Business Law Final

When parties to a contract mutually agree to cancel an old contract and replace it woth a new one, which of the following is true?

To be enforceable, there must be added features in the new contract benefiting both parties

In which of the following cases will a court refuse to enforce the provision of liquated damages on a party?

When the amount of liquidated damages fixed by the contract is unreasonable

In which of the following situtations is a state most likely to enforce a usury law?

X charges a very high rate of interest on money borrowed by Y

Which of the following is an example of a contract discharged by impossibility of performance?

A new law makes the contract illegal

Which of the following types of agreements according to the Statute of Frauds need to be in writing?

An agreement containing a promise in consideration of marriage

Which of following best defines the tort of interference with a contract?

It occurs when a business relationship has formed, and in some way a third party intentionally causes one party to end the relationship

Judy promises to pay Ashley $50 to babysit her children. After Ashley babys the children, Judy pays Ashley $50; thus each party has completed performance of each part of the contract. This is an example a(n):

executed contract

Kenneth was sentenced to six years in prison for forgery. In this case Kenneth has committed a(n) _____.

felony

When one refrains or promises to refrain from doing something, this conduct is known as _____.

forbearance

A _____ contract must be in a special form ot be created in a certain way.

formal or simple?

A(n) _____ is one that the seller did not make but is imposed by the law.

implied warranty

Which of the following conditions is a prerequisite for any agreement to be legally enforceable?

the parties entering into the agreement must have the mental capacity to contract

Which of the following is true of a valid offer?

it is seriously intended

Which of the following statements is true of fraud in the execution

it occurs when a party does not intend to sign a contract, as the nature of writing is not understood

A person not party to contract but whom parties intended to benfit is known as a(n):

third-party beneficiary

A firm offer can be best defined as:

an offer that cannot revoked for a reasonable time if no time is stated

Which of the following is true of The Water Pollutant and Control Act?

It sets limits on discharges, including pollutants into sewer systems

The tort of injurious falsehood occurs when:

a person makes false statments of fact that degrade the quality of another's goods or services

The statement of the seller in which the article sold is warranted or guaranteed is known as an _____.

express warranty

Which of the following best describes a legatee?

A person receiving a gift of personal property

Who may elect to take a share of decedent's estate regardless of the terms of the will?

A surviving spouse

A person licensed to represent others in court is called a(n):

attorney

The purpose of the antitrust laws is to:

promote competition among businesses

Parol evidence refers to:

spoken words

An offer to pay money in satisfaction of a debt or claim when one has the ability to pay is a :

tender payment

To recover for a tort based on negligence, the plaintiff must show:

the breach of the tortfeaser's duty to the injured party

An donee beneficiary is best described as a person:

who is a third-party beneficiary and for whom performance is a gift

Which of the following is true of the Children's Online Privacy Protection Act (COPPA)?

It imposes certain requirements on operators of websites directed to children under the age of 13

Which of the following best describes the term "consideration"?

It indicates what the promisor demands and receives as the price for a promise.

Which is following is true of a binding contract?

It is created when an offeree accepts an offer that has been properly communicated

Which of the following statements best describes the term "assignment"?

It is the conveyance of rights in a contract to a person who is not a party

Which of the following is true of quasi-contracts?

It prevents the unjust enrichment of a party

Which of the following is true regarding parties who make mutual mistakes of law?

It will generally not invalidate a contract

Allen enters into a contract with Joe to sell his car. However by mistake, he undervalues his car. Though the actual value of his car is $6,000, he sells it to Joe for $3,000. During the purchase, Joe is aware of the actual value of the car but does not communicate this fact to Allen. Which of the following is likely to be true in such a scenario?

Joe is entitled to keep the car because the contract is valid.

A _____ is a court decision that determines the decision in a subsequent, similar case.

Precedent

_____ laws are those that state how parties are to go forward with filing civil action and how these actions are to be tried.

Procedural

Which of the following statements is true of federal district laws?

They hear all criminal cases that involve a violation of federal low

What is the chief function of the courts?

They interpret and apply the law from whatever source to a given situation

Which of the following is true of undue influence?

???

Which of the following is true of special federal courts?

??? they have jurisdiction limited by Congress

Which of the following is an example of a contract contrary to public policy?

A agrees to appoint B as sheriff, provided he helps him win local elections

What precaution can a business person take when contracting with a minor?

A business person can require an adult to join the contract as a cosigner

Which of the following statements is most likely to be true of administrative agencies?

Aministrative agencies have the power to implement laws

Which of the following is most likely to be a tort based on negligence?

Automobile accidents

The _____ consists of ten amendments to the U. S. Constitution specifically designed to protect the civil rights and liberties of citizens and the states.

Bill of Rights

Which of the following best describes the difference between civil law and criminal law?

Civil law deals with the enforcement or protection of private rights, whereas criminal law deals with offenses against society

Which of the following is true of a contract between two minors?

Each minor has the right to avoid the contract

On investigation, it was found that Ken, the bookkeeper at CL Corp., had stolen money from the company's account and recorded financial transactions inaccurately to cover up for his activities. For which of the following business crimes can Ken be prosecuted?

Embezzlement

When an assignment is made by acts of the parties, which of the following is true?

If the original contract was required be in writing, the assignment must also be in writing

Which of the following is true of the Uniform Commercial Code (UCC)?

Individual states may make changes to the portions of the UCC that they have adopted

Which of the following is true of the parol evidence rule?

It allows written contract to be modified by oral testamony if there is evidence of fraud

Maya, an elderly lady, wanted to sell her house. She offered the house to her friend Lily, a friend. However, before the house deeds were transferred, Maya passed away. Whihc of the following scenarios is legally acceptable in such a case?

Lily must consider the offer automatically revoked and void.

Sam and Martha sign a contract in which Sam agrees to pay a certain price and buy Martha's house. Later, Sam's brother states that Sam often has intervals of delusions and hence the contract is invalid because it has been made by an incompetent person. Sam has not been declared by the court as insane. In such a scenario, according to law, which of the following will entitle Martha to the price agreed upon in the contract?

Sam was in a sane frame of mind and understood the contract when he signed it.

Which of the following is true of the appeals made to higher courts?

The decision of the appellate court is binding on lower courts

WHich of the following is an advantage of a written contract over an oral one?

The existence of a contract cannot be denied if it is in writing

Which of the following is true of sale of food or drink?

The sale carries an implied warranty that the food is fit for consumption

Blake has subscribed to a local charitable association where he needs to make a monthly payment of $100. However, a few months later, Blake stops paying this amount. Which of the following exceptions to the requirement of consideration will enforce that Blake pays that amount?

Voluntary subscriptions

Which of the following is true of a warranty of merchantability?

Warranty of merchantability relates only to the fitness of the product made or sold

A(n) _____ occurs when a testator makes bequests of money in the will and the estate does not have enough money to pay all the bequests so they are paid proportionally.

abatement

Failure of a party to perform an obligation in a sales or lease contract is known as ____________.

breach of contract

An offeree's response that rejects an offer by varying its terms is known as a(n):

counteroffer

If a contract is divisible so that legal parts can be performed separately from the illegal parts, then the legal parts of contract are:

enforceable

_____ wills are written entirely in longhand by the testator.

holographic

Blake agreed to renovate Jane's house, and they drafted a written contract. However, Blake was unable to complete the renovation due to an accident. Blake's friend, Tom, agreed to complete the job, and Jane agreed to release Blake from the contract. The terms of the old contract remained the same. This process of substitution of contract is known as a(n):

novation

Ryan, a college student, intends to sell his car. He contacts his friend Luiz and inquires whether he is interested in buying the car. Luiz finds the quoted price reasonable and buys the car from Ryan. In this scenario, Ryan is the _____.

offeror

The term disaffirmation refers to:

the election to avoid a contract or set it aside

In a situation where an injured party in an accident is partly to blame for the accident, which of the following is most likely to be true under a contributory negligence system?

the injured party CANNOT recover any damages because it is PARTIALLY negligent in the case

What is the difference between an agreement and a contract?

An agreement results whenever two people's minds meet on a subject, but a contract only exists when the parties intend to be legally obligated by the terms of an agreement

Which of the following is an example of passive fraud?

An attorney fails to tell his or her client of an offer to settle a case

As a general rule, a promise must be supported by consideration, Which of the following is an exception to the rule?

An obligation of record such as a judgement.

The _____ requires creditors to notify a potential recipent of credit whenever any adverse action or denial of credit was based on a credit report.

Fair Credit Reporting Act

Which of the following statments best describes specfic performance?

It refers to the carrying out of the specific terms of a contract

Which of the following is true of state trial courts?

They handle cases that are first instituted in them

Which of the following is not a true contract and has been imposed by law in order to prevent one party from benefiting unfairly at another's expense?

a quasicontract

Regulatory agencies can use their licensing power to:

allow a business to enter the field being regulated

A force majeure clause in a contract is a contract provision that excuses performance by a party when:

an extraordinary event outside the party's control occurs

A toy's merchant's display of a doll house in a store window for $100 constitutes:

an invitation to the public to make an offer for the doll house

In a written contract, Sheldon agrees to tutor the children of Mrs. Smith for a cerain period of time. However, Sheldon, prior to starting classes, announced that he would not be able to tutor the children due to other commitments of his. In this case, there has been a(n)

anticipatory breach

The Office of Foreign Assets Control (OFAC) is responsible for:

enforcing economic sanction against individuals and entities deemed a threat to national security

Activities that are illegal regardless of their effect are known as _____.

per se violations

An agency's power to determine whether the activity of. Regulated entity is acceptable or not is an example of:

power over business practices

A contract must be for a lawful purpose, which must be achieved in a lawful manner, otherwise the contract is:

void

_____ is a means of destroying another's free will by one party obtaining consent to a contract as a result of a wrongful threat to do the other person or family members some harm

duress

A joint contract is one in which:

each obligor is bound for the performance of the entire obligation

Disgorgement of profits refers to:

the repayment of any profits received as a result of corrupt payments

Which of the following is true of contracts that limit the freedom of marriage?

An agreement not to marry during minority is valid

Mary contracts to sell Rachel her violin for $10,000 based on her appraisal of the instrument. Their contract provides that even if the appraisal is found later to be mistaken, the sale price will not be altered. One month after the sale, Rachel learns that the violin is only worth $5,000. Which of the following is true?

Because the contract specified what would happen in case of a mistake, the sale price will not be altered.

AB Developers signs a contract with CL Corp., agreeing to build a $20 million office for the corporation. The construction contract was substantially performed. There were, however, a few minor breaches of the contract by AB Developers that made CL Corp. incur damages worth $10,000. Which of the following is most likely to be true in this scenario?

CL Corp. needs to pay the full price under the contract less the damages suffered by it

Deez Nuzzers Inc., a cement manufacturer, releases hazardous chemicals into the atmosphere and also into nearby streams. The pollutants released into the atmosphere exceed acceptable levels and the company is facing a suit from the residents of nearby towns. Under which of the following acts can the company be sued?

Clean Air Act

Which of the following statements best describes a several conractt?

It is a contract where two or more people individually agree to perform an obligation

Which of the following best describes a probate?

It is a court procedure that determines the validity of a will and distrubution of estate

What is the Statute of Frauds?

It is a law requiring certain contracts to be put in writing

Which of the following statements best describes a difference between rules and laws?

Laws are rules that are enacted by the government

When a contract contains the words "time is of the essence," which of the following is true?

Performance on the exact date is deemed vital

Which of following constitutes an exception to the Statute of Frauds requirement that. contract be in writing?

The promise to pay one's own debt, rather than a promise to pay the debt or another

Which of the following is truw of Sunday contracts?

Their laws are a result of statutes

Default refers to:

a breach of any contractual obligation

When a party sues to enforce an alleged contract that falls under the Statute of Frauds, the law requires that:

there be a note in writing signed by the party against whom the claim for breach of contract is made

A contract not to compete is valid in which of the following instances?

The buyer of a businesss prohibiting the seller from engaging in the same business in a certain town

Which of the following statements is true of common law?

cases in common law are decided on the basis of precedents