The person who issues a check to another is called the
a. maker.
b. payee.
c. drawee.
d. drawer.
A voluntary agreement by a debtor to have a portion of his or her wages turned over to
a creditor to repay a debt is known as a(n)
a. garnishee.
b. voluntary judgment.
c. attachment.
d. wage assignment.
If you rent a television set and then take it in for repairs, you are
a. a bailor.
b. a bailee.
c. both bailor and bailee.
d. none of these.
An example of an act of God is a
a. loss of electric power.
b. hurricane.
c. bridge collapse.
d. fire.
A sole proprietorship usually must
a. register to collect sales taxes.
b. comply with all applicable government rules and regulations.
c. obtain a license for certain types of businesses.
d. all of these.
A petty offense is
a. punishable by a year in jail.
b. one that results in a permanent criminal record.
c. not considered to be a criminal act.
d. none of these.
Government regulation protects the rights of
a. consumers.
b. employees.
c. stockholders.
d. all of these.
If a debit card owner never notifies the card issuer of the card’s loss, the cardholder will
be liable for
a. losses up to $50.
b. losses up to $100.
c. losses up to $500.
d. all losses.
A bailment implied in fact arises by
a. written agreement.
b. oral agreement.
c. both written and oral agreement.
d. acts of the parties.
To collect the proceeds of a life insurance policy, the purchaser must have an insurable
interest in the life of the insured when the
a. insurance is purchased.
b. policy is issued.
c. first premium is paid.
d. insured dies.
A buyer is insolvent under the UCC when he or she
a. will not pay debts as they become due.
b. cannot pay debts when they become due.
c. wrongfully repudiates a contract.
d. cannot exercise the right of replevin.
The First National Bank lends Simmons $1,000. Simmons agrees to pay the bank the
original loan plus $1,500 interest within a six-month period. This is an example of a(n)
a. revolving loan.
b. usurious loan by the First National Bank.
c. price-fixing agreement.
d. exculpatory clause in a contract involving a loan of money.
Mintz sued Jacobs for breach of contract. The court awarded Mintz $1 as damages. This
amount is known as
a. liquidated damages.
b. nominal damages.
c. premeditated damages.
d. abnormal damages.
The rules for managing the affairs of the corporation are called the
a. corporate charter.
b. articles of incorporation.
c. corporate bylaws.
d. corporate minutes.
To collect under an insurance policy for a theft loss, the insured must
a. notify the police.
b. notify the insurance company.
c. provide proof of the loss.
d. all of these.
A police officer’s legal right to arrest a suspect for a crime that was not committed in the
officer’s presence must be based on
a. reasonable doubt.
b. suspicion.
c. probable cause.
d. Miranda warnings.
Nonnegotiable instruments are subject to the rules of ordinary contracts and can be
transferred by assignment.
After accepting a draft, the drawee is known as the ____________________.
A police officer may arrest a person based on ____________________, the reasonable
belief that a crime has been committed.
What is the theory behind a liquidated damages clause in a contract?
A(n) ____________________ provides an income for the insured but does not provide
insurance protection.
Courts never question the adequacy of consideration.
The federal government’s power to regulate interstate commerce comes from the U.S.
Constitution.
In a sale of goods, risk of loss is generally more important than when title passes from
seller to buyer.
How does the UCC (Article 2) change the “mirror-image” rule?
The statute that fixes a time limit within which a lawsuit must be filed is called the
____________________.