As a general rule, performing a preexisting duty is not consideration.
Answer:
If the subject matter of a proposed contract is destroyed without the knowledge of
either party after the making of an offer but before its acceptance, the offer cannot be
terminated.
Answer:
A service mark is a descriptive term that distinguishes businesses rather than their
products or services.
Answer:
A contract is implied when the parties directly state its terms at the time the contract is
formed.
Answer:
Landlords attempt to limit their liability through exculpatory clauses.
Answer:
When a person deposits money in an account at the bank, the bank no longer considers
that person the owner of the money; instead, he is a creditor of the bank.
Answer:
Even if the drawer is negligent and contributes to the alteration of a check, he cannot
be barred from claiming it as the reason that a particular check should not be charged to
his account.
Answer:
Courts will often allow a party to avoid responsibility when the party has made a
promise carelessly.
Answer:
Non-testimonial evidence such as fingerprints, hair samples, and bodily fluids can be
obtained through compulsion.
Answer:
A whole life policy may develop either a cash surrender value or a loan value, but not
both.
Answer:
If the business involves little risk or the owners have few other assets, limited liability
should be given little weight.
Answer:
If a person has been negligent in signing a negotiable instrument, he/she can use lack
of authorization as a reason for not paying the person who in good faith pays for it.
Answer:
The attachment of the security interest to the collateral automatically gives the secured
party a security interest in the proceeds of the disposal of the collateral by the debtor.
Answer:
Statutory law varies from state to state.
Answer:
Conviction of a felony can result in disenfranchisement.
Answer:
Directors and officers are not prohibited from entering into transactions with the
corporation.
Answer:
When the principal is undisclosed, the third party who deals with the agent believes the
agent is acting personally and accordingly expects the agent to be a party to the
contract.
Answer:
Which of the following statements is TRUE of the lawsuits in which minority
shareholders complain that they have been unfairly treated by the directors?
A. These suits always involve open corporations.
B. Minority shareholders will always win such suits.
C. These suits can claim a freeze-out.
D. Business judgment rule does not apply to such lawsuits.
Answer:
Which of the following is a real defense that can be used to avoid or reduce liability on
a negotiable instrument?
A. Fraud in the inducement
B. Discharge in bankruptcy
C. Breach of contract
D. Conditional issuance
Answer:
Which of the following is TRUE of a partner’s right to compensation?
A. A partner is entitled to salary or wages.
B. The partners may agree that one or more of them is to be paid a salary which will not
be deducted at the end of the year from his profits.
C. Compensation is never presumed to be the partner’s share of the profits.
D. The partners may agree that one or more of them is to be paid a salary in addition to
sharing in profits.
Answer:
Vacancies on the board can be filled:
A. only by a vote of the board.
B. only by a vote of the shareholders.
C. by appointment by the chairperson of the board.
D. by appointment by any two members of the board.
Answer:
Liability on a negotiable instrument:
A. can arise only by transfer of an instrument.
B. cannot arise from non-presentment.
C. can arise from negligence relating to the issuance.
D. cannot arise from improper payment.
Answer:
Intentional misrepresentation:
A. is otherwise known as duress.
B. requires that the misrepresentation be made by using a threat.
C. is the only element needed to prove fraud.
D. requires intent to deceive.
Answer:
When a manufacturer sells goods to retail outlets and suggests a retail price, there is no
violation of Section 1 of the Sherman Act because:
A. there is no merger of any type.
B. there is no contract, combination, or conspiracy to fix the price.
C. there is no indication of an intent to monopolize.
D. there is no exclusive dealing contract.
Answer:
Abuse of process requires:
A. that the wrongfully brought suit terminated in the defendant’s favor.
B. that there be no probable cause in order for the person wrongfully sued to win.
C. proof that the suit was brought for a primary purpose other than the one for which
such proceedings are designed.
D. proof that the suit was brought out of malice and to give a remedy for the financial,
emotional, and reputational harm caused.
Answer:
Where an agent has taken an unauthorized action:
A. the principal may not ratify the action even if it would be beneficial to the principal
to do so.
B. the principal is free to ratify the beneficial part of the unauthorized action and deny
any burdensome part of it.
C. any ratification by the principal must be for the entire action, not merely the
beneficial part.
D. the principal may ratify the action only if the principal is a corporation.
There are certain requirements for ratification. Only the entire act of the agent can be
ratified; the principal may not ratify what is beneficial and deny what is burdensome.
Answer:
When a contract is silent about the time for performance:
A. the UCC takes the same position as the common law.
B. performance must be tendered within what the buyer considers to be a reasonable
time.
C. payment for the goods is due at the time and place which the seller accepts.
D. the contract can be terminated by either party without giving any notice.
Answer:
Which of the following is an outgrowth of strict product liability?
A. Industry wide liability
B. Privity
C. Negligence
D. Product misuse
Answer:
Kent University does not have enough parking spaces to accommodate all of its
students, staff and faculty. Jeff owns a sizable plot of land just north of the campus and
has given many students oral permission to park on his land. Has Jeff created an
easement?
A. Yes, Jeff has created an easement by necessity.
B. Yes, Jeff has created a negative easement.
C. No, Jeff has created a license.
D. No, Jeff has created a tenancy at will.
Answer:
Contracts that are required to be in writing by the statute of frauds are:
A. all promises for the international sale of goods.
B. contracts transferring an interest in land.
C. contracts predicated on a condition precedent.
D. contracts for the sale of goods costing less than $500.
Answer:
The _____ theory of recovery has been used effectively against several suppliers of
peer-to-peer file sharing software that has been used to download CDs and DVDs from
the Internet.
A. contributory copyright infringement
B. vicarious copyright infringement
C. direct copyright infringement
D. indirect copyright infringement
Answer:
I.M. Handy was the sole proprietor of Handy’s Upholstery Service. Green brought
some items of furniture to Handy’s place of business and left them there for the purpose
of having them reupholstered. Handy and Green did not have any specific discussion
concerning what Handy would charge for his services. Under these circumstances:
A. a bailment for the sole benefit of the bailor was created even though the parties did
not specifically discuss compensation.
B. a bailment for mutual benefit was created which entitles Handy to compensation
from Green for the reasonable value of his services.
C. a bailment was not created and hence, Handy is not liable to any payment.
D. a bailment was created only for the storage of property for which Handy is entitled
only to storage services.
Answer:
The partners’ rights in partnership property, as tenants in partnership, entitle them to:
A. sell any item of property if its value does not exceed their share of the assets of the
partnership.
B. take possession of any item of partnership property for partnership purposes only.
C. take possession of any item of partnership property for personal purposes if its value
does not exceed their share of the assets of the partnership.
D. devise to an heir any individual item of the firm’s property.
Answer:
Commercial speech, under the First Amendment, is:
A. subject to intermediate scrutiny unlike political speech.
B. completely suppressed regardless of it being misleading or truthful.
C. subject to strict scrutiny just like political speech.
D. completely unregulated unless it is put in writing.
Answer:
Mr. Burns filed a case against Mr. Johnson in the court at Ohio. However, Mr. Johnson
had never visited Ohio, nor had any personal ties with anyone in Ohio. Mr. Johnson
could defend the case on the basis that the court:
A. lacked personal jurisdiction.
B. was not in proximity to the place where Mr. Johnson resides.
C. was limited by subject matter jurisdiction.
D. did not have judges that would understand the language spoken by him.
Answer:
A seller may resell the goods when:
A. the buyer breaches the contract and the seller has possession of the goods.
B. the seller breaches the contract and the seller has possession of the goods.
C. neither party breaches the contract, but the seller thinks he can make a higher profit
upon resale.
D. the seller is sure that the buyer is going to breach the contract.
Answer:
The _____ binds the corporation on receipts, checks, and endorsements.
A. chairman
B. vice president
C. corporate secretary
D. treasurer
Answer: