When a seller sells on credit and is given a security interest in the goods, that interest is
called:
a. a purchase money security interest.
b. a future transaction.
c. a floating lien.
d. none of the above.
When a lease covers rooms or an apartment in a building, a destruction of the leased
premises:
a. temporarily suspends the tenant€s obligation to pay rent.
b. terminates the lease.
c. requires the landlord to repair or restore the property.
d. has no effect on the obligations of the tenant or the landlord.
A common carrier must:
a. receive and carry proper and lawful goods of all persons who offer them for
shipment.
b. furnish adequate facilities.
c. follow the instructions of the shipper.
d. all of the above.
To revoke acceptance of goods:
a. any defect or nonconformity must be discovered.
b. the goods must be dangerously defective.
c. the nonconformity must substantially impair the value of the goods.
d. action must be taken by the buyer within 60 days of delivery.
Deirdre read that bids were being solicited for the construction of an apartment tower.
Deirdre submitted the lowest bid and was offered the contract contingent on her
providing acceptable sureties in the amount of $1 million. Because Deirdre never had
done work on this scale, it was virtually impossible for her to obtain the appropriate
sureties. She convinced Reassuring Sureties, Inc. to issue the necessary commitment by
misrepresenting that she was a famous builder in Canada. As the work progressed, it
seemed to be going well and Deirdre was asked to make the project 52 stories instead of
50 stories, which was the original contract height. She agreed to this change.After the
work was completed, many breaches of contract on the part of Deirdre became evident.
Reassuring Sureties was sued for a $500,000 loss. Reassuring Sureties defended on the
grounds of fraud and material change in the contract. Decide.
Pursuant to the CARD Act of 2009, all credit card companies must have bills in
consumers€ hands not less than __________ before the bill is due.
a. seven (7) days
b. fourteen (14) days
c. twenty-one (21) days
d. thirty (30) days
The partners who manage the limited partnership and are personally liable for the firm
debts are __________ partners.
a. general
b. active
c. licensed
d. unreserved
Disparate impact exists when facially neutral employment practices:
a. adversely impact a protected group.
b. intentionally discriminate against a protected group.
c. favorably impact a protected group.
d. are shown to be job-related.
The U.S. Patriot Act and airport security regulations were enacted for the protection of:
a. the person.
b. public, health, safety and morals.
c. the state.
d. personal rights.
Only the Secretary of Labor can bring court actions to enforce the provisions of ERISA.
A sale of goods or services for $25 or more made to a buyer at home may be set aside
within __________ days.
a. three (3) business
b. three (3) calendar
c. five (5) business
d. five (5) calendar
A law to declare war:
a. can be enacted by both state and federal governments.
b. can be enacted only by the national government.
c. can be enacted only by state governments.
ddd. is prohibited by the U.S. Constitution.
Which of the following federal laws grants the SEC the power to suspend all trading
when markets are excessively volatile?
a. The Trust Indenture Act of 1939
b. The Market Reform Act of 1990
c. The Investment Advisors Act of 1940
d. The Remedies Act of 1990
When a person has performed services under an oral contract that cannot be enforced
because of the statute of frauds, such person:
a. can recover the agreed payment for the services because a refusal to make payment
would be a breach of the contract.
b. can recover the reasonable value of the services because there is a quasi-contractual
duty to pay for the benefit received from such services.
c. cannot recover the value of the services because they were rendered under a
unilateral mistake of law.
d. can have the party receiving the services arrested for obtaining property by false
pretenses.
Statutes which are drafted from Uniform State Laws are often used to regulate:
a. business.
b. foreign countries.
c. criminal behavior.
d. none of the above.
Which of the following is not a suretyship defense?
a. statute of limitations
b. performance of the obligation by the principal debtor
c. creditor substitution of the original debtor with a new one
d. insolvency of bankruptcy of the principal debtor
Under the Clayton Act, when large-scale enterprises plan to merge, they must in
advance:
a. notify the New York Stock Exchange.
b. notify the President of the United States.
c. complete the necessary financing arrangements.
d. notify the Antitrust Division of the Department of Justice.
Sheriff Jane desires to search your home. What law requires that the sheriff obtain a
search warrant?
a. the Fourth Amendment of the United States Constitution
b. the Equal Protection Clause
c. state statute
d. local uniform police ordinances
The transferee has only those rights that were possessed by the transferor of the note
when a transfer of an instrument is made by:
a. an assignment.
b. a negotiation.
c. a sale.
d. a will.
In which of the following situations would a third party acquire greater rights than the
original lessee?
a. an assignment
b. a sublease
c. a. and b.
d. neither a. nor b.
Legal issues in cyberspace include appropriation and competition issues.
Margo had only one son, and her husband had predeceased her. The son was reckless
and extravagant, but Margo loved him dearly. She left all her property to a trustee in
trust for her son and provided that the trust was a spendthrift trust. Margo further
provided that the income from the trust was to be paid to her son quarterly until he
reached the age of 30 at which time the full trust corpus was to be paid over to him.
After Margo’s death and before the son had reached the age of 30, the son signed a
contract that purported to transfer the entire trust corpus to a finance company. The son
was paid for this. The son had also run up many unpaid bills on which he was sued and
judgments entered against him. The finance company and the other judgment creditors
are seeking to compel the trustee to turn over the trust corpus to them. Decide.
A showing that an invention as a whole would have been obvious to a person of
ordinary skill in the art when the invention was patented is called subsequent art.
The law gives certain holders of a negotiable instrument a preferred standing by
protecting them from all defenses when they sue to collect payment.
The rights of a transferee of a negotiable bill of lading are defeated if the goods have
been stopped in transit.
Field warehousing is the storage of farm crops in the field where they have been grown.
Kentucky Lumber and Millwork Company contracted to supply Rommell Company
millwork for use in the construction of a school building. While the work was in
progress, the Kentucky Lumber mill was destroyed by fire. For two months thereafter,
Kentucky Lumber and Millwork supplied Rommell with millwork purchased from a
third party. Kentucky Lumber and Millwork did not wish to continue this plan and
declared that the contract was ended. Rommell brought an action against Kentucky
Lumber and Millwork to enforce the contract. How will the court decide?
Subornation is the right of a party secondarily liable to stand in the place of the creditor
after making payment to the creditor and to enforce the creditor€s right against the
party primarily liable in order to obtain indemnity from such primary party.