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BUS 20

1.      A close relative is not regarded as third party for recovery against emotional distress.
2 points
Question 2
1.      “One who waits too long to complain has indicated satisfaction with the agreement despite the initial lack of true consent” is the idea behind the doctrine of:


2 points
Question 3
1.      A contract that is impliedly accepted by doing something that objectively indicates agreement can be considered as a bilateral contract.
2 points
Question 4
1.      Fernando is the owner of Pick Food Restaurant. He makes an oral agreement with Purple Lotus Works for the design and production of 5,000 unique custom-made dinner plates with the logo of Pick Food Restaurant on them. Purple Lotus reworks its production schedule and creates dies to add Pick Food Restaurant’s logo in the designer plates. A week later, Fernando calls Purple Lotus and says that he no longer wants the plates and calls off the deal. In this scenario, it is most likely that:

the parties’ agreement is at Fernando’s disposal because he is the customer.
Purple Lotus is protected by the statute of frauds exception for specially-manufactured goods.
the parties’ agreement is not valid since it was only an oral agreement.
the agreement between Fernando and Purple Lotus is unenforceable and Fernando is protected under the statute of frauds.

2 points
Question 5
1.      Both federal and state laws spell out the specifics of cybercrime. Which of the following statements is true of these laws?

Only an individual may face liability based on the use of electronic communication; corporations are out of their purview.
Altering data stored in another person’s computer is not considered illegal.
A corporation is not liable for the online activities of its employees.
Accessing the services of a commercial service provider without paying fees is a crime.

2 points
Question 6
1.      As used in the Uniform Commercial Code (UCC), the concept “reasonable”:

is a practical standard used to gauge what people really do in the marketplace.
is a theoretical concept based on the “reasonable person standard” of tort law.
refers to the capacity to contract.
refers to what a reasonable person would do in the marketplace.

2 points
Question 7
1.      A petition for Chapter 13 proceedings can be initiated by the:

voluntary petition of a debtor.
involuntary petition of creditors.
secured creditors.

2 points
Question 8
1.      If a buyer accepts defective goods and wants to hold the seller liable, the buyer must give the seller notice of the defect:

only in writing.
within a reasonable time after detecting the defect.
within the same financial year of the purchase.
when the contract is made.

2 points
Question 9
1.      Commercial frustration:

is very similar to impracticability.
occurs when the event is foreseeable.
excuses performance when events occur before the formation of the contract.
occurs when the promisor expressly assumes the risk that the event has occurred.

2 points
Question 10
1.      A _____ is designed to reach things belonging to the debtor that are in the hands of third parties.

writ of quo warranto
writ of garnishment
writ of certiorari
writ of mandamus

2 points
Question 11
1.      Fungible goods are:

goods which are packaged and labeled separately (such as units which come in cartons or cases).
mixed goods that are identical and cannot be separated (such as grain or coal).
perishable goods which have been improperly packaged or which have damaged packaging and are prone to contamination.
goods which conform to any promises or statements of fact made on the container or label.

2 points
Question 12
1.      Artisans who retain goods are liable for conversion if they:

return the goods before the debt has been paid.
keep the goods without the right to a lien.
lose the goods to the debtor in a fraudulent manner.
sell the goods for the unpaid charges.

2 points
Question 13
1.      Common law arises when:

courts are called upon to resolve disputes for which there is no statute or other source of law establishing a rule.
constitutional statutes are found to interfere with the freedom of expression.
there are statutes and other sources of law establishing a particular rule and the courts decide to improvise this existing statutory law.
the government wishes to encourage certain kinds of investments.

2 points
Question 14
1.      Blue laws are uniform across all states in the country.
2 points
Question 15
1.      Erik filed a case in a municipal court against Leela for a minor criminal violation. Dissatisfied with the decision of the court, Erik can now appeal the case in a court of record.
2 points
Question 16
1.      Consideration can have legal value if the promisee:

does not involve in an act in the case of unilateral contracts.
does something he or she had no prior legal duty to do in exchange for the promisor’s promise.
agrees to do something he or she has a legal right to do in exchange for the promisor’s promise.
does not give up something in exchange for the promise made by the promisor.

2 points
Question 17
1.      A party that enters into an illegal contract can recover the considerations given if the party:

reports the illegal act to law enforcement after committing it.
rescinds the contract before any illegal act has been performed.
demonstrates an unequal bargain due to the illegal contract.
rescinds the contract immediately after the illegal act has been performed.

2 points
Question 18
1.      A common defense to the tort of interference with contract is:

lack of capacity.
probable cause.
inducing a breach of contract.

2 points
Question 19
1.      A building that deviates slightly from the contract’s specifications does not qualify as substantial performance.
2 points
Question 20
1.      A counteroffer:

impliedly rejects an offer.
does not affect the material terms of the contract.
is a mirror-image of the offer.
is an inquiry into the terms of the offer.

2 points
Question 21
1.      A contract is implied when the parties directly state its terms at the time the contract is formed.
2 points
Question 22
1.      A consumer who misuses a product:

can hold the manufacturer liable even if the manufacturer uses a defense of strict product liability by knowingly assuming an obvious risk of injury by the consumer.
may not recover under the theory of strict liability.
will recover under the theory of strict liability if the misuse was not foreseeable.
cannot hold the manufacturer liable for not designing the product so that it could not be altered even if the danger it created was foreseeable.

2 points
Question 23
1.      A conditional sales contract is an example of a(n):

chattel paper.
document of title.
negotiable instrument.
investment property.

2 points
Question 24
1.      Assignments of future wages are not effective because:

they involve personal relationships.
they are contrary to public policy.
they materially alter the duties of the promisor.
they involve personal rights.

2 points
Question 25
1.      Bella is Ming’s babysitter. She takes Ming to the amusement park for a roller coaster ride. Due to the intensity of the ride, Ming, who has an especially weak heart, dies of a heart attack during the ride. Which of the following concepts best fits Bella’s act of negligence?

Proximate cause
Negligence per se
Breach of duty
Principles of causation

2 points
Question 26
1.      If Gwen hands Lisa a detailed offer for the purchase of Lisa’s pottery wheel and Lisa signs the offer without changing any of its terms, the parties have created a:

bilateral contract.
contingent contract.
unilateral contract.
multilateral contract.

2 points
Question 27
1.      A buyer is considered to have accepted a whole commercial unit of goods if:

the buyer pays for the goods before inspecting them.
the buyer accepts any part of the commercial unit.
the seller delivers even part of the commercial unit.
the seller delivers all the goods in the commercial unit.

2 points
Question 28
1.      A clothing store has opened a credit account in which Judy, a college student, gets Alice, her older sister, to agree to pay the amount owed on the account if Judy fails to do so. Which of the following statements is true of this scenario?

Judy is the obligor, and she is secondarily liable to the clothing store.
Alice is the guarantor, and she is primarily liable to make the payments.
Judy is the obligor, and she is contractually liable to the guarantor.
Alice is the guarantor, and Alice’s contract must be in writing to be enforceable.

2 points
Question 29
1.      Beck tells his mom that he is thinking of selling his vintage coupe to his neighbor, Sam, for $100. Beck’s mom calls Sam and tells him about her conversation with Beck. Sam then calls Beck and tells him that he accepts his offer. Under these circumstances, _____.

this is a contract
the offer has been conditionally tendered
the offer has not been communicated
the offer violates the UCC’s rule against third-party interveners in quasi contracts

2 points
Question 30
1.      According to the Fair Credit Billing Act (FCBA), if the credit card holder thinks that the card issuer has made an error on the statement, he has _____.

90 days from the time the card was issued to report, in writing, the error
30 days from the time the statement was mailed to report the error
120 days from the time the statement was mailed to report, in writing or orally, the error
60 days from the time the statement was mailed to report, in writing, the error

2 points


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