Which of the following statements is correct?
a. Violent street crime results in a greater monetary loss to society than white-collar
crime.
b. White-collar crime results in a greater monetary loss to society than violent street
crime.
c. Studies are not able to calculate the estimated value of white-collar crime since most
white-collar crime is never publicly disclosed.
d. Studies are not able to calculate the estimated value of either violent street crime or
white-collar crime.
Sara sent letters to 1,000 people offering to send them information that would guarantee
them a profit in the stock market if they sent her $99.95. If they sent her the money, the
brief, generally known information she sent them said: “Buy stocks when their prices
are low, and sell when the prices are high. Sara is guilty of:
a. mail fraud.
b. larceny.
c. embezzlement.
d. nothing. She merely thought of and executed a clever way to make money.
When Myrtle comes home from work one evening, she finds that her yard has been
mowed and trimmed. Later, a man comes to collect for the yard work done. Myrtle
refuses to pay for the work since she has never seen the man before and did not hire
him to do her yard work. Which of the following answers is most accurate?
a. This is an implied, unilateral contract and she must pay the price requested by the
man.
b. This is an express, voidable contract that either party may avoid.
c. The court would order Myrtle to pay the reasonable value of the yard work because
of the benefit conferred on her.
d. Myrtle would not have to pay for the yard work.
The management of Northeastern Manufacturing may not close one of its
manufacturing plants without bargaining that issue with the union if its workers are
represented by a collective bargaining unit.
a. True
b. False
Valerie promises Teresa that she will pay Teresa $75 if Teresa will clean Valerie’s house
by noon on Saturday. If Teresa cleans the house by noon on Saturday and Valerie pays
the $75, then this is an implied, bilateral, executory contract.
a. True
b. False
Alice offers to sell her car to Barry for $500, and Barry accepts. Alice’s car has a market
value of $1,000 but this fact is unknown to Alice. The contract is enforceable.
a. True
b. False
A company that engages in unethical behavior may suffer severe consequences.
a. True
b. False
Creditor claims are divided into classes and the highest class must be satisfied in full
before going to the next category.
a. True
b. False
Commercial paper is a contract to pay money.
a. True
b. False
The elements in a defamation case are:
a. defamatory statement; falseness; communication; and injury.
b. a contract; knowledge of the contract; improper inducement; injury.
c. false or misleading fact statements; statements in commercial advertising; likelihood
of harm.
d. duty; breach of duty; proximate causation; and damages.
Alice’s Aspirin Inc., produces and packages aspirin for sale to retail stores. Bob buys a
bottle of Alice’s aspirin at Dahl’s Food Stores. Two days later Bob’s friend, Hank, takes
two aspirin while at Bob’s house. Within minutes, Hank is very ill and is rushed to the
hospital, where it is found that a defect in the aspirin caused the reaction. Which of the
following is correct?
a. Hank can sue both Alice’s Aspirin Inc. and Dahl’s under tort theories because he is an
injured party due to the defective product.
b. Hank cannot sue anyone because he assumed the risk of taking the aspirin.
c. Hank cannot sue anyone because he is not in privity with Dahl’s or Alice’s.
d. Hank can sue but will not be able to recover consequential damages for his medical
expenses.
Megan was employed by a large company. Her supervisor told her to falsify
government reports. She refused and was fired. She sued for wrongful discharge. Her
employer claimed that, since Megan was an at-will employee, she had no legal right to
claim the company was liable for damages. Is the employer right?
a. Yes. An at-will employee does not have a legal right to claim wrongful discharge of
employment.
b. Yes. As an employee, Megan owes a duty of loyalty to her employer. If the company
was found to have acted illegally by falsifying the reports, it (not Megan) would be
liable.
c. No. Even though Megan was an at-will employee, such employees may not be fired
without just cause.
d. No. Though at-will employees do not have extensive rights relative to job security,
they may not be legally fired for refusing to perform an illegal act.
The Electronic Communications Privacy Act covers:
a. e-mail communications.
b. transmissions from cellular phones.
c. transmissions from pagers.
d. All of the above.
Contemporary laws principle of collective responsibility, such as all partners being
personally responsible for the debts of the partnership, had its roots in:
a. the Anglo-Saxon method of ensuring public order through tithing.
b. the Anglo-Saxon practice of using “oath helpers.
c. the English use of ‘shire reeves.
d. the English system of feudalism.
Directors have the authority to manage the corporate business.
a. True
b. False
The Federal Trade Commission requires franchisors to:
a. give prospective franchisees an offering circular at least 14 business days prior to the
signing of a contract or payment of any money.
b. disclose the exact amount of the initial investment required.
c. disclose any litigation the company has ever been involved in
d. disclose how many franchisees have gone out of business in the prior five years.
Under Revised Article 9 of the UCC, electronic chattel paper may be used as collateral
in a secured transaction.
a. True
b. False
Specific performance may be available for the breach of a contract to sell:
a. an original painting.
b. 20 shares of WalMart stock.
c. a Nintendo WII video game system.
d. a 2007 Mustang in mint condition.
Great State Bank loans money to Seth, securing the loan with property owned by Seth.
Great State Bank is advised by its attorney to file a financing statement. Great State
Bank doesn’t understand why it should spend the extra money for this filing, since Seth
has told them that he has no other creditors. Why should Great State Bank file a
financing statement?
a. There are criminal penalties for failing to file.
b. The financing statement allows Great State Bank to repossess the collateral on
default without a court order.
c. The financing statement will protect Great State’s priority rights with other creditors
by giving notice to other creditors that it claims a security interest in the collateral.
d. Filing the financing statement is necessary to complete the attachment requirement in
order to create a security interest.
Which of the following is correct concerning termination statements?
a. A secured party must file a termination statement when consumer goods are involved
and the debtor has paid for them.
b. The termination statement clears the debtor’s public record with regard to old,
irrelevant financing statements so that the same collateral can be used again to secure a
future loan.
c. The secured party must file a termination statement within 20 days of a consumer
debtor’s demand, provided the debtor has paid the full debt.
d. All of the above are correct concerning termination statements.
A rule that establishes maximum length of work shifts for air traffic controllers is an
example of an administrative regulation.
a. True
b. False
Franchise fees can be costly, but they are usually payable over a number of years, after
profits are generated from the business.
a. True
b. False
Deborah purchased a boat from Sun N Surf Marine. She later learned that the salesman
had made misrepresentations to induce her to make the purchase. Under UCC Section
2-721, Deborah can rescind the contract:
a. only if the misrepresentation was fraudulent.
b. and sue for damages whether the misrepresentation was fraudulent or innocent.
c. but cannot sue for damages if the misrepresentation was innocent.
d. but must forego all other remedies.
Billy owes a liquidated debt of $3000 to Rayna, his personal weight trainer. Billy sends
Rayna a check for $300 on which he has marked, “Payment in Full.” If Rayna cashes
the check she will not be able to successfully sue Billy for the remainder of the debt.
a. True
b. False
“Bait and switch” is:
a. advertising a product for sale and then giving a rain check.
b. placing the store brand and the national brand side-by-side in a store.
c. selling the store brand at a lower price than the national brand.
d. the act of advertising certain goods and then pressuring the customer to buy different,
more expensive goods.
When a party to a contract makes a unilateral mistake, the contract:
a. generally can be rescinded by the mistaken party.
b. is void.
c. can be rescinded by either party.
d. generally cannot be rescinded by the mistaken party unless the contract is
unconscionable or it is proven that the nonmistaken party knew of the error.
A successful insanity defense:
a. results in the defendants being back on the streets within a much shorter time than if
the defendant were convicted and sent to prison.
b. is used in about ten percent of all criminal cases.
c. is a favorite outcome for juries since they ordinarily dislike convicting felons and
sending them to prison.
d. results in a “not guilty verdict, even if the prosecution proves the defendant
committed the criminal act.
Tracy is an “at will” employee of Zebra Toy Company. One afternoon she has lunch
with a friend who works in marketing for her company’s biggest competitor, Tiger Toys.
Over a period of about three months, Tiger Toy representatives convince Tracy to work
with them. Tiger offers a larger base salary with bigger commissions than she had with
Zebra. When Tracy leaves Zebra, it sues Tiger Toys claiming it intentionally interfered
with a contractual relationship. Will Zebra Toy Company be successful?
The section of the UCC that governs negotiable instruments is:
a. Article 3.
b. Article 2.
c. Article 6.
d. Article 9.
In the case of scriveners errors (commonly known as typos), a court will usually:
a. reform the contract if it is clear that the mistake is not what the parties intended.
b. instruct the parties to rewrite the contract without the errors.
c. enforce the contract as written.
d. throw out the contract completely.
Under the UCC, the buyer is entitled to consequential damages if the seller could have
reasonably foreseen them.
a. True
b. False
Jerry offers to shovel the snow from Ben’s driveway for $35. Ben replies “OK.” This is
an example of:
a. an implied, unilateral contract.
b. an express, unilateral contract.
c. an implied, bilateral contract.
d. an express, bilateral contract.