Type
Quiz
Book Title
Business Law with UCC Applications 14th Edition
ISBN 13
978-0077733735

Business Law 68203

March 1, 2019
Chapter 7 bankruptcy petitions are filed in state district courts that are within the federal
court structure.
Ted, one of the consultants in a two-man business, cannot take life insurance on his
business partner, Brendan, because he does not have an insurable interest in Brendan's
life.
Nuncupative wills exclude giving of personal property.
If Ann is named as a donee beneficiary on Carl's life insurance policy, Ann can sue the
insurance company if it fails to pay her when Carl dies.
Under the first federal bankruptcy law in the United States, enacted in 1800, only
creditors could begin a bankruptcy proceeding and only merchants could qualify as
debtors.
The law is a delicate balancing act between the power of the state and the rights of
individuals.
Tangible personal property is property that has substance and can be touched.
Under the RUPA, joint and several liability means that the partners can be sued
individually for both partnership contracts and torts.
If Ray fails to notify customers that Brice no longer represents Ray, Brice has lingering
apparent authority.
The doctrine of respondeat superior is also referred to as vicarious liability.
A third party is an individual who is affected by a contract but who is not one of the
contracting parties.
A contract results in an obligation or a duty that can be enforced in a court of law.
A police officer solves a crime assigned to her by her police supervisor. She may collect
the reward offered by the crime victim.
Cybertorts frequently involve intentional harm to an individual's physical well-being.
A person may not acquire the rights of a holder in due course if she cannot qualify as a
holder in due course.
The NLRB has no jurisdiction over religious schools.
In his essay, Politics as a Vocation, Max Weber argues that national leaders must
practice the "ethic of ultimate ends" to govern correctly.
Experts who believe in deterrence say that the criminal process should be presented in a
public way, so that the public will learn the difference between acceptable and
unacceptable behavior.
Trade-offs rarely occur within the law.
A collective science court (CSC) will not succeed unless it has the power to compel the
parties to submit to its authority.
After repossessing the goods, the secured party (the creditor) may sell them at a public
auction or private sale.
The rule of contemporary ownership is a request by shareholders to waive the
requirement to exhaust internal remedies when a board will not listen to their concerns.
A criminal law case can be resolved by an ADR panel.
A license to search and extract gives the licensee the right to leave property with a
quantity of oil.
If Jake puts his business funds and client funds in the same account it is called
commingling, and and Jake may be held personally liable for any resulting losses.
A statutory agent has the authority to grant a corporation the right to do business in a
particular state.
A bill of sale provides evidence of the transfer of personal property from one person to
another.
Roberta receives a document of title for lumber she purchased. Even though she does
not yet possess the lumber, the document transfers to her both title to the lumber and
risk of loss for it.
State statutes that regulate the sale of stock are frequently referred to as blue sky laws
because they are set up to stop the sale of securities that are as empty as several feet of
blue sky.
If a sale of goods contract offer is silent concerning the method of acceptance, it may be
accepted in any reasonable manner, including shipment of goods.
ABC Co. makes a tender offer to acquire 3% of the stock of XYZ Co. This is
considered a stock acquisition, and ABC must file with the SEC.
Which of the following contracts are not voidable by minors at their option?
A. Executory contracts
B. Contracts for necessaries
C. Contracts with banks for educational loans
D. Contract to purchase land
Under the ____________, an electronic signature is defined as "an electronic sound,
symbol, or process attached to or logically associated with a record and executed or
adopted by a person with the intent to sign the record."
A. E-Sign Act
B. UETA
C. UCC
D. CSIG
In states that have not adopted the Uniform Probate Code, the person named in a will to
carry out the terms in it is called a(n):
A. administrator or administratrix.
B. executor or executrix.
C. settler.
D. testator or testatrix.
A ____________ refers to the actual document that is used to request the right to vote
the other shareholders' votes.
A. proxy solicitation
B. pooling agreement
C. cumulative voting agreement
D. voting trust agreement
Abbot Vending Co. has a license to install vending machines at the Slumber Apartment
Complex. Can Abbot transfer this right to Zeno Concession Co.?
A. Yes, if Zeno provides identical services.
B. No, since the license is a personal privilege.
C. Yes, if their agreement gives ownership interest in the property.
D. No, since it is a possessory estate.
____________ occurs if the hospital has retained a physician that the governing body of
the hospital knew or should have known was incompetent.
A. Ostensible authority
B. Negligent credentialing
C. A staff privilege
D. Indifferent testimony
A(n) ____________ cannot be upheld by a court of law, although it may have all the
elements of complete contract.
A. unenforceable contract
B. valid contract
C. voidable contract
D. void contract
Lisa agrees to sell Deb an electronic entertainment center worth $1,000 for $700 cash in
order to have a rapid sale. Later, Lisa insists that she may rescind this agreement since
the agreed price was 30% below fair market value. Lisa may:
A. rescind, since the consideration is inadequate.
B. rescind, since the agreement is unconscionable.
C. rescind, since the agreement is not bargained for.
D. not rescind the agreement once Deb accepts.
Mack, the father of two children, dies intestate. Under a typical statute, the rights of his
wife would include entitlement to:
A. one-half of the estate.
B. the entire estate.
C. one-half of the remainder of the estate plus $200,000.
D. no part of the estate.
Which of the following is not a requirement for strict product liability?
A. The product must be in a defective condition when the defendant sells it.
B. The product must be unreasonably dangerous to the user or consumer because of its
defective condition.
C. The defective condition must be the proximate cause of the injury or damage.
D. The defective condition of the goods must have been changed from the time the
product was sold to the time the injury occurred.
Lydian owns a small island outright. She is said to have a(n):
A. estate in fee simple.
B. leasehold estate.
C. life estate.
D. reversion estate.
Juanita is classified by Smart Store as an exempt employee. Juanita spends 40% of her
time in management tasks, 30% of her time stocking shelves at Smart Store, and 30% of
her time unloading trucks that supply the store. Which of the following statements is
true?
A. Juanita is appropriately classified.
B. Juanita is inappropriately classified.
C. Juanita is guaranteed at least 60% of minimum wage.
D. Juanita is guaranteed at least 160% of minimum wage.
According to neoliberalism, or ethical relativism:
A. human values apply to all people at all times.
B. both natural law and positive law form the basis for its beliefs.
C. there are no objective or absolute standards of right and wrong.
D. the morality of an action is determined by its ultimate effects.
Kay, an 80% shareholder of Big Corp., dies leaving her stock to her nephew, Carl. Big
Corp. will be:
A. unaffected.
B. reorganized.
C. dissolved and then reconstituted.
D. dissolved.
Winston was going to be out of town on September 1, when his rent would be due. On
August 20 he gave his landlord Becky a check dated September 1, with instructions not
to deposit or cash the check until September 1. As the instructions to Becky were clear,
he did not notify the bank of the postdated check. On August 21, Becky deposited the
check in her account at her bank and the check was dishonored on August 23. Which of
the following is true of this scenario?
A. Winston has recourse against Becky as she did not follow his instructions.
B. Winston has recourse against Becky and the bank since it failed to refuse the item
when deposited.
C. Winston has recourse against the bank as it failed to notify Winston of the check
acceptance and failed to refuse the item when deposited.
D. Winston did not notify the bank not to pay it before the date on the check, hence he
has no recourse.
Time Zone sells Gary an iWatch for $4,000 by representing it has a real gold case and
watch band. Later, Gary finds that the iWatch case and band are just polished with
golden color, and the watch could be bought in the local store for $100. Gary can sue
Time Zone for:
A. consequential damages.
B. exemplary damages.
C. nominal damages.
D. speculative damages.
Omar receives a check from Trudy drawn on Shelfari Bank. Shelfari Bank improperly
dishonors the check when Omar attempts to cash it. Which of the following is true of
this case?
A. Omar is the holder of the check, and hence, has recourse against Trudy, the drawer.
B. Shelfari Bank, the drawee bank, is liable to Omar, the holder, for improperly
dishonoring the check.
C. Omar has recourse against both the parties—the drawer, Trudy, and the drawee bank,
Shelfari Bank.
D. Omar has recourse against Shelfari Bank, in case Trudy does not reimburse Omar.
Writing the words, "pay to the order of" or "pay to", followed by name of the indorsee
and the signature of the indorser on an instrument makes it a ____________
indorsement.
A. special
B. restrictive
C. qualified
D. conditional
Kelley offers Hamilton a $20,000 check which she knows has been forged. Her offer is
best known as:
A. chiseling.
B. uttering.
C. altering.
D. remitting.
In terms of disputed amounts, satisfaction is the:
A. legal term used to describe the sacrifice that each contracting party must experience.
B. implied acceptance of less than what has been billed to the debtor.
C. performance of the accord.
D. express acceptance of less than what has been billed to the defaulter.
All of the following are covering laws except for:
A. a characterization of the global scene.
B. a description of the chief actor on the global scene.
C. a realpolitik description of the morality of the decision.
D. special considerations that must be factored into any international study.
Chuck deposits his paycheck drawn on Big Bank at Small Bank, and his account is
credited with this deposit. Three days later, Chuck is notified by Small Bank that his
paycheck has been dishonored by Big Bank due to insufficient funds, and the amount of
the check has been deducted from Chuck's Small Bank account. Which of the following
is true of this situation?
A. The settlement by Small Bank was provisional and was rightfully rescinded since the
paycheck was dishonored.
B. Small Bank acted too slowly and did not comply with the prescribed schedule of
Regulation CC.
C. Big Bank is the payor bank and hence, must reimburse Small Bank, the depositor
bank.
D. Small Bank cannot credit Chuck's account until it is certain that Big Bank will honor
the check.
Joe had made an agreement with Auto Insurance Co. not to use his van for commercial
business purposes when he purchased auto insurance. Joe had an accident while
delivering pizzas for Bigger Pizza, Inc. For which type of violation will Joe not be
covered under his insurance?
A. Fraudulent concealment
B. Misrepresentation
C. Concealment
D. Breach of warranty
Polonius registered for five nights at Cloud Hotel at $200 per night. Cloud requested
Polonius' credit card number when he registered. When Polonius went to a restaurant,
his credit card was denied, since it was at the authorized credit limit. Why was Polonius'
credit card limit likely reached by registering at Cloud Hotel?
A. Cloud charged the card the full amount of his stay.
B. Cloud charged the card $1,200 with the 20% overage allowed to cover possible
damages.
C. Cloud blocked Polonius' credit card when he registered.
D. Cloud made use of the card for payments other than paying the hotel tariff.
When a consideration is so ridiculously inadequate that it shocks the court's conscience,
it is considered:
A. unconscionable.
B. forbearance.
C. illusory.
D. detrimental.
Corazon employs Josefina, a C.P.A., to represent her in tax liability negotiations with
the IRS. Josefina is busy with other clients and delegates the negotiation to Lillian, a
non-C.P.A. member of her office. Has Corazon impliedly agreed to this delegation?
A. Yes, Corazon is relying on Josefina's skill and integrity.
B. No, Lillian is a member of Josefina's office.
C. Yes, Corazon must approve in writing any delegation of authority.
D. No, delegations within offices happen regularly.
Which of the following is true of conventional fixed-rate mortgages?
A. It has a rate of interest that changes according to fluctuations in the index to which it
is tied.
B. It involves no government backing by either insurance or guarantee.
C. It has a fixed interest rate during the life of the mortgage, where the monthly
payments by mortgagor increase over the term of the loan.
D. It has comparatively low fixed payments during the life of the mortgage, followed
by one large final payment.
Celebrity Shelly Dunkle, wishing to spend a few undisturbed days by herself, checks
into a resort hotel. She reserves a suite under the name of Barbi and stamps the initials
B.I. into the hotel register. She also orders room service and signs all hotel bills with
those same initials. Which of the following statements is true?
A. Because Shelly has not signed her real initials, she cannot be held liable for the cost
of the suite and all other bills she rings up under the initials B.I.
B. Because Shelly has not signed her real initials, the hotel management cannot prove
that any contractual agreement took place between them.
C. Because the initials B.I. constitute Shelly's legal signature, she is legally obligated to
pay for the cost of the suite as well as for other bills that she signs using those initials.
D. Because Shelly did not sign her real name both parties must split payments for all
bills signed with the initials B.I.
Dr. Samuel, a physician, is being sued for medical malpractice. If the "true locality" rule
was applied in his case, the court would judge Dr. Samuel's actions:
A. against those of a physician in a community of similar size and socioeconomic
character.
B. by concentrating on the geographical limits of a state border.
C. by looking at the standard of care used in the same exact locality as Samuel.
D. on the basis of expert testimony provided from his locality.
A check for which the issuing financial institution is both the drawer and the drawee is
called a ____________.
A. bank draft
B. teller's check
C. certified check
D. traveler's check
A&B, a general partnership, wants to become "A&B, LLC." "A&B Co." is already in
use by another business, and the state agency refuses to allow the new corporation to
use the name "A&B." Discuss how A&B should proceed.
Kim and Dave are filing for a divorce and dispute the value of assets they acquired
while married. Each has had appraisers value the assets, but the appraisers have reached
differing conclusions. How will a summary jury trial help in this situation?
Girard University offered Steamer Ferris a professional position. Girard offered to
provide Steamer a house and to pay him an annual salary of $50,000 plus benefits for
teaching three classes per semester. Steamer agreed to the contract as long as Girard
would also provide an administrative position for his wife. Discuss the agreements
between the parties.
Yanasko wanted to purchase Raymond-Mason Inc. When he approached the board of
directors about the merger, they told him that they were not interested. Yanasko then
suggested an asset acquisition. Again, the board refused. What measure could Yanasko
take to sidestep the board of directors and obtain control of Raymond-Mason? Explain.
Carlos, Maria, and Justus own land near a developing city as joint tenants.
Shane carefully wrote a check for $300 and gave it to Ethos Art Gallery for the
purchase of a painting. Ethos raised the check to read $800. Shane's bank honored the
altered check. Analyze the course of actions Shane could take.
Sun Supply Co. offered to sell Apartment Management Inc. air conditioner filters at $15
per case in a signed writing that stated the price was good for sixty days. Apartment
Management discovered that other sellers charge $20 per case for identical air
conditioner filters, but before it can accept Sun Supply's offer, Sun Supply withdrew the
offer after only 30 days, stating that changed market conditions had forced it to charge
more. Discuss the case.
In a case presented to a Philadelphia court, the judge and the jury realize that no
specific statute is applicable and decide to refer to previously recorded legal decisions
made in similar cases. Discuss.
On October 10th, Juliana sends Linda a letter offering to sell her book collection for
$15,000. Three days later, on October 13th, Juliana dies. On October 15th, without
knowing Juliana had died, Linda sends Juliana a letter accepting her offer. Juliana's
heirs inform Linda that the $15,000 offer is revoked and that they will not sell the
collection for less than $20,000. Linda demands specific performance. What result?
Judy's Print Shop has filed for a Chapter 11 bankruptcy, and Judy wonders if her
creditors, with whom she has had an increasingly abrasive relationship, will have any
say in her reorganization plan. Discuss the role of the creditors in a Chapter 11
reorganization.
Joseph offered to sell Chelsea his electric bicycle for $650. Chelsea told Joseph she
would be happy to buy his bicycle, and asked if the price included an extra tire. Joseph
said there was no extra tire. Chelsea then agreed to pay $650 for the bicycle, but Joseph
refused to sell stating that he now wanted $750 for the bicycle and that Chelsea had
made a counteroffer when she mentioned an extra tire. Discuss whether or not Joseph
may insist on receiving $750 for the bicycle.
Dillon received a call from a 900 telephone number and called it back without knowing
that she would have to pay for the call. The telemarketer did not warn her about the cost
of the call. She realized, for the first time when she received the telephone bill, that
there was a charge for the call. Discuss.
Big Union tells nonunion employees that unless they join the union, Big will make sure
that they do not work. Big Union in fact tells Small Co. that it could avoid "a lot of
problems" if it just refused to promote or grant wage increases to nonunion workers.
Discuss this situation.
Tremendous LLC proposes to merge with Small LLC. Janice, a member of
Tremendous, is opposed to this merger. The operating agreement allows mergers to be
approved by a simple majority vote. Discuss the legal rights Janice may assert in this
situation.
Morey purchased a house for $150,000, paying $15,000 in cash and giving a mortgage
to BigBank for the balance. When Morey defaulted on the loan, BigBank foreclosed
and sold the house for $25,000 less than Morey owed. Morey believed he no longer
owed BigBank any money. Discuss the case.

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