BUS 206 Exam 3

19th century English courts referenced ______ when resolving contract disputes. a. Lex Mercatoria b. Res juidicata c. Semper fi d. The English Constitution e. France's laws on contracts

A

A contract is formed only when an offer is accepted: a. By the offeree b. By the offeror c. By the rules of the UCC d. By the promisor e. None of the other choices

A

A good is tangible if it: a. Can be seen and touched b. Can be seen, but not necessarily touched c. Can be found in more that one state d. Is a service that anyone can perform without special training e. Is inexpensive

A

A transfer of contract rights to another party is: a. Assignment b. Reenlistment c. Delgation d. Termination e. Reassignment

A

A transfer of contractual duties to a third party is a(n): a. Delegation b. Assignment c. Reassignment d. Termination e. Enlistment

A

An effective revocation: a. Must be communicated to the oferee before acceptance b. Must be communicated to the oferee after acceptance c. Need not be communicated to the offeree before acceptance d. Must be filed through a court e. Must be initiated by the commerce

A

An item is moveable if: a. It can be carried from one location to another b. It can be cannot be moved c. It is a service that can be performed anywhere d. It can be easily reproduced e. It can be sought in any state

A

An option contract requires the offeror to: a. Keep an offer open for a specified period of time b. Offer more than one option c. Keep an offer under a certain price d. Limit an offer to a certain number f offerees e. Give a least a day's notice before withdrawing the offer

A

Army enlistment contracts and marriage contracts are examples of: a. Contracts that minors may not disaffirm b. Contracts that minors can always disaffirm c. Contracts that anyone can disaffirm d. Contracts that minors may enter into e. None of the other choices are correct

A

Contract law governs te enforceability of: a. The legal relationships that consists of the rights and duties of the agreeing parties growing out of a promise B. Noncontractual promises C. Nonbinding promises involving third parties d. Binding and nonbinding promises e. The legal relationships that consits of the rights and duties of the agreeing parties growing out of the court orders

A

Contracts where one party, being in a position of strengths takes advantage of the other party, and which are held to be unenforceable, are called: a. Unconscionable contracts b. Contracts in restraint of trade c. Exculpatory agreements d. Contracts with public servants e. None of the other choices

A

If a good has been stolen and is then sold to a unsuspecting buyer: a. The good title does not pass to the buyer b. The good title passes to the buyer as long as he is unaware the good is stolen c. The buyer must pay the rightful owner of the good d. The buyer is liable for damages to the good and may have to serve jail time e. The good title passes to the buyer whether or not he knows the good was stolen

A

Information that is not known by the competition and would cause a business to lose its advantage if the compeition obatained it and is protected from disclosure by the owner is: a. Trade secret b. Copyright c. Easment d. Bargaining chip e. Patent

A

Lex mercatoria refers to: a. Medieval European rules governing trade issues b. Ancient Greek rules governing trade issues c. Modern Japanese law governing trade issues d. The supreme Court's views on trade issues e. Medieval European rules governing land rental

A

Marks become generic when: a. The holders of marks give up protecting them b. The supreme court issue an order c. 5 years have passed since the mark was registered d. The holders of the mark make over $1 million in profit e. None of the other choices are correct

A

Nguyen promised to paint Carara's house for $2000 in the next month. When he got behind in his work, he asked if she would hire someone else instead, and Carara agreed. This is: a. Rescission b. Novation c. Accord and satisfaction d. Discharge by operation of law e. Equitable remedy

A

Termination of the offer can occur through the action of the parties or by the operation of law. The parties can terminate the offer by: a. Revocation b. Rejection c. Counteroffer d. Revocation or rejection only e. All of the other choices

A

The registration process of trademarks is provided by: a. The Lanham Act b. The Carver Act c. The trademark Act d. The intellectual Property Act e. The Second Amendment

A

To make an offer, the offeror must; a. Have the intent to be bound to the contract, and that intent must be clearly expressed or manifested b. Have the intent to be bound to the contract, but need not express or manifest that intent c. Have filed a copy of the offer woth the county court house d. Have written documentation of the intent e. Have known the offeree for at least 1 year

A

Under UCC Article 2, a sale must involve the transfer of _______ to the goods involved in the sale. a. Title b. Will c. Deed d. Bill of sale e. Easement

A

Under UCC Article 2, terms regarding payment, delivery and price are: a. Not necessarily necessary for the formation of a contract b. Required for the formation of a contract c. Not allowed in a formal contract d. Not allowed in a "causal contract" e. Necessary only when one of the parties is a minor

A

What allows exclusive control over original written works, musical compositions, art and photography; including control over production, display and derived works: a. Copyrights b. Patents c. Trademarks d. Trade names e. Servitudes

A

When both parties agree that their contractual relationship should be terminated without performance and their obligations are discharged, this is: a. Rescission b. Novation c. Accord and satisfaction d. Discharge by operation of law e. Equitable remedy

A

"Apple" (computers) is a real world applied to non-related product. It is what kind of mark? a. Suggestive b. Aribitrary and fanciful c. Generic d. Descriptive e. None of the other choices

B

Adidas is a famous trademark. If another company sold shoes called adidas that would be: a. Cybersquatting b. Infringement c. Conversion d. Defamation e. None of the other choices; there is no legal problem

B

An accord is an agreement by the parties to offer and accent some performance different from that originally bargained for. The actual performance of the new obligation is: a. Accord b. Satisfaction c. Completion d. Finalization e. Termination

B

As long as the owner continues to use and protect the trademark, the trademark's exclusive use: a. Can last up to 5 years b. Can be perpetual c. Can be used by others in non-profit endeavors d. Can last up to, but not more than 25 years. e. None of the other choices are correct

B

Contract law is primarily: a. Federal statutory law b. State common law c. Federal common law d. State statutes e. International code law

B

Contracts created by those with partial capacity are: a. Not voidable b. Voidable c. Exrcutory d. Exemplary e. Illegal

B

If you register trademark under the Lanham Act, the registration is good for: a. 5 years b. 10 years c. 17 years d. 20 years e. 50 plus the life of the creator

B

Prohibiting the introduction of oral evidence when it contradicts the terms of a written contract is an example of: a. The right to dissafirm b. The parol evidence rule c. Promissory estoppel d. A legal detriment e. None of the other choices

B

Ready Construction buys a computer system from Ace that Ace will also service. Two years after the sale, a disagreement develops. Ace has determined that the common law of contracts favors it. Article 2 favors Ready. Ace should: a. Realize that the agreement is for the sale of goods so it must be covered by Article 2, so work to settle on the best terms possible b. Try to show that the value of service dominates c. Establish the contract as one of the sale of tangible goods d. Define itself as a merchant under Article 2 of the UCC e. None of the other choices

B

Suppose parties to a contract that is under the UCC fail to specify some term. The UCC: a. Provides appropiate remedies for the breach created by that failure b. Has rules to fill the gap about a silent term c. Supplies all necessary terms to complete any commercial contract d. Requires the terms to be completed before it recognizes a valid contract e. Provides a special master to arbitrate all open terms

B

The subject matter of a sales contract is not considered a good under Article 2 unless: a. It is real and visible b. It is moveable and tangible c. It is ephemeral and tangible d. It is diaphanous and moveable e. It is moveable and tangible

B

Trademarks classified as ___________ are most favored because they are inherently distinctive: a. Descriptive b. Aribitrary and fanciful c. Suggestive d. Generic e. None of the other choices

B

Under some circunstances, courts do not require consideration for a promise to be enforced. The doctrine used by the courts to bind a promisor is called detrimental reliance or: a. Restitution b.Promissory estoppel c. Revocation d. All of the other choices e. None of the other choices

B

Under the UCC, a merchant is not one who: a. Uses an agent who holds herself out as having special knowledge about the goods sold b. Has a internet site that links to sellers of multiple goods c. Regularly deals in goods of the kind involved in transactions d. Presents himself as having skill specialized in the transactions e. All of the other choices are included in the definition of a merchant

B

When a party to a contract does not perform as required, there is: a. A failure to perform b.A breach of contract c. A breach of trust d. A failure of contract e. A resciding of the contract

B

Which is not a form of intellectual property? a. Trademarks b. Buildings c. Copyrights d. Trade secrets e. Patents

B

Which of the following is a contract most liekly to fall under UCC Article 2: a. IBM sells an office building in Atlanta to Microsoft b. GM buys seat belts from Ace to install in new Cadillacs c. Nock hires CompuW to service its computers for a year so they are kept in good condition d. Disney buys the copyright on a book to make it into a movie e. None of the other choices

B

You pay $200 for the right to be the only buyer a seller will deal with for 10 days for a piece of property that is for sale for $250,000. This is: a. Called a terminable contract b. Called an option contract c. Called a revocable contract d. Not a contract because the consideration is not relevaant to the value of the property e. None of the other choices

B

______ of the Uniform Commercial Code governs the law of commercial sales. a. Article 1 b. Article 2 c. Article 3 d. Article 4 e. Article 5

B

A buyer and seller have been doing business for months without a formal contract. Every Monday, the seller delivers supplies to the buyer's business. Every Thursday, the buyer pays the invoice by mail. Is there a contract between the parties? a. In jurisdictions where the offer-acceptance rule is rigidly applied there is a contract under both the UCC and the common law of contracts b. In jurisdictions where the offer- acceptance ruled is rigidly applied there is no contract under either the UCC or the common law of contracts c. Under the UCC, a contract has been formed by the conduct of the parties d. Under the UCC, there is no contract formed because the delivery of supplies is a service, not a good e. Under the UCC there is no contract, but there is a quasi-contract under the common law

C

A patent is good for: a. 14 years from date granted b. 17 years from date granted c. 20 years from time of application d. Lifetime of the inventor plus 21 years e. 100 years

C

An offeror can _____ an offer by withdrawing it. a. Finish b. Complete c. Terminate d. Finalize e. Validate

C

Early sales law was governed by state law. This created a significant legal challenge for managers because: a. Article 2 of the UCC was unclear b. It forced managers to write sales agreements with many terms left open c. Different rules developed across the states d. It required a new sales agreement each time a new order was placed e. None of the other choices

C

For Amy's sixteenth birthday her parents give her money, she can make a down payment on a car she wants. She enters into a contract with a car dealer to make payments. This is a : a. Valid contract b. Void contract c. Voidable contract d. Unenforceable contract e. None of the other choices

C

If an employee of a company writes something for hire the term of copyright protection for the work is: a. 25 years b. 50 years c. 95 years d. The life of the author plus 20 years e. The life of the author plus 75 years

C

In common law, an offer that has unclear major terms, or is missing important terms: a. Can be the basis for a implicit, but not express, contract b. Can be the basis for an express, but not implicit, contract c. Cannot be the basis for a contract d. Makes the offeror liable if not executed properly e. Makes the offeree liable if not executed properly

C

In the case of ______, a person enters into a contract because they are dominated by another person, or have so much trust in that person that they are subject to improper persuasion. a. Duress b. Misrepresentation c. Undue influence d. Dominance e. None of the other choices are correct

C

Nike does not sell televisions, but suppose some company began to market televisions called Nike. That would be: a. Cybersquatting b. Slander of title c. Dilution d. Trespass e. None of the other choices; there is no legal problem

C

One advantage of a patent is that: a. The owner has exclusive rights to its use for the length of his life b. It never expires c. It provides strong legal protection for its life d. The owner may not be sued for 15 years e. It is automatically registered worldwide

C

Specific damages to be paid in case of breach, that the parties agree to in the contract in advance of a breach are called ______ damages a. Compensatory b. Expectancy c. Liquidated d. Nomial e. Punitive

C

The UCC's purpose is: a. To give each state a unique set of trade laws b. To mediate international business disputes c.. To simplify, clarify and modernize the law governing commercial transactions d. To reduce taxes e. To make it easier to prospect parties who breach contracts

C

The Uniform Commercial Code (UCC) was designed to: a. Prevent copyright violations b. Increase the number of innovations patented by U.S. inventors c. Promote uniformity of the laws relating to commercial sales of goods d. Promote inter-state trade e. Promote intra-state trade

C

The formula for Coca-Cola is: a. Patented b. Copyrighted c. Trade secret d. Trade dress e. None of these

C

The law provides protection to intellectual property owners through which legal action? a. Malicious prosecution b. Assault c. Infringment d. Slander e. Infliction of emotional distress

C

The legal relationship that consists of the rights and duties of the agreeing parties growing out of promise is: a. Easment b. Addendum c. Contract d. Copyright e. Patent

C

The legally binding agreement that is the essence of a contract is reached through a process of: a. Offer and rejection b. Offer and bargaining c. Offer and acceptance d. Acceptance and offer e. Offer and compliance

C

Twenty years after you take this class you are successful and wealthy. Knowing that this class was the key to your success, you look up your old professor and send a letter saying "Because you helped me so much, I am going to send you a check for $100,000." Later you come to your senses and do not send the check. Your old professor sues you for the money: a. You have to pay; there is a valid contract b. You do not have to pay; the professor did not send a timely letter of acceptance c. You do not have to pay; there is a lack of consideration d. You do not have to pay; promissary estoppel applies e. You do not have to pay; you were legally insane

C

Under the common law, a contract cannot be formed until an offer is clearly accepted. Under UCC Article 2: a. A contract "must be notarized" and must "show sufficient agreement" between the parties b. A contract "may be made only in the presence of a judical official" c. A contract "may be made in any manner sifficent to show agreement" between the parties d. A contract is not formed until an offer is clearly accepted e. None of the other choices are correct

C

When parties agree to discharge one party from a contract and create a new contract with another party who is to become responsible for the discharged party's performance, this is: a. Accord and satisfaction b. Specific performance c. Innovation d. Equitable remedy e. Equitable performance

C

Which of the following is an example of a successful descriptive trademark? a. Nike b. Coca-Cola c. Holiday Inn d. Chicken in the Sea e. Lysol

C

Which of the follwoing is a legal protection associated with registering a trademark: a. State payment of court fees associated with suing for infringment. b. Legal assistance by trademark office in case of challenge to mark. c. Forming the basis for obtaining registration in other nations. d. All of the other specific choices are correct. e. None of the specific choices are correct

C

Without consideration: a. Only the oferee can enforce the promise or agreement b. Only the oferor can enforce the promise or agreement c. Neither party can enforce the promise or agreement d. Both parties can enforce the promise or agreement e. Only a court can enforce the promise or agreement

C

You watch as a crew (in good faith) comes to your house and pave your driveway. Do you have to pay the bill when it is sent to you? a. No, you didn't have a valid contract b. No, the crew breached the contract c. Yes, under the theories of quantum meruit and squashi-contract d. Yes, but only because it involved real property e. Yes, you had a valid contract enforeceable under law.

C

infringement is: a. Using legally obtained intellectual property for criminal activity. b. Wrongful use of intellectual property with the owner's permission. c. Wrongful unauthorized use of intellectual property in violation of the owner's rights. d. Wrongful authorized use of intellectual property in violation of the owner's rights. e. None of the other choices are correct

C

A seller or buyer is considered a merchant by the UCC when he: a. Regularly deals in goods of he kind involved in the transaction b. By occupation presents himself as having knowledge or skill specialized to the transaction c. Employs an agent or broker who holds himself out as having requiste knowledge or skill d. Any of the other specific choices e. Non of the other choices

D

A trademark examiner reviews trademark requests to make sure: a. The mark does not conflict with existing marks b. The mark is not descriptive c. The mark does not claim too much coverage d. All othe other specific choices are correct e. None of the other specific choices are correct

D

An effective offer includes which of the following: a. A clear intent by the offeror to become contractually bound b. Clear and certain basic terms and conditions of the offer c. Proper communication of the offer d. All of the other specific choices are correct e. None of the other specific choices are correct

D

An example of a generic trademark is: a. Clorox b. Dairy Queen c. Bufferin d. Thermos e. None of the other choices

D

An offer is: a. Asuggestion of a price for a good or service b. A legally binding price for a good or service c. An unofficial suggestion of a promise d. A promise to do something or to refrain from doing some specific thing e. A refusal to promise to do something or to refrain from doing some specific thing

D

Article 2A of the UCC, recently adopted by states expands the UCC to cover: a. Sale of investment securities b. Sales of service contracts c. Sale of real estate d. Leases of personal property e. None of the other choices

D

Bart was supposed to deliver 100,000 firecrackers to Lisa by June 1, but his factory explodes in April so he suspends operations. The contract: a. Has suffered a novation b. Has incurred a rescission c. Has incurred the failure of a condition precedent d. Has been terminated by impossibility e. None of the other choices

D

In Latin American Music vs Media Power Garoup, where radio station owner Media was sued by Latin for copyright infringment for playing music without a license, the appeals court held that: a. Media's infringments were "innocent" so it did not have to pay any damages. b. Media's infringments were "innocent" so it hasd to pay only $200 per download. c. Media's infringments were "knowing" so it would pay $750 per download d. Media did not infringe because Latin could not provide proof of copyright ownership. e. None of the other choices are correct

D

Profits you reasonably would have earned had the other party to a contract not breached are called: a. Nomial damages b. Profitable damages c. Liquidated damages d. Expectancy damages e. Punitive damages

D

Smith, who lives in your apartment building, drives you crazy. You agree to give Ratzo $5000 if he gets rid of Smith for you. After disposing of her, Ratzo returns for his money. You refuse to pay. Ratzo sues you; the court holds the contract is: a. Enforceable and completed; you must pay what is owed b. Enforeceable, but $5000 is an unconscionable price, so it revises the contract c. Unforceable because it involves a public servant d. Unforceable because it involves an illegal agreement e. Enforceable because evidence proved Ms. Smith was driving everyone crazy

D

Some contracts must be in writing and signed to be enforeceable. Contracts that are covered by the statute of frauds include: a. Contracts for the sale of land b. Promises to pay the debt of another c. Contracts that make more than a year to perform d. All of the specific choices are included e. None of the other choices

D

The basic elements of a contract include agreement, lawful subject matter, legal capacity, consent, and: a. Offer b. Remedies c. Performance d. Consideration e. Acceptance

D

The below image is an example of which type of mar, used in commerce to certify regional or other geographic origin? a. Trade dress b. Property mark c. Real mark d. Certification mark e. None of the other choices are correct

D

The owner of a lost dog posts notices that she will pay $200 for its return. Someone who does not know about the reward finds the dog and returns it. The owner. a. Must pay the reward due to public policy considerations that encourage the completion of such contracts b. Must pay the reward because the uniliteral contract was completed c. Must pay the reward becauce there was an intent to make a valid offer and to be bound by that offer d. Does not have to pay the reward because the offer was communicated to the person who found the dog e. Does not have to pay the reward because there was no meeting of the minds

D

The reputation of a firm that gives value to trademark and other such forms of intellectual property combined with the trust of many customers is known as: a. Trad secrets b. Copyright c. Good copy d. Goodwill e. Good relations

D

The title represents the: a. Age of a thing b. Bill of sale of a thing c. Legal value of a thing d. Legal rights to ownership of a thing e. Price of a thing

D

Twenty years after you leave college you are rich and famous. Your college calls on you for a $10 million gift to renivate a classroom building and name the building in your hbonor. You tell them you will be glad to give the gift because you learned so much and that is why you are successful. A year later the building is renovated and the college asks for the money. You decide to spend it on a new jet and tell the college to get stuffed. You: a. Do not have to pay the money, promises of gifts do not create contracts b. Do not have to pay the money; unless your promise was in writing and for a specific date c. Have to pay an amount equal to how much has been spent on the renovation work to date, not the full amount d. Have to pay the money under the rule of promissory estoppel e. Have to pay the money under the rule of unliquidated debt

D

Which of the following is not a category of trademarks a. Gneric b. Suggestive c. Descritpive d. Arbitrary and fanciful e. All of the other choices are categories of marks

D

___________ occurs when another person who, at any time after the owner's mark has become famous, commences use of a mark or trade name in commerce that is likely to cause dilution by bluring or dilution by tarnishment of the famous mark, regardless of the presence or absence of actual or likely confusion, of competition, or of actual economic injury. a. Infringement b. Dilution c. Battery d. Counterfeiting e. Patent violation

D

An effective acceptance must be: a. Unconditional b. Unequivocal c. Properly communicated d. A and C e. A, B and C

E

Anne says, "I'll sell you my car for $2,500." Steve says, "I sure would like to buy it." We have an offer and acceptance: a. And a valid contract b. But not a valid contract until delivery time is established c. But no valid contract because the car is only worth $500, which is insufficient consideration d. But no valid contract because no witness exist e. None of the other choices; there is no acceptance

E

Basic elements of a contract must include: a. Legal capacity b. Agreement c. Consideration d. Genuine consent e. All of the other choices

E

In contract law, an agreement means there is a mutual unerstanding between the parties as to the substance of the contract. This agreement between one parties is legally reached through: a. Negotiation and deliberation b. Communication of conditions c. Revocation or rejection d. Rejection and counteroffer e. Offer and acceptance

E

Pursuant to the UCC's definition of a "good", which of the following options would fail to meet that definition? a. Bicycle b. Stock c. Land d. A and B e. B and C

E

Termination of an offer by operation of law does not occur: a. If a law is passed making the subject of the offer illegal b. By death or insanity of the offeror c. If the subject matter of the offer is destroyed d. By physical incapacity of the offeree e. All of the other choices are correct and termination occurs

E

The Copyright Act allows fair use of copyrighted material in which of the following: a. To produce a news report about the material b. To criticize the material c. To use the material in a research report d. a and c e. a, b and c

E

The law of copyright gives copyright owner all the following rights except the right: a. To reproduce the work b. To perform the work in public c. To display the work d. To publish the work e. All of the other choices are protected rights

E

The term of copyright protection is: a. 10 years b. 17 years c. The life of the author d. The life of the author plus 21 years e. The life of the author plus 70 years

E

Which is not a trademark class: a. Descriptive b. Aribtrary and fanciful c. Suggestive d. Generic e. Distinctive

E

Which of the following categories of people have the right to walk away from a contract they made to buy a new house? a. An insane person b. A minor c. A heavily intoxicated person d. None of these conditions are elevant e. All of those conditions can be relevant to contractual capacity

E

Which of the following is a drawback to patents: a. The application process is technical b. The application process is expensive c. The application process is time-consuming d. The approval process usually takes about two years e. All of the other specific choices are correct

E

Which of the following is an example of intangible property: a. Trademarks b. Copyrights c. Patents d. Trade secrets e. All of the other specific choices are correct

E

______ is something of value or something bargained for in exchange for a promise. a. An asset b. Realization c. Compensation d. A bargaining chip e. None of the other choices are correct

E

Negotiable instruments under the UCC do not include: a. Notes b. Certificates c. Cash d. Promissory notes e. All of the other choices are negotiable instruments subjecct to UCC

C

A "draft drawn on a bank and payable on demand" is a : a. Check b. Note c. Certificate of deposit d. Deposit slip e. Promissory note

A

A seller's right to cure an improper tender of goods protects sellers from: a. Buyers rejecting shipments based on minor problems when the price of the good is falling b. Buyers demanding larger shipments c. Buyers failing to pay in a timely manner d. Buyers suing for breach of contract e. Buyers defaulting on loans

A

A(n) _______ is one in which a seller agrees to provide all of the certain good that a buyer needs. a. Requirements contract b. Real contract c. Output contract d. Total sales contract e. Complete supply contract

A

An "acknowledgment by a bank" that it has received money from a customer with a promise by the bank that will repay the money received at a date specified or, in some instances, on demand is a: a. Certificate of deposit b. Certificate of payment c. Balloon certificate d. Real estate certificate e. Draft certificate

A

An advantage of a well-planned Chapter 11 bankruptcy, compared to liquidation, includes: a. fewer legal fees b. less success restructuring the bankrupt party c. many expert witness dilemmas d. lesser payments to secured creditors e. none of the other choices

A

Billy wants to borrow $10,000 to start a male belly dancing business. Creditors are not anxious to lend him the funds. Billy convinces Gary to back-up the credit he gets from a bank. On the loan, Billy is: a. The principal b. The grantor c. The sorrier d. The surety e. The guarantor

A

Debt collection usually begin with: a. A letter stating that the account is a past due b. A personal visit by a debt collector c. An angry phone call d. A court summons e. An official visit by a debt collection agency

A

Don borrows $90,000 to buy a home. His mortgage is with Western Bank. Don is unable to make his mortgage payments. Western forecloses on Don's house and sells it in a judical sale. The bank gets $95,000 for the house. In this case, it: a. Must return the extra %5,000 to Don b. Keeps the etxra money to reinburse it for its expenses c. Must pay the secretary of state for the expenses the office has incurred d. Obtain a mechanic's lien against Don e. Seize Don's personal property to satisfy its claims

A

Filing for bankruptcy under Chapter 7 of the bankruptcy code results in _________ of debts. a. liquidation b. reorganization c. reduction d. reclaiming e. negating

A

If a contract for a sale of goods does not specify where goods are to be delivered the UCC presumes that in most cases: a. Delivery is at the seller's place of business b. Delivery to the buyer's place of business c. Delivery is to the closest railroad or trucking station d. Delivery is to a common carrier e. Delivery is to the buyer's agent

A

If a country has adopted the United Nations' Convention on the Recognition and Enforcement of Foreign Arbitrable Awards then: a. Its court are bound to recognize and enforce arbitration decsions that have followed proper procedure b. Its courts are not bound to recognize and enforce arbitration decisions that have followedproper procedure c. Its courrts are unlikely to recognize and enforce arbitration decisions d. Its court will charge a nomial fee to hear cases e. Damage awards from cases tried in its court cannot exceed $10,000

A

In In re Darby Darby had filed for Chapter 13 bankruptcy. The cable company refused to provide him service despite his promise of future payments. The appeals court held that: a. cable service is not a necessity so Time Warner is exempt from the bankruptcy code b. cable service is a necessity so Time Warner had to provide it under the bankruptcy code c. cable service is not a necessity, but Time Warner still had a duty to provide it since Darby had properly declared bankruptcy d. cable service is a necessity, but is not covered by the bankruptcy code e. cable service is an example of long-term, secured debt and Time Warner was wrong to deny it to Darby

A

In may states, a mortgagor has the right to freedom the property by paying the debt within: a. The statutory redemption period b. A "reasonable" period c. Three months of the default d. A month the property being resold e. The real estate redemption period

A

In the event of a breach by the seller for shipping improper goods, and assuming the buyer correctly rejected the delivery of the goods, the buyer's incidental damages may include: a. The reasonable costs of inspecting, transporting, and caring for goods while in buyer's possession b. The value of lost sales c. Distress suffered by personnel due to having to work with nonconforming products d. All of the specific choices e. None of the specific choices

A

Miller needs to paint his metal workshop. He tells the paint store what he needs and says he is concerned about peeling. The seller recommends Pitts, which the company advertises as good for such use. If Miller says Pitts based on the recommendation, and it peels right away, with respect to fitness for a particular purpose, there is: a. Breach of implied warranty; Miller relied on the marker's judgment and claims b. No breach of implied warranty; sellers are not obligated to supply high qaulity goods c. No breach of implied warranty; the maker did not have reason to know of Miller's particular use for the paint d. No breach of implied warranty; there were not written warranty terms e. None of the other choices

A

Negotiable instruments are: a. A substitute for cash b. Generally also gift certificates c. Make business deals more difficult d. Are part of federal regulatory controls e. None of the other choices

A

Northwest is micro-brewry. It orders bottles from M that must have crests inscribed on the bottle. To be sure the bottle meet specifications, Northwest hires someone to check them as they were produced at M. With respect to the expenses of hiring the inspector: a. Northwest pays the expenses but may recover them if the bottle do not conform b. Northwest must pay the expenses under any circunstances c. M mjst pay the expences because the bottle are a unique item d. M must pay the expenses since Northwest is not liable for any expencses until the bottles e. None of the ohter choices

A

The ____ agrees to make the payment, such as bank making a payment based on a document presented to it. a. Drawee b. Drawer c. Payee d. Checker e. Benficiary

A

The most common lien on real property is: a. A mechanic's lien b. An artisan's lien c. A integrated lien d. A second mortgage lien e. A possessory lien

A

The most commonly used form of draft is a : a. Check b. Note c. Certificate of deposit d. Deposit slip e. Promissory slip

A

The one who receives payment from a negotiable instrument is called: a. The payee b. The checker c. The drawer d. The drawee e. Noen of the other choices

A

The seller's basic obligation under the UCC does not include: a. Financing the purchase of conforming goods b. Transferring confronting goods c. Delivering conforming goods d. None of the specific choices are required unless specifically bargained for e. All of the other specific choices are required

A

The surplus that the creditors hope to capture by allowing the business to remain in operation so that they have a greater chance of full repayment is called: a. going concern surplus b. final concern surplus c. bankruptcy surplus d. potential concern surplus e. real surplus

A

To create legally valid security interests, a business must ensure that the interest is: a. Perfected b. Debated c. United d. Detached e. Exposed

A

Under the UCC, parol evidence may not be used: a. "if the court finds the writing to have been intended also as a complete and exclusive statement of the terms of the agreement" b. "if the court does not find the writing to have been intended also as a complete and exclusive statement of the terms of the agreement" c. "if the court cannot find the writing to have been intended also as a complete and exclusive statement of the terms of the agreement" d. if both parties do not agree e. If there is an unwritten contract between the parties

A

Unlike the UCC, the CISG governs: a. Only commercial sales or sales between merchants b. Only sales to the consuming public c. Only sales of intangible goods d. Only sales involving goods worth more than $10,000 e. Only sales involving electronics

A

When filing for personal bankruptcy, a person is more likely to file for Chapter 13 rather than Chapter 7 if the debtor's income is: a. higher than the state average income b. lower than the state average income c. not related to the choice of kind of bankruptcy chosen d. expected to decline in future years e. none of the other choices

A

When in contracts conflict, it is called: a. The "battle of the forms" b. The "conflict of the forms" c. The "fight of the forms" d. The "tangle of the forms" e. The "amalgamation of the forms"

A

When the party that furnished material, labor, or services for the constructions or repair of a building or other real property places a lien on the property for unpaid bils it is called a(n): a. Mechanic's lien b. Artisan's lien c. Real lien d. Due process lien e. Possessory lien

A

______ is a valid and sufficient offer of performance under a contract. a. Tender b. Sale c. Completion d. Delivery e. Termination

A

A cerditor is one who lends money to, or allows goods or services to be purchased on credit by, another party, the: a. Payee b. Debtor c. Debtee d. Financer e. Recipient

B

A commercial instrument where one party has a legal obligation to pay another party a certain sum of money and involves a maker and a payee only is called: a. A check b. A note c. A debit d. A draft e. A certificate of deposit

B

A secured creditor is one who: a. Is insured by a third party b. Can take a debtor's property to try to satisfy the debt c. Does not use security to obtain a loan d. Does not use collateral to obtain a loan e. Is insured by the FSLIC

B

A(n) _____________ is a court-ordered seizure of goods from the customer to prevent the customer from disposing of it during the lawsuit. a. holding lien b. attachment lien c. final lien d. nonnegotiable lien e. merchant's lien

B

According the UCC's statute of frauds all: a. Contracts involving the sale of land must be in writing b. Sales of goods worth more than $500 must be in writing c. Warranties must be in writing d. Material terms must be included in written contracts e. All of the other choices

B

Alimony and child support payments, back taxes and most student loans are all examples of: a. debt that is extinguished by bankruptcy b. debt that is not extinguished by bankruptcy c. debt that is extinguished by bankruptcy in most states d. debt that is noted on a credit report for 10 years e. none of the other choices are correct

B

Because the UCC's warranty requirements create a tough standard, sellers may wish to reduce their liability by issuing: a. Limits of liability b. Disclaimers c. Disclosures d. Denunciations e. Revocations of liability

B

Capacity refers to: a. A company's ability to extend credit to a customer b. The debtor's ability to pay c. The debtor's financial condition d. The debtor's reputation e. The debtor's assets to secure debt

B

Cashier's checks are frequently used in transactions where: a. The buyer is trustworthy b. The seller demands guaranteed payment c. The seller is overpaying for the goods d. The seller and buyer know each other well e. The buyer does not have enough money to buy the good

B

Filing for bankruptcy under Chapter 13 of the bankruptcy code results in ________ of debts. a. liquidation b. reorganization c. reduction d. reclaiming e. negating

B

If a creditor is successful in a legal action against a debtor, the court will award the creditor: a. a revisionary lien b. a judgment lien c. a detachment lien d. a lien pendant e. none of these

B

If a repossessed product is sold for more than what is owed by the debtor: a. The seller is not obligated to return the differences b. The seller is obligated to return the difference c. The debtor and seller must split the difference d. The seller must give the debtor at least 50% of the difference e. None of the other choices are correct

B

The CISG applies to conttracts for commercial sale of goods made by parties who have that have ratified the CISG. a. Citizenship b. Places of business c. Significant relations d. All of the other specific choices are correct e. None of the other specific choices are correct

B

The UCC's remedies for breaches of contract for the sale of goods are intended to: a. Place the breaching party on the same position as if the contract had been performed according to its terms b. Place the nonbreaching party in the same position as if the contract had been performed according to its terms c. Place both parties in the same position as if the contract had been performed according to its terms d. Improve the position of the nonbreaching party beyond what it would have been if the contract had been performed according to its terms e. Degrade the position of the breaching party

B

The framers of the Constitution specifically made bankruptcy a matter of: a. state law b. federal law c. common law d. arbitrary law e. tort law

B

The seller's basic obligation under the UCC is to: a. Ensure the buyer does not lose money b. Transfer and deliver goods that conform to the ontract to the buyer c. Represent the goods properly d. Refrain from swindling unsuspecting buyers e. Arrange all elements of the transactions and deal with any problems that arise

B

The trustee in bankruptcy: a. takes possession of and liquidates the debtor's exempt property upon the debtor's declaration of bankruptcy b. administers the debtor's estate c. attempts to improve the status of the general creditors d. takes possession of and liquidates the debtor's exempt property upon the debtor's declaration of bankruptcy and administers the debtor's estate e. takes possession of and liquidates the debtor's exempt property upon the debtor's declaration of bankruptcy and administers the debtor's estate and attempts to improve the status of general creditors

B

Under the imposter rule, who is in the best position to prevent the loss? a. The imposter b. The maker c. The bank d. The creditor e. Nobody

B

When a business lends another business money, it hould perfect its security interest by: a. Applying to the IRS for security b. Filing its financing statement with the proper official c. Preparing its inventory for satisfaction d. Obtaining a late-term gurantor e. None of the other choices

B

Which of the following is NOT true, under the UCC Article 2, about a merchant's firm offer: a. Requires a signed writing by the offeror that the offer will remain open for a given period b. It must be open to all members of the public c. Stays open for a time not to exceed 3 months, if no other period of time is stated in the offer d. Does not require consoderation to be irrevocable e. Is irrevocable if stated in writing that it remains open for a given time

B

A(n) ____ is a note promising to repay borrowed money, probably with interest. a. Negotiable instrument b. Negotiable note c. Promissory note d. Lending note e. Borrowing note

C

An endorsement consisting only of the endorser's signature is called a: a. Special Endorsement b. Restrictive Endoresement c. Blank Endorsement d. Imposter Endorsement e. Conversion Endorsement

C

Capital refers to: a. A company's ability to extend credit to a customer b. The debtor's assets to secure debt c. The debtor's financial condition d. The debtor's reputation e. None of the other choices are correct

C

Chapter 11 bankruptcies, which are filed by businesses: a. force the sale of all business assets b. wipe the slate clean of debts for a business and allow it to continue operating c. allow a business to keep operating under reorganization of its activities and its debts d. prohibits the firm from starting any new operations, and it must wind up all old business e. none of the other choices

C

If the buyer relies on the seller's skill or judgment to select the goods for that purpose, an implied warranty ______ is created. a. No implied warranty is created in this situation b. That the goods are not suited for that purpose c. That the goods are suited for that purpose d. That the goods will last for at least a year e. That the goods will be reasonably priced

C

In Summers Group v. Tempe Mechanical, Summers (Rexel) sold electrical materials used in a construction project that went into bankruptcy. Litigation developed over where various claimants stood to collect. The appeals court held that: a. Summers had to pay all attorney fees related to the litigation as it filed its lien last b. Summers was the only lien holder to file properly, so stood first in line to collect c. Summers would be treated equally with all other lien holders d. Summers was the last lien holder to file, so stood last in line of the lien holders, but stood in line to collect before unsecured creditors e. None of the other answers are correct

C

In a(n) _____ the debtor makes a minimum monthly payment and more debt can be added to the account over time. a. Collections account b. Installment account c. Revolving account d. Open account e. Security account

C

In order to establish a superior right, a creditor must: a. Prohibit a default b. Insure the debt instrument c. Perfect the security interest d. Keep the existence of the security interest a secret e. Do none of these things

C

The one who issues or creates the dicument that requires payment, probably from a bank, is called: a. The payee b. The beneficiary c. The drawer d. The drawee e. None of the other choices

C

To be found a holder in due course, a transferee must: a. Be in ossession of an instrument in the form of either a draft or check (but not a note) made out "to bearer" b. Have agreed in writing not to be bound as a contractual assignee c. Have given value for the negotiable instrument, taken it without knowledge of any defects and in good faith d. Provided a signed unconditional writing, promising (or ordering to pay), at a specified time in the future and made out "to order" or "to bearer" e. All of the other choices are required to be a holder in due course

C

To raise needed capital, small companies most often rely on: a. Currency exchanges b. Commodities markets c. Debt financing d. Equity financing e. Derivative financing

C

Under Article 3 of the UCC, a note is: a. An uncoditional written order to pay that involves three parties: drawer, drawee, payee; the drawee may be bank, person, or business; payment may be set at some future time. b. An uncoditional written order to pay that involves three parties: drawer, drawee, and payee; the drawee must be bank; payment must be "or demand" c. A promise by one party to pay a certain sum of money to another party; two parties are involved: the maker and the payee; payment must be seen at a date in the future d. An acknowledgment by a bank that it received money from a customer with a promise from the bank that it will repay the money received either at a specified date or upon demand; two parties are involved: a maker and a payee e. None of the other choices

C

Under a Chapter 13 proceeding, debts must be repaid usually: a. within one year b. within three years c. within five years d. as soon "as practically possible" e. none of the other choices; all debts are liquidated

C

Under the UCC, thge seller's basic obligation includes being concerned with: a. What the goods are used for after they leave the seller's possession b. The future financial solvency of the buyer c. The place of delivery d. All of the other specific choices are correct e. None of the other specific choices are correct

C

Under the UCC, to avoid the problem of constantly issuing new financing contracts every time a business buy's more inventory from a supplier, the parties may use: a. A priority interest b. A tangible property lien c. A floating lien d. A perfected lien e. None of the other choices

C

Warranty of title includes the warrant that: a. The goods being sold can be sold overseas without any tariff penalties b. The goods being sold are markable c. The goods being sold are free of any claim of infringement d. The goods being sold might be copyrighted e. The goods being sold are capable of being copyrighted

C

When a seller fails to deliver goods, either by being too late to be useful or because the goods are nonconforming, the buyer is entitled: a. To nothing b. To a compensatory payment of $1000 c. To buy substitute goods and recover the price difference d. To require the seller to find deliver new goods e. To sue for breach of confidentiality

C

When real estate itself is used to secure a debt obligation it is eveidenced by a: a. Certificate of real estate b. Draft c. Mortgage d. Credit report e. Lien

C

Which of the following is one of the UCC's requirements for an instrument to be negotiable: a. It must be oral b. It must state a certain sum of money c. It need not be payable on demand or at a specified time d. None of the other specific choices are correct e. All of the other specific choices are correct

C

_____ means that the good "must be of a quality comparable to that generally acceptable in that line or trade" a. Warrantable b. Profitable c. Merchantable d. Marketable e. Acceptable

C

______ are foreseable damages that result from a seller's breach a. Incidental damages b. Total damages c. Consequential damages d. Inconsequential damages e. Punitive damages

C

A business that extends credit to buyers should establish: a. Credit policies b. Income debit policies c. Collection policies d. Credit and collection policies e. Credit, collection, and income debit policies

D

A disclaimer of an implied warranty is permitted if the disclaimer uses the word merchantability and the disclaimer: a. Specifies the alternatives b. Includes a mail-in form c. Does not attempt to dishclaim safety issues d. Is conspicuous e. None of the other choices; such disclaimers are not allowed

D

Before a person may file for bankruptcy the person must: a. notify all creditors of the intent b. notify all secured creditors of intent c. exhaust all sources of income on debts d. go to credit counseling e. none of the other choices

D

Billy wants to borrow $10,000 to start a male belly dancing business. Creditors are not anxious to lend him the funds. Billy convinces Gary to back-up his credit. Gary is: a. The principal b. The grantor c. The testator d. The surety e. The detainor

D

Credit and debt collection policies focuses on the following characteristics: a. Capacity, character, collateral, closure, and conditions b. Capacity, character, capital, comfort, and change c. Collateral, capacity, climate change, and closure d. Capacity, capital, character, collateral, and conditions e. Climate, closure, conditions, comfort, and character

D

If a buyer rejects a shipment of goods as not confronting, the seller has the write to cure the defect, except for which of the following: a. The seller repairs or replaces the defective goods within the time for perofmance b. The seller notifies the buyer in a timely manner of the intent to cure the defect c. The time for performance has not passed d. The seller is due a "reasonable time" for repair or performance past the original due date e. All of the other choices are part of the seller's rights to cure

D

If an instrument is made _____, the party in possession is required only to deliver the instrument to transfer it. a. "To transferee" b. "To holder" c. "To possessor" d. "To bearer" e. "To recipient"

D

If goods do not conform to the standards created by the warranty: a. The seller cannot be held liable for damages for breach of warranty b. The seller can be held liable for damages for breach of warranty c. The seller can be held liable for breach of quality d. The seller can be held liable for failure to maintain qaulity e. The seller can be held liable for failure of warranty

D

Incidental damages awarded to a seller after a buyer's breach of contract can include compensation for which of the following: a. Stopping delivery b. Transporting and taking care of the goods after the breach c. Returning or reselling the goods d. All of the other specific choices are correct e. None of the other specific choices are correct

D

The (higher) price paid by a buyer for substitute goods in the event of a breach by a seller is called: a. Consequential damages b. Incindential damages c. Expectancy damages d. Cover e. None of the other choices

D

The UCC modifies the common law perfect tender rule by: a. Allowing the seller to delivery half the agreed upon shipment b. Not allowing the buyer to sure the seller c. Not allowing the buyer to accept less than the entire shipment d. Allowing the buyer to accept less than the entire shipment e. Allowing the buyer to sue the seller

D

The final stage of bankruptcy is known as: a. disruption in bankruptcy b. removal in bankruptcy c. distancing of the debtor d. discharge in bankruptcy e. divorce from the proceedings

D

The one who agreed to make a oayment, such as bank making a payment based on a document presented to it is: a. The payee b. The beneficiary c. The drawer d. The drawee e. None of the other choices

D

The primary objective of the trustee is: a. to deplete the debtor's estate b. to protect general creditors first c. to ensure that the debtor's exempt property is liquidated d. to maximize the amount of the debtor's assets available for distribution to creditors e. to maximize the amount of the debtor's assets that the trustee is paid

D

To transfer an instrument made "to the order" of the payee, the payee must: a. Endorse the instrument b. deliver the instrument to a third party c. Destroy the orgignal instrument d. Both a and b are necessary e. None of the other specific choices are necessary

D

Under a floating lien: a. Specific collateral only is used b. When collateral is sold the lien expires c. New inventory is unavailable to replace old collateral d. New inventory is used to replace collateral that is sold e. Real estate is the collateral used

D

Under the UCC a buyer who recieves good that are nonconforming: a. May reject them and withhold payment b. May cancel the contract and recover from the seller any repayments c. Must notify the seller of a rejection in a timely manner to allow the seller to either cure the non-conformities or reclaim the goods d. All of the other specific choices e. None of the other choices

D

Under the UCC, oral testimony: a. May contradict written documents b. May never be used c. May be used if the goods are not worth more than $10,000 d. May be used to explain trade dealings e. May be used only if both parties agree

D

Voluntary Chapter 13 bankruptcies: a. apply to corporations only b. apply to businesses with debt of more than $1 million c. permit business to reorganize while paying debt d. apply to individuals only e. apply only to corporations with debts of more than $1 million

D

When a debtor petitions the court for Chapter 7 bankruptcy, which of the following items need not be provided? a. a list of all creditors with amounts owed them b. a list of all property owned by the debtor c. a statement of the financial affairs of the debtor d. a list of planned future expenditures e. all of the other choices must be provided

D

When realestate is used as collateral to secure the loan, the note is a: a. Balloon note b. Fixed note c. Property note d. Mortgage note e. Landed note

D

Which of the following are necessary for a security interst to attach: a. The security agreement must be signed by the customer b. The seller must have provided value c. The customer must have legal, transferable rights in the collateral d. All of the other specifc choices are correct e. None of the other specific choices are correct

D

Which of the following requirements is necessary to be a holder in due course: a. The transferee must give value for the tangible instruments b. The transferee must take the instrument without knowledge that it is overdue or defective c. The transferee must take the instrument in good faith d. All of the other specific choices are necessary e. None of the other specific choices are correct

D

With respect to the buyer's basic obligations under Article 2, the most critical element is: a. The appropiate manner and timeliness of delivery b. The place of tender from the seller c. The quality of tender d. Accept conforming goods and pay for them according to the contract e. None of the other choices

D

A mortgage usually contains: a. A description of the property b. Any warranties relative to the property c. A statement of the debt d. A statement of the mortgagor's duties concerning taxes, insurance, and repairs e. All of the other specific choices are correct

E

A mortgage: a. Is a debt obligation (lien) attached to real property b. Gives the mortgage holder the right to sell the property in case of default c. Gives the principal the right to sell the property in case of default d. Is a debt obligation (lien) attached to real property that gives the mortgagor the right to sell the property in case of default e. Is a debt obligation (lien) attached to real property and gives the mortgagee the right to sell the property in case of default

E

An express warranty may be created by all but which of the following: a. A seller's promise about goods being sold b. A seller's gurantee regarding the safety of a good c. The sample the buyer received from the seller d. The gurantee the buyer reasonably expects for the product e. Any of the other choices

E

Debt collections may be done by: a. Invoice b. Follow-up later c. Phone calls d. Personal visits e. All of the other choices

E

Debts of the bankrupt under Chapter 13: a. are all discharged b. are discharged, if they involve past taxes c. are discharged, if they involve alimony d. are discharged only in part e. are not discharged

E

If a North Carolina firm contracts to buy toys from China, and the contract does not specify which laws applies, in case of dispute, which law will apply: a. The law of the buyer (North Carolina) b. The law of the buyer's nation (federal law) c. The law of the seller nation d. The UCC e. The CISG

E

If the buyer breaches a UCC contract while the goods are still in the possession of the seller, the seller is authorized to: a. Cancel the contract b. Salvage the goods c. Stop delivery of the goods d. None of the other choices e. All of the other choices are possible

E

In the case of bankruptcy, which of the following classes of creditors have highest priority? a. federal taxes b. costs of preserving and administering the debtor's estate c. secured creditors d. rent claims e. general creditors

E

Promissory notes are instruments that involve ____ parties a. Three b. Four c. More then three d. Five e. None of the other choices are correct

E

Under the common law, there is a doctrine called the perfect tender rule. It means the seller's tender of delivery is required to conform in detail to the agreement beyween the parties. The UCC respects to conform to the contract, they buyer may: a. Reject the whole shipment b. Accept the whole shipment c. Accept any commercial unit or units and reject the rest d. Non of the other choices; in practice the UCC rule is the same as the common law rule e. The other specific choices together state the UCC's tender rule

E

When a debtor petitions the court for Chapter 7 bankruptcy, which item(s) must be provided? a. lists of all creditors with amounts owed them b. a list of all property owned by the debtor c. a statement of the financial affairs of the debtor d. a statement of the debtor's current income and expenses e. all of the other choices

E

When payment is made based on a forged endorsement, tort of ________ occurs. a. Misrepresentation b. Trespass c. Fraud d. Defamation e. Conversion

E

Which of the following is one of the UCC's requirements for an instrument to be negotiable: a. It must be written b. It must be an unconditional order or promise to pay c. It must be signed by the maker or drawer d. It must be payable on demand or at a specified time e. All of the other specific choices are correct

E

When a buyer has agreed to purchase the total output of a seller, there is a(n): a. Requirements contract b. Fulfilment contract c. Output contract d. Totality contract e. Such contracts are not allowed under the UCC

c