If Kathy indorses a check “without recourse”:
a. Kathy is not contractually liable if the check is not paid.
b. negotiability is destroyed.
c. the check cannot be transferred.
d. Kathy cannot transfer good title to the check.
If no definite time for delivery is fixed by the terms of the contract, delivery:
a. will not take place.
b. must begin within 10 days of the contract.
c. must be immediate.
d. and acceptance must happen within a reasonable amount of time.
A distinguishing characteristic of a business trust is that:
a. the trust estate is devoted to the conduct of a business.
b. each beneficiary must have the consent of all the other beneficiaries in order to sell or
transfer his interest in the trust.
c. the trustees and beneficiaries share the functions of management and control.
d. All of the above.
Which of the following is prohibited under federal labor laws?
a. Union shops
b. Open shops
c. Yellow dog contracts
d. Collective bargaining contracts
If Barker Co. buys 51% of the shares of Carter Co.:
a. Carter Co.’s board would have to approve the sale.
b. Barker Co.’s board would have to approve the sale.
c. Both boards would have to approve the sale.
d. Both sets of shareholders would have to approve the sale.
Arnold wrote a defamatory letter regarding Bill which he did not show to anyone, but
which he posted on a bulletin board in the laundromat. Arnold has committed:
a. the tort of slander.
b. the tort of libel.
c. neither libel nor slander, because there has been no publication of the letter.
d. the tort of public disclosure of private facts.
An agent acts for a(n) ____ principal when she appears to be acting on her own behalf
and the third person with whom she is dealing has no knowledge that she is an agent.
a. unidentified
b. undisclosed
c. unauthorized
d. disclosed
Under the FCCPA, the liability of a credit card holder for another’s unauthorized use of
the card is limited to:
a. $500.
b. $100.
c. $50.
d. None of the above; liability is unlimited.
If the issued and outstanding shares are broken up into a greater number of shares, each
representing a proportionately smaller interest in the corporation, this is known as a:
a. property dividend.
b. stock split.
c. stock dividend.
d. liquidating dividend.
Steven is a manufacturer’s representative for Sellmed Corporation. One day he receives
a big-screen television as a gift from one of the clients he contacts on behalf of Sellmed.
In this case:
a. Steven must account to Sellmed for the gift he has received.
b. the big-screen television belongs to Sellmed rather than to Steven.
c. if Steven keeps the TV without telling Sellmed, he will have breached his fiduciary
duty to Sellmed.
d. All of the above are correct.
Master Ink owns all the stock of Prime Pen Co. A Prime Pen employee commits a tort
for which the employer is liable. The suit results in a judgment for $1 million against
Prime Pen. Prime Pen assets total $650,000, but Master Ink’s assets are in the millions.
In which of the following situations would the judgment have to be paid by Master Ink?
a. The Master Ink board of directors is exactly the same as Prime Pen’s.
b. The president of Master Ink is also the vice president of Prime Pen.
c. Prime Pen’s income and Master Ink’s income is held in one account.
d. None of the above.
Jack moved from New Hampshire to Florida and decided to have an air conditioner
installed in his car. After it was installed, Jack received a bill for $1,200. Jack called the
dealer and told him he’d never heard of this service costing more than $500. They
argued, but the dealer finally agreed to take $900. Is the agreement enforceable?
a. Yes, there is no way for the dealer to get the extra money anyway.
b. Yes, there is consideration for the modified amount.
c. No, there is no consideration and the dealer can sue for the extra $300.
d. No, there is an implied contract to pay the dealer whatever he billed Jack.
Ari makes a written offer to Linville, who replies with a conditional acceptance. Ari
ships the goods, which Linville accepts. A contract:
a. was formed when Linville conditionally accepted.
b. consists of the written terms to which Ari and Linville agreed, along with
supplementary provisions of the UCC.
c. consists only of the written terms to which Ari and Linville agreed.
d. was never formed.
A sale exists when the buyer takes:
a. title to the goods.
b. the risk of loss on the goods.
c. an insurable interest in the goods.
d. a special property interest in the goods.
An offer under Article 2 of the UCC that is irrevocable even though no consideration is
given to keep it open is known as a(n):
a. option.
b. firm offer.
c. requirements contract.
d. output contract.
Tort law:
a. is primarily federal statutory law.
b. is primarily state statutory law.
c. is primarily common law.
d. has as a primary objective the punishment of offenders.
Identify the constitutional protections given to a criminal defendant by each of the
following Amendments to the U.S. Constitution. How does each apply to the procedure
involved in arresting and trying a criminal defendant?
a. Fourth Amendment
b. Fifth Amendment
c. Sixth Amendment
What is “dumping”?
a. The disparaging of the products of a competitor in international trade.
b. A company’s selling of its product cheaper in its home market than in its export
market.
c. A company’s engaging in overproduction in order to flood a market so as to drive
down prices.
d. A company’s selling of its product for less than normal value in a foreign market.
A postincorporation subscription is:
a. like a preincorporation subscription in that the subscriber may withdraw the offer to
enter into the subscription any time before the corporation accepts it.
b. treated as a contract between the subscriber and the corporation.
c. not recognized under the RMBCA.
d. defined under the RMBCA as a contract between all subscribers.
Answer the following:
The harshness of the contributory negligence doctrine has been mitigated by:
a. the last clear chance rule.
b. substitution of the doctrine of comparative negligence.
c. strict liability.
d. Both (a) and (b), but not (c).
Zeron Corporation is incorporated in the State of West Virginia. It now wants to open a
retail outlet in Kentucky. Zeron must obtain a certificate of authority allowing it to do
business in the Commonwealth of Kentucky.
Jeanna forges Brenda’s indorsement on a promissory note and negotiates it to Vincent.
Brenda subsequently ratifies Jeanna’s act. As a result:
a. Jeanna is no longer liable to Vincent on the note, although Brenda is.
b. both Jeanna and Brenda are now liable on the note.
c. Jeanna is relieved from civil liability to Brenda.
d. Both (a) and (c).
The expectation interest is protected by the contract remedy of:
a. restitution.
b. compensatory damages.
c. reliance damages.
d. All of the above.
A(n) ____ contract is one in which the parties have manifested their agreement by oral
or written language, or both.
a. express
b. implied
c. executory
d. formal
Which of the following is NOT a basis for involuntary dissolution?
a. By the Secretary of State, if it is established that the corporation failed to pay its
franchise tax
b. By a shareholder, if the directors are deadlocked and the shareholders cannot break
the deadlock
c. By the shareholders, if they dissent to a merger and are asserting their appraisal rights
d. None of the above
Tom breached a contract he had with Jim. In addition to other remedies available, Jim
may be able to recover commercially reasonable expenses incurred as a result of the
breach. These expenses are:
a. incidental damages.
b. punitive damages.
c. liquidated damages.
d. extraordinary damages.
Seth grants express authority to Reba to enter contracts on his behalf. If Reba discloses
to third parties that she is an agent for Seth, she has liability on a contract in all but
which of the following situations?
a. Reba makes a contract in her own name.
b. Reba makes a contract within the scope of her authority and discloses that she is
acting for Seth.
c. Reba co-makes a contract with Seth.
d. Reba guarantees that Seth will perform the contract.
e. Reba cannot be held liable on a contract when she discloses she is Seth’s agent as
long as the contract is within her scope of authority.
Which of the following is correct regarding the fiduciary duties in a limited
partnership?
a. The general partner has a fiduciary duty to the limited partners.
b. Judicial authority seems to suggest that the limited partner has no fiduciary duty to
the partnership.
c. The fiduciary duty of the general partner is extremely important to the interests of the
limited partners, because they have no ability to manage or control the partnership
business.
d. All of the above are correct.
A landlord breaches the covenant of quiet enjoyment if:
a. the landlord wrongfully evicts the tenant.
b. neighbors throw loud parties that disturb the tenant.
c. Both of the above.
d. None of the above.
Brian makes a material misrepresentation of fact regarding his horse to Rosalind while
out riding one day. Later that day, Rosalind makes an offer to buy the horse. Brain
accepts without correcting his earlier misrepresentation of fact. In this case:
a. Brian may avoid the contract.
b. Rosalind may avoid the contract.
c. either or both Brian or Rosalind may avoid the contract.
d. neither Brian nor Rosalind may avoid the contract.
Under the Americans with Disabilities Act,
a. only governmental employees are protected.
b. punitive and compensatory damages are not recoverable.
c. employers with fewer than 15 employees did not have to comply until mid-1994.
d. punitive damages for intentional discrimination are subject to a ceiling depending on
company size.
The Lanham Act prohibits “palming off” but not “reverse palming off.”
Under the Restatement, the publicity required for the tort of public disclosure of private
facts is the same as “publication” under the law of defamation.
Negotiability invests commercial paper with a high degree of marketability and
commercial utility by allowing it to be freely transferable and enforceable by a holder
in due course.
The best and most reliable tool for preserving a partnership business after dissolution is
through a continuation agreement.
The Clayton Act deals with interlocking directorates.
To obtain relief for negligent or innocent misrepresentation, all the remaining elements
of fraud must be present and the misrepresentation must be material.
The parol evidence rule does not prevent the use of evidence that a party would like to
use to establish the defense of fraud, duress, or undue influence.
Statutes of repose were enacted to give consumers more rights against large
manufacturers.
Discuss the concept of “partnership property.” What is the controlling factor in whether
property belongs to the partnership or to one or more of the partners individually?
An environmental impact statement is required by NEPA if federal legislation or action
will have a significant environmental effect.
In recent years, the courts have unanimously reinforced the common law doctrine of
employment at will.
First Bank pays a forged check on Donald’s account. Donald finds it when, the day he
receives it, he is examining his bank statement for the month. He brings it to the bank
the next day to call it to their attention, but they refuse to credit his account. The bank
has an obligation to recredit Donald’s account.
Courts will usually uphold a liquidated damage clause that represents a reasonable
approximation of the damages where the actual amount would be very difficult to
determine.
George offered to paint Catherine’s barn for $4,000. Catherine said she would accept
the offer if George would paint the woodshed, too. At this point, they have made a valid
and enforceable contract.
Distinguish between a rejection of an offer and a revocation of an offer.
Most states have adopted the theory that a mortgage is a lien on real property for the
payment of a debt.
Insiders would violate the short-swing profits rule (Rule 16b) of the 1934 Act by buying
stock on January 1 and selling on May 1.
In the majority of states, in a case of negligenceper se the plaintiff would only have to
prove violation of a statute in order to show negligent conduct.