A long-arm statute allows a state to obtain jurisdiction over a nonresident defendant
when the nonresident defendant has sufficient contacts with the state.
a. True
b. False
In order for there to be a violation of Section 2 of the Sherman Act, in addition to
monopoly power, the courts must find:
a. unfair conduct or abuse of power.
b. concerted action.
c. competitive behavior.
d. economic advantage.
Warranties of a person obtaining payment or acceptance of an unaccepted draft include:
a. the warrantor is a person entitled to enforce the draft.
b. the warrantor has no knowledge that the drawer’s signature is unauthorized.
c. the draft has not been altered.
d. All of these are correct.
Which of the following claims will be paid first from the debtor’s estate under Chapter
7?
a. A gap creditor with a claim of $2,000.
b. A state claiming $5,000 in back taxes.
c. The trustee’s expenses of $3,000.
d. Employees claiming unpaid wages of $5,000 for wages earned within 90 days of the
bankruptcy filing.
Payment of a C.O.D. shipment constitutes an acceptance of the goods.
a. True
b. False
Agreements by which the seller or lessor of a product conditions the agreement upon
the buyer’s or lessee’s promise not to deal in a competitor’s goods are:
a. tying arrangements.
b. exclusive dealing arrangements.
c. attempts to monopolize.
d. None of these.
It is per se illegal under the Sherman Act for sellers to agree to a maximum price, but
not a minimum price.
a. True
b. False
Intentional harm to the person includes which of the following torts?
a. Assault.
b. Nuisance.
c. Conversion.
d. All of these.
Al owns a farm that he believes is worth $150,000. Betty knows that there is oil under
the farm and offers Al $160,000 for it. Al is suspicious and asks her why she wants to
buy the place. She says she would like to live in the country. Al then asks her if she
thinks there might be valuable minerals under the land. Betty laughs and says she
doubts that very much, so Al sells her the farm for $160,000. Al later realizes that the
land was worth more than he was paid. Al can have the contract voided based upon
fraud.
a. True
b. False
Scienter is a legal term which means:
a. that a buyer has justifiably relied upon the seller’s representation.
b. that the seller had knowledge that his statements were false and the statements were
made with the intention to deceive.
c. sales puffery.
d. All of these.
The court in Cooperative Centrale Raiffeisen-Boerenleenbank B.A. v. Bailey found:
a. whether an instrument is negotiable is a question of fact.
b. whether an instrument is negotiable is to be determined without reference to the
intent of the parties.
c. the wording of the note was unclear and therefore it did not fall within the UCC
Article 3 requirements of negotiability.
d. the question of whether the promissory note was negotiable had to be determined by
questioning the parties to the transaction as to their intent.
Sam goes to the movies one Friday evening. The movie is boring and Sam falls asleep.
At 2 a.m., the security guard locks the building. Sam awakens the next morning when
the cleaning crew opens the door. Sam can sue for false imprisonment.
a. True
b. False
In determining whether a contract containing both a sale of goods and a service is a
UCC contract or general contract, a majority of states follow the predominant purpose
test.
a. True
b. False
Failure to comply with Section 1, but not Section 2, of the Sherman Act is a criminal
violation.
a. True
b. False
Which article of the UCC governs “negotiable instruments”?
a. Article
b. Article
c. Article
d. Article
An obligation to pay a negotiable instrument subject to conditions precedent is known
as:
a. primary liability.
b. secondary liability.
c. acceptance.
d. dishonor.
A famous decision involving mistake in the meaning of contractual terms is Raffles v.
Wichelhaus, a case involving two ships with the same name which were confused by
the two parties. Neither party was at fault, and the court held that no contract existed.
a. True
b. False
Jake signed and delivered a negotiable promissory note payable to Nancy. Nancy
negotiated the note to Fred. Fred now has the same legal status as an assignee of a
contract.
a. True
b. False
Federal district courts may hear all matters collateral to the bankruptcy, even if these
matters are not normally permitted to be brought in federal court.
a. True
b. False
Cameron doesn’t like Bradley, so at a cocktail party he spread untrue rumors about
Bradleys lifestyle. These rumors harm Bradley’s reputation in the community.
a. Cameron is guilty of libel.
b. Cameron is guilty of slander.
c. Bradley does not have a defamation suit against Cameron.
d. Cameron is protected by the First Amendment to the Constitution.
LLC statutes all require the articles of organization:
a. to include whether the LLC will be managed by managers who may, but need not be,
members.
b. to be in writing and filed with the state.
c. to include in the name of the business the designation “limited liability company or
“LLC.
d. to include the name of the firm and the address of the principal place of business or
registered office.
e. All of these.
In an output contract, the seller can operate a factory on a 24-hour-a-day schedule and
insist that the buyer take all of the output when that buyer had operated only eight hours
a day at the time the contract was made and the buyer had knowledge only of the
eight-hour-a-day operating schedule.
a. True
b. False
A company may be considered insolvent under the Code only if it is unable to pay its
debts as they are due.
a. True
b. False
The student government of State University has a contract with a famous rock band to
perform at the university on homecoming weekend. The band cannot assign its rights
and delegate its duties under this contract.
a. True
b. False
A and B enter into a contract on January 1 of this year. A‘s friend C tells A, “The law
generally restricts the time within which an action can be brought by either party to a
contract.” C‘s statement is:
a. false.
b. true because of statutes of limitations.
c. true because of the law of repudiation.
d. true because of covenants not to sue.
Real defenses include all but:
a. forgery of the instrument.
b. minority of the maker.
c. fraudulent alteration.
d. theft of a bearer instrument.
Which of the following best expresses the policy behind the Truth-in-Lending Act?
a. To help borrowers by requiring lenders to charge a “reasonable” rate of interest as
determined by the Federal Reserve Board.
b. To help small business by requiring that lenders not use as collateral for secured
loans a business’s most important assets.
c. To help debtors for loans for personal, family, or household purpose to be armed with
the necessary information on a loan to better bargain for credit and to choose the
creditor with the best terms.
d. To help lenders by permitting them to investigate a person’s credit history without
having to worry about state libel laws.
Jim promises to marry Cynda if Cynda will buy him a new Ferrari for his birthday. If
this promise is made orally, it is not enforceable.
a. True
b. False
Most LLC statutes expressly provide for mergers, which would allow Northern LLC
and Southern LLC to combine all of their assets into Northern LLC, with Northern
being the surviving LLC and Southern being the merged LLC.
a. True
b. False
Which of the following is enforceable without consideration?
a. A new promise to pay a debt barred by the statute of limitations.
b. An illusory promise.
c. A promise to supply all of the materials a manufacturer will need for the production
of a certain item for a specified period of time.
d. In the majority of states, a promise by a father to pay someone for rendering
emergency services to his injured son before the father had arrived at the accident
scene.