Under the ULLCA, at least five members are required to form an LLC.
Persons age 18 and older may work at any job, whether it is hazardous or not.
Secondary boycott picketing is legal if it is directed against the neutral employer instead
of the struck employer’s product.
The pro rata rule holds that any increase in price paid for shares tendered must be
offered to all shareholders, even those who have previously tendered their shares.
The Natural Law School of jurisprudence emphasizes that law should be based on
morality and ethics.
A warranty disclaimer extends the warranty given by the warrantor.
Oral defamation of character is known as libel.
If employees no longer want to be represented by a union a consent election will be
held.
Most franchise agreements permit a franchisor to terminate the franchise at-will.
The business judgment rule states that directors and officers are personally liable to the
corporation or its shareholders for honest mistakes of judgment.
Third parties cannot acquire any rights under other people’s contracts at any time.
Two-party secured transactions occur when a seller sells goods to a buyer on credit and
retains a security interest in the goods.
Under the Full Faith and Credit Clause of the U.S. Constitution, a judgment of a court
of one state must be given “full faith and credit” by the courts of another state.
Typewritten, handwritten, or other tangible agreements fulfill the writing requirement of
a negotiable instrument.
The board of directors of a corporation is elected by the shareholders of the corporation.
Strict liability requires privity of contract between the plaintiff and the defendant.
An unconditional promise to pay a definite amount makes an instrument nonnegotiable.
The person who is entitled to the future interest is called a reversion beneficiary.
NASDAQ is the world’s largest electronic securities exchange.
Under the Uniform Partnership Act, partners are entitled to receive a salary for
providing services to the partnership.
The Federal Reserve consists of 50 regional Federal Reserve banks located in major
cities across the country.
The government may seek civil damages, but not treble damages, for violations of
antitrust laws.
A fee simple owner has the right to exclusively possess and use his property to the
extent that the owner has not transferred any interest in the property.
A company deciding to stop operations in its unprofitable manufacturing unit for the
sake of saving money for its shareholders is an example of stakeholder interest theory.
Article 2 of the UCC contains provisions that either apply only to merchants or impose
a greater duty on merchants.
An instrument that contains an unconditional order to pay is considered as a negotiable
instrument.
Resale price maintenance is a vertical trade restraint that involves the seller’s refusal to
sell a product to a customer unless the customer purchases a second product.
The geographical area served by each court is referred to as a district.
A deed of trust is the instrument that gives the debtor a security interest in the creditor’s
property.
A warranty that covers the costs of parts, but not the labor, to fix a defective product is a
limited warranty.
Nonprofit corporations are private corporations that are formed for charitable,
educational, religious, or scientific purposes.
Africa is the only region where regional economic communities have not been formed.
A misrepresentation is not actionable when the innocent party to whom the
misrepresentation was made relied on the misrepresentation and acted on it.
Anticipatory breach of a contract is also referred to as anticipatory ________.
A) reformation
B) rescission
C) repudiation
D) restitution
Oral defamation of character is termed ________.
A) encomium
B) commendation
C) libel
D) slander
A(n) ________ is an action or event that relieves certain parties from liability on
negotiable instruments.
A) presentment
B) discharge
C) accommodation
D) breach of contract
The ________ Act provides for the creation of a government fund to finance the
cleanup of hazardous waste sites.
A) Resource Conservation and Recovery
B) Toxic Substances Control
C) Comprehensive Environmental Response, Compensation, and Liability
D) National Environmental Policy
In the context of a draft, a drawee is the party who ________.
A) writes an order to a second party
B) pays the money stated in the draft
C) writes an order for the draft
D) receives the money from the draft
Which of the following mandatorily requires a license to be operational and legal?
A) a general partnership
B) a conglomerate
C) a joint venture
D) a franchise
Which of the following is true of Section 24 of the Securities Act of 1933?
A) It imposes civil liability on any person who violates the provisions of Section 5 of
the act.
B) It imposes criminal liability on any person who willfully violates the 1933 act or the
rules or regulations adopted.
C) It imposes civil liability on persons who intentionally defraud investors by making
misrepresentations of material facts in the registration statement.
D) It exclusively regulates the sale of securities online.
When an indorser indorses an instrument in blank, it changes a(n)________.
A) order instrument into a bearer instrument
B) bearer instrument into an order instrument
C) negotiable instrument into a nonnegotiable instrument
D) valid instrument into an invalid instrument
Which of the following businesses and activities enjoy a statutory exemption from
antitrust laws?
A) airlines
B) law firms
C) agricultural cooperatives
D) all professional sports and games
A fully performed contract is called a(n) ________ contract.
A) executed
B) mitigated
C) liquidated
D) substituted
________ is a type of equity security that represents the residual value of a corporation.
A) Common stock
B) Preferred stock
C) Cumulative preferred stock
D) Participating preferred stock
________ specify the methods and procedures that are to be used by public accountants
when conducting external audits of company financial statements.
A) Generally accepted accounting principles (GAAPs)
B) Generally accepted auditing standards (GAASs)
C) Auditor’s expert opinions
D) General engagements and agreements
Which of the following constitutes insider trading?
A) An employee makes a profit by personally purchasing shares of the corporation prior
to public release of favorable information.
B) A manager purchases all shares of a corporation available to the public.
C) A director purchases enough shares of a public company to gain a majority stake in
its management.
D) An employee sells his shares of the company to another employee without notice to
the company.
The court of equity that was developed in England was called ________.
A) quasi-court
B) criminal court
C) common court
D) Chancery Court
Canton has listed his house for sale, but cannot be present to take care of the sale as he
needs to go out of town. He intends to give his brother, Stratham, the power of attorney
to just make decisions regarding selling of his house while he is gone. What kind of
power of attorney should Canton execute?
A) a general power of attorney
B) a special power of attorney
C) a universal power of attorney
D) an implied power of attorney
Which of the following statements is true of OSHA’s general duty standard?
A) The standard needs to be established with each safety regulation.
B) It requires an employer to provide a working environment that does not result in
mental stress of the employee.
C) An employer is obliged to provide a work environment that is free from recognized
hazards.
D) OSHA has no say in safety violations of an employer as it is just a model act.
A(n) ________ is issued by the courts to the rightful owner following the Torrens
method of determining title to the real property.
A) title insurance
B) abstract of title
C) certificate of title
D) restraining order
Suppose a state has set a usurious rate of interest as any interest rate above ________
percent. Joseph borrows $10,000 from Derek. Derek can demand a maximum of
$11,000 without violating the usury law.
A) 10
B) 100
C) 1
D) 1000
If the value of the collateral securing the secured loan exceeds the secured interest, the
secured creditor is ________.
A) an undersecured creditor
B) an oversecured creditor
C) not liable for loan repayment
D) not qualified for Chapter 7 bankruptcy
________ courts were allowed to give equitable remedies under early English common
law.
A) Merchant
B) Law
C) Chancery
D) Appellate
________ permits issuers to sell up to $50 million of securities to the public during a
12-month period, pursuant to a simplified registration process.
A) SEC Rule 506
B) Section 12 of the Securities Act of 1933
C) Section 5 of the Securities Act of 1934
D) Regulation A
Which of the following is true about the Electronic Communications Privacy Act?
A) It does not provide criminal penalties to those who intercept electronic
communication.
B) It does not provide any exceptions for accessing stored email without violating the
law.
C) It provides that government officials need not require a warrant to access stored
email.
D) It provides that an injured party may sue for civil damages for violations of the
ECPA.
________ is an objective test that applies to commercial contracts and contracts
involving mechanical fitness.
A) Reasonable person test
B) Personal satisfaction test
C) Express condition test
D) Cognitive inventory test
________ is a symbol that is used to designate marks that have been registered with the
U.S. Patent and Trademark Office.
A) TM
B) SM
C) ©
D) ®
Alan is a subject matter expert for First University, with an employment contract of
three years. Two years into the contract, Second University”fully aware of Alan’s
contract”offers him twice the money he currently makes”for the similar post. Alan takes
the job. First University can recover damages from Second University for which of the
following torts?
A) malicious breach of contractual relations
B) malicious inducement of contractual breach
C) intentional interference with contractual relations
D) breach of the covenant of good faith and fair dealing
Which of the following constitutes material breach?
A) inferior performance
B) substantial performance
C) anticipatory repudiation
D) rescission without notification
To be covered by the FMLA, an employee must ________.
A) have worked for the employer for at least six months
B) have performed more than 1,250 hours of service
C) not have claimed maternity leave in the past
D) be suffering from a serious injury or ailment
Which of the following is true of a generic name?
A) It is an obscure mark that is yet to be recognized widely.
B) It is perceived by the public as a common name rather than a trademark.
C) It is used to gain protection under trademark law by rigorous promotion of the mark.
D) It is implemented to turn a common name into a trademark.
Which of the following is true about fixtures?
A) They are categorized as real property.
B) They are easily portable.
C) They are typically removed prior to a sale.
D) They can only have one owner at a time.
Which of the following is an example of utilitarianism?
A) Maxtel Apparels decides to shut down one of its plants because its functioning was
threatening other plants.
B) Turner, Inc., a leather factory, pollutes a river in the town in which it operates but
offers damage relief for people affected by the river pollution.
C) Raul, a football player, decides to cheat in the upcoming match just because the rival
team follows a similar approach.
D) Matt looks up to his religious book to guide his life in the righteous way.