Some states have rejected the requirement of privity but not adopted any set rule.
Instead, these states function under the __________ rule.
a. known user
b. contact
c. flexible
d. foreseeable user
An individual who desires to make provisions that will be effective only on his or her
death is said to have:
a. probationary intent.
b. a prejudicial interest.
c. testamentary intent.
d. attestation intent.
The Sherman Act focuses on:
a. unfair methods of competition.
b. combinations or contracts in restraint of trade.
c. permitted price discriminations.
d. intrastate commerce.
When a contract proves to be a bad bargain:
a. the injured party is never bound by the terms of the contract.
b. courts will always imply terms that are necessary to avoid hardship.
c. parties are generally still bound by the terms of the contract.
d. the contract must be rewritten.
If an issuer requests its correspondent bank where the beneficiary is located to notify
the beneficiary of the issuance of a letter of credit, the correspondent bank is called
a(n):
a. advising bank.
b. foreign bank.
c. consulting bank.
d. coissuer.
An exculpatory clause most likely would be held to limit or disclaim liability for
malpractice:
a. in an action based on fraud.
b. in a suit brought by a third person.
c. when the accountant can reasonably be expected to stand behind the information in
question.
d. when the clause is conspicuous, unambiguous, and clear.
Three types of patents available under U.S. law are:
a. utility, product, design.
b. design, packaging, invention.
c. design, plant, utility.
d. utility, regulatory, common law.
Federal law __________ conflicting state regulation when a federal law regulates that
particular subject.
a. coincides with
b. is subordinate to
c. parallels
d. preempts
A homeowner who refinances her home mortgage may cancel the transaction:
a. if the terms of the contract were less favorable than anticipated.
b. within three business days.
c. only if she was the victim of fraud.
d. upon payment of a $1,000 penalty, as required by a Federal Trade Commission rule.
A provision in a residential lease stating that the landlord cutting off heat or water will
not constitute an eviction is:
a. valid.
b. a stipulation.
c. a covenant.
d. unconscionable.
Which of the following statements made by the seller does not likely constitute an
express warranty?
a. “This looks beautiful on you.”
b. “This is 100 percent wool.”
c. “This motor generates 100 horsepower.”
d. “This is a 3.2 liter rotary engine.”
A person who acquires a negotiable instrument with notice or knowledge that any party
might have a defense or that there is any adverse claim to the ownership of the
instrument:
a. has acted in bad faith.
b. has acted illegally.
c. cannot be a holder in due course.
d. has taken unfair advantage of the maker.
When a plaintiff sues on the basis of strict tort liability, the action is subject to:
a. the UCC statute of limitations.
b. the appropriate state€s tort statute of limitations.
c. no statute of limitations.
d. FTC approval.
The registration process under Section 5 of the 1933 act is divided into three time
periods. In order, they are:
a. waiting, prefiling, and posteffective.
b. waiting, prefiling, and executory.
c. prefiling, waiting, and posteffective.
d. prefiling, executory, and posteffective.
Fraud in factum:
a. occurs when a person is persuaded to execute an instrument because of fraudulent
statements.
b. occurs when a person signs an instrument as a result of being fraudulently deceived
regarding essential terms.
c. is not a universal defense.
d. cannot be raised against a holder in due course.
Article 2 of the Uniform Commercial Code applies to the sale of:
a. corporate stocks.
b. U.S. Treasury bonds.
c. goods.
d. insurance policies.
The person to whom an insurance promise is made is called:
a. the insured.
b. the insurer.
c. the policyholder.
d. both a. and c.
Generally, it is easiest to assign:
a. credit.
b. personal services.
c. money.
d. all of the above.
The stockholders of the Apex Corporation attended a special meeting of the
stockholders called to discuss matters of extreme urgency to the corporation. A quorum
was not present when the meeting opened, nor was a quorum present when the matters
to be treated in the meeting were discussed. Management, however, felt that the
importance of the issue was significant enough to warrant continuation of the meeting
without a quorum, and the stockholders voted on the issues presented during the
meeting. During the last fifteen (15) minutes of the meeting, just prior to the cocktail
hour regularly attended by many stockholders, enough stockholders had arrived to
constitute a quorum. Were the issues of this meeting dealt with in a valid manner?
The assignment of a lease discharges the original tenant from the duty to pay rent.
A corporation may be judicially dissolved when its management is deadlocked and the
deadlock cannot be broken by the shareholders.
Subject to statutory restrictions, parties are free to make an employment contract on any
terms that they wish.
When a nationally-known neurosurgeon in Chicago, Illinois sells her practice, the
contract may specify that the seller will not practice within a 100-mile radius of
Chicago for one year.
With regard to a bailment, a valid delivery and acceptance need not require that the
bailee be aware that goods have been placed within the bailee€s exclusive possession
or control.