A motion for a new trial will be granted only if a constitutional issue is involved.
a. True
b. False
Businesspersons are expected to make decisions that are ethically sound.
a. True
b. False
Fiona borrows $1,000 from Garden State Bank, using her motorcycle as col-lateral. To
perfect its security in-terest, the bank must file its financing statement with
a. the secretary of state.
b. the county clerk.
c. the city treasurer.
d. the ward alderman.
Merchant Supply Company and National Discount Stores enter into a contract for a
lease of cash registers. Merchant assures National that it has valid title to the goods.
Under the UCC, a warranty of title arises
a. automatically in most lease contracts.
b. only if the lessee asks for such a warranty.
c. only if the lessor expresses such a warranty.
d. only in conjunction with sales contracts, not lease contracts.
LaDonna signs a one-year lease with Mae to occupy an apartment in Ames, Iowa, near
the University of Iowa. LaDonna needs the apartment only for two semesters and may
have to sublet it for the rest of the term. LaDonnas tenancy is
a. a periodic tenancy.
b. a tenancy at will.
c. a tenancy at sufferance.
d. a fixed-term tenancy.
A court awards a judgment to Alice, who is the creditor, against Ada, who is the debtor.
After the judgment, Alice requests a court order to seize Adas property to ensure that
the judgment will be collectible. This is
a. a judicial lien.
b. a writ of attachment.
c. a writ of execution.
d. aviolation of most state laws.
Estes, an accountant, contracts to perform services for Frasier. In performing those
services, Estes uncovers a suspicious financial transaction. Estes is most likely not
liable if he
a. acted negligently in failing to discover the transaction sooner.
b. conceals the discovery and otherwise finishes the work.
c. investigates and reports the discovery to Frasier.
d. obtains restitution from the perpetrator without Frasiers knowledge.
Jackie distributes a handbill throughout her neighborhood accusing her neighbor Ked of
being a convicted sex offender. The statement is defamatory if
a. a neighbor repeats it.
b. Ked suffers emotional distress.
c. the statement is true.
d. the statement is false.
Beth goes to Dr. Carlton for surgery. Carlton says that Beth should be fully healed
within a week. Beth is not healed within a week. With respect to breach of contract,
Carlton is
a. liable.
b. not liable, because surgery is not a proper sub-ject for a contract.
c. not liable, because the statement was an opinion.
d. not liable, but Beth is excused from paying Carlton.
T.J. owns a red sports car. T.J. can use the car as he wishes and he can also dispose of it
if he wishes. When T.J. dies, the car will descend to his son. With respect to the car, T.J.
is
a. a joint tenant.
b. a tenant in common.
c. an owner in fee simple.
d. an owner of community property.
In general, a buyers duty to pay for tendered goods becomes absolute be-fore the buyer
has had an opportunity to inspect the goods.
a. True
b. False
Children must be at least thirteen years old to work in hazardous occupations.
a. True
b. False
Duress is a defense to the enforcement of a contract, but not a ground for rescission of a
contract.
a. True
b. False
Owen takes a Paisley-made pinball machine to Quality Games, Inc., for repair. Lacking
certain parts, Quality ships the game to Regal Repair Company. Regal does not return
the game. Most likely to suffer the loss is
a. no one.
b. Owen.
c. Paisley.
d. Regal.
If a party breaches a contract, the other party can choose one or more of several
remedies.
a. True
b. False
Bruno is an accountant. Under the Sarbanes-Oxley Act, the degree of government
oversight over the public accounting practices of Bruno and other accountants was
a. decreased.
b. increased.
c. eliminated.
d. unchanged.
A joint tenants sale of his or her interest terminates the joint tenancy.
a. True
b. False
All oral contracts are enforceable under the UCC.
a. True
b. False
Directors can use corporate funds and confidential information for personal advantage
as long as they disclose that they are doing so.
a. True
b. False
The chief aim of the World Trade Organization and other trade agreements is to
maximize trade barriers among their members.
a. True
b. False
Proximate cause exists when the connection between an act and an in-jury is strong
enough to justify imposing liability.
a. True
b. False
Andy knows nothing about horses. Peter, an expert horse trainer, knows that a certain
horse has no talent and is not likely to win any competitions. Peter convinces Andy to
buy the horse for $500,000 by assuring him that it has great talent. The horse turns out
to have no talent and never wins any competitions. Andy can most likely recover
damages based on
a. fraud.
b. mistake.
c. undue influence.
d. duress.
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 Ilenethe papers must be disposed of.
d. the Public Company Accounting Oversight Board.
Karen writes on a piece of paper, “I owe you $600, signs it, and gives it to Lou. This
instrument is
a. negotiable.
b. nonnegotiable, because it does not include an express promise to pay.
c. nonnegotiable, because it does not recite any consideration.
d. nonnegotiable, because it does not state any conditions to payment.
Generally, the agent owes the principal no duties.
a. True
b. False
To assist in detecting illegal bribes, International Civil Engineers, Inc., and all other
U.S. companies must
a. conceal financial records that reveal past bribes.
b. keep records that “accurately and fairly reflect their financial activities.
c. make bribes through third parties rather than directly to officials.
d. permit payments to foreign officials that are unlawful in that country.
Louiseis a director for Icy Ices, Inc. Louise is also a director for Creamy Creams, Inc.
When Icy Ices enters into a contract with Creamy Creams, Louise
a. must resign from one of the boards.
b. must resign from both boards.
c. must make a full disclosure of any conflicts of interest and abstain from voting on the
proposed transaction.
d. need not do anything.
A lien is an encumbrance on property to satisfy a debt or protect a claim for the
payment of a debt.
a. True
b. False
Doug is an accountant whose clients include Everyday Products, Inc. (EPI). Under the
Ultramares rule, if Doug is negligent in his work for EPI, he would be liable to
a. EPI and any third party.
b. EPI and third parties who are foreseen users of his work for EPI.
c. EPI and third parties who are reasonably foresee-able users of his work for EPI.
d. EPI only.
A principal is responsible for all intentional torts committed by an agent.
a. True
b. False
A failure to return personal property is disparagement of property even if the rightful
owner consented to the initial taking.
a. True
b. False
Informal contracts require a special form or method of creation.
a. True
b. False
To determine whether a duty of care has been breached, a judge asks how a reasonable
person would have acted in the same circumstances.
a. True
b. False
In general, minors are personally liable for their contracts.
a. True
b. False