Acceptance of goods is not shown by:
a. modifying the goods.
b. payment for the goods if they are sent COD.
c. resale of the goods by the buyer.
d. use of the goods by the buyer in manufacturing other goods.
The formation of contracts in cyberspace is governed today largely by:
a. international contract law principles.
b. traditional contract law principles.
c. federal contract law principles.
d. uniform state laws.
The Sherman Antitrust Act does not prohibit:
a. a manufacturer from having a natural monopoly over its own product.
b. a seller to dominate a market because of superior product or business.
c. a manufacturer to sell only through a particular distributor.
d. all of the above.
__________ laws seek to guard against unfairness in corporate takeover situations.
a. Interceder
b. Invader
c. Raider
d. Takeover
What type of deed merely transfers whatever interest, if any, the grantor may have in
the property, without specifying that interest in any way?
a. common law
b. statutory
c. quitclaim
d. warranty
The term “exhaustion of administrative remedies” means that:
a. parties to an agency action must be diligent in pursuing their case.
b. parties to an administrative action must take their appeal to a court of law.
c. parties to an administrative action can appeal only after the agency has made a final
decision.
d. administrative agencies tend to work very hard.
Dissolution of a partnership:
a. ends the right of the partnership to exist as a going concern.
b. is followed by a winding-up period.
c. reduces the authority of the partners.
d. all of the above.
An insurer who wrongfully refuses to defend the insured is liable for:
a. breach of contract.
b. insurance fraud.
c. the tort of wrongful interference with contractual relations.
d. the tort of malicious prosecution.
A regulation adopted by a federal administrative agency is binding only if:
a. it has been printed in the Federal Register.
b. the persons affected have received copies of it.
c. the persons affected have notified the agency of their approval of the regulation.
d. publicity has been given to it by the news media.
The owner of a lost credit card is:
a. liable for all purchases made by its finder if the card was lost through negligence.
b. not liable for any purchases if the card was lost despite the exercise of reasonable
care by the cardholder.
c. liable for all purchases if the card originally had been sent to the cardholder without
any prior request and never was used by such holder.
d. not liable for more than $50 for the unauthorized use of the card.
Ordinarily, a court will __________ an agency’s decision to do nothing about a
particular complaint.
a. not reverse
b. reverse
c. remand
d. none of the above
A person who would suffer a direct pecuniary loss if a particular piece of property were
destroyed has a(n):
a. contractual risk.
b. hazard.
c. underwriting.
d. insurable interest.
Rent is automatically increased:
a. if the lessor makes expensive improvements to the property.
b. when the cost of living increases.
c. if the lease contains an escalation clause and the facts demonstrate that application of
such a clause is appropriate
d. if the lessor’s taxes on the rented property are increased.
Between experienced businesspersons, exculpatory clauses are generally:
a. voidable.
b. void.
c. valid.
d. unenforceable.
The right of an employee to pension benefits paid into a pension plan in the employee’s
name by the employer is referred to by the term:
a. venue.
b. accrual.
c. vesting.
d. investing.
A consumer who notifies the issuer of an EFT card within two (2) days after learning of
a loss or theft of the card is limited to a maximum liability of:
a. $500.
b. $50.
c. There is no liability limitation in this situation.
d. There is no liability in this situation.
Clark is the senior payroll clerk for the Gonzalez Corporation. In preparing the weekly
payroll checks for the corporation, Clark added the name of Simmons to the payroll list.
Clark knew that Simmons was not an employee of the corporation. Lewis, the treasurer
of the corporation, signed the payroll checks and delivered them to Clark. Clark
distributed all of the checks to the correct employees with the exception of the one
made payable to the order of Simmons. Clark endorsed the name of Simmons to the
check, cashed it with Diamond Check Cashing, and vanished. In this situation:
a. an endorsement was not necessary to negotiate the instrument.
b. the Gonzalez Corporation can seek recovery against Diamond Check Cashing.
c. the forged signature is given the same effect as though it had been authorized by the
named payee.
d. Clark is not subject to civil or criminal liability.
An unlawful sale under the Insider Trading Sanctions Act of 1984 can result in a civil
penalty of up to how many times the profit gained or loss avoided?
a. two (2)
b. three (3)
c. four (4)
d. five (5)
A bequest of a pearl necklace is a:
a. general legacy.
b. specific legacy.
c. specific ademption.
d. residuary ademption.
A __________ is authorized by the principal to do all acts that can be delegated
lawfully to a representative.
a. special
b. general
c. secret
d. universal
An oral contract containing a promise by an executor to pay estate debts from estate
funds is:
a. binding.
b. voidable by the executor or administrator.
c. enforceable against the executor only if the executor signs written proof of the
agreement.
d. enforceable against the other contracting party only if that party signs a written
agreement.
The agent of a disclosed principal is liable for harm caused to third persons by:
a. the fraudulent acts of the agent.
b. the malicious acts of the agent.
c. both a. and b.
d. none of the above.
The relationship of guest and hotelkeeper ends:
a. when the guest’s bill is paid.
b. when the guest advises the hotelkeeper that the guest is leaving.
c. when the guest leaves or ceases to be a transient.
d. when the guest asks to take on the more permanent status of boarder.
Article 2 of the Uniform Commercial Code applies to the sale of:
a. corporate stocks.
b. U.S. Treasury bonds.
c. goods.
d. insurance policies.
Property may be taken from its private owner and the title acquired by the taking
government or public authority under the power of:
a. a restrictive covenant.
b. eminent domain.
c. an affirmative covenant.
d. restraint.
Workers’ compensation statutes do not typically provide for:
a. immediate medical benefits.
b. prompt periodic wage replacement.
c. a death benefit.
d. punitive damages.
An agreement arises when one person, the __________, makes an offer and the other
person to whom the offer is made, the __________, accepts.
a. grantor; grantee
b. grantee; grantor
c. offeror; offeree
d. offeree; offeror
Which is not a correct statement concerning a liquidated damages clause?
a. If the clause is enforced, the injured party can collect no more than the amount
specified.
b. If the clause is enforced, the injured party has a choice between compensatory
damages or liquidated damages.
c. The amount of liquidated damages must not be excessive.
d. The amount of liquidated damages are established by the parties to the contract.
A guarantee that the grantor owns the estate conveyed is called a covenant:
a. of right to convey.
b. against encumbrances.
c. of quiet enjoyment.
d. of seisin.
In a partnership of four physicians, a decision to buy an office copier for the partnership
must be approved by:
a. all of the partners.
b. at least three of the partners.
c. at least two of the partners.
d. one partner.
Which of the following is not an example of a state penalty for violating usury law?
a. restricting the lender to the recovery of the loan but no interest whatsoever
b. allowing the lender to recover the loan principal and interest up to the maximum
contract rate
c. restricting the lender to the recovery of the loan plus seventy-fifty percent (75%) of
the interest
d. requiring the lender to pay, as a penalty, double the interest the borrower paid on a
usurious loan
A buyer in the ordinary course of business who purchases inventory goods from a
debtor who had placed a security interest on those goods in favor of a creditor:
a. is not subject to the security interest.
b. is not subject to the security interest unless it was perfected.
c. is not subject to the security interest unless the buyer was aware of it.
d. is subject to the security interest.
A secured transaction covers proceeds from the collateral unless such interest is
expressly excluded.
Only government agencies can sue for violations of an environmental protection
control.
The courts have traditionally viewed it as their responsibility to sit in judgment on the
wisdom of decisions made by corporate directors.
A gift requires intent to transfer title and delivery.
When a lease is assigned, the assignee becomes the sole obligor for rent payments, and
the original lessee is discharged from the lease.
The intent to make a gift requires an intent to transfer title at that time.
An administrative agency has the power to investigate, to require persons to appear as
witnesses, to require witnesses to produce relevant papers and records, and to bring
proceedings against those who violate the law.
Past benefits already received by a promisor cannot be consideration for a later
promise.
Under the UCC, an assignment of all the assignor’s rights under a contract generally is
held to be both an assignment of rights and a delegation of duties.
Bill decided that it was time to remodel his home. Among the features that Bill had
included in his remodeling plan was the addition of several very large picture windows.
Because of the great expense of the windows, Bill financed the cost through the
issuance of a promissory note. The manufacturer of the windows sold the promissory
note to a bank. Just after the promissory note matured, the windows began to leak
badly. Bill refused to pay on his promissory note and brought action against the
manufacturer for breach of contract. Will the bank recover on the promissory note?
Rights guaranteed in the United States Constitution are not accompanied by duties.
The general view is that although the owner of land owns the space above the land,
such ownership is entirely subject to the rights of flying aircraft, even if the aircraft
should interfere with the use of the land and represent a danger to persons or property
on the land.
A director is disqualified from taking part in corporate action with respect to a matter in
which the director has an undisclosed conflicting interest.
Debts of a corporation are not the debts of the persons running the corporation or
owning shares of stock in it.
An unlicensed insurance broker who cannot personally recover a fee because of the
absence of a license can effectively circumvent the statutory requirements by having a
friend who is a licensed broker bill for the services and collect the payment for him.