An agreement that lacks consideration is said to be
a. illegal.
b. a benefit to the promisor.
c. a benefit to the promisee.
d. unenforceable.
A check is made payable to “Mark Spitz.” If Spitz wishes to negotiate the instrument,
he must
a. indorse the instrument.
b. deliver the instrument.
c. indorse and deliver the instrument.
d. indorse or deliver the instrument at the discretion of Mark Spitz.
Fagan, who held Slick’s $500 three-month promissory note dated November 10,
presented it to Slick on February 25 and demanded payment. Slick refused to pay it,
claiming that presentment had not been made on the proper date. Can Fagan still legally
collect on the instrument?
a. Yes; the liability of primary parties is unconditional.
b. Yes; the liability of primary parties is conditional.
c. No; Slick is a secondary party.
d. No, because Slick is the payee.
Brown offered to sell Wilson an air conditioner for $300. When Wilson said he needed
time to think about the offer, Brown said that he would keep the offer open for five
days. Which of the following statements is correct?
a. Brown may not withdraw the offer until the end of the fifth day.
b. Brown may withdraw the offer at any time before acceptance is made.
c. Brown’s agreement to keep the offer open created an option to purchase the air
conditioner.
d. Brown may not withdraw his offer without Wilson’s consent.
While waiting to have a bill corrected, the consumer
a. must pay the disputed amount.
b. must pay any undisputed amount.
c. does not have to make any payments.
d. must contact the local credit bureau.
Mendon took her diamond ring to a jeweler to have it resized and arranged to pick it up
in three days. When she returned, she discovered that a salesperson had sold her ring to
a customer who was looking for a used diamond. To legally reclaim the ring from the
customer, Mendon would need to prove that the
a. customer was not satisfied with the ring.
b. salesperson was dishonest.
c. customer did not purchase the ring in good faith.
d. customer failed to inform the salesperson that the ring was not for resale.
Of the following acts, the one that is not a crime is
a. slander.
b. arson.
c. embezzlement.
d. shoplifting.
The authority of government to regulate business is based on
a. court decisions.
b. regulations of administrative agencies.
c. statute law.
d. all of these.
A contract is not generally discharged by
a. refusal of a tender of performance.
b. accord and satisfaction.
c. novation.
d. a refusal of a tender of payment.
The Uniform Commercial Code governs
a. violations of civil law.
b. equity cases.
c. business transactions.
d. citizens’ rights.
Marks, a retailer, wrote and ordered 10 dozen red, white, and blue T-shirts for a July 4th
celebration from the Whitney Wholesale Company. Since the Whitney Company did
not have the colors requested, it sent blue and white shirts, thinking that Marks could
use them. The Whitney Company did not, however, notify Marks that the substitution
had been made. Shipping the wrong goods
a. constitutes an acceptance of Marks’ offer.
b. constitutes a breach of contract.
c. has no effect on the formation of a contract.
d. constitutes an acceptance of Marks’ offer and constitutes a breach of contract.
The defense that a person was a minor when he or she signed a note is a(n)
a. real defense.
b. invalid defense.
c. personal defense.
d. none of these.
If an agent commits a tort while acting within the scope of the agency, the party who is
liable is
a. the agent alone.
b. the principal alone.
c. both the principal and the agent.
d. neither the principal nor the agent.
A technique for enabling large stockholders to exercise control in a corporation is
a. voting trusts.
b. cumulative voting.
c. quorum control.
d. pre-emptive rights.
The clause in a life insurance policy that permits an insured to pay the premium after
the due date is the
a. coinsurance clause.
b. grace period clause.
c. nonforfeiture clause.
d. insurable interest clause.
An income tax preparation service franchise is an example of a
a. product franchise.
b. business plan franchise.
c. state franchise.
d. federal franchise.
An insured who can no longer pay the premiums is protected by a(n)
a. incontestable clause.
b. coinsurance clause.
c. nonforfeiture clause.
d. all of these.
A mentally ill person (not judged incompetent by a court) can be held liable for
necessaries in a quasi contract.
If a promissory note falls due on March 9, proper presentment can be made on March
10.
____________________ is concerned with the relationships between and among
individuals.
Employers are required to provide employees with safe working conditions.
If one party to a contract deliberately makes a material change in its terms without
permission of the other party, the contract is discharged by impossibility.
A check drawn on the bank’s own funds is called a(n) ____________________.