Would a letter written after the execution of a contract and which contained agreements
different from those in the written contract be admissible under the parol evidence rule?
a. No, because it contradicts the terms of the contract.
b. No, because it changes the agreement.
c. No, because it explains the agreement.
d. Yes, it would be admissible, because it is subsequent to the written agreement.
Some businesses choose not to obtain a patent because it provides protection for only a
limited time.
a. True
b. False
In a Chapter 11 or 13 proceeding, the bankruptcy estate of an individual includes wages
earned after commencement of the proceeding.
a. True
b. False
Andrews Manufacturing Company has repudiated its contract to sell 500 computers to a
computer store. What recourse does the retailer have under the circumstances?
a. It must await the seller’s performance.
b. It can recover punitive damages.
c. It can seek specific performance.
d. It can “cover” by procuring goods elsewhere and then sue for any difference between
the cost of cover and the contract price, plus incidental and consequential damages less
expenses saved by the breach.
Like legal analyses, analyses of ethics have a central authority and follow clear-cut,
universal standards.
a. True
b. False
A judicial lien against a partner’s transferable interest in a partnership is known as:
a. a legal aggregate.
b. a delegation of assets.
c. a charging order.
d. an assignment.
Ethical relativism holds that when any two individuals or cultures differ regarding the
morality of a particular issue or action, they are both correct because morality is
relative.
a. True
b. False
Legislative rules by an administrative agency do not have the force of law.
a. True
b. False
An easement that is appurtenant usually passes to the new owner of the land.
a. True
b. False
Ace Corporation requires a quorum of five directors. If Richard, a director, shows up at
the meeting for a vote on his favorite topic (dividends) and withdraws thereafter,
leaving only four directors, they, under the Revised Act, may not act on any further
business.
a. True
b. False
In the case of Denney v. Reppert the court allowed the employees of a bank to collect a
reward, because they supplied information that led to the arrest and conviction of a
bank robber.
a. True
b. False
Which of the following is not a negotiable instrument?
a. A check.
b. A draft.
c. A certificate of deposit.
d. A stock certificate.
The common law system is used in most of Europe, Scotland, and Latin America.
a. True
b. False
A statute may preclude judicial review of an agency action.
a. True
b. False
To which of the following limitations are the rights of the holder of a copyright subject?
a. Charitable use.
b. Compulsory licenses.
c. Palming off.
d. All of these.
Under the Code, if the parties have reached no agreement on price, the price is a
reasonable one at the time of making the contract.
a. True
b. False
Powers sells 5,000 insulators to Falconbury and issues a negotiable document of title
for the goods. The insulators are stored in the Southside Warehouse. When Powers
discovers that Falconbury is insolvent, he may effectively stop delivery of the goods by
notifying Southside not to deliver the goods to Falconbury.
a. True
b. False
The performance of a pre-existing contractual duty which is neither doubtful nor the
subject of an honest dispute is legally sufficient consideration to support a second
contract.
a. True
b. False
Horizontal privity pertains to remote sellers within the chain of distribution.
a. True
b. False
Which of the following is NOT considered to be an alternative method of dispute
resolution?
a. Special verdict.
b. Negotiation.
c. Conciliation.
d. Mediation.
Howard ordered an aluminum storm door for $249.99. Before it was delivered, the
same store from which he ordered the door ran an ad in the paper for the same storm
door at $179.99. Howard called the store and demanded the advertised price. If the store
says “okay:
a. Howard must pay $179.99.
b. Howard must pay $249.99.
c. there is no contract.
d. there is a contract for the reasonable value of the door.
Sally goes away to college at 17, lives on her own, and pays her own rent and electric
bills. If she makes a contract to buy a television set, in most jurisdictions, she may
assert her minority status and set aside the contract.
a. True
b. False
Under Chapter ___________, certain debts of individuals are not dischargeable despite
the debtor’s good faith.
a. 7
b. 11
c. 13
d. All of the above.
Where a stipulation in restraint of trade is part of the sale of a business, it may be valid
if the restraint is within reasonable limitations to protect the business’s goodwill.
a. True
b. False
The warranty of title for the sale of goods found in the Code:
a. may be excluded with the phrase “as is.”
b. will vest title under Article 2A.
c. may not be excluded or modified by the seller.
d. will apply regardless of whether it is provided for in the contract unless the parties
have specifically excluded it or certain circumstances exist.
The greatest ownership interest a person may have in real property is:
a. fee simple absolute.
b. tenancy by the entireties.
c. life estate.
d. vested remainder.
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.
If a drawer files a stop payment order on a check, he is automatically relieved of
liability for the obligation.
a. True
b. False
On June 1, Supertread Tire Company entered into a contract to provide 100 tires per
month to ZYX Cycle Company at $30 per tire for the next two years. The October
shipment consisted of 100 badly defective tires. ZYX Cycle Company:
a. can treat the whole contract as breached.
b. can reject the October shipment if it cannot be cured in a timely manner by
Supertread.
c. cannot reject the October shipment since it is part of the installment series.
d. must pay for the defective tires, but Supertread must provide 200 tires in November.
For rescission to be available as a remedy for a false statement, a misrepresentation
must have been made with scienter.
a. True
b. False
If the seller has failed to comply with Code requirements in making a resale of goods
that were wrongfully rejected, a good faith purchaser at the resale takes the goods
subject to rights of the original buyer.
a. True
b. False
A tangible or electronic record that evidences both a monetary interest and security
interest in or a lease of specific goods is known as:
a. a negotiable instrument.
b. a document of title.
c. a promissory note.
d. chattel paper.
An implied-in-law condition and constructive condition are the same.
a. True
b. False
A debtor may not convert a Chapter 7 case to a Chapter 11 or 13 case.
a. True
b. False