Intellectual property consists of which of the following?
a. Trade secrets
b. Patents
c. Trade symbols
d. All of the above are considered intellectual property.
Cheryl, age 16, ordered a new dress to wear to the school prom. She has contracted to
pay $500 when the dress arrives. Before the dress arrives, Cheryl decides that the dress
is too expensive. If she now wishes to cancel the order, Cheryl:
a. must pay $500 for the dress because the dress was specially ordered for Cheryl.
b. must pay $500 for the dress because clothing is classified as a necessity.
c. may disaffirm this executory contract.
d. must accept the dress and pay the reasonable value of the dress.
If a foreign corporation wishes to avoid transacting business in Arkansas, it would be
careful NOT to do which of the following in Arkansas?
a. Own a piece of real estate on which it may build in the future
b. Own a building in which to warehouse stock
c. Maintain a bank account
d. None of the above
A plan of reorganization under Chapter 13 will be confirmed when:
a. the debtor has not been discharged before.
b. the unsecured creditors are not discharged.
c. the unsecured creditors receive the same amount as the secured creditors.
d. the unsecured creditors receive at least as much as they would have if the debtor had
liquidated.
Leslie purchased 100 flower pots from a local merchant. Warranties which are not
included in her sales contract, but exist by “operation of the law,” are the:
a. express warranties.
b. exclusive warranties.
c. quasi warranties.
d. implied warranties.
Which of the following claims will be paid first from the debtor’s estate in a Chapter 7
bankruptcy?
a. A gap creditor with a claim of $2,000
b. A state claiming $5,000 in back taxes
c. The trustee’s expenses of $3,000
d. Employees claiming unpaid wages of $4,000 for wages earned within 120 days of the
bankruptcy filing
A buyer of goods who buys without knowledge of a security interest, for value, and
primarily for personal, family, or household purposes takes the goods:
a. subject to any purchase money security interest automatically perfected.
b. subject to all security interests in the goods.
c. free of any purchase money security interest automatically perfected.
d. free of a security interest perfected by filing.
Winstead Co. is authorized by its articles of incorporation to sell 50,000 shares of stock.
The company:
a. may not sell 55,000 shares under any circumstances.
b. must sell the number of shares authorized by its articles of incorporation.
c. would issue void securities for any shares the company purports to sell over the
50,000.
d. must repay, with interest from the date of purchase, any purchaser of shares over
50,000.
e. Both (c) and (d).
A system for electronic funds transfers (EFT) in which machines are located in a
merchant’s store and are activated by the consumer’s identification card and code is
known as:
a. POS.
b. RAM.
c. EFTA.
d. CHIPS.
Helen deposits a $50 check in her account at First Bank at 4:00 on Friday. The bank is
closed on Saturday and Sunday, but opens again on Monday. The midnight deadline for
First Bank would be:
a. Midnight Saturday
b. Midnight Sunday
c. Midnight Monday
d. Midnight Tuesday
In which of the following situations will a court grant specific performance?
a. In a case involving breach of contract for the sale of real property.
b. In contracts for personal services.
c. Where goods are unique or rare.
d. Both (a) and (c).
Adam took and properly perfected a security interest in certain collateral belonging to
Deck Corp. on March 1, 2010. On February 1, 2010, Olin had taken a security interest
in the same collateral. Olin can have priority over Adam if Olin files within 20 days
after receiving possession of the collateral if:
a. the collateral is not inventory.
b. Olin takes a purchase money security interest.
c. the collateral is inventory.
d. Both (a) and (b) are required for Olin to have priority over Adam’s interest.
Specialized suretyships would include:
a. fidelity.
b. incorporate.
c. non-official.
d. legislative.
On November 1, Paula and Roberta enter into a contract where both parties are
obligated to perform on December 31. On December 1, Paula tells Roberta, “I can, in
no way, perform my duties in our contract.” This statement is a(n):
a. material alteration.
b. anticipatory repudiation.
c. nonmaterial breach since the statement is made before December 31.
d. accord.
Under Truth-in-Lending, the cost of consumer credit must be expressed in an:
a. appreciated payment rate.
b. annual percentage rate.
c. appraisal payment ratio.
d. allocated procedures remedy.
Kyle wants to buy a six-passenger car. The salesperson tells him that the two-seat sports
car Kyle sees on the car lot would be just perfect for six people. Kyle test drives the car
and then buys it. In this case:
a. Kyle has a valid cause of action for fraud.
b. Kyle was not justified in relying upon the salesperson’s representation that the car
would seat six people.
c. the element of scienter is missing.
d. the salesperson is a fiduciary.
Which of the following is true with regard to an exculpatory clause?
a. An exculpatory clause excuses one party from liability for her own tortious conduct.
b. Where one party has a superior bargaining position that has enabled him to impose an
exculpatory clause upon the other, the courts are inclined to nullify the provision.
c. An exculpatory clause may be unenforceable for unconscionability.
d. All of the above are true.
Which of the following statements is true?
a. A plaintiff must prove that the defendant’s negligent conduct proximately caused
harm to a legally protected interest.
b. A defendant has the burden of proof that his negligent conduct did not proximately
cause harm.
c. Negligent conduct that is the proximate cause of offensive physical contact results in
liability based on social policy.
d. Both (a) and (c).
A ____ is an offeree’s refusal to accept an offer.
a. revocation.
b. counteroffer
c. rejection
d. statutory irrevocability
Testamentary capacity refers to:
a. the age of the testator.
b. the same capacity as required to contract.
c. the mental ability to create a will.
d. the influence of others over the testator.
Mary orders a dress for $1,000. Mary doesn’t inspect the dress on arrival and therefore
doesn’t discover a flaw in the fabric until the day before she is to wear it to her first
board meeting as president of Tri-State Engineering. This is a month after the dress
arrived. She calls the designer and sends the dress back, but it is lost in the mail. Mary’s
insurance would cover $400 of the loss. The designer’s insurance would cover $900.
Who is liable?
a. Mary will bear the whole loss because she accepted the goods.
b. The designer will bear the whole loss because Mary returned the nonconforming
goods.
c. Mary will owe $100; the designer, $900.
d. The risk is Mary’s to the extent of $400.
Art signs a promissory note payable to the order of Swains Jewelers for $8,000 for a
wedding ring. If the owner of Swains simply signs “Swains Jewelers”:
a. the note is restrictively indorsed.
b. the indorsement is ineffective because the note will have to bear the signature of the
person who indorsed it.
c. the note is negotiable by delivery.
d. the indorsement will be valid only if dated.
An easement may be created by:
a. prescription.
b. implied reservation.
c. implied grant.
d. all of the above ways.
The Code provides that which of the following provisions may be included in an
instrument without adversely affecting negotiability?
a. A power to give collateral to secure payment
b. Authorization to confess judgment on the instrument
c. Waiver of the benefit of any law intended for the protection of the obligor
d. All of the above
A distribution in a partnership may be:
a. a payment made to compensate a partner for services rendered to the partnership.
b. a division of profits.
c. repayment of a loan to a partner.
d. All of the above.
e. None of the above.
Incellmed Corporation has developed a new process that it plans to use in genetically
engineering microorganisms for its pharmaceutical business. To protect the process,
Incellmed may:
a. copyright the process.
b. patent the process.
c. protect the process as a trade secret without registration.
d. Either (b) or (c) depending on the other facts of the situation.
Self-defense will NOT protect a person from criminal prosecution if she:
a. shoots a man who is about to stab her with a knife.
b. hits a man who is pushing her off the bus while it is still moving.
c. shoots a man who is holding a realistic-looking cap pistol at her head.
d. shoots a man who has shoplifted a rare, expensive diamond necklace from her store.
Atlas Pizza plans to sell $500,000 worth of stock in the next year. This stock will be
exempt from registration under Regulation A as long as:
a. no more than $5 million worth of stock will be sold in any 12-month period.
b. less than 100 shareholders presently own stock in the business.
c. an offering statement is filed with the SEC prior to sale of the securities.
d. All of the above.
e. Both (a) and (c) above are correct.
Violation of a statute designed to protect underage, unlicensed drivers, as well as
innocent third parties, from the consequences of juvenile car theft and “joy riding” by
prohibiting car owners from leaving the keys in their cars if the cars are unattended, is
likely to be characterized as:
a. negligence per se.
b. res ipsa loquitur.
c. contributory negligence.
d. assumption of risk.
A limited partnership is 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.
Shareholders have residual authority over increases in the amount of authorized capital
stock.
There are two distinct types of fraud.
Under the RMBCA, the filing of the articles of incorporation by the Secretary of State
is conclusive proof that the incorporators have satisfied all conditions precedent to
incorporation so that a shareholder or creditor would be unable to challenge the
existence of the corporation.
In many states, the services of the incorporators are perfunctory and short-lived.
Presentment is a condition to the holder’s right to recover from parties with primary
liability.
A partnership name may be the name of the partners or any one of them.
The type of indorsement used in first negotiating an instrument affects its subsequent
negotiation.
A trade fixture is not intended to become part of the realty.
An obligee’s promise to accept a stated performance in satisfaction of the obligor’s
existing contractual duty creates an accord.
The Troubled Asset Relief Program enacted in 2008 was designed to strengthen the
U.S. financial sector by governmental purchase of assets and equity from financial
institutions.
Taxes are imposed at death by the federal government in the form of an inheritance tax
and by the state government in the form of an estate tax.
An arm’s-length transaction is one in which the parties owe each other special duties.
Both design and manufacturing defects can subject a manufacturer or seller to products
liability.
A ‘short-form merger” requires shareholder approval of both corporations.