76) Jana finds a home priced at $180,000 that she would like to buy. She is
concerned, however, about her ability to get a loan. Accordingly, she and
the seller reach agreement that Jana will buy the home if she can get a loan
for $180,000 within 45 days. What type of condition is this agreement?
a. An express condition.
b. A concurrent condition.
c. A condition precedent.
d. a and c.
e. a, b, and c.
77) When an employee breaches a fixed-term employment contract by quitting
before the end of the term, what can the employer recover as damages?
a. All amounts already paid to the employee under the contract.
b. Nothing, because courts do not order anyone to perform a job against his or
her will.
c. Only specific performance.
d. Only amounts paid to the employee for which the employee has not yet done
the work.
e. The costs of hiring a replacement employee plus any increase in salary paid
to the replacement employee.
78) The doctrine that places a duty on a non-breaching party to take reasonable
steps to reduce damages is called:
a. garnishment.
b. mitigation.
c. liquidation.
d. avoidance.
e. reciprocal duties.
79) Alice has a contract with a surgeon to have a medical procedure performed
on July 17. The surgeon notifies Alice on July 5 that he is in the Bahamas
and will be there until the end of August and will not be able to do the surgery. Which of the
following is true at this point?
a. Alice must give the surgeon 90 days in which to schedule the surgery after
July 17.
b. There will be no breach until July 17.
c. If Alice contracts with another surgeon prior to July 17, and this second surgeon is aware of Alice’s original contract, the second surgeon has no obligation to perform.
d. Alice must wait until July 17, and if the surgeon does not perform the procedure, then Alice can contract with another surgeon.
e. Alice is free to contract with another surgeon.
80) A construction contractor entered into a contract to build a family room addition onto
Harry’s home for $25,000. In order to encourage timely performance, the agreement provided
that the contractor would be penalized $5,000 as liquidated damages for each day that the project
was late in getting finished. The contractor was 30 days late in finishing the project, but
otherwise met the terms of the agreement. What is most likely in this situation?
a. The liquidated damages clause would not be enforced due to its being excessive.
b. The liquidated damages clause would not be enforced because the parties
made a mutual mistake about when the contract would be finished.
c. The liquidated damages clause would be enforced only if it can be shown that the contractor has made that much in profits over the past six months.
d. The liquidated damages clause would be enforced.
e. The liquidated damages clause would be limited to $25,000, the amount of the contract price.
81) The highest price paid to date for the purchase of a domain name has been
to pu.
76) Jana finds a home priced at $180,000 that she would like to bu.docx
1. 76) Jana finds a home priced at $180,000 that she would like to
buy. She is
concerned, however, about her ability to get a loan.
Accordingly, she and
the seller reach agreement that Jana will buy the home if she
can get a loan
for $180,000 within 45 days. What type of condition is this
agreement?
a. An express condition.
b. A concurrent condition.
c. A condition precedent.
d. a and c.
e. a, b, and c.
77) When an employee breaches a fixed-term employment
contract by quitting
before the end of the term, what can the employer recover as
damages?
a. All amounts already paid to the employee under the contract.
b. Nothing, because courts do not order anyone to perform a job
against his or
her will.
2. c. Only specific performance.
d. Only amounts paid to the employee for which the employee
has not yet done
the work.
e. The costs of hiring a replacement employee plus any increase
in salary paid
to the replacement employee.
78) The doctrine that places a duty on a non-breaching party to
take reasonable
steps to reduce damages is called:
a. garnishment.
b. mitigation.
c. liquidation.
d. avoidance.
e. reciprocal duties.
79) Alice has a contract with a surgeon to have a medical
procedure performed
on July 17. The surgeon notifies Alice on July 5 that he is in the
Bahamas
and will be there until the end of August and will not be able to
do the surgery. Which of the
3. following is true at this point?
a. Alice must give the surgeon 90 days in which to schedule the
surgery after
July 17.
b. There will be no breach until July 17.
c. If Alice contracts with another surgeon prior to July 17, and
this second surgeon is aware of Alice’s original contract, the
second surgeon has no obligation to perform.
d. Alice must wait until July 17, and if the surgeon does not
perform the procedure, then Alice can contract with another
surgeon.
e. Alice is free to contract with another surgeon.
80) A construction contractor entered into a contract to build a
family room addition onto
Harry’s home for $25,000. In order to encourage timely
performance, the agreement provided
that the contractor would be penalized $5,000 as liquidated
damages for each day that the project
was late in getting finished. The contractor was 30 days late in
finishing the project, but
otherwise met the terms of the agreement. What is most likely
in this situation?
a. The liquidated damages clause would not be enforced due to
4. its being excessive.
b. The liquidated damages clause would not be enforced because
the parties
made a mutual mistake about when the contract would be
finished.
c. The liquidated damages clause would be enforced only if it
can be shown that the contractor has made that much in profits
over the past six months.
d. The liquidated damages clause would be enforced.
e. The liquidated damages clause would be limited to $25,000,
the amount of the contract price.
81) The highest price paid to date for the purchase of a domain
name has been
to purchase:
a. www.wine.com.
b. www.wallstreet.com.
c. www.sex.com.
d. www.rockandroll.com.
e. www.drugs.com.
82) Under the Uniform Computer Information Transactions Act,
what is the effect
of putting additional terms into an acceptance delivered through
5. an electronic agent?
a. The acceptance is treated as a counteroffer.
b. The additional terms are ignored and a contract is formed
based on the original terms.
c. The acceptance is treated as a rejection.
d. The acceptance is treated is if it never occurred, leaving the
original offer
open.
e. The additional terms become part of the agreement unless
objected to within
10 days.
83) Licensing of informational rights can usually best be
described as:
a. granting any rights to use the information, which can differ
greatly in scope
and duration.
b. the right to temporarily use the domain name of another.
c. granting limited rights to use that cannot be simultaneously
granted to others.
d. a lease of tangible personal property to the licensee.
e. a sale of the underlying intellectual property rights.
6. 84) Under the Uniform Computer Information Transactions Act,
how long does a
party have in which to commence a cause of action?
a. Two years after the breach was or should have been
discovered, but not more
than five years after the breach actually occurred.
b. One year after the breach actually occurred only.
c. One year after the breach was or should have been
discovered, but not more
than five years after the breach actually occurred.
d. Two years after the breach was or should have been
discovered, but not more
than three years after the breach actually occurred.
e. One year after the breach was or should have been
discovered, but not more
than four years after the breach actually occurred.
85) The parol evidence rule would not allow which of the
following items into
evidence when interpreting a written contract?
a. Evidence based on prior conduct in similar contracts between
the parties to
explain the meaning of an ambiguous term in the contract.
7. b. Evidence of an oral statement regarding the contract price
made when the
written contract was signed that was different from the price in
the written
contract.
c. Evidence of the meaning of a term in the parties’ line of
business that differs
from the meaning of that term in everyday language.
d. Evidence of a price change agreed upon after the contract
was signed.
e. All the above would be allowed into evidence under the parol
evidence rule.
86) For the firm offer rule to apply, who must be a merchant?
a. The offeree.
b. The offeror.
c. Both the offeror and the offeree.
d. Neither the offeror nor the offeree.
e. The offeree only if the offeree is a corporation.
87) Susan decides to buy new carpet for her home. She goes to
Carpet City and
chooses the carpet she likes. As part of the deal, Carpet City
8. agrees to install
the carpet. The carpet is installed while Susan is at work. When
she returns
home and sees it, Susan immediately notices problems. The
carpet is not the
same quality of carpet she ordered, and the color is off. Does
the UCC apply,
and why or why not?
a. The UCC does not apply because it does not apply to mixed
contracts of
goods and services.
b. The UCC does not apply because the deal with Carpet City
included service
that is not covered by the UCC.
c. The UCC applies because the predominant part of the
transaction between
Susan and Carpet City was the sale of goods.
d. The UCC does not apply because Susan and Carpet City did
not agree in writ-
ing before the carpet was installed that the UCC would apply.
e. The UCC applies because it applies to service contracts as
well as to con-
9. tracts for the sale of goods.
88) Which of the following situations creates a sale that falls
under UCC sales law
rules?
a. Katherine contracts to pay Mike $880.00 to have her bedroom
painted.
$800.00 is for labor and $80.00 is for the paint.
b. All of the above are UCC sales contracts.
c. Katherine makes a contract to purchase a shed that requires
assembly. The
contract price is for $8,000.00 which includes $400.00 for
labor.
d. Abc rentals rents a cement mixer to Katherine.
e. Dr. Mackey agrees to teach at yahoo university for 1 year.
89) Seller who is located in Atlanta, Georgia contracted to sell a
shipment of
peaches to the 1910 fruit gum company located in Buffalo, New
York. The
peaches were sold f.o.b. Buffalo. Seller delivered the peaches to
the proper
carrier in Atlanta and the peaches were destroyed during
shipping. Under
10. these facts:
a. Seller and buyer share the risk of loss.
b. Seller bears the risk of loss and is responsible.
c. This is a trick question; goods can’t be shipped f.o.b.
Buffalo.
d. Buyer bears the risk of loss and is responsible.
e. Neither the seller nor the buyer bear risk of loss, the carrier
bears the risk of
loss.
90) Which of the following is true regarding a shipment
contract?
a. Such contracts require the seller to bear the risk of loss to the
goods during
their transportation.
b. It requires the seller to deliver conforming goods to the buyer
by use of the
seller’s own trucks.
c. The risk of loss does not pass until the goods are tendered to
the buyer at the
specified destination.
d. It requires the seller to deliver conforming goods to a
specific destination.
11. e. It requires the seller to ship goods conforming to the contract
to a buyer via a
carrier.
91) Under Article 2A of the UCC, for which types of lease(s) is
the risk of loss on
the lessor during the term of the lease?
a. Loss-shifting leases.
b. Both ordinary and finance leases.
c. Ordinary leases.
d. Finance leases.
e. Neither ordinary nor finance leases.
92) In Lindholm v. Brandt, when Malmberg sold Lindholm’s
“Red Elvis” to
Brandt, the court found that:
a. Malmberg had been entrusted with the artwork and could pass
the voidable
title to Brandt because Brandt qualified as a good faith
purchaser.
b. Malmberg had been entrusted with the artwork and could pass
the void title
to Brandt because Brandt qualified as a good faith purchaser.
12. c. Malmberg had stolen the artwork and could pass the void title
to Brandt be-
cause Brandt qualified as a good faith purchaser.
d. Malmberg had been entrusted with the artwork but had a void
title because
he breached the terms of the entrustment so he couldn’t pass
good title to
Brandt.
e. Malmberg had stolen the artwork, so he couldn’t pass his
void title to Brandt.
93) A destination contract requires that the seller:
a. assist the buyer in handling goods once received by the
buyer.
b. give proper and adequate notice to the buyer.
c. deliver the goods to the buyer.
d. a and c.
e. b and c.
94) If a seller has delivered nonconforming goods that have
been rejected by the
buyer, the seller has a right to cure:
a. only if the buyer agrees.
13. b. only if the contract specifically allows for cure.
c. under some circumstances, even if the original time for
performance has
passed.
d. only if the time for performance has not yet expired.
e. only for 24 hours.
95) Which of the following statements is true regarding
installment contracts?
a. To be an installment contract, the contract must state that
each delivery is a
separate lot or words to that effect.
b. The buyer may reject the entire order for any nonconformity.
c. The buyer may reject the entire order only if the
nonconformity in one shipment affects the value of the entire
contract.
d. a, b and c.
e. a and c only.
96) Which of the following is true about a buyer’s right of
inspection?
a. If not mentioned in the contract, the buyer has the right to
inspect goods in a
14. reasonable time, place and manner once the goods have been
accepted.
b. This right must be agreed to in the contract in order for it to
apply.
c. If not mentioned in the contract, the buyer has the right to
inspect goods in a
reasonable time, place and manner prior to accepting or paying
for them.
d. This right exists even if not mentioned in the contract, and
the buyer has the
sole right to determine the time and place the right may be
exercised.
e. This right exists even if not mentioned in the contract, and
the seller has the
sole right to determine the time and place the right may be
exercised.
97) Which of the following is not necessary in order for the
implied warranty of
fitness for a particular purpose to apply to a sale of goods?
a. The goods are purchased.
b. The buyer relies on the seller’s skill and judgment.
c. The seller knows or has reason to know of the buyer’s
intended use of the
15. good.
d. The seller is a merchant.
e. The seller states that the goods will serve the purpose of the
buyer’s intended
use.
98) What was the result in Shoshone Coca-Cola Bottling
Company v. Dolinski, in
which the plaintiff became ill after consuming a soft drink with
a dead mouse
in it and sued the manufacturer of the drink?
a. The defendant won because the plaintiff could not explain
how the mouse got
in the drink.
b. Plaintiff won because he could prove negligence on the part
of the defendant.
c. Plaintiff won because the defendant was held liable under the
doctrine of
strict liability in tort.
d. The defendant won because it had been as careful as possible
in bottling the
drink.
e. The defendant won because plaintiff’s drink was the only
16. drink in the applicable lot or batch that was defective.
99) Which of the following is not a typical way that a
manufacturing defect
arises?
a. Failure to properly check the quality of the completed
product.
b. Failure to properly design the product.
c. Failure to properly assemble the product.
d. Failure to properly test the product.
e. Failure to properly engineer the product. Final Examination
25 Business Law
100) In Sta-Rite Industries, Inc.v. Peterson, the court found Sta-
Rites pool drain
defectively designed based on which of the following except:
a. there was no shut off mechanism.
b. it was a screw down design that frequently came loose.
c. the 300 to 400 pounds of pull was excessive and unnecessary
for the product.
d. there had been over 20 prior suction related accidents with
Sta-Rite drain
covers and pumps.