Which section of the UCC defines what a merchant is?
A. 2-104(1)
B. 2-302
C. 2-305(2)
D. 2-306
Which of the following is true of the duty of agents to the principal?
A. The duty not to use or disclose confidential information terminates after the agency
ends.
B. When conducting the principal’s business, an agent can deal with himself.
C. Except for compensation, an agent should not profit from acting on behalf of the
principal.
D. A gratuitous agent does not have the same fiduciary duty as a paid agent.
Judge Blue is evaluating a case of professional negligence involving a claim against an
auditor. Where will Judge Blue look to determine what the ordinary standard of care is
for the auditing profession?
A. The auditing industry, in particular the GAAS or Generally Accepted Auditing
Standards and any other standards the industry has implemented.
B. The United States Department of Labor.
C. The Secretary of State office in the state where the business is incorporated.
D. The shareholders of the corporation in questioned.
Which of the following statements, if false, is most likely to create liability for fraud or
misrepresentation?
A. “This rare antique chair probably is worth $10,000.”
B. “This crane will lift a 10,000-pound load.”
C. “This car is a perfect gem.”
D. “In my opinion, this car is in flawless mechanical condition.”
The goods required for the performance of a contract are destroyed without fault of
either party prior to the time that the risk of loss passed to the buyer. In this case,
A. the contract cannot be cancelled.
B. the contract is voided.
C. the seller will not be excused.
D. the seller has to make good for the loss.
The _____ requires partners to undertake their share of responsibility for running the
day-to-day operations of the partnership business.
A. duty to act within actual authority
B. duty to serve
C. duty of care
D. duty to account
Three friends (Mr. Blue, Mr. Green & Mr. Yellow) go on a hunt for a brown bear. Mr.
Blue organized the hunt. All three hunters saw a brown bear. Mr. Blue fired but missed.
Mr. Yellow fired and was first to hit the bear, but only wounded the bear. Mr. Green
fired and killed the bear. Who owns the dead bear?
A. Mr. Blue
B. Mr. Green
C. Mr. Yellow
D. All three hunters
A _____ is oral in nature.
A. nuncupative will
B. holographic will
C. notarial will
D. self-proved will
State X has a “Sunday Closing Law” making it a crime to operate a retail business on
Sundays. The law’s legislative history reveals that it was enacted to promote respect for
the Sabbath by all the people of the state, and thus to promote public decency and
morality. One Sunday, Judy Smith slips on a puddle of spilled soft drink at Joe’s
Hamburger joint (which is operating in violation of the statute), and suffers an injury to
her spine. The soft drink would not have been spilled if the store had not been open on
Sunday. Judy sues Joe in negligence. One part of her complaint relies on the doctrine of
negligence per se. Under the doctrine of negligence per se:
A. Judy will recover because the spilled drink posed a reasonably foreseeable risk of
harm, and Joe failed to eliminate that risk.
B. Judy will recover because Joe violated the Sunday Closing Law.
C. Judy will not recover because she was not within the class of persons intended to be
protected by the statute.
D. Judy will not recover because she did not suffer harm of a kind that the statute was
intended to protect against.
To prove his/her due diligence defense under Securities Act Section 11 with regard to
audited financial statements, an officer of the issuer must prove which of the following?
A. The officer made a reasonable investigation into the accuracy of the audited financial
statements.
B. The officer believed the financial statements did not omit or misstate a material fact.
C. The officer had no intent to misstate or omit a material fact in the audited financial
statements.
D. The officer had no reason to believe the financial statements omitted or misstated a
material fact.
Which of the following is true of price terms in dispute in a contract?
A. A fixed price term is essential for a binding sales contract.
B. Price terms cannot be determined at a future date.
C. No contract is created if price terms are not agreed on.
D. A contract is void if price terms are omitted.
A defendant’s act must have been prohibited by statute at the time he/she committed it
and the penalty imposed must be the one provided for at the time of his/her offense.
This essentially indicates:
A. encouragement of deterrence laws.
B. the presence of nulla poena sine lege laws.
C. prohibition of ex post facto criminal laws.
D. the presence of retributive justice.
An obligor:
A. owes a duty to perform under a contract.
B. is owed a duty.
C. is one to whom a right has been transferred.
D. facilitates a contract.
Which of the following independent checks blocks only state laws and not federal laws?
A. Equal protection
B. The First Amendment
C. Federal preemption
D. Due process
If no agreement is made on the place where the goods will be delivered, then the goods
are to be delivered at:
A. a neutral location.
B. the buyer’s place of business.
C. the buyer’s warehouse.
D. the seller’s place of business.
Tennessee-Alabama Fireworks Company (TAF) is incorporated in Tennessee. It
maintains year-round retail stores in Tennessee and Alabama. It also sells fireworks to
individual consumers at a gas station parking lot in Indiana for a period of 20 days
before the Fourth of July. Must TAF qualify to do business in Indiana?
Which form of damages involves a court ordering a party to a contract to perform
his/her obligations under the contract?
A. Quasi-contract
B. Specific performance
C. Rescission
D. Promissory estoppel
What is the main aim of commercial torts?
A. To enable product creation for commercial purposes
B. To provide immunity in cases of fraud
C. To maintain standards of commercial morality
D. To ensure smoother commercial negotiations
Implied ratification arises when:
A. the principal’s conduct justifies a reasonable assumption that he consents to the
agent’s act.
B. the principal manifests assent that his legal relations be affected.
C. the third party withdraws from the contract before the principal manifests assent.
D. the principal binds himself to an unauthorized or illegal act done by an agent.
Which of the following is a market share factor that federal regulators consider when
determining the legality of horizontal mergers?
A. The probability of increasing concentration in the relevant market.
B. The prior conduct of the acquiring firm and the acquired firm.
C. The existence of barriers to the entry of new competitors into the relevant market.
D. The probable future competitive strength of the acquired firm.
Assuming that the economic condition of the country is progressing, Peter entered into
a contract with John for the sale of substantial amount of shares of his company for
consideration of $1,000,000. However, due to a slump in the market in the next few
months, Peter lost heavily. This would lead to:
A. avoidance of the contract.
B. enforcement of the contract.
C. rescission of the contract.
D. reformation of the contract.
A contract is _____ when all of the parties have fully performed their contractual duties.
A. void
B. executed
C. contingent
D. ineffective
Many courts have adopted a test in resolving the proximate cause question, under which
a defendant who has breached a duty of care is liable:
A. only for the “natural and probable consequences” of his actions.
B. for all injuries sustained by the plaintiff.
C. even for injuries caused by the plaintiff’s negligence.
D. for at least 50 percent of the damages.
On August 1, Neptune Fisheries contracted in writing with West Markets to deliver to
West 3,000 pounds of lobsters at $4 a pound. Delivery of the lobsters was due October
1 with payment due November 1. On August 4, Neptune entered into a contract with
Deep Sea Lobster Farms which provided as follows: “Neptune Fisheries assigns all the
rights under the contract with West Markets dated August 1 to Deep Sea Lobster
Farms.” The best interpretation of the August 4 contract would be that it was:
A. only an assignment of rights by Neptune.
B. only a delegation of duties by Neptune.
C. an assignment of rights and a delegation of duties by Neptune.
D. an unenforceable third-party beneficiary contract.
Once an assignment occurs, the assignee acquires:
A. greater obligations to fulfill the contract.
B. greater rights than the assignor.
C. same rights as the assignor had prior to assignment.
D. no rights at all.
A seller’s ability to disclaim implied warranties is sometimes restricted by the doctrine
of:
A. unconscionability.
B. remedy limitation.
C. no-privity.
D. commercial impracticability.
Which of the following parties enter a land without its possessor’s consent and without
any other privilege?
A. Invitees
B. Trespassers
C. Guests
D. Licensees
_____ authority exists because it seems reasonable to a third party that a partner has
authority to do an act.
A. Fixed
B. Express
C. Apparent
D. Actual
_____ established an 80-day cooling-off period for strikes that the president finds likely
to endanger national safety or health.
A. The Norris-LaGuardia Act
B. The Wagner Act
C. The Taft-Hartley Act
D. The Landrum-Griffin Act
_____ are legal reasons for avoiding or reducing liability of an individual who is liable
on a negotiable instrument.
A. Personal defenses
B. Procedural defenses
C. Real defenses
D. Excuse defenses