Armenia purchased life insurance on her life. Regarding the beneficiary:
a. Armenia must name a person with a pecuniary interest in her life.
b. Armenia must name a close relative.
c. Armenia must name a close relative or business associate.
d. Armenia may name whomever she wishes.
In a joint venture, the parties:
a. combine their labor or property for a single undertaking and share profits and losses
equally.
b. combine their labor or property for a continuing business and share profits and losses
equally.
c. assume no personal liability beyond the risk of losing their initial investment.
d. none of the above.
__________ power relates to a firm’s ability to control price and exclude competitors.
a. Marketing
b. Market
c. Product
d. Production
Where privacy or nondisclosure of proprietary information is desired, it would be best
to seek protection under:
a. U.S. copyright laws.
b. U.S. patent laws.
c. state trade secret laws.
d. GATT.
Which of the following is true about judicial review of agency action?
a. Judges tend to substitute their own judgment for that of the agency.
b. Agency interpretation and application of the law are subject to “de novo” review.
c. An agency decision will not be reversed in the absence of an error of law or a clear
abuse of, or the arbitrary or capricious exercise of, discretion.
d. All of the above
An endorsement that does not name the person to whom the paper is negotiated is
called a(n):
a. incomplete endorsement.
b. empty endorsement.
c. unnamed endorsement.
d. blank endorsement.
Which of the following is a correct legal conclusion regarding reorganization
bankruptcy?
a. Individuals, partnerships, and corporations in business may be reorganized.
b. A plan for reorganization may be filed only by a committee of creditors.
c. When a reorganization plan is confirmed by the court, the creditors can revert back to
their original position if they are not satisfied with the plan.
d. Individuals within a particular class of creditors can be treated differently if they
object to the reorganization plan.
An interest in personal property or fixtures that secures payment or performance of an
obligation is called a:
a. guaranty holding.
b. security interest.
c. guaranty interest.
d. good-faith guaranty.
An extended time payment plan:
a. does not provide for a discharge of the debtor.
b. provides for a discharge of the debtor.
c. does not require creditors holding the same type or class of claim to be treated the
same way.
d. will not allow the debtor to pay the debts in installments if the debtor’s creditors had
not originally agreed to such installments.
The rules and regulations enacted by a corporation to govern the affairs of the
corporation and its shareholders, directors and officers are called:
a. articles of incorporation.
b. corporate management agreements.
c. bylaws.
d. articles of organization.
An action for injunctive relief may be granted:
a. if money is due and payable.
b. if the breach consists of doing a prohibited act.
c. if the breach would cause nominal damages.
d. if the breach would cause consequential damages.
Deirdre read that bids were being solicited for the construction of an apartment tower.
Deirdre submitted the lowest bid and was offered the contract contingent on her
providing acceptable sureties in the amount of $1 million. Because Deirdre never had
done work on this scale, it was virtually impossible for her to obtain the appropriate
sureties. She convinced Reassuring Sureties, Inc. to issue the necessary commitment by
misrepresenting that she was a famous builder in Canada. As the work progressed, it
seemed to be going well and Deirdre was asked to make the project 52 stories instead of
50 stories, which was the original contract height. She agreed to this change.
After the work was completed, many breaches of contract on the part of Deirdre
became evident. Reassuring Sureties was sued for a $500,000 loss. Reassuring Sureties
defended on the grounds of fraud and material change in the contract. Decide.
A motion to dismiss a lawsuit on the basis that, even if everything in the complaint were
true, the plaintiff would not be entitled to relief is called a motion:
a. to compel
b. to dismiss
c. for summary judgment
d. none of the above
The ethical category of integrity and truthfulness is best expressed as maintaining one’s
values and principles:
a. so long as profits can be maintained.
b. so long as the costs are not great.
c. unless deviating will go unnoticed.
d. despite the consequences or costs.
Which of the following will not be considered value in connection with determining
holder in due course status?
a. performing the act for which the instrument was given
b. promising to perform an existing legal obligation
c. receiving the instrument as security for a loan
d. taking the instrument in payment of a debt
Under the modern view, a residential lease:
a. must contain an escalation clause.
b. includes an implied warranty of habitability.
c. must be a tenancy for years.
d. cannot be a tenancy at will.
Oral or spoken defamation is:
a. slander.
b. libel.
c. privilege.
d. perjury.
Which of the following is true regarding export regulations?
a. Valid reasons for controlling the export of goods include national security, foreign
policy, or short supply.
b. The U.S. has recently implemented a system of granting export licenses that is
designed to differ from that used by the EU.
c. Only civil, not criminal, sanctions apply to those who violate export control
regulations.
d. Only governments, not individuals, are held liable when goods are exported that
might be used for improper defense purposes.
The right to ___________ is a second chance for a seller to make a proper tender of
conforming goods.
a. rehabilitate
b. repair
c. heal
d. cure
An administrative agency can be created to perform:
a. only one of the three functions of government (executive, legislative, or judicial).
b. any two of the three functions of government.
c. all three of the functions of government.
d. none of the three functions of government.
The partners who manage the limited partnership and are personally liable for the firm
debts are __________ partners.
a. general
b. active
c. licensed
d. unreserved
An individual who receives information from an insider or temporary insider is called a:
a. tippee.
b. tipper.
c. de facto insider.
d. virtual insider.
Agreements that are illegal are:
a. enforceable if one party acted in good faith.
b. voidable by one of the parties.
c. void.
d. voidable by either party.
Torts arise from a violation of a ____ duty.
a. public
b. private
c. contractual
d. criminal
A bailee’s interest in the bailed property can be characterized as:
a. ownership.
b. a fractional proprietary interest.
c. possession.
d. constructive ownership.
If appropriate assurance is not given in response to a demand for assurance of
performance, the demanding party may:
a. treat the contract as repudiated.
b. sue for libel.
c. file for an insurance payment.
d. not replace the repudiated contract.
One element involved in the determination of unconscionability is:
a. the comparative bargaining power of the parties.
b. the opportunity to make a contract for better terms with someone else.
c. the course of the economy after the contract is made.
d. whether a loss will be sustained by performance of the contract.
A __________ is a combination of co-ownership and individual ownership.
a. cooperative
b. residential lease
c. commercial lease
d. condominium
When consigned goods are sold by a factor:
a. title passes when the consignor approves the sale.
b. title passes even if the goods have been stolen, provided the factor is ignorant of this
fact.
c. the sale passes the title of the owner to the buyer.
d. strict compliance with the Federal Factors Act is required to pass title.
Which of the following is not a suretyship defense?
a. invalidity of the original obligation
b. principal discharged the obligation by payment
c. original contract between debtor and creditor was modified without surety’s
permission
d. reimbursement
If a check is made payable to Paolo, and Paolo signs on the back of the check, Paolo is:
a. the payee and the indorser.
b. the drawee and the indorser.
c. the payee and the endorsee.
d. only the indorser.
When a U.S. trademark holder licenses a foreign business use of its trademark overseas
and a third party imports these goods into the United States to compete against the U.S.
manufacturer’s goods, the foreign-made goods are called __________ goods.
a. “gray market”
b. counterfeit.
c. specially-licensed.
d. dumped goods.
Goods that are not yet in existence or are not yet owned by the seller are__________
goods.
a. fraudulent
b. nonexistent
c. future
d. contingent
A warehouser that holds itself out to serve the public generally without discrimination is
called a(n):
a. public warehouser.
b. general warehouser.
c. nondiscriminatory warehouser.
d. ordinary warehouser.
Laws that prohibit mislabeling of food, speeding, and sale of alcohol to minors exist
primarily:
a. for protection of the person.
b. for protection of public health, safety, and morals.
c. for protection of property.
d. for protection of the state.
Blocking laws prohibit the disclosure, copying, inspection, or removal of documents
located in the territory of the enacting country in compliance with orders from foreign
authorities.
Billy has a dispute with Sleepdigit Bedspring Company over a number of beds Billy
recently purchased from Sleepdigit for use in his hotel. Billy needs to decide whether to
pursue litigation or employ an alternative means of dispute resolution. What advantages
are most often associated with alternative dispute resolution? Which choice would be
most appropriate in this case?
Limited partners may contribute cash or property as their capital contributions.
When one party breaks the contract, the contract is said to be breached.
In every 10b-5 situation, the plaintiff must show “reliance” on the misrepresentation and
a resulting injury.
If a buyer refuses to pay for goods after an acceptance that was not revoked, the seller
may bring action to recover the purchase price and any incidental damages.
For an act to be considered a crime, it is necessary that some person be harmed.
Sureties have no rights to protect them from loss, to obtain their discharge because of
the conduct of others that would be harmful to them, or to recover money that they were
required to pay because of the debtor’s breach.
If there is a joint venture, the fault or negligence of one venturer will not be imputed to
the other venturers.
In most cases, value, which allows attachment of a security interest, is any
consideration that supports a simple contract.
When an accountant fails to complete an accountant’s contract, the accountant is still
entitled to the accountant’s fee.
When property is transferred to a trust, the trustee has legal title and the beneficiary has
equitable title.
Generally, when a person of legal age makes a contract with a minor, the contract is
voidable by either party.
The aim of consumer protection legislation is to protect persons of limited means and
limited knowledge.
Careless actions that result in injuries to others usually are not deemed to be torts.
In order for fraud liability to arise, the listener must actually rely on the false statement
of fact.
With regard to transactions between merchants, failure to repudiate a confirming letter
within ten (10) days after receipt binds the non-signing merchant, just as if he had
signed the letter or a contract.
An acceptance must be absolute and unconditional.
The power of a court to decide certain types of cases is called jurisdiction.