The Sarbanes-Oxley Act:
a. establishes new criminal offenses as well as substantially increasing penalties for
existing crimes.
b. imposes fines and/or imprisonment of up to 20 years for knowingly altering,
destroying, or falsifying any document with the intent of impeding a federal
investigation.
c. adds new financial disclosure requirements for corporations.
d. All of the above.
e. None of the above.
A medium of exchange adopted or authorized by a sovereign government as part of its
currency is known in the law of negotiable instruments as:
a. the sum certain.
b. consideration.
c. value.
d. money.
Answer the following:
a. When will a court specifically enforce a contract?
b. Under what circumstances will a court specifically enforce a contract involving
personal services?
c. What remedy did the court award in the Madison Square Garden case? Why did the
court award this remedy?
Answer the following:
The constitutional privilege protects the press in a defamation action:
a. in the absence of malice.
b. when the plaintiff is a public figure or official.
c. from all liability to anyone.
d. Both (a) and (b)
The Worker Adjustment and Retraining Notification Act requires an employer to
provide how much advance notice of a plant closing or mass layoff?
a. Two weeks
b. Thirty days
c. Sixty days
d. Ninety days
Which of the following would not be subject to the writing requirements of Article 2 of
the UCC?
a. An unborn puppy whose mother is an AKC champion
b. Trees that will be cut from a ten-acre tree farm
c. Food served in the banquet room of a Florida resort
d. Medical care received in a hospital
Which of the following are the two basic elements to consideration?
a. Bargained-for exchange and legal sufficiency
b. Legal detriment and legal benefit
c. Legal sufficiency and legal adequacy
d. Promise and forbearance
Andrew agrees to paint Betty’s house for $500. Two days after he starts the job, he
decides that $500 isn’t enough money. He refuses to finish the job unless Betty agrees to
pay him $100 more. What law applies to this fact situation?
a. The acceptance of additional money to settle a disputed claim is supported by
consideration.
b. A past obligation is sufficient consideration for a new promise.
c. Andrew gives no additional consideration in return for modification of a preexisting
contract.
d. Betty has made a promise in exchange for a forbearance.
The Code makes an exception to the executory promise rule in relation to holder in due
course status in:
a. the giving of a negotiable instrument.
b. the making of an irrevocable obligation to a third party.
c. a case where the executory promise is valid consideration to support a contract.
d. Both (a) and (b).
e. All of the above.
Brightstone Co. and Allsale Co. enter an oral contract providing Allsale will provide
100 dozen toys at $50 per dozen to Brightstone. Brightstone faxes a letter to Allsale
acknowledging the agreement, but stating only the quantity, not the price. Allsale:
a. cannot raise the defense of the statute of frauds if Allsale did not object to the letter
within ten days after receiving it.
b. cannot raise the defense of the statute of frauds since it is a merchant.
c. can raise the defense of the statute of frauds since the oral agreement was for the sale
of goods with a price of $500 or more.
d. can raise the defense of the statute of frauds since the writing did not contain all the
material terms of the agreement.
Wholesale electronic funds transfers:
a. are also called wholesale wire transfers.
b. involve the transfer of more than one trillion dollars each business day.
c. use Fedwire, CHIPS, and numerous private wire systems.
d. All of the above.
A ____ is an unincorporated business association consisting of at least one general
partner and at least one limited partner.
a. joint venture
b. limited liability company
c. limited liability partnership
d. limited partnership
As the result of a seller’s breach, a buyer may ask for incidental damages. Incidental
damages include costs incurred in:
a. storing goods in a warehouse.
b. making calls to obtain replacement goods.
c. inspecting the goods.
d. All of the above.
The nominating committee of the board of directors actually determines the board’s
membership because:
a. they are the only ones who can vote on this matter.
b. virtually all shareholders who vote for directors do so through the use of a proxy, and
the majority of shareholders who return their proxies vote as management advises.
c. very few institutional investors exercise their right to vote their shares, so the choice
of the nominating committee usually prevails.
d. most individual investors exercise their right to vote their shares, and they tend to
rely on the recommendation of the nominating committee.
Which article of the UCC deals with “negotiable instruments”?
a. Article 1
b. Article 2
c. Article 3
d. Article 9
Erin stole a paycheck from Carl prior to his indorsing it. She then forged Carl’s
signature and transferred the check to a gas station which took it in good faith, for
value, without notice, and without reason to question its authenticity. The gas station:
a. was a holder in due course.
b. could not be a holder.
c. could be a holder, but not a holder in due course.
d. can collect the amount of the check only from the drawer since Carl did not indorse
it.
Under the Pregnancy Discrimination Act,
a. family leave must be given to pregnant women and mothers of newborns.
b. employers may not refuse to hire a pregnant woman, fire her, or force her to take
maternity leave.
c. employers must give family leave to fathers of newborns as well as to mothers.
d. the BFOQ defense is not available.
Which of the following would have priority in distributing limited partnership assets?
a. Return of a general partner’s capital contribution
b. Repayment of a loan by a limited partner to the partnership
c. Return of a limited partner’s capital contribution
d. Payment of profits of the limited partner
If no time is specified for the acceptance of an offer, the offer terminates after:
a. 24 hours.
b. 48 hours.
c. two weeks.
d. a reasonable period of time.
Under the RUPA, a loan from a partner to the partnership is treated the same as loans of
a person not a partner, subject to:
a. fraudulent transfer law.
b. the law of avoidable preferences under the Bankruptcy Act.
c. general debtor-creditor law.
d. All of the above.
Which of the following is a contract with a condition subsequent?
a. Rhonda enters into a contract to buy a new car conditional upon her getting a loan
from her bank.
b. Roger bought a DVD player, but he may return it within ten days and get all of his
money back.
c. Both (a) and (b) are examples of a condition subsequent.
d. Neither (a) nor (b) is an example of a condition subsequent.
The 1934 Securities Exchange Act requires registration of:
a. equity securities of companies traded over the counter whose corporate assets exceed
$10 million and whose equity securities include a class with 500 or more shareholders.
b. stock listed on local stock exchanges.
c. all stock sold within the U.S.
d. all domestic stock sold within the U.S.
The International Anti-Bribery and Fair Competition Act of 1998 expands the FCPA to
include:
a. influencing any act or decision of a foreign official, political party, or political official
for the purpose of influencing any decision of that person or party in his or its official
capacity.
b. payments made to ‘secure any improper advantage” from foreign officials.
c. all foreign persons who commit an act in furtherance of a foreign bribe while in the
foreign country.
d. inducing a foreign official to use his influence to affect a decision of a foreign
government to assist a domestic concern in obtaining business.
Dr. Wells purchased a refrigerator for use in his home. The refrigerator will be classified
as:
a. consumer goods.
b. equipment.
c. farm products.
d. inventory.
Which of the following is true of the “order to pay” requirement of a negotiable
instrument?
a. It is an instruction to pay and must be more than an authorization or request.
b. It must identify with reasonable certainty the person to be paid.
c. The addition of words of courtesy, such as “please pay,” will not destroy the
negotiability.
d. All of the above.
For purposes of the concerted action requirement under Section 1 of the Sherman Act:
a. a corporation is viewed separately from its wholly owned subsidiaries.
b. a firm and its employees are viewed as one entity.
c. concerted action must be established by an express agreement.
d. All of the above are correct.
If there is no indorsee designated on an indorsement bearing only the indorser’s
signature, it is a(n):
a. qualified indorsement.
b. conditional indorsement.
c. blank indorsement.
d. allonge.
If a lawyer were being held liable for a misstatement in a registration statement, her
defense(s) would be:
a. she was only following directions.
b. she had reasonable grounds to believe, and did believe, her information was true.
c. she was not responsible for the portion that contained the misstatement.
d. All of the above.
e. Both (b) and (c).
Under the Third Restatement of Torts, if the plaintiff is a veterinarian who accepts for
treatment a dog from the defendant:
a. the defendant is strictly liable if the dog is abnormally dangerous and it bites the
plaintiff.
b. the plaintiff, if charging a fee, is beyond the scope of strict liability, even if the dog is
abnormally dangerous.
c. the doctrine of implied voluntary assumption of risk applies.
d. the defendant is strictly liable for any damage to the plaintiff whether or not the dog
is considered abnormally dangerous.
Rob repairs a door for Howard. In return, Howard is supposed to pay Rob $75 on
November 1 at Howard’s house. Which of the following would constitute legally
sufficient consideration?
a. Howard pays Rob $60 on November 1 but, after checking with Rob, brings payment
to Rob’s house.
b. Rob comes to Howard’s house to collect the $75 on November 1, but Howard only
has $50. Rob tells Howard to forget the other $25.
c. Since this is an unliquidated debt, the only legally sufficient consideration is
Howard’s payment of $75 to Rob on November 1 at Howard’s house.
d. Since this is a liquidated debt, the only legally sufficient consideration is Howard’s
payment of $75 to Rob on November 1 at Howard’s house.
An example of a “certification mark” would be:
a. Holiday Inns.
b. Xerox.
c. Real Cheese.
d. Nabisco.
Where a contract is unenforceable because of the statute of frauds, a party may recover
the benefits conferred on the other party in reliance on the contract.
A completely handwritten will is valid only if witnessed.
The Mortgage Reform and Anti-Predatory Lending Act of 2010 modifies the
Sarbanes-Oxley Act by making those who obtain mortgages more accountable for their
actions.
The proportion in which partners bear losses depends upon their relative capital
contributions.
The Civil Rights Act of 1991 provides that all victims of intentional discrimination,
except victims of disparate impact, can recover compensatory and punitive damages.
An accommodation party will always be secondarily liable on an instrument.
Bob buys a share of Atlas Pizza, which is unregistered. If it was not exempt from
registration, Bob may return the stock and get his money back.
Professor Wright photocopies 50 copies of a copyrighted chart to distribute to his
students in class. This is a clear violation of the Copyright Act.
Determining how big the corporation is in terms of total assets is the prevalent test of
monopoly power.
Payment of a C.O.D. shipment constitutes an acceptance of the goods.
The Credit Card Fraud Act does not contain criminal penalties for violations of its
provisions.
Al agrees to sell goods to Betty for a contract price of $3,000 due on delivery. Betty
wrongfully rejects the goods and refuses to pay anything. Al resells the goods in strict
compliance with the Code for $2,000. He incurs incidental damages for sales
commissions of $200 but saves $150 in expenses because of the resale. Al is entitled to
recover $1,050 from Betty.
John is 17 years old and earns extra money by repairing cars. Nathan, who is 21, brings
his car to John for repairs, and John ruins the brake system of the car, because of his
inexperience. If Nathan sues John for negligence in performing the auto repair contract,
in most states John will have no liability, because the tort of negligence and the auto
repair contract are connected.
In most cases, the collecting bank is the same as the payor bank.
The state may bring an action for involuntary dissolution of a company if the
corporation has not paid its annual franchise tax.
The principal may ratify either the entire contract or certain parts of it.
If Ajax Corporation buys substantially all the assets of Beta Corporation, a new
corporation will result.