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1) ace software co. signed a deal with gill associates, a partnership, and has extended
credit to it. paul, a partner in gill associates, retires but his partners continue the
business. in order to release paul from the debt owned to ace, which of the following
must occur?
a.the continuing partners must release paul from liability on the debt.
b.paul must not secure his release from ace.
c.paul has to contribute toward the debt as early as possible.
d.the continuing partners should volunteer to set off pauls liability.
2) which of the following can be negotiated or transferred only by indorsement?
a.order paper
b.bearer paper
c.cashiers check
d.tellers check
3) a person who seeks to recover damages for deceit has to establish, apart from the
elements of rescission, an additional element of:
a.injury.
b.injustice.
c.fraud.
d.materiality.
4) the uniform commercial code changed the traditional statute of frauds rule by making
it:
a.easier to satisfy that rule.
b.mandatory to have contracts in writing.
c.apply to service contracts only.
d.apply to real estate contracts only.
5) section 404 of the sarbanes-oxley act of 2002 is considered controversial because:
a.sensitive corporate information has to be published which may be detrimental to a
company.
b.a company has to significantly increase its budget to comply with section 404.
c.the procedure for complying with section 404 is lengthy, complicated, and time
consuming.
d.section 404 results in diminished corporate responsibility of the officers of a
company.
6) today, trespassers who are injured while on someone elses land:
a.never recover against the landowner in negligence.
b.recover against the landowner in negligence only when this is permitted by statute.
c.recover only when the possessor knows they are likely to trespass.
d.recover only when the owner willfully and wantonly injures them after their presence
is known.
7) what type of transactions are governed by the uniform commercial code?
a.contracts for the sale of goods.
b.contracts for services.
c.contracts for the sale of land.
d.any commercial contract, whether for goods, services, or land.
8) which of the following is a relevant consideration?
a.a preexisting duty
b.agreement to settle an unliquidated debt
c.a preexisting moral obligation
d.nominal consideration
9) section 4(2) of the 1933 act covers the _____ offering exemption from the
registration provisions.
a.intrastate
b.interstate
c.private
d.small
10) if a person signs a check as an accommodation indorser:
a.his contractual liability is that of an indorser.
b.his contractual liability is limited to the payment of the principal.
c.his contractual liability is more than that of an indorser.
d.his contractual liability is limited to the payment of the interest.
11) jack went to the abc casino to gamble. abc offers its customers one free spin of the
million dollar wheel if they fill out an application form. jack filled out the form, spun
the million dollar wheel, and won. however, now abc refuses to pay, claiming that
because jack did not purchase his chance at the million dollar wheel, jack gave no
consideration and therefore, no contract was formed. identify the accurate statement.
a.no contract was formed because jack paid no money for his chance at the million
dollar wheel.
b.no contract was formed because abc did not sign any written contract as an obligation
to do so.
c.a contract was formed because filling out an application can constitute legal
consideration.
d.a contract was formed because no consideration is needed when a customer takes
advantage of a free offer.
12) amber gave her boyfriend, hunter, an expensive set of stereo speakers for his
birthday. two days later, hunter broke up with amber and began dating kelly. amber is
both heartbroken and furious. is she entitled to get the speakers back from hunter?
a.yes, because hunter provided amber no consideration.
b.no, because she intended to make a gift of the speakers and actually delivered them to
hunter.
c.no, because this was a gift causa mortis.
d.yes, because a donor is entitled to revoke her gift within a reasonable time.
13) _____ are model statutes drafted by private bodies of lawyers and scholars.
a.precedents
b.uniform acts
c.ordinances
d.equitable remedies
14) which of the following is most likely to be considered a sale of goods to which the
ucc applies?
a.a dentist places a crown over a patient's tooth.
b.a gas station sells and installs a new battery in a car.
c.a hairstylist uses a crme rinse in styling a client's hair.
d.a contractor builds a house for a landowner.
15) since the relationship between the insurer and the insured is contractual in nature,
the parties must fulfill all elements of:
a.a quasi-contract.
b.an indemnity.
c.a wager.
d.a binding contract.
16) joe is the owner of the restaurant yummy bites. neil is an employee of a competitors
restaurant moms kitchen. joe pays neil $1000 to obtain recipes from moms kitchen.
however later, joe has second thoughts and forbids neil to obtain such recipes. joe wants
to get his money back. identify the most accurate statement that might help joe.
a.joe can recover the amount because he has rescinded the contract before any illegal
act has been done by neil.
b.joe cannot recover the amount because he has entered into an illegal contract.
c.joe cannot recover the amount because such contracts are unenforceable and illegal.
d.joe can recover the amount because the contract between him and neil is a
quasi-contract.
17) kriegs will created a trust to take effect upon kriegs death. the will named kriegs
spouse as both the trustee and personal representative (executor) of the estate. the will
provided that all of kriegs securities were to be transferred to the trust and named kriegs
child as the beneficiary of the trust. which of the following is true under the
circumstances?
a.krieg has created a testamentary trust.
b.kriegs spouse may not serve as both the trustee and personal representative.
c.krieg has created a spendthrift trust.
d.the trust is invalid because securities cannot be transferred to a trust.
18) an advertisement is in violation of the federal trade commission act only when it:
a.is likely to mislead any consumer.
b.is likely to mislead a consumer who acts reasonably.
c.actually deceives any consumer.
d.does not involve a material misrepresentation.
19) _____ is a wrongful coercion that induces a person to enter or modify a contract.
a.deceit
b.mistake
c.fraud
d.duress
20) in a case of intentional interference, a defendant generally escapes liability when his
contract interference:
a.was guided by public interest.
b.was defamatory in nature.
c.was regarding prospective competitive advantage.
d.was guided by a void bargain.
