If a bank pays on a check after the death of its customer, the customer’s estate is not
automatically entitled to reimbursement.
a. True
b. False
Which of the following would ordinarily NOT be considered a security under the
federal securities laws?
a. Bonds
b. Stocks
c. Investments in limited partnerships
d. General partnership interests
The EEOC allows discrimination in employment because of differences in
bonafideoccupational qualifications.
a. True
b. False
Which of the following is NOT an example of co-ownership?
a. A joint tenancy
b. A tenancy by the entireties
c. A tenancy in common
d. A lease between a landlord and a tenant
Which of the following statements is most accurate concerning charitable subscription
promises?
a. They are generally not enforceable.
b. The courts equate them with gifts.
c. They are generally enforceable if there is reliance by the charity.
d. The Restatement uses a strict reliance requirement in relation to charitable
subscriptions.
Discuss whether the principal is liable in each of the following situations. Explain your
answer.
a.Andrew hires Patricia, an attorney, to negotiate a contract to purchase some property.
He agrees to pay her $75 an hour for her services, and she agrees to use her own office
andsecretarial staff to negotiate and draft the agreement. One day, Patricia is driving her
own automobile to a meeting with Edward to discuss the purchase of the land that he
owns. Patriciadrives too fast for conditions and has a minor traffic accident that results
in $600 damage to the other vehicle.
b.George owns a retail store. He hires Carolina to work for him as a salesclerk in the
smallappliance department. George instructs Carolina to make certain representations to
customers regarding a microwave oven, which Carolina sells. George knows these
misrepresentations are
false, but Carolina does not.
c.Henrietta buys a microwave in reliance on the misrepresentations. George owns a
retail store. He hires Carolina to work for him as a salesclerk. George
doesn’tspecifically tell Carolina to make misrepresentations, but he gives ambiguous
instructions to her that led her to believe she should make such misrepresentations.
Henrietta buys a microwavebased upon the mistaken information conveyed to her by
Carolina.
d.Megaborne Corporation hires Ed as an outside salesman and instructs him to call on
customers in a specified territory and to solicit orders for their products. One day Ed is
driving thecompany car to call on a client. He accidentally drives the wrong way on a
one-way street and has an accident with another vehicle that results in $6,000 in
property damage and $30,000 in medical expenses.
e. The Advanced Business Machines Company (ABMC) hires John as an outside
salesman for its computers. It sets high sales quotas for him and instructs him to beat up
salesmen fromcompeting firms in order to keep them away from ABMC customers. In
order to meet his monthly sales quota, John roughs up Ralph, who is a salesman for a
competing firm and then tells Ralph to find his own customers and to stay away from
John’s territory.
Andrew is the principal and Patricia is an independent contractor. Patricia’s accident
was caused by her own negligence. Under the doctrine of respondeat
Ed signs a 10-year lease with a survival clause. If Ed is evicted after 2 years, he will
have to pay rent:
a. for the remaining 8 years.
b. for the period of time until it is relent.
c. until eviction.
d. until he assigns the lease.
The Securities Exchange Act of 1934 primarily deals with secondary transactions in
stock.
a. True
b. False
Which of the following is NOT included in the rules of priority established by Article
9?
a. A creditor with a perfected security interest has superior rights in the collateral over a
creditor with an unperfected security interest
b. Conflicting perfected security interests rank according to priority in time of filing or
perfection
c. As long as conflicting security interests are unperfected, the first to attach has priority
d. Security interests are ranked in order by date of obligation (oldest debts have first
priority.)
Officers and directors of a corporation owe to the corporation the subordination of their
self-interest to the interest of the corporation and owe constant loyalty to the
corporation. This duty is the:
a. fiduciary duty.
b. business judgment duty.
c. duty of indemnification.
d. duty of diligence.
Arthur fired a gun in the middle of the desert. He intended to fire the gun, but had no
reason to believe anyone else was in the area. If the bullet hits Tom, who happened to
be riding his ATV across the desert:
a. Arthur has committed the tort of assault.
b. Arthur has committed the tort of battery.
c. it is unlikely that Arthur has the necessary intent to commit a tort.
d. Arthur has committed the tort of intentional infliction of emotional distress.
The new revision of the RULPA provides that, when a limited partnership is a limited
liability limited partnership,:
a. a general partner is personally liable for a contractual obligation.
b. a general partner is personally liable for an obligation arising from a tort.
c. a contractual obligation or an obligation arising from a tort is solely the obligation of
the limited partnership.
d. a contractual obligation or an obligation arising from a tort is the joint and several
obligation of the limitedpartner shipandthegeneralpartners.
Matchthefollowing:
a. Designation of specific goods as those to which the contract of sale refers.
b. An action at law to recover specific goods in the possession of a defendant that are
being unlawfully withheld from the plaintiff.
c. Amount specified in a contract that either party may recover in the event of a breach
by the other.
d. A seller makes available to buyer goods conforming to the contract and so notifies
the buyer.
e. The inability of a person to pay his debts in the ordinary course of business or as they
become due.
f. Total liabilities exceeding the total value of all assets.
g. Commercially reasonable charges, expenses, or commissions directly resulting from
a breach.
h. Expenses resulting from the buyer’s requirements and which the seller had reason to
expect at the time of contracting; also payment for injury to person or property
resulting from breach of warranty.
i. A buyer’s purchase of goods in substitution for those not delivered by a breaching
seller. j. Carrying out one’s contractual obligations according to the terms of the
contract.
k. The Code rule that a seller’s performance must exactly conform to the contract.
l. The right of a seller under the Code to correct a nonconforming tender of goods to
the buyer. m. Buyer’s manifestation of an unwillingness to become the owner of the
goods.
n. Rescission of a buyer’s acceptance of the goods based on a nonconformity which
substantially impairs their value.
1> liquidated damages
2> identification
3> cure
4> perfect tender rule
5> performance
6> rejection of the goods
7> revocation of acceptance
8> tender of delivery
9> consequential damages
10> cover
11> incidental damages
12> bankruptcy insolvency
13> equity insolvency
14> replevin
A secured transaction consists of:
a. a debt or obligation to pay money.
b. the creditor’s interest in specific property that secures performance of the obligation.
c. Both of these.
d. None of these.
Larson & Son manufactured welders that frequently malfunctioned, setting clothing on
fire and causing serious burns. Larson & Son sold all of its assets to Swenson Co.,
which continued to manufacture the Larson welder product line. Eighteen months after
Swenson’s purchase, one of Larson’s customers sued Swenson for injuries caused by a
welder purchased from Larson, one year prior to the purchase by Swenson. Under the
circumstances, Swenson Co.:
a. cannot be held liable, because it is a corporation.
b. cannot be held liable, because it did not manufacture the welder in question.
c. might be held liable for this debt in some states under strict tort liability.
d. could not be liable if Larson & Son still existed as a corporate entity.
A seller’s incidental damages for a buyer’s breach would include all but the cost to:
a. store the widgets in buyer’s city
b. ship widgets back to seller
c. initially ship the widgets to buyer
d. reload widgets onto seller’s truck at buyer’s city
Authority that is not found in the express or explicit words of the principal, but that is
inferred from the words is known as:
a. apparent authority.
b. indirect authority.
c. delegated authority.
d. None of these.
Business law topics such as contracts, agency, property, and trusts are governed
primarily by the common law.
a. True
b. False
RICO provides for criminal penalties, but contains no provision for civil penalties.
a. True
b. False
Foreign limited partnerships do not have to operate in another country.
a. True
b. False
The term ‘scoping” concerning EIS procedures includes:
a. consulting relevant state environmental agencies to determine significant issues to be
addressed by the EIS.
b. consulting relevant federal agencies to determine the significant issues to be
addressed by the EIS.
c. preparing a final decision that no EIS is required.
d. only agency consultation and no public comment.
If a person entitled to enforce an instrument refuses a tender of payment, the refusal
wholly discharges to the extent of the amount of tender every party who has a right of
recourse against the party making tender.
a. True
b. False
The characters and the names of a television show may be registered as collective
marks.
a. True
b. False
Discrimination based on in the extension of credit is prohibited under the Equal Credit
Opportunity Act.
a. sex or marital status
b. religion or national origin
c. race or age
d. All of these.
Alex wants to submit a bid on a city sewer project. He computes the cost, but
mistakenly omits the cost of one item.
Accordingly, he submits a bid of $430,000 to the city. The next highest bid is $675,000,
and the rest of the bids are even higher. The city is happy to have such a low bid, so it
accepts Alex’s bid and awards him the contract for the job, even though the city
engineer is of the opinion the job cannot be done for less than $650,000. In this case:
a. Alex must perform for the agreed upon price because he has made a unilateral
mistake.
b. the city was aware of or should have been aware of Alex’s mistake. When it accepted
the bid with knowledge of Alex’s mistake, the city sought to take an unconscionable
advantage of Alex’s error.
c. the city must allow Alex to revise his bid to include the cost of the omitted item.
d. Alex will be paid the fair market price according to the UCC for his work.
A person can be guilty of trespass whether he or she intended or did not intend to
violate the other’s rights.
a. True
b. False
A court will not grant a discharge under Chapter 7 to a debtor who:
a. has been granted a Chapter 7 discharge within eight years prior to filing.
b. has made false claims to the court.
c. has destroyed collateral.
d. is an individual.
Challenges to affirmative action plans adopted by private employers are tested under:
a. the Equal Protection Clause of the U.S. Constitution.
b. Title VII of the Civil Rights Act of
c. guidelines developed under President Johnson’s executive order related to affirmative
action programs for
federal contractors.
d. No regulations; due to the absence of state action, challenges cannot be made to
affirmative action plans adopted by private employers.
Lost profits can never be recovered as damages since they are speculative and cannot be
established with reasonable certainty.
a. True
b. False
A(n) is a delivery of possession of personal property to an agent for sale by the agent.
a. sale on approval
b. consignment
c. sale or return
d. None of these.
A plan for reorganization under Chapter 11 does not have to meet which of the
following requirements to be confirmed by the court?
a. Good faith
b. Feasibility
c. No creditor approval
d. Cash payments
Claims of unequal pay for jobs of comparable worth may be brought under:
a. Title VII.
b. The Equal Pay Act.
c. OSHA.
d. The Civil Rights Act.
Compliance with a legislative enactment or administrative regulation does not prevent a
finding of negligence if a reasonable person would have taken additional precautions to
avoid harm.
a. True
b. False
Which of the following would NOT be considered an agent?
a. A salesman who sells his employer’s goods
b. An independent contractor without authority to act on behalf of the person hiring her
c. A factory worker hired to operate a machine
d. A buyer who regularly buys merchandise for a store
Sue has a major store’s credit card. On Monday she charged a $47.90 sweater and then
lost the card. Myra found it Monday and charged a $100 scarf and $400 purse. Sue
missed her card at 8 a.m. Tuesday and called the store. That day, Myra charged a coat
for $4,000. Sue’s bill was $4,547.90. Sue owes:
a. $47.90.
b. $547.90.
c. $97.90.
d. $4,547.90.