Law Test 1

MeatPackers, Inc. bought a new kind of refrigeration system from Coolit, Corp. for storage of its meats. As part of the contract, Coolit delivered the refrigeration system to the MeatPackers plant, installed it, set its temperature, and then monitored it for several hours to make sure it worked. Before they left, Coolit's technicians handed MeatPackers a bill of sale. Absent any other terms or conditions, MeatPackers, Inc. received title to Coolit's refrigeration system when: a. Coolit delivered, installed, and tested the system. b. MeatPackers paid for the Coolit system prior to delivery. c. Coolit delivered the system to the MeatPackers plant. d. Coolit handed MeatPackers the bill of sale.

Coolit handed MeatPackers the bill of sale.

___________ occurs when one party makes false statements or commits some sort of false action that causes another party to rely on those falsehoods and then experience an injury or loss as a result. A. Abandonment of contractual obligation B. Fraudulent misrepresentation C. Anticipatory breach D. Constructive breach of contract

Fraudulent misrepresentation

n a written contract, Hogan agrees to sell Jason kitchen cabinets and to deliver them before December 21. On October 21, two months before the delivery is expected, Hogan tells Jason that he will not sell him the cabinets. Which of the following can Jason do in this situation? a. He can sue Hogan for breach of contract, but must wait until December 21 to do so. b. He can sue Hogan for breach of contract immediately. c. He can sue Hogan for breach of contract if he is unable to find another vendor by December 21. d. He cannot sue Hogan for breach of contract, since Hogan served an advanced notice to Jason.

He can sue Hogan for breach of contract immediately.

Which of the following beneficiaries has no enforceable legal rights? a. Donee beneficiary b. Incidental beneficiary c. Creditor beneficiary d. Insurance beneficiary

Incidental beneficiary

Which of the following is an equitable remedy under contract law? a. injunction b. monetary damages c. human servitude d. specific damages

Injunction

_________ contracts for the sale of goods of $500 or more are ________________ if the contract _________________________. a. Oral, not enforceable, is an executed agreement b. Oral, enforceable, involves specially manufactured goods that cannot be resold easily c. Written, not enforceable, involves admissions in court d. Electronic, not enforceable, is a written memorandum

Oral, enforceable, involves specially manufactured goods that cannot be resold easily

Which of the following is true of public interest and public policy? a. Public interest promotes behavior complying with the public consensus, while public policy refers to the idea that certain activities affect the entire social structure. b. Public interest is the consensus and public policy is the coercive social engineering strategy by which that consensus is implemented. c. Public interest promotes the making of safe goods to coerce the public policy to maintain a social structure that promotes health and safety, and prevents illness and injury. d. To meet the goal of public policy, public interest insists that manufacturers, sellers, and distributors compensate a victim, who is injured by an unsafe product.

Public interest is the consensus and public policy is the coercive social engineering strategy by which that consensus is implemented.

Samantha purchased a used computer system from Office Rental, Inc. who was updating its computers. Later, Big Bank asserted the right to repossess the used computer system from Samantha since it had a lien on all of Office Rental's business equipment to secure an unpaid loan. Samantha was unaware of this lien. What are Samantha's legal rights? a. She can claim that she was unaware of Office Rental's debt, and hence, Big Bank cannot assert its lien. b. She can sue Office Rental for breach of warranty of title. c. She can continue to possess the computer system, since she paid Office Rental for it. d. She can claim a refund from Office Rental, but cannot bring a lawsuit against Office Rental or Big Bank.

She can sue Office Rental for breach of warranty of title.

____________ goods are those that are in accordance with the obligations under the contract. a. future b. nonconforming c. tangible d. conforming

conforming

Gerald orders 1,000 cupcakes from Haddock Bakers for a Christmas Eve party. However, Haddock fails to deliver the cupcakes as per the schedule mentioned in the contract, and does not send any notification to Gerald. Gerald orders the cupcakes from Marlene's Cakes that evening. Gerald's order from Marlene's Cakes is called a ________. a. specific performance b. writ of replevin c. cover of a sales contract d. cure of nonconforming product

cover of a sales contract

Claudia contracts with Friendly Paving Co. to install a new driveway. To pay for this work, Claudia transfers to Friendly Paving Co. her right to receive payment from Clifford for a loan she made him. Friendly Paving Co. is now a(n): A. creditor beneficiary B. Donee beneficiary C. Executor D. Fiduciary

creditor beneficiary

Harvey orders high-end stoves and ranges from Bosch to sell in his appliance store, Harvey's Appliances. When the stoves arrive, Harvey discovers that the stoves are not what he ordered. Bosch can: a. cure the delivery. b. revoke the acceptance. c. cover the tender d. seasonably revoke the tender

cure the delivery

The prime target of the ____________ has been handguns. a. Consumer Product Safety Act b. dangerous per se rule c. telemarketing sales rule d. negative option rule

dangerous per se rule

John, a highly skilled mechanic specializing in Jabooti motorcycles, agrees to repair Gladys' Jabooti motorcycle, but when he becomes ill, he transfers that responsibility to Clark, a friend of his. The transfer to Clark is called a(n): a. assignment b. delegation c. novation d. conveyance

delegation

________ damages are reasonable expenses that indirectly result from the breach, such as expenses incurred in stopping delivery of goods, transporting goods, and caring for goods after the buyer's breach. a. Compensatory b. resale c. punitive d. incidental

incidental

Local business activity carried on within state boundaries is known as: a. public commerce b. interstate commerce c. intrastate commerce d. local commerce

intrastate commerce

Satisfactory performance: a. is either an express or implied condition of every contract. b. exists when parties fully accomplish every term, condition, and promise to which they agreed. c. exists when a party executes all the terms, except minor details that do not affect the contract's real intent. d. terminates an agreement, freeing the parties of any further obligation or liability.

is either an express or implied condition of every contract.

A(n) ____________ is any written warranty that does not meet all of the requirements for a full warranty. a. express warranty b. limited warranty c. implied warranty d. warranty of merchantability

limited warranty

Tom and Nancy enter into a written contract for the sale of a dollhouse that Tom will custom-make for Nancy. In the contract, Nancy agrees to pay $350 if she breaks the contract. This sum of money is known as: a. mitigation of damages b. speculative damages c. equitable remedy d. liquidated damages

liquidated damages.

A(n) ____________ can make a(n) ____________ because it deals in ____________ in the ordinary course of business or has knowledge or skills peculiar to those goods. a. merchant; firm offer; goods of the kinds sold b. obligor; gift; specially manufactured goods c. merchant; open price contract; goods of the kinds sold d. seller; firm offer; goods of the kind sold

merchant; firm offer; goods of the kinds sold

Even though Spice gives her four-year-old car to Homeless Helpers Charity, she: a. need not provide an odometer statement. b. must provide an odometer statement. c. need not provide an odometer statement, since the car is not over 15 years old. d. must set the odometer to zero before resale.

must provide an odometer statement.

Which of the following contains all the elements of a written agreement that can be enforceable under law? a. "Henry Shay agrees to purchase hand-knit sweaters for $45 apiece. Signed, Henry Shay." b. "Silvie Nader and Henry Shay are parties involved in this contract for the purchase of hand-knit sweaters on Wednesday, June 17. Signed, Henry Shay and Silvie Nader." c. "Silvie agrees to mail six hand-knit sweaters, at $45 apiece, to the house on Wednesday, June 17. Signed, Silvie Nader." d. "Full Agreement by Henry Shay and Silvie Nader. Henry agrees to purchase from Silvie six of Silvie's hand-knit sweaters at $45 each. Signed, Silvie Nader, and Henry Shay."

"Full Agreement by Henry Shay and Silvie Nader. Henry agrees to purchase from Silvie six of Silvie's hand-knit sweaters at $45 each. Signed, Silvie Nader, and Henry Shay."

Henry borrows money from Commerce Bank to purchase a house. However, he moves to another city to attend graduate school and sells the house to Maria. Henry wants to be released from his payment obligations to Commerce Bank. Which of the following would release Henry from his liability to Commerce Bank? a. A delegation of the payment obligation by Henry to Maria will release Henry from liability. b. The sale of the house by Henry to Maria involuntarily releases his payment obligation. c. A delegation of the payment obligation to Maria along with a written notice to Commerce Bank can release Henry from the liability. d. A novation in which Commerce Bank agrees to substitute Maria for Henry will release Henry.

A novation in which Commerce Bank agrees to substitute Maria for Henry will release Henry.

Which of the following is true of "click" fraud? A. The click-on process functions only in online contracts and not for online advertisements B. Clicks are proven ways to gauge interest in the advertiser's service or product. C. The click-on process functions only for online advertisements and not for online contracts. D. A problem that arises in this area is verifying the identity of the "clicker."

A problem that arises in this area is verifying the identity of the "clicker."

Which of the following is true of rejection of goods by the buyer? a. A rejection by the buyer can be done even after the buyer has expressed acceptance of the goods. b. A buyer can claim ownership of the goods even after rejection. c. A rejection by the buyer can occur even before the goods are tendered and inspected. d. A rejection must be done within a reasonable time after delivery or tender to the buyer.

A rejection must be done within a reasonable time after delivery or tender to the buyer.

Matrix, Inc. is the general contractor of a large commercial building project. Matrix subcontracted with Acme Flooring, Inc. to have flooring installed throughout the building. When Matrix failed to make payments to Acme as agreed, Acme stopped working. Commercial Bank, the lender for the project, orally promised Acme that Commercial would pay whatever Matrix failed to pay Acme if Acme would resume work. Acme finished the flooring, but was still not paid. Which of the following is true under the Statute of Frauds? A. According to the primary objective test, Commercial Bank is not obliged to pay Acme as the promise must be written and signed. B. According to the primary objective test, since Commercial Bank's promise enhanced its mortgage interest, it is liable for payment to Acme. C. According to the main purpose test, Commercial Bank is not obliged to pay to Acme since Matrix was not a party to its promise. D. According to the primary objective test, since Commercial Bank's promise did not involve the actual lending of money, it is not liable to Acme.

According to the primary objective test, since Commercial Bank's promise enhanced its mortgage interest, it is liable for payment to Acme.

Which of the following is true of oral contracts for the sale of goods of $500 or more? a. All oral contracts are unenforceable unless they are for the sale of goods of $500 or more. b. An oral contract is not enforceable, unless a written confirmation is received and signed by one party, and sent to the other for approval. c. An oral contract by a merchant is enforceable if a written confirmation is received by another merchant who does not object to within 10 days. d. An admission in court about the terms of the contract does not negate the general rule

An admission in court about the terms of the contract does not negate the general rule

____________ occurs when a party to a contract either expresses or clearly implies an intention not to perform the contract, even before being required to act. a. Frustration-of-purpose b. abandonment of contractual obligations c. commercial impracticability d. Anticipatory breach

Anticipatory breach

A knife made by Knife Co. has a metal handle with no warning, and the manufacturer has received reports that some consumers have received electrical shocks when attempting to use the knife as a screwdriver while installing an electrical outlet. Athena is one such consumer and decides to sue the manufacturer and the seller. Which of the following is true of this situation? a. Athena can sue the manufacturer, since there is no specific warning label on the knife. b. Athena cannot file a suit as a warning label may not reduce the likelihood of an injury in case of a knife. c. Athena cannot file a suit against the manufacturer, since the danger presented by the product is obvious. d. Athena can bring a lawsuit against the manufacturer, stating that the warning on the product was inadequate.

Athena can sue the manufacturer, since there is no specific warning label on the knife.

Celebrity Shelly Dunkle, wishing to spend a few undisturbed days by herself, checks into a resort hotel. She reserves a suite under the name of Barbi and stamps the initials B.I. into the hotel register. She also orders room service and signs all hotel bills with those same initials. Which of the following statements is true? a. Because Shelly has not signed her real initials, she cannot be held liable for the cost of the suite and all other bills she rings up under the initials B.I. b. Because Shelly has not signed her real initials, the hotel management cannot prove that any contractual agreement took place between them. c. Because the initials B.I. constitute Shelly's legal signature, she is legally obligated to pay for the cost of the suite as well as for other bills that she signs using those initials. d. Because Shelly did not sign her real name both parties must split payments for all bills signed with the initials B.I.

Because the initials B.I. constitute Shelly's legal signature, she is legally obligated to pay for the cost of the suite as well as for other bills that she signs using those initials.

Sagan is borrowing money from Big Bank. His friend Leda, who works for Graille Systems, signs the loan agreement promising to pay the debt if Sagan does not. In this scenario, ______________ is the obligee, and ____________ obligor. A. Sagan, Big Bank B. Leda, Big Bank C. Graille Systems, Sagan D. Big Bank, Sagan

Big Bank, Sagan

Gino, a used car salesman, tells BillyBob while test driving a restored '64 Mustang, "BillyBob, this car is a chick magnet!" So BillyBob buys the Mustang, but later is not satisfied because no girls want to go riding with BillyBob. BillyBob threatens to sue Gino. What result? a. BillyBob will win because Gino's statement is an express warranty. b. BillyBob will lose because Gino's statement is sales puffery. c. BillyBob will win because Gino's statement is an implied warranty of fitness for a particular purpose. d. BillyBob will lose because there are no express or implied warranties under the Magnuson-Moss warranty act.

BillyBob will lose because Gino's statement is sales puffery.

Under the ____________, an electronic signature is defined as "an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record." a. E-Sign Act b. UETA c. UCC d. CSIG

CSIG

The ____________ is an attempt by the federal government to reduce the use of unsolicited commercial e-mails on the Internet. a. Can Spam Act b. Mail and Telephone Order Rule c. Truth-in-Mailing Act d. Anti-Slamming Law

Can Spam Act

Which of the following entities are allowed to send merchandise through the mail to people who did not order it? a. Hospitals b. Local businesses c. Governmental units d. Charitable organizations

Charitable organizations

In 2012, Alder Inc. (seller) and Dell, Inc. (buyer) signed a long-term sales contract that provided for cashier's check payments to be made by Dell on the first of each month. In 2015, Dell began using a wire transfer payment method, and now Alder asserts that Dell is in breach of contract. Which of the following is true? a. Dell cannot introduce oral evidence in court since it violates the parol evidence rule. b. Dell can introduce evidence of the payment under the exception to the parol evidence rule. c.Dell violated the best evidence rule, hence cannot produce evidence in court. d. Dell can exclude parol evidence because wire transfers and cashier's checks are identical.

Dell can exclude parol evidence because wire transfers and cashier's checks are identical.

Time Zone sells Gary an iWatch for $4,000 by representing it has a real gold case and watch band. Later, Gary finds that the iWatch case and band are just polished with golden color, and the watch could be bought in the local store for $100. Gary can sue Time Zone for: A. Consequential damages B. Exemplary damages C. Nominal damages D. Speculative damages

Exemplary damages

After receiving her credit card bill, Claire feels that the credit card company has made a mistake. Several transactions are not hers. The law that has established procedures for the prompt handling of such billing disputes is known as the: a. Fair Credit Reporting Act. b. Fair Credit Billing Act. c. Fair Debt Collection Practices Act. d. Truth in Billing Act.

Fair Credit Billing Act.

Brenner entered into a written contract with the Inkblot Corporation for $1,000 worth of office supplies. Inkblot subsequently sent Brenner some supplies that were not requested in the contract. Brenner noticed that the order did not match the contract, but he accepted the nonconforming goods. Which of the following is true of this situation? a. The Inkblot Corporation must cure the improper tender. b. Inkblot is not required to cure the improper delivery since it has been accepted. c. Brenner can reject the goods without informing Inkblot of the defect in the supply. d. Brenner can accept the goods and through the court, obligate the Inkblot Corporation to cure the improper delivery.

Inkblot is not required to cure the improper delivery since it has been accepted.

Which of the following is true of the "Cooling-Off" Rule? a. It gives consumers an opportunity to change their minds after signing contracts with people who come to their homes for product sales. b. It allows sales of consumer goods or services under $25, made away from the seller's place of business, to be cancelled within three business days after the sale. c. It requires the seller to give the buyer one copy of a cancellation form, which the buyer may send to the seller any time before the third business day after the sale. d. It does not apply to consumer product parties given in private homes and to sales made in rented hotel rooms or restaurants.

It gives consumers an opportunity to change their minds after signing contracts with people who come to their homes for product sales.

Which of the following is true of a firm offer? a. It occurs when parties intend to be bound by a contract, but fail to mention the price. b. It occurs when a seller agrees to sell all it can produce to a particular buyer. c. It occurs when a merchant promises to hold an offer open without any consideration. d. It occurs when a buyer agrees to buy all its requirements from a particular seller.

It occurs when a merchant promises to hold an offer open without any consideration.

Jo is duly notified that her mortgage with Fund All Savings has been transferred to Big Loan Co. and that she should, henceforth, pay Big Loan Co. Jo continues to pay Fund All Savings and Big Loan Co. sues Jo for nonpayment. Which of the following is most likely to be the court's judgment? a. Jo is not liable to Big Loan Co., since she has already paid to Fund All Savings. b. Jo is liable to Fund All Savings and to Big Loan Co., since her mortgage has been transferred. c. Jo is liable to Big Loan Co., since she received a notice from them about the assignment. d. Jo is liable to Fund All Savings, since her mortgage was processed by them.

Jo is liable to Big Loan Co., since she received a notice from them about the assignment.

Joshua, a merchant, promises in a signed writing to Pedro, a consumer, to hold an offer to sell goods open for five months without Pedro giving consideration in exchange. However, Joshua sells the goods to another consumer and Pedro sues him for breach of contract. Which of the following is true of this case? a. Joshua is not bound by the contract, since firm offers cannot exceed three months. b. Since Joshua is a merchant and is bound by a firm offer made to Pedro, he has breached contract. c. The UCC will not enforce this contract as a firm offer as both parties are not merchants. d. Joshua is bound by this offer only if a five month offer is customary for this type of good.

Joshua is not bound by the contract, since firm offers cannot exceed three months.

Uncle Rodrick was deeply in debt when he died. His niece, Evangeline, became the administrator of his estate. She orally promised Rodrick's creditors that she would personally pay his debts if they would not publicize the fact that Rodrick died in debt. When Evangeline was unable to pay the debts, the creditors sued her. Will the creditors be legally able to collect from Evangeline? a. Yes, since Evangeline made a guaranty of payment. b. No, since Evangeline's promise was not in writing and signed. c. No, since Evangeline was not Rodrick's child. d. Yes, since there was a bargained-for exchange.

No, since Evangeline's promise was not in writing and signed.

Lori went into an electronics store that had a sign posted on the wall declaring "All sales final!" She told the salesperson that she was looking for an iPod with Pandora, so that she could listen to streaming music while working out in her WiFi-enabled health club. The salesperson selected a WiFi-capable iPod and told Lori that she could receive Pandora as long as the fitness center had WiFi. The next day, when Lori tried to use the iPod at the fitness center with WiFi, she found that she could only hear static. Which of the following is true of this situation? a. Lori may not be able to claim a refund, since the iPod will be declared as merchantable. b. Lori will be unable to return the iPod because the store's policy said "All sales final!" at the time of the purchase. c. Lori can claim a refund of the iPod on the basis of an implied warranty of fitness for a particular purpose created by the salesperson. d. Lori can claim a refund from the store based on a limited warranty that is practiced in the electronics industry.

Lori can claim a refund of the iPod on the basis of an implied warranty of fitness for a particular purpose created by the salesperson.

Under the ____________, sellers must ship orders within the time promised in their advertisements. If no time period is promised, sellers must either ship the order within 30 days or send the consumer an option notice. a. telemarketing sales rule b. negative option rule c. Cooling-Off Rule d. Mail and Telephone Order Rule

Mail and Telephone Order Rule

____________ requires that both the parties return to the other any consideration already received or pay for any services or materials already rendered. a. Termination by waiver b. Novation c. Mutual recission d. General release

Mutual rescission

Aspen assigns his right to receive payment from Donna to Henry. Later, Aspen assigns this same right to Doris. Doris gives notice to Donna on May 1, and Henry gives notice to Donna on May 2. Which of the following is most likely to be the court's ruling? A. Since Henry was the first assignee, he will be given the superior right to claim Aspen's benefits. B. Since Doris was the first to notify Donna, she will be given the right to claim the assigned benefits. C. Henry and Doris are joint assignees and will be given equal rights to claim the assigned benefits from Donna. D. Donna will be required to pay to Aspen, who in turn will be asked to make respective payments to Doris and Henry.

Since Henry was the first assignee, he will be given the superior right to claim Aspen's benefits.

According to the ___________________, whenever an ambiguous term, clause, or line is found in a prewritten contract, that ambiguity is interpreted against the party who wrote the contract. a. standard construction rule b. parol evidence rule c. best evidence rule d. equal dignities rule

Standard construction rule

To which type of transaction does the negative option rule apply? a. Subscription to CD or DVD clubs that sends products on a regular basis and require the consumer to opt out of the next shipment b. buying used cars c. subscription to telephone services d. buying goods via telephone or internet

Subscription to CD or DVD clubs that sends products on a regular basis and require the consumer to opt out of the next shipment

____________ performance occurs when a party, in good faith, executes all promised terms and conditions with the exception of minor details that do not affect the real intent of their agreement. A. Complete B. Satisfactory C. Partial D. Substantial

Substantial

Which of the following statements holds true of the FTC's Telemarketing Sales Rules? a. Calling times are restricted to anytime during business days. b. A telemarketer is allowed to call a consumer without requiring the consumer's consent. c. Telemarketers must state the total cost of the products or services offered and that the sale is final or nonrefundable. d. Telemarketers are excused from disclosing the name of the seller, and what they are selling before they make their pitch.

Telemarketers must state the total cost of the products or services offered and that the sale is final or nonrefundable.

Which of the following is true regarding Convention on Contracts for the International Sale of Goods (CISG)? a. The CISG governs only the formation of a sales contract and the rights and duties that arise from it. b. The CISG is concerned with the validity of a contract that would be governed by other laws. c. The CISG applies to the liability of the seller for death or personal injury caused by the goods to any person. d. The CISG applies to auctions sales, sales of stocks, securities, negotiable instruments or money.

The CISG governs only the formation of a sales contract and the rights and duties that arise from it.

Renee applied for credit to open her own beauty salon. The bank denies her the credit after learning she was recently divorced and receives public assistance income. Which of the following federal laws did the bank violate? a. The Fair Debt Collections Act b. The Equal Credit Opportunity Act c. The Truth-in-Lending Act d. The Fair Credit Reporting Act

The Equal Credit Opportunity Act

Better Houses, Inc. has been contracted to build an addition on the Joyners' house. It built half of the addition and then unexpectedly announced that it was not going to finish the job. Better Houses' decision to stop the job is called a(n): a. constructive breach of contract. b. substantial performance c. abandonment of contractual obligations d. repudiation of contract

abandonment of contractual obligations.

Bridget contracts with Hunter to purchase $30,000 worth of goods for her store. Hunter wants a clause in the contract stating that neither party will sue the other after one year from the date of breach of contract. Which of the following is true of this situation? a. Parties are not allowed to provide time limits in their sales agreements, since the UCC sets this time. b. Competent and informed parties can agree to set any time limit to sue for breach of contract. c. The courts must review the time limits the parties have determined in the sales agreement as reasonable. d. The UCC allows parties to shorten the time limit to bring a suit to a minimum of one year.

The UCC allows parties to shorten the time limit to bring a suit to a minimum of one year.

Which of the following is not a requirement for strict product liability? a. The product must be in a defective condition when the defendant sells it. b. The product must be unreasonably dangerous to the user or consumer because of its defective condition. c. The defective condition must be the proximate cause of the injury or damage. d. The defective condition of the goods must have been changed from the time the product was sold to the time the injury occurred.

The defective condition of the goods must have been changed from the time the product was sold to the time the injury occurred.

Which of the following is true of an exclusion of the implied warranty of fitness for a particular purpose? a. The exclusion can be an oral or written statement, promise or other representation about the quality of a product. b. The exclusion can occur by excusing buyers from examining the goods, the sample, or model. c. The exclusion must be in writing, bold type, and be conspicuous. d. Using expressions such as "as is", "with all faults", or some similar language would not exclude the implied warranty of fitness for a particular purpose.

The exclusion must be in writing, bold type, and be conspicuous.

Charles orally promises Holly that he will marry her. He also states that if they ever get divorced, then he will transfer one-half of his assets to Holly. They marry and divorce within a year. Which of the following is true of Charles's promise to Holly? a.The promise is not legally enforceable because it was not written. b. The promise is not legally enforceable unless Holly proves that the promise influenced her decision to marry him. c. The promise is legally enforceable only if it does not involve the transfer of land. d. The promise qualifies as an enforceable oral contract.

The promise is not legally enforceable because it was not written.

Which of the following is true of a shipment contract? a. The seller must put the goods in the possession of the carrier. b. The seller must tender the delivery of goods to the buyer. c. The seller offers to turn the goods to the buyer, and the buyer offers to pay for them. d. The seller tenders the delivery of goods to the carrier, along with the document title.

The seller must put the goods in the possession of the carrier.

Which of the following is true of consequential damages? A. They result from a breach due to special circumstances that exist with a particular contract. B. They are the sum of money equal to the real financial loss suffered by the injured party. C. They cover any expenses paid out by the innocent party to prevent further loss. D. They are awarded as a measure of punishment for the defendant's wrongful acts.

They result from a breach due to special circumstances that exist with a particular contract.

In what respect is a bailment legally different from a sale? a. Title transfers in a bailment, but no price is involved. b. In both, there is a transfer of title, but in a bailment the title reverts to the bailor at the end of the bailment. c. In a sale, the title transfer includes all rights of ownership, but in a bailment, the title transfer includes limited rights of ownership. d. Title does not transfer in a bailment

Title does not transfer in a bailment

Congress passed the ____________ which requires lenders to disclose the finance charge and the annual percentage rate. a. Fair Credit Reporting Act b. Equal Credit Opportunity Act c. Truth-in-Lending Act d. Fair Debt Collection Practices Act

Truth-in-Lending Act

A(n) ____________ is a new agreement resulting from a bona fide dispute between the parties as to the terms of their original agreement. A. accord and satisfaction B. mutual rescission C. termination by waiver D. Novation

accord and satisfaction

Tyler has always had a "180 day full warranty" from Business Sales Company when purchasing office equipment over the past five years. On this occasion, Tyler purchased a big screen LED TV from Business Sales that broke thirty days after Tyler purchased it. Business Sales asserts that it did not provide a 180 day full warranty on the TV and has no legal liability. Which of the following is true of this situation? a. Tyler cannot assert a warranty since Business Sales has not provided a full warranty on the product. b. Tyler may assert a warranty based upon past dealings with Business Sales. c. Tyler can bring a suit against Business Sales and claim punitive damages. d. Business Sales can escape liability by asserting that the defect was caused by the manufacturer.

Tyler may assert a warranty based upon past dealings with Business Sales.

Rajid, an immigrant who speaks little English, enters into a contract to pay $300 per month for ten years to purchase an auto from Travel Motor Co. The appraised retail value of the car is $5000. What legal remedy would release Rajid from his contract? a. unconscionability b. specific performance c. punitive damages d. implied understanding

Unconscionability

Which of the following is true of "time for performance"? a. Including the phrase "time is of the essence" in a written contract has no effect on the contract. b. When there is nothing to indicate in the contract that time is of importance, the court will allow additional time. c. When the time for performance is not stated in the contract, the contract must be performed within a reasonable time. d. When there is something special about the contract that indicates time is essential, additional time is allowed.

When the time for performance is not stated in the contract, the contract must be performed within a reasonable time.

Auto Rebuilders, Inc. orders original 1995 model parts for a Ford Mustang Cobra from Car Wreckers, Inc. Car Wreckers boxes the parts for shipment, but finds another purchaser who is willing to pay more and refuses to ship the parts to Auto. Auto is unable to find the parts for sale elsewhere, but is uncertain about what legal remedy to pursue. What remedy is best suited for this situation? a. Cover and sue for compensatory damages b. Sue for specific performance c. Writ of replevin d. Cure and sue for incidental damages

Writ of replevin

Donna entered into an oral contract with Ava to purchase a house from Ava, with $500 per month payments for the next 10 years. Donna moved into the house, remodeled it, and did extensive repairs. At the end of 10 years, Ava refused to convey title to the house to Donna and produced evidence at the resulting trial that the fair market rental value for the house averaged $800 per month over the 10-year period. Does Donna have an enforceable contract? a. Yes, Donna is entitled to the ownership of the house because oral contracts for the sale of land are enforceable under the Statute of Frauds. b. No, Donna cannot claim ownership of the house since there was no written contract with Ava. c.Yes, Donna can claim ownership of the house based on equitable estoppel. d. No, Donna is not entitled to the ownership of the house since she was paying below the fair value.

Yes, Donna can claim ownership of the house based on equitable estoppel.

Catherine and Jacob have a written contract to buy and sell "100 cases of widgets." The 100 cases is a typo, so after signing the contract they orally agree to modify the contract to "1,000 cases of widgets." If later the parties are in litigation concerning the amount of widgets involved in the contract, can evidence of the oral change be introduced into evidence? a. No, since this violates the best evidence rule. b. Yes, since this is an exception to the parol evidence rule. c. Yes, since both signed the original contract. d. No, since this violates the parol evidence rule.

Yes, since this is an exception to the parol evidence rule.

Star Software Systems and Henry orally agree for Henry to write special accounting software. This software usually takes three years to complete, but can be done sooner. Does Henry have an enforceable legal agreement with Star? a. Yes, the agreement is enforceable because Henry could possibly complete writing the software within a year. b. No, the agreement is unenforceable because it is not written and signed. c. Yes, the agreement is enforceable, but only to the extent of work Henry completes within the first year of the contract. d. No, the agreement is unenforceable since the contract involves a tangible work product.

Yes, the agreement is enforceable because Henry could possibly complete writing the software within a year.

Morey and Sheryl enter into a contract in which Morey agrees to pay Sheryl $40 to collect his mail while he is on a month-long vacation. Sheryl then delegates the duty to her son, Greg. In this delegation, Sheryl is the: a. assignor b. obligor c. assignee d. obligee

assignor

In an ____________, after the auctioneer calls for bids on an article or lot, that article or lot cannot be withdrawn unless no bid is made within a reasonable time. a. auction with reserve b. enforced auction c. auction without reserve d. entitled auctions

auction without reserve

When a buyer has a right to inspect the goods, the right usually must be exercised: a. before the goods are shipped. b. after the goods are shipped, but before delivery c. before accepting the goods. d. within ten days of accepting the goods.

before accepting the goods.

Under the ____________ rule, the courts generally accept into evidence only the original of a writing, not a copy. A. Best evidence B. Parol evidence C. Standard construction D. Equal dignities

best evidence

When goods are sent f.o.b. shipment, the title and risk of loss pass to the: a. carrier at the point of origin. b. buyer at the point of origin. c. buyer when he/she accepts the goods. d. buyer at the destination.

buyer at the point of origin.

In a tender of payment, the: a. buyer offers to turn the money over to the seller. b. buyer shows a seller his or her legal tender. c. seller puts conforming goods at the buyer's disposition. d. seller provides storage facilities for goods to the buyer.

buyer offers to turn the money over to the seller.

David went to the store to purchase a $15 MP3 player, advertised in the paper. The salesperson was encouraged by the store not to sell that MP3 player since it created a loss for the store. Instead, the salesperson told David that although the MP3 player was on sale, it was an undesirable, bottom-of-the-line product, and that David would be much happier with an Apple iPod Nano CD player for $250. The store: a. acted in good faith when it tried to offer a better product b. can be sued under the policy of negligence and strict liability. c. can be held guilty of a bait-and-switch scheme. d. can be held guilty of fraudulent misrepresentation.

can be held guilty of a bait-and-switch scheme.

Joe pays for his food at the drive-thru window as he receives it. The payment and the receipt of the food are ____________ conditions. A. Precedent B. Concurrent C. Subsequent D. Spontaneous

concurrent

Vega appoints Ancel, a real estate broker, to negotiate the sale of her home. The ________________ rule requires that this agreement be in writing and signed to be enforceable. a. parol evidence b. best evidence c. standard construction d. equal dignities

equal dignities

Which of the following is considered to be future goods? a. office furniture b. stocks c. fish in the sea d. gasoline at a gas station

fish in the sea

Jess buys a microwave oven with a manufacturer's full one-year written warranty. If Jess discovers that the microwave oven does not work properly during this time, the manufacturer is obligated to: a. charge Jess only for the cost of the parts replaced, not for the labor involved. b. repair the microwave at a nominal cost to Jess. c. provide a pro-rata credit for the defective part of the microwave. d. fix or replace the microwave for free.

fix or replace the microwave for free.

Jackson Motors tells Sue, a consumer, that Bliss Automobiles are made with metal bodies when they are in fact made of fiberglass. This would be considered a(n): a. fraudulent misrepresentation. b. sales puffery. c. bait-and-switch scheme d. act of dunning.

fraudulent misrepresentation.

It is important to identify a ____________ contract because it includes both goods and services. If the sale of goods dominates the contract, then it will be governed by ____________; however, if services dominate the contract, then it will be governed by ____________. a. blended; CISG; common law b. blended; common law; UCC Article 2 c. hybrid; UCC Article 2; common law d. hybrid; common law; Restatement of Contracts

hybrid; UCC Article 2; common law

Cristina receives a new credit card from Seventh National Bank that does not provide a means for a retailer to verify that the holder of the card is in fact authorized to use it. The next day, Cristina discovers that she has lost her card. As soon as she discovers the card is missing, she calls Seventh National to report the loss. Already, $620 worth of unauthorized charges have been made on her credit card. Under the Truth-in-Lending Act, Cristina will: a. have to pay for $50 of the unauthorized charges b. have to pay for the entire $620 of unauthorized charges. c. not have to pay any amount of the unauthorized charges. d. have to pay for 50% of the unauthorized charges.

not have to pay any amount of the unauthorized charges.

Willy and Brogan, aged 16, enter into a written contract in which Brogan will sell his horse to Willy for $250. Before the sale is finalized, Brogan seeks to be released from the contract and wants to offer in-court oral testimony concerning his age. The admission of Brogan's testimony is most likely governed by the ______________________ rule. a. standard construction b. best evidence c. equal dignities d. parol evidence

parol evidence

An exception to the _____________ rule states that if a written agreement depends on some event before it becomes enforceable, __________________ evidence may be offered regarding that _____________________. a. parol evidence, oral, condition precedent. b. best Evidence, oral, condition precedent. c. standard construction, written, condition precedent. d. parol evidence, written, condition precedent.

parol evidence, oral, condition precedent.

The Fair and Accurate Credit Transactions Act: ____________________________. a. establishes the same type of legal parity between electronic records and paper records b. prohibits merchants from using credit card receipts that show anything other than the last five credit card numbers c. is a federal act designed to deal with problems associated with cyber-commerce d. is a federal amendment to the Uniform Electronic Transactions Act

prohibits merchants from using credit card receipts that show anything other than the last five credit card numbers

A document of title allows the person who possesses it to: a. receive the goods named in the document. b. conclusively prove ownership of the goods named in the document. c. receive the goods named in the document free of any creditor claims. d. conclusively prove that the goods are free of defects.

receive the goods named in the document.

Starbucks Coffee contracts with Juan Valdez coffee farms to purchase "all the coffee beans Starbucks needs for the next twelve months." The parties have a(n) ____________ contract. a. open price b. requirements c. output d. firm offer

requirements

Samantha was looking for a certain shade of thread to complete her needlework on a tablecloth. At a local shop, however, she was unable to decide which of the five selected shades would be the closest match to the cloth. The shop owner allows Samantha to take the selected shades home and decide which one she would want to have. This is an example of which of the following? a. destination contract b. sale on approval c. sale on acceptation d. approval contract

sale on approval

A(n) ____________ includes any symbol, made with the intent to authenticate a writing. a. seal b. informal note c. mark d. signature

signature

The Statute of Frauds: ______________________. a. maintains that agreements can be oral while contracts have to be in the written format b. states that all contracts have to be in writing to be enforceable in the court of law c. decrees oral contracts to be invalid and hence not upheld or enforceable by law d. states that certain types of contracts have to be in writing to be enforceable

states that certain types of contracts have to be in writing to be enforceable

Tom orders $24,000 worth of premium bicycles from Budnitz, a premium bicycle manufacturer, to sell in his Tom's Bike store. After the bicycles are loaded into the freight truck and are on their way to Tom, Budnitz discovers that Tom is insolvent and unlikely to be able to pay for them. Budnitz has the right to: a. stop the delivery and sue for any damages. b. cure the delivery and sue for any damages. c. cover the tender and sue for any damages. d. seasonably reject the tender.

stop the delivery and sue for any damages.

Under the doctrine of ____________, the principal consideration is the safety of a product, not the conduct of the manufacturer or supplier of the goods. a. public policy b. negligence c. public interest d. strict liability

strict liability

Gabriel applies for a home loan. Mark signs the agreement promising to pay off the debt in case Gabriel fails to do so. In this case Mark is: a. the guarantor b. the obligee c. the obligor d. the assignor

the guarantor.

Mary contracts to lease an automobile from Zippo Sales with payments of $300 per month for a year and a final balloon payment of $1,200. This final payment is: a. lawful, since it satisfies the requirements of the Consumer Leasing Act. b. unlawful, since it exceeds $1,000. c. unlawful, as it exceeds three times the average monthly payment. d. lawful, since both parties have contracted on mutual agreement.

unlawful, as it exceeds three times the average monthly payment.

____________ is a method of commercial dealing that is commonly used in a particular field or industry. a. usage of trade b. contract for sale c. good faith d. firm offer

usage of trade

The Emmett School District (ESD) contracts with the GoldenFarms Dairy for "all of the milk" GoldenFarms can produce during ESD's current school year. The contract specifies a price, but no exact quantity of milk to be purchased is set in the contract. This contract is a(n): a. invalid contract because consideration is missing. b. valid output contract. c. valid requirements contract. d. invalid contract because no quantity is set.

valid output contract

If a person obtains property as a result of another's fraud, misrepresentation, mutual mistake, undue influence, or duress, the person is said to hold only: a. valid rights. b. insured rights c. contract rights d. voidable rights

voidable rights