Commercial Law
Test Preparation
Course Introduction
Commercial Law explores the legal principles and frameworks governing business transactions and commercial entities. The course covers key topics such as contracts, sales of goods, agency, negotiable instruments, partnership, company law, and consumer protection. Students will examine the rights and obligations of parties involved in commercial dealings, analyze relevant statutes and case law, and understand dispute resolution mechanisms. Emphasis is placed on practical applications, helping students to critically assess and navigate legal challenges in the business environment.
Recommended Textbook
Business Law Text and Exercises 7th Edition by Roger LeRoy Miller
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43 Chapters
3094 Verified Questions
3094 Flashcards
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Page 2
Chapter 1: Introduction to the Law and Our Legal System
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Sample Questions
Q1) Common law is the same as statutory law.
A)True
B)False Answer: False
Q2) Damages are never paid in money.
A)True
B)False Answer: False
Q3) As a judge,Bonnie applies common law rules.These rules develop from
A)administrative regulations.
B)court decisions.
C)federal and state statutes.
D)proposed uniform laws.
Answer: B
Q4) In order to truly understand the law,it is important to understand the origins of the law.
A)True
B)False Answer: True
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Chapter 2: Ethics in Business
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Sample Questions
Q1) It is illegal for a company with a product that is outlawed in one country to look elsewhere for a market.
A)True
B)False
Answer: False
Q2) According to utilitarianism,it matters how many people suffer a negative effect from an act.
A)True
B)False
Answer: True
Q3) Duty-based ethical standards often come from religious precepts or through philosophical reasoning.
A)True
B)False
Answer: True
Q4) Obeying the law does not necessarily fulfill all ethical obligations.
A)True
B)False
Answer: True
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Chapter 3: The Courts and Alternative Dispute Resolution
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Sample Questions
Q1) Jason files a suit against Maybelline.If Maybelline fails to respond,Jason
A)must appeal the case to a different court.
B)must refile the suit in the same court.
C)will be awarded the remedy sought.
D)will have a default judgment entered against him.
Answer: C
Q2) The case of Max v.National Credit Co.is heard in a trial court.The case of O! Boy! Ice Cream Co.v.Percy is heard in an appellate court.The difference be?tween a trial and an appellate court is whether
A)a trial is being held.
B)the court is appealing.
C)the parties question how the law applies to their dispute.
D)the subject matter of the case involves complex facts.
Answer: A
Q3) U.S.district courts have original jurisdiction in federal matters.
A)True
B)False
Answer: True
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Chapter 4: Constitutional Law
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Sample Questions
Q1) ViolentVideoGames,Inc.markets a variety of shooting,fighting and hunting video games.A state statue is enacted that requires all video game manufacturers to label any games with an option to kill something as "excessively violent".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.
Q2) California enacts a statute to ban advertising in "bad taste." This stat?ute would likely be held by a court 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.
Q3) Under the Constitution,the judicial branch is responsible for foreign affairs.
A)True B)False
Q4) A law that has any impact on religion is unconstitutional. A)True B)False
Page 6
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Chapter 5: Torts and Cyber Torts
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Sample Questions
Q1) The Class Action Fairness Act of 2005
A)shifted jurisdiction over certain class-action lawsuits from the state courts to the federal courts.
B)shifted jurisdiction over certain class-action lawsuits from the federal courts to the state courts.
C)made forum shopping punishable by large fines.
D)limited the amount of damages that could be awarded in a medical malpractice suit.
Q2) Only persons who are explicitly invited onto a business's premises are considered business invitees.
A)True
B)False
Q3) Kai files a suit against Lana based on one of Lana's statements that Kai alleges is fraudulent.To give rise to fraud,the statement must be one of A)emotion.
B)fact.
C)illusion. D)opinion.
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Page 7
Chapter 6: Intellectual Property and Internet Law
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Sample Questions
Q1) Trade names have the same legal protection as trademarks.
A)True
B)False
Q2) Cybersquatting occurs when a person repeatedly visits a business's website.
A)True
B)False
Q3) Wendy works as a weather announcer for a TV station under the character name
Weather Wendy.Wendy can register her name as a
A)a certification mark.
B)a collective mark.
C)a service mark.
D)a trade name.
Q4) Pricing information cannot be a trade secret.
A)True
B)False
Q5) A fanciful use of ordinary words may be trademarked.
A)True
B)False
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Chapter 7: Criminal Law and Cyber Crime
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Sample Questions
Q1) Constitutional safeguards to protect the rights of individuals apply in federal courts.
A)True
B)False
Q2) Bribing foreign officials to obtain favorable business contracts is NOT a crime.
A)True
B)False
Q3) Identity theft occurs when a wrongdoer steals another's form of identification.
A)True
B)False
Q4) Sandy,a businessperson,is convicted of RICO offenses.Sandy's penalties may include
A)closing a business,but not selling it.
B)not closing a business or selling it.
C)selling a business,but not closing it.
D)closing a business or selling it.
Q5) Counterfeiting is robbery.
A)True
B)False
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Chapter 8: Introduction to Contracts
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Sample Questions
Q1) InTown Delivery Service promises to deliver a certain couch to Kurt,who promises to pay for the service.If InTown does not perform,it may be required to
A)do nothing.
B)make another promise.
C)pay money damages.
D)perform a different service.
Q2) Ed,a businessperson,is a friend of Fran,the owner of a Percolated Coffee & Baked Goods store.Every day,Ed spends five minutes in Fran's store,looking at the goods and usually buying one or two cinnamon buns or bagels.One afternoon,Ed goes into the store,looks at the items,and picks up a $1 chocolate brownie.Ed waves the brownie at Fran without saying a word and walks out.Is there a con?tract? If so,how would it be classified in terms of formation,perform?ance,and enforceability?
Q3) Scot and Tiffany enter into an implied contract.The parties' conduct
A)defines the contract's terms.
B)finds the contract's facts.
C)terminates any unintended consequences.
D)undercuts any terms based on the facts.
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Chapter 9: Offer and Acceptance
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Sample Questions
Q1) 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 Fresh's A)assumptions.
B)beliefs.
C)intentions.
D)words and conduct.
Q2) Interstate Coffee Brokers,Inc.(ICBI),offers to sell Java Roasters,Inc.,fifty bags of coffee beans.Java rejects the offer.The offer is A)terminated.
B)valid for a reasonable time to give Java a "second chance."
C)valid for the period of time prescribed by a state statute.
D)valid until ICBI revokes the offer.
Q3) Under the mailbox rule,no acceptance is valid until it is received.
A)True
B)False
Q4) A person who does not know about a reward CANNOT claim it.
A)True
B)False
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Chapter 10: Consideration
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Sample Questions
Q1) In contract law,"consideration" refers to the time that a party takes to evaluate a deal.
A)True
B)False
Q2) A covenant not to sue does not always bar further recovery.
A)True
B)False
Q3) To be legally sufficient,consideration must include something of economic value.
A)True
B)False
Q4) Henry promises not to open his restaurant before 10:00 A.M.if Suzy,who owns a bakery next door to him,promises to close her bakery by 4:00 P.M.Henry's consideration is A)the destruction of a legal relationship.
B)the creation of a legal relationship.
C)a forbearance.
D)an exchange of money.
Q5) A preexisting duty may arise from a previous contract.
A)True
B)False
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Chapter 11: Capacity
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Sample Questions
Q1) A person may be able to understand the nature and effect of entering into a certain contract but lack the capacity to engage in other activities.
A)True
B)False
Q2) A mentally incompetent person can enter into legally binding contracts on his or her own behalf.
A)True
B)False
Q3) The legitimate interests of those who deal with minors are recognized by the duty of restitution.
A)True
B)False
Q4) Financial loans are usually considered to be necessaries.
A)True
B)False
Q5) Parents who sign a contract made by their minor child with an adult have the same option to disaffirm as the child.
A)True
B)False
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Chapter 12: The Legality of Agreements
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Sample Questions
Q1) Gregory obtains a consumer loan from Finance Bank at an interest rate that exceeds the state's maximum.Finance has
A)calculated the optimum rate that the market will bear.
B) engaged in a restraint of trade.
C)underestimated the risk of the loan's nonpayment.
D)violated the usury laws.
Q2) Dissembly Corporation requires consumers to sign contracts with uncon?scionable terms or Dissembly,which has few competitors,will not do busi?ness with them.Dissembly can normally obtain a court order to enforce
A)a covenant not to compete.
B)an adhesion contract.
C)an exculpatory clause.
D)none of the choices.
Q3) The state of Illinois enacts a usury statute.The purpose is to
A)establish a maximum rate of interest that may be charged for loans.
B)establish a minimum rate of interest that may be charged for loans.
C)prevent the misuse of money advanced as loans.
D)prevent the misuse of money paid back on loans.
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Chapter 13: Mistakes and Other Contract Defects
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Sample Questions
Q1) A seller's failure to disclose a serious defect about a product for sale may give rise to an action for fraud.
A)True
B)False
Q2) Overestimating the value of an object is a mistake for which a court will NOT normally provide relief.
A)True B)False
Q3) The presence of fraud does NOT affect the authenticity of an innocent party's consent to a contract.
A)True
B)False
Q4) An innocent party can sometimes enforce a fraudulent con?tract. A)True
B)False
Q5) Under contract law,an innocent party need not suffer an injury to recover damages in a case involving a contract with fraudulent terms. A)True B)False
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Chapter 14: Written Contracts
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Sample Questions
Q1) Retail Sales Company and Standard Purchasing Corporation enter into a contract for a sale of goods.To be enforceable,the contract should be in writing if the goods are valued at more than
A)$5.
B)$15.
C)$50.
D)$500.
Q2) Refer to Fact Pattern 14-1.Lucas later disputes some of the provisions of the deal with Kelly.If the dispute results in litigation,a court will most likely exclude evidence that A)buttresses the written terms.
B)contradicts the written terms.
C)duplicates the written terms.
D)reinforces the written terms.
Q3) Evermore Corporation and Trendy Goods,Inc.,enter into a contract.To be enforceable,the contract must include A)no particular signatures.
B)the signatures of all parties to the deal.
C)the signature of the party against whom enforcement is sought.
D)the signature of the party who is seeking enforcement.
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Page 16
Chapter 15: Third Party Rights
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Sample Questions
Q1) An intended beneficiary can sue directly to enforce a promisor's promise.
A)True
B)False
Q2) Refer to Fact Pattern 15-1.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.
Q3) A third party's right to control the details of performance of a contract indicates that the third party is an intended beneficiary.
A)True
B)False
Q4) Privity of contract establishes the basic concept that third parties have no rights in contracts to which they are not parties.
A)True
B)False
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Chapter 16: Contract Discharge and Remedies
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Sample Questions
Q1) Roy and Sheila are parties to a contract.They subse?quently agree that Tony should take Roy's place and assume all of his rights and duties under the contract.This is
A)a novation.
B)an accord and satisfaction.
C)an assignment.
D)a modification.
Q2) Restitution involves one party's recapture of a benefit through which another party has been unjustly enriched.
A)True
B)False
Q3) A party who substantially performs his or her duties under a con?tract can enforce the contract against the other party.
A)True
B)False
Q4) A party seeking to recover in quasi contract must show that he or she has been unjustly enriched.
A)True
B)False
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Chapter 17: E-Contracts
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Sample Questions
Q1) Lively Toys Store and Movin' Products Company (MPC) enter into an e-contract under which MPC agrees to ship a case of electronic,remote-controlled bugs to Lively Toys,which agrees to pay on delivery.The Uniform Electronics Transactions Act (UETA)
A)denies the enforcement of such contracts.
B)does not apply to such contracts.
C)preempts all other laws with respect to such contracts.
D)supports the enforcement of such contracts.
Q2) Standard Purchasing Corporation and Total Sales,Inc.,enter into a part?nering agreement.Under a partnering agreement,parties agree
A)in advance to terms that apply to their future e-transactions.
B)to become partners.
C)to conduct transactions solely in electronic form.
D)to resolve all disputes without involving a third party.
Q3) A shrink-wrap agreement is normally enforced.
A)True
B)False
Q4) Browse-wrap terms require a user to affirmatively indicate his or her consent.
A)True
B)False
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Chapter 18: Introduction to Sales and Lease Contracts
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Q1) Dave leases a bulldozer from Construction Rentals,Inc.Wilson from Construction Rentals delivers the bulldozer to Dave,but does not collect any money.Sally from Construction Rentals picks up the bulldozer from Dave and collects the payment for the lease from Dave on behalf of Construction Rentals.In this situation the lessee is
A)Wilson.
B)Dave.
C)Sally.
D)Construction Rentals.
Q2) Stocks are an example of property that is governed by the UCC Article 2.
A)True
B)False
Q3) According to the UCC,one open term will cause a sales con?tract to fail for indefiniteness.
A)True
B)False
Q4) The rules governing firm offers apply to all merchants.
A)True
B)False
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Chapter 19: Title and Risk of Loss
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Sample Questions
Q1) "Unless otherwise explicitly agreed," title passes to the buyer at the time at which the seller orally agrees to deliver the goods.
A)True
B)False
Q2) Elizabeth buys a car from Silas,who is 16 years old.Elizabeth then wants to sell the car to her neighbor,John.Elizabeth's title to the car is
A)valid.
B)voidable.
C)void.
D)good.
Q3) With a bill of lading,Cartage Common Carrier Company acknowledges possession of certain goods and contracts to deliver them.Cartage is A)a bailee.
B)a buyer in the ordinary course of business.
C)a good faith purchaser for value.
D)an F.O.B.
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Chapter 20: Performance and Breach
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Sample Questions
Q1) Under the UCC,if a contract does not designate the place of delivery for the goods,and the buyer is expected to pick them up,then the place of delivery must be at a location halfway between the seller's place of business and the buyer's place of business.
A)True
B)False
Q2) Under the UCC,a seller's tender of goods that do not conform in every way to a contract is still a valid tender.
A)True
B)False
Q3) The term cure refers to the right of the buyer to reject,adjust,or replace nonconforming goods.
A)True
B)False
Q4) In general,a buyer's duty to pay for tendered goods becomes absolute be?fore the buyer has had an opportunity to inspect the goods.
A)True
B)False
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Page 22
Chapter 21: Warranties and Product Liability
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Sample Questions
Q1) Regal Autos,Inc.,sells cars to consumers.To avoid liability for oral ex?press warranties,each sales agreement should note that a car is sold
A)as is.
B)in perfect condition.
C)subject to warranties included in the written contract only. D)with no known defects.
Q2) Express warranties can be limited in contracts.
A)True
B)False
Q3) A warranty against infringement is a promise by the seller that the prod?uct is free from any patent,trademark,or copyright claims of a third person.
A)True
B)False
Q4) Suppliers are generally required to expect reasonably foreseeable misuses of their products.
A)True
B)False
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23
Chapter 22: Consumer Protection
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Sample Questions
Q1) An ad that is literally true cannot be deceptive.
A)True
B)False
Q2) Marshall's Mattress Company advertises a special sale on mattresses on its website.The mattresses are normally sold for $1,000,but are advertised on the website for $499.The sale price does not,however,include shipping costs.Marshall's charges $250 for shipping any mattress.To avoid any claims of deceptive advertising,Marshall's should A)be sure that it has clear and conspicuous disclosure of the shipping costs.
B)list the shipping cost in small print at the bottom of the Web page.
C)list the shipping cost on the last Web page.
D)avoid listing the shipping cost anywhere on the website.
Q3) An individual is not liable for any amount of unauthorized charges on his or her credit card.
A)True
B)False
Q4) The test for whether an advertisement is deceptive is whether a reason?able consumer would be deceived.
A)True
B)False
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Chapter 23: The Essentials of Negotiability
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Q1) Jared writes Lisa a check for $500.Because the check does not specify a time of payment,it is considered a A)certificate of deposit.
B)demand instrument.
C)nonnegotiable instrument.
D)promissory note.
Q2) To pay for a previous order of apples,oranges and pears,Bella signs a check that is payable to 'Sweet Fruit Co.or order.' This check is A)negotiable.
B)nonnegotiable,because it is not payable to a specific person.
C)nonnegotiable,because it is not payable 'to the order of Sweet Fruit Co.'.
D)nonnegotiable,because it is issued to pay for a previous order.
Q3) A check is a draft drawn by a drawer ordering the drawee bank or financial institution to pay a certain amount of money to the holder on demand.
A)True
B)False
Q4) A conditional promise to pay is a negotiable instrument.
A)True
B)False
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Chapter 24: Transferability and Liability
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Sample Questions
Q1) When an instrument is dishonored,only written notice is sufficient to hold secondary parties liable.
A)True
B)False
Q2) Kris transfers a note,on which Liu is the maker,to Mia,who takes it for value and in good faith.Mia knows that Kris breached the contract underlying the note,giving Liu a defense against payment.With respect to this note,Mia is
A)a knowledgeable holder in due course.
B)an ordinary holder.
C)an ordinary holder in due course.
D)an ordinary note taker.
Q3) Ada is the maker of a note,on which Bart is secondarily liable.Cash & Credit Company (C&C) is the current holder of the note.Bart will be obli?gated to pay the note if A)Ada defaults on the note.
B)C&C breaches a transfer warranty.
C)C&C negotiates the note to Delta Collection Agency,a third party.
D)C&C presents the note for payment.
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Chapter 25: Checks and Banking in the Digital Age
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Q1) A bank must be able to provide customers with legible copies of checks paid for up to A)one year.
B)five years.
C)seven years.
D)nine years.
Q2) A bank's responsibility to honor its customers' checks is NOT absolute.
A)True
B)False
Q3) A bank is NOT responsible for determining whether a signature on a customer's check is genuine.
A)True
B)False
Q4) The incompetence of a customer revokes a bank's authority to pay an item.
A)True
B)False
Q5) The Uniform Commercial Code governs checks.
A)True
B)False
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Chapter 26: Agency
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Q1) The relationship between a principal and an independent contractor always involves an agency relationship.
A)True
B)False
Q2) George and James create an agency relationship to facilitate the sale of illegal narcotics.This agency relationship
A)is illegal.
B)is legal.
C)will be recognized by some states,but not others.
D)can exist,but will be subject to fines for illegal activity.
Q3) An agency coupled with interest is a relationship created for the benefit of the principal.
A)True
B)False
Q4) A power of attorney can be given only to an actual attorney.
A)True
B)False
Q5) Authority declared in clear,direct,definite terms is express authority.
A)True
B)False
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Chapter 27: Employment and Immigration Law
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Q1) Which of the following is NOT a common form of electronic surveillance of employees in the workplace?
A)Reviewing employees' emails
B)Requiring employees to wear electronic location monitoring bracelets
C)Video-recording job performance
D)Listening to employees' telephone conversations
Q2) All unemployed workers are eligible for unemployment compensation.
A)True
B)False
Q3) An employee can usually recover benefits for injuries occurring on the commute to and from work.
A)True
B)False
Q4) Big Drill Oil Company employees one hundred workers.Big Drill must do all of the following except
A)keep occupational injury and illness records for each employee.
B)report any work-related diseases directly to OSHA.
C)report any employee death due to a work-related incident to OSHA within eight hours.
D)pay employees working more dangerous areas higher wages.
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Chapter 28: Discrimination and Labor Law
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Q1) Title VII of the Civil Rights Act of 1964 applies to which of the following?
A)An employer with five employees
B)An employer with ten employees
C)A labor union with twenty-five members
D)A labor union with twelve members
Q2) Lisa brings a lawsuit against her employer for unlawful discrimination.Lisa is successful in proving that she was unlawfully discriminated against by her employer.Lisa may be awarded
A)back pay,but not retroactive promotions.
B)retroactive promotions,but not back pay.
C)damages,but not back pay.
D)back pay,retroactive promotions and damages.
Q3) Dag is an employee of Ridge Mining Company.Under federal labor law,Dag and other employees have the right to
A)negotiate collectively with Ridge over employment conditions.
B)insist that Ridge require union membership as a condition of work.
C)interfere with the efforts of others to form labor organizations.
D)refuse to bargain with Ridge through their representatives.
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Chapter 29: Sole Proprietorships,partnerships, Limited
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Q1) An oral agreement to form a partnership can never be enforced.
A)True
B)False
Q2) A limited liability company can have only a limited number of shareholder-members.
A)True
B)False
Q3) Greta is a member of Hovercraft LLC.As a member,Greta is
A)a manager or officer,but not an owner.
B)an investor,but not a manager,officer,or owner.
C)an owner.
D)a participant,but not an investor,manager,officer,or owner.
Q4) A sharing of both profits and losses is the only requirement of a partnership.
A)True
B)False
Q5) Jody owns KuppaJava Kiosks,a sole proprietorship.Jody's liability is
A)limited by state statute and varies from state to state.
B)limited to the extent of capital expenditures.
C)limited to the extent of his or her original investment.
D)unlimited.
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Chapter 30: Formation and Termination of a Corporation
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Q1) Brock is a shareholder of Competent Homebuilders Corporation (CHC).For the last few years,business has not been profitable for CHC.The firm has lost money on its operations.There has been some profit through sales of company assets,but the board of directors has refused to declare a dividend.This last year,the firm's accountants failed to file fed?eral in?come tax returns and the board refused to pay the tax.Brock takes a close look at the firm and protests to the board,in particular over the fail?ure to declare a dividend,but the board ignores the complaint.Which of these events,if any,would form a ground for a court to order the dissolu?tion of CHC,on Brock's petition? If the court denies the petition,could Brock and the other shareholders dissolve CHC?
Q2) Eagle Financial Corporation merges with First Bank Corporation,with Eagle Financial absorbing First Bank.After the merger
A) a different,new corporation is the surviving corporation.
B) Eagle Financial and First Bank are both surviving corporations.
C) Eagle Financial is the surviving corporation.
D) First Bank is the surviving corporation.
Q3) A partnership cannot be a shareholder in an S corporation.
A)True
B)False
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Chapter 31: Management and Ownership of a Corporation
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Q1) Shareholders do not need to approve fundamental changes affecting the corporation before the changes can be effected.
A)True
B)False
Q2) The minimum number of members of a body of officials that must be present before business can validly be transacted is known as a quorum.
A)True B)False
Q3) A majority shareholder does not owe a fiduciary duty to minority shareholders under any circumstances.
A)True
B)False
Q4) A director does not need to disclose any conflict of interest before voting on a proposal.
A)True B)False
Q5) Choosing a new product line is a decision that would be made by shareholders. A)True B)False
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Chapter 32: Secured Transactions
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Q1) A floating lien cannot apply to the proceeds of the sale of after-acquired property.
A)True
B)False
Q2) City Bank's financing statement in collateral owned by Delta Waters Corporation will expire in less than a year.Filed timely,a continuation statement could extend the effectiveness of the financing statement for A)one year.
B)two years.
C)five years.
D)ten years.
Q3) Most of the customers in any business are buyers in the ordinary course of business. A)True
B)False
Q4) The person who owes the payment of a secured obligation is the secured party.
A)True
B)False
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Chapter 33: Creditors Rights and Remedies
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Q1) A pipe in Gert's house springs a leak.Gert contracts with Holly's Plumbing & Construction Company to repair the pipe and fix the dam?age to Gert's house.Gert pays 10 percent of the price in advance.Holly's does the work,but Gert refuses to pay the rest of the price.What can Holly's do,and how is it done?
Q2) Pruit performs a contract with Quint to reshingle the roof on Quint's house,but Quint does not pay.Pruit notifies Quint that Pruit will foreclose on the house and sell it to satisfy the debt.This is
A)a judicial lien.
B)a mechanic's lien.
C)an artisan's lien.
D)a violation of most state laws.
Q3) Refer to Fact Pattern 33-3.Other property Mary may own that may be ex?empt from satisfaction of judgment debts includes
A)any property that Mary wishes to exempt.
B)investments that Mary has made in her family's businesses.
C)recreational vehicles that Mary uses on weekends.
D)tools that Mary uses in her trade.
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Chapter 34: Bankruptcy
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Q1) A husband and wife may file a joint petition for bankruptcy.
A)True
B)False
Q2) Joe files a voluntary petition for Chapter 7 bankruptcy.His petition does NOT need to include
A)a list of Joe's secured creditors.
B)a list of Joe's unsecured creditors.
C)a list of the occupations of all Joe's creditors.
D)the addresses of all Joe's creditors.
Q3) Ciera buys a car from Town Motors.Less than a year later,Ciera files for bankruptcy under Chapter 13.Her plan must provide that Town retains a lien on the car until the entire debt is paid
A)under no circumstances.
B)if Town extended credit for all or part of the purchase price of the car.
C)if Ciera surrenders the car to Town.
D)if Ciera's other creditors do not object.
Q4) A discharge will be denied to a debtor who received a discharge within eight years of filing the current petition.
A)True
B)False
Page 36
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Chapter 35: Insurance
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Q1) Land Sales Company insures its real and personal property,as well as the lives of its key employees,to protect its financial interest should some event undermine its security.This is
A)risk management.
B)risk pooling.
C)risky.
D)risqué.
Q2) Ricky obtains an insurance policy that protects him from major hospital,medical or surgical expenses.This is
A)casualty insurance.
B)major medical insurance.
C)life insurance.
D)malpractice insurance.
Q3) Greg obtains from Helpful Insurance Company a policy that provides that Greg has thirty days after a premium's due date to pay it before the policy will be canceled.This is A)a coinsurance clause.
B)an antilapse clause.
C)an appraisal clause.
D)an incontestability clause.
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Chapter 36: Morgages and Foreclosures
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Q1) James obtains a mortgage loan from Willis Bank.If Willis Bank fails to record the mortgage
A)it could find itself in the position of an unsecured creditor.
B)nothing bad will happen.
C)James will not have to make payments.
D)it could be fined for violating lending regulations.
Q2) If a borrower does not pay a loan within a reasonable time after receiving a notice of default,then the borrower will receive a notice of sale.
A)True
B)False
Q3) The borrower receives the proceeds of a short sale.
A)True
B)False
Q4) An important law protecting borrowers by requiring lenders to disclose the terms of a loan in clear,readily understandable language is the
A)Uniform Commercial Code.
B)Truth-in-Lending Act.
C)Statue of Frauds.
D)Borrower Protection Act.
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Chapter 37: Personal Property and Bailments
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Q1) Fred and Joanne are married.Joanne purchases a car.Fred and Joanne each technically own an undivided one-half interest in the car.This is
A)a joint tenancy.
B)fee simple ownership.
C)community property.
D)illegal.
Q2) Helen owns heavy construction equipment and the tools to service it,as well as office furniture,including computers.Ilya owns a number of pat?ents,trademarks that identify the products made under those patents,and stock in the company that sells those products.Personal property in?cludes the items owned by
A)Helen and Ilya.
B)Helen only.
C)Ilya only.
D)neither Helen nor Ilya.
Q3) A finder of mislaid property is an involuntary bailee.
A)True
B)False
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Chapter 38: Real Property
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Q1) The exterior boundaries of land extend straight down for 500 feet and straight up for 500 feet.
A)True
B)False
Q2) A grantee is the person to whom property is being transferred.
A)True
B)False
Q3) Tyro has the right to drive across Ula's land,which is next to Tyro's prop?erty,to reach an access road.Tyro's right is
A)a license.
B)an easement.
C)a profit.
D)the power of eminent domain.
Q4) A warranty deed provides the most protection against defects of title.
A)True
B)False
Q5) John owns an orchard behind Kay's house and property.The only access to the orchard is Kay's driveway,which John uses to get to his land.Does John have an ownership interest in this use of Kay's driveway? If so,what is it?
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Chapter 39: Landlord and Tenant
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Q1) Gary has two houses.He allows his friend David to live in one of them without paying rent.David dies.David's tenancy
A)passes to his heirs indefinitely.
B)passes to his heirs for one year.
C)passes to his heirs for five years.
D)is terminated.
Q2) Wilma has a fixed-term tenancy for her apartment with HiQual Apartments.Wilma dies.Her tenancy
A)passes to her heirs as real property.
B)passes to her heirs as personal property.
C)is terminated.
D)becomes a tenancy at will.
Q3) A tenant's transfer of his or her entire interest in the leased property is an assignment.
A)True
B)False
Q4) A tenant is NOT responsible for damages he or she causes through negligence.
A)True
B)False
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Chapter 40: Wills and Trusts
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Q1) A will is required to be in writing only if real property is being transferred.
A)True
B)False
Q2) Undue influence can occur when a named beneficiary is in a position to influence the making of a will.
A)True
B)False
Q3) The word "Mom" can qualify as a signature on a will.
A)True
B)False
Q4) A testator is a personal representative named in a will.
A)True
B)False
Q5) A will is probated to establish its validity and to carry out the administra?tion of the estate.
A)True
B)False
Q6) A decedent is a person who has died.
A)True
B)False
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Chapter 41: Administrative Law
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Q1) An agency must conduct a regulatory flexibility analysis of any new regulation.
A)True
B)False
Q2) To notify the public of a proposed rule,the Food Safety and Inspection Service,like other federal agencies,publishes the proposal
A)in a nationally distributed newspaper.
B)in a trade journal available to members of the industry.
C)in the Federal Register.
D)on a public television station.
Q3) Congress leaves it to the Environmental Protection Agency to regulate the highly technical areas of air and water pollution.This is
A)the constitutional principle of checks and balances.
B)a delegation of tasks.
C)arbitrary and capricious.
D)a conflict with state administrative agencies,which take precedence.
Q4) The president can appoint and remove officers from executive agencies.
A)True
B)False
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Chapter 42: Antitrust Law
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Q1) When applying the rule of reason to determine whether an agreement violates Section 1 of the Sherman Act,a court will NOT consider
A)the purpose of the agreement.
B)the parties' market ability to implement the agreement.
C)the effect of the agreement on international trade.
D)the potential effect of the agreement on competition.
Q2) Bubbly Bottling Company is engaged in the soft-drink bottling and distribution industry in the states of New York and New Jersey.The firm currently has about 40 percent of the market for these products and related services.Carbonate Distribution Corporation competes with Bubbly in the same states.Carbonate has about 35 percent of the market.If Bubbly were to acquire the stock and assets of Carbonate,would Bubbly be in violation of any of the antitrust laws? If so,which one? Discuss fully.
Q3) Size alone does NOT determine whether a firm is a mo?nopoly.
A)True
B)False
Q4) The Clayton Act prohibits certain classes of price discrimination.
A)True
B)False
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Chapter 43: International Law
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Q1) In some cases,foreign states are not immune from the jurisdiction of U.S.courts.These circumstances are governed by the
A)Uniform Commercial Code.
B)Foreign Sovereign Immunities Act.
C)European Union.
D)North American Free Trade Agreement.
Q2) The simplest way for a U.S.firm to do business in a foreign mar?ket is to ex?port its products directly to that market.
A)True
B)False
Q3) Foreign exchange markets comprise a worldwide system for buying and selling currency.
A)True
B)False
Q4) When a U.S.firm wishes to increase its involvement in an international market,it normally establishes an agency relationship with a foreign firm.
A)True
B)False
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Page 45