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A person acquires title to fungible goods by mixing them. To avoid liability for negligence, a business owner must protect its patrons against all risks. Answer: FALSE Stocks represent the borrowing of funds by firms. Answer: FALSE Downloading software or […]

Strict liability applies to the suppliers of component parts. A U.S. citizen can bring a civil suit in a U.S. court against a U.S. entity for a tort allegedly committed overseas. Answer: TRUE Publishing false information about another’s product is […]

It is presumed that a co-tenancy is community property unless there is a clear intention to establish a joint tenancy. A holding company is a company whose business activity consists of holding shares in another company. Answer: TRUE In a […]

When a corporation is dissolved voluntarily, the corporation must notify its creditors of the dissolution. Voir dire is a process for presenting evidence in a case. Answer: FALSE One of the requirements of a valid contract is a fair price. […]

A corporate officer is expected to be informed on corporate matters. In most states, a release requires a signed writing. Answer: TRUE A check is a special type of certificate of deposit. Answer: FALSE Common carriers are held to a […]

Home equity is the portion of a home’s value that is “paid off.” The UCC imposes the same rules of conduct on all parties in all circumstances. Answer: FALSE A principal is not liable to a third party for any […]

Against a charge of a violation of the Securities Act of 1933, only an issuer of stock can assert the due diligence defense. Procedural due process requires that any taking of a person’s life, liberty, or property by government must […]

A usurious contract involves the purchase and sale of usable goods. To commit an intentional tort, one person must intend to harm a certain other person. Answer: FALSE If a buyer breaches a contract while the seller is still in […]

A contract must be in writing to be enforceable unless its performance is impossible within one year. A mistake of fact can only be bilateral. Answer: FALSE Any third party beneficiary to a contract who is not an intended beneficiary […]

An illegal contract is valid if the parties to it were unaware of the illegality. An “assignment of all rights” absolves the assignor of all liability under the contract that created the rights. Answer: FALSE An accountant’s liability under the […]

Order Processing Corporation and Pinpoint Data, Inc., enter into a contract online in a state that has enacted an unmodified version of the UETA. With regard to the E-SIGN Act A.the E-SIGN Act does not preempt this version of the […]

Antidumping duties are the responsibilities of international environmental polluters. When two conflicting security interests are unperfected, the first to attach has priority. Answer: TRUE A power of attorney can be given only to an actual attorney. Answer: FALSE A continuation […]

In a contract for a sale of goods, the usual measure of compensatory damages is the difference between the contract price and the market price. A sole proprietor owns the entire business but does not receive all of the profit. […]

Normally, when a nonbreaching party has been damaged by a breach of contract, he or she has a duty to mitigate those damages. A transfer of contract rights to a third party is a delegation. Answer: FALSE An ethics program […]

Securities that are exempt from the registration requirement can generally be sold and resold without being registered. An accord and satisfaction requires that the amount of a debt be certain. Answer: FALSE Each partner is an agent of the partnership […]

A bank that pays a customer’s check with a forged drawer’s signature can generally pass the loss onto the customer. Expenses that are caused directly by a breach of contract-such as those incurred to obtain performance from another source-are incidental […]

To be enforceable, a contract for a sale of goods priced at $50 or more must be in writing. Under a destination contract, if a lessor is a merchant, the risk of loss passes to a lessee when the lessee […]

In most states, the courts no longer grant “equitable” remedies. An offer must be communicated to the offeree to be effective. Answer: TRUE Under the exclusionary rule, all illegally obtained evidence must be excluded from any related criminal prosecution. Answer: […]

Under the Equal Pay Act of 1963, all of the women on an employer’s staff must be paid the same as all of the men. A person who holds all rights in property owns the property in fee simple. Answer: […]

A judge instructs a jury as to the law that applies in a case. A landlord is usually required to give some period of notice to terminate a periodic tenancy. Answer: TRUE Patent protection begins on the date that a […]

Cole drives into Dino’s Service Station and asks Erin, the attendant, to fill the tank in Cole’s hybrid vehicle. After Erin fills the tank, but before Cole pays for the gas, any contract between Cole and Dino’s is A.executed. B.executory. […]

No oral contract is enforceable under the UCC. In contract law, “consideration” refers to the courtesy that one party shows another in negotiating a deal. Answer: FALSE An assignment of a negotiable instrument is generally prohibited. Answer: FALSE Under the […]

A spendthrift trust provides for a beneficiary’s transfer of his or her right to future payments of trust funds. A certificate of deposit is a type of draft. Answer: FALSE The holder of an artisan’s lien can foreclose and sell […]

United Industrial Corporation gives preferential treatment in hiring and promotion to the members of all protected classes. This treatment results in discrimination against members of the majority. This is A.a bona fide occupational practice. B.a business necessity. C.constructive discharge. D.reverse […]

A check carries with it an implied promise to reimburse the bank for paying the check. A warranty deed provides the most protection against defects of title. Answer: TRUE Service of process is the process of obtaining information from an […]

Neil goes to Oil Shop to change the oil in his car. Perry, the service technician, learns that Neil plans to take a trip and advises the use of a certain type of oil. The oil breaks down during the […]

If a lessor’s tender of delivery fails to conform to a contract in any way, the lessee can reject the goods. A joint tenant’s sale of his or her interest terminates the joint tenancy. Answer: TRUE An Internet service provider […]

Concurrent conditions occur only when the parties to a contract are required to perform their respective duties simultaneously. Shareholders have a right to inspect corporate books and records. Answer: TRUE Normally, a court of law will not question the adequacy […]

There are no registration requirements for trade secrets. Contract law shows what excuses our society accepts for breaking certain types of promises. Answer: TRUE A financing statement is effective for no more than five months from the date of filing. […]

If a nonconforming installment substantially impairs the value of a whole contract, the buyer can treat the entire contract as having been breached. A bank that has certified a check is under no obligation to accept it. Answer: FALSE Venue […]

A party seeking to recover in quasi contract must show that he or she has been unjustly enriched. Shares issued for more than their fair market value are known as watered stock. Answer: FALSE If an action is ethical from […]

An applicant for insurance has a duty to disclose only material facts that the insurer asks for. Under the Restatement (Third) of Torts, accountants can be held liable for negligence to any third parties. Answer: FALSE A divorce necessarily revokes […]

A forum-selection clause indicates the place for the resolution of a dispute arising under a contract. An online offer should include provisions relating to dispute settlement. Answer: TRUE One way to acquire ownership rights to property is merely to possess […]

An offeror is a person who makes an offer. If a buyer wrongfully refuses to accept goods that conform to a contract, the seller can maintain an action to recover the damages sustained. Answer: TRUE A criminal case must be […]

An expression of opinion by a seller will not usually create a warranty. An employer is not liable for the sexual harassment of an employee by the employee’s supervisor. Answer: FALSE UCC Articles 3 and 4 govern checks. Answer: TRUE […]

A federal judge must adhere strictly to federal sentencing guidelines. An express warranty cannot be limited. Answer: FALSE On a partner’s dissociation, his or her duty of loyalty to the partnership ends. Answer: TRUE Article 2 of the UCC governs […]