1) article 2 of the ucc mandates that the parties to a sales contract state in specific and
unambiguous language the exact terms of the contract. otherwise, courts will declare
the contract unenforceable.
2) ucc covers accord and satisfaction by the use of an instrument called full payment
check.
3) the offerors death automatically terminates an offer, but the offerees death does not.
4) a partners transfer of his/her transferable interest has no effect on his/her status as a
partner, absent a contrary agreement.
5) in all partnerships, profits are shared according to the amount of capital contributed
by each of the partners.
6) under section 11 of the securities act of 1933, an underwriter is liable for errors in the
entire securities act registration statement because an underwriter is an expert.
7) minisculea, a small nation that exists on a pacific ocean island, is a major producer
and seller of a substance known as xyz. minisculea is also the leader of a cartel of other
xyz producers. the cartel has raised xyz prices, a fact of significant concern to the united
states, given the many strategic uses to which xyz can be put. u.s. officials have
engaged in ongoing discussions with minisculea about this subject. if minisculea and
the other cartel members are sued in a u.s. court for allegedly violating the u.s. antitrust
acts by fixing the price at which they sold xyz to u.s. customers, their best defense
would be:
a.the state action doctrine.
b.the sovereign compulsion doctrine.
c.the doctrine of sovereign immunity.
d.the act of state doctrine.
8) judith george makes an offer to sell a plot of land using a normal letter and states no
authorized means by which the offeree, helga holmes must respond if she accepts. if
helga accepts the offer using a normal letter, which of the following is true?
a.the acceptance is effective upon dispatch.
b.the acceptance is effective when it is received.
c.the offer is invalid because it fails to stipulate the means of acceptance.
d.the acceptance would be effective upon dispatch even if the means of acceptance is
unreasonable.
9) under the doctrine of _____, courts would refuse to grant the equitable remedy of
specific performance for breach of a contract if they found the contract to be
oppressively unfair.
a.unconscionability
b.mirror image
c.community-of-interest
d.contract bar
10) the american legal system gives considerable power to the jury; however, it also has
devices for limiting that power. the _____ provides a judgment to one party before the
jury gets a chance to decide the case.
a.motion to dismiss
b.motion for a new trial
c.motion for summary judgment
d.motion for a directed verdict
11) vernon and josh are partners in an accounting firm. they agree that only josh has
authority to make contracts to perform audits of clients, an agreement known by
mantron company. nonetheless, vernon and mantron contract for the partnership to audit
mantrons financial statements. vernon takes the contract to josh, who reads it and says,
ok, we can perform the audit. in this situation, josh has _____ the contract.
a.nullified
b.modified
c.ratified
d.transferred
12) to be successful in a civil action under section 11 of the securities act of 1933
concerning liability for a misleading registration statement, the plaintiff must prove
which of the following?
a.defendants intent to deceive: yes; plaintiffs reliance on the registration statement: yes.
b.defendants intent to deceive: yes; plaintiffs reliance on the registration statement: no.
c.defendants intent to deceive: no; plaintiffs reliance on the registration statement: yes.
d.defendants intent to deceive: no; plaintiffs reliance on the registration statement: no.
13) ian kendler makes brian hyson an offer for a plot of land. in the offer, kendler
stipulates that the acceptance of the offer must be sent by registered mail but hyson
mails his acceptance through the regular postal service. which of the following is true?
assume that the restatement (second) of contracts does not apply.
a.there is no acceptance and no contract.
b.a contract was formed at the time hyson dispatched the letter.
c.a contract was formed at the time kendler received the letter.
d.the acceptance is invalid because the contract does not relate to sale of goods.
14) abby borrows money from cain bank and baker cosigns on the loan contract. abby
fails to repay this loan and cain bank collects the debt from baker. baker is entitled to
recover the amount he paid to the bank from abby. this is known as the:
a.right of subrogation.
b.right of return.
c.right of reimbursement.
d.right of garnishment.
15) jessica a tenant invited her friend angelina for dinner at her house. jessicas carpet
that was on the kitchen floor was in a torn condition. as angelina walked over it, her leg
got trapped and she fell down. her knee got dislocated. angelina can sue:
a.neither jessica nor the landlord.
b.only the landlord.
c.both jessica and her landlord.
d.only jessica.
16) equity securities consist of:
a.debentures and promissory notes.
b.short-term notes payable.
c.common and preferred shares.
d.bonds and debentures.
17) a limited partners obligation to contribute capital may be enforced only by the:
a.general partners and the creditors of the limited partnership.
b.limited partners of the limited partnership.
c.limited partnership and the general partners.
d.limited partnership and creditors of the limited partnership.
18) larry leased an apartment to terry. the lease agreement prohibits terry from
assigning or subletting the property. such a provision:
a.is generally void.
b.is unenforceable, unless larry changes his mind.
c.is unenforceable, unless terry needs to sublet the property.
d.is generally enforceable.
19) landlord wishes to evict tenant from his apartment because tenant is three months
behind on the rent. tenant has indicated that he is unwilling to move out. which of the
following is an accurate statement about landlords rights and/or obligations under the
circumstances?
a.landlord cannot sue tenant; instead, landlord must negotiate further with tenant.
b.landlord may use the degree of force necessary to physically remove tenant from the
apartment.
c.landlord may change the locks on the apartment while tenant is temporarily away, so
that tenant cannot get back in.
d.landlord has to follow the prescribed procedure for eviction in that state.
20) the environmental protection agency administers the ‘superfund.” the cost of
cleaning up a superfund site can be substantial. where does the money come from to
pay for this?
a.federal tax revenues
b.state tax revenues
c.fees assessed against all chemical companies
d.fees assessed against all corporations that use chemicals
21) ian, a lawyer, sent an offer to raymond on october 1 offering to sell ians car for
$5,000. the offer did not contain a provision stating when it would terminate. under
these circumstances, when will that offer terminate?
a.after 5 days, as per the 5 day rule.
b.after 10 days, as per the 10 day rule.
c.after a reasonable period of time.
d.when either ian or raymond terminates it.
22) which of the following ethical theories emphasizes that certain human rights are
fundamental and must be respected by other humans?
a.rights theory
b.utilitarian theory
c.teleological theory
d.profit maximization theory
23) jack received a check as payment for the work he did. he indorsed the check
without recourse. what legal effect does this have?
a.the drawer of the check is discharged from primary liability on the check.
b.jack is discharged from secondary liability on the check.
c.the drawer of the check is discharged from secondary liability on the check.
d.jack is discharged from primary liability on the check.
24) describe the similarities between the united states approach to advertising regulation
and that taken by other countries.
25) alan, bob, charles, david, and edward are the only shareholders of harbin
corporation. it is a close corporation. each owns 20 percent of the shares. there are five
director positions and each serves as a director. one day the other four find out that
edward has committed a serious crime. they decide that they wish to expel him from the
corporation. what action may the others take? discuss.
26) how are the cleanups of hazardous waste sites required by cercla funded?
27) state x has a law requiring that all cars have a functioning muffler. the laws sole
purpose is to protect all the citizens of the state against noise pollution. donna violates
the law when her muffler falls off her car while she is driving on a busy freeway. pete, a
citizen of state x, suffers damage to his car after colliding with the muffler. pete sues
donna under negligence per se. will he recover? why or why not?
28) jan opens a sandwich shop across the street from another sandwich shop run by
amy. amy is disturbed by this competition, and she agrees to pay jan $5000, in
exchange for jans promise to quit the business and not to engage in a similar business
within ten-mile radius of amys business. is this contract legal and enforceable? why or
why not? if the agreement is not enforceable, how might jan and amy restructure it to
increase its chances of being legal?
29) why is the mirror image rule not strictly applied to modern commercial
transactions?
30) in entering into contracts for services, customers might be influenced by statements
made by sales representatives. businesses offering services often use standardized form
contracts. under the parol evidence rule, pre-contract statements made in these
circumstances are effectively unenforceable. how can a business effectively and
ethically use standardized form contracts and the parol evidence rule?
31) ajax has accumulated debts which the company is unable to pay. the company has
four creditors who hold security provided by ajax and are valued as follows: ace
($-6,000), crest ($-3,000), maxton ($-8,000) and interon ($9,000). which of these
creditors will be able to successfully file a petition for involuntary bankruptcy for ajax?
32) discuss a partners authority to borrow money during winding up.