Eloise took her prized poodle, Tiny, to Pam’s Pet Store & Grooming to prepare Tiny for
an upcoming dog show. Unknowingly, one of Pam’s new employees sold the dog to Jas.
Under these circumstances, which of the following statements is correct?
A. Eloise cannot recover Tiny from Jas because under the UCC, Pam’s could give good
title to a buyer in the ordinary course of business.
B. Eloise can recover Tiny from Jas because Pam’s did not have ownership to Tiny
when it sold Tiny to Jas.
C. Eloise can recover the value of Tiny from Jas or from Pam’s because neither Pam’s
nor Jas had title to Tiny.
D. Eloise has no remedy against either Pam’s or Jas.
Answer:
Which of the following may require specific performance?
A. Sale of a real estate (a house or tract of land).
B. Sale of a very expensive personal property (a car or big-screen TV).
C. Personal service.
D. Anything that may cause irreparable injury.
Answer:
Penny had negligently left marbles on the steps of her house. When Bijou came to visit,
she broke her leg by slipping on those marbles and severely damaged her spine. While
in the hospital recovering from her fall, her body being weak from all the antibiotics,
she readily contracted a viral infection. Under these circumstances, Penny is liable:
A. only for Bijou’s viral infection.
B. only for the damage to Bijou resulting from her fall.
C. for injuries sustained by her and also for the viral infection.
D. for neither problem because Bijou should have been careful.
Answer:
In 1986, ____ of the Bankruptcy Code was added to target the financial problems of
the family farm.
A. Chapter 7
B. Chapter 11
C. Chapter 13
D. Chapter 12
Answer:
_____ implies that the creditor has no right to a deficiency and the debtor has no right
to any surplus.
A. Foreclosure
B. Mortgage
C. Strict foreclosure
D. Possessory lien
Answer:
_____ occurs when a tenant transfers to another person some, but not all, of his
remaining right to possess the property.
A. Subleasing
B. Assignment
C. Periodic tenancy
D. Exclusive possession
Answer:
Which of the following statements is TRUE for a tenancy at sufferance?
A. If the landlord opts for a new tenancy, it again has to be a tenancy in sufferance.
B. The landlord cannot bring any action against the tenant to eject him from the
property.
C. It occurs when a tenant pays rent on a yearly basis.
D. It occurs when a tenant remains in possession of the property after the expiration of a
lease.
Answer:
A teller’s check:
A. is a draft drawn by a bank on any other financial institutions other than a bank.
B. is a check drawn by a bank on an individual’s funds.
C. is a draft on which the drawer or drawee are the same bank.
D. is a draft drawn by a bank on another bank or payable at or through a bank.
Answer:
Under the right of subrogation:
A. the insurer is obliged to pay only the face amount of the policy if the insured dies
within a specified period of time; which is the term of the policy.
B. the insurer obtains all of the insured’s rights to pursue legal remedies against anyone
who may have negligently or intentionally damaged the insured property.
C. the insurer obtains all of the insured’s rights to pursue legal remedies only against
those persons who have intentionally damaged the insured property.
D. the insurer is obliged to pay the face value of the policy on the death of the insured
and the specified premium for the duration of his/her life.
Answer:
Once a party has waived rights to a portion of a contract that has not yet been
performed, that party:
A. may not retract the waiver later.
B. may retract the waiver unconditionally.
C. may retract the waiver by giving reasonable notice.
D. may retract the waiver within 24 hours.
Answer:
Who keeps the minutes of meetings of the shareholders and directors, and other general
corporate records such as stockholder records?
A. Corporate secretary
B. Treasurer
C. Vice president
D. Chairman
Answer:
When an agent buys for the principal from himself, even if he charges a fair market
price, the agent is violating which of the following common law duties?
A. Duty to communicate information
B. Duty to account for funds and property
C. Duty of loyalty
D. Duty to obey instructions
Answer:
When one or both parties to an illegal bargain are ignorant of the facts that made the
bargain illegal, courts will:
A. never allow either party to recover damages for breach of the agreement.
B. allow recovery for performance rendered before the parties learned of the illegality.
C. declare the bargain unconscionable.
D. regard the contract a serious threat to public welfare and declare it void.
Answer:
Which of the following statements about shrinkwrap contracts is TRUE?
A. The label on the shrinkwrap states that by removing the shrinkwrap, the buyer
accepts the terms of the software seller’s licensing agreement.
B. Shrinkwrap contracts are enforceable even when the terms violate contract rules such
as unconscionability.
C. The practice of using shrinkwraps never raises ethical problems like those involved
in the use of small print, complex, or “hidden” language.
D. Critics point out that all the consumers understand the contract before accepting the
terms and conditions.
Answer:
The most popular type of state statutes limiting directors’ liabilities for breach of the
duty of care are:
A. charter option statutes.
B. self-executing statutes.
C. cap on monetary damages statutes.
D. SEC oversight statutes.
Answer:
Which of the following is an element of a joint venture?
A. An express or implied agreement to carry on a continuing business.
B. A measure of proprietorship of joint control of the enterprise.
C. A manifestation of intent by one of the parties to be associated as joint venturers.
D. A joint interest as reflected in the contribution of skill by at least one party to the
joint venture.
Answer:
The means used by an offeror to communicate the offer:
A. is the impliedly authorized means for accepting regardless of circumstances.
B. is the impliedly authorized means for accepting unless the circumstances do not
indicate otherwise.
C. is the only authorized means of communication for accepting.
D. always follows the offeror’s particular trade usage in communication, as it impliedly
authorizes a given means of acceptance.
Answer:
Which of the following statements supports the explanation of libel?
A. Broadcast defamation, which involves both oral and visual impressions, is generally
considered to be libel.
B. Damages are presumed in libel, though the statement is not defamatory on its face.
C. Oral defamation, causing injury to a person’s reputation and causing that person
considerable anguish and harm is considered to be libel.
D. Private statements between spouses may be defamatory and will be considered to be
libel.
Answer:
Monroe Hardware contracted to purchase 20 alarm clocks from Clocks, Inc., a clock
manufacturer. One week before delivery, Monroe Hardware notified Clocks, Inc. that it
was canceling its contract because, it (Monroe Hardware) was overstocked with clocks.
Under these circumstances, what remedies are available to Clocks, Inc.?
A. Clocks, Inc. must attempt to resell the clocks to another buyer before it can recover
damages from Monroe.
B. Clocks, Inc. must attempt delivery of the goods before it can sue Monroe for
damages.
C. Clocks, Inc. may recover the difference between the contract price of the clocks and
the current market price at which the clocks are selling.
D. Clocks Inc. can recover purchase price even if resale is possible.
Answer:
An easement granted through an express agreement:
A. is not covered by the statute of frauds.
B. is required to be in writing to be enforceable.
C. is enforced no differently than an implied easement.
D. is not executed with the same formality as a grant of a fee simple interest in real
property.
Answer: