If a maintenance employee at a hotel finds a pocketbook with $500 in cash while
cleaning an empty guest room, the employee:
a. is entitled to keep the property, because the employee has the legal status of a
“finder.”
b. must give the property to the manager of the hotel to be kept for the owner.
c. must place an advertisement in a local newspaper, and if the property is not claimed
within seven (7) business days, the employee is entitled to keep it.
d. can retain possession of the property until the owner establishes ownership.
If a negotiable order instrument is transferred to another party without an indorsement,
the instrument has been:
a. assigned.
b. negotiated.
c. obtained by fraud, and is therefore invalid.
d. obtained by fraud, but may be ratified.
An agent’s implied authority to perform any act reasonably necessary to execute express
authority is called __________ authority.
a. express
b. customary
c. apparent
d. incidental
A customer requested a price from a carpenter on a teak cabinet to be built according to
the buyer’s specifications. Because teak wood is difficult to obtain, the customer agreed
to pay the cost of the wood plus $175 and the carpenter agreed to build it. Which of the
following is correct?
a. Although the price is somewhat unclear, the parties have entered into a contract.
b. This is an agreement to agree, and is not binding.
c. This agreement fails for indefiniteness.
d. The carpenter is bound by the agreement, but not the customer.
In the case of an illegal contract, both parties usually are prohibited from seeking relief
in the courts:
a. if the illegal contract has not been performed.
b. if the contract has been partially performed.
c. if the contract has been fully performed.
d. all of the above.
Knowingly making false statements in a loan application to a federally insured bank:
a. is a form of embezzlement
b. is a federal crime.
c. is a crime in the state the bank operates in.
d. all of the above.
A party working for and under the control of another and authorized to enter into
contracts for that other person or entity is called an:
a. employee.
b. agent.
c. independent contractor.
d. attorney.
Which of the following is NOT a common law crime?
a. Larceny
b. Robbery
c. Blackmail
d. Arson
A copyright prevents the copying of an idea.
When a zoning ordinance is adopted, any existing property used for a purpose that does
not conform to the zoning ordinance:
a. must be demolished.
b. must no longer be used for a nonconforming use or purpose.
c. may be used for any use that does not conform to the zoning regulation.
d. may continue to be used for the same nonconforming use.
A provision stipulating the amount of money damages to be paid in the event of default
or breach of contract is known as a __________ damages clause.
a. nominal
b. contract
c. liquidated
d. breach
Which of the following statements is incorrect about fixtures?
a. Personal property may become a fixture by annexation to the realty.
b. Personal property may become a fixture by adaptation to the realty.
c. Personal property may become a fixture based on the intent of the person affixing the
personal property to the realty.
d. Personal property that is readily removable from the realty is generally a fixture.
Under which of the following doctrines is it held that a foreign sovereign cannot be
sued unless it engages in illegal commercial conduct?
a. act-of-state
b. sovereign compliance
c. Timberlane
d. sovereign immunity
A contract in which one party agrees to purchase goods from another contingent upon
the purchaser’s ability to locate suitable financing is said to:
a. be illegal.
b. result from undue influence.
c. contain a waiver.
d. contain a conditional promise.
A seller’s right to retain possession of goods until the seller has been paid is called a:
a. seller’s lien.
b. buyer’s lien.
c. merchandise estoppel.
d. nonpayment tort.
Contract clauses that limit a common carrier’s liability are void as contrary to public
policy.
Bon, located in Florida, desires to enter into a contract with Jon, a resident of Maine.
Neither wishes to meet face-to-face, as both are busy with a variety of business
interests. Instead, they wish to form a contract over the Internet. Would a contract
formed over the Internet be valid?
As Courts now tend to accept an agency€s reasonable interpretation of a statute
involving a technical matter, even though it was not the only interpretation that could
have been made.
The rights of partners are determined by the partnership agreement.
A holder through a holder in due course is subject to limited defenses.