LES 305 Exam 3 ACTUAL Exam
Questions and CORRECT Answers
If you are selling a product and you do not want to be held liable under the implied warranty of
merchantability, you may use the words, "as is" to disclaim liability. (T or F) - CORRECT
ANSWER - True
You "popped some tags" at your local thrift store and like the parody of Thrift Shop, you "...got a
nasty
rash, probably from wearing this gross used jacket..." This is a breach of the implied warranty of
fitness for
a particular purpose. (T or F) - CORRECT ANSWER - False
In order to hold a manufacturer or seller liable for damages caused by a defective product under
negligence theory, the plaintiffs must show that the defendant continued to sell defective
products after it
knew of the defect and failed to correct it. - CORRECT ANSWER - True
If you are a buyer for Wal-Mart or Target or some other "big box" retailer, you don't have to
worry
about the safety of the products that you select to be offered for sale by your company because
your
company is not a manufacturer. (T or F) - CORRECT ANSWER - False, You are liable
under strict liability theory.
Sellers must use the words "promise" or guarantee" to give the implied warranty of
merchantability. (T or F) - CORRECT ANSWER - False
The trade usage between parties within one industry will be used to interpret contracts between
those
parties. (T or F) - CORRECT ANSWER - True
,Contracts with minors for medical expenses are voidable. (T or F) - CORRECT
ANSWER - False
A contract to buy a painting for $2.4 million is governed by the UCC and must to be in writing to
be
enforceable. (T or F) - CORRECT ANSWER - True, [NOTE: It is a UCC contract and it is
over $500, so it does have to be in
writing.]
If you receive a signed offer from someone who wants to buy your house, then this is an option
contract. Money or other consideration is required for it to be enforceable. (T or F) - CORRECT
ANSWER - True, Consideration is
required.
If you are a nonmerchant selling goods, and a nonmerchant buyer sends you a purchase order
adding
a material new term in his acceptance, then the new term will not be binding. (T or F) -
CORRECT ANSWER - True
Under the common law, any variance in the terms in an acceptance is a counteroffer and
rejection. (T or F) - CORRECT ANSWER - True
A contract that someone signed under duress is voidable at the option of the oppressed party. (T
or F) - CORRECT ANSWER - True, The offer and acceptance must be identical under
common law.
If you sign a noncompetition agreement or covenant not to compete with your employer that
prevents
you from working in the industry for life, it will be enforceable. (T or F) - CORRECT
ANSWER - False, It is not reasonable in terms
, of time. In Arizona, that means usually no more than 2 years and no further than necessary to
protect the employer.
If you delegate your duties under your contract with a customer to a third party, you can be held
liable
for any damages suffered by your customer caused by the nonperformance or poor performance
of the
third party. (T or F) - CORRECT ANSWER - True
A contract that someone signed as the result of undue influence is void. (T or F) - CORRECT
ANSWER - False, it's voidable
An offer can be accepted after it is revoked. (T or F) - CORRECT ANSWER - False
Consideration is required to be given to a merchant for the sale of goods to keep a merchant's
firm
offer open. (T or F) - CORRECT ANSWER - False
.Option contracts can not be revoked during the option period as long as consideration was paid
to
keep the option open. (T or F) - CORRECT ANSWER - True
In Arizona, it is illegal to charge above 36% annual interest on consumer loans. If you charge
40%
interest to consumers, this violates Arizona usury laws. (T or F) - CORRECT ANSWER -
True
The most important factor that the IRS reviews to determine if a person is properly categorized
as an
employee is whether the employee's taxes have been withheld. (T or F) - CORRECT
ANSWER - False
Questions and CORRECT Answers
If you are selling a product and you do not want to be held liable under the implied warranty of
merchantability, you may use the words, "as is" to disclaim liability. (T or F) - CORRECT
ANSWER - True
You "popped some tags" at your local thrift store and like the parody of Thrift Shop, you "...got a
nasty
rash, probably from wearing this gross used jacket..." This is a breach of the implied warranty of
fitness for
a particular purpose. (T or F) - CORRECT ANSWER - False
In order to hold a manufacturer or seller liable for damages caused by a defective product under
negligence theory, the plaintiffs must show that the defendant continued to sell defective
products after it
knew of the defect and failed to correct it. - CORRECT ANSWER - True
If you are a buyer for Wal-Mart or Target or some other "big box" retailer, you don't have to
worry
about the safety of the products that you select to be offered for sale by your company because
your
company is not a manufacturer. (T or F) - CORRECT ANSWER - False, You are liable
under strict liability theory.
Sellers must use the words "promise" or guarantee" to give the implied warranty of
merchantability. (T or F) - CORRECT ANSWER - False
The trade usage between parties within one industry will be used to interpret contracts between
those
parties. (T or F) - CORRECT ANSWER - True
,Contracts with minors for medical expenses are voidable. (T or F) - CORRECT
ANSWER - False
A contract to buy a painting for $2.4 million is governed by the UCC and must to be in writing to
be
enforceable. (T or F) - CORRECT ANSWER - True, [NOTE: It is a UCC contract and it is
over $500, so it does have to be in
writing.]
If you receive a signed offer from someone who wants to buy your house, then this is an option
contract. Money or other consideration is required for it to be enforceable. (T or F) - CORRECT
ANSWER - True, Consideration is
required.
If you are a nonmerchant selling goods, and a nonmerchant buyer sends you a purchase order
adding
a material new term in his acceptance, then the new term will not be binding. (T or F) -
CORRECT ANSWER - True
Under the common law, any variance in the terms in an acceptance is a counteroffer and
rejection. (T or F) - CORRECT ANSWER - True
A contract that someone signed under duress is voidable at the option of the oppressed party. (T
or F) - CORRECT ANSWER - True, The offer and acceptance must be identical under
common law.
If you sign a noncompetition agreement or covenant not to compete with your employer that
prevents
you from working in the industry for life, it will be enforceable. (T or F) - CORRECT
ANSWER - False, It is not reasonable in terms
, of time. In Arizona, that means usually no more than 2 years and no further than necessary to
protect the employer.
If you delegate your duties under your contract with a customer to a third party, you can be held
liable
for any damages suffered by your customer caused by the nonperformance or poor performance
of the
third party. (T or F) - CORRECT ANSWER - True
A contract that someone signed as the result of undue influence is void. (T or F) - CORRECT
ANSWER - False, it's voidable
An offer can be accepted after it is revoked. (T or F) - CORRECT ANSWER - False
Consideration is required to be given to a merchant for the sale of goods to keep a merchant's
firm
offer open. (T or F) - CORRECT ANSWER - False
.Option contracts can not be revoked during the option period as long as consideration was paid
to
keep the option open. (T or F) - CORRECT ANSWER - True
In Arizona, it is illegal to charge above 36% annual interest on consumer loans. If you charge
40%
interest to consumers, this violates Arizona usury laws. (T or F) - CORRECT ANSWER -
True
The most important factor that the IRS reviews to determine if a person is properly categorized
as an
employee is whether the employee's taxes have been withheld. (T or F) - CORRECT
ANSWER - False
