Business Law Final Exam Guide 2

A subcontractor's bid: Select one: a. is considered an offer. b. is never revocable. c. can usually be withdrawn even if the general contractor has relied on it. d. is considered to be a part of a shrinkwrap agreement.

is considered an offer.

When an agreed-on result is obtained by the agent and the principal does not benefit, the agent: Select one: a. will not be paid. b. is entitled to be paid. c. must return any pay to the principal. d. may only recover the expenses incurred, not the actual compensation.

is entitled to be paid.

When compared with traditional contract law, the Uniform Commercial Code (UCC): Select one: a. reflects a less flexible attitude. b. is more likely to find that parties have a contract. c. gives more weight to technical requirements such as consideration. d. is less concerned with rewarding people's legitimate expectations.

is more likely to find that parties have a contract.

A restraint that is merely ancillary to a contract may be legal if: Select one: a. it attempts to relieve one party from liability for willful misconduct. b. its purpose is to restrict trade indefinitely. c. its purpose is to recover punitive damages. d. it is designed to protect interests created by the contract

it is designed to protect interests created by the contract

Under strict scrutiny analysis, to demonstrate that a government action is constitutional, the government must demonstrate that: Select one: a. its action bears a rational relationship to its desired end. b. it is pursuing a compelling government interest. c. it is pursuing a governmental end in the most intrusive manner. d. there is no restriction on commercial speech.

it is pursuing a compelling government interest.

Lorenzo offered Ida a job at his new law firm. In anticipation, Ida quit her job at Mega Firm, bought a new computer, and invested in a new set of law books. Shortly before her anticipated first day at Lorenzo's firm, Lorenzo informed Ida that he had changed his mind, and no longer wanted her to work for him. Ida may recover under the doctrine of _____. Select one: a. unjust enrichment b. promissory estoppel c. unilateral contract d. express contract

promissory estoppel

The equitable doctrine of _____ allows some parties to recover under oral contracts that the statute of frauds would have ordinarily rendered unenforceable. Select one: a. estoppel by representation of fact b. estoppel by record c. proprietary estoppel d. promissory estoppel

promissory estoppel

Under the tort of invasion of privacy, _____. Select one: a. some widespread dissemination of information is necessary for liability b. true, but public, facts about a person can be an invasion of privacy c. truth is a defense to "publication of private facts" d. newsworthy items or items of legitimate public interest can be the basis of a successful suit

some widespread dissemination of information is necessary for liability

When the goods covered by a contract are unique and it is not possible for a buyer to obtain substitute goods, the buyer is entitled to _____ of the contract. Select one: a. liquidated damages b. specific performance c. incidental damages d. cover

specific performance

Martha entered into a contract with Terry, an art dealer. According to the contract, Terry was to supply 18th century artifacts to Martha for the play she was directing, and Martha was ready to pay $50,000 for this. Another director needed the same artifacts and was ready to pay $60,000. Terry decided not to sell the artifacts to Martha. In this case, the court may order Terry to: Select one: a. specifically perform the contract. b. repudiate the contract. c. pay nominal damages. d. substantially perform the contract.

specifically perform the contract.

The feature of decisional law in common law systems which says that a court, in making a decision, should follow the rulings of prior cases that have similar facts is _____. Select one: a. caveat emptor b. ex post facto laws c. stare decisis d. contra proferentem

stare decisis

The means used by an offeror to communicate the offer is: Select one: a. the impliedly authorized means for accepting regardless of circumstances. b. the impliedly authorized means for accepting unless the circumstances indicate otherwise. c. the only authorized means of communication for accepting. d. always the offeror's particular trade usage in communication, as it impliedly authorizes a given means of acceptance.

the impliedly authorized means for accepting unless the circumstances indicate otherwise.

A person lacking mental capacity must return the other party to status quo when: Select one: a. the other party becomes aware of the person's lack of mental capacity. b. the person lacking mental capacity has already enjoyed the product of the agreement. c. the other party was unaware of the person's lack of mental capacity. d. the person lacking mental capacity has passed on the product of the agreement to someone else.

the other party was unaware of the person's lack of mental capacity.

According to the Uniform Commercial Code (UCC), _____. Select one: a. the sale of goods between two parties is always legal b. the doctrine of promissory estoppel will always overrule a written contract c. the sale of goods costing $500 or more is not enforceable without a writing or other specified evidence d. there is no need for the formality of writing during sales transactions

the sale of goods costing $500 or more is not enforceable without a writing or other specified evidence

In addition to demonstrating actual emotional distress, if a third party wants to recover for negligent infliction of emotional distress, the plaintiff must primarily show that: Select one: a. the defendant was negligent and that the accident could have been avoided. b. the third party is at least distantly related to the victim. c. the third party actually witnessed the injury when it occurred. d. the defendant did not try to stop the accident.

the third party actually witnessed the injury when it occurred.

A _____ is designed to reach things belonging to the debtor that are in the hands of third parties. Select one: a. writ of quo warranto b. writ of garnishment c. writ of certiorari d. writ of mandamus

writ of garnishment

_____ are agreements between a debtor and two or more creditors who agree to accept a stated percentage of their _____ claims against the debtor at or after the due date, in _____ satisfaction of their claims. Select one: a. Requisitions; unliquidated; partial b. Compositions; liquidated; full c. Extraordinary renditions; unliquidated; partial d. Routine renditions; liquidated; full

Compositions; liquidated; full

Which of the following statements is true of conscious capitalists? Select one: a. Conscious capitalists distinguish making profits from ethical behavior. b. Conscious capitalists do not fail to meet an important shareholder demand even if they fail to deliver strong financial results. c. Conscious capitalists do not have a profit motivation. d. Conscious capitalists believe that business is good because it creates economic value.

Conscious capitalists believe that business is good because it creates economic value.

Which of the following contracts can generally be assigned in all states in the U.S.? Select one: a. Assignment of future wages b. Employment contracts c. Contracts promising to deliver goods d. Contracts involving personal rights

Contracts promising to deliver goods

Under the Uniform Commercial Code (UCC), which of the following remedies is available to both buyers and sellers? Select one: a. Recovering the total value of goods in the contract b. Recovering profit from the resale of nonconforming goods by the other party c. Damages in the amount of the difference between the contract price and the market price of goods d. Obtaining specific performance of the contract

Damages in the amount of the difference between the contract price and the market price of goods

Edward owes Frank $100, payable in six months. Frank, who is leaving the country, gives his rights to the payment to Marge for $80. Which of the following is true about the scenario? Select one: a. Frank is the obligor. b. Edward owes Marge $80. c. Edward owes Marge $100. d. Frank will get $100 from Edward.

Edward owes Marge $100.

The states are prohibited from arbitrarily discriminating against persons by the _____ Clause of the _____ Amendment. Select one: a. Equal Protection; Fourteenth b. Equal Protection; Fifth c. Due Process; Fourteenth d. Due Process; Fifth

Equal Protection; Fourteenth

Which of the following is a reason for voiding a contract based on illegality? Select one: a. Both of the parties are ignorant of the facts that made the bargain illegal. b. It is in violation of the Code alone, not the common law. c. It is contrary to public policy. d. The court does not allow the recovery of damages.

It is contrary to public policy.

Which of the following statements about tangible property is true? Select one: a. It has no physical existence. b. It is subject to tax in the state in which it is located. c. It is only owned by the government or a government unit. d. It is only taxable in the state where its owner lives.

It is subject to tax in the state in which it is located.

Which of the following is true about a contract? Select one: a. It need not necessarily be an agreement. b. It need not necessarily be entered into by parties having capacity to contract. c. It must be voluntarily entered into, and it is to perform a legal act. d. It must always be supported by consideration.

It must be voluntarily entered into, and it is to perform a legal act.

The first federal regulatory agency was the _____. Select one: a. Federal Trade Commission b. Interstate Commerce Commission c. Securities and Exchange Commission d. Occupational Safety and Health Administration

Interstate Commerce Commission

Which of the following statements is true for assumption of risk? Select one: a. It is not a defense in cases based on strict liability. b. It is not a defense in cases based on reckless behavior. c. It dictates that the person assuming responsibility will have to recover for all people involved in the accident. d. It bars the plaintiff's recovery as the plaintiff fully understands the nature and extent of the risk involved.

It bars the plaintiff's recovery as the plaintiff fully understands the nature and extent of the risk involved.

Bella is Ming's babysitter. She takes Ming to the amusement park for a roller coaster ride. Due to the intensity of the ride, Ming, who has an especially weak heart, dies of a heart attack during the ride. Which of the following concepts best fits Bella's act of negligence? Select one: a. Proximate cause b. Negligence per se c. Breach of duty d. Principles of causation

Principles of causation

Which of the following is true about ratification? Select one: a. It releases the principal from liability to the third person. b. It gives the agent the same right to compensation that he or she would have had if there had been prior authorization. c. It requires the principal to have full understanding of the legal significance of all material facts. d. It is inferred by a court from the fact that the agent accepted the benefits of an unauthorized contract.

It gives the agent the same right to compensation that he or she would have had if there had been prior authorization.

Which of the following basic requirements must be met for an offer to sell goods to be a firm offer? Select one: a. It must contain assurances that it will be revocable. b. The offeror must be a merchant. c. It must have been made orally. d. The outer limit on the period of irrevocability for firm offers must be 10 months.

The offeror must be a merchant.

A promise exchanged for a promise is an example of: Select one: a. a bilateral contract. b. a unilateral contract. c. an implied contract. d. promissory estoppel.

a bilateral contract.

In the private judging method of dispute resolution, _____. Select one: a. a hired judge renders a binding opinion after hearing the evidence and arguments of the parties b. executives of the disputing companies, who have settlement authority, hear a shortened presentation of the case by the lawyers for each side c. a six-member mock jury empaneled by the court hears a shortened presentation of the case by the lawyers for each side d. executives of the disputing companies meet with lawyers for each side to negotiate a settlement

a hired judge renders a binding opinion after hearing the evidence and arguments of the parties

If the amount of a debt is "due and certain," _____. Select one: a. a promise to pay less than the amount lacks consideration b. the debt is considered to be an unliquidated one c. there is a dispute about the existence of the debt d. there is a dispute about the amount of the debt

a promise to pay less than the amount lacks consideration

A gratuitous agent is one who: Select one: a. freely substitutes his or her judgment for that of the principal. b. acts without pay. c. has no prior experience as an agent. d. is employed to find a buyer for one party and a seller for another.

acts without pay.

In a contract made by a minor, _____. Select one: a. adult parties bound to the contract cannot disaffirm the contract b. the minor does not have the right to disaffirm the contract c. his/her siblings who are also minors can disaffirm the contract on his/her behalf d. the minor can disaffirm the contract at any time, even after attaining majority

adult parties bound to the contract cannot disaffirm the contract

Composition agreements are: Select one: a. made in a way that allows the promisor to decide whether or not to perform the promise. b. agreements between a debtor and two or more creditors who agree to accept a stated percentage of their liquidated claims against the debtor at or after the due date. c. agreements entered into when someone promises not to file a legal suit in exchange for a promise to pay a certain sum of money or some other consideration. d. generally treated as non-binding on the parties to the agreement because of the fact that doing so appears to be contrary to the general rule on liquidated debts.

agreements between a debtor and two or more creditors who agree to accept a stated percentage of their liquidated claims against the debtor at or after the due date.

An acceptance is effective as soon as it is dispatched if the offeree uses: Select one: a. only an authorized means of communication. b. only a stipulated means of communication. c. an authorized or a stipulated means of communication. d. any reasonable means of communication.

an authorized or a stipulated means of communication

Laws that seek to prevent certain practices that might reduce competition and thus increase prices are called _____. Select one: a. tax laws b. consumer laws c. antitrust laws d. contract laws

antitrust laws

A certain court receives an appeal by parties dissatisfied with the decision of a trial court. However, neither does it hear any witnesses nor does it review new facts about the case. The court discussed in the example is a(n) _____. Select one: a. municipal court b. inferior court c. appellate court d. justice of peace court

appellate court

The constitutional prohibition of ex post facto laws: Select one: a. applies to statutory law. b. aims to minimize the possibility of failure if the business has to go to court to enforce its rights. c. applies to common law. d. gives lawyers a great deal of discretion in selecting an appropriate strategy for handling a legal dispute.

applies to statutory law.

Agents who are under the control of their employer or principal as to both the objective of their work and the means used to achieve it are _____. Select one: a. distributors b. independent contractors c. employees d. commercial agents

employees

A statute that allows finders of property to clear their title to the property after taking steps to see whether the true owner can be located is known as a(n) _____. Select one: a. estray statute b. statute of limitations c. statute of repose d. nonclaim statute

estray statute

A(n) _____ clause is a provision in a contract that attempts to relieve one party to the contract from liability for the consequences of his or her negligence. Select one: a. exculpatory b. indemnification c. arbitration d. severability

exculpatory

When a lawyer agrees to represent a client, the lawyer agrees to: Select one: a. the reality that he will be liable for malpractice if he loses the case. b. exercise the skill, prudence, and diligence expected of lawyers of ordinary skill and competence in the community. c. the probability that a court will likely second-guess the legal strategy he chooses to use in representing his client. d. the reality that the courts are likely to second-guess his professional judgment.

exercise the skill, prudence, and diligence expected of lawyers of ordinary skill and competence in the community.

If the U.S. Congress enacts a federal statute regulating the sale of automatic weapons and Kentucky passes a state law that conflicts with the federal law, Kentucky's law is said to be: Select one: a. impliedly preempted. b. void-for-vagueness. c. expressly preempted. d. prevailing.

expressly preempted.

The Sarbanes-Oxley Act: Select one: a. broadly defines obstruction of justice and makes obstruction of audit work papers a felony. b. decreases the penalties for conscious law breaking. c. decreases the likelihood of detection and prosecution of illegal behavior. d. adopts the theory of allocational efficiency, under which the primary objective of a business corporation is to maximize profits

broadly defines obstruction of justice and makes obstruction of audit work papers a felony.

The plaintiff's burden of proof in a tort case is proof _____. Select one: a. by a preponderance of the evidence b. beyond reasonable doubt c. beyond a shadow of a doubt d. by the compelling weight of the evidence

by a preponderance of the evidence

Once a party has waived rights to a portion of a contract that has not yet been performed, that party may retract the waiver: Select one: a. if there is a material change of position by the other party. b. unconditionally. c. by giving reasonable notice that strict performance will be required. d. only if the other party does not object to it.

by giving reasonable notice that strict performance will be required.

Once a donee or creditor beneficiary has accepted a contract, the original parties: Select one: a. can cancel the contract if the original contract gives them the right to do so. b. can cancel the contract without the third party's consent. c. can modify the contract without the third party's consent. d. can cancel only monetary contracts.

can cancel the contract if the original contract gives them the right to do so.

Under the Uniform Commercial Code, minors who disaffirm their contracts involving goods: Select one: a. can reclaim the goods from third parties. b. can no longer reclaim those goods from innocent third parties. c. have to return consideration even if the goods have been consumed. d. have to return consideration even if the goods have been stolen from them.

can no longer reclaim those goods from innocent third parties.

Assignees: Select one: a. are not entitled to the rights to a promisor's performance. b. are not required to notify the promisor of the assignment. c. can sue a promisor for nonperformance. d. can acquire greater rights than an assignor.

can sue a promisor for nonperformance.

An American university professor derives a new formula which explains a fundamental principle of nature. In the United States, this formula: Select one: a. can be patented. b. cannot be patented. c. can be patented because it is novel. d. cannot be patented because it is not useful.

cannot be patented.

Most agency rules spring from: Select one: a. customary law. b. common law. c. statutory law. d. regulatory law.

common law.

Contracts that are traditionally required to be in writing by the statute of frauds are: Select one: a. bilateral contracts that are capable of being performed within a year of their formation. b. contracts for the transfer of an interest in land. c. bilateral contracts that have been fully performed by both parties. d. contracts for the sale of goods costing less than $500.

contracts for the transfer of an interest in land.

A new claim stating that plaintiff owes defendant damages because of harm resulting from the incident alleged in the complaint is called a(n) _____. Select one: a. counterclaim b. affirmative defense c. cross-claim d. dissenting opinion

counterclaim

Common law arises when: Select one: a. courts are called upon to resolve disputes for which there is no statute or other source of law establishing a rule. b. constitutional statutes are found to interfere with the freedom of expression. c. there are statutes and other sources of law establishing a particular rule and the courts decide to improvise this existing statutory law. d. the government wishes to encourage certain kinds of investments.

courts are called upon to resolve disputes for which there is no statute or other source of law establishing a rule.

If a promisor's performance will satisfy a legal duty that the promisee owes a third party, the third party is a(n) _____. Select one: a. donee beneficiary. b. incidental beneficiary. c. creditor beneficiary. d. implied beneficiary.

creditor beneficiary.

In the case of a taking, just compensation includes the: Select one: a. fair market value of the property plus its sentimental value. b. current fair market value plus any expected future value from the taking. c. current fair market value of the property involved in the taking. d. fair market value of the property if it were to be sold to a developer.

current fair market value of the property involved in the taking.

Salim files a case against Nina for nonpayment of dues. Before the trial, Nina is examined under oath in the presence of Salim's attorney. This process of examination is known as a(n) _____. Select one: a. deposition b. interrogatory c. pretrial conference d. default judgment

deposition

Privilege is NOT a common defense to _____. Select one: a. false imprisonment b. trespass to land c. interference with contract d. disparagement

disparagement

Which of the following statements is true about patent infringement in the U.S.? Select one: a. The court holds only the infringer accountable for the unlawful activities and accomplices are not considered liable under the U.S. infringement law. b. There is no effect on the importation of foreign goods that infringe upon U.S. patent rights. c. A patent holder is entitled to monetary damages in case of infringements. d. The court grants an automatic injunction in cases of infringement.

A patent holder is entitled to monetary damages in case of infringements.

With regard to rejection of an offer, which of the following statements is correct? Select one: a. An offer is not terminated when it is rejected by the offeree. b. A rejection must be actually received by the offeree to be effective. c. A counteroffer constitutes an express rejection of an offer. d. The offeree's statement that he will not accept the offer is an implied rejection of the offer.

A rejection must be actually received by the offeree to be effective

With regard to rejection of an offer, which of the following statements is correct? Select one: a. An offer is not terminated when it is rejected by the offeree. b. A rejection must be actually received by the offeree to be effective. c. A counteroffer constitutes an express rejection of an offer. d. The offeree's statement that he will not accept the offer is an implied rejection of the offer.

A rejection must be actually received by the offeree to be effective.

In addition to statements made to an attorney, the attorney-client privilege covers: Select one: a. information divulged to an attorney's subordinates, such as secretaries or paralegals. b. statements made in the presence of people other than the lawyer or the lawyer's subordinates. c. statements made to a law-enforcement officer. d. statements made only after the attorney is actually retained by a client.

information divulged to an attorney's subordinates, such as secretaries or paralegals.

In the United States, the copyright period for works for hire: Select one: a. is 110 years from the first publication or 140 years from creation, whichever comes first. b. lasts for the life of the author plus 70 years. c. is 95 years from the first publication or 120 years from creation, whichever comes first. d. lasts for the life of the author plus 120 years.

is 95 years from the first publication or 120 years from creation, whichever comes first

In the United States, the copyright period for works for hire: Select one: a. is 110 years from the first publication or 140 years from creation, whichever comes first. b. lasts for the life of the author plus 70 years. c. is 95 years from the first publication or 120 years from creation, whichever comes first. d. lasts for the life of the author plus 120 years.

is 95 years from the first publication or 120 years from creation, whichever comes first.

Adam offered to buy automobile batteries from Ben. Adam's purchase order was complete with respect to all material terms except price, which was omitted. If Ben accepts Adam's offer, and the price of automobile batteries is well established in the industry, which of the following statements is true? Select one: a. A contract cannot be formed between Adam and Ben if the price is not included. b. A contract can be formed between Adam and Ben only if it can be proved that the parties intended to enter a contract to discuss the price. c. A contract can be formed between Adam and Ben, but the price will be treated as a proposed addition to the contract which must be accepted by both parties. d. A contract can be formed between Adam and Ben even though the price term was omitted.

A contract can be formed between Adam and Ben even though the price term was omitted.

Which of the following statements is true of the idea of public policy? Select one: a. A court's view of public policy is determined by what the court believes is in the best interests of society. b. Public policy is not affected by any social or economic change. c. Courts have limited discretion in ruling on questions of public policy. d. The discretion of courts provide the legal system less flexibility that ensures a strict adherence to policies.

A court's view of public policy is determined by what the court believes is in the best interests of society.

Which of the following statements is true of consequential damages? Select one: a. Liability for consequential damages cannot be excluded by an agreement between the parties. b. A limitation on the liability for consequential damages cannot be enforced if it is unconscionable. c. Consequential damages do not involve the recovery of damages caused by consumer goods. d. Exclusion of or limitation on consequential damages is permitted where the loss is not commercial.

A limitation on the liability for consequential damages cannot be enforced if it is unconscionable

Which of the following statements is true about a minitrial? Select one: a. A minitrial involves a six-member mock jury empaneled by the court that hears a shortened presentation of the case by the lawyers for each side and renders an advisory verdict. b. A minitrial often involves a neutral third-party advisor who will render a nonbinding opinion, if a settlement is not reached, regarding how a dispute is likely to be resolved if it goes to trial. c. A minitrial is conducted under court guidance. d. A minitrial differs from mediation in that the third-party to whom the dispute is submitted decides the outcome.

A minitrial often involves a neutral third-party advisor who will render a nonbinding opinion, if a settlement is not reached, regarding how a dispute is likely to be resolved if it goes to trial.

Which of the following statements is true about discharge by alteration? Select one: a. When a parties' agreement is represented by a written instrument, a material, intentional alteration of the instrument by one of the parties does not discharge the other party. b. When a party does not consent to an alteration or objects to it after learning of it, he or she is not discharged. c. Alterations by third parties without the knowledge or consent of either contracting party do not affect the parties' rights. d. Discharge by alteration involves statutorily establishing reasonable time within which a lawsuit must be brought.

Alterations by third parties without the knowledge or consent of either contracting party do not affect the parties' rights

Which of the following is true of discharge of contracts? Select one: a. Both parties to a contract are discharged when they have completely performed their contractual duties. b. A contract created by mutual agreement between two parties cannot be discharged by mutual agreement. c. A party who has breached a contractual duty may be discharged from liability for breach if the other party brings suit within the statute of limitations. d. If a party consents to an alteration, he or she is discharged.

Both parties to a contract are discharged when they have completely performed their contractual duties.

Advertisements are regulated outside of contract law by the: Select one: a. Uniform Commercial Code (UCC). b. Restatement. c. Federal Trade Commission. d. United Nations Convention on Contracts for the International Sale of Goods (CISG).

Federal Trade Commission.

Beck Inc., a food processing company in Chicago, placed a phone order with Gary, a vineyard owner in California, for a certain quantity of perishable products. The shipping term was "CIF" with payment to be made on delivery. Gary contracted with a carrier to deliver the goods to Beck Inc. However, he neglected to ship the goods under refrigeration. The goods were loaded on a non-refrigerated boxcar and as a result the product was spoiled when it reached Chicago. Under these circumstances, _____. Select one: a. neither Gary nor Beck Inc. bears the risk of loss as the goods are insured b. Beck Inc. bears the risk of loss because, under a CIF shipment, the buyer has to bear all risks c. Beck Inc. bears the risk of loss as the contract did not mention that Gary will guarantee their delivery d. Gary bears the risk of loss because, under a CIF shipment, the seller bears the expense and the risk of loading the goods

Gary bears the risk of loss because, under a CIF shipment, the seller bears the expense and the risk of loading the goods

Which of the following is true about the exception to the parol evidence rule? Select one: a. A party can always introduce proof of an oral agreement made before the writing was created. b. Oral testimony that attempts to show that the contract is illegal is not allowed. c. A party is allowed to use oral terms to alter, vary, or contradict the written terms of the contract. d. If the terms of the writing are unclear, oral testimony can be introduced to aid the court in interpreting the writing.

If the terms of the writing are unclear, oral testimony can be introduced to aid the court in interpreting the writing.

Jamal purchased a motorcycle from Getaway Automobiles, and the motorcycle's electric starter began malfunctioning after a week of the motorcycle's purchase. Jamal returned the motorcycle to the store, and the manager assured him that it was only a minor problem that could be fixed easily. In the next two months, Jamal visited the store five times for rectification of the same issue. Finally, he gave up and demanded that he get a cash back for the faulty motorcycle. Under these circumstances, which of the following is most likely to be true? Select one: a. Jamal is not entitled to revoke acceptance of the goods because he has used it. b. Jamal is entitled to revoke acceptance because he took back the motorcycle after the seller's assurance that the nonconformity would be cured. c. Jamal cannot revoke his acceptance because the value of the motorcycle is impaired by its use for over two months. d. Jamal can revoke his acceptance but is not entitled to damages for breach of warranty.

Jamal is entitled to revoke acceptance because he took back the motorcycle after the seller's assurance that the nonconformity would be cured.

Dr. Reilly is a neurosurgeon. He does an interview in a talk show about his occupation and his field. Dr. Reilly goes on to say how Phil Donrey, a famous natural healer who helps people through his Ayurvedic methods, is bogus and how there is no science or logic behind it. For which of the following reasons can Phil Donrey sue Dr. Reilly? Select one: a. Libel b. Invasion of privacy c. Conversion d. False imprisonment

Libel

Susan wanted to give a diamond pendant to Lucy, her daughter. Susan entered into a contract with Andrew, a dealer who specializes in diamond jewelry. Susan had promised to pay him if he delivered the pendant to Lucy. Andrew withdrew from the contract and Lucy wanted to sue him. Which of the following statements is true in this scenario? Select one: a. Lucy can sue Andrew as she is a creditor beneficiary of the contract. b. Lucy can sue Andrew as she is a donee beneficiary of the contract. c. Lucy cannot sue Andrew as she is an incidental beneficiary of the contract. d. Lucy cannot sue Andrew as Susan's promise was gratuitous and therefore unenforceable.

Lucy can sue Andrew as she is a donee beneficiary of the contract.

The manager of Mack's Bar sent Olive Outlet an order for 200 cases of olives to be shipped "as soon as possible." The day Olive Outlet receives Mack's order, it ships the olives. Later that day, Mack's manager phones Olive Outlet and tries to revoke his offer. Under these circumstances: Select one: a. Mack's Bar cannot revoke because a contract was created when Outlet shipped the olives. b. Mack's Bar can revoke because the acceptance had not been received. c. Mack's Bar can revoke based on principles of promissory estoppel. d. Mack's Bar cannot revoke, since the olives will spoil if they are shipped back.

Mack's Bar cannot revoke because a contract was created when Outlet shipped the olives.

Martin works as a pizza delivery person. He parks his bike outside Regalia Inc. to deliver an order. Meanwhile, a damaged book rack in Regalia, which is situated on the first floor of the building, falls down through an open window and crashes on his bike. However, no one admits to having seen the rack fall. Can Martin recover against Regalia for negligence? Select one: a. Martin can recover only if he finds a witness who saw the book rack crashing on the bike. b. Martin can recover if he can prove that book racks do not fall out of windows in the absence of negligence and that Regalia Inc. had exclusive control of the rack prior to the fall. c. Martin will be unable to recover because parking under an open floor window amounts to contributory negligence and he is therefore liable for the accident too. d. Martin will be unable to recover because parking under an open window amounts to assumption of risk.

Martin can recover if he can prove that book racks do not fall out of windows in the absence of negligence and that Regalia Inc. had exclusive control of the rack prior to the fall.

Terry and Farah have an oral contract for the sale of 100 books at $30 per book. If Terry delivers the books and Farah accepts them, or if Farah pays for the books and Terry accepts payment, which of the following is true? Select one: a. Terry can raise the statute of frauds defense to enforce the remainder of the contract. b. Both Terry and Farah can raise the statute of frauds defense as it is a complete performance. c. Neither Terry nor Farah can raise the statute of frauds defense as the agreement has been performed at least partially. d. Farah can raise the statute of frauds defense to enforce the remainder of the contract.

Neither Terry nor Farah can raise the statute of frauds defense as the agreement has been performed at least partially.

Mack's Bar sent Olive Outlet an order for 200 cases of olives to be shipped "as soon as possible." The day Olive Outlet receives Mack's order, it does not have 200 cases of olives in stock, so it sends Mack's Bar 140 cases of olives and 60 cases of onions. Olive Outlet notifies Mack's Bar that they are shipping the onions in lieu of olives. Later that day, Mack's Bar phones Olive Outlet and tries to revoke the offer. According to the Uniform Commercial Code (UCC), which of the following statements holds true to this situation? Select one: a. Mack's Bar must accept the shipment as they were notified. b. Olive Outlet has accepted and breached the contract. c. Olive Outlet's shipment is considered a counteroffer. d. Mack's Bar must reject the shipment as the goods are nonconforming.

Olive Outlet's shipment is considered a counteroffer.

Which of the following statements is true of contract ratification? Select one: a. Minors who have lied about their age can ratify their contracts. b. A contract is voidable if it is ratified on reaching majority. c. For a person adjudicated insane, his or her personal representatives cannot ratify the contract. d. People who regain their mental capacity can ratify their contracts.

People who regain their mental capacity can ratify their contracts.

Which of the following statements is true of personal service contracts? Select one: a. Specific performance is generally granted for personal service contracts because it does not require a form of involuntary servitude. b. Personal service contracts are the only contracts that terminate with the promisor's death. c. Personal service contracts include destruction to subject matter that can result in nonperformance. d. Personal service contracts recognize commercial impracticability as an excuse when unforeseeable developments take place.

Personal service contracts are the only contracts that terminate with the promisor's death.

Fernando is the owner of Pick Food Restaurant. He makes an oral agreement with Purple Lotus Works for the design and production of 5,000 unique custom-made dinner plates with the logo of Pick Food Restaurant on them. Purple Lotus reworks its production schedule and creates dies to add Pick Food Restaurant's logo in the designer plates. A week later, Fernando calls Purple Lotus and says that he no longer wants the plates and calls off the deal. In this scenario, it is most likely that: Select one: a. the parties' agreement is at Fernando's disposal because he is the customer. b. Purple Lotus is protected by the statute of frauds exception for specially-manufactured goods. c. the parties' agreement is not valid since it was only an oral agreement. d. the agreement between Fernando and Purple Lotus is unenforceable and Fernando is protected under the statute of frauds.

Purple Lotus is protected by the statute of frauds exception for specially-manufactured goods.

Rachel saw her sister Rebecca being hit by a car. She rushed to help her and later accompanied her to the hospital. Unfortunately, several hours later her sister died. Rachel, who received psychiatric treatment as a result of the traumatic experience, sued the car driver for emotional distress. Which of the following is most likely to be true in this case? Select one: a. Rachel is not entitled to recovery because she was not in the "zone of danger" created by the negligent act. b. The courts will allow recovery for battery because Rachel is related to the victim of the accident. c. The courts will not allow recovery because Rachel suffered only emotional trauma with no visible signs of physical injury. d. Rachel will be awarded recovery because she bore witness to the accident during which her sister was killed

Rachel will be awarded recovery because she bore witness to the accident during which her sister was killed

Roy was doing repair work in Melinda's apartment. He saw a deep crack in the floor but did not repair it at the time. Later while working on the ceiling, his ladder got stuck in the crack, and he injured himself. Which of the following statements is true of damages in this case? Select one: a. Roy can impose consequential damages on Melinda. b. Roy can recover for injuries under the specific performance decree. c. Roy cannot recover for injuries that could have been easily avoided. d. Roy cannot recover damages until he gets an injunction.

Roy cannot recover for injuries that could have been easily avoided.

Rudo asked Harun to detail his brand-new sports car by painting flames on the side of the vehicle. After the parties signed a contract and after Harun had already started to paint, Rudo decided that he also wanted Harun to install a new stereo system in the car at the same cost and modified the contract likewise. Harun painted the flames on the side of the vehicle as originally agreed but did not install a new stereo. Rudo refuses to pay the originally agreed upon price. If Harun sues Rudo for the contract price, he will win because Select one: a. Rudo's modification was unenforceable for lack of consideration. b. Rudo's promise was unenforceable. c. the old contract automatically got cancelled with the addition of a new condition. d. Harun's act was not a preexisting duty and hence of no legal value.

Rudo's modification was unenforceable for lack of consideration

Which of the following statements is true of voidable title? Select one: a. Sellers may obtain voidable title by paying for goods sold on a "cash sale" basis. b. Sellers may obtain voidable title by paying for the goods with a good check. c. Sellers may obtain voidable title by impersonating another person when acquiring the goods from their rightful owner. d. Sellers may obtain voidable title by obtaining the goods without using fraudulent means.

Sellers may obtain voidable title by impersonating another person when acquiring the goods from their rightful owner.

Which of the following statements is true of voidable title? Select one: a. Sellers may obtain voidable title by paying for goods sold on a "cash sale" basis. b. Sellers may obtain voidable title by paying for the goods with a good check. c. Sellers may obtain voidable title by impersonating another person when acquiring the goods from their rightful owner. d. Sellers may obtain voidable title by obtaining the goods without using fraudulent means.

Sellers may obtain voidable title by paying for the goods with a good check.

Skyline Builders and Pine Lumber had a contract, calling for Pine Lumber to deliver a certain quantity of bricks to Skyline's place of business on the first of every month for one year. Pine delivered the bricks one week late for the first six months, but Skyline did not object. When Pine delivered the bricks one week late, as usual, in the seventh month, Skyline attempted to cancel the contract because of the late delivery. Which of the following is true about this scenario? Select one: a. Pine will have to return the delivery fee of the first six months because it broke the contract. b. Skyline does not have the legal right to modify the contract. c. Pine is not in breach because the delivery was made at the intended place of business. d. Skyline has waived its right to cancel the contract.

Skyline has waived its right to cancel the contract.

Campus Bus Service entered into a contract with Smith Bus Company to purchase 10 buses. One week before Campus Bus was scheduled to receive the buses, a fire destroyed Smith's warehouse and the buses inside. As a result, Campus Bus had to purchase its buses at a slightly higher cost from another manufacturer. Campus Bus sues Smith Bus for damages for breach of contract under these circumstances. Assume Campus Bus did not bear the risk of loss of the goods under the contract. In this scenario, _____. Select one: a. Smith Bus should be excused from performance under the clause for the rights on improper delivery b. Smith Bus should not be excused from performance because it did not act in good faith c. Smith Bus should be excused from performance under the test of commercial impracticability d. Smith Bus can exercise its right of anticipatory repudiation

Smith Bus should be excused from performance under the test of commercial impracticability

Which of the following is true about the nature of licensing? Select one: a. The person who owns the intellectual property is known as the licensee. b. Sometimes the licensee is permitted to sublicense all or part of its rights in the technology to a sublicensee. c. As a general rule, persons who buy from patent holders or their licensees are restricted by the original licensing contract. d. A customer who has bought a patented product cannot freely resell it without fear of violating the original patent.

Sometimes the licensee is permitted to sublicense all or part of its rights in the technology to a sublicensee.

Which of the following statements can be conditionally privileged in defamation suits? Select one: a. Statements by members of Congress on the floor of Congress b. Statements made in the furtherance of legitimate business interests c. Statements by participants in judicial proceedings d. Private statements between spouses

Statements made in the furtherance of legitimate business interests

Stintson Corp. had agreed to create employee identity cards for McLaughlin Inc. for $60,000. Some of the cards delivered by Stintson Corp. had damages made during the lamination process. McLaughlin Inc. promised Stintson Corp. an additional $20,000 to replace the damaged identity cards, and Stintson Corp. did so. Then McLaughlin Inc. refused to pay Stintson Corp. more than $60,000 for the work. Which of the following statements is true of this situation? Select one: a. Stintson Corp. is not entitled to any more than $60,000 for its work. b. McLaughlin Inc. owes Stintson Corp. the additional $20,000. c. Stintson Corp. would still be entitled only to $60,000 because such an act is new consideration that was provided to support the modification. d. Stintson Corp. is entitled to the additional $20,000 as legal value has nothing to do with adequacy of consideration.

Stintson Corp. is not entitled to any more than $60,000 for its work.

Which of the following is a recognized exception to the parole evidence rule? Select one: a. Clear contracts b. Complete writings c. Voluntary consent d. Subsequent oral contracts

Subsequent oral contracts

Which of the following statements is true of state action? Select one: a. The constitutional checks on governmental power do not apply to the Congress. b. Private deprivation of individual liberties is permitted only if interference of state action is prohibited by statute. c. The Constitution protects an individual only against governmental activity, usually called state action. d. State action is not involved if policies are mandated by federal law.

The Constitution protects an individual only against governmental activity, usually called state action.

Which of the following prohibits the federal government from depriving any person "of life, liberty, or property, without due process of law"? Select one: a. The Fifth Amendment Due Process Clause b. The Commerce Clause c. The Fourteenth Amendment Due Process Clause d. The Equal Protection Clause

The Fifth Amendment Due Process Clause

Which of the following statements is true about the Uniform Commercial Code (UCC)? Select one: a. The main purpose of the UCC was to enable private parties to enter into commercial transactions regulated by tariffs and government restrictions. b. The most obvious purpose of the UCC was to establish a uniform law to govern commercial transactions that often take place within the state. c. The drafters were successful in achieving complete uniformity. d. The UCC is adopted by all states except Louisiana, which has adopted only part of the code.

The UCC is adopted by all states except Louisiana, which has adopted only part of the code.

An auction house puts a painting up for sale, which they think to be Pablo Picasso's "Acrobat and Young Harlequin." A Japanese businessman purchases the painting for $50 million. The businessman appraises the painting for insurance purposes and discovers that it is a clever fake that is worth only a few thousand dollars. Which of the following statements is true of the scenario? Select one: a. The buyer cannot rescind because he was negligent; he should have investigated the authenticity of the work before bidding on it. b. The buyer can rescind on the basis of unilateral mistake. c. The buyer cannot rescind because the auction house did not intentionally mislead him about the authenticity of the painting. d. The buyer can rescind on the basis of mutual mistake.

The buyer can rescind on the basis of mutual mistake.

Which of the following is true about unilateral mistakes? Select one: a. The court does not grant rescission even if the mistaken party is slightly negligent. b. The court will grant relief even if the person's own negligence is the cause of his or her mistake. c. The plaintiff needs to promptly notify the defendant when a mistake is discovered. d. The basic rule is that it is grounds for rescission only if both parties to the agreement are acting under a mistaken belief.

The court will grant relief even if the person's own negligence is the cause of his or her mistake.

Which of the following statements about an offer is true? Select one: a. Any definite offer made by a merchant is called a "firm offer." b. An offer is effective upon dispatch. c. A grumbling acceptance is a rejection and terminates the offer. d. The death of an offeror will terminate the offer.

The death of an offeror will terminate the offer.

Which of the following is true about building and construction contracts? Select one: a. The promisee who is dissatisfied with the mechanical fitness, utility, or marketability may reject the performance without liability, even if doing so is unreasonable. b. The engineer's or architect's certificates, which are often issued at each stage of completion, indicate that the work is done to the satisfaction of the architect or engineer. c. The building and construction contracts require the builder to give the owner an engineer's certificate for satisfactory performance after the owner has paid the builder for the project. d. The courts require the promisee to accept performance that would satisfy a reasonable person for contracts involving matters of personal taste and comfort.

The engineer's or architect's certificates, which are often issued at each stage of completion, indicate that the work is done to the satisfaction of the architect or engineer

Which of the following is a correct statement regarding strict liability? Select one: a. Strict liability is commonly described as "liability with fault." b. The most recent major application of strict liability is to the manufacturers of defective products that are "unreasonably dangerous." c. The basic idea behind strict liability is that the risks associated with certain activities should be borne by an innocent person who has suffered loss. d. Generally speaking, negligence is a good defense to strict liability suits.

The most recent major application of strict liability is to the manufacturers of defective products that are "unreasonably dangerous."

On April 1, 2008, Joe received a telegram from Adam offering to build Joe a resort cottage for $100,000. On April 5, 2008, at 10:00 A.M., Adam sends Joe a telegram attempting to revoke the offer. At 11:00 A.M. on the same day, Joe sends Adam an e-mail attempting to accept the offer. At 11:30 A.M., Joe receives Adam's revocation. Assume Adam's offer was silent on the question of what means Joe could use to accept. Which of the following is true when the offeror impliedly authorizes acceptance by any reasonable means? Select one: a. The parties would not have a contract because the impliedly authorized means of communication was a telegram. b. The parties may have a contract if the court concludes that e-mail was a reasonable way for Joe to accept Adam's offer. c. The parties would not have a contract because Joe did not use the means impliedly authorized by trade usage. d. The parties may have a contract if Adam reads the acceptance e-mail before the revocation reaches Joe.

The parties may have a contract if the court concludes that e-mail was a reasonable way for Joe to accept Adam's offer.

Which of the following is a correct statement regarding the statute of limitations period recognized by the Uniform Commercial Code (UCC)for a breach of sales contract lawsuit? Select one: a. The parties to a contract for the sale of goods may not shorten the statute of limitations period. b. The parties to a contract for the sale of goods may shorten the statute of limitations period to one year. c. The parties to a contract for the sale of goods may extend the statute of limitations beyond the time period recognized by the UCC. d. There is no statute of limitations period for a lawsuit for breach of a contract for the sale of goods.

The parties to a contract for the sale of goods may shorten the statute of limitations period to one year.

A buyer has a retail store in Florida and the seller is a manufacturer in California. If the buyer orders goods from the seller and the goods are shipped "FOB Florida," which of the following statements is true? Select one: a. The seller bears the expense and risk of delivering the goods to Florida. b. Neither the seller nor the buyer bears the risk of delivering the goods as the goods are insured. c. The seller is allowed to charge a nominal fee for delivering the goods. d. The buyer bears the risk of loss as he is responsible for taking possession of the goods.

The seller bears the expense and risk of delivering the goods to Florida.

Which of the following is true about the seller's duty of delivery? Select one: a. The contract of sale requires the seller to deliver the goods to the buyer's place of business. b. If the goods are covered by a negotiable warehouse receipt, the buyer must indorse the receipt. c. The buyer is required to officially notify the seller once he receives the goods. d. The seller's basic obligation is to tender delivery of goods that conform to the contract with the buyer.

The seller's basic obligation is to tender delivery of goods that conform to the contract with the buyer.

The Smiths, an affluent family, own a hospitality chain called Smith Hotels Inc. When a lawsuit was filed against the hotel for serving stale food to its guests, the managers of the hotel decided to hire a lawyer who practices in an adversary system. How is this situation advantageous to Smith Hotels Inc.? Select one: a. The system makes it easier for a biased judge to control the outcome of a case. b. The wealthy can hire better lawyers as the system does not work when the opposing lawyers are of unequal skill. c. The system lays emphasis on the competition to win which discourages overstatement of the truth. d. The adversary system resents the idea that truth is best discovered through the presentation of competing ideas.

The wealthy can hire better lawyers as the system does not work when the opposing lawyers are of unequal skill.

Which of the following statements is true of pleadings? Select one: a. The first step in starting a lawsuit is the serving of a summons on the defendant. b. These are the first documents filed with the court, and they start and define the lawsuit. c. The case is set for trial on the court calendar once the pleadings have commenced. d. Both disputed and undisputed matters in the pleadings are tried in court.

These are the first documents filed with the court, and they start and define the lawsuit.

Which of the following is true of Organization for Economic Cooperation and Development (OECD) reports? Select one: a. They coordinate domestic and international policies of developing countries b. They state that most codes of conduct tend to speak in positive terms, such as, a commitment to honesty. c. They were created to promote rules for the corporations based on the culture of the place. d. They assert that most enterprises' codes of conduct expressly publish policies that deal directly with corruption.

They state that most codes of conduct tend to speak in positive terms, such as, a commitment to honesty.

Which of the following statements is true of rational basis analysis? Select one: a. This analysis is an extremely lenient level of scrutiny that presumes the regulation is constitutional. b. This analysis generally requires that the classification serves important governmental objectives and is substantially related to the achievement of those objectives. c. Under this analysis, the statute is unconstitutional unless the government demonstrates that it is pursuing a compelling governmental interest in the least intrusive manner. d. This analysis generally is used to evaluate restrictions on commercial speech or discrimination on the basis of certain suspect classifications.

This analysis is an extremely lenient level of scrutiny that presumes the regulation is constitutional.

In the context of the decision-making model drawn heavily from the thoughts of Joseph L. Badaracco Jr., identify the correct statement regarding the question, "Which course of action is feasible?" Select one: a. This question borrows from both the modern rights theories and justice theory and it identifies which particular rights are at stake. b. This question is teleological in nature in that it focuses on the morality of the consequences of the decision. c. This question recognizes that ethics and morality must be practical. d. This question draws from the decision maker's personal philosophy as well as the commitments he or she owes to the corporation and its shareholders.

This question recognizes that ethics and morality must be practical.

The _____ is the most widely adopted uniform law. Select one: a. Uniform Criminal Code b. Interstate Commerce Treaty c. Uniform Commercial Code d. Multistate Criminal Compact

Uniform Commercial Code

With regard to the United Nations Convention on Contracts for the International Sale of Goods (CISG) and the Uniform Commercial Code (UCC), which of the following statements is correct? Select one: a. Unlike the UCC, the CISG does not require that an offer be directed to a specific person or persons. b. Unlike the CISG, the UCC does not require that an offer be stated with sufficient definiteness. c. Unlike the UCC, the CISG does not consider an offer sufficiently definite if it lacks price terms. d. Unlike the CISG, the UCC does not require that an offer indicate that the person making the offer intends to be bound by the agreement.

Unlike the UCC, the CISG does not consider an offer sufficiently definite if it lacks price terms.

_____ the Uniform Commercial Code (UCC), the UN Convention on Contracts for the International Sale of Goods (CISG) holds acceptances to be effective when they are _____, not when they are _____. Select one: a. Unlike; received; dispatched b. Like; received; dispatched c. Unlike; dispatched; received d. Like; dispatched; received

Unlike; received; dispatched

_____ prohibit charging more than a stated amount of interest for the use of money. Select one: a. Sunday laws b. Wagering laws c. Usury laws d. Blue laws

Usury laws

If a term is _____, courts treat it as distinctive and automatically qualify it for trademark protection. Select one: a. generic b. descriptive c. arbitrary d. nonspecific

arbitrary

Trial courts differ from inferior courts in that the trial courts: Select one: a. are courts of limited jurisdiction. b. are limited by the amount of civil damages that can be awarded. c. are courts of record, and their decisions can be appealed. d. are called municipal courts in urban areas.

are courts of record, and their decisions can be appealed.

On the same basis and for the same reasons as minors, people lacking mental capacity: Select one: a. cannot disaffirm their contracts. b. should always place the other person in status quo. c. are liable for the reasonable value of necessaries. d. do not need to return any consideration they have received.

are liable for the reasonable value of necessaries.

The new federal sentencing guidelines implemented as part of Sarbanes-Oxley: Select one: a. apply sanctions to both individual board members as well as the corporation itself. b. assign specific oversight responsibilities to directors. c. are designed to give the management immunity. d. call for special committees of the board to be assigned similar functions.

assign specific oversight responsibilities to directors.

Violetta was injured in a bike accident while on a ride with Alfredo, who she knew was intoxicated. A court would regard this as: Select one: a. contributory negligence. b. assumption of the risk. c. last clear chance. d. comparative negligence.

assumption of the risk.

Polly promises to pay city council member Smith $500 to show up for the weekly city council meetings. Polly's promise is: Select one: a. supported by consideration. b. wholly enforceable. c. not supported by consideration. d. supported by conditional consideration.

not supported by consideration.

Penny had carelessly left marbles on the steps of her house. When Bijou came to visit, she broke her leg by slipping on those marbles and severely damaged her spine. While in the hospital recovering from her fall, her body being weak from all the antibiotics, readily contracted a viral infection. Under these circumstances, Penny is most likely to be liable: Select one: a. only for the damage to Bijou resulting from her fall. b. only for Bijou's viral infection. c. for injuries sustained by Bijou and also for the viral infection. d. for neither problems because Bijou should have been careful.

for injuries sustained by Bijou and also for the viral infection.

The federal government has the exclusive right to regulate all _____ of the United States. Select one: a. intrastate commerce b. domestic commerce c. private and government actions d. foreign commerce

foreign commerce

The time limit set by the Uniform Commercial Code statute of limitations for contracts involving the sale of goods is _____ from the time the goods are tendered. Select one: a. four years b. seven years c. ten years d. twenty years

four years

All the elements of misrepresentation and the fact that the misrepresentation was knowingly made with an intent to deceive, have to be established to prove _____. Select one: a. undue influence b. duress c. fraud d. a unilateral mistake

fraud

The revised version of "Principles of Corporate Governance" of the Organization for Economic Cooperation and Development insists on: Select one: a. lesser incentives for directors to ensure their corporations are not breaking the law. b. lesser transparency within corporate structures. c. greater concealment of corporate governance policies to avoid conflicts of interest. d. greater protection for whistleblowers.

greater protection for whistleblowers

Timothy is a construction worker in one of the leading firms of a city. His employment contract includes a clause which says he cannot work as a construction worker within the city for fifteen years once he leaves the company. This clause is: Select one: a. illegal as it is injurious to public service. b. only illegal if it violates state or federal antitrust laws. c. illegal as a contract in restraint of trade. d. legal because the employer can add any constraint to the agreement.

illegal as a contract in restraint of trade.

The law of negligence holds our behavior up to a(n) _____ standard of conduct. Select one: a. objective b. strict liability c. subjective d. criminal

objective

A useful tool for understanding and persuading that combines basic analytical thinking with recognition of the special features of the underlying legal system is _____. Select one: a. sociological jurisprudence b. legal positivism c. legal reasoning d. analytical reasoning

legal reasoning

Specific, reform-based proposals for changes in management structure include: Select one: a. government representation on the corporate board of directors. b. government representation in corporate executive management. c. licensing requirements for holding certain corporate positions. d. outsourcing corporate executive management positions.

licensing requirements for holding certain corporate positions.

If the parties agree on the amount of damages that will be paid to the injured party, this amount is known as _____. Select one: a. liquidated damages b. registration expenses c. consequential damages d. remedial agreements

liquidated damages

Under the allocational efficiency theory, the primary objective of a business corporation is to: Select one: a. maximize profits. b. minimize fraudulent activities. c. maximize corporate social responsibility. d. minimize criticism.

maximize profits.

The problem with looking at values that find wide acceptance as a guide to ethical corporate behavior is that: Select one: a. modern life holds a diversity of conflicting ethical views. b. most widely-accepted values are uninformed. c. companies will always look to profit maximization over anything else. d. culture has no effect on the ethical attitudes of business managers in today's global world.

modern life holds a diversity of conflicting ethical views.

In a contract where there is no agreement between two parties for delivery in installments, all the goods _____. Select one: a. must be delivered at the seller's discretion b. must be delivered to the buyer in a single delivery c. must be delivered in the installments at the seller's discretion d. must be delivered in reasonably spaced intervals

must be delivered to the buyer in a single delivery

A _____ is one where both parties involved in a contract are under a mistaken belief about a material fact. Select one: a. state of duress b. state of undue influence c. mutual mistake d. unilateral mistake

mutual mistake

Consequential damages: Select one: a. occur when the special circumstances of the plaintiff cause him or her to suffer losses that would not ordinarily be foreseeable as a result of the breach. b. are recoverable unless the defendant had reason to foresee them at the time the contract was created. c. are measured by the loss in value of the promised performance. d. are very small damages that the court may award the plaintiff when a technical breach of contract has occurred without causing any actual loss.

occur when the special circumstances of the plaintiff cause him or her to suffer losses that would not ordinarily be foreseeable as a result of the breach.

An offeree who attempts to accept after an offer has terminated is himself making a(n) _____. Select one: a. offer b. revocation c. counteroffer d. grumbling acceptance

offer

An offeree may accept an offer within a reasonable time and by any reasonable means of communication if the: Select one: a. parties are dealing over the telephone. b. offeror suggests a method or a place of communication in the offer. c. written offer is lost in transit. d. offer merely suggests a method or place of communication.

offer merely suggests a method or place of communication.

In a unilateral contract, the offer is accepted when the: Select one: a. offeror verbalizes his assent. b. offeree attempts to perform the act. c. offeror puts across his promise in writing. d. offeree performs the requested act.

offeree performs the requested act.

An individual appointed within an organization to settle disputes is called a(n) _____. Select one: a. private judge b. arbitrator c. mediator d. ombudsperson

ombudsperson

According to the rule of _____, if a promisee's performance was rendered before the promisor's promise was made, then it can never serve as consideration, even though it may meet the "legal value" part of the test. Select one: a. past consideration b. preexisting duty c. forbearance d. promissory estoppel

past consideration

Ratification may be inferred by a court from the: Select one: a. principal's acceptance of benefits of an unauthorized contract. b. agent's failure to repudiate an unauthorized contract after becoming aware of it. c. third party's extent of knowledge about the contract. d. principal's failure to give express authority to the agent.

principal's failure to give express authority to the agent.

Torts are _____ wrongs against persons or property. Select one: a. private civil b. private criminal c. public civil d. public criminal

private civil

Numerous proposals designed to make corporations more sensitive to outside concerns have been offered throughout the past few decades. Generally, these recommendations are of a _____ nature. Select one: a. substantive b. procedural c. micro-managerial d. legally enforceable

procedural

Trademark dilution laws: Select one: a. protect "distinctive" or "famous" marks from unauthorized uses even when confusion is not likely to occur. b. are intended at protecting consumers rather than focusing on protecting the investment of trademark owners. c. permit a company to quickly penetrate a foreign market without incurring the substantial financial and legal risks associated with direct investment. d. require the licensee to transfer any inventions it derives from the licensed technology to the licensor.

protect "distinctive" or "famous" marks from unauthorized uses even when confusion is not likely to occur.

The doctrine of promissory estoppel: Select one: a. makes the contracts unenforceable. b. does not make promises enforceable. c. protects bargains, not reliance. d. protects reliance, not bargains.

protects reliance, not bargains.

The Sarbanes-Oxley Act requires that: Select one: a. public corporations disclose whether they have adopted a code of ethics for senior financial officers. b. directors are provided with lower incentives to ensure their corporations are not breaking the law. c. privately traded corporations have board audit committees comprising only of internal directors. d. special committees of the board be assigned special areas of concern.

public corporations disclose whether they have adopted a code of ethics for senior financial officers.

Joe pays Ann to mow his lawn, but Ann mows Donna's lawn by mistake. Donna peeps out her window and sees Ann mowing, yet says nothing to Ann about her mistake as Donna needs to have her lawn mowed. When Ann approaches Donna for payment, Donna refuses, arguing that she had never asked Ann to mow her lawn. Under these circumstances, Ann can recover payment from Donna on a(n) _____ contract basis. Select one: a. void b. quasi c. executory d. express

quasi

If an oral contract has been declared unenforceable under the statute of frauds, yet one of the parties has rendered some performance under the contract that conferred benefits on the other party, he or she can recover the reasonable value of the performance in _____. Select one: a. collateral enforcement b. quasi contract c. guaranty contract d. promissory estoppel

quasi contract

The Sarbanes-Oxley Act: Select one: a. raises the penalties for illegal behavior. b. gives corporations greater freedom from government control. c. adopts the theory of allocational efficiency. d. motivates executives to inflate reports of corporate profits.

raises the penalties for illegal behavior.

If the governmental action has a reasonable relationship to the achievement of a legitimate purpose, it is declared constitutional under: Select one: a. strict scrutiny analysis. b. intermediate scrutiny analysis. c. rational basis analysis. d. suspect classifications.

rational basis analysis.

One night, when Henry got home and flipped on the light switch, the kitchen exploded, leaving him severely injured. The explosion was caused by a failure of the gas connector, which allowed a large amount of gas to escape, and a small spark created by turning on the light caused it to explode. Henry sued the gas corporation, arguing that it knew the connector was defective but it did not warn its customers. Henry won the case. He is most likely to have won the lawsuit on the grounds of: Select one: a. negligence per se. b. recklessness. c. strict liability. d. breach of duty.

strict liability.

Under the First Amendment, commercial speech is: Select one: a. subject to intermediate scrutiny unlike political speech. b. completely suppressed regardless of it being misleading or truthful. c. subject to strict scrutiny just like political speech. d. completely unregulated unless it is put in writing.

subject to intermediate scrutiny unlike political speech.

The _____ protects people from arbitrary government interference with their life, liberty, or property rights. Select one: a. procedural due process b. substantive due process c. equal protection clause of the fifteenth amendment d. due process clause of the sixth amendment

substantive due process

To prove a case of duress, modern courts require only: Select one: a. the plaintiff to drive a hard bargain. b. that the threat be a wrongful one. c. a contract to be more beneficial to one of the parties. d. statements that amount to puffery.

that the threat be a wrongful one.

Jared, a regular customer at Pablo's Bookstore, placed his backpack near one of the bookshelves where he was browsing. Jared forgot to take his backpack when leaving the store. If Farah, another customer at Pablo's, found Jared's backpack in the store, _____. Select one: a. Farah would have the right to hold the backpack for Jared b. the bookstore would have the right to hold the backpack for Jared c. Farah would acquire possession and ownership of the backpack d. the bookstore would acquire possession and ownership of the backpack

the bookstore would have the right to hold the backpack for Jared

If a buyer repudiates a contract for identified, conforming goods before risk of loss has passed to him/her, _____. Select one: a. the buyer is liable for a commercially reasonable time for any loss or damage to the goods that is not covered by the seller's insurance b. the seller is liable for a commercially reasonable time for any loss or damage to the goods c. the buyer and the seller must share the loss equally d. the buyer is not liable for any loss or damage to the goods

the buyer is liable for a commercially reasonable time for any loss or damage to the goods that is not covered by the seller's insurance

An agency's rule-making power is derived from: Select one: a. judicial fiat b. an institutional charter issued by either the Secretary of State of the United States government or the Secretary of State of the particular state in which the agency is to exercise its investigative and adjudicatory powers. c. the enabling legislation enacted by Congress for the creation of the agency. d. executive order

the enabling legislation enacted by Congress for the creation of the agency.

When the finder of a lost property knows who the owner is and refuses to return it to him or her, _____. Select one: a. the finder is liable to revest the title of the property back to the owner b. the finder will not be found guilty of conversion c. the finder will be found guilty of accession d. the finder is liable to pay the owner the fair value of the property

the finder is liable to pay the owner the fair value of the property

An agent will be relieved from liability for representations in excess of the agent's authority if the: Select one: a. agent hired subagents to do some of his work. b. third party knows that the agent is acting in excess of his authority. c. principal does not ratify the act. d. act was undertaken with a good intent.

third party knows that the agent is acting in excess of his authority.

Mary runs an ad in the paper offering a $5 reward for the return of her lost dog, Sparky. Mary has made a promise to pay the person who performs the act of returning Sparky. This is a(n) _____ contract. Select one: a. quasi b. implied c. bilateral d. unilateral

unilateral

Mayor Magnus wants to recruit a Harvard economist, Milton, as the chief developer for the Small Town's economic development division.The legal cap on the job of chief developer is $60,000. Magnus offers Milton $100,000. The contract is: Select one: a. voidable. b. unlawful. c. exculpatory. d. enforceable.

unlawful.

Maya makes an agreement with Ravi for Ravi to steal Professor Hussain's laptop computer. The agreement between Maya and Ravi is _____. Select one: a. voidable b. void c. valid d. unenforceable

void

If a court later finds that a person lacked mental capacity at the time the contract was entered into, the contract is _____. Select one: a. voidable at the election of that person (or his or her guardian or administrator) b. voidable at the election of the other contracting party (or his or her agent) c. void ab initio d. void

voidable at the election of that person (or his or her guardian or administrator)

An intervening force, which happens after the defendant's negligent act and contributes to the plaintiff's injury, can excuse the defendant from liability if it: Select one: a. could have been anticipated. b. was proximate. c. was unforeseeable. d. was an intentional tort and not an unintentional one.

was unforeseeable.

Apparent authority may exist: Select one: a. only if actual authority has been conferred on the agent. b. if a principal has unintentionally permitted third persons to believe a person is him/her agent. c. if the principal specifically describes the extent of the agent's powers in writing or orally and makes him/her a special agent. d. when the conduct of the principal causes a third person reasonably to believe that another has the authority to act for the principal.

when the conduct of the principal causes a third person reasonably to believe that another has the authority to act for the principal.

Phil joins Sky-High Designs as a designer. He signs an employee agreement that says he will not engage in design work in the city for six months after termination of his employment with the firm. Phil works with the firm for two years and then resigns to immediately join as a designer in another firm in the same city. Sky-High Designs sues him for breach of contract, and is likely to: Select one: a. lose because employee contracts that restrict trade are illegal. b. lose because Phil has free will to do as he chooses. c. win because Phil's act is a violation of the Blue laws. d. win because the restriction has reasonable geographic and time restrictions.

win because the restriction has reasonable geographic and time restrictions.

Under the Uniform Commercial Code (UCC), a lawsuit for breach of a sales contract must be filed: Select one: a. as soon as the breach is detected. b. within a year after the breach is detected. c. within ten years after the breach occurs. d. within four years after the breach occurs.

within four years after the breach occurs.