Commercial Law
Test Preparation
Course Introduction
Commercial Law is a foundational course that explores the legal frameworks governing business and commerce. It covers key topics such as contract formation and enforcement, the sale of goods, agency, negotiable instruments, and the regulation of commercial entities. Students examine the rights and obligations of parties in commercial transactions, the role of commercial law in facilitating trade, and the resolution of disputes in business contexts. Through case studies and practical examples, the course equips learners with a solid understanding of the legal principles essential for operating within the modern commercial environment.
Recommended Textbook
Business Law Today Standard Text and Summarized Cases 10th Edition by Roger LeRoy Miller
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Page 2
Chapter 1: The Legal Environment
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Sample Questions
Q1) In a dispute between Cosmic Games Corporation and Mythic Engineering Associates, Inc., the court applies the doctrine of stare decisis. What is this doctrine? What does this doctrine have to do with the American legal system?
Answer: In a common law legal system, past judicial decisions are binding in current disputes with similar facts. This feature of the com mon law, which is the basis of the American legal system, is unique be cause, unlike the law in other legal systems, it is judge-made law. Within the common law system, when possible, judges attempt to be con sistent and to base their decisions on the principles suggested by earlier cases. The body of principles and doctrines that form the common law emerged over time as judges applied the principles announced in earlier cases to subsequent legal controversies. The practice of deciding cases with reference to former decisions, or precedents-the cornerstone of the American legal system-is called the doctrine of stare decisis. Under this doctrine, judges are obligated to follow the precedents established within their jurisdictions. This helps courts to be more efficient, and makes the law more stable and predictable.
Q2) Many different laws may apply to a single business transaction.
A)True
B)False
Answer: True
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Page 3
Chapter 2: Constitutional Law
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Sample Questions
Q1) The Fourteenth Amendment guarantees a right to due process of law.
A)True
B)False
Answer: True
Q2) A law that limits the liberty of all persons may violate substantive due process.
A)True
B)False
Answer: False
Q3) The police obtain a search warrant and search Dave's apartment. After yelling obscenities at the officers, Dave confesses to a crime and implicates his friends. The Constitution protects against
A) obscene speech only.
B) others' implication only.
C) unreasonable searches only.
D) obscene speech, others' implication, and unreasonable searches.
Answer: C
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Chapter 3: Courts and Alternative Dispute Resolution
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Sample Questions
Q1) Ben files a suit in a federal district court against Cathy. Cathy loses the suit, appeals to the U.S. Court of Appeals for the Second Circuit, and loses again. Cathy asks the United States Supreme Court to hear the case. The Court agrees to hear the case. This means that
A) at least four justices approve of hearing the case.
B) Cathy's petition does not raise a possibility of an important constitutional question.
C) the amount in controversy in Cathy's suit is greater than $100,000.
D) the Court feels that the lower courts' judgments were erroneous.
Answer: A
Q2) Arbitration is always legally binding.
A)True
B)False
Answer: False
Q3) U.S. district courts have original jurisdiction in federal matters.
A)True
B)False
Answer: True
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Chapter 4: Torts and Cyber Torts
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Sample Questions
Q1) Ike pushes Joan, who falls and breaks her arm. Ike is liable for the injury
A) if Ike intended to push Joan.
B) only if Ike did not intend to break Joan's arm.
C) only if Ike had a bad motive for pushing Joan.
D) only if Ike intended to break Joan's arm.
Q2) OK Dry-Cleaning advertises so effectively that the regular customers of its competitor Purity Cleaners patronize OK instead of Purity. This is A) appropriation.
B) conversion.
C) wrongful interference with a contractual relationship.
D) no tort.
Q3) If no harm results from an allegedly negligent act, there is no liability. A)True
B)False
Q4) Fraud occurs only when there is reliance on a statement of opinion. A)True
B)False
Q5) The public disclosure of private facts about a person is an invasion of privacy. A)True
B)False
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Chapter 5: Intellectual Property and Internet Law
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Q1) Trek Transport Company uses a mark associated with its name to distinguish its services from those of other trucking firms. This mark is
A) a certification mark.
B) a collective mark.
C) a service mark.
D) a trade name.
Q2) The 1995 Federal Trademark Dilution Act allowed trademark owners to bring suit in federal court for trademark dilution.
A)True
B)False
Q3) A generic term is not protected under trademark law unless it acquires a secondary meaning.
A)True
B)False
Q4) Each member country of the TRIPS agreement must include in its domestic laws intellectual property rights.
A)True
B)False
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Chapter 6: Criminal Law and Cyber Crime
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Sample Questions
Q1) Susan is unhappy with the way her mother has made out her will. Susan has a lawyer draft a new will and then signs her mother's name to it without her mother's consent. Susan has committed A) larceny.
B) no crime. C) robbery. D) forgery.
Q2) Under the exclusionary rule, all evidence must be included in a criminal prosecution. A)True
B)False
Q3) Crimes occurring in a business context are popularly referred to as white-collar crime.
A)True B)False
Q4) In some states, misdemeanors are punishable by imprisonment for up to 10 years. A)True B)False
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8
Chapter 7: Ethics and Business Decision Making
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Q1) Peak & Vale Accountants provides other firms with accounting services. Questions of what is ethical involve the extent to which Peak & Vale has
A) a legal duty beyond those duties mandated by ethics.
B) an ethical duty beyond those duties mandated by law.
C) any duty beyond those mandated by both ethics and the law.
D) any duty when it is uncertain whether a legal duty exists.
Q2) In making a decision as chief executive officer of Straightarrow Archery Supplies, Robin always considers whether he would feel any guilt about a particular action. As a guide, Robin is using
A) the categorical imperative.
B) internal company policies.
C) the law.
D) his conscience.
Q3) Restricting the bonuses that are paid to executives is unethical.
A)True
B)False
Q4) It is not possible to violate a business regulation without realizing it.
A)True
B)False
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Chapter 8: International Law in a Global Economy
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Sample Questions
Q1) Dumping is the exporting of environmentally polluting goods to a foreign market.
A)True
B)False
Q2) Michael, a citizen of Ireland, and Nina, a citizen of the United States, enter into a contract. When Nina breaches the contract, Michael obtains an award of damages in an Irish court. He asks a U.S. court to enforce the award. The U.S. court defers to and enforces the Irish court's decree. This is
A) a travesty of justice.
B) the act of state doctrine.
C) the doctrine of sovereign immunity.
D) the principle of comity.
Q3) The government of Japan sets a limit on the amount of rice that can be imported from the United States. This is
A) a dumping duty.
B) an antidumping duty.
C) a quota.
D) a tariff.
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Chapter 9: Nature and Classification
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Sample Questions
Q1) Vernon claims that his contract with Ulani is voidable. If their contract is avoided
A) both parties are released from it.
B) both parties must fully perform their obligations under it.
C) both parties agree to a wholly different contract.
D) a wholly different contract is imposed "as if" the parties had agreed.
Q2) Quasi contracts are often used by courts, even in cases where there is an actual contract that covers the area in controversy.
A)True
B)False
Q3) Jonah tells Levi he will give him an Xbox if Levi does Jonah's chores for a month. Levi promises to do the chores. Jonah and Levi have formed a
A) bilateral contract.
B) unilateral contract.
C) void contract.
D) unenforceable contract.
Q4) Every contract involves at least two parties.
A)True
B)False
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Chapter 9: Offer and Acceptance
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Sample Questions
Q1) Jared downloads some video games from the Internet. There is a page indicating the terms of use, but nothing that requires Jared to affirmatively indicate his consent before downloading the games. These terms are
A) a click-on agreement.
B) browse-wrap terms.
C) an attribution agreement.
D) a shrink-wrap agreement.
Q2) 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.
Q3) A click-on agreement is an agreement whose terms are expressed inside a box in which the goods are packaged.
A)True
B)False
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Page 12
Chapter 11: Consideration, Capacity, and Legality
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Sample Questions
Q1) Gaye, a minor, signs a contract to buy a motorcycle from Hi-Valu Cycles by misrepresenting her age as twenty-one. Gaye fails to make the payments. Hi-Valu sues. Ordinarily, Gaye can
A) not return the motorcycle nor avoid further liability.
B) not return the motorcycle but can avoid further liability.
C) return the motorcycle and avoid further liability.
D) return the motorcycle but cannot avoid further liability.
Q2) For a minor to disaffirm a contract, he or she must present the contract to a court. A)True
B)False
Q3) Consideration is the value given in return for a promise. A)True
B)False
Q4) Past consideration can be legally sufficient consideration. A)True B)False
Q5) A release does not require consideration to be legally binding. A)True
B)False
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Chapter 12: Defenses to Contract Enforceability
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Sample Questions
Q1) In some states, an otherwise unenforceable oral contract may be enforced under the doctrine of promissory estoppel.
A)True
B)False
Q2) In a transaction for the sale of a warehouse, Standard Storage Company tells Tri-County Investment Corporation that the office furniture is included. The contract says nothing about office furniture, but does state, "This document supersedes all oral promises relating to the sale." Is the furniture part of the sale? Why or why not?
Q3) A contract must be in writing to be enforceable if the contract makes performance possible within any definite period of time.
A)True
B)False
Q4) Prenuptial agreements are agreements made during a wedding ceremony that define each partner's duties to one another during the marriage.
A)True
B)False
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Chapter 13: Third Party Rights and Discharge
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Sample Questions
Q1) Refer to Fact Pattern 13-1. The value of Eatery's property will increase after Carol's store is remodeled. Eatery is
A) a delegatee.
B) an assignee.
C) an incidental beneficiary.
D) an intended beneficiary.
Q2) Kathleen offers to buy Richard's prize stallion for $10,000 only if a licensed veterinarian certifies that the horse is sound for breeding. After inspecting the stallion, the veterinarian concludes that the stallion is sterile and thus not fit for breeding.
Kathleen
A) must still buy the stallion.
B) does not have to buy the stallion.
C) must still buy the stallion, but may pay a lower price.
D) does not have to buy the stallion, but must buy another horse of similar value from Richard.
Q3) As long as a contract is personal in nature, all rights under the contract can be assigned.
A)True
B)False
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Page 15
Chapter 14: Breach and Remedies
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Sample Questions
Q1) Clarice pays Damien $10,000 to design an ad campaign for her Sweetwater Coffee Stand chain. The next day, Damien tells Clarice that he has accepted a job in New York and cannot design her campaign. She files a suit against Damien. As compensatory damages, she can recover
A) $100,000.
B) $10,000.
C) $1,000.
D) $0.
Q2) Expenses that are caused directly by a breach of contract-such as those incurred to obtain performance from another source-are compensatory damages.
A)True
B)False
Q3) Windstar Heli-Pads, Inc., enters into a contract to employ Valerie as an on-site project manager for two years. Windstar breaches the contract. Valerie has a duty to A) do nothing.
B) reduce the damages that Valerie might otherwise suffer.
C) breach the contract with Windstar.
D) sue Windstar to deter others from similar acts.
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Page 16
Chapter 15: The Formation of Sales and Lease Contracts
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Sample Questions
Q1) In contracts involving a sale of unborn animals to be born within twelve months, identification takes place when the animals are born.
A)True
B)False
Q2) A buyer and a seller cannot normally have an insurable interest in identical goods at the same time.
A)True
B)False
Q3) Even if goods are not identified to the contract, the title and risk of loss can still pass from the seller to the buyer.
A)True
B)False
Q4) Community Construction Corporation offers to buy from Solid Cement Company a certain quantity of cement for a certain price. Solid can accept the offer by
A) doing nothing.
B) promising to ship or promptly shipping the cement.
C) promising to ship the cement only.
D) promptly shipping the cement only.
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Chapter 16: Performance and Breach of Sales Lease Contracts
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Q1) A buyer who obtains substitute goods to replace goods that a seller did not deliver can also recover damages from the seller.
A)True
B)False
Q2) If, before the time for performance, a buyer communicates an intent not to perform, the seller can consider the buyer in breach and pursue a remedy.
A)True
B)False
Q3) Until the time for performance under a contract expires, the seller has a right to cure.
A)True
B)False
Q4) Summer Breeze, Inc., contracts for the sale of fifty ceiling fans to Island Décor store. If Summer Breeze fails to deliver the goods, Island Décor must commence a suit for breach of contract within A) four years.
B) not more than one year.
C) not less than four years.
D) thirty days.
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Chapter 17: Warranties and Product Liability
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Sample Questions
Q1) Cold Stuf, Inc., makes snowboards, which it sells to Deep Freeze Sports Store (DFS).
DFS sells Cold Stuf boards to consumers, including Ed. Ed is injured while using the board. In a product liability suit based on strict liability, Ed may recover from A) Cold Stuf only.
B) Cold Stuf or DFS.
C) DFS only.
D) no one.
Q2) Ceramic Tile Company designs and makes floor tiles. In a product liability suit based on negligence, Ceramic could be liable for violating its duty of care with respect to A) neither the design nor the making of the tiles.
B) the design and the making of the tiles.
C) the design of the tiles only.
D) the making of the tiles only.
Q3) Merchants are not required to warrant that the goods they sell are fit for their ordinary purpose.
A)True
B)False
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Chapter 18: Negotiable Instruments: Transferability Liability
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Q1) An instrument payable "with ten hours of services" is negotiable.
A)True
B)False
Q2) Universal defenses are good against all holders except HDCs and holders through HDCs.
A)True
B)False
Q3) Burt, a mentally impaired person, is asked by Carl to sign a piece of paper that Carl says is an autograph book. In fact, the document is a note. If later sued on the note by an HDC
A) Burt must pay the note.
B) Burt's best defense would be fraud in the execution.
C) Burt's best defense would be fraud in the inducement.
D) Burt's best defense would be mistake.
Q4) A signature must be the full name of a party.
A)True
B)False
Q5) A check is not negotiable if it is payable on demand.
A)True
B)False
Page 20
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Chapter 19: Checks and Banking in the Digital Age
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Q1) Jon writes a check to LocoMotion, Inc., as payment for a golf cart but soon discovers the cart is broken. He goes to Fairway Bank, the drawee, and orally authorizes Lolly, a bank officer, to stop payment on the check. This order is valid for A) fourteen days.
B) fourteen months.
C) fourteen attempts to cash it.
D) fourteen subsequent "on-us" items.
Q2) A customer has a right to stop payment on a check that has been certified or accepted by a bank.
A)True B)False
Q3) When a customer deposits cash into a checking account, he or she becomes a debtor for the amount deposited.
A)True
B)False
Q4) A bank is not obligated to pay an uncertified check presented less than six months from its date.
A)True B)False
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Chapter 20: Secured Transactions
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Q1) A secured party can release any collateral described in the financing statement, thereby terminating its security interest in that collateral.
A)True B)False
Q2) A buyer in the ordinary course of business has priority over any security interest created by the seller.
A)True B)False
Q3) A financing statement is effective for five years from the date of filing.
A)True B)False
Q4) Angie borrows $20,000 from First Line Credit using a field of timber trees as collateral. To perfect its security interest, First Line Credit must file its financing statement with
A) the county clerk.
B) the mayor.
C) the city counsel.
D) the secretary of state.
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Page 22
Chapter 21: Creditors Rights and Bankruptcy
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Q1) Roland files for Chapter 7 bankruptcy. After all his assets have been sold and the proceeds distributed among his creditors, Roland's remaining debts
A) are discharged.
B) paid by the court.
C) must be paid by Roland.
D) are put on hold until Roland has sufficient means to pay them.
Q2) Ronald's debt to Greg is past due. Ronald obtains a judgment against Greg to collect the debt, but Greg will not pay. Ronald requests a writ of execution. The property that is seized under the writ of execution must be
A) in Ronald's possession.
B) in Greg's possession.
C) in the possession of Greg's employer or other third party.
D) located within the court's geographic jurisdiction.
Q3) Child-support debts will be suspended by a voluntary bankruptcy filing.
A)True
B)False
Q4) Some student loans are dischargeable in a Chapter 7 bankruptcy.
A)True
B)False
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Chapter 22: Mortgages Foreclosures After the Recession
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Q1) Duran applies to EZ Credit Mortgage Company for $100,000 to buy a home. EZ Credit steers Duran toward an adjustable-rate mortgage even though he qualifies for a fixed-rate mortgage. This is
A) a short sale.
B) a subprime mortgage.
C) loan flipping.
D) steering and targeting.
Q2) A home equity loan starts as a fixed-rate mortgage and then converts into an adjustable-rate mortgage.
A)True
B)False
Q3) Erin and Dooley, a married couple, borrow $120,000 from Capital & Credit Bank to buy a home. When Erin and Dooley divorce, they are unable to make payments on the mortgage. The market value of the home has declined to less than the balance of the loan. Capital & Credit agrees to a sale of the property for this amount. This is
A) a deed in lieu of foreclosure.
B) a home equity loan.
C) a reverse mortgage.
D) a short sale.
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Page 24
Chapter 23: Agency Relationships in Business
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Q1) An agency can terminate once its purpose is achieved.
A)True
B)False
Q2) Joli, acting within the scope of her authority for the Cake Bake Shop, contracts with Valley View Berry Farms to buy an assortment of fruit. Cake Bake is liable on the contract, and Joli is not, if Cake Bake is
A) a disclosed principal.
B) a partially disclosed principal.
C) an undisclosed principal.
D) an apparent agent.
Q3) A principal who causes a third person to believe that another person is the principal's agent can be estopped from denying the agency relationship.
A)True
B)False
Q4) An agency relationship created for an illegal purpose is enforceable.
A)True
B)False
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Chapter 24: Employment, Immigration, and Labor Law
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Q1) A key employee is defined as an employee whose pay falls within the top 10 percent of the firm's workforce.
A)True
B)False
Q2) Network Industries, Inc., wants to monitor its employees' electronic communications.
To avoid liability under laws related to employee monitoring, Network should announce the monitoring to A) no one.
B) the employees.
C) the government.
D) the public generally.
Q3) Samson is a government employee. Samson is limited in drug testing by the A) First Amendment.
B) Second Amendment.
C) Fourth Amendment.
D) Eighth Amendment.
Q4) Under the employment-at-will doctrine, an employer can end an employment relationship at any time.
A)True
B)False
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Chapter 25: Employment Discrimination and Diversity
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Questions
Q1) Dakota believes that Credit Services Corporation (CSC) has discriminated against her on the basis of gender. She files a suit against CSC under the Civil Rights Act of 1964.
To establish a prima facie case of employment discrimination, Dakota must show that
A) she is a member of a protected class.
B) CSC has no legal defenses against the claim.
C) discriminatory intent motivated CSC's act.
D) no other firm in CSC's industry has committed a discriminatory act.
Q2) A plaintiff who proves unlawful discrimination may be awarded reinstatement, back pay, but not retroactive promotions.
A)True
B)False
Q3) An employer may be liable for the harassment by nonemployees if the employer knew about the harassment and failed to take corrective action.
A)True
B)False
Q4) The Civil Rights Act of 1964 does not protect against reverse discrimination.
A)True
B)False
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Chapter 26: Sole Proprietorships and Private Franchises
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Q1) Worldwide Realtors, Inc., sells a franchise to XL Sales Company. XL is A) a franchisee.
B) a franchisor.
C) an agent.
D) a principal.
Q2) A sole proprietor must create a separate business organization to create a sole proprietorship.
A)True
B)False
Q3) Pricey Auto Corporation gives notice to Quint that Pricey is terminating their franchise arrangement. Winding up the business requires
A) a new franchise agreement.
B) nothing more than closing immediately.
C) Quint's death, disability, or insolvency.
D) the return of Pricey's property.
Q4) A sole proprietor has unlimited liability for all obligations that arise in doing business. 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) Withdrawal from a partnership for a term prematurely does not constitute a breach of the partnership agreement.
A)True
B)False
Q3) Noah and Orin do business as Personnel Partners. In most states, for purposes of suing and being sued, Personnel Partners would be treated as
A) an aggregate of the individual partners.
B) a natural person.
C) an entity.
D) a non-existent party.
Q4) An assignment of the interest of a limited partner dissolves a limited partnership.
A)True
B)False
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Chapter 28: Limited Liability Companies Special Business
Forms
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Q1) Jin, Karlo, and other consumers form Metro Purchasing Cooperative. This form of business organization makes it possible for these individuals to
A) avoid personal liability for the acts of the cooperative.
B) obtain an exemption from state laws governing corporations.
C) pay no taxes on their business income.
D) pool their resources to gain an advantage in the market.
Q2) High Pointe LLC's members include Irvin. For purposes of holding title to property, High Pointe is
A) an aggregate of Irvin and the other members.
B) a natural person in the members' "family."
C) a legal entity apart from the owners.
D) a non-participating third party.
Q3) Dreem Land Corporation and EZ Investments Company transfer their property to Financial Managers, Inc., which manages the property and distributes the profits to Dreem and EZ. This form of a business organization is
A) a business trust.
B) a joint stock company.
C) a joint venture.
D) a syndicate.
Page 30
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Chapter 29: Corporate Formation, Merger, and Termination
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Q1) Raven is a shareholder of Quantum Mechanix Corporation. Raven could normally exercise appraisal rights if Quantum participated in
A) a consolidation.
B) a dissolution.
C) a liquidation.
D) a winding up.
Q2) Sangfroid Business Corporation can be compelled to dissolve by A) its creditors only.
B) itself, through its shareholders and directors, only.
C) itself, through its shareholders and directors, or the state.
D) the state only.
Q3) The day-to-day business of a corporation is managed by officers employed by the board of directors.
A)True
B)False
Q4) When a corporation is dissolved voluntarily, the corporation must file articles of dissolution with the state.
A)True
B)False
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Chapter 30: Management and Ownership of a Corporation
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Q1) Cole is a shareholder of Donut Holes, Inc. Cole will be deemed to have a fiduciary duty to Donut Holes and its minority shareholders if he has
A) a restriction on the transferability of his shares.
B) a right of first refusal.
C) a sufficient number of shares to exercise de facto control.
D) voting rights.
Q2) Bea is a shareholder of Candy Confections Corporation. The right to inspect corporate books and records is
A) held by Bea only if she is a director.
B) held by Bea, without restrictions.
C) held by Bea, with some restrictions.
D) not held by Bea.
Q3) Rosa and Sean are directors of Tech, Inc. Rosa's written authorization to Sean to vote Rosa's shares at a Tech shareholders' meeting is
A) a violation of the duty of care.
B) a preemptive right.
C) a proxy.
D) a quorum.
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Chapter 31: Investor Protection, Insider Trading, Corp Gov
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Q1) Few securities can be resold without registration.
A)True
B)False
Q2) Players Video Game Centers, Inc., wants to issue stock of $1 million in a single offering. Players must provide all investors with material information about itself, its business, and its securities if
A) all investors are accredited.
B) under any circumstances.
C) any investors are accredited.
D) any investors are unaccredited.
Q3) Securities that are exempt from the registration requirement can generally be sold and resold without being registered.
A)True
B)False
Q4) Generally, stock offerings that involve a small dollar amount are exempt from the registration requirement.
A)True
B)False
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Page 33
Chapter 32: Promoting Competition
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Q1) Refer to Fact Pattern 32-1. A court would most likely rule that the agreement between Cardio and Emitate is
A) a deal that neither restrains trade or harms competition.
B) a legal restraint of trade.
C) a per se violation of the Sherman Act.
D) subject to analysis under the rule of reason.
Q2) Antitrust legislation was created because of the belief that competition leads to lower prices.
A)True
B)False
Q3) The basic purpose of antitrust law is to regulate economic competition.
A)True
B)False
Q4) A market division by class of customer between rival firms violates antitrust law.
A)True
B)False
Q5) Section 1 of the Sherman Act condemns monopolization.
A)True
B)False
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Chapter 33: Consumer and Environmental Law
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Q1) Hi-Yield Agriculture, Inc., makes a pesticide with a one-in-a-million risk to people of developing cancer from exposure. This substance must be
A) disposed of before anyone develops cancer.
B) registered before it is sold.
C) taken off the market and placed in temporary storage.
D) used only in a way that avoids exposure to people.
Q2) A barge owned by Oceanic Shipping Company discharges some of the oil contained in its hold into the sea and onto the shore. Under the Oil Pollution Act, this is most likely A) a violation.
B) not a violation because an oil discharge is not pollution.
C) not a violation because a floating barge is not a stationary source.
D) not a violation because a ship's hold is not a point source.
Q3) Rural Electric Company submits a bid to build a dam on federal land as part of a federal project. For this action, an environmental impact statement is most likely A) prohibited.
B) required.
C) unnecessary.
D) voluntary.
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Chapter 34: Liability of Accountants Other Professionals
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Q1) A qualified opinion must be specific and identify the reason for the qualification.
A)True
B)False
Q2) Leslie, an accountant, enters into a contract to provide services to Marty. Leslie does not finish the work within the contract's deadline. Leslie is
A) liable for breach of contract.
B) not liable, because Leslie is a professional.
C) not liable, because Leslie's failure must have been Marty's fault.
D) not liable, because the work took longer than foreseen.
Q3) A professional's gross negligence in performing a duty constitutes actual fraud. A)True
B)False
Q4) Malpractice is professional negligence. A)True
B)False
Q5) Each state establishes rules that govern the conduct of attorneys
A)True
B)False
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Chapter 35: Personal Property and Bailments
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Q1) Intangible personal property represents a set of rights and interests but has no real physical existence.
A)True
B)False
Q2) Property voluntarily discarded by its owner with no intention of reclaiming it is abandoned property.
A)True
B)False
Q3) Klondike and Leola own 10,000 shares of stock in My-T Gro Corporation. On the death of either owner, that owner's interest in the stock passes to the surviving owner. This is A) a joint tenancy.
B) community property.
C) a tenancy in common.
D) ownership in fee simple.
Q4) A finder of mislaid property is an involuntary bailee. A)True
B)False
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Chapter 36: Real Property and Landlord-Tenant Law
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Q1) Jamal signs a lease with Kelvin to occupy a house on Leech Lake in Minnesota for the summer. Jamal's tenancy is
A) a fixed-term tenancy.
B) a periodic tenancy.
C) a tenancy at sufferance.
D) a tenancy at will.
Q2) 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.
Q3) Generally, contract doctrines apply to a landlord-tenant relationship.
A)True
B)False
Q4) Xavier owns a duplex that he leases to Yvon and Zack. Xavier may sell
A) the duplex at any time.
B) the duplex, but only after the lease expires and the tenants move out.
C) the duplex, but only with the tenants' permission.
D) the lease, but not the duplex.
Page 38
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Chapter 37: Insurance, Wills, and Trusts
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Q1) Liability insurance protects against liability imposed on the insured as a result of injuries to the person or property of another.
A)True
B)False
Q2) Benny dies without a will, with no surviving spouse or child. Benny's survivors include his granddaughter Callie, his nephew Duncan, and his cousin Earl. In most states, his estate would pass to
A) Callie.
B) Duncan.
C) Earl.
D) the state.
Q3) A will is probated in part to establish its validity.
A)True
B)False
Q4) A testator is a decedent who dies without a will.
A)True
B)False
Q5) Dieter's will provides for a distribution of his assets on his death. Who will "distribute" Dieter's property, and what are the steps involved?
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