Imogene takes her diamond solitaire ring to Sparkle Jewelry Shop to have the prongs
holding the diamond retipped and have the ring cleaned. The clerk at Sparkle says she
will have to leave the ring and that it should be ready in about a week. When Imogene
returns in a week to get her ring, she finds out that the ring has been sold. Which of the
following is true?
a. Sparkle Jewelry Shop had the power to transfer all of Imogene’s rights in the ring to a
good faith buyer in the ordinary course of business.
b. This situation was a theft of the ring by Sparkle, and Sparkle must retrieve the ring
and return it to Imogene.
c. The buyer of the ring must return it to Imogene since the buyer did not fully
investigate whether Sparkle had good title to the ring.
d. Imogene has lost title to her ring and has no recourse since she is responsible for
investigating the merchant’s integrity before leaving her property.
When the per se standard applies, the plaintiff:
a. needs only to prove the existence of the conduct.
b. must prove that the activity was an unreasonable restraint of trade.
c. must show that there was an anti-competitive impact.
d. None of the above.
Lois receives an e-mail asking her to update her personal information on a website that
is an illegal imitation of a legitimate site. This practice:
a. is a crime called phishing.
b. is a tort called information theft.
c. is a breach of contract action known as shilling.
d. may be prosecuted under the GLB Privacy Act.
If a condition does not occur:
a. public policy will require only substantial performance by the party for whom the
condition failed.
b. the requirement of good faith will be eliminated.
c. one party will probably be discharged without performance being required.
d. it is considered an anticipatory breach.
The issue of the constitutional protections afforded flag burning was addressed in:
a. Texas v. Johnson.
b. United States v. Lopez.
c. Marbury v. Madison.
d. Palmore v. Sidoti.
Diane, a police officer, stops Tim’s car for a traffic offense. While talking to Tim, she
shines a flashlight into the passenger compartment of Tim’s car and sees evidence of
drug paraphernalia. Which statement is correct?
a. Diane may search the passenger compartment of the car and any place else in the car,
including the trunk, without Tim’s consent.
b. Diane may search the passenger compartment of the car without Tim’s consent;
however, she may not search the trunk of the car without his consent or without a search
warrant.
c. Diane may not search the passenger compartment of the car (nor any place else)
without Tim’s consent or a search warrant. However, she can require Tim to remain
parked until the search warrant is brought to her.
d. Under the above circumstances, Diane can write Tim a traffic citation but cannot
search the vehicle.
To be negotiable, a check must be in writing. Under the UCC, a check:
a. must be written on standard size paper of 6″ 2.5″.
b. must be written on an official bank form.
c. need not be on any official form or even on paper.
d. Both a and b are requirements for a negotiable check.
Alex is a director of ABC, Inc. Alex wants to personally make a major purchase from
Bravo Co. If it knew of the opportunity, ABC might be also interested in making that
same purchase. Alex must:
a. advise the boards of both corporations of his conflict of interest.
b. first offer the opportunity to make the purchase to the disinterested directors of ABC
or its shareholders.
c. resign from the board of directors.
d. abandon the idea of making the purchase himself.
Nortron Corporation wants to create an ethical environment in its company. Which of
the following has been found to help foster a sense of ethics within an organization?
a. The company may develop a formal, written ethics code.
b. The company may institute a formal ethics training program for the employees.
c. The top executives may provide good examples by behaving ethically themselves.
d. All of these alternatives have been used by U.S. companies to create an ethical
environment in their organizations.
Eintz Corp. hired Jose to bribe a foreign government official into awarding a $3 million
contract to Eintz. Eintz gave Jose $10,000 in cash to make the bribe payment and $2000
for Jose’s efforts. Instead of paying the bribe, Jose pocketed all of the money. If Eintz
sues Jose, Eintz will:
a. be able to recover the $12,000.
b. be able to recover the $3 million lost on the contract.
c. be able to recover the $2,000 but not the $10,000.
d. not be able to recover the $12,000.
Rachel works for the Internal Revenue Service, but keeps some personal information on
her computer at work. The Fourth Amendment to the Constitution, prohibiting
unreasonable searches and seizures, does not apply to the government’s right to obtain
personal information on her computer.
a. True
b. False
To be negotiated, bearer paper must simply be delivered to the recipient.
a. True
b. False
Congress can create a statute only on topics that are suggested by the President.
a. True
b. False
Carswell, a contractor, enters into a contract with Helen, a homeowner, to remodel her
bathroom. The contract provides a specific completion date. The contract provides that
if Carswell does not have the job finished by the date, Helen may deduct $200 per day
from the contract price until the job is finished. This is an example of liquidated
damages.
a. True
b. False
The Equal Credit Opportunity Act makes it illegal for a lender to discriminate against a
potential borrower because of race, national origin, religion, or sex, but it is permissible
to treat a borrower differently if he or she is on welfare.
a. True
b. False
Courts enforce all promises in the interests of simple morality.
a. True
b. False
Jorgeson Co., on its website, promised the company would not give PII to third parties
without the customers consent, but then gave out such information. This practice
violates Section 5 of the FTC Act.
a. True
b. False
The courts will find an implied contract when:
a. justice demands it.
b. conduct of the parties indicates they intended an agreement.
c. there is promissory estoppel.
d. there is undue influence.
Which of the following can be negotiable?
a. A promissory note that states, “Pay to Floyd Burchett $3000 on September 1, 2015.”
b. A check written on the standard check form that does not state the date it was issued.
c. A promissory note from Farmer Douglas to Hainey Seeds, Inc. promising to pay for
the seed purchased in the spring with bushels of grain harvested in the fall.
d. An oral promise to pay to the order of Justin $500 on demand.
Under the UCC, if a seller of goods breaches the contract, the buyer:
a. must “cover.
b. may receive only the current market value of the goods.
c. may “cover and then receive the difference between the original contract price and
the “cover price.
d. will be awarded the difference between the original contract price and the market
value of the goods if the buyer chooses to “cover.
Virginia borrowed money from G & L Lending at 35% interest per year. The state
maximum interest rate is 20% per year. Virginia defaulted on the loan. What amount
can G& L collect from Virginia?
a. G & L will be able to collect the principal plus 20% interest per year.
b. G & L will be able to collect the principal but not any interest.
c. G & L will not be able to collect either the principal or interest.
d. Any one of the above may be correct. The answer depends on the particular state law.
A principal must indemnify an agent for any expenses incurred in carrying out agency
responsibilities, but the principal will not be responsible for indemnifying an agent for
any unauthorized purchases.
a. True
b. False
Travel Lines offered to sell 10 round-trip tickets to Elaine. Travel Lines stated that the
acceptance must be in writing by USPS next-day service. Which of the following
acceptances will create a contract between Travel Lines and Elaine?
a. Elaine calls Travel Lines and states that she will buy the tickets.
b. Elaine sends a fax to Travel Lines stating she will buy the tickets.
c. Elaine sends a letter by USPS next-day service to Travel Lines stating that she will
buy the tickets.
d. All of the above responses will create a contract between Travel Lines and Elaine
since they constitute reasonable means of communication.
The parties to a criminal trial are the government and the defendant.
a. True
b. False
Zeno, Inc. is considering relocating its manufacturing facility from Illinois to Mexico
City. The stakeholders in this decision might include:
a. Zeno’s shareholders.
b. customers.
c. the Illinois community in which Zeno operates.
d. All of these.
Strict liability is based on contract law.
a. True
b. False
John owns a thoroughbred horse named Prince Charming that just ran in the Kentucky
Derby. Prince Charming came in last, much to John’s frustration and embarrassment.
John exclaims in a loud voice, “I’m selling that horse to the first person who hands me
$100 bucks!” John has:
a. made an offer to anyone within hearing distance and will be bound by his offer to the
first person who produces $100.
b. made a firm offer and will be bound by his offer for a reasonable period of time.
c. made an acceptance to the first person who can produce $100.
d. not made an offer because under the circumstances a reasonable person would not
conclude that John had intent to make an offer.
Illegally obtained evidence is not permitted to be used at a criminal trial based upon the:
a. silver plate doctrine.
b. exclusionary rule
c. fair play doctrine.
d. Eighth Amendment.
Regency Construction placed an order for two hundred 2 x 4s from Lumber Jack. If the
place of delivery and time for shipping the goods are not specified, the UCC provides:
a. the place of delivery is Lumber Jacks and the time for delivering the lumber is a
reasonable time based on normal trade practice.
b. the place of delivery is Regency Construction and the time for shipping is within 30
days.
c. the place of delivery is Lumber Jacks and the time for delivering the lumber is within
30 days.
d. there is no contract because having more than one open term made the offer too
indefinite.
Which of the following limitations does not apply to the government in civil
proceedings to take a person’s liberty or property?
a. Procedural Due Process.
b. The Takings Clause.
c. Substantive Due Process.
d. The Equal Protection Clause.
The fraudulent conversion of property which is already in the defendant’s possession is:
a. money laundering.
b. exclusion.
c. embezzlement.
d. trespassory taking.
In a promissory estoppel case, a court will generally award:
a. only reliance damages.
b. specific performance.
c. both reliance and punitive damages.
d. only nominal damages.