Tech, Inc., sells its brand-name computer equipmentdirectly to its franchised retailers. Depending on how existingfranchisees do, Tech may limit the number of franchisees in a givenarea to reduce intrabrand competition. Techâ€™s restriction on thenumber of dealers likely is
A) a per se violation of the Sherman Act.
B) exempt from the antitrust laws.
C) subject to continuing review by the appropriate federalagency.
D) subject to the rule of reason.
Francis owns a small motel in Sugarloaf Key. She notices by meansof public advertising that her competitors in Big Pine Key andRamrod Key have extended by two weeks their â€œwinter seasonâ€ andthus their winter season higher rates. Francis also notices the â€œnovacancyâ€ signs at her competitorsâ€™ motels. So, Francis decides toextend the winter season at her motel too. Francis has engaged:
A) Illegal horizontal price-fixing by means of an expressagreement.
B) Illegal horizontal price-fixing by means of an impliedagreement
C) Legal action by means of the doctrine of ConsciousParallelism
D) Legal action since anti-trust law does not apply to smallmotels, only large ones and hotels.
Ã‚Â General Construction contracts to build a store for HomeStores for $1 million. In mid-project, Home repudiates thecontract, and General stops working. General incurred costs of$600,000 and would have made a profit of $100,000. Generalâ€™smeasure of damages likely is
A) $1 million.
The four shareholders of Delta, Inc., want to prevent each otherfrom selling the shares to third parties without first being giventhe opportunity to buy them. The shareholders can provide for thisin
A) a buy-sell agreement that includes a â€œtake-alongâ€ clause.
B) a buy-sell agreement that includes a right of first refusal.
C) a key-person clause that specifies who can sell what towhom.
D) none of the above.
Ã‚Â Eagle Manufacturing, Inc., contracted with Digital RepairServices to maintain Eagleâ€™s computers. A â€œLiquidated DamagesClauseâ€ provides that Digital will pay Eagle $500 for each day thatDigital is late in responding to a service request. If Digital isthree days late in responding, and Eagle sues to enforce thisclause, Eagle will
A) lose, because liquidated damages clauses violate publicpolicy.
B) lose, unless the liquidated damages clause is determined to be apenalty.
C) win, because liquidated damages clauses are alwaysenforceable.
D) win, unless the liquidated damages clause is determined to be apenalty.
Fast Ed, a stock trader, engages in a â€œpump and dumpâ€ schemewhereby he goes into Internet chat stock rooms and â€œhypes,â€praises, and extols certain stocks he owns. He says such things as:â€This is the best stock ever.â€ â€œThis stock is great and will makeus a fortune.â€ â€œYou MUST own this stock in your portfolio.â€ He doesrepeatedly and uses several aliases. Then, when Fast Ed has â€œpumpedupâ€ the price of the stock to a certain level, he calls his brokerto sell, that is, to â€œdump,â€ the stock. He makes a lot of moneywith this scheme. Fast Ed is likely acting:
A) Illegally pursuant to the common law tort of deceit since he didnot disclose the aliases.
B) Illegally pursuant to the Securities Act of 1934 for engaging instock manipulation.
C) Legally since he was careful not to make any misrepresentationsof material fact regarding the stock, and just used â€œpuffingâ€ orsales talk.
D) Legally since everyone knows not to put any credence behind whatpeople say in chat rooms, especially about stocks, and thus â€œLetthe buyer beware.â€
Ã‚Â Stan buys a CD player from Tom, his neighbor, who agrees tokeep the player until Stan picks it up. Before Stan can get it, theplayer is stolen. The loss is suffered by
A) Stan only.
B) Tom only.
C) Stan and Tom.
D) none of the above.
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