Legal Environment of Business Ch7-12

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InTown Delivery Service promises to deliver a certain couch to Kurt, who promises to pay for the service. If InTown does not perform, the firm may be required to

pay damages

On behalf of the rock group Uno, their manager Thalia agrees to a performance in Seaside Amphitheatre on July 4. Rex, acting for Seaside Productions, sends a written copy of the agreement to Thalia to be signed. Typically, businesspersons put their contracts in writing to

ensure proof of the contracts' existence

When Jeff's car breaks down, he asks Kwik Tow, Inc., to tow it from its location to Loyal Repair Shop. There is no discussion of a price, and Jeff and Kwik do not sign any documents. After the tow, Kwik sends Jeff a bill. With respect to Jeff's obligation to pay the bill, this is

an implied contract

Employment Sources, Inc., enters into a contract with Fred. If Fred is a minor, this contract is most likely

voidable.

Demi promises to buy a house from Caleb, who promises to vacate the property on June 1. If these promises are in writing, they are most likely

enforceable

Greco promises to buy illegal copies of CDs and DVDs from Fava, who promises to deliver on April 15. These promises are most likely

void

Shelby offers to make digital copies of Relay Company's business conference videotapes, CDs, DVDs, and other media for $500. Under the mailbox rule, Relay's acceptance by e-mail will be considered effective when

sent

Rollo promises to perform, for a price, shoe repair services in affiliation with Togs 'n Things, a clothing store. To support a contract, the consideration exchanged by the parties must be

legally sufficient.

Jenna, a minor acting on her own, signs a contract to buy a horse and its tack from Field Equine Ranch. Later, after taking possession of the horse and tack, Jenna disaffirms the deal. She

must return both the horse and the tack

Jolie signs a contract with Keaton, an unlicensed physician, to perform plastic surgerya medical procedure. This contract is enforceable by

no one

In most contracts, promises of performance are not expressly conditioned

True

Maya is a stockbroker. Nora believes that the price of OK Goods, Inc. (OKGI), a widely traded stock, is going to increase substantially. Through Maya, Nora buys 500 shares of OKGI at $10 per share, but the price soon drops to $2. Nora can successfully recover from Maya

nothing

Urban City and Thru-way Construction Company enter into a contract that includes calculations. Urban, whose engineer, Sergei, compiled the figures, discovers later that some numbers were added incorrectly, but Thru-way refuses to make changes. Urban can

rescind the contract on the basis of mistake

Genie.com initiates an online dating service. To attract subscribers and encourage participation, Genie.com creates and posts profiles of fictitious persons and exaggerated profiles of actual users. Fooled by the false profiles, Ham buys a subscription. He is most likely a victim of

fraud

Lyra induces Moe to enter into a contract for the sale of an apartment about which Lyra fraudulently misrepresents a number of material facts. Lyra tells Moe that her commission is 6 percent, but their signed, written contract states "12 percent." The Statute of Frauds governs

contracts that must be in writing to be enforceable

Fresh Air Filter & Purification Company and Big Box Commercial Storage Company enter into a contract. To be enforceable, the contract must be in writing if it involves

an interest in land

Loren and Kendra enter into a contract for the distribution of Loren's produce to local restaurants for which he agrees to pay Kendra. Kendra transfers her right to payment under the contract to County Bank. This transfer is

an assignment

GroundSwell Pools, Inc., agrees to build a swimming pool for Francis, but fails to complete the job. Francis hires EquiAqua, Inc., to finish the project. Francis may recover from GroundSwell

the costs needed to complete construction

Ralph contracts to sell his Double-R Ranch to Samantha on May 1. On April 20, Ralph tells Samantha that he will not go through with the deal. Samantha can recover

the Double-R Ranch

Tristan hires Stefani to perform at Tristan's Club, but she breaches the agreement to accept a higher-paying job at Rock Star Arena. Tristan files a suit against Stefani. The court will most likely

award damages to Tristan

Vacation Vistas, Inc., agrees to sell certain acreage to Umiko, who intends to develop a destination resort. Vacation Vistas repudiates the deal. Umiko sues Vacation Vistas and recovers damages. She can now obtain

nothing more

Over the course of a year, Retail Market, Inc., sells goods from its inventory and one of its warehouses. In exchange, Retail receives checks and other items that substitute for cash, which Retail uses to repay a loan from Savers Bank. Article 2 of the UCC governsAnswer

the sale of the goods

Fresh Harvest, Inc., agrees to sell to Gina's Bed & Breakfast Inn a certain amount of locally grown produce each week but no mention is made of where the goods are to be delivered. In general, the UCC requires that the delivery take place at

Fresh Harvest's place of business

Readymade Construction Corporation offers to buy from Set-Still Cement Company a certain quantity of cement for a certain price. Set-Still can accept the offer by

a promise to ship or a prompt shipment of the cement

Equipment Rental Corporation and Family Farm, Inc., are parties to an oral agreement for a lease of farm equipment with payments in excess of $10,000. They may satisfy the Statute of Frauds by

setting out the terms in a memo

Gunmakers Pride Corporation contracts for the sale of twelve hunting rifles to Hunters Supply store. Gunmakers delivers nonconforming goods. Acceptance will be presumed unless Hunters Supply rejects the goods

within a reasonable time after delivery

Consuelo and Gabriela enter into a contract for a sale of saxophones and other brass instruments. Consuelo delivers, but Gabriela does not pay. Consuelo can normally recover as damages

the purchase price plus incidental damages

Cheesy Pizza Company contracts to sell 1,000 cases of frozen pizzas to Roller Rinx, Inc., but refuses to deliver. Due to a spice shortage, Roller Rinx cannot obtain pizza elsewhere. Roller Rinx's right to recover the goods from Cheesy is the right of

replevin

Parker, a salesperson for Quality Textiles, Inc., shows Rosa, a fabric buyer for Style Clothing Company, samples of cloth, stating that any shipment will match the samples. This statement is

an express warranty

Olga, a salesperson for Pre-owned Cars & Trucks, Inc., tells Quincy, "This is the best car I've ever seen." This statement is

puffery

Reilly makes a fraudulent misrepresentation to Sonny, a consumer, who buys Reilly's product. In using the product, Sonny suffers an injury. To serve as a basis for recovery, the misrepresentation must concern

a material fact

Urbana performs a contract with Virgil to add a sun porch to Virgil's house, but Virgil does not pay. In most states, Urbana can create a lien and place it on Virgil's property by filing

a written notice of lien

Delia refuses to pay Ewing $500 in cash on their contract to repair certain theater sets, which Ewing still possesses. Ewing's lien on the sets will terminate

if Ewing voluntarily surrenders possession

Ping's debt to Oak Furniture Warehouse is past due. Oak obtains a judgment against Ping, but Ping refuses to pay it. Oak asks the court for an order that directs the sheriff to seize and sell any of Ping's nonexempt real or personal property that is within the court's geographic jurisdiction. This is a request for

a writ of execution

Speedy Delivery Company buys a white van from Tom's Terrific Vehicles, on credit under a guaranty signed by Ulysses, Speedy's president, making him personally liable if Speedy does not pay. Ulysses is

a guarantor

Delilah files a petition in bankruptcy. The proceeding is governed by the Bankruptcy Code, which is part of

federal law

Seth files a petition for bankruptcy. Seth must include with the petition

a list of creditors and the amount of the debt owed to each

Teona files a voluntary petition in bankruptcy for relief through a liquidation. Debts that will not be discharged include claims for

domestic-support obligations

Liberty Bank provides Michelle with a standard mortgage with an unchanging rate of interest to buy a home. Payments on the loan remain the same for the duration of the mortgage. This is

a fixed-rate mortgage

Rita borrows $30,000 from South State Credit Union. South State accepts Rita's equity in her home as collateral, which can be seized if the loan is not repaid on time. This is

a home equity loan

Laurel borrows $150,000 from Marketplace Mortgage Loans to buy a home. The financing documents require Laurel to maintain the property, obtain homeowners' insurance, and pay all property taxes and other assessments through the lender. With respect to these terms, a court is most likely to

enforce them.

Milo borrows $125,000 from North State Bank to buy a home. To comply with the Statute of Frauds, the mortgage must be

in writing

Main Street Lenders, Inc., attempts to coerce Nolan¾who specializes in determining the value of real and personal property¾into misstating the value of a property on which a loan is to be issued. This is

neither party

Property Financial Corporation makes loans that qualify, under a Federal Reserve Board amendment to Regulation Z, as Higher-Priced Mortgage Loans (HPMLs). Quinn applies to Property Financial for an HPML. To make the loan, the lender must

verify the borrower's ability to repay the loan

Velma borrows $110,000 from Watershed Bank to buy a home. If she fails to make payments on the mortgage, the bank has the right to repossess and auction off the property securing the loan. This is

foreclosure

Gena borrows $350,000 from Fish Island Bank to buy a home, which secures the mortgage. In the seventh year of the loan, Gena stops making payments. After the bank repossesses the property but before it is sold, Gena may buy it by paying

the full amount of the debt, plus any interest and costs

Carl sells Direct Marketing Enterprises, a sole proprietorship, to Eve. This is a transfer of

the ownership of the business

Jim organized, and owns and operates, Jim's Landscaping Service in the simplest form of business organization. This is

a sole proprietorship

Kelly, the owner of Llama Farms, a sole proprietorship, wants to obtain additional business capital but to maintain control. This can best be accomplished by

borrowing funds

Jody owns KuppaJava Kiosks, a sole proprietorship. Jody's liability is

unlimited

Guy and Hanna do business as G-H Associates. If G-H is a partnership, it is governed by the Uniform Partnership Act

in the absence of an express agreement

Sable and Rex agree while talking on the phone to form a partnership to deal in transfers of real property, which fall under the Statute of Frauds. Their partnership agreement is legally binding

only if the agreement is reduced to writing

Megan and Nicole do business as One World Realty. In acting on the firm's behalf in a deal with Property Acquisition Company, Megan fails to account for the profit. To her firm, Megan is

liable for breach of the duty of loyalty

Hud and Iggy form Jerry-Bilt Construction to enter into a contract to build one bridge. Under their partnership agreement, Jerry-Bilt is to dissolve when the bridge is built. Iggy signs a contract for the firm to build a second bridge. Jerry-Bilt

dissolves as soon as the first bridge is built

Esteban and Florian want to form a limited liability company (LLC) to manage their business, Gordian Nuts. LLC statutes have been adopted in

every state

Sustainable Café LLC is a limited liability company. Like any other LLC, unless Sustainable Café chooses otherwise, the firm will be taxed as

a partnership

Real Events Promotion Corporation licenses Stadium Souvenirs, Inc., to sell Real Events caps, sweatshirts, and similar goods. This is

a franchise

What are the 4 requirements that make a contract valid?

1.An agreement. An agreement to form a contract includes an offer and an acceptance. One party must offer to enter into a legal agreement, and another party must accept the terms of the offer.
2. Consideration. Any promises made by the parties must be supported by legally sufficient and bargained-for consideration (something of value received or promised to convince a person to a make a deal).
3. Contractual capacity. Both parties entering into the contract must have the contractual capacity to do so. The law must recognize them as possessing characteristics that qualify them as competent parties.
4. Legaility. The contract's purpose must be to accomplish some goal that is legal and not against public policy.

What contracts fall under the Statute of Fraud

1. Contracts involving interests in land
2. Contracts that cannot by their terms be performed within one year from the day after the date of formation
3. Collateral, or secondary, contracts, such as promises to answer for the debt or duty of another and promises by the administrator or executor of an estate to pay a debt of the estate personally - that is, out of his or her own pocket.
4. Promises made in consideration of marriage
5. Under the Uniform Commercial Code contracts for the sale of godds priced at $500 or more.

Types of contracts

1. Bilateral (a promise for a promise) & unilateral (a promise for an act)
2. Formal (requires a special form for creation) & informal (requires no special form for creation
3. Express (formed by words) & implied (formed at least in part by the parties' conduct
4. Executed (a fully performed contract)
Executory (a contract not yet fully performed)
Valid (a contract that results when the elements necessary for contract formation exist, including an agreement, condisderation, parties with capacity and legal purpose.
Voidable (a contract that may be legally avoided at the option of one or both of the parties.)
Unenforceable (a valid contrac trendered unenforceable by some statue or legal defense.
Void (a contract that has no legal force or binding effect)

The term comity means

The deference one nation shows for the laws and judicial decrees of another nation

The act of state doctrine is frequently employed in what kinds of cases?

Expropriation cases

Exporting may take one of two forms:

Direct and indirect

You enter into a contract with Misha, a distributor from St. Petersburg, Russia. In your contract you specify that any disputes arising under the contract should be litigated in New York state courts. This would be called:

A forum-selection clause

If in your contract with Misha you want to specify that U.S. law will apply to a contract in the event of a disputes over the contract's terms, you should include ________ in your contract.

a choice-of-law clause

The United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards has been recognized by:

Has been implemented in nearly one hundred countries, including the United States

The foreign exchange rate is:

The price of a unit of one country's currency in terms of another country's currency

Suppose that the U.S. government charges $1.50 to import each and every DVD player made in Taiwan. This tax is:

A tariff

The international organization charged with the responsibility for eliminating trade barriers, including tariffs, is:

The WTO

Which of the following is not a source of international law?

International common law.

Intellectual property is defined as:

property that results from an intellectual, creative process and so is the product of one's mind

Trademark dilution laws protect against:

the unauthorized use of mark regardless of whether the user is a competitor.

If a company that makes laundry detergent calls its product Pommo, the name "Pommo" would be considered:

a strong mark

Suppose that when you enter an "On the Border" Mexican restaurant, you see a distinctive interior, a distinctive menu, and a wait staff wearing distinctive attire. This combination of things creates a unique ambience, known in legal terms as a:

trade dress

When you cybersquat, you:

register someone else's mark as a domain name, then offer to forfeit the name for a price

Jami invents a new machine that automatically weeds small gardens. He obtains a patent for his invention from the U.S. government. Louisa buys one of Jami's machines, pulls it apart, copies his work, and starts producing and selling her own version of the amazing "Weed Eater." Louisa:

has infringed on Jami's patent rights

Although courts disagree on this issue, the tendency in court cases has been to not extend copyright protection to which of the following?

The "look and feel" of a computer program.

A trade secret might include which of the following?

A customer list.

The widespread use of the Internet has made the protection of trade secrets:

more difficult, because employee can easily transfer to competitors or others his or her employer's trade secrets via e-mail or a disk.

Which of the following treaties provides for the international protection of intellectual property?

The TRIPS agreement

The five basic remedies for breach of contract include the following:

money damages, restitution, rescission, reformation, and specific performance.

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