A(n) ________ refers to an actual piece of paper, such as a warehouse receipt or bill of
lading, which is required in some transactions of pickup and delivery of sold goods.
A) codicil
B) letter of credit
C) document of title
D) acceptance draft
The Double Jeopardy Clause of the Fifth Amendment protects persons from ________.
A) evidence procured through unreasonable search and seizures
B) confessions obtained through physical force during an interrogation
C) being tried twice for the same crime
D) being subjected to a heavier penalty or longer imprisonment than originally
sentenced to
Which of the following statements is true about the freedom of speech guaranteed by
the Bill of Rights?
A) The Freedom of Speech Clause was added to the Constitution in the third
amendment.
B) The Freedom of Speech Clause protects speech only, not conduct.
C) There is no provision for fully protected speech in the Constitution.
D) Burning the American flag in protest to a federal government military action is in
violation of the Freedom of Speech Clause.
A lessor has the ________ if the lessee breaches the contract by repudiating all or any
part of the contract.
A) right to replevy
B) right to cancel a contract
C) right to cure
D) right to obtain specific performance
A ________ is a specialized state court that supervises the administration and
settlement of estates.
A) small claims court
B) federal court
C) tort court
D) probate court
Which of the following situations is an example of undue influence?
A) Jason’s doctor threatens him to write a will in his favor.
B) Rebecca enters into a contract with Mark to sell her house with consent.
C) Julia signs an employment agreement with her new employer.
D) Marla signs a lease contract with Emily under mutual consent.
Which of the following rules provides that an accountant is liable only for negligence to
third parties who are members of a limited class of intended users of the client’s
financial statements?
A) Section 552 of the Restatement (Second) of Torts
B) the foreseeability standard
C) the Ultramares doctrine
D) due diligence defense
A full warranty is an example of a(n) ________.
A) express warranty
B) limited warranty
C) implied warranty of fitness for a particular purpose
D) implied warranty of fitness for human consumption
A transfer of the right to the possession and use of real property for a set term in return
for certain consideration is known as a(n) ________.
A) title transfer
B) lease
C) novation
D) easement
In which of the following cases is an overdraft created in a drawer’s account?
A) when a properly payable check issued by the drawer is presented for payment, but
the drawer’s account does not have sufficient funds in it
B) when the drawer issues a stop-payment order for a check, but the bank still goes
ahead and pays the holder of the check
C) when the bank pays the holder of a check in which the amount payable is altered to
indicate a higher amount than was originally intended
D) when the payee presents the check after six months from the date of the check and
the bank still pays the holder
A number of stores agree to stop stocking handsets by a certain manufacturer of mobile
phones. This is an example of ________.
A) conscious parallelism
B) price fixing
C) accommodation
D) group boycott
A government agency has been called in to interrogate prisoners in an attempt to stop
future terrorist attacks on the United States and her allies. If the use of unapproved or
unconstitutional methods to obtain information may prove to save lives, the government
agency’s actions best correspond to which school of jurisprudential thought?
A) Command School
B) Law and Economics School
C) Analytical School
D) Historical School
Which of the following is true about a draft?
A) It is always a two-party transaction.
B) It is an unconditional written promise to pay.
C) It is a note created after payment of money.
D) It is payable on demand.
What is the difference between statutes and ordinances?
A) Statutes are enacted by federal administrative agencies, while ordinances are enacted
by state administrative agencies.
B) Statutes are enacted by counties, while ordinances are enacted by state legislatures.
C) Statutes are enacted by Congress and state legislatures, while ordinances are enacted
by local government bodies.
D) Statutes are enacted by the president, while ordinances are enacted by state
governors.
Which of the following statements is true of states’ police power?
A) Police power restricts states from regulating interstate commerce, although it
happens within their borders.
B) The states are allowed to regulate army activities within their borders.
C) They are given the authority to enact laws that regulate the conduct of business.
D) The police force of a state is controlled by the federal police department.
Which of the following is true of maximize profits theory?
A) It requires an organization to correct the social injury it causes.
B) It considers the interests of people other than shareholders to be unimportant.
C) It considers the interests of all people associated with a business to be important.
D) It requires an organization to solve social issues that it did little to cause.
________ is a rule that states that if a minor has transferred money, property, or other
valuables to the competent party before disaffirming the contract, that party must place
the minor in status quo.
A) Emancipation doctrine
B) Infancy doctrine
C) Duty of restitution
D) Duty of restoration
Which of the following amendments to the U.S. Constitution contains the Due Process,
Equal Protection, and Privileges and Immunities Clauses?
A) the Twelfth Amendment
B) the Thirteenth Amendment
C) the Fourteenth Amendment
D) the Fifteenth Amendment
Which of the following is true of a business operating under sole proprietorship?
A) It is not considered a separate legal entity.
B) It cannot be sold when the owner decides to do so.
C) It requires governmental approval when being transferred.
D) It has access to unrestricted capital by means of investments.
Three friends form an LLC by contributing $40,000, $80,000, and $120,000. The LLC
is designated to be member-managed. The LLC needs to sign an agreement with a
supplier for conducting the business. The authority to bind the LLC to a contract with
the supplier lies with ________.
A) only the member whose capital contribution to the LLC is the highest
B) all the three members
C) the nonmanager members
D) the member who is appointed as the manager
Keith appoints Peter, a real estate agent, to sell his house for him, but Peter’s real estate
agency license is revoked before he can sell Keith’s house. This would result in the
agency being ________.
A) terminated by an unusual change in circumstances
B) terminated by impossibility of performance
C) terminated by operation of law
D) wrongfully terminated
Which of the following is true of the business judgment rule?
A) The rule encourages the undertaking of high-risk, socially desirable endeavors.
B) The rule holds directors liable to the corporation for honest mistakes of judgment.
C) The rule makes officers liable to the corporation for honest mistakes of judgment.
D) The rule operates based on the benefit of hindsight as an important factor.
Which of the following constitutes an agency?
A) principal-agent relationship
B) agent-agent relationship
C) principal-principal relationship
D) agent-independent contractor relationship
Intentional misrepresentation is commonly referred to as ________.
A) erroneous misrepresentation
B) fraud
C) duress
D) undue influence
Section 14(a) of the Securities Exchange Act of 1934 is a(n) ________.
A) investment provision
B) antifraud provision
C) share exchange provision
D) antitakeover statute
Which of the following best defines the term distributional interest?
A) the ratio in which profit is distributed among members of an LLC
B) the process of distributing profits or losses according the capital investment of the
member
C) the constitution of management of the LLC based on the extent of each member’s
financial investment
D) a member’s ownership interest in an LLC that entitles the member to receive money
and property from the LLC
________ refers to a concept that requires lawsuits to be heard by the court with
jurisdiction that is nearest the location in which the incident occurred or where the
parties reside.
A) Jurisdiction
B) Venue
C) Circuit
D) Stare decisis
The national ambient air quality standards ________.
A) divide pollutants into five groups based on the risks they pose to humans
B) represent a set of values for certain pollutants that have two levels
C) apply to all sources of pollution
D) are administered exclusively by the federal government
Which of the following is true about an allonge?
A) It must contain the name of a payee to be valid.
B) It must be accepted by the payee to be valid.
C) It must be affixed to the indorsement.
D) It must be provided only on demand.
Kinetosphere Automation, Inc. (K.A.) makes a mandatory employment contract with all
its employees. The contract states that K.A.’s employees are not to work for any other
organization while they are employed by K.A. If K.A. finds an employee who is also
serving another company, it can approach the court to obtain a(n) ________ to prevent
the employee from working in the other company.
A) restitution
B) rescission
C) injunction
D) subjugation
Which of the following classifications of contracts is based on enforceability?
A) formal contracts
B) void contracts
C) quasi-contracts
D) executed contracts