Ashenwaft Sandalwood is contracted by Sphinxia Perfumes to supply fresh sandalwood
on a monthly basis. When the goods are delivered, Sphinxia inspects them and finds the
sandalwood to be below the quality standards fixed by the contract. Sphinxia accepts
the substandard sandalwood shipment and sues Ashenwaft for reasonable damages.
Which of the following rights has Sphinxia exercised in this regard?
A) right to recover damages for accepted nonconforming goods
B) right to recover damages for nondelivery of contracted goods
C) right to obtain specific performance
D) right to stop delivery of goods in transit
Which of the following characteristics of an LLC is similar to that of limited
partnerships and S corporations?
A) An LLC has flow-through taxation.
B) An LLC does not have to file a form with the IRS to obtain flow-through taxation.
C) An LLC can have more than one class of stock, thereby permitting a more complex
capital structure.
D) An LLC may not own more than 80 percent of another corporation.
________ is a restraint of trade in which a seller refuses to sell one product to a
customer unless the customer agrees to purchase a second product from the seller.
A) Tying arrangement
B) Predatory pricing
C) Price fixing
D) Group boycott
The ________ provides that an action for breach of any written or oral sales or lease
contract must commence within four years after the cause of action accrues.
A) perfect tender rule
B) decree of specific performance
C) Lanham act
D) UCC statute of limitations
A ________ is a seller’s or lessor’s express or implied assurance to a buyer or lessee that
the goods sold or leased meet certain quality standards.
A) breach
B) caveat emptor
C) warranty
D) liability
Francis Jeffers purchased a cashier’s check in the amount of $5,000 from Northern Star
Bank. The check was made payable to Kyle Naughton and was delivered to him.
Twelve months later, the Northern Star Bank branch manager informed Jeffers that the
cashier’s check was still outstanding. Jeffers subsequently signed a form, requesting that
payment be stopped and a replacement check be issued. Northern Star Bank issued a
replacement check to Jeffers. Eight months later, Naughton deposited the original
cashier’s check in his bank, which was paid by Northern Star Bank. Northern Star Bank
requested that Jeffers repay the bank $5,000. When he refused, Northern Star Bank sued
Jeffers to recover this amount and the court awarded Northern Star Bank damages
amounting to $5,500. Which of the following, had it happened, would have resulted in
the court ruling in Jeffers’ favor?
A) Jeffers cashed the replacement check before Naughton had presented the original
check at his bank.
B) Jeffers paid Naughton the $5,000 in cash after obtaining the replacement check from
Northern Star Bank.
C) Jeffers indemnified Northern Star Bank for potential damages arising from the issue
of the replacement check.
D) Jeffers renewed the stop-payment order on the original check at the end of six
months.
The mirror image rule states that ________.
A) the offeree’s counteroffer should match the value of the offeror’s offer
B) the offeree is allowed to modify the terms of the offer
C) the offeror can modify the terms of the offer even after the offeree has accepted it
D) the offeree must accept the terms as stated in the offer
If a minor ratifies a contract while still being a minor, ________.
A) the contract can be disaffirmed by the minor
B) the minor is bound by the terms of the contract
C) the minor is exempt from the duty of restitution
D) the minor has to hold the adult in status quo in case of disaffirmance
A(n) ________ provision is a provision whereby the court confirms a plan of
reorganization over an objecting class of creditors if certain requirements are met.
A) cram-down
B) acceptance
C) discharge
D) liquidation
A ________ is a person who intentionally or unintentionally causes injury or death to
another person.
A) protagonist
B) supplanter
C) reversionist
D) tortfeasor
The ________ establishes common legal rules for the formation and enforcement of
electronic contracts and licenses.
A) Digital Millennium Copyright Act (DMCA)
B) Uniform Computer Information Transactions Act (UCITA)
C) Electronic Communication Privacy Act
D) Computer Misuse Act of 1990
Involuntary dissolution of a corporation that is ordered by the secretary of state if a
corporation has failed to comply with certain procedures required by law is known as
________.
A) judicial dissolution
B) administrative dissolution
C) cumulative dissolution
D) liquidation
The ________ provides that federal law takes precedence over state or local law.
A) preemption doctrine
B) Bill of Rights
C) Due Process Clause
D) Free Exercise Clause
An oral will that is made before a witness during the testator’s last illness is defined as a
________.
A) holographic will
B) nuncupative will
C) living will
D) joint will
While claiming under ________, a plaintiff must name the partnership and all of the
partners as defendants in a lawsuit.
A) multiple liability
B) joint liability
C) limited liability
D) unlimited personal liability
Which of the following statements describes the moral theory of utilitarianism?
A) People must choose the action or follow the rule that provides the greatest good to
society.
B) People must follow actions that are in accordance with a specific moral rule or
principle from a religious text.
C) People must choose to follow actions of a virtuous person.
D) People must follow actions based on moral duties imparted from one’s community.
With regard to place of delivery, a person buying goods from the place where the goods
are manufactured would be an example of a ________.
A) noncarrier case
B) carrier case
C) shipment contract
D) destination contract
An organization provides six months of maternity leave to its female employees,
whereas its male employees can avail paternity leave for a maximum of two weeks.
Which of the following tests is used to examine the lawfulness of this classification?
A) rational basis
B) intermediate scrutiny
C) strict scrutiny
D) cogent basis
A certified public accounting firm that audits a public company may provide ________
to the same client.
A) bookkeeping services
B) internal audit services
C) investment banking services
D) tax services
A major benefit of ________ bankruptcy is that the debtor is given the opportunity to
accept or reject certain executory contracts and unexpired leases.
A) Chapter 13
B) Chapter 11
C) Chapter 12
D) Chapter 7
If a competitor reverse engineers a trade secret, then the competitor is ________.
A) allowed to use the trade secret but not the original trademark
B) rightfully allowed co-ownership to original trademark of the trade secret
C) disallowed to gain commercially from the trade secret
D) obliged by law to release the trade secret to its original owner
When a party to a contract renders substantial performance, the nonbreaching party
________.
A) cannot deduct the cost of repairing the damage from the contract price
B) can sue to recover damages from the breaching party, if the breach is not corrected
C) is discharged of its rights to receive performance under the contract
D) has to incur the cost of repairing the damage in addition to the contract price
Which of the following statements best defines a fully disclosed agency?
A) It refers to an agency in which a contracting third party does not know the identity of
the principal.
B) It refers to an agency in which a contracting third party does not know of either the
existence of the agency or the principal’s identity.
C) It refers to an agency in which a contracting third party knows that the agent is
acting for a principal and knows the identity of the principal.
D) It refers to an agency in which a contracting third party knows that the agent is
acting for a principal but does not know the identity of the principal.
The Amosi Corporation contracts to have the Whetsel Builders construct a
manufacturing unit for $800,000. It would take Whetsel $500,000 to build the unit.
Amosi withdraws from the contract before the construction begins. Whetsel can recover
________ from Amos as compensatory damages for its lost profits.
A) $500,000
B) $300,000
C) $800,000
D) $1,100,000
________ is an order of the court that terminates an existing marriage.
A) Divorce
B) Annulment
C) Ademption
D) Cohabitation
________ refers to an official notice that the Supreme Court will review a case.
A) Writ of certiorari
B) Stare decisis
C) En banc review
D) Sua sponte
Failure of a party to perform an obligation in a sales or lease contract is known as
________.
A) revocation
B) breach
C) capture
D) replevin
Which of the following is used in case of a breach of contract that cannot be adequately
compensated through monetary awards?
A) mitigation of damages
B) liquidation of damages
C) equitable remedies
D) tort remedies
________ refers to a contract provision that designates a certain state’s law or country’s
law that will be applied in any dispute concerning nonperformance of the contract.
A) Choice of law clause
B) Forum-shopping
C) Arbitration clause
D) Due process of law clause
The ________ has special appellate jurisdiction to review the decisions of the Court of
Federal Claims, the Patent and Trademark Office, and the Court of International Trade.
A) U.S. District Court
B) Court of Appeals for the Federal Circuit
C) First Circuit Court
D) District of Columbia Circuit
A warranty that is created when a seller or lessor makes an affirmation that the goods he
or she is selling or leasing meet certain standards of quality, description, performance,
or condition is known as a(n) ________.
A) implied warranty
B) warranty of title
C) warranty disclaimer
D) express warranty
An auditor’s opinion that a company’s financial statements fairly represent the
company’s financial position, the results of its operations, and the change in cash flows
for the period under audit, in conformity with generally accepted accounting principles
is referred to as a(n) ________.
A) disclaimer of opinion
B) adverse opinion
C) qualified opinion
D) unqualified opinion
A fundamental requirement of the Anticybersquatting Consumer Protection Act is that a
domain name must be ________ to find violation.
A) a registered trademark
B) registered with bad faith
C) used to distribute goods and services
D) a generic name