If a nonconforming installment substantially impairs the value of a whole contract, the
buyer can treat the entire contract as having been breached.
A bank that has certified a check is under no obligation to accept it.
Venue is the term for the subject matter of a case.
A state law that places a significant burden on religion is unconstitutional.
The First Amendment protects commercial speech more extensively than
noncommercial speech.
Cumulative voting refers to the accumulation of proposals presented annually for a
shareholders’ vote.
An implied warranty of merchantability arises in every sale or lease by a merchant who
deals in goods of the kind sold or leased.
A bargained-for exchange is one of the elements of consideration.
Defamation is one person’s use of another’s name without permission.
Under the Statute of Frauds, oral contracts are void.
A tenant is not responsible for any damage to leased premises.
Certain debts are not dischargeable in bankruptcy.
Each state establishes rules that govern the conduct of attorneys.
In no states are communications between an accountant and his or her client privileged.
A service mark distinguishes products used, or “put into service,” by the government.
A contract may have to be in writing to be enforceable even if its performance is
possible within a year.
Force majeure clauses in international business contracts commonly set forth the major
clauses of the contracts.
A minor may disaffirm a contract only if the subject matter is illegal.
An offeror’s subjective intent determines the effectiveness of an offer.
A condition subsequent terminates a party’s promise to perform.
A person who receives an instrument as a gift normally possesses the rights of an HDC.
If a note is payable in thirty days, payment is due by midnight on the thirtieth day.
When an owner is unable to make mortgage payments, a lender may agree to a short
sale.
The key to liability under Section 10(b) of the Securities Exchange Act of 1934 and
SEC Rule 10b-5 is whether undisclosed inside information is material.
The initial interest rate is the part of a purchase price that is paid up front in cash.
To determine whether a duty of care has been breached, a judge asks how he or she
would have acted in the same circumstances.
A seller with void title can transfer good title to a good faith purchaser for value.
A purchase-money security interest in consumer goods is perfected automatically at the
time of a credit sale.
For consideration to have “legally sufficient value,” it must consist of goods or money.
A contract cannot be void if its purpose is legal.
To recover workers’ compensation, an employee must prove that an injury was the fault
of the employer.
Sam, an engineer, supervises the construction of a new bridge. When the bridge
collapses due to faulty construction, Sam is sued by those injured in the collapse. As a
professional, Sam is held to the same standard of care as
A.ordinary persons.
B.other engineers.
C.other professionals, including doctors, dentists, and lawyers.
D.those injured in the collapse of the bridge.
Jewel Property Company hires Klint, an independent contractor, to wash the windows
of Jewel’s commercial building. Jewel’s tenant Lucy is injured when Klint closes a
window on her hand. In determining whether Jewel is liable for Lucy’s injury, the most
important factor is
A.Jewel’s employment of Klint.
B.Jewel’s investigation of Klint’s background and experience.
C.the condition of the premises, especially the window.
D.the degree of control that Jewel maintained over Klint’s actions.
Fact Pattern 20-1
Northeast Bank makes mortgage loans to consumers, including Mai, to buy homes.
Refer to Fact Pattern 20-1. For Mai’s loan, Northeast provides all required disclosures.
Mai has a right to rescind the mortgage
A.at any time.
B.under no circumstances.
C.within three business days.
D.within whatever period is most rational and appropriate.
Ira signs Jill’s name, without her authorization, on the back of a check made out to her.
This is
A.burglary.
B.forgery.
C.larceny.
D.no crime.
In Restful Motel’s suit against Sleepy Hotels, Inc., the jury returns a verdict in Restful’s
favor. Sleepy files a motion stating that even if the evidence is viewed in the light most
favorable to Restful, a reasonable jury should not have found in its favor. This is a
motion for
A.a judgment in accordance with the verdict.
B.a judgment on the pleadings.
C.a new trial.
D.judgment n.o.v.
Marie claims that a Nebraska state statute infringes on her “procedural due process”
rights. This claim focuses on
A.procedures used in making decisions to take life, liberty, or property.
B.the content of the statute.
C.the similarity of the treatment of similarly situated individuals.
D.the steps to be taken to protect Mary’s privacy.
Haya obtains an insurance policy from Inviolable Insurance Corporation (IIC). IIC may
cancel, or refuse to renew, the policy because of
A.Haya’s appearance as a witness against IIC.
B.Haya’s gender.
C.Haya’s national origin.
D.none of the choices.
Jean is playing a computer game on a bad disk that melts in her drive, starting a fire that
injures her hands. Jean files a suit against K-Tech, Inc., the game’s manufacturer.
K-Tech is held liable under the doctrine of strict liability. A significant application of
this doctrine is in the area of
A.cyber torts.
B.intentional torts.
C.product liability.
D.unintentional torts.
Egan is a director of First Realty Corporation. As a director, Egan can act as an agent to
bind First Realty
A.in all circumstances.
B.in no circumstances.
C.to any contract in which Egan does not have a conflict of interest.
D.to any contract that represents a corporate opportunity for First Realty.
Twyla buys a bicycle from U-Pik-It Bike Store, which agrees to keep the bike for Twyla
until she picks it up. Before Twyla gets the bike, a fire destroys the store and the bike.
The loss is suffered by
A.neither Twyla nor U-Pik-It
B.Twyla and U-Pik-It.
C.Twyla only.
D.U-Pik-It only.
Tania promises to buy Saki’s handheld game-player for $75. Saki is
A.an executee.
B.an offeror.
C.a promisee.
D.a promisor.
Holiday Sales Company and Global Distributors, Inc., enter into an express contract for
the delivery of imported specialty goods. Express contract terms are given
A.less priority than the parties’ prior dealing.
B.less priority than the trade usage in the parties’ industry.
C.less priority than the parties’ course of performance.
D.more priority than the prior dealing, course of performance, and trade usage.
Hoppy, who works as an employee for Imperial Power Corporation, suffers an injury in
an accident. Hoppy will be compensated under state workers’ compensation laws
A.only if the injury occurred during working hours.
B.only if the injury occurred off the job.
C.only if the injury occurred on the job.
D.whenever and wherever the injury occurred.
In making business decisions, Glenda, personnel manager for HVAC Maintenance, Inc.,
applies his belief that all persons have fundamental rights. This is
A.a religious rule.
B.the categorical imperative.
C.the principle of rights.
D.utilitarianism.
Virgil borrows $175,000 from United Finance Bank to buy a home. Federal law
regulates primarily
A.mortgage terms that must be disclosed in writing.
B.oral representations with respect to the terms of a loan.
C.the lowest prices for which real property can be sold.
D.who can buy real property, where they can buy it, and why.
Flem is an employee of Glo Goods, Inc. Flem reports to state officials that Glo is
illegally shipping unsafe goods to unsuspecting customers. When Glo learns of Flem’s
report, Glo fires him. He successfully sues Glo for wrongful discharge. With respect to
the employment-at-will doctrine, this is
A.an example of the doctrine.
B.an exception based on contract theory.
C.an exception based on public policy.
D.an exception based on tort theory.
Consumer Mortgage Loans provides Demi with a mortgage to buy a home. Under the
terms, Demi can choose to pay only the interest portion of the monthly payments and
forgo paying of the principal for five years. This is
A.a fixed-rate mortgage.
B.an adjustable-rate mortgage.
C.an interest-only mortgage.
D.a violation of the law.
Oakley posts a defamatory remark about Pierre in “Roominate,” an online social
network maintained by SocNet, Inc., an Internet service provider. Most likely to be held
liable for the remark is
A.Oakley.
B.Pierre.
C.Roominate.
D.SocNet.
Lorna borrows $175,000 from Mountainside Credit Union to buy a home. Among the
terms that must be disclosed under federal law is the annual percentage rate. This is
A.the actual cost of the loan on a yearly basis.
B.the average prime offer rate.
C.the interest rate at which the loan is made.
D.the loan principal.
Harley is an employee of ICU Identity Systems Corporation. Harley regularly posts
messages on a company-sponsored blog, which is read by employees, shareholders, and
other stakeholders. According to the Securities and Exchange Commission, Harley’s
posts are subject to
A.federal securities laws.
B.international communications regulations.
C.state blog and tweet rules.
D.no law.
Garden Tool Company makes hedge trimmers. Troy is injured while using a Garden
Tool trimmer and sues the company for product liability based on negligence. To win,
Troy must show that
A.Garden Tool did not use due care with respect to the trimmer.
B.Garden Tool misrepresented a material fact regarding the trimmer.
C.Troy was experienced in the use of trimmers.
D.Troy was in privity of contract with Garden Tool.
The payment of Mo’s debt to Neil is guaranteed by Mo’s personal property. This is
A.governed by Article 2 of the UCC.
B.governed by Article 3 of the UCC.
C.governed by Article 9 of the UCC.
D.not governed by the UCC.
Trudy forges Uma’s signature on a check “payable to the order of Trudy” drawn on
Uma’s account in Verity Bank. Most likely, if the bank pays the check
A.the Federal Reserve will reimburse all parties for their costs.
B.the loss will be apportioned among all of Verity’s customers.
C.Uma will be liable for the amount.
D.Verity will have to recredit Uma’s account.
Ben allows Cody to store his trailer on Ben’s property for $20 a month while Cody is
out of town. Later, Ben notices rainwater collecting in the trailer and covers it with a
tarp at a cost of $40. This cost is most likely borne by
A.Ben and Cody.
B.Ben only.
C.Cody only.
D.neither Ben nor Cody.
O.K. Valve Company applies for a patent for a valve. Meanwhile, O.K. licenses its
products, including the valve, to Petro Pumps, Inc., which uses the valve to make oil
pumps. Under the terms of the license, Petro agrees to pay royalties on O.K.’s
“patented” products. When a patent is granted on the valve, O.K. asks Petro to pay
royalties on the sales of its pumps. Petro wants to challenge the validity of O.K.’s
patent. According to the majority in MedImmune, Inc., v. Genentech, Inc. case, a patent
licensee can challenge the validity of a licensed patent
A.only after breaching the license agreement.
B.only before breaching the license agreement.
C.without breaching the license agreement.
D.under no circumstances.
The Arkansas state legislature enacts a statute that prohibits the advertising of video
games “because the games might be harmful to minors.” Despite this new statute, the
president of Games Marketing, Inc. (GMI), orders GMI marketers to place ads in any
media. When a GMI ad appears on HDTV, a local television station, GMI and HDTV
are charged with violating the statute. What is the defendants’ best defense against a
conviction?
The government of the United States and the governments of other nations have the
power to enforce their respective national laws within their borders. The power to
enforce international law within the borders of all nations rests with
A.no court or international organization.
B.the European Union.
C.the International Court of Justice.
D.the United Nations General Assembly.
Elmo pays First National Bank $1,000 plus a service fee to draw a check on itself made
payable to Go Delivery Service. This is
A.a cashier’s check.
B.a certified check.
C.a trade acceptance.
D.a traveler’s check.
EZ Equipment Corporation leases six forklifts to Fresco Refining Company, but as the
forklifts are delivered, they are lost in an explosion. Under the UCC, the parties’ rights
and obligations with respect to the loss depend on the concept of
A.physical possession.
B.product liability.
C.risk of loss.
D.title.
Magic Math Corporation makes business accounting software, which is packaged with
a shrink-wrap agreement. National Distribution Company distributes the software to
retailers, including an Office Stuff store, where Peg buys a package of it. The parties to
the shrink-wrap agreement are
A.Magic Math and National Distribution only.
B.Magic Math and Peg only.
C.Magic Math, National Distribution, Office Stuff, and Peg.
D.Office Stuff and Peg only.
To acquire the ownership of a mountain cabin by adverse possession, Cody must
occupy the cabin exclusively, continuously, and peaceably for a specified period of time
A.in an, open, hostile, and adverse manner.
B.until the owner files a suit.
C.without the owner’s knowledge.
D.with the state’s permission.
Development Associates (DA) agrees to buy five acres of land from Eastside Properties
for $15,000. Eastside sells the acreage to Fealty Realty, and fails to go through with
DA’s deal on the agreed date, when the market price of the land is $17,000. DA may
recover
A.$17,000.
B.$15,000.
C.$2,000.
D.$0.
Office Equipment Leasing, Inc. (OEL), agrees to lease five computer workstations to
Product Promotion Corporation (PPC). Before any interest in the workstations can pass
from OEL to PPC, they must be
A.in existence and identified as the goods in the contract.
B.in existence only.
C.identified as the specific goods designated in the contract only.
D.none of the choices.
Bren leases an apartment from Cris for one year. After two months, she sublets the
premises for the next six months to Dee, without obtaining Cris’s consent. Dee pays the
rent for only four months. For the last two months of Dee’s six-month term, Bren is
A.liable for the rent, because Dee defaulted.
B.liable for the rent, because the sublease lacked Cris’s consent.
C.not liable for the rent, because Bren does not own the apartment.
D.not liable for the rent, because Bren sublet the premises to Dee.