Archives: Quiz

A new state law mandates that all employers must prohibit smoking on employer premises. The law further provides that any employer who allows an employee or a client/ customer to smoke on its premises is subject to a court order […]

Mark Hubbard has been very successful in the cattle business over a number of years. Hubbard has decided to establish a cattle program as an investment tool. He will purchase cattle with investors’ money and then provide medical care, feed, […]

Under no-fault insurance, an insurer is obligated to pay an injured person without regard to whose fault caused the harm. A trustee can delegate the performance of personal duties. Answer: F In the United States today, we generally have one […]

In a large corporation, the shareholders are often the managers of the corporation. A waiver of a breach may be either express or implied. Answer: T A warehouse receipt is not considered a document of title. Answer: F A provision […]

The term “cyberlaw” refers to laws and precedent applicable to Internet transactions and communications. Customs and trade usage can override the express provisions of a contract. Answer: F Shareholders ordinarily cannot be sued for corporate liabilities. Answer: T A third […]

Supply chain management refers to the management issues of risk and title as goods flow through commerce. Plaintiffs suing for damages caused by a defective product are limited to taking action only against the manufacturer(s) of such goods. Answer: F […]

Persons who are not partners under appropriate circumstances may be held liable to third persons as though they were partners. The UCC statute of limitations applies when a party is seeking recovery on strict tort liability, fraud or negligence. Answer: […]

John Harrington operates a business that almost always hires skilled workers who are college graduates; currently, however, his business does have a part-time opening for an unskilled worker. Harrington is considering hiring an uneducated welfare recipient instead of a student […]

An agent’s duties must be expressly stated in the agency agreement and may not be implied from the principal’s words or conduct. The steps in terminating a financing transaction upon full payment by the debtor include the preparation of a […]

A ‘short-swing” profit is realized by a corporate insider from selling corporate securities less than one (1) year after purchase. A negotiable warehouse receipt that provides for delivery of the goods to the order of Jill Jones may be negotiated […]

Exoneration is an agreement that a party shall not be liable for loss. A payee is not liable on an instrument until the payee transfers the instrument to someone else. Answer: T Generally, the tenant has the right to the […]

A federal agency planning to adopt a new regulation must give public notice of such intent and then hold a hearing at which members of the public may express their views and make suggestions. The Bill of Rights provides protection […]

In a disparate impact case, proof that the employer did not intend to discriminate is a complete defense. The Constitution prohibits state governments from denying any person the equal protection of the law. Answer: T A tenancy in common is […]

Courts look at each case at a given point in time and are not concerned with former cases and rulings when making current decisions. The Age Discrimination in Employment Act forbids discrimination by employers against persons over 30 years of […]

A seller’s insurable interest in goods always terminates with the passage of the title to the buyer. A special agent is authorized by the principal to transact all affairs in connection with a particular type of business or trade or […]

An agreement cannot be enforced if it does not set forth every contractual detail. The FTC requires that only descriptive and non-ambiguous terms such as jumbo, giant, or full be used in product labeling. Answer: F A landlord is ordinarily […]

Administrative regulations are a type of law. When an accountant fails to complete a contract, the accountant is still entitled to the accountant’s fee. Answer: F The object of zoning is to ensure an orderly physical development of the geographic […]

A restrictive indorsement specifies the purpose of the indorsement or the use to be made of the paper. Sam Wilson often goes to the horse races, participates in his state€s lottery, and invests heavily in the stock of major U.S. […]

Corrective advertising required by the FTC also is called retroactive advertising. The employer of an independent contractor does not have control over the performance of the work by the independent contractor. Answer: T Funds from the Superfund are used to […]

If a debtor with multiple debts specifies the debt to which a payment is to be applied and the creditor accepts the money, the creditor is bound to apply the money as specified. A contract of insurance ordinarily is stated […]

An assignee of a contract can bring suit on the contract only in the name of the assignor. A “best efforts” clause is always deemed too indefinite to be enforceable. Answer: F When a negotiable instrument is transferred by negotiation, […]

When a minor avoids contracts, the minor always must return the other contracting parties to their original financial positions. A buyer may reject the goods or revoke the acceptance for any defects in the goods. Answer: F If an order […]

When a bank certifies a check, the amount involved in the certification will be retained in the depositor’s account until payment of the certified check. Coppersmith executed and delivered negotiable notes to the payee, Charlene. The payee indorsed the notes […]

Licensees are on the premises with the permission of the landowner. An auto dealer who does not actually know of a roll-back can use lack of knowledge as a defense against odometer fraud, regardless of the condition of the car. […]

Arnold Properties, Inc. entered into a lease agreement with Janet for a residential house. Janet made four (4) subsequent monthly payments. At the end of the four (4) months, Janet learned that she was to be transferred to a new […]

The Foreign Corrupt Practices Act applies to businesses with their principal offices located in the United States. A fixture is personal property that has been attached to the earth or placed in a building in such a way or under […]

In states that follow the community property tradition, property acquired after the marriage belongs solely to the party who acquired it. A written authorization of agency is called a power of attorney. Answer: T Preferred stock cannot have priority over […]

A bank always is liable for making payments on a postdated check. Franchising is a form of licensing that now is very common in international business. Answer: T In a federal system, a central government is given power to act […]

The formation of contracts in cyberspace is always governed by the law of the United States. If a plaintiff’s loss involves damaged property, it is described as liquidated damages. Answer: F If a leased building is destroyed, the lease is […]

Generally, the right to make a will is limited to persons 18 or older. The UCC statute of limitations applies to actions brought for remedies on the breach of a sales contract. Answer: T Predatory lending is a practice on […]

The Securities Act of 1933 requires a seller to provide a prospectus to each potential purchaser of an original issue of securities. Consumer protection law often requires those dealing with consumers to make certain mandated disclosures. Answer: T Personal property […]

In order for a bailment to be valid, the bailor must be the owner of the subject property. If a share certificate is lost, destroyed, or stolen, the ownership of the shareholder is destroyed. Answer: F A general partner within […]

A holder can recover from any of the parties who are liable on the instrument, regardless of the order of the signatures on the instrument. A disparate impact exists when an employer’s facially neutral employment practices have a significantly adverse […]

Title to goods can be transferred without the actual delivery of the goods involved. If a bank improperly refuses to make payment of checks for which its customer has sufficient funds on deposit, it is liable to the drawer for […]

A person who attends a banquet given at a hotel is considered a guest for purposes of determining the liability of the hotelkeeper. A civil nuisance may be terminated by abatement or closure by government authority, while a criminal nuisance […]

A trade fixture is a fixture that is traded in by the owner when purchasing new fixtures. If a contract appears to be legal on its face, it will be enforceable even if it was entered into for an illegal […]

Legislation commonly requires that an installment-sale contract specify the cash price, down payment, finance charges, and insurance costs. Debts of a corporation are not the debts of the persons running the corporation or owning shares of stock in it. Answer: […]

Contractual intention is determined by objective standards. Criteria used to make employment decisions that have a disparate impact on women, such as height requirements, must be job-related. Answer: T Extortion and blackmail are exactly the same. Answer: F A contract […]

The World Trade Organization (WTO) provides a Dispute Settlement Body (DSB) to enable member countries to resolve trade disputes rather than engage in unilateral trade sanctions or a trade war. Employers are accountable when employee use e-mails to defame competitors. […]

Goods physically existing and owned by a seller at the time of a transaction are called existing goods. At least 30 days must elapse from the date of a company’s filing a registration statement with the SEC to the date […]

A limited liability company is treated like a partnership under federal tax law and has the limited liability feature of corporations. A security agreement must be backed by a written record even if the creditor has possession of the collateral. […]

Fungible goods are always homogeneous. The trustee may void any fraudulent transfer made by the debtor within two (2) years of bankruptcy when the debtor€s actual intent was to hinder, delay, or defraud creditors by engaging in the transfer. Answer: […]

Arbitration procedures occur in a court of law. Corporate Integrity Agreements are the equivalent of putting a corporation on probation. Answer: T The Constitution may be amended, but it always has been interpreted in the same way. Answer: F The […]

Contract terms may not be implied from conduct. A surety may not raise the defense of mistake. Answer: F The U.S. dollar is considered the international currency. Answer: F The category of protected consumers for many statutes has been expanded […]

An employment contract always will state a time or duration for the contract’s applicability. An acceptance must be absolute and unconditional. Answer: T In a non-shipment contract risk of loss passes to the buyer when the merchant seller makes the […]

Unclaimed property is often transferred to the government under the concept of escheat. A party who in good faith has provided substandard performance of a contract may sue to recover the payment specified in the contract. Answer: F Corporations are […]

Labels on packages are regulated to provide information about the contents and warnings about the dangers involved in the use of the product. Sales law includes special rules that apply to merchants. Answer: T An owner ordinarily is not liable […]

Manis owns 100 shares of stock of the Linquist Corporation. She sells her stock to Sosnik and delivers to him: (1) her stock certificate for 100 shares and (2) a written, signed assignment of the 100 shares to Sosnik. The […]

A partnership involves partners’ contributions of capital, services, or a combination of these. A bailment is a special form of sale in which possession is transferred to a bailee. Answer: F A condominium and a cooperative are essentially the same. […]

Moral relativists believe that ethical decisions will differ based on circumstances. The Securities Act of 1933 imposes civil liability for making false or misleading statements in a registration statement. Answer: T The Federal Trade Commission suspects Billy Williams of unlawful […]