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Which of the following best represents an agent's duty of segregation?
A. The agent not dealing with the principal's property so that it appears to be the
agent's.
B. The agent should not profit or receive any other benefit from acting on behalf of the
principal.
C. The agent has a duty to act within her actual authority and to obey the principal's
reasonable instructions.
D. The agent may not use or communicate confidential information of the principal for
the agent's own purpose.
If a seller fails to deliver goods called for in the contract, the buyer may purchase
substitute goods and recover as damages the difference between the contract price and
the cost of the substituted goods. This is known as:
A. cover.
B. action for the price.
C. specific performance.
D. incidental damages.
Which of the following is true of contracts involving intoxicated parties?
A. The rules are similar to the ones for people with a mental incapacity.
B. Courts are generally sympathetic to people involved in such contracts.
C. A person incapacitated by intoxication can disaffirm at any period of time.
D. In most such cases, people have escaped their contractual obligations.
Apple assigns the same contract rights to Enzo, and then to Sam. Sam immediately
notifies the obligor of the assignment to him; Enzo never notifies the obligor. When
Sam notified the obligor, he did not know about the earlier assignment to Enzo. Sam
will have the better right under the:
A. "American rule."
B. "English rule."
C. Restatement (Second) of Contracts.
D. common law.
E. Z. Pickens owes a past-due consumer debt of $1,335 to the Needless Markup
Department Store. Needless Markup retained Relentless Collection Agency, Inc. (RCA)
to collect the debt. RCA employees were unable to locate Pickens so they asked his
friends and his brother (Slim) about his whereabouts. When Pickens still had not been
found, an RCA employee contacted Pickens's employer and asked how to locate him.
Eventually, as a result of these inquiries, an RCA employee made contact with Pickens.
Pickens contends that RCA violated the Fair Debt Collection Practices Act. Is he
correct?
Checks that are more than six months old are called:
A. postdated checks.
B. altered checks.
C. stale checks.
D. antedated checks.
Which of the following contracts are agreements that create no legal obligations and for
which no remedy is given?
A. Valid contracts
B. Unenforceable contracts
C. Void contracts
D. Voidable contracts
"Responsibility" with respect to instruments includes:
A. those who have access to instruments that are in incoming or outgoing mail.
B. those who process instruments received by the employer.
C. those who have access to instruments as they are transported.
D. those who have access to instruments as they are stored.
Which of the following decisions must be approved by all the partners of a partnership
business that provides accounting and auditing services?
A. Buying paper supplies for the partnership.
B. Making a contract to provide audit services.
C. Borrowing money to repay a partnership debt.
D. Hiring a secretary.
Ace Software Co. signed a deal with Gill Associates, a partnership, and has extended
credit to it. Paul, a partner in Gill associates, retires but his partners continue the
business. In order to release Paul from the debt owned to Ace, which of the following
must occur?
A. The continuing partners must release Paul from liability on the debt.
B. Paul must not secure his release from Ace.
C. Paul has to contribute toward the debt as early as possible.
D. The continuing partners should volunteer to set off Paul's liability.
Which of the following is an example of the privilege of statements made to protect or
further the legitimate interests of another?
A. Employment reference
B. Intracorporate communications
C. Accurate media reports
D. Opinion polls
Privileges to defamation liability recognize that in some circumstances, other social
interests are more important than an individual's right to reputation. One important
conditional privilege involves statements made to protect or further the legitimate
interests of another- e.g. - employment reference.
What was the name of the documents that were given to early American corporations
by state legislatures that permitted them to operate as a corporation?
A. Certificate of Corporation
B. Organization Agreement
C. Special Charter
D. Domestic Treaty
_____ agencies are required to prepare cost-benefit and least-cost analyses for all major
proposed rules and to submit this information to the Office of Management and Budget
(OMB) for review prior to seeking public comments.
A. Independent
B. State
C. Public interest
D. Executive
According to the CTEA, the protection period for pre-1978 works is:
A. 50 years.
B. 65 years.
C. 75 years.
D. 95 years.
On May 2, Kurtz Co. assigned its entire interest in a $70,000 account receivable due in
60 days from Long to City Bank for $65,000. On May 4, City notified Long of the
assignment. On May 7, Long informed City that Kurtz had committed fraud in the
transaction out of which the account receivable arose and that payment would not be
made to City. If City commences an action against Long, and Long is able to prove that
Kurtz acted fraudulently:
A. Long will be able to successfully assert fraud as a defense.
B. City will be entitled to collect $65,000, the amount paid for the assignment.
C. City will be entitled to collect $70,000 since fraud in the inducement is a personal
defense which was lost on May 2.
D. City will be entitled to collect $70,000 since Long's allegation of fraud arose after
notice of the assignment.
Which of the following is sufficient for a gift of real property to be valid?
A. Properly executed deed
B. Possession of the property
C. Actual possession of the property
D. An oral declaration
In general, contracts made by insane (mentally impaired) persons:
A. can sometimes be ratified.
B. are unconditionally void.
C. are unconditionally voidable.
D. are voidable only if they involve necessaries.
A written agreement was signed by two parties and it was intended to be their entire
agreement. The parol evidence rule will prevent the admission of evidence that is
offered to:
A. prove the existence of a contemporaneous oral agreement that modifies the contract.
B. prove the existence of a subsequent oral agreement that modifies the contract.
C. explain the meaning of an ambiguity in the written contract.
D. establish that fraud had been committed in the formation of the contract.
Abby gets a state court civil judgment against Casey, but Casey does not pay. Which of
the following is one of the tools available to Abby to enforce the judgment against
Casey?
A. Mediation
B. Long-arm jurisdiction
C. Writ of execution
D. In rem jurisdiction
In general, which of the following is an available method of complying with a state's
workers' compensation statute?
A. Maintenance of a contingency fund by the employee
B. Participation in the state insurance fund by the employer
C. Participation in a federal insurance fund by the employee
D. Purchase of private insurance by employees
The states fund workers' compensation by compelling covered employers to (1)
purchase private insurance, (2) self-insure (e.g., by maintaining a contingency fund), or
(3) make payments into a state insurance fund.
The _____ rule has been criticized frequently as providing too much protection for the
managers of corporations.
A. co-determination
B. vicarious liability
C. Wall Street
D. business judgment
Under Section 11 of the Securities Act of 1933, a defendant (other than the issuer) may
establish a defense to liability if the defendant can prove that he/she acted:
A. with due diligence.
B. with scienter.
C. without scienter.
D. without due diligence.
Which of the following is true regarding bids?
A. They are considered to be unilateral contracts.
B. Promissory estoppels can be used to prevent withdrawal of bids.
C. Bids for governmental contracts are covered under contract principles.
D. Those submitting a bid are called offerees.
Which of the following is correct concerning qualified opinions, disclaimers of
opinions, and unaudited financial statements?
A. When an auditor issues a qualified opinion regarding audited financial statements,
the auditor is relieved of responsibility for mistakes in financial statements only to the
extent the qualification is specifically expressed in the opinion letter.
B. An auditor who, due to the limited scope of an audit, disclaims any opinion as to the
ability of the financial statements to present the financial position of a company has no
liability for misstatements or omissions in the financial statements.
C. Opinion letters stating that an auditor totally disclaims his/her liability for false and
misleading financial statements excuse an accountant from the duty to exercise ordinary
skill and care.
D. An auditor who prepares unaudited statements automatically creates a disclaimer as
to the accuracy of those statements.
If the parties agree on a reasonable amount of damages that will be paid to the injured
party, this amount is known as _____.
A. liquidated damages
B. unconscionable damages
C. penal damages
D. unenforceable damages
Which of the following is most true regarding checks whose amount has been altered?
A. The bank may not pay such checks as altered in all cases.
B. The bank may pay such checks as altered where the alteration is due to the
customer's negligence and the alteration is not obvious.
C. The bank must pay such checks as originally drawn.
D. The bank cannot ever pay such checks.
Which of the following is true about an agency's informal power?
A. An agency's informal powers enjoy the full force and effect of law.
B. An agency's informal powers have the same legal force of formal agency regulations.
C. An agency's informal powers and its formal actions are subject to similar constraints.
D. An agency's informal powers play a major role in shaping the behavior of regulated
industries.
To establish a cause of action based on fraud in the inducement, one of the elements the
plaintiff must generally prove is that:
A. it is impossible for the plaintiff to fulfill the terms of the contract.
B. the contract is unconscionable.
C. the defendant made a false representation of a material fact.
D. there has been a mutual mistake of a material fact by the plaintiff and defendant.
Which of the following is true of check collection?
A. Checks and other drafts collected through the banking system usually have two
parties—the drawer and the drawee bank.
B. If the payee deposits the check at a bank other than the drawee bank, the latter will
take a series of steps necessary to reflect the deposit as a credit to the payee's account.
C. If the payee deposits the check at the same bank as the drawee bank, the depositary
bank will make the ledger entry showing the deposit as a credit to the payee's account.
D. If the drawee and depositary banks are in the same town or county, the depositary
bank will indorse the check and deliver it to the drawee bank for payment.
In order for a business to be covered under the Federal Medical and Leave Act (FMLA)
how many employees must the business employ?
A. 50 or more
B. 5 or more
C. 75 or more
D. 2 or more
Why is the implied warranty of habitability considered to be superior to the doctrine of
constructive eviction?
A. The tenant does not have to vacate the premises to seek damages.
B. Constructive eviction does not obligate the landlord to make repairs.
C. Constructive eviction is applicable only to commercial property.
D. Landlords need to pay damages to tenants.
Mr. Green has a month to month lease for an apartment owned by Mr. Blue. The lease
between Mr. Green and Mr. Blue is oral. How will the court handle the lease?
A. The court will recognize and enforce the lease.
B. The court due to the statute of frauds will not recognize or enforce the lease.
C. The court will not recognize the lease unless there is a subtenant.
D. The court will only recognize the lease if requested by the Secretary of State.
