How is ‘sovereign immunity” interpreted under U.S. law today?
a. It gives absolute immunity to a foreign nation from all U.S. laws.
b. It gives immunity to foreign governments for commercial activity carried on in the
U.S. by the foreign government.
c. It exempts the public acts of a foreign government, such as those involving
diplomatic activity, from all U.S. laws.
d. All of the above.
The rule of reason test, under the Sherman Antitrust Act:
a. considers the makeup of a relevant industry.
b. does not consider the defendant’s position in that industry.
c. considers the defendant’s need for the financial gain from the restraint of trade.
d. does not consider competitor’s ability to respond to the challenged practice of
restraint of trade.
Which of the following is least likely to be classified as a necessary for which a minor
will be held liable on a contract?
a. A television.
b. School supplies.
c. Clothing.
d. An automobile.
Which of the following are the most usual covenants to convey title of realty?
a. Covenant of title.
b. Covenant against encumbrances.
c. Quiet enjoyment.
d. All of the above.
Morris interviewed for a job as plant manager at Northland Bearings and was offered a
two-year contract if she could relocate and start the new job within three weeks. Morris
agreed. Northland promised to follow up the oral agreement with a written contract
setting forth all the agreed terms, but the contract had not arrived within several days.
Morris wanted to give two-weeks’ notice to her present employer, so she called
Northland to check on the written contract and was told it was ready to be sent to her
and assured her the job was hers. She gave notice of her intention to quit her present job
and moved two states away to the Northland location. When Morris arrived for her first
day of work, she was told someone else with better qualifications had been found and
hired for the position. Morris:
a. has no recourse since she never received a written contract, as required by the statute
of frauds for a contract that cannot be performed within one year of its making.
b. has no recourse because promises are not enforceable if they do not meet all the
requirements of a contract, and here Morris lacked capacity.
c. may be entitled to good-faith reliance damages under the doctrine of promissory
estoppel to avoid injustice.
d. cannot enforce the contract since she had not actually started working at Northland.
Match each statement with the correct term below.
a) An order to pay a fixed sum of money, signed by a drawer, payable on demand or at a
definite time.
b) A specialized form of draft; an order to pay money drawn on a bank and payable on
demand.
c) Legal concept that makes written instruments freely transferable and therefore a
readily accepted substitute for money.
D) An instrument that is payable to the possessor; a check that is made payable to cash
or that is indorsed in blank.
e) A person who is in possession of an instrument drawn, issued, or indorsed to him or
to his order, or to bearer or in blank.
f) An indorsement that specifies no indorsee and may consist of merely the signature of
the indorser or her authorized agent.
g) Issuer of a promissory note or CD.
h) A written acknowledgement by a bank of the receipt of money that it promises to
repay; a specialized form of promise to pay money that is given by a bank.
i) A person or organization to whom a draft is directed and who is ordered to pay the
amount of money specified therein; the bank on which a check is drawn.
j) Issuer of a check or draft; the person on whose account a draft is drawn.
k) An indorsement that attempts to limit the rights of the indorsee in some fashion.
l) Signature that identifies an indorsee to be paid; makes the instrument order paper.
m) The person to receive payment by an instrument..
n) Defenses to liability on a negotiable instrument which are good against holders
unless they are holders in due course.
o) An instrument involving two parties, one of whom promises to pay the second a
stated sum of money either on demand or at a stated future date.
p) Person who signs an instrument to lend her credit to another party to the instrument.
q) The transferee of an instrument acquires the same rights in the instrument as the
transferor had.
r) Acceptance of a check by a bank.
s) Drawee which agrees to become primarily liable on a draft.
t) An instrument that requires both transfer of its possession and indorsement by the
appropriate parties for the transferee to become a holder.
u) Defenses good against all holders, including holders in due course.
1) negotiability
2) bearer paper
3) certificate of deposit
4) check
5) blank indorsement
6) restrictive indorsement
7) draft
8) drawee
9) drawer
10) holder
11) maker
12) special indorsement
13) payee
14) promissory note
15) accommodation party
16) shelter rule
17) personal defenses
18) real defenses
19) order paper
20) certification
21) acceptor
If Jim, Ken, and Lee each deposit 10,000 bushels of wheat in a grain elevator, they
would own one-third of the mixture by:
a. accession.
b. adverse possession.
c. prescription.
d. confusion.
The Supreme Court interprets the Commerce Clause:
a. narrowly.
b. as granting virtually complete power to Congress to regulate the economy.
c. as restricting Congress to the coining of money and taxation.
d. to mean that the Court may invalidate legislation enacted by Congress when the
activity affects the individual states’ regulation of their own role in interstate commerce.
An agent is NOT required to keep which of the following information confidential?
a. Unique business methods.
b. Customer lists.
c. Information that his or her principal is engaged in criminal activity.
d. Business plans.
Which of the following is characteristic of an executive administrative agency?
a. It has complete independence from the president.
b. It deals only with executives of major corporations.
c. It is housed within the executive branch of the government.
d. It has complete independence from Congress.
Which of the following would generally be considered to be a revenue-raising licensing
law?
a. A statute requiring that doctors be licensed.
b. A statute requiring that salespeople be licensed, but not establishing any educational
or training requirements.
c. A statute requiring public school teachers to be licensed.
d. A statute that requires insurance agents to pass a test before selling insurance in a
state.
Divided Parcel (DP) includes the following on its mailing receipts: “We are not
responsible for any damages to packages whether or not through the intentional or
reckless fault or negligence of our employees. Send packages at your own risk.” Mary
reads this clause but sends her watch back to the manufacturer to be repaired anyway.
The watch is destroyed when the DP driver uses the package for a ball and tosses it to
his buddy. Mary is:
a. out of luck because the clause was communicated to her.
b. out of luck because she should have insured the package.
c. likely to collect from DP since exculpatory clauses always violate public policy.
d. likely to collect from DP because it attempted to excuse intentional and reckless
behavior.
In DiLorenzo v. Valve and Primer Corporation, the court held:
a. DiLorenzo gave consideration for the stock option.
b. Valve & Primer conditioned the alleged stock option on DiLorenzo’s promise to
remain in its employment.
c. promissory estoppel applied because there was detrimental reliance on DiLorenzo’s
part.
d. there was no consideration for the stock option, and promissory estoppel did not
apply because detrimental reliance was not proven.
Scott buys a television set from Joe’s TV Store, giving Joe a check for $450. Joe uses a
special indorsement and negotiates the check to Tom. Tom carefully changes the
amount to read $1450 and loses the check on the way to the bank. Harry picks it up and
tries to cash it. What will he get?
a. Scott will have to pay him $450.
b. Joe will have to pay him $450.
c. Tom will have to pay him $1450.
d. No one will have to pay Harry.
Jane, Kelly, and Lois are partners in an accounting firm, but Jane intends to retire and
withdraw from the partnership at the end of the year. Under the RUPA, Jane:
a. has the power to bind the partnership for a partnership obligation incurred within two
years after dissociation if the partnership did not dissolve and if at the time of entering
into the transaction the other party reasonably believed Jane was then a partner.
b. is liable only for all debts incurred prior to her retirement.
c. is liable to the firm’s creditors until the day of her retirement when she will be
absolved of all liability.
d. is liable to the firm’s creditors for an amount not to exceed her partnership interest on
the day of her retirement.
e. is liable to the firm’s creditors for an amount not to exceed her initial capital
contribution to the partnership.
The buyer’s incidental damages resulting from the seller’s breach include:
a. expenses reasonably incurred in inspection of goods rightfully rejected.
b. any commercially reasonable charges or commissions in connection with obtaining
cover.
c. any reasonable expenses connected to the delay.
d. All of the above
Howard ordered an aluminum storm door for $249.99. Before it was delivered, the
same store from which he ordered the door ran an ad in the paper for the same storm
door for $179.99. Howard called the store and demanded the advertised price. They say
okay.
a. Howard must pay $179.99.
b. Howard must pay $249.99.
c. There is no contract.
d. There is a contract for the reasonable value of the door.
Rights under an option contract are assignable.
Historically, an accountant’s liability for negligence extended to the client and third
party beneficiaries.
A bank may pay a check after the death of its customer for ten days following the date
of his death unless a person claiming an interest in the account orders the bank to stop
making such payments.
The drawee is the individual who signs a check and promises to pay.
Discuss the various means by which states have limited the punitive damages a plaintiff
can collect in a product liability lawsuit.
Substituted contracts immediately discharge the original contracts.
The purpose of Article 2 of the UCC is to modernize, clarify, simplify, and make
uniform the law of sales.
A primary reason for requiring a surety is to reduce the creditor’s risk of loss.
Specific performance is the usual remedy for breach of contract.