Antidumping duties are the responsibilities of international environmental polluters.
When two conflicting security interests are unperfected, the first to attach has priority.
A power of attorney can be given only to an actual attorney.
A continuation statement is effective only if it is filed within six months before the
expiration of a financing statement.
A bank cannot recover from a holder who cashes a check bearing a forged indorsement
once the bank has accepted and paid the item.
On a contract breach, the nonbreaching party’s only option is to refuse to perform.
A corporation that is selling all of its assets must obtain approval only from its board of
directors.
A qualified opinion must be specific and identify the reason for the qualification.
Normally, corporate shareholders are personally liable for the obligations of the
corporation.
Negative amortization occurs when the monthly payments are insufficient to cover the
interest due on a loan.
A delegatee is a party who transfers his or her obligation under a contract to another
party.
In a gratuitous bailment, a bailee has a right to be compensated for costs incurred in
keeping bailed property.
Private parties can sue violators of the Securities Act of 1933.
Article 2 of the UCC governs contracts for sales of goods.
Performance of an accord discharges an original contractual obligation.
A security interest is not enforceable after the creditor’s rights have attached to the
collateral.
An adult may avoid any contract with a minor.
Constructive delivery does not satisfy the delivery requirement for an effective
bailment.
If a customer’s debit card is lost or stolen and used without permission, the customer
shall be required to pay no more than $50.
Foreign exchange markets comprise a worldwide system for buying and selling
currency.
A guardian can enter into legally binding contracts on behalf of a mentally incompetent
person.
Rules issued by administrative agencies now affect almost no aspect of a business’s
operations.
Unforeseen difficulties that justify a demand for additional compensation include risks
ordinarily assumed in business.
A delegation relieves the party making it of the obligation to perform.
The officers employees of each corporation involved must approve a merger.
A contract involving property of any kind must be in writing to be enforceable.
The least common forms of securities are bonds issued by corporations.
All collateral promises must be in writing to be enforceable.
If a principal does not ratify an unauthorized contract, the principal is not bound.
With an interest-only mortgage, the borrower can choose to pay only the interest
portion of the monthly payment for a specified period of time.
The Civil Rights Act of 1964 does not prohibit job discrimination at all stages of
employment.
The death of a customer revokes a bank’s authority to pay an item.
A personal name is not protected under trademark law unless it acquires a secondary
meaning.
Fabiola, or any foreign citizen, can bring a civil suit in a U.S. court for
A.a violation of a treaty of the United States only.
B.a violation of a treaty of the United States or of the law of nations.
C.a violation of the law of nations only.
D.no purpose.
Quotient Financial Corporation is a secured party with a security interest in property
owned by Retail Sales Company. Perfection of this security interest may not protect
Quotient Financial against the claim of
A.a bank.
B.a buyer in the ordinary course of business.
C.a subsequent lien creditor.
D.a trustee in bankruptcy.
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.
State Bank receives a check drawn by Tricia. The check is received after the established
“cutoff” hour. Payment can be postponed without dishonor
A.indefinitely.
B.under no circumstances.
C.unless Tricia personally demands acceptance.
D.until the close of the next business day.
Lon enters into a contract to mine limestone in Mica’s quarry, sell it, and share the
profits on its sale with Mica. If the duties under this contract are discharged like those
under most contracts, the duties will be
A.assigned.
B.breached.
C.performed.
D.rescinded.
Dru tells his Excel Company coworkers that Fiona, Excel’s office manager, is stealing
from their employer. The statement is defamatory only if
A.a coworker believes it.
B.Fiona feels as if she were falsely imprisoned.
C.the statement is TRUE.
D.the statement is false.
Venerable Company stores office furniture with Warehouse Storage, Inc. (WSI), under a
contract that limits the warehouse company’s liability for lost or damaged property to
$500. Venerable declines the option to pay a higher storage rate for an increase in the
liability limit. The furniture is lost through no fault of WSI. The loss is most likely
suffered by
A.Venerable and WSI.
B.Venerable only.
C.WSI only.
D.neither Venerable nor WSI.
Greco promises to buy illegal copies of CDs and DVDs from Fava, who promises to
deliver on April 15. These promises are most likely
A.enforceable.
B.valid.
C.void.
D.voidable.
Hill & Dale Credit Corporation makes mortgage loans to consumers secured by their
principal homes. For a Hill & Dale loan to qualify as a Higher-Priced Mortgage Loan
(HPML), its annual percentage rate must exceed, by a certain amount,
A.the average prime offer rate for a comparable transaction.
B.the consumer’s income-to-debt ratio.
C.the percentage of income that a consumer can devote to its payment.
D.the projected increase in market value of the consumer’s home.
Wilbur files a petition in bankruptcy for relief through an individual’s repayment plan.
Wilbur is granted a discharge. Debts that will not be discharged include claims for
A.contributions to employee benefit plans.
B.money to be paid for services not rendered.
C.fraudulently incurred debt.
D.long overdue credit-card debt.
Cherry and Basil are minors who marry each other. Their minority status may be
terminated under the laws of
A.all states.
B.most states.
C.some states.
D.no states.
Elle is an agent for Fine Cosmetics, Inc. Elle owes Fine Cosmetics the duty of
A.avoidance.
B.compensation.
C.indemnification.
D.performance.
Kay and Leo copy and exchange MP3 music files over the Internet without anyone’s
permission. With respect to songs owned by Natural Recording Company, this is
A.copyright infringement.
B.fair use.
C.licensing.
D.protected expression.
Select Furniture Store sells household consumer goods. To create a purchase-money
security interest, Select Furniture must
A.assign, to a collecting agent, a portion of its accounts payable.
B.assign, to a collecting agent, a portion of its accounts receivable.
C.extend credit for part or all of the purchase price of the goods.
D.refer purchasers to a third-party lender.
An Iowa state statute requires amusement parks to maintain equipment in specific
condition for the protection of patrons. Jack’s Fun Park fails to maintain its equipment.
Key, a patron, is injured. Jack’s has committed
A.a dram shop act.
B.contributory negligence.
C.negligence per se.
D.res ipsa loquitur.
Joy invites Ken into her apartment. Ken commits trespass to land if he
A.enters the apartment with fraudulent intent.
B.harms the apartment in any way.
C.makes disparaging remarks about Joy to others.
D.refuses to leave when Joy asks him to go.
Dion, an accountant for Entertainment Sports, Inc., attempts to apply a duty-based
approach to ethical reasoning in conflicts that occur on the job. This approach is based
on the idea that a person must
A.achieve the greatest good for the most people.
B.avoid unethical behavior regardless of the consequences.
C.conform to society’s ethical standards.
D.place his or her employer’s interest first.
Consumer Goods, Inc., and Delta Distribution, Inc., sign a written contract for a sale of
goods. To be enforceable, this written contract must include
A.a correct title, such as “Purchase Order” or “Sales Invoice.”
B.a declaration of the subject matter.
C.a quantity term.
D.the parties’ names.
Serene City enacts an ordinance that bans the use of “sound amplifying systems” on
public streets. Tyler wants to campaign for a seat on the city council by broadcasting his
message through speakers mounted on a truck. In Tyler’s suit against the city, a court
would likely hold the ordinance to be
A.an unconstitutional restriction of speech.
B.constitutional under the First Amendment.
C.justified by the need to protect individual rights.
D.necessary to protect national interests.
Oceanic Vessels, Inc., and Pacific Harbor Company enter into a contract for a sale of a
boat. Oceanic is a merchant who deals in goods of the kind sold. The goods are
defective. Under the UCC, the implied warranty of merchantability is breached
A.only if Oceanic did not know about and could not have discovered the defect.
B.only if Oceanic did not know about the defect.
C.only if Oceanic knew about or could have discovered the defect.
D.regardless of what Oceanic knew or could have discovered.
A contract between E-Debits, Inc., and First Credit Corporation includes a provision
excluding liability as a result of fraud. This provision is
A.enforceable because the parties are protected from liability.
B.enforceable because the parties consented to it.
C.enforceable if the parties have equal bargaining power.
D.not enforceable.
Olaf is the creditor in a transaction with Phil. Once certain requirements are met, Olaf’s
rights will attach, which means that Olaf will have
A.an indivisible ownership right to Phil’s property.
B.an enforceable security interest in Phil’s property.
C.a notice affixed to Phil’s property.
D.the permission of a court to seize Phil’s property.
Hadley, an accountant, accumulates working papers while performing an audit for Ilene.
After the audit, these documents belong to
A.Hadley, with Ilene having a right of access to the papers.
B.Ilene, with Hadley having a right of access to the papers.
C.neither Hadley nor Ilene-the papers must be disposed of.
D.the Public Company Accounting Oversight Board.
Franz asks Gateway Mortgage Credit for a loan to pay for the purchase of a home. With
a poor credit score and a high current debt-to-income ratio, Franz does not qualify for a
standard mortgage. Gateway is most likely to provide
A.a deed in lieu of foreclosure.
B.a reverse mortgage.
C.a subprime mortgage.
D.a workout agreement.
Fact Pattern 14-1
Internet Cafes, Inc., contracts to buy all of its requirements for coffee, at a minimum of
1 million pounds per year, from Java Corporation for six years. After three years,
Internet tells Java that it plans to sell its company to Kwik Eateries, Inc. Kwik refuses
to assure Java that it will continue Internet’s contract.
Refer to Fact Pattern 14-1. Java can
A.assign its rights under the contract but cannot terminate it.
B.do nothing.
C.suspend performance under the contract until Java is fully paid.
D.terminate the contract and seek damages.
Owen and Pablo enter into a contract for a sale of fifty Western saddles. Pablo pays, but
Owen does not deliver. Pablo can normally recover as damages the difference between
A.any loss avoided and any profit gained.
B.the actual price and the hoped-for price.
C.the contract price and the market price.
D.the current prices in the parties’ locations.
Refined Commodities, Inc., agrees to deliver ten tons of sheet metal to Select Builders
Corporation. The agreement states that delivery is to be within “3” days, although the
parties intend “30” days. Refined cannot convince Select to amend the contract. Refined
should seek
A.damages.
B.reformation.
C.rescission.
D.specific performance.
On the orders of their corporate employer, Della and Efron, employees of Fabulous
Fashionista, a clothing store, switch trademarks on clothing that comes into the store to
be sold to consumers. This is
A.forgery.
B.larceny.
C.obtaining goods by false pretenses.
D.no crime.
Shingle & Tile Roofing Contractor, LLC, obtains an insurance policy against liability
for injuries or losses sustained by employees during the course of their employment.
The policy covers claims not covered by workers’ compensation insurance. This is
A.casualty insurance.
B.fidelity or guaranty insurance.
C.key-person life insurance.
D.employer’s liability insurance.
Macro Marketing, Inc., and National Food Corporation (NFC) discuss the terms of a
contract. Macro faxes NFC a memo on Macro’s letterhead that summarizes the items on
which they agree. NFC begins to perform, but Macro refuses to pay. Between Macro
and NFC, the memo is
A.an oral contract.
B.a pre-contract.
C.a written contract.
D.no contract.
In the facts of the previous questions, a U.S. court might pierce Amigos and Bueno’s
corporate status to impose liability on their owners, including the government of Chile,
if the firms failed to follow or be involved in
A.business activities.
B.corporate formalities.
C.ethical practices.
D.foreign affairs
Ollie buys a cup of coffee for $2, a magazine for $5, and a boombox for $600. The
requirement of a writing for the enforceability of a contract for a sale of goods at, or for
more than, a certain price is governed by
A.the common law.
B.the parol evidence rule.
C.the parties’ agreement.
D.the Uniform Commercial Code.
Horizon Corporation makes cell phones. Inez files a product liability suit against
Horizon, alleging a design defect. Under the Restatement (Third) of Torts: Products
Liability, in deciding whether to hold Horizon liable, the court may consider
A.neither the effect of an alternative design on the products’ costs and life nor the range
of consumer choice among products.
B.only the effect of an alternative design.
C.only the range of products.
D.the effect of an alternative design and the range of products.