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MORT 275 - Mortuary Law I - Final Combined - Grande Chapters 1-45 Study Guide Questions Online Quizzes Vocabulary

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?


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:


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?


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.


The main objective of law is to provide lawyers and judges with jobs


Misdemeanors are more than serious felonies.


Ethical standards stay constant over time.


Written laws enacted by legislative bodies are called statues.


Ethics is the study of morality of conduct.


The original U. S. Constitution as adopted in 1792 guaranteed individual rights for citizens.


A courts permanent order forbidding an action is called a/an


Most of American law has its roots in

English Common Law

Where do our laws come from?


Custom which has come to be recognized as binding by the court is

Common law

Statutes can be characterized as:


Administrative agencies:


A rule is called a law when it


An objective of the law is to:


Appellate courts hear cases again after lower courts initially hear them.


The special federal courts are limited in their jurisdiction by the congressional laws that created them.


The U.S. Supreme Court cannot reverse its own decisions.


Tax and bankruptcy courts are considered special courts.


A normal way a case gets to the Supreme Court is by application for a writ of habeas corpus.


Trial procedure follows prescribed procedural law.


The plaintiff has the burden of proving facts adequate to support the allegations in the complaint.


In a typical jury trial:


The power of authority to hear a case is called:


The highest court in the land is the


In a state court of record, the chief officer is the:


If a person properly files a lawsuit in accordance with specified law, that person has followed what kind of law?


The first step in bring a legal action is:

Filing suit

An anonymous remailer is a devise that permits sending anonymous email messages.


Tortious acts can never be considered crimes also.


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