Commercial Transactions Midterm

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Elena, an employee of Builders, Inc., forges the signature of Carly, Builders's president, on a company check and cashes it at Delta Bank. Carly would ratify Elena's actions by a.entering into a repayment agreement with Elena. b.discharging Elena from Builders's employment. c.asking Delta Bank to prosecute Elena for forgery. d.filing criminal charges against Elena herself.

Gil and Hera are employees of IT Business Solutions, Inc. Under the Equal Pay Act, IT Business Solutions can legitimately pay different wages on the basis of a.merit. b.substantial equality of skill, effort, and responsibility. c.gender. d.job descriptions.

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

Craig, Donna, and Eve do business as Fast-Track Career Consultants. Eve's relationship to Fast-Track ends, but the firm continues to do business. This is a.dissolution. b.dissociation. c.most likely illegal. d.unethical.

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

Fact Pattern 16-1 Nina obtains a check payable to her order from Oran. Nina signs the back and gives the check to Patricia. Patricia writes "Pay to Patricia" above Nina's signature. Refer to Fact Pattern 16-1. After Patricia writes "Pay to Patricia" above Nina's signature, further negotiation of the check b. requires Patricia's indorsement and delivery. d. requires Nina's re-indorsement and delivery.

GMO Grain Corporation and Hybrid Yields, Inc., form a joint stock company. The ownership of a joint stock company is represented by a.trust certificates. b.shares of stock. c.title documents. d.partnership certificates

Haute Dogs, Inc., sells a franchise to Irene's Cuisine, a lunch truck. Irene's Cuisine is a.a franchisor. b.a franchisee. c.a principal. d.a partner.

The incorporation of the town of Halfway, Oregon, is approved by the state. Halfway is a.not a corporation. b.a public corporation. c.a private corporation. d.a publicly held corporation.

Berton transfers a draft by signing it and delivering it to Cormac. Berton is a.a drafter .b.an indorsee. c.an indorser. d.a promisor.

On May 1, Mia signs a check that is payable to the order of Nicole and that is dated July 1. This check is a.nonnegotiable, because it is payable to a corporation. b.nonnegotiable, because it is signed by the drawer. c.negotiable. d.nonnegotiable, because it is postdated.

Ray is a delivery driver for Sicilian Pasta Company. Ray does exactly what the company tells him. Ray is a.an independent contractor. b.a work for hire. c.an employee. d.a principal.

Ruby Red Corporation is incorporated in South Carolina. In that state, Ruby Red is a.a non-entity. b.a foreign corporation. c.a domestic corporation. d.an alien corporation.

Based on Esteban's conduct, Floyd reasonably believes that Glynis has the authority to act on Esteban's behalf even though Glynis does not have the actual authority to do so. Floyd makes a payment to Glynis for Esteban. Glynis keeps the money and disappears. Esteban a.can demand that Floyd make a repayment directly to Esteban. b.must repudiate Glynis's misconduct to avoid liability. c.can obtain damages from Floyd for Glynis's misconduct. d.may be estopped from denying that Glynis had authority.

Based on Oona's conduct, Porcio reasonably believes that Qasim has the authority to act on Oona's behalf even though Qasim does not have the actual authority to do so. In this circumstance, Qasim has a.no authority. b.express authority. c.implied authority. d.apparent authority.

Brad buys a bulldozer from Construction Equipment Corporation, which he leases to Deep Digg, Inc. In this situation, the lessee is a.Construction Equipment Corporation. b.none of the choices. c.Brad. d.Deep Digg, Inc

T/F: A refusal to pay an instrument constitutes dishonor under any circumstances.

T/F: Stocks represent the borrowing of funds by firms.

T/F: With respect to negotiability, the location of a signature on a document is important.

T/F: The executive officers represent the ultimate authority in every corporation.

T/F: A corporation whose shares are held by relatively few persons is a close corporation.

T/F: A limited liability company can be held liable for any loss or injury caused by the wrongful acts or omissions of its members.

T/F: The state can dissolve a corporation for failing to pay taxes.

T/F: The true ownership of a corporation is represented by common stock.

T/F: When lending capital to a small business, a bank may require a personal guaranty of its repayment from the owner.

T/F: When the principal-agent relationship is not contractual, the agent has no right to specific performance.

T/F: Withdrawal from a partnership before the end of its express term constitutes a breach of the partnership agreement.

Alvin signs a promissory note payable to the order of Borrow & Spend Loan Company. The note states that it is payable "with interest at the legal rate." This note is a.negotiable. b.not negotiable, because it does not specify a rate of interest. c.not negotiable, because it is a promissory note. d.not negotiable, because it is payable only with interest.

Bayou Boats, Inc., contracts for the sale of seven swamp boats to Eventide Fishing Tours. Bayou repudiates the contract. Eventide's recovery is measured at the time a.Eventide learned of the breach. b.Bayou advertised the goods. c.Eventide ordered the goods. d.Bayou knew that it would repudiate the contract.

Beef Burgers, Inc. contracts to buy five hundred head of cattle from Cattle Ranch. Before the seller delivers, an outbreak of disease causes a quarantine of the ranch. In this circumstance, the perfect tender rule a.no longer applies. b.applies to both parties. c.applies only to Cattle Ranch. d.applies only to Beef Burgers

Ben incorporates his app business as Clickology, Inc. Under most state corporation statutes, Clickology can have a.perpetual existence. b.only a finite, yet-to-be-determined existence. c.only a one-year, renewable existence. d.only a one-year, nonrenewable existence.

Ben is a shareholder of Commerce & Trade Inc. As a shareholder, Ben does not have a.a right to compensation. b.inspection rights. c.dividend rights. d.preemptive rights.

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

Cliff is a member of Dental Clinic, LLC. Cliff can participate in the firm's management to a.any extent. b.no extent. c.the extent of his investment in the firm. d.the extent that he assumes liability for the firm's debts.

Cloud Computing & Processing Corporation wants to hire Dhani, a noncitizen with special qualifications. To hire Dhani, Cloud Computing must petition a.the U.S. Department of Labor. b.the Social Security Administration. c.the National Labor Relations Board. d.U.S. Immigration and Customs Enforcement.

Consumer Loans LLC signs an instrument payable to the order of Diana that states, "The maker of this note at the date of maturity, April 1, 2019, can extend the time of payment, but for no more than a reasonable time." This instrument is a.nonnegotiable, because it is not payable within a definite time. b.nonnegotiable, because it is payable to a specific payee. c.nonnegotiable, because it includes an extension clause. d.negotiable.

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

Darin is a limited partner in Eco Baits, a pest control service organized as a limited partnership, which cannot pay its debts. Darin is liable for the debts a.to the extent of her capital contribution to the firm. b.in proportion to the number of partners in the firm. c.to the full extent. d.to no extent.

Darin is a limited partner in Eco Baits, a pest control service organized as a limited partnership, which cannot pay its debts. Darin is liable for the debts a.to the extent of her capital contribution to the firm. b.to the full extent. c.in proportion to the number of partners in the firm. d.to no extent.

Diane organized, and owns and operates, Reliable Roofing, a construction outfit, in the simplest form of business organization. This is a.a sole proprietorship. b.a corporation. c.a limited partnership. d.a limited liability company.

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

Emma is interested in buying a franchise from Fine Jewelry, Inc. The franchisor must disclose material facts that Emma needs to make an informed decision concerning this purchase, according to a.the Federal Trade Commission's Franchise Rule. b.federal antitrust laws. c.the Petroleum Marketing Practices Act. d.no law.

Entrepreneur LLC owes Sole Saver Auto Dealership $2,000. Entrepreneur executes a note to Sole Saver as security for the debt. This security a.satisfies the value requirement for HDC status. b.does not satisfy the value requirement for HDC status. c.does not constitute sufficient consideration for HDC status. d.satisfies the consideration requirement for HDC status.

Fact Pattern 10-1 Berry indicates that she is acting as an agent on behalf of an unidentified client—Cuisine Catering, LLC—when she enters into a contract with Désean. Refer to Fact Pattern 10-1. Cuisine Catering is a. a partially disclosed principal. b. an undisclosed principal.

Fact Pattern 2-1 Jumbo Juice Inc. offers entrepreneurs the opportunity to operate a franchise under the Jumbo Juice trade name as a member of a select group of dealers that engage in retail juice sales. Refer to Fact Pattern 2-1. Before a franchise contract is signed, Jumbo Juice must explain a.the contract's termination provisions. b.all of the choices. c.the laws governing franchising. d.the nature and operation of a franchise.

Fact Pattern 9-2 Faye works as an administrator and receptionist for Garage Door Store. The store withholds federal taxes from Faye's pay, and controls the methods and details of the performance of her work. Faye is not authorized to modify the prices or other terms of a sale at the store. Homer installs Garage Door products at the buyers' locations. Refer to Fact Pattern 9-2. At the shop, Faye is a.an employee and agent. b.a principal. c.an independent contractor. d.an employee only.

Farm & Ranch is an unincorporated cooperative. Unincorporated cooperatives are often treated like a.partnerships. b.corporations. c.limited liability companies. d.business trusts.

Fiona writes a check "pay to the order of Gerri" drawn on Fiona's account at Home State Bank. Gerri presents the check for payment to Home State, which accepts it. Primarily liable on the check is a. Home State Bank b. Gerri. c. none of the choices. d. Fiona.

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

Ford is the sole proprietor of Go, a game app subscription service. As a sole proprietor, on the business's profits, Ford pays a.only personal income taxes. b.both personal and business income taxes. c.no income taxes. d.only business income taxes.

Frank is an employee of Guitar Makers, LLC. Guitar's employee manual states that workers, such as Frank, will be dismissed only for good cause. With respect to the employment-at-will doctrine, this is a.an exception based on contract theory. b.an exception based on tort theory. c.an example of the doctrine. d.an exception based on public policy.

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

Global Shipping Corporation and Harbor Warehouse Company transfer their property to Investment Managers, Inc., which manages the property and distributes the profits to the beneficiaries. This form of business organization is a.a business trust. b.a syndicate. c.a joint stock company. d.a joint venture.

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

Greenway Corporation and Happy Trails, Inc., combine their efforts to build a network of biking and hiking trails along an unused railroad spur. Their form of business organization is a.a joint venture. b.a business trust. c.a syndicate. d.a joint stock company.

Holly files an employment discrimination suit against Industrial Corporation under Title VII of the Civil Rights Act on a disparate-impact theory. To succeed, the plaintiff must show that as a member of a protected class, she was adversely affected by any of the following except the employer's a.seniority system. b.tests. c.procedures. d.practices.

Jorge, Kim, and Lucy apply to work for Meat Packing, Inc. Meat Packing must verify the identity and eligibility to work of a.each new hire. b.only those hired as contractors. c.only those hired as day workers. d.only members of ethnic minorities.

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

Livia takes temporary family leave from her job at Manufacturers Corporation to care for a new baby. On Livia's return from the leave, Manufacturers must a.restore Livia to her same position or a comparable position. b.reimburse Livia for her expenses while on leave. c.do nothing. d.promote Livia to the status of a key employee.

Mary applies for a job with Northern States Oil Company. Northern States does not hire her because of her ethnicity, or national origin. This is a.disparate-treatment discrimination. b.a constructive discharge. c.not discrimination. d.disparate-impact discrimination.

Medical Supply Company and Health Care, Inc., enter into a contract for a sale of medical equipment and supplies. Under either a shipment contract or a destination contract, the seller must a.give the buyer any necessary documents of title. b.allow the buyer to reject the goods for any reason. c.deliver the goods to a particular destination. d.place the goods into the hands of a carrier.

On July 10, Pet Supply Store orders fifty small dog collars from Quality Collars, Inc. to be delivered by July 15. On July 13, Quality Collars tenders fifty large dog collars. Pet Supply rejects the shipment. Quality Collars has a.until July 15 to cure. b.no right to cure. c.until the end of the business day on July 13 to cure. d.unlimited time to cure.

Orly's Adventure Travel and Paquito's Wild River Tours form a joint venture. Orly can participate in the venture's management to a.any extent. b.the extent that she assumes liability for the venture's debts. c.no extent. d.the extent of her investment in the venture.

Rachel is an agent for Sports Logo Merchandise, Inc. Rachel makes an innocent misrepresentation when entering into a contract on behalf of Sports Logo with Team Marketing & Sales Corporation. Sports Logo a. is directly responsible for Rachel's misrepresentation. b. may rescind the contract.

Resource Corporation and the Service Employees International Union are sued by plaintiffs alleging job discrimination in violation of Title VII of the Civil Rights Act. This law applies to employers and labor unions with at least a.fifteen employees or members. b.five employees or members. c.one employee or member. d.ten employees or members.

Rita and Salvatore do business as Tech Fixers, a partnership. In most states, for the purposes of collecting judgments and having accounting performed, this firm would be treated as a.an entity. b.a non-entity. c.a person. d.an aggregate of individuals.

Rod negotiates a bearer instrument to Shauna by a.delivery alone. b.delivery with an assignment of its rights under a contract. c.presenting it in response to a demand by Shauna. d.delivery with any necessary indorsement.

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

Rural Development Company and Suburban Real Estate Corporation form a joint stock company. A joint stock company can be formed for, at the most, a.a perpetual existence. b.an implied duration of not more than six months. c.an express duration of not more than one year. d.a single activity or transaction.

Security Insurance, Inc. has a board of five directors. Security's bylaws do not state any quorum requirements. In most states, a quorum for Security's board meetings would be a.three directors. b.all of the directors. c.one director. d.four directors.

Solar Panels Corporation requires its employees to have a high school diploma, claiming a connection between a high school education and job performance. In a suit against Solar under Title VII of the Civil Rights Act, this is shown to have a discriminatory effect. Solar has a.a business necessity defense. b.a seniority system defense. c.a bona fide occupational qualification defense. d.no defense.

Vicenzo, in good faith and for value, gets from Wren a check "payable to the order of bearer." Vicenzo does not know that Wren stole the check. Vicenzo is a.an HDC. b.not an HDC, because Wren did not acquire the check in good faith. c.not an HDC, because the check is a bearer instrument. d.not an HDC, because Wren did not acquire the check for value.

Workhorse Air Crane Corporation employs aircraft mechanics, computer programmers, outside salespersons, and professionals, including pilots. Employees exempt from the Fair Labor Standards Act's overtime provisions include all of the following except a.aircraft mechanics. b.outside salespersons. c.professionals. d.computer programmer

Avril receives a payroll check from Business Solutions, Inc., and indorses it by signing her name on the back of the check. This is a.a restrictive indorsement. b.a blank indorsement. c.a qualified indorsement. d.a special indorsement.

Business Rental Corporation (BRC) and Cartage Trucking Company enter into a contract for a lease of ten hydraulic lifts. Under the perfect tender rule, BRC must ship or tender goods to the lessee that a.substantially conform to the contract description in most details. b.conform to the contract description in every way. c.entirely conform to the contract description except in one or two details. d.approximately conform to the contract description.

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

Community Bank receives a check drawn by Dennis. The check lacks a proper indorsement. Payment can be postponed without dishonor a.for thirty days. b.until the proper indorsement is obtained. c.under no circumstances. d.indefinitely.

Curt writes a check on his account at North Bank to Mandy, a famous singer. The person claiming to be Mandy is an imposter, however, named Debra. Debra indorses the check to Portions, a casino, for which North Bank cashes it. Ultimately, the loss will most likely fall on a.North Bank. b.Curt. c.Portions. d.Mandy.

Elegant Carpets, Inc., and Fantastic Floors Stores enter into a contract for a sale of carpeting to be delivered under a shipment contract. This contract requires Elegant Carpets, the seller, to a.deliver the goods to a particular destination. b.place the goods into the hands of a carrier. c.allow the buyer to reject the goods for any reason. d.inspect the goods before shipping them

Elise is a director for Fro-Yo Inc. Elise is also a director for Gelato Ice, Inc. When Fro-Yo's board considers a contract with Gelato, Elise must a.resign from Fro-Yo or Gelato. b.make a full disclosure of any conflict of interest. c.use her business judgment to rule on the deal. d.resign from Fro-Yo and Gelato.

Emma is one of three partners in Fast Work, a commercial janitorial service. With respect to her interest in the firm, when she dies, her heirs are most likely entitled to a.nothing. b.the buyout price paid by the firm for the interest. c.a payout of her capital contribution without more. d.one-third of the value of the interest.

Fact Pattern 13-1 Farmers Produce, Inc., and Growers Market enter into a contract for the delivery of locally grown fruits and vegetables. The parties use a standard Farmers Produce form that contains some of the terms the parties agree on but not others. Some of the produce spoils before it can be cooked, served, and eaten, or sold. Growers Market refuses to pay for the spoiled goods. Refer to Fact Pattern 13-1. Growers Market contends that the practice in the trade with respect to payment for spoiled produce justifies its refusal to pay. Growers Market is arguing that the court should take into account a.the course of dealing. b.the usage of trade. c.the course of performance. d.none of the choices.

Fact Pattern 14-1 Daily Bread Bakeries, Inc., contracts to buy all of its ingredient requirements for bread making, at a certain minimum per year, from Enriched Flour & Grain Corporation for six years. After three years, Daily Bread tells Enriched that it plans to sell its assets to Flat Bread Shops, Inc. Flat Bread refuses to assure Enriched that it will continue Daily Bread's contract. Refer to Fact Pattern 14-1. Enriched can a.assign its rights under the contract but cannot terminate it. b.terminate the contract and seek damages. c.suspend performance under the contract until Enriched is fully paid. d.do nothing.

Fact Pattern 15-2 LNG Corporation and Mid-state Utility Company enter a contract for a sale of liquefied natural gas. LNG draws a draft unconditionally ordering Mid-state Utility to pay $50,000 to LNG's order in sixty days. Mid-state Utility signs and dates the draft. Refer to Fact Pattern 15-2. On this instrument, LNG is a.the maker. b.the drawer. c.the trader. d.the drawee.

Fact Pattern 3-3 Bryn, Cornell, and Duke are general partners in Equity Lending, a consumer credit, mortgage, and investment firm. Their agreement states that it is a breach of the agreement for any partner to assign his or her interest to a creditor without the consent of the other partners. Refer to Fact Pattern 3-3. The partners decide to dissolve Equity Lending. Duke collects and distributes the firm's assets. This results in a.nothing with respect to the firm's existence. b.the termination of the firm's legal existence. c.the temporary suspension of the firm's business. d.the continuation of the firm's business.

Guitar Factory Corporation files a registration statement and delivers a prospectus to the appropriate parties. These items are intended to enable the evaluation of certain financial risks by a.government regulators to disclose to the general public. b.unsophisticated investors. c.sophisticated investors only. d.market professionals to explain to all investors.

Gwen and Hugo do business as Gwen & Hugo Civil Engineers, a partnership. This firm is governed by the Uniform Partnership Act a.under all circumstances. b.in the absence of an express agreement. c.in the absence of an implied agreement. d.only under an express agreement.

High Plains Distribution Inc. hires Inez to work on its shipping dock, accepting deliveries, dispatching trucks, and dealing with customers and other companies' drivers. With respect to High Plains, Inez is most likely a.an independent contractor. b.an agent. c.a work for hire. d.a principal.

Holly is a director of International Foods, Inc. As a director, with respect to the corporation, Holly is a.an officer. b.a fiduciary. c.an incorporator. d.an employee.

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

Jane signs an instrument using a "J" with a swirl around it. With this mark for a signature, the instrument is a.not negotiable, because an initial is not a signature. b.negotiable. c.not negotiable, because an initial is not an indication of serious intent. d.not negotiable, because an initial is not state the signer's name.

Jim is considering forms of business organization, including the limited liability company (LLC), for his business—Kettle Popt-Korn. Most states require that an LLC have a.a corporate veil, but no minimum number of participants. b.at least one member. c.at least one non-member manager. d.at least two members.

Lauren, Maria, and Nina form a syndicate to buy a professional soccer franchise. This syndicate could be set up as a.a joint venture. b.a corporation. c.a limited liability company. d.a sole proprietorship.

Mythic Games Company employs two hundred workers full-time. If Mythic Games plans to have a mass layoff, it must provide its employees with notice of at least a.ninety days. b.sixty days. c.thirty days. d.one year.

On the back of a check payable to Nero, he writes "Pay to Odell, without recourse" and signs it. This a.renders the check nonnegotiable. b.relieves Nero of liability on the check. c.does not effect the check's negotiability or any party's liability. d.relieves Odell of liability on the check.

Quisa and Reilly are partners in Sport Bikes, which rents and sells bikes, bike accessories, and related gear. Quisa manages the business. Unless the partnership agreement states otherwise, Quisa is a. entitled to compensation in proportion to her capital contribution. b. not entitled to compensation.

Rachel, a fifty-five-year-old member of a racial minority with a disability, believes that she is a victim of employment discrimination. Potentially the most widespread form of discrimination is based on a.gender. b.age. c.disability. d.race.

Rollo is a member of Smooth Operators LLC, a limousine service. Rollo's relationship to Smooth Operators ends, but the firm continues to do business. This is a.unethical but not a violation of the law. b.dissociation. c.a violation of the law. d.dissolution.

Rona issues a check for $4,000, dated May 1, to Stavros. The check is drawn on United Bank. Stavros indorses the check and transfers it to Tony. Stavros will be liable on the check if b. United Bank dishonors the check. d. all of the choices.

Ruby Red Corporation is incorporated in South Carolina. In that state, Ruby Red is a.an alien corporation. b.a domestic corporation. c.a foreign corporation. d.a non-entity.

Sara believes that she was rejected for a position at Trek Travel Agency on the basis of her race. Sara files a suit against Trek under Title VII of the Civil Rights Act. To establish a prima facie case of employment discrimination, Sara must show all of the following except that a.she is a member of a protected class. b.other persons of her race hold similar positions with similar employers. c.she was rejected for a position by Trek. d.she applied and was qualified for the job in question.

Selections, a general partnership, operates a gift shop. Selections has five partners. Tony has a one-third interest in the partnership. Each of the other partners has a one-sixth interest. With respect to management decisions a.the senior partner decides. b.a majority of the partners must agree. c.Tony rules. d.four of the partners must agree.

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

Workhorse Air Crane Corporation employs aircraft mechanics, computer programmers, outside salespersons, and professionals, including pilots. Employees exempt from the Fair Labor Standards Act's overtime provisions include all of the following except a.computer programmers. b.aircraft mechanics. c.professionals. d.outside salespersons.

Anna is an employee at Bento Food Mart. Anna is called for jury duty and as a result cannot work her scheduled shift. Bento fires Anna. She successfully sues Bento for reinstatement. With respect to the employment-at-will doctrine, this is a.an exception based on contract theory. b.an example of the doctrine. c.an exception based on public policy. d.an exception based on tort theory.

Ben incorporates his app business as Clickology, Inc. Under most state corporation statutes, Clickology can have a.only a one-year, renewable existence. b.only a finite, yet-to-be-determined existence. c.perpetual existence. d.only a one-year, nonrenewable existence.

Cady files an employment discrimination suit against Durable Goods Corporation under the Civil Rights Act. If Cady shows that Durable Goods acted with malice or reckless indifference, she may recover a.an unlimited amount of compensatory and punitive damages. b.punitive, but no compensatory, damages. c.a limited amount of compensatory and punitive damages. d.compensatory, but not, punitive damages.

Camille signs an instrument in favor of Donald that states it is "subject to a certain agreement between Camille and Enzo." This instrument is a. negotiable. c. not negotiable, because it is made subject to a separate agreement.

Clear View Company, which is based in Delaware, agrees to sell fifty windows, currently stored in Florida, to Far Sight, Inc., which is based in Hawaii. Absent an agreement to the contrary, the place of delivery is in a.California. b.Hawaii. c.Florida. d.Delaware.

Colin, Debby, and Erin agree to be partners in Fajita Pizza, splitting the profits equally. Colin contributes 65 percent of the capital. When Fajita Pizza is dissolved, its liabilities are greater than its assets. The losses are paid by a.Colin because he contributed most of the capital. b.all of the partners in proportion to their capital contributions. c.all of the partners in proportion to their shares of the profits. d.Debby and Erin because they contributed the least of the capital

Dreem Land Corporation and Earthbound Investments Company transfer their property to Financial Managers, Inc., which manages the property and distributes the profits to Dreem and Earthbound. This form of a business organization is a.a syndicate. b.a joint venture. c.a business trust. d.a joint stock company.

Emma is one of three partners in Fast Work, a commercial janitorial service. With respect to her interest in the firm, when she dies, her heirs are most likely entitled to a.a payout of her capital contribution without more. b.nothing. c.the buyout price paid by the firm for the interest. d.one-third of the value of the interest.

Fact Pattern 12-2 Kyla replaces Lomax in his job at Motor Vehicle Manufacturing Corporation (MVMC). Refer to Fact Pattern 12-2. To succeed with an age-discrimination claim against MVMC, Lomax will have to show that a.MVMC's qualifications for Lomax's job are too high. b.no one could do Lomax's job as well as he could. c.Lomax is qualified for his job. d.Kyla is not qualified for Lomax's job.

Fact Pattern 12-3 Art, who has a disability, is an employee of Banquet Services, Inc. After the installation of new doors on the entrance to Banquet's hall, Art finds it nearly im-possible to enter and exit. For repeatedly failing to be on time, Banquet replaces Art with Connie, who does not have a disability. Refer to Fact Pattern 12-3. To succeed with a claim against Banquet under the Americans with Disabilities Act, Art will have to show that a.he consistently met the essential requirements of his job. b.the doors were installed as an act of intentional discrimination. c.Banquet refused to make reasonable accommodation for him. d.the individual who replaced him is unqualified for the position.

Fact Pattern 3-3 Bryn, Cornell, and Duke are general partners in Equity Lending, a consumer credit, mortgage, and investment firm. Their agreement states that it is a breach of the agreement for any partner to assign his or her interest to a creditor without the consent of the other partners. Refer to Fact Pattern 3-3. Cornell's assignment of his interest in Equity Lending to Financial Consultants Corporation results in a.nothing with respect to Cornell or Equity Lending. b.the automatic termination of Equity Lending's legal existence. c.Cornell's wrongful dissociation and liability for any damages. d.Cornell's liability for all of Equity Lending's debts.

Fact Pattern 6-1 Don is a shareholder of Energy Renew, Inc. When the directors fail to undertake an action to redress a wrong suffered by the corporation, Don files a suit on the firm's behalf. Refer to Fact Pattern 6-1. Any damages recovered by the suit will normally go to a.Energy Renew's shareholders, including Don. b.Energy Renew's shareholders, excluding Don. c.Energy Renew. d.Energy Renew's directors.

Fact Pattern 7-2 Ben, an accountant for AirLift, Inc., a ride service, learns of undisclosed company plans to distribute a new app. Ben buys 10,000 shares of AirLift stock. He reveals the company plans to Carly, who buys 5,000 shares. Carly tells Don, who tells Erwin, and each buys 1,000 shares. They know that Carly got her information from Ben. When AirLift publicly announces its new app, Ben, Carly, Don, and Erwin sell their stock for a profit. Refer to Fact Pattern 7-2. If Ben is liable under the Securities Exchange Act of 1934, it will be because the information on which he based his purchase of AirLift stock was a.not yet true. b.not material. c.not yet public. d.a forward-looking forecast.

Fact Pattern 9-1 Nadine and Orin work at Pumps & Pipes Inc. Nadine is a sales representative who works with Pumps's customers, including contractors, government agencies, farmers, and others, as well as individual consumers. Pumps closely supervises all of its sales reps, and dictates their schedules. Orin is an engineer who works in Pumps's design department. Refer to Fact Pattern 9-1. With respect to third parties, Orin is Pumps's a.employee and agent. b.independent contractor. c.employee but not agent. d.employee, agent, and independent contractor.

Fact Pattern 9-2 Faye works as an administrator and receptionist for Garage Door Store. The store withholds federal taxes from Faye's pay, and controls the methods and details of the performance of her work. Faye is not authorized to modify the prices or other terms of a sale at the store. Homer installs Garage Door products at the buyers' locations. Refer to Fact Pattern 9-2. Garage Door authorizes Homer to sell garage door upgrades and accessories at the buyers' locations at prices that Homer negotiates with those buyers. With respect to sales at those locations, Homer is a.an independent contractor. b.a principal. c.an employee and agent. d.an employee only.

Faye is interested in buying a franchise from Gas n' Snax Stores Inc. This transaction, like other franchise deals, is regulated to protect a.certain types of anticompetitive agreements. b.franchisors from dishonest prospective franchisees. c.prospective franchisees from dishonest franchisors. d.the government's power to restrict freedom of contract.

Gas, LP, is a limited partnership to which its partners have contributed capital. Gas's creditors include Piping, Inc. On Gas's dissolution, its assets will be distributed to pa a.the partners and Piping proportionately. b.the partners before Piping. c.Piping before the partners. d.neither Piping nor the partners.

Gil and Hera are employees of IT Business Solutions, Inc. Under the Equal Pay Act, IT Business Solutions can legitimately pay different wages on the basis of a.job descriptions. b.gender. c.merit. d.substantial equality of skill, effort, and responsibility.

Ginger is an employee of Haz-Mat, Inc. She refuses a transfer to a Haz-Mat department in which several employees suffered serious injuries from exposure to hazardous materials. Under the Occupational Safety and Health Act, Ginger may be a.subject to discharge. b.entitled to higher wages for working in a hazardous department. c.entitled to protection from discharge. d.reported to the Occupational Safety and Health Administration.

Global Games Corporation employs Heidi as an agent. Global Games gives Heidi an exclusive territory in which to sell its products. Global Games cannot compete with Heidi in that territory under the duty of a.reimbursement. b.compensation. c.cooperation. d.indemnification.

Harry and Ilene want to market a new line of kayaks and related gear under the brand name Journeys as a corporation—Journeys Inc. To avoid income taxes at the corporate level, they should form a.a close corporation. b.a private corporation. c.an S corporation. d.an alien corporation.

Home-Baked Bread Company hires Ike to sell the company's products in a certain area. Home-Baked Bread agrees to pay Ike a salary, plus commission, for a trial period. They also agree that Ike can sell using any methods and during any hours that seem appropriate. The key factor in whether Ike is Home-Baked Bread's employee is a.the size of Ike's sales area. b.the amount of Ike's salary. c.the control Home-Baked Bread has over the details of the work. d.the length of the trial period.

Hunter is seventeen years old. Under the Fair Labor Standards Act, Hunter cannot work a.in the agriculture industry. b.in the entertainment industry. c.in a hazardous occupation. d.for her parents.

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

Lee wants to go into the business of architectural design. Among the reasons that might convince Lee to set up his business as a sole proprietorship would be b. the ease of transferring the business to other family members. c. its greater organizational flexibility.

Lightning Corporation and Mind, Inc., two game creators, wish to combine their capabilities to make and market Nano, a special limited-edition game. The appropriate legal entity for this project is most likely a.a joint stock company .b.a business trust. c.a joint venture. d.a syndicate.

Mai-Lin's Martial Arts, Inc., grants a franchise to Naomi to operate a Mai-Lin's school. Mai-Lin's may require Naomi to pay the franchisor a percentage of her a.income from unrelated business activities. b.weekly payroll expense. c.annual sales or volume of business. d.monthly overhead savings.

Mechanical Engineering, Inc., may be liable for the sexual harassment of an employee if it knew or should have known about the harassment, failed to take immediate action, and the harassment was committed by a.any of the choices. b.the employee's previous employer. c.a company supervisor. d.a competitor.

Medical Supply Company and Health Care, Inc., enter into a contract for a sale of medical equipment and supplies. Under either a shipment contract or a destination contract, the seller must a.place the goods into the hands of a carrier. b.deliver the goods to a particular destination. c.give the buyer any necessary documents of title. d.allow the buyer to reject the goods for any reason.

Metalworkers Union represents the workers of National Fabrication Corporation. The employer refuses to bargain with the union over workplace safety. This most likely violates a.state right-to-work laws. b.federal wage-and-hour laws. c.federal labor law. d.no federal or state law.

Michel is a citizen of France. With respect to a limited liability company in the United States, Michel can a.not become a member or otherwise participate in its operations. b.not become a member, but can participate in its operations. c.become a member. d.act as a creditor, but cannot otherwise invest or participate.

Personnel Company draws a check payable to Felix. Felix indorses the back and negotiates the check to Guaranty Bank. Primarily liable on the check is a. Felix.Correct c. none of the choices.

Precise Parts, Inc., and Quality Auto stores enter into a contract for a sale of auto parts that meet certain specifications. Precise Parts ships goods that do not comply. Quality Auto a.cannot reject the entire shipment. b.must reject the entire shipment. c.can reject the entire shipment. d.must accept the entire shipment.

Pro Audio, Inc., would like to change its corporate status to that of an S corporation. To qualify, Pro Audio must a.have more than one hundred shareholders. b.all of the choices. c.be a domestic corporation. d.be a benefit corporation.

Rachel is an agent for Sports Logo Merchandise, Inc. Rachel makes an innocent misrepresentation when entering into a contract on behalf of Sports Logo with Team Marketing & Sales Corporation. Sports Logo a.may rescind the contract. b.is estopped from performing the contract. c.is directly responsible for Rachel's misrepresentation. d.must ratify the contract.

Reliable Insurance Company employs Stuart as an agent. To terminate Stuart's authority, Reliable Insurance must notify a.only third parties who are aware of the agency relationship. b.the public generally. c.Stuart and any third parties who are aware of the agency relationship. d.Stuart only.

Rico does not work for Street Bikes Company, but wrongfully obtains inside information concerning the firm. Based on the information, Rico buys and sells Street Bikes stock for personal gain. The Securities and Exchange Commission prosecutes Rico, arguing that he is liable because he stole information rightfully belonging to another. This argument is a.the blue-sky theory. b.the free-writing prospectus theory. c.the misappropriation theory. d.the tipper/tippee theory.

Rita and Salvatore do business as Tech Fixers, a partnership. In most states, for the purposes of collecting judgments and having accounting performed, this firm would be treated as a.a person. b.a non-entity. c.an entity. d.an aggregate of individuals.

Robyn owns one share of stock in SportBoards Corporation, as evidenced by a stock certificate. She loses the certificate. Her ownership of the stock is a.forfeited within thirty days if she cannot find the certificate. b.forfeited immediately. c.not affected. d.forfeited within ten days of a third party's claim to ownership.

Rosa is a partner in Silver Dragon, a partnership consisting of the owners of a restaurant. Silver Dragon incurs debt for new dining tables and chairs. With respect to this debt, Rosa is :b. only liable to the amount of her capital contribution. :c. personally liable to the full extent.

Service Employees International Union represents the employees of Therapy Rehabilitation Corporation. Potential subjects of collective bargaining between the union and the corporation do not include a.employee wages. b.employment benefits. c.hiring more workers than necessary to do a certain project. d.working conditions.

Tech Talent, Inc., is a corporation. Techno Talent's implied powers enable it to a.none of the choices. b.depart significantly from traditional corporate formalities. c.borrow funds and lend funds. d.bind the corporation to an action that will greatly affect its purpose.

Theo signs a check payable to the order of Urban Bank, filling in the blanks for the amount with the figures "$100" and "One thousand and 00/100 dollars." This check is payable in the amount of a.$1,100. b.$0. c.$1,000. d.$100.

To borrow the money to buy a car, Megan signs a note "payable to the order of Purchase Financing." Olaf cosigns the note to guarantee the repayment of the loan. Olaf's liability on this note is a.secondary. b.contractual. c.primary. d.qualified.

To finance the purchase of a house from Sander, Tobias signs an instrument promising to pay to "Uno Mortgage Company" $200,000 with interest in installments with the final payment due July 10, 2047. To be negotiable, this instrument must include the signature of a.a non-party witness. b.Sander or Sander's realtor. c.Tobias. d.Uno's chief financial officer.

Valu Food Markets is an incorporated cooperative. Like other incorporated cooperatives, Valu Food distributes profits to its owners on the basis of a.the degree to which they participate in management. b.the amount of capital they contribute. c.their transactions with the cooperative. d.the requirements of the state in which it was incorporated.

Banquets & Parties (B&P) contracts to buy 1,000 uninflated balloons from Gas Bags, Inc., for $1 per item. When the market price decreases to 50 cents per balloon, B&P refuses to go through with the deal. Gas Bags can recover a.$1,500. b.$0. c.$1,000. d.$500.

Berry Fields, Inc., employs hundreds of seasonal and permanent workers, both skilled and unskilled, in three states. Under federal immigration law, Berry Fields can hire illegal immigrants a.only if the employer files a special form. b.if either the employer or the immigrants file special forms. c.only if the immigrants file special forms. d.under no circumstances.

Business Rental Corporation (BRC) and Cartage Trucking Company enter into a contract for a lease of ten hydraulic lifts. Under the perfect tender rule, BRC must ship or tender goods to the lessee that b. substantially conform to the contract description in most details. d. conform to the contract description in every way.

Chemical Refining Corporation hires Disposal & Recovery Company to work as an independent contractor. Whether Chemical Refining will be liable for torts committed at the site by Disposal & Recovery depends on a.which party obtained insurance to cover tort liability. b.what Disposal & Recovery bid for the job. c.who is paying Disposal & Recovery. d.whether unusually hazardous activities are involved.

Cici signs a check "pay to the order of Doug" drawn on Cici's account in East Bank. Cici shows the check to Frieda, who agrees that the signature is Cici's and that Doug is owed the amount the check represents. Doug signs the back of the check. Liability on this check extends to a.Cici, Doug, and East Bank. b.Frieda only. c.Cici and Frieda only. d.Cici and Doug only.

Clark hires Dion to act as his agent to purchase Expo Sports Arena, Inc. Clark tells Dion to reveal that he is buying the firm and its assets on behalf of a third party and to tell the seller who that third party is. Clark is a.an undisclosed principal. b.not a principal. c.a partially disclosed principal. d.a disclosed principal.

Duke signs a note "payable to the order of Equity Bank." Unless Duke has a valid defense against payment, his liability on this note is a.impaired. b.qualified. c.secondary. d.primary.

Ellen and Fred work on the loading dock for Grange Storage. Ellen, who has a disability, requests a transfer, which would represent an accommodation for her disability. But when an opening occurs, Grange transfers Fred on the basis of seniority. In Ellen's suit against Grange for discrimination, most likely a.Grange's action was a reasonable accommodation. b.Grange's action was a business necessity. c.Ellen's disability is a sufficient basis for relief. d.Fred's seniority is a good defense.

Fact Pattern 15-3 To borrow the funds to pay tuition at Alpha College, Bea signs an instrument unconditionally promising to pay to "Country Loan Corporation" $7,500 with interest in installments with the final payment due June 1, 2030. Refer to Fact Pattern 15-3. With respect to this instrument, Bea is a.the indorser. b.the drawee. c.the payee. d.the maker.

Fact Pattern 16-1 Nina obtains a check payable to her order from Oran. Nina signs the back and gives the check to Patricia. Patricia writes "Pay to Patricia" above Nina's signature. Refer to Fact Pattern 16-1. When Patricia writes "Pay to Patricia" above Nina's signature, Nina's signature becomes a.a blank indorsement. b.a forgery. c.a qualified indorsement. d.a special indorsement.

Fact Pattern 2-1 Jumbo Juice Inc. offers entrepreneurs the opportunity to operate a franchise under the Jumbo Juice trade name as a member of a select group of dealers that engage in retail juice sales. Refer to Fact Pattern 2-1. Before a franchise contract is signed, Jumbo Juice must explain c. all of the choices. d. the contract's termination provisions.

Fact Pattern 3-3 Bryn, Cornell, and Duke are general partners in Equity Lending, a consumer credit, mortgage, and investment firm. Their agreement states that it is a breach of the agreement for any partner to assign his or her interest to a creditor without the consent of the other partners. Refer to Fact Pattern 3-3. Cornell's assignment of his interest in Equity Lending to Financial Consultants Corporation results in a.Cornell's liability for all of Equity Lending's debts. b.nothing with respect to Cornell or Equity Lending. c.the automatic termination of Equity Lending's legal existence. d.Cornell's wrongful dissociation and liability for any damages.

Fact Pattern 7-2 Ben, an accountant for AirLift, Inc., a ride service, learns of undisclosed company plans to distribute a new app. Ben buys 10,000 shares of AirLift stock. He reveals the company plans to Carly, who buys 5,000 shares. Carly tells Don, who tells Erwin, and each buys 1,000 shares. They know that Carly got her information from Ben. When AirLift publicly announces its new app, Ben, Carly, Don, and Erwin sell their stock for a profit. Refer to Fact Pattern 7-2. Under the Securities Exchange Act of 1934, Carly is most likely a.not liable because Carly did not solicit information from Ben. b.not liable because Carly does not work for AirLift. c.not liable because Carly did not prevent others from profiting. d.liable for insider trading.

Flo, an agent for Grover, enters into a contract on Grover's behalf with Hong that must be in writing to be enforceable under the Statute of Frauds . Failure to comply with the equal dignity rule, with respect to this contract, can make the contract voidable at the option of a.Hong. b.Grover. c.none of the choices. d.Flo.

Fong contracts to buy a franchise from Genuine Asian Sushi House Company. In this contract, as in most franchise contracts, the determination of the territory to be served is made by a.other Genuine Asian franchisees within the same state. b.the Federal Trade Commission. c.Fong. d.Genuine Asian Sushi House.

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

Gwen and Hugo do business as Gwen & Hugo Civil Engineers, a partnership. This firm is governed by the Uniform Partnership Act a.under all circumstances. b.in the absence of an implied agreement. c.only under an express agreement. d.in the absence of an express agreement.

Idina wants to buy a promissory note from Jo. The note is due on April 1. To become an HDC, Idina must buy the note a.before noon on April 1. b.within thirty days of April 1. c.before 8:00 a.m. on April 1 d.before midnight on April 1.

Jacob signs a promissory note payable to Kent "with interest" on which he conspicuously notes that it is "nonnegotiable." This instrument is a.negotiable. b.nonnegotiable, because it does not specify a rate of interest. c.nonnegotiable, because the exact amount payable cannot be determined from the face of the instrument. d.nonnegotiable, because it includes the notation "nonnegotiable."

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

Kim and Lyle are partners in K&L Sales, which exports technical equipment. If Congress declares that the equipment can no longer be exported, K&L a.can continue its business for one twelve-month period. b.is immediately subject to criminal prosecution and penalties. c.can continue its business indefinitely. d.dissolves immediately unless the partners change its business.

Lenny works for Mechanical Engineers, P.A. While working on a Mechanical Engineers project, Lenny is injured. Under state workers' compensation laws, Lenny will be compensated only if his injury was a.material. b.incidental. c.intentional. d.accidental.

Leon, Michael, Nolan, and O'Neill join together to buy a professional basketball franchise. Their selected form of business organization is an investment group, which is also known as a.a joint venture. b.a business trust. c.a joint stock company. d.a syndicate.

Lisa brings a successful suit against her employer Metal Mold Corporation for employment discrimination. Lisa may be awarded a.damages, but not back pay. b.back pay, but not retroactive promotions. c.retroactive promotions, but not back pay. d.back pay, retroactive promotions, and damages.

Nan, an accountant for Outdoor Outfitters, Inc., issues company checks payable to nonexistent persons drawn on Outdoor's account at Peerless Bank. Nan indorses the checks and deposits them in her account. Outdoor discovers the theft and demands that Peerless recredit its account. Peerless's best defense is that b. Peerless did not know that the checks were not to be paid. d. Outdoor was in a better position than Peerless to prevent the theft.

Owen and Pablo enter into a contract for a sale of irrigation equipment. Pablo pays, but Owen does not deliver. Pablo can normally recover as damages the difference between a.any loss avoided and any profit gained. b.the actual price and the hoped-for price. c.the current prices in the parties' locations. d.the contract price and the market price.

Power Products Corporation permits its directors to be elected by cumulative voting. This a.insures against persons who may "cloud" the corporate direction. b.guarantees Thor's executive officers of the final choice. c.assures directors that they will be selected by their peers. d.allows minority shareholders to be represented on the board.

Roberta introduces Steve to her friends as "my associate." Steve purports to act as Roberta's agent in several business transactions with those friends. If Roberta is liable for Steve's actions, it will be because their relationship is a.not an agency relationship. b.an agency by operation of law. c.an agency by agreement. d.an agency by estoppel.

Rod negotiates a bearer instrument to Shauna by c. presenting it in response to a demand by Shauna. d. delivery alone.

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

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

Soup Factory, Inc., uses a Web site to provide downloadable information to prospective franchisees. This electronic information is the equivalent of an offer that must comply with a.no law. b.federal antitrust laws. c.the Petroleum Marketing Practices Act. d.the Federal Trade Commission's Franchise Rule.

Swift Trucking, Inc., and Trailer Rents Corporation are parties to an oral agreement for a one-year lease of six doublewides with payments totaling more than $40,000. They may satisfy the Statute of Frauds by a.shaking hands on the deal. b.mutually agreeing not to commit fraud. c.repeating the terms in a phone call. d.setting out the terms in a memo.

T/F: A check is a time instrument because it is payable in due time.

T/F: A corporate director "owns" the corporation.

T/F: A corporation is not liable for the misconduct of its agents, officers, or employees.

T/F: A de jure corporation is one that is formed for a single purpose.

T/F: A franchisee is generally economically independent of the franchisor's integrated business system.

T/F: A franchisee is not generally legally independent of the franchisor.

T/F: A franchisor can mandate retail prices for the goods that a franchisee sells.

T/F: A franchisor's decision to terminate a franchise is always considered wrongful.

T/F: A holder takes an instrument for value by promising to perform in the future.

T/F: A holder takes an instrument for value if he or she inherits an instrument.

T/F: A n agency relationship cannot be created by an oral agreement.

T/F: A partially disclosed principal is only partially liable to a third party for a contract made by an agent.

T/F: A partnership is a pass-through entity and a taxpaying entity.

T/F: A partnership is forced to terminate every time a partner dissociates from the firm.

T/F: A principal's ratification of an agent's unauthorized act must be express.

T/F: A promissory note must name a specific payee to be negotiable.

T/F: A purchaser can become an HDC of an instrument even if it is so incomplete that an element of negotiability is lacking.

T/F: A special indorsement does not specify a particular indorsee.

T/F: A transfer by assignment can make it possible for a transferee to receive more rights in the instrument than the prior possessor had.

T/F: An agency relationship created for an illegal purpose is enforceable.

T/F: An agency relationship is enforceable even if it is created for a purpose that is contrary to public policy.

T/F: An agent can represent two principals in the same transaction as long as neither of them knows about it.

T/F: An agent is not authorized to act instead of a principal in doing business with third parties.

T/F: An agent's implied authority cannot be implied by custom.

T/F: An employer has every right to retaliate against an employee who opposes a practice prohibited by Title VII of the Civil Rights Act.

T/F: An insider must actually use inside information in connection with the purchase and sale of securities to violate Section 16(b) of the Securities Exchange Act of 1934.

T/F: An unauthorized signature binds the person whose name is signed.

T/F: An undated instrument cannot be negotiable.

T/F: Any business—except a sole proprietorship—must comply with business registration and licensing requirements.

T/F: Any employee who works more than six hours per day must be paid overtime.

T/F: Anything that an agent obtains by virtue of the agency relationship is his or hers to keep.

T/F: As a general rule, shareholders are responsible for the daily management of a corporation.

T/F: Children aged fourteen and fifteen are allowed to work in hazardous occupations.

T/F: Corporate directors and officers are insurers of business success.

T/F: Directors must engage in self-dealing.

T/F: Employers can require employees to participate in such religious activity as weekly prayer meetings.

T/F: Employers can require or cause employees, but not job applicants, to take lie-detector tests.

T/F: Employment laws apply to the employer-independent contractor relationship.

T/F: For an instrument to be negotiable, the word "negotiable" must appear on it.

T/F: Generally, under employment-at-will doctrine, an employer may fire an employee even if doing so would violate a federal or state statute.

T/F: I n a limited partnership, every partner has full responsibility for the partnership and for all its debts.

T/F: If either the goods or their tender fails to conform to the contract in any respect, the buyer or lessee must reject all of the goods.

T/F: Implied authority is authority declared in clear, direct, definite terms.

T/F: In a general partnership, the senior partner manages the partnership.

T/F: In most states, a limited liability company can have only a limited number of members.

T/F: Joint venturers do not have the authority as agents to enter into contracts for the business that will bind the joint venture.

T/F: Most states treat a partnership as an aggregate for most purposes.

T/F: Once a plaintiff succeeds in proving discrimination, the burden shifts to the employer to justify the discriminatory practice.

T/F: Tender of delivery requires that the seller or lessor hold the goods at the buyer's or lessee's disposal, but not that the goods be conforming.

T/F: The Securities Exchange Act of 1934 applies to all cases involving the trading of securities, except in private transactions.

T/F: The Securities and Exchange Commission does not regulate the content of proxy statements.

T/F: The UCC requires that the mirror image rule be followed for all acceptances.

T/F: The dishonor of an instrument relieves secondary parties of liability.

T/F: The general law of agency does not apply to negotiable instruments.

T/F: The laws governing franchising are primarily designed to protect franchisors from dishonest franchisees.

T/F: The most common exception to the employment-at-will doctrine is made on the basis that a worker was fired for reasons that violate fundamental common sense.

T/F: The right of employees to bring claims against their employer under Title VII of the Civil Rights Act as a group or class is unlimited.

T/F: The seller's right to cure does not affect the right of the buyer or lessee to reject goods.

T/F: Typically, the franchisee determines the territory to be served by the franchise.

T/F: Under Title VII of the Civil Rights Act, most private firms are required to adopt affirmative action policies.

T/F: Under most limited liability company statutes, if the members do not specify how profits will be split, they are divided in proportion to the members' capital investment.

T/F: Under the UCC, a seller's tender of goods that do not conform in every way to a contract is still a valid tender.

T/F: Under the UCC, if a contract does not designate the place of delivery for the goods, the place of delivery is a location halfway between the seller's place of business and the buyer's place of business.

T/F: Under the perfect tender rule, if tender is not perfect, the seller is obligated to try again.

T/F: When no delivery terms are specified in a contract for a sale of goods, there is no basis for determining a remedy.

T/F: With preemptive rights, shareholders can preempt the decisions of directors and officers with respect to corporate policy.

T/F: A business that holds itself out as being a corporation may not be able to deny corporate status, even if it makes no attempt to incorporate.

T/F: A court will pierce the corporate veil of a corporation when the corporate privilege is abused for personal benefit.

T/F: A demand instrument is payable immediately after it is issued.

T/F: A disclosed principal is liable to a third party for a contract made by the agent acting within the scope of his or her authority.

T/F: A gency relationships normally are consensual.

T/F: A lessor is a party who transfers the right to the possession and use of goods under a lease.

T/F: A limited liability company is a citizen of every state of which its members are citizens.

T/F: A majority of the states treat a partnership as an entity for most purposes.

T/F: A partner may pursue his or her own interests without automatically violating the partner's fiduciary duties to the partnership and the other partners.

T/F: A person is not liable on an instrument unless he or she has signed it personally or through an authorized representative.

T/F: A person who transfers an instrument for consideration makes transfer warranties to all subsequent transferees who take the instrument in good faith.

T/F: A promissory note can be a negotiable instrument.

T/F: A syndicate may be organized as a corporation or a partnership, or in some situations as no recognizable form of business organization.

T/F: A vacancy on the board of directors can be filled by the board itself.

T/F: Acceptance of goods precludes the buyer or lessee from exercising the right of rejection.

T/F: An authorized agent binds a principal on an instrument if the agent clearly names the principal in the signature.

T/F: An employee who discloses information relating to fraud perpetrated by his or her employer against the government is protected from retaliatory discharge under federal and state statutes.

T/F: An instrument is defective if it has been previously dishonored.

T/F: An ordinary holder can recover nothing on an instrument that has been materially altered.

T/F: Any copyrighted work created by an employee within the scope of his or her employment at the request of the employer is a "work for hire."

T/F: Any irregularity on the face of an instrument that calls into question its validity will bar HDC status.

T/F: Directors are expected to conduct a reasonable investigation of a situation before making a decision.

T/F: Each director present at a board meeting has one vote.

T/F: Employees can voluntarily pay overtime wages to otherwise ineligible employees .

T/F: Express powers of a corporation can be found in state corporation statutes.

T/F: Failure to comply with the equal dignity rule can make a contract voidable at the option of the principal.

T/F: Failure to present an instrument on time is improper presentment.

T/F: For a union election to be held, at least 30 percent of the workers to be represented must support a union or an election on unionization.

T/F: For an instrument to be negotiable, it must be in writing.

T/F: Forward-looking forecasts that turn out to be wrong can be protected against liability for securities fraud if they include "meaningful cautionary statements."

T/F: If goods identified to a contract are destroyed through no fault of either party, both parties are excused from performance.

T/F: If, before the time for performance, a buyer communicates an intent not to perform, the seller can consider the buyer in breach and pursue a remedy.

T/F: In a limited partnership, a general partner's dissociation from the firm normally will lead to dissolution unless all partners agree to continue the business.

T/F: In a typical strike, an employer has a right to hire replacement workers to substitute for striking workers.

T/F: Limited legal liability generally is necessary for small businesses that wish to raise outside capital.

T/F: Limits on a partner's authority normally are effective only with respect to third parties who are notified of the limitation.

T/F: Members of a limited liability company can stipulate in their operating agreement how voting rights will be apportioned.

T/F: Most private, midsize-business, noninvestment company offers of securities are exempt from the registration requirements.

T/F: Negotiating order instruments requires indorsement.

T/F: Normally, employees who deal with third parties are deemed to be agents.

T/F: On a cashier's check, the bank is the drawer.

T/F: Only unconditional promises or orders can be negotiable.

T/F: Shareholders must approve fundamental changes affecting a corporation.

T/F: Some courts have held that an implied employment contract exists between the employer and the employee.

T/F: Some states have passed laws prohibiting the withdrawal of limited partners from a limited partnership.

T/F: State securities laws apply mainly to intrastate transactions.

T/F: The Age Discrimination in Employment Act prohibits mandatory retirement for nonmanagerial workers.

T/F: The Occupational Safety and Health Act imposes on employers a general duty to keep the workplace safe.

T/F: The U.S. Postal Service is a public corporation.

T/F: The UCC imposes some different rules on merchants.

T/F: The articles of incorporation serve as a primary source of authority for a corporation's business operations.

T/F: The term fiduciary is at the heart of agency law.

T/F: Title VII of the Civil Rights Act applies to employers with fifteen or more employees.

T/F: To avoid the risk of loss from theft, a holder may convert a blank indorsement to a special indorsement.

T/F: To protect franchisees against arbitrary or bad faith termination, a state law may require certain procedures be followed in terminating a franchise.

T/F: Under the Sarbanes-Oxley Act of 2002, all members of a publicly traded corporation's audit committee must be outside directors.

T/F: Under the UCC, an offeror must be notified within a reasonable time that the offeree has accepted.

T/F: Under the fictitious payee rule, an innocent holder can hold the maker or drawer liable on the instrument.

T/F: Unless an agent does not act in exchange for payment, the principal must pay the agreed-on value for the agent's services.

T/F: Until the time for performance under a contract expires, the seller has a right to cure.

T/F: Visible evidence that a signature on a check was forged will disqualify a purchaser from HDC status.

T/F: W hen an instrument has a forged indorsement, the loss usually falls on the first party to take the instrument.

T/F: When the corporation is harmed by the actions of a third party, the directors can bring a lawsuit in the name of the corporation against that party.

T/F: When there is a breach of an underlying contract for which an instrument was issued, the drawer of a check can order his or her bank to stop payment.

T/F: Whenever a work-related injury or disease occurs, employers must make reports directly to the Occupational Safety and Health Administration.

T/F: While the Securities and Exchange Commission reviews a registration statement for completeness, the securities can be offered for sale but not sold.

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