCC _________ with the appropriate government office.
financing statement
Sole proprietorships are limited in their options for raising money. These options include which of the following?
financing using the proprietorship's personal resources; financing the business through debt
Vehicle purchase agreements are examples of:
financing; promissory notes; negotiable instruments (All of the above)
Corporate formalities include all of the following except:
find investors
A(n) __________ offer is created under Article 2 of the UCC when a(n) ___________ offers to buy or sell goods with an explicit promise, in writing, that the offer will be held open for a certain time period.
firm; merchant
The UCC requires that all negotiable instruments be issued as _______.
fixed amounts of money
A compliance department is a unit within an organization that helps the organization: ________________-
follow rules and regulations; maintain its culture of values and ethics
A sole proprietor is liable:
for all the debts of the business
________ currency is acceptable as a basis for creating a negotiable instrument.
foreign
A business entity that has proven track record which sells to another the right to operate the business and use the business's trade secrets, trademarks and products is a:
franchise
A(n) _______ distributes its products to a broader market without the overhead costs of retail space, equipment, and employees.
franchise
Federal statutes define a(n) _______ as an arrangement of a continuing commercial relationship for the right to operate a business with a particular trade name or sell the seller's branded goods.
franchise
A franchisor sells the right to operate the business and use the business's trade secrets a(n):
franchisee
A franchise involves the two parties: the _________ who is a business entity that has a proven track record of success, who sells to a(n) _______ the right to operate the business and use the business's trade secrets, trademarks, and products.
franchisor; franchisee
The fourth exception to the successor liability doctrine occurs when there has been a(n) _______ transaction used to evade liability for debts.
fraudulent
If Ana makes statements to Carol that she knows are false, and they create an agreement based on the false representations, Ana's statements would most likely be considered ______________.
fraudulent misrepresentation
When a contract is not objectively impossible, but events transpire to destroy a party's purpose in entering into the contract, a court may discharge that party based on ________.
frustration of purpose
Sometimes unexpected events occur after the parties have formed and, depending on the facts, the law may allows the parties to be excused from their contractual obligations by: _______, _______, or ________.
frustration of purpose; impracticability; impossibility
In the absence of an agreement, the UCC provides that the buyer must make _______ at the time and place that she has _______ the goods.
full payment; received
A(n) ______ warranty must also include a term of duration whereas a(n) _______ warranty label means only that the seller does not bind itself to promises of full warranty in some way.
full; limited
In a member-managed LLC, the management structure of the entity is similar to that of a(n) _______, with all the members having the authority to bind the business.
general partnership
Two or more individuals can form a(n) _______ partnership if they have demonstrated an intent to carry on as _______ of a business for profit.
general; co-owners
In a limited partnership, the _______ partner is responsible for filing an information return with taxing authorities, but limited partnerships do not incur _________ tax liability for their profits.
general; corporate
To form a limited partnership, the _______ partner files a certificate of _______ partnership with the state government authority (usually the secretary of state's office).
general; limited
Suppose on April 1 Tom contracts with Joe to deliver 100 widgets at $10 per unit to be delivered no later than May 1. Suppose Tom delivers the 100 widgets on April 25, but Joe rejects the goods as nonconforming and notifies Joe. What options does Tom have at this point?
give notice of intent to cure; tender conforming goods on or before May 1
In the Sons of Thunder v. Borden case, the court held that a buyer breached the duty of _______ by willfully trying to circumvent its contractual obligations to a seller that made a significant investment to carry out its obligations.
good faith
The law is a catalyst for commerce because it promotes ___________ among merchants and consumers and giving some degree of ___________ that can be considered in business planning and commercial transactions.
good faith dealing; reliability
In every commercial transaction, the UCC has a good faith provision that imposes duties of ______ and _________ the bedrock of any sales contract.
good faith; commercial reasonableness
Under the UCC, a(n) ________ buyer may acquire valid ______ to goods he bought from someone who obtained the property through fraud.
good faith; title
Article 2A applies to the lease of _________, including machinery, equipment, and vehicles.
goods
According to the moderate CSR or "_________" view, it is the government's job to establish legal and regulatory guidelines for business because the government already represents the aggregate moral views of the public.
government hand
Equal share of profits in a partnership agreement allows partners to receive a _______ salary for the work they will perform on behalf of the partnership.
guaranteed
Examples of equipment that a business may lease under Article 2A include the following:
heavy machinery; telephones; cars
The second requirement before the title can pass from seller to buyer (after existence of goods) is that the goods in a contract must be __________.
identified
Exceptions to the nonenforcement rule regarding illegal contracts include all of the following: _________________.
if a party to an illegal contract rescinds before any part of the illegal purpose is carried out; when an insurance policy is illegal because the company did not use an approved form.
Some promises do not support the bargained-for exchange aspect of consideration and are considered ____________.
illusionary promises
Some promises do not support the bargained-for exchange aspects of consideration and are considered _______.
illusory promises
Being able to spot a finance lease is important, because Article 2A relieves a finance lessor of any liability for _______ warranties of quality with respect to the goods.
implied
The Magnuson-Moss Act did not create any additional ________ warranties upon which consumers can base a lawsuit.
implied
If the seller has not made a specific promise or representation about the product, the buyer may still be protected by a UCC-imposed:
implied warranty
What type of warranty conveys that the goods shall be merchantable via the contract where the seller is a merchant with respect to goods of that kind?
implied warranty of merchantability
Under UCC Section 2-315, a(n) _______ warranty arises when a seller (either a merchant or nonmerchant) promises that the product is _______.
implied; fit for a particular purpose
Art promises to paint Sally's home but prior to beginning the project, Art falls from a ladder and is hospitalized. Art is discharged based on the doctrine of ________ because he is incapacitated.
impossibility
The doctrine of _________ may discharge the obligations of the parties if the means of performance contemplated in the contract cannot be performed.
impossibility
Suppose that X and Y have a contract for Chinese-made widgets. Between the time of agreement and the time of performance the Chinese government devalued their currency by 250% and the financial terms of the contract became more burdensome. Under those circumstances a court may allow the defense of _________ and discharge the parties' obligations, if the devaluation was both unforeseeable and extreme.
impracticability
Commercial _______ is a ______ doctrine as demonstrated in the Maple Farms v. City School District of Elmira case.
impracticability; narrow
When the parties agree on the terms and complete their contractual obligations _____________, the law says their duties are ____________.
in good faith; discharged
The UCC uses a general reasonableness requirement to govern the delivery process which means the good must be delivered: (1) _______, (2) _______, and (3) _______.
in one shipment; in a reasonable manner; at a reasonable hour
Termination rights in an asset purchase agreement may:
include fees and the payment of damages caused by certain events
A(n) _______ is a signature other than that of the maker, drawer, or acceptor of the instrument, for the purpose of negotiating the instrument.
indorsement
Limited partnerships are required to file a(n) _______ return with the IRS each year.
information
UCC Section 2-312 requires merchants to warrant that goods shall be delivered free of the rightful claim of any third person claiming ________.
infringement
The most common forms of equitable relief include: _______________.
injunctions, restraining orders, and specific performance
Another term for non-breaching party to a contract is __________.
innocent party
Sometimes the nonbreaching (or _________) party has not suffered an ___________ loss and will instead turn to alternative methods, called __________.
innocent; out-of-pocket; remedies
The UCC allows the buyer to obtain a(n) _______ in the goods without title as long as the goods in the contract are ________.
insurable interest; identified to the contract (supposed to be insurable interest; risk interest on the website)
The first step in determining whether a valid offer exists is analyzing the offeror's objective __________ when making the offer.
intent
Today, courts would look at a price tag on a product in the store as a(n) ____________ and not an offer to sell at that price by the business.
invitation of the customer to make an offer
To create an agreement, a seller typically uses a(n) ______, also called a(n) ______ form, with preprinted provisions and blanks so the seller can tailor it to the specific transaction.
invoice; acknowledgement
One way to make an offer __________ is for the offeror to grant the offeree a(n) ___________ to enter a contract.
irrevocable; option
Generally, a contract that violates a statute __________ and thus will not be enforced by the courts.
is void
Legal terms are sometimes referred to as ________ or ___________.
jargon; legalese
Under RUPA, all partners face ______ liability for contract and tort-related obligations.
joint-and-several
A comprehensive understanding of law and ethics starts with the overarching notion of ________.
justice
Suppose Joe was in an accident and has a right to sue the other party, but instead agrees to accept a cash settlement in lieu of filing a lawsuit. This is an example of consideration, or ___________.
legal detriment
To find consideration, a court must hold that Party A received something of value from Party B, and both parties gave up something of value (called _________) to the other.
legal detriment
When choosing a business entity, principals should consider the following factors: _______.
liability; taxation; ease of formation (also capitalization; taxation of income; and management & operation)
The Magnuson-Moss Act allows sellers to: _______, and _______.
limit certain types of damages; set a time limit on implied warranties
Perhaps the most important feature of an LLC is the _______ of its members.
limited liability
_______ partnerships are formed when a general partnership files a statement of qualification with the appropriate public official, but the conversion of the partnership must be approved by _______ of the ownership.
limited liability; a majority
A(n) limited partner's liability is _______.
limited to the amount contributed to the partnership
A close cousin to a commercial loan is a commercial ______ which allows a proprietor to draw against a predetermined credit limit.
line of credit
The biggest advantage of a(n) _______, which is typically secured by collateral, is that the borrower only pays interest on the funds actually drawn instead of the full amount of a loan.
line of credit; secured
By law the capital contribution must be returned to each partner when the partnership assets are _______.
liquidated
In the event of breach of contract, the parties may agree in advance that _______ damages will compensate the nonbreaching party.
liquidated
Equipment that a business may lease include:
machinery
Suppose Tom, a car dealer, and Joe, a consumer, are negotiating to have a car delivered. The parties agree for 5% down to be held in escrow pending the arrival of the car within 30 days. These terms that Joe and Tom have agreed upon are considered _______ terms to the contract.
madatory
If the goods are to be picked up, the goods must be ________ to allow the buyer to take possession.
made available at a reasonable time
A promissory note has two parties: the ______ (who receives the loan) and the _______ (who extends credit and is entitled to repayment).
maker; payee
When one party to an agreement makes a promise or representation about a(n) __________ fact that is not true, the other party may avoid the contract on the basis of ______________.
material; misrepresentation
If a person materially breaches a contract, the non-breaching party __________.
may be suspended from their obligations
Mutual assent is typically referred to as a(n) "_________" because the parties have agreed to certain promises and obligations.
meeting of the minds
The owners of a limited liability company are called which of the following?
members
If the seller is a(n) _______ and promises in a signed writing to keep an offer for the sale of goods open for a period of time, under UCC Article 2 this action creates a firm offer _______.
merchant; that is irrevocable
______ have the duty to act in a(n) _______ manner by observing industry standards and practices that may be unique to a particular industry or field.
merchants; commercially reasonable
Article 2 treats '______' in special ways, and includes anyone who is _______ a particular good.
merchants; regularly engaged in the sale of
In "_______" contracts involving the sale of goods - as well services - courts apply the "predominant purpose test" to determine whether the contract is governed by UCC Article 2 or ________.
mixed; common law
Suppose Chris wins a trial and the jury awards him $25,000. This would be an example of a(n) ________.
money damage award
Generally, the legal remedy for breach of contract will be ________ awarded by the court to the nonbreaching party.
money damages
What type of remedies are available during a breach of contract?
money damages; restitutionary damages; equitable damages
Generally, the remedy for a breach of contract is _______ damages, but when one party is unjustly enriched at the other party's expense the court may grant _______ relief.
money; equitable
Ethics is the set of _______ principles or core values for deciding between right and wrong.
moral
Under the "__________" theory, corporations have a(n) __________ to which profitability is secondary.
moral minimum; social responsibility
________ are generally accepted standards of right and wrong in a given society or community.
morals
In 1997, the IRS made LLCs
more attractive by eliminating strict operating requirements for qualifying as a partnership for tax purposes
The UCC allows the buyer to pursue ________ as long as each remedy is necessary to help the buyer recover damages.
more than one remedy
A valid offer and acceptance is usually how parties demonstrate ______________.
mutual assent
An enforceable contract requires __________, also referred to simply as assent or agreement.
mutual assent
A valid contract has the following basic elements: ____________, _________, ____________, and ___________.
mutual assent; consideration; legality of purpose; capacity
Most states require the LLC articles of organization to contain only basic information, such as: _______.
name of entity; location of the principal place of business; names of owners
Commercial impracticability is a ________ doctrine.
narrow
An exception to the rule that the minor must return the consideration occurs in the case of __________.
necessaries
The UCC allows the seller more than one remedy as long as each remedy is ______ to help the seller recover damages.
necessary
Assuming that all other requirements are met, if an instrument states "Payable to the Order of Jane Doe" it is a(n) _______ instrument.
negotiable
Among other elements, a(n) ________ consists of an unconditional promise to pay a fixed amount of money in a signed writing.
negotiable instrument
A _________ is the various steps used to transfer a negotiable instrument from party to party through a legally defined process.
negotiation
If an agreement is illegal in purpose and unperformed, _________________.
neither party will be able to enforce it.
A _________ lacks any type of language that seeks to limit the negotiability of an instrument or conditions to its payment or transfer.
non-restrictive indorsement
In case of a partial breach, the _______ party may not be relieved from performing, and may still recover ________ from the breaching party.
nonbreaching; damages
Uncertainty can open up various legal strategies: (1) _______________ (2) ____________, (3) ____________, and (4) value creation or legal competitive advantage.
noncompliance, avoidance, prevention
The RULLCA sets forth seventeen _______ statutory provisions related to liability of the entity and its members that are not subject to change by the operating agreement.
nonwaivable
The modern trend is that advertisements appearing in the mass media, in store windows, or in display cases are _____________.
not offers/invitations to make an offer
Suppose Sam Seller ships 100 widgets to Bob Buyer. Under the UCC, after inspection of the goods, Bob may: (1)_______, or (2)________, or (3)_______.
notify Sam of acceptance; notify Sam of rejection; do nothing
Suppose Wanda Widget is a manufacturer and supplier of widgets across the industry. Wanda contracts with Tom Tools USA to supply his ordinary widgets, model 101. The contract between Wanda and Tom is for 1,000 widgets at $10 each, to be delivered to Tom's distribution warehouse in Idaho on September 1, with payment due on delivery. Suppose that Wanda delivers nonconforming widgets to Tom in Idaho and that Tom accepts them but later rightfully rejects them and fails to pay Wanda. At this point Tom must: _______.
notify Wanda within a reasonable time
Usage of trade means:
observing industry standards and practices that may be unique to the particular industry
In a contract for the sale of goods is analyzed based on the parties' course of dealing, the goods must be:
of the same quality as found in past contracts
_______ carry out the directors' set course of direction through management of the day-to-day operations of the business.
officers
An instrument that is payable upon demand can be presented for payment at any time by its holder but it must state "payable _______" or _______.
on demand; omit the date
All income and losses of an LLP are reported:
on the partners' individual returns
A revocation is effective ___________.
once the offeree receives the revocation
If goods are to be shipped, title passes to the buyer ________.
once the seller ships the goods as specified in the contract
Default rules, under the UCC:
only applies to unforeseen terms not addressed in the contract.
Evan wishes to start an LLC that will do businesses in Florida, Vermont and Alaska. In which state(s) must he file the articles of organization?
only one of the three states
In the case Lucente v. IBM, differentiated when a covenant not to compete can be enforced by the employer against the employee and determined that it can be applied __________.
only when the employee chooses to leave the employer
LLCs frequently are governed by an agreement of its members in the form of a(n) ________.
operating agreement
Sometimes it is hard to distinguish between statements of fact and statements of ___________.
opinion
The ____________ states that any writing intended by the parties of the final expression of their agreement may not be contradicted by any oral or written agreements made prior to the writing.
parol evidence rule
Both industry standards and how the parties have performed in past dealings play an important role in determining the:
parties' obligations and rights
Property used for the partnership business may become subject to either: _______ or _______.
partnership ownership; partnerships claim to its use
Limited partnerships are _______ entities just like general partnerships.
pass-through
The ability to flow through to the investors the tax deductions and losses that are typically generated by an emerging company or a company with significant up-front debt is an advantage of a:
pass-through entity
A type of consideration that does not meet the bargained-for-exchange requirement is called ________ because the promises made are in return for a detriment previously made by the promisee.
past consideration
A type of consideration that does not meet the bargained-for-exchange requirement is called __________ because the promises made are in return for a detriment previously made by a promisee.
past consideration
Martha recently announced her retirement. Upon her announcement, Martha's boss promises her a gold watch because of her hard work that she has done for the company over the past twenty years. The work that she has already done is _________ and not considered a legal detriment, or a bargained-for exchange.
past consideration
Course of dealings involves _________ which provides a reference point for what the parties reasonably expected in terms of performance on a new contract.
past dealings
UCC Section 2-312 allows a buyer to sue a merchant software seller if the buyer is found liable for _______ due to her use of the software.
patent infringement
If Sammy Seller shipped goods to Megan Manufacturer, Megan's acceptance of the nonconforming goods triggers her obligation to _______.
pay for the nonconforming goods
If a negotiable instrument has the words "_________" whoever possesses the instrument will be entitled to payment.
pay to bearer
If the parties agree, the UCC allows that title may pass when the buyer ________.
pays for the goods on delivery
If an agreement uses language such as "_____" it will still remain a negotiable instrument.
per contract
Under the UCC, the _______ rule requires the seller to deliver the goods in a manner that matches the contract terms in every respect.
perfect tender
Constitutional law is different from other sources of law primarily in terms of _____________.
permanence and preemption
When dealing with an LLC, landlords often require a(n) _______ from the members whereby the members pledge assets to ensure payment of the business venture's obligations.
personal guarantee
LLC members are insulated from _______ for any business debt or liability (contract or tort) if the venture fails.
personal liability
When choosing a business entity, principals should carefully consider the extent of _______ for debts and contracts.
personal liability
When an instrument states "Payable to Bearer", negotiation occurs when the holder: _______.
physically transfers possession of the instrument to its new holder
In a true lease, the lessor gives the lessee the right to _______ and use the goods to the lessee for a fixed period of time in return for rent but does not _______.
possession; transfer title
A valid offer creates the __________ in the offeree; in other words, an acceptance is the offeree's expression of agreement to the terms of the offer.
power of acceptance
Under the "__________" test, courts must discern the main purpose or thrust of a contract to determine whether the transaction predominately involves the sale of _______ or not.
predominant purpose; goods
Before signing their agreement, Tom and Joe engaged in _________ that involved discussions and a letter of intent that were intended to help them come to an agreement.
preliminary negotiations
The person who is entitled to the profits of a business based on the percentage of ownerships is:
principal
_______ loans come from family members and friends and are paid back according to their individual agreement.
private
Under RUPA's default rule, both ______ and _______ must be split equally among all partners.
profits; losses
If one party justifiably relies on the promise of another to her detriment, under certain circumstances the relying party may recover costs of the reliance from the promiser under the theory of _________, even though the original promise agreement lacked consideration.
promissory estoppel
A __________ is any type of loan whereby one party offers to lend a specific amount of money with repayment in the future.
promissory note
If a _______ makes a contract on behalf of a not-yet-formed corporation, she may have some degree of _______ to perform under the contract.
prompter, personal liability
As statement made by a car salesman such as "this car gets fantastic gas mileage" would be an example of (a/n) ________.
puffery
Since many express warranties arise in the context of advertising, the UCC makes a distinction between factual promises and "_______."
puffery
Mitigating damages means essentially that the plaintiff is barred from recovery in court if she could have avoided damages with _______ efforts, and without ________ or additional expense.
reasonable; undue risk
Suppose Tom ships Joe 1,000 widgets in 10 boxes, 100 widgets each box. When the delivery truck arrives, three of the boxes are very damaged. If Joe wants to accept at least the 7 boxes, what are his rights?
reject the entire shipment; accept all the boxes as is; accept 7 boxes and reject the rest
Suppose Willie Wonka is a manufacturer and supplier of mustard ingredients. Willie contracts with Mean Mr Mustard USA to supply 1,000 mustard packs for his mustard ingredients. The contract between Willie and Mustard is for 1,000 packs at $1 each, to be delivered to Mustard's distribution warehouse in Florida on September 1 with payment due on delivery. Suppose that Willie delivers conforming packages to Mustard in Florida, Mustard accepts but then later wrongfully revokes the acceptance. At this point Willie can: _______.
resell the mustard packs at FMV; sue for nonperformance and the incidental damages
The law sets out a system for __________ among the parties by providing a basis for deciding their legal interests and rights.
resolving disputes
A ________ is one that seeks to limit the negotiability of an instrument or impose a condition on the payee.
restrictive indorsement
Kant theorized that _______ imply duties and that the duty to respect the rights of others is paramount in acting morally.
rights
The best choice of business entity is driven primarily by the following factors: ________.
risk; tax; operational objectives
UCC Article 2 governs _______ agreements, and if the parties to a sales transaction have not expressly agreed on certain terms, such as quantity and delivery dates, the _______ rules apply.
sales; default
A(n) _________ is a legit right granted by a debtor to a creditor over the debtor's property, also known as ____________.
security interest; collateral
One of the main conditions for a finance lease to qualify under Article 2A is that the the finance lessor cannot participate in the ______, _______, or _______ the goods.
selection; manufacturing; supplying
In Lewis v. Moore, the court ruled:
since Moore was a sole proprietor she was gree to dissolve it at any time; the sole proprietor has the right to dissolve the proprietorship at any time.
Any surplus earnings that remain in a community-based nonprofit are reinvested in activities that achieve the company's ________, as determined by the company's ________.
social mission; board of directors
Raul wants a simple method to start-up a small marketing company. The marketing firm has relatively low revenue and expenses. Which type of business entity would you suggest?
sole proprietorship
The chief drawback to the _______ as a form of entity is the owner's complete lack of protection for unpaid debts and liabilities of the business.
sole proprietorship
Most _______ are relatively small in terms of assets and revenues, and are not restricted in terms of the number of _______ and can operate in as many locations as the principal desires.
sole proprietorships; employees
Suppose Honda Finance Co. packages thousands of their auto loans and sells them to a separate corporation, called a(n) _______, which is created specifically to own these notes. The SPV issues bonds that are secured by the notes and these bonds are then purchased by _______.
special purpose vehicle (SPV); private investors
Under the UCC, if the lease payments are at least $1,000 the lease must be in writing - unless the goods are _______ or ______.
specially manufactured; already received and accepted
_______ can also be an appropriate remedy when a(n) _______ —who possesses a unique quality or expertise central to the contract—will perform the services.
specific performance; specific individual
In general, contracts for the sale of goods are governed by _____________.
state statutory law based on the Uniform Commercial Code
The _______ is a legal requirement that certain contracts ______ in order to be enforceable.
statute of frauds; be in writing
The Board of Layne Corporation recently stated that under no circumstances would it allow Gwen Corporation to take-over its corporation. The problem is that the Board only owns five percent of the shares. Therefore, Gwen Corporation contracts all of the other shareholders and offers to purchase their shares of stock. What is this process called?
stock purchase
Corporate acquisitions can be characterized for legal purposes as either _______ or _______.
stock purchases; asset purchases
Southeastern Supplies (SS) is a manufacturer and supplier of office equipment. SS contracts to sell University of Florida (UF), a local university, 5,000 UF Gator mousepads at $10 per mousepad for delivery on August 1 and payment of $100,000 due upon delivery. If UF breaches before accepting the goods, SS has the following options for remedies:
stop or interrupt the delivery of the goods; cancel the contract; de discharged of its performance obligations
Although __________ performance allows a less-than-perfect performance, the innocent party is still entitled to collect ____________ to compensate for the imperfect performance.
substantial; damages
The law recognizes ___________ performance, in which one party has not completely performed, yet has still acted _____________ and is entitled to enforce the remaining obligations in the contract against the other party.
substantial; in good faith
If the parties to a contract amend its terms, they may discharge their obligations by replacing the original contract with a(n) _____________.
substitute agreement
Suppose Marvin Manufacturer is a manufacturer of widgets. Marvin contracts with Rachel Retailer to supply 1,000 widgets at $10.00 each, to be delivered to Rachel's distribution warehouse in Arizona on September 1, with payment due on delivery. Suppose Marvin delivers nonconforming widgets to Rachel, who accepts them but later revokes her acceptance of the goods. After reasonable notice to Marvin, Rachel can: _______.
sue Marvin for damages
Suppose Wally Widget is a manufacturer and supplier of widgets across the industry. Wally contracts with Beaver Tools USA to supply his ordinary widgets, model 101. The contract between Wally and Beaver is for 1,000 widgets at $10 each, to be delivered to Beaver's distribution warehouse in Minnesota on September 1 with payment due on delivery. Suppose further that after Wally received the order but before he shipped the goods, Beaver sends Wally a text that says "CANCEL the 101 ORDER". Wally can: _______.
sue for non acceptance and incidental damages if any; cancel the contract and be discharged of all performance obligations
Suppose Wally Widget is a manufacturer and supplier of specially manufactured widgets across the industry. Wally contracts with Beaver Tools USA to supply 5 Wally Widgets, model 101. The contract between Wally and Beaver is for the 5 widgets at $10,000 each, with a deposit of $10,000 with the balance due upon delivery of no later than September 1. "Time is of the Essence" is denoted in the contract. Suppose Beaver receives the shipment on August 18, but it is nonconforming. At this point Beaver can: _______.
sue for specific performance; cover and purchase conforming widgets elsewhere; allow Wally to cure the problem by September 1
Suppose Marvin Manufacturer is a manufacturer of widgets. Marvin contracts with Rachel Retailer to supply 1,000 widgets at $19.00 each, to be delivered to Rachel's distribution warehouse in Arizona on September 1 with payment due on delivery. Suppose Marvin delivers conforming packages to Rachel in Arizona, who accepts them but refuses to pay the contract price. At this point Marvin can: _______.
sue for the purchase price
If a breach relates to a fundamental term of the contract, it is called a total breach and the nonbreaching party is entitled to either: ___________ or ___________
suspend performance; be completely discharged from her obligations
Suppose on Monday 1st, April emails Nicole and offers to sell her car to Nicole for $12,000, and the offer expires Friday the 5th at noon. What is the status of the offer at 2pm on Friday the 5th?
terminated by lapse of time
According to the case, Paramount v. Q.V.C., the "enchanted scrutiny test" requires the court to evaluate if:
the decision-making process was adequate and the directors' actions in light of the circumstances wad reasonable
What most likely happens at the end of the lease term?
the equipment is returned to the lessor
If the instrument is order paper and payable to an identified person, its negotiation requires that: _______ and _______.
the identified party physically transfer the instrument; the identified party indorse the instrument to its new holder
One can become a holder of an instrument in two ways: (1) _______ or (2) _______.
the instrument is issued to a specific person; the instrument is transferred to that person by negotiation
Stahlhut Corporation's human resource department sends a letter to Nancy stating the following: "We want you to work for us as a sales representative effective July 15 at an annual salary of $45,000.00. Please sign this document and return it in the self-addressed stamped envelope." Nancy signs the document and drops it in the mail. Nancy is ___________.
the offeree
Happy Hops Brewery Inc., has found that its business is expanding very quickly. The decision to fire three new delivery drivers would be made by:
the officers
Innocent misrepresentation includes: _________, ___________, and __________
the person making the representation believes it to be true; there is no intention to deceive; the aggrieved party can avoid the contract
The buyer's primary obligation is triggered when:
the seller tenders the delivery
A corporation comes into existence when:
the state accepts the articles of incorporation and issues the charter
Normally, as long as the agreement is voluntary, courts will not inquire as to: __________ or __________.
the type of consideration exchanged; the bargaining power of the parties.
Generally, the law recognizes three categories of duress: _____________, _____________; and _________________ whereby the party has no other meaningful choice.
threats of extortion; threats of violence; threats of economic damage
If a draft is payable at determined future date it is a(n) _______, whereas a draft that is payable at any time upon demand is called a(n) ______.
time draft; sight draft
A promissory note that is payable at a particular date is called a ______, while one that is payable at any time upon request by the payee is called a(n) _______.
time note, demand note
One important issue with revocation is the _________ of the revocation, since most states hold that revocation is effective only _________ by the offeree.
timing; upon receipt
A sale transfers ownership, or _______, to the goods from the seller to the buyer.
title
If the seller has shipped conforming goods as agreed, the buyer has the duty to accept the and become the owner of the goods in accordance with concepts of __________.
title
The legal term for ownership is:
title
If Joan Gates wishes to "do business as" Gates Consulting, she would create a(n) _______ or DBA with a local or state office. (Choose all correct answers)
trade name; fictitious name
Mental competence means not just obvious cases such as mental disorders, but also the following: ____________, ___________, or ___________.
traumatic pressure; severely depressed; highly intoxicated people
True or False: UCC Section 2-313 has a great deal to do with these marketing and sales-related activities.
true
True or false: A drawer of an instrument can make it payable to more than one person.
true
True or false: in a(n) bilateral contract, legal detriment is incurred through the mutual promises the parties make to each other.
true
When consideration is grossly unequal to a contract may be unenforceable by one of the parties due to ___________.
unconsciousability
If one party to a contract uses any form of __________ to induce another party to enter into or modify a contract, the coerced party may avoid the contract on the basis of _____________.
unfair coercion; duress
If the burden on performance is both __________ and __________ the courts may allow the defense of impracticability to discharge the obligations of the parties.
unforeseeable; extreme
In a contract containing a(n) __________ mistake only one party has an erroneous belief about a basic assumption in the terms of the agreement.
unilateral
Regardless of reasonableness, duress may occur if a party is able to prove she was ___________ or that she was a(n) __________ state of mind.
unusually timid; unusually vulnerable
Tom manufactures widgets that conform to NASCAR specifications for widgets. If Joe buys 1,000 of Tom's widgets his contractual expectations would be based on ________.
usage of trade
________ refers to any general practice of method of performance that is specific to a particular trade or industry.
usage of trade
___________ refers to any general practice or method of performance that is specific to a particular trade or industry.
usage of trade
Joe lives in a state where he can sue the manufacturer of goods he purchased for breach of warranty even though he never contracted with that company. The courts in this state have done away with the requirement of horizontal privity. What is the type of privity in this situation?
vertical privity
An agreement is _________ if it lacks one of the required elements or has not been formed in conformance with the law from the offset.
void
As a general rule, an illegal contract is automatically ________, so neither party may enforce it against the other.
void
Jan and Carol agree to rob a bank and split the loot. The agreement is _________ from the outset.
void
A good faith buyer does not acquire valid title of the seller obtained a(n) ________.
void title
In the Henningsen v. Bloomfield Motors case, the court held that a disclaimer of a warranty that was buried in small print in a preprinted agreement to purchase a used car was _______ against public policy because the drafter had "_______" and that an ordinary person would not be able to fully comprehend what legal rights he was giving up.
void; gross inequity of bargaining position
If a contract is based on fraud, the contract is _________ and the innocent party is generally entitled to recover ___________ damages, and in some states ___________ damages.
void; money; treble
A contract for illegal gambling that is specifically barred by statute is _________ because its terms violate some ___________ objective.
void; public policy
Generally, the courts have the power to declare certain types of contracts ____________ on the grounds that they are contrary to __________.
void; public policy
If persons who lack capacity to contract make a promise, that promise is ____________.
voidable
When a person lacks capacity, generally those contracts are ___________.
voidable
In general, the contracts of minors (persons younger than 18 years of age) are ________.
voidable at their option
An agreement in which one party may disaffirm or enforce the is a _________.
voidable contract
The UCC rule is that a good faith buyer acquires valid title so long as the seller obtained __________.
voidable title
The majority of states hold that contracts made by an incompetent are ___________, not void. If the incompetent party regains her mental capacity, or has a guardian appointed, she may _________ the contract.
voidable; ratify
A(n) __________ title involves a purchase of goods through fraud or deceit whereas a(n) ______ title involves property obtained through theft.
voidable; void
Under RUPA a majority of dissociations are the result of one of the following three events: _______, or _______, or _______.
voluntary separation from the partnership; a partner's bankruptcy; one partner gives specific notice to withdraw
The UCC has provisions that protect consumers by requiring sellers to offer ________ or promises regarding important aspects of the goods.
warranties
The UCC rules regarding exclusion of ________ in lease contracts are also quite similar to the exclusion rules for sales contracts.
warranties
Generally, a(n) _______ is a guarantee or promise providing assurance by one contracting party to the other party that specific facts or conditions are true or will happen.
warranty
A partner violates his duty of loyalty if he personally takes advantage of a business opportunity that _______.
would have benefited the partnership
If a seller-merchant offers a(n) _______, the transaction is subject to the provisions of the Magnuson-Moss Act.
written express warranty
Chris, the owner of Bloom Aglow, offers to contact with Lisa for her upcoming wedding bouquet and decoration needs. Chris specifically states in the offer that he will only use the Western Prairie Fringed Orchids in all arrangements. While contemplating the offer, the federal government passes a law that classifies the Western Prairie Fringed Orchids as a near extinct flower and makes it illegal to use, to sell or kill it. Does this affect the offer between Chris and Lisa?
yes because the change in law constitutes a supervening illegality and therefore, the offer is revoked.
Section _______ of the UCC deals with _______ privity, which extends a warranty to to any person who may be reasonably expected to use, consume, or be injured by the goods.
2-318; horizontal
Which of the following outcomes would not be available in a court of equity? A) An order for the payment of money damages for a breach of contract. B) An order for prohibiting the building of a 16-foot fence in a residential neighborhood. C) An order requiring teachers to stop picketing in a particular area. D) An order requiring a party to turn over goods after being found guilty of breach of contract.
A.
The governmental body charged with actually enforcing and carrying out the laws promulgated by Congress is ______________.
Administrative agencies
This ancient Babylonian document covered contract law.
Code of Hammurabi
Which of the following is not a common challenge to business ethics and values management? A) Ethics cannot be taught. B) Complying with the law is all that a corporation needs to do to remain ethical. C) Ethics cannot be managed. D) Success is measured in profits and losses, not in ethical conduct.
D.
Gwendolyn Melvin wishes to start a children's sports store called, "Just Let 'Em Play!" as a sole proprietor. What form must she file so that she can use another name than her own?
DBA Certificate
Many corporations choose to incorporate in Delaware. Which of the following is NOT an advantage to incorporating in Delaware?
Delaware's tax structure provides significant tax benefits to out-of-state corporations incorporating in the state of Delaware
16 year old Grace agrees to quit school to work for Andrew in his flower shop full-time. When Grace's mom finds out what she has done, she orders her to tell Andrew that she will quit the job. This is called __________.
Disaffirmance
__________ can be a bargained-for exchange and valuable consideration by giving up a legal right.
Forebearance
In order for a party to avoid a contract based upon the defense of misrepresentation, all of the following must be present, except ____________.
It must be a lie about an opinion
Generally, in a(n) _____ all partners have liability protection for debts and liabilities of the partnership.
LLP
______________ theory is a moral philosophy that certain rights and moral values are timeless and universal and discoverable through human reason.
Natural
Custom Candy Creations, a candy shop, has on its sign "The Finest Candy in the World." This is an example of ___________.
Puffing
Which of the following is true about sole proprietorship?
The owner reports income and expenses on the owner's own tax return
Kumbamitwe Construction enters into a business contract with Daniel's Hardware to purchase lumber and supplies for the construction of a house. Daniel's Hardware delivers the lumber, but about 10% of the lumber is warped. The contract is silent on what would occur in the event of substandard products being delivered. According to the UCC, what might occur in this situation?
The parties may use default rule to resolve the problems of the contract not anticipated when the business contract was originally made.
Frustration requires all of the following to occur: ________________, ______________, and _____________.
The principal purpose of the contract is substantially frustrated; neither party of the contract is not at fault; the non-occurrence of the event was the central assumption of both parties when entering into the contract.
Suppose Joe and Tom have a license contract with a liquidated damages provision of $100 in a contract. The actual breach of the contract would have damages valued at $500. In the event of a breach, how would the clause be interpreted?
There would be liquidated damages if a court finds $100 reasonable and not a penalty.
There are four critical time periods that impact the duties, rights, and remedies available to the buyer or the seller. Two of these time periods are: (Choose two correct answers)Time Period 1: Time between the contract's _______ date and the _______ date. Time Period 2: Time between delivery date and date when buyer rejects the goods.Time Period 3: Time between buyer's _______ and buyer's _______ of her acceptance of the goods.Time Period 4: Time after buyer revokes her acceptance of the goods and acceptance of the goods.
Time period #1: effective, delivery; Time period #3: rejection, revocation
_________ is an important legal concept that implies the ownership of property.
Title
True or False: The following is an appropriate example of substantial performance: KM Corporation orders 500 boxes of copy paper from MK Supply, but MK can deliver 450 boxes.
True
Another name for articles of organization is:
certificate of organization
Any deviation from what was agreed upon will trigger what is known as a breach of ______.
contract
Under UCC Section 2-314, the implied warranty of _______ applies to every sale of a product from a merchant seller to any buyer.
merchantability
___________ have a greater duty to act in a commercially reasonable manner.
merchants
The UCC imputes a certain level of knowledge and awareness to _______ and allows their transactions to proceed in an expedited manner without the necessity for safeguards intended for _______.
merchants, average consumers
_______ must either identify the party to whom payment will be made or specify that the person who possesses the negotiable instrument is the party to be paid.
negotiable instruments
Will, a used-car salesman, tells Jeff the Ford Mustang D3 is the sweetest car on the lot. This statement was be an example of ___________.
opinion; puffering
The two exceptions to a missing quantity term being required in a commercial sales contract are __________ contracts, or ___________ contracts.
output; requirements
Under the UCC, a contract for the sales of goods _______ must be ______ to be enforceable.
over $500; in writing
For tax purposes, LLPs are treated as _______.
pass-through entities
When one party promises to do what she is already legally obligated to do, the law considers this a(n) ________ and not valid consideration.
preexisting duty
The modern trend in the law recognizes a number of exceptions to the _____________ rule, including, unforeseeable circumstances and ______________-.
preexisting duty; additional duties
Administrative law would be an example of a _______ source of law.
primary
In the context of business entities, ________ is a generic word for individuals who are entitled to the profits of a business based on their.
principal
In a sole proprietorship, all debts and liabilities of the business are also personal debts and liabilities of the __________.
principal; owner; sole proprietorship
Ethical decisions that are made according to a set of established principles or standards such as religious tenets or codes employ a _______ approach to ethics.
principles-based
Normally, the offer takes the form of a(n) _______ from the buyer that contains preprinted clauses favoring the buyer and blanks for a shipment date, product information, and _______.
purchase order; quantity
Corporations are classified into one or more categories that reflect their overall _______.
purpose; capitalization; structure (also location)
A _________ adds language such as "Without recourse: to limit the indorser's loss exposure due to nonpayment.
qualified indorsement
A(n) _______ adds language such as "Without Recourse" to limit the indorser's loss exposure due to nonpayment, but the indorser may have some warranty liability.
qualified indorsement
Natural law relies on __________ to determine universal and timeless rules of moral behavior.
reason
Mitigation of damages requires:
reasonable efforts
Betty Buyer breaches her contract with Tom Terrific if she does any of the following:
rejects the conforming goods; fails to make payment; repudiates the contract before the seller delivers the goods
If the contract does not require shipment, the goods will __________.
remain stored in a warehouse
What are the opportunities to obtain relief in breach of contract situation?
remedies; judicial actions; potential damages
A measure of judicial action intended to compensate an injured party in a civil lawsuit is known as a ______________.
remedy
If the seller has delivered goods and the buyer rejects them under the perfect tender rule, the seller has the right to: _______ or _______ the rejected goods as long as the time period for performance has not expired.
repair; replace
The parties have a right under the common law to ________ the contract, but the UCC treats a repudiation as a ______ even if performance is due.
repudiate ;breach
Under the UCC, a buyer breaches if she ________ the contract before the seller delivers the goods or fails to make payment.
repudiates
If Victor Vendor delivers goods to Barbara Buyer that are nonconforming to the contract, or if Victor _______ the contract, Victor might be _______.
repudiates; in breach of contract
Generally, so long as the goods are properly tendered as agreed, the _______ is allocated to the buyer at the time of tender.
risk of loss
The UCC determines when the title passes between the seller and the buyer, and allocates _______ from an accident, mishandling, or theft based on whether the agreement is categorized as a(n) _______ contract or a destination contract.
risk of loss; shipment
When there is a ________, the seller does not retain any ties to the goods.
sale
Article 2 of the UCC applies only to agreements for the _______.
sale of goods
Article 2 of the UCC governs contracts involving the ________.
sale of goods
In the context of contracts for the _______, Article 2 of the UCC should be thought of primarily as a strategic _______ in cases where the parties have not agreed otherwise to specific terms.
sale of goods; gap filler
Fraud means misrepresentation plus guilty knowledge or ___________.
scienter
Upon the buyer's breach, the _________ has various options to pursue remedies that depend to some extent on whether the buyer has rejected the goods or accepted them.
seller
Every C corporation is considered a legal, taxable entity that is _______ for income tax purposes.
separate from the owners
In an installment contract each lot must be accepted and paid for _______.
separately
_______ are the owners of the corporation and while they do not directly manage the corporation, shareholders are granted certain rights to protect their ownership interests.
shareholders
Fundamentally, corporations are structured around an allocation of power based on three categories: _______.
shareholders; directors; officers
In cases where an LLP partner has engaged in some misconduct or tortious conduct, the LLP acts to _______, and _______.
shield the personal assets of other partners, not the partner who committed the negligence
Generally, all contracts for the sale of goods are considered _______ contracts unless the parties have agreed otherwise.
shipment
Liz purchases a bed from Bisani Bedding to be shipped via Fed Ex. What type of contract is this?
shipment contract
_______ contracts require the seller to use a common _______ (such as U.S. Postal Service, FedEx, or UPS) to deliver the goods.
shipment; carrier
___________ agreements are formed when a purchaser opens up the packing of software after notification by the seller via a printed notice on the packaging that by opening the packaging, the buyer agrees to the seller's terms.
shrink-wrap
Generally courts have held that ________ agreements are ___________, even if the purchaser never actually read the terms before opening up the package.
shrink-wrap; enforceable
The RUPA states that any partner may _______ on behalf of the partnership that is within the ordinary course of the partnership's business.
sign a contract; makes decisions that are binding on all partners
Under Rupa's default rules, partner's right to manage the business implies that each partner has the ability to _______.
sign contracts on behalf of the partnership
Tom shakes hands with Joe and they agree to the sale of Tom's ranch for $125,000 including the 10 acre homestead. Later, there is a dispute. Joe says the contract is governed by the ________ and it is ________.
statute of frauds; not enforceable because it is for the sale of land
The main purpose of the ____________ is to prevent fraud by requiring that certain types of contracts have __________ of their existence and terms.
statute of frauds; written evidence
If an agreement uses language such as "________" the instrument will become conditional and destroy its negotiability.
subject to contract
Suppose Wanda Widget is a manufacturer and supplier of widgets across the industry. Wanda contracts with Tom Tools USA to supply his ordinary widgets, model 101. The contract between Wanda and Tom is for 1,000 widgets at $10 each, to be delivered to Tom's distribution warehouse in Idaho on September 1 with payment due on delivery. Suppose that Wanda delivers conforming widgets to Tom in Idaho and that Tom wrongfully rejects them and fails to pay Wanda. At this point Wanda can: _______.
sue for incidental damages; sue for the purchase price; resell the goods
The board of Zen Corporation was close to insolvency when Alpha Inc. approached the board wanting to merge. The merger could have potentially saved Zen from insolvency. However, the members of board of Zen despised the board members of Alpha as Alpha recently defeated them in a company softball tournament. Therefore, there were a lot of hard feelings and the board of Zen refused to even talk with Alpha Inc. Zen slid closer to insolvency but Zen would not budge. All of the following statements are true except:
the board has a right of self-interest and preservation to understand that if two boards cannot work together it will have negative effects on the corporation when considering a merger or acquisition
In the case, Unitrin v. American General Corp., the court determined:
the board's actions were reasonable and proportionate responses to the potential takeover
That corporations have a social responsibility and that profitability should be secondary reflects:
the broad view, or good corporate citizenship
According to ________, some contracts must be in writing in order to be enforceable.
the statute of frauds
According to the UCC if a time period of acceptance is not stated in the offer to sell goods, the time period for acceptance will be _________.
three months
Under Section 2-312 of the UCC, every seller must make the following guarantees: _______.
title is free and clear of claims of others; goods are free of security interests; not stolen or acquired through fraud
Larry Lumbermill promises to sell 1,200 board feet of precut 2"x8" studs to Carl Contractor for a new home construction to be delivered at the work site by 5PM the next business day. What happens if, during the delivery Larry's delivery truck has a terrible accident and the lumber is severely damaged? Who pays for the lumber? The answer to this question involves the UCC's ______ and the _______.
title; risk of loss
If Megan Manufacturer has provided perfect tender to the buyer Rachel Retailer, Rachel's obligation is _______ Megan subject to Rachel's right to inspect.
to pay
An integral part of the broad CSR perspective is the focus on what some ethicists call the "_________"
triple bottom line
True or false: In a unilateral contract, one party's legal detriment arises from its action or inaction rather than a promise.
true
True or false: The general rule is that a company that acquires a seller's assets is not responsible for the seller's liabilities simply due to the ownership of those assets.
true
True or false: Traditional contract law principles still apply to e-contracts, but courts have had to develop new applications and theories.
true
The modern trend in the law recognizes a number of exceptions to the preexisting duty role, including: __________ and ____________.
unforeseeable circumstances; additional duties
Suppose Bill, a homeowner, promises to pay ABC Roofing $10,000 to install a new roof on a September 3, 2019 but ABC Roofing fails to install the roof. The parties have a __________ contract and Bill ____________.
unilateral; owes nothing
The parties may agree to specify liquidated damages as compensation for the nonbreaching party, however they will not be enforced if a court concludes they are _______ and act as a _______.
unreasonably high; penalty
In Furlong v. Alpha Chi Omega Sorority et al, Ohio Misc.2nd 26 (1993), Furlong (the seller):
breached the express warranty and the contract by delivering nonconforming goods
In partner-to-partner transactions, each partner owes each other _______.
full disclosure
A well-established and deep-seated principal of American law is that a corporation is a(n) ______.
separate person; separate entity
Under Section _______ of the UCC, every seller (both merchant and nonmerchant) must guarantee to the buyer that the title to the goods is free and clear of any claims by others
2-312
Under UCC Section _______ sellers of products can create effective marketing programs for their goods.
2-313
Congress can override a presidential veto of a bill by ____________.
2/3 majority vote
Article ______ of the UCC covers the leasing of goods, while Article 9 covers _______.
2A; secured transactions
_______ performance is a(n) _______ remedy which occurs when a court orders the defendant (breaching party) to take a specific action as promised.
Specific; equitable
__________ law is essentially court-made law that has not specifically been passed by the legislature.
Common
Which is correct when comparing the UCC to common law?
Common law is much stricter than the UCC.
Becker Corporation hires a social media influencer, Bekah, to use their product and post about it on social media. This is an example of which type of agreement?
Employment
________ is the set of moral principles or core values for deciding between right and wrong.
Ethics
Larry's Lumberyard delivers 500 studs to Carl Contractor's worksite. Carl signs an invoice and says "put it on my bill." The delivery man says "No sir, I have to have a check." Who is right?
Larry's Lumberyard. The UCC says payment is due at the time and place of delivery.
Besides English, much of the language of American law is a combination of _________ and __________ roots.
Latin; French
__________ is a body of ___________ of action prescribed by a controlling __________ and having binding legal ___________.
Laws; rules; authority; force
_______ is often an attractive alternative because the business can use equipment on an exclusive basis without the large up-front investment required to purchase it.
Leasing
Sherry attends a training session at her job as a contract administrator. The presenter continually refers to the term "force majeur" which is unclear to Sherry. What is this an example of?
Legalese
Fred, Mike, Reid and Connor create Double Done LLC, a family recreation center. Their operating agreement specifically states that Mike will make the day to day decisions and that Fred, Reid and Connor will have little input except for major decisions. This type of LLC is:
Manager-managed LLC
In the _______, Inc. v. City School District of Elmira case, the court ruled that an unexpected increase in prices was not sufficient to meet the standard of commercial _______.
Maple Farms; impracticability
Mariel owns a toy store, which is a sole proprietorship. She wants to retire. What is the best way for Mariel to transfer the ownership of her business?
Mariel can sell the assets of the business to another party.
Janet attends a "purse party" at her friend Nancy's house. Nancy claims she made all of the quilted purses she is selling. Janet purchases one of Nancy's handmade purses for $50.00. A few days later Janet finds out that Nancy did not make the purses, but instead stole them from a warehouse. Would Janet be able to get any of the money back that she paid for the purses?
Maybe. Under the concept of "in pari delicto" if the court determines one party is less guilty because of fraud, that person may get restitiution.
Abdullah purchases a couch from Murphy's Interiors for $500.00 which includes delivery to his house for the next day. During transit, the delivery truck gets into an accident and the fabric on the couch is damaged. Who bears the risk of loss in this situation?
Murphy Interiors since the risk of loss transfers only upon delivery of a conforming good.
The ______ theory claims that humans have certain inherent moral rights and duties that spring from their ability to reason and choose freely what they do with their lives.
Natural Law
__________ theory is a moral philosophy that certain rights and values are timeless, universal, and discoverable through human reason.
Natural Law
Edith hires Randal an attorney at Parker Law Offices to write her will. Randal asks his paralegal, Polly, to write Edith's will while he goes on vacation and mail it to her to sign. Is this proper accord and satisfaction?
No because as a paralegal, Polly is not licensed to write a will as the attorney is.
Renee's housekeeper has the stomach flu and cannot keep her scheduled cleaning appointment to clean Renee's house as scheduled. Has the contract been discharged?
No because her illness is temporary and will only suspend her duty
Basaba Realty sells a house to Mary Moore. Will the Article 2 of the UCC apply to the terms of the contract?
No because real estate contracts do not involve the sale of goods.
Mike owns Swibel Trucking, a successful trucking business, as a sole proprietorship. After many successful years in business, one night he decides he wants to change his business to a partnership so that he can share the burden and devote more time to pursue his hobby of duck watching full time. What steps must he take to change the type of business entity to a partnership?
None as a sole proprietor can convert to another business form at the proprietor's will.
____________ includes any act that indicates that the minor intends to be bound by his promise; it can be expressed orally, in writing, or it can be implied.
Ratification
__________ is complete performance accomplished by delivering products on an agreed-upon location, such as a warehouse.
Tendering goods
Which entity wrote the Revised Model Business Corporation Act (RMBCA)?
The American Law Institute
In Grimshaw v. Ford Motor Company, if Ford had made the repairs to the cars, diminishing profit but enhancing customer safety, which theory of corporate social responsibility would Ford have been exhibiting?
The broad view or management's hand theory
According to the International Chamber of Commerce abbreviations, CF requires:
The buyer must ascertain whether the goods are properly insured during transit.
Alexander entered into a contract with Eowynn to purchase a vintage 1962 Shelby Cobra for $5000.00. After both parties agreed to the price Eowynn learned that the actual market value for the car is around $760,000.00. She therefore decides to back out of the deal and offers to give Alexander his money back. Alexander does not want the money. He wants the car. For what remedy might Alexander sue Eowynn?
The equitable remedy of specific performance
Tye is selling his house which sustained a lot of water damage due to a leaky roof. Water damage stains grace the living room walls. Right before he shows his house, he paints over the water stains. Is this an example of misrepresentation?
This is an example of misrepresentation because he took affirmative actions to conceal the truth.
Suppose nonconforming goods are delivered to a buyer who accepts them, but then later rightfully rejects them upon discovering the defect. If buyer notifies seller 23 days after acceptance, will it be effective notice?
Yes, if a court determines that under the circumstances 23 days was a reasonable time
Suppose that Manny Manufacturer faxes an offer to Reggie Retailer for the following: 1,000 widgets for $1.75 each. Suppose further that Reggie sends a text to Manny that says, "Yes, I think so." Is there a contract under the UCC?
Yes, if the court decides that Reggie's response was a reasonable manner of acceptance.
Copeland Breeders sells a Redbone Coonhound puppy to the Hightower family. In anticipation for the day that the family gets to pick up the puppy they purchased, the breeder sent pictures via a text of, "your pup!" The pictures show the same puppy in each one of a completely red haired pup with a solid black nose. When the Hightower family shows up to pick up their purchased pup, they all immediately notice the dog that the Breeder is giving them is not the same as the puppy in the many pictures because this puppy has a solid red nose and a white tail. When they ask for their puppy, the breeder said he never guaranteed a specific puppy and the puppy in the pictures was already given to another family. The breeder states that the writing only states that he would sell them one puppy for $500.00. Will the court allow the use of the pictures and texts in contract interpretation?
Yes, since the term is ambiguous and in dispute, the court will allow the texts and pictues.
Suppose that Wal-Smart contracted to purchase 500 pairs of Iffy jeans and 500 T-shirts from a We-R-Cheap for a total of $25,000. Despite a good faith effort, We-R-Cheap can only deliver the jeans and 400 T-shirts. We-R-Cheap claims it is entitled to the contract price. Will We-R-Cheap be able to enforce the contract?
Yes, the contract price less the 100 T-Shirts.
Suppose Joseph and James are shareholders of JJ, Inc and obtain a credit card from BIGBOX Credit Co. James and Joseph use the credit card in good faith to make purchases to operate the business. For several years, JJ Inc conducts business and pays its debts regularly. However, their business industry enters a 'great recession' and many are forced into default. Suppose that BIGBOX sues James and Joseph personally. Will the corporate veil protect them?
Yes, the corporate veil will protect them because they acted in good faith and paid their bills for three years.
When both parties are required to render performance simultaneously is is _____________.
a condition concurrent
The "broadcast news test" is useful when deciding whether a manager or a company is ___________.
acting in an ethical manner
A(n) _______ is a specialized type of order and draft payable _______ and drawn on a bank.
check; on demand
Some countries, such as Japan, use a(n) ___________ law system that requires courts to adhere to a strict interpretation of a legislatively established code and little use of ___________.
civil; precedent
The remedy for breach of contract may depend on the classification of contracts as ___________ law with ___________ rights in dispute
civil; substantive
E-contracts covers all of the following except ________. A) browse-wrap agreement B) shrink-wrap agreement C) click-wrap agreement D) click-notice agreement
click-notice agreement
Under RUPA's default rules, each partner has an equal right to _______ the business.
co-manage
Beth has just signed a contract to work for a bank. A clause in the contract says that before she begins work, she must pass a drug test and should drug use be discovered, the contract becomes void. This clause would be a ____________.
condition subsequent
A secured transaction passes ______ to the buyer, so the seller can repossess the goods in the event of default.
conditional title
Fundamentally, the seller's obligation is to transfer and deliver __________ goods to the buyer.
conforming
If Sally Seller has shipped _______ goods to Buyer Betty, then Betty has the duty to _______ and become the owner of the goods in accordance with concepts of title.
conforming
The _________ approach emphasizes that the ethical course of action is the one that provides the greatest good (happiness) for the greatest number of people and has the least harmful consequences for the majority of the community.
consequences-based
At any point due to the seller's breach, a buyer may incur _______ damages if they are ________.
consequential; foreseeable
_______ is similar to course of performance in that both refer to patterns of performance by the parties, except that _______ refers to how the parties acted in the past.
course of dealing
Once the time contemplated for performance has expired, the seller's right to _______ also expires.
cure
Once the time contemplated for performance has expired, the seller's right to ________ also expired.
cure
Southeastern Supplies (SS) is a manufacturer and supplier of office equipment. SS contracts to sell University of Florida (UF), a local university, 5,000 UF Gator mousepads at $10 per mousepad for delivery on August 1 and payment of $100,000 due upon delivery. On July 19, UF receives 5,000 Florida State University mousepads. SS has the right to:
cure and ship conforming goods
There are four critical dates that impact the rights and duties of the buyer or seller and their remedies. Two of those are: _____________ and _____________.
date of contract's effectiveness; date of delivery of goods
The second exception to the successor liability rule is the _______ doctrine, which applies to a transaction that is essentially a merger or consolidation between the buyer and seller.
de facto merger
A(n) ________ rule is a rule of law that is designed to fill "________" in business contracts to help courts rule of expected or unforeseen situations that might occur after a deal is made.
default; gaps
When merchants engage in sales transactions but overlook or are unsure about some key element of the contract, the UCC can fill in the gaps, with _______, ______, or the _______ of goods.
delivery; quanitity; price
A contract that requires the seller to deliver a good to a particular location is called a(n):
destination contract
A(n) _______ limited partnership is simply a limited partnership that is used for estate planning for families of considerable wealth.
family
Constitutional law: (1) established __________, (2) granted _________ powers to the federal government; and (3) provided _________ protections for U.S. citizens from wrongful government actions.
federalism; specific powers; procedural
Examples of force majeure might include: ______________, ____________, _______________.
fires; earthquakes; terrorism
Sometimes parties add a(n) _______ clause that contemplates uncontrollable acts such as an earthquake, that will often discharge performance under the contract.
force majeure
Suppose Wally Widget is a manufacturer and supplier of specially manufactured widgets across the industry. Wally contracts with Beaver Tools USA to supply 5 Wally widgets, model 101. The contract between Wally and Beaver is for the 5 widgets at $10,000 each, with a deposit of $10,000 with the balance due upon delivery of no later than September 1. "Time is of the Essence" is denoted in the contract. If the shipment is nonconforming advertising for replacements would be an example of ______ ______ damages.
foreseeable; consequential
In the case, Paramount v. Q.V.C. Network, the court:
issued an order stopping the Viacom-Paramount merger
Which statement below is correct about a promoter's liability?
it ceases to exist at the moment the corporation is formed
One advantage of a community-based nonprofit type of corporation is _________.
it is tax-exempt
In order to have an insurable interest when a loss or damage of a good occurs:
it must cause a person to suffer financial or other recognizable loss.
Who must sign the lease agreement in order to be valid?
lessee
Generally, a(n) ______ is defined in contract law as a belief that is not in accord with the facts.
mistake
An _________ is a promise or commitment to do (or refrain from doing) a specified activity such as selling a good at a certain price or offering to provide services at a given rate.
offer
Matt and Mindy wish to incorporate their business but want to limit who can buy ownership interests in their business. Which type of corporation would you suggest?
privately held corporation
The two major categories of corporations are ______ and _____.
privately held; publicly held
Modern commercial contract law protects consumers by largely eliminating the _______ contract requirement.
privity
The _______ contract requirement has largely been removed because it prevented many suits for breach of _______ and also encouraged multiple lawsuits along the chain of distribution.
privity of; warranty
To qualify as a finance lease under Article 2A, the agreement must restrict the finance lessor to a financing function who will look to the supplier for satisfaction of any _______ claims.
product liability
The UCC defines a(n) _______ as "a written undertaking to pay money signed by the party undertaking to pay."
promise
A(n) ________ is any type of loan (personal or commercial) whereby one party offers to _______ a specific amount of money with repayment in the future.
promissory note; lend
If Tom and Joe have a valid enforceable agreement, and both decide to cancel the contract, the contract is discharged by _____________.
recession
If neither party has fully performed, the parties may agree to cancel the contract, also known as a(n) _____________.
recession
Rachel contracts with Ryan to teach her how to dance each Thursday night for four hours a night for two months. Two days before the first lesson, Rachel calls up Ryan to tell him she does not really want to do the lessons anymore and Ryan agreed. Therefore, they both agree to just forget about the contract. This is an example of ___________.
recession
A contract with the language "WHEREAS, the Company wishes to enter into a contract with the Representative for sales representation services for its products" would be an example of a(n) __________.
recital
A partnership agreement may limit a(n) _______ to a specified dollar amount.
reimbursement
A right to be informed about the partnership business involves the right to: _______.
request and review contracts; review minutes taken during meetings; financial information
If Bob Buyer agrees to purchase all of Pablo Producer's grain for 6 months, the parties most likely have what is called a(n) ________ contract, a court will generally enforce it even though it falls to state a particular ______ of goods.
requirements; quantity
In a true lease, title to the property and a meaningful _______ remain with the lessor, while the lessee acquires the right to use and enjoy the goods for a limited period of time.
residual interest
The law provides a mechanism to ___________ arising from ______________ and allows parties to enforce promises in a court of law.
resolve disputes; rights and duties
A(n) _______, which is generally disfavored by the UCC, is one that seeks to limit the negotiability of an instrument or impose a condition on the payee.
restrictive indorsement
If Joseph writes on the back of the note "Pay to Tom only if he fixes my car" this would be an example of a(n) ________ which would generally be ineffective and not limit the negotiability of the note.
restrictive indorsement
A(n) _______ occurs when a smaller firm acquires control of a larger or longer-established company and retains the name of the latter for the post-acquisition combined entity.
reverse takeover
An offer is terminated by ________ when the offeror decides to withdraw the offer by expressly communicating that to the offeree prior to __________.
revocation; acceptance
The seller may have a right to cure after the time for performance has passed, but she must ________.
seasonably notify the buyer of her intent to cure
According to UCC Article 2A, a true lease of goods versus a(n) ________ involves the payment for temporary possession with an expectation that the goods _______ to the owner at the end of the lease term.
secured transaction; will be returned
A(n) _______ transaction occurs when the seller retains a(n) _______ in the goods being sold.
secured; security interest
Corporations also sell equity, also called ________, to capitalize their operations.
securities
The process of packaging promissory notes and negotiating their sale to investors is called ___________.
securitization
Jane makes payments to a company for office equipment she intends to keep at the end of the lease by renewing the lease for the remaining useful life of the equipment. What type of transaction does Jane intend to pursue?
security agreement
A business signs a three-year "lease" for a very old copier that only has an additional two-year useful life. What does the business maintain?
security interest
When there is a possibility of _______, shareholders who have some degree of control over corporate decisions owe a duty of loyalty, especially to _______ shareholders.
self-dealing, minority
Businesses that are _______ and have a relatively low potential for liability usually do not require the protection and flexibility offered by more complex forms of business entities.
self-funded
If a lease contract is really a secured transaction, then the lessor is actually a(n) _______ in the transaction.
seller
The easiest single-person ownership entity to form and maintain is a(n) _______.
sole proprietorship
A contractual remedy in which the court orders a party to actually perform its promise as closely as possible, because monetary damages are somehow inadequate to fix the harm is known as:
specific performance
If money damages are not adequate, a court may grant equitable relief which is primarily in the form of: _______, _______, or _______.
specific performance; reformation; injunctive relief
_______ performance is available only when the subject matter of the contract is sufficiently _______, such as real estate, so that money damages are inadequate.
specific; unique
Law is often classified by the _________ so that one refers to certain rules regarding agreements as contract law or certain laws that regulate rights of employees as ____________ law.
subject matter; employment
A condition __________ stipulates an event that that occurs after performance under the contract and discharges the parties obligations.
subsequent
Conditions __________ have become more prevalent in senior executive employment contracts that include provisions known as __________, which allows the recovery of money ahead disbursed.
subsequent; clawbacks
__________ means that one of the parties performs imperfectly, but does so in good faith.
substantial
What does a lease not transfer?
title
Suppose Willy Widget is a manufacturer and supplier of widgets across the industry. Willy contracts with Ace Tools USA to supply special widgets with Ace's logo stamped on the widgets. The contract between Willy and Ace is for 10,000 widgets at $10 each, to be delivered to Ace's distribution warehouse in Phoenix Arizona on September 1 with payment of $100,000 due on delivery. Suppose further that Willy has shipped the goods, and as part of its routine due diligence contacts Ace's bank president who informs Willy that Ace has 'insufficient funds' to pay for the widgets on delivery. As the seller, Willy can: _______.
treat it as a material breach, and sue for contract price of specially manufactured widgets; treat it as a material breach and stop or interrupt delivery of the widgets
________ occurs when corporations pay taxes on their earnings, and shareholders pay taxes on any corporate earnings distributed to them in the form of dividends.
double taxation
If Tom signs a piece of paper that states "pay to the order of Joseph" this would most likely be an example of a(n) ______.
draft
Because the UCC aims to promote the completion of business transactions, the formation elements for a sale contract are ___________, and ___________ required for common law contracts.
easier to meet; do not require the same level of intent
An LCC is a flexible type of business entity that offers its owners many advantages:
easy formation; flexible operation; limited legal liability of the owners (also pass-through taxation)
Suppose Wally Widget sells Marvelous Marvin 100 widgets on an installment contract for $15,000 each installment. Under the UCC, a(n) _______ contract for each lot must be accepted and paid for separately which means Marvin can accept one installment without giving up the right to reject any additional installments that are nonconforming. This is an exception to the _______ rule.
installment; perfect tender
A __________ is a business entity that has a proven track record of success and sells the right to operate the business and use the business's trade secrets, trademarks, products, and so on.
franchise
Generally, a(n) _______ partner may withdraw at any time without causing _______ of the partnership.
general; dissolution
Chaplan Corporation is a privately held corporation that wishes to offer ownership interests to the general public and commercial investors in order to generate more capital. This process is called:
initial public offerings
A court may order _______ when a particular act(s) must be stopped immediately.
injunctive relief
Generally, contracts against public policy dictates that one cannot lawfully do something that has a tendency to be __________.
injurious to the public good
The common law recognizes two types of misrepresentation: _____________ and ___________.
innocent misrepresentation; fraud
Officers, directors, and controlling shareholders of a corporation (known as _______) are in a unique position of trust to guide the corporation in a certain direction.
insiders
If a buyer passes on the opportunity to _______ offered by the seller, he may be found to waive the claim for warranty for any defects.
inspect the goods
A(n) _______ occurs when two or more companies combine to form a new entity altogether, and neither of the previous companies remains in existence.
merger
After due diligence is completed, the parties may proceed to draw up a definitive agreement, known as a(n) _______, _______, or _______, depending on the structure of the transaction.
merger agreement; share purchase agreement; asset purchase agreement
After intense discussions, the CEO of Rollins Corporation and the COO of Smith Inc. decide join together in the best interests of both companies. This is called:
merger of equals
The UCC modifies the common law's "_______" rule that the terms of the offer and acceptance must match exactly, by allowing a contract to be created _______.
mirror image; in any reasonable manner
A classic example of information asymmetry is _________ which occurs when one party to an agreement makes a promise of representation about a ______________ fact that is not true.
misrepresentation; material
Candace texts Rosa the following, "Hey Rosa, do you want to buy a car for a really great price?" Rosa immediately replies, "YES!!!!!!" Has there been a meeting of minds?
No because the offer is too vague
Sally has just purchased a home and wants to have an in-ground pool installed. She calls Cool Pools, the company that put in her neighbors' pools. When the company rep comes to her property, he does some soil tests that are standard for the industry and gets the same results as he got when the other pools were put in, so the company gives her a price quote of $16,000. When Cool Pools begins excavating, it discovers solid rock four feet below ground level. The neighbors had no such rock. Cool Pools stops work and informs Sally that it will have to use explosives to remove the rock and the cost of the pool will now be $32,000. Is sally obligated to pay the new quoted price?
No, Sally can have the contract discharged based on impracticability
Johnnie consumes his necessaries and then disaffirms his contract with a grocery store. Will he be successful if he demands return of his complete consideration?
No, he is liable for the reasonable value of necessaries.
If no time period for a firm offer to remain open is stated, it will stay open for a maximum of ____________.
3 months
When the buyer agrees to purchase all or up to an agreed amount of what the buyer needs for a given period, what kind of contract is formed?
A requirements contract
Aiden ordered encyclopedias and the contract specified that delivery was to be made to Aiden's home. Instead, the encyclopedias were delivered to his post office box and he never received them. He refuses to pay for them and the encyclopedia company sues him. How would a court likely rule?
Aiden does not have to pay because the goods were never tendered to her properly, so the risk of loss never passed.
Anthony buys a couch from Basaba Interiors and arranges to pick it up from the store once he borrows a truck from a friend. Anthony pays for the couch and leaves the store. That night, the store burns down. According to the UCC, who is responsible for the cost of the couch?
Anthony
_______ lowers the bar for the formation of _______ by allowing an enforceable agreement to arise "in any manner sufficient to show agreement" between the parties.
Article 2; sales contracts
Contracts for the lease of goods are governed by state statutory laws that are modeled after ______ of the UCC, which defines what a lease is.
Article 2A
Corey, a strategically qualified attorney for Adams Corporate Concepts, negotiates all of their contracts. He routinely uses form or template to create any contract. Which of the following statements is true? A) Templates are the preferred method of creating a contract because it creates uniformity in contract structure. B) Customized contracts are the preferred method of creating a contract because it allows the contract to be tailored to meet the specific, personal needs of the client. C) Templates are the preferred method of creating a contract because it is a cost-cutting measure. D) Customized contracts are the preferred method of creating a contract because an attorney can bill more time to the client and thus make a lot more money for himself.
B.
Which of the following items would be properly subject to a UCC sales contract? A. A house B. A Christmas tree sold in a parking lot C. Rights to a patent D. An employment contract
B.
A major-league baseball team based on the North side of Chicago is in the playoffs and doing well. Behind the left-field wall there is an apartment building, and the owner advertises, "Space available on the apartment building roof with a clear view of the field for the World Series. Bring a lawn chair, your radio, and a cooler and enjoy the game. Just $50 per game." Bart, a lifelong fan, answers the ad and pays the building owner $100 to reserve space for the first two games. Unfortunately, the game fails to advance to the World Series. What does that mean for their contract?
Bart will get a refund because of frustration of purpose
Congress is drafting a federal statute to increase the speed limit on the interstate to 100 miles per hour. However, it has not been passed or approved by the President. It is called a(n) _________.
Bill
Suppose Adam agrees to sell an office building to Bill with a deed in 30 days. Several days later, Bill learns that Adam subsequently sold and conveyed the building to Carol. What result?
Bill may immediately sue Adam for breach and need not wait the full 30-day period in the contract.
The authoritative source for legal terms is called __________ Law Dictionary.
Black's
The authoritative sources for legal terms is ____________.
Black's Law Dictionary
The U.S. system of common law is deep-seated in _________ common law.
British
Ed writes Gwen a letter and offers her a job as a financial analyst for his construction company at a salary of $75,000.00 a year. Two days later he sends her another letter telling her that he has changed his own mind. Gwen receives both of the letters and after reading the letter with the job offer, does not open the second letter, and spends a couple days of thinking about the offer and whether she should accept it. Four days later, Gwen decides to accept the offer but still has not read the second letter revoking the offer. Which statement is correct? A) As long as Gwen has not opened the revocation and may accept the original offer. B) A revocation is only effective once the offeree has actual notice of it. C) A revocation is effective once it is received and no actual notice is needed. D) The revocation is not effective when mailed. It must be in person.
C.
Irina promised to mow Axel's lawn. In return, Axel paid her $500.00. When Irina arrived, she became mad at Axel and only mowed one strip of grass and then mowed over his foot and through his prized flower garden and then left. Which statement below is correct: A) Axel can only sue Irina for one category of law, such as breach of contract because laws are mutually exclusive. B) Technically Irina did mow part of Axel's lawn and partial completion of a contract bars bringing a lawsuit. C) Axel could sue for multiple cases of actions because one particular act of transaction may be classified in more than one legal category. D) Axel would be barred from recovery because he invited Irina to his house.
C.
Which of the following would not be considered tangible? A. A car B. Oxygen C. The right of ownership D. The pen or pencil you are using
C.
CJ and Danny have incorporated and obtained a $100,000 loan in their corporate name. The loan is payable with interest over five years. After paying on the loan regularly for two years, the business falters due to the economy, and CJ and Danny default on the loan. Their business has no assets. Which of the following statements best describes CJ and Danny's liability in this case?
CJ and Danny have no personal liability for the debt unless they pledged personal assets as collateral or signed a personal guarantee
If a partnership does not want to abide by the default rules promulgated by the RUPA and/or the UPA, the partners
Can override the default rules by a partnership agreement
_________ is a legal doctrine used by courts to protect parties who may lack the ability to understand the terms of an agreement.
Capacity
_________ damages cover a broad spectrum of losses for recovery of actual damages suffered by the nonbreaching party.
Compensatory
_______ damages, which can include _______ losses, are an attempt to put the nonbreaching party in the same position she would have been in if the other party had performed as agreed.
Compensatory; out-of-pocket
To deal with the often complex and time-consuming matters of ethical decision making, Kania Corporation created a separate unit staffer by lawyers and non-lawyers to help it follow rules and regulations and maintain the company's culture of values and ethics. This is known as a(n) _____________.
Compliance department
Parker runs Auto Oil Change. His arch enemy Stella comes into his business to get her oil changed. Parker intentionally lies when he tells Stella that he refilled her oil, when he actually left it empty. As a result, when Stella drives away her engine block freezes up and destroys her engine. Accordingly, what is true about which damages she may recover because of Parker's fraudulent actions?
Consequential damages because intentional lies allow an injured party to request them.
___________ damages compensate the nonbreaching party for __________ indirect losses not covered by compensatory damages.
Consequential; Foreseeable
Ethan is an attorney in Texas practicing contract law involving the sale of goods. He moves his practice to Montana to engage in the same type of practice of law. Which statement below is correct? A. Since every state has adopted the entire UCC, he will be following the exact same rule in whatever state he practices B. Montana and Texas have not adopted the UCC and therefore, Ethan will have to learn the common law of Montana to practice in the contract law involving the sale of goods. C. Article 2A of the UCC will apply to the sale of goods in both states D. Since every state in the United States has adopted either all or substantially all of the UCC, he will have to learn which portions of the UCC Montana has adopted.
D.
Nancy sees an Advertisement on the internet which reads, "Tropical Tan interested in hiring five models to model our newest spray tan method. Please contact me regarding pay." Nancy contacts Tropical Tan to accept the job. Which of the following statements is true? A) The advertisement is an offer and if Nancy accepts it, mutual assent exists. B) The advertisement is a conditional offer that nancy can accept if she agrees to all the terms as presented by Tropical Tan. C) All employment offers must be in writing to be an offer and online posts do not satisfy that requirement. D) This advertisement is simply an offer to negotiate or discuss, but not an offer.
D.
When Maria comes home from work, she finds that her yard has been mowed and trimmed. An hour later, a man comes to her door to collect payment for the yard work. Maria refuses to pay him because she has never seen him before and did not hire him to do the work. Which of the following is accurate? A) This is an implied, unilateral contract, so she must pay. B) Maria has received unjust enrichment, so a quasi-contract is formed and she must pay. C) The court would make Maria pay the reasonable cost of the work to be fair to both parties. D) Maria would not have to pay anything.
D.
Which of the following examples is an example of a merchant according to the UCC? A. A person selling goods at a garage sale. B. A Girl Scout selling Girl Scout cookies. C. A person selling clothes on Ebay. D. A vacuum sales person selling door to door.
D.
Which statement below is correct about the adoption of the Uniform Commercial Code? A. Louisiana is the only state not to adopt the UCC in whole or in part. B. California is the only state not to adopt the UCC in whole or in part. C. Every state has adopted the entire UCC. D. Every state has adopted all or substantially all of the UCC.
Every state has adopted all or substantially all of the UCC.
Suppose Joe owns a drummer-school and tells his student Bobby that he had "excellent potential" for drums so long as he kept purchasing pricey lessons from Joe's school. Eventually, Bobby became discouraged and sought another teacher, who informed him that he had minimal aptitude and could barely detect a musical beat. Bobby sued Joe for misrepresentation. At court Joe's drummer- school argued that Joe's advice was merely opinion and, therefore, could not be the basis for a misrepresentation claim. What result?
For Bobby, because the Joe's drummer-school had "superior knowledge" on the subject
The rules that limit consequential damages for which a nonbreaching party may recover were set out in the _______ case that has been followed almost universally by US courts.
Hadley v. Baxendale
Secondary sources of law, such as Restatements, ___________.
Have no independent authority or legally binding effect
According to the UCC, which statement below is correct, if a contract is silent as to when the title passes and a good must be shipped?
It passes once the good has been delivered to a common carrier.
In the _________ case, the court decided that because the deviation from expected performance was not material, it was only a(n) _________ breach.
Jacob and Youngs v. Kent; partial
Jackie, an orange supplier, contracted with Jimmy's Sushi for the delivery of 50 crates of grade B oranges. Every three months, Jackie regularly sends Jimmy's Sushi 50 crates of grade B oranges. Due to an oversight, Jackie sent Jimmy's Sushi 50 crates of grade A oranges. In this case,
Jimmy's Sushi may accept the goods
Suppose Joe and Tom have a contract for Joe to paint Tom's house, and Joe purchases all the painting supplies, begins to tape off the windows, and paints 1/3 of the house, then Tom comes out and says, STOP! What result?
Joe can cancel or rescind the contract and receive fair market value for any services he rendered.
Joe bought a shotgun from Tom, a pawn store owner who acquired the shotgun from Carl in a pawn. Carl acquired the shotgun by stealing it, but Joe did not know that. Joe paid $125 for the shotgun. What result?
Joe is a good faith buyer, has valid title, and may keep the shotgun
Josh is a sole proprietor of an ice cream ship. Regina, a customer, slips and falls on some melted mint chocolate chip ice cream on the floor and breaks her leg. Regina files suit and wins a judgement of $50,000. Josh does not have any insurance and the total value of the assets of ice cream ship is $10,000. Which statement below is correct?
Josh will have to use his own personal assets to pay the remainder off the judgement
___________ equally considers opposing sides and weighs the merits of the competing arguments carefully and with due consideration.
Justice
"Act in such a way that you treat humanity, whether in your own person or in the person of any other, always at the same time as an end and never merely as a means to an end." Is a quote by ___________.
Kant
At a board meeting for Webster Corporation, the members of the board discuss how a fellow board member is addicted to alcohol and it is affecting his work performance and his personal life. As a board, they decide to pay for a very expensive rehabilitative program at a facility several states away in California, with corporate funds. This will be a very expensive endeavor, using about 10% of the current year's profit but they hope that their friend will overcome his addiction. One board member, Nolan, objects to this stating, that if they individually want to pay for his treatment with their own money, they can, but they cannot use corporate funds for this as their only ethical duty is to make as much profit as possible so that stakeholders can decide how they want to spend their money. Nolan is employing what type of ethical decision making view of corporate social responsibility?
Maximizing profits theory of Friedman
Lotta sells illegal ivory to Johan for $1,000.00. Johan gives Lotta the money but Lotta only supplied Johan with half the promised ivory. Johan sues Lotta for breach of contract to force her to provide the remaining promised amount. In general, what most likely will be the outcome of this suit?
Nothing as the courts will leave the parties as is and not enforce recovery or recission.
The _______ does not allow any manager or member to avoid personal liability based on her willful misconduct or bad faith.
RULLC
Note that ________ imposes personal liability when members consent to an improper _______ of money made when the LLC is insolvent.
RULLCA; distribution
In the absence of a partnership agreement, the _______ is likely to govern a general partnership.
RUPA
___________ occurs when the minor, after reaching majority, begins to perform the contract, such as making an installation payment on a loan for a car.
Ratification by implication
Once a majority reaches majority, if that person continues with the terms of the contract they have _____________ the contract.
Ratified
Gap filler rules allow the business persons in the agreement to _____________.
Resolve problems of the contract not anticipated when the commercial contract was made.
The most important secondary sources of law are: ____________.
Restatements of Law and Model State Statutes
________ is a remedy designed to prevent unjust enrichment of one party in an agreement
Restitution
After the ULLCA was created, some states have started to adopt an act that modifies it called:
Revised Uniform Limited Liability Company Act
Some states have adopted the _______ model statute to regulate LLCs.
Revised Uniform Limited Liability Company Act (RULLCA)
Highlander Rocket Company is to ship 500 toy rockets by boat to Rockets R Us. Highlander is located in Miami, and Rockets R Us is located in Boston. Who bears the risk of loss if the goods are to be shipped FOB Miami?
Rockets R Us bears the risk of loss if the boat sinks on its way to Boston
Suppose Tom owns a horse which he rents to Joe, a horse trader, to use at Joe's Wild West Show (WWS). Joe has done this many times with other horses and animals. While at the WWS, Joe sells the horse to Tony. What result?
Sale is UPHELD. Joe is a merchant-seller and Tony is a good faith purchaser.
Rex Radios sells 400 i-pods to Scott Shops for $4000.00. The contract states that that the i-pods are to be delivered to Witt's Warehouse until Scott Shops has room to store the i-pods. Rex delivered the i-pods to Witt's and produced the bill of lading to Scott Shop the next morning. A week later, the warehouse burns down destroying all of the i-pod inventory According to the UCC, who bears the responsibility of the i-pods?
Scott Shops as the title was passed once Rex delivered bill of lading to Scott.
Suppose Franks Furniture Outlet advertises 100 units of furniture for a price of $50 per unit, and the offer to remain good for 60 days." What is that status of the offer on the 85th day?
Technically there is no firm offer, but possibly an option contract.
Which of the following is not a part of the winding up process?
dissolution of the partnership
Stanton and Francesca have started a general partnership. Stanton has contributed 95 percent of the start-up capital and has the business experience and contracts, while Francesca's primary contribution is the labor necessary to operate the business. Management decisions are jointly made. At the end of the year, the business has shown a $100,000 profit. Stanton and Francesca have no formal written partnership agreement.
The RUPA mandates that each get $50,000
"Honesty in fact and the observance of reasonable commercial standards of fair dealing" is the definition of good faith according to ________.
The Uniform Commercial Code and common law
Cyndy, Shelby, Kennedy and Kristin formed Double Dawn Paddle Board Yoga LLC as a manager-managed LLC naming Kennedy as the managing member. A local yogurt entrepreneur approaches Shelby offering to be the exclusive provider of pink yogurt for their company to give out after their yoga secessions. Loving pink yogurt, Shelby signs a 10 year contract whereby only their pink yogurt will be provided for their company. When Cyndy, Kennedy and Kristin find out what Shelby has done, they are furious and do not want to be bound by the 10 year contract Shelby signed as they all prefer blue yogurt. What most likely will be the outcome of this scenario?
The contract will not bind the LLC since Shelby did not have the authority to enter into a contract that binds the LLC.
Tyke's Bikes is a bicycle sales and repair shop in a small city. It sells new and used bikes with a narrow profit margin and does repairs at minimal costs. Frequently, if a child comes into the sho[ with a broken part or a flat tire, Tyke's makes the repair for free if the child has no money. Tyke's also provides a free one-hour repaid class for those who want to learn how to fix their bikes.vAt large organized bike rides, Tyke's provides free services, asking only for voluntary donations. Which theory of corporate social responsibility is Tyke's exhibiting?
The broad view, or good corporate citizenship
Lonnie's Liquor store agreed to purchase 90 proof moonshine from Moonshine Manufacturing Inc. Before Moonshine Manufacturing can ship the product the Lonnie's, a law is passed making the production, sale and consumption of moonshine illegal. What does that mean for the contact?
The contract is impossible to complete due to the law now making the subject matter illegal.
At an after work networking event, Mike drinks wine while negotiating the terms of an unemployment contract with Cyndy to start the next day. Cyndy shows up to work the next day and Mike states that he was drunk the night before and therefore lacked capacity. The court will most likely rule ________________.
The contract is voidable by Mike if he can prove that at the time he entered into the contract his intoxication prevented him from understanding the consequences of his actions.
Ethan enters into a business contract with Riley for the purchase of 200 school desks. The contract specifically states that Riley must deliver all of the 200 desks in one week, set them up and Ethan must determine that all 200 desks are in perfect condition, or riley must remove all the desks immediately and Ethan will owe Riley nothing. Which statement below is correct based upon the application of default rules in this situation should Riley on be able to deliver 199 perfect, according to Ethan, school desks?
The court will determine that since the parties specifically addressed a provision of the contract, it cannot be overridden by a default rule.
25 year old Chloe agrees to sell 10 bottles of vodka to 21 year old Victor for $300.00 and two pounds of an illegal drug for $200.00. She delivers the vodka and illegal drug to Victor but he refuses to pay for the alcohol, stating it was not the brand he wanted, and he also refused to pay for the illegal drug. She sues him for breach of contract. What will be the outcome of the suit?
The court will enforce only the portion of the agreement that is legal, the sale of the vodka to Victor.
What document is necessary for a lessor to file when acquiring a security interest in collateral?
UCC financing statement
The _______ sometimes simply referred to as the Code, is a model statute published by the National Conference of Commissioners of Uniform State Laws (NCCUSL), a private organization
Uniform Commercial Code
According to Kant, the ______ test occurs when considering whether a given action is right or wrong in the moral sense, and asks "What if everybody took the same action?"
Universalization
_________ ethics is a principles-based approach and evaluates conduct based on whether it promotes good moral character.
Virtue
Corey wishes to start up a railroad reconstruction business called, "Oh Susanna Railroads" with his good friends Mike and Fred. In order to pursue this the business will need to secure a substantial amount of money which is far beyond their own personal assets or creditworthiness. He recently approached you asking if an LLC would be the best option for their business given that the owners of an LLC have limited liability. Which statement below would be the most accurate answer to Corey's inquiry?
While an LLC does have limited liability, given the fact that Corey specifically stated he will need to raise a lot of money, an LLC has limited capitalization methods and may be difficult to raise the required amount needed.
Shylo Art Gallery wrongfully convinces Sally that her painting is a fake painting and offers to pay her $100 which is far under that actual value of the painting. Shortly thereafter, the painting is sold to Hannah in Shylo Art Gallery for $5000, the true value of the painting. Will Hannah be able to keep the painting?
Yes because Hannah is a good-faith buyer
Your boss threatens to fire you if you do not buy 10 boxes of his daughter's Girl Scout Cookies. You begrudgingly buy the 10 boxes of thin mints for fear that you will lose your job. Would this be an example of duress?
Yes because duress is determined by what the person under pressure feels, not the reasonable person.
All newly hired attorneys at the law firm of Annaopoli, Windau and Holton must sign a covenant not to compete when they agree that if they leave the firm they will not practice in the same type of law, within 50 miles of the firm for a year after leaving. Miiko, a new attorney who signed the covenant, quits the firm and decides to open an office across the street. Will the covenant not to compete be enforceable?
Yes if the court determines that the covenant not to compete covers a relatively small area and time.
When a contract is terminated it is called ___________.
a contract discharge
In a battle of the forms case, the UCC provides that (1) _______ and (2) _______.
a document may constitute acceptance even though it has additional terms than proposed by the offeror; additional proposed terms may become part of the contract
Lon has just come home from serving in the Marines and contracts with a local car dealership to purchase a car. The car must be ordered, and payment is to be made when the car arrives. The next day, Lon receives orders to return to active duty. Realizing that he doesn't need the car, he brings Tony to the dealership and asks that Tony substitute for him. Tony will take delivery and ownership of the car, and Tony will pay the dealership upon delivery. The dealership agrees to have Tony substitute for Lon. What has occured?
a novation
With regard to taxation of partnerships,
a partnership must must file an information return
Cat's Coaster Company uses cork in all of the protective drink coasters that it manufactures. If Cat;s enters into an agreement with a cork exporter from Portugal to purchase all of the cork it needs to produce its products, this would be ___________.
a requirements contract
A merger agreement should contain all of the following except:
a schedule of events
Which of the following gives a person the right to vote at an annual meeting?
a share of stock
Under the doctrine of _________, one party agrees to render a substitute performance in the future, and the other party promises to accept that substitute performance in discharge of the existing performance obligaion.
accord and satisfaction
Under the RUPA partners are not liable if they make a business decision that results in harm due to _______.
an ordinary mistake of judgement
If a statute declares that a specific type of contract is prohibited, such contract is ___________.
absolutely void
If Megan Manufacturer ships nonconforming goods to buyer Rachel Retailer, Rachel may: _______ or _______.
accept or reject the entire shipment; accept part and reject the rest
Under the UCC perfect tender rule, if the seller fails to achieve perfect tender, the buyer has the following options: _______, _______, or _______.
accept partial shipment and reject the rest; accept the entire shipment; reject the entire shipment
UCC rules on acceptance of goods and payment in regard to installment contracts mandate that:
acceptance is made separately for each shipment, and payment for each shipment is due on delivery of that shipment.
If additional terms are added to an acceptance where one of the parties to a sales contract is not a merchant, the contract is ________.
accepted as originally offered
Once the buyer has _______ the goods, the buyer must _______ in accordance with how the parties have negotiated and agreed on the details of payments.
accepted; pay for them
The UCC determines when the title passes between the seller and the buyer and allocates risk of loss from a (n) _______, _______, or _________ based on whether the agreement is a shipment contract or a destination contract.
accident; mishandling; theft
When one company takes over a target company by stepping into the shoes of the target causing it to disappear by operation of law is a(n):
acquisition
The term _______ usually refers to a purchase of a(n) _______ firm by a(n) _______ one.
acquisition; smaller; larger
In a manager-managed LLC, non-managing members generally do not have the authority to: _______.
act on behalf of the business venture
Fraud requires ___________.
actual knowledge of a lie
Under RUPA's default rules, each partner is entitled to receive _______ of the partnership's profits regardless of the partner's degree of involvement in the success of the business.
an equal share
A sole proprietorship is terminated either by _______ or by _______ in the case of the death or personal bankruptcy of the proprietor.
an express act of the principals; operation of law
Once __________ warranty has been made regarding a promise, or statement of fact regarding the goods, the seller is bound to honor that warranty.
an express warranty
What warranty has the seller implicity promised if the seller states the goods for sale will not later be seized by someone who claims to have a collateral interest in them from an unpaid loan?
an implied warranty of title
A written instruction to pay money signed by the person is which of the following?
an order; an unconditional promise to pay
The UCC applies the commercial impracticability rule when the delivery or nondelivery of goods has been made impracticable by the occurrence of _________ and said event directly affects a basic assumption of the contract.
an unanticipated event
Suppose Joseph finances his new Honda Ridgeline by signing a vehicle purchase agreement and a promissory note with Honda Finance Co. The promissory note contains the required elements of a negotiable instrument: _______.
an unconditional written and signed promise; payable to Honda Finance Co.; to repay a fixed amount
The UCC applies the commercial impracticability rule when the delivery or nondelivery of goods has been made impracticable by the occurrence of: _______ and _______.
an unforeseeable event; the event affects the basic assumption of the contract
Suppose Joe, a trucking company, and Jim, a widget manufacturer, enter into an agreement. Before the widgets are placed on the truck, Joe calls Jim and says "I can't do it. One of my rigs just broke down." Jim can treat this as _______ because it is apparent that Joe party does not intend to perform as agreed.
anticipatory repudiation
Suppose Joe and Tom have an enforceable contract. Before the time to perform Joe tells Tom, "you know Tom I don't know if I can deliver that gravel at the work site tomorrow." This may not be an example of _______ repudiation because Joe is only expressing _______ about his performance
anticipatory; vague doubts
Under the common law, contracting parties have a right to ________ a contract before performance is due if it becomes clear that the other party will not perform.
cancel
Although the UCC does not require specific language to disclaim warranties, courts have held that this phrase ____________ is sufficient to disclaim the implied warranties of fitness for a particular purpose and noninfringement.
as-is
A strategically qualified contracts attorney would have the following qualities: ______________, ______________, ____________.
asks pertinent questions about the background and purpose of a transaction; listens carefully to the business details of a transaction; translates legal terminology into business terminology
A(n) ______ transaction can be particularly important when _______ may include future damage awards, such as those that could arise from litigation over defective products, employee benefits or terminations, or environmental damage.
asset purchase; foreseeable liabilities
Generally a company that acquires a seller's _______ is not responsible for the seller's liabilities but in a _______ or consolidation the liabilities of the acquired corporation are assumed by the buyer.
assets; merger
A general partnership is legally defined as: ________. (1) (2) who are co-owners and co-managers of the business and (3) who share in the profits of their ongoing business.
association of two or more people; co-owners and co-managers; share profits equally
A negotiable instrument must be either payable: _______ or ________.
at a definite time; on demand
If the place of delivery is not specified in the contract, the buyer takes delivery _______.
at the seller's place of business
In the absence of a specific contract provision regarding the details of payment, the UCC provides that payment be made in full:
at the time and place that the delivery occurs.
Conforming goods simply means the goods:
bargained for in an agreement
Southeastern Supplies (SS) is a manufacturer and supplier of office equipment. SS contracts to sell University of Florida (UF), a local university, 5,000 UF Gator mousepads at $10 per mousepad for delivery on August 1 and payment of $100,000 due upon delivery. SS gets word from a viable source that UF has had trouble paying its suppliers. If UF repudiates before August 1 (e.g., by failing to assure SS it has the capacity to pay or by failing to pay upon delivery), UF will _________ of the contract.
be in breach
The UCC requires that a promise or order _______ and _______ by the party obligated to repay the debt, or the person issuing the order to pay.
be in writing; be signed
Suppose that Joe's widgets are stolen from Joe's warehouse before they are shipped to Bob the Buyer. If Joe is insured, the insurance company will __________.
bear the risk of loss
Suppose Joseph signs the back of a note issued by Tom, and writes nothing else on it. Joseph's signature will convert the order paper into a(n)_______, and anyone possessing it can present it to Tom for payment.
bearer paper
The legal remedy for both misrepresentation and fraud includes the innocent party _________ and __________.
being released from obligations; avoiding the contract
A new type of business that requires its board and officers to consider the impact their decisions have on shareholders, society, and the environment are called _______________.
benefit corporation
Consideration requires both sides to obtain something of value (legal _________) and to give up something of value (legal __________)
benefit; detriment
A _________ consists solely of the indorser's signature and nothing else.
blank indorsement
A(n) _______ consists solely of the indorser's signature and nothing else, which will convert order paper into bearer paper.
blank indorsement
The _______ sets the strategy and policies of the corporation and is independent from the shareholders and _______.
board of directors; officers
Large corporations may use more sophisticated forms of debt such as issuing _______ or _______.
bonds; debentures
Anticipatory repudiation is also called anticipatory _________ and occurs when one party uses unequivocal language to repudiate her contractual obligations.
breach
The UCC encourages the completion of business transactions, and defines what constitutes nonperformance, also known as a ____________.
breach
Attorneys, particularly in a business context, may also be referred to as __________.
counsel/general counsel
Suppose Samantha Seller ships 100 widgets to Brianna Buyer. Under the UCC, after inspection of the goods, if Brianna properly rejects the goods, she may also _______ and pursue any appropriate legal remedies against Samantha Seller.
cancel the balance of the contract
A proprietors ownership interest in a sole proprietorship _______ to her heirs through a gift or an estate.
cannot pass
All parties to a contract must have legal _________ to enter into the contract or the contract may become voidable.
capacity
The ability to understand the terms of an agreement is _____________.
capacity
The _______ lists how much value each partner has contributed to their _______ capital accounts.
capital contribution; individual
Partners may wish to structure profits and losses to reflect: _______ or _______.
capital contributions; amount of work
LLC managers owe fiduciary duties of ______ and _______ to the other LLC members.
care; loyalty
If John chooses to pay Laura back using _______, the result will be that their agreement will not be categorized as a negotiable instrument.
cash; diamonds; gold bullion
A _________ is a written note that indicates a bank has received money as a loan and promises to repay the amount in the future with interest, typically at a higher rate than that offered by a savings account.
certificate of deposit
A __________ is a specialized type of order and draft payable on demand and drawn on a bank.
check
A(n) _______ is simply a written order to pay money signed by the person giving the order.
check; draft
Some UCC rules are different for performance of sales contracts compared with contracts formed under _______ law.
common
A(n) __________ department is a unit within the organization that helps an organization follow rules and regulations and maintain the company's overall culture and spirit of values and ethics.
compliance
Under the moderate CSR view, a business's ethical responsibility is to: _____________.
comply with the law and pursue objectives that are legal
When the parties to an agreement wish to allocate risk associated with performing a contract, they may agree to a(n) ___________.
condition
An event that occurs after the performance under a contract and discharges the parties' contractual obligations is best referred to as a(n) ____________.
condition subsequent
_______ damages are caused by unique and _______ circumstances beyond the contract itself and flow from the breach.
consequential; foreseeable
_______ damages compensate the nonbreaching party for _______ indirect losses not covered by compensatory damages
consequential; foreseeable
In a share purchase agreement the following statement was included, "both parties agree to operate with the utmost professionalism, integrity and good character in all corporate transaction such that it instills confidence that respect for the process and the result." This is an example of a(n):
covenant
The triple bottom line emphasizes the following: ___________________
creation of economic value; creation of environmental value; creation of social value
In a _______ contract, complete performance occurs when the goods have been _______ at the contracted destination.
destination; tendered
TAMCo promises to sell JAZCo 1,000 widgets to be delivered on Tuesday. On Monday before the items are shipped, a fire destroys the factory and all the widgets. TAMCo is discharged to supply the widgets based on _______.
destruction of the subject matter
The operating agreement must determine if the LLC is a member-managed LLC or a manager-managed LLC so that third parties can:
determine who has the authority to make day to day decisions that bind the LLC
Suppose Lupita submits a bid via email to Luis to paint his house. She has done painting for him before. Before she hears from Luis she buys paint and supplies. Lupita may have an irrevocable offer based on _________.
detrimental reliance
A venture capital firm is a group of professional investors using private equity to:
develop a business
According to Kant, one should act morally because it is the right thing to do, and that humans should act from a sense of duty to human ________.
dignity
Partners must exercise due care in handling the affairs of the partnership and treat business affairs with _______.
diligence
A contract is a legally _______ promise or set of promises.
enforceable
Even if people form a valid contract, an issue may still arise as to whether the agreement is __________________.
enforceable
Promissory ________ arises most often in employment situations where an employer makes a promise of employment and then revokes the promise before the employee's start date
estoppel
When it comes to ethical decision-making, managers are often faced with _____________ that are complex with no clear ethical choice.
ethical dilemmas
From an applied perspective, __________ refers to having a conscious system in place for solving moral dilemmas.
ethics
Dissolution of an LLC is a process triggered by a(n) _______ or by a(n) _______ to dissolve the company.
event stated in the operating agreement; decision made by the members
Consideration, an element of contract formation, requires that both parties ___________.
exchange something of legal value.
The UCC requires that a writing be signed and any signature - _______ - will suffice as long as it is a symbol that demonstrates the intention to _______ a writing.
excluding an electronic signature; authenticate
When the goods ________ and are _________, title may pass to the buyer if the parties specify how title will be transferred.
exist; identified
A mistake is an erroneous belief about a(n) ________ fact, not an erroneous belief as to what will happen in the future. Erroneous beliefs about the future are covered by doctrines of _______ and impractibility.
existing; impossibility
To protect buyers, the UCC prohibits sellers from later disclaiming any _______ warranties they have made regarding the goods.
express
Under Article 2 when the seller makes a promise regarding the goods or representation of fact about the good, this is known as a(n) _________ warranty.
express
Revocation is consummated through an __________ of the offer or by some act ____________ with acceptance that would give reasonable notice from the offeror to the offeree that the offer no longer exists.
express repudiation; inconsistent
The first exception to successor liability applies to situations where buyer, either by _______ or _______ agreement, assumes the liabilities of the seller.
express; implied
The UCC rules for the major types of warranties --- _______ warranties, the implied warranty of _______ and the implied warranty of fitness for a _______ — are all nearly identical for sales and for leases.
express; merchantability; particular purpose
Broadly defined, justice is the maintenance or administration of what is ______.
fair
An enforceable contract must be the result of ___________.
genuine assent
Suppose Joe contracts with the world-renown Carolina to paint his portrait. If Carolina tries to back out of the agreement Joe can: _________.
get an order of specific performance because he hired her for her unique skills
Under the doctrine of tender of delivery, the UCC obligates the seller to: (1) _______, (2) _______, and (3) _______.
give the buyer appropriate notice; allow the buyer to take delivery; tender the goods
The UCC allows a seller to avoid the risks associated with warranties and disclaim both implied and express warranties under certain conditions, as long as the seller: _________, and _______.
gives reasonable notice; makes the disclaimer conspicuous
Each general partner in a limited partnership _______.
has personal liability; is liable for all of the partnership's debts and liabilities
A partnership may be dissolved when the partnership: _______.
has reached its agreed-upon term; by unanimous consent of the partners
In the case of De Lage Landen Financial Services v. Picasso Aesthetic and Cosmetic Dental Spa, Rubin, the sole principal of a professional corporation, lost the veil of corporate protection because:
he gave a personal guarantee
Partnership property is any property that is: _______.
held in the name of partnership; used for partnership business; purchased with partnership funds (also if it is acquired in the name of a partner with their title listed as "partner")
The principal of a sole proprietorship reports business income and expenses on her own _______ and pays taxes on business income (or deducts business losses) based on the applicable _______.
individual tax return, individual tax rate; corporate tax return, individual tax return
Rachel received a shipment of facial cleaner from Posh Skincare, Inc. In the shipment there was a preprinted document with blanks filled in that stated the items delivered, the price per item and the total price from the seller. This document is a(n):
invoice
When selling used cars, Carl's Car Lot uses an acknowledgment form, also called a(n) _______ which has preprinted provisions and blanks to accommodate the specifics of the sale.
invoice
One of the greatest values of the UCC is that:
it provides standardized and simple procedures for merchants in commercial transactions.
Carol's Cattleyard proposes a certain term in the purchase order to Harry's Haybarn. Harry's acceptance states a term that is different from the offer, most states would use the ______ rule, and use the UCC's _______ provisions to supply the term(s).
knockout; gap-filler
A person _____________ because of a mental illness or defect if the person is unable to understand the nature or consequences of a contract or is unable to act in a reasonable manner.
lacks capacity
An offer may be terminated by certain happenings or events covered by operation of law, including the following : __________________, _________________, ________________.
lapse of time; death or incapacity of either party; destruction of the subject matter before acceptance.
Which of the following types of firms are allowed to use the LLP business structure?
law firms; accounting firms; family businesses
Early English courts were classified under the king's authority as either courts of _____________, or courts of ____________.
law; equity
The third exception to the successor liability doctrine is the _______ exception, which applies when their is common ownership between the buyer and seller.
mere continuation
From a strategic perspective, _______ is often an attractive alternative because the business can use equipment on an exclusive basis without the large up-front investment required to purchase it, plus there are _______ advantages.
leasing; tax
________ of purpose means that each contract must satisfy a legal purpose to be enforceable.
legality
Lessee in ordinary courses of business means a person who in good faith and without knowledge that the lease to him (or her) is in violation of the ownership rights or security interest or leasehold interest of a third party in the goods leases in ordinary course from a person in the business of selling or leasing goods of that kind but does not include a pawnbroker.
lessee in ordinary course of business
A true lease involves two parties: (1) the _______ the party who owns the leased goods and is making them available for lease; and (2) the _______ the party who acquires the right to the temporary possession and use of goods under a lease.
lessor; lessee/possessor; possessee
A special kind of contract that binds the parties to confidentiality and exclusivity obligations during the due diligence phase of a corporate transaction is called a:
letter of intent
A corporate transaction usually begins with a(n) _______ followed by a process of _______ in which the acquirer reviews the financial state of the target company and identifies any potential or actual legal liabilities of the target.
letter of intent; due diligence
Frances wants to start a new small business and is seeking advice as to which type of entity would best suit his needs. His businesses has a high potential for liability and therefore he wants to protect his personal assets, but he does not want to spend a lot of time, effort or money in starting the business up or continuing the management of it. Additionally, he is looking for an entity that would give him the best tax advantages. Which type of business organization would suggest?
limited liability company
The _______ prohibits a general partner from engaging in competition with the interests of the partnership and also prohibits other conflicts of interest.
loyalty; duty of care
In the case of United States v. Apple, the court determined that the Sherman Antitrust Act _________.
made only unreasonable restraints of trade illegal
The ___________ provides that the acceptance of an offer is generally effective upon ___________ of the acceptance when sent in a commercially reasonable manner, and not when acceptance is received by the offeror.
mailbox rule; dispatch
Studies and research indicate that when _______ and their ________ work cooperatively, the results contribute to better strategic business decisions that add value to the business.
managers; attorneys
Similar to the board of directors in a corporation, an LLC may have:
managing members
If a rule is mandatory, regarding business contracts, the court will enforce the _______________.
mandatory rule.
Courts will not generally consider ____________ or ___________ as a mistake that allows a contract to be avoided.
market conditions; financial responsibility
For one party to avoid a contract on the basis of misrepresentation, he must prove the following elements: ____________, ____________, and ____________.
material misrepresentation; misrepresentation of fact; justifiable reliance
Suppose that Joe and Tom have a contract to sell land. Joe promises to sell the land to Tom in 30 days. Four days before the closing, Tom learns that Joe is intending to sell the land to Bruce for a higher price. Tom comes to you for advice, with the clear understanding that he wants to STOP the sale. In that case you advise him that neither _______ nor _______ are adequate remedies but that ________ might work.
money damages, specific performance; injunctive relief
Generally, the UCC provides that a merchant can create an irrevocable firm offer even if there is ________ by the offeree. However, if the offeree gives consideration for the offer this would create a(n) _____.
no consideration; option contract
If Consumer Carl purchases a new in-the-box never-been-used lawn mower from Nelly Neighbor who is retired and not a merchant, there is ________ to Carl.
no implied warranty of merchantability
Contracts may be based on __________, that is, consideration that is stated in a written contract even though it is not actually exchanged.
nominal consideration
Suppose Willie Wonka is a manufacturer and supplier of raw chocolate ingredients. Willie contracts with Godiva's Chocolate USA to supply 1,000 chocolate pallets at $20 for Godiva's manufacturing plant. The pallets are to be delivered to Godiva's distribution warehouse in California on September 1 with payment due on delivery. Suppose that Willie delivers nonconforming pallets to Godiva who accepts but then later rightfully revokes the acceptance. To prevail in court, Godiva should:_______. (Choose all correct answers)
notify Willie within a reasonable time; verify the nonconformity substantially impairs the value of the goods
Courts will use a(n) _______________ to determine whether a ___________ person would have believed that an intoxicated person had sufficient capacity to enter into an agreement.
objective standard; reasonable
After the parties have entered an agreement, the contemplated performance of the obligations may become ____________ impossible and subject to discharge.
objectively
The requirements for the enforceability of a lease are flexible and allow for ______ or incorrect statement of certain terms.
omissions
Courts may supply a reasonable term in a situation where the contract is ___________ or has ____________ terms.
omitted; silent
Paris offers to buy "all the mulch" Market Basket has and they agree. This contract is called a(n):
output contract
Generally ______ is a required term in enforceable contracts for the sale of goods the UCC provides an exception in a(n) _____ contract when the buyer agrees to buy all of the goods a seller produces.
output; quantity
Article 2A defines a lease as "a transfer of the right to ________ and _______ of goods for a term in return for consideration, buy a sale or retention of a security interest is not a lease."
possession; use
Courts sometimes justify departing from _________ on the basis that technological or societal changes render a particular precedent unworkable.
precedent
_________ is the application of law from previous cases to current cases with substantially similar circumstances.
precedent
Strict adherence to _________ and the doctrine of ___________ do not allow for evolving societal standards of behavior or expectations.
precedent; stare decisis
The Magnuson-Moss Warranty Act requires that warranties be written conspicuously and in plain and clear language, as well as ________ state law.
preempting
Businesses frequently use _______ to initiate or respond to an offer to sell a good which usually have some blanks for the particular negotiated terms unique to the transaction.
preprinted forms
The most common type of corporation is the _______ corporation which does not sell ownership interests to the public.
privately held
_______ corporations have substantial flexibility in terms of their internal operating procedures and do not generally have to comply with rigorous corporate structures or formalities.
privately held
_______ corporations may also find that their expansion plans require even more capital than can be raised using private investors.
privately held
Suppose that Joe owns a 44 acre ranch and Tom wants to buy it. Suppose the two met at the Triangle Coffee Shop to negotiate and agreed on a sale price of $150,000. Suppose Tom's real estate broker accidentally deletes a decimal in the price, making it $15,000 instead of the parties' agreed-upon price of $150,000. At closing, Tom gives Joe a check for $15,000 and refuses to pay any more, citing the price in the contract. So long as there was a sufficient basis for believing the parties intended the price to be $150,000, a court may simply _______ the contract. Tom may then show that Joe breached the contract and request _______ as an additional remedy.
reform; specific performance
In an installment contract, the buyer may _______ an installment only if the nonconformity substantially impairs the value of that installment and the nonconformity cannot be cured.
reject
In an installment contract, the buyer may _______ an installment only if the nonconformity substantially impairs the value of that installment and the nonconformity cannot be ______ by the seller.
reject; cured
If a seller breaches a contract, the buyer has various options to pursue remedies that depend to some extent on whether the buyer has: _____ or _______ the goods.
rejected; accepted
Anticipatory _______ can occur when a(n) __________ person would have believed that the promisor was unlikely to perform.
repudiation; reasonable
A negotiable instrument:
requires a fixed amount of money; must be in writing; is payable on demand or in the future (all of the above)
All of the following are methods that a sole proprietorship can raise money except: - sell ownership in the business - private loans - commercial loans - line of credit
sell ownership in the business
Most courts have used four factors to consider whether to pierce a corporation's protective veil, and if two are present is court is more likely to hold _______ personally liable for corporate debts.
shareholders
The _______ are the owners of a corporation.
shareholders
If Karen is a schizophrenic under a doctor's care, she lacks capacity to sign a contract because of mental illness or defect if either: _______________, ____________, and ______________.
she is unable to act in a reasonable manner in relation to the transaction; she is unable to understand the nature and consequences of the contract; the other party has reason to know of her condition
The statute of frauds requires the writing to have the _________ to be enforceable.
signature of the party against whom enforcement is sought
The statute of frauds provisions in the UCC require that the writing contain (1) ________, (2) ________ and (3) _______.
signature of the party against whom enforcement is sought; language showing the intention to form a contract; quantity of goods
The doctrine of _________ states that similar cases with similar facts and issues should have the same judicial outcome.
stare decisis
What law states that if the total payments to be made under the lease, excluding payments for options to renew or buy, are $1,000 or more, the lease must be in writing?
statute of frauds
Suppose Marvelous Marvin Manufacturer sells Wally World 1,000 widgets on an installment contract for $15,000 each installment. If Wally rejects a nonconforming installment he can only do so because the nonconformity _______ impairs the value of that installment and the problem cannot be ______ by Marvelous Marvin. (Choose two correct answers)
substantially; cured
A finance lessee will have to turn to the _______, with respect to any dissatisfaction with the goods
supplier
The UCC defines "goods" as property that is: __________ and _________.
tangible; movable
What may be the best reason(s) to lease equipment?
tax deductions; current equipment access; preserve cash flow
Because it is a pass-through entity, an LLC can avoid double-level taxation, which means _______.
taxes imposed on both the entity and its members
According to the UCC, the true lease of goods involves the payment for _______ possession with an exception that the goods will be returned to the owner at the end of the lease term.
temporary
A franchise agreement generally covers the following: _______.
term of the agreement; territory rights; franchise fees
At the federal level, when Congress drafts a statute that has not yet been signed by _________, it is known as a bill.
the President
Suppose Harry promises to paint Carol's home in exchange for Carol's promise to smuggle 500 cuban cigars into the United States in violation of federal law. What is the result?
the contract is void and neither party may enforce it.
A promissory note creates a promise to repay involving two parties:
the maker and the payee
If the court determines that a de facto merger occurred, ________.
the merged company will still incur the pre existing debts and liabilities
Under Article 2 of the UCC, if both parties to a contract are merchants, additional terms automatically become part of the enforceable contract unless one of the following conditions exists:_______, _______________, or ____________.
the offeror is limited to original terms; the offeror objects to the additional terms within a reasonable time; the additional term is a material change
Voting rights of LLC principals are governed by:
the operating agreement
Undue influence allows the influenced party to avoid a contract if two elements are met: ____________ and ____________.
the parties had a fiduciary relationship; terms are unfair
Frustration of purpose may be used to discharge an obligation if, after the parties enter into an agreement, the following three criteria exist: (1) _______ (2) _______ and (3) _______.
the parties have not otherwise agreed on who bears the risk of such an occurrence; some event occurs, when the non-occurrence of the event was a central assumption of both parties when entering into the contract; a party's principal purpose is substantially frustrated without her fault.
Which of the following is NOT a right enjoyed by a shareholder of a corporation?
the right to elect and remove officers
In Car Transportation Brokerage Company v. Blue Bird Body Co., the court held in favor of:
the seller
The parties may agree that ________ will pass once the goods leave the seller's ________.
title; warehouse
If the term in an LLC operating agreement expires but but the members want the LLC to continue, they must have a _______ vote to fix an additional term.
unanimous
True or false: A corporation's bylaws are not filed with the state but are kept in the corporate records.
true
True or false: In a partnership agreement, if all the partners agree that Billy's capital contribution should be greater because he has provided the lyrics and melodies for the band's songs, he may be entitled to a higher proportion of the profits.
true
A negotiable instrument consists of the following elements ________.
unconditional promise or order; to pay a fixed amount of money; made payable "to order, "to bearer," or "to cash" (ALSO: must be in writing; signed; made payable either on demand or at a definite time in the future)
In addition to misrepresentation, the common law recognizes: _________, ___________, and ___________ as contractual defenses.
undue influence; duress; unconsciousability
The defense of _________ gives legal relief to a party who has been induced to enter into a contract through the improper pressure of a _________ relationship.
undue influence;trusted
Tim and Joe, both 22, make promises to each other about a loan for a car. If the agreement has all the required elements, it will be considered a(n) _________ contract.
valid/enforceable
If the instrument is classified as a negotiable instrument, it can be readily exchanged or sold to third parties for __________.
value
An effective __________ program places a duty on all employees to report violations of law or the company's code of ethics to a superior manager.
values management
A promise to repay with a(n) _______ rate will be a negotiable instrument as long as the principal or total loan amount is a(n) ________.
variable interest; fixed amount
What makes Rawl's theory so original is his notion that everyone negotiates from behind a "____________"
veil of ignorance
_______ is funding provided by a group of professional investors for use in a developing business, usually in a particular industry such as health care.
venture capital
_______ are recognized as legally enforceable _______ under state statutory laws based on Article 2 of the UCC.
warranties; promises
A(n) ____________ is a seller's promise to a consumer concerning an important aspect of the goods.
warranty
Suppose on September 1, Tom sends Joe an email with PDF attachments offering to buy his ranch for $125,000. And suppose that the offer says the must respond by September 5th. On September 2nd, Joe sends written agreement to the offer by US Mail. Tome Receives the acceptance in his office on September 10. Is there a valid contract?
yes, there is a contract based on the mailbox rule.
