BUS 202 - Mid-Term Questions (Fall 2017)

Which of the following are examples of formal contracts?

Contract under seal, letters of credit, but not executory contracts

Which of the following areas does Article 2(A) of the Uniform Commercial Code (UCC) govern?

Contracts for the lease of goods

The legal ability to enter into a binding agreement is known as what?

Contractual capacity

Sellers and lessors have the right to ______ or fix problems with nonconforming goods, under sections of the UCC.

Cure

Negligence per se is the same thing as negligence

False

The UCC has adopted the mirror image rule.

False

The United States is not a party to the Central American Free Trade Agreement

False

The first amendment to the US Constitution is the primary source of authority for federal regulation of business

False

The parties to an international contract cannot select the forum in which disputes are resolved because the forum is always based on the location of the defendant's principle place of business.

False

Before a case can be heard, it must meet the threshold requirements of standing, case or controversy, and matter or public interest

False

Before a case can be hears, it must meet the threshold requirements of standing, case or controversy, and matter of public interest

False

There is no requirement that enrichment by unjust in order to recover under quasi-contract

False

When a law establishes labeling, design, or content requirements for products, the manufacturer has a duty to meet these requirements. Failure by the manufacturer to meet those standards resulting in harm to a plaintiff constitutes

Negligence per se

Which of the following is true regarding privacy rights?

The U.S. Supreme Court has found that US citizens have a right to privacy based upon the US constitution

According to the "mirror-image" rule, if the terms of the acceptance do not mirror the terms of the offer,

The attempted acceptance is a counteroffer

What type of remedy does the UCC give buyers and lessees when the other party has breached a contract?

The benefit of the bargain

What was the result in the case in the text Lucy v. Zehmer involving whether allegations of joking prevented the formation of the contract involved?

The court ruled that the agreement would be enforced because under the applicable standard, it was not apparent that joking was involved.

A key feature of a voidable contract is that

one or both parties have the ability to either withdraw from or enforce the contract.

The mirror-image rule that applies under common law ______________ under the UCC.

only applies if the seller agrees to liquidated damages

The employment-at-will doctrine that governs the employment relationship in the United States

prohibits termination of employment for whistleblowing.

Some other countries' constitutions provides rights that American citizens do not have.

True

The court may grant a recovery based on quasi-contract in order to prevent an injustice from occurring when one party thought there was an enforceable contract, but an enforceable contract does not actually exist.

True

Under ordinary circumstances, a party's duty to perform a promise agreed to in a contract is absolute.

True

Under the UCC, buyers and lessees are obligated to accept and pay for conforming goods in accordance with the contract.

True

Parties to a contract lack contractual capacity if

one of the parties is intoxicated.

UCC Section 2-718 pertains to liquidated damages and allows the non-breaching seller to claim against a breaching buyer __________ percent of the purchase price or __________, whichever is __________, as liquidated damages.

20; $500; less

Which of the following is true regarding the status of an agent as a fiduciary?

A agent is a fiduciary to the principal

In successful market share liability cases, who is made to pay the damages incurred by the plaintiff?

A number of manufacturers.

The Fifth Amendment's protection against self-incrimination encompasses which of the following?

A person does not have to be a witness against himself or herself in a criminal case.

"But for" causation refers to which of the following?

Actual cause.

Which of the following is not considered a material term?

All of there examples are considered material terms

_______ occurs when one person places another in fear to apprehension of an immediate, offensive bodily contact

Assault

What is the term for the third party who receives an assignment of contract rights?

Assignee

Jimmy and Penny enter into a contract. Jimmy transfers his rights under the contract to Luis. Jimmy is an:

Assignor

What do cramming and slamming have in common?

Both are types of telemarketing fraud

Which of the following is true under the UCC, regarding the right of a seller or lessor to presume acceptance?

Both lessors and sellers may presume acceptance if buyers or lessees fail to reject goods within a reasonable period of time.

Whenever a party fails to perform his or her obligations under the contract, a _____ occurs.

Breach

Which of the following theories of liability for defective products stems from contract theory?

Breach of warranty

Under the Uniform Commercial Code (UCC), which of the following statements is true of the remedies available to buyers and lessees when a seller or lessor breaches a sales contract?

Buyers or lessees are allowed to accept nonconforming goods and then seek monetary damages to give them the benefit of the bargain.

Under the UCC, how may an acceptance be made?

By any reasonable means of communication

Contracts containing conditions affecting the performance obligations of the parties are called ______ contracts.

Consitional

An_______ is defined as a promise or set of promises for the breach of which the law gives a remedy or the performance of which the law in some way recognizes a duty

Contract

Based on the subject matter, which of the following law cases will fall under exclusive federal jurisdiction?

Cases related to bankruptcy.

The legislative branch has ultimate authority for

Civil Law Systems

Which of the following is a characteristic of civil law?

Civil law systems use a form or system of separation of powers.

Smith the CEO of a steel company, wanted to win the tender to supply rods for a reputed real estate company. Hence, he p[aid money to an executive of the real estate company to disclose the dollar amounts of other competing bids so that his company could offer a better bid. What is the crime referred to as?

Commercial Bribery

In which type of legal system are judges typically appointed or elected?

Common law system.

An assault victim sues the person who assaulted her. The court awards her $10,000 to pay for her actual medical expenses, to compensate her for time from work and to compensate her for her pain. The $10,000 is an example of what type of damages?

Compensatory

Which statement is true regarding damages that may be recovered in negligence-based product liability cases?

Compensatory damages and punitive damages may be recovered

Which statement is true regarding damages that may be recovered in negligence-based product liability cases ?

Compensatory damages and punitive damages may be recovered.

When each party's performance is conditioned on the performance of the other, which of the following conditions occur?

Concurrent

The UCC requires that buyers are obligated to accept and pay for ______ in accordance with the contract.

Conforming goods

Accountants may not be sued for malpractice because that action is only available in the medical community.

False

At a[n] ______, attorneys examine a witness under oath with a court reporter present.

Deposition

At an____ attorneys examine a witness under oath with a court reporter present

Deposition

Which of the following may be held liable in a malpractice actions?

Doctors, accountants, and real estate brokers

Which of the following are types of intended beneficiaries?

Donee and creditor, but not incidental

Due to certain political conflicts, United Cadvia decided to place a ban on all industrial imports from Frensland. This is an example of an _______.

Embargo

When a principal falsely leads a third party to believe that another individual serves as his or her agent, the principal has created agency by

Estoppel

Which of the following describes conditions explicitly stated in the contract?

Express

What is the key difference between an express and an implied condition?

Express conditions are clearly stated while implied conditions are inferred.

__________, otherwise known as blackmail, is the making of threats for the purpose of obtaining money or property.

Extortion

A finance lease is equivalent to a consumer lease.

FaLSE

A buyer can never revoke acceptance of nonconforming goods.

False

A strict liability tort occurs when a defendant acts with the intention of engaging in a specific act that ultimately results in injury

False

White-collar crime is not punishable by imprisonment under our existing criminal laws

False

Within the U.S. courts may issues advisory options

False

Trevor goes door-to-door selling magazine subscriptions. Trevor knows, however, that he is simply taking money for subscriptions and have absolutely no intention of ever arranging for the provision of magazines. Which of the following offenses, if any, has he committed?

False Pretenses

Which of the following is the making of an entry into the books of a bank or corporation that is designed to represent the existence of funds that do not exist?

False entry

Kelly is mad at Pier and locks Pier in a closet for two hours without justification. This is an example of _______.

False imprisonment.

A company in France makes a business arrangement with a U.S. toy company, Freedo. The arrangement allows the French company to sell Freedo's products directly to the consumers under the same brand name in France. At the end of the first year, the French company pays Freedo 35 percent of its net sales. Which of the following methods of entering a foreign market has been best illustrated in this scenario?

Franchise agreement.

What does the free-exercise clause of the First Amendment provide?

Government cannot make a law prohibiting choice in relation to religion

What does the free-exercise clause of the First Amendment provide?

Government cannot make a law prohibiting choice in relation to religion.

_______ means good faith in relation to transactions between parties who are not merchants.

Honesty in face

A fan at a baseball stadium is hit by a baseball. Under what circumstances could the owner of the stadium be held liable for resulting injuries?

If the stadium owner failed to fulfill its duty to provide reasonable protection because there were no barriers or other measures taken to protect game attendees from being struck by the ball

When does an assignment become effective?

Immediately.

Conditions that are not explicitly stated, but are inferred from the nature and language of the contract are known as _________ conditions.

Implied

What is the term for when a plaintiff implicitly assumes a known risk?

Implied assumption of the risk.

Which statement is true of the term "tort"?

It is a French word meaning "wrong"

Which of the following is true regarding the fourteenth amendment?

It is not a part of the Bill of Rights and it extends federal guarantee of due process and most constitutional protections to all states

The arrangement between the US, Canada, and Mexico to reduce and gradually eliminate tariffs and other trade barriers is an example of an________

Multilateral Free Trade Agreement

Kim negligently hits Lennithia with her car. Which of the following is true?

Kim has a duty to come to the aid of Lennithia because she negligently hit her.

Which of the following can be used as a defense to the enforcement of a contract

Lack of genuine assent

Lara sued a consumer electronics company on the basis that she incurred injuries while trying to use the company's hair straightener. However, the defendant is using the assumption of risk as its defense. Which of the following would strengthen the company's defense?

Lara continued to use the product in spite of the coil burning out due to overuse

The secretive taking and carrying away of the personal property of another without using force to do so is called?

Larceny

Under Article 2(A) of the UCC, what is the correct term for a person who transfers the right to possession and use of goods under a lease?

Lessor

An accountant's failure to fulfill the explicit and implicit promises in an engagement letter can subject the accountant to

Liability to breach of contract

The terms that would allow a court to determine what the damages would be in the event that one of the parties breaches the contract, are the ____ terms of a contract

Material

Which term describes when a party unjustifiably fails to substantially perform his or her obligations under the contract?

Material Breach

The obligation to use reasonable efforts to minimize damage resulting from a breach is referred as the duty to ______ one's damages.

Mitigate

Under which of the following does the court determine the percentage of fault of the defendant requiring that the defendant be more than 50% at fault before the plaintiff can recover?

Modified comparative negligence.

Peter brings a baseball bat to hit Mary because he is mad at her. When he arrives, Mary is sleeping. He lines up the baseball bat with her head and whispers that he is about to take a swing. She does not wake up, and before he hits her, he changes his mind and quietly leaves before Mary realized he has arrived. Mary later finds out and sues for assault. Is she successful?

No, because she was sleeping and thus not in fear of apprehension of an immediate offensive bodily contact

Tonya runs a bakery and she wants tot attract new customer. She publishes an ad in a community newspaper indicating that the first 200 people who come in on Monday the 24th of August can buy a muffin for just $1 if they arrive between 9:00Am and 4:00pm and bring in a dollar bill. Is Tonya's ad an offer?

No, it is an offer to make an offer

Which of the following is a plea in which the defendant does not admit guilt but agrees not to contest the charges?

Nolo Contendere

COntract law is said to be based on an ________ theory., meaning that the existence and interpretation of the contract is based on the outward manifestations of intent by the parties

Objective

Both parties to a contract are __________, contractual parties who agree to do something for the other party, and __________, contractual parties who agree to receive something from the other party. Multiple

Obligors; obligees

Lucas is planning to buy a house owned by Janet. He gives her an initial amount of $10,000 to hold the offer open for a 45-day period. Janet will deduct the $10,000 from the purchase price if Lucas purchases the property within those 45 days. If he does not, Janet can keep the $10,000 and offer the house to another party. Which of the following contracts does this scenario best illustrate?

Option contract

under the "Ultramares rule," an accountant will be held liable for negligence only to those with whom he or she had ________ meaning the client and anyone for whose ________ benefit the accounting statements were prepared

Privity of contract; primary

Which of the following defenses identifies that the harm was caused by the plaintiff's failure to properly use the product rather than by the defendant's negligence?

Product misuse.

If an offer provides certain ways of acceptance but does not require a specific way of acceptance, use of a different means of acceptance

Results in a contract only after the acceptance is received by the offeror

During the swine-flu outbreak, the oral comments of a journalist on the products of Bacon Cult, a fast food chain, caused many people to doubt and boycott its products. This caused a significant reduction in sales and the firm sued the journalist. What tort has been committed in the above scenario?

Slander of quality.

When a person orally makes defamatory statements related to the ownership of a business property, it results in ______.

Slander of title

Anthony is a trained exterminator who received yearly instruction regarding precautions that should be taken in relation to the use of pesticides. After being told that he suffered allergies and other ailments based on exposure to the pesticides, Anthony sued the manufacturers of the pesticides at issue based on a failure to warn theory. The defendants' best argument based on Anthony's prior training is the ______ defense.

Sophisticated-user

Anthony is a trained exterminator who received yearly instruction regarding precautions that should be taken in relation to the use of pesticides. After being told that he suffered allergies and other ailments based on exposure to the pesticides, Anthony sued the manufactures of the pesticides at issue based on a failure to warn theory. the defendants' argument based on Anthony's prior training is the ________ defense.

Sophisticated-user

When courts rely on precedent, they are obeying the principle of _______.

Stare Decisis

Which of the following is true regarding proof of design defect?

States are not in agreement concerning what proof is required to establish a design defect

_________ liability applies to actions that, regardless of the care taken, are specifically prohibited, such as selling cigarettes or alcohol to a minor

Strict

When the defendant acts in an inherently dangerous activity which cannot be undertaken safely, the defendant commits a(n)

Strict-liability tort

A future event that terminates the obligations of the parties to a contract is a condition

Subsequent

Which of the following is an example of an actionable subsidy?

Subsidies paid to encourage firms to use domestic rather than imported inputs.

Which of the following refers to the basic fairness of laws that may deprive an individual of her life, liberty, or property?

Substantive Due Process

Which of the following refers to the basic fairness of laws that may deprive an individual of her life, liberty, or property?

Substantive due process

Bill owns a corporation situated on a large plot of land at the edge of a historical national park. The government recently appropriated the corporation's land to improve to build a community center that the public has been requesting for a long time. Under what clause is Bill owed just compensation?

Taking Clause

Which of the following are defenses to an action for libel brought by a public figure in the United Kingdom regarding a statement made in the united Kingdom?

That the statements were true, that the statements were made in Parliament, or that the statements were made in court

Which of the following is an example of a major independent federal administrative agency?

The Consumer Product Safety Commission.

In United States v. Lopez, the U.S. Supreme Court addressed the constitutionality of the Gun-Free School Zone Act. What did the Court rule?

The Court ruled that Congress exceeded its commerce clause authority when it passed the act.

Which amendment to the US Constitution protects citizens from "unreasonable searches and seizures"?

The Fourth Amendment

Which of the following holds that a person may be deemed not guilty by reason of insanity, even if he or she knew that a criminal act was wrong, as long as the defendant was driven to commit the crime from some urge resulting from a mental deficiency the defendant could not resist?

The irresistible impulse test.

Which of the following is the phrase used to explain why an offeror has the right to revoke an offer before acceptance?

The offeror is the "master of his offer"

Which of the following is true of whistle-blowers?

They are protected from their employers under the False Claims Act

Why do start-up companies often have difficulty obtaining product liability insurance?

They often cannot meet the standards set by insurance companies

When two parties enter into a contract with the intended end purpose of benefiting a third party, a[n] ______ is created.

Third-party beneficiary

How can a plaintiff prove that a defect exists in a product?

Through the introduction of expert testimony and/or circumstantial evidence.

Product liability law is based primarily on ________.

Tort law

What are the three categories of intentional torts?

Torts against persons, torts against property, and torts against economic interest.

Business law consists of the enforceable rules of conduct that govern commercial relationships.

True

If a quasi-contract is imposed, the amount of damages for a breach is based upon the fair market value of any service provided to the defendant.

True

A contract or contract provision is said to be ______ if it is so unfair that a court would be unreasonable if it enforced the contract.

Unconscionable

Which of the following statements accurately brings out the difference between bilateral and unilateral contracts?

Unilateral contracts call for actions, not promises, whereas bilateral contracts involve promises in exchange for promises.

All contracts can be categorized as either ___________ or __________.

Unilateral; bilateral

Legislative acts passed by the US Congress can be found in the _______.

United States Code

__________ is defined by the UCC as any practice that members of an industry expect to be part of their dealings.

Usage of trade

____________ is defined by the UCC as any practice that members of an industry expect to be part of their dealings.

Usage of trade

Which of the following is not an example of a situation where a duty of care exists.

When you walk by a stranger who is drowning in a lake in your neighborhood.

In a(n) __________, the parties agree that one party will perform his or her duty differently from the performance specified in the original agreement; after the new duty is performed, the party's duty under the original contract becomes discharged.

accord and satisfaction

An agency relationship

can be created only for a lawful purpose.

As per Section 1-205(1) of the Uniform Commercial Code (UCC), _____ is best described as previous commercial transactions between the same parties to a contract.

course of dealing

The edges of all molded plastic chairs manufactured by Luxura Furniture Inc. are extremely sharp causing deep cuts on customers' hands and legs. This is an example of a

design defect.

Under the Private Securities Litigation Reform Act, if an accountant believes that he or she has discovered fraud and fails to report it, this silence is

enough to constitute aiding and abetting.

The __________ rule holds that all evidence obtained in violation of the constitutional rights spelled out in the Fourth, Fifth, and Sixth Amendments to the U.S. Constitution is normally not admissible at trial. Such evidence is considered "fruit of the poisonous tree" because it is the result of an illegal procedure.

exclusionary

An affirmative representation about a product that becomes part of the "basis of the bargain" is an

express warranty.

An expressed agency is the most common type of agency but it does not give the agent the authority to contract on behalf of the principal.

false

Criminal law lays out the rights and responsibilities implied in relationships between persons.

false

In the absence of a time condition in either offer, an offer by a retailer to purchase seasonal goods from a wholesaler would lapse later than an offer to purchase goods that could easily be sold all year long.

false

Jurisdiction over a person is known as in rem jurisdiction.

false

Strict product liability focuses on the actions of the manufacturer or seller, not the product.

false

When an assignor assigns two (2) or more parties the same right and confusion arises as to which party has the right to the contract, most states use the __________ rule, which gives the contractual right to the first party granted the assignment.

first-assignment-in-time

Uniform Commercial Code (UCC) Section 2-105 defines __________ as "all (tangible) things...which are movable at the time of identification to the contract for sale."

goods

To prove that a contract is implied, or implied-in-fact, it is necessary for a plaintiff to establish that a defendant

had an opportunity to reject the property or service received but did not.

A customs union

has member states who charge a common external tariff on products originating outside the union.

When a counteroffer is made by an offeree, the original offer

is terminated

Under the UCC, a remedy that is identified before a breach occurs is ________________ damages.

liquidated

A(n) ____________ occurs when a party unjustifiably fails to substantially perform his or their obligations under the contract.

material breach

To bring a successful case based on __________, the plaintiff must demonstrate that the defendant knew or should have known that without a warning, the product would be dangerous in its ordinary use (or in any reasonably foreseeable use) yet the defendant still failed to provide a warning.

negligent failure to warn

A bond used as bail in a criminal case is an example of a

recognizance.

The U.S. Constitution allocates the power of the federal government among _____ branches of the government.

three

An accountant who commits fraud is liable to those parties he or she reasonably should have foreseen would be injured through a justifiable reliance upon the fraudulent information.

true

Case law interpretations are law, unless they are revoked later by new statutory law.

true

In determining whether a party is an incidental or intended beneficiary, one factor courts consider is whether the contract directly states that the third party is the benefiting party.

true

Proving that consent occurred is a defense to battery.

true

Which of the following is considered an absolute defense for a person accused of defamation?

truth.

Suppose Jared purchases a life insurance policy. Life insurance policies do not vest until the promisee's death. Jared originally made his wife Carla the intended beneficiary, but now that they are divorced, he wishes to make his daughter Haley the beneficiary instead. Can Jared change the beneficiary?

yes, because Carla's right were not vested yet