Business Law
Exam Review
Course Introduction
Business Law provides an essential introduction to the legal environment in which businesses operate, covering topics such as contract law, agency, sales, negotiable instruments, employment law, and the regulation of business organizations. Students examine the structure of the legal system, explore the impact of laws and regulations on day-to-day business operations, and analyze real-world case studies to develop an understanding of legal reasoning and its application in business decision-making. This course equips students with the foundational knowledge necessary to recognize legal issues, mitigate risk, and navigate the complex legal challenges facing modern businesses.
Recommended Textbook
Business Law Today Standard Text and Summarized Cases 10th Edition by Roger LeRoy Miller
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Chapter 1: The Legal Environment
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Sample Questions
Q1) Jane enters into a contract with Jill to provide 100 roses for a dinner party. Jane fails to deliver the roses. Jill initiates a suit against Jane, asking the court to order Jane to deliver the roses. Jill is
A) the plaintiff.
B) the defendant.
C) the binding authority.
D) the persuasive authority.
Answer: A
Q2) In order to truly understand our legal system, it is important to understand the origins of the common law tradition.
A)True
B)False
Answer: True
Q3) Damages are a remedy at law.
A)True
B)False
Answer: True
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Chapter 2: Constitutional Law
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Q1) In a country with a federal form of government, the national government and the states share sovereign power.
A)True
B)False
Answer: True
Q2) Adult Shoppe in Bay City sells a variety of publications, including child pornography. Bay City enacts an ordinance prohibiting the sale of such materials. This ordinance is most likely
A) an invalid restriction of individuals' privacy.
B) an unconstitutional restriction of speech.
C) a violation of adults' rights to enjoy certain privileges.
D) constitutional under the First Amendment.
Answer: D
Q3) Because the Constitution does not specifically a right to privacy, this right is denied to people.
A)True
B)False
Answer: False
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Chapter 3: Courts and Alternative Dispute Resolution
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Q1) Drummond wants to make a federal case out of his dispute with Elena. Federal cases originate in
A) federal courts of appeals.
B) federal district courts.
C) state trial courts.
D) the United States Supreme Court.
Answer: B
Q2) A closing argument is a statement by a party that results in a summary judgment in that party's favor.
A)True
B)False
Answer: False
Q3) Arbitration is always legally binding.
A)True
B)False
Answer: False
Q4) A court's review of an arbitrator's award may be restricted.
A)True
B)False
Answer: True
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Chapter 4: Torts and Cyber Torts
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Q1) Lizzie, a clerk at a Movies Unlimited store, takes a DVD player from the store without permission. Lizzie is liable for A) appropriation.
B) benefiting an employee.
C) conversion.
D) wrongful interference with a business relationship.
Q2) Richard is an avid baseball fan and attends baseball games whenever he can. Richard considers himself an expert on all things, including risks, related to baseball. One day a ball flies into the stands, hits Richard in the head and seriously injures him. Richard can probably successfully win a case against the sports stadium based on A) negligence.
B) breach of duty of care.
C) defamation.
D) none of the choices.
Q3) Fraud occurs only when there is reliance on a statement of opinion.
A)True B)False
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Chapter 5: Intellectual Property and Internet Law
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Sample Questions
Q1) RiteMade Machinery, Inc., designs, makes, and sells a drill press. Steel Equipment Company copies the design without RiteMade's permission. Steel's conduct is actionable provided that
A) consumers are confused.
B) Steel's conduct is intentional.
C) Steel's conduct reduces the value of RiteMade's design.
D) RiteMade's design is patented.
Q2) Stormclouds Inc. makes and markets its U.S. patented Tempest Tablet in the United States. Squalls Ltd., a Chinese firm, begins making and marketing the same product in China as Outburst Pad without Stormclouds's permission. Squalls is
A) not guilty of patent infringement.
B) guilty of patent infringement.
C) guilty of trademark infringement.
D) in violation of the America Invents Act.
Q3) A patent and a copyright are examples of intellectual property, but a trademark is not an example of intellectual property.
A)True
B)False
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Chapter 6: Criminal Law and Cyber Crime
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Sample Questions
Q1) Counterfeiting is robbery.
A)True
B)False
Q2) Jared is arrested and found guilty of a misdemeanor. His punishment will not include
A) imprisonment for six months.
B) a fine of $100.
C) death.
D) imprisonment for six months and a fine of $500.
Q3) Constitutional safeguards protect the rights of individuals against federal government actions.
A)True
B)False
Q4) The crime of bribery occurs when the bribe is offered.
A)True
B)False
Q5) All persons who are arrested have the constitutional right to remain silent.
A)True
B)False
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Chapter 7: Ethics and Business Decision Making
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Q1) Business ethics is not more complicated than personal ethics.
A)True
B)False
Q2) Few companies provide any kind of support such as ethical training programs and seminars to make their ethical codes more effective.
A)True
B)False
Q3) Lyle, vice-president of sales for Mi-T Electric, Inc., adheres to Judeo-Christian religious ethical standards. With respect to their application, these standards are
A) absolute.
B) analytical.
C) discretionary.
D) utilitarian.
Q4) Obeying the law does not necessarily fulfill all ethical obligations.
A)True
B)False
Q5) A business firm can sometimes predict whether a given action is legal.
A)True
B)False
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Chapter 8: International Law in a Global Economy
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Sample Questions
Q1) Restrictions on imports may include quotas.
A)True
B)False
Q2) Bulbous Cordials, Inc., a U.S. firm, enters into an agreement with Columbiana Cacao, S.A., a South American firm, to fix the price of dark chocolate in the U.S. market. If the agreement is a per se violation of U.S. antitrust laws, a U.S. court could exercise jurisdiction over
A) Bulbous Cordials and Columbiana Cacao.
B) Bulbous Cordials only.
C) Columbiana Cacao only.
D) neither Bulbous Cordials nor Columbiana Cacao.
Q3) Miranda is a U.S. citizen working in Europe for Tourist Vacations, Inc., a U.S. travel agency. Tourist fires Miranda for reasons that she believes violate U.S. antidiscrimination laws. Those laws apply
A) extraterritorially.
B) only to signatories of the North American Free Trade Agreement.
C) only to members of the World Trade Organization.
D) only within U.S. borders.
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Chapter 9: Nature and Classification
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Q1) Jack promises to buy Lizette's used textbook for $60. Jack is A) an executor.
B) an offeree.
C) a promisee.
D) a promisor.
Q2) Tania promises to buy Saki's handheld video game-player for $40. Saki is A) an executee.
B) an offeror.
C) a promisee.
D) a promisor.
Q3) If a voidable contract is avoided, the parties to it are released from it.
A)True
B)False
Q4) A quasi contract is not a true contract.
A)True
B)False
Q5) One purpose of quasi contracts is to prevent unjust enrichment of one party at the expense of another.
A)True
B)False
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Chapter 9: Offer and Acceptance
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Sample Questions
Q1) Beth goes to Dr. Carlton for surgery. Carlton says that Beth should be fully healed within a week. Beth is not healed within a week. With respect to breach of contract, Carlton is
A) liable.
B) not liable, because surgery is not a proper subject for a contract.
C) not liable, because the statement was an opinion.
D) not liable, but Beth is excused from paying Carlton.
Q2) A shrink-wrap agreement is an agreement whose terms are expressed inside a box in which the goods are packaged.
A)True
B)False
Q3) Fresh Fast Service, Inc., offers to deliver produce to Growers' Market's customers for a certain price. Fresh's intent to extend a serious offer to Growers' Market is determined by reference to
A) Fresh's assumptions.
B) Fresh's beliefs.
C) Fresh's intentions.
D) what a reasonable person in Growers' position would conclude Fresh's words and actions meant.
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Page 12
Chapter 11: Consideration, Capacity, and Legality
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Sample Questions
Q1) Colleen is intoxicated, but still mentally capable of understanding the consequences of her actions when she signs a contract to sell the rights to her latest phone app design to Addie. The contract is
A) enforceable only if Colleen does not attempt to disaffirm it.
B) enforceable even if Colleen attempts to disaffirm it.
C) unenforceable if Addie attempts to disaffirm it.
D) enforceable only if Addie does not attempt to disaffirm it.
Q2) Doug agrees with Elinor to sell methamphetamine to patrons of Elinor's nightclub Garden of Eden for 25 percent of the take. Doug sells the drugs but keeps all of the money. Elinor can
A) recover her share of the money only if she did not aid in the crime.
B) not enforce the deal.
C) recover the total amount of the sales.
D) recover her costs but none of the illegal profit.
Q3) A person who enters into a contract when he or she is intoxicated can void the contract under any circumstances.
A)True
B)False
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Chapter 12: Defenses to Contract Enforceability
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Sample Questions
Q1) Chloe files a suit against Digital Associates, Inc. (DAI), to enforce a contract. The only written evidence of the contract is a memo on DAI's letterhead as signed by a DAI officer in its files. The contract can be enforced if the memo includes
A) a correct title, such as "Chloe-DAI Contract."
B) all essential terms.
C) a statement of the consideration.
D) the parties' addresses.
Q2) A primary obligation is created when a party agrees to pay for something on the condition that a certain other party does not make the payment.
A)True
B)False
Q3) Seth offers to buy a house from Tia for less than Tia paid for it, stating that he would "hate to see anything bad happen to Tia or her house." Tia agrees to sell. Regarding this agreement, a court would likely
A) enforce it.
B) not enforce it.
C) reform it to reflect the true market value of the property.
D) order the parties to renegotiate the price.
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Chapter 13: Third Party Rights and Discharge
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Q1) Jayson and MaryElise enter into a contract. Jayson agrees to mow MaryElise's yard every week for the summer. MaryElise is the A) obligor.
B) obligee.
C) assignee.
D) assignor.
Q2) If one party's performance is substantial, the other party's duty to perform remains absolute.
A)True
B)False
Q3) A delegator is a party who transfers his or her obligation under a contract to another party.
A)True
B)False
Q4) No contract can prohibit delegation of the duties of the contract.
A)True
B)False
Q5) Only personal contracts can be discharged by agreement of the parties. A)True
B)False
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Chapter 14: Breach and Remedies
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Sample Questions
Q1) 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.
Q2) Cooper's Brakes, Inc., enters into a contract with Byron's Service to fix Cooper's hydraulic equipment. Byron delays the repair for three days, but is not aware that Cooper loses a certain percentage of profit each day the equipment is out of service. Cooper is most likely to be awarded
A) compensatory damages.
B) nominal damages.
C) punitive damages.
D) no damages.
Q3) Whether a contract's limitation-of-liability clause will be enforced depends on the type of breach that the clause excuses.
A)True
B)False
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Page 16
Chapter 15: The Formation of Sales and Lease Contracts
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Sample Questions
Q1) Nature's Products, Inc., sends its standard order form to Interbusiness Distribution Corporation (IDC) to evidence a sale of packing materials. IDC responds with its own standard purchase order form. Additional terms in the purchase order automatically become part of the contract unless
A) the terms materially alter the original contract.
B) the original offer expressly required acceptance of its terms.
C) the offeror objects to the new terms within a reasonable time.
D) any of the choices.
Q2) The UCC imposes some different rules on merchants.
A)True
B)False
Q3) If a seller is not a merchant, and the goods are not to be moved, the risk of loss passes to a buyer on tender of delivery.
A)True
B)False
Q4) The right to cure is the right of a party who tenders nonconforming performance to correct his or her performance within the contract period.
A)True
B)False
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Chapter 16: Performance and Breach of Sales Lease Contracts
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Q1) Food Packaging, Inc., agrees to sell 50,000 6-ounce yogurt containers to Golden Dairy Company. Food can obtain only 20,000 of the 6-ounce containers, but also ships 30,000 more expensive 8-ounce containers for the same price. Under these circumstances, Golden
A) cannot reject delivery, and Food cannot later replace the containers.
B) cannot reject delivery, but Food can later replace the containers.
C) may reject delivery, and notice to Golden of Food's intent to cure will give Food a reasonable time to replace the containers.
D) may reject delivery, but Food cannot later replace the containers.
Q2) Under the perfect tender rule, if tender is not perfect, the seller is obligated to try again.
A)True
B)False
Q3) Once the seller has tendered delivery, the buyer is obligated to accept the goods and pay for them.
A)True
B)False
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Page 18
Chapter 17: Warranties and Product Liability
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Q1) Jean buys a bike from Mike's Bike Shop. She wants to make sure that there is a warranty of title. Jean
A) does not need to do anything because warranties of title arise automatically in most sales contracts.
B) must request a written warranty of title.
C) must request an oral warranty of title.
D) must request both a written and an oral warranty of title.
Q2) Jack's Pet Houses, Inc. sells shelters for animals under "limited" warranties. Under the Magnuson-Moss Warranty Act, this means that the warranties on shelters from Jack's Pet Houses
A) do not meet one of the requirements of a full warranty.
B) are only good for one year.
C) are illegal.
D) are oral.
Q3) A seller does not have to use words such as "warrant" to make an express warranty.
A)True B)False
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19
Chapter 18: Negotiable Instruments: Transferability Liability
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Q1) A personal check cannot be a negotiable instrument.
A)True
B)False
Q2) Primary liability is unconditional.
A)True
B)False
Q3) A holder takes an instrument for value if he or she gives a check as payment for it.
A)True
B)False
Q4) Wilson buys a promissory note from Oli. The note is due on December 5. December 5 is a Sunday. The note is
A) payable anytime the week of December 6.
B) payable December 6.
C) payable on December 5 only.
D) defective.
Q5) Universal defenses are good against all holders except HDCs and holders through HDCs.
A)True
B)False
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Chapter 19: Checks and Banking in the Digital Age
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Q1) Jackie inserts a debit card issued by her bank into a machine and keys in her personal identification number. She is then able to withdraw $500 in cash. Jackie is using A) an automated teller machine.
B) a point-of-sale system.
C) a direct deposit system.
D) an Internet payment system.
Q2) A written stop payment order is valid for only thirty days.
A)True
B)False
Q3) Albert buys a surround sound system from his neighbor George at George's garage sale. Albert writes George a check for $250 for the sound system. George is A) the certifier.
B) the drawee.
C) the drawer.
D) the payee.
Q4) Today, most checks are processed manually.
A)True
B)False
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21
Chapter 20: Secured Transactions
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Q1) Proceeds from the disposition of collateral after default on the underlying debt are distributed equally among lienholders who have made demands.
A)True
B)False
Q2) Middling Credit Corporation asks Little Supply Company to agree to a security agreement that provides for coverage of the proceeds from the sale of after-acquired property. This is
A) a first-in-time rule.
B) a floating lien.
C) a funds guaranty.
D) in violation of secured transactions law.
Q3) To take goods free of any security interest, a buyer in the ordinary course of business cannot know about the interest.
A)True
B)False
Q4) A floating lien cannot apply to the proceeds of a sale of after-acquired property.
A)True
B)False
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Page 22
Chapter 21: Creditors Rights and Bankruptcy
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Q1) Dina asks Edie to co-sign a credit application so that she can borrow money and buy a truck from First Street Motors. If, after the loan agreement is signed, Dina agrees to a higher rate of interest without telling Edie, then Edie is A) discharged from the agreement.
B) liable at the higher rate of interest.
C) liable at the lower rate of interest.
D) liable for the principal only.
Q2) A petition for a discharge in bankruptcy under Chapter 11 may be filed by A) Reliable Insurance Company.
B) Pacific Mountain Railroad.
C) Solid State Bank.
D) Valley Credit Union.
Q3) Norma Jean files for Chapter 7 bankruptcy. She turns her assets over to Addie, who sells the assets and then distributes the proceeds to Norma Jean's creditors. Addie is a A) creditor.
B) federal judge.
C) bankruptcy trustee.
D) debtor.
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Chapter 22: Mortgages Foreclosures After the Recession
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Q1) The loan that a lender provides to enable a borrower to purchase real property is a mortgage.
A)True
B)False
Q2) A lender can make a higher-priced mortgage loan based on the value of the consumer's home without verifying the consumer's other credit obligations.
A)True
B)False
Q3) Shade Tree Lending Corporation advertises loans as fixed-rate loans but, in fact, their rates or payment amounts will change. This is
A) a legal and ethical-but morally arguable-financial ruse.
B) a legal-but unethical-business practice.
C) a necessary tactic to generate a profitable loan in today's market.
D) a violation of the law.
Q4) Federal law encourages private lenders to modify mortgages so as to lower the monthly payments of borrowers who are in default.
A)True
B)False
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Chapter 23: Agency Relationships in Business
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Q1) The relationship between a principal and an independent contractor always involves an agency relationship.
A)True
B)False
Q2) Treadwell Tire Manufacturing Company employs Uri as an agent. To terminate Uri's authority, Treadwell must notify
A) only third parties who are aware of the agency relationship.
B) the public generally.
C) Uri and any third parties who are aware of the agency relationship.
D) Uri only.
Q3) If a principal does not ratify an unauthorized contract, the principal is not bound.
A)True
B)False
Q4) Under the doctrine of respondeat superior, an agent is liable for the principal's negligence.
A)True
B)False
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Chapter 24: Employment, Immigration, and Labor Law
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Q1) Elections for union officers are regulated by
A) the Labor-Management Relations Act.
B) the Civil Rights Act.
C) the Labor-Management Reporting and Disclosure Act.
D) no federal law.
Q2) An employer may not hire substitute workers to replace strikers.
A)True
B)False
Q3) Cash is an employee of Drowsy Resort, Inc., covered by federal overtime provisions, which apply only after an employee has worked more than
A) eight hours in a day.
B) forty hours in a week.
C) 160 hours in a month.
D) one year for the same employer.
Q4) The basis for an employee's contribution to Social Security is the employee's age. A)True
B)False
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Chapter 25: Employment Discrimination and Diversity
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Q1) Cody believes that Delta Corporation has discriminated against him on the basis of gender. Cody files a suit against Delta under Title VII. To establish a prima facie case of employment discrimination, Cody must show that
A) Cody is a member of a protected class.
B) Delta has no legal defenses against the claim.
C) discriminatory intent motivated Delta's act.
D) other firms in Delta's industry have committed discriminatory acts.
Q2) Refer to Fact Pattern 25-1. To succeed with an age-discrimination claim against CBC, Manny will have to show that
A) Lita is not qualified for Manny's job.
B) Manny is qualified for his job.
C) NBC's qualifications for Manny's job are too high.
D) no one could do Manny's job as well as he could.
Q3) The Civil Rights Act of 1964 does not protect against reverse discrimination.
A)True
B)False
Q4) Gender can be a bona fide occupational qualification.
A)True
B)False
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Chapter 26: Sole Proprietorships and Private Franchises
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Q1) Pepsi-Cola Bottling Company is
A) a chain-style franchise.
B) a distributorship franchise.
C) a manufacturing franchise.
D) not a franchise.
Q2) Most franchise agreements provide that notice of termination of a franchise is not necessary.
A)True
B)False
Q3) Phillipa is the sole proprietor of Fun Floral Arrangements. As a sole proprietor, on Fun Floral Arrangements' profits, Phillipa
A) does not pay income taxes.
B) pays only personal income taxes.
C) is taxed twice.
D) pays both personal and sole proprietor income taxes.
Q4) A franchise exists when the owner of a trademark licenses its use to another party to sell goods or services.
A)True
B)False
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Chapter 27: All Forms of Partnership
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Q1) A sharing of both profits and losses is the only requirement of a partnership.
A)True
B)False
Q2) The majority rule controls decisions on ordinary matters connected with partnership business.
A)True
B)False
Q3) Doral, Esteban, and Fiona are general partners in Centreville Dentistry, a dental clinic. Their agreement states it is a breach of the agreement for any partner to assign his or her interest to a creditor without the consent of the other partners. Doral's assignment of his interest in the clinic to Hometown Lenders results in
A) nothing with respect to Doral or the clinic.
B) the automatic termination of the clinic's legal existence.
C) Doral's liability for all of the clinic's debts.
D) Doral's wrongful dissociation and liability for any damages.
Q4) Under no circumstances can a non-partner be regarded as an agent whose acts are binding on the partnership.
A)True
B)False
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Chapter 28: Limited Liability Companies Special Business
Forms
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Q1) A business trust is created by a written trust agreement.
A)True
B)False
Q2) In many states, an operating agreement is not required for a limited liability company to exist.
A)True
B)False
Q3) Fay is a member of Garden Groves LLC. Like other members of limited liability companies, Fay's liability for Garden Groves's obligations resembles the liability of
A) a member of a joint venture.
B) an owner of a sole proprietorship.
C) a partner of a partnership.
D) a shareholder of a corporation.
Q4) Like a corporation, the ownership of a joint stock company is represented by shares of stock.
A)True
B)False
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Chapter 29: Corporate Formation, Merger, and Termination
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Q1) Skyla and Terry want to form and do business as Unique Boutique Corporation. Its existence depends generally on
A) city or county corporate codes.
B) the Entrepreneur's Corporate Handbook.
C) the federal Administrative Procedure Act.
D) state law.
Q2) Appraisal rights normally extend to regular mergers and consolidations.
A)True
B)False
Q3) The day-to-day business of a corporation is managed by officers employed by the board of directors.
A)True
B)False
Q4) Erin is a shareholder in African Adventures. As a shareholder, Erin
A) owns shares of stock in African Adventures.
B) is the founder of African Adventures.
C) has no say in the election of African Adventure's board of directors.
D) is liable for all the debts of African Adventures.
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Chapter 30: Management and Ownership of a Corporation
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Q1) Odell is a director of Price Rite, Inc. As a director, with respect to the corporation, Odell is
A) a fiduciary.
B) a forum.
C) a proxy.
D) a quorum.
Q2) Quorum requirements are the same in all jurisdictions.
A)True
B)False
Q3) Shareholders do not need to approve fundamental changes affecting the corporation before the changes can be effected.
A)True
B)False
Q4) After the first board, the directors are chosen by the corporate officers.
A)True
B)False
Q5) Every shareholder is entitled to inspect corporate records for a proper purpose. A)True
B)False
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Chapter 31: Investor Protection, Insider Trading, Corp Gov
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Q1) Refer to Fact Pattern 31-3. Under the Securities Exchange Act of 1934, Fay is most likely A) liable for insider trading.
B) not liable because Fay did not prevent others from profiting.
C) not liable because Fay did not solicit information from Dhani.
D) not liable because Fay does not work for Eureka.
Q2) North American Properties, Inc., and its officers, directors, and shareholders, buy and sell securities. Section 16(b) of the Securities Exchange Act of 1934 covers A) all purchases and sales of securities.
B) only purchases and sales of securities involving misappropriation.
C) only purchases and sales of securities involving short-swing profits.
D) only purchases and sales of securities involving tippers and tippees.
Q3) A major problem facing the Securities and Exchange Commission is how to enforce the antifraud provisions of the securities laws in the online environment.
A)True
B)False
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Chapter 32: Promoting Competition
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Q1) A restraint of trade is an agreement between firms that has the effect of reducing competition in the marketplace.
A)True
B)False
Q2) The Internet is changing the notion of the size and limits of a relevant geographic market.
A)True
B)False
Q3) A price-fixing agreement that is reasonable does not violate antitrust law.
A)True
B)False
Q4) City Manufacturing Corporation conditions shipments of its products to Exurb Stores, Inc., on Exurb's agreement not to buy products from Regional Works Company, City's competitor. This is
A) an exclusive-dealing contract.
B) a tying arrangement.
C) price discrimination.
D) a unilateral refusal to deal.
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Page 34
Chapter 33: Consumer and Environmental Law
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Q1) Dita takes out a student loan from Everloan Bank. When she fails to make the scheduled payments for six months, Everloan advises her of further action that it will take. This violates
A) no federal law.
B) the Fair and Accurate Credit Transactions Act.
C) the Fair Debt Collection Practices Act.
D) the Truth-in-Lending Act.
Q2) A collection agency must include a validation notice whenever it initially contacts a debtor for payment of a debt.
A)True
B)False
Q3) Precise GPS Company's ad states that its product is "the finest that money can buy." Because of this ad, the Federal Trade Commission is most likely to issue
A) a cease-and-desist order.
B) a counteradvertising order.
C) a multiple product order.
D) none of the choices.
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Chapter 34: Liability of Accountants Other Professionals
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Q1) An accountant is not liable for a misleading statement that affects the price of a security if the accountant acted in good faith.
A)True
B)False
Q2) Yves is an accountant charged with negligence by Zesty Soup Company, a client. Yves may successfully defend against the claim if he can show that A) scienter was lacking.
B) he complied with all International Financial Reporting Standards.
C) the negligence was not the proximate cause of the client's losses.
D) the negligence was only contributory.
Q3) Accountants and other professionals may not be held liable for negligence in the performance of their service.
A)True
B)False
Q4) Under rules of professional misconduct, an attorney should not engage in conduct involving deceit.
A)True
B)False
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Chapter 35: Personal Property and Bailments
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Q1) In contemplation of death during risky surgery, Donnelly, a guitarist, gives his guitars to Cathy. The surgery is successful, and Donnelly does not die. The gift of the guitars is A) not revoked because it was a gift causa mortis.
B) not revoked because it was a gift inter vivos.
C) revoked because it was a gift causa mortis.
D) not revoked because it was a gift largesse.
Q2) Delivery of intangible personal property is never accomplished by constructive delivery.
A)True
B)False
Q3) A car is tangible personal property.
A)True
B)False
Q4) There are three categories of property.
A)True
B)False
Q5) Patents are not considered personal property.
A)True
B)False
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Chapter 36: Real Property and Landlord-Tenant Law
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Q1) Refer to Fact Pattern 36-1. Nika's ownership interest is
A) a fee simple absolute.
B) a leasehold estate.
C) a life estate.
D) an easement.
Q2) Utility Power Company has the right to run its power lines across Velma's land. This is
A) a license.
B) an easement.
C) a profit.
D) a tenancy at sufferance.
Q3) Moby leases from National Theater Corporation a theater in which to stage a series of concerts. Ollie buys a ticket to the series. What distinguishes Moby, a tenant, from Ollie, a licensee, is
A) the exclusivity of possession.
B) the quiet enjoyment of rights.
C) the temporary nature of possession.
D) the title to the property.
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Chapter 37: Insurance, Wills, and Trusts
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Q1) Isabel obtains a fire insurance policy on her home from Justice Insurance Company. The home is lost in a fire, but the parties dispute the amount of Justice's liability under an ambiguous clause in the policy. A court would most likely
A) interpret the clause against Isabel.
B) interpret the clause against Justice.
C) rewrite the clause and apply it as rewritten.
D) strike the clause from the policy.
Q2) Amelia executes a separate written instrument to amend her prior will. This separate document is
A) a codicil.
B) a holographic will.
C) a living will.
D) a nuncupative will.
Q3) A party must own property to have an insurable interest in it.
A)True
B)False
Q4) To "publish" a will means to release it to the media.
A)True
B)False
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