A(n) ________ is an agreement entered into by the creditor and the debtor whereby the
debtor agrees to pay the creditor for a debt that is dischargeable in bankruptcy.
A) reaffirmation agreement
B) order for relief
C) discharge agreement
D) acceptance agreement
Which of the following is true for the amendment of articles of incorporation that does
not affect the rights attached to shares?
A) The shareholders need to propose a resolution recommending such an amendment
before the board of directors draft the amendment.
B) The shareholders need to provide vote of approval for the amendment after it has
been submitted to the secretary of state.
C) The board of directors can approve the amendment without shareholder approval if it
does not
affect rights attached to shares.
D) The amendment need not be filed with the secretary of state of the state of
incorporation if it only affects rights attached to shares.
Under the objective theory of contracts, the subjective intent of a party to enter into a
contract is ________.
A) determinative
B) minimally important
C) as important as the intent of a reasonable person
D) irrelevant
According to the accord and satisfaction agreement, the duties under the original
contract is discharged when the ________.
A) parties do not agree to the accord
B) alternative contract is not satisfied
C) original contract is suspended
D) accord is performed
Which of the following is imposed upon a franchisor that violates the FTC franchise
disclosure rule?
A) FTC criminal action on behalf of the franchisee.
B) Loss of intellectual property to the franchisee.
C) Suspension of all business operations in the area.
D) An injunction against further franchise sales.
The ________ plan provides that existing shareholders of the target corporation may
convert their shares for a greater number of debt securities of the target organization.
A) voting rights
B) flip-over rights
C) employee stock ownership
D) flip-in rights
A ________ is a special form of contract that satisfies the requirements established by
Revised Article 3 of the UCC.
A) rental agreement
B) negotiable instrument
C) lease agreement
D) nonnegotiable contract
Which of the following terms denotes the defendant’s written response to a plaintiff’s
complaint that is filed with the court and served on the plaintiff?
A) summons
B) answer
C) rejoinder
D) rebuttal
Which of the following must be included in the registration statement?
A) judgments passed by the SEC on the merits of the securities offered
B) how proceeds from the offering will be used
C) date of termination of the initial public offering
D) maximum number of times a share can be sold post issue
Under which of the following circumstances is a warrantless search permitted?
A) if evidence is not in plain view
B) if evidence is likely to be destroyed
C) if the suspect has been previously convicted
D) if there is no probable cause
The ________ requires food manufacturers and processors to disclose uniform
information about serving sizes and nutrients, and establishes standard definitions for
“low fat,” “lean,” “organic,” and other terms routinely used by food processors.
A) Consumer Product Safety Act
B) Nutrition Labeling and Education Act
C) Patient Protection and Affordable Care Act
D) Health Care Reform Act
Drawers of checks and drafts and unqualified indorsers of negotiable instruments have
________ on the instruments.
A) strict liability
B) no liability
C) secondary liability
D) primary liability
Which of the following is true of LLC taxation?
A) An LLC is taxed as a corporation in all general cases.
B) An LLC can be taxed only as a partnership.
C) Members of an LLC are subject to double taxation.
D) An LLC is not taxed at the entity level.
Which of the following is true of a contract where one of the parties is insane but not
adjudged insane?
A) The contract is only voidable by the competent party.
B) The contract is only voidable by the insane person.
C) Only the court appointed legal guardian to the insane person can modify contracts.
D) The non-insane person must be placed in status quo if the insane person voids the
contract.
What does the Communications Decency Act of 1996 provide?
A) Businesses can send spam emails, as long as they don’t lie.
B) ISPs are not liable for the content transmitted over their networks by email users and
websites.
C) Businesses are liable for invading the right to privacy if they send unsolicited emails.
D) The number of servers an ISP can access in a geographical location is limited.
In which of the following conditions is a party’s absolute duty to perform conditioned
on the other party’s absolute duty to perform?
A) condition precedent
B) condition subsequent
C) concurrent condition
D) implied condition
A ________ contract has no legal effect.
A) unilateral
B) bilateral
C) voidable
D) void
The term ________ refers to an action by a buyer to recover scarce goods wrongfully
withheld by a seller.
A) revocation
B) replevin
C) cancellation
D) capture
Which of the following is true for terms to be expressed in a contract under the
common law?
A) Additional terms can be added during acceptance.
B) Additional terms can be added without consideration.
C) Gap-filling rules are permitted for time, delivery, and prices of goods.
D) Contract must contain all the material terms of the parties’ agreement.
A person who attempts to appropriate another living person’s name for commercial
purposes is liable for ________.
A) misappropriation of the right to publicity
B) battery
C) negligence
D) invasion to the right to privacy
Which of the following best describes first-degree murder?
A) It is the unintentional killing of a person due to a negligent act.
B) It is the intentional killing committed under circumstances that would cause a
reasonable person to become emotionally disturbed.
C) It is the intentional killing of a person without any prior planning.
D) It is the intentional killing of a person with premeditation.
A ________ is usually made when a corporation solicits proxies from its stockholders.
A) shareholder resolution
B) codicil
C) greenmail
D) poison pill
The Health Care Reform Act is an amendment of the ________ Act.
A) Consumer Product Safety
B) Patient Protection and Affordable Care
C) Medical Device Amendment
D) Federal Trade Commission
A(n) ________ is a situation in which a creditor has an enforceable security interest
against a debtor and can satisfy the debt out of the designated collateral.
A) floating lien
B) acquisition
C) attachment
D) redemption
The ________ is responsible for making federal law.
A) President
B) state governments
C) legislative branch
D) Supreme Court
Which of the following is true of misrepresentation?
A) An innocent party must have relied and acted on the misrepresentation for it to be
actionable.
B) An innocent party who acts in reliance on a misrepresentation need not justify his or
her reliance.
C) An innocent party must prove that the wrongdoer’s misrepresentation was the sole
reason he or she entered into the contract.
D) An innocent party need not prove economic injury to recover damages for fraud.
The National Environmental Policy Act (NEPA) is a federal statute which mandates that
the federal government must ________.
A) consider focusing on air and water pollution to the exclusion of other sources of
pollution as these two modes of pollution have the greatest impact on human lives
B) execute a complete ban on the commercial usage of the two hundred toxic
substances identified as being harmful and polluting
C) implement a zero-tolerance policy for all business activities that discharge waste
products into water bodies
D) consider the adverse impact a federal government action would have on the
environment before the action is implemented
A person who authorizes an agent to sign a negotiable instrument on his or her behalf is
known as a(n) ________.
A) agent
B) accommodation party
C) principal
D) assignor
In which of the following cases do federal and state courts have concurrent jurisdiction?
A) bankruptcy cases
B) diversity of citizenship cases
C) antitrust cases
D) patents cases
Which of the following statements is true concerning the notice that must be given to
third parties upon partnership dissolution?
A) All third parties must receive actual notice.
B) All third parties must receive the constructive notice.
C) Third parties who have directly dealt with the partnership must receive constructive
notice.
D) Third parties who have not dealt with the partnership, but who know of its existence,
must receive constructive notice.
The UN Security Council is composed of ________ member nations.
A) 5
B) 10
C) 15
D) 20
Janet pulls her car into a car wash line. She quietly sees her car getting washed by the
employees. She then refuses to pay for the service, stating that there was no contract. If
a lawsuit is filed, what would the result be?
A) Janet wins; there can be no contract as she didn’t ask them for their service.
B) The car wash wins; this is an express, unilateral contract that has been accepted.
C) Janet wins; there is no contract because the car wash made no promise to wash her
car.
D) The car wash wins; this is an implied-in-fact contract.