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Which of the following is needed for a valid gift?
A. Delivery
B. Donative intent
C. Acceptance
D. Delivery, donative intent, and acceptance
E. Delivery and donative intent, but not acceptance
Which of the following is true regarding warranties under common law?
A. Warranties must be asked for by the buyer.
B. Only the implied warranty of assignability automatically arises under common law.
C. Only implied warranties of merchantability automatically arise under common law.
D. Only warranties of title automatically arise under common law.
E. Express warranties, implied warranties of assignability, and warranties of title all
automatically arise under common law.
Which of the following is false regarding certified checks?
A. If a bank refuses to certify a check, the check is considered dishonored.
B. Once a check is certified, funds of the customer are removed from his or her account
and placed in the bank's certified check account.
C. If a bank certifies a check, the drawer of the check is no longer liable for the amount
of the check.
D. If a bank certifies a check, the bank has become primarily liable for the check.
E. All of these are false.
What was the result in the case nugget, Lefkowitz v. Great Minneapolis Surplus Store
Inc., involving an advertisement for the sale of fur coats?
A. The court ruled that the advertisement was not an offer because it involved a luxury
good.
B. The court ruled that the advertisement was an offer but that the customer who was
suing had not properly accepted it.
C. The court ruled that the advertisement was not an offer because it was a ridiculously
low offer that the plaintiff should have known was not to be taken seriously.
D. The court ruled that the ad was not an offer because ads are never offers, only
invitations for customers to make an offer.
E. The court ruled that the ad was an offer and that the plaintiff properly accepted it.
Which of the following is the legal enforcement of an otherwise unenforceable contract
due to a party's detrimental reliance on the contract?
A. Promissory estoppel
B. Substantial estoppel
C. Promissory rule
D. Reliance rule
E. Promissory reliance
Laws which enable a court to serve a defendant outside the state as long as the
defendant has sufficient minimum contacts within the state and it seems fair to assert
jurisdiction are called ______.
A. minimum contact statutes
B. significant contact statutes
C. long-arm statutes
D. in rem statutes
E. There are no such laws
DUI Charge. Monique was licensed to train massage therapists. A new federal agency,
the Aesthetic and Massage Commission, took very seriously its role of enforcing the
statute enabling the Commission to do its work and providing that licensed massage
therapists must refrain from "any act or conduct indicating bad faith, incompetence,
dishonesty, or improper dealing." Monique, while driving home late one night from a
party, was stopped by the police and arrested for driving under the influence of alcohol.
She pled guilty to the offense. When the Aesthetic and Massage Commission
discovered the offense, the officials of the agency met, decided that Monique might
drink on the job, and that she might pose a danger to students. Accordingly, her license
to teach massage therapy was revoked. Monique threatened to sue to retain her license
and was told by the agency head that she had no right to appeal to court because of the
nature of the Aesthetic and Massage Commission; and that, in any event, action by an
agency is always upheld. Which of the following is true regarding the statement by the
agency that assuming an appeal to court is available, agency action is always upheld?
A. The agency representative is essentially correct because agency decisions are upheld
in over 99% of the cases and may only be overturned if fraud on the part of the agency
is proven.
B. The agency representative is incorrect because agency decisions are usually struck
down unless they are supported by clear and convincing evidence.
C. The agency representative is incorrect because agency decisions are usually struck
down unless it can be established that an appeal of an agency decision is frivolous and
without reason.
D. The agency representative is incorrect because agency decisions are struck down in
approximately 50% of the cases on appeal.
E. The agency representative is incorrect because while agency actions are usually
upheld, they may be struck down if the agency, for example, exceeded its power.
Which of the following is a contractual party who agrees to receive something from the
other party?
A. Obligor
B. Obligee
C. Assignor
D. Assignee
E. Boundee
Refusal to Pay. Business law teacher, Debby needed some yard work done. She told her
class that she would give $50 to the first person who mowed her yard. She also entered
into an agreement with Brenda to trim some shrubbery for $40. Max went to mow
Debby's yard. Unfortunately, just as he finished mowing, a neighborhood dog bit him,
and he had to go to the emergency room for a couple of stitches. Debby refused to pay
Max on the basis that the agreement was not in writing and that Max ended up being
more trouble than he was worth. Max refused to pay the emergency room because he
said that they did not have a binding, bilateral contract. Brenda refused to trim the
shrubbery because she got a better offer and claimed that she was not bound on the
contract until she started to perform. Which of the following is correct regarding
Brenda's statement that she was not bound on any contract?
A. Brenda is correct. There was no contract because she had not started working.
B. Brenda is incorrect because there was a bilateral, express agreement.
C. Brenda is incorrect because there was a bilateral, implied agreement.
D. Brenda is incorrect because there was a unilateral, express agreement.
E. Brenda is incorrect because there was a unilateral, implied agreement.
______________________ is a business that exists because of an arrangement between
the owner of a trade name or trademark and a person who sells goods or services under
the trade name or trademark.
A. Joint venture
B. Franchise
C. Joint partnership
D. Consensual seller
E. Approved arrangement
A person who commits a tort is often referred to as a ______________.
A. tortfeasor
B. guiltfeasor
C. criminal
D. runaway defendant
E. nominal defendant
Which of the following is another name for debt securities?
A. Stocks
B. Bonds
C. Certificates of deposit
D. Stocks, bonds, and certificates of deposit
E. Stocks and bonds, but not certificates of deposit
The UCC was created in _____.
A. 1980
B. 1964
C. 1952
D. 1943
E. 1935
Under UCC Section 3-103(a)(6), an order by a drawer to a drawee to pay a payee is
known as a ______________.
A. note
B. draft
C. novation
D. check
E. certificate of deposit
Which of the following is available to Garrett, a major shareholder in ABC Corporation
who believes that the corporation has wrongfully failed to declare a dividend to
shareholders?
A. A shareholder's derivative suit
B. A shareholder's direct suit
C. A consolidation suit
D. A mandated suit
E. None of these because as a shareholder, Garrett can only complain to state authorities
A corporation is a(n) _____ corporation in states in which it conducts business but is
not incorporated.
A. visiting
B. foreign
C. interstate
D. intrastate
E. approved
___________________ prohibits fraud associated with the purchase or sale of all
securities.
A. Section 32(c)
B. Section 15(b)
C. Rule 10b-5
D. Rule 5(c)(2)
E. Rule 2(c)(5)
Claims to Funds. Paul had a great job as a bank executive. Unfortunately, his bank
came under scrutiny by federal regulators and while Paul had done nothing illegal, he
ended up being fired. Unfortunately for Paul, he had a number of debts. Among his
assets were a house worth $250,000 on which he owed $150,000 to a bank that held a
security interest; three vehicles; an expensive watch worth $5,000; and $120,000 in an
Individual Retirement Account "IRA". He owed $900 per month in child support to his
ex-wife Suzy and was behind on payments in the amount of $1,800. He also owed
$2,000 in wages consisting of four months of back pay to Bob who took care of Paul's
landscaping needs and swimming pool care. Unable to find a job and believing that he
had no other option, Paul filed for Chapter 7 bankruptcy. All debtors angrily demanded
payment from liquidation of Paul's assets. Paul, on the other hand, claims that he needs
all the above-mentioned assets and that he should not have to give up anything. Only
federal bankruptcy exemptions apply to Paul's case. Which of the following is true in
regard to Paul's claim to his IRA account?
A. The IRA is entirely exempt from claims of creditors.
B. The IRA is entirely subject to claims of creditors.
C. The IRA is exempt up to $1,000.
D. The IRA is exempt up to $10,000.
E. The IRA is exempt up to $100,000.
A ______ prospectus has a warning written in red print at the top of the page warning
investors that the registration has been filed with the SEC but has not yet been
approved.
A. red-line
B. red-herring
C. red-fish
D. bait
E. None of these because a prospectus may not be issued prior to approval
A(n) _____ contract is one requiring complete performance by both parties, even if it
appears as if the contract contains multiple parts.
A. adhesion
B. divisible
C. justifiable
D. indivisible
E. independent
Under which of the following does a principal give authority to an agent only for the
specific areas or purposes listed in the agency agreement?
A. A general power of attorney
B. A specific power of attorney
C. A localized power of attorney
D. A broad power of attorney
E. A recognized power or attorney
Which of the following will be considered a personal defense to payment of an
instrument?
A. Breach of contract or warranty
B. Fraud in the inducement
C. Illegality
D. Breach of contract or warranty, fraud in the inducement, and illegality
E. Illegality and lack or failure of consideration, but not breach of contract or warranty
In a bilateral contract, the consideration for each promise is ______.
A. a completed act
B. the beginning of action in acceptance, even if it is not complete
C. an acknowledgement
D. a return promise
E. an agreement
Which of the following is a way that a corporation can avoid double taxation?
A. By forming a C corporation
B. By forming a D corporation
C. By forming an S corporation
D. By forming an F corporation
E. None of these because there is no double taxation problem with corporations
Express conditions are usually preceded by which words?
A. Conditioned on or if
B. If or when
C. Provided that, if, or when
D. When or provided that
E. Conditioned on, if, when, or provided that
Wrecked Furniture. Ralph buys new furniture for his living room from Good Times
Furniture. It is agreed that the goods will be placed with a common carrier for delivery.
The contract between Ralph and Good Times is ambiguous regarding whether the seller
had the duty to deliver the goods only to the common carrier's hands or whether the
seller had the duty to deliver the goods to Ralph's home. Unfortunately, on the way to
Ralph's home, through no fault of the delivery driver, the delivery truck wrecked and
the furniture was significantly damaged. Which of the following is true regarding the
risk of loss at the time the goods were damaged?
A. The risk of loss was with the furniture store.
B. The risk of loss was with Ralph.
C. The risk of loss was split 50-50 between Ralph and the furniture store.
D. The risk of loss was with Ralph only if the driver is determined to be an agent of the
furniture store.
E. The risk of loss was with the furniture store only if the driver is determined to be an
agent of the furniture store.
Which of the following is a term used in bankruptcy for debtors who cannot pay their
debts in a timely fashion?
A. Statutory debtors
B. Insolvent debtors
C. Owners
D. Transactors
E. Acknowledged transactors
The question of whether a worker is an employee or an independent contractor has
important implications in which of the following areas?
A. Workers' compensation
B. Workplace safety
C. Unemployment statutes
D. Workers' compensation, workplace safety, and unemployment statutes
E. Workers' compensation and workplace safety, but not unemployment statutes
If it is generally accepted in the trade that a certain product is always preassembled and
shrink-wrapped, the failure of the seller to deliver the goods in that condition would be
a breach of the ______.
A. implied warranty of merchantability
B. implied warranty of fitness for a particular purpose
C. implied warranty of trade usage
D. implied warranty of merchantability, implied warranty of fitness for a particular
purpose, and implied warranty of trade usage
E. implied warranty of merchantability and implied warranty of trade usage, but not the
implied warranty of fitness for a particular purpose
Which of the following are nondischargeable debts under a Chapter 7 bankruptcy
filing?
A. Claims of willful or malicious conduct by the debtor that caused injury to another
person or property.
B. Specific student loans, unless payment of the loans imposes undue hardship on the
debtor.
C. Debts not discharged in previous bankruptcies.
D. Judgments against a debtor for claims resulting from the debtor's drinking and
driving.
E. All of these.
Which of the following is true regarding corporate executives being held personally
liable for business crime?
A. Corporate executives may never be held personally liable for a business crime.
B. Corporate executives may only be held personally liable for a business crime if they
benefited personally from their actions in executing the business crime.
C. Corporate executives may be found personally liable for a business crime regardless
of whether the business crime was committed for personal benefit or for the benefit of
the corporation.
D. A court may not assess criminal liability on a corporate executive unless the
executive directly engaged in the specific criminal violation.
E. Criminal liability may not be assessed against a corporate executive unless the
executive directly engaged in the criminal activity and also profited directly and
personally from the criminal activity.
With which of the following does a government website address end?
A. .gov
B. .edu
C. .net
D. .org
E. .com
