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Garnett, who was driving too fast for conditions, collided with a truck carrying
explosives. The truck was unmarked, so Garnett had no way of knowing what it
contained. The collision caused an explosion, which shattered glass in a building a
block away. The glass injured Ida, who was working inside the building. John, who was
walking down the street near the site of the collision, was seriously burned as a result of
the explosion. In this case:
a. Garnett's negligent driving is the proximate cause of Ida's injury.
b. Garnett's negligent driving is the proximate cause of John's injury.
c. both Ida and John are within the zone of danger of the collision.
d. All of these.
A mark distinctive enough to clearly identify the origin of the goods or services can be
protected under:
a. the Federal Copyright Act.
b. the Lanham Act.
c. the Berne Convention.
d. compulsory licenses.
The purpose of the Office of Federal Contract Compliance Programs is to require
affirmative steps to provide opportunities for handicapped people in federal programs.
a. True
b. False
Presentment is a demand made by or on behalf of a person entitled to enforce the
instrument for:
a. payment by the drawee or other party obligated to pay the instrument.
b. acceptance by the drawee of a draft.
c. Both are correct.
d. None of these are correct.
Directors, but not officers, may compete with the corporation in their own private
business dealings.
a. True
b. False
June, executrix of Calvins estate, promised Mr. Wentworth in writing that she would
personally pay one of Calvins debts to Wentworth Co. If June fails to pay, the written
promise must be in existence at the time Wentworth Co. initiates a lawsuit so the
writing can be produced as evidence.
a. True
b. False
The requirements for negotiation are the same for both order paper and bearer paper.
a. True
b. False
Which of the following illustrates a shipment contract?
a. Ex-ship.
b. F.O.B. place of shipment.
c. No arrival, no sale.
d. All of these are shipment contracts.
If the seller of goods is an expert and gives an opinion with regard to the goods, the
seller may be liable for breach of warranty.
a. True
b. False
Presentment is excused where the acceptor is undergoing bankruptcy.
a. True
b. False
An assignee of contractual rights acquires only the same rights as the assignor.
a. True
b. False
Fay, age 17, ordered a pair of skis on the installment plan. She paid $20 every month
until she turned 18, the age of majority. The next day, she sold the skis to Sharon and
disaffirmed the contract. Fay is:
a. still liable since she had to disaffirm before her 18th birthday.
b. still liable because selling the skis amounted to a ratification.
c. still liable because she used the skis.
d. not liable because skis are not necessaries.
Civil law is a part of public law, whereas criminal law is a part of private law.
a. True
b. False
Sam is a sales representative for the Incman Corporation. Sam has a terrible driving
record and has had his driver's license revoked, but nevertheless he continues to drive
the company car for his job. One day he drives too fast for conditions, goes through a
red light, and strikes a pedestrian. The accident happened despite the fact that Sam's
supervisor at Incman had repeatedly reprimanded him and advised him to drive more
cautiously. Incman:
a. has no liability, because they did not authorize Sam to drive carelessly.
b. has no liability, because Sam's actions were not a tort.
c. is liable even though it did not authorize Sam to drive carelessly, because it employed
an improper person as its agent.
d. has no liability, because it has adequately supervised Sam as its agent.
The warranty of merchantability is found in Section 402A of the Restatement of the
Law of Torts.
a. True
b. False
"Shelf registrations" allow delayed sales of stock.
a. True
b. False
Daniel, a cabinetmaker, contracts to make a china cabinet to Loras satisfaction and Lora
promises to pay Daniel $2,800 for the cabinet if she is satisfied with it when completed.
Daniel completes the cabinet in a workmanlike manner using the wood Lora has
chosen. If Lora tells Daniel that she is not satisfied with the cabinet and refuses to
accept or pay for it, Daniel is entitled to recover from Lora the reasonable value of the
cabinet if her dissatisfaction is unreasonable.
a. True
b. False
Under the Third Restatement, possessors of land:
a. owe varying duties to entrants onto the land depending on their status.
b. owe the same duty of reasonable care to all entrants on the land except for a category
of entrants called "flagrant trespassers.
c. owe "flagrant trespassers a duty of reasonable care, but owe others a duty to warn
them of dangerous activities and conditions of which the possessor has knowledge or
reason to know and which the entrant does not know and is unlikely to discover.
d. have the duty of reasonable care only with regard to artificial conditions on the land
that could pose risks to entrants on the land.
Federalism is the division of governing power between the federal government and the
states.
a. True
b. False
Which of the following is both a prejudgment and a postjudgment remedy for a
creditor?
a. Writ of execution.
b. Garnishment.
c. Attachment.
d. Supplementary proceeding.
Minors under the age of 18 are not held liable for their intentional torts.
a. True
b. False
If Karen assigns her lease to Henry, Karen and Henry are both liable to the landlord for
the rent.
a. True
b. False
An example of an unenforceable oral contracts is:
a. an oral promise to guarantee the additional duties of another.
b. an oral agreement to substitute different land for that described in the original lease
contract.
c. an oral agreement to extend an employee's contract for six months to a total of two
years.
d. All of these.
e. Two of these but not all three these examples.
Which of the following is correct regarding the English courts of equity?
a. They were presided over by a judge.
b. They could only award money damages.
c. They would issue a decree ordering a defendant to do or to refrain from a specific act.
d. All of these.
An example of a bailment for the bailor's sole benefit is when Sherri, without
compensation, lends her Cappuccino maker to Ed for Ed's party.
a. True
b. False
Under Subchapter S of the Internal Revenue Code, a corporation's income is taxed only
at the shareholder level.
a. True
b. False
Which of the following would most likely be enforceable?
a. An agreement supported by past consideration.
b. A substitute agreement to settle an undisputed debt.
c. A debt agreed to seven years ago in a state where the statute of limitations is six
years.
d. A promise following the rendering of emergency services that is not supported by
new consideration.
False statements in a limited partnerships certificate or amendment that cause loss to
third parties who rely on the statement may result in liability for the general partners.
a. True
b. False
In order to form a contract, the parties must:
a. manifest their agreement subjectively.
b. manifest their agreement objectively.
c. indicate solely through the written word their intent.
d. create a formal document.
Accession means the right of the owner of property to any increase in it.
a. True
b. False
Indorsers of all instruments incur primary liability on the instrument.
a. True
b. False
Jason's mother would like him to go to college, so in June he enrolls at the local
university. He also quits his job and tells his mother his plans to take classes. His
mother says, "I'm so happy that you are going to college that I want to pay for your
books." Jason then sends her a bill for $485. Jasons mother's promise is:
a. enforceable, because Jason returned to college.
b. enforceable, because Jason is giving up the right to do something else.
c. unenforceable, because it is a unilateral contract.
d. unenforceable, because Jason had already enrolled in school when she made the
statement that she wanted to pay for his books, and there is no consideration.
Whether an individual partner or the partnership owns certain property determines who
gets it upon dissolution of the partnership and who shares in income from it.
a. True
b. False
A principal may be liable where his agent sells liquor to an underage person even
though the principal did not authorize the act.
a. True
b. False
Charlene hears about a reward being offered by the local television station for
information leading to the arrest and conviction of a local rapist. She supplies the
requested information and the suspect is then arrested and convicted. In this case:
a. Charlene cannot collect the money unless the offer was specifically made to her by
the station.
b. the offer by the television station was an offer made to the general public to enter into
a unilateral contract, which offer Charlene has accepted.
c. because Charlene failed to notify the station of her intention to supply the
information before actually doing so, she has not accepted their offer.
d. Charlene was just doing her duty as a citizen and has no right to the payment of any
money.
