Book Title
Business Law with UCC Applications 14th Edition

Business Law 40046

March 1, 2019
The primary job of the Chief Technology Officer of the United States is to:
A. build an integrated technology policy especially designed to meet the needs of the
national government.
B. support scientific research, to stimulate the national economy, and to safeguard
national security.
C. conduct research into all aspects of human life and health and to apply that
understanding to cure illnesses, to alleviate disabilities, and to lengthen human life.
D. coordinate advances in technology that will help improve the American economy.
Chandra is an invalid and, therefore, she cannot put her signature on her will. Her friend
Nina signs the will for her. When Nina signs on behalf of Chandra, there is no one else
in the house. Is the will valid?
A. Yes, since Chandra was present during the time the will was signed.
B. No, since she did not date it.
C. Yes, since she is presumed to be mentally competent.
D. No, since there were no witnesses present during the signing of the will.
Mark is mentally incompetent and delights in signing documents. Henry persuades
Mark to sign numerous promissory notes which he negotiates. Must Mark pay these
notes if they have been held by holders in due course?
A. Mark must pay these notes since duress is not involved.
B. Mark does not have to pay these notes since he has a real defense.
C. Mark must pay these notes since there is a fraud in the inducement.
D. Mark may not pay these notes since no one could anticipate this happening.
Jo is duly notified that her mortgage with Fund All Savings has been transferred to Big
Loan Co. and that she should, henceforth, pay Big Loan Co. Jo continues to pay Fund
All Savings and Big Loan Co. sues Jo for nonpayment. Which of the following is most
likely to be the court's judgment?
A. Jo is not liable to Big Loan Co., since she has already paid to Fund All Savings.
B. Jo is liable to Fund All Savings and to Big Loan Co., since her mortgage has been
C. Jo is liable to Fund All Savings, since her mortgage was processed by them.
D. Jo is liable to Big Loan Co., since she received a notice from them about the
If Ann sued Sharon for assault without any factual basis, and the jury ruled in favor of
Sharon, Sharon in turn may sue Ann for:
A. abuse of process.
B. contributory negligence.
C. misuse of legal procedure.
D. malicious prosecution.
A defense that may not be used against a holder in due course of a negotiable
instrument is a:
A. limited defense.
B. personal defense.
C. real defense.
D. secondary defense.
Rosa sends an offer to Kellen that requires acceptance to be made by U.S. mail. Kellen
accepts in a timely manner, but sends the acceptance by FedEx which delivers the
acceptance to Rosa two days faster than the U.S. mail would. Under traditional
common law rules, has Kellen accepted Rosa's offer?
A. No, since the offer specified a particular manner of acceptance that was not used.
B. Yes, since FedEx was faster than the U.S. mail.
C. No, since the acceptance was delivered by a private, rather than a public, delivery
D. Yes, since acceptance sent in any form—even if early or delayed—confirms the
In the Opening Case, the plaintiff-nurse alleged the defendant-hospital did (did not) do
all of the following except:
A. did not properly train the nurse for the task of dealing with such cases.
B. did not provide her with proper protective gear.
C. did not train her in the gear she was given, inadequate though it was.
D. provide her with effective assistance of counsel.
Jim borrowed Sally's car to get to class when his car did not start. After attending the
class, he uses the car to visit his grandmother. While on his way, he enters an
intersection when the light is just turning from yellow to red and meets with an
accident. What is the Jim's legal position regarding the car?
A. Jim is only liable for reasonable care of the car.
B. Jim is only liable if he committed gross negligence.
C. Jim is only liable if he committed slight negligence.
D. Jim has no liability.
Joe pays for his food at the drive-thru window as he receives it. The payment and the
receipt of the food are ____________ conditions.
A. precedent
B. concurrent
C. subsequent
D. spontaneous
The International Criminal Court:
A. uses the prisons of member nations.
B. has jurisdiction over individual defendants.
C. does not have imprisonment as punishment.
D. uses exile and imprisonment in the nation of the victim as punishment.
Kaycee obtains fire insurance on an empty warehouse. Later, Kaycee manufactures and
stores fireworks in the building. A lightning strike in a thunderstorm explodes the
fireworks and destroys the building. The fire insurance policy is:
A. valid, since the building was empty when the policy was obtained.
B. void, since a material change in risk occurred.
C. voidable if the lightning was not foreseeable.
D. valid, since there are negligible liabilities which applies to storing fireworks.
Which of the following is true of rejection of goods by the buyer?
A. A rejection by the buyer can be done even after the buyer has expressed acceptance
of the goods.
B. A buyer can claim ownership of the goods even after rejection.
C. A rejection by the buyer can occur even before the goods are tendered and inspected.
D. A rejection must be done within a reasonable time after delivery or tender to the
Global Industries requires all new employees to be at least six feet tall to comply with
their brand and marketing campaign slogan, "We're Big Enough to Serve You." People
who are denied employment solely because of their height sue Global. What must
Global prove?
A. Height is directly related to the specific job in question.
B. Nothing, since the burden of proof is on the people who sue.
C. Height is directly related to Global's general business needs.
D. Nothing, since Global applies the height standard in a nondiscriminatory manner.
____________ is only a defense to charges of criminal liability if it destroys one of the
elements necessary to that crime.
A. Self-defense
B. Mistake
C. Battered spouse syndrome
D. Defense of others
In a(n) ____________, the jury provides an advisory verdict based on the facts.
A. summary jury trial
B. med-Arb hearing
C. early neutral evaluation
D. mediation
Tom and Nancy enter into a written contract for the sale of a dollhouse that Tom will
custom-make for Nancy. In the contract, Nancy agrees to pay $350 if she breaks the
contract. This sum of money is known as:
A. mitigation of damages.
B. speculative damages.
C. equitable remedy.
D. liquidated damages.
A(n) ____________ is a conspiracy in which a union places pressure on a neutral
customer (with whom the union has no dispute) to cease doing business with the
employer, with whom the union has a dispute.
A. constructive discharge
B. featherbedding
C. secondary boycott
D. arbitration
A ____________ is a property right granted by the federal government to an inventor.
A. patent
B. copyright
C. royalty
D. trademark
Robert Kagan envisions a globe divided into a group of democracies, led by the United
States and the EU, and a group of autocracies led by Russia and China.
An attempt at a(n) ____________ occurs when one corporation makes a tender offer to
the shareholders of another corporation.
A. merger
B. consolidation
C. stock acquisition
D. asset acquisition
Some parties, when entered into a(n) ____________ contract may choose to cancel the
A. unenforceable
B. void
C. voidable
D. valid
Faith owes $50,000 to Investment Lenders, Inc., a partnership of Cindy and Ryan. She
is also a partner with Tom in a business venture. What insurable interests exist in this
A. Faith has an insurable interest in the lives of Cindy and Ryan.
B. Investment Lenders, Inc. has an insurable interest in Tom, but does not have an
insurable interest in Faith.
C. Only Tom and Faith have insurable interests.
D. Tom and Faith have insurable interests in each other's lives and Investment Lenders,
Inc. has an insurable interest in Faith.
According to the FTC's ____________, holders in due course who possess consumer
credit contracts are subject to all claims and defenses that the buyer could use against
the seller.
A. shelter provision
B. holder in due course rule
C. lack of consideration rule
D. universal defense rule
Matrix Corporation's board of directors decides not to outsource its U.S. jobs to China,
even though it would cut labor costs by fifty percent. Shareholders subsequently sued
the directors for failing to maximize profits. Under the traditional view, the directors
would be:
A. absolutely immune from any liability to the shareholders.
B. absolutely liable to the shareholders.
C. liable to the shareholders, unless they can prove their decision not to outsource was
made with the shareholders' profits interest above all other interests.
D. criminally liable, unless granted immunity by a federal prosecutor.
Which of these is true regarding "failure of consideration" and "lack of consideration"?
A. They are real defenses which can be used against holders in due course.
B. Failure of consideration is a real defense and lack of consideration is a personal
C. Failure of consideration is a personal defense and lack of consideration is a real
D. They are personal defenses which cannot be used against holders in due course.
Jeanie, a prosecutor, agrees with Martin not to prosecute Martin's son for drunk driving
in exchange for Martin employing her in his law firm two years after the drunken
driving charge is dismissed. This is a(n) ____________ that is ____________.
A. nondisclosure agreement; void
B. usurious agreement; voidable
C. agreement to escape liability; voidable
D. agreement to obstruct justice; void
Uncle Rodrick was deeply in debt when he died. His niece Evangeline became the
administrator of his estate. She orally promised Rodrick's creditors that she would
personally pay his debts if they would not publicize the fact that Rodrick died in debt.
When Evangeline was unable to pay the debts, the creditors sued her. Will the creditors
be legally able to collect from Evangeline?
A. Yes, since there was a bargained-for exchange.
B. No, since Evangeline was not Rodrick's child.
C. Yes, since Evangeline made a guaranty of payment.
D. No, since Evangeline's promise was not in writing and signed.
Milton is offered a contract by Marcos and Co. to design condos for a fourteen-story
structure. After the condos are completed, Marcos and Co. finds that instead of two
cupboards, all the condos have only one cupboard. The error is traced back to Milton's
faulty design. The error notwithstanding, the condos are still in absolutely usable
condition. What is Milton's liability?
A. Milton has to reimburse the client for any extra money spent to fit in an extra
B. Milton has to pay Marcos and Co. the difference between the market value of the
building as it stands and the market value of the intended structure.
C. Milton has to pay the tenants the cost for fitting in an extra cupboard.
D. Milton has to pay the state a fine for the inconvenience caused to the tenants.
Which of the following contains all the elements of a written agreement that can be
enforceable under law?
A. "Henry Shay agrees to purchase hand-knit sweaters for $45 apiece. Signed, Henry
B. "Silvie Nader and Henry Shay are parties involved in this contract for the purchase
of hand-knit sweaters on Wednesday, June 17. Signed, Henry Shay and Silvie Nader."
C. "Silvie agrees to mail six hand-knit sweaters, at $45 apiece, to the house on
Wednesday, June 17. Signed, Silvie Nader."
D. "Full Agreement by Henry Shay and Silvie Nader. Henry agrees to purchase from
Silvie six of Silvie's hand-knit sweaters at $45 each. Signed, Silvie Nader, and Henry
Ruby's husband Caleb dies with title to the family home in his name. Caleb's creditors
want to force the sale of the home to satisfy the unpaid debts. May Ruby prevent this
A. Not if the debts are legitimate.
B. Yes, based on the homestead exemption.
C. No, if the amount of debts exceeds the fair market value of the home.
D. Yes, with the forced share.

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