An agent will not be authorized to act for a principal unless he receives some
consideration for the task.
a. True
b. False
Contractual incapacity excuses a minor from an obligation to pay for necessaries.
a. True
b. False
If an agency is gratuitous, the principal ordinarily may revoke it without liability to the
agent.
a. True
b. False
When goods are to be physically moved by a third-party carrier and delivery is made by
physically moving the goods, title passes at the time and place at which the seller
completes performance.
a. True
b. False
The UCC statute of frauds requires that the writing include all agreed-upon terms.
a. True
b. False
A duty to act is imposed on those whose innocent conduct has injured another and left
him helpless and in danger of further harm.
a. True
b. False
Fourteen-year-old Marsha bought $120 worth of video games at a local store, using her
own money. Her parents insisted that she return the items and get her money back.
Which of the following is true?
a. If there is a conflict, the stores return policy will override Marshas right of
disaffirmation.
b. In most jurisdictions, Marsha may get her money back only if she has not opened or
damaged the merchandise in any way.
c. In a majority of jurisdictions, Marsha may get her money back even if she cannot
return the merchandise.
d. In most jurisdictions, Marsha may get some of her money back but she must pay the
reasonable value of the goods if that differs from the contract price.
The doctrine of ultra vires is of more significance today than it has been in the past.
a. True
b. False
Under the RUPA, dissolution occurs automatically upon the happening of an event
specified in the partnership agreement as resulting in dissolution. The partners may not
agree to continue the business.
a. True
b. False
Divided Parcel (DP) includes the following on its mailing receipts: “We are not
responsible for any damages to packages whether or not through the intentional or
reckless fault or negligence of our employees. Send packages at your own risk.” Mary
reads this clause but sends her watch back to the manufacturer to be repaired anyway.
The watch is destroyed when the DP driver uses the package for a ball and tosses it to
his buddy. Mary is:
a. out of luck because the clause was communicated to her.
b. out of luck because she should have insured the package.
c. likely to collect from DP since exculpatory clauses always violate public policy.
d. likely to collect from DP because it attempted to excuse intentional and reckless
behavior.
If a minor sells property that the buyer then resells to a good faith purchaser for value
and the minor then disaffirms the sales contract, under both the traditional view and the
UCC, the minor can recover the property from the good faith purchaser for value since
the minor has the power of avoidance and both purchasers had only voidable title.
a. True
b. False
Marketable title means that the title is free from which of the following?
a. Encumbrances.
b. Defects in the chain of title not appearing in the land records.
c. Variances from zoning ordinances.
d. All of these.
In the Parlato v. Equitable Life Assurance Society of the United States case, the court
held:
a. the duty is on the party with whom an agent deals to discover the principals identity.
b. the agents disclosure of a trade name and the plaintiffs awareness of that name are
sufficient to protect an agent from personal liability on a contract.
c. a principal is not responsible for torts its former agent commits after termination of
the agency relationship against a third party unknown to the principal.
d. apparent authority of an agent is always terminated at the same time as the
termination of the agents actual authority.
Specific performance is the usual judicially granted remedy for breach of contract.
a. True
b. False
Which of the following is correct with regard to common stock?
a. The Revised Act has eliminated the terms “preferred” and “common.”
b. Common stock does not have any special contract rights or preferences.
c. Common stock generally bears the greatest risk of loss in the event of the failure of
the enterprise.
d. All of these are correct with regard to common stock.
According to the UCC, a computer purchased by a CPA for use in her office will be
classified as inventory.
a. True
b. False
Upon dissolution, a partner still has authority to complete existing contracts.
a. True
b. False
a. Explain the meaning of “public policy in the context that an agreement is void
because it violates public policy.
b. List the most common forms of agreements that violate public policy.
If Arthur were as yet childless, which of the following present grants would be
considered as creating a contingent remainder?
a. “To Arthur and his heirs forever and ever.”
b. “To Arthur for life and then to his first-born son, but if he has no male children, then
to the Catholic Church.”
c. “To Arthur for life, then to grantor.
d. “To Arthur for 100 years and then to the Catholic Church.”
Arnold wrote a defamatory letter regarding Bill which he did not show to anyone, but
which he posted on a bulletin board in the laundromat. Arnold has committed:
a. the tort of slander.
b. the tort of libel.
c. neither libel nor slander, because there has been no publication of the letter.
d. the tort of false light.
Bonds subject to a redemption provision, which permits the corporation to redeem, or
pay off, all or a part of the issue before maturity at a specified redemption price are
known as:
a. secured bonds.
b. income bonds.
c. callable bonds.
d. convertible bonds.
Nineteen-year-old Martin was raised in a good, Christian home and attended parochial
school through eighth grade. Martin is a good student and citizen who conforms to the
expectations of his church, family, and peers. He does so because he loves his family
and church, is loyal to them, and trusts them. Under Kohlberg’s schematic analysis,
Martin is most likely at what stage of moral development?
a. Pre-conventional.
b. Conventional.
c. Post-conventional.
d. Adult.
A lightning strike causes an explosion at Johnson’s Oil refinery, which was located
close to Maintown. Fumes from the resulting fires at the plant have sent the nearby
townspeople to the hospital for severe respiratory distress. Johnson’s Oil will be liable
for the townspeople’s injuries directly resulting from the fumes.
a. True
b. False
Mother conveyed her lakefront property to her daughter, Ellen, for life and then to
Ellen’s children, but if Ellen had no children, to Mark. Mark has a contingent remainder.
a. True
b. False
Scienter is the element of fraud that requires that the misrepresentation must have been
known by the one making it to be false and must have been made with an intent to
deceive.
a. True
b. False
A shareholder has no right to dissent from compulsory share exchanges.
a. True
b. False
To lessen his tax liability, a client asks his accountant to misstate information on his tax
return. If the accountant does so, she may be subject to fines and up to three years in
prison.
a. True
b. False
Someone who expressly assumes a mortgage is personally obligated to pay it.
a. True
b. False
Even though contributory negligence is proven by a defendant in a state in which it acts
as a complete bar to recovery, the plaintiff may still recover if the defendant had the last
clear chance to avoid the injury.
a. True
b. False