By law, bystanders are always required to help others in peril.
a. True
b. False
In 1992, the SEC issued new rules establishing an integrated registration and reporting
system for small business issuers.
a. True
b. False
Which of the following is untrue about a corporation’s ratification of an act of an
officer?
a. It applies to an authorized act of an officer.
b. It relates back to the original transaction.
c. It may be either express or implied from the corporation’s acceptance of the contract’s
benefits.
d. The corporation must have full knowledge of the facts in order to ratify the act.
Which one of the following is NOT one of the torts included within invasion of
privacy?
a. Nuisance.
b. Intrusion.
c. Appropriation.
d. False light.
A basic tenet of the law, which is expressly stated in the Code, is that a purchaser of
goods obtains such title as his transferor had or had power to transfer.
a. True
b. False
Tom’s dog has bitten three mail carriers, but Tom can’t bear to chain him up. When the
dog bites the newsboy, Tom will be strictly liable.
a. True
b. False
The U.S. Supreme Court can invalidate a law if it conflicts with the U.S. Constitution.
a. True
b. False
Businesses which wish to safeguard their technology while doing business in the
international sector would not want to consider the use of wholly owned subsidiaries.
a. True
b. False
The term mens rea refers to the mental intent element of a crime.
a. True
b. False
Which of the following has been held to destroy the negotiability of an instrument and
to render its transfer a contractual assignment?
a. “I wish you would pay.”
b. “Pay to the order of John Jones.”
c. “Pay bearer.”
d. None of these.
Alice and Brad enter into a partnership, which becomes insolvent, as does Brad. Alice is
fully liable for the debts of the partnership.
a. True
b. False
The CISG governs only the formation of the contract of sales and the rights and
obligations of the seller and buyer. It does not cover the validity of the contract or any
of its provisions.
a. True
b. False
Which of the following is not a breach of an agent’s duty of obedience?
a. Entering into an unauthorized contract for which his or her principal is then liable.
b. Committing a tort for which the principal is now liable.
c. Improperly delegating her authority.
d. Not following a principal’s instruction to misrepresent the quality of a competitor’s
goods to a potential customer.
Nick rents to Lorna an apartment beginning September 1. Nick has the obligation:
a. to prevent other tenants from being so noisy that they interfere with Lornas use and
enjoyment of the apartment.
b. under the common law, to repair Lornas apartment as needed.
c. under the majority rule, to give Lorna the right to possession on September
d. under the majority rule, to give Lorna actual possession on September 1.
What sort of liability does an accountant have under the Securities Exchange Act of
1934?
a. Civil liability where there is scienter.
b. Criminal liability where there is a willful violation.
c. Both of these are correct.
d. Neither of these is correct.
The Revised Act authorizes the articles of incorporation to include a provision
eliminating or limiting, with certain exceptions, the liability of a director to the
corporation or its shareholders for any action he takes, or fails to take, as director. These
limitations or exceptions, for which liability would not be affected, include:
a. the amount of any financial benefit the director receives to which he is not entitled,
such as a bribe, kickback, or profits from a usurped corporate opportunity.
b. an intentional infliction of harm on the corporation or the shareholders.
c. liability under Section 8.33 for unlawful distributions.
d. an intentional violation of the criminal law.
e. All of these are correct.
A limited liability company is a relatively new form of unincorporated business
association that blends the advantages of both general and limited partnerships, because
all its members may have limited liability and all may participate in management and
control without loss of limited liability.
a. True
b. False
After dissolution, the corporation must cease carrying on its business except as is
necessary to wind up.
a. True
b. False
The Supreme Court has held that the plaintiff will have shown a prima facie case of
discrimination if:
a. she is within a protected class.
b. she was qualified for and applied for an open position and was denied the job.
c. after rejecting the complainant, the employer continued to try to fill the position from
applicants with the complainants qualifications.
d. A combination of all of these.
If Clark buys a tomato plant, he owns the tomatoes produced by the plant based on
“confusion.”
a. True
b. False
An accountant’s legal responsibility under state law may be based on:
a. contract law.
b. tort law.
c. criminal law.
d. All of these.
Acts constituting duress are necessarily crimes or torts in themselves.
a. True
b. False
A change in contract law between the nineteenth and twentieth centuries was:
a. a relaxation of requirements of contract formation.
b. an increase in technical requirements for contract formation.
c. a movement toward enforcement of promises only if there was strict compliance with
basic contract requirements.
d. increasing difficulty for parties to get out of a contract.
In a contract where the buyer is to pick up the goods at the seller’s place of business and
the seller is a merchant, the risk of loss passes to the buyer when the goods are tendered
to the buyer.
a. True
b. False
Under the Second Restatement, a licensee for purposes of tort law is a person invited
upon land as a member of the public or for a business purpose.
a. True
b. False
Carl threw a bomb into the office of his insurance agent, intending to kill the agent
because the company had disallowed his claim. The agent wasn’t in the building, but the
bomb seriously injured his secretary, who was working in the office.
a. Carl cannot be liable to the secretary for any torts because he did not intend to hurt
her.
b. If Carl knew the secretary was in the office, even if he didnt intend to injure her, his
intent to harm the agent is transferred to the secretary who can sue Carl for her injuries
with an intentional tort cause of action.
c. Carl has committed a crime, but he is not liable for any torts.
d. Carl has committed the tort of intrusion.
At the marriage of her daughter, Lorna is given papers to sign, which the catering
company says are the invoices for the food, service, and decorations. Underneath the
invoices are a carbon and a contract of sale for a portion of the failing catering business.
Lorna signs the papers; her signature is transferred to the sales contract. This is a void
contract because it was entered by fraud in the execution.
a. True
b. False
Trade secret law protects a trade secret for renewable 20-year terms.
a. True
b. False
Speedy Stop sells necessities to neighborhood shoppers until 1 a.m. every day.
Dairyland delivered its order of milk products as usual around 6 a.m. while Mary, the
shopkeeper, was busy with the early coffee and donut crowd. The Dairyland driver left
12 crates in the refrigerator compartment and went on to the rest of his route. At 7:30
a.m., Mary started to shelve the milk products and discovered that all 12 crates
contained buttermilk rather than the usual mix of containers of whole milk, 2%, skim
milk, and cream she had ordered. What is her obligation with regard to the goods?
Appraisal rights:
a. belong to dissenting shareholders.
b. can be exercised by a target company any time before acquisition.
c. allow a target company to get a fair valuation of their assets before sale.
d. always give all shareholders the fair market value of their shares.
How are ALJs selected?
a. They are appointed by the president and then confirmed by Congress.
b. They are elected by Congress.
c. They are appointed by the president without confirmation by Congress.
d. They are appointed by the agency through a professional merit selection system.
An association of banks and other payors whose members settle accounts with each
other on a daily basis is a:
a. payor banking group.
b. clearinghouse.
c. provisional reserve.
d. None of these.
If you lose your wallet along with your ATM card, your liability is
a. unlimited unless you notify the bank within 30 days.
b. limited to $200 if you notify the bank within two days.
c. limited to $50 if you notify the bank within two days.
d. limited to $500 if you notify the bank within 60 days.
Don has an employment contract with Dunkirk Ice Cream. He sells ice cream and
novelty ice cream products. He has nine children and doesn’t make enough money, so
he decides to see if another dairy will hire him, too. “After all,” he reasons, “most stores
carry four or five different brands.” His employment contract prohibits him from
competing. If Don sells for another dairy in addition to Dunkirk, will he be in trouble
under his contract?
a. No, it is unenforceable as against public policy.
b. Yes, it is likely to be enforceable during employment.
c. No, the prohibition against competing is enforceable only after he quits Dunkirk.
d. A court would have to rule on the enforceability of the covenant not to compete since
courts are reluctant to enforce such covenants during a period of employment.