Busines Law (BLaw) Sample Class Exam 1

True/False

Indicate whether the sentence or statement is true or false.

____          1.   If a buyer breaches a contract and the seller resells the goods to another party, the seller need not credit the net proceeds to the breaching buyer.

____          2.   Incidental damages result from the costs of forming a contractual relationship that is ultimately breached.

____          3.   A lessor's failure to make proper delivery under a contract will not usually give the lessee the right to cancel the contract.

____          4.   Under the UCC, replevin is an action to recover goods that are identified to a contract and in the hands of a breaching seller.

____          5.   The right to replevy goods identified to a contract does not depend on whether the buyer is able to obtain substitute goods following the breach of the contract.

____          6.   A buyer who accepts nonconforming goods is not required to notify the seller of the breach within a reasonable time after the defect should have been discovered.

____          7.   Notification is seasonable if it is timely.

____          8.   Warranties of title arise in most sales contracts only when the seller expressly declares that he or she does possess title to the goods.

____          9.   If a warranty against infringement is breached and the buyer is sued by the claim holder, then the buyer must notify the seller of the litigation within a reasonable time to enable the seller to decide whether to defend the lawsuit.

____          10.  Only a substance that is natural to a food product can be the basis for a breach of the implied warranty of merchantability.

____          11.  A product is unmerchantable if it could injure a user in any way-for example, by causing a user to slip and fall by stepping on it.

____          12.  When a buyer relies on a seller to select a product suitable for the buyer's purpose, and the seller does not furnish a suitable product, the seller may be liable for breaching the implied warranty of fitness for a particular purpose.

____          13.  A promissory note that states it is payable within ninety days represents an extension of credit by the holder to the debtor.

____          14.  A cashier's check drawn by a bank on itself is an instrument in which the bank is both the drawer and the drawee.

____          15.  An instrument does not have to be signed by its maker or drawer for it to be negotiable.

____          16.  A thumbprint made on a document with the intent that it serve as a valid signature will be legally valid if it is witnessed.

____          17.  A signature must generally be located on the lower left-hand corner of a document in order to be negotiable.

____          18.  To be negotiable, the terms of a promise or order must be included on the face of the instrument.

____          19.  An instrument including a clause that permits the date of maturity to be extended by the maker for "no more than a reasonable time" is negotiable.

____          20.  A promise to give value in the future is normally sufficient to confer the rights of an HDC on one in possession of a negotiable instrument.

____          21.  A person who acquires a check stamped "insufficient funds" is put on notice and therefore acquires HDC status.

____          22.  Presentment of a negotiable instrument may be properly made, depending on the type of instrument, by any commercially reasonable means.

____          23.  In general, an agent must clearly indicate that he or she is signing on behalf of a clearly named principal to bind the principal.

____          24.  A drawer can stop payment on a check on the ground of forgery if the drawer was induced by an imposter to issue the check in the name of an impersonated payee.

____          25.  If an instrument is originally incomplete and is later completed in an unauthorized manner, the unauthorized completion is a defense against payment on the instrument to an HDC.

TRUE/FALSE Answers

            1.    F

            2.    F

            3.    F

            4.    T

            5.    F

            6.    F

            7.    T

            8.    F

            9.    T

            10.  F

            11.  F

            12.  T

            13.  T

            14.  T

            15.  F

            16.  T

            17.  F

            18.  T

            19.  F

            20.  F

            21.  F

            22.  T

            23.  T

            24.  F

            25.  F

Multiple Choice

Identify the letter of the choice that best completes the statement or answers the question.

____          26.  American Goods, Inc., contracts to sell t-shirts to All-Mart Outlet Stores. American Goods can cancel the contract

a.	only if All-Mart wrongfully rejects or revokes acceptance of the goods.
b.	only if All-Mart fails to make payment or repudiates the contract.
c.	both a and b.
d.	none of the above.

____          27.  Fitz and Simmons enter into a contract by which Fitz agrees to sell onions to Simmons. Simmons subsequently declares bankruptcy. The smallest shipment of onions that Fitz can stop in transit before it is delivered to Simmons is

a.	a carload.
b.	a planeload.
c.	a truckload.
d.	none of the above.

____          28.  Don contracts to buy timber from Northwest Lumber Company. Only half of the shipment conforms to the contract. Timber that conforms to the contract is in short supply. Don should probably

a.	accept the entire shipment.
b.	accept the timber that conforms to the contract and sue Northwest for the difference between the contract price and the cost of obtaining the rest of the conforming timber elsewhere.
c.	reject the entire shipment.
d.	sue Northwest for specific performance.

____          29.  Jane accepts a commercial unit of goods before discovering that the goods do not substantially conform to the contract. Jane can revoke her acceptance of the goods if the nonconformity substantially impairs the value of the goods and

a.	acceptance was predicated on the reasonable assumption that the nonconformity would be cured and it has not been seasonably cured.
b.	Jane did not discover the nonconformity, and her acceptance was reasonably induced by the difficulty of discovery before acceptance or by the seller's assurances that the goods conform.
c.	either a or b.
d.	none of the above.

____          30.  Perry, a buyer for Superior Products Company, a manufacturer of bulletin boards and other office supplies, visits a lumberyard and is shown samples of cork by Monica, a salesperson. Perry agrees to buy a certain quantity based on Monica's statement that the shipment will match a selected sample. The statement is

a.	an express warranty.
b.	an implied warranty.
c.	a warranty of title.
d.	puffing.

____          31.  A statement by Ed, a salesperson for Best Textiles Company, that Best's bolts of fabric are the "finest money can buy" is

a.	an express warranty.
b.	an implied warranty.
c.	a statement of fact.
d.	puffing.

____          32.  Rick hires Jose, a noted equestrian authority, to advise him in his search for the perfect stud horse. Rick buys a horse from Quarter Farms based on Jose's statement that the horse is in "good shape."  After the sale, the salesperson says that the horse is "fit."  Subsequently, Rick learns that horse cannot be used as a stud. Rick could

a.	recover damages from Quarter Farms based on a breach of express warranty.
b.	recover damages from Quarter Farms based on a breach of implied warranty of merchantability.
c.	not recover damages from Quarter Farm, because the salesperson's statement regarding the fitness of the horse was collateral to the sale.
d.	not recover damages from Quarter Farm, because Rick hired Jose to advise him regarding the fitness of horses.

____          33.  A salesperson at Opal's Computer Store tells Ryan that a certain laptop computer outperforms all other laptops. Ryan buys the laptop, but it does no more than most such computers. If Ryan sues Opal,

a.	Opal will win, because the computer is reasonably fit for the ordinary purposes for which such goods are used.
b.	Opal will win, because implied warranties supersede express warranties.
c.	Ryan will win, because general descriptions supersede samples.
d.	Ryan will win, because express warranties supersede the implied warranty of merchantability.

____          34.  A-One Appliance Company markets its products through its own A-One Appliance Stores. For A-One's written disclaimer to nullify any express warranties, it must be

a.	conspicuous and called to a buyer's attention.
b.	in smaller print than the rest of the sales contract.
c.	in the same print as the rest of the sales contract.
d.	presented to a buyer after a sales contract has been entered into.

____          35.  National Restaurants, Inc., in the United States, contracts with Perfecto Café, Ltd., in Columbia, for a purchase of coffee beans. Under the United Nations Convention on Contracts for the International Sale of Goods, National Restaurants has warranty protection that is similar to that available under

a.	the general principles of contract law.
b.	the Magnuson-Moss Warranty Act.
c.	the UCC.
d.	none of the above.

____          36.  To purchase office supplies for her medical clinic, Becky executes a draft in favor of Sonya. A draft is

a.	a promise to pay money.
b.	a promise to deliver goods at a future date.
c.	a conditional promise to pay money.
d.	an unconditional written order to pay money.

____          37.  In a sale of software to First Insurance Corporation, Omega Software, Inc., draws an instrument that orders First Insurance to pay $1,500 to the order of Omega in thirty days. First Insurance accepts the instrument by signing and dating the face of it. This is

a.	a cashier's check.
b.	a promissory note.
c.	a trade acceptance
d.	none of the above.

____          38.  John's oral promise to pay $300 to Paul is not a negotiable instrument because

a.	negotiable instruments must be in written form.
b.	the promise does not recite the consideration that was given by Paul to John in exchange for the promise to pay $300.
c.	the promise may have been induced by fraud.
d.	the amount of the promise falls within the Statute of Frauds.

____          39.  Diner's Restaurant issues an instrument in favor of General Supplies, Inc. For the instrument to be negotiable, it need not

a.	be an unconditional promise or order to pay.
b.	be payable on demand or at a specific time.
c.	be signed by Diner's Restaurant.
d.	recite the consideration given in exchange for a promise to pay.

____          40.  Ferdinand owes $8,000 in unpaid taxes. Using the back of an old shirt, he executes an instrument for $8,000 that otherwise meets the requirements for negotiability. This instrument is likely

a.	negotiable.
b.	nonnegotiable, because a shirt is not sufficiently permanent.
c.	nonnegotiable, because the government does not appreciate such gestures.
d.	nonnegotiable, because an instrument must be on paper so that it may be processed efficiently in the banking system.

____          41.  Greg, the chief financial officer of Great Computers Company, signs an instrument that includes the phrase "this debt arises from the sale of seventy-seven hard drives."  This instrument is

a.	negotiable.
b.	nonnegotiable, because it states an express condition to payment.
c.	nonnegotiable, because obligations with respect to the note are stated in another writing.
d.	none of the above.

____          42.  Adam signs an instrument in favor of Francis that states it is "subject to a certain security agreement between Adam and Conrad."  This instrument is

a.	negotiable.
b.	nonnegotiable, because it refers to a security agreement.
c.	nonnegotiable, because it is made subject to a security agreement.
d.	nonnegotiable, because Francis and Conrad are not the same persons.

____          43.  Jeanne possesses an instrument "payable to bearer."  She loses the instrument, but Jake finds it. Jake may

a.	collect payment on the instrument.
b.	not collect payment on the instrument, because he gave no value for it.
c.	not collect payment on the instrument, because he is not the "bearer" that the instrument refers to.
d.	not collect payment on the instrument, because he only found it.

____          44.  Owen is a holder of a promissory note obtained from Purchase Money, Inc. Regarding the defenses against payment of the note to which Purchase Money is subject, Owen, as an ordinary holder, is subject to

a.	more defenses.
b.	no defenses.
c.	some defenses, but not as many.
d.	the same defenses.

____          45.  Ann is the payee of a bearer instrument: promissory note in the amount of $10,000. Burt offers to irrigate Ann's ranch next week in exchange for the note. Ann agrees and delivers the note to Burt. Burt is

a.	not an HDC, because the note is a bearer instrument.
b.	not an HDC, because he did not acquire the instrument in good faith.
c.	not an HDC, because he did not yet give value for the instrument.
d.	an HDC, because the good faith and value requirements apply only to the transferor, not the holder.

____          46.  City Investment Company signs a check payable to Downtown Lenders, Inc., to buy a promissory note executed by Eagle Corporation. This check

a.	does not constitute sufficient consideration for HDC status.
b.	does not satisfy the value requirement for HDC status.
c.	satisfies the consideration requirement for HDC status.
d.	satisfies the value requirement for HDC status.

____          47.  National Lenders, Inc., will not attain the status of an HDC if it knows or should know when it acquires a negotiable instrument that the instrument

a.	has been altered.
b.	is complete.
c.	has been altered or is complete.
d.	none of the above.

____          48.  Bruce writes a check to Hanson that is drawn on his account at First National Bank. Hanson presents the check to the bank for payment, and the bank accepts the check. The bank is

a.	primarily liable for payment.
b.	secondarily liable for payment.
c.	not be liable for payment.
d.	none of the above.

____          49.  Ann acquires a negotiable instrument drawn on Northern State Bank. To present the instrument for payment, she may

a.	use any commercially reasonable means.
b.	submit it to an authorized clearinghouse.
c.	present it at the place specified in the instrument for acceptance or payment.
d.	all of the above.

____          50.  Elle is the authorized agent for Nick. To avoid personal liability on any negotiable instruments that she signs on behalf of Nick, Elle mustnot sign

a.	her name alone without indicating that she is acting on behalf of Nick.
b.	her name and Nick's name without indicating that she is Nick's agent.
c.	both a and b.
d.	none of the above.

MCQ Answers

            26.  C

            27.  D

            28.  B

            29.  C

            30.  A

            31.  D

            32.  C

            33.  D

            34.  A

            35.  C

            36.  D

            37.  C

            38.  A

            39.  D

            40.  A

            41.  A

            42.  C

            43.  A

            44.  D

            45.  C

            46.  D

            47.  A

            48.  A

            49.  D

            50.  C

Business Law (BLaw) Employment Discrimination Questions

2213-prac-quest-empl-discrim-f06

True/False

Indicate whether the sentence or statement is true or false.

____    1.   Title VII of the Civil Rights Act of 1964 prohibits job discrimination on the basis of education and experience.

____    2.   A victim of alleged discrimination must bring a suit against an employer before filing a claim with the Equal Employment Opportunity Commission.

____    3.   Discrimination on the basis of race, color, national origin, religion, and gender is permitted against union members.

____    4.   Title VII prohibits unintentional discrimination.

____    5.   To maintain an action against an employer on the basis of disparate-treatment discrimination, a person must show that he or she is a member of a protected class.

____    6.   Title VII of the Civil Rights Act of 1964 applies to all employers within the United States, regardless of the number of persons employed.

____    7.   A woman affected by pregnancy, childbirth, or a related medical condition may be treated for all employment-related purposes in the same manner as an employer would treat any temporarily disabled employee.

____    8.   Employers are not generally liable for Title VII violations by their managers or supervisors.

____    9.   In a sexual harassment case, an employer may be held liable for the harassing actions of a lower-level employee if the employer knew or should have known of the harassment and failed to take corrective action.

____  10.   Damages are not available for victims of intentional employment discrimination based on gender, religion, age, or disability.

____  11.   Under the Equal Pay Act of 1963, all of the women on an employer's staff must be paid the same as all of the men.

____  12.   The Age Discrimination in Employment Act of 1967 prohibits employment discrimination on the basis of age against individuals thirty-five years of age and older.

____  13.   A disabled person is a person with a mental or physical impairment that "substantially limits one or more of the major life activities" of the individual, according to the Americans with Disabilities Act of 1990.

____  14.   In some instances, a disabled person must be given a job even if he or she cannot perform its essential functions.

____  15.   Terminating an employee who uses drugs violates the Americans with Disabilities Act of 1990.

____  16.   A good defense to an employment discrimination suit exists if an employer can show that promotions or other job benefits are distributed according to a fair seniority system.

____  17.   Gender can be a bona fide occupational qualification.

____  18.   Affirmative action programs are rarely upheld if employers consider factors in addition to race or gender when making employment decisions.

____  19.   State laws provide no more than the same remedies for the same types of employment discrimination as federal laws.

Multiple Choice

Identify the letter of the choice that best completes the statement or answers the question.

Fact Pattern 42-1

Jane works for Butler Warehouse Company. Jane is the only woman on her work crew. The male crew members often tell jokes and play minor pranks on each other. When Jane attempts a prank, the supervisor fires her, saying that "we don't tolerate horseplay at Butler."

____  20.   Refer to Fact Pattern 42-1. If Jane challenges the discharge on the ground of discrimination, she must show that

a.	she is the member of a protected class and she was qualified for the job.
b.	the misconduct she engaged in was only a pretext for her discharge, that discriminatory intent actually motivated Butler's decision.
c.	there was a legitimate, nondiscriminatory reason for the discharge.
d.	both a and b.

____  21.   Refer to Fact Pattern 42-1. Assuming that Jane can establish the ground for a lawsuit against Butler, Butler can defend itself by showing that

a.	Jane is the member of a protected class and she was qualified for the job.
b.	the misconduct Jane engaged in was nearly identical to that engaged in by an employee who is not a member of the protected class and who was not fired.
c.	there was a legitimate, nondiscriminatory reason for the discharge.
d.	both a and b.

____  22.   Helen applies for a job with National Stores, Inc., but is not hired. Helen believes that she was not hired for reasons of discrimination. If Helen files a suit against National Stores and a prima facie case is established, she

a.	wins the suit.
b.	wins the suit only in the absence of a response by National Stores.
c.	wins the suit even if National Stores articulates a legal reason for not hiring her.
d.	loses the suit.

____  23.   Stan, a member of a minority, is denied a promotion by his employer, Consumer Sales Company, when he fails to pass an employer-required test. Few members of minorities have passed the test. The number of promoted employees who are members of minorities does not reflect their percentage in the local labor market. In a suit against Consumer Sales, if Stan can show a connection between the test and the number of promoted minority members,

a.	discriminatory intent must then be proved.
b.	no evidence of discriminatory intent is necessary.
c.	it must then be shown that discrimination was the purpose of the test.
d.	none of the above.

____  24.   Alex, who is Hispanic, applies for a job at Gorden Fixtures Company. The interviewer says that Gorden hires Hispanics, but does not hire African Americans. Making this distinction

a.	constitutes impermissible discrimination on the basis of race.
b.	constitutes discrimination but is permissible at the application stage of employment.
c.	does not constitute discrimination.
d.	none of the above.

____  25.   Abby is a salesperson for Regional Sales, Inc. Ben is also a salesperson. Carl is Abby and Ben's supervisor. Dave is a Regional Sales customer. If Abby is the victim of sexual harassment, Regional Sales may be liable for such harassment by

a.	Ben or Carl only.
b.	Ben or Dave only.
c.	Dave only.
d.	Ben, Carl, or Dave.

____  26.   Mary, an employee of Alpha Tool Company, files a hostile-environment sexual-harassment suit against Nick, a co-worker. Mary wins. Their employer Alpha may also be held liable only if

a.	Alpha knew or should have known about the harassment and failed to take remedial action.
b.	Mary cannot obtain damages or other relief from Nick.
c.	Nick is Mary's manager or supervisor.
d.	all of the above.

____  27.   Mercy Hospital does not take any action to prevent sexual harassment of its employees. Mercy may be liable for such harassment by

a.	a supervisor or employee only.
b.	a customer only.
c.	a supervisor, an employee, or a customer.
d.	none of the above.

____  28.   Doug and Patty work in the same job on the line at Assembly Products Company. Their pay is based on the quality and quantity of production. Most of the time, Doug produces more and is paid more than Patty. Under the Equal Pay Act of 1963,

a.	Doug's pay must be reduced to match Patty's pay.
b.	Patty's pay must be increased to match Doug's pay.
c.	either a or b.
d.	none of the above.

____  29.   Ed, a sixty-year-old, is replaced in his job at Gold Manufacturing Company by Hal, a thirty-year-old. Ed files a suit against Gold under the Age Discrimination in Employment Act of 1967. To successfully defend against the suit, Gold must show that Ed

a.	is no longer qualified for the position.
b.	is older than Hal and was paid more than Hal.
c.	both a and b.
d.	none of the above.

Fact Pattern 42-3

Dana, who has a disability, is an employee of Hersch & Company. After the installation of new entry doors, Dana finds it nearly impossible to get into and out of the Hersch building. For repeatedly failing to be on time, Hersch discharges Dana. Dana is replaced by Gert, who does not have a disability. Dana files a claim against Hersch under the Americans with Disabilities Act of 1990.

____  30.   Refer to Fact Pattern 42-3. To succeed, Dana will have to show that

a.	Dana consistently met the essential requirements of her job.
b.	Gert is unqualified for Dana's position.
c.	Hersch refused to make reasonable accommodation for Dana.
d.	all of the above.

____  31.   Refer to Fact Pattern 42-3. To successfully defend against Dana's claim, Hersch will have to show that

a.	Dana consistently failed to meet the essential requirements of her job.
b.	Gert is qualified for Dana's position.
c.	Hersch cannot reasonably accommodate Dana without undue hardship.
d.	all of the above.

____  32.   Ace Manufacturing Company requires its workers to have a high school diploma. In a suit against Ace under Title VII, this requirement is shown to have a discriminatory effect. Ace defends against the suit on the ground that there is a definite connection between a high school education and job performance. This is

a.	an affirmative action defense.
b.	an after-acquired evidence defense.
c.	a bona fide occupational qualification defense.
d.	a business necessity defense.

____  33.   Ann's Retail, a women's clothing store, hires female attendants to assist clients in the store's dressing rooms. Larry, a male, applies for, and is refused, a job as an attendant. Larry then sues Ann's Retail for employment discrimination under Title VII. Against the suit, the store has

a.	an affirmative action defense.
b.	an after-acquired evidence defense.
c.	a bona fide occupational qualification defense.
d.	a business necessity defense.

____  34.   Tech Communications, Inc., gives preferential treatment in hiring and promotion to the members of all protected classes. This treatment results in discrimination against majority workers (principally white males). This is

a.	a bona fide occupational practice.
b.	a business necessity.
c.	reverse discrimination.
d.	none of the above.

____  35.   Frank sues General Contractors Corporation for employment discrimination under a state law. When compared to federal law, state law may provide

a.	additional damages.
b.	the same damages.
c.	fewer damages.
d.	no damages.

2213-prac-quest-empl-discrim-f06

Answer Section

TRUE/FALSE

            1.   ANS:  F                    REF:   779                OBJ:   Type: N

            2.   ANS:  F                    REF:   780                OBJ:   Type: N

            3.   ANS:  F                    REF:   780                OBJ:   Type: N

            4.   ANS:  T                    REF:   780                OBJ:   Type: N

            5.   ANS:  T                    REF:   780                OBJ:   Type: =

            6.   ANS:  F                    REF:   780                OBJ:   Type: =

            7.   ANS:  T                    REF:   783                OBJ:   Type: N

            8.   ANS:  F                    REF:   784                OBJ:   Type: =

            9.   ANS:  T                    REF:   785                OBJ:   Type: =

          10.   ANS:  F                    REF:   785                OBJ:   Type: =

          11.   ANS:  F                    REF:   785                OBJ:   Type: +

          12.   ANS:  F                    REF:   786                OBJ:   Type: =

          13.   ANS:  T                    REF:   787                OBJ:   Type: N

          14.   ANS:  F                    REF:   789                OBJ:   Type: N

          15.   ANS:  F                    REF:   790                OBJ:   Type: +

          16.   ANS:  T                    REF:   791                OBJ:   Type: =

          17.   ANS:  T                    REF:   791                OBJ:   Type: N

          18.   ANS:  F                    REF:   791                OBJ:   Type: =

          19.   ANS:  F                    REF:   792                OBJ:   Type: N

MULTIPLE CHOICE

          20.   ANS:  D                    REF:   780                OBJ:   Type: =

          21.   ANS:  C                    REF:   780                OBJ:   Type: =

          22.   ANS:  B                    REF:   780                OBJ:   Type: +

          23.   ANS:  B                    REF:   780                OBJ:   Type: +

          24.   ANS:  A                    REF:   781                OBJ:   Type: =

          25.   ANS:  D                    REF:   784                OBJ:   Type: N

          26.   ANS:  A                    REF:   784                OBJ:   Type: N

          27.   ANS:  C                    REF:   785                OBJ:   Type: +

          28.   ANS:  D                    REF:   785                OBJ:   Type: N

          29.   ANS:  A                    REF:   786                OBJ:   Type: N

          30.   ANS:  C                    REF:   789                OBJ:   Type: =

          31.   ANS:  C                    REF:   789                OBJ:   Type: =

          32.   ANS:  D                    REF:   790                OBJ:   Type: N

          33.   ANS:  C                    REF:   791                OBJ:   Type: N

          34.   ANS:  C                    REF:   791                OBJ:   Type: N

          35.   ANS:  A                    REF:   792                OBJ:   Type: N