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Article 2 of the UCC mandates that the parties to a sales contract state in specific and
unambiguous language the exact terms of the contract. Otherwise, courts will declare
the contract unenforceable.
Wire transfer is used for transfer of funds across the country or around the world. This
service is generally used by large business and financial institutions.
If Acme Corp. and Bogus, Inc. both manufacture product X but no other products, the
relevant product market for purposes of an antitrust challenge to a merger between
Acme and Bogus will not be a crucial consideration.
A disclaimer of the implied warranty of merchantability must be in writing to be
enforceable.
An officer or director of a corporation may be liable if they acted beyond their scope
and corporation property was damaged or wasted.
Separation of power issues seldom arise with regard to administrative agencies because
agencies owe their existence to the absolute constitutional right of the legislative branch
to delegate its power as it sees fit.
In order to be valid, a holographic will must be typed.
Mr. White sends his acceptance for a business contract to Mr. Green. But Mr. White put
insufficient postage on the envelope. One day later Mr. Green revokes the offer through
the mail. Mr. White upon receipt of the undelivered acceptance, Mr. White overnighted
the acceptance letter to Mr. Green. The court will find if it applies the UCC rule that a
valid acceptance occurred and subsequent contract is now created between Mr. White
and Mr. Green.
An implied warranty is created rather than stated by the parties or written in a contract.
The warehouse receipt or the bill of lading must be nonnegotiable.
When insurance policy provisions must be interpreted, a court will generally interpret
them as they would be understood by an average person.
To accept an offer for a bilateral contract, the offeree must perform the requested act.
Generally, property owners do not owe a duty of care to trespassers, who regularly enter
the land without authorization.
The Clean Water Act establishes a program governing the injection of wastes into wells.
If the seller is in the process of manufacturing the goods when the buyer breaches the
contract, one of the seller's options is to complete manufacture of the goods and then
resell them so long as this minimizes the loss to the seller.
The potential anticompetitive effect of a tying agreement is that the seller's competitors
in the sale of the tied product may be foreclosed from competing with the seller for
sales to customers that have entered into tying agreements with the seller.
The Uniform Commercial Code sufficiently addresses the concerns that parties have
when contracts are made to create or distribute information.
The most common way of obtaining ownership of property is by purchasing it.
A personal representative to an estate is also known as an executor.
A claim in recoupment is a claim of the person obligated on the instrument against the
original payee of the instrument.
Common carriers are not permitted to limit their liability for damage to bailed goods.
Anticipatory repudiation is disallowed under the UCC.
Administration action is subject to basic constitutional tests.
Speaking generally, a quasi-contract applies where there has been foreseeable reliance
on an express promise.
A teleological theory may find unacceptable that any competent employee loses his job,
even if the layoff's effect is to reduce prices to consumers and increase profits.
Competitors making an agreement to split up a geographical area and not to directly
compete against each other is per se illegal.
An agent who purports to act for a legally nonexistent principal is personally liable
when the agent knows or has reason to know the principal does not exist.
In general, a court has venue if it is territorially fair and convenient for both parties to
litigate the case in that court.
An agent who has total control over a piece of property has implied authority to
contract for repairs.
Each partner in a limited partnership owns an interest in the partnership. This is deemed
his personal property.
Unless the articles of incorporation state otherwise, directors cannot be removed with or
without cause.
Title to a personal property may be obtained by accession, which is the intermixing of
goods that belong to different owners.
John promises to pay Robert $100 per week, in exchange for Robert's promise not to
beat John up. There is no consideration for John's promise.
Smith and Benson make an oral contract for the sale of some land at a price of
$500,000. After paying Smith $400,000 of the purchase price, Benson takes possession
of the land. One month later, Smith wants to boot Benson off the land. His argument is
that the parties' oral agreement is unenforceable under the statute of frauds. Which of
the following is most correct?
A. Smith is correct, because the contract is for an amount greater than $500.
B. Smith is correct, because this is an oral contract for the sale of real estate.
C. Smith is incorrect, because the contract is for an indefinite period of time.
D. Smith is incorrect, because Benson paid part of the purchase price and took
possession.
Johnny LaRue sells men's jackets to men's clothing stores, including Melonville Man.
Melonville Man orders a selection of men's jackets from LaRue's catalog, asking that
LaRue select an assortment of goods for the buyer. LaRue takes advantage of this
opportunity to get rid of the odd-sized jackets and those in pastel colors that are no
longer popular. LaRue:
A. has stuck to the express terms of the sales contract.
B. has violated the good faith requirement under sales contracts.
C. has followed the usual trade practice.
D. has properly modified the contract.
The CISG:
A. provides uniformity for transactions among contracting parties in different states in
the United States.
B. applies only to consumers, not commercial parties.
C. applies only to services, not sales of goods.
D. does not have provisions to cover every contract problem that might occur.
A firm offer differs from an option in that, a firm offer:
A. is a separate contract by itself.
B. is irrevocable for a certain period of time.
C. does not require a consideration in exchange for the offer.
D. is not covered under the UCC.
Since the relationship between the insurer and the insured is contractual in nature, the
parties must fulfill all elements of:
A. a quasi-contract.
B. an indemnity.
C. a wager.
D. a binding contract.
Grandfather Summers had two children, Mary and Bill. Mary, her father's favorite, has
one child, Margaret. Bill has two children, Jill and John. Mary and Bill die before
Summers (in legal terms, predecease him), but all three grandchildren are living at the
time of his death. Summers' estate has to be divided per capita. Who will get what?
A. The spouses of Mary and Bill will inherit the estate.
B. Mary's children will inherit the major share of the estate.
C. All three grandchildren will get an equal share.
D. The estate will go to a trust because Mary and Bill are dead.
There is a provision of the means-ends tests by the Supreme Court because:
A. individual rights must be protected at any cost.
B. the correct procedure of law has to be followed.
C. no constitutional right is absolute.
D. the conduct of public officials must be scrutinized.
_____ legislation ensures periodic congressional review of the initial decision to
delegate legislative authority to an administrative agency.
A. Conditional
B. Sunset
C. Class
D. Subordinate
Calvin, a resident of South Park, Colorado, creates a website called "But Seriously"
which acts as an electronic billboard for posting funny stories. Ted, a resident of
Northridge, California, posts a story on the website. Stu, another California resident
from San Diego, files a lawsuit against Calvin in a federal district court in California,
claiming that Calvin had defamed him on his website. Based on these facts, does Calvin
have sufficient "minimum contacts" to give the California federal district court in
personam jurisdiction over him?
A. No, Ted's posting alone is not enough to create sufficient "minimum contacts."
B. Yes, Ted's posting creates sufficient "minimum contacts."
C. Yes, by creating a website that is accessible in California, Calvin has sufficient
minimum contacts with that state.
D. Calvin has sufficient "minimum contacts" with California only if Stu's claim is in
excess of $75,000.
An agreement that unreasonably tends to interfere with family relationships will be
considered _____.
A. implied-in-fact
B. valid
C. exculpatory
D. illegal
Klingon Corporation has only one class of shares, its common shares. Klingon has
assets of $200,000 and liabilities of $160,000. It has $40,000 of excess liquidity that it
does not need to pay currently maturing obligations. What is the maximum property
dividend that Klingon may pay to its common shareholders?
A. $60,000
B. $10,000
C. $40,000
D. $30,000
What is the name if the property interest is conveyed to a tenant under a lease?
A. Leasehold Estate
B. Freehold Estate
C. Life Estate
D. Joint Tenancy
The fiduciary duty to the corporation is owed by its:
A. shareholders.
B. promoters.
C. investors.
D. creditors.
Davis throws a dagger at Smith, intending to kill Smith. However, the dagger misses
Smith and strikes the hat on Potter's head. The dagger does not make contact with
Potter's body. Unharmed but finding the whole thing offensive, Potter sues Davis for
battery. Which of the following is most true?
A. Davis is not liable because he did not intend to make contact with Potter.
B. Davis is liable to Potter for negligence.
C. Davis is not liable because Potter did not suffer any physical harm.
D. Davis is liable to Potter for battery.
Mini Corp. and Huge, Inc. are competitors. Mini holds the single largest market share in
the markets they compete in. Huge is third in terms of market share. Mini plans to
acquire Huge. Which of the following, if true, would help bolster a conclusion that the
acquisition is lawful under Clayton Act Section 7?
A. That Mini has had a history of acquiring ownership over competitors in order to
increase its market share.
B. That there are about 25 competitors other than Mini and Huge while there were only
10 competitors 10 years ago.
C. That Mini has a 25 percent market share now and would only be increasing its
market share by another 10 percent by acquiring Huge.
D. That Huge is an aggressive firm and it has developed a plethora of patentable
technologies in the last five years.
What is meant by rational basis?
A. A decision has the consent of all board members.
B. A decision has been taken after protracted negotiations.
C. A decision has a logical connection to the facts.
D. A decision has been taken after a long discussion.
Which of the following partnerships can be classified as nontrading partnership
engaged in providing services?
A. Dairy farming
B. General contracting
C. Real estate brokerage
D. Manufacturing
Tom steals Dave's checkbook, completes a check for $1,000, forges Dave's signature,
and gets payment from Tom's bank. The bank paid in good faith. Who is liable to the
bank for the $1,000 in this case?
A. Tom
B. Dave
C. Both Tom and Dave
D. Neither Tom nor Dave
A contract is said to be _____—that is, the legal part can be separated from the illegal
part—if the contract consists of several promises or acts by one party, each of which
corresponds with an act or a promise by the other party.
A. implied-in-fact
B. voidable
C. unenforceable
D. divisible
A plaintiff wishes to recover damages from the issuer for losses resulting from material
misstatements in a securities registration statement. In order to be successful under
Section 11 of the 1933 Act, one of the elements the plaintiff must prove is that the:
A. plaintiff was in privity of contract with the issuer.
B. plaintiff relied on the misstatement or omission in the registration statement.
C. issuer acted negligently.
D. issuer is in one of the classes of persons liable under Section 11.
If part of an agreement is legal and part is illegal, the courts will:
A. declare the entire agreement to be void.
B. ask both the parties to ratify the agreement before considering it for evaluation.
C. enforce the legal part so long as it is possible to separate the two parts.
D. impose punitive damages on both the parties.
If part of an agreement is legal and part is illegal, the courts will enforce the legal part
so long as it is possible to separate the two parts, i.e., it is divisible.
While preparing his tax returns for 2010 year, Harry discovers that his 2008 tax returns
has errors. Those errors led him to pay more income tax that year than he would have
otherwise paid. Harry wants to inspect his 2008 tax files that IRS has and request them
to be corrected. Under which Act can he place this request?
A. The Freedom of Information Act
B. The Disclosure act
C. The Government in the Sunshine Act of 1976
D. The Privacy Act of 1974
Which of the following is a means of obtaining control over the collateral?
A. The secured party becomes the bank's customer for the deposit account.
B. The debtor is the bank with which the deposit is maintained.
C. The bank has agreed to comply with the debtor's instructions regarding the funds in
the account.
D. The debtor becomes the bank's customer for the deposit account.
Which of the following is the oldest and also the simplest security device?
A. Pledge
B. Chattel mortgage
C. Deed of trust
D. Surety
_____ is the authority the principal wants the agent to possess and is based on the
principal's communications or manifestations to the agent.
A. Apparent authority
B. Actual authority
C. Incidental authority
D. Traditional authority
A dissociating member will be liable to the LLC for damages caused by the dissociation
due to:
A. the member being a debtor in a bankruptcy.
B. the member's death due to a motor vehicle accident.
C. a guardian being appointed over affairs of an Alzheimer-inflicted member.
D. the member withdrawing from the LLC after its term has expired.
Which of the following is an EXCEPTION to the mandatory availability schedules of
the expedited Funds Availability Act?
A. Cashier's checks
B. Teller's checks
C. Electronic payments
D. New accounts
Judith George makes an offer to sell a plot of land using a normal letter and states no
authorized means by which the offeree, Helga Holmes must respond if she accepts. If
Helga accepts the offer using a normal letter, which of the following is true?
A. The acceptance is effective upon dispatch.
B. The acceptance is effective when it is received.
C. The offer is invalid because it fails to stipulate the means of acceptance.
D. The acceptance would be effective upon dispatch even if the means of acceptance is
unreasonable.
Which of the following is true of a sales contract under the UCC?
A. The courts cannot fill any "gaps" in the contracts.
B. The court needs to find if the parties intended a contract.
C. An intent to contract exists even if the parties were unable to reach an agreement.
D. All terms of contract need to be clear for the court to decide the case.
If a person dies intestate, his real property will be distributed:
A. to the state in which the property is located.
B. to the state of the person's domicile.
C. according to the law of the state in which the property is located.
D. according to the law of the state of the person's domicile.
Which of the following will be legally binding on all parties despite lack of
consideration?
A. An irrevocable oral promise by a merchant to keep an offer open for 60 days.
B. A promise to donate money to a charity which the charity relied upon in incurring
large expenditures.
C. A promise to pay for the college education of the child of a person who saved the
promisor's life.
D. A signed modification to a contract to purchase a parcel of land.
An agent who receives no compensation for his services is known as:
A. an independent contractor.
B. a special agent.
C. a gratuitous agent.
D. a servant.
