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Which of the following implied warranties is created when the buyer relies on the seller
to pick out the goods that the buyer requires to meet a stated need?
a. conformity to description
b. Merchantability
c. fitness for a particular purpose
d. conformity to a sample or model
Payment to an authorized agent is:
a. payment to the principal only if the agent remits the payment.
b. payment to the principal if the third person informs the principal.
c. payment to the principal, provided the agent does not misappropriate the payment.
d. payment to the principal.
If an agency causes a substantial loss to a business by enforcement of its laws, that
business:
a. always can hold the agency liable for damages.
b. never can hold the agency liable for damages.
c. may seek damages if the agency acted in bad faith.
d. may seek damages if the agency complied with its own guidelines.
The transferring of an instrument in such a way as to make the transferee the holder of
the paper is termed:
a. an assignment.
b. a conversion.
c. a sale.
d. a negotiation.
Contracts in cyberspace:
a. are formed as a result of the desire for speed.
b. are formed using purchase orders and invoices submitted via computer.
c. require both an offer and an acceptance.
d. all of the above.
Which of the following statements is correct concerning a stale check?
a. A check is stale when dated more than six (6) months before presentation to the bank.
b. Banks are required to pay stale checks unless a stop payment order has been issued.
c. Both a. and b.
d. None of the above.
The United States Supreme Court was created by:
a. Congress.
b. the President.
c. the Uniform State Law Commission.
d. none of the above.
Management of an LLC is vested in its:
a. members
b. partners
c. shareholders
d. managers
The Immigration Reform and Control Act of 1986 (IRCA) sets forth what types of
penalties against employers who knowingly hire aliens who have illegally entered the
United States?
a. criminal
b. civil
c. both criminal and civil
d. neither criminal nor civil
The "living€ Constitution has which of the following characteristics?
a. strong federal government
b. strong president
c. various administrative agencies with significant power
d. all of the above
A third person who deals with a person claiming to be an agent:
a. can rely on the statements made by the agent regarding the extent of the authority.
b. cannot ignore any knowledge regarding a limitation of the agent€s authority.
c. is not required to take notice of any acts clearly adverse to the interest of the
principal.
d. all of the above.
When a U.S. trademark holder licenses a foreign business use of its trademark overseas
and a third party imports these goods into the United States to compete against the U.S.
manufacturer's goods, the foreign-made goods are called __________ goods.
a. "gray market"
b. counterfeit.
c. specially-licensed.
d. dumped goods.
The privity rule:
a. allows for an accountant€s client to recover from an accountant in a negligence
malpractice suit.
b. allows for a third part to recover from an accountant in a negligence malpractice suit.
c. both a. and b.
d. neither a. nor b.
A qualified indorsement is given by using the phrase __________.
a. "as is"
b. "without recourse"
c. "with all faults"
d. "buyer beware"
Bankruptcy results in a discharge of contractual obligations by __________.
a. default
b. equity
c. operation of law
d. oath or affirmation
Jeff purchased in good faith a warehouse receipt for 1,000 pairs of running shoes
without notice of any defense to it, for value, and in the regular course of his business.
Unknown to Jeff, the goods had been stolen from Jane and delivered to the warehouse
that issued the receipt purchased by Jeff. Which of the following statements is true?
a. Jeff holds a duly negotiated document of title and is not subject to Jane's title.
b. Jane is entitled to the goods and will prevail over Jeff.
c. Jeff is not a holder of a duly negotiated document.
d. Jane cannot recover the goods but can sue the warehouse for conversion.
The law could best be described as:
a. only statutory in nature.
b. only the creation of our courts.
c. a collection of rights.
d. none of the above.
The implied warranties of an unqualified indorser do not include a guarantee that:
a. payment of the instrument will be made.
b. the account of the drawer in the drawee bank contains funds sufficient to cover the
check.
c. both a. and b.
d. neither a. nor b.
When a court finds a clause of a contract unconscionable at the time it was made, it
may enforce the remainder of the contract.
Franklin, a hobby-shop supplier, and Gordon, a hobby-shop owner, entered into a
contract that provided that Franklin would sell Gordon fifty World War II battleship
models at Franklin's cost of $2.95 each, plus a reasonable profit. Gordon brought suit to
enforce the contract against Franklin, who refused to deliver the models. Franklin
claimed that there was no contract because of indefiniteness. Is Franklin correct?
A bank always is liable to the depositor on a counterfeit check that the bank has paid.
Nelson took her computer to ABC Computer for repairs. ABC repaired the computer at
a cost of $350 and informed Nelson that her computer was ready. Before Nelson came
to pick up her computer, ABC was burglarized and Nelson's computer was taken. ABC
had a commonly-used alarm system that was operating properly on the night of the
burglary, and all the doors and windows were properly secured. Nelson sued ABC for
the cost of the computer. ABC denied any liability and counterclaimed for the $350 in
repairs. Who will win?
When one party commits a non-material breach of contract, the other party may rescind
the contract.
Damages recoverable in a case of promissory estoppel are determined by the profits that
the promisee expected.
Self-help repossession of collateral upon a buyer's default is contrary to public policy
and never is allowed.
The theories of product liability are mutually exclusive.
All types of patents available under U.S. law are entitled to the same quality and
duration of protection once initial filing is perfected with the Patent and Trademark
Office in Washington, D.C.
