Few securities can be resold without registration.
a. True
b. False
When a breach of contract occurs, the innocent injured party has a duty to mitigate the
damages.
a. True
b. False
A time draft is payable on sight.
a. True
b. False
When a sale of assets amounts to what in fact is a consolidation, the ac-quiring
corporation inherits the selling corporations liabilities.
a. True
b. False
The Anti-Counterfeiting Trade Agreement applies to counterfeit physical goods and to
pirated copyrighted works being distributed via the Internet.
a. True
b. False
The method of perfecting a security interest does not depend on the classification of the
collateral.
a. True
b. False
Under the perfect tender rule, if tender is not perfect, the seller is obligated to try again.
a. True
b. False
Under the principle of comity, one nation may defer and give effect to the laws and
judicial decrees of another country.
a. True
b. False
A unilateral mistake always gives the mistaken party a right to relief from the contract.
a. True
b. False
A security interest is enforceable only if the collateral is in the secured partys
possession.
a. True
b. False
Kathleen sells Richard a racehorse for $1,000. Both Kathleen and Richard think that the
horse is too slow to win any races. Richard then enters the horse in a race, and it wins
easily. He enters it in more races, and the horse soon wins more than $1 million.
Kathleen tries to rescind the contract to sell the horse, claiming that it was worth more
than $1,000. A court will
a. cancel the contract due to Kathleens failure to know the horses value.
b. cancel the contract due to Richards failure to know the horses price.
c. cancel the contract due to the difference between the contract price and the horses
true value.
d. enforce the contract.
Rafi, a director of Super Service Station Corporation, does not attend a board meet-ing
for three years. During that time, Twyla, Supers president, makes improper loans that
cost the company $100,000. Rafi is most likely
a. liable for negligence or mismanagement.
b. liable for violation of the business judgment rule.
c. not liable because missing meetings is an honest mistake.
d. not liable because missing meetings is only poor judgment.
If the interests of different stakeholders conflict, it can be difficult to determine which
groups interest should receive greater weight.
a. True
b. False
Normally, when a nonbreaching party has been damaged by a breach of contract, he or
she does not have a duty to mitigate those damages.
a. True
b. False
The state cannot dissolve a corporation.
a. True
b. False
Stored-value cards are a form of digital cash.
a. True
b. False
Joey reproduces Minas copyrighted work Storm on the Mountain without paying
royalties. Joey is most likely excepted from liability for copyright infringement under
the “fair use doctrine if
a. Joey copies the entire work.
b. Joey distributes the copies without charge to the public.
c. Joeys use has no effect on the market for Minas work.
d. Joeys use is for a commercial purpose.
Generally, federal se-curities law are patterned after states antifraud laws.
a. True
b. False
Life tenants are persons who share ownership rights simultaneously.
a. True
b. False
Clean Health Insurance, Inc. sends Kathy a health insurance termination. The health
insurance termination is
a. governed by the E-SIGN Act.
b. not governed by the E-SIGN Act.
c. governed by Article 2 of the UCC.
d. governed by Article 2A of the UCC.
Performance can be accomplished by tender.
a. True
b. False
Constructive eviction occurs when a tenant moves off the premises in re-taliation
against the landlord.
a. True
b. False
Uri discovers a boat adrift, and retrieves and anchors it. The boat features a number on
its side and other evidence pointing to its owner, Vera. This is
a. an involuntary bailment.
b. a voluntary bailment.
c. an express bailment.
d. no bailment.
Insurance coverage is never effective until a formal written policy is issued.
a. True
b. False
Law enforcement uses social media to detect and prosecute criminals.
a. True
b. False
Wild Rides Theme Park owes both RollercoasterRepair, Inc. and Hot Dog Harry money.
RollercoasterRepair orally agrees to assume Wild Ridess debt to Hot Dog Harry to
prevent Hot Dog Harry from filing suit against Wild Rides. This contract is enforceable
by
a. no party.
b. any party.
c. Wild Rides only.
d. RollercoasterRepair only.
Eighty-year-old Clark exhibits confusion, forgetfulness, and disorienta-tion. Dave,
Clarks doctor, believes that the symptoms indicate dementia. Elsa, who has significant
contact with Clark, believes that he is in a state of men-tal decline. These facts indicate
a. an urgency that Clark distribute his assets.
b. Clarks lack of capacity.
c. Daves misdiagnosis.
d. Elsas intent to take advantage of Clark.
If no heirs are found, the property of a decedent is transferred to a charitable
organization.
a. True
b. False
A floating lien cannot apply to the proceeds of a sale of after-acquired property.
a. True
b. False
Madison is the chief executive officer of Nitro Medico, Inc., which is required to file
certain financial reports with the Securities and Exchange Commission (SEC). Under
the Sarbanes-Oxley Act of 2002, Madison must
a. certify that the reports are complete and accurate.
b. designate a corporate official to assume liability for inaccuracies.
c. do nothing.
d. read the reports and be prepared to answer questions about them.
Jack owns the surface rights for Rocky Ridge Ranch, but does not own the subsurface
rights. Ginny owns the subsurface rights. Rocky Ridge Ranch has a historic barn, which
is damaged when Ginny is excavating minerals from the ranch. Who is most likely
responsible for the damage to the barn?
a. Ginny only
b. Jack only
c. Ginny and Jack
d. no one