Terry made an offer by letter to Swire. Unless otherwise specified by Terry, Swire’s
acceptance of this offer would become effective when his letter of acceptance was
a. written and signed by Swire.
b. properly mailed by Swire.
c. received by Terry.
d. acknowledged by Terry.
Under the UCC, if a merchant offers to keep an offer open
a. the offer must be in writing.
b. the offer may be withdrawn at any time.
c. the offer is firm for at least three months.
d. the offeree must have given consideration.
Johnson owed Ginger $900. Johnson agreed to pay Ginger back by painting his house.
Ginger accepted this change in the contractual agreement. Until Johnson actually paints
Ginger’s house, this new contract is a(n)
a. satisfaction.
b. rescission.
c. accord and satisfaction.
d. accord.
An example of an administrative agency at the local level would be
a. a professional licensing board.
b. a zoning board.
c. a public utility commission.
d. none of these.
To create a legally binding contract, both parties to the agreement must be
a. able to read and write.
b. able to speak and understand English.
c. financially responsible people.
d. of sound mind.
An extended coverage rider would not cover loss caused by
a. burglary.
b. smoke.
c. explosion.
d. windstorm.
Preferred stockholders are
a. usually unable to vote at stockholders’ meetings.
b. entitled to receive dividends before common stockholders do.
c. entitled to receive stock certificates.
d. all of these.
Courts will allow recovery based on an illegal agreement when
a. the parties to the agreement are not equally at fault.
b. both parties are in pari delicto.
c. a tort is not involved.
d. there is not more than one illegal clause.
Jason, a golf pro, signed a one-year contract with the owner of a private country club as
a golf instructor. Three months after Jason started work, the owner of the club sold out
to Curry. The owner also assigned the remaining nine months of Jason’s contract to
Curry. Would Jason legally be required to work for Curry?
a. Yes, because a contract had been signed by Curry and the owner of the private club.
b. Yes, because Jason had only nine months left on his contract.
c. No, not unless Jason consented to the assignment.
d. No, not unless the private club was willing to open its membership to the public.
You borrowed $500 from the bank, agreeing to repay the money in five equal
installments on the 15th of each month. Without your permission, the bank changed the
payment date to the 14th. The contract is
a. discharged by alteration.
b. still valid.
c. discharged by rescission.
d. discharged by agreement
A person bringing a lawsuit for negligence must prove, among other things, that
a. a person’s act or failure to act was the proximate cause of the victim’s loss.
b. the negligent act was deliberate.
c. the victim was a public official.
d. the crime of assault also occurred.
In a sale of goods, the use of the term “as is” indicates
a. to the buyer that there are no implied warranties upon which the buyer may depend.
b. that in a sale the seller warrants that the goods are merchantable.
c. to the buyer that a sales contract needs no consideration.
d. that the sale includes most implied warranties.
One of the advantages of the partnership form of organization is
a. ease of transferring a partnership interest.
b. limited liability for partnership debts.
c. ease of organization.
d. ease of settling disputes among the partners.
Life insurance in which the premiums increase as the insured’s income increases is
known as
a. endowment insurance.
b. universal life insurance.
c. modified life insurance.
d. limited payment life insurance.
Multiple ownership by a husband and wife is called
a. tenancy in common.
b. tenancy by the entirety.
c. joint tenancy.
d. tenancy.
To be legally enforceable as a contract, the courts require that each party to an
agreement give up something of value called
a. witnesses.
b. a written document.
c. consideration.
d. none of these.
A person plants a bomb just outside the door of a building. The bomb exploded and
severely damaged the inside of the building. No one was in the building at the time of
the explosion. This act is considered as:
a. entrapment.
b. burglary
c. arson
d. burglary and arson
A negotiable instrument may be negotiated by
a. indorsement and delivery.
b. delivery alone.
c. either indorsement and delivery or delivery alone.
d. none of these.
Palmere owed Witmore $2,000. According to the terms of the agreement the money is
due at noon on March 1 at Witmore’s place of business. If Palmere tenders $2,000 in
cash at the agreed place
a. on March 2, Palmere will be discharged if Witmore refuses to accept.
b. at noon on March 1, Palmere will be discharged if Witmore refuses to accept.
c. at noon on March 1, Palmere will be discharged if Witmore refuses to accept;
however, Palmere remains liable for $2,000 but not for interest that accrued after March
1.
d. at noon on March 1, Witmore must accept the payment and apply it to the $2,000
debt even if Palmere is indebted to Witmore on another account.
An agreement is illegal and void if it violates
a. state usury statutes.
b. state licensing statutes.
c. state criminal statutes.
d. all of these.
An independent trucker is classified as a
a. consignor.
b. consignee.
c. contract carrier.
d. public carrier.
A title search might disclose
a. unpaid taxes.
b. mortgages against the property.
c. restrictive covenants.
d. all of these.
An estate tax is imposed on the deceased’s
a. real property.
b. personal property.
c. net estate.
d. property in trust.
An overdraft occurs when a
a. bank allows a customer to write checks for more than the amount of money on
deposit.
b. customer writes a bad check.
c. bank cashes a check that is more than three months old.
d. bank cashes a check dated after the actual date of issue.
The “mirror-image” rule has been incorporated into the UCC.
Employees have a legal right to carry on personal business during working hours,
provided it does not take more than one hour.
Even if the seller tenders nonconforming goods, the buyer must accept them.
Both sole proprietorships and partnerships must pay income taxes.
A civil jury in most states is now composed of at least twelve people.
Battery is any act that puts a person in fear of being physically harmed by another.
A grand jury determines the guilt or innocence of an accused person.
Notice of dishonor must be given by a holder of a negotiable instrument to a secondary
party within ____________________ business days after dishonor by the primary party.
Archer, Lewis, and Kaplan were partners in a clothing store. Archer and Lewis did not
like the present location of the store and wanted to move it to another street. Kaplan
objected. While Kaplan was out of town, Archer and Lewis signed a lease for a store at
another location. Is the lease binding on the partnership?
A(n) ____________________ gambler is one who participates in a gambling event
socially and for pleasure.