Archives: Quiz

Manuel applied for a variance from the local zoning ordinance in order to build a building. His neighbor, Sandra, appeared before the zoning board to speak in opposition to the application. At the hearing, Sandra testified under oath and made […]

A professor photocopies fifty copies of a copyrighted chart to distribute to his students in class. This is a clear violation of the Copyright Act. After the coronation of Edward VII was postponed and parties who had entered into contracts […]

The purpose of reliance damages is to place the injured party in a position as good as he would have held if the contract had not been made. Under the Third Restatement, if a principal becomes incapacitated, the agency relationship […]

The Restatement (Third) of Torts: Products Liability has experienced rapid adoption by the states. An implied-in-law condition must be fully performed. Answer: F Under Chapter 11, a class that is not impaired under a plan is deemed to have accepted […]

A fiduciary duty, arising out of a relationship of trust and confidence, is one of utmost loyalty and good faith. The laws of the state in which a foreign limited partnership is organized govern its organization, its internal affairs, and […]

If the buyer received goods on credit while he was insolvent by misrepresenting in writing his solvency, the seller is able to reclaim the goods only if the seller makes a demand on the buyer within ten days after the […]

A completely handwritten will is valid only if witnessed. A partner can withdraw his partnership capital at any time. Answer: F A right of redemption of a mortgage cannot be defeated by operation of law. Answer: F A “Vertical Restraint […]

Whether an individual partner or the partnership owns certain property determines who gets it upon dissolution of the partnership and who shares in income from it. A conditional indorsement is one by which the indorser makes the rights of the […]

Employers are subject to civil, but not criminal, penalties for violations of the Occupational Safety and Health Act. Fraud in the inducement will render an agreement void. Answer: F A person cannot be guilty of trespass unless he or she […]

Today, a majority of courts permit a rescission of a contract for negligent or innocent misrepresentation, provided that all the remaining elements of fraud are present and the misrepresentation is material. Concurrent conditions occur when mutual duties of performance are […]

Virtually all shareholders who vote for directors do so through the use of a proxy. To ratify a contract, the principal must have knowledge of all material facts and may ratify either the entire contract or the part that is […]

The Love v. Hardee’s Food Systems, Inc. case dealt with the responsibility of the owner or possessor of property to an invitee to warn of, remove, or barricade a dangerous condition of the premises. The U.S. Supreme Court has eliminated […]

The ADA provides for remedies that are generally the same as those available under Title VII. In the case of Eastman Kodak Co. v. Image Technical Services, Inc. the U.S. Supreme Court stated that to violate Section 2 of the […]

The validity, under antitrust law, of a joint venture depends on the competitors’ purpose in forming it. Members of an LLC share profits and losses equally. Answer: F A buyer in the ordinary course of business takes collateral (other than […]

Allannah has entered into a contract to buy a new Steinway piano. The law governing the contract is Article 3 of the UCC. First Finance Company filed its financing statement for a purchase money security interest in Donald’s lawn tractor […]

The Federal Trade Commission may issue a cease and desist order having the effect of an injunction. If the debtor is an individual whose debts are primarily consumer debts, the trustee may not avoid any transfer, within 90 days of […]

Under the RUPA, the partners are jointly and severally liable for all contract obligations of the partnership. Michelle and Margaret agree to form a partnership. The partnership contract between Michelle and Margaret does not have to be in writing in […]

A duty to act is imposed on those whose innocent conduct has injured another and left him helpless and in danger of further harm. Apparent authority may arise by an agent’s showing a third party a document from the principal […]

Both the Fifth and Fourteenth Amendments contain due process clauses. Most types of contracts are valid without being written. Answer: T If a bank pays on a check even though it has a ‘stop payment order,” the bank is liable […]

Contributory negligence is a defense to a warranty of merchantability cause of action. Bradley buys a television set that turns out to be stolen. He can sue the seller for breach of warranty. Answer: T Explain what may constitute a […]

As long as a decedent’s wishes are clear, the formalities of a will need not be strictly met in order for the will to be valid. The Fifth Amendment would protect a defendant from having to give blood samples to […]

A draft involves three parties: a drawer, a drawee, and a payee. Hugo wishes to raise money for his restaurant. He offers to sell stock to his brothers, sisters, aunts, uncles, and cousins. The offering is made by telephone to […]

One hundred crystal flower vases have been identified to the contract and a down payment of $1,000 of the $10,000 purchase price has been paid. If the seller becomes insolvent, the buyer may still pay $9,000 and get the goods. […]

What six elements must be present for the crime of larceny to exist? A nonpoint source is land use that causes pollution. Answer: T Identify at least six situations in which the parol evidence rule does not apply. Answer: The […]

About half of state statutes and the amended ULLCA have eliminated a member’s dissociation as a mandatory cause of dissolution of an LLC. Anna employs Mark to purchase for her a suitable site for a roller rink. Mark owns a […]

Agency is a consensual relationship that the principal and agent may form by contract or agreement. The usual method of enforcing a restrictive covenant is by specific performance. Answer: F Lowell recently graduated from college with a degree in business […]

In order to be sufficient, an agreement required to be written under the statute of frauds must be signed at the bottom and notarized. Scienter is the element of fraud that requires that the misrepresentation must have been known by […]

Under the CISG, if the buyer fails to perform any obligations, the seller may either require the buyer to pay the price or fix an additional period of time for the buyer to perform. The seller has an insurable interest […]

For purposes of defamation, a publication includes non-written, verbal communication to third parties. Most forms of speech are protected by the strict or exacting scrutiny standard. Answer: T Ricardo posts a sign in the neighborhood offering $50 for the return […]

In some states, the vesting of a third party’s rights occurs only when the third party learns of the contract and assents to it. Only the intentional destruction of personal property and not the use of the property in an […]

In the absence of agreement, payment is due at the time and place the buyer is to receive the goods, even though the place of shipment is the place of delivery. Decisions of courts of appeal are published in volumes […]

The Revised Act does not consider a transfer of its own stock by ZYX Corporation to its stockholders a distribution. Venue has to do with which court has jurisdiction over the subject matter of a lawsuit. Answer: F Under the […]

Presentment is excused where the acceptor is undergoing bankruptcy. The statute of frauds has to do with fraud in the inducement of a contract. Answer: F An implied warranty exists by operation of law. Answer: T What is a “merchant?” […]

Andrew agreed to exchange something clearly without value to enter a contract with Milt. The contract will not fail for lack of consideration because, if the parties agree to the exchange, the courts will not be concerned about whether the […]

Most states have special incorporation statutes governing nonprofit corporations. An indorsement “Pay Alice Adams” is an assignment rather than a negotiation since it lacks words of negotiability. Answer: F The Bill of Rights restricts the power and authority of the […]

Each partner, unless otherwise agreed, has equal rights in the management and conduct of the business of a general partnership. Any method of combination of corporations that involves issuing shares, proxy solicitations, or tender offers may be subject to federal […]

Name and briefly describe the special features or extraordinary duties of five special types of bailments discussed in the textbook. A compulsory share exchange happens when two companies wish to merge into one. Answer: F Answer: Five special types of […]

An output contract is a special form of an illusory contract. Ron owes Matt an unsecured deposit of $3,000. Ron has a discharge of all his unsecured debts by a bankruptcy court. Can the contract between Matt and Ron be […]

Leases of personal property exceed $100 billion annually and are governed by Article 2A of the UCC. Jared, a citizen of Missouri, brings suit in federal court against Cryden Corp., which has its principal place of business in Kansas. The […]

The Securities Enforcement Remedies and Penny Stock Reform Act of 1990 granted the SEC the power to issue cease and desist orders. All employees are agents, but not all agents are employees. Answer: T A possessor of land must warn […]

Thomas borrowed $100,000 from First Bank, which asked that he both put up collateral and provide a surety. Consequently Thomas provided the bank with a security interest in his antique car collection and asked Victor to act as a surety. […]

Is a promise to pay a pre-existing moral obligation enforceable? Explain. Incidental damages include lost profits and injury to person or property resulting from defective performance. Answer: F Donee beneficiaries and incidental beneficiaries are called intended beneficiaries. Answer: F The […]

The Code addresses the ‘battle of the forms’ problem by focusing on intent of the parties. Sales of tangible personal property involve the transfer of title. Answer: T If the seller has failed to comply with Code requirements in making […]

For a person to acquire an easement, he must have the permission of the owner to use the land. John and Megan are at a crowded theater. In the press of people exiting the theater, John accidentally steps on Megan’s […]

Criminal sanctions for accountants are limited to punitive fines. For a misrepresentation to be material, it must be likely to induce a reasonable person to manifest assent or the maker must know that it would be likely to induce the […]

A crime is an act or omission in violation of public law and punishable by the government. The Code follows the doctrine of election of remedies. Answer: F OPIC was established to facilitate the participation of U.S. private capital and […]

What activities give rise to strict liability and what defenses are available to strict liability? In some states, a contract under seal is binding without consideration. Answer: T The essential characteristic of ethical fundamentalism is a reliance upon a central […]

A purchaser of a house who buys the property ‘subject to” the mortgage is not personally liable for the mortgage, nor is he a surety for the mortgage obligation. A corporation is a creature of the state and may be […]

An appeal from a small claims court is taken to the state court of appeals where a trial de novo is begun. An offer must be in a particular form to have legal effect. Answer: F Unanimous written consent of […]

An accountant who willfully violates Section 11 of the 1933 Act is subject to fines of up to $100,000 or imprisonment of not more than three years, or both. Morris ordered 1,000 sq. ft. of green carpet from RS Company. […]