Book Title
Business Law with UCC Applications 14th Edition

BLAW 78423

March 1, 2019
If a law enforcement officer induces a law-abiding citizen to commit a crime that he or
she would not otherwise commit, entrapment may be used as a defense.
Robin orders merchandise from Internet Enterprises. If no delivery date is promised,
Internet must ship the merchandise within ten days.
The Securities and Exchange Commission (SEC) has been charged with investigating
how to regulate financial planners, including especially those planners who perform
income tax planning services.
If Small Co. uses a unique and unrecognized accounting method, it will—most likely—
be subject to an adverse opinion.
If a group of people act as if they are a corporation when in fact and in law they are not,
they have the right to deny that the corporation exists.
The U.S. federal court system is divided into 13 circuits.
The day grandpa died, he mailed a check to Cable Services to pay his cable T.V. bill. If
Grandpa's bank knows of his death, it cannot pay this check after his death.
Kin and Mai, through their lawyer, present an abbreviated version of their case to a jury
in a single day, and obtain an advisory verdict. This is a summary jury trial.
The national science court would have exclusive jurisdiction over issues involving
scientific, engineering, medical, and technological cases.
To be negotiable, an instrument must be in writing.
Equitable remedies are those that are imposed by the courts on innocent parties to
prevent them from taking advantage of the breach by deliberately raising the amount of
damages that the other party has to pay.
Once a corporation's board of directors declares a dividend, it becomes a corporate debt
and is enforceable by law.
A criminal statute that is obscure may be struck down by the court as void for
Under the Chapter 12 Fishing Business Debt Adjustment Act, the reorganizational plan
of the debtor must make certain that all priority claims, such as taxes and bankruptcy
costs, are paid in full.
An anticipatory breach occurs when a party to a contract expresses or clearly implies an
intention not to perform to contract, even before being required to act.
All state statutes specify that the death of a member triggers the dissolution of an LLC.
Kayla provides consideration when she gives up her right to sue in exchange for a
settlement payment.
A sprinkling trust has a built-in spendthrift provision.
A gift causa mortis can never be taken back by the donor.
Henry sends an e-mail to Bernice regarding the sale of his truck to her for a price "to be
determined in good faith." Henry has made a valid offer.
Jose, a victim of human rights abuses, may bring a case before the International Court
of Justice.
If an insured person becomes disabled, he or she will be excused from paying premiums
if he or she has purchased a waiver of premium option.
The World Bank works exclusively with the poorest nations in the international
State trial courts are known as limited jurisdiction courts.
Omar offers to sell a motorcycle to Adanne for $10,000. Adanne replies, "I will pay
$10,000 if you overhaul the engine." Adanne's reply conforms to the mirror image rule's
If Viva, who is 38, has low income, she automatically qualifies for Medicare, a
federally funded health insurance program.
Fraud in the inducement is a personal defense.
If Allan is a witness to his wife Cindy's will, Allan may not be able to inherit under
Cindy's will unless there are other witnesses.
By signing a nondisclosure agreement, an employee can be deprived of employment in
the future in certain geographical areas.
Gratuitous bailments occur when property is transferred to another person without
either party giving or asking for payment of any kind.
Article III of the U.S. Constitution gives executive power to the President.
An arbitration hearing can be planned and executed by the parties themselves.
Traditionally, a charitable pledge was not enforceable as a contractual obligation.
In a contract with a merchant for which no delivery is required, risk of loss passes to the
buyer when the buyer picks up the goods.
The Bankruptcy Code allows debtors to keep a maximum of $21,625 in equity in the
debtor's place of residence.
The drawer of a draft that has not been accepted is obligated to pay the draft to anyone
who is entitled to enforce it.
In 2012, Alder Inc. (seller) and Dell, Inc. (buyer) signed a long-term sales contract that
provided for cashier's check payments to be made by Dell on the first of each month. In
2015, Dell began using a wire transfer payment method, and now Alder asserts that Dell
is in breach of contract. Which of the following is true?
A. Dell cannot introduce oral evidence in court since it violates the parol evidence rule.
B. Dell can introduce evidence of the payment under the exception to the parol
evidence rule.
C. Dell violated the best evidence rule, hence cannot produce evidence in court.
D. Dell can exclude parol evidence because wire transfers and cashier's checks are
____________ refer(s) to the written application to the state for permission to form a
limited liability company.
A. Novation
B. Estoppel
C. Operating agreement
D. Articles of organization
Which of the following beneficiaries has no enforceable legal rights?
A. Donee beneficiary
B. Incidental beneficiary
C. Creditor beneficiary
D. Insurance beneficiary
Stanley falls into the low-income group. Which of the following health care plans can
Stanley opt for?
A. Medicaid
B. Long-term care insurance
C. Medicare
D. Mediclaim
Willy and Brogan, aged 16, enter into a written contract in which Brogan will sell his
horse to Willy for $250. Before the sale is finalized, Brogan seeks to be released from
the contract and wants to offer in-court oral testimony concerning his age. The
admission of Brogan's testimony is most likely governed by the
______________________ rule.
A. standard construction
B. best evidence
C. equal dignities
D. parol evidence
A(n) ____________ sexual harassment occurs when a ____________ requires that his
secretary trade sexual favors for a job promotion.
A. business necessity; supervisor
B. hostile environment; CEO
C. quid pro quo; supervisor
D. affirmative action; supervisor
Matrix, Inc. is the general contractor of a large commercial building project. Matrix
subcontracted with Acme Flooring, Inc. to have flooring installed throughout the
building. When Matrix failed to make payments to Acme as agreed, Acme stopped
working. Commercial Bank, the lender for the project, orally promised Acme that
Commercial would pay whatever Matrix failed to pay Acme if Acme would resume
work. Acme finished the flooring but was still not paid. Which of the following is true
under the Statute of Frauds?
A. According to the primary objective test, Commercial Bank is not obliged to pay
Acme as the promise must be written and signed.
B. According to the primary objective test, since Commercial Bank's promise enhanced
its mortgage interest, it is liable for payment to Acme.
C. According to the main purpose test, Commercial Bank is not obliged to pay to Acme
since Matrix was not a party to its promise.
D. According to the primary objective test, since Commercial Bank's promise did not
involve the actual lending of money it is not liable to Acme.
A(n) ____________ is an examination of the financial records of an organization to
determine whether the records are a fair representation of the actual financial health of
the organization.
A. audit
B. appraisal
C. review
D. dissolution
The just war theory's criterion of ____________ states that war can be initiated only by
legitimately recognized nation-states.
A. proportionality
B. just cause
C. right intention
D. competent authority
Peter lost control of his car and drove it though his neighbor Clyde's fence. If Clyde
were to bring a claim against Peter for the damage to the fence, what type of insurance
would Peter need to cover the damage?
A. Homeowner's insurance
B. Property damage liability insurance
C. Collision insurance
D. No-fault insurance
A proposal made by Braxton to his friend Mike, indicating a willingness to enter a
contract to buy Mike's old car for $4,000, fulfills the element of ____________ in
contract law.
A. capacity
B. consideration
C. mutual assent
D. legality
Agnes, a convenience store cashier, takes $5 out of the register for every $100 she rings
up and keeps it. Agnes could be arrested for:
A. extortion.
B. embezzlement.
C. burglary.
D. robbery.
A partner's ____________ is her share of the ___________ plus any ____________,
which is any remaining funds after dissolution.
A. vested property right; profits; surplus
B. economic interest; profits and losses; surplus
C. property; surplus; losses
D. economic interest; surplus; vested property rights
To make a case based on a(n) ____________, the employee must demonstrate that the
employer or a representative of the employer promised the employee job security
despite the apparent at-will nature of the employment relationship.
A. promissory estoppel
B. implied-in-fact contract
C. quasi-contract
D. in pari delicto
The United States Supreme Court does not have original jurisdiction in which of the
following cases?
A. Cases in which an ambassador is a party
B. Cases appealed from state supreme courts
C. Cases in which public ministers and consuls are parties
D. Cases in which a state is a party
Alvin has discovered how to duplicate subway fare cards, and has made several
hundreds of them with the intention of defrauding people. Which of the following
crimes has Alvin committed?
A. Larceny by false pretenses
B. Forgery
C. Embezzlement
D. Bribery
A ____________ is defined as a coalition of individual outsiders who do not necessarily
own stock, but can be affected by corporate decision making.
A. corporate director
B. special interest group
C. stakeholder
D. shareholder
To which type of transaction does the negative option rule apply?
A. Subscription to CD or DVD clubs that sends products on a regular basis and require
the consumer to opt out of the next shipment
B. Buying used cars
C. Subscription to telephone services
D. Buying goods via telephone or Internet
A(n) ____________ occurs when the ____________.
A. attachment; secured party does not sign a security agreement
B. securitization; debtor has no ownership rights in the collateral
C. attachment; secured party transfers something of value to the debtor
D. floating lien; secured party gives possession of the collateral
____________ demonstrates that "but for" the defendant's actions, the plaintiff would
not have been injured.
A. Proximate cause
B. Actual cause
C. Legal cause
D. The foreseeability test
Which of the following is true of consequential damages?
A. They result from a breach due to special circumstances that exist with a particular
B. They are the sum of money equal to the real financial loss suffered by the injured
C. They cover any expenses paid out by the innocent party to prevent further loss.
D. They are awarded as a measure of punishment for the defendant's wrongful acts.
The ____________ Act established a bill of rights for union workers.
A. Landrum-Griffin
B. Taft-Hartley
C. Clayton
D. Wagner
A contract negotiated by the employer and the labor union that covers all issues related
to employment is a(n):
A. option contract.
B. implied contract.
C. collective bargaining agreement.
D. confidentiality agreement.
Tyler has always had a "180 day full warranty" from Business Sales Company when
purchasing office equipment over the past five years. On this occasion, Tyler purchased
a big screen LED TV from Business Sales that broke thirty days after Tyler purchased
it. Business Sales asserts that it did not provide a 180 day full warranty on the TV and
has no legal liability. Which of the following is true of this situation?
A. Tyler cannot assert a warranty since Business Sales has not provided a full warranty
on the product.
B. Tyler may assert a warranty based upon past dealings with Business Sales.
C. Business Sales can escape liability by asserting that the defect was caused by the
D. Tyler can bring a suit against Business Sales and claim punitive damages.
Jess buys a microwave oven with a manufacturer's full one-year written warranty. If
Jess discovers that the microwave oven does not work properly during this time, the
manufacturer is obligated to:
A. charge Jess only for the cost of the parts replaced, not for the labor involved.
B. repair the microwave at a nominal cost to Jess.
C. provide a pro-rata credit for the defective part of the microwave.
D. fix or replace the microwave for free.
The doctrine of ____________ restricts a party from denying that a promise was made
under certain conditions, even though consideration has not been exchanged to bind an
A. enforceability
B. privity
C. Statute of Frauds
D. promissory estoppel
Personal defenses are defenses that can be used against:
A. natural persons, but not corporations.
B. a holder in due course of a negotiable instrument, but not a holder.
C. a holder, but not a holder in due course of a negotiable instrument.
D. any party with whom the holder in due course has dealt with.
If an instrument states, "Pay to the order of Karen Fuji or her assigns," it is payable to:
A. order.
B. cash.
C. bearer.
D. holder.
If Patsy finds a set of car keys on the floor of a cafeteria, most likely the keys are
____________ and Patsy ____________.
A. lost; keeps them while looking for the true owner
B. abandoned; should leave them with the cafeteria manager
C. stolen; should leave them with the cafeteria manager
D. misplaced; keeps them while looking for the true owner
Mashevida and Mei-Ling own a house as tenants in common. When Mei-Ling dies, her
share of the house:
A. passes to Mashevida.
B. passes to whomever the probate court designates.
C. passes to Mashevida's heirs.
D. escheats to the state in which the house is located.
A ____________ is designed to permit the ____________ of a plot of land to recover
____________ rights that have not been utilized by a purchaser of such rights for a long
period of time, usually longer than 20 years.
A. dormant minerals statute: lessor; mineral
B. dormant minerals statute; surface owner; mineral
C. fee simple defeasible; surface owner; mineral
D. lease agreement; lessor; minerals
Beth and Joan, both 15 years of age, enter into a written contract. In the contract, Beth
agrees to do Joan's math homework for two weeks for $50, and Joan agrees to pay Beth
at the end of the two-week period. This contract is:
A. implied-in-law.
B. void.
C. unenforceable.
D. voidable.
Requests for admissions:
A. are made to secure a statement from a party that a particular fact is true.
B. ask a party to undergo a physical or a mental examination.
C. are written questions that must be answered in writing, under oath, by the opposite
D. ask a party to produce documents, records, accounts, photographs, or other tangible
Tom enters a computer chat room attempting to contact children online with the
intention of taking illegal advantage of them. This e-crime is known as:
A. cyber-extortion.
B. cyber-spoofing.
C. cyber-stalking.
D. cyber-fraud.

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