Harold purchased 400 pairs of gloves from Isaac at a contract price of $800. Fifty of the
gloves were defective and a dispute arose as to the amount due and owing under the
contract. Harold refuses to pay the $800, and Isaac is threatening to sue. Which of the
following is correct with regard to this transaction?
a. If Isaac agrees to accept $600 to settle the dispute and Harold agrees to pay that
amount, the agreement is enforceable.
b. If Isaac agrees to accept $600 to settle the dispute and Harold pays that amount, Isaac
can still sue for the balance of $200 and will win the lawsuit.
c. Harold is under a pre-existing legal obligation to pay the $800.
d. Two of these but not all three
A person is a direct infringer if he knowingly sells or supplies a part or component of a
patented invention.
a. True
b. False
General contract law states that contracts that have to be in writing must:
a. specify the parties to the contract.
b. specify the subject matter and essential terms.
c. be signed by the party to be charged or by his/her agent.
d. All of these.
Under a shipment contract, the seller passes title to the buyer when the goods arrive.
a. True
b. False
Stewart entered into a contract with Will to have Will build a 10-unit apartment
complex on Elm Street in Randolph County. Unknown to both parties, this land had
recently been rezoned and only single-unit dwellings can be constructed. In this case:
a. there is a mistake of law, which in some states is treated no differently than a mistake
of fact. In such states, since this mistake relates to a basic assumption on which the
parties made their contract and it has a material effect on their agreement, the contract is
voidable.
b. since everyone should know the law, Stewart is liable to Will for any losses he may
incur.
c. Stewart is obligated to buy land elsewhere and have the complex constructed on
property zoned for apartments.
d. Will is liable to Stewart since Will is a contractor.
An acceptance that contains terms different from or additional to those in the offer
receives the same treatment under the common law and under the UCC.
a. True
b. False
In their contract for the sale of window shades, Lela Window Treatments, Inc. and
Shane agree that Lela will have the right to replace any defective goods that are
delivered to Shane. This contractual provision will not have any effect because the
perfect tender rule of the UCC will control in a sale of goods transaction.
a. True
b. False
Caroline signs a contract to work as a sales rep for Incellmed Corporation for a period
of two years. This contract is governed by:
a. Article 2 of the UCC.
b. state common law.
c. federal statute.
d. the law of quasi contract.
Individual debtors must receive credit counseling before filing a bankruptcy petition
under most circumstances.
a. True
b. False
Goods must be both existing and identified to the contract before any interest in them
can pass.
a. True
b. False
The __________ and __________ Amendments respectively prohibit the federal and
state governments from depriving any person of life, liberty, or property without due
process of law.
a. First and Tenth
b. Fifth and Fourteenth
c. Fourth and Fourteenth
d. Fourteenth and Fifth
The court has the sole right to accept or reject a proposed plan of reorganization under
Chapter 11.
a. True
b. False
Marlene owes Bailey $750 due June 1. Bailey assigns the debt to Greg on May 1, but
neither Bailey nor Greg informs Marlene. On June 1, Marlene pays Bailey. Marlene is
fully discharged from her obligation.
a. True
b. False
A(n) __________ is a special type of lease transaction generally involving three parties
instead of two.
a. consumer lease
b. sale
c. finance lease
d. option
Which of the following is NOT a major duty, which the agent owes to the principal?
a. Duty to obey instructions.
b. Duty to act in good faith and with loyalty.
c. Duty to indemnify.
d. Duty to exercise care.
To establish trespass to land, a plaintiff must show interference with the right of
exclusive possession of the property.
a. True
b. False
A freehold estate is:
a. a right to possession of real property
b. a right of ownership of real property for an indefinite time (fee estate).
c. a right of ownership of real property for the life of a person (life estate).
d. All of these.
If B grants A a life estate in Bs property for As lifetime and then B dies, what happens to
the land when A dies?
a. It goes to A‘s heirs.
b. It goes to the state.
c. It reverts to B‘s heirs.
d. It passes under A‘s will.
Which of the following is true about a constructive trust?
a. It normally contains detailed instructions for the trustee to follow.
b. The court imposes it to redress an injustice.
c. It is revocable by the trustee.
d. It carries out the intentions of the trustee.
Incidental damages include lost profits and injury to person or property resulting from
defective performance.
a. True
b. False
A provisional credit occurs at the time a depositary bank permits a customer to draw
funds against the deposited check.
a. True
b. False
a. Under the Code, what constitutes an “express warranty? How does an express
warranty arise?
b. Which of the following would be an express warranty? Explain.
(1) “This is the best computer available in town.”
(2) “This car has new brakes.”
(3) “This sample is just like the one in the box.”
(4) “In my opinion, this is a better video recorder than the one made by RCA.”
(5) “As a mechanic, I think this car is in good running order and should give you no
problems for at least three months.”
A bargain by a candidate for public office to make a certain appointment following the
election is legal.
a. True
b. False
Nell gives Big Al $50 in return for Al’s promise to defame Sara. Nell hopes to ruin
Sara’s chances at a promotion. Nell finds out that Al did not hold up his end of the
agreement. Which of the following statements is true?
a. Nell can get the money back from Al through litigation.
b. Nell can get the money back and force Al to do as he promised.
c. Legally, Nell can neither get the money back nor force Al to do as he promised.
d. Nell can force Al to act through an appeal to the courts, but Al gets to keep the $50.
Congress has enacted disclosure statutes to enhance public and political oversight of
agency activities. These statutes include:
a. Freedom of Information Act.
b. Government in the Sunshine Act.
c. Both are correct.
d. Neither are correct.
The U.S. Supreme Court is rigidly bound by its own decisions under the doctrine of
stare decisis.
a. True
b. False
Primary liability does not apply to issuers of cashier’s checks.
a. True
b. False
In Soldano v. O’Daniels, the court re-examined the common-law rule of nonliability for
not taking affirmative action to save someone from peril. The court considered which of
the following factors with respect to imposing duties for affirmative action by third
parties?
a. The examination and balancing of intervening causes and physical capabilities.
b. The financial duties of victim to rescuer.
c. Moral blame attached to the defendant’s conduct and the policy of preventing future
harm.
d. Moral blame attached to the victim’s conduct.
Under a distributorship:
a. the distributor, like an agent, does not take title to the merchandise it receives.
b. the producer bears many of the risks connected with commercial sales.
c. both the producer and the distributor must take special care to ensure that the
arrangement does not violate the antitrust laws of their respective governments.
d. multinational enterprises wishing to exploit an intellectual property right sell to a
foreign company the right to use such property.
Under the Age Discrimination in Employment Act (ADEA), which of these defenses
are available?
a. A bona fide occupational qualification.
b. A bona fide seniority system.
c. Any reasonable action.
d. All of these.
The right of redemption would require:
a. a court order.
b. assent of all parties.
c. payment of the entire debt with interest.
d. payment only of past due installments.
An example of a special court in the federal judicial system is the:
a. U.S. Court of Federal Claims.
b. Federal District Court.
c. U.S. Supreme Court.
d. U.S. Court of Appeals.
Determining the names of other shareholders in order to communicate with them about
corporate affairs is a “proper purpose” for a shareholder to inspect the books and
records of a corporation.
a. True
b. False
Strict scrutiny is used by the U.S. Supreme Court to carefully scrutinize:
a. the First Amendment right of freedom of religion.
b. the right to engage in interstate travel.
c. the right to vote.
d. All of these are situations where strict scrutiny would be applied.
Russell contracts to install for Nina her choice of living room carpeting. Classify as an
express, implied-in-fact, or implied-in law condition Ninas notification to Russell of her
choice of type and color of carpeting. Compare and contrast this condition with the
other two types of contractual conditions.
Define undue influence and name some of the relationships that would be affected.
Herb promises to give his nephew, Curt, his old TV when the new one he ordered
arrives. Explain whether this promise is enforceable, and include in your discussion the
concept of “bargained-for exchange.
Explain the reasons why the accountability of the management of a corporation is a
cultural issue.