Business Law : Final Assignment

Part One: Multiple Choice Questions

1. Which of the following requires consideration to be binding on the parties?
a) Material modification of a contract involving the sale of real estate.
b) Ratification of a contract by a person after reaching the age of majority.
c) A written promise signed by a merchant to keep an offer to sell goods open for 10 days.
d) Material modification of a sale of goods contract under the UCC.

2. Under the UCC Sales Article, the implied warranty of merchantability:
a) May be disclaimed by a seller's oral statement that mentions merchantability.
b) Arises only in contracts involving a merchant seller and a merchant buyer.
c) Is breached if the goods are not fir for all purposes for which the buyer intends to use the goods.
d) Must be part of the basis of the bargain to be binding on the seller.

3. West purchased a painting from Noll, who is not in the business of selling art. Noll tendered delivery of the painting after receiving payment in full from West. West informed Noll that West would be unable to take possession of the painting until later that day. Thieves stole the painting before West returned. The risk of loss:
a) Remained with Noll, because West had not yet received the painting.
b) Remained with Noll, because the parties agreed on a later time of delivery.
c) Passed to West at the time the contract was formed and payment was made.
d) Passed to West on Noll's tender of delivery.

4. On February 15, Mazur Corp. contracted to sell 1,000 bushels of wheat to Good Bread, Inc. at $6.00 a bushel with delivery to be made on June 23. On June 1, Good advised Mazur that it would not accept or pay for the wheat. On June 2, Mazur sold the wheat to another customer at the market price of $5.00 per bushel. Mazur had advised Good that it intended to resell the wheat. Which of the following statements is correct?
a) Mazur can successfully sue Good for the difference between the resale price and the contract price.
b) Mazur can resell the wheat only after June 23.
c) Good can retract its anticipatory breach at any time before June 23.
d) Good can successfully sue Mazur for specific performance.

5. Which of the following factors results in an express warranty with respect to a sale of goods?
I. The seller's description of the goods as part of the basis of the bargain.
II. The seller selects goods knowing the buyer's intended use.
a) I only.
b) II only.
c) Both I and II.
d) Neither I and II.

6. An employee will generally be precluded from collecting full worker's compensation benefits when the injury is caused by:

7. Workers compensation laws provide for all of the following benefits, EXCEPT:
a) burial expenses
b) full pay during disability
c) the cost of prosthetic devices
d) monthly payments to surviving dependent children

8. Workers Compensation Acts require an employer to:
a) provide coverage for all eligible employees.
b) withhold employee contributions from the wages of eligible employees
c) pay an employee the difference between disability payments and full salary
d) contribute to a federal insurance fund

9. Under the Revised Model Business Corporation Act, which of the following items of information should be included in a corporation's articles of incorporation (charter)?
a) Name and address of each preincorporation subscriber
b) Nature and purpose of the corporation's business
c) name and address of the corporation's promoter
d) Election of either C corporation of S corporation status

10. Jane Cox, a shareholder of Mix Corp., has properly commenced a derivative action against Mix's Board of Directors. Cox alleges that the Board breached its fiduciary duty and was negligent by failing to independently verify the financial statements prepared by management upon which Smart & Co., CPAs, issued an unqualified opinion. The financial statements contained inaccurate information which the Board relied upon in committing large sums of money to capital expansion. This resulted in Mix having to borrow money at extremely high interest rates to meet current cash needs. Within a short period of time, the price of Mix Corp. stock declined drastically. Which of the following statements is correct?
a) The Board is strictly liable, regardless of fault, since it owes a fiduciary duty to both the corporation and the shareholders.
b) The Board is liable since any negligence of Smart is automatically imputed to the Board.
c) The Board may avoid liability if it acted in good faith and in a reasonable manner.
d) The Board may avoid liability in all cases where it can show that it lacked scienter.

11. Acorn Corp. wants to acquire the entire business of Trend Corp. Which of the following methods of business combination will best satisfy Acorn's objectives without requiring the approval of the shareholders of either corporation?
a) A merger of Trend into Acorn, whereby Trend shareholders receive cash or Acorn shares.
b) A sale of all the assets of Trend, outside the regular course of business, to Acorn, for cash.
c) An acquisition of all the shares of Trend through a compulsory share exchange for Acorn shares.
d) A cash tender offer, whereby Acorn acquires at least 90% of Trend's shares, followed by a short form merger of Trend into Acorn.

12. Absent a specific provision in the Articles of Incorporation, a corporation's Board of Directors has the power to do all of the following, EXCEPT,
a) Repeal the bylaws
b) Declare dividends
c) Fix compensation of directors
d) Amend the Articles of Incorporation

13. What is the doctrine under which a corporation is made liable for the torts of its employees, committed within the scope of their employment?
a) Respondeat superior
b) Ultra vires
c) Estoppel
d) Ratification

14. Following the formation of a corporation, which of the following terms best describes the process by which the promoter is released from, and the corporation is made liable for, pre-incorporation contractual obligations?
a) Assignment
b) Novation
c) Delegation
d) Accord and satisfaction

15. Price owns 2,000 shares of Universal Corp.'s $10 cumulative preferred stock. During its first year operations, cash dividends of $5 per share were declared on the preferred stock but were never paid. In the second year, dividends on the preferred stock were neither declared nor paid. If Universal is dissolved, which of the following statements is correct?
a) Universal will be liable to Price as an unsecured creditor for $10,000.
b) Universal will be liable to Price as a secured creditor for $20,000.
c) Price will have priority over the claims of Universal's bond owners.
d) Price will have priority over the claims of Universal's unsecured judgment creditors.

Part Two: Essay (500 words or less):
Using the attached article, and any other information or court opinions, explain whether Uber drivers in New York State are 1) independent contractors; 2) employees eligible for unemployment insurance benefits; or 3) either independent contractors or employees on a case-by-case basis.

See "NY Administrative Finding Backs Employment Status for Ex-Uber Drivers", NY Law Journal, 10/13/16.

Joel Stashenko and Ben Seal, New York Law Journal.