Which article of the UCC specifically addresses and governs leases of goods?
A. Article 3
B. Article 2
C. Article 2A
D. Article 4
Which of the following is true regarding the approach taken by the UCC toward the
proper means of acceptance and the implications of using it or not using it?
A. If the offer authorizes a certain means of acceptance, the offeree must use that means
or else there is no acceptance.
B. If the offer authorizes a certain means of acceptance and the offeree uses another
means, a contract is formed, but never before the offeror receives the acceptance.
C. Where the offer stipulates a certain means of acceptance, any reasonable means of
acceptance will create a contract.
D. The UCC does not change the traditional rule that, where the offer stipulates a
certain means of acceptance, the offeree must use that means or there is no contract.
Jack received a check as payment for the work he did. He indorsed the check “without
recourse.” What legal effect does this have?
A. The drawer of the check is discharged from primary liability on the check.
B. Jack is discharged from secondary liability on the check.
C. The drawer of the check is discharged from secondary liability on the check.
D. Jack is discharged from primary liability on the check.
Milner Developers proposed an offer to Henry Wright, an independent contractor,
offering to hire him for their next project. They offered him a certain rate and specified
the contract details along with describing the stipulated mode of acceptance but
received no response. Wright responded to the offer after a delay of two months with a
quote for a higher amount than that mentioned by Milner Developers. Do the two
parties have a binding contract?
A. No, because the offer made by Milner Developers was ambiguous.
B. No, because Wright’s letter was a counteroffer to the original offer.
C. Yes, because Milner Developers did receive a response from Wright.
D. Yes, because Wright’s silent signaled his acceptance of the offer.
Paul is hired by Soprano as a security guard. At the time of hiring, Paul signs an
agreement that relieves Soprano from workers’ compensation liability. This agreement
is most likely:
A. enforceable because Paul and Soprano have equal bargaining power.
B. unenforceable because it includes intentional torts.
C. enforceable so long as the terms of the agreement are conspicuously disclosed.
D. unenforceable as a violation of public policy.
Which of the following lets courts help parties determine their rights and duties even
though neither may yet have been harmed, so long as there is a real case or controversy
between them?
A. No liability outside privity of contract rule
B. Ejusdem generis
C. A declaratory judgment statute
D. Public law
_____ is generally taken to mean the absence of meaningful choice together with terms
unreasonably advantageous to one of the parties.
A. Unconscionability
B. Illegality
C. Adhesion
D. Rescission
Which of the following is true regarding an indorser’s liability on a note?
A. A holder can proceed directly against the indorser without first presenting the note to
the maker.
B. A qualified indorsement by the indorser will not disclaim liability against a holder
who takes it in good faith and for value.
C. For the indorser to be liable, there must be presentment to the maker, dishonor by the
maker, and notice to the indorser.
D. For the indorser to be liable, there need only be presentment to the maker and
dishonor by the maker.
According to the 2005 revisions of the Bankruptcy Code:
A. any eviction proceedings in which the landlord obtained a judgment of possession
prior to the filing of the bankruptcy petition can be continued.
B. any eviction proceedings in which the landlord obtained a judgment of abandonment
prior to the filing of the bankruptcy petition can be continued.
C. any eviction proceedings in which the landlord obtained a judgment of defeasance
prior to the filing of the bankruptcy petition can be continued.
D. any eviction proceedings in which the landlord obtained a judgment of vicarious
liability prior to the filing of the bankruptcy petition can be continued.
In which of the following situations is an instrument termed as overdue?
A. Where a check was made out 60 days ago.
B. Where there is a default in payment of interest on a note, but not in the payment of
the principle.
C. Where the principal on a note is due in installments and an installment has not been
paid.
D. Where a note dated January 1 is payable “30 days after date” and is paid on January
31.
The National Priority List was drawn by the EPA with reference to which of the
following statutes?
A. Comprehensive Environmental Response Compensation and Liability Act
B. Resource Conservation and Recovery Act
C. Resource Recovery Act
D. Toxic Substances Control Act
Under the Comprehensive Environmental Response, Compensation, and Liability Act
(CERCLA), commonly known as the Superfund law, EPA identified and assessed the
sites in the United States where hazardous wastes had been spilled, stored, or
abandoned. The sites are ranked on the basis of the type, quantity, and toxicity of the
wastes; the number of people potentially exposed to the wastes; the different ways (e.g.,
in the air or drinking water) in which they might be exposed; the risks to contamination
of aquifers; and other factors. The sites with the highest ranking are put on the National
Priority List to receive priority federal and/or state attention for cleanup.
What is the term for bodily injury that can be recovered in a negligence action?
A. Personal Injury
B. Contract Injury
C. Future damages
D. Consequential damages
Which of the following is true regarding the principle of separation of powers?
A. The Constitution seeks to ensure that governmental power remains accountable to
the public will.
B. The congressional delegation of legislative power to an agency in its enabling
legislation may never be challenged.
C. Congress is allowed to create an administrative agency only if Congress, rather than
the President, will appoint the commissioners or board members of the agency.
D. The President can allow the Supreme Court to overturn very broad delegation of
power to administrative agencies.
Arthur borrows a new pair of stereo speakers from Jim, his classmate, who stays in the
campus hostel. After about a week, he goes to the hostel and leaves the speakers with
Ryan, who lives on the floor adjacent to Jim’s, asking him to give them to Jim. Ryan
forgets to do so and loses the speakers. In such a situation:
A. Ryan is liable to Jim; he should have been more careful.
B. Arthur is liable to Jim; he is the bailee.
C. Jim is not liable to anyone because he returned the speakers.
D. It was Jim’s responsibility to take the speakers back.
Which of the following factors is most likely to distinguish employees from
independent contractors?
A. Whether or not consideration is given by the principal for the agent’s performance
B. The principal’s right to control the manner and means of the agent’s performance
C. Whether the agent has authority to bind the principal by his actions
D. The agent’s personal liability for illegal actions taken on behalf of the principal
The National Cooperative Research Act (NCRA) that applies to joint research and
development ventures (JRDVs):
A. provides that treble damages may be recovered for losses flowing from a JRDV
ultimately found to be in violation of Section 1 of the Sherman Act.
B. requires firms contemplating a JRDV to provide the Department of Justice and the
Federal Trade Commission with advance notice of their intent to do so.
C. lacks provisions to allow the parties to a challenged JRDV to recover attorney’s fees
from an unsuccessful challenger.
D. requires application of a per se rule, rather than a reasonableness standard, when a
JRDV’s legality is determined.
A _____ indorsement can be used with either a blank indorsement or a special
indorsement.
A. rebuttal
B. conditional
C. qualified
D. restrictive
The Model Business Corporation Act (MBCA) was prepared and authorized by the:
A. federal government.
B. state governments, acting together.
C. state governments, acting separately.
D. American Bar Association’s Committee on Corporate Laws.
Which statement about the statute of frauds is true?
A. All contracts must be in writing in order to be enforced.
B. Contracts for the sale of goods for $500 or more must be in writing in order to be
enforced.
C. Contracts for the sale of land for $500 or more must be in writing in order to be
enforced.
D. All employment contracts must be in writing in order to be enforced.
Which of the following is included in the articles of incorporation?
A. The number of shares a corporation is authorized to issue.
B. The standards for declaring dividends.
C. The procedures for calling special meetings of shareholders.
D. The procedures for maintenance of share records.
A sole proprietorship lasts for how long if it continues to run unabated?
A. For 100 years
B. 10 years with an option to renew for another 10 years
C. Till the death of the owner
D. 30 years then the business has to be reformed
A means by which insurance law separates insurance contracts from wagering contracts
is the typical requirement that the party who purchases a policy of property or life
insurance must possess a(n) _____ in the property or life being insured.
A. warranty
B. codicil
C. reformation
D. insurable interest
An instrument that is indorsed with a _____ indorsement remains “order paper.”
A. special
B. blank
C. restrictive
D. conditional
Which of the following is true about the Williams Act?
A. It regulates tender offers only when the bidder intends to hold at least 2 percent of
the subject company’s shares.
B. It requires bidders to solicit shares from at least 100 shareholders.
C. It does not permit tendering shareholders to withdraw their tendered shares.
D. The aim of the Williams Act is to protect investors and to give the bidder and the
subject company equal opportunities to present their cases to the shareholder.
Sklar, CPA, purchased from Wiz Corp. two computers. Sklar discovered material
defects in the computers 10 months after taking delivery. Three years after discovering
the defects, Sklar commenced an action for breach of warranty against Wiz. Wiz has
raised the statute of limitations as a defense. The original contract between Wiz and
Sklar contained a conspicuous clause providing that the statute of limitations for breach
of warranty actions would be limited to 18 months. Under the circumstances, Sklar will:
A. win because the action was commenced within the four-year period as measured
from the date of delivery.
B. win because the action was commenced within the four-year period as measured
from the time he discovered the breach or should have discovered the breach.
C. lose because the clause providing that the statute of limitations would be limited to
18 months is enforceable.
D. lose because the statute of limitations is three years from the date of delivery with
respect to written contracts.
Amos, Beverly, Carlos, and Dan were partners in a partnership in which the agreement
states that the partnership will continue until 2010. Amos died in 2006. What vote of the
remaining partners is necessary to continue operating the partnership business?
A. A simple majority vote
B. A two-thirds majority vote
C. A three-quarters majority vote
D. A unanimous vote
According to UCC 2-315’s _____ for a particular purpose arises when the seller has
reason to know a particular purpose for which the buyer requires the goods.
A. express warranty
B. warranty of merchantability
C. implied warranty of fitness
D. multiple express warranties
Quick Corp. has $270,000 of outstanding accounts receivable. On March 10, 1988,
Quick assigned a $30,000 account receivable due from Pine, one of Quick’s customers,
to Taft Bank for value. On March 30, Pine paid Quick the $30,000. On April 5, Taft
notified Pine of the March 10 assignment from Quick to Taft. Who is Taft entitled to
collect the $30,000 from?
A. Either Quick Corp. or Pine
B. Quick Corp. only
C. Pine only
D. Taft Bank cannot claim any money because it notified Quick Corp. too late
Which of the following is protected by copyright laws in computer programs?
A. Organization
B. Structure
C. Source code
D. Presentation of information
Unemployment compensation is administered by _____.
A. the social security system
B. the states
C. the secretary of labor
D. the federal government
Article 9 of the UCC which governs secured transactions has been adopted in how
many states?
A. 50 states
B. 42 states
C. 23 states
D. 14 states
Austen Construction, a general contractor, advertised for bids from subcontractors on
the electrical work for the renovation of one of State University’s parking structures.
The advertisement announced that the contract will be awarded to the lowest
responsible bidder. Bronte, a responsible electrical subcontractor, submitted the lowest
bid to Austen for the electrical portion of the work. Austen informed Bronte that she
should begin work immediately. Bronte then stated that she is “withdrawing” her bid
from Austen. Which of the following statements is most accurate?
A. Austen should not rely on Bronte’s offer to do the electrical work.
B. Austen has accepted Bronte’s offer, thereby forming a contract.
C. Austen is not bound by Bronte’s bid until he informs her of his intent to accept.
D. Bronte has accepted Austen’s offer by submitting the lowest bid.
