Able Co. entered into a contract with Baker Co. for the sale of goods. Both parties are
merchants under the UCC and each party used its own form as an offer and acceptance.
On the reverse of each form, there were minor terms that conflicted with each other.
What is impact of these minor differences in terms in the forms on the contract?
A. There is no contract here because there is a discrepancy between the standard forms
used by the two companies.
B. There is no contract here because there is no “meeting of the minds.”
C. A contract does exist and is favorable to the third party beneficiaries who can take
advantage of the situation.
D. A contract does exist and it includes the terms agreed upon plus gap-fillers from the
UCC.
Abyss handed over a $500 check to Howard Brothers for building him a terrace garden.
The next day, Abyss notices that one part of the garden has not been finished. He calls
his bank to order a stop-payment on the check. When Howard Brothers presents the
check next week, the bank honors it. Which of the following is true in this case?
A. Since Abyss did not give the bank enough time to process a stop-payment order, the
bank is not liable for this loss.
B. The bank is liable to recredit Abyss’s account, since Abyss has suffered a loss by the
bank’s payment.
C. Abyss will not be able to show that he sustained any losses, hence cannot have his
account recredited.
D. The bank is not liable for honoring any checks in good faith that are signed by the
drawer-depositor.
Hagus was a partner at Ace-Star General partnership. The partnership agreement stated
that all partners would continue as partners until the year 2010. However, in 2006,
Hagus was offered another business opportunity that was more attractive than
remaining a partner with Ace-Star. Following this, he dissociated himself from
Ace-Star. Which of the following is true with regard to this situation?
A. Hagus dissolved the Ace-Star General partnership.
B. Hagus used his power to dissociate to withdraw from the partnership.
C. Hagus eliminated his liability to the partnership obligations.
D. Hagus used his right to dissociate to withdraw from the partnership.
Which of the following circumstances is a valid reason for the delay of a lawsuit once
the statutory period is over?
A. Illegality of the contract
B. Change of mind of the nonbreaching party
C. Minority of the nonbreaching party
D. Addition of a third party
In a partnership, partners may not compete against their own partnership unless:
A. they do not monetarily benefit from their competing venture.
B. they have been granted the apparent authority to do so.
C. they obtain consent from other partners.
D. they play the role of silent partners.
A check is NOT negotiable if it:
A. reads “Pay Kim Turner.”
B. states that it is payable only on a certain condition.
C. is signed with a rubber-stamped signature.
D. is issued by a drawer who lacks capacity to contract.
The “confirmatory memorandum” exception to the UCC’s statute of frauds provision:
A. requires that the memorandum be signed by the party to be bound.
B. requires that the memorandum be sent within ten days after the contract is made.
C. applies even though the memorandum does not satisfy the UCC’s writing
requirement.
D. requires that both parties to the contract be merchants.
The Model Business Corporation Act (MBCA) does not recognize:
A. mergers.
B. acquisitions.
C. consolidations.
D. joint ventures.
Which of the following is true of a revocation?
A. The power of revocation of an offer lies with the offeree.
B. Death or insanity cannot be reasons for revocation.
C. Promissory estoppels are used to prevent revocations.
D. Offers that fail to state a specified time period are considered invalid.
Which of the following is NOT true about the management powers of partners?
A. A partner whose name is not on the signature card filed with the bank does not have
apparent authority to issue checks.
B. A partner’s knowledge of material information relating to partnership affairs is
imputed to the partnership.
C. A partner has implied and apparent authority to indorse and cash checks drawn
payable to the order of the partnership.
D. A partner who has the authority to borrow money also has authority to issue
negotiable instruments.
Fiona owed Lutz $5,000. As the result of an unrelated transaction, Lutz owed Bing that
same amount. The three parties signed an agreement that Fiona would pay Bing instead
of Lutz and Lutz would be discharged from all liability. The agreement among the
parties is:
A. unenforceable for lack of consideration.
B. voidable at Bing’s option.
C. an accord and satisfaction.
D. a novation.
Joe is the owner of the restaurant “Yummy Bites.” Neil is an employee of a competitor’s
restaurant “Mom’s Kitchen.” Joe pays Neil $1000 to obtain recipes from “Mom’s
Kitchen.” However later, Joe has second thoughts and forbids Neil to obtain such
recipes. Joe wants to get his money back. Identify the most accurate statement that
might help Joe.
A. Joe can recover the amount because he has rescinded the contract before any illegal
act has been done by Neil.
B. Joe cannot recover the amount because he has entered into an illegal contract.
C. Joe cannot recover the amount because such contracts are unenforceable and illegal.
D. Joe can recover the amount because the contract between him and Neil is a
quasi-contract.
A dissociated limited partner:
A. retains his right to receive profits.
B. retains his right to vote as a limited partner.
C. loses his limited liability status.
D. retains his managerial powers.
Which of the following statements is true of statutes and statutory interpretation?
A. Statutes are easier to interpret than case law.
B. Courts begin their interpretation statues with legislative history.
C. There is deliberate ambiguity in the language of statutes.
D. Statutes are generally interpreted on the
Darwin, a college student leased a flat for 15 months which was to terminate in
December 2009. Meanwhile he had to go to New Jersey for a project, so he sublet his
flat to a friend. It means that:
A. Darwin is not liable to the original owner anymore.
B. Darwin has not transferred his remaining rights to his friend.
C. Darwin has performed an illegal act.
D. Darwin has actually performed an assignment.
Rachel was jogging when she slipped and fell on the jogging track and her diamond
bracelet fell off her hand. She got and up resumed her jog, unaware of what had
happened. A little later, Judy came jogging on the same track and discovered the
bracelet. Which of the following is true of the case?
A. The bracelet is lost property that Judy can hold until the owner claims it.
B. The bracelet is abandoned property.
C. The bracelet has two rightful owners.
D. The bracelet now belongs to the local authorities.
Mark filed a financing statement on Daniel’s collateral on March 2. However,
attachment of this interest did not occur until March 4. Meanwhile, Charles, who had
attached a security interest on the same collateral on March 1, filed a financing
statement on March 3. Which interest has priority and why?
A. Mark’s interest has priority because he filed the security before Charles did.
B. Charles’ interest has priority because he attached the security first.
C. Mark’s interest has priority because his attaching was the latest.
D. Charles’ interest has priority because his filing was the latest.
Proof of aiding and abetting another person’s securities violation is not sufficient
misconduct to overcome the privity requirement of Securities Act Section 12(a)(2).
Which of the following is the starting point in calculating the compensatory damages
that the plaintiff had the right to expect?
A. Loss in value of performance
B. Loss in value of the contract
C. Time taken for the performance
D. Delay from the expected time of performance
The Fourth Amendment to the U.S. Constitution:
A. protects persons against all searches and seizures.
B. provides protection to places or items as to which the Court found no reasonable
expectations of privacy such as open fields and personal bank records.
C. provides protection to matters such as voluntary conversations between criminal
defendants and government informants.
D. protects persons against arbitrary and unreasonable governmental violations of their
privacy rights.
As commonly occurs, a(n) _____ may be the sole general partner of a limited
partnership.
A. association
B. natural person
C. corporation
D. trust
Homer and Marge bought Blueacres as tenants in common with equal shares of
ownership. One year later, Homer died, leaving a will in which he left his interest in
Blueacres to his son, Bart. Under these circumstances:
A. Marge will acquire complete ownership of the property.
B. Marge and Bart own the property as tenants in common.
C. Bart will be considered Marge’s tenant on rent.
D. Marge and Bart are co-owners, but Marge has the right to exclusive possession.
Big Corp. (BC) operated in all 50 states. In all the states except Oregon, BC was the
dominant firm in its industry. Small Corp. (SC) operated only in Oregon, but was the
dominant firm in that state. BC decided it wanted to destroy SC so that it would become
dominant in Oregon. BC cut its prices and sold below cost in Oregon, while
maintaining regular prices everywhere else. This is an example of:
A. first-line price discrimination
B. secondary level price discrimination
C. tertiary level price discrimination
D. super-tertiary level price discrimination
Which of the following characterizes false imprisonment?
A. Unintentional confinement of a person with consent
B. Partial confinement of a person by blocking an exit, when several exist
C. Intentional confinement of a person with consent
D. Unfounded assertion of legal authority to detain a person
A seller who has a _____ has the power to pass good title to a good faith purchaser for
value.
A. good faith title
B. voidable title
C. lease title
D. lease deed
Generally courts interpret ambiguities in the insurance clauses against the:
A. insurer.
B. insured.
C. owner.
D. lesser.
Gift promises are not generally enforceable because they lack:
A. legality.
B. capacity.
C. consideration.
D. agreement.
A typewriter, which was subject to a prior UCC security interest, was delivered to Ed
Fogel for repair. Fogel, who is engaged in the business of repairing typewriters,
repaired the typewriter. However, the owner of the typewriter now refuses to pay for the
services performed by Fogel. The state in which Fogel operates his business has a
statute which gives Fogel a mechanics lien on the typewriter. Fogel’s mechanics lien:
A. takes priority over a prior perfected security interest under all circumstances.
B. is subject to a prior perfected purchase money security interest under all
circumstances.
C. is subject to a prior unperfected security interest where the statute is silent as to
priority.
D. takes priority over a prior perfected security interest unless the statute expressly
provides otherwise.
Which of the following elements establishes a case of duress?
A. An assertion was made with knowledge of its falsity.
B. There is an untrue assertion of a fact.
C. The contract was induced by improper threat.
D. There is a mistake about the basic assumption of the contract.
Under the UCC section 2-612 what may the seller offer to do if the goods shipped were
rejected due to nonconformity?
A. Replace the defective goods
B. Seek commercial arbitration of the dispute
C. Charge the buyer for the shipping and cost of remaking the goods
D. Refuse to take the defective goods back