A survival clause refers to:
a. a remainder in a life estate.
b. a possibility of reverter.
c. a provision in a lease contract providing that the tenant’s eviction for non-payment of
rent will not relieve her of liability for damages for rent not paid.
d. All of the above.
David is a director on a board of a corporation that is covered by the federal securities
laws. He buys 1,000 shares of stock in the corporation based upon information he has
received as a director. The purchase is:
a. valid provided no fraudulent statements were made to the person from whom he
purchased the shares.
b. invalid.
c. voidable regardless of whether a public announcement was made.
d. valid provided the purchase occurred after a public announcement of the information.
Which of the following is not a requirement of the statute of frauds provision of Article
2 of the UCC?
a. Some writing or record that indicates a contract has been made
b. Signature of the party against whom enforcement is sought
c. A term specifying quantity
d. A term specifying price
Under Federal Reserve Board Guidelines, indorsements must be made:
a. in an appropriate color of ink.
b. within an inch and a half of the left edge of the back of the check.
c. on a separate sheet of paper stapled to the instrument.
d. Both (a) and (b).
Randy, a minor, buys a new four-wheel drive truck from the Jones Dealership. Randy
sells this truck to his cousin, Steve, who is an adult. Steve conveys this vehicle to
Arthur Smith. Arthur does not personally know Steve or Randy. Randy may:
a. recover the vehicle from Mr. Smith.
b. not recover the vehicle from Mr. Smith.
c. hold Steve liable in tort.
d. recover the reasonable value of the vehicle from Mr. Smith but not the vehicle itself.
An obligation of the merchant-seller that the goods are reasonably fit for general
purposes for which they are manufactured and sold, and the goods are of fair, average
quality is known as:
a. a warranty of merchantability.
b. strict liability.
c. an express warranty.
d. the warranty of fitness for a particular purpose.
Which of the following is TRUE regarding the Foreign Corrupt Practices Act of 1977?
a. It applies only to corporations whose securities are registered under the Securities
Exchange Act of 1934.
b. It applies only to corporations engaged in foreign commerce.
c. The Act makes it illegal to bribe foreign officials to obtain business.
d. All of these are correct.
The National Environmental Policy Act:
a. requirements have been, from NEPA’s enactment, clearly substantive only.
b. attempts to prohibit uninformed decisions.
c. requirements have been interpreted by the Supreme Court to be primarily substantive
rather than procedural.
d. requires that the relevant federal agency attempt to mitigate the adverse effects of a
proposed federal action.
Notice of an assignment:
a. must be given to the obligor.
b. cuts off any defenses based on subsequent agreements between the obligor and
assignor.
c. precludes subsequent setoffs and counterclaims of the obligor that arise out of
entirely separate matters.
d. All of the above.
e. Only (b) and (c).
An accountant can ethically disclose a client’s confidential information if the accountant
complies with:
a. the client’s consent.
b. Generally Accepted Auditing Standards.
c. a court order.
d. All of the above.
The Federal Trade Commission Act allows the FTC to:
a. determine what constitutes deceptive advertising practices.
b. prohibit all advertising in certain professions.
c. require advertisers to contribute to a fund to reimburse injured consumers.
d. require the independent testing of consumer goods.
Under the Bankruptcy Code, the debtor must file which of the following?
a. A list of creditors
b. A schedule of assets and liabilities
c. A statement of financial affairs
d. All of the above
Which of the following is correct regarding the removal of Mr. X from the board of
XYZ?
a. The common law does not permit removal of a director for any reason.
b. The RMBCA permits the removal of a director without cause.
c. The articles of incorporation cannot provide for the removal of directors.
d. Under common law and statutory law, a director can never be removed without
cause.
Ken promises not to foreclose on a mortgage that he holds on an office complex that
Christopher owns. In reliance on this promise, Christopher expends $200,000 to
remodel the complex. Which of the following is correct with regard to Ken’s promise?
a. Ken’s promise not to foreclose is unsupported by consideration.
b. Ken’s promise is noncontractual.
c. Ken’s promise will be enforced against him based upon the doctrine of promissory
estoppel.
d. All of the above.
Sam, a shopkeeper, dies unexpectedly at the age of 46. His lifelong business associate,
Paul, is appointed the administrator of the estate. Sam had a personal debt of $8,000
which he owed to Art’s Appliance Store. Paul says to Art, “If there isn’t enough money
in the estate, I’ll personally see that the bill is paid.” Which of the following is correct?
a. The oral statement is enforceable because Paul is the administrator.
b. An oral statement such as this is not enforceable because it is outside the statute of
frauds.
c. An oral statement such as this is not enforceable because this promise is within the
statute of frauds.
d. The oral statement is enforceable because it is a collateral promise.
If Stan’s land is condemned in order to build a subway system for the city, he must be
given:
a. the fair market value of the property.
b. equivalent property.
c. the option of keeping the property.
d. his price for the property.
Which one of the following cannot be registered under the Lanham Act?
a. An immoral mark
b. An inherently distinctive mark
c. A descriptive mark that has acquired distinctiveness through a secondary meaning
d. A geographic designation that has acquired distinctiveness through a secondary
meaning
Which of the following is correct with regard to “par value”?
a. It indicates the worth of the stock at issue.
b. It is the minimum price at which the corporation may sell the stock at issuance.
c. It represents the maximum price at which the stock may be sold at issuance.
d. It represents the amount for which the stock must be traded.
In which of the following situations would the persons be partners?
a. A and B jointly own shares of the capital stock of a corporation, have a joint bank
account, and have purchased real estate as tenants in common. They share the dividends
on the stock, the interest on the bank account, and the net proceeds from the lease of the
real estate.
b. A and B buy and sell real estate continuously over a five-year period, conducting a
business of trading in real estate. They do not consider themselves partners.
c. A, B, and C each inherit an undivided one-third interest in a restaurant and decide by
an informal agreement to continue operating the restaurant rather than sell it
d. All of the above.
e. Only (b) and (c).
The U.S. Patent and Trademark Office issues a patent upon an application containing:
a. a specification, which describes the features that make the invention patentable.
b. claims, which describe the features that make the invention patentable.
c. claims, which describe how the invention works.
d. a summary of the prior similar inventions and an explanation of how this invention is
distinct from them.
If a type of restraint is characterized as per se illegal:
a. the plaintiff need only show that the type of restraint occurred.
b. the defendants may defend on the basis that the restraint was reasonable.
c. the court is required to conduct extensive economic analysis into the type of harm
caused or the business excuse for use of the restraint.
d. the plaintiff must prove that the restraint limited competition.
e. Both (b) and (d).
Nonjudicial dissolution may be brought about by:
a. expiration of the time period for which the corporation was formed.
b. an administrative proceeding because the corporation did not notify the Secretary of
State within 60 days that its registered agent resigned.
c. voluntary action taken by all the shareholders of all the outstanding shares of stock.
d. All of the above.
Which of the following is characteristic of contract law during the twentieth century
compared with contract law in the nineteenth century?
a. Privity of contract gained in importance.
b. Many of the formalities of contract formation were relaxed.
c. Contract liability is absolute and escape from liability, once assumed, is rare.
d. There is a narrower view of contract damages.
A check drawn on a bank is an order to pay a sum of money and an authorization to
charge the amount to the drawer’s account. The drawer may countermand this order by
which of the following?
a. A canceled check
b. A stop payment order
c. A banker’s acceptance
d. A time draft
Janice contracts to sell a certain tract of land to Anthony for $5,000, but the contract
does not state a time for delivery of the deed and payment of the price. In this situation:
a. the contract will be considered void for lack of essential terms.
b. the law will imply that the respective performances are independent of each other and
may occur whenever “reasonable under the circumstances.”
c. courts will treat the promises to deliver the deed and to pay the $5,000 as mutually
dependent. Anthony’s duty to pay is conditioned upon Janice’s delivery of the deed and
Janice’s duty to deliver the deed is conditioned upon Anthony’s payment or tender of
$5,000 to Janice.
d. Janice’s duty to deliver the deed and Anthony’s duty to pay the $5,000 are
“implied-in-fact” conditions.
Speedy Stop sells necessities to neighborhood shoppers until 1 a.m. every day.
Dairyland delivered its order of milk products as usual around 6 a.m. while Mary, the
shopkeeper, was busy with the early coffee and donut crowd. The Dairyland driver left
12 crates in the refrigerator compartment and went on to the rest of his route. At 7:30
a.m., Mary went into the freezer to shelve the milk products and discovered that all 12
crates contained buttermilk rather than the usual mix of containers of whole milk, 2%,
skim milk, and cream variety she had ordered. What is her obligation with regard to the
goods?
Mary agrees to sew Georgia’s prom dress for $50 plus costs. Georgia decides that she
wants ruffles around the neck and calls Mary who says it will now cost $60. When
Mary finishes the dress (with ruffles), Georgia must pay:
a. $50, since that is the original agreement.
b. $50, since a modification must be in writing.
c. $60, since the modified agreement is supported by additional consideration.
d. $60, since any subsequent agreement is enforceable.
Two boys held up a liquor store at gunpoint and ran off with a bag of money. The police
saw them run into Jill’s apartment building where there are only four apartments off a
common hall and no apparent way out of the building but the front door. The police
knock on Jill’s door. She says she’s the only one there. The police can:
a. search the apartment without a warrant because Jill voluntarily answered the door.
b. search the apartment without a warrant because they are in hot pursuit of the fugitive.
c. not search the apartment, because they have no reason to believe that the boys are in
Jill’s apartment rather than in the others.
d. not search the apartment, because voluntary consent to enter is necessary.
Under the Civil Rights Act of 1991,
a. only victims of racial discrimination can recover compensatory and punitive damages
for intentional discrimination.
b. victims of intentional religious discrimination are entitled to receive compensatory
and punitive damages.
c. victims of disparate impact sex discrimination can recover punitive damages.
d. victims of disability discrimination have no remedy, but must seek redress under
disability law.
A ‘sale,” as defined by the UCC, takes place when:
a. the price is paid.
b. there is a manifestation of mutual assent.
c. the parties shake hands or affirmatively agree.
d. the title is transferred to the buyer.
Match the following:
a. An association of two or more persons to carry on as co-owners a business for profit.
b. An organization has a separate legal existence from its members/owners.
c. A creditor must bring suit against all partners as a group, and the judgment must be
against all of the obligors.
d. Total money and property contributed and dedicated by the partners for use by the
partnership.
e. Combination of all assets of two or more entities.
f. The right one person has to choose her partners.
g. Imposes partnership duties and liabilities on a nonpartner who has either represented
himself or consented to be represented as a partner.
h. Situations in which the RUPA requires a partnership to wind up and terminate; under
the UPA, the change in relation of partners caused by any partner’s ceasing to be
associated in the carrying on of the business.
i. Type of judicial lien against a partner’s transferable interest.
j. Completing unfinished business, collecting debts, and distributing assets to
contributors and partners; also called liquidation.
k. Noncorporate business organization that provides limited liability to all of its owners
and permits all of its members to participate in management of the business.
l. Under the RUPA, a partner’s ceasing to be associated in carrying on of the business.
m. A partnership formed by two or more persons under the laws of a state and having
one or more general partners and one or more limited partners.
n. General partnership that, by making a statutorily required filing, limits the liability of
its partners for some or all of the partnership’s obligations.
o. A group of individuals having no legal existence separate from that of its members.
1) limited liability company
2) partnership by estoppel
3) delectus personae
4) limited partnership
5) winding up
6) merger
7) dissolution
8) charging order
9) partnership
10) legal entity
11) dissociation
12) limited liability partnership
13) partnership capital
14) joint liability
15) legal aggregate
Answer the following:
A patent lasts for the same period of time as a copyright.
The parol evidence rule applies only to integrated contracts, meaning those in which the
parties have assented to the written agreement as the statement of the complete
agreement between them.
The right of the buyer to recover from an insolvent seller the goods in which he has a
special property interest existed at common law before being included in the Code.
Under the NLRA, an employer can legally refuse to bargain with the union as a means
of applying economic pressure.
The principal objective of antitrust law governing mergers is to maintain competition.
Karl loaned Linda $100,000. Madeline agreed to act as surety for $100,000. Nora
agreed to act as surety for $75,000, and Orville agreed to act as surety for $25,000.
Linda later defaulted on the loan, and Karl is now demanding payment from Nora and
Orville. What amount do Nora and Orville have to pay? If Nora and Orville pay, does
Madeline have any obligation? Explain.
In 1992, the SEC issued new rules tightening the registration and reporting system for
small business issuers, which increase the cost for such issuers wishing to trade their
securities publicly.
A company may be considered insolvent under the Code if it is unable to pay its debts
as they come due.
Define consideration.
The main purpose doctrine is an exception developed by the courts to the suretyship
provision.
Selling liquor to a minor can result in criminal liability only if the seller intended to sell
to an underage person.
Leslie, the owner of a shoe store, purchased 500 Model XT-50 running shoes from her
supplier, but price was not stated in the contract. The contract is voidable at Leslie’s
option until the parties agree on a price.
The UCC imposes a writing requirement on all assignments of $500 or more.
Clarence is the trustee of a trust. With $75,000 of his own money, Clarence purchases a
parcel of real estate. Two months later, he sells the parcel to the trust for $150,000 and
pockets the profit. Discuss the situation in terms of the duties and powers of the trustee.
If a contract does not comply with the statute of frauds, it is void.
“Acceptance” under the UCC always means taking possession of goods.
A debtor who files for bankruptcy can keep up to $1,450 in jewelry and all social
security, veteran’s, and disability benefits under the exemptions found in the Bankruptcy
Code.
Hubert bought heavy-duty, sharp hedge clippers to trim the hedges in his yard. In the
process of using the clippers, he severely cut his hand. He is now suing the
manufacturer on the basis that the clippers are unreasonably dangerous. Can he
recover? Explain.
The liability of an employer under the doctrine of respondeat superior is limited to
wrongdoing by the employee in the course of his employment.