Today, what is an important element in determining the validity of a contract?
a. the Uniform Contract Code
b. whether the agreement might harm the public welfare
c. whether the contract is wise or foolish
d. whether the contract operates unequally between the parties
In most bilateral contracts, the performances of the parties are __________.
a. conditions precedent
b. conditions subsequent
c. recurrent conditions
d. concurrent conditions
Which is NOT a correct statement concerning a liquidated damages clause?
a. If the clause is enforced, the injured party can collect no more than the amount
specified.
b. If the clause is enforced, the injured party has a choice between compensatory
damages or liquidated damages.
c. It must be possible to determine actual damages.
d. The amount of liquidated damages are established by the parties to the contract.
The greatest changes to the written Constitution have been brought about by:
a. departure by treaty.
b. judicial interpretation.
c. constitutional amendment.
d. amendment by practice.
Without meaning to, Alice carelessly strikes Mary. Mary may be able to sue Alice for:
a. an intentional tort.
b. negligence.
c. strict liability
d. absolute liability.
ERISA establishes an insurance plan to protect employees when the employer goes out
of business. To provide this protection, the statute created a:
a. pension surety system.
b. Pension Benefit Guaranty Corporation.
c. Pension Accrual Compensation System.
d. bond system of payment.
A shareholder does not:
a. qualify as a member of the corporation.
b. own any specific property of the corporation.
c. have a fractional interest in the total property of the corporation.
d. all of the above.
Additional terms in acceptance of an offer for non-merchants:
a. automatically result in rejection of the offer.
b. forms a contract based on the original offer
c. forms a contract that includes the additional terms.
d. none of the above.
Examples of illusory promises include:
a. cancellation provisions.
b. apparent promises.
c. conditional obligations.
d. real obligations.
The issuer of a letter of credit:
a. is obligated to honor drafts drawn under the letter if the conditions specified in the
letter have been met.
b. has no duty to verify that the papers are properly supported by facts.
c. has no duty to verify that the underlying transaction has been performed.
d. all of the above.
Igor immigrated to the United States and sought to rent an apartment. He answered an
advertisement in a newspaper and signed a lease for an apartment without ever seeing
the apartment. Igor found the premises filled with an abundance of debris, rats and
insects. Also, the plumbing in the apartment was inoperable. These conditions:
a. do not affect the lease unless the landlord affirmatively warranted the condition of the
premises.
b. are the responsibility of the tenant to repair.
c. most likely constitute a breach of the implied warranty of habitability.
d. do not entitle Igor to vacate the premises.
When a buyer has possession of goods after rightfully rejecting them, the buyer is
treated:
a. the same as a seller in the possession of goods after default by a buyer.
b. as being strictly liable for the safety of the goods.
c. the same as if an entrustment had been created.
d. as an insurer of the goods until the seller retakes possession.
When a person makes a contract as an agent for another but lacks authority to do so, the
contract:
a. binds the principal but not the agent.
b. binds the principal and the agent.
c. does not bind the principal.
d. none of the above.
Probate is the act by which:
a. the court declares an instrument is a valid will.
b. a qualified person may contest the will.
c. the witnesses sign an attestation clause.
d. publication of the will takes place.
An accountant guilty of malpractice can be sued:
a. for breach of contract only.
b. for negligence only.
c. for breach of contract or for tort liability.
d. in federal court only if the suit is brought by a third person.
An investment contract exists if which of the following elements are present?
a. an investment of money
b. a common enterprise
c. an expectation of future profits
d. all of the above
The Lanham Act grants protection for:
a. marks.
b. patents.
c. copyrights.
d. trade secrets.
Unemployment compensation benefits probably will be denied:
a. when an employee’s theft of property results in termination.
b. to full-time students.
c. when an employee quits a job without cause.
d. all of the above.
The issuer of a letter of credit can revoke or modify the letter at any time without the
consent of the beneficiary, even if that right is not expressly reserved in the letter.
The rule of law imposing vicarious liability on an innocent employer for the wrong of
an employee is known as the doctrine of respondeat superior.
If the obligor is notified in any manner that there has been an assignment and that any
money due must be paid to the assignee, the obligor’s obligation can be discharged only
by making payment to the assignee.
Law is often defined as the body of principles that courts will enforce.
Herman hires Juanita as his accountant. Juanita commits negligence in preparing
financial statements for a business Herman owns. Several investors rely on the financial
statements and purchase shares of stock in the business. In a state that has adopted the
privity rule, what result?
The federal Consumer Credit Protection Act gives the debtor the right to rescind a
credit transaction within three (3) business days when the transaction would impose a
lien on the debtor’s home.
When a party who is not originally named in an instrument allows her name to be added
to it for the benefit of another party in order to add strength to the collectability of the
instrument, that party becomes a secondary obligor and assumes a liability role.
In 1976 the Federal Trade Commission adopted a rule that expands the rights of a
holder in due course in a consumer credit transaction.
When a surety pays a claim that it is obligated to pay, it automatically acquires the
claim and the rights of the creditor which is known as subrogation.
Ordinarily, each shareholder is entitled to one vote for each voting share.
The use of import quotas represents the most common form of tariff barrier.
The doctrine of promissory estoppel is also known as the doctrine of beneficial reliance.
The relationship between the franchisor and the franchisee is ordinarily an arm’s-length
employment relationship.
If a leased building is destroyed, the lease is not terminated, and the landlord has a duty
to restore the building to its former condition.
A creditor of an individual partner cannot proceed against any specific items of
partnership property, but can obtain a charging order against that partner’s interest in the
partnership.
Administrative agencies are not subject to the constitutional protections afforded
individuals and businesses.
A warehouse receipt is not considered a document of title.
If a plaintiff’s loss involves damaged property, it is described as liquidated damages.
Generally, the right to make a will is limited to persons 18 or older.