A third person who deals with a person claiming to be an agent:
a. can rely on the statements made by the agent regarding the extent of the authority.
b. cannot ignore any knowledge regarding a limitation of the agent’s authority.
c. is not required to take notice of any acts clearly adverse to the interest of the
principal.
d. all of the above.
__________ reserve auctions are those in which the goods must be sold regardless of
whether the auctioneer is satisfied with the levels of the bids.
a. With
b. Without
c. Unqualified
d. Unrestricted
If oral, a stop payment order is binding on the bank for __________ days unless
confirmed in writing within that time.
a. five (5)
b. seven (7)
c. fourteen (14)
d. thirty (30)
When a contract proves to be a bad bargain:
a. the injured party is never bound by the terms of the contract.
b. courts will always imply terms that are necessary to avoid hardship.
c. parties are generally still bound by the terms of the contract.
d. the contract must be rewritten.
If the collateral is in the possession of the creditor:
a. a financing statement must be filed to perfect the interest.
b. the security interest is perfected.
c. only a security interest has been obtained.
d. the type of goods will determine the method of perfection.
When a partnership is dissolved by a partner’s bankruptcy, notice:
a. is not required.
b. must be given to the other partners only.
c. must be given to third persons only.
d. must be given to both other partners and third persons.
A(n) __________ statement is a document, which may be requested by a paid-up
debtor, stating that a security interest is no longer claimed under the specified financing
statement.
a. execution
b. discharge
c. termination
d. hold harmless
The employer of a salesperson:
a. is only bound by a contract if the employee is acting as a soliciting agent.
b. is not bound by a contract if the employee is acting as a contracting agent.
c. is not bound by a contract until the contract is accepted.
d. is always bound by contracts made by all employee salespersons.
Under the Clayton Act, when large-scale enterprises plan to merge, they must in
advance:
a. notify the New York Stock Exchange.
b. notify the President of the United States.
c. complete the necessary financing arrangements.
d. notify the Antitrust Division of the Department of Justice.
An agent making a proper contract with a third person on behalf of a disclosed
principal:
a. has no personal liability on the contract.
b. is liable only to the principal on the contract.
c. is liable only to the third party on the contract.
d. is personally liable to both the principal and the third person on the contract.
Judges of the United States:
a. are appointed by the president, with the approval of the Senate.
b. are appointed by the Senate, with the approval of the president.
c. cannot be impeached.
d. are elected by the public.
Uniform State Laws are used as a basis for laws by which of the following entities?
a. Congress
b. international trade associations
c. state legislatures
d. local governmental entities
A contract involving both services and goods is classified as a contract for the sale of
goods if:
a. the services are to be performed upon the goods.
b. the services cannot be performed unless the goods are supplied.
c. no charge is made for the services.
d. the sale of goods is the dominant aspect of the transaction.
A seller may cancel a sales contract if the buyer:
a. wrongfully rejects the goods.
b. repudiates the contract.
c. fails to make a payment due on or before delivery.
d. all of the above.
A sales agreement that does not satisfy the statute of frauds is:
a. a quasi contract.
b. criminal.
c. unenforceable.
d. unlawful.
An unlawful sale under the Insider Trading Sanctions Act of 1984 can result in a civil
penalty of up to how many times the profit gained or loss avoided?
a. two (2)
b. three (3)
c. four (4)
d. five (5)
An employment contract of indefinite duration is:
a. terminable at will by the employer.
b. terminable at will by the employee.
c. both a. and b.
d. invalid.
Which of the following forms of cotenancy does not have right of survivorship?
a. joint tenancy
b. tenancy by entirety
c. tenancy in common
d. community property
Apparent authority has the same effect as:
a. undisclosed authority.
b. actual authority.
c. partially disclosed authority.
d. none of the above.
In antidumping cases:
a. The International Trade Administration determines whether foreign goods are being
sold in the United States at less than fair value (LTFV).
b. The International Trade Commission determines if there is an injury to a U.S.
industry as a result of such sales.
c. Remedial action will be taken only if findings of both LTFV sales and injury are
present.
d. All of the above
If an officer diverts a corporate opportunity, the corporation may recover from the
officer:
a. triple damages for breach of a fiduciary duty.
b. the profits of which the corporation has been deprived.
c. past wages for the time period in question.
d. any and all funds used to divert the corporate opportunity.
A codicil:
a. must be executed with the same formalities as a will.
b. is treated the same as a will.
c. does not invalidate the entire will.
d. all of the above.
Eligibility for membership on a board of directors is determined by all of the following
except:
a. statute.
b. certificates of filing.
c. articles of incorporation.
d. bylaws.
Mabel issues a negotiable promissory note to the order of Rachel. Rachel endorses the
note to Batton, who takes it as a holder in due course. Batton gives the note to his
brother, Albert, as a gift. In this situation:
a. Albert will acquire Batton’s rights.
b. Albert is a holder through a holder in due course.
c. both a. and b.
d. none of the above.
Which of the following will not be considered value in connection with determining
holder in due course status?
a. performing the act for which the instrument was given
b. promising to perform an existing legal obligation
c. receiving the instrument as security for a loan
d. taking the instrument in payment of a debt
Under the __________doctrine, the holder has taken so many instruments from its
transferor or is so closely connected with the transferor that any knowledge the
transferor has is deemed transferred to the holder, preventing holder in due course
status.
a. constructive partnership
b. close-connection
c. symbiotic relationship
d. collaborative relationship
The Fourth Amendment to the United States Constitution’s protection against
unreasonable searches applies to:
a. personal homes only.
b. businesses only.
c. both homes and businesses.
d. none of the above.
The parol evidence rule:
a. applies to complete written contracts.
b. prevents proof of fraud.
c. applies to incomplete contracts.
d. is not designed to preserve the integrity of written contracts.
Design patents have a duration of ____ years.
a. 10
b. 14
c. 17
d. 20
The “public comment” period for proposed administrative agency rules must be at least
__________ days.
a. 30
b. 60
c. 90
d. 120
As Courts now tend to accept an agency’s reasonable interpretation of a statute
involving a technical matter, even though it was not the only interpretation that could
have been made.
A quitclaim deed must specify what interest is being transferred in order to be valid.
A court will not reverse an agency’s decision merely because the court would have
made a different decision based on the same facts.
Religious societies may not grant hiring preferences to members of their religion.
The term “course of dealing” refers to the language and customs of an industry.
Public policy exceptions to the employment-at-will doctrine apply only to
“whistleblowing” situations.
The Uniform Partnership Act, a codification of partnership law, has been adopted by 49
states.
A delivery is sufficient if it is made in accordance with the terms of the contract to sell.
A tenancy for years terminates at the expiration of the specified term, regardless of
whether one party gives the other any notice of termination.
The federal government may regulate any area of business to advance the nation’s
economic needs.
Agency investigations of possible violations of agency rules are handled through
independent enforcement agencies.
One of the concerns reflected in Sarbanes-Oxley was that auditors were not exercising
sufficient discretion and independence in conducting audits of their clients.
When a person purports to act as an agent for a principal, an implied warranty arises
that such person has authority to do so.
A tort is a wrong arising from a violation of a public duty.
In the absence of an agreement to the contrary, a tenant is not liable for increased taxes
imposed on the rented property by a general tax increase.
Defenses raised in a suit based on a sales contract differ greatly from defenses used in
regard to any other type of contract.