Carlie contracted to purchase an entertainment center while she was 16. She can ratify
the contract the following year.
a. True
b. False
A quorum for the United States Supreme Court consists of any three justices.
a. True
b. False
What remedies are available for the Federal Trade Commission?
a. Affirmative exemption.
b. Corrective advertising and multiple product orders.
c. Impounding inventory.
d. Criminal penalties.
Carlos owns a store in Polk County. His trade extends throughout River City, but not
beyond the county limits. He sells his store to Virginia and, as part of the transaction,
agrees not to engage in the same business anywhere within the state for a period of four
years. The agreement:
a. is reasonable.
b. is unreasonable.
c. unduly interferes with the interests of the public.
d. Two of these.
If Alice, a resident of Ohio, has obtained a valid judgment against Bill, a resident of
Kentucky:
a. Alice can attach Bill’s automobile in Ohio to satisfy her court judgment.
b. Alice must go to Kentucky to satisfy her judgment.
c. Alice has no recourse against Bill because he has left the state.
d. Ohio has no jurisdiction over Bill because he is a resident of Kentucky.
In the case of Keeney v. Keeney, the court found:
a. a constructive trust is created by equity regardless of the intention of the parties to
create a trust where legal title to property is obtained through fraud or undue influence
rendering it unconscionable for the holder of legal title to retain the property.
b. intention of the parties is the sole consideration in determining the existence of a
trust.
c. the existence of a confidential relationship prohibits the trustee from seeking any
personal benefit.
d. a totten trust is a tentative trust and the transfer of ownership becomes complete only
upon the depositors death.
Economic coercion that compels a person to enter into a contract renders that contract
void.
a. True
b. False
If no time is stated, an offer will terminate automatically after a reasonable period of
time.
a. True
b. False
Dr. Wells purchased a refrigerator for use in storing medications at his office. The
refrigerator will be classified as:
a. consumer goods.
b. equipment.
c. a fixture.
d. inventory.
Darla offers to pay Edward $6,000 for Edward’s car, provided that Darla receives that
much from her uncle’s estate, which is currently being probated. She expects to know
for sure how much she will receive within a week or so. If Edward agrees:
a. there is an illusory contract, because Darla is not certain she will receive the money.
b. there is no consideration present in this example.
c. the consideration from Darla to Edward is the promise of $6,000 subject to a
condition.
d. Two of these but not all three.
The UCC applies to real estate mortgages and trust deeds since they are security
interests.
a. True
b. False
The FTC upholds the preferential position enjoyed by a holder in due course of
instruments concerning debts arising out of consumer credit contracts.
a. True
b. False
Goods that have been entrusted to a merchant may be sold by that merchant even when
the merchant has been told not to sell the goods, and when a merchant sells such goods
to a buyer in the ordinary course of business, that buyer has title that is superior to the
title of the original owner who entrusted them to the merchant.
a. True
b. False
Personal property so firmly attached to real property that an interest in it arises under
real property law is known as a(n):
a. fixture.
b. tangible property.
c. intangible property.
d. None of these.
An expropriation, or nationalization, occurs when a government seizes foreign-owned
property or assets for a public purpose and pays the owner just compensation for what
is taken.
a. True
b. False
A state regulation that does not conflict with a federal regulation may still be preempted
by federal action.
a. True
b. False
In which of the following situations is restitution available as a remedy?
a. As an alternative remedy for a party injured by breach.
b. For a party in default.
c. For a party who may not enforce the contract because of the statute of frauds.
d. All of these are situations in which restitution is available.
The result of an agents functioning is exactly the same as if the principal had dealt
directly with the third person.
a. True
b. False
Defenses to an action in strict liability include:
a. contributory negligence only.
b. contributory negligence and comparative negligence.
c. comparative negligence only.
d. express voluntary assumption of risk and in some states comparative negligence.
A future interest remaining in a grantor of property who transfers away less than his
entire interest is called a:
a. reversion.
b. remainder.
c. life estate.
d. fee simple absolute.
The WTO administers trade agreements but does not get involved with dispute
resolution.
a. True
b. False
Which of the following is generally NOT a defense to a claim against a manufacturer
under 402A?
a. Contributory negligence on the part of the plaintiff.
b. Express voluntary assumption of the risk.
c. Misuse or abuse of the product.
d. Subsequent alteration of the product by the plaintiff.
In a notice-race state:
a. an unrecorded deed is invalid against any subsequent purchaser without notice of
who recorded first.
b. unrecorded deeds are invalid against any subsequent purchaser without notice.
c. an unrecorded deed is invalid against any deed recorded before it.
d. a recorded deed is invalid against a subsequent purchaser who records.
A signature may be made by an individual herself or by an authorized agent.
a. True
b. False
An accountant’s records, including the data-gathering process followed and the
information and conclusions drawn therefrom, are known as:
a. tax returns.
b. working papers.
c. rough drafts.
d. privileged communication.
With regard to a limited partner’s capital contribution to the limited partnership:
a. the limited partner can only contribute cash.
b. an oral promise by a limited partner to contribute to the limited partnership is
enforceable if the partnership has given consideration to induce the promise.
c. a limited partner is liable to the partnership for the difference between the
contribution actually made and that which is stated in a signed writing promising a
certain contribution.
d. a limited partner may contribute no more than 49% of the partnership’s capitalization.
A major rule of an administrative agency:
a. does not become final until Congress has had an opportunity to disapprove it.
b. is any rule that the Office of Management and Budget finds has resulted in or is
likely to result in an annual effect on the economy of at least one million dollars.
c. must be published in the Federal Register prior to its becoming final, but need not be
submitted to Congress.
d. is a rule that will have a significant effect on competition and that becomes final if it
is submitted to and approved by the President.
A voluntary choice of perfectly legitimate alternatives may in some instances constitute
economic duress.
a. True
b. False
Workers’ compensation acts have been adopted by all states in an effort to provide
speedier and more certain relief to injured workers than was available through
litigation.
a. True
b. False
Which of the following statements about corporate dissolution is INCORRECT?
a. A corporation cannot be forced into dissolution by a creditor.
b. A corporation will be dissolved if all shareholders vote to do so.
c. A secretary of state may commence a proceeding to dissolve a corporation for failure
to pay taxes.
d. A shareholder may petition a court to dissolve a “deadlocked” corporation.
What are the duties of a trustee under Chapter 7?
a. To use, sell, or lease property of the estate and to deposit or invest money of the
estate.
b. To employ attorneys, accountants, appraisers, or auctioneers and assume or reject any
executory contract or unexpired lease of the debtor.
c. To rehabilitate the accounts of the debtor.
d. (a) and (c), but not (b).
e. (a) and (b), but not (c).
A(n) __________ is a person in a position of trust and confidence who has a duty of
utmost loyalty and good faith.
a. fiduciary
b. servant
c. independent contractor
d. principal
Increased production costs will allow the seller to avoid a contract based upon
commercial impracticability.
a. True
b. False