The phrase ‘sold as is” will exclude implied warranties.
The earliest development of the preemptive war concept was by:
A. Leslie Groves.
B. Curtis LeMay.
C. Thomas More.
D. Socrates.
In terms of federal laws governing labor-management relations, which of the following
statements is incorrect?
A. Picketing and boycotting are subject to federal court injunctions, under the
Norris-LaGuardia Act.
B. The Wagner Act created the National Labor Relation Board.
C. The Labor-Management Relations Act of 1947 is also known as the Wagner Act.
D. It is an unfair labor practice for a labor union to try to coerce employees to join the
union, under the Taft-Hartley Act.
Monty quit his $150,000 annual salary job with Computer Associates in Monterey,
California, and moved with his family to Fairfield, Connecticut based upon an oral
promise by Software Power to provide reimbursement of all moving expenses and at
least three years employment at an annual salary of $250,000 per year. One month after
moving, and before being reimbursed for moving, Monty’s employment with Software
Power is terminated due to a reduction in force caused by lower-than-expected product
sales. Can Monty successfully sue Software Power?
A. No, since the promise was oral.
B. Yes, under promissory estoppel.
C. No, since a promise of employment is always subject to market conditions.
D. Yes, but only for the moving expenses that Monty can prove he incurred.
Donna entered into an oral contract with Ava to purchase a house from Ava, with $500
per month payments for the next 10 years. Donna moved into the house, remodeled it,
and did extensive repairs. At the end of 10 years, Ava refused to convey title to the
house to Donna and produced evidence at the resulting trial that the fair market rental
value for the house averaged $800 per month over the 10-year period. Which of the
following is true according to the Statute of Frauds?
A. Donna is entitled to the ownership of the house since she had an oral contract with
Ava.
B. Donna cannot claim ownership of the house since there was no written contract with
Ava.
C. Donna can claim ownership since she remodeled the house relying on the oral
contract.
D. Donna is not entitled to the ownership of the house since she was paying below the
fair value.
Charlotte is declared mentally incompetent by a court and is unable to participate as a
partner in Aflac Enterprises. Charlotte wants to leave the Aflac partnership but is
contractually obligated for three more years. Can Charlotte leave the Aflac partnership?
A. Yes, she can do so without any liability to the partnership.
B. No, there is no right to leave.
C. Yes, she has a right to leave, but is liable for breach of contract.
D. No, there is no right to leave unless all the partners agree.
Booksellers, Inc. agrees in writing to hold an offer open to Smallville City Library, the
selling of 20,000 books at $5 each. Booksellers specifically mentions that Smallville
has 60 days to accept this offer. However, before the 60 days have passed, Booksellers
sells all the books to Universal Library for $7 each. Which of the following is true of
this situation?
A. Smallville cannot file a legal claim since an offer may be revoked prior to
acceptance.
B. Smallville can file a legal claim since Booksellers have revoked a firm offer.
C. Smallville had not paid any of the purchase prices and hence cannot file a lawsuit.
D. Smallville can bring a lawsuit since Booksellers engaged in bait-and-switch tactics.
A provision in the security agreement that the security interest of the creditor also
applies to goods the debtor acquires at a later time is known as a(n):
A. forbearance.
B. attachment.
C. floating lien.
D. acceleration.
Citral Co. orders its employees not to join the labor union. It makes it clear that any
employee joining the union would merit a demotion and a drastic cut in the pay
package.
A. Citral Co has simply exercised its right to freedom of speech.
B. Citral Co is trying to protect its business interest by legal means.
C. Citral Co has breached the law by passing these orders.
D. Citral Co is legally in the clear as these instructions do not cause any physical harm
to anybody.
Which of the following is true of exclusion of implied warranty of merchantability?
A. It can be an oral or written statement, promise or other representation about the
quality of a product.
B. It can occur by excusing buyers from examining the goods, the sample, or model.
C. It must be in writing, conspicuous and use the word merchantability.
D. It uses expressions such as is, with all faults and so on to exclude express warranties
and warranties of titles.
To accept a draft, the drawee:
A. need only sign the draft across the face of the instrument.
B. needs to write “accepted” on a separate piece of paper.
C. need only sign on a separate piece of paper affixed to the draft.
D. needs to write “accepted” behind the instrument and sign the bank’s record.
An instrument containing an acknowledgment that a bank has received a sum of money
and a promise by the bank to repay the sum of money is called a(n) ____.
A. installment note.
B. certificate of deposit.
C. promissory note.
D. certificate of demand.
A promise not to sue is commonly called a:
A. consideration.
B. forbearance.
C. detriment.
D. release.
Samantha was looking for a certain shade of thread to complete her needlework on a
tablecloth. At a local shop however, she was unable to decide which of the five selected
shades would be the closes match to the cloth. The shop owner allows Samantha to take
the selected shades home and decide which one she would want to have. This is an
example of which of the following?
A. Destination contract
B. Sale on approval
C. Sale on acceptation
D. Approval contract
Thomas signed a blank promissory note and placed it on his office desk. Kelly, also
present there, took the note. The note ended up in the possession of Big Bank. What
defense to payment does Thomas have?
A. Contributory negligence
B. Lack of delivery
C. Failure of consideration
D. Lack of possession
Which of the following is true of nondisclosure agreement?
A. It requires employees to promise not to reveal any confidential trade secrets, should
they leave their present employment.
B. It limits a worker’s employment options after leaving his or her present job in order
to protect the present employer’s confidential matter.
C. It restricts the seller of a business to enter the same type of business during a
reasonable time and within a reasonable geographical area.
D. It states that the party who wrote the contract will not be liable for any economic
loss or physical injury even if that party caused the loss or injury.
In terms of social responsibility, which of the following arguments is true?
A. Under provisions of most incorporation statutes, a corporation is considered nothing
more than a company.
B. The decisions of corporate managers must always be narrowly focused on the
profits of the shareholders.
C. Corporate social responsibility is based on the premise it is unethical for
corporations to earn profits for themselves.
D. Corporate decisions have an impact on more people than just the shareholders and
managers.
A limited liability company is best thought of as a cross between a partnership and a:
A. sole proprietorship.
B. governmental institution.
C. limited partnership.
D. corporation.
_____ is a new agreement resulting from a bona fide dispute between the parties as to
the terms of their original agreement.
A. Mutual rescission
B. Accord and satisfaction
C. Novation
D. Termination by waiver
Darius wrote a will leaving his property in equal shares “to all my friends.” which he
dated and signed. Is the will valid?
A. Yes, since the document expresses Darius’ intent.
B. No, since the will itself is ambiguous.
C. Yes, since he has dated and signed it.
D. No, since there is a numerical limit to the number of legal heirs.
Which of the following is true of conventional fixed-rate mortgage?
A. It has a rate of interest that changes according to fluctuations in the index to which it
is tied.
B. It involves no government backing by either insurance or guarantee.
C. It has a fixed interest rate during the life of the mortgage, where the monthly
payments by mortgagor increase over the term of the loan.
D. It has comparatively low fixed payments during the life of the mortgage, followed
by one large final payment.
Industries Inc., drew a check payable to Gloria Schell and Pippen Tallit in the sum of
$20,000. For a proper negotiation, the check:
A. needs to be indorsed only by Gloria Schell, since her name appears first.
B. needs to be indorsed by either payee, since the indorsement of only one of the
payees is necessary to negotiate the check.
C. needs to be indorsed by both payees.
D. needs to be indorsed by the maker.
In a joint tenancy, time, title, interest, and possession are known as the four:
A. certainties.
B. factors.
C. unities.
D. components.
Delivery of unordered merchandise through the mail:
A. can be considered as gifts the receiver does not have to pay for.
B. requires that the receiver contact the sender and return the goods.
C. is an implied acceptance of the offer to sell goods.
D. requires that the receiver pay for the goods.
Bridget contracts with Hunter to purchase $30,000 of goods for her store. Hunter wants
a clause in the contract that neither party will sue the other after one year from the date
of breach of contract. Which of the following is true of this situation?
A. Parties are not allowed to provide time limits in their sales agreements since the
UCC sets this time.
B. Competent and informed parties can agree to set any time limit to sue for breach of
contract.
C. The courts must review the time limits the parties have determined in the sales
agreement as reasonable.
D. The UCC allows parties to shorten the time limit to bring a suit to a minimum of
one year.
Grant wants to know the date of the annual shareholders meeting of Big Co. Which
document will contain this information?
A. Articles of corporation
B. Articles of organization
C. Bylaws or regulations
D. Operating agreement
Vivian, owner of Titan Corp., uses Titan Corp. as a way to order merchandise for her
personal benefit and fails to pay for the merchandise. Creditors who have shipped
merchandise to Titan want to sue Vivian personally. Which of the following legal
doctrines would allow a personal suit against Vivian?
A. Corporation by estoppel
B. Piercing the corporate veil
C. De facto corporation
D. De jure corporation
_____ is an obligation placed on individuals because of the law.
A. Vicarious liability
B. Juriscience
C. Duty
D. Responsibility
_______________ is the process by which the courts analyze those aspects of a statute
that are unclear and ambiguous or that were not anticipated at the time the legislature
passed the statute.
A. Judicial review
B. Statutory interpretation
C. Devolution
D. Preemption
The process of determining the constitutionality of various legislative statutes,
administrative regulations, or executive actions is:
A. preemption.
B. statutory interpretation.
C. devolution.
D. judicial review.
Vernon, parked his gasoline tanker truck at Moonbeam Hotel while seeking lodging for
the night. Moonbeam employees went to the gasoline truck to assist in finding a
satisfactory parking place, smelled gasoline, noticed a small drip from the truck, and
refused to rent a room to Vernon. Is that action lawful?
A. No, because rooms were available in the hotel.
B. Yes, because the presence of the truck would frighten other guests.
C. No, because the innkeeper cannot discriminate on the basis of social status.
D. Yes, because there is a danger to other guests and the hotel.
