Which of the following terms would indicate a destination contract?
a. F.O.B. city of buyer.
b. F.O.B. city of seller.
c. C.I.F.
d. F.A.S. seller’s port.
__________ is/are any property other than an interest in real property.
a. Goods
b. Personal property
c. Tangible property
d. None of the above.
When can an accountant release audit working papers?
a. When a client consents.
b. When a court orders disclosure.
c. At any time at the discretion of the accountant.
d. Both (a) and (b).
The Sarbanes-Oxley Act:
a. allows the SEC to add criminal penalties to a disgorgement fund for the benefit of
victims of violations of the 1933 and 1934 securities acts.
b. requires an outside CPA and the corporate treasurer to certify the financial and other
information contained in the issuer’s annual and quarterly reports.
c. requires that issuers of securities disclose in plain English to the public on a rapid and
current basis such additional information concerning material changes in the financial
condition or operations of the issuer as the SEC determines is necessary or useful.
d. All of the above.
Harvey’s Car Rental rents Darlene an intermediate-size car at $149 per week for her
business trip. What is the relationship between Harvey’s and Darlene?
a. A bailment for mutual benefit.
b. A bailment for the sole benefit of the bailee.
c. A bailment for the sole benefit of the bailor.
d. The temporary transfer of title to Darlene.
Claire opened Claire’s Beauty Parlor in her home. She solicited funds to begin the
business from Jack, who believed that the business was incorporated. Claire had, in
fact, never filed the papers. One day, Claire fell asleep while giving a customer a
permanent and the solution caused her customer severe burns. The customer sued the
Beauty Parlor for $500,000, an amount enormously in excess of the business assets.
Under the Revised Model Act, what would be the result?
a. Claire and Jack would not be personally liable.
b. Claire would not be personally liable, but Jack would.
c. Jack would not be personally liable, but Claire would.
d. Both would be personally liable since there was no corporation formed.
Federal trademark protection:
a. lasts for ten years after registration.
b. can be renewed an unlimited number of times.
c. can be abandoned by non-use.
d. All of the above.
Perry is building his house and orders a hot water heater from Jones Co. to be installed
by them. The hot water heater they sent has a 45-gallon capacity, but Perry had ordered
a 60-gallon capacity. Jones cannot provide a 60-gallon heater for two months, so Perry
cancels the contract and gets a heater from another company. Jones Co. says it must be
allowed to install the heater. What result?
a. Jones wins; Perry can only cancel the portion of the contract regarding the goods.
b. Jones wins; Perry can only cancel if installation is also delayed two months.
c. Perry wins since the contract breach concerns the whole contract.
d. Perry can cancel the whole contract, but he is then limited in his recovery of
damages.
Bill orders a custom-made suit from Rooks to be delivered by Friday at 5 p.m. When
the suit is delivered to his office on Friday afternoon, he is in conference with a client.
He accepts delivery and hangs the suit in his closet. When Bill tries on the suit Saturday
evening, he discovers that the pants are cuffed. He had ordered cuffless trousers, so he
calls Rooks on Monday and informs them that he is returning the suit. What can he do?
a. He cannot revoke acceptance since the cuffs are not difficult to discover.
b. He can revoke acceptance if the cuffs substantially impair the value of the goods to
him and Rooks will not remove the cuffs.
c. He can reject the goods since he had not yet accepted them prior to inspection.
d. He cannot reject the goods because the cuffs are curable.
The UCC does not cover:
a. negotiable instruments.
b. investment securities.
c. sales of goods.
d. gifts.
With tying arrangements, the courts may establish a seller’s economic power by
showing that:
a. the seller occupied a dominant position in the tying market.
b. the seller’s product enjoys an advantage not shared by its competitors in the tying
market.
c. a substantial number of customers have accepted the tying arrangement and the only
explanation for their willingness to comply is the seller’s economic power in the tying
market.
d. All of the above.
In order to sue for copyright infringement, the holder:
a. must register with the copyright office.
b. must register with the copyright office unless the work is a Berne Convention Work
whose country of origin is not the U.S.
c. must have been registered with the copyright office before the infringement.
d. need not register under any circumstances.
Wanda has an idea for a novel, but she won’t have time to write it until next year. She
may protect it by means of:
a. a patent.
b. a copyright.
c. registration of the idea.
d. An idea that has not yet been developed into a tangible form cannot be protected.
In which of the following situations would a court be likely to find an affirmative duty
to act?
a. Where a pedestrian witnesses an auto accident in which one of the drivers is injured.
b. Where an airline attendant sees one passenger threaten another passenger.
c. Where the driver of a car sees a two-year-old toddler wandering in the middle of a
busy street.
d. All of these are correct.
Greg has been in the business of selling encyclopedias for twenty years. Margaret
agreed to buy a set if Greg would also bring her a bookcase for them. Greg bought one
and sold it to Margaret along with the books. While shelving the books, she ran her
hand over the back edge of the shelves and cut herself severely. The wood was not
finished on that side and nails were protruding through the shelf. Can Margaret sue
Greg under strict liability?
a. Yes, because the bookcase was in an unreasonably dangerous condition.
b. Yes, because the bookcase was defective.
c. No, because she was not a true consumer under Sec. 402A.
d. No, because Greg is not a seller under Sec. 402A.
Explain three limitations on monetary damages.
Title to corporate property belongs to the shareholders.
If a merchant signs a written offer to buy or sell goods, this will be irrevocable only if
accompanied by consideration.
Where the seller fails to make delivery, the buyer can cancel the contract, but he must
give the seller notice of his cancellation.
Every indorsement is either blank or special.
Title to goods passes according to rules under the Code if the parties have no explicit
agreement as to transfer of title.