Type
Quiz
Book Title
Business Law with UCC Applications 14th Edition
ISBN 13
978-0077733735

BLAW 95300

March 1, 2019
Under the UPA, a tenancy in partnership means a deceased partner's interest in real
property held by the partnership passed to the partner's surviving heirs.
When the insurance company gives up one of its rights to help the insured, the company
has made a waiver.
The doctrine of de facto corporations can be altered by the courts and by statutory law.
Sue is selling her home to Ben and wants to be released from her mortgage obligation
to Bigger Bank. Sue, Ben, and Bigger Bank may enter a novation.
If ABC Co. is to merge with XYZ Co., typically only a majority (51%) vote of the
shareholders will be required.
Negative rights derive from an outside source that has emerged within society.
Shareholder proposals are considered to be the strongest of all shareholder voting
tactics.
Johnny pays $600 for six months of automobile insurance. This payment is called the
policy.
The decisions of state supreme courts are final unless a federal issue or a constitutional
right is involved.
The implied warranty of merchantability provides that whenever a merchant sells
goods, the merchant warrants that the goods are merchantable—that is, that they are
reasonably fit for the purpose for which they are sold.
Charles only has a photocopy of his written contract with Jenny, and not the original.
The photocopy is not generally acceptable as evidence in a trial concerning the contract.
Jake dies while he is the holder of an instrument. Upon his death, title to the instrument
automatically vests in Jake's heirs.
Arbitration and mediation can usually be scheduled quicker than litigation.
Entry through an open door or window establishes the act of burglary.
Nonemployees such as financial planners, accountants, auditors, and attorneys are
considered corporate outsiders.
The Twelfth Amendment grants due process rights to corporations.
The Taft-Hartley Act provides that union shop contracts are legal only in states that do
not forbid them.
A person does not have a duty to retreat before using force if the attack occurs in his or
her own home.
In a bailment, the person who transfers the property is called the bailee.
Gregory sells his land to Tim. Under the Statute of Frauds, Gregory and Tim must enter
a written contract to be enforceable in the court of law.
Ratification is a minor's willingness to deny contractual obligation.
When an unaccepted draft is presented for payment, the drawee is required to pay it.
Drafting of ADR contract clauses is a proactive attempt to ensure that litigation will be
avoided should a dispute arise.
Cindy's liability for the unauthorized use of her ATM card is limited to $500 if she
notifies the bank after 2 business days but within one week after the loss of the card.
In the "Opening Case", the text notes that the FCC's new "net neutrality" regulations
giving "fast lane service" to internet service providers are an example of the ongoing
corruption of America based on neoliberal market value ethical models.
Ostensible authority is created when a hospital presents itself to the public-at-large as a
provider of health care services and, in some way, leads the patient to believe that a
physician with staff privileges is an employee of the hospital.
Mike has the right to cross Paco's land to get to the highway. Paco has the dominant
tenement, since Mike could not get to the highway without using Paco's land.
The issue in the Classic Case, Hamer v. Sidway, involved the question of legal
detriment.
A living will typically authorizes an agent to make medical treatment decisions for
another.
A barber's chair bolted to the floor of a rented building becomes real property.
A failure to pay franchise taxes would lead to the state revoking a corporation's charter.
Membership in the EU is enough to allow a nation to adopt the euro.
The RICO Act covers only serious crimes, such as arson and robbery.
Real estate is defined as the ownership rights that go along with the land and everything
temporarily or permanently attached to it.
In a ____________, a target corporation uses news releases, advertisements, and press
conferences to convince shareholders to retain present management.
A. greenmail arrangement
B. lockup agreement
C. public relations campaign
D. targeted shareholder agreement
Dai executes a will and provides copies to all her children. Later, she prepares a
different will and destroys the first original will, but not the copies. Has the original will
been canceled?
A. No, since the copies still exist.
B. Yes, even though copies exist, Dai destroyed the original.
C. No, since delivering the copies prevents Dai from later changing her will.
D. Yes, since the last will is always the one probated.
When a contract subject to CISG exceeds $500 it:
A. is enforceable without the need to be written.
B. must be written to be enforceable.
C. must be written and reviewed by attorneys for both sides.
D. must be written if the value of the contract exceeds ten percent of the net worth of a
party.
____________ is a philosophical theory that says ethical values can be determined by a
proper application of human reason.
A. Neoliberalism
B. Rational ethics
C. Social contract theory
D. Ethical relativism
Joshua, a merchant, promises in a signed writing to Pedro, a consumer, to hold an offer
to sell goods open for five months without Pedro giving consideration in exchange.
However, Joshua sells the goods to another consumer and Pedro sues him for breach of
contract. Which of the following is true of this case?
A. Joshua is not bound by the contract, since firm offers cannot exceed three months.
B. Since Joshua is a merchant and is bound by a firm offer made to Pedro, he has
breached contract.
C. The UCC will not enforce this contract as a firm offer as both parties are not
merchants.
D. Joshua is bound by this offer only if a five month offer is customary for this type of
good.
____________ elect the ____________, who take whatever actions are appropriate and
in the best interests of the corporation.
A. Shareholders; officers
B. Officers; board of directors
C. Stakeholders; board of directors
D. Shareholders; board of directors
An informal contract is also known as a(n):
A. void contract.
B. quasi-contract.
C. implied-in-fact contract.
D. simple contract.
Brandon, a recent law school graduate, says he will provide affordable legal services to
anyone who needs help. Although his bar exam results are not out yet, Brandon is
certain that he has passed. Legally, are his clients required to pay for his legal services
before he has received his license?
A. Yes, a court will require that his clients pay in full for any legal services they receive
from him.
B. Yes, but if Brandon fails the exam, he must return all consideration to the appropriate
clients.
C. No, since it is against the law for anyone without the required state license to offer
legal advice.
D. No, because Brandon has acted incompetently.
A(n) ____________ is any written warranty that does not meet all of the requirements
for a full warranty.
A. express warranty
B. limited warranty
C. implied warranty
D. warranty of merchantability
Thomas signed a blank promissory note and placed it on his office desk. Kelly, also
present there, pilfered the note. The note ended up in the possession of Big Bank. What
defense to payment does Thomas have?
A. Contributory negligence
B. Lack of delivery
C. Failure of consideration
D. Lack of possession
Linda, a manager and a currency trader for United Traders, has specific instructions
from the CEO not to take a position on any currency in excess of $1 million. Linda sees
what she believes to be a sure thing and takes a $20 million position. Unfortunately, the
transaction goes bad and costs United $60 million. Does Linda have any liability to
United?
A. Yes, because Linda violated specific instructions and is, therefore, liable for the
company's loss.
B. No, Linda's actions are a normal market practice.
C. Yes, because Linda engaged in insider trading.
D. No, Linda is protected by the business judgment rule.
The court vests the responsibility of liquidating the assets of the debtor for the benefit
of all interested parties in the:
A. debtor in possession.
B. creditor in possession.
C. case trustee.
D. primary trustee.
A(n) ____________ is an exception to the rule that says that either the principal or the
agent may terminate an agency relationship at any time.
A. agency by estoppel
B. agency by mutual agreement
C. agency coupled with an interest
D. notice of reimbursement
John, a highly skilled mechanic specializing in Jabooti motorcycles, agrees to repair
Gladys' Jabooti's motorcycle, but when he becomes ill, he transfers that responsibility to
Clark, a friend of his. The transfer to Clark is called a(n):
A. assignment.
B. delegation.
C. novation.
D. conveyance.
Gabriel applies for a home loan. Mark signs the agreement promising to pay off the
debt in case Gabriel fails to do so. In this case Mark is:
A. the guarantor.
B. the obligee.
C. the obligor.
D. the assignor.
Iris represents Drew, an eccentric billionaire who lives alone on a Pacific Island.
Although Drew passes away on May 1st, this fact is not revealed until June 1st. On May
15th, Iris enters into a contract with Peggy on behalf of Drew. What is the legal liability,
if any, of Iris to Peggy?
A. Iris is liable for a breach of actual warranty of authority.
B. Iris is liable for a breach of implied warranty of authority.
C. Peggy may enforce the contract since Drew's death was unknown, thus Iris has no
liability.
D. Peggy may enforce the contract against Iris since she represented a nonexistent
principal.
Under the ____________ rule, the courts generally accept into evidence only the
original of a writing, not a copy.
A. best evidence
B. parol evidence
C. standard construction
D. equal dignities
In 1998, President Clinton signed the ____________, which called for the primary
industrial nations to reduce carbon dioxide emissions below levels recorded in 1900.
A. United Nations Framework Conference on Climate Change (UNFCCC)
B. Copenhagen Protocol
C. Kyoto Protocol
D. Agenda 21
Early neutral evaluation (ENE) is a(n):
A. iADR process that combines mediation with arbitration.
B. shortened version of a trial, conducted in less than a day before an actual jury which
renders an advisory verdict in the case.
C. ADR technique by which the parties hire a retired judge to hear their dispute.
D. ADR process in which the parties permit a referee to assess their case on the basis of
the facts and legal arguments alone.
Janice requires information about the voting rights of members of Titan, LLC. Which
document will contain this information?
A. Articles of incorporation
B. Articles of organization
C. Bylaws
D. Operating agreement
The maximum time period that is allowed for Chapter 13 debtors to complete the
payment plan is ____________ years.
A. eight (8)
B. ten (10)
C. five (5)
D. twelve (12)
A(n) ____________ shop is a workplace in which nonunion members may be
employed for a trial period of not more than 30 days after which the nonunion workers
must join the union or be discharged.
A. open
B. agency
C. closed
D. union
A(n) ____________ is one that has been formed properly by incorporators who
followed all of the steps outlined by the state incorporation statute.
A. corporation by estoppel
B. de facto corporation
C. de jure corporation
D. alien corporation
Highflight Foundation offers $1 million to the makers of the first private spacecraft to
fly to the moon and back. Spaceview, Inc. succeeds in producing the first private
spacecraft to fly to the moon and back, but Highflight refuses to pay. This is a
____________ contract and Highlight is ____________.
A. unilateral; not bound by the offer unless there is a written and signed contract with
Spaceview
B. unilateral; bound because Spaceview performed the required action, which was an
acceptance of the offer
C. unilateral; not bound since the moon is not under U.S. legal jurisdiction
D. bilateral; bound since Spaceview had a firm offer
Article 2 of the ____________ is a model set of laws designed to govern the sale of
goods in commercial transactions in the United States.
A. Uniform Contract Law Code
B. Uniform Common Code
C. Uniform Civil Code
D. Uniform Commercial Code
The absolute time limit for notifying a bank of a forged or altered check is
____________ from the time the depositor receives the bank statement.
A. fourteen days
B. thirty days
C. one year
D. three years
On the federal level, ____________ assures all workers in a business, in or affecting
interstate commerce, a safe and healthful place of employment.
A. OSHA
B. FLSA
C. FICA
D. ERISA
Brianna repaid a $600 loan to her friend, Sharkey. She made the check payable jointly
to Sharkey and Sharkey's daughter, Evie, even though she intended Sharkey to have the
entire interest in the repaid debt.
A. Sharkey can legally forge Evie's indorsement as Brianna did not intend Evie to have
any interest.
B. Sharkey cannot cash the check unless Evie indorses it herself.
C. If Sharkey forges Evie's indorsement, he can be held liable for the tort of conversion.
D. If Sharkey cashes the check with Evie's indorsement, he is legally obligated to give
her half of the payment.
A(n) ____________ is an acceptance of an agreement not to sue supported by
consideration, which terminates one's right to continue any lawsuit, presently or in the
future, on grounds described in the agreement.
A. accord and satisfaction
B. release
C. option
D. promissory estoppel
Under a ____________, the mortgagor conveys his or her interest in the property to a
disinterested third party, known as a trustee.
A. security agreement
B. mortgage
C. deed of trust
D. subordination agreement
The difference between the IMF and the World Bank is that the ____________ helps all
nations, whereas the ____________ works only with the ____________ nations in the
international community.
A. IMF; World Bank; richest
B. World Bank; IMF; poorest
C. World Bank; IMF; richest
D. IMF; World Bank; poorest
Renee applied for credit to open her own beauty salon. The bank denies her the credit
after learning she was recently divorced and receives public assistance income. Which
of the following federal laws did the bank violate?
A. The Fair Debt Collections Act
B. The Equal Credit Opportunity Act
C. The Truth-in-Lending Act
D. The Fair Credit Reporting Act
____________ meansa demand made by a holder to pay or accept an instrument.
A. Dishonor
B. Presentment
C. Alteration
D. Real defense
Mitch is photographed attending a public school board meeting where violent protestors
attacked members of the school board. Later, when Mitch runs for the school board, a
local newspaper publishes Mitch's picture next to that of the violent protestors. Mitch
may sue:
A. if the newspaper writes a false article with actual malice.
B. for creating a false light.
C. the newspaper, if he is able to prove the motive of the publisher.
D. the newspaper for both defamation and disparagement.
Zeno Corp. has issued common stock and noncumulative preferred stock. The board of
directors of Zeno has not paid a dividend in 10 years. Discuss the rights of shareholders
to demand a dividend payment and the ability of the noncumulative preferred
shareholders to collect back dividends for the years in which no dividend was paid.
The police have the DNA and fingerprint evidence to connect Amy, the CEO of
BIGCORP to a particular crime of murder involving the CEO of a major competitor,
but they still have not found enough evidence of a motive for Amy to kill the victim.
Would the lack of a motive prevent Amy from being convicted? And, would BIGCORP
be criminally liable for Amy's actions?
Stan has debt problems. He has unpaid alimony and child support payments. Big Bank
is threatening to repossess his car because he is behind on his payments, and a variety
of creditors are threatening to sue. He wants to discharge most of his debts and begin
with a clean slate. Discuss what action will help Stan's situation.
When Zachary purchased an Arctic Refrigerator from Best Bargain Store, the
refrigerator came with a 36-month written full warranty. When the refrigerator
malfunctioned, Zachary discovered that he was expected to ship the refrigerator at his
expense to the Arctic factory in China where it was manufactured. There would be a
four-month delay until he received his repaired refrigerator back from the factory.
Discuss if these requirements to exercise the full warranty are lawful.
An envelope containing a $10 rebate check was placed in Hart's mailbox by mistake. It
was addressed to Rice, a former tenant, and read, "Pay to the bearer or G. Rice,
$10.00." Discuss Hart's role.
Linda's checkbook is stolen on January 1 and three checks are forged on her account at
Strata Bank. This first appears on a bank statement delivered to her on February 15, but
Linda does not examine the statement until March 5. She reports the forgery to the bank
on March 6. The other two forged checks do not appear on other bank statements until
April 15, and Linda reports them to the bank on April 20. Discuss the case.
Todd and Walker form a venture to operate snow cone stands in Smallville. The stands
are only open for five warm weather months. The remainder of the year, Todd and
Walker do no business together. Discuss the legal status of their business.
Oil Down is an organization which is exploring the possibility of striking oil in the
outskirts of a local county. It strikes oil and transports it with the help of pipelines
running through the local creek and river. One day, due to some reason, the oil pipeline
ruptures, thereby causing contamination of the local creek and river. Under which act
would the organization be liable to the federal government and what would be the
punishment accorded to the organization?
Big Union is on strike against ABC Construction Co. It asks the employees of XYZ
Subcontractor Co. not to unload trucks delivering supplies to ABC Construction Co.
building sites. Discuss if this action is lawful.
Teresa is concerned that her children will waste their inheritance and owe many
creditors who will take any unspent inheritance. Discuss how Teresa may allow the
children to inherit and yet prevent her fears from becoming reality.
Joan's bankruptcy proceeding consists of the following debts: back taxes of $10,000,
credit card debt of $25,000, home utility bills of $300, and a $10,000 car loan. Also,
there are bankruptcy administrative expenses of $1,000. Discuss the order in which
these debts will be settled.
Zach sells art pieces that are altered and falsified, but convinces his customers that they
are buying original artifacts. Explain the kind of crime committed by Zach.
Betty is unhappy with her physician, Todd, and wants a copy of her medical records to
be able to consult another physician. Todd says the records are his work product and his
property. Discuss the likely outcome of this dispute.
Jackie takes her car to the All Clean Car Wash and watches the employees while they
mistakenly give her car a special $30 hand wax treatment, rather than the $5 spray wax
she requested. Jackie refuses to pay $30 saying that she requested a service that would
cost her only $5. Analyze the case.
Agency is a legal relationship in which an agent transacts business for a principal.

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