The validity of a contract is not affected by:
a. the effect of the contract on the community.
b. unconscionability.
c. the absence of good faith.
d. the fact that the contract turned out to be a bad bargain for one of the parties.
A business formula, information compilation, or device that provides an advantage over
competitors that do not have it is known as a:
a. competitive advantage.
b. strategic advantage.
c. trade secret.
d. restraint of trade.
A consignment sale is treated as a(n) __________ under UCC Article 2, and the
dealer-consignee has full authority to sell the goods for the consignor and can pass title
to the goods.
a. ordinary sale
b. final sale
c. sale on approval
d. sale or return
A zoning restriction:
a. constitutes an eminent domain “taking.”
b. always entitles the landowner to compensation.
c. never lowers the value of the land it concerns.
d. may prevent the landowner from use of the land.
In the case of a nonshipment contract, risk of loss passes to the buyer upon actual
receipt of goods:
a. only if the seller is a merchant
b. only if the seller is a nonmerchant
c. only if the buyer has already paid for them
d. in all nonshipment contracts
Which of the following is an effective means of notice to purchasers of shares that there
are restrictions on the sale?
a. notation in the bylaws
b. resolution of the shareholders at a shareholders’ meeting
c. notation on the stock certificate
d. resolution of the directors at a directors’ meeting
An investment contract exists if which of the following elements are present?
a. an investment of money
b. a common enterprise
c. an expectation of future profits
d. all of the above
If a lost instrument is order paper, the finder __________.
a. becomes the assignee of the instrument.
b. becomes the owner of the instrument.
c. becomes the holder of the instrument.
d. does not become the holder of the instrument.
All goods other than those existing and owned by a seller at the time of a transaction are
called:
a. existing goods.
b. tangible goods.
c. future goods.
d. intangible goods.
The Fourth Amendment to the United States Constitution€s protection against
unreasonable searches applies to:
a. personal homes only.
b. businesses only.
c. both homes and businesses.
d. none of the above.
The Uniform Commercial Code contains a statute of frauds rule relating to sales of
personal property, specifically:
a. goods.
b. chattel paper.
c. real property.
d. none of the above.
A bequest of a pearl necklace is a:
a. general legacy.
b. specific legacy.
c. specific ademption.
d. residuary ademption.
A person who has a right to buy on credit can transfer that right to a close relative.
For a security interest to attach, the creditor must file a financing statement.
The EPA is the primary federal agency responsible for the enforcement of
environmental laws.
Arnold was the sole shareholder, president, and chief executive officer of Algernon
Enterprises, Inc. Acting on behalf of Algernon, Arnold negotiated the credit purchase of
inventory from Amax. The contract was signed in the name of Algernon Enterprises.
Algernon never paid the sums due on the contract, and Arnold and the corporation were
sued. Is Arnold personally liable to Amax?
A promise that in fact does not impose any obligation on the promisor is known as an
elusive promise.
Instruments are transferable, written, signed promises or orders to pay a specified sum
of money.
A corporation is considered a person for purposes of the due process clause of the
United States Constitution.