In the absence of a liquidated damages clause and in the absence of proof of greater
damages, the seller€s damages are computed as
a. 25% of the purchase price or $500, whichever is less.
b. 25% of the purchase price or $500, whichever is greater.
c. 20% of the purchase price or $500, whichever is greater.
d. 20% of the purchase price or $500, whichever is less.
If an offer requires that acceptance be communicated by a specific date and the
acceptance is properly dispatched by the offeree on the final date,
a. no contract is formed, since the offeror will undoubtedly receive the dispatched
acceptance after the deadline for acceptance.
b. a contract is formed, but the contract is voidable at the election of the offeror.
c. the acceptance is timely and a contract is formed, even though the offeror actually
receives the acceptance well after the specified date has passed.
d. the acceptance is timely and a contract is formed, but only if the offeror actually
receives the acceptance by the deadline specified for acceptance.
The Economic-Espionage Act (EEA):
a. makes it a crime to use a fraudulently obtained device to obtain money through a
electronic fund transfer system.
b. makes it a crime to send unsolicited bulk emails.
c. makes it a crime to transfer proprietary files, documents and information from a
computer to an unauthorized person.
d. all of the above.
A corporation must have:
a. a name.
b. more than one shareholder.
c. a corporate seal.
d. all of the above.
Clark is the senior payroll clerk for Gonzalez Corporation. When preparing the weekly
payroll, Clark added the name of Simmons, a fictitious employee, to the payroll list.
Lewis, the treasurer of the corporation, signed the payroll checks and delivered them to
Clark. Clark distributed checks to the correct employees and kept the one made payable
to the order of Simmons. Clark indorsed the name of Simmons to the check, cashed it at
Diamond Check Cashing. In this situation:
a. an indorsement was not necessary to negotiate the instrument.
b. the Gonzalez Corporation can seek recovery against Diamond Check Cashing.
c. the forged signature is given the same effect as though it had been authorized by the
named payee.
d. Clark is not subject to civil or criminal liability.
Torts arise from a violation of a ____ duty.
a. public
b. private
c. contractual
d. criminal
Consequential damages may be recovered if:
a. the damages were not a foreseeable consequence of the breach.
b. the damages reasonably flow from the breach as a result of the injured party€s
particular circumstances.
c. the breach did not cause the damages.
d. the loss exceeds $500.
When a defendant is convicted of a crime, the court may also declare that the
defendant€s rights in any property used or gained from the crime be confiscated. This
is known as __________.
a. forfeiture
b. reversion
c. subversion
d. divestiture
A direct sale to customers in a foreign country is a(n):
a. foreign distributorship.
b. agency arrangement.
c. licensed sale.
d. export sale.
A person who would suffer a direct pecuniary loss if a particular piece of property were
destroyed has a(n):
a. contractual risk.
b. hazard.
c. underwriting.
d. insurable interest.
Valid restrictive covenants will bind future owners of the land if:
a. they are published in the Federal Register.
b. there is a notation in the deed referencing the restrictive covenants.
c. they are published in a newspaper of general circulation.
d. they are filed with the attorney general of the state in which the land is located.
A negotiable promissory note was issued by Gold. It was properly issued in all ways.
Nevertheless, the payee managed to alter the note and raise the amount from $500 to
$5,000. A holder in due course presented the note for payment to Gold who discovered
the alteration. In this case:
a. Gold is liable for $500 only.
b. Gold is liable for the full $5,000.
c. Gold has no liability on the altered note.
d. Gold is liable for $2,500.
Voluntary improvements in the fairness and ethics of business behavior are:
a. less effective than those brought about by government regulation.
b. less costly and intrusive than those brought about by government regulation.
c. virtually nonexistent in corporate America.
d. more common in third-world countries than in the United States.
When a person is authorized by the principal to transact all affairs in connection with a
particular type of business or trade or to transact all business at a certain place, that
person is a __________ agent.
a. general
b. perfected
c. special
d. universal
To which of the following parties does the landowner owe a duty to take reasonable
steps to discover any danger and a corresponding duty to warn the party of or correct
the discovered danger?
a. trespasser
b. licensee
c. invitee
d. all of the above
A corporation that does business in the state in which it was created is called a(n):
a. domestic corporation.
b. foreign corporation.
c. alien corporation.
d. home corporation.
Unfair competition is controlled by:
a. statutes.
b. administrative agencies.
c. administrative regulations.
d. all of the above.
When the drawee of a draft has indicated by writing or record a willingness to pay the
amount specified in the draft the drawee is called a(n):
a. acceptor.
b. accommodation party.
c. payee.
d. secondary obligator.
When necessary medical care is provided to a minor, a parent is liable at common law
for the medical expenses provided the minor child.
The Securities and Exchange Commission (SEC) is not limited to litigation when a
securities law enforcement investigation runs into secrecy or blocking laws.
An administrative agency is barred from examining the records of a business enterprise
by the constitutional guarantee against unreasonable searches and seizures.
The right to cut firewood from another’s property would constitute a profit.
A drawee on a draft has no responsibility under the draft until it has accepted that
instrument.
The use of someone€s car without that person€s permission is a trespass to personal
property.
Any warranty that does not provide the complete protection of a full warranty is called
a warranty in breach.
An ambiguity in an insurance policy is generally interpreted in favor of the insured.
A tenancy for years terminates at the expiration of the specified term, regardless of
whether one party gives the other any notice of termination.
The CISG governs all contracts between parties in the countries that have ratified it.