Question: 1. Two individuals signed a contract that

> 1. When a common stock offering requires registration under the Securities Act of 1933: (a) the registration statement is automatically effective when filed with the SEC. (b) the issuer would act unlawfully if it were to sell the common stock without pro

> 1. A voluntary petition filed under the liquidation provisions of Chapter 7 of the federal Bankruptcy Code: A. Is not available to a corporation unless it has previously filed a petition under the reorganization provisions of Chapter 11 of the Code B. au

> 1. A majority of shareholders at Weed, Inc. wanted to reinstate the former CEO of the company and sell off an unprofitable division. Do shareholders have the right to make these two decisions? A. Yes to both. B. No to both. C. The shareholders have the r

> 1. The burden of proof in a civil trial is to prove a case ___. The burden of proof rests with the ___. A. beyond a reasonable doubt; plaintiff B. by a preponderance of the evidence; plaintiff C. beyond a reasonable doubt; defendant D. by a preponderance

> 1. If a manager engages in self-dealing, which of the following answers will NOT protect him from a finding that he violated the business judgment rule: A. The disinterested members of the board approved the transaction B. The transaction was of minor im

> Omnicare was a company that sold medication to nursing homes. When it made these sales, it often received rebates from drug companies. In its registration statement under the 1933 Act, the company stated that the rebates were legal. Ultimately, however,

> 1. Generally, a corporation’s articles of incorporation must include all of the following except the: A. Name of the corporation’s registered agent B. Name of each incorporator C. Number of authorized shares D. Quorum requirements 2. Destiny Manufacturin

> 1. Which of the following is not necessary to create a partnership? A. Execution of a written partnership agreement B. Agreement to share ownership of the partnership C. Intention of conducting a business for profit D. Intention of creating a relationshi

> A bankrupt who owns a house has the option of either paying the mortgage or losing his home. The court cannot reduce the amount owed; its choice is to discharge the entire debt or leave it whole. Congress considered a bill that would permit a bankruptcy

> 1. A sole proprietorship: A. Must file a tax return B. Requires no formal steps for its creation C. Must register with the secretary of state D. May sell stock E. Provides limited liability to the owner 2. Assuming all other requirements are met, a corp

> 1. Gregg Young, the CEO of BJY Inc., insisted on calling Mamdouh El-Hakem “Manny” or “Hank” even when El-Hakem asked him not to. El-Hakem was of Arab heritage. Young argued that a “Western” name would increase El-Hakem’s chances for success and would be

> 1. For which of the following activities can a foreign sovereign be sued? A. Operating a factory dangerously B. Issuing a law that discriminates against a certain group C. Suspending the civil rights of its people D. None of the above 2. Outdoor Technolo

> 1. When Brooke went to work at an advertising agency, his employment contract stated that he was, “at will and could be terminated at any time.” After 28 months with the company, he was fired without explanation. Which of the following statements is true

> 1. At Business University, semester enrollment begins at midnight on April 1. Jasper asked his roommate Alonso as a favor to register him for an important required course. Alonso agreed to do so but then overslept. As a result, Jasper could not enroll in

> Catherine suffered serious physical injuries in an automobile accident and became acutely depressed as a result. One morning, she received a check for $17,400 in settlement of her claims arising out of the accident. She indorsed the check and placed it o

> For several years, CSK Auto, Inc., fraudulently reported inflated earnings. During this period, Maynard Jenkins was the CEO. He was not involved in the fraud, however, and was never charged with a crime. Nonetheless, the SEC sought to clawback some of hi

> Corporate executives are not the only people to earn fabulous salaries. Some athletes earn even more than CEOs. What is the difference between athletes and executives (besides a hook shot)?

> Some companies adopt a staggered board of directors as an antitakeover defense. How does a staggered board affect cumulative voting?

> James owned Despatch Industries. When his son, Wade, and son-in-law, Alan, started working for the company, they both signed identical employment contracts, which provided for a severance payment if they left the company. After Wade and James had a falli

> 1. CPA’s duty of due care to a client most likely will be breached when a CPA: A. Gives a client an oral instead of a written report B. Gives a client incorrect advice based on an honest error judgment C. Fails to give tax advice that saves the client mo

> Ronald O. Perelman, chairman of the board and CEO of Pantry Pride, met with his counterpart at Revlon, Michel C. Bergerac, to discuss a friendly acquisition of Revlon by Pantry Pride. Revlon rebuffed Pantry Pride’s overtures, perhaps in part because Berg

> 1. A check has the following indorsements on the back: Paul Frank without recourse George Hopkins payment guaranteed Ann Quarry Collection guaranteed Rachel Ott Which of the following conditions occurring subsequent to the indorsements would discharge al

> 1.Which of the following statements are true? A. A draft is always a check. B. A check is always a draft. C. A note must involve at least three people D. All of the above. 2. Which of the following standards are required for negotiability: A. The

> 1. Under the UCC Article 9, which of the following actions will best perfect a security interest in a negotiable instrument against any other party? A. Filing a security agreement B. Taking possession of the instrument C. Perfecting by attachment D. Obta

> 1. Cara Fabricating Co. and Taso Corp. agreed orally that Taso would custom manufacture a compressor for Cara at a price of $120,000. After Taso completed the work at a cost of $90,000, Cara notified Taso that the compressor was no longer needed. Taso is

> On October 12, James Camp agreed to provide services to Shawn Sheth by October 15. In payment, Sheth gave Camp a check for $1,300 that was postdated October 15. On October 13, Camp sold the check to Buckeye Check Cashing for $1,261.31. On October 14, fea

> 1. On Monday, Wolfe paid Aston Co., a furniture retailer, $500 for a table. On Thursday, Aston notified Wolfe that the table was ready to be picked up. On Saturday, while Aston was still in possession of the table, it was destroyed in a fire. Who bears t

> 1. For a contract governed by the UCC sales article, which one of the following statements is correct? (a) Merchants and non-merchants are treated alike. (b) The contract may involve the sale of any type of personal property. (c) The obligations of the p

> 1. Which of the following statements is true? A. Vagueness occurs when the parties do not want the contract to be clear. B. Ambiguity occurs when the parties do not want the contract to be clear. C. Vagueness in a contract is often appropriate as a way t

> Is there any good reason to be in a partnership? If so, for what sort of business would it make sense?

> Lucan and Alison agreed to practice law together. Their stationery said, “The Lucan and Alison Partnership” and they told everyone they were partners. They signed a partnership agreement providing that Lucan would receive a “guaranteed annual draw of $10

> Carrie and Laura started a business together to sell bridesmaids dresses online. Carrie spent months preparing the financials and meeting with potential investors while Laura designed dresses and found suppliers. Once Carrie was finished with the financi

> Dutch, Bill, and Heidi were equal partners in a lawn care business. Bill and Heidi wanted to borrow money from the bank to buy more trucks and expand the business. Dutch was dead set against the idea. When the matter came to a vote, Bill and Heidi voted

> Mike Love and Brian Wilson were members of the Beach Boys. In the 1960s, they wrote songs together. The copyrights for these songs were later sold to Rondor, which paid the two men royalties when the songs were played. In 2004, Wilson re-recorded some of

> ETHICS Frank Brown, who is African-American, tried to buy lunch at a McDonald’s at the Dadeland Mall in Florida. The manager, Omar Zaveri, not only refused to serve Brown but verbally abused him, used racial slurs and told all the other employees that he

> Corporations developed to encourage investors to contribute the capital needed to create large-scale manufacturing enterprises. But LLCs are often start-ups or other small businesses. Why do their members deserve limited liability? And is it fair that LL

> On June 30, John signed a demand promissory note for $2,000 to the Camelot Country Club. The note stated that it was being given in payment for a membership in the country club, but in fact, the club was insolvent, its memberships had no value, and John

> As you will see in Chapter 33, Facebook began life as a corporation, not an LLC. Why did the founder, Mark Zuckerberg make that decision?

> 1. Master Mfg., Inc. contracted with Accur Computer Repair Corp. to maintain Master’s computer system. Master’s manufacturing process depends on its computer system operating properly at all times. A liquidated damages clause in the contract provided tha

> Leonard, an attorney, was negligent in his representation of Anthony. In settlement of Anthony’s claim against him, Leonard signed a promissory note for $10,400 on behalf of his law firm, an LLC. When the law firm did not pay, Anthony filed suit against

> Peter Oiler was a truck driver who delivered groceries to Winn-Dixie stores. He revealed to his boss that in his free time he liked to dress as a woman, even though he was happily married to a woman. Oiler had been diagnosed with transvestic fetishism wi

> Lisa T. Jackson, who was white, worked at Uncle Bubba’s Seafood and Oyster House. She filed suit under Title VII, alleging that the restaurant discriminated against black employees. They had to enter through the restaurant’s rear entrance and could not u

> A high-end boutique in Phoenix would hire only women to work in sales because fittings and alterations took place in the dressing room or immediately outside. The customers were buying expensive clothes and demanded a male-free dressing area. Has the sto

> Generally, the BFOQ defense does not apply to customer preference. But recently, some clients have been pressuring their law firms to staff their cases with female and minority lawyers. If a firm does so, would the BFOQ defense be valid? Should it be?

> 1. CPA QUESTION: Nagel and Fields entered into a contract in which Nagel was obligated to deliver certain goods by September 10. On September 3, Nagel told Fields that he had no intention of delivering the goods. Prior to September 10, Fields may success

> 1. Yost contracted with Egan for Yost to buy certain real property. If the contract is otherwise silent, Yost’s rights under the contract are: A. Assignable only with Egan’s consent B. Nonassignable because they are personal to Yost C. Nonassignable as a

> The United Kingdom has not signed the CISG. Until recently, major world traders like Japan and Brazil had refused to sign. Imagine that you are a legislator from one of these countries. What might your objections be to ratifying a treaty on sales law?

> Kendall raised hogs. The Grain Company would provide him with hogs and grain and, in return, he would sign a promissory note in an amount equal to the value of these items. Once the pigs were grown, Kendall would sell them and repay the loan. One time, a

> After the 9/11 terrorist attacks, the U.S. government imprisoned suspected terrorists in Guantanamo Bay, Cuba. Officials argued that these detainees did not enjoy constitutional rights because they were not on U.S. soil, even though they were held by Ame

> Nationwide Insurance Co. circulated a memorandum asking all employees to lobby in favor of a bill that had been introduced in the Pennsylvania House of Representatives. By limiting the damages that an injured motorist could never recover from a person wh

> Despite its detailed dress code for employees, Starbucks stores permitted workers to wear multiple pins and buttons, some of which, but not all, were related to its employee-reward and product-promotion programs. When a union tried to organize employees,

> 1. Kerry finds a big green ring in the street. She shows it to Leroy, who says, “Wow. That could be valuable.” Neither Kerry nor Leroy knows what the ring is made of or whether it is valuable. Kerry sells the ring to Leroy for $100, saying, “Don’t come g

> Walmart employees were not unionized. A group of outside organizers called “Our Walmart” created an app that Walmart employees could use to communicate with one another and obtain legal and other workplace advice. Walmart told its managers to warn worker

> 1. At a fraternity party, George mentions that he is going to learn to hang glide during spring break. Vicki, a casual friend, overhears him, and the next day she purchases a $100,000 life insurance policy on George’s life. George has a happy week of han

> A year ago, Hot Air Systems installed a new heating system in Dolly’s house. A month ago, Chuck called Dolly and told her he worked for hot Air and it was time to perform the yearly inspection. After his inspection, Chuck said it was lucky he had called

> The Pharmaceutical Association holds an annual convention. At the convention, Brittany, who was president of the Association, told Luke that Research Corp. had a promising new cancer vaccine. Luke was so excited that he chartered a plane to fly to Resear

> Jesse worked as a buyer for the Vegetable Co. Rachel offered to sell Jesse 10 tons of tomatoes for the account of Vegetable. Jesse accepted the offer. Later, Jesse discovered that Rachel was an agent for Sylvester Co. Who is liable on this contract?

> 1. Greenville College, a public community college, has a policy of admitting only male students. If the policy is challenged under the 14th Amendment, ___ scrutiny will be applied. A. strict B. intermediate C. rational D. none of the above 2. You begin w

> Kevin was the manager of a radio station, WABC. A competing station lured him away. In his last month on the job at WABC, he notified two key on-air personalities that if they were to leave the station, he would not hold them to their noncompete agreemen

> 1. For consideration to exist, there must be: A. A bargained-for exchange B. A manifestation of mutual assent C. Genuineness of assent D. Substantially equal economic benefits to both parties 2. Which of the following requires consideration in order to

> 1. Rebecca, in Honolulu, faxes a job offer to Spike, in Pittsburgh, saying, “We can pay you $55,000 per year, starting June 1.” Spike faxes a reply, saying, “Thank you! I accept your generous offer, though I will also need $3,000 in relocation money. See

> After a federal judge refused to dismiss criminal charges against him, Michael Reed took revenge by electronically filing a UCC financing statement listing the judge, the prosecuting attorney, and former Secretary of the Treasury Timothy Geithner as $3.4

> The Dannemans bought a Kodak copier worth over $40,000. Kodak arranged financing by GECC and assigned its rights to that company. Although the Dannemans thought they had purchased the copier on credit, the papers described the deal as a lease. The Dannem

> Collateral may change categories depending on its holder and how it is being used at the time of default. Classify a refrigerator in the following circumstances: A. When sold by an appliance store; B. When used by a restaurateur in his business; and C. W

> 1.Lance, an Internet hacker, stole 15,000 credit card numbers and sold them on the black market, making millions. Police caught Lance, and two legal actions followed, one civil and one criminal. Who will be responsible for bringing the civil case? What w

> 1. During her second year at the Juilliard School of Music in New York City, Ann Rylands had a chance to borrow for one month a rare Guadagnini violin, made in 1768. She returned the violin to the owner in Philadelphia, but telephoned her father to ask i

> 1. In 1944, W. E. Collins conveyed land to the Church of God of Prophecy. The deed said: “This deed is made with the full understanding that should the property fail to be used for the Church of God, it is to be null and void and property to revert to W.

> 1. A company offered credit cards to consumers with low credit scores. These cards had a $300 limit, a $75 sign-up fee, a $6 per month participation fee, and a $5 monthly fee for paper billing. Despite the fees, 98,000 people signed up. Is there anything

> Laura and Bruce Trethewey hired Basement Waterproofing Nationwide, Inc., to waterproof the walls in their basement for a fee of $2,500. BWNI’s contract stated: “BWNI will service any seepage in the areas waterproofed at no additional cost to the customer

> ETHICS Wayne and Arlene Selden invested in Competition Aircraft, a fraudulent company that pretended to sell airplanes. After the company went bankrupt, the Seldens sought to recover from accountant William Burnett. He had recommended the investment to s

> 1. After acquiring the Schick brand name and electric shaver assets, North American Phillips controlled 55 percent of the electric shaver industry in the United States. Remington, a competitor, claimed that the acquisition of such a large market share wa

> 1. Fluor, an engineering and construction company, was awarded a $1 billion project to build a coal gasification plant in South Africa. Fluor signed an agreement with a South African client that prohibited them both from announcing the agreement until Ma

> 1. To finance her education at DeVry Institute of Technology, Lydia borrowed $20,000 from a private lender. After graduation, she could not find a job in her field, so she went to work as a clerk at an annual salary of $12,500. Lydia and her daughter liv

> 1. Asher and Stephen formed a corporation named “Ampersand” to produce plays. Both men were employed by the corporation. Stephen decided to write Philly’s Beat, focusing on the history of rock and roll in Philadelphia. As the play went into production, h

> 1. Michael incorporated Erin Homes, Inc., to manufacture mobile homes. He issued himself a stock certificate for 100 shares for which he made no payment. He and his wife served as officers and directors of the organization, but, during the eight years of

> 1. After reviewing Color-Dyne’s audited financial statements, the plaintiffs provided materials to the company on credit. These financial statements showed that Color-Dyne owned $2 million in inventory. The audit failed to reveal, however, that various b

> 1. The Massachusetts Bay Transit Authority (MBTA) awarded the Perini Corp. a large contract to rehabilitate a section of railroad tracks. The work involved undercutting the existing track, removing the ballast and foundation, rebuilding the track, and di

> 1. Give an example of three types of contracts that should definitely be in writing, and one that probably does not need to be. 2. List three provisions in a contract that would be material, and three that would not be. 3. Blair Co.’s top officers aske

> 1. Intercontinental Metals Corp. (IMC) contracted with the accounting firm of Cherry, Bekaert & Holland to perform an audit. Cherry issued its opinion about IMC, giving all copies of its report directly to the company. IMC later permitted Dun & Bradstree

> 1. Richard Griffin and three other men owned a grain company called Bearhouse, Inc., which needed to borrow money. First National Bank was willing to loan $490,000, but insisted that the four men sign personal guaranties on the loan, committing themselve

> 1. An actor, exhausted after his 10-hour workweek, agrees to buy a briefcase full of cocaine from Lewis for $12,000. John and the actor have a ______________ contract. A. valid B. unenforceable C. voidable D. void 2. Carol says, “Pam, you’re my best fr

> 1. On television and in magazines, Maurine and Mamie Mason saw numerous advertisements for Chrysler Fifth Avenue automobiles. The ads described the car as “luxurious,” “quality-engineered,” and “reliable.” When they went to inspect the car, the salesman

> 1. Interactive Data Corp. hired Daniel Foley as an assistant product manager at a starting salary of $18,500. Over the next six years Interactive steadily promoted Foley until he became Los Angeles branch manager at a salary of $56,116. Interactive’s off

> What are the penalties if Artist breaches the movie contract? Are these reasonable? Too heavy? Too light?

> What are the advantages and disadvantages of hiring a lawyer to draft or review a contract?

> 1. Chitika, Inc. provided online tracking tools on websites. When consumers clicked the “opt-out” button, indicating that they did not want to be tracked, they were not – for ten days. After that, the software would resume tracking. Is there a legal prob

> 1. At approximately 7:50 pm bells at the train station rang and red lights flashed, signaling an express train’s approach. David Harris walked onto the tracks, ignoring a yellow line painted on the platform instructing people to stand back. Two men shout

> Walgreens operated a pharmacy in the Sara Creek mall. As part of this long-term lease, Sara Creek agreed not to lease mall space to another pharmacy. During an economic recession, Sara Creek’s largest tenant left and the landlord informed Walgreens that

> PepsiCo entered into a contract to sell its corporate jet to Klein for $4.6 million. Before the deal closed, the plane was sent to pick up PepsiCo’s chairman of the board, who was stranded at Dulles airport. The chairman then decided that the company sho

> 1. You are a vice-president in charge of personnel at a large manufacturing company. In-house detectives inform you that Gates, an employee, was seen stealing valuable computer equipment. Gates denies the theft, but you believe the detectives and fire hi

> 1. You Be the Judge: WRITING PROBLEM. An undercover drug informant learned from a mutual friend that Philip Friedman “knew where to get marijuana.” The informant asked Friedman three times to get him some marijuana, and Friedman agreed after the third re

> 1. The following agency is charged with the regulation of electronic communications: A. National Security Agency B. Federal Trade Commission C. Federal Communications Commission D. None of the above 2. Because Blaine Blogger reviews movies on his blog,

> Krug International, an Ohio corporation, had a contract with Iraqi Airways to build aeromedical equipment for training pilots. Krug then contracted for Power Engineering, an Iowa corporation, to build the specialized gearbox to be used in the training eq

> Evans built a house for Sandra Dyer, but the house had some problems. The garage ceiling was too low. Load-bearing beams in the “great room” cracked and appeared to be steadily weakening. The patio did not drain properly. Pipes froze. Evans wanted the mo

> 1. You plan to open a store in Chicago, specializing in rugs imported from Turkey. You will work with a native Turk who will purchase and ship the rugs to your store. You are wise enough to insist on a contract establishing the rights and obligations of

> Jacobs Builders entered into a contract with Kent to build him a home. The agreement stated that Jacobs would use only certain brand-name materials. Upon completion of the home, Kent discovered that Jacobs had installed high-quality, but not brand-name,

> Westinghouse sold uranium in long-term contracts at fixed prices, betting that market prices would be stable or fall (as they had been). But this was a bad bet: Uranium prices skyrocketed as a result of a cartel. Faced with large losses if it had to fulf

> 1. In the landmark 1965 case of Griswold v. Connecticut, the Supreme Court examined a Connecticut statute that made it a crime for any person to use contraception. The majority declared the law an unconstitutional violation of the right of privacy. Justi

> 1. In 1988, terrorists bombed Pan Am Flight 103 over Lockerbie, Scotland, killing all passengers on board. Congress sought to remedy security shortcomings by passing the Aviation Security Improvement Act of 1990, which, among other things, ordered the Fe

> 1. If your grandparents were to die leaving a large estate and all of their children were also dead, would you prefer a per stirpes or per capita distribution? 2. You Be the Judge: WRITING PROBLEM Linda and Eddie had two children before they were divorce