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1) except for the liability of limited partners, limited partnerships and lllps are identical.
2) an indorsing transferor of a negotiable instrument makes five transfer warranties to
all subsequent transferees.
3) if the seller is in the process of manufacturing the goods when the buyer breaches the
contract, one of the sellers options is to complete manufacture of the goods and then
resell them so long as this minimizes the loss to the seller.
4) the rule on adequacy of consideration reflects the laissez-faire assumption of
freedom of contract.
5) in a case involving an ultrahazardous or abnormally dangerous activity, the plaintiff
must prove recklessness on the defendants part. any lower fault standard would be
unfair to the defendant in such cases.
6) in qualified indorsement, the indorser accepts the liability to make the instrument
good, if the maker or drawer defaults on it.
7) a retailers decision not to close earlier than its regular closing time even though a
storm warning makes it unlikely that there will be any more customers that day is an
example of rule utilitarianism.
8) which of the following ethical theories requires decision makers to maximize utility
for the society as a whole?
a.profit maximization theory
b.deontological theory
c.rights theory
d.utilitarian theory
9) which of the following is also termed a liability waiver?
a.exculpatory clause
b.nondisclosure agreement
c.confidentiality clause
d.noncompetition clause
10) which of the following pretrial steps occurs nearest in time to the trial in a felony
prosecution?
a.booking
b.arraignment
c.indictment
d.information
11) which of the following is most likely to involve both defamation liability and
liability for putting a person in a false light?
a.saying that a philosopher favors platos philosophy over aristotles, when in fact the
reverse is true.
b.falsely saying that an anti-abortion activist favors abortion.
c.falsely saying that an anti-abortion activist favors giving parents a right of infanticide
for all children less than one year old.
12) there is a provision of the means-ends tests by the supreme court because:
a.individual rights must be protected at any cost.
b.the correct procedure of law has to be followed.
c.no constitutional right is absolute.
d.the conduct of public officials must be scrutinized.
13) a _____ dividend may be revoked by the board of directors after it has been
declared.
a.share
b.cash
c.property
d.scrip
14) identify the difference between a case involving intentional fraud and innocent
misrepresentation.
a.the contractual remedy of rescission is not available in a misrepresentation case.
b.a person committing innocent misrepresentation is liable for punitive damages for the
tort of deceit.
c.reasonable reliance of the complaining party is not required in a fraudulent case.
d.materiality is not required in a fraudulent case.
15) payments made with a credit card and payments made with a debit or atm card are
subject to:
a.both the federal law and the state law.
b.only federal laws.
c.only state laws.
d.only local laws.
16) which of the following statements, if false, is most likely to create liability for fraud
or misrepresentation?
a.this rare antique chair probably is worth $10,000.
b.this crane will lift a 10,000-pound load.
c.this car is a perfect gem.
d.in my opinion, this car is in flawless mechanical condition.
17) which of the following will be legally binding on all the parties despite the lack of
consideration?
a.a promise to donate money to a charity which was relied upon by the charity in
incurring large expenditures.
b.an oral employment agreement for a term of nine months from the date the agreement
was formed.
c.an irrevocable oral promise by a merchant to keep its offer open for 60 days.
d.a material modification signed by the parties to a contract to purchase and sell a
parcel of land.
18) a drawers written stop-payment order is valid for:
a.six months, unless the drawer extends it in writing.
b.only 14 days, and can be extended if the drawer sends a written order.
c.one year, unless it is renewed in writing.
d.a check of $500 and above.
19) which section of the clayton act originally prohibited local and territorial price
discrimination by sellers?
a.section 2
b.section 3
c.section 7
d.section 8
20) to recover under a property insurance policy, an insurable interest must exist:
a.when the policy is purchased: yes; at the time of loss: yes
b.when the policy is purchased: yes; at the time of loss: no
c.when the policy is purchased: no; at the time of loss: yes
d.when the policy is purchased: no; at the time of loss: no
21) jerry and louise contract for jerry to sell louise his farm for $300,000. as part of the
deal, jerry throws in a pound of marijuana seeds, for which louise is to pay an extra
$1000. louises plan is to use the seeds to grow a marijuana crop. is the whole contract
or any part of the contract enforceable? assume that both the sale of marijuana seeds
and the cultivation of a marijuana crop are illegal.
22) amelia contracts to have her portrait painted by hamilton for $10,000. hamilton
assigns the contract to drew, another artist. has there been a valid delegation of duties
here? why or why not?
23) what are the essential constituents of an environmental impact statement (eis)? how
are business people affected by the eis requirement?
24) jill homeowner contracts with ralph roofer for ralph to reshingle jills roof. midway
through the job, ralph says that he cannot finish unless jill promises to pay him an
additional $500. there is no real basis for this demand; ralph just wants more money.
even though she could have gotten one of six other roofers to finish the job at a
reasonable price, jill gives in and promises to pay the $500, after which ralph completes
the job. later, jill refuses to pay the additional $500, and ralph sues her. jill defends on
the basis of duress. what are the chances of this defense working?
25) andrew appoints matthew to be his agent for a period of 2 years. after 6 months,
andrew meets with an accident after which he permanently losses his capacity to
understand things going on around him. this terminates the contract automatically. but
matthew is demanding damages for breach of contract. is andrew liable to pay
damages?
26) what is the justification for the rule that, generally speaking, a minor can disaffirm
contracts for necessaries, if a parent or guardian supplies the minor with such
necessaries?
27) what are the conditions necessary for a person to be able to accept a negotiable
instrument as a substitute for money?
28) on october 31, a congressional candidate orders a quantity of campaign literature
from a local printer. the stated time of performance is november 2. november 8 is
election day. the printout is not delivered until november 9. thus, the candidate refuses
to pay the printer one cent. is this position justified? why or why not? assume that
nothing was said in the contract about time being of the essence.
29) alice writes a check pay to the order of caleb. the check is drawn on the berkleys
bank. who are the drawer, the drawee, and the payee on this instrument? why is this
check called order paper?
