Community property does not include a ring owned by the wife prior to the marriage.
a. True
b. False
Specific lender usury statutes rather than the general usury statute generally apply to
real estate mortgages and small consumer loans.
a. True
b. False
In the federal system, appeals from the Bankruptcy Court and Tax Court are heard
directly by the U.S. Supreme Court.
a. True
b. False
Banks like electronic funds transfers because they eliminate the float time that a drawer
enjoys on a checking account and the paperwork involved in processing checks.
a. True
b. False
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 not in effect)?
a. 45,001
b. 37,501
c. 30,001
d. 50,001
If Mary allows the seller, Sellmart Co., four weeks to repair the defects in her kitchen
set and they have tried but have not done a good job at it, she may revoke her
acceptance if she:
a. notifies Sellmart of revocation.
b. does not use the table and chairs.
c. could not discover the defects easily.
d. inspected the goods herself.
Two or more sureties bound for the same debt of a principal debtor are known as:
a. absolute sureties.
b. cosureties.
c. conditional guarantors of collection.
d. co-creditors.
A counterclaim is a document filed by a defendant denying the allegations of the
complaint.
a. True
b. False
In most states, a consumer is legally obligated once he has signed a contract, unless he
rescinds the binding credit obligation within two to three days if the sale was solicited
in his house.
a. True
b. False
A promoter who enters a preincorporation contract in the name of the corporation
usually remains liable on the contract even if the corporation adopts it.
a. True
b. False
If United Widgets lowers its price to all buyers of 10 or more widgets because it costs
United less to sell that quantity, it is not a violation of the Robinson-Patman Act.
a. True
b. False
What contractual defenses are available to those parties involved in surety
relationships?
a. The nonexistence of the principal debtor’s obligation.
b. Discharge of the principal debtor’s obligation.
c. Modification of the principal debtor’s contract.
d. All of these.
The appellate court does not hear any new evidence but rather takes the case upon the
record, abstracts, and briefs.
a. True
b. False
Ethical issues in business settings include corporate governance, whistle-blowing,
shareholder voting, and management’s duties to shareholders.
a. True
b. False
In Robinson v. Durham, the court found:
a. the Robinsons were good faith purchasers for value when they bought the car for
their business, and they had good title which they passed to Durham.
b. the Robinsons had a voidable title, and they passed good title to Durham, who was a
good faith purchaser for value.
c. there was a breach of warranty of title between the Robinsons and Durham.
d. the Robinsons obtained no title from the thief, but they passed good title to Durham
since he was a good faith purchaser for value.
Anita tells Bob that unless Bob pays her $5,000, she will tell his customers that he was
once arrested for shoplifting as a teenager. The fact that Bob shoplifted as a teenager is
true.
a. In most jurisdictions Anita has committed the crime of extortion.
b. Anita has committed the crime of defamation.
c. Anita has committed the crime of bribery.
d. In all jurisdictions in the United States, Anita would have to have received the money
from Bob to be charged with a crime.
If a person paying an instrument subject to the impostor rule fails to exercise ordinary
care, the issuer may recover from the payor to the extent the payor’s negligence
contributed to the loss.
a. True
b. False
Assignment of rights is the voluntary transfer to a third party of the rights arising from a
contract.
a. True
b. False
Directors may vote by proxy when they are not able to be present for a meeting.
a. True
b. False
Action taken by private citizens cannot constitute state action.
a. True
b. False
The primary function of the law is to maintain stability in the social, political, and
economic system while simultaneously permitting change.
a. True
b. False
As a general rule:
a. the defenses available to intentional torts and negligence are interchangeable.
b. if a plaintiff has established by a preponderance of the evidence all the required
elements of a negligence action, the plaintiff will automatically recover damages.
c. any defense to an intentional tort is also available in an action for negligence.
d. more defenses are available for intentional torts than are available in negligence
cases.
An agent must act solely in the interest of his principal in all acts that would affect the
principal’s business.
a. True
b. False
“Value” under Article 9 of the UCC is defined as including:
a. consideration under contract law.
b. a binding commitment to extend credit.
c. antecedent debt.
d. All of these.
Each trust has which of the following?
a. Executor.
b. Corpus.
c. Testator.
d. All of these.
Negotiable instruments:
a. include drafts, promissory notes, assignments, and certificates of deposit.
b. are used primarily for smaller transactions.
c. in the form of checks have decreased in use since 2000.
d. have increased in usage to the point where they are now approximately equal to
usage of cash for payments.
Matt tells Ron that the snow boots he is selling are capable of protection at temperatures
of 20° below zero. Ron orders a pair for his trip to Greenland. Upon delivery the box
states “will protect your feet in temperatures down to 30° below zero.” The first night’s
temperature goes down to 27 below. Ron suffers frostbite on all of his toes. Ron then
sues for breach of warranty. What is the result?
a. Breach, because the latter express warranty is valid.
b. No breach because Matts statement was merely opinion.
c. No breach because Matt said 20° below zero.
d. No breach because Matt is allowed to be wrong.
Margaret has $3,200 cash after selling off her television, sound system, and personal
computer. She has debts of $4,800 owing to the following creditors:
Anna – $900
Bob’s Shop – $1500
Hyatt’s – $2100
Jones – $300
If they all agree to a composition, how much will Hyatt’s be able to collect?
a. $2,100.
b. $1,400.
c. $700.
d. $1,050.
Alice is browsing in a commercial art gallery when she sees a painting that she likes.
Arthur, who is the manager of the gallery, tells her that in his opinion the painting is a
genuine Leroy Neiman work. Based upon that representation, Alice buys the work for
$5,000. She later discovers that the painting is only a cheap copy of the original that is
worth no more than $50. Arthur has:
a. breached an express warranty to Alice that the painting is a Neiman work.
b. breached the warranty of merchantability.
c. not breached a warranty because he was merely expressing his opinion.
d. breached an express warranty, the warranty of merchantability, and the warranty of
fitness for a particular purpose.
The common law system of law uses the inquisitorial system of determining disputes.
a. True
b. False
A blind person will be held to the standard of care of the reasonable blind person rather
than that of the reasonable sighted person for purposes of determining negligence.
a. True
b. False
If Sean, a shareholder who dissents to a corporate action, is entitled to appraisal
remedies, they will be the:
a. fair value of his shares as of the day the corporation agrees to purchase the shares.
b. fair value of the shares immediately before the action to which he objects is taken.
c. average purchase price for the shares during the preceding 30 days.
d. par value of the shares as set forth in the articles of incorporation..