Which of the following statements is true?
a. The assignee acquires the same rights as the assignor.
b. The right to work for someone cannot be assigned without permission.
c. An assignment usually requires no special form.
d. All of these.
Which statement made by a salesperson as an inducement for selling a power
lawnmower to Bartkovich could most likely become the basis of a successful lawsuit
for fraud if the statement proved to be false?
a. “This lawnmower is a real bargain.”
b. “This lawnmower will outperform any other lawnmower on the market.”
c. “This lawnmower is one of the finest on the market today.”
d. “Using this mower you can mow an acre of lawn with less than a gallon of gasoline.”
A principal whose identity is fully revealed to all parties is a(n)
a. undisclosed principal.
b. partially disclosed principal.
c. disclosed principal.
d. none of these.
The obligation of a principal to pay an agent for expenses incurred by the agent while
performing work for the principal is known as
a. repayment.
b. indemnification.
c. recovery.
d. reimbursement.
The drawee of a check is always the
a. person who will receive the money.
b. holder of the check.
c. bank.
d. depositor.
A principal-agent relationship may be terminated by
a. mutual agreement.
b. operation of law.
c. revocation of authority.
d. all of these.
An obstetrician improperly delivered five babies by using instruments that caused these
babies to be born with broken bones and brain damage. The parents initiated a lawsuit
against the surgeon to recover money damages. The correct basis for the parents’
lawsuit is
a. defamation.
b. negligence.
c. trespass.
d. invasion of privacy.
A partnership agreement must be in writing if
a. one of the partners is a minor.
b. there are more than two partners.
c. the partnership is to last three years.
d. the partnership is for professional purposes.
Coverage for loss that is limited to a specific amount is called
a. limited coverage.
b. open coverage.
c. valued coverage.
d. minimum coverage.
Upon cashing in a life insurance policy, an insured would receive the
a. endowment value.
b. open value.
c. return of premiums paid.
d. cash surrender value.
A document adding to an insurance policy is called a
a. codicil.
b. subrogation.
c. release.
d. rider.
An example of an illegal monopoly is
a. a national labor union.
b. the only electric company in the state.
c. a commuter airline that has eliminated competition by slashing prices.
d. the only farmers’ cooperative in three states.
New World Bank paid a check issued by Fermi, a depositor, that had been altered from
$50 to $500. The amount Fermi can recover from the bank is
a. $50.
b. $450.
c. $500.
d. $550.
Under the common law, an example of a contract that would terminate because of a
person’s death is
a. a contract to sell an RV (recreational vehicle).
b. a contract by a well-known actor to perform at a major theater.
c. a contract to make a donation to the American Heart Association.
d. all of these.
The most common method of discharging a negotiable instrument is by
a. bankruptcy.
b. payment.
c. alteration.
d. cancellation.
A disadvantage of the corporate form of business organization is
a. limited life.
b. unlimited liability for debts.
c. double taxation.
d. difficulty of transferring ownership interest.
A tenant remaining in possession with permission of the landlord has a tenancy
a. for years.
b. at sufferance.
c. at will.
d. of trespass.
In a civil action, the paper containing the defendant’s statement of his or her defense is
the
a. summons.
b. motion.
c. deposition.
d. answer.
The key to determining whether a contract is enforceable under the one-year rule of the
statute of frauds is the answer to which of the following questions?
a. Is it possible to carry out the terms of the contract within one year of the date of the
agreement?
b. Is it likely that the parties will carry out the terms of the contract within one year of
the date of the agreement?
c. Is it reasonable to expect that the parties will carry out the terms of the contract
within one year of the date of the agreement?
d. Do the parties wish to carry out the terms of the contract within one year from the
date that the contract will actually begin?
It is not within the power of states to regulate
a. zoning.
b. postal delivery.
c. marriage.
d. traffic control.
A new agreement entered into before the original contract is breached is called a(n)
____________________.
The voluntary mutual surrender and discharge of each party’s contractual rights under a
contract is called ____________________.
The law that governs limited partnerships is the ____________________.
The Social Security Act provides for benefits to employees who retire.
A clause in a deed limiting the use of property is called a(n) ____________________.
Bastian, who lived in a rural area, contracted to have her wedding reception at the
Vantage party house about 10 miles from her home. It was the only party house located
within 150 miles. Three weeks prior to the wedding, this party house burned to the
ground. Under the common law, Bastian’s contract with the party house was discharged.
The first transfer of a negotiable instrument to the payee (a holder) by the maker or
drawer is called an issue.