2. Which of the following is NOT considered to be an alternative method of dispute resolution? a. Special verdict b. Negotiation c. Conciliation d. Mediation 3. Whatever powers are not specifically assigned to the United States by the Constitution are reserved to: a. the federal government. b. the state governments or the people. c. the Supreme Court. d. the Congress. 4. An employer directs his vice-president of marketing to conspire to fix prices with their company's competitors, a criminal act The employee does so. Under these facts: a. only the employee is criminally liable, because the employer did not do the criminal act. b. both the employee and the employer are criminally liable. c. only the employer is criminally liable, because the employee was acting on the directions of the employer. d. neither the employee nor the employer is criminally liable, but they are both civilly liable for a negligence tort 5. Mark carefully plots a course of action to embezzle $100,000 from his employer, Skye. He is scheduled to implement the plan on December 15th. He is hurt in a car accident on December 10th and resigns before he ever gets a chance to put the plan in action. In cleaning out his desk, Skye finds his plans. Mark is: a. guilty of a crime because he intended to carry it out. b. guilty of a crime because he had mens rea. c. not guilty because he did not act on his plan. d. not guilty because he is no longer employed by Skye. 6. Cody is working as an undercover drug agent. He enrolls in classes at State University where he meets several students in business administration and invites them to come to his house for a party. No mention is made of any drugs, but he does say he will have a keg of beer. Shortly after his guests arrive, he gets out some cocaine and encourages the group to have some. All of them refuse, except Sam, who has never tried it before. When Sam inhales a line of cocaine, Cody arrests him for possession of a controlled substance. Sam: a. is clearly guilty as charged. b. can raise the defense of entrapment, claiming Cody has enticed him to commit a crime that he would not have committed otherwise. c. has a valid defense of duress. d. can raise the Fourth Amendment to exclude the marijuana as evidence that has been illegally seized. 7. Zander threw a bomb into the office of his insurance agent , intending to kill the agent because the company had a claim. The agent wasn't in the building , but the bomb seriously injured his secretary, who was working in the office. Zander: a. cannot be liable to the secretary for any torts because he did not intend to hurt her. b. can be sued by the secretary with an intentional tort cause of action because Zander's intent to harm the agent is transferred to the secretary. c. has committed a crime, but he is not liable for any torts. d. has committed the tort of intrusion. 8. Hal doesn't like Bradley so, at a cocktail party, he repeats untrue rumors about Bradley's personal lifestyle and sexual practices.Hal believes the rumors are true. If these rumors harm Bradley's reputation in the community: a. Hal is guilty of libel. b. Hal is guilty of slander. c. Bradley does not have a defamation suit against Hal. d. Hal is protected by the First Amendment to the Constitution. 9. Which of the following is/are considered in determining the application of the reasonable person standard? a. Physical disability. b. Superior skill or knowledge. c. Emergency circumstances. d. All of the above are considered. 10. To which of the following does a property owner owe the highest duty of care? a. A stranded motorist who comes onto the property to seek help b. A social guest and close friend who have come to the house for a party c. A client who has come to an accountant's office in a building which the accountant owns d. A neighbor who comes over uninvited to use a backyard lounge chair 11. Which of the following is NOT always necessary in order for a valid contract to be formed? a. Mutual assent b. Legality of purpose c. A writing d. Competent parties 12. Which of the following is NOT generally required in order to have a valid contract? a. Mutual assent b. A lawful purpose c. Fairness of the bargain d. Parties who have contractual capacity 13. Sage offers to pay Allison $450 if Allison will paint her apartment while she is out of town on vacation for two weeks. Allison makes no promise but tells Sage that she will think about it. While Sage is out of town, Allison paints the apartment. This is described as a(n): a. unilateral contract. b. quasi contract. c. implied in fact contract. d. bilateral contract. 14. Lynn offers to sell his house to Dennis for $95,000. Dennis responds, " I will pay you $95,000 if you paint the second room." This response could best be described as: a. An acceptance b. A counteroffer c. a rejection d. an invitation 15. Under the common law, the ____ must be the mirror image of the ____. a. Contract, consideration B. contract, offer C. offer, acceptance D. acceptance, offer 16 An offer under Article 2 of the UCC that is irrevocable even though no consideration is given to keep it open is known as a(n). a. option. b. firm offer. c. requirements contract. d. output contract. 17. Bart sends Carla an offer by express mail. Carla receives it at 10 a.m. on Tuesday. At 11 a.m. on Tuesday, Carla delivers an acceptance to Federal Express, but due to an error, the letter is not sent out by the company until Wednesday at 8 a.m. At what time does the law consider the acceptance to be effective? a. At 10 a.m. on Tuesday b. At 11 a.m. on Tuesday c. At 8 a.m. on Wednesday d. At the time Bart receives the letter 18. Which of the following results in a void, rather than voidable, agreement? a. Duress by improper threat b. Fraud in the execution c. Fraud in the inducement d. Undue influence 19. Jill contracted to purchase an automobile from Kevin's car dealership under the belief that she could sell it at a profit to Linda,but after Jill bought the car, she found out that Linda isn't interested in buying it. Jill: a. cannot void the contract with Kevin. b. can rescind the agreement with Kevin, if her belief about Linda was reasonable. c. could rescind the agreement with Kevin if she was mistaken in her estimate of the value of the auto. d. can sue Linda for detrimental reliance. . 20. A contract was made for 125 bales of cotton to arrive on a ship named "Peerless" from Bombay. Unbeknownst to either party to the contract, there were two ships named "Peerless," both of which were sailing from Bombay. One sailed in October and the other in December. The buyer had in mind the ship sailing in October, but the seller had in mind the ship sailing in December. Each party held his belief in good faith. The goods failed to arrive on time. If the buyer sues for breach of contract: a. the seller must pay damages because the seller breached b. the seller is guilty of fraud in the inducement for failing to disclose to the buyer which ship would contain the goods c. no contract exists due to mutual mistake of fact as to the existence or identity of the subject matter of the contract d. All of these. 21. Consideration: a. must be given by the promisee to the promisor. b. must be financially adequate. c. may be given to the promisor or to some other person by the promisee or by some other person. d. need not be equal between the parties, but must be proportionate. 22. Which of the following are the two basic elements to consideration? a. Bargained-for exchange and legal sufficiency b. Legal detriment and legal benefit c. Legal sufficiency and legal adequacy d. Promise and forbearance 23. Doug obtains an exclusive franchise to sell widgets for the Acme Widget Company. The exclusive franchise covers the entire State of Wisconsin for a period of three years. In this case: a. Acme is obligated to use its best efforts to supply the goods only if this clause appears in the written franchise agreement. b. according to the UCC, unless otherwise agreed, Doug must use his best efforts to promote the sale of the widgets in his territory. c. under the UCC, such an agreement lacks consideration. d. consideration is not required because this is a moral obligation. 24. A(n). is a measure designed to protect the public from unqualified practitioners: a. exculpatory clause b. revenue license c. regulatory license d. usury statute 25. Custom Sales and Rentals uses a four-page contract with important contract terms buried in the fine print. This is an example of: a. procedural unconscionability. b. a reasonable, legal business practice. c. a "Blue law." d. substantive unconscionability. 26. Brice owns a parcel of land that is encumbered by a mortgage held by the First National Bank. Brice agrees to sell the land to Paul for $50,000. Brice and Paul together go to the First National Bank to discuss the sale and purchase with the banker. Brice, Paul, and the banker sign an agreement stating that Paul will assume the mortgage and that Brice will be discharged from all further liability on the mortgage. In this case: a. the bank is a third party donee beneficiary. b. the bank can collect from Brice if Paul defaults. c. Brice is a third party beneficiary of the agreement between Paul and the bank. d. the agreement among the three is a novation. 27. Courts will enforce contracts for the benefit of all but which of the following? a. Donee beneficiaries b. Creditor beneficiaries c. Incidental beneficiaries d. Intended beneficiaries 28. Professor Dought has a life insurance policy on his own life that provides that in the event of his death, his mother will receive the proceeds. Professor Dought's mother is a(n): a. incidental beneficiary.. b. creditor beneficiary. c. donee beneficiary. d. assignee. 29. A contract contains the provision, "Walter Hamilton promises to pay Faye Weeks $1,600 for a 2012 V-6 motor provided that Phelps' Garage approves the quality of the motor." This provision: a. makes the contract unenforceable since Walter's promise is illusory. b. creates an express condition which must be met before Walter's duty to pay arises. c. cannot create an express condition because it lacks the necessary words "on condition that." d. is not valid since it makes Walter's duty to pay dependent upon the opinion of a third party. 30. Refusal of a tender of performance by one party to a bilateral contract will: a. be treated as a repudiation, excusing the tendering party from further duty of performance under the contract. b. not discharge either party from further duty of performance under the contract. c. be considered a condition subsequent. d. None of these. 31. Which of the following would be considered a material breach of a contract? a. Partial performance that omits some essential part of the contract. b. Delivery of 50 chairs in a contract that calls for 100 chairs. c. An intentional breach of the contract. d. All of these would be material breaches. is a substituted contract that involves an agreement among three parties to substitute a new promisee in place of an existing promisee, or to replace an existing promisor with a new one. 32. A(n) ______ is a substituted contract that involves an agreement among three parties to substitute a new promise in place of an existing promisee, or to replace an existing promisor with a new one. a. accord b. satisfaction c.novation d. mutual rescission 33. Contract damages that put the injured party in as good a position as if the other party had performed are: a. compensatory damages. b. incidental damages. c. consequential damages. d. liquidated damages. 34. Howard needs a truck to pull a 2,000-pound trailer. Gordon tells Howard, "My truck will pull a 2,000-pound trailer with ease." Relying on Gordon's statement, Howard buys the truck, but it will not pull a 2,000-pound trailer. If Gordon did not intend to deceive and Howard sues for non fraudulent misrepresentation, he can recover: a. punitive damages, but not out-of-pocket damages. b. out-of-pocket and consequential damages, but not punitive damages. c. out-of-pocket damages plus punitive damages. d. nominal damages, because Howard should have known the capacity of the truck. 35. A small damage amount fixed without regard to the amount of loss is known as: a. reliance damages. b. out-of-pocket damages. c. nominal damages. d. incidental damages. 36. The process whereby a court "rewrites" or "corrects" a written contract to make it conform to the true intentions of the parties is: a. injunction. b. reformation. c. specific performance. d. rescission. 37. Bartow signed a contract to coach baseball for Washington High for a period of three years. After two years he is offered and accepts an assistant coach position at State University. Contract law will not allow Washington High to ask for: a. specific performance. b. payment of compensatory damages. c. an injunction. d. liquidated damages. 38. A power of avoidance held by a party may be lost if: a. the contract is affirmed. b. there are unreasonable delays in exercising the power. c. the rights of third parties intervene. d. All of these. 39. On June 1, Supertread Tire Company entered into a contract to provide 100 tires per month to ZYX Cycle Company at $30 per tire for the next two years. The October shipment consisted of 100 badly defective tires. ZYX Cycle Company: a. can treat the whole contract as breached. b. can reject the October shipment if it cannot be cured in a timely manner by Supertread. c. cannot reject the October shipment since it is part of the installment series. d. must sell the defective tires for whatever they can get for them and sue Supertread for the difference. 40. Amanco is to deliver to D & R Wholesalers 50 dozen wire-rim glasses frames by October 15. On October 2, Amanco delivers 30 dozen wire-rim frames and 20 dozen plastic frames. If D & R rejects the frames: a. Amanco has until October 15 to cure the defect if it notifies D & R of its intention to do so. b. D&R need not notify Amanco of its rejection of the nonconforming goods in order for the rejection to be effective since Amanco should know the goods did not meet the contract specifications. c. the contract is automatically voided since the goods were nonconforming. d. Amanco has no opportunity to cure the defect since it exhibited bad faith in not sending goods specified in the original contract. 41. Under the _____, a buyer may reject goods for even the slightest defect. a. revocation of acceptance rule b. perfect tender rule c. rules for inspection d. excuses for nonperformance 42. If destruction or casualty to goods, total or partial, occurs after risk of loss has passed to the buyer, who is responsible for losses? a. The seller b. The buyer, who must pay the entire contract price of the goods c. The buyer if the loss is partial; both parties share the loss if it is total d. The carrier delivering the goods 43. If the goods or the tender of delivery fail in any respect to conform to the contract, the buyer may: a. reject the whole. b. accept the whole. c. accept any commercial unit(s) and reject the rest. d. Any of these. 44. Under the UCC, identifying goods to which a contract refers gives the buyer a special property interest which permits the holder to: a. insure the goods. b. immediately transfer title to the goods. c. take immediate possession of the goods from the seller. d. sue the seller for improper treatment of the goods. 45. Alex tells Mona that he thinks her ring is very valuable and that he would like to take it to be appraised. She gives him the ring, and he quickly sells it to unsuspecting Hanna's Antique Jewelry Shop for $1,000. A week later, Mona discovers her ring on sale for $2,000 at Hanna's and uncovers the story. Can Mona get the ring back? a. Yes, a true owner can always recover his or her own property b. Yes, since Alex had no title to the ring c. No, since Alex had voidable title to the ring and Hanna was a good faith purchaser d. No, since Hanna has paid for the ring 46. Which of the following is/are required for a valid tender under the Code? The seller must: a. put and hold conforming goods at the buyer's disposition. b. give notice to the buyer that the goods are available. c. give notice at a reasonable time and keep the goods available for a reasonable period of time. d. All of these are required. 47. Zander, a seller in Miami, enters into a contract which states that (a) goods are to be delivered to Xavier, a buyer, in New York, and (b) title is to remain with Zander until delivery to Xavier. This is: a, a shipment contract. b. an FOB Miami contract. c. a destination contract. d. a contract voidable by the buyer until delivery. 48. Implied warranties under the Code: a. may arise from course of dealing or usage of trade. b. are a result of specific language in the sales contract. c. continue the common law rule of caveat emptor. d. are intended to protect the seller rather than the buyer. 49.Karen decided to sell her stair step exercise machine, because she wasn't using it as much as she thought she would. Lydia bought it from Karen for $100. If the first day that Lydia used the stair stepper it fell apart, injuring Lydia's ankle. a.) Lydia can sue Karen for breach of the warranty of merchantability, because the stair stepper is not fit for its ordinary purpose. b. Karen can sue the manufacturer for breach of the warranty of merchantability, because she was the original buyer c. Lydia cannot sue Karen for warranting that the stair stepper is reasonably fit for its ordinary purpose, because Karen is not a merchant. d. Lydia cannot sue Karen, because they are not in privity of contract. 50. Mark, a college student, tells Leslie that his stereo has quadraphonic speakers because Mark was told that when he bought it and Mark truly believed that it did have quadraphonic speakers. Leslie buys the stereo, but it does not have quadraphonic speakers. Is Mark liable for breach of warranty? a. No, because he did not know his statement was false. b. No, because he did not promise her that the speakers were quadraphonic. c. Yes, because the statement was false. d. Yes, because Mark was not acting in good faith. 51. An obligation of the merchant-seller that the goods are reasonably fit for general purposes for which they are manufactured and sold, and the goods are of fair, average quality is known as: a. a warranty of merchantability. b. strict liability. c. an express warranty. d. the warranty of fitness for a particular purpose. 52. Article 9 of the UCC would govern transactions involving which one of the following? a. Mortgage on a house b. Purchase of waterfront property c. Financing purchase of a sailboat d. Mechanic's lien on an automobile 53. Dale defaults on a car loan secured by his car and guaranteed by both Selena and Tobey. Subrogation would allow Selena, who paid Dale's full obligation, to: a. repossess the car. b. collect from Tobey. c. collect from Dale. d. All of these. 54. Upon the surety's payment of the principal debtor's entire obligation, the surety obtains all of the rights the creditor has against or through the principal debtor. The term for the surety's "stepping into the shoes" of the creditor is known as: a. contribution. b. subrogation. c. reimbursement. d. exoneration. 55. A trustee in bankruptcy may avoid which of the following? a. Fraudulent transfers b. Voidable preferences c. Automatic stays d. Both fraudulent transfers and voidable preferences 56. Which chapter of the Bankruptcy Code allows for the debtor to remain in possession of the assets to try to reorganize the business? a. Chapter 7 b. Chapter 11 c. Chapter 12 d. Chapter 13 57. Non-bankruptcy compromises to give debtors relief while protecting the rights of creditors include all of the following except: a. Mergers. b. nonstatutory assignments for the benefit of creditors. c. receiverships under the direction of a court with equity powers. d. compositions. 58. Which one of the following is NOT true of a suit brought under criminal law? a. It must be brought by the government. b. It is brought on the ground of public policy. c. Proof of guilt must be "by a preponderance of the evidence." d. Conviction may result in imprisonment. 59. The law that creates, defines, and regulates legal rights and obligations is known as: a. substantive law. b. procedural law. c. Constitutional law. d. criminal law. 60. The three distinct and independent branches of the United States government are: a. the executive branch, the House of Representatives, and the U.S. Senate. b. the federal judiciary, the House of Representatives, and the U.S. Senate. c. the federal judiciary, the Congress, and the executive branch. d. the state government, the Congress, and the executive branch