What is the term for a condition that is specified in the contract?
A. Express condition
B. Implied condition
C. Corporate condition
D. Bilateral condition
Section 7 of the Clayton Act prohibits mergers where evidence indicates that the
merger:
A. is between companies who are solely engaged in intrastate commerce.
B. may have the effect of substantially lessening competition in any line of commerce.
C. involves companies that manufacture functionally uninterchangeable products.
D. involves companies that might fail if they were not allowed to merge.
When is the revocation of an offer effective?
A. When received by the offeror
B. When received by the offeree
C. When sent by the offeree
D. When sent by the offeror
Unsecured creditors, to the extent that the Bankruptcy estate is solvent, share in
proportion to what?
A. Amount paid in legal fees
B. Claims against the debtor
C. Based on size of the creditors
D. Based on the geographic locations of creditors
In which of the following cases is the agent, but not the principal, liable?
A. An agent with no authority contracts for a disclosed principal.
B. An agent with actual authority contracts for an unidentified principal.
C. An agent with apparent authority contracts for an unidentified principal.
D. An agent with apparent authority contracts for a disclosed principal.
Which of the following is correct concerning a limited liability company?
A. It has limited ability to buy, hold, and sell property.
B. Typically, an LLC is a tax shelter for big corporations.
C. It is mandatory to have an operating agreement.
D. Members who manage an LLC are fiduciaries of the LLC.
Directors’ meetings:
A. require a majority number of directors to attend, called a quorum.
B. are always called after reasonable notice to the directors.
C. are always required in order for the board to take action.
D. permit directors to cast up to three votes each.
The effect of a valid delegation of duties is that it:
A. discharges the delegator from any further liability.
B. is an automatic novation.
C. discharges the obligee from any further liability.
D. appoints the delegatee to perform the delegator’s duty to the obligee.
What section of the UCC defines negotiation of a negotiable instrument and who is a
holder?
A. 3-201
B. 2-221
C. 1-105
D. 3-401
Which of the following is also termed slander of title or a trade libel?
A. Defamation
B. Injurious falsehood
C. Copyright violation
D. Plagiarism
Mr. Green contracts with Mr. Brown to repair his roof. Mr. Brown is about 75% done
when the deadline of the contract occurs. Which legal standard would prevent Mr.
Brown from being considered to be in breach of his agreement with Mr. Green?
A. Substantial performance standard
B. Strict performance standard
C. Reasonable person standard
D. Egg shell person standard
Section 8 of the Clayton Act, as modified by the Antitrust Amendments Act of 1990,
prohibits the same individuals from controlling competing corporations when those
individuals are:
A. shareholders.
B. directors or senior officers.
C. mid-level officers.
D. managerial employees.
Contracts made by severely intoxicated people:
A. are void rather than voidable.
B. can be disaffirmed anytime after he/she has regained his/her mental faculties.
C. cannot be ratified until the person has regained his mental faculties.
D. are always binding, because the law does not want to reward drug or alcohol abuse.
Jim gave a postdated check dated December 30 to one of his creditors on December 22.
However, the check was presented to Jim’s bank on December 24, and the bank honored
it. As a result, there was not enough money in his account to cover for another check he
had written for December 27, and hence, the check bounced. The bank charged Jim a
$20 fee for the bounced check. What is the bank’s liability regarding this bounced
check?
A. The bank has no liability.
B. The bank must compensate Jim for any losses that result from this bounced check.
C. The bank is liable, but only for the $20 bank charge related to the bounced check.
D. The bank is liable, but only for the immediate, direct damages that result from the
bounced check.
The Equal Credit Opportunity Act (ECOA) requires creditors to notify applicants in
how many days of a decision on credit request?
A. 90
B. 180
C. 30
D. 15
What is the term for the period of time when a security may be offered and sold to the
public under section 5 of the 1933 Securities Act?
A. The waiting period
B. The post-effective period
C. The pre-filing period
D. The mediation phase
Under the Model Business Corporations Act, a director who is sued in connection with
his/her duties to the corporation may be indemnified by the corporation when:
A. the director acted in good faith and his conduct was lawful.
B. the director failed to act in the best interests of the corporation.
C. the director’s actions were grossly negligent but not intentional.
D. the director received unqualified financial benefits.
Bill is 17 years old. His parents no longer support him. He purchases bread and eggs
from a grocer on credit, and then does not pay. Does the grocer have a right to payment
from Bill for these items?
A. No, because Bill is a minor.
B. No, because these items are “necessaries.”
C. Yes, because these items are “necessaries.”
D. Yes, because Bill is emancipated.
Which of the following is a condition subsequent?
A. “I promise to do X if I succeed in getting a loan.”
B. “I promise to do X on the condition that the Cubs win the World Series.”
C. “I promise to do X unless Al Gore is elected President in 2000.”
D. “I promise to do X assuming that inflation stays below 3% in 1997.”
In the context of overdue instruments, if a due date for the principal has been
accelerated:
A. the instrument is overdue when the court passes a judgment to that effect.
B. the instrument is overdue on the day after the grace period of seven days from the
accelerated due date.
C. the instrument is overdue on the day after the accelerated due date.
D. the instrument is overdue on the day of the due date.
What legal effect does death or insanity of the offeror have on the offer?
A. It terminates the offer automatically.
B. It terminates only the last contract that has been formed with that offeror.
C. It has no legal effect unless and until the offeree is notified of the death of the
offeror.
D. It makes the offer voidable.
Which of the following is true about a wrongfully dissociated partner?
A. He may perform the winding up.
B. He may demand the partnership be dissolved.
C. He is not entitled to the value of any of his partnership interest.
D. He is entitled to his share of the partnership interest; minus the damages he caused
the partnership.
On May 1, Dix and Wilk entered into an oral agreement by which Dix agreed to
purchase a small parcel of land from Wilk for $450. Dix paid Wilk $100 as a deposit.
The following day, Wilk received another offer to purchase the land for $650, the fair
market value. Wilk immediately notified Dix that Wilk would not sell the land for $450.
If Dix sues Wilk for specific performance, Dix will:
A. prevail, because the amount of the contract was less than $500.
B. prevail, because there was part performance.
C. lose, because the fair market value of the land is over $500.
D. lose, because the agreement was not in writing and signed by Wilk.
If the party who repudiated the contract changes his mind, the repudiation can be
withdrawn:
A. before the other party has cancelled the contract.
B. after the other party has materially changed position.
C. at any point in time.
D. even if the contract has been cancelled.
Which of the following factors is most important in determining whether a
manufacturer is strictly liable in tort for a defective product?
A. The negligence of the manufacturer.
B. The contributory negligence of the plaintiff.
C. Modifications to the product by the wholesaler.
D. Whether the product caused injuries.
A method of alternative dispute resolution in which a neutral third party helps the
parties reach a resolution of the dispute by facilitating communication, clarifying areas
of agreement, helping see each other’s viewpoints, suggesting settlement options, but
who cannot make decisions that bind the parties, is called:
A. conciliation.
B. mediation.
C. minitrial.
D. arbitration.
_____ is a ground for lack of capacity only when it is so extreme that the person is
unable to understand the nature of the business at hand.
A. Infancy
B. Intoxication
C. Misrepresentation
D. Duress
Mary wants to buy an apartment in a building that is owned by ABC Corporation. Mary
then purchases stock in ABC Corporation and holds her apartment under a proprietary
lease. Under which ownership has Mary acquired title to such an apartment?
A. Condominium Ownership
B. Co-ownership in form of tenancy in partnership
C. Ownership acquired by gift
D. Cooperative Ownership
Bob borrowed $200,000 from ABC Bank to purchase his residential house. A mortgage
was used as the financing vehicle. Several years later Bob encountered financial
difficulties. He did not pay his mortgage payments for 4 months and the bank
foreclosed. At that time the remaining loan balance was $170,000. Bob had not
maintained the property well, and the winning bid at the foreclosure auction sale was
only $150,000. Is Bob liable for the $20,000 deficiency that has resulted (using the
majority rule)?
A. No, because the property was his residence.
B. No, because there is no guarantor with secondary liability involved in this
transaction.
C. Yes, because the proceeds of sale did not satisfy the remaining loan balance.
D. Yes, because there is no surety or guarantor involved in this transaction.
Zenith Co. is a company that manufactures cloth. It purchases the cotton required as
raw material from Yell Mart. Zenith Co. acquires Yell Mart. Identify the type of merger.
A. Vertical merger
B. Horizontal merger
C. Conglomerate merger
D. Symmetrical merger
Which of the following characterizes copyright transfer?
A. Oral transfers are valid and recognized.
B. Ownership can be retained while licensing part of the work.
C. It leads to a transfer of ownership for that period of time.
D. It allows everything except the performance of the work.
