The rent-control ordinance is widely accepted by landlords as the ordinance fixes the
rent at a specific amount and provides for minor annual increases.
The right of first refusal gives existing shareholders the option of subscribing to new
shares being issued in proportion to their current ownership interests.
The goal of Chapter 11 bankruptcy is to reorganize the debtor with a new capital
structure.
Personal defenses cannot be raised against HDCs to deny the payment of negotiable
instruments.
Strict liability is liability with fault.
Title VII does not cover the discrimination of a woman employee having a medical
condition related to pregnancy or childbirth.
No par value shares are common stock on which the corporation has set the lowest price
at which the shares may be issued by the corporation.
In the event of an agency by ratification, an agent is liable for any misrepresentation.
Article 4A of the UCC establishes rules regulating the creation and collection of and
liability for wire transfers.
For the federal courts to hear lawsuits involving the diversity of citizenship, the dollar
amount of the controversy must not exceed the sum or value of $75,000.
Shareholder resolutions are usually made when the corporation is soliciting proxies
from its shareholders.
The common law allows the parties to a contract to agree on who will bear the risk of
loss if the goods subject to the contract are lost.
Compliance with GAASs automatically relieves auditors of liability to clients in
negligence cases.
Employees working for an employer covered under Title VII can bring actions for
employment discrimination.
It is good practice to establish voting rights in a limited partnership agreement or
certificate of limited partnership.
A person charged with a crime in the United States is presumed guilty until proven
innocent.
An accommodation party who signs an instrument guaranteeing payment is secondarily
liable on the instrument.
The corporation that continues to exist after a merger is called the merged corporation.
All the states in the United States are consistent in applying the mailbox rule to email
acceptances.
The Critical Legal Studies School of jurisprudence believes that legal disputes should
be solved by applying arbitrary rules.
Statutes are written laws that establish certain courses of conduct that covered parties
must adhere to.
The STOCK Act allows federal pensions to members of Congress who are convicted of
felonies involving public corruption.
One of the most important purposes of Section 10(b) and Rule 10b-5 is to promote
insider trading.
Property is considered mislaid property if it is taken away from the owner without his
or her knowledge.
State and local laws that conflict with valid federal law are considered to be
constitutional.
Food does not have to be entirely pure to be distributed or sold; it only has to be
unadulterated.
The debtor is not allowed to have an attorney during the first meeting of the creditors.
Under Section 3 of the Clayton Act, a tying arrangement is lawful if there is some
justifiable reason for it.
A party to a contract can sue a third person only if the third person acted with malice or
bad faith.
If an agency terminates by operation of law, there is no duty to notify third parties about
the termination.
If a contractual duty has been discharged, the contracting party owes an absolute duty to
perform the duty.
A preliminary prospectus is a written disclosure document that must be submitted to the
SEC along with the registration statement.
Under the Treaty Clause, only the federal government can enter into treaties with
foreign nations.
Conch Corporation, a global oil and gas company, has plans to open a subsidized
postsecondary vocational school in the town of Cristen, where one of their offices is
situated. The plan was put to vote and approved despite some objection from
shareholders. The school is being opened in collaboration with the local government,
and the objective is to help the youth of that neighborhood, especially dropouts, learn a
vocational skill. What social responsibility theory describes Conch Corporation’s move
to open the school?
A) moral minimum
B) maximizing profits
C) corporate citizenship
D) stakeholder interest
A(n) ________ is a withdrawal of an offer by the offeror that terminates the offer.
A) rejection
B) advertisement
C) revocation
D) counteroffer
Which of the following statements is true of the legislative branch of the federal
government?
A) It is responsible for enforcing federal law.
B) It permits a state to have two senators in the U.S. Senate.
C) It provides for the election of the president and vice-president.
D) It provides for the creation of federal courts by Congress.
The ________ is a government agency that insures deposits at most banks and savings
institutions in the United States.
A) Federal Deposit Insurance Corporation
B) Federal Reserve System
C) Resolution Trust Corporation
D) Bureau of Federal Credit Unions
A counteroffer is effective when it is ________.
A) dispatched by the offeree
B) dispatched by the offeror
C) received by the offeree
D) received by the offeror
Which of the following is a similarity between inside directors and outside directors of
a corporation?
A) Both are required to be residents of the state of incorporation of the corporation.
B) Both are officers of the corporation.
C) Both are a part of the board of the corporation.
D) Both are non-executive members who are not officers of the corporation.
The loss or destruction of the subject matter of the agency will result in the termination
of an agency by ________.
A) operation of law
B) an act of the parties
C) unusual change in circumstances
D) impossibility of performance
Which of the following classifications of contacts is based on performance?
A) informal contracts
B) unilateral contracts
C) voidable contracts
D) executory contracts
Who among the following are exempt from child labor restrictions in the United States?
A) children who work as newspaper deliverers
B) children who work at restaurants or fast-food stalls
C) children employed in the performing arts
D) children employed in gasoline stations
A ________ is defined as the passing of title of goods from a seller to a buyer for a
price.
A) lease
B) sale
C) loan
D) gift
Which of the following statements is characteristic of the Sarbanes-Oxley Act?
A) The clients of a public accounting firm may appoint an employee of the accounting
firm as its chief accounting officer six months after the audit.
B) A person who receives compensation for any duties from a public corporation cannot
be appointed as a member of its audit committee.
C) It assigns an audit partner for each audit by a certified public accounting firm.
D) It subjects all public accounting firms to annual review and inspection by the
PCAOB.
According to the ________ doctrine, a participant in a covered activity will be held
liable for any injuries caused by the activity, even if he or she was not negligent.
A) strict liability
B) transferred intent
C) professional malpractice
D) attractive nuisance
The plaintiff in a product liability lawsuit has suffered $100 worth of damages from an
automobile accident. A defect in manufacture of the plaintiff’s vehicle is found to be 20
percent responsible for the accident, while the plaintiff’s own negligence is 80 percent
responsible. Under the doctrine of contributory negligence, how much can the plaintiff
expect to receive in damages from the defendant?
A) $20
B) $60
C) $100
D) The defendant would not have to pay any amount in damages to the plaintiff.
Which of the following is a similarity between the duty of loyalty and the duty of care?
A) Both entail directors and officers fulfilling their fiduciary duties.
B) Both encourage directors and officers to make secret profits.
C) Both require directors and officers to pursue healthy self-dealing practices.
D) Both need directors and officers to usurp corporate opportunity where available.
In an appellate court, after a decision is rendered by the judges’ panel, a petitioner can
request a(n) ________ review by the full appeals court.
A) en banc
B) in rem
C) in personam
D) quasi in rem
Which of the following types of speech is not protected by the U.S. Constitution?
A) political speech
B) commercial speech
C) obscene speech
D) offensive speech
Which of the following is implied when a bank certifies a check?
A) The bank agrees to accept the check when it is presented for payment.
B) The bank cashes the check only if the holder himself presents it for payment.
C) The bank withholds payment on the check until the drawer authorizes payment.
D) The bank holds the check as guarantee for repayment of a loan taken by a customer.
The ________ states that an executory contract which cannot be performed by its own
terms within one year of its formation must be in writing.
A) parol evidence rule
B) common law of contracts
C) merger clause
D) one-year rule
Any interception of data during transmission is not subject to the regulation of the
ECPA.
What is the key difference between an agreement and a contract?
A) A contract is always enforceable in the court of law, while an acceptance may or
may not be.
B) A contract can only be between two individuals, while an acceptance can have two
or more people involved.
C) A contract requires mutual assent from all parties, while an acceptance only requires
a majority approval.
D) A contract need not be legally binding, while an agreement must be legally binding.
Which of the following is a difference between a sale or return contract and a sale on
approval contract?
A) For sale or return, the risk of loss is borne by the buyer; while in a sale on approval,
it is borne by the seller.
B) For sale or return, the goods are sold to the buyer; while in a sale on approval, the
buyer is allowed a time period to test the goods.
C) For sale or return, failure to notify rejection is not acceptance; while in a sale on
approval, failure to notify rejection is acceptance.
D) For sale or return, goods sold can be returned; while in a sale on approval, goods
sold can never be returned.
Steve Templeton, the CEO of Rolland Motor Company, is contemplating the shutdown
of a plant in Kantron. The plant has been unprofitable for some time now, and there is
increasing pressure from shareholders to shut it down so as narrow the loss being
incurred by the shareholders. But closing the plant would be a blow to the employees as
they will lose their jobs, and the local suppliers will lose a major buyer. There is also
fear that the sudden closing of the plant will have an adverse effect on the community
of Kantron, as the plant is one of the main sources of employment for the locals. Steve
Templeton considered all these factors before making a decision on the fate of the plant.
If Steve Templeton, after wagering all the factors, finds that the loss to the employees
and the community is far greater than the one incurred by the shareholders, and decides
to keep the plant open in Kantron, which of the following moral theory matches Steve
Templeton’s approach in keeping the plant open?
A) Kantian ethics
B) Rawls’s social justice theory
C) ethical fundamentalism
D) utilitarianism
________ is a situation in which a creditor agrees to extend credit only if the purchaser
pledges some personal property as collateral for the loan.
A) Floating lien
B) Attachment
C) Lien release
D) Secured credit
After the death of Horace, the other two joint tenants of the luxury dining restaurant
“Rendezvous” became the owners of Horace’s interest in the property automatically.
This feature of their concurrent ownership is called ________.
A) quiet title action
B) adverse possession
C) nonconforming use
D) right of survivorship
Which of the following refers to an agreement that substitutes a new party for one of
the original contracting parties and relieves the existing party of liability on the
contract?
A) a novation
B) a substituted contract
C) a mutual rescission
D) an accord
The ________ protects the decisions of a board of directors that acts on an informed
basis, in good faith, and in the honest belief that the action taken was in the best
interests of the corporation and its shareholders.
A) Williams Act
B) antifraud provision of the SEC
C) pro rata rule
D) business judgment rule
Which of the following elect members of the board of directors for a corporation?
A) the CEO
B) corporate officers
C) shareholders
D) employees
Which of the following is true about a plurality decision of the Supreme Court?
A) It settles the case but does not set the precedent for later cases.
B) It affirms the decision of the lower court.
C) It settles the case and sets the precedent for later cases.
D) It causes the case to be reviewed again at a later date.
While signing a contract, one of the parties misinterpreted a legal clause. Neither of the
parties was a legal professional. In this scenario, the party that misrepresented the law
________.
A) is actionable for fraud
B) may rescind the contract
C) is not actionable for fraud
D) can void the contract
An actor signs a contract with a movie studio where she agrees to star in a comedy.
Which of the following is true of assignment of such a contract?
A) The movie studio can assign the contract to another movie studio.
B) The movie studio is at liberty to include the actor in a different movie.
C) If the actor is injured, she can assign the contract to another popular actor.
D) Both the actor and the studio can agree that their contract can be assigned.
A(n) ________ is a document filed with the secretary of state that gives constructive
notice that a member has withdrawn from an LLC.
A) statement of purpose
B) statement of disassociation
C) article of amendment
D) article of termination
Contrast registered and unregistered marks and evaluate the advantages of the former
over the latter.
Nina has her missing teeth replaced with dentures in a local hospital. Cooper Dental
Materials Inc. supplies dentures to the hospital with a two-year warranty on the
dentures. The dentures cost Nina 10 percent of the total costs she incurred in the
hospital services. A few months later, Nina’s dentures get worn out. Is there a
transaction of goods in this sale? Can Nina sue the hospital for a breach of the implied
warranty?
Differentiate tangible and intangible property with an example.
Is an oral modification to a contract enforceable? Explain with an example.
Explain the circumstances that make a franchisor liable for the negligence of a
franchisee.
What is distributional interest? A member of an LLC transfers his distributional interest
to his brother. Will his brother be considered a member of the LLC? Give arguments in
support of your answer.
Compare and contrast circumstances under which employers can or cannot raise a
defense against the imposition of a liability for the harassment of an employee.
Peter, a resident of the state of Carterbridge, is driving his automobile in his home state
when he negligently hits an automobile driven by Keith, a resident of the state of
Emmaland. Keith is injured in the accident. Can Keith file a lawsuit against Peter in the
federal court of Carterbridge on the basis of the diversity of citizenship?
How is an accountant’s liability to a client determined in a negligence suit?
Why does a class action occur? How does one maintain a class action lawsuit?
Analyze Command School of jurisprudence with an example.
Explain why few philosophers advocate ethical relativism as an acceptable moral
theory.
How does the Securities Act of 1933 regulate the initial public offerings of companies
going public?
A manufacturer of cosmetic products advertises its new face cream with the promise
that it “makes wrinkles disappear within days.” This claim is unsubstantiated and has no
scientific basis. How are such claims and advertisements regulated?
Stan is an independent public accountant. He is hired by Raustus, Inc. to prepare
financial statements for the company. Raustus uses these statements to obtain investors
for the company. It provides copies of the financial statements to potential investors.
While preparing the financial statements, Stan commits some errors, which misstate the
true financial position of Raustus. One of the investors discovers this and files a
lawsuit. What are the factors that determine Stan’s liability?
The city of Colrida is considered to be the automobile capital of the world. The state it
is part of passed a statute that required employers to hire local residents in preference to
non-residents. Discuss the implications of enforcing such a statute.
How does a bailment solely benefit the bailee?
Discuss with examples the difference between mutual mistake of a material fact and
mutual mistake of value.
How do courts determine the line of commerce that will be affected by a merger?