At the __________, the accused is informed of the charge against him and he enters his
plea.
a. preliminary hearing
b. arraignment
c. indictment
d. information
A “merchant” is defined as a person who:
a. is a dealer in a particular type of goods.
b. by his occupation holds himself out as having knowledge or skills peculiar to certain
goods or practices.
c. employs an agent or broker whom he holds out as having such knowledge or skill.
d. All of these.
Arthur is the payee of a negotiable promissory note on which Brian is the maker. Arthur
indorses the note in blank and delivers it to Clark, who then transfers it to David
without indorsement. David presents it to Brian for payment when it becomes due, but
Brian claims he signed the note based upon fraud in the inducement and refuses to pay.
a. Who is primarily liable on the instrument? Who is secondarily liable on the
instrument?
b. Who has warranty liability? Why? Explain.
c. From whom can David try to collect now that Brian refuses to pay?
A bank may pay a check after the death of its customer for ten days following the date
of his death unless a person claiming an interest in the account orders the bank to stop
making such payments.
a. True
b. False
The costs or losses an injured party avoids by not having to perform are not figured in
the computation of damages.
a. True
b. False
Which of the following products would impose strict liability in tort according to
Section 402A?
a. Popcorn containing large amounts of genuine butter.
b. 150-proof Virgin Island rum.
c. A chainsaw sold with the safety shielding removed.
d. A Ferrari capable of speeds in excess of 150 mph.
A(n) __________ is a delivery of possession of personal property to an agent for sale
by the agent.
a. sale on approval
b. consignment
c. sale or return
d. None of these.
An accountant is subject to potential civil liability arising from the professional services
he provides to his clients and third parties.
a. True
b. False
Corporations may be held liable for a crime.
a. True
b. False
The law would most likely impose a duty of disclosure in a transaction between:
a. a salesperson and customer.
b. business partners.
c. a contractor and a homeowner seeking bids on repairing a roof.
d. a seller of real property and a potential buyer who knows the property has greater
value than the seller realizes.
Most courts allow an accountant to raise the defense of the plaintiff’s contributory or
comparative negligence.
a. True
b. False
The Fair Debt Collection Practices Act applies directly to creditors.
a. True
b. False
Management buyouts commonly make extensive use of borrowed funds.
a. True
b. False
The promise of a surety is binding even without consideration.
a. True
b. False
Regarding Section 2 of the Sherman Act, the standard test applied by the courts requires
proof of a specific intent to monopolize plus a dangerous probability of success;
however, this test neither defines “intent nor gives a standard of power by which to
measure ‘success.
a. True
b. False
In which of the following situations would a court be likely to find that the witness to
the situation had an affirmative duty to act?
a. Where a pedestrian witnessed an auto accident in which one of the drivers was
injured.
b. Where an airline attendant witnessed one passenger threaten another passenger.
c. Where the driver of a car saw a two-year-old toddler wandering in the middle of a
busy street.
d. All of these are situations where legally there is an affirmative duty to act.
Any business that engages in transactions involving the movement of goods,
information, money, people, or services across national borders is referred to as a:
a. multinational enterprise.
b. joint venture.
c. flow of trade.
d. flow of capital.
Under the RMBCA, a pre-incorporation subscription may be revoked at any time
without the consent of the subscribers.
a. True
b. False
To recover on a claim under workers’ compensation, the worker must prove the
employer was negligent.
a. True
b. False
If a merchant makes a written offer to buy or sell goods, this will be irrevocable only if
accompanied by consideration.
a. True
b. False
Allannah has entered into a contract to buy a new Steinway piano. The law governing
the contract is Article 3 of the UCC.
a. True
b. False
A statutorily secured monopoly right that is issued to inventors or discoverers of useful
new devices or processes is known as a:
a. copyright.
b. patent.
c. service mark registration.
d. trade name registration.
After a breach by the seller, buyer may replevy the goods after identification if:
a. he acts within 30 days.
b. he cannot, after a reasonable effort, buy replacement goods.
c. the seller is insolvent.
d. he cannot buy replacement goods or the seller is insolvent.
Insurance protects a business from:
a. tort liability.
b. strict liability.
c. negligence.
d. damage from natural causes.
e. All of these are protected.
Which of the following would always be considered to be contrary to public policy?
a. A contract which contains a covenant not to compete.
b. A contract offered on a take-it-or-leave-it basis.
c. An agreement to pay someone to make false statements about a competitor’s product.
d. An agreement which contains an exculpatory clause.
The “Good Housekeeping Seal of Approval” is an example of a service mark.
a. True
b. False
The transfer of a nonnegotiable promise or order operates as an assignment.
a. True
b. False
An acceptance must be written on the draft.
a. True
b. False
To effect a ratification, the principal must manifest an intent to do so with knowledge of
all material facts concerning the transaction.
a. True
b. False
Sixteen-year-old Todds parents provide adequate food, lodging, and clothing for him,
but he sees a sweater he wants and purchases it. In all states, the sweater is considered a
necessary since it is an item of clothing.
a. True
b. False
A typical automobile financing agreement would be a closed-end credit agreement.
a. True
b. False
A principal who authorizes his agent to commit a tortious act with respect to the
property or person of another is not liable for the injury or loss sustained by that person.
a. True
b. False
The 1976 RULPA and the 1985 RULPA are supplemented by the Uniform Partnership
Act, which applies to limited partnerships in any case for which the Limited Partnership
Act does not provide.
a. True
b. False
An oral stop payment order is binding on the drawee bank for 14 calendar days.
a. True
b. False
In general, a crime consists of two elements: (1) the wrongful or overt act and (2) the
criminal or mental intent. Discuss the following concepts of criminal law and how and
why the general elements of criminal action are altered, extended, or eliminated. In
addition, give examples corresponding to each concept of the type of conduct that could
be a criminal act.
a. Objective fault
b. Vicarious liability
c. Corporate liability