Business Law Mult. Choice

A(n) __________ is an intended beneficiary of a contract who receives the benefits of the contract as a gift. a. incidental beneficiary b. intended beneficiary c. assignor d. donee beneficiary

D

The scope of an EIS: a. does not apply to psychological effects. b. does not apply to the urban environment. c. is narrowly construed. d. applies to a broad range of types of effects.

D

The usual remedy for breach of contract is: a. injunction. b. specific performance. c. punitive damages. d. money damages.

D

A factory modification that will increase emissions of pollutants requires: a. the EPA administrator to establish new source performance standards. b. a BFOQ. c. a NAAQS. d. a SIP.

A

A system for electronic funds transfers (EFT) in which machines are located in a merchant's store and are activated by the consumer's identification card and code is: a. POS. b. RAM. c. EFTA. d. DOS.

A

A(n) __________ is a contract between a promisee and a promisor by which the promisee agrees to accept and the promisor agrees to render a substituted performance in satisfaction of an existing contractual duty. a. accord b. mutual rescission c. material alteration d. novation

A

A(n) __________ is a person in a position of trust and confidence who has a duty of utmost loyalty and good faith. a. fiduciary b. servant c. independent contractor d. principal

A

A(n) __________ is a third party who obtains possible benefits but no rights under a contract. a. incidental beneficiary b. intended beneficiary c. assignor d. donee beneficiary

A

According to the "American Rule," when contracting parties litigate over a breach: a. each party pays its own attorney fees, regardless of who wins. b. attorney fees are considered consequential damages. c. the losing party has to pay the winner's attorney fees. d. a provision for attorney fees in the written contract will not be given effect.

A

Agency is governed primarily by: a. state common law. b. the UCC. c. federal statutes. d. administrative law.

A

An agent has breached his fiduciary duty in which of the following situations? a. All of the following choices are correct answers. b. Where the agent makes a secret profit. c. Where the agent uses information obtained in the course of the agency for his own benefit. d. Where the agent competes with the principal.

A

Bartow signed a contract to coach baseball for Washington High for a period of three years. After two years he is offered and accepts an assistant coaching position at State University. Contract law will not allow Washington High to ask for: a. specific performance of his contract. b. payment of compensatory damages. c. an injunction against coaching at the university. d. liquidated damages.

A

Ben Stewart has a checking account at First Bank. a. The relationship between Ben and his bank is based primarily on their contractual agreement. b. First Bank is a creditor and Ben is a debtor. c. Ben is an agent of First Bank. d. All of the above.

A

Carolyn, a cashier at Tops Supermarkets, may cash checks for up to $20 over a purchase amount. A friend needs money for a dress so Carolyn cashes a check for $50 with no purchase. The check bounces. Carolyn is: a. liable because she violated her duty of obedience. b. liable because she breached her duty to inform. c. not liable since she has apparent authority to take the check. d. not liable unless she knew her friend did not have the money in the bank.

A

Contract damages that put the injured party in as good a position as if the other party had performed are: a. compensatory damages. b. incidental damages. c. consequential damages. d. liquidated damages.

A

David enters into a contract giving Edward the right of first refusal on a tract of land owned by David. David subsequently offers the land to Fred without first offering it to Edward. An appropriate remedy for Edward to seek would be: a. an injunction. b. liquidated damages. c. reformation. d. punitive damages.

A

For how long is an oral stop payment order valid? a. 14 calendar days. b. 30 calendar days. c. 90 calendar days. d. Six months.

A

Harold hired Blake Painters to paint his house. Blake decides he has too many jobs and delegates the duties to the Andrews Company. Andrews does a poor job, and drips paint on Harold's flowers and windows. a. Harold can sue both Blake and Andrews. b. Harold can sue Blake, but he cannot sue Andrews. c. Harold can sue Andrews, but he cannot sue Blake. d. Harold cannot sue, because he has accepted the benefits of the assignment.

A

Kellie owes a duty to Grant and Kellie delegates the duty to Hank. Hank: a. is not obligated to either Kellie or Grant to perform the duty unless Hank agrees to do so. b. becomes liable for nonperformance to both Kellie and Grant only if Hank promises both Kellie and Grant that he will perform Kellie's duty. c. cannot create contractual rights in Grant. d. All of the above.

A

NEPA requires that the EIS contain: a. an analysis of the relationship between local short-term uses of the environment and the maintenance and enhancement of long-term productivity. b. reversible and retrievable commitments of resources involved. c. only a brief outline of the adverse environmental effects of a proposed action. d. All of the above.

A

Paul, a contractor, has a contract to build a new office building for Bill. The contract contains a provision requiring Paul to furnish a certificate of occupancy from the building inspector before Bill is required to pay. This provision is: a. an express condition. b. an implied-in-fact condition. c. an implied-in-law condition. d. a condition subsequent.

A

Rebecca sees a pair of beautiful silver shoes in a store window. She goes in and tells the shopkeeper, "If I am asked to the prom, I will buy those shoes. Please hold them for me." If the shopkeeper signs a note that says, "Will hold for Rebecca silver shoes, style 1028, size 8," will he have to honor that promise? a. Yes, and there is a condition precedent to the contract of sale. b. Yes, there is a contract with a condition subsequent. c. No, there is no contract but simply an illusory promise. d. No, a contract is formed after Rebecca is asked to the prom.

A

Refusal of a tender of performance by one party to a bilateral contract will: a. be treated as a repudiation, excusing the tendering party from further duty of performance under the contract. b. not discharge either party from further duty of performance under the contract. c. be considered a condition subsequent. d. None of the above.

A

The majority of states follow the __________ rule in awarding damages for fraud. a. benefit-of-the-bargain b. out-of-pocket c. liquidated d. restitution

A

The party to whom a contractual duty of performance is owed is known as the: a. obligee. b. obligor. c. assignee. d. assignor.

A

On November 1, Paula and Roberta enter into a contract where both parties are obligated to perform on December 31. On December 1, Paula tells Roberta, "I can, in no way, perform my duties in our contract." This statement is: a. a material alteration. b. anticipatory repudiation. c. a nonmaterial breach since the statement is made before December 31. d. an accord.

B

Russell and Joe make a contract for Russell to manufacture five leather chairs of a specified design. Prior to their manufacture, the factory is destroyed in an accidental fire that is no one's fault. The chairs are available from other sources. a. Russell must supply the chairs, even if he must buy them elsewhere. b. Russell's duty to deliver the chairs is discharged by the destruction of the factory. c. Russell has materially breached the contract if he fails to deliver the chairs. d. Two of the above, (a) and (c).

B

Sean has a right against Tanner and assigns it for value to Megan. Later, Sean gives Tanner a release. Megan: a. will be unaffected by Sean's action. b. may recover damages from Sean for breach of an implied warranty. c. may recover damages from Tanner for breach of an implied warranty. d. has lost her right and has no remedy.

B

An agent is not required to keep which of the following information confidential? a. Unique business methods. b. Customer lists. c. Information that his or her principal is engaged in criminal activity. d. Business plans.

C

Fred contracts to sell a certain tract of land to Mary for $20,000, but the contract is silent as to the time of delivery of the deed and payment of the price. a. The payment of the $20,000 and the delivery of the deed are independent of each other. b. The delivery of the deed is a condition subsequent to the payment of the $20,000. c. The payment of the $20,000 and the delivery of the deed are mutually dependent and, in the absence of an agreement to the contrary, are concurrent conditions. d. The payment of the $20,000 is a condition precedent to the delivery of the deed.

C

Professor Doright has a life insurance policy on his own life that provides that in the event of his death, his mother will receive the proceeds. Professor Doright's mother is a(n): a. incidental beneficiary. b. creditor beneficiary. c. donee beneficiary. d. assignee.

C

Sam, a shopkeeper, dies unexpectedly at the age of 46. His lifelong business associate, Paul, is appointed the administrator of the estate. Sam had a personal debt of $8,000 which he owed to Art's Appliance Store. Paul says to Art, "If there isn't enough money in the estate, I'll personally see that the bill is paid." Which of the following is correct? a. The oral statement is enforceable because Paul is the administrator. b. An oral statement such as this is not enforceable because it is outside the statute of frauds. c. An oral statement such as this is not enforceable because it is within the statute of frauds. d. The oral statement is enforceable because it is a collateral promise.

C

Sylvia draws a check on ABC Bank payable "to the order of Ann Smith." Ann indorses it and deposits it in her account at First Bank. First Bank is a: a. drawee bank. b. payee bank. c. depositary bank. d. payor bank.

C

When a payor bank gets an item payable from a customer's account with insufficient funds, the bank may: a. pay the item and charge it to the customer's account even though an overdraft is created. b. dishonor the item and return it. c. Either (a) or (b). d. Neither (a) nor (b).

C

Which of the following agents would not have authority to contract with third parties on behalf of the principal? a. A salesman who sells his employer's goods. b. A manager who hires employees for the store owner. c. A factory worker hired to operate a machine. d. A buyer who regularly buys merchandise for a store. e. All agents have authority to contract with third parties on behalf of their principals.

C

Which of the following involves an invalid assignment that a court would not enforce? a. An assignment of a savings account accompanied by the delivery of the passbook. b. An assignment lacking consideration. c. An assignment of an automobile liability insurance policy accompanied by the delivery of the policy. d. An assignment in writing signed by the assignor and delivered to the assignee.

C

Which of the following is NOT a duty of a collecting bank in the collection process? a. Duty of care. b. Duty to act in a timely manner. c. Duty to honor a valid stop payment order. d. Duty to honor a restrictive endorsement.

C

A(n) __________ is a method of discharging a contract in which a third party becomes bound upon a promise to the obligee. a. assignment b. delegation c. partial assignment d. novation

D

All of the following except which one is a duty of an agent? a. Account for money received on behalf of his principal. b. Inform his principal of any information relevant to his agency. c. Refrain from competing with his principal. d. After the agency is terminated, refrain from using any information gained while an agent.

D

An agent may lose the right to compensation: a. by breaching the agency contract willfully and deliberately. b. if the specified result of the contract is not obtained. c. if the duty of loyalty is breached. d. All of the above e. None of the above.

D

Stark enters into a contract with a contractor to build a large shopping mall in River City. Donner will greatly benefit from this contract since his convenience store is adjacent to the mall. Donner in this instance is: a. an implied beneficiary. b. a partial beneficiary. c. a donee beneficiary. d. an incidental beneficiary.

D

Theresa has a contract to teach eighth grade at Washington Middle School. She decided she could make more money writing a book, so she wants to assign her teaching contract to her friend, Stephanie, who is also a licensed teacher. a. If effective, this would be both an assignment and a delegation. b. The duties which Theresa wants to delegate are personal in nature. c. If the school district agrees to accept Stephanie's services, a novation would occur, which would relieve Theresa of her obligation to the school district. d. All of the above are correct.

D

To accomplish the basic purposes of contract remedies, which of the following limitations have not been imposed upon monetary damages? a. Foreseeability. b. Certainty. c. Mitigation. d. Restitution.

D

Which of the following promises does not have to be evidenced by a writing or be in proper electronic form in order to be enforceable? a. Jones's agreement with Smith to sell his condominium for $100,000. b. Stewart's promise to work for Austin for a two-year period. c. Dad's promise to the credit union that he will make payments on his son's truck. d. Mindy's agreement with Susan to buy her bike for $400.

D

Which of the following will terminate an agency coupled with an interest? a. The death of the principal. b. The bankruptcy of the principal. c. The incapacity of the principal. d. None of the above will terminate such an agency.

D

11. Which of the following is correct with regard to the capacity of an agent? a. The incapacity of the agent disqualifies him from making a contract that is binding on his principal. b. No mental capacity is necessary for an agent. c. If an incompetent person who is not under guardianship appoints an agent, contracts made by that agent are voidable. d. A young child or a person under guardianship has the capacity to act as an agent.

C

28. Sid contracts to put new kitchen cabinets in Ned's house. Sid repeatedly tries to install the cabinets, but Ned does not grant him access to the house. In this case: a. Ned is discharged from his duties under the contract because of material breach. b. the frustration of purpose doctrine applies to discharge the contract. c. Sid is discharged from his duties under the contract because Ned's prevention of Sid's performance constitutes a material breach. d. Both Sid and Ned are discharged from their duties because of impossibility of performance.

C

A __________ is a written, formal appointment of an agent. a. fiduciary b. revocation c. power of attorney d. rescission

C

A check is drawn on Jones Bank by Tamara and made payable to the order of Chris. Chris indorses it "for deposit only, Acct. 2275, Chris" and gives it to Plainer Bank for deposit. Plainer stamps "pay any bank" on the check along with its indorsement and negotiates it to Stone Bank. Stone Bank simply stamps "Stone Bank" and negotiates it to SmallTown Bank. If SmallTown wants to negotiate it to the electric company to pay its bill, can it? a. Yes, because the restrictive indorsement only applied to earlier indorsees. b. Yes, because the bank was not responsible for checking more than one indorsement. c. No, because an item restrictively indorsed with words such as "pay any bank" is locked into the bank collection system. d. No, because the bank must issue its own check for its own bills.

C

A contractor and Southampton, Inc. have a contract, which calls for the contractor to build a building with the completion by June 15. If the building is not completed by that date, the contract calls for the contractor to pay $100 per day in damages. The $100 per day is: a. punitive damages. b. nominal damages. c. liquidated damages. d. an illegal penalty.

C

A small breach of contract damage amount fixed without regard to the amount of loss is known as: a. reliance damages. b. out-of-pocket damages. c. nominal damages. d. None of the above.

C

A written, integrated contract contains a provision that states it will be effective for a "year." The plaintiff in a lawsuit claims that a "year" is obviously 12 months. The defendant claims that the contract meant a 10-month school year. a. Parol evidence cannot be used to explain the term, because the plain meaning of a "year" is 12 months. b. Parol evidence cannot be used to explain the term, because it is an integrated document. c. The term "year" in the contract is ambiguous, and the parties can bring in parol evidence to clarify their intent. d. Parol evidence cannot be used, because the contract contains an express term that could have been changed by the parties prior to the contract's execution.

C

All but which of the following is true about a delegation of duties? a. When the delegatee assumes the delegated duty, both the delegator and the delegatee are liable for performance of the contractual duty to the obligee. b. Contractual duties are generally delegable. c. The courts will examine an assignment more closely than a delegation. d. A delegation will not be permitted if the nature of the duties are personal in that the obligee has a substantial interest in having the delegator perform the contract.

C

Barbara owes Arthur $2,000. On July 1, Arthur assigns the debt to Carl. Thereafter on July 15, Arthur assigns the same right to David, who in good faith gives value for it and knows nothing about the first assignee. David immediately notifies Barbara of the assignment. a. Under the majority rule, David has priority. b. Under the English Rule, a second assignment of the same claim can never be effective. c. Under the English Rule, David has priority. d. Under all of the rules, Carl has priority since he was the first assignee in time.

C

Barry presents to Wake Bank for deposit in his account a check for $100 made out to him by Richard. Wake Bank provisionally credits Barry's account on Monday. When is payment final? a. Automatically at the end of the third business day. b. Midnight Tuesday. c. When the amount of the check is collected from Richard's bank. d. When Richard's bank receives the check.

C

Bob, the tax accountant, promises to do Marge's individual federal, state, local, and gift taxes for the year. He completes all but the gift taxes. Under the substantial performance doctrine: a. Marge will not have to pay Bob. b. Marge will not have to accept the work. c. Marge will have to pay Bob for all but the gift taxes. d. Marge will have to pay Bob the contract price.

C

CERCLA is an act that: a. regulates current and future generation, transportation, and disposal of hazardous waste. b. provides limited authority for the cleanup of inactive and abandoned hazardous waste sites. c. requires the federal government to establish a National Contingency Plan. d. Both (a) and (b).

C

Carl, a contractor, and Lyle, a landowner, have a contract whereby Carl is to perform routine construction services according to the blueprints that Lyle has provided. Carl assigns the contract to David, a developer. As a result of this assignment: a. Lyle can bring suit based upon detrimental reliance. b. Carl has no more rights or responsibilities with regard to the contract. c. Carl no longer has any rights under the contract, but he remains responsible for the duties he agreed to perform. d. Carl has all of his rights under the contract, but he has no responsibility for the performance of the duties.

C

Courts will enforce contracts for the benefit of all but which of the following? a. Donee beneficiaries. b. Creditor beneficiaries. c. Incidental beneficiaries. d. Intended beneficiaries.

C

Damages for reliance include expenses for: a. lost profits. b. injury to the person. c. preparing to perform. d. punishment of the breaching party.

C

Despite its efficiency, MICR has created several problems which include: a. paying a postdated instrument prior to its date. b. customers miscoding checks. c. Both of the above. d. None of the above.

C

Doug takes a $500 check drawn by Gail to Gail's drawee bank to cash it. Gail has over $10,000 on deposit in her account, but her bank refuses to pay Doug. a. Doug can sue the bank and demand payment. b. If the check is over 30 days old, the bank has a right to refuse payment. c. The bank has incurred a liability to Gail for its improper refusal to pay the check. d. All of the above.

C

If you lose your wallet along with your ATM card, your liability is a. unlimited unless you notify the bank within 30 days. b. limited to $200 if you notify the bank within two days. c. limited to $50 if you notify the bank within two days. d. limited to $500 if you notify the bank within 60 days.

C

In May of 2006, Jones went to C & C Bank to apply for a loan on a home he wanted to purchase. C & C Bank loaned the money to Jones because he had excellent credit. C & C never inspected the property Jones was purchasing. Two weeks later, five rusty and leaking 55-gallon drums of a toxic substance were found buried in a creekbed in Jones' backyard. Jones and the Bank's position with regard to liability for cleanup on the property would be: a. that CERCLA could not impose strict liability for owners of or lenders of purchase money for contaminated property even if they acquired the property with knowledge of contamination. b. that they would not be liable as innocent landowners as provided for in SARA and they would have an automatic defense. c. that if the Bank and Jones made all appropriate inquiry into the previous ownership and uses of the property before purchase, they may not be liable. d. that if it could be proven that neither Jones nor the bank unlawfully disposed of the toxic waste, they could not be found liable under CERCLA.

C

Marcella pays $12,000 down on a houseboat which Hugh had agreed to sell to her for $64,000. Marcella then repudiates the contract. Hugh sells the houseboat to Lloyd in good faith for $60,000. Marcella may recover from Hugh: a. nothing, since she was the one who repudiated the contract. b. her $12,000 down payment since Hugh's contract with Lloyd created a novation and discharged any duty Marcella had to pay anything toward the houseboat. c. $8,000 in restitution, which represents Marcella's $12,000 down payment less the $4,000 in damages Hugh sustained because of Marcella's breach. d. only a nominal amount.

C

Mark, who is 16 years old, appoints Joe, age 21, as his agent to purchase a digital camcorder from Electronic World. a. The transaction is void because Mark is a minor. b. The transaction is voidable by Electronic World because Mark is a minor. c. The transaction is voidable by Mark because he is a minor. d. The transaction is not voidable because Joe is not a minor.

C

Miller made a contract to sell his condominium to Jefferson for $80,000. Two days later Miller changed his mind after discovering that he could have sold the property to another buyer for an additional $20,000. Jefferson sues and asks the court to have the property conveyed to him at the price of $80,000. Jefferson is seeking: a. restitution. b. punitive damages. c. specific performance. d. valid tender.

C

On March 1, Tammy, a student, received a telephone call from Watterson, Inc. offering her a job for one year beginning on June 15, after completion of the school year. According to the personnel manager, she will have to move to California and be ready to start work at 8:00 a.m. on June 15. Should Tammy ask for a letter confirming the telephone conversation if she accepts the offer immediately? a. Yes, because the job offer is a collateral promise. b. Yes, because the job offer is covered by the parol evidence rule. c. Yes, because the job offer is for longer than one year from March 1. d. No, because the job offer is for one year from June 15.

C

Paul promises Marty $1,500 if he will completely landscape Paul's yard. Which of the following would discharge Paul's obligations to pay under this contract? a. Marty leaves a one-foot strip of land barren. b. Marty doesn't begin work on the landscaping until after he finishes two other jobs. c. Marty doesn't plant any flowers or grass. d. Paul isn't satisfied with Marty's design.

C

The Competitive Equality Banking Act: a. allowed intermediary banks to become clearinghouses. b. includes a requirement that collecting banks give provisional credit to its subagents. c. has expedited the availability of funds. d. None of the above.

C

The UCC Article 2 statute of frauds provision applies to the sale of goods for the price of __________ or more. a. $50 b. $100 c. $500 d. $1,000

C

The agent may be subject to liability to her principal for breach of the duty of obedience if she: a. entered into an authorized contract and the principal has changed her mind. b. delegates her authority in any way and under any circumstances. c. committed a tort for which the principal is now liable. d. All of the above.

C

To establish an environmental strict liability suit at common law, the plaintiff must show that the: a. defendant was negligent in her operations. b. plaintiff was not negligent. c. defendant is engaged in an abnormally dangerous activity. d. location for such activity is indeed appropriate.

C

To establish trespass to land, a plaintiff: a. must show an invasion that interferes with the plaintiff's right of exclusive possession of property that is at least an indirect result of the defendant's actions. b. need not show the plaintiff's right to exclusive possession, but must show that the defendant's actions were unreasonable. c. must show an invasion that interferes with the plaintiff's right of exclusive possession of property and that it is a direct result of the defendant's actions. d. need not show the plaintiff's right to exclusive possession.

C

Under the Restatement, if there are successive assignments of the same right: a. the first assignee to notify the obligor prevails. b. the latest assignee is usually entitled to the assigned right. c. a prior assignee is entitled to the assigned right to the exclusion of a subsequent assignee in most circumstances. d. a subsequent assignee is entitled to the assigned right unless a prior assignee gave value and obtains either a judgment against the obligor or a new contract with the obligor.

C

Under the UCC, __________ refers to the manner and extent to which the respective parties to a contract have accepted successive tenders of performance by the other party without objection. a. course of dealing b. usage of trade c. course of performance d. integrated document

C

Under the parol evidence rule, which of the following types of evidence may be used to vary or contradict the written agreement? a. Prior oral or written agreements. b. Contemporaneous oral or written agreements. c. Subsequent oral or written agreements modifying the original agreement. d. Two of the above, (a) and (b).

C

What is another name for the main purpose doctrine? a. The collateral promise rule. b. The possibility test. c. The leading object rule. d. The suretyship provision.

C

Which of the following is NOT a major duty, which the agent owes to the principal? a. Duty to obey instructions. b. Duty to act in good faith and with loyalty. c. Duty to indemnify. d. Duty to exercise care.

C

Which of the following is NOT true regarding specific performance? a. It will not be granted if money damages would be adequate to compensate the injured party. b. It is granted in contracts involving unique items of personal property. c. It will be granted frequently in contracts involving the sale of goods. d. The courts will not order directly the specific enforcement of contracts for personal services.

C

Which of the following is correct with respect to election of remedies? a. The Code follows the doctrine of election of remedies with respect to contracts for the sale of goods. b. The remedy of specific performance is consistent with that of restitution. c. A person who seeks an injunction may also seek incidental damages for the breach. d. All of the above are correct.

C

Which of the following is not true about chlorofluorocarbons (CFCs)? a. They deplete the ozone layer. b. By 1985, scientists believed that the release of CFCs into the atmosphere had caused a hole in the ozone layer in the stratosphere. c. There are no synthetic substitutes for CFCs. d. CFCs are extremely potent greenhouse gases.

C

Which of the following is true about UCC Article 4A? a. It is designed to overlap coverage of the Electronic Funds Transfer Act. b. It covers both credit and debit transactions. c. It covers wholesale funds transfers. d. It does not allow parties to vary their rights and obligations by agreement.

C

Which of the following is true regarding noncompliance with the statute of frauds? a. The basic legal effect under the statute of frauds and the UCC differs. b. The statute of frauds applies to executed and executory contracts. c. A party to a contract which was unenforceable because of the statute of frauds but who relied upon the contract may recover in restitution the benefits he conferred on the other party. d. The doctrine of promissory estoppel cannot displace the requirement of a writing under a statute of frauds.

C

Which of the following promises in consideration of marriage would be outside the statute of frauds? a. In consideration of Joan's promising to marry him, Dwight promises to pay her an allowance and to give her all of his property upon his death. b. John and Mary mutually agree that their marriage shall not affect the existing property rights of the other. c. John and Joan mutually promise to marry each other in a formal ceremony on June 23. d. Joan promises to release a money judgment against Steven in consideration of his marrying her.

C

13. Carson, who is an agent for Peter, breaches his fiduciary duty to Peter. Carson: a. is liable to Peter for breach of contract. b. is liable to Peter in tort for any losses caused by the breach. c. must make restitution for any profits or property received in breach of this duty. d. All of the above are correct.

D

A power of avoidance held by a party may be lost if: a. the contract is affirmed. b. there are unreasonable delays in exercising the power. c. the rights of third parties intervene. d. All of the above.

D

A principal has no duty to compensate his or her agent if: a. the agent breached the duty of obedience. b. the agent breached the duty of loyalty. c. it is a gratuitous agency. d. All the above are correct.

D

A remedy available for breach of contract is: a. restitution. b. monetary damages. c. the equitable remedies of specific performance and injunction. d. All of the above.

D

An example of an unenforceable oral contracts is: a. an oral promise to guarantee the additional duties of another. b. an oral agreement to substitute different land for that described in the original lease contract. c. an oral agreement to extend an employee's contract for six months to a total of two years. d. All of the above. e. (a) and (c), but not (b)

D

An express condition is usually preceded by which of the following terms? a. While. b. After. c. Provided that. d. All of the above.

D

Anita, who is a seamstress, agrees to sew a suit for Bryan, who promises in return to pay Anita $500 for the suit if he is satisfied with it. Anita completes the suit, which fits Bryan perfectly. Nevertheless, he says that he is not satisfied and refuses to accept or pay for it. Bryan is honest in his dissatisfaction, but he is unreasonable. a. Bryan must pay for the suit even if he is dissatisfied. b. This is an illusory contract, because only Anita is bound. c. Bryan's approval is to be judged by an objective standard. d. Anita has no recourse against Bryan, because she agreed to the subjective standard.

D

Barbara owes Arthur $2,000. On July 1, Arthur assigns the right to the $2,000 to Carl. Thereafter, on July 15, Arthur assigns the same right to David, who in good faith gives value for it and knows nothing about the first assignee. a. Carl has the right to the payment of $2,000. b. David has the right to the $2,000. c. Neither Carl nor David can claim the $2,000. d. The rule differs by state.

D

Bill recently borrowed $50 from Ricardo for a couple of weeks. Bill, still short of cash, tells Ricardo, "I will wash and wax your car in exchange for the $50 I owe you." Ricardo tells Bill, "OK, that's great!" Ricardo's performance of his new duty will be: a. an accord. b. a novation. c. a rescission. d. a satisfaction.

D

Carl loans Dan $1,500 for Dan's honeymoon. Dan gives Carl his ruby ring as security for the loan and after a year, tells Carl he may as well sell it to recoup the $1,500. When Dan's wife hears of this, she persuades Dan to call Carl and get back the ring. Can Carl sell it anyway? a. Yes, because Carl has apparent authority. b. Yes, because Carl has an express agency. c. No, Carl's authority has been revoked. d. Yes, because Dan cannot terminate this agency except by discharging the obligation.

D

Darrell owns a parcel of land that is encumbered by a mortgage held by the First National Bank. Darrell agrees to sell the land to Paul for $50,000. Darrell and Paul together go to the First National Bank to discuss the sale and purchase with the banker. Darrell, Paul, and the banker sign an agreement stating that Paul will assume the mortgage and that Darrell will be discharged from all further liability on the mortgage. a. The bank is a third party donee beneficiary. b. The bank can collect from Darrell if Paul defaults. c. Darrell is a third party beneficiary of the agreement between Paul and the bank. d. The agreement among the three is a novation.

D

General contract law states that contracts that have to be in writing must: a. specify the parties to the contract. b. specify the subject matter and essential terms. c. be signed by the party to be charged or by his/her agent. d. All of the above. e. (a) and (b) but not (c)

D

Harry said to Marge, "I have a ring once owned by Marilyn Monroe. Would you like to buy it for $500?" Marge pays for the ring, but the next day a friend tells her that Harry had recently purchased the ring at a local store. Marge enjoys wearing the ring and wears it constantly for twelve months. Finally, she goes to Harry and says, "Here is the ring you lied about. Give me my $500. " Most likely: a. Marge will get her money back since Harry's statement was fraudulent. b. Marge will not get her money back since she should have investigated the facts about the ring more carefully. c. Marge will not get her money back since she is a good faith purchaser of merchandise. d. Marge will not get her money back since she has affirmed the contract by taking an unduly long time to disaffirm.

D

Helen deposits a $50 check in her account at First Bank at 4:00 on Friday. The bank is closed on Saturday and Sunday, but opens again on Monday. The midnight deadline for First Bank would be: a. Midnight Saturday. b. Midnight Sunday. c. Midnight Monday. d. Midnight Tuesday.

D

If Margie makes out a check for $27.50 when she has only $10 in her account, her bank may: a. refuse to pay the check. b. pay the check. c. bill Margie for $17.50 and service charge. d. Any of the above.

D

If the contract does not state otherwise, standard goods under a contract for sale to meet the satisfaction of the buyer must: a. meet the buyer's actual satisfaction, if honest and in good faith, even if unreasonable. b. meet the buyer's actual satisfaction, only if reasonable. c. meet a subjective standard. d. satisfy a reasonable person.

D

In determining the meaning of a contract, which of the following will have first priority? a. Course of performance. b. Course of dealing. c. Usage of trade. d. Express terms.

D

In suing to recover for environmental damage under the common law, plaintiffs generally have had causes of action in: a. nuisance. b. trespass. c. strict liability. d. All of the above.

D

In the case of Michael Silvestri v. Optus Software, Inc., the court held: a. an objective standard is typically applied to satisfaction clauses in employment contracts. b. an objective standard must be used in determining what is satisfactory performance in any "satisfaction" contracts. c. idiosyncratic judgments as to what constitutes satisfactory employee performance are inherently unfair and should not be allowed. d. in judging a high-level manager's satisfactory performance, a subjective test is appropriate.

D

In which of the following cases will an oral contract for the sale of goods of $750 be enforceable without a writing? a. The goods are to be specially manufactured for the buyer and the seller has made a substantial beginning of their manufacture. b. A party admits in an answer to a complaint in a lawsuit that the contract was made. c. Delivery and acceptance of the goods has been made. d. All of the above.

D

In which of the following situations does the parol evidence rule not apply? a. Where a typographical error occurs in the document and obviously does not represent the agreement of the parties. b. Where one of the parties to the contract lacks contractual capacity. c. The parol evidence rule applies in both of the above situations. d. The parol evidence rule does not apply in either (a) or (b).

D

In which of the following situations is restitution available as a remedy? a. As an alternative remedy for a party injured by breach. b. For a party in default. c. For a party who may not enforce the contract because of the statute of frauds. d. All of the above are situations in which restitution is available.

D

In which of the following situations is there a third party incidental beneficiary who would be unable to enforce the agreement? a. Wholesalers, when the buyer of a business promises the seller that he will pay outstanding debts to wholesalers who have supplied inventory for the business. b. Workers, where a contractor agrees to post a performance bond to assure payment of workers and material suppliers. c. A debtor, where a new partner enters an accounting firm and agrees to pay a share of debts incurred prior to his admission to the firm. d. A doctor, when an automobile accident policy states that the insurance company will reimburse the insured for medical expenses incurred as a result of an automobile accident.

D

In which of the following situations will a court grant specific performance? a. In a case involving breach of contract for the sale of real property. b. In contracts for personal services. c. Where goods are unique or rare. d. Two of the above, (a) and (c).

D

Jim contracted with Kevin to serve as a guide for Kevin on his three-week fishing trip to Canada. The contract was made on April 1 with the trip to begin on June 1. On May 1, Kevin notified Jim that he had changed his mind and would be unable to make the trip. He also refused to pay Jim any compensation. a. Because the contract is executory, Jim has suffered no damages, and Kevin has no obligation to pay any compensation. b. Kevin has anticipatorily repudiated the contract and is liable to Jim for damages. c. Jim may wait until June 1 to see if Kevin will perform his contractual duties and, if he does not, there is a material breach. d. Both (b) and (c) above are correct.

D

Kelley borrows $3,000 from Paul and orally agrees to repay him in three annual installments. Most courts would hold: a. the oral contract is unenforceable because it cannot be performed within one year. b. Article 2 of the UCC controls this loan. c. the oral contract is enforceable only through the doctrine of promissory estoppel. d. the oral contract is enforceable because Paul fully performed his obligation under the contract.

D

On April 6, Ellen sends a check out to a magazine publisher and then discovers she has already paid for the subscription. She calls her bank and orders that the bank not make payment. That order will be good until: a. April 13. b. October 6. c. April 13 if confirmed in writing. d. October 6 if confirmed in writing.

D

Steven is a manufacturer's representative for Incell Corporation. One day he receives a big-screen television as a gift from one of the clients he contacts on behalf of Incell. a. Steven must account to Incell for the gift he has received. b. The big-screen television belongs to Incell rather than to Steven. c. If he keeps the TV without telling Incell, he will have breached his fiduciary duty. d. All of the above are correct.

D

Sylvia deposits in her account at First Bank a $50 check drawn on Valley Bank. First Bank transfers the check to Second Bank, which in turn forwards it to Valley Bank, which pays the item. Valley Bank is the: a. payor bank. b. drawee bank. c. collecting bank. d. Two of the above, (a) and (b), are correct.

D

The CERCLA trust fund is financed by a: a. tax on chemical feedstocks. b. surtax on businesses with annual incomes over $2 million. c. tax on petroleum. d. All of the above.

D

The National Pollutant Discharge Elimination System may require that discharge permits be obtained from: a. the EPA. b. the Army Corps of Engineers. c. an individual state. d. Any of the above.

D

The RCRA was enacted by Congress: a. to provide a comprehensive scheme of treatment for hazardous solid waste. b. and established a manifest system to be used by generators. c. and gave states the primary responsibility for hazardous waste. d. Both (a) and (b). e. Both (b) and (c).

D

The concept of conflict of interest as it relates to the law of agency includes which of the following? a. An agent may take a position that conflicts with the principal only if the principal, with full knowledge of all the facts, consents. b. An agent may not represent her principal in a transaction in which the agent has a personal interest. c. An agent may not act on behalf of adverse parties to a transaction without both principals' approval of the dual agency. d. All of the above.

D

The contractual duties owed by a principal to an agent are the duties of: a. compensation. b. reimbursement. c. indemnification. d. All of the above. e. None of the above.

D

The court in Public Service Commission of Maryland v. Panda-Brandywine, L.P.: a. held that there is no legal distinction between the transfer of contractual rights and duties. b. found the issue was whether an assignment or delegation could be made in this case. c. found that the provisions in the Asset Purchase and Sale Agreement did not constitute an assignment or transfer within the meaning of the parties' agreement. d. held that there was an assignment of rights and delegation of duties in contravention of the parties' agreement and the transfer was therefore invalid and unenforceable.

D

The parol evidence rule is: a. another term for the exclusionary rule. b. a rule of construction. c. a rule of interpretation. d. a rule of substantive law.

D

What is the effect of a payor bank's dishonor of a check? a. It returns the check. b. The provisional credits must be reversed. c. The customer who deposited the item for collection must cover the item and seek recovery from the drawer or indorsers. d. All of the above will occur.

D

When contract terms prohibiting the assignment of rights exist, most courts will: a. strictly construe them. b. interpret a general term prohibiting assignments as a mere promise not to assign. c. award the obligor a right to damages for the breach of the terms forbidding the assignment. d. All of the above.

D

Which of the following best describes the manifest system? a. It is the best available technology requirement as described in the Clean Air Act. b. It is the national pollution policy as set forth in NEPA. c. It is the registration system required by TSCA. d. It is a form on which a generator certifies that the toxicity of waste has been reduced to the greatest degree that is economically practicable.

D

Which of the following duties would not be delegable? a. John has a contractual duty to pay Isaac $50. b. Karl has a contractual duty to deliver 50 bushels of corn to Michael by October 1. c. Jeffrey has a duty to mow Georgia's lawn at least once a week. d. Arthur has a duty to teach an accounting class at a community college during the fall semester.

D

Which of the following is not a breach of an agent's duty of obedience? a. Entering into an unauthorized contract for which his or her principal is then liable. b. Committing a tort for which the principal is now liable. c. Improperly delegating her authority. d. Not following a principal's instruction to misrepresent the quality of a competitor's goods to a potential customer.

D

Which of the following is true about the regulation of pesticide use by the EPA? a. To be legally registered a pesticide must perform its intended function without posing unreasonable risk to humans or the environment. b. The EPA may balance the economic and social costs of use of a pesticide in deciding whether to register it. c. Once a pesticide is registered the registration cannot be canceled for five years. d. Both (a) and (b). e. Both (a) and (c).

D

Which of the following is true of PSD areas under the Clean Air Act? a. Only limited increase in air pollution is allowed. b. New construction of a major stationary source requires a permit from the state. c. To receive a permit, a new source must show it will use the best control technology available. d. All of the above. e. None of the above.

D

Which of the following is true of a collecting bank? a. A collecting bank is an agent of the owner of an item until settlement becomes final. b. The relationship between a collecting bank and the owner of an item, once settled, becomes a debtor-creditor relationship. c. A collecting bank may be a sub-agent of the owner until settlement becomes final. d. All of the above. e. None of the above.

D

Which of the following is true with regard to the federal Electronic Funds Transfer Act? a. It is primarily a disclosure statute. b. It gives the same protections to customers that are found in Article 4. c. It limits a customer's liability for unauthorized transfers to $50 if the consumer notifies the financial institution within two days after learning of the loss or theft.. d. Two of the above, (a) and (c).

D

Which of the following would NOT require a writing under the statute of frauds? a. The buyer pays $10,000 for a piece of real estate. b. A renter agrees to rent a building for a 5-year period. c. An agreement creates an easement to run cables across adjoining land. d. A landscaper agrees to landscape the lot surrounding an office building.

D

Which of the following would be considered a material breach of a contract? a. Partial performance that omits some essential part of the contract. b. Delivery of 50 chairs in a contract that calls for 100 chairs. c. An intentional breach of the contract. d. All of the above would be material breaches. e. Only (a) and (b) above would be material breaches.

D

Would a letter written after the execution of a contract and which contained agreements different from those in the written contract be admissible under the parol evidence rule? a. No, because it contradicts the terms of the contract. b. No, because it changes the agreement. c. No, because it explains the agreement. d. Yes, it would be admissible, because it is subsequent to the written agreement.

D

An objective of the Check 21 Act is to: a. require banks to accept checks in electronic form, thereby reducing paperwork. b. make the check collection process faster by transferring files digitally. c. enhance fraud detection. d. All of the above. e. Both (b) and (c).

E

Arthur advances money to John so that John can purchase inventory for his business. In return and for security on the loan, John makes Arthur his agent. a. If John becomes incapacitated, Arthur's agency is terminated by operation of law. b. If John files for bankruptcy, Arthur's agency is terminated by operation of law. c. If John dies, Arthur's agency is terminated by operation of law. d. All of the above are correct. e. Arthur's agency is irrevocable.

E

Lostowne was economically depressed until Sally's Firecracker Corp. moved its factory there. Test explosions and the acrid smell of sulfur then interfered with Bob's enjoyment of the old family home. Bob sues Sally for nuisance and seeks a court-ordered injunction to close down the factory. In determining whether the injunction is appropriate, the court will: a. "balance the equities." b. consider the gravity of harm to Bob and his family. c. consider the social value of Sally's business. d. consider the public interest in the jobs created by Sally's and the economic upturn in Lostowne. e. All of the above.

E

The duty of care exercised by a collecting bank in handling an item transferred to it for collection does not include: a. taking care in presenting the item. b. that it must act within a reasonable time after receipt of the bank item. c. taking care in routing. d. taking care in selecting intermediary banks. e. All of the above are duties of care of collecting banks.

E

The most important federal statutes governing hazardous substances include: a. SARA. b. CEQ. c. FIFRA. d. Both (b) and (c). e. Both (a) and (c).

E

Which of the following is true with respect to substantial performance? a. It has particular importance in the construction industry. b. Substantial performance does not defeat the purpose of the contract. c. When one party to a contract has substantially performed, the other party cannot recover damages for the imperfect performance. d. All of the above. e. Two of the above, (a) and (b) are correct.

E

Which of the following statement(s) is true concerning the Montreal Protocol on Substances that Deplete the Ozone Layer? a. The United States and 23 other countries signed it. b. It was not signed by the United States but was signed by 23 other countries. c. It is a treaty that requires all signatories to reduce their production and consumption of all chemicals. d. It is a treaty that requires all signatories to reduce their production and consumption of only CFC's. e. Both (a) and (c).

E

Anita owes Brad $75,000. Brad signs a written statement granting Carl a gratuitous assignment of his rights from Anita. Brad delivers the signed statement to Carl before he dies. a. The delivery of the statement makes the assignment irrevocable. b. The assignment is terminated upon Brad's death. c. The signing of the statement makes the assignment irrevocable. d. The assignment is invalid, because it is revocable.

A

Louis agreed to provide all the apples that Cindy's Cider Mill will need at $3 per bushel unless weather conditions require additional labor to be hired. The rate would then be $3.50 per bushel. A freeze warning required Louis to hire 10 additional overtime workers, raising the cost per bushel to $4.75. Louis wants to get out of his contract. Can he? a. No, the parties expected the hardship and provided for it in their contract. b. No, there is no hardship. c. Yes, the contract is commercially impracticable. d. Yes, the freeze is a supervening event.

A

Mark hires Joe's real estate agency to sell his property, telling Joe he has lost too much money playing the stock market to afford to keep it up. Then Mark wins the three million-dollar lottery! Joe reads this in the newspaper and that afternoon makes a contract with Sharon to sell the property. Is the contract valid? a. No, the agency terminated because of the change in conditions. b. No, the agent has no right to sell without consent. c. Yes, Mark would have to notify Joe if he wanted to stop the sale. d. Yes, Joe had apparent authority to sell.

A

Mary goes to her stockbroker, purchases 50 shares of IBM Stock, and instructs the broker to register the stock in her husband Warren's name. If this stock is intended as a Valentine's gift, Warren becomes: a. a donee beneficiary. b. a transferee. c. a delegatee. d. an assignee.

A

Steven owes Theresa $100 for a used computer which he bought last year at Theresa's garage sale. The two agree that the debt can be paid by Steven's shoveling Theresa's driveway from January through March. The new contract is a(n): a. accord. b. satisfaction. c. novation. d. rescission.

A

TSCA includes provisions that: a. regulate the manufacture of new chemicals. b. allow for the registration of pesticides. c. require that exports be labeled "not registered for use in the United States of America." d. All of the above.

A

The Clean Air Act requires the EPA Administrator to do what, regarding new stationary sources? a. Establish federal standards of performance that reflect the best technological system of emission reduction. b. Establish performance standards that will match emissions from existing sources. c. Allow no discharge of any pollutants. d. All of the above.

A

The Code greatly alters the common law doctrine of material breach by adopting what is known as the: a. perfect tender rule. b. anticipatory repudiation rule. c. prevention of performance rule. d. discharge by operation of law rule.

A

To establish a private nuisance, a plaintiff: a. must show that the defendant has substantially and unreasonably interfered with the use and enjoyment of the plaintiff's land. b. must show that in an action for damages in conjunction with private nuisance, the defendant's conduct was unreasonable. c. need not show that the interference was unreasonable. d. need only show that the quiet enjoyment of plaintiff's land was substantially impacted.

A

Under E-Sign, an electronic agent: a. is a computer program or other automated means used independently to initiate an action or respond to electronic records or performances. b. is an individual who uses electronic means to initiate an action or respond to electronic records or performance. c. is an electronic sound, symbol, or process attached to or logically associated with a contract or other record. d. may not form a contract without an individual's reviewing the terms.

A

Under the UCC, a(n) __________ is a sequence of previous conduct between the parties to an agreement which may be fairly regarded as establishing a common basis of understanding for interpreting their conduct under the contract. a. course of dealing b. usage of trade c. course of performance d. extrinsic set of evidence

A

Victor negligently led Gus to believe that Brenda had the authority to act on Victor's behalf. If Brenda had no authority but Gus reasonably and in good faith relied on Brenda's apparent authority: a. Victor can be liable to Gus for Gus's loss suffered because of his reliance. b. Victor cannot be held liable to Gus because Brenda had no actual authority. c. only Brenda can be held liable for any loss Gus suffered because of his reliance. d. Gus must bear any loss because he did not determine the extent or existence of Brenda'a authority.

A

Vladimir entered into a contract to buy Daniel's collection of rare stamps. Vladimir mailed payment of $10,000 for the stamps to Daniel, but now Daniel tells Vladimir, "I'll never part with these stamps." Are the following remedies available to Vladimir? a. Restitution: Yes; Specific Performance: Yes b. Restitution: Yes; Specific Performance: No c. Restitution: No; Specific Performance: Yes d. Restitution: No; Specific Performance: No

A

What principle did the court apply in the case of Madison Square Garden Corp., Ill. v. Carnera? a. When damages are not adequate, an injunction may be used to enforce a negative covenant regarding exclusive services that are unique and extraordinary. b. When services contracted for are unusual or extraordinary, the injured party cannot obtain injunctive relief. c. An injured party's damages may not be reduced by mitigation for his failure to accept or seek other employment of a different or inferior kind. d. Damages are recoverable only if they were foreseeable at the time of entering into the contract.

A

Which of the following involves a creditor beneficiary relationship? a. A contract where the insured names a bank with which he has a loan as the beneficiary of a life insurance policy. b. A contract between an employer and a union representing the employees which is made for the benefit of the employees. c. A contract between the owner of a building and the contractor stating that the contractor will pay the contractor's employees at a stated rate. d. A contract between a governmental unit and business for services to be rendered to area citizens

A

Which of the following is a collateral promise? a. A mother tells a merchant to extend $1,000 worth of credit to her son and says, "If he doesn't pay, I will." b. Andrew promises Donald that if Donald cannot pay his bills, Andrew will. c. A father tells a merchant to deliver a computer to his daughter and says, "Send me the bill. I'll pay for it." d. All of the above are collateral promises.

A

Which of the following is correct with respect to a bank customer's duty to discover and report unauthorized signatures? a. The customer is required to exercise reasonable care and promptness to examine the bank statement. b. A customer's duty of examination includes checking the signatures of payees or indorsers. c. The bank is liable on all items with unauthorized signatures even if these canceled checks were returned to the customer four years prior to the discovery of the alterations. d. The bank is not required to exercise ordinary care in paying the items.

A

Which one of the following assignments would probably be prohibited by a court? a. Mary is in debt. A credit card company calls and threatens to sue. Mary orally assigns her next bimonthly paycheck to her creditor. b. John is a house painter. He is scheduled to paint Molly's home on Monday. John wakes up Monday morning with a stiff neck. He calls Ed, who is also a painter, to begin the job at Molly's. c. Ron has a contract with Bonett Bank to service their coffee machines. He assigns the remainder of his contract with Bonett to Michelle, who also owns a coffee service. d. All of the above.

A

A and B enter into a contract on January 1 of this year. A's friend C tells A, "The law generally restricts the time within which an action can be brought by either party to a contract." C's statement is: a. false. b. true because of statutes of limitations. c. true because of the law of repudiation. d. true because of covenants not to sue.

B

A check drawn on a bank is an order to pay a sum of money and an authorization to charge the amount to the drawer's account. The drawer may countermand this order by which of the following? a. A canceled check. b. A stop payment order. c. A banker's acceptance. d. A time draft.

B

A detailed statement concerning the environmental impact of a proposed federal action is: a. a National Ambient Air Quality Standard. b. an Environmental Impact Statement. c. the bubble concept. d. an Environment Interior Standards Review.

B

A gratuitous agent: a. is a paid agent. b. is subject to the same duty of loyalty as other agents. c. has no duty of diligence. d. need not be reimbursed for her expenses.

B

A payment order for a wholesale funds transfer must: a. be communicated in writing. b. contain no condition to payment other than the time of payment. c. be transmitted by the sender directly to the receiving bank. d. All of the above.

B

A preauthorized electronic transfer from a consumer's account: a. may be orally authorized at the time the transfer is to be made. b. must be authorized in writing in advance of the time the transfer is to be made. c. may be stopped only by written notice to the financial institution at least five business days before the scheduled date of transfer. d. is limited to an amount of $500 or less.

B

A transfer to a third party of a contractual obligation is known as a(n): a. assignment of rights. b. delegation of duties. c. revocability of assignment. d. partial assignment.

B

ABC Bank sent Joanne, a depositor, her January statement on January 31. Within what length of time after this date will Joanne have to notify ABC bank of any instruments containing alterations or unauthorized signatures included in her January statement? a. 10 days. b. A reasonable period of time, not to exceed 30 days. c. 60 days. d. Three years.

B

ABC, Inc. calls the Widget Corporation of America to order 400 widgets at $2 a widget. Widget accepts the oral order and then sends out an order confirmation form, with the pre-printed name Widget Corporation of America on the top of the form. The form states that an order has been received for "300" widgets and that it will be filled promptly. a. The confirmation fails to meet the UCC writing requirement, because it isn't signed. b. ABC can enforce the contract for 300 widgets, but not for 400 widgets. c. If ABC signs and returns the form, it will be able to sue for the extra 100 widgets later. d. The contract is enforceable for 400 widgets, because it has been partially performed.

B

Al owes Tracy $500, due June 1. Al, Tracy, and Ted mutually agree that Ted will pay Tracy instead of paying Al the money Ted owes Al. Such an agreement is an example of: a. an accord. b. a novation. c. a satisfaction. d. a rescission.

B

An agent's duty to inform: a. applies to material and nonmaterial facts relating to the agency. b. does not apply if providing facts to the principal would violate a superior duty owed by the agent to another person. c. arises because notice to an agent does not constitute notice to the principal. d. All of the above.

B

An association of banks and other payors whose members settle accounts with each other on a daily basis is a: a. payor banking group. b. clearinghouse. c. provisional reserve. d. None of the above.

B

An executor personally promises to pay the debts of the decedent's widow. Under what circumstances would the creditor need to have a writing in order to enforce this promise? a. If the promise is made to the widow. b. If the promise is made to the creditor. c. If it is for the executor's economic benefit. d. The promise is an undertaking for the executor to become primarily liable.

B

Anita owes Brad $75,000. Brad signs a written statement granting Carl a gratuitous assignment of his rights from Anita. Brad dies prior to delivering the statement to Carl. a. Brad's death has no effect on the assignment. b. The assignment is terminated upon Brad's death. c. The signing of the statement makes the assignment irrevocable. d. The assignment is invalid, because it is gratuitous.

B

Annette entered into a contract with a local truck dealer to have a new truck delivered to her daughter, Sue, as a graduation present. In this contract, Sue is: a. an incidental beneficiary. b. a donee beneficiary. c. a creditor beneficiary. d. an assignor.

B

Barbara, an antique dealer, intentionally misrepresents the value of an antique chest of drawers, as $6,000 when she has reason to know the value is considerably less. Margaret agrees to buy it for $5,500. It is worth $2,500. In a state that uses the "out-of-pocket" rule, Margaret's damage award would be: a. $3,500. b. $3,000. c. $500. d. $2,500.

B

Barry's Sport Shop calls Champion Tee Shirt Company to order 200 designer tee shirts at $2 per shirt. The next day, Barry decides he can easily sell 100 more. Before the order is filled, he calls to change the order to 300 tee shirts. Champion sends 200. Can Barry force Champion to send the additional 100? a. No, because there is no consideration for the extra 100 shirts. b. No, because Barry does not have a writing signed by Champion Tee Shirts. c. Yes, because this is a subsequent modification of the original contract. d. Yes, because Champion Tee Shirts is a merchant within the meaning of Article 2 of the UCC.

B

Bob owns a business delivering coffee and donuts within the downtown area of the city. Smith Co. calls him to deliver a large quantity of his products to their local office. While taking a coffee urn through the Smith Co.'s office, Bob drops it on Lester, scalding him. Who is liable? a. Smith Co. and Bob are liable. b. Bob alone is liable. c. Lester has to absorb the cost himself since he assumed the risk by working at Smith Co. d. Only Smith Co. is liable.

B

Busby contracts to build a house for Connell. Busby finishes approximately half of the house and quits. Connell files suit against Busby. Which remedy is not available? a. Compensatory damages. b. Specific performance. c. Special damages. d. Nominal damages.

B

Carolyn agrees to sell Marianne an antique handmade lace tablecloth for $1,500. When Carolyn discovers that her cousin wants it too, she breaks the contract with Marianne. Marianne can ask the court to order: a. injunctive relief. b. specific performance. c. restitution. d. equitable rescission.

B

Chris receives a printed form in the mail from Wyandott Heating & Air indicating that he has placed a telephone order for a $600 heater. He doesn't recall placing the order. Which of the following is correct? a. Wyandott can hold Chris to the order. b. Chris can hold Wyandott to the order. c. Neither party is bound, because there is no signed writing. d. Chris is bound if he makes no objection within ten days.

B

E-Sign specifically excludes: a. all transactions covered by the UCC. b. wills and matters of family law. c. transactions relating to foreign commerce. d. All of the above.

B

For how long is a written stop payment order valid? a. One month. b. Six months. c. One year. d. Indefinitely.

B

Howard needs a truck to pull a 2,000-pound trailer. Gordon tells Howard, "My truck will pull a 2,000 pound trailer with ease." Relying on Gordon's statement, Howard buys the truck, but it will not pull a 2,000-pound trailer. If Gordon did not intend to deceive and Howard sues for nonfraudulent misrepresentation, he can ask for: a. punitive damages, but not out-of-pocket damages. b. out-of-pocket damages, plus consequential damages. c. out-of-pocket damages plus punitive damages. d. nominal damages because Howard should have known the capacity of the truck.

B

In the Massachusetts v. Environmental Protection Agency case, the Supreme Court found that: a. the EPA did not have statutory authority to regulate the emission of greenhouse gasses from new motor vehicles. b. courts may reverse any administrative agency action found to be arbitrary, capricious, or an abuse of discretion. c. the Clean Air Act provides a narrow definition of "air pollutant," but the EPA has the authority to clarify the definition. d. All of the above. e. Both (a) and (b).

B

In the case of Hadley v. Baxendale, the plaintiff was seeking damages for: a. restitution. b. lost profits. c. failure to convey land. d. failure to specifically perform a contract.

B

In the case of Jaeger v. Western Rivers Fly Fisher, the court determined that: a. Petragallo was Western's employee and, thus, Western was liable under the doctrine of respondeat superior. b. determining the nature of Petragallo's relationship with Western was a factual issue inappropriate for summary judgment. c. Petragallo was an independent contractor for whose conduct Western was not liable. d. the determination of the right to direct and control a person, whether express or implied, is controlling as to whether a person is an employee or an independent contractor.

B

In the case of Speelman v. Pascal, the court held that: a. a gratuitous assignment is terminated by the assignor's death, even if the assignor made an effective delivery of the assignment prior to his death. b. assignments of rights to sums that are expected to become due to the assignor are enforceable. c. assignments cannot be made of sums that are not presently due but are expected to become due in the future. d. personal contracts are not assignable.

B

In which of the following cases would an oral contract be enforceable without a written memorandum? a. Ron orders three custom-made suits. b. Michelle calls an employment agency in Paris to arrange for maid service for her three-month Parisian vacation. c. Anna orders a top-of-the-line computer over the phone. d. Catherine calls Lucky Dude Ranch to purchase the championship race horse they have advertised in the paper.

B

Lynne agrees to buy Harriette's farm for $200,000 and puts $20,000 down. Then Lynne learns she is allergic to hay and repudiates the contract. If Harriette can sell the farm for $190,000 a month later, she may: a. keep Lynne's $20,000. b. keep $10,000 of Lynne's down payment. c. not keep any of the down payment money. d. sue for specific performance.

B

Scott, a minor, sells his digital camera to Megan, who then sells it to Sherry. Under these circumstances: a. Scott retains the power of avoidance of the contract, since he is a minor, even after the property is sold to Sherry. b. if Sherry is a good faith purchaser for value and she buys the camera before Scott elects to rescind, no rescission is permitted. c. Megan and Sherry both received a voidable title regardless of whether they contracted in good faith. d. if Scott wants to rescind the transaction after the sale to Sherry, a good-faith purchaser for value, he has no remedy or recourse.

B

The 1990 amendments to the Clean Air Act: a. require the EPA to decide whether an SIP is complete; if it is, the EPA must approve or disapprove the plan within six months. b. attempt to halt environmental destruction caused by acid rain. c. do not permit utilities to sell their emission allowances. d. allot sulfur dioxide emission allowances to utilities based on the "bubble concept."

B

The definition of "discharge by breach" is: a. performance that is incomplete but that does not defeat the purpose of the contract but entitles the injured party to damages. b. wrongful failure to perform the terms of a contract that gives rise to a right to damages by the injured party. c. a breach that prevents performance by either party. d. None of the above.

B

The principle illustrated in the Christy v. Pilkinton case is: a. a breach of contract is material if it is an intentional breach. b. subjective impossibility does not discharge the contractual duty of the party. c. objective impossibility generally discharges the contractual duty of the party. d. commercial impracticability occurs when performance can only be accomplished under unforeseen and unjust hardship.

B

The privilege to play tennis and socialize at the Capital City Country Club (CCCC) is obtained through application, references, resumes, and fees. Steven and Chanel want to assign the remaining 4 years of their 5-year membership to Charles and Prissy so that Steven and Chanel may join the posh Silver Hawk Tennis and Polo Club. CCCC sues to enjoin Steven and Chanel from assigning their membership. CCCC will most probably: a. not prevail because all contract rights are assignable. b. prevail because the parties intended the contract to be personal and non-assignable. c. prevail because assigning the membership contract would violate public policy. d. None of the above.

B

The process whereby a court "rewrites" or "corrects" a written contract to make it conform to the true intentions of the parties is: a. injunction. b. reformation. c. specific performance. d. rescission.

B

Under the UCC, a(n) __________ is a practice or method of dealing regularly observed and followed in a place or vocation or trade. a. course of dealing b. usage of trade c. course of performance d. integrated document

B

Unless one of the parties contractually assumes the risk, the __________ discharges a contract if supervening circumstances make fulfillment of the purpose which both parties had in mind impossible. a. bankruptcy law b. frustration of purpose doctrine c. perfect tender rule d. impossibility of performance doctrine

B

When is an agency relationship irrevocable? a. It is never irrevocable. b. When the agency is coupled with an interest of the agent in the subject matter. c. When the principal violates his duties to the agent. d. When the agent is a fiduciary.

B

Which of the following is NOT true concerning the requirements for an effective assignment? a. The assignment must be voluntary. b. Consideration is required. c. There must be an intention to make the assignee the owner of the right. d. The assignment may be either written or oral.

B

Which of the following is a contract with a condition subsequent? a. Rhonda enters into a contract to buy a new car conditional upon her getting a loan from her bank. b. Roger bought a VCR but he may return the VCR within ten days and get all of his money back. c. Both (a) and (b) are examples of a condition subsequent. d. Neither (a) nor (b) is an example of a condition subsequent.

B

Which of the following is an exception to the suretyship provision requirement under the statute of frauds? a. A collateral promise made to the creditor. b. A promise, the leading object of which is to obtain an economic benefit for oneself. c. A collateral promise where there are three parties and two contracts involved. d. A promise by an executor to pay the debts of the decedent from the executor's own funds.

B

Which of the following is correct with regard to conditions subsequent? a. Conditions subsequent are quite common in contracts. b. A "sale or return" contract is an example of a contract with a condition subsequent. c. A condition subsequent must occur before performance is due under a contract. d. All of the above are correct.

B

Which of the following is not a factor used to determine whether an agent is an employee or an independent contractor? a. Whether the employer has the right to direct and control the conduct and activities. b. The regular business of the principal. c. Method of payment. d. The furnishing of equipment..

B

Which of the following is untrue with regard to the interpretation of contracts? a. Express terms prevail over course of performance, and course of performance prevails over course of dealing. b. Technical terms will always be given technical meaning and language that has a commonly accepted meaning is always interpreted in accordance with that meaning. c. Handwritten or typed terms are given greater weight than preprinted terms. d. All writings that are part of the same transaction are interpreted together.

B

Which warranties does a collecting bank give? a. Warranty of no alteration only. b. Entitlement to enforce the item, genuine signatures, no material alteration, no defense good against it, and no knowledge of insolvency of the maker or acceptor or drawer of an unaccepted draft. c. Only good title and genuine signatures. d. A collecting bank does not give any warranties.

B

Will wants to buy a new car. He goes to the bank to get a loan for the purchase, and signs an agreement to pay $10.00 per month in premiums on a term life insurance policy which names the bank as the recipient of the policy proceeds in the event of his death before the loan is repaid. The bank is a(n): a. incidental beneficiary. b. creditor beneficiary. c. donee beneficiary. d. assignee.

B