Which of the following must obtain a National Pollution Discharge Elimination System
(NPDES) permit?
A. A manufacturing firm buries its hazardous waste materials in a special dump.
B. A factory discharges industrial wastewater from a point source into a river.
C. An apartment building discharges domestic sewage to a publicly owned treatment
works.
D. A chemical plant discharges wastewater to a publicly owned treatment works.
In a novation:
A. the original obligor is completely discharged from his/her obligations under the
contract.
B. the original obligee is completely discharged from his/her obligations under the
contract.
C. the original obligor remains secondarily obligated.
D. both the original obligee and the original obligor remain obligated.
What section of the UCC grants a warranty for fitness for particular purpose?
A. 2-315
B. 2-102
C. 3-115
D. 7-104
Which Act did the Congress envision as a vehicle in 1914 for attacking practices that
monopolists employed to acquire monopoly power?
A. Sherman Act
B. Clayton Act
C. Robinson-Patman Act
D. Smith-Lever Act
If a plaintiff proves that it has suffered a direct injury by another company in violation
of the Sherman Act, it is entitled to recover:
A. twice the amount of loss it suffered as a result of the violation, plus court costs and
attorney’s fees.
B. twice the amount of loss it suffered as a result of the violation.
C. only the amount of loss it suffered as a result of the violation, plus court costs and
attorney’s fees.
D. three times the amount of loss it suffered as a result of the violation, plus court costs
and attorney’s fees.
An exception to the general rule on buyer receiving better title than seller is that if
goods are entrusted to a merchant who deals in goods of that kind, the merchant has:
A. the power to keep rights to the goods, even if the goods are sold to a buyer.
B. the power to transfer all rights of the entruster to a buyer in the ordinary course of
business.
C. no power to sell the goods without the physical presence of the entruster.
D. the power to deprive the entruster from any benefit so caused by the transaction.
_____ attempts to bar mergers that may have an anticompetitive effect.
A. Section 7 of the Clayton Act
B. Section 2 of the Sherman Act
C. Section 3 of the Clayton Act
D. Section 1 of the Sherman Act
Which of the following is nonnegotiable?
A. A check written “Pay James Watson.”
B. A note written “I promise to pay James Watson.”
C. A note written “I promise to pay James Watson or bearer.”
D. A draft payable “to the order of bearer.”
A _____ is a partnership whose partners have elected limited liability status.
A. limited liability company
B. professional corporation
C. professional partnership
D. limited liability partnership
A common variation of a(n) _____ agreement is the requirements contract.
A. exclusive dealing
B. joint venture
C. reciprocal dealing
D. formal written
The new revision of Article 3 no longer considers _____ as restrictive indorsements.
A. indorsements for deposit
B. conditional indorsements
C. indorsements directing the indorsee to act for someone else’s benefit
D. indorsements for collection
Which of the following observations is true under the UCC?
A. Consideration is not required to support a modification of a contract for the sale of
goods.
B. If there is a conflict between the express terms of the contract and trade usage, the
trade usage will prevail.
C. The buyer or the seller cannot delegate their duties to someone else under any
circumstance.
D. The UCC does not alter the basic contract law when applied to performance of
contracts.
Under the Model Business Corporation Act, a corporation’s existence begins:
A. only after the promoters substantially comply with each of the mandatory conditions
precedent to incorporation and hold an organization meeting.
B. only after the articles of incorporation are filed with the secretary of state.
C. when the secretary of state returns to the corporation a copy of the articles stamped
“Filed.”
The common law has, traditionally, allowed plaintiffs to recover for libel without proof
of _____.
A. punitive damages
B. criminal damages
C. liquidated damages
D. actual damages
Raider Corporation (RC) attempted to take over Targetnorth Corporation (TC) using a
tender offer. The tender offer price was twice the market price for TC shares. TC
management opposed this takeover, as a result of which it failed. Shareholders of TC
who had hoped to sell their shares at a large profit want to sue the management of TC
for spoiling the takeover. If they sue TC management, will the shareholders succeed?
A. Yes, if they can show that TC management did not carefully study the RC tender
offer.
B. Yes, if they can show that they would have been much better off accepting the tender
offer.
C. No, the business judgment rule protects management in all cases of resisting a
takeover.
D. No, even if the shareholders can show that management resisted the takeover in their
own self-interest.
A fundamental difference between a promissory estoppel and traditional contract
principles is that a promissory estoppel protects:
A. reliance.
B. bargains.
C. agreements.
D. consideration.
The negotiation of an instrument made in breach of duty is subject to _____ before the
instrument has been negotiated to a transferee who can qualify as a holder in due
course.
A. rescission
B. remission
C. restitution
D. reformation
Todd is a licensed real estate broker in Ohio. One of Todd’s largest clients, Sun Corp.,
contracted in writing with Todd to find a purchaser for its plant in New York and agreed
to pay him a 6% commission if he was successful. Todd located a buyer who purchased
the plant. Unknown to Todd, New York has a real estate broker’s licensing statute which
is regulatory in nature, intended to protect the public against unqualified persons. Todd
violated the licensing statute by failing to obtain a New York license. If Sun refuses to
pay Todd any commission and Todd brings an action against Sun, he will be entitled to
recover:
A. nothing.
B. a fee based on the actual hours spent.
C. the commission agreed upon.
D. out of pocket expenses only.
General contract law uses the test of _____ for determining when a person is excused
from performing contractual obligations.
A. commercial impracticability
B. superior knowledge
C. frustration of purpose
D. impossibility
Selena Johnson has a checking account at the Union Bank of New York. She goes to
Home Depot and agrees to buy a room heater priced at $200. She writes a check to pay
for it. Home Depot is the:
A. payer.
B. drawer.
C. payee.
D. drawee.
The patent application must include a(n) _____ describing the invention with sufficient
detail and clarity to enable a person skilled in the relevant field to make and use the
invention.
A. specification
B. drawing
C. proposal
D. idea
Malcolm has brought a lawsuit against Will. Malcolm feels that there is no genuine
issue of material fact in dispute, and also that he is entitled to win this case as a matter
of law. What legal procedure would allow Malcolm to win this case as quickly as
possible?
A. Discovery
B. Voir dire
C. Jury trial
D. Summary judgment
_____ refers to the agreement between the debtors and the creditors wherein creditors
put pressure on debtors to pay, debts that have been discharged in bankruptcy.
A. Reaffirmation agreement
B. Miranda warning
C. Blank endorsement
D. Buy-sell agreement
Under Chapter 12 of the Bankruptcy Act:
A. only farms with an aggregate debt exceeding $5 million are covered.
B. the debtor must cease to operate the farm.
C. no trustee is appointed.
D. the debtor is usually permitted to remain in possession to operate the farm.
One of the founding principles of our government is separation of powers. How do
administrative agencies tend to conform to, or violate this principle?
A. They tend to violate this principle because they perform all three functions of
government.
B. They tend to conform to this principle because most commissioners or board
members are appointed by the President.
C. They tend to conform to this principle because they only follow the law, and do not
make any law.
D. They tend to violate this principle because they are created by Congress through
passing of enabling legislations.
The general rule is that, contracts entered into during minority can be disaffirmed as
soon as they are formed. Which of the following is an EXCEPTION to the rule?
A. Contracts affecting investment.
B. Contracts affecting the title to real estate.
C. Contracts affecting necessary supplies to be provided to the minor.
D. Contracts affecting his/her employment as a child actor.
Which of the following is true about eliminating partners’ apparent authority?
A. Eliminating the apparent authority is not a safe practice during winding up.
B. Apparent authority cannot be eliminated by merely informing the existing business
clients.
C. Filing a Statement of Dissolution will increase the partners’ apparent authority.
D. The partnership should post notice of the dissolution at its place of business to let
third parties know.
When a party with the power to terminate an insurance policy exercises that power, a(n)
_____ has occurred.
A. lapse
B. cancellation
C. reformation
D. rescission
Libel is distinct from slander, in that, libel:
A. involves views on public figures.
B. involves only content in print.
C. involves only content on the Internet.
D. is more permanent in nature.
Which of the following is true of implied authority?
A. It can contradict a principal’s express statements.
B. It exists even when the principal has limited the agent’s authority through clear
instructions.
C. It is usually derived from a grant of express authority by the principal.
D. It exists only if there is a relevant grant of express authority.