BLAW 301 Final Exam with verified
solutions
True or False: A noncontractual promise may be enforceable where there has been justifiable reliance on
the promise. - correct answer ✔✔True
True or False: A promise is the person making promise. - correct answer ✔✔False
A(n) _____________ is a person in a position of trust and confidence who has a duty of utmost loyalty
and good faith.
A) fiduciary
B) servant
C) independent contractor
D) principal - correct answer ✔✔A) fiduciary
True or False: A fiduciary duty, arising out of a relationship of trust and confidence, is one of utmost
loyalty and good faith. - correct answer ✔✔True
True or False: Agents and principals have mutual fiduciary duties to one another. - correct answer
✔✔False
True or False: Article 2 of the Uniform Commercial Code does not apply to the sale of services. - correct
answer ✔✔True
True or False: Allannah has entered into a contract to buy a new Steinway piano. The law governing the
contract is Article 3 of the UCC. - correct answer ✔✔False
True or False: The principal has a duty to indemnify the agent for losses incurred or suffered while acting
as directed by the principal in a transaction which is not illegal or wrongful. - correct answer ✔✔True
, True or False: Ed buys a car from a friend "as is". The friend tells him, "In my opinion, this car is in
excellent mechanical condition." The friend has made an express warranty. - correct answer ✔✔False
True or False: An implied warranty exists by operation of law. - correct answer ✔✔True
True or False: Increased production costs will allow the seller to avoid a contract based upon commercial
impracticability. - correct answer ✔✔False
Which of the following is NOT a breach of an agent's duty of obedience?
A) Entering into an unauthorized contract for which his or her principal is then liable.
B) Committing a tort for which the principal is now liable.
C) Improperly delegating her authority.
D) Not following a principal's instruction to misrepresent the quality of a competitor's goods to a
potential customer. - correct answer ✔✔D) Not following a principal's instruction to misrepresent the
quality of a competitor's goods to a potential customer.
True or False: Revocation of acceptance is effective without notice to the seller. - correct answer
✔✔False
Strict product liability exists if:
A) the consumer misuses the product.
B) the consumer alters the product before he or she uses it.
C) a defective, unreasonably dangerous product reaches the consumer or user without substantial
change in the condition in which it is sold.
D) the consumer gives the manufacturer or seller notice of the defect. - correct answer ✔✔C) a
defective, unreasonably dangerous product reaches the consumer or user without substantial change in
the condition in which it is sold.
Alice is browsing in a commercial art gallery when she sees a painting that she likes. Arthur, who is the
manager of the gallery, tells her that in his opinion the painting is a genuine Leroy Neiman work. Based
upon that representation, Alice buys the work for $5,000. She later discovers that the painting is only a
cheap copy of the original that is worth no more than $50. Arthur has:
A) breached an express warranty to Alice that the painting is a Neiman work.
solutions
True or False: A noncontractual promise may be enforceable where there has been justifiable reliance on
the promise. - correct answer ✔✔True
True or False: A promise is the person making promise. - correct answer ✔✔False
A(n) _____________ is a person in a position of trust and confidence who has a duty of utmost loyalty
and good faith.
A) fiduciary
B) servant
C) independent contractor
D) principal - correct answer ✔✔A) fiduciary
True or False: A fiduciary duty, arising out of a relationship of trust and confidence, is one of utmost
loyalty and good faith. - correct answer ✔✔True
True or False: Agents and principals have mutual fiduciary duties to one another. - correct answer
✔✔False
True or False: Article 2 of the Uniform Commercial Code does not apply to the sale of services. - correct
answer ✔✔True
True or False: Allannah has entered into a contract to buy a new Steinway piano. The law governing the
contract is Article 3 of the UCC. - correct answer ✔✔False
True or False: The principal has a duty to indemnify the agent for losses incurred or suffered while acting
as directed by the principal in a transaction which is not illegal or wrongful. - correct answer ✔✔True
, True or False: Ed buys a car from a friend "as is". The friend tells him, "In my opinion, this car is in
excellent mechanical condition." The friend has made an express warranty. - correct answer ✔✔False
True or False: An implied warranty exists by operation of law. - correct answer ✔✔True
True or False: Increased production costs will allow the seller to avoid a contract based upon commercial
impracticability. - correct answer ✔✔False
Which of the following is NOT a breach of an agent's duty of obedience?
A) Entering into an unauthorized contract for which his or her principal is then liable.
B) Committing a tort for which the principal is now liable.
C) Improperly delegating her authority.
D) Not following a principal's instruction to misrepresent the quality of a competitor's goods to a
potential customer. - correct answer ✔✔D) Not following a principal's instruction to misrepresent the
quality of a competitor's goods to a potential customer.
True or False: Revocation of acceptance is effective without notice to the seller. - correct answer
✔✔False
Strict product liability exists if:
A) the consumer misuses the product.
B) the consumer alters the product before he or she uses it.
C) a defective, unreasonably dangerous product reaches the consumer or user without substantial
change in the condition in which it is sold.
D) the consumer gives the manufacturer or seller notice of the defect. - correct answer ✔✔C) a
defective, unreasonably dangerous product reaches the consumer or user without substantial change in
the condition in which it is sold.
Alice is browsing in a commercial art gallery when she sees a painting that she likes. Arthur, who is the
manager of the gallery, tells her that in his opinion the painting is a genuine Leroy Neiman work. Based
upon that representation, Alice buys the work for $5,000. She later discovers that the painting is only a
cheap copy of the original that is worth no more than $50. Arthur has:
A) breached an express warranty to Alice that the painting is a Neiman work.
