Archives: Quiz

A seller’s duty to deliver goods requires the seller to transport the goods to the place designated by the buyer. A tender occurs when the holder of a check or other consumer transaction authorization demands payment. Answer: F Unless justified […]

The Robinson-Patman Act guarantees a seller the right to refuse to deal with anyone for any reason or purpose. Creditors receive an automatic 30-day temporary perfection in negotiable instruments taken as collateral. Answer: F The “necessaries” of minors are precisely […]

The UCC permits a court to refuse to enforce a sales contract that it finds to be unconscionable. The scope of warranties remains the same regardless of whether the seller is a merchant or a casual seller. Answer: F Under […]

An agent is distinguished from an ordinary employee in that employees are hired to represent the employer in dealings with third persons. Unless a contract so provides, time is ordinarily not of the essence, and performance within a reasonable time […]

Consideration is not required to establish or modify a letter of credit. The criminal law of all states is the same because all states have adopted a uniform criminal code. Answer: F In every contract there exists an expressed covenant […]

Under the act-of-state doctrine, the courts of one country will not sit in judgment of the acts of the government of another country conducted within its own territory. A shareholder can give a proxy to vote shares only to another […]

A person may be held criminally liable for acts committed by another. In a limited partnership, general partners are not responsible for the debts of the firm. Answer: F In order for delivery to occur, a gift must actually be […]

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. A bank is not required to pay a check presented more than […]

The storage of goods in a warehouse and the shipment of goods by a common carrier are examples of special bailments. A seller does not have the right to stop shipment if the buyer has received goods on credit and […]

Any modification of a sales contract must be supported by some form of consideration. Gerwin’s daughter Mary was seeking a position as an associate attorney with Baker, Charles & Dixon, a large metropolitan law firm. The firm, after several meetings […]

A party who speaks with a reckless disregard for the truth not knowing of the falsity of his or her words cannot be liable for fraud. When improper collection methods are used, it is no defense to the creditor that […]

If an instrument bears a restrictive indorsement, any further transfer or negotiation is effectively barred. Mary offered to sell Mike several pieces of rare Chinese art at a very good price because they were duplicates in her own collection. Mike […]

Newlog, which had developed a new process for making artificial logs, entered into an oral contract with Specialty Manufacturing. The contract provided that Specialty would manufacture a special part that Newlog needed to make its artificial log machinery. The contract […]

In a Chapter 7 bankruptcy, the debtor’s nonexempt assets are liquidated to pay debts. A partner admitted as a partner into an existing partnership has unlimited liability for all obligations of the partnership arising before such admission. Answer: F If […]

An offer gives the offeror the power to bind the offeree by contract. “Without reserve” auctions give the auctioneer the right to withdraw the goods from the sale process if the bids are not high enough. Answer: F An express […]

Hal was a merchant who deposited 2,000 barrels of olive oil in a public warehouse operated by Welcome Warehouse. Hal was issued a warehouse receipt for the 2,000 barrels that by its terms was deliverable “to bearer.” Hal had engaged […]

Herman hires Juanita as his accountant. Juanita commits negligence in preparing financial statements for a business Herman owns. Several investors rely on the financial statements and purchase shares of stock in the business. In a state that has adopted the […]

An employer cannot be held liable for the sexual harassment of an employee by a supervisor. A second promise to pay a contractor a higher amount on the original contract may be enforceable. Answer: T The Americans With Disabilities Act […]

The general view is that the owner of land owns the space above the land, subject to the rights of flying aircraft, even if the aircraft interferes with the use of the land and represent a danger to persons or […]

The states may coin money as long as it is backed by gold. The measure of monetary damages when there has been a breach of contract is the sum of money that will place the injured party in the same […]

Those who are liable for violations of consumer protection situations are persons or enterprises that regularly enter into the type of transaction in which the injured consumer was involved. A person who is prevented from enforcing a contract because of […]

An action for breach of warranty generally must be brought within three (3) years of the breach. Proof of an employer’s discriminatory motive is immaterial in a disparate treatment case. Answer: F Unless otherwise agreed, every merchant seller warrants that […]

A buyer seeking damages because of a breach of the sales contract must give the seller notice of the breach within a reasonable time after the buyer discovers or should have discovered it. In addition to state legislatures and the […]

It is necessary to the creation of an express warranty that the seller use formal words such as €warrant€ or €guarantee.€ The rights and duties of warehousers are regulated by the UCC. Answer: T All shares must have a par […]

Automobile lemon laws protect only persons buying automobiles for personal, family, or household use. 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, […]

Making improvements is a duty that falls on the tenant. The finder of lost property is usually entitled to a judicially-determined reward for finding and caring for the property until the rightful owner reclaims it. Answer: F A copyright owner […]

United States antitrust laws can protect United States exports. In order to satisfy the statute of frauds, all partnership agreements must be in writing. Answer: F Preferred stock is ordinarily nonvoting stock. Answer: T Under the United States Supreme Court€s […]

Sylvia Jurgen operates a florist shop. During a particularly busy day, she allowed one of her employees, Terry Lioni, to use her (Jurgen’s) personal car to assist with deliveries. Lioni had just obtained his driver’s license. Lioni was involved in […]

The defendant in a civil case is the party who is suing. A living will, now legal in most states, provides that if the testator becomes unable to express his or her wishes and is in an irreversible, incurable medical […]

Title to land may be acquired by adverse possession. Due process includes the right to be heard, question witnesses, and present evidence. Answer: T At common law, a tenancy by entirety or a tenancy by the entireties is created when […]

A delivery is sufficient if it is made in accordance with the terms of the contract to sell. To successfully pursue a Title VII lawsuit, the plaintiff generally must belong to a protected class. Answer: T A common carrier transporting […]

Collective bargaining agreements generally are subject to a ratification vote by the employees. If either the offeror or offeree dies or becomes mentally incompetent before the offer is accepted, the offer is automatically terminated. Answer: T A buyer returning to […]

A disclaimer that protects an accountant from liability for inaccurate reporting of certain specified financial information will be held valid if the accountant had no means of examining the information. Parol evidence is not admissible to show fraud, duress or […]

If a shareholder borrows money and delivers stock as collateral security, the creditor has a perfected security interest in the stock without any filing by the creditor. Fees charged by a lender for the reasonable expense of making a loan, […]

A promise to make a gift is enforceable. Subject to constitutional limitations, corporations may be regulated by statutes. Answer: T If one party to a contract breaks the contract, the other party generally is under a duty to stop any […]

Article 3 of the UCC establishes a four year statute of limitations for most actions involving negotiable instruments. A manufacturer with distributors in New York City may give its newer distributors free advertising and other services to help them compete […]

Each of the states and the federal government have statutes and regulations that prohibit unfair methods of competition. A probate court is an example of a general trial court. Answer: F Horseco, a new business, purchased ten thoroughbred horses for […]

Cyril made two contracts. The first was to have his house painted one month from the date of the written contract. The second was for his neighbor’s 1957 Ford Thunderbird. Each contract was definite and clear in all respects. As […]

The coverage of the Personal Auto Policy (PAP) is limited to claims arising from the €use and operation€ of an automobile. If words and numbers contradict each other in a contract, the rule of construction favors the words. Answer: T […]

The Clayton Act prohibits price discrimination between different buyers of like commodities when the effect may be to substantially lessen competition. Equal employment opportunity laws provide protection for minorities and women, but the disabled are not within the protection of […]

The doctrine of promissory estoppel is also known as the doctrine of beneficial reliance. Generally, contracts are discharged by the performance of the terms of the contract. Answer: T The business judgment rule is applied by the courts as a […]

An agent’s liability as a party to a contract with a third person is not affected by the degree of disclosure. A bailee can pass good title to a good-faith purchaser, even when the sale was not authorized by the […]

The term dumping refers to the sale of damaged goods in a foreign market to cut the losses that would otherwise be caused by the damage. Under a freehold estate, a person owns property only for a specified number of […]

Stockbrokers are eligible to file Chapter 11 bankruptcy. In most states contracts of guaranty do not have to be in writing to be enforceable. Answer: F If a state or local Equal Employment Opportunity agency (EEO) exists, a party charging […]

A contract for the sale of shares must be evidenced in writing. The sale of corporate assets outside the regular course of a corporation’s business is an example of an extraordinary matter. Answer: T Sue is an employee at an […]

In most states, promises made to another based on moral obligation lack consideration and are not enforceable. Over half of all Fortune 500 firms train their employees to recognize and deal with particular types of behavior that breach their ethical […]

Conduct that unreasonably interferes with the enjoyment of land is a nuisance. For ratification to occur, the agent must have purported to act on behalf of, or as agent for, the identified principal. Answer: T According to the RMBCA, shareholders […]

One of the main goals of the Organization of Petroleum Exporting Countries (OPEC) was to reduce taxes from crude oil production. In order to be valid, an accountant€s disclaimer of liability must be (1) clear and unambiguous and (2) non-conspicuous. […]

When a building contractor has substantially performed a contract to construct a building, the contractor is entitled to recover the full contract price. In a composition of creditors, the various creditors of a single debtor mutually agree to accept a […]

Limited liability partnership statues are designed to permit the conversion of existing general partnerships into limited liability partnerships. The media enjoy a qualified privilege for stories that turn out to be false. Answer: T An estate in fee simple grants […]