Business Law 201, Fall 2003, Professor Steven L



Business Law 201, Fall 2003, Professor Steven L. Isler

True/False

Indicate whether the sentence or statement is true or false. "A" is true while "B" is false. There are no attendance questions is this section

____ 1. In Case 18.1, Hadley v. Baxendale, the court held that the plaintiffs, the Hadleys, failed to communicate adequately to the defendant, Baxendale, that the crankshaft they were sending to the foundry for repair was the only one they had, so that they were not entitled to the profits lost during the time the mill was shut down.

____ 2. The income of a sole proprietor is taxed as personal income and flows from a form called Schedule C to a form called a 1040.

____ 3. The simplest form of business is the sole proprietorship. One of the benefits of a sole proprietorship is that it is easy to create.

____ 4. For federal income tax purposes, a partnership is a tax-paying entity.

____ 5. Income from partnerships is entered on Schedule E and flows to Form 1040

____ 6. An individual can become an owner of a corporation by purchasing one share of the corporation's stock.

____ 7. Real property includes land and everything permanently attached to it.

____ 8. An easement is a right to go onto land in the possession of another and take away some part of the land or some product of the land.

____ 9. A warranty deed provides the most extensive protection against defects of title.

____ 10. In North Carolina, some people dip snuff, which is tobacco and tucked inside your lower lip.

____ 11. In a fee simple absolute, the owner has the greatest aggregation of rights, privileges, and power possible.

____ 12. A conveyance of property for the life of a specified individual creates a fee simple absolute.

____ 13. A quitclaim deed warrants more than any other deed.

____ 14. Any taking of private property for a public use requires the payment of just compensation.

____ 15. Bankruptcy proceedings are held in federal bankruptcy courts.

____ 16. Any individual can be a debtor under Chapter 7.

____ 17. All student loans are dischargeable in a Chapter 7 bankruptcy.

____ 18. In the sole proprietorship form of business, the owner of the business receives all of the profits of the business.

____ 19. A leasehold estate is created when a property owner agrees to convey the right to possess and use the property to another for a certain period of time.

____ 20. A grantor is a person to whom property is transferred.

Multiple Choice

Identify the letter of the choice that best completes the statement or answers the question. When I say best, I mean best. There are attendance questions and examples that are directly from your text. Visit . Good luck, have a great holiday season and a wonderful new year.

____ 21. This is an attendance question. Professor Isler was raised in Harlem. His father was quite an influence on his life. His father is a retired minister. Which of the following statements, if any, is also true

|a. |Before becoming a minister, Professor Isler's father was |c. |Before becoming a minister, Professor Isler's father was |

| |a boxer | |a brick mason |

|b. |Before becoming a minister, Professor Isler's father was |d. |None of the above |

| |a bus driver | | |

____ 22. This is an attendance question. Professor Isler was raised in Harlem. His father was quite an influence on his life. His father is a retired minister. Which of the following statements, if any, is also true

|a. |Professor Isler's father won 118 out of 127 professional |c. |Professor Isler's father was the chief brick mason in |

| |fights and he was a light-heavyweight | |Harlem |

|b. |Professor Isler's father drove the number 4 bus up |d. |None of the above |

| |Madison Avenue | | |

____ 23. This is an attendance question. The greatest basketball player in all the land is

|a. |Shaq |c. |Kobe Bryant |

|b. |Allen Iverson |d. |Professor Isler |

____ 24. Alan Iverson owns two mercedes, worth $100,000 and $50,000, respectively. Alan and Shaq enter into a contract for the sale of "Alan's mercedes" for $75,000. Alan believes, in good faith, that he is selling the $50,000 mercedes while Shaq believes, also in good faith, that he is buying the $100,000 mercedes. Due to their mistake:

|a. |Alan is entitled to receive $75,000 for the mercedes worth $50,000. |

|b. |Shaq is entitled to buy the $100,000 mercedes for $75,000. |

|c. |Shaq is entitled to select either mercedes for $75,000. |

|d. |there is no contract. |

____ 25. DMX sells a car to Old Dirty Bastard but fails to mention that the odometer, which reads 39,000 miles, was disconnected by DMX 20,000 miles ago. DMX is liable for

|a. |duress. |

|b. |fraudulent misrepresentation. |

|c. |puffery. |

|d. |undue influence. |

____ 26. Steven, who is Angelina's guardian (and full-time lover), convinces Angelina that buying a certain parcel of land from Steven's brother-in-law at a price that is greatly inflated is a good deal. If in fact it is not a good deal, Steven may be liable for

|a. |duress. |

|b. |fraud. |

|c. |puffery. |

|d. |undue influence. |

____ 27. Rita agrees to guarantee a debt of Sam's that Sam owes to the "Round the way Finance Company. This promise is not for the benefit of Rita. To be enforceable, the promise must be in writing if the debt is for

|a. |$50. |

|b. |$500. |

|c. |$5,000. |

|d. |any of the above. |

____ 28. Best Products Corporation and International Exports, Inc., enter into a contract for a sale of goods. To be enforceable, the contract must be in writing if the goods are valued at more than

|a. |$50. |

|b. |$500. |

|c. |$5,000. |

|d. |any of the above. |

____ 29. Ed and Nora sign a contract that states, "No evidence of prior oral or written negotiations may be used to change the terms of this writing." This is

|a. |the parol evidence rule. |

|b. |the Statute of Frauds. |

|c. |both a and b. |

|d. |none of the above. |

____ 30. Able loaned Baker $50,000. Baker has not paid it back. Baker asked Able for an additional $50,000. Able said "Heck No! In fact, if you do not pay me the $50,000 you owe me by Monday I'm going to sue you!" Baker said, "Give me two months, that will be February. I always have money in February." Able says "No Way." Baker then said, "If you force me to pay you now I will have no choice but to file for bankruptcy." Cain heard the entire conversation and is worried because Baker owes him (Cain) $50,000 also. Cain said to Able, "If Baker does not pay you the $50,000 in February, then I promise I will pay you what Baker owes you on March 1st."

What is true about the promise that Cain made to Able?

|a. |Cain is acting as a guarantor so his promise must be in |c. |To be enforceable, the promise must be in writing so it |

| |writing | |cannot be enforced by Able |

|b. |This promise that Cain made is for his own benefit and |d. |The promise must be in writing since it involves an amout|

| |need not be in writing. | |that exceeds $500 |

____ 31. A & B enter into a contract by which B promises to deliver sand to A. B subsequently delegates his duty to deliver sand to C.

In this example C is the:

|a. |the obligee |

|b. |the delegator. |

|c. |the delegatee. |

|d. |both a and b. |

____ 32. Mike makes a contract with Rich with the intent to benefit Mary. Mike does not owe Mary anything. This is

|a. |an assignment. |

|b. |a delegation. |

|c. |a third party beneficiary contract. |

|d. |none of the above. |

____ 33. A B

C D

A and B have a contract whereby B will paint A's house and A will pay B $5,000.

B assigns his right to the money to C, then B assigns this right to the money to D. C decides to go to Maui. D decides to go to A's house for the $5,000. A, in fact, pays D. The next day C goes to A's house and requests $5,000.

If this example took place in a state that follows the American rule with respect to giving notice of an assignments, would A have to pay C?

|a. |No, because C did not give notice fast enough |c. |No, because A only has to pay the first person to show up|

| | | |and request the money |

|b. |Yes, because C was first in time and he is not required |d. |Yes, because C was the first person to give notice |

| |to give notice first | | |

____ 34.

A B

C D

A and B have a contract whereby B will paint A's house and A will pay B $5,000.

B assigns his right to the money to C, then B assigns this right to the money to D. C decides to go to Maui. D decides to go to A's house for the $5,000. A, in fact, pays D. The next day C goes to A's house and requests $5,000.

If the above example who is an assignee?

|a. |A |d. |D |

|b. |B |e. |C & D |

|c. |C |

____ 35. This is an attendance question. Delegation is a musical group that had one hit. It is one of Professor Isler's favorite songs. What is it called?

|a. |It Hurts |c. |Oh Honey |

|b. |Don't Break Your Baby's Heary |d. |I'm Wearing A "Do Rag" For You Baby |

____ 36. On Tuesday Robert promised to take Lisa for a ride in his space shuttle. Robert was to take Lisa to the Moon in exchange for Lisa paying $5,000. Lisa is excited because Robert has the only space shuttle in existence. On Wednesday, one day before the ride was to begin, the space shuttle blew up. If Lisa wants to enforce the contract, what would be Robert's best defense?

|a. |Frustration of Purpose |d. |Temporary Frustration of Purpose |

|b. |Statute of Limitations |e. |Impossibility |

|c. |Lisa was not a Hottie so she didn't deserve to ride! |

____ 37. Hadley v. Baxendale, the court held that the plaintiffs, the Hadleys, failed to communicate adequately to the defendant, Baxendale, that the crankshaft they were sending to the foundry for repair was the only one they had, so that they were not entitled to the profits lost during the time the mill was shut down. In this case the lost profits would have been considered:

|a. |Consequential Damages |c. |Nominal Damages |

|b. |Compensatory Damages |d. |Punitive Damages |

____ 38. This is an extra credit question. It will not hurt your score if you get it wrong. I am asking the question to help you determine if you could use a writing course or two because, in my opinion a good writer can really distinguish him or herself from other students. Fill in the blank.

________________ two ways to get there from here-- my way and the wrong way.

|a. |There's |c. |There are |

|b. |They're |d. |None of the above |

____ 39. This is an extra credit question. It will not hurt your score if you get it wrong. I am asking the question to help you determine if you could use a writing course or two because, in my opinion a good writer can really distinguish him or herself from other students. Fill in the blank.

After working on my Business Law 201 homework all night, I finally ______ down to sleep at around midnight.

|a. |Laid |c. |Lay |

|b. |Lied |d. |None of the above |

____ 40. This is an extra credit question. It will not hurt your score if you get it wrong. I am asking the question to help you determine if you could use a writing course or two because, in my opinion a good writer can really distinguish him or herself from other students. Fill in the blank.

I cannot get my VCR to record a program; _____ instructions are too complicated

|a. |its |b. |it's |

____ 41. Extra Credit. This is just for fun. I am going to magically give you one exam question for free.

On a piece of paper do the following:

1. write down a number

2. write down the same number again

3. Now write down the number 8

4. Add all three numbers together

5. Divide the total by two

6. Now subtract the first number that you ever wrote down on your paper from this total. I have no idea of the first number you wrote down but your answer is "C" Right? Cool, accept this as an early Christmas present and move on. I sure hope you know what a huck-a-buck is.

|a. |2 |c. |4 |

|b. |18 |d. |6 |

____ 42. Attendance Question What is a "huck-a-buck"?

|a. |Iced tea with no sugar |d. |A dance |

|b. |Lemon soda |e. |A hat |

|c. |Frozen "Kool aide" in a dixie cup |

____ 43. To obtain a Taxpayer Identification Number for a partnership, Sole Proprietorship or Corporation you should complete:

|a. |Form 1040 |c. |Form 1065 |

|b. |Form SS-4 |d. |Form 1120 |

____ 44. Tom owns ABC Enterprises, a sole proprietorship. In a sole proprietorship, the liability of the owner is

|a. |unlimited. |

|b. |limited to the amount of his or her original investment. |

|c. |limited to the amount of his or her original investment plus any subsequent capital expenditures. |

|d. |limited by state statute and varies from state to state. |

____ 45. Bayside Restaurant is operated as a partnership. For tax purposes, Bayside

|a. |is required to file an information return but is not a tax-paying entity. |

|b. |is a tax-paying entity. |

|c. |pays 1/2 of the taxes if there are two partners. |

|d. |pays 1/4 of the taxes if there are three partners. |

____ 46. Solid Appliances, Inc., is a private, for-profit corporation that (1) was formed for the purpose of manufacturing and distributing a newly patented kitchen appliance, (2) is owned by five shareholders, (3) is subject to double taxation, and (4) has made no public offering of its shares. Solid Appliances is

|a. |an S corporation. |

|b. |a close corporation. |

|c. |a nonprofit corporation. |

|d. |a professional corporation. |

____ 47. Acme, Inc., wants to incorporate in the state of California. To do so Acme should:

|a. |File Articles of Incorporation with the Secretary of State |

|b. |File Articles of Incorporation with the Department of Corporations |

|c. |File Close Corporation Articles |

|d. |File in Deleware as a foreign corporation |

____ 48. Fred and Diane want to market a new type of computer game. They wish to form a corporation that avoids income taxes at the corporate level. This type of corporation is known as

|a. |a C corporation. |

|b. |a close corporation. |

|c. |a private corporation. |

|d. |an S corporation. |

____ 49. To qualify as a professional corporation, Smith & Jones, P.C.,

|a. |must be a corporation formed by professionals. |

|b. |must grant all shareholders voting rights. |

|c. |must have at least thirty-five shareholders. |

|d. |all of the above. |

____ 50. Midtown Development, Inc., owns a city block in Los Angeles. Besides the land, Midtown has relatively exclusive rights to

|a. |the air space above the land only. |

|b. |the soil and minerals underneath the land only. |

|c. |the air space above the land, and the soil and minerals underneath it. |

|d. |the air space above the land, and the soil and minerals underneath it which is called the "ad coleum doctrine." |

____ 51. Eve possesses a city block. Eve has the right to use the property, as she sees fit, subject to local zoning laws. She can lease the property, or dispose of it by selling or giving it away or letting it pass on her death to her heirs. This ownership interest is

|a. |a fee simple absolute. |

|b. |a leasehold estate. |

|c. |a life estate. |

|d. |none of the above. |

Fact Pattern 47-1

Roy owns 100% of the Double-R Ranch in Texas. His ownership rights include the right to sell or give away the property without restriction if he chooses.

____ 52. Refer to Fact Pattern 47-1. Roy's ownership interest is

|a. |a fee simple absolute. |

|b. |a leasehold estate. |

|c. |a life estate. |

|d. |referred to as a fee, fee simple, or a fee simple absolute |

____ 53. Refer to Fact Pattern 47-1. Roy deeds some of the Double-R land to Sue. The deed contains the following words: "To Sue, as long as Bill Clinton is alive." Roy has given Sue

|a. |a fee simple absolute. |

|b. |a leasehold estate. |

|c. |a life estate. |

|d. |a life estate per autre vie |

____ 54. Refer to Fact Pattern 47-1. Roy allows Tim to enter the Double-R land to extract coal and other minerals. Roy has given Tim

|a. |a fee simple absolute. |

|b. |a leasehold estate. |

|c. |a life estate. |

|d. |a Profit |

____ 55. Investment Properties Corporation conveys an office building to Bob with a deed that makes the greatest number of warranties and provides the most extensive protection against defects of title. This deed is

|a. |a grant deed. |

|b. |a quitclaim deed. |

|c. |a sheriff's deed. |

|d. |a warranty deed. |

____ 56. Manhattan Developers, Inc., pays Northeast Trust Company to release its claim to a strip of waterfront property. Northeast gives Manhattan a deed that conveys only whatever interest Northeast has in the strip. This deed is

|a. |a grant deed. |

|b. |a quitclaim deed. |

|c. |a sheriff's deed. |

|d. |a warranty deed. |

____ 57. Jay Z sells a warehouse to the Eastsiders and, in a separate deal, sells the same building to Westside Connection. Westside Connection knows about Eastsiders' purchase. Westside connection files its deed to the building first. Westside connection has superior rights to the property if the applicable state recording statute is:

|a. |a notice-race statute. |

|b. |a pure notice statute. |

|c. |a race statute. |

|d. |any of the above. |

|e. |I don't know, but Jessica Alba is fine! |

____ 58. Jessica Alba sued Ruben Studdard and won a court judgment of $5,000. Ruben has a house in San Mateo county and Jessica wants to force a sheriff's sale. What steps should Jessica take?

|a. |She should go to the Sheriff's office and request a |d. |Get a judgment from the court and then a Writ of |

| |Sheriff's sale | |Execution |

|b. |Get a judgment from the court, a Writ of Attachment and |e. |She should beat Ruben's big ass |

| |then a Writ of Execution | | |

|c. |Get a judgment from the court and then a Writ of |

| |Attachment |

____ 59. Jay Z sells a warehouse to the Eastsiders and, in a separate deal, sells the same building to Westside Connection. Westside Connection knows about Eastsiders' purchase. Westside connection files its deed to the building first. In this example, Jay Z is:

|a. |The Grantee |d. |The Purchaser |

|b. |The Grantor |e. |The lucky man that has Beyonce!!!!! |

|c. |The Grantor and Grantee |

____ 60. Sun City wants to acquire undeveloped land within the city limits to convert into a public park. Sun City brings a judicial proceeding to obtain title to the land. This is an exercise of

|a. |adverse possession. |

|b. |constructive eviction. |

|c. |the covenant of seisin. |

|d. |the power of eminent domain. |

____ 61. Steve and Gloria contract for the sale of an office building. A mutual mistake of fact will make it possible for either party to rescind the contract in all situations

|a. |under any circumstances. |

|b. |as long as the mistake of fact is material. |

|c. |as long as the mistake of fact is immaterial. |

|d. |none of the above. |

____ 62. Carol and Dan enter into an oral contract for Carol's sale to Dan of a computer monitor for $400. Before Dan takes possession of the monitor, this contract is

|a. |enforceable by Carol only. |

|b. |enforceable by Dan only. |

|c. |enforceable by either party. |

|d. |not enforceable. |

____ 63. Commercial Construction Corporation (CCC) has a right to drive its trucks across Midstate Company's property, which is adjacent to CCC's property. CCC's right is

|a. |a license. |

|b. |an easement. |

|c. |a profit. |

|d. |a tenancy at will. |

____ 64. In the critically acclaimed film "Willie From Georgia To Harlem," what character did Professor Isler play?

|a. |Willie |c. |Calvin |

|b. |Mule |d. |Walter |

____ 65. Who gave Willie the Rabbit's Foot

|a. |Calvin |c. |Mule |

|b. |A young man in Georgia |d. |Walter |

Business Law 201, Fall 2003, Professor Steven L. Isler

Answer Section

TRUE/FALSE

1. T

2. T

3. T

4. F

5. T

6. T

7. T

8. F

9. T

10. T

11. T

12. F

13. F

14. T

15. T

16. T

17. F

18. T

19. T

20. F

MULTIPLE CHOICE

21. A

22. A

23. C

24. D

25. B

26. D

27. D

28. B

29. A

30. B

31. C

32. C

33. B

34. E

35. C

36. E

37. A

38. C

39. C

40. A

41. C

42. C

43. B

44. A

45. A

46. B

47. A

48. D

49. A

50. D

51. A

52. D

53. D

54. D

55. D

56. B

57. C

58. B

59. B

60. D

61. B

62. C

63. B

64. C

65. B

................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download