In order to constitute as a gift,
a. the donor must intend to transfer ownership of property within his or her lifetime.
b. the donee need not actually accept the gift.
c. the donor must deliver the gift property to the donee.
d. the donor may revoke the gift at any time.
Contracts in which one party agrees in good faith to buy all his requirements of certain
goods from the other party are generally unenforceable because there is no definite
amount.
a. True
b. False
McDonald’s famous golden arches and other marks used by the company illustrate a
a. suggestive mark.
b. service mark.
c. certification mark.
d. collective mark.
Dodger bought an insurance contract from Liberty Farm Co. The policy contained a
clause stating that all claims for losses had to be reported within 45 days after the date
of the loss or the claim would be barred. Time is stated to be of the essence. Dodger
sustained a covered farm loss, but did not report it to Liberty Farm until 50 days later.
Liberty Farm denied coverage for the claim. If Dodger sues, who wins?
a. Dodger wins; the contract was substantially performed.
b. Liberty Farm wins; there was failure of a condition subsequent.
c. Dodger wins; courts will not enforce a time-of-the-essence clause.
d. Liberty Farm wins; the impossibility doctrine applies.
TECO Coal Corporation is interested in the inspections that the U.S. Bureau of Mines
has conducted over the past year. To secure this information, TECO should
a. issue a subpoena duces tecum.
b. make a Freedom of Information Act request.
c. make a de novo request.
d. assert the substantial evidence rule.
Abraham has just purchased his first car. His bank, First State Bank, loaned him the
money to buy the car and has required him to purchase insurance to protect the car as
the collateral for the loan. Which basic types of coverage should Abraham buy to satisfy
the bank requirement and to best protect himself from the risks of operating an
automobile?
a. collision coverage only
b. collision and comprehensive coverage only
c. collision, uninsured motorist, and comprehensive coverage
d. collision, uninsured motorist, comprehensive, and liability coverage
“Bait and switch” tactics are not a violation of FTC rules if the merchant does not have
enough stock on hand to meet reasonable demand for the advertised product.
a. True
b. False
Which of the following states that if an agent is empowered to enter into a contract that
must be in writing, then the appointment of the agent must also be written?
a. Duty to obey instructions
b. Balanced contract rule
c. Fiduciary duty
d. Equal dignities rule
The disposal of nonhazardous solid waste is
a. generally regulated by state law, but the federal government sets guidelines that must
be followed.
b. the only area of environmental concern that has yet to be regulated by federal action.
c. completely governed by federal administrative law.
d. currently the subject of great debate since the federal government has declared such
activity falls under the Endangered Species Act and, therefore, a small annoying fly
known to frequent landfills must be protected.
International copyright protection is
a. automatic for works created in member countries of the Berne Convention.
b. granted for the life of the author plus 70 years under the Berne Convention.
c. not yet available for computer programs.
d. lacking in any enforcement capability for overseas infringement of works authored in
the United States.
According to section 2-302 of the UCC, if a court finds as a matter of law that a clause
of a contract was unconscionable at the time the contract was made, the court must
refuse to enforce the contract.
a. True
b. False
An employer may be liable for an employees sexual harassment if
a. The supervisor scheduled the plaintiff and defendant to work together.
b. The defendant showed signs of being distraught over the harassment.
c. The plaintiff suffered a “tangible employment action such as firing or demotion.
d. Any of the above.
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.
Nunnskys Retail sent out newspaper inserts advertising wool suits for $50. In fact, the
store had only two, out-of-style suits for sale at this price. Their other wool suits started
at $175. This constitutes bad faith in its advertising, so consumers may have protection
through state consumer protection statutes.
a. True
b. False
Brian is a police officer. He just turned 54 years old and is worried that he will be
forced to retire next year when he turns 55. The Age Discrimination in Employment Act
will protect him if his employer tries to force him to retire early.
a. True
b. False
When evaluating the right decision, deontological ethics bases its value on the
a. results of doing something.
b. happiness derived in doing something.
c. reason for doing something.
d. rules of why something is done.
A derivative lawsuit is filed by a shareholder of the corporation if his or her own rights
have been harmed.
a. True
b. False
Oxtron, Inc. sent the following price list to its customers.
Dispensers:
Which statement is correct?
a. These price quotes would generally be considered offers.
b. These price quotes would generally not be considered offers.
c. These price quotes would generally be considered output contracts.
d. These price quotes would generally be considered requirements contracts.
A corporation’s obligation to voluntarily provide shareholders with financial
information
a. depends on whether the company is publicly or privately held.
b. depends on the requirements of the Model Business Corporation Act.
c. is extensive and is carefully regulated by the SEC if the company is privately held.
d. depends on the ruling of the board of directors.
After completing an audit, the most unfavorable opinion an auditor can issue is a
disclaimer of opinion.
a. True
b. False
Mary contracted to buy 100 table lamps. Under the terms of the agreement, Mary is to
pay for the lamps upon delivery. This is an example of
a. a condition precedent.
b. a concurrent condition.
c. a condition subsequent.
d. a service condition.
Which of the following is NOT a true statement about fraud?
a. The plaintiff must prove that the defendant has knowledge of the falsity of his or her
statement.
b. It is necessary for the plaintiff to show that he or she has suffered some type of
detriment or injury because of his or her reasonable reliance on the defendant’s false
statement.
c. The defendant made the statement with the intent to induce the plaintiff to enter into
the contract.
d. The plaintiff must show that although the defendant acted in good faith, the statement
was material because the defendant expected the plaintiff to rely on it and enter into the
contract.
If the President vetoes a bill, it can still become law if both the House and the Senate
approve it with a 51% majority.
a. True
b. False
Retaliation means that an employer has done something that would deter a reasonable
worker from complaining about discrimination.
a. True
b. False
Jessica was a former employee of Mark. When potential employers called Mark for a
reference about Jessica, he stated she was not a very good worker and had been fired for
excessive absences. He said he had reason to believe Jessica was on drugs, but he
wasn’t absolutely certain. Jessica learned what Mark was saying and sued him. In most
states
a. under the qualified privilege rule, it was legal for Mark to say what he said if it was
true and Mark was not motivated by ill will.
b. it was legal for Mark to say what he said, since courts have consistently ruled that
former employers are immune from lawsuits for giving references.
c. it was not proper for Mark to say what he said, since courts have consistently ruled
that former employers should not give references over the telephone or in writing
without the former employee’s written authorization.
d. though it was proper for Mark to talk about Jessica’s work-related history, he should
have refrained from talking about her potential drug use.
Tuan is president and sole shareholder of Entertainment, Inc. Entertainment, Inc. wishes
to borrow money, but to do so, the bank requires Tuan to orally agree to personally pay
the debt of the corporation if Entertainment, Inc. cannot. Tuan’s guarantee to repay is
a. enforceable under the parol evidence rule.
b. unenforceable because there is no insurable interest.
c. enforceable because of the leading object rule.
d. unenforceable because it is a collateral promise.
In 1992, the North Carolina Supreme Court ruled in a case entitled Goodman v. Wenco
Foods, Inc., that when a substance in food causes injury to a consumer of the food, it is
not a bar to recovery against the seller that the substance was natural to the food. If, in a
2008 case involving a consumers injury caused by a fish bone in a bowl of fish
chowder, the court followed the decision in Goodman v. Wenco Foods, Inc., the court’s
action in the second case is an example of
a. stare decisis.
b. statutory law.
c. public law.
d. criminal law.
According to the UCC, one or more open terms will not cause a sales contract to fail for
indefiniteness as long as the parties intended to make a contract and there is a
reasonably certain basis for the court to determine the open terms.
a. True
b. False
The UCC’s requirement that contracting parties perform and enforce their deals
honestly is termed
a. conformance.
b. acceptance.
c. good faith.
d. reasonable action.
The goal of expectation interest is to
a. serve as a penalty for breaching a contract.
b. award damages under the UCC when the sale of goods is the subject of the contract.
c. put the non-breaching party in the position it would have been in had the contract
never been formed.
d. put the non-breaching party in the position it would have been in if the contract
hadn’t been breached.
The business form that offers the limited liability of a corporation and the tax status of a
flow-through entity is
a. a close corporation.
b. a sole proprietorship.
c. a limited liability company.
d. a general partnership.
Morefield Custom Design sends 30 recliners by rail to Danville Furniture. To show
where the goods will be shipped and who gets them when they arrive, Morefield will
obtain ____, which can be used as collateral in a secured transaction.
a. a warehouse receipt
b. a bill of lading
c. chattel paper
d. a deposit account
If competitors act in concert but without an explicit agreement, they are engaged in
a. a tying arrangement.
b. monopolization.
c. reciprocal dealing.
d. conscious parallelism.
Under the natural law theory of jurisprudence, an unjust law is no law at all.
a. True
b. False