TEST BANK for Business Law with UCC Applications, 15th Edition Paul Sukys. All Chapters 1-34.

Business Law with UCC Applications, 15e (Sukys) Chapter 1 Ethics, Social Responsibility, and the Law 1) Law consists of values that govern a society's attitudes toward right and wrong.

2) Law is a means of civil management.

3) Negative rights theory holds that rights are a divine invention designed to help people escape moral law.

4) Positive law derives from an outside source that has emerged within society.

5) If Sally believed in natural law, she would believe that right and wrong originate from an external objective, superior force.

6) Ethical rules of conduct developed by various professions are often easy to understand and follow.

7) Ethical theories are all based on the assumption that people want to live ethical lives.

8) Joe believes that there are absolute standards of right and wrong. Joe's belief is an example of market value ethics.

9) In the "Opening Case", the text notes that the plaintiffs in the U.S. Supreme Court case Ziglar v. Abbasi, were alleging brutal torture by the U.S. government and based on the Bivens case, asked the Supreme Court for a permanent injunction.

10) In his book, What Money Can't Buy: The Moral Limits of Markets, author Michael Sandel reveals that market value ethics is the new ethical relativism.

11) A descriptive theory explains how to create values that permit a society to run smoothly.

12) In A Classic Case: The Declaration of Independence, the text argues that Jefferson derived his four central truths of social contract from John Locke's famous book, Leviathan.

13) Another name for utility thinking is 'cost-benefit' thinking.

14) Utilitarianism focuses on the circumstances that an individual faces.

15) If Alfredo, a small business owner, engages in cost-benefit thinking, he will generally only focus on the benefits and problems his business will face as the result of a decision he makes.

16) Rational ethics, often referred to as objective ethics, states that people's ethical decisions can be judged only by understanding their situations.

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17) In his essay, Politics as a Vocation, Max Weber argues that national leaders must practice the "ethic of ultimate ends" to govern correctly.

18) All corporations are considered "legal persons" under federal and state statutes.

19) Corporate social responsibility is based on the legal advantages granted to the corporation.

20) The traditional legal view of a corporation held that corporate managers have a fiduciary duty to shareholders to make broader-based, more ethical decisions.

21) Living an ethical lifestyle means simply doing what is legal.

22) While the law protects our rights, only ethical principles can stop us from doing something that is wrong.

23) ________ are values that govern a society's attitude toward right and wrong and toward good and evil.

A) Ethics B) Laws C) Market values D) Morals 24) Martin Luther King, Jr. refused to obey the injunction in Birmingham in the early 1960s that prohibited King from speaking publicly merely because he was black. He was jailed for his disobedience. King felt that there was a higher law than the law of the land. King's actions were most likely based on a(n) ________ ethical model.

A) positive law B) natural law C) utilitarianism D) cost-benefit 25) According to neoliberalism, or ethical relativism: A) human values apply to all people at all times.

B) both natural law and positive law form the basis for its beliefs.

C) there are no objective or absolute standards of right and wrong.

D) the morality of an action is determined by its ultimate effects.

26) ________ consist of rules of conduct established by the government of a society to maintain harmony, stability, and justice.

A) Morals B) Ethics C) Laws D) Values

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27) Developing, formulating, and applying rules in line with our values is the job of: A) ethics.

B) conduct.

C) law.

D) rationalism.

28) ________ sees the morality of an action is determined by its ultimate effects.

A) Ethical relativism B) Social contract theory C) Utilitarianism D) Natural law 29) ________ is a vision of society in which competition for wealth is the only recognized value and virtually all social decisions are left to unregulated markets... It is a world in which... "everything [is] for sale."

A) Neoliberalism B) Rational ethics C) Social contract theory D) Utilitarianism 30) According to the ethical system of ________, ethical values can be determined by a proper application of human reason.

A) natural law B) market value ethics C) utilitarianism D) rational ethics 31) Political scientist and philosopher, Michael Sandel, warns that our tendency to evaluate everything based on money creates two insidious results—injustice and corruption. Here, Sandel is most likely critiquing which ethical theory?

A) Market value ethics B) Positive law C) Utilitarianism D) Social contract theory 32) Which of the following do positive law theory and natural law theory have in common?

A) Both believe that human decency will ultimately triumph over human cruelty.

B) Both believe that human values apply to all people at all times.

C) Both depend on an outside source for their understanding of law, morality, and rights.

D) Both believe in forming and dictating ethical decisions to people.

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33) In 2005, a new doctrine called ________, declares that the leadership of every nation has a definitive duty to protect its own people from four major threats, genocide, war crimes, ethnic cleansing and crimes against humanity.

A) Responsibility to Protect (R2P) B) Failed States Project (FSP) C) National Ethical Dyad (NED) D) Ethic of Ultimate Ends (EUE) 34) ________ is a philosophical theory that says ethical values can be determined by a proper application of human reason.

A) Neoliberalism B) Rational ethics C) Social contract theory D) Ethical relativism 35) If Samantha believes that the primary way to judge whether an action is right or wrong is to use quantification as the primary tool for determining value, she would believe in: A) market value ethics.

B) social contract theory.

C) utilitarianism.

D) natural law.

36) If the only question a corporate manager asks before she takes an action is whether the benefit to the shareholders will outweigh the cost to the corporation, she would most likely using a(n) ________ ethical model.

A) descriptive theory B) concurrent validity C) prescriptive theory D) utility thinking 37) If Anthony is concerned only with corporate benefits and problems, rather than the benefits and problems that will result for others outside the boardroom, he most likely believes in: A) utility thinking.

B) rational ethics.

C) social contract theory.

D) ethical relativism.

38) If George believes in a "state of nature", where people must fend for themselves rather than give up the freedom to do as they please, and in return receive a guarantee that other individuals will curb their behavior, he would most likely be rejecting the ________ ethical theory.

A) market value B) state of society C) social contract D) cost-benefit

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39) The social contract ethical theory: A) explains how to formulate values that permit a society to run smoothly.

B) advocates a society in which people must fend for themselves.

C) states that to live harmoniously, people must give up certain rights and freedoms.

D) states that people cannot be forced to adhere to rules, or be punished for not doing so.

40) The ethic of ________ must be practiced by individuals because individuals can never foresee the result of their actions.

A) responsibility B) relativism C) ultimate ends D) ultimate needs 41) Until recently, the goal of making a profit for ________ was the only view of corporate responsibility built into statutory and common law.

A) its creditors B) its shareholders C) social responsibility D) the government 42) The law exercises the power of ________ to confiscate privately owned land for community purposes.

A) eminent domain B) the ultimate ruler C) social justice D) property statutes 43) Which of the following is true of ethical and legal harmony?

A) In a utopian society, ethics and law would always differ.

B) Ethical considerations cannot form the foundation of a legal system.

C) A legal system founded on ethics will rarely succeed in reaching its objectives.

D) Ethics can lead the way in difficult situations where the law has yet to venture.

44) In terms of social responsibility, which of the following arguments is true?

A) Under provisions of most incorporation statutes, a corporation is considered nothing more than a company.

B) The decisions of corporate managers must always be narrowly focused on the profits of the shareholders.

C) Corporate social responsibility is based on the premise that it is unethical for corporations to earn profits for themselves.

D) Corporate decisions have an impact on more people than just the shareholders and managers.

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45) Matrix Corporation's board of directors decides not to outsource its U.S. jobs to China, even though it would cut labor costs by fifty percent. Shareholders subsequently sued the directors for failing to maximize profits. Under the traditional view, the directors would be: A) absolutely immune from any liability to the shareholders.

B) absolutely liable to the shareholders.

C) liable to the shareholders, unless they can prove their decision not to outsource was made with the shareholders' profits interest above all other interests.

D) criminally liable, unless granted immunity by a federal prosecutor.

46) Some argue that ________ is actually in the long-term best interests of the corporation. This argument, referred to as ________, is based on the notion that socially responsible corporations benefit by creating ________ for themselves, thus motivating consumers to purchase their products, investors to buy their stock, and lawmakers to grant them further legal advantages.

A) profit maximization; social responsibility; goodwill B) social responsibility; enlightened corporate self-interest; goodwill C) profit maximization; enlightened corporate self-interest; goodwill D) social responsibility; profit maximization; goodwill 47) Julia decides not to dump her used motor oil in the creek that runs behind her garage since that would damage individuals who live downstream and upset the peace and harmony in which she has lived with these neighbors. Name and explain the ethical system Julia has used to make this decision.

48) Lisa realizes that her colleagues and her boss judge her based on the way she speaks. Lisa is French and does not speak fluent English. Discuss the situation.

49) Rachel found a bag of money that fell out of an armored car. She decided to keep the money since she did not have full-time employment and was studying to be a nurse. Name and explain the ethical system that Rachel used to make her decision.

50) Justin learns that the air bags that his employer, Excel Auto Corporation, installs in its new cars can kill or seriously injure young children when the bags deploy in an auto accident. When he reports this to responsible Excel officials, they redesign and recall the old airbags at considerable expense since "it is the best thing to do for the driving public." Name and explain the ethical system Excel used to make this decision.

51) William develops a new design for a gasoline engine that will increase fuel economy by 30%. He decides not to patent this design because it will be good for the environment and the entire world. Name and explain the ethical system William has used to make this decision.

52) Jason decides not to cheat on an exam since he considers himself a morally reasonable person and the action of cheating on exams will undermine the value of degrees issued by his educational institution. Name and explain the ethical system Jason has used to make this decision.

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53) Michael is the corporate manager at Hatch & Jake Pvt. Ltd. He is asked to always consider if the benefits to the shareholders outweigh the costs to the corporation. Michael takes the action only if the shareholders' benefits offset corporate costs. Discuss.

54) Amanda Hutchins sued her managers for making merger decisions that caused shareholders to lose money. The managers argued that they made decisions based on the long-term benefits of the merger to everyone involved, including the local community and the state. Hutchins argued that the shareholders' profits should be the managers' first priority. Analyze the case and the possible ruling of the court.

55) Amalgamated Enterprises is considering closing its plant in a small U.S. town where its average wages are $10 per hour, and moving production to a foreign country where average wages for the same work will be $2 per hour. Amalgamated is the largest employer in the community. What theories of social responsibility may Amalgamated's management consider in making a final decision about the plant?

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Business Law with UCC Applications, 15e (Sukys) Chapter 2 Sources of the Law 1) Ideally, the primary objectives of the law, such as harmony, stability, and justice within a society, should be balanced equally at all times.

2) The law is a delicate balancing act between the power of the state and the rights of individuals.

3) Trade-offs rarely occur within the law.

4) The language of the law can become a hindrance instead of assisting in the execution of the law.

5) In his book, Law and History, Professor Anthony Chase writes that the balance between the words and the interpretation of the law is a strength of the law, and not a weakness.

6) According to the John M. Keynes' Uncertainty Principle, intent and results almost never coincide in economics, but when they do it is merely a matter of luck.

7) The Articles of Confederation created a strong national government.

8) The principle of the separation of powers divides power between the national and United Nations governments.

9) Article III of the U.S. Constitution creates the U.S. Supreme Court and other lower courts.

10) The original intent of the Bill of Rights was to protect the rights of slave owners among the southern colonies.

11) The Electoral College was a political compromise created so that the President would be chosen by electors, rather than directly by the people.

12) In the "Opening Case," current President Donald Trump signed an Executive Order in August 2017 ending the DACA program created by former President Barack Obama in June 2012.

13) California's introduction of SB 54 to declare California a "Sanctuary State" may involve a clash with the federal government under the Supremacy Clause of the U.S. Constitution.

14) An executive memorandum is a device by which the president can act on his own without having to resort to the somewhat cumbersome process of going through Congress.

15) A compilation of all the statutes of a particular state or the federal government is known as a code.

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16) Courts today rely on precedent according to the principle of stare precedentus, which means "let the decision stand."

17) Binding precedent is a precedent that courts must follow.

18) Stare decisis means "let the decision stand."

19) Statutory interpretation is the process of determining the constitutionality of various legislative statutes, administrative regulations, or executive actions.

20) To help prevent any conflict of interest that could arise from overlapping responsibilities of creating and enforcing rules and regulations, Congress passed the federal Administrative Procedures Act (APA).

21) The law is a delicate balancing act. This is evident because: A) political parties are always competing for power.

B) individuals require restraint to prevent chaos.

C) one corporation's contractual rights may be upheld, while another's are struck down.

D) one company may overcharge consumers.

22) The law has built-in ________—on the one hand, a person discovers the ________ of the law when he understands the law's actual intent, while on the other hand, if a person holds to the ________ of the law the person may have missed the true meaning.

A) dualities; spirit; letter B) dualities; words; interpretation C) dualities; abstract; concrete D) dualities; uncertainty; reason 23) Lillian, who now lives in Oregon, was charged by an Idaho court with molesting several children while she worked for Idaho Social Services. Lillian could be brought back to Idaho for trial based on: A) the Uniform Commercial Code.

B) persuasive precedent.

C) the Third Amendment to the U.S. Constitution.

D) Article IV of the U.S. Constitution.

24) Outside of the Bill of Rights, what is widely recognized as the most important amendment to the U.S. Constitution?

A) 13th Amendment which abolished slavery B) 18th Amendment which gave 18-year-olds the right to vote C) 14th Amendment's due process and equal protection D) 21st Amendment which gave women the right to vote

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25) In 2017, when President Trump rescinded former President Obama's 2012 DACA order, opponents of Mr. Trump claimed that the rescission order violated the: ________. (See The Opening Case, Round 1).

A) Fourteenth Amendment's Rights and Privileges clause B) First Amendment's Equal Protection clause C) Fifth Amendment's Due Process Clause D) First Amendment's Freedom of Speech clause 26) ________ is the process by which the courts decide that a federal statute must take precedence over a state statute.

A) Stare Decisis B) Revision C) Uniformity D) Preemption 27) ________ includes the freedom of the press, freedom of speech, freedom of assembly, and freedom of religion.

A) The Fifth Amendment B) The Fourth Amendment C) The Articles of Confederation D) The First Amendment 28) According to ________, the third type of ________ in the law exists between ________ principles and ________ situations.

A) Anthony Chase; duality; abstract; concrete B) Anthony Chase; uncertainty; abstract; concrete C) Anthony Chase; duality; abstract; uncertain D) John Maynard Keynes; duality; abstract; concrete 29) If Texas signed a trade agreement with Mexico which established tariffs and importing conditions for goods made in Mexico, the U.S. Constitutional objection to Texas' actions would be based upon the: A) principle of preemption.

B) doctrine of devolution.

C) principle of separation.

D) principle of supremacy.

30) ________ subdivided into groupings of statutes that deal with a particular area of the law are called ________.

A) Codes; titles B) Codes; articles C) Titles; chapters D) Codes; divisions

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31) The ________ is a unified set of statutes designed to govern almost all commercial transactions.

A) Uniform Common Law Code B) Uniform Commercial Code C) Uniform Civil Code D) Uniform State Code 32) The ________ created ________ dealing with the sale and licensing of digital information, and the ________ dealing with the enforceability of cyber-contracts.

A) NCCUSL; Cyber-Commerce; UCITA B) NCCUSL; UETA; UCITA C) NCCUSL; UCITA; UETA D) UCITA; NCCUSL; UETA 33) ________ comes from the attempts of early English kings to establish a body of law for all the courts in the kingdom.

A) Statutes B) Amendments C) A constitution D) The common law 34) Generally, if there are no modern court decisions or statutes dealing with an issue in dispute, the court hearing the case will: A) apply common law.

B) inevitably devolve.

C) be unable to decide the case.

D) ask the U.S. Supreme Court for an advisory opinion.

35) Generally, if the Florida Supreme Court issues a decision, that decision would be considered: A) persuasive precedent in all Florida state courts.

B) binding precedent in all Florida state courts.

C) binding in neighboring state courts.

D) binding precedent in all Florida federal courts.

36) Under the doctrine of ________, courts determine the constitutionality of statutes, regulations or executive actions and must rely upon any ________ in their analysis.

A) statutory interpretation; persuasive precedents B) statutory interpretation; binding precedents C) judicial review; persuasive precedents D) judicial review; binding precedents

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37) A business asks a court to interpret the way in which a newly enacted shoplifter detention statute will be applied if the business, at some future point, detains a suspected shoplifter. The court may: A) issue an advisory memorandum.

B) convene a conference of business and consumer representatives.

C) not interpret the statute until a lawsuit is filed challenging the statute.

D) ask the legislature to issue an advisory memorandum.

38) A ________ is a network of interacting conditions which ________ one another, while at the same time ________ change from agents outside and inside the system.

A) legal ecosystem; adjust to; reinforces B) complex adaptive system; reinforce; adjusts to C) legal ecosystem; reinforce; adjusting to D) complex adaptive system; adjusts to; reinforces 39) A new administrative regulation allowed the Social Security Administration to charge women for Social Security cards, yet enabled men to obtain the cards for free. A lawsuit was filed challenging the constitutionality of this new regulation. If you were a justice on the Supreme Court you would most likely: A) review common law to see whether a precedent exists that violates the Fourth Amendment.

B) use statutory interpretation to clarify the law based on First Amendment considerations.

C) rule the regulation unconstitutional because it violates the Equal Protection clause.

D) let the regulation stand in the interest of justice and equity.

40) According to the Administrative Procedures Act, a proposed federal regulation must first be published in the ________ with adequate time allowed for public comments.

A) Administrative Register B) Code of Federal Regulations C) Uniform Commercial Code D) Modern Federal Register 41) Stanley runs a business in Middletown. He knows bribing an officer in return for favorable duties is a crime. However, he avoids "bribery" by sending "gifts" to the sheriff as a token of appreciation for the officer's services to the town. The sheriff is impressed by Stanley's act and ensures that his business is "well protected." Analyze the situation.

42) Small towns want to restrict the speed of trains passing through the towns to 20 miles per hour. The Federal Railroad Administration allows trains to travel through the towns at up to 70 miles per hour. Discuss whether or not the towns may restrict the speed of the trains.

43) A local city council enacts an ordinance that prohibits aircraft from taking off before 7:00 A.M., disturbing the city's residents. An airline whose schedule is subject to federal regulation challenges this ordinance. Discuss the legal basis of this challenge and the likely outcome.

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44) A Massachusetts law prohibited governmental agencies of Massachusetts from buying goods from companies that conducted business with Myanmar. If the U.S. Supreme Court were to strike down this law, what might be the basis?

45) A state law restricts the sulfur dioxide emissions from electric generation plants more severely than those of the federal Clean Air Act. Must an electric generation plant obey the state law or may it follow the federal statute?

46) Pierce was arrested under a city ordinance that made distributing handbills on the city streets a crime. Pierce argued that the U.S. Constitution guaranteed his right to free speech under the First Amendment. The local prosecutor argued that the First Amendment to the U.S. Constitution did not apply to state laws. Was the prosecutor correct? Explain.

47) Matrix Corp. is fined by the Occupational Safety and Health Administration for violations of workplace safety regulations. Matrix challenges the fine on the basis that it was not allowed to have a jury trial before being fined. What resolution will result?

48) A court decides that a state agency, rather than a federal one, can control what government employees, in the course of performing their duties, are permitted to talk or write about in relation to official policies, procedures, and programs. Such a prohibition might appear to violate the employee's Constitutional right of free speech as a U.S. citizen. Analyze.

49) In a case presented to a Philadelphia court, the judge and the jury realize that no specific statute is applicable and decide to refer to previously recorded legal decisions made in similar cases. Discuss.

50) Helen, a 15-year-old citizen of Illinois, was about to go to the doctor for an abortion when the Supreme Court of Michigan ruled that minors could not receive an abortion without parental consent. What effect might the Michigan Supreme Court's decision have on Helen?

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Business Law with UCC Applications, 15e (Sukys) Chapter 3 The Judicial Process and Cyber-procedure 1) A predicate offense is generally one that provides the resources needed to commit the offenses outlined in the statute.

2) A state court that has the power to hear immigration cases is a court of special jurisdiction under the U.S. Constitution.

3) A federal question can only involve a treaty.

4) Appellate courts use the abuse of discretion standard to determine whether a judge in the lower court has, in some way, misused his or her authority.

5) Plenary review jurisdiction in federal court can only arise in cases of diversity, even though there is no federal law is involved.

6) The U.S. federal court system is divided into 13 circuits.

7) In federal subject matter jurisdiction cases, the plaintiff must allege at least $75,000 in damages.

8) The text of the U.S. Constitution gives the Supreme Court appellate jurisdiction in a case in which a state is a party.

9) State trial courts are known as limited jurisdiction courts.

10) In the Nicastro v. McIntyre (2010) case, the New Jersey Supreme Court applied the principle of diversity of citizenship to determine liability of the defendant.

11) The decisions of state supreme courts are final unless a federal issue or a constitutional right is involved.

12) A plaintiff is a person who answers a lawsuit by filing a demurrer in a trial court of general jurisdiction.

13) A complaint is served by the plaintiff directly on the defendant. This is called service of process.

14) A demurrer is a plaintiff's response asking a court to dismiss the defendant's answer because she has failed to state a claim upon which relief can be granted.

15) The defendant's answer may state an affirmative defense, such as assumption of the risk.

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16) Having been called for jury selection, Lawrence discovered that the defendant in the trial is the brother of his stockbroker. The lawyers may not refuse to impanel Lawrence because to do so would subject the court to a civil rights lawsuit.

17) Jury instructions contain the judge's opinion of the evidence presented.

18) If Joe sues Marie as the result of a contract dispute, Marie can request that Joe undergo a physical examination.

19) Cyber-jurisdiction is the power of the court to have personal jurisdiction over any type of case based on the stream of commerce standard.

20) Formal criminal charges may be brought against a defendant in state court without a grand jury being involved.

21) Joe, a resident of Ohio, and Maria, a resident of New Mexico, have an auto accident in New Mexico and the damages are $35,000. Based on this information, a federal court: A) would not intervene because Ohio and New Mexico have different laws regarding this type of accident.

B) would intervene because there is a federal question concerning whether an auto title was involved.

C) would not have jurisdiction over this case because the amount in controversy is less than $75,000.

D) would have jurisdiction over this case because the amount in controversy is over $15,000.

22) The U.S. Court of Appeals for the Federal Circuit was established by Congress primarily to: A) hear appeals on questions of law from the lower courts.

B) streamline and unify patent law.

C) decide on the details involved in bringing a case to trial.

D) simplify issues and avoid unnecessary arguments and surprises in the subsequent trial.

23) The United States Supreme Court does not have original jurisdiction in which of the following cases?

A) Cases in which an ambassador is a party B) Cases appealed from state supreme courts C) Cases in which public ministers and consuls are parties D) Cases in which a state is a party 24) Courts with the power to hear any type of case are courts with ________ jurisdiction.

A) unlimited B) special C) general D) subject matter

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25) Probate courts and courts of claims are examples of courts with ________ jurisdiction.

A) special B) subject matter C) personal D) general 26) Gordon Gibbs accidentally grated his plow along his neighbor's driveway, ruining the driveway. The neighbor wants Gordon to pay the $1,500 cost of paving the driveway. If this case enters litigation, it will most likely be heard by ________ court.

A) a federal B) the state supreme C) a family D) a small-claims 27) When a party (the movant) files a motion for ________, the movant is telling the court that no ________ exists, and that the movant is entitled by law to ________.

A) discovery; further discovery; a verdict in his favor B) a counter claim; genuine issue of material fact; a favorable judgment C) summary judgment; genuine issue of material fact; a favorable judgment D) an affirmative defense; further testimony; dismiss the other party's case 28) ________ occurs when a plaintiff searches for a(n) ________ with law that is favorable to its case, and then files the case.

A) Forum shopping; affirmative action jurisdiction B) Demurrer; jurisdiction C) Forum shopping; class action lawsuit D) Forum shopping; jurisdiction 29) A credit card company has cheated one million cardholders out of 50 cents each. Marlene, one of the defrauded cardholders, wants to sue the credit card company but should attempt to: A) approach the legislature for special suit legislation.

B) approach the U.S. Supreme Court to grant original jurisdiction.

C) bring a petition to the Congress signed by the cardholders.

D) bring a class action suit.

30) Cross-examination of the prosecution's witness is usually conducted by the ________ during the ________.

A) defense attorney, prosecution's case in chief.

B) defense attorney; voir dire C) judge; plaintiff's case in chief D) defense attorney; closing statements

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31) Joe signed a promissory note for $5,000 to cover the cost of roofing repairs by Acme Roofing Company. Acme transferred the note to Big Bank who sued Joe when he failed to pay the note. Joe believes that Acme did not do the repairs properly. If Joe wants to bring Acme into court, then Joe's answer should contain a: A) counterclaim against Acme.

B) cross-claim against Acme.

C) third-party complaint against Acme.

D) new lawsuit against Acme.

32) During the ________ of the jury, ________ the right to ask questions to determine who will allowed to sit on the jury.

A) discovery; only the judge has B) voir dire; both parties have C) discovery; either party has D) voir dire; only the plaintiff has 33) An equitable remedy may be available in all of the following cases except: A) specific performance.

B) damages.

C) an injunction.

D) a restraining order.

34) Attorney Jose wants to personally question Ellen, a witness, about her observation of an auto accident in advance of a trial concerning the accident. Jose should: A) send Ellen interrogatories.

B) take Ellen's deposition.

C) ask Ellen to produce tangible evidence.

D) issue a summons for Ellen to appear in court in advance of the trial.

35) Interrogatories: A) are made to secure a statement from a party that a particular fact is true.

B) ask a party to undergo a physical or a mental examination.

C) are written questions that must be answered in writing, under oath, by the opposite party.

D) ask a party to produce documents, records, accounts, photographs, or other tangible evidence.

36) Ignacio wins a monetary judgment at trial, but is denied an award of attorney's fees. The losing party, Salazar, acts to challenge the adverse trial court decision before an appellate court.

Ignacio also wants to appeal the denial of attorney's fees. Ignacio should file a: A) cross-claim.

B) motion for summary judgment.

C) cross-appeal.

D) counterclaim.

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37) Courts with appellate jurisdiction are empowered to determine whether the lower courts have made errors of law using the ________ standard.

A) plenary review B) clearly erroneous C) abuse of discretion D) de novo review 38) ________ is the power of the court to hear a case based on Internet-related transactions.

A) Science jurisdiction B) General jurisdiction C) Cyber-jurisdiction D) Subject matter jurisdiction 39) The Federal Rules of Civil Procedure now refer to computerized evidence as: A) electronic lockbox.

B) electronic data interchange.

C) e-commerce.

D) electronically stored information.

40) During a(n) ________, the defendant is formally charged with a crime and can either plead guilty or not guilty.

A) indictment B) preliminary hearing C) arraignment D) initial appearance 41) Jill, a resident of Iowa, suffers $20,000 in damages when a BIG Corp. truck hits her parked car in Illinois, where Jill is visiting her aunt. BIG Corp. is incorporated in Delaware. In what court may her suit be filed?

42) Hundreds of residents of Rosewood County in Pennsylvania have filed a lawsuit in state court against Thompson Brothers, a New York-based homebuilder, concerning the completion of Thompson's newly-built apartment facility. Fearing the hostility of a Pennsylvanian jury, Thompson is considering removing the case to federal court. Discuss.

43) Joe wants to sue directly in his state's Supreme Court (a state in which the Supreme Court is the highest court), since his suit involves a question of genetic testing that has never been heard by a trial court of general jurisdiction in Joe's state. Can Joe sue directly in his state's Supreme Court? Explain.

44) Samantha sues Acme Chemical Co. in a federal court for injuries caused five years ago by the application of a residential pesticide produced by Acme. The state statute of limitations (time to bring lawsuits) in Samantha's state is three years. Samantha wants the federal court to apply a longer four-year federal statute of limitations. How will the federal court resolve this question?

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45) Sue wants to sell products on the Internet, but is concerned that she might be sued in a distant state by a dissatisfied customer. How might Sue best design a website to avoid this possibility?

46) Each month for the past three years, Carol has been overcharged 50 cents by ABC Cell Phone Corporation. She has good reason to believe that tens of thousands of other individuals have also been defrauded of 50 cents each. Carol wants to sue, but the expense of bringing a lawsuit for 50 cents is too great. What can Carol do to obtain a judicial hearing of her complaint?

47) Marilyn is a contractor-computer programmer who works for SIM Co. in its principal place of business in New Jersey. Marilyn designs a corporate information system (CIS) for Matrix Corp., a SIM Co. client, which has its offices in New York City. Unfortunately, the CIS crashes before Marilyn is paid for her work and all of Matrix's records are lost, requiring Matrix to spend $300,000 to reconstruct the system. Matrix sues SIM Co. for breach of contract. Marilyn believes that the crash was not caused by her CIS and that she should be paid by SIM Co. Discuss the options Marilyn and SIM Co. have in responding to the suit.

48) Sheena was flying New York Airlines to Florida via a stop in Richmond, Virginia. However, the flight was delayed by ten hours at the Richmond airport and later cancelled, with no refund or alternate flights for the passengers. As a result, Sheena was forced to breach a $100,000 contract with a Florida client. Sheena files a lawsuit against New York Airlines and the Richmond airport for causing inconvenience during transit and for monetary loss. In response to her lawsuit, New York Airlines acknowledges the inconvenience caused but cross-claimed that the Richmond airport did not allow the connecting flight to land, hence the cancellation. Richmond defended the cancellation based on extreme weather conditions. Analyze the situation.

49) Nick sues Bradford & Co., alleging employment discrimination. Nick believes Bradford & Co.'s e-mail will reveal evidence of discriminatory attitudes and actions by its management. Nick sends a letter to Bradford & Co., requesting copies of e-mail messages for the last six months, but receives no answer. What should Nick do?

50) Ashley is accused of forgery and is arrested by the city police. She is being compelled to testify, which she refuses to do. At the trial, she asserts her innocence and informs the jury that she was not informed of her rights by the officers at the time of her arrest, and was compelled to testify. She wants the jury to be instructed about the rights of a criminal defendant and the degree of proof required of both the prosecution and the defendant (her) in this case. Discuss the case.

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Business Law with UCC Applications, 15e (Sukys) Chapter 4 Alternative Dispute Resolution and Cyber-ADR 1) Alternative Dispute Resolution can be expensive because of the initial steps prior to the filing of a lawsuit.

2) Some jurisdictions require litigants to submit to case management hearings and settlement hearings before they can secure a trial date.

3) Because of its cost-effectiveness, ADR is able to address critical social issues that may never reach the judicial system, thus filling in the policy gaps in the evolution of case law and the progression of legislation.

4) Proactive ADR increases the likelihood of litigation.

5) A criminal law case can be resolved by an ADR panel.

6) The Federal Arbitration Act (FAA) is designed to make certain that properly initiated arbitration agreements will be enforced by the courts.

7) Colleagues Sarah and Julia are involved in a dispute and get another colleague, William, to make suggestions about helping them resolve their dispute. This is an attempt at mediation.

8) Mediation always precedes the filing of a lawsuit.

9) An arbitrator's decision is always binding and cannot be appealed in court.

10) An arbitration hearing must be planned and executed by the court.

11) Med-Arb is a process that combines negotiation and mediation to deliver effective results.

12) The parties involved in the dispute can use early normal evaluation (ENE) to settle a case or proceed to trial.

13) Kin and Mai, through their lawyer, present an abbreviated version of their case to a jury in a single day, and obtain an advisory verdict. This is called a Med-Arb trial.

14) In a summary jury trial, there is no time limit placed on the parties as this allows them to practice their arguments.

15) According to the American Arbitration Association, arbitration is "a non-binding process where a neutral third party works with the parties to reach a mutually agreeable settlement."

16) Arbitration is a process that establishes supportive relationships among the parties to a contract to head off disputes before they occur.

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17) Drafting of ADR contract clauses is a proactive attempt to ensure that litigation will be avoided should a dispute arise.

18) ADR clauses usually only benefit the employer who has the strongest position within an employment relationship.

19) Negotiated rule making is a process by which an agency invites the people and the organizations who will be affected by a new rule to have input into the writing of that rule.

20) A collective science court (CSC) will not succeed unless it has the power to compel the parties to submit to its authority.

21) During the five-day settlement week, a court schedules an arbitration session for each case.

22) In the Opening Case, Considine v. Brookdale Senior Living, Inc., Brookdale's arbitration clause in the employment agreement was found to be: A) non-enforceable because it discriminated against Considine's lifestyle.

B) enforceable because Considine signed an employment contract indicating she had read and understood all of the terms in the contract, including the arbitration clause.

C) enforceable because it contained a non-discrimination clause which protected Considine's lifestyle.

D) non-enforceable because it did not contain a non-discrimination clause which protected Considine's lifestyle.

23) ADR is least likely to be useful in cases involving: A) constitutional law.

B) civil rights.

C) contracts.

D) criminal law.

24) Because many ADR techniques completely sidestep the courts: A) ADR cannot control the spending on litigation.

B) the parties are kept from carefully considering their agreements.

C) many attorneys do not adequately develop analytical skills.

D) many critical social issues may never reach the judicial system.

25) Which of the following statements about an arbitrator is true?

A) The arbitrator usually encourages the disputing parties to compromise on their demands, but cannot force the parties to do so.

B) The arbitrator has the unilateral power to issue a binding decision on the disputing parties, regardless of whether the parties agree with the decision.

C) Arbitration has no discovery so a case that may have been settled during a conventional lawsuit might drag on.

D) The arbitrator role is only useful before a lawsuit is filed by the parties.

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26) Which of the following is generally true of arbitration?

A) The arbitrator can make suggestions, but not issue binding decisions.

B) The arbitrator is a non-lawyer from the relevant industry.

C) The arbitrator must be chosen from among the disputing parties.

D) The arbitrator's decision can be appealed in court.

27) Which of the following is true of arbitration?

A) The procedures involved in arbitration are more rigid than those followed in lawsuits.

B) An arbitrator's decision is binding and cannot be appealed in court.

C) An arbitration hearing can be planned and executed by the parties themselves.

D) An arbitrator's decision cannot come under the review of the courts.

28) ________, a form of ADR, combines the best aspects of ________ and ________.

A) Med-ENE; reg-neg; ENE B) Neg-arb; negotiation; arbitration C) Med-arb; mediation; arbitration D) Med-arb; ENE; a private civil trial 29) Early neutral evaluation (ENE) is a(n): A) ADR process that combines mediation with arbitration.

B) shortened version of a trial, conducted in less than a day before an actual jury which renders an advisory verdict in the case.

C) ADR technique by which the parties hire a retired judge to hear their dispute.

D) ADR process in which the parties permit a referee to assess their case on the basis of the facts and legal arguments alone.

30) In a(n) ________, the jury provides an advisory verdict based on the facts.

A) summary jury trial B) med-Arb hearing C) early neutral evaluation D) mediation 31) ________ is an ADR technique by which parties hire a retired judge or a magistrate to hear the dispute, following rules used in an official trial.

A) Partnering B) A private civil trial C) Early neutral evaluation D) Med-arb 32) Big Co. and Gantt Co. have entered into a contract for a long-term construction project. The companies opt to use a partnering process to resolve disputes. The partnering process between them will begin: A) after the contract has been finalized, but before the project has begun.

B) when the first dispute between the two parties arises.

C) only if both mediation and arbitration procedures have failed.

D) once the project has begun and the parties are aware of possible problems.

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33) An ADR contract clause: A) must specify the ADR technique that the parties will use in the event of a dispute.

B) can merely state that the parties have the option of using an ADR technique.

C) prohibits the parties from resorting to litigation to settle an issue.

D) requires that the parties follow all ADR procedures with a summary trial.

34) During a settlement week, the court: A) settles those cases that cannot be resolved through arbitration.

B) requires attorneys to be present for mediation sessions.

C) resolves all submitted cases to be decided by summary jury trial.

D) subjects all submitted cases to private civil trials.

35) ________ is an ADR process by which an agency invites the people and the organizations that would be affected by a new rule to have input into the writing of that rule.

A) Med-arb B) Negotiated rulemaking C) A private civil trial D) Mediation 36) Post-appellate procedures: A) involve taking a case that has been rejected or dismissed by a domestic court to an international organization.

B) refer to a pledge to use arbitration, should the parties find themselves in disagreement as to the enforcement rights under the original contract.

C) are processes by which agencies invite the organizations who will be affected by a new rule to provide input about the writing of that rule.

D) specify that the parties to the agreement have promised to use an alternative dispute resolution technique when a disagreement arises rather than litigating the issue.

37) Which of the following is not a reason for entering into an international arbitration agreement?

A) The parties' choice of legal representation is limited to the forum in which the dispute is to be heard.

B) Local laws of a particular nation may prevent a party from using certain arbitrators.

C) The parties cannot choose the arbitrators who will decide the case.

D) Using an international arbitration agreement does not allow for uniform enforcement of a judgment across nations.

38) The judges on the collective science court must be: A) drawn from a sample of people affected by the technology in question.

B) scientists with expertise in the areas under investigation.

C) from government bodies involved in legislation about the subject.

D) lawyers with a general scientific background.

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39) Opponents of ________ have challenged it because they believe it is an unconstitutional deprivation of their right to a trial by jury and equal protection under the law.

A) mandatory mediation B) mandatory arbitration C) mandatory med-arb D) ENE 40) To be enforceable and upheld by a court, an ADR contract clause should include all the following standard provisions except: A) the types of disagreements that will be submitted to ADR. B) the ADR technique or techniques that can be used.

C) the substantive law and the procedural rules that will be followed.

D) whether both parties have sufficient insurance resources to sustain the award.

41) Chuck likes to grow "natural" flowers, such as dandelions, in his yard, while his neighbor Patty sees these as weeds whose seeds constantly blow into her yard. Both Chuck and Patty anticipate living in their homes for many years to come. Discuss a form of dispute resolution that would best fit this situation.

42) Tom and Jerry operate an ice cream business as equal partners. Tom wants to reinvest the profits, and Jerry wants to distribute and spend the profits. If they litigate, the court will likely order the business assets sold, which will destroy the income potential for both Tom and Jerry.

Discuss how this dispute might be resolved by arbitration.

43) Cheatham and Dunlay are involved in a partnership dispute that presents several complex legal issues. They decide to use early neutral evaluation. Discuss how this process might be helpful in this situation.

44) Kim and Dave are filing for a divorce and dispute the value of assets they acquired while married. Each has had appraisers value the assets, but the appraisers have reached differing conclusions. How will a summary jury trial help in this situation?

45) Kurt Johannessen, a well-known professional athlete, and Tina, his actress wife, have filed for divorce and are involved in a dispute for the custody of their son. Because of their celebrity status, neither wants the media coverage and public detailing of their private lives that come with official court trials. However, mediation and arbitration efforts have failed as neither party is willing to compromise. Discuss how they can resolve their custody dispute and avoid the publicity issues.

46) DSK Construction interacts with many contractors and subcontractors, often for long-term projects. Disputes among the various parties often take a long time to be settled as different parties have different demands. Which method of ADR will help DSK and its contractors prevent disputes before they escalate?

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47) Patricia Selan, a freelance photographer, entered a work-for-hire agreement with Dynamic Prints Ltd. During the negotiation stage, Selan asked that the contract include an ADR clause, which would make certain that the parties would submit all disputes to ADR. The clause stated that whenever a disagreement arose, the parties would first talk about the problem informally. If, after 14 days, no solution was reached, the claim would go to the American Arbitration Association, which would assist them in choosing an objective mediator who would help them choose an appropriate ADR plan. What benefits does this contract offer Selan?

48) When Kiros and Alphonse entered into a partnership agreement, they decided to submit all disputes to binding arbitration and included this clause in their partnership agreement. When a dispute arose, an arbitrator was called in and passed judgment against Kiros. Kiros appealed to the courts, and the arbitrator's ruling was overturned. Discuss a possible explanation for this.

49) The FFEA, a federal agency, was charged with the task of drafting a series of rules to implement the New England Fusion Reactor Initiative. The FFEA anticipates that the new rules will involve drastic changes for all the concerned parties. Rather than simply writing the rules and placing them before the affected parties, what action might the FFEA take to minimize the other parties' dissatisfaction with the rules? Explain.

50) The Cuyahoga Experimental Research Company and the Chagrin River Genetics Laboratory Association planned to construct a laboratory for research into the Human Genome Project. The laboratory would be located on land that was owned by four shipping companies. The owners of the companies objected to the way in which their land was appropriated for the project by the government and the research companies. The owners also objected to the planned location of the research facility because they were afraid that some sort of genetic accident might harm the crops and farm animals that were shipped through their terminal which was adjacent to the research facility. Which form of ADR would be ideally suited to hear this dispute? Explain.

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Business Law with UCC Applications, 15e (Sukys) Chapter 5 Criminal Law and Cybercrimes 1) The U.S. Constitution grants the federal government express authority to enact criminal law statutes.

2) A misdemeanor is a crime punishable by death/imprisonment in a federal/state prison for a term exceeding one year.

3) Under American law, a crime can be committed regardless of whether an act has occurred.

4) A person who cleans a hunting rifle without checking to see if it is loaded is acting with recklessness because that person has not bothered to look for any possible negative consequences that could result from those actions.

5) An individual can be convicted for a criminal act even if the prosecutor cannot prove the defendant had an evil motive for committing the crime.

6) Experts who believe in deterrence say that the criminal process should be presented in a public way, so that the public will learn the difference between acceptable and unacceptable behavior.

7) Alfred drives his car very fast in a school zone when the school is releasing students at the end of the school day. A student dies when he is hit by Alfred's car. Alfred has committed manslaughter with premeditation.

8) A doctor who injects an antibiotic into a patient's arm without the patient's consent may be liable for assault.

9) Gabriel points a gun at a store clerk to frighten the clerk. This is an example of assault and battery.

10) George's forced entry through a window along with his intention to rob a safe establishes the act of aggravated burglary.

11) In the Opening Case Round 3, United States v. Hearst, the authors state that Hearst's attorney, F. Lee Bailey, argued that Hearst was not guilty of armed (or aggravated) robbery because no one was injured in the bank holdup.

12) The RICO Act covers only serious crimes, such as arson and robbery.

13) Stan threatens to use his computer skills to shut down the computers of the U.S. air traffic control system unless he is paid money. Stan is likely committing cyber-stalking.

14) The Economic Espionage Act (EEA) is designed to protect against electronic- vandalism.

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15) Under the irresistible impulse test a defendant can be found not guilty by reason of insanity if, at the time the criminal act was committed, he or she was suffering from a mental disease that was so serious that the defendant did not know the nature of the act or did not know that act was wrong.

16) Under the Coercive Persuasion test, a victim manifests an affection and emotional sympathy for the kidnapper.

17) If a law enforcement officer induces a law-abiding citizen to commit a crime that he or she would not otherwise commit, the defendant may have the right to use self-defense.

18) A person has a duty to retreat before using force, even if the attack occurs in her own home.

19) Patricia believes she could not be personally charged for gambling if she creates a lottery to raise money for her favorite charity. This could be used as a defense to being prosecuted for unlawful gambling.

20) If a spouse had no idea that she was in danger of death or severe bodily injury, she may use the battered spouse syndrome as a form of self-defense in some courts.

21) Which of the following is true of criminal law under the American law system?

A) When a crime is committed, the victim has a cause of action against the accused and is permitted to recover money as compensation from the defendant.

B) In a criminal case, the prosecutor or district attorney is required to prove the criminal defendant guilty by a preponderance of the evidence.

C) Defendants are protected from being tried for a criminal offense and then being sued under tort law for that same wrongful act.

D) If a defendant is accused of an offense that can be designated as two different crimes, he or she can be tried in two different courts.

22) A city ordinance allowed the police to arrest young men who were loitering in any public place with no apparent purpose and failed to disperse when requested to do so by the police.

William was arrested under the ordinance. What is William's best legal challenge to his arrest?

A) The ordinance has no connection to public safety.

B) The ordinance is void for vagueness.

C) The ordinance gives power to the police.

D) The ordinance contains no reference to a state of mind.

23) Which of the following would be considered a criminal act?

A) Martin had a heart attack while driving his semitrailer on a highway, causing a head-on collision with another trailer, and resulting in a 40-car pileup and 17 deaths.

B) Last summer, Sam made and sold crack cocaine and marijuana to teenagers in his neighborhood, leading to drug network and addiction amongst teenagers of that locale.

C) Karen, obsessed with thoughts of her husband's affair with his colleague, wrote in her diary detailed plots of how to kill the woman.

D) Helen thinks she cannot get through each day without taking LSD, a psychedelic drug.

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24) Two drivers challenge each other to a drag race on a public highway. This is an example of acting with: A) a purpose.

B) knowledge C) recklessness.

D) negligence.

25) A child is killed by the violent behavior of his mother's boyfriend. The mother was aware of the possible danger her boyfriend posed to her son, yet failed to take steps to prevent or reduce the risk of harm to her son. She can be convicted of a crime due to which of the following requisite states of mind?

A) She acted with negligence.

B) She acted with knowledge.

C) She acted with recklessness.

D) She acted with purpose.

26) Which of the following types of criminal homicide involves killing someone with premeditation, killing in a cruel way such as with torture, or killing while committing a major crime?

A) Second-degree murder B) Involuntary manslaughter C) First-degree murder D) Voluntary manslaughter 27) A robber kills a convenience store clerk and escapes with just $5. Which of the following types of homicide best fits the facts?

A) Second-degree murder B) First-degree murder C) Voluntary manslaughter D) Involuntary manslaughter 28) Joe, driving while intoxicated, caused a traffic accident that killed a passenger in his car. Joe may be charged with: A) involuntary manslaughter.

B) first-degree murder.

C) second-degree murder.

D) aggravated murder.

29) The term ________ has been used to describe a crime in which the offender causes actual physical harm to the victim.

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30) A statute that made burning a cross to cause fear a criminal offence would be an example of what type of crime?

A) Assault B) Hate speech C) Arson D) Terrorism 31) A shoplifter steals a can of soda and tries to escape. He threatens and fights the clerk when confronted. This is an example of: A) burglary.

B) extortion.

C) embezzlement.

D) robbery.

32) Myra, the assistant accountant at Multibusiness, Inc., decides to transfer $5,000 from a Multibusiness account to her personal account in order to pay some personal medical expenses.

Myra plans to repay the money as soon as she receives reimbursement from her health insurance.

Myra has committed: A) larceny.

B) forgery.

C) embezzlement.

33) ________ is analogous to forgery because it also involves the alteration or falsification of an object or a document with intent to defraud.

A) Embezzlement B) Criminal simulation C) Passing bad checks D) Defrauding creditors 34) Agnes, a convenience store cashier, takes $5 out of the register for every $100 she rings up and keeps it. Agnes could be arrested for: A) extortion.

B) embezzlement.

C) burglary.

D) robbery.

35) Alvin has discovered how to duplicate subway fare cards, and has made several hundreds of them with the intention of defrauding people. Which of the following crimes has Alvin committed?

A) Larceny by false pretenses B) Forgery C) Embezzlement D) Bribery

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36) ________ is the making of a false statement under oath.

A) Perjury B) Dereliction of duty C) Intimidation D) Tampering with evidence 37) Tom enters a computer chat room attempting to contact children online with the intention of taking illegal advantage of them. This e-crime is known as: A) cyber-extortion.

B) cyber-spoofing.

C) cyber-stalking.

D) cyber-fraud.

38) Mark enjoys hacking into the computer databases of companies, but never takes or damages any data. Mark has violated which of the following statutes?

A) Access Device Fraud Act B) Computer Fraud and Abuse Act C) Wiretap Act D) Mark has not violated any statute, since there is no damage.

39) A criminal defendant is found to be suffering from a mental disease that is so serious she does not know the nature of her actions or the fact that the acts she commits are wrong. This describes which of the following tests?

A) M'Naughten Rule B) Irresistible impulse test C) American Law Institute test D) The Durham test 40) ________ is only a defense to charges of criminal liability if it destroys one of the elements necessary to that crime.

A) Self-defense B) Mistake C) Battered spouse syndrome D) Defense of others 41) Sue is in her apartment complex when she hears screams and what sound like gunshots.

However, she fails to call 911. Has Sue committed a crime due to her failure to call the police?

Explain.

42) While sleepwalking during his stay in a hotel, Boterus ran into Selan, another guest at the hotel, knocking Selan down the stairs. Selan called the police and demanded that Boterus be arrested. Will Boterus likely be convicted of a crime? Explain.

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43) A gasoline tanker truck is speeding around a curve in the road and overturns on the shoulder of the highway. The truck catches fire due to a spark igniting the gasoline and the fire spreads through a field where it burns a house and barn. The driver is arrested and accused of a criminal act. Analyze the situation.

44) The police have the DNA and fingerprint evidence to connect Amy, the CEO of BIGCORP, to a particular crime of murder involving the CEO of a major competitor, but they still have not found enough evidence of a motive for Amy to kill the victim. Would the lack of a motive prevent Amy from being convicted? And, would BIGCORP be criminally liable for Amy's actions?

45) Zach sells art pieces that are altered and falsified, but convinces his customers that they are buying original artifacts. Explain the kind of crime committed by Zach.

46) Lane offered the mayor of Ontario $12,000 to award Lane's firm a building contract. The mayor refused the bribe. When Lane was arrested, he claimed that he was innocent of the charge of bribery because the mayor never took the money. Discuss the possibility of Lane's actions to be qualified as crime.

47) Jackson's wallet is stolen. The thief makes use of the identification items in the wallet to pass himself off as Jackson in order to establish fraudulent credit card accounts and in general, disrupt Jackson's financial life. Analyze the crimes and the law violations for which the thief can be convicted.

48) Brooke sends e-mails to customers of a local bank, directing them to a website that she has created, which appears to be the website of the bank. The customers are directed to update their banking information by entering their credit and personal information. Analyze the crime for which Brooke can be convicted.

49) A hacker threatens to shut down a company's computer system unless the company pays him $10 million. Discuss the crime and federal statutes involved in the case.

50) An undercover police investigator logs into a computer chat room posing as a 15-year-old girl. An older man, knowing the asserted age of the "girl", suggests that they meet at a local motel and expresses his intentions. The man checks into the motel at the pre-arranged time, and is arrested for attempted statutory rape under a state Internet enticement law. Discuss the case in brief.

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Business Law with UCC Applications, 15e (Sukys) Chapter 6 Tort Law and Cybertorts 1) Jim ran a stop sign, hitting Martin's car, and both were injured. Jim can be liable for both criminal and civil injuries.

2) The doctrine of respondeat superior is also referred to as strict liability.

3) Punitive damages is an essential element of tort law, as well as comparative damages that may be placed on an individual.

4) The Daubert v. Merrell Dow Pharmaceuticals case amended Rule 702 of the Federal Rule of Evidence and the United States Supreme Court Frye v. United States precedent.

5) Under the common law (non-statute), a storekeeper has the merchant protection rule which allows a store owner to detain a shopper without suspicion that an incident has occurred.

6) Truth can be a complete defense to a suit for libel, but only in the cases involving public figures.

7) Richard, a former U.S. Senator who is running for President, can successfully sue an Internet blog site for defamation by merely proving the statements printed in the tabloid are false.

8) To prevail in a case for disparagement, a plaintiff must prove she has suffered some accompanying physical injury.

9) If William sues Sam for fraud with the intention of pressuring Sam to sell his business to William, William has committed fraud.

10) Proximate cause is the same as "cause in fact."

11) The defense of comparative negligence involves the complete failure of the injured party to be careful enough to ensure his personal safety.

12) The Classic Case of Overseas Tankship v. Morts Dock and Engineering involved a question of whether the harm suffered by the plaintiffs was reasonably foreseeable.

13) Contributory negligence is a defense that completely prevents the plaintiff (the injured party) from recovering any damages.

14) Assumption of risk can be used as defense to negligence if the victim is forced to enter the risky situation because no other choice is available.

15) James uses fireworks to celebrate the victory of his favorite team in the soccer finals. If James unintentionally injures a person walking on the pavement, he can be held responsible based on strict liability.

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16) A product in a defective condition is unreasonably dangerous to the user, consumer, or property.

17) Cybertorts frequently involve intentional harm to an individual's physical well-being.

18) Under the Communications Decency Act, an Internet service provider is strictly liable for hosting a blog containing false statements of a customer's personal experience at a well-known restaurant.

19) Cyber disparagement involves false statements communicated through the Internet to others that in some way casts doubt upon the ownership or the quality of an item of property or a product offered for sale.

20) An injunction occurs when a court orders a defendant to pay damages or face jail time.

21) "Survival statutes" allow the family members of an individual, who is killed as the result of a tort, to sue the wrongdoer for the loss of support from the deceased.

22) Wrongful death statutes allow a creditor to bring a lawsuit on behalf of the deceased.

23) The primary purpose of tort law is to: A) prevent and punish criminal offenders.

B) protect people from being tried twice for the same crime.

C) compensate for the injured party's loss.

D) protect victims' rights.

24) Criminal law differs from tort law in that: A) criminal law involves a public wrong.

B) tort law involves legal action by governmental authorities.

C) tort law protects the public.

D) criminal law compensates the injured party's loss.

25) The theory of ________ means ________.

A) respondeat superior; torts committed by an employee during his employment will result in both the employee and the employer being held liable under tort law B) respondeat superior; an employee may be held liable under tort law for the torts committed by her employer, while the employee was working at the organization C) respondeat superior; an employee working with an organization and having committed a tort can be held liable for even though he or she did not intend the harm D) proximate cause; an organization is not held liable under tort law for the torts committed by its employees during their work tenure at the organization

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26) The Daubert case involved juriscience, the intersection of law and science, to help the court determine a question of real or: A) vicarious liability.

B) causation in fact.

C) duty.

D) proximate cause.

27) In a road rage incident, Jack aims a firearm at Reagan. No shots are fired and the incident is over in less than 15 seconds. Reagan may sue Jack for: A) assault.

B) battery.

C) false imprisonment.

D) disparagement.

28) New York Slimes journalist, John Q Public, intentionally misquotes U.S. Senator Smith who was giving a speech on the floor of the U.S. Senate. If Senator Smith wishes to sue Public for libel, she would have to prove the statement was a ________ statement made with ________ because of Smith's status as a ________.

A) disparaging; malice; limited public figure B) privileged; recklessness; public figure C) false; actual malice; public figure D) false; malice; temporary public figure 29) Vienna is a quiet, reclusive, stay-at-home mom. However, last week she became a ________ after she rescued her neighbor's child from drowning in canal and was interviewed on national television as "America's Mom." As long as her notoriety lasts, she will be held to the ________ test.

A) limited public figure; actual malice B) public figure; slander per se C) temporary public figure; public disparagement D) limited public figure; public privilege 30) The basis of the claim in Best Products, Inc. v. ABC News involved: A) defamation.

B) invasion of privacy.

C) false disparagement.

D) food disparagement.

31) Munchburger, a fast-food outlet, sends an employee to hand out leaflets outside Hick's Burger, a competing fast-food outlet. The leaflets falsely accuse Hick's of using horsemeat in its burgers. Hick's may successfully sue Munchburger for: A) disparagement.

B) invasion of privacy.

C) interference with a contractual relationship.

D) defamation.

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32) ________ occurs when false statements or actions, or a combination thereof, are made by one party in a way that causes another party to rely on those misrepresentations and then suffer an injury or loss as a result.

A) Disparagement B) Invasion of privacy C) Abuse of process D) Fraudulent misrepresentation 33) Mitch is photographed attending a public school board meeting where violent protestors attacked members of the school board. Later, when Mitch runs for the school board, a local newspaper publishes Mitch's picture next to that of the violent protestors. Mitch may sue: A) if the newspaper writes a false article with actual malice.

B) for creating a false light.

C) the newspaper, if he is able to prove the motive of the publisher.

D) the newspaper for both defamation and disparagement.

34) If Ann sued Sharon for assault without any factual basis, and the jury ruled in favor of Sharon, Sharon in turn may sue Ann for: A) abuse of process.

B) contributory negligence.

C) misuse of legal procedure.

D) malicious prosecution.

35) When the misuse of the legal procedure involves the filing of a false civil lawsuit, it is called: A) wrongful civil proceedings.

B) malicious prosecution.

C) abuse of process.

D) invasion of privacy.

36) ________ is an element of negligence that occurs if the alleged tortfeasor has not met the appropriate standard of care.

A) Legal duty B) Actual harm C) Proximate cause D) Breach of duty 37) ________ demonstrates that "but for" the defendant's actions, the plaintiff would not have been injured.

A) Proximate cause B) Actual cause C) Legal cause D) The foreseeability test

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38) At the conclusion of a tort trial, the jury finds the plaintiff about 30% responsible for the damages she suffered and the defendant about 70% responsible for causing the damages. The jury determines the actual damages totals to $100,000. How much will the plaintiff recover under contributory negligence?

A) $0.00 B) $30,000 C) $70,000 D) $100,000 39) If a defendant can prove ________, the plaintiff can recover a share of the jury's verdict, depending on the relative fault of each party.

A) comparative negligence B) partial comparative negligence C) partial contributory negligence D) contributory negligence 40) Ching keeps a pet snake in her apartment. While Ching is hosting a party at her apartment, the snake escapes from its cage and bites a guest, seriously injuring the guest. The guest knew before attending the party that Ching has a pet snake in her apartment. If the guest sues Ching for the injury resulting from the cobra bite, Ching: A) will be strictly liable.

B) may defend based on assumption of risk.

C) is liable only if she intentionally released the snake from its cage.

D) has no liability since the incident was unforeseen by her.

41) ________ is the communication of false and destructive information about an individual through the use of electronic devices.

A) Cyberdisparagement B) Cyberinvasion C) Cyberdefamation D) Cybermining 42) ________ takes place when a hacker links multiple strings of data together and develops a data package that the target considers a compilation of private information, despite the public sources from which the hacker composed the package.

A) Cyber invasion of privacy B) Cyberterrorism C) Data mining D) Cyberdisparagement

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43) Which of the following is true of survival statutes?

A) They allow suits to be brought for libel after the death of a defamed person.

B) They preserve the right to bring a lawsuit only if the death is caused by negligence of the defendant.

C) They can only be brought by family members who have lost the support of the deceased.

D) They preserve the right to bring a lawsuit for personal injuries, no matter what caused the death(s).

44) Carey was injured when hit by a truck driven recklessly by Steven, an employee of the American Trucking Company. On what basis may Carey sue the American Trucking Company when Steven was the individual being reckless?

45) As a prank, Amanda rigs a bucket of water over Leslie's front door so that Leslie will be soaked when she opens the door to go to work on Monday morning. Can Leslie successfully sue Amanda for the prank?

46) Bishop and Thomas had been partners and had a business disagreement that was resolved by private arbitration. Bishop now knows that Thomas is seeking a loan. Based on his personal experience with Thomas, Bishop tells a banker friend that Thomas is difficult to do business with and that anyone doing business with Thomas could be cheated. As a result of Bishop's statements, Thomas is denied a bank loan. Discuss what Thomas can do in this situation.

47) Kelvingrove Art Gallery falsely tells art collectors that many artworks being sold by Yesse Art Gallery are forgeries. Analyze the options that Yesse Art Gallery has to bring a lawsuit against Kelvingrove Art Gallery.

48) A tabloid journalist pays money to the trash collector of a celebrity movie star in order to obtain access to the celebrity's trash. The journalist then writes a story about the celebrity's lifestyle based upon the contents of the trash. The trash is locked in a special building on the celebrity's property and the trash collector has a key to the building and has signed a confidentiality agreement. Is truth a defense that the journalist may assert when sued by the celebrity?

49) Jason parked his car on a hill, but failed to set his parking brakes. The car rolled down the hill and hit another car, damaging it significantly. The owner of the other car, Yang, filed a lawsuit of negligence against Jason, who pledged that he had no intention of damaging anybody's property and that he shouldn't be made to compensate. Discuss the methods the court and the jury could use to arrive at a fair decision.

50) Victoria is seriously injured when, during a thunderstorm, a large and seemingly healthy tree located on private property falls on her car. Discuss if Victoria can file a negligence lawsuit against the owner of the tree and be successful.

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51) Ben was driving 70 miles per hour in a 55-mile-per-hour speed zone when his car hit Sandra's as she entered the highway. Ben had the opportunity to move into another lane to avoid hitting Sandra but failed to do so. Discuss the defenses of negligence available to Sandra and Ben. 52) Baker attends a baseball game and is hit by a foul ball while sitting in an unscreened section of the stadium. The stadium offers both screened and unscreened seats of equal quality and price.

Can Baker successfully sue the stadium, the player who hit the ball, or the team the player was employed for this incident?

53) A security guard employed by Aria Stores accused Brentley of shoplifting and left him handcuffed to a post by a cash register for 15 minutes until local police arrived. Brentley sued Aria Stores for false imprisonment and a jury awarded Brentley $1,000 in compensatory damages and $1,000,000 in punitive damages. Does Aria Stores have a legal basis for appealing the damage award?

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Business Law with UCC Applications, 15e (Sukys) Chapter 7 The Essentials of Contract Law 1) A contract consists of mutual promises between two parties that can be enforced in a court of law.

2) Law mercantilism is a complex, adaptive system of overlapping economic agents that operates on the basis of competition and a regulated market that responds to the movement of supply and demand.

3) In Law and Revolution, Harold J. Berman tells us that some rulers agreed to incorporate the law merchant into their national documents such as the Magna Carta in 1215, which contains a clause that specifically grants safe passage to foreign merchants in England.

4) A person who makes an offer is called an offeree.

5) Legal detriment involves the legal ability to make a contract.

6) Kayla creates a unilateral contract when she promises Sam to give up her right to sue him in exchange for a cash payment.

7) Void contracts, such as those contracts entered into with a minor, may be avoided or canceled by either of the parties.

8) Equitable remedies are monetary damages that are imposed by the courts on innocent parties to prevent them from taking advantage of the breach by deliberately raising the amount of damages that the other party has to pay.

9) The Uniform Commercial Code (or UCC) is a model code designed to unify statutes governing almost all commercial transactions.

10) An unenforceable contract may have all the elements of a complete contract and still be unenforceable.

11) A breach of contract occurs when both parties fail to keep their respective promises.

12) Vivian, Ewell's friend, believes that Ewell's contract with Mickey is unfair to Ewell. Even though Vivian does not have any tangible stake in the contract, she may sue since she has privity due to her interest in Ewell.

13) Gregory sells his land to Tim. Under the Statute of Frauds, Gregory and Tim must have an oral contract to be enforceable in the court of law.

14) Matthew agrees with a friend to divide the proceeds from a bank robbery that the two will commit. This agreement is unenforceable.

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15) When there is a breach of contract, the injured party has the right to ask a court to somehow remedy the situation.

16) Clark promises to pay Mike $30 if Mike will mow Clark's yard. This is an example of a bilateral contract.

17) When contracting parties accept mutual obligations through oral discussion, they have created a quasi-contract.

18) Pumping gas into a car at a self-service gas station would be an example of a bilateral contract.

19) In the case of an implied-in-fact contract, the court will apply reasons of justice and fairness and may obligate one who has unfairly benefited at the innocent expense of another.

20) The quasi-contract concept involves the mutual assent of the parties.

21) ________ outlines the historical laws and the procedures that were followed by merchants in commercial transactions.

A) Contract law B) Commercial law C) Trade law D) Lex mercatoria 22) The doctrine of ________ restricts a party from denying that a promise was made under certain conditions, even though consideration has not been exchanged to bind an agreement.

A) enforceability B) privity C) Statute of Frauds D) promissory estoppel 23) Fair courts, established in 11th century England, were: A) tribunals set up in seaport towns to handle disputes involving maritime law.

B) composed of judges who applied fair and equitable principles to commercial transactions.

C) composed of legal scholars who applied common law to all commercial cases.

D) courts in which juries were composed of merchants who were empowered to hear cases involving commercial disputes.

24) ________ exists when an offeror communicates a valid offer with clear and unambiguous terms to the offeree, and the offer has been accepted properly by the offeree.

A) Legality B) Capacity C) Consideration D) Mutual assent

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25) A proposal made by Braxton to his friend Mike, indicating a willingness to enter a contract to buy Mike's old car for $4,000, fulfills the element of ________ in contract law.

A) capacity B) consideration C) mutual assent D) legality 26) A non-breaching party in a breach of contract case has a ________ and cannot take advantage of the breach that increases the amount of damages the breaching party must pay.

A) duty to mitigate damages B) right to punitive damages C) duty to mitigate equities D) right to specific performance 27) In contract law, the non-breaching party is compensated by the payment of ________ damages to make up for their real financial losses.

A) punitive B) compensatory C) consequential D) incidental 28) Article 2 of the ________ is a model set of laws designed to govern the sale of goods in commercial transactions in the United States.

A) Uniform Contract Law Code B) Uniform Common Code C) Uniform Civil Code D) Uniform Commercial Code 29) All ________ are ________, but not all agreements are ________ because an agreement may not be ________.

A) agreements; contracts; enforceable; in writing B) agreements; contracts; contracts; equitable C) contracts; agreements; contracts; legally enforceable D) contracts; agreements; contracts; in writing 30) Matrix, Inc. contracts with Smalltown Economic Development Corp. to build a factory in Smalltown that will employ 1,000 workers from Smalltown. Matrix later breaches this contract, and Smalltown citizens who were expecting to be employed sue Matrix for breach of its contract.

Smalltown citizens' best argument for damages involves the legal doctrine of: A) quasi contracts.

B) privity of contracts.

C) intended beneficiaries.

D) implied-in-fact contracts.

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31) Which of the following contracts should be in writing to be enforceable in courts under the Statute of Frauds?

A) Contracts that can be completed within one year.

B) Contracts to pay the debt of another.

C) Contracts involving the sale of all types of goods.

D) Contracts in consideration of employment.

32) Some parties, when entered into a(n) ________ contract, may choose to cancel the contract.

A) unenforceable B) void C) voidable D) valid 33) Beth and Joan, both 15 years of age, enter into a written contract. In the contract, Beth agrees to do Joan's math homework for two weeks for $50, and Joan agrees to pay Beth at the end of the two-week period. This contract is: A) implied-in-law.

B) void.

C) unenforceable.

D) voidable.

34) A(n) ________ contract cannot be upheld by a court of law, although it may have all of the elements of complete contract.

A) unenforceable B) valid C) voidable D) void 35) Henrietta offers a $500 reward for the return of Fifi, her lost dog. Silas finds and returns the dog. This is an example of a(n): A) bilateral contract.

B) unilateral contract.

C) quasi-contract.

D) unenforceable contract.

36) Webtel Services, Inc. and Acme Co. sign a document which states that Webtel Services will create a web page for Acme and that Acme will pay for this work. This is an example of a: A) bilateral, voidable contract.

B) quasi, unilateral contract.

C) bilateral, express contract.

D) unilateral, implied-in-law contract.

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37) To be enforceable under the Statute of Frauds, a: A) written contract has to be a formal, preprinted agreement.

B) written contract cannot be keystroked or scrawled.

C) sales slip or a receipt do not qualify as forms of written contracts.

D) written contract can be a notation or a memorandum.

38) A(n) ________ contract is implied by the direct or indirect acts of the parties.

A) express B) implied-in-fact C) unilateral D) void 39) A(n) ________ contract does not exist, but is imposed by the court as an equitable remedy in the interests of fairness and justice.

A) quasiB) implied-in-fact C) informal D) executory 40) An informal contract is also known as a(n): A) void contract.

B) quasi-contract.

C) implied-in-fact contract.

D) simple contract.

41) Eloise made a contract in January that gave her until the end of the year to complete her work on a new computer system for Dexter. In mid-July, Eloise is working on the computer system. The contract in July is considered: A) executory.

B) unenforceable.

C) being expressed.

D) executed.

42) Mark was speeding on the highway when he and John had a car accident and suffered serious head injuries. As a result, John's memory was affected, and he could not remember any of the incidents on the day of the crash, including the fact that Mark's rash driving caused the car crash.

At the hospital, Mark, who suffered minor injuries, convinces John that the crash was no one's fault and just bad luck. John is empathetic and signs a contract with Mark stating that neither party would sue the other for damages. However, Lily, who was with John in the car and was also injured, knows that Mark was responsible and challenges the contract in court, in addition to filing a lawsuit against Mark. Analyze the case.

43) Donita, 34, and Terry, 25, enter into a contract which stipulates that Donita will allow Terry to occupy her apartment for six months, beginning next month. Terry has agreed to pay a rent of $100 per month. Discuss the elements that make this contract legally binding for Terry and Donita.

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44) Ruben promises to pay Talana $200 if she steals Jessica's business law textbook. Talana steals the business law book, but Ruben, who now feels guilty for his act, refuses to pay Talana and asks her to return the book. Discuss ways in which Reuben has breached the contract.

45) Georgia purchases what proves to be a defective product from ZBest Enterprise to give to her best friend, Sarah, on her birthday. Georgia refuses to take legal action against ZBest because she is afraid of confrontation. Sarah, wanting to help Georgia, and angry at ZBest, wants to sue ZBest. Discuss the options Sarah has to sue the company.

46) Alan persuades Charles to buy his truck by falsely telling Charles that the truck has just had a new engine installed. In fact, the truck has an old engine that has been cleaned to look new.

Charles buys the truck and finds out the truth about the engine. Discuss the situation.

47) Shannon offered a $50 reward for the return of a lost kitten. When Mark found the kitten and returned it to Shannon, she refused to give him the reward because he had not promised to find the kitten before he went looking for it. Analyze the case.

48) Charleen goes to Big Basket Supermarket and fills her cart with food, pushing it up to a checkout line. Discuss the type of contract between Charleen and Big Basket that would obligate Charleen to pay for the food prior to leaving Big Basket, even if Charleen and the clerk never say a word to each other.

49) Jackie takes her car to the All Clean Car Wash and watches the employees while they mistakenly give her car a special $30 hand wax treatment, rather than the $5 spray wax she requested. Jackie refuses to pay $30 saying that she requested a service that would cost her only $5. Analyze the case.

50) Emerson, a wealthy man, has a special seal made that contains his family crest and motto.

Emerson places the seal impression next to his name on every contract that he signs in order to prove that other contracts containing a signature without the impression are forgeries. Discuss the type of contract Emerson makes.

51) Fraser entered into a written contract with the Plastica Company to purchase 100 plastic black bats for a Halloween party he was hosting. The terms of the contract called for Plastica to deliver all 100 bats by October 25. On October 20, Fraser received from Plastica 85 plastic bats and 15 paper red bats. A letter accompanying the shipment stated, "We no longer make plastic black bats. For the inconvenience, we will charge you 15 percent less than the price we originally agreed upon." Was the contract between Fraser and Plastica an executed contract? Explain.

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Business Law with UCC Applications, 15e (Sukys) Chapter 8 Offer, Acceptance, and Mutual Assent 1) In the case of an open offer, there must be merely reasonable intent, clear and reasonably definite terms, and communication to the offeree.

2) Teri sends an offer to Morris to sell her car for its Blue Book value. Morris is the offeree.

3) A newspaper advertisement addressed to "Ohio residents only" would be an invitation to trade.

4) Henry sends an e-mail to Bernice regarding the sale of his truck to her for a price "to be determined in good faith." If Bernice e-mails back stating "I Accept," the agreement would be unenforceable.

5) Most of the time, printed and electronic advertisements are bait-and-switch confidence games.

6) Acorn Outfitters advertises a large tent, usually selling for $250, to be sold to the first customer the next morning for $25. Samuel is the first in line, but Acorn claims that the tent has already been sold. Acorn has engaged in an auction.

7) An auction with reserve is a contract in which one party consents to sell to a second party all of the goods that party makes in a given period of time.

8) Foster Aircraft Co. has agreed with the U.S. government to rapidly produce a new fighter aircraft in exchange for specified production expenses and a 10% profit. This is a requirements contract.

9) According to general contract law, a contract for the sale of goods comes into existence when any reasonable means under the circumstances is used to communicate the acceptance.

10) When dealing with a text offer which requests a text back to accept, the acceptance is complete when the text acceptance is received by the offeror.

11) A condition precedent is one in which the parties agree that the contract will be terminated when a prescribed event occurs or does not occur.

12) Clickwrap contracts have been generally held to be unenforceable.

13) On June 1 Alberto sent out texts offering to sell his car and asking for text acceptances. On June 7, Cruz texted Alberto accepting his offer. However, Cruz's text was not received by Alberto until June 10 due to connection problems. The text from Cruz created an enforceable agreement between Cruz and Alberto the moment it was sent.

14) Omar offers to sell a motorcycle to Adanne for $10,000. Adanne replies, "I will pay $10,000 if you overhaul the engine." Adanne's reply is a counter offer.

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15) During a lunch with Russell, Josephine offers to sell Russell her laptop for $1,000. Russell rejects her offer when he says "nah, not interested" during the lunch. But the next day, before Josephine has taken any additional action, Russell calls her to say, "I've changed my mind, I'll take the laptop." An enforceable contract has been formed, and Josephine is legally required to sell Russell her laptop for $1,000.

16) The lawyers of Leo's estate put an auction ad in the local newspaper asking "without reserve" bids on his 100-acre ranch along the Guadalupe River. All bids were to be texted by 5 P.M. August 1st. Only one bid was sent, and that was Sam's bid of $100. Assuming no other legal issues, the Estate of Leo and Sam have an enforceable agreement for the purchase and sale of the ranch for $100.

17) Under the general law of contracts, an option contract holds an offer open for an agreed period of time, regardless of whether there is sufficient legal consideration.

18) A merchant in a sale of goods contract under Article can agree to an option that exceeds one month in duration.

19) A lease option permits a party to lease real property while at the same time holding an option to purchase that property.

20) An e-contract must have additional consideration to be as valid as a paper contract.

21) The Uniform Computer Information Transactions Act (UCITA) covers diverse areas, such as database contracts and software licensing agreements.

22) A unilateral mistake offers each party the right to rescind the contract.

23) The first rule of contract interpretation, under the ________, tells judges that their primary objective in the interpretation of a written contract is to uncover the goals that the parties had when they entered into the contract in the first place.

A) standard construction rule B) state of frauds C) subjective construction rule D) mutual assent rule 24) Silas, very angry because his new car broke down, yells out "Anyone wanna buy a piece of junk for $100?" Ida overhears Silas and says, "I do, here's $100." What result?

A) Silas must sell his car for $100, since his statement was clear and definite.

B) Silas need not sell his car for $100, since he was clearly angry.

C) Silas must sell his car for $100, but only if he were speaking directly to Ida. D) Silas must sell his car for $100, because his anger does convey serious intent.

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25) Hazel offers to sell her home to Mandisa for "about $100,000 plus closing costs." Mandisa accepts Hazel's offer, but a dispute arises concerning the precise dollar amount of the purchase price. How will a court resolve this dispute?

A) The court will declare the purchase price and terms too indefinite to create a binding contract.

B) The court will determine a reasonable price to be paid by Mandisa.

C) The court will appoint a licensed real estate appraiser to determine the price to be paid by Mandisa.

D) The court will require Mandisa to pay the average of her price and Hazel's price.

26) Matrix Corporation, a computer manufacturer, agrees to purchase from Chipmaster, Inc. all the computer chips that Chipmaster can produce during the next 12 months, at cost plus a twelve-percent markup. Matrix later does not purchase any computer chips during the 12-month year. Can Chipmaster enforce the agreement made with it?

A) Yes, this is an enforceable requirement contract.

B) No, the price is not sufficiently defined.

C) No, the agreement to purchase is illusory.

D) Yes, this is an enforceable output contract.

27) In a(n) ________ contract, one party consents to sell to a second party all of the goods that party makes in a given period of time.

A) requirements B) current market price C) cost-plus D) output 28) Highflight Foundation offers $1 million to the makers of the first private spacecraft to fly to the moon and back. Spaceview, Inc. succeeds in producing the first private spacecraft to fly to the moon and back, but Highflight refuses to pay. This is a ________ contract and Highlight is ________.

A) unilateral; not bound by the offer unless there is a written and signed contract with Spaceview B) unilateral; bound because Spaceview performed the required action, which was an acceptance of the offer C) unilateral; not bound since the moon is not under U.S. legal jurisdiction D) bilateral; bound since Spaceview had a firm offer 29) Jose agrees to sell his car to Diego for $5,000 if he is accepted to Harvard Medical School.

This contract is: A) illusory.

B) subject to a condition precedent.

C) subject to a condition subsequent.

D) subject to concurrent conditions.

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30) Anthony offers to sell a computer to Salvador for $900 if Salvador replies by e-mail only, sent no later than noon on Saturday. On Saturday, Salvador is unable to access his e-mail, so he mails an acceptance at the post office before noon. Which of the following is true of the situation?

A) A legal contract exists since Salvador's acceptance was sent by noon on Saturday.

B) No contract exists since Salvador's acceptance is not effective until reviewed.

C) Anthony is legally bound to the contract since Salvador's e-mail malfunction was no fault of his own.

D) A legal contract does not exist since the mode of acceptance specified in the offer was not used.

31) Mercedes receives a box of unordered office supplies in the mail. What is her legal obligation?

A) She must return it.

B) She must report this to the local postal inspector.

C) She must pay for it.

D) She may consider it a gift.

32) When forming online contracts, ________ is a cyber-technique that preserves electronic data of offer and acceptance without using local hard drives and flash drives.

A) social media B) encryption C) cloud computing D) E-SIGN 33) Rosa sends an offer to Kellen that requires acceptance to be made by U.S. mail. Kellen accepts in a timely manner, but sends the acceptance by FedEx which delivers the acceptance to Rosa two days faster than the U.S. mail would. Under traditional common law rules, has Kellen accepted Rosa's offer?

A) No, since the offer specified a particular manner of acceptance that was not used.

B) Yes, since FedEx was faster than the U.S. mail.

C) No, since the acceptance was delivered by a private, rather than a public, delivery service.

D) Yes, since acceptance sent in any form—even if early or delayed—confirms the offer.

34) Soft Feet, Inc. manufactures shoes. Walk Style, Inc. is a retailer of shoes. Soft Feet offers to sell Walk Style 1,000 pairs of shoes at $5 per pair with delivery to be made by October 31. Walk Style accepts, but writes in the margin "delivery to be made by October 20." According to the UCC, what is the legal status of Walk Style's October 20 delivery date?

A) Under the UCC, the writing is not a mirror of the offer and is a counteroffer.

B) Under the UCC, the writing binds Soft Feet to accept the conditions about the delivery date.

C) Under the UCC, the writing binds Soft Feet, unless it objects.

D) Under the UCC, the writing is an unequivocal acceptance.

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35) Brett offers to dust and vacuum all the rooms in Arlene's apartment for $45. Arlene says she will accept his offer if he lowers his fee to $40. According to the common law of contracts, Arlene has: A) made an unequivocal acceptance.

B) made a counteroffer.

C) demonstrated the mirror image rule.

D) entered into an option contract.

36) An option contract: A) removes the possibility of revocation through death or insanity of the offeror.

B) is valid only if in return for the agreement to hold the offer open, the offeror receives no money or something else of value from the offeree.

C) is a contract that permits a party to lease real property while at the same time holding an option to purchase that property.

D) is an agreement that binds an offeror to a promise to hold open an offer with no time limit specified.

37) While looking for apartments, Brittany finds one that she likes. The building manager agrees to an option contract in which he will hold the apartment for Brittany for four days in return for $100. At the end of the fourth day, Brittany finds another apartment that she likes better and signs a lease with its building manager. Because Brittany's contract with the original building manager is an option contract, the building manager is under: A) no legal obligation to return more than $50 to Brittany.

B) legal obligation to return Brittany's $100 payment.

C) legal obligation to return one-fourth of Brittany's $100 payment.

D) no legal obligation to return Brittany's $100 payment.

38) Booksellers, Inc. makes a written offer to sell Smallville City Library 20,000 books at $5 each. In writing, Booksellers also agrees to keep the offer open for sixty (60) days. However, before the 60 days have passed, Booksellers sells all the books to Universal Library for $7 each.

Which of the following is true of this situation?

A) Smallville cannot file a legal claim, since a firm offer may be revoked prior to acceptance.

B) Smallville can file a legal claim, since Booksellers agreed to hold the offer open, even though no consideration was given.

C) Smallville had not taken possession of the books, nor paid any of the purchase prices, and hence cannot file a lawsuit.

D) Smallville can bring a lawsuit, since Booksellers engaged in bait-and-switch tactics.

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39) According to the E-SIGN Act: A) diverse areas such as database contracts, software licensing agreements, customized software formulation, and the rights to multimedia commodities are covered.

B) the participants must concur on the use of an electronic medium to create their contractual relationship.

C) e-contracts that are entered into over the Internet will be valid, provided that the parties to the e-contract have agreed that electronic signatures will be used.

D) an e-contract, even if it cannot be duplicated and stored, will have the same validity as a paper contract.

40) The ________ has unified, streamlined, and refined the legal principles regarding such diverse areas as reverse engineering, consumer protection, shrinkwrap licenses, fair use, and consumer warranties.

A) Law Enforcement Access to Entity Information Act B) Discovery of Electronically Stored Information Act C) Uniform Computer Information Transactions Act D) Secured Electronic Transactions Act 41) ________ occurs when one party does not say something about certain facts that he is under an obligation to reveal.

A) Passive fraud B) Fraud inducement C) Fraud in inception D) Active Fraud 42) Harvey and Myra Church were interested in buying land from Sam and Barb Houston. When the Churches asked about the appraised value of the property, the Houstons said that the appraisals ranged from $185,000 to $198,000. Without looking at any appraisals, the Churches agreed to buy the property for $185,000. After the contract was signed, the Houstons provided an appraisal listing the value as $155,000. When the Churches refused to go through with the deal, the Houstons sued to recover the difference between $185,000 and the lower price for which the house was later sold. The Churches counterclaimed the contract should be rescinded based on their mistaken assumption about the value of the house. The Churches' best argument for rescission would be based on: A) the active fraud of the Houstons.

B) a bilateral mistake of value.

C) the Churches' unilateral mistake of value.

D) the Houstons' exertion of undue influence.

43) A mistake by only one of the parties is called a ________ and ________ offer sufficient grounds for rescission or renegotiation.

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44) ________ occurs when the dominant party in a special relationship uses excessive pressure to convince the weaker party to enter into a contract that greatly benefits the dominant party.

A) Business compulsion B) Physical duress C) Undue influence D) Economic duress 45) When Garibaldi rented an office from the landlord, Jonas Properties, Jonas agreed to reimburse Garibaldi a fair share of the expenses he incurred in redecorating the office. After the project was completed, Jonas refused to pay for any of the expenses. Analyze the situation in a case where Garibaldi files a lawsuit against Jonas for breach of contract.

46) Girard University offered Steamer Ferris a professional position. Girard offered to provide Steamer a house and to pay him an annual salary of $50,000 plus benefits for teaching three classes per semester. Steamer agreed to the contract as long as Girard would also provide an administrative position for his wife. Discuss the agreements between the parties.

47) Dale posts an ad in the local newspaper—"$100 reward for the return of my dog, Buster"— with a picture. Henry, after seeing the newspaper advertisement, finds that a dog has strayed into his garden. Henry checks the dog's collar that has a tag with Dale's address and returns the dog.

Is Henry legally entitled to the $100 reward? Explain.

48) Joseph offered to sell Chelsea his electric bicycle for $650. Chelsea told Joseph she would be happy to buy his bicycle, and asked if the price included an extra tire. Joseph said there was no extra tire. Chelsea then agreed to pay $650 for the bicycle, but Joseph refused to sell stating that he now wanted $750 for the bicycle and that Chelsea had made a counteroffer when she mentioned an extra tire. Discuss whether or not Joseph may insist on receiving $750 for the bicycle.

49) Todd offered in writing on Monday to sell his desk to Mike for $150. Todd's offer stated that unless Mike rejected Todd's offer by Thursday, it would be considered accepted. Mike did not reply until Saturday, when he rejected the offer and refused to buy the desk. Todd insists that Mike is bound to purchase the desk, since he did not reject the offer by Thursday. Discuss the validity of the contract and the legal obligation of Mike.

50) On May 1st, Alpha Oil Company sends an electronic offer via the "cloud" to Zeno Refining Co. as follows: "Offer to sell 10,000 barrels of crude oil at $85 per barrel, will hold the offer open until July 1st." On July 2nd, Zeno responds with an acceptance to Alpha. But by the time of Zeno's response, the market price of crude oil has risen to $98 per barrel. Alpha says no contract, and Zeno threatens to sue. What result?

51) On October 10th, Juliana sends Linda a letter offering to sell her book collection for $15,000.

Three days later, on October 13th, Juliana dies. On October 15th, without knowing Juliana had died, Linda sends Juliana a letter accepting her offer. Juliana's heirs inform Linda that the $15,000 offer is revoked and that they will not sell the collection for less than $20,000. Linda demands specific performance. What result?

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52) Melinda is considering opening a fast-food business across the street near a university campus. Melinda needs to secure $100,000 in loans to open her business. The owner of the land promises her that she has two months to accept his offer of $50,000 for the land. Discuss how Melinda can ensure that the owner does not sell the land to another buyer.

53) Mike and Mickey live at the opposite ends of Texas, some 750 miles apart. They want to make a contract via computer rather than using paper, since this will be faster and more convenient. Considering the three current model codes, what steps must Mike and Mickey take under each to make a legal binding agreement?

54) Shelly was involved in an auto accident and was admitted to the local hospital, as she had suffered severe injuries. She informed the hospital staff that she was covered under accident insurance, and that the insurance company would pay for the medical bills. When the insurance agent arrives, he informs her that the insurance will cover every cost and that all she has to do is sign some papers for the insurance company to start the procedures. The papers that Shelly signs are actually an agreement that the insurance company will pay only 30 percent of the medical bills, since Shelly was driving recklessly. Analyze the case.

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Business Law with UCC Applications, 15e (Sukys) Chapter 9 Consideration and Cyber-Payments 1) Uncle Joe promises Mary a new car on her birthday. Uncle Joe's promise constitutes legally sufficient consideration.

2) Danny agrees not to go duck hunting if "Save the Ducks" pays him $100. Danny's forbearance does not constitute legally sufficient consideration.

3) The legal term used to describe the sacrifice that each party must experience is that party's legal detriment.

4) The law will enforce an agreement that has not been bargained for.

5) In a release, only one of the parties must make a legally enforceable promise.

6) Maria's daughter is seriously ill. Desperate, Maria deeds her $250,000 house to a physician for $2,500 of medical treatment. This contract has a valid bargained-for-exchange and is most likely not legally enforceable.

7) Assume the CEO of CarolCo Enterprises tenders a $80,000 check to ABC Bank as "Payment in full" of CarolCo's note of $100,000. If ABC cashes the check, this is most likely an accord and satisfaction.

8) Illusory promises provide mutuality of benefit required in establishing consideration, but only if they involve promissory estoppel.

9) Consideration requires that the benefits and sacrifices promised between the parties be legal.

10) Contracts created by promissory estoppel are generally considered agreements without consideration.

11) Modern courts are willing to enforce charitable pledges as enforceable contractual obligations.

12) Laura promises to pay Stuart "a reasonable amount" for repairing her car. Stuart sends Laura a $500 invoice and Laura sends Stuart a $350 check marked "payment in full." There is an agreement created by promissory estoppel.

13) The UCC requires the use of the seal in all sale-of-goods contracts.

14) Alan orally promises to pay a debt that was discharged in bankruptcy. Under federal law Alan's promise is enforceable.

15) A bankrupt individual is required by law to repay all of her debts to creditors with an irrevocable offer of reaffirmation.

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16) Under the general law of contracts, a signed, written offer made by a merchant that allows acceptance at any time within a 90-day time period is not binding unless the offeree signs the offer.

17) ABC Co. promises to pay Sarah $1,000 for the "excellent work she has done in the past."

When ABC does not pay, Sarah may sue and collect the $1,000.

18) James, a police officer, solves a crime assigned to him by his police supervisor. The crime victim has offered a $1,000 reward to 'whomever' solves the crime. James may collect the reward even though the reward is an illusory promise.

19) The EU Data Protection Directive created a new crime, called aggravated identity theft.

20) The issue in the Classic Case, Hamer v. Sidway, involved the question of legal detriment.

21) Linda calls a cab in the morning to get to work. The fare that Linda would pay to the cab is a(n) ________ for the ride to work.

A) exchange B) donation C) consideration D) conversion 22) The legal term used to describe the sacrifice that each party must experience in a mutual exchange is that party's legal: A) detriment.

B) exchange.

C) accord.

D) release.

23) Which of the following legal detriments is known as forbearance?

A) Doing something that one has a legal right to do B) Doing something that one does not have legal right to do C) Giving up something that one has a legal right to keep D) Refraining from doing something one has a legal right to do 24) Tasha phones Robert and asks if she can borrow his vacuum cleaner to clean her apartment before her parents visit. Robert agrees to this. But when Tasha goes to pick up the vacuum, Robert refuses to give it to her. Which of the following statements is true?

A) A bargained-for exchange has occurred, so Robert must loan Tasha the vacuum cleaner.

B) A bargained-for exchange has not occurred, so Robert does not have to loan Tasha the vacuum cleaner.

C) Robert has promised Tasha something of value, so he must loan her the vacuum cleaner.

D) Robert has committed a breach of contract.

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25) Lisa agrees to sell Deb an electronic entertainment center worth $1,000 for $700 cash in order to have a rapid sale. Later, Lisa insists that she may rescind this agreement since the agreed price was 30% below fair market value. Lisa may: A) rescind, since the consideration is inadequate.

B) rescind, since the agreement is unconscionable.

C) rescind, since the agreement is not bargained for.

D) not rescind the agreement once Deb accepts.

26) When a consideration is so ridiculously inadequate that it shocks the court's conscience, it is considered: A) unconscionable.

B) forbearance.

C) illusory.

D) detrimental.

27) A(n) ________ is an acceptance of an agreement not to sue supported by consideration, which terminates one's right to continue any lawsuit, presently or in the future, on grounds described in the agreement.

A) accord and satisfaction B) release C) option D) promissory estoppel 28) A written promise not to sue is commonly called a: A) consideration.

B) forbearance.

C) detriment.

D) release.

29) Assuming he has the right, Tom's promise ________, also called ________, is ________ when it is supported by ________.

A) of forbearance; promissory estoppel; enforceable; consideration B) to donate money; charitable pledge; enforceable; firm offer C) not to sue; forbearance; enforceable; consideration D) not to sue; consideration; enforceable; legal detriment 30) ________ is the mutual agreement of less than what has been billed to the debtor.

A) Accord and satisfaction B) Bankruptcy C) Accord D) Consideration

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31) In terms of disputed amounts, satisfaction is the: A) legal term used to describe the sacrifice that each contracting party must experience.

B) implied acceptance of less than what has been billed to the debtor.

C) performance of the accord.

D) express acceptance of less than what has been billed to the defaulter.

32) Today, promises under seal are: A) enforceable in some states for contracts not involving goods.

B) enforceable under the UCC for contracts involving goods.

C) enforceable under the UCC if made by a merchant, in writing, stating the time period over which the offer will remain open.

D) unenforceable as a consideration in a new contract.

33) ________ is a legal doctrine that restricts a party from denying that a promise was made under certain conditions, even though consideration has not been exchanged to bind an agreement.

A) Statutes of limitations B) Promissory estoppel C) Locus sigilli D) Accord and satisfaction 34) A(n) ________ is a promise to do something that one is already obligated to do by law or some other agreement that cannot be made consideration for a new contract.

A) reaffirmation B) option C) promissory estoppel D) preexisting duty 35) Monty quit his $150,000 annual salary job with Computer Associates in Monterey, California, and moved with his family to Fairfield, Connecticut based upon an oral promise by Software Power to provide reimbursement of all moving expenses and at least three years employment at an annual salary of $250,000 per year. One month after moving, and before being reimbursed for moving, Monty's employment with Software Power is terminated due to a reduction in force caused by lower-than-expected product sales. Can Monty successfully sue Software Power?

A) No, since the promise was oral.

B) Yes, under promissory estoppel.

C) No, since a promise of employment is always subject to market conditions.

D) Yes, but only for the moving expenses that Monty can prove he incurred.

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36) Edwin, Marketing VP of Amalgamated Sales, Inc., writes a letter dated August 1 to Bargain Stores, Inc. offering to sell candy to Bargain Stores at $50 per case for the next thirty days.

Bargain Stores then contracts with local retailers based on the offer from Amalgamated. Ten days later, Amalgamated receives an offer from Dandy Stores, Inc. to purchase this same candy at a price of $75 per case. Can Amalgamated withdraw its offer to Bargain Stores?

A) Yes, the offer may be withdrawn since it lacks consideration.

B) No, as this is a firm offer.

C) Yes, the offer was simply an invitation to negotiate.

D) No, as this is only an option.

37) Sally's grandmother, Laura, promised in her will to make Sally an heir to her home if she would move into Laura's home and care for her. Sally agreed to this and moved into Laura's home. But when Laura died, her will named Bob, a family friend, as heir to her home. Is Sally legally entitled to the home?

A) Yes, helping her grandmother provided consideration.

B) No, Sally just had a duty to help her grandmother.

C) Yes, Sally was legally closer to her grandmother than Bob. D) No, Laura may write her will however she wishes.

38) While the Washington family was gone for the weekend, their home was broken into and robbed. Manny, a professional boxer who lived next door, saw the thief, apprehended him, and forced him to return the stolen possessions. When the Washingtons returned, Mr. Washington told Manny that he would give him $5,000 for his efforts. The next morning, Mr. Washington gave Manny a check for $2,000. What result?

A) Mr. Washington broke his contract with Manny.

B) Manny would lose if he brought a suit against Mr. Washington because Manny's actions would be a past consideration.

C) The bargained-for-agreement obligated Mr. Washington to pay the boxer $5,000.

D) Mr. Washington would lose if Manny brought a suit against him to recover the amount based on promissory estoppel.

39) Oralia agrees to babysit Avery's daughter "when I can" if Avery promises to clean Oralia's house every week. This agreement is ________ because it is based on a(n) ________.

A) enforceable; option contract B) enforceable; future gift C) unenforceable; promissory estoppel D) unenforceable; illusory promise 40) The ________ outlaws the unauthorized transfer, possession, or use of a means of identifying another person to violate federal law.

A) Aggravated Identity Theft Act B) Identity Theft Criminality Act C) Identity Theft Penalty Enhancement Act D) Uniform Electronic Transactions Act

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41) The ________ Directives, also known as the ________ Principles, guarantee the rights of European citizens while, at the same time, ensuring the smooth exchange of data among those nation-states that honor the privacy and data protection standards themselves.

A) Encrypted Cloud Data; Consumer Safe Harbor B) EU Identify Theft and Deterrence; Debtor Safe Harbor C) EU Data Protection and Privacy; Safe Harbor D) EU PRISM; Safe Harbor 42) State laws known as ________ limit the time within which a party is allowed to bring suit to collect a debt.

A) promises not to sue B) charitable pledges C) option contracts D) statutes of limitation 43) Tim's mother was concerned that Tim would develop cancer if he used tobacco, so she promised Tim $10,000 if he would refrain from any use of tobacco until age 30. Tim did so, but his mother refused to give him the $10,000. Does Tim have a legal right to the $10,000? Explain.

44) Teller agreed to buy a stolen piano from Luthor, but failed to live up to his part of the deal.

Does Luthor have a legitimate cause of action against Teller? Explain.

45) Andrew's neighbor, Charles, is selling drugs from his home. Since Andrew is concerned about the well-being of his own family, he offers to pay Charles $60,000 to stop selling drugs.

Charles stops, but Andrew refuses to pay. Can Charles successfully sue Andrew to force him to pay the $60,000? Explain.

46) Sarah promises to give $10,000 for the construction of Save the Butterflies, a local charity, and is publicly honored as a "golden" donor of Save the Butterflies, by putting her name on the "Wall of Honor." Sarah later does not pay the $10,000. Discuss the ways in which Save the Butterflies may legally collect the $10,000 from Sarah.

47) Pantia agreed to write software codes for "a reasonable price" for a video game being produced by Mindbinder, Inc. When Pantia submitted a bill for $5,000, Mindbinder believed that a reasonable amount for the work was $3,000 and sent Pantia a check for that amount with a notation on the check, "Payment in full." Discuss the case.

48) Mitchell owed the National Medical Federation $250 for books he had purchased from that organization. He sent the federation a check for $100, writing on the check, "In full payment for the books I purchased." The federation cashed the check, but continued to demand the $150 balance. Discuss if the federation was within its rights to do so and whether the federation's actions reflect an accord and satisfaction agreement with Mitchell.

49) Sergie orally agrees to pay Zenith Finance Co. a $300 loan debt that was discharged in bankruptcy after Zenith told Sergie that repaying the debt would help him "rebuild his credit", since Zenith would report his payments to credit reporting agencies. Discuss the case.

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50) Jackie borrowed $1,000 from Uncle John in 1975, with repayment due in 1977. Jackie never repays the loan, and Uncle John never attempts to collect it. In 2004, Jackie writes Uncle John a letter stating that she is sorry that she did not repay the debt and encloses a check for $100 toward repayment. Uncle John cashes the check. He dies of a heart attack one week later. Uncle John's heirs find the letter and sue Jackie to collect the remaining $900 balance. Analyze the case.

51) Matrix, Inc. is considering opening a restaurant in Smallville and has located a prime vacant land location that is for sale. Matrix wants to do some market research and obtain financing for construction before purchasing the land, but is concerned that a competitor, Zion, Inc., will purchase the land if Matrix does not act immediately. What legal steps should Matrix take, short of purchasing the land now, to prevent Zion from acting before them? Explain.

52) Mullroy has complained to the local police about the vandalism in his neighborhood.

However, the police have taken little interest in curbing the vandalism, much to Mullroy's disappointment. Determined to resolve the problem, Mullroy invites the local sheriff to his daughter's birthday party and offers him free weekend dinners at Mullroy's family restaurant if the sheriff promises to look into the vandalism problem. Discuss the nature of consideration and contract in this case.

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Business Law with UCC Applications, 15e (Sukys) Chapter 10 Capacity and Legality: The Final Elements 1) In all jurisdictions, minors who become emancipated are not responsible for their own contracts, unless a statutory period of reaffirmation has elapsed.

2) Under the law, capacity is considered a voidable presumption.

3) Generally, parents are liable for a contract executed by a minor unless they cosign the agreements.

4) In one case, a court held that funeral expenses were necessaries and the parents were responsible for those costs.

5) Juliana is a minor who misrepresents her age when signing a contract. In most states, Juliana waives her legal right to disaffirm her contract with JoseLuis, the other party.

6) In the case of Sidco Paper Co v. Eugene Aaron, Aaron was a minor who was hired as an apprentice by a binding written contract.

7) Carl is tall and looks like he is 21 years old. Carl lies about his age to purchase a home entertainment system for $1,000. In most states, Carl may not disaffirm his purchase and does not have to return the entertainment system.

8) Ratification is an emancipated minor's willingness to deny contractual obligation.

9) Even though emancipated, Jason, who was a minor when he signed a contract at the age of 17, still has the unqualified right to disaffirm a contract when he turns 21.

10) Mandy suffers from Alzheimer's and has been quite forgetful and disoriented for at least one year. Accordingly, under the Restatement of Contracts, any agreement she signed during the past 12 months is automatically void because she cannot act in a reasonable manner.

11) In the case Newsome v. Tibbs, Newsome had to sign an exculpatory agreement that would hold Tibbs 'blameless during the actual tear down' of the high-rise buildings, and up to 30 days afterwards.

12) A restrictive employment covenant limits a worker's employment options during her employment at her present job.

13) Special laws, called "local option" statutes, allow small loan companies, pawn shops, and other lending agencies that accept high-risk applicants for credit to charge a higher rate of interest.

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14) Melody, who lives in Texas, agrees to "sell" title of all of her assets to her cousin, Erin, for $1.00. The reason Melody sold her possessions was to hide them from creditors. The transfer of assets is an illegal exercise of Melody's ownership rights under the Texas law prohibiting unconscionable contracts.

15) An exculpatory clause in a contract for the sale of a business will be enforced if it is reasonable in time and geographical area.

16) Noncompete agreements are usually needed to protect trade secrets.

17) Under the UCC, the ownership rights of individuals who buy goods from minors are void, but they can transfer their otherwise void rights to an innocent third-party purchaser of those goods.

18) By signing a nondisclosure agreement, an employee can be deprived of future employment within a 50-mile radius of where he currently works.

19) In a case where both parties are guilty of premeditation of a crime, in pari delicto may be applied when one party is not aware that a law is being broken and there is no intent to do a wrong.

20) If the legal part of a contract can be removed from the illegal part, without changing the essential nature of the contract, the court will enforce both parts.

21) In some jurisdictions, minors who become ________ cannot void a contract, despite their apparent minority.

A) ratified B) emancipated C) abandoned D) disaffirmed 22) ________ that have not been fully performed by both parties, may be repudiated by a minor at any time.

A) Contracts for necessaries B) In pari delicto contracts C) Executed contracts D) Executory contracts 23) Maria, aged 16, from a wealthy family, purchases designer jeans on credit for $300. The true fair market value for the jeans is $75. Which of the following is true of this case?

A) Maria can disaffirm the purchase because designer jeans are not a necessary.

B) She cannot disaffirm, because her family is wealthy.

C) She is liable to pay $300, as per contract.

D) She may not disaffirm and is liable for $75.

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24) The willingness of an emancipated minor to abide by contractual obligations is: A) ratification.

B) emancipation.

C) rescission.

D) devolution.

25) Ron, aged 20 years and 4 months, purchases a car from Slim's Auto Sales for $2,000.

However, Ron returns the car to Slim Auto Sales telling them he does not feel this is the right car for him and that he wants his money back. At the time of disaffirmance, Ron was 21, the age at which he is considered an adult in his jurisdiction. Will this disaffirmance be enforceable in the court of law?

A) No, since Ron did not give Slim a signed disaffirmance.

B) Yes, since Ron disaffirmed during the year he reached his adulthood.

C) No, since the disaffirmance must be written when the price exceeds $500.

D) Yes, since the courts and laws always rule in the favor of minors.

26) Which of the following is a rule recognized by the Restatement of Contracts?

A) The incompetent party must return all consideration even if the other party knew about the person's impairment.

B) If a contract is executed, the impaired party can void the contract without returning the other party to the place he/she was in before.

C) A person's contractual obligations are partially voidable depending upon the severity of his/her mental and physical health.

D) A person's contractual obligations may be voidable if that person suffers from a mental impairment that prevents him or her from acting in a reasonable manner.

27) When Julie, aged 27, took flu medication, she became very light-headed and confused. Alice, taking advantage of the situation, persuaded Julie to sell her watch that was worth $1,000 to her for $100. Julie later realized what Alice did and decided to take legal action. Which of the following is true as per contract laws?

A) Julie cannot sue Alice since she, as an adult, voluntarily sold the watch.

B) Julie has the right to get her watch back without returning the $100.

C) Alice is allowed to keep the watch and Julie should return the $100.

D) Alice should return the watch and Julie should return the $100.

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28) Lizzie works as an entertainment journalist for a tabloid newspaper. The editor of a competing tabloid tells her that if she produces a story defaming a television celebrity, she will be given a job at the competing tabloid. After Lizzie produces the article and publishes it in the tabloid she works for, the competing tabloid refuses to hire her. Lizzie wants to bring a breach of contract lawsuit against the competing tabloid for not hiring her. Which of the following is true of this case?

A) Lizzie has committed a crime and hence, cannot file a lawsuit.

B) Lizzie can bring forth a lawsuit, as her contract with the competing tabloid contained all five elements.

C) Lizzie's contract has been executed; hence, the court is likely to award her damages for breach of contract.

D) Lizzie has committed a tort and her contract with the competing tabloid will not be upheld in the court.

29) Which of the following contracts are not voidable by minors at their option?

A) Executory contracts B) Contracts for necessaries C) Contracts with banks for educational loans D) Contract to purchase land 30) The illegal practice of charging more than the amount of interest allowed by law is called: A) libel.

B) in pari delicto.

C) slander.

D) usury.

31) Brandon, a recent law school graduate, says he will provide affordable legal services to anyone who needs help. Although his bar exam results are not out yet, Brandon is certain that he has passed. Legally, are his clients required to pay for his legal services before he has received his license?

A) Yes, a court will require that his clients pay in full for any legal services they receive from him.

B) Yes, but if Brandon fails the exam, he must return all consideration to the appropriate clients.

C) No, since it is against the law for anyone without the required state license to offer legal advice.

D) No, because Brandon has acted incompetently.

32) All lawn maintenance businesses must pay the state a $200 annual license fee with no other legal regulations. ABC Yards, Inc. fails to pay the license fee. Which of the following is true in case ABC Yards has failed to acquire a license because of the failure to pay the $200?

A) The lack of a license will not necessarily make a contract void.

B) The lack of a license makes the contracts void under contract laws.

C) All contracts of ABC are voidable, due to their failure to obey the regulation.

D) Only executory contracts by ABC will be voidable.

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33) In a locality that restricts business on Sunday, which of the following is usually true regarding these restrictive laws?

A) They invalidate all agreements made on Sunday.

B) They validate agreements made on Sunday for delivery of goods on a business day.

C) They validate agreements made on Sunday if the business in question has closed on Sunday.

D) They validate agreements made on Sunday requiring performance on a Sunday.

34) Jeanie, a prosecutor, agrees with Martin not to prosecute Martin's son for drunk driving in exchange for Martin employing her in his law firm two years after the drunken driving charge is dismissed. This is a(n) ________ that is ________.

A) nondisclosure agreement; void B) usurious agreement; voidable C) agreement to escape liability; voidable D) agreement to obstruct justice; void 35) Rodney parks his car at Car Stack Parking Lot, Inc. On the back of the parking stub provided to Rodney, there is a statement typed in large letters: "NOT RESPONSIBLE FOR DAMAGE TO CARS." When Rodney returns, his car has been dented by the Car Stack attendant who was attempting to park more cars on the lot. According to law, the statement on the stub is an exculpatory agreement that is: A) enforceable against Rodney regardless of circumstances.

B) enforceable against Rodney only if he had the opportunity to park elsewhere.

C) not enforceable against Rodney because he instructed the attendant to be careful around his car.

D) not enforceable against Rodney because it is contrary to public policy.

36) Eve, an experienced automotive engineer, signs a ________ agreement with her employer, Environmental Auto Co., that she will never work in the auto industry after she leaves employment with Environmental. A court considering this agreement will ________.

A) noncompete; declare it void as geographical area is not specified B) restrictive employment; enforce the agreement in any event C) noncompete; only enforce the agreement if it resulted from a bargained-for exchange D) noncompete; enforce the agreement only if such agreements are customary in the auto industry 37) Which of the following is true of a nondisclosure agreement?

A) It requires employees to promise not to reveal any confidential trade secrets, should they leave their present employment.

B) It limits a worker's employment options after leaving his or her present job in order to protect the present employer's confidential matters.

C) It restricts the seller of a business to enter the same type of business during a reasonable time and within a reasonable geographical area.

D) It states that the party who wrote the contract will not be liable for any economic loss or physical injury, even if that party caused the loss or injury.

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38) When both parties to an illegal agreement are equally wrong in the knowledge of the operation and effect of their contract, they have formed a(n) ________ contract.

A) restrictive B) in pari delicto C) usurious D) nondisclosure 39) After betting $4 million on the outcome of a professional baseball game, Jake wants to make sure that he does not lose his money. He enters an agreement with a team's starting pitcher. The pitcher agrees to throw "fat" home run balls to the other team's batters in exchange for $75,000 from Jake. The pitcher gives up 10 home runs in the first three innings and his team loses the game. Jake refuses to pay him the $75,000 they agreed upon in the contract. If the pitcher sues Jake for breach of contract, which of the following is most likely to be the court's ruling?

A) The contract is divisible and the court will award the pitcher damages for the legal sections of the agreement.

B) The parties are in pari delicto and the court will refuse to award the pitcher any damages.

C) The pitcher can be declared less guilty of premeditation and will be awarded the damages.

D) The pitcher maintained his promise as per the contract and hence, Jake will have to award the consideration.

40) Which of the following is true about the legality of an agreement?

A) An agreement is not divisible if the legal part of a contract can be removed from the illegal part without changing the nature of the contract.

B) The court will not enforce any agreement or contract that is either fully or partially illegal.

C) An agreement can sometimes be partly legal and partly illegal.

D) A court has to enforce both the illegal and the legal parts of the contract.

41) Larry, 17 years old, bought a moped from the RU-Ready-2-Drive Used Moped lot. The next day, he accidentally ran the moped into a telephone pole and seriously damaged the vehicle.

Larry transported the damaged vehicle to RU-Ready-2-Drive and demanded a return on his money. Must RU-Ready-2-Drive comply with his request? Explain.

42) Susan, aged 16, owns a rare violin. Eric knows Susan is 16 and contracts with Susan that she will sell him the violin for $1,000 with delivery to take place when Susan is an adult. When Susan seeks to disaffirm this contract, Erin asserts that since delivery is to occur after Susan becomes an adult, she may not disaffirm. Analyze the case.

43) Gail buys a car at the age of 17 and makes regular monthly payments until six months after her 18th birthday, when the car is totaled in a wreck. Gail wants to disaffirm the car purchase.

The age of adulthood in Gail's state is 18. Discuss.

44) Alex, aged 30, appeared to be normal, but suffered from the secret delusion that he was a spy for the U.S. government on the trail of terrorists. Alex purchased a new car from Marvel Motors, Inc. and drove it so recklessly "chasing terrorists" that the engine burned up. Alex, not under medical treatment, seeks to rescind the car purchase and have his money returned. Analyze the appropriate solution to this case.

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45) Before Kramer entered a detoxification center for his alcoholism, he went to an electronics store and spent $500 on a new, nonrefundable television. He had several drinks before he went into the store, but was not intoxicated. After he was released from the costly center three months later, Kramer decided to return the television. He believed he could disaffirm the contract because he was drinking when he made the purchase. Analyze the case.

46) Reed needed expensive medical treatment for the injuries he suffered in a fire that ravaged his home. Lacking medical insurance and unable to obtain a bank loan, Reed turned to Lance, a local person known for his gambling prowess. Lance offered Reed $15,000 if Reed would repay him $23,000 in 36 monthly installments of $521 each. According to the laws in Reed's state, the maximum amount of annual interest that can be charged on loans is 20%. Explain whether Lance's loan was legal.

47) Ron, a fast-talking, used car salesperson, convinced Maureen, an elderly semi-invalid, to purchase an automobile worth $500 for $12,000. When Maureen later refused to pick up the car or pay the bill, the used car dealer sued her. Discuss the case.

48) Irene buys Shawn's second-hand furniture, and they sign a contract on a Sunday. However, the contract mentions that Irene will collect the furniture on Tuesday and will pay the consideration to Shawn at that time. Analyze the legality of the contract, considering that the state where Irene and Shawn live is not very restrictive about prohibiting all business activity on Sundays.

49) Amanda agrees to pay a county official $20,000 personally in exchange for his using public funds to build a public one-half-mile all-weather road into her farm, so that she can attract buyers for her farm. The county official takes the $20,000, but never builds the road. Discuss the enforceability of this agreement.

50) Suds, Inc., a local self-service laundry, has a large sign on the inside wall reading: "NOT RESPONSIBLE FOR ANY DAMAGE TO OR LOSS OF CLOTHING." Georgia puts her damp clothes in a dryer and within three minutes, the clothes are burning due to an excessively hot dryer. Suds had failed to perform maintenance on the dryer according to the manufacturer's instructions. Discuss in detail Georgia's ability to recover from Suds for her burnt clothing.

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Business Law with UCC Applications, 15e (Sukys) Chapter 11 Written Contracts and Cyber-Commerce 1) In the Opening Case Round 1, Sole Survivor claimed it could vacate Eastland Mall because it had been constructively evicted.

2) If the terms of a contract make it unlikely that the contract can be completed within one year, the contract must be in writing to be enforceable under the Statute of Frauds.

3) Sean gives an oral promise to Oscar to buy Oscar's old house, but only offers to keep the promise enforceable for 30 days. Oscar, relying on Sean's promise, puts on a new roof and paints it. Twenty days later, Sean changes his mind and says he's no longer interested. Oscar can enforce Sean's promise.

4) Responding to a Craigslist ad, Jennifer, who is a wholesaler of furniture, leaves a voicemail for James, a small custom-made furniture maker, offering to purchase his custom made king-size oak bed frame for $650, even though it was advertised at $1,150. James does not respond.

Jennifer has an enforceable contract.

5) The administrator of an estate is a person named by the court, if none is named in a will.

6) When a personal gain to the guarantor is involved, the primary objective test requires that promise to be in writing for the contract to be enforceable.

7) The main purpose construction rule is the most fundamental guideline for the interpretation of written contracts.

8) Under the best evidence rule, evidence of oral statements made before signing a written agreement is admissible in court to change the terms of a written agreement.

9) Under the equal dignities rule, oral evidence cannot be used to clarify terms that are obscure in a written contract.

10) Charles only has a photocopy of his written contract with Jenny, and not the original. Under the best evidence rule, since Charles only has a photocopy, it is the 'best evidence' the court can accept in his trial.

11) Judson Law Firm agrees to hire Francisco after he passes the Texas bar exam. The offer has a concurrent condition. The "as is" offer is an enforceable contract.

12) Jane (seller) and Joe (buyer) enter into an oral contract for the sale of land. Joe begins to add significant improvements to the land and house and outbuildings. Jane changes her mind and revokes the sales contract. According to the Statute of Frauds, the contract between Jane and Joe is enforceable because of equitable estoppel.

13) Under contract law, facsimile signatures are always as valid as original signatures.

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14) Alice uses an electronic "shopping cart" on a popular website to purchase many items. When she clicks "Checkout" she is creating an enforceable contract called a 'click-on agreement.'

15) A notary is not required to read the document when providing acknowledgment of a signature.

16) The provisions of Article 2 of the Uniform Commercial Code apply when a cyber-agreement deals with the sale of goods.

17) The standard construction rule directs the court to determine the principal objective of the parties in the making of the contract.

18) Courts have held that terms hidden behind a blue "hyperlink" are roughly analogous to the pages of a long and drawn-out multipage paper contract.

19) The Fair and Accurate Credit Transactions Act (FACT Act) attempts to address the identity theft epidemic.

20) Oral contracts for the sale of goods of $500 or more will be enforced in situations involving admissions in court.

21) The Statute of Frauds: ________.

A) states that all contracts have to be in writing to be enforceable in the court of law B) decrees oral contracts to be invalid and hence not upheld or enforceable by law C) states that certain types of contracts have to be in writing to be enforceable D) maintains that agreements can be oral while contracts have to be in the written format 22) Star Software Systems and Henry orally agree for Henry to write special accounting software. This software usually takes three years to complete, but can be done sooner. Does Henry have an enforceable legal agreement with Star?

A) Yes, the agreement is enforceable because Henry could possibly complete writing the software within a year.

B) No, the agreement is unenforceable because it is not written and signed.

C) Yes, the agreement is enforceable, but only to the extent of work Henry completes within the first year of the contract.

D) No, the agreement is unenforceable since the contract involves a tangible work product.

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23) Donna entered into an oral contract with Ava to purchase a house from Ava, with $500 per month payments for the next 10 years. Donna moved into the house, remodeled it, and did extensive repairs. At the end of 10 years, Ava refused to convey title to the house to Donna and produced evidence at the resulting trial that the fair market rental value for the house averaged $800 per month over the 10-year period. Does Donna have an enforceable contract?

A) Yes, Donna is entitled to the ownership of the house because oral contracts for the sale of land are enforceable under the Statute of Frauds.

B) No, Donna cannot claim ownership of the house since there was no written contract with Ava. C) Yes, Donna can claim ownership of the house based on equitable estoppel.

D) No, Donna is not entitled to the ownership of the house since she was paying below the fair value.

24) Uncle Rodrick was deeply in debt when he died. His niece, Evangeline, became the administrator of his estate. She orally promised Rodrick's creditors that she would personally pay his debts if they would not publicize the fact that Rodrick died in debt. When Evangeline was unable to pay the debts, the creditors sued her. Will the creditors be legally able to collect from Evangeline?

A) Yes, since there was a bargained-for exchange.

B) No, since Evangeline was not Rodrick's child.

C) Yes, since Evangeline made a guaranty of payment.

D) No, since Evangeline's promise was not in writing and signed.

25) Sagan is borrowing money from Big Bank. His friend Leda, who works for Graille Systems, signs the loan agreement promising to pay the debt if Sagan does not. In this scenario, ________ is the obligee, and ________ obligor.

A) Sagan, Big Bank B) Leda, Big Bank C) Graille Systems, Sagan D) Big Bank, Sagan 26) Gabriel applies for a home loan. Mark signs the agreement promising to pay off the debt in case Gabriel fails to do so. In this case Mark is: A) the guarantor.

B) the obligee.

C) the obligor.

D) the assignor.

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27) Matrix, Inc. is the general contractor of a large commercial building project. Matrix subcontracted with Acme Flooring, Inc. to have flooring installed throughout the building. When Matrix failed to make payments to Acme as agreed, Acme stopped working. Commercial Bank, the lender for the project, orally promised Acme that Commercial would pay whatever Matrix failed to pay Acme if Acme would resume work. Acme finished the flooring, but was still not paid. Which of the following is true under the Statute of Frauds?

A) According to the primary objective test, Commercial Bank is not obliged to pay Acme as the promise must be written and signed.

B) According to the primary objective test, since Commercial Bank's promise enhanced its mortgage interest, it is liable for payment to Acme.

C) According to the main purpose test, Commercial Bank is not obliged to pay to Acme since Matrix was not a party to its promise.

D) According to the primary objective test, since Commercial Bank's promise did not involve the actual lending of money, it is not liable to Acme.

28) ________ contracts for the sale of goods of $500 or more are ________ if the contract ________.

A) Oral, enforceable, involves specially manufactured goods that cannot be resold easily B) Oral, not enforceable, is an executed agreement C) Written, not enforceable, involves admissions in court D) Electronic, not enforceable, is a written memorandum 29) Charles orally promises Holly that he will marry her. He also states that if they ever get divorced, then he will transfer one-half of his assets to Holly. They marry and divorce within a year. Which of the following is true of Charles's promise to Holly?

A) The promise qualifies as an enforceable oral contract.

B) The promise is legally enforceable only if it does not involve the transfer of land.

C) The promise is not legally enforceable unless Holly proves that the promise influenced her decision to marry him.

D) The promise is not legally enforceable because it was not written.

30) Which of the following contains all the elements of a written agreement that can be enforceable under law?

A) "Henry Shay agrees to purchase hand-knit sweaters for $45 apiece. Signed, Henry Shay."

B) "Silvie Nader and Henry Shay are parties involved in this contract for the purchase of handknit sweaters on Wednesday, June 17. Signed, Henry Shay and Silvie Nader."

C) "Silvie agrees to mail six hand-knit sweaters, at $45 apiece, to the house on Wednesday, June 17. Signed, Silvie Nader."

D) "Full Agreement by Henry Shay and Silvie Nader. Henry agrees to purchase from Silvie six of Silvie's hand-knit sweaters at $45 each. Signed, Silvie Nader, and Henry Shay."

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31) According to the ________, whenever an ambiguous term, clause, or line is found in a prewritten contract, that ambiguity is interpreted against the party who wrote the contract.

A) standard construction rule B) parol evidence rule C) best evidence rule D) equal dignities rule 32) Catherine and Jacob have a written contract to buy and sell "100 cases of widgets." The 100 cases is a typo, so after signing the contract they orally agree to modify the contract to "1,000 cases of widgets." If later the parties are in litigation concerning the amount of widgets involved in the contract, can evidence of the oral change be introduced into evidence?

A) No, since this violates the parol evidence rule.

B) Yes, since both signed the original contract.

C) Yes, since this is an exception to the parol evidence rule.

D) No, since this violates the best evidence rule.

33) In 2012, Alder Inc. (seller) and Dell, Inc. (buyer) signed a long-term sales contract that provided for cashier's check payments to be made by Dell on the first of each month. In 2015, Dell began using a wire transfer payment method, and now Alder asserts that Dell is in breach of contract. Which of the following is true?

A) Dell cannot introduce oral evidence in court since it violates the parol evidence rule.

B) Dell can introduce evidence of the payment under the exception to the parol evidence rule.

C) Dell violated the best evidence rule, hence cannot produce evidence in court.

D) Dell can exclude parol evidence because wire transfers and cashier's checks are identical.

34) Willy and Brogan, aged 16, enter into a written contract in which Brogan will sell his horse to Willy for $250. Before the sale is finalized, Brogan seeks to be released from the contract and wants to offer in-court oral testimony concerning his age. The admission of Brogan's testimony is most likely governed by the ________ rule.

A) standard construction B) best evidence C) equal dignities D) parol evidence 35) An exception to the ________ rule states that if a written agreement depends on some event before it becomes enforceable, ________ evidence may be offered regarding that ________.

A) parol evidence, written, condition precedent.

B) standard construction, written, condition precedent.

C) best Evidence, oral, condition precedent.

D) parol evidence, oral, condition precedent.

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36) Under the ________ rule, the courts generally accept into evidence only the original of a writing, not a copy.

A) best evidence B) parol evidence C) standard construction D) equal dignities 37) Vega appoints Ancel, a real estate broker, to negotiate the sale of her home. The ________ rule requires that this agreement be in writing and signed to be enforceable.

A) parol evidence B) best evidence C) standard construction D) equal dignities 38) Celebrity Shelly Dunkle, wishing to spend a few undisturbed days by herself, checks into a resort hotel. She reserves a suite under the name of Barbi and stamps the initials B.I. into the hotel register. She also orders room service and signs all hotel bills with those same initials.

Which of the following statements is true?

A) Because Shelly has not signed her real initials, she cannot be held liable for the cost of the suite and all other bills she rings up under the initials B.I. B) Because Shelly has not signed her real initials, the hotel management cannot prove that any contractual agreement took place between them.

C) Because the initials B.I. constitute Shelly's legal signature, she is legally obligated to pay for the cost of the suite as well as for other bills that she signs using those initials.

D) Because Shelly did not sign her real name both parties must split payments for all bills signed with the initials B.I. 39) Which of the following is true of "click" fraud?

A) The click-on process functions only in online contracts and not for online advertisements.

B) Clicks are proven ways to gauge interest in the advertiser's service or product.

C) A problem that arises in this area is verifying the identity of the "clicker."

D) The click-on process functions only for online advertisements and not for online contracts.

40) The Fair and Accurate Credit Transactions Act: A) establishes the same type of legal parity between electronic records and paper records.

B) is a federal act designed to deal with problems associated with cyber-commerce.

C) prohibits merchants from using credit card receipts that show anything other than the last five credit card numbers.

D) is a federal amendment to the Uniform Electronic Transactions Act. 41) On September 1, Isabel contracts with Ned to sing at Ned's restaurant starting on October 1 and ending on October 15 of the following year. Discuss if this contract must be written and signed to be legally enforceable.

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42) In June, the Daniels contracted with Twining to build a stone path leading from the road to their vacation home. They asked him to complete the job within 11 months. Explain whether Twining and the Daniels must enter into a written agreement for such a contract to be enforceable.

43) On September 1st, Wild Willy's Club orally gives an order to T-Shirts R Us Inc. for T-shirts worth $600. The T-shirts have the date and location of Wild Willy's annual Christmas party on December 15th printed on them. In late October, Wild Willy's calls T-Shirts to cancel the order.

T-Shirts has already processed the order and the T-shirts are ready to be shipped. Discuss in detail whether or not this oral order is enforceable once the T-shirts have been made.

44) Jones orally agreed to sell his iPad Air to McKay for $475. He tried later to back out of the deal on the grounds that the oral agreement was unenforceable. Discuss the case.

45) Emilio takes his unconscious friend, Todd, to the hospital. However, the hospital will admit Todd only if someone can promise to pay Todd's medical bills. Emilio orally promises to do so, and the hospital admits Todd. Discuss in detail whether or not this statement is legally binding on Emilio and/or Todd.

46) Joseph dies with no assets, but over $100,000 in personal debt. Joseph's daughter Samantha, who is very wealthy, is made executor of his estate. Joseph's creditors assert that Samantha must personally pay Joseph's debts because she is wealthy, Joseph's daughter, and now the executor of his estate. Is Samantha liable?

47) Late one evening, Charles and Henry are discussing the purchase and sale of $2,500 of coffee shop equipment after an entrepreneurship class. They are in the classroom when Henry writes their agreement on the classroom whiteboard and both Henry and Charles sign it on the whiteboard. Discuss if this whiteboard document is sufficient to provide a binding written agreement.

48) Bernadette contracts in writing to sell Emily a flatbed trailer so that Emily's son can use the trailer as the base of a homecoming parade float on October 17. Bernadette knows all about the parade, but the written contract only requires Bernadette to deliver the trailer "in October" and Bernadette uses the trailer for her projects until October 20 when she tenders delivery to Emily.

Emily refuses the trailer and refuses to pay the contract price since her son no longer needs it.

Discuss in detail what evidence is admissible in a suit by Bernadette against Emily for breach of contract.

49) McDougal Construction and Espinosa entered a contract to build the latter a two-story house.

However, after the company began its construction, Espinosa decided that she wanted a terrace garden, making the house a three-story. McDougal indicated the additional costs to Espinosa and completed the job including the terrace garden - neither of which was in writing or included in the original contract. Espinosa paid McDougal the original amount, but did not pay the extra amount for the third story. Discuss if the court will admit an oral testimony of the McDougal's to the original contract.

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50) Kay, who is quite elderly, uses a star (*) as her signature. In a written contract, Kay's name is written, but on the signature line for Kay's name only the * that Kay made appears. Discuss whether or not the * binds Kay to the contract.

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Business Law with UCC Applications, 15e (Sukys) Chapter 12 Third Parties, Discharge, and Remedies 1) A done beneficiary is an individual who provides consideration and is generally one of the contracting parties.

2) If Velcrom is a creditor beneficiary of Mabela's Sporting Goods, Inc., Velcrom has no direct right to sue Mabela's.

3) An intended beneficiary is an outside party that can legally enforce the contract against all, except for those in privity of contract.

4) A transfer of a contract right is called an assignment.

5) If Jackson transfers his business accounts receivable in the general course of business to Friendly Finance Company, Friendly would be considered the assignor.

6) If, for no consideration, Jackson transfers his accounts receivable to Friendly Finance Company to hide them from his creditors, Jackson's creditors would be able to sue Friendly under the fraudulent conveyance theory.

7) When no consideration is given for an assignment, creditors of the assignor may have the assignment rescinded on the grounds that it violates the equal dignities rule.

8) Whether the assignee gives notice of an assignment to the obligor, the obligor is generally not excused from performing under the contract.

9) In a majority of states, if an assignor makes a subsequent assignment to another assignee, the assignee with the superior rights usually prevails in court.

10) If there is no supporting consideration in the assignment, the assignee may repudiate the assignment at any time before its execution.

11) Based on a written mortgage, Jackie's payment to Commerce Bank was due on June 1. On May 31, Jackie received a phone call that her mortgage had been assigned to Brown Investments.

Under the equal dignities rule, Jackie still has a legal obligation to perform on time.

12) Miko and Gina enter into a written contract. If Miko assigns her part of the agreement to Teresa and Teresa tells Gina of the assignment, Gina is only bound by express warranties made to Teresa under the terms and conditions of the assignment.

13) Dr. Ben is an experienced plastic surgeon who has been in medical practice for nearly 30 years. Dr. Ben delegates his scheduled surgery on Samuel to Dr. Sue, who is a family physician "on call" while Dr. Ben is away on a salmon-fishing trip in Alaska. The delegation is legally valid.

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14) If the contract includes a condition that "time is of the essence," the time period will be a reasonable period of time.

15) Satisfactory performance exists when the parties' personal tastes have determined that the contracting parties have performed their contractual duties according to the agreement.

16) Promising to pay when goods are delivered is an example of substantial performance.

17) Stella contracts to purchase Wilma's horse, Running Cloud, for $10,000. The horse dies soon after the contract is signed, but prior to Stella taking possession of the horse. Wilma can sue Stella for specific performance.

18) The frustration of purpose doctrine applies when a party to a contract expresses or clearly implies an intention not to perform to contract, even before being required to act.

19) Quantum meruit damages are court-created damages awarded to parties who have experienced an injury to their legal rights, but no actual loss.

20) Under modern law, court-issued injunctions are typically temporary, and can never be permanent.

21) Claudia contracts with Friendly Paving Co. to install a new driveway. To pay for this work, Claudia transfers to Friendly Paving Co. her right to receive payment from Clifford for a loan she made him. Friendly Paving Co. is now a(n): A) creditor beneficiary.

B) donee beneficiary.

C) executor.

D) fiduciary.

22) Which of the following beneficiaries has no enforceable legal rights?

A) Donee beneficiary B) Incidental beneficiary C) Creditor beneficiary D) Insurance beneficiary 23) John, a highly skilled mechanic specializing in Jabooti motorcycles, agrees to repair Gladys's Jabooti motorcycle, but when he becomes ill, he transfers that responsibility to Clark, a friend of his. The transfer to Clark is called a(n): A) assignment.

B) delegation.

C) novation.

D) conveyance.

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24) Morey and Sheryl enter into a contract in which Morey agrees to pay Sheryl $40 to collect his mail while he is on a month-long vacation. Sheryl then delegates the duty to her son, Greg. In this delegation, Sheryl is the: A) assignor.

B) obligor.

C) assignee.

D) obligee.

25) Jo is duly notified that her mortgage with Fund All Savings has been transferred to Big Loan Co. and that she should, henceforth, pay Big Loan Co. Jo continues to pay Fund All Savings and Big Loan Co. sues Jo for nonpayment. Which of the following is most likely to be the court's judgment?

A) Jo is not liable to Big Loan Co., since she has already paid to Fund All Savings.

B) Jo is liable to Fund All Savings and to Big Loan Co., since her mortgage has been transferred.

C) Jo is liable to Fund All Savings, since her mortgage was processed by them.

D) Jo is liable to Big Loan Co., since she received a notice from them about the assignment.

26) Aspen assigns his right to receive payment from Donna to Henry. Later, Aspen assigns this same right to Doris. Doris gives notice to Donna on May 1, and Henry gives notice to Donna on May 2. Which of the following is most likely to be the court's ruling?

A) Since Henry was the first assignee, he will be given the superior right to claim Aspen's benefits.

B) Since Doris was the first to notify Donna, she will be given the right to claim the assigned benefits.

C) Henry and Doris are joint assignees and will be given equal rights to claim the assigned benefits from Donna.

D) Donna will be required to pay to Aspen, who in turn will be asked to make respective payments to Doris and Henry.

27) Henry borrows money from Commerce Bank to purchase a house. However, he moves to another city to attend graduate school and sells the house to Maria. Henry wants to be released from his payment obligations to Commerce Bank. Which of the following would release Henry from his liability to Commerce Bank?

A) A delegation of the payment obligation by Henry to Maria will release Henry from liability.

B) The sale of the house by Henry to Maria involuntarily releases his payment obligation.

C) A delegation of the payment obligation to Maria along with a written notice to Commerce Bank can release Henry from the liability.

D) A novation in which Commerce Bank agrees to substitute Maria for Henry will release Henry.

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28) Which of the following is true of "time for performance"?

A) When there is nothing to indicate in the contract that time is of importance, the court will allow additional time.

B) Including the phrase "time is of the essence" in a written contract has no effect on the contract.

C) When the time for performance is not stated in the contract, the contract must be performed within a reasonable time.

D) When there is something special about the contract that indicates time is essential, additional time is allowed.

29) Satisfactory performance: A) is either an express or implied condition of every contract.

B) exists when parties fully accomplish every term, condition, and promise to which they agreed.

C) exists when a party executes all the terms, except minor details that do not affect the contract's real intent.

D) terminates an agreement, freeing the parties of any further obligation or liability.

30) ________ performance occurs when a party, in good faith, executes all promised terms and conditions with the exception of minor details that do not affect the real intent of their agreement.

A) Complete B) Satisfactory C) Partial D) Substantial 31) Joe pays for his food at the drive-thru window as he receives it. The payment and the receipt of the food are ________ conditions.

A) precedent B) concurrent C) subsequent D) spontaneous 32) ________ requires that both the parties return to the other any consideration already received or pay for any services or materials already rendered.

A) Termination by waiver B) Novation C) Mutual rescission D) General release 33) A(n) ________ is a new agreement resulting from a bona fide dispute between the parties as to the terms of their original agreement.

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34) ________ occurs when a party to a contract either expresses or clearly implies an intention not to perform the contract, even before being required to act.

A) Frustration-of-purpose B) Abandonment of contractual obligations C) Commercial impracticability D) Anticipatory breach 35) Better Houses, Inc. has been contracted to build an addition on the Joyners' house. It built half of the addition and then unexpectedly announced that it was not going to finish the job.

Better Houses' decision to stop the job is called a(n): A) constructive breach of contract.

B) substantial performance.

C) abandonment of contractual obligations.

D) repudiation of contract.

36) Which of the following is true of consequential damages?

A) They result from a breach due to special circumstances that exist with a particular contract.

B) They are the sum of money equal to the real financial loss suffered by the injured party.

C) They cover any expenses paid out by the innocent party to prevent further loss.

D) They are awarded as a measure of punishment for the defendant's wrongful acts.

37) Time Zone sells Gary an iWatch for $4,000 by representing it has a real gold case and watch band. Later, Gary finds that the iWatch case and band are just polished with golden color, and the watch could be bought in the local store for $100. Gary can sue Time Zone for: A) consequential damages.

B) exemplary damages.

C) nominal damages.

D) speculative damages.

38) Tom and Nancy enter into a written contract for the sale of a dollhouse that Tom will custom-make for Nancy. In the contract, Nancy agrees to pay $350 if she breaks the contract.

This sum of money is known as: A) mitigation of damages.

B) speculative damages.

C) equitable remedy.

D) liquidated damages.

39) ________ occurs when one party makes false statements or commits some sort of false action that causes another party to rely on those falsehoods and then experience an injury or loss as a result.

A) Abandonment of contractual obligation B) Fraudulent misrepresentation C) Anticipatory breach D) Constructive breach of contract

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40) Which of the following is an equitable remedy under contract law?

A) Injunction B) Monetary damages C) Human servitude D) Specific damages 41) The City of Newburyport contracted with Ace Paint Contractors for the repainting of a steel bridge. The contract specifically called for the use of a particular brand of paint called Nopeel Paint. It was later discovered that Ace used another brand of paint. Discuss the situation if Nopeel Paint decides to bring a lawsuit against Ace Paint Contractors.

42) Alphonse owes huge debts to many creditors. A month before filing for bankruptcy, he distributes all of his assets to his church. Discuss the case.

43) Martin entered into a written contract to sell Anna his football card collection for $10,000, payable in five installments. Martin then orally told Cathy that she could collect the proceeds of his sale. Discuss Cathy's legal rights.

44) Norbert receives an official-looking written notice which states that Mountain Mortgage Inc., from whom he had borrowed money to purchase his house, has assigned Walter all rights to receive payment and that Norbert should make all future mortgage payments to Walter. Discuss Norbert's rights and duties.

45) Basic Carpet contracts to install stain-resistant carpet in Alice's house for $6,000. Basic Carpet then assigns the right to receive payment from Alice to Home Finance Company. When payment comes due, Alice refuses to pay more than $2,000, asserting that the installed carpet was not stain-resistant. Home Finance asserts that Alice must pay $6,000, since Home Finance was not responsible for installing the carpet. Alice decides to sue Basic Carpet. Discuss the case.

46) Jennifer contracts to purchase Allison's house when Allison is transferred out of the state.

The contract calls for monthly payments, but allows Jennifer to pay the remaining balance at any time. Jennifer, on June 1, sends Allison an offer to pay the balance. Allison receives the offer on June 2, but sets it aside until October 1. When Allison realizes that Jennifer has not made any payments for four months, she threatens to sue Jennifer for breach of contract. Discuss the legal rules governing this situation.

47) Dash's auto insurance policy requires that he file a written notice of a claim with the insurance company within ten days of any damage in an auto accident or the insurance company may refuse to pay the damage claim. Dash has several accidents and always simply orally reports the damage to the insurance agent, and the insurance company pays the claim; however, on this occasion, after his failure to file a written notice of the claim, the company refuses to pay the claim. They cite the express language of the insurance policy. Is the insurance company correct?

Discuss.

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48) Lisa did not deliver goods in 1992 as her contract with Jozell required, but Jozell took no legal action for fifteen years and then sued Lisa for breach of contract. Discuss the suit.

49) Roxta Biscuits and Seven Eleven Supermarkets enter a contract where the biscuit-making company will supply 1,000 biscuit packs a day at $50 each to the supermarket chain for the next six months. However, Roxta Biscuits stops their supplies to the supermarkets mid-way, claiming that the prices of each biscuit pack, due to severe inflation, are $80. If Roxta continued to deliver at $50, it would lose $20 per biscuit pack it delivered. Seven Eleven Supermarkets sues Roxta, saying that it has to oblige by the contract signed. Evaluate the case.

50) Tibbetts left a television with Quick Fix, Inc. for repair. Quick Fix made tests and diagnosed the problem, but never began the actual repairs. Nothing was done on the set for more than three months. After repeated telephone calls demanding that the work be done, Tibbetts asked for the return of the set. Quick Fix refused to give up the set unless Tibbetts paid for the time spent on making the tests. Discuss the case.

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Business Law with UCC Applications, 15e (Sukys) Chapter 13 Sales Contracts: Formation, Title, and Risk of Loss 1) Fish sold on contract, but not yet caught by a commercial fisherman's coop, are called goods.

2) A gift is legally considered the same as a sale of goods, since title passes in both a gift and a sale.

3) Under the UCC, if a sale of goods contract offer between merchants is silent concerning the method of acceptance, it must be accepted by electronic means within 48 hours.

4) Intermountain Medical Supply states by an e-mail to the CEO of ValleyCare Hospital that its offer to sell hemostats for the operating room for $35.00 each will be held open for 40 days.

IMS's e-mail is a firm offer that requires a consideration to be legally binding.

5) The CEO of Intermountain Medical Equipment and the VP of Purchasing at ValleyCare Hospital in Boise entered into an oral agreement to manufacture 15 oversized electric/pneumatic gurneys for the operating room at ValleyCare Hospital in Boise, at a cost of $6,000 each, total contract price of $90,000. The gurneys were made to the specific instructions of ValleyCare and could not be easily sold to another hospital. After the gurneys were manufactured, ValleyCare can refuse to take them on the grounds that the oral contract was unenforceable.

6) Merchant A orally enters into a $1,000 contract with Merchant B. Merchant B will not be legally bound if she sends a confirmation, because Merchant A did not sign it, but she did object to it 3 days after she received the written confirmation. Merchant A sends out a conforming shipment the following week. The merchants have a binding agreement.

7) Braxton has a contract to deliver 500 cases of green beans to CostLess Wholesalers for $10,000. He sells CostLess the beans that he acquired through allegation of fraud from another vendor. If true, then Mary, who is another vendor, has voidable title to the green beans and can void the title to the green beans if she chooses to do so. However, she cannot sell the goods to her customers because of the clouded title.

8) While 25 tractor mowers from the John Deere distribution center in Des Moines, Iowa were being shipped via shipment contract by EXpress Trucking to the Home Depot in Little Rock, Arkansas, the truck carrying the shipment was hijacked and all the mowers stolen. Since the mowers were being shipped by a shipment contract, EXpress bears the risk of loss.

9) The Convention on Contracts for the International Sale of Goods (CISG) requires a written contract for the sale of goods when the price exceeds $5,000.

10) In an auction without reserve, the auctioneer must accept the highest bid.

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11) Joe leaves his $25,000 Rolex watch with Zayer's Jewelers to be cleaned and maintained.

When the watch or jewelry is ready to be picked up, Zayer's usually displays it in a special counter. One day during a special sale, Mary comes into Zayer's and inquires about the watch and is told the watch is on sale for only $18,500. If Zayer's sells the watch to Mary, Joe has a cause of action against both Zayer's and Mary to recover the watch.

12) Ross Plants Wholesalers contracts with Bi-Mart, Inc. for the sale of 24 pallets of fresh herbs and shrubs, to be delivered FOB to Bi-Mart in Emmett, Idaho. The 24 pallets are identified and put on a receiving dock. Before the shipper, EXpress Trucking, can pick them up and sign appropriate documentation, a fire destroys the plants causing a total loss. In this case, Ross Plants bears the risk of loss.

13) If Company A in New York and Company B in Chicago sign a contract that states "FOB Chicago," it means the parties have agreed to a shipment contract and the title and risk of loss passes to Company B when they are placed in the carrier's possession in New York. So, for example, if the goods are destroyed in transit Company B bears the risk of loss.

14) The main issue in the Classic Case of XCEL v. DeVault involved a question as to whether XCEL's shipment of conforming goods acted as an acceptance of DeVault's purchase order.

15) If the seller is not a merchant, the risk of loss passes to the buyer when the seller tenders the goods to the carrier.

16) Alaskan Seafood Enterprises Inc., a wholesaler of fresh fish, agrees with Red Lobster Inc. to sell 12 boxes of fresh-caught lobsters at 'market value.' The contract is unenforceable because the UCC requires a price for the goods.

17) The purchasing manager of Ethan Wholesale Furniture, Inc. sends an e-mail to the CEO of Ashley Furniture, Inc. promising to sell new couches for a total of $5,000, and to keep the offer open for 30 days. The promise is unenforceable because there is no consideration.

18) In a contract with a merchant for which no delivery is required, risk of loss passes to the buyer when the buyer picks up the goods.

19) Roberta receives a document of title for lumber she purchased. Even though she does not yet possess the lumber, the document transfers to her both title to the lumber and risk of loss for it.

20) An automobile title certificate under the UCC has the legal status of a document of title.

21) The seller is said to have a security interest in shipped goods if the agreement between the buyer and seller allows the seller to retain title after the goods are shipped.

22) Massive Equipment Company sends machinery on approval to Mountain Moving Company.

While in possession of the machinery, but prior to acceptance, Mountain becomes insolvent. The machinery is subject to the claims of Mountain's creditors.

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23) Buyers obtain an insurable interest even though they might later reject or return the goods to the seller.

24) Sellers always retain an insurable interest in the goods, even if they do not have title to them.

25) Which of the following is considered to be future goods?

A) Office furniture B) Stocks C) Fish in the sea D) Gasoline at a gas station 26) In what respect is a bailment legally different from a sale?

A) Title does not transfer in a bailment.

B) Title transfers in a bailment, but no price is involved.

C) In both, there is a transfer of title, but in a bailment the title reverts to the bailor at the end of the bailment.

D) In a sale, the title transfer includes all rights of ownership, but in a bailment, the title transfer includes limited rights of ownership.

27) ________ is a method of commercial dealing that is commonly used in a particular field or industry.

A) Usage of trade B) Contract for sale C) Good faith D) Firm offer 28) It is important to identify a ________ contract because it includes both goods and services. If the sale of goods dominates the contract, then it will be governed by ________; however, if services dominate the contract, then it will be governed by ________.

A) blended; CISG; common law B) blended; common law; UCC Article 2 C) hybrid; UCC Article 2; common law D) hybrid; common law; Restatement of Contracts 29) The Emmett School District (ESD) contracts with the GoldenFarms Dairy for "all of the milk" GoldenFarms can produce during ESD's current school year. The contract specifies a price, but no exact quantity of milk to be purchased is set in the contract. This contract is a(n): A) invalid contract because no quantity is set.

B) valid requirements contract.

C) valid output contract.

D) invalid contract because consideration is missing.

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30) A(n) ________ can make a(n) ________ because it deals in ________ in the ordinary course of business or has knowledge or skills peculiar to those goods.

A) obligor; gift; specially manufactured goods B) merchant; firm offer; goods of the kinds sold C) merchant; open price contract; goods of the kinds sold D) seller; firm offer; goods of the kind sold 31) ________ goods are those that are in accordance with the obligations under the contract.

A) Future B) Nonconforming C) Tangible D) Conforming 32) Which of the following is true of a firm offer?

A) It occurs when parties intend to be bound by a contract, but fail to mention the price.

B) It occurs when a seller agrees to sell all it can produce to a particular buyer.

C) It occurs when a merchant promises to hold an offer open without any consideration.

D) It occurs when a buyer agrees to buy all its requirements from a particular seller.

33) Joshua, a merchant, promises in a signed writing to Pedro, a consumer, to hold an offer to sell goods open for five months without Pedro giving consideration in exchange. However, Joshua sells the goods to another consumer and Pedro sues him for breach of contract. Which of the following is true of this case?

A) Joshua is not bound by the contract, since firm offers cannot exceed three months.

B) Since Joshua is a merchant and is bound by a firm offer made to Pedro, he has breached contract.

C) The UCC will not enforce this contract as a firm offer as both parties are not merchants.

D) Joshua is bound by this offer only if a five month offer is customary for this type of good.

34) Which of the following is true of oral contracts for the sale of goods of $500 or more?

A) All oral contracts are unenforceable unless they are for the sale of goods of $500 or more.

B) An oral contract is not enforceable, unless a written confirmation is received and signed by one party, and sent to the other for approval.

C) An oral contract by a merchant is enforceable if a written confirmation is received by another merchant who does not object to within 10 days.

D) An admission in court about the terms of the contract does not negate the general rule.

35) Starbucks Coffee contracts with Juan Valdez coffee farms to purchase "all the coffee beans Starbucks needs for the next twelve months." The parties have a(n) ________ contract.

A) open price B) requirements C) output D) firm offer

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36) If both parties are merchants, the UCC modifies the common law "________" rule, by allowing ________ terms to become a part of the contract, unless they ________ change it.

A) hybrid contract; additional; materially B) course of dealing; additional; materially C) plain view; different; slightly D) mirror image; additional; materially 37) A(n) ________ includes any symbol, made with the intent to authenticate a writing.

A) seal B) informal note C) mark D) signature 38) Under the ________, an electronic signature is defined as "an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record."

A) E-Sign Act B) UETA C) UCC D) CSIG 39) Which of the following is true regarding Convention on Contracts for the International Sale of Goods (CISG)?

A) The CISG governs only the formation of a sales contract and the rights and duties that arise from it.

B) The CISG is concerned with the validity of a contract that would be governed by other laws.

C) The CISG applies to the liability of the seller for death or personal injury caused by the goods to any person.

D) The CISG applies to auctions sales, sales of stocks, securities, negotiable instruments or money.

40) In an ________, after the auctioneer calls for bids on an article or lot, that article or lot cannot be withdrawn unless no bid is made within a reasonable time.

A) auction with reserve B) enforced auction C) auction without reserve D) entitled auction 41) If a person obtains property as a result of another's fraud, misrepresentation, mutual mistake, undue influence, or duress, the person is said to hold only: A) voidable rights.

B) contract rights.

C) insured rights.

D) valid rights.

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42) MeatPackers, Inc. bought a new kind of refrigeration system from Coolit, Corp. for storage of its meats. As part of the contract, Coolit delivered the refrigeration system to the MeatPackers plant, installed it, set its temperature, and then monitored it for several hours to make sure it worked. Before they left, Coolit's technicians handed MeatPackers a bill of sale. Absent any other terms or conditions, MeatPackers, Inc. received title to Coolit's refrigeration system when: A) Coolit delivered the system to the MeatPackers plant.

B) MeatPackers paid for the Coolit system prior to delivery.

C) Coolit delivered, installed, and tested the system.

D) Coolit handed MeatPackers the bill of sale.

43) When goods are sent f.o.b. shipment, the title and risk of loss pass to the: A) carrier at the point of origin.

B) buyer at the point of origin.

C) buyer at the destination.

D) buyer when he/she accepts the goods.

44) Which of the following is true of destination contracts?

A) It requires a seller to turn the goods over to a carrier for delivery to the buyer.

B) Both title and risk of loss pass to the buyer when goods are given to the carrier.

C) Title and risk of loss pass to the buyer once the seller tenders goods at a place as per the contract.

D) The seller bears no responsibility for seeing that the goods reach their destination.

45) A document of title allows the person who possesses it to: A) receive the goods named in the document.

B) conclusively prove ownership of the goods named in the document.

C) receive the goods named in the document free of any creditor claims.

D) conclusively prove that the goods are free of defects.

46) Samantha was looking for a certain shade of thread to complete her needlework on a tablecloth. At a local shop, however, she was unable to decide which of the five selected shades would be the closest match to the cloth. The shop owner allows Samantha to take the selected shades home and decide which one she would want to have. This is an example of which of the following?

A) Destination contract B) Sale on approval C) Sale on acceptation D) Approval contract 47) Which of the following is true of insurable interest?

A) Sellers can retain the insurable interest to goods as long as they have the title to them.

B) Buyers cannot place insurance on goods.

C) Buyers cannot obtain an insurable interest if they might later reject the goods.

D) Buyers can obtain insurable interest on goods that are not mentioned in the contract.

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48) Mike and Jane contract to purchase and sell $1,000,000 worth of computer chips to be manufactured in Japan and shipped to San Francisco. The contract is silent about the method of delivery. Mike asserts that delivery is by ship, which is customary in the computer chip industry, but Jane insists that delivery is by air, which is what a previous contract between Mike and Jane provided. Explain how a court will resolve this dispute.

49) Sun Supply Co. offered to sell Apartment Management Inc. air conditioner filters at $15 per case in a signed writing that stated the price was good for sixty days. Apartment Management discovered that other sellers charge $20 per case for identical air conditioner filters, but before it can accept Sun Supply's offer, Sun Supply withdrew the offer after only 30 days, stating that changed market conditions had forced it to charge more. Discuss the case.

50) Lucky Used Cars, using their contracts form, agree to sell Alvin a truck for $5,000. The contract provides that it may not be modified—except by a signed writing. After entering into the contract, Lucky and Alvin orally agree that Lucky will include new floor mats and a bed liner for an extra $100. At the time of delivery, Lucky refuses to provide the new floor mats and bed liner unless Alvin pays an extra $250. Discuss the enforceability of the oral agreement Lucky and Alvin had.

51) Big Choppers orally contracts with Jane to make a custom motorcycle for Jane for $30,000.

When completed, Jane refuses to accept the motorcycle or pay for it. Discuss the validity of the oral contract.

52) Seth was the highest bidder for an antique chest at an auction sale. There was nothing to indicate whether the auction was with or without reserve. The auctioneer withdrew the chest from the auction without accepting Seth's bid because the bid was too low. Is the auctioneer legally entitled to withdraw the chest from the sale? Explain.

53) Warren left his watch to be cleaned at a jewelry store. By mistake, a clerk sold the watch to Foley. Foley did not know that the watch rightfully belonged to Warren. Analyze the case.

54) On Saturday, Hussein purchases a sofa from Big Box Furniture Inc., who agrees to deliver the sofa without charge to Hussein at 3 p.m. the following Monday. Hussein forgets about the delivery and is not home at 3 p.m. on Monday when the Big Box delivery truck arrives. The delivery truck takes the sofa back to the Big Box store where it is destroyed in a fire that occurs at 9 p.m. Monday. Discuss the risk of loss in this case.

55) Ralph, of Miami, Florida, ordered "100 red widgets" from Maria's business located in Seattle, Washington. Shipment was f.o.b. Seattle via Red Freight Co. By mistake Maria sent "100 green doodads" to Ralph. The shipment was destroyed when the Red Freight truck was involved in a traffic accident in Oklahoma City. Ralph had insurance coverage that includes "items purchased that are in transit." Explain whether Ralph or Maria has the risk of loss.

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56) Downtown Construction Co. obtained possession on April 1 of a bulldozer from Bulldozer Sales Co. to use in Downtown's business with a right to return the bulldozer no later than June 1 with no obligation other than to pay for the fuel the bulldozer used. Downtown is owned by Alice who allows her fifteen-year-old son, Bob, to operate the bulldozer on May 1 on a Downtown job. Bob is inexperienced and wrecks the bulldozer. Explain who has the risk of loss.

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Business Law with UCC Applications, 15e (Sukys) Chapter 14 Sales Contracts: Rights, Duties, Breach, and Warranties 1) Sanyon and Sue agree to the purchase and sale of Sanyon's car. When Sanyon (seller) offers to give the keys to the car to Sue (buyer) who offers to pay for the car with a cashier's check, a tender of performance has occurred.

2) According to the UCC Article 2, the seller must tender conforming goods at the buyer's disposition within 24 hours of arrival at the destination, unless it is perishable goods, in which case within 12 hours.

3) To be in a position to bring suit on a sales contract, the seller of goods must make tender of payment.

4) Sonia's warehouse is holding Joe's goods. Joe is selling the goods to Monique. Even though the goods are not properly identified, if Sonia calls Monique and informs her she may pick up the goods anytime, a tender by the seller (Joe) has occurred.

5) Tender of payment requires the buyer of goods to offer legal tender only.

6) In a shipment contract, proper tender of delivery is placing them on the loading dock to be picked up by a shipper.

7) In a C.O.D. shipment, the buyer receives non-conforming goods. The buyer must first accept and pay for the goods, and then make a claim against the seller.

8) Conway Retailers contracts to buy office furniture from Blue Ridge Furniture to install in a newly constructed office building. The furniture is delivered in 4 commercial units. Two of the units are conforming, and the remaining two are non-conforming and defective. Conway decides to accept only two units and reject the other two. Because of the rejection, Conway is liable for shipping costs for the remaining two units back to Blue Ridge.

9) A commercial unit is a single whole for the purpose of sale, the division of which generally does not impair its value on the market.

10) The buyer has an unconditional right to inspect the goods before accepting or paying for them.

11) If a seller offers to cure a delivery of non-conforming goods that the buyer has accepted, she must do so within 72 hours of delivery of the non-conforming goods.

12) A seller has the right to cure a defective tender after the time for performance has expired.

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13) In August 2018, Zano orders 10 Takamine T-35 guitars from Music Retailers for his class which is scheduled to start in January, 2019. Thirty days after the order, Music Retailers notifies him that it cannot fill his exact order by the start of his class, but it is shipping 10 Takamine T-45 guitars instead. Music Retailers' notification is an anticipatory breach of contract and Zano has the right to sue immediately.

14) A seller can cure a defective shipment by suing a buyer of goods for breach of contract if the seller is able to resell the goods.

15) A salesman's pitch to a customer, "this is the best Hi Def screen on the market" is the equivalent of an express warranty.

16) The Garden Club orders 40 T-shirts from Shirt City, Inc. to be printed with the club name and motto for a total price of $400. The Garden Club breaches the contract, and Shirt City discovers that the resale value of the shirts is $1 each. Shirt City may sue the Garden Club for the order price of the T-shirts.

17) Russ, a salesman at CostLess, shows a model of a new smart phone to Nayeli, a customer who is walking by. Nayeli asks him a few specific questions about the phone's capabilities and says that she would like to buy it. Russ has created an express warranty.

18) To be legally enforceable, an express warranty must be in writing.

19) Under the UCC, an implied warranty is a warranty that is imposed by law rather than by a seller's statement or description.

20) Jeff visits Long's Hardware store and describes a problem he is having with ice in his gutters during the cold winters in Idaho. Stan, the salesman, recommends the new XT-104 Ice Melter for Jeff. Stan has created an implied warranty of merchantability.

21) Garcia purchases a used shotgun from Andy, who had purchased it from Jane, who purchased it from Maria, who had stolen it from Songhee. Only Maria has broken the warranty of title.

22) Generally, the words "as is" on an item for sale exclude implied warranties.

23) Rajid, an immigrant who speaks little English, enters into a contract to pay $300 per month for ten years to purchase an auto from Travel Motor Co. The appraised retail value of the car is $5000. What legal remedy would release Rajid from his contract?

A) Unconscionability B) Specific performance C) Punitive damages D) Implied understanding

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24) Which of the following is true of a shipment contract?

A) The seller must put the goods in the possession of the carrier.

B) The seller must tender the delivery of goods to the buyer.

C) The seller offers to turn the goods to the buyer, and the buyer offers to pay for them.

D) The seller tenders the delivery of goods to the carrier, along with the document title.

25) In a tender of payment, the: A) buyer offers to turn the money over to the seller.

B) buyer shows a seller his or her legal tender.

C) seller puts conforming goods at the buyer's disposition.

D) seller provides storage facilities for goods to the buyer.

26) When a buyer has a right to inspect the goods, the right usually must be exercised: A) before the goods are shipped.

B) after the goods are shipped, but before delivery.

C) before accepting the goods.

D) within ten days of accepting the goods.

27) Which of the following is true of rejection of goods by the buyer?

A) A rejection by the buyer can be done even after the buyer has expressed acceptance of the goods.

B) A buyer can claim ownership of the goods even after rejection.

C) A rejection by the buyer can occur even before the goods are tendered and inspected.

D) A rejection must be done within a reasonable time after delivery or tender to the buyer.

28) Brenner entered into a written contract with the Inkblot Corporation for $1,000 worth of office supplies. Inkblot subsequently sent Brenner some supplies that were not requested in the contract. Brenner noticed that the order did not match the contract, but he accepted the nonconforming goods. Which of the following is true of this situation?

A) The Inkblot Corporation must cure the improper tender.

B) Inkblot is not required to cure the improper delivery since it has been accepted.

C) Brenner can reject the goods without informing Inkblot of the defect in the supply.

D) Brenner can accept the goods and through the court, obligate the Inkblot Corporation to cure the improper delivery.

29) In a written contract, Hogan agrees to sell Jason kitchen cabinets and to deliver them before December 21. On October 21, two months before the delivery is expected, Hogan tells Jason that he will not sell him the cabinets. Which of the following can Jason do in this situation?

A) He can sue Hogan for breach of contract, but must wait until December 21 to do so.

B) He can sue Hogan for breach of contract immediately.

C) He can sue Hogan for breach of contract if he is unable to find another vendor by December 21.

D) He cannot sue Hogan for breach of contract, since Hogan served an advanced notice to Jason.

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30) ________ damages are reasonable expenses that indirectly result from the breach, such as expenses incurred in stopping delivery of goods, transporting goods, and caring for goods after the buyer's breach.

A) Compensatory B) Resale C) Punitive D) Incidental 31) Gerald orders 1,000 cupcakes from Haddock Bakers for a Christmas Eve party. However, Haddock fails to deliver the cupcakes as per the schedule mentioned in the contract, and does not send any notification to Gerald. Gerald orders the cupcakes from Marlene's Cakes that evening.

Gerald's order from Marlene's Cakes is called a ________.

A) writ of replevin B) specific performance C) cover of a sales contract D) cure of nonconforming product 32) Auto Rebuilders, Inc. orders original 1995 model parts for a Ford Mustang Cobra from Car Wreckers, Inc. Car Wreckers boxes the parts for shipment, but finds another purchaser who is willing to pay more and refuses to ship the parts to Auto. Auto is unable to find the parts for sale elsewhere, but is uncertain about what legal remedy to pursue. What remedy is best suited for this situation?

A) Cover and sue for compensatory damages B) Sue for specific performance C) Writ of replevin D) Cure and sue for incidental damages 33) Bridget contracts with Hunter to purchase $30,000 worth of goods for her store. Hunter wants a clause in the contract stating that neither party will sue the other after one year from the date of breach of contract. Which of the following is true of this situation?

A) Parties are not allowed to provide time limits in their sales agreements, since the UCC sets this time.

B) Competent and informed parties can agree to set any time limit to sue for breach of contract.

C) The courts must review the time limits the parties have determined in the sales agreement as reasonable.

D) The UCC allows parties to shorten the time limit to bring a suit to a minimum of one year.

34) Jess buys a microwave oven with a manufacturer's full one-year written warranty. If Jess discovers that the microwave oven does not work properly during this time, the manufacturer is obligated to: A) charge Jess only for the cost of the parts replaced, not for the labor involved.

B) repair the microwave at a nominal cost to Jess.

C) provide a pro-rata credit for the defective part of the microwave.

D) fix or replace the microwave for free.

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35) A(n) ________ is any written warranty that does not meet all of the requirements for a full warranty.

A) express warranty B) limited warranty C) implied warranty D) warranty of merchantability 36) Lori went into an electronics store that had a sign posted on the wall declaring "All sales final!" She told the salesperson that she was looking for an iPod with Pandora, so that she could listen to streaming music while working out in her WiFi-enabled health club. The salesperson selected a WiFi-capable iPod and told Lori that she could receive Pandora as long as the fitness center had WiFi. The next day, when Lori tried to use the iPod at the fitness center with WiFi, she found that she could only hear static. Which of the following is true of this situation?

A) Lori will be unable to return the iPod because the store's policy said "All sales final!" at the time of the purchase.

B) Lori may not be able to claim a refund, since the iPod will be declared as merchantable.

C) Lori can claim a refund of the iPod on the basis of an implied warranty of fitness for a particular purpose created by the salesperson.

D) Lori can claim a refund from the store based on a limited warranty that is practiced in the electronics industry.

37) Tyler has always had a "180-day full warranty" from Business Sales Company when purchasing office equipment over the past five years. On this occasion, Tyler purchased a big screen LED TV from Business Sales that broke thirty days after Tyler purchased it. Business Sales asserts that it did not provide a 180-day full warranty on the TV and has no legal liability.

Which of the following is true of this situation?

A) Tyler cannot assert a warranty since Business Sales has not provided a full warranty on the product.

B) Tyler may assert a warranty based upon past dealings with Business Sales.

C) Business Sales can escape liability by asserting that the defect was caused by the manufacturer.

D) Tyler can bring a suit against Business Sales and claim punitive damages.

38) Samantha purchased a used computer system from Office Rental, Inc. who was updating its computers. Later, Big Bank asserted the right to repossess the used computer system from Samantha since it had a lien on all of Office Rental's business equipment to secure an unpaid loan. Samantha was unaware of this lien. What are Samantha's legal rights?

A) She can sue Office Rental for breach of warranty of title.

B) She can claim that she was unaware of Office Rental's debt, and hence, Big Bank cannot assert its lien.

C) She can continue to possess the computer system, since she paid Office Rental for it.

D) She can claim a refund from Office Rental, but cannot bring a lawsuit against Office Rental or Big Bank.

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39) Which of the following is true of an exclusion of the implied warranty of fitness for a particular purpose?

A) The exclusion can be an oral or written statement, promise or other representation about the quality of a product.

B) The exclusion can occur by excusing buyers from examining the goods, the sample, or model.

C) The exclusion must be in writing, bold type, and be conspicuous.

D) Using expressions such as "as is," "with all faults," or some similar language would not exclude the implied warranty of fitness for a particular purpose.

40) Harvey orders high-end stoves and ranges from Bosch to sell in his appliance store, Harvey's Appliances. When the stoves arrive, Harvey discovers that the stoves are not what he ordered.

Bosch can: A) revoke the acceptance.

B) cure the delivery.

C) cover the tender.

D) seasonably revoke the tender.

41) Tom orders $24,000 worth of premium bicycles from Budnitz, a premium bicycle manufacturer, to sell in his Tom's Bike store. After the bicycles are loaded into the freight truck and are on their way to Tom, Budnitz discovers that Tom is insolvent and unlikely to be able to pay for them. Budnitz has the right to: A) stop the delivery and sue for any damages.

B) cure the delivery and sue for any damages.

C) cover the tender and sue for any damages.

D) seasonably reject the tender.

42) Gino, a used car salesman, tells BillyBob while test driving a restored '64 Mustang, "BillyBob, this car is a chick magnet!" So BillyBob buys the Mustang, but later is not satisfied because no girls want to go riding with BillyBob. BillyBob threatens to sue Gino. What result?

A) BillyBob will win because Gino's statement is an express warranty.

B) BillyBob will lose because Gino's statement is sales puffery.

C) BillyBob will win because Gino's statement is an implied warranty of fitness for a particular purpose.

D) BillyBob will lose because there are no express or implied warranties under the MagnusonMoss Warranty Act. 43) Rebecca sells Qadir goods that are located in the Matrix Warehouse and gives Qadir a warehouse receipt at 5 P.M. Matrix closes at 5 P.M. That night, the goods are destroyed by a fire at the Matrix Warehouse. Have the goods been tendered to Qadir by Rebecca?

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44) Jarvis Enterprises ordered 50 boxes of blueberries from Agricultural Wholesalers, Inc. Agricultural delivered 50 boxes of blackberries. Jarvis rejected the blackberries and attempted to contact Agricultural. After many unsuccessful attempts, Jarvis decided to sell the blackberries to Cold Ice Cream Co. for $500. Jarvis was ready to forward the money after deducting its expenses and a commission to Agricultural, but when Agricultural learned the sale price, it objected.

Agricultural feels that the blackberries had a fair market value of $1,200, and that Jarvis sold the blackberries too cheaply. Discuss the legal rights and duties of Jarvis in this situation.

45) Jan, a nonmerchant buyer, receives nonconforming goods from Zoe, a merchant seller. Jan is so upset that she places the goods outside next to the trash collection bin and tells Zoe to come get her "trash." Rain damages some of the goods before Zoe picks them up the next day. Discuss Jan's duties and Zoe's rights.

46) Bigger Grocery Stores orders 100 cases of tomatoes from Produce Wholesale Co., but receives 100 cases of bananas. Bigger asks Produce for instructions concerning the wrong delivery, but receives no instructions. Bigger resells the bananas, considering they are perishable goods. However, when Produce Wholesale learns this, it sues Bigger Grocery Stores on grounds that it did not await instructions from Produce. Discuss the case.

47) Westdress, Inc. entered into a contract with Salvo, Inc. to supply them with specified goods

by June 15th. Salvo, Inc. shipped the goods, which were delivered to Westdress, Inc. on May 30th. Westdress inspected the goods, found 50% of the goods to be nonconforming to their order, but kept them without notifying the seller of the discrepancy. In the meantime, Salvo, Inc. realized its error and contacted Westdress to replace the goods, but Westdress refused the offer.

Discuss the case.

48) Nicholas entered into a written contract with Mondo Choco, Inc., agreeing to pay Mondo Choco $700 for several hundred assortments of holiday chocolates for the employees of his corporation. Mondo Choco failed to deliver the chocolates by the date set in the contract.

Nicholas then told Mondo Choco that he would cover the sale. Discuss.

49) Toy Distributors, Inc. had a swing set constructed for customers to examine. It was anchored to the ground with 20-inch steel pins. Gina purchased one for installation in her backyard by Toy, but Toy anchored it with 6-inch steel pins that pulled out of the ground, causing the swing set to tip over and injure Gina's child who was playing on the swing. Discuss if any warranties have been violated by Toy. 50) When Zachary purchased an Arctic Refrigerator from Best Bargain Store, the refrigerator came with a 36-month written full warranty. When the refrigerator malfunctioned, Zachary discovered that he was expected to ship the refrigerator at his expense to the Arctic factory in China where it was manufactured. There would be a four-month delay until he received his repaired refrigerator back from the factory. Discuss if these requirements to exercise the full warranty are lawful.

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51) Tang went into a bicycle shop to purchase a bike rack. He asked the salesperson for help in picking out a rack that would fit his bike. While the salesperson was helping another customer, Tang went ahead and chose one he wanted. The salesperson then told Tang that the rack was a good one. After Tang put the rack on his bike, it did not fit properly and damaged his gear shift.

Explain whether Tang can rightfully claim that the salesperson committed a breach of warranty of fitness for a particular purpose.

52) Cassandra purchased a truck at a Middleburg police auction of abandoned property. The truck, in fact, had been stolen and the original owner, Ariel, subsequently asserted a claim to it.

Discuss if Cassandra has any claims against Middleburg or Ariel.

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Business Law with UCC Applications, 15e (Sukys) Chapter 15 Product Liability and Consumer Protection 1) In his book Law and Society: Critical Approaches, author Gerald Turkel states that public policy is the equivalent of Max Weber's social consensus in that it "refers to the idea that certain activities affect the entire social structure and must be regulated by the government."

2) In the "Opening Case Round 2," Macrie v. SDS Biotech, the Court used the "risk-adaptability" analysis in making its decision.

3) A child is injured after swallowing a piece of glass hidden in a jar of jam. A court will award money for the injuries based on strict product liability: the piece of glass was a careless action that was both the actual and the proximate cause of the victim's injury.

4) A plaintiff in a strict liability case may recover punitive damages.

5) Under the doctrine of strict liability, when a product is unavoidably dangerous, a manufacturer has a duty to warn consumers of potential injuries.

6) A successful plaintiff in a product liability suit can only recover punitive damages if the manufacturer disregarded federal statutory regulation.

7) According to the FTC's "Cooling-Off" Rule, consumers have 48 hours (two days) to cancel an order amounting to over $50.

8) The purpose of a negative option rule is to switch customers from buying the advertised merchandise to buying something else that is usually more expensive.

9) An FTC order, under which a company agrees to stop a disputed practice without necessarily admitting that it violated the law, is called a dunning letter.

10) Persons who receive unordered merchandise in the mail may have a private cause of action and may ask for a consent order from the FTC. 11) If the seller of an automobile believes that the mileage reading on the odometer is incorrect, the disclosure statement must indicate that the actual mileage is unknown.

12) The Federal Trade Commission requires used car dealers in most states to display statements that the cars are sold "as is" if the cars are sold with limited warranties.

13) The Federal Trade Commission defines a "dealer" as anyone who sells more than five (5) used cars in a 12-month period. The law covers the sale of automobiles, light-duty vans, and light-duty trucks.

14) The FTC's "Cooling-Off" Rule applies to sales that are entered completely by phone or by mail.

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15) Robin orders $1,500 of merchandise from Whamazon.com. If no delivery date is promised, Internet must ship the merchandise within thirty (30) days.

16) A 900 telephone number bills the vendor for the telephone charge.

17) "Slamming" is the illegal practice of adding channels to a consumer's cable service without permission.

18) The APR is calculated by consumers with tables provided by the Federal Trade Commission.

19) The Equal Credit Opportunity Act makes it illegal for businesses to discriminate against credit applicants receiving public assistance income.

20) A credit cardholder is liable for all unauthorized charges if he or she does not report the unauthorized charges within twenty days of receiving a statement on which the unauthorized charges appear.

21) Jarvis rents an apartment for a period of two months. His lease is governed by the Consumer Leasing Act. 22) Which of the following is true of public interest and public policy?

A) Public interest promotes behavior complying with the public consensus, while public policy refers to the idea that certain activities affect the entire social structure.

B) Public interest is the consensus and public policy is the coercive social engineering strategy by which that consensus is implemented.

C) Public interest promotes the making of safe goods to coerce the public policy to maintain a social structure that promotes health and safety, and prevents illness and injury.

D) To meet the goal of public policy, public interest insists that manufacturers, sellers, and distributors compensate a victim, who is injured by an unsafe product.

23) Under the doctrine of ________, the principal consideration is the safety of a product, not the conduct of the manufacturer or supplier of the goods.

A) public policy B) negligence C) public interest D) strict liability 24) The prime target of the ________ has been handguns.

A) Consumer Product Safety Act B) dangerous per se rule C) telemarketing sales rule D) negative option rule

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25) Which of the following is not a requirement for strict product liability?

A) The product must be in a defective condition when the defendant sells it.

B) The product must be unreasonably dangerous to the user or consumer because of its defective condition.

C) The defective condition must be the proximate cause of the injury or damage.

D) The defective condition of the goods must have been changed from the time the product was sold to the time the injury occurred.

26) A knife made by Knife Co. has a metal handle with no warning, and the manufacturer has received reports that some consumers have received electrical shocks when attempting to use the knife as a screwdriver while installing an electrical outlet. Athena is one such consumer and decides to sue the manufacturer and the seller. Which of the following is true of this situation?

A) Athena can sue the manufacturer, since there is no specific warning label on the knife.

B) Athena cannot file a suit as a warning label may not reduce the likelihood of an injury in case of a knife.

C) Athena cannot file a suit against the manufacturer, since the danger presented by the product is obvious.

D) Athena can bring a lawsuit against the manufacturer, stating that the warning on the product was inadequate.

27) Local business activity carried on within state boundaries is known as: A) public commerce.

B) interstate commerce.

C) intrastate commerce.

D) local commerce.

28) Jackson Motors tells Sue, a consumer, that Bliss Automobiles are made with metal bodies when they are in fact made of fiberglass. This would be considered a(n): A) fraudulent misrepresentation.

B) sales puffery.

C) bait-and-switch scheme.

D) act of dunning.

29) Which of the following entities are allowed to send merchandise through the mail to people who did not order it?

A) Hospitals B) Local businesses C) Governmental units D) Charitable organizations

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30) David went to the store to purchase a $15 MP3 player, advertised in the paper. The salesperson was encouraged by the store not to sell that MP3 player since it created a loss for the store. Instead, the salesperson told David that although the MP3 player was on sale, it was an undesirable, bottom-of-the-line product, and that David would be much happier with an Apple iPod Nano CD player for $250. The store: A) acted in good faith when it tried to offer a better product.

B) can be sued under the policy of negligence and strict liability.

C) can be held guilty of a bait-and-switch scheme.

D) can be held guilty of fraudulent misrepresentation.

31) Even though Spice gives her four-year-old car to Homeless Helpers Charity, she: A) need not provide an odometer statement.

B) must provide an odometer statement.

C) need not provide an odometer statement, since the car is not over 15 years old.

D) must set the odometer to zero before resale.

32) Which of the following is true of the "Cooling-Off" Rule?

A) It gives consumers an opportunity to change their minds after signing contracts with people who come to their homes for product sales.

B) It allows sales of consumer goods or services under $25, made away from the seller's place of business, to be cancelled within three business days after the sale.

C) It requires the seller to give the buyer one copy of a cancellation form, which the buyer may send to the seller any time before the third business day after the sale.

D) It does not apply to consumer product parties given in private homes and to sales made in rented hotel rooms or restaurants.

33) To which type of transaction does the negative option rule apply?

A) Subscription to CD or DVD clubs that sends products on a regular basis and require the consumer to opt out of the next shipment B) Buying used cars C) Subscription to telephone services D) Buying goods via telephone or Internet 34) Under the ________, sellers must ship orders within the time promised in their advertisements. If no time period is promised, sellers must either ship the order within 30 days or send the consumer an option notice.

A) telemarketing sales rule B) negative option rule C) Cooling-Off Rule D) Mail and Telephone Order Rule

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35) Which of the following statements holds true of the FTC's Telemarketing Sales Rules?

A) Calling times are restricted to anytime during business days.

B) A telemarketer is allowed to call a consumer without requiring the consumer's consent.

C) Telemarketers must state the total cost of the products or services offered and that the sale is final or nonrefundable.

D) Telemarketers are excused from disclosing the name of the seller, and what they are selling before they make their pitch.

36) The ________ is an attempt by the federal government to reduce the use of unsolicited commercial e-mails on the Internet.

A) Can Spam Act B) Mail and Telephone Order Rule C) Truth-in-Mailing Act D) Anti-Slamming Law 37) Congress passed the ________ which requires lenders to disclose the finance charge and the annual percentage rate.

A) Fair Credit Reporting Act B) Equal Credit Opportunity Act C) Truth-in-Lending Act D) Fair Debt Collection Practices Act 38) Renee applied for credit to open her own beauty salon. The bank denies her the credit after learning she was recently divorced and receives public assistance income. Which of the following federal laws did the bank violate?

A) The Fair Debt Collections Act B) The Equal Credit Opportunity Act C) The Truth-in-Lending Act D) The Fair Credit Reporting Act 39) Cristina receives a new credit card from Seventh National Bank that does not provide a means for a retailer to verify that the holder of the card is in fact authorized to use it. The next day, Cristina discovers that she has lost her card. As soon as she discovers the card is missing, she calls Seventh National to report the loss. Already, $620 worth of unauthorized charges have been made on her credit card. Under the Truth-in-Lending Act, Cristina will: A) have to pay for the entire $620 of unauthorized charges.

B) have to pay for $50 of the unauthorized charges.

C) not have to pay any amount of the unauthorized charges.

D) have to pay for 50% of the unauthorized charges.

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40) After receiving her credit card bill, Claire feels that the credit card company has made a mistake. Several transactions are not hers. The law that has established procedures for the prompt handling of such billing disputes is known as the: A) Fair Credit Reporting Act. B) Fair Credit Billing Act. C) Fair Debt Collection Practices Act. D) Truth in Billing Act. 41) Mary contracts to lease an automobile from Zippo Sales with payments of $300 per month for a year and a final balloon payment of $1,200. This final payment is: A) lawful, since it satisfies the requirements of the Consumer Leasing Act. B) unlawful, since it exceeds $1,000.

C) unlawful, as it exceeds three times the average monthly payment.

D) lawful, since both parties have contracted on mutual agreement.

42) Alex, a painting contractor, purchased a movable Little Giant basket platform from Builder's Equipment Co. from which he or his employees could paint up to sixty feet off the ground. The platform malfunctioned, and Alex was injured when he fell from thirty feet. Discuss the type of product liability claim that Alex might bring against Builder's and Little Giant.

43) Roberts bought a new ride-on lawn mower and allowed his son, Don, to be the first person to drive it. Due to a factory defect, the mower's gearshift stuck in reverse. Don was seriously injured when the mower backed into a ditch and tipped over. When Don sued the manufacturer for his injuries, the manufacturer argued that it was not liable because Don had not purchased the mower. Is Don likely to win his case? Why or why not?

44) Xena's 1998 car's odometer stops working, and she does not repair it for six months because she is out of the country on business. Her family members drive her car while she is away. Xena is preparing to sell her car and honestly does not know the precise mileage on the car. Discuss what actions the law requires her to take after repairing the odometer while selling her car.

45) MacLean went to an appliance store to buy an advertised camcorder. The salesperson discouraged him from buying the advertised product, saying that it was of very poor quality. The salesperson tried to talk MacLean into buying a more expensive camcorder of better quality.

Discuss the case.

46) Joslin orders merchandise by phone from Marginal Enterprises with no stated delivery date.

When she does not receive it after a month, she contacts Marginal who indicates that due to a strike at their production plant, delivery that normally takes one month will take two months.

Discuss Joslin's legal options.

47) Dillon received a call from a 900 telephone number and called it back without knowing that she would have to pay for the call. The telemarketer did not warn her about the cost of the call.

She realized, for the first time when she received the telephone bill, that there was a charge for the call. Discuss.

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48) Jasmine discovered that she had been slammed by her old company, Voicetone, after she had paid her telephone bill to the company, Distant Enterprise. Discuss Jasmine's legal rights.

49) Samantha applied for a personal loan at a local bank in Illinois. The bank asked her to fill in an application form in which she was asked for her employment and marital status, as well as her age and her Social Security number. After reviewing her application, the bank denied her the loan because, it said, she was a 43-year-old divorcee—albeit a successful attorney—who received alimony payments and therefore, constituted a high risk. Analyze the case and Samantha's rights.

50) Justin, who is on a business trip 500 miles away from home, decides to try a "free" Internet service that requires a credit card number and ends up costing $275. Justin wants to contest this charge. Explain in detail what he should do.

51) Greenday Bank hires an agency to collect debt from one of its credit customers, Leon. The agency contacts Leon on his phone regarding the payment of the debt. Leon cites a family emergency and promises to visit the bank the next week. However, the agency sends a debt collector to Leon's house at 8 P.M. The debt collector does not find Leon at home and inquires about his whereabouts with the neighbors, telling them that Leon is indebted to Greenday Bank.

The neighbors inform the debt collector that Leon is visiting his ill mother in Virginia. Analyze the case with regards to consumer credit laws.

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Business Law with UCC Applications, 15e (Sukys) Chapter 16 The Nature of Negotiable Instruments 1) A negotiable instrument is an agreement by the maker that contains a fixed amount of money on demand or at a definite time to the bearer or to order.

2) The maker is a party to a note who promises to receive money.

3) A draft (or bill of exchange) is a written promise by the maker to pay money to the order of another party, called the payee.

4) Notes are orders to pay money, while drafts are promises to pay money.

5) The most common type of draft in use today is the bank draft.

6) If a drawee refuses to pay an unaccepted draft, the draft is dishonored, and the drawee becomes liable for refusing to pay it.

7) A sight draft is payable as soon as it is presented to the drawer for payment.

8) Ownership of a check is transferred by indorsement by the maker.

9) The first set of numbers on a printed check at the lower left-hand corner is the customer's bank account number at the Federal Reserve.

10) If a bank chooses to certify a check, the drawee is discharged from any further obligation.

11) A money order, which is drawn on the account of the maker, is a type of draft that may be purchased from banks, post offices, telegraph companies, and express companies as a substitute for a check.

12) Sam gives a check to Tina who indorses it over to Amanda. Amanda is called the holder in due course.

13) A holder is a person who is in possession of a negotiable instrument who is treated as favored and given immunity from certain defenses.

14) Under the UETA and Article 3 of the UCC, electronic negotiable instruments are not allowed unless there is a 'hard copy' on file with the local clerk of court.

15) Elke intends to sign a contract with Acme Gravel Co. If, while signing the contract, she transfers all her rights under the contract to Emmett Sand and Gravel Inc, she has legally assigned all her rights in the contract.

16) Jake is the holder of an instrument that needs his signature. Upon his death, the instrument automatically converts to a 'bearer' instrument and Jake's heirs can cash it.

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17) When an instrument is indorsed in blank, the payee becomes a holder in due course and the instrument may be transferred by delivery alone.

18) An indorser, whether or not she receives consideration for the instrument, must make five warranties to subsequent transferees of the instrument. The fifth warranty provides that the indorser has no knowledge of the bankruptcy of the maker, acceptor, or drawer.

19) Since Boise Bank's decision is "without recourse," Boise Bank must notify Joe by midnight of the next banking day.

20) Big Bank pays a check made by Franklin, payable to Ellen to a forger who signed Ellen's name. Big Bank is not liable to Franklin.

21) Historically, when merchants bought goods, instead of paying for them with gold or silver, they simply filled in a piece of paper called a ________ which ordered the goldsmith or silversmith to give a certain amount of the precious metal to the person who sold the goods.

A) demand note B) promissory note C) bill of exchange D) certificate of deposit 22) An instrument containing an acknowledgment that a bank has received a sum of money and a promise by the bank to repay the sum of money is called a(n): A) installment note.

B) certificate of deposit.

C) promissory note.

D) certificate of demand.

23) To accept a draft, the drawee: A) need only sign the draft across the face of the instrument.

B) needs to write "accepted" on a separate piece of paper.

C) need only sign on a separate piece of paper affixed to the draft.

D) needs to write "accepted" behind the instrument and sign the bank's record.

24) Through what kind of written instrument would Tim direct Howard to pay $600 to the order of Celeste?

A) A certificate of deposit B) A note C) A draft D) A dishonored draft

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25) Which of the following is true of a foreign draft?

A) It is drawn in one state and payable in another state.

B) It is drawn in one nation and payable in another nation.

C) It is drawn on one bank and payable to a governmental body.

D) It is drawn in one city and payable in another city in the United States.

26) A check that a drawee bank guarantees will be paid to the holder is a: A) bank draft.

B) traveler's check.

C) certified check.

D) treasurer's check.

27) A ________ check is a check drawn by one bank on another bank in which it has funds on deposit in favor of a third person, the payee.

A) traveler's B) teller's C) cashier's D) certified 28) A check for which the issuing financial institution is both the drawer and the drawee is called a ________.

A) bank draft B) teller's check C) certified check D) traveler's check 29) If an instrument states, "Pay to the order of Karen Fuji or her assigns," it is payable to: A) order.

B) cash.

C) bearer.

D) holder.

30) If Daphne gave value for and cashes Lisa's check, what legal rights, if any, does Daphne have?

A) Daphne may insist upon an unqualified indorsement.

B) Daphne may not insist upon any particular type of indorsement.

C) Daphne may insist upon both an unqualified indorsement and a restrictive indorsement.

D) Daphne may insist upon an unqualified, restrictive and special indorsement.

31) A blank indorsement should be used: A) only for the purpose of deposit or collection.

B) to impose warranty liability on the maker.

C) to reserve more space for other indorsements.

D) only in limited situations.

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32) Writing the words, "pay to the order of" or "pay to", followed by name of the indorsee and the signature of the indorser on an instrument makes it a ________ indorsement.

A) special B) restrictive C) qualified D) conditional 33) A check indorsed "for deposit only": A) prevents further negotiation of the instrument.

B) requires the amount of the instrument to be credited to the indorser's account before further negotiation occurs.

C) requires the amount of the instrument to be credited to the indorser's account and prevents further negotiation.

D) requires the amount of the instrument to be further indorsed by the payee in person before being credited to the indorser's account.

34) The words "without recourse" on an indorsement means the indorser is: A) liable personally, but not other parties.

B) not liable for any problems associated with the instrument.

C) not liable if the instrument is dishonored.

D) liable for only up to fifty per cent of the loss.

35) Lillian Fey purchases a night table from Aretha Boyner. Aretha wants Lillian to pay her by check before delivering the night table to Lillian's house. Lillian decides to attach an indorsement that reads, "Pay to Aretha Boyner if she delivers her night table to me, Lillian Fey, at 16 Holmes RD." This is an example of a(n): A) indorsement for deposit.

B) conditional indorsement.

C) qualified indorsement.

D) significant indorsement.

36) Which of the following is true of warranties by indorsers?

A) The indorser is not entitled to enforce the instrument.

B) The indorser warrants that the instrument is subject to a defense of any party that can be asserted against the indorser.

C) The indorser warrants that he or she has knowledge of the bankruptcy of the maker, acceptor, or drawer.

D) The indorser warrants that there has been no alteration or other irregularity.

37) If a drawee refuses to pay the instrument, it is said to be: A) delayed.

B) dishonored.

C) detained.

D) defaulted.

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38) Industries Inc. drew a check payable to "Gloria Schell and Pippen Tallit" in the sum of $20,000. For a proper negotiation, the check needs to be indorsed: A) only by Gloria Schell, since her name appears first.

B) by either payee, since the indorsement of only one of the payees is necessary to negotiate the check.

C) by both payees.

D) by the maker.

39) If a bank pays a forged check, it is liable for ________ the payee's funds.

A) converting B) detaining C) withholding D) diverting 40) Brianna repaid a $600 loan to her friend, Sharkey. She made the check payable jointly to Sharkey and Sharkey's daughter, Evie, even though she intended Sharkey to have the entire interest in the repaid debt.

A) Sharkey can legally forge Evie's indorsement as Brianna did not intend Evie to have any interest.

B) Sharkey cannot cash the check unless Evie indorses it herself.

C) If Sharkey forges Evie's indorsement, he can be held liable for the tort of conversion.

D) If Sharkey cashes the check with Evie's indorsement, he is legally obligated to give her half of the payment.

41) Mark gives a $3,000 check drawn on Access Bank to Acme Industries who mislays the check for three weeks. When Acme finds the check, they request that Access Bank certify the check. Access declines to do so, and Acme tells Mark that the check has been dishonored. Mark contacts Access who agrees to certify the check. Access subsequently wants to withdraw their certification, since Mark has insufficient funds in his account. Discuss the legal issues contained in their situation.

42) An envelope containing a $10 rebate check was placed in Hart's mailbox by mistake. It was addressed to Rice, a former tenant, and read, "Pay to the bearer or G. Rice, $10.00." Discuss Hart's role.

43) Discuss if the following instrument is negotiable: "Ninety days after today, I promise to pay Sarah J. two thousand dollars."

Signed: Peter K. 44) Cade, the owner of Cade Body Shop, Inc. is in the habit of paying business expenses from his personal checking account. One such check to Parts Warehouse, Inc. is dishonored, and Parts attempts to collect from Cade personally who asserts that only Cade Body Shop, Inc. is liable.

Discuss the legal resolution of this problem.

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45) Donna is the holder of a note that has been indorsed so many times that there is no space left on the back of the note for indorsements. Donna wants to transfer the note for $200 to Acme Finance, but wants to indorse on the face of the note "without recourse, Donna ". Acme wants to staple a sheet of blank paper to the note and have Donna simply sign "Donna" there. Discuss whether Donna or Acme is correct concerning the location of Donna's signature and if Donna is legally entitled to indorse "without recourse."

46) Ashe indorses an order instrument in the following manner: "Pay to Big Bank, for deposit only, Ashe." Discuss the types of indorsements and the legal implications the instrument represents.

47) When Hanson received her paycheck, she indorsed it in blank, placed it on her desk, and went to get a cup of coffee. The check accidentally blew out of an open window. Matson, a stranger to Hanson, found the check on the sidewalk below, took it to a bank, and cashed it. Was the transfer of the check to the bank a negotiation? Why or Why not?

48) Andrews forged the signature of Baumann on a check and gave it to Callas in payment for merchandise. Callas indorsed the check and delivered it to Davis as down payment on a car.

When Davis presented the check to the bank for payment, the forgery was recognized. Callas claimed that he was not liable to Davis because he had no knowledge of the forgery. Discuss.

49) Sarah gives a negotiable note for $5,000 to Roofing Contractors. Roofing cleverly alters the note to $7,000 and negotiates the note to Bigger Bank for consideration. When this alteration is discovered, discuss what recourse Bigger Bank will have against Sarah and Roofing.

50) Shawn was an indorser on a check. A subsequent holder presented the check to the bank named on the instrument and was informed that there was not enough money in the account to honor the check. The next day, the subsequent holder demanded the money from Shawn. Must Shawn pay the subsequent holder of the instrument? Why or why not?

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Business Law with UCC Applications, 15e (Sukys) Chapter 17 Holders in Due Course, Defenses, and Liabilities 1) A holder in due course of a negotiable instrument always has more rights than previous holders of the instrument.

2) To be a holder in due course, the person in possession of the instrument must first give consideration and then be an indorser.

3) A person can become a "holder in due course" if she takes an instrument as a gift, and without notice that anything is wrong with the underlying transaction.

4) Sarah received a negotiable instrument as a birthday present and is now a holder in due course of the instrument.

5) An alteration that involves changing the payee's name may be used as a personal defense.

6) A lack of good faith will be imputed to a party when she is negligent in discovering something is wrong with the instrument.

7) Regardless of circumstances, an acceptor of a draft is obligated to pay an instrument without reservations.

8) Regardless of the holder's actions, she may stipulate that she will not acquire the rights of a holder in due course if she cannot qualify as a holder in due course.

9) Fraud in the inducement is a real defense against holders in due course.

10) Assume there is a material alteration, but the holder took it in good faith and for value. The holder has a real defense and is not required to pay on the instrument.

11) When Tina was fifteen years of age, she bought a car from Sam and signed a promissory note payable five years later. Sam negotiated it to Neighborhood Bank, who comes to collect on the note. Tina's age is a personal defense against Neighborhood Bank that allows her to disaffirm the payment.

12) If Spader is considered insane and crazy by his parents and close friends, any checks he writes will be considered void.

13) A check given in Colorado (where gambling is illegal) to pay a gambling debt in Nevada (where gambling is legal) provides a real defense to payment, even against a holder in due course.

14) Duress is a personal defense for payment against holders in due course.

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15) The holder in due course of a note discharged in bankruptcy can never collect any funds because bankruptcy is a real defense against payment.

16) Xena writes a check on her Boise Bank account to Hercules in the amount of $1,000, and gives it to Mutley. On the way to give Hercules the check, Mutley expertly alters the check by adding an extra "zero," to make it $10,000, payable instead to Mutley. Boise Bank honored the check payable to Mutley in the amount of $10,000. Regretfully, Xena has no recourse against Boise Bank.

17) Only the acceptor of a draft is obligated to pay an instrument without reservations of any kind.

18) The maker of a bearer note that has not been negotiated is obligated to pay the draft to anyone who is holding the instrument.

19) Presentment can only be made in person by the holder of the instrument, properly identified.

20) The modern concept of 'value' emerged from within the practices of the medieval principles of the Law Merchant.

21) A holder in due course must show that he took the instrument (1) for fair value, (2) in good faith. and (3) without any alteration.

22) A holder in due course of a negotiable instrument: A) can receive more rights than the previous holders.

B) cannot transfer greater rights than they have themselves.

C) can take an instrument even when it is not indorsed to him or her.

D) is a person to whom the instrument is transferred as a gift.

23) Green Grocer Wholesale, Inc. received an $850.00 check from Bob for a grocery purchase.

The check was from Forest Enterprises to Ana and had been indorsed to Bob who, in turn, indorsed the check to Green. The clerk at Green failed to carefully examine the check, not noticing that the number 5 had been changed to an 8. Green Grocer has: A) not taken the instrument in good faith.

B) taken the instrument in good faith.

C) not taken the instrument in good faith to $500.

D) taken the instrument in good faith to $300.

24) On May 15, 2015, Jason indorsed a check dated January 15, 2015, and payable by him to ALS Check Cashing Service. ALS: A) can be a holder in due course, even though the check is antedated.

B) cannot be a holder in due course as it has notice that the instrument is overdue.

C) cannot be a holder in due course only if ALS contacted the drawer who agreed to honor the check.

D) can be a holder in due course only if ALS contacted the drawee who agreed to honor the check.

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25) Ted gave Stanley a $300 negotiable note for repairs to his car. Stanley did not do the repairs, but indorsed the note to Nami who did not know of Stanley's lack of work and paid Stanley for its note. Nami gave the note to her daughter, Sopan, for Christmas and Sopan attempted to collect the note. What is Sopan's legal status?

A) Sopan is not a holder in due course, but has the rights of a holder in due course.

B) Sopan is not a holder in due course and has no rights of a holder in due course.

C) Sopan is not a holder in due course, but does qualify as a holder in gift status.

D) Sopan has no rights, since she did not give consideration.

26) Personal defenses are defenses that can be used against: A) natural persons, but not corporations.

B) a holder in due course of a negotiable instrument, but not a holder.

C) a holder, but not a holder in due course of a negotiable instrument.

D) any party with whom the holder in due course has dealt with.

27) When one of the parties to a contract has failed to do what he or she has previously agreed to do, it is a: A) fraud in the inducement.

B) failure of consideration.

C) breach of contract.

D) lack of delivery.

28) A defense that may not be used against a holder in due course of a negotiable instrument is a: A) limited defense.

B) personal defense.

C) real defense.

D) secondary defense.

29) Which of the following is true of using the defense of failure of consideration by a maker or drawer of an instrument?

A) It can be used when the instrument is negotiated to a holder in due course.

B) It can be used when no consideration exists in the underlying contract for which the instrument was issued.

C) It can be used when one of the parties breaches the contract by not furnishing the agreed consideration.

D) It can be used if a party, induced by a fraudulent statement to enter a contract, is the holder of a negotiable instrument issued as part of the transaction.

30) Carl finds a lost dog and returns it to its owner, Betty. Betty gives Carl a check for $50 for his efforts, but later stops payment on the check. Carl cashed the check at Cash-All-Checks, who now seeks to recover from Betty. Will Cash-All-Checks be successful?

A) Betty has a real defense against Carl and Cash-All-Checks.

B) Betty has no defense against Cash-All-Checks, hence the latter will be successful.

C) Betty has a personal defense that allows Cash-All-Checks to be successful.

D) Betty has a defense against Cash-All-Checks since the check is less than $100.

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31) Which of these is true regarding "failure of consideration" and "lack of consideration"?

A) They are real defenses which can be used against holders in due course.

B) Failure of consideration is a real defense and lack of consideration is a personal defense.

C) Failure of consideration is a personal defense and lack of consideration is a real defense.

D) They are personal defenses which cannot be used against holders in due course.

32) Thomas signed a blank promissory note and placed it on his office desk. Kelly, also present there, pilfered the note. The note ended up in the possession of Big Bank. What defense to payment does Thomas have?

A) Contributory negligence B) Lack of delivery C) Failure of consideration D) Lack of possession 33) According to the FTC's ________, holders in due course who possess consumer credit contracts are subject to all claims and defenses that the buyer could use against the seller.

A) shelter provision B) holder in due course rule C) lack of consideration rule D) universal defense rule 34) Which of the following is true of real defenses?

A) Real defenses can be used against holders, but not holders in due course.

B) Anyone who has a real defense is required to pay an instrument.

C) Real defenses can be used against everyone, including holders in due course.

D) Real defenses include breach of contract, failure or lack of consideration, fraud in the inducement, and payment.

35) Tom gave celebrity Lynnetta Landau a blank sheet of paper and asked her to sign her autograph on it. Then, without Lynetta's knowledge, Tom wrote a promissory note made payable to him for $3,000 above her signature. This kind of fraud is known as fraud: A) as to the essential nature of the transaction, which may not be used as a defense against a holder in due course.

B) as to the essential nature of the transaction, which may be used as a defense against a holder in due course.

C) in the inducement, which may not be used as a defense against a holder in due course.

D) in the inducement, which may be used as a defense against a holder in due course.

36) Any person who ________ contributes to the ________ of an instrument ________ exercise the defense of ________ against a holder in due course who pays the instrument in good faith.

A) negligently; fraud in the inducement; may; alteration B) negligently; presentment; may not; alteration C) intentionally; material alteration; may; alteration D) negligently; material alteration; may not; alteration 4 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

37) Mark is mentally incompetent and delights in signing documents. Henry persuades Mark to sign numerous promissory notes which he negotiates. Must Mark pay these notes if they have been held by holders in due course?

A) Mark must pay these notes since duress is not involved.

B) Mark does not have to pay these notes since he has a real defense.

C) Mark must pay these notes since there is a fraud in the inducement.

D) Mark may not pay these notes since no one could anticipate this happening.

38) A(n) ________ of a note is required to ________ the instrument without reservations of any kind.

A) indorser; pay B) maker; pay C) drawer; transfer D) maker; assign 39) Indorsers are obligated to make the payment only when the: A) instrument has not been properly presented to the drawee or party obliged to pay the instrument.

B) instrument is not dishonored.

C) notice of dishonor is not given to the secondary party within the time and manner mentioned.

D) instrument has been properly presented to the drawee or party obliged to pay the instrument, and payment must be demanded.

40) ________ means a demand made by a holder to pay or accept an instrument.

A) Dishonor B) Presentment C) Alteration D) Real defense 41) Dishonor means: A) fraud in the payment method.

B) deception in the amount of payment.

C) refusal to pay a negotiable instrument.

D) an extension of payment.

42) Bob purchases a $1,000 negotiable promissory note from a stranger for $100 that appears to be valid. Will Bob qualify as a holder in due course?

43) Tammy purchases a promissory note that has numbers scratched out and rewritten. What legal problem will Tammy encounter in claiming to be a holder in due course of the note?

44) LeVoe wrote a check for $1,200 to the order of Henry Smith and delivered it to Smith in payment for a used car that Smith said had a rebuilt engine. Smith indorsed the check and delivered it to Kraus. LeVoe stopped payment on the check when she discovered that the engine had not been rebuilt. Analyze the case.

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45) Callaghan bought a bedroom set from a furniture store and signed a consumer credit contract agreeing to pay $150 in 12 monthly installments. The furniture store immediately negotiated the credit contract to a finance company, with which it had an arrangement, and received payment.

The furniture turned out to be defective. Discuss if Callaghan can use the defense of defective furniture against the furniture store and the finance company for the money owed.

46) Ten-year-old Felicity fell in love with a golden retriever puppy which she saw in the window of Pet World. She decided to use the money she had saved from her paper route to buy the dog and wrote a $300 check, payable to Pet World. Does Pet World qualify as a holder in due course?

47) In exchange for some illegal drugs, Popka wrote a $500 check to White. Immediately thereafter, Popka stopped payment on the check. Can White recover the $500 from Popka in court? Explain.

48) A demand negotiable note for $500 issued by Sabin and given to Norm is altered to read $5,000 and subsequently presented for payment by Bridget, a holder in due course. Discuss the case.

49) Shane carefully wrote a check for $300 and gave it to Ethos Art Gallery for the purchase of a painting. Ethos raised the check to read $800. Shane's bank honored the altered check. Analyze the course of actions Shane could take.

50) Charles writes a check payable to Jane on his account at Friendly Bank. Friendly accepts the check, but subsequently determines that there are insufficient funds in Charles' account to pay the check. Explain what liability Charles has.

51) Big Bank is unable to provide notice of dishonor for three days because a fiber optic cable was accidentally cut by a construction worker. Will Big Bank be liable for its failure to act in a timely manner?

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Business Law with UCC Applications, 15e (Sukys) Chapter 18 Bank-Depositor Relationships and Cyber-Banking 1) When an overdraft occurs, the bank becomes the customer's agent.

2) If Nina deposits a check from Rico's bank into her bank that was made payable to her by Rico, any settlement given by Nina's bank is provisional.

3) Boise Bank becomes a debtor to Juanita when she deposits money into her account at Boise Bank.

4) Because she was traveling, Julie finally deposits her check dated May 1, 2017 on the first business day of the new year, January 2, 2018, into her account at Boise Bank. Boise Bank is obligated to pay the check.

5) On July 15th, the day he died, Sam wrote a check to Century Link to pay for his phone and Internet. On July 20th, an announcement of Sam's death was published in the local paper. But the check, along with others, sat on Sam's desk until August 15th, when the executor mailed them.

Sam's bank must pay this check.

6) A stale check is a check that is presented for payment more than 60 days after its date.

7) The offering of a forged instrument to another person when the offeror knows it to be forged is known as uttering.

8) Regulation CC requires banks to make all deposited funds available to depositors within twenty-four (24) hours, or the next business day.

9) Ivan receives his June 2018 Friendly Bank statement and promptly calls the bank to report a series of forged checks shown on the statement dating back to March 2018. Friendly Bank must credit Ivan's account for the forged checks.

10) A written stop payment order is effective for fourteen (14) calendar days.

11) Janice and her daughter have a joint checking account. The basic insurance coverage by the FDIC can protect this account only up to $250,000.

12) A depositary bank is the first bank to which an item is transferred in the course of collection.

13) On August 1st, Jim writes a check to Angela drawn on his account at Fidelity Bank. Angela deposits the check into her Boise Bank account on August 5th. In this case Jim's bank is the payor bank and must settle its accounts by midnight on August 5th.

14) When a check is deposited in the payee's own account in a depository bank, any settlement given by the depository bank is provisional until the next banking day at midnight.

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15) Under the Check 21 Act, checks may have a shorter float time and banks honor small overdrafts.

16) Under the Check 21 Act, bank customers have an absolute right to see their original checks.

17) Under the Check 21 Act, an image replacement document is also called a substitute check.

18) Cindy's liability for the unauthorized use of her ATM card is limited to $500 if she notifies the bank after ninety (90) days of discovery.

19) A business receiving money by electronic transfer is known as the beneficiary.

20) The Electronic Fund Transfer Act applies to transactions only between banks and businesses.

21) Which of the following is true of the relationship between the drawee bank and its customer?

A) The drawee bank becomes a creditor and the customer becomes a debtor at the time of opening a checking account.

B) The drawee bank becomes an insurer and the customer the insured at the time of opening a checking account.

C) The drawee bank becomes the customer's debtor at the time of opening a checking account and agent while collecting checks.

D) The drawee bank becomes a debtor to the customer when the bank pays more than the customer has on deposit.

22) Chuck deposits his paycheck drawn on Big Bank at Small Bank, and his account is credited with this deposit. Three days later, Chuck is notified by Small Bank that his paycheck has been dishonored by Big Bank due to insufficient funds, and the amount of the check has been deducted from Chuck's Small Bank account. Which of the following is true of this situation?

A) The settlement by Small Bank was provisional and was rightfully rescinded since the paycheck was dishonored.

B) Small Bank acted too slowly and did not comply with the prescribed schedule of Regulation CC. C) Big Bank is the payor bank and hence, must reimburse Small Bank, the depositor bank.

D) Small Bank cannot credit Chuck's account until it is certain that Big Bank will honor the check.

23) Which of the following is true of a bank's duty to honor checks?

A) The drawee bank is not under a duty to honor all checks drawn by its customers in presence of sufficient funds in the customers' accounts.

B) If there are insufficient funds on deposit, the bank may charge the customer's account if it does not create an overdraft.

C) If a bank fails to honor a check because of a mistake on its part, the bank is liable to the customer for damages the customer suffers.

D) The drawee bank has a liability to the holder of the check, regardless of whether the check is certified.

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24) A(n) ________ is a check that is presented for payment more than six months after its date.

A) overdraft B) postdated check C) antedated check D) stale check 25) Omar receives a check from Trudy drawn on Shelfari Bank. Shelfari Bank improperly dishonors the check when Omar attempts to cash it. Which of the following is true of this case?

A) Omar is the holder of the check, and hence, has recourse against Trudy, the drawer.

B) Shelfari Bank, the drawee bank, is liable to Omar, the holder, for improperly dishonoring the check.

C) Omar has recourse against both the parties—the drawer, Trudy, and the drawee bank, Shelfari Bank.

D) Omar has recourse against Shelfari Bank, in case Trudy does not reimburse Omar.

26) Kelley offers Hamilton a $20,000 check which she knows has been forged. Her offer is best known as: A) chiseling.

B) uttering.

C) altering.

D) remitting.

27) How does a bank verify the signature of its customers?

A) By the substitute check held by the bank for reference purposes B) By the signature card filled in by the customer when the account is opened C) By the signature provided in documents such as passports, ID cards, etc.

D) By the pin number provided by the bank with the ATM card 28) Jodie deposits a $527 check from the IRS made payable to her in her checking account.

When will the $527 be made available to her?

A) Within seven business days of the date of her deposit B) Within three business days of the date of her deposit C) Within ten business days of the date of her deposit D) The next business day following the date of her deposit 29) Which of the following is true of a bad-check statute?

A) The payee does not have the obligation of informing the drawer of the nonpayment of the check.

B) Bad-check statutes are effectively used as a means of collection.

C) The payee can prosecute the drawer immediately after being notified of a bad check by the drawee bank.

D) The drawee bank can prosecute the payee in case of dishonor of a check.

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30) The absolute time limit for notifying a bank of a forged or altered check is ________ from the time the depositor receives the bank statement.

A) fourteen days B) thirty days C) one year D) three years 31) Winston was going to be out of town on September 1, when his rent would be due. On August 20 he gave his landlord Becky a check dated September 1, with instructions not to deposit or cash the check until September 1. As the instructions to Becky were clear, he did not notify the bank of the postdated check. On August 21, Becky deposited the check in her account at her bank and the check was dishonored on August 23. Which of the following is true of this scenario?

A) Winston has recourse against Becky as she did not follow his instructions.

B) Winston has recourse against Becky and the bank since it failed to refuse the item when deposited.

C) Winston has recourse against the bank as it failed to notify Winston of the check acceptance and failed to refuse the item when deposited.

D) Winston did not notify the bank not to pay it before the date on the check, hence he has no recourse.

32) An oral stop payment ordered by a drawer is valid: A) for 14 calendar days only.

B) if it is received in time and in such a manner as to afford the bank a reasonable opportunity to act on it.

C) for only one year, unless renewed in writing.

D) only on limited items payable on his or her account, and cannot be used for checks with a value of $500 and above.

33) The first bank to which an item is transferred for collection is called a(n) ________ bank.

A) local B) remitting C) depositary D) intermediary 34) If a bank pays a check in cash to the payee, and the check is returned to the drawer with the next bank statement, the bank's settlement is said to be: A) provisional.

B) final.

C) in due course.

D) honored.

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35) If a bank uses a substitute check, it makes which of the following warranties?

A) It is not a legal equivalent of the original check.

B) It contains an accurate image of the front and back of the original check.

C) The drawer, indorser, or the depositary bank will be asked to pay a check that has already been paid.

D) Original checks have to be presented to the drawee bank for payment.

36) A consumer has the right to claim an expedited credit if the customer asserts in good faith that the: A) bank charged the consumer's account for a substitute check that was not given to the consumer.

B) check was not properly charged to the consumer's account.

C) consumer did not suffer a resulting loss.

D) production of another substitute check is necessary to determine the validity of any claim.

37) Tammy's ATM card is stolen. If she notifies the issuer of the card of the theft within two business days of theft, Tammy will be liable for ________ of unauthorized use.

A) $50 B) $100 C) $500 D) $1,000 38) Electronic ________ is a system in which funds are electronically transferred from a customer's checking account, eliminating the need to process a paper check.

A) fund transfer B) check transfer C) check conversion D) teller system 39) Planter, Inc. sold $100,000 in plants and plant supplies to Ace Corporation. When the supplies were delivered to Ace, Ace ordered its bank, Fourth National, to pay $100,000 to Planter. Fourth National debited Ace's account and ordered Chase Superior, Planter's bank, to credit Planter's account for $100,000. In this transaction: A) Planter is the originator and Ace is the beneficiary.

B) Ace is the originator and Chase Superior is the beneficiary.

C) Ace is the originator and Planter is the beneficiary.

D) Fourth National is the beneficiary and Chase Superior, the originator.

40) The Identity Theft Penalty Enhancement Act added a new crime called ________ to the original statute.

A) aggravated identity theft B) fraudulent misrepresentation C) uttering D) identity violation

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41) Small Bank mistakenly dishonors a $5,000 check written by its customer, Wanda, to Hyram Real Estate as a down payment for a new home. As a result of the dishonor, Wanda's closing is delayed by thirty days. She incurs $500 extra rental expenses, $1,000 in attorney's fees and home mortgage interest rates increase by one half percent before her closing. Hyram deposited the $5,000 check in its account and suffered $300 in NSF charges when credit for the deposit was withdrawn. Discuss the liability of Small Bank to Wanda and Hyram.

42) Ashton Bank knows that its customer, Juan, has died. One day after Juan's death, Ashton Bank was presented a check for clearing of $3,000. The check was written by Juan a week prior to his death to Bailey Enterprises. Discuss the legal rights of Bailey Enterprises.

43) Chambers wrote out a check to Smith for $300. Smith attempted to cash the check at Chambers's bank, but the bank refused to honor it even though there was enough money in Chambers's account. Can Smith sue the bank for refusing to honor the check? Explain.

44) While cleaning out her desk, Chen found a certified check she had received eight months earlier and had forgotten to cash. When she brought the check to the bank on which it was drawn, the bank refused to cash it. Discuss the legal rights of the parties in this case.

45) Linda's checkbook is stolen on January 1 and three checks are forged on her account at Strata Bank. This first appears on a bank statement delivered to her on February 15, but Linda does not examine the statement until March 5. She reports the forgery to the bank on March 6. The other two forged checks do not appear on other bank statements until April 15, and Linda reports them to the bank on April 20. Discuss the case.

46) Oliver wrote a check to Greg Motors for $4,000 drawn on Uphill Bank in payment for a secondhand car. Greg Motors deposited the check in its account at Seventh Day Bank, which sends the check to Uphill Bank for collection. Oliver's car broke down before he reached home that evening, and he contacted his bank to stop payment on the check. Discuss what Uphill bank must do with the check to ensure a stop payment.

47) Josie writes a check on January 15 to Rusty Enterprises, but later realizes that the merchandise she purchased was of poor quality. She gives a stop payment order to the bank on January 20. Her bank has the check in its possession and is accepting it as she completes her stop payment order. Her bank pays the check, and Josie demands that her account be recredited.

Discuss the legal aspects of this situation.

48) Dreamwork Bank uses the substitute check procedure to rapidly obtain payment of items deposited by its customers. An employee of the bank fraudulently alters some substitute checks so that they are for greater amounts than the original paper check and embezzles the difference.

Discuss the bank's warranties in this situation.

49) Jill's account with Small Bank is improperly charged with a $3,000 substitute check that was actually Bob's check drawn on Small Bank. Discuss Jill's legal rights and what she must do to rectify this situation.

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50) Al is considering making a purchase from an online merchant. Discuss the relative advantages Al has if he uses a credit card or a debit card for the purchase.

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Business Law with UCC Applications, 15e (Sukys) Chapter 19 Insurance 1) Insurance transfers the risk of economic loss—for a fee—from the insurance company to the insured.

2) Johnny pays $600 for six months of automobile insurance. Johnny's payment is called the automobile risk assessment.

3) An insurance policy is a bilateral contract and consideration arises from the premiums paid by the insured and the promise of the insurer to pay money to the beneficiary if a certain event happens.

4) Ted, one of the partners in a two-man consulting partnership with Sam, is told by his insurance company that he does not have an insurable interest on the life of his partner, Sam. Generally, the insurance company is correct to deny Ted. 5) Indemnification means that an insurance company can 'step into the shoes' of the insured and sue any party whom the insured could have sued.

6) Carl takes out insurance on his life and names a friend, Roy, who happens to be a homeless veteran, as beneficiary of his policy. Roy cannot collect the life insurance when Carl dies because Roy has no insurable interest on Carl's life.

7) The cash surrender value of a straight life insurance policy equals the face value of the policy at a stated age (usually ninety-five or hundred years), less 10% handling and service charges.

8) During inflationary times, when bank interest rates are low, insurance policies are usually poor sources for loans at low interest rates.

9) In a decreasing term insurance, the premium stays constant from year to year, but the amount of protection (death benefit) decreases over the years.

10) Rosie takes out a general life insurance policy naming Margarita as beneficiary, but Rosie sadly commits suicide three years later. Although the policy is silent, the insurance company claims Margarita, the beneficiary, may not collect the insurance because Rosie committed suicide.

11) Tia is severely injured in an auto accident and dies 45 days later from these injuries. Her beneficiaries may not collect under a double indemnity provision because it is beyond 30 days of the accident.

12) Jose is permanently disabled after a car accident. Jose will be excused from paying premiums under the guaranteed insurability option.

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13) Inland marine insurance covers goods that are moved by land carriers such as rail, truck, and airplane.

14) Property insurance premiums remain consistent, regardless of the amount of the deductible.

15) Before David's premium is received, David's house suffers $5,000 of water damage due to the fire department fighting a fire at his house. David may recover for this loss under his fire insurance policy.

16) Under bodily injury liability automobile insurance, the insurer is liable for damages up to $50,000 per incident.

17) If Viva, who is 38, has low income, she automatically qualifies for Medicare, a federally funded health insurance program.

18) To avoid risk while waiting for an insurance policy to be formally accepted, an insured may choose to have the insurer issue a 'lapse policy' to provide interim coverage.

19) Sagan forgets to list in his health insurance application that he broke his arm at age five. If discovered, he would be automatically be denied coverage based on fraudulent concealment.

20) When the insurance company gives up one of its rights to help the insured, the company has made a warranty.

21) The ________ accepts the risk of loss in return for a premium.

A) insured B) insurer C) beneficiary D) benefactor 22) Kaycee obtains fire insurance on an empty warehouse. Later, Kaycee manufactures and stores fireworks in the building. A lightning strike in a thunderstorm explodes the fireworks and destroys the building. The fire insurance policy is: A) valid, since the building was empty when the policy was obtained.

B) void, since a material change in risk occurred.

C) voidable if the lightning was not foreseeable.

D) valid, since there are negligible liabilities which applies to storing fireworks.

23) Faith owes $50,000 to Investment Lenders, Inc., a partnership of Cindy and Ryan. She is also a partner with Tom in a business venture. What insurable interests exist in this situation?

A) Faith has an insurable interest in the lives of Cindy and Ryan.

B) Investment Lenders, Inc. has an insurable interest in Tom, but does not have an insurable interest in Faith.

C) Only Tom and Faith have insurable interests.

D) Tom and Faith have insurable interests in each other's lives and Investment Lenders, Inc. has an insurable interest in Faith.

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24) What type of insurance policy requires the payment of premiums throughout the life of the insured and pays the beneficiary the face value of the policy upon the insured's death?

A) Limited-payment life insurance B) Universal life insurance C) Straight life insurance D) Term life insurance 25) Universal life insurance allows the policy owner to modify the: A) face value of the policy and the premiums.

B) face value of the policy, but not the premiums.

C) premiums, but not the face value of the policy.

D) face value of the policy and obtain refunds of premiums already paid.

26) ________ insurance offers protection alone, and is the least expensive kind of life insurance.

A) Straight life B) Universal life C) Limited-payment life D) Term 27) Bill has a $500,000 life insurance policy naming his minor children as beneficiaries. Bill is shot and killed while breaking into his neighbor's home. Will Bill's children likely be able to collect the life insurance proceeds?

A) No, policies often do not cover the insured when he/she violates the law.

B) Yes, as it would not be against public policy for beneficiaries to receive insurance proceeds in such a case.

C) Yes, but not entirely. They will be given an allowance for necessaries with the balance going to others.

D) No, all the proceeds will go to a state administrated crime victims' fund.

28) If an insured purchases a guaranteed insurability provision on a life insurance policy, the: A) insured is allowed to pay an extra initial premium in exchange for an assured option to buy more insurance at certain specified times later with no questions asked.

B) insurer is allowed to excuse the insured from paying premiums if the insured becomes disabled.

C) insured has to pay an extra $25 in exchange for a guarantee of coverage by the insurance, should the insured become disabled.

D) insurer has to pay double the amount of the policy to the beneficiary if the insured dies from accidental causes.

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29) A(n) ________ is an amount of any loss that is to be paid by the insured and can be a specified dollar amount, a percentage of the claim amount, or a specified amount of time that must elapse before benefits are paid.

A) loan value B) deductible C) annuity D) cash surrender value 30) Which of the following is true of coinsurance?

A) It is rarely found in property insurance policies.

B) It allows the insured to pay an extra premium initially in exchange for a guaranteed option to buy more insurance at certain specified times later.

C) It excuses the insured from paying premiums if he or she becomes disabled.

D) It is a provision under which the insurer and the insured share costs, after the deductible is met, according to a specific formula.

31) A protection that insures property that cannot be covered by specific insurance because the property is constantly changing in either value or location is referred to as a(n): A) floater policy.

B) collision insurance.

C) annuity.

D) coinsurance.

32) Lucia had a homeowner's insurance policy on her house. While she was away on vacation, her porch got burned to the ground. After the fire, her house was burglarized and goods worth thousands of dollars were stolen from it. When Lucia arrived home, she called the police. While a police officer was interviewing her in her dining room, a chandelier fell on him and knocked him unconscious. Which losses will Lucia's homeowner's policy cover?

A) The losses due to theft and the injuries sustained by the officer, but not the losses incurred by the fire.

B) The losses due to fire and the injuries sustained by the officer, but not the losses incurred by theft.

C) The losses incurred due to fire and theft, but not the injuries suffered by the police officer while on her property.

D) The losses incurred due to fire and theft as well as the injuries suffered by the police officer while on her property.

33) ________ coverage permits a driver to buy optional coverage, such as personal injury insurance, that would allow him or her to receive payment without bothering to determine fault.

A) Comprehensive B) Add-on C) Threshold D) Collision

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34) The insurance company's liability under comprehensive coverage is limited to the ________ of the vehicle at the time of the loss.

A) actual cash value B) outstanding loan value C) replacement value D) stated value 35) Peter lost control of his car and drove it though his neighbor Clyde's fence. If Clyde were to bring a claim against Peter for the damage to the fence, what type of insurance would Peter need to cover the damage?

A) Homeowner's insurance B) Property damage liability insurance C) Collision insurance D) No-fault insurance 36) An uninsured motorist drove through a red light and hit the passenger side of David's car.

David, the driver, suffered a concussion, and the passenger, Jayne, broke her right arm and leg.

David's car sustained extensive damages that would cost $2,000 to repair. If David has uninsured-motorist insurance, the coverage will: A) protect David, but not Jayne.

B) protect David and Jayne and reimburse David for the $2,000 in damages to his car.

C) protect David and Jayne, but not cover any of the damages to David's car.

D) cover any injuries sustained by the uninsured motorist, to prevent the motorist from suing David.

37) Stanley falls into the low-income group. Which of the following health care plans can Stanley opt for?

A) Medicaid B) Long-term care insurance C) Medicare D) Mediclaim 38) A(n) ________ will provide temporary insurance coverage until the policy is formally accepted.

A) premium B) adhesion contract C) warranty D) binder 39) Joe had made an agreement with Auto Insurance Co. not to use his van for commercial business purposes when he purchased auto insurance. Joe had an accident while delivering pizzas for Bigger Pizza, Inc. For which type of violation will Joe not be covered under his insurance?

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40) In most states, an innocent misrepresentation by the insured would make the policy: A) voidable by the insurer.

B) voidable by the beneficiary.

C) enforceable, since there was no intentional misconduct.

D) enforceable to a reasonable amount as determined by the court.

41) While Leah and Grant were lawfully married, Leah had purchased a $500,000 life insurance policy on Grant's life, naming herself as the beneficiary. Subsequently they got divorced and Grant died a year later. Grant leaves two surviving children, Tom and Cindy. Who is likely to receive the proceeds of the $500,000 life insurance policy?

42) Titan Insurance Co. pays the damages for Anna's car. The damages were a result of an accident caused by Earl, who was drunk while driving. Discuss Titan's legal rights in this situation.

43) At 18, Jackson purchased a straight life insurance policy with a face value of $20,000. At a later time, he borrows a loan value against the cash surrender value of the policy. However, Jackson dies unexpectedly while the loan is still outstanding. Discuss the case.

44) Grant, a construction worker, purchased a double indemnity option from his life insurance company. Several years later, Grant was seriously injured in a construction accident. Four months after the accident, Grant died as a result of the bodily injuries he sustained in that accident. When Grant's wife, the beneficiary, attempted to collect double the amount of the policy, the insurer informed her that she was only entitled to the original amount of coverage.

Analyze the case.

45) Taft takes out an insurance policy on his wife, Kathryn, when he learns that she is to be stationed in another country that is at war. She gets killed while on duty in the war zone. Can Taft collect on the life insurance policy? Explain.

46) Juanita's grandfather loans valuable artwork to the Art Museum on the condition that the same will go to Juanita if the museum closes. She wants to purchase property insurance on the art work because she feels that it would be a great loss if any mishap occurs. Discuss the legal implications of this situation.

47) Malone purchased a painting by Van Gogh and took out a $1 million insurance policy on it.

He later sold the painting, but continued to make payments on the policy. When the painting was destroyed by vandals, Malone tried to collect $1 million from the insurance company. Evaluate the situation.

48) Logan's building has a replacement cost of $500,000 and his fire insurance policy has an 80% coinsurance clause. Logan has $200,000 of insurance on the building which is completely destroyed by fire. Discuss how much Logan will collect from the fire insurance policy.

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49) Melinda hits a hole in the road while driving down the highway. Her car's axle breaks, resulting in $2,500 of damages. Discuss if Melinda has coverage under any form of auto insurance.

50) Lane mails a $600 check for his $50,000 home policy with Surround Insurance Co. two months late. Surround cashes the check. Two weeks later, the house is destroyed by fire. When Lane attempts to collect the $50,000 in policy proceeds, Surround asserts that the policy had lapsed and offers to refund the $600 payment. Discuss the legal rights and obligations of Lane and Surround Insurance Co.

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Business Law with UCC Applications, 15e (Sukys) Chapter 20 Mortgages, Land Contracts, and the 21st-Century Financial Crisis 1) Only real property can be used to collateralize a debt.

2) If Linda puts up her land as collateral for a loan from Small Bank, she is the mortgagor.

3) An adjustable-rate mortgage involves no government backing unless the interest rate rises by 1%.

4) If Jake signs a graduated-payment mortgage, he will pay a variable interest rate but make fixed monthly payments over the term of the loan.

5) A balloon-payment mortgage is a type of loan that allows older homeowners to convert some of the equity in their home into cash, while retaining ownership of their home.

6) A home equity loan does not require court action to sell property upon default of the debtor.

7) When a borrower does not qualify for a conventional mortgage, he will automatically qualify for a subprime loan.

8) If a property owner executes a junior mortgage on a parcel with an existing mortgage, the junior mortgage is superior to the first.

9) A mortgagor has the right to equity of redemption.

10) Fred Farmer, the mortgagor, is automatically entitled to a jury trial when Big Bank attempts foreclosure on his farm.

11) The mortgagor has the unrestricted right to sell, assign, or transfer the mortgage to a third party.

12) If Carol purchases a home owned by Joe that has a mortgage, she agrees to assume Joe's debt.

13) A security interest is created by a security agreement, which identifies the goods and is signed by the creditor.

14) To be effective, a security interest must be legally enforceable against the debtor. This legal enforceability is known as perfection.

15) A purchase money security interest (PMSI) in consumer goods is perfected the moment it attaches, that is when the good is merely possessed by the consumer.

16) When two or more parties have unperfected security interests in the same collateral, the first to attach prevails over the other parties.

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17) Collateral may only be repossessed after going through a court with the creditor using available legal processes.

18) A financing statement must give the names of the creditor and describe the collateral with precise legal terminology.

19) A furniture store that puts up its inventory as collateral for a loan will grant the lender a floating lien.

20) Generally, a buyer of goods in the ordinary course of business prevails over others who may have a security interest in the seller's inventory.

21) A(n) ________ is a transfer of an interest in real property for the purpose of creating a security for a debt.

A) mortgage B) secured loan C) security interest D) unsecured loan 22) A point is a one-time charge equal to ________ of the principal amount borrowed.

A) one-tenth B) three percent C) one percent D) ten percent 23) Which of the following is true of conventional fixed-rate mortgages?

A) It has a rate of interest that changes according to fluctuations in the index to which it is tied.

B) It involves no government backing by either insurance or guarantee.

C) It has a fixed interest rate during the life of the mortgage, where the monthly payments by mortgagor increase over the term of the loan.

D) It has comparatively low fixed payments during the life of the mortgage, followed by one large final payment.

24) Charles sold a house to Darla with Charles holding a recorded mortgage. Darla wants to sell the house and her purchaser, Cindi, obtains a financing commitment from Small Bank, provided Small Bank is able to hold a first mortgage on the house. How will Small Bank obtain the first mortgage?

A) By paying off Darla's mortgage.

B) Small Bank mortgages take priority over private mortgages.

C) Charles may give oral consent that Small Bank will have priority.

D) By paying off Charles' mortgage.

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25) A(n) ________ loan is one in which creditors have something of value, usually called ________, which they can ________ if the debtor ________.

A) priority; collateral; sell; defaults B) unsecured; collateral; sell; dies C) unsecured; collateral; possess; defaults D) secured; collateral; possess; defaults 26) Iris is looking for a short-term mortgage that will allow her to pay fixed payments at a relatively low fixed interest rate during the life of the mortgage and one large payment at the end of the term. What kind of mortgage should Iris take?

A) A balloon-payment mortgage B) A VA mortgage C) A conventional mortgage D) A graduated-payment mortgage 27) In which type of mortgage is the loan repaid when the borrower dies or the property is sold?

A) Variable-rate mortgage B) Conventional mortgage C) Balloon-payment mortgage D) Reverse mortgage 28) Under a ________, the mortgagor conveys his or her interest in the property to a disinterested third party, known as a trustee.

A) security agreement B) mortgage C) deed of trust D) subordination agreement 29) Which of the following is true of recording a mortgage?

A) A failure to record the first mortgage would remove the obligation of the mortgagor to the first mortgagee.

B) The second mortgagee must know about the first mortgage and is exempted to record the mortgage.

C) If the mortgage is not recorded and a later mortgage is given on the same property, the old mortgage is superior to the second.

D) Recording a mortgage notifies any third party that the mortgagee has an interest in the real property covered by the mortgage.

30) The right to equity of redemption: A) is the mortgagor's (debtor's) right to pay off the mortgage in full, including interest, and thus, discharge the debt in total.

B) states that a default on one installment payment will make the entire balance due immediately, giving the mortgagee the right to collect the full amount.

C) is the mortgagee's right to apply to a court to have the property sold.

D) gives the mortgagor the right to receive each installment payment as it falls due.

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31) If the mortgagor has defaulted or has failed to perform some other agreement in the mortgage, the mortgagee has the right to apply to a court to have the property sold. This is called the right to: A) acceleration.

B) foreclosure.

C) perfection.

D) attachment.

32) An acceleration of the debt: A) increases the interest rate.

B) makes the entire amount of the debt due for immediate payment.

C) increases the monthly payment amount.

D) makes the repayment period of the entire debt one year.

33) The process of ________ occurs when many mortgages are bundled together and sold as bonds to institutions, such as pension funds.

A) perfection B) foreclosure C) acceleration D) securitization 34) A ________ loan is that which deliberately misstates the qualifications of a borrower to push a loan through the approval process.

A) NINJA B) liar C) subprime D) home equity 35) Generally, a security interest is perfected when the: A) secured party has done everything that the law requires to give the secured party greater rights to the goods than others have.

B) secured party has a legally enforceable right to take that property and sell it to satisfy the debt.

C) buyer takes the property subject to a mortgage and the seller agrees to continue paying the debt.

D) goods are sold, but regained as soon as the debtor takes possession of the new property.

36) A(n) ________ agreement is a written contract which identifies the secured goods and is signed by the debtor.

A) subordination B) security C) consumer loan D) equitable redemption

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37) A(n) ________ provision in the security agreement allows the security interest of the creditor to also apply to goods the debtor acquires at a later time.

A) forbearance B) attachment C) floating lien D) acceleration 38) A(n) ________ occurs when the ________.

A) attachment; secured party does not sign a security agreement B) securitization; debtor has no ownership rights in the collateral C) attachment; secured party transfers something of value to the debtor D) floating lien; secured party gives possession of the collateral 39) Carol borrows $50,000 to purchase seven industrial Xerox copying machines, and open up her own copy shop. The bank loan requires that Carol grant the bank a security interest in any property acquired after the original agreement is signed. After she shows the loan letter to Xerox, it agrees to sell her the copiers for $80,000 to be paid over five years. Who has priority in the copying machines?

A) The bank, if it filed and perfected its interest first B) The bank because of the "floating lien" loan agreement C) Xerox, if it filed the loan agreement before the bank did D) Xerox, because this is a purchase money security interest 40) According to the UCC, conflicting secured interests are generally resolved: A) according to whether an attached security interest in inventory has priority over a conflicting security interest in the same inventory.

B) by consumers' perfected security interests of which they have no knowledge.

C) based on whether the seller's inventory prevails over buyers of goods in the ordinary course of business (except farm products).

D) according to priority in time of filing or perfection.

41) Morey purchased a house for $150,000, paying $15,000 in cash and giving a mortgage to BigBank for the balance. When Morey defaulted on the loan, BigBank foreclosed and sold the house for $25,000 less than Morey owed. Morey believed he no longer owed BigBank any money. Discuss the case.

42) Holly bought a house for $200,000. She put down $40,000 in cash, and took out a $160,000 loan from the Midland Bank to cover the rest of the cost. However, Holly found that she could not make her mortgage payments. Midland Bank foreclosed on the mortgage, sold the house for $150,000, and told Holly that she was liable for the $10,000 difference between what she paid for it and what the bank sold it for. Did Midland act within its rights? Explain.

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43) Iko purchased a house through Stockholm Bank Pvt., Ltd. A year later, Iko wanted to make improvements on the mortgaged property and borrowed money from Jeremy, mortgaging the same property again. Jeremy is unaware of the mortgage of the house by Stockholm Bank and records the mortgage. Analyze the situation in case Iko is unable to repay both the mortgagees.

44) Hayley loans David $20,000 by taking a mortgage on David's land on February 1, but does not record a mortgage. On April 1, Gavin loans David $15,000 taking a mortgage on the same land and records the mortgage on April 4. Hayley then records her mortgage on April 8. Discuss the proceedings in case David is unable to pay either of the lenders.

45) The Raymonds financed the purchase of their house through Reed Bank, a local bank with branches in Houston, where the Raymonds lived. The family made their mortgage payments punctually each month at the nearby branch. However, without prior warning, Reed Bank assigned the mortgage to Stanley Savings Bank located in Washington. Discuss the rights of Reed Bank in making this assignment and if the Raymonds can avoid the inconvenience of dealing with Stanley Savings Bank.

46) Rae's mortgage payment check is received a day late by Big Bank. Big Bank refuses the check and accelerates the mortgage debt. Rae is unable to pay this demand, and Big Bank brings action to foreclose the mortgage. Discuss what defenses, if any, Rae has to the foreclosure action.

47) Brianna is purchasing an apartment building from Austin that already has a $500,000 mortgage on it. Brianna is uncertain if she can make money on this purchase and certainly does not want the responsibility of paying the mortgage. Discuss how Brianna might structure this purchase to avoid responsibility for the preexisting mortgage.

48) Daly and Leva entered into an agreement whereby Leva borrowed $15,000 from Daly, and Daly took a security interest in Leva's next corn harvest. The financing statement identified Daly and Leva by name and included their mailing addresses. Leva signed the statement. Can the security interest, in this case, be perfected by the financing statement filed?

49) Suri purchased a new laptop for $2,500 from Gadget World. To pay for it, she borrowed money from ATS Finance, which took a security interest in the laptop by entering into a security agreement with Suri. How will the security interest be perfected in this case?

50) Friendly Furniture Co. wants to repossess a sofa in Ed's living room, but Ed refuses to allow the repossession crew into his house. Discuss what options Friendly has.

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Business Law with UCC Applications, 15e (Sukys) Chapter 21 Bankruptcy Law: In Theory, in History, and in Practice 1) The question of whether to establish a federal bankruptcy law was the central issue in the case of Hanover National Bank v. Max Moyses in 1902.

2) People who are able to make a down payment and have a steady income may become eligible for a mortgage loan as soon as five years following a discharge in bankruptcy.

3) Chapter 7 bankruptcy petitions are filed in special bankruptcy courts within the federal court structure.

4) The first step in the 'means test' is to compare the debtor's average income during the previous six months with the median income for a family of that size in the United States.

5) In a voluntary bankruptcy filing, the bankruptcy petition itself becomes the order for relief and is effective the moment it is filed with the court.

6) The final step to determine whether a debtor will be able to file a bankruptcy petition for Chapter 7 or not, is a determination as to whether the debtor has the ability to pay unsecured debts over a three-year period.

7) The Bankruptcy Code allows debtors to maintain a minimum standard of living by exempting certain necessary items of property, including for example, professional tools, and medical supplies.

8) When a petition is filed, an automatic stay goes into effect which postpones ALL collection proceedings against the debtor.

9) Under the new Bankruptcy Code, alimony, child support, and Social Security payments are exempt up to an aggregate of $25,000 per year.

10) Chapter 11 reorganizations are only available to legal entities such as partnerships and corporations.

11) According to the priority list of property distribution in the Bankruptcy Code, administrative expenses incurred during the administration of bankruptcy are paid before secured debts.

12) Under Chapter 11, the debtor becomes a debtor in possession and continues to operate performing most of the functions of bankruptcy judge.

13) When a Chapter 11 petition is filed, the debtor has 120 days to file a reorganization plan, which must be in conformity with the creditors and accepted by the bankruptcy court.

14) To be eligible for Chapter 13, debtors must first meet with an approved nonprofit credit counselor and have unsecured debts of less than $400,000.

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15) Under a Chapter 13, creditors can force an involuntary bankruptcy filing if the debtor has a steady income.

16) A Chapter 13 petition must include a repayment plan, but priority debtors can be paid at a discount, with different rates and times.

17) Under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), Congress created a system that would require more debtors to file under Chapter 7 rather than Chapter 13.

18) Chapter 12 sets a $4,153,150 debt ceiling for farmers and is available to partnerships and corporations regardless of stock ownership.

19) Once a Chapter 12 plan is created, the trustee holds a confirmation hearing with creditors who either vote to confirm or deny the plan.

20) Under Chapter 13, agencies charged with collecting and recovering unpaid child-support payments are allowed to continue such efforts despite the bankruptcy filing.

21) In 1978, Chapters 11 and 13 of the Bankruptcy Code were created, which: A) made it easier for creditors to obtain bankruptcy relief.

B) allowed businesses and individuals to reorganize and keep going.

C) made it more difficult to declare bankruptcy.

D) allowed creditors to keep all of the debtor's assets.

22) Which of the following provides a system in which debtors are forced to sell most of their property and use the cash to pay their creditors a portion of the amount owed each one?

A) Family Farmer or Fishing Business Debt Adjustment B) Reorganization C) Liquidation D) Individual Debt Adjustment 23) Under the 2005 Bankruptcy Act, debtors are required to meet which of the following conditions file for Chapter 7 bankruptcy?

A) They must provide a federal income tax return for the most recent tax year.

B) Their income should be more than the state median income.

C) They must be involved in a fishing or farming business.

D) They should be commodity brokers or stock brokers.

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24) Joseph owes $15,000 to Carmel Enterprises, $8,500 to Vulcan Co., $11,000 to David and $11,500 to Sigma Enterprises. He has not been making payments on these debts for the past 20 months. Which of these creditors can force Joseph into involuntary bankruptcy?

A) Carmel Enterprises only B) Carmel Enterprises and David only C) Carmel Enterprises, Sigma Enterprises, David, and Vulcan Co. D) Sigma Enterprises, David and Vulcan Co. only 25) The court vests the responsibility of liquidating the assets of the debtor for the benefit of all interested parties in the: A) debtor in possession.

B) creditor in possession.

C) case trustee.

D) primary trustee.

26) Stan commits securities fraud and takes $5,000,000 from a variety of investors. Stan is convicted of a crime and then sued by the investors. Stan files for bankruptcy. What relief will the bankruptcy filing grant Stan?

A) Automatic stay on all cash advances paid to a creditor under an open-ended credit plan B) Automatic stay and discharge of any debt created with the securities fraud C) Automatic stay, but no discharge of any debt created by the securities fraud D) Automatic stay and discharge of all debts incurred 27) A(n) ________ is a self-operating postponement of collection proceedings against the debtor, which goes into effect the moment the order for relief occurs.

A) federal exemption B) involuntary petition C) automatic stay D) means test 28) Which chapter of the bankruptcy code allows a federal homestead exemption?

A) Chapter 11 B) Chapter 7 C) Chapter 8 D) Chapter 12 29) Which of the following is a duty vested in a trustee by the court, when the debtor is a business and files a Chapter 7 petition?

A) He may be authorized to operate the business for a limited period of time.

B) He may be authorized to make payments made by the debtor within 90 days before the filing of the petition.

C) He may be authorized to sell the debtor's properties and hand over the proceeds of the sales to the debtor.

D) He may be authorized to pay off the debts according to the personal priority list.

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30) In a ________, a qualified debtor creates a plan that alters the repayment schedule.

A) firm offer B) requirements contract C) reorganization D) contract for sale 31) Sear Enterprises wants to continue in business, but needs some relief from creditors' claims.

Sear Enterprises should consider filing under Chapter ________ of the Bankruptcy Code.

A) 7 B) 11 C) 12 D) 13 32) A debtor who continues to run a business and performs most of the functions that a trustee performs in other types of bankruptcy is called a(n): A) debtor in bankruptcy.

B) debtor in possession.

C) unimpaired debtor.

D) suspended debtor.

33) The only individuals specifically excluded from filing under Chapter 11 are: A) commodity brokers and stockbrokers.

B) chartered accountants.

C) lawyers and judges.

D) real estate developers.

34) Vernon owns a family run farming business. He earned $100,000 in the current financial year. He owes $70,000 that he cannot pay. This debt forms a part of his farm expenses to creditors, but he wants to keep the business running. Which type bankruptcy should Vernon file for?

A) Chapter 7 only B) Chapter 11 and Chapter 7 C) Chapter 7 and Chapter 12 D) Chapter 12 35) According to Chapter 13 of the Bankruptcy Code, which of the following statements is correct?

A) Involuntary filings are permitted.

B) The debtor should be able to pay the entire amount they owe to each creditor.

C) The debtor must have an already established steady income.

D) Corporations and partnerships can file.

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36) The maximum time period that is allowed for Chapter 13 debtors to complete the payment plan is ________ years.

A) eight (8) B) ten (10) C) five (5) D) twelve (12) 37) Of the groups listed below, only ________ can take advantage of Chapter 13 provisions.

A) self-employed people B) corporations C) partnerships D) educational institutions 38) Under Chapter 13 of the Bankruptcy Code, a debtor must begin payments within a period of ________ from submission.

A) three days B) thirteen days C) thirty days D) thirty-three days 39) Under Chapter 13 of the Bankruptcy Code, what happens if the debtor submits the repayment plan to the court, but the court has yet to hold its hearing?

A) The debtor is not required to start payments within the stipulated period of thirty days.

B) The debtor makes the payments to the trustee.

C) The debtor makes payments individually to the creditors.

D) The debts of the debtor are discharged.

40) Trudy has a steady income, but is behind on her payment of debts. Trudy wants to pay her debts, but needs some relief from her creditors. Discuss what type of Bankruptcy Procedure would best fit her case.

41) Fritz is a professional painter and owns a truck worth $10,000 and tools worth $3,000. He owns a very modest house worth $17,000. He has numerous unsecured debts totaling $500,000 and considers filing for bankruptcy. Discuss the bankruptcy alternatives for Fritz.

42) Stan has debt problems. He has unpaid alimony and child support payments. Big Bank is threatening to repossess his car because he is behind on his payments, and a variety of creditors are threatening to sue. He wants to discharge most of his debts and begin with a clean slate.

Discuss what action will help Stan's situation.

43) Joan's bankruptcy proceeding consists of the following debts: back taxes of $10,000, credit card debt of $25,000, home utility bills of $300, and a $10,000 car loan. Also, there are bankruptcy administrative expenses of $1,000. Discuss the order in which these debts will be settled.

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44) Josh, a college student, has been told by his friends that filing for bankruptcy after graduation will discharge all his student loans. Discuss if this is correct.

45) Overwhelmed by his debt, Jaime decided that he would file for Chapter 7 bankruptcy the following month. Fifteen days before he filed, Jaime took out a $3,000 cash advance on one of his credit cards, and used the money to purchase and install a hot tub in his bathroom. Jaime believed that he would be able to discharge the debt for the hot tub when he went through the bankruptcy proceeding. Was he correct in his belief? Why or why not?

46) Morgan and Flynn owned a partnership business that was facing financial difficulties. The debts of the business were getting out of hand. However, neither Morgan nor Flynn wanted to close down the business and felt that, with a few changes, they could turn the business around and make a profit. Which chapter of the Bankruptcy Code should they file under? Why? 47) Judy's Print Shop has filed for a Chapter 11 bankruptcy, and Judy wonders if her creditors, with whom she has had an increasingly abrasive relationship, will have any say in her reorganization plan. Discuss the role of the creditors in a Chapter 11 reorganization.

48) Barnaby is a farmer who receives two-thirds of his total income from the sale of oranges.

After two consecutive years of early frosts that destroyed his orange harvest, Barnaby found himself deep in debt. Seventy percent of his debt resulted from farm expenses. Can he file for Chapter 12 bankruptcy? Why or why not?

49) Tom has filed for a Chapter 13 bankruptcy and one of his creditors is attempting to organize the other creditors into a group to petition the bankruptcy judge to allow them to prepare a debt readjustment plan for Tom. Will the bankruptcy judge allow this action by creditors?

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Business Law with UCC Applications, 15e (Sukys) Chapter 22 Agency Law 1) Agency is a fiduciary relationship between an agent, a principal, and a third party.

2) The "Opening Case" involved a question of Free Exercise of Religion and the tort of clergy malpractice for the plaintiffs' injuries done by the intentional acts of a Catholic priest.

3) The terms master (employer) and servant (employee) mean that the agent is the master and the principal is the employer.

4) An independent contractor is an agent with full power to bind the principal, even if the agent is not expressly authorized to do so.

5) An employee's vicarious liability for her actions is based on the principle of respondeat superior.

6) In the "Opening Case," the main issue was whether the Society had a duty to the plaintiffs because Father Ryan was its employee.

7) For the doctrine of respondeat superior to apply, a tort must be committed while the worker was performing a non-delegable duty.

8) Generally, vicarious liability is applied to intentional tort cases because workers are usually hired to commit intentional torts.

9) An employer is always liable for an agent's or employee's crimes, unless employer did not actually aid or participate in their commission.

10) An employer may also be open to liability when the employer hires an independent contractor to perform a job that the law has not permitted the employer to delegate.

11) If John, who is the owner of COSTLESS Enterprises Inc., mentions at a cocktail party that he would love Sally (who is standing next to him) to work for him in telemarketing, he has created an agency by estoppel.

12) At Saint Alphonsus Regional Medical Center, Dr. Schwabb wears a scrub with the words "SARMC" on it. Schwabb, however, has his own practice across town and is not an employee of SARMC. If sued by a patient, Schwabb would not be liable under the doctrine of agency by ratification.

13) Carol, who is doing Mark a favor, is allowed to commingle business and personal funds in her own bank account.

14) In situations with a partially disclosed principal, agents are not entitled to indemnification if they incur a loss or are damaged as a result of a request made by the principal.

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15) An agent can only terminate an agency relationship by a written renunciation.

16) Barstock Enterprises LLC that employs Joseph as a sales agent, files for Chapter 11 bankruptcy protection. The agency continues under apparent authority principals.

17) If an agent becomes insane, it terminates the authority of the agent upon court order.

18) A durable power of attorney preserves the authority of an agent when the principal becomes incapacitated.

19) An agency coupled with an interest may be revoked unilaterally at any time by the principal.

20) When a person is entitled to receive actual notice of the termination of the agency relationship, the only way to give notice is by certified mail.

21) Thomas is named "office manager" by Bigger Co., but his precise duties are not described.

What type of authority would authorize Thomas to purchase office supplies?

A) Express authority B) Implied authority C) Apparent authority D) Operation of law authority 22) Geoffrey is an agent of Smith's Meat Products Limited. While delivering products, the company's van breaks down. What legal theory, if any, would allow Geoffrey to contract a garage for the repair of the principal's van?

A) Express authority B) Actual authority C) Apparent authority D) Incidental authority 23) Charlena, a shelf-stocker, offers Megan the post of Vice-President of Procurement to express appreciation for Megan's hard work in stocking the shelves at Charlena's store, Thrift City.

Megan creates business cards with her new title on them and uses one to purchase a new truck in Thrift City's name from Highway Auto. Which of these types of authority, if any, has Charlena given Megan?

A) Express authority B) Operation of law authority C) Apparent authority D) Charlena has likely given Megan no authority

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24) Repair Garage Company rents tools and stalls to independent auto mechanics to repair cars.

Repair Garage allows Joe to print business cards reading "Repair Garage Company—Joe, Certified Mechanic." A customer is unhappy with the repairs Joe made to her car and sues Repair Garage. What legal theory, if any, would allow Repair to be sued by the customer?

A) Express authority B) Implied authority C) Apparent authority D) Incidental authority 25) Corazon employs Josefina, a C.P.A., to represent her in tax liability negotiations with the IRS. Josefina is busy with other clients and delegates the negotiation to Lillian, a non-C.P.A. member of her office. Has Corazon impliedly agreed to this delegation?

A) Yes, Corazon is relying on Josefina's skill and integrity.

B) No, Lillian is a member of Josefina's office.

C) Yes, Corazon must approve in writing any delegation of authority.

D) No, delegations within offices happen regularly.

26) In which of the following situations can an agent legally appoint a subagent?

A) When the case involves co-agents B) When the appointment is implied from the nature of the employment C) When the situation involves a nondelegable duty D) When the co-agent demands such an appointment 27) Carlos instructs his sales agent, Edgar, not to sell on credit to Andrew because Carlos has experienced problems collecting from Andrew for prior purchases. Edgar sells on credit to Andrew, who pays properly. Has Edgar violated any obligation to Carlos?

A) No, Edgar has not violated any obligation since Andrew paid properly.

B) Yes, Edgar has violated the duty to exercise reasonable judgment.

C) No, Edgar has not violated any obligation, since Edgar did not evaluate Andrew's credit worthiness correctly.

D) Yes, Edgar has violated the duty to obey all instructions of the principal.

28) An agent's duty of loyalty means she likely cannot act for: A) more than one principal.

B) two principals in the same transaction.

C) more than one year for the same principal.

D) an undisclosed principal.

29) Greta, an agent, receives money from clients of Wayne, her principal, on the fifteenth of each month. In the absence of an agreement, how frequently must Greta account to Wayne for the money she receives?

A) Typically during the financial year end B) Immediately upon receiving the money C) Within a year of receiving the money D) Within a reasonable period of time after the money is received 3 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

30) Smith, an agent, buys and sells used computer equipment on behalf of New Life Technologies, Inc. In the absence of an agreement, which of the following tasks may Smith delegate to Elizabeth?

A) The authority to buy and sell used computer equipment B) Keeping a record of transactions Smith undertakes on behalf of New Life C) The authority to estimate the fair market value of used computer equipment D) The authority to fix the selling price of used computer equipment 31) Jamie authorizes Amy to sell his house, but does not clarify about the compensation payable to Amy. What amount should be paid to Amy when she sells Jamie's house?

A) Nothing, since agency relationships are assumed to be gratuitous unless an agreement specifies compensation B) An amount to be determined by arbitration C) A fair value for the services performed D) Ten percent of the sales price 32) Desmond, obeying the instructions of his employer, Bigger Company, sells Harry a computer system that is not capable of being expanded. Harry is now suing Desmond asserting fraud, but Desmond defends that Harry did not request an expandable system. What responsibility if any, does Bigger Company owe Desmond?

A) Bigger has no responsibilities, since Desmond has a defense to fraud.

B) As Bigger's agent following instructions, Desmond is entitled to indemnification.

C) Bigger's only duty is to cooperate while Desmond defends the lawsuit.

D) Bigger's responsibility is to support Harry's lawsuit against Desmond.

33) Gordon employs Josh as an agent to sell Gordon's house. When does this agency end if the agreement is silent?

A) When the house is sold B) When Josh locates a possible buyer C) When Josh decides to look for other employment D) When Gordon decides to look for another agent 34) Iris represents Drew, an eccentric billionaire who lives alone on a Pacific Island. Although Drew passes away on May 1st, this fact is not revealed until June 1st. On May 15th, Iris enters into a contract with Peggy on behalf of Drew. What is the legal liability, if any, of Iris to Peggy?

A) Iris is liable for a breach of actual warranty of authority.

B) Iris is liable for a breach of implied warranty of authority.

C) Peggy may enforce the contract since Drew's death was unknown, thus Iris has no liability.

D) Peggy may enforce the contract against Iris since she represented a nonexistent principal.

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35) Henry owns a movie production house which is represented by a BigLaw Firm. He also owns a shipping agency which is represented by Chase Bank. The agency relationships will be terminated by the bankruptcy of which of the parties?

A) The bankruptcy of Henry will terminate the agency relationship.

B) The bankruptcy of the law firm will terminate the agency relationship.

C) Both Henry and Chase must be bankrupt to terminate the agency.

D) The bankruptcy of the movie production house will terminate the agency relationship.

36) Bill employs Charles as a real estate agent to sell his house. The house is destroyed by fire.

What is the status of the agency relationship?

A) The relationship is applied to the next property Bill sells.

B) It requires Bill to compensate Charles for what he would have received for selling the house.

C) The relationship is automatically terminated.

D) It depends on what is considered reasonable.

37) Morgan, an agent, was instructed to sell Drew's property at a specified "firm" price of $450,000. A month later, the value of the property decreased substantially to $75,000 because of zoning changes. What is the status of the agency relationship?

A) Most likely, the agency is terminated because of impossibility.

B) It would terminate unless Drew had given Morgan a durable power of attorney.

C) It becomes an agency coupled with an interest, and continues unaffected by any change what so ever.

D) It requires the agent to compensate the principal with less compensation.

38) A(n) ________ is an exception to the rule that says that either the principal or the agent may terminate an agency relationship at any time.

A) agency by estoppel B) agency by mutual agreement C) agency coupled with an interest D) notice of reimbursement 39) Betty, the manager of The Great Retail Store, purchases a variety of merchandise on credit.

When Betty quits, what notice must The Great Retail Store provide to its creditors?

A) The Great Retail Store can send a notice to all businesses in Betty's area.

B) The Great Retail Store should place a classified advertisement notice in a newspaper of general circulation.

C) The Great Retail Store should send an actual notice to parties Betty has done credit business with and place an advertised notice in a newspaper of general circulation to the rest of the public.

D) The Great Retail Store is not required to provide a notice to anyone.

40) The Uniform Electronic Transactions Act (UETA): A) is a physical alteration of network components.

B) is an establishment of the nature of an electronic agent.

C) bans electronic agents for business transactions.

D) legitimizes the use of electronic agents.

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41) Tom is a real estate agent for Great Housing Co., which plans to purchase and build on a plot of land near Leadville. Tom learns that the building site may have been polluted with lead, but does not inform Great Housing Co. Great Housing Co. purchases the land and discovers the pollution when construction starts. Great Housing Co. asserts that it did not know of the lead pollution and should not be required to pay the clean-up cost. Discuss Great Housing's assertion.

42) Tom, owner of the Rico Apartment Complex, appoints Alice as "General Manager" of the Rico Apartment Complex. Alice enters into several contracts in Tom's name: (1) maintenance agreement with Alpha Enterprises; (2) purchase of cable TV service from Star Ethics for Rico; (3) purchase of a new Corvette for Alice to drive while on Rico business. Discuss which of these contracts bind Tom? 43) Jackson is a car purchasing agent for Highway Motors, a used car dealer. Jackson attends wholesale auto auctions and notices that some autos have consistently greater demand and higher prices. Jackson forms a car purchasing partnership with Viva Inc. to buy these cars from "for sale by owner" advertisements and then sell them in Viva's name at the auto auctions where Jackson purchases them for Highway. Discuss if Jackson has violated any duty he owes Highway Motors.

44) Allison is an attorney representing Big Co. in trademark litigation. Allison fails to conduct market research in advance of the trial to determine the extent to which consumers identify with the trademark associated with Big Co. Big Co. loses the litigation under a finding that the trademark is generic and not uniquely associated with it. Has Allison violated any duty she owed Big Co.? Discuss.

45) Nolan worked as delivery person for the Super Soap Suds Company. In this capacity, he would frequently collect money from customers for Super Soap Suds. One week, he carelessly allowed his son to deposit the money on his behalf. His son deposited the money in Nolan's personal account. When Nolan tried to retrieve the money, he did not know how much belonged to Super Soap Suds. What legal remedy does Super Soap Suds have against Nolan? Explain.

46) Simon sells illegal drugs for JY Laboratories with the understanding that JY Laboratories will receive fifty percent of the gross profits. JY Laboratories fails to honor this agreement.

Discuss whether Simon may sue JY Laboratories to enforce the agreement.

47) Cassey is an agent of Green Motors and sells and delivers antique cars. Cassey spends her own money to ship a car from Ohio to Florida. There is no express agreement between Cassey and Green concerning expenses. Discuss the legal rules that apply to this situation.

48) Cars and Cars sells rebuilt parts to repair shops. Allan is Cars and Cars' agent in Smallville.

He is paid a commission, but also has a quota to meet. Cars and Cars appoints a second agent, Amanda, in Smallville. This makes it difficult for Allan to meet his quota and also reduces his commissions. Discuss if Cars and Cars has violated any duty it owes Allan.

49) Xavier hired Sam to sell Xavier's private Lear jet. Before any sale could be made, the jet was destroyed in a crash. The destruction of the jet terminated the agency by operation of law. Whom must Xavier inform of the termination?

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50) Grandpa has a stroke and becomes mentally incapacitated. Discuss the legal status of any agency relationships that he may have granted and how Grandpa should have planned in advance for this possibility.

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Business Law with UCC Applications, 15e (Sukys) Chapter 23 Employment Law 1) Under an employment-at-will doctrine, only the employer has the right to terminate the employment relationship at any time.

2) XJS Manufacturing Co. in Detroit, Michigan employs a total of 50 full-time employees.

Recently the board voted to close its Detroit plant and move all operations to Singapore. Under the WARN act, XJS is required to give 60 days' advance notice to a union official.

3) On May 25th, Josh Nesmith, the CEO of LL STEAM, LLC called a meeting of the threemember executive team and promised them that during a time of 'rumblings,' 'innuendos' and 'gossip,' they all had secure 'long-term' jobs at LL STEAM. Based on Josh's promise, the team voted to stay on. On June 10th, LL STEAM filed for Chapter 11 bankruptcy, and Josh let all the executive team go. Any member of the executive team may sue LL STEAM for wrongful discharge.

4) Joseph worked for XJS Manufacturing for seven years with no incident. During a particularly stressful evening, when Joseph was going through a nasty divorce, he violated a court order and was arrested, but managed to post a bond. When Joseph showed up for work the next morning, his supervisor Bruce told Joseph in the break room with a few others around, "We have to lay you off now, but you can have your job back once the case is over, including any back pay or benefits." Joseph thanked Bruce. When Joseph's case was over, he came back to work but was told by Bruce he was no longer needed and was escorted by security off the premises. Joseph has the required elements to sue Jameson Enterprises, claiming wrongful discharge based promissory estoppel.

5) In the Opening Case of Kimberly Hively v. Ivy Tech Community College (IVY), the court used a textual approach to determine whether the Civil Right Act of 1964 against discrimination based on sex also included sexual orientation.

6) Implied employment contracts are based on a general pattern of behavior by an employer that creates certain reasonable expectations on the part of an employee.

7) Max and BigCo have an at-will employment relationship. Assume BigCo discharges Max and Max sues BigCo for wrongful discharge. During discovery—quite some time after his departure—BigCo discovers Max had been stealing petty cash. BigCo is prohibited from using this evidence because it did not know about it when it discharged Max. 8) Harvey, the foreman at a job site in downtown Manhattan, refuses to allow OSHA inspectors to perform a random inspection on the job site without a search warrant. The OSHA inspectors call the local police department. Harvey cannot prevent OSHA inspectors from entering the worksite.

9) Under the FLSA, Justin, a 17-year-old apprentice with Gem County Electrical, Inc., must be paid at least minimum wage.

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10) Under FICA, the amount that an employee is assessed is based on the employee's monthly wage base.

11) On his way to lunch one day, Joseph is involved in a serious accident which causes him to lose 6 weeks of work. Joseph is entitled to workers' compensation.

12) Brian works for the U.S. Department of Agriculture. Brian's wife, Sarah, is due to deliver their child in six months. Brian asks for 6 weeks off in September and another 6 weeks off in January. However, his request is denied because he has only been employed for 9 months. Brian can sue for denial of benefits.

13) When Brian returns to work at USDA after his approved six-week FMLA absence, his supervisor tells him he will be laid off and some of his job duties have been assigned to someone else, who is actually doing a better job than Brian ever did. So, while Brian is offered the same position he had, he is paid less because others have taken his duties. Brian has the right to sue USDA for wrongful discharge under FMLA. 14) Rosewood Orchards, Inc. pays its male workers $15 an hour, while it pays its female workers $10 per hour. Males are expected to drive trucks, dig ditches, and other duties that women can, but are not required, to perform. This pay discrimination violates the Equal Pay Act. If the jobs are substantially equal, Rosewood must pay the female workers $15 per hour.

15) The Supreme Court has ruled that affirmative action plans must promote a "compelling state interest" and must be finely drawn to minimize harm to those workers outside the plan and that the plan is the only way to reverse an allegedly discriminatory practice.

16) To prevail on a discrimination claim, the plaintiff must present a prima facie case demonstrating that she was discriminated against by her employer.

17) American Jet Enterprises, Inc., a regional jet service in the northwest United States, advertises for a "stewardess" on one of its routes. Samuel applies but doesn't get the job, even though he has ten years' experience. Instead the job goes to Samantha who has no experience.

Samuel may have a disparate impact claim.

18) An employee who is addicted to illegal drugs could claim a disability under the ADA. 19) The ADA forbids discrimination on the basis of a disability if the disabled individual can do the essential functions of the job with "reasonable accommodations."

20) Suppose LL STEAM Inc advertises for models for its new catalog. In particular, the ad states "seeking persons for a job modeling women's bathing suits." Suppose Harvey applies, but is rejected based on his gender. If he files a disparate treatment claim, LL STEAM would be able to defend based on "quid pro quo."

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21) A contract negotiated by the employer and the labor union that covers all issues related to employment is a(n): A) option contract.

B) implied contract.

C) collective bargaining agreement.

D) confidentiality agreement.

22) Under the ________ Act, employers with more than 100 full-time employees must give written notice to a union official 60 days before any plant closing or mass layoff.

A) Federal Employees' Compensation B) Fair Labor Standards C) Worker Economic Opportunity D) Worker Adjustment and Retraining Notification 23) To make a case based on a(n) ________, the employee must demonstrate that the employer or a representative of the employer promised the employee job security despite the apparent atwill nature of the employment relationship.

A) promissory estoppel B) implied-in-fact contract C) quasi-contract D) in pari delicto 24) An employment relationship based on a(n) ________ is an employment relationship that would have been at-will, had the employer not said or done something that insinuated the existence of a contract.

A) collective bargaining agreement B) implied contract C) explicit contract D) good faith and fair dealing agreement 25) To be an effective attempt to preserve employment-at-will, a ________ also must be written in clear, unequivocal language.

A) quasi-contract B) disclaimer C) relinquishment D) waiver 26) The "Opening Case" Garcetti v. Ceballos, involved a question of whether, as a ________, ________ memo was protected by the ________.

A) public employee; Ceballos'; Fifth Amendment B) public employee; Garcetti's; Fourth Amendment C) private blogger; Garcetti's; First Amendment D) public employee; Ceballos'; First Amendment

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27) One of the key factors a plaintiff (employee) must prove in a wrongful discharge lawsuit based on the public policy tort exception to employment-at-will is ________, which requires the existence of a definite public policy, clearly created by the U.S. Constitution, the state constitution, or a general governmental policy.

A) causation B) jeopardy C) clarity D) absence of justification 28) On the federal level, ________ assures all workers in a business, in or affecting interstate commerce, a safe and healthful place of employment.

A) OSHA B) FLSA C) FICA D) ERISA 29) Which of the following statements about "the wage and hour provisions of the FLSA" is true?

A) Full-time students cannot be employed.

B) They apply to all people employed in an administrative capacity.

C) Exempt workers are generally identified as those who manage other employees.

D) They require minimum wage for the employment of apprentices.

30) Juanita is classified by Smart Store as an exempt employee. Juanita spends 40% of her time in management tasks, 30% of her time stocking shelves at Smart Store, and 30% of her time unloading trucks that supply the store. Which of the following statements is true?

A) Juanita is appropriately classified.

B) Juanita is inappropriately classified.

C) Juanita is guaranteed at least 60% of minimum wage.

D) Juanita is guaranteed at least 160% of minimum wage.

31) Standard Co. has an employee pension plan under which Jessica has worked for 12 years.

Jessica is laid off at age 60, and five years later she "retires" and attempts to draw her pension benefits. However, she is informed that she is not eligible for pension benefits because she had not been working under the Standard Co. plan at the time of her retirement. Is this correct?

A) Yes, if that is what the Standard Co. plan specifies.

B) No, since Jessica worked longer than 10 years for Standard Co. C) No, since Jessica's benefits are vested.

D) Yes, since Standard Co. only has a responsibility to current employees.

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32) Which of the following statements holds true for employee responsibilities under the Family and Medical Leave Act (FMLA)?

A) Employees must notify the employer at least 30 days before they intend to take the leave.

B) Employees need not notify the employer if the need for a leave is unpredictable.

C) Employees must accept the right of the employer to offer reduced pay on their return after the leave.

D) Employees must discharge partial duties during the period of the leave.

33) Employees who believe that their employer has violated FMLA rules can file complaints with the: A) Labor Employment Standards Administration.

B) Equal Employment Opportunity Commission.

C) Department of Labor.

D) Office of Veterans' Employment and Training Service.

34) Global Industries requires all new employees to be at least six feet tall to comply with their brand and marketing campaign slogan, "We're Big Enough to Serve You." People who are denied employment solely because of their height sue Global. What must Global prove?

A) Height is directly related to the specific job in question.

B) Nothing, since the burden of proof is on the people who sue.

C) Height is directly related to Global's general business needs.

D) Nothing, since Global applies the height standard in a nondiscriminatory manner.

35) A(n) ________ sexual harassment occurs when a ________ requires that his secretary trade sexual favors for a job promotion.

A) business necessity; supervisor B) hostile environment; CEO C) quid pro quo; supervisor D) affirmative action; supervisor 36) Jose works as an exotic dancer at the "Gentlemen's Nightclub." Though he gets tips from the patrons, Jose is paid a weekly salary. Later, Jose discovers that though he works the same number of hours as the females, their salary is double his. If Jose sues the Gentlemen's Nightclub, who will win?

A) Jose may win because of the Equal Pay Act. B) Jose may win because of Title VII. C) Gentlemen's Nightclub may win if they consider breast-size (or lack thereof) as a factor of the value of the employee.

D) Gentlemen's Nightclub may win because employers can discriminate against men in an exotic dancing venue.

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37) Treasure Valley Pentecostal Church has an opening for a new head pastor. Rajid, who is a Hindu, applies for the job. The church declines to hire him and continues to look for other applicants. Rajid files a claim of illegal discrimination against the church based on his religion.

What result?

A) Treasure Valley will prevail based on a BFOQ defense.

B) Treasure Valley can claim that Rajid did not make out a prima facie case of illegal discrimination under Title VII. C) Treasure Valley can assert that its hiring practices do not create a hostile environment.

D) Rajid can claim that not being hired was reverse discrimination.

38) In the "Classic Case" of Griggs v. Duke Power (1971), Duke refused to transfer any employees at its plant to better jobs unless they had a high school diploma or could pass an intelligence test. The company was willing to pay two-thirds of the tuition for an employee's high school training. Neither a high school education nor the intelligence test was significantly related to successful job performance. Both requirements disqualified African Americans at a substantially higher rate than white applicants. Is the company in violation of Title VII? A) No, Duke is not liable under Title VII because the employment conditions are BFOQs. B) Yes, Duke may be liable under Title VII because the employment conditions are not BFOQs. C) Yes, Duke is liable under Title VII for reverse discrimination.

D) No, Duke is not liable under Title VII because the conditions are essential to the company's success.

39) Miguel lives in an area with a high percentage of Hispanic workers. Many of these workers are legal immigrants who have relatively little college training. If, when Miguel applies for his job, he is given an examination designed for a college graduate, and if he and most Hispanic applicants fail to pass the test, the employer: A) might be engaged in disparate-harm discrimination.

B) might have violated the Americans with Disabilities Act (ADA).

C) might be engaged in disparate-impact discrimination.

D) has almost certainly done nothing wrong.

40) Under the provisions of ________ , an employee who has served in the armed forces and successfully completed his/her tour of duty will be reinstated upon returning to work in his/her previous position on the job.

A) USERA B) OWBPA C) ADA D) WARN

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41) Thomas Terrific, aged 59 years, and other employees were terminated by Northwest Power, Inc. due to corporate "downsizing." All of the employees who were laid off as a result of the closing were promised preferential treatment for other jobs at Time, Inc. Terrific applied for more than 30 of these positions, but he was never rehired. Other employees who were much younger than Terrific were hired. Most of the time, the reason given for his rejection was that he was overqualified. Terrific decides to sue. If you were advising Terrific, which course of action would you suggest?

A) Register a claim with the EEOC based on an ADEA claim.

B) Sue Northwest under an ADEA claim.

C) Sue Northwest under an ADA claim.

D) Sue Northwest under a Title VII claim.

42) Workers at Titan Industries are concerned that employment-at-will can allow Titan to act arbitrarily and without any procedure or progressive discipline when firing workers. Discuss what legal remedies, if any, are available to the workers.

43) The Little Manufacturing Co. plant is located next to the Sierra River and employs 120 workers. A flash flood one weekend washes away the plant. Little decides not to rebuild and lays off the workers, who are not represented by a union. What legal obligations does Little have to the workers?

44) Nancy Nelson, who worked for the Farmington Institute of Technology, took a leave of absence for health purposes. Her supervisor, Mark Bohm, told Nelson, "When you recover from your health problems, you can have your job back with full seniority." Nelson believed Bohm and did not look for work elsewhere. When she returned to work, Nelson found that FIT would not honor Bohm's promise to her. It took Nelson eight months to find another job. Does Nelson have any legal recourse? Explain.

45) Eva is fired by Big Clothing Co. for refusing to commit perjury. Discuss the elements required for Eva to win a wrongful discharge suit based upon a violation of public policy.

46) The manager of Palms Restaurant assembles all employees and announces that because theft is occurring, she would fire employees until the guilty party confessed. Turning to an employee, Alice, the manager says, "You're fired." Palms Restaurant is in an employment-at-will state.

Discuss if Alice has any legal remedy against Palms.

47) Jackson Enterprises wants to provide two hours of work after school for children, up to eight years old, and from economically disadvantaged families who cannot afford after-school day care. The work will be coordinated with school assignments and will appeal to each child's unique interests. Discuss any legal issues associated with this plan.

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48) Leonard Spinoza, a physical therapist, was laid off from his job at the Shelby Hospital because of economic conditions. He registered with the state unemployment compensation agency and requested unemployment compensation. The interviewing official told him about a job for a physical therapist at the Bellville Hospital. Spinoza refused it on the grounds that he needed vacation before accepting another job. Would Spinoza qualify for unemployment compensation?

49) John takes leave under FMLA. Discuss the obligations of John's employer to John.

50) Titanic Industries requires all new employees to have red hair because red is the CEO's favorite color and all company signs are written in red letters. Minority job applicants whose hair is not red sue under the Civil Rights Act of 1964. Discuss their likelihood of success.

51) Petra Voinovich, 64, lost her job when the subsidiary she worked for was disbanded by Hypersonic Enterprises, the parent corporation. All of the employees who were laid off were promised preferential treatment for other jobs at Hypersonic. Voinovich applied for over 35 jobs.

She was never rehired. The reason given was that she was overqualified. Voinovich believed that she could bring an age discrimination suit under the ADEA. Was she correct? Explain.

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Business Law with UCC Applications, 15e (Sukys) Chapter 24 Labor Law 1) The Independent Drivers Guild (IDG) represents Uber drivers because the IDG is really a union and all Uber drivers are considered "employees" under the Wagner Act. 2) Courts have issued injunctions and used the Taft-Hartley Act to break up right-to-work organizations.

3) The Clayton Act of 1914 prohibited federal courts from issuing injunctions against labor strikes.

4) The Norris-LaGuardia Act of 1932 forced companies to cooperate with union organizers and thus, keep people working.

5) One of the objectives of labor unions is sponsoring laws that help improve political conditions for workers.

6) The Wagner Act allowed an individual employee in a unionized business to negotiate his or her own employment contract.

7) The Norris-LaGuardia Act outlawed so-called "yellow-dog" contracts.

8) The Taft-Hartley Act authorized the NLRB to hold hearings on unfair labor practice petitions.

9) An employer is barred from playing any role in the selection of union representatives.

10) Brigg Co. asked its employees to refrain from joining the Moderate Union. It promised an out-of-turn promotion for all employees who would refrain from joining the union. Brigg Co. has committed no legal offense by this act.

11) The NLRB has no jurisdiction over religious schools.

12) A "right-to-work" state means that workers can choose to opt-out of unions.

13) The Taft-Hartley Act provides that union shop contracts are legal only in states that do not forbid them.

14) A right-to-work law outlaws only the union shop, but not the closed shop.

15) Under other provisions of the Taft-Hartley Act, unions are not legally obligated to give notice to the employer of an intention to strike prior to the termination date of a collective bargaining contract.

16) A "hot-cargo" contract allows a union to handle stolen property that has been recovered by the police and sold at a police auction.

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17) Congress, not the NLRB, has the authority to conduct investigations into unfair labor practice charges.

18) Strikes by public employees who perform vital services are generally illegal, unless specifically authorized by statute.

19) The Federal Mediation and Conciliation Service cannot act by itself, but only upon the request of either side to a labor dispute.

20) In the Sousa v. American Medical Response of Connecticut (AMR) case, the NRLB protected the free speech rights of the employee.

21) In terms of federal laws governing labor-management relations, which of the following statements is incorrect?

A) Picketing and boycotting are subject to federal court injunctions, under the Norris-LaGuardia Act. B) The Wagner Act created the National Labor Relation Board.

C) The Labor-Management Relations Act of 1947 is also known as the Taft-Hartley Act. D) It is an unfair labor practice for a labor union to try to coerce employees to join the union, under the Taft-Hartley Act. 22) Mina does not like the way the Adams Co. Production Union, which represents employees at her Adams Co. plant, is representing her interests and wants to privately negotiate her own contract with Adams Co. Which of the following statements is most likely true?

A) Mina has the right to negotiate her own terms of employment.

B) Production Union represents Mina; hence, she cannot negotiate her own contract.

C) Production Union only represents the workers who want to be represented.

D) Mina must have NLRB approval to negotiate her own contract.

23) The Wagner Act does all of the following except: A) authorize the NLRB to hold hearings on unfair labor practice petitions.

B) outlaw certain practices by employers as unfair labor practices.

C) allow states to legislate right-to-work laws.

D) authorize the NLRB to conduct representative elections.

24) The major provision of the ________ is that it exempts union activity from antitrust laws.

A) Norris-LaGuardia Act B) Railway Labor Act C) Clayton Act D) Wagner Act

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25) Citral Co. orders its employees not to join a labor union. It makes it clear that any employee joining the union would merit a demotion and a drastic cut in the pay package.

A) Citral Co. has simply exercised its right to freedom of speech.

B) Citral Co. is trying to protect its business interest by legal means.

C) Citral Co. has violated the law by passing these orders.

D) Citral Co. has not violated the law, as these instructions do not cause any physical harm to anybody.

26) The ________ gives the president of the United States special powers to deal with actual or threatened strikes that affect interstate commerce or that endanger the nation's health and safety.

A) Wagner Act B) Taft-Hartley Act C) Landrum-Griffin Act D) Norris-LaGuardia Act 27) Avalon Co., by agreement, hires only union members in good standing. Avalon Co. has: A) created a union shop.

B) created a closed shop.

C) formed a company-run union.

D) created an agency shop.

28) Hamyes Chemical Works allows its employees to be exposed to certain chemicals. George, an employee, reports this to his union and agrees to testify when the union brings a claim that this is in violation of a union contract. George is immediately discharged from the job. Hamyes Chemical Works: A) has rightly discharged George as his act amounted to breach of trust.

B) would be liable for legal action under the Wagner Act. C) could be charged with coercion and harassment under the Taft-Hartley Act. D) is protected under the First Amendment.

29) Joe, an outspoken union advocate working in the shipping department at Frontline Co. for the past 10 years, is transferred to clean out the oil pit. Joe is also paid less for this job. Joe has several allergic reactions to the oil and quits the company due to health reasons. Frontline Co. has: A) exercised lawful management rights.

B) made a discriminatory decision in violation of the Civil Rights Act. C) established a closed shop.

D) engaged in constructive discharge.

30) A(n) ________ shop is a workplace in which nonunion members may be employed for a trial period of not more than 30 days after which the nonunion workers must join the union or be discharged.

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31) AML Union tells Standard Co. during contract negotiations that "unfortunate events may occur" if Standard does not agree to most of the union contract proposals. The next day, two Standard Co. trucks burn. AML Union has: A) not bargained in good faith.

B) made a statement of opinion.

C) exercised its First Amendment rights.

D) engaged in destructive bargaining.

32) It is possible for the state governments in Wisconsin, Ohio, and Michigan to attempt to alter the collective bargaining rights of firefighters, police officers, and teachers. Why? A) These states have voted to keep the Wagner Act out of their states.

B) The Wagner Act does not apply to state government or local government employees.

C) The rulings of the agencies constituted under the Wagner Act are not legally binding.

D) The Wagner Act is applicable only to private organizations.

33) Big Union negotiates a wage increase for members of a bargaining unit. This wage increase is: A) only for union members.

B) only for workers whose names are listed in the contract.

C) for all workers who join the union.

D) for all workers in the bargaining unit.

34) A(n) ________ is a conspiracy in which a union places pressure on a neutral customer (with whom the union has no dispute) to cease doing business with the employer, with whom the union has a dispute.

A) constructive discharge B) featherbedding C) secondary boycott D) arbitration 35) If Bellard Co. tells its employees that voting for the union is a mistake, its statement is: A) protected by the Taft-Hartley Act. B) prohibited by the NLRB. C) only allowed in right-to-work states.

D) protected by the Landrum-Griffin Act. 36) Jane believes that the Big Union leaders are using union funds illegally, so she speaks out against the leaders. Big Union expels Jane. Which of the following statements is true?

A) Big Union may determine its own membership.

B) Big Union has engaged in an unfair labor practice.

C) Big Union has to contact the NLRB before expelling Jane.

D) Jane has to contact the NLRB before speaking out.

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37) In a national emergency strike, the Attorney General can address a petition to the: A) U.S. Supreme Court.

B) federal court of appeals.

C) federal district court.

D) state supreme court.

38) A union must register its bylaws with the: A) NLRB. B) Department of Commerce.

C) Federal district court.

D) Secretary of Labor.

39) The ________ Act established a bill of rights for union workers.

A) Landrum-Griffin B) Taft-Hartley C) Clayton D) Wagner 40) A meritorious unfair labor practice charge filed with the NLRB first goes to: A) arbitration.

B) a hearing.

C) federal district court.

D) mediation.

41) Xavier owned and operated the Xavier Paper Products Corporation. Xavier discovered that one of his employees planned to hold a meeting in order to discuss the possibility of forming a union. Xavier placed a notice on the bulletin board in each store warning employees that any employee who joined a union would be subject to immediate dismissal. Did such a notice violate federal law? Explain.

42) Tom is an official of Large Co., a mining company. Tom is paid by Large Co. to be the company spy in union meetings and make reports about the inner workings of the union. Discuss the legal aspects of this situation.

43) Jo testifies before the NRLB about the unfair labor practices of Large Co. Large Co. transfers Jo from its plant in Cleveland, Ohio to its plant in Fairbanks, Alaska against her wishes. Discuss the legal aspects of this situation.

44) Just unionized, Medium Co. has named Erica as its chief negotiator with Large Union in obtaining a contract. Erica wonders what topics are mandatory subjects of collective bargaining.

Discuss.

45) Priscilla, a production manager for the Orange Hope Company, told her supervisor that she was considering joining the company's union. Her supervisor, who did not belong to the union, told Priscilla that he would promote her if she did not join the union, which he described as corrupt. Were the supervisor's actions legal? Explain.

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46) Tom and Cindy are discussing what it means to have a "right-to-work law." Tom says that it means to have no discrimination in employment. Cindy says it means that everyone has a right to unemployment benefits until they find a job that fits their skills and experience. Discuss the accuracy of these comments.

47) Big Union in fact tells nonunion employees that unless they join the union, Big will make sure that they do not work. Big Union, in fact, tells Small Co. that it could avoid "a lot of problems" if it just refused to promote or grant wage increases to nonunion workers. Discuss this situation.

48) Big Union is on strike against ABC Construction Co. It asks the employees of XYZ Subcontractor Co. not to unload trucks delivering supplies to ABC Construction Co. building sites. Discuss if this action is lawful.

49) Perez owned the Lakehurst Milk Company. When he found out that his employees were going to form a union, Perez called a meeting to explain why he was opposed to unionizing Lakehurst. Foster, an employee at Lakehurst, said Perez could not call such a meeting. Was Foster correct? Why or why not?

50) The NLRB makes a rule which allows it to investigate, hold hearings, and issue judgments.

Big Co. believes this violates numerous basic U.S. Constitutional provisions, including the separation of powers between branches of government. Big Co. wants to challenge the NLRB in court. Discuss the appeals procedure.

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Business Law with UCC Applications, 15e (Sukys) Chapter 25 The Business Entity: An Introduction 1) A limited liability is the easiest business organization to form.

2) One of the main disadvantages of the sole proprietorship is that the owner has unlimited liability.

3) Under RUPA, an association of two or more persons means that the partners have to be 'flesh and blood' individuals.

4) In a case involving the issue of whether a partnership actually existed, equal management is prima facie evidence.

5) RUPA requires that a partnership agreement be in writing to be enforceable and binding on the partners.

6) The capital contributions of all partners are considered to be the property of the partnership.

7) Under the UPA aggregate theory, a partnership exists as a unique individual person that is separate from the identities of the partners.

8) Jean and Bert enter into a written agreement to establish their partnership. Under RUPA, the written agreement has to specify that their partnership has a continuity of existence.

9) Under RUPA, certain types of profit sharing, such as the repayment of a debt, not rise to the level needed to create a partnership.

10) Under the Uniform Partnership Act, when a partner is deceased, her interest in real property became a tenancy in partnership held by the partnership and passed to the surviving partners.

11) Tom, Lori, Joseph, and Carol agree to do business together, but haven't agreed on anything about profits. The group appoints Tom as 'leader.' A court would consider Tom's appointment by itself as clear evidence of a partnership.

12) Mia works as an assistant in a pharmacy. Her receipt of monthly wages, by itself, makes her a partner in the pharmacy.

13) Under the RUPA, a dissociation takes place whenever a partner is no longer associated with the running of the firm.

14) A term partnership is one that any partner may leave without liability.

15) Under the RUPA, a term partnership dissociation occurs when a partner files bankruptcy.

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16) Under the UPA, partners are jointly and severally liable for damages resulting from breach of contract actions.

17) In the Classic Case, The Liability Blues, PNC Bank v. Michael Farinacci, the main issue was whether the defendants be held jointly liable under the old law (UPA) or jointly and severally liable under the new law (RUPA).

18) Under the RUPA, partnerships at will are automatically dissolved when a partner dies or enters bankruptcy.

19) Attorneys Joseph, Sam, Nayeli, and Juanita agree to form a limited liability partnership (LLP), JUSTICE LAWYERS, LLP and each contribute $10,000 to the startup of this firm. In this LLP, each partner is personally liable because of the capital contribution, and may be sued in a separate action or in a joint action.

20) John, Sam, and Mark decided to form a limited partnership (LP) with John being the general partner, and Sam and Mark as limited partners. The LP is sued and the court awards $100,000 against the LP. All three partners are jointly and severally liable.

21) Which of the following is an advantage of a sole proprietorship?

A) The owner of a sole proprietorship has no liability.

B) The owner of a sole proprietorship has complete control over the business.

C) The sole proprietorship's existence does not depend entirely upon the sole proprietor.

D) Owners of sole proprietorships can raise a lot of cash quickly for expansion purposes.

22) Arian is a sole proprietor and owes a number of business creditors. The business creditors may sue to: A) only take Arian's business assets.

B) only take Arian's personal assets.

C) take both Arian's business and personal assets.

D) not take any assets, but only the profits of the business.

23) Under the RUPA, a partnership: A) has continuity of existence.

B) is considered an entity in all situations.

C) is no longer viewed as an aggregate in relation to liability.

D) has no liability for the obligations made by its partners.

24) Alan and Baker are disappointed in the profitability of their A and B Partnership. They want to join their partnership with the X and Y Partnership. Is it possible for a partnership to be a partner?

A) Yes B) No C) Yes, if the partners agree to personally guarantee the debts of the new partnership D) No, because a partner must be an entity 2 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

25) Alan and Delen enter into a partnership agreement with a $10,000 capital contribution. Six months later, Delen loans Alan $1,000. The loan is a: A) partnership capital contribution.

B) loan to the partnership, rather than to Alan.

C) loan to both the partnership and to Alan.

D) personal loan to Alan only.

26) The Titanic Partnership's loan from Big Bank is structured so that payments on the loan are made out of profits and the amounts of the payments vary according to profitability. Which of these best describes this arrangement?

A) This is evidence of a partnership between Titanic and Big Bank; additional evidence may overcome this assumption.

B) This is conclusive evidence of a partnership between Titanic and Big Bank.

C) This may be evidence of a partnership between Titanic and Big Bank.

D) This is not evidence of a partnership between Titanic and Big Bank.

27) Thomas invests $10,000 in the Thomas and Trudy partnership named Tremendous Enterprise. Thomas needs $2,000 for medical expenses and insists that he is entitled to withdraw that amount immediately from what he has invested. Trudy asserts that the $10,000 investment is partnership property. Under the RUPA, who owns the $10,000?

A) Tremendous Enterprise B) Thomas only C) Thomas individually and Trudy individually D) The $10,000 is owned by no one, but is merely a future interest of Thomas.

28) A partner's ________ is her share of the ________ plus any ________, which is any remaining funds after dissolution.

A) vested property right; profits; surplus B) economic interest; profits and losses; surplus C) property; surplus; losses D) economic interest; surplus; vested property rights 29) Susan and Stanley are in a partnership called Easy Partnership. Susan purchases a truck with her personal funds with title to the truck naming Easy Partnership. Who owns the truck?

A) Susan B) Susan and Stanley C) Easy Partnership only D) Both Susan and Easy Partnership

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30) Jackie is interested in the property of the Big Partnership, in which Jackie is a full partner.

She wants to mortgage the property in order to collateralize loans for the organization. However, not all the partners agree with Jackie. What is Jackie's legal position with regard to the mortgage under UPA? A) Her partners' non-agreement is legally irrelevant.

B) Jackie's interest in the partnership property cannot be assigned.

C) Jackie can mortgage her share of the organization's property.

D) UPA does not address this issue, and a court will decide on a case by case basis.

31) Under the UPA, a partner in a tenancy in partnership has all the following rights except: A) an equal right to possess and use specific partnership property for partnership purposes, but not for that partner's personal use.

B) rights in partnership property that are not subject to attachment for personal debts.

C) in the case of a partner's death, the right to have the deceased partner's interest in real property held by the partnership pass to the surviving partners.

D) the right to be a co-owner of partnership property with no interest in partnership property which can be transferred, either voluntarily or involuntarily.

32) The RUPA has eliminated: A) all management rights enjoyed by partners.

B) the concept of tenancy in partnership.

C) partnership entity status.

D) each partner's interest in the firm.

33) John knows that The Franklin Enterprises Partnership, in which John is a partner, is interested in purchasing a particular tract of land for a business location. Can John lawfully have his aunt buy the land, so that she may resell the land to Franklin Partnership?

A) No, it violates John's duty of care.

B) Yes, assuming the price to Franklin was a fair market price.

C) No, it violates John's duty of loyalty.

D) Yes, the aunt is not a Franklin partner and has no loyalty to it.

34) Under RUPA, a ________ takes place whenever a partner is no longer associated with the running of the firm.

A) dissolution B) dissociation C) rescission D) devolution 35) Charlotte is declared mentally incompetent by a court and is unable to participate as a partner in AMLAP Enterprises. Charlotte wants to leave the AMLAP partnership, but is contractually obligated for three more years. Can Charlotte leave the AMLAP partnership?

A) Yes, she can do so without any liability to the partnership.

B) No, there is no right to leave.

C) Yes, she has a right to leave, but is liable for breach of contract.

D) No, there is no right to leave unless all the partners agree.

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36) Jack has an auto accident while on business for Small Enterprises, an RLLP consisting of Jack and Alex. Who is liable for damages resulting from the auto accident?

A) Small Enterprises only B) Jack only C) Jack and Alex only D) Small, Jack, and Alex 37) In a limited partnership, general partners: A) take an active part in management, but have unlimited liability for the firm's debts.

B) take an active part in management, but have no liability for the firm's debts.

C) take an active part in management, but are nonparticipating investors.

D) take no part in management, but contribute cash or property.

38) In a general partnership, which of the following is true of limited partners?

A) Limited partners take an active part in the management of the firm.

B) A limited partner's nonpartnership property can be used to satisfy any debts owed by the firm.

C) Limited partners are nonparticipating investors.

D) Limited partners have unlimited liability for the firm's debts.

39) Tina is a limited partner in Aon Enterprises, a limited partnership, while Mark is a general partner. Tina assumes management duties for three weeks, while Mark is recovering from heart surgery. Most likely, who or what has liability for partnership actions during this period?

A) Aon Enterprises only B) Mark only C) Tina only D) Mark and Tina 40) When forming a limited partnership, it is critical to know that: A) general partners have limited liability for the firm's debts.

B) a certificate of limited partnership must be filed with the Secretary of State's office.

C) limited partners are participating investors.

D) general partners can only take a limited part in the management of the firm.

41) Anita wants to go into business for herself, but does not know how to start. Discuss the best way for Anita to begin.

42) Todd and Walker form a venture to operate snow cone stands in Smallville. The stands are only open for five warm weather months. The remainder of the year, Todd and Walker do no business together. Discuss the legal status of their business.

43) Tangent Enterprises is a partnership consisting of Delen, Javid, and Kaya. Kaya leaves the partnership to do volunteer work in Africa. Discuss the legal status of Tangent Enterprises.

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44) Brylea is paid 10% of the net profits by Delta Partnership as compensation for her work for Delta. Delta ceases business, owing many creditors who attempt to collect from Brylea, asserting that Brylea is a partner. Discuss Brylea's partnership status and liability.

45) A large machine is purchased by Vida and is sometimes used for her personal work and sometimes used for work by the partnership of which she is a member. Discuss what factors a court will consider in deciding if the machine is partnership property.

46) Jackson, Thomas, and Susan are partners in an investment firm. There is a vote taken to sell government bonds owned by the partnership, with Thomas and Susan opposed and Jackson in favor. Jackson decides to sell the government bonds and the partnership loses $50,000. Discuss Jackson's liability to the partnership.

47) Morgan, Slater, and Jergenston were partners in a legal consulting partnership. Jergenston pocketed $500,000 he had solicited in bank loans for expanding the partnership. When Morgan and Slater discovered Jergenston's impropriety, Jergenston told them, "Tough luck, but as partners, we are jointly liable on this debt and must pay off the $500,000 plus interest together."

Was Jergenston correct? Explain.

48) Due to a typing mistake, Delta, a limited partner in Derby Limited Partnership, is identified in the certificate of limited partnership as a general partner. Discuss how this error should be corrected.

49) Striuli asks Sarducci to become a limited partner in Avionics Ltd., a limited partnership that will sell computer software. Both Striuli and Sarducci delay filing the certificate of limited partnership. If the limited partnership is sued before the certificate is filed, will Sarducci be named as a defendant? Explain.

50) Wellington and Haggerty were partners in a souvenir shop. It is a traditional general partnership. While on a regular delivery trip, Wellington caused an accident when he ran a red light. Haggerty claimed that only Wellington was liable for the injuries sustained by the other driver. Was Haggerty correct? Explain.

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Business Law with UCC Applications, 15e (Sukys) Chapter 26 The Corporate Entity 1) In the new Classic Case, Burwell v. Hobby Lobby, the Supreme Court concludes that the term person in the statute is meant to protect corporate "persons" only because the real protection flows to the people behind that corporate veil.

2) The entire corporate, capitalist state is based on the faith and trust that investors have no liability for their investments.

3) The Fourteenth Amendment grants due process rights to corporate shareholders and stakeholders only.

4) Limited liability means that shareholders can be held personally liable for the debts of the corporation, but will not lose their capital investment.

5) A corporation is a domestic corporation in the state where its principal office is located, but it is an alien corporation in all other states.

6) An electric company would be an example of a S-Corporation.

7) Dividends are the net profits, or surplus, set aside for the shareholders.

8) Outstanding shares of stock of the Cattleman Corp. are held by seven shareholders, four from the Tate family, and 3 from the Anchustegui family. The Cattleman Corp. cannot be designated a close corporation because the shareholders are not from the same family.

9) A limited liability company is a business arrangement that permits an individual to lease the right to use a parent entity's business operation, intellectual property, goods, and services under a fee arrangement provided to the parent.

10) If only a minor requirement of incorporation has been left unsatisfied, the court will allow any shareholder to directly sue and challenge the de facto corporation's existence.

11) Janet is the promoter of a corporation called Time Inc., which is in the process of being formed. Janet rents office space in Time's name which is a de jure corporation. Time is bound by Janet's contract.

12) Undercapitalization will be considered convincing evidence that the corporate owners intended to use the corporate façade to escape liability.

13) The main issue in the William Stewart v. R. A. Eberts, Company, Inc. case, detailed in A New Classic Case, was whether the corporate veil should be pierced and hold the shareholders owners liable for ignoring the terms of a contract that had been made several years earlier.

14) The issuing and selling of shares of stock to raise capital is known as debt financing.

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15) A joint venture is an IRS-created taxable entity that allows limited liability for its owners.

16) If NEWCo. was not properly incorporated, but the owners believed they had a valid corporation, NEWCo may qualify as a corporation by estoppel.

17) A promoter can escape personal liability on a preformation contract by having the corporation and the third party execute an adoption.

18) The operating agreement is the written application prepared by the incorporators asking the state for permission to incorporate.

19) Preferred stock typically does not have the right to payment of dividends on the dissolution of the corporation.

20) No par value is the value placed on the shares of stock at incorporation by the Secretary of Commerce.

21) The four fundamental legal principles that are designed to protect the corporate structure are (1) corporate status as an entity, (2) corporate constitutional rights, (3) corporate citizenship and (4): A) anticipatory repudiation.

B) unconscionable contract.

C) mutual recession.

D) limited liability.

22) Kay, an 80% shareholder of Big Corp., dies leaving her stock to her nephew, Carl. Big Corp. will be: A) unaffected.

B) reorganized.

C) dissolved and then reconstituted.

D) dissolved.

23) The Panon Corporation is incorporated in Tennessee, but its corporate headquarters is in Massachusetts. As a result, the Panon Corporation is: A) considered a citizen of only Massachusetts.

B) considered a citizen of only Tennessee.

C) not considered a citizen of either Massachusetts or Tennessee.

D) considered a citizen of both Massachusetts and Tennessee.

24) Nodest Co., a Delaware corporation, wants to do business in California. Since Nodest is a foreign corporation, it: A) does not need to take any particular action.

B) must incorporate in California.

C) must obtain a certificate of authority from California.

D) must obtain certificates of authority from both California and Delaware.

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25) A(n) ________ is a corporation where the outstanding shares of stock and managerial control are held by fewer than ________ shareholders.

A) S corporation; 25 B) close corporation; 50 C) alien corporation; 50 D) shell corporation; 100 26) A limited liability company is best thought of as a cross between a partnership and a: A) sole proprietorship.

B) governmental institution.

C) limited partnership.

D) corporation.

27) Jan signs the articles of incorporation for a corporation being formed, and Tom wants to locate possible investors in the new corporation. Jan is a(n): A) incorporator.

B) promoter.

C) registered agent.

D) shareholder.

28) In terms of the steps in the incorporation process, which of the following occurs after the charter is issued?

A) A statutory agent is appointed.

B) The organizational meeting is held.

C) Filing fees are paid.

D) Promoters do preliminary work.

29) Henry, a promoter, signs a five-year lease agreement for office space for Ajax Corp., which has not yet been formed. After formation, Ajax moves into the office space, pays rent and occupies it for six months, but then finds a cheaper location and moves out. Which party is liable on the lease?

A) Henry B) Ajax C) No one, since it was a tenancy at will D) Both Henry and Ajax 30) A promoter can escape liability by having the corporation and the third party create a(n): A) novation.

B) estoppel.

C) operating agreement.

D) certificate of organization.

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31) Liz, a promoter, hired an office support staff for a corporation that had not yet been incorporated. If there is a novation clause in a subsequent contract with the corporation and the staff, which of these is correct?

A) The corporation will not be bound by any of Liz's contracts.

B) The office support staff will work without pay until the corporation becomes incorporated.

C) Liz will escape potential liability under the novation contract entered into.

D) Liz and the corporation will be held equally liable under all contracts entered into.

32) Which of the following is the official authorization of a corporation to do business in a state?

A) Articles of incorporation B) Certificate of incorporation C) Articles of organization D) Certificate of authority 33) Grant wants to know the date of the annual shareholders meeting of Big Co. Which document will contain this information?

A) Articles of corporation B) Articles of organization C) Bylaws or regulations D) Operating agreement 34) ________ refer(s) to the written application to the state for permission to form a limited liability company.

A) Novation B) Estoppel C) Operating agreement D) Articles of organization 35) Janice requires information about the voting rights of members of Titan, LLC. Which document will contain this information?

A) Articles of incorporation B) Articles of organization C) Bylaws D) Operating agreement 36) A(n) ________ is one that has been formed properly by incorporators who followed all of the steps outlined by the state incorporation statute.

A) corporation by estoppel B) de facto corporation C) de jure corporation D) alien corporation

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37) The status of a de facto corporation can be directly challenged by: A) private citizens.

B) the state government.

C) both private citizens and the state government.

D) neither private citizens nor the state government.

38) Alan sells merchandise on credit to ABC Co. ABC fails to pay for the merchandise. Alan later discovers that ABC is not a corporation, but a partnership consisting of Alice, Betty, and Charles. Which legal doctrine might shield Alice, Betty, and Charles from personal liability?

A) De facto corporation B) De jure corporation C) Corporation by estoppel D) Piercing the corporate veil 39) Vivian, owner of Titan Corp., uses Titan Corp. as a way to order merchandise for her personal benefit and fails to pay for the merchandise. Creditors who have shipped merchandise to Titan want to sue Vivian personally. Which of the following legal doctrines would allow a personal suit against Vivian?

A) Corporation by estoppel B) Piercing the corporate veil C) De facto corporation D) De jure corporation 40) Patricia holds 150 shares of common stock in a large corporation. Patricia: A) is guaranteed the rights to some of the profits of the corporation.

B) is most likely entitled to two votes for each share of stock she holds.

C) will not be included in the distribution of capital upon dissolution of the corporation.

D) risks whatever money she invested in the 150 shares of common stock.

41) ABC Co. owns land that is in the path of a new proposed interstate highway. ABC does not want to surrender this land. Discuss what rights ABC or the shareholders of ABC have to challenge this proposed taking.

42) Global Corp. is incorporated in Mexico and wants to do business in Ohio. Discuss the legal status of Global in relationship to Ohio and what Global must do to qualify to do business in Ohio.

43) Jon, a promoter, is concerned about being personally liable on preincorporation contracts he signs on behalf of corporations that have not yet been formed. Discuss what Jon may lawfully do to avoid this liability.

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44) Clothe You Inc. was incorporated as a nonprofit organization that gave away secondhand clothes to homeless persons. In order to pay overhead and administration costs, Clothe You Inc. also sold the secondhand clothes to any interested individuals who did not qualify as homeless.

One year after its formation, Clothe Me Inc. was incorporated in the same state. Clothe Me Inc. was a consignment shop that sold its secondhand clothes cheaply. Clothe Me Inc. ran an aggressive print advertising campaign, marketing its clothes "to everyone, for every reason, for practically no cost." After this campaign, Clothe You Inc. discovered that people, especially homeless individuals, were confusing the two organizations. What legal action, if any, can be taken by Clothe You Inc.?

45) A&B, a general partnership, wants to become "A&B, LLC." "A&B Co." is already in use by another business, and the state agency refuses to allow the new corporation to use the name "A&B." Discuss how A&B should proceed.

46) In creating ABZ Inc., Newman and Zimmer followed all the steps in the incorporation process as authorized in their state's incorporation statute except for the appointment of a statutory agent. They were never informed of the oversight and proceeded under the assumption that they were properly incorporated. Several years later, a customer was injured by one of their products. The customer's lawyer told Newman and Zimmer that they were individually liable because ABZ Inc. was not properly incorporated. Was the lawyer correct? Explain.

47) Tom and Jim from JT Co. plan to engage in the building construction business. They obtain contracts in the name of JT Co., but fail to keep separate bank accounts for JT Co. funds, placing JT Co. money in their personal bank accounts. In addition, much of the JT Co. equipment is titled in the name of Tom and Jim. JT Co. breaches a construction contract with Titan Co. Discuss if Tom and Jim might have personal liability for this breach of contract.

48) Big Co. creates a wholly owned subsidiary, Small Co. Small Co. sells poor quality merchandise on credit to consumers at unlawful rates of interest and violates the warranty agreements made with consumers. Discuss if Big Co. may be held liable for the actions of Small Co. 49) Zeno Corp. has issued common stock and noncumulative preferred stock. The board of directors of Zeno has not paid a dividend in 10 years. Discuss the rights of shareholders to demand a dividend payment and the ability of the noncumulative preferred shareholders to collect back dividends for the years in which no dividend was paid.

50) Wong and Burton owned several hundred shares of preferred stock in Classic, Inc. For three years, neither were paid dividends. In the fourth year, Classic paid dividends to both shareholders. Wong also received payment for dividends from the preceding three years. Burton did not receive any dividends from those years. Identify the type of stock owned by each shareholder.

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Business Law with UCC Applications, 15e (Sukys) Chapter 27 Managing the Corporate Entity 1) The Opening Case, Unocal v. Mesa Petroleum, involved a question as to whether the Unocal's board was protected by the business judgment rule.

2) The shareholders establish broad policies, and the officers and other employees implement those policies. The directors are the owners of the corporation.

3) The quorum—or minimum number of directors necessary to conduct business—is usually one more than half (51%) of the total number of directors and does not apply to special meetings.

4) Officers have the authority of general agents for the operation of the normal business of the corporation.

5) Stakeholders and shareholders refer to the same group of people.

6) Some states allow small corporations with fewer than 100 shareholders to eliminate the board of directors, as long as someone is assigned the duties that the board would have performed.

7) Under the business judgment rule, the shareholders will not interfere with most business decisions.

8) The business judgment rule emerges from the duty of due diligence that a manager owes to the corporation.

9) Jacy wants to submit a shareholder proposal and should submit the proposal to management at least 120 days before the shareholders' meeting.

10) Managers are not ethically allowed to profit from business decisions and if they do, the decision is suspect because of the duty of loyalty to the corporation.

11) The conduct of self-dealing managers is judged by the business judgment rule.

12) The "Unocal Rule" says that under the business judgment rule, board members have the right and the duty to work to block a takeover bid when that bid will damage the corporation and legitimate corporate plans.

13) Inside information is material, nonpublic, speculative data that can be used to buy or sell securities at a profit.

14) A derivative suit is based on a direct injury to a shareholder.

15) If a corporate insider who "tips" an outsider about material, nonpublic, factual data, both the "tipper" and the "tippee" who uses that data in a securities trade may be liable for illegal insider trading.

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16) If Benjamin, who is a corporate manager at OfficeMojo.com, is offered two season tickets and offers them to his colleague Jasper who is the CEO, Benjamin has a safe harbor under the "corporate opportunity" doctrine.

17) A shareholder's preemptive right gives her the right to purchase up to a ten percent (10%) share of every new offering of stock by the corporation.

18) Once a corporation's board of directors declares a dividend, it becomes a corporate debt and is enforceable by law.

19) If Hannah owns 10% of the stock of Modern Co., a private company, she has the right under Sarbanes-Oxley to purchase a proportionate share of Modern Co when it goes public.

20) If managers choose to run an LLC on their own, then management rights are apportioned among the members, according to the capital contributions made by each member to the LLC. 21) For most business decisions, the quorum, or minimum number of directors necessary to conduct business, is usually ________ of the total number of directors.

A) three-quarters B) two-thirds C) one-half D) a majority 22) A ________ is defined as a coalition of individual outsiders who do not necessarily own stock, but can be affected by corporate decision making.

A) corporate director B) special interest group C) stakeholder D) shareholder 23) ________ is based on the belief that because corporate decision making influences more individuals and groups than just the shareholders and the managers, corporate decisions should be made by an impartial group of corporate outsiders.

A) Corporate democracy B) Governmental control C) Shareholder democratic control D) Independent director control 24) ________ give(s) shareholders more voting control, because this voting method states that each share of stock has as many votes as there are directors to be elected.

A) Voting trusts B) Proxy voting C) Pooling agreements D) Cumulative voting 2 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

25) The right to cast another shareholder's vote is called: A) cumulative voting.

B) proxy voting.

C) a pooling agreement.

D) a shareholder proposal.

26) A ________ refers to the actual document that is used to request the right to vote the other shareholders' votes.

A) proxy solicitation B) pooling agreement C) cumulative voting agreement D) voting trust agreement 27) To submit a shareholder proposal, a shareholder must have owned (for the past year) ________ percent or ________ in market value of the voting stock of the corporation.

A) 5; $5,000 B) 3; $1,000 C) 1; $2,000 D) 1; $5,000 28) When shareholders join together in a temporary arrangement, it is called a: A) voting trust.

B) cumulative voting arrangement.

C) shareholder proposal.

D) pooling agreement.

29) If Drake, a shareholder of Sweet Corp., feels that he has been deprived of the right to purchase some of the corporation's newly issued stock, he: A) may bring a derivative suit against Sweet's corporate management.

B) may bring a direct suit against Sweet's corporate management.

C) may bring both a derivative suit and a direct suit against Sweet's corporate management.

D) has no legal recourse against Sweet's corporate management.

30) In order to bring a derivative suit, a shareholder must own stock: A) at the time of the injury only.

B) at the time of the suit only.

C) both at the time of the injury and at the time of the suit.

D) at the time of the injury, suit, and trial.

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31) Pogisa is a director at Trendz Corp. After studying and consulting with experts, Pogisa votes to have Trendz sell a tract of land for $500 per acre. Within a year, the land is worth $2,000 per acre, and Trendz shareholders want to sue Pogisa for her vote to sell the land. Under the ________, Pogisa may be entitled to legal protection.

A) Fairness Rule B) Business Judgment Rule C) Insider Trading Rule D) Actual Authority Rule 32) Michelson was chairman of the board and chief executive officer of a computer manufacturing firm. When considering whether to purchase CompuPrint, the manufacturer of computer printers, Michelson examined CompuPrint's financial records, consulted with legal and financial experts, and conducted an in-depth study of the marketplace and decided that it would be profitable for his corporation to purchase CompuPrint. If CompuPrint turns out to be a poor investment, and a court hears a case challenging Michelson's decision, the court will most likely analyze his conduct based on the ________ rule.

A) business judgment B) insider trading C) fairness D) shareholder protection 33) Linda, a manager and a currency trader for United Traders, has specific instructions from the CEO not to take a position on any currency in excess of $1 million. Linda sees what she believes to be a sure thing and takes a $20 million position. Unfortunately, the transaction goes bad and costs United $60 million. Does Linda have any liability to United?

A) Yes, because Linda violated specific instructions and is, therefore, liable for the company's loss.

B) No, Linda's actions are a normal market practice.

C) Yes, because Linda engaged in insider trading.

D) No, Linda is protected by the business judgment rule.

34) Some jurisdictions consider managers liable only if they exceed their authority and the violation results in negligent or intentional conduct. This duty is referred to as the duty of: A) diligence.

B) loyalty.

C) care.

D) obedience.

35) Koto, a successful accountant, has been invited to join the board of directors of Big Corp.

Koto is concerned that she will face personal liability for her decisions while on the board of Big. Big Corp. can limit Koto's liability at this point in time by including: A) protective measures in its corporate charter.

B) voluntary protective measures in its bylaws.

C) voluntary protective measures in its articles of organization.

D) protective measures in the members' agreement.

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36) Alan, a corporate manager at DollarShopper Corp., decides he would like to pursue a business opportunity he knows DollarShopper would also be interested in. Under the corporate opportunity rule, Alan may: A) pursue the business opportunity only if he offers it to other corporate managers and also allows them to pursue it.

B) never pursue the business opportunity as long as he is employed by DollarShopper.

C) pursue the business opportunity only if he first offers it to DollarShopper, and the corporation rejects it.

D) pursue the business opportunity without informing DollarShopper of it.

37) In the case United States v. Todd Newman and Anthony Chiasson, the Second Circuit Court of Appeals held that for a ________ to be ________, she must have the requisite ________ to receive a personal benefit in exchange for that information.

A) defendant-tippee; criminally liable; mens rea B) defendant-tipper; civilly liable; mens rea C) defendant-tippee; civilly liable; mens rea D) defendant-tippee; criminally liable; actual authority 38) Aqua, LLC is a member-managed LLC. Andrew, a member, agrees to resolve a dispute with a customer by submitting the claim to binding arbitration. This action by Andrew is: A) legally binding on Aqua.

B) not legally binding on Aqua.

C) legally binding on Aqua if the claim is under $1,000.

D) not legally binding on Aqua until approved by a court.

39) ________ elect the ________, who take whatever actions are appropriate and in the best interests of the corporation.

A) Shareholders; officers B) Officers; board of directors C) Stakeholders; board of directors D) Shareholders; board of directors 40) Some suggest that the insistence that all disputes involving U.S. corporations be fashioned under ________ law, a trend known as ________, makes listing in the U.S. unpopular.

A) American; special interest group control B) American; corporate governance C) American; legal imperialism D) Sarbanes-Oxley; legal imperialism 41) Jalenos owned voting stock in Altech, Inc. He submitted a 700-word shareholder proposal to management one week before the next shareholders' meeting. The proposal called for the firing of Carter, who was the president of Altech. Management rejected Jalenos' proposal. Point out the problems with Jalenos' proposal.

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42) Seventy shareholders of a large chemical plant entered into a pooling agreement to vote against the corporation's plan to acquire a smaller chemical manufacturing company. On the day of the vote, 25 of the shareholders in the pooling agreement broke the agreement and voted for the acquisition. Brian, one of the shareholders in the pooling agreement who voted against the acquisition, said he was going to bring a lawsuit for breach of contract against the shareholders who broke the agreement. Can Brian expect to win such a lawsuit? Why or why not?

43) Shareholders of Mitas Corp. are concerned that the directors are not performing their tasks properly for the benefit of the corporation. Discuss what must be done by the shareholders before bringing a derivative suit.

44) Sam, a manager at Small Co., is confronted with a difficult business decision. Discuss what Sam must do to meet the duty of due diligence in making his decision.

45) To encourage individuals to serve on boards of directors, legislatures have enacted a variety of measures to protect the good faith and due diligent activities of directors. Discuss the types of measures enacted by state legislation.

46) Dave, a manager for Small Co., has authority to contract for credit sales of up to $100,000.

Dave decides to extend $300,000 of credit for Christmas merchandise to a new customer with solid financial statements. Discuss if Small Co. is bound by this transaction and how Small Co. might choose to be bound if not already bound.

47) Tye, a director at Big Co., suspects wrongdoing within Big Co. and after investigation, uncovers legal violations. Discuss the steps that must be taken under current law in light of this discovery.

48) Mannix owned 200 shares of Leo Deliveries, Inc. Leo had 600 shares total. Leo decided to increase its capital stock to 1,200. Assuming that Mannix elected to exercise his preemptive rights, how many shares would he be entitled to?

49) Joe sells his stock in Big Co. to Mary. Discuss what Mary must do to be recognized as a shareholder in Big Co. 50) Chris, Miller, and Kacy created a limited liability company by filing the articles of organization, appointing a statutory agent, and paying the appropriate filing fee. They also agreed to run the LLC themselves, making it a member-managed LLC. Chris entered an agreement whereby he purchased 1,000 barrels of oil. Neither Miller nor Kacy believe that Chris paid a good price for the oil. Nevertheless, Chris argues that the LLC is bound by the contract he entered. Is Chris correct? Explain.

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Business Law with UCC Applications, 15e (Sukys) Chapter 28 Government Regulation of the Corporate Entity 1) The Wickard v. Filburn (1824) case held that commercial activity that occurred within a state was subject to federal regulation if that completely in-state activity affected interstate commerce.

2) In the Opening Case, Asadi v. GE Energy, the Court of Appeals used a purposive approach in its holding and analysis.

3) In the Wickard v. Filburn case (1942), the Supreme Court declared that the private use of wheat on a single-family farm could not be curtailed by the federal government because it did not have a substantial impact on interstate commerce.

4) The power of the states to regulate commerce comes from a state's federal power.

5) The process of doing business as a corporate person can sometimes be called ultra vires.

6) Under Dodd-Frank, the SEC outlawed swap transactions (swaps) which are derivatives that are made in an over-the-counter market.

7) Under Dodd-Frank, Title IX, known as the Investor Protection and Securities Reform Act, now allows corporations more freedom to self-regulate under the Sarbanes-Oxley Act. 8) Under Dodd-Frank, a golden parachute is a compensation package that protects executives who might lose their positions following a merger or consolidation.

9) If ABC Co. and XYZ Co. agree to charge consumers a fixed, but fair, price for their products, the courts will judge the legality of the practice based on a per se approach, 10) Under the quick-look standard, a court will determine whether an objective observer with elementary financial knowledge see that the arrangement under scrutiny could damage competition.

11) In the Classic Case, American Needle, Inc. v. The NFL, the court applied the rule-of-reason standard, which asks judges to balance the pro-competitive results of a challenged arrangement with the anti-competitive results.

12) If Auto Supply refuses to sell hoses to Small Retail Co. unless Small also buys brake shoes from Auto, the action will be classified as an RPM agreement.

13) Congress passed the Clayton Act to police and prohibit specific business practices such as interlocking directorates.

14) The Robinson-Patman Act gave the President the power to challenge false advertising of food, drugs, and cosmetics, regardless of the advertiser's knowledge of the advertisement's truth or falsity.

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15) Under the Foreign Trade Antitrust Improvements Act (FTAIA), if an American company is operating totally in a foreign market, that company is not subject to American antitrust law.

16) ABC Co. makes a tender offer to acquire 3% of the stock of XYZ Co. This is considered a merger, and ABC must file with the SEC. 17) If ABC Co. is to merge with XYZ Co., typically a unanimous vote (100%) of the shareholders will be required.

18) A golden parachute is an offer by a target corporation to the bidder to acquire a portion of the shares, which are already held by the bidder, at a price greater than when it was originally sold.

19) Greenmail requires that a friendly suitor is given an option to buy a valuable piece of property owned by the target corporation should a hostile bidder gain control of the corporation.

20) A leveraged buyout (LBO) always includes junk bonds as part of the investment.

21) The first major expansion of the Commerce Clause of the U.S. Constitution was done through which of these?

A) The Dodd Frank Act B) Wickard v. Filburn C) Gibbons v. Ogden D) The Securities Exchange Act 22) The ________ case held that a farmer's production of wheat for use only on his own farm was held to impact interstate commerce.

A) Gibbons v. Ogden B) Wickard v. Filburn C) Hughes v. Wendel D) Mangus v. Miller 23) Mill enterprises needs to raise a large amount of money. To raise the money, it sells its fractional interest in orange groves, located in Florida, to Sunshine Co. in New York. Sunshine Co. would be ensured a return in investment from the land purchased. Mill enterprises has sold: A) real estate.

B) debt instruments.

C) goods.

D) securities.

24) If Tom is a potential investor in Delta Co., he should receive a ________ prior to investing.

A) contract summary B) prospectus C) closing settlement statement D) registration statement 2 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

25) The ________ Act prohibits contracts, combinations, and conspiracies in restraint of trade.

A) Robinson-Patman B) Federal Trade Commission C) Sherman Antitrust D) Clayton 26) Small State has a limited customer base north and south of the interstate highway. Company A and Company Z agree that A will sell north of the interstate highway and Z will sell south of the interstate. This is a ________ violation of the Sherman Antitrust Act. A) per se B) rule-of-reason C) joint federal and state D) minor 27) A ________ means the exclusive control of a market by a business enterprise.

A) monopoly B) common enterprise C) trust D) confederation 28) Homeruns Co. manufactures baseball bats. It withdrew deals from a few retailers who refused to put a particular price tag, as decided by Homeruns Co, on the bats. This act of Homeruns Co.: A) violates the per se rule.

B) is legal under the quasi-RPM arrangement.

C) violates the rule-of-reason standard.

D) is legal under the RPM agreement.

29) EA Games Industries is a manufacturer of home video game machines and home video games. Johnson Department Store wants to market the home video games, but EA refuses to sell the games unless Johnson also agrees to purchase the home video machines. A court will most likely find such a restriction to be a(n): A) interlocking directorate.

B) lawful tying agreement.

C) unlawful tying agreement.

D) per se violation.

30) The ________ Act specifically addresses promotional allowances.

A) Clayton B) Robinson-Patman C) Federal Trade Commission D) Sherman

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31) An attempt at a(n) ________ occurs when one corporation makes a tender offer to the shareholders of another corporation.

A) merger B) consolidation C) stock acquisition D) asset acquisition 32) If Titanic Co. makes a tender offer to acquire more than ________ of the shares of a target, Titanic Co. must file a statement with the SEC. A) 5% B) 10% C) 15% D) 20% 33) Some states require that a merger involving an LLC have a ________, rather than the twothirds majority required of corporations.

A) 51% majority vote B) one-third majority vote C) four-fifths majority vote D) unanimous approval 34) In a(n) ________, the buyer purchases enough shares in a corporation to gain voting control of that corporation.

A) asset acquisition B) stock acquisition C) consolidation D) joint venture 35) The Crown Corp. offers to buy the voting stock of the L&N Corp. with the intention of acquiring L&N and changing its management. To avoid being taken over by Crown, L&N asks the Spendle Corp. to outbid Crown. In this situation: A) L&N is a hostile bidder, Crown is the target, and Spendle is a white knight.

B) L&N is a friendly suitor, Crown is a hostile bidder, and Spendle is the target.

C) L&N is the target, Crown is a hostile bidder, and Spendle is a white knight.

D) L&N is the target, Crown is a friendly suitor, and Spendle is a hostile bidder.

36) Generally, a ________ is established as a pre-offer strategy that remains dormant until the right set of circumstances activates its operation.

A) greenmail arrangement B) poison pill defense C) public relations campaign D) targeted shareholder agreement

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37) ________ occurs when a targeted corporation makes a deal with the suitor to protect management of the target.

A) Greenmail B) A lockup agreement C) A public relations campaign D) A targeted shareholder agreement 38) A ________ might be used by target management if the target owns an irreplaceable piece of property, the sale of which would seriously devalue the overall worth of the target.

A) greenmail option B) lockup agreement C) public relations campaign D) targeted shareholder agreement 39) In a ________, a target corporation uses news releases, advertisements, and press conferences to convince shareholders to retain present management.

A) greenmail arrangement B) lockup agreement C) public relations campaign D) targeted shareholder agreement 40) Ajax Co. has six directors. Three of the directors favor corporate expansion and three directors want to keep Ajax at its current size and distribute the surplus profit. How will a court likely resolve this deadlock?

A) Appoint a seventh director to break the tie.

B) Appoint an arbitrator.

C) Order an involuntary dissolution of Ajax.

D) Order the directors to make an agreement or be in contempt of court.

41) NewCo. plans to sell stock to investors with a website offer form. Discuss the federal securities regulations, if any, with which NewCo. must comply.

42) To support his efforts in the writing of a new novel, Madden sold various patrons an interest in the forthcoming novel. The patrons agreed to supply him with money in exchange for a return on their investments out of any profits Madden made in the sale of the novel. Could this scheme be considered a sale of securities? Why or why not?

43) John is a director of both Small Co., with an aggregate worth of $75,000, and Medium Co., with an aggregate worth of $7,500,000. Small and Medium are competitors in the auto repair business. Discuss the legal implications of John's service.

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44) Matrix Corp. falsely advertises on national television a device that allows a car engine to run on water. When the FTC attempts to stop this advertising, Matrix asserts that anyone should know that the advertising is false and is intended as a joke, and that it offers all persons who inquire about its advertisement a gasoline treatment supplement which does, in fact, cause engines to run cleaner, improving gasoline mileage. Discuss the likely FTC success in its attempt to stop this advertising.

45) Tremendous LLC proposes to merge with Small LLC. Janice, a member of Tremendous, is opposed to this merger. The operating agreement allows mergers to be approved by a simple majority vote. Discuss the legal rights Janice may assert in this situation.

46) Big Co. would like to purchase a patent owned by Small Co. that Big believes could be used to make a profitable product. Small has other assets and owes a variety of debts. Discuss the advantages to Big if it only purchases the patent, rather than Small Co. in its entirety.

47) Yanasko wanted to purchase Raymond-Mason Inc. When he approached the board of directors about the merger, they told him that they were not interested. Yanasko then suggested an asset acquisition. Again, the board refused. What measure could Yanasko take to sidestep the board of directors and obtain control of Raymond-Mason? Explain.

48) Small Co. is afraid that it will become the subject of a takeover bid and lose its independent existence. Can Small Co. take the help of a friendly suitor to offset any takeover bid? If so, how?

49) Herrera already owns 20% of the stock of the Higgins Corp. and plans to use his own cash to purchase another 30% of Higgins. Herrera's intent is to acquire enough Higgins stock to mount a takeover. According to law, Herrera is required to file a statement with the SEC. What information must Herrera include in the statement?

50) The Pillsbo Corporation failed to file annual reports for three years. The Secretary of State in the state where Pillsbo incorporated told Pillsbo's chief executive officer that she was going to ask the state attorney general to bring a quo warranto action against Pillsbo for failing to file the annual reports. Can she legally do so for this reason? Why or why not?

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Business Law with UCC Applications, 15e (Sukys) Chapter 29 Personal Property and Bailments 1) Intangible personal property is property that has substance and can be touched.

2) An example of chattel would be a horse.

3) When personal property is owned as community, it is said to be owned by both parties, 50-50.

4) Joe and Carol own a lot together as tenants in common. If Carol dies, Joe automatically acquires ownership of Carol's interest in the property.

5) Harvey finds a brand-new iPhone X in the men's room at the local Dunkin' Donuts shop.

Harvey may take it home and use it, because the law is "a finder's keepers, a looser's weepers."

6) Elaine's diamond ring—a family heirloom—was found by Paul, a garbage man, as he was dumping Elaine's trashcan into the back of the truck. Paul claims it is his because it was abandoned and found in the trash.

7) A gift causa mortis can never be taken back by the donor.

8) The gift of an engagement ring is a conditional gift given in contemplation of marriage.

9) On their first date, Maria goes to the Cineplex Movies to watch the latest movie with Poncho.

After the movie, Maria goes with Poncho, to the local hot spot, "El Gallo Jiro." When it comes time to pay the bill, Poncho realizes that he's lost his wallet, and realizes it must have fallen on the floor at the movies. Leaving Maria stranded at the cash register, he arrives at Cineplex only to discover that it is closed. He returns to Gallo Jiro and asks Maria to leave her driver's license at the cash register because they have no cash. The next day he discovers Cineplex has not found his wallet so he informs the manager to call him on his smartphone as soon as they find it.

Poncho's wallet is lost.

10) While in her third year at the NewAge School of Music in Seattle, Washington, Carolynn had a chance to borrow and use for one month, a rare Gladavostok violin played by Thomas Jefferson, and made in 1768. She returned the violin to the owner in Seattle, but telephoned her father in Austin, Texas to ask if he would buy it for her. He borrowed money from his pension fund and paid for the violin. Carolynn had exclusive possession of the violin for the next 20 years, using it in her professional career. Unfortunately, she became an alcoholic, and during one period when she was in a treatment center, she entrusted the violin to her mother for safekeeping and collateral to pay for healthcare expenses. After 3 years in treatment, Ann was released and requested return of the violin, but her mother refused. Ann owns the violin because it was a gift causa mortis from her father.

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11) Rick Link, an amateur archaeologist in Idaho, uncovered artifacts from a Native American NezPerce burial ground that was several hundred years old and belonged to the tribe. Ancestors of the present-day tribe had made the artifacts and buried them with their dead. The tribe asked a court to award to it custody of the property, which included burial pots, ornaments, and pottery.

Link claimed that the property had been abandoned and that he could therefore claim title to the goods because he had taken possession of them. A court would most likely hold for Link because the property was abandoned.

12) Tomas takes out Josefina to a very nice restaurant Broadway Blues, and puts his coat on the coat rack by the front door. When Tomas finishes his dinner, he returns for his coat but it is missing. He talks to the manager of the restaurant who claims Broadway Blues is not responsible for the coat. He is correct.

13) If Fidel leaves his car with the valet at a covered parking garage at the Hilton Riverwalk in San Antonio, and discovers later that it has been damaged, Hilton is liable for the damages to Fidel's car.

14) As a favor to Darrell, Alyce lets him leave his new Dodge Ram 2500 pickup truck with her in the storage shop at her ranch, while Darrell is gone for 3 weeks. Alyce is liable for any damages caused to Darrell's pickup truck.

15) Suppose that Darrell leaves his new Dodge Ram 2500 pickup truck with Alyce, while he is on business in another country. Darrell and Alyce agree that she will store the pickup truck in her shop, but she has permission to use it if she needs to. One day Alyce, while using the pickup, hits a fence causing nearly $10,000 in damages to the truck. Alyce is not liable to Darrell because this was a gratuitous bailment.

16) A constructive bailment occurs when property is transferred to another person without either party giving or asking for payment of any kind.

17) In a bailment for the sole benefit of the bailee, any ordinary and expected expense incurred in the use of the bailor's property must be borne by the bailor.

18) Suppose Lynne puts her grandmother's sewing machine on consignment at Sewing4You, in Boise. By placing the sewing machine on consignment, Lynne as the bailor, has created a bailment for the benefit of the bailor.

19) When booking a $150 one-night stay at Marriott, Marriott places a $250 "block" on Jasmine's credit card. She is outraged and alleges that Marriott cannot do that. Jasmine is correct.

20) HerbsRUs, Inc. hired CMT Trucking Inc to transport 100 pallets of fresh herb plants to stores in eastern Oregon and southwest Idaho. Each pallet held at least 25 plants. The truck experienced significant delays because of wildfires and unexpected detours along I-84. All of the plants perished in CMT's trailer, causing over $10,000 in losses. CMT is not liable because the wildfires and detours were acts of God. 2 Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

21) A(n) ________ is an example of tangible property.

A) promissory note B) iPhone C) share of corporate stock D) account receivable 22) Mashevida and Mei-Ling own a house as tenants in common. When Mei-Ling dies, her share of the house: A) passes to Mashevida.

B) passes to whomever the probate court designates.

C) passes to Mashevida's heirs.

D) escheats to the state in which the house is located.

23) If Phil finds an iPhone in the men's room at a restaurant, it is most likely ________ and Phil should ________.

A) lost; leave it with the restaurant manager B) abandoned; leave it with the restaurant manager C) stolen; personally return it to the owner D) misplaced; leave it with the restaurant manager 24) If Patsy finds a set of car keys on the floor of a cafeteria, most likely the keys are ________ and Patsy ________.

A) lost; keeps them while looking for the true owner B) abandoned; should leave them with the cafeteria manager C) stolen; should leave them with the cafeteria manager D) misplaced; keeps them while looking for the true owner 25) Jason has observed an old car parked in the alley behind his apartment for three months. It has no license plates on it and the tires are flat. Jason concludes that the car has been abandoned and takes possession of the car, gets it running, and decides to use it in a demolition derby. At this point, Alex claims that the car is his. To have title to the car, Jason must prove: A) Alex deserted the car.

B) Alex did not intend to return for the car.

C) Alex deserted the car and did not intend to return for it.

D) Alex had promised the car to Jason as a gift.

26) If an abandoned shipwreck is found outside the boundaries of a state, what law applies?

A) Only the Abandoned Shipwreck Act B) Only the law of finds C) Only the law of salvage D) Either the law of finds or the law of salvage

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27) ________ is the reward given to persons who voluntarily assist a sinking ship or recover its cargo from peril or loss.

A) Gift in causa mortis B) Chose in action C) Salvage D) Severalty 28) Sue receives a $5,000 engagement ring from Tau, but unfortunately Tau dies before the marriage can occur. Tau's parents, as his heirs, want the engagement ring, but Sue wants to keep it. In most states, ________ is/are entitled to the ring because ________.

A) Tau's parents; the ring was a conditional gift B) Sue; Tau (the donor) is dead C) Tau's parents; Tau did not state that Sue was to have the ring if he were to die D) Sue; the engagement was not broken by mutual agreement or by Sue 29) Vanessa has received gifts subject to the provisions of the Uniform Transfer to Minors Act. When Vanessa graduates from high school at age 17 and moves away from home, she wants to terminate the custodianship. At what age does the custodianship terminate?

A) 17 B) 18 C) 21 D) The age is decided on case-by-case basis.

30) Rare art was stolen from the Zerba Art Museum during a war and thirty years later is located in the Alpha Art Museum in another country. Who has title to the art, if Alpha did not know the art was stolen?

A) Alpha, since it is innocent of wrong doing B) Zerba, since the art was stolen C) Alpha, since Zerba has relinquished title in the thirty years D) Zerba, since it had not sent the art voluntarily 31) Jenna hangs her fur coat on a rack in the unattended waiting room of Physicians Associated Office. After her visit with Dr. Wong, Jenna prepares to leave, but discovers her fur coat is missing. What liability, if any, do Physicians Associated and Dr. Wong have for the missing coat?

A) None, since they had no control over the coat.

B) Physicians Associated is liable, since the coat rack was in its waiting room.

C) Dr. Wong is personally liable as Jenna had come to meet him.

D) None, since it was a mutual benefit bailment.

32) Agnes borrowed a cup of sugar from her next-door neighbor. She intended to return the sugar the next day. This transaction was a: A) bailment for the sole benefit of the bailor.

B) mutuum.

C) mutual-benefit bailment.

D) bailment for the sole benefit of the bailee.

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33) Tammy leaves her car under Emilia's carport while flying to visit her grandmother. Emilia allowed Tammy to do so as a favor. Emilia uses the car to go to her office though she had not been given any permission to do so. One day she meets with an accident and the car is damaged.

Which of these is correct?

A) Emilia is not liable because she let Tammy leave the car as a favor.

B) Emilia is liable because she did not have permission to drive the car.

C) Emilia is not liable because she would have the implied right to drive the car.

D) Emilia is liable because this is a bailment for the sole benefit of the bailor.

34) Jim borrowed Sally's car to get to class when his car did not start. After attending the class, he uses the car to visit his grandmother. While on his way, he enters an intersection when the light is just turning from yellow to red and meets with an accident. What is the Jim's legal position regarding the car?

A) Jim is only liable for reasonable care of the car.

B) Jim is only liable if he committed gross negligence.

C) Jim is only liable if he committed slight negligence.

D) Jim has no liability.

35) Elaine asked Meredith if she could borrow Meredith's iPhone to text her mom pictures of an awards ceremony. Meredith gave Elaine the iPhone and asked for nothing in return for this favor.

This transaction was most likely a: A) bailment for the sole benefit of the bailor.

B) mutuum.

C) mutual-benefit bailment.

D) bailment for the sole benefit of the bailee.

36) Cato rented a chain saw from Rental Warehouse to cut firewood for his home fireplace.

When it was time for lunch, Cato left the chain saw in the woods while he went home to eat.

When he returned, the saw had been stolen. Cato is ________ to Rental Warehouse based on his ________.

A) liable; duty to use reasonable care B) not liable; duty to exercise care against gross negligence C) liable; duty to exercise care against slight negligence D) not liable; duty of mutuum 37) Viola checked her mink coat at the Landmark Theatre cloakroom while attending a play and was given a claim ticket. After the play, she handed the ticket to the person at the counter, but her mink coat could not be found. What must be proven concerning negligence?

A) Viola must prove that Landmark was negligent.

B) Landmark must prove that Viola was negligent.

C) Viola must prove that she was not negligent.

D) Landmark must prove that it was not negligent.

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38) Vernon parked his gasoline tanker truck at Moonbeam Hotel while seeking lodging for the night. Moonbeam employees went to the gasoline truck to assist in finding a satisfactory parking place, smelled gasoline, noticed a small drip from the truck, and refused to rent a room to Vernon. Is that action lawful?

A) No, because rooms were available in the hotel.

B) Yes, because the presence of the truck would frighten other guests.

C) No, because the innkeeper cannot discriminate on the basis of social status.

D) Yes, because there is a danger to other guests and the hotel.

39) Paulina rented a room at the Desert Inn Hotel and left her diamond ring on the dresser in her room when she went to dinner. When she returned, the ring was gone. Paulina discovered that the room door did not automatically lock when she closed it; instead it required her to use her key. Is Desert Inn liable for her loss?

A) Yes, since innkeepers are insurers of their guests' property.

B) No, since Paulina was negligent in determining that her room door was not locked.

C) Yes, since innkeepers are in a bailment relationship regarding guests' property.

D) No, since Paulina must inquire about Desert Inn's security system.

40) Polonius registered for five nights at Cloud Hotel at $200 per night. Cloud requested Polonius' credit card number when he registered. When Polonius went to a restaurant, his credit card was denied, since it was at the authorized credit limit. Why was Polonius' credit card limit likely reached by registering at Cloud Hotel?

A) Cloud charged the card the full amount of his stay.

B) Cloud charged the card $1,200 with the 20% overage allowed to cover possible damages.

C) Cloud blocked Polonius' credit card when he registered.

D) Cloud made use of the card for payments other than paying the hotel tariff.

41) Carlos, Maria, and Justus own land near a developing city as joint tenants. Maria would like to sell her part of the land to Big Sky Development Co., but Carlos and Justus do not want to sell. Carefully discuss if Maria can sell her interest in the land.

42) Anna finds a ring on the sink ledge of a restroom for use by customers of Red Barn Restaurant. Discuss who has legal custody of the ring.

43) Matthew opens a checking account with Big Bank in the state of Blue. His National Guard unit is activated for military duty, and Matthew is sent abroad. He makes no deposits to or withdrawals from the account for fifteen months. Matthew gets married and moves to the state of Red when released from active service. May Big Bank or Blue lawfully assert a claim to Matthew's checking account?

44) While visiting her uncle, Jackson remarked that she admired her uncle's collection of rare books. Her uncle then said to her, "I've been meaning to tell you that I want you to have them.

Instead of leaving them to you in my will, I'm going to give them to you right now. You can consider the books yours. However, please keep them here on my shelves so that my library looks full." Would a court hold that Jackson owns the books? Explain.

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45) Crystal is 86 years old and enters the hospital for observation after having fainted. Crystal is depressed and, while in the hospital, gives her antique wedding ring to Autumn, a good friend, saying to Autumn, "I won't be long in this world." After a change in medication, Crystal improves and returns home, living another three years before dying in a bus wreck while going on a fall foliage tour. Her will leaves her antique wedding ring to her granddaughter, Sarah.

Discuss who is entitled to ownership of the ring with Autumn in possession of the ring.

46) When Tammy purchased a television from her neighbor, Andy, she paid a fair market price.

Andy moved shortly thereafter to an unknown location, and Tammy was shocked to learn that her television was a stolen article. It had actually belonged to Olive. Tammy believes that she will not have to surrender the television or at least Olive should share the financial loss by paying her half of what she paid Andy, since Tammy asserts that she is an innocent victim.

Carefully discuss Tammy's beliefs.

47) Viva ships livestock via Cattle Truck Co. to an out of state feed lot. The cattle are held at the state line for a week, while the state's agricultural department determines that the livestock is not diseased. Can Viva require Cattle Truck to pay for the extra expense and lost profits if Cattle did not inform Viva of this possible delay when it accepted the shipment?

48) Jason Jets, Inc. asked Southern Transport, a common carrier, to carry extremely hazardous jet fuels to one of its bases in another state. Was Southern within its rights when it refused to transport the fuel? Why or why not?

49) Alexander Warehouse Co. stores boxes of china for Crystal Import Co., but stacks the boxes too high so that lower boxes collapse and break the china contents. Alexander asserts that this is Crystal's responsibility for not having stronger boxes, and Crystal asserts that Alexander improperly stacked the boxes. Discuss what party is responsible for the damage.

50) Quinlan picked up the goods that he had stored in Dana's warehouse, promising to pay Dana the following week. Several months passed, and Quinlan still had not paid Dana for storing the goods. Dana claimed that she had a warehouser's lien on the goods that were stored in her warehouse. Was Dana correct? Why or why not?

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Business Law with UCC Applications, 15e (Sukys) Chapter 30 Real Property and Landlord and Tenant Law 1) John and Marie decide to plant shrubs on their property. These shrubs are called fructus industrials.

2) Melinda and Susan live in a large subdivision and share a common fence. There is not more than 20 feet from the side of each house (10 feet on either side of the fence). Melinda digs a hole next to the fence to plant a large tree. A year later Susan notices cracks in her tile flooring and hires an inspector. The inspector says her foundation is cracked, most likely by the tree planted too close to her house. Generally, Melinda is liable for Susan's damages, including the floor.

3) Tom owns land on one side and Lori owns land on the other side of a non-navigable stream.

Both own to the middle of the stream.

4) A barber's chair bolted to the floor of a rented building is called a trade fixture and becomes a part of the building itself.

5) Jeanne sells an acre of her three-acre parcel to Ana and expressly provides that Ana shall have a right-of-way across Jeanne's remaining land so that Ana can reach her land. In this case Ana's land is the subservient parcel.

6) A "profit à prendre," which can only be created by deed, gives the owner of the profit the right to remove something of value from the dominant property.

7) A "reversion interest" conveys land to the grantor for the life of the grantee.

8) When a man and a woman own real property as tenants in coverture, each person owns an undivided share of the whole property.

9) Under a dower deed, no warranties are made as to the defects in title that arose before the grantor owned the property.

10) A quitclaim deed is one that transfers all warranties of title to property.

11) Suppose Peter and John have been neighbors for over 30 years and share the same boundary.

In order to access his irrigation water and head gate, which is on John's property, Peter has been walking on Johns property for the entire time he has lived there. Now, John is selling his property and doesn't want Peter to cross anymore. Peter does not have a right to a prescriptive easement.

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12) In 2010, Jack Miller, CEO of Miller Developers Inc, purchased 100 acres of ranchland he developed into a premier subdivision. He sold the subterranean rights to Texas Fracking Inc. in 2011 before any lots were sold. In 2016, Fred and Ethel Mertz bought a lot and built their dream home. However, lately they have begun to notice strange noises at strange times under their home. In fact, their foundations have cracked. They spoke to their neighbors who complained of the same problems. They all agreed to sue Texas Fracking Inc., who claims no liability.

13) A sublease will be held to be valid if the landlord accepts rent over a period of time from a subtenant.

14) Notwithstanding the written lease agreement, state and local laws have the right to restrict or expand the respective rights and duties of the landlord and the tenant.

15) In creating a senior assisted-living home exclusively meant for people above the age of 62, Jodie would run afoul of age discrimination prohibitions.

16) An invasion of spiders and other pests into rental homes at the prestigious 2Zero8 gated apartment complex may amount to a constructive eviction.

17) The right to exclusive possession by the tenant makes the landlord a trespasser should there be any unauthorized entry by the landlord into the rented premises.

18) When vacating, the tenant must turn over to the landlord all trade fixtures.

19) In the event of a wrongful eviction, the tenant is not justified in abandoning the premises without paying rent.

20) The landlord will be held responsible for any injury caused to others due to a defect in public areas, such as hallways and stairways.

21) Some states authorize landlords to use force to evict tenants.

22) The built-in dishwasher in Fernando's apartment is most like a: A) courtesy.

B) personal property.

C) trade fixture.

D) fixture.

23) In deciding if an item is a fixture, the courts look to: A) attachment, adaptation, and easement.

B) adaptation, easement, and intent.

C) intent, tenement, and attachment.

D) attachment, adaptation, and intent.

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24) Edward Philips signs a deed allowing the utility company to suspend power lines over his land. A utility company's right to use Edward's land for suspending power lines is called a(n): A) dominant tenement.

B) easement.

C) tenement.

D) servient tenement.

25) An easement that Charleen enjoys across her neighbor, Hank's, land: A) is only effective during Charleen's lifetime.

B) is only effective during Hank's lifetime.

C) extends to future owners of Charleen's land.

D) cannot last more than seventy years.

26) Lydian owns a small island outright. She is said to have a(n): A) estate in fee simple.

B) leasehold estate.

C) life estate.

D) reversion estate.

27) In a tenancy in common, the tenants: A) always take title at the same time.

B) cannot transfer their share to their heirs.

C) always have equal interests in the property.

D) have equal right to possess the property.

28) In a joint tenancy, time, title, interest, and possession are known as the four: A) certainties.

B) factors.

C) unities.

D) components.

29) Allison and Zena own property as joint tenants. Zena's creditors can levy: A) upon Zena's interest, and take over Zena's interest as a tenant in common.

B) upon Zena's interest on execution, and take over Zena's interest as a joint tenant.

C) both Allison's and Zena's interest on execution, and take over their interest as a lien creditor.

D) upon both Allison's and Zena's interest on execution, and take over their interest as owner.

30) Historically, in tenancy by the entirety: A) a husband and wife shared entire control over the estate and shared the right to all rents and profits.

B) only a husband had entire control over the estate, with the exclusive right to possession and the right to all rents and profits.

C) a husband and wife were regarded, in law, as separate individuals.

D) an execution by a judgment resulting from an action against a husband or wife alone may have been placed against the entire property.

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31) Jack and Jill live in a community property state. Jill works full time, and Jack stays home taking care of their children. What is the legal status of the earnings Jill makes that are used to purchase a new home?

A) Owned by Jill B) Owned by Jill, subject to a one-third interest Jack has C) Jointly owned by Jack and Jill D) Owned by Jill, Jack, and the children 32) A deed becomes effective when: A) it is recorded in the public records.

B) the signatures are acknowledged.

C) it is delivered to the grantee.

D) it is prepared and signed by the grantor.

33) Tom dies, and in his will, he names Pinson as the personal representative of his estate.

Pinson decides to sell Tom's house to Sally. Pinson could transfer title to Sally by means of: A) the probate court records.

B) the decree of the probate court judge.

C) the sworn statement of Pinson.

D) a license issued by the court.

34) A ________ is designed to permit the ________ of a plot of land to recover ________ rights that have not been utilized by a purchaser of such rights for a long period of time, usually longer than 20 years.

A) dormant minerals statute: lessor; mineral B) dormant minerals statute; surface owner; mineral C) fee simple defeasible; surface owner; mineral D) lease agreement; lessor; minerals 35) Abbot Vending Co. has a license to install vending machines at the Slumber Apartment Complex. Can Abbot transfer this right to Zeno Concession Co.?

A) Yes, if Zeno provides identical services.

B) No, since the license is a personal privilege.

C) Yes, if their agreement gives ownership interest in the property.

D) No, since it is a possessory estate.

36) Erin, a French student, boarded with a family in America for two months while she studied.

Every day, the American family gave Erin her own room and bathroom and fed her breakfast and dinner. Erin would be considered a: A) tenant.

B) direct owner.

C) lodger.

D) subletter.

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37) Laura has a tenancy at will apartment rental agreement with Management Apartments. When Management sells the apartment complex where Laura lives, what is the legal status of Laura's apartment rental agreement?

A) In most states, the rental agreement ends.

B) In most states, Laura could sue Management Apartments for selling the apartment without her consent.

C) In most states, the rental agreement continues if Laura gives written notice to both the old and new owners of her desire to continue it.

D) In most states, the rental agreement ends only if it had existed for less than one year.

38) Iago has a tenancy for years apartment rental agreement with Ranch Apartments. When the agreement ends in March, Iago asserts a right to renew, while Ranch states that the rental agreement ended without notice. Which party is correct?

A) Iago, since there is an implied renewal right.

B) Ranch, since no statute requires a party to give notice when ending a lease.

C) Iago, since the tenancy for years must at least continue until the end of the calendar year.

D) Ranch, since the tenancy for years automatically terminates on the expiration of the stated term.

39) Robert is interested in leasing Bill's property. Robert must include all of the following essentials into the lease agreement, except a definite: A) agreement as to the extent and bounds of the leased property.

B) and agreed term.

C) agreement about the purchase options of the property.

D) and agreed price of rental and manner of payment.

40) On a snowy day in early January, Jeremy is visiting his friend Manny at Manny's apartment at the Snooty Fox. While walking up the exterior wooden steps to get to Manny's third floor apartment, one of the steps—which is rotten—breaks. Jeremy falls through to the ground and is severely injured. What result?

A) The Snooty Fox is liable based on ejectment in a common area.

B) The Snooty Fox is not liable based on unlawful detainer.

C) The Snooty Fox is not liable because of the weather conditions.

D) The Snooty Fox is liable based on defect in a common area.

41) A lease agreement may give the tenant which, if any, of the following rights?

A) Right to rent control B) Right to require a security deposit C) Right to renew or purchase D) Neither the right to renew or purchase 42) Jackson sells his farmland. A dispute has arisen about whether or not the following items are included in the sale. The contract is silent concerning the following items: a growing cotton crop, a tractor, an irrigation pump that can be unbolted by disconnecting two pipes, and a tool shed that sits upon concrete blocks on top of the ground. Discuss each of these and decide if they are included in the sale of the farmland.

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43) Martina flew her ultralight airplane 200 feet above the surface of a vacant lot owned by Jacobs. When Jacobs complained, Martina claimed she was flying in navigable airspace. Was Martina correct? Explain.

44) Brad is a riparian owner in a state that follows the riparian rights doctrine. Brad believes that he owns the soil beneath the stream that flows through his land and that he has the right to bottle and sell, in a new business venture, the water in the stream. Does Brad have the right to do so?

Why or why not?

45) Mr. Zolotas told his landlord that he wanted to make some improvements to the house he was renting from her. He installed recessed ceiling lights and had bookshelves custom made to attach to and fit beneath the main staircase. When Zolotas moved out, he removed the shelves and the ceiling lights. Did he have a legal right to do so? Why or why not?

46) Starting in 1985, Helena drives across Giant Ranch to cut twenty miles off the trip from her land to the nearest public road. Giant Ranch does not object to this until Helena protests the environmental policies of Giant Ranch. Giant then fences off the path that Helena drives, and Helena protests this in a suit. Discuss the likely result of this case.

47) Charles, a healthy twenty-five-year-old, owns a life estate in ten acres of land on the edge of a growing city. Developers would like to purchase the ten acres, but the holder of the remainder interest, Doria, does not want to sell. Discuss what rights, if any, the developers may acquire.

48) Uta, Piper, and Hoku own 1,000 acres of land as tenants in common. Part of the land borders an interstate highway, another part borders a farm-to-market road, and part is scarred with deep erosion and gullies. The three want to divide the land into separate parcels for each of them, but cannot agree. Discuss how a court will resolve the problem.

49) Ariel and Titus own adjoining tracts of land divided by a fence that has been in place since 1978. In order to obtain a bank loan, Ariel has a survey made of his land and discovers that the fence is twenty feet off the property line. Ariel and Titus cannot agree to move the fence and end up in litigation. Discuss the likely result of the suit.

50) At the end of her two-year lease, Margo remained in her apartment and continued to pay her landlord rent every month, which he accepted. One day, Margo received a letter from her landlord accusing her of creating a tenancy at sufferance and threatening immediate eviction.

Was the landlord acting within his rights? Explain.

51) Due to a severely cold winter, the city's water mains connected to Mountain Apartments froze and broke leaving Mountain tenants without water or heat from the Mountain boiler.

Discuss what liability, if any, Mountain has to the tenants.

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Business Law with UCC Applications, 15e (Sukys) Chapter 31 Wills, Advanced Directives, and Trusts 1) All probate rules are determined by Uniform Probate Code.

2) Joseph and Susan are shareholders in a closely held corporation. If nothing was written about this, when Susan dies, all the corporate property will go to Joseph.

3) Personal property that is left by will is called a devise, except in states that have adopted the Uniform Probate Code.

4) A durable power of attorney is a document authorizing another person to act on one's behalf in the event of one's incapacity, or to become effective if one is incapacitated.

5) Every will must be in writing to be valid and enforceable.

6) Rose, who is 83 years old and on a fixed income, tells Gina, her attorney daughter, "I need to go see an attorney and do-up a will, but I don't have the money." Gina says, "Oh, in this state you can create a valid will as long as it's all in your own handwriting." If Rose decides to take her daughter's advice, she will have created a holographic will.

7) With the exception of a holographic will, a will must be in writing, signed by the testator, and attested to in the testator's presence by the number of witnesses established by state law.

8) At the time of the execution of her will, there was a question as to whether Juanita was suffering from Alzheimer's. Some of her friends said yes, some said no. Juanita's son Jose had observed his mother's failing health and mental illness over a the last few years. He once remarked to his wife that when he visited his mom, she asked him who he was when he was sitting next to her. A few minutes later, she was hugging him and conversing about all the memories they had when they lived in the 'old country.' Juanita created a holographic as her own will and no one contested it. When the matter went before the probate judge, he disallowed the will saying, "The testatrix did not have a sound mind and memory when she was writing her will." Therefore, he ruled her will was invalid. The judge is correct.

9) A will must be typewritten and must be under seal.

10) Homer is physically unable to sign his will. While he is heavily sedated and sleeping on a few feet away, Jane signs the will for him in the presence of a few friends. The next morning, Homer passes away. Jane wants to probate the will because she is the sole beneficiary. The will is valid.

11) The Opening Case of Winkfield v. Children's Hospital and Research Center involved the question under the Free Exercise Clause of the First Amendment.

12) If Allan is a witness to his wife Cindy's will, Allan will be able to inherit under Cindy's will—unless there are other witnesses.

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13) Karl signs and dates a handwritten will without a witness. Such a will is called a nuncupative will.

14) Nuncupative wills are only used to bequest real property.

15) The Classic Case, Windsor v. United States (2013), involved the constitutionality of the Defense of Marriage Act (DOMA).

16) John executed a will over 8 years ago and wants to make a small change to the will. He will most likely ask an attorney for a codicil.

17) A surviving spouse is legally bound to accept the amount provided in the will even if he does not like the provisions of the deceased spouse's will.

18) In most states, a child who can prove that she was intentionally left out of her parents' will receives the same share that she would have received had her parents died without a will.

19) Any person who has the last name of the testator is allowed to contest a will.

20) If a person dies without a valid will, they are said to have died testate.

21) Grandmother Smith is concerned about having an incapacitating illness that will prevent her from managing her finances. Grandmother Smith should execute a(n): A) power of attorney.

B) advance directive.

C) agency proxy.

D) durable power of attorney.

22) Chandra is an invalid and, therefore, she cannot put her signature on her will. Her friend Nina signs the will for her. When Nina signs on behalf of Chandra, there is no one else in the house. Is the will valid?

A) Yes, since Chandra was present during the time the will was signed.

B) No, since she did not date it.

C) Yes, since she is presumed to be mentally competent.

D) No, since there were no witnesses present during the signing of the will.

23) Darius wrote a will leaving his property in equal shares "to all my friends" which he dated and signed. Is the will valid?

A) Yes, most likely, since the document expresses Darius' intent.

B) Probably not, since the language of the will is ambiguous.

C) Yes, since he has dated and signed it.

D) No, since there is a numerical limit to the number of legal heirs.

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24) While in combat, a soldier, in front of four witnesses, made an oral will in which he distributed personal property. Such a will was: A) a nuncupative will, which is not valid in most states.

B) a nuncupative will, which is valid in all states.

C) a valid holographic will.

D) intestate.

25) Dai executes a will and provides copies to all her children. Later, she prepares a different will and destroys the first original will, but not the copies. Has the original will been canceled?

A) No, since the copies still exist.

B) Yes, even though copies exist, Dai destroyed the original.

C) No, since delivering the copies prevents Dai from later changing her will.

D) Yes, since the last will is always the one probated.

26) Ruby's husband Caleb dies with title to the family home in his name. Caleb's creditors want to force the sale of the home to satisfy the unpaid debts. May Ruby prevent this sale?

A) Not if the debts are legitimate.

B) Yes, based on the homestead exemption.

C) No, if the amount of debts exceeds the fair market value of the home.

D) Yes, with the forced share.

27) Lucy's stepfather, Zed, passed away intestate when she was 19. Zed had never adopted Lucy, but they were much closer than most fathers and daughters. As a stepdaughter: A) Lucy's legal rights of inheritance are the same as those of adopted children.

B) Lucy's legal rights of inheritance are the same as those of Zed's natural children.

C) Lucy has a limited right of inheritance, since she was not adopted.

D) Lucy has no right of inheritance, since she was not adopted.

28) Mathew made his will, leaving his estate to his only son, Andrew. Two years later, he felt inclined to leave $100,000 toward a new old age home under construction in his locality.

Mathew may make this bequest: A) by executing a codicil.

B) by adding the bequest to the original will and initialing it.

C) by writing the bequest on a separate sheet and affixing it to the original.

D) by executing a durable power of attorney.

29) Carl has his lawyer prepare his will. Wanting to make a few minor changes, Carl places some handwritten words in the margins, initials them, and scratches out words in the typed text.

Carl's changes: A) create a codicil.

B) create a new will.

C) amend the typed will.

D) are legally ineffective.

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30) A nonprofit organization, Save the Tigers, wants to contest Anna's will, since she promised to leave property to them at the annual Charity Banquet. Save the Tigers has: A) a right to submit evidence that Anna was of unsound mind.

B) a right to submit evidence that Anna was subjected to undue influence.

C) no right to contest the will.

D) no right to contest the will, but may challenge the ownership of the property in question.

31) Trudy had been a constant companion of Gertrude. When Gertrude died, she left Trudy $10,000 in her will. On what basis might other heirs best attempt to challenge the $10,000 gift?

A) Undue influence B) Unsound mind C) Improper heir-ship D) Improper execution 32) Tom and Megan die in a plane crash. After their marriage, they had been jointly holding property. What happens to their property?

A) Tom's heirs inherit the whole property.

B) The state escheats the property.

C) Megan's heirs inherit the whole property.

D) The property is distributed equally between the heirs.

33) If Tano dies without a will, he dies: A) testate.

B) intestate.

C) interstate.

D) testator.

34) Morgan, a resident of New York, had an antique car collection garaged in New Jersey. The car titles were kept in a safety deposit box of a bank in Delaware. If Morgan dies intestate, the law of which state will determine the ownership of the cars?

A) New Jersey B) New York C) Delaware D) New Jersey, New York, and Delaware 35) Mack, the father of two children, dies intestate. Under a typical statute, the rights of his wife would include entitlement to: A) one-half of the estate.

B) the entire estate.

C) one-half of the remainder of the estate plus $200,000.

D) no part of the estate.

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36) Pepe dies without a will leaving a brother, a cousin, and an uncle as his only surviving relatives. Who is the "next of kin"?

A) The uncle B) The cousin C) The brother D) This must be determined by the state law where Pepe died.

37) Frisco and his wife, Esperanza, were killed simultaneously in an auto accident. Frisco had life insurance naming Esperanza as the beneficiary. Frisco's will left all his property to a charity, and Esperanza's will left all of her property to her mother, Verdad. Who is entitled to the insurance proceeds under the Uniform Simultaneous Death Act? A) Verdad B) No one, since Esperanza is deceased.

C) This is determined by intestate succession.

D) The charity 38) In states that have not adopted the Uniform Probate Code, the person named in a will to carry out the terms in it is called a(n): A) administrator or administratrix.

B) executor or executrix.

C) settler.

D) testator or testatrix.

39) In 1990, in the case known as ________, the United States Supreme Court ruled that the right to die was guaranteed by the due process clause of the United States Constitution.

A) Cruzon v. Director, Missouri Department of Health B) Roe v. Wade C) Gonzalez, Attorney General v. Oregon D) Windsor v. United States 40) A trust that is created by a will is called a(n): A) conveyance in trust.

B) declaration of trust.

C) intervivos trust.

D) testamentary trust.

41) Charles creates a revocable living trust. What are the typical advantages of creating a revocable living trust?

A) Estate tax advantages B) Management advantages C) Both estate and income tax advantages D) Management advantages as well as estate and income tax advantages

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42) Forty-year-old Kelsey, a homeowner with a wife and two children, made out his will the day he was institutionalized for alcohol abuse. When he drew up the will, Kelsey was experiencing severe withdrawal symptoms, including impaired memory, insomnia, and tremors. Describe how a court would evaluate whether Kelsey was of sound mind when he made out his will.

43) John liked the language of his grandfather's will and made a copy of it, and handwrote in some changes to names and dates and signed this copy in the presence of witnesses. Discuss if John's will is valid.

44) Whitney signs her will and then realizes that she needs witnesses. She finds two friends, tells them the signature is hers and the two friends sign the document. Discuss if this method is valid.

45) Amos was divorced and dying in Mercy Hospital when he executed his will in the presence of his mother, daughter and two nurses, all of whom signed as witnesses. The will left all of Amos's property to his mother and daughter and left nothing to Amos's son. The son challenged the validity of Amos's will. Discuss the legal issues.

46) Colleen disinherited her husband Glen and left her entire estate to her church. Glen desires to challenge this distribution. Discuss Glen's likely success.

47) Gracie was a single mother of ten children, three of whom were adopted, and two of whom were stepchildren. One day, Gracie was struck by a car and killed. She died intestate. Will all her children inherit from her? Explain.

48) Brad and Sally, a married couple, died at the same time in a tornado in a state that has adopted the Uniform Simultaneous Death Act. Brad's will left his property to Sally and then to his children if she were to die before him. Sally's will left her property to Brad and then to charity. Discuss the distribution of their property.

49) Fritz is having his will prepared and also wants to prepare other advance directives. Discuss the typical advance directives and why they are prepared.

50) Teresa is concerned that her children will waste their inheritance and owe many creditors who will take any unspent inheritance. Discuss how Teresa may allow the children to inherit and yet prevent her fears from becoming reality.

51) Santos created an irrevocable living trust for her stepdaughter. In her later years, she became angry with her stepdaughter and sought to rescind the trust. Will she be able to do so? Explain.

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Business Law with UCC Applications, 15e (Sukys) Chapter 32 Professional Liability 1) Certified public accountants are licensed after they pass a federal accountant's exam.

2) Kits wants to become a 'public accountant' for publicly traded companies but must first be a certified public accountant under SEC rules.

3) When an auditor performs a "qualified opinion" audit, they are certifying the results to the New York Stock Exchange under the Sarbanes-Oxley Act. 4) GAAP was created by the FASB. 5) If Small Co. uses a GAAS auditing standard, it will—most likely—be subject to an adverse opinion.

6) In a Type 1 accounting arrangement, the client can sue the accountant for malpractice.

7) Suppose Mary is a CPA and John hires her to create a financial audit. Further, suppose that John uses Mary's work to secure a loan from BigBank. BigBank never met Mary or communicated with her. Suppose further that John defaults on his loan contract with BigBank.

Under the Cardozo standard, if BigBank decides to sue Mary the CPA BigBank will win because of privity with Mary.

8) Suppose Mary is a CPA and John hires her to create a financial audit for the purpose of securing a loan from BigBank, and Mary prepared the report with this purpose in mind. Suppose further that John defaults on his loan contract with BigBank. If BigBank decides to sue Mary, BigBank can argue that Mary owed it a duty of care.

9) If BigCo, Inc. decides to file a registration statement with the SEC, Accounting Firm PLLC can protect itself from potential lawsuits if it has conducted its own due diligence.

10) The Platonic Stabilizing Standard refers to a foreseeable plaintiff in privity with the CPA. 11) Sarbanes-Oxley created the Public Company Accounting Oversight Board that now supervises all public accounting firms.

12) A type two arrangement between an accountant and a client follows ordinary contract law principles.

13) An accountant who prepares a fraudulent financial statement is liable to anyone who is in actual privity with the accountant or her firm.

14) Generally, if Jake is a certified financial advisor under SEC rules, he has a fiduciary duty to his client(s).

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15) When dealing with architects, the "cost of repair" rule applies to situations where a structure is unusable for its originally intended purpose.

16) Anna who is 17 years old, sees a medical doctor and becomes concerned about what the doctor tells her—she has ovarian cancer. This report is protected by statute under the doctorpatient privilege and cannot be disclosed to her family without her permission.

17) Nadia, a licensed physician, operated on a patient at Saint Jerome's Regional Medical Center.

Dr Nadia wore a SJRMC coat but did not have surgical privileges. St Jerome's could be liable on the basis of ostensible authority.

18) Jose Alarcon is an attorney and founder of Alarcon & Associates, LLP. In preparing for a trial, he begins to collect evidence that he will use to represent his client at trial. This material is protected under the attorney-client privilege.

19) Juanita was misdiagnosed by Dr. Samir at St. Jerome Regional Medical Center (SJRMC).

Upon further investigation, Juanita discovered that Dr. Samir was let go from the Medical Center across town for complaints alleging negligence. If true, SJRMC may be liable for negligent credentialing.

20) Joseph is an attorney who is being sued by a former client, Trudy, for malpractice. If a third party, ONNCO, Inc., was also injured during the incident, along with Trudy, ONNCO can also sue Joseph as well.

21) A(n) ________ is an examination of the ________ records of an organization to determine whether the records are a fair representation of the actual financial health of the organization.

A) audit, financial B) appraisal, legal C) review, appraisal D) audit, dissolution 22) A(n) ________ opinion is a qualified opinion by an auditor that indicates that the financial statements are an accurate reflection of the company's financial health apart from some minor deviation from GAAP, not serious enough to warrant an adverse opinion.

A) "except for" B) "unless" C) "adverse" D) "indeterminate" 23) When auditors conclude that the financial records of the company are an accurate reflection of the company's financial status, they will issue a(n): A) unqualified opinion.

B) qualified opinion.

C) adverse opinion.

D) disclaimer.

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24) Dan is an accountant with Miller & Co. The financial condition of Miller & Co. is not so good, but Dan shows it to be very healthy while preparing its financial statement, knowing that Miller & Co. will show the statement to Chase in seeking financing for its new project. Dan will ________ personally liable to Chase if the new project goes bankrupt, and Chase will be able to recover against Miller based on the liability theory of ________.

A) not be; general consent B) be; attorney-client privilege C) not be; breach of contract D) be; actually named third parties 25) Claus tells CPA Vernon that he needs an audit to borrow money from Big Bank. Claus pays Vernon, and Claus takes Vernon's audit to Big Bank who makes the loan. When Claus defaults on the loan, Big discovers numerous liabilities that the audit did not reveal. Can Big Bank sue Vernon for negligence in a state that recognizes the near-privity rule?

A) Yes, because Vernon breached the trust that Claus had placed in him.

B) No, because Big and Vernon did not have a contract.

C) Yes, because Big was an actually named third party.

D) No, because Vernon does not guarantee the collection of Big's loans.

26) Jim tells his independent accountant, Rachelle, to prepare a financial statement for his business associate, Mel. If Rachelle is negligent in her preparation of this financial statement: A) Rachelle will be liable if Mel suffers actual financial loss due to her negligence.

B) Jim will be liable if Mel suffers actual financial loss due to Rachelle's negligence.

C) Rachelle will still not be liable to Mel. D) Mel will not recover any money for financial loss due to her negligence because the business associate is not an actually named third party.

27) Cal, an investor, lost $15,000 after purchasing corporate stock based on a false registration statement. Under the Securities Act of 1933, Cal: A) can sue the accountant if he can show the registration statement was misleading about a material matter.

B) may sue the accountant who prepared the registration statement under the Securities Exchange Act of 1954.

C) may sue the accountant who prepared the registration statement under the Securities Act of 1933.

D) may sue the corporation of stock fraud under the Securities Exchange Act of 1934.

28) State security statutes are commonly called ________ laws.

A) exchange B) third party C) common D) blue sky

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29) Milton is offered a contract by Marcos and Co. to design condos for a fourteen-story structure. After the condos are completed, Marcos and Co. finds that instead of two cupboards, all the condos have only one cupboard. The error is traced back to Milton's faulty design. The error notwithstanding, the condos are still in absolutely usable condition. What is Milton's liability?

A) Milton has to reimburse the client for any extra money spent to fit in an extra cupboard.

B) Milton has to pay Marcos and Co. the difference between the market value of the building as it stands and the market value of the intended structure.

C) Milton has to pay the tenants the cost for fitting in an extra cupboard.

D) Milton has to pay the state a fine for the inconvenience caused to the tenants.

30) The Model Rules of Professional Conduct for attorneys was established by: A) the American Bar Association.

B) the National Conference of Commissioners on Uniform State Laws.

C) the American Lawyers' Cooperative System.

D) Congress.

31) An attorney has a duty of ________ to protect the client and to make certain that the client receives advice and representation that is free of conflicting interests.

A) due care B) loyalty C) proximity D) good faith 32) Miranda, a student in Brad's business law class, asks a hypothetical question that is, in fact, based upon a current problem that her brother, Stan, is having. Brad gives an incorrect answer, and Stan suffers a loss when he acts according to the answer Miranda provided him. Brad has: A) no duty of due care to Stan, but has to Miranda.

B) no duty of due care to either Miranda or Stan.

C) a duty of due care to both Stan and Miranda.

D) a duty of due care to Stan, but not to Miranda.

33) Which of the following statements is true about the "true locality" rule (TLR)?

A) The TLR requires the court to look at the standard of care used in the exact locality of the physician.

B) The TLR permits the court to judge the actions of a local physician against those of a physician in a community of comparable size and socioeconomic character.

C) The TLR ignores the socioeconomic character of the physician's home base and concentrates instead on the geographical limits of a state border.

D) The TLR permits general practitioners to be judged by one criterion and specialists by another.

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34) Which of the following would be considered a valid informed consent by a court?

A) Dr. Ambrose tells her patient in advance about a dangerous procedure and the risk involved, and obtains the patient's informed consent in writing on a form that is signed by the patient.

B) Dr. Ambrose tells her patient in advance about a dangerous procedure and the risk involved, and obtains the patient's informed consent in writing on a form that is signed by the patient and witnessed by a third party.

C) Dr. Ambrose obtains her patient's oral informed consent, which is witnessed by a third party.

D) Dr. Ambrose tells her patient the procedure is mandatory.

35) Wolfgang was transported while unconscious from the scene of a motorcycle accident to a local hospital, where he was admitted for emergency treatment. Does the hospital need to be concerned about obtaining written consent to treatment from someone before starting treatment on Wolfgang?

A) Yes, informed consent requires a signed document.

B) No, it can get consent after the treatment.

C) Yes, without consent from the next of kin, there is liability.

D) No, general consent is implied, and this is an emergency.

36) Dr. Samuel, a physician, is being sued for medical malpractice. If the "true locality" rule was applied in his case, the court would judge Dr. Samuel's actions: A) against those of a physician in a community of similar size and socioeconomic character.

B) by concentrating on the geographical limits of a state border.

C) by looking at the standard of care used in the same exact locality as Samuel.

D) on the basis of expert testimony provided from his locality.

37) Angela asserts that HIPAA allows her to have copies of the records that result from her psychotherapy sessions with Dr. Xenon. Angela: A) can look through the records along with Dr. Xenon.

B) must have Dr. Xenon's permission.

C) must have Dr. Xenon's permission and can only look through the records along with Dr. Xenon.

D) can have personal copies of these records.

38) Eva, a Mercy Hospital patient, received medication intended for another patient and, as a result, suffered severe complications. In a malpractice case against Mercy, regarding the administering of the wrong medication to Eva, most likely expert testimony: A) will be required.

B) will be required only if it happened once.

C) will not be required only if the other patient was in a different area of the hospital.

D) will not be required.

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39) ________ refer to a system of coordinated health care institutions for Medicare patients developed by the Department of Health and Human Services.

A) High-deductible health plans B) Preferred provider organizations C) Accountable care organizations D) Health maintenance organizations 40) ________ occurs if the hospital has retained a physician that the governing body of the hospital knew or should have known was incompetent.

A) Ostensible authority B) Negligent credentialing C) A staff privilege D) Indifferent testimony 41) Charlie, a high school dropout, works as an accountant for Small Co. Discuss if the state may prevent Charlie from working as an accountant due to his lack of education and failure to meet state registration requirements.

42) Big Co. has made a variety of unsecured, undisclosed, large personal loans to top management officials. Belinda audits Big and discovers this problem. Discuss what type of audit opinion Belinda is likely to issue.

43) Big Co. hires its auditor, Geraldo, as Vice President for Finance. Geraldo is a partner in Seasoned Accounting, a firm that will continue to audit Big. Discuss the major legal issues this situation raises.

44) Spratt, an accountant, deliberately falsified a financial statement she was preparing for Aniline Industries. Gladden and Jarvis invested in Aniline based on the statement. A banker at Kidston National Bank also relied on the statement in deciding to make a loan to Aniline. When Gladden, Jarvis, and Kidston National Bank learned of the deception, they told Spratt that they were going to bring suit against her. Spratt told them that a court would never rule in their favor because they were not known third parties. Was Spratt correct? Why or why not?

45) The architectural firm of Maxwell-Wyatt, Inc. designed a house for Sandoval. Due to an error in the architect's plans, the drain in the basement did not work properly. Can Sandoval rightfully expect the firm to pay him the $1,500 it would cost to correct the error? Explain.

46) Attorney Riana prepares a will for her client, Jones. After Jones dies, Jones's son, Ted, sues Riana because Jones did not minimize the probate process by creating probate-avoiding devices in the will. Discuss if Ted's suit will be successful.

47) Sally is angry with George, her attorney, and wants to sue him for malpractice. Discuss what Sally must prove to win her case.

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48) Carmine was a patient at the Galion Memorial Hospital. While Carmine was out of the room, Riley accidentally spilled a pitcher of water on the floor of Carmine's room. Before cleaning up the water, Riley took her lunch break. When Carmine returned to his room, he slipped in the puddle of water, fell, and injured himself. Carmine sued Riley and the hospital for negligence. At the trial, Carmine argued that there was no need for an expert witness to testify as to the standard of care rendered by the nurse. Was Carmine correct? Explain.

49) Betty is unhappy with her physician, Todd, and wants a copy of her medical records to be able to consult another physician. Todd says the records are his work product and his property.

Discuss the likely outcome of this dispute.

50) Small Hospital uses independent physicians and allows them to wear a Small identification tag and issue orders to Small employees. Discuss the risk Small Hospital is taking.

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Business Law with UCC Applications, 15e (Sukys) Chapter 33 Science, Technology, and Law in the 21st Century 1) Juriscience is the intersection of science, technology, and the law.

2) The most powerful clause in Article I is the commerce clause (Article I, Section 8, Clause 3).

3) As a result of the Gibbons v. Ogden case in 1824, the Congress has exclusive power over all commerce in the United States.

4) The Supremacy Clause means that federal law can preempt state law covering the same subject matter.

5) States have the capacity to regulate science and technology based on the state's treaty powers, which is the ability to uphold and sustain the public health, safety, welfare, and morals.

6) In this pioneering book, Inquiry into the Human Prospect, Robert Heilbroner argued that the planet Earth is faced with one major challenge if humanity expects to continue into the 21st and the 22nd centuries.

7) "Hard Power" consists of military force and economic influence.

8) The WIPO is a specialized agency that has the job of providing international healthcare to developing nations.

9) The UN's Economic and Social Council takes approximately 70% of the UN's annual operating budget.

10) The World Health Organization (WHO) has a branch office in each member nation's country. In the United States, the WHO's branch office is called the Center for Disease and Control (CDC) in Atlanta.

11) WIPO shields intellectual property from copyright infringement, patent violations, and IP theft.

12) The G-77 is a group of developed nations, headed by United States and Russia, that have developed the dependency theory of economic development.

13) Uncontrolled population growth and Heilbroner's book led to the U.S. Supreme Court decisions in Connecticut v. Griswold and Roe v. Wade.

14) A copyright protects the idea itself rather than the expression of an idea.

15) The Classic Case, JCVI and Patent Application US2007 0264688: "To Be or Not to Be . . .

Alive, involved the issue of patenting a self-replicating completely synthetic life-form.

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16) In the traditional "obvious-to-try TSM standard," if a challenger can show that anyone of ordinary skill can show the obviousness of the innovation, the invention would not be patentable.

17) The America Invents Act (AIA) passed in 2011 amended U.S. Patent Law for the first time in decades, and adopted the "first to invent" process.

18) In the Lexmark v. Impressions Products case involving the purchase of compatible toner cartridges, the U.S. Supreme Court, the Court held that the 'right to tinker' is not patent infringement.

19) A patent is a plan, process, device, procedure, formula, pattern, compilation, technique, program, design, method, or improvement used in a business and disclosed only to those employees who need to know it to do their jobs.

20) A trademark is an intangible property right granted to authors of literary, artistic, and musical compositions.

21) In the Opening Case, the plaintiff-nurse alleged the defendant-hospital did (did not) do all of the following except: A) did not properly train the nurse for the task of dealing with such cases.

B) did not provide her with proper protective gear.

C) did not train her in the gear she was given, inadequate though it was.

D) provide her with effective assistance of counsel.

22) The clause that gives the most power to Congress in Article I of the U.S. Constitution is the ________ clause, which has been used over the last two centuries to empower Congress to regulate science and technology.

A) commerce B) equal protection C) due process D) necessary and proper 23) The ________ clause of the U.S. Constitution reads that Congress is empowered to lay and collect taxes, duties, imposts, and excises, and to pay the debts of the United States.

A) necessary and proper B) general welfare C) commerce D) supremacy 24) The ________ clause has been interpreted to mean that the Supreme Court has the legal authority to short-circuit any state statute that contradicts the U.S. Constitution.

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25) NIOs that are completely dependent upon their member nations and would be unable to do anything without their support are referred to as: A) entity level NIOs. B) semi-autonomous NIOs. C) aggregate NIOs. D) trans-national NIOs. 26) The primary job of the Chief Technology Officer of the United States is to: A) build an integrated technology policy especially designed to meet the needs of the national government.

B) support scientific research, to stimulate the national economy, and to safeguard national security.

C) conduct research into all aspects of human life and health and to apply that understanding to cure illnesses, to alleviate disabilities, and to lengthen human life.

D) coordinate advances in technology that will help improve the American economy.

27) The NSF was created to: A) conduct research into all aspects of human life and health and to apply that understanding to cure illnesses, to alleviate disabilities, and to lengthen human life.

B) support scientific research, to stimulate the national economy, and to safeguard national security.

C) coordinate advances in technology and engineering as they relate to the practical jobs of improving the American economy.

D) build an integrated technology policy especially designed to meet the needs of the national government.

28) The three issues that author Robert Heilbroner thought would challenge the existence of the human race are: (1) ________, (2) the challenge of uncontrolled population growth, and (3) the destruction of the environment.

A) terrorism B) nuclear war C) incurable communicable diseases D) death of the sun 29) The ________ is responsible for regulating the transportation and the wholesale price of natural gas and electricity sold for use in interstate commerce.

A) National Transportation Safety Board B) Federal Trade Commission C) Federal Energy Regulatory Commission D) Federal Communications Commission

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30) In 1998, President Clinton signed the ________, which called for the primary industrial nations to reduce carbon dioxide emissions below levels recorded in 1900.

A) United Nations Framework Conference on Climate Change (UNFCCC) B) Copenhagen Protocol C) Kyoto Protocol D) Agenda 21 31) Permits issued under the Clean Water Act relate to the: A) use of river water for agricultural purposes.

B) use of potable water for industrial purposes.

C) use of water by industries beyond permissible limits.

D) release of pollutants into the waterways within legal limits.

32) A ________ is a property right granted by the federal government to an inventor.

A) patent B) copyright C) royalty D) trademark 33) ________ refers to all relevant technical knowledge about the field to which the invention belongs.

A) Patent watch B) Trade secret C) Priority right D) Prior art 34) Which of the following statements holds true for a patent?

A) A patent application cannot be accessed by the general public.

B) A patent expires at the end of a 20-year period.

C) A patent is subject to "first-to-invent" patent process, rather than the "first-to-file" process.

D) A patent is a process used in a business and disclosed only to those employees who need to know it to do their jobs.

35) In Classic Case #2, the Venter Institute filed patent #US 2007 0264688 with the U.S. Patent Office in an attempt to patent synthetic life because Venter had produced a self-replicating ________ completely under the control of a synthetic genome.

A) patent B) copyright C) amoeba cell D) bacterial cell

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36) In the case of ________, the United States Supreme Court decided that it was possible to define and patent a life-form.

A) Diamond v. United States B) Diamond v. Chakrabarty C) Roe v. Wade D) Carey v. Population Services International 37) A ________ is a symbol, picture, image, name, device, color, or word that a business uses to distinguish itself from its competitors.

A) patent B) copyright C) royalty D) trademark 38) The World Intellectual Property Organization Copyright Treaty: A) gives copyright holders the right to copy, publish, and distribute their works in any way, including by making video copies, audio copies, and encrypted copies.

B) makes it illegal to use technological means to bypass or override programs designed to prevent access to a copyrighted work.

C) guarantees that copyright holders will be allowed to use the Internet to post their works with full copyright protection.

D) grants limited immunity to persons who duplicate copyrighted works on the Internet, as long as those users do not profit from the copying process.

39) ________ is aimed at understanding the laws of nature and the principles of the physical universe without any practical goals in mind.

A) Pure research B) Juriscience C) The motivation test D) Applied research 40) A ________ is an intangible property right granted to authors of musical compositions, while a ________ gives a person the exclusive right to sell an invention.

A) copyright; trade secret B) copyright; patent C) patent; trade secret D) trademark; patent 41) Lashkar-e-Taiba is one of the largest and most active, militant Islamist terrorist organizations in South Asia, operating mainly from Pakistan. The organization is banned as a terrorist organization by India, Pakistan, the United States, the United Kingdom, and the European Union.

Lashkar-e Taiba has attacked civilian and military targets in India, most notably the 2008 Mumbai attacks and the 2001 Indian Parliament attack. While discussing the exercise of international power by nongovernmental international organizations (NIOs), how does one categorize Lashkar-e-Taiba?

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42) Joan Kilney had a major car accident. She continued to be fed through a surgically-implanted gastrostomy tube for a period of five years. She expressed a wish to end the prolonged agony by taking recourse to the right to die. What difficulties are generally faced by a trial court in such cases and what could be the remedy as has envisaged by several commentators?

43) Polio cases have decreased by over 99% since 1988, from an estimated 350,000 cases then to 1349 reported cases in 2010. The reduction is the result of the global effort to eradicate the disease. In most countries, the global effort has expanded capacities to tackle other infectious diseases by building effective surveillance and immunization systems. Success hinges on financing the next steps of the global eradication initiative. The World Health Organization has played a significant role in meeting such health challenges. How does the WHO accomplish its targets?

44) The Three Mile Island accident was a core meltdown in Unit 2 (a pressurized water reactor) of the Three Mile Island Nuclear Generating Station in Dauphin County, Pennsylvania near Harrisburg, United States in 1979. It let large amounts of nuclear reactor coolant escape. Which organization handles such cases and how does it ensure that they are not repeated again?

45) Hercules Steel Castings Company, Inc. manufactures steel castings. It does not follow the permissible limits with regard to the release of polluting gases in the air. It has also failed to report violations of pollution control laws to the federal government. Which act does it violate and which agency would have the power to prosecute this organization?

46) Oil Down is an organization which is exploring the possibility of striking oil in the outskirts of a local county. It strikes oil and transports it with the help of pipelines running through the local creek and river. One day, due to some reason, the oil pipeline ruptures, thereby causing contamination of the local creek and river. Under which act would the organization be liable to the federal government and what would be the punishment accorded to the organization?

47) In the past, infant and childhood deaths and short life spans used to limit population growth.

In today's world, thanks to improved nutrition, sanitation, and medical care, more babies survive their first few years of life. The combination of a continuing high birth rate and a low death rate is creating a rapid population increase in many countries in Asia, Latin America and Africa.

Which organization was formed under the United Nations auspices to deal with the problem of population increase? What are the main functions of this organization?

48) John is a mechanical engineer. He has designed a car which uses water rather than fossil fuel to run. Is John's invention eligible to be patented?

49) Sienna runs a restaurant. The barbeque chicken that is served in the restaurant is famous and draws a large crowd. Sienna follows a special process of preparing the chicken. This process is not known to anyone except Sienna and her cook. Does this process of barbequing chicken qualify as a trade secret?

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50) Kan Lee is a U.S. citizen and an employee of MetLoc systems. He was caught stealing and handing over semiconductors to another individual, who is a citizen of a foreign country. Both individuals were arrested. Which law would be invoked in order to prosecute Kan Lee and what would be the punishment if Kan is convicted?

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Business Law with UCC Applications, 15e (Sukys) Chapter 34 International Law and the New World Order 1) The cultural new world order was developed by Samuel Huntington in his book, The Clash of Civilization, which sees the globe as divided into three distinct civilizations that are more or less autonomous and more or less incapable of successfully cooperating with more than one civilization.

2) Predictive political ideology is a technique for determining what the "new world order" will look like.

3) Covering law is a universal normative principle that follows a set pattern that can be used to understand natural processes or human behavior.

4) The principle of honorable surrender calls for a genuine expression of remorse by the combatants for the death and destruction caused by war.

5) When the United States bombed Iraq in 2002 after the World Trade Center bombings, it used the doctrine of preemptive war.

6) The war on terror, specifically the United States v. Bin Laden mission, was based on the notion of a 'just war.'

7) Protective war is aimed at providing aid and assistance to innocent civilians who are being victimized by the military of their own nation-state.

8) The World Bank is designed to serve as a way for financially strapped nations to secure loans that will help them engage in programs of sustainable economic growth and development. The IMF has 188 members, each of which has pledged to act responsibly in the pursuit of economic and developmental goals.

9) The World Trade Organization (WTO) abides by the most favored nation principle, which states that WTO nations must apply the same standards to imports that they apply to domestic goods.

10) Suppose Hans, who lives in Germany, orders a new office desk from Ezilon Muebles in Spain. The furniture arrives, but Hans is not happy with how the new furniture looks in his home in Hamburg. It takes Hans 5 business days to make the decision to cancel the order. The EU only allows consumers to cancel any electronic commerce transactions within 3 working days.

11) The U.N. Convention on the International Sale of Goods applies to all members of the United Nations.

12) The World Trade Organization was formed in 1988 as a result of the Uruguay Round Agreements.

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13) The Under the rules of the WTO's Dispute Settlement Board, any nation or corporation can initiate a lawsuit against another.

14) Liberal democracy is a political ideology that supports placing as much political power as possible in the hands of the people.

15) Jose, who was a surviving victim of genocide and torture during the overthrow of a Central American government, may bring a case before the International Criminal Court.

16) The WTO replaced GATT as the focus of world trade talks.

17) The WTO advocates the use of boycotts, quotas, and quantitative limits.

18) Russia declares it has the right intention of waging war against its former satellite, Crimea.

19) If the President issues an order for a 'surgical strike' against a belligerent nation intent on invading one of its neighbors, the President will have to inform Congress within 72 hours of using American troops.

20) When questions of prisoners of war are concerned, the Geneva Convention governs.

21) ________ history is a technique for determining how world leaders will probably act in a given world order when facing a crisis or mapping out a future global strategy.

A) International initial conditions B) Predictive political C) International behavior D) Realpolitik 22) The ________ is an unstable element within the human decision-making process that emerges because the act of making a decision in a system often alters that system.

A) reflexivity principle B) uncertainty principle C) volition variable D) targeted economic zone 23) The globalized new world order is the only theory that has abandoned the notion that: A) multi-national corporations are the seat of power.

B) NGOs should act as a global police.

C) the nation-state is the primary actor on the global stage.

D) international law has a set of unambiguous goals.

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24) The ________ new world order sees the nations of the world grouped together based on politics.

A) economic B) ideological C) civilizational D) globalized 25) ________ is a universal normative principle that follows a set pattern that can be used to understand natural processes or human behavior.

A) Neoconservativism B) Neoliberalism C) Realpolitik D) A covering law 26) All of the following are covering laws except for: A) a characterization of the global scene.

B) a description of the chief actor on the global scene.

C) a realpolitik description of the morality of the decision.

D) special considerations that must be factored into any international study.

27) The just war theory's criterion of ________ states that war can be initiated only by legitimately recognized nation-states.

A) proportionality B) just cause C) right intention D) competent authority 28) The principle of ________ requires the victor in a war to accept the surrender of the enemy and treat the defeated combatants with dignity and respect.

A) honorable surrender B) repentance C) restoration D) unconditional victory 29) The principle of repentance calls for an expression of remorse by: A) the combatants.

B) only the defeated.

C) all nations.

D) the United Nations.

30) The earliest development of the preemptive war concept was by: A) Leslie Groves.

B) Curtis LeMay. C) Thomas More.

D) Socrates.

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31) The ________ was designed to limit the power of the President as Commander-in-Chief of the Armed Forces to commit American troops to the field.

A) Preventative War Resolution of 1973 B) Protective War Resolution of 1973 C) War Powers Resolution of 1973 D) authorization for the Use of Military Force of 2002 Act 32) The Geneva Conventions deal with: A) prisoners of war only.

B) occupation forces only.

C) both occupation forces and prisoners of war.

D) neither prisoners of war nor occupation forces.

33) In the ICJ, judges who disagree with the advisory opinion of the majority are empowered to issue ________ opinions.

A) dissenting B) qualified C) adverse D) reverse 34) The International Criminal Court: A) uses the prisons of member nations.

B) has jurisdiction over individual defendants.

C) does not have imprisonment as punishment.

D) uses exile and imprisonment in the nation of the victim as punishment.

35) When a contract subject to CISG exceeds $500, it: A) is enforceable without the need to be written.

B) must be written to be enforceable.

C) must be written and reviewed by attorneys for both sides.

D) must be written if the value of the contract exceeds ten percent of the net worth of a party.

36) The difference between the IMF and the World Bank is that the ________ helps all nations, whereas the ________ works only with the ________ nations in the international community.

A) IMF; World Bank; richest B) World Bank; IMF; poorest C) World Bank; IMF; richest D) IMF; World Bank; poorest 37) The World Trade Organization was created as a result of the: A) Geneva Convention.

B) Uruguay Round Agreements.

C) Bretton-Woods Conference.

D) Asian-Pacific Round.

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38) In the WTO, the most-favored nation principle allows: A) economically developing nations to receive special treatment.

B) the developed nations to obtain economic advantages.

C) all member nations to have similar treatment regarding similar imports.

D) poor nations to receive financial payments from wealthy nations.

39) The Dispute Settlement Board of the WTO allows: A) retaliatory measures.

B) imposition of tariff for no more than 10 months.

C) a ban on the imports of the offending nation for no more than 5 months.

D) a boycott.

40) The comprehensive trade coalition involving the United States, Canada, and Mexico is known as the: A) Uruguay Round Agreements.

B) North American Free Trade Agreement.

C) Geneva Conventions.

D) United Nations Conventions.

41) Corzina, a small nation-state, has been attacked by its neighbor, Troy. Another nation-state, Rutland is a friend of Corzina's, but has problems with Troy. Finding this to be the best opportunity, Rutland attacks Troy, defeats Troy, and takes control over its government and the civilian population. Is the cause and intention of Rutland just?

42) A U.S. Court has to decide the application of a NAFTA provision in a dispute between Big Co., a U.S.-based firm, and Medium Co., a Canadian company, concerning the export of prescription drugs by Medium Co. from Canada to the U.S. Discuss the guidelines that a U.S. court will consider while interpreting NAFTA. 43) Hansen had a contract with a Swedish corporation for the delivery of several automobiles.

When the corporation failed to deliver the vehicles as agreed, Hansen indicated that he would bring his case to the International Court of Justice for a proper hearing. Can Hansen make good on his promise to file a complaint with the International Court of Justice? Explain.

44) A United Nations agency has requested an advisory opinion from the International Court of Justice concerning the applicability of the Geneva Conventions to a rebellion within an African nation. No party to the actual conflict has made a request to the United Nations or the International Court of Justice. Discuss the right of the International Court of Justice to issue the advisory opinion.

45) The International Criminal Court wants to try a U.S. citizen for alleged war crimes. The U.S. protests, asserting that the court lacks jurisdiction. Discuss the validity of this assertion.

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46) An international contract between two merchants is the subject of a dispute between the two companies, Universal Exports and Global Industries. The Universal offer specifies delivery by January 15, while the Global acceptance specifies delivery by July 15. Discuss how the CISG will resolve this dispute.

47) Tobyland is a developing nation and needs five million dollars to build dams and flyovers.

Which international organization will give Tobyland a loan of five million dollars?

48) A developing nation wants to protect its farmers from competition from advanced nations.

Due to technology and economies of scale, the advanced nations are able to export food to the developing nation at a price lower than the cost of production by local farmers. At the same time, the developing nation wants to be a member of the World Trade Organization. What can the developing nation do to protect its farmers and still be member of the World Trade Organization?

49) Timberland and Lumberland are members of the WTO. Timberland has a contract to supply electrical and mechanical parts to Lumberland. Lumberland imposes tariffs on the mechanical parts imported by it from Timberland. Timberland approaches the dispute settlement board claiming that Lumberland was violating the trade agreement. The DSB orders Lumberland to remove the tariffs, but Lumberland does not follow it. Can the dispute settlement board order any other measure?

50) Maximberg is a country in Europe and is a member of the European Union. For the convenience of tourists and other commercial purposes, it wants to adopt the euro as its currency.

Can it adopt the euro?

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