quiz 3 & 4

______ is information that the law presumes everyone knows by virtue of the fact that it is filed or recorded on the public record. a. Instructive notice b. Sample notice c. Constructive notice d. Model notice

c. Constructive notice

Goods that are specifically made for the buyer and are of such an unusual nature that they are not suitable for trade in the ordinary course of the seller's business are called _____. a. ​resellable goods b. ​speciality goods c. ​auction goods d. ​nonresellable goods

d. ​nonresellable goods

Which of the following is true of the transportation of goods through a common carrier? a. The carrier is not liable for damage due to the inherent nature of the goods, such as decay of vegetables. b. ​The carrier's high degree of liability lasts until the goods are picked up by a consignee after being transported. c. ​A common carrier is exempted from liability in the incidence of fire even if the incidence was caused due to the carrier's negligence. d. ​The initial carrier is not liable for a common carrier loss occurring on the line of a connecting carrier.

a. The carrier is not liable for damage due to the inherent nature of the goods, such as decay of vegetables.Which of the following is true of the liability of a common carrier of people? a. ​to the person whose photo ID matches the information on the order bill of lading. b. The carrier is not liable for damage due to the inherent nature of the goods, such as decay of vegetables. c. ​The liability of a common carrier for a passenger's safety begins when the passenger enters the waiting platform. d. to the person who presents the order bill of lading to the carrier at delivery.

Who bears the risk of loss of damage to unidentified goods? a. seller b. ​auctioneer c. ​buyer d. shipper

a. seller

A seller's warranty that the goods shall be delivered free from any security interest or any other lien of which the buyer at the time of making the sales contract had no knowledge is known as a _______. a. warranty against encumbrances b. warranty of fitness for a particular purpose c. warranty of title d. warranty of conformity to a description, sample or model

a. warranty against encumbrances

Which of the following is true of oral contract payments? a. ​An oral contract can be enforced if the buyer has made full payment on the contract. b. ​A check or promissory note tendered as payment, but refused by the seller, constitutes as an oral contract payment. c. ​In the case of part payment, an oral contract may be enforced for goods, for which payment has not been made and accepted. d. ​Under the law of commercial paper, a check, or draft is an unconditional payment when delivered.

a. ​An oral contract can be enforced if the buyer has made full payment on the contract.

In a written contract, Sheldon agreed to tutor the children of Mrs. Smith for a certain period of time. However, Sheldon, prior to starting classes, announced that he would not be able to tutor the children due to other commitments of his. In this case, there has been a(n): a. ​anticipatory breach. b. ​malpractice. c. ​negligent breach. d. ​rescission.

a. ​anticipatory breach.

A joint contract is one in which:​ a. ​each obligor is bound for the performance of the entire obligation. b. ​parties are not collectively entitled to the performance of another party. c. ​parties promise to do their individual part of the performance. d. ​not more than two parties can be involved.

a. ​each obligor is bound for the performance of the entire obligation.

Which of the following parties would qualify as a guest at a hotel? a. A person who resides permanently in the hotel. b. A person who lives within a short distance from a hotel but rents a room at the hotel and remains there overnight. c. A person who comes to the wedding reception of a family member being held at the hotel. d. A person who comes to attend a daylong conference that is being conducted by the management staff of a hotel as a part of its branding campaign.

b. A person who lives within a short distance from a hotel but rents a room at the hotel and remains there overnight.

Which of the following is true of bailments for the sole benefit of the bailee? a. In these bailments, the bailee renders a service and charges for the service. b. Any loss or damage to bailed property due to no fault of the bailee falls on the owner. c. ​If the bailee is injured due to a defect in the bailed property, the bailor is not liable for damages. d. The owner of the bailed property receives adequate benefits or compensation in these bailments.

b. Any loss or damage to bailed property due to no fault of the bailee falls on the owner.

A contract not to compete is valid in which of the following instances? a. Two large businesses dividing sales territory for themselves to avoid competition b. The buyer of a business prohibiting the seller from engaging in the same business in a certain town c. A business agreeing not to operate in a state to eliminate competition in that state d. Three businesses agreeing to take turns providing services to a community on a monthly basis in order to avoid competition.

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

Which of the following is true of the liability of a common carrier of people? a. ​to the person whose photo ID matches the information on the order bill of lading. b. The carrier is not liable for damage due to the inherent nature of the goods, such as decay of vegetables. c. ​The liability of a common carrier for a passenger's safety begins when the passenger enters the waiting platform. d. to the person who presents the order bill of lading to the carrier at delivery.

b. The carrier is not liable for damage due to the inherent nature of the goods, such as decay of vegetables.

In which of the following situations is a state most likely to enforce a usury law? a. X purchases two crates of liquor from a minor. b. X charges a very high rate of interest on money borrowed by Y. c. X sends two boxes of unapproved medicines to children in Africa. d. X sells a plot of land at a rate higher than the maximum contract rate.

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

In which of the following cases will a court refuse to enforce the provision of liquidated damages on a party?​ a. ​When the liquidated damages were established prior to the breach of contract b. ​When the amount of liquidated damages fixed by the contract is unreasonable c. ​When the actual damages are difficult to be proved d. ​When the parties refuse to pay the liquidated damages established in the contract

b. ​When the amount of liquidated damages fixed by the contract is unreasonable

The difference between a sale and a contract to sell is that: a. ​a contract to sell involves the immediate transfer of title from one party to another while a sale does not. b. a contract to sell involves the immediate transfer of title from one party to another while a sale does not. c. a sale involves an immediate transfer of title from one party to another while a contract to sell does not. d. a sale always requires the price to be paid up front by the seller while a contract does not.

c. a sale involves an immediate transfer of title from one party to another while a contract to sell does not.

Macy's, an auction house, was slated to put up ten paintings for auction. During the course of the auction, the auctioneer announced that three of the paintings could be recalled at the discretion of the auction house. In such a scenario, the seven remaining paintings will be known as goods offered _____. a. with reserve b. without terms c. without reserve d. with terms

c. without reserve

Which of the following is an advantage of a written contract over an oral one?​ a. ​Written contracts are always more enforceable. b. ​All contracts of importance must be in written form. c. ​The existence of a contract cannot be denied if it is in writing. d. ​Putting a contract in writing eliminates all mistakes.

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

Which of the following is true of a sale by entrustee? a. The entrustee is not liable to the owner for damages caused by the sale of the goods. b. The entrustee has the power to transfer the title of the goods to a third party in the entruster's name. c. ​The goods entrusted are subject to the claims of the entrustee's creditors. d. ​The entrustee, as a prospective customer, cannot convey the goods if it is obtained by worthless check or fraud.

c. ​The goods entrusted are subject to the claims of the entrustee's creditors.

Which of the following is true of sale of food or drink? a. The seller is always liable even when a harmful object found in food is natural to the particular kind of food. b. It is not considered as a sale if the purchaser consumes it off the premises. c. The seller must always provide an express warranty that the food is fit for consumption. d. The sale carries an implied warranty that the food is fit for consumption.

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

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

d. ​novation

When a party sues to enforce an alleged contract, the Statute of Frauds requires that:​ a. ​the note required by the Statute of Frauds must set forth all the material terms of the transaction in case of the sale of goods. b. ​the contract be evidenced by signatures on paper and not electronic signatures. c. ​the contract be evidenced by a writing signed by a maximum of one party. d. ​there be a note in writing signed by the party against whom the claim for breach of contract is made.

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

A bill of lading refers to: a. a proof of identity that a consignee must deliver to a carrier prior to receiving the goods that have been transported. b. ​an agreement between the owner of a vessel and a merchant, by which a ship is hired for the transport of goods for a defined period. c. ​a form signed by an officer of a vessel evidencing the receipt of a certain consignment on board and which does not serve as a document of title. d. ​a receipt and contract between the shipper of a particular good and a carrier.

​a receipt and contract between the shipper of a particular good and a carrier.

Which of the following types of agreements according to the Statute of Frauds need to be in writing?. ​ a. ​An agreement in which the terms can be performed within one year from the time it is made B. ​An agreement that does not involve taking responsibility for the debts of another c. ​An agreement containing a promise in consideration of marriage d. ​An agreement to sell goods for $499 or less

a. ​An agreement in which the terms can be performed within one year from the time it is made

Documents that show ownership are called documents of _____. a. ​consignment b. ​title c. bailment d. estoppel

b. ​title

​A contract must be for a lawful purpose, which must be achieved in a lawful manner, otherwise the contract is: a. ​void. b. ​voidable. c. ​ratified. d. ​rescinded.

a. ​void.