When goods are shipped COD:
a. the buyer always has the right to examine them before making payment.
b. the underlying contract must specify when the buyer may inspect the goods.
c. the buyer has no right to examine the goods until payment is made.
d. the buyer gives up all rights to inspection of the goods.
A person or enterprise harmed by a Sherman Act violation may bring an action for:
a. punitive damages only.
b. treble damages.
c. quadruple damages.
d. actual damages only.
A business formula, information compilation, or device that provides an advantage over
competitors that do not have it is known as a:
a. competitive advantage.
b. strategic advantage.
c. trade secret.
d. restraint of trade.
The order or bearer character of the paper determines how it may be:
a. assigned.
b. sold.
c. negotiated.
d. all of the above.
Cumulative voting:
a. decreases the voting power of minority shareholders.
b. is the normal method for shareholder voting on corporate matters.
c. generally is required or allowed in the election of corporate directors.
d. is a right given to participating preferred shareholders.
The promisor in a contract may also be called the:
a. obligor.
b. grantor
c. obligee
d. grantee
John Smyth is an agent for L. T. Adams. To avoid becoming a party to any contract that
Smyth signs for Adams, Smyth should sign in which of the following ways?
a. John Smyth, agent
b. John Smyth, for the principal
c. John Smith, as agent for the principal
d. L. T. Adams, per John Smyth
__________reserve auctions are those that give the auctioneer the right to withdraw the
goods from the sale process if the bids are not high enough.
a. Qualified
b. Restricted
c. With
d. Without
Under modern law, when the issue that an agency decides is a question of law based on
a technical statute:
a. the court on appeal will reverse the agency’s decision if the court disagrees with the
decision.
b. the court will not accept the agency’s decision unless the agency’s interpretation is the
only one that could have been made.
c. the court will tend to accept the agency’s interpretation of the law as long as it is
reasonable.
d. the court will not reverse the agency’s decision.
To help eliminate conflicts of interest, Sarbanes-Oxley prohibits certain activities by
audit firms for their audit clients, including:
a. the design and implementation of financial information systems.
b. actuarial services.
c. management functions and human resources.
d. all of the above.
Statements or declarations of an agent:
a. will not bind the principal.
b. will bind the principal if the statements were made by an agent while transacting
business within the scope of agency authority.
c. will not bind the principal if made after performance of the transaction concerned.
d. none of the above.
A writing that satisfies the requirement of a writing under the statute of frauds could be
evidenced by:
a. a note.
b. a memorandum.
c. a contract.
d. all of the above.
Unless language or circumstances indicate the contrary, a general assignment is:
a. a transfer of property only.
b. both a transfer of rights and a delegation of duties.
c. a delegation of duties only.
d. a transfer of rights only.
An agreement under which one party agrees to pay drafts drawn by a creditor is called
a:
a. contract of surety.
b. guaranty contract.
c. letter of credit.
d. debtor’s agreement.
Warren brought his television in for repairs. After Warren left the store, gunmen came in
to rob the proprietor. As they ran out, Warren’s television was knocked over and
destroyed. Warren demanded that the proprietor of the store compensate him for the fair
market value of the television. The bailee:
a. is liable, since the goods were not returned to Warren in proper condition.
b. is liable, since the bailee did not prevent the gunmen from damaging the television.
c. is not liable, since this was a mutual-benefit bailment.
d. is not liable, since the damage was caused by the act of a third party.
Under which circumstance will an employee not be entitled to Workers’ Compensation
benefits for an on-the-job injury?
a. an injury that is the result of an employee’s own negligence
b. an injury that is the result of an employee’s own gross negligence
c. an injury that is caused by a fellow employee
d. an injury that is the result of an employee’s intoxication
Under which organizational structure would the death of the owner have no legal
effect?
a. a partnership
b. a corporation
c. a sole proprietorship
d. all of the above
The taking of an image off someone’s web site and using it for commercial advantage is
called:
a. appropriation.
b. defamation.
c. gleaning.
d. subordination.
Which of the following statements made by the seller does not likely constitute an
express warranty?
a. “This looks beautiful on you.”
b. “This is 100 percent wool.”
c. “This motor generates 100 horsepower.”
d. “This is a 3.2 liter rotary engine.”
Which of the following is correct concerning suretyship and guaranty?
a. A surety is always liable from the moment the principal is in default.
b. A guarantor is always liable from the moment the principal is in default
c. Both a. and b.
d. None of the above.
In a joint venture, the parties:
a. combine their labor or property for a single undertaking and share profits and losses
equally.
b. combine their labor or property for a continuing business and share profits and losses
equally.
c. assume no personal liability beyond the risk of losing their initial investment.
d. none of the above.
The privity rule:
a. allows for an accountant’s client to recover from an accountant in a negligence
malpractice suit.
b. allows for a third part to recover from an accountant in a negligence malpractice suit.
c. both a. and b.
d. neither a. nor b.
Which of the following is not protected under the privileges and immunities clause?
a. right to go to another state and make a contract
b. right to go to another state and vote in local elections
c. right to go to another state and purchase property
d. right to go to another state and open a business
If the insured lives to the end of the policy period of an endowment insurance policy,
the policy pays:
a. nothing.
b. one-half of the face amount of the policy.
c. the face amount of the policy.
d. double the face amount of the policy.
The person to whom an insurance promise is made is called:
a. the insured.
b. the insurer.
c. the policyholder.
d. both a. and c.
A bilateral contract consists of a:
a. promise for an act.
b. promise for refraining from acting.
c. promise for a promise.
d. promise to contract.
If a provision in an insurance policy is ambiguous:
a. it is interpreted in favor of the insurer because the insured could have rejected the
policy.
b. it is interpreted against the insurer.
c. parol evidence is admitted to show what was intended.
d. the policy is declared void and the insurer is required to return all premiums to the
insured.
Will the law enforce every promise?
a. Yes, in all cases.
b. Yes, with or without consideration.
c. Generally yes, if consideration is given for the promise.
d. Yes, but only if there is no consideration.
Which of the following is a defense to defamation?
a. Slander
b. Libel
c. Truth
d. All of the above.
When one party has broken a contract, there are several remedies available to the
non-breaching party, including:
a. bringing an action for money damages.
b. rescinding the contract.
c. seeking specific performance.
d. all of the above.
A shareholder does not:
a. qualify as a member of the corporation.
b. own any specific property of the corporation.
c. have a fractional interest in the total property of the corporation.
d. all of the above.
A computer crime generally can only be committed by a person having some
knowledge of the operation of a computer.
Licensing involves the transfer of title of goods to a distributor who bears the financial
and commercial risks for the subsequent sale of the goods.
A limited liability company may be managed directly by the owners.
A written stop payment order is effective for one year.
In a non-shipment contract risk of loss passes to the buyer when the merchant seller
makes the goods available to said buyer.
The fact that harm occurred is sufficient to establish a nuisance.
If there is a reference to a third party to determine a dispute, in most cases the decision
is binding.
Ulysses bought Whiteacre from Gordon but never recorded the deed. Gordon stayed on
the property as a tenant for three (3) years. Near the end of the three (3) years, Gordon
learned that Ulysses had never recorded the deed. Gordon advertised Whiteacre for sale
and Cheryl negotiated with Gordon thinking that Gordon was the owner. Finally, Cheryl
checked the records at the recording office and, finding no reason to question Gordon’s
ownership of the property, purchased Whiteacre from Gordon. Cheryl recorded the deed
and Gordon fled with the purchase money. Meanwhile, Ulysses had failed to pay the
real estate taxes on Whiteacre for the three (3) years in question thinking it was the
responsibility of Gordon, the tenant. Ultimately, Cheryl and Ulysses disputed over the
ownership of the property. Decide the case between Cheryl and Ulysses. Also decide
whether Ulysses is responsible for the three (3) years of real estate taxes assessed while
Gordon occupied the property as a tenant.
The assignment of a lease discharges the original tenant from the duty to pay rent.
A general partner within a limited partnership may be a corporation.
An agent’s duties must be expressly stated in the agency agreement and may not be
implied from the principal’s words or conduct.
New York follows the “contact” rule in determining when third persons can sue
accountants for negligence.
A merger is subject to antitrust law, while a consolidation is not.
Extortion and blackmail are exactly the same.
Federal law requires all companies who market search engines on the Internet to create
and abide by a search engine code of ethics.
In the case of either a check or a draft, the drawer may be held civilly liable if the
instrument is dishonored.
The powers given by the federal government to the states are described as delegated
powers.
The principle behind the quasi contract is to prevent unjust enrichment.
For a principal to ratify the actions of an agent, all that is necessary is that the principal
express the intention to ratify.
A person who is harmed by a conspiracy that violates the Sherman Antitrust Act may
sue the wrongdoers for four times the actual damages.