The U.S. Constitution reserves to the states or to the people:
a. powers also delegated to the federal government by the Constitution.
b. the powers the Constitution does not prohibit to the states.
c. police power.
d. employee safety matters.
An agent is not normally liable on a contract he makes with a third party on behalf of
a(n):
a. undisclosed principal.
b. disclosed principal.
c. unidentified principal.
d. All of these are correct.
The requirement that each party to a contract must intentionally exchange something of
value as an inducement to the other party to make a return exchange is known as:
a. mutual assent.
b. consideration.
c. legality of object.
d. contractual capacity.
A buyer’s cancellation of a contract based on the seller’s anticipatory repudiation is
effective:
a. only if the buyer expressly notifies the seller of the cancellation.
b. if the cancellation precedes the seller’s attempt to retract her repudiation.
c. only if bond has been obtained.
d. All of the above.
Who is primarily liable on a note?
a. The maker.
b. The indorsers.
c. The drawee bank.
d. The holder.
Opal, a promoter of Victory Corporation, has a fiduciary duty to:
a. any other promoters of Victory Corporation.
b. only Victory Corporation.
c. the initial shareholders of Victory Corporation.
d. Both (a) and (c).
The use of the qualifying word(s) __________ is/are understood to place purchasers on
notice that they may not rely on the credit of the person using this language.
a. “accepted”
b. “certified”
c. “without recourse”
d. “insufficient funds”
Which of the following is NOT correct regarding a limited liability partnership?
a. All of the states authorize them.
b. It is the same as a limited partnership.
c. A registered limited liability partnership is a general partnership that makes a
statutorily required filing.
d. All of the above.
Wes, who is an art collector, offered to buy a print from Le Monde Gallery. Le Monde
balked at the price, sending Wes a letter of rejection. That day it discovered that the
print was not as highly valued as originally thought. Le Monde immediately telephoned
Wes to accept his offer. Is there a contract?
a. Yes, since the acceptance was received before the rejection.
b. No, because the rejection was effective upon dispatch.
c. No, because the rejection terminated the offer.
d. Yes, because the acceptance is always effective upon dispatch.
Defenses of the insurer include:
a. misrepresentation.
b. judgment pro rata.
c. concealment.
d. Both (a) and (c) are correct.
Zeron Corporation is incorporated in the State of West Virginia. It now wants to open a
retail outlet in Kentucky. Zeron must obtain a certificate of authority allowing it to do
business in Kentucky.
Tim, who is a minor, enters into a contract with Violet, who is an adult. Which of the
following is correct?
a. Violet may not disaffirm the contract.
b. Violet may disaffirm the contract at any time.
c. Violet may disaffirm the contract when Tim becomes an adult.
d. Tim may ratify the contract at any time during his minority.
Arthur advances money to John so that John can purchase inventory for his business. In
return and for security on the loan, John makes Arthur his agent. If John:
a. becomes incapacitated, Arthur’s agency is terminated by operation of law.
b. dies, Arthur’s agency is terminated by operation of law.
c. Arthur’s agency is irrevocable.
d. None of these are correct.
The board of directors has the power to:
a. sell corporate assets in the usual and regular course of business.
b. issue notes or bonds.
c. fix the selling price of publicly traded shares of the corporation’s stock.
d. Both (a) and (b).
An ad in a newspaper or a circular describing goods and stating prices would generally
be considered:
a. a firm offer if made by a merchant.
b. an offer if made by a merchant, but not a firm offer.
c. an offer irrespective of who made the offer.
d. an invitation to buyers to make an offer to buy goods.
The federal courts have exclusive jurisdiction over:
a. federal criminal prosecutions.
b. trademark and copyright cases.
c. issues involving state constitutions.
d. Both (a) and (b).
A buyer in a contract for the sale of goods:
a. may not inspect the goods before payment or acceptance, unless the parties agree
otherwise.
b. must pay prior to inspection with a C.O.D. sale, which impairs the buyer’s remedies.
c. must bear the expenses of inspection, but may recover these costs from the seller if
the goods are rightfully rejected.
d. loses the right to reject nonconforming goods by not inspecting them immediately
upon delivery.
Samuel Tate enters into a contract with Bill Smith under the terms of which Smith is to
pay Tate $7,000 and Tate is to build a garage, repair a boat, and build a doghouse. If the
doghouse has not yet been built, which term describes the type of contract in existence?
a. Quasi contract.
b. Executed contract.
c. Illusory contract.
d. Executory contract.
a. What is an undisclosed principal?
b. What is an unidentified principal?
c. What liability does an agent have to a third party when the principal is either
undisclosed or unidentified?
d. Dale is asked to be an agent for Phil, but Phil does not wish third parties to know that
Dale represents him. In light of your answer to part (c), why would Dale want to be an
agent for Phil? Why would Phil wish that third parties not know his identity? Explain.
When delivery is to be made without moving the goods, unless otherwise agreed, title
passes:
a. on delivery of a document of title, when the contract calls for delivery of such
document.
b. when an insurable interest arises.
c. when a special property interest arises.
d. only when the buyer or her agent takes actual possession of the goods.
The RULPA and the 1985 RULPA are supplemented by the Uniform Partnership Act,
which applies to limited partnerships in any case for which the Limited Partnership Act
does not provide.
Under the Statutory Close Corporation Supplement, a closely held corporation may use
a shareholder agreement in place of bylaws.
If a wholesaler gets a retail outlet for its goods through merger, this is a horizontal
merger.
In the case of Denney v. Reppert the court allowed the employees of a bank to collect a
reward, because they supplied information that led to the arrest and conviction of a
bank robber.
In 1990, Congress enacted the Administrative Dispute Resolution Act to require
agencies to use alternative dispute resolution.