Archives: Quiz

Negotiable instruments are: a. formal contracts. b. informal contracts. c. option contracts. d. first-refusal agreements. Which of the following statements is incorrect about fixtures? a. Personal property may become a fixture by annexation to the realty. b. Personal property may […]

A negotiable promissory note was issued by Gold. It was properly issued in all ways. Nevertheless, the payee managed to alter the note and raise the amount from $500 to $5,000. A holder in due course presented the note for […]

Employee e-mail is: a. spontaneous. b. candid. c. discoverable. d. all of the above. If a man names his wife as beneficiary of his life insurance and the two are thereafter divorced, the insurance policy: a. is canceled automatically. b. […]

Which of the following powers is not reserved solely to the national government? a. power to regulate interstate commerce b. power to tax c. power to coin money d. power to borrow money on the credit of the United States […]

The bailor must both inform the bailee of known defects and make a reasonable investigation to discover defects in a: a. mutual benefit bailment. b. Bailment for the sole benefit of the bailee. c. both a. and b. d. neither […]

A rule requiring that a franchisor provide a disclosure statement to all prospective franchisees was adopted by the: a. UCC. b. Franchise Tax Board. c. Securities and Exchange Commission. d. Federal Trade Commission. A contract under which one or both […]

The term “exhaustion of administrative remedies” means that: a. parties to an agency action must be diligent in pursuing their case. b. parties to an administrative action must take their appeal to a court of law. c. parties to an […]

An offer to perform is known as a(n) __________. a. rendering b. offering c. tinder d. tender An employer may be justified in discharging an employee because of the employee’s: a. nonperformance of duties. b. incompetency. c. serious misconduct. d. […]

When a person makes a contract as an agent for another but lacks authority to do so, the contract: a. binds the principal but not the agent. b. binds the principal and the agent. c. does not bind the principal. […]

The right of an employee to pension benefits paid into a pension plan in the employee’s name by the employer is referred to by the term: a. venue. b. accrual. c. vesting. d. investing. Partners hold title to firm property […]

An assignee of a partner’s interest does not become a partner without the consent of the other partners and is only entitled to: a. participate in the management of the partnership. b. receive the assignor’s share of the profits during […]

Theoretically, the relationship between a franchisor and a franchisee is one of: a. parent and subsidiary. b. an “arm’s-length” relationship between two (2) independent contractors. c. an “arm’s-length” relationship between two (2) partners. d. an “arm’s-length” relationship between two (2) […]

The FTC rule, which provides that a notice provision must be included in all consumer credit contracts, requires that the notice: a. limit recovery under the contract to amounts paid by the debtor plus a reasonable charge for incidental damages. […]

Under the Revised Uniform Limited Partnership Act, a limited partner probably will not lose the protection of limited liability when the limited partner: a. becomes a contractor for, or an agent or employee of, the limited partnership or of a […]

The Fifth Amendment to the United States Constitution’s protection against self-incrimination applies to: a. individuals only. b. corporations only. c. both individuals and corporations. d. individuals, but only in their official capacity within a business. Which of the following does […]

The concept of imposing liability for the fault of another is known as __________ liability. a. imperious b. gregarious c. vicarious d. virtual Whatever is received upon the sale, exchange, collection or other disposition of collateral is known as: a. […]

Anderson Clock Company is in the business of selling and repairing clocks. Jay purchased a grandfather clock from them. Laurie had left the clock at Anderson’s for a cleaning and calibration. When Laurie found out the clock had been sold, […]

Exchanging pirated, copyrighted works with others is not a crime unless money is involved. A business firm may have to comply with the laws of any jurisdiction in which it actively targets customers. Answer: T Performance that provides a party […]

A suspect cannot be tried twice in the same court for the same crime. The purpose of the exclusionary rule is to encourage criminals to provide exclusive evidence of their crimes. Answer: F Ratification occurs when a principal accepts responsibility […]

Congress can only pass legislation that falls within the limits set up by the U.S. Constitution. Tropical Vittles, LLC, hires Sophie to act as its agent to buy a ten-acre tract of land from Rico for $1,000 per acre. Tropical […]

Corporate ethical policies must be clearly communicated to be effective. Misrepresentation of an opinion is an element of fraud. Answer: F Consequential damages are awarded to cover all of the remote consequences of whatever injury a nonbreaching party suffers. Answer: […]

Common law is the best and only source of legal authority. Any crime committed with a computer is a cyber crime. Answer: F Remedies of the agent for breach of duty by the principal follow normal contract and tort remedies. […]

A buyer has an insurable interest in identified goods. Article 2 of the UCC governs contracts for sales of goods. Answer: t Under the Statute of Frauds, oral contracts are void. Answer: F If a contractual promise is not fulfilled, […]

Unless a contract provides otherwise, it is assumed to be a destination contract. Under their police powers, states can regulate private activities to protect or promote the public order, health, safety, morals, and general welfare. Answer: T A person who […]

Flossy promises to pay her cousin Garth, who is dangerously obese, $10,000 if Garth loses 100 pounds within the next two years. Garth agrees, performs his part of the bar- gain, and asks for the money. Flossy refuses to pay, […]

A buyer who accepts nonconforming goods cannot revoke the acceptance. Under the UCC, the validity of a contract depends on its price term. Answer: F A promise to do something that one has a prior legal duty to do is […]

To rescind a contract for fraud, a plaintiff must prove an injury. If it can be shown that a trespass to personal property was warranted, a complete defense exists. Answer: T One guideline to evaluating the ethics of a particular […]

A receipt issued by a warehouser for goods stored in a warehouse is a bill of lading. A contract between Kwik Import Company in Los Angeles and Macro Retail Corporation in New York does not expressly state which party bears […]

A bilateral contract comes into existence at the moment an offer is made. A minor may disaffirm a contract only if the subject matter is illegal. Answer: f Americans with a Better Cause (ABC), a nonprofit organization, files a suit […]

Trademark dilution requires proof that consumers are likely to be confused by the unauthorized use of a mark. Normally, when a nonbreaching party has been damaged by a breach of contract, he or she has a duty to mitigate those […]

Vishing is phishing that involves voice communication. A quasi contract is a true contract. Answer: f An implied contract is not an actual contract. Answer: F Apparent authority arises from what the principal makes clear to the agent. Answer: Answer: […]

If a buyer breaches a contract while the seller is still in possession of the goods, the seller can resell the goods and hold the buyer liable for any loss. Alternative dispute resolution refers to any method for resolving a […]

A release does not require consideration to be legally binding. Proximate cause exists when injuries sustained were too remotely connected to an incident to trigger liability. Answer: F A party who substantially performs his or her duties under a contract […]

The use of a person’s likeness for commercial purposes without permission is not an invasion of privacy. Ordinarily, “ignorance of the law is an excuse,” or a valid defense to criminal liability. Answer: F If a contract for a sale […]

An integrated contract is the final embodiment of the terms of an agreement. A contract may include a clause stating that no damages can be recovered for a certain type of breach. Answer: T Unforeseen difficulties that justify a demand […]

The purpose of tort law is to punish criminal wrongdoers. A defense available in an action based on a negligence theory is that the plaintiff failed to prove one or more of the required elements. Answer: T A reasonable, lawful, […]

Ben and Ivy enter into a contract under which Ben agrees to cater Ivy’s wedding in exchange for a cash down payment. The contract expressly prohibits any transfer of rights. A contract right may be transferred, however, if the transfer […]

At a prison in Ohio, inmate Steve recruits other inmates to play Towers & Trolls, a potentially violent, fantasy, role-playing game. Ryan, the prison’s warden, confiscates the game materials and bans its play at the prison. Under the principles discussed […]

Michelle gives out a business card with an e-mail address on it. According to the comments that accompany the UETA, it may be reasonable to infer that Michelle has consented to a. transact business electronically. b. submit to the jurisdiction […]

Business Properties, Inc. (BPI), offers to sell a warehouse to Corporate Investments. Corporate says that it will pay BPI $100 to hold the offer open for three business days. This a. creates an illegal contract by adding a clause to […]

Business Rental Corporation (BRC) and Cartage Trucking Company enter into a contract for a lease of ten hydraulic lifts. Under the perfect tender rule, BRC must ship or tender goods to the lessee that a. approximately conform to all of […]

The River City Council, the Santa Clara County Board, the Texas state legislature, and the U.S. Congress enact laws. These laws constitute a. administrative law. b. case law. c. stare decisis. d. statutory law. Glen is an agent for Hi-Flite, […]

Sable and Rex agree while talking on the phone to form a partnership to deal in transfers of real property. Their partnership agreement is legally binding a. only if a copy of the agreement is filed in the appropriate state […]

Convenience Mart, Inc., is a closely held corporation. Convenience Mart is a. eligible to make public offerings of securities. b. exempt from filing a certificate of incorporation. c. generally allowed to restrict the transfer of its stock. d. taxed in […]

Minka uses her computer to secretly install software on hundreds of personal computers without their owners’ knowledge. Minka’s secretly installed software allows her to forward transmissions from her unauthorized network to even more systems. This network is a. a hacker. […]

In Export Co. v. Imports, Inc., there is no precedent on which the court can base a decision. The court can consider, among other things, a. neither public policy nor social values. b. public policy only. c. public policy or […]

Summit Supply Company contracts for a sale of medical equipment to Valley Immediate Care Corporation. Summit can enforce its right to payment a. only after Valley has actually inspected the goods. b. only after Valley has had an opportunity to […]

Gary threatens physical harm to force Hugh to sell his business, Imported Goods, Inc., to Gary for a below-market price. This is a. duress. b. fraud. c. puffery. d. undue influence. The Alabama Consumer Protection Agency (ACPA) investigates the marketing […]

Omni Corporation is a Pennsylvania-based firm that does business throughout the United States. With respect to this circumstance, the UCC has been adopted by, and applies in, a. a few of the states. b. all of the states, in whole […]

Brad defends against a breach-of-contract suit by College Credit Corporation by claiming that their deala student loan accruing interest at a certain rate and payable beginning on a certain datewas unfair because the consideration for their contract was inadequate. “Adequacy” […]