A business that holds itself out as being a corporation may not be able to deny corporate
status, even if it makes no attempt to incorporate.
a. True
b. False
Atlantic Applications, Inc., and Pacific Resale Company (PRC) enter into an oral
contract for Atlantics sale to PRC of six used forklifts for $1,900 each. Before PRC
takes posses-sion of the items, this contract is enforce-able by
a. either party.
b. neither party.
c. Atlantic only.
d. PRC only.
Private parties cannot sue violators of Section 10(b) and Rule 10b-5.
a. True
b. False
Finance Bank receives a check drawn on the account of Get-Rich Industries, Inc., one
of the banks customers, at 3 p.m. Friday. Hildy, the pre-senter of the check, is not one of
the banks customers. The bank uses de-ferred posting with a 2 p.m. cutoff hour. If it
decides to dis-honor the check, it must do so by midnight
a. Saturday.
b. Sunday.
c. Monday.
d. Tuesday.
The death of an offeree does not terminate an offer.
a. True
b. False
Faye owns the land on which Golden Spurs Ranch is situated, plus the ranch house,
barn, and other structures permanently attached to the land. Fayes brother Huey owns
everything else in the ranchs opera-tionlivestock, feed, and so on. The personal property
is owned by
a. Faye and Huey.
b. Faye only.
c. Golden Spurs Ranch.
d. Huey only.
Marvin is an employee of Wild Thing Farms. Marvin finds out that the head of Wild
Thing Farms is illegally importing endangered animals to sell as pets. If Marvin reports
his employers illegal activities he will probably be protected fro retaliatory discharge by
a. unemployment statutes.
b. worker compensation statutes.
c. whistleblower statutes.
d. no statutes.
When a minor disaffirms a contract, he or she cannot keep whatever he or she has
received as a result of the contract without paying for it.
a. True
b. False
Megan is charged with jaywalking, which is classified as
a. a misdemeanor.
b. a felony.
c. a petty offense.
d. no crime.
In direct exporting, a U.S. company signs a sales contract with a foreign purchaser that
provides for the conditions of shipment and payment of goods.
a. True
b. False
An accountants working papers are the documents that are used and developed during
an audit.
a. True
b. False
Bulbous Cordials, Inc., a U.S. firm, enters into an agreement with Columbiana Cacao,
S.A., a South American firm, to fix the price of dark chocolate in the U.S. market. If the
agreement is a per se violation of U.S. antitrust laws, a U.S. court could exercise
jurisdiction over
a. Bulbous Cordials and Columbiana Cacao.
b. Bulbous Cordials only.
c. Columbiana Cacao only.
d. neither Bulbous Cordials nor Columbiana Cacao.
Hi-Lite Manufacturing, Inc., orders supplies online from Indigo Parts Company. To
complete the order, the buyer is required to click on a button that says, in reference to
certain terms, “I agree. This is
a. a click-on agreement.
b. a default agreement.
c. an attribution agreement.
d. a shrink-wrap agreement.
A fictitious payee is a payee on a negotiable instrument whom the maker or drawer does
not intend to have an interest in the instrument.
a. True
b. False
A licensor might grant a license allowing a trademark to be used as part of a domain
name.
a. True
b. False
All contracts must be in writing to be enforceable.
a. True
b. False
Section 10(b) of the Securities Exchange Act of 1934 covers only corpo-rate officers
and di-rectors.
a. True
b. False
Kathryn signs a lease agreement for an apartment. Kathryn has entered into
a. anexpress contract.
b. animplied contract.
c. aquasi contract.
d. no contract.
Pat, a world famous musician and composer, agrees to give ten piano les-sons to Quinn
in exchange for $1,000. Pats attempt to delegate his con-tract to Ruth, an
in-experienced pianist, will probably be
a. permitted because contracts may be freely delegated.
b. permitted because the contract is concerned with music lessons.
c. prohibited because contracts may not be freely delegated.
d. prohibited because Pat and Ruth have very different skill levels.
The legality of an action is always clear.
a. True
b. False
Pat, an accountant, includes a false statement in a report for Quantity Overstock, Inc.,
that is filed with the Securities and Exchange Commis-sion. Quantity publishes a
misleading ad about its future prospects. Rita sees the ad and calls Stan, who buys stock
in Quantity. Under Section 18 of the Securities Ex-change Act of 1934, liability may
attach to
a. Pats report.
b. Quantitys ad.
c. Ritas call.
d. Stans purchase.
MeatMen, Inc. spends a great deal of money and effort to ensure that all employees are
safe on the job, that all products are safe for consumers, and that the environmental
impact of the corporation is minimal. MeatMen appears to strongly believe in the
concept of
a. the moral minimum.
b. corporate social responsibility.
c. “grey areas in the law.
d. government oversight.
Persons who keep wild animals are strictly liable for any harm inflicted by the animals.
a. True
b. False
Chris, a minor, signs a contract to purchase alcoholic beverages for Dine & Drink, his
parents restaurant. The contract is
a. valid but may be disaffirmed.
b. valid but may not be disaffirmed.
c. void as a matter of law.
d. void unless it is also signed by Edie, the manager of Dine & Drink.
Lauren owns a 1967 Ford Mustang, which Mike customizes and details to Laurens
specifications. The car earns several awards at regional ve-hicle customizing
competition shows. The result of Mikes efforts is
a. accession
b. acquisition
c. conversion
d. resolution.
Mickey is a director of Fine Art Dealers, Inc. Mickey is trained in art valuation. Fine
Art Dealers makes several purchases in which it pays too much money for artwork.
Mickey approves all the transactions without reading the details. Mickey is most likely
a. liable for breach of the duty of care.
b. not liable for breach of the duty of care.
c. liable for breach of duty of loyalty.
d. liable for violation of the business judgment rule.
In most cases, only a corporations common stockholders need to approve a merger.
a. True
b. False
Shelby offers to make digital copies of Relay Companys business conference
videotapes, CDs, DVDs, and other media for $500. Under the mailbox rule, Relays
acceptance by e-mail will be considered effective when
a. received.
b. sent.
c. followed up by a confirmation letter sent by regular mail.
d. composed on a Relay computer.
Denise, Ervin, and Flem occupy the positions of directors on the board of Gallery
Corporation. As directors, they may not
a. authorize major corporate policy decisions.
b. decide to issue stock and bonds, and declare dividends.
c. select and remove corporate officers.
d. subordinate the corporations welfare to their personal interests.
Larceny relies on fear and force.
a. True
b. False
Negotiation is the most complex form of alternative dispute resolution.
a. True
b. False
A design defect is not the sort of product defect that will support the imposition of
liability on a strict product liability basis.
a. True
b. False
Jen signs a check “pay to the order of Key drawn on Jens account in Little Bank to buy
Keys car. If there are insufficient funds in Jens account to cover the amount of the
check, but the bank pays it, this creates
a. a cashiers check.
b. an overdraft.
c. a stale check.
d. a stop-payment order.
Herb, a computer programmer for Inventory Control Corporation, is arrested in his
employers parking lot on suspicion of larceny. Herb must be informed of his right to
a. a trial by jury.
b. punishment.
c. question witnesses.
d. remain silent.
The person who owes the payment of a secured obligation is the secured party.
a. True
b. False