A seller does not have to use words such as “warrant to make an express warranty.
a. True
b. False
Insurance is classified according to the amount of the payment on a claim.
a. True
b. False
An agency relationship can only be formed with a written agreement.
a. True
b. False
Gas Up, Inc., designs, makes, and sells a fuel injection system that copies Hybrid
Corporations design without Hybrids permis-sion. This is most likely
a. copyright infringement.
b. patent infringement.
c. trademark infringement.
d. a theft of trade secrets.
Instruments that say nothing about when payment is due are payable on demand.
a. True
b. False
Any criminal activity occurring via a computer in the virtual community of the Internet
is a cyber crime.
a. True
b. False
A tenant cannot withhold rent for any reason.
a. True
b. False
A security agreementmay provide for coverage of after-acquired property.
a. True
b. False
Richly Merchandise, Inc., contracts with Stand-Rite Contractors to build a store.
Stand-Rite assigns the contract to Town Builders, which has a poor record of
completing projects. Richly could most successfully argue that the con-tract cannot be
assigned because
a. Richly did not consent to the assignment.
b. Richly did not receive adequate consideration for the assignment.
c. the assignment will materially increase the risk of nonperformance.
d. Town Builders was not an original party to the deal.
Squeaky Clean Corporation wants to make an offering of securities to the pub-lic. This
offering is not exempt from registration under the Se-curities Act of 1933. Before
Squeaky sells its securities, it must provide in-vestors with
a. a forward-looking financial forecast.
b. an investment contract.
c. a prospectus.
d. samples of its products.
A will is probated in part to establish its validity.
a. True
b. False
A bank may contractually shift to the customer the risk of forged checks created by the
use of facsimile or other nonmanual signatures.
a. True
b. False
Liu enters Mountain Triathlon, an athletic competition in which Liu has never
competed. Regarding the risk of injury, Liu assumes the risks
a. attributable to the triathlon in any way.
b. different from the risks normally associated with the triathlon.
c. greater than the risks normally associated with the triathlon.
d. normally associated with the triathlon.
The 1995 Federal Trademark Dilution Act allowed trademark owners to bring suit in
federal court for trademark dilution.
a. True
b. False
Big Drill Oil Company employees one hundred workers. Big Drill must do all of the
following except
a. keep occupational injury and illness records for each employee
b. report any work-related diseases directly to OSHA.
c. report any employee death due to a work-related incident to OSHA within eight
hours.
d. pay employees higher wages for working in more dangerous areas.
Sallys Sweet Fruits contracts with Fruits to You, Inc. for a delivery of two hundred
pounds of strawberries to be delivered by Keep Kool Trucking, a trucking company
with refrigerated trucks. On the day of delivery, the refrigeration units on Keep Kools
trucks are not working. Fruits to You
a. may ship the goods to Sallys using another trucking company with refrigerated
trucks.
b. must refund Sallys money and cancel the contract.
c. must wait to ship the strawberries until Keep Kool has fixed its trucks.
d. must ship the goods through a different carrier and pay Sally incidental damages.
Brad is an employee of Custodial Service, Inc. In deciding whether Brad acts within the
scope of his employment when he commits a tort against Didi, a court will not
con-sider whether
a. Brad was acting within the scope of the agency.
b. Brad was acting within the scope of his employment.
c. Custodial authorized the act.
d. Custodial was personally at fault.
Toby is an accountant whose clients include U-All Company. If Toby is negligent in his
work for U-All, most courts would hold him liable to U-All and
a. any third party.
b. no third party.
c. third parties who are foreseen users of the work.
d. third parties who are reasonably foresee-able users of the work.
Mikkayla is a well-known professional athlete. Mikkayla Co. owns trademarks,
including “mikkayla, that it uses to sell merchandise. Norm owns photos of Mikkayla
that he markets through his Web site, mikkalapics.com. Under the principles discussed
in “A Sample Court Case, Experience Hendrix, L.L.C. v. Hendrixlicensing.com Ltd.,
Norms domain name most likely
a. constitutes nominative fair use of the “mikkayla mark.
b. infringes the “mikkayla mark.
c. is a legitimate description of Mikkayla Co.s products.
d. is a legitimate reference to Mikkayla Co.s products.
Perfect Tone Phones, Inc., is a corporation. Perfect Tones implied powers enable it to
a. amend the articles of incorporation.
b. bring a derivative suit.
c. declare dividends.
d. borrow funds, lend funds, and extend credit.
Telfonix Corporation, a U.S. firm, and Adex, Inc., a British firm, are parties to a
contract with a forum-selection clause. The forum specified in the clause
a. must be within the geographic boundaries of the United States.
b. must be within the geographic boundaries of Britain.
c. need not be within the geographic boundaries of either party.
d. must be within the geographic boundaries of either the United States or Britain.
An exculpatory clause in an employment contract is not enforceable if it removes the
employers potential liability for injuries to employees.
a. True
b. False
Rolling Transport & Storage Corporation wants to insure its warehouse to obtain the
maximum possible recovery for the lowest possible pre-mium. To obtain the maximum
recovery under a coinsurance clause, the percentage of the value of the property that
should be insured is
a. 80 percent.
b. 90 percent.
c. 100 percent.
d. 120 percent.
Clerical Workers Union represents the employees of Miracle Medical Research
Company. The management of the firm refuses to bargain with the union over the hiring
of unnecessary workers. This violates
a. federal labor law.
b. state right-to-work laws.
c. federal employment discrimination law.
d. no federal or state law.
Lucille, an accountant, is subject to the ac-counting conventions, rules, and procedures
that constitute generally ac-cepted accounting principles (GAAP). GAAP are
determined by
a. the International Accounting Standards Board.
b. the American Bar Association.
c. the American Institute of Certified Public Accountants.
d. the Financial Accounting Standards Board.
Longway Trucking, Inc., files a suit against Midge, an accountant, under the antifraud
provisions of the Securities Exchange Act of 1934 and Rule 10b-5 of the Securities and
Exchange Commission. To succeed in recovering damages, Longway must show that
Midge
a. acted with scienter.
b. bought or sold a security.
c. is incompetent.
d. knows nothing about securities.
A director does not need to disclose any conflict of interest before voting on a proposal.
a. True
b. False
Big Beef, Inc. raises calves to sell. Big Beef breeds its cows in April, and the cows
calve in February of the following year. In January Andrea contracts with Big Beef to
buy fifty calves. Identification takes place in
a. January, when the contract is signed.
b. April, when the calves are conceived.
c. February, when the calves are born.
d. a reasonable period of time.
A bank may not pay any checks on a customers account after the date of the customers
death.
a. True
b. False
Fancys Feedlot orders one hundred sacks of cattle feed from Bovine Feeders, Inc. Each
bag has the words “Twenty percent protein printed on the front. This is
a. an express warranty.
b. an implied warranty.
c. a warranty of title.
d. puffery.
An instrument that states simply “I.O.U. is notnegotiable.
a. True
b. False
In defense against payment, an insurance company can raise any of the de-fenses that
would be valid in an ordinary action on a contract.
a. True
b. False
Portia owes Bon $500 on their contract, but refuses to pay. To collect, Bon files a
me-chanics lien, under which security for the debt is repre-sented by
a. Portias personal property.
b. Portias real estate.
c. the $500 owed under the contract.
d. the contract.