Which of the following acts is most likely to violate the Telemarketing Sales Rule
(TSR)?
A. Calling a consumer’s residence at 9:30 P.M. to inform about an exciting prize
promotion.
B. Soliciting sales through the mailing of a catalog and then receiving customers’ orders
by telephone.
C. Making telephone calls to a customer to get an appointment for a face-to-face sales
presentation.
D. Making telephone calls of solicitation to a consumer but completing the transaction
in a face-to-face meeting.
The primary distinction between an action based on innocent misrepresentation and an
action based on common law fraud is that, in the former, a party need not allege and
prove:
A. that there has been a false representation.
B. the materiality of the misrepresentation.
C. reasonable reliance on the misrepresentation.
D. that the party making the misrepresentation had actual or constructive knowledge
that it was false.
Jerry wants to purchase a flat. So he borrows $50,000 from XYZ bank. He signs a note
for $50,000 and gives the bank a $50,000 mortgage on the flat as security for his
repayment of loan. Within a year and a half, Jerry repays the entire loan. After the
repayment of the loan, which of the following right does Jerry have against XYZ bank?
A. Right to foreclosure
B. Right to reimbursement
C. Right of subrogation
D. Right of redemption
Which damages are especially awarded by the court to punish the defendant?
A. Punitive
B. Compensatory
C. Monetary
D. Liquidated
Sara tells Kate that she will give her $50 to clean her garage. When Kate is halfway
done, Sara decides to revoke her offer. Is this a valid revocation?
A. Yes, because Sara is the master of the offer here.
B. Yes, because Sara can revoke the offer any time she feels like.
C. No, because this is a valid contract that cannot be revoked.
D. No, because this is now a bilateral contract.
A check on which one bank is both the drawer and the drawee is called a:
A. certified check.
B. cashier’s check.
C. teller’s check.
D. uncertified check.
Which of the following is a wrongful dissociation?
A. A partner retires at age 70 when the partnership agreement allows partners to retire at
age 60.
B. A partner assigns his partnership assets to a personal creditor.
C. A judicial dissociation due to a partner’s persistent and substantial use of partnership
property for his own benefit.
D. Death of a partner.
The _____ exercise(s) the greatest control over agency behavior.
A. President
B. states
C. Congress
D. courts
Which of the following terminates an agency relationship through operation of law?
A. A specified result has been accomplished.
B. There is mutual agreement between principal and agent to terminate the relationship.
C. The principal dies.
D. The principal revokes the agency.
Banks can retain the legible copy of check for a period of:
A. seven months.
B. thirty days.
C. seven years.
D. thirty weeks.
Bob was a partner in F & B Co., a partnership. Bob dissociated himself from it on June
1, 2000. On December 1, 2000, F & B Co. entered into a contract with Carey. Under
which of the following scenarios may Bob be held liable to Carey, even though he is no
longer a partner?
A. Bob files a Statement of Dissociation with the secretary of state.
B. Bob tells Carey on November 1, 2000 that he is no longer a partner.
C. The contract was entered into on the company’s premises and Bob’s name is still
listed as a partner on the office door.
D. Bob files a Statement of Dissociation with the court.
The Government in the Sunshine Act had what as its purpose?
A. That meetings of government agencies are open to public observation
B. To enable the government to operate for profit corporations
C. To regulate International owned corporations
D. To regulate healthcare industry
Icarus Company is considering making an offering of its common shares under the
Securities Exchange Act of 1933 Regulation A. What are the requirements it must
meet?
Bill, a senior manager at Bizlaw Inc., instructs Kim, a mid-level manager, to make false
statements on the performance evaluation of Gloria, one of Kim’s employees, who
recently filed a discrimination claim against Bill. Bill tells Kim, “Look around you.
Every manager makes up stories about employees Bizlaw wants to get rid of.” Bill’s
argument illustrates:
A. bandwagon fallacy.
B. argumentum ad baculum.
C. argumentum ad hominem.
D. circular reasoning.
Sarah, age 17, buys a car on credit from Lora. Sarah signs a promissory note, agreeing
to pay $1000 a month on the note until the note is paid in full. Lora has Sarah’s father
cosign the note. Under these circumstances, Sarah’s father is:
A. a surety.
B. secondarily liable on this contract.
C. a guarantor of payment on this contract.
D. not liable on this contract because Sarah is a minor.
Which of the following contracts is void?
A. A contract made by an unemancipated minor.
B. A contract made by a person who has been adjudicated insane and institutionalized.
C. A contract made by a person under the influence of mind-altering drugs.
D. A contract made by a minor who receives no support from a parent or guardian.
Mayker, Inc. and Oylco contracted to have Oylco be the exclusive provider of Mayker’s
fuel oil for three months. The stated price was subject to increases of up to a total of
10% if the market price increased. The market price rose 25% and Mayker tripled its
normal order. Oylco seeks to avoid performance. Oylco’s best argument in support of its
position is that:
A. There was no meeting of the minds.
B. The contract was unconscionable.
C. The quantity was not definite and certain enough.
D. Mayker ordered amounts of oil unreasonably greater than its normal requirements.
Mr. White enters into a contract to sell a car to Joe Jr. who is 15 years old and is
considered a minor in the state where he lives. What is the status of the contract that Mr.
White and Joe Jr. entered into?
A. The contract is voidable, and is enforceable till Joe Jr. cancels it.
B. The contract is void and unenforceable.
C. The contract is enforceable and valid.
D. If the contract is registered with the Secretary of State’s office it will become
enforceable.
Josh, Betty, and Danny formed an LLC to manage their accounting business. Josh
contributed $20,000 to the LLC. Betty and Danny contributed $40,000 each. Being
close friends, they did not include a profit and loss sharing plan in the operating
agreement. A year later, they realize their working styles do not match. All the members
agree to dissolve the LLC and sell all of its assets. Assuming that the LLC did not have
any creditors and a total of $175,000 was obtained after the sale of all the assets of the
dissolved LLC, how much will Betty get?
A. $100,000
B. $75,000
C. $50,000
D. $65,000
Which of the following is NOT one of the implied warranties that the assignor gives to
the assignee?
A. That the obligor has capacity to contract.
B. That the contract is not voidable for any reason known to the assignor.
C. That the assignor has good title to the rights assigned.
D. That the obligor is solvent.
Greg signed a contract to work as an auto-parts manager for Jones Chevrolet. This
contract is governed by:
A. Article 2 of the UCC.
B. state common law.
C. the doctrine of promissory estoppel.
D. the law of quasi-contract.
If a partner fails to contribute the amount equal to her negative capital account balance,
then it can be recovered:
A. from that partner’s assets.
B. by obtaining an undertaking from that partner.
C. from the other partners.
D. by charging the creditor’s account.
In order to recover on the tort of deceit a party would have to prove what?
A. Economic injury by the injured party
B. Profit by the offending party
C. The Secretary of State was properly notified
D. That there was a BFOQ that contributed to the offending party’s behavior
Which of the following allows a party who has materially breached a contract to
recover the reasonable value of any benefits he has conferred on the promise?
A. Quasi-contract
B. Anticipatory repudiation
C. Specific performance
D. Accord and satisfaction
Which of the following terms refers to a widely shared view about what ideas, interests,
institutions, or freedoms promote welfare of people?
A. Void contract
B. Public policy
C. Implied-in-fact policy
D. Express contract
A holder in due course does not take free of the _____, which go to the validity of the
instrument or of claims that develop after he becomes a holder.
A. personal defenses
B. relative defenses
C. procedural defenses
D. real defenses
_____ refers to a situation wherein the court forces dissenting creditors to accept a
reorganization plan when the court finds that it is fair and equitable.
A. Cram down
B. Make one whole
C. Divestiture
D. Restitution
What document gives authority to a managing partner to run the business?
A. Articles of Organization
B. Managing Articles
C. Articles of Incorporation
D. International Articles of Trade
The requirement that, to be negotiable, an instrument must promise or order payment of
a fixed amount of money applies:
A. only to principal.
B. only to interest.
C. to both principal and interest together.
D. neither to principal nor interest.
Chica, a women’s clothing store, held a “prize drawing” for a $500 shopping spree on
Saturday that it had advertised throughout the week. Participation in the drawing
required being at the store by noon and completing an application form that included
personal information and placing it in a box. The information would then be put into a
database for marketing purposes. Fashion consultants offering merchandise for sale
greeted customers arriving at the store on Saturday morning. Joy was the winner of the
drawing. Has she given consideration for the prize?
A. No, she gave no legal value to Chica.
B. No, unless she purchased an item from one of the fashion consultants.
C. Yes, she came to the store and gave information that was for the store’s use.
D. Yes, unless the store was conveniently located.
Proof of _____ is often offered as evidence of a seller’s anticompetitive intent when
proving a primary level violation of the Robinson-Patman Act.
A. functional discounts
B. predatory pricing
C. quantity discounts
D. accumulation pricing