Which is not a correct statement about deeds?
a. The grantor must sign the deed.
b. A deed must be recorded to effectively pass title.
c. The fact that a deed is recorded provides notice to the world about who holds title.
d. A deed must be delivered to be effective.
If a bank pays a check whose face has been altered to increase the amount above that
which the drawer intended to pay, the bank:
a. is liable to the drawer for the amount of the increase.
b. has defenses against the drawer’s claims.
c. incurs liability only if it failed to examine the check before payment.
d. incurs liability only if the drawer made the alteration.
State supreme courts primarily have what type of jurisdiction?
a. appellate
b. limited trial court
c. general
d. none of the above
If a seller delivers defective goods, the buyer does not lose the right to object to the
breach of contract if the buyer:
a. accepts the goods.
b. accepts the goods with a reservation of right.
c. agrees to a modification of the contract.
d. accepts the performance without protest.
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.
Perfection of a security interest takes place:
a. upon the creditor’s possession of the collateral.
b. upon attachment in the case of a purchase money security interest in consumer
goods.
c. upon the filing of a financing statement.
d. all of the above.
Which is a correct statement about arbitration of contractual disputes regarding
international trade?
a. It is done in court.
b. There is extensive judicial review of the decision.
c. Parties frequently arbitrate in neutral countries.
d. It is not available in disputes of more than $1 million.
What type of insurance is written for a specified number of years and terminates at the
end of that period?
a. term insurance
b. whole life insurance
c. endowment insurance
d. universal insurance
If there is a consolidation of corporations A, B, and C:
a. corporations B and C are absorbed into corporation A, and corporation A continues to
exist.
b. all of the corporations continue to exist.
c. all corporations continue to exist, but corporation A owns all of the stock of
corporations B and C.
d. corporations A, B, and C cease to exist, and a new corporation with the property and
assets of the old corporations comes into being.
The federal government may impose regulations on business:
a. by virtue of its police power.
b. to advance the interests of homeland security.
c. to advance the nation’s economic needs.
d. if those regulations do not impose an unreasonable burden on interstate commerce.
The standard for commercial impracticability is:
a. hypothetical.
b. conjectural.
c. objective.
d. subjective.
A significant difference between an administrative agency hearing and a court hearing
is that:
a. a binding decision can only be made by an agency.
b. there is no right of trial by jury before an agency.
c. a court hearing allows no public intervention.
d. a court can enforce its decision.
Generally, which power(s) does (do) an administrative agency possess?
a. all powers necessary to effectively perform the duties entrusted to it
b. legislative only
c. judicial only
d. executive only
The Freedom of Information Act:
a. is to be strictly construed to prevent unauthorized disclosures.
b. has too many exemptions to be of any use.
c. is intended to subject agency action to public scrutiny.
d. puts the burden of proof upon the person requesting the information.
The remedy of specific performance will most likely be granted in the case of a(n):
a. employment contract.
b. contract to buy shares of publicly-traded stock.
c. contract for the sale of a business.
d. contract for the sale of Florida oranges.
Trespass applies to:
a. personal property only.
b. land only.
c. both personal property and land.
d. only government-owned property.
“Pump and Dump” is a violation of:
a. contract law.
b. criminal law.
c. standard jurisdictional practice.
d. securities law.
Once a bailment is established and the goods are returned in damaged condition:
a. the bailee is strictly liable for the loss.
b. the bailor has established an irrefutable case of liability on the part of the bailee.
c. the bailor has established a prima facie case of liability on the part of the bailee.
d. the bailor cannot collect on any insurance that the bailor maintains on the property;
instead, the bailor’s sole remedy is to pursue a breach of bailment action against the
bailee.
Section __________ of the Sherman Act applies to agreements, conduct, or
conspiracies to restrain trade, which can consist of price-fixing, typing, and
monopolization.
a. A
b. B
c. 1
d. 2
The Sherman Act focuses on:
a. unfair methods of competition.
b. combinations or contracts in restraint of trade.
c. permitted price discriminations.
d. intrastate commerce.
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 security agreement must:
a. identify the parties involved.
b. contain a reasonable description of the collateral.
c. demonstrate that the creditor intends to have a security interest.
d. all of the above.
When officers, directors, employees, and agents incur reasonable legal expenses while
acting on behalf of a corporation, the corporation will often:
a. ratify them.
b. not compensate them.
c. indemnify them.
d. none of the above.
A wrong that arises from a violation of a private duty is called a:
a. criminal action.
b. tort.
c. crime.
d. de mala.
In a __________, no sale takes place (meaning there is no transfer of title) until the
buyer approves, or accepts, the goods.
a. conditional sale
b. contingency sale
c. sale or return
d. sale on approval
Which of the following is not a preferential transfer?
a. a transaction for present consideration
b. a payment in the ordinary course of business
c. a. and b.
d. Both a. and b. likely constitute preferential transfers
Inadequacy of consideration may be evidence of:
a. the exercise of undue influence.
b. taking advantage of the economic circumstances of the other party.
c. unconscionability.
d. all of the above.
Professionals who fail to exercise normal care and skill in the performance of a contract
for their services may be sued for a special type of breach described as:
a. sub par performance.
b. illegal practice.
c. malpractice.
d. competence reservation.
A warranty is limited if:
a. only the original buyer is covered by the warranty.
b. the buyer must pay any cost for repair or replacement of a defective product.
c. it covers only part of the product purchased.
d. all of the above.
The contact rule applies in which of the following states?
a. Alabama
b. Indiana
c. New York
d. All of the above
Intrastate bills of lading are regulated by the:
a. Federal Bills of Lading Act.
b. Interstate Commerce Commission.
c. Uniform Commercial Code.
d. Common Carriers Regulatory Act.
Destroying information stored on a computer may be a crime.
Ordinarily, the landlord is not liable to the tenant for crimes committed on the premises
by third persons, such as when a third person enters the premises and commits larceny
or murder.
Agency is a relationship by which the principal is authorized to act on behalf of an
agent in negotiating and making contracts with third persons.
The maker is the person who writes out and creates a promissory note.
White-collar crimes generally involve violence.
Osvaldo was attempting to promote a corporation to be named Xavier, Inc. In that
capacity, Osvaldo signed a lease in the name of Xavier and ordered furniture in the
company’s name. The corporation was in fact formed and the board of directors,
knowing of the actions of Osvaldo, moved into the space Osvaldo had leased. Upon
delivery and inspection of the furniture Osvaldo ordered, numerous defects were
discovered, and the furniture was accordingly rejected and returned to the seller. The
corporation was not successful, and as a result, the rent was not paid. Osvaldo was sued
for the unpaid rent and for breach of contract concerning the furniture. The corporation
was sued on the same grounds. Decide the cases against Osvaldo and Xavier, Inc.
Nuisances may be classified as either private nuisances or public nuisances.
In most states, promises made to another based on moral obligation lack consideration
and are not enforceable.
An administrative agency cannot hold a hearing without a jury.
In applying the “foreign substance/natural substance” liability test in the sale of food or
drink, courts hold that there is liability if the seller does not deliver to the buyer goods
of the character that the buyer reasonably expected.
When goods are existing and identified to the contract and there is no document of title,
the title to the goods passes to the buyer at the time of the transaction.
Suretyship, guaranty, and indemnity contracts all create a relationship by which one
party becomes responsible for the debt or undertaking of another party.
Because nonprofit corporations have a more restricted range of powers than business
corporations, actions not authorized by the charters of nonprofit corporations are more
likely to be found ultra vires.
The head of the Department of Transportation reviewed a film that demonstrated the
effectiveness of air bags in automobiles. He then passed a rule that Ford Motor
Company must retrofit, without charge to the automobile owner, all of its 1985 models
as an experiment on the safety of the air bag. Ford refused to do so. The DOT held a
hearing and decided to fine Ford $1 million for violating its regulation. A notification of
this decision was mailed to Ford. What constitutional issues does this case raise?
A failure by the settlor to name a trustee renders a trust invalid.
A third person dealing with the agent of a disclosed principal ordinarily intends to make
a contract with the principal, not the agent.
The parol evidence rule is based on the theory that either there never was an oral
agreement or, if there was, the parties purposely abandoned it when they executed their
written contract.