Which of the following would ordinarily NOT be considered a security under the
federal securities laws?
a. Bonds.
b. Stocks.
c. Investments in limited partnerships.
d. An investment in a nonprofit venture based on one’s own entrepreneurial efforts.
Shareholders normally have the right to do all but which one of the following?
a. Elect the directors.
b. Elect the officers.
c. Approve the sale of a major division.
d. Meet at least once a year.
All bills of lading are negotiable and may be transferred like a check.
a. True
b. False
Only the general partners have access to the books and records of the partnership.
a. True
b. False
Which of the following presents ethical dimensions for a business?
a. Possible pollution of the physical environment.
b. Conflicts among differing cultures and value systems in international transactions.
c. Compensation and working conditions of employees.
d. All of these.
Lewis employs Donna under a one-year contract to sell Lewiss line of leather wallets
and checkbook covers. If without Donnas knowledge, Lewis dies:
a. under the Second Restatement, Donnas actual authority will not terminate until the
end of the one-year contractual term.
b. under the Second Restatement, Donnas actual authority will not terminate until she
has notice of Lewiss death.
c. under the Third Restatement, Donnas actual authority will not terminate until she
receives notice of Lewiss death.
d. under both the Second and Third Restatements, Donnas actual authority will
terminate at either the end of her one-year contractual term or when she receives notice
of Lewiss death, whichever occurs first.
e. under both the Second and Third Restatements, Donnas actual authority will
terminate upon Lewiss death, whether she has notice or not.
The UCC definition of “unconscionable” is clear and unambiguous.
a. True
b. False
An illusory promise is consideration for a return promise.
a. True
b. False
At the end of a bailment, a bailee may correctly deliver the bailed property to a third
party (other than the bailor) in certain cases.
a. True
b. False
For a ratification to be effective, the principal:
a. must have knowledge of all material facts concerning the transaction.
b. must communicate her intent to ratify to the third party.
c. must have been in existence when the act was done.
d. Must have knowledge of all material facts concerning the transaction andmust have
been in existence when the act was done.
Ashley contracted to perform on her horse, Coronation, in the opening ceremonies of
the World Equestrian Games. If, before the event, Coronation pulls a tendon in its leg
and Ashley has to cancel her appearance, this is a case of:
a. subjective impossibility, which does not excuse Ashley from liability for breach of
contract.
b. objective impossibility, which discharges Ashleys contractual duty.
c. frustation of purpose, which does not discharge Ashleys contractual duty.
d. commercial impracticability, which excuses nonperformance.
The earned surplus test does not permit capital surplus to be used for the payment of
dividends.
a. True
b. False
Richard writes a letter to Sarah authorizing her to sell his car and sends a copy of the
letter to Timothy, a prospective purchaser. The next day, Richard sends a letter to Sarah
revoking her authority, but he fails to notify Timothy. Sarah:
a. has actual authority to sell the car to Timothy.
b. has implied authority to sell the car to Timothy.
c. has apparent authority with respect to Timothy to sell the car.
d. is empowered under the doctrine of respondeat superior to negotiate the contract.
An undisclosed principal may result in which of the following?
a. Liability of the agent for any contract made on behalf of such a principal.
b. The agent’s being declared incompetent by a court of law.
c. A declaration order by the court for the principal to show a guarantee.
d. All of these.
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 of value, such as “This is the best car in town for the money.”
b. “This style of jacket is going to be the most popular style next year.
c. “This car has a new radiator.
d. “In my opinion, this is the best buy for the money.
An obligation of the merchant-seller that the goods are reasonably fit for general
purposes for which they are manufactured and sold, and the goods are of fair average
quality is known as:
a. a warranty of merchantability.
b. strict liability.
c. an express warranty.
d. a warranty of fitness for a particular purpose.
An agreement to sell the entire production of a particular plant is a requirements
contract.
a. True
b. False
A manifestation by the buyer of his unwillingness to become the owner of the goods is:
a. cure.
b. revocation.
c. rejection.
d. tender.
In some states, a contract under seal is binding without consideration.
a. True
b. False
Objective impossibility occurs if a particular contracting party is unable to perform
because of financial inability or lack of competence.
a. True
b. False
The Code’s remedies are cumulative, therefore, a seller may both withhold delivery of
the goods and identify goods to the contract.
a. True
b. False
An indorsement “for deposit” is a collection indorsement.
a. True
b. False
An unauthorized signature may bind a principal who allowed the signature to be made
through his own negligence.
a. True
b. False
Any method of combination of corporations that involves shares, proxy solicitations, or
tender offers may be subject to federal securities regulation.
a. True
b. False
For an action of negligence, six elements must be proved.
a. True
b. False
Intent as used in the law of intentional torts requires the defendant to:
a. have acted purposefully.
b. desire to cause the consequences of her action.
c. believe the consequences are substantially certain to result from her action.
d. All of these are correct.
a. Is strict liability a legal concept available for environmental lawsuits? Why or why
not?
b. If strict liability is a concept used in environmental cases, what are the elements that
the plaintiff must prove?
Which of the following is not a restrictive indorsement?
a. “Pay only Jane Doe.”
b. “For deposit.”
c. “Pay any bank.”
d. “For collection.”
In the case of Thomas v. Lloyd, the court held:
a. the use of land by a partnership is determinative of the fact that the land is owned by
the partnership.
b. whether real estate titled in the names of individual partners is partnership property is
a question of fact, and the burden of proof is on the one alleging that the actual
ownership does not match the names on the legal title.
c. payment of real estate taxes out of partnership funds is determinative of the fact that
the land is a partnership asset.
d. payment of promissory note payments for the real estate out of partnership funds is
determinative of the fact that the realty is a partnership asset.
a. List and summarize the situations where a contract is discharged by agreement of the
parties.
b. List and summarize the situations where a contract is discharged by operation of law.
The board of directors may issue bonds without the authorization or consent of the
shareholders.
a. True
b. False
Leases of personal property exceed $100 billion annually and are governed by Article
2A of the UCC.
a. True
b. False
The United States belongs to which multinational treaty for patent protection?
a. The Madrid Protocol.
b. The Paris Convention for the Protection of Industrial Property.
c. The Berne Convention.
d. The WIPO Treaty.
The characteristics of a totten trust include:
a. it is a joint bank account opened by the settlor of the trust.
b. it is tentative.
c. transfer of ownership is complete only on the depositor’s death.
d. All of these.
Which of the following ways is NOT a way to create an easement?
a. The landowner agrees to it orally.
b. It is necessary for access to the land.
c. It is taken by using the land openly in a period of years.
d. All of these.