Nature’s Products, Inc., sends its standard order form to Interbusiness Distribution
Corporation (IDC) to evidence a sale of packing materials. IDC responds with its own
standard purchase order form. Additional terms in the purchase order automatically
become part of the contract unless
a. the terms materially alter the original contract.
b. the original offer expressly required acceptance of its terms.
c. the offeror objects to the new terms within a reasonable time.
d. any of the choices.
The Food and Drug Administration (FDA) is a federal agency. The regulations that the
FDA issues are part of the body of
a. administrative law.
b. common law.
c. trade law.
d. international law.
Lulu joins with other creditors to force Mikhail, a debtor, into bankruptcy. One of the
goals of bankruptcy law with respect to creditors is to
a. ensure that creditors will continue to lend to insolvent debtors.
b. protect creditor assets from diminution in value.
c. provide equitable treatment in the competition for debtor assets.
d. make all debtor property available for creditor claims.
If a bank is both the drawer and the drawee with regard to a draft, then the draft is a
a. certificate of deposit.
b. cashier’s check.
c. nonnegotiable instrument.
d. promissory note.
Lively Toys Store and Movin” Products Company (MPC) enter into an e-contract under
which MPC agrees to ship a case of electronic, remote-controlled bugs to Lively Toys,
which agrees to pay on delivery. The Uniform Electronics Transactions Act (UETA)
a. denies the enforcement of such contracts.
b. does not apply to such contracts.
c. preempts all other laws with respect to such contracts.
d. supports the enforcement of such contracts.
Drummond wants to make a federal case out of his dispute with Elena. Federal cases
originate in
a. federal courts of appeals.
b. federal district courts.
c. state trial courts.
d. the United States Supreme Court.
Friendly Credit Corporation (FCC) believes that Gary may dispose of the assets that
FCC expects to receive as payment for Gary’s debt before FCC can obtain a judgment.
FCC may ask a court to issue a writ of
a. attachment.
b. contribution.
c. execution.
d. redemption.
Mica buys “Nature,” a movie, through Open Eyes Wide, an online entertainment
vendor. Before completing the purchase and downloading “Nature,” Mica must review
a warning not to make and sell a copy of it. This warning is
a. a browse-wrap term.
b. a click-on agreement.
c. a shrink-wrap agreement.
d. a wrap-on agreement.
Olga, a salesperson for Pre-owned Cars & Trucks, Inc., tells Quincy, “This is the best
car I”ve ever seen.” This statement is
a. an express warranty.
b. an implied warranty.
c. a warranty of title.
d. puffery.
Khalil holds a security interest in inventory owned by Luc. Khalil protects his claim to
the inventory in the event of Luc’s default by
a. assignment.
b. perfection.
c. redemption.
d. retention.
Allen and Beth decide to wager, in violation of a state statute, on the outcome of a
baseball game. They each deposit money with Cory, who agrees to pay the winner of
the bet. Before the game begins, Beth tells Cory that she has changed her mind about
the bet. Beth can recover
a. the amount of her bet and the amount of Adam’s bet.
b. the amount of her bet minus Cory’s expenses.
c. the amount of her bet only.
d. nothing.
Gaye, a minor, signs a contract to buy a motorcycle from Hi-Valu Cycles by
misrepresenting her age as twenty-one. Gaye fails to make the payments. Hi-Valu sues.
In most states, Gaye can
a. not return the motorcycle nor avoid further liability.
b. not return the motorcycle but can avoid further liability.
c. return the motorcycle and avoid further liability.
d. return the motorcycle but cannot avoid further liability.
George and James create an agency relationship to facilitate the sale of illegal narcotics.
This agency relationship
a. is illegal.
b. is legal.
c. will be recognized by some states, but not others.
d. can exist, but will be subject to fines for illegal activity.
Kailin owns a farm near Manhattan, Kansas, with a farmhouse, barn, and other
structures permanently attached. Kailin grows soybeans on the property. A pond lies
within the boundaries. Land includes
a. the pond, the soil, and the structures.
b. the pond and the soil only.
c. the soil only.
d. the structures and the soil only.
Good Food Groceries, Inc. enters into a contract to sell Sarah’s Corner Shop a truckload
of eggs from free range chickens. Good Food Groceries then fails to deliver the eggs to
Sarah’s Corner Shop. Sarah
a. must still pay for the eggs or she will be in breach of contract.
b. does not have to pay for the eggs because Good Food Groceries failed to perform.
c. must still pay for the eggs, but can file suit against Good Food Groceries for breach
of contract.
d. does not have to pay for the eggs, but is not allowed to file suit against Good Food
Groceries for breach of contract.
Hu, Ivan, and Juana apply to work for King Meatpacking Company. These individuals’
identities and eligibility to work must be verified by
a. the employer.
b. the individuals.
c. the individuals’ countries of origin.
d. the U.S. Citizenship and Immigration Services.
Raylene, who is Seth’s guardian, convinces him to buy a certain parcel of land from
Trevor at a greatly inflated price. Raylene may be liable for
a. duress.
b. fraud.
c. mistake.
d. undue influence.
Jen signs a check “pay to the order of Key” drawn on Jen’s account in Little Bank to
buy Key’s car. If there are insufficient funds in Jen’s account to cover the amount of the
check, but the bank pays it, this creates
a. a cashier’s check.
b. an overdraft.
c. a stale check.
d. a stop-payment order.
Jim agrees to act on Kit’s behalf, subject to Kit’s control, and Kit trusts Jim to so act.
This describes a relationship between
a. a business and its competitors.
b. a government and its governed.
c. a parent and a child.
d. a principal and an agent.
Raw Material, Inc., and Sewn Fabric Corporation enter into a contract for a sale of
muslin. The terms do not clearly indicate whether it is a destination or shipment
contract. A court would most likely presume that it is
a. a bailment contract.
b. a destination contract.
c. a shipment contract.
d. a transportation contract.
Without authorization, Rolf contracts on behalf of Sari to have Tige paint the interior
and exterior of Sari’s house. Sari ratifies the contract. Later, Sari tries to rescind the part
of the contract relating to the exterior. This attempt will be
a. partly successful.
b. partly unsuccessful.
c. totally successful.
d. totally unsuccessful.
Donald applies for a life insurance policy with Equity Insurance Company through
Fletch, an agent who works for Equity. Donald pays the initial premium. Fletch writes a
binder, which
a. acknowledges the application and promises to consider it.
b. attests to the truth of each statement in the application
c. evidences receipt of the payment of the initial premium.
d. indicates that a policy is pending and states its essential terms.
Wilson has an easement that allows him to drive across Dave’s land to get to Wilson’s
house. Fred has a profit to remove gravel from Dave’s land. Janet has a license to go
fishing on Dave’s land whenever she wants. Who has a nonpossessory interest in Dave’s
land?
a. Wilson only.
b. Wilson and Janet only.
c. Janet and Fred only.
d. Wilson, Janet and Fred.
Ross e-mails Super Snowboard Company’s marketing campaign to Winter Sports
Corporation, Super’s competitor, without its permission. This is
a. copyright infringement.
b. patent infringement.
c. trademark infringement.
d. a theft of trade secrets.
Ben and Andrew are parties to a contract. They agree on a novation. The novation does
NOT require
a. the existence of a previous, valid obligation.
b. agreement by all the parties to a new contract.
c. performance of the original contract by all of the parties.
d. a new, valid contract.
Which of the following is NOT a common form of electronic surveillance of employees
in the workplace?
a. Reviewing employees’ emails
b. Requiring employees to wear electronic location monitoring bracelets
c. Video-recording job performance
d. Listening to employees’ telephone conversations
Jamal signs a lease with Kelvin to occupy a house on Leech Lake in Minnesota for the
summer. Jamal’s tenancy is
a. a fixed-term tenancy .
b. a periodic tenancy.
c. a restrictive covenant.
d. a tenancy at will.
James is sixteen years old. Legally, James is considered
a. an adult.
b. an infant.
c. insane.
d. incompetent.
Adam has two children, Bob (the eldest) and Carol, both of whom predecease Adam.
Bob is survived by a daughter, Dina, and Carol by two sons, Ed and Fred. On Adam’s
death, if the estate is distributed per stirpes
a. Dina will receive the entire estate.
b. Dina will receive one-half of the estate, and Ed and Fred will each receive
one-fourth.
c. each grandchild will receive one-third of the estate.
d. the grandchildren will not receive anything.
Julia orders twelve violins for her music shop from Notable Notes Instrument
Manufacturers. The sale is made on credit. Julia orders the violins on May 1, Notable
Notes ships the violins on May 2, and Julia receives the violins on May 4. Julia sells all
the violins by June 15. Julia’s credit period most likely began on
a. May 1.
b. May 2.
c. May 4.
d. June 15.
Julia opens a checking account with Washington Bank and deposits funds into the
account. Julia and Washington Bank
a. do not have a contractual relationship.
b. have a creditor-debtor relationship in which Julia is the creditor and Washington
Bank is the debtor.
c. have a creditor-debtor relationship in which Washington Bank is the creditor and
Julia bank is the debtor.
d. do not have a creditor-debtor relationship.
Edie holds title to Floyd’s property under circumstances that, although nothing is
express, indicate this is apparently only for Floyd’s benefit. This is
a. an illegal trust.
b. an living trust.
c. a resulting trust.
d. a testamentary trust.
A board of directors govern every corporation.
Financial loans are usually considered to be necessaries.
An effective offer requires reasonably certain terms.
Americans with a Better Cause (ABC), a nonprofit organization, files a suit against the
U.S. Department of Justice (DOJ), claiming that a certain federal statute the DOJ is
empowered to enforce conflicts with the U.S. Constitution and with a state constitution.
In each situation, which source of law has priority?
Under the theory of negligence, the duty of care requires a careless act.
A victim of alleged discrimination may bring a suit against an employer after filing a
claim with the Equal Employment Opportunity Commission.
Restrictions on imports may include quotas.
A corporate director is an “owner” of the corporation.
If a seller is a merchant, and the seller holds the goods, and the buyer is to pick them
up, the risk of loss passes to the buyer on tender of delivery.
An incidental beneficiary can sue directly to enforce a promisor’s promise.
Employers that fall under the provisions of the Federal Unemployment Tax Act of 1935
are taxed quarterly.
U.S. district courts have original jurisdiction in federal matters.
A delegation relieves the party making it of the obligation to perform.
The element of intent is not very important in determining whether a contract has been
formed.
If a minor disaffirms a contract, he or she must disaffirm the entire contract.
Account numbers on credit-card receipts must be shortened so that merchants,
employees, and other with access to the receipts cannot obtain a consumer’s name and
full credit-card numbers.
In 2003, Congress passed the CAN-SPAM Act to deal with the many problems
associated with “junk e-mail” or spam.
A security interest is not enforceable after the creditor’s rights have attached to the
collateral.