Conrad, an accountant, who performed tax services for Glenn, a small business owner,
earned a $5,000 fee over a three-month period. Conrad then assigned this fee to her
bank to apply toward a loan. Based on this information, which of the following
statements is correct?
a. Legally, Conrad’s claim is not assignable.
b. Only claims other than money are assignable.
c. Conrad’s right to the $5,000 fee is assignable because it involves a claim for money.
d. Conrad’s right to collect $5,000 is not assignable without the bank’s permission.
Liability for lost, delayed or damaged baggage is determined by
a. the Federal Trade Commission.
b. the Federal Aviation Administration.
c. each airline.
d. Congress.
On December 15, Maria bought a snow blower from the Tripod Hardware Store, terms
thirty days. After the sale had been made, Tripod agreed to deliver the snow blower to
Maria’s house the following day. Risk of loss passed to Maria
a. on December 15.
b. on December 16.
c. on January 15.
d. when the bill was fully paid.
Of the following, the item most likely to be considered a necessary, thus obligating a
minor to become liable for payment, is
a. paying an employment agency for securing a job.
b. rent on an apartment.
c. attorneys’ fees.
d. all of these.
All of the following are nonforfeiture rights except
a. the automatic premium loan.
b. the lump sum option.
c. cash surrender value.
d. extended term insurance.
A security deposit is
a. given to the landlord to ensure that the tenant lives up to the lease terms.
b. returnable to the tenant if there are no damages to the leased property.
c. often placed in a bank account to earn interest for the tenant.
d. all of these.
If a lease is silent about who pays the real estate taxes assessed against the leased
premises,
a. the tenant pays.
b. the landlord pays.
c. the landlord and tenant split the amount due.
d. none of these.
Administrative agencies created by Congress have
a. executive power.
b. legislative power.
c. judicial power.
d. all of these.
A seller who violates consumer protection laws may be subject to
a. civil penalties only.
b. criminal penalties only.
c. neither civil nor criminal penalties.
d. both civil and criminal penalties.
Of the following, the one that is not a method of terminating an ordinary offer is
a. rejection.
b. counteroffer.
c. death of the offeror after acceptance by the offeree.
d. lapse of time.
Oral contracts are
a. unenforceable in court.
b. easier to prove than written contracts.
c. harder to prove than written contracts.
d. illegal in some states.
The test of merchantability in the case of foods is generally what a reasonable person
can expect to find in the food. Which of the following would most likely show a breach
of this warranty?
a. A cherry pit in a piece of cherry pie
b. A chicken bone in a chicken sandwich
c. A fish bone in a bowl of vegetable soup
d. A grapefruit seed in a glass of grapefruit juice
A specialized federal court is
a. a U.S. district court.
b. a U.S. court of appeals.
c. a U.S. claims court.
d. none of these.
Rescission of a contract means
a. that the parties must make a new agreement discharging each other from rights and
obligations under the original contract.
b. that the parties must enter into a novation.
c. that the parties must accept substantial performance.
d. all of these.
Personal property may be transferred by
a. delivery alone.
b. a formal bill of sale.
c. a deed.
d. delivery and by a formal bill of sale.
A limited partner has no right to
a. receive an accounting.
b. inspect the partnership books.
c. give advice to the partnership.
d. participate in management.
Martin Taylor purchased an electric shaver for cash from the Arco Department Store for
$125.95. The following manufacturer’s statement was printed on a tag attached to the
razor: “Warranted for ninety days from date of purchase against original factory
imperfections in materials and workmanship.” Taylor took the razor for a slight
adjustment two weeks after he bought it. He expressed some concern about the short
warranty period of ninety days offered by the manufacturer. The store manager replied,
“Don’t worry, I will give you an additional store warranty of one year against all defects
and, if necessary, will replace the razor with a new one.” This statement by the store
manager would be
a. binding, because an oral warranty given after a sales contract is valid without
consideration if Taylor can prove that it was given.
b. binding, because it is based on common usage in the trade, and most razors carry
such a guarantee.
c. not binding, because it is based upon past consideration.
d. not binding, because the store manager’s statement is mere sales talk or “puffing.
Laws that prohibit the sale of certain goods on a certain day of the week are called
a. nonprofit laws.
b. Sabbath laws.
c. blue-sky laws.
d. Sunday laws.
A victim of a breach of contract will be granted specific performance in a contract to
a. buy a 1990 car.
b. purchase 100 shares of stock.
c. purchase a $130,000 house.
d. hire a professional singer for a party.
A good example of modern statute law is:
a. common law
b. the Uniform Commercial Code (UCC)
c. the Uniform Quasi Contract Code
d. judge made law
Congressional power to protect the environment arises from Congress’s constitutional
power to
a. regulate intrastate commerce.
b. provide for the general welfare.
c. impose taxes.
d. regulate business.
A tenant’s estate of definite duration is
a. a tenancy from year to year.
b. a tenancy at sufferance.
c. a tenancy for years.
d. none of these.
A disposition of a car in a will is called a
a. device.
b. sale.
c. devise.
d. legacy.
Lemon laws entitle a consumer to receive a new car if there is any defect in the present
car.
One way to classify a negotiable instrument is either a demand instrument or a time
instrument.
A tenancy by the entirety is similar to joint tenancy.
An amendment to a will is called a(n) ____________________.
A business that requires an employee to join a union upon employment is referred to as
a(n) ____________________.
Legal proof presented during a trial to support a person’s claim is called
____________________.
Express authority must be in writing to be effective.
Punitive damages are imposed upon a wrongdoer by the court as
____________________ for an intentional tort.
Damages awarded for an actual loss or injury are called liquidated damages.
A state has the right to regulate the activities of a corporation doing business in that
state.