Which of the following situations reflects a possible conflict of interest?
a. You offer a company contract to a friend without checking competing bids.
b. You hire a relative for a company position although another candidate is more
qualified.
c. You buy a piece of realty that would be suitable for a planned company project.
d. All of the above.
By the mere act of selling, a warranty is made that the:
a. goods are the finest available.
b. seller’s title is good and the transfer is rightful.
c. price is the lowest available.
d. all of the above.
A __________ is a combination of co-ownership and individual ownership.
a. cooperative
b. residential lease
c. commercial lease
d. condominium
A liquidation of damages clause in a consumer contract is enforceable if it:
a. is not in excess of twice the provable damages.
b. is agreed to by both parties to the contract.
c. reasonably attempts to estimate the actual harm caused by a breach.
d. is a reasonable amount designed to punish the breaching party.
Which of the following is not a sale of goods?
a. a bailment
b. an option to purchase
c. a gift
d. all of the above
Insurance designed to protect an insured driver or owner from the claims of others is
called:
a. collision insurance.
b. financial responsibility insurance.
c. liability insurance.
d. comprehensive insurance.
The dissolution and winding up of a limited partnership is governed by the same
principles applicable to a __________.
a. “Subchapter S” corporation.
b. limited liability company.
c. general partnership.
d. none of the above.
A deposition:
a. is the testimony of a witness taken under oath.
b. is conducted outside of the courtroom.
c. can be used to impeach a witness.
d. all of the above.
Paul purchased a house and also purchased fire insurance coverage on the house. The
policy contained an 80 percent coinsurance clause. Paul maintained coverage in the
amount of $150,000 and the value of the house was $250,000. A fire caused a loss of
$100,000. Paul will collect:
a. the full $100,000, because he had coverage for $150,000.
b. only part of the $100,000 loss, because he failed to maintain coverage at 80 percent
of the value of the house.
c. nothing, because he failed to maintain coverage at 80 percent of the value of the
house.
d. 80 percent of $250,000, or $200,000.
A contract or agreement to purchase a specific number and kind of shares of stock when
it is issued is called a stock:
a. guaranty.
b. subscription
c. request.
d. warranty.
A personal, revocable privilege to perform an act or series of acts upon the land of
another is called a(n):
a. easement.
b. tenement.
c. license.
d. lien.
An agent making a proper contract with a third person on behalf of a disclosed
principal:
a. has no personal liability on the contract.
b. is liable only to the principal on the contract.
c. is liable only to the third party on the contract.
d. is personally liable to both the principal and the third person on the contract.
When an employer has a contract with an employee for the employee to work for a set
period of time, which of the following would not justify discharging the employee?
a. financial hardship of the employer
b. nonperformance of duties by the employee
c. theft by the employee
d. possession of drugs by the employee
A contract is interpreted to give effect to:
a. the intent of the parties.
b. what the court believes is a fair contract.
c. what the defendant thought the contract meant.
d. what will be best for the economic life of the community.
If taxes or assessments on leased premises are increased because of improvements
made by the tenant the:
a. landlord is only liable for such increases if the improvements stay with the property.
b. landlord is liable for such increases whether or not the improvements stay with the
property.
c. landlord is liable for such increases only to the extent that the improvements actually
increase the fair market value of the property.
d. tenant is always liable for such increases.
When money is loaned at a greater rate of interest than is allowed by law, __________
is committed.
a. Usury
b. credit misfeasance
c. petty theft
d. credit malfeasance
Parol evidence may be admissible to:
a. contradict a complete written contract.
b. prove the modification or termination of a contract.
c. replace the statute of frauds.
d. create a contract.
Sales tax on Internet sales:
a. is never collected.
b. is always collected.
c. is collected if the seller has a physical presence in the state of sale.
d. follow the same rules for sales tax collected in brick and mortar stores.
A depositor issued a check and, after mailing the check, suffered a heart attack and died.
In the regular course of business, the bank paid the check when presented for payment,
despite the fact that the bank had received notice fourteen (14) days earlier of the
depositor’s death. In terms of the bank’s payment of the check
a. the bank is not because the payment was made within 20 days of the notification of
the death.
b. the bank is potentially liable to the depositor’s estate.
c. the bank is not liable unless the depositor’s executor posted an indemnity bond.
d. the bank’s authority to act for the depositor ended on the depositor’s death, regardless
of whether the bank had been notified of the depositor’s death.
As a general rule, courts will __________ in recovering money or property transferred
under an illegal agreement.
a. assist a commercial buyer
b. assist a non-commercial buyer
c. assist an institutional buyer
d. not aid either party
A surety that has made payment of a claim for which it was liable as a surety is entitled
to which of the following from the principal?
a. Indemnity
b. Exoneration
c. Assignment
d. Subrogation
One of the motions that can be made after a verdict has been entered is a motion for a:
a. mistrial.
b. summary judgment.
c. directed verdict.
d. judgment notwithstanding the verdict.
The most recent addition to the American governmental structure is the:
a. executive branch.
b. administrative agency.
c. judicial branch.
d. legislative branch.
Dissolution of a partnership:
a. always means that the business has ended.
b. increases the authority of the partners.
c. both a. and b.
d. neither a. nor b.
A limited liability partnership:
a. is taxed like a corporation.
b. provides limited liability for all partners.
c. shields innocent partners from personal liability beyond their investment.
d. All of the above.
A person who attempts to monopolize any part of the trade or commerce among the
states:
a. is guilty of a misdemeanor.
b. is guilty of a felony.
c. can be fined up to $500,000.
d. none of the above.
Laws that prohibit mislabeling of food, speeding, and sale of alcohol to minors 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.
Claims for wages, salaries, or commissions have priority in the payment of unsecured
debts over:
a. costs and expenses of the administration of the bankruptcy case.
b. claims arising in the ordinary course of business after commencement of the case.
c. claims arising for contributions to employee benefit plans.
d. all of the above.
When there is full disclosure and representation, promises made in consideration of
marriage:
a. can be written or oral.
b. generally cannot be set aside unless they are unconscionable.
c. are only valid if they are signed after the marriage actually takes place..
d. all of the above.
Which of the following is not a correct statement concerning wills?
a. Attestation is the act of witnessing the execution of a will.
b. Most states require two (2) witnesses to the execution of the will.
c. A will must be dated.
d. Self-proved wills are wills that carry a presumption that they are valid if executed
according to the requirements set forth by statute.
Which of the following statements describes a check?
a. The drawer is always a bank.
b. The maker is always a bank.
c. A check is generally payable on demand.
d. A check is a particular kind of note.
A summary jury trial is:
a. binding on the parties.
b. a mock trial.
c. a full and complete hearing of all evidence pertaining to the case.
d. a shortcut to establishing judicial precedent.
A bank that fails to carry out a payment order is usually liable for:
a. interest loss and expenses.
b. loss sustained by the originator.
c. consequential damages because the payment was not made.
d. all of the above.
An LLC is a legal entity with the authority to conduct business in its own name.
An insurance broker generally is an independent contractor who is not employed by any
one insurance company.
To successfully pursue a Title VII lawsuit, the plaintiff generally must belong to a
protected class.
Contracts may be discharged by the joint action of both contracting parties or, in some
cases, by the action of one party alone.
A professor owned a home next door to a very dilapidated, neglected home. John
Cataldo purchased the home next door and made a contract with Wizard Home
Improvements for a complete renovation of the property. The professor was delighted
because the improvement of the Cataldo home was upgrading the neighborhood and
raising the value of the professor’s home.
After making the last required payment on the contract, John Cataldo became seriously
ill and ultimately was taken to a nursing home for care.
When Wizard learned of Cataldo’s illness and confinement, Wizard ceased work on the
Cataldo home. Because the outside renovation work had not been completed, the
premises began to return to its former rundown condition. The professor ultimately sued
Wizard as a third-party beneficiary of the contract between Cataldo and Wizard. What
is the probable outcome of the lawsuit?
It is not necessary that some person be harmed for an act to be considered a crime.
Proof of an employer’s discriminatory motive is immaterial in a disparate treatment
case.
Mark purchased a very expensive automobile on credit. Within a week, Mark
discovered that a tune-up was necessary, for he was in the habit of driving at an
excessive rate of speed. When the car was repaired, the bill was more than $1,000.
Mark does not have the money to pay for the car repairs or the monthly car payments.
The credit company as well as the repair shop are concerned over who has priority of
repayment. Who has priority and why?
The formation of a contract of insurance is governed by the general principles
applicable to contracts.
Administrative agencies are, in effect, a fourth branch of the government.
Instruments are transferable, written, signed promises or orders to pay a specified sum
of money.
A creditor must only file a proof of claim if the bankruptcy trustee does not know of the
existence of the claim.
The effect of an implied contract is not the same as the effect of an express contract.
To satisfy the statute of frauds, the writing must be signed and must include the price of
the goods.
Under Revised UCC Article 9, a financing statement must be signed by the debtor.
The UCC imposes a higher degree of good faith on a merchant seller or buyer of goods
than on a nonmerchant seller or buyer of goods.
If a crime does not hurt an identifiable person, it is not a tort.