1) If, before the time for contract performance, one party clearly communicates to the other the intention not to perform, such an action is a breach of the contract.
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2) The board of directors of each corporation involved must approve a merger.
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3) Directors have a right to participate in all board of directors meetings.
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4) Any conspiracyeven if it occurs outside the United Statesthat has a substantial effect on U.S. commerce is within the reach of the U.S. antitrust laws.
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5) A promise to pay a debt for which a statute of limitations bars recovery is an enforceable promise.
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6) Sellers or lessors are liable only for products that are reasonably dangerous.
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7) There are no limits to the information that an administrative agency can demand from an individual or organization.
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8) Joint ventures undertaken by competitors are not subject to antitrust laws.
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9) Baby Products, Inc., hires Cole to develop and implement an e-commerce strategy for marketing Babys products. Cole signs a contract that includes a clause prohibiting him from competing with Baby during and after the employment. Before the strategy is implemented, Cole resigns from Babys employ and opens a business to compete with Baby. In Babys suit against Cole, to determine whether Cole may compete with Baby, what is the most important factor the court should consider?
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10) Any person may be a debtor in a liquidation proceeding.
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11) An authorized agent binds a principal on an instrument if the agent clearly names the principal in the signature.
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12) The doctrine of quasi contract can be used only when there is an actual contract that covers the matter in controversy.
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13) Hasty Pastries declares bankruptcy, idling Hastys delivery vehicles. The court can compel Hasty to make periodic cash payments to a creditor with a secured interest in the vehicles to offset the depreciation in their value. This is
a. the adequate protection doctrine.
b. the avoidance doctrine.
c. a preferential transfer.
d. the automatic stay.
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14) Petro Drilling Corporation combines its assets and debts with those of Oil Refining Company to form New Energy, Inc.
Refer to Fact Pattern 41-2A. New Energy assumes
a. all of Petros and Oils assets.
b. half of Petros and Oils assets.
c. none of Petros and Oils assets.
d. only debts that Petro and Oil incurred after a combination was proposed.
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15) On Monday morning, Bob deposits into his account at County Bank a $500 check from Dyna, who also has an account at County Bank. On that same day, this check is considered
a. cashiered.
b. certified.
c. paid.
d. provisionally credited.
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16) Cartier, an accountant, convinces his client Bianca to sign a contract to invest her savings in a nonexistent social-networking Web site. When Bianca learns the truth, she can
a. impose her own scam on Cartier without liability.
b. induce Cartier to give her his other clients funds without recourse.
c. rescind the contract to invest in the Web site.
d. sabotage Cartiers career in any way possible.
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17) Mike receives a payroll check from National Computer Systems, Inc., and indorses it by signing his name on the back of the check. This is
a. a blank indorsement.
b. a qualified indorsement.
c. a restrictive indorsement.
d. a special indorsement.
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18) Rita believes that Shady Grove Apartments, Inc., her landlord, has violated the law in a way that entitles her to withhold the rent. This remedy is generally associated with
a. breach of the covenant of quiet enjoyment.
b. breach of the implied warranty of habitability.
c. discrimination.
d. failure to provide security against crimes in common areas.
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19) Fiona owns one share of stock in GR8 Boards Corporation, as evidenced by a stock certificate. Fiona loses the certificate. Her ownership of the stock is
a. forfeited immediately.
b. forfeited within ten days of a third partys claim to ownership.
c. forfeited within thirty days if she cannot find the certificate.
d. not affected.
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20) Olga, a salesperson for Pre-owned Cars & Trucks, Inc., tells Quincy, This is the best car Ive ever seen. This statement is
a. an express warranty.
b. an implied warranty.
c. a warranty of title.
d. puffery.
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21) Teona files a voluntary petition in bankruptcy for relief through a liquidation. Debts that will not be discharged include claims for
a. domestic-support obligations.
b. money to be paid for goods not delivered.
c. contributions to employee benefit plans.
d. long overdue credit-card debt.
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22) Flem, a user of GameCenter.coms Web site, can download gaming software for free if he first clicks on I accept after viewing certain terms. This is
a. a contract that does not include the terms.
b. a contract that includes the terms.
c. not a contract but the terms are enforceable.
d. unenforceable.
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23) Donna makes and distributes copies of Every Good Boy Does Fine, a movie copyrighted by Great Films Corporation, without Great Films permission. Donna may be liable for
a. damages, fines, or imprisonment.
b. damages only.
c. fines or imprisonment only.
d. nothing.
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24) Seymour borrows $350,000 from Reliable Bank to buy a home. Seymour stops making payments on the loan ten months later. After the bank repossesses the property securing the loan but before it is sold, Seymour wants to buy it. This is
a. a deficiency judgment.
b. a reverse mortgage.
c. a violation of the law.
d. the right of redemption.
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25) Bill offers to sell his Consumer Service Center business to Dina for $100,000. Dina replies, The price is too high. I will buy it for $90,000. Dina has
a. accepted the offer.
b. made a counteroffer without rejecting the offer.
c. rejected the offer and made a counteroffer.
d. rejected the offer without making a counteroffer.
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26) Dhani, an accountant for Eureka, Inc., learns of undisclosed company plans to market a new laptop. Dhani buys 1,000 shares of Eureka stock. He reveals the company plans to Fay, who buys 500 shares. Fay tells Geoff, who tells Hu, each of whom buy 100 shares. They knows that Fay got her information from Dhani. When Eureka publicly announces its new laptop, Dhani, Fay, Geoff, and Hu sell their stock for a profit.
Refer to Fact Pattern 42-2A. If Dhani is liable under the Securities Exchange Act of 1934, it will be because the information on which he based his purchase of Eureka stock was
a. a forward-looking forecast.
b. not material.
c. not yet public.
d. not yet true.
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27) Luann and Mace are partners in Networx, a computer peripherals firm.
Fay is admitted to Global Associates, an existing partnership. A partnership debt incurred before the date of her admission comes due. Fay is
a. not liable for the debt.
b. only liable for the debt up to the amount of her capital contribution.
c. personally liable only to the extent the other partners do not pay.
d. personally liable to the full extent of the debt.
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28) Kim uses, on her new recording Lets Go, the guitar solo from Malcolms digital sound recording without his permission. This is
a. copyright infringement.
b. fair use.
c. licensing.
d. protected expression.
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29) Brasilia, a real estate broker licensed only in Connecticut, concludes a land sale in Delaware. She can
a. collect the commission if it has not been paid.
b. keep the commission if it has already been paid.
c. foreclose on the property to obtain any unpaid amount.
d. not collect the commission, keep it, or foreclose on the property.
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30) Interstate Distribution, Inc. (IDI), provides its employees with an e-mail system. IDI notifies them that it will monitor their communications over the system. Some employees file a suit against IDI, claiming a violation of privacy. The court is most likely to hold that, with respect to communications over the e-mail system,
a. the employees did not have a reasonable expectation of privacy.
b. the employer violated the employees privacy rights.
c. federal law prohibits the employers intentional interception.
d. federal law prohibits the employees privacy claim.
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31) In Rendezvous Cafes suit against Sanitary Waste Services, Inc., the court issues a judgment in Rendezvouss favor. The judgment can be appealed to an appropriate court of appeals by
a. neither party.
b. Rendezvous only.
c. Rendezvous or Sanitary.
d. Sanitary only.
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32) Trina pays Urban Edge Electronics store $1,500 for a laptop computer. Under the UCC, this is
a. a gift.
b. a lease.
c. a sale.
d. a crime.
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33) Digitech is a foreign corporation, which means that Digitech
a. is an alien corporation.
b. is chartered in a foreign country.
c. may be required to obtain a certificate of authority to do business.
d. may do business only in foreign countries.
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34) Radford and Serenity sign a written contract for the sale of Rads Coffee & Bagels business to Serenity. The parties intend their written contract to be a final statement of the terms of their agreement.
Refer to Fact Pattern 15-2. Serenity later disputes some of the provisions in the deal with Radford. If the dispute results in litigation, a court will most likely exclude evidence that
a. buttresses the written terms.
b. contradicts the written terms.
c. duplicates the written terms.
d. reinforces the written terms.
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35) Toby signs a note payable to the order of United Credit Union. Unless Toby has a valid defense against payment, Tobys liability on this note is
a. immediate.
b. imposed only after payment is demanded.
c. postponed until the note is dishonored by United Credit Union.
d. suspended until payment is due.
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36) Burger Heaven, Inc., conducts a chain-style franchise. This involves the transfer to Chester, one of its franchisees, of
a. a license.
b. a trade name.
c. the formula to make a product.
d. the ownership of the business.
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37) Moore Properties, Inc., offers in writing to sell to New Development Corporation (NDC) a certain half-acre of land for $112,000. After New Development signs the offer in acceptance and returns it, Moore discovers that the price should have been stated as $121,000.
Refer to Fact Pattern 14-2. The effect of Moores misstatement of the price will most likely fall on
a. Moore and NDC, who must split the difference.
b. Moore only.
c. NDC only.
d. neither Moore nor NDC.
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38) The Securities Exchange Commission is an administrative agency. The chief purpose of such agencies is to
a. act as liaisons between federal and state governments.
b. impose uniform laws on the states.
c. perform specific government functions.
d. standardize laws for the executive and judicial branches.
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39) The Federal Trade Commission is a government agency that issues rules, orders, and decisions. The Georgia state legislature enacts statutes. The Jackson County Board and the Peach City Council enacts ordinances. Administrative law includes
a. all law that affects a businesss operation.
b. the rules, orders, and decisions of the Federal Trade Commission.
c. statutes enacted by the Georgia state legislature.
d. ordinances created by the Jackson County Board and the city council of Peach City, Georgia.
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