Receiving an instrument by negotiation
a. is the same as receiving the instrument by assignment.
b. makes the third party who takes possession of the instrument a holder.
c. converts the instrument into bearer paper.
d. prevents the instrument from being further transferred.
When two or more checks are presented to a bank for payment at the same time, and the
depositor’s account is insufficient to pay them all, the bank may
a. declare all the checks automatically void.
b. pay the checks in any order until the funds in the depositor’s account run out.
c. declare all the checks stale checks.
d. all of these.
A gift in a will of 100 shares of IBM stock would be an example of a
a. specific legacy.
b. general devise.
c. general legacy.
d. demonstrative legacy.
Samuels gave Albrite’s Lumber Company a ninety-day promissory note for $2,000 for
goods purchased. Albrite’s Lumber Company is legally known as the
a. drawer.
b. drawee.
c. maker.
d. payee.
The trial courts in the federal court system are called
a. U.S. district courts.
b. criminal courts.
c. tax courts.
d. bankruptcy courts.
Failure to pay a premium on time may cause the policy to
a. subrogate.
b. be assigned.
c. lapse.
d. be considered fraudulent.
Young offered to sell his boat to Alvarez for $2,000 without knowing that the boat had
just been destroyed. This agreement is
a. valid.
b. void.
c. unenforceable.
d. voidable.
The power of the state to condemn an owner’s property is called the power of
a. prescription.
b. eminent domain.
c. licensing.
d. zoning.
A contract of guaranty would not be terminated if it were altered without the consent of
the guarantor so as to
a. add an additional guarantor.
b. lengthen the term.
c. change the amount involved.
d. change the name of the debtor.
The purpose of the Fair Packaging and Labeling Act is to provide information about
a. price.
b. quantity.
c. the manufacturer.
d. all of these.
Of the following, the one that is not a defense to a criminal action is
a. involuntary intoxication.
b. duress.
c. consent.
d. self-defense.
The main purpose of government regulation of the securities industry is to
a. evaluate securities.
b. provide full disclosure.
c. prevent fraud.
d. provide full disclosure and to prevent fraud.
Exaggerating the quality of merchandise is called
a. fluffing.
b. puffing.
c. luffing.
d. ruffing.
Whether an item is a necessary actually depends upon the minor’s
a. concept of what is or is not a necessary.
b. station in life.
c. opinion.
d. experience in dealing with adults.
A taxpayer’s right to contest a decision involving income taxes is protected by
a. the U.S. Constitution.
b. state law.
c. the Internal Revenue Service.
d. the Tax Court.
To be valid, a lease must be
a. typewritten.
b. in a prescribed form.
c. written in English.
d. in writing if for more than one year.
Able mailed Conover an offer that stated in part, “You must accept by sending me a
certified letter which must be received by me on or before February 1st.” Conover may
accept by
a. sending a telegram of acceptance to reach Able by February 1st.
b. making a phone call to Able on February 1st.
c. mailing his acceptance on February 1st.
d. sending Able a certified letter mailed in time to reach Able by February 1st.
In regard to a promissory note, the person obligated to pay is the
a. payor.
b. promissor.
c. bank.
d. maker.
Most state court systems include all of the following except
a. lower-level trial courts.
b. an appellate court of final resort.
c. intermediate-level appeals courts.
d. bankruptcy courts.
Product liability suits may be based on
a. breach of warranty.
b. negligence.
c. strict liability.
d. all of these.
In many states, the responsibility for making repairs is determined by
a. the terms of the lease.
b. state law.
c. federal law.
d. the terms of the lease and state law.
Of the following actions, the best example of larceny is
a. breaking into a store to steal money.
b. blackmailing someone.
c. taking another’s property by force.
d. stealing an automobile.
State statutes generally allow punitive damages to be awarded for a breach of contract
a. when the contract violates the statute of limitations.
b. when the breaching party fraudulently caused the breach.
c. when the contract is illegal.
d. all of these.
An error about certain material facts made by one party to a contract is called a(n)
____________________.
An agency is automatically terminated upon the death of the agent.
Under certain circumstances, a joint venture may be treated as a corporation.
In most states the doctrine of comparative negligence has been replaced by the doctrine
of contributory negligence.
In a civil case a person bringing a lawsuit must prove his case (in order to win) by a
preponderance of evidence. What does preponderance of evidence mean?
Can a debtor be held liable for any of her debts that have been outlawed by the statute
of limitations?
Any significant alteration of a negotiable instrument discharges the liability of the party
whose liability is changed by the alteration.
Any person who is seriously in debt may be forced into involuntary bankruptcy.