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1) in deciding whether consideration necessary to form a contract exists, a court must
determine whether:
a.the consideration given by each party is of roughly equal value.
b.the consideration conforms to the subjective intent of the parties.
c.the consideration has sufficient monetary value.
d.there is mutuality of consideration.
2) a(n) ______ shields the author of a defamatory statement regardless of his/her
knowledge, motive, or intent.
a.demurrer
b.transferred intent
c.intentional tort
d.absolute privilege
3) sellers of goods sometimes attempt to disclaim (avoid) their liability under
warranties. which type of warranty disclaimers must be written in order to be effective?
a.disclaimers of industrywide liabilities.
b.disclaimers of the warranty of fitness for a particular purpose.
c.disclaimers of the warranty of the magnuson-moss act.
d.disclaimers of the warranty of strict liability.
4) which of the following is true regarding an exculpatory clause?
a.it is illegal in nature.
b.it is also termed a release.
c.it is invalid in negligence cases.
d.it imposes strict liability on the guilty party.
5) a sellers ability to disclaim implied warranties is sometimes restricted by the doctrine
of:
a.unconscionability.
b.remedy limitation.
c.no-privity.
d.commercial impracticability.
6) toby and roy are car dealers; toby makes a deal with roy to sell a 1978 buick.
however, they failed to reach any agreement regarding the price of the car and decided
to leave the matter to a future date to be decided once toby delivers the car. which of the
following is true about this deal?
a.according to the code, a reasonable price will be put on delivery.
b.according to the common law, this contract is definite and legal.
c.according to the common law, roy can sue toby.
d.according to the code, it is an illegal contract due to absence of intent.
7) sarah is hiking in the clearwater national forest and her wristwatch falls off her wrist.
sarah does not notice this, and the watch falls onto the trail. later, hans finds the watch.
how may this watch best be described?
a.lost property
b.mislaid property
c.abandoned property
d.bailment property
8) if a third party deals with a person who appears to be the partner of another person,
and the third party is harmed, it may recover damages under:
a.the doctrine of purported partners.
b.the general law for joint ventures.
c.the doctrine of direct liability.
d.the doctrine of respondeat superior.
9) joe buys a bottle of coca-cola. when joe spots a needle inside the bottle, his buddies
dare him to drink the coke. after doing so, joe suffers physical injury as the needle
sticks in his throat. joe sues coke under section 402a; coke defends by arguing
assumption of risk on joes part. transylvania court, however, has eliminated assumption
of risk as a separate defense in product liability cases. instead, it has a comparative fault
statute just like the statute in the jimenez case in the text. under that statute, what is the
result of joes lawsuit and why? assume that coke would be liable under section 402a.
10) qt inc., is incorporated in alabama, has offices in nebraska, has a manufacturing
plant in delaware, and conducts most of its sales from virginia. regulation of its internal
affairs will be exercised only by:
a.alabama.
b.nebraska.
c.delaware.
d.virginia.
11) the owner of a theatre negligently failed to install the requisite number of
emergency exit. during the show of shakespeares macbeth, one of the intoxicated
viewers got carried away and burned himself. the entire hall was ablaze. there was only
one emergency exit. thus many people were killed in the stampede. will the theatre
owner be liable for negligence?
a.no, because the intervening cause of an intoxicated viewer burning himself absolves
the theatre owners liability.
b.no, because the viewers reaction was completely unforeseeable by any reasonable
man of ordinary prudence.
c.yes, because the harm was foreseeable and the owner cannot escape his liability.
d.yes, because though the harm was unforeseeable, the owner still cannot escape his
breach of duty.
12) in order to create an easement by prescription a person must, in addition to fulfilling
other requirements, have:
a.recorded the easement immediately upon its creation.
b.received the express or implied consent of the true owner.
c.used the land of another out of necessity.
d.used the land of another openly, continuously, and adverse to the owners rights.
an easement by prescription is created when one person uses anothers land specified by
state statute.
13) ted is the president of soprano corporation (sc). ted decided to have sc manufacture
large, gas-guzzling suv automobiles just before gasoline prices rose dramatically. as a
result, sc lost billions of dollars. the shareholders of sc want to sue ted for this bad
decision that cost them billions. however, ted had made a reasonable investigation
before making this decision, he had a rational basis for it, and he had no conflicts of
interest regarding this decision. what would be the probable outcome if the shareholders
file a suit?
a.ted is liable under the vicarious liability rule.
b.ted is liable under the ultra vires rule.
c.ted is not liable under the business judgment rule.
d.ted is not liable under the corporate protection rule.
14) because the articles of incorporation embody the basic contract between a
corporation and its shareholders, shareholders must approve most changes in the
articles. which of the following is an example of such changes in the article?
a.place of shareholder meeting
b.increase in the number of authorized shares
c.amount of annual dividend
d.date of shareholder meeting
15) under the common law, an offer for a unilateral contract:
a.is accepted by full performance of the act requested by the offer.
b.is accepted either by an appropriate act or an appropriate promise.
c.is accepted by whatever means are reasonable under the circumstances.
d.is accepted by making the promise requested by the offer.
16) which of the following serves as constructive notification of the termination of an
agents apparent authority?
a.a direct personal statement to the third party
b.the death of the principal
c.a writing delivered personally or to the third partys place of business
d.advertising the agencys termination in a newspaper
17) _____ voting allows a majority shareholder to elect the entire board of directors.
a.preference
b.cumulative
c.ranked
d.straight
