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Business Law
Q:
Best Products, Inc., files a suit against City Trucking Service for breach of contract, based on what Best claims was City's offer. For a court to determine if a contract has been breached, under the common law, the offer must include terms that are
a. exactly precise.
b. reasonably definite.
c. unequivocally approximate.
d. vague or uncertain.
Q:
All ads'both online and offlinemust be truthful.
Q:
Bait-and-switch advertising occurs when an ad appears to be based on factual evidence but in fact is not reasonably supported by evidence.
Q:
A private citizen can enforce a federal environmental law if he or she has standing.
Q:
Consumer Sales, Inc. (CSI), sends its catalogue to Dean and includes a "personalized" letter inviting him to buy any item in the catalogue at the advertised price. This is
a. an offer because of the "personalized" letter.
b. an offer because there is no room for price negotiation.
c. an offer only if Dean previously bought items from CSI.
d. not an offer.
Q:
Vague generalities and obvious exaggerations constitute deceptive advertising.
Q:
A toxic tort is an action against a polluter that results in heavy, or "toxic," damages.
Q:
John says to Kris, "I would like to sell you my sports memorabilia collection." This is not an offer because it
a. does not describe the subject matter specifically.
b. does not include a price term.
c. only expresses an opinion.
d. only invites Kris to negotiate.
Q:
Beth goes to Dr. Carl for surgery. Carl says that Beth should be fully healed within a week. Beth is not healed within a week. With respect to breach of contract, Carl is
a. liable.
b. not liable, because surgery is not a proper subject for a contract.
c. not liable, because the statement was an opinion.
d. not liable, but Beth is excused from paying Carl.
Q:
Advertising will not be deemed deceptive so long as it appears to be based on factual evidence, even if it is not.
Q:
A polluter is liable for an injury due to an ultrahazardous activity only if the polluter failed to exercise reasonable care.
Q:
Mick sues Keith for allegedly breaching a contract to paint Mick's house. Mick's complaint says that the contract was entered into after a long conversation one night at a bar during which Keith kept asking for one of Mick's old Chuck Berry records. According to the complaint, Mick made the following proposal to Keith: "You can have the Chuck Berry record if you paint my house by Monday morning." The complaint further alleges that Keith responded to the proposal by saying, "Yeah, right. Whatever. Now let's get the record." Mick gave him the record, but Keith never painted Mick's house. In his answer to Mick's complaint, Keith claims there was no contract because he thought the conversation was a joke and he had no intention to enter into a contract to paint Mick's house. Based on the reasoning in Case 11.1, Lucy v. Zehmer, when determining whether Keith intended to enter into the agreement Mick proposed at the bar, the court will probably give the greatest weight to
a. Keith's testimony regarding his subjective intent.
b. the testimony of others regarding Keith's subjective intent.
c. objective evidence of Keith's words and conduct and the circumstances of the conversation between Mick and Keith at the bar on the night in question.
d. the market value of the Chuck Berry record.
Q:
The common law doctrine of nuisance prevents individuals from filing "nuisance" suits against polluters.
Q:
An injured party's common-law suit against a polluter may be dismissed for lack of standing.
Q:
Jill tells Ken, who has no knowledge of literary comedy, that she will tutor him in the subject for $50. As an offer, this is
a. effective.
b. not effective, because comedy is not a serious subject.
c. not effective, because Jill's tutoring will be subjective.
d. not effective, because Ken has no knowledge of the subject.
Q:
Common law judicial decisions that serve to protect the interests of consumers are not classified as consumer law.
Q:
May tries to start her new car with no success. She yells that she will sell the car to anyone for $10. Nick, a passerby who owns Nick's Pre-owned Autos, hands May $10. This is
a. a valid acceptance because May is seriously frustrated.
b. a valid acceptance because Nick is a car dealer.
c. not a valid acceptance because May does not seriously intend to sell.
d. not a valid acceptance because Nick is a car dealer.
Q:
A collection agency cannot contact a debtor at the debtor's place of employment if the employer objects.
Q:
Bubbly Bottling Company is engaged in the soft-drink bottling and distribution industry in the states of New York and New Jersey. The firm currently has about 40 percent of the market for these products and related services. Carbonate Distribution Corporation competes with Bubbly in the same states. Carbonate has about 35 percent of the market. If Bubbly were to acquire the stock and assets of Carbonate, would Bubbly be in violation of any of the antitrust laws? If so, which one? Discuss fully.
Q:
Alan, a representative of Beta Services, Inc., makes an offer to Carol, the owner of Delta Products, Inc. The offer is effective even if
a. Alan does not communicate it to Carol.
b. Alan secretly does not intend to be bound by the offer.
c. Carol is not capable of accepting the offer.
d. the terms of the offer are not reasonably definite.
Q:
It is possible for an offeree to accept an offer silently.
Q:
Java Bean Company imports coffee beans and sells them under two-year contracts to Mellow Roast, Inc., and other coffeemakers. The contracts require that during the two-year term a coffeemaker not buy beans from Java Bean's competitors. The contracts do not limit the coffeemaker' purchase of tea or other beverage ingredients from other suppliers, howÂever. In the second year of the contract, Mellow Roast protests that this arrangement violates antitrust law. Is Mellow Roast correct? If not, why not? If so, under which antitrust statute, or statutes, could these conÂtracts be held illegal?
Q:
In a bilateral contract, communication of acceptance is necessary.
Q:
Big U.S. Oil Company joins with a foreign cartel to control the price of oil. If the cartel has a substantial effect on U.S. commerce
a. both Big U.S. Oil and the foreign cartel can be sued for violation of U.S. antitrust laws.
b. neither Big U.S. Oil nor the foreign cartel can be sued for violation of U.S. antitrust laws.
c. only Big U.S. Oil can be sued for violation of U.S. antitrust laws.
d. only the foreign cartel can be sued for violation of U.S. antitrust laws
Q:
The Fair Debt Collection Practices Act applies to anyone who tries to collect a debt.
Q:
If the subject matter of an offer is destroyed, the offer will continue to exist for a reasonable time to permit the seller to acquire replacement goods.
Q:
Mango Corporation believes that Melon Corporation engages in anticomÂpetiÂtive behavior in an attempt to drive Mango and its other competitors out of the market. Antitrust laws can be enforced against Melon by
a. Mango and its competitors only.
b. Mango, its competitors, and the Federal Trade Commission only.
c. Mango, its competitors, the Federal Trade Commission, and the U.S. Department of Justice.
d. the Federal Trade Commission and U.S. Department of Justice only.
Q:
Global Services Corporation engages in trade practices that may violate antitrust law. The Federal Trade Commission has the power to act against unfair trade practices under
a. the Clayton Act.
b. the Federal Trade Commission Act.
c. the Sherman Act.
d. no law.
Q:
An offer that a statute makes illegal terminates only after a reasonable time.
Q:
A consumer who believes that he or she has been or may be victimized by identity theft may place an alert on his or her credit file.
Q:
Luminescent Silicon Corporation, which controls 40 percent of the comÂputer-chip marÂket in the United States, merges with Micro Processors, Inc., which controls 15 perÂcent of the same market. This merger is a violation
a. only if the result more clearly concentrates the market.
b. only if the result makes it more difficult for potential competitors to enter the market.
c. if the result more clearly concentrates the market and makes it more difficult for potential competitors to enter the market.
d. under no circumstances.
Q:
A credit-reporting agency may issue a credit report to anyone who asks.
Q:
If an acceptance materially changes an offer, the acceptance may be held to implicitly reject the offer.
Q:
If no time for acceptance is specified in an offer, the offer terminates at the end of a reasonable time.
Q:
City Manufacturing Corporation conditions shipments of its products to Exurb Stores, Inc., on Exurb's agreement not to buy products from Regional Works Company, City's competitor. This is
a. an exclusive-dealing contract.
b. a tying arrangement.
c. price discrimination.
d. a unilateral refusal to deal.
Q:
An individual is not liable for any amount of unauthorized charges on his or her credit card.
Q:
An offeror can revoke an option contract at any time.
Q:
To drive its competitors out of a certain geographic segment of its market, Fryin Potatoes, Inc., sets the prices of its products below cost for the buyers in that area. This is
a. a refusal to deal.
b. business acumen.
c. predatory bidding.
d. price discrimination.
Q:
On request, a consumer may obtain the source of any information being given out by a credit agency.
Q:
A consumer may not be denied credit on the basis of a credit report.
Q:
An option contract takes away the offeror's power to revoke an offer for the period of time specified in the option.
Q:
Precious Metals Corporation, a raw materials vendor, sells its commodities in certain quanÂtiÂties to Quarry Refining Company for a certain price but charges Rich Assets, Inc., a Quarry comÂpetiÂtor, a higher price. This is most likely a violation of
a. the Clayton Act.
b. the Federal Trade Commission Act.
c. the Sherman Act.
d. no antitrust law.
Q:
"Regulation Z" is a generic term for any consumer protection law.
Q:
HVAC Parts Company charges different buyers different prices for identiÂcal goods. HVAC's prices are subject to evaluation under
a. the Clayton Act.
b. the Federal Trade Commission Act.
c. the Sherman Act.
d. no antitrust law.
Q:
Revocation normally must be communicated to the offeree before acceptance or else it will be ineffective.
Q:
A contract lacking a quantity term may not be enforceable.
Q:
A unilateral refusal to deal can violate antitrust laws if the refusal
a. is likely to have an anticompetitive effect on a particular market.
b. results in lower prices for consumers.
c. provides no economic benefits for consumers.
d. is likely to increase competition.
Q:
In a transaction subject to the Truth-in-Lending Act, all of the terms of a credit instrument must be clearly and conspicuously disclosed.
Q:
An antitrust action is brought against Tri-State Transport Company, alÂleging the offense of attempted monopolization. To be guilty of this ofÂfense, Tri-State's attempt must have
a. a dangerous probability of success.
b. a deadly guaranty of success.
c. a distant possibility of success.
d. a distinct improbability of success.
Q:
A loan between two consumers is subject to the Truth-in-Lending Act.
Q:
An offer must contain reasonably definite terms to be enforced.
Q:
Fresh Vegetables, Inc., a wholesaler, refuses to sell its produce to Good Mart Stores, Inc., a reÂtailer. This is
a. "an unfair or deceptive act or practice."
b. a per se violation.
c. not a violation.
d. subject to analysis under the rule of reason.
Q:
Drugs must be shown to be effective and safe before they can be marketed.
Q:
An auction with reserve is one in which the seller cannot withdraw the goods at any time before the auctioneer closes the sale.
Q:
Rally Speedboat Corporation refuses to sell its products to Super Weekends, Inc., a recreational water products dealership. This is
a. an exclusive-dealing contract.
b. a horizontal market division.
c. attempted monopolization.
d. a unilateral refusal to deal.
Q:
A person who receives unsolicited merchandise and keeps it without notifying the sender commits mail fraud.
Q:
An advertisement is generally considered an invitation to negotiate.
Q:
To acquire monopoly power in its market, Perfect Plastics, Inc., sets its prices lower than its competitors. Under the Sherman Act, this is
a. a per se violation.
b. a violation if its competitors make similar deals.
c. a violation if it thereby acquires monopoly power.
d. not a violation.
Q:
It is generally illegal to send an ad via fax without the recipient's permission.
Q:
A price list is considered an offer.
Q:
Master Manufacturing Corporation has exclusive control over the marÂket for its product. Under the Sherman Act, this is
a. a per se violation.
b. a violation if it acquired this power through "business acumen."
c. a violation if it acquired this power through "anticompetitive means."
d. not a violation.
Q:
Counteradvertising is advertising that counters a competitor's claims.
Q:
An agreement to agree may be enforceable.
Q:
A suit is filed against Dormroom Furniture Unlimited, Inc., alleging that the firm has committed the offense of monopolization. To determine whether Dormroom has committed this offense, the court will consider the extent of Dormroom's market power and
a. how Dormroom acquired its power.
b. how Dormroom makes its products.
c. Dormroom's customers.
d. Dormroom's suppliers.
Q:
Federal law prohibits vague generalities and obvious exaggerations in advertising.
Q:
When a contractor submits a bid for a construction project, the submission of the bid is an offer.
Q:
A suit is filed against Adroit Drilling Tools Corporation, alleging that the firm commitÂted the offense of monopolization. To determine whether Adroit has monopoly power requires looking at
a. the definition of monopoly in the Sherman Act.
b. Adroit's size alone.
c. Adroit's production methods and marketing techniques.
d. the relevant market.
Q:
Any agreement made "after a few drinks" can be avoided for lack of seriousness of intent.
Q:
The test for whether an ad is deceptive is whether a reasonable consumer would be misled.
Q:
Imperio Caffeine Corporation makes and sells coffee under a variety of brand names. Imperio wants to merge with Java Company, its main competitor. In weighing a challenge to the deal, a court looks at the relevant product market. This most likely includes coffee and
a. no other products.
b. products that are not identical but are related, such as spin-offs.
c. products that are sometimes substituted for coffee.
d. products with identical attributes only.
Q:
An offeror's subjective beliefs or assumptions determine his or her intent to contract.
Q:
An advertisement that contains an endorsement by a celebrity may be deemed deceptive if the celebrity does not actually use the product.
Q:
Jack owns land located outside Metro City. Jack sells the land to Quality Disposal, Inc., which establishes a hazardous waste disposal facility at the site. Quality Disposal accepts only waste transported by Regional Trucking Company exclusively from Consolidated Industries, Inc. Several years later, Quality Disposal closes its facility and sells the land to Price Rite Corporation, which builds a Price Rite Discount Store on the site. Meanwhile, some of Metro's citizens complain to the Environmental Protection Agency (EPA) that Metro's municipal water supply is polluted. The EPA investigates and discovers that the sources of the pollution are leaks of hazardous waste from what is now the Price Rite property. The EPA cleans up the site. Who can be held liable for the cost of cleaning up the site? What standards must Metro meet regarding the water?
Q:
Listen Up! Corporation books and promotes concerts and other entertainment events, for which Listen Up! also sells tickets. In weighing a challenge to Listen Up!'s "monopolistic" ticket prices, a court looks at the relevant geographic market. This encompasses
a. only areas in which Listen Up! does not have monopoly power.
b. only areas in which Listen Up! has monopoly power.
c. the area in which Listen Up! and its competitors sell, and their customers buy, the tickets.
d. the entire United States in all cases.
Q:
Mouth-Waterin" Treats Company wants to sell its candy in a normal-sized package labeled "Gigantic Size." NuFabrics, Inc., wants to advertise its sweaters as having "That Wool Feel," but does not want to specify on labels that the sweaters are 100 percent polyester. Can these firms market their products as they would like? If not, why not?
Q:
Under the Resource Conservation and Recovery Act, before hazardous waste generated by Xtreme Industries, Inc., can be transported, the waste must be properly labeled and packaged by
a. the federal Environmental Protection Agency.
b. the local Resource Conservation and Recovery Committee.
c. the state Environmental Regulatory Commission.
d. Xtreme Industries, Inc.
Q:
A promise to do some specified thing in the future is an offer.
Q:
Marvin is a very good businessman. He starts Marvin's Bike Company in the small town of Wheatland, South Dakota. There is one other bike store in Wheatland. Through good business management, Marvin's Bike Company obtains a great deal of market power in Wheatland. This acquisition of monopoly power is
a. a per se violation of Section 1 of the Sherman Act.
b. an illegal restraint on trade.
c. not an antitrust violation.
d. a per se violation of Section 2 of the Sherman Act.
Q:
ChemoCorp, Inc., makes and sells pesticides. If a substance is identified as harmful and the harm is imminent, the Environmental Protection Agency, among other things, can
a. conduct an inspection of ChemoCorp's plant.
b. declare the substance to be unregulated and allow its production.
c. ignore the risk if the benefit outweighs the harm.
d. order the substance to be sold in an adulterated form.
Q:
Dora, an architect, markets her services through Eagle Designs, an architectural firm. For all intents and purposes, Dora is the firm. She offers to design a store for Fine Stores Corporation for $10,000. Before Fine accepts, Dora dies. Fine's officers do not learn of the death until after they accept. What is the status of the offer?