Which of the following is untrue with regard to the interpretation of contracts?
a. Express terms prevail over course of performance, and course of performance
prevails over course of dealing.
b. Technical terms will always be given technical meaning and language that has a
commonly accepted meaning is always interpreted in accordance with that meaning.
c. Handwritten or typed terms are given greater weight than preprinted terms.
d. All writings that are part of the same transaction are interpreted together.
The legal issues inherent in domestic commercial contracts also arise in international
contracts.
a. True
b. False
Harvard philosopher John Rawls stressed liberty as the most important obligation owed
by a society to its members.
a. True
b. False
Powell falsely tells Dunagan that she is a member of the partnership of Morgan and
Stiles. Dunagan mentions this information to Trammell, who in reliance sells equipment
on credit to Morgan and Stiles. Trammell can hold Powell liable for the
misrepresentation.
a. True
b. False
The definition of “usage of trade” includes:
a. a sequence of previous conduct between the parties that may fairly be regarded as
establishing a common basis of understanding for interpreting their expressions and
agreement.
b. a practice regularly observed and followed in a place, vocation, or trade.
c. separation rules that apply to transactions between merchants.
d. All of these.
The Statutory Close Corporation Supplement has relaxed most of the nonessential
corporate formalities.
a. True
b. False
Some statutes permit the operating agreement of a limited liability company to deny
members the right to withdraw from the company.
a. True
b. False
To acquire the preferential rights of a holder in due course, a person either must meet
the requirements of the UCC or must inherit the rights under the shelter rule.
a. True
b. False
Characteristics of a common law system include which of the following?
a. A common law system relies heavily on comprehensive legislative enactments and an
inquisitorial system of determining disputes.
b. In a common law system, the judiciary initiates litigation, investigates pertinent facts,
and conducts the presentation of evidence.
c. The common law system prevails in most of Europe and Scotland.
d. A common law system relies heavily on the judiciary as a source of law and on the
adversary system for settling disputes.
Sid contracts to put new kitchen cabinets in Neds house. Sid repeatedly tries to install
the cabinets, but Ned does not grant him access to the house. In this case:
a. Ned is discharged from his duties under the contract because of material breach.
b. the frustration of purpose doctrine applies to discharge the contract.
c. Sid is discharged from his duties under the contract because Neds prevention of Sids
performance constitutes a material breach.
d. Both Sid and Ned are discharged from their duties because of impossibility of
performance.
A cashier’s check is a check drawn by a bank upon itself to the order of a named payee.
a. True
b. False
Which of the following best describes the manifest system?
a. It is the best available technology requirement as described in the Clean Air Act.
b. It is the national pollution policy as set forth in NEPA.
c. It is the registration system required by TSCA.
d. It is a form on which a generator certifies that the toxicity of waste has been reduced
to the greatest degree that is economically practicable.
States have authorized the formation of limited liability companies.
a. True
b. False
True cost-benefit analysis as a social theory,
a. only measures monetary gains and losses in making business decisions.
b. compares direct and indirect costs and benefits of program alternatives for meeting a
specific goal.
c. is another theory that judges persons’ actions by what those persons believe is right
for themselves.
d. emphasizes justice and a central moral authority.
(a) What is the purpose of the Freedom of Information Act?
(b) To what categories of records does the FOIA allow denial of access?
Shelf registrations allow issuers to register securities that are to be offered and sold on a
delayed or continuous basis in the future, but the provision allowing it does not apply to
all companies.
a. True
b. False
An auto designer chooses to devote his efforts to design an automobile that is the safest
vehicle possible. He does so because he wishes to save lives and prevent disabling
injuries. He believes he and his employer have a duty to provide the public with the
safest possible vehicle. The designer’s approach to ethical decision-making is best
characterized as:
a. utilitarian.
b. deontological.
c. ethically relative.
d. ethically fundamental.
Delivery alone is insufficient to negotiate an instrument when it is payable to:
a. order and the last indorsement is in blank.
b. cash and signed by the drawer.
c. bearer and is not indorsed.
d. the order of John Jones and is not indorsed.
Sam has agreed to sell a warehouse to Jordan for $150,000. The contract says that Sam
will convey to Jordan whatever interest he has in the property, but does not state that he
has any interest. Jordan is entitled to a(n):
a. insurable deed.
b. quitclaim deed.
c. general warranty deed.
d. special warranty deed.
An indorsement may be simple or complex.
a. True
b. False
Appellate judges can reverse a decision of the trial court:
a. where any error below is found.
b. only where there was a prejudicial error that substantially affected the appellants
rights and duties.
c. only where the outcome of the case is clearly wrong.
d. where the losing party desires a new trial.
A buyers incidental damages include reasonable expenses or commissions in effecting
cover.
a. True
b. False
The Restatements definition of a power given as security includes, but is more
extensive than, the rule regarding an agency coupled with an interest.
a. True
b. False
The Fair Debt Collection Practices Act defines all of the following practices as abusive,
EXCEPT:
a. unfair means to collect a debt.
b. falsely representing that a lawsuit is about to be filed.
c. telephoning the debtor at 8:00 a.m.
d. using obscene language.
Maria posted several signs in the neighborhood offering $50 for the return of her lost
cat. Dave calls to get a description of the cat and tells Maria, “I’ll look for your cat.” A
contract is formed by Dave’s call to Maria.
a. True
b. False
The Code provides that its remedies shall be liberally administered to place the
aggrieved party in a position as good as the one she would have occupied had the
defaulting party fully performed.
a. True
b. False
Phyllrox Co., a large manufacturer, purchased a forklift from Browns Equipment Co.
Phyllrox made a down payment in cash and signed a promissory note for $7,500. For
$7,200 Browns sold the note to Corporate Bank, who took it in good faith without
notice of any problems with it. After Phyllrox used the forklift for two weeks, it broke
down and could not be repaired. Phyllrox refuses to make any more payments to
Corporate Bank. In this case:
a. Phyllrox can assert the failure of the forklift as a defense to making payments to
Corporate Bank.
b. Corporate Bank is a holder in due course.
c. Both of these are correct.
d. Neither answer is correct.
The Check Clearing for the 21st Century Act requires banks to accept checks in
electronic form.
a. True
b. False
Under the UCC, the aggrieved party must choose one remedy to ask for and forfeit the
others.
a. True
b. False
An operating agreement is adopted by members of a limited liability company.
a. True
b. False
“Partnership property” is the sum of the partnerships assets, including all property
acquired by a partnership.
a. True
b. False
Negotiability is wholly a matter of form.
a. True
b. False
Wayne sells James a forklift, but retains a security interest in the equipment. Wayne no
longer has an insurable interest in the forklift since title has passed to James.
a. True
b. False