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Which of the following is true of a bank's duty to honor checks?
A. The drawee bank is not under a duty to honor all checks drawn by its customers in
presence of sufficient funds in the customers' accounts.
B. If there are insufficient funds on deposit, the bank may charge the customer's
account if it does not create an overdraft.
C. If a bank fails to honor a check because of a mistake on its part, the bank is liable to
the customer for damages the customer suffers.
D. The drawee bank has a liability to the holder of the check, whether the check is
certified or notified.
While the Washington family was gone for the weekend, their home was broken into
and robbed. The professional boxer who lived next door saw the thief, apprehended
him, and forced him to return the stolen possessions. When the Washingtons returned,
Mr. Washington told the boxer that he would give him $5,000 for his efforts. The next
morning, Mr. Washington decided to give him only $2,000. Which of the following is
true of this case?
A. Mr. Washington broke his contract with the boxer.
B. The boxer's act of bravery would be a past consideration.
C. The bargained-for-agreement obligated Mr. Washington to pay the boxer $5,000.
D. Mr. Washington would lose if the boxer brought a suit against him to recover the
amount.
Under the ____, sellers must ship orders within the time promised in their
advertisements. If no time period is promised, sellers must either ship the order within
30 days or send the consumer an option notice.
A. telemarketing sales rule
B. negative option rule
C. Cooling-Off Rule
D. Mail and Telephone Order Rule
A business asks a court to interpret the way in which newly enacted shoplifter detention
legislation will be applied if the business, at some future point, detains a suspected
shoplifter. The court may:
A. issue an advisory memorandum.
B. convene a conference of business and consumer representatives.
C. not interpret the statute until faced with a case.
D. ask the legislature to issue an advisory memorandum.
The Federal Circuit was established by Congress primarily to:
A. hear appeals on questions of law from the lower courts.
B. streamline and unify patent law.
C. decide on the details involved in bringing a case to trial.
D. simplify issues and avoid unnecessary arguments and surprises in the subsequent
trial.
Local business activity carried on within state boundaries is known as ____.
A. public commerce.
B. interstate commerce.
C. intrastate commerce.
D. local commerce.
In a limited partnership:
A. general partners have limited liability for the firm's debts.
B. a certificate of limited partnership must be filed with the secretary of state's office.
C. limited partners are participating investors.
D. general partners take a limited part in the management of the firm.
Rodney parks his car at Car Stack Parking Lot, Inc. On the back of the parking stub
provided to Rodney, there is a statement typed in large letters: "NOT RESPONSIBLE
FOR DAMAGE TO CARS." When Rodney returns, his car has been dented by the Car
Stack attendant who was attempting to park more cars on the lot. According to law, the
statement on the stub:
A. is enforceable against Rodney in any event.
B. is enforceable against Rodney only if he had the opportunity to park elsewhere.
C. is not enforceable against Rodney in case he instructed the attendant to be careful
around his car.
D. is not enforceable against Rodney, since it can be proved to violate public policy.
Better Houses, Inc. has been contracted to build an addition on the Joyners' house. It
built half of the addition and then unexpectedly announced that it was not going to
finish the job. Such a desertion of work is called:
A. a constructive breach of contract.
B. substantial performance.
C. abandonment of contractual obligations.
D. a repudiation of contract.
If a bank pays a forged check, it is liable for _____ the payee's funds.
A. converting
B. detaining
C. withholding
D. diverting
Permits issued under the Clean Water Act relate to:
A. the use of river water for agricultural purposes.
B. the use of potable water for industrial purposes.
C. the use of water by industries beyond permissible limits.
D. release of pollutants into the waterways within legal limits.
Ignacio wins a monetary judgment at trial but is denied an award of attorney's fees. The
defendant, Salazar, acts to challenge the adverse trial court decision before an appellate
court. Ignacio wants to challenge the denial of an award of attorney's fees. Ignacio
should:
A. attempt rebuttal.
B. attemptsurrebuttal.
C. cross-appeal.
D. counterclaim.
The court vests the responsibility of liquidating the assets of the debtor for the benefit
of all interested parties in the:
A. debtor in possession.
B. creditor in possession.
C. case trustee.
D. primary trustee.
Kelley offers Hamilton a $20,000 check which she knows has been forged. Her offer is
best known as:
A. chiseling.
B. uttering.
C. altering.
D. remitting.
Samuel, a physician, is involved in a malpractice case. If the true locality rule was
applied in his case, the court would judge his actions:
A. against those of a physician in a community of similar size and socioeconomic
character.
B. by concentrating on the geographical limits of a state border.
C. by looking at the standard of care used in the same exact locality of Samuel.
D. on the basis of expert testimony provided from his locality.
The Economic Security Council:
A. will take the place of existing international agencies.
B. will replace the World Bank only.
C. would be a multi-country, decentralized international agency.
D. would coordinate the work of existing agencies.
Mark enjoys hacking into the computer databases of companies, but never takes or
damages any data. Mark has violated which of the following statutes?
A. Access Device Fraud Act
B. Computer Fraud and Abuse Act
C. Wiretap Act
D. Mark has not violated any statute since there is no damage
"People should never make unsupported judgments about one another but should
instead always investigate the facts in an effort to uncover the truth about the character
of a person or the nature of a situation." This is a rule originating from:
A. ethical relativism.
B. the positive law theory.
C. utilitarianism.
D. the social contract theory.
Planter, Inc., sold $100,000 in plants and plant supplies to the Ace Corporation. When
the supplies were delivered to Ace, Ace ordered its bank, Fourth National, to pay
$100,000 to Planter. Fourth National debited Ace's account and ordered Chase Superior,
Planter's bank, to credit Planter's account for $100,000. In this transaction:
A. Planter is the originator and Ace is the beneficiary.
B. Ace is the originator and Chase Superior is the beneficiary.
C. Ace is the originator and Planter is the beneficiary.
D. Fourth National is the beneficiary and Chase Superior, the originator.
Elaine asked Meredith if she could borrow Meredith's dress for an awards ceremony.
Meredith gave Elaine the dress and asked for nothing in return for this favor. This
transaction was a:
A. bailment for the sole benefit of the bailor.
B. mutuum.
C. mutual-benefit bailment.
D. bailment for the sole benefit of the bailee.
The concept of justice includes a fair and balanced interpretation of the law. This is:
A. regulatory justice.
B. distributive justice.
C. individual justice.
D. balanced justice.
When one of the parties to a contract has failed to do what he or she has previously
agreed to do, it is a:
A. fraud in the inducement.
B. failure of consideration.
C. breach of contract.
D. lack of delivery.
Susan and Stanley are in a partnership called Easy Partnership. Susan purchases a truck
with her personal funds with title to the truck naming Easy Partnership. Who owns the
truck?
A. Susan
B. Susan and Stanley
C. Easy Partnership
D. Susan, Stanley, and Easy Partnership
Which of the following is true of a firm offer?
A. It occurs when parties intend to be bound by a contract but fail to mention the price.
B. It occurs when a seller agrees to sell all its produce to a particular buyer.
C. It occurs when a merchant promises to hold an offer open without any
consideration.
D. It occurs when a buyer agrees to buy all its requirements from a particular seller.
Chandra is an invalid and therefore she cannot put her signature on her will. Her friend
Nina signs the will for her. When Nina signs on behalf of Chandra there is no one else
in the house. Is the will valid?
A. Yes, since Chandra was present during the time the will was signed.
B. No, since she did not date it.
C. Yes, since she is presumed to be mentally competent.
D. No, since there were no witnesses present during the signing of the will.
Peter lost control of his car and drove it though his neighbor Clyde's fence. If Clyde
were to bring a claim against Peter for the damage to the fence, what type of insurance
would Peter need to cover the damage?
A. Homeowner's insurance
B. Property damage liability insurance
C. Collision insurance
D. No-fault insurance
Silas, upset because his new car broke down, yells that he would 'sell this piece of junk
for $100." Ida overhears Silas and says, "I accept and will pay you $100." Silas
A. must sell his car for $100 since his statement was clear and definite.
B. need not sell his car for $100 since he was clearly angry.
C. must sell his car for $100 but only if he were speaking directly to Ida.
D. must sell his car for $100 because his anger does convey serious intent.
For an employee to succeed in a wrongful discharge lawsuit grounded on the public
policy tort exception to employment-at-will, he/she should prove ____, which requires
the existence of a definite public policy, clearly created by the U.S. Constitution, the
state constitution, or a general governmental policy.
A. causation
B. jeopardy
C. clarity
D. absence of justification
