If Morales and Rolfes Supply negotiate for the purchase and sale of a supply of fuel for
a three-year period for Morales business,
a. the contract may indicate a method for determining the price, without stating a
definite price.
b. Morales and Rolfes must depend on the UCCs gap-filler provisions to determine a
price since the fuel is a “good covered by Article 2 of the UCC.
c. the contract price must remain the same for the entire three-year contractual period.
d. their contractual requirements regarding definiteness would be the same under the
UCC and the common law.
Molly and Craig are the original parties to a contract. Craig is obligated to design a
Website for Molly. They subsequently make an agreement with Eric that Eric should
take the place of Craig and assume all of Craig’s rights and duties under the contract.
The agreement releases Craig from his obligations under the contract. This agreement is
a. a novation.
b. an accord and satisfaction.
c. an assignment.
d. a nullification.
Don was driving his truck when a board fell out of the truck bed and onto the road.
Alice, who was driving closely behind Don’s truck, tried to avoid the board, swerved
and struck a telephone pole, causing her severe injuries. Which of the following is
correct?
a. Don is strictly liable to Alice for her injuries.
b. In a comparative negligence state, the actions of Don and Alice will be weighed to
determine liability.
c. Don was not negligent in allowing the board to fall out of his truck.
d. Don is engaging in ultrahazardous activity.
If a registration statement contains a material misstatement or omission
a. the company is liable and has no defense.
b. anyone other than the company who signed the statement is liable and has no
defense.
c. all experts are liable and have no defense.
d. the company is liable unless it can show due diligence.
Sherry, a 12-year-old, visited a website that wanted to know her family size, her parents’
educational level, and her weekly allowance. The site also asked Sherry’s name, mailing
and e-mail addresses, and age.
a. Under COPPA, the website must disclose how it will use the information it acquires
from Sherry.
b. COPPA prohibits the Internet operator from collecting such information under any
circumstances.
c. COPPA does not apply to Sherry’s situation since she is over the age limit for those
protected by the statute.
d. Under COPPA, the website may only collect information about Sherry’s name and
e-mail address.
Beth owned an original United States flag. She had previously loaned the flag to Ross, a
lawyer, so that he could display the flag on the wall behind his office desk. One day
while visiting Ross in his office and admiring the flag, Beth said to Ross, “You are so
fond of that flag, I would like you to have it!” Ross responded with a gracious “thank
you.” In this situation
a. Beth has not made a valid, binding gift of the flag because gifts are never binding and
can always be revoked by the donor.
b. Beth has not made a valid, binding gift of the flag because the donor must deliver the
property to the donee, which was not done here.
c. Beth has made a valid, binding gift if Beth agreed to give the flag in exchange for
Ross’s legal services.
d. Beth has made a valid, binding gift because she intended to transfer present
ownership to Ross and Ross accepted the flag.
Renita, a merchant, has received a signed, written confirmation from Merchants, Inc.
referring to goods she had not ordered. Renita should
a. ignore the confirmation.
b. call the seller and object to the confirmation as soon as she gets back from her
two-week vacation.
c. object to the confirmation in writing within 10 days.
d. return the goods within two weeks of their delivery with a note attached saying she
will not pay for the goods.
Both per se and rule of reason violations of the Sherman Act are automatically illegal.
a. True
b. False
Suppose that Lenny Lawyer enters into an agreement with Cindy Client that his fee will
be a percentage of the recovery Lenny obtains for Cindy in her pending divorce. State
law makes such a contingency fee arrangement illegal in divorce actions. What will be
the probable outcome if Lenny attempts to enforce the agreement?
a. The contract will be valid. Cindy would not have been able to afford an attorney
otherwise and therefore Lenny was doing a public service.
b. The contract will be voidable at Cindy’s option.
c. The contract will be void as violating a statute. Lenny will not be able to recover
anything.
d. The contract will be unenforceable if Lenny did not get the agreement in writing.
Incorporators of Maizey Co. signed and delivered the corporate charter to the proper
office, but due to inefficiencies in the government office, the filing was delayed. During
the period between the delivery of the charter and the filing, a promoter of Maizey Co.
entered a contract for the delivery of goods using the corporate name. The supplier, if it
finds out the filing had not been completed when the contract was entered, may hold the
promoter personally liable on the contract.
a. True
b. False
Which of the following is a primary goal of the Bankruptcy Code?
a. to preserve as much of the debtor’s property as possible
b. to pay off the debtor’s creditors as quickly as possible
c. to secure debt counseling for the debtor
d. to keep the debtor from falling behind in payments
Mark’s home had burned to the ground. When he met with his insurance adjuster, she
accused him of burning down the house, and said she would have him criminally
prosecuted if he didn’t settle the claim for much less than the house was worth. Mark
agreed to the settlement. If he changed his mind, he can probably rescind the settlement
on the basis of
a. fraud.
b. duress.
c. undue influence.
d. mistake.
Larry goes to his barber who has cut his hair for the past several years. The barber
proceeds to cut his hair as they talk about the most recent snow storm to hit the area.
This is an example of a
a. unilateral, implied contract.
b. bilateral, implied contract.
c. unilateral, express contract.
d. bilateral, express contract.
Pamela applies for a life insurance policy with Forever Young Insurance Company.
When completing the application form about past surgeries, Pamela forgot about a past
outpatient surgery when she had an infected hang-nail removed and her toe treated. One
year after issuing the policy, Pamela died suddenly from a brain aneurysm. Forever
Young denies payment under the policy based on misrepresentation. If Pamela’s sister,
Paula, sues Forever Young, she will most likely
a. win, because once an application has been accepted, an insurer may not use a
misrepresentation on the application to avoid liability.
b. win, because Pamela’s misrepresentation was not a material fact and did not increase
Forever Young’s risk in insuring Pamela’s life.
c. lose, because Pamela’s application contained a misrepresentation of material fact.
d. lose, because an insurer can always use any misrepresentation on an application to
avoid paying.
Norm and Frank have a legal contract that is silent with regard to an assignment of the
contract. In order for Norm to assign all or part of his rights under a contract, Frank
must grant such permission to Norm.
a. True
b. False
A bailment is different from a gift because
a. a gift requires consideration, but a bailment does not.
b. a gift requires delivery, but a bailment does not.
c. in a bailment, only possession of the property is transferred to the bailee, whereas
with a gift, both possession and ownership must pass to the donee.
d. a gift is always a contract, but a bailment is generally not a contract.
Bryson Hardware accepted delivery of the 50 door handles it ordered. If it later finds
the handles do not conform to the contract specifications and it wants to revoke its
acceptance, it may return the goods only if
a. it shows the original acceptance of the goods never occured.
b. it shows that the defects substantially impair their value.
c. it can prove it is commercially impracticable for it to keep the goods.
d. the documents of title are in order.
Fresh Air, a nonprofit environmental organization, believes that Cincy Co. is violating
the Clean Air Act. The EPA has not taken any action against Cincy Co. In this instance,
Fresh Air
a. can file a citizen suit against the EPA.
b. can file an executive order with Cincy Co.
c. cannot file a lawsuit but can ask an administrative law judge to hear its complaint.
d. cannot file a lawsuit but can lobby Congress to force the EPA to act.
Reba orders a pair of custom-made cowboy boots, C.O.D. from Home on the Range
Western Wear. When the boots arrive, Reba pays the carrier for the boots, then opens
the package, only to discover that the boots are the wrong snake skin color and three
sizes too big. At this point
a. Reba is entitled to inspect the goods after payment (due to the C.O.D. terms) and she
can reject the boots because they are nonconforming.
b. Reba cannot revoke the acceptance, because the wrong color and size of the boots are
not substantial impairments.
c. Home on the Range can allege that Reba did not conduct a proper inspection;
therefore, Home on the Range owes Reba nothing.
d. Reba has no recourse; she should have known to inspect the goods before paying the
C.O.D. amount.
The Pines, a small motel in central Georgia, may be subject to federal regulation even
though it is not close enough to the state borders to have many guests from other states.
a. True
b. False
A binding process of resolving legal disputes by submitting them to a neutral third party
is called
a. mediation.
b. arbitration.
c. investigation.
d. enforcement.
Which of the following statements is TRUE regarding immigration under Title VII?
a. An interviewer cannot ask an applicant if he or she is authorized to work in the
United States.
b. Once hired, a person must show three forms of evidence proving he or she is
authorized to work in the United States.
c. It is illegal for employers to discriminate against non-citizens because “national
origin” is a protected category.
d. Once hired, employers must turn I-9 records over to the immigration office.
A later will revokes a prior will only if that revocation is clearly stated.
a. True
b. False
Which of the following is NOT a method to acquire control of a company?
a. Buy stock from the shareholders through a tender offer
b. Buy the company’s assets
c. Make an initial public offering
d. Merge with the company
Under the Clean Air Act
a. California was granted special permission to set stricter pollution standards than the
federal standards.
b. all states must follow federal automobile emission standards.
c. the states must each set automobile emission standards, which must then be approved
by the EPA.
d. states were given the option of following federal standards or adopting their own
stricter standards.
A homeowner has a contract with a firewood supplier to bring a stack of hardwood at
the beginning of each month from October through March. If the supplier has brought a
mixture of hard and soft woods for the first three deliveries and the homeowner
accepted the deliveries, the homeowner cannot reject a delivery in January just because
it includes some soft wood.
a. True
b. False
Judy believed that Ray and Don were partners in an automotive repair business. Ray
and Don were not partners. Ray owned the business as a sole proprietor. Ray, however,
allowed Don, his unemployed brother-in-law, to be around the business. When Judy
was having her car repaired, Ray told her “my partner here, Don, will give you a ride to
work this morning so you can leave your car here. He will give you a ride back here
after work and your car will be done.” Judy allowed Don to drive her to work. While
riding with Don, Don accidentally ran a stop light and caused an accident. Judy was
hurt and claims that both Don and Ray are liable to her. Is she right?
a. Yes. This illustrates a partnership by estoppel.
b. No. Don was not a partner in the business.
c. No. Don was a dissociated partner.
d. No. There was no intent to have a partnership.
Shari’a is another name for ______ law.
a. Islamic
b. civil
c. common
d. Jewish
Prime Products, Inc. found out that it was going to take three weeks to ship the
comforter Margaret ordered instead of the seven days it had originally promised her.
Prime Products must cancel Margarets order and notify her that it can deliver within
three weeks if she wants to reorder.
a. True
b. False
Wright Company contracted with the city of St. Louis to train and employ
disadvantaged youths. If Wright fails to fulfill the contract and is sued by one of the
disadvantaged youths, the youth would
a. win, as he is an intended beneficiary.
b. win, as he is a donor beneficiary.
c. lose, as he is a creditor beneficiary.
d. lose, as he is an incidental beneficiary.