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A minor’s declaration of trust is voidable. The Labor-Management Reporting and Disclosure Act is aimed at eliminating corruption in labor unions. Answer: T The term mala prohibita refers to the bad act element of a crime. Answer: F The Congressional […]

Which of the following is correct with regard to the Bill of Rights? a. It serves as a restriction on the powers and authority of the federal government. b. It does not apply directly to the states, but the Supreme […]

The right of exoneration allows the surety to require the principal debtor to pay his obligation to the creditor. Under the 1934 Act, an accountant’s liability for false or misleading statements is based on a good faith negligence standard. Answer: […]

Whether an individual partner or the partnership owns certain property determines who gets it upon dissolution of the partnership and who shares in income from it. A conditional indorsement is one by which the indorser makes the rights of the […]

The Sarbanes-Oxley Act has all but which of the following provisions? a. Creating a five-person Accounting Oversight Board with authority to review and discipline auditors. b. Creating severe civil and criminal penalties for enterprises that engage in the commission of […]

Under what circumstances may the buyer seek the remedy of replevin? a. Where the buyer has been unable to obtain cover. b. Where the goods have been shipped under reservation of a security interest in the seller and that interest […]

Fred is a concert violinist who is scheduled to perform at Carnegie Hall for the first time. He buys what he is told is a Stradivarius violin from a well-known, reputable dealer in quality violins, and he pays the going […]

A drawee bank is primarily liable after it accepts the check. When a treaty and a right declared under a subsequent federal statute conflict, the treaty must prevail. Answer: F Restrictive covenants are strictly construed against the party asserting their […]

A payee cannot be a holder in due course under the Code. Discharge by performance is the most frequent method of discharging a contractual duty. Answer: T Article 8 of the UCC covers rules applicable to transfers of investment securities. […]

If an anticipatory repudiation substantially impairs the value of the contract, the aggrieved party may: a. await performance for a commercially reasonable time. b. resort to any appropriate remedy for breach. c. All of the above. d. None of the […]

Indorsers of all instruments incur primary liability on the instrument. Collecting banks give to a transferee the same basic warranties as those given by other parties who transfer commercial paper, except they also may give encoding warranties. Answer: T The […]

Roscoe Braun, who lives in Cleveland, receives a mailing from Florida from the SwampLand and Reclamation Project. It states that the Brauns can purchase one-acre sites as part of a newly planned development located in Leon County, Florida. The Brauns […]

Fred contracts to sell a certain tract of land to Mary for $20,000, but the contract is silent as to the time of delivery of the deed and payment of the price. In this case, the: a. payment of the […]

A duty to act is imposed on those whose innocent conduct has injured another and left him helpless and in danger of further harm. Apparent authority may arise by an agent’s showing a third party a document from the principal […]

The __________ gives shareholders who elect such a right in the articles of incorporation the power to dissolve the corporation. a. appraisal remedy b. U.C.C. c. Statutory Close Corporation Supplement d. None of the above. A corporation may acquire all […]

Generally, State A may exercise “long-arm” jurisdiction over a defendant located in State B if the defendant: a. once resided in State A. b. uses a product produced in State A. c. made a contract in State A. d. has […]

Name and briefly describe the special features or extraordinary duties of five special types of bailments discussed in the textbook. A compulsory share exchange happens when two companies wish to merge into one. Answer: F Answer: Five special types of […]

What six elements must be present for the crime of larceny to exist? A nonpoint source is land use that causes pollution. Answer: T Identify at least six situations in which the parol evidence rule does not apply. Answer: The […]

An appeal from a small claims court is taken to the state court of appeals where a trial de novo is begun. An offer must be in a particular form to have legal effect. Answer: F Unanimous written consent of […]

The Securities Exchange Act of 1934 primarily deals with secondary transactions in stock. A license is generally subject to revocation by the property owner at any time. Answer: T Chapter 3 of the Bankruptcy Code contains provisions dealing with the […]

To be effective, a gift requires delivery. The Sarbanes-Oxley Act passed in 2002 is the first comprehensive federal statute prohibiting computer crime. Answer: F In a Chapter 7 proceeding, an unsecured creditor who files a claim with the court after […]

Russell promises to deliver and install living room carpeting for Nina. Classify as an express, implied-in-fact, or implied-in law condition Nina’s notification to Russell of her choice of type and color of carpeting. Compare and contrast this condition with the […]

The Model Business Corporation Act is a state statute that, like the UCC, has been adopted by all of the states in the United States to make state incorporation statutes uniform throughout the United States. A principal who authorizes his […]

The purpose of reliance damages is to place the injured party in a position as good as he would have held if the contract had not been made. Under the Third Restatement, if a principal becomes incapacitated, the agency relationship […]

The term “past consideration” is not really consideration at all because the law will not find a contract where there is no bargained-for-exchange. Bailments for the bailee’s sole benefit are usually limited to the gratuitous loan of personal property for […]

Legislation to protect the environment from precipitation containing high levels of sulfuric or nitric acid, or acid rain, is aimed primarily at electric utility companies. The liability of manufacturers and sellers of goods for a defective product or for its […]

The Restatement (Third) of Torts: Products Liability has experienced rapid adoption by the states. An implied-in-law condition must be fully performed. Answer: F Under Chapter 11, a class that is not impaired under a plan is deemed to have accepted […]

The Code addresses the ‘battle of the forms’ problem by focusing on intent of the parties. Sales of tangible personal property involve the transfer of title. Answer: T If the seller has failed to comply with Code requirements in making […]

The concerted action requirement of the Sherman Act Section 1: a. may be established by an express agreement. b. is not met when a parent corporation and its wholly owned subsidiaries agree to a restraint in trade. c. requires factors, […]

The tort of false light imposes liability if the matter in question is objectionable to a reasonable person, but is not necessarily defamatory. An agreement to refrain from a particular trade, profession, or business is enforceable if two requirements are […]

White-collar crime is defined as a nonviolent crime usually involving deceit, corruption, or breach of trust. Under the common law, in order to be enforceable, a modification of an existing contract must be supported by mutual consideration. Answer: T The […]

Which of the following is correct with respect to the Code’s approach to impossibility of performance? a. A significant drop in demand for the goods will excuse the buyer’s performance. b. Increased production costs will excuse performance by the seller. […]

Despite 402A’s bar of contributory negligence in strict liability cases, some courts apply comparative negligence to strict liability cases. Presentment for payment is one step necessary to charge an indorser with the obligation to pay. Answer: T An uncommon but […]

Incorporation statutes usually provide for both voluntary and involuntary dissolution of a corporation. Directors may vote by proxy when they are not able to be present for a meeting. Answer: F Pointing an unloaded gun at someone who believes it […]

The same conduct cannot be both a crime and a tort, which is a civil wrong. A limited liability partnership is a limited partnership which falls under special statutes not requiring filings to limit partners’ liability. Answer: F The majority […]

Thomas borrowed $100,000 from First Bank, which asked that he both put up collateral and provide a surety. Consequently Thomas provided the bank with a security interest in his antique car collection and asked Victor to act as a surety. […]

Allannah has entered into a contract to buy a new Steinway piano. The law governing the contract is Article 3 of the UCC. First Finance Company filed its financing statement for a purchase money security interest in Donald’s lawn tractor […]

An agreement to refrain from a particular trade, profession, or business is enforceable if: a. the purpose of the restraint is to protect a property interest of the promisee. b. the agreement is for no longer than two years. c. […]

Attachment must occur in order to make a security interest enforceable against the debtor and against third parties. The U.S. Supreme Court can invalidate a law if it conflicts with the U.S. Constitution. Answer: T The Gramm-Leach-Bliley Financial Modernization Act […]

Trade secrets are most frequently misappropriated in which of these ways? a. An employee wrongfully uses or discloses such secrets. b. A competitor wrongfully obtains them. c. Through inadvertent disclosure in advertisements. d. Both (a) and (b). Of the following […]

Today, a majority of courts permit a rescission of a contract for negligent or innocent misrepresentation, provided that all the remaining elements of fraud are present and the misrepresentation is material. Concurrent conditions occur when mutual duties of performance are […]

A principal has no duty to compensate his or her agent if: a. the agent breached the duty of obedience. b. the agent breached the duty of loyalty. c. it is a gratuitous agency. d. All these are correct. An […]

Tim and his friend are playing catch in the back yard when Tim suddenly turns around and throws the ball over the fence into the neighbor’s yard where it breaks the window. This is trespass to real property, even if […]

If incorrect, which of the following would probably be considered a misrepresentation of a material fact? a. “This is the one that I think is the best buy.” b. “This is the best computer on the market.” c. “This car […]

An agency may impose in its orders sanctions, such as seizing property or revoking a license. Holders of preferred stock with a dividend preference must receive dividends at the end of each corporate fiscal period. Answer: F Title VII of […]

An indorsement “Pay to Jones Construction Company upon completion of the job at No. 10 Park Place” is nonnegotiable. Under the common law, a modification of a preexisting contract must be supported by mutual consideration; under the Code, a contract […]

Which of the following can be the basis for an accountant’s liability under state law? a. Contract law and negligence, but not criminal law. b. Tort law, contract law, and criminal law. c. Negligence, criminal law, and strict liability. d. […]

Andrew agreed to exchange something clearly without value to enter a contract with Milt. The contract will not fail for lack of consideration because, if the parties agree to the exchange, the courts will not be concerned about whether the […]

Carmen needs quick cash, so she hits upon a scheme. She tells Frank she’s collecting for Laotian refugees. Frank writes a check for $100 payable to the order of Carmen. Carmen indorses the check and delivers it to Joanne, who […]

In equal protection cases involving economic regulation, the courts use the rational relationship test. To qualify as an innocent landowner under SARA, a person must have, at the time of acquiring the property, asked about the previous ownership and uses […]

A completely handwritten will is valid only if witnessed. A partner can withdraw his partnership capital at any time. Answer: F A right of redemption of a mortgage cannot be defeated by operation of law. Answer: F A “Vertical Restraint […]

Accountants are exempt from civil suits based on the Racketeering Influenced and Corrupt Organizations Act. What is the doctrine of promissory estoppel, and when is it used? Answer: Promissory estoppel is a doctrine used to enforce noncontractual promises where there […]

The right of dissent results in payment of: a. a damage award to the shareholder. b. a price in exchange for shares. c. treble damages for violation of the charter. d. a bonus to dissenting shareholders. An offer that is […]

The Fair Labor Standards Act regulates child labor in agricultural employment. Governments can use nontariff barriers to give local industries a competitive advantage. Answer: T Administrative hearings are held before a jury, just as are court hearings. Answer: F By […]

Ad substantiation, as required by an FTC policy statement, requires a company to survey consumers to test their perception of a product. An agent will not be authorized to act for a principal unless he receives some consideration for the […]

The state may bring an action for involuntary dissolution of a company if the corporation has not paid its annual franchise tax. A preliminary hearing is held in a criminal case to determine whether there is probable cause to believe […]

A professor photocopies fifty copies of a copyrighted chart to distribute to his students in class. This is a clear violation of the Copyright Act. After the coronation of Edward VII was postponed and parties who had entered into contracts […]

Voidable preferences include all of the following EXCEPT: a. a transfer of property of the debtor to or for the benefit of a creditor. b. payment of taxes owed to a governmental unit. c. a transfer of property while the […]

The Bill of Rights was approved by the first Congress to guarantee that the federal government would not abuse its powers. The United States Postal Service plays an important role in consumer protection as it files many cases to close […]

An operating agreement is adopted by members of most limited liability companies. Mary receives her monthly bank statement on December 30th. She looks at it quickly, then sets it aside. Three days later, she examines it again and discovers a […]

Describe the crime of false pretenses and name and define four crimes similar to false pretenses that were discussed in the textbook. Marvin offers to sell his lawnmower to Cheryl for $75 if she pays cash and picks the mower […]

The RULPA specifies the events that will trigger a dissolution, after which the limited partnership’s affairs must be liquidated. These events include which of the following? a. The expiration of the time period specified in the certificate. b. The unanimous […]

The capacity to be a principal, and thus to act through an agent, depends on the capacity of the principal to do the act. The Securities Act of 1933 regulates tender offers and proxy solicitations. Answer: F A license is […]

Clayton Tile has a secured bond on specific property of Ceramic Creations, Inc. Clayton’s claim against Ceramic is enforceable only against that specific property. The remedy of identification of goods to the contract enables the seller to also exercise the […]

A partner is criminally liable for the crimes of her partners. The difference between common and preferred stock is that the latter is a debt instrument, whereas the former represents an equity interest in the company. Answer: F If the […]

What is a condition? Give an example of each of the following types of conditions: condition precedent, condition concurrent, conditions subsequent. A trust for the establishment and maintenance of a public museum would be a charitable trust. Answer: T Like […]

For a person to acquire an easement, he must have the permission of the owner to use the land. John and Megan are at a crowded theater. In the press of people exiting the theater, John accidentally steps on Megan’s […]

General contract law states that contracts that have to be in writing must: a. specify the parties to the contract. b. specify the subject matter and essential terms. c. be signed by the party to be charged or by his/her […]

A copyright would protect a photograph. A thief stole Harold’s car and installed a DVD player in it. Later the police caught the thief and returned the car to Harold. Harold now owns the DVD player by accession. Answer: T […]

The Federal Trade Commission may issue a cease and desist order having the effect of an injunction. If the debtor is an individual whose debts are primarily consumer debts, the trustee may not avoid any transfer, within 90 days of […]

The business law topics of contracts, agency, property, and trusts are governed primarily by the common law. If the SEC requires an amendment to a registration, the twenty-day waiting period begins again. Answer: T A proxy is revocable to the […]

A gratuitous agent has a duty of loyalty but is not liable for any harm caused by his careless performance. Sean breaches an agreement in his employment contract with Inmett Corporation by also working for Inmett’s major competitor. Sean’s promise […]

A plaintiff who has not sustained any loss resulting from the defendant’s breach of contract cannot recover any damages. If an agent who has actual authority and receives reimbursement does not tell the third party that he is working in […]

To establish trespass to land, a plaintiff: a. must show an invasion that interferes with the plaintiff’s right of exclusive possession of property that is at least an indirect result of the defendant’s actions. b. need not show the plaintiff’s […]

__________ is a provision excusing one party from liability. a. Procedural unconscionability b. An exculpatory clause c. Substantive unconscionability d. Tortious conduct Which of the following is correct regarding a foreign corporation? a. A foreign corporation is incorporated in a […]

What is a statute of repose? Why have some states adopted such statutes? A tiger gets loose from the tent of a circus and mauls a passerby. The circus claims it has always treated the animal well and that it […]

Explain the reasons why the accountability of the management of a corporation is a cultural issue. The duration of a copyright is the same whether the copyright is owned by the author or if it is a work for hire. […]

A fraudulent misrepresentation: a. must be material to obtain rescission. b. must be material to recover damages. c. may be innocent, meaning the representation was made without knowledge of its falsity but with due care. d. need not have the […]

Strict liability can be avoided where: a. the seller uses due care and diligence in preparing the goods. b. the seller manufactures products of this type on a regular basis. c. the seller gives a disclaimer of the defect to […]

If the buyer received goods on credit while he was insolvent by misrepresenting in writing his solvency, the seller is able to reclaim the goods only if the seller makes a demand on the buyer within ten days after the […]

Which of the following terms would indicate a destination contract? a. F.O.B. city of buyer. b. F.O.B. city of seller. c. C.I.F. d. F.A.S. seller’s port. __________ is/are any property other than an interest in real property. a. Goods b. […]

Dissociation refers to those situations in which the RUPA requires a partnership to wind up and terminate. A valid contract is one that meets all of the requirements of a binding contract. Answer: T In a sale of goods, the […]

A resulting trust depends on a contract or agreement as evidenced by the parties’ acts. Andria, an attorney, has a personal injury case which is set for trial next week. She needs a good doctor to testify on behalf of […]

Virtually all shareholders who vote for directors do so through the use of a proxy. To ratify a contract, the principal must have knowledge of all material facts and may ratify either the entire contract or the part that is […]

In order for Mitchell, the owner of a cement factory, to obtain a permit from the Colorado Environmental Protection Agency in a PSD area, he must demonstrate that his factory will utilize the best available control technology. The board of […]

Nonfraudulent representation is made without scienter. The State of Minnesota has been negotiating with the Canadian government on issues involving acid rain and eventually reaches an agreement with Canadian officials. This is a valid treaty under the United States Constitution. […]

Garnishment is only a post-judgment remedy. After passage of a week, the buyer of six crates of strawberries will be deemed to have accepted the goods. Answer: T A liquidated damages provision sets forth the amount of damages the parties […]

An accountant who willfully violates Section 11 of the 1933 Act is subject to fines of up to $100,000 or imprisonment of not more than three years, or both. Morris ordered 1,000 sq. ft. of green carpet from RS Company. […]

Bill would like to propose to the board of directors of Bizmarc, Inc., that the corporation distribute one percent of its pre-tax yearly income to feed the poor. To Milton Friedman and others, Bill’s proposal might be considered unethical, because […]

The law establishes a test for determining whether a partnership has been formed. The test includes which of the following? a. An association of two or more persons. b. Conducting a business not necessarily for profit. c. That the partnership […]

The UCC permits a seller to limit or modify the buyer’s remedies for breach of warranty: a. in all cases. b. except for unconscionable limitations or for exclusions of consequential damages. c. in no cases, as this would be contrary […]

Enforcement and interpretation of the Truth-in-Lending Act was given to the: a. Commerce Department. b. Justice Department. c. Federal Trade Commission. d. Federal Reserve Board. Jerry received a check from McGregory Corporation as a dividend on his preferred shares. Two […]

The majority of states allow the injured party who has been induced to enter into a contract by fraud to recover only “out-of-pocket” damages equal to the difference between the value of what she has received and the value of […]

The attorney general of the state of incorporation may bring a court action to dissolve a corporation if the corporation obtained its charter through fraud. The warranty of merchantability is found in Section 402A of the Restatement of the Law […]

Rule 10b-5 applies to: a. only a buyer of a registered security. b. only a seller of a registered security. c. any person who buys or sells only a registered security. d. any person who buys or sells any security. […]

An important and fundamental part of administrative law is the limits imposed by judicial review upon the activities of administrative agencies. Increased production costs will allow the seller to avoid a contract based upon commercial impracticability. Answer: F All bills […]

Which of the following need NOT be included in the certificate filed by a limited partnership? a. The name of the limited partnership. b. The name and address of the agent for service of process. c. The names and addresses […]

About half of state statutes and the amended ULLCA have eliminated a member’s dissociation as a mandatory cause of dissolution of an LLC. Anna employs Mark to purchase for her a suitable site for a roller rink. Mark owns a […]

Which of the following constitutes computer crime? a. Theft or vandalism of computer hardware, software, or secrets. b. Distributing child pornography via computer. c. Implanting a malicious code. d. All of the above. George has been declared incompetent by the […]

A corporation may purchase its own shares only out of earned surplus unless the articles of incorporation or the shareholders permit purchase out of capital surplus. Misuse or abuse of the product is a defense to an action brought under […]

Infringement is the unauthorized use of a trademark of another or use of a substantially indistinguishable mark. What rights are protected by the First Amendment? What sorts of speech are constitutionally protected? Explain. Answer: The First Amendment prohibits Congress from […]

The definition of business ethics includes which of the following points? a. It is a branch of applied ethics. b. It is fully codified in federal statutes. c. It has a central authority and universal standards. d. All of these […]

A purchaser of a house who buys the property ‘subject to” the mortgage is not personally liable for the mortgage, nor is he a surety for the mortgage obligation. A corporation is a creature of the state and may be […]

In Alzado v. Blinder, Robinson & Company, Inc., Blinder, Robinson & Co. was found liable to partnership creditors as a general partner because it assumed control of the business and thus lost its limited partnership status. A shareholders’ written agreement, […]

Juanita works for Chevco but owns no Chevco stock. She buys 10 shares of a new issue of company stock as a savings plan and afterward receives the signed registration statement, which contains an untrue statement of material fact. Because […]

A ninety-year-old patient walked away from a nursing home and wandered onto some nearby railroad tracks. Once on the tracks, the patient stumbled and sprained his ankle. A few minutes later a train approached. The engineer saw the man on […]

The common law system is used in most of Europe, Scotland, and Latin America. Which of the following would be considered to be a misrepresentation of a material fact for purposes of establishing fraud in the inducement? a. A statement […]

Sam writes a check drawn on his account at First Bank to State University to pay his tuition. In this case: a. Sam is the drawer. b. the university is the drawee. c. the bank is the payee. d. Sam […]

Employers are subject to civil, but not criminal, penalties for violations of the Occupational Safety and Health Act. Fraud in the inducement will render an agreement void. Answer: F A person cannot be guilty of trespass unless he or she […]

Which of the following debts would be discharged in bankruptcy? a. Consumer credit loans for a stove. b. Property taxes on a beach house. c. Student loans maturing one-year prior to bankruptcy filing. d. Alimony payments past due. Which of […]

The Magnuson-Moss Warranty Act contains disclosure and labeling requirements for sellers of consumer products containing a written warranty. An “I.O.U.” is a negotiable instrument. Answer: F A stepchild will not ordinarily inherit under intestacy statutes unless legally adopted. Answer: T […]

The U.S. Constitution reserves to the states or to the people: a. powers also delegated to the federal government by the Constitution. b. the powers the Constitution does not prohibit to the states. c. police power. d. employee safety matters. […]

A gratuitous assignment is revocable by the assignor. The Truth-in-Lending Act has disclosure requirements for both consumer loans and credit sales over $25,000. Answer: F Usually in cases where there is a known principal, the agent has liability for, and […]

D drew a $100 check on ABC Bank payable “to the order of P.” P cashed the check at First Bank. First Bank is an agent of P until the drawee bank pays the check. States have authorized the formation […]

Criminal sanctions for accountants are limited to punitive fines. For a misrepresentation to be material, it must be likely to induce a reasonable person to manifest assent or the maker must know that it would be likely to induce the […]

Robert paid William $1,000 for a rare first edition of an Edgar Allen Poe novel. The sales contract states that the book is to be delivered within ten days. William, however, refused to deliver the book as promised. In order […]

In the case of Hochster v. De La Tour, the plaintiff was allowed to treat the repudiation by De La Tour as breach of contract and immediately bring suit. Mediation, like arbitration, is often a compulsory process in which the […]

In some states, the vesting of a third party’s rights occurs only when the third party learns of the contract and assents to it. Only the intentional destruction of personal property and not the use of the property in an […]

The duties of a trustee are: a. to carry out the purposes of the trust. b. to act with prudence and care in the administration of the trust. c. to exercise a high degree of loyalty toward the beneficiary. d. […]

A fiduciary duty, arising out of a relationship of trust and confidence, is one of utmost loyalty and good faith. The laws of the state in which a foreign limited partnership is organized govern its organization, its internal affairs, and […]

a. State and local governments require licenses for certain businesses and professional activities. Explain the difference between a regulatory licensing statute and a licensing statute enacted to raise revenue. b. Explain the significance in contract law between a regulatory license […]

Once a Chapter 13 plan has been confirmed, it may: a. be modified at the debtor’s request but only if the trustee agrees. b. be modified only if all unsecured creditors agree. c. not be modified. d. be modified at […]

An indorsement in trust creates a trust for the benefit of himself or others. Some states prescribe by statute a time period, usually one year, in which a person who reached the age of majority may still disaffirm contracts made […]

Which of the following is empowered to issue industry-wide safety standards for consumer products? a. UCCC. b. RESPA. c. FCCPA. d. CPSC. The person who files or commences a civil lawsuit is the: a. plaintiff. b. defendant. c. prosecuting attorney. […]

One hundred crystal flower vases have been identified to the contract and a down payment of $1,000 of the $10,000 purchase price has been paid. If the seller becomes insolvent, the buyer may still pay $9,000 and get the goods. […]

On April 18, Marco bought a sailboat from a local marina. The boat was defective and did not turn about properly. Marco used the boat extensively all summer and the boat was no longer in the same condition as when […]

Rachel agrees to sell Bill goods for $2,000. The value of the goods accepted is $1,500. If the goods had been as warranted, their value would have been $2,600. What are the buyer’s damages for breach of warranty? a. $500. […]

Discuss preemptive rights. Are preemptive rights more important in a closely held corporation or in a publicly held corporation? Explain. The Uniform Electronic Transactions Act, which has been adopted by all of the states and the District of Columbia, gives […]

In which of the following ways does a state constitution differ from the U.S. Constitution? a. State constitutions are often more restrictive of rights than the U.S. Constitution. b. A state constitution can guarantee rights beyond those provided in the […]

The UCC applies to real estate mortgages and trust deeds since they are security interests. The bankruptcy definition of “insolvency” is a financial condition such that the sum of one’s debts exceeds the sum of all one’s property at fair […]

A finance lease is a special type of lease transaction that generally involves three parties instead of two. An agreement for an illegal substance will be enforced by the courts if all other elements of the contract are present. Answer: […]

The Revised Act was amended in 2002 to provide: a. conversion procedures permitting a corporation to change its state of incorporation, thus allowing a foreign business to become a domestic business. b. domestication procedures permitting a foreign partnership or LLC […]

Leases of personal property exceed $100 billion annually and are governed by Article 2A of the UCC. Jared, a citizen of Missouri, brings suit in federal court against Cryden Corp., which has its principal place of business in Kansas. The […]

In order to be sufficient, an agreement required to be written under the statute of frauds must be signed at the bottom and notarized. Scienter is the element of fraud that requires that the misrepresentation must have been known by […]

Identify what law would govern: (a) a sale of a computer between a U.S. company and a U.S. consumer; (b) an insurance policy sale between a U.S. company and a U.S. consumer; and (c) a sale of manufactured goods between […]

The Code has expanded the rights of good faith purchasers with respect to sales by minors. If no place of tender is indicated by the contract, delivery is presumed to be made at seller’s place of business. Answer: T Unless […]

If Gene mistakenly hits Audrey with his truck and kills her, when he intended to hit and kill Cerise, his intent to kill Cerise is transferred to Audrey, regardless of whether he even knew Audrey, for the purpose of fulfilling […]

Under the Second Restatement, the bankruptcy of the principal terminates, without notice, the power of an agent to affect the principal’s property that passes to the bankruptcy trustee. Bailed property must be tangible. Answer: F Compare the liability of an […]

Under FTC regulations and state legislation, a seller may not advertise goods at one price and then raise the price once demand has been stimulated. Affirmative action generally means active recruitment of a designated group of applicants. Answer: T Like […]

All but which one of the following is a purpose of bankruptcy legislation? a. To preserve existing business relations. b. To punish recalcitrant debtors. c. To bring about a quick, equitable distribution of the debtor’s property among creditors. d. To […]

What activities give rise to strict liability and what defenses are available to strict liability? In some states, a contract under seal is binding without consideration. Answer: T The essential characteristic of ethical fundamentalism is a reliance upon a central […]

All price discrimination is illegal under the Robinson-Patman Act. All conversions are trespasses but not all trespasses are conversions. Answer: T A duty may not be delegated if there is an express provision in a contract against delegation. Answer: T […]

A federal agency that wishes to adopt administrative rules must do so in compliance with the: a. Administrative Procedures Act. b. U.S. Constitution. c. agency’s enabling statute. d. All of the above. The reasonable person standard is: a. external and […]

Brad doesn’t like Carl and especially dislikes Carl’s new felt hat, so he intentionally knocks it off Carl’s head in order to embarrass Carl. Brad has committed a battery. Discuss the types of deeds that can be used to transfer […]

The Securities Enforcement Remedies and Penny Stock Reform Act of 1990 granted the SEC the power to issue cease and desist orders. All employees are agents, but not all agents are employees. Answer: T A possessor of land must warn […]

The FTC has the power to seek in a federal district court a preliminary injunction, pending completion of administrative proceedings, whenever the agency has reason to believe that a person has been violating FTC rules. The purpose of the Office […]

Intoxicated persons are liable in quasi-contract for necessaries furnished during their incapacity. The recovery for a lessee’s wrongful repudiation of a lease is the difference between the present value of the old rent due under the original lease and the […]

Which of the following is NOT a purpose of federal securities regulation? a. To ensure that only worthwhile securities are sold in interstate commerce. b. To ensure adequate disclosure by issuers of securities. c. To ensure that inside information is […]

An express warranty may consist of a sample. Under the Revised Act, the filing of the articles of incorporation by the Secretary of State is conclusive proof that the incorporators have satisfied all conditions precedent to incorporation so that a […]

Sandy’s private secretary promises not to disclose the contents of a letter she typed if Sandy will give her the next day off with pay. If the secretary takes the day off, Sandy does not have to pay her for […]

A promissory note is an instrument that involves three parties in three capacities. The courts may not create implied trusts. Answer: F The transfer of real estate requires consideration to be valid. Answer: F The principal objective of antitrust law […]

Contributory negligence is a defense to a warranty of merchantability cause of action. Bradley buys a television set that turns out to be stolen. He can sue the seller for breach of warranty. Answer: T Explain what may constitute a […]

Manuel applied for a variance from the local zoning ordinance in order to build a building. His neighbor, Sandra, appeared before the zoning board to speak in opposition to the application. At the hearing, Sandra testified under oath and made […]

Obligations contingent upon the happening or nonhappening of an event not certain to occur are known as conditional promises. The courts have interpreted the Sherman Act as prohibiting all monopolies. Answer: F A depositary bank is any bank handling an […]

A shareholder who opposes a fundamental change to the corporation must make a written demand within the prescribed time period in order to be entitled to payment for his shares. The Civil Rights Act of 1991 provides that victims of […]

The most important federal statutes governing hazardous substances include: a. SARA. b. CEQ. c. FIFRA. d. Both (a) and (c). Which of the following is NOT personal property? a. Trees that have been cut into logs. b. An air-conditioning system […]

Why do governments impose tariffs? a. To protect domestic industries from foreign competition. b. To raise revenues. c. To attempt to improve their balance of trade. d. Governments impose tariffs for all of the above reasons. The duty of care […]

Under the RUPA, the partners are jointly and severally liable for all contract obligations of the partnership. Michelle and Margaret agree to form a partnership. The partnership contract between Michelle and Margaret does not have to be in writing in […]

Al, the bus driver on a cross-country Greyhound, kisses Susie, a passenger, while she sleeps. Al could be sued for battery. Restitution requires a return of value to the aggrieved party. Answer: T Statutory provisions do not protect creditors upon […]

To recover on a claim under workers’ compensation, the worker must prove the employer was negligent. Divorce or marriage will result in a revocation of a will. Answer: F The creditor’s rights against the principal debtor are determined by the […]

In the absence of agreement, payment is due at the time and place the buyer is to receive the goods, even though the place of shipment is the place of delivery. Decisions of courts of appeal are published in volumes […]

Ron offers to sell Pete his stamp collection. Pete gives Ron $10 to induce Pete into keeping his offer open for a week. If Ron decides on day four of the week that he really does not want to sell […]

If Dan sublets his apartment to Susan for the summer, Susan is primarily liable to pay the landlord the rent. You are assigned to participate on a corporate committee responsible for creating a program to comply with the Federal Organizational […]

Which of the following is true with regard to contractual relations between the principal and a third party? a. There is no liability on the part of the principal if the agent acts with implied authority. b. An undisclosed principal […]

Under copyright law, the doctrine of works for hire states that: a. if an employee prepares a work within the scope of her employment, her employer is considered the author of the work. b. if an employee prepares a work […]

Title VII of the Civil Rights Act of 1964 prohibits employment discrimination on the basis of race, color, gender, religion, or national origin in any employment-related process. The principle of stare decisis gives stability to our system of jurisprudence. Answer: […]

Land and interests in land are considered “real property.” The principal has the duty to provide the employee with reasonably safe conditions of employment and to warn the employee of any unreasonable risks involved in the employment. Answer: T Discuss […]

A check is a draft payable on demand. Jessica at the age of 15 entered into a contract to sell five acres of land to her uncle. She may disaffirm this contract at any time before reaching her majority. Answer: […]

If Eilene, a shareholder, sues in a derivative suit, the judgment will be paid to: a. the shareholders as a dividend. b. Eilene directly. c. the corporate treasury. d. the board of directors. If a small manufacturer of vacuum cleaners […]

The type of authority that arises from acts of the corporation that lead third parties to believe reasonably and in good faith that an officer has the requisite authority is: a. actual express authority. b. actual implied authority. c. apparent […]

Wurst & Wurst is the accounting firm that has been used by the Intercontinental Bank for over twenty years. Tim approached Alfred, a Wurst partner, at a cocktail party. Tim asked about the bank’s stability. Although Alfred knew that the […]

All of the following may, in general, revoke a will by operation of law EXCEPT: a. subsequent marriage. b. subsequent divorce, as far as a provision in the will of one party for the benefit of the other. c. birth […]

A material breach by the seller will discharge the buyer from his obligations under a contract. The Code requires that the affirmations, promises, or descriptions the seller makes be relied on by the buyer to be an express warranty. Answer: […]

In their contract for the sale of window shades, Lela Window Treatments, Inc. and Shane agree that Lela will have the right to replace any defective goods that are delivered to Shane. This contractual provision will not have any effect […]

The student government of State University has a contract with a famous rock band to perform at the university on homecoming weekend. The band cannot assign its rights and delegate its duties under this contract. A transferee who has been […]

The “corporate veil” is most likely to be pierced in the case of closely held corporations and in parent-subsidiary relationships. What is the doctrine of liability for a tort connected with a contract? Answer: Minors are generally liable for their […]

A patent last for life, while a copyright ends after fifty years. The SEC would like to adopt some new rules to protect investors. What factors should it consider as part of the administrative process? Answer: Administrative rules can be […]

An agreement to sell the entire production of a particular plant is a requirements contract. Farmer Brown brings his crop of wheat to the local grain elevator where it is stored along with the grain of several other farmers. A […]

The UCC modifies the common law rule by requiring additional consideration for the modification of a contract. All contracts do not have to be in writing to be enforceable. Answer: T What is the purpose of the Code remedies for […]

Which of the following would NOT be a promise statutorily made enforceable without consideration? a. Hawkins, in good faith, changes the quantity of square yards of carpet ordered from Grant Mills. b. Jones promises to pay his cousin’s past-due cell […]

In a Chapter 11 or 13 proceeding, the bankruptcy estate of an individual includes wages earned after commencement of the proceeding. Objective impossibility occurs if a particular contracting party is unable to perform because of financial inability or lack of […]

Cal sprayed pesticide on his crops in a very careful manner on a windless day. Nevertheless, some of the pesticide spray fell on his neighbor’s side of the fence and contaminated the cornmeal for the chickens. The chickens died and […]

Rose is working hard on Arlin’s mayoral campaign. She thinks that just a few more votes could win the election, so she promises to pay her friend Violet $50 if she will register and vote for Arlin. Violet does so, […]

All jurisdictions have enacted laws making it a crime to write a check when there is not enough money in the account to cover the check. Over the last half-century, the scope of administrative law has expanded enormously because of […]

A person who negligently places another person in imminent danger is not liable for injury sustained by a third-party rescuer. Revocation of acceptance requires notice to the seller, whereas rejection does not. Answer: F Ready Equipment, Inc. authorized and specified […]

How may an easement be created? a. By prescription. b. By express reservation. c. By necessity. d. All of the above. Identify the type of indorsement each of the following represents: a. Pay to Bill, for collection. b. Pay to […]

Sara holds 1,000 shares of stock in Starr, Inc., which she purchased based upon financial statements that Travis had prepared. She now realizes that the statements were false and wants to sue Travis for common law fraud. What is Travis’s […]

A security interest in consumer goods is always automatically perfected upon attachment. Anne is hired to manage an unincorporated dress boutique owned by Betty. The two agree that Anne will receive one-third of the net profits, which amount is to […]

How is ‘sovereign immunity” interpreted under U.S. law today? a. It gives absolute immunity to a foreign nation from all U.S. laws. b. It gives immunity to foreign governments for commercial activity carried on in the U.S. by the foreign […]

Presentment is excused where the acceptor is undergoing bankruptcy. The statute of frauds has to do with fraud in the inducement of a contract. Answer: F An implied warranty exists by operation of law. Answer: T What is a “merchant?” […]

Diane prepared a registration for the first issuance of stock of the Ledmar Corporation. Diane took the assignment very seriously and spent a great deal of time preparing the statement. Two years after the statement was filed, the SEC began […]

Assume there are no provisions in the corporation’s articles of incorporation or bylaws regarding quorum requirements. If there are 13 total directors of General Grain Corporation and the minimum number of directors are present to transact business, how many votes […]

As long as a decedent’s wishes are clear, the formalities of a will need not be strictly met in order for the will to be valid. The Fifth Amendment would protect a defendant from having to give blood samples to […]

The delivery terms “ex-ship” and “no arrival, no sale” indicate that the contract is a shipment contract. Contracts of a ward may be ratified by his guardian during the period of guardianship. Answer: T It is possible for a seller […]

A buyer is obliged to accept conforming goods and to pay for them according to the contract terms. In most states, it is not necessary to record a deed for title to pass to the grantee. Answer: T An employer’s […]

Corporations today outnumber unincorporated business associations plus sole proprietorships. The Statutory Close Corporation Supplement to the Model and Revised Acts applies only to corporations having fewer than forty shareholders. Answer: F ‘Dissolution’ of a partnership and ‘termination’of a partnership are […]

If a will was burned in an electrical fire that destroyed the testator’s home, the will is presumed to be revoked. Some states have broadened their lemon law coverage to include used cars and motorcycles. Answer: T A reasonable person, […]

The parol evidence rule applies only to integrated contracts, meaning those in which the parties have assented to the written agreement as the statement of the complete agreement between them. List the implied warranties imposed by law on an assignor […]

Upon dissolution of a partnership, all authority of a partner to act on behalf of the partnership terminates. A constitution is the fundamental law of a particular level of government, establishing the structure of government and defining the political relationships […]

The Revised Act permits the board of directors to adopt certain charter amendments without shareholder action, unless the articles of incorporation provide otherwise. These amendments would include: a. extending the duration of a corporation if it was incorporated when limited […]

Marie owes Nathan $900 and the parties agree that Marie will paint Nathan’s house in satisfaction of the debt. The debt is not discharged until Marie performs the substituted agreement by painting Nathan’s house. When reviewing factual determinations of an […]

Under the UPA, one of the advantages of the partnership form of doing business is continuity of existence. Under a Kantian approach to ethics, a person should not lie to colleagues unless that person supports the right of all colleagues […]

Sarah has a checking account at First Bank. Orrin steals one of her blank checks, writes a check for $250 to himself, and then forges Sarah’s signature. Orrin then indorses the instrument to Paul in payment of a debt. Paul, […]

A general partnership is formed without any formality and no documents need be filed with the state. A totten trust is revocable by the creator. Answer: T Article 9 of the UCC governs financing transactions involving security interests in real […]

The Restatement Third, Torts, completed and approved in 2004, covers torts that involve economic loss not resulting from physical harm to persons or property. Ordinarily, members of manager-managed LLCs have duties to the LLC and its members by reason of […]

Larson & Son manufactured welders that frequently malfunctioned, setting clothing on fire and causing serious burns. Larson & Son sold all of its assets to Swenson Co., which continued to manufacture the Larson welder product line. Eighteen months after Swenson’s […]

All of the following are characteristics of a corporation EXCEPT: a. it has perpetual existence. b. it is a legal entity of its own. c. it is able to be sued and to sue. d. it is usually managed by […]

Briefly discuss legislation relating to computer crimes. Fitness for a particular purpose and merchantability are implied warranties that apply only to sales by commercial vendors. Answer: F Under the CISG, avoidance of a contract cancels any provision for settlement of […]

The act-of-state doctrine provides that to maintain international relations and trade, a host country must refrain from imposing its laws on a foreign sovereign nation present within its borders. Jesse purchases 50 shares of Mountain Ridge Corporation stock. Explain what, […]

To perfect a security interest in personal property, a financing statement may be filed, eith er before or after the security interest attaches. A voluntary choice from among perfectly legitimate alternatives may in some instances constitute economic duress. Answer: F […]

Carolee, Joanna, and Ellen form Capital City Partnership. Carolee contributes expertise; Joanna, $15,000; and Ellen, $20,000. After a year, Joanna adds $12,000 as a loan. Ten years later, Capital owes $44,000 to creditors, total assets are $112,000, and the partners […]

What is the basic purpose of the World Trade Organization (WTO)? Discuss the arguments for and against businesses’ involvement in socially responsible activities. Answer: The prime responsibility of business is to make a reasonable return on its investment by producing […]

An obligation imposed by law where there has been no agreement or expression of assent by word or act on the part of either party involved is a(n): a. implied in fact contract. b. express contract. c. void contract. d. […]

Which of the following is not correct regarding the relationship between an independent contractor and a principal? a. The contractor is liable under respondeat superior. b. The contractor generally contracts to perform services but is not controlled by the principal. […]

A draft involves three parties: a drawer, a drawee, and a payee. Hugo wishes to raise money for his restaurant. He offers to sell stock to his brothers, sisters, aunts, uncles, and cousins. The offering is made by telephone to […]

Neither the common law nor federal law recognizes an accountant-client privilege. A reversion is held by a person other than the grantor or his successors. Answer: F Substantive unconscionability involves scrutiny by the court for “bargaining naughtiness.” Answer: F The […]

The Code greatly alters the common law doctrine of material breach by adopting what is known as the: a. perfect tender rule. b. anticipatory repudiation rule. c. prevention of performance rule. d. discharge by operation of law rule. a. What […]

A bank is permitted by statute to remove an original paper check from the check collection process and send instead of it a substitute check. A bankruptcy petition may be filed by one creditor of a debtor as long as […]

To accomplish the basic purposes of contract remedies, which of the following limitations have NOT been imposed upon monetary damages? a. Foreseeability. b. Certainty. c. Mitigation. d. Restitution. Steven makes a material misrepresentation of fact regarding his motorcycle to Thelma […]

The Revised Act does not consider a transfer of its own stock by ZYX Corporation to its stockholders a distribution. Venue has to do with which court has jurisdiction over the subject matter of a lawsuit. Answer: F Under the […]

The Love v. Hardee’s Food Systems, Inc. case dealt with the responsibility of the owner or possessor of property to an invitee to warn of, remove, or barricade a dangerous condition of the premises. The U.S. Supreme Court has eliminated […]

Which of the following is considered “goods” within the meaning of Article 2? a. An unborn calf. b. A field of corn still in the field. c. Timber which has been removed by the seller. d. All of these are […]

Define incidental damages and give an example. The CEQ requires that federal agencies make environmental assessments that are major, lengthy studies of potential environmental destruction. Answer: F Exclusive dealing contracts are illegal and void. Answer: F Under federal law, employers […]

Constructive trusts are generally found where the creator clearly intended a trust to be formed. The Magnuson-Moss Warranty Act is administered by the Federal Trade Commission. Answer: T How does liability based upon negligence differ from that based upon strict […]

Each partner, unless otherwise agreed, has equal rights in the management and conduct of the business of a general partnership. Any method of combination of corporations that involves issuing shares, proxy solicitations, or tender offers may be subject to federal […]

By the concept of ____________, a transferee of a negotiable instrument can acquire greater rights than the transferor had. a. holder in due course b. assignment c. commercial utility d. sight drafts Relationships that may lead to a court’s careful […]

Under what conditions do courts impose a constructive trust? What is the Council on Environmental Quality? Answer: The CEQ is a three-member advisory group that is part of the Executive Office of the President. It makes recommendations to the President […]

Legal sufficiency of consideration and adequacy of consideration are virtually synonymous terms. It is common for transactions to involve multiple contracts. Identify at least four contracts that might be involved in Costello’s sale of land to Johnston. Answer: Possible contracts […]

An accountant is negligent if she does not exercise the degree of care a reasonably competent accountant would exercise under the circumstances. If the seller of goods is an expert and gives an opinion with regard to the goods, the […]

Unauthorized signatures include both forgeries and signatures made by an agent without authority. Under the rule in Hadley v. Baxendale, only damages foreseeable at the time of entering into the contract can be recovered. Answer: T Misty wrote a check […]

Al owes Tracy $500, due June 1. Al, Tracy, and Ted mutually agree that Ted will pay Tracy instead of paying Al the money Ted owes Al, and Al will be discharged from his debt to Tracy. Such an agreement […]

Most states have special incorporation statutes governing nonprofit corporations. An indorsement “Pay Alice Adams” is an assignment rather than a negotiation since it lacks words of negotiability. Answer: F The Bill of Rights restricts the power and authority of the […]

When one party breaches the sales contract, the Code places the risk of loss on that party. In what three situations will a seller recover the price of goods plus incidental damages? Answer: The Code permits the seller to recover […]

Within 30 days after relief is ordered, a meeting of creditors must be held, at which the debtor must submit to examination by creditors and the court. If an agent tortiously injures a third party, the third party may not […]

Assignment of a partner’s interest will cause dissolution. Under the RUPA, a partner is a co-owner of partnership property. Answer: F When the agency terminates, the agent’s duty of confidentiality continues. Answer: T Under the common law, a partnership was […]

Mala in se crimes are those crimes that are not morally wrong but are declared wrongful by the legislature. Arthur is authorized under a written power of attorney to collect accounts for Peter. Peter dies, and there is no notice […]

When the method used by an offeree to accept is unauthorized, the traditional rule is that the acceptance is effective when received by the offeror, provided that it is received within the time during which the authorized means would have […]

Agency is a consensual relationship that the principal and agent may form by contract or agreement. The usual method of enforcing a restrictive covenant is by specific performance. Answer: F Lowell recently graduated from college with a degree in business […]

In many states, judges are elected by the voters for a stated number of years. Buying an instrument for a price less than face value means the buyer had notice of a defense or claim against the instrument. Answer: F […]

Which of the following is NOT covered by the Fair Labor Standards Act? a. Minimum wages. b. Hours of employment. c. Child labor. d. Defined benefit plans. Because documents affecting ownership of property are recorded, a chronological record of transactions […]

A crime is an act or omission in violation of public law and punishable by the government. The Code follows the doctrine of election of remedies. Answer: F OPIC was established to facilitate the participation of U.S. private capital and […]

The rule which permits the jury to infer both negligent conduct and causation from the mere occurrence of certain events is: a. proximate cause. b. res ipsa loquitur. c. causation in fact. d. comparative negligence. A periodic leasehold tenancy may […]

The Weichert Co. Realtors v. Ryan case found that the parties formed an express contract by mutually manifesting assent to the essential terms. A limited liability company is a relatively new form of unincorporated business association that blends the advantages […]

What party(ies) is/are involved in a suretyship relationship? a. The principal debtor. b. An ancillary bailee. c. Principal bailee. d. All of the above. In the Brentwood Academy v. Tennessee Secondary School Athletic Association case, the U.S. Supreme Court held […]

Which of the following is NOT a special relationship giving rise to a duty to act to aid or protect one in peril? a. Hotel and guest. b. Aunt and niece. c. School and student. d. None of these are […]

Protected individuals under the Restatement view of tort liability for an accountant include potential investors and the general public. In interpreting a contract, terms which have been separately negotiated are given priority over standardized pre-printed terms. Answer: T When one […]

Administrative agencies create more legal rules and decide more controversies than all the legislatures and courts combined. The fourth Congress approved ten amendments to the U.S. Constitution, now known as the Bill of Rights, which were adopted on December 15, […]

The court in Moulton Cavity & Mold Inc. v. Lyn-Flex Ind. held that: a. the sweaters did not conform to the express warranty in the contract. b. if the seller does not perform his contractual obligations exactly, the buyer has […]

Specific performance is an equitable remedy which seeks to compel the party in breach to perform the contract according to its terms. Warrick makes a $10,000 investment in a debenture issued by Wryteway Company. Warrick is now an unsecured creditor […]

Under the CISG, if the buyer fails to perform any obligations, the seller may either require the buyer to pay the price or fix an additional period of time for the buyer to perform. The seller has an insurable interest […]

Maria posted several signs in the neighborhood offering $50 for the return of her lost cat. Dave calls to get a description of the cat and tells Maria, “I’ll look for your cat.” A contract is formed by Dave’s call […]

Ownership of real property for a definite time or for the life of a person is a freehold estate. The RUPA requires a central filing of a statement of partnership authority specifying the names of partners authorized to execute instruments […]

Bob’s brother, Steve, planned to visit over Labor Day weekend. Together they planned to build a deck in Bob’s backyard. Bob ordered the lumber, concrete, nails, and other supplies to be delivered on Friday. He also arranged to rent a […]

A principal may generally revoke the authority of an agent at any time. Most student loans cannot be discharged under Chapter 13. Answer: T An agency contract appointing the agent for a period of more than one year must be […]

The UCC permits an oral agreement for the sale of goods to be enforced against a party who admits to the contract in court, even though the statute of frauds requires the agreement in writing. A defective acceptance does not […]

According to Milton Friedman, the social obligation of a corporation is to return as much money as possible to its direct stakeholders. The requirement of legally sufficient consideration is concerned with whether the bargain was good. Answer: F The executor-administrator […]

Both the Fifth and Fourteenth Amendments contain due process clauses. Most types of contracts are valid without being written. Answer: T If a bank pays on a check even though it has a ‘stop payment order,” the bank is liable […]

The validity, under antitrust law, of a joint venture depends on the competitors’ purpose in forming it. Members of an LLC share profits and losses equally. Answer: F A buyer in the ordinary course of business takes collateral (other than […]

For purposes of defamation, a publication includes non-written, verbal communication to third parties. Most forms of speech are protected by the strict or exacting scrutiny standard. Answer: T Ricardo posts a sign in the neighborhood offering $50 for the return […]

Which one of the following is NOT a personal defense? a. Infancy, to the extent that it is a defense to a simple contract. b. Breach of contract. c. Non-delivery of an instrument. d. Failure of consideration. Clint induces David, […]

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. […]

If Gil assigns his lease to Jim, Gil has no further obligations to his landlord. A maker must sign in the lower right-hand corner of the instrument. Answer: F An example of successful land purchases made by agents for an […]

Tate brings an action against Marsheen for damages from trespass to Tate’s property. Tate must prove the case by a preponderance of the evidence. Discuss the concept of freedom of contract under Articles 2 and 2A of the UCC. Answer: […]

Compliance with a legislative enactment or administrative regulation does not prevent a finding of negligence if a reasonable person would have taken additional precautions to avoid harm. A dissolution may be judicially decreed if a proceeding is brought by the […]

A noncontractual promise may be enforceable where there has been justifiable reliance on the promise. Agricultural and urban runoff are examples of point source pollution, which is inherently more difficult to control than nonpoint source pollution. Answer: F A signature […]

Zeelon Corporation stock may be summarized as follows: 100,000 authorized 90,000 issued 75,000 outstanding 15,000 treasury stock How many shares or proxies will have to be present for a quorum (assuming no special provision and that the Revised Act is […]

Is a promise to pay a pre-existing moral obligation enforceable? Explain. Incidental damages include lost profits and injury to person or property resulting from defective performance. Answer: F Donee beneficiaries and incidental beneficiaries are called intended beneficiaries. Answer: F The […]

A witness to a will who is “interested” will be disinherited or disqualified. Assume that you and your best friend have decided to form a partnership after graduation. You have both studied business law, so you both know the importance […]

An output contract is a special form of an illusory contract. Ron owes Matt an unsecured deposit of $3,000. Ron has a discharge of all his unsecured debts by a bankruptcy court. Can the contract between Matt and Ron be […]

The ADA provides for remedies that are generally the same as those available under Title VII. In the case of Eastman Kodak Co. v. Image Technical Services, Inc. the U.S. Supreme Court stated that to violate Section 2 of the […]

Everett delivers to Neely nonconforming goods. Neely accepts the goods, but upon discovering that they are defective, he rightfully revokes acceptance by timely notice to Everett. Discuss which party bears the risk of loss if the goods are then destroyed […]