Which of the following statements about an exclusive agency listing is TRUE?
A. The broker has the exclusive right to sell the property and entitles him/her to a
commission no matter who procured the buyer.
B. The broker operating under this listing is entitled to a commission only if he/she was
the first to find an able buyer.
C. The seller has the right to sell the property himself/herself without being obligated to
pay the broker a commission.
D. The seller must pay the broker his/her commission even if it was the seller who
found the buyer during the duration of the listing contract.
Answer:
Sargent put $5,000 worth of stocks and bonds into an asset management account at Fido
Investments. One month later, his account statement indicated that he had a balance in
his account of $5 million. Sargent quickly withdrew this amount from his account and
put it into a Swiss bank account. Can Fido rescind its payment of $5 million to Sargent
on the grounds of mistake?
A. No, because Sargent had given value consideration.
B. Yes, because even though Fido was at fault, Sargent was well aware of Fido’s
mistake in crediting the extra amount to his account.
C. No, because Fido should have exercised reasonable care while crediting the amount
to Sargent’s account.
D. Yes, because Fido stands to suffer huge material loss without the rescission.
Answer:
In the case of a bank that refuses to pay on a check drawn against an account with
sufficient funds, which of the following actual damages would the bank be liable for?
A. Charges imposed by retailers for returned checks.
B. Damages for mental disturbance.
C. Injury to the depositor’s credit rating that result from the dishonor.
D. Only damages for mental disturbance and injury to honor.
Answer:
A buyer is _____ if he cannot pay his bills when they become due.
A. unconscionable
B. liquidated
C. repudiated
D. insolvent
Answer:
Stock splits:
A. are a type of dividend.
B. change the par value of the shares.
C. decrease the number of shares outstanding.
D. change the retained earnings account.
Answer:
The partnership is liable for torts committed by any partner of the firm while engaged
in partnership business under the doctrine of:
A. estoppel.
B. respondeat superior.
C. caveat emptor.
D. ultra vires.
Answer:
Lou enters into an agreement with LaFancy, a wedding planning company, to
coordinate her June wedding for the sum of $10,000. In March, Lou calls LaFancy to
tell the company the deal is off, because she thinks she can do a better job herself.
LaFancy sues Lou, and Lou argues lack of consideration as a defense. Which of the
following statements is correct?
A. LaFancy has given consideration.
B. LaFancy had a legal duty to plan Lou’s wedding even before the agreement was
signed.
C. Lou can enforce LaFancy’s promise to her.
D. Lou has given consideration.
Answer:
A licensor may retain certain markets for himself while allowing the licensee to exploit
the licensed technology everywhere else in the world. This provision is found in the:
A. exclusive dealing clause.
B. grant-back clause.
C. territoriality principle.
D. territorial restriction.
Answer:
A contract for the payment of money which also serves as a substitute for money
payable immediately is a:
A. sovereign bond.
B. corporate bond.
C. commercial paper.
D. commodity paper.
Answer:
If a creditor is owed a debt that is provable and nondischargeable, he/she may:
A. participate in the distribution of the debtor’s estate.
B. not pursue the debtor for payment even after the completion of the bankruptcy
proceedings.
C. not enter into any voluntary agreement with the debtor for discharge of the debt.
D. need court approval for reaffirmation of loans.
Answer:
Under Chapter 11 of the Bankruptcy Act, a reorganization plan:
A. must divide the creditors into classes and set forth how each creditor will be
satisfied.
B. need not state which claims are impaired or adversely affected by the plan.
C. need not necessarily treat all creditors in a given class the same.
D. must give creditors and trustees shares in the corporation in exchange for the debt
owed to them.
Answer:
Under section 2-209 of the UCC, agreements to modify existing contracts for the sale
of goods:
A. need new consideration to be binding.
B. need no new consideration to be binding.
C. require parties to formally terminate their original agreement and start over.
D. requires just an informal agreement to be enforced.
Answer:
Which of the following statements is TRUE for assumption of risk?
A. It is not a defense in cases based on strict liability.
B. It is not a defense in cases based on reckless behavior.
C. It must be the product of an explicit agreement between the plaintiff and the
defendant.
D. It bars recovery as the plaintiff fully understands the nature and extent of the risk
involved.
Answer:
Punitive damages:
A. are a small amount of compensation given to the plaintiff.
B. are like actual damages but do not seek to deter the defendant.
C. are damages far less than the plaintiff’s injuries, awarded to punish the plaintiff.
D. are damages in excess of the plaintiff’s injuries, awarded to punish the defendant.
Answer:
James draws a check on his account at First National Bank payable to the order of
Terry. If First National does not pay the check when Terry presents it for payment,
then:
A. both James and the bank are liable to Terry.
B. James is liable to Terry on the basis of drawer’s obligation.
C. James transfers his duties as a drawer to the drawee bank and the bank is liable.
D. neither James nor the bank is liable to Terry.
Answer:
Any person who can trace his title to an instrument back to a holder in due course
receives rights similar to a holder in due course even if he cannot meet the requirements
himself. This is known as the _______.
A. shelter rule
B. blue law
C. FTC rule
D. irregular paper law
Answer:
For a gift of ownership of real property to be valid, the donor must:
A. deliver a properly executed deed to the property to the donee.
B. ensure that the donee or third party takes possession of the property.
C. simply attempt to make the gift without delivering the deed.
D. will it to a third party.
Answer:
Which of the following statements is TRUE about the Fair Housing Act?
A. A landlord who uses a real estate broker is exempted from this act.
B. It doesn’t hold a landlord liable for refusing to allow a handicapped person from
making reasonable modifications to the leased property.
C. The act prohibits landlords from excluding families with children.
D. The act prohibits discriminatory practices in various transactions affecting housing,
except the rental of dwellings.
Answer:
Title III of the Americans with Disabilities Act applies to landlords leasing:
A. private property.
B. a place of public accommodation.
C. private property accommodating more than two people.
D. private residential property for public use.
Answer: