Commercial Law Chapters 11-16

_______________ is a legal union of a man and a woman as husband and wife.

marriage

_______________ marriages occur when a single woman and a single man live together, share common property, and hold themselves out as husband and wife over a prolonged period of time (usually 10 years or longer).

common-law

__________________ is the fulfillment of contractual promises as agreed.

performance

__________________ occurs when a party entitled to receive performance under a contract may release the other party from the duty of performance and accept a substitute party.

noucation

__________________ of a contract is a termination of duties that ordinarily occurs when the parties perform as promised.

discharge

__________________ permits each party to recover money or property (or the value thereof).

restitution

____________________ entails a collection of rights including the right to hold title, possess, use, enjoy, profit from, waste, and even destroy the subject property.

ownership

A _______________ is a type of confidence game where extremely large returns on money invested are paid not out of the returns on legitimate investment, such as the buying and selling of stocks, but out of new investments a.bait and switch b.pyramid investment scheme c.lottery d.ponzi investment scheme

d.ponzi investment scheme

A chain letter is an example of the type of confidence game known as a(n) ____________________ sales scheme.

pyramid

A civil union is also known by the term a.cordial union. b.interstate marriage. c.same-sex marriage. d.common-law marriage.

c.same-sex marriage.

A consumer is an individual who acquired goods that he or she intends for _______________ a.business use. b.business or family use. c.personal, family, or household use. d.business, personal, family, or household use.

c.personal, family, or household use.

A contract creating a duty can prohibit delegation.

True

A contract in which ownership of (title to) goods transfers immediately from the seller to the buyer for a price is a contract to sell.

False

A contract or clause within a contract that is grossly unfair and oppressive is said to be ____________________.

unconscionable

A divorce or separation usually transforms a tenancy by the entireties into a a.tenancy in common. b.joint tenancy. c.tenancy in severalty. d.none of the above.

a.tenancy in common.

A fixed, original expression of a creative work can be protected by a trademark.

True

A form of co-ownership limited to husband and wife is known as a.separate property. b.ownership in severalty. c.tenancy by the entireties. d.joint tenancy.

c.tenancy by the entireties.

A form of ownership that carries the right of survivorship is a.joint tenancy. b.ownership in severalty. c.tenancy in common. d.all of these.

a.joint tenancy.

A fractional interest in a single good that is to remain undivided is not a valid sale under the UCC.

False

A gift given "causa mortis" is one given a.after the death of the donor. b.in anticipation of the death of the donor. c.to pay the mortician's fees. d.none of the above.

b.in anticipation of the death of the donor.

A good-faith purchaser is one who _______________ a.purchases materials for religious organizations. b.charges goods on faith that the money will be provided. c.believes all the claims of the seller. d.none of these.

d.none of these.

A man and woman who live together outside of marriage are said to _______________.

cohabitate

A merchant makes an implied warranty that the goods in which she or he normally deals shall be delivered to a buyer free of any third party's claims for patent, copyright, or trademark ____________________.

infringement

A no-fault marriage dissolution a.has to have a court order. b.may be initiated by either spouse. c.may be initiated only by the husband. d.may be initiated only by the wife.

b.may be initiated by either spouse.

A party injured by a breach of contract is not required to take any steps to minimize the harm done.

False

A party injured by a breach of contract is required by law to take reasonable steps to minimize the harm done, or to __________________.

mitigate the damages

A party to a contract may transfer to another person his or her rights to the benefits of the contract by means of an __________________.

assignment

A party who receives an unintended benefit from a contract between two other parties but cannot sue to enforce it is a(n) a.third-party beneficiary. b.donee beneficiary. c.incidental beneficiary. d.creditor beneficiary.

c.incidental beneficiary.

A patent is good for up to ____________________ years and is not renewable..

20

A person who knowingly marries a second spouse while still married to the first is a(n) _______________.

bigamist

A product liability suit may be based on _______________ a.breach of warranty. b.torts of fraud, negligence, or strict liability. c.both a and b. d.none of these.

c.both a and b.

A ready, willing, and able offer to perform an obligation is a tender.

True

A sale "on trial" or "on satisfaction" is also known as a sale ____________________.

on approval

A seller can enforce an oral contract for nonresalable goods if a.goods from third parties have been contracted for the order. b.manufacturing has substantially begun. c.both a and b. d.none of these.

c.both a and b.

A unique word, mark, or symbol identifying products is called a servicemark.

False

A void marriage may stem from any of the following except a.refusal to have children. b.an incestuous relationship. c.mental incompetence of a party or parties. d.bigamy.

a.refusal to have children.

A voluntary, court-enforceable agreement that stops an illegal or questionable practice is _______________ a.a cease-and-desist order. b.a consent order. c.a class action. d.a restitution order.

b.a consent order.

A warranty against infringement basically requires that the goods be fit for the ordinary purposes for which such goods are used.

False

A warranty is a statement about a product's qualities or performance and therefore is not governed by the UCC.

False

A(n) _______________ marriage results from a problem that existed from the beginning of the supposed union.

voidable

A(n) __________________ is the legal means by which a right is enforced or a right's violation is prevented or redressed.

remedy

A(n) ____________________ is a unique word, mark, or symbol that identifies a service and can be protected at law.

servicemark

Acceptance of goods occurs when a.the goods are used or resold. b.the buyer has indicated by words or conduct that the goods received are satisfactory. c.the buyer fails to reject the goods within a reasonable length of time. d.all of these.

d.all of these.

According to the UCC, goods do not include a.books and clothing. b.dogs. c.patents and copyrights. d.all of these.

c.patents and copyrights.

After Lora's mother died, the expensive items in her mother's estate were placed in a public sale and sold to the highest bidder. This type of sale is known as a(n) ____________________.

auction

Airbills, ship's bills, and bills of lading convey title to goods in storage and/or in transit and are issued by public transporters of goods called ____________________.

common carriers

All of the following except the right to __________________ is one of the parent's right to control the education of their children. a.decide where to send their child to school b.choose the curriculum their child is to follow in a public school c.home school their child d.send their child to a religious school

b.choose the curriculum their child is to follow in a public school

Allowing the public to use a trademark as a descriptive generic term or permitting competitors to refer to similar products by the trademark may cause the original owner to a.eliminate the trademark. b.lose the right to the trademark. c.increase income from the trademark. d.share ownership of the trademark.

b.lose the right to the trademark.

Along with minimum ages for marriage with or without parental permission, some states have laws specifying a minimum age for dating.

False

An annulment must be sought from an appropriate court to confirm the status of a void marriage.

False

An assignment does not need to be supported by __________________ to be legally effective, though it often is.

consideration

An assurance of quality or promise of performance explicitly made by the seller is _________ a.an express warranty. b.an implied warranty. c.a warranty of title. d.a warranty against infringement.

a.an express warranty.

An award of punitive damages seeks to place injured parties in the same financial position they would have been in if there had been no breach.

False

An exception to the law that mandates parents' obligations to support their children until they reach adulthood is a.if the parents have joint custody. b.if the parents are legally separated or divorced. c.if a minor child takes legal measures to become "emancipated." d.if a minor child is deemed "incorrigible."

c.if a minor child takes legal measures to become "emancipated."

An implied warranty of fitness for a particular purpose arises when the buyer _____________ a.personally selects the goods. b.relies on the seller's skill and judgment for the selection of the goods. c.both a and b. d.none of these.

b.relies on the seller's skill and judgment for the selection of the goods.

An innocent third party who in good faith buys some or all of the goods from a bulk transferee cannot get a good title.

False

An insurable interest arises in the buyer at the time _______________ a.the goods are paid for. b.the goods are identified to the buyer's sales contract. c.the risk of loss transfers to the buyer. d.all of these

b.the goods are identified to the buyer's sales contract.

Any kind of property may be acquired and transferred by contract.

True

Any person who innocently buys stolen goods from a thief receives title as well as possession.

False

Assignment of contractual rights usually is made a.voluntarily by the obligor. b.voluntarily by the assignee. c.voluntarily by the assignor. d.by the courts.

c.voluntarily by the assignor.

Auction sales are "without reserve" unless specifically announced in advance to be "with reserve."

False

Backyard Fun Inc. purchases swing sets and slides from manufacturer Swing City at wholesale cost and then resells them to consumers like Bruce. Once Bruce pays for the swing set and slide and they are delivered, Swing City can not take it from Bruce's backyard because Backyard Fun failed to pay its manufacturer's invoice. This implied seller's warranty that assures Bruce that the merchandise is free of third party claims is known as the warranty against ____________________.

encumbrances

Basically, personal property is defined as anything that is not ____________________ property.

real

By nature or trade usage, each unit of fungible goods may be regarded as equal to every other unit.

True

Casual sellers a.may be required to be licensed. b.only sell occasionally. c.only sell casual items. d.are usually subjected to special taxation.

b.only sell occasionally.

Casual sellers are also considered merchants.

False

Caveat emptor means "let the seller beware."

False

Charles owns several pieces of matching highly valuable antique, turn-of-the-century furniture. He wants to sell the furniture and has stipulated that all the pieces of the furniture set are to remain together. This type of sale is known as a sale of a(n) ____________________ interest..

undivided

CIF stands for ____________________.

cost,insurance,freight

Consideration for a sale or contract to sell goods may be expressed in the form of a.barter. b.money. c.services. d.all of these.

d.all of these.

Contracts are discharged by a.complete performance of the terms of the contract. b.substantial performance of the terms of the contract. c.substandard performance of the terms of the contract. d.failure to complete performance of the terms of the contract.

a.complete performance of the terms of the contract.

Contractual rights may not be assigned a.if the obligor does not agree to the terms. b.if there is no consideration. c.if performance requirements would be materially changed as a consequence. d.in writing.

c.if performance requirements would be materially changed as a consequence.

Copyrights and trademarks are examples of a type of intangible property known as ____________________ property.

intellectual

Corrective advertising may be ordered by the FTC as a sanction for false and misleading advertising.

True

Drew owns and operates a glass-blowing shop. According to the UCC, what must Drew do if he decides to sell his complete inventory of glass including glass-making supplies and glass-making equipment? a.notify all his creditors b.pay his creditors' claims against him c.notify the third party buyer of all the creditors so the third party can begin making payments d.both a and b

d.both a and b

During their five-year marriage Brent and Brenda purchased, co-owned, and operated a 20-unit apartment building. Their recent divorce changed this tenancy by the entireties into a(n) _________________________.

tenancy in common

Even if a party against whom enforcement of an oral contract is sought admits in legal pleadings or testimony that he or she agreed to part or all of a contract, a signed writing is still necessary to satisfy the Statute of Frauds.

False

Exaggerated sales talk such as "best on the market" or "incredible quality" is called ____________________.

puffing

FOB means _______________ a.Freight on Board. b.Free on Boat. c.Free on Board. d.none of the above.

c.Free on Board.

For ownership of goods to be transferred in a sale, the goods must be both existing and identified to the transaction.

True

Fraudulent grounds for marriage include a.incompatibility. b.inability to have children. c.job relocation. d.either spouse lying to the other about a past marriage.

d.either spouse lying to the other about a past marriage.

Gathering shells on a public beach is acquisition by a.accession. b.adaptation. c.adoption. d.occupancy.

d.occupancy.

Generally, a party may assign contractual rights to another a.for claims for damages to personal injuries. b.provided performance will not be materially changed. c.as rights to personal services, especially those skilled in nature. d.as assignments of future wages, as limited by state statutes.

b.provided performance will not be materially changed.

Generally, impossibility of performance refers to a.an obligor's personal inability to perform. b.extreme external conditions. c.an obligor's inability to please the other party. d.an obligor's refusal to perform.

b.extreme external conditions.

Generally, impossibility of performance refers to an obligor's personal inability to perform.

False

Hilda enjoys taking her children to the local ice cream parlor. The implied assurance that the ice cream she purchases is wholesome and fit for human consumption is an example of a(n) _______________ a.express warranty. b.strict liability. c.warranty of fitness for consumption. d.warranty of merchantability.

d.warranty of merchantability.

If a buyer of a bulk transfer fails to notify the seller's creditors of the forthcoming transfer, the creditors may _______________ a.make claims against the inventory and equipment after the buyer takes possession. b.make the sale null and void. c.either a or b. d.none of these.

a.make claims against the inventory and equipment after the buyer takes possession.

If a contract does not say when the duty must be performed, then the duty must be performed a.whenever the party is able to complete the performance. b.within 30 days of signing the contract. c.within one year of signing the contract. d.within a reasonable time.

d.within a reasonable time.

If a contract states "time is of the essence," then a.failure to perform by that date would constitute a major breach. b.failure to perform by that date would constitute a minor breach. c.a court would look at the subject matter of the contract to determine if it is so. d.a court would rule that it stands because the words were placed in the contract.

c.a court would look at the subject matter of the contract to determine if it is so.

If a contractual right is transferred, this does not change the legal rights of the other party to the contract.

True

If a party admits in legal testimony that he or she agreed to part or all of an oral contract governed by the Statute of Frauds, the contract would be a.binding to the extent admitted. b.still null and void. c.totally enforceable. d.none of these.

a.binding to the extent admitted.

If a person is injured as a result of an unreasonably dangerous or defective product, how will he or she most likely recover damages for the injury? a.hold the retailer of the product strictly liable b.hold the wholesaler strictly liable c.hold the manufacturer strictly liable d.all of these

d.all of these

If a retailer discovers that a product being sold is unsafe that information must be reported to the Consumer Preventative Safety Council.

False

If an auction sale is conducted ____________________ the auctioneer cannot withdraw the goods and must sell them to the highest bidder.

without reserve

If an obligation requires the payment of money, rejection of tender to pay the money a.discharges the debt. b.prevents the creditor from collecting later. c.relieves the debtor of court costs or future interest charges. d.will discharge the obligation of the one offering to perform.

c.relieves the debtor of court costs or future interest charges.

If both parties agree to end their engagement, the binding contract that resulted from their engagement is _______________.

annulled

If fraud or an intentional tort is involved in a breach of contract, the courts will award ___________ damages. a.compensatory money b.consequential money c.punitive d.liquidated money

c.punitive

If only one party wants out of the marriage contract, a.a breach-of-promise suit may be brought by the other party in some states. b.all gifts exchanged during the relationship must be returned. c.the woman always gets to keep the engagement ring. d.the courts require the marriage to take place.

a.a breach-of-promise suit may be brought by the other party in some states.

If parents tell their minor child not to date or not to see a specific person, a.they can enforce that order only with "reasonable force." b.they can have the other child arrested. c.they can obtain a restraining order. d.all of the above.

a.they can enforce that order only with "reasonable force."

If the buyer has had adequate opportunity to inspect the goods, acceptance may be indicated by a failure to reject them within a reasonable time.

True