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An agreement that consists of two or more parts and calls for corresponding
performances of each part by the parties is called a:
a. partial contract.
b. divisible contract.
c. performance contract.
d. divided contract.
An administrative regulation:
a. is a guideline that may be voluntarily followed.
b. has the force of law.
c. is a suggestion of what will protect the environment.
d. is a standard used to guide an industry at the industry's discretion.
Alice strikes Mary, but the action is not purposeful. Mary should sue Alice for:
a. an intentional tort.
b. negligence.
c. strict liability
d. absolute liability.
The transfer of technology rights in a product to allow another firm in a foreign country
to produce a product in return for royalties or other specified payments is called:
a. exporting.
b. licensing.
c. agency representation.
d. subsidiary sales.
Sarbanes-Oxley would prohibit which of the following individuals from serving on an
audit committee of the company's board?
a. a director who accepts consulting fees from the company
b. a director who is affiliated with the company
c. a director who is affiliated with a subsidiary of the company.
d. all of the above.
Your private life is protected from intrusions by other people by:
a. the Fourth Amendment of the United States Constitution.
b. the Equal Protection Clause.
c. court decisions of the United States Supreme Court.
d. local ordinance.
____ is a body of principles that establishes the structure of a government and the
relationship of that government to the people.
a. A constitution
b. State statute
c. Stare decisis
d. The common law
Voluntary improvements in the fairness and ethics of business behavior are:
a. less effective than those brought about by government regulation.
b. less costly and intrusive than those brought about by government regulation.
c. virtually nonexistent in corporate America.
d. more common in third-world countries than in the United States.
Holders of automobile dealership franchises are protected from bad faith termination of
their dealerships by the:
a. Sherman Antitrust Act.
b. Robinson-Patman Franchise Act.
c. Automobile Dealers' Day in Court Act.
d. Franchise Holder Protection Act.
In a member-managed limited liability company, who controls the operation of the
firm?
a. partners
b. shareholders
c. members
d. none of the above
What damages are recoverable in a case of promissory estoppel?
a. profits that the promisor expected
b. profits that the promisee expected
c. an amount necessary to restore the promisee to the position he or she would have
been in had the promisee not relied on the promise
d. an amount necessary to restore the promisor to the position he or she would have
been in had the promisor not relied on the promise
Wellfix Corporation manufactures electric toasters and sells them to retail appliance
stores. Which of the following statements is true?
a. The toasters are considered equipment in the hands of the appliance stores that
purchase them.
b. The toasters are considered inventory in the hands of Wellfix.
c. The toasters are considered equipment in the hands of Wellfix.
d. The toasters are considered consumer goods in the hands of Wellfix.
The FTC Act prohibits:
a. price fixing.
b. labor unions.
c. unfair methods of competition.
d. price discrimination.
Maria intentionally attempts to have Patty break a contract Patty has with Alfred. Maria
will be liable under which theory of tort?
a. libel
b. product disparagement
c. contract interference
d. intentional infliction of emotional distress
For violation of the Sherman Act, the maximum fine that may be imposed on a natural
person is:
a. $1 million.
b. $350,000.
c. $0.
d. $1 billion.
A payee has no rights in an instrument until:
a. the drawer or the maker has delivered the instrument to the payee.
b. an acceptor has been established.
c. an accommodation party has signed the instrument.
d. a guarantor has signed the instrument.
The goal of the North American Free Trade Agreement (NAFTA) is to eliminate all
tariffs between Mexico, Canada, and the United States.
When a person is authorized by the principal to transact all affairs in connection with a
particular type of business or trade or to transact all business at a certain place, that
person is a __________ agent.
a. general
b. perfected
c. special
d. universal
A(n) __________ is an unauthorized change or completion of a negotiable instrument
designed to modify the obligation of a party to the instrument.
a. alteration
b. modification
c. transformation
d. transmutation
An insured person is generally allowed, by policy provision or statute, a grace period of
what length of time in which to make the payment of a premium due on a life insurance
policy?
a. 2 weeks
b. 30 to 31 days
c. 2 months
d. 15 days
When a zoning ordinance is adopted, any property used for a purpose that does not
conform to the zoning ordinance:
a. must be demolished.
b. must no longer be used for a nonconforming use or purpose.
c. may be used for any use that does not conform to the zoning regulation.
d. may continue to be used for the same nonconforming use.
A third person to whom a joint tenant's interest is transferred becomes a:
a. joint tenant.
b. cotenant.
c. tenant in common.
d. tenant by the entirety.
Which of the following will not result in dissolution of the partnership by court decree?
a. a partner becomes incapable of performing the terms of the partnership agreement
b. a partner persistently or willfully acts in such a way that it is not reasonably
practicable to carry on the partnership business
c. the expulsion of a partner
d. all of the above
When no limited partnership certificate is filed, what is the result?
a. Only limited partners are fully liable.
b. Only general partners are fully liable.
c. Limited partners retain their limited liability.
d. Both general and limited partners are fully liable.
In a contract in which a tenant borrowed money from a bank for the purpose of adding a
bathroom to her apartment, the landlord is:
a. a direct beneficiary.
b. in privity of contract with the tenant.
c. a third-party beneficiary.
d. an incidental beneficiary.
Strict tort liability is applied:
a. independently of the UCC.
b. without regard to privity of contract.
c. despite negligence on the part of the plaintiff.
d. all of the above.
Which of the following does not result in dissolution of the partnership by operation of
law?
a. the expulsion of a partner
b. bankruptcy of the partnership or of one of the partners
c. the death of a partner
d. an event that makes it unlawful for the business of the partnership to be carried on or
for the members to carry it on in partnership
Which of the following federal laws grants the SEC the power to suspend all trading
when markets are excessively volatile?
a. The Trust Indenture Act of 1939
b. The Market Reform Act of 1990
c. The Investment Advisors Act of 1940
d. The Remedies Act of 1990
When goods are sold for consumer use and personal injuries are sustained, a total
exclusion of liability in the sales contract is:
a. enforceable.
b. unenforceable.
c. unconscionable.
d. both b. and c.
When an offer has been accepted:
a. a subsequent revocation of the offer may serve to nullify the resulting contract.
b. a contract is formed, assuming that all of the other elements of a contract are present.
c. either party may withdraw from the resulting contract without consent.
d. the acceptance is executory.
The RMBCA provides that, absent a conflicting provision in the articles of
incorporation, directors may be removed:
a. with or without cause by a majority vote of the shareholders.
b. with cause by a majority vote of the shareholders, and without cause by a unanimous
vote.
c. with or without cause by a unanimous vote of the shareholders.
d. only with cause.
The greatest changes to the written Constitution have been brought about by:
a. departure by treaty.
b. judicial interpretation.
c. the amending process.
d. political party action.
A public corporation is:
a. a private corporation furnishing services on which the public is particularly
dependent.
b. a corporation organized for charitable and benevolent purposes or for purposes of
finance, industry, and commerce.
c. a corporation established for governmental purposes and for the administration of
public affairs.
d. also known as a public utility.
An agent acting under a power of attorney is referred to as an:
a. implied attorney.
b. attorney in fact.
c. implied agent.
d. attorney at law.
A debtor is presumed to be insolvent on and during what number of days immediately
preceding the date of the filing of a bankruptcy petition?
a. 30
b. 60
c. 90
d. 120
An assignment is a transfer of rights, and a delegation is a transfer of duties.
A tenant's interest in fundamental fairness might outweigh the landlord's interest in
freedom of trade.
The giving of notice to a seller within a reasonable time after a breach of warranty has
been discovered by the buyer is a condition precedent to a suit by the buyer for breach
of warranty.
Any false statement in an application binds the insured.
To determine whether the defendant is liable for negligence, a reasonable person
standard is employed.
A firm offer is an offer that states that it is to be irrevocable, or irrevocable for a stated
period of time.
A public warehouser has a lien against the goods stored for reasonable costs incurred
from the storage.
Under the "bedrock view," the purpose of a constitution is to state certain fundamental
principles for all time.
The Miller family, who operates a musical instrument manufacturing concern, has
decided to incorporate. The three (3) members of the Miller family, Mary, Mark and
Sue, would like to become a corporation and obtain limited liability; however, taxation
at the corporate level would be very costly for them. If possible, Mary Miller would
rather be taxed as a partnership. Mark Miller is worried about the additional paperwork
and meetings that incorporation would surely bring. Sue Miller does not want a large
board of directors to be formed. Sue fears that the board would somehow detract from
the family goals and orientation the business has always enjoyed. In light of these
concerns, is there a corporate form that would better suit the Miller family?
Each partner is an agent of the partnership.
A joint venture typically relates to the carrying out of a single enterprise or transaction.
The Foreign Corrupt Practices Act prohibits improper payments to influence foreign
officials.
A letter of credit agrees to provide the seller with needed currency exchanges when
transactions with foreign buyers occur.
Ordinarily, doing or promising to do what one is already under a legal obligation to do
is not consideration.
The relationship of landlord and tenant is always created by an express contract.
The FTC rule concerning holders in due course is confined to consumer credit
transactions.
Only written words that show an intention to transfer or assign will be given the effect
of an assignment.
Since 1947 and the end of the World War II era, the goal of the GATT has been to
restrict world trade.
Although a drawer has stopped payment on a check, the drawer still may be held liable
on the check unless the drawer has a defense that will defeat the holder in a lawsuit.
