Business Law Practice Questions
MULTIPLE CHOICE
1.
Paul filed a lawsuit for false imprisonment against Dan’s Bookstore. During a visit to
Dan’s Bookstore, Dan stopped Paul as he left the store. Dan accused Paul of stealing a book
from the store. After briefly looking into Paul’s shopping bag, Dan determined that Paul did not
shoplift. He apologized to Paul and released him. On these facts, Dan will likely:
a. win the case, because the shopkeepers’ privilege statute gives store merchants
unconditionalimmunity (protection) from such lawsuits.
b. lose the case, because Paul did not shoplift.
c. win the case, but only if a court or trier of fact concludes that Dan had reasonable cause
to believe Paul may have shoplifted, detained him for a reasonable time, and in a
reasonable manner.
d. lose the case, because Dan did not have a warrant.
2.
Bonds wrote McGuire, “I will sell you my house and lot at 419 West Lombard Street,
San Francisco, California for $950,000 payable upon merchantable deed, deal to be completed
within 60 days of the date of your acceptance.” Assuming that Bonds’ letter contains terms
which are deemed sufficiently certain and definite, which of the following statements is correct?
a. Bonds’ letter is not an offer unless Bonds intended it to be an offer.
b. Bonds’ letter is not an offer unless McGuire thought Bonds intended to make an offer.
c. Bonds’ letter is an offer if a reasonable person with full knowledge of the circumstances
would be justified in thinking it was intended as an offer.
d. Bonds’ letter is not a offer unless both Bonds and McGuire considered it as an offer.
3.
Iverson Jewelers wrote a letter to Miller, “We have received an exceptionally fine self
winding Rolox watch which we will sell to you at a very favorable price.”
a. The letter is an offer to sell.
b. A valid offer cannot be made by letter.
c. The letter contains a valid offer which will terminate within a reasonable time.
d. The letter lacks one of the essential elements of an offer.
4.
Don was negligently driving south on Merdock Avenue when his car rear-ended a car
driven by Patty. The force of the impact forced Patty to rear-end Terry’s car. In turn, the force of
the second impact caused Terry’s car to hit a lamppost, which then fell on a house owned by
Paul. The force of the impact scared Paul, causing him to immediately have a heart attack. Paul
sues Don for negligence. If Paul recovers, the most likely reason is:
a. Paul was able to prove that Don proximately caused Paul’s injuries.
b. Paul was able to prove that the damages he suffered were actually caused by Don.
c. Paul was able to prove that Don breached a duty of due care owed by Don to Paul.
d. Paul was able to prove all of the above (a, b & c).
5.
Sammy agreed to sell and Larry agreed to buy Sammy’s car for $400, payable upon
delivery. Sammy delivered and left the car with Larry. However, Larry failed to pay Sammy the
$400. After eight years had passed following the delivery and acceptance of the car by Larry,
Sammy sued Larry in state court for failure to pay him the $400. Based only on the above stated
facts, which of the following statement is most accurate? Assume the UCC applies and the
statute of limitations for oral contracts is two years and for written contracts is four years.
a. No contract was ever created between Sammy and Larry.
b. A contract was created but likely not enforceable because the statute of limitations has
expired.
c. A contract was created, but it is only enforceable if it is in writing.
d. A contract was created and is enforceable.
6.
Bill purchased a can of Sipep from the Ajax Minimart. After he finished drinking the
Sipep, Bill noticed that the can contained dead insects stuck on the inside bottom of the can. In a
strict product liability tort action against Ajax, Bill must prove, among other things, that:
a. Ajax is a merchant selling Sipep.
b. Ajax knew or should have known of the defective condition.
c. Ajax had prior notice of other similar problems with Sipep products.
d. Ajax actually placed the dead insects into the can.
7.
Under which of the following situations does strict product liability apply?
a. Sale of a defective and unreasonably dangerous product.
b. Manufacture of a defective and unreasonably dangerous product.
c. Both (a) and (b) are correct.
d. Neither (a) nor (b) are correct.
8.
On May 1, Back-Talk Computer Store offerd to sell five (5) computer servers to
Gatekeeper Company for $5,000.00 each, delivery to be on May 30. Later that day (May 1),
Gatekeeper responded that it would buy the computers only if they were delivered within three
business days. Back-Talk notified Gatekeeper the next day, May 2, that it would not be able to
deliver the goods within the time requested by Gatekeeper. Which of the following is true
regarding Back-Talk’s offer?
a. There is no contract between Back-Talk and Gatekeeper.
b. Gatekeeper’s additional term became part of the contract, so Back-Talk is obligated to
deliver the goods within three business days.
c. Back-Talk’s offer was accepted by Gatekeeper
d. Gatekeeper may later accept Back-Talk’s May 1 offer if it is then willing to accept
delivery in four weeks.
9.
The body of law which establishes rights between persons and provides for redress for
violation of those rights is known as:
a. Criminal Law.
b. Civil Law.
c. The Uniform Commercial Code.
d. Stare decisis.
10.
Donny threw a knife at Sally, intending to injure her severely. However, Donny missed
Sally. Sally saw the knife just as it whizzed by her head, missing it by about one inch. As a
result, Sally was very scared. Sally sued Donny for assault and battery. Which of the following is
most correct?
a. Donny will be liable for battery, but not assault.
b. Donny will be liable for assault, but not battery.
c. Donny will be liable for assault and for battery.
d. Donny will not be liable for either assault or battery because this is only a criminal
matter.
11.
In most states the following types of contracts are within the statute of frauds.
a. Contracts for the sale of an interest in personal property.
b. Contracts that can be performed within a year from the date of their formation.
c. Contracts for the sale of goods.
d. Contract sfor the sale of goods for a price of $500 or more.
12.
On May 1, 2005, Eckerly Realty Inc. mailed a written offer to Masse for the sale of an
office building. The offer included an express term that it would expire on June 30, 2005 if the
acceptance was not delivered into the hands of the offeror by the expiration date. On June 30,
2005 at 8:00 a.m., Masse sent a written acceptance to Eckerly via Masse’s personal messenger.
However, the messenger was not able to deliver the acceptance until July 1, 2005. On July 2,
2005, Eckerly contacted Masse, informing him that the acceptance had been delivered one day
late. As a result, Eckerly refused to honor the acceptance. Which of the following is the most
correct statement?
a. There is no contract between Eckerly and Masse. However, if Masse would have mailed
the acceptance on June 30, 2005, a contract would have been created.
b. There is a contract between Eckerly and Masse. The moment that Masse gave the
acceptance to the messenger, a contract was formed because acceptances are valid
immediately upon dispatch.
c. There is a contract between Eckerly and Masse. The fact that the acceptance arrived only
one day late is of no significance.
d. There is no contract between Eckerly and Masse.
13.
Which of the following statements is correct concerning the “reasonable person” standard
in tort law?
a. The reasonable person standard varies from person to person.
b. The reasonable person standard focuses on the defendant’s subjective mental state rather
than on the defendant’s behavior.
c. A person with a physical disability must act as would a reasonable person with the same
disability.
d. A person with a mental disability must act as would a person with the same mental
disability.
14.
Robert makes the following statement while negotiating the sale of his car, “This is the
sharpest car on the market.” His statement may support a claim for:
a. misrepresentation.
b. fraud.
c. fraud and misrepresentation.
d. none of the above.
15.
Paula rented an apartment to Dave for $500 per month. Paula and Dave signed a one-year
lease, to be effective beginning January 1st. After three months, Dave decided that he did not
like the apartment. He gave Paula a 30-day written notice, stating that he would vacate the rental
unit at the end of the thirty days, which was April 30th. Upon receipt of Dave’s notice, Paula
made reasonable efforts to find a new tenant. Nevertheless, the apartment remained vacant from
May 1st through June 30th Paula re-rented the apartment beginning July 1st . for one year. Paula
sues save in small claims court. What is the likely outcome?
a. Paula is entitled to the balance of the lease, or $4,000, because Dave did not have a valid
reason to breach the contract.
b. Paula is entitled to nothing, because Dave gave Paula thirty-days written notice.
c. Paula is entitled to $1,000, because she tried to find another tenant immediately upon
learning of Dave’s intent to breach the contract, but was unable to re-lease the apartment
until July 1 st.
d. Paula is entitled to $500, which represents one-month’s rent.
16.
Tom and Jerry entered into a contract whereby Tom agreed to sell Jerry $1,000 worth of
heroin, an illegal substance. This is an example of a:
a. quasi contract.
b. void contract.
c. voidable contract.
d. secondary party beneficiary contract.
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MULTIPLE CHOICE
1.
Paul filed a lawsuit for false imprisonment against Dan’s Bookstore. During a visit to
Dan’s Bookstore, Dan stopped Paul as he left the store. Dan accused Paul of stealing a book
from the store. After briefly looking into Paul’s shopping bag, Dan determined that Paul did not
shoplift. He apologized to Paul and released him. On these facts, Dan will likely:
a. win the case, because the shopkeepers’ privilege statute gives store merchants
unconditionalimmunity (protection) from such lawsuits.
b. lose the case, because Paul did not shoplift.
c. win the case, but only if a court or trier of fact concludes that Dan had reasonable cause
to believe Paul may have shoplifted, detained him for a reasonable time, and in a
reasonable manner.
d. lose the case, because Dan did not have a warrant.
2.
Bonds wrote McGuire, “I will sell you my house and lot at 419 West Lombard Street,
San Francisco, California for $950,000 payable upon merchantable deed, deal to be completed
within 60 days of the date of your acceptance.” Assuming that Bonds’ letter contains terms
which are deemed sufficiently certain and definite, which of the following statements is correct?
a. Bonds’ letter is not an offer unless Bonds intended it to be an offer.
b. Bonds’ letter is not an offer unless McGuire thought Bonds intended to make an offer.
c. Bonds’ letter is an offer if a reasonable person with full knowledge of the circumstances
would be justified in thinking it was intended as an offer.
d. Bonds’ letter is not a offer unless both Bonds and McGuire considered it as an offer.
3.
Iverson Jewelers wrote a letter to Miller, “We have received an exceptionally fine self
winding Rolox watch which we will sell to you at a very favorable price.”
a. The letter is an offer to sell.
b. A valid offer cannot be made by letter.
c. The letter contains a valid offer which will terminate within a reasonable time.
d. The letter lacks one of the essential elements of an offer.
4.
Don was negligently driving south on Merdock Avenue when his car rear-ended a car
driven by Patty. The force of the impact forced Patty to rear-end Terry’s car. In turn, the force of
the second impact caused Terry’s car to hit a lamppost, which then fell on a house owned by
Paul. The force of the impact scared Paul, causing him to immediately have a heart attack. Paul
sues Don for negligence. If Paul recovers, the most likely reason is:
a. Paul was able to prove that Don proximately caused Paul’s injuries.
b. Paul was able to prove that the damages he suffered were actually caused by Don.
c. Paul was able to prove that Don breached a duty of due care owed by Don to Paul.
d. Paul was able to prove all of the above (a, b & c).
5.
Sammy agreed to sell and Larry agreed to buy Sammy’s car for $400, payable upon
delivery. Sammy delivered and left the car with Larry. However, Larry failed to pay Sammy the
$400. After eight years had passed following the delivery and acceptance of the car by Larry,
Sammy sued Larry in state court for failure to pay him the $400. Based only on the above stated
facts, which of the following statement is most accurate? Assume the UCC applies and the
statute of limitations for oral contracts is two years and for written contracts is four years.
a. No contract was ever created between Sammy and Larry.
b. A contract was created but likely not enforceable because the statute of limitations has
expired.
c. A contract was created, but it is only enforceable if it is in writing.
d. A contract was created and is enforceable.
6.
Bill purchased a can of Sipep from the Ajax Minimart. After he finished drinking the
Sipep, Bill noticed that the can contained dead insects stuck on the inside bottom of the can. In a
strict product liability tort action against Ajax, Bill must prove, among other things, that:
a. Ajax is a merchant selling Sipep.
b. Ajax knew or should have known of the defective condition.
c. Ajax had prior notice of other similar problems with Sipep products.
d. Ajax actually placed the dead insects into the can.
7.
Under which of the following situations does strict product liability apply?
a. Sale of a defective and unreasonably dangerous product.
b. Manufacture of a defective and unreasonably dangerous product.
c. Both (a) and (b) are correct.
d. Neither (a) nor (b) are correct.
8.
On May 1, Back-Talk Computer Store offerd to sell five (5) computer servers to
Gatekeeper Company for $5,000.00 each, delivery to be on May 30. Later that day (May 1),
Gatekeeper responded that it would buy the computers only if they were delivered within three
business days. Back-Talk notified Gatekeeper the next day, May 2, that it would not be able to
deliver the goods within the time requested by Gatekeeper. Which of the following is true
regarding Back-Talk’s offer?
a. There is no contract between Back-Talk and Gatekeeper.
b. Gatekeeper’s additional term became part of the contract, so Back-Talk is obligated to
deliver the goods within three business days.
c. Back-Talk’s offer was accepted by Gatekeeper
d. Gatekeeper may later accept Back-Talk’s May 1 offer if it is then willing to accept
delivery in four weeks.
9.
The body of law which establishes rights between persons and provides for redress for
violation of those rights is known as:
a. Criminal Law.
b. Civil Law.
c. The Uniform Commercial Code.
d. Stare decisis.
10.
Donny threw a knife at Sally, intending to injure her severely. However, Donny missed
Sally. Sally saw the knife just as it whizzed by her head, missing it by about one inch. As a
result, Sally was very scared. Sally sued Donny for assault and battery. Which of the following is
most correct?
a. Donny will be liable for battery, but not assault.
b. Donny will be liable for assault, but not battery.
c. Donny will be liable for assault and for battery.
d. Donny will not be liable for either assault or battery because this is only a criminal
matter.
11.
In most states the following types of contracts are within the statute of frauds.
a. Contracts for the sale of an interest in personal property.
b. Contracts that can be performed within a year from the date of their formation.
c. Contracts for the sale of goods.
d. Contract sfor the sale of goods for a price of $500 or more.
12.
On May 1, 2005, Eckerly Realty Inc. mailed a written offer to Masse for the sale of an
office building. The offer included an express term that it would expire on June 30, 2005 if the
acceptance was not delivered into the hands of the offeror by the expiration date. On June 30,
2005 at 8:00 a.m., Masse sent a written acceptance to Eckerly via Masse’s personal messenger.
However, the messenger was not able to deliver the acceptance until July 1, 2005. On July 2,
2005, Eckerly contacted Masse, informing him that the acceptance had been delivered one day
late. As a result, Eckerly refused to honor the acceptance. Which of the following is the most
correct statement?
a. There is no contract between Eckerly and Masse. However, if Masse would have mailed
the acceptance on June 30, 2005, a contract would have been created.
b. There is a contract between Eckerly and Masse. The moment that Masse gave the
acceptance to the messenger, a contract was formed because acceptances are valid
immediately upon dispatch.
c. There is a contract between Eckerly and Masse. The fact that the acceptance arrived only
one day late is of no significance.
d. There is no contract between Eckerly and Masse.
13.
Which of the following statements is correct concerning the “reasonable person” standard
in tort law?
a. The reasonable person standard varies from person to person.
b. The reasonable person standard focuses on the defendant’s subjective mental state rather
than on the defendant’s behavior.
c. A person with a physical disability must act as would a reasonable person with the same
disability.
d. A person with a mental disability must act as would a person with the same mental
disability.
14.
Robert makes the following statement while negotiating the sale of his car, “This is the
sharpest car on the market.” His statement may support a claim for:
a. misrepresentation.
b. fraud.
c. fraud and misrepresentation.
d. none of the above.
15.
Paula rented an apartment to Dave for $500 per month. Paula and Dave signed a one-year
lease, to be effective beginning January 1st. After three months, Dave decided that he did not
like the apartment. He gave Paula a 30-day written notice, stating that he would vacate the rental
unit at the end of the thirty days, which was April 30th. Upon receipt of Dave’s notice, Paula
made reasonable efforts to find a new tenant. Nevertheless, the apartment remained vacant from
May 1st through June 30th Paula re-rented the apartment beginning July 1st . for one year. Paula
sues save in small claims court. What is the likely outcome?
a. Paula is entitled to the balance of the lease, or $4,000, because Dave did not have a valid
reason to breach the contract.
b. Paula is entitled to nothing, because Dave gave Paula thirty-days written notice.
c. Paula is entitled to $1,000, because she tried to find another tenant immediately upon
learning of Dave’s intent to breach the contract, but was unable to re-lease the apartment
until July 1 st.
d. Paula is entitled to $500, which represents one-month’s rent.
16.
Tom and Jerry entered into a contract whereby Tom agreed to sell Jerry $1,000 worth of
heroin, an illegal substance. This is an example of a:
a. quasi contract.
b. void contract.
c. voidable contract.
d. secondary party beneficiary contract.
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