Only the parties to a sales contract could sue each other under the traditional concept of:
a. exclusivity of contract.
b. privity of contract.
c. privacy of contract.
d. priority of contract.
A limited liability partnership:
a. is taxed like a corporation.
b. provides limited liability for all partners.
c. shields innocent partners from personal liability beyond their investment.
d. All of the above.
An agreement to restrain trade may be void on the grounds that it is:
a. fraudulent.
b. contrary to public policy.
c. illegal lobbying.
d. unfair to merchants.
When a negotiable instrument is negotiated by delivery without indorsement, the
warranty liability of the transferor runs:
a. only to the immediate transferee.
b. not to the immediate transferee, but to all subsequent transferees.
c. to both the immediate transferee and all subsequent transferees.
d. neither to the immediate transferee, nor to any subsequent transferees.
Your private life is protected from intrusions by other people by:
a. the Fourth Amendment of the United States Constitution.
b. the Equal Protection Clause.
c. court decisions of the United States Supreme Court.
d. local ordinance.
An agent has implied __________ authority to do any act that usually accompanies the
transaction for which the agent is authorized to act.
a. express
b. apparent
c. customary
d. incidental
A landlord who continuously accepts late rental payments without collecting the late fee
provided in the lease:
a. waives the late fee.
b. will collect the late fee at a later date.
c. is ignorant of the late fee.
d. allows the tenant to repudiate the lease.
When particular goods have been selected by either the buyer or the seller, or both, as
being the goods called for by the sales contract, the goods are said to be
a. identified.
b. actualized.
c. realized.
d. materialized.
A landowner’s promise to pay a contractor a bonus to complete construction of a
building according to the terms of a pre-existing contract between the landowner and
the contractor is:
a. binding if the promise is in writing.
b. binding, since the promise is made by a non-merchant.
c. binding, since the promise is made to a merchant.
d. ordinarily not binding on the promisor.
An extended time payment plan:
a. does not provide for a discharge of the debtor.
b. provides for a discharge of the debtor.
c. does not require creditors holding the same type or class of claim to be treated the
same way.
d. will not allow the debtor to pay the debts in installments if the debtor’s creditors had
not originally agreed to such installments.
An agreement to periodically deliver home-heating oil to a residential customer that
does not indicate the duration of the contract
a. is enforceable for a reasonable period of time.
b. lasts for one delivery only.
c. is not a legally-enforceable contract.
d. constitutes a bulk transfer.
An agreement not to compete is enforceable:
a. in the sale of a business.
b. between competitors.
c. in contracts for the sale of goods.
d. in contracts for the sale of securities.
The concept of immunity from liability means that:
a. one who harms another can be held liable only for voluntary acts.
b. certain persons are not subject to tort liability.
c. one who harms another without intending to do so is not subject to tort liability.
d. one who harms a child can never be sued by the parents of the injured child.
In the case of a check, when the impostor rule applies:
a. the drawer of the check can successfully raise the defense of the forged indorsement.
b. the forged indorsement is effective to negotiate the instrument.
c. the forged indorsement is ineffective to negotiate the instrument.
d. the instrument becomes nonnegotiable.
A shareholder has a right to inspect the books of the shareholder’s corporation if:
a. the request is made in good faith.
b. the request is made with proper motives.
c. the inspection takes place at a reasonable time and place.
d. all of the above.
Parol evidence generally is admissible to explain:
a. ambiguous terms.
b. why signatures are missing.
c. why a contract was not performed.
d. implied terms.
The liability of a shareholder in a professional corporation for the malpractice of an
associate:
a. varies from state to state.
b. is sometimes determined in court.
c. both a. and b.
d. neither a. not b.
An express warranty is basically any statement of fact or promise made about the goods
that becomes part of the basis of the bargain.
Ordinarily, the landlord is not liable to the tenant for crimes committed on the premises
by third persons, such as when a third person enters the premises and commits larceny
or murder.
An interest in a corporation is based on the ownership of one or more shares of stock of
the corporation.
Both companies and their employees are subject to criminal penalties for violations of
federal environmental laws.
When the contract requires that both parties submit disputes to arbitration, this is an
example of a limitation-of-remedies clause.
The fact that a partnership is terminated after a life insurance policy is obtained by one
partner on another invalidates the policy.
Companies whose securities are listed on a national securities exchange and unlisted
companies with assets in excess of $10 million and 500 or more shareholders are
exempt from the reporting requirements of the Securities Exchange Act of 1934.