
Course Introduction
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Course Introduction
Contract Law explores the foundational principles and practical applications of legally binding agreements. This course covers the formation, interpretation, and enforcement of contracts, examining essential elements such as offer, acceptance, consideration, and intention to create legal relations. Students will analyze common law doctrines, statutory modifications, and defenses to contract formation, including capacity, duress, misrepresentation, and illegality. Through the study of real-world cases and hypothetical scenarios, the course aims to develop critical thinking and problem-solving skills essential for understanding disputes and remedies in contractual relationships.
Recommended Textbook Business Law Today Comprehensive 9th Edition by Roger
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45 Chapters
3172 Verified Questions
3172 Flashcards
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Page 2
LeRoy Miller

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Q1) Beth is a victim of Carl's violation of a criminal law.Criminal law is concerned with
A)the prosecution of private individuals by other private individuals.
B)the prosecution of public officials by private individuals.
C)the relief available when a person's rights are violated.
D)wrongs committed against the public as a whole.
Answer: D
Q2) When Overseas Exports,Inc.,based in New York,does business internationally,the firm may be subject to international law.The sources of this law include
A)the laws of individual nations only.
B)treaties and international organizations only.
C)the laws of individual nations,and treaties and international organizations.
D)none of the choices.
Answer: C
Q3) The basis for the U.S.legal system is the natural law school.
A)True
B)False
Answer: True
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Q1) When state regulations affect interstate commerce,commerce must always yield to the regulations.
A)True
B)False
Answer: False
Q2) The First Amendment protects obscene speech.
A)True
B)False
Answer: False
Q3) Cordial Drinks,Inc.,markets alcoholic beverages.A federal regulation bans the disclosure of the alcohol content of liquor on Cordial's labels and those of other marketers.A court would likely hold this regulation to be
A)an unconstitutional restriction of speech.
B)constitutional under the First Amendment.
C)justified by the need to protect individual rights.
D)necessary to protect national interests.
Answer: A
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Q1) National Consumer Goods Corporation and Paula Purchaser agree to resolve their dispute in arbitration.The arbitrator's decision is called
A)a conclusion of law.
B)a finding of fact.
C)an award.
D)a verdict.
Answer: C
Q2) Marbled Granite Company files a suit against Natural Stone,Inc.,in a Colorado court with general jurisdiction.In a Delaware court with limited jurisdiction,E-Sales Corporation files a suit against First State Bank.The difference between general and limited jurisdiction is
A)the subject matter of the cases that the courts can decide.
B)whether a case is being heard for the first time.
C)whether a suit is filed against a single individual or many people.
D)whether a suit is filed by a citizen or by a business.
Answer: A
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Q1) An Internet service provider cannot be held liable for disseminating defamatory remarks under any circumstances.
A)True
B)False
Q2) After two years of research and an investment of a substantial amount of money,Coast-to-Coast Company (CC)develops a new product that it hopes will produce substantial profits.CC learns that a competitor,National Sales,Inc.,has made and begun to sell a nearly identical product.CC learns from a reliable source that National paid a CC employee to obtain the plans for CC's product when it was in development.What legal recourse does CC have against National
Q3) Kelly is injured when she slips and falls on Layla's sidewalk.To determine whether Layla owed a duty of care to Kelly,Layla is subject to the standard of
A)a realistic person.
B)a reasonable person.
C)a recognizable person.
D)a reliable person.
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Q1) Copyright protection is automatic-registration is not required.
A)True
B)False
Q2) In 2010,Online Marketing Corporation registers its trademark as provided by federal law.After the first renewal,this registration
A)is renewable every ten years.
B)is renewable every twenty years.
C)runs for the life of the corporation plus seventy years.
D)runs forever.
Q3) Phil invents "PhutureNow," new Web site design software,and applies for a patent.If Phil is granted a patent,his invention will be protected
A)for ten years.
B)for twenty years.
C)for the life of the inventor plus seventy years.
D)forever.
Q4) A party who unintentionally uses the trademark of another is not liable for trademark infringement.
A)True
B)False
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Q1) Herb,a computer programmer for Inventory Control Corporation,is arrested in his employer's parking lot on suspicion of larceny.Herb must be informed of his right to A)a trial by jury.
B)punishment.
C)question witnesses.
D)remain silent.
Q2) In relation to Edie's solicitation of investors in a nonexistent business,she is charged with "mail fraud." This requires,among other things,
A)claiming that an item is "in the mail" when it is not.
B)deceiving postal authorities as to the content of an item of mail.
C)depositing items in the postal system without proper postage.
D)mailing or causing someone else to mail a writing.
Q3) A misdemeanor is a crime punishable only by a fine.
A)True
B)False
Q4) The crime of bribery occurs when the bribe is offered even if it is not accepted.
A)True
B)False
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Q1) Courts have no difficulty applying traditional laws to crimes committed in cyberspace.
A)True
B)False
Q2) Julio meets Inez on Hello!,a social networking Web site.Inez asks Julio to pay her expenses to travel to meet him in Center City.He sends the funds,but she does not make the date.This is
A)online embarrassment but not fraud.
B)online date-dumping but not fraud.
C)an online wake-up call but not fraud.
D)online fraud.
Q3) Most cyber crimes are new crimes.
A)True
B)False
Q4) Phishing occurs when a criminal poses as a member of the rock group Phish. A)True
B)False
Q5) The full extent of cyber crime is well known.
A)True
B)False

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Q1) Superior Energy Corporation engages in ethical behavior solely for the purpose of getting good publicity and thereby increasing profits.Superior is
A)acting unethically in its pursuit of publicity.
B)acting unethically in its pursuit of profits.
C)acting unethically in its setting of priorities.
D)not acting unethically.
Q2) An action may be legal but not ethical.
A)True
B)False
Q3) In making business decisions,Glenda,personnel manager for HVAC Maintenance,Inc.,applies his belief that all persons have fundamental rights.This is
A)a religious rule.
B)the categorical imperative.
C)the principle of rights.
D)utilitarianism.
Q4) Some U.S.bribery laws are directed toward accountants.
A)True
B)False
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Q1) Greco promises to buy illegal copies of CDs and DVDs from Fava,who promises to deliver on April 15.These promises are most likely
A)enforceable.
B)valid.
C)void.
D)voidable.
Q2) An offeror is a person who makes an offer. A)True B)False
Q3) An implied-in-fact contract is implied from the conduct of the parties. A)True B)False
Q4) Ed,a businessperson,is a friend of Fran,the owner of a candy store.Every day,Ed spends five minutes in Fran's candy store,looking at the candy and usually buying one or two candy bars.One afternoon,Ed goes into the store,looks at the candy,and picks up a $1 candy bar.Ed waves the candy at Fran without saying a word and walks out.Is there a contract If so,how would it be classified in terms of formation,performance,and enforceability
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Q1) Craig decides to sell his Double-D Ranch in an auction "without reserve." If Craig changes his mind at the auction,he can withdraw his property
A)only before the auctioneer announces that the ranch is sold.
B)only before the auctioneer delivers the deed to the buyer.
C)under no circumstances.
D)within thirty days after the auction.
Q2) A record does not require a signature to have legal effect under the UETA.
A)True
B)False
Q3) The terms of a shrink-wrap agreement may be enforced in the same way as the terms of other contracts.
A)True
B)False
Q4) Under the mailbox rule,no acceptance is valid until it is received.
A)True
B)False
Q5) An acceptance must be unequivocal.
A)True
B)False
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Q1) Under a contract with Bucolic Farms,Agro Excavation,Inc.,begins digging an agricultural pond.In mid-project,Agro asks for $15,000 over the contract price,claiming an increase in the "cost of doing business." Bucolic agrees but later refuses to pay.Their agreement is
A)unenforceable because Agro's performance was a preexisting duty.
B)unenforceable because Bucolic's promise was illusory.
C)enforceable.
D)unenforceable because its performance is unforeseeably difficult.
Q2) In contract law,"consideration" refers to the courtesy that one party shows another in negotiating a deal.
A)True
B)False
Q3) Refer to Fact Pattern 11-5.In Enita's suit against Dag to recover her repair and medical expenses,Enita will most likely recover
A)half the amount to pay those costs over what Dag already paid her.
B)nothing.
C)the estimated amount to pay those costs and any other liability.
D)the exact amount to pay those costs and no more.
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Q1) Jolie signs a contract with Keaton,an unlicensed physician,to perform plastic surgery-a medical procedure.This contract is enforceable by A)Jolie.
B)Jolie's medical insurance company.
C)Keaton.
D)no one.
Q2) Chris,a minor,signs a contract to buy alcoholic beverages for Dine & Drink,his parents' restaurant.The contract is
A)valid but may be disaffirmed.
B)valid but may not be disaffirmed.
C)void as a matter of law.
D)void unless it is also signed by Edie,the manager of Dine & Drink.
Q3) Fernando obtains a consumer loan from Greater Regional Credit Union at an interest rate that exceeds the state's maximum.Greater Regional has A)created a risk for the purpose of assuming it.
B) engaged in a restraint of trade.
C)violated a licensing statute.
D)committed usury.
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Q1) Gregor uses duress to force Honi to agree to pay him for protecting Honi's Coffee Shop against vandalism and destruction.Honi may
A)avoid the contract or choose to carry it out.
B)do nothing once she has agreed to pay.
C)recover from her insurer for a failure to direct her "protection."
D)recover from the local police for a failure to protect her "direction."
Q2) A contract entered into under duress is voidable.
A)True
B)False
Q3) Leyte believes an old comic book he owns has little value,but Milo is convinced it is a valuable collector's item.Leyte sells it to Milo for $10 before learning it is worth $1,000.Leyte can
A)not rescind the contract.
B)rescind the contract on the basis of fraud.
C)rescind the contract on the basis of mistake.
D)rescind the contract on the basis of puffery.
Q4) Scienter refers to a material fact's scientific basis.
A)True
B)False
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Q1) A contract involving property of any kind must be in writing to be enforceable.
A)True
B)False
Q2) Glen and Haj sign a written contract.Glen claims that the parties later orally agreed to modify the contract.Any oral modification is likely not enforceable if it falls under A)the doctrine of promissory estoppel.
B)the "main purpose" exception.
C)the "partial performance" exception.
D)the Statute of Frauds.
Q3) An integrated contract is the final embodiment of the terms of an agreement.
A)True
B)False
Q4) Theo and Uma orally agree on the sale of Theo's Fitness Center to Uma and note the terms on a sheet of the center's letterhead stationery,which only Theo signs.This agreement is most likely enforceable against A)neither Theo nor Uma.
B)Theo and Uma.
C)Theo only.
D)Uma only.
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Q1) Refer to Fact Pattern 15-1.Kip's late attempt to fix the roof is most likely
A)a material breach.
B)complete performance.
C)excused by Lacy's refusal to make further payments.
D)substantial,but not complete,performance.
Q2) Tender is an unconditional offer to perform.
A)True
B)False
Q3) Refer to Fact Pattern 15-3.Under the circumstances,with respect to damages,Chris can
A)bring an action immediately.
B)bring an action only after the contract's two-year term begins.
C)bring an action only after the contract's two-year term ends.
D)do nothing.
Q4) When a condition operates to terminate a party's absolute promise to perform,it is a condition precedent.
A)True
B)False
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Q1) Earl holds 1,000 pounds of perishable fruit in storage for Fresh Food Corporation.Fresh Food does not pay for the storage.Earl sells the fruit to Green Grocers,Inc.This sale represents
A)a breach of contract.
B)a mitigation of damages.
C)rescission and restitution.
D)specific performance.
Q2) Beachside Pools,Inc.,agrees to build a swimming pool for Candy,but fails to build it according to the contract specifications.Candy hires Do-We Fix-It Company to finish the project.Candy may recover from Beachside
A)the contract price less costs of materials and labor.
B)the contract price.
C)the costs needed to complete construction.
D)profits plus the costs incurred up to the time of the breach.
Q3) Compensatory damages are foreseeable damages that arise from a party's breach of a contract.
A)True
B)False
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Q1) An assignment of an insurance policy cannot be prohibited.
A)True
B)False
Q2) A contract can prevent the assignment of the right to receive funds.
A)True
B)False
Q3) A delegation relieves the party making it of the obligation to perform.
A)True
B)False
Q4) Privity of contract refers to the privacy that contracting parties should maintain with respect to their contract.
A)True
B)False
Q5) An unconditional assignment of rights in a contract will extinguish the rights of the assignor.
A)True
B)False
Q6) An assignment is effective only after notice is given to the obligor.
A)True
B)False

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Q1) Under the mirror image rule,an offer must be accepted in its entirety without modification or reservation,or no contract is formed.
A)True
B)False
Q2) Under the UCC,the validity of a contract depends on its price term.
A)True
B)False
Q3) Under the UCC,a merchant who sells one type of good will be considered a merchant for any other type of good that he or she may sell.
A)True
B)False
Q4) Rodeo,S.A.,which is based in Spain,enters into a contract for the sale of seven hydraulic lifts to Tonnage Shipping Company,which is based in the United States.This contract is governed by A)Spanish law.
B)the provisions in the laws of both countries that are similar.
C)Article 2 of the UCC.
D)the United Nations Convention on Contracts for the International Sale of Goods.
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Q1) In the following situations,two parties claim the same goods.Who is most likely to prevail in each circumstance Explain.
(a)Olan steals Phil's television set and sells it to Quincy,an innocent purchaser,for value.Phil learns Quincy has the set and demands its return.
(b)Riley takes his television set for repair to Silky,a merchant who sells new and used television sets.By accident,one of Silky's employees sells the set to Tuna,an innocent purchaser-customer,who takes possession.Riley wants his set back from Tuna.
Q2) Leo buys a boat from his neighbor Moe,who is a fishing guide.Moe agrees to keep the boat in his storage shed until Leo picks it up.A tree falls on Moe's shed and destroys the boat.The loss is suffered by
A)Leo and Moe.
B)Leo only.
C)Moe only.
D)neither Leo nor Moe.
Q3) C.I.F.stands for "cost,insurance,freight."
A)True
B)False
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Q1) Tender must occur at a reasonable hour and in a reasonable manner.
A)True
B)False
Q2) If a lessor's tender of delivery fails to conform to a contract in any way,the lessee can reject the goods.
A)True
B)False
Q3) In general,a buyer's duty to pay for tendered goods becomes absolute before the buyer has had an opportunity to inspect the goods.
A)True
B)False
Q4) A buyer has no right to accept goods that fail in any respect to conform to the terms of a contract in every detail.
A)True
B)False
Q5) A lessee's breach of a contract will usually give the lessor the right to cancel the contract.
A)True
B)False
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Q1) Privity of contract between the plaintiff and the defendant is required to bring a product liability suit based on negligence.
A)True
B)False
Q2) A contract cannot contain both implied and express warranties.
A)True
B)False
Q3) An implied warranty of merchantability arises in every sale or lease by a merchant who deals in goods of the kind sold or leased.
A)True
B)False
Q4) An expression of opinion by a seller will not usually create a warranty.
A)True
B)False
Q5) Any product may be made entirely safe for all consumption.
A)True
B)False
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Q1) Rodeo Ranch's agent Slim is authorized to draw checks on Rodeo Ranch's account in Town Bank.Upper Range Corporation is a Rodeo Ranch supplier.Slim writes a check "pay to the order of Upper Range [signed] Slim," indorses the check in Upper Range's name,and deposits it in his account in Verity Bank.If Verity Bank collects payment,the ultimate party most likely to suffer the loss is A)no one.
B)Rodeo Ranch.
C)Town Bank.
D)Upper Range.
Q2) Vladimir negotiates a bearer instrument to Wendy by A)assignment. B)delivery.
C)presenting it in response to a demand by Wendy. D)promising to pay.
Q3) Transfer warranties attempt to impose liability on the wrongdoer or the party who dealt most immediately with the wrongdoer.
A)True
B)False
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Q1) An oral stop payment order is valid for thirty days.
A)True
B)False
Q2) Simon signs a check "pay to the order of Tilly" drawn on Simon's account in United Bank.Vela forges Tilly's indorsement,First Federal Bank cashes the check,and Vela disappears.United pays First Federal and debits Simon's account.Most likely,the ultimate loss will fall on
A)Simon.
B)Trudy.
C)United Bank.
D)First Federal Bank.
Q3) Liu signs a check "pay to the order of Marv" drawn on Liu's account in National Bank.Liu later orders National not to pay the check,but the bank pays it over Liu's order.Subsequent checks written on Liu's account "bounce." Most likely liable for the costs to Liu is
A)any party to whom a subsequent check was written.
B)Liu.
C)Marv.
D)National.
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Q1) Everyday Loans,Inc.,takes possession of Ferbie's stock in Glade Electronics Corporation to perfect Everyday's security interest in the stock.This is A)after-acquired property.
B)a pledge.
C)a purchase-money security interest.
D)proceeds.
Q2) A security interest may attach to intangible collateral but cannot be perfected. A)True
B)False
Q3) The payment of Nero's debt to Olly is guaranteed by Nero's personal property.Nero is located in Pennsylvania.Olly communicates to the appropriate state official a security agreement that uses only Quality Engineering,the trade name of Nero's business.To perfect Olly's interest,this is A)irrelevant.
B)not sufficient.
C)sufficient if Quality Engineering is a sole proprietorship.
D)sufficient if the trade name is spelled correctly or misspelled slightly.
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Q1) Ross and Sally agree to guarantee Tim's debt.Ross's maximum liability is $30,000,and Sally's is $20,000.Tim owes $20,000 and is in default.Ross pays the creditor the entire amount.In the absence of an agreement to the contrary,Ross can recover from Sally
A)$8,000.
B)$10,000.
C)$20,000.
D)nothing.
Q2) Liu and Midge-Nero's creditors-contract with Nero for the discharge of Nero's liquidated debts on payment of a lesser sum.This is
A)a composition agreement.
B)a subrogation.
C)a suretyship agreement.
D)in violation of most states' laws.
Q3) The usual method of mortgage foreclosure is by a judicial sale of the property subject to the mortgage.
A)True
B)False
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Q1) Kipper files a petition in bankruptcy.Kipper's dischargeable debts include A)domestic-support obligations.
B)student loans unless the lender would suffer undue hardship.
C)unpaid state and federal taxes.
D)unsecured credit-card debt.
Q2) Elise is a trustee for a federal bankruptcy court.Elise's duties include
A)collecting a debtor's property.
B)establishing priority for the payment of unsecured creditors.
C)operating a debtor's business to obtain maximum profit for creditors.
D)submitting to an examination under oath by the creditors.
Q3) In the distribution of the debtor's estate,secured creditors take priority over unsecured creditors.
A)True
B)False
Q4) Mia's voluntary petition for bankruptcy is found to be proper.The order for relief is effective as soon as
A)Mia files the petition.
B)Mia posts a bond to cover the costs of the proceedings.
C)Mia's creditors agree to the terms.
D)the trustee collects and distributes the property of Mia's estate.
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Q1) Dumping is the sale of imported goods at "greater than fair value."
A)True
B)False
Q2) Business Corporation,a U.S.firm,and Comercial,S.A.,a Mexican firm,are parties to a contract that does not specify a choice of law.The governing law is that of A)any third country.
B)Spain.
C)the buyer's place of business.
D)the seller's place of business.
Q3) The Foreign Sovereign Immunities Act spells out the particulars of what constitutes a commercial activity.
A)True
B)False
Q4) Fabiola,or any foreign citizen,can bring a civil suit in a U.S.court for
A)a violation of a treaty of the United States only.
B)a violation of a treaty of the United States or of the law of nations.
C)a violation of the law of nations only.
D)no purpose.
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Q1) A power of attorney is a written document.
A)True
B)False
Q2) If a principal does not ratify an authorized contract,the principal is not bound.
A)True
B)False
Q3) Sela agrees to act on Thom's behalf,subject to Thom's control,and Thom trusts Sela to so act.They set out the terms in a written document,which they both sign.This is A)an agency by agreement.
B)an agency by estoppel.
C)an agency by ratification.
D)not the creation of an agency relationship.
Q4) A fiduciary relationship allows parties to avoid obligations without liability. A)True
B)False
Q5) An agency relationship can be formed without consideration.
A)True
B)False
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Q1) Ethan is seventeen years old.Under the Fair Labor Standards Act,Ethan cannot work
A)during school hours.
B)in a hazardous occupation.
C)more than eighteen hours per week.
D)without a special permit.
Q2) Emma,Frick,Glenda,and Huey are employees of different-sized employers in different industries.A minimum wage must be paid to employees in A)all industries.
B)covered industries only.
C)no industries.
D)small-business industries only.
Q3) Hu,Ivan,and Juana apply to work for King Meatpacking Company.These individuals' identities and eligibility to work must be verified by A)the employer.
B)the individuals.
C)the individuals' countries of origin.
D)the U.S.Citizenship and Immigration Services.
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Q1) Greta is the only female employee in the maintenance department of Hydraulics Inc.Greta's supervisor and co-workers tease and play tricks on her so relentlessly that she feels compelled to quit.This is
A)a constructive discharge on the basis of gender discrimination.
B)a harassing discharge on the basis of treatment discrimination.
C)a voluntary discharge on the basis of impact discrimination.
D)not a discharge or discrimination.
Q2) Gender can be a determining factor in an employer's decision to hire,fire,or promote an employee.
A)True
B)False
Q3) The Civil Rights Act of 1964 prohibits job discrimination on the basis of experience.
A)True
B)False
Q4) An employer can be liable for an employee's sexual harassment of a member of the same gender.
A)True
B)False
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Q1) Jim organized,and owns and operates,Jim's Landscaping Service in the simplest form of business organization.This is
A)a corporation.
B)a limited liability company.
C)a partnership.
D)a sole proprietorship.
Q2) State law determines the duration of a franchise.
A)True
B)False
Q3) Carl sells Direct Marketing Enterprises,a sole proprietorship,to Erv.This is a transfer of A)a license.
B)a trade name.
C)the formula to make a product.
D)the ownership of the business.
Q4) Most franchise agreements provide that termination must be "for cause." A)True
B)False
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Q1) Ben,who runs a livestock breeding business,owes the Circle C Ranch $40,000.Ben agrees to pay the Circle C a percentage of his profits each month until the debt is paid.Because of this agreement,the Circle C is
A)Ben's creditor and partner.
B)Ben's creditor only.
C)Ben's partner only.
D)neither Ben's creditor nor his partner.
Q2) A corporation can be a partner.
A)True
B)False
Q3) For most purposes,the law recognizes a partnership as an aggregate of its members.
A)True B)False
Q4) A partner may not pursue his or her own interest without violating the fiduciary duties that he or she owes to the firm.
A)True
B)False
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Q1) Buyers Club is an incorporated cooperative.Like other incorporated cooperatives,Buyers Club distributes profits to its owners on the basis of
A)the amount of capital they contribute.
B)the degree to which they participate in management.
C)their transactions with the cooperative.
D)the requirements of the state in which it was incorporated.
Q2) Forming a limited liability company requires filing articles of organization in a state office.
A)True
B)False
Q3) The members,managers,and agents of a limited liability company are liable for its obligations by virtue of their status.
A)True
B)False
Q4) Drew is a beneficiary of a business trust.As a beneficiary,Drew is required to
A)distribute the profits and manage the property.
B)distribute the profits only.
C)manage the property only.
D)neither distribute the profits nor manage the property.
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Q1) Finn and Glenda want to form and do business as Hobby Crafts Corporation.A corporation is a legal entity created and recognized by
A)a central federal administrative agency.
B)a city or county clerk's office.
C)an artificial legal person.
D)state law.
Q2) Ruby Red Corporation has six shareholders,four of whom are members of the same family.All of Ruby's shareholders agree in writing to operate without shareholders' meetings.Under the Revised Model Business Corporation Act,this most likely warrants A)no penalties or sanctions.
B)the imposition of a fine on Ruby.
C)the imprisonment of Ruby's shareholders.
D)the piercing of Ruby's corporate veil.
Q3) A foreign corporation is a corporation formed in another country.
A)True
B)False
Q4) A corporation cannot be formed without a profit-making purpose.
A)True
B)False
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Q1) Eve is a director of Fab Stuff Corporation.Without informing Fab,Eve goes into business with GR8 Things,Inc.,in competition with Fab.Eve is liable for breach of A)no duty or rule
B)the business judgment rule.
C)the duty of care.
D)the duty of loyalty.
Q2) Odell,Prince,and Quinn are shareholders of Rite Corporation.Before a shareholders' meeting,they agree in writing to vote their shares together in a certain manner.Usually,such agreements are held to be
A)invalid and unenforceable.
B)oppressive and irresponsible.
C)suspect and voidable.
D)valid and enforceable.
Q3) A corporation cannot refuse a shareholder's request to inspect corporate records.
A)True
B)False
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Q1) Penn files a suit against Roadway Sign Company While the suit is pending,Roadway consolidates with Synchronized Signal Corporation to form Traffic Management,Inc.Now,liability in the suit,if any,rests with A)Traffic.
B)Roadway and Synchronized.
C)Penn.
D)no one.
Q2) A merger between Grain Mills Corporation and Farm2Fork Distribution Inc.can be expressed as Grain Mills + Farm2Fork = A)Farm2Fork.
B)Harvest Dining Corporation.
C)Harvest Dining Corporation + EZ Brewing Company.
D)EZ Brewing Company.
Q3) A corporate takeover is the process of acquiring control over a corporation by the purchase of a substantial number of the voting shares of its stock.
A)True
B)False
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Q1) Flo-Thru Corporation is poised to issue securities that,under the Securities Act of 1933,are "exempt." This means that the securities can be sold
A)on the basis of a material omission or misrepresentation.
B)on the basis of nonpublic information.
C)within any six-month period by certain insiders.
D)without being registered.
Q2) Heavy Hauling,Inc.,is a public company whose shares are traded in the public securities markets.Under the Sarbanes-Oxley Act of 2002,to ensure that Heavy Hauling's financial results are accurate and timely,the firm's senior officers must set up and maintain
A)internal "disclosure controls and procedures."
B)external "release and reveal timetables."
C)personal "peruse and review liability policies."
D)public "information and discussion forums."
Q3) Sales of securities must occur within twenty days of registration.
A)True
B)False
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Q1) The Regulatory Flexibility Act has helped reduce record-keeping burdens for Hometown Gas Company and other small business firms in the area of
A)accounting practices.
B)asset acquisition.
C)hazardous waste management.
D)tax reporting.
Q2) To notify the public of a proposed rule,the Food Safety and Inspection Service,like other federal agencies,publishes the proposal in A)the news media.
B)a trade journal available to members of the industry.
C)the Federal Register.
D)an office memo that employees are free to take home.
Q3) If a business firm refuses to comply with an agency's request to inspect facilities or business records,the agency must defer to the refusal.
A)True
B)False
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Q1) Listen Up! Corporation books and promotes concerts and other entertainment events,for which Listen Up! also sells tickets.In weighing a challenge to Listen Up!'s "monopolistic" ticket prices,a court looks at the relevant geographic market.This encompasses
A)only areas in which Listen Up! does not have monopoly power.
B)only areas in which Listen Up! has monopoly power.
C)the area in which Listen Up! and its competitors sell,and their customers buy,the tickets.
D)the entire United States in all cases.
Q2) International Software,Inc.,conditions the sale of one of its products on Nationwide Office System's agreeing to buy another of International's products.This deal is
A)legal,depending on its purpose and the effect on competition.
B)legal,depending on production and transportation costs.
C)legal under any circumstances.
D)not legal under any circumstances.
Q3) U.S.firms may be subject to other nations' antitrust laws.
A)True
B)False
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Q1) Counteradvertising requires a company to advertise the products of its competitor to counter its own false claims.
A)True
B)False
Q2) A consumer who receives unsolicited merchandise must return it within three business days.
A)True
B)False
Q3) Advertising will not be deemed deceptive so long as it appears to be based on factual evidence,even if it is not.
A)True
B)False
Q4) Steel Tool Company makes and sells tools.One of the tools is believed to be hazardous.The appropriate government agency may require Steel to A)export the tool and sell it only abroad.
B)increase the price to cover the cost of any injuries or damage.
C)reduce the price to indicate the hazard to consumers.
D)remove the tool from the market.
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Q1) Fruitful Garden Company makes and sells pesticides.For the pesticides to remain on the market,the acceptable level of risk to people of developing cancer from exposure to the products is
A)one in a hundred.
B)one in a million.
C)one in a thousand.
D)zero.
Q2) The Environmental Protection Agency can regulate a substance that poses an imminent hazard but cannot prohibit the use of a substance altogether.
A)True
B)False
Q3) Under the Marine Protection,Research,and Sanctuaries Act (the Ocean Dumping Act),Bayside Chemical Company may dump its chemical waste into the ocean
A)after obtaining a permit.
B)before obtaining a permit.
C)without a permit.
D)not at all.
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Q1) In a few states,communications between an accountant and his or her client are privileged.
A)True
B)False
Q2) Estes,an accountant,contracts to perform services for Frasier.In performing those services,Estes uncovers a suspicious financial transaction.Estes is most likely not liable if he
A)acted negligently in failing to discover the transaction sooner.
B)conceals the discovery and otherwise finishes the work.
C)investigates and reports the discovery to Frasier.
D)obtains restitution from the perpetrator without Frasier's knowledge.
Q3) An opinion that disclaims any liability for false or misleading financial statements is too general.
A)True
B)False
Q4) Under the Securities Exchange Act of 1934,an accountant may be liable for a misleading statement that affects the price of a security even if the accountant acted in good faith.
A)True
B)False

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Q1) The most common way to acquire personal property is to "capture" it.
A)True
B)False
Q2) A bailment must be in writing to be valid.
A)True
B)False
Q3) In an ordinary bailment,a bailee has the right to limit his or her liability.
A)True
B)False
Q4) Estray statutes determine ownership rights in fungible goods that have been "strayed."
A)True
B)False
Q5) Tab stores video equipment with U-Store-It,Inc.,under a contract that excuses the warehouser from liability for any damage.A fire due to U-Store-It's negligence destroys the equipment.The loss is most likely to be imposed on
A)neither Tab nor U-Store-It.
B)Tab and U-Store-It.
C)Tab only.
D)U-Store-It only.
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Q1) Hobby Farms,Inc.,owns rural property that it leases to various tenants,including Ira.Ira's transfer of his entire interest in the leased property to a Jason is A)an assignment.
B)an eviction.
C)a right of entry.
D)a sublease.
Q2) Consumer Shops,Inc.,signs a lease for a storefront owned by Downtown Building Company.Unlike a purchaser of real property,Consumer Shops
A)acquires only temporary possession of the premises.
B)enjoys exclusive possession of the premises.
C)holds only temporary title to the premises.
D)retains temporary,exclusive possession and title to the premises.
Q3) Tyro has the right to drive across Ula's land,which is next to Tyro's property,to reach an access road.Tyro's right is A)an easement appurtenant.
B)an easement in gross.
C)a profit appurtenant.
D)a profit in gross.
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Q1) Eighty-year-old Clark exhibits confusion,forgetfulness,and disorientation.Dave,Clark's doctor,believes that the symptoms indicate dementia.Elsa,who has significant contact with Clark,believes that he is in a state of mental decline.These facts indicate A)an urgency that Clark distribute his assets.
B)Clark's lack of capacity.
C)Dave's misdiagnosis.
D)Elsa's intent to take advantage of Clark.
Q2) A coinsurance clause provides that two or more people will be covered by the same life insurance policy.
A)True
B)False
Q3) Insurance is classified according to the amount of the payment on a claim.
A)True
B)False
Q4) Because insurance law follows contract law,bad faith tort actions against insurers are not allowed.
A)True
B)False
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