A banking day is any day that the particular bank is open to the public for carrying on
substantially all banking functions.
An advertisement is considered an offer if it is so definite or specific that it is apparent
that the advertiser has the present intent to bind himself or herself to the terms of the
advertisement.
Software licenses do not typically contain warranty disclaimers and limitation on
liability clauses.
The two general classifications of air pollution sources are “mobile sources” and
‘stationary sources.”
Only people specifically identified by name in a contract may have the rights of an
intended beneficiary.
Rescission is available for a contract involving duress.
Common law refers to the compilation of similar laws followed from state to state.
If there is no agreement as to the amount of compensation to be paid the agent, the law
implies a promise that the principal will pay the agent the customary fee paid in the
industry.
A gift is voluntary transfer of property with consideration.
Title VII of the Civil Rights Act of 1964 applies to employers with ten (10.) or more
employees.
The “part performance” exception to the Statute of Frauds allows a court to partially
enforce any oral contract that is required to be in writing under the Statute of Frauds.
There are three (3.) major rule of liability that a state can adopt in determining whether
an accountant is liable in negligence to third parties:
the Supramares doctrine;
Section 552 of the Restatement (Second) of Torts;
the reasonableness standard.
It is necessary to discuss the degree of competition in the issuer’s industry in a
registration statement.
In a novation, only one of the original parties is replaced by a new party.
The threat to commit extortion unless someone enters into a contract constitutes duress.
Under the Electronic Signature in Global and National Commerce Act, one of the ways
that a digital signature can be verified is by something the signatory knows, such as a
secret password.
The person who receives the assets of a trust upon its termination is known as the
“income beneficiary.”
If a secured creditor objects to a debtor payment plan, the court may still confirm the
plan under some circumstances.
The United States Declaration of Independence established the structure of the federal
government.
Under the Fair Labor Standards Act, an employer may reduce the minimum wage by an
amount equal to the reasonable cost of food and lodging provided to employees.
In a “hung jury” scenario, the government may choose to retry the case before the same
trial court judge and jury.
Because acceptance of goods triggers the obligation to pay for them, acceptance can
occur only by an affirmative statement of the buyer that the buyer has accepted the
goods.
The collection process is governed by Article 2 of the Uniform Commercial Code.
Common garnishees include employers who possess wages due a debtor.
Sellers and lessors are not required to make express warranties.
In order to be patentable, an invention must be proven to be able to be marketed
profitably.
Payment of interest on loans is prohibited under Hindu law.
Once a check becomes stale, the bank is no longer obligated to pay it.
If fifty percent of employees vote for the union, the union wins the election.
Constructive delivery is also known as physical delivery.
Real property is immovable or attached to immovable land or buildings, whereas
personal property is movable.
A successful “bystander recovery” case requires the plaintiff to prove the following
elements: 1. a relative was killed or injured by the defendant;
the plaintiff suffered emotional distress;
the plaintiff’s mental distress resulted from a later observance of the accident scene.
If, after a public administrative hearing, the FTC finds a violation of Section 5 of the
FTC Act, it may issue an affirmative disclosure to consumers.
The Uniform Partnership Act treats partnerships as separate legal entities.
Many states have enacted ________ that are aimed at protecting companies with ties to
the state. These laws protect against the hostile acquisition of corporations incorporated
in or doing business in the state.
A) blitzkrieg statutes
B) blitzkrieg ordinances
C) antitakeover statutes
D) antitakeover ordinances
E) eminent domain statutes
Section 16(a) of the Securities Exchange Act of 1934 defines any person who is an
executive officer, a director, or a 10-percent shareholder of an equity security of a
reporting company as a ‘statutory insider” for Section 16 purposes.
The National Labor Relations Act contains provisions addressing unfair labor practices
committed by:
A) employers.
B) unions.
C) employers and unions.
D) employees, but not employers or unions.
E) mid-level managers.
Which term can be used to create a shipment contract?
A) F.O.B. place of destination
B) Ex-ship
C) No-arrival, no-sale
D) F.A.S.
E) Common carrier point of shipment
A holder in due course:
A) has greater obligations to pay an instrument than a mere holder.
B) must notify subsequent transferees of his holder in due course status.
C) can obtain greater rights to payment of an instrument than a holder.
D) can give greater rights to a transferee than he has as a holder in due course.
E) has less rights to payment of an instrument than a holder.
Under which types of delegation of duties does the delegator remain liable for the
performance of the duty?
A) assumption of duties
B) declaration of duties
C) both an assumption of duties and a declaration of duties
D) neither an assumption nor a declaration of duties
E) only when a contract for personal services in involved
From the assignor’s perspective, the unconditional assignment of a contract right
________ all the assignor’s rights, including the right to sue the obligor directly for
non-performance.
A) preserves
B) enhances
C) reduces
D) extinguishes
E) codifies
Which of the following is not a recognized source of law in the United States?
A) constitutions
B) treaties
C) deified law
D) executive orders
E) judicial decisions
Which of the following is an essential element of larceny?
A) the use of force
B) the use of fear
C) the entry of a building
D) the taking of another person’s property that is not burglary.
E) the use of force, the use of fear, and the entry of a building.
Under the doctrine of ________, there must be proof that the parties had substantially
unequal bargaining power, that the dominant party misused its power in contracting,
and that it would be manifestly unfair or oppressive to enforce the contract.
A) unconscionability
B) substantial performance
C) specific performance
D) res ipsa loquitur
E) equity
A(n) ________ is a ________ draft that arises when credit is extended with the sale
of goods.
A) trade acceptance; time
B) trade acceptance; sight
C) allonge; time
D) allonge; sight
E) certificate of deposit; time
In terms of the jurisdiction of federal courts, diversity of citizenship occurs if a lawsuit
involves:
A) citizens of different states.
B) citizens of different races.
C) citizens of different cultures.
D) citizens of different counties.
E) citizens of the same state.
The due diligence defense requires that the expert prove that they performed a
________ investigation of the issuer’s financial statements.
A) stringent
B) public
C) strict
D) detailed
E) reasonable
Which of the following is true about a buyer’s right of inspection?
A) This right must be agreed to in the contract in order for it to apply.
B) This right exists even if not mentioned in the contract, and the seller has the sole
right to determine the time and place the right may be exercised.
C) This right exists even if not mentioned in the contract, and the buyer has the sole
right to determine the time and place the right may be exercised.
D) If not mentioned in the contract, the buyer has the right to inspect goods in a
reasonable time, place and manner prior to accepting or paying for them.
E) If not mentioned in the contract, the buyer has the right to inspect goods in a
reasonable time, place and manner once the goods have been accepted.
Which of the following is a real defense?
A) breach of contract
B) material alteration
C) fraud in the inducement
D) ordinary duress
E) mental illness that makes an ordinary contract voidable
A holder of a negotiable instrument is:
A) anyone who has possession of an instrument.
B) anyone who is rightfully in possession of an instrument.
C) anyone who is in possession of an instrument that is payable to bearer or an
identified person who is in possession of an instrument payable to that person.
D) anyone who is in possession of an instrument payable to that person.
E) anyone who is in possession of an instrument payable to that person if the person has
indorsed the instrument.
The crucial factor in determining whether someone is an independent contractor or an
employee is the ________.
A) amount of time the worker has been associated with the principal
B) degree of control the principal has over the worker
C) degree of skill necessary to complete the assigned task
D) the method of paying the worker, whether by time or by job
E) job title the principal assigns to the worker
Under Article 9 of the Uniform Commercial Code, which of the following is true about
a situation where the buyer purchases goods that were subject to a security interest in
the inventory of the seller?
A) A buyer in the ordinary course of business from a merchant seller takes the goods
free of any security interest in the merchant seller’s inventory.
B) The buyer can never take title to goods if, at the time of sale, they are subject to a
security interest granted by the seller.
C) Buyers cannot return the goods if they are nonconforming.
D) The goods must be delivered to a common carrier in order for title to pass.
E) The buyer cannot sell those goods to any other party until all earlier security interests
have been terminated.
A general partner who is offered an opportunity on behalf of the partnership cannot
________ the partnership opportunity.
A) avert
B) avoid
C) usurp
D) deny
E) indemnify
What kind of damages will be awarded when there is no actual financial loss?
A) special damages
B) consequential damages
C) nominal damages
D) compensatory damages
E) There are no damages that a court will award in the absence of an actual financial
loss.
A proxy statement must include information about what?
A) who is soliciting the proxy, and the matter for which the proxy is being solicited
B) who is soliciting the proxy, and the estimated likelihood that the matter will be
approved
C) who is soliciting the proxy, and the number of proxies already executed on the
matter
D) who is soliciting the proxy, and pro forma financial statements, assuming that the
matter for which the proxy is sought is approved
E) the matter for which the proxy is being solicited, and the estimated likelihood that
the matter will be approved
In evaluating whether management’s actions are appropriate in response to a hostile
tender offer, the primary concern is usually that management might have improperly:
A) demanded too high of a price for the corporation’s stock.
B) put its own interests ahead of those of the shareholders.
C) put persons on the board of directors who favor management.
D) tried to implement changes to the corporate structure too quickly.
E) failed to take sufficient defensive measures.
The Americans with Disabilities Act requires that:
A) persons with qualifying disabilities be given preference in hiring whenever possible.
B) applicants for jobs be asked about their disabilities in order to identify them.
C) employers make reasonable accommodations to accommodate employee disabilities.
D) persons with disabilities notify potential employers of disabilities before being hired.
E) employers take reasonable steps to reach disabled individuals in their hiring efforts.
Zora is a hairdresser at “Abandon All Hope” beauty salon. Although Zora is not the best
hairdresser in town, she is cheap and has a loyal following. When Zora started to work
at “Abandon All Hope” she signed a covenant not to compete agreeing with the owner
that for a period of six months after she leaves “Abandon All Hope” she will not work
as a hairdresser in the same town. One day Zora decided that she had enough customers
to do well on her own and that she was tired of paying commissions to the owner. Zora
moved out and opened her own shop down the street called “Hair for Hire.” The owner
of “Abandon All Hope” sues Zora. Who should win and why?
Jim is the manager of an electronic store. Tom is an electronics distributor. On August
1, Jim calls Tom and orders 25 video game systems for $6,000. On August 5, Tom
sends Jim an e-mail confirming his order of 25 video game systems for $6,000. On
August 20, Jim replies to Tom’s email and Jim says he no longer wants the 25 video
game systems. Tom ignores Jim’s emails and ships the video game systems to Jim. Tom
sues Jim for $6,000, who wins and why?
A) Jim wins because the Statute of Frauds has not been satisfied.
B) Jim wins because the Statute of Frauds has been satisfied, but Jim properly rejected
the order.
C) Jim wins because although a contract was created over the phone, Jim properly
rejected the order.
D) Tom wins because a contract was created when he sent his e-mail and Jim did not
properly reject the order.
E) Tom wins because an irrevocable contract was created when Jim placed his order
over the phone.
Under the law, a tort can be described as:
A) any violation of an ethical duty.
B) another term for a crime or misdemeanor
C) any action done in violation of a prior agreement which allows the victim to recover
damages
D) any civil wrong that allows the injured person to recover damages.
E) any conduct by one party that is objected to by another
What is the consequence of purchasing insurance in a situation where one does not have
an insurable interest?
A) This will be considered a violation of state blue laws, making the contract
unenforceable.
B) Due to the freedom to contract, the contract will be enforceable in the absence of
fraud or other wrongdoing.
C) The insurance contract will be considered an illegal gambling contract.
D) The policy holder will have a reasonable period of time to obtain an insurable
interest.
E) There is no consequence, and the policy will be enforced.
The moral theory of ethical fundamentalism can best be characterized by:
A) the consultation of an outside source, such as a book or a person, for ethical
guidance.
B) the belief that the moral rules should be determined by persons who have a “veil of
ignorance” about their place or station in society.
C) the belief that a person must decide what course of action is proper based on that
person’s own set of beliefs or feelings.
D) determining which course of action produces the greatest amount of good for the
greatest number of people.
E) a set of universal rules based on reasoning which must be applied in all situations
and is characterized by reversibility.
Which of the following is false regarding the termination of a bailment?
A) A bailment generally expires at a specified time, or when a certain purpose is
accomplished.
B) A bailment “at will” can be terminated at any time by either the bailor or the bailee.
C) A gratuitous bailee cannot generally terminate a fixed-term bailment before the
expiration of its term.
D) Upon termination of the bailment, the bailee is legally obligated to do as the bailor
directs with the property.
E) Where commingled fungible goods are involved, identically equivalent goods may
be returned by the bailee.
What did the United States Supreme Court decide in National Labor Relations Board v.
Exchange Parts Company, involving an employer who conferred new economic
benefits on its employees just before a union election that the employer subsequently
won?
A) The employer did not commit an unfair labor practice, because the employer only
provided benefits, and did not make any threats.
B) The employer did not commit an unfair labor practice, because the employer did not
expressly condition receipt of the benefits on voting against the union.
C) The employer did not commit an unfair labor practice, because the benefits were not
significant enough to have affected the election.
D) The employer committed an unfair labor practice, and the United States Supreme
Court ordered a new election.
E) The employer committed an unfair labor practice, but the National Labor Relations
Act did not allow the United States Supreme Court to order a new election.
Which of the following statements is true about treaties?
A) Treaties are valid only if they do not conflict with a statute passed by Congress.
B) Treaties are valid only if they do not conflict with a statute passed by Congress or
any of the state legislatures.
C) The U.S. Constitution provides that the president, with the advice and consent of
two-thirds of the Senate, may enter into treaties with foreign governments.
D) The U.S. Constitution provides that the president, with the advice and consent of
three-fourths of the Senate, may enter into treaties with foreign governments.
E) The U.S. Constitution provides that the president, with the advice and consent of
one-half of the Senate, may enter into treaties with foreign governments.
When goods are entrusted to a merchant, what type of title does the merchant have in
the goods?
A) void
B) voidable
C) no title
D) restricted title
E) valid title
Xanadu Company wants to acquire Yazoo Corporation. Xanadu gives some of its own
Xanadu stock to each of the shareholders of Yazoo in exchange for the Yazoo stock.
Once this is done, Xanadu owns all of the Yazoo stock, but the company does nothing
further with the Yazoo stock. This transaction is called a:
A) merger.
B) consolidation.
C) purchase of assets.
D) share exchange.
E) hostile takeover.
Which branch of government has the power to enact the law?
A) executive
B) legislative
C) judicial
D) state
E) federal
Freedom of religion under the U.S. Constitution:
A) comes from the Establishment Clause as well as the Free Exercise Clause.
B) applies only to those religions in existence on the date the Constitution became
effective.
C) gives practitioners absolute rights to take part in actions which are religious-based.
D) allows the government to establish an official religion or religions so long as citizens
remain free to practice any other religion they choose.
E) comes only from the Establishment clause.