If an offer requires that acceptance be communicated by a specific date and the
acceptance is properly dispatched by the offeree on the final date,
a. no contract is formed, since the offeror will undoubtedly receive the dispatched
acceptance after the deadline for acceptance.
b. a contract is formed, but the contract is voidable at the election of the offeror.
c. the acceptance is timely and a contract is formed, even though the offeror actually
receives the acceptance well after the specified date has passed.
d. the acceptance is timely and a contract is formed, but only if the offeror actually
receives the acceptance by the deadline specified for acceptance.
When a carrier accepts goods for land shipment, it ordinarily issues to the shipper a(n):
a. bill of lading.
b. intent to transport memorandum.
c. warehouse receipt.
d. trust receipt.
If taxes or assessments on leased premises are increased because of improvements
made by the tenant that remain with the property, the:
a. landlord is liable for such increases.
b. landlord is liable for such increases only if the tenant was under a duty to make the
improvements.
c. landlord is liable for such increases only to the extent that the improvements actually
increase the fair market value of the property.
d. tenant is liable for such increases.
Among the guidelines for balancing the interests of various stakeholders to resolve
ethical dilemmas in business are:
a. identify potential parties who could be injured by the proposed action.
b. define the problem from both the decision maker’s and opposing viewpoints.
c. ask whether you would be willing to describe a proposed action to your family, the
board of directors, a congressional hearing, or other public forum.
d. all of the above.
Which of the following must be proven by a plaintiff to recover for strict liability in
tort?
a. negligence of the seller or manufacturer
b. recklessness of the seller or manufacturer
c. unreasonably dangerous defects in goods that cause harm
d. privity of contract between the manufacturer and the buyer
Under the __________approach, consideration is defined as a benefit received by the
promisor or a detriment incurred by the promisee.
a. pro-con
b. I win, you lose
c. gain-loss
d. benefit-detriment
A nuisance:
a. is created by every interference that has an effect on others.
b. is established when the plaintiff shows harm as the result of the defendant’s conduct.
c. arises only by an interference that is great enough to be condemned as unreasonable.
d. cannot arise from a lawful activity or business that is conducted in a lawful manner.
The transferee has only those rights that were possessed by the transferor of the note
when a transfer of an instrument is made by:
a. an assignment.
b. a negotiation.
c. a sale.
d. a will.
A guaranty of payment creates a(n):
a. contract of surety.
b. contract of credit.
c. letter of credit.
d. absolute guaranty.
A writing that satisfies the requirement of a writing under the statute of frauds could be
evidenced by:
a. a note.
b. a memorandum.
c. a contract.
d. all of the above.
In most bilateral contracts, the performances of the parties are __________.
a. conditions precedent
b. conditions subsequent
c. recurrent conditions
d. concurrent conditions
An accountant who is being sued by a third person for malpractice based on fraud will
be able to avoid liability if the accountant can show:
a. contributory negligence on the part of the plaintiff.
b. that an exculpatory clause applies.
c. that the plaintiff did not rely on the false statement.
d. the absence of privity of contract.
A contract involving both services and goods is classified as a contract for the sale of
goods if:
a. the services are to be performed upon the goods.
b. the services cannot be performed unless the goods are supplied.
c. no charge is made for the services.
d. the sale of goods is the dominant aspect of the transaction.
Rights guaranteed in the United States Constitution:
a. cannot be taken away by statutes or court decisions.
b. can be taken away by statutes.
c. can be taken away by court decisions.
d. can be taken away by local ordinances.
What types of restraints of trade are unlawful?
a. Voluntary
b. Binding
c. Unreasonable.
d. Interbrand.
A corporation may sue a director owning more than ten (10) percent of any class of
corporate stock who makes a profit by selling any such stock:
a. if the sale is made more than six (6) months after the original purchase of the stock
by the director.
b. only if the stock was originally acquired with fraudulent intent.
c. only if the stock was sold with fraudulent intent.
d. if the sale was made less than six (6) months after the original purchase of the stock
by the director.
Certification of a check at the request of a holder:
a. releases all prior secondary parties.
b. releases the drawer but not prior indorsers.
c. releases prior indorsers, but not the drawer.
d. does not release all prior secondary parties.
Small children who trespass on land may be owed a special duty of care based on the
doctrine of:
a. caveat emptor.
b. res ipsa loquitur.
c. comparative negligence.
d. attractive nuisance.
In addition to the corporation itself, which of the following parties are ordinarily
responsible for corporate debts?
a. directors
b. officers
c. directors and officers
d. none of the above
I believe that I own a very valuable vase. I tell you this information and state that I will
sell it to you for $800. I sell the vase to you, and you later find out that the vase is worth
only $200. Fraud:
a. has occurred.
b. has not occurred.
c. can always be based upon a statement of opinion or value.
d. none of the above.
A forged indorsement must be reported within:
a. thirty (30) days.
b. six (6) months.
c. one (1) year.
d. three (3) years.
A purchaser of a nonnegotiable warehouse receipt:
a. receives no implied warranties.
b. may acquire rights superior to those of the transferor.
c. acquires only the rights and title of the transferor.
d. may be considered to have the rights of a holder in due course.
A partially disclosed principal is:
a. liable for a simple contract made by an authorized agent.
b. not liable for a simple contract made by an authorized agent.
c. solely liable on a simple contract made by an authorized agent.
d. shielded from any liability, as an authorized agent is solely liable for any simple
contracts made on behalf of the partially disclosed principal..
The formal document that is prepared to evidence the contract of the parties creating
their partnership may be called:
a. a partnership agreement.
b. articles of incorporation
c. articles of cooperation
d. all of the above.
The person to whom an insurance promise is made is called:
a. the insured.
b. the insurer.
c. the policyholder.
d. both a. and c.
If there are twelve (12) or more creditors, at least __________ of those creditors whose
unsecured and undisputed claims total __________ or more must sign the involuntary
petition.
a. one (1); $13,475
b. three (3); $13,475
c. one (1); $14,575
d. three (3); $14,575
Interpretations of aspects of the right to privacy are often found in:
a. statutes.
b. customs.
c. societal guidelines.
d. none of the above.
A common carrier transporting goods under a COD shipment may:
a. make delivery without first obtaining payment.
b. not make delivery without first receiving payment.
c. accept a check as payment and have no liability.
d. not avoid liability without a signed release.
Racketeering is defined as:
a. using money to influence public officials.
b. using money to influence employees of competitors.
c. using money derived from illegal activities to invest in legitimate businesses.
d. using money to influence foreign officials.
Under the Clayton Act, a divestiture order is:
a. notification from the Department of Justice that a merger is about to occur.
b. notification from the Department of Justice that a merger did not occur.
c. a decision by a court requiring a defendant to sell an enterprise.
d. an order by a court requiring an enterprise to dispose of its inventory.
Arthur made a bid at an auction by calling out the amount of $250. The auctioneer
acknowledged Arthur’s bid. There were no higher bids, and before the fall of the
auctioneer’s hammer, Arthur announced that he was withdrawing the bid. The
auctioneer said that it was too late for Arthur to withdraw his bid, because the bid had
already been acknowledged. What is the result?
a. Arthur’s bid is an ordinary offer that can be revoked.
b. Arthur’s bid is firm and cannot be withdrawn.
c. Since the auctioneer had in fact acknowledged Arthur’s bid, the bid became an option
exercisable at the election of the seller.
d. Since the auctioneer had in fact acknowledged Arthur’s bid, a contract had been
formed by way of offer and acceptance; accordingly, Arthur’s subsequent attempt to
withdraw his bid was ineffective.
Court decisions and statutes can take away rights created by the United States
Constitution.
Fraud requires intent that the listener rely on the false statement of fact.
Thomas works for an internationally-renowned computer company. As a condition of
his employment, Thomas signed a confidentiality agreement, in which he agreed not to
disclose any trade secrets of the firm. The company has been researching a new
computer advancement, and is on the brink of introducing this product to the buying
public. Before the official product release, Thomas is considering offering information
related to this new advancement to one of his company’s competitors for a price. What
categories of ethical behavior might be impacted by Thomas’ decision to disclose this
information to his employer’s competitor?
State supreme courts generally hear all cases appealed to them.
The requirements to create a trust are uniform.
The purchase of a warehouse receipt by due negotiation eliminates all prior claims.
Even after there is an effective ratification, the original action of an agent still is treated
as unauthorized.
Gonzalez Manufacturing negotiated by telephone to purchase approximately $7,000
worth of digital video recorders from Video Imports. The final details were worked out
by telephone calls on April 2nd. On April 4th, Video sent Gonzalez a confirmation of
their telephone agreement, which included pertinent details. Meanwhile, on April 3rd,
Gonzalez was offered a better deal than Video’s and accepted it. Upon arrival of the
confirmation on April 6th, Gonzalez ignored it and did nothing further until May 1st,
the date before Video was to deliver. On May 1st, Gonzalez informed Video that their
contract was an unenforceable oral contract and that delivery would not be accepted.
When attempts to amicably settle the matter failed, Video sued Gonzalez for breach of
contract. Decide.
The Insider Trading and Securities Fraud Enforcement Act of 1988 gave the SEC
authority to bring an action against an individual purchasing or selling a security while
in possession of material, inside information.
The employer of an independent contractor does not have control over the performance
of the work by the independent contractor.
A contract of insurance ordinarily is stated in a writing called a policy.
When specifically bequeathed property is sold or given away by the testator prior to
death, the bequest is considered “redeemed.”
The persons affected by a nuisance may obtain an injunction to stop the nuisance.
A partnership is organized for the profit of its members.
The burden of proving the existence of a partnership will always fall on one of the
partners.