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1) if a term is left open in a sale of goods contract, that open term or gap can be filled
by inserting a presumption found in the uccs gap-filling rules.
2) a noncompetition clause is also known as a liability waiver.
3) the buyer may reject an installment delivery only if the nonconformity substantially
affects the value of that delivery and cannot be corrected by the seller in a timely
fashion.
4) a landlord who fails to maintain reasonable security may face liability for injuries
sustained by those who are criminally attacked on the property.
5) dave, who is in financial trouble, has ten creditors. an involuntary bankruptcy
petition against dave requires that three of these creditors sign.
6) the clean water act sets up a permit system for any dredging or filling activity in
wetlands that is administered by the army corps of engineers.
7) an agreement to divorce ones spouse is considered to be illegal.
8) the consumer financial protection bureau (cpfb) has authority to take regulatory
action to prohibit hidden fees charged by a financial institution.
9) a corporation is a legal entity independent of its owners.
10) the principals death automatically terminates an agents apparent authority.
11) if a seller gives a written warranty for a product to a consumer, the warranty must
be designated in the nature of full or limited warranty.
12) in order to create a bailment, the bailor and bailee need not agree in writing to the
existence of the bailment.
13) a will confers no present interest in the testators property.
14) in general, contracts made by insane (mentally impaired) persons:
a.can sometimes be ratified.
b.are unconditionally void.
c.are unconditionally voidable.
d.are voidable only if they involve necessaries.
15) in a partnership, when a partner makes a secret profit through a business
transaction, what is the remedy for such a breach?
a.paying the other partners additional compensation
b.hiring another individual to carry out the duties of the partner
c.recovering the profits of the partners competing venture
d.returning the profit made in the transaction
16) barchrome company issued debentures in november 1996 to raise capital to finance
a new manufacturing plant. john was one of the small investors who bought those
debentures. in december 2000, john discovered that barchromes registration statement
contained material misstatements (it had overstated current assets by 11 percent and
sales by 8 percent). john sued barchrome in january 2001. is barchrome liable?
a.yes, barchrome is liable under section 12(a)(2) of the 1933 act.
b.no, barchrome is not liable because the statute of limitations under section 12(a)(2)
has run out.
c.no, barchrome is not liable because the statute of limitations under section 11 has run
out.
d.yes, barchrome is liable under section 11 of the 1933 act.
17) which of the following is a means of obtaining control over the collateral?
a.the secured party becomes the banks customer for the deposit account.
b.the debtor is the bank with which the deposit is maintained.
c.the bank has agreed to comply with the debtors instructions regarding the funds in the
account.
d.the debtor becomes the banks customer for the deposit account.
18) a _____ has one or more general partners and one or more limited partners.
a.limited liability partnership
b.professional corporation
c.limited partnership
d.limited liability company
19) which of the following will make the seller liable under section 402a ?
a.the seller must be engaged in selling the product that allegedly caused harm.
b.the product may not be in a defective condition but must have caused injury.
c.the seller must prove that suitable modifications were made to the product in order to
avoid liability.
d.all cases except design-defect ones may be covered under this section.
20) as a general rule, members of the public are held to be _____ of contracts entered
into by their municipalities or other governmental units in the regular course of carrying
on governmental functions.
a.promisees
b.incidental beneficiaries
c.donee beneficiaries
d.creditor beneficiaries
21) at 17, otto signed a contract to purchase a new hummer by advancing a payment of
$50,000. however, when otto turned 20, he wished to disaffirm this contract. does the
law permit this?
a.yes, because he was a minor when he signed the contract.
b.yes, because he is not yet 21 years of age.
c.no, because a car is a necessary.
d.no, because otto implied his ratification.
22) which of the following is an example of actual notification of termination of agency
to third parties?
a.posting a notice in a public place
b.displaying a notice on the company website
c.a writing delivered to the third partys place of business
d.advertising the agencys termination in a newspaper of general circulation
23) which of the following is the most common method of obtaining ownership of
property?
a.claiming abandoned property
b.producing the property
c.inheriting the property
d.discovering the property
24) the ftc focuses on _____ when it attacks unfair acts or practices.
a.free and fair trade
b.antitrust action
c.consumer harm
d.anticompetitive behavior
25) which of the following defeats a banks liability for failing to observe a
stop-payment order?
a.that the order was oral rather than written.
b.that the bank was not given 14 days to obey the order.
c.that the bank paid a person against whom the customer did not have a defense.
d.that the bank has the customer sign a disclaimer holding the bank harmless for its
failure to exercise ordinary care and good faith regarding its handling of stop-payment
orders.
26) jason sold sally a car manufactured by abc corp. after driving the car for a couple
hours, sally found that the brakes did not function properly making it extremely difficult
for her to control the car. when she finally reached home, she rang up jason demanding
her money back. jason claimed that she should ideally talk with abc corp., who was the
manufacturers. according to jason, he was simply selling the car. which of the following
defenses is jason using to save himself?
a.no-privity
b.assumption of risk
c.contributory negligence
d.disclaimer
27) a purchaser of real property who wishes to receive the broadest protection with
respect to the property being conveyed should obtain a:
a.bargain and sale deed.
b.general warranty deed.
c.quitclaim deed.
d.recorded deed.
28) which of the following requires parties to the merger agreement for planned
mergers involving dollar values of stock or assets exceeding certain amounts to provide
advance notice to the ftc and the justice department?
a.section 7 of the clayton act
b.the robinson-patman act
c.section 2 of the sherman act
d.the hart-scott-rodino antitrust improvement act
29) a software engineer installs new software in dicks computer and returns the
computer to dick. dick defaults in his payments for the new software. the software
engineer loses his right of lien because:
a.this kind of service is not covered under statutory liens.
b.there is no surety or guarantor involved in the transaction.
c.he has given the computer voluntarily without asking for any consideration.
d.the computer rightfully belongs to dick.
30) today, most appealable decisions from the lower courts fall within the supreme
courts _____ jurisdiction, under which the court has discretion whether to hear the
appeal.
a.appellate
b.certiorari
c.original
d.exclusive
31) sara tells kate that she will give her $50 to clean her garage. when kate is halfway
done, sara decides to revoke her offer. is this a valid revocation?
a.yes, because sara is the master of the offer here.
b.yes, because sara can revoke the offer any time she feels like.
c.no, because this is a valid contract that cannot be revoked.
d.no, because this is now a bilateral contract.
32) adam hired kim as his agent to drive a cab. on his first day on the job, kim hit a
pedestrian who suffered serious injuries. the pedestrian wants to file a suit against both
adams and kim. can he file a single suit against both of them?
33) toyota automobiles launches a new model of suv. the design of the car was such that
the vehicle had a very broad rear. this posed a problem of parking the vehicle in the
regular parking space. adams, the owner of the suv, had parked his car on one side of
the road. since the vehicles rear was protruding onto the road, it was hit by a truck and
was damaged. under these circumstances, can adams sue toyota for a defective design?
are there any remedies for him to recover?
34) ginny is an agent of vroom! motors, and is designated to sell and deliver antique
cars. she spends her own money to call clients, visit them and finalize the deals. there is
no express agreement between ginny and vroom! discuss the situation.
35) as a prank, joe signs susans name to a pro-abortion petition that appears in a local
newspaper. susan is passionately opposed to abortion. thus, susan sues joe for both
defamation and for putting her in a false light in the public eye. is joe liable for either
tort? if it matters, assume that the town in question is a fairly liberal one with lots of
abortion supporters.
36) why are noncompetition agreements disfavored by the law?
37) after consuming a mind-altering drug, hal buys some real estate from edith for
$100,000. hal was completely wrecked when he made the deal, and could not
understand what he was doing. due to the aftereffects of the drug, hal goes into a coma
that lasts for one year. as soon as he awakes from the coma, hal tries to disaffirm his
contract with edith. edith maintains that hal cannot disaffirm because he has ratified the
contract. what should hal argue in return?
