Like domestic law, international law can be easily enforced, because international
courts have compulsory jurisdiction.
a. True
b. False
If a person with a mental condition that impairs her ability to act in a reasonable manner
enters a contract that is grossly unfair, the contract is voidable.
a. True
b. False
The Supreme Court has defined the scope of the Commerce Clause narrowly and,
therefore, has restricted the powers of the federal government to regulate business.
a. True
b. False
Sam owes $5,000 to the First National Bank for a student loan which will come due on
January 1 next year. He has been offered a two-year graduate fellowship, but he will not
be able to pay the loan back if he accepts the fellowship. The bank manager tells Sam
that if he pays $3,000 now, they will forgive the loan. Should Sam accept the offer?
a. No, because the bank can still sue for the remaining $2,000.
b. No, because the manager’s promise is not binding on the bank.
c. Yes, because the early payment of the loan is consideration that makes the bank’s
promise binding.
d. Yes, because the bank must do whatever the manager says.
A gratuitous agent has a duty of loyalty but is not liable for any harm caused by his
careless performance.
a. True
b. False
Most lemon laws define a lemon as a car that:
a. was sold by a dealer who refuses to make reasonable attempts to correct the problem.
b. continues to have a defect that substantially impairs its use, value, or safety, even
after the manufacturer has made reasonable attempts to correct the problem.
c. has been unpopular and so is sold at a discounted price.
d. a manufacturer must destroy so that it cannot be sold to other unsuspecting
consumers.
Article 2A authorizes liquidated damages payable by either party for default or any
other act or omission.
a. True
b. False
If an intervening cause is deemed to be a superseding cause, it does not relieve the
defendant of liability for that harm.
a. True
b. False
When the assignee gives consideration in exchange for an assignment, there is a
contract between the assignor and the assignee that prevents the assignor from revoking
the assignment without the assent of the assignee.
a. True
b. False
In which of the following types of cases can issues of accountant-client confidentiality
arise?
a. Civil litigation.
b. Criminal cases.
c. Tax cases.
d. All of these are situations where it can arise.
Which of the following is correct with regard to partnership property?
a. Like partnership capital, it is a fixed amount set forth in the articles of partnership.
b. Under the RUPA, there is a rebuttable presumption that unless a contrary intention
appears, property acquired with partnership funds is partnership property.
c. The RUPA sets forth two irrebuttable presumptions that apply when the partners did
not express their intent, one of which is that property acquired in the name of one of the
partners without an indication of her capacity as a partner and without use of
partnership funds is presumed to be that partners separate property.
d. If there is no express agreement whether property owned by a partner before
formation of the partnership and used in the partnership business is an asset of the
partnership, the fact that taxes, liens, and expenses have been paid by the partnership is
irrelevant.
All conversions are trespasses but not all trespasses are conversions.
a. True
b. False
Unless an auction is advertised or announced to be without reserve, when a bid is made
at an auction, it can be withdrawn if the auctioneer has not yet accepted the bid, because
the auctioneer has the power of acceptance.
a. True
b. False
The use of a sample or model is another means of creating an implied warranty.
a. True
b. False
Section 11 of the Securities Act of 1933 imposes liability on:
a. the issuer.
b. all persons who signed the registration statement.
c. every director or partner, and all underwriters.
d. All of these.
Robert and John entered into a bilateral contract and Robert has fully performed. Their
mutual rescission of the contract is binding at common law.
a. True
b. False
A right of redemption of a mortgage cannot be defeated by operation of law.
a. True
b. False
Breton owes Parkerson $750, which is due on June 1. Discuss the sufficiency of
consideration if Breton offers Parkerson: (a) $600 in full settlement on June 1 if the
debt is undisputed; (b) $600 in full settlement on April 10 if the debt is undisputed; and
(c) $500 on June 1 to settle the debt if the amount of the debt is validly disputed.
A majority, but not all, of the states impose a cash flow test on the payment of dividends
and other distributions.
a. True
b. False
A payor bank is required to dishonor an uncertified check that is more than six months
old.
a. True
b. False
Under the UPA, absent an agreement otherwise, upon dissolution, a partner is entitled to
which of the following after payment of partnership creditors?
a. A share of profits in proportion to his capital contribution.
b. Shares of profits dependent upon the capital and time he contributed to the
partnership.
c. Repayment of his loans to the partnership, capital contribution, and a share of the
profits.
d. The UPA requires that the partners have an agreement or else they must seek a court
order distributing the remaining assets.
Landlords are liable for injuries their tenants and others suffer as a result of any
criminal conduct of third parties on the leased premises.
a. True
b. False
The __________ is responsible for enforcing federal anti-discrimination laws.
a. OSHA
b. Social Security Administration
c. EEOC
d. NLRB
To protect the obligor or the public interest, some contract rights are not assignable.
a. True
b. False
Bob, the tax accountant, promises to do Marge’s individual federal, state, local, and gift
taxes for the year. He completes all but the gift taxes. Under the substantial
performance doctrine, Marge will:
a. not have to pay Bob.
b. not have to accept the work.
c. have to pay Bob for all but the gift taxes.
d. have to pay Bob the contract price.
The CEQ requires that federal agencies make environmental assessments that are major,
lengthy studies of potential environmental destruction.
a. True
b. False
Abco Corp. is building a new office tower. Ace Plumbing Supplies refuses to provide
plumbing materials on credit to the plumbing subcontractor on the building. Abco
promises Ace that it will pay for the materials if the subcontractor does not. Abco’s oral
promise is enforceable.
a. True
b. False
Article 6 of the Code does not:
a. apply to sales of goods in the ordinary course of business.
b. define “bulk transfer” as any transfer in bulk and not in the ordinary course of
business.
c. apply to merchants whose principal business is the sale of merchandise from stock.
d. include the transfer of a substantial part of equipment as a bulk transfer under any
circumstances.
e. All of the answers are correct.
The parol evidence rule is:
a. another term for the exclusionary rule.
b. a rule of construction.
c. a rule of interpretation.
d. a rule of substantive law.
The statute of frauds generally requires that both parties sign the writing.
a. True
b. False
The source of law best suited to making drastic or comprehensive change is:
a. common law.
b. the federal court system.
c. statutes.
d. state court decisions.
Which of the following remedies are mutually exclusive and could not be obtained
simultaneously?
a. Cover, incidental and consequential damages.
b. Identification of the goods and withholding delivery.
c. Withholding delivery and suit to recover incidental and consequential damages.
d. None of these. The Code’s remedies are cumulative unless under the facts of an
individual case one remedy bars another.
Rejection is ineffective unless the buyer notifies the seller.
a. True
b. False
The plaintiff must prove that the defendant’s negligent conduct proximately caused
harm to a legally protected interest in order to have a valid negligence action.
a. True
b. False