Law Multiple Choice Questions

Multiple Choice Questions

1. The U.S. Citizenship and Immigration Service issues a rule. Like the rules of other federal administrative agencies, this rule is compiled in

A) the Administrative Register of the Federal Government.

B) the United States Code.

C) the Federal Rules of Civil Procedure.

D) the Code of Federal Regulations.

2. A contract that by its own terms cannot be performed within a year must be in writing to be enforceable.

A) True

B) False

3. The term cure refers to the right of the seller to adjust or replace nonconforming goods.

A) True

B) False

4. Parker, a salesperson for Quality Textiles, Inc., shows Rosa, a fabric buyer for Style Clothing Company, samples of cloth, stating that any shipment will match the samples. This statement is

A) an implied warranty.

B) an express warranty.

C) a warranty of title.

D) puffery.

5. To obtain a contract with the Chinese government, Digby Engineering Corporation a U.S. firm, gives a Chinese official a sport utility vehicle. This may violate

A) the act of state doctrine.

B) the Foreign Corrupt Practices Act.

C) the doctrine of sovereign immunity.

D) the principle of comity.

6. The basic purpose of antitrust law is to regulate economic competition.

A) True

B) False

7. Chiang Ltd., a Chinese firm, imports its goods into the United States and offers those goods for sale at “less than fair value.” This is

A) dumping.

B) confiscation.

C) defalcation.

D) expropriation.

8. The United States and other members of a certain organization agree to grant normal trade relations status on each other with regard to imports and exports. This organization is

A) the International Export-Import Bank.

B) the United Nations.

C) the Convention on Contracts for the International Sale of Goods.

D) the World Trade Organization.

9. State and local agency actions prevail over federal agency operations.

A) True

B) False

10. Congress can create a new federal administrative agency.

A) True

B) False

11. Superior Sign Company is subject to the Fair Labor Standards Act (FLSA). The FLSA is not concerned with

A) minimum wages.

B) employees’ privacy rights.

C) child labor.

D) maximum hours.

12. An employer who hires and fires workers according to a fair seniority system may have a good defense to an employment discrimination suit.

A) True

B) False

13. Mona and Nero want to discharge their contract by executing and performing a new agreement. They can best accomplish this by

A) specific performance.

B) novation.

C) accord and satisfaction.

D) reinvention.

14. The Securities and Exchange Commission decides to create a new rule relating to the dissemination of material nonpublic information through corporate Web sites. The first step is

A) publish a notice of the proposed rulemaking.

B) solicit public comment.

C) conduct an on-site inspection.

D) compile the rule with others in the Code of Federal Regulations.

15. Rolling Transport & Storage Corporation wants to insure its warehouse to obtain the maximum possible recovery for the lowest possible premium. To obtain the maximum recovery under a coinsurance clause, the percentage of the value of the property that should be insured is

A) 90 percent.

B) 80 percent.

C) 120 percent.

D) 100 percent.

16. Michelle gives out a business card with an e-mail address on it. It is reasonable to infer that Michelle has consented to

A) transact business electronically.

B) nothing.

C) accept and respond to any correspondence sent to that address.

D) submit to the jurisdiction of any selected forum.

17. Gulf Air, Inc., is the major wholesale distributor of software in the state of Florida. Its closest competitor is Fluid Systems Company, another Florida firm. The two firms agree that Gulf Air will operate in south Florida and Fluid Systems will operate in north Florida. This is

A) an exclusive-dealing contract.

B) a group boycott.

C) a joint venture.

D) a market division.

18. All rights can be assigned.

A) True

B) False

19. Optima Medico Corporation, a U.S. firm, signs a contract with Pharma Beneficial, Ltd., a Canadian firm, to give Pharma the right to sell Optima’s products in Canada. This is

A) a distribution agreement.

B) licensing.

C) a joint venture.

D) direct exporting.

20. Cory employs Daily Delivery Agency as an agent under a written agreement that describes the rights and duties of both parties. This is

A) apparent authority.

B) equal authority.

C) express authority.

D) implied authority.

21. A signature can consist of initials signed by a party.

A) True

B) False

22 The payment of Eden’s debt to Flem is guaranteed by Eden’s personal property. This property is

A) a secured party.

B) collateral.

C) a security interest.

D) a secured transaction.

23. Home Delivery Corporation and Interstate Transport, Inc., sign an agree¬ment that provides for the payment of “$1,000 by whichever party commits a material breach of the contract that creates damages difficult to esti¬mate but approximately $1,000.” This is

A) a penalty clause.

B) a liquidated damages clause.

C) a nominal damages clause.

D) a mitigation of damages clause.

24. The brakes on a River Valley Railroad train malfunction and it rolls towards maintenance workers on the tracks. Everyone gets out of the way except Dick, who wants to show off. The train hits Dick, who sues Stops-it, Inc., the brakes’ manufacturer. Stops-it can raise the defense of

A) consumer participation.

B) assumption of risk.

C) a component-part manufacturer.

D) product misuse.

25. A click-on agreement is an agreement whose terms are expressed inside a box in which the goods are packaged.

A) True

B) False

26. If a lessor’s tender of delivery fails to conform to a contract in any way, the lessee can reject the goods.

A) True

B) False

27. Article 2 of the UCC governs contracts for sales of goods.

A) True

B) False

28. National Ladder Company is subject to regulations issued by the Occupational Safety and Health Administration (OSHA). Like other federal administrative agencies, the OSHA was created by

A) the president, through an executive order.

B) Congress, through enabling legislation.

C) the Federal Trade Commission, through the rulemaking process.

D) the U.S. Department of Labor, through a final order.

29. Fun-E Products, Inc., makes and sells toys. The government agency that has the authority to remove a potentially hazardous toy from the market is

A) the Federal Reserve Board of Governors.

B) the Federal Trade Commission.

C) the Food and Drug Administration.

D) the Consumer Product Safety Commission.

30. Midwest Agri-Products Corporation offers to sell its sugar substitute to Nice Candies, Inc., only if Nice Candies agrees to buy all the corn it needs from Midwest Agri-Products, even though there are other corn sellers from whom Nice Candies could buy. This is

A) an exclusive-dealing contract.

B) price discrimination.

C) a tying arrangement.

D) a group boycott.

31. The Uniform Commercial Code governs checks.

A) True

B) False

32. An agent is authorized to act on behalf of a principal in doing business with third parties.

A) True

B) False

33. Khali’s debt to Lew is past due. Lew obtains a judgment against Khali to collect the debt, but Khali refuses to pay. Lew asks the court to order Khali’s employer to pay a portion of Khali’s paycheck to Lew. This is a request for

A) an order that would violate most state laws.

B) a right of contribution.

C) an exemption from most federal limits on creditors’ actions.

D) an order of garnishment.

34. A price-fixing agreement that is reasonable does not violate antitrust law.

A) True

B) False

35. Retail Sales Company and Standard Purchasing Corporation enter into a contract for a sale of goods. To be enforceable, the contract should be in writing if the goods are valued at more than

A) $50.

B) $500.

C) $15.

D) $5.

36. A failure to exercise reasonable care is negligence.

A) True

B) False

37. The United States taxes each barrel of imported oil at a flat rate. This is

A) a quota.

B) a dumping duty.

C) a tariff.

D) an antidumping duty.

38. The test for whether an advertisement is deceptive is whether a reasonable consumer would be deceived.

A) True

B) False

39. ABC Motors, Inc., sells to Matt the right to the possession and use of a motor vehicle under a lease. As defined in the UCC, ABC is

A) a lessor.

B) a wholesaler.

C) a dealer.

D) a seller.

40. Accidental destruction of a negotiable instrument cancels it.

A) True

B) False

41. The rights and duties of a bank and its customer are contractual.

A) True

B) False

42. Ron makes a contract with Stu that indirectly benefits Tim, although neither Ron nor Stu intended that result. Tim is

A) a delegatee.

B) an assignee.

C) an incidental beneficiary.

D) an intended beneficiary.

43. North Mining Company and South Excavation Company agree to abide by the decisions of East Coast Financial Corporation as to their respective levels of production, markets, and prices, effectively reducing competition and increasing profits. This is most likely

A) an outdated, but legal business trust.

B) an innovative, legally efficient approach to doing business.

C) a common, legal, time-honored type of business arrangement.

D) an illegal restraint on trade.

44. Quality Watches, Inc., ships an assortment of timepieces to Retail Jewelers, Inc., which agrees to pay for items that are not returned within six months. This is

A) a sale or return.

B) a consignment.

C) a bailment.

D) a sale on approval.

45. Hu believes that he is a victim of a form of employment discrimination that falls under Title VII of the Civil Rights Act. Compliance with this statute is monitored by

A) employees and job applicants, not an administrative agency.

B) employers and businesses, not an administrative agency.

C) the Equal Employment Opportunities Commission.

D) the courts and Congress, not an administrative agency.

46. Randy and Beach Biz Company enter into an oral contract under which Randy agrees to clean Beach Biz’s office for two years. This contract is enforceable by

A) Beach Biz only.

B) neither party.

C) Randy only.

D) either party.

47. Labor Recruiters, Inc., has been ordered to appear at a hearing before an administrative law judge of the National Labor Relations Board. A significant difference between a trial and an administrative hearing is that

A) the burden of proof is on the charged party to prove innocence.

B) attorneys are not allowed to attend administrative hearings.

C) clients are not allowed to communicate with their attorneys during administrative hearings.

D) hearsay can be introduced as evidence in an administrative hearing.

48. “Major medical” and “marine” insurance are military policies.

A) True

B) False

49. Karen writes on a piece of paper, “I owe you $600,” signs it, and gives it to Lou. This instrument is

A) nonnegotiable, because it does not recite any consideration.

B) nonnegotiable, because it does not state any conditions to payment.

C) negotiable.

D) nonnegotiable, because it does not include an express promise to pay.

50. Compensatory damages are foreseeable damages that arise from a party’s breach of a contract.

A) True

B) False



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