Reference no: EM133299077

Questions

1. Stan made a deal with Waterlog Piping Corp. on July 15 to purchase 1,000 pounds of pipe for $1.50 a pound. The delivery was scheduled for 60 days. The pipe is not delivered by Waterlog Piping at the scheduled time. Stan accepted the delivery that came two days later. These pipes cost $1.75 per pound at the time of the rupture. Stan also lost two days of income as a result of the contract's breach, and during contract discussions with Waterlog's CEO, Stan warned that if the delivery of the contract wasn't on time, he would lose money for each day it was late. What would be the potential recovery for damages?

A) $250 plus damages for the lost profits.

B) $250, but no additional damages

C) $1,000, plus damages for the lost profits.

D) Nothing, except for specific performance.

2. The "Three Rodneys Inc.", a business with headquarters in Hollywood, California, was created by Mike, Roxie, and Lawrence. The company is a close corporation, and Mike, Roxie, and Lawrence each possess 200 shares of the company, with Lawrence owning the remaining 100 shares. The company is in the business of providing old cars to film studios for their productions. Every shareholder serves as a corporate officer and director. The company experiences immediate success. It generates large revenues even in its first year. However, the board decides against paying dividends. Roxie casts a pro-dividend vote because he thinks it is necessary by law, but the other directors and shareholders prevail. He then sues the other directors for breach of their fiduciary responsibility because he is also a shareholder. Will he be prosperous?

A) Yes, because dividends must be issued when the corporation posts profits.

B) Yes, because any director on the Board of Directors has the authority to compel the board to issue dividends.

C) No, because issuing dividends is a discretionary act of the Board.

D) No, because a minority director does not have the right to seek a dividend.

3. Oily, Inc. agrees to sell 500 roses to Sophie for $3 each rose. The delivery date is June 1. The cost of roses increases by 25% in the month before delivery. Oily refuses to provide the flowers on the grounds that the price increase makes it unprofitable to carry out the agreement. What is likely to happen if Sophie files a breach of contract lawsuit against Oily?

Due to the inability to fulfill the contract, Sophie will prevail.

Due to the illegality of the contract, Sophie will prevail.

A) I only

B) II only

C) Both I and II.

D) Neither I or II.

4. Which of the following statements about strict products responsibility in tort is true?

A) A manufacturer manufactures a car with a defective design without any fault.

B) A manufacturer breaches a duty of care in manufacturing a defective car.

C) A manufacture must knowingly decide not to warn customers of certain inherent dangers in a product.

D) None of the above.

5. Bernard and Sammy had agreed that Sammy would sell him 100 bunk beds for a total of $100,000. November 1st was the scheduled delivery date. Bernard hired Sammy on October 30th and informed her that he no longer desired the tables. The tables are then sold by Sammy to Alfred for $92,000. Additionally, sending the tables to Alfred, who is based in Alaska, would add an additional $4,000 in postal costs. Which of the following statements most accurately describes the financial losses Sammy can claim against Bernard?

A) $8,000 only, since it is the difference between the contract and the resale price.

B) $12,000, the difference between the contract and the sale price, plus the incidental damages of the extra postage.

C) $12,000, the difference between the contract and the sale price, plus the consequential damages of $4,000 for lost postage and profits.

D) Nothing, because the seller should have waited until November 1st to give the buyer a chance to reconsider.

6. Which of the following torts requires intent to be proven for the defendant to be liable?

I. Negligence

II. Conversion

III. Products Liability

A) I only

B) II only

C) I and III

D) I, II and III

7. In exchange for $550, Steve agreed to buy 1,000 cans of Sam's Ramble Chicken Noodle Soup. Three weeks would pass after the contract was signed before delivery. Sam told Steve that he "only wanted" to provide 850 cans rather than 1,000 from the time the contract was signed because Steve is a Rangers fan, therefore he sent only 850 cans on the delivery date. Will Steve be successful in getting the contract discharged if he tries?

A) Yes, because Sam materially breached the contract.

B) No, because Sam did not materially breach the contract.

C) Yes, because Sam failed to perform a condition.

D) No, because Sam materially performed the condition.

8. On April 2, X must locate and deliver 500 cases of "Puko" Beer to Y. The cases were delivered by X to Y's place of business. Y declined the items. Three hours later, Y decides against receiving the products and asks X to redeliver them. The following outcome is most likely:

A) X must redeliver because the rejection was in good faith.

B) X does not have to redeliver because the first tender of performance served to discharge the obligation.

C) X must redeliver because a merchant is under an obligation to ensure acceptance.

D) X does not have to redeliver because of impossibility of performance.

9. Which of the following is true?

A) A corporation must have a minimum of 1000 voting shares.

B) A corporation must have only one class of stock

C) A corporation must be created under the law of a given state

D) A corporation must be created under Federal securities laws

10. Generally, the biggest difference between a limited liability company (LLC) and a traditional partnership is:

A) Managers in an LLC have the right to vote dividends for stock while partners do not.

B) Managers in an LLC are subject to double taxation, while partners are not.

C) Managers in an LLC have limited personal liability as to most obligations, while partners have unlimited personal liability.

D) Managers in an LLC have no personal liability with respect to any obligation of the LLC, while partners have limited personal liability.