1) Law is B
a) A
body of religious principles held by all members of society.
b)
A body of principles that society establishes to keep things running
smoothly.
c) Always
the result of case law decisions.
d) Derived
solely form the U.S. Constitution.
2) Law consists
of A
a)
Principles that govern conduct.
b) Mere
guidelines.
c) Arbitrary
rules.
d) None
of the above.
3) Our rights
flow from D
a) The
U.S. Constitution.
b) Federal
statutes.
c) City
ordinances.
d)
All of the above.
4) Individual
rights guaranteed in the U.S. Constitution: D
a) Have
no accompanying duties.
b) Apply
only to a small number of individuals.
c) Are
subject to legislative laws.
d)
Generally have accompanying duties.
5) A right is defined as B
a) An
obligation.
b)
A legal capacity to require another party to perform an act.
c) Any
written promise.
d) None
of the above.
6) Rights
guaranteed in the U.S. Constitution: A
a)
Cannot be taken away by statutes or court decisions.
b) Can
be taken away by statutes.
c) Can
be taken away by court decisions.
d) Can
be taken away by local ordinances.
7) The right
of privacy consists of C
a) The
right to be secure against searches by the government only.
b) The
right to protection against intrusions by others only
c) Both the right to be secure
against unreasonable searches by government and the right to protection against
intrusion by others.
d) None
of the above.
8) The right
to privacy applies to protect you from unreasonable searches: D
a) To
you personally.
b) To
your home.
c) To
your business.
d)
All of the above.
9) Technology: B
a) Has
not created situations that require the application of new rules of law.
b)
Has indeed created situations that require the application of new rules
of law.
c) Has
done away with the right to privacy.
d) Has
made it easier to identify when one's privacy has been invaded.
10) Legal
principles expressed for the first time in court decisions are called: D
a) Statutory
law.
b) Stare
decisis.
c) Common
law.
d)
Precedent.
11) The power given to courts to hear certain
types of cases is called: A
a)
Jurisdiction.
b) Mediation.
c) Arbitration.
d) Summary
judgment.
12) An example of special or limited
jurisdiction would include D
a) Probate
courts.
b) Juvenile
courts.
c) equity
courts
d)
All of the above.
13) The types
of civil cases that can be brought in federal district court include B
a) The
probate of an estate.
b)
Cases between citizens of different states.
c) Cases
brought by the citizen of one state against the state government of the same
state.
d) None
of the above
14) The
person who initiates a civil lawsuit is called the: C
a) Defendant.
b) Moving
party.
c)
Plaintiff.
d) None
of the above.
15) A deposition:
a) Is
the testimony of a witness taken under oath? D
b) Is
conducted outside of the courtroom.
c) Can
be used to impeach a witness.
d) All of the above.
16) Voir dire examination is used in
connection with A
a)
Jury selection.
b) Determining
whether the pleadings are valid.
c) Deciding
whether to appeal a trial court decision.
d) None
of the above.
17) In
mediation, the mediator acts like a: C
a) Judge.
b) Attorney.
c)
Messenger.
d) Expert
witness.
18) Which is
not considered an alternate means of dispute resolution? A
a)
Civil lawsuit.
b) Arbitration.
c) Minitrial.
d) Association
tribunals.
19) An ombudsman: A
a)
Is usually a government official.
b) Is
often appointed by a judge.
c) Receives
a large amount of judicial power.
d) None
of the above.
20) A summary
jury trial is B
a) Binding
on all parties.
b)
A mock trial.
c) A
full and complete hearing of all the evidence.
d) A
shortcut to establishing case-law precedent.
21)
Legislation and government regulations typically are enacted in response to: C
a) Changes
in the availability of organizational resources.
b) Ongoing
technological changes that make it easier to circumvent old laws.
c)
Widespread abuses of gaps in existing laws that are fundamentally
unfair.
d) Isolated
ethical transgressions by businesses.
22) Which of
the following has been linked with the long-term growth and profitability of
businesses? D
a) High
standards for product quality.
b) High
standards for employee welfare.
c) High
standards for customer service.
d)
all of the above
23) The
importance of trust as a fundamental principle underlying business transaction
is illustrated by expectations that: A
a)
Investors will be able to earn a return on their investments.
b) Employees
may be discharged at any time for any reason without notice.
c) Litigation
is inevitable because parties to agreements usually break promises.
d) Insider
trading proves that the economic system underlying business is flawed.
24) The owner
of a factory that releases toxic chemicals into the air and surrounding
waterways may be in violation of: A
a)
Environmental regulations.
b) Zoning
regulations
c) Antitrust
regulations.
d) All
of the above.
25) Laws that
prohibit theft, operation of a factory in areas zoned residential and copyright
infringement exist primarily: C
a) For
protection of the person.
b) For
the protection of public health, safety, and morals.
c) For protection of property.
d) For
protection of the state.
26) Laws such as those authorizing tax
collection and draft registration exist primarily: D
a) Because
they are morally justified.
b) To
protect individual health and welfare.
c) To
protect individual property rights.
d)
To enable the government to continue to function.
27) The passage of federal securities
disclosure laws occurred largely as the result of: B
a) Voluntary
self-regulation by ethics experts in the securities industry.
b)
The stock market crash of 1929.
c) Changes
in the international market for securities and negotiable instruments.
d) All
of the above.
28) The
Blanchard and Peale three-part test for resolving ethical dilemmas consists of
the following questions: B
a) Is
it legal? Is it ethical? Is it moral?
b)
Is it legal? Is it balanced? How does it make me feel?
c) Is
it ethical? Is it right? Is it front-page material?
d) Is
it right? Is it balanced? Does it smell funny?
29) The Laura Nash Model for resolving ethical
dilemmas: D
a) Seeks
to examine the dilemma from multiple perspectives.
b) Seeks
input from others in order to avoid pressure to yield consensus.
c) Seeks
to consider both the perceived dilemma and the "real" dilemma.
d)
All of the above.
30) In applying the front-of-the-newspaper
test to a contemplated course of conduct one should
ask: D
a) Would
I be found criminally liable if this winds up on the front page?
b) Would
I be liable for monetary damages if this winds up on the front page?
c) Would
I be willing to have my spouse, friends, and children read about this if it
winds up on the front page?
d)
Would I be able to explain this to the authorities if it winds up on
the front page?
31) A law to declare war B
a) Can
be enacted by both state and federal governments.
b)
Can be enacted only by the U.S. Congress.
c) Can
be enacted only by state governments.
d) Is
prohibited by the U.S. Constitution.
32) Judges of
the U.S. Supreme Court: A
a)
Serve for life.
b) Are
appointed by the U.S. Senate.
c) Cannot
be impeached.
d) Are
elected by the public.
33) The U.S.
Constitution: C
a) Is
unwritten.
b) Was
brought over from England in its entirety.
c)
Is a written document that specifies the structures and powers of the
U.S. federal government?
d) Prohibits
the states from having their own constitutions.
34) The power
to tax income: C
a) Is
possessed only by the federal government.
b) Is
possessed only by state governments.
c) May be exercised concurrently by
both state and federal governments.
d) Is
controlled exactly like the power to wage war.
35) The U.S.
Constitution has been amended: D
a) Only
expressly.
b) Only
by interpretation.
c) Only
by practice.
d)
By each of the ways listed above
36) The
federal supremacy refers to: C
a) The
power of the President.
b) The
power of the Supreme Court to make decisions.
c)
The power of the Federal Government to legislate in certain areas.
d) All
of the above.
37) The equal
protection clause: A
a) Applies to both state and
federal governments.
b) Prohibits
any classification whatsoever.
c) Applies
only to conduct by private parties.
d) Does
not permit reasonable classifications.
38) The
due-process clause: C
a) Allows
the U.S. government to take property without due process.
b) Allows
a state to take private property without due process.
c) Is, by liberal interpretation,
held to be a guarantee of protection from unreasonable legal procedures.
d) Does
not apply to state governments.
39) Which of the following powers is NOT
reserved solely to the national government? B
a) Power
to regulate interstate commerce.
b) Power to tax.
c) Power
to coin money.
d) Power
to borrow on the credit of the U.S.
40) When the President negotiates a treaty
with a foreign nation and submits it to the U.S. Senate for approval, the
President's action is based on C
a) An
express Constitutional amendment.
b) An
amendment by judicial practice.
c)
An amendment by practice.
d) The
power of manifest destiny.
41) Under the
commerce power, the federal government may regulate B
a) Some
interstate commerce only.
b)
All interstate commerce.
c) Some
intrastate commerce only.
d) All
intrastate commerce.
42) The
Clayton Act prohibits D
a) All
unfair methods of competition
b) Conspiracies
in restraint of trade.
c) Attempts
to monopolize.
d)
Price discrimination between buyers of like commodities.
43) The
Sherman Act focuses on B
a) Unfair
methods of competition.
b)
Combinations or contracts in restraint of trade.
c) Permitted
price discrimination.
d) Intrastate
commerce.
44)
Government may D
a) Prohibit
false advertising.
b) Enforce
standards for health and purity for cosmetics, foods, and drugs.
c) Engage
in competition with private enterprise or own and operate an industry.
d)
All of the above.
45) The FTC
Act prohibits C
a) Price
fixing
b) Labor
unions.
c)
unfair methods of competition
d) Price
discrimination.
46) The
Sherman Anti-Trust Act does not prohibit
D
a) A
manufacturer from having a natural monopoly over its own product.
b) A
seller to dominate a market because of superior product or business
c) A
manufacturer to sell only through a particular distributor.
d)
All of the above.
47) What
types of restraints of trade are unlawful? C
a) Voluntary
b) Binding.
c)
Unreasonable.
d) Interbrand
48) For
violation of the Sherman Act, the maximum fine that may be imposed on a natural
person is: B
a) $10,000,000.
b)
$1,000,000.
c) $0.00.
d) $1,000,000,000.
***Study Guide for
Exam 2 ***
(BUL
2241) Business Law
1) NAFTA
seeks to eliminate tariffs among which countries? B
a) All
members of the United Nations.
b)
U.S., Canada, and Mexico.
c) U.S.
and China.
d) Members
of the common Market.
e)
2) The transfer of
technology rights in a product to allow another firm in a foreign nation to
produce a product in return for royalties or other specified payments is
called: B
a) Exporting.
b) Licensing.
c) Agency
representation.
d) Subsidiary
sales.
3) Under which of the following is it held that a foreign
sovereign cannot be sued unless it engages in illegal commercial conduct? A
a)
Sovereign immunity doctrine.
b) Act
of state doctrine.
c) Timberlane
doctrine.
d) Sovereign compliance doctrine.
4) Which of the
following is NOT a nontariff barrier? A
a)
An import/export duty, or tax, placed on goods as they move in or out
of a nation.
b) Import
quotas.
c) Governmental
subsidies.
d) Complex
customs procedures.
5) Criminal laws: B
a) Vary
from state to state.
b)
Are the same from state to state.
c) Are
the same from state to state, except for white-collar crimes.
d) None
of the above.
6) Which of the
following statements is true? A
a)
Felonies are more serious than misdemeanors.
b) Felonies
are federal crimes only.
c) Felonies
involve white-collar crimes only.
d) Felonies
are less serious than misdemeanors.
7) Which of the following is a violation of federal law? D
a) Shipping
mislabeled food across state lines.
b) Shipping
mislabeled cosmetics across state lines.
c) Shipping
adulterated food across state lines.
d)
All of the above.
8) Perjury occurs: D
a) Only
in court.
b) Only
in written form.
c) Only
in state courts.
d)
None of the above.
9) A wrong that
arises from a violation of a private duty is called a: A
a) Tort.
b)
Criminel
action.
c)
crime.
d)
De Mala.
10) Which of the following
statements is true regarding the
World Trade Organization (WTO)? C
a) The
WTO has been in place since 1947.
b) The
WTO coordinates its activities with GATT.
c) It provides a dispute settlement
body to promote resolution of trade disputes.
d) It
has the ability to impose criminal penalties.
11) A direct sale to customers abroad by an American firm,
with payment commonly secured by an irrevocable letter of credit, is a (n): D
a) Foreign
distributorship.
b) Agency
arrangement.
c) Licensed
sale.
d)
Export sale.
12) Which of the
following is true regarding export regulations? A
a)
Valid reasons for controlling the export of goods include national
security, foreign policy, or short supply.
b) The
U.S. has recently implemented a system of granting export licenses that is
designed to differ from that used by the E.U.
c) Only
civil, not criminal, sanctions apply to those who violate export control
regulations.
d) Only
governments, not individuals, are held liable when goods are exported that
might be used for improper defense purposes.
13) Legal restrictions of U.S. firms doing business abroad
in regard to payments made to foreign officials for obtaining business are
contained within: C
a) The
Corruption Prohibition Act.
b) The
Antibribery Control Act.
c)
The Foreign Corrupt Practices Act.
d) None
of the above.
14) When a foreign
government takes over an America business that is being conducted in the
foreign country, this is called: A
a)
Expropriation.
b) Dollar
credits.
c) Suspension
agreement.
d) Antidumping
15) Companies with
concerns over the possibility of expropriation could lessen the harm or the
likelihood of this occurring by: D
a) Fully
investigating a host government's stability.
b) Establishing
treaty commitments.
c) Obtaining
insurance.
d)
All of the above.
16) Under judicial
interpretation of the Lanham Act: D
a) Foreign
goods that bear a trademark identical to the one owned and recorded by a U.S.
corporation may enter the U.S. freely.
b) Foreign
goods bearing a trademark identical to a valid U.S. trademark, but are
physically different, may enter the U.S. freely.
c) Whether
or not foreign goods bearing a trademark identical to that of a U.S.
corporation may enter the U.S. freely depends upon the validity of the foreign
trademark.
d)
None of the above.
17) Crimes are
generally defined and their punishments specified by: C
a) Trial
court judges.
b) Appellate
judges.
c) Codes and statutes.
d) The
U.S. Constitution.
18) A crime generally
consists of: C
a) An
act.
b) An
act or omission.
c)
A mental state and an act or omission.
d) A
mental state and harm.
19) Conspiracy means
_________________ committing a criminal act. B
a) Thinking
about
b)
An agreement aimed at
c) Thinking
with others about
d) All
of the above
20) A computer crime
generally requires that: C
a) The
criminal possess a computer.
b) The
victim possess a computer.
c)
The criminal have some knowledge of computers.
d) The
victim have some knowledge of computers.
21) Computer crimes
include: D
a) Theft
of hardware.
b) Theft
of software.
c) Intentional
damage to information stored on a computer.
d)
All of the above.
22) A wrong that
arises from a violation of a private duty is called a: A
a) Tort.
b)
Crime.
c)
De Mala.
d) Criminal
action.
23) Concerning torts and crimes, choose the correct
statement: D
a) Every
tort is a crime.
b) Every
crime is a tort.
c) No
crime is a tort.
d)
A crime may also be a tort.
24) In order to establish the tort of false
imprisonment, a person must
show
imprisonment for: A
a)
Any amount of time.
b) At
least one minute.
c) At
least ten minutes.
d) At
least one hour.
25) Defamation of a public figure requires what additional
element? B
a) Intent.
b) Malice.
c) Causation.
d) None
of the above.
26) Which of the following is a defense to defamation? C
a) Slander
b) Libel.
c)
Truth.
d) None
of the above.
27) The degree of
care required of a person is C
a) That
which a person exercised in that situation.
b) That
which an extraordinary person would exercise under similar circumstances.
c) That which an ordinary prudent
person would exercise under similar circumstances.
d) None
of the above.
28) Professionals
have a duty to perform their jobs at the level of B
a) A
reasonable person.
b)
A reasonable professional in the same business.
c) An
extraordinarily careful person.
d) None
of the above.
29) Which country provides the greatest recovery for tort? A
a)
United States.
b) England.
c) Japan.
d) Austria.
30) The concept of
immunity from liability means that: B
a) One
who harms another can be held liable only for voluntary acts.
b)
Certain persons are not subject to tort liability.
c) One
who harms another without intending to do so is not subject to tort liability.
d) One
who harms a child never can be sued by the parents of the injured child.
31) If the plaintiff has either engaged in or refrained from
actions that are at least partially to blame for the injuries received, what
negligence has occurred? B
a) Criminal.
b)
Contributory.
c) Personal.
d) Prejudicial.
32) The Lanham Act
grants protection for A
a)
Trade secrets.
b) Copyrights.
c) Trademarks.
d) Patents.
33) Which of the
following is not the exclusive right of the holder of a copyright? D
a) To
prepare works that are derived from the original work.
b) To
obtain a court order enjoining use of the original work by another.
c) To
distribute copies of recordings of the original work.
d)
To display or perform the original work in public.
34) Three types of patents available under U.S. law are: B
a) Utility,
product, design.
b)
Design, plant, utility.
c) Design,
packaging, invention.
d) Utility,
regulatory, common law.
35) A business
formula, information compilation, or device that provides an advantage over
competitors that do not have it is known as a: C
a) Competitive
advantage.
b) Strategic
advantage.
c)
Trade secret.
d) Restraint
of trade.
36) Where privacy or nondisclosure of proprietary
information is desired, it would be best to seek protection under: C
a) U.S.
copyright laws.
b) U.S.
patent laws.
c)
State trade secret laws.
d) GATT.
37) Computer programs are subject to protection in the U.S.
under: D
a) Copyright
laws.
b) Patent
laws.
c) Trade
secret laws.
d)
All of the above.
38) In order to protect themselves from disclosure of
proprietary or confidential information, businesses may: D
a) Implement
security measures to prevent access by outsiders.
b) Enforce
contractual nondisclosure agreements against departing employees.
c) Limit
disclosure of such information to those with a need to know.
d)
All of the above.
39) To analyze a copyright infringement claim in the context
of computer programs, courts will primarily examine: B
a) The
total number of program steps that are substantially similar.
b) The number of significant
program steps that are substantially similar.
c) Whether
the programs appear substantially similar in ordinary language.
d) Whether
the programs appear substantially similar in machine language.
40) In order to
obtain a court order enjoining a competitor from using your trademark, it is
necessary to show that: C
a) You
invested a certain level of resources to develop the mark.
b) The
competitor is making unfair profits from use of the mark.
c)
The competitor's use of the mark is in danger of confusing the public.
d) All
of the above.
41) A copyright
bestows upon the creator of an artistic or literary work a federal statutory
right to exclusively: D
a) Use
the work.
b) Reproduce
the work.
c) Display
the work.
d)
All of the above.
42) Computer programs
are subject to protection in the U.S. under D
a) Copyright
laws.
b) Patent
laws.
c) Trade
secret laws.
d)
All of the above.
43) Without meaning
to, Alice carelessly strikes Mary. Mary may be able to sue Alice for: B
a) An
intentional tort.
b)
Negligence.
c) Strict
liability.
d) Absolute
liability.
44) An administrative
regulation: A
a)
Has the force of law.
b) Is
a guideline that my voluntarily followed.
c) Is
a suggestion of what will protect the environment.
d) Is
a standard used to guide an industry at the industry’s discretion?
45) The "public
comment" period for proposed administrative agency rules must be at least
_______ days. A
a)
30
b) 60
c) 90
d) 120
46) One reason the U.S. controls the exports of goods and
technology is: D
a) For
national security.
b) Foreign
policy.
c) Short
supply of domestic goods.
d)
All of the above.
47) White collar crimes: D
a) Always
involve the threat or use of force or violence.
b) Generally
involve the threat or use of force or violence.
c) Sometimes
involve the threat or use of force or violence.
d)
Do not involve the threat or use of force or violence.
48) Counterfeiting
is: C
a) A
federal crime only.
b) A
state crime only.
c)
Both a federal and state crime.
d) None
of the above.
49) Defamation of a public figure requires what additional
element? B
a) Intent
b)
Malice
c) Causation
d) None
of the above
50) Comparative negligence: B
a) Has
been rejected by most of the states.
b)
Allows a comparison of negligence between plaintiff and defendant.
c) Only
applies when the plaintiff has signed a release.
d) Is
a bar to recovery under common law.
***Study Guide for
Exam 3 ***
(BUL
2241) Business Law
1) The plaintiff in a quasi-contractual action can recover C
a) Lost
profits.
b) Damages
for mental distress.
c)
The reasonable value of the benefit conferred upon the defendant.
d) For
all the damages sustained.
2) An agreement that
consists of two or more parts and calls for corresponding performances of each
part by the parties is called a: A
a)
Divisible contract.
b) Partial
contract.
c) Performance
contract.
d) Divided
contract.
3) Under the Uniform
Commercial Code (UCC), a firm offer applies to: D
a) An
unlimited, stipulated period of time.
b) A
written, signed offer by anyone to buy or sell goods.
c) An
unwritten but definite offer to buy or sell goods.
d)
A written, signed offer by a merchant to buy or sell goods.
4) If an offeree dies before the offer has been accepted,
the offer: A
a)
Is automatically revoked by the death of the offeree.
b) May
be rejected by the surviving spouse of the offeree.
c) May
be accepted by the surviving spouse of the offeree.
d) May
be accepted by the guardian appointed for any minor children of the offeree.
5) In an auction
___________, the auctioneer takes bids as agent for the seller with the
understanding that no contract is formed until the seller accepts the
transaction. B
a) Without
reserve
b)
With reserve
c) Without
preserve
d) With
preserve
6) All of the
following statements refer to an element of fraud except: C
a) The
defendant made a false statement.
b) The
defendant knew that the statement was false.
c)
The defendant desired to obtain a financial benefit.
d) the
defendant intended for the other party to rely on the false statement.
7) The key time for
determining whether a party lacked contractual capacity is: D
a) the
time the plaintiff expresses dissatisfaction with the contract terms.
b) The
time set for performance of the contract.
c) The
time the value of the bargain becomes clear.
d)
The time the contract was made.
8) Under the
__________ approach, consideration is defined as a benefit received by the
promisor or a detriment incurred by the promisee. D
a) pro-con
b) I
win, you lose
c) gain-loss
d)
benefit-detriment
9) A cancellation
provision: C
a) Makes
a promise illusory.
b) Gives
a person a free way out.
c)
Is limited to the terms set forth by the provision.
d) Results
from undue influence.
10) What damages are recoverable in a case of promissory
estoppel? A
a)
An amount necessary to restore the promisee to the position he or she
would have been in had the promisee not relied on the promise.
b) Profits
that the promisor expected.
c) Profits
that the promise expected.
d) An
amount necessary to restore the promisor to the position he or she would have
been in had the promisor not relied on the promise.
11) A contract is D
a) A
binding agreement.
b) An
agreement creating an obligation.
c) An
agreement that creates enforceable duties and obligations.
d) All of the above.
12) The elements of a
contract include all of the following except: D
a) An
agreement.
b) Two
or more competent parties.
c) Consideration.
d) An illegal purpose.
13) A party to a contract may be D
a) An
individual.
b) A
partnership.
c) A
corporation.
d)
All of the above.
14) Statements in an
employee handbook: A
a)
May be interpreted as being part of the employment contract.
b) Are
merely statements of existing policies and cannot form part of the employment
contract.
c) Are
always part of the employment contract.
d) Are
not part of the employment contract unless the employee handbook is clipped to
the contract
15) Negotiable
instruments are: A
a)
Formal contracts.
b) Informal
contracts.
c) Option
contracts.
d) First-refusal
agreements.
16) An implied
contract is shown by B
a) A
writing.
b)
Acts of the parties.
c) Statements
made in open court.
d) Oral
promises exchanged for oral promises.
17) A legally binding agreement
that can be rejected at the option of one of the parties is called a
(n): C
a) Void
agreement.
b) Revoked
contract.
c)
Voidable contract.
d) Optional
agreement.
18) A bilateral
contract consists of a: C
a) Promise
for an act.
b) Promise
for refraining from acting.
c)
Promise for a promise.
d) Promise
to contract.
19) An offer of a reward for the arrest and conviction of a
criminal is an example of: A
a)
A unilateral contract.
b) A
bilateral contract.
c) A
quasi contract.
d) A
formal contract.
20) The purpose of the quasi contract is to D
a) Encourage
the making of written contracts.
b) Prevent
enrichment.
c) Compensate
those who voluntarily help others.
d) Prevent unjust enrichment.
21) A contract that
has been set aside is said to have been
D
a) Voided.
b) Canceled.
c) Executed.
d)
Avoided.
22) The willingness
of an offeror to enter into a contractual agreement regarding a particular
subject is expressed by a (n): A
a)
Offer.
b) Acceptance.
c) Contract.
d) Agreement.
23) An offer that is
indefinite may be clarified by reference to another writing through: A
a)
Incorporation.
b) Reference.
c) Annotation.
d) Indexing.
24) A binding promise
to keep an offer open for a stated period of time or until a specified date is
called a (n): D
a) Time
contract.
b) Binding
contract.
c) Breach
contract.
d)
Option contract.
25) A counteroffer is a (n): B
a) Acceptance
of the original offer.
b)
Rejection of the original offer.
c) Acceptance
of the original offer and an invitation to negotiate further.
d) A
revocation of the original offer.
26) If no termination date is specified for an offer, the
offer will main open: C
a) For
one year.
b) For
six months.
c)
For a reasonable period of time.
d) Until
someone accepts the offer.
27) At an auction
sale, each bid is D
a) A
counteroffer to the auctioneer's offer of the merchandise.
b) An
acceptance of the auctioneer's offer.
c) An
invitation to negotiate.
d)
An offer.
28) A young woman
received an unordered diamond ring in the mail along with a bill for $850. She called the store and was told it was a
sales promotion and she should pay for the ring or return it. She said, "Thank you for the free
ring." The young woman kept the ring, did not pay, and was sued. Result? C
a) The
woman is liable for the reasonable value of the ring.
b) The
woman accepted the offer and is liable for $850.
c) The young woman may keep the
ring without liability.
d) The
young woman is obligated to return the ring.
29) In general, an
acceptance occurs when: D
a) a
particular form of words is stated to the offeror.
b) a
particular mode of expression is made to the offeror.
c) the
offeree reserves the right to reject the offer.
d)
a clear expression of acceptance occurs.
30) When an offer has
been accepted: B
a) A
contract always is formed.
b)
A binding agreement probably is formed.
c) Either
party may withdraw without consent.
d) The
acceptance is executory.
31) The maximum time
that a minor has to disaffirm a contract is: D
a) One
year from the date of the agreement.
b) 30
days from learning of his or her right to disaffirm.
c) The
age of majority.
d)
A reasonable period after reaching the legal age.
32) A minor cannot
avoid a contract to purchase a car if the
D
a) Car
has been destroyed.
b) Car
has been damaged.
c) Car
is used for minor's work.
d)
Minor is able to return the car, but does not do so.
33) The obligation of
a cosigner is discharged by: D
a) The
minority status of one of the parties.
b) The
majority status of one of the parties.
c) The
court's declaration of the contract's provision of necessities.
d)
The payment of the debt.
34) An agreement is
not binding when B
a) One
party makes a mistake regarding a material fact.
b)
Both parties make a mistake regarding a material fact.
c) One
party makes a mistake of law.
d) Both
parties make a mistake of law.
35) Jack sells Jim a
used car that Jack falsely described as having been driven only 12,000
miles. Fraud has occurred if: C
a) Jim
bought the car solely because of its color.
b) Jim
knew that the mileage was more than 12,000 miles.
c)
Jim relied upon Jack's statement.
d) Jack's
statement occurred after the sale.
36) Consideration is B
a) The
concern shown by the other contracting party.
b)
What does the promisor as the price for the promise demand.
c) A
stated number of dollars.
d) The
concern of both contracting parties for the protection of the environment.
37) When there is no consideration for a promise, the
agreement is: C
a) Illegal.
b) Void.
c)
Not binding.
d) Unethical.
38) Which of the following can be consideration for a
promise? C
a) Refraining
from beating one's spouse.
b) Promising
to refrain from beating one's spouse.
c) Refraining from smoking
cigarettes.
d) Refraining
from using cocaine.
39) A promise to perform an existing legal obligation is A
a)
Not consideration.
b) Binding
if the promisor promises to perform with extra care.
c) Binding
if the promisor promises to perform to suit the personal satisfaction of the
promise.
d) Binding
if substantial loss would be caused by the promise by a breach of the
promise.
40) The effect of the making of a partial payment to satisfy
an admitted debt is an example of the rule that: C
a) Past
benefits cannot be consideration for a later promise.
b) A
conditional promise may be consideration.
c)
Doing what one is bound to do is not consideration.
d) Consideration
must be adequate to be binding.
41) In the case of an illegal contract, both parties usually
are prohibited from seeking relief in the courts: D
a) If
the illegal contract has not been performed.
b) If
the contract has been partially performed.
c) If
the contract has been fully performed.
d) All of the above.
42) Which party to an
illegal agreement may get relief from the court? C
a) Plaintiff.
b) Defendant.
c) The less guilty party when
public interest is advanced by granting relief.
d) None
of the above.
43) Dealing honestly, reasonably, and in good faith: D
a) Is
required in every contract.
b) Is
not required for the sale of goods.
c) Is
required for all commercial transactions, but is not favored by the courts.
d)
None of the above.
44) The validity of a
contract is not affected by D
a) The
effect of the contract on the community.
b) Unconscionability.
c) The
absence of good faith.
d)
The fact that the contract turned out to be a bad bargain for one of
the parties.
45) An agreement,
which is contrary to public policy: B
a) Is
voidable by statute.
b)
May be deemed unenforceable by judicial determination.
c) Is
enforceable because the interest of society is not law.
d) May
be rescinded.
46) Which of the
following is not illegal? D
a) An
office football "pool" with a cash entry fee and a cash prize.
b) A
raffle with an entry fee to win a car.
c) A
"giveaway" to every 10th person who buys meat at a butcher shop.
d) A "giveaway" to every
10th person entering a department store.
47) An agreement to
restrain trade may be void on the grounds that it is B
a) Fraudulent.
b)
Contrary to public policy.
c) Illegal
lobbying.
d) Unfair
to merchants.
48) An agreement not
to compete is enforceable: A
a)
In the sale of a business.
b) Between
competitors.
c) In
contracts for the sale of goods.
d) In
contracts for the sale of securities.
49) When money is loaned at a greater rate of interest than
is allowed by law, ______is committed. A
a)
Usury.
b) Sharking.
c) Petty
theft.
d) Credit
malfeasance.
50) In an employment contract, agreements not to compete are
D
a) Illegal.
b) Generally
held to be in the public interest and therefore legal.
c) Never
questioned by the court.
d)
Valid, if the restriction is reasonable and necessary for the
protection of the benefitted party.
***Study Guide for
Exam 4 ***
(BUL
2241) Business Law
1) An
oral contract to sell a house is binding if: C
a) The
agreement is witnessed by 100 members of the clergy.
b) There
is a tape recording of the agreement.
c)
The buyer paid the price and received the deed of conveyance.
d) The
seller received a partial payment of the purchase price.
2) An oral
understanding is not binding if: C
a) the
services performed were not to the satisfaction of the other party
b) The
amount agreed to be paid for services rendered was not a fair and reasonable
amount.
c)
The parties intended to formalize their understanding with a written
agreement.
d) The
understanding may be terminated at will by either party.
3) An oral contract
can be enforced when it relates to A
a)
The purchase of a television set for $200.
b) The
sale of an interest in land for $400.
c) Managing
a factory for five years.
d) A
promise to answer for the debt of another.
4) The one-year
performance requirement for an oral contract begins C
a) On
the day of the agreement.
b) On
the first day of performance.
c)
On the day following the agreement.
d) The
day on which the agreement was placed in writing.
5) The standard
statute of frauds: D
a) Requires
full disclosure in the case of consumer sales on credit.
b) Requires
a seller of real estate to obtain a broker's license.
c) Specifies
the punishment of perjury.
d)
Requires that a contract for the sale of land be evidenced by a
writing.
6) The statute of
frauds applies to B
a) The
lease of an apartment on a month-to-month basis.
b)
The cancellation of a written agreement for the sale and purchase of
land.
c) An
employment agreement.
d) The
sale of goods less than $500.
7) A promise to pay a
debt must be in writing if: C
a) The
debt is for more than $500.
b) The
debt is now due and payable.
c)
The promise is to pay the debt of another.
d) The
debt owed is the promisor's.
8) An oral contract containing a
promise by an executor to pay estate debts from estate funds is A
a)
Binding.
b) Voidable
by the executor or administrator.
c) Enforceable
against the executor only if the executor signs written proof of the agreement.
d) Enforceable
against the other contracting party only if that party signs a written
agreement.
9) The statute of
frauds applies to C
a) A
contract of indefinite duration that is terminable at will by either party.
b) A
promise made directly to a debtor that the promisor will pay the creditor of
the debtor what is owed.
c)
A promise by an executor to pay a claim against the estate out of his
or her personal funds.
d) Mutual
promises to marry.
10) The Uniform
Commercial Code contains a statute of frauds relating to sales of personal
property, specifically: A
a)
Goods
b) Chattel
paper
c) Real
property.
d) None
of the above.
11) A writing that satisfies the
requirement of a writing under the statute of frauds could be evidenced by D
a) A
note.
b) A
memorandum.
c) A
contract.
d)
All of the above.
12) When the statute of frauds
applies and there is no written proof of the contract, the contract is C
a) void
b) Enforceable
if there are two credible witnesses.
c) Voidable by a party who has not
signed.
d) Illegal.
13) When a person has
performed services under an oral contract that cannot be enforced because of
the statute of frauds, such person: B
a) Can
recover the agreed payment for the services because a refusal to make payment
would be a breach of the contract.
b)
Can recover the reasonable value of the services because there is a
quasi-contractual duty to pay for the benefit received from such services.
c) Cannot
recover the value of the services because they were rendered under a unilateral
mistake of law.
d) can
have the party receiving the services arrested for obtaining property by false
pretenses
14) The parol
evidence rule: A
a)
applies to complete written contracts
b) Prevents
proof of fraud.
c) Applies
to incomplete contracts.
d) Is
not designed to preserve the integrity of written contracts.
15) A third-party
beneficiary: B
a) May
be obligated to pay for services rendered.
b) May bring suit on and enforce
the contract.
c) Must
consent to the contract.
d) Must
be identified by name.
16) A life insurance
contract is a third party: A
a)
Beneficiary contract.
b) Assignment
contract.
c) Payment
contract.
d) Performance
contract.
17) If there is a
time limitation or any other restriction in a contract, a third-party
beneficiary: C
a) May
ignore it.
b) May
void it.
c)
Is bound thereby.
d) Must
consent to be bound thereby before it is effective.
18) A third-party beneficiary contract may be amended: D
a) With
the consent of the beneficiary.
b) By
operation of law.
c) If
the contract allows modifications without the beneficiary's consent.
d)
All of the above.
19) Which of the
following is not a third-party-beneficiary contract? B
a) a
contract in which A hires B to give A's niece piano lessons
b)
a contract to repair sewers in front of Macy's Department Store
c) a
life insurance contract with a named beneficiary
d) a
contract between X and Y for Y to install a new door on Z's home
20) In a contract in which a tenant borrowed money from a
bank for the purpose of adding a bathroom to her apartment, the landlord is: D
a) A
direct beneficiary.
b) In
privity of contract with the tenant.
c) A
third-party beneficiary.
d)
An incidental beneficiary.
21) The party making an assignment is called the B
a) Assignee.
b)
Assignor.
c) Obligor.
d) Successor.
22) An incidental
third-party beneficiary of a contract: B
a) Can
sue to enforce the contract.
b)
Cannot sue to enforce the contract.
c) Is
a beneficiary specifically named in the contract.
d) Is
an assignee of the direct beneficiary.
23) An assignment: C
a) Is
a contract.
b) Requires
consideration.
c)
Is a transfer of rights.
d) Is
not enforceable.
24) An assignment is
valid only if: C
a) It
is written.
b) It
is written and sworn to before a notary public.
c)
There is a manifestation of the intent to assign.
d) The
assignment is paid for by the assignee.
25) Generally, the easiest item to assign is C
a) Credit.
b) Personal
services.
c) Money.
d) Agreement
calling for personal satisfaction of the assignor.
26) In the case of a
bilateral contract concerning a promise to deliver goods for a promise to pay
money, legally each party may C
a) Assign
rights only.
b) Delegate
duties only.
c)
Assign rights and delegate duties.
d) Assign
rights that then will relieve them from the duties.
27) The right to
performance under a contract can be assigned: D
a) Although
the sufficiency of the performance is to be determined by the personal
satisfaction of the other contracting party.
b) Although
the contract requires the performance of personal services.
c) Although
the contract provides for the extension of credit.
d)
If the burden of performing is not materially increased thereby.
28) In general, an
assignee stands B
a) In
a position less than the assignor.
b)
Exactly in the position of the assignor.
c) In
a position with greater rights than the assignor.
d) Similar
to but not equal to the assignor.
29) An assignee of a
right to money may be liable for the misconduct of the assignor: A
a) Under consumer protection laws.
b) Under
common law.
c) If
the assignment was supported by consideration.
d) If
the assignment was in writing.
30) Most contracts are discharged by: A
a) Tender of performance.
b) Performance
by the parties.
c) Operation
of law.
d) Substantial
performance.
31) A debt of $19 is discharged when the debtor: D
a) Tenders
the creditor a $100 bill, but the creditor refuses it because the creditor
cannot make change
b) Tenders
the creditor a $19 bill, but the creditor refuses it because the creditor wants
smaller bills.
c) Gives
the creditor a check for $19 and the creditor accepts it.
d)
Gives the creditor a check for $19 and the creditor cashes the check at
the debtor's bank.
32) When payment is
required by a contract, performance may consist of: D
a) The
payment of money that is accepted by the other party.
b) The
delivery of property that is accepted by the other party.
c) The
rendering of services that are accepted by the other party.
d)
All of the above.
33) When a debtor
makes a payment to a creditor specifying how it should be applied, the creditor
must apply the payment: A
a) As directed by the debtor.
b) To
the oldest outstanding debt.
c) To
the newest outstanding debt.
d) To
the largest outstanding debt.
34) If no time period
for performance is specified in a contract: C
a) The
contract is unenforceable.
b) Time
shall be of the essence.
c)
A reasonable time for performance will be implied.
d) Time
will be ignored by the courts.
35) In which case
will performance on the exact date specified in the contract probably be
essential? A
a)
sale of goods that fluctuate in value
b) sale
of goods that remain stable in value
c) sale
of real estate
d) sale
of goods where no harm results from delay in performance
36) The phrase "time is of the essence," means
that: B
a) The
court is in a hurry to dispose of the case.
b) Performance under the contract
at the times specified in the contract is vital or essential.
c) The
contract expressly states that time is of the essence.
d) The
price stated in the contract is subject to change without notice.
37) A contract to
build a house is deemed performed when: A
a) There has been substantial
performance of the contract.
b) The
house is approved by the city housing inspectors.
c) The
house is approved by the owner's architect.
d) The
house is approved by the owner.
38) A homeowner who
refinances her home mortgage may cancel the transaction: B
a) If
the terms of the contract were less favorable than anticipated.
b) Before midnight of the third
full business day.
c) Only
if she was the victim of fraud.
d) Upon
payment of a $1,000 penalty under a Federal Trade Commission rule.
39) A Federal Trade
Commission regulation gives a buyer three days in which to avoid a
home-solicited sale of goods that cost more than: A
a)
$25.
b) $50.
c) $100
d) $500.
40) A contractual
provision which states that a waiver of rights will not constitute a
modification to the contract is D
a) Not
enforceable as being in bad faith.
b) Not
enforceable as a violation of law.
c) Enforceable
by one party only.
d) Enforceable.
41) If a seller
delivers defective goods, the buyer does not lose the right to object to the
breach of contract if the buyer: B
a) Accepts
the goods.
b)
Accepts the goods with a reservation of right.
c) Agrees
to a modification of the contract.
d) Accepts
the performance without protest.
42) When one party has broken a contract, there are several
remedies, which include D
a) Bringing
an action for damages.
b) Rescinding
the contract.
c) Seeking
specific performance.
d) All of the above.
43) An example of intangible personal property is A
a) A patent.
b) A
fractional interest in furniture.
c) A
fractional interest in a condominium.
d) Natural
gas.
44) To establish a
gift, the party claiming to be the donee must prove: D
a) Delivery
only.
b) Intent
only.
c) Intent
and a promise to deliver.
d) Intent and delivery.
45) A gift causa mortis is revoked: D
a) If
the donor does not die.
b) If
the donee dies first.
c) If
the donor expressly revokes the gift.
d)
All of the above.
46) Tom established a
bank account for his daughter Mary under the Uniform Gifts to Minors Act. Tom
named himself the custodian. Later, Tom had a serious disagreement with Mary
and ordered the bank to transfer the money in that account to a similar account
maintained in the same bank for Tom's son Ed. The bank: B
a) Must
comply because the custodian controls the account.
b) Must refuse because this would
clearly not be for the benefit of Mary.
c) Must
comply because Uniform Gifts to Minors accounts are not final.
d) Must
comply if Mary is at least 18 years of age at the time in question.
47) If a maintenance employee at a hotel finds a pocketbook
with $500 in cash while cleaning an empty guest room, the employee: B
a) Is
entitled to keep this property because the employee has the legal status of
"finder."
b) Must give the property to the
manager of the hotel to be kept for the owner.
c) Must
place an advertisement in a local newspaper; if the property is not claimed
within seven business days, the employee is entitled to keep it.
d) Can
retain possession of the property until the owner establishes ownership.
48) Susan threw away in the garbage an old chair that had
been in her family for many years by placing it on the curb with the rest of
the trash. Alma came by and began to admire the chair. Although the chair was
heavy, Alma picked it up and called to a friend saying that she had just found
an antique chair. When Susan heard this, she demanded the return of the chair.
The chair belongs to D
a) Susan
unless Alma can show Susan gave it to her.
b) Susan
because there was no intent to make a gift.
c) Alma
because anything one finds belongs to the finder.
d) Alma because Susan abandoned it
and Alma took possession of it.
49) Which of the following forms of cotenancy does not have
right of survivorship? C
a) joint
tenancy
b) tenancy
by entirety
c) tenancy in common
d) community
property
50) Sylvia and Morris were married and owned their home as
tenants by the entirety. When Morris died, his will said that he left his half
of his home to his brother. Sylvia objects to this. The ownership of the home: A
a)
Belongs solely to Sylvia by survivorship.
b) Is
now a joint tenancy between Sylvia and the brother.
c) Is
now a tenancy in common between Sylvia and the brother
d) Belongs
to Sylvia and the state.
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