1) june included an exculpatory clause in the lease agreement for her house that may
was renting. during her lease period, may slipped and fell on the staircase which was
made of faulty and rotten floorboards. can may recover damages from june if she files a
lawsuit?
a.yes, because june is responsible for the care of the premises.
b.yes, because the lease period is not yet over.
c.no, because may should have been more careful.
d.no, because courts will probably enforce the exculpatory clause.
2) sammy entered into an oral contract with macaulay for sale of goods amounting to
$900. sammy paid the amount. but macaulay refused to deliver the goods. sammy thus
suffered serious losses because of macaulays breach of contract. sammy sued macaulay.
at the same time macaulay took the defense under statute of frauds. under which
principle is sammy protected?
a.tortious liability
b.vicarious liability
c.part performance
d.promissory estoppel
3) the _____ rule has been criticized frequently as providing too much protection for
the managers of corporations.
a.co-determination
b.vicarious liability
c.wall street
d.business judgment
4) which of the following terms in a contract for the sale of goods requires the seller to
insure the goods?
a.fob
b.fas
c.cif
d.c & f
5) which of the following factors can impose direct penalties for corporate
misbehavior?
a.market forces
b.corporate management
c.labor unions
d.investors
6) when close corporation shareholders want to ensure that there is a market for their
shares upon their deaths, they should use a:
a.buy-and-sell agreement.
b.right of first refusal.
c.consent restraint.
d.provision disqualifying purchasers.
7) bill submits a time card for a non-existent employee. the employer issues the payroll
check. bill forges the indorsement and negotiates the check to ted. which of the
following statements holds true for this situation?
a.the loss from the forged check is borne by the holder in due course.
b.the check cannot be negotiated as it carries the signature of a non-existent person.
c.the employer has the right to refuse payment to ted.
d.ted submits the check to the employer and gets the mentioned amount.
8) in which of the following circumstances are offerors free to revoke their offers?
a.in case of common law rule on revocation.
b.in case of unilateral contracts.
c.in case of the availability of an option.
d.in case of a promissory estoppel.
9) which of the following is true about perfection of fixtures?
a.automatic perfection does not apply for consumer goods that are yet to become
fixtures.
b.a creditor who relies on attachment for perfection will prevail against other creditors
who hold an interest in the good to which the consumer good is attached.
c.fixture filing is always necessary to perfect the security interest in any good.
d.a creditor with a security interest in fixtures obtains perfection merely by attachment
of her security interest to the good.
10) guilty by association is a form of:
a.begging the question.
b.argumentum ad hominem.
c.argumentum ad populum.
d.gamblers fallacy.
11) _____ allows individuals to inspect files that agencies maintain on them and to
request that erroneous or incomplete records be corrected.
a.the privacy act of 1974
b.the disclosure act
c.the government in the sunshine act of 1976
d.the freedom of information act
12) a bilateral contract is taken out of the statute of frauds when:
a.it is completed within a year from the day of its existence.
b.it is fully performed by at least one party.
c.it is put in writing.
d.it has strict rules of performance.
13) mark filed a financing statement on daniels collateral on march 2. however,
attachment of this interest did not occur until march 4. meanwhile, charles, who had
attached a security interest on the same collateral on march 1, filed a financing
statement on march 3. which interest has priority and why?
a.marks interest has priority because he filed the security before charles did.
b.charles interest has priority because he attached the security first.
c.marks interest has priority because his attaching was the latest.
d.charles interest has priority because his filing was the latest.
14) an executed contract is one that has been:
a.terminated by operation of law.
b.terminated by the parties voluntary agreement.
c.fully performed by one or both parties.
d.fully performed by both parties.
15) sean made an oral promise to sell a piece of land to manny. manny took a huge loan
from the bank by mortgaging everything he had. after taking almost half the money
from manny, sean decides that he wants to sell the land to jason who is offering a higher
price for the property. which of the following doctrines can manny take recourse to in
order to implement his oral contract with sean?
a.integration
b.subsequent agreement
c.confirmatory memorandum
d.part performance
16) in most situations, the ucc uses the test of _____ for determining when a person is
excused from performing contractual obligations.
a.commercial impracticability
b.superior knowledge
c.frustration of purpose
d.impossibility
17) a _____ indorsement is one where the indorser disclaims her liability to make the
instrument good if the maker or drawer defaults on it.
a.special
b.conditional
c.qualified
d.blank
18) rules of the new york stock exchange (nyse) and the national association of
securities dealers (nasd), which apply to firms listed on the nyse or nasdaq, require that
independent directors approve _____ committee nominations.
a.executive
b.audit
c.compensation
d.nomination
19) baker and able signed a contract which required able to purchase 600 books from
baker at 90 per book. subsequently, able, in good faith, requested that the price of the
books be reduced to 80. under the circumstances, the oral agreement is:
a.unenforceable, because able failed to give consideration, but proof of it will be
otherwise admissible into evidence.
b.unenforceable, due to the statute of frauds, and proof of it will be inadmissible into
evidence.
c.enforceable, but it is not a valid agreement.
d.enforceable, and proof of it will be admissible into evidence.
20) a _____ serves as constructive notice to the world that the creditor claims an
interest in collateral that belongs to a certain named debtor.
a.model audit
b.financial report
c.financing statement
d.continuation statement