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A close relative is not regarded as third party for recovery against emotional distress.  True  False 2 points   

1.      A close relative is not regarded as third party for recovery against emotional distress.



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2 points


Question 2

1.      “One who waits too long to complain has indicated satisfaction with the agreement despite the initial lack of true consent” is the idea behind the doctrine of:


2 points


Question 3

1.      A contract that is impliedly accepted by doing something that objectively indicates agreement can be considered as a bilateral contract.



2 points


Question 4

1.      Fernando is the owner of Pick Food Restaurant. He makes an oral agreement with Purple Lotus Works for the design and production of 5,000 unique custom-made dinner plates with the logo of Pick Food Restaurant on them. Purple Lotus reworks its production schedule and creates dies to add Pick Food Restaurant’s logo in the designer plates. A week later, Fernando calls Purple Lotus and says that he no longer wants the plates and calls off the deal. In this scenario, it is most likely that:

the parties’ agreement is at Fernando’s disposal because he is the customer.
Purple Lotus is protected by the statute of frauds exception for specially-manufactured goods.
the parties’ agreement is not valid since it was only an oral agreement.
the agreement between Fernando and Purple Lotus is unenforceable and Fernando is protected under the statute of frauds.

2 points


Question 5

1.      Both federal and state laws spell out the specifics of cybercrime. Which of the following statements is true of these laws?

Only an individual may face liability based on the use of electronic communication; corporations are out of their purview.
Altering data stored in another person’s computer is not considered illegal.
A corporation is not liable for the online activities of its employees.
Accessing the services of a commercial service provider without paying fees is a crime.

2 points


Question 6

1.      As used in the Uniform Commercial Code (UCC), the concept “reasonable”:

is a practical standard used to gauge what people really do in the marketplace.
is a theoretical concept based on the “reasonable person standard” of tort law.
refers to the capacity to contract.
refers to what a reasonable person would do in the marketplace.

2 points


Question 7

1.      A petition for Chapter 13 proceedings can be initiated by the:

voluntary petition of a debtor.
involuntary petition of creditors.
secured creditors.

2 points


Question 8

1.      If a buyer accepts defective goods and wants to hold the seller liable, the buyer must give the seller notice of the defect:

only in writing.
within a reasonable time after detecting the defect.
within the same financial year of the purchase.
when the contract is made.

2 points


Question 9

1.      Commercial frustration:

is very similar to impracticability.
occurs when the event is foreseeable.
excuses performance when events occur before the formation of the contract.
occurs when the promisor expressly assumes the risk that the event has occurred.

2 points


Question 10

1.      A _____ is designed to reach things belonging to the debtor that are in the hands of third parties.

writ of quo warranto
writ of garnishment
writ of certiorari
writ of mandamus

2 points


Question 11

1.      Fungible goods are:

goods which are packaged and labeled separately (such as units which come in cartons or cases).
mixed goods that are identical and cannot be separated (such as grain or coal).
perishable goods which have been improperly packaged or which have damaged packaging and are prone to contamination.
goods which conform to any promises or statements of fact made on the container or label.

2 points


Question 12

1.      Artisans who retain goods are liable for conversion if they:

return the goods before the debt has been paid.
keep the goods without the right to a lien.
lose the goods to the debtor in a fraudulent manner.
sell the goods for the unpaid charges.

2 points


Question 13

1.      Common law arises when:

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

2 points


Question 14

1.      Blue laws are uniform across all states in the country.



2 points


Question 15

1.      Erik filed a case in a municipal court against Leela for a minor criminal violation. Dissatisfied with the decision of the court, Erik can now appeal the case in a court of record.



2 points


Question 16

1.      Consideration can have legal value if the promisee:

does not involve in an act in the case of unilateral contracts.
does something he or she had no prior legal duty to do in exchange for the promisor’s promise.
agrees to do something he or she has a legal right to do in exchange for the promisor’s promise.
does not give up something in exchange for the promise made by the promisor.

2 points


Question 17

1.      A party that enters into an illegal contract can recover the considerations given if the party:

reports the illegal act to law enforcement after committing it.
rescinds the contract before any illegal act has been performed.
demonstrates an unequal bargain due to the illegal contract.
rescinds the contract immediately after the illegal act has been performed.

2 points


Question 18

1.      A common defense to the tort of interference with contract is:

lack of capacity.
probable cause.
inducing a breach of contract.

2 points


Question 19

1.      A building that deviates slightly from the contract’s specifications does not qualify as substantial performance.



2 points


Question 20

1.      A counteroffer:

impliedly rejects an offer.
does not affect the material terms of the contract.
is a mirror-image of the offer.
is an inquiry into the terms of the offer.

2 points


Question 21

1.      A contract is implied when the parties directly state its terms at the time the contract is formed.



2 points


Question 22

1.      A consumer who misuses a product:

can hold the manufacturer liable even if the manufacturer uses a defense of strict product liability by knowingly assuming an obvious risk of injury by the consumer.
may not recover under the theory of strict liability.
will recover under the theory of strict liability if the misuse was not foreseeable.
cannot hold the manufacturer liable for not designing the product so that it could not be altered even if the danger it created was foreseeable.

2 points


Question 23

1.      A conditional sales contract is an example of a(n):

chattel paper.
document of title.
negotiable instrument.
investment property.

2 points


Question 24

1.      Assignments of future wages are not effective because:

they involve personal relationships.
they are contrary to public policy.
they materially alter the duties of the promisor.
they involve personal rights.

2 points


Question 25

1.      Bella is Ming’s babysitter. She takes Ming to the amusement park for a roller coaster ride. Due to the intensity of the ride, Ming, who has an especially weak heart, dies of a heart attack during the ride. Which of the following concepts best fits Bella’s act of negligence?

Proximate cause
Negligence per se
Breach of duty
Principles of causation

2 points


Question 26

1.      If Gwen hands Lisa a detailed offer for the purchase of Lisa’s pottery wheel and Lisa signs the offer without changing any of its terms, the parties have created a:

bilateral contract.
contingent contract.
unilateral contract.
multilateral contract.

2 points


Question 27

1.      A buyer is considered to have accepted a whole commercial unit of goods if:

the buyer pays for the goods before inspecting them.
the buyer accepts any part of the commercial unit.
the seller delivers even part of the commercial unit.
the seller delivers all the goods in the commercial unit.

2 points


Question 28

1.      A clothing store has opened a credit account in which Judy, a college student, gets Alice, her older sister, to agree to pay the amount owed on the account if Judy fails to do so. Which of the following statements is true of this scenario?

Judy is the obligor, and she is secondarily liable to the clothing store.
Alice is the guarantor, and she is primarily liable to make the payments.
Judy is the obligor, and she is contractually liable to the guarantor.
Alice is the guarantor, and Alice’s contract must be in writing to be enforceable.

2 points


Question 29

1.      Beck tells his mom that he is thinking of selling his vintage coupe to his neighbor, Sam, for $100. Beck’s mom calls Sam and tells him about her conversation with Beck. Sam then calls Beck and tells him that he accepts his offer. Under these circumstances, _____.

this is a contract
the offer has been conditionally tendered
the offer has not been communicated
the offer violates the UCC’s rule against third-party interveners in quasi contracts

2 points


Question 30

1.      According to the Fair Credit Billing Act (FCBA), if the credit card holder thinks that the card issuer has made an error on the statement, he has _____.

90 days from the time the card was issued to report, in writing, the error
30 days from the time the statement was mailed to report the error
120 days from the time the statement was mailed to report, in writing or orally, the error
60 days from the time the statement was mailed to report, in writing, the error

2 points


Question 31

1.      A buyer is _____ if he cannot pay his bills when they become due.


2 points


Question 32

1.      Blackhawk Corporation contracted to sell Greeneye Corporation some materials that Greeneye needed to fulfill a contract it had with a third party. Knowing that Greeneye was in desperate need of the materials, Blackhawk called Greeneye the day before delivery was due and threatened to withhold delivery unless Greeneye agreed to pay a higher price. Greeneye could not get the materials elsewhere and would suffer a huge financial loss without them, so it agreed to pay the higher price. Greeneye later asserts that its promise to pay the higher price is unenforceable because it was the product of duress. Which of the following statements is true of this situation?

Blackhawk only exercised superior bargaining powers and therefore is not at fault.
Under modern contract law, Blackhawk’s threat to cause Greeneye economic harm could be considered duress and the contract may be considered voidable.
Blackhawk’s threat could not be considered duress because they had a legal right to seek a higher price for its goods.
Under modern contract law, Blackhawk’s threat to cause Greeneye economic harm may be unintentional tort, but not duress.

2 points


Question 33

1.      A corporate manager looking for ethical guidance that neither the law nor social norms accounts for must rely on:

a strategy that will maximize profits.
his or her individual conscience.
the advice of other managers.
his or her system of delegation to subordinates.

2 points


Question 34

1.      Corporations have long been considered “persons” protected by some constitutional guaranties.



2 points


Question 35

1.      A young American woman named Monica killed her illegitimate child and buried the body in her backyard. Many years later, Monica called Claudio, the local policeman, and told him the entire story over the telephone before he could utter a single word. She then told him that voices from her backyard told her to confess to the crime. Monica told the police where to dig, and they unearthed a metal box containing the skeletal remains of a baby in her yard. Which of the following statements would be true of this scenario?

The remains cannot be used as evidence against Monica because this would violate her Fifth Amendment privilege against self-incrimination.
Insanity on the part of a criminal defendant can affect a criminal trial.
The remains cannot be used as evidence against Monica because Claudio did not inform her of her right to remain silent before she told him her story.
Juries are often welcoming toward insanity pleas, because they fear that innocent defendants might be punished.

2 points


Question 36

1.      Identify the statement that is true of perfection by attachment of consumer goods.

If the secured party filed a financing statement for the collateral, the new buyer takes the collateral free of any security interest.
If the goods are to become fixtures, the creditor can get full protection through perfection by attachment.
If the new buyer buys from the debtor without knowledge of the interest, for value, and for personal use, the new buyer takes free of the security interest.
If the consumer goods are motor vehicles for which the state issues certificates of title, perfection by attachment to the vehicle is effective.

2 points


Question 37

1.      A liquidated debt is one that is due and certain, which means that there is no dispute about the existence or the amount of the debt.



2 points


Question 38

1.      If a person has been discriminated by the government on the basis of the fact that he or she is an illegitimate child, the regulation will be evaluated under _____.

strict scrutiny
rational analysis
intermediate scrutiny
the Takings Clause

2 points


Question 39

1.      Compensatory damages are also known as:

actual damages.
punitive damages.
nominal damages.
statutory damages.

2 points


Question 40

1.      A minor can disaffirm a contract if:

he or she has not ratified the contract on reaching majority.
the contract is for real estate.
he or she has given a false statement about his or her age.
he or she has not returned the adult to status quo first.

2 points


Question 41

1.      Campus Bus Service entered into a contract with Smith Bus Company to purchase 10 buses. One week before Campus Bus was scheduled to receive the buses, a fire destroyed Smith’s warehouse and the buses inside. As a result, Campus Bus had to purchase its buses at a slightly higher cost from another manufacturer. Campus Bus sues Smith Bus for damages for breach of contract under these circumstances. Assume Campus Bus did not bear the risk of loss of the goods under the contract. In this scenario, _____.

Smith Bus should be excused from performance under the clause for the rights on improper delivery
Smith Bus should not be excused from performance because it did not act in good faith
Smith Bus should be excused from performance under the test of commercial impracticability
Smith Bus can exercise its right of anticipatory repudiation

2 points


Question 42

1.      If a creditor owns a debt that is provable and nondischargeable, he or she _____.

may participate in the distribution of the debtor’s estate
can recover only the money provided by the bankrupt’s discharge
must not enter into any voluntary agreement with the debtor for discharge of the debt
needs court approval for reaffirmation of loans

2 points


Question 43

1.      A useful tool for understanding and persuading that combines basic analytical thinking with recognition of the special features of the underlying legal system is _____.

sociological jurisprudence
legal positivism
legal reasoning
analytical reasoning

2 points


Question 44

1.      A buyer has a retail store in Florida and the seller is a manufacturer in California. If the buyer orders goods from the seller and the goods are shipped “FOB Florida,” which of the following statements is true?

The seller bears the expense and risk of delivering the goods to Florida.
Neither the seller nor the buyer bears the risk of delivering the goods as the goods are insured.
The seller is allowed to charge a nominal fee for delivering the goods.
The buyer bears the risk of loss as he is responsible for taking possession of the goods.

2 points


Question 45

1.      Corporate codes of ethical conduct:

effectively deter unethical behavior.
are sometimes viewed as thinly disguised attempts to mislead the public into thinking that the company behaves ethically.
accurately reflect the values of society.
tend to expressly publish policies that deal directly with corruption to avert legal measures that might impose severe constraints.

2 points


Question 46

1.      Arbitration of disputes under the purview of “lemon laws” under state statute is:

not required by most statutes.
usually binding on the consumer, not the manufacturer.
usually binding on the manufacturer, not the consumer.
not binding on either the manufacturer or the consumer.

2 points


Question 47

1.      Beck Inc., a food processing company in Chicago, placed a phone order with Gary, a vineyard owner in California, for a certain quantity of perishable products. The shipping term was “CIF” with payment to be made on delivery. Gary contracted with a carrier to deliver the goods to Beck Inc. However, he neglected to ship the goods under refrigeration. The goods were loaded on a non-refrigerated boxcar and as a result the product was spoiled when it reached Chicago. Under these circumstances, _____.

neither Gary nor Beck Inc. bears the risk of loss as the goods are insured
Beck Inc. bears the risk of loss because, under a CIF shipment, the buyer has to bear all risks
Beck Inc. bears the risk of loss as the contract did not mention that Gary will guarantee their delivery
Gary bears the risk of loss because, under a CIF shipment, the seller bears the expense and the risk of loading the goods

2 points


Question 48

1.      Chuck Olson, aged 16, buys a used car from Bobby Duncan Used Cars Center on September 15, 2006. Olson agrees to pay $200 a month for 12 months. A month after the purchase, Olson is involved in an accident that wrecks the car. He immediately calls Duncan Cars and informs them that he is disaffirming the contract. According to traditional common laws, which of the following is most likely to be true?

Olson does not have a duty to place Duncan in status quo ante.
Olson can ask Duncan to pay for the damages as he hasn’t made the full payment for the car.
Olson has to pay for the damages and then return the car to Duncan.
Olson can successfully press charges and force Duncan to take care of the damages caused to the car.

2 points


Question 49

1.      A donee beneficiary:

is a third-party beneficiary to whom a gift of the contracted performance is given.
is a third-party beneficiary who is no longer a part of an agreement.
is a third-party beneficiary who incidentally benefits from a contract.
is a third party beneficiary who cannot recover the value of the promised performance.

2 points


Question 50

1.      A common law lien essentially includes:

possession by the court.
a debt to the court created by the failure of a surety to pay a creditor.
possession by the improver as well as debt created by the improvement.
an improvement which does not become a part of the property.

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