Berman sold her business, including merchandise and fixtures, to Curran. This is a(n)
a. present sale.
b. sale on approval.
c. bulk transfer.
d. auction.
A voidable contract
a. is enforceable against all parties unless a party has a right to back out of it.
b. lacks one of the essential elements of a contract.
c. is required to be in writing.
d. is limited to simple transactions.
A hotelkeeper’s right to keep the property of a guest until paid is known as
a. hotelkeeper’s bailment.
b. demurrage.
c. hotelkeeper’s lien.
d. innkeeper’s judgment.
A court-appointed person who manages the estate of a person who died without making
a will is called a(n)
a. legatee.
b. administrator/administratrix.
c. devisee.
d. residuary legatee.
Under the UCC, the one term of a sale that must be in writing is the
a. date.
b. quantity.
c. unit price.
d. total sale price.
Bronson entered into a contract with Crane to have some electrical work done. Crane
later delegated the work to Frank, another licensed electrician. Which of the following
statements is true?
a. Crane cannot legally delegate his contract obligations.
b. Crane is still responsible for making sure the obligation is carried out.
c. Crane can no longer be held liable if the contract is breached.
d. The contract is automatically terminated.
Michaels purchased a desk from Erwin who is not in the business of selling furniture.
Erwin tendered delivery of the desk after receiving payment in full from Michaels.
Michaels told Erwin that she would be unable to take possession of the desk until the
next day. In the meantime, thieves stole the desk from Erwin’s garage before Michaels
had a chance to take possession. The risk of loss
a. passed to Michaels when Erwin tendered delivery.
b. passed to Michaels at the time payment in full was made.
c. remained with Erwin until Michaels took possession of the desk.
d. remained with Erwin for a reasonable time after Michaels took possession of the
desk.
The right to the proceeds of an insurance policy
a. cannot be assigned.
b. can be assigned only by the insured.
c. can be assigned by the insured and the beneficiary.
d. can be assigned only to a family member.
Below are four statements made by salespeople to customers. In each case, a customer
made a purchase relying on the statement, the statement proved to be false, and the
customer suffered a loss. Which statement would most likely serve as the basis for a
successful suit for breach of warranty?
a. “This watch will last a lifetime.”
b. “You won’t find anything like this for the same amount of money anywhere.”
c. “These spark plugs should give you better gasoline mileage.”
d. “This material is fireproof and approved by Underwriters’ Laboratories.”
An applicant who is denied credit is entitled to receive
a. an explanation by phone.
b. a written explanation.
c. both an explanation by phone and a written explanation.
d. none of these.
The right to use a portion of another’s land for a specific purpose either forever or for a
set time is called a(n)
a. fixture.
b. easement.
c. profit.
d. license.
A railroad would not be liable for injuries to a passenger caused by
a. a washout of the tracks by a tornado.
b. an accident resulting from defective brakes.
c. failure of the engineer to spot a vehicle on the tracks.
d. all of these.
One example of a contract that must be in writing is a contract to
a. rent an apartment for six months.
b. care for someone for the rest of her or his life.
c. purchase a computer for $350.
d. pay a friend’s debts.
One who is known to the public as a partner and who is active in the partnership is a
a. general partner.
b. limited partner.
c. silent partner.
d. dormant partner.
Martinson entered into a contract to purchase a used fax machine from Gruber for $550.
Martinson, who did not sign the agreement, changed his mind and refused to buy the
fax machine from Gruber. Can Gruber legally enforce the contract?
a. No; the sale was for less than $600.
b. No; Martinson did not sign the contract.
c. Yes; Gruber signed the contract.
d. Yes; the sale contained all the elements of a contract.
The major difference between guaranty and suretyship is
a. when they terminate.
b. the amount that can be guaranteed.
c. who is primarily responsible for repayment of the debt.
d. none of these.
Smart Computer Services had a service contract with Johnson College to maintain all of
the college computers used for instructional services. The college depended heavily on
its computer system being maintained properly at all times. A liquidated damage clause
in the contract provided that Smart Computers pay $500 to Johnson College for each
day that Smart was late responding to a service call. On October 10, Smart was notified
that Johnson College’s computer system failed. Smart, however, did not respond to the
college’s request until October 15. If Johnson College sues Smart Computer Services
under the liquidated damages provision of the contract, Johnson College will
a. win, unless the liquidated damage provision was determined to be a penalty.
b. win because, regardless of the circumstances, the liquidated damages provision is
valid.
c. lose, because Smart’s breach is only a minor.
d. lose, because the liquidated damages clause in the Smart/Johnson College contract
was against public policy.
A felony is
a. less serious than a misdemeanor.
b. more serious than a violation, infraction, or petty offense.
c. by law not a true crime.
d. punishable by imprisonment in a local institution such as county jail for more than
one year.
An order to seize a debtor’s property before a judgment is obtained is called a(n)
a. prejudgment.
b. attachment.
c. security agreement.
d. lis pendens.
The maker of a promissory note is a
a. primary party.
b. secondary party.
c. payee.
d. drawee.
A principal has a duty to indemnify an agent if the agent gets a speeding ticket while
performing the principal’s business.
The seller performs a sales contract by offering ____________________ goods to the
buyer.
The Fair Debt Collection Practices Act forbids the use of threats or violence to collect
an amount owed.
An offeree who makes a counteroffer becomes the offeror.
Explain how legal gaming has expanded greatly in the United States.
Under the UCC only a person who deals regularly in the sale of goods involved in the
sales contract is considered a merchant.
A(n) ____________________ is a type of cashier’s check used primarily by tourists
who want a safe method of carrying funds while traveling.
A partner has the right to inspect the books and records of the partnership.