A life estate gives the owner more rights than a fee simple.
Under Section 552 of the Restatement (Second) of Torts, an accountant is liable for his
or her negligence to any member of a limited class of intended users for whose benefit
the accountant has been employed to prepare the client’s financial statements or to
whom the accountant knows the client will supply copies of the financial statements.
An issuer of securities must provide a copy of the registration statement and a copy of
the prospectus to the Securities and Exchange Commission.
Intangible personal property includes equipment, vehicles, furniture, computers,
clothing, and jewelry, while tangible personal property includes securities, patents,
trademarks, and copyrights.
Under the Revised Uniform Limited Partnership Act, as a matter of law, defective
formation of a limited partnership would not affect the liability of a limited partner.
Under the Uniform Limited Liability Company Act, the articles of organization of a
limited liability company must set forth whether the limited liability company is to be
“manager-managed.”
The “act of state” doctrine states that judges of one country are free to question the
validity of all acts committed by another country.
One advantage of utilitarianism is that there is no need for measuring the good of an
action for society.
Stanley Smith is an agent of the XYZ Company and signs a check as an authorized
agent of the company. If he signs the check, “Stanley Smith, Agent”, he will have no
liability and XYZ will have full liability if the check were dishonored.
The debtor has the exclusive right to file a plan of reorganization with the bankruptcy
court within the first 150 days after the date of the order for relief.
A corporation has the same basic rights to perform acts and enter into contracts as an
actual person.
The federal government’s requirement that males (upon reaching the age of 18) must
register for a military draft but that females do not have to register for the draft has been
found constitutional by the United States Supreme Court.
There are no policies of insurance available to cover loss and damage to renter’s
possessions.
Corporate citizenship theory contends that corporations owe a duty to promote the same
social goals as individual members of society.
A principal owes a duty to indemnify the agent for any losses the agent suffers because
of the principal’s conduct.
A collective membership mark identifies membership in an organization, but does not
identify goods or services.
The fair price rule as applied to tender offers provides that any increases in price paid
for shares tendered must be offered to all shareholders, even those who have previously
tendered their shares.
Effective antitrust law existed as part of the common law in the early days of the United
States.
A bailee is a seller who has passed the risk of loss to the buyer, but has not transferred
the title.
The community property method of co-ownership applies only to married couples.
An insurance agent is an independent contractor who represents a number of insurance
companies.
With a no-fault divorce, a spouse wishing to obtain a divorce merely has to assert
irreconcilable differences with his or her spouse.
All states have enacted the Model Nonprofit Corporation Act, which governs the
formation, operation, and termination of not-for-profit corporations.
A minor can expressly disaffirm a contract orally, in writing, or through his or her
conduct.
A child becomes emancipated if he or she leaves his or her parents and voluntarily lives
on his or her own.
The CAN-SPAM Act provides victims of spam the right to bring civil lawsuits against
spammers.
The terms “accommodation party” and “cosigner” are synonymous.
Limited partners invest capital, manage the business, and are personally liable for
partnership debts.
Under the UCC, an accommodation shipment is considered a counteroffer.
The Food and Drug Administration has no authority to regulate medicinal devices such
as heart pacemakers.
All contracts entered into by minors are void.
Unless otherwise agreed, the buyer or lessee has the right to inspect goods that are
tendered, delivered, or identified in a sales or lease contract prior to accepting or paying
for them.
A party who employs another person to act on his or her behalf is called an authority.
Under the Securities Act of 1933, at the latest, a final prospectus must be provided to a
purchaser of securities by the time the sale is closed.
“Multilateral” treaties are between two nations, while “bilateral” treaties involve more
than two nations.
Which of the following is not a right guaranteed by the Bill of Rights?
A) the right to freedom of speech
B) the privilege against self-incrimination
C) the right to a jury trial in a criminal case
D) the prohibition against double jeopardy
E) the right to equal protection under the law
Lewis owns an electronics store. On May 1, Marilyn comes into the store and sees a
60-inch television that she likes for $1,000. Marilyn is unsure about purchasing the
television. Lewis offers to sell the television to Marilyn for $800 and that the offer will
be good until June 1. Lewis writes out the offer and signs it. On May 15, Ann comes
into the electronics store and Lewis sells Ann the 60-inch television for $1,000. On May
20, Marilyn returns to the store and tenders $800 to Lewis for the television. Lewis tells
Marilyn he has already sold the television. Marilyn then has to buy the same television
at another store for $1,200. Does Marilyn have a cause of action for breach of contract?
If so, for how much?
A) No, Marilyn cannot sue Lewis because no contract has been breached.
B) Yes Marilyn can sue Lewis for a brand new television.
C) Yes, Marilyn can sue Lewis for the difference between $800 and the price she had to
pay of $1,200.
D) Yes, Marilyn can sue Lewis and receive the $1,200 she had to pay for the other
television.
E) Yes, Marilyn can sue Lewis and receive $800, the price of the television that Lewis
offered.
Kantian ethics is also known as:
A) duty ethics.
B) utilitarian ethics.
C) ethical fundamentalism.
D) ethical relativism.
E) the social contract theory of morality.
Which of the following factors can be used as a legal bona fide occupational
qualification?
A) sex
B) religion or race
C) race or sex
D) color or race
E) color, religion or sex
When there has been an assignment of rights under a contract, who has a duty to notify
the obligor of the assignment?
A) the assignor
B) the assignee
C) the assignor and the assignee
D) neither the assignor nor the assignee
E) the party closer to the obligor geographically
The “motivation” test and the “work-related” test are used to determine whether:
A) an employer is responsible for the intentional tort of an employee.
B) an employer is responsible for the negligence of an employee.
C) an employee is responsible for a contract entered into on behalf of the employer.
D) an employee is responsible for the tort he commits while on the job.
E) an employee is responsible for negligence committed while on the job.
John is a successful salesperson, but his brother has always had difficulty paying his
bills. His brother wants to borrow some money from a bank, but the bank will not lend
the money unless John will orally guarantee to repay the loan if his brother cannot. John
does so. John’s guaranty to repay is:
A) enforceable, because in general, guaranty contracts do not need to be in writing.
B) unenforceable, because in general, guaranty contracts need to be in writing.
C) enforceable, because the main purpose of the loan and the guarantee was to benefit
John.
D) unenforceable, because his brother did not sign any agreement.
E) enforceable only if the bank can show that John had guaranteed debts for the brother
before and paid them without a written document being in place.
Which of the following is not a general function of the law?
A) keeping the peace
B) shaping moral standards
C) promoting social justice
D) maintaining the status quo
E) enforcing an international code of ethics
Which of the following is currently proposed but not yet in existence?
A) the Free Trade Area of the Americas
B) the Central America Free Trade Agreement
C) the Association of South East Asian Nations
D) the North America Free Trade Association
E) the World Trade Organization
The bankruptcy estate is created upon the ________ of a bankruptcy case.
A) commencement
B) continuance
C) prosecution
D) discharge
E) termination
Which of the following are two terms for the same concept or situation?
A) implied-in-law contract and implied-in-fact contract
B) implied-in-law contract and quasi-contract
C) implied-in-fact contract and quasi-contract
D) unilateral contract and informal contract
E) formal contract and implied-in-law contract
A contract with an illegal object is ________.
A) conditionally enforceable
B) voidable by the person disadvantaged in the contractual relationship
C) voidable by either party
D) enforceable at the discretion of the presiding trial court judge
E) void
The general jurisdiction trial court in the federal system is called the:
A) United States Trial Court.
B) United States Circuit Court.
C) United States General Court.
D) United States District Court.
E) United States Inferior Court.
If a certified public accountant knowingly and intentionally performs a fraudulent audit
of a company, the accountant will most probably be liable to:
A) any individual or company that suffered a loss as a result of the fraud.
B) only the corporation and those third parties who the accountant knew would rely on
the audit.
C) only the corporation and those third parties belonging to the class of intended users
of the audit.
D) only those parties in privity of contract with the accountant.
E) the corporation, even if the corporation was aware of the fraud and did not rely on
the audit results.
Which of the following are examples of when the secretary of state can obtain
administrative dissolution of a corporation?
A) There are no situations under which the secretary of state can obtain administrative
dissolution of a corporation.
B) If the corporation failed for thirty days to maintain a registered agent in the state.
C) If the corporation failed to pay its franchise fee.
D) If the corporation failed to pay its transaction fee.
E) If the corporation failed to file a semi-annual report.
In Chodos v. West Publishing Company, Inc., in which the defendant refused to publish
a treatise after the author had completed the document as agreed, what was the result?
A) As a matter of law, West had the right in its sole discretion to refuse to publish the
document.
B) West had breached its contract with the author, because he had completed the treatise
as agreed.
C) West had substantially complied by giving the author notice that the treatise likely
would not sell.
D) The author had failed to periodically ask West if the agreement was still in place,
which barred the author from any recovery.
E) The author had no right to rely on West’s statements, because he had not received
any partial payment.
A general partnership is also known as a(n) ________ partnership.
A) conditional
B) unconditional
C) express
D) implied
E) ordinary
The concept of federal law taking precedence over state or local law is commonly
called the ________ doctrine.
A) preemption
B) circumvention
C) supremacy
D) assumption
E) preeminence
A(n) ________ fee is a fee for such things as advertising and promotional campaigns
and administrative costs.
A) line-item
B) royalty
C) recurring
D) incidental
E) assessment
Billy Bob orders a custom “Ten Gallon Cowboy Hat”, size 7 3/4 in black, from
Cowpoke Outfitters. It’s delivered C.O.D. to his home. When it’s delivered, Billy Bob
pays for the hat and then upon opening the package, discovers that it’s a white size 7
1/4. Which of the following is the most accurate statement regarding Billy Bob’s legal
remedy in this situation?
A) Billy Bob can reject the hat as nonconforming.
B) Billy Bob cannot revoke his acceptance because he paid for it, which constitutes a
non-revocable acceptance.
C) Billy Bob cannot revoke because he had a duty to inspect, and waiving his duty put
him at risk.
D) Billy Bob cannot revoke because while style is important, color and size cannot be
considered substantial impairments that constitute nonconformity.
E) Billy Bob can reject the hat and if so, must return it at his cost.
Stare decisis is the doctrine of:
A) separation of powers so that decisions are not made by a single branch of
government.
B) following precedent so that legal principles in earlier cases are followed in later
cases.
C) constitutional principles applied when making any decision.
D) spending long periods of time looking at facts before making a decision.
E) legislative law approved by judges.
Sarah is the president and CEO of a company that is experiencing financial problems.
She has decided to file for bankruptcy, and has asked you for advice. If she wants to
close the business, she should file for:
A) Chapter 7.
B) Chapter 9.
C) Chapter 11.
D) Chapter 13.
E) Chapter 15.
Limited liability company ________ regulate the formation, operation, and dissolution
of LLCs.
A) decrees
B) mandates
C) codes
D) decisions
E) annotations
With respect to “Section 11” actions under the Securities Act of 1933 and Rule 10b-5
actions under the Securities Exchange Act of 1934, intent must be proven:
A) in both Section 11 and Rule 10b-5 actions.
B) in Section 11 actions, but not in Rule 10b-5 actions.
C) in Rule 10b-5 actions, but not in Section 11 actions.
D) in neither Section 11 actions, nor in Rule 10b-5 actions.
E) in both Section 11 and Rule 10b-5 actions, but only if a possible jail sentence is
involved.
A member’s ownership interest in a limited liability company is called a(n):
A) shareholder interest.
B) priority interest.
C) distributional interest.
D) possessory interest.
E) investor interest.
An informal contract is also known as a(n) ________ contract
A) unilateral
B) bilateral
C) executed
D) executory
E) simple
Which of the following is true about the European Union?
A) Member nations have not given up any sovereignty to the European Union.
B) Customs tariffs have been eliminated between member nations and nonmember
nations.
C) A central bank for the European Union has been established.
D) The European Union includes several nations from Northern Africa with
E) Its primary purpose is military defense.
When the states ratified the United States Constitution, they delegated certain powers
called ________ powers to the federal government.
A) holistic
B) reserved
C) shared
D) enumerated
E) prima facie
________ is an electronic stock market.
A) SANQAD
B) NASDAQ
C) ANSQAD
D) QANSAD
E) DANQAS
A government-owned corporation is also known as a(n) ________ corporation.
A) private
B) equitable
C) formal
D) public
E) quasi-
The directors and officers of a corporation must act within the authority conferred upon
them by the state’s corporation code, the articles of incorporation, the corporate bylaws,
and the resolutions adopted by the board of directors. This duty is called the duty of
________.
A) reasonable care
B) loyalty
C) good faith
D) obedience
E) a fiduciary
The purpose of a proxy is to:
A) allow a shareholder to transfer shares to another.
B) allow a shareholder to place shares in trust.
C) allow a shareholder to assign his or her right to vote.
D) allow a shareholder to assign his or her dividends to another.
E) initiate a tender offer.