Rational ethics states that people’s ethical decisions can be judged only by
understanding their situations.
AML Union tells Standard Co. during contract negotiations that “unfortunate events
may occur” if Standard does not agree to most of the union contract proposals. The next
day, two Standard Co. trucks burn. AML Union has:
A. not bargained in good faith.
B. made a statement of opinion.
C. exercised its First Amendment rights.
D. engaged in destructive bargaining.
_____ sees law and morality as united in a common and fundamental bond.
A. Ethical relativism.
B. Social contract theory.
C. Utilitarianism.
D. Natural law theory.
Agnes, a convenience store cashier, takes $5 out of the register for every $100 she rings
up, and keeps it. Agnes could be arrested for:
A. extortion.
B. embezzlement.
C. burglary.
D. robbery.
Gordon employs Josh as an agent to sell Gordon’s house. When does this agency end if
the agreement is silent?
A. When the house is sold.
B. When Josh locates a possible buyer.
C. When Josh decides to look for other employment.
D. When Gordon decides to look for another agent.
A consumer has the right to claim an expedited credit if the customer asserts in good
faith that:
A. the bank charged the consumer’s account for a substitute check that was not given to
the consumer.
B. the check was not properly charged to the consumer’s account.
C. the consumer did not suffer a resulting loss.
D. the production of another substitute check is necessary to determine the validity of
any claim.
The morality of an action is determined by its ultimate effects according to
A. natural law theory.
B. role model ethics.
C. utilitarianism.
D. positive law theory.
Charles sold a house to Darla with Charles holding a recorded mortgage. Darla wants to
sell the house and her purchaser, Cindi, obtains a financing commitment from Small
Bank, provided Small Bank is able to hold a first mortgage on the house. How will
Small Bank obtain the first mortgage?
A. By paying off Darla’s mortgage.
B. Small Bank mortgages take priority over private mortgages.
C. Charles may give oral consent that Small Bank will have priority.
D. By paying off Charles’ mortgage.
Article III of the U.S. Constitution:
A. determines that a presidential term of office runs for six years.
B. states that Congress consists of the Senate and the House of Representatives.
C. provides for trial by jury for crimes.
D. establishes the principle of supremacy.
Mack, the father of two children, dies intestate. Under a typical statute, the rights of his
wife would include entitlement to:
A. one-half of the estate.
B. the entire estate.
C. one-half of the remainder of the estate plus $200,000.
D. no part of the estate.
Edward Philips signs a deed allowing the utility company to suspend power lines over
his land. This right of the utility company, to use Edward’s land for suspending power
lines, created by the deed is called a(n):
A. dominant tenement.
B. easement.
C. tenement.
D. servient tenement.
How does a bank verify the signature of its customers?
A. By the substitute check held by the bank for reference purposes.
B. By the signature card filled in by the customer when the account is opened.
C. By the signature provided in documents such as passports, ID cards, etc.
D. By the pin number provided by the bank with the ATM card.
Which of the following contracts are not voidable by minors at their option?
A. Executory contracts
B. Contracts for necessaries
C. Contracts with banks for educational loans
D. Contract to purchase land
The _____ is responsible for regulating the transportation and the wholesale price of
natural gas and electricity sold for use in interstate commerce.
A. National Transportation Safety Board
B. Federal Trade Commission
C. Federal Energy Regulatory Commission
D. Federal Communications Commission
In terms of written contracts, which of the following statements is true?
A. A written contract has to be a formal preprinted agreement.
B. A written contract cannot be keystroked or scrawled.
C. Sales slips and receipts are not forms of written contracts.
D. A written contract can be a notation or a memorandum.
_____ is an oral or written statement, promise, or other representation about the quality
of a product.
A. Express warranty
B. Guarantee
C. Quality assurance
D. Implied warranty
Laura has a tenancy at will apartment rental agreement with Management Apartments.
When Management sells the apartment complex where Laura lives, what is the legal
status of Laura’s apartment rental agreement in most states?
A. The rental agreement ends.
B. Laura could sue Management Apartments for selling the apartment without her
consent.
C. It continues if Laura gives written notice to both the old and new owners of her
desire to continue it.
D. It ends only if it had existed for less than one year.
According to Chapter 13 of the Bankruptcy Code, which of the following statements is
correct?
A. Involuntary filings are permitted.
B. Debtor should be able to pay entire amount they owe to each creditor.
C. Debtor must have an already established steady income.
D. Corporations and partnerships can file.
Webtel Services, Inc. and Acme Co. sign a document which states that Webtel Services
will create a web page for Acme and that Acme will pay for this work. This is an
example of a(n):
A. void contract.
B. unilateral contract.
C. express contract.
D. implied-in-law contract.
Under the ____, the courts generally accept into evidence only the original of a writing,
not a copy.
A. best evidence rule
B. parol evidence rule
C. standard construction rule
D. equal dignities rule
_____ is an alluring but insincere offer to sell a product or service that the advertiser
does not really intend to sell.
A. Sales puffery
B. Foot-in-the door scheme
C. Bait-and-switch scheme
D. Up-selling technique
A stop payment ordered by a drawer is valid:
A. for 30 calendar days only, if the order was made orally.
B. if it is received in time and in such a manner as to afford the bank a reasonable
opportunity to act on it.
C. for only one year, unless renewed in writing.
D. only on limited items payable on his/her account, and cannot be used for checks
with a value of $500 and above.
Which of the following is true of recording a mortgage?
A. A failure to record the first mortgage would remove the obligation of the mortgagor
to the first mortgagee.
B. The second mortgagee must know about the first mortgage and is exempted to
record the mortgage.
C. If the mortgage is not recorded and a later mortgage is given on the same property,
the old mortgage is superior to the second.
D. Recording a mortgage notifies any third party that the mortgagee has an interest in
the real property covered by the mortgage.
Daniel is a part of the Sky Inc. softball team slated to play in the corporate cup. While
playing a particular game Daniel is injured. What remedy, if any, does Daniel have for
his injury?
A. None, since he was not on his job at the time of injury.
B. Workers’ compensation is available.
C. Daniel may sue Sky and his supervisor for negligence.
D. Daniel only has recourse against any person who physically injured him.
Which of the following contains all the elements of a written agreement and that can be
enforceable under law?
A. “Henry Shay agrees to purchase hand-knit sweaters for $45 apiece. Signed, Henry
Shay.”
B. “Silvie Nader and Henry Shay are parties involved in this contract for the purchase
of hand-knit sweaters on Wednesday, June 17. Signed, Henry Shay and Silvie Nader.”
C. “Silvie agrees to mail six hand-knit sweaters, at $45 apiece, to the house on
Wednesday, June 17. Signed, Silvie Nader.”
D. “Agreement by Henry Shay and Silvie Nader. Henry agrees to purchase from Silvie
six of Silvie’s hand-knit sweaters at $45 each. Signed, Henry Shay.”
_____ is a defense to charges of criminal liability, as long as it destroys one of the
elements necessary to that crime.
A. Self-defense
B. Mistake
C. Battered spouse syndrome
D. Defense of others
A(n) _____ is a set of formal charges against the defendant issued by a grand jury.
A. arraignment
B. information
C. indictment
D. prosecution
When the misuse of the legal procedure involves the filing of a false civil lawsuit, it is
called:
A. wrongful civil proceedings.
B. malicious prosecution.
C. abuse of process.
D. invasion of privacy.
A _____ is a check drawn by one bank on another bank in which it has funds on deposit
in favor of a third person, the payee.
A. traveler’s check
B. treasurer’s check
C. cashier’s check
D. certified check
Tasha phones Robert and asks if she can borrow his vacuum cleaner to clean her
apartment before her parents visit. Robert agrees to this. But when Tasha goes to pick
up the vacuum, Robert refuses to give it to her. Which of the following statements is
true?
A. A bargained-for exchange has occurred, so Robert must loan Tasha the vacuum
cleaner.
B. A bargained-for exchange has not occurred, so Robert does not have to loan Tasha
the vacuum cleaner.
C. Robert has promised Tasha something of value, so he must loan her the vacuum
cleaner.
D. Robert has committed a breach of contract.
In a road rage incident, Jack aims a firearm at Reagan. No shots are fired and the
incident is over in less than 15 seconds. Reagan may sue Jack for:
A. assault.
B. battery.
C. juriscience.
D. disparagement.
Courts with the power to hear any type of case are said to exercise:
A. personal jurisdiction.
B. special jurisdiction.
C. general jurisdiction.
D. subject matter jurisdiction.
A _____ is a property right granted by the federal government to an inventor.
A. patent
B. copyright
C. royalty
D. trademark
Mina does not like the way the Adams Co. Production Union, which represents
employees at her Adams Co. plant, is representing her interests and wants to privately
negotiate her own contract with Adams Co. Which of the following statements is most
likely true?
A. Mina has the right to negotiate her own terms of employment.
B. Production Union represents Mina; hence she cannot negotiate her own contract.
C. Production Union only represents the workers who want to be represented.
D. Mina must have NLRB approval to negotiate her own contract.
Which of the following statements holds true for the Equal Pay Act of 1963?
A. Male and female employees must be paid equally irrespective of the work.
B. Male and female employees must have equal opportunities to work.
C. Male and female employees must be given substantially equal work.
D. Male and female employees must be paid equally for substantially equal work.
