Bry, Inc. and Gangl Co. entered into an oral agreement for the sale of 3,000 sweaters.
Both parties performed as required under the contract. Bry delivered the sweaters and
Gangl accepted and paid for them. Since the contract is fully executed, it makes no
difference that it was an oral agreement.
a. True
b. False
Which of the following duties can probably be delegated?
a. An agreement to perform an operation
b. A contract to paint a picture
c. An agreement by an attorney to draft a contract
d. An agreement to paint a house
Martina developed a new type of apple tree which could be reproduced through
grafting. She cannot protect her rights in this tree by obtaining a plant patent since the
tree cannot be reproduced by planting its seeds.
a. True
b. False
Judith is a CPA with an excellent reputation and client base. She sells her tax
preparation business to Shawn, and the sales contract includes a noncompete clause
restricting Judith from opening a similar business for one year within a 10-mile radius
of her former office. If she opens a tax preparation office five miles away after one year,
a court would probably
a. grant an injunction barring her from operating the new office.
b. order confiscation of all of her new client files and turn them over to Shawn.
c. refuse to become involved, as the noncompete clause was illegal.
d. refuse to enforce the noncompete clause, as it is unreasonable regarding time and
geographic area.
Someone who might have benefited from a contract between two others but has no right
to enforce that agreement is
a. a donee beneficiary.
b. an incidental beneficiary.
c. a creditor beneficiary.
d. contractual beneficiary.
A prospective juror was excused from serving after being questioned by the plaintiff’s
attorney. No reason was given for the rejection. This would be accomplished by the use
of a peremptory challenge.
a. True
b. False
A summons is a paper ordering a defendant to appear in court at a certain time.
a. True
b. False
The Anderson v. Bellinocase held that
a. the defendant did not act in good faith and violated the corporate opportunity
doctrine.
b. the business judgment rule protected the plaintiff’s decision to award the Keno
contract to an outside firm.
c. the plaintiff was not able to show that the defendant violated the corporate
opportunity doctrine.
d. the defendant’s action was not a conflict of interest and was made in good faith.
Tina wishes to learn what records the IRS has about her. Under the Freedom of
Information Act (FOIA),
a. Tina can only obtain copies of declassified information.
b. Tina is entitled to all information the IRS has about her.
c. Tina can only obtain information about the IRS, not records concerning herself.
d. Tina cannot obtain any information since the IRS is exempt from the FOIA.
Standard provisions in a contract that are often listed under the heading “Miscellaneous
are called
a. boilerroom.
b. boilerplate.
c. boilerpot.
d. boilertape.
A check was indorsed as follows:
Jessica Hall
without recourse
Paul Samuels
Collection guaranteed
Melissa Liston
Which of the following will discharge all of the indorsers?
a. Notice of dishonor after 30 days time
b. The “without recourse indorsement within the chain
c. Insolvency of drawer
d. Certification of the check
A buyer who properly rejects goods
a. can do so by sending the goods back in any manner.
b. must notify the seller of the rejection within a reasonable time.
c. must pay the costs of returning the rejected goods.
d. is not required to act in good faith.
Hilda owes Lex $3,000, which is an undisputed amount. If she offers him her car in full
settlement of the debt and he accepts, the agreement is binding and he can no longer
claim she owes him anything on the original debt.
a. True
b. False
Which of the following questions could an interviewer safely ask a candidate in a job
interview?
a. Are you a United States citizen?
b. When did you graduate from college?
c. Could you carry a 100-pound weight, as required by this job?
d. Are you married?
In order to determine if the case she was hearing broke the law, Judge Jane referred to
prior rulings on the same subject. In other words, the judge is relying on precedent to
make her decision.
a. True
b. False
A speculator plans to acquire control of Kelp Corporation and then resell it at a profit. A
speculator is sometimes known as a corporate raider.
a. True
b. False
The Minnesota legislature passed a law requiring that employers allow each employee
adequate time within each four consecutive hours of work to utilize the nearest
convenient restroom. This law is
a. an executive order.
b. an ordinance.
c. a statute.
d. a stare decisis.
Common law plays an important role in regulating partnerships.
a. True
b. False
In a mixed contract involving both goods and services, Article 2 of the UCC will
govern if the predominant purpose is the sale of goods.
a. True
b. False
When an appeal is filed with the U.S. Supreme Court, the Supreme Court
a. must hear the case if the validity of a federal statute is in question.
b. must hear the case if two or more U.S. courts of appeals have decided the legal issue
differently.
c. has discretion as to which cases it hears.
d. must hear all cases.
Which of the following is NOT true under the Electronic Communications Privacy Act?
a. An intended recipient of an e-mail has the right to disclose it to third persons.
b. ISPs are prohibited from disclosing the content of electronic messages to anyone
other than the addressee, even if the disclosure is necessary for the performance of the
ISP’s service.
c. An employer has the right to monitor workers’ e-mail if the monitoring occurs in the
ordinary course of business.
d. An employer has the right to monitor workers’ e-mail if the employer provides the
computer system.
Eintz Corp. hired Jose to bribe a foreign government official into awarding a $3 million
contract to Eintz. Eintz gave Jose $10,000 in cash to make the bribe payment and $2000
for Jose’s efforts. Instead of paying the bribe, Jose pocketed all of the money. If Eintz
sues Jose, Eintz will
a. be able to recover the $12,000.
b. be able to recover the $3 million lost on the contract.
c. be able to recover the $2,000 but not the $10,000.
d. not be able to recover the $12,000.
As English judges were developing the common law of contracts in the twelfth and
thirteenth centuries,
a. most promises were found to be enforceable.
b. promises were found not binding unless written and sealed.
c. the term “contract became common.
d. changes in the law occurred rapidly.
When a licensing requirement is designed merely to raise revenue, a contract made by
an unlicensed person is generally enforceable.
a. True
b. False
A rock group assigns its payment under a performance contract to the Costume Shop, a
business that has supplied the group with outrageous stage outfits, and to which the
group owes a great sum of money. This is
a. a valid assignment because of the rule of freedom to contract.
b. a valid assignment because this is a simple transfer of the right to receive money.
c. an invalid assignment because it increases the burden of the payor.
d. an invalid assignment because this is a personal service contract.
John Johnson is a customer of company ABC. As such, John is a(n)
a. shareholder.
b. customer and stakeholder.
c. customer only.
d. stakeholder only.
A control security is stock which gives the owner a controlling interest in the company.
a. True
b. False
When Olga asks Sven if he wishes to sell his Harley motorcycle, he replies that he
would not sell it “for less than $2,000.” Olga replies, “I accept,” and hands him $2,000.
A contract exists.
a. True
b. False
A covenant allows a landlord to evict a tenant if there is a violation of the lease.
a. True
b. False
MegaCorp wishes to sell $25 million of securities. The only investors will be 20
unaccredited investors. Which of the following applies to this offering?
a. Rule 504, option 1 of Regulation D of the 1933 Act.
b. Rule 505 of Regulation D of the 1933 Act.
c. Rule 506 of Regulation D of the 1933 Act.
d. Rule 504, option 2 of Regulation D of the 1933 Act.