Office Accounting, Inc., hires Perry to repair a computer on site for $400, but Perry
does not show up as agreed. Office Accounting hires Raul to do the job for $3 Office
Accounting may recover from Perry
a. compensatory damages.
b. consequential damages.
c. nominal damages.
d. punitive damages.
A primary obligation is created when a party agrees to pay for something on the
condition that a certain other party does not make the payment.
a. True
b. False
Big Red Drinks, Inc. contracts to buy two tons of cranberries from Super Fruits, Inc.
The contract states that Super Fruits is required to ship the cranberries to Big Red
Drinks by Speedy Wind Air Freight. The contract is
a. a bill of lading.
b. a destination contract.
c. a shipment contract.
d. a warehouse receipt.
No contract can prohibit delegation of the duties of the contract.
a. True
b. False
A finder acquires title to mislaid property good against the whole world, in-cluding the
true owner.
a. True
b. False
The contract term “delivery ex-ship means that the risk of loss does not pass to the
buyer until the goods are properly unloaded from the ship or other carrier.
a. True
b. False
Larry is a shareholder for Custom Colors, Inc. If Custom Colors fails, Larry will
a. be liable for Custom Colors debts.
b. not be liable for Custom Colors debts.
c. be able to reclaim his initial investment in Custom Colors.
d. be able to reclaim his initial investment in Custom Colors plus damages.
The sellers or lessors major obligation under a sales contract is to tender conforming
goods to the buyer or lessee.
a. True
b. False
Under the Sarbanes-Oxley Act, accountants must retain working papers relating to an
audit or review for a certain period of time.
a. True
b. False
Ben allows Cody to store his trailer on Bens property for $20 a month while Cody is out
of town on a job for Plains States Sales, his employer. The bailor is
a. Ben.
b. Cody.
c. Plains States.
d. no one.
No one believes that judging a job candidate based on what he or she does outside the
work environment is ethical.
a. True
b. False
To create an enforceable security interest, the secured party must give value.
a. True
b. False
All international sales contracts should have a choice-of-language clause to designate
the official language by which the contract will be interpreted.
a. True
b. False
A drawer who is induced by an imposter to issue a check in the name of an
impersonated payee can avoid payment on the check to an innocent holder.
a. True
b. False
An agency relationship created for an illegal purpose is enforceable.
a. True
b. False
Shingle & Tile Roofing Contractor, LLC, obtains an insurance policy against liability
for injuries or losses sustained by employees during the course of their employment.
The policy covers claims not covered by workers compensation insurance. This is
a. casualty insurance.
b. fidelity or guaranty insurance.
c. key-person life insurance.
d. employers liability insurance.
If the corporate directors fail to sue in the corporate name to redress a wrong suffered
by the corporation, then the shareholders can do nothing.
a. True
b. False
A party seeking to recover compensatory damages cannot also recover in-cidental
damages.
a. True
b. False
New Apps Company develops “Browser Lite software,which speeds the display of
graphics on Web sites. Browser “Lite has the most copyright protection under
a. the Berne Convention.
b. the Paris Convention
c. the TRIPS Agreement.
d. the Madrid Protocol.
Everyday Loans, Inc., issues a line of credit in Glade Electronics Corporation under a
security agreement. Later, Glade buys new HD-TVs to add to its inventory. Everyday
has a security interest in the new inventory
a. if the security agreement included an after-acquired property clause.
b. if Everyday has not yet filed a financing statement.
c. if Glade bought the inventory with Everyday funds.
d. under no circumstances.
Lena borrows from Mac and Nicol, using the same farm equipment as collateral for
both loans. Only Nicol has a perfected security interest. Lena defaults on both loans.
The party with first rights to the collateral is
a. Lena.
b. Mac and Nicol, in proportion to Lenas debt to each.
c. Mac only.
d. Nicol only.
Cole is a shareholder of Donut Holes, Inc. Cole will be deemed to have a fiduci-ary
duty to Donut Holes and its minority share-holders if he has
a. a restriction on the transferability of his shares.
b. a right of first refusal.
c. a sufficient number of shares to exercise de facto control.
d. voting rights.
Sam, or anyU.S. citizen, can bring a civil suit in a U.S. court against a foreign entity for
a. a tort allegedly committed in the United States only.
b. a tort allegedly committed in the United States or overseas.
c. a tort allegedly committed overseas only.
d. no purpose.
Private parties can sue violators of the Securities Act of 1933.
a. True
b. False
An implied contract is implied from the conduct of the parties.
a. True
b. False
The Sarbanes-Oxley Act applies to domestic, but not foreign, public accounting firms
that provide auditing services to “issuers.
a. True
b. False
A corporation whose security does not qualify for an exemption can avoid the cost and
complexity associated with registration.
a. True
b. False
Interactive Entertainment Corporation markets its products online. Through the use of
cookies, Interactive Entertainment and other online marketers can
a. track individuals Web browsing activities.
b. gain access to competitors servers.
c. ‘sweet talk consumers into buying certain products.
d. attack competitors Web sites.
PriceLess Retail Corporation specifies that its employees should not use social media to
damage the company, harm another persons reputation, or violate company policies. An
employee who violates these rules may be subject to discipline and could be fired.
According to the National Labor Relations Board, this social media policy
a. violates federal labor law.
b. is too lenient toward employees.
c. is too stringent toward management.
d. is necessary to prevent inaccurate statements from being spread across the Internet.
On behalf of the rock group Uno, their manager Thalia agrees to a performance in
Seaside Amphitheater on July 4. Rex, acting for Seaside, sends a written copy of the
agreement to Thalia to be signed. If Thalia signs the copy, the parties will have
a. an express contract.
b. an implied contract.
c. a quasi contract.
d. no contract.
When a document of title is required, title passes to a buyer when and where the
document is delivered.
a. True
b. False
The trustee is the person for whose benefit a trust is held.
a. True
b. False
The payment of Brians debt to Chuck is guaranteed by Brians personal property. This is
a. an attachment.
b. a secured transaction.
c. perfection.
d. a violation of most state laws.
The members of a limited liability company enjoy limited liability.
a. True
b. False