Parties who are negotiating a contract always prepare a written draft of the agreement
for both parties to sign.
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As a general rule, the owner of the original personal property becomes the owner of the
improvements.
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The lien created by unpaid taxes assessed on real property is secondary to all other
claims of other persons to the land.
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In deciding a contract dispute, courts look to the subjective intent of the parties.
Answer:
Which of the following statements about the adversary system is TRUE?
A. The adversary system represents the idea that truth is best discovered through the
presentation of competing ideas.
B. The judge, in an adversary system, is actively involved in determining the facts of a
case.
C. In an adversary system the cases are heard by a panel of three judges.
D. The judges have a duty to direct the search for truth rather than expecting it to
emerge from the efforts of the lawyers for the parties.
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The standard for mental capacity to make a will is fairly low.
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Use of force to drive away a person’s customers or employees leads to a tort called
disparagement.
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A check is a draft payable upon demand and drawn on the bank.
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If a contract requires the seller to ship the goods, title passes to the buyer when the
seller delivers the goods to him.
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When a person goes into a restaurant, and hangs his hat and coat on an unattended
rack, it creates a bailment.
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Agreements designed solely to restrict trade are legal.
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The Uniform Commercial Code has achieved complete uniformity of the laws
governing commercial transactions.
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The object of a negotiable instrument is to have it accepted readily as a substitute for
money.
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Revised Article 3 recognizes the modern bank practice of retaining checks, and permits
the bank to supply only a statement showing the item number, amount, and date of
payment.
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A seller is not liable for paying damages when the buyer rightfully rejects goods.
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Educational loans are dischargeable debts.
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The Holder in Due Course rule creates a warranty claim or defense where the product
is sold “as is.”
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A lease for which no time period is specified is known as a tenancy at will.
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An accountant may be found liable for aiding and abetting if she encourages or
participates in the publication of misleading information.
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Intentional torts are both civil and criminal in nature.
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A wash sale:
A. is a lawful manipulation of a security’s price.
B. occurs when new securities are issued.
C. comes under liability provisions of the 1934 Act.
D. is a violation under Section 10(b) of the 1934 Act.
Answer:
If there is no UCC rule governing a particular contract problem:
A. freedom of contract is obtained.
B. unconscionable contract is assumed.
C. unjust enrichment is assumed.
D. the common law is applicable.
Answer:
The acceptor’s obligation:
A. extends to a person entitled to enforce the draft.
B. does not extend to the drawer.
C. extends only to an indorser who paid the instrument pursuant to the indorser’s
liability.
D. extends to the drawer, but not the indorser who paid the instrument.
Answer:
Under an open listing contract:
A. the broker receives a nonexclusive right to sell the property.
B. the broker receives a commission even if a third party finds a buyer.
C. the broker has the exclusive right to sell the property for a specified period of time,
but is not entitled to a commission.
D. the broker has exclusive right to sell the property and is entitled to a commission.
Answer:
____ is a good defense to recklessness.
A. Assumption of the risk
B. Unreasonable danger
C. Contributory negligence
D. Comparative negligence
Answer:
ABC Builders and XYZ Lumber had a contract, calling for XYZ Lumber to deliver a
certain quantity of bricks to ABC’s place of business on the first of every month for one
year. The contract also said that any modifications had to be made in writing. XYZ
delivered the bricks one week late for the first six months but ABC did not object.
When XYZ delivered the bricks late in the seventh month, ABC attempted to cancel the
contract. What is the result?
A. There has been an assignment of the contract.
B. The contract has been modified.
C. XYZ is not in breach because delivery should have been made at XYZ’s place of
business.
D. ABC has waived its right to cancel the contract.
Answer:
If a buyer repudiates a contract for identified, conforming goods before risk of loss has
passed to him/her:
A. the buyer is liable for a commercially reasonable time for any damage to the goods
that is not covered by the seller’s insurance.
B. the seller is liable for a commercially reasonable time for any loss or damage to the
goods.
C. the buyer and the seller must share the loss equally.
D. the buyer is liable for a commercially reasonable time for any loss or damage to the
goods that is not covered by the buyer’s insurance.
Answer:
A continuation statement:
A. can be filed a month before the expiration date.
B. can be filed within five months before the expiration date.
C. can be filed within three months before the expiration date.
D. can be filed within six months before the expiration date.
Answer:
The indorser’s liability is discharged if the check is not presented within:
A. 7 days after the date of endorsement.
B. 14 days after the date of endorsement.
C. 30 days after the date of endorsement.
D. 48 hours after the endorsement.
Answer:
A statute of repose bars the bringing of a tort-based product liability suit:
A. usually after 10 years from the date the product is first sold to a user.
B. usually after five years from the date the product is first sold to a user.
C. usually after 20 years from the date the product is first sold to a user.
D. usually after 50 years from the date the product is first sold to a user.
Answer:
The Consumer Product Safety Act (CPSA):
A. provides civil penalties against those who knowingly and willfully violate CPSC
rules even after being issued notification by it.
B. allows only the U.S. attorney general to sue for injunctive relief or the seizure of
products to enforce various provisions of the act.
C. permits any private party to sue for an injunction to enforce any CPSC rule or order,
if, at the time of the suit, the commission or the attorney general has begun an action
based on the alleged violation.
D. allows those injured because of a knowing and willful violation of a CPSC rule or
order to sue for damages if the amount in controversy exceeds $100,000.
Answer:
Common law arises when:
A. courts are called upon to resolve disputes for which there is no statute or other
source of law establishing a rule.
B. constitutional statutes are found to interfere with the freedom of expression.
C. there are statutes and other sources of law establishing a particular rule and the
courts decide to improvise this existing statutory law.
D. the government wishes to encourage certain kinds of investments.
Answer:
District courts:
A. only review the legal conclusions reached by lower federal courts.
B. are the intermediate courts of the federal court system.
C. have both fact-finding (by the judge or jury) and law-finding (by the judge)
functions.
D. are specialized courts in the federal court system.
Answer:
Which of the following statements is TRUE for claims?
A. A trustee doesn’t receive the defenses that a bankrupt person enjoys against claims.
B. If the debtor’s property is subject to a secured claim of a creditor, that creditor has
the first claim to it.
C. If a claim is provable, a creditor can participate in the distribution of the assets of the
bankruptcy estate.
D. Both secured and unsecured creditors are required to file proofs of claims.
Answer:
A stipulation:
A. is a condition made by the offeror about the manner in which the offer must be
accepted.
B. is a contingency clause built into a unilateral contract.
C. requires acceptance in writing, else the attempt to accept becomes ineffective.
D. needs a timely expression of acceptance.
Answer:
An instrument payable to cash:
A. can be negotiated only after indorsement by the person specified.
B. is known as an order paper.
C. may be negotiated by transfer of possession alone.
D. cannot be negotiated by transfer of possession alone.
Answer:
Under the UCC, if the contract is silent about the place of delivery, the goods are to be
delivered:
A. at the site of the goods.
B. at the seller’s place of business.
C. at the seller’s residence, if it is not his place of business.
D. at any place the seller deems convenient.
Answer:
Under the Revised Article 4:
A. a postdated check is not properly payable by the drawee bank until the date on the
check.
B. a postdated check presented for payment before the date on the check may be paid
and charged to the customer’s account unless he has given notice of it to the bank.
C. postdating checks is illegal.
D. a postdated check presented for payment before the date on the check will be
returned to the customer and fees charged to his account.
Answer:
Shelly signed a check payable to the order of Jennifer Jones. The check contained an
obvious variance between the numbers and the written words. The numbers indicated
that the bank should pay $13,000 to the order of Jennifer Jones, but the written words
indicated the bank should pay “the sum of thirteen hundred dollars.” Under these
circumstances what amount, if any, should the bank pay to the order of Jennifer Jones?
A. $1,300
B. $13,000
C. $6,500
D. $650
Answer:
What are the basic duties of a bailee? Explain the critical elements that determine the
degree of care that a bailee is required to exercise.
Answer:
List the factors one should consider in choosing a form of business organization.
Answer:
Duff Beer applied to the Bureau of Alcohol, Tobacco and Firearms (BATF) for
approval of proposed labels and advertisements that disclosed the alcohol content of its
beer. BATF rejected the application on the grounds that the Federal Alcohol
Administration Act prohibited disclosure of the alcohol content of beer on labels or in
advertising. The labeling regulations also prohibited the use of descriptive terms that
suggest high alcohol content, such as ‘strong,” “full strength,” or “extra strength.” Duff
claimed the labeling restrictions violated its First Amendment rights. The government
responded that the ban was necessary to suppress the threat of ‘strength wars” among
brewers, who, without the regulation, would seek to compete in the marketplace based
on the potency of beer. Discuss the analysis courts will use in evaluating the
constitutionality of this restriction.
Answer:
Describe limited partnerships.
Answer:
John borrowed money from Alvin to buy school supplies. He drew up and signed the
following promissory note, “IOU, Alvin Anderson, the sum of $20 for value received.
John Adams.” Is the note a negotiable instrument?
Answer:
“Which course of action does the most good and the least harm?” This is one of the
questions to be asked by managers while making an ethical decision according to the
decision-making model by Joseph L. Badaracco Jr. Discuss the nature and purpose of
this question.
Answer:
When might an accountant issue a qualified opinion and a disclaimer?
Answer:
Define the three steps involved in applying stare decisis.
Answer: