Which of the following is NOT true about Social Security?
a. The purpose is to provide full retirement to almost all employees.
b. Employers and employees share the cost of contributions for the employees benefit.
c. Self-employed individuals pay the full cost of contributions for their benefit.
d. Social security consists of four main programs: OASI, DI, Medicare, and SSI.
Mary tells her accountant, “I must have this year’s audit completed by March 1, and
time is of the essence.” The accountant agrees to complete the audit by March Under
general contract law, if the audit is not completed by March 1, Mary does not have to
pay the accountant for the audit.
a. True
b. False
Garnishment is only a post-judgment remedy.
a. True
b. False
Remedies available to the FTC for violations of unfair and deceptive trade practices
include:
a. affirmative disclosure.
b. corrective advertising.
c. multiple product orders.
d. All of these.
A $40,000 fire insurance policy covers a building, which is valued at $50,000, and there
is an 80% co-insurance clause. If the building is totally destroyed by fire, the
policyholder will receive:
a. $50,000.
b. $40,000.
c. $32,000
d. $8,000
An express warranty requires that the warranty be expressed in words.
a. True
b. False
Which of the following is correct with respect to election of remedies?
a. The Code follows the doctrine of election of remedies with respect to contracts for
the sale of goods.
b. The remedy of specific performance is consistent with that of restitution.
c. A person who seeks an injunction may also seek incidental damages for the breach.
d. All of these are correct.
A number of states have abolished or modified the defense of implied assumption of
risk.
a. True
b. False
In the Pacific Custom Pools, Inc. v. Turner Construction Company case, the court
found:
a. that the trial court erred in granting a motion for summary judgment on the basis that
PCP had not been licensed in California and thus could not bring suit.
b. that the purpose of the relevant licensing law was to protect the public from
incompetence and dishonesty in those who provide building and construction services.
c. that, under the facts, PCP acted reasonably and in good faith to maintain its license.
d. PCP met an exception to the California statute providing that a contractor may not
maintain an action for the recovery of compensation for work requiring a license unless
it had a license at all times during performance of the work.
A binding promise or agreement requires that the parties to the agreement have
contractual capacity.
a. True
b. False
The president has significant control over administrative agencies housed within the
executive branch by virtue of the power to:
a. remove commissioners for causes set forth by statute.
b. appoint and remove the chief administrator of those agencies.
c. impound moneys appropriated to the agency by Congress.
d. All of the above.
Bill is currently enrolled in law school. He expects to graduate and take the bar exam in
order to be able to practice law. Before Bill becomes a lawyer, he promises to represent
his friend, Tom, in a breach of contract action if Tom will pay him 25% of the
settlement. Bill negotiates and the case settles for $50,000. Tom refuses to pay Bill. Bill
then graduates and attempts to sue Tom. Bill has a legal right to enforce the agreement.
a. True
b. False
When a breach of contract occurs, the nonbreaching party is required to take reasonable
steps to lessen or mitigate the damages that he may sustain.
a. True
b. False
a. Name two types of nonfradulent misrepresentation and define each one.
b. What remedies may be available for nonfraudulent misrepresentation?
The power of the state to tax is limited by:
a. the Commerce Clause.
b. the Import-Export Clause.
c. the Due Process Clause of the Fourteenth Amendment.
d. All of these.
Which of the following agents would not have authority to contract with third parties on
behalf of the principal?
a. A salesman who sells his employer’s goods.
b. A manager who hires employees for the store owner.
c. A factory worker hired to operate a machine.
d. A buyer who regularly buys merchandise for a store.
e. All agents have authority to contract with third parties on behalf of their principals.
Geoff’s fiancée, Susan, comes to meet his parents for the weekend. On Saturday
morning, while using Geoff’s mother’s hair dryer, the blower short-circuits sending
sparks across the guest room. Susan’s angora sweater and her hands are covered with
tiny burns. Susan’s mother is a lawyer and wants her to sue the seller of the dryer for
breach of warranty. Can she?
a. No, because horizontal privity would extend only to members of the family.
b. No, because privity would require that Geoff’s mother sue.
c. Yes, since she is a guest in the home of the buyer, the warranties would extend to her
in most states.
d. Yes, since under the Code all reasonable users are protected from injury.
What are the ways that cases may reach the U.S. Supreme Court?
a. Appeal by right.
b. Writ of certiorari.
c. Writ in personam.
d. Both appeal by right and writ ofcertiorari.
The Fair Housing Act only prohibits discrimination based on race and color.
a. True
b. False
A dissolution may be judicially decreed if a proceeding is brought by the state, a
shareholder, or a creditor.
a. True
b. False
In which of the following situations is there a third party incidental beneficiary who
would be unable to enforce the agreement?
a. Wholesalers, when the buyer of a business promises the seller that he will pay
outstanding debts to wholesalers who have supplied inventory for the business.
b. Workers, where a contractor agrees to post a performance bond to assure payment of
workers and material suppliers.
c. A debtor, where a new partner enters an accounting firm and agrees to pay a share of
debts incurred prior to his admission to the firm.
d. A doctor, when an automobile accident policy states that the insurance company will
reimburse the insured for medical expenses incurred as a result of an automobile
accident.
Under U.S. law, the CISG supersedes the UCC whenever either could apply.
a. True
b. False
Which of the following notes would not be negotiable? A written, signed promise to
pay:
a. $50,000 to the order of Crouch, and the maker of the note orally stated to Crouch that
the money would only be paid if all contractual specifications were met.
b. $500 and a rick of firewood on or before September 10.
c. which includes a statement that, “This note is given in partial payment for a piano to
be delivered in one week from date in accordance with a contract of this date between
the maker and the payee.
d. All of these.
Amendments to UCC Articles 2 and 2A were promulgated in 2003 to accommodate
electronic commerce and to reflect developments in business and law and, as of 2011,
these amendments had been adopted in all of the states.
a. True
b. False
A deed containing a number of promises including covenant of title, quiet enjoyment,
against encumbrances, and warranty are found in a:
a. warranty deed.
b. guarantee deed.
c. quitclaim deed.
d. general deed.
Express voluntary assumption of the risk is a defense to an action based upon strict
liability.
a. True
b. False
Under the Code, collateral is classified according to:
a. its nature and use.
b. the fundamental rights of the secured party.
c. the fundamental rights of the debtor.
d. None of these.
A sellers remedies upon the buyers default:
a. may be goods oriented, money oriented, or obligation oriented.
b. are subject to the doctrine of election of remedies.
c. are, under the UCC, the same as a buyers remedies for the sellers breach.
d. All of these.
The test for duress is objective and the act constituting duress must be a tort or a crime
in order to be wrongful.
a. True
b. False
Arnie negligently stopped his car on the highway. Beth, who was driving along, saw
Arnie’s car in sufficient time to attempt to stop. However, Beth negligently put her foot
on the accelerator instead of the brake and ran into Arnie’s car. In this case:
a. Arnie’s contributory negligence will prevent his recovery from Beth in all
jurisdictions.
b. Beth had the last clear chance to avoid the accident and will bear legal responsibility
for it.
c. Arnie has assumed the risk of the accident.
d. because both parties were negligent, in a state that follows the pure comparative
negligence doctrine, both parties will share the liability for their injuries.