Commercial Law
Exam Solutions
Course Introduction
Commercial Law provides a comprehensive overview of the legal principles and frameworks governing business transactions and commercial relationships. The course explores topics such as the formation and enforcement of contracts, sales of goods, negotiable instruments, agency, secured transactions, and the regulation of partnerships and corporations. Students will develop an understanding of how commercial law facilitates business operations, resolves disputes, and balances the interests of various stakeholders. Emphasis is placed on applying legal reasoning to real-world scenarios, analyzing case law, and navigating the complexities of national and international commercial regulations.
Recommended Textbook Fundamentals of Business Law Summarized Cases 9th Edition by Roger LeRoy Miller
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41 Chapters
2290 Verified Questions
2290 Flashcards
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Page 2
Chapter 1: The Legal and Constitutional Environment of Business
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Sample Questions
Q1) Rules issued by administrative agencies now affect almost no aspect of a business's operations.
A)True
B)False Answer: False
Q2) Law includes enforceable rules governing relationships between individuals and their society.
A)True
B)False
Answer: True
Q3) Stare decisis is a doctrine obligating judges to help persons who have failed to protect their own rights.
A)True
B)False
Answer: False
Q4) Some constitutional protections apply to business entities.
A)True
B)False
Answer: True
Page 3
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Chapter 2: Traditional and Online Dispute Resolution
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Sample Questions
Q1) Refer to Fact Pattern 2-1.The least expensive method to resolve the dispute between Java and Kaffe may be
A)arbitration because the case will be heard by a mini-jury.
B)litigation because each party will pay its own legal fees.
C)mediation because the dispute will be resolved by a non-expert.
D)negotiation because no third parties are needed.
Answer: D
Q2) Ula wants to initiate a suit against Valley Farms by filing a complaint.The complaint should include
A)an explanation to refute any defense the defendant might assert.
B)a motion for summary judgment.
C)a motion to dismiss.
D)a statement of the facts necessary to show Ula is entitled to relief.
Answer: D
Q3) A long arm statute permits a court to exercise jurisdiction over an out-of-state defendant.
A)True
B)False
Answer: True
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Chapter 3: Ethics and Business Decision Making
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Sample Questions
Q1) Business ethics is consistent only with short-run profit maximization.
A)True
B)False
Answer: False
Q2) Lia works for Media Marketing Company.Her job includes putting "spin" on the firm's successes and failures.In this context,ethics consist of
A)"bad" versus "good" publicity.
B)questions of rightness and wrongness.
C)the firm's quarterly revenue.
D)whatever is legal.
Answer: B
Q3) According to utilitarianism,an action that affects the majority adversely is morally wrong.
A)True
B)False
Answer: True
Q4) Ethical codes of conduct can set the ethical tone of a firm.
A)True
B)False
Answer: True
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Chapter 4: Torts and Cyber Torts
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Sample Questions
Q1) Consent is a defense to an allegation of assault,but not battery.
A)True
B)False
Q2) Harm must be foreseeable to be considered the proximate cause of an injury in negligence.
A)True
B)False
Q3) Tortfeasor is the term for a person who commits a tort.
A)True
B)False
Q4) To determine whether a duty of care has been breached,a judge asks how he or she would have acted in the same circumstances.
A)True
B)False
Q5) An assumption of risk defense does not require that a risk be voluntarily assumed.
A)True
B)False
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Page 6
Chapter 5: Intellectual Property and Internet Law
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Questions
Q1) In 2010,Online Marketing Corporation registers its trademark as provided by federal law.After the first renewal,this registration
A)is renewable every ten years.
B)is renewable every twenty years.
C)runs for the life of the corporation plus seventy years.
D)runs forever.
Q2) A certification mark distinguishes products approved,or "certified," by the government.
A)True
B)False
Q3) Kay and Leo copy and exchange MP3 music files over the Internet without anyone's permission.With respect to songs owned by Natural Recording Company,this is A)copyright infringement.
B)fair use.
C)licensing.
D)protected expression.
Q4) There are no registration requirements for trade secrets.
A)True
B)False
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Chapter 6: Criminal Law and Cyber Crime
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Q1) Leah gains access to government records and alters certain dates and amounts in her favor.This is
A)embezzlement.
B)forgery.
C)larceny.
D)no crime.
Q2) Herb,a computer programmer for Inventory Control Corporation,is arrested in his employer's parking lot on suspicion of larceny.Herb must be informed of his right to A)a trial by jury.
B)punishment.
C)question witnesses.
D)remain silent.
Q3) A business takes a risk by electronically storing its customers' credit account numbers.
A)True
B)False
Q4) A person who commits larceny can be sued under tort law.
A)True
B)False
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Chapter 7: Nature and Classification
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Q1) Avatar,Inc. ,and Bling Corporation sign a contract in which Avatar agrees to deliver t-shirts emblazoned with video game characters in exchange for Bling's promise to pay.Avatar delivers.The contract is A)voidable.
B)executed.
C)executive.
D)executory.
Q2) The intention to enter into a contract is judged by objective facts as interpreted by a reasonable person.
A)True
B)False
Q3) Green Grocers,Inc. ,enters into a contract with Hiway Transport Company for the delivery of a shipment of fresh produce.If the language in the contract has more than one meaning,it will be construed against
A)the party who drafted the contract.
B)the party with the greater bargaining power.
C)the promisor.
D)the promisee.
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9
Chapter 8: Agreement in Traditional and E-Contracts
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Sample Questions
Q1) Jaime and Kip,consumers,transact a deal over the Internet.Their contract does not mention the UETA.The UETA covers
A)none of the contract.
B)only the part of the contract that involves computer data.
C)only the part of the contract that does not involve computer data.
D)the entire contract.
Q2) Jane offers to sell Kyle three desks for his Lights & Lamps Company administrative office.Kyle sends a rejection first,then changes his mind and sends an acceptance.Whether they have a contract is determined by
A)Kyle's rejection.
B)Kyle's subjective intent.
C)whatever Jane decides.
D)whether Kyle's rejection or acceptance is received first.
Q3) Craig decides to sell his Double-D Ranch in an auction "without reserve." If Craig changes his mind at the auction,he can withdraw his property
A)only before the auctioneer announces that the ranch is sold.
B)only before the auctioneer delivers the deed to the buyer.
C)under no circumstances.
D)within thirty days after the auction.
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Page 10
Chapter 9: Consideration,capacity,and Legality
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Q1) Todos Ltd.agrees to supply United Steel,Inc. ,with minerals from Venezuela.When the government is unexpectedly overthrown in a revolution,Todos can obtain the goods only at a much higher price.United agrees to pay but later files a suit to recover the difference.The court will most likely rule that
A)a change in government is a risk ordinarily assumed in business.
B)an unforeseen difficulty supported the contract modification.
C)Todos engaged in extortion or the so-called holdup game.
D)Todos had a preexisting duty to supply the goods at the initial price.
Q2) Through fraudulent means,Fred induces Gail to sign a contract to build resort cabins on land that Fred does not own.Gail performs,but Fred does not pay.When Gail learns the truth,she may
A)do nothing with respect to the contract.
B)recover for the performance or its value.
C)recover for the performance only.
D)recover the value of the performance only.
Q3) If there is a statute that prohibits a certain action,a contract to do it is unenforceable.
A)True
B)False
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Page 11
Chapter 10: Defenses to Contract Enforceability
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Sample Questions
Q1) Don,a salesperson for Excel Autos,promises Fern that a certain car will give her a "smooth ride." Don offers a test drive,which Fern declines.She buys the car but soon realizes that its suspension is in poor condition.Fern
A)can rescind the contract on the ground of fraud.
B)can rescind the contract on the ground of misrepresentation.
C)can rescind the contract on the ground of mistake.
D)was not defrauded.
Q2) Joy induces Kelly to enter into a contract for the purchase of a condominium about which Joy knowingly misrepresents a number of material features.When Kelly discovers the truth,Kelly can
A)enforce the contract and seek damages.
B)enforce the contract but not seek damages.
C)neither enforce the contract nor seek damages.
D)seek damages but not enforce the contract.
Q3) Refer to Fact Pattern 10-1.Moore's misstatement of the price is
A)a bilateral mistake.
B)a fraudulent misrepresentation.
C)a unilateral mistake.
D)unconscionable.
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Page 12
Chapter 11: Third Party Rights and Discharge
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Sample Questions
Q1) If a contract condition is not satisfied,the obligations of the contracting parties are discharged.
A)True
B)False
Q2) Dwayne and Ewell enter into a contract for the design of an addition to Dwayne's house for which he agrees to pay Ewell.Ewell transfers his right to payment under the contract to Flex Construction Company.Flex is
A)a delegatee.
B)an assignee.
C)an obligee.
D)a prohibitee.
Q3) Jen is a third party beneficiary under a contract between Kyla and Leo.Kyla and Leo can modify or rescind their contract without Jen's consent
A)at any time.
B)at no time.
C)only after Jen's rights have vested.
D)only before Jen's rights have vested.
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Page 13
Chapter 12: Breach and Remedies
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Sample Questions
Q1) If a party breaches a contract,the other party can file a criminal complaint.
A)True
B)False
Q2) On a contract breach,the nonbreaching party's only option is to refuse to perform.
A)True
B)False
Q3) Clarice pays Damien $10,000 to design an ad campaign for her Sweetwater Coffee Stand chain.The next day,Damien tells Clarice that he has accepted a job in San Francisco and cannot design her campaign.She files a suit against Damien.As compensatory damages,she can recover
A)$100,000.
B)$10,000.
C)$1,000.
D)$0.
Q4) Specific performance is the remedy customarily used when one party has breached a contract for personal services.
A)True
B)False
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Chapter 13: The Formation of Sales and Lease Contracts
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Sample Questions
Q1) A bailee is a buyer or lessee.
A)True
B)False
Q2) If a contract for a sale of goods does not include a quantity term,it is a requirements contract.
A)True
B)False
Q3) With a bill of lading,Cartage Common Carrier Company acknowledges possession of certain goods and contracts to deliver them.Cartage is
A)a bailee.
B)a buyer in the ordinary course of business.
C)a good faith purchaser for value.
D)an F.O.B.
Q4) If a contract for a sale of goods does not include a price term,a reasonable price can be determined by looking at the market for the goods.
A)True
B)False
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Chapter 14: Performance Breach of Sales Lease Contracts
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Sample Questions
Q1) If goods fail to conform to a contract in any way,the buyer or lessee must reject them.
A)True
B)False
Q2) If a buyer wrongfully refuses to accept goods that conform to a contract,the seller may recover damages.
A)True
B)False
Q3) In contracts involving a carrier,a seller can complete performance only through a shipment contract.
A)True
B)False
Q4) Screen Perfect,Inc. ,and TV Stores enter into a contract for a sale of high-definition television sets.Screen Perfect ships goods that do not exactly conform to the contract in some details.TV Stores
A)cannot reject the entire shipment.
B)can reject the entire shipment.
C)must accept the entire shipment.
D)must reject the entire shipment.
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Chapter 15: Warranties and Product Liability
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Q1) Oceanic Vessels,Inc. ,and Pacific Harbor Company enter into a contract for a sale of a boat.Oceanic is a merchant who deals in goods of the kind sold.The goods are defective.Under the UCC,the implied warranty of merchantability is breached
A)only if Oceanic did not know about and could not have discovered the defect.
B)only if Oceanic did not know about the defect.
C)only if Oceanic knew about or could have discovered the defect.
D)regardless of what Oceanic knew or could have discovered.
Q2) Fun Toyz Corporation makes skateboards,which it sells to consumers,including Holly and Ira.Due to a defect,Holly is injured while using her new board.Ira's board has the same defect,but he is not injured.In a product liability suit based on strict product liability,Fun Toyz may be liable to
A)Holly and Ira.
B)Holly only.
C)Ira only.
D)no one.
Q3) Promises of fact made during the bargaining process are not express warranties.
A)True
B)False
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Chapter 16: Negotiability,transferability,and Liability
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Q1) To pay for a new desk bought at Office Outlet,Pete makes a check payable to "Offs Outlet." A proper indorsement of the check is
A)"Office Outlet" only.
B)"Offs Outlet" only.
C)"Office Outlet" or "Offs Outlet."
D)"Pete" only.
Q2) On the back of a check payable to Nero,he writes "Pay to Odell,without recourse" and signs it.This
A)does not effect the check's negotiability or any party's liability.
B)relieves Nero of liability on the check.
C)relieves Odell of liability on the check.
D)renders the check nonnegotiable.
Q3) Presentment warranties protect the person who presents an instrument for payment.
A)True
B)False
Q4) To be negotiable,an instrument must be signed in the lower right-hand corner.
A)True
B)False
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Chapter 17: Checks and Banking in the Digital Age
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Q1) Trudy forges Uma's signature on a check "payable to the order of Trudy" drawn on Uma's account in Verity Bank.Most likely,if the bank pays the check
A)the Federal Reserve will reimburse all parties for their costs.
B)the loss will be apportioned among all of Verity's customers.
C)Uma will be liable for the amount.
D)Verity will have to recredit Uma's account.
Q2) Gaining unauthorized access to an electronic fund transfer system is a felony.
A)True
B)False
Q3) Financial institutions that exchange digital images of checks do not have to exchange the original paper checks.
A)True
B)False
Q4) Generally,a bank has no obligation to pay a customer's overdrafts.
A)True
B)False
Q5) The bank on which a check is drawn is the payor bank.
A)True
B)False
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Chapter 18: Security Interests in Personal Property
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Q1) Mona lives in New Jersey,but she works in New York.Mona borrows $1,000 from National Bank,using her motorcycle as collateral.To perfect its security interest,the bank must file its financing statement in at least A)every state.
B)New Jersey.
C)New Jersey and New York.
D)New York.
Q2) Under certain conditions,a purchase-money security interest will take priority over a previous creditor's interest in after-acquired property.
A)True
B)False
Q3) To create an enforceable security interest,the secured party must give value.
A)True
B)False
Q4) A financing statement is effective for no more than five months from the date of filing.
A)True
B)False
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Page 20
Chapter 19: Creditors Rights and Bankruptcy
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Q1) In a repayment plan case,the plan must provide for payment of all obligations in full.
A)True
B)False
Q2) Certain debts are not dischargeable in bankruptcy.
A)True
B)False
Q3) Refer to Fact Pattern 19-2.Mary will receive A)0.
B)$30,000.
C)$50,000.
D)$60,000.
Q4) Doral,Eduard,and Francesca are co-sureties of Glenda's debt to Hi-Credit Company.Doral pays Glenda's entire debt.Doral's right to seek proportionate payments from Eduard and Francesca is the right of A)contribution.
B)redemption.
C)reimbursement.
D)subrogation.
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Chapter 20: Mortgages Foreclosures After the Recession
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Q1) Agnes borrows $110,000 from Bay Harbor Bank to buy a home under a mortgage with an acceleration clause.After eighteen payments,Agnes stops making payments on the mortgage.Bay Harbor
A)can foreclose once on the entire amount of the loan.
B)may seek only the amount of the missed payments,not the entire loan.
C)must foreclose on small amounts over time as each payment comes due.
D must notify Agnes to accelerate the steps to cure the default.
Q2) Seymour borrows $350,000 from Reliable Bank to buy a home.Seymour stops making payments on the loan ten months later.After the bank repossesses the property securing the loan but before it is sold,Seymour wants to buy it.This is
A)a deficiency judgment.
B)a reverse mortgage.
C)a violation of the law.
D)the right of redemption.
Q3) A mortgage must be in writing to comply with the Statute of Frauds.
A)True
B)False
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Page 22
Chapter 21: Agency Relationships
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Q1) Louis,a certified public accountant and an investor,and Maria,an insurance salesperson and a realtor,may create an agency relationship for
A)a business purpose only.
B)a legal purpose only.
C)any purpose.
D)no purpose.
Q2) Before a principal can ratify a contract,the agent must withdraw from the deal.
A)True
B)False
Q3) Clu serves in a representative capacity for Digger.Elmo is injured through Clu's negligence.Digger may be liable to Elmo if Clu's conduct occurred
A)due to a propensity Digger was not and could not have been aware of.
B)during normal working hours.
C)in the course and scope of Clu's employment.
D)outside the parties' employment relationship.
Q4) A principal owes an agent a duty of ratification.
A)True
B)False
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23
Chapter 21: Management Perspective:
Independent-Contractor Negligence
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Q1) According to the dissent's opinion in Media General Operations,Inc.v.National Labor Relations Board,in determining whether a discharge for an employee's "outburst" in violation of a workplace rule violates the NLRA,the court should focus on whether
A)the arrest of the employee is warranted.
B)the NLRA generally protects the employee from discharge.
C)the remark undermines workplace discipline.
D)the rule is fair and justifiable.
Q2) Jewel Property Company hires Klint,an independent contractor,to wash the windows of Jewel's commercial building.Jewel's tenant Lucy is injured when Klint closes a window on her hand.In determining whether Jewel is liable for Lucy's injury,the most important factor is
A)Jewel's employment of Klint.
B)Jewel's investigation of Klint's background and experience.
C)the condition of the premises,especially the window.
D)the degree of control that Jewel maintained over Klint's actions.
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Page 24
Chapter 22: Employment, immigration, and Labor Law
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Q1) A small difference in job content can justify higher pay for one gender.
A)True
B)False
Q2) All employers in the United States are subject to federal employment discrimination laws.
A)True
B)False
Q3) Under the Equal Pay Act of 1963,all of the women on an employer's staff must be paid the same as all of the men.
A)True
B)False
Q4) An employer with fewer than fifteen employees is automatically shielded from federal employment discrimination laws.
A)True
B)False
Q5) Certain employers must provide their employees with up to twelve weeks of family or medical leave during any twelve-month period.
A)True
B)False
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Chapter 23: Sole Proprietorships, partnerships, Limited Liability Co
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Q1) Clu,Dolf,and Elton do business as Fertile Valley Farm.Clu's relationship to the firm ends,but it continues to do business.This is
A)dissociation.
B)dissolution.
C)winding up.
D)wrongful.
Q2) Hud and Iggy form Jerry-Bilt Construction to enter into a contract to build one bridge.Under their partnership agreement,Jerry-Bilt is to dissolve when the bridge is built.Iggy signs a contract for the firm to build a second bridge.Jerry-Bilt
A)dissolves as soon as the first bridge is built.
B)dissolves as soon as the second bridge is built.
C)dissolves immediately on Iggy's signing of the second contract.
D)does not dissolve.
Q3) Each partner is an agent of the partnership in carrying out the usual business of the firm.
A)True
B)False
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Page 26
Chapter 24: Corporate Formation, financing, and Termination
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Q1) Sullivan and Taylor want to form a corporation to provide catering services.The first step in the incorporation procedure is to
A)file the articles of incorporation.
B)hold the first organizational meeting.
C)secure a corporate name.
D)select a state in which to incorporate.
Q2) Generally,a corporation that purchases the assets of another corporation is automatically responsible for the liabilities of the selling corporation.
A)True
B)False
Q3) Vacation Adventures,Inc. ,and Wild River Tour Company plan to merge.Most likely,the articles of merger will be filed with
A)the county recording office.
B)the local chamber of commerce.
C)the state's secretary of state.
D)the national travel agents' association.
Q4) Incredible eSales Corporation is a new Internet business.How can Incredible eSales obtain capital to finance its operations?
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Chapter 25: Corporate Directors, officers, Shareholders
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Q1) Refer to Fact Pattern 25-1.Ruben's suit is a shareholder's
A)indemnification suit.
B)derivative suit.
C)proxy suit.
D)preemptive suit.
Q2) Persons whose names appear in a corporation's stock book are ordinarily entitled to notice of shareholders' meetings and the right to vote.
A)True
B)False
Q3) In many corporations,the directors are also the chief corporate officers.
A)True
B)False
Q4) A board of directors can delegate some functions to corporate officers.
A)True
B)False
Q5) Some states permit a corporate board to have fewer than three directors.
A)True
B)False
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Chapter 26: Investor Protection, insider Trading, Corp Gov
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Q1) Securities of charitable organizations are not exempt from the registration requirement of the 1933 Securities Act.
A)True
B)False
Q2) To raise capital to form Plasticity Corporation with Quinn,Rona sells bonds and stock in other companies,and plans to register an initial public offering under the Securities Act of 1933.SEC Rule l0b-5 covers A)most forms of securities.
B)only bonds.
C)only securities registered under the Securities Act of 1933. D)only stock.
Q3) Refer to Fact Pattern 26-3.Under the Securities Exchange Act of 1934,Hu is most likely A)liable for insider trading.
B)not liable because Hu is only a tippee,not a tipper.
C)not liable because Hu is too far down the chain of disclosure.
D)not liable because Hu traded on the basis of a true fact.
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Chapter 27: Personal Property and Bailments
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Q1) A person who holds all rights in property owns the property in fee simple.
A)True
B)False
Q2) Patty's parents give her a car as a graduation present.While Patty spends the summer in Europe,her friend Rita agrees to keep the car in her garage.On Patty's part,this is acquisition of property by A)bailment.
B)capture.
C)find.
D)gift.
Q3) If confusion occurs as a result of the act of a third party,that third party acquires ownership rights in proportion to the amount confused.
A)True
B)False
Q4) For an effective bailment,the bailor must deliver possession of the bailed property with its title.
A)True
B)False
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Page 30
Chapter 28: Real Property and Landlord-Tenant Law
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Q1) A license is the revocable right of a person to come onto another person's land.
A)True
B)False
Q2) Generally,contract doctrines apply to a landlord-tenant relationship.
A)True
B)False
Q3) A landlord is usually required to give some period of notice to terminate a periodic tenancy.
A)True
B)False
Q4) In most states,the seller of a new house warrants that it is fit for habitation.
A)True
B)False
Q5) To acquire the ownership of a mountain cabin by adverse possession,Cody must occupy the cabin exclusively,continuously,and peaceably for a specified period of time
A)in an,open,hostile,and adverse manner.
B)until the owner files a suit.
C)without the owner's knowledge.
D)with the state's permission.
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Chapter 29: Insurance, wills, and Trusts
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Q1) Eighty-year-old Clark exhibits confusion,forgetfulness,and disorientation.Dave,Clark's doctor,believes that the symptoms indicate dementia.Elsa,who has significant contact with Clark,believes that he is in a state of mental decline.These facts indicate A)an urgency that Clark distribute his assets.
B)Clark's lack of capacity.
C)Dave's misdiagnosis.
D)Elsa's intent to take advantage of Clark.
Q2) In most states,a person must be sixteen years of age to execute a valid will.
A)True
B)False
Q3) According to the terms of Diego's will,specific gifts are made,and taxes and other estate expenses and debts are paid.The assets of Diego's estate that remain are most likely to be distributed
A)by codicil.
B)holographically.
C)per capita.
D)through a residuary clause.
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Chapter 30: Liability of Accountants Other Professionals
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Q1) Dominique,a certified public accountant,provides accounting services to Eagle Corporation.The services include preparing Eagle's financial reports and issuing opinion letters based on the reports.In 2008,Eagle falls into serious financial trouble,but neither Dominique's reports nor her opinion letters indicate this situation.Relying on Dominique's portrayal of Eagle's financial situation,Eagle borrows a large sum of money to build a new shipping facility.In lending Eagle the money,First National Bank relies on Dominique's opinion letter.Dominique is aware of this reliance.If Dominique did not engage in intentional fraud but was negligent,what is her potential liability?
Q2) An accountant is required to discover every impropriety,defalcation,and fraud in a client's books.
A)True
B)False
Q3) Each state establishes rules that govern the conduct of attorneys
A)True
B)False
Q4) An accountant's working papers are the documents that are used and developed during an audit.
A)True
B)False
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Chapter 31: International Law in a Global Economy
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Q1) UniOil,a U.S.firm,owns property in Venezuela.When the government of Venezuela seizes the property,UniOil asks a U.S.court to order the property's return.The court rules that Venezuela is exempt from the court's jurisdiction.This is A)a travesty of justice.
B)the act of state doctrine.
C)the doctrine of sovereign immunity.
D)the principle of comity.
Q2) Dumping is the sale of imported goods at "greater than fair value."
A)True
B)False
Q3) Antidumping duties are the responsibilities of international environmental polluters.
A)True
B)False
Q4) Expropriation occurs when a government seizes private property for an illegal purpose and awards just compensation.
A)True
B)False
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Chapter 32: Adapting the Law to the Online Environment:
The Supreme Court Upholds a Law That Prohibits Pandering
Virtual Child Pornography
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Q1) Global Enterprises Corporation (GEC)engages in what some unhappy ex-employees and disgruntled consumers consider to be bad corporate behavior.These individuals post "horror stories" about GEC on rogue Web sites.By providing a forum for complaints,the potential for damage to the reputation of any corporation via the Internet has
A)decreased.
B)increased.
C)neither decreased nor increased.
D)both decreased and increased.
Q2) Arizona enacts a statute that directly conflicts with a federal law.Under the supremacy clause of the U.S.Consitution,
A)Arizona's statute is rendered invalid.
B)the federal law is rendered invalid.
C)Arizona's statute and the federal law are both rendered invalid.
D)Arizona's statute and the federal law apply concurrently.
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35
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Sample Questions
Q1) One night,Bertram discovers Clu,an intruder,in Bertram's Deli Delite store after the store is closed.Bertram shoots and kills Clu.With respect to criminal prosecution for this use of deadly force,under a duty-to-retreat law Bertram
A)is presumed innocent or may be exempt from prosecution.
B)must prove that he first told Clu to "Get out!" or to "Retreat!"
C)must prove that he first tried to retreat or that his life was in danger.
D)must prove that Clu did not try to retreat or acted without regard for his own life.
Q2) Winston applies to the U.S.Patent and Trademark Office for a patent on a process that uses transactions to hedge the risk in securitiies (stocks and bonds)trading.The patentability of business processes is controversial because business process patent applications involve
A)computer programs.
B)ideas.
C)machines.
D)transformations of particular articles into different states or objects.
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Page 36
Chapter 35: Management Perspective: E-Mailed
Credit-Card Receipts
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Q1) In the Braddock case,in weighing the facts that made up the elements of the plaintiff's claim,the majority cited as a significant factor
A)assurances that were not incorporated into written documents.
B)the arms' length business transactions between the parties.
C)the expectation of the good faith of a family member.
D)the plaintiff's business and professional experience in the industry.
Q2) The Fair and Accurate Credit Transactions Act of 2003 prohibits merchants from priniting more than the last five digits of a credit card number or the expiration date on any receipt provided to the cardholder at the point of sale.According to recent court decisions,this requirement applies to
A)e-mailed receipts only.
B)paper receipts and paperless receipts of all kinds.
C)paper receipts only.
D)Web page screen shots and paper receipts only.
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Chapter 34: Case Study With Dissenting Opinion: Prestridge
V Bank of Jena
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Q1) In the facts of the previous question,suppose that Thalia had had access to Rhett's checks through his carelessness.The majority in the Prestridge case would then most likely hold Silverado liable for A)all checks.
B)checks that were cashed less than thirty days after the statement. C)checks that were cashed more than thirty days after the statement. D)no checks.
Q2) More than thirty days after Rhett receives his account statement from Silverado Bank,he notifies the bank that Thalia forged Rhett's name on some of the checks that the bank has cashed.The majority in Prestridge v.Bank of Jena would most likely hold Silverado liable for A)all checks.
B)checks that were cashed less than thirty days after the statement. C)checks that were cashed more than thirty days after the statement. D)no checks.
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Chapter 36: Adapting the Law to the Online Environment:
The Thorny Issue of Taxing Internet Sales
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Q1) Tour Vista,an online travel company,buys blocks of rooms from Skyview Towers,a hotel in River City,at a wholesale rate.Tour Vista reslls the rooms to consumers at a retail rate.In recent efforts to collect taxes from e-commerce,some cities claim that hotel occupancy taxes should be assessed and remitted directly to the cities based on
A)the dire financial straits of the cities during the latest recession.
B)the retail rates of the rooms.
C)the states of residency of the consumers who reserve the rooms.
D)the wholesale rates of the rooms.
Q2) Fleet Feet,an online travel company,buys blocks of rooms from Grande Hotel,a hotel in Hyper City,at a wholesale rate.Fleet Feet reslls the rooms to consumers at a retail rate.One recent effort by cities to collect taxes from e-commerce has focused on A)hotels that sell blocks of rooms at wholesale rates.
B)non-resident consumers who reserve rooms in in-state hotels.
C)online travel companies.
D)the dire financial straits of the cities during the latest recession.
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The Debt That Never Goes Awayits Discharged in
but Still on the Debtors Credit Report
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Q1) Orly's debts are discharged in a liquidation bankruptcy.Pester & Recover,Inc. ,buys the discharged debt obligations.With respect to these debts,Pester A)can do nothing.
B)can pressure Orly into paying them.
C)must give Orly additional help to rebuild her life after the discharge.
D)must report the debts to credit reporting agencies as "discharged."
Q2) Dale's debts are discharged in a liquidation bankruptcy.With respect to Dale's prebankruptcy debt,Even Stevens Credit Reporting Agency must automatically report A)nothing.
B)the debt as "discharged," except the nondischargeable debt.
C)the debt as "discharged," including the nondischargeable debt.
D)the debt as "unpaid."
Q3) In the facts of the previous question,according to the court in the Central case,a party that would prefer a different result should seek relief from A)Congress.
B)the courts.
C)the president.
D)the students of WSU and other state schools.
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Chapter 38: Adapting the Law to the Online Environment:
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Q1) Beyond Gamez,Inc. ,a video game retailer based in California,does business in all fifty states exclusively online.According to New York state tax law,an out-of-state online retailer must collect and remit state taxes to New York if the retailer
A)plans to establish a substantial physical presence in New York.
B)targets a potential marketing base in New York.
C)maintains a Web site accessible in New York.
D)pays a party within New York to solicit business for its products.
Q2) The holding in Notz v.Everett Smith Group,Ltd.shows that majority shareholders should
A)act ethically and legally in the best interest of their corporation.
B)always act in the best interest of minority shareholders.
C)always act in their own best interest.
D)give control of their corporation to a disinterested third party.
Q3) In the facts of the previous question,under the dissent's reasoning in Notz v.Everett Smith Group,Ltd. ,,a minority BC shareholder could bring
A)a claim against Typhoon's former directors.
B)a direct claim against SBI's majority shareholders.
C)a shareholder's derivative suit against Rewind.
D)no claim.
Page 41
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Chapter 39: Case Study With Dissenting Opinion: Kovarik V
Kovarik
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Q1) Glen and Heidi are married.Later,Heidi's parents invest their savings in certificates of deposit (CDs)in the names of Heidi and her sister Irene.Their parents keep the CDs.When Glen files for divorce from Heidi,he lists the CDs as marital assets.Before the court divides the assets,Irene cashes in the CDs at her parents' instruction without sharing the proceeds with Heidi.Under the reasoning of the majority in Kovarik v.Kovarik,the court will most likely rule that,with respect to Glen and Heidi's marital estate,the CDs are
A)not included because Heidi's parents did not intend to give them to her.
B)not included because Irene cashed them without sharing the proceeds.
C)included because Glen and Heidi were married when the CDs were acquired.
D)included because Heidi's parents gave up control when the CDs were placed in the names of Heidi and Irene.
Q2) In the facts in the previous question,if the CDs are seen as the property of Heidi and Irene,the sisters are most likely
A)joint tenants.
B)tenants at sufferance.
C)tenants by the entirety.
D)tenants in common.
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Page 42
Chapter 40: Unit Case Study With Dissenting Opinion: Dole
Food Co V Patrickson
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Q1) Amigos,Ltd. ,and Bueno,S.A. ,are Chilean firms.Amigos owns a majority of the shares of Bueno.The government of Chile owns a few shares of Amigos.Under the decision in Dole Food Co.v.Patrickson,parties who are immune from suit in U.S.courts under the Foreign Sovereign Immunities Act,as instrumentalities of foreign states,would include A)Amigos and Bueno.
B)neither Amigos nor Bueno.
C)only Amigos.
D)only Bueno.
Q2) In the facts of the previous question,according to the reasoning of the dissent in Dole Food Co.v.Patrickson,parties who would be potentially subject to suit in U.S.courts would include
A)Amigos and Bueno.
B)neither Amigos nor Bueno.
C)only Amigos.
D)only Bueno.
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Page 43