Questions and Answers of Business Law Today

Without authority to do so, Allen signed Baker’s name on a note, promising to pay Cohen $5,000 in 30 days. The note was negotiated to Davidson who was a holder in due course. Will Davidson be
Refrigerated Transport Co., Inc., employed a collection agency to collect some of its overdue accounts. The collection agency indorsed, without authority, checks made payable to Refrigerated
Andersen entered into a franchise agreement with Great Lake Nursery, under which Andersen was to grow and sell nursery stock and Christmas trees. Great Lake was to provide trees, chemicals, and other
In exchange for an asphalt paving job, Paulick gave Bucci a note promising to pay to the order of Bucci $7,593 in six months with 10 percent per annum interest. Payment was not made on the due date,
Carolyn Brazil wrote a check to a contractor who agreed to make certain improvements on her home. She wrote the check in reliance on the contractor’s false representation that the mat e rials for
As part of the purchase price for a 9,040-acre ranch, Kirby gave Bergfield a $20,000 check drawn on the Bank of Bellevue. Bergfield had her banker telephone the Bank of Bellevue to inquire about
Haik transferred his stock in PetroCom, an oil exploration company, to Rowley in exchange for five $10,000 promissory notes. The notes were signed by Rowley and indorsed by Ro w ley’s son, Stephen.
David and Nettie Weiner signed seven promissory notes, totaling $89,000, in their capacity as president and secretary of NMD Realty Co. In addition, they indorsed each note on the reverse side with
Rutherford purchased real property from Ethel Stokes for $35,000. He paid $5,000 down and signed a promissory note for the balance. The note was secured by a deed of trust (a type of security
Bolton wrote a check for $20,000 to his daughter, Joyce, intending to make a gift. The check was drawn on the State Bank of Wapello and mailed to Joyce in Maryland, where she was living. Joyce
This case is really three separate cases, each one adding a new twist to the life and times of Scranton Bank and Trust, a small banking firm in Scranton, Pennsylvania. In the first case, Norwalk Auto
Michael Carrington, the CEO of the Ice-Fire Security Corporation pushed his marketing division into developing a hard-hitting marketing campaign that included several new aggressive strategies. At
The bank acts as the customer’s principal when it collects checks or other negotiable instruments made payable to the customer. True/False
The drawee bank has no liability to the holder of a check unless it is certified. True/False
The commission of forgery is a crime, subject to a fine and imprisonment. True/False
A depositary bank is the first bank to which an item is transferred for collection, even if it is also the payor bank. True/False
The life cycle of a check begins when the drawer writes a check and delivers it to the payee. True/False
If the payor bank pays a check in cash, its payment is final. True/False
Consumers have 30 days to notify the bank of any error on the periodic statement received for the use of an ATM. True/False
A consumer’s liability for the unauthorized use of an ATM card is limited to $500 if notice of the loss or theft of a card is given the issuer within two business days. True/False
The unauthorized use of an ATM card is a criminal offense punishable by a $500 fine and/or five years in prison. True/False
What are the bank’s duties in the bank–depositor relationship?
What are the depositor’s duties in the bank–depositor relationship?
What are a drawer’s rights in relation to a stop payment order?
What is the extent of the insurance protection provided by the FDIC?
What are the different terms used to describe banks during the bank collection process?
What are the steps in a check’s life cycle?
What are the principal features of the Check 21 Act?
What consumer protection features are found in the Check 21 Act?
What happens during the process of an electronic funds transfer?
What protection is given to consumers by the Electronic Fund Transfer Act?
Arthur Woods died holding an annuity payable on his death to his wife, Dorothy. In payment of the annuity, a checking account for $24,900 was established in Dorothy Woods’s name. The bank sent the
Kelco bought a truck from Felton, paying for it with a cashier’s check she had obtained from her bank. On her way home, the truck broke down. Kelco immediately telephoned her bank and told it to
Granite Corp. sent a check to Overseas Equipment Co. When the check was reported lost, Granite wrote to its bank telling it to stop payment on the check. Granite then sent the money to Overseas
While in the hospital during his final illness, Norris wrote out a check and gave it to his sister. She deposited it in her bank account. Norris died before the check cleared, and his bank refused to
On June 18, Templeton deposited in his bank account a $5,000 check that was payable to his order. The check reached the drawee bank through normal banking channels on June 22. That bank had received
Fitting wrote an $800 check on her account with Continental Bank. A bank employee had mistakenly placed a hold on the account, causing the bank to dishonor the check when it was presented for
Roberta Lunt deposited a $625 nonlocal check payable to her with a teller at her bank at 10:30 a.m. on Monday. The next day, Tuesday, she went to the bank to withdraw $300 and was told by the teller
Toward the end of the 18th century, the British legal system had begun to stagnate. This stagnation was reflected in the legal system’s ill-advised overdependency on precedent. A Scottish
Three American Express money orders were stolen from one of its agents, and 100 others were stolen while being shipped to a different agent. When stolen, all of the money orders contained the
Bethany Golemen was discharged from her job as an advertising executive at Farnsworth, Yardley, and Brook. Her credit cards were maxed out, her savings account depleted, and her rent was due. On the
The purpose of insurance is to spread losses among people who can most afford it. True/False
An application filled in by an insurance applicant is a binding contract on the insurer. True/False
Anyone can obtain insurance on another person or property, regardless of their relationship. True/False
An insured can cancel a straight life policy at any time and receive its cash surrender value. True/False
Term insurance is the most expensive kind of life insurance. True/False
With property insurance, unlike life insurance, an insurable interest must exist when a loss occurs. True/False
An insurance binder provides permanent insurance coverage. True/False
Insurance premiums increase as the chance of loss increases. True/False
An insurance contract will terminate automatically if a premium payment is not paid on time. True/False
An insurance company may refuse to pay for a loss if it can prove that the insured breached a warranty to abide by certain restrictions. True/False
If an insured gives false answers to questions in an insurance application, the insurance company can do nothing about it unless it discovers the fraud before any loss. True/False
An insurer may not deny acts, statements, or promises that are relevant and material to the validity of an insurance contract. True/False
What is mutual assent?
What are the elements of an offer?
What is the UCC’s concept of an offer?
How does an acceptance come about?
What is revocation?
What statutes affect mutual assent in cyberspace?
What are the elements of fraud and misrepresention?
What are the effects of mistake on mutual assent?
What are duress and undue influence?
An advertisement appeared in the Chicago Sun- Times for the sale of a Volvo station wagon at Lee Calan Imports, Inc., for $1,095. The advertisement had been misprinted by the Sun-Times. The actual
Morrison wanted to sell a certain parcel of land to Thoelke. He decided to make an offer by sending Thoelke a letter. When Thoelke received the letter, he decided to accept. He wrote a letter to
Wholesale Coal Company ordered 25 carloads of coal from Guyan Coal and Coke Company. Guyan could not come up with 25 carloads. However, it did have 7 carloads available. Before shipping the coal,
Tockstein wrote an offer to purchase a house owned by Rothenbeucher. Tockstein signed the offer and personally delivered it to Rothenbeucher. The offer included a condition that acceptance must be
Walker and Cousineau were both in the gravel business. Walker placed an advertisement for a tract of land, claiming that he had an engineer’s report that indicated the land held at least 80,000
Young sold a residential lot to Sorrell without revealing that the lot had been filled. The landfill was not obvious, and Sorrell could not have been reasonably expected to detect it. When Sorrell
Boskett offered to sell a 1916 dime to Beachcomber Coins, Inc. Beachcomber examined the coin carefully and agreed to pay Boskett $500 for it. Later, Beachcomber asked a representative from the
Prisoners rioted at the Iowa State Penitentiary and held prison staff members as hostages. The warden agreed in writing that no reprisals would be levied against the rioting inmates. In exchange, the
Loral Corporation had a contract with the U.S. government to manufacture radar sets. Loral subcontracted with Austin Instrument for the production of precision parts to be used in the radar sets.In
The success or the failure of a contractual relationship is frequently a matter of faith. The buyers trust the sellers (or their agents) to play fair with them by providing a full and accurate
Suppose after conducting a survey that revealed most people did not know about their rights under the Postal Reorganization Act, a company began a mailing campaign that sent unordered merchandise to
Suppose that you are showing your car to Tim Jorgenson, a potential buyer. You know that if Jorgenson takes your car out for a ride, he will notice that the front end rattles at speeds in excess of
What are the different types of detriment?
What characteristics are necessary for consideration to be valid?
What is meant by the term “unconscionable”?
Can a promise not to sue be consideration?
How can a charitable pledge be consideration?
What is the procedure that a debtor and creditor may use to settle a claim by means of accord and satisfaction?
What agreements may be enforceable by a court of law even though they lack consideration?
What is the doctrine of promissory estoppel ?
What issues are involved in the cyber-payment process?
The fact that each party has received a benefit and suffered a detriment means that the consideration has legal value. True/False
The legal term used to designate the gain that each party experiences is the party’s legal benefit. True/False
Consideration does not require that the benefits and sacrifices promised between the parties be legal. True/False
Today contractual parties never find it beneficial to enter barter agreements. True/False
If a party promises not to sue another party, and it is later discovered that the first party never really had the right to sue, the original promise not to sue is invalid in every state, and the
Even though charities depend on the solicitation of contributions, the courts have refused to enforce charitable pledges. True/False
A disputed amount is one on which the parties never reached mutual agreement. True/False
If a creditor accepts as full payment an amount that is less than the amount due, the dispute has been settled by promissory estoppel. True/False
An undisputed amount is one on which the parties have mutually agreed. True/False
An option is the giving of consideration to support an offeror’s promise to hold an offer open for a stated length of time. True/False
Although illusory promises provide the mutuality of promises required in establishing consideration, the courts will not enforce them due to the doctrine of unconscionability. True/False
The promise of a gift to be given at some future time or in a will is completely enforceable even if no consideration is given for the promise. True/False
Twenty-two congressional representatives proposed a bill that would permit corporate shareholders to review the consideration packages that had been granted to key corporate executives of public
Consideration can serve as a strong motivator. At least this is what a newly founded shareholder forum believes. The forum was formed to monitor the salaries of top corporate executives, especially
General Motors decided to move a car producing operation to Arlington, Texas, from a plant located in Ypsilanti, Michigan. As a result, the township of Ypsilanti brought a lawsuit to stop General
Aviation Electronics entered a contract with Sky Train Institute of Montana in which Aviation agreed to supply the institute with 17,000 component parts for the development of the institute’s
Savaretti offered to pay his niece, Wilma, $2,000 if she would agree to give up eating meat and pastries and drinking caffeinated beverages for six months. Wilma agreed and gave up these activities

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