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The fair market value of a 10-foot fishing boat is $1,000. In a special promotion, J's
Marina purchases a 10-foot fishing boat for $900. The boat is badly scratched when it
arrives. J's Marina, however, accepts the shipment and notifies the seller of the defect.
The boat as delivered has a value of $800. If the damaged boat is a breach of warranty
by the seller, the buyer may recover from the seller:
a. $100.
b. $100 plus incidental and consequential damages.
c. $200.
d. $200 plus incidental and consequential damages.
The state may bring an action for involuntary dissolution of a company if the
corporation has not paid its annual franchise tax.
a. True
b. False
Curt has no connection with Harvard University, but he has a new line of computer
software that he would like to market to university students and faculty under the name
of "Harvard Software." In this case:
a. Curt may, most likely, register the name "Harvard Software" under the Lanham Act.
b. Curt may, most likely, be able to copyright the name "Harvard Software" under the
Copyright Act.
c. it is unlikely that Curt will be able to register the name "Harvard Software," because
it falsely suggests a connection to an institution.
d. it is unlikely that Curt will be able to register the name "Harvard Software," because
it has not yet been market tested to see if the name confuses consumers.
If a contract is not clearly unilateral or bilateral, the courts presume that the parties
intended a unilateral contract.
a. True
b. False
The Magnuson-Moss Warranty Act contains disclosure and labeling requirements for
sellers of consumer products containing a written warranty.
a. True
b. False
The Administrative Dispute Resolution Act:
a. was enacted by Congress in 1980 to help alleviate the caseload on administrative
agencies.
b. requires federal agencies to use alternative dispute resolution.
c. was enacted to require state and federal agencies to use formal methods of dispute
resolution.
d. authorizes and encourages, but does not require, federal agencies to use techniques
such as mediation, conciliation, and arbitration to resolve disputes informally.
Closely held corporations sometimes impose supermajority or unanimous quorum
requirements even though this creates the possibility of deadlock at the director level.
a. True
b. False
Adam doesn't like having neighborhood teenagers walk across his yard at night. He rigs
an animal trap on the path the teenagers usually use to cross his land. One night, Tim
and his friends are walking across the yard when Tim gets caught in the trap. He is
taken to the hospital for his injuries. In this case:
a. Tim is a trespasser on Adam's property, and Adam has the right to use animal traps to
strongly discourage anyone from trespassing.
b. Adam has no duty toward Tim.
c. Adam is not free to inflict intentional injury on a trespasser.
d. All of these.
Jill owns and operates a donut shop. Under the Code, the flour, sugar, and other goods
used by Jill to make donuts are classified as:
a. farm products.
b. fixtures.
c. consumer goods.
d. inventory.
Bill wants to buy a new car. He goes to the bank to get a loan for the purchase, and
signs an agreement to pay
$10.00 per month in premiums on a term life insurance policy which names the bank as
the recipient of the policy proceeds in the event of his death before the loan is repaid.
The bank is a(n):
a. incidental beneficiary.
b. creditor beneficiary.
c. donee beneficiary.
d. assignee.
The usual method of showing the mutual assent necessary to create a contract is by
offer and acceptance.
a. True
b. False
Under the RUPA, dissolution is the equivalent of termination of a partnership.
a. True
b. False
A federally protected trademark cannot be "abandoned" through simple non-use.
a. True
b. False
Although corporations are not persons but artificial entities created by the state, it is
clear that they can and should be held morally accountable.
a. True
b. False
If no specific agreement exists, the partners bear losses in the same proportion in which
they share profits.
a. True
b. False
Anna has a contract to perform accounting services for Interior Corporation. She
breaches her contract in a nonmaterial way. Which of the following is correct with
respect to Anna's right to be paid for her work?
a. Anna is not entitled to any compensation for her services.
b. Anna will be paid only if her contract does not specify that it is a 'satisfaction"
contract.
c. Anna is entitled to the contractually agreed upon fee less any damages or loss her
breach has caused her clients.
d. Anna is entitled to full compensation since the breach is nonmaterial.
An agent is not normally liable on a contract he makes with a third party on behalf of
a(n) principal.
a. undisclosed
b. disclosed
c. partially disclosed
d. All of these are correct.
A limited liability company (LLC) provides limited liability to all of its owners and
permits all of its owners to participate in management.
a. True
b. False
The court has the sole right to accept or reject a Chapter 11 plan of reorganization.
a. True
b. False
Under the provisions of the Foreign Sovereign Immunities Act:
a. all foreign governments are immune from suit by U.S. citizens.
b. U.S. citizens in U.S. courts can always sue most foreign governments.
c. a car used by a foreign embassy in Washington can be seized to settle a judgment
against a driver.
d. U.S. courts may take jurisdiction in a suit against a foreign country for commercial
acts by that government that have a direct effect in the United States.
Nonfraudulent representation is made without scienter.
a. True
b. False
Answer the following:
a. What is the advantage to the indorser of a qualified indorsement?
b. What is the advantage of a restrictive indorsement?
The suretyship provision rule within the statute of frauds applies to cases involving one
party's promising to perform the duty of another party to yet a third party.
a. True
b. False
A transaction in which the owner gives possession of his personal property to another to
secure a debt is:
a. an extraordinary bailment.
b. a pledge.
c. a consignment.
d. commercial bailment.
Damages for reliance include expenses for:
a. lost profits.
b. injury to the person.
c. preparing to perform.
d. punishment of the breaching party.
Under the Model Act, the bylaws may contain any provision for managing the business
and regulating the affairs of the corporation as long as it is not contrary to or
inconsistent with the law or articles of incorporation.
a. True
b. False
Subject matter jurisdiction refers to the authority of a particular court to adjudicate a
controversy of a particular kind.
a. True
b. False
Clay that has been made into pottery is personal property.
a. True
b. False
The local supermarket has a large glass front door which is well lighted and plainly
visible. Nelson, who is new in the neighborhood, mistook the glass for an open
doorway and walked into it, shattering the door and injuring himself. The store:
a. is strictly liable to Nelson.
b. is not liable to Nelson.
c. is liable under resipsaloquitur.
d. has no duty to Nelson.
An assignment is made when the tenant transfers control of part of his entire interest in
the leased property to a third party.
a. True
b. False
Darrell goes to lunch with an office equipment salesman. After drinking two beers and
eating a Reuben sandwich, Darrell signs a contract to purchase a $1200 machine for the
office. Two hours later, he has second thoughts and decides a different machine might
be a better buy, so he calls the salesman and wants to disaffirm the contract based upon
intoxication. Darrell can avoid the contract on this basis.
a. True
b. False
The defendant must testify in a criminal proceeding.
a. True
b. False
