The parol evidence rule may not apply if:
a. the contract is materially incomplete.
b. the parties disagree on the meaning of the contract.
c. there is no ambiguity regarding the terms of the contract.
d. one party is unable to perform the contractual obligations.
The party making an assignment is called the:
a. assignee.
b. assignor.
c. obligor.
d. successor.
Positive law:
a. is enacted by government authority.
b. ensures that businesses will follow a high level of ethical standards.
c. is also known as natural law.
d. all of the above.
When two corporations merge:
a. their separate existences cease, and a new corporation is formed.
b. one of the corporations absorbs the other.
c. each corporation’s stockholders keep their original shares of stock
d. a new charter is needed.
The __________ rule allows management immunity from liability for corporate acts
where there is a reasonable indication that the acts were made in good faith and with
due care.
a. sovereign immunity
b. business judgment
c. reasonable director
d. good faith
Section __________ of the Sherman Act applies to agreements, conduct, or
conspiracies to restrain trade, which can consist of price-fixing, typing, and
monopolization.
a. A
b. B
c. 1
d. 2
Laws that prohibit defamation, invasions of privacy, and reputation exist primarily:
a. for protection of the person.
b. for protection of public health, safety, and morals.
c. for protection of property.
d. for protection of the state.
The _____ rule(s) on the admissibility of evidence.
a. Judge
b. Jury
c. Attorneys
d. court clerk
In which of the following cases is a contract between A and B binding?
a. A makes a mistake of material fact, and the mistake is unknown by B.
b. A and B make the same mistake of material fact.
c. A recklessly but honestly misrepresents a material fact.
d. A innocently misrepresents a material fact.
Each limited partner in a limited partnership is entitled to which of the following?
a. A share of the profits.
b. The right to sue the general partner to protect the limited partners’ interest.
c. Both a. and b.
d. Neither a. nor b.
Which of the following is not a duty of a trustee?
a. to use reasonable skill
b. to keep accurate records
c. to invest trust assets
d. to deliver possession of trust assets to the settlor for the trust period
In determining the rights of partner Dewey in the firm of Dewey, Cheatham and Howe,
the most important reference point is:
a. the Uniform Partnership Act.
b. the partnership agreement.
c. the sworn testimony of Cheatham and Howe.
d. the customs and traditions of similar partnerships.
The liability of a shareholder in a professional corporation for the malpractice of an
associate:
a. varies from state to state.
b. is sometimes determined in court.
c. both a. and b.
d. neither a. not b.
Companies who have misrepresented the capabilities of their search engines or failed to
disclose the methods whereby they give preference to certain links:
a. may be liable for fraud, but are not responsible for either rescission or damages.
b. may be liable for fraud, but if so are only responsible for rescission.
c. may be liable for fraud, but if so are only responsible for damages.
d. may be liable for fraud, and if so might be responsible for rescission or damages.
To avoid litigation over impossibility and impracticability issues, modern contracting
parties often contract around the doctrine of impossibility, specifying the failures that
will excuse performance in their contracts. The clauses in which they do this are called
__________ clauses, and they are generally enforced by courts as written.
a. delta force
b. force majeure
c. magnum force
d. force corporeal
With regard to the law concerning nuisance:
a. the law recognizes legal remedies for a public, but not private, nuisance.
b. the courts do not balance the protection of the plaintiff against the social utility of the
activity.
c. the fact that the plaintiff suffered annoyance or inconvenience is sufficient to
establish a nuisance.
d. a finding that conduct is socially desirable may outweigh harm to a particular
plaintiff.
A finance company may reject an applicant for a loan on the grounds that the applicant
is:
a. married.
b. sixty-five or older.
c. divorced.
d. none of the above.
The damages that are typically recoverable when a contract has been breached and one
party has suffered loss are called:
a. punitive damages.
b. emotional distress damages.
c. compensatory damages.
d. liquidated damages.
An assignee of a partner’s interest does not become a partner without the consent of the
other partners and is only entitled to:
a. participate in the management of the partnership.
b. receive the assignor’s share of the profits during the term of the partnership and the
assignor’s share of capital on dissolution.
c. inspect the books of the partnership.
d. vote on matters concerning the business of the partnership.
Partners are:
a. jointly liable on all firm contracts and for all torts committed by one of the partners in
the scope of partnership business.
b. jointly and severally liable on all firm contracts and for all torts committed by one of
the partners in the scope of partnership business.
c. jointly and severally liable on all firm contracts and jointly liable for all torts
committed by one of the partners in the scope of partnership business.
d. jointly liable on all firm contracts and jointly and severally liable for all torts
committed by one of the partners in the scope of partnership business.
The substitution of an old contract for a new one that replaces an obligation or a party
for another is a:
a. novation.
b. warranty.
c. assignment.
d. delegation of duties.
The Uniform Commercial Code contains a statute of frauds rule relating to sales of
personal property, specifically:
a. goods.
b. chattel paper.
c. real property.
d. none of the above.
Negotiable instruments are:
a. formal contracts.
b. informal contracts.
c. option contracts.
d. first-refusal agreements.
To be negotiable, an instrument must:
a. be in writing.
b. be signed by the maker or the drawer.
c. contain a promise or order to pay.
d. all of the above.
Corporations may ________ officers, directors, employees, and agents when they act in
good faith, in a manner not opposed to corporate interests and with no reason to believe
their conduct was unlawful.
a. ratify
b. breach
c. indemnify
d. authorize
Agreements that are illegal are:
a. enforceable if one party acted in good faith.
b. voidable by one of the parties.
c. void.
d. voidable by either party.
__________ represents a pattern of performance between the parties to a contract.
a. Course of dealing
b. Usage of trade
c. Course of trade
d. Usage of dealing
Three types of patents available under U.S. law are:
a. utility, product, design.
b. design, packaging, invention.
c. design, plant, utility.
d. utility, regulatory, common law.
Equipment attached to a rented building by a tenant and used in business is:
a. called a trade fixture.
b. called a business fixture.
c. called a commercial fixture.
d. not a fixture.
An assignment is valid only if:
a. it is in a particular form.
b. it is written.
c. there is a manifestation of the intent to assign.
d. the assignment is paid for by the assignee.
An acceptance must be absolute and unconditional.
Collective bargaining contracts govern the rights of employers and employees only in
public sectors of employment.
Under the Litigation Reform Act of 1995, issuers of forward-looking statements that
were not knowingly false when made have a safe harbor from related lawsuits if
appropriate cautionary language was included.
Thomas works for an internationally-renowned computer company. As a condition of
his employment, Thomas signed a confidentiality agreement, in which he agreed not to
disclose any trade secrets of the firm. The company has been researching a new
computer advancement, and is on the brink of introducing this product to the buying
public. Before the official product release, Thomas is considering offering information
related to this new advancement to one of his company’s competitors for a price. What
categories of ethical behavior might be impacted by Thomas’ decision to disclose this
information to his employer’s competitor?
The Equal Employment Opportunity Commission (EEOC) establishes equal
employment opportunity policy under the laws that it administers.
An insurer may cancel any contract of insurance by the insurer’s unilateral act as long as
the insurer gives advance written notice.
Corrective advertising required by the FTC also is called retroactive advertising.
The term “cyberlaw” refers to laws and precedent applicable to Internet transactions and
communications.
In the absence of an agreement for the extension of credit to the buyer for the purchase
of goods, and until the buyer pays for the goods or performs whatever actions the
contract requires, the seller has the right to retain possession of the goods.
The Litigation Reform Act of 1995 provides for joint and several liability for
defendants who are found not to have knowingly committed a violation of the security
laws.
John received a promotion at work and felt new clothes would be necessary in the new
position. John went to a local store and charged three ties on his charge account at a
cost of $60 each. Bill, a friend of John’s, saw a sidewalk vendor selling ties at a cost of
three for $10 and bought three at that price. The friends compared purchases that night
and found that they had purchased identical ties. John became enraged and said that he
would not pay the charge-account bill because the ties were clearly not worth $60 each.
Bill indicated that he would testify on John’s behalf if litigation ensued. What would be
the probable outcome of the lawsuit?
A condition subsequent can alter but not terminate a contract.
An administrative agency whose erroneous decision causes a regulated person or
enterprise substantial loss is liable for such loss regardless of whether the agency acted
in good faith.
An accumulation of complaints from employees, customers, or investors can lead to
imposition of restrictive new regulations and laws.
A person entitled to receive money may generally assign that right to another person.
The FTC requires that only descriptive and non-ambiguous terms such as jumbo, giant,
or full be used in product labeling.
When a person picks out a specific necktie and purchases it, the transaction involves
identified goods.
At common law, a minor cannot be held contractually liable for his or her necessary
medical expenses when the parent is unable or unwilling to pay.
No law requires a seller to make an express warranty.
Title VII applies to the hiring process and to discipline, discharge, promotion, and
benefits.