If the product or service offered by a franchisor has not been tested, it should appear on
the Federal Trade Commission (FTC) franchise notice.
Article 2 of the UCC applies to sales contracts for the sale of intangible goods.
A manufacturer is liable for express warranties made by wholesalers and retailers.
In a three-party secured transaction, the party that purchases the goods or services is
known as the buyer-secured creditor.
Separate property owned by one individual can be converted to marital property after
marriage by placing that individual’s spouse’s name on title to the property.
If an innocent misrepresentation has been made, the aggrieved party may sue for
damages.
Considerations can only be monetary or economic in nature.
Under the foreign substance test, if a person were injured by a chicken bone while
eating a chicken salad sandwich, then the implied warranty would be breached.
Only personal property can be used in a bailment.
A buy-sell agreement made using proceeds from a key-life insurance is not considered
valid.
A tipper cannot be held liable for the profits made by the tippee.
Martha is walking along a street with her son when he is hit by a passing car just as he
steps off the pavement. He dies in his mother’s arms, leaving her traumatized. The court
hearing the case rules that Martha’s son was “not responsible for the accident.” Martha
can sue the person who killed her son to recover damages for ________.
A) tort of outrage
B) breach of duty of care
C) negligent infliction of emotional distress
D) transfer of intent
Which of the following courts are considered as the federal court system’s intermediate
appellate courts?
A) the U.S. Courts of Appeals for Veterans Claims
B) the U.S. courts of appeals
C) the U.S. district courts
D) the U.S. courts of federal claims
Under the Uniform Commercial Code, if the time, place, and manner of delivery of
goods are not mentioned in a contract, ________.
A) the place of delivery is the buyer’s place of business
B) the contract is void for lack of definiteness
C) the place of delivery is the seller’s place of business
D) the seller is obligated to pay for shipping to the buyer’s place of business
The party who grants a license is known as the ________.
A) licensee
B) licensor
C) grantee
D) grantor
Which of the following is true of specific performance?
A) Specific performance of personal service contracts is not granted.
B) Specific performance is not awarded if the subject matter of the contract is unique.
C) Specific performance exempts works of art, antiques, and heirlooms as subject
matter.
D) Specific performance is not available to enforce land contracts.
Michael Harrison opens an online store where people from all over the world can
purchase and download iPhone apps. Which of the following should Michael consult to
know the rules of trading through his online store?
A) the common law of contracts
B) the objective law of contracts
C) the Uniform Computer Information Transactions Act
D) the Uniform Commercial Code
Any oral or written words outside the four corners of a written contract are termed as
________.
A) parol evidence
B) exclusive integration
C) leading object exception
D) main purpose exception
Which of the following is true about fixtures?
A) They are categorized as real property.
B) They are easily portable.
C) They are typically removed prior to a sale.
D) They can only have one owner at a time.
A(n) ________ is a document filed by the original plaintiff to answer the defendant’s
cross-complaint.
A) rejoinder
B) answer
C) reply
D) plea
Which of the following is true of an undisclosed agency?
A) The third party has no knowledge of the agency.
B) The third party knows the agent, not the principal.
C) All transactions with the third party are made by the principal without involving the
agent.
D) Transactions under such an agency are considered unlawful.
Mark Walton was involved in a car accident in which the airbag of his car failed to
deploy. He sued the car manufacturer for installing faulty airbags. But in the course of
the case being heard in court, the car company and Mark decided to settle the lawsuit
out of court. What important function of the law was served in this case?
A) promoting social justice
B) maximizing individual freedom
C) providing a basis for compromise
D) maintaining the status quo
A(n) ________ is a person who organizes and starts a corporation, negotiates and enters
into contracts in advance of its formation, finds the initial investors to finance the
corporation, and so forth.
A) incorporator
B) promoter
C) articles drafter
D) negotiator
________ is a rule that says an employer is liable for the tortious conduct of its
employees or agents while they are acting within the scope of the employer’s authority.
A) Ad infinitum
B) Respondeat superior
C) Acienter
D) Voir dire
What led to the creation of the Chancery Courts?
A) the insistence for a court system that emphasized legal procedure rather than the
merits of a case
B) the law courts’ inability to hear all the cases presented to them
C) the increase in overseas trade and proliferation of piracy
D) the unfair results and limited remedies provided by the law courts
________ is a title to real property that is free from any encumbrances or other defects
that are not disclosed but would affect the value of the property.
A) Remainder title
B) Marketable title
C) Reversion title
D) Nonconforming title
A(n) ________ is a debt security with a maturity of five years or less.
A) bond
B) debenture
C) indenture
D) note
A restraint of trade in which two or more competitors at one level of distribution agree
not to deal with others at another level of distribution is known as ________.
A) group boycott
B) resale price maintenance
C) price fixing
D) market sharing
The World Bank is ________.
A) an autonomous agency under the aegis of the European Union
B) an agency that monitors the financial collaborations taking place in the eurozone
C) primarily responsible for promoting sound monetary, fiscal, and macroeconomic
policies worldwide
D) primarily responsible for providing money to developing countries to fund projects
for humanitarian purposes
Which of the following is true of the liabilities of LLCs (limited liability companies)?
A) Members of LLCs are liable to the extent of their capital contribution.
B) Managers of LLCs are personally liable for the debts, obligations, and liabilities of
the LLCs.
C) LLCs are not liable for any loss or injury caused by their employees.
D) LLCs are not liable for losses caused due to negligence of their managers during the
ordinary course of business.
Poweroxi Inc. produces rocket propellant fuel that is used in space shuttles. NASA is an
agency that requires rocket propellant fuel to send its rockets to space. NASA enters
into a contract with Poweroxi Inc. to purchase all of the propellant fuel it will need that
year from Poweroxi. Which of the following conditions would constitute a breach in
contract?
A) if Poweroxi sold to another purchaser
B) if Poweroxi sold to another purchaser at a lower price
C) if NASA purchased fuel from another seller
D) if NASA stopped purchasing from Poweroxi due to lack of need
What is a distributional interest? Explain the terms of its transfer.
Explain the two principles used to derive the universal rules of Kantian ethics?
How does an authorized representative’s signature work for negotiable instruments?
Compare valid, void, voidable, and unenforceable contracts.
Distinguish between two-party and three-party secured transactions, and provide some
examples.
Describe the measures taken by the U.S. Department of Labor against oppressive child
labor.
Give an account of the directors’ and corporate officers’ duty of care toward the
corporation.
Give an account of the different types of property that can be owned.
Give an account of the state environmental protection laws.