Download BUSINESS LAW EXAM TEST BANK(2021-2022 and more Exams Business Management and Analysis in PDF only on Docsity!
TEST BANK(2021-
True/ False
DEPARTMENT EXAM TEST BANK
Indicate whether the sentence or statement is true or false.
1. _F The offeror is the party with the power to decide whether to create a contract. 2. T An offer made as a joke, where a reasonable person would conclude that it was made as a joke, cannot result in a contract. 3. T The communication of an offer can be made by the offeror or the offeror's agent. 4. T Generally, advertisements, catalogs, price lists, etc. are not treated as offers. 5. _F A counteroffer is treated as both a revocation and a new offer. 6. T Consideration can consist of giving up a legal right. 7. _T A promise to act or to refrain from doing an act can serve as consideration. 8. F The mirror image rule permits the offeree's acceptance of a contract to vary from the offer. 9. F A person who delegates his contractual duties is fully relieved of any further duty to perform under that contract. 10. _T When both parties to a contract are minors, either or both of them may avoid the contract. 11. _F A parent or parents who sign a contract on behalf of their minor child may disaffirm the contract just as their child may. 12. F A party who makes a mistake about the value of the object of a contract is normally permitted to avoid the contract. 13. _T A plaintiff must prove that he suffered actual injury to recover damages for fraud. 14. _F A party to a contract may delegate his rights arising from the contract to another person. 15. T The nonbreaching party normally may not recover punitive damages in a breach of contract claim. 16. _F Expenses, such as those incurred to obtain performance from a source other
TEST BANK(2021-
than the original contracting party, are called consequential damages.
17. T An express contract may be either written or oral. 18. F An incidental beneficiary can directly sue the maker of a contract in the case of breach. 19. T The mirror image rule requires that the acceptance exactly match the offer. 20. T Giving up a legal right to do something is enough to legally qualify as consideration. 21. F_ A quasi contract is another name for an oral contract. 22. F "I promise to pay you $100 if you will promise to fix my car next month." This is an offer for a unilateral contract. 23. _T If a person who has been declared incompetent by a court enters into an agreement, that agreement is void, because it does not meet all the requirements of a binding contract. 24. T Alice makes a material misrepresentation of fact to Betty, and based upon the misrepresentation, Betty enters into a contract. Betty now realizes she was deceived and wants to get out of the contract. This contract is voidable at Betty's option only. 25. _F Nathan promises to take Debra to the show on Friday night. He then changes his mind so that he can stay home and study his business law. Nathan can be sued for breach of contract by Debra for breaking his promise. 26. _F Generally, an offer is effective as soon as it is dispatched. 27. _T An offer must be communicated to the offeree or his agent in order for the offer to be effective. 28. _F If Bill tells Sara that he will give her two days to decide if she wants to buy his car, he cannot sell it to anyone else during that time. 29. _T Generally, a contract exists when an offer has been accepted. 30. T If the offer specifies it MUST be accepted by letter, a telegram will not be a valid means of acceptance. 31. _F If an offer states that it MUST be received by a certain date, receipt is presumed in those situations when acceptance is mailed.
TEST BANK(2021-
merchant.
47. _F Pat, who owns an appliance store, has a garage sale at his home where he sells old furniture and books. He sells a set of books to his neighbor Judy. Pat is considered a merchant under Article 2 of the UCC in selling the books to Judy. 48. T The UCC imposes a duty of good faith on the performance and enforcement of every contract it covers. 49. T Under a unilateral contract only one party makes a promise. 50. F A void contract is a contract that one or both parties may cancel, at their option. 51. T A promises to pay B $50 if B will mow A's lawn. B completely and satisfactorily mows A's lawn. This is a unilateral contract. 52. F An express contract is a contract that is evidenced by a writing. 53. F A revocation normally is effective at the time it is dispatched by the offeror. 54. F A rejection normally is effective at the time it is dispatched by the offeree. 55. F The offeror's death automatically terminates an offer, but the offeree's death does not. 56. T An advertisement offering a reward for the return of lost property usually is treated as an offer for a uilateral contract. 57. F An assignee must give consideration to the assignor in exchange for the assignment.
TEST BANK(2021-
58. T In general, ambiguities in a written agreement are resolved against the party who drafted the agreement. 59. F Under the "American Rule" governing successive assignments, the first assignee in time has the superior right. 60. F Rolland just bought a new pair of eye glasses. He had to go to the eye doctor for an exam and to get a prescription. He then took the prescription to the eye-glass store to by his new glasses. Rolland’s visit to the eye doctor is governed by the UCC; the purchase of his glasses from the eye-glasses store is not. 61. _F The mirror image rule permits the offeree's acceptance of a contract to materially differ from the offer. 62. _F A counter-offer will generally be treated as an implied revocation, and a new offer. 63. F If a rejection is placed in the mail, with the proper address and postage, it will generally be considered effective on “deposit.” 64. T One of the key issues in a promissory estoppel case is whether the defendant made a promise to the plaintiff that the plaintiff detrimentally relied upon. 65. _T In order for an offer to be legally valid under the common law, it must have reasonably definite terms. 66. F Advertisements are typically considered valid offers. 67. _T One purpose of contract law is to make business matters more predictable. 68. _T The elements to a contract are agreement, consideration, legality, and capacity. 69. F Robert agrees to buy a car from Jane for $400. This contract must be in writing to be enforceable. 70. F “I'll pay you $1,000 if you promise to paint my house this month.” If the offeree accepts, this is a unilateral contract. 71. F A person who makes a contractual offer is referred to as an “offeree.” 72. F A person who makes a contractual promise is referred to as a “promisee.” 73. F All promises are enforceable as contracts. 74. T Advertisements are generally not considered as offers to enter into a contract. 75. T Under the common law, an offeree’s proposal to make a material change in the terms of an offer will most likely constitute a counter-offer. 76. F Mary was mistaken about a material fact concerning a contract she made with
TEST BANK(2021-
89. T An “express” contract must be in writing. 90. F Parol evidence is never admissible. 91. F If an offeree makes a counteroffer, he becomes the “counter-offeror.” 92. F The UCC applies to contracts for services as well as to contracts for the sale of goods. 93. F Under the UCC, the mirror image rule applies in the same manner as under common law. 94. T In ordinary sales transactions, the implied warranty of fitness for a particular 95. F Implied warranties of merchantability can never be disclaimed. 96. T A model used in connection with selling goods will usually amount to a warranty that the goods will be as the model indicates. 97. F A statement that a particular truck can haul a 3,000 pound load would be treated as an opinion and would not become an express warranty. 98. T The implied warranty of merchantability requires that goods be fit for the ordinary purposes for which they are intended. 99. T For the implied warranty of fitness for a particular purpose to apply, the seller must have actually known the purpose for which the buyer was purchasing the goods. 100. _T An implied warranty of merchantability arises in every sale or lease by a merchant. 101. _F A seller's statement that "this is a terrific used car" generally creates an express warranty. 102. _F A buyer from a thief can acquire title to the goods as a good faith purchaser. 103. T A contract for the sale of goods must include a price to be enforceable under the UCC. 104. T In ordinary sales transactions, the warranty of title can be disclaimed or modified only by specific language in a contract. 105. _F Implied warranties of merchantability can never be disclaimed. 106. _T According to the UCC, unless otherwise specified or agreed upon, all goods in a contract must be rendered in a single delivery. 107. _F The UCC, not common law, covers the sale of real estate and services. 108. _T When an offer governed by the UCC does not specify a means of acceptance, it can be accepted by any means reasonable under the circumstances. 109. _F The UCC always governs breach of contract cases involving a combination of
TEST BANK(2021-
services and tangible movable goods.
110. _T In order to be liable for negligence a person must have owed a duty of care to the plaintiff. 111. _T Tim and his friend are playing catch in the back yard when Tim suddenly throws the ball over the fence into the neighbor's yard where it breaks a window. This is trespass to real property, even if Tim himself does not go onto the property to get the ball. 112. _T Truth is a complete defense to defamation. 113. _T Arthur offers Bob, an employee of Carl, a job with his company at a yearly salary of $10,000 more than Bob receives under the contractual relationship between Bob and Carl. Arthur knows about the contract between Bob and Carl and knows that the contract should run for another five years, but Arthur wants Bob to work for him. Arthur probably is liable to Carl for intentional interference with contractual relations. 114. _F The same act can never be both a tort and a crime. 115. F Because he’s a good friend, and has known Hilda a long time, Scott fixes Hilda’s car as a surprise for her birthday. When Hilda sees it, she is so happy, she promises to give Scott $1000 the following week for doing the work. He gratefully accepts. A court would likely find that: 1) this promise to be supported by valid consideration; and 2) Hilda’s promise to pay $1000 is enforceable as a contract. 116. F One distinction between nuisance and trespass to land is that trespass to land involves intrusions by human beings, while nuisance involves intrusions by other forces. 117. F In order to be liable for conversion, the defendant must know that the property rightfully belongs to someone else.
TEST BANK(2021-
government from those produced by private corporations.
136. T Brad doesn't like Rob and especially dislikes Rob's new felt hat, so he intentionally knocks it off Rob's head in order to embarrass Rob. Brad has committed a battery. 137. T In a defamation action, the plaintiff must prove that the defendant communicated a false statement to a third party. 138. T A tort is a violation of a duty imposed by the civil law. 139. T Under the new Restatement (Third) of Torts, a manufacturing defect exists only when it is shown that: 1) the product has departed from its intended design; and 2) the manufacturer failed to exercise “due care” in the manufacturing process. 140. F Written defamation is called "slander." 141. T Opinion is generally a valid defense in a defamation lawsuit because it cannot be proven to be true or false. 142. T In order for a plaintiff to win a case involving intentional infliction of emotional distress, she must prove the defendant acted in an extreme and outrageous manner. 143. F Prior to any battery, an assault (even if only momentarily) must have occurred. 144. T Punitive damages are intended to punish the defendant. 145. F An employee who divulges secret trade information cannot be sued.
TEST BANK(2021-
146. T Infringement is the unauthorized use of the intellectual property of another 147. F Electronic surveillance for the purpose of acquiring trade secrets is permissible under the law of unfair competition. 148. T For a mark to be protected under federal law, it must be registered with the Patent and Trademark Office. 149. T Trade secrets are information held as confidential by a company and its employees. 150. T A trademark differs from a service mark in that the latter describes services. 151. T A copyright does not last forever. 152. T A copyright would protect a photograph. 153. T Georgia's company may lawfully discover Samantha's company's trade secrets if Samntha's company fails to take reasonable precautions to protect their trade secrets. 154. F A patent may be renewed. 155. T_ Knowing and intentional infringement of a mark can be a criminal offense. 156. _T Komco Computer Company has developed a new and innovative magazine and television ad campaign that it would like to protect from use by its competitors. Komco may copyright its magazine and television ads. 157. _T The word "truck" cannot be a trademark for trucks, although it could be a trademark for a new brand of designer jeans. 158. _F A patent is available for an idea as well as a tangible application. 159. T Computer software may be patentable. 160. T If a trademarked name acquires a generic meaning the owner of the trademark loses protection. 161. F Persons found liable for a tort usually must either pay a fine or serve time in prison. 162. T Some torts are crimes. 163. T “Res ipsa loquitur” means “the thing speaks for itself” and raises a presumption of breach of duty and causation in negligence cases. 164. _F The plaintiff's burden of proof in a tort action is beyond a reasonable doubt. 165. T Bob writes an all-new, original, marching song. Bob’s song is copyrightable. 166. T Dan lends Susan $500. She agrees to pay Dan $100 a month until the $500 is paid. She gives Dan her diamond ring to hold until she fully satisfies the debt. The ring
TEST BANK(2021-
175. F A security agreement may cover after-acquired property of the debtor--if it says so. 176. T_ Attachment of a security interest is a necessary condition for its perfection. 177. _F Bob has not paid his ex-wife alimony as required under court order. His ex-wife is trying to collect the alimony Bob owes her. Bob files a bankruptcy petition. This automatically stays his ex-wife's collection efforts. 178. _F Negligence may best be described as an intentional tort. 179. _T When a court determines whether the defendant has breached his or her duty of care to the plaintiff, the court asks whether the defendant acted the way a reasonable person would in similar circumstances. 180. _T Compensatory damages include damages for past and future pain and suffering. 181. _T A company is generally not liable for the criminal acts of its employees. 182. _T One who participates in an activity subject to strict liability will be held liable for damages resulting from the activity even if he exercised reasonable care in undertaking the activity. 183. _T Strict liability for defective products requires the plaintiff to show there was a defect in the product that caused the injury. 184. _T In some cases, failure to warn about a product's dangers can make an otherwise safe product defective. 185. _T Generally, sellers must design their products to be safe when foreseeably misused. 186. _T To succeed in a product liability suit based on strict liability, a plaintiff does not need to prove why or how a product became defective. 187. _T Defendants who engage in ultrahazardous activities are almost always strictly liable for any harm they cause. 188. _T A defendant who engages in an ultrahazardous activity is liable for any harm that results from the activity. 189. _T Unless the warranty of merchantability is expressly disclaimed, all merchants warrant that the goods they sell are fit for the general purpose for which they are intended to be used. 190. _F A security interest is enforceable only if the collateral is in the possession of the secured party.
TEST BANK(2021-
191. F To have an enforceable security interest in collateral that is in the possession of the secured party, there must be a written security agreement. 192. T_ A security interest is not enforceable unless the creditor's rights have attached to the collateral. 193. F A security agreement's description of collateral as "all the debtor's assets" is sufficient to reasonably identify the property. 194. T To create an enforceable security interest, the secured party must give value. 195. F Collateral is not the subject of a security interest. 196. T An authenticated security agreement can be in an electronic medium. 197. F For a creditor to have an enforceable security interest, it is necessary that the debtor have rights in the collateral. 198. F A chair bought by a business office would be classified as a consumer good. 199. T A financing statement is effective even if it is filed electronically. 200. T For a financing statement to be valid, it must contain a description of the collateral. 201. F An improper filing does not render a secured party unperfected. 202. T The state office in which a financing statement should be filed depends on the debtor's location. 203. _F A pledge is a promise made by a debtor to take reasonable care of the property. 204. _F Filing a financing statement with the appropriate public office is the only way to perfect a purchase-money security interest in consumer goods.
TEST BANK(2021-
222. F A creditor's extension of time to a debtor for making payment, without the consent of the surety, will not discharge the surety. 223. F Filing bankruptcy will automatically discharge all debts, including student loans and child support payments. 224. T A creditor with an artisan’s lien on property can sell the property to satisfy the debt. 225. T A guarantor is secondarily liable on an obligation. 226. T A guarantor becomes primarily liable only when a debtor cannot pay a debt. 227. F Before a surety can be required to answer for the debt of a debtor, the debtor must have defaulted on the underlying obligation. Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. 228. _C In order for a contract to be valid, it must: a. be made by a writing signed by adults b. be fully performed on both sides c. contain an offer, acceptance, and consideration d. be properly filed
TEST BANK(2021-
229. _A Consideration can best be described as: a. Something of legal value b. Thinking about entering into a contract c. A counteroffer d. A signature on a contract 230. _D In order for someone to avoid a contract on the grounds of intoxication, the level of intoxication must have been: a. At or above the legal limit b. Only high enough that he was able to notice it c. At least as high as that of the other party d. So great that he didn’t comprehend the nature of the agreement he was entering into 231. B Jill, aged 30, enters into a written contract for the sale of her car with Ginny, aged 17. Under these facts: a. Jill may disaffirm the contact since Ginny is a minor b. Ginny can disaffirm the contract but only until a reasonable time after she turns 18 c. The contract is void d. The contract is illegal 232. D If a contract or contract clause is found to be unconscionable, the courts can do which of the following? a. Refuse to enforce the contract b. Refuse to enforce only the unconscionable portion c. Limit the application of the unconscionable portion d. a, b, and c 233. D George and Martha enter into an oral contract for the sale of George's office building. Before Martha takes possession, this contract is: a. Enforceable by George only b. Enforceable by Martha only
TEST BANK(2021-
236. D John offers to pay Mary $100 if she can drive at 100 miles per hour on Interstate 95 for at least five minutes. If Mary drives her Mustang at 100 miles per hour on Interstate 95 for six minutes, she and John will have formed a. A bilateral contract b. A unilateral contract c. A performance contract d. No contract 237. A Al tells Barb that he will buy her textbooks from the previous semester for $75. Barb agrees. Al and Barb have: a. An express contract b. An implied-in-fact contract c. An implied-in-law contract d. A quasi contract 238. E One often hears the expression “time is of the essence” which suggests that doing things in a timely fashion is important. If that is the case, which of the following is presumed to be a reasonable amount of time when considering whether an offer has expired? a. Forty-eight hours b. Seven days c. Thirty days d. Forty-five days e. There is no set amount of time and what constitutes a reasonable amount of time varies depending upon the subject matter of the offer. 239. _C U.S. Stone promises to pay its employees a year-end bonus "if it seems like a good idea at the time." This is an example of: a. an enforceable promise b. an unconscionable promise c. an illusory promise
TEST BANK(2021-
d. a unilateral contract
240. _A Christopher promised to sell his car to Jason and Jason promised to pay Christopher $7,500 for the car. This contract may be classified as: a. a bilateral contract b. a unilateral contract c. a voidable contract d. none of the above 241. C To be enforceable, a non-competition clause in an employment agreement must: a. be jus terci b. be notarized c. be reasonable in scope, time and geographical limitations d. all of the above 242. E The elements of a valid contract include: a. Agreement
