In January, Alex promised to pay Y-K Inc. $5,000 if it would refrain from filing suit
against him on a breach of contract action. Y-K agreed and accepted a $5,000 check
from Alex. Which of the following statements is correct?
a. Y-K’s promise to refrain from suing Alex was not supported by legal consideration.
b. Y-K’s promise to refrain from suing Alex was supported by legal consideration and is
enforceable.
c. This is an accord and satisfaction, and Y-K cannot sue.
d. The courts would apply promissory estoppel in this situation.
The right of the tenant to the undisturbed possession of the leased property is known as:
a. quiet enjoyment.
b. habitability.
c. lawful possession.
d. peaceful possession.
If both parties believe they have a binding contract, this belief settles any later questions
about the validity and enforceability of the agreement.
a. True
b. False
Sam, the seller, enters into a contract agreement to buy Betty Lou’s house on the
condition that he is able to secure financing at or below 6% per year. This is a:
a. condition precedent.
b. condition subsequent.
c. novation condition.
d. concurrent condition.
Whittle sent an order over the Internet for a $1,200 garage door. His name keyed onto
the order will only be effective as a signature sufficient to create a “writing ‘signed by
the party against whom enforcement is sought if he follows up with a signature on
paper.
a. True
b. False
Abdulla hired Granite Construction to build an addition onto his home. Granite
Construction dug the foundation but then abandoned the project. Granite Construction
is entitled to receive the full contract price minus the value of the defects.
a. True
b. False
It is not a violation of United States law for a domestic company to pay money to a
foreign governmental official in order to obtain a contract with the foreign government
if this type of “commission is commonly paid in that foreign country.
a. True
b. False
The duty of fair representation created by the NLRA and the LMRDA requires that:
a. a union represent all members impartially and in good faith.
b. a union must pursue any members grievance against the employer.
c. an employer, in communications with employees during a union organizing effort,
must fairly represent the effects it believes a union will have on the company.
d. the NLRB certify only proposed bargaining units that it thinks the union can properly
represent.
Family Time Restaurant has a contract with Prime Meats for Prime to deliver 100
pounds of ground sirloin twice a week for the next three months. If, on one delivery,
Prime brings 95 pounds of ground chuck instead of 100 pounds of ground sirloin:
a. Family Time may unquestionably reject the non-conforming goods because they vary
in both quantity and quality.
b. Family Time may reject the non-conforming installment only if it substantially
impairs the value of that installment and cannot be cured.
c. Prime has no right to cure.
d. the perfect tender rule applies.
Dick steals Jane’s camcorder and sells it to Sid. Jane can recover the camcorder from
Sid:
a. under any circumstances.
b. only if Sid knew that the camcorder was stolen from Jane.
c. only if Sid did not know that the camcorder was stolen from Jane.
d. only if Sid paid less than the fair market value for the camcorder.
Congresswoman Sloan introduced a bill in the House of Representatives. If the bill is
approved by the House committee specializing in that subject, the bill will go to:
a. a Senate committee specializing in the subject matter of the proposed legislation.
b. the full House.
c. a Conference Committee made up of representatives of both the House and Senate.
d. the voters of her state for approval.
A force majeure event is:
a. anything that makes the contract unprofitable for either party.
b. a natural disaster that claims human life or leads to the declaration of a state of
emergency.
c. a disruptive, unexpected occurrence for which neither party is to blame that prevents
one or both parties from complying with the contract.
d. any happening that fulfills one of the conditions in the contract, making it
enforceable.
Which of the following countries has not passed legislation to comply with the
European Unions directive prohibiting the transfer of personal data to any countries that
do not provide adequate privacy protection?
a. Canada
b. Australia
c. United States
d. New Zealand
A spouse who is named the beneficiary of a life insurance policy would ordinarily be:
a. a creditor beneficiary.
b. an incidental beneficiary.
c. a donee beneficiary.
d. a debtor beneficiary.
For manufactured goods, the United States and European Union impose an average
tariff of ________ percent, and major trading partners around the world impose tariffs
of ________ percent for identical items.
a. 10; 5
b. less than 4; 10 to 30
c. 25; 39 to 70
d. 10 to 30; less than 4
Brahma entered into an oral agreement to sell 50 jet skis to Summer Sports. Brahma
delivered 20 of the skis on May 1. On June 1, Summer Sports notified Brahma that it
will not honor the agreement. Which statement is correct?
a. The contract is void since it was oral.
b. The contract is enforceable for 20 jet skis.
c. The contract is enforceable for the 50 jet skis
d. The contract is obsolete.
In a negligence case, the plaintiff must establish:
a. duty, strict liability, causation, and injury.
b. mens rea, breach, foreseeable harm, and injury.
c. duty, actus reus, foreseeable harm, and causation.
d. duty of due care, breach, causation, foreseeable harm, and injury.
Fundamental rights include all EXCEPT the right to:
a. drive.
b. vote.
c. free speech.
d. travel.
A partnership is a taxable entity, separate from the partners.
a. True
b. False
There are four types of illegal activity under the Civil Rights Act of 1964. Which choice
lists these four?
a. disparate treatment, disparate impact, hostile environment, and retaliation
b. disparate employment, unfair promotions, hostile environment, and unfair firing
c. false reports, retaliation, prima facie discrimination, sexual harrassment
d. religious disparaging, racial profiling, sexual harrassment, unfair promotions
To pay for a minor repair, May writes a check for $50 to David, who indorses the check
in blank and gives it to his sister, Glenda, for her birthday. She indorses the check in
blank and gives it to her trash collector to pay her quarterly bill. Which of the following
is correct?
a. David made transfer warranties to Glenda and to her trash collector.
b. David did not make transfer warranties to Glenda because Glenda gave no
consideration for the transfer of the check to her.
c. Neither David nor Glenda made any transfer warranties because they indorsed the
check with blank indorsements, making the check bearer paper.
d. The trash collector must wait until the check is dishonored before making a transfer
warranty claim against Glenda.
Hardhat Machine Company sold goods to Irish Eyes Company of Northern Ireland. Big
Bank issued a letter of credit on behalf of Irish Eyes and the letter was given to
Hardhat. The “account party” is:
a. Irish Eyes.
b. Hardhat Machine Company.
c. Big Bank.
d. None of the above.
Janet was employed as a sales representative for Esday, Inc. An appreciative customer
gave her a diamond bracelet for all her hard work on a complicated contract. Can Janet
keep the bracelet?
a. Yes. The bracelet was given to Janet personally and intended for her.
b. Yes, but only if she discloses the gift to Esday and Esday consents to her keeping the
bracelet.
c. No. An agent is not allowed under any circumstances to personally profit as a result
of the agency relationship.
d. No. The bracelet is regarded as an unfair trade practice and violates antitrust law.
Under the natural law theory of jurisprudence, an unjust law is no law at all.
a. True
b. False
The observation that “The one and only social responsibility of business is to increase
its profits” can be attributed to:
a. Justice Potter Stewart.
b. John Akers.
c. Milton Friedman.
d. Jeffrey Sachs.
A contract that requires a seller to deliver goods to the carrier is:
a. a destination contract.
b. a shipment contract.
c. a C.I.F. contract.
d. a C.O.D. contract.
Under a contract, Danielle is required to paint a room with paint chosen by the
homeowners, the Flynns. After Danielle paints the room according to the contract
requirements, her duties under the contract are discharged.
a. True
b. False
Which of the following statements could create an express warranty?
a. “This is the best car available in town.”
b. “This motorcycle will double in value in the next ten years.”
c. “These tires have 10,000 miles on them.”
d. “This antique is quite a bargain.”
Daddy buys an electric car for his 10-year-old son. Daddy follows the directions for
assembly carefully, but the son gets an injuring shock when he sits in the car. If Daddy
and son sue the manufacturer for negligence, they will:
a. be successful only if they can prove that the car manufacturer knew of the defect and
failed to correct it.
b. be successful only if they can prove that the car manufacturer failed to use reasonable
care in designing, manufacturing, or warning the purchasers about intended uses and
foreseeable misuses.
c. lose, because the son has no privity of contract and therefore no standing to sue.
d. not be successful if the car was sold “ASIS.”
Elizabeth worked as a salesperson in a carpet store. She was in the midst of divorce
proceedings and needed some money. Elizabeth sold her wedding ring. Elizabeth is
considered a merchant with regard to the sale of the ring.
a. True
b. False