Cengage Advantage Books: Business Law: Principles And Practices 9th Edition

Parol evidence is admissible to show changes after the written contract was made. Answer: T Answer: T Answer: T To ____________________ means to obtain substitute goods elsewhere when the seller breaches the sales contract. Answer: cover Answer: cover Answer: cover Property pledged as collateral must be in the possession of the creditor. Answer: F Answer: F Answer: F The Real Estate Settlement Procedures

The rights read to a suspect upon arrest are called the ____________________. Answer: Miranda warnings> Answer: Miranda warnings> Answer: Miranda warnings> A(n) ____________________ agent has the authority to perform acts that relate to all business affairs of the principal. Answer: general Answer: general Answer: general Services of an attorney are personal in nature, and thus may not be

Stockholders have the power to a. elect directors. b. amend the by-laws. c. approve of a merger. d. all of these. Answer: D Answer: D Answer: D An unpaid seller has the right to stop delivery of goods purchased on credit that were delivered to a carrier for shipment to the buyer whenever the a. buyer fails to make

The Consumer Product Safety Commission does not have the power to force a toy manufacturer to place a warning label on its products. Answer: F Answer: F Answer: F Both real and personal property can be the subject of a bailment. Answer: F Answer: F Answer: F Agreements enforceable without consideration are generally based on principles of ____________________

In a breach of warranty suit, damages are the amount needed to correct the defect. Answer: F Answer: F Answer: F What makes an exculpatory clause illegal and against public policy? Answer: When the person or organization succeeds in its demand that an exculpatory clause be placed in a superior bargaining position. (Refer to page

Magin offered to sell Richards some secondhand college textbooks for $75. Richards wasn't sure he wanted the books. Magin then agreed to keep the offer open for five days if Richards would give him $5. Can Magin legally withdraw this offer before the five days are up? Answer: No. Magin created an

An executory contract is one that has not been fully performed by one or all of the parties. Answer: T Answer: T Answer: T Clauses in contracts prohibiting assignments and delegations are invalid. Answer: F Answer: F Answer: F An actual ____________________ of ____________________ occurs when one party to a contract fails to perform the obligations required. Answer: breach;

Of the following, the one that is not a duty owed by a principal to an agent is a. reimbursement. b. compensation. c. obedience. d. indemnification. Answer: C Answer: C Answer: C Past consideration a. is synonymous with moral consideration. b. is a promise made for an act about to take place. c. usually induces the offeree to act. d. is a

The Electronic Funds Transfer System (EFTS) allows money to be transferred electronically from a depositor's bank account into the account of a store where the depositor made a purchase. Answer: T Answer: T Answer: T The U.S. Supreme Court was established by an act of Congress. Answer: F Answer: F Answer: F The Civil Rights Act limits the

A taxpayer's rights are described in publications of the ____________________. Answer: Internal Revenue Service Answer: Internal Revenue Service Answer: Internal Revenue Service An unwitnessed, handwritten will is invalid. Answer: F Answer: F Answer: F One principle of our legal system is to acknowledge the equitable considerations of the parties involved. This principle is referred to as ____________________. Answer: accommodation

Ownership in a condominium is considered personal property. Answer: F Answer: F Answer: F If a person dies without making a will and has no living relatives, that person's estate becomes the property of the state. Answer: T Answer: T Answer: T A(n) ____________________ may elect to receive a statutory share of an estate if not left a

Most civil cases are settled before they go to trial. Answer: T Answer: T Answer: T Ordinarily, if an agreement is completely executory, the minor's failure to act after reaching majority is considered an act of ____________________. Answer: disaffirmance Answer: disaffirmance Answer: disaffirmance ____________________ is defamation expressed in writing. Answer: Libel Answer: Libel Answer: Libel The United States has two separate and

The right to cut down trees on a neighbor's land is called a license. Answer: F Answer: F Answer: F Only real property that is owned by private interests can be acquired through adverse possession. Answer: T Answer: T Answer: T One who receives benefits from a trust is called a(n) ____________________. Answer: beneficiary Answer: beneficiary Answer: beneficiary A landlord is not

An agreement that lacks consideration is said to be a. illegal. b. a benefit to the promisor. c. a benefit to the promisee. d. unenforceable. Answer: D Answer: D Answer: D A check is made payable to "Mark Spitz." If Spitz wishes to negotiate the instrument, he must a. indorse the instrument. b. deliver the instrument. c. indorse and deliver the

Major medical insurance protects against the high costs of serious illness. Answer: T Answer: T Answer: T A promise to pay a reward to a police officer for capturing a criminal is not legally enforceable. Answer: T Answer: T Answer: T A void contract has no legal effect. Answer: T Answer: T Answer: T The most common method of discharging contracts is

The person who issues a check to another is called the a. maker. b. payee. c. drawee. d. drawer. Answer: D Answer: D Answer: D A voluntary agreement by a debtor to have a portion of his or her wages turned over to a creditor to repay a debt is known as a(n) a. garnishee. b. voluntary judgment. c. attachment. d. wage

Contrast objective impossibility with commercial impracticability. Answer: Objective impossibility refers to those situations in which the contract absolutely can no longer be performed. It is a strict common law rule that applies in only three cases. Commercial impracticability is a UCC (Uniform Commercial Code) that takes the harshness out of the

Grasso sold her computer to Robb for $1,500, payable in thirty days. Robb had misrepresented his age as twenty-one when in fact he was only seventeen. At the end of the thirty days, Robb returned the computer and disaffirmed the purchase. Grasso refused to accept the computer and sued Robb

Usury laws protect borrowers from paying excessively high interest rates. Answer: T Answer: T Answer: T Remedies for breach of sales contract under the UCC are available only to the buyer. Answer: F Answer: F Answer: F In a civil lawsuit during a pretrial proceeding, if the defendant's attorney claims that the evidence is not sufficient to continue

Which of the following statements is true about the term subjective impossibility? a. The defense of subjective impossibility is accepted by the courts in only a few situations. b. Hardships such as strikes, riots, and acts of God are automatically included in the term subjective impossibility. c. Physical impossibility is the same as

A novation is another name for an accord and satisfaction. Answer: F Answer: F Answer: F Words such as "Inc." and "Corp." indicate that a business is a corporation. Answer: T Answer: T Answer: T A hotelkeeper is prohibited from discriminating against potential guests by the ____________________ Act. Answer: Civil Rights Answer: Civil Rights Answer: Civil Rights No ____________________ is required to

Terry made an offer by letter to Swire. Unless otherwise specified by Terry, Swire's acceptance of this offer would become effective when his letter of acceptance was a. written and signed by Swire. b. properly mailed by Swire. c. received by Terry. d. acknowledged by Terry. Answer: B Answer: B Answer: B Under the UCC, if a merchant

Tax liens are granted to a government agency to ensure the payment of property taxes. Answer: T Answer: T Answer: T An agency that may not be unilaterally revoked by the principal is a(n) ____________________. Answer: agency coupled with an interest Answer: agency coupled with an interest Answer: agency coupled with an interest Offering to take someone to

Black and Conway owned an office building as tenants in common. Black died. To whom does Black's interest in the office building pass? Answer: To the person named in Black's will or, if there is no will, to Black's heirs. Black's interest does not pass to Conway. Answer: To the person named

The disadvantage of the sole proprietorship is a. lack of flexibility in managing the business. b. unlimited liability for debts of the business. c. ease of formation. d. none of these. Answer: B Answer: B Answer: B Freeman contracted to build a wooden garage for Douglas. Before construction began, a local ordinance was enacted prohibiting wooden structures in the

An adult has the legal right to ask a parent, guardian, or other adult to co-sign a contract made with a minor. Answer: T Answer: T Answer: T For an instrument to be negotiable, the promise or order must be ____________________. Answer: unconditional Answer: unconditional Answer: unconditional The bankruptcy of the agent may terminate the agency relationship. Answer: T Answer: T Answer:

Group insurance expires when the person leaves the group. Answer: T Answer: T Answer: T Pauley owns and operates the only grocery store in a small town of about 500 residents. Has Pauley violated the antitrust laws by creating a monopoly? Answer: No. Monopolies are created when one company deliberately and wrongfully takes steps to eliminate

Richardson offered to sell her used motorcycle to Evans for $450. Evans said, "I accept, but would you also replace the front tire." Neither Richardson nor Evans is a merchant. a. Evans has accepted the offer. b. Evans has rejected the offer. c. Richardson may treat her offer as accepted or rejected. d. Evans's statement

Violations of business ethics occur only in large corporations. Answer: F Answer: F Answer: F Duress and undue influence have the same meaning. Answer: F Answer: F Answer: F In many states, usury is a crime. Answer: T Answer: T Answer: T Braun issued a $35 check to Rice. Rice took the check to Braun's bank and had it certified. Rice then

A bank may refuse to pay a depositor's check for any reason. Answer: F Answer: F Answer: F Courts enforce law by imposing punishment for violations or awarding damages to ones who have been injured. Answer: T Answer: T Answer: T In order to protect the environment, government may regulate how businesses dispose of their wastes. Answer: T Answer: T Answer: T Burns,

Misstatement of the insured's age will result in a. voiding of the policy. b. possible cancellation of the policy by the insurance company. c. adjustment of the face value of the policy by the insurance company. d. none of these. Answer: C Answer: C Answer: C If a principal tells an agent to falsify income tax returns, a. the

Nonwage extras given to employees by employers are called ____________________. Answer: fringe benefits Answer: fringe benefits Answer: fringe benefits Business Ethics is the inquiry into the moral judgment people make in deciding what is right or good in their daily lives. Answer: F Answer: F Answer: F Udall issued a $400 check to Jackson. Udall's bank refused to

Congress requires that certain contracts be written in ____________________. Answer: Plain English Answer: Plain English Answer: Plain English A credit card that automatically withdraws money from the cardholder's bank account is known as a(n) ____________________ card. Answer: debit Answer: debit Answer: debit A creditor's claim to specific property of a debtor is called a judgment. Answer: F Answer: F Answer: F The ____________________

If the holder of a negotiable instrument alters it in any significant way, the obligation of any affected parties is ____________________. Answer: discharged Answer: discharged Answer: discharged How does full performance differ from substantial performance? Answer: Full performance is when both parties do all that they agreed to do under the terms of the contract.

When the contract is executory and a minor misrepresent his or her age, several states will: a. permit the minor to disaffirm an agreement and recover any consideration paid. b. not permit the minor to disaffirm the agreement. c. allow the adult to recover for damages resulting from the minor's misrepresentation. d. hold the

One type of relationship between a bank and a depositor is that of debtor-creditor. Answer: T Answer: T Answer: T A court must enforce the terms of a written sales contract, even if they are unfair. Answer: F Answer: F Answer: F If two parties enter into an agreement that both know is illegal, the parties are said

If the seller delivers nonconforming goods to the buyer after time for performance is past, the buyer may: a. accept the nonconforming goods. b. reject all the goods c. accept any part of the goods and reject the rest. d. all of these. Answer: D Answer: D Answer: D McKay, aged fifty-five, was walking into a plaza when

A minor breach of contract discharges the contract. Answer: F Answer: F Answer: F A minor who is no longer under the control and authority of parents is said to be ____________________. Answer: emancipated Answer: emancipated Answer: emancipated With fraud in the inducement, the maker never intended to create the instrument. Answer: F Answer: F Answer: F Collins appointed Rubin to sell

A tenant remains obligated on a lease even though the tenant subleases the premises. Answer: T Answer: T Answer: T Unreasonable personal conduct that causes damage to someone else is called ____________________. Answer: nuisance Answer: nuisance Answer: nuisance Law actually refers to the duties imposed upon people requiring them to act in a certain manner. Answer: T Answer: T Answer: T Why

What is the advantage of relying on prior court decisions (stare decisis doctrine) to decide future cases? Answer: Predictability. Established court decisions allow judges, attorneys, and people in general toact in a certain way knowing that there is existing precedent to rely on when emerging cases involving similar disputes arise. Answer: Predictability.

Refraining from doing something you have a legal right to do is called ____________________. Answer: forbearance Answer: forbearance Answer: forbearance How does the perfect tender rule under the UCC change the obligations of the seller and the buyer as their obligations existed under the common law? Answer: Actually, the perfect tender rule "rolled over to the

If bailed property is destroyed because of the bailee's negligence, the result is that the a. bailment ends. b. bailment continues. c. bailee is liable to the bailor for damages. d. bailment ends and that the bailee is liable to the bailor for damages. Answer: D Answer: D Answer: D The only court actually provided for by name

If the seller breaches the contract but no real damages occur, a court is likely to award punitive damages to the buyer. Answer: F Answer: F Answer: F A secondary party cannot limit her or his liability by a qualified indorsement. Answer: F Answer: F Answer: F A carrier may make a special charge called a(n) ____________________ for

To legally call off a contract means to rescind that contract. Answer: T Answer: T Answer: T Specific performance is an equitable remedy. Answer: T Answer: T Answer: T An executor or administrator is one who handles a deceased person's estate. Answer: T Answer: T Answer: T What are the two major uses of a negotiable instrument and what types of negotiable

An employer has the right to ask potential employees questions about their race, religion, and nationality. Answer: F Answer: F Answer: F Mistakes about a contract may be either unilateral or mutual. Answer: T Answer: T Answer: T If a person unknowingly deals with an unlicensed individual, the courts will usually allow the person to recover any money

Lutz took out a standard fire insurance policy on her home from two different companies. When the house was destroyed by fire, Lutz tried to collect the full amount from both companies. Will she succeed? Answer: No. When the property is insured with more than one insurance company, each company isonly

A person who buys stolen property may be guilty of conversion. Answer: T Answer: T Answer: T Remedies for breach of sales contract under the UCC are intended to place the injured party in as good a position as if the contract had not been breached. Answer: T Answer: T Answer: T The first ten amendments to the

While illegal contracts have civil penalties, the parties involved may also be subject to criminal penalties. Answer: T Answer: T Answer: T In a(n) ____________________, the original contract is terminated and a new contract formed between the remaining party to the original contract and the new party. Answer: novation Answer: novation Answer: novation Franchising is regulated by both

The kind of signature required to satisfy the statute of frauds must be a. handwritten. b. typed. c. printed. d. all of these. Answer: D Answer: D Answer: D Rodell Construction Co. contracted to build several greenhouses for Delmar Corp. The specifications in the contract called for the use of Apex glass. By mistake Rodell installed Remco glass

The ____________________ rule states that the offeree must match, term by term, what was requested in the offer. Answer: mirror-image> Answer: mirror-image> Answer: mirror-image> A(n) ____________________ is a person who benefits from private information received from a corporate insider. Answer: tippee Answer: tippee Answer: tippee The ____________________ of a corporation delegates power for day-to-day operations to an executive

Parties to a negotiable instrument who have liability for payment of the instrument are classified as either primary parties or secondary parties. Distinguish between primary parties and secondary parties. Answer: Primary parties are those who are first obligated to pay the instrument. Secondary parties are those who are legally obligated to

The Social Security system is an example of using law to a. settle disputes. b. promote worthwhile social objectives. c. protect property. d. protect society. Answer: B Answer: B Answer: B An employer found guilty of violating the Occupational Safety and Health Act may be a. fined. b. subject to criminal penalties. c. neither fined nor subject to criminal penalties. d. both

Why does the law protect minors in their dealings with adults? Answer: The law presumes that minors are immature and, therefore, lack judgment and experience. Answer: The law presumes that minors are immature and, therefore, lack judgment and experience. Answer: The law presumes that minors are immature and, therefore, lack judgment and experience. Obtaining

A minor may disaffirm or ratify a portion of an agreement. Answer: F Answer: F Answer: F Fram signed a contract to sell his home to Mills, with possession to be given on May 1. If Mills cannot obtain a mortgage by May 1 and the contract is silent about this, can Fram force

The ambassador from Austria to the United States wanted to sue the ambassador from Chile for injuries in a car accident caused by the Chilean ambassador. In which court will this suit be brought? Answer: U.S. Supreme Court. The Supreme Court has original jurisdiction to try cases involving foreign ambassadors. Answer: U.S.

One who transfers title to real property is called the grantee. Answer: F Answer: F Answer: F Defamation can be either slander or libel. Answer: T Answer: T Answer: T Mortgages may always be assumed without the consent of the lender. Answer: F Answer: F Answer: F A contract that is so extremely unfair to one of the parties as to 'shock

Depositing money in a checking account at the bank results in a(n) ____________________ relationship. Answer: debtor-creditor Answer: debtor-creditor Answer: debtor-creditor What is the significance of becoming the holder of a bearer instrument acquired illegally (e.g. stolen) and then legally having the power to pass the instrument on to an innocent third party? Answer: A negotiable

Upton rented a house from Vincent. Five months after the lease was signed, Vincent died. Is the lease terminated? Answer: No. The death of a landlord does not terminate a lease. Vincent's estate would become the new landlord. Answer: No. The death of a landlord does not terminate a lease. Vincent's estate

Martin sold his used car to Nixon for $2,000. Later Martin discovered that the car was worth $3,000. Martin then claimed that Nixon owed him an additional $1,000. If Martin attempted to take legal action to collect the additional $1,000, he would be entitled to a. $1,000 plus legal fees. b. $1,000 only. c.

Wilkes, a wealthy man, took out a life insurance policy and named his doctor, Byron, as the beneficiary. At Wilkes's death, may Byron collect the proceeds? Answer: Yes. The insured may name anyone he or she chooses as the beneficiary. Answer: Yes. The insured may name anyone he or she chooses as the

A bailment that benefits only one party is known as a(n) ____________________ bailment. Answer: gratuitous Answer: gratuitous Answer: gratuitous A secured creditor may repossess the debtor's property and sell it to pay the debt. Answer: T Answer: T Answer: T A buyer may sue for ____________________ to obtain the goods covered by the sales contract. Answer: specific performance; replevin Answer:

What should an attorney do before taking a case after his or her client describes in detail all the facts relating to the case? Answer: Conduct a preliminary investigation to determine the accuracy of the client's story. The investigation may lead the attorney to discover that there is no basis for

Baldo applied to rent an apartment in a building owned by Blair, but was turned down because she had a cat. She claims discrimination against pet owners. Is she correct? Answer: No. A landlord may refuse to rent space to anyone unless it represents discrimination basedon age, race, creed, gender, religion

Receiving an instrument by negotiation a. is the same as receiving the instrument by assignment. b. makes the third party who takes possession of the instrument a holder. c. converts the instrument into bearer paper. d. prevents the instrument from being further transferred. Answer: B Answer: B Answer: B When two or more checks are presented to a

In a criminal case, the defendant must be proven guilty beyond a reasonable doubt. Answer: T Answer: T Answer: T Indorsers are generally liable in the order in which they indorse the instrument. Answer: T Answer: T Answer: T ____________________ is the right granted to a person or business to purchase items and pay for them at a

A(n) ____________________ is a contract in which the offeror agrees to hold an offer open for a set time in return for consideration paid by the offeree. Answer: option> Answer: option> Answer: option> The ____________________ is the highest court in the United States. Answer: U.S. Supreme Court Answer: U.S. Supreme Court Answer: U.S. Supreme Court Major medical policies

An assignment has no effect until the obligor is notified. Answer: F Answer: F Answer: F What conditions must be met in order for a person to be accused of a material alteration? Answer: An alteration is material if the rights or duties of the parties are changed in any way. Answer: An alteration is material

Collision insurance a. usually has a deductible. b. covers damage to a vehicle regardless of the amount. c. covers only collision with another vehicle. d. provides no coverage if the driver is negligent. Answer: A Answer: A Answer: A To be classified as a tort, a wrongful act a. may be deliberate. b. may be a result of carelessness. c. must

To be valid, a gift must be made in writing. Answer: F Answer: F Answer: F A misdemeanor is the most serious offense against the state. Answer: F Answer: F Answer: F Prior to an offer being made by one party, the parties may talk back and forth. This procedure is called ____________________. Answer: preliminary negotiations> Answer: preliminary negotiations> Answer: preliminary

____________________ of a promissory note back to the maker will cancel it. Answer: Delivery Answer: Delivery Answer: Delivery A power of attorney is an example of express authority. Answer: T Answer: T Answer: T ____________________ govern the types of transactions that can be performed on Sunday. Answer: Sunday laws; Blue laws Answer: Sunday laws; Blue laws Answer: Sunday laws; Blue laws An

If an agreement contains an illegal part that can be separated, the entire agreement is void. Answer: F Answer: F Answer: F What is the significance of the seller sending conforming goods to the buyer? Answer: Conforming goods are goods that meet the requirements of the contract. This means that the seller has adequately performed

Billings and Durick, who are competing distributors, made an agreement whereby Billings promised that he would not sell his goods in a specified area, and Durick promised that she would not sell her goods in another specified area. The agreement was made to keep prices high by eliminating competition. This

Laws enacted by both state and federal governments to prevent monopolies are called ____________________. Answer: antitrust laws Answer: antitrust laws Answer: antitrust laws An architect not paid for services may file an artisan's lien. Answer: F Answer: F Answer: F Liability for injuries on flights within the United States is determined by ____________________. Answer: rules of negligence Answer: rules of

Jurors selected to serve on a civil trial jury are called grand jurors. Answer: F Answer: F Answer: F Preferred stockholders have first claim on the assets of a corporation if the corporation dissolves. Answer: F Answer: F Answer: F A(n) ____________________ occurs when a group of investors buy all the stock of a public corporation and convert

An instrument stating on its face, "Pay to Robert Stevens or bearer" is a. nonnegotiable. b. negotiable. c. an order instrument. d. a draft. Answer: B Answer: B Answer: B One who takes possession of an instrument after proper negotiation is a(n) a. indorser. b. holder. c. accommodator. d. negotiator. Answer: B Answer: B Answer: B Damage to one's boat would be covered by a(n) a. renter's

The owners of several stores in a shopping center agreed on certain hours during which they would remain open. Is this an unfair trade practice? Why or why not? Answer: No. The agreement governs the hours the stores will remain open. It does not attempt to fixprices, nor is it an

Which statement is correct regarding the transfer of contractual rights? a. The assignor acquires only such rights as the assignee has under the contract. b. The assignee acquires only such rights as the assignor has under the contract. c. The assignee acquires rights greater than the assignor has under the contract. d. The assignor

The buyer is usually responsible for paying the real estate agent's commission. Answer: F Answer: F Answer: F Johnson had a charge account at Brown's Department Store. On the most recent statement, Johnson noticed a $90 charge that she had not made. What action may Johnson take? Answer: Johnson may contact the store in writing

By exercising a(n) ____________________, the bailee may retain possession of the bailed property until paid for work or services. Answer: bailee's lien Answer: bailee's lien Answer: bailee's lien If a promissory note is not presented for payment on the due date, it is discharged. Answer: F Answer: F Answer: F Because of a severe throat ailment, Dodd, a

If a person wishes to join an existing partnership, all existing partners must agree to admit that person. Answer: T Answer: T Answer: T Accidentally killing a person while driving in an intoxicated condition is an example of a situation in which the family of the deceased person could sue for the tort of

A limited partnership is dissolved a. when its term ends. b. by agreement among all partners. c. by the bankruptcy of a general partner. d. by any of these. Answer: D Answer: D Answer: D A trust not set up during the trustor's lifetime is called a(n) a. testamentary trust. b. life insurance trust. c. inter vivos trust. d. standby trust. Answer: A Answer:

All consumers are entitled to a free annual credit report. Answer: T Answer: T Answer: T Delivering a negotiable instrument to the maker discharges it by cancellation. Answer: T Answer: T Answer: T A(n) ____________________ indorsement should be used if you mail a check to the bank for deposit. Answer: restrictive Answer: restrictive Answer: restrictive A term not included in a written

Any false statement on an application allows the insurer to cancel the policy. Answer: F Answer: F Answer: F The Truth in Lending Law requires that the cost of credit be stated both in dollars and cents and as a percentage of the amount borrowed. Answer: T Answer: T Answer: T Goods become identified when the seller and

An unsecured debt a. must be oral. b. must be in writing. c. may be either oral or written. d. must be filed in the county clerk's office. Answer: C Answer: C Answer: C The term that best describes an agreement whereby the offeree gives something of value to the offeror to keep an offer open is a. release. b.

When a person dies, her or his rights and obligations are transferred ____________________ to an executor or administrator. Answer: automatically Answer: automatically Answer: automatically A pretrial step that allows a party involved in a lawsuit to obtain detailed information about the other party's claim or defense is called ____________________. Answer: discovery Answer: discovery Answer: discovery When one party

While skiing, Carey fell and broke his leg and was unable to work for two months. What type of insurance would cover Carey's medical bills and loss of income? Answer: Medical insurance would cover Carey's medical expenses, including emergency room costs. Disability insurance would provide some income after the elimination period. Answer:

The Supreme Court case of Marbury v. Madison established the basis for the concept of judicial review in our legal system. Answer: T Answer: T Answer: T In a sale of goods, if the seller breaches the contract by delivering nonconforming goods, risk of loss remains with the seller until the seller ____________________ the defect. Answer:

A written contract needs at least one witness to establish its existence and its terms. Answer: F Answer: F Answer: F What is identity theft? What can individuals do to make this crime more difficult for criminals? Answer: Refer to pages 57 and 58 of the main text for a discussion of the crime of

What is the difference between an express warranty and an implied warranty? Answer: An express warranty is a statement of fact or a promise made by the seller as an inducement for the buyer to purchase the goods. An implied warranty is an obligation imposed upon a seller by law.> Answer: An

Joy orally promised to pay Toth $150 if he repaired Joy's computer. Toth repaired the computer but has not yet been paid. At this point, this contract is a. valid, unilateral, and executory. b. valid, bilateral, and executory. c. valid, bilateral, and executed. d. valid, unilateral, and executed. Answer: A Answer: A Answer: A As soon as a

It is more difficult for a(n) ____________________ to prove libel or slander than it is for a private citizen. Answer: public official[/cpmembership] Answer: public official[/cpmembership] Answer: public official[/cpmembership] The right of a minor or other incompetent party to avoid a contract is called ____________________. Answer: disaffirmance Answer: disaffirmance Answer: disaffirmance The principal usually lists in writing all of

A signed instrument lacking some piece of information may be transferred to another person with the authority to complete the instrument according to instructions. Answer: T Answer: T Answer: T Two remedies available to persons at equity are ____________________ and ____________________. Answer: injunction; specific performancespecific performance; injunction Answer: injunction; specific performancespecific performance; injunction Answer: injunction; specific performance specific

All restraints of trade are a violation of the Sherman Act. Answer: F Answer: F Answer: F When a depositor dies, the authority of the bank to pay or certify the depositor's checks ends immediately. Answer: F Answer: F Answer: F In personal injury lawsuits, attorneys are often paid a(n) ____________________ fee. Answer: contingency Answer: contingency Answer: contingency DNA evidence found at

The liability of stockholders for the debts of the corporation is a. limited to the amount invested. b. determined by the number of shares owned. c. unlimited. d. nonexistent. Answer: A Answer: A Answer: A The power of courts to hear and decide a case is known as a. jurisdiction. b. constitutionality. c. judicial review. d. accommodation of interests. Answer: A Answer: A Answer: A An

An agent is liable on a contract if the agent signs the principal's name. Answer: F Answer: F Answer: F A public garage's disclaimer of liability for a car lost or stolen because of the garage owner's negligence is likely to be unenforceable. Answer: T Answer: T Answer: T A form of time draft called a(n) ____________________ is

If a written lease does not state the length of the lease term, the lease is a. unenforceable. b. enforceable for one year. c. considered complete in spite of the omission. d. considered a tenancy at sufferance. Answer: A Answer: A Answer: A Recording a deed is done primarily to protect the a. county clerk. b. buyer. c. seller. d. buyer's attorney. Answer:

Marks, who innocently purchased a used television that had been stolen by the seller, was requested to surrender the television. Marks would not surrender the set until he was reimbursed the money he paid. Marks is guilty of the tort of a. fraud. b. trespass. c. negligence. d. conversion. Answer: D Answer: D Answer: D Damages that are

____________________ refers to the amount of time between the date a check is deposited and the date the funds from that check are made available to the depositor. Answer: Float period Answer: Float period Answer: Float period The right of an employer to fire an employee at any time regardless of reason is known

The ____________________ is the agreed-upon amount of a loss paid by the insured. Answer: deductible Answer: deductible Answer: deductible If your neighbors continue to do things on their property that disturb you, you can sue them for the tort of nuisance. Answer: T Answer: T Answer: T The chapter of the Bankruptcy Act that permits reorganization is Chapter

Which of the following statements is true? a. The assignee acquires the same rights as the assignor. b. The right to work for someone cannot be assigned without permission. c. An assignment usually requires no special form. d. All of these. Answer: D Answer: D Answer: D Which statement made by a salesperson as an inducement for selling

Hospital, surgical, and medical insurance are often combined into one basic health insurance policy. Answer: T Answer: T Answer: T A certificate of deposit is actually a loan by a depositor to a bank. Answer: T Answer: T Answer: T The purchase of a home is usually financed by a mortgage. Answer: T Answer: T Answer: T Russ, a salesperson in a

Under the UCC, a change in an existing contract must be based on consideration. Answer: F Answer: F Answer: F Under the common law, a contract can be discharged for circumstances beyond the control of the parties if the contract contains a(n) ____________________. Answer: contingency clause Answer: contingency clause Answer: contingency clause A check made out to "cash"

A contract implied in law is known as a(n) a. quasi contract. b. express contract. c. voidable contract. d. unilateral contract. Answer: A Answer: A Answer: A The holder of a promissory note fails to present the note to the maker for payment on the date on which it is due. What effect does this have on the

Crane sold a house to O'Brien, unaware that there was asbestos in the walls. May O'Brien sue Crane for fraud or to rescind the contract of sale? Answer: No. A seller of real property must only disclose to a buyer defects of which he is aware. Answer: No. A seller of real

If the seller breaches the sales contract, the buyer has a duty to cover. Answer: F Answer: F Answer: F The concept of ____________________ resulted in the establishment of three branches of government. Answer: separation of powers Answer: separation of powers Answer: separation of powers Rice hired Carter, a real estate broker, to buy a certain piece of

____________________ may be money, property, not doing something, or doing something you don't have to do. Answer: Consideration Answer: Consideration Answer: Consideration A consumer with a revolving charge account must pay the full amount owed each month. Answer: F Answer: F Answer: F If a negotiable instrument is not paid on time and a lawsuit to collect the

Berman sold her business, including merchandise and fixtures, to Curran. This is a(n) a. present sale. b. sale on approval. c. bulk transfer. d. auction. Answer: C Answer: C Answer: C A voidable contract a. is enforceable against all parties unless a party has a right to back out of it. b. lacks one of the essential elements of a

Administrative regulations have the same force and effect as statutes and court decisions. Answer: T Answer: T Answer: T A person can be both an agent and an employee at the same time. Answer: T Answer: T Answer: T Only the buyer may insert contingencies in the contract of sale. Answer: F Answer: F Answer: F A warranty obligation imposed by law

The person or institution granting a loan on real property is called the ____________________. Answer: mortgagee Answer: mortgagee Answer: mortgagee Is it true with the assignment of a personal right that all parties involved must agree to the transfer? If so, why? Answer: Yes. It would be unfair to force one party to perform personal

Special bailees are required to use ____________________ care. Answer: extraordinary Answer: extraordinary Answer: extraordinary A(n) ____________________ relationship is created when one person rents real property from another. Answer: landlord-tenant Answer: landlord-tenant Answer: landlord-tenant The Magnuson-Moss Warranty Act covers only ____________________ warranties. Answer: written> Answer: written> Answer: written> A majority of states have repealed Article 6 of the UU dealing with ____________________ sales. Answer:

A check is always payable on demand. Answer: T Answer: T Answer: T A debtor who makes a part payment of the debt before the due date is still liable for the balance if there is no dispute over the debt. Answer: T Answer: T Answer: T The occupier of a(n) ____________________ unit has no individual interest in

"Jurisdiction over the person" means that a court can hear and decide a case because it has authority over the ____________________ in the case. Answer: parties Answer: parties Answer: parties Liability for injuries on international flights is set by the Prague Convention. Answer: F Answer: F Answer: F Minors are generally liable for their torts. Answer: T Answer: T Answer: T After

The Occupational Safety and Health Administration is a state administrative agency. Answer: F Answer: F Answer: F Indorsers of negotiable instruments are primarily liable for payment of the instrument. Answer: F Answer: F Answer: F If a contract is required to be in writing, an assignment of that contract must also be in writing. Answer: T Answer: T Answer: T A minor's

Conrad, an accountant, who performed tax services for Glenn, a small business owner, earned a $5,000 fee over a three-month period. Conrad then assigned this fee to her bank to apply toward a loan. Based on this information, which of the following statements is correct? a. Legally, Conrad's claim is not

____________________ is the fee paid by a borrower for the use of money. Answer: Interest Answer: Interest Answer: Interest The statement made by the judge to the jury before jury members retire to the jury room to discuss the case is called the judgment. Answer: F Answer: F Answer: F If goods delivered to a buyer are intended to

Cohen said to Geary, "I'll give you this radio if you promise to clean out my garage on Saturday." Geary agreed. Who is the offeror? Who is the offeree? What was the consideration given to Cohen? What was the consideration given by Geary? Answer: The offeror is Cohen. The offeree is Geary. Cohen's consideration for

An item sold at or below cost in order to attract customers is called a. a rain check. b. a loss leader. c. bait. d. the switch. Answer: B Answer: B Answer: B Which of the following remedies is not generally allowed in a breach of contract suit? a. Punitive damages b. An injunction c. Rescission d. Specific performance Answer: A Answer: A Answer: A Another

When a corporation issues new stock, current stockholders may purchase additional shares before these shares are offered to the public. Answer: T Answer: T Answer: T English common law is the basis for much of the law in Europe today. Answer: F Answer: F Answer: F A denial of credit based solely on the age of the borrower

An unconscionable agreement is one that is grossly unfair. Answer: T Answer: T Answer: T A witness is willing to give evidence in court that would be helpful to one of the parties to a lawsuit. However, she lives in another state and is unable to attend the trial. How can her testimony be

The unemployment insurance program is financed by a. taxes paid only by employers. b. taxes paid only by employees. c. taxes paid by both employers and employees. d. none of these. Answer: A Answer: A Answer: A Of the following, the only one that is a trading partnership is a(n) a. law firm. b. medical office. c. accounting firm. d. auto repair

Double taxation means that the a. government taxes both salaries and dividends. b. government taxes both earnings to corporations and dividends to individuals. c. tax rate for corporations is double that of individuals. d. government taxes both stocks and bonds. Answer: B Answer: B Answer: B A contractor who is not paid for work done on a building

Allen, a teacher, copied pages from a published novel for study by the members of his literature class. Has she infringed the copyright? Answer: No. Copying copyrighted material for teaching purposes is considered "fair use" and is permissible. Answer: No. Copying copyrighted material for teaching purposes is considered "fair use" and is

Any increased risk caused by the insured releases the insurer from liability. Answer: T Answer: T Answer: T Goods that are fit for the purpose for which they would ordinarily be used are called ____________________. Answer: merchantable goods> Answer: merchantable goods> Answer: merchantable goods> Under what circumstances can the parol evidence rule be disregarded? Answer: When evidence does not

An assignment must always be in writing. Answer: F Answer: F Answer: F "I won't pay $500, but I will pay $300." This offer to pay $300 instead of $500 is an example of a(n) ____________________. Answer: counteroffer>[/cpmembership] Answer: counteroffer>[/cpmembership] Answer: counteroffer>[/cpmembership] If a local government takes an individual's land by condemnation, it must pay the property owner

An indorsee is the person who receives an indorsed instrument. Answer: T Answer: T Answer: T A minor cannot be a witness to a will. Answer: F Answer: F Answer: F The drawer of a certified check cannot legally force a bank to stop payment on this type of check. Answer: T Answer: T Answer: T Term insurance is ____________________ if the insured

The authority that an agent has because the principal leads third parties to believe that the agent has it is called a. implied authority. b. customary authority. c. apparent authority. d. none of these. Answer: C Answer: C Answer: C A partner who has an equal voice in management decisions but whose existence as a partner is not

A minor may not disaffirm an executed contract. Answer: F Answer: F Answer: F A restrictive covenant is temporary and binds only the present owner of property. Answer: F Answer: F Answer: F Stock with no printed value is known as ____________________ stock. Answer: no-par Answer: no-par Answer: no-par A bearer instrument is negotiated by delivery alone. Answer: T Answer: T Answer: T All of the

A partnership can be formed only by the express agreement of the parties. Answer: F Answer: F Answer: F The Magnuson-Moss Warranty Act requires manufacturers to provide written warranties. Answer: F> Answer: F> Answer: F> A creditor has an absolute right ____________________. Answer: to get paid Answer: to get paid Answer: to get paid Emancipated minors are generally liable

When the transfer of a negotiable instrument is made either by assignment or by negotiation, the third party becomes a holder. Answer: F Answer: F Answer: F What effect does death have on a contract that has already been formed? Answer: Death does not terminate a contract already formed before the death of either one

A trial court has the power to hear an appeal of a decision of a lower court. Answer: F Answer: F Answer: F Remedies for breach of contract may be included in the sales contract. Answer: T Answer: T Answer: T Rental of any type of personal property is a bailment. Answer: T Answer: T Answer: T Boyd's car, which originally cost

In a civil case, the plaintiff must establish the truth of his or her claim by a. proving his or her facts beyond a reasonable doubt. b. a preponderance of the evidence. c. direct examination. d. asking for a motion to dismiss. Answer: B Answer: B Answer: B By using checks, a business has a. no need to keep

____________________ is acquiring real property by occupying it for a long period of time without the owner's consent. Answer: Adverse possession Answer: Adverse possession Answer: Adverse possession A principal is liable only for acts the agent is authorized to perform. Answer: F Answer: F Answer: F A cooperative may be treated as either a(n) ____________________ or a corporation. Answer:

The savings feature of life insurance is called the cash value. Answer: T Answer: T Answer: T The rights and duties of the landlord and the tenant set out in a lease are known as warranties. Answer: F Answer: F Answer: F The formal, written accusation by a grand jury that a person has committed a crime is

An agreement that harms marriage is illegal because it is opposed to ____________________. Answer: public policy Answer: public policy Answer: public policy ____________________ is the security given to a court to obtain the release of a person from jail until a hearing or trial. Answer: Bail> Answer: Bail> Answer: Bail> A merchant who has temporary possession of a customer's

Under the common law, what are the three ways in which a contract can be discharged by impossibility? Answer: Destruction of the subject matter of the contract, death or serious illness in a personal services contract, and a change in the law. Answer: Destruction of the subject matter of the contract, death

The remedy of specific performance will be granted only if a. the buyer cannot buy substitute goods elsewhere. b. the goods are unique. c. the goods are no longer being offered for sale by other sellers. d. all of these. Answer: D Answer: D Answer: D The type of business organization formed most easily is the a. limited liability

The ordinary stock of a corporation is called ____________________. Answer: common stock Answer: common stock Answer: common stock All states permit the formation of limited partnerships. Answer: T Answer: T Answer: T A warranty can be given only at the time a product is purchased. Answer: F> Answer: F> Answer: F> The ____________________ signature was invented to accommodate electronic

If the contract put in writing is intended to be the final and complete agreement between the parties then it is considered as a(n) ____________________contract. Answer: integrated Answer: integrated Answer: integrated The UCC allows a sales contract to be enforced as long as the parties intended to make a contract, even in cases in which

Generally, the trend in modern court cases is that anyone who is injured by a defective product may sue. Answer: T> Answer: T> Answer: T> The landlord is always liable to a guest injured in the tenant's apartment. Answer: F Answer: F Answer: F If a contract is rescinded, the parties may keep the consideration

A person who signs a negotiable instrument in an unauthorized manner is subject to ____________________ liability. Answer: criminal Answer: criminal Answer: criminal A bailment in which only one party to the bailment, but not both benefits is called a(n) ____________________. Answer: gratuitous bailment Answer: gratuitous bailment Answer: gratuitous bailment Most businesses in the United States are organized as

Which of the following statements applies to a sale on approval under Article 2 of the UCC? a. both buyer and seller must be merchants. b. the buyer must be purchasing the goods for resale. c. risk of loss for the goods passes after the trial period is up. d. title to goods passes

A debtor's property may be seized and sold to pay off a debt. Answer: T Answer: T Answer: T Under Article 2 of the UCC, a purchaser obtains only such ____________________ to goods as the seller had. Answer: title Answer: title Answer: title A limited partnership is a hybrid between a(n) ____________________ and a partnership. Answer: corporation Answer: corporation Answer: corporation If

A(n) ____________________ instrument is negotiated by indorsement and delivery. Answer: order Answer: order Answer: order If a bailor fails to pack goods properly, a common carrier would not be liable for damage that results from the improper packing. Answer: T Answer: T Answer: T A contract for the sale of goods may be ____________________ even though it does

A written stop-payment order is effective for a. ten days. b. fourteen days. c. six months. d. one year. Answer: C Answer: C Answer: C A written order by one person directing the person's bank to pay a certain sum of money to another person is a a. promissory note. b. certificate of deposit. c. draft. d. check. Answer: D Answer: D Answer: D If a person's

Property damaged by a hit-and-run driver is covered by uninsured motorist insurance. Answer: F Answer: F Answer: F Money damages awarded for a breach of contract are an example of a legal remedy. Answer: T Answer: T Answer: T Exculpatory clauses relieve a party in advance for liability for the tort of negligence. Answer: T Answer: T Answer: T The Uniform Commercial

Harris Manufacturing delivered goods to a railroad for shipment to a customer. While in transit, the goods were destroyed in a fire caused by lightning. Is the railroad liable for the loss? Answer: No. A common carrier is not liable for a loss that results from an act of God. The lightning

Ruth, an agent, was asked by her principal to also sign a contract involving the sale of merchandise to Flower. If the contract is breached, may Flower sue both Ruth and her principal for damages? Answer: Yes, because Ruth has agreed to be personally liable on the contract. Answer: Yes, because Ruth

Which contract would ordinarily be considered illegal? a. Paying a fee for a license in a state where the purpose of the licensing statute was merely to raise revenue for the state. b. A contract between a minor and an adult for the sale of real estate. c. A contract made by an