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Rachel agrees to sell Bill goods for $2,000. The value of the goods accepted is $1,500.
If the goods had been as warranted, their value would have been $2,600. What are the
buyer's damages for breach of warranty?
a. $500.
b. $600.
c. $1,000.
d. $1,100.
Match each statement with the correct term below.
a. Unfairness in the bargaining process.
b. An action at law to recover specific goods in the possession of a defendant that are
being unlawfully withheld from the plaintiff.
c. An amount specified by the parties that is recoverable in the event of a breach.
d. A seller makes available to a buyer goods conforming to the contract and so notifies
the buyer.
e. The inability of a person to pay his debts in the ordinary course of business or as they
become due.
f. Total liabilities exceeding the total value of all assets.
g. Commercially reasonable expenses directly resulting from a breach.
h. Expenses resulting from the buyer's requirements of which the seller had reason to
know at the time of contracting; also injury to person or property resulting from breach
of warranty.
i. A buyer's purchase of goods in substitution for those not delivered by a breaching
seller.
j. Oppressive or grossly unfair contractual provisions.
k. Clear indication before performance is due of an unwillingness or inability to
perform contractual duties.
l. The right of a seller under the Code to correct a nonconforming delivery of goods to
the buyer.
m. The manifestation by a buyer of unwillingness to become the owner of the goods.
n. Interest in personal property or fixtures ensuring payment or performance of an
obligation.
21) liquidated damages
22) procedural unconscionability
23) cure
24) security interest
25) substantive unconscionability
26) rejection of the goods
27) anticipatory repudiation
28) tender of delivery
29) consequential damages
30) cover
31) incidental damages
32) bankruptcy insolvency
33) equity insolvency
34) replevin
Which of the following is correct with regard to the powers of government in the
United States?
a. The federal government is a government of enumerated powers.
b. The federal government is all-powerful except in cases of state criminal law.
c. Legislation enacted by Congress does not need to be based on a specific power
granted to the federal government by the Constitution.
d. Congress may not enact legislation that affects the states.
A real estate conveyance is governed by the:
a. statute of frauds.
b. financial decisions of the lender.
c. terms of the mortgage.
d. law of secured transactions.
John's brother, Phil, loaned him $10,000 to start his business. John didn't do too well
and planned to file for bankruptcy. In May, he gave Phil his car worth $8,000 to satisfy
the debt. John filed his petition in November. After liquidation, if the car were included
in his assets, every unsecured debtor would have received 85 percent of the debt owing
to him. Will this be a voidable preference?
a. Yes, since Phil is an insider.
b. No, because the transfer was made more than 90 days prior to filing.
c. Yes, because the transfer was made for an antecedent debt.
d. No, because Phil did not receive preferential treatment over other creditors.
Ratification:
a. can only occur after the third person withdraws from the transaction and gives notice
of such withdrawal.
b. cannot be effective against a corporation.
c. is equivalent to prior authority.
d. Both (a) and (b).
Match each statement with the correct term below.
a. Branch of public law created by agencies in the form of rules, regulations, orders, and
decisions to carry out regulatory powers and duties.
b. Part of private law dealing with rights and duties of individuals among themselves.
c. A system of law based upon Roman law which depends upon comprehensive
legislative enactments and the inquisitorial system of determining disputes.
d. A system of law first developed in England that relies on the judiciary as a source of
law and on the adversary system for settling disputes.
e. Theory that actions must be judged by their motives and means as well as their
results.
f. The law establishing duties which, if violated, constitute a wrong against the entire
community.
g. Theory that society's rewards should be distributed based on market outcomes.
h. A body of law based upon principles distinct from common law and providing
remedies not available at law.
i. A court order requiring a party to do or to refrain from doing a specified act.
j. A general legal principle formulated by equity courts.
k. Part of substantive law governing relationships among individuals and legal entities.
l. Rules for enforcing rights.
m. The law dealing with the relationship between government and individuals.
n. Party bringing a civil action.
o. An equitable remedy invalidating a contract by setting it aside.
p. Theory that moral actions are those that produce the greatest net pleasure compared
with net pain.
q. A court order directing a party to perform a contractual duty.
r. The principle found in common law systems that requires courts to apply rules
decided in prior cases in deciding substantially similar cases.
s. Basic law that creates rights and duties.
t. Theory that actions must be judged by what individuals subjectively feel is right or
wrong for themselves.
1) stare decisis
2) substantive law
3) procedural law
4) injunction
5) administrative law
6) civil law
7) civil law system
8) private law
9) equity
10) plaintiff
11) common law system
12) criminal law
13) maxim
14) public law
15) rescission
16) utilitarianism
17) specific performance
18) ethical relativism
19) libertarianism
20) deontology
Clara is planning to incorporate a new landscaping company, "Evergreen and Growin'."
She has held herself out as an agent for Evergreen and has contracted to buy a truck,
tools, fertilizer, and seed and also has entered into a lease on behalf of Evergreen for an
office. When she fails to get the loan from the bank, she cannot start the business, so
she cancels all the contracts. What are the consequences?
a. Clara can cancel all the contracts with no personal liability if she told them she was
acting as an agent and expressly warranted that she would not be responsible.
b. Clara may be held personally liable on the contracts because she misrepresented to
third parties that she had authority to make contracts on behalf of a non-existent
corporation.
c. Since the company never existed, she gave no implied warranty.
d. Clara will be held liable for the contracts only if she ever gets the loan.
The rights of a holder of a negotiable document of title to whom it has been duly
negotiated include:
a. title to the document.
b. title to the goods.
c. all rights accruing under the law of agency or estoppel.
d. All of the above.
A publicly held corporation is one which:
a. has a minimum of 100 shareholders.
b. is required to register under the Securities and Exchange Act of 1934.
c. has widely traded shares.
d. Both (b) and (c).
Jack recently borrowed $50 from Ricardo for a couple of weeks. Jack, still short of
cash, tells Ricardo, "I will wash and wax your car in exchange for the $50 I owe you."
Ricardo tells Jack, "OK, that's great!" Jack's performance of his new duty will be:
a. an accord.
b. a novation.
c. a rescission.
d. a satisfaction.
A corporation formed in substantial compliance with the incorporation statute and the
required organizational procedures is a:
a. de facto corporation.
b. de jure corporation.
c. corporation by estoppel.
d. private corporation.
For an insurance applicant's misrepresentation to have legal consequences:
a. the insurer need not have relied on it as an inducement to enter the contract.
b. the misrepresentation must be material.
c. the applicant must have known it was false at the time the applicant made the
statement.
d. All of the above.
Which of the following is correct with respect to "finance leases"?
a. A finance lease generally involves four parties.
b. Finance leases are governed by the Truth in Lending Act rather than the UCC.
c. The finance lessor functions merely as a source of credit.
d. All of these are correct.
The mirror image rule applies to:
a. an offer.
b. a rejection.
c. an acceptance.
d. a revocation.
Which of the following would NOT be a remedy available to the seller on account of
buyer's breach?
a. Stop delivery of the goods by the carrier.
b. Require the financially sound buyer to return the goods.
c. Recover the price.
d. Cancel the contract.
The combination of two or more corporations' total assets, title to which is vested in one
of them, known as the surviving corporation, is a:
a. dissolution.
b. liquidation.
c. consolidation.
d. merger.
For the purposes of procedural due process, __________ includes certain entitlements
conferred by government, such as social security payments and food stamps.
a. the right of free speech
b. equal protection
c. property
d. liberty
Will wants to buy a new car. He goes to the bank to get a loan for the purchase, and
signs an agreement to pay $10.00 per month in premiums on a term life insurance
policy which names the bank as the recipient of the policy proceeds in the event of his
death before the loan is repaid. The bank is a(n):
a. incidental beneficiary.
b. creditor beneficiary.
c. donee beneficiary.
d. assignee.
Administrative agencies perform what basic function?
a. Rulemaking.
b. Law enforcement.
c. Adjudication.
d. All of the above.
A contract that binds the offeror to keep an offer open for a specified period of time is
known as:
a. a offer with reserve.
b. an option.
c. promissory estoppel.
d. a unilateral contract.
Don offers to sell his diamond ring to Emily. 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.
Jack has been in the business of selling carpeting for 20 years. He calls Bob, who is
opening another branch of his furniture stores, and offers to sell him 100 yards of carpet
at $20 per yard. Bob agrees and sends back the following letter confirming the deal:
Dear Jack:
As we discussed on the phone January 3, we accept your offer of 100 yards of Saxony
"heather blue" carpeting at the rate of $20 per yard. We also reserve the right to
purchase any additional yardage we need to carpet our other showroom facilities at the
same rate for one year from that date.
Very truly yours,
Bob
Which of the following is true?
a. There is a contract for only 100 yards of carpeting.
b. There is a contract for 100 yards PLUS the additional yardage.
c. There is no contract since Bob made a counteroffer.
d. There is no contract because the additional term is too uncertain to become a contract
term.
T-J Computer Company has developed a new and innovative magazine and television
ad campaign that it would like to protect from use by its competitors. T-J may copyright
its magazine and television ads.
What are the major functions of the Federal Trade Commission (FTC) and what power
does the FTC have?
The person who signs a note and promises to pay it is the maker.
A collection agency may not personally contact the debtor if the debtor has engaged a
lawyer to represent him.
When a partial assignment is made, the obligor may require all the parties entitled to the
promised performance to litigate in one action any issues concerning the contract
performance.
List and define the common law causes of action or theories of recovery for
environmental damage.
Georgia's company may lawfully discover Samantha's company's trade secrets if
Samantha's company fails to take reasonable precautions to protect their trade secrets.
Mark complied with all formation requirements for incorporating his taxicab business.
He is the sole shareholder in the corporation. The corporation owns two automobiles
that Mark frequently uses for his own personal use. In addition, he sometimes deposits
the money he takes in during the day into his personal checking account. One day, an
employee of the company, while driving one of the company vehicles, accidentally hits
a pedestrian in a crosswalk. The pedestrian sues both Mark and the taxi company for
$100,000. The corporate assets are only $32,000. Is the corporation liable for the acts of
its employee? Will Mark be personally liable under the facts? Explain.
The general partners of a limited partnership have almost exclusive control and
management of the limited partnership.
The Restatement and the Code have made the traditional test of objective impossibility
more stringent by requiring that the performance must be actually or literally
impossible in order to excuse a party from contractual duties.
