Q&A Hero

Q: 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?

Q: 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. How was Polonius' credit card limit reached by registering at Cloud Hotel? A. Cloud charged the card the full amount of his stay. B. Cloud charged the card $1200 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.

Q: 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.

Q: 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.

Q: 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 withdraws from the account for fifteen months and 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?

Q: 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.

Q: 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.

Q: 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? A. Reasonable care. B. Liable for gross negligence. C. Liable for slight negligence. D. Jim has no liability.

Q: Elaine asked Meredith if she could borrow Meredith's dress for an awards ceremony. Meredith gave Elaine the dress and asked for nothing in return for this favor. 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.

Q: 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. What is the Cato's legal position? A. Cato owes the duty to use reasonable care. B. Cato is liable for gross negligence. C. Cato is liable for slight negligence. D. Cato has no liability.

Q: Viola checked her coat at the Landmark Theatre cloakroom while attending a play. When she returned for her coat it 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.

Q: 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.

Q: 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 but required her to use her key. Is Desert Inn liable for her loss? A. Yes, since innkeepers are insurers of their guest's 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 guest's property. D. No, since Paulina must inquire about Desert Inn's security system.

Q: 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 Zebra has relinquished title in the thirty years. D. Zerba since it had not sent the art voluntarily.

Q: Jenna hangs her fur coat on a rack in the unattended waiting room of Physicians Associated Office. When she prepares to leave, after seeing Dr. Wong, the 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 the coat rack was rickety and is used by no one.

Q: 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.

Q: Tammy leaves her car under Emilia's carport while flying to visit her grandmother. 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. What is Emilia's legal position? A. Emilia is liable for ordinary negligence. B. Emilia is liable for gross negligence. C. Emilia is liable for slight negligence. D. Emilia has no liability.

Q: Patsy finds a watch on the floor of a cafeteria. The watch is likely to be: A. lost. B. abandoned. C. stolen. D. misplaced.

Q: 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. What must Jason prove to obtain title of the car? 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 the car. D. Alex had promised the car to Jason as a gift.

Q: If an abandoned shipwreck is found outside the boundaries of a state, what law applies? A. The Abandoned Shipwreck Act B. The law of finds C. The law of salvage D. Either the law of finds or the law of salvage

Q: The reward given to persons who voluntarily assist a sinking ship is known as: A. gift in causa mortis. B. chose in action. C. salvage. D. severalty.

Q: Sue receives a $5,000 engagement ring from Tau but unfortunately Tau dies before the marriage can occur. Tau's parents, as his heir, want the engagement ring but Sue wants to keep it. Who is legally entitled to the ring in most states? A. Tau's parent, since the ring was a conditional gift. B. Sue, since Tau the donor is dead. C. Tau's parents, since Tau did not state that Sue was to have the ring if he were to die. D. Sue, since the engagement was not broken by mutual agreement or by Sue.

Q: 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 to case basis.

Q: Lending one's car to a friend is an example of a mutual benefit bailment.

Q: A consignment contract is a type of mutual benefit bailment in which the consignor entrusts goods to the consignee for the purpose of selling them.

Q: A transient is a guest whose length of stay is fixed.

Q: Which of the following is tangible personal property? A. Promissory note B. Bank notes C. Stock Certificates D. Accounts receivables

Q: Mashevida and Mei-Ling own a house as tenants in common. When Mei-Ling dies her share of the house passes to: A. Mashevida. B. whomever the probate court designates. C. her heirs. D. the state in which the house is located.

Q: Phil finds the keys of a car on a table in a restaurant. The keys are likely to be: A. lost. B. abandoned. C. stolen. D. misplaced.

Q: Those in possession of stolen property can convey good title to others by giving them that property as a gift.

Q: A bailment is the transfer of possession and control of personal property to another with the intent that the same property will be returned later.

Q: The person who transfers the property is the bailee.

Q: In a bailment, neither the bailor nor the bailee intends that title to the property should pass.

Q: Bailment occurs when someone parks a car in an unattended parking area.

Q: Gratuitous bailments occur when property is transferred to another person without either party giving or asking for payment of any kind.

Q: Any ordinary and expected expense incurred in the use of another's property must be borne by the bailee.

Q: If a child's income from interest and dividends is less than $1,500, it cannot be taxed.

Q: Manuel is seriously ill and gives Juanita his diamond ring to remember him by. When Manuel recovers he cannot obtain the return of the ring from Juanita.

Q: The gift of an engagement ring is a conditional gift given in contemplation of marriage.

Q: When personal property is owned solely by one person, it is said to be owned in severalty.

Q: Cindy and Isa own property as joint tenants. If Cindy dies, Isa acquires ownership of Cindy's interest in the property.

Q: Gaston finds a book in the middle of the street. Gaston must leave the book at the nearest gas station so the true owner may return and recover the book. FALSE The finder of lost property has a legal responsibility, usually fixed by statute, to make an effort to learn the identity of the owner and return the property to that person. Advertising the property in a general circulation newspaper is usually evidence of the finder's honest effort to locate the owner, although today some sort of Internet posting might be just as effective.

Q: Escheat is a type of fraud.

Q: A gift inter vivos can never be taken back by the donor.

Q: 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? How?

Q: 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?

Q: 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?

Q: Tangible personal property is property that has substance and can be touched.

Q: A chattel is an intangible personal property, such as a stock certificate.

Q: New Co. plans to sell stock to investors with a Web site offer form. Discuss the federal securities regulations, if any, that New must comply with.

Q: 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?

Q: 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.

Q: 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.

Q: Big Co. would like 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.

Q: 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.

Q: 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.

Q: The targeted corporation makes a deal with the suitor to protect management of the target in a: A. greenmail. B. lockup agreement. C. public relations campaign. D. targeted shareholder agreement.

Q: 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 B. lockup agreement C. public relations campaign D. targeted shareholder agreement

Q: In a ____, a target corporation uses news releases, advertisements, and press conferences to convince shareholders to retain present management. A. greenmail B. lockup agreement C. public relations campaign D. targeted shareholder agreement

Q: 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.

Q: Which legislation specifically addresses promotional allowances? A. Clayton Act B. Robinson-Patman Act C. Federal Trade Commission Act D. Sherman Act

Q: One corporation makes a tender offer to the shareholders of another corporation in a(n): A. merger. B. consolidation. C. stock acquisition. D. asset acquisition.

Q: If Titanic Co. makes a tender offer to acquire more than _____ of a target, Titanic Co. must file a statement with the SEC. A. 5% B. 10% C. 15% D. 20%

Q: Under some state statutes, a merger involving an LLC requires a(n) _____ rather than the two-thirds majority required of corporations. A. 51% majority vote B. one-third majority vote C. 90% majority vote D. unanimous approval

Q: In a ____, 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

Q: Tom is a potential investor in Delta Co. Tom should receive a: A. contract summary. B. prospectus. C. closing settlement statement. D. registration statement.

Q: Contracts, combinations, and conspiracies in restraint of trade are prohibited by the: A. Robinson-Patman Act. B. Federal Trade Commission Act. C. Sherman Antitrust Act. D. Clayton Act.

Q: An exclusive control of a market by a business enterprise is a: A. monopoly. B. common enterprise. C. trust. D. confederation.

Q: 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

Q: 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.

Q: Linicome Industries is a manufacturer of home video game machines and home video games. Johnson Department Store wants to market the home video games, but Linicome refuses to sell the games unless Johnson also agrees to purchase the home video machines. A court will most likely find such as restriction to be: A. an interlocking directorate. B. a lawful tying agreement. C. an unlawful tying agreement. D. a per se violation.

Q: The dissolution of an LLC need not be followed up by a winding up of the LLC.

Q: Some state statutes specify that the death of a member does not trigger dissolution of an LLC.

Q: The Commerce Clause of the U.S. Constitution was first expanded by the U.S. Supreme Court in the context of: A. industrial expansion. B. mass marketing. C. land grants. D. frontier protection.

Q: Which of the following stated 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

Q: The concept of justice includes a fair and balanced interpretation of the law. This is: A. regulatory justice. B. distributive justice. C. individual justice. D. balanced justice.

Q: Mill enterprises needs to raise a large amount of money. Therefore 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.

Q: A lockup agreement requires that a friendly suitor is given an option to buy that valuable piece of property should the hostile bidder gain control of the target corporation.

Q: Hart-Scott-Rodino is designed to police any expansion attempts that might hurt competition in the marketplace.

Q: It is illegal for agencies responsible for reviewing merger plans proposed by corporations to use their power to negotiate concessions within merger agreements for social purposes.