law unit 3
Jo owns a condominium that she leases to Kia. Jo gives her daughter Liu $450 on her sixteenth birthday. Jo sells her car to her neighbor Maia for $1,500. Article 2 of the UCC covers
b. the sale to Maia.
T/F: Any breach of contract effectively excuses both parties from performing.
False
Eugene, an accountant, convinces his client Faye to enter into a contract to invest her savings in Gather, a non-existent social media site. There is clear and convincing evidence that Faye did not act out of her free will. This is
b. undue influence.
Rivers and Harbors Appropriations Act
Considered a forerunner of today's modern environmental laws, it prohibited the construction of any bridge, dam, dike or causeway over or in navigable waterways of the U.S. without Congressional approval.
T/F: Only contracts that have been fully executed can be rescinded by agreement.
False
T/F: Regulation Z was issued by the Federal Reserve Board of Governors to implement the disclosure requirements of the Truth-in-Lending Act.
True
T/F: The Federal Food, Drug, and Cosmetic Act protects consumers against contaminated and misbranded food and drugs.
True
T/F: The contracts entered into by a minor are voidable at the option of that minor.
True
T/F: If a party is already bound by contract to perform a certain duty, that duty can serve as consideration for a second contract.
False
T/F: On a contract—"F.O.B. New York"—for a sale of almonds by a broker in California, the risk of loss passes to the buyer when conforming goods are placed in the possession of the carrier.
False
T/F: Only a mistake of value or quality makes a contract voidable.
False
T/F: The Clayton Act of 1914 was the first piece of legislation that broadly prohibited anticompetitive agreements and unilateral conduct that monopolize or attempt to monopolize relevant markets.
False
T/F: The Sherman Antitrust Act which prescribes the rule of free competition among those engaged in commerce also established the Federal Trade Commission and outlaws unfair methods of competition and unfair acts or practices that affect commerce.
False
T/F: Those who knowingly violate the Clean Air Act may be subject to civil penalties but not criminal penalties
False
Telemarketing Sales Rule (TSR)
Requires telemarketers to make specific disclosures of material information; prohibits misrepresentations; sets limits on the times telemarketers may call consumers; prohibits calls to a consumer who has asked not to be called again; and sets payment restrictions for the sale of certain goods and services.
Telephone Consumer Protection Act
Restricts telephone solicitations (i.e., telemarketing) and the use of automated telephone equipment; also limits the use of automatic dialing systems, artificial or prerecorded voice messages, SMS text messages, and fax machines.
Clayton Antitrust Act
Seeks to prevent anticompetitive practices in their incipiency; specified particular prohibited conduct, the three-level enforcement scheme, the exemptions, and the remedial measures.
Oil Pollution Act
Streamlined and strengthened the EPA's ability to prevent and respond to certain catastrophes.
Federal Water Polution Control Act
The first major U.S. law to address water pollution.
T/F: Acceptance is timely if it is effective before the offer is terminated.
True
T/F: Generally, if an acceptance to a sales contract between merchants includes terms additional to those in the offer, the terms automatically become part of the deal.
True
T/F: Identification is the express designation of the goods provided for in a contract, and the parties to the deal can agree in their contract when this will take place.
True
T/F: If a court determines that a contract involving both goods and services is primarily a goods contract, any dispute over the deal will be decided under the UCC.
True
T/F: If a person buys cattle at a livestock auction, unless the parties agree otherwise, title will pass to the buyer when the cattle are physically delivered.
True
T/F: When a contract mistakenly specifies a crane instead of a forklift, a court could reform the contract to reflect the parties' original intent as to the equipment.
True
Toxic Substances Control Act
Regulates chemicals and chemical compounds that are known to be toxic, such as asbestos and polychlorinated biphenyls (PCB's).
Food Safety Modernization Act
Regulates the way foods are grown, harvested and processed; also provides authority to directly recall any food products that it suspects are tainted, rather than relying on the producers to recall items.
Food Safety Modernization Act (FSMA)
Regulates the way foods are grown, harvested and processed; also provides authority to directly recall any food products that it suspects are tainted, rather than relying on the producers to recall items.
Federal Insecticide, Fungicide, and Rodenticide Act
Requires anyone planning to use chemicals first determine their effect on human health and environment.
Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA)
Requires anyone planning to use chemicals first determine their effect on human health and environment.
Energy Policy and Conservation Act
Requires automakers to attach to every new car an information label that includes the Environmental Protection Agency's fuel economy estimate for the vehicle.
Nutrition Labeling and Education Act
Requires nutrition labeling of most foods regulated; requires that all nutrient content claims (i.e., 'high fiber', 'low fat', etc.) and health claims be consistent with regulations.
Fair Packaging and Labeling Act
Requires products identify certain details about the product.
Truth-in-Lending Act (TILA)
Requires sellers and lenders to disclose credit terms or loan terms so that individuals can shop around for the best financing arrangements.
FTC Mail or Telephone Order Merchandise Rule
Requires sellers who solicit buyers to order merchandise through the mail, via the Internet, or by phone to have a reasonable basis to expect that the sellers can ship within the advertised time frame, or, if no time frame is specified, within 30 days
T/F: Contracts entered into by mentally incompetent persons are not valid under any circumstances.
False
T/F: A novation requires the contracting parties to make restitution of whatever they received under the contract.
True
Affordable Care Act
Among other things, lifted restrictions on preventative services and preexisting conditions, and imposed cost controls with regard to prescription drugs and health insurance.
Small Business Liability Relief and Brownfields Revitalization Act
Allows developers who comply with state voluntary clean-up programs to avoid federal liability for the properties that they decontaminate and develop.
Consumer Product Safety Act
Created a commission with broad regulatory authority over the safety of consumer products; also provides authority to pursue recalls and to ban products under certain circumstances.
Clean Air Act
Designed to control air pollution; one of the most influential and comprehensive modern environmental laws.
Comprehensive Environmental Response, Compensation, and Liability Act
Designed to ensure the clean-up of hazardous waste sites and to assign liability for the costs of the cleanup.
National Environmental Policy Act
Generally limits environmental harm from federal government activities.
Affordable Care Act (ACA)
Imposed regulations for caloric content of restaurant foods; also expanded health care coverage for children and seniors.
Equal Credit Opportunity Act (ECOA)
Makes it unlawful for any creditor to discriminate against any applicant, with respect to any aspect of a credit transaction, on the basis of certain protected classes.
Sherman Antitrust Act
Prescribes the rule of free competition among those engaged in commerce; broadly prohibits 1) anticompetitive agreements and 2) unilateral conduct that monopolizes or attempts to monopolize the relevant market.
Lanham Act
Prohibits a number of activities, including trademark infringement, trademark dilution, and false advertising.
Telemarketing and Consumer Fraud and Abuse Act
Requires solicitors to identify themselves and not misrepresent facts.
Telemarketing Sales Rule
Requires telemarketers to make specific disclosures of material information; prohibits misrepresentations; sets limits on the times telemarketers may call consumers; prohibits calls to a consumer who has asked not to be called again; and sets payment restrictions for the sale of certain goods and services.
T/F: The Sherman Antitrust Act of 1890 prescribes the rule of free competition among those engaged in commerce. The Federal Trade Act of 1914 established the Federal Trade Commission and outlaws unfair methods of competition and unfair acts or practices that affect commerce.
True (response feedback)
T/F: The Sherman Act of 1890 broadly prohibits 1) anticompetitive agreements and 2) unilateral conduct that monopolizes or attempts to monopolize the relevant market. The Clayton Act of 1914 is a part of U.S. antitrust law with the goal of adding further substance to the U.S. antitrust law regime and seeks to prevent anticompetitive practices in their incipiency.
True- response feedback
Food Court Inc. leases space to Gourmet Café. Gourmet abandons the premises when the amount of the rent due on the lease is $5,000. Food finds a new tenant, Hasty Bowls, which agrees to pay $3,500 for the space over the remainder of Gourmet's term. Food's measure of damages is
a. $1,500, plus any additional expenses to find the new tenant.
Seacoast Transport Company pays Trucks & Trailers Inc. a stated price for the use of seven tractor-trailer rigs for a year. Under the UCC, this is
a. a lease.
The main goals of the Clean Water Act include
a. all of the choices.
Len contracts to work for Media Corporation during May for $4,500. On April 30, Media cancels the contract. Len declines a similar job with New Ads Inc., which would have paid $3,500. Len files a suit against Media. As compensatory damages, Len can recover
b. $1,000.
Analytics LLC processes misinterpreted data furnished by Botch Services to propose a marketing plan for Clientele Inc. Analytics and Clientele are both ignorant of the mistaken data. Their contract can be rescinded on the basis of
b. a bilateral mistake.
Hearth & Home Furniture store advertises bedroom suites at a "Special Low Price of $599." When Ilene tries to buy one of the suites, Jill, the salesperson, tells her that they are all sold and no more are obtainable. Jill adds that Hearth & Home has other bedroom suites available for as low as $2,599. This is
b. bait-and-switch advertising.
Marketing Solutions Inc. promises to employ Niki as a software engineer. In reliance on the promise, Niki quits her job with Online Ad Agency, but Marketing Solutions does not hire her. Most likely, Marketing Solutions is
b. liable to Niki under the doctrine of promissory estoppel.
To drive its competitors out of a certain geographic segment of its market, Drones Inc. sets the prices of its products below cost for the buyers in that area. This is
b. price discrimination.
Macy offers to sell his fitness watch for $50 to Nona. Nona promises to pay Macy the price. Later, they exchange the watch for the funds. A contract was created when
c. Nona promised to pay for the watch.
Mining Corporation purchases the business assets of Open Pit Inc., including its equipment and supplies, for an agreed-to price, payable in installments. Under the UCC, this transaction is
c. a sale.
Outdoor Outfitters Store contracts to buy fifty tents from Pitched Camp, Inc. Unless the contract states otherwise, this document is assumed to be
c. a shipment contract.
Coffee Beans Inc. offers to buy Brewing Company's roasting services for a certain price. Brewing responds that the price is too low and thereby rejects the offer. The offer is
c. terminated.
Lu's application to Metro Bank for a credit card is denied. Lu can obtain information on his credit history in a credit agency's files under
c. the Fair Credit Reporting Act.
Renew Inc. contracts to resurface the pools at Swim Park by June 1. Renew knows that if performance is not timely, Swim Park will have to delay its seasonal opening. Renew finishes the job June 15. In a suit for breach, Swim Park can recover
c. the loss of profit from the delayed opening.
Ewa is induced by her guardian Filo to sign a contract to invest funds in Gold Inc. through Filo's investment firm. Unknown to Ewa, Filo realizes a commission from the investment. Most likely, Ewa can rescind the contract on the basis of
c. undue influence.
Components Inc., a maker of vehicle parts, refuses to sell to DIY Repair Inc., a national vehicle service firm. The maker convinces Engine Parts Company, a competitor, to do the same. This is
d. a group boycott.
Red offers to pay Sari to deliver certain documents within thirty minutes. Sari can accept the offer only by completing the task within the deadline. If she does, Red and Sari will have
d. a unilateral contract.
Dig Inc. is the major wholesale distributor of heavy equipment in six states. Dig's closest competitor is Excavator Company. The two firms agree that Dig will operate in four of the states and Excavator in the other two. This is
b. a market division.
Embers Corporation orders twelve fire extinguishers from Firefighting Inc., which delivers the equipment. This is most likely
b. a sale of goods.
Rene contracts with Scot to pay him $5,000 for repairs to Rene's lake cabin. After Scot performs, Rene tells him that she cannot pay him in full immediately. They sign an agreement in which Rene promises to pay $2,500 now instead of $5,000 later. This is
b. an accord and satisfaction.
Maeve posts her motorcycle for sale on an online auction site. This is
b. an invitation to negotiate, not an offer.
The state of Nevada enacts a usury statute. With respect to different types of transactions, including ordinary loans, the purpose of the statute is to
b. set a maximum rate of interest.
Megan contracts to sell Nonny her horse for $4,000. This contract will be fully discharged when Megan and Nonny
c. exchange the horse for the money.
Shep offers to make digital copies of Reliable Company's business conference videotapes, CDs, DVDs, and other media for $500. Under the mailbox rule, Reliable's acceptance by e-mail will be considered effective when
c. sent.
Cosmétique Inc. makes and sells cosmetics and related products. By selling its goods at prices substantially below the normal cost of production, the firm hopes to drive its competitors from the market. This is
d. predatory pricing.
Cass agrees to sell her Daily Donut shop to Ernie. In the agreement, there is a covenant not to compete that prohibits Cass from operating a donut shop within a certain distance. If the restriction is unreasonable, a court will most likely
d. reform the covenant.
Resource Conservation and Recovery Act
Authorizes regulations for monitoring, transporting, storage, treatment, and disposal of hazardous substances.
Postal Reorganization Act
Certain types of unsolicited merchandise may be retained, used, discarded, or disposed of in any manner.
Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)
Designed to ensure the clean-up of hazardous waste sites and to assign liability for the costs of the cleanup.
Interstate Commerce Act
Designed to regulate the railroad industry, particularly its monopolistic practices.
Federal Trade Commission Act
Established the Federal Trade Commission; outlaws unfair methods of competition and unfair acts or practices that affect commerce.
Federal Food, Drug and Cosmetic Act
Establishes food standards, specifies safe levels of potentially hazardous food additives, and provides classifications of foods and food advertising.
Federal Food, Drug and Cosmetic Act (FDCA)
Establishes food standards, specifies safe levels of potentially hazardous food additives, and provides classifications of foods and food advertising.
T/F: A covenant not to compete that is imposed as part of a sale of an ongoing business will be enforced even if the restraints are unreasonable.
False
Fair Debt Collection Practices Act (FDCPA)
Prohibits debt collectors from using abusive, unfair, or deceptive practices to collect from you.
Fair Credit Reporting Acts (FCRA)
Promotes the accuracy, fairness, and privacy of consumer information contained in the files of consumer reporting agencies; intended to protect consumers from the willful and/or negligent inclusion of inaccurate information in their credit reports.
Regulation Z
Promotes the informed use of consumer credit by requiring disclosures about its terms and cost.
Endangered Species Act
Protect living organisms that are threatened with extinction.
Clean Water Act
Protects of fish and wildlife, and elimination of discharged pollutants into waterways among other things.
Safe Drinking Water Act
Protects water supplies, sets standards for water quality, and implements certain technical/financial programs.
Fair and Accurate Credit Transactions Act (FACT)
Reduces the risk of identity theft by regulating how consumer account information is handled.
Marine Protection, Research, & Sanctuaries Act (Ocean Dumping Act)
Regulate intentional disposal of materials into certain waters and authorizes any related research
Holes Inc. begins digging a foundation at a construction site for Investment Company under a contract for a certain price. After six months, Holes demands a higher price because of extraordinary difficulties that were totally unforeseen at the time the contract was formed. An agreement to pay the higher price is
a. enforceable due to unforeseen difficulties.
Reese contracts to sell a Spicy Pizza restaurant to Titian. As part of the deal, Reese agrees not to open a competing business within a hundred-mile radius for ten years. Reese later sues Titian, alleging that the agreement is illegal. To enforce the covenant not to compete, the court will most likely
b. reform the contract to make the distance and time limits reasonable.
Steel Mill Inc. agrees to deliver a certain quantity of steel to T-Bar Framing Corporation. The agreement states that delivery is to be within "9" days, although the parties intend "90" days. The seller cannot convince the buyer to amend the contract. The most appropriate remedy is most likely
b. reformation.
The credit department of Mega-Mart often calls Nora at work about an overdue bill over the objection of Nora's employer. This is a violation of
b. the Fair Debt Collection Practices Act.
Teri borrows $10,000 from USA Bank to remodel a room in her home. This transaction is subject to
b. the Truth-in-Lending Act.
A contract to do something that is prohibited by statute is
b. unenforceable.
Steel Mill Inc. makes an offer to Teri to enter into a contract to work as an metallurgical engineer for a certain salary for one year subject to a five-year renewal based on his performance. Teri accepts the offer. This is a valid contract because it includes
d. an offer and an acceptance.
Beryl enters into a contract with Clay for a guided tour of Deep Canyon. Clay represents that he is an experienced, knowledgeable guide, when in reality he has never been in the canyon. Most likely, Beryl
d. can rescind the deal based on fraudulent misrepresentation.
Fess convinces Gwyn to enter into a contract for the purchase of a Falafel Waffle Food Cart by knowingly misrepresenting a number of material features about the facility and the business. Most likely, Gwyn can rescind the contract on the basis of
d. fraudulent misrepresentation.
Dona offers to sell her used sofa, chair, coffee table, end table, and lamp to Etta for $700. Etta responds that she will pay that price if Dona's TV set is included. Neither party is a merchant. Their contract is formed according to
d. the terms of the original offer.
When applying the rule of reason to an activity that allegedly violates the antitrust laws, a court will not consider
d. whether the agreement is a per se violation.