Ordinarily, a promise to perform an existing legal obligation is:
a. not consideration.
b. binding if the promisor promises to perform with extra care.
c. binding if the promisor promises to perform to suit the personal satisfaction of the
promisee.
d. binding if the promisee would experience substantial loss due to breach of the
promise.
The situation in which an individual impersonates the holder of a savings account and,
by presenting a forged withdrawal slip to the savings bank, receives from the bank a
check payable to the bank’s customer, is covered by the:
a. impostor rule.
b. negotiation rule.
c. assignment rule.
d. bank rule.
The duty of a seller to deliver imposes the obligation of:
a. making the goods available to the buyer.
b. transporting the goods to the business address of the buyer.
c. delivering the goods to a carrier for shipment to the buyer.
d. tendering the goods at the buyer’s residence if the buyer has no place of business.
If a maintenance employee at a hotel finds a pocketbook with $500 in cash while
cleaning an empty guest room, the employee:
a. is entitled to keep the property, because the employee has the legal status of a
“finder.”
b. must give the property to the manager of the hotel to be kept for the owner.
c. must place an advertisement in a local newspaper, and if the property is not claimed
within seven (7) business days, the employee is entitled to keep it.
d. can retain possession of the property until the owner establishes ownership.
When the filing of a financing statement is defective:
a. the security interest is lost.
b. the filing fails to perfect the security interest.
c. the security interest is perfected through the court’s application of equitable
principles.
d. none of the above.
A letter of credit usually sets a:
a. minimum money amount.
b. maximum money amount.
c. $500 money amount.
d. none of the above.
A discharge does not release a person from a consumer debt to a single creditor totaling
more than $5,550 for luxury goods or services if the debt was incurred within how
many days of the order for relief?
a. 90
b. 120
c. 180
d. 365
When a second contract is made between two parties:
a. the first contract between the parties is cancelled.
b. the second contract immediately and automatically displaces the first.
c. the intent of the parties will control the legal effect of the agreement.
d. the modifying contract must be in writing.
A person lacks contractual capacity if:
a. the person is a chronic alcoholic.
b. the person is a drug addict.
c. because of mental impairment, the person does not comprehend that a contract is
being made or understand its consequences.
d. all of the above.
Which of the following need not be included in writing to satisfy the Statute of Frauds
concerning a contract for the sale of securities?
a. the price of the shares
b. the terms of payment
c. the number of shares
d. the signature of the party disputing the agreement
A right is defined as:
a. an obligation.
b. a legal capacity to require another party to perform.
c. any written promise.
d. none of the above.
Legal principles expressed for the first time in court decisions are called:
a. statutory law.
b. stare decisis.
c. common law.
d. precedent.
Igor immigrated to the United States and sought to rent an apartment. Knowing little of
the English language and the neighborhoods of the city, Igor answered an advertisement
in a newspaper and signed a lease for an apartment without ever seeing the apartment.
After Igor received the keys and went to 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 improve.
c. most likely constitute a breach of the implied warranty of habitability.
d. do not entitle Igor to vacate the premises.
The policing of fraudulent advertising is entrusted to which of the following
administrative agencies?
a. IRS
b. FTC
c. UCCC
d. FDA
A president of a corporation does not have the authority to:
a. execute commercial paper in the corporation’s name.
b. mortgage a corporate property.
c. release a claim of the corporation.
d. perform any of the above acts.
Conspiracy means ____ committing a criminal act.
a. thinking about
b. an agreement aimed at
c. thinking with others about
d. all of the above
The most recent addition to the American governmental structure is the:
a. executive branch.
b. administrative agency.
c. judicial branch.
d. legislative branch.
Upon a default by a buyer, the secured seller may resell the collateral:
a. not less than three (3) months after the buyer’s default.
b. not less than six (6) months after the buyer’s default.
c. only at a public sale.
d. at either a public or a private sale.
Technology:
a. has not created situations that require the application of new rules of law.
b. has indeed created situations that require the application of new rules of law.
c. has done away with the right of privacy.
d. has made it easier to identify when one’s privacy has been invaded.
A violator of the Sherman Act may be subject to:
a. fine only.
b. imprisonment only.
c. fine, imprisonment, and injunction.
d. fine and imprisonment only.
Which of the following is not illegal?
a. an office football “pool” with a cash entry fee and cash prize
b. a raffle with an entry fee to win a car
c. a “giveaway” to every tenth person who buys meat at a butcher shop
d. a “giveaway” to every tenth person entering a department store
Under which of the following scenarios would a third person be able to successfully sue
a corporate manager if the manger’s advice to the corporation causes loss to the third
person?
a. The manager’s advice has resulted in the corporation’s successful underselling of the
third person’s product.
b. The manager’s advice has resulted in the corporation’s breach of a contract with the
third person under which the corporation was losing a substantial sum of money.
c. The manager’s advice has resulted in the corporation’s refusal to deal with the third
person because the third person has not maintained the standards and quotas set by the
corporation.
d. none of the above.
If a lost instrument is order paper, the finder __________.
a. becomes the assignee of the instrument.
b. becomes the owner of the instrument.
c. becomes the holder of the instrument.
d. does not become the holder of the instrument.
In antidumping cases:
a. The International Trade Administration determines whether foreign goods are being
sold in the United States at less than fair value (LTFV).
b. The International Trade Commission determines if there is an injury to a U.S.
industry as a result of such sales.
c. Remedial action will be taken only if findings of both LTFV sales and injury are
present.
d. All of the above
A __________ is authorized by the principal to handle a definite business transaction or
to do a specific act.
a. special
b. general
c. secret
d. universal
The legal relation that arises when one person delivers possession of personal property
to another under an express or implied agreement to return the property at a later date is
called a:
a. tenancy agreement.
b. bailment.
c. rental agreement.
d. trust arrangement.
The implied warranties of an unqualified indorser do not include a guarantee that:
a. payment of the instrument will be made.
b. the account of the drawer in the drawee bank contains funds sufficient to cover the
check.
c. both a. and b.
d. neither a. nor b.
Hostile work environment sexual harassment:
a. cannot be created by unwelcome sexual flirtation and propositions.
b. cannot result in an injunction being granted against offensive conduct.
c. occurs when a supervisor’s conduct does not affect an employee’s economic benefits,
but causes anxiety and “poisons” the work environment for the employee.
d. can result in the court ordering the business to be sold, upon proper notice, at a
publicly-held auction.
When a bailor sues the bailee for damages to the bailed property, who has the burden of
proving fault and that such fault was the proximate cause of the bailor’s loss?
a. the person in possession of the property
b. the bailor
c. the bailee
d. the jury
A corporation is liable to a third person for the act of its agent:
a. to the same extent as a natural person would be liable.
b. only if the agent was expressly authorized to perform the act.
c. only if the agent’s act was a crime.
d. only if the agent’s act was based on an intent to benefit the corporation.
State intestacy statutes commonly provide for distribution in the following order:
a. spouse, parents, lineals, collateral heirs.
b. spouse, lineals, collateral heirs, parents.
c. spouse and children, other lineals, parents, collateral heirs.
d. spouse and lineals equally, parents, collateral heirs.
Which of the following defenses will defeat a holder in due course?
a. fraud in the inducement
b. fraud as to the nature or essential terms of the paper
c. ordinary contract defenses
d. none of the above
In which case will performance on the exact date specified in the contract most likely
be deemed essential?
a. a sale of goods that fluctuate rapidly in value
b. a sale of goods that remain stable in value
c. a sale of real estate
d. a sale of goods where no harm results from a delay in performance
NAFTA seeks to eliminate tariffs among which countries?
a. all members of the United Nations
b. United States, Canada, and Mexico
c. United States and Japan
d. members of the common market
Which of the following parties has the power to bind an organization to a contract?
a. a soliciting agent for the organization
b. a contracting agent for the organization
c. a sales agent for the organization
d. none of the above.
If goods are specially manufactured and the buyer refuses to take them, it is possible for
the seller to recover as damages the full purchase price and keep the goods.
When a buyer makes a purchase without relying on the seller’s skill and judgment, no
warranty of fitness for a particular purpose exists.
Partnership agreements must always be in writing.
A dispute arose in a small factory and the workers decided to strike concerning the
firing of an employee for union-organizing activity. As the strike wore on without
resolution, the employer hired what the employer called permanent replacements for the
strikers. Eventually, the strike was settled. Are the fired workers entitled to getting their
jobs back?
A common barrier to the free movement of goods across borders is the tariff barrier.
When a contract falls within the statute of frauds, the signatures of both parties must be
shown to the court.
Generally, contracts are discharged by the performance of the terms of the contract.
For a deed to be effective, the grantee must clearly indicate, either expressly or by
conduct, an intention to accept the deed.
When a party refuses to perform a contract when the time for performance arises, an
anticipatory repudiation has occurred.
A negotiable instrument may be partly printed and partly typewritten.
Each shareholder owns a proportionate share of the property of the corporation.
A unilateral mistake as to a fact does not affect the contract when the mistake is
unknown to the other contracting party.
Joint tenancy and tenancy in common both feature the right of survivorship.
The Securities Exchange Act of 1934 is concerned with the secondary distribution of
securities in the national securities markets and in the over-the-counter markets.
Franchise disclosures are not required under federal law.