Archives: Quiz

Plaintiffs suing for damages caused by a defective product are limited to taking action only against the manufacturer(s) of such goods. Mediation is a generally accepted method of resolving disputes. Answer: T If a common carrier delivers goods to the […]

“Permissive” subjects of bargaining include seniority provisions, promotions, layoff and recall provisions, no-strike no-lockout clauses, and grievance procedures. As a result of pressure from the United Nations Conference on Trade and Development (UNCTAD), the General Agreement on Tariffs and Trade […]

The process of incorporation involves the expenditure of funds for organizational expenses. A reward offered to the public for the return of lost property is not considered an offer. Answer: F A limited liability company may hold property in its […]

Every limited partnership must have at least one general partner. When Gordon told Hanson that he was considering selling his house, Hanson offered to buy it. Gordon and Hanson entered into a contract in which Hanson paid Gordon $1,000 in […]

Motive is an essential element of tort liability. A principal is not bound by statements made by an agent during the transaction of business that is within the scope of the agent’s authority. Answer: F A person has apparent authority […]

A letter of credit cannot extend for a period of more than five (5) years. Ames, an agent for Baker Antiques, had the authority to purchase early 20th-century American furniture costing a maximum of $1,500 per piece. Ames bought a […]

A check may be certified by a bank on request of the drawer or the holder. Changes to the Constitution have been brought about by interpretation, amendment, and practice. Answer: T A payment by a debtor in the ordinary course […]

By virtue of an agency, one person can make contracts at numerous places with many different parties at the same time. The Equal Pay Act prohibits variation in wage rates paid to men and women based solely on gender. Answer: […]

Shares of stock may not be acquired through subscription but may be acquired through a transfer of existing shares from a shareholder or from the corporation. An oral agreement to supply a line of credit for two (2) years cannot […]

In states that follow the community property tradition, property acquired after the marriage belongs solely to the party who acquired it. By operation of law, a party can be discharged in bankruptcy from debts. Answer: T If a contract contains […]

A firm offer is effective only if the merchant receives consideration to keep the offer open. Even if part of a contract is illegal, the court may enforce a divisible, legal part of the contract. Answer: T Property includes the […]

Pamela was the agent in charge of distribution and collections for the Coble Dairy Products Cooperative. Thrower operated a grocery store and purchased dairy products from Coble. Pamela made false invoice sheets, showing delivery to Thrower of greater quantities than […]

When parties contract expressly for a particular subject matter, the contract is discharged if the subject matter is destroyed through no fault of either party. State laws that attempt to indemnify corporate directors against personal monetary liability for gross negligence […]

A right to a nonconforming use of land cannot be lost through abandonment. The promise of a creditor to refrain from collecting a debt is consideration for a promise by the debtor to modify the terms of the transaction. Answer: […]

Making improvements is a duty that falls on the tenant. An administrative agency is a governmental body charged with administering and implementing legislation. Answer: T Ordinarily, a party to a contract has no duty to volunteer information to the other […]

Under the tort of false imprisonment, shopkeepers are prevented from detaining anyone whom they believe has shoplifted. If an offer is indefinite or vague, no contract arises from an attempt to accept it. Answer: T The parol evidence rule prohibits […]

A custodian who holds money for the benefit of a minor under the Uniform Gifts to Minors Act may choose to use the money to send the minor to summer camp. Depositions are usually taken in the courtroom. Answer: F […]

An agreement that does not specify the time for performance is not binding because it is too indefinite. A consumer may waive all defenses otherwise provided for by law. Answer: F A holder through a holder in due course is […]

The often competing rights of both debtors and creditors are balanced and protected from excesses under United States law. A party that rescinds a contract without proper grounds for rescission is liable for damages for breach of the contract. Answer: […]

The Jarvis family owned its land for more than 150 years. The Jarvis family traditionally farmed the land and for that purpose maintained farm animals. As years passed, most of the surrounding farms were sold by the owners and the […]

A merchant has greater potential warranty liability than does a casual seller. Courts will likely protect important customer lists under trade secret laws even if customer identities are determinable from other sources. Answer: F An entity not in privity with […]

Proof of substantial impairment of the value of a contract to the buyer is required to justify revocation of acceptance. Under the majority view, a contract that does not satisfy the statute of frauds is voidable. Answer: T In a […]

Details of performance of a contract not expressly stated in a contract will often be implied by the court. The Constitution took certain powers away from the national government and gave them to the state governments. Answer: F A will […]

Under the “close-connection” doctrine, a holder has taken so many instruments from its transferor or is so closely connected with the transferor that any knowledge the transferor has is deemed transferred to the holder, preventing holder in due course status. […]

Franchising is a form of licensing that now is very common in international business. Roxy is employed as a manager at “com.com,” an Internet-based company attempting to compete successfully in the highly competitive software development industry. Roxy is concerned that […]

A tort is a wrong arising from a violation of a private duty. If the finance company to which a seller of goods on credit assigns the buyer’s promissory note is more than half-owned by the seller, the finance company […]

A cured transaction is a pledge of property by the buyer-debtor that enables the seller to take possession of the goods if the buyer fails to pay the amount owed. The living Constitution has as a characteristic a strong president. […]

The Americans With Disabilities Act prohibits employers from discriminating against disabled individuals, but does not require that any accommodations be made for such individuals. If a bank improperly refuses to make payment of checks for which its customer has sufficient […]

A written will must be signed by the testator at the bottom or end of the will. The greatest change to the Constitution has been made by the United States Supreme Court through interpretation. Answer: T The property that is […]

The right to sue for damages sustained from a defective product is reserved exclusively to the buyer of such goods. Most states permit action to be taken by the board of directors without holding an actual meeting. Answer: T A […]

A holder having the rights of a holder in due course is subject to the defense of fraud in the inducement. Impossibility of performance applies when the debtor does not have sufficient funds to pay a debt. Answer: F A […]

Heterogeneous goods are goods that, when mixed together, are indistinguishable. As a general rule, the nondisclosure of information that is not asked for does not impose fraud liability or impair the validity of a contract. Answer: T In most bilateral […]

Humberto called his friend John and asked him to come over immediately because Humberto had suffered a stroke and might be dying. In their telephone conversation, Humberto advised John that he wanted to give John his gold watch. Immediately after […]

Commercial exploitation is a form of invasion of privacy. Any warranty that does not provide the complete protection of a full warranty is called a warranty in breach. Answer: F Upon acceptance of a subscription after incorporation, the subscriber immediately […]

True consideration occurs only when the value of one promise is equal to the value of the promise given by the other party. Jane asserts she has a legal right. Jane is really saying she has an obligation to perform […]

An owner of a copyright may license some of his or her rights to another in exchange for statutorily-prescribed royalty payments. The principal is bound by knowledge but not by notice of any fact that is acquired by an agent […]

Both drafts and promissory notes may have the quality of negotiability. An after-acquired property clause in a consumer security agreement can cover only goods acquired by the debtor within thirty (30) days after the creditor gave value to the debtor. […]

The liability of a buyer for the purchase price of goods is terminated by the fact that the buyer gave the buyer’s agent the purchase price to remit to the seller. A new state law mandates that all employers must […]

Any shareholder owning more than five (5) percent of any class of the corporation’s equity securities is statutorily defined as an insider and must file with the SEC a disclosure statement regarding such ownership and all related transactions. There is […]

Unconscionability and fraud are synonymous terms. A holder of a negotiable instrument cannot be a holder in due course when the holder learns of a defense to payment after the acquisition of the instrument. Answer: F Bob Brown entered the […]

The defendant in a civil case is the party who is suing. The FTC requires advertisers to maintain records of the data used as support for statements made in the ads that deal with the safety, performance, efficacy, quality, or […]

Administrative agencies may make the rules, police the community to see the rules are obeyed, and sit in judgment to determine violations of their rules. Copying trademarks by using the Internet is an intellectual property issue. Answer: T The Willett […]

A deed, like a contract, must be supported by consideration to be effective. If the parties involved agree that personal property will be considered a fixture, it will be deemed to be a fixture without the application of legal tests. […]

Dave Tompkins was up late one night watching a television campaign for a charitable organization. The organization was seeking donations in order to construct a new building that would serve as the organization’s headquarters. One of Tomkins’ favorite performers appeared […]

The legal definition of a guest of a hotel requires that the person: a. live at least five miles from the hotel. b. is a guest of a registered occupant of the hotel. c. is a transient. d. stay at […]

The phrase “time is of the essence” means that: a. the court is in a hurry to dispose of the case. b. performance under the contract at the times specified in the contract is vital or essential. c. the contract […]

Many states provide that a lease for a term exceeding __________ must be in writing. a. three (3) months b. six (6) months c. one (1) year d. three (3) years Under the __________doctrine, the holder has taken so many […]

An individual who desires to make provisions that will be effective only on his or her death is said to have: a. probationary intent. b. a prejudicial interest. c. testamentary intent. d. attestation intent. Federal regulation of the sale of […]

The Equal Pay Act: a. does not allow variances in wages pursuant to a seniority system. b. generally requires that members of both sexes be paid equally for equal work. c. generally requires a system that measures earnings by quantity […]

Which of the following factors is irrelevant in determining whether an instrument is negotiable? a. the fact that it is in writing b. the fact that it is notarized c. the fact that it is unconditional d. the fact that […]