Quiz # 3 T/F Questions
This portion of the Test is to be completed individually. This portion of the test is
closed book/closed notes. Please provide your INDIVIDUAL answers to the T/F
Questions on your scantron form. Please remember to put your name, date and
test # (Quiz # 3) on the scantron form.
Warranties, Product Liability,
and Consumer Law
1. Title warranties arise in a sales contract only if the seller expressly de-
clares that he or she possesses title to the goods.
2. A warranty against infringement is a promise by the seller that the
product was constructed in a workmanlike manner.
3. Only a seller’s expression of opinion creates a warranty.
4. Advertisements can include express warranties.
5. A seller must use a word such as “guarantee” to make an express
6. An implied warranty of merchantability arises in every sale or lease by
a merchant who deals in goods of the kind sold or leased.
7. A negotiable instrument serves as a substitute for cash.
8. To be negotiable, an instrument must indicate an account to be
9. A notation on an instrument that it is “negotiable” is sufficient to
render it negotiable.
10. To be negotiable, an instrument must be in writing.
11. To be negotiable, an instrument must be written on high-quality,
letter- or legal-size paper.
12. Rubber stamp signatures are not legally binding signatures.
13. The location of a signature on an instrument is important.
Checks and Banking
in the Digital Age
14. A check orders a bank to pay a fixed amount of money on demand.
15. Under the UCC, a bank is “a person engaged in the business of
16. A cashier’s check is an instrument in which a bank draws a check on
17. When a bank certifies a check, it immediately charges the drawer’s
18. A bank that has certified a check is under no obligation to accept it.
19. A bank’s duty to honor its customers’ checks is absolute.
20. To transfer checkbook dollars among different banks, each bank acts
as an agent of collection for its customer.
21. A person who writes a bad check is subject to a civil suit only.
22. A security interest is enforceable only if the collateral is not in the
23 A secured party is a person who owes the payment of a secured
24 A security interest is not enforceable before the creditor’s rights have
attached to the collateral.
25. For a creditor to have an enforceable security interest, the debtor must
have title to the collateral.
26. An improper filing renders a secured party unperfected.
27. A purchase-money security interest arises only when a buyer “pur-
chases” goods with “money.”
28. A financing statement is effective for five years from the date of filing.
29. A continuation statement is effective only if it is filed within six
months before the expiration of a financing statement.
30. The concept of the floating lien does not apply to future advances.
31. An officer of a corporation cannot possess the power to bind the
32. An employee may act in the capacity of an agent.
33. An agent whose employer does not have the right to control the agent’s
performance is an independent contractor.
34. An independent contractor always acts in the capacity of an agent.
35. A minor can be an agent.
36. There does not need to be a written agreement between two parties to
create an agency relationship.
37. A principal may deny the existence of an agency relationship whenever
it suits his or her purpose.
38. A principal can ratify an agreement made without authorization on his
or her behalf by one who is not his or her agent.
39. An agency relationship is a fiduciary relationship.
40. An agent owes his or her principal a duty to act in good faith.
41. The employment-at-will doctrine is still in widespread use.
42. Firing a worker who refuses to perform an illegal act violates public
43. Whistleblower statutes protect employers from workers’ disclosure of
the employer’s wrongdoing.
44. Children over fourteen years of age can work in hazardous jobs.
45. Employers may waive the overtime requirements of the Fair Labor
46. State law regulates overtime pay.
47. Only the states can enforce safety standards governing workplaces.
48. Only the states can set safety standards governing workplaces.
49. Employers have no general duty to keep workplaces safe.
50. Only the federal government can set safety standards governing