A divorce revokes an entire will.
a. True
b. False
If there is no definite period stated, a firm offer by a merchant is irrevocable without the
necessity of consideration for up to six months.
a. True
b. False
City Banks financing statement in collateral owned by Delta Waters Corporation will
expire in less than a year. Filed timely, a continuation statement could extend the
effectiveness of the financing statement for
a. one year.
b. two years.
c. five years.
d. ten years.
A gift is effective whether or not it is accepted.
a. True
b. False
Beachside Pools, Inc., agrees to build a swimming pool for Candy, but fails to build it
according to the contract specifications. Candy hires Do-We Fix-It Company to finish
the project. Candy may recover from Beachside
a. the contract price less costs of materials and labor.
b. the contract price.
c. the costs needed to complete construction.
d. profits plus the costs incurred up to the time of the breach.
Peter and Ray are riding their horses together. Peter jokingly tells Ray that Rays horse
is too slow. Ray laughs and jokingly responds “Yes, he is too slow! I would sell him for
$5! Peter hands Ray $5. This is
a. a valid acceptance because Peter gave Ray the money in a reasonable time.
b. a valid acceptance because there is consideration on both sides.
c. not a valid acceptance because Rays offer was made in jest.
d. not a valid acceptance because Rays horse is worth more than $5.
Ludwig receives from Milo a marimba stolen from Nadine. To be criminally liable,
Ludwig must know
a. Milo.
b. Nadine.
c. that the marimba is stolen and Ludwig must intend to keep it.
d. what a marimba is.
With respect to the potential for American Discount Stores, Inc., and any other major
corporation to suffer damage to its reputation or loss of profits through negative
publicity, the Internet has
a. increased the potential.
b. decreased the potential.
c. had no impact.
d. allowed a company to keep negative information or opinions hidden.
A merger and a consolidation are not two legally distinct proceedings.
a. True
b. False
ADR proceedings are always strictly regulated by federal statutes.
a. True
b. False
An easement arises when the owner of one piece of land occupies the real property of a
neighbor and eventually acquires title to it.
a. True
b. False
Refer to Fact Pattern 18-2. Toms bank is
a. the cashing bank.
b. the depositary bank.
c. the intermediary bank.
d. the payor bank.
An offer to form a bilateral contract is accepted only by promising to perform the
contract performance.
a. True
b. False
Clarice pays Damien $10,000 to design an ad campaign for her Sweetwater Coffee
Stand chain. The next day, Damien tells Clarice that he has accepted a job in New York
and cannot design her campaign. She files a suit against Damien. As compensatory
damages, she can recover
a. $100,000.
b. $10,000.
c. $1,000.
d. $0.
Mallorys sister gives Mallory a leather working kit for Christmas. Mallory uses the kit
to make a saddle. Mallorys acquisition of the saddle is by
a. a bailment.
b. accession
c. confusion.
d. production.
If property is owned as community property, each spouse owns an undivided one-half
interest in it.
a. True
b. False
A loss sustained between the time of application and the delivery of an insurance policy
may not be covered.
a. True
b. False
The Bay City Planning Department, the Coastal County Zoning Commission, the
Delaware Environmental Quality Agency, and the U.S. Bureau of Land Management
issue regulations.These rules constitute
a. administrative law.
b. case law.
c. staredecisis.
d. statutory law.
Corporations, like persons, can be liable for crimes.
a. True
b. False
A novation requires the existence of a previous, valid obligation.
a. True
b. False
A check “payable to the order of bearer is neither an order instrument nor a bearer
instrument.
a. True
b. False
Genuine Seed Company and Hillside Farmers Cooperative enter into a contract for a
sale of hybrid seeds. Under the perfect tender rule, Genuine Seed must ship or tender
seeds to Hillside that
a. approximately conform to all of the details of the contract.
b. entirely conform to the contract except in one or two details.
c. exactly conform to the contract in every detail.
d. substantially conform to the contract in most details.
Sudan seizes the assets of Triage Medical, Inc., a U.S. firm. Triages recovery from
Sudan in a U.S. court may be prevented by
a. the act of state doctrine.
b. the doctrine of sovereign immunity.
c. the Foreign Corrupt Practices Act.
d. the principle of comity.
David, the chief accounting officer of Tension Fencing Corporation, wants to be sure
that all the companys accounts are legal and ethical. Sometimes, however, he is unsure
exactly what is legal and what is illegal. David should
a. not worry about what is legal or illegal as long as the corporate executives benefit in
the short run.
b. try his best to not do anything illegal and keep documentation showing that he
always acts in good faith.
c. not worry about what is legal or illegal as long as it benefits the shareholders.
d. not worry about what is legal or illegal as long as it benefits the chief executive of the
corporation.
Generally, Sports Fitness Club Company and other corporations can pay dividends if
a. the corporation can continue to pay its debts as they come due.
b. the amount of the dividends exceed the corporations net worth.
c. the shareholders approve.
d. the corporations assets equal its total liabilities.
Luke is an owner of Lucky Lukes Corporation. Luke uses the corporate entity of Lucky
Lukes to perpetuate fraud. In this case, a court is likely to expose Luke to personal
liability by
a. piercing the corporate veil.
b. issuing a de facto judgment.
c. issuing a de jure judgment.
d. issuing a ultra vires judgment.
If a seller is not a merchant, and the goods are not to be moved, the risk of loss passes
to a buyer on tender of delivery.
a. True
b. False
Marshall owns a piece of land, but James owns the mineral rights to Marshalls land.
James wishes to sell the mineral rights. James
a. cannot sell the mineral rights.
b. can only sell the mineral rights if Marshall agrees.
c. must give Marshall 30 percent of the proceeds of the sale of the mineral rights.
d. can sell the mineral rights without consulting Marshall.
Wilson owes Shelby $5,000 for repairs on Wilsons Bobcat Skidsteer. Wilson has
financial troubles and he and Shelby sign an accord, in which Wilson promises to pay
$4,000 and give Shelby his mountain bike within thirty days instead of the $5,000.
Wilsons delivery of the bike and $4,000 to Shelby is
a. an accord.
b. satisfaction.
c. substantial performance.
d. novation.
Embezzlement can be committed only by physically taking property from the
possession of another.
a. True
b. False
A principal is not liable on any contract made by the agent acting outside the scope of
his or her authority.
a. True
b. False
It is illegal for two parties to mutually agree to rescind a valid contract.
a. True
b. False
Rubin writes a check drawn on his account at Clearwater Bank and payable to the order
of Gwyn. The bank does not pay the check. Rubin is
a. absolved of liability on the check.
b. liable to Gwyn for the amount of the check.
c. liable to the bank for the amount of the check.
d. entitled to payment of the amount of the check from Gwyn.
RingTone Corporation is a public company whose securities are traded among
investors. Under the Securities Act of 1933, a security is
a. almost any stake in the ownership or debt of a company.
b. an investment that is guaranteed to make a profit.
c. only such common forms of debt and equity as bonds and stocks
d. whatever a company represents to the public as a security.
Pola and Quincey want to form and do business as River Tours Corporation. A
corporation can consist of
a. no natural persons.
b. one natural person but not more.
c. one or more natural persons.
d. only more than one natural person.