Archives: Quiz

An invitation to submit bids”how much would you charge to do this work?is an offer. The principle of comity is based primarily on an international treaty. Answer: F For a defendant to be convicted in a criminal prosecution under the […]

Administrative law is created by administrative agencies, not by legislatures. Zoning restrictions are absolute. Answer: F A transfer of a negotiable instrument can give a holder more rights than its prior possessor. Answer: T The owners of a limited liability […]

Under Check 21, the maximum time that a bank can hold funds from deposited checks before making them available to the depositor will increase. Specific performance is the remedy customarily used when one party has breached a contract for the […]

Kris is an administrative assistant with Little Financial Corporation, but has no authority to sign Little Financial checks. Kris orders merchandise from My-T-Fine Retail Company delivered to her home and pays with a Little Financial check, signing “Little Financial Corp. […]

Generally, an accountant must possess the skills that an ordinarily prudent accountant would have. The right to due process of law applies to corporations. Answer: T If a corporation is dissolved, its asset can be liquidated without further notice to […]

A defendant is a person against whom a lawsuit is brought. An offer that a statute makes illegal automatically terminates the offer. Answer: T Any breach excuses the nonbreaching partys duty to perform. Answer: F Federal laws often provide more […]

Normally, all employees who deal with third parties are deemed to be agents. Statutory law does not include county ordinances. Answer: F Dian is injured in an accident while driving an off-road vehicle made by Eagle Recreation, Inc., an out-of-state […]

With a guaranty arrangement, the guarantor is secondarily liable. A deposition is sworn testimony by a party to a lawsuit or any witness. Answer: T In most sales, sellers warrant that they have good and valid title to the goods […]

The death of a customer immediately revokes a banks authority to pay an item. A transfer of contract rights to a third party is a delegation. Answer: F An imposters indorsement on an instrument can be effective against its drawer […]

Forbearance is a process that allows a lender to legally repossess and auction off the property securing a loan. If a business firm refuses to comply with an agencys request to inspect facilities or business records, the agency must defer […]

The Securities and Exchange Commission can seek sanctions against those who violate foreign securities laws. When a bank properly dishonors a check for insufficient funds, it has no liability to the customer. Answer: T When no delivery terms are specified […]

Under an antilapse clause, an insurance policy will lapse only if no premium is paid on the date due. An employer may be liable for the harassment of nonemployees if the employer knew about the harassment and failed to take […]

An undated instrument is not negotiable. When the parties to a contract agree that its performance should directly benefit a third person, the third person is an intended third party beneficiary. Answer: T Restitution involves one partys recapture of a […]

An ordinary person standard determines whether allegedly negligent conduct resulted in a breach of a duty of care. Any crime that requires knowledge of computer technology for its perpetration is a computer crime. Answer: T Promises made to an employee […]

Most other nations antitrust laws do not apply extraterritorially. An employer must verify a prospective workers identity and eligibility for employment in the United States and abroad. Answer: F If an agency decides that an environmental impact statement is unnecessary, […]

Hearsay evidence is what someone heard someone else say. To be considered material, a fact must be significant enough that it would likely affect an investors decision to buy or sell a companys securities. Answer: T An offer may invite […]

A contract in which goods and services are combined never falls within the scope of UCC Article 2. If the bailed property has been lost or is returned damaged, a court will presume that the bailee was negligent. Answer: F […]

In an express contract, the terms are fully stated in words. A person must have contractual capacity to be an agent. Answer: F Many remedies are available for confiscation of property by a foreign government. Answer: F Joan signs a […]

A consumer who receives unsolicited merchandise must return it within three business days. In a limited liability limited partnership, the liability of a general partner is limited to the amount of capital he or she has invested in the partnership. […]

The distinctions between a surety and a guarantor have been abolished in all states. Monopsony power is market power on the buy side of a market. Answer: T Land assigned by zoning laws for business activities is designated as being […]

A limited liability company has less legal flexibility than a corporation. Some states require franchisors to provide presale disclosures to prospective franchisees. Answer: T When a buyer breaches a contract, the risk of loss remains with the seller. Answer: F […]

If a buyer accepts a shipment of goods and later discovers a defect, acceptance can be revoked. Diana and Earl incorporate their computer technical support business as Fast Aid, Inc. Diana contracts with Gina to respond to Fast Aids customer […]

An offer to form a unilateral contract is accepted by a promise to perform. A substantive law creates or defines legal rights and obligations. Answer: T The perfection of a security interest will always protect a secured party against other […]

Under the UCC, a sale is the passing of title from a seller to a buyer for a price payable in cash only. To be enforceable, a memorandum evidencing an oral contract that would otherwise be unenforceable must include the […]

A holder takes an instrument for value by performing the promise for which the instrument was issued. The use of a persons likeness for commercial purposes without permission is not an invasion of privacy. Answer: F Any breach allows the […]

An Internet service provider is generally not liable for publishing a defamatory statement that comes from a third party. A principal can ratify an agents unauthorized act in its entirety or merely in part. Answer: F Recreation & Sports Equipment […]

An agency coupled with an interest is an agency created for the agents benefit. Federal immigration laws do not require verifying whether workers are U.S. citizens or are otherwise authorized to work in this country. Answer: F Bait-and-switch advertising occurs […]

Each state has its own constitution. Even after a tenant sublets leased premises, he or she may be obligated to pay rent. Answer: T An instrument payable “with interest must specify a particular rate to be negotiable. Answer: F In […]

Bankruptcy relief is provided under state law. “Consideration refers to the legality of the subject matter of a contract. Answer: F Certificate-of-title statutes establish perfection requirements for security interest in certain types of goods. Answer: T When dissolution takes place […]

When a limited liability company is dissolved, any member who did not wrongfully dissociate may participate in the winding up process. A limited liability company can sue or be sued, enter into contracts, and hold title to property. Answer: T […]

A corporation is referred to as a domestic corporation by its home state. An incidental third party beneficiary can sue directly to enforce the contract. Answer: F There are additional disclosure requirements for a loan that carries a high rate […]

A promoter is personally liable for a preincorporation contract until the corporation assumes liability. A guarantor can assert the principal debtors bankruptcy as a defense to avoid liability on the obligation. Answer: F Independent regulatory agencies include the cabinet departments […]

Working times and hours are not restricted for persons between the ages of sixteen and eighteen. There is one set of procedural rules for federal courts and various sets for state courts. Answer: T An assignment of the interest of […]

A debtors signature or authentication is required to create a security interest. An action in strict product liability requires that the goods be substantially changed from the time the product is sold to the time the injury is sustained. Answer: […]

An arbitrary use of ordinary words may not be trademarked. The doctrine of promissory estoppel does not apply if there is a clear and definite promise. Answer: F A quasi contract is a fictional contract. Answer: T A franchisee can […]

An expression of opinion”your customers will like thisis an offer. An order stating “please pay is too courteous to create a negotiable instrument. Answer: F Borrowers are required to recite the terms of their loans in clear, readily understandable language […]

To be characterized as a “good under the UCC, an item of property must be movable. A bailee never has a right to use the bailed property. Answer: F Water-quality standards are set by the states under Environmental Protection Agency […]

Antitrust law prohibits anticompetitive practices. Aaron owns a certificate of deposit with Beth, his sister, and an apartment building with Carl, his brother, in both cases as a joint tenant. Aaron, a partner with Debra in Aaron & Debra Accountants, […]

A court may depart from a precedent if the precedent is no longer valid. Certain employers must provide their employees with up to fifteen weeks of unpaid family or medical leave during any fifteen-month period. Answer: F A gift of […]

Selling securities under an exemption for which the securities do not qualify results in liability. The equal dignity rule requires the parties to a transaction to treat each other with equal dignity. Answer: F A signature can be made by […]

Reformation allows a court to rewrite a contract to reflect the parties true intentions. The basic duty of a trustee is to collect and reduce to cash the property in the bankruptcy estate that is not exempt. Answer: t General […]

The bank on which a check is drawn is the depositary bank. The United States Supreme Court can review any case decided by any of the federal courts of appeals. Answer: T Under a coinsurance clause, a homeowner who insures […]

Due care must be exercised in designing a product. State courts are independent of federal courts. Answer: T Smartt Software Company borrows $10,000 from Term N All Loans, Inc., but cannot repay the loan when it comes due. Term N […]

Under a finance lease, the lessee can stop performing and making lease payments if the leased equipment turns out to be defective. A negotiable instrument can function as a substitute for cash. Answer: T Corporations can be good citizens by […]

If one corporation owns all of the shares of another corporation, it is referred to as the target corporation. Before a lawsuit begins, the court must have proof that the defendant was notified. Answer: T Promises of fact made during […]

Designating a third party as a beneficiary in a contract does not indicate whether the beneficiary is intended or incidental. A maker is secondarily liable on an instrument. Answer: F Under a shipment contract, the risk of loss passes to […]

Lena offers Miguel a job, representing falsely that it will be long term. In reliance, Miguel takes the job but is laid off shortly thereafter and successfully sues Lena for fraud. With respect to the employment-at-will doctrine, this is a. […]

Resources Recovery, Inc., uses dynamite in its remote mining operations. Sabrina stores household cleaners in his suburban garage. Most likely liable under the doctrine of strict liability for any injury caused by an abnormally dangerous activity is a. neither Resources […]

Michael, a citizen of Ireland, and Nina, a citizen of the United States, enter into a contract. When Nina breaches the contract, Michael obtains an award of damages in an Irish court. He asks a U.S. court to enforce the […]

Lita is a holder of preferred stock in Mighty Clean Detergents, Inc. Lita has priority over holders of Mighty common stock as to a. nothing. b. payments of dividends. c. the date on which Mighty must repurchase the shares. d. […]