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Question 1
One of the major advantages of a franchise system to a franchisor is the:
A. absence of state or federal regulations governing this form of business conduct.
B. ability to exert considerable control over retail outlets without major financial investment.
C. elimination of all corporate tax for such enterprises.
D. all of the above.
Question 2
If the seller fails to deliver the goods, the buyer may cancel the contract.
True
False
Question 3
Implied warranties imposed by law are absolute.
True
False
Question 4
The implied warranty of title differs from other warranties in that it protects buyers in their ownership of the goods bought.
True
False
Question 5
If a third person pays a debt to the principal’s agent that the third person owed the principal, the debt is discharged, even if the agent pockets the money and does not turn it over to the principal.
True
False
Question 6
The agent may not commingle the principal’s property with her own.
True
False
Question 7
Smedley is heavily involved in the management of a certain business. If Smedley dies, under which of the following alternative fact situations would the business entity be considered legally dissolved as a result of Smedley’s death?
A. If the business is a corporation.
B. If the business is a partnership and Smedley is a partner in it.
C. If the business is either a partnership (and Smedley is a partner in it) or a close corporation.
D. If the business is a Subchapter S corporation.
Question 8
Acceptance occurs when a buyer, after having reasonable opportunity to inspect the goods:
A. indicates that he will take them.
B. fails to reject them.
C. neither (a) nor (b).
D. either (a) or (b).
Question 9 If the buyer does not have a place of business, delivery is to be made to the buyer’s home.
True
False
Question 10
An agent is entitled to be paid if the agreed upon result is obtained even though the principal does not benefit.
True
False
Question 11
The test of an agent’s implied authority is:
A. the justifiable belief of the agent.
B. the specific language the principal used in granting the authority.
C. whether the authority is also apparent.
D. none of the above
Question 12
If a seller wishes to be relieved of the responsibility for implied warranties, the sales contract must clearly provide that the parties did not intend the implied warranties to become part of the contract.
True
False
Question 13
Briefly describe the doctrine of responde at superior
Question 14
A seller may create an express warranty by merely stating an opinion.
True
False
Question 15
The following is true of a LLC:
A. It is a separate legal entity.
B. Members often share management power.
C. Members are not personally liable for the wrongful acts of others.
D. all of the above
Question 16
A fundamental advantage of the corporate form over the partnership form is that:
A. partnership earnings are subject to double taxation.
B. corporations can more easily hold property over long periods of time.
C. the formalities involved in operating a corporation tend to be less.
all of the above.
D. all of the above
Question 17
For ratification to be effective, the principal:
A. need not have capacity.
B. must have had capacity to do the act at the time it was done in the principal’s name and when ratification occurs.
C. needs to only have capacity at the time the act is ratified, not at the time it was done in the principal’s name.
D. none of the above
Question 18
If the goods are in the buyer’s possession when the buyer breaches the contract, the seller may recover the purchase price.
True
False
Question 19
Agents may not delegate acts that involve no judgment or discretion.
True
False
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