Most states have adopted the theory that a mortgage is a lien on real property for the
payment of a debt.
a. True
b. False
“Acceptance” under the UCC always means taking possession of goods.
a. True
b. False
A precatory expression:
a. cannot impose a trust because of indefiniteness.
b. may be so definite as to impose a trust.
c. does not depend upon the court’s interpretation of the intent of the settlor.
d. is ineffective because it does not use the required words to create a trust.
The courts in law systems such as the one in the United States have developed a body
of law that serves as precedent for determination of later controversies. This is
sometimes called:
a. statutory law.
b. common law.
c. equity law.
d. administrative law.
Maxine offered to sell her video camera to Tom for $200 and also stated to Tom, “I will
give you two weeks to accept my offer.” One week later Tom learned that Maxine had
sold the video camera to Cindy. Maxine:
a. has revoked her offer to Tom.
b. must sell Tom a video camera for $200 because she made a firm offer to him.
c. must get the camera back from Cindy if Tom accepts within two weeks.
d. Both (b) and (c) are appropriate alternatives in this case.
Congressional legislation implementing the Madrid Protocol:
a. allowed copyright holders to gain international recognition of their copyright.
b. allowed U.S. trademark owners to file for registration in the many member countries
of the Protocol by filing a single application.
c. gave international trade secret protection.
d. simplified the procedure for acquiring international patents.
Under the UCC, an acceptance must always be identical to an offer for a valid contract
to be formed.
a. True
b. False
Many states impose no limit on the rate of interest which may be charged on loans to
corporations.
a. True
b. False
CodeSectionMatching
a. Statute of frauds.
b. Warranty of title.
c. Warranty of merchantability.
d. Definition of “merchant.”
e. Firm offers.
f. Good faith.
g. The “battle of the forms.”
h. Parol evidence.
i. Definition of ‘sale.”
j. Cure.
1> 1-201(19)
2> 2-104(1); 2A-103(3)
3> 2-106
4> 2-201; 2A-201
5> 2-202; 2A-202
6> 2-205; 2A-205
7> 2-207
8> 2-312(1)
9> 2-314
10> 2-508(1),(2); 2A-513(1),(2)
Pablo promises to sell to Candice an automobile for $12,000, for which Candice
promises $12,000. A bilateral contract exists.
a. True
b. False
Officers who trade on inside information must return their profits to the corporation.
a. True
b. False
In a “no arrival, no sale” contract, the seller is responsible to the buyer for the goods’
failure to arrive. a. True
b. False
A trade secret is commercially valuable information that is guarded from disclosure and
is not general knowledge.
a. True
b. False
An implied contract is not an enforceable contract.
a. True
b. False
Payment to a named payee by a bank with a check drawn on itself is a:
a. cashier’s check.
b. trade acceptance.
c. sight draft.
d. time draft.
Which of the following need NOT be proved in order to establish the defense of
economic duress?
a. That one side involuntarily accepted the terms of another.
b. That circumstances permitted no other alternative.
c. That one party explicitly made an economic threat.
d. That the circumstances leading up to the contract were the result of coercive threats
or acts of the opposite party.
An approved SIP is treated as both state and federal law.
a. True
b. False
An agent hired to buy gems for his principal can buy a diamond to give to his wife only
if he asks his principal first;otherwise, he has breached his fiduciary duty.
a. True
b. False
Article 2A of the UCC, approved by drafters of the Code in 1987 and amended in 1990,
deals with leases of personal property, which exceed $100 billion annually.
a. True
b. False
Numerous states impose no limit on the rate of interest that may be charged on:
a. loans to corporations.
b. credit card transactions.
c. loans made by certain designated types of lenders.
d. All of these.
The United States has, in 1993, withdrawn from participation in the General Agreement
on Tariffs and Trade
(GATT).
a. True
b. False
Tom decides to invest in the stock of Triad Television after he reads Edgar’s audit,
which includes a statement, known by Edgar to be false, as to the value of numerous
worthless securities held as corporate assets. If Tom sues Edgar in a state using the
broadest test for determining an accountant’s liability for negligence to third parties, he
will be entitled to:
a. nothing, since he is an incidental beneficiary of the audit contract.
b. damages if he is a reasonably foreseeable plaintiff.
c. have Edgar complete a new audit.
d. rescission of his purchase contract.
Cailee has a garage sale at which she sells a defective food processor to Dylan. Cailee
will be liable to Dylan in strict tort liability under Section 402A of the Restatement of
Torts if he is injured using the product.
a. True
b. False
Under the rule in Hadleyv.Baxendale, only foreseeable damages can be recovered. a.
True
b. False
The CISG does not apply to sales of goods for personal, family, or household use.
a. True
b. False
Banking and the collection process of checks is governed solely by state law, primarily
the UCC.
a. True
b. False
If the goods that are the subject of a sale are in the possession of a bailee and are to be
delivered without being moved, when does the risk of loss pass to the buyer?
a. When the seller tenders a negotiable document of title
b. When the buyer receives a negotiable document of title or a nonnegotiable document
of title is tendered to the buyer
c. When a negotiable or nonnegotiable document of title is tendered to the buyer
d. When the seller tenders a negotiable or nonnegotiable document of title
NAFTA established a free trade area for the United States, Mexico, and Central
America.
a. True
b. False
Mary’s car was parked just outside the east door of the Civic Center. When she tried to
exit, three ominous-looking gang members were blocking that door. She called the
police who arrested the three for loitering. If Mary brings suit against them for false
imprisonment:
a. she will lose if there was another exit she could have used.
b. she will lose because she was not harmed by the confinement.
c. she will win even if there was another way out because she was, in effect, being
confined to the Civic Center.
d. she will win because they were blocking her passage to her car.
Meeting competition is a defense to a charge of price discrimination under the
Robinson-Patman Act.
a. True
b. False
In all instances other than a drawee of an unaccepted draft or uncertified check, the only
presentment warranty that is given is that the warrantor is a person entitled to enforce
the instrument or is authorized to obtain payment on behalf of the person entitled to
enforce.
a. True
b. False
“Insider trading” rules pertain to:
a. employees.
b. officers.
c. directors.
d. All of these.
Compliance with the affirmative action requirement for contractors:
a. is the same for construction and nonconstruction contractors.
b. demands nonconstruction contractors with 50 or more employees or with contracts
for more than $50,000 to have a written affirmative action plan.
c. means that federal contractors need only implement affirmative action in promoting
employees, not in recruiting.
d. affects only federal construction contractors and subcontractors.
Congress has concluded that__is the most prevalent method used for distributing
pornography andperpetrating fraudulent schemes, and it enacted the___to deal with the
problem.
a. spam; CAN-SPAM Act
b. mala prohibita crime; Model Penal Code
c. mala in se crime; RICO Act
d. white-collar crime; Sarbanes-Oxley Act