Legal Aspects of Business Test
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Course Introduction
Legal Aspects of Business provides students with an understanding of the fundamental laws and legal frameworks that affect business operations. The course covers key topics such as contract law, company law, intellectual property rights, consumer protection, employment law, and the regulatory environment. Students learn to recognize legal risks, understand compliance requirements, and apply legal principles to real-world business scenarios. Emphasis is placed on the practical implications of legal rules in decision-making, risk management, and ethical business conduct.
Recommended Textbook
Business Law Today Text and Summarized Cases E Standard 9th Edition by Roger LeRoy Miller
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Chapter 1: The Legal Environment
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Q1) In a suit against Owen,Phil obtains specific performance.This is
A) an order to do or to refrain from doing a particular act.
B) an order to perform what was promised.
C) a payment of money or property as compensation.
D) the cancellation of a contract.
Answer: B
Q2) The title of a case appears as "Duck Sales Corp.v.Egret Supply Co." The party in whose favor the case was decided
A) could be either party.
B) must be neither party.
C) must be Duck.
D) must be Egret.
Answer: A
Q3) In Export Co.v.Imports,Inc.,there is no precedent on which the court can base a decision.The court can consider
A) neither public policy nor social customs and values.
B) public policy only.
C) public policy or social customs and values.
D) social customs and values only.
Answer: C
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Chapter 2: Constitutional Law
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Q1) Machismo Motor Sales Corporation regularly advertises its off-the-road and all-terrain vehicles and other products.Under the First Amendment,these ads and other commercial speech are given
A) less protection than noncommercial speech.
B) more protection than symbolic speech.
C) no protection.
D) the same protection as defamatory speech.
Answer: A
Q2) Equal protection means that the government must treat similarly situated individuals in a similar manner.
A)True
B)False
Answer: True
Q3) The First Amendment requires a complete separation of church and state.
A)True
B)False
Answer: False
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Chapter 3: Courts and Alternative Dispute Resolution
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Q1) To have standing to sue,a party must have been harmed or have been threatened with harm by the action about which he or she complains.
A)True
B)False
Answer: True
Q2) Minimum contacts with a jurisdiction are never enough to support jurisdiction over a nonresident defendant.
A)True
B)False
Answer: False
Q3) The function of the courts is to interpret and apply the law.
A)True
B)False
Answer: True
Q4) A counterclaim is raised by a plaintiff against a defendant's response to a complaint.
A)True
B)False Answer: False
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Chapter 4: Torts and Cyber Torts
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Q1) For purposes of establishing negligence,causation in fact exists if an injury would have occurred even without the defendant's act.
A)True
B)False
Q2) As a joke,Jem takes Kyla's business law textbook and hides it so that Kyla cannot find it during the week before the exam.Jem may have committed
A) appropriation.
B) conversion.
C) intentional infliction of emotional distress.
D) trespass to personal property.
Q3) If it can be shown that a trespass to land was warranted,a complete defense exists.
A)True
B)False
Q4) Harm must be foreseeable to be considered the proximate cause of an injury in negligence.
A)True
B)False
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Chapter 5: Intellectual Property and Internet Law
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Q1) A trademark must be registered to support a trademark infringement action.
A)True
B)False
Q2) A person can reproduce copyrighted material for purposes such as teaching,including multiple copies for classroom use,without paying royalties.
A)True
B)False
Q3) In 2010,Online Marketing Corporation registers its trademark as provided by federal law.After the first renewal,this registration
A) is renewable every ten years.
B) is renewable every twenty years.
C) runs for the life of the corporation plus seventy years.
D) runs forever.
Q4) Trademark dilution requires proof that consumers are likely to be confused by the unauthorized use of the mark.
A)True
B)False
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Chapter 6: Criminal Law
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Q1) It may be a crime to take another's property,but it is not a crime to receive stolen goods.
A)True
B)False
Q2) Vladimir is a "payday" lender charged with filing false claims in bankruptcy proceedings against his customer-debtors.The standard of proof to find a defendant who has been charged with a crime guilty is
A) a preponderance of the evidence.
B) beyond all doubt.
C) beyond a reasonable doubt.
D) clear and convincing evidence.
Q3) Thinking about killing someone constitutes the crime of attempted murder.
A)True
B)False
Q4) A defendant may be relieved of liability by showing that a criminal act was necessary to prevent an even greater harm.
A)True
B)False
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Chapter 7: Cyber Crime
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Q1) Any crime that requires knowledge of computer technology for its prosecution is a computer crime.
A)True
B)False
Q2) Swinborn sells "Tyger" steroids over the Internet.He is arrested and charged with the sale of a controlled substance.This is cyber crime,which is
A) a crime in which the letter "y" is used in the misspelling of a word.
B) a crime .that occurs in the virtual community of the Internet.
C) a crime that is less real than the same crime in the physical world.
D) no crime.
Q3) Patricia commits an act via e-mail against Othman Finance Company,a business in California,where the act is a cyber crime.Patricia resides in New York where the act is not a crime.Prosecution of Patricia in California involves questions of A) jurisdiction.
B) "maximum contacts."
C) the immunity of Internet service providers.
D) encryption.
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Page 9
Chapter 8: Ethics and Business Decision Making
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Q1) 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.
Q2) In deciding questions of corporate social responsibility,Valley Disposal & Recycling,Inc.,is concerned with
A) how the corporation can best fulfill any ethical duty to society.
B) the effect on corporate profits of ignoring any ethical duty to society.
C) whether the corporation owes any ethical duty to society.
D) all of the choices.
Q3) A business firm can sometimes predict whether a given action is legal.
A)True
B)False
Q4) To be ethical is to "do the right thing" but it does not otherwise "pay."
A)True
B)False
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Chapter 9: Nature and Classification
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Q1) A contract cannot be void if its purpose is legal.
A)True
B)False
Q2) InTown Delivery Service promises to deliver a certain couch to Kurt,who promises to pay for the service.If InTown does not perform,the firm may be required to A) do nothing.
B) make another promise.
C) pay damages.
D) perform a different service.
Q3) Employment Sources,Inc.,enters into a contract with Fred.If Fred is a minor,this contract is most likely A) enforceable.
B) unenforceable.
C) void.
D) voidable.
Q4) A promise is an assertion that something will or will not happen in the future.
A)True
B)False
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11
Chapter 10: Agreement in Traditional and E-Contracts
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Q1) An acceptance must be unequivocal.
A)True
B)False
Q2) Jane offers to sell Kyle three desks for his Lights & Lamps Company administrative office.Kyle sends a rejection first,then changes his mind and sends an acceptance.Whether they have a contract is determined by
A) Kyle's rejection.
B) Kyle's subjective intent.
C) whatever Jane decides.
D) whether Kyle's rejection or acceptance is received first.
Q3) An expression of opinion-"your customers will like this"-is an offer.
A)True
B)False
Q4) Beyond-the-Sea Corporation and Homeport Company make a deal for Homeport's products,via e-records.Under the UETA,an e-record is considered sent when it A) is signed and encrypted, and will be sent without changes.
B) is stored in the sender's back-up system.
C) is composed on the sender's computer.
D) leaves the sender's control.
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Chapter 11: Consideration, capacity, and Legality
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Q1) Cielo is fifteen.In most states,Cielo would be considered a minor because she is under the age of A) sixteen.
B) eighteen.
C) twenty.
D) twenty-one.
Q2) Odell owns Payroll Company,a bookkeeping service losing market share to Quik Work,Inc.Odell pays Remy $5,000 to steal a list of Quik's clients,to whom Odell will aggressively market Payroll's services.This deal is
A) enforceable.
B) void.
C) voidable at the option of either party.
D) voidable at the option of the party having less bargaining power.
Q3) An exculpatory clause in an employment contract is not enforceable if the clause is against public policy.
A)True
B)False
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Chapter 12: Defenses to Contract Enforceability
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Q1) Forcing someone to enter into a contract through fear created by threats is undue influence.
A)True
B)False
Q2) Elle buys a new textbook for $100 and a used car for $5,000,and signs a one-year lease for an apartment for $1,000 monthly rent to start at the beginning of the next month.The Statute of Frauds covers
A) the apartment lease, and the textbook and car purchases.
B) the apartment lease and the car purchase only.
C) the apartment lease only.
D) the textbook and car purchases only.
Q3) Gary threatens physical harm to force Hugh to sell his business,Imported Goods,Inc.,to Gary for a below-market price.This is A) duress.
B) fraud.
C) puffery.
D) undue influence.
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Chapter 13: Third Party Rights and Discharge
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Q1) Anything less than substantial performance is a material breach of contract.
A)True
B)False
Q2) Refer to Fact Pattern 13-2.Bell's repudiation is most likely
A) a material breach.
B) a minor breach.
C) Chris's breach.
D) no breach.
Q3) Refer to Fact Pattern 13-3.When the market price for apples exceeds the price in the contract with Fresh Produce,Haruko decides not to deliver the apples. This A) breaches the contract.
B) discharges the contract.
C) has no effect on the contract.
D) suspends the contract.
Q4) Contracts that are executory on both sides can be rescinded by agreement. A)True
B)False
Q5) A delegation relieves the party making it of the obligation to perform.
A)True
B)False
15
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Chapter 14: Breach and Remedies
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Q1) Lava Excavators,Inc.,needs a drill to continue its operations and orders one for $3,000 from Mining Supplies Company.Lava tells Mining that it must receive the drill by Tuesday or it will lose $10,000.Mining ships the drill late.Lava can recover
A) $13,000.
B) $10,000.
C) $3,000.
D) $0.
Q2) Quasi contracts allow the courts to act as if a contract exists when there is no contract.
A)True
B)False
Q3) Lou and Mira want to rescind their contract under which Lou sold an MP3 player to Mira for $50.To rescind the contract
A) Lou must return the $50 and Mira must return the player.
B) Lou must return the $50 only.
C) Mira must return the player only.
D) the parties can keep the "benefits" of their bargain.
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Page 16
Chapter 15: The Formation of Sales and Lease Contracts
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Q1) A contract between parties residing in different countries is subject to United Nations Convention on Contracts for the International Sale of Goods.
A)True B)False
Q2) A contract between parties residing in different countries is subject to Article 2A of the UCC.
A)True B)False
Q3) Fits Like A Glove Shoes,Inc.,and Retail Footwear Stores enter into a contract for a sale of shoes.The contract indicates that the price includes transportation costs to a specific destination by including the term
A) C.I.F.
B) delivery ex-ship.
C) F.A.S.
D) F.O.B.
Q4) If a seller is a merchant,and the seller holds the goods,the risk of loss cannot pass to a buyer.
A)True B)False
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Chapter 16: Performance Breach of Sales Lease Contracts
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Q1) If a buyer breaches a contract while the seller is still in possession of the goods,the seller can resell the goods and hold the buyer liable for any loss.
A)True
B)False
Q2) If a lessee wrongfully refuses to accept goods that conform to a contract,the lessor must tender substitute goods.
A)True
B)False
Q3) According to the court in Case 16.1,Maple Farms,Inc.v.City School District of Elmira,the defense of commercial impracticability will not excuse the performance of a contractual obligation when there is an increase in the seller's costs while the contract is in force
A) unless the increase in the seller's costs is substantial.
B) under any circumstances.
C) unless the increase in the seller's costs makes it impossible for the seller to perform without losing money.
D) unless the increase in the seller's costs was not foreseeable at the time the contract was formed.
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Chapter 17: Warranties and Product Liability
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Q1) Oceanic Vessels,Inc.,and Pacific Harbor Company enter into a contract for a sale of a boat.Oceanic is a merchant who deals in goods of the kind sold.The goods are defective.Under the UCC,the implied warranty of merchantability is breached A) only if Oceanic did not know about and could not have discovered the defect. B) only if Oceanic did not know about the defect.
C) only if Oceanic knew about or could have discovered the defect. D) regardless of what Oceanic knew or could have discovered.
Q2) Universal Assembly Company makes espresso machines and sells one to Vim through a misrepresentation on the label on which Vim relies and that results in an injury to Vim.Universal is most likely liable for A) a commonly known danger. B) fraud.
C) privity.
D) puffery.
Q3) Only a statement made after a contract is entered into can be an express warranty. A)True B)False
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Chapter 18: Negotiable Instrument: Transferability Liability
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Q1) An instrument is nonnegotiable unless the word "negotiable" is printed on it.
A)True
B)False
Q2) Rodeo Ranch's agent Slim is authorized to draw checks on Rodeo Ranch's account in Town Bank.Upper Range Corporation is a Rodeo Ranch supplier.Slim writes a check "pay to the order of Upper Range [signed] Slim," indorses the check in Upper Range's name,and deposits it in his account in Verity Bank.If Verity Bank collects payment,the ultimate party most likely to suffer the loss is A) no one.
B) Rodeo Ranch.
C) Town Bank.
D) Upper Range.
Q3) To be negotiable,an instrument must be signed in the lower right-hand corner.
A)True
B)False
Q4) Pola wants to transfer a check to Quin.The check is defective if it A) has been previously dishonored.
B) has no irregularities on its face.
C) is not overdue.
D) is so complete that no element of negotiability is lacking.
Page 20
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Chapter 19: Checks and Banking in the Digital Age
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Q1) Currently,it is not clear which,if any,laws apply to the security of e-money payment information.
A)True
B)False
Q2) If a customer's debit card is lost or stolen,the customer will not be liable for any unauthorized use of the card.
A)True
B)False
Q3) A bank cannot recover from a holder who cashes a check bearing a forged indorsement once the bank has accepted and paid the item.
A)True
B)False
Q4) Generally,the funds represented by a deposited local check must be available for withdrawal within one business day.
A)True
B)False
Q5) Gaining unauthorized access to an electronic fund transfer system is a felony. A)True B)False
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Chapter 20: Security Interests in Personal Property
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Q1) The state office in which a financing statement should be filed depends on the creditor's location.
A)True
B)False
Q2) The concept of a floating lien does not apply to a shifting stock of goods.
A)True
B)False
Q3) The payment of Jose's debt to Klint is guaranteed by Jose's personal property.The process by which Klint can protect himself against the claims of third parties to this property is
A) attachment.
B) communication.
C) perfection.
D) search and seizure.
Q4) A security agreement must be filed in person to be valid and enforceable.
A)True
B)False
Q5) To be valid,a security agreement must contain a description of the collateral. A)True
B)False
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Chapter 21: Creditors Rights and Bankruptcy
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Q1) Refer to Fact Pattern 21-1.The highest priority belongs to
A) Kay and Music, Inc.
B) Kay only.
C) Lora only.
D) Music, Inc., only.
Q2) Khali's debt to Lew is past due.Lew obtains a judgment against Khali to collect the debt,but Khali refuses to pay.Lew asks the court to order Khali's employer to pay a portion of Khali's paycheck to Lew.This is a request for
A) an exemption from most federal limits on creditors' actions.
B) an order of garnishment.
C) an order that would violate most state laws.
D) a right of contribution.
Q3) Unsecured parties have priority over secured parties to the proceeds from the disposition of collateral on the distribution of a debtor's estate.
A)True
B)False
Q4) Debts based on fraud may be discharged under Chapter 13.
A)True
B)False
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Chapter 22: International Law in a Global Economy
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Q1) Business Corporation,a U.S.firm,and Comercial,S.A.,a Mexican firm,are parties to a contract that does not specify a choice of law.The governing law is that of A) any third country.
B) Spain.
C) the buyer's place of business.
D) the seller's place of business.
Q2) The government of the United States and the governments of other nations have the power to enforce their respective national laws within their borders.The power to enforce international law within the borders of all nations rests with A) no court or international organization.
B) the European Union.
C) the International Court of Justice.
D) the United Nations General Assembly.
Q3) The management of Sport Shoes Corporation,a U.S.firm,wants to expand into foreign investment and employment markets.They are considering either opening their own production facility in a foreign country or entering into a licensing agreement with a foreign firm.What are the advantages and disadvantages of each of these courses of action?
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Chapter 23: Agency Relationships in Business
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Q1) Lenore is the sole proprietor of Mall Kiosks.With respect to contracting for her own business interests,Lenore is
A) an agent and has the authority.
B) an agent but does not have the authority.
C) not an agent and does not have the authority.
D) not an agent but does have the authority.
Q2) An agent is authorized to act on behalf of a principal in doing business with third parties.
A)True
B)False
Q3) Sonia manages a Tasty Pastry store for United Food Company.To manage the business,Sonia's authority can be implied by
A) an inference from the position Sonia occupies.
B) any inference a reasonable customer or supplier would make.
C) any inference Sonia chooses to make.
D) no inference.
Q4) A power of attorney can be given only to an actual attorney.
A)True
B)False
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Chapter 24: Employment,immigration,and Labor Law
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Q1) Once an employee receives workers' compensation,he or she can maintain a suit against the employer for negligence.
A)True
B)False
Q2) Employee contributions to pension plans vest immediately.
A)True
B)False
Q3) An employer can require an employee to take a lie-detector test when investigating losses attributable to theft.
A)True
B)False
Q4) Non-workers do not have a right to picket an employer during a strike.
A)True
B)False
Q5) Federal law governs unions' internal business procedures.
A)True
B)False
Q6) Federal labor law protects employees' right to join labor unions.
A)True
B)False
Page 26
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Chapter 25: Employment Discrimination
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Q1) Refer to Fact Pattern 25-1.Fay files a suit against GCC under Title VII.To succeed,Fay must show that Hank's statement was
A) a legitimate, nondiscriminatory reason for Fay's discharge.
B) also Fay's feeling about pranks at GCC.
C) only a pretext for Fay's discharge.
D) unofficial GCC policy.
Q2) Refer to Fact Pattern 25-4. To successfully defend against Beth's claim,COC will have to show that
A) Beth consistently failed to meet the essential requirements of her job.
B) COC cannot make changes to the doors without undue hardship.
C) Dian is qualified for Beth's position.
D) the doors were not installed as an act of intentional discrimination.
Q3) Under current law,an employer cannot adopt an affirmative action plan.
A)True
B)False
Q4) Under the Americans with Disabilities Act of 1990,a person with a physical impairment that "substantially limits" everyday activities is disabled.
A)True
B)False
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Chapter 26: Sole Proprietorships and Private Franchises
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Q1) Nina wants the exclusive right to sell Oven-Rite Corporation appliances in a certain area.If Oven-Rite agrees,it will likely require Nina to pay
A) a license fee and a percentage of the sales.
B) a license fee only.
C) a percentage of the sales only.
D) neither a license fee nor a percentage of the sales.
Q2) Worldwide Realtors,Inc.,sells a franchise to XL Sales Company.XL is
A) a franchisee.
B) a franchisor.
C) an agent.
D) a principal.
Q3) Pat enters into an agreement with Ole! Food,Inc.,to operate a franchise in Region City.Later,Ole! grants franchises to others within the city,Pat files a suit to close them.This suit will likely
A) fail because excluding competitors violates the antitrust laws.
B) fail if Ole! did not give Pat exclusive rights to Region City.
C) succeed if Pat paid a franchise fee.
D) succeed if Pat was the first Ole! representative in Region City.
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Chapter 27: All Forms of Partnerships
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Q1) Connie,Drew,and Ellen are the general partners of Foreign Auto Repair,a limited partnership.Connie dies.The partnership can
A) continue only after a distribution of its assets.
B) continue only as a general partnership.
C) continue only if Drew and Ellen consent.
D) not continue because Connie's death dissolves the firm.
Q2) A corporation can be a partner.
A)True
B)False
Q3) A partner may not pursue his or her own interest without violating the fiduciary duties that he or she owes to the firm.
A)True
B)False
Q4) Bo and Clancy decide to do business as Marketing & Promotion Services.To be a partnership,this association can result from an agreement that is
A) express, but not from an agreement that is implied.
B) implied, but not from an agreement that is express.
C) oral, written, or implied by conduct.
D) written, but not from an agreement that is oral or implied.
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Chapter 28: Limited Liability Companies Special Business
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Q1) China Bank is a foreign entity-a firm owned and operated by investors in a foreign country.With respect to an LLC in the United States,China Bank can A) act as a creditor, but cannot otherwise invest or participate.
B) become a member.
C) not become a member, but can participate in its operations.
D) not become a member or otherwise participate in its operations.
Q2) A syndicate may exist in the form of a partnership but not a corporation.
A)True
B)False
Q3) Vela and other farmers in Washington County form a business organization to provide,without profit,an economic service to its members.This is A) a business trust.
B) a cooperative.
C) a corporation.
D) a joint stock company.
Q4) A limited liability company is a legal entity apart from its owners.
A)True
B)False
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Chapter 29: Corporate Formation, merger, and Termination
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Q1) Inez and Jason are the shareholders and directors of Kleen Kustodial Corporation.Lily and Moe are Kleen's officers.As in other corporations,the responsibility for the overall management of Kleen rests with A) the board of directors.
B) the officers.
C) the owners.
D) the shareholders.
Q2) To qualify as a professional corporation,Medical Clinic,P.C.,
A) must be a corporation formed by professionals.
B) must grant all shareholders voting rights.
C) must have at least thirty-five shareholders.
D) all of the choices.
Q3) Standard 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.
Q4) A court can dissolve a corporation for mismanagement.
A)True
B)False
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Chapter 30: Corporate Directors, officers, Shareholders
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Q1) Niche Stores,Inc.,must hold a shareholders' meeting
A) once a month.
B) once a year.
C) once every two years.
D) only when it is called by the board of directors.
Q2) Shareholders have a right to inspect corporate books and records.
A)True
B)False
Q3) Natalie is a shareholder of Off-Road Vehicle Company.As a shareholder,Natalie does not have
A) a right to compensation.
B) dividend rights.
C) inspection rights.
D) preemptive rights.
Q4) Brad is a shareholder of Concert Promotion Corporation.As a shareholder,Brad can A) authorize major corporate policy decisions.
B) decide to issue stock and bonds, and declare dividends.
C) select and remove corporate officers.
D) vote to amend the articles of incorporation or bylaws.
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Chapter 31: Investor Protection, insider Trading, Corp Gov
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Q1) Securities of charitable organizations are exempt from the registration requirement of the 1933 Securities Act.
A)True
B)False
Q2) SEC Rule 10b-5 applies in relatively few cases involving the trading of securities.
A)True
B)False
Q3) State securities laws apply only to interstate transactions.
A)True
B)False
Q4) 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.
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Chapter 32: Promoting Competition
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Q1) Studious Review Guides,Inc.,has the power to control the market for its product.Antitrust law regulates
A) how Studious acquired its power and what it does with it.
B) neither how Studious acquired its power nor what it does with it.
C) only how Studious acquired its power.
D) only what Studious does with its power.
Q2) A firm can have market power without violating antitrust law.
A)True
B)False
Q3) Minimum resale price maintenance agreements are subject to analysis under the rule of reason.
A)True
B)False
Q4) Persons in foreign nations cannot be subject to U.S.antitrust law.
A)True
B)False
Q5) Cooperative research by small-business firms is exempt from antitrust law.
A)True
B)False
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Chapter 33: Consumer and Environmental Law
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Q1) Jack owns land located outside Metro City.Jack sells the land to Quality Disposal,Inc.,which establishes a hazardous waste disposal facility at the site.Quality Disposal accepts only waste transported by Regional Trucking Company exclusively from Consolidated Industries,Inc.Several years later,Quality Disposal closes its facility and sells the land to Price Rite Corporation,which builds a Price Rite Discount Store on the site.Meanwhile,some of Metro's citizens complain to the Environmental Protection Agency (EPA)that Metro's municipal water supply is polluted.The EPA investigates and discovers that the sources of the pollution are leaks of hazardous waste from what is now the Price Rite property.The EPA cleans up the site.Who can be held liable for the cost of cleaning up the site? What standards must Metro meet regarding the water?
Q2) Counteradvertising is advertising that counters a competitor's claims.
A)True
B)False
Q3) It is generally illegal to send an ad via fax without the recipient's permission.
A)True
B)False
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Chapter 34: Liability of Accountants Other Professionals
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Q1) A client's negligence may constitute a defense to a charge of negligence against an accountant.
A)True
B)False
Q2) An accountant's working papers are the documents that are used and developed during an audit.
A)True
B)False
Q3) An attorney may be liable in negligence to any third party who the attorney knows will rely on the attorney's work.
A)True
B)False
Q4) Gert,an accountant,contracts to conduct an audit for Hailey.In performing the audit,Gert fails to detect certain misconduct.Gert is most likely
A) liable if a normal audit would have revealed the misconduct.
B) liable if Gert issues a specifically qualified opinion.
C) not liable if Gert generally disclaims any liability.
D) not liable if the misconduct was due to Hailey's negligence.
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Chapter 35: Personal Property and Bailments
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Q1) Edna and Flavia buy a boat that they dock in a marina near Gulfport,Mississippi.On the death of either owner,that owner's interest in the boat passes to her heirs.This is A) a joint tenancy.
B) a tenancy by the entirety.
C) a tenancy in common.
D) ownership in fee simple absolute.
Q2) Mona asks Ned if she can store her furniture in his garage while she serves a tour of duty with the U.S.Marines Corps.Ned agrees.This is a bailment for A) neither party's benefit.
B) the parties' mutual benefit.
C) the sole benefit of the bailee.
D) the sole benefit of the bailor.
Q3) Rhett works at Scarlett's Sandwich Café.After work,in the parking lot,Rhett finds a diamond ring lost by Thalia.Title to the ring is possessed by A) Rhett.
B) Scarlett's.
C) Thalia.
D) the state.
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Chapter 36: Real Property and Landlord-Tenant Law
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Q1) Bren leases an apartment from Cris for one year.After two months,she sublets the premises for the next six months to Dee,without obtaining Cris's consent.Dee pays the rent for only four months.For the last two months of Dee's six-month term,Bren is
A) liable for the rent, because Dee defaulted.
B) liable for the rent, because the sublease lacked Cris's consent.
C) not liable for the rent, because Bren does not own the apartment.
D) not liable for the rent, because Bren sublet the premises to Dee.
Q2) Mineral Products Corporation,which owns no land,has a right to mine the copper from Natural Resource Company's land.Mineral's right is
A) a leasehold estate.
B) a license.
C) an easement.
D) a profit.
Q3) A warranty deed provides the most protection against defects of title.
A)True
B)False
Q4) In most states,the seller of a new house warrants that it is fit for habitation.
A)True
B)False
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Chapter 37: Insurance, wills, and Trusts
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Q1) Ginny obtains a health-insurance policy for her family from Hope Insurance Company.The policy includes an incontestability clause.Under such a clause,after a policy has been in force for a specified period or time,such as two or three years
A) Ginny cannot contest Hope's insurable interest.
B) Ginny cannot contest Hope's refusal to pay a claim under the policy.
C) Hope cannot contest Ginny's eligibility for continued coverage.
D) Hope cannot contest Ginny's statements in the application.
Q2) A person can insure anything in which he or she has an insurable interest.
A)True
B)False
Q3) Don executes a will leaving half of his farm to his spouse Elsie and the rest to his sons,Frank and Greg,in equal shares.The will disinherits a third son,Hal.Don and Elsie divorce,but Don dies before changing his will.Under the Uniform Probate Code
A) Elsie receives half of the farm, and Frank and Greg share the rest.
B) Elsie receives half of the farm, and Frank, Greg, and Hal share the rest.
C) Frank and Greg receive the entire estate in equal shares.
D) the state inherits the entire estate.
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