Any action for breach of a sales contract must be begun within:
a. four years after the cause of action accrued. b. five years after the cause of action
accrued.
c. whatever period of time the parties have set in their contract.
d. two years of when the breach actually occurred or within five years of its discovery.
Individuals may use reasonable force to protect themselves, their property, and other
individuals. In this context, reasonable force would mean:
a. deadly force is reasonable to protect property.
b. deadly force is never reasonable to protect property, but is reasonable if an attack
threatens the victim with serious bodily harm.
c. deadly force is never reasonable, even if an attack threatens the victim with serious
bodily harm.
d. deadly force is reasonable to protect property or if an attack threatens the victim with
serious bodily harm.
Henry was burning leaves in his backyard. One of the burning leaves was lifted by the
wind into Emilio’s yard next door. It landed on the lawn mower which exploded, setting
fire to the wooden lawn furniture. Henry’s best argument against liability would be:
a. that the leaf was not a substantial factor in causing the damage.
b. resipsaloquitur.
c. that it was not foreseeable that the lawn mower would explode.
d. that the damage was not caused by the leaf but by the gasoline.
The difference between common and preferred stock is that the latter is a debt
instrument, whereas the former represents an equity interest in the company.
a. True
b. False
Rights represented by a stock certificate or a promissory note are examples of
intangible property.
a. True
b. False
The anthropology department of Towers University is doing an excavation on property
that belongs to Farmer Brown. If in the process of excavation the university finds some
valuable lost items, they will belong to Farmer Brown and not to the university.
a. True
b. False
The Reform Act provides a safe harbor eliminating civil liability if a forward-looking
statement is:
a. material.
b. made with the assumption that it was not false or misleading.
c. identified as a forward-looking statement and is accompanied by meaningful
cautionary statements.
d. made in connection with an initial public offering or a tender offer.
Check 21 permits banks to remove an original paper check from the check collection
process and send instead a substitute check.
a. True
b. False
The National Labor Relations Act is also known as the:
a. Taft-Hartley Act.
b. Wagner Act.
c. Landrum-Griffin Act.
d. Norris-La Guardia Act.
Marilyn brought her $300 silk dress to University Dry Cleaners to be cleaned. On the
back of the ticket she received in exchange for the dress was written, “liability limited
to five times the cost of cleaning.” Marilyn’s dress was lost and University now claims
it owes her only $45, five times the cost of cleaning. Is that true?
a. No, because Marilyn is not a bailor.
b. No, because the cleaner is not a common carrier.
c. No, because the limitation was not communicated to her before she bailed the
property.
d. Yes, because the cleaner had the right to limit its liability to a reasonable amount.
Howard needs a truck to pull a 2,000-pound trailer. Gordon tells Howard, “My truck
will pull a 2,000-pound trailer with ease.” Relying on Gordon’s statement, Howard buys
the truck, but it will not pull a 2,000-pound trailer. If Gordon did not intend to deceive
and Howard sues for nonfraudulent misrepresentation, he can recover:
a. punitive damages, but not out-of-pocket damages.
b. out-of-pocket and consequential damages, but not punitive damages.
c. out-of-pocket damages plus punitive damages.
d. nominal damages, because Howard should have known the capacity of the truck.
A promoter is personally liable on contracts made by him in the name of the unformed
corporation:
a. even if the corporation adopts the contract.
b. only until the corporation is formed.
c. if the promoter, the third party, and the corporation enter into a novation substituting
the corporation for the promoter.
d. only if the corporation is never formed.
Michelle’s Boutique places an ad in the Sunday paper for beautiful, top-of-the-line
designer suits for $3.00 each.
Irene sees the ad in the paper and goes to the store to stock up on business suits for her
new job. Michelle apologizes for the misprint. Irene has just finished a class in contract
law and insists that the store sell her five suits for $15.00. Irene threatens to sue
Michelle for breach of contract. In this case:
a. Irene will win if she sues because this is a valid contract.
b. the ad in the newspaper is an offer to sell.
c. the ad in the newspaper is a solicitation seeking offers, but is not an offer to sell;
therefore, Irene will not be able to successfully sue for breach of contract.
d. None of these.
Under the Fair Credit Billing Act, if a consumer makes a complaint about the amount
on his charge account bill, the store can:
a. immediately bar the customer from any further credit purchases.
b. report the unpaid amount to a credit-reporting agency as delinquent.
c. refer the matter to a collection agency for immediate collection.
d. None of these.
Statements in advertisements and catalogs do not constitute express warranties.
a. True
b. False
If a holder presents a note for payment to the maker, which one of the following
warranties is given?
a. All indorsements are genuine.
b. All signatures are genuine.
c. Holder has no knowledge that any indorsements are forged.
d. Holder is entitled to enforce the note or is authorized to obtain payment on behalf of
the person entitled to enforce the note.
Accountants authorized under federal law to practice before the IRS have the privilege
of confidentiality for tax advice given to their client-taxpayers with respect to Internal
Revenue Code matters.
a. True
b. False
The elements of adverse possession include:
a. open, constructive, and with permission of the true owner.
b. open, visible, under color of title, and with permission of the true owner.
c. secretive, invisible, hostile, and under claim of right.
d. continuous for the statutory period, open, actual, and adverse.
A transaction involving real estate whereby one party deposits a deed or money with a
third party who holds the deed or funds until the happening of an agreed-upon event is
called a(n):
a. adverse possession.
b. escrow.
c. foreclosure.
d. abstract of title.
Under the Third Restatement of Torts, if the plaintiff is a veterinarian who accepts for
treatment a dog from the defendant:
a. the defendant is strictly liable if the dog is abnormally dangerous and it bites the
plaintiff.
b. the plaintiff, if charging a fee, is beyond the scope of strict liability, even if the dog is
abnormally dangerous.
c. the doctrine of implied voluntary assumption of risk applies.
d. the defendant is strictly liable for any damage to the plaintiff whether or not the dog
is considered abnormally dangerous.
What reported warranty problems caused Congress to enact the Magnuson-Moss
Warranty Act?
a. Most warranties were not understandable.
b. Most warrantors disclaimed implied warranties.
c. The warrantors did not live up to their warranties.
d. All of these.
Under the UPA, after all the partnership’s creditors have been paid, each partner is
entitled to repayment of his capital contribution upon termination of the firm.
a. True
b. False
Lemon laws are generally understood to be laws that:
a. apply to the safety of food additives for fruits and vegetables.
b. are federal legislation designed specifically to protect state consumers from
fraudulent car manufacturers.
c. are state laws that attempt to provide new car purchasers with rights that are similar
to full warranties under the Magnuson-Moss Act.
d. are interstate compacts to uniformly deal with lemon cars.
A limited partnership agreement may notprovide that limited partners have the right to
vote on matters as a separate class from the general partners.
a. True
b. False
The federal Truth-in-Lending law:
a. requires the lender to show how much profit is made on a particular sale.
b. regulates the maximum cost of credit.
c. is a uniform law made available to all states, like the UCC.
d. is intended to allow comparison of various credit offers or advertisements.
False statements in a certificate of limited partnership or in an amendment to the
certificate that cause loss to third parties who rely on the statements may result in
liability for the general partners.
a. True
b. False
The debtor alone decides upon the reorganization plan in Chapter 11 proceedings.
a. True
b. False
Disparagement differs from defamation in that defamation pertains to personal
reputation, whereas disparagement pertains to economic interests.
a. True
b. False
Boycotts that are in violation of the Sherman Act include:
a. a seller’s refusal to deal with any particular buyer.
b. a manufacturer who refuses to sell to a retailer who persists in selling below the
manufacturer’s suggested retail price.
c. when two or more firms that have market power agree not to deal with a third party,
thereby eliminating competition.
d. cooperative agreements designed to increase economic efficiency and render markets
more competitive.
The process of liquidation of a partnership is also known as “winding up.”
a. True
b. False
A design patent:
a. has a duration of 14 years.
b. protects the ornamental designs for manufactured products.
c. requires a showing of novelty, ornamentality, and nonobviousness.
d. All of these.
The Revised Act takes the position that consolidations are, for all practical purposes,
obsolete.
a. True
b. False
The more narrowly that a product market is defined as being, the more likely that the
firm will be found to possess monopoly power.
a. True
b. False