Discuss the importance of having contracts in today’s market economy.
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Statutory law has been supplanted by the common law of partnerships.
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The Restatement approach employs a “reasonably foreseeable” standard.
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Even if a jury unanimously finds a defendant guilty, the judge can find in the
defendant’s favor by granting a motion for ‘˜judgment notwithstanding the verdict’.
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If an authorized means of acceptance is expressly present, any attempt by the offeree to
accept by a nonauthorized means is effective upon dispatch.
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Ex-ship not only specifies the particular ship on which the goods are to be placed but
also places the expense and risk on the buyer.
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The court looks for the same present intent to contract on the part of the offeree to
determine whether the offer has been accepted.
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Any instrument that does not meet the formal requirements for negotiability will be
treated as a simple contract rather than a negotiable instrument.
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The person who files a voluntary petition must be insolvent.
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Any person authorized to sign a check may stop payment on it, even if he/she did not
sign the check in question.
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A tenant who remains in possession of the property after the expiration of a lease
cannot be made part of a new tenancy.
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The UCC requires application of the “mirror image” rule in cases where contract for
the sale of goods are made by exchanging forms.
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A corporate officer can be found criminally liable for the illegal behavior of a
subordinate when the officer:
A. knew or should have known of the illegal conduct and failed to take steps to prevent
it.
B. knew of the illegal behavior and personally benefited from it.
C. did not know of the illegal behavior, but personally benefited from it.
D. knew that the illegal activity concerned insider trading.
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Yael sent Jen an offer to sell his mountain bike for $150. After thinking about the offer
for a few days, Jen sent Yael a letter accepting his offer and asking if he intended to
leave the book basket attached to the bike. The next day, before Jen’s letter arrived, Yael
phoned Jen and told her that he had decided to sell his bike to Jake, who had offered
him $200. Which of the following statements hold TRUE of this case?
A. Jen used unauthorized means of acceptance.
B. Jen’s acceptance was good and a contract was created when Jens’ letter was mailed.
C. Yael could revoke the contract as the goods had not exchanged hands yet.
D. The contract was not valid as the UCC held acceptances to be valid only when they
were received and acknowledged in writing by the offeror.
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An example of intangible property would be ____.
A. an MP3 Player
B. a tree cut down
C. a patent
D. land
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The ________ gives the federal courts broad injunctive powers to remedy antitrust
violations.
A. Noerr Doctrine
B. Sherman Act
C. Parker Doctrine
D. Robinson-Patman Act
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Who is primarily liable on a check when it is issued?
A. The payee is primarily liable
B. The drawer is primarily liable
C. The drawee bank is primarily liable
D. No party is primarily liable
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Alex and his partners have started a corporation in North Dakota. They can get it
incorporated in Illinois if:
A. incorporation fees are lower than taxes.
B. shareholders can actively participate in the management.
C. fees and taxes are lower, and there is minimal shareholder interference.
D. promoters and shareholders are barred from interfering.
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A “bearer paper” is:
A. a check made payable to the order of cash.
B. a check that can be transferred only by indorsement.
C. a check that can be negotiated only by indorsement.
D. a check that is payable to the order of a specific person.
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Which of the following is TRUE of the laissez faire economic theories?
A. People in business were unable to limit or shift many of their economic risks by
placing clauses in their contracts.
B. The courts were unwilling to interfere with people’s private agreements or to do
anything that might interfere with the country’s growing industrialization.
C. These theories were never considered a part of the public policy in the 19th century.
D. People in business had to face a lot of restrictions while planning the kind of
economy that increasing industrialization required.
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Which of the following is an example of invasion of privacy?
A. A tenant continuing to stay in a house even after the lease period has expired.
B. The act of wrongfully selling or mortgaging the goods of another.
C. The act of putting an ad in the paper saying that a person does not pay his or her
bills.
D. A person providing false statements on a seller’s ownership of goods offered for sale.
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The public offer by a bidder to purchase a target company’s equity securities directly
from its shareholders at a specified price for a fixed period of time is called a(n) ____.
A. bond exchange offer
B. prospectus
C. investment contract
D. tender offer
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Acme Seeds, Inc. refuses to sell its seeds to farmers unless they also agree to buy
fertilizer from Acme, this is an example of a(n):
A. requirements contract.
B. tie-in contract.
C. exclusive dealing contract.
D. indirect price discrimination.
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A full warranty means:
A. it excludes and limits payments for consequential damages.
B. the warrantor will fix or replace any defective product free of charge.
C. it has to cover the whole product and not cover only part of the product.
D. it is limited in time (say, to one or two years).
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“Frustration of venture”:
A. is the same as “commercial frustration.”
B. is the same the same as “commercial impracticability.”
C. occurs when the return performance becomes worthless for the promisee.
D. occurs when the promisor expressly assumes the risk that the event occurred.
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If a seller discovers a buyer is insolvent, the seller:
A. must wait 10 days before taking action.
B. has the right to stop delivery of any goods that are being shipped to the buyer.
C. has the right to stop delivery of any goods that are being shipped to the buyer as long
as they have not already been entrusted to a carrier.
D. must wait seven days before taking any action.
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An agent will be relieved from liability for representations in excess of the agent’s
authority if:
A. the agency is partially disclosed.
B. the third party knows that the agent is acting in excess of his authority.
C. the entity has a legal existence.
D. the act was undertaken with a good intent.
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The “execution of a will”:
A. must strictly meet all the formalities required by state law, or it is void.
B. must partially meet general requirements of state law, or it is void.
C. must strictly meet all the formalities required by federal law, or it is void.
D. must partially meet the general requirements of federal law, or it is void.
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For a public figure to sue for defamation, he/she must prove:
A. actual malice.
B. misuse of privilege.
C. violation of a statute.
D. invasion of privacy.
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Rachel saw her sister Rebecca being hit by a car. She rushed to help her and later
accompanied her to the hospital. Unfortunately her sister died several hours later.
Rachel, who received psychiatric treatment as a result of the traumatic experience, sued
for emotional distress. Which of the following is TRUE for Rachel?
A. She is not entitled to recovery because she wasn’t in the “zone of danger” created by
the negligent act.
B. The courts will allow recovery because she made an attempt to stop the car which
had hit her sister.
C. The courts will not allow recovery because she suffered only emotional trauma with
no visible signs of physical injury.
D. She will be awarded recovery because she bore witness to the accident during which
her own sister was killed.
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Horizontal price fixing:
A. is also called resale price fixing.
B. can be legally justified if there was a direct agreement between competitors.
C. occurs when the manufacturer gets the retailer to agree to follow the suggested retail
price.
D. is an attempt by competitors to interfere with the market and control prices.
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An oil producer’s merger with an oil refiner is an example of a:
A. conglomerate merger.
B. push down merger.
C. horizontal merger.
D. vertical merger.
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Campus Bus Service entered into a contract with Smith Bus Company to purchase 10
buses. One week before Campus Bus was scheduled to receive the buses, a fire
destroyed Smith’s warehouse and the buses inside. As a result, Campus Bus had to
purchase its buses at a higher cost from another manufacturer. If Campus Bus sues
Smith Bus for damages for breach of contract under these circumstances, what defense,
if any, does Smith Bus have? Assume Campus Bus did not bear the risk of loss of the
goods under the contract.
A. Smith Bus should not be excused from performance because it should be ready with
contingency plans or options for all unforeseeable events.
B. Smith Bus should not be excused because it did not act in good faith.
C. Smith Bus should be excused from performance under the doctrine of commercial
impracticability because the fire was an unforeseen event that made it impossible for
Smith to perform its contractual obligations.
D. Smith Bus is guilty of anticipatory repudiation.
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Which of the following is TRUE of an agent’s duty to obey a principal’s instructions?
A. An agent may always substitute his/her personal judgment for that of the principal.
B. An agent has no power to exercise his/her best judgment to further the interests of
the principal, if no instruction is given.
C. An agent will be liable for any loss to the principal caused by failure to follow
instructions.
D. An agent may ignore the principal’s instructions if they seem unwise or not truly in
his/her best interests.
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In an option contract:
A. a separate contract for the limited purpose of holding the offer open is created.
B. the offeree is bound to accept the offer.
C. a joint contract is created for the limited purpose of keeping the offer open.
D. the offeree has purchased the right to accept within the stated period.
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Name the basic formalities required by most states in the execution of a will.
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Suppose you work for a refrigerator manufacturing company that has a factory in a
small rural Nebraska town. The refrigerator plant is the town’s primary source of
income. The company has placed you in charge of investigating the firm’s decision to
move the factory to Mexico. If the company moves its manufacturing to Mexico, it can
produce refrigerators at a much lower cost. Explain what a modern rights theorist would
consider under these circumstances.
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Explain with an example how promissory estoppel affects consideration?
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Kent Construction Company contracted to build four garages for Magnum, Inc., for
$100,000 according to specifications provided by Magnum. Kent substituted
two-by-fours for the more expensive two-by-sixes called for in the contract. An
inspection reveals that the garages are sturdy, but that they are worth only $85,000 due
to Kent’s failure to conform to Magnum’s specifications. To what is Kent entitled, if
anything, and why?
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