True Or False s3

2000 Business Law Page 1

TRUE OR FALSE 1. A promise to make a gift is enforceable. a. True b. False 2. Changes to an offer before a contract exists are a a. True b. False counteroffer. 3. An unconscionable contract is a contract that one a. True b. False person finds ethical. 4. A binding offer that cannot be revoked until time a. True b. False specified has expired is called a firm offer. 5. The statute of limitations states that contracts for real a. True b. False property must be in writing. 6. Novation is excessive high interest rates. a. True b. False 7. Disaffirmance is the process of a minor refusing to a. True b. False honor a contract. 8. A substitution for consideration is promissory a. True b. False estoppel. 9. The giving and receiving within a contract is called a. True b. False consideration. 10. Taking back an offer before acceptance is called a. True b. False revocation. 11. A man who makes a will is called a testatrix. a. True b. False 12. A holographic will is an oral will. a. True b. False 13. Wills are validated in probate proceedings. a. True b. False 14. A nuncupative will is written entirely in the a. True b. False handwriting of the testatrix. 15. Dying without a will is called intestate. a. True b. False 16. The one who orders the draft to be paid is the payee. a. True b. False 17. A stale check is a draft that is over six months old. a. True b. False 18. A personal check that is guaranteed by the bank is a. True b. False called an outstanding check. 19. Drawers are responsible for altered checks only if a. True b. False their negligence contributed to the forgery. 20. An offer must be definite, communicated, and a. True b. False intended to create a legal obligation. 21. Children are NOT responsible for their own torts. a. True b. False 22. The promise to make a gift is enforceable and does a. True b. False constitute a contract. 23. The courts will NOT enforce any contract based on a. True b. False past consideration. 24. The transfer of a duty is called an assignment. a. True b. False 25. When purchasing a pregnant cow, the calf is acquired a. True b. False through accession. MULTIPLE CHOICE 2000 Business Law Page 2

26. The act of signing the back of a check is called a. blank endorsement b. qualified endorsement c. restrictive endorsement d. special endorsement ______. 27. A ______partner may be known to the public but is a. dormant b. limited c. secret d. silent NOT active in management. 28. An individual, called a shareholder, is part of a a. sole proprietorship b. partnership c. proprietorship d. corporation ______. 29. Corporations that are operating in a different country a. alien corporations b. domestic corporations c. foreign corporations d. native corporations rather than their country of incorporation are called ______. 30. A stockholder receives a fixed dividend if the stock a. arbitrary b. common c. directed d. preferred is ______. 31. ______is the right to vote another shareholder's a. Pooling agreement b. Proxy c. Subsidiary d. Voting trust stock. 32 A ______is a continual public auction where stocks a. par value b. stock exchange c. stock subscription d. stock value are bought and sold. 33. Which of the following is NOT a duty of a partner? a. Always act in good faith b. Always use your best c. Put the firm's interest d. Refrain from other and in the best interest of skill and judgment in ahead of self-interest. non-partnership the firm. handling the firm's affairs. business. 34. A ______is a legal being, separate and distinct a. corporation b. general partnership c. limited partnership d. sole proprietorship from owners. 35. A condition that exists when any partner ceases a. disaffirmance b. dissolution c. special partnership d. tenancy in partnership. association with the organization due to death is called ______. 36. Property that cannot be used for non-partnership a. articles of partnerships b. fiduciary duty c. partnership by estoppel d. tenancy in partnership business unless the other partners know about it and give their permission is called ______. 37. Which one of the following bankruptcy plans would a. Chapter 7 b. Chapter 9 c. Chapter 12 d. Chapter 13 farmers select for reorganizing their debts? 38. Which regulation in the Truth in Lending Act a. Regulation A b. Regulation C c. Regulation L d. Regulation Z requires lending institutions to notify borrowers regarding the cost of their credit? 39. Sam Johnson was denied credit. When he asked for a. Equal Employment b. Fair Credit Reporting c. Fair Debt Collection d. Truth in Lending Act an explanation, he was told that he had been 90 days late Opportunity Act Act Practices Act with payments to three different credit card companies. Which law gives Sam the opportunity to ask for an explanation? 40. Which law would a city or town select in filing a a. Chapter 7 b. Chapter 9 c. Chapter 12 d. Chapter 13 bankruptcy case? 41. From the following list, which item would NOT be a. Alimony b. Child support c. Taxes d. All of the above affected by a bankruptcy discharge? 42. If an agent commits a tort in the scope of authority, a. principal is liable b. agent is liable because c. Both a and b d. Neither a nor b then the through vicarious liability. individuals are responsible for their own torts. 2000 Business Law Page 3

43. An agent lawfully appointed by another agent is a. agent's agent. b. general agent. c. subagent. d. special agent. called a/an 44. A discretionary agent is a/an a. agent's agent. b. general agent. c. subagent. d. special agent. 45. An agency relationship by circumstance is called a. agency by estoppel. b. an express agency. c. power of attorney. d. ratification. 46. Samantha Johnson took out an insurance policy for a. Co-insurance will cover b. Inland marine insurance c. Her homeowner's d. Her homeowner's policy fire protection for her home. She intentionally did not tell the damage. will cover the damage. policy will be void. will be valid for this the agent that she was beginning a new business in her special circumstance. basement. After she started her basement dry cleaning business, a fire caused massive damage to her entire home. 47. Clayton Cook took out a $50,000 life insurance a. dividend b. face value c. premium d. principal policy on himself and named his mother, Mary May Cook, as beneficiary. The $50,000 is called the ______. 48. Coverage against loss to personal property while a. fidelity insurance b. inland marine c. indemnity insurance d. surety insurance being transported on land is ______. insurance 49. The type of automobile insurance coverage for a. uninsured motorist b. collision insurance c. comprehensive d. inland marine insurance damages caused by fire, flood, hail, windstorm, or insurance insurance vandalism is called ______. 50. A standard-form contract that requires buyers to obey a. adhesion contract b. contingency c. covenant d. dissolution the contract exactly as it is written is referred to as a/an ______. 51. Personal property insurance' for items that are used in a. preferred provider b. binder c. floater d. homeowner's an individual's home in New York and also in a home in Florida, would need to be covered under a policy called a ______. 52. When Barry Jones leaves a television for repair at a. consignment b. extraordinary bailment c. gratuitous bailment d. mutual-benefit Terry's TV/VCR Repair, there is a/an ______taking place. bailment 53. Tory Stephens went to General Butler State Park for a. consignment b. extraordinary bailment c. gratuitous bailment d. mutual-benefit a ski trip. She rented skis at the local ski shop establishing bailment a/an ______. 54. Chuck Smith's act of borrowing Sally Green's ski a. a bailment for the sole b. a bailment for the sole c. a bailment for the d. not a bailment, but an boat is benefit of the bailor. benefit of the bailee. mutual benefit of both example of an agency bailor and bailee. contract. 55. One that wrongfully retains possession of property at a. bailee b. bailor c. tortious bailee d. tortious bailor the end of the bailment period is called a 56. In canceling a door-to-door sale, the cooling-off a. three b. five c. seven d. ten period lasts for ______business days. 57. Harry Henderson traveled to Better Bargains to a. bait and switch. b. express advertising. c. standard sales practices. d. telemarketing fraud. purchase a computer for $1,129. Upon arrival at the computer store, his salesclerk described all the product's faults and encouraged 58. A binding agreement to avoid going to court is called a. arbitration. b. discrimination. c. litigation. d. mediation. 59. A binding order to stop an illegal false advertising a. cancellation order. b. cease and desist order. c. court order. d. revocation order. practice is called a/an 2000 Business Law Page 4

60. The phrase "let the seller beware" is the standard in a. caveat emptor b. caveat venditor c. privity of carrier d. privity of contract consumer protection and is also called 61. The requirement of placing a sticker called a Buyer's a. Lemon Law b. Sherman Act c. Used Car Rule d. Wagner Act Guide in the window of a used car is a 62. An oral or written guarantee by a manufacturer is a. express warranty b. implied warranty c. warranty against d. warranty of known as a/an ______. encumbrances merchantability 63. The ______Act requires that a product costing over a. Lambert b. Magnuson-Moss c. Sherman d. Wagner $ 10 contain an express warranty to be labeled as a full warranty or limited warranty. 64. An implied warranty of fitness for a particular a. the buyer tells the b. the buyer relies on the c. the seller has reason to d. All of the above purpose arises when purpose for which the seller's skill and judgment know that the buyer is goods are needed. to select goods for the relying on the seller's skill. stated purpose. 65. Warranty of merchantability is made by a. Wal-Mart selling a b. Cindy Jackson selling c. General Electric. d. All of the above VCR. her VCR. 66. ______is advertising a product below cost to attract a. Absorption b. Attestation c. Bait and switch d. Loss leader customers to your store. 67. A class action case covers a. an individual's lawsuit. b. a group's lawsuit. c. legislation designed to d. legislation designed to protect consumers. allow due process to occur. 68. Monopolies are monitored and declared illegal by a. Department of Revenue b. Federal Reserve Board c. Federal Trade d. Securities and Exchange which of the following? Commission Commission 69. Why would a defendant accept a plea bargain? a. To confront the accuser b. To win favor with the c. To save the court time d. To avoid the risk of at the trial judge and money being convicted of a more serious crime 70. A credit rating agency publishes a book including a. Defamation (slander) b. Defamation (libel) c. Invasion of privacy d. Extortion detailed information about Joy Jacobs' credit. The company sells the book to the public at large. What type of intentional tort is this if the information is true? 71. Carry Conner walked into Newton's Jewelry Store. a. Conversion b. Embezzlement c. Extortion d. Fraud She saw that the salesclerk was not watching her. She grabbed two gold chains that were on display. If Newton's Jewelry decides to reclaim damages for the loss of the two necklaces, then which tort action would the store choose? 72. ______is denying the opportunity for the recovery of a. Comparative negligence b. Contributory c. Negligence d. Reasonable Man Rule damages if you are partly responsible for your own injuries negligence in a tort action. 73. The only one of the following elements that is NOT a. duty. b. violation of duty. c. injury. d. proximate causation. an element of a criminal action is 74. Individuals are responsible for torts regardless of a. defamation lawsuits. b. libel lawsuits. c. strict liability lawsuits. d. vicarious liability intent or negligence in lawsuits. 75. Parents are liable for their children's torts when a. the children are b. the child is involved in c. damage is caused while d. All of the above performing dangerous malicious destruction of the child is driving an habits. school property. automobile. 2000 Business Law Page 5

76. Individuals are expected to exercise a greater duty of a. attractive nuisance b. doctrine of last clear c. doctrine of promissory d. doctrine of parol care to prevent injury to children when there is something doctrine. chance. estoppel. evidence. on your property that draws the child to the property. This is called 77. Capacity to contract means the person a. can afford to pay the b. can read and write c. is able to understand d. All of the above price asked. English. his/her actions. 78. If Lori Preston pays Shannon Thompson $ 100 to a. quasi-contract. b. counteroffer. c. finder's fee. d. option. keep an offer for the sale of a car open for a definite length of time, then their agreement is called a/an 79. An insurance policy that does NOT have a definite a. endowment b. term c. universal d. whole life term but instead requires the payment of a level premium at regular intervals is called ______. 80- ______is the failure to perform the terms of a a. Breach b. Cancellation c. Restitution d. Revocation contract as agreed. 81. ______is one who sells regularly. a. Barter b. Casual seller c. Grantor d. Merchant 82. Money awarded for punishment in tort actions is a. liquidated damages. b. mitigated damages. c. nominal damages. d. punitive damages. referred to as 83. Jackson Wood negligently backed into Casey Jones' a. Forbearance b. Nominal consideration c. Past consideration d. Promissory estoppel car resulting in $700 damage. Jackson has a $500 deductible on his liability insurance policy. He asks Casey to accept a $700 check marked "paid in full." If Casey agrees to this settlement, what type of consideration is Casey exhibiting? 84. Upon receipt of goods, the person offering to pay a. US coins or currency. b. a check. c. Both a and b d. Neither a nor b must offer legal tender. Legal tender is 85. Contracts can be discharged by impossibility of a. a person dies and b. the subject matter is c. Both a and b d. Neither a nor b performance when personal service was destroyed. required. 86. Examples of intangible property are ____ a. promissory notes b. bank accounts c. Both a and b d. Neither a nor b 87. When a price is quoted for goods "free on board a. the buyer must pay the b. the shipper must pay the c. freight is not charged. d. freight charges occur shipping point," freight. freight. only if shipped aboard a ship. 88. The risk of loss remains with the seller if products a. f.o.b. destination. b. f.o.b. shipping point. c. bulk transfer. d. as attachments. are shipped 89. Which of the following examples of carriers have the a. Common carrier b. Contract carrier c. Local carrier d. Private carrier most responsibility? 90. A ______is any person at a motel for a definite a. carrier b. guest c. lodger d. transient period of time. 91. A contract negotiated by the employer and a. collective bargaining b. grievance procedural c. implied contract. d. implied covenant. representatives of the labor union is called a/an agreement. contract. 92. Which law forbids the practice of assigning more a. Landrum-Griffin Act b. Sherman Act c. Taft-Hartley Act d. Wagner Act employees to a job than are needed? 2000 Business Law Page 6

93. Which law had a primary goal to stop the corruption a. Landrum-Griffin Act b. Sherman Act c. Taft-Hartley Act d. Wagner Act of unions? 94. Home ownership is shown by possessing the a. abstract of title. b. easement. c. deed. d. mortgage. 95. The right of the government to take private land a. the absolution power. b. eminent domain. c. subterranean right. d. riparian right. without consent of the owner for public use is called 96. ______describes the process of two companies a. Consolidation b. Joint tenancy c. Merger d. Tenancy in common joining to form a new corporation. 97. If an offer to contract is NOT accepted, the offer is a. A fatal illness of either b. At the time stated in the c. Counteroffer by the d. Revocation by the ended by all BUT which of the following? party offer offeree offerer 98. A bankruptcy proceeding will a. discharge all debts of all b. allow persons to borrow c. protect certain rights of d. allow persons to debtors who go bankrupt. and spend with no debtors and creditors. purchase bargains when obligation to repay. stores close. 99. Ownership is NOT transferred in which one of the a. Bailment b. Gift of personal c. Assignment of contract d. Sale of consumer goods following types of legal transactions? property 100. Upon the death of her niece, Julie McDonald a. new consideration. b. nominal consideration. c. past consideration. d. promissory estoppel. promised a $50 contribution to "Save the Church Bell Campaign." Julie's consideration is an example of