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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.
Bankruptcy results in a discharge of contractual obligations by __________.
a. default
b. equity
c. operation of law
d. oath or affirmation
Parol evidence generally is admissible to explain:
a. ambiguous terms.
b. why signatures are missing.
c. why a contract was not performed.
d. implied terms.
Under the FTC disclosure rule, a franchisor must pay a __________ penalty of as much
as __________ for each violation when it is shown that a sale of a franchise subject to
the FTC rule was made, the franchisor knew or should have known of the disclosure
rule, and no disclosure statement was given to the buyer.
a. civil; $10,000
b. criminal; $10,000
c. civil; $25,000
d. criminal; $25,000
Employers are required to maintain records of certain occupational illnesses and
injuries by:
a. ECHO.
b. ESCHA.
c. OSHA.
d. ECOT.
The parties to a negotiable promissory note are the:
a. maker and the drawee.
b. drawee and the drawer.
c. drawer and the payee.
d. maker and the payee.
The modern trend is to consider a general assignment to be:
a. a transfer of property only.
b. both a transfer of rights and a delegation of duties.
c. a delegation of duties only.
d. a transfer of rights only.
When an employer has a contract with an employee for the employee to work for a set
period of time, which of the following would not justify discharging the employee?
a. financial hardship of the employer
b. nonperformance of duties by the employee
c. theft by the employee
d. possession of drugs by the employee
A person or enterprise harmed by a Sherman Act violation may bring an action for:
a. punitive damages only.
b. treble damages.
c. quadruple damages.
d. actual damages only.
__________reserve auctions are those that give the auctioneer the right to withdraw the
goods from the sale process if the bids are not high enough.
a. Qualified
b. Restricted
c. With
d. Without
Which of the following is generally considered a felony?
a. reckless driving.
b. disturbing the peace.
c. robbery.
d. none of the above.
With regard to the law concerning nuisance:
a. the law recognizes legal remedies for a public, but not private, nuisance.
b. the courts do not balance the protection of the plaintiff against the social utility of the
activity.
c. the fact that the plaintiff suffered annoyance or inconvenience is sufficient to
establish a nuisance.
d. a finding that conduct is socially desirable may outweigh harm to a particular
plaintiff.
When goods are sold at an auction in separate lots, the title to each lot passes:
a. when the winning bidder tenders payment for the lot.
b. when the lot is received by the winning bidder.
c. only when all lots have been sold.
d. when the auctioneer announces that the lot in question has been sold to the bidder.
An agent is under a duty to obey:
a. all instruction given by the third party.
b. all lawful instructions given by the principal.
c. all instructions given by the principal.
d. none of the above, since "obedience" is not an obligation of the agent.
A contract of record is also referred to as a:
a. recognizance.
b. reconnaissance.
c. recording contract.
d. none of the above.
In a unilateral contract, the doing of a requested act is also the:
a. acceptance of the offer of the promisor.
b. detrimental reliance of the promisee.
c. detrimental reliance of the promisor.
d. none of the above.
Which federal agency is most often authorized to adopt standards and regulations to
carry out the provisions of environmental statutes?
a. FTC
b. ICC
c. EPA
d. SEC
Under the Revised Model Business Corporation Act (RMBCA), corporate existence
begins when the articles of incorporation are filed with the secretary of state.
__________ 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
In a minitrial:
a. only three jurors are used.
b. the trial addresses only portions of the case or certain issues related to the case.
c. the decision is always fully binding on the parties.
d. none of the above.
Revised UCC Article 3 refers to which of the following parties as secondary obligors?
a. drawers
b. indorsers
c. accommodation parties
d. all of the above
Philip Laws leased an apartment from Candice Sutton. Laws had notified Sutton on
more than one occasion that the wooden steps to his apartment were decaying and in
need of repair. Laws claimed that he had to leave the outside light on to avoid portions
of the steps that no longer would bear his weight when he came in at night. Sutton
promised to repair the steps while Laws was away on a business trip. Accordingly,
Laws did not leave lights on during his absence. When he returned three nights later,
Laws was injured when one of the steps broke under his weight as he was entering his
apartment. Laws sued Sutton. Sutton replied that she should not bear liability for Laws'
injury because Laws knew of the condition of the steps and had not taken the customary
precaution of lighting the area. Based on what you have learned in this chapter, decide
the case.
Morris issued a check to Al in payment of a debt. There were sufficient funds in Morris'
account to cover the check when it was presented for payment. However, due to an
error, the bank dishonored the check. Which of the following parties is/are potentially
liable to the holder?
a. the drawee bank only
b. Morris and the drawee bank
c. Morris only
d. the drawee bank and any collecting bank
The theories of product liability
a. are mutually exclusive.
b. are not mutually exclusive.
c. are set forth exclusively in the UCC.
d. are set forth exclusively in the common law.
The __________ rule allows management immunity from liability for corporate acts
where there is a reasonable indication that the acts were made in good faith and with
due care.
a. sovereign immunity
b. business judgment
c. reasonable director
d. good faith
Federal supremacy refers to:
a. the power of the President.
b. the power of the Supreme Court to make decisions.
c. the power of the federal government to legislate in certain areas.
d. all of the above.
The duties of a drawee bank include all of the following except to:
a. maintain security concerning information relating to the depositor-bank relationship.
b. pay on demand all checks to the extent of the bank's assets.
c. exercise reasonable care in the payment of checks.
d. generally refuse to pay any checks after the drawer has died.
Several layers of law are enacted at different levels of government to provide the
framework for business and personal rights and duties. At the base of this framework of
laws is/are:
a. statutory law.
b. case law.
c. constitutional law.
d. all of the above.
An apparently voluntary agreement may in fact not be voluntary if:
a. undue influence is present.
b. physical duress is present.
c. economic duress is present.
d. all of the above.
The Immigration and Naturalization Act (INA) sets forth criminal and civil penalties
against employers who knowingly hire illegal aliens.
A school district supplied school bus service for all children 12 years of age or under
who lived at least one mile from school. This service was provided for transportation to
and from school. Joanna was a 13-year-old student who lived in that school district.
Joanna's home was 2 miles from school. Her parents brought suit against the school
district alleging that Joanna was entitled to school bus service and the failure to provide
such service denied her the equal protection of the law. Discuss the probable outcome
of the lawsuit.
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.
Herman hires Juanita as his accountant. Juanita commits negligence in preparing
financial statements for a business Herman owns. Several investors rely on the financial
statements and purchase shares of stock in the business. In a state that has adopted the
privity rule, what result?
The United States Supreme Court can never function as a court of original jurisdiction.
Generally, a bailment agreement need not contain all the elements of a contract.
A contract of indefinite duration may be terminated by notice from either party to the
other party.
The International Monetary Fund (IMF) was formed to shorten the duration and lessen
the disequilibrium in the international balance of payments of its members.
Corporations are entitled to Fifth Amendment protection.
Illegality is a universal defense regardless of whether the illegality voids an instrument.
Suzy Bartles enters into an oral contract to purchase a tract of land from Bill Hermes.
The land is considered worthless, but Bartles feels that she has discovered a possible
usage that would drastically increase the value of the land. To assure herself of the
potential value of the land, Bartles orally hires an attorney to investigate the title and
records associated with the land in question. Before gaining any information from her
attorney, Bartles orally contracts with a builder to construct a huge building on the site.
Because of the size of the project, a completion time is difficult to predict. Bartles now
discovers that the land is indeed useless, a fact that she obtains through information
from her attorney.
Bartles now refuses to honor her contracts with Hermes, her attorney, and the builder.
Must Bartles honor her contractual agreements?
Even limited partners are completely liable for debts of the business.
Subject to statutory restrictions, parties are free to make an employment contract on any
terms that they wish.
A partnership is dissolved by the death of a partner.
At an auction sale, a statement made by the auctioneer to draw forth bids constitutes an
offer.
The assignee of a partner's interest in the partnership becomes a partner only with the
consent of the other partners.
Professionals have a duty to perform their functions at the same level as would a
reasonable person.
Private citizens have the right to sue for injunctions against companies that are in
violation of federal environmental quality statutes.
