Archives: Quiz

Banks may NOT assign their loan contracts to other firms. Bribery of foreign government officials is both an ethical and a legal issue. Answer: T Under the doctrine of respondeat superior, an agent is liable for the principal’s negligence. Answer: […]

If a seller repudiates a contract, the buyer’s damages do not have to be adjusted to reflect any expenses that were saved as a result of the breach. The identity of one of the parties to a contract is an […]

Torts are considered crimes. It is presumed that a co-tenancy is a tenancy in common unless it is clear that the parties intended to establish a joint tenancy. Answer: T A whistleblower is an employee who reveals confidential information about […]

In most situations involving sales, rights and liabilities are determined by who has the title to the goods. A course of performance is the conduct that occurs under the terms of a particular agreement. Answer: T Criminal law spells out […]

A corporation has perpetual existence in most states unless the articles of incorporation state otherwise. On request, a consumer may obtain the source of any information being given out by a credit agency. Answer: T A drawer who is induced […]

With a sale on approval, goods held on approval are subject to the claims of the buyer’s creditors before acceptance. The President appoints federal judges with the advice and consent of the Senate. Answer: T For an item to be […]

Joy steals a check from Kyle, forges his signature, and transfers the check to Loco Loans, Inc., for value. Unaware that the signature is not Kyle’s, Loco Loans presents the check to Metro Bank, the drawee, which cashes the check. […]

To determine whether a duty of care has been breached, a judge asks how a reasonable person would have acted in the same circumstances. Employees are entitled to overtime pay only at their employer’s discretion. Answer: F On default, unless […]

The Check Clearing in the 21st Century Act (Check 21) applies only in about 75 percent of the states. A law that limits the liberty of all persons may violate substantive due process. Answer: F The basis for an employee’s […]

A writ of execution is a writ that puts in force a court decree or judgment. An offer to form a bilateral contract is accepted only by promising to perform the contract performance. Answer: T A partner owes a partnership […]

Corporations can be good citizens by promoting goals that society deems worthwhile. The American Law Institute was the only organization involved in developing the Uniform Commercial Code. Answer: T A finder of abandoned property acquires title to it, and the […]

Unconscionable means unethical or unfair. In a bilateral contract, communication of acceptance is necessary. Answer: T An agency relationship may occur by operation of law in a family. Answer: T If it can be shown that a trespass to land […]

To establish a prima facie case of discrimination under Title VII, a plaintiff need not show that discriminatory intent motivated an employer’s decision. There are no exceptions to the employment-at-will doctrine. Answer: F Multi Investments, Inc., offers to buy Nano […]

The judicial branch has the power to hold actions of the other branches of government unconstitutional. Downloading software or music into a computer’s random access memory without authorization is copyright infringement. Answer: T A union may threaten an employee with […]

The Pure Food and Drug Act of 1906 was Congress’s first attempt to protect consumers against the dangers of cigarette smoking. Monopoly power is a minor amount of market power. Answer: F A contract must be in writing to be […]

In today’s world, many business leaders find it difficult to create an “ethical tone” that deters unethical conduct in their workplaces. A close corporation can operate as an S corporation. Answer: T The test for whether an advertisement is deceptive […]

A design defect is not the sort of product defect that will support the imposition of liability on a strict product liability basis. An expression of opinion will usually create a warranty. Answer: F The holder of a life estate […]

Defense of others is a defense to an allegation of battery, but not assault. If no time for acceptance is specified in an offer, the offer terminates after a reasonable length of time. Answer: T The federal government and the […]

Dividends can be paid only in stock in other corporations. A director does not need to disclose any conflict of interest before voting on a proposal. Answer: F A mechanic’s lien is possessory. Answer: F Tangible property has physical existence. […]

Consent is a defense to an allegation of both assault and battery. A third party’s right to control the details of performance of a contract indicates that the third party is an intended beneficiary. Answer: T Federal legislation can affect […]

It is estimated that over 25 percent of the goods imported to the United States are counterfeit. All states require physicians to be licensed. Answer: T Norwest Trucking Corporation files a suit in a state court against Bob’s Service Company […]

The initial board of directors of a corporation is normally elected at the first annual shareholders’ meeting by a majority vote of the shareholders. Promises of fact made during the bargaining process are express warranties. Answer: T Starting a sole […]

Punitive damages are generally available in contract disputes. Adequacy of consideration refers to how much consideration is given. Answer: T Defeasible means capable of being terminated. Answer: T Pam borrows $5,000 from Quality Auto Sales to buy a car. When […]

Unless a contract provides otherwise, it is assumed to be a shipment contract. A testator cannot revoke a will by burning it. Answer: F Criminal acts are prohibited only by federal government statutes. Answer: F The UETA covers only e-records […]

Every contract involves at least two parties. An offer made in obvious anger is still an effective offer. Answer: F An online offer should NOT include provisions identifying applicable statutes of limitations. Answer: F The rights that accompany a fee […]

A quasi contract is not enforceable by a court. If no heirs are found, the property of a decedent is transferred to a charitable organization. Answer: F An arbitration clause requires arbitration of disputes that arise between the insurer and […]

In some states, an otherwise unenforceable oral contract may be enforced under the doctrine of promissory estoppel. Misrepresentation of an opinion is an element of fraud. Answer: F There are no revocable offers. Answer: F Proximate cause exists when the […]

A minor may disaffirm a contract only if the subject matter is illegal. Corporations can be perceived as owing ethical duties to groups other than their shareholders. Answer: T Legal sufficiency of consideration is the same as adequacy of consideration. […]

Most advertisements”this property for sale”are offers. An intended beneficiary can sue directly to enforce a promisor’s promise. Answer: T A circular letter is NOT evidence of an intent to enter into a contract. Answer: T The government cannot take private […]

A copyright owner must place a or an on the work to have the work protected from copyright infringement. Statutes often prescribe the terms of contracts. Answer: T Some companies set up confidential systems for employees to “raise red flags” […]

Only personal contracts can be discharged by agreement of the parties. A notice of sale is usually published in a newspaper. Answer: T The United States Supreme Court has original jurisdiction in some situations. Answer: T A tariff is always […]

A business that holds itself out as being a corporation may not deny corporate status, even if it makes no attempt to incorporate. Employees who deal with third parties are agents of their employers. Answer: T Hawk Corporation begins making […]

A party who substantially performs his or her duties under a contract can enforce the contract against the other party. An express contract need not be in writing. Answer: T One of the requirements to be a holder in due […]

Food is one of the things that courts define as a necessary. The maximum rate of interest is same in every state. Answer: F The managers of a limited liability company must be members. Answer: F State or local law […]

The Eighth Amendment prohibits excessive bail and fines, as well as cruel and unusual punishment. Predatory pricing involves selling a product at prices substantially above the fair market value. Answer: F A will is a final declaration of how a […]

When a statute protects a certain class of people, a member of that class cannot enforce an illegal contract. The term cure refers to the right of the buyer to reject, adjust, or replace nonconforming goods. Answer: F In general, […]

An agreement is NOT one of the requirements of a valid contract. The main purpose of the Fair Debt Collection Practices Act is to ensure that creditors are always paid by debtors. Answer: F A formal will must be signed […]

For a will to be valid, the testator must remember the names of family and friends included in the will. A transfer of the premises for a period shorter than a lease term by either the landlord or the tenant […]

A contract must be in writing to be enforceable if it makes performance possible only over a period of more than one year. Today, most checks are processed manually. Answer: F A voidable contract is a valid contract that can […]

The President determines the jurisdiction of the federal courts. Diversity of citizenship cases are only those arising between a foreign country and citizens of a state. Answer: F The Consumer Product Safety Commission prohibits manufacturers from marketing products that are […]

Global Services Corporation engages in trade practices that may violate antitrust law. The Federal Trade Commission has the power to act against unfair trade practices under a. the Clayton Act. b. the Federal Trade Commission Act. c. the Sherman Act. […]

Mark is creating a Web site through which he will enter into contracts over the Internet. Important terms to include in his offers include a. provisions specifying the remedies if the contract is breached. b. a detailed history of his […]

Nature’s Products, Inc., sends its standard order form to Interbusiness Distribution Corporation (IDC) to evidence a sale of packing materials. IDC responds with its own standard purchase order form. Additional terms in the purchase order automatically become part of the […]

Patsy possesses twenty-four acres of remote, rugged land. Patsy has the right to use the property, including extracting silver from an existing mine, for life. Patsy also has the right to lease the land for a period not to exceed […]

Mary is angry with Julia so she waits outside Julia’s house and hits Julia with a baseball bat as Julia leaves the house. When Julia sues Mary for battery, Mary will be considered a a. victim. b. tortfeasor. c. plaintiff. […]

As a joke, Jem takes Kyla’s business law textbook and hides it so that Kyla cannot find it during the week before the exam. Jem may have committed a. appropriation. b. conversion. c. disparagement of property. d. trespass to personal […]

Ray is a minor who borrows $1,500 from Savings Bank and buys an insurance policy from Tristate Insurance Company. Under some circumstances, Ray can disaffirm the contract for a. the loan only. b. the insurance policy only. c. both the […]

Under the national taxing power, Congress may NOT a. tax the sale of clothing in all states. b. tax the sale of food in all states. c. enact a graduated income tax. d. exempt certain states from a federal tax. […]

Geoffrey does not qualify for a standard mortgage. He can apply for a. a balloon mortgage. b. an interest-only mortgage. c. a subprime mortgage. d. a construction loan. Klondike and Leola own 10,000 shares of stock in My-T Gro Corporation. […]

InTown Delivery Service promises to deliver a certain couch to Kurt, who promises to pay for the service. If InTown does not perform, it may be required to a. do nothing. b. make another promise. c. pay money damages. d. […]