Hannah, as a joke, offers to sell her violin to Mike. Her statement would have legal
effect if:
a. the intended jest is so successful that Mike as a reasonable person under the
circumstances believes the joke is an offer and he accepts.
b. Hannah’s intent, determined subjectively, is to enter a contract.
c. Hannah’s intent, determined objectively, is not to enter a contract.
d. Mike did not, but should have realized that Hannah was not serious.
Jim promises to marry Cynda if she will buy him a new Ferrari for his birthday. This
promise must be in writing to be enforceable.
a. True
b. False
The person who files or commences a civil lawsuit is known as the:
a. plaintiff.
b. prosecuting attorney.
c. defendant.
d. attorney general.
Apparent authority is actual authority.
a. True
b. False
Congress enacted legislation that almost completely eliminated the rightto appeal to the
U.S. Supreme Court.
a. True
b. False
Sexual harassment:
a. includes unwelcome sexual advances or requests for sexual favors when submission
is implicitly a condition of employment.
b. is less serious than and may not constitute illegal sexual discrimination in violation of
Title VII.
c. may not be charged against an employer who has no knowledge of or reason to know
of a supervisor’s
harassing action against a subordinate employee.
d. is offensive, but not illegal.
Lois takes her paycheck to Third National Bank for deposit at 6 p.m. on Wednesday.
Third National Bank has until when to forward the check?
a. Midnight Thursday
b. Midnight Friday
c. Close of business Friday
d. Close of business Thursday
Contract remedies provided as exclusive will not preclude Code remedies if
circumstances cause the remedy to fail in its essential purpose.
a. True
b. False
Title VII of the Civil Rights of 1964:
a. is enforced by the FTC.
b. applies to employers engaged in an industry affecting commerce and having fifteen
or more employees.
c. has been displaced by the Civil Rights Act of
d. forbids discrimination in the workplace involving hiring, promotion, and retention,
but does not cover transfer and retirement discrimination.
If a person who has been declared incompetent by the courts enters into an agreement,
that agreement is void, because it does not meet all the requirements of a binding
contract.
a. True
b. False
An incidental beneficiary has no right to enforce a contract.
a. True
b. False
If there is no indorsee designated on an indorsement bearing only the indorser’s
signature, it is a(n):
a. qualified indorsement.
b. conditional indorsement.
c. blank indorsement.
d. allonge.
A bank must give notice of dishonor within one business day and a nonbank within
three business days of the day on which it receives notice of dishonor.
a. True
b. False
A leading proponent of the utilitarian approach to ethics was the eighteenth-century
philosopher Immanuel Kant.
a. True
b. False
The cause of action of intentional infliction of emotional distress will protect a person
from abusive language and rudeness.
a. True
b. False
The is responsible for enforcing federal anti-discrimination laws.
a. OSHA
b. Social Security Administration
c. EEOC
d. NLRB
Nell gives Al $50 in return for Al’s promise to defame Sara. Nell hopes to ruin Sara’s
chances at a promotion. Nell finds out that Al did not hold up his end of the agreement.
Which of the following statements is true?
a. Nell can get the money back from Al through litigation.
b. Nell can get the money back and force Al to do as he promised.
c. Legally, Nell can neither get the money back nor force Al to do as he promised.
d. Nell can force Al to act through an appeal to the courts, but Al gets to keep the $50.
Conglomerate mergers have been challenged only where:
a. one of the merging firms would be highly likely to enter the market of the other firm.
b. the merged company would be disproportionately large compared with the largest
competitors in its industry.
c. Both of these.
d. None of these.
The doctrine of unconscionability deals only with whether the actual terms of the
contract are grossly unfair or oppressive.
a. True
b. False
One of the principal objectives of tort law is to prevent future harms and losses.
a. True
b. False
Leonard offers to sell his diamond ring to Emily. If Diane overhears the offer and says,
“I accept the offer”:
a. Diane cannot accept the offer, because it wasn’t made to her.
b. this is a valid acceptance.
c. the offer has not been communicated to the offeree.
d. this is an invitation seeking offers and not an offer.
The party bringing a civil lawsuit must prove the case by a preponderance of the
evidence.
a. True
b. False
George offered to paint Catherine’s barn for $4,000. Catherine said she would accept
the offer if George would paint the woodshed, too. At this point, they have made a valid
and enforceable contract.
a. True
b. False
Kay borrowed $200,000 for her business. First Bank loaned the money but required a
surety and collateral. Kay put up her boat, valued at $110,000, and Anson agreed to
guarantee the entire loan. After Kay had paid $50,000 of the loan, she asked First Bank
to release the collateral since she wanted to sell it to her brother. The bank looked at her
perfect payment record and agreed. Two weeks later, she sold the business, took the
boat to Brazil, and never was heard from again. Can First Bank collect from Anson?
a. No, since they released the collateral
b. Yes, but only $40,000
c. Yes, but only $90,000
d. Yes, and they can get the whole remaining obligation
The Bill of Rights was approved by the first Congress to guarantee that the federal
government would not abuse its powers.
a. True
b. False
Under the 1934 Act:
a. criminal sanctions may be imposed on any person who willfully violates any
provision of the Act (except the antibribery provision) or the SEC rules promulgated
pursuant to the Act.
b. criminal sanctions may not be imposed.
c. conviction of an individual may result in imprisonment for up to 25 years.
d. a person who proves he had no knowledge of the rule is still subject to imprisonment.
The bulk sales portion of the Code applies only to transfers in the ordinary course of
business.
a. True
b. False
Which of the following is a requirement of a valid gift?
a. An adult donor
b. Payment of money
c. A writing
d. Delivery
Eric bought a new snowmobile from the North Pole Manufacturing Company. After
buying the machine, Eric then modified the spark plugs and a few other things in order
to soup it up. In February, just after a snowfall, Eric was driving the snowmobile when
it tipped over, trapping him beneath it. His leg was severely burned when it lodged
against one of the spark plugs. Eric now wants to sue North Pole for strict liability in
tort. Eric:
a. will likely win the suit, because of the faulty design of the snowmobile.
b. will likely lose the suit, because the machine has been altered since its manufacture.
c. has assumed the risk of using the snowmobile.
d. cannot sue the manufacturer, because horizontal privity is lacking.
The fact that a drawer has filed a stop payment order automatically relieves the drawer
of liability on the underlying obligation.
a. True
b. False
Respondeatsuperior:
a. imposes vicarious liability on the agent.
b. makes a principal liable for the acts of independent contractors.
c. imposes vicarious liability on the principal for employees’ acts committed within the
scope of employment.
d. makes the agent responsible for his own acts
Generally, consent is not a defense in an intentional tort action.
a. True
b. False
A survival clause refers to:
a. a remainder in a life estate.
b. a possibility of reverter.
c. a provision in a lease contract providing that the tenant’s eviction for non-payment of
rent will not relieve her of liability for damages for rent not paid.
d. All of these.
An accountant who willfully violates Section 11 of the 1933 Securities Act will be
subject to criminal liability.
a. True
b. False