Fred contracts to sell a certain tract of land to Mary for $20,000, but the contract is
silent as to the time of delivery of the deed and payment of the price. In this case, the:
a. payment of the $20,000 and the delivery of the deed are independent of each other.
b. delivery of the deed is a condition subsequent to the payment of the $20,000.
c. payment of the $20,000 and the delivery of the deed are mutually dependent and, in
the absence of an agreement to the contrary, are concurrent conditions.
d. payment of the $20,000 is a condition precedent to the delivery of the deed.
A classic and important example of strict scrutiny of classifications based upon race is
the 1954 school desegregation case of:
a. Board of Curators of the University of Missouri v. Horowitz.
b. Brentwood Academy v. Tennessee Secondary School Athletic Association.
c. New York Times v. Sullivan.
d. Brown v. Board of Education of Topeka.
An executor personally promises to pay the debts of the decedent’s widow. Under what
circumstances would the creditor need to have a writing in order to enforce this
promise?
a. If the promise is made to the widow.
b. If the promise is made to the creditor.
c. If it is for the executor’s economic benefit.
d. The promise is an undertaking for the executor to become primarily liable.
Under state law in many states and under the FTC rules and the Federal Consumer
Credit Protection Act, a contract solicited in a consumer’s home may be canceled
within:
a. 10 days by either party.
b. 10 days by the consumer.
c. three days by the consumer.
d. 20 days by either party.
Assume that Denmark, a member of the European Community, is contemplating the
enactment of a protective tariff for its fledgling CD industry due to domestic political
and economic pressures. Assume further that the EC has a tariff that it has also enacted
for all CD manufacturers within the EC that is considerably lower than the one that is
being proposed in Denmark. The policy behind the lower EC tariff is to promote freer
trade even at the risk of destroying some of the weaker manufacturers in that
organization. In this situation:
a. Denmark could enact the higher tariff since EC members give up no authority to the
organization in regulating trade and business practices.
b. Generally, when EC economic policies conflict with the laws of member nations, EC
law will prevail. Thus, Denmark’s tariff may be illegal.
c. Denmark could petition the United Nations Council of Economic Policy and if it
concurs with Denmark, the EC tariff policy would be overridden.
d. Assuming Denmark is a signatory to the WTO, Denmark could retain its higher tariff
since the purpose of the WTO is to protect domestic industries by promoting higher
tariffs.
In Soldano v. O’Daniels, the court re-examined the common-law rule of nonliability for
not taking affirmative action to save someone from peril. The court considered which of
the following factors with respect to imposing duties for affirmative action by third
parties?
a. The examination and balancing of intervening causes and physical capabilities.
b. The financial duties of victim to rescuer.
c. Moral blame attached to the defendant’s conduct and the policy of preventing future
harm.
d. Moral blame attached to the victim’s conduct.
Which of the following is correct with regard to the capacity of an agent?
a. The incapacity of the agent disqualifies him from making a contract that is binding on
his principal.
b. No mental capacity is necessary for an agent.
c. If an incompetent person who is not under guardianship appoints an agent, contracts
made by that agent are voidable.
d. A corporation has no capacity to act as an agent.
Under the parol evidence rule, which of the following types of evidence may be used to
vary or contradict the written agreement?
a. Prior oral or written agreements.
b. Contemporaneous oral or written agreements.
c. Subsequent oral or written agreements modifying the original agreement.
d. Both (a) and (b).
When both parties are mistaken as to the same set of facts, it is termed:
a. negligent misrepresentation.
b. unilateral mistake.
c. subjective concealment.
d. mutual mistake.
The U.S. Court of Appeals for the Federal Circuit reviews decisions of which of the
following?
a. Patent and Trademark Office.
b. Tax Court.
c. Bankruptcy Courts.
d. All of the above.
The National Pollutant Discharge Elimination System requires that discharge permits be
obtained from:
a. the EPA.
b. the Army Corps of Engineers.
c. an individual state.
d. All of the above.
An intentional misrepresentation of a material fact made with knowledge of the falsity
and intention to deceive and which a party justifiably relies upon to his detriment is
known as:
a. duress.
b. fraud in the execution.
c. fraud in the inducement.
d. non-fraudulent misrepresentation.
If the surety is a(n) __________, then the creditor may hold the surety liable as soon as
the principal debtor defaults.
a. absolute surety
b. conditional surety
c. subrogee
d. mortgagee
In general, procedural rules are exempt from the notice and comment requirements of
the APA.
Which of the following debts are dischargeable in a Chapter 7 bankruptcy proceeding?
a. A $10,000 judgment that has not yet been executed.
b. Medical expenses of $25,000.
c. Credit card debts of $15,000 from two years ago.
d. All of the above.
In the Carter v. Tokai Financial Services, Inc. case, the agreement was found to:
a. fit within the definition of a secured transaction.
b. be governed by UCC Article 9.
c. be for an initial term of five years, which ARC had an option to renew for nominal
consideration.
d. be a true finance lease.
Match each statement with the correct term below.
a. A sequence of previous conduct between parties establishing a basis for interpreting
their agreement.
b. A practice or method of dealing regularly observed and followed in a place, vocation,
or trade.
c. The transfer of a major part of one’s inventory not in the ordinary course of business.
d. A contract in which the risk of loss remains with the seller until the buyer “approves”
or accepts the goods.
e. A contract in which the seller bears the risk of loss and expense until the goods are
delivered to the carrier for shipment.
f. Transfer of right to possession and use of goods for a term in return for consideration.
g. A contract to hold open an offer.
h. An offer in writing by a merchant that gives assurance it will be kept open for a
period of time up to three months.
i. A contract in which goods are sold and delivered to the buyer with an option to return
them to the seller; the risk of loss is on the buyer until she returns the goods.
j. Delivery term for a shipment contract, free on board.
k. The obligation of the seller to convey the right to ownership without a lien.
l. A doctrine determining who in the chain of distribution is liable for a breach of
warranty.
m. Limits the time period for which a manufacturer is liable for injury caused by its
defective product.
n. Historically, a contractual relationship between the plaintiff and the defendant that
was necessary at common law to maintain a lawsuit.
o. An affirmation of fact or promise about the goods or a description, including a
sample of the goods, which becomes part of the basis of the bargain.
p. A contract in which the seller is required to tender delivery of the goods at a
particular destination; title passes to the buyer on tender of the goods at that destination.
q. A negation of a warranty.
r. Designation of specific goods as goods to which the contract of sale refers.
s. A person who is a dealer in the goods, or who by his occupation holds himself out as
having knowledge or skill peculiar to the goods or practices involved, or who employs
an agent or broker whom he holds out as having such knowledge or skill.
t. Honesty in fact in the conduct or transaction concerned.
1) course of dealing
2) firm offer
3) good faith
4) lease
5) merchant
6) option
7) usage of trade
8) bulk transfer
9) identification
10) destination contract
11) statute of repose
12) sale on approval
13) sale or return
14) shipment contract
15) express warranty
16) privity
17) vertical privity
18) warranty of title
19) FOB place of shipment
20) disclaimer
Which of the following is NOT a remedy of the buyer?
a. The buyer has the right of cover and to receive damages.
b. The buyer has the right to stop delivery of the goods.
c. The buyer may have the right to obtain specific performance.
d. The buyer may have the right to recover incidental and consequential damages.
Which of the following will be acceptable as a witness to a will?
a. The testator’s spouse.
b. The administrator of the estate.
c. The beneficiary of a testamentary trust.
d. The spouse of a beneficiary.
Defenses of absolute, conditional, and constitutional privilege apply to defamation and
also to publication of any matter that is an invasion of privacy.
A drawee bank’s refusal to certify a check constitutes dishonor of the instrument.
The registration requirement of the 1934 Act pertains to the entire class of securities
rather than to a specific offering.
The certificate of a limited partnership must be amended if a new general partner is
admitted.
The buyer and seller of goods cannot simultaneously hold insurable interests in the
goods.
If the breach by the seller concerns the whole contract, the buyer may cancel the entire
contract.