Veritas, Inc. is planning its annual shareholder meeting on June 15. The company
a. need not send notices of the meeting to shareholders since it is the regularly
scheduled, annual meeting, which Veritas always holds on the third Thursday of June.
b. must send notices to everyone who owns stock as of January 1.
c. must send notices to everyone who owns stock on the “record date, which can be no
more than 70 days before the meeting.
d. is not required to have an annual shareholders meeting if the company is listed only
on the NYSE.
In order to satisfy the statute of frauds, a writing must
a. be a formal written document drafted by an attorney.
b. be signed by the defendant and contain the name of each party, the subject matter of
the agreement, and the essential terms and promises.
c. be notarized.
d. All of the above.
The International Court of Justice (ICJ) has not been an important force in resolving
international business disputes. In fact, in its seven-decade history, the ICJ has heard
fewer than 200 cases. Which of the following statements regarding the ICJ is NOT true?
a. Only states can be a party to litigation before the ICJ.
b. The ICJ only has jurisdiction over states that have agreed to be bound by its
decisions.
c. The ICJ has no enforcement power.
d. The U.S. has agreed to abide by ICJ jurisdiction in all cases.
Per se violations are subject to both civil and criminal penalties.
a. True
b. False
Corporations have perpetual existence.
a. True
b. False
Which rule states that if someone issues an instrument to a person who does not exist,
then any indorsement in thename of the payee is valid as long as the person who pays
the instrument doesnot know of the fraud?
a. The Imposter Rule
b. The Indorsement Rule
c. The Conversion Rule
d. The Fictitious Payee Rule
A rock group assigns its payment under a performance contract to the Costume Shop, a
business that has supplied the group with outrageous stage outfits, and to which the
group owes a great sum of money. Under this arrangement the rock group is the
a. assignor.
b. assignee.
c. delegator.
d. delegatee.
The distinction between a condition precedent and a condition subsequent
a. is important because it determines whether the burden of proof is beyond a
reasonable doubt or preponderance of the evidence.
b. seldom arises in insurance cases.
c. determines who has the burden of proof.
d. is important because it determines whether the condition must be express or whether
it can be implied.
What type of contract is a possible remedy for an injured plaintiff in a case with no
valid contract, when the plaintiff can show benefit to the defendant, reasonable
expectation of payment, and unjust enrichment?
a. an express contract
b. an implied contract
c. a quasi-contract
d. a unilateral contract
Intellectual property is
a. protected in the same way as land.
b. exclusive.
c. expensive to produce but cheap to reproduce and transmit.
d. expensive to produce, copy, and transmit.
When Dudley files his Chapter 7 petition, he lists the following debts:
a. $25,000 in back child support and alimony.
b. $15,000 for liabilities incurred after drinking and driving.
c. $10,000 for past-due student loans.
d. $5,000 for past-due rent to his landlord.
e. $550 for a past-due phone bill.
How will each of these debts be treated by the bankruptcy court.
When a person indorses a check, the indorser assumes contractual liability based on the
indorsement. This liability expires unless presentment is made
a. within 3 days of indorsement.
b. within 7 days of indorsement.
c. within 30 days of indorsement.
d. within a reasonable time after the indorsement.
The directors of MegaCorp learn that an outsider is planning on buying enough voting
stock to get herself elected to the board of directors. MegaCorp, which has cumulative
voting, quickly puts together a vote of shareholders to eliminate the company’s
cumulative voting procedure. The shareholders vote to do away with cumulative voting.
The outsider, Dawn, who wanted to get herself elected to MegaCorp’s board, claims that
the company has committed an illegal act. Is she right?
a. Yes. The United States Supreme Court has ruled that a publicly held corporation that
purposefully sets about to eliminate cumulative voting to prevent a person from getting
herself elected to the board has acted illegally.
b. Yes, but only if the company is incorporated in a state that has adopted the Model
Act.
c. No, provided the company did not change its cumulative voting provision solely for
the purpose of preventing a particular person from taking advantage of that right.
d. No. Under the Model Act, regardless of MegaCorp’s motives, it had the right to act as
it did.
In reaching their verdicts, appellate courts conduct trials and rehear all evidence.
a. True
b. False
In 1969, the federal government estimated that consumer products caused 30,000
deaths, 110,000 disabling injuries and 20 million trips to the doctor. The product
category causing the majority of harm was
a. automobiles.
b. children’s toys.
c. power tools.
d. food products.
Generally, neither a “time is of the essence” clause nor a “force majeure” clause will be
recognized by the courts because these types of clauses are seen as a violation of public
policy.
a. True
b. False
Which of the following is an example of incidental damages you might be awarded if
you are wrongfully terminated from your job?
a. The costs of psychological counseling.
b. The costs of mailing resumes to prospective employers.
c. The costs of a new wardrobe for future interviews.
d. The costs of cosmetic surgery.
Wholesome Bread, Inc. advertised that its honey wheat bread had 25% fewer calories
than a competing brand, Valley Grains. In fact, Wholesome’s bread had the same
amount of calories as Valley Grains’ bread. Wholesome Bread’s conduct
a. does not violate the Lanham Act because of the First Amendment freedom of speech.
b. does not violate the Lanham Act because Wholesome did not act with actual malice.
c. does not violate the Lanham Act because comparative ads are exempt from the law.
d. violates the Lanham Act.
Negotiable instruments are normally issued to fulfill a contract.
a. True
b. False
Ikerd was entering the United States from a trip abroad when the Customs Service
confiscated some goods she had purchased and brought back with her. The
determination of whether the government is attempting to take property and what type
of hearing the Customs Service must offer Ikerd is an analysis of
a. substantive due process.
b. procedural due process.
c. the Takings Clause.
d. eminent domain.
Courts are sympathetic to managers acting in the best interests of the corporation, even
when the acts are illegal.
a. True
b. False
Which of the following forms of organization is a compromise between starting one’s
own business as an entrepreneur and working for someone else as an employee?
a. Limited liability company
b. Sole proprietorship
c. Close corporation
d. Franchise
To date, the United States and China are the only two countries that adhere to the 1997
Kyoto Protocol.
a. True
b. False
Robert offers to buy a car from Jane for $400. Jane must accept this offer in order to
form an enforceable contract.
a. True
b. False
Section 5 of the FTC Act requires all websites to have a privacy policy.
a. True
b. False
Under the federal Bankruptcy Code, the exemption amount for the debtor’s personal
residence is
a. $22,975.
b. $55,200.
c. unlimited.
d. $125,000.
Tony raped Jane in the parking lot of Joe’s Brew Pub. The District Attorney’s office
prosecuted Tony on rape charges. Subsequently, Jane filed a lawsuit against Tony for
money damages. Classify each legal action.
a. The District Attorney’s case was a criminal case; Jane’s lawsuit was a civil case.
b. The District Attorney’s case was a civil case. Jane’s lawsuit was a criminal case.
c. Both cases are criminal.
d. Both cases are civil.
The Uniform Probate Code has been adopted in all states.
a. True
b. False
When you surf the Internet, tracking tools collect information about you, often without
your knowledge.
a. True
b. False
The Federal Trade Commission requires franchisors to
a. give prospective franchisees a franchise disclosure document at least 14 business
days prior to the signing of a contract or payment of any money.
b. give prospective franchisees earnings information on the company.
c. disclose any litigation the company has ever been involved in.
d. let prospective franchisees know how many franchisees have gone out of business in
the prior five years.
A party injured by fraud generally has the choice of suing for damages or rescinding the
contract.
a. True
b. False
Corporate stock can be divided into categories called ________, which can be further
divided into ________.
a. authorized shares, classes
b. classes, series
c. equity, assets
d. debentures, classes
Securities offered and sold entirely within one state by a corporation of that state are
exempt from registration.
a. True
b. False