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MORT 275 - Mortuary Law I - Final Combined

MORT 275 - Mortuary Law I - Final Combined - Grande Chapters 1-45 Study Guide Questions Online Quizzes Vocabulary
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Tim, a resident of Iowa, is suing Rod, a resident of New York, for $100,000. Time is suing for breach of contract (state law). Would a US district court have jurisdiction to decide this case?
Yes. Tim and Rod are residents of different states and the case involves $75,000 or more.
Kevin sued his employer in US district court for violation of federal antidiscrimination laws. Judgment was entered in favor of the employer, and Kevin wishes to appeal the judgment. Under these facts, Kevin will appeal the judgment to which court?
US court of appeals
In a typical state court system, which answer would be correct?
Bruce is suing a manufacturer for $60,000 for breach of contract under state law. A state court of original general jurisdiction would have jurisdiction to try this case for the first time.
Bob has filed a civil lawsuit against Acme Corp. Bob is suing Acme for physical injuries that he suffered due to Acme's negligence. All pleadings have been filed. Select the correct answer regarding Acme's right to discover information from Bob.
B and C. - Acme can request Bob to submit to a reasonable physical examination by a doctor. - Acme can take Bob's deposition regarding the accident.
Rosa sued T&S Co. for breach of contract. The jury returned a verdict in favor of Rosa for $5,000. Under these facts:
If the judgment is appealed, the court of appeals may reverse the judgment if the lower court committed serious errors of law.
Markham's Emporium has been in business for thirty years, and it has an excellent reputation. John wants his new store to be a success, so he erects a large sign over his business reading "Markham's Emporium". Under these facts, John is probably liable for the tort of:
Confusion of source.
Gourmet Co. was in the final stage of negotiating a contract with Last Airway. It appeared that a contract would be signed. To defeat Gourmet's chance for this contract, Foodway Corp. bribed union officials to conduct an illegal strike of Gourmet. As a result, Gourmet did not get the contract. What tort did Foodway Corp. commit?
Interference with prospective advantage.
Jason owns an ice cream shop that sells soft-serve ice cream. (Soft-serve ice cream is any type of ice cream that is dispensed from a machine). Jason wants to obtain a trademark for the name "soft-serve ice cream." For years, numerous stores nationwide have sold "soft-serve ice cream". Does the name "soft-serve ice cream" qualify for trademark protection under federal law?
No. The name is generic, and protection is generally not available for generic names.
In which case does Jeanne commit a computer crime?
All of the above. - Jeanne works for a federal agency. To protest the US foreign policy, Jeanne sabotaged the agency's computer system, causing substantial damage to the system. - Jeanne is employed by Motorworks, an exclusive car dealer in Beverly Hills. Secret customer data that cannot be obtained elsewhere is maintained on the company's computer. Jeanne secretly prints out the information and sells it to a competitor of Motorworks. - Jeanne wrongfully obtains access to IBM's computerized payroll system, and she causes IBM to issue her ten checks for a total of $50,000. Jeanne cashes the checks.
Blue Sky Inc. and Hawk Inc. are securities firms. These companies have recently engaged in three separate fraudulent stock offerings. Each offering violated both federal and state criminal laws, but Big Sky has not been convicted of these crimes. Jim bought stock from Big Sky in one of these offerings. Under these facts, can Jim bring a RICO action against Big Sky?
Yes. Jim may bring a RICO action, and he may be able to recover treble damages.
The SEC, a federal agency, has the power to license persons who sell stock in interstate commerce and the power to regulate business conduct that is used to sell securities. However, the SEC does not have the power to establish prices for which securities may be sold. Under these facts, the SEC does NOT possess:
Rate-making power
Which agreement by Heifer Co. does NOT violate the Sherman Antitrust Act?
Heifer gives A&A Grocery the exclusive right to sell Heifer's products in a small town. This agreement is evaluated under the rule of reason, and it does not lessen competition.
Compu Co. is one of the two largest manufacturers of computers in the US. Which action or agreement does NOT violate federal antitrust laws?
Compu sells its Y computer in one market for $1,000, and it sells the same computer in other markets for $950. The pricing difference is due to a difference in transportation costs.
Chemco manufactures and distributes chemical products. Chemco is concerned that its production, distribution, and disposal of chemical products may be subject to federal environmental laws. Which federal act most directly regulates Chemco's business activities?
CERCLA
Which promise or agreement constitutes a valid contract?
Tom and Helen are competent adults, and in a signed writing Tom and Helen agree that Helen will sell her car to Tom for $2,000.
Stan lacks the capacity to make a contract because he is a 15 year old minor. Nonetheless, Stan contracts to buy a guitar from Play-It-Again-Sam Sales. Under these facts, the contract is:
Voidable
Cindy saw Carl's Law Service mowing a neighbor's lawn. Cindy pointed to her lawn, gesturing that she wanted it mowed. In response, Carl mowed Cindy's Lawn. Under these facts:
Cindy and Carl made an implied contract, and Cindy is obligated to pay for Carl's services.
Jackie offered to pay Glenn $500 in consideration for Glenn's actual, complete trimming of all trees located on Jackie's property. With the intent to accept Jackie's offer, Glenn completely trimmed the trees in question. Under these facts, Jackie and Glenn's agreement is:
A unilateral contract
Fred signed an "offer" to buy Tony's condo. The offer describes the parties, property, and price. The price is stated to be $80,000, $20,000 cash payable, with the balance to be represented by a promissory note. The offer states that in two weeks the parties will determine the interest to be paid and when the note will be due. Tony accepts the offer. Is a contract formed?
No. The offer was not sufficiently definite to constitute a valid offer.
In which situation does Bart make a valid offer?
Bart signs a written offer to buy land. The offer appears to be a sincere offer. Unknown to the seller, Bart decides not to buy the land unless he can first sell some other property.
In which case was Al legally entitled to revoke the offer in question?
Al offered to sell his condo to Ben. Before Ben accepted, Al gave Ben written notice that said "I terminate my offer".
Seller validly offered to sell a carpet-cleaning franchise to Joe for $50,000. Which of the following expressions by Joe would constitute a valid acceptance of the offer?
In writing, Joe states: "I accept the offer".
Mind was a minor at the time she bought a stereo. (For purposes of this question, assume that eighteen is the age of majority). Under these facts, select the correct answer.
Mindy can disaffirm the contract, and the seller must repay all money paid by Mindy.
Eva, age sixteen, contracted to buy a motor scooter from Seller. Seller told Eva the scooter after she told him that she was 21 years old. After using the scooter for one year, Eva attempted to disaffirm the contract. The scooter was worth $300 less due to its use by Eva. In this case:
All of the above - Eva committed a tort by misrepresenting her age to Seller. - In some states, Eva would not be permitted to disaffirm the contract. - In some states, Eva can disaffirm, but she must pay $300 damages to seller.
Which contract is voidable?
Irving contracts to buy a car. Due to a mental illness, Irving cannot understand that he has made a contract, and he is unable to understand the contract's basic terms.
Penny made these agreements. Which agreement is supported by consideration?
Penny and Ray agreed that she would pay $200 for Ray's stereo. The stereo is worth $900.
In which case is the creditor entitled to sue for the unpaid balance of the debt?
Alice owed Otis $500. The debt was undisputed. Alice and Otis agreed that she would pay $200 in consideration for his promise to release Alice from the balance of the debt.
Rod contracted to build a garage for Tim. The contract required Rod to pay for all materials. Later, Tim promised to pay Rod an extra $500. Tim's promise is binding if it is given for:
Rod's promises to both perform the original contract with Tim and construct a shed, which Rod was not obligated to build.
Select the promise, agreement, or debt of record that is not legally binding.
Buyer and Seller agreed to modify a land sale contract by reducing the price from $15,000 to $10,000. Buyer did not give anything in return for Seller's promise to lower the price.
Which contract described below is enforceable?
Marty was in a hurry and didn't read the financing contract she signed. She was later surprised to find out she was responsible for title and recording fees.
Seller contracted to sell a building to Buyer. The foundation of the building is cracked due to serious structural defects. Seller would not commit fraud in which situation?
Seller does not hide the cracks, but Seller does not tell Buyer about the defects. Buyer does not inspect the building, which would have revealed the building's structural defects.
Which contract is voidable?
A and C. - Robin and her son, Bob, have a confidential relationship; Robin does whatever Bob says. Robin sold some stock to Bob for an unfairly low price because he demanded that she do so. - Jan threatens to injure Carl's children and to burn Carl's home unless he lends Jan $10,000. As a result of these threats, Carl feels compelled to agree to the loan and he does so.
Compu. Co. and Gina entered into an illegal contract whereby Gina agreed to sabotage a competitor's business. The sabotage is a crime. Gina failed to perform. Under these facts:
A court will not require Gina to perform the agreement.
Ted, a law student, made one contract to (a) paint Kim's house for $1,500 and (b) represent Kim in a small lawsuit for $250. The painting service is legal; the legal service is illegal. In this case:
The portion of the contract relating to the painting service is valid. The portion of the contract relating to the unlicensed practice of law is void.
Select the correct statement:
B and C. - On a commodity exchange, Seller contracted to sell John a quantity of oil at a fixed price in one year. Seller intends to perform the contract. The contract is legal and enforceable. - Cap and Sue bet one another $100 on who would win the Super Bowl. They gave the money to Leslie to hold. If requested, a court would make Leslie return the money to Cap and Sue.
Neal was hired as sales manager for a food distributor doing business in Pork City, USA. Neal managed the important customer accounts and he was responsible for developing the company's sales strategy. When hired, Neal agreed not to compete in the food distribution business after he quit. Under these facts, Neals' agreement not to compete would be:
Valid if it prohibited Neal from competing in Pork City for one year after he quit.
Which oral contract is unenforceable because it violates the Statute of Frauds?
All of the above. - Biff orally contracts to sell his ranch to Marty. - Sue orally leases her home to Larry for two years. - Lin orally grants Kelly a right-of-way (easement) to cross over Lin's land.
Which oral contract is unenforceable because it violates the Statute of Frauds?
On March 1, Lee contracts to work for Pam from June 1 until April 30 of the following year.
Which oral promise violates the Statute of Frauds?
Pete promises Lender that, if Lender loans $200 to Pete's daughter and his daughter does not repay then loan, then Pete will repay the loan.
Which oral promise or contract violates the Statute of Frauds?
Dad and Jose made an oral contract whereby Dad promised to make Jose general manager of a company in consideration of Jose's promise to marry Dad's daughter.
Which third party is a third-party beneficiary who can enforce the contract in question?
B and C. - Ned contracted with Rock Insurance Co. whereby the insurance company agreed to pay $10,000 to Ned's sister (third party) upon Ned's death. - Sara contracted to sell her car to Tom for $1,000. The contract requires Tom to pay the $1,000 directly to Last Chance Bank (third party) to whom Sara owes $1,000.
In most states, which right can be assigned without statutory restriction and without the consent of the party whose obligation is being assigned?
Danna contracted to pay $100 to Bret. Bret wants to assign the right to receive this money.
Cody owed Don $1,000. Don orally told Cody and Sylvia: "I assign to Sylvia all of my right to be repaid the $1,000. Pay this sum to Sylvia." Sylvia did not give Don any consideration for this assignment. Under these facts:
The assignment is valid and Cody must pay the $1,000 to Sylvia.
Art sold a truck to Luis for $20,000. Art misrepresented the truck. As a result, Luis has a defense and he is only obligated to pay Art $15,000. For value, Art assigned to Stella the right to receive the $20,000 from Luis. Luis was given notice of assignment. Under these facts:
Luis must pay Stella $15,000.
Ken contracted to set up ordinary accounting books for Paul's business. The contract requires the books to be satisfactory to Paul. Ken set up the books in accordance with generally accepted accounting principles, and a reasonable person would be satisfied with the books. However, Paul refuses to pay because he is not actually satisfied with the books. Under these facts:
Ken can enforce the contract because a reasonable person would be satisfied.
JR contracted to renovate an historic home for June for $50,000. The renovations were completed as required, except JR unintentionally failed to refinish one oak banister. It will cost $250 to have the banister refinished. Under these facts, JR can recover:
$49,750. JR substantially performed his duties. Thus, JR can enforce the contract, and June must pay for the contract price, less damages caused by JR's imperfect performance.
Which contract is not discharged by impossibility?
XYZ contracted to sell a standard Sony stereo to Bob. Prior to performance, XYZ's stereos were destroyed by fire. Xyz can obtain the required stereo elsewhere to deliver to Bob.
Beth agreed to service a computer for AAA Tax Service. Beth unintentionally breached the contract. As a result, the computer suffered $250 damage. As could be anticipated, AAA also lost profits of $500 because it could not complete certain tax returns without the computer. Under these facts, what damages, if any, can AAA recover from Beth?
AAA can only recover compensatory damages of $750.
Juan can obtain specific performance of which contract?
A and B. - Seller contracted to sell Juan a ranch. Seller wrongfully refuses to convey title. - Juan bought a hybrid bull to be used for breeding. Seller wrongfully refuses to perform. The bull is unique and cannot be replaced. Damages cannot be measured.
George found a diamond bracelet in a wall safe that was in his hotel room. The bracelet was placed in the safe by its owner, who then forgot about the bracelet. Under these facts:
The bracelet is mislaid property. George must turn the bracelet over the hotel owner.
In the following cases involving delivery and acceptance, select the correct answer.
Hill rents a boat to Neuman. The boat is located at a distant lake. Hill gives Neuman keys of the boat. Neuman drives to the lake and takes possession of the boat. In this case, Neuman is a bailee.
Which of the following statements correctly describes the type of property involved?
Animals, furniture, clothing, and jewelry are types of tangible personal property.
Quinn rents a paint spray gun from U-Rent-Um Rentals for $25 per day. This bailment is correctly described as a:
Mutual-benefit bailment
Roxie agreed to repair Tom's TV for $100. Pursuant to their contract, Tom delivered the TV set to Roxie. Roxie properly repaired the TV. Tom now refuses to pay for the repairs. Under these facts:
Roxie has a lien on the TV. Roxie can keep the TV until Tom pays the repair charge.
Sis rented a stereo for her apartment from Rent Co. Without authorization, Sis sold the stereo to Third Party who did not know that the stereo belonged to Rent Co. Under these facts:
Sis was not legally entitled to sell the stereo. Third Party did not receive title to the stereo.
In which case is Conn Carrier (a common carrier) liable for the damage or loss in question?
During shipment, goods are stolen by a thief.
Air Inc. (a common carrier) contracted to transport equipment for Shipper. Shipper requested Air Inc. to hold the equipment for one week prior to shipment. During this time, the equipment was damaged. Is Air Inc. liable for the damage to the equipment? *Yes, if equipment was damaged due to the negligence of Air Inc.
...
Pat shipped goods with Freight Inc. Freight Inc. issued Pat a bill of lading for the goods which directs delivery "to the bearer/" Pat negotiated (transferred) the bill of lading to Steve who bought the goods and bill of lading for value and in good faith. The next day, Freight Inc. delivered the goods to Pat without first receiving the bill of lading. Under these facts:
The bill of lading is an order (negotiable) bill of lading.
Ellen bought an economy ticket for a short commute on R&R Railroad, a common carrier. Ellen did not buy a reserved seat that was available. In which case would R&R be liable to Ellen?
Ellen was injured when an R&R employee negligently dropped a suitcase on her foot.
In which situation is the Downtowner Hotel entitled to refuse accommodation to Paula?
B and C. - Paula is denied a room because the hotel does not have any available rooms. - Paula is denied a room because she is intoxicated and she is insulting hotel guests.
A fire occurred at the Candlelight Motel. The fire was started by a cigarette that was negligently discarded by a visitor at the motel. Stan, a guest at the Candlelight, was injured in the fire. The Candlelight was not negligent. Under these facts, is the Candlelight liable for Stan's injuries?
No. A hotelkeeper has a duty to exercise reasonable care to protect guests. Consequently, the Candlelight is not liable for Stan's injuries because it was not negligent.
Daisy checked into the Palms Motel for an overnight stay. Daisy left a coat in her room. While Daisy was having dinner, her coat was taken from her room. Under these facts:
Traditionally, the Palms would have been liable for the missing coat.
Which transaction is a sale of goods that is governed by Article 2 of the UCC?
Floors, Inc., a manufacturer or carpeting, sells a shipment of carpeting to Retailer.
Which contract is a sale of goods that is governed by Article 2 of the UCC?
Seller makes a contract for the sale of movable storage shed. The contract requires Seller to assemble the shed. The contract price is $10,000, which includes $500 for Seller's labor.
One June 1, Dude Inc. and Alexi entered into an agreement whereby Dude agreed to sell Alexi a custom-made talking watch. At time of contracting, the watch had not been made. The watch is to be delivered on July 1. Under these facts:
The agreement is a contract to sell, and title did not pass when the contract was made.
Chemco and Glen entered into an agreement whereby Glen agreed to wrongfully acquire a sample of a competitor's new fertilizer product in consideration for $10,000. Performance of the agreement would be both a crime and tort. Under these facts:
A and B. - The agreement is an illegal contract to sell. - A court would not enforce this agreement.
Which contract(s) is required to be evidenced by a writing to be enforceable?
During on shopping trip to a nursery, Mercedes selected six trees from different parts of the nursery. Each tree cost $200. One purchase agreement was prepared for the six trees.
Fargo Power & Light orally contracted to buy 40 tons of coal from M&M Mining. M&M delivered 20 tons of coal to Fargo. Fargo took receipt of and accepted the 20 tons. Fargo now refuses to accept any more coal. Fargo has not paid for the coal. Under these facts:
The contract is enforceable t the extent that the coal was received and accepted by Fargo. The remainder of the contract is unenforceable.
Which contract is unenforceable?
Peter orally contracted to sell $1,000 of nuts to Buyer. Peter did not deliver the nuts. Buyer sent Peter a check as payment, but Peter refused the check and immediately returned it.
Which contract is unenforceable?
Judy orally contracted to buy $800 of cosmetics. She sent the seller an unsigned purchase order for the cosmetics. The purchase order stated all of the terms of the proposed contract.
On May 1, John contracted to buy an existing, identified cabinet from Seller, a merchant. Documents of title were not involved. Delivery is required at Seller's business. On June 1, Seller tendered delivery of the cabinet to John, but John failed to take it. On July 1, John took physical delivery of the cabinet. Under these facts:
A and C. - John had an insurable interest in the cabinet on May 1. - Risk of loss passed to John on July 1.
Seller, who is located in Atlanta, Georgia, contracted to sell a shipment of eyeglasses to SEE Co., located in Duluth, Minnesota. The eyeglasses were sold "f.o.b. Duluth". Seller duly delivered the eyeglasses to a carrier in Atlanta for shipment to SEE Co. in Duluth. The goods were damaged during shipment. Under these facts:
Seller bears the loss to the glasses that occurred during shipment.
Select the correct answer. (The damage to the goods in question is not the fault of either party.)
Seller contracted to sell an unidentified oven to Buyer. Before risk of loss passed, Seller's inventory of ovens was destroyed. In this case, the contract is not avoided, Seller bears the loss, and Seller is liable for breach if an appropriate oven is not delivered to Buyer.
Fran received a hair dryer from Seller pursuant to a sale on approval agreement. The agreement allows Fran to test the dryer for 14 days; Fran may return the dryer any time within this period if she is not satisfied. Fran received the dryer on June 1. Fran tested the dryer for seven days, and she returned it on June 9. During return shipment, the dryer was damaged. Under these facts:
Title and risk of loss never passed to Fran.
Nicole sold her FAX to Jasper. Jasper paid Nicole with a bad check. Jasper's bank refused to pay the check due to insufficient funds. Prior to Nicole's rescinding the sale, Jasper sold the FAX to Gary for value. Gary was unaware of the transaction between Nicole and Jasper. Under these facts:
B and C. - Gary received valid (good) title to the FAX. - Nicole cannot recover the FAX from Gary.
In which case does Seller breach an express warranty?
Seller stated to Byron: "this ring is solid sterling silver." Byron then purchased the ring, but he later discovered that the ring was made of brass, with only a thin silver plating.
Select the correct statement:
Kit sold an engine to Buyer. Unknown to the parties, Kit did not have title to the engine. In this case, the warranty of title is breached.
In which case is the implied warranty of fitness for a particular purpose breached?
Manufacturer made an unusual egg incubator and sold it to City Zoo. At time of contracting, Manufacturer knew Zoo needed an incubator for hatching ostrich eggs, an unusual purpose, and that Zoo was relying on Manufacturer to make a proper incubator. (Zoo did in fact rely on Manufacturer). The incubator delivered did not hatch ostrich eggs; it baked them.
The implied warranty of merchantability is breached in which case?
None of the above.
M&M Café sold Lucy a guacamole taco. The taco had a piece of avocado pit in it (guacamole is made from avocados, which have pits. ) Under these facts:
Under the reasonable expectation test, the taco is unfit (not merchantable) if Lucy could not reasonably expect to find the pierce of pit in the taco.
Chuck agreed to lend Fay some Money. Under state law, Fay is obligated to pay interest on the loan if she does not repay it on time. However, the agreement between Fay and Chuck does not specify what rate of interest Fay will pay. Under these facts, Fay must pay the:
Legal rate.
Autos Inc. plans to advertise a car for sale on credit. The ad will state the credit price for the car. What information must this ad disclose in order to comply with the Truth-in-Lending Act?
Finance charge; APR; and the number, amount, and due dates of payments.
Susan bought a watch that cost $300. The watch was guaranteed by a written, full one-year warranty. One month later, the watch stopped running. Seller has repeatedly tried to fix the watch, but the watch still does not work. Under these facts:
Susan may request a full refund or a new, replacement watch.
Brenda applied to Lender for credit to buy a car. Brenda was denied credit because of an inaccurate credit report that was negligently prepared for Lender by Reliable Credit Agency. Under these facts:
Brenda can sue Reliable for ordinary damages she suffered due to the inaccurate report.
Theodore issued and signed a negotiable instrument ordering Charles to pay $10,000 on demand "to the order of Mike Lansing." Under these facts:
The instrument is a draft, and it is order paper.
Johannes issued and executed a negotiable instrument promising to pay $5,000 "to bearer" on January 1, 2016. Johannes then delivered the instrument to Reggie. Under these facts:
The instrument is a promissory note, and it is bearer paper.
Otis issued and signed his personal check ordering Last Bank to pay $500 to the order of Yuan Chan. He delivered the check to Yuan. Yuan took the check to Last Bank and authorized bank officer wrote "accepted for payment" on the check and signed it. Under these facts:
Last Bank is a drawee and an acceptor.
Sarah issued and signed a negotiable promissory note promising to pay $1,000 to the order of Martha Yeager. On the back of the note, Martha wrote "Pay to Terrence Jones, (signed) Martha Yeager," and she delivered the note to Terrence. Under these facts:
Martha is an indorser.
Thomas Blue wrote out a promissory note in longhand. He signed the note "T. Blue." His signature was written in the left-hand corner of the instrument. Under these facts:
The note satisfies the writing and signature requirements, and it may be negotiable.
Which writing may be a negotiable instrument?
Kyle signed a note promising to pay $900 on demand to bearer. The note states that the note is given in consideration for a stereo that Kyle purchased from ABC Inc.
Which note be negotiable?
Pete signed a note promising to pay $5,000 on demand to the order of Liz Kelly. In the note, Pete also promised to pay reasonable collection costs and attorney fees if he defaults.
Select the correct answer?
Jake signed and delivered a negotiable draft payable to the order of Carl. To negotiate this draft, Carl must indorse the note and deliver it to a transferee.
RBK Inc. borrowed $500,000 from Lender and RBK issued a promissory note for this amount to Lender. Payment of the note is secured by stock, bonds, and equipment owned by RBK. Subsequently, RBK defaulted in payment of the note. Under these facts:
Lender can sell the stock, bonds, and equipment to obtain payment of the note but any excess proceeds belong to RBK.
Dave issued a check to Payee. Payee indorsed the check and delivered it to Harold. At Harold's request, the First Bank of Fruita (drawee bank) certified the check. Under these facts:
All of the above. - Certification discharged Dave from his liability to pay the check. - Certification binds First Bank of Fruita to the admissions made by an acceptor. - Certification caused First Bank of Fruita to become liable to pay the check.
Select the correct answer:
Ken does all his banking with City Bank. Ken's creditor asks City Bank for private information regarding Ken's assets and debts. In this case, City Bank owes Ken a duty to protect the confidentiality of this information; it should not disclose this information.
Oscar issued a check payable to Juanita. Juanita negotiated the check to Laura (a holder in due course). On October 1, Oscar gave his bank an oral stop-payment order. On October 10, Laura presented the check for payment and Oscar's bank paid the check. Under these facts:
The stop-payment order was valid, but it does not automatically terminate Oscar's liability to pay the check.
Cody has a checking account with State Bank. Cody has $1,000 in his checking account. Cody issued a check payable to Payee for $500 in payment of a debt. Payee properly presented the check for payment to State Bank, but State Bank dishonored the check. As a result, Cody incurred $50 damages and Payee incurred $25 damages. Under these facts:
State Bank is liable to Cody for $50 damages; State Bank is not liable to Payee.
Drawer issued a check payable to the order of Penny Thompson. Penny indorsed the check "Penny Thompson" and delivered it to Terry. Under these facts:
Penny may have secondary liability to pay the check if it is dishonored.
Drawer issued a check payable to the order of cash, and delivered it to Peter Bryan. Peter indorsed the check "Pay to Tip Wilson, (signed) Peter Bryan." Under these facts:
Peter's indorsement is a special indorsement. To further negotiate this check, Tip must indorse the check and deliver it to a transferee.
Maker issued her negotiable promissory note to Barry Mills. Barry transferred the note to Hans for value. Barry indorsed the note" without recourse, Barry Mills." Under these facts:
A and B. - Barry's indorsement is a qualified indorsement. - Barry does not have secondary liability to pay the note if Maker fails t pay.
Maker issued a negotiable note and delivered it to Rose. The note is payable to bearer. Rose negotiated the note to Wilbur without indorsing it. Under these facts:
Rose does not have secondary liability to pay the note if Maker fails t pay.
Select the correct answer:
Wally issued a check that was drawn on Peoria Bank, as drawee. Peoria Bank accepted the check for payment. In this case, Peoria Bank has primary liability to pay the check.
In which situation may Nick Ames have secondary liability top pay the face amount of the check?
A and C. - Nick indorsed a check "Nick Ames," and negotiated it to a holder. - Nick signed and issued a check payable to cash.
Martha issued a negotiable note to Paula. The note was due May 1. Paula indorsed the note and negotiated it to Harry. On May 1, Harry presented the note to Martha and Martha refused to pay. On May 3, Harry gave written notice to Paula that Martha had refused to pay. In this case:
Paula is obligated to pay the note based on her secondary liability.
B&K Inc. authorized its president, Tim Blue, to borrow $50,000 from Bank. Tim negotiated a loan and he signed a note in the manner indicated below. In this case, select the correct answer.
B&K Inc. is liable to pay the promissory note.
In which case does Holder give value?
Make issued a note to Priscilla. Priscilla negotiated the note to Holder in payment for equipment that Holder delivered to Priscilla.
Maker signed a note for $10,000 which is payable May 1, 2013. Maker delivered the note to Paul. On June 1, 2012, Paul negotiated the note to Antonio. Antonio would NOT be acting in good faith in which situation?
Antonio bought the note from Paul for $1,000 (an unreasonably large discount). Under the circumstances, a reasonable person would have known that something was improper.
In which case did Holder have notice that the note was overdue or had been dishonored?
A and B. - Maker issued a note that was due June 1. Payee negotiated the note to Holder on June 2. - Maker issued a note due May 1, 2014. The note was negotiated to Holder on April 1, 2012. At time of negotiation, Holder knew that time for payment of the note had been accelerated.
In which case did Holder take the check with notice of a defense or adverse claim?
Drawer issued a check for Payee's services. At the time Payee negotiated the check to Holder, Holder knew that Drawer claimed that Payee had improperly performed the services.
Denise issued three checks to various payees. In which case does Denise have a limited defense?
Denise issued a check to Contractor in payment for certain remodeling work. Contractor performed the work improperly, a breach of contract.
Maker issued three negotiable notes. In which case doe maker have a universal defense?
Maker issued a note to Lender. Maker issued the note due to the wrongful threats of Lender. Under state law, the duress exerted by lender would render a contract void.
Mr. Conrad issued a negotiable promissory note payable to Seller in payment for a new crane. Seller negotiated the note to Mr. Innocent, a holder in due course. Which defense can Mr. Conrad use against Mr. Innocent?
Mr. Conrad has a defense of insanity because he had been previously declared incompetent by a court. Under state law, this defense renders a contract void.
Vanessa issued a check for $500 in payment for some goods. The seller negotiated the check to an innocent purchaser. Which defense can Vanessa assert against the innocent purchaser?
Vanessa has a defense of minority. Vanessa is 17 years old.
Cameron has filed a civil suit against Ann regarding a car accident. Cameron is suing Ann for money to compensate him for the destruction of his car. What remedy should Cameron request?
Damages
A state supreme court has adopted a precedent holding that a promise cannot be enforced unless it is made pursuant to a contract. Kelly has filed a civil suit against Joan, suing Joan for breach of a promise that was not made pursuant to a contract. In this case:
The doctrine of stare decisis requires the trial (lower) court to follow the precedent.
Assume that a federal law requires R&R Inc. to pay time and a half for hours worked by employees in excess of 40 hours per week. However, a state law requires only overtime pay for hours worked in excess of 50 hours per week. R&R maintains that (1) the federal statute violates the US Constitution and (2) the state law prevails over the federal law. In this case:
The federal statute prevails over the state statute.
Traditionally, which offense is classified as a felony?
Lee stole a car. This offense is punishable by imprisonment for five to ten years.
In which of the following situations would a law be likely to be passed?
The majority of people believe it is unethical to injure someone by playing with a loaded gun.
The state legislature is considering enactment of a law that would require businesses to install filtering equipment to purify wastes before they are emitted into the air. there are conflicting views among the citizens as to the need for this law, although serious lung problems have occurred in residents exposed to the unfiltered emissions. Which statement best describes the reason favoring enactment of the law?
Seriousness of the consequences of the behavior to be regulated.
All rules are laws.
False
The main objective of law is to provide lawyers and judges with jobs
False
Misdemeanors are more than serious felonies.
False
Ethical standards stay constant over time.
False
Written laws enacted by legislative bodies are called statues.
True
Ethics is the study of morality of conduct.
False
The original U. S. Constitution as adopted in 1792 guaranteed individual rights for citizens.
False
A courts permanent order forbidding an action is called a/an
Injunction
Most of American law has its roots in
English Common Law
Where do our laws come from?
JUSTICIAL DECISIONS, LEGISLATIVE STATUTES, CONSTITUTIONS AND ADMINISTRATIVE AGENCIES.
Custom which has come to be recognized as binding by the court is
Common law
Statutes can be characterized as:
BY GROUPS OF PERSONS ELECTED BY THE VOTERS.
Administrative agencies:
HAVE THE POWER TO REGUALTE PARTICULAR MATTERS OR IMPLEMENT LAWS.
A rule is called a law when it
IS ISSUED BY A SOVEREIGN STATE.
An objective of the law is to:
SET RULES OF CONDUCT FOR MANY TRANSACTIONS.
Appellate courts hear cases again after lower courts initially hear them.
True
The special federal courts are limited in their jurisdiction by the congressional laws that created them.
True
The U.S. Supreme Court cannot reverse its own decisions.
False
Tax and bankruptcy courts are considered special courts.
True
A normal way a case gets to the Supreme Court is by application for a writ of habeas corpus.
False
Trial procedure follows prescribed procedural law.
True
The plaintiff has the burden of proving facts adequate to support the allegations in the complaint.
True
In a typical jury trial:
THE JURY IS SELECTED BEFORE OPENING STATEMENTS ARE MADE.
The power of authority to hear a case is called:
Jurisdiction
The highest court in the land is the
UNITED STATES SUPREME COURT.
In a state court of record, the chief officer is the:
Judge
If a person properly files a lawsuit in accordance with specified law, that person has followed what kind of law?
Procedural
The first step in bring a legal action is:
Filing suit
An anonymous remailer is a devise that permits sending anonymous email messages.
True
Tortious acts can never be considered crimes also.
False
The unauthorized use of or access to a computer is computer transfer.
False
Marks that are fanciful, arbitrary or subtly suggest something about the product, such as the Nike "Swoosh," cannot be legally protected.
False
Manufacturers of products could be liable for injuries caused by their products.
True
Strict tort liability makes it impossible for an injured person to recover damages from the manufacturer of a defective product.
False
A person who commits a tort and causes injury is called a
Tortfeasor
To recover for an intentional tort, the injured person must show:
DEFENDANT'S ACT ALONE, AN INTENTION TO CAUSE THE CONSEQUENCES OF THE ACT ALONE AND CAUSATION AND INTENT.
A false statement of fact that degrades the quality of another's goods or services is called
INJURIOUS FALSEHOOD.
Fraudulent conversion of another's property by someone is lawful possession of the property is called:
Embezzlement
Taking and carrying away property without consent of the person in possession is called:
Larceny
The unauthorized use of or access to a computer is computer
Trespass
A doctrine that makes manufacturers liable without proof of negligence is called
STRICT tort liability
Government regulation of business is conducted by the judicial branch.
False
The two types of administrative agencies are regulatory and nonregulatory.
True
All agencies have the power to set standard rates.
False
The most important antitrust law is the Civil Rights Act of 1964.
False
The Robinson-Patman Act prohibits price discrimination
true
The United States has very few federal laws regarding the environment.
False
The Federal Trade Commission Act encourages false advertising
False
Government regulates business to:
ELIMINATE ABUSES AND MINIMIZE UNDESIREABLE CONDUCT.
Powers of regulatory agencies include:
LICENSING AND RATE-MAKING.
Sate superfund laws:
IMPOSE A LIABILITY FOR CLEANUP COSTS OF HAZARDOUS WASTES
The first national environmental piece of legislation was the:
Clean Air Act
The Water Pollution and Control Act regulates U. S. waters and adjacent
WETLANDS.
Activities that are illegal regardless of their effect are called
PER SE violations.
In a contract, all parties obtain rights and assume certain responsibilities
True
Contracts are the best basis of today's business transactions.
True
All agreements are binding contracts.
False
A valid contract can be set aside by one of the parties.
False
All contracts must be typewritten.
False
An agreement with no legal effect is a void contract
True
Another term for an informal contract is a simple contract.
True
One may have rights and obligations imposed by law when no real contract exists.
True
All contracts:
MUST BE SUPPORTED BY CONSIDERATION.
A contract in which parties indicate their intentions by written or spoken words is a/n
EXPRESS contract.
Formal contracts include
NEGOTIABLE INSTRUMENTS
A contract consisting of a mutual exchange of promises to perform future acts is
A BILATERAL CONTRACT
Unjust enrichment
OFFENDS OUR ETHICAL PRINCIPLES.
Two essential elements of a contract are offer and counteroffer
FALSE
An offer can be definite or vague, depending upon the situation.
False
An offer must be communicated in some manner to an offeree.
True
If an offer was made in a moment of extreme fear or anger, there is every reason for an offer to believe it was seriously intended.
False
Invitations and offers are the same thing.
False
An option cannot be revoked at will
True
The person who makes the offer is the
Offeror
Regarding the duration of an offer:
DEATH OR INSANITY OF OFFEROR TERMINATES THE OFFER
Offeree's assent that an offer can be a contract is called:
Acceptance
An offer may be accepted
IN A REASONABLE MANNER.
The agreement which is vital to a contract.
IS FREQUENTLY CALLED "A MEETING OF THE MINDS"
A written offer can be accepted by the offeree:
AFTER THE OFFEROR HAS COMMUNICATED IT TO THE OFFEREE.
In order to have a valid contract there must be:
OFFER AND AN ACCEPTANCE.
When an offer is made:
CAN BE REVOKED EVEN IF THE OFFEROR HAS PROMISED TO KEEP IT OPEN.
When no time is specified in the offer, the reasonable time and offer is open
VARIES WITH EACH CASE DEPENDING ON THE CIRCUMSTANCES.
All states are consistent in their laws regarding capacity to contract.
False
Most minors' contracts are voidable at the adult's option.
False
Minors are liable for the reasonable value of necessaries.
True
Dental work can be considered a necessary.
True
In most jurisdictions, if a minor disaffirms a contact and returns the property in damaged condition, the adult can recover damages.
False
Intoxication can destroy contractual capacity.
True
In many states, convicts can now make contracts.
True
A person who is old enough to make fully binding contracts is called and adult.
True
A contract made by a person who has not been formally adjudicated incompetent and is lucid at the time of binding (or valid).
True
A person who has been found by a court to be guilty of a major crime offense is a tortfeasor
True
The repudiation or setting aside pf a contract is called:
Disaffirmance
In most states, contracts made by judicially declared incompetent people are
Void
Contracts made with minors are
VOIDABLE AT MINOR'S DISCRETION BEFORE MINOR REACHES MAJORITY.
Regarding minors and torts:
MINORS ARE AS LIABLE FOR TORTS AS ADULTS ARE.
Constitution is whatever the promisor demands and receives as the price for a promise.
False
If Johnson promises to sell Laurtitson a nail gun and the nail gun arrives the next day, the promise is consideration.
True
Adequacy of consideration is a major factor of a promise.
False
Some circumstances exist in which partial payment of a past-due debt can e classified as consideration.
True
Forbearance is valid consideration if the promisor has a right to do the act.
True
If Khumbata makes a pledge to his local Public Broadcasting System television station, he has made a voluntary subscription.
True
Promising not to sue someone is consideration even if one does not have a basis for suing.
False
Which of the following can be called valid consideration
A PROMISE TO DO SOMETHING IN EXCHANGE FOR ANOTHER PROMISE.
When one refrains or promises to refrain form doing something, it is called
Forbearance
A judgment against a person's car would be:
AN OBLIGATION OF RECORD.
An element of promissory estoppel would be:
IF A PROMISE IS MADE.
Which of the following is sufficient and valid consideration?
REFRAINING FROM DOING OR PROMISING TO REFRAIN FROM DOING WHAT ONE HAS NORIGHT TO DO.
Consideration can include:
A PROMISE TO GIVE AWAY ONE'S CAR.
Refraining from doing something is valid consideration with the act refrained from:
IS SOMETHING THE PROMISOR HAS NO RIGHT TO DO.
Uniform Commercial Code provides that the parties' modification of a contract for the sale of goods:
DOES NOT REQUIRE CONSIDERATION.
A mutual mistake occurs when only one party makes a mistake
False
All courts interpret "mutual mistake" the same way
False
When a unilateral mistake of fact has been made, the mistaken party may sometimes receive relief.
true
Sometimes contracts are made orally the committed to writing. If, through a typographical error, the written form foes not conform to the oral form, the written form does not bind the parties.
True
A mistake of opinion can render the contract void.
False
If Ransome sells the Chevallier, a car for $10,500 when the car's value was really $4,400, Chevallier can rescind the contract because of mistake.
False
A unilateral mistake:
IS MADE BY ONLY ONE OF THE PARTIES.
A mistake as to the terms of the contract usually result from
FAILURE TO READY THE WRITTEN CONTRACT.
One who intentionally induces another to enter into a contract as the result of a false statement or material fact commits:
Fraud
A party who actually does something or takes steps to cause a fraud commits:
EXACT REPRESENTATION
If a real estate agent knows the house on a piece of property has foundation problems and doesn't tell her prospective buyer because it may scare the buyer away, the real estate agent is guilty of
Passive Fraud
When a person destroys another's free will by obtaining contractual consent as a result of a wrongful threat, it is called
Duress
Duress can be classified as:
PHYSICAL, EMOTIONAL AND ECONOMIC
Some contracts can be for unlawful purposes, depending upon who negotiates them
False
A contract that is set aside because of illegality always involves the commission of a crime.
False
If a contract contains both distinctively legal and illegal parts, a court can set aside the illegal part and enforce the legal part
True
Under common law, private wagering contracts were unenforceable. However, now under the UCC, most private contracts are enforeceable.
False
Sunday contract laws are consistent within all 50 states.
False
All contracts to obstruct justice are void
True
The legal rate is considerably higher than the contract rate.
False
All contracts that may from their nature injure public service are void
True
Discriminating in price between competing buyers when the goods are of like grade, quality, and quantity is considered unfair competitive
True
The highest rate of interest that may be charged is called
MAXIMUM CONTRACT rate
State laws that limit the rate of interest that may be charged for the use of money are called
usury laws
A contract not to compete
CAN BE VALID WHEN BUYING A BUSINESS OR MAKING AN EMPLOYMENT CONTRACT.
Contracts to generally restrain trade are in violation of the
SHERMAN ANTITRUST ACT.
A contract that is contrary to public policy would be
A CONTRACT TO LIMIT THE FREEDOM OF MARRIAGE.
It is always a good idea (but not a requirement) for all contracts to be in writing
True
It is often difficult to prove oral contracts.
True
The English Parliament enacted the Statute of Frauds in 1814 as a response to legal issues arising from the War of 1812.
False
An agreement to lease land must be in writing, in accordance with that Statute of Frauds.
True
Contracts for services that take less than six months must be in writing.
False
An agreement by which one person promises to pay a sum of money or to give property to another in consideration of marriage is illegal.
False
Electronic signatures are now permissible and legally enforceable.
False
Both parties must have signed the note or memorandum required by the Statute of Frauds.
False
The Statute of Frauds applies only to:
EXECUTORY CONTRACTS.
A breach of contractual obligations other than money, such as a contract to build a house, is referred to as
DEFAULT
If a promisor agrees to become responsible for the debts or default of another, it:
MUST BE IN WRITING
Parol evidence means:
SPOKEN WORDS
A contract involves right but not necessarily obligations.
False
If a person incidentally benefits by the performance of a contract, suit for breach or for performance will be successful.
False
Novation can be implied from the parties' actions.
True
An assignment means that one party conveys right in contract to another who is not a party to the original deal.
True
Whether rights may be assigned depends upon their nature and the terms of the contract.
True
A carrier of goods is a bailor
FALSE
A carrier of goods is a bailor Moving vans, delivery services, and truck fleets are usually considered private carriers
TRUE
A common carrier must serve without discrimination to all who apply.
TRUE
A carrier is liable for damage due to the inherent nature of goods, such as rotting of fruits.
FALSE.
An order bill of lading is negotiable.
TRUE
A carrier may charge extra for baggage in excess of a reasonable amount.
TRUE
A hotelkeeper's lien on baggage extends to all wearing apparel not actually being worn.
TRUE
The relationship of guest and hotelkeeper continues even if the guest arranges for permanent residence at the hotel.
FALSE.
A private carrier can refuse service that is unprofitable.
TRUE
A/n _______ carrier transports goods or persons, without discrimination, for all who apply for that service.
COMMON
Which of the following is NOT considered an "act of God"?
RAINSTORM
Regarding shipments, which piece of legislation governs interstate shipments?
FEDERAL BILLS OF LADING ACT
The liability of a carrier for the passengers' safety begins:
AS SOON AS A PASSENGER ENTERS THE TERMINAL OR WAITING PLATFORM.
Duties of a hotelkeeper include:
PROTECTING A GUEST'S PERSON.
Another term for "goods" is movable, personal property.
TRUE
Article 2 of the UCC is effective in all states except Montana.
FALSE
A sales contract that does not meet the requirements of the UCC is unenforceable.
TRUE
A contract to sell goods is a contract whereby the seller agrees to transfer ownership of goods in the future.
TRUE
A contract to sell has the same legal effect as a contract of sale.
FALSE
Goods that are not existing are called future goods.
TRUE
A standardized bill of sale form is required for all sales.
FALSE
If any question arises as to whether the buyer came into possession of goods legally, a bill of sale is acceptable proof.
TRUE.
An important distinction between a sale and a contract to sell is the
TITLE.
Contracts, copyrights, certificates of stock, accounts receivable and notes receivable are known as
INTANGIBLE PROPERTY.
The consideration in a sales contract is generally expressed in terms of money or money's worth and is known as the
PRICE.
If a sale is divisible, having a legal part and an illegal part:
THE COURT WILL ENFORCE ONLY THE LEGAL PART.
If questions arise about what law governs and international contract for the sale of goods, the U. S. will look to the
UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS.
All contracts for the sale of goods must be in writing when the sale prices is $1000 or more.
FALSE
If several items are placed on the same sales transaction, it is considered one sale and must meet the statute requirements.
TRUE
If a separate sales slip is written for each purchase as an individual goes through a store, the series is considered one sale.
FALSE
An oral contract may be enforced if the buyer has made full payment on the contract.
TRUE
In some instances, the absence of a writing does not bar the proof of a sales contract for $500 or more.
TRUE
A check or promissory note tendered as payment but refused by the seller still constitutes a payment under the Statute of Frauds.
FALSE.
For the exception of nonreallable goods to apply, the seller must have made a substantial beginning in manufacturing the goods.
TRUE
An auction is a sale in which a seller or seller's agent orally asks for bids on goods and orally accepts the highest bid.
TRUE
An auction contract is made when a bidder calls out a bid.
FALSE
Goods in an auction may be offered for sale with reserve or without service.
TRUE
Taking possession of the goods is called
RECIEPT.
When person voluntarily acknowledges a fact during the course of some legal proceeding, it is called
JUDICIAL ADMISSION.
In an auction, if a bid is made while the hammer is falling in acceptance of a prior bid, the auctioneer:
HAS THE OPTION OF REOPENING THE BID OR DECLARING THE GOODS SOLE.
To satisfy the Statute of Frauds, what happens?
THE WRITING NEED ONLY GIVE ASSURANCE THAT A TRANSACTION EXISTED.
In the vast majority of sales transactions, either the buyer or the seller experiences some type of problem.
FALSE
If existing goods require transporting, title passes at the time and place of contracting.
FALSE.
Risk of loss for damaged goods remains on the merchant seller.
TRUE.
A thief may legally transfer title to property.
FALSE.
Risk of loss to unidentified goods falls on the buyer.
FALSE
A returnable goods transaction is not considered a sale if the goods are purchased for resale.
FALSE
The holder of a document of title may convey the title of the person who left the property with the issuer of the document.
TRUE
The buyer of a motor vehicle bears the risk of loss when the transaction between buyer and seller is completed even if the buyer isn't in physical possession of the new title.
TRUE.
The right of ownership of property or evidence of ownership is called
TITLE.
The letters "F.O.B." stand for
FREE ON BOARD.
Goods of like nature that may be sold by weight or measure are _______ goods.
FUNGIBLE
Use of goods by a buyer for the purpose of trial:
DOES NOT MEAN APPROVAL.
An agent that denotes property is possessed for the purpose of sale by someone who does not own it is called
CONSIGNMENT
If a buyer has voidable title, such as when the goods were obtained by fraud, the seller can:
RESCIND THE SALE.
Whenever canned peas are sold, no breach of warranty exists if ground glass is found in the can.
FALSE.
Full warranties permit a refund or replacement if the product contains a defect after reasonable attempts to remedy it.
TRUE
Consumer protection protects legitimate businesses as well as consumers.
TRUE
Consumer protection laws give consumers the ability to make intelligent choices when comparing products.
TRUE
The annual percentage rate (APR) is the same thing as finance charges.
FALSE
Credit reporting agencies must correct any inaccurate information contained in credit reports.
TRUE
The assurance that the seller has ownership of goods an the transfer to a buyer is lawul is called warranty of encumbrances.
FALSE
Every seller warrants that goods will be delivered free from any security interest or any other lien or encumbrance of which the buyer at the time of making the contract had no knowledge. .
TRUE
Sales of patent- or trade- name articles are
TREATED WITH RESPECT TO WARRANTIES IN THE SAME WAY AS ANY OTHER SALE.
Which of the following statements constitutes a warranty?
THIS GARMENT IS MADE FROM 100% COTTON FIBER.
The exclusion of warranties:
CAN BE MADE BY UNCONSCIONABLE PROVISIONS.
An implied warranty arises:
AUTOMATICALLY WHEN A SALE IS MADE AND IS IMPOESED BY VIRTURE OF THE LAW.
Laws that fix the maximum rate of interest that may be charged on loans are called
USURY LAWS
The law that requires creditors to notify potential recipients of credit whenever any adverse action was based on a credit report is the
FAIR CREDIT REPORTING ACT.
References to bills of exchange and instruments of credit appeared as early as 6000BC.
FALSE
A not must be payable to "bearer."
FALSE
A person who accepts a draft is called the drawer.
FALSE
Order paper is negotiated only by endorsement of the person to whom it is then payable and by delivery of the paper to another person. .
TRUE
A draft is also called a bill of lading.
FALSE
A check is a type of note.
FALSE
A bearer is a holder of negotiable instruments. .
TRUE
A preauthorized credit done electronically still requires the payee to deposit a check.
FALSE
The act of transferring ownership of a negotiable instrument to another party is called _________..
NEGOTIATION
The person to whom any negotiable instrument is made payable is called the _______.
PAYEE
Who is the original holder of an instrument?
THE PAYEE
A system of shortening the trip a check makes from the payee to the drawee bank and then to the drawer is called check .
TRUNCATION
When an instrument is transferred by assignment:
THE ASSIGNEE RECEIVES ONLY THE RIGHTS OF THE ASSIGNOR AND NO MORE.
"POS" is an abbreviation for:
POINT OF SALE.
A negotiable instrument may be oral or written.
FALSE
If a maker cannot write his or her name, someone else must forget the name.
FALSE
The order or promise to pay must be absolute and unconditional. .
TRUE
The only way an instrument can be made payment is on demand.
FALSE
It is not necessary to use the word order when drawing a negotiable instrument, but it is certainly recommended.
TRUE
Negotiable instruments don't have to be paid in American money.
TRUE
If Last National Bank negotiated a variable interest loan to Keston, Keston could come back and say the variable rate destroys negotiability.
FALSE
Which of the following would be a legally acceptable promise?
I PROMISE TO PAY RAY JOHNSON $5000 ON MARCH 21.
Which of the following destroys negotiability of a note?
PAYMENT IN GOLD BULLION.
The intentional transfer of possession and control of something is called:
DELIVERY
If a negotiable instrument is only partially filled in and signed before delivery:
THE MAKER OR DRAWER IS LIABLE IN THE BLANKS ARE FILLED IN ACCORDING TO INSTRUCTIONS.
A negotiable instrument:
NEED NOT BE DATED.
All promissory notes are negotiable.
FALSE
Coupon bonds can be negotiated by delivery.
TRUE
The UCC classifies a certificate of deposit as a draft.
FALSE
By accepting a draft, a drawee assumes liability for the payment of the paper.
TRUE
The number s at the bottom of a check identifies the type of check it is.
FALSE
A check on which additional space is provided for the drawer to make a notation for which the check is issued is referred to as a trailing edge check. .
FALSE
The bank must honor any written document that contains the substance of a normal printed check, even if that document is printed on a cocktail napkin.
TRUE
A stop-payment order must be in writing.
FALSE
Although a bank has many responsibilities to its customers, customers have no responsibilities themselves. .
FALSE
A written contract obligation, usually under seal, generally issued by a corporation, municipality, or government, that contains a promise to pay a sum at a fixed date is called a .
BOND
An unsecured bond or note issued by a business firm is called a .
DEBENTURE
A type of draft used in the sale of goods is called a
TRADE ACCEPTANCE.
A check drawn by one bank on another is called a
BANK DRAFT.
A check drawn prior to the time it is dated is called a
POSTDATED CHECK.
Bearer instruments may be negotiated by delivery.
TRUE
If the name of the payee or indorsee of an instrument in misspelled, it renders the check void.
FALSE
A blank endorsement is one having no words other than the name of the indorser.
TRUE
If an agent receives checks in payment of the principal's claims but the checks are made payable to the agent personally, the agent should elect to use a qualified indorsement.
TRUE
The indorsement "without recourse" destroys only the liability of the indorser and does not affect any warranties.
TRUE
A person can still be liable on instruments if debts have been discharged by bankruptcy.
FALSE
Loss or destruction or a negotiable instrument automatically discharges its obligation.
FALSE
When bearer instruments are negotiated by delivery, that delivery effectively vests ownership in the transferee, making the transferee a holder.
TRUE
Negotiable instruments are rarely made payable to more than one person.
FALSE
Banks require that and indorsement on a check be
ON THE BACK WITHIN ONE AND A HALF INCHES OF THE TRAILING EDGE.
If a negotiable instrument is made payable to multiple persons:
INDORSEMENT DEPENDS UPON THE LANGUAGE USED IN THE INSTRUMENT.
A ____________ indorsement designates the particular person to whom payment should be made.
SPECIAL
A ________ indorsement attempts to prevent the use of the instrument for anything except the intended use.
RESTRICTIVE
The unilateral act of an instrument holder, usually without consideration, whereby the holder gives up rights on the instrument or against parties to the instrument is called .
RENUNCIATION
One who has received a negotiable instrument as a present can be a holder in due coarse. .
FALSE
Parties whose signatures do not appear on negotiable instruments are not normally held liable for payment.
TRUE
An instrument transferred on the date of maturity is past due.
FALSE
A drawee is liable for payment of a draft only after accepting it.
TRUE
When a bank returns a check to the holder stamped "insufficient funds," that is considered dishonoring the check.
TRUE
A peel-away is a claim by a party being sued against the party suing.
FALSE
Unless excluded, warranties are automatically made by every transferor of commercial paper. .
TRUE
The make of a note is
PRIMARILY LIABLE FOR ITS PAYMENT.
The demand for acceptance of payment made upon the maker, acceptor, drawee, or other payor of commercial paper is called
PRESENTMENT.
A reasonable time to make a presentment for drawers on uncertified checks is
30 DAYS.
A/n ___________ default occurs when not all payments on an instrument have been fully made and have not been made by the due date.
UNCURED
A person in relationship of trust and confidence is called .
FIDUCIARY
Indorsers who escalate their liability to primary status are called .
GUARANTORS
A limited defense is one that cannot be used against a holder in due course. .
TRUE
Limited defenses can also be called personal defenses and are different from universal defenses.
TRUE
Generally, the defenses available in a dispute over a contract may be raised against holders who qualify as holders in due course.
FALSE
When a person knows a commercial paper is being executed and knows its essential terms but is persuaded to execute it because of false statements, this is a defense against a holder in due coarse.
FALSE
Minority is considered a universal defense.
TRUE
Forgery is considered a hybrid defense.
FALSE
The fact that the law makes certain transactions illegal gives rise to a defense against an ordinary holder. .
TRUE
If incapacity makes an instrument void, the incapacity is a/n
UNIVERSAL DEFENSE.
If any term in a negotiable instrument is left blank and the drawer then delivers the instrument to another person for completion, the drawer:
CANNOT RAISE THE DEFENSE OF IMPROPER COMPLETION AGAINST THE HOLDER IN DUE COURSE
Duress:
CAN BE CLAIMED AS A HYBRID DEFENSE.
The unauthorized change in an instrument that modifies in any respect the obligation of a party to incomplete instrument is called .
ALTERATION
A hybrid defense would be
INCAPACITY OTHER THAN MINORITY.
Several defenses (called hybrid defenses) may be either universal or limited, depending on the circumstances of a case. Which of the following is NOT on of these?
MINORITY.
Notice must be given to the other party in order to make the assignment effective between the assignor and the assignee.
False
A delegating party remains fully liable under a contract.
True
If Rochon and Bailey both sign a contract "I promise...", that binds them jointly and severally.
True
A delegation relieves the delegating party of all liability under the contract.
False
A person to whom the promissee owes an obligation or duty that will be discharged to the extent that the promisor performs the promise is called the
CREDITOR beneficiary.
A/n __________beneficiary is one to whom the promise owes no legal duty but to whom performance is a gift, such as the beneficiary named in a life insurance contract.
Donee
The party making the assignment is the _______The party making the assignment is the _______
Assignor;assignee
When an assignment is made by acts of the parties, it:
MAY BE EITHER WRITTEN OR ORAL.
Warranties of the assignor include:
THE RIGHT IS VALID AND EXISTING AT THE TIME THE ASSIGNMENT IS MADE.
When two or more persons enter into a contract with someone else, the contract may be joint, several, or joint and several. What determines the type of contract?
THE INTENTION OF THE PARTIES.
When all terms of a contract have been fulfilled, the contract is discharged by novation.
False
Legal tender usually refers to any form of U.S. money.
True
If the tender used as payment is refused, the debt is discharged.
False
Satisfactory performance and substantial performance are the same thing
False
Bankruptcy can discharge contracts.
True
A debt that has been outlawed by the statute of limitations can never be revived.
False
In some cases, a person other than the injured party of a contract may sue a professional person for malpractice.
TRUE
A substantial, intentional alteration of a written contract without the consent of the other party discharges the contract.
True
A substantial, intentional alteration of a written contract without the consent of the other party discharges the contract.
TENDER OF PERFORMANCE.
If a contract involves specific subject matter, the destruction of the matter without the fault of the parties:
DISCHARGES THE CONTRACT BECAUSE OF IMPOSSIBILITY OF PERFORMANCE.
Causes of contract being discharged because of impossibility of performance include:
NEW LAWS MAKING THE CONTRACT ILLEGAL, PHYSICAL INCAPACITY OF PERSONS TO RENDER PERSONAL SERVICES, WRONGFUL ACTS OF OTHER PARTIES.
If a plaintiff in a suit for breach of contact can prove any substantial loss but just wants to prove a point, the most likely type of damages she will get is called
NOMINAL damages.
Damages paid to go beyond merely compensating to punishing the defendant are called
PUNITIVE DAMAGES.
In cases when neither a suit for damages nor rescission will constitute adequate remedy, what may be applied?
SUIT FOR SPECIFIC PERFORMANCE
Property includes only physical, tangible things.
False
Anything that can be owner is considered property.
True
Creation cannot be a viable way to acquire personal property according to the UCC
False
The transfer of possession, but not title, of personal property by one party is called bail bonding.
False
A bailment can be for the sole benefit of the bailee.
True
The bailor is the one who accepts possession of the property but not the title.
False
In an instance of bailment, actual delivery and acceptance results when goods themselves are delivered and accepted.
True
Property that can be seen, touched, and possessed is known as
TANGIBLE property.
Ownership most commonly occurs through
Purchase
A copyright:
GIVES THE OWNER THE EXCLUSIVE RIGHT TO REPRODUCE, COPY, OR PERFORM A WORK.
A CONSTUCTIVE
bailment arises when someone finds and takes possession of the lost property.
In a/n ______bailment, the bailee renders a service and charges for the service. Then the bailee holds a lien against the bailed property for the charges.
MUTUAL-BENEFIT
The unauthorized exercise of ownership rights over another's property is called
CONVERSION.
Law
those rules of civil conduct commanding what is right and prohibiting what is wrong (Blackstone=s definition)
a rule of action prescribed by an authority able to enforce its will
governmental rule prescribing conduct and carrying a penalty for violation
Damages
sum of money a wrongdoer must pay to an injured party
Business law
those rules of conduct prescribed by government and its agencies in regulating business transactions
Common law
customs which have become recognized by the courts as binding on the community
non-legislated principles and rules of action predicated upon usages and customs
Equity
justice system based on fairness
provides relief other than merely money damages
Injunctive powers
power to issue cease-and-desist orders
Restraining order
court's temporary order forbidding an action
Injunction
a permanent judicial order or decree forbidding the performance of a certain act
court's permanent order forbidding a specific action
Case law
appellate court decisions that establish precedented principles
Precedent
a decision of a court which is thereafter followed as an example in subsequent similar cases•court decision that determines the decision in a subsequent, similar case
Stare decisis
the principle that the decision of a higher court should serve as a guide or precedent and control the decision of a similar case in the future•principle that a court decision controls the decision of a similar future case
Constitution
any fundamental or important law or edict•document that contains fundamental principles of a government
Bill of Rights
first 10 amendments of the U.S. Constitution, enacted by the first Congress to protect the civil rights and liberties of citizens and states
Statutory law
law created by legislative bodies in contrast to law generated by judicial opinions (case law) and administrative bodies (administrative law)
Statute
a law enacted by legislative bodies
Municipal ordinances
- a law enacted by a local municipal governing body (e.g., zoning, building, safety, etc.)
Building code
laws, ordinances, and government regulations setting forth requirements for construction, maintenance, operation, occupancy, use or appearance of buildings
Zoning ordinance
laws passed by a municipality by virtue of its police power which regulates and prescribes the kind of buildings, residences, or businesses that shall be built and used in different parts of the municipality
Administrative law
that body of law created by federal and state administrative agencies to implement their powers and duties in the form of rules, regulations, orders, and decisions
Administrative agency
a governmental body created by legislation empowered to regulate an industry and issue rules and regulations•governmental board or commission with authority to regulate matters or implement laws
Rules and regulations
enactments by an administrative body within the jurisdiction of that agency
Federal Trade Commission (F.T.C.)
an agency of federal government created in 1914 to promote free and fair competition by prevention of trade restraints, price fixing, false advertising, and other unfair methods of competition
Occupational Safety and Health Administration (O.S.H.A.)
a governmental agency with the responsibility for regulatory and enforcement of safety and health matters for most employees
Civil law
legal proceedings concerned with the rights of public citizens•body of law dealing with enforcement or protection of private rights•the body of law concerned with private or purely personal rights
Criminal law
laws dealing with crimes and the punishment of wrongdoers•law dealing with offenses against society
Crime (criminal act)
an offense which is injurious to society as a whole
•an action in violation of constitution, statutes, or ordinances (e.g., treason, felony, misdemeanor)•offense against society, the state, or a government•violation of a law
Prosecutor (district attorney)
government employee who brings criminal actions
Felony
a more serious criminal offense that is punishable by imprisonment in a penitentiary for more than one year or by death
Misdemeanor
a criminal offense which is neither treason or a felony•a less serious criminal offense, generally punishable by fine and/or imprisonment of less than one year
Wobbler
an offense that can be either a felony or a misdemeanor
Infraction (violation)
offense less serious than a misdemeanor
Tort
a private or civil wrong, other than breach of contract, either intentional or caused by negligence, for which there may be action for damages•a wrongful act committed by one person against another person or their property•private wrong for which damages may be recovered
Negligence
failure to exercise ordinary (reasonable and prudent) care•omission to do something which a reasonable and prudent person would do under ordinary circumstances or the doing of something which a reasonable and prudent person would not do•the lack of due care (exercised by a wrongdoer who has not acted as a reasonable person would)•a breach of a legal duty to act carefully resulting in injury to another or damage to another=s property
Gross negligence
the intentional failure to perform a manifest duty in reckless disregard of the consequences as affecting the life or property of another
Malpractice
improper or negligent professional act by a professional person•a breach of contract by a professional person•failure to perform a professional service with the ability and care generally exercised by others in the profession
Moral turpitude
an act showing inherent baseness or vileness of principle or action; shameless wickedness; depravity
Ethics
principles that determine the morality of one's conduct, motives, and duties•a set of moral principles or values governing individuals or groups•conforming to accepted professional standards of conduct
Jurisdiction
authority of a court to hear a case
Venue
location where a case is to be tried
Trial courts
courts which conduct the original trial and render its decision•court that conducts original trial of a case
Appellate courts
-•courts hearing cases appealed from a lower court•court that reviews the decision of another court, usually of a lower court
Special federal courts
federal trial courts with limited jurisdiction, such as the U.S. Tax Court
Federal district court
trial court of the federal court system
Diversity jurisdiction
federal jurisdiction based on parties being from different states
Federal court of appeals
court that hears appeals in the federal court system
United States Supreme Court
highest court in the United States
Writ of certiorari
order to produce record of a case for review by a higher court
Appeal
a request to a higher court to review a lower court's decision
Inferior court
trial court that hears only cases involving minor offenses and personal disputes
Courts of original general jurisdiction
court of record in which a criminal or civil case is first tried
Court of record
court in which an official record of the proceedings is kept
State court of appeals
intermediate appellate court
State supreme court
- highest court in most states
Probate court
a court having jurisdiction over estates•court that handles individuals' estates and proves authenticity of testator's will
Juvenile court
court with jurisdiction over cases involving delinquent, dependent, and neglected children
Domestic relations court
court that handles divorce and related cases
Judge
chief officer of a court
Justice of the peace
chief officer of an inferior court
Trial justice
court officer overseeing disposition of a case
Magistrate
chief officer of an inferior court
Sheriff
court of record's executive officer
Marshal
executive officer of a federal court
Attorney (lawyer)
person licensed to represent others in court
Procedural law
law specifying how actions are filed and what trial procedure to follow
Complaint (petition)
the written request which initiates a civil lawsuit•written request to a court to settle a dispute
Plaintiff
the individual who initiates a civil action•person who brings action in a court
Defendant
the person against whom legal action is brought•person against whom a legal case is filed
Summons (process)
a notice of complaint given to a defendant, attaching the complaint and stating a time frame in which a response, or answer, must be filed or an appearance made, and which serves the purpose of conferring personal jurisdiction over the defendant•notice of suit
Answer (motion)
an official document detailing a defendant=s defense •written response by defendant to a complaint=s charges
Discovery
pre-trial steps taken to learn the details of the case•means of obtaining unprivileged information from the other party before a trial
Arrest
to take into police custody
Booking
administrative steps taken after an arrested person is brought to a police station, which involves entry of the person's name, the crime for which the arrest was made, and other relevant facts on the police "blotter," and which may also include photographing, fingerprinting and the like
Arraignment
charging a person with a crime and asking for that person's plea
Verdict
decision of a jury
- Judicial admission
fact acknowledged in a course of legal proceeding
Judgment
a decision of a court of law
Execution
the carrying out or completion of some task
Tortfeasor
person whose action causes injury
Business tort
tort caused by or involving a business
Liability
responsibility for wrongful acts or other debts
Strict tort liability
manufacturer of product liable without proof of negligence for dangerous product
Injurious falsehood
false statements of fact that degrades quality of another's goods or services
Communication
- telling something to a third person
Confusion of source
representing goods or services as being those of another
Trademark
word, symbol, devise, or combination of them used to identify and distinguish goods from other goods
Secondary meaning
special meaning of a mark that distinguishes goods, in such a way as to warrant trademark protection
Trademark or trade name dilution
lessening the capacity of a famous mark to identify and distinguish goods
Trademark or trade name infringement
unauthorized use or imitation of another's mark or name
Unfair competition
total impression of product results in confusion as to product's origin
Business Crimes
crimes against a business or committed by using a business
Theft
act of taking another's property without consent
Burglary
the forcible breaking and entering of premises closed for business with the subsequent removal of cash or merchandise
Shoplifting
taking unpurchased goods from a store
Embezzlement
- fraudulent appropriation of property by a person to whom it has been entrusted
Larceny
taking and carrying property away without consent of the person in possession of the property
Computer crime
crime that is committed with the aid of computers or because computers are involved
Computer trespass
unauthorized use of, or access to, a computer
Hacker
unauthorized outsider who gains access to another's computer system
Rogue program
set of software instructions that produces abnormal computer behavior
Fraud
the intentional or reckless false statement of a material fact, upon which the injured party relied, which induced the injured party to enter into a contract, to his or her detriment
•inducing another to contract as a result of an intentional or recklessly false statement of a material fact
Pirated software
software copied illegally
Anonymous remailer
device that permits sending anonymous e-mail messages and software without the recipient knowing the source of the communication
Notice and comment rule making
enacting administrative rules by publishing the proposed rule and then the final rule without holding formal hearings
Antitrust
- laws which seek to promote competition among businesses
Sherman Antitrust Act
federal legislation intended to promote competition among businesses by prohibiting restraint of trade
Per se violation
activities deemed illegal regardless of their effect
Environmental Protection Agency (E.P.A.)
- a governmental agency with environmental protection regulatory and enforcement authority
Contract
an agreement between two or more competent persons which is enforceable by law•legally enforceable agreement
Breach of contract
a situation in which one of the parties to a contract fails or otherwise refuses to perform the obligations established in that contract
Valid contract
a contract which will be enforced by the court•contract enforceable by the law
Void contract
an agreement of no legal effect
Unenforceable contract
an agreement which is not in the form required by law, but can be made so by the parties•agreement that is not currently binding but can be made so by the parties
•an agreement which at the current time is not enforceable by law
Voidable contract
- a contract which would be an enforceable agreement, but due to circumstances, may be set aside by one of the parties
Express contract
a contract in which the parties express their intentions, either orally or in writing, at the time of the agreement•contract with the terms of the agreement specified in words
Implied contract
one in which the terms of the contract are implied by acts or conduct of the parties•contract with major terms implied by the parties' conduct or implied or deduced from the facts•Implied (in fact) contracts
Formal contracts
those contracts which must be in special form or produced in a certain way, such as under seal•contract with special form or manner of creation
Recognizance
obligation entered into before a court to do an act required by law
Negotiable instrument
document of payment, such as a check
- Simple contract
any contract other than a formal contract, whether written, oral, or implied•contract that is not formal
Written contract
contract with terms in writing
Oral contract
contract with terms spoken
Executory contracts
those contracts in which the terms have not been completely executed or fulfilled by the parties•contract not fully carried out by all parties
Executed contracts
those contracts in which the terms have been fulfilled by the parties•fully performed contract
Unilateral contract
a contract formed when an act is done in consideration for a promise•contract calling for an act in consideration for a promise
Bilateral contract
a contract which consists of mutual exchange of promises to perform some future acts
Quasi contract
a fictional contract created or implied by a court for a person who is unable to contract for himself (i.e., medical care, death) •an obligation which law creates in the absence of agreement•imposition of rights and obligations by law without a contract•is invoked by courts where there is unjust enrichment•the function of a quasi contract is to raise an obligation in law where in fact the parties made no promises•Implied (in law) contracts
-• Unjust enrichment
one benefiting unfairly at another's expense
Offer
an expression of willingness of offeror to enter contractual agreement•a proposal to make a contract
Offeror
the party who initiates, or makes, an offer
Offeree
the person to whom an offer is made
Option
binding promise to hold an offer open
Firm offer
- merchant's signed, written offer to sell or purchase goods saying it will be held open
Acceptance
an agreement to an offer resulting in a contract•drawee's signed agreement to pay draft
Rejection
refusal to accept
Counteroffer
an intended acceptance which changes or qualifies an original offer and in effect, rejects that offer and becomes a new offer•offeree=s response that rejects offer by varying terms of initial offer
Contractual Capacity
the necessity that the parties desiring to enter into contracts meet all requirements
Minors
those persons under full legal age•person under the legal age to contract•by most states (but not all) the standard is under the age of eighteen
Necessaries
items, required or proper and useful, for sustaining a human being at an appropriate living standard•items required for living at a reasonable standard
•examples: food, clothing, and shelter
Disaffirmance
the repudiation of, or election to avoid, a voidable contract
Ratification
confirming an act which was executed without authority or an act which was voidable•adult indicating contract made while a minor is binding•approval of unauthorized act
Insane
persons who are afflicted with a serious mental disorder impairing their ability to function
Intoxication
persons who are under the influence of alcohol to the extent that their judgment may be impaired
Convicts
person found guilty by a court of a major criminal offense
Consideration
that which the promisor demands and receives as the price for a promise
•what a promisor requires from another party as a price for a promise
Composition of creditors
when all of multiple creditors settle in full for a fraction of the amount owed
Forbearance
refraining from doing something
Promissory estoppel
-•an equitable doctrine that prevents the promisor from revoking the promise when the promisee justifiably acts in reliance upon the promise to his detriment
•substitute for consideration when another acts in reliance on promisor=s promise
Accord and satisfaction
an agreement made and executed in satisfaction of the rights one has
Unilateral mistakes
mistake by one party to a contract
Mutual mistakes
mistake by both parties to a contract
Fraud
the intentional or reckless false statement of a material fact, upon which the injured party relied, which induced the injured party to enter into a contract, to his or her detriment
•inducing another to contract as a result of an intentional or recklessly false statement of a material fact
Concealment
willful failure to disclose pertinent information
Fraud in the inducement
defrauded party intended to make a contract but false statements were made about the terms or in obligations of the contract
Fraud in the execution
defrauded party did not intend to enter into a contract but false statement made by other party induced contract signing
Active fraud
party engages in action that causes the fraud
Misrepresentation
stating an untrue fact•false statement of a material fact•also called innocent misrepresentation when made innocently without any intention to deceive
Passive fraud
fraud caused by failure to disclose information when there is a duty to do so
Innocent Misrepresentation
- false statement made in belief it is true
Duress
a means of removing one's free will, obtaining consent by means of a threat to do harm to the person, his family, his property, or his earning power•obtaining consent by means of a threat
Undue Influence
improper influence that is asserted by one dominant person over another, without the threat of harm•person in special relationship causing another's action contrary to free will
Fiduciary
- a relationship of trust and confidence, such as that which exists between partners in a partnership
Rescind
to set a contract aside or cancel
Reformation
judicial correction of a contract
Gambling contracts
- agreement in which the parties win or lose, based on chance
Usurious contracts
exceeding the maximum rate of interest which may be charged on loans
Usury
charging higher interest rate than law allows
Maximum contract rate
higher legal rate of interest allowed
Legal rate of interest
interest rate applied according to statute when no rate specified and interest is to be paid
Written Contract
contract with terms in writing
Statute of Frauds
a statute originally enacted by English Parliament, and now enacted in some form in all the American states, listing certain types of contracts which could only be enforced if in written form•law requiring certain contracts to be in writing in order to be binding or enforceable
Debt
obligation to pay in money or goods
Default
breach of contractual obligation other than money
- Uncured default
- not all payments on an instrument fully made and not all made by due date
Parol evidence
oral testimony
Parol Evidence Rule
- complete, written contract may not be modified by oral testimony unless upon evidence of fraud, accident, or mistake
Third party beneficiary
- a person not party to a contract, but whom parties intend to benefit
Creditor beneficiary -•the person to whom the promisee of a contract owes an obligation or duty which will be discharged to the extent that the promisor performs the promise•a person who is not a party to a contract to whom the promisor of a contract owes an obligation or duty
Donee beneficiary
- a third party beneficiary to whom no legal duty is owed and for whom performance is a gift
Incidental beneficiary
person who unintentionally benefits from performance of contract
Novation
- the change of one of the parties to a contract at the mutual agreement of the original parties•termination of a contract and substitution of new contract with same terms but a new party•the substitution of a new party for one of the original parties to a contract, such that the prior contract terminates and a new one substitutes for it
Assignment
a means whereby one party in a contract conveys rights to another person, who is not a party to the original contract•conveyance of personal property rights in a contract to a person not a party•transfer to another of tenant's rights
Assignor
the party making the assignment
Assignee
the party to whom the assignment is made•person to whom contract right is assigned
Delegation
transfer of duties from one person to another
Joint contracts
contract obligating or entitling two or more people together to performance under the contract
Several contracts
two or more people individually agree to perform obligation
Joint and several contracts
- two or more people bound jointly and individually by contract and who are entitled to recover individually and as a unit
Discharge
termination of a contract by performance, agreement, impossibility, acceptance of breach, or operation of law
Tender of performance
offer to perform in satisfaction of terms as specified in contract
Tender of payment
offer and ability to pay money owed as specified by contract
Legal tender
any form of lawful money
Statute of limitations
a law that restricts the period of time within which an action may be brought to court•time within which right to sue must be exercised or lost
Novation
the change of one of the parties to a contract at the mutual agreement of the original parties•termination of a contract and substitution of new contract with same terms but a new party•the substitution of a new party for one of the original parties to a contract, such that the prior contract terminates and a new one substitutes for it
Accord and satisfaction
an agreement made and executed in satisfaction of the rights one has from a previous contract
Breach
failure or refusal to perform contractual obligations or agreements
Anticipatory breach
one party announces intention not to perform a contract prior to time to perform
Damages
sum of money a wrongdoer must pay to an injured party
Nominal damages
a token award to symbolize vindication of the wrong done to the plaintiff•small amount awarded when there is technical breach but no injury•generally the award is $1.00
Compensatory damages
an award paid to the injured party to cover the exact amount of their loss, but no more•compensation amount equal to the loss sustained
punish the other in excess of those required to compensate the plaintiff for the wrong done
Liquidated damages -•the amount of the damages stipulated in a contract to be paid in the event one party breaches the contract•sum fixed by contract in case of contractual breach where actual damages are difficult to measure
Specific performance -•a contract remedy by which the court requires the breaching party to perform the contract•carrying out the terms of a contract
Chapter 14
Punitive damages
-•an award paid to the plaintiff in order to punish the defendant, not to compensate the plaintiff•amount paid to one party to
Personal Property-•
all property which is not real property •moveable property
•interests less than complete ownership in land or rights to property
Property
anything that may be owned
Tangible personal property
personal property that can be seen, touched, or grasped
Intangible personal property
-•evidences of ownership of personal property, such as stock of corporations, checks, and copyrights •evidences of ownership of rights or values
Purchase
ownership by payment
Will
an instrument executed with required formality by a person making disposition of his or her property to take effect upon his or her death •document providing disposition of property after death
Gift
transfer of ownership of property without consideration
Donor
person who makes a gift
Donee
person who receives a gift
Accession
acquisition of title to property that is attached to property already owned
Confusion of goods
mixing of goods of different owners that under certain circumstances results in one of the owners becoming the owner of all the goods
Creation
bringing property into actual being
Lost property
property unintentionally left with no intention to discard
Abandon
to discard personal property with no intention to reclaim
Bailment
the transfer of possession, but not the title, of personal property by one party to another, under agreement •transfer of possession of personal property on condition property will be returned
Bailor
the party who gives up possession, but not the title, of personal property in a bailment
•person who gives up possession of property when there is a bailment
Bailee
the party who acquires possession, but not the title, of personal property in a bailment
•person in possession of bailed property
Constructive bailment
bailment imposed when a person finds and takes control of lost property
Common carriers
any carrier required by law to convey passengers or freight without refusal if the approved fare or charge is paid •airline, train, etc.
Pawn
tangible personal property left as security for a debt
Pledge
- intangible property serving as a security for a debt
Conversion
unauthorized exercise of ownership rights•obtaining possession of property and converting it to one's own use
Carrier
transporter of goods, people, or both
Private carrier
those who transport only in particular instances and only for those they chose to contract with •carrier that transports under special arrangements for a fee
Common carrier
any carrier required by law to convey passengers or freight without refusal if the approved fare or charge is paid (i.e., airline, train, etc.) •one that undertakes to transport without discrimination all who apply for service
Consignor
one who ships goods by common carrier
Consignee
one to whom goods are shipped by common carrier
Bill of lading
a contract existing between the consignor (shipper) and the carrier
•receipt and contract between consignor and carrier regarding terms of the contract of transportation
Straight bills of lading
contract between shipper and carrier requiring delivery of shipped goods only to consignee
Order bills of lading
contract allowing delivery of shipped goods to bearer
Baggage
articles necessary for personal convenience while traveling on common carriers
Hotelkeepers
one engaged in business of offering lodging to transients
Boardinghouse keeper
person in business to supply accommodations to permanent lodgers or boarders, as distinguished from transient guests
Guests
transient received by hotel for accommodations
Sale
the transfer of title to goods from the seller to the buyer for a consideration called the price
Contract to sell -
a seller agrees to transfer title to goods to a buyer for a consideration (price), at a future time
Price
that consideration stipulated by contract, generally expressed in money or money's worth
Goods
movable tangible personal property
Existing goods
those goods which are, at the time of the contract, in existence and owned by the seller
Future goods
those goods which are not in existence nor identified at the time a contract is agreed to
Identified goods
the goods specified by the buyer and seller •goods picked to be delivered to the buyer
Bill of sale
a document of conveyance which provides written evidence of one's title to tangible personal property •written evidence of title transfership of tangible personal property
Merchant
a person who deals in goods of the kind, or otherwise by occupation is considered to have knowledge or skill peculiar to the practices or goods involved in the transaction
Title
evidence of ownership of property
Moveable personal property
all physical items except real estate
Intangible personal property
evidences of ownership of rights or values
Real property
land and things permanently attached to the land
Uniform Commercial Code
recognized as the most important statute in business law, it includes provisions which regulate certain sales of goods and negotiable instruments
Service contracts
the contracting of services rather than goods
Personal service contract
a contract which involves such personal knowledge, skills, or confidence that it can only be performed by the person with whom it is made
Receipt
taking possession of goods
Warehouse receipt
document of title issued by storage company for goods stored
Acceptance
an agreement to an offer resulting in a contract •drawee's signed agreement to pay draft
Nonresellable goods
specially made goods not easily resellable
Auction
sale of property or goods to the highest bidder, or the bidder's agent, translated orally
Bidder
person who makes an offer at an auction
Without reserve
auction goods may not be withdrawn after bidding starts
With reserve
auction goods may be withdrawn after bidding starts
Insurable interest
interest in the nonoccurrence of the risk insured against
Free on board (FOB)
designated point to which seller bears risk and expense of delivery
Shipment contract
agreement making seller liable until goods delivered to carrier
Destination contract
sales contract in which seller is liable until the goods are delivered to the destination
Fungible goods
goods of a homogeneous nature sold by weight or measure
Sale on approval
sale that is not completed until buyer approves goods
Sale or return
completed sale with the right to return goods
Consignment
transfer of possession of personal goods for purpose of sale
Estoppel -•occurs when one party leads the second to a false conclusion that the second party relies on •the second party would be harmed if the first party were later allowed to show the conclusion was false
Documents of title
document that shows ownership
Warranties
guarantees made by a seller that an article, good, or service will conform to a certain standard or will operate in a certain manner •assurance article conforms to a standard statement of insured that relates to risk and appears in an insurance contract
Express warranties
the actual and definite statement of a seller, either orally or in writing, at the time of the sale, guaranteeing a standard or level of performance
Implied warranties
a warranty imposed by law, arising automatically because the sale has been made
Full warranties
warranty with unlimited duration of implied warranties, with an agreement to remedy any defects in products
Limited warranties
- written warranty that is not a full warranty
Constructive notice
information or knowledge the law assumes everyone knows
Sample
portion of a whole mass that is the subject of transaction
Model
replica of an article
Caveat emptor
let the buyer beware
Privity of contract
relationship between contracting parties
Usury
charging higher interest than law allows
Antitrust laws
statutes that seek to promote competition among businesses, especially in the same industry
Balloon payment
payment that is more than twice the monthly installment payment
Finance charge
total dollar amount borrower paid for credit
Annual percentage rate (APR)
amount charged for a loan as a percentage of the loan
Commercial unit
article, group of articles, or quantity regarded as a separate unit
Unit pricing
price stated per unit of measurement
Commercial paper (negotiable instrument)
a writing drawn in a special form which can be transferred from person to person as a substitute for money or as an instrument of credit•document of payment, such as a check
-• Law merchant
rules applied by courts set up by merchants in early England, prior to 1400
Negotiation
the act of transferring ownership of a negotiable instrument to another party
Order paper
commercial paper made payable "to the order of" some named party •the word "order" or its equivalent must be used
Bearer paper
commercial paper payable to any person in possession of it •commercial paper made payable to the bearer (i.e., to the person having possession of such)
Promissory note
an unconditional promise in writing made by one party to another, signed by the maker, engaging to pay on demand or at a particular time, a particular sum of money to order or to bearer •a negotiable instrument containing a promise to pay
Bill of exchange
written order by one person directing another person to pay a sum of money to a third person
Certificate of deposit
acknowledgment by bank of receipt of money with engagement to repay it with interest
Payee
the party to whom any negotiable instrument is made payable
Drawer
the person who executes any draft •a person (depositor) who signs a check, ordering a payment to be made
Drawee
the person, company, or financial institution ordered to pay a draft
•a person or concern, usually a bank, that has been ordered to make a payment on a check or draft
Acceptor
person who agrees to pay a draft, receive goods, or assent to an order
Maker
the person who executes a promissory note •an individual who promises to pay on a promissory note •an individual who signs a promissory note
Bearer
person in possession of a negotiable instrument •payee of an instrument made payable to whoever is in possession of the instrument
Holder
a person who has possession of a delivered negotiable instrument (commercial paper)
•person in possession of instrument payable to bearer
Holder in due course
a person in possession of a negotiable instrument who accepts the negotiable instrument in good faith and for value •person who acquires rights superior to original owner •holder for value and in good faith with no knowledge of dishonor, defenses, or claims
Indorser
the payee of a note or draft transferring the instrument to another party •one who indorses a negotiable instrument •a person or company whose name is written on the back of a check •the person who writes his or her name on back of a negotiable instrument
Indorsee
a person who becomes the holder of a negotiable instrument by indorsement which names him or her as the person to whom the instrument is negotiated •named holder of indorsed negotiable instrument
Electronic Funds Transfers
fund transfer initiated electronically, telephonically, or by computer
Check truncation
shortening a check's trip from the payee to the drawee bank and then the drawer
Preauthorized credit
- automatic deposit of funds to an account
Preauthorized debit
automatic deduction of bill payment from checking account
Automated teller machines
electronic fund transfer (EFT) terminal that performs routine banking services
Point-of-sale systems
- EFTs begun at retailers when customers pay for goods or services
Negotiability
transferability
Issue
first delivery of negotiable instrument by maker or drawer to give rights to another
Delivery
intentional transfer of possession and control of something
Bonds
sealed, written contract obligation with essentials of note
Coupon bonds
bond with detachable individual coupons representing interest payments
Registered bonds
bond payable to specific person, whose name is recorded by issuer
Collateral note
note secured by personal property
Real estate mortgage note
note secured by mortgage on real estate
Debenture
unsecured bond or note issued by a business
Certificates of deposit -
acknowledgment by bank of receipt of money with engagement to repay it with interest
Drafts
- a written order signed by one person requiring the person to whom addressed to pay a particular sum of money, to order or to bearer, on demand or at a certain time
Sight drafts
draft payable upon presentation of draft's holder
Time drafts
draft payable a certain number of days or months after date or presentation
Inland drafts
draft drawn in one state and payable in the same or another state
Trade acceptance
draft drawn by seller on purchaser of goods and accepted by purchaser
Money order
instrument issued by business indicating payee may receive financial instrument=s indicated amount
Check
an order by a depositor on the bank to pay a sum of money to a payee •draft drawn on a bank and payable on demand •a piece of commercial paper drawn on funds in a bank account and payable on demand
Bank draft (teller's check)
check drawn by one bank on another bank -• •a check drawn by one bank on another bank in which it has funds on deposit
• Certified check
an ordinary check which an official of the bank has accepted by writing across the face of the check the word "certified" or some similar word, and signed •a check for which the bank assures that the drawer has sufficient funds to make payment •a check which carries the guarantee of the bank that sufficient funds are available to pay the check when it is presented
Cashier's check
a check drawn on a bank's own funds and signed by a responsible bank official
•check drawn by a bank on its own funds and signed by the cashier or another official of the bank
Voucher check
check with voucher attached
Postdated check
check drawn prior to its date
Dishonored check
a check not paid by the bank when properly presented
Bad check
check the drawee bank refuses to pay for reasons such as insufficient funds or closed accounts
Canceled check
a check which has been paid by the bank and returned to the drawer for record-keeping
Stale check
check presented more than six months after its date
Stop payment order
an order by a depositor requesting a bank not to pay on a check previously issued
Negotiation
the act of transferring ownership of negotiable instrument, by indorsement, delivery, or physical transfer
Indorsement
the signature or statement of purpose by the owner on the back of a negotiable instrument, which indicates the future control of the instrument •signature of holder on back of instrument with any directions or limitations •the signature of the payee or other holder placed on the back of a check or other negotiable instrument
Trailing edge
left side of front of check
Allonge
paper so firmly attached to an instrument as to become part of it
Blank indorsements
having no words other than the signature of the indorser •indorsement that does not state to whom the instrument is to be paid •the handwritten signature of the payee on the back of the check
Special indorsements
an indorsement which designates the particular person to whom payment is to be made
Qualified indorsements
an indorsement which limits the liability of the indorser
Restrictive indorsements
an indorsement which prevents the use of the instrument for anything except the stated use •an endorsement which limits the use of funds to the purpose stated. (Example: "For Deposit Only")
Cancellation
act indicating intention to destroy the validity of an instrument
Primary liability
liability without conditions for commercial paper that is due
Secondary liability
liability for a negotiable instrument that has been presented, dishonored, and notice of dishonor given
Presentment
demand for acceptance or payment of commercial paper
Dishonor
when a presentment is made, but acceptance or payment not yet made
Protest
certification of notice of dishonor by authorized official
Holder Through a Holder in Due Course
holder subsequent to holder in due course
Consumer goods or services
goods or services primarily for personal, family, or household use
Setoff
claim by the party being sued against the party suing
Limited defense
defense that cannot be used against a holder in due course
Theft
act of taking another=s property without consent
Universal defense
defense against any holder
Duress
a means of removing one's free will, obtaining consent by means of threat to do harm to the person, his family, his property, or his earning power
Alteration
unauthorized change or completion of negotiable instrument to modify obligation of a party
Traditionally, which offense is classified as a felony?
MOACIR STOLE A CAR. THIS OFFENSE IS PUNISHABLE BY IMPRISONMENT FOR FIVE TO TEN YEARS
The principle that the decision of a higher court should serve as a guide or precedent and control the decision of a similar case in the future is called
STARE DECISIS
The legal system we have in America
IS BASED HEAVILY ON THE ENGLISH LEGAL SYSTEM OF COMMON LAW AND EQUITY
An objective of the law is to
SET RULES OF CONDUCT FOR MANY TRANSACTIONS
Statutes can be characterized as
ENACTED BY GROUPS OF PERSONS ELECTED BY THE VOTERS
Which of the following documents is designed to protect the civil rights and liberties of the citizens and the states
THE BILL OF RIGHTS
Administrative agencies
HAVE THE POWER TO REGULATE PARTICULAR MATTERS OR IMPLEMENT LAWS.
A criminal action
PUNISHES OFFENSES THAT INJURE SOCIETY AS A WHOLE
A tort action must be brought
THE INJURED PERSON
The penalty for breaching a rule that is a civil wrong is
DAMAGES
Appellate court decisions that establish precedent principles are collectively termed
CASE LAW
Which of the following provides relief other than merely money damages?
EQUITY
A permanent judicial order or decree forbidding the performance of a certain act is an
INJUCTION
Sources of American laws include
JUDICIAL DECISIONS, LEGISLATIVE STATUTES, CONSTITUTIONS AND ADMINISTRATIVE AGENCIES
Most of American law has its roots in
ENGLISH COMMON LAW
The power to issue cease and desist orders is termed
INJUCTIVE POWER
Which of the following statements is true?
WRITTEN LAWS ENACTED BY LEGISLATIVE BODIES ARE CALLED STATUES
An appeal is
A REQUEST TO A HIGHER COURT TO REVIEW A LOWER COURTS DECISION
The chief function of courts is to
INTERPRET AND APPLY THE LAW FROM WHATEVER SOURCE TO A SITATION
Which off the following statements is not true
THE ORIGINAL U.S. CONSTITUTION WAS ADOPTED IN 1791 AND GUARANTEED INDIVIDUAL RIGHTS FOR CITIZENS
A judicial admission
A FACT ACKNOWLEDGED IN A COURSE OF LEGAL PROCEEDING
In order to try a case a court must have jurisdiction
OVER BOTH THE SUBJECT MATTER OF THE CASE AND THE PERSONS INVOLVED
The original trial of a court case is conducted by
TRIAL COURTS
Federal district courts
HEAR ALL CRIMINAL CASES INVOLVING A VIOLATION OF FEDERAL LAW
The U.S. supreme court
HAS APPELLATE JURISDICTION IN CASES BASEDON THE US CONSTITUTION, A FEDERAL LAW OR TREATY
Kevin sued his employer in U.S. district court for violations of federal antidiscrimination laws. Judgment was entered in favor of the employer, and Kevin wished to appeal the judgment. Under these facts, Kevin will appeal the judgment. Under these facts, Kevin will appeal the judgment to which court?
U.S COURT OF APPEALS
Which of the following statements is true?
TORTIOUS ACTS CAN SOMETIMES BE CONSIDERED CRIMES ALSO
The administrative steps taken after the arrested person is brought to a police station, which involved entry of the persons name, the crime for which the arrest was made, and other relevant facts on the policy "blotter": and which may also include photographing, fingerprinting, and the like is termed
BOOKING
In a typical state court system, which would be correct?
GARCIA IS SUING SINCER MEMORIES AND EVERLASING LEGACIES FOR $60,000 FOR BREACH OF CONTRACT UNDER THE STATE LAW. A STATE COURT OF ORIGINAL GENERAL JURISDICITON WOULD HAVE JURISDITION TO TRY THIS CASE FOR THE FIRST TIME
In a typical jury trial
JURY IS SELECTED BEFORE OPENING STATEMENTS ARE MADE
Determining the location where a case is to be tried means determining the proper
VENUE
The first step in bringing the legal action is
FILING SUIT
The highest court in the land is the
U.S. SUPREME COURT
A verdict is the decision of the
JURY
If a person properly files a lawsuit in accordance with specified law, that person has followed what kind of law
PROCEDURAL LAW
Which of the following statements is not true?
AN APPELLATE COURT HEARS TESTIMONY FROM WITNESSES
Rosa sued T&S Co. for breach of contract. The jury returned a verdict in favor of Rosa for $5,000. Under these facts
IF THE JUDGEMENT IS APPEAKED, THE COURT OF APPEALS MAY REVERSE THE JUDGMENT IN THE LOWER COURT COMMITTED SERIOUS ERRORS OF LAW
In a state court of record, the chief officer is the
JUDGE
To recover for an intentional tort, the injured person must show
ACT, INTENT AND CASUATION
A misdemeanor is an
LESS SERIOUS CRIMINAL OFFENSE GENERALLY PUNISHALBE BY FINE AND OR IMPRISIONMENT OF LESS THAN ONE YEAR
Criminal laws include
LAWS DEALING WITH CRIMES AND THE PUNISHMENT OF WRONGDOERS AND LAWS DEALING WITH OFFENSED AGAINST SOCIETY
Johnson was sued in a state court of record as a result of his involvement in an automobile accident. He was eager for his lawyer. Ilas to file an answer, but she told Johnson additional actions could also be taken. What additional action might Ilas want to take before the case goes to trial?
THE LAWYER MIGHT WANT TO CONDUCT DISCOVERY TO OBTAIN INFORMATION RELEVANT TO THE SUBJECT MATTER OF THE ACTION, THE LAWER MIGHT FILE A MOTION TO DISMISS THE CASE OR FILE A MOTION FOR JUDGMENT BASED SOLELY ON THE PLEADINGS, THE LAWYER MIGHT FILE A MOTION TO OBTAIN A RULING ON THE ADMISSIBILITY OF EVIDENCE OR TO SUPPRESS EVIDENCE
CERCLA imposes liability for cleanup of hazardous substances on
OWNERS, DISPOSERS, AND OPERATORS OR CONTAMINATED SITES
When an agency's rule is challenged, the primary focus of the courts in on the
PROCEDURES FOLLOWED BY THE AGENCEY IN EXERCISING ITS RULE MAKING POWER
No administrative agencies has the power to
ENACT RULES THAT CANNOT BE APPEALED
Most administrative agency regulation is
DUE TO THE COMPLEX NATURE OF THE AREA OF REGULATION
Government regulated business to
ELIMINATE ABUSES AND MINIMIZE UNDESIREABLE CONDUCT
State Superfund laws
IMPOSE A LIABILITY FOR CLEANUP COSTS OF HAZARDOUS WASTES
The first national environmental piece of legislation was the
CLEAN AIR ACT
Powers of regulatory agencies include
LICENSING AND RATE MAKING
Which promise or agreement constitutes a valid contract?
JUAREZ AND LOPES ARE COMPETENT ADULTS, AND IN A SIGNED WRITING LOPEZ AND JUAREZ AGREE THAT JUAREX WILL SELL HER CAR TO LOPES FOR $2,000
Formal contracts include
NEGOTIABLE INSTRUEMENTS
When an offer is made, it
CAN BE REVOKED EVEN IF THE OFFEROR HAS PROMISED TO KEEP IT OPEN
Cindy saw Carl's Lawn Service mowing a neighbor's lawn. Cindy pointed to her lawn, gesturing that she wanted it mowed. In response, Carl mowed Cindy's lawn. Under these facts
CINDY AND CARL MADE AN IMPLIED CONTRACT, AND CINDY IS OBLIGATED TO PAY FOR CARL'S SERVICES
The agreement which is vital to a contract
IS FREQUENTLY CALLED "A MEETING OF THE MINDS"
All contracts
MUST BE SUPPORTED BY CONSIDERATION, WITH FEW EXCEPTIONS
Unjust enrichment
OFFENDS OUR ETHICAL PRINCIPALS
Regarding the duration of an offer
DEATH OR INSANITY OF OFFEROR TERMINATES THE OFFER
In which situation does Wescott make a valid offer?
BART SIGNED A WRITTEN OFFER TO BUY LAND. THE OFFER APPEARS TO BE A SINCERE OFFER. UNKNOWN TO THE SELLER, BART DECIDES NOT TO BUY THE LAND UNLESS HE CAN FIRST SELL SOME OTHER PROPERTY
An offer may be accepted
IN A REASONABLE MANNER
A written offer can be accepted y the offeree
AFTER THE OFFEROR HAS COMMUNICATED TO THE OFFEREE
In order to have a valid contract there must be
AN OFFER AND AN ACCEPTANCE
When no time is specified in the offer, the reasonable time an offer is open
VARIES WITH EACH CASE DEPENDING ON THE CIRCUMSTANCES
In which case was Al legally entitled to revoke the offer in question?
AL OFFERED TO SELL HIS CONDO TO BEN. BEFORE BEN ACCEPTED, AL GAVE BEN WRITTEN NOTICE THAT SAID, "I TERMINATE MY OFFER."
In most states, contracts made by judicially declared incompetent people are
VOID
Contracts made with minors are
VOIDABLE AT MINORS DISCRETION
Which of the following states regarding minors and torts is correct
MINORS ARE AS LIABLE FOR TORTS AS ADULTS ARE
Mindy was a minor at the time she bought a stereo. Under these facts, select the correct answer
MINDY CAN DISAFFIRM THE CONTRACT, AND THE SELLER MUS REPAY ALL MONEY PAID BY MINDY
An element of promissory estoppel would be
IF A PROMISE IS MADE
Which contract is voidable?
IRVING CONTRACTS TO BUY A CAR. DUE TO A MENTAL ILLNESS, IRVING CANNOT UNDERSTAND THAT HE HAS MADE A CONTRACT, AND HE IS UNABLE TO UNDERSTAND THE CONTRACT'S BASIC TERMS
Which of the following can be called valid consideration?
A PROIMSE TO DO SOMETHING IN EXCHANGE FOR ANOTHER PROMISE
Which of the following is sufficient and valid consideration?
ACCEPTING A SECURED NOTE IN DISCHARGE OF AN UNSECURED NOTE FOR A GREATER AMOUNT
Consideration can include
A PROMISE THAT IS CONDITIONAL
Refraining from doing something is valid consideration when the act refrained from
IS SOMETHING THE PROMISOR HAS THE RIGHT TO DO
A mistake as to the terms of the contract usually result from
FAILURE TO READY THE WRITTEN CONTRACT
Penny made these agreements. Which agreement is supported by consideration?
PENNY AND RAY AGREED THAT SHE WOULD PAY $200 FOR RAYS STEREO. THE STEREO IS WORTH $900
A party who actually does something or takes steps to cause a fraud commits
ACTIVE FRAUD
If a real estate agent knows the house on a piece of property has foundation problems and doesn't tell her prospective buyer because it may scare the buyer away, the real estate agent is guilty of
PASSIVE FRAUD
Duress can be classified as
PHYSICAL, EMOTIONAL AND ECONOMIC
In which case is the creditor entitled to sue for the unpaid balance of the debt?
ALICE OWED OTIS $500. THE DEBT WAS UNDISPUTED. ALICE AND OTIS AGREED THAT SHE WOULD PAY $200 IN CONSIDERATION FOR HIS PROMISE TO RELEASE ALICE FROM THE BALANCE OF THE DEBT
The party making the assignment is the ASSIGNOR; the one to whom the right in transferred is the
ASSIGNEE
When an assignment is made by acts of the parties, it
MAY BE EITHER WRITTEN OR ORAL
When two or more persons enter into a contract with someone else, the contract may be joint, several, or joint and several. What determines the type of contract?
THE INTENTION OF THE PARTIES
A contract that is contrary to public policy would be
A CONTRACT TO LIMIT THE FREEDOM OF MARRIAGE
A contract not to compete
CAN BE VALID WHEN BUYING A BUSINESS OR MAKING AN EMPLOYMENT CONTRACT
Which contract described below is enforceable?
MARTY WAS IN A HURRY AND IDNT READ THE FINANCING CONTRACT SHE SIGNED. SHE WAS LATER SURPRISED TO FIND OUT SHE WAS RESPONSIBLE FOR TITLE AND RECORDING FEES
Contracts to generally restrain trade are in violation of the
SHERMAN ANTITRUST ACT
A contract involves specific subject matter, the destruction of the matter without the fault of the parties
DISCHARGES THE CONTRACT BECAUSE OF IMPOSSIBILITY OF PERFORMANCE
In cases when neither a suit for damages nor rescission will constitute adequate remedy, what may be applied?
SUIT FOR SPECIFIC PERFORMANCE
A judgment against a person's car would be
AN OBLIGATION OF RECORD
Parol evidence means
SPOKEN WORDS
Which contract is defective due to a mistake?
CONTRACTOR SUBMITTED A BID TO OWNER THAT OWNER ACCEPTED. DUE TO A MATH ERROR THE BID WAS $20,000, INSTEAD OF $30,000 AS INTENDED. OWNER WAS AWARE OFF CONTRACTOR'S MISTAKE
If a promisor agrees to become responsible for the debts or default of another, it
MUST BE IN WRITING
The Statute of Frauds applies only to
EXECUTORY CONTRACTS
According to the Statute of Frauds
ELECTRONIC SIGNATURES ARE NOT PERMISSIBLE AND LEGALLY ENFORECEABLE
Warranties of the assignor include
THE RIGHT IS VALID AND EXISTING AT THE TIME THE ASSIGNMENT IS MADE
Causes of contract being discharged because of impossibility of performance include
NEW LAWS MAKING THE CONTRACT ILLEGAL, PHYSICAL INCAPACITY OF PERSONS TO RENDER PERSONAL SERVICES, WRONGFUL ACTS OF OTHER PARTIES
Compu Co. and Gina entered into an illegal contract whereby Gina agreed to sabotage a competitor's business. The sabatoge is a crime. Gina failed to perform. Under these facts
A COURT WILL NOT REQUIRE GINA TO PERFORM THE AGREEMENT
Neal was hired as sales manager for a food distributor doing business in Port City, USA. Neal managed the important customer accounts and he was responsible for developing the company's sales strategy. When hired, Neal agreed not to compete in the food distribution business after he quit. Under these facts, Neal's agreement not to compete would be
VALID IF IT PROHIBITED NEAL FROM COMPETING IN PORT CITY FOR ONE YEAR AFTER HE QUIT
Which oral contract is unenforceable because it violates the Statue of Frauds?
ON MARCH 1, LEE CONTRACTS TO WORK FOR PAM FROM JUNE 1 TO APRIL 30 OFF THE FOLLOWING YEAR
Ownership most commonly occurs through
Purchase
Woods rented a casket for her Halloween party from Johnson family funeral home. Without authorization, woods sold the casket to her friend, Rivera, who recently experienced the death of a family member and needed a burial receptacle. Rivera did not know that the casket belonged to Johnson Family Funeral Home. Under these facts
Woods was not legally entitled to sell the casket, therefore Rivera did not receive good title to the casket
When a person doies without leaving a will, that person dies
Intestate
Which of the following statements is true?
A bailment arises when property is left for repair even though when returned it is repaired and therefore not identical to the property left
A(n)_________ bailment arises when someone finds and takes possession of lost property
Constructive
In a(n)_____________bailment, the bailee renders a service and charges for the service, and then the bailee holds a lein against the bailed property for the charges.
Mutual-benefit
A person engaged in the business of transporting goods or persons for a fee only under special instances and arrangements is a(n):
Private Carrier
A fire occurred at the Bates Motel. The fire was started by a cigarette that was negligently discarded my Martinez, a visitor at the motel. Wescott, a guest at the Bates Motel, was injured in the fire. The bates Motel was not negligent. Under these facts, is Norman Bates, the owner and operator of Bates Motel, liable for Wescott's injuries?
No. A hotel keeper has a duty to exercise reasonable care to protect guests. Consequently, the Bates Motel is not liable for Wescott's injuries because it was not negligent
The liability of a carrier for the passengers' safety begins
As soon as a passenger enters the terminal or waiting platform
Which of the following statements is not true?
A hotel keeper may not refuse accommodations to anyone who can pay for them
Which of the following transactions is a sale of goods that is governed by article 2 of the UCC?
Ilas, a manufacturer of cremation urns, sells a shipment of urns to Happily Ever after Memorial Gardens.
an important distinction between a sale and a contract to sell is the
Title
which of the following statements is true
When a contract to sell goods is made, title passes in the future
which of the following contract(s) is/are required to be evidenced by a writing to be enforceable?
During one shopping trip to Nordstrom, wescott with the help of a personal shopper, selected six suits from different area of the store. Each suit cost $200. One purchase agreement was prepared for the six suits
Batesville casket company, located in Batesville, Indiana, contracted to sell a shipment of caskets to Morningstar Pet Memorial and Cremation Service, located in Monterey Park, Ca. The caskets were sold "F.O.B. Monterey Park." Batesville Casket Co duly delivered the caskets to a carrier in Indiana for shipment to Morningstar Pet Memorial and cremation Service in California. The caskets were damages during shipment. Under these facts
Batesville Casket Company bears the loss of the caskets that occurred during shipment
which of the following statements is true?
The holder of a document of title may convey the title of the person who left the property
Use of goods by a buyer for the purpose of trial;
DOES NOT MEAN APPROVAL
Which of the following statements constitutes a warranty?
THIS GARMENT IS MADE FROM 100% COTTON FIBER
Vision of paradise mortuary plans to advertise a prearranged funeral plan for sale on credit. The ad wills ate the credit price for the prearranged funeral plan. What other information must this ad disclose in order to comply with the truth-in-lending act?
FINANCE CHARGE, APR, AND THE NUMBER, AMOUNT, AND DUE DATES OF PAYMENTS
An implied warranty arises;
AUTOMATICALLY WHEN A SALE IS MADE
The truth in lending act;
GIVES A DEBTOR THREE DAYS TO RESCIND A MORTGAGE EXECUTED ON THE DEBTOR'S PRINCIPAL
All sellers make a warranty of
TITLE
The warranty against encumbrances
IS MADE BY ALL SELLERS
Madueno issued and signed her personal check ordering Washington Mutual Bank go pay $500 to the order of Guadalupe Lopez. Madueno delivered the check to Lopez. Lopez took the check to WaMu and an authorized bank officer wrote "ACCEPTED FOR PAYMENT" on the check, and signed it. Under these facts
WAMU IS A DRAWEE AND AN ACCEPTOR
When an instrument is transferred by assignment, the assignee
RECEIVES ONLY THE RIGHTS OF THE ASSIGNOR AND NO MORE
Which of the following would be legally acceptable promise?
I PROMISE TO PAY GLENN BOWER $5000 ON MARCH 21
If a negotiable instrument is only partially filled in and signed before delivery
THE MAKER OR DRAWER IS LIABLE IF THE BLANKS ARE FILLED IN ACCORDING TO INSTRUCTIONS
Which of the following writings may be a negotiable instrument?
CASTELLO-CHASE SIGNED A NOTE PROMISING TO PAY $900 ON DEMAND TO BEARER. THE NOTE STATES THAT THE NOTE IF GIVEN IN CONSIDERATION FOR AN EMBALMING MACHINE THAT CASTELLO-CHASE PURCHASED FORM SINCERE MEMORIES AND EVERLASTING LEGACIES MORTUARY
A draft
MUST CLEARLY SHOW THAT THE SIGNATURE IS INTENDED TO BE THAT OF A DRAWER
Martinez issued a check payable to Lopez. Lopez negotiated the check to McFall (a holder in due course). On April 1, Martinez gave his bank an oral stop payment order. On April 10, McFall presented the check for payment and Martinez's bank paid the check. Under these facts
THE STOP PAYMENT ORDER WAS VALID, BUT IT DOES NOT AUTOMATICALLY TERMINATE MARTINEZ'S LIABILITY TO PAY THE CHECK
The maker of a promissory note
ADMITS THE EXISTENCE OF THE PAYEE
A check is a special type of draft which
IS DRAWN ON A BANK AND PAYABLE ON DEMAND
A postdated check
MAY B PAID BY THE BANK BEFORE ITS DATE
Among the duties a bank owes its customer, the depositor-drawer, are to
MAINTAIN SECRECY REGARDING INFORMATION ACQUIRED BY IT IN CONNECTION WITH THE DEPOSITOR-BANK, RELATIONSHIP
If a negotiable instrument is made payable to multiple persons
INDORSEMENT DEPENDS UPON tHE LANGUAGE USED IN THE INSTRUMENT
Banks require that an indorsement on a check be
ON THE BACK WITHIN ONE AND A HALF INCHES OF THE TRAILING EDGE
Garcia issued a check payable to the order of marina Mieh. Mieh Endorsed the check "MARTINA MIEH" and delivered to to Diana lopez. Under these facts
Mieh may have secondary liability to pay the check if it is dishonored
If an agent receives checks in payment of the principal's claims but the checks are made payable to the agent personally, the agent should elect to use a _____ indorsement
Qualified
the maker of a note is
Primarily liable for its payment
Martinez issued a negotiable note to woods. The note was due may 1. Woods indorsed the note and negotiated it to Rodriguez. On may 1, Rodriguez presented the note to Martinez and Martinez refused to pay. On may 3, Rodriguez gave written notice to woods that Martinez refused to pay in this case
Woods is obligated to pay the note based on her secondary liability
A reasonable time to make a presentment for drawers on uncertified checks is
30 days
if any term in a negotiable instrument is left blank and the drawer then delivers the instrument to another person for completion, the drawer
Cannot raise the defense of improper completion against the holder in due course
when a draft is presented for acceptance
The drawees signature is all that is necessary
All of the following statements are false, accept
A drawee is liable for payment of a draft only after accepting it
Ilas issued a check for 500$ in payment for some cremated remains containers from wizzard hill. Mieh, owner of Wizzard Hill, negotiated the check to an innocent purchaser, Ms Madueno. Which defence can Ilas assert against Ms Madueno, the innocent purchaser?
Ilas has a defense of minority because she is 17
_____ defenses can also be called personal defenses and are different from _____ defenses
Limited/ universal
Minority is considered an_______ defense
Universal
A _______ defense is one that cannot be used against a holder in due course
Limited
Duress
Can be claimed as a hybrid defense
A hybrid defense would be
INCAPACITY OTHER THAN MINORITY