Richardson offered to sell her used motorcycle to Evans for $450. Evans said, “I accept,
but would you also replace the front tire.” Neither Richardson nor Evans is a merchant.
a. Evans has accepted the offer.
b. Evans has rejected the offer.
c. Richardson may treat her offer as accepted or rejected.
d. Evans’s statement “I accept” is of no legal significance.
The purpose of licensing laws is
a. to protect the public.
b. to require persons to meet educational standards.
c. to require applicants to show competence.
d. all of these.
A subpoena is an order by the court served on
a. the attorney to produce the defendant in court.
b. a person to appear and testify as a witness in a legal action.
c. the warden of a jail to produce the prisoner in court.
d. a person to be examined for possible jury duty.
Typical covenants in a lease include
a. an option to purchase by the tenant.
b. disposition of the property upon the landlord’s death.
c. the right to sublease.
d. escheat of the property.
Under the lemon laws in most states, if a car cannot be repaired after a certain number
of attempts or after a certain period of time, the owner is entitled to
a. a refund of the purchase price.
b. a new car.
c. either refund of the purchase price or a new car.
d. neither a refund of the purchase price nor a new car.
The party who becomes the first indorser of a note is generally the
a. payee.
b. maker.
c. drawer.
d. drawee.
Business activity that a state has authority to regulate within its borders is called
a. interstate commerce.
b. multicounty commerce.
c. municipal commerce.
d. intrastate commerce.
In the daily newspaper, Webber Motor Company advertised a new convertible at a
special reduced price. When Luhr tried to purchase one at the advertised price, Webber’s
salesperson stated that they had only one of that model and that it had already been
sold. Luhr insisted that Webber Motor Company must sell him one at the reduced price,
as he was accepting their newspaper offer. Is Luhr correct?
a. Yes; an advertisement in a newspaper is a communicated offer to all customers who
wish to accept the offer.
b. Yes; all advertisements are general offers that result in binding agreements when
accepted by customers.
c. No; newspaper advertisements are only invitations to customers to make an offer.
d. No; advertisements are offers, but they do not have to be accepted by the advertiser
once the product is sold out.
The Wurzer Corporation entered into a written contract to hire Dixon in an executive
position for six years for $200,000 a year. After three years, Dixon asked for a raise of
$25,000 per year. Wurzer at first refused, but then agreed because of the pressure placed
on him by Dixon. After the sixth year Dixon left his position with the Corporation and
Wurzer sued for a return of the extra $25,000 per year for the three remaining years on
Dixon’s contract. Who should win the case?
a. Dixon, because Wurzer agreed to the raise.
b. Dixon, if the raise was agreed to in writing
c. Wurzer, even though Wurzer agreed to the raise
d. Wurzer, because Dixon had applied pressure to get the raise.
A deed that gives to the buyer whatever title the seller has is a
a. bargain and sale deed.
b. warranty deed.
c. quitclaim deed.
d. mortgage deed.
In most states a tenant may
a. not sublease without the approval of the landlord.
b. sublease provided the lease does not prohibit it.
c. sublease with the consent of the sublessee.
d. not sublease.
Drake broke into a store at 1 A.M. but left without taking anything. Did Drake commit a
crime? Why or why not?
Reimbursement for a loss is called
a. subrogation.
b. indemnification.
c. release.
d. deductible.
Insurance purchased from a broker is effective when
a. the application is filled out.
b. the first premium is paid.
c. the company accepts it.
d. a binder is issued.
A security interest created by law is called a(n)
a. attachment.
b. foreclosure.
c. judgment.
d. lien.
A debtor filing for bankruptcy
a. must receive credit counseling.
b. must take a financial means test.
c. must take a credit management course.
d. all of these.
The maximum amount that may be owed on a credit card at any one time is called the
a. finance charge.
b. line of credit.
c. annual percentage rate.
d. collateral.
The first papers served in a civil action are
a. the complaint and summons.
b. a summons and answer.
c. a complaint and answer.
d. a deposition and subpoena.
Martin leaves a suit purchased through a catalog at a tailor shop for alterations. The
tailor shop also sold men’s suits. While the suit was hanging on a rack waiting to be
repaired, the tailor accidentally sold Martin’s suit to McCabe, who had no knowledge
that the suit belonged to someone else. Martin can recover from
a. Mc Cabe for the return of the suit but cannot recover from the tailor shop because the
tailor made an honest mistake.
b. the tailor shop for the purchase price of the suit but cannot recover from McCabe
since McCabe had no knowledge that the shoes were owned by Martin.
c. both the tailor shop and McCabe.
d. none of these.
Farber became insolvent as a result of a loss of employment. What options does Farber
have to solve his financial problems?
An offer may be stated in words or implied from the actions of the offeror.
In a partnership, most decisions are made by a(n) ____________________ vote of the
partners.
Substantial performance does not apply to contracts calling for payment of money.
A(n) ____________________ contract is the agreement executed by an owner and real
estate broker for the sale of the owner’s property.