Archives: Quiz

Mary’s car was parked just outside the east door of the Civic Center. When she tried to exit, three ominous-looking gang members were blocking that door. She called the police who arrested the three for loitering. If Mary brings suit […]

Which of the following is not a function of a bill of lading? a. It serves as a receipt for goods. b. It serves as evidence that the goods specified in the bill of lading are stored in the insured […]

An automatic stay ends: a. upon dismissal of the bankruptcy case. b. when the debtor receives a discharge. c. only by court order. d. Both (a) and (b). Lostowne was economically depressed until Sally’s Firecracker Corp. moved their factory there. […]

If Kathy indorses a check “without recourse”: a. Kathy is not contractually liable if the check is not paid. b. negotiability is destroyed. c. the check cannot be transferred. d. Kathy cannot transfer good title to the check. If no […]

A newspaper article hints that a certain corporation is a front for illegal activity. The corporation: a. will lose a defamation suit because only natural persons can successfully bring defamation suits. b. will likely win a defamation suit if the […]

A possibility of reverter is the complementary estate to a: a. fee simple. b. qualified fee. c. life estate. d. reversion. Code Section Matching a. Statute of frauds. f. Good faith. b. Warranty of title. g. The “battle of the […]

An indorsement is “a signature, other than that of a signer as”: a. maker. b. drawer. c. acceptor. d. All of the above. The exercise of the power to avoid a contract is known as: a. ratification. b. disaffirmance. c. […]

a. What are the two types of duress and what is the effect of each on the contract involved? b. Give an example of each type of duress. c. Who does the law intend to protect by reason of the […]

When contract terms prohibiting the assignment of rights exist, most courts will: a. strictly construe them. b. interpret a general term prohibiting assignments as rendering any assignment ineffective. c. award the obligor no right to damages for breach of a […]

A survival clause refers to: a. a remainder in a life estate. b. a possibility of reverter. c. a provision in a lease contract providing that the tenant’s eviction for non-payment of rent will not relieve her of liability for […]

Sarah offers to pay Allison $150 if Allison will paint her apartment while she is out of town on vacation for two weeks. Allison makes no promise but tells Sarah that she will think about it. While Sarah is out […]

Answer the following: Baker goes into bankruptcy owing $5,000 as wages to his employees. There is enough in his estate to pay all costs of administration and enough to pay his employees, but if the employees are paid, there will […]

Bill bets his friend $100 that the Patriots will win the next Super Bowl. This is an: a. unconscionable contract and therefore illegal. b. illegal wagering agreement. c. agreement to obstruct justice and therefore illegal. d. illegal restraint of trade. […]

A check is dishonored if: a. it is presented for payment directly to the payor/drawee bank for immediate payment, which is refused. b. a payor bank makes timely return of the check. c. the payor bank becomes accountable for the […]

“Attachment” occurs when a secured party has given value, the debtor acquires rights in the collateral, and the: a. debtor has completed his obligation to pay. b. collateral is delivered to the borrower. c. debtor and secured party have an […]

Which of the following is not a reason for the use of negotiable instruments? a. Reduction of the chance of forgery or material alteration b. Convenience c. Elimination of the risk of loss or theft of cash d. Reduction of […]

An agent is not normally liable on a contract he makes with a third party on behalf of a(n) ____ principal. a. undisclosed b. disclosed c. partially disclosed d. All of the above are correct. In a “closed shop,” an […]

Notice of dishonor of an instrument: a. may be given orally. b. must be given by returning the unpaid instrument with an attached stamp, ticket, or memorandum stating that the item was not paid. c. must meet formal requirements to […]

Which of the following would most likely be a merchant with respect to the goods in question under the UCC definition? a. Amy is an authorized IBM computer dealer. b. Brian employs two salesmen to sell his homemade furniture. c. […]

Gary mails an offer to Brian on June 15. Brian receives the offer on June Gary mails a revocation of the offer on June 17. Brian mails a letter of acceptance on June 18 and Gary receives the acceptance on […]

Match the following: a. Conclusively presumed unreasonable and therefore illegal. b. Acquisition by one company of a competing company. c. Established environmental protection as a goal of federal policy; created the Council on Environmental Quality and requires an EIS in […]

Although he knows the ring is really valuable, Alex tells Mona her ring contains artificial gems, but he would be willing to buy it for $50. Mona agrees. Alex quickly takes the ring to Hanna’s Antique Jewelry Shop and sells […]

Mark, a college student, agreed to sell his horse to Henry for $1,000. The contract required Mark to take the horse on that same day to Idlewild Stables where Henry was going to board the horse. Henry paid Mark the […]

If untrue, which of the following would probably be considered a misrepresentation of a material fact? a. “This is the one that I think is the best buy.” b. “This is the best computer on the market.” c. “This car […]

A contract in which both parties exchange promises is a: a. voidable contract. b. bilateral contract. c. unilateral contract. d. quasi contract. Stan has agreed to sell a warehouse to Ed for $150,000. The contract says that Stan will convey […]

Assume you are the creditor in each of the following situations. Identify the kind of security agreement that is involved in each transaction and explain how you would perfect that agreement. a. You are the creditor (Evergromby Bank), and you […]

Which of the following statements about wills is correct? a. A will must be written on one piece of paper. b. Another writing may be incorporated by reference in a will. c. The testator must sign his or her full […]

Elmer wrote a letter to his friend Fred offering to sell Fred an 80-acre farm for $200,000. After mailing the letter, Elmer learns that the farm is actually worth $300,000 and changes his mind about selling. Elmer: a. has made […]

If a shareholder dissents to a proposed business combination, he is entitled to receive the fair value of his shares. In order to do so, the shareholder must do which of the following? a. Attack the validity of the corporate […]

If a company owns 90 percent or more of the outstanding shares of each class of a subsidiary company’s stock, a merger may be effected with approval of the parent’s board of directors alone, without resort to shareholders. This is […]

In international business transactions, a documentary letter of credit: a. is a method of payment of goods that reduces the seller’s risk from the possibility that the goods will be shipped, but not paid for. b. is a type of […]

Philip has been in training for several months and now plans to run in the school-sponsored, ten-mile, fun run mini-marathon. He completes and signs an entry blank which contains the statement, “I hereby agree to hold the sponsors harmless for […]

Regarding the termination of an agency, the Third Restatement: a. distinguishes between terminations based on death of a principal and terminations based on incapacity of the principal. b. applies the same rule to all causes of termination; it applies a […]

The Code section which sets forth the requirements that must be met for an instrument to be negotiable is: a. 2-209. b. 3-104. c. 4-405. d. 3-250. Which of the following would be considered consequential damages? a. Commissions paid to […]

The World Bank established the ____ to encourage increased investment in developing nations. a. Overseas Private Investment Corporation b. World Trade Organization c. Multilateral Investment Guarantee Agency d. Commission on International Trade What is another name for the main purpose […]

Intellectual property consists of which of the following? a. Trade secrets b. Patents c. Trade symbols d. All of the above are considered intellectual property. Cheryl, age 16, ordered a new dress to wear to the school prom. She has […]

Which of the following is not a remedy available to an unpaid seller against the buyer? a. Recovery of the price b. Cover and suit for damages c. Recovery of incidental damages d. Cancellation of the contract Which of the […]

The notice requirement of the Federal Trade Commission rule for consumer credit contracts has the effect of: a. limiting the types of defenses to payment available to a consumer. b. eliminating the real defenses to payment. c. placing a holder […]

Divided Parcel (DP) includes the following on its mailing receipts: “We are not responsible for any damages to packages whether or not through the fault or negligence of our employees. Send packages at your own risk.” Mary reads this clause […]

A trade association practice or agreement that restrains trade is analyzed under the rule of reasons. Insurance coverage is never effective until a formal written policy is issued. Answer: F Good intention is a complete defense to conversion. Answer: F […]

A principal owes an agent a duty of ratification. A promise to pay for an act that has already occurred is enforceable because the event is certain. Answer: F A creditor with a mechanics lien on property can sell the […]

A decision on a given issue by a court is not binding on an inferior court. A customer has sixty days from the date of receipt of a statement of an electronic transfer to notify the financial institution of any […]

The words used in an insurance contract are interpreted against the party who applied for the policy. The Foreign Sovereign Immunities Act spells out the particulars of what constitutes a commercial activity. Answer: F The common law doctrine of nuisance […]

Estray statutes determine ownership rights in fungible goods that have ‘strayed. The extreme risk of an activity is a primary basis for imposing strict liability. Answer: T Precise Engineering Corporation has a contract with Quik Mart Stores to provide customized […]

An employer is not liable for the sexual harassment of an employee by a co-worker. Drugs must be shown to be effective and safe before they can be marketed. Answer: T An “assignment of all rights absolves the assignor of […]

A corporate officer is not an agent for the corporation. A bill of lading serves as a contract for the transportation of goods. Answer: t A limited partner has a right to participate in the management or operation of the […]

Constructive delivery does not satisfy the delivery requirement for an effective bailment. Under an exclusive-dealing contract, a seller promises a buyer a certain territory in which the buyer will have no direct competition. Answer: F The four broad types of […]

A suspect cannot be tried twice in the same court for the same crime. Vishing is phishing that involves voice communication. Answer: T Contract law governs franchise relationships. Answer: T A quitclaim deed warrants more than any other deed. Answer: […]

To be enforceable, a memorandum evidencing an oral contract that would otherwise be unenforceable must include all essential terms. Normally, a court of law will not question the adequacy of consideration. Answer: T According to utilitarianism, it does not matter […]

Ethical reasoning is the process through which an individual rationalizes whatever action he or she chooses to take. Dumping is the sale of imported goods at “greater than fair value. Answer: F In most states, the courts no longer grant […]