A holder in due course must meet all of the following conditions except:
a. giving value for the instrument.
b. taking the instrument when it is overdue.
c. acting in good faith.
d. being ignorant of defenses and adverse claims.
When a minor avoids a contract to purchase a car:
a. the parents of the minor are liable for the purchase price.
b. a relative who cosigned the contract is liable for the purchase price.
c. a friend to whom the minor loaned the car is liable for the purchase price.
d. the automobile insurance company is liable for the purchase price.
Service of process refers to:
a. a demand letter sent by the plaintiff to the defendant.
b. a reply sent to the plaintiff by the defendant.
c. giving the defendant proper notice that a legal action is pending.
d. a record of the court’s preliminary hearing.
It is lawful to refuse to extend credit to a consumer based on the consumer’s:
a. race.
b. marital status.
c. credit history.
d. age.
A significant difference between an administrative agency hearing and a court hearing
is that:
a. a binding decision can only be made by an agency.
b. there is no right of trial by jury before an agency.
c. a court hearing allows no public intervention.
d. a court can enforce its decision.
Concerning torts and crimes, choose the correct statement:
a. Every tort is a crime.
b. Every crime is a tort.
c. No crime is a tort.
d. A crime may also be a tort.
A warranty is limited if:
a. only the original buyer is covered by the warranty.
b. the buyer must pay any cost for repair or replacement of a defective product.
c. it covers only part of the product purchased.
d. all of the above.
Maria intentionally attempts to have Patty break a contract with Alfred. Maria will be
liable under which theory of tort?
a. Libel
b. product disparagement
c. contract interference
d. intentional infliction of emotional distress
A guarantee that the grantor owns the estate conveyed is called a covenant:
a. of right to convey.
b. against encumbrances.
c. of quiet enjoyment.
d. of seisin.
An accountant who is being sued by a third person for malpractice based on fraud will
be able to avoid liability if the accountant can show:
a. contributory negligence on the part of the plaintiff.
b. that an exculpatory clause applies.
c. that the plaintiff did not rely on the false statement.
d. the absence of privity of contract.
Valid restrictive covenants will bind future owners of the land if:
a. they are published in the Federal Register.
b. there is a notation in the deed referencing the restrictive covenants.
c. they are published in a newspaper of general circulation.
d. they are filed with the attorney general of the state in which the land is located.
Public policy:
a. can be precisely defined
b. is frequently used by the courts as a reason to invalidate contracts
c. is protections from that which violates any established interest of society
d. all of the above
An agent who commits a crime is:
a. always liable.
b. only liable if acting in self-interest.
c. only liable if the act is done to advance the interest of the principal.
d. never liable when acting in the role of an agent .
If there is a consolidation of corporations A, B, and C:
a. corporations B and C are absorbed into corporation A, and corporation A continues to
exist.
b. all of the corporations continue to exist.
c. all corporations continue to exist, but corporation A owns all of the stock of
corporations B and C.
d. corporations A, B, and C cease to exist, and a new corporation with the property and
assets of the old corporations comes into being.
A contract is:
a. a binding agreement.
b. an agreement creating an obligation.
c. an agreement that creates enforceable duties and obligations.
d. all of the above.
Law is:
a. a body of religious principles held by all members of society.
b. a body of principles that society establishes to keep things running smoothly.
c. always the result of case-law decisions.
d. derived solely from the United States Constitution.
The Sherman Act applies to:
a. buying activities.
b. selling activities.
c. production activities.
d. all of the above.
Dividends are payable in:
a. money.
b. products manufactured by the corporation.
c. shares of other corporations held by the corporation.
d. all of the above.
Companies with concerns over the possibility of expropriation could lessen the harm or
the likelihood of this occurring by:
a. fully investigating a host government’s stability.
b. establishing treaty commitments.
c. obtaining insurance.
d. all of the above.
A nonconforming use:
a. that is discontinued for a period of less than thirty (30) days may be resumed.
b. has a right to continue for only five (5) years.
c. has a constitutionally-protected right to continue.
d. that continues for more than one (1) year cannot be lost by abandonment.
When there is no consideration for a promise, the agreement is:
a. a quasi contract.
b. equitable.
c. not binding.
d. unethical.
An ethical duty of confidentiality could be breached where:
a. information obtained through research of the employer is disclosed.
b. customer lists or leads are disclosed to a competitor.
c. proprietary information or technology of a business is disclosed.
d. all of the above.
A successor enterprise is not subject to the contract obligations of the former business
if:
a. one corporation is absorbed by another through merger.
b. a corporation merely purchases the assets of another business.
c. two or more corporations consolidate.
d. none of the above.
Substantive law:
a. specifies the steps to follow to enforce legal rights.
b. concerns equitable relief only.
c. creates, defines, and regulates rights and liabilities.
d. draws solely on English legal principles.
A summarized report of title to property is called:
a. title protection insurance.
b. title assessment insurance.
c. an abstract of title.
d. an instrument of title.
It is important to protect trade dress against adoption by a competitor because such
adoption can:
a. deceive purchasers into believing they have obtained a comparable product.
b. dilute the originator’s resource investment in its product appearance.
c. usurp the business goodwill of the developer of the trade dress.
d. all of the above.
Where a corporation is properly formed, it is called a corporation:
a. di giorno.
b. de facto.
c. de jure.
d. by estoppel.
Under the 2005 reforms:
a. it is easier for creditors to show they did not receive a voidable preference.
b. nonconsumer debt payments of less than $7,500 are not subject to the voidable
preference standards .
c. both a. and b.
d. none of the above.
Under the Computer Software Copyright Act of 1980, a written program:
a. must be written in object code in order to be protected.
b. must be written in source code in order to be protected.
c. is protected as any other copyrighted material, even if it is in written form.
d. is protected but does not receive the same protections as other copyrighted materials.
When the effect of an antitrust violation is to raise prices:
a. damages are automatically considered doubled.
b. each plaintiff must sue individually.
c. imprisonment for the guilty is mandatory.
d. the state attorney general may bring a class action suit for damages.
Which of the following factors do not affect negotiability of an instrument?
a. A provision specifying the collateral that secures the debt.
b. The antedating of the instrument..
c. The omission of a date of execution.
d. None of the above affect negotiability.
Debts of a corporation are not the debts of the persons running the corporation or
owning shares of stock in it.
The fact that a person signs a negotiable instrument because he or she is fraudulently
deceived regarding its nature or essential terms is a defense available against all
holders.
Title VII of the Civil Rights Act of 1964, as amended, is the principal law regulating
equal employment opportunities.
Antedating an instrument affects an instrument’s negotiability.
The trustee may void any fraudulent transfer made by the debtor within two (2) years of
bankruptcy when the debtor’s actual intent was to hinder, delay, or defraud creditors by
engaging in the transfer.
The standard form of check does not specify when it is payable, and it is therefore
automatically payable on demand.
A holder of a negotiable instrument cannot be a holder in due course when the holder
learns of a defense to payment after the acquisition of the instrument.
If a limited partnership certificate is never filed, all partners are treated as limited
partners.
Smarts and Then Some, Inc. developed a software program after several years of
research and development. The particular software program was then test”marketed, at
which point a competitor filed suit claiming that the Smarts and Then Some program
violated the competitor’s copyright on a program they too were test-marketing. What is
the test to determine whether a copyright has been violated?
Corporations may avoid liability for the obligations of a predecessor corporation by
treating a consolidation or merger as a sale of assets.
When work is guaranteed by one who repairs a building, the owner, on selling the
building, may assign the guarantee to the buyer.
Consumer goods are classified into different categories based on the debtor’s intended
use, not the physical characteristics of the goods.
A director is disqualified from taking part in corporate action with respect to a matter in
which the director has an undisclosed conflicting interest.
Subject to statutory restrictions, parties are free to make an employment contract on any
terms that they wish.
Accountants are equally liable to interlopers and rightful third parties.