The FTC rule, which provides that a notice provision must be included in all consumer
credit contracts, requires that the notice:
a. limit recovery under the contract to amounts paid by the debtor plus a reasonable
charge for incidental damages.
b. be in italic type.
c. be at least 20 points in size.
d. has the effect that no subsequent person can be a holder in due course of the
instrument.
Which of the following situations create(s) an exception to the statute of frauds writing
requirement?
a. non-resellable goods
b. receipt and acceptance
c. Payment
d. all of the above
In a minitrial:
a. only three jurors are used.
b. the trial addresses only portions of the case or certain issues related to the case.
c. the decision is always fully binding on the parties.
d. none of the above.
When no limited partnership certificate is filed, what is the result?
a. Only limited partners are fully liable.
b. Only general partners are fully liable.
c. Limited partners retain their limited liability.
d. Both general and limited partners are fully liable.
A president of a corporation does not have the authority to:
a. make a long-term employment contract.
b. mortgage a corporate property.
c. release a claim of the corporation.
d. perform any of the above acts.
In a cash sale that does not require the physical moving of the goods, the:
a. parties are required to perform concurrently.
b. seller is required to tender the goods before the buyer must pay for them.
c. buyer must pay for the goods in advance.
d. buyer must actually receive the goods before he or she is required to pay for them.
A security agreement must:
a. identify the parties involved.
b. contain a reasonable description of the collateral.
c. demonstrate that the parties intended for the creditor intends to have a security
interest.
d. all of the above.
An agreement is not binding when:
a. one party makes a mistake regarding a material fact.
b. both parties make a mistake regarding a material fact.
c. one party makes a mistake of law.
d. all of the above.
To be eligible for FMLA leave, an employee must have been employed by a covered
employer for at least __________ months and have worked at least __________ hours
during the 12-month period preceding the leave.
a. 6; 1,250
b. 6; 1,500
c. 12; 1,250
d. 12; 1,500
A taker of a negotiable instrument may be denied the status and protection of a holder
in due course where:
a. one party is a consumer.
b. the close-connection doctrine applies.
c. the instrument is bearer paper.
d. none of the above.
Unless statutory requirements are met, a will is invalid and the testator:
a. is considered to have died testate.
b. is considered to have died intestate.
c. is subject to federal law.
d. has provided guidelines of distribution.
Federal supremacy refers to:
a. the power of the President.
b. the power of the Supreme Court to make decisions.
c. the power of the federal government to legislate in certain areas.
d. all of the above.
V3 was a successful singing group that contracted to perform at the “Metalsubstance”
rock concert. V3 was aware that the promoter would sustain a substantial loss if the
group failed to perform. The members of the group were stricken with a virus that
confined them to their beds. The promoter sued for breach of contract. What is the
probable result?
a. V3 is liable for damages for breach of contract.
b. The contract was discharged by impossibility of performance.
c. In order to avoid liability for breach of contract, V3 must arrange for another group
of comparable quality and reputation to perform on the scheduled date.
d. V3 will be deemed to have substantially performed the contract.
Under Article 2 of the UCC, in a situation where it is clear that the parties intended a
contract, but a term in the acceptance conflicts with a term in the offer:
a. there is no contract.
b. the acceptance is viewed entirely as a counteroffer.
c. there is a contract for the terms of the offer and acceptance that are consistent, but the
conflicting terms cancel out.
d. there is a contract, and the conflicting term in the offer is part of the contract.
The type of patent that may be granted to developers of plant reproduction methods is
called a:
a. process patent.
b. functional or utility patent.
c. improvement patent.
d. plant patent.
The relationship of guest and hotelkeeper ends when the guest:
a. pays his or her bill.
b. advises the hotelkeeper of his or her departure .
c. leaves or ceases to be a transient.
d. has stayed for 30 days and becomes a boarder.
An administrative agency can be created to perform:
a. only one of the three functions of government (executive, legislative, or judicial).
b. any two of the three functions of government.
c. all three of the functions of government.
d. none of the three functions of government.
Sylvia and Morris were married and owned their home as tenants by the entirety. When
Morris died, his will said that he left his half of his home to his brother Tim. Sylvia
objects to this. The ownership of the home:
a. belongs solely to Sylvia by survivorship.
b. is now a joint tenancy between Sylvia and Tim.
c. is now a tenancy in common between Sylvia and Tim.
d. belongs to Sylvia and the state, in equal and divisible shares.
Which of the following is beyond the enforcement power of an agency?
a. requiring proof of compliance with agency regulations
b. issuing a cease-and-desist order
c. convicting of criminal violations
d. imposing civil penalties
Garnishment applies to the judgment debtor’s:
a. wages.
b. attorney fees.
c. land and home.
d. cars.
When performance is impeded due to the occurrence of an event whose nonoccurrence
was a basic assumption of the contract, the contract may be discharged on the grounds
of:
a. commercial impracticability.
b. commercial impossibility.
c. economic frustration.
d. economic stability.
Under the Revised Uniform Limited Partnership Act, a limited partner may contribute:
a. cash only.
b. property only.
c. services only.
d. cash, property, and services.
When a business owner uses an independent contractor to perform nonhazardous work,
the owner ordinarily is:
a. not liable for harm to third persons or their property.
b. not bound to contracts made by the independent contractor.
c. not liable for the negligence of employees of the independent contractor.
d. all of the above.
The Electronic Communications Privacy Act of 1986 (ECPA) is useful in resolving
privacy issue questions.
In reviewing agency action, courts generally apply the:
a. “beyond a reasonable doubt” standard.
b. “preponderance of the evidence” standard.
c. “arbitrary and capricious” standard.
d. “rational relationship” standard.
Where a testatrix executes a will and later has a child:
a. the child is prohibited by law from receiving anything from the estate.
b. many states hold that the will of the testatrix is partially revoked by operation of law
to provide a share to the after-born child.
c. a new will must be executed because the birth voids the original will.
d. the after-born child takes a share by escheat.
Dealing honestly, reasonably, and in good faith:
a. is implied in every contract for services.
b. is implied in every contract for the sale of goods.
c. is an expressed obligation in every contract.
d. both a and b.
A(n) __________ is an undertaking by one person, for consideration, to pay another
person a sum of money in the event of a specified loss.
a. absolute guaranty
b. indemnity contract
c. guaranty of payment
d. surertyship
Title VII of the Civil Rights Act of 1964 applies to:
a. the hiring process.
b. discipline.
c. discharge
d. all of the above.
Misrepresentation:
a. is the same as fraud.
b. is a false statement of fact made with the intent to deceive.
c. is a false statement of fact made without any intent to deceive.
d. can be used as a limitation to excuse an accountant from liability.
The degree of care required of a person is:
a. that degree of care the person exercised in the situation at hand.
b. that degree of care an extraordinary person would exercise under similar
circumstances.
c. that degree of care an ordinarily prudent person would exercise under similar
circumstances.
d. none of the above.
A full warranty allows the seller to require the buyer to assume the shipping cost of
returning the good(s) for repair.
Quasi contracts are contracts.
Franchise disclosures are not required under federal law.
Pay raises based on seniority generally are considered lawful.
Offensive or derogatory language used by one person to describe another constitutes the
tort of slander.
Franchisors may be found liable for the wrongful conduct of their franchisees on an
apparent authority theory when the conduct of the franchisor creates an appearance of
authority.
The duties of officers of a corporation are generally set forth in the articles of
incorporation.
Arnold was the sole shareholder, president, and chief executive officer of Algernon
Enterprises, Inc. Acting on behalf of Algernon, Arnold negotiated the credit purchase of
inventory from Amax. The contract was signed in the name of Algernon Enterprises.
Algernon never paid the sums due on the contract, and Arnold and the corporation were
sued. Is Arnold personally liable to Amax?
A debtor must have rights in the collateral for a security interest to attach.
When one party commits a non-material breach of contract, the other party may rescind
the contract.
Proof of substantial impairment of the value of a contract to the buyer is required to
justify revocation of acceptance.
A gift is a free transfer of the title to property.
The interests of the less-developed nations of the world are represented by the United
Nations Conference on Trade and Development (UNCTAD).
If a buyer chooses to cover the substituted goods purchased must be substantially
identical to the contract goods.
The holder of a claim that is the subject of a bona fide dispute may be counted as a
petitioning creditor.
Reversible errors are commonly made by supreme courts.
Upon a seller’s tender of nonconforming goods and the buyer’s rejection of them, the
transaction has ended.
The United States Supreme Court generally has held that vertical merger agreements
should not automatically be condemned as an unlawful restraint of interstate commerce
merely because they create the potential to monopolize it.
Substantive law creates rights and duties.
An agent should never sign a contract using “by” or “per” and then his or her name.