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The UCC provides for a transfer warranty on unauthorized or repetitive remotely
created checks.
In determining whether consideration exists, the law is not concerned with any
disproportion in value between the things exchanged in a contract.
Parties to sale contract should not necessarily act in a commercially reasonable manner
and good faith.
Ratification ends the right to rescind a contract.
There is a similar set of legal rules that apply to both foreign and alien corporations.
A corporation's sale of substantially all of the assets of the business must be approved
by its shareholders.
Under Section 11 of the Securities Act of 1933, an auditor may escape liability by
proving he/she had no reason to believe and did not believe that there were any
misstatements or omissions of material fact in the financial statements he/she audited.
For a noncompetition clause to be enforceable, the clause must serve a legitimate
business purpose.
The death of a partner before the expiration of the term of a partnership is a
nonwrongful dissociation.
The buyer may reject an installment delivery only if the nonconformity substantially
affects the value of that delivery and cannot be corrected by the seller in a timely
fashion.
The shareholders of a corporation that has elected S Corporation status may report the
income and losses of the business on their individual federal income tax returns.
The person who receives a right under a contract has obtained a delegation.
If the seller fails or refuses to deliver the goods called for in the contract, the buyer can
purchase substitute goods and recover as damages from the seller.
Consideration can be a promise for another promise.
The Uniform Commercial Code gives the contracting parties very little flexibility in
deciding between themselves how they will perform a contract.
Jones purchased a second hand car from Ralph with an assurance of no problems in the
car. Jones will succeed in his claim under express warranty.
Threatening to breach a contract unless the party agrees to modify the terms of a
contract is an example of economic duress.
The same behavior will sometimes violate both civil law and the criminal law, and in
such a case, both liabilities can be claimed at the same time.
A person who has leased a personal property has ownership rights and can also
subsequently sell the property to a third person.
A seller of goods can never pass "better title" to those goods than the title that she has.
Generally, the procedure for declaring a forfeiture and recovering property sold on a
land contract is simpler and less time-consuming than foreclosure of a mortgage.
In some cases, both principal and agent sometimes are liable for an agent's torts.
A condition subsequent cannot be a valid reason for the discharge of a duty.
A credit card issuer that fails to comply with the Fair Credit Billing Act forfeits its right
to collect the disputed amount from the cardholder.
A professional may delegate his/her duty without the consent of the client.
An assignee can notify the obligor of the assignment at any point of time that he/she
desires.
In a partnership, some classes of partners may have greater voting rights than others.
The term rescind means to end a contract.
Most information-gathering efforts by administrative agencies are considered so
intrusive as to amount to a prohibited search and seizure.
Under the doctrine of respondeat superior, a corporation is liable for an employee's tort
that is reasonably connected to the authorized conduct of the employee.
In the case of false imprisonment, the plaintiff must be under confinement for a long
time.
The Equal Protection Clause prevents states and the federal government from enacting
criminal laws that discriminate against different classes of individuals.
Title VII of the 1964 Civil Rights Act forbids employment discrimination on the basis
of race, color, religion, sex, and national origin.
Andrew, being a partner, has appointed a caretaker for his property. Therefore, he has
committed a wrongful dissociation.
Profit maximization compels a decision maker to consider stakeholders other than the
corporation and its shareholders.
Agency action may be overturned if it is unsubstantiated by the facts before the agency
when it acted.
A contract to commit a serious crime is a legal contract.
An agent who is aware that the principal does not properly exist under the law, but
continues to act in their name is personal liable to all third party individuals for
transactions that occur.
Generally, if there is a good faith dispute over a matter, a person's threat to file a lawsuit
to resolve that dispute is considered to be improper.
A voidable contract creates no obligation and is not enforceable by any party.
Which of the following is not essential to the formation of a mining partnership?
A. Joint operation of property
B. Joint ownership of a mineral interest
C. Active physical participation in operations
D. Sharing of profits and losses
What distinguishes a joint tenancy from a tenancy in common?
A. Marriage between tenants
B. Right of survivorship
C. An easement by reservation
D. A bargain and sale deed
Jill voluntarily uses Joe's lawn mower, even though Joe had told her that his mower
frequently fails and can even cause accidents. In case of an accident, Joe has the
defense of:
A. contributory negligence.
B. assumption of risk.
C. comparative negligence.
D. comparative fault.
Prof. Bob DeSlob writes a check on his Big Bank checking account for $1 payable to
"Department of Business Law Coffee Club" to pay for his weekly membership and
gives it to his colleague Carol. Bob does not place a decimal point after the "1" nor does
he complete the line ending in "dollars." Carol, knowing that Bob can well afford it,
prints in block letters the words "One Hundred" on the line ending in "dollars." Carol
then gives the check to Dot, the Department secretary who is in charge of the Coffee
Club. Dot presents the check to Big Bank for payment, and Big Bank charges $100
from Bob's account. Which of the following statements is most accurate?
A. Bob's account must be recredited $99.
B. Bob's account must be recredited $100.
C. Bob contributed to the alteration and may be barred from claiming forgery.
D. Bob had a duty to place a stop-payment order on the check.
The Newtown Police Dept. (NPD) is a force of 55 officers and 30 support personnel.
NPD has just adopted new hiring standards for new police officers. These include a
minimum height of 5'8", a minimum weight of 160 pounds. Susan is a recent graduate
with a Bachelor's Degree in Police Science. She wants to get a job as a police officer in
Newtown. However Susan is only 5'5" and she weighs 130 pounds. If Susan brings a
legal challenge to NPD's new hiring standards, what legal basis might she have?
A. Disparate treatment
B. Disparate impact
C. Irrational standards
D. Irrational policy
The mere presence of a Nevada corporation's vacant property in California is sufficient
to subject the corporation to taxes in California.
Which of the following is true of assignments?
A. Early common law recognized assignments.
B. Contract rights have always been considered transferable.
C. Article 2 of the UCC deals with assignments of rights.
D. The laws regarding assignment have gradually become stricter.
Which of the following statements is true regarding a secured creditor's disposition of
the collateral after the debtor's default?
A. The debtor cannot redeem the collateral after his default.
B. The collateral must be disposed of by private sale.
C. The creditor may opt not to repossess the collateral and instead sue the debtor on his
underlying obligation.
D. If the proceeds realized from the sale of the collateral exceed the various expenses
that must be satisfied from those proceeds, the surplus goes to the creditor.
Which of the following can be negotiated or transferred only by indorsement?
A. Order paper
B. Bearer paper
C. Cashier's check
D. Teller's check
Which of the following is a transfer of the right to possess and use personal property
belonging to another without gaining any ownership rights?
A. Conversion
B. Bailment
C. Inheritance
D. Lease
Tom wrote a check to Mary for $10. Tom was careful and not negligent in the way he
wrote the check. Nevertheless, Mary cleverly altered the check to read $1,000. Tom's
bank cashed this check and deducted that amount from his account. Which of the
following is correct?
A. Tom is liable on this check, but only for $10.
B. Tom is liable on this check for $1,000.
C. Tom is liable on this check for nothing.
D. Tom must reimburse the bank for any losses it suffers related to this check.
Under the Model Business Corporation Act (MBCA), ultra vires may be asserted by:
A. a shareholder seeking to enjoin a corporation from executing a proposed action that
is ultra vires.
B. a federal judge who may have the power to dissolve a corporation that exceeds its
powers.
C. the management suing the corporation for damages caused by exceeding the
corporation's powers.
D. the secretary of state who may have the power to enjoin an ultra vires act.
What allows a defendant to be held liable for infringement even though the subject
matter he used contained elements that were not identical to those described in the
patentee's claims of invention, but nonetheless, may be seen as equivalent to those of
the patented invention?
A. Literal infringement
B. Double jeopardy clause
C. Strict liability
D. Doctrine of equivalents
A contract that cannot be performed within one year from the day on which it comes
into existence:
A. is within the statute of frauds.
B. need not be in writing.
C. is called a unilateral contract.
D. is essentially illegal.
Most states have enacted _____ statutes, which broaden the legal objectives of
corporations.
A. Good Samaritan
B. corporate constituency
C. control share acquisition
D. business combination
Which of the following characterizes an auction "without reserve"?
A. Bidders must necessarily be merchants
B. Sellers must necessarily be merchants
C. Goods cannot be withdrawn after a call for bids
D. Buyers are treated as having made an offer to sell
Which of the following is true about buyout of nonwrongfully dissociated partners?
A. The partnership may wait to buy out the partner until the end of the partnership's
term.
B. The buyout price must deduct the interest from the date of dissociation.
C. The dissociated partner cannot ask the court to determine the buyout price.
D. The partner must be paid in cash within 120 days.
Which of the following is NOT true about Title VII?
A. It forbids discrimination on the basis of national origin.
B. It prohibits discrimination on the basis of homosexuality or transsexuality.
C. It prohibits racial discrimination against whites.
D. It forbids religious discrimination against atheists.
The 2005 revisions of the Bankruptcy Code makes it the responsibility of the _____ to
determine that a pleading of insolvency is well grounded in fact and is either warranted
by existing law or is based on a good faith argument for extending existing law.
A. attorney
B. debtor
C. creditor
D. court
Which of the following is not a necessary element of the definition of partnership
according to the RUPA?
A. Co-ownership of the assets used by the business
B. Association of two or more persons
C. Limited liability of partners
D. Carrying on of a business
Which section of the UCC defines what constitutes default in a secure transaction?
A. 2-205
B. 3-104
C. The UCC does not define default; it is defined in private agreements between the
parties.
D. 9-102
The European Union regulatory scheme is premised on what is known as the _____
principle that requires companies to demonstrate that a chemical is safe before it is
produced and distributed.
A. exclusion
B. precautionary
C. equivalence
D. uncertainty
Which of the following is a uniform state law designed to remove "barriers to electronic
commerce validating and effectuating electronic records and signatures"?
A. Uniform Electronic Transactions Act (UETA)
B. Electronic Signatures in Global and National Commerce Act (E-Sign)
C. Electronic Communications Privacy Act (ECPA)
D. Graham-Leach-Bliley Act (GLBA)
Bennett is in the process of making an important decision for his firm. Which of the
following actions strengthens the argument that Bennett is a utilitarian?
A. Bennett chooses the alternative that promises the highest net welfare to society as a
whole.
B. Bennett implements the alternative that allocates society's benefits and burden most
fairly.
C. Bennett considers whether everyone is getting what he deserves.
D. Bennett determines whether anyone's rights are negatively affected by an alternative.
The property held in trust is called the _____.
A. attachment
B. lien
C. corpus
D. accession
Which of the following is true about implied authority?
A. It is the sole determinant of a partner's actual authority.
B. It is determined with reference to what is usual business for partnerships of the same
general type.
C. It exists because it reasonably appears to a third party that a partner has authority to
do an act.
D. It may contradict a partner's express authority.
A gift is given to the testator's issue or descendants, with each surviving descendant
dividing the share that his or her parent would have taken if the parent had survived.
This is known as division _____.
A. per stirpes
B. per capita
C. inter vivos
D. causa mortis
Guy and Boyd make an oral contract whereby Guy agrees to sell Boyd, 480 widgets
(goods) at a price of $480. Later, the parties want to modify the contract so that the
price would become $520. This modification:
A. must be in writing.
B. must be oral because the first contract was oral.
C. can be oral but need not be.
D. is unenforceable because the first contract is unenforceable.
Which of the following is often taken to be the equivalent of an assertion?
A. Oversight
B. Concealment
C. Reliance
D. Materiality
Hally took advantage of a confidential, trusting relationship with Gwyn when they
entered into a contract. Now, Gwyn can seek remedy based on:
A. duress.
B. unconscionability.
C. undue influence.
D. fraud in the execution.
