An absolute privilege is available as a defense to slander liability when:
a. the statement is made to only a few people.
b. libel exists.
c. a witness testifies in a court proceeding.
d. no intent to harm is present.
A seniority system is unlawful if:
a. workers with longer years of service are laid off last.
b. a union did not agree to the policy.
c. it results from an intention to discriminate.
d. workers with longer years of service are predominantly from one race.
An employee has the same status as:
a. an agent.
b. an independent contractor.
c. an employer.
d. none of the above.
The Age Discrimination in Employment Act forbids discrimination by employers,
unions, and employment agencies against persons:
a. over 40 years of age.
b. over 50 years of age.
c. over 60 years of age.
d. between the ages of 40 and 65.
If a contract for the sale of goods does not state the price to be paid, the:
a. contract is void because it is too indefinite to be enforced.
b. buyer is required to pay a reasonable price for the goods.
c. buyer can pay whatever price the buyer in good faith believes is a proper price.
d. seller can rightfully charge whatever price the seller in good faith believes is a proper
price.
Torts are classified as:
a. intentional only.
b. negligence only.
c. strict liability only.
d. intentional, negligence, and strict liability.
Unfair competition is controlled by:
a. statutes.
b. administrative agencies.
c. administrative regulations.
d. all of the above.
After a corporate charter has been forfeited, the owners and officers of the dissolved
corporation are __________ shielded from personal liability by using the corporate
name when making contracts.
a. nevertheless
b. conditionally
c. not
d. retroactively
In order for a trust to be created, who must be able to hold legal title?
a. the beneficiary only
b. the trustee only
c. either the beneficiary or the trustee
d. both the beneficiary and the trustee
A transfer of property by the debtor to a creditor may be set aside as a __________
transfer and the property recovered by the debtor’s trustee in bankruptcy if (1) the
transfer was made to pay a debt incurred at some earlier time; (2) the transfer was made
when the debtor was insolvent and within ninety (90) days before the filing of the
bankruptcy ; and (3) the transfer resulted in the creditor receiving more than the creditor
would have received in a liquidation of the debtor’s estate.
a. predetermined
b. preternatural
c. preordained
d. preferential
In addition to U.S. copyright law, the rights of copyright holders are also protected
under:
a. international laws and treaties such as the Berne Convention.
b. federal piracy laws.
c. state piracy laws.
d. all of the above.
What is an employer defense to a disparate impact charge?
a. The employer did not intend to discriminate.
b. The employment practice is job-related and consistent with business practice.
c. The disparate impact was not the result of extreme recklessness or gross negligence
on the part of the employer.
d. The practice is widespread and accepted in the industry.
The Federal __________ Act makes it unlawful to intercept oral and electronic
communications and provides for __________ against the violator.
a. Wiretapping; civil damages
b. Wiretapping; criminal liability and civil damages
c. Homeland Security; civil damages
d. Homeland Security; criminal liability and civil damages
A contract requires:
a. an offer.
b. an acceptance.
c. both an offer and an acceptance.
d. an agreement manifested by the written or spoken words of the parties.
John’s son was not his agent but contracted to purchase a computer in the name of John.
When John learned of this, John sternly rebuked his son but continued to use the
computer for several weeks. After losing interest in the computer, John offered to return
it, saying that the purchase was unauthorized. John:
a. is not liable on the purchase.
b. expressly ratified the purchase.
c. is liable because all children have the apparent authority to contract for their parents.
d. ratified the purchase by John’s conduct.
Trademarks or service marks may be registered if they utilize terms that are:
a. suggestive of characteristics of the product or service to which they relate.
b. fanciful, arbitrary, or coined.
c. descriptive and have acquired a known secondary meaning linked to a product.
d. all of the above.
If an assignment of an instrument takes place, the assignee:
a. has greater rights than the assignor.
b. has the same rights as the assignor.
c. is in possession of a negotiable instrument.
d. is in possession of a nonnegotiable instrument.
With used or secondhand goods, what is fit for normal use will be:
a. a higher standard than with new goods.
b. a lower standard than with new goods.
c. the same standard as with new goods.
d. a non-applicable standard, as the goods are not new.
A provision stipulating the amount of money damages to be paid in the event of default
or breach of contract is known as a __________ damages clause.
a. nominal
b. contract
c. liquidated
d. breach
Universal defenses work against:
a. holders.
b. a holder through a holder in due course.
c. a holder in due course.
d. all of the above.
The dissolution of a partnership occurs when:
a. a complaint seeking a judicial dissolution is filed.
b. a judicial dissolution is decreed by the court.
c. petitioned for by the aggrieved partner.
d. nonpermanent harm or injury has occurred.
If a provision in an insurance policy is ambiguous:
a. it is interpreted in favor of the insurer because the insured could have rejected the
policy.
b. it is interpreted against the insurer.
c. parol evidence is admitted to show what was intended.
d. the policy is declared void and the insurer is required to return all premiums to the
insured.
On his way to bankruptcy court to file a voluntary petition in bankruptcy, Sam
purchased, at fair market value, a ring for $200. Sam’s liabilities exceeded his assets at
the time of the purchase. The purchase:
a. is a preferential transfer.
b. is fraudulent.
c. is not a preferential transfer.
d. voids the filing of the petition.
An oral contract to sell a house is binding if:
a. the agreement is witnessed by a member of the clergy.
b. there is a tape recording of the agreement.
c. the buyer paid the price and received the deed of conveyance.
d. the seller is a merchant.
In the case of a bilateral contract involving a promise to deliver goods exchanged in
return for a promise to pay money, each party may:
a. assign rights only.
b. delegate duties only.
c. assign rights and delegate duties.
d. assign rights that then will relieve them from the duties.
An instrument is conditional if:
a. it contains an order for the payment of money out of a particular fund.
b. it is to be paid from the assets of an existing trust.
c. it is to be paid from the assets of an existing estate.
d. none of the above.
When a party expressly declares that performance will not be made when required, this
declaration is a(n):
a. anticipatory repudiation.
b. injunction.
c. negotiating technique.
d. waiver of breach.
Bribery is defined as:
a. giving money, property, or any benefit to a person to influence that person’s
judgment.
b. using one’s position as a public official to make an illegal demand.
c. using one’s position as a nonpublic official to make an illegal demand.
d. exerting improper political influence.
A holder is a party in possession of an instrument that “runs” to him. An instrument runs
to a party if it is:
a. payable to his or her order.
b. bearer paper.
c. indorsed to him or her.
d. all of the above.
In general, an assignee stands:
a. in a position subordinate to the assignor.
b. exactly in the position of the assignor.
c. in a position superior to the assignor.
d. in a position similar to, but not equal to, the assignor.
When money is loaned at a greater rate of interest than is allowed by law, __________
is committed.
a. usury
b. credit misfeasance
c. petty theft
d. credit malfeasance
Shareholders exercise direct control over their corporation.
The scope of warranties remains the same regardless of whether the seller is a merchant
or a casual seller.
Generally, the terms broker and agent are synonymous because both work directly for
the insurer.
The term “cyberlaw” refers to laws and precedent applicable to Internet transactions and
communications.
The same rules of law govern the vicarious liability of principals and employers.
Cyberlaw is a completely new area of law, unrelated to any established field of law.
When there is a direct conflict between a federal and a state law, federal law prevails
under the supremacy clause.
United States antitrust laws can protect United States exports.
If a leased building is destroyed, the lease is not terminated, and the landlord has a duty
to restore the building to its former condition.
When a method of transportation called for by a contract becomes unavailable for any
reason, the contract is automatically voided.
A local newspaper devotes its New Year’s Day issue to people who have performed
heroically during the past year. One of the people included in the article was Janet, a
local actress. Eight months earlier, a fire started in the theater while she was in the
middle of a performance. Rather than running out, she stayed to help frightened
members of the audience get out of the theater. The New Year’s article stated that Janet
had been unable to find work as an actress because of burns to her hands and feet and
that, as a result, she owes a great deal of money. Janet sued the newspaper for invasion
of privacy. Based on what you have learned in this chapter, how should the case be
decided?
Persons who are not partners under appropriate circumstances may be held liable to
third persons as though they were partners.
Companywide standardized form contracts imposed on a “take-it-or-leave it” basis by a
party with superior bargaining strength are called contracts of collusion.
A corporation is an artificial person that is created by governmental action.
The Federal Register lists all administrative regulations, presidential proclamations, and
executive orders on a semiannual basis.