When supervisors seek sexual favors in return for job benefits, the practice is called:
a. tangible employment action sexual harassment.
b. hostile work environment sexual harassment.
c. res ipsa loquitur sexual harassment.
d. none of the above.
A corporation or group of investors may seek to acquire control of another corporation
by offering cash for all of its shares made available for sale by a certain date. This
action is called a(n):
a. cash tender offer.
b. stock redemption offer.
c. stock reclamation offer.
d. offer for value.
An accountant guilty of malpractice can be sued:
a. for breach of contract only.
b. for negligence only.
c. for breach of contract or for tort liability.
d. in federal court only if the suit is brought by a third person.
In which case will performance on the exact date specified in the contract most likely
be deemed essential?
a. a sale of goods that fluctuate rapidly in value.
b. a sale of goods that remain stable in value.
c. a sale of real estate.
d. a sale of goods where no harm results from a delay in performance.
An offer of a reward for the arrest and conviction of a criminal is an example of a:
a. unilateral contract.
b. bilateral contract.
c. quasi contract.
d. formal contract.
Each limited partner in a limited partnership is entitled to which of the following?
a. A share of the profits.
b. The right to sue the general partner to protect the limited partners’ interest.
c. Both a. and b.
d. Neither a. nor b.
A contract of record is also referred to as a:
a. recognizance.
b. reconnaissance.
c. recording contract.
d. none of the above.
The __________ rule allows management immunity from liability for corporate acts
where there is a reasonable indication that the acts were made in good faith and with
due care.
a. sovereign immunity
b. business judgment
c. reasonable director
d. good faith
Additional terms in acceptance of an offer for non-merchants:
a. automatically result in rejection of the offer.
b. forms a contract based on the original offer
c. forms a contract that includes the additional terms.
d. none of the above.
When the indorser merely signs a negotiable instrument, the indorsement is called a
__________ indorsement.
a. special
b. qualified
c. blank
d. restrictive
The registration process under Section 5 of the 1933 act is divided into three time
periods. In order, they are:
a. waiting, prefiling, and posteffective.
b. waiting, prefiling, and executory.
c. prefiling, waiting, and posteffective.
d. prefiling, executory, and posteffective.
An agreement or provision in an agreement that one party shall not be held liable for
loss is:
a. contribution.
b. exoneration.
c. indemnity.
d. subrogation.
Holders of automobile dealership franchises are protected from bad faith termination of
their dealerships by the:
a. Sherman Antitrust Act.
b. Robinson-Patman Franchise Act.
c. Automobile Dealers’ Day in Court Act.
d. Franchise Holder Protection Act.
If a buyer procures the same or similar goods as those involved in the sales contract
breached by the seller, the buyer:
a. loses all rights to prosecute for breach.
b. is said to have validated the seller’s action.
c. is said to have covered.
d. is also in breach.
If a negotiable order instrument is transferred to another party without an indorsement,
the instrument has been:
a. assigned.
b. negotiated.
c. obtained by fraud, and is therefore invalid.
d. obtained by fraud, but may be ratified.
Contractual capacity is the ability to:
a. read and write.
b. sign a written contract.
c. understand that a contract is being made and to understand its general nature.
d. understand the legal meaning of the contract being made.
An agent’s implied authority to perform any act reasonably necessary to execute express
authority is called __________ authority.
a. express
b. customary
c. apparent
d. incidental
When a person is authorized by the principal to transact all affairs in connection with a
particular type of business or trade or to transact all business at a certain place, that
person is a __________ agent.
a. general
b. perfected
c. special
d. universal
The Equal Pay Act:
a. does not allow variances in wages pursuant to a seniority system.
b. generally requires that members of both sexes be paid equally for equal work.
c. prohibits all variations in wage rates paid to men and women.
d. all of the above.
What is not a correct statement concerning consumer protection legislation?
a. It prohibits the consumer from suing in his or her own right and gives the right to sue
solely to an agency or to the attorney general.
b. It recognizes that the theoretical right of the consumer to sue may be of little practical
value.
c. It provides special remedies.
d. It provides certain agencies to police statutes passed to aid consumers.
Pursuant to the CARD Act of 2009, all credit card companies must have bills in
consumers’ hands not less than __________ before the bill is due.
a. seven (7) days
b. fourteen (14) days
c. twenty-one (21) days
d. thirty (30) days
Repeated breaches and waivers are generally interpreted to indicate:
a. poor business practices.
b. illegal behavior.
c. ignorance of the law.
d. modification of contract.
Under the Uniform Commercial Code (UCC), a firm offer applies to:
a. a written, signed offer by a merchant to buy or sell goods.
b. an unwritten but definite offer to buy or sell goods.
c. a written, signed offer by anyone to buy or sell goods.
d. an unlimited, stipulated period of time.
The obligation of a cosigner is discharged by:
a. the minority status of one of the parties.
b. the majority status of one of the parties.
c. the court’s declaration of the contract’s provision of necessaries.
d. the payment of the debt.
The due process clause:
a. allows the U.S. government to take private property without due process.
b. allows a state to take private property without due process.
c. provides a guarantee of protection against loss of rights or property without the
chance to be heard.
d. does not apply to state governments.
A durable power of attorney may be terminated by:
a. revocation by a competent principal.
b. the death of the principal.
c. revocation by a competent principal or by the death of the principal.
d. none of the above, since a “durable” power of attorney is designed by law to be
irrevocable under all circumstances.
Consideration is not required in:
a. contracts for the sale of goods.
b. employment contracts.
c. agreements to modify employment contracts.
d. agreements to modify contracts for the sale of goods.
Philip Laws leased an apartment from Candice Sutton. Laws had notified Sutton on
more than one occasion that the wooden steps to his apartment were decaying and in
need of repair. Laws claimed that he had to leave the outside light on to avoid portions
of the steps that no longer would bear his weight when he came in at night. Sutton
promised to repair the steps while Laws was away on a business trip. Accordingly,
Laws did not leave lights on during his absence. When he returned three nights later,
Laws was injured when one of the steps broke under his weight as he was entering his
apartment. Laws sued Sutton. Sutton replied that she should not bear liability for Laws’
injury because Laws knew of the condition of the steps and had not taken the customary
precaution of lighting the area. Based on what you have learned in this chapter, decide
the case.
__________ goods are goods that, when mixed together, are indistinguishable.
a. Tangible
b. Intangible
c. Heterogeneous
d. Fungible
Which of the following agreements represent(s) an unreasonable restraint of trade?
a. a combination to create a monopoly
b. an agreement to obtain a “corner” on a market
c. an association of merchants to increase prices
d. all of the above
What is not part of the presumptions of the business judgment rule concerning
directors?
a. that the decision they reached was profitable to the corporation
b. that they acted on an informed basis
c. that they acted in good faith
d. that they acted in the honest belief that the action taken was in the best interest of the
corporation
A third person to whom a joint tenant’s interest is transferred becomes a:
a. joint tenant.
b. cotenant.
c. tenant in common.
d. tenant by the entirety.
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.
Acceptance of an offer to form a unilateral contract need not be communicated to the
offeror to be effective.
The primary party on a draft is the drawee, assuming that the drawee has accepted the
draft.
Due process includes the right to be heard, question witnesses, and present evidence.
Differences among businesses preclude the development of any universal categories of
ethical behavior.
The subterranean lending market makes loans to consumers who have bankruptcies, no
credit history, low-to-moderate incomes, or a poor credit history.
One of the characteristics of the “living” Constitution is limited government.
If a contract contains a delivery term of FOB place of shipment, the seller’s obligation
under the contract is to deliver the goods to a carrier for shipment.
Bad faith sometimes exists just because a transferee takes an instrument under odd
circumstances.
In the United States today, we generally have one law court and one equity court.
Officers and directors are not personally responsible for crimes they have committed
when it can be demonstrated that in carrying out such crimes, they acted on behalf of
the corporation.
Inference occurs when a landlord prevents a tenant from accessing the property.
Generally, a bailment agreement does not contain all the elements of a contract.
A trustee may keep all matters associated with the trust secret.
The intent to make a gift requires an intent to transfer title at that time.
Unincorporated associations are generally formed to further a common purpose.
Bob Brown entered the Hotel Lux to attend a conference being held within the hotel.
Sam Smith arrived to attend the same conference, registered at the front desk, and
obtained a room. Sally Jones also intended to participate in the conference and was in
essence living at the hotel at the time. What relationship exists between the hotel and
each of these individuals? What can be said of the hotel’s obligations to each individual
under these circumstances?
An unrecorded mortgage is not valid and binding between the parties.
The aim of consumer protection legislation is to protect persons of limited means and
limited knowledge.
When a negotiable instrument is transferred by negotiation, the transferee is recognized
as the holder of the paper.
A cooperative consists of a group of two (2) or more independent persons or enterprises
that cooperate for a common objective or function.