If repossessed collateral is sold or otherwise disposed of by the creditor, the time, place,
manner, and method of disposal must be:
a. commercially reasonable.
b. scheduled with the debtor so that the debtor is able to attend.
c. court ordered.
d. perfected.
Which of the following protects e-mail messages from unauthorized interception?
a. The First Amendment.
b. The GLB Privacy Act of 1999.
c. The Electronic Communications Privacy Act.
d. COPPA.
Ali took a seat at a booth at Midway Diner. Between the salt and pepper shakers, Ali
noticed something glittering. It was a diamond ring. The ring is:
a. abandoned property.
b. an accession.
c. mislaid property.
d. treasure trove.
Paul decided he did not want the new jeans he had purchased from a large discount
department store. He had worn them three times and decided he just did not like them.
The jeans fit him fine and there is nothing wrong with them. He takes the jeans back to
the store and, as is its policy, the store gave him a full refund of his money. Which
statement is correct?
a. Paul’s conduct was ethical as long as he was within the time frame for returns.
b. Paul’s conduct was unethical.
c. This is not an issue of ethics since people do this all the time.
d. Paul’s conduct was ethical since the store has a legal duty to return his money when
he returned the jeans.
Standard provisions in a contract that are often listed under the heading “Miscellaneous
are called:
a. boilerroom.
b. boilerplate.
c. boilerpot.
d. boilertape.
What is a major argument against the GATT Treaty?
a. The United States will have to compete against countries with unlimited pools of
exploited labor.
b. The United States will lose millions of jobs involving low-end employment and these
types of workers are least capable of finding other employment.
c. Both a and b above are major arguments against GATT.
d. Neither a nor b above is a major argument against GATT.
Pursuant to a public offering, a CPA firm prepared an unqualified opinion as to the
financial statements. After the offering, omissions and misstatements were found. The
CPA firm is now being sued by the purchasers of the stock. The purchasers are alleging
that the erroneous financial statements in the registration statement caused them to
suffer a monetary loss. The CPA firm can avoid liability if it can prove:
a. that it used due diligence in preparing the financial statements.
b. the corporation was the party who made misstatements and omissions.
c. the firm believed that the statements were accurate.
d. None of the above will avoid liability.
Neon orders one thousand 25-foot nylon ropes from Hang’em High Co. Upon
inspection of the delivery, Neon learns that Hang’em sent five hundred 25-foot ropes
and five hundred 20-foot ropes. Neon may:
a. demand that Hang’em send 500 additional 25-foot ropes.
b. accept the 500 conforming ropes and reject the 500 nonconforming ropes.
c. seek an installment contract.
d. declare an anticipatory repudiation.
Which of the following would suffice for a signature on a writing under the statute of
frauds?
a. A stamped signature.
b. A handwritten signature.
c. A name keyed at the bottom of an e-mail.
d. Any of the above would suffice. Judges define ‘signature very broadly.
A salesclerk at Sparkle Jewelry Store observed a customer remove a ring from a display
case and put it in his pocket. In most states, Sparkle:
a. can reasonably detain the customer for suspicion of shoplifting.
b. cannot detain the customer but can alert the police.
c. cannot detain the customer but once the customer leaves the store, the salesclerk can
make a citizen’s arrest.
d. cannot detain the customer but can sue for conversion.
If a registration statement contains a material misstatement or omission:
a. the company is liable and has no defense.
b. anyone other than the company who signed the statement is liable and has no
defense.
c. all experts are liable and have no defense.
d. the company is liable unless it can show due diligence.
Marla applies for and receives a three-year loan through Sharkey Lenders for $5,000 at
27% APR.If the loan agreement violates the applicable usury statute, Marla may be able
to keep:
a. the interest that exceeds the usury limit.
b. all of the interest on the loan.
c. the interest and the $5,000.
d. Any of the answer choices are possible, depending on where the loan was made.
A buyer may revoke an acceptance of goods if:
a. the nonconformity does not impair the value of the goods.
b. the buyer had a legitimate reason for the initial acceptance.
c. the buyer knew the nonconformity could not be cured.
d. the buyer thought they could easily cover.
Sandy, Ramon, and Bonnie were partners. Sandy dissociated from the partnership.
Bonnie and Ramon decided to continue the business. When Sandy dissociated, there
was a $50,000 debt owed to Great State Bank. Which statement is correct?
a. Sandy remains liable on the $50,000 debt owed to Great State Bank.
b. Only Ramon and Bonnie are liable for the $50,000 debt owed to Great State Bank.
c. The debt is extinguished as a result of the dissociation.
d. Whether Sandy remains liable depends on whether she filed a statement of
dissociation.
Zeno, Inc. is considering relocating its manufacturing facility from Illinois to Mexico
City. The stakeholders in this decision might include:
a. Zeno’s shareholders.
b. customers.
c. the Illinois community in which Zeno operates.
d. All of the above.
Wombart Manufacturing sells a machine on credit to Cryslie Printing Co. Wombart
insists on a security interest in the machine to:
a. give itself a legal interest in the machine.
b. give itself a legal interest in all of Cryslies property.
c. establish a priority claim in the machine ahead of other creditors of Cryslie.
d. Both a and c.
Micah signed a check in the lower right-hand corner and Andrew signed on the back.
The presumption is that:
a. Micah is the issuer.
b. Micah is the acceptor.
c. Andrew is the drawer.
d. Andrew is the maker and Micah is an indorser.
Charles and Becky are partners. If they have a disagreement, the Uniform Partnership
Act will govern their respective rights with each other:
a. despite any written partnership agreement they may have signed.
b. only if they do not have a written partnership agreement that addresses the issue of
dispute.
c. only if they agree to be bound by the UPA.
d. only if their written partnership agreement states that they will be bound by the terms
of the UPA.
Unethical behavior in an organization can create:
a. a cynical workforce.
b. a resentful workforce.
c. an unproductive workforce.
d. All of the above.
Cameron, editor of the local newspaper, assigned to Jim the writing of a story about
pollution of a nearby stream. Although Jim used reasonable care in gathering and
checking his information, unknown to Jim, the story contained a defamatory statement
about Maureen. Maureen reads the story and sues Jim for libel. Cameron, who read and
published the story:
a. must indemnify Jim for Maureens claim.
b. need not indemnify Jim for Maureens claim because Jim should have checked his
facts more carefully.
c. need not indemnify Jim for Maureens claim because Jim breached his duty to obey
instructions.
d. can recover damages from Jim for any injury to the newspaper resulting from Jims
story.
Mrs. O’Leary hired Jenna to sell her house in Michigan. She executed a power of
attorney in favor of Jenna authorizing her to do “anything and everything associated
with the sale of real estate, acting as a prudent person.” On May 30, Jenna finalized a
deal with Brandon for the purchase of the house. Brandon and Jenna signed the real
estate contract that day. Jenna learned the next day that Mrs. O’Leary had died May 29.
a. The contract is void since the agency terminated May 29.
b. The contract is valid since the agencys purpose was achieved before Jenna was
notified of Mrs. O’Leary’s death.
c. The contract is voidable at the option of Mrs. O’Leary’s estate.
d. The contract is voidable at the option of Brandon.
A union declares it will be engaging in a partial strike whereby its employees will
alternate between working for a period of time and then walking off the job for an
indefinite time. Thus, employees may work for a few days or only a few hours before
walking off the job again. The employer claims the union does not have the legal right
to engage in a partial strike. Which statement is correct?
a. The employer is correct. The union must either strike or workit cannot alternate
between working and striking.
b. The employer is correct only if the union does not state the specific hours or days
workers will be off the job. The law requires the union to provide the employer with at
least seven days’ notice of when workers will be off the job.
c. The employer is not correct since the NLRA expressly states workers have a right to
engage in a partial strike.
d. Whether the employer is correct depends on state law.
MegaCorp is incorporated in the state of Delaware and is registered only in Delaware.
Jolene purchased a MegaCorp product from a company’s sales representative following
a presentation in Michigan. Jolene was seriously injured by the product in Michigan.
Under the Model Act, if Jolene sues in Michigan, can MegaCorp defend the suit there?
a. MegaCorp may only defend against a lawsuit in Michigan if it first registers by
paying back fees, taxes, and penalties.
b. Yes, MegaCorp can bring or defend against a lawsuit in any state regardless of
whether the corporation is registered to business in that state.
c. Yes, MegaCorp can defend against a lawsuit in Michigan regardless of whether
MegaCorp is registered to do business in that state.
d. No. Jolene must sue and MegaCorp may defend a lawsuit only in Delaware.
Millie ordered clothes from a mail order catalog. No time was specified as to when the
goods would be shipped. In such a case the FTC requires that the company must ship
the goods to Millie:
a. within 3 business days after receiving the order.
b. within 10 business days after receiving the order.
c. within 30 days after receipt of the order.
d. within a reasonable time and within time lines consistent with industry standards.
Ryan, a minor, contracted to sell his auto to Ed, a 28-year-old. Ryan later refused to
complete the sale. If Ed sues to enforce the contract, Ed will:
a. win because Ryan was the seller.
b. win because minors can only avoid contracts for the sale of land.
c. lose, as the contract is void.
d. lose, because the contract is voidable by Ryan.
Creditors of Northern Hydraulics file an involuntary bankruptcy petition against it.
What is true of Northern Hydraulics.
a. Northern Hydraulics has at least $10,425 in debts
b. There are at least 12 creditors
c. a custodian has been appointed
d. It must make all the filings necessary under a voluntary petition
The most accurate statement regarding appellate courts is:
a. appellate courts often hear new evidence and testimony.
b. appellate courts generally accept the factual findings of the trial court.
c. only the federal court system has appellate courts.
d. appellate courts hear only criminal cases.
Ted and Alice own their recreational vehicle subject to a security agreement to Third
U.S. Bank to secure the repayment of the purchase money loan. Ted and Alice sell their
RV to Bob and Carol, who agree to take over the loan payments to the bank. There is no
novation with the bank. Under these facts, if Bob and Carol do not make the loan
payments, Third U.S. Bank:
a. can sue Bob and Carol only.
b. can sue Ted and Alice only.
c. can sue Bob, Carol, Ted, and Alice.
d. cannot sue anyone but can repossess the RV.
Management’s duty to have a rational business purpose, avoid illegal behavior, and
make informed decisions refers to its:
a. duty of care.
b. duty of loyalty.
c. duty of openness.
d. duty of fairness.
The burden of proof required in a criminal case is:
a. clear and convincing.
b. a preponderance.
c. beyond a reasonable doubt.
d. highest degree of honesty.
If a seller cures within a reasonable amount of time, the contract:
a. has been performed.
b. is breached.
c. is void.
d. is voidable.
You have placed an antique sofa up for auction and the auctioneer has not made any
special announcements about the sale. You can withdraw the sofa at any time before the
auctioneer closes the sale by announcement or by the fall of the hammer.
In the Unocal Corp. v. Mesa Petroleum Co. case, the court said the board of directors
could act with the primary goal of keeping themselves in office.
An executor who is related to the testator is not entitled to compensation.
Sonny had a contract to paint the rides at an amusement park and needed a paint that
would protect against extensive wear, potentially harsh weather, and rust. Sonny asked
for paint samples from several companies, and selected one supplier based on the
quality of the sample. When he received his order, he found that the quality did not
match that of the sample. What recourse does Sonny have?
A business corporation can be incorporated under either state law or federal law.
The SEC has enforcement powers, including the power to issue cease and desist orders,
to levy fines, and to confiscate profits from illegal transactions.
Jones contracts to buy a computer from Martin for $1500. The contract calls for Martin
to service the computer quarterly for the first year and to tutor Jones on how to use the
software. Is this contract covered by the UCC or common law?
Generally, a joint venture is a partnership created for one limited purpose.
List the warranties a transferor of a negotiable instrument makes.
Vick Valve Company makes valves for plumbing fixtures. At the beginning of the year,
it sends out a price list addressing each one, “To our valued customers.” Honest Hank
Hardware orders a variety of valves at the prices quoted on the price list. Vick Valve
must honor the prices on the list and sell the valves to Honest Hank.
Daniel went onto an Internet message board and found that his ex-wife, Faye, had
posted a message calling him a fat, insensitive jerk who only cared about watching
sports on TV. Does Daniel have any protection against Fayes making such statements to
a potentially large number of readers, some of whom may know Daniel and some of
whom may not?
Individual debtors are allowed to keep some assets in a Chapter 7 bankruptcy.
In 2005, the EPA set standards for soot emissions from buses and power plants that
were recommended by its own Scientific Advisory Committee.
Major Corporation wants to acquire control of Forte Company. What are some legal
steps Forte can take to resist a hostile takeover?
Define these terms: usage of trade; course of dealing; and course of performance.
Whistleblowers are employees who disclose illegal behavior on the part of their
employers.
In an advertisement, FreshAir, Inc. stated that its air freshener lasted for 3 hours while
the competitor, Smell Sweet, lasted for only 36 minutes. In fact, Smell Sweet freshens
the air for more than 2 hours. FreshAir has not violated the Lanham Act because the
First Amendment’s guarantee of freedom of speech applies.