The disadvantage of the sole proprietorship is
a. lack of flexibility in managing the business.
b. unlimited liability for debts of the business.
c. ease of formation.
d. none of these.
Freeman contracted to build a wooden garage for Douglas. Before construction began, a
local ordinance was enacted prohibiting wooden structures in the zone where the garage
was to be located. The agreement is ineffective under the common law because of
a. rescission.
b. accord and satisfaction.
c. release.
d. impossibility.
If the term of a lease is more than one year, the
a. tenant must give the landlord six months’ rent in advance.
b. lease must be in writing.
c. lease may be oral or written.
d. tenant may not sublease the apartment.
Terry agreed to sell an antique lamp to her neighbor for $300. Later that day, she
decided she would rather sell it to another person who offered her $400. The neighbor
has sued. The court will most likely rule that Terry must sell the lamp to the
a. other person, but for only $300.
b. other person for $400.
c. neighbor for $400.
d. neighbor for $300.
Boyd, an agent of Lowell, made a contract with Brink and signed the contract “S.
Lowell (principal) by A. Boyd, agent.” If Boyd breaches the contract, Brink can sue
a. only Lowell.
b. only Boyd.
c. both Boyd and Lowell.
d. neither Boyd nor Lowell.
Bixby offered a reward of $50 in the local newspaper for the return of his lost college
ring. Harris, not knowing of the published reward, found and returned the ring. Harris
could not legally claim the reward because
a. the offer was not definite.
b. the offer was not communicated to him.
c. the offer was not intended to be an enforceable obligation.
d. an offer of a reward is not binding.
Presentment of a note is
a. a demand for payment.
b. required to be made on or before the due date.
c. able to be done by mail, in person, or through a bank.
d. all of these.
The official decision of the jury entered into the court record is called the
a. verdict.
b. judgment.
c. deposition.
d. appeal.
Jamison wrote a check for $500 drawn on Charter Bank and gave it to Donalson. When
Donalson presented the check for payment the bank dishonored it for insufficient funds.
Donalson may sue:
a. Both Charter Bank and Jamison.
b. Jamison only.
c. Charter Bank only.
d. the Federal Reserve Bank.
An example of a multi-peril policy is a(n)
a. all-risk policy.
b. marine policy.
c. liability policy.
d. homeowners policy.
If a breach of warranty occurs,
a. the sales contract is discharged.
b. the buyer may sue for damages.
c. the seller must return the purchase price.
d. none of these.
All of the following are requirements of a partnership except
a. formation by two or more persons.
b. express agreement.
c. formation to carry on a business.
d. operation for profit.
A seller may reclaim goods delivered to an insolvent buyer if the seller makes a demand
within
a. two months.
b. thirty days.
c. ten days.
d. four years.
Under the common law, the death or serious illness of one of the parties to a contract
a. has no effect on the contract.
b. discharges a personal services contract.
c. makes the contract impossible to perform.
d. none of these.
In a bilateral contract, acceptance takes place when
a. the offeree promises to perform the act requested by the offeror.
b. the offeror promises to perform the act requested by the offeree.
c. the offeror has partially performed.
d. there has been full performance by the offeree.
A corporation may obtain financing by means of
a. common stock.
b. preferred stock.
c. bonds.
d. all of these.
Substantial performance is
a. slightly less than full performance.
b. achieved when a person in good faith has fulfilled all the major requirements of the
contract.
c. often applied to construction contracts.
d. all of these.
If a principal authorizes an agent to buy a tractor for $10,000, this is an example of
a. certain authority.
b. express authority.
c. incidental authority.
d. apparent authority
The thirteen intermediate courts of appeal of the federal court system are called
a. circuit courts.
b. district courts.
c. claims courts.
d. supreme courts.
The Wage and Hours Law sets minimum hourly wages for
a. executives.
b. professionals.
c. outside sales persons.
d. none of these.
The U.S. Supreme Court consists of
a. four justices.
b. five justices.
c. eight justices.
d. nine justices.
Of the following duties, the only one that an agent does not owe the principal is
a. loyalty.
b. reasonable skill.
c. accurate accounting.
d. compensation.
A bailment usually ends
a. when the agreement provides.
b. when the parties agree it should end.
c. when the bailed property is destroyed.
d. in any of these situations.
Group insurance is available to company employees only.
If the drawee of a draft refuses to pay the instrument, it is dishonored.
Substituting a new third party for one of the original parties is a novation.
Any law, whether enacted by Congress or by a state legislature, may be declared invalid
if it conflicts with the Constitution of the United States.
Granby, 5′ 2″ tall applied for a job as a baseball umpire. She was turned down because
of her height, the minimum height requirement for an umpire being 5′ 10″. Has any law
been violated?
A(n) ____________________ check is one that is dated after its actual date of issue.
The current use of illegal drugs is a disability under the Americans With Disability Act.
A suretyship is terminated if the debtor and creditor change the terms of the agreement
without the consent of the surety.