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Liberty University BUSI 301 Quiz 2 Exam correct answers over 300 questions

Quiz covering key legal principles in business, including contracts and regulatory compliance.

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    Liberty University BUSI 301 Quiz 2 Exam correct answers over 300 questions. Ally, a minor, purchases a car from a used - car dealer. The law allows minors the right to cancel a contract until the time the minor turns 18. The contract between Ally and the dealer is: ABC Land Co. is negotiating the sale of an office building to Mega Co. Which laws will govern the contract for the sale of th e building? Offers that the offeree partly performed or detrimentally relied on are: If the offer specifies no time limit in which to accept: Generally, courts do enforce a strict compliance standard for contract conditions. Incidental beneficiaries are known about when the contract is entered into. Just as in common law, the UCC recognizes the concept of anticipatory repudiation, allowing a breach to be declared prior to performance being due. In a shipping contract, the risk of loss passes to the buyer when: What is the test to determine whether an entity has monopoly power? Proof of a seller's economic power in the market is necessary to prove an antitrust violation under the Clayton Act A promise that can be accepted only by the performance of the person to whom it is offered is an example of: A unilateral contract is a promise that can be accepted only by performance. Most contracts require a specific format or ceremony. Most contracts, while they require evidence that the elements are met, do not require a specific format or ceremony. The mailbox rule provides that the acceptance of an offer is generally effective upon receipt of the acceptance when sent in a commercially reasonable manner. Acceptance of an offer is generally effective upon dispatch of the acceptance when sent in a commercially reasonable manner. Which of the following promises ordinarily need not be in writing to be enforceable? A contract with a personal trainer is for services and is not covered under the statute of frauds. Which of the following involves a third - party substitution? In a novation a third party substitutes for one of the original contracting parties. When an assignment is made, the assignee has the right to reform the contract and change the obligor's rights and duties as t he assignee wishes. The assignment is invalid if the contract is materially altered such that the obligor's duties are increased and additional b urdens or risks are created. UCC gap fillers will not be used and are not applicable to contracts when the contract clearly specifies a contract term or c ondition. If the parties clearly state their terms and conditions, the UCC need not fill in gaps to make the contract enforceable. The UCC permits a contract to be considered formed entirely by the parties' conduct even if no definite time of formation can be determined. The UCC lowers the bar for formation of contracts by allowing an enforceable contract to arise in any sufficient manner, such as examining the parties' conduct. An entity's share of the relevant market is used to determine whether the entity has a monopoly. The Sherman Act does not prevent an entity from becoming a monopoly. It outlaws affirmative action toward monopolizing. A naturally created monopoly does not violate the law. Aimee goes online and orders a pair of jeans, three T - shirts, and a pair of boots. This is an example of: This is an example of a divisible contract because it can be broken into independent parts and each part is able to stand alo ne. A unilateral contract is formed by an exchange of promises. A bilateral contract is formed by an exchange of promises. Larry has had a few beers and is starting to get a bit drunk. He isn't acting strange, and in conducting conversations with o thers he's slurring only an occasional word or two. Larry, should he enter into a contract in this condition, would be considered mental ly incompetent and his contract would be void. Larry is not unable to understand or unable to act in a reasonable manner, so his contract would likely be valid or, at most, voidable. An offer may be terminated in all but which of the following ways? An offer may be terminated by action of the parties in one of three ways: (1) revocation, in which the offeror withdraws the offer prior to acceptance; (2) rejection, in which the offeree rejects the offer; and (3) counteroffer, in which the offeree rejects the ori ginal offer and proposes a new offer with different terms. Offers may also be terminated by operation of law. In a delegation situation, the nondelegating party is called the: When an accord and satisfaction is agreed to, the original obligation subject to the accord is immediately discharged. The International Chamber of Commerce abbreviation indicating that goods are to be picked up by the buyer and not delivered i s: In American Needle Inc . v. National Football League, the 32 football teams were treated as a single entity because they belong to the same sports league. The court order for Microsoft to break apart into multiple entities in U.S. v. Microsoft was overturned on appeal. Unjust enrichment is a theory used to impose an obligation in the absence of an actual agreement. Divisible contracts are often referred to as severable contracts in many states. Jon owns two cars. He says to Rachel, "I'll sell you either car for $8,000." This is a valid offer. Each of the following is a discharge by mutual consent except: Frustration of purpose discharges a contract by operation of law. A party to a contract may be discharged from performance due to operation of law if the other party unilaterally alters the c ontract. UCC risk of loss provisions will govern the terms of a contract even if the parties have specified risk allocation in the con tract. The test for determining a monopoly under the Sherman Act is the entity's share of the relative market. There is a bright - line test for determining the amount of market share necessary to be considered a monopoly. Mike is walking through a parking lot and finds Kathy lying unconscious. He puts her in his car and takes her to the hospital . The hospital saves her life, and when she becomes conscious, it presents her with a bill. Real estate deeds and mortgages that require a seal to be enforceable are considered: The term option contract refers to the choices that one has when entering into a contract. On February 1, Frank's Fedora Manufacturers sends an offer to Metropolitan Outfitters by letter with all price, quality, quan tity, and delivery terms clearly stated, indicating that the offer will remain open until October 1. On September 1 Metropolitan sends an acceptance of the offer to Frank's with no material alterations to any of the stated terms in the offer. The acceptance makes the contract valid and enforceable. Your cousin, who is a CPA, calls you and says that a client paid him in diamonds and he's selling them. If you purchase one o f those diamonds, at the time of the sale your cousin would be considered a merchant of those diamonds. The per se standard applies to nonprice vertical restraints. The courts use the rule of reason standard. Which act does the Robinson - Patman Act amend?

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    An offer of a reward, if it is fulfilled, forms: All of the following are necessary elements of a contract except: Which of the following is not required for promissory estoppel to apply? Bud calls Lou and says, "I'll sell you my car for a thousand bucks, interested?" Lou says, "I'll look it up on the Internet. If the Blue Book price is close, I'll pay you $1,000 in the morning." At sunrise Lou shows up with $1000. In which of the following scenarios would enforcement of specific performance be appropriate? If a seller has delivered nonconforming goods that have been rejected, upon notice of an intent to cure, the seller automatic ally then has 15 days to deliver conforming goods. Absent specific agreements between the parties, the reasonableness requirement of the UCC governing delivery of goods require s each of the following except: Circumstantial evidence is not enough to show a meeting of the minds. The Clayton Act was enacted to limit the provisions of the Sherman Act. Any meeting of the minds resulting in mutual assent to do or refrain from doing something is called a contract. Amanda, a recent university graduate, needed a car to get to her new job. To help Amanda secure a loan for the car, Ted, a fr iend, agreed to pay the loan should Amanda default. Ted's promise is enforceable as long as he goes to the bank, declares his promi se to guarantee Amanda's loan in front of witnesses, and shakes hands on the deal, giving his word. An option contract is a contract that gives one of the parties a choice of consideration to accept. When a party breaches a contract, the nonbreaching party always has the option of seeking legal or equitable remedies. An anticipatory repudiation is allowed when a party has verifiable knowledge that the other party will not or cannot perform. Courts do not permit speculation or mere supposition to support an anticipatory repudiation. Beth has a contract with Annie in which Annie is to deliver 1,000 hand - decorated beverage holders in 60 days. When Beth calls the Psychic Hotline for her weekly reading, the psychic informs her that she has entered into a contract and the other party will not perform all the conditions and specifications in accordance with the agreement. Beth may sue for an anticipatory repudiation. Shovels R Us sends a purchase order to Acme Snow Shovel Inc., for 500 shovels to be delivered by September 30, 2014, in time for the winter season. Acme returns an acknowledgment form indicating that the shovels will be delivered on March 1, 2015. The acknowledgment letter forms a valid contract. Which economist/philosopher is cited in support of frequent meetings being circumstantial evidence of anticompetitive collusi on? The U.S. Supreme Court held that the Sherman Act applies to commercial agreements in which the parties acted in ________ mann er. Express contracts arise from the parties' conduct. In general, contracts for the sale of goods are governed by: Contractual consideration is defined as the thought process a party uses to decide whether or not to accept the offer and ent er into a contract. In an assignment or delegation, any third - party rights or duties occur after the contract is formed. In Merchants Acceptance Inc., v. Jamison, Jamison ordered encyclopedias and the contract specified that delivery was to be made to Jamison's home. Instead, the encyclopedias were delivered to her post office box and she never received them. She refuses to pay for them and is sued. Normally, the buyer's offer in a commercial transaction takes the form of: Price - fixing is a clear example of a per se violation. Antitrust legislation was enacted in response to the robber barons of the late 19 th century. An agreement between two adults to pay $300 cash for a bicycle is an example of a contract that is: Void contracts are seemingly valid contracts that one party has the right to declare void. In Leonard v. PepsiCo Inc., the court ruled against Leonard and refused to enforce the purchase of a Harrier jet because: With regard to the court, adequacy of consideration means: Patios R Us contracts with Karl's Concrete to have 35 yards of concrete delivered to a job site it is working on. Payment is to be made 30 days after delivery. Five days after the concrete is delivered, Patios R Us files for bankruptcy and the filing is accepte d by the court. Karl's cannot sue to enforce the contract and receive payment. When a party successfully sues for an equitable remedy for a breach of contract, that party does not receive a monetary award . The 2003 revisions to the UCC have been adopted by only about half of the states. Adam Smith's book, The Wealth of Nations, is a source of support for some elements of antitrust law. Horizontal restraints are agreements between: 1. value: 10.00 points Ally, a minor, purchases a car from a used - car dealer. The law allows minors the right to cancel a contract until the time the minor turns 18. The contract between Ally and the dealer is: a voidable contract. a void contract. an unenforceable contract. a valid contract. 2. value: 10.00 points

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    ABC Land Co. is negotiating the sale of an office building to Mega Co. Which laws will govern the contract for the sale of the building? state statutory law based on the Uniform Commercial Code state common law the Uniform Commercial Code hybrid laws 3. value: 10.00 points Offers that the offeree partly performed or detrimentally relied on are: revocable offers. irrevocable offers. option offers. firm offers. 4. value: 10.00 points If the offer specifies no time limit in which to accept: the offeree has 10 days to accept. the offeree has an unlimited time to accept as long as a revocation has not been made. the offeree has a reasonable time to accept. the offeree has 30 days to accept. 5. value: 10.00 points Generally, courts do enforce a strict compliance standard for contract conditions. True False 6. value: 10.00 points Incidental beneficiaries are known about when the contract is entered into. True

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    False 7. value: 10.00 points Just as in common law, the UCC recognizes the concept of anticipatory repudiation, allowing a breach to be declared prior to performance being due. True False 8. value: 10.00 points In a shipping contract, the risk of loss passes to the buyer when: the goods are delivered to the buyer. the goods are en route and at least halfway to the buyer. the contract is signed or finalized. the goods are delivered to the carrier. 9. value: 10.00 points What is the test to determine whether an entity has monopoly power? vertical integration test bright - line test share of the relevant market rule of reason 10. value: 10.00 points Proof of a seller's economic power in the market is necessary to prove an antitrust violation under the Clayton Act. True False 1. award: 10 out of 10.00 points A promise that can be accepted only by the performance of the person to whom it is offered is an example of:

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    a unilateral contract. a quasi - contract. an implied contract. a bilateral contract. A unilateral contract is a promise that can be accepted only by performance. 2. award: 10 out of 10.00 points Most contracts require a specific format or ceremony. True False Most contracts, while they require evidence that the elements are met, do not require a specific format or ceremony. 3. award: 0 out of 10.00 points The mailbox rule provides that the acceptance of an offer is generally effective upon receipt of the acceptance when sent in a commercially reasonable manner. True False Acceptance of an offer is generally effective upon dispatch of the acceptance when sent in a commercially reasonable manner. . award: 10 out of 10.00 points Which of the following promises ordinarily need not be in writing to be enforceable? promises made as a part of a prenuptial agreement a $1,000 agreement with a personal trainer for 10 sessions a lease of a warehouse for 24 months an agreement to sell a car for $1,500 A contract with a personal trainer is for services and is not covered under the statute of frauds. 5. award: 10 out of 10.00 points

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    Which of the following involves a third - party substitution? novation accord and satisfaction rescission substitute agreement/modification In a novation a third party substitutes for one of the original contracting parties. 6 . award: 10 out of 10.00 points When an assignment is made, the assignee has the right to reform the contract and change the obligor's rights and duties as the assignee wishes. True False The assignment is invalid if the contract is materially altered such that the obligor's duties are increased and additional burdens or risks are created. 7. award: 10 out of 10.00 points UCC gap fillers will not be used and are not applicable to contracts when the contract clearly specifies a contract term or condition. True False If the parties clearly state their terms and conditions, the UCC need not fill in gaps to make the contract enforceable. 8. award: 10 out of 10.00 points The UCC permits a contract to be considered formed entirely by the parties' conduct even if no definite time of formation can be determined. True False The UCC lowers the bar for formation of contracts by allowing an enforceable contract to arise in any sufficient manner, such as examining the parties' conduct. 9.

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    award: 10 out of 10.00 points What is the test to determine whether an entity has monopoly power? rule of reason share of the relevant market vertical integration test bright - line test An entity's share of the relevant market is used to determine whether the entity has a monopoly. 10. award: 0 out of 10.00 points The Sherman Act does not prevent an entity from becoming a monopoly. True False It outlaws affirmative action toward monopolizing. A naturally created monopoly does not violate the law. 1. award: 10 out of 10.00 points Aimee goes online and orders a pair of jeans, three T - shirts, and a pair of boots. This is an example of: a formal contract. a quasi - contract. a divisible contract. an entire contract. This is an example of a divisible contract because it can be broken into independent parts and each part is able to stand alone. 2. award: 10 out of 10.00 points A unilateral contract is formed by an exchange of promises. True

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    False A bilateral contract is formed by an exchange of promises. 3. award: 10 out of 10.00 points Larry has had a few beers and is starting to get a bit drunk. He isn't acting strange, and in conducting conversations with others he's slurring only an occasional word or two. Larry, should he enter into a contract in this condition, would be considered mentally incompetent and his contract would be void. True False Larry is not unable to understand or unable to act in a reasonable manner, so his contract would likely be valid or, at most, voidable. 4. award: 10 out of 10.00 points An offer may be terminated in all but which of the following ways? counteroffer acceptance rejection revocation An offer may be terminated by action of the parties in one of three ways: (1) revocation, in which the offeror withdraws the offer prior to acceptance; (2) rejection, in which the offeree rejects the offer; and (3) counteroffer, in which the offeree rejects the original offer and proposes a new offer with different terms. Offers may also be terminated by operation of law. 5. award: 10 out of 10.00 points In a delegation situation, the nondelegating party is called the: delegator. delegate. obligee. obligor. In a delegation situation, the nondelegating party is called the obligee. 6.

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    award: 10 out of 10.00 points When an accord and satisfaction is agreed to, the original obligation subject to the accord is immediately discharged. True False The original obligation is not discharged until the terms of the accord are performed. 7. award: 10 out of 10.00 points Just as in common law, the UCC recognizes the concept of anticipatory repudiation, allowing a breach to be declared prior to performance being due. True False With appropriate evidence, the UCC recognizes the concept of anticipatory repudiation. 8. award: 10 out of 10.00 points The International Chamber of Commerce abbreviation indicating that goods are to be picked up by the buyer and not delivered is: FAS. FOB. FCA. EXW. The International Chamber of Commerce abbreviation indicating that goods are to be picked up by the buyer and not delivered is EXW. 9. award: 0 out of 10.00 points In American Needle Inc . v. National Football League, the 32 football teams were treated as a single entity because they belong to the same sports league. True False The 32 teams were each treated as a separate entity.

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    10. award: 10 out of 10.00 points The court order for Microsoft to break apart into multiple entities in U.S. v. Microsoft was overturned on appeal. True False The appellate court overturned the district court's determination. 1. award: 10 out of 10.00 points Unjust enrichment is a theory used to impose an obligation in the absence of an actual agreement. True False Unjust enrichment is a quasi - contract theory of recovery designed to prevent injustice when there is no enforceable agreement between the parties. 2. award: 10 out of 10.00 points Divisible contracts are often referred to as severable contracts in many states. True False In many states, severable contracts have the same meaning as divisible contracts. 3. award: 10 out of 10.00 points Larry has had a few beers and is starting to get a bit drunk. He isn't acting strange, and in conducting conversations with others he's slurring only an occasional word or two. Larry, should he enter into a contract in this condition, would be considered mentally incompetent and his contract would be void. True False Larry is not unable to understand or unable to act in a reasonable manner, so his contract would likely be valid or, at most, voidable. 4.

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    award: 10 out of 10.00 points Jon owns two cars. He says to Rachel, "I'll sell you either car for $8,000." This is a valid offer. True False This is not an insufficient or vague offer because the acceptance would specify which car is being contracted for. 5. award: 10 out of 10.00 points Each of the following is a discharge by mutual consent except: accord and satisfaction. novation. rescission. frustration of purpose. Frustration of purpose discharges a contract by operation of law. 6. award: 10 out of 10.00 points A party to a contract may be discharged from performance due to operation of law if the other party unilaterally alters the contract. True False When a party unilaterally alters a contract, the innocent party may be discharged from performance by operation of law. 7. award: 10 out of 10.00 points Just as in common law, the UCC recognizes the concept of anticipatory repudiation, allowing a breach to be declared prior to performance being due. True False With appropriate evidence, the UCC recognizes the concept of anticipatory repudiation. 8.

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    award: 10 out of 10.00 points UCC risk of loss provisions will govern the terms of a contract even if the parties have specified risk allocation in the contract. True False If the parties have specified risk allocation in the contract, UCC risk of loss provisions will not be applicable. 9. award: 10 out of 10.00 points The test for determining a monopoly under the Sherman Act is the entity's share of the relative market. True False This is the standard used under the Sherman Act. 10. award: 10 out of 10.00 points There is a bright - line test for determining the amount of market share necessary to be considered a monopoly. True False There is no test for determining the amount of necessary market share. Courts have held a variety of percentages as the necessary amount. 1. award: 10 out of 10.00 points Mike is walking through a parking lot and finds Kathy lying unconscious. He puts her in his car and takes her to the hospital. The hospital saves her life, and when she becomes conscious, it presents her with a bill. Kathy has to pay based on a unilateral contract. Kathy has to pay based on an implied contract. Kathy has to pay based on a quasi - contract. Mike has to pay because he brought her to the hospital. Kathy would be unjustly enriched, so a quasi - contract would be formed to lessen the hospital's damages. 2.

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    award: 10 out of 10.00 points Real estate deeds and mortgages that require a seal to be enforceable are considered: implied contracts. quasi - contracts. formal contracts. informal contracts. Formal contracts entail specific requirements of construction, such as requiring a seal. Real estate documents such as deeds and mortgages require a seal to be enforceable under state laws. 2. award: 10 out of 10.00 points Real estate deeds and mortgages that require a seal to be enforceable are considered: implied contracts. quasi - contracts. formal contracts. informal contracts. Formal contracts entail specific requirements of construction, such as requiring a seal. Real estate documents such as deeds and mortgages require a seal to be enforceable under state laws. 4. award: 0 out of 10.00 points The term option contract refers to the choices that one has when entering into a contract. True False An option contract is an enforceable agreement to keep an offer open for a specified period of time. 5. award: 10 out of 10.00 points When an assignment is made, the assignee has the right to reform the contract and change the obligor's rights and duties as the assignee wishes. True False

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    The assignment is invalid if the contract is materially altered such that the obligor's duties are increased and additional burdens or risks are created. 6. award: 10 out of 10.00 points In a delegation situation, the nondelegating party is called the: obligee. obligor. delegate. delegator. In a delegation situation, the nondelegating party is called the obligee. 7. award: 10 out of 10.00 points On February 1, Frank's Fedora Manufacturers sends an offer to Metropolitan Outfitters by letter with all price, quality, quantity, and delivery terms clearly stated, indicating that the offer will remain open until October 1. On September 1 Metropolitan sends an acceptance of the offer to Frank's with no material alterations to any of the stated terms in the offer. The acceptance makes the contract valid and enforceable. True False Firm offers may be for only three months before they expire. Here, the firm offer indicated a 10 - month span and the offer was accepted in the seventh month. There is no contract. 8. award: 10 out of 10.00 points Your cousin, who is a CPA, calls you and says that a client paid him in diamonds and he's selling them. If you purchase one of those diamonds, at the time of the sale your cousin would be considered a merchant of those diamonds. True False A merchant is one that is regularly engaged in the sale of a particular good. Your cousin is not a merchant because he doesn't regularly sell diamonds or other jewels. 9. award: 10 out of 10.00 points The per se standard applies to nonprice vertical restraints.

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    True False The courts use the rule of reason standard. 10. award: 10 out of 10.00 points Which act does the Robinson - Patman Act amend? McCarthy Act Sherman Act Hart - Scott - Rodino Act Clayton Act The Robinson - Patman Act amends the Clayton Act. If a seller has delivered nonconforming goods that have been rejected 1. award: 10 out of 10.00 points An offer of a reward, if it is fulfilled, forms: an express contract. a quasi - contract. a unilateral contract. a bilateral contract. A reward offer creates a unilateral contract because it involves a promise to pay a reward that requires performance. 2. award: 10 out of 10.00 points All of the following are necessary elements of a contract except: consideration. mutual assent. capacity. writing.

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