Double taxation means that the
a. government taxes both salaries and dividends.
b. government taxes both earnings to corporations and dividends to individuals.
c. tax rate for corporations is double that of individuals.
d. government taxes both stocks and bonds.
A contractor who is not paid for work done on a building may file a
a. contractor’s lien.
b. builder’s lien.
c. masonry lien.
d. mechanic’s lien.
“For deposit only, Robert Marin” is a
a. qualified indorsement.
b. restrictive indorsement.
c. blank indorsement.
d. special indorsement.
If a third party learns the identity of an undisclosed principal the
a. contract is void.
b. third party may hold the agent liable.
c. third party may hold the principal liable.
d. third party may hold either the agent or the principal liable.
A warranty given by the seller after the sale
a. is valid.
b. is unenforceable.
c. must be accompanied by consideration.
d. must be written.
Merchants are very cautious about accusing and holding people for shoplifting because
they may be sued for
a. assault.
b. battery.
c. false imprisonment.
d. negligence.
Grill Lovers, a Manufacturing Co. that makes gas grills for outdoor cooking, sold
several of its grills to Premier Home Company located in a large city. Ferris, who
purchased a gas grill from Premier, was seriously injured while grilling steaks outside
for a family outing. The injury resulted from a manufacturing defect in the gas line
which caused an explosion as he was cooking over the grill. In a product liability suit
based on strict liability, Ferris may bring a law suit against:
a. Grill Lovers only.
b. Premier only.
c. Grill Lovers or Premier.
d. none since Ferris does not have a case.
All of the following will terminate a lease except the
a. condemnation of the leased premises.
b. death of the landlord.
c. destruction of the leased premises.
d. end of the lease term.
Of the following acts, the one that an agent could not perform for the principal would
be
a. making a will for the principal.
b. voting for the principal.
c. serving on a jury in place of the principal.
d. all of these.
An inability to pay debts as they become due is known as
a. bankruptcy.
b. solvency.
c. Chapter 13.
d. insolvency.
Traveler’s checks are
a. issued in set denominations.
b. issued without a named payee.
c. readily accepted all over the world.
d. all of these.
Which of the following warranties can be disclaimed by a seller?
a. Express warranty
b. Implied warranty of merchantability
c. Implied warranty of fitness for a particular purpose
d. All of these.
A deposit on a real estate contract is usually held by the
a. buyer’s attorney.
b. seller.
c. seller’s attorney.
d. seller or the seller’s attorney.
The law intended to prevent price misrepresentation in the sale of automobiles is the
a. Automobile Information Disclosure Act.
b. Magnuson-Moss Warranty Act.
c. Hatch Act.
d. Automobile Consumer Act.
An instrument is not negotiable if it is
a. payable in Canadian money.
b. not dated.
c. to be paid when the maker gets married.
d. written in pencil.
When one party makes a material change in the terms of the contract without the
approval of the other party, the contract is discharged by
a. substantial performance.
b. accord and satisfaction.
c. alteration.
d. waiver.
A person would not have an insurable interest in the life of a
a. spouse.
b. business partner.
c. friend.
d. son or daughter.
If a mortgage is silent with regard to assuming it, it is most likely
a. that it can be assumed.
b. that it cannot be assumed.
c. that it can be assumed if it is an FHA or VA guaranteed mortgage.
d. none of these.
Of the following, those that are assignable are
a. royalties on books.
b. accounts receivable.
c. rights to the delivery of goods.
d. all of these.
Miller said to Avid, a retail merchant, “Deliver this $1,500 computer to my nephew
Ronald McDonald and send the bill to me.” Avid did as he was requested, but Miller
refused to pay the bill, claiming that the nephew was really not interested in using the
computer. Is Miller liable?
a. Yes; an oral promise to pay one’s own debt is binding.
b. Yes; an oral promise to pay the debt of another is binding.
c. No; an oral promise to pay the debt of another is not binding.
d. No; there was no consideration for the oral promise.
The initial questioning of a witness by the lawyer who called that witness is called
a. discovery.
b. direct examination.
c. mediation.
d. cross-examination.
A tenancy for a set period of time that is automatically renewed for the same amount of
time unless canceled is a
a. tenancy at sufferance.
b. tenancy for years.
c. periodic tenancy.
d. tenancy at will.
Emergency room costs would be covered by
a. major medical insurance.
b. medical insurance.
c. hospital insurance.
d. surgical insurance.
The process of establishing the validity of a will is called
a. execution.
b. administration.
c. probate.
d. testacy.
Directors and officers are liable to third parties only if they commit an intentional tort
such as fraud.
To avoid problems, the partnership agreement should contain provisions for settling
disputes among the partners.
A stockholder can never be held liable for debts of the corporation.
A special bailee can limit its liability for damage to bailed property provided it notifies
the bailor.
Betsy Carter issued a promissory note payable to the order of Lynn Baylor. What must
Baylor do if she wishes to transfer the note to John Victor?
Rescission of a contract occurs when two parties mutually agree to cancel a contract
they had previously made.
Consumer protection is the sole responsibility of Congress.
A contract by a minor appointing an agent is ____________________.