After Edie solicits clients to invest in a nonexistent business, she is charged with “mail
fraud. This requires, among other things,
a. claiming that an item is “in the mail when it is not.
b. deceiving postal authorities as to the content of an item of mail.
c. depositing items in the postal system without proper postage.
d. mailing or causing someone else to mail a writing.
If a principal does not ratify an authorized contract, the prin-cipal is not bound.
a. True
b. False
Shareholders meetings must occur at least annually.
a. True
b. False
When a conflict arises among the documents that involve Express Flights Corporation,
the first priority for resolving the conflict is given to
a. resolutions of the board of directors.
b. Express Flightss bylaws.
c. state statues.
d. the U.S. Constitution.
Under federal law, an e-signature is enforceable only if the contracting parties have
agreed to use e-signatures.
a. True
b. False
Jody owns KuppaJava Kiosks, a sole proprietorship. Jodys liability is
a. limited by state statute and varies from state to state.
b. limited to the extent of capital expenditures.
c. limited to the extent of her original investment.
d. unlimited.
A default judgment is a judgment entered against the party who brought the claim
before the court.
a. True
b. False
Securities of nonprofit, educational, and charitable organizations are not exempt from
the registration requirement of the 1933 Securities Act.
a. True
b. False
Once the time for performance under the contract has expired, the seller or lessor can
never exercise the right to cure.
a. True
b. False
Jim tells Dana that he will take her out to lunch on Thursday. Jim has made Dana a
a. prediction.
b. promise.
c. bilateral contract.
d. void contract.
Vinnie, the owner of Café Rico, knows about, but does not take any action to prevent,
the sexual harassment of employees. Vinnie and the café may be liable for such
harassment by
a. an employees previous employer.
b. a customer or a co-worker.
c. an employees spouse or other close relative.
d. none of the choices.
Chelsea is a state court judge. Like judges in most state courts, in a particular case, she
may grant a remedy
a. at law only.
b. in equity or at law, but not both.
c. in equity and at law.
d. in equity only.
Fresh Seasonal Fruit Company has assets of less than $10 million and fewer than fifty
shareholders. Gourmand Pastries, Inc., has assets of more than $50 mil-lion and more
than five hundred shareholders. The Securities Exchange Act of 1934 applies to
a. Fresh Seasonal Fruit and Gourmand Pastries.
b. Fresh Seasonal Fruit only.
c. Gourmand Pastries only.
d. neither Fresh Seasonal Fruit nor Gourmand Pastries.
The first bank to receive a check for payment is the depositary bank.
a. True
b. False
Eli owes Martin $10,000. Martin assigns the claim to Jack. Jack does not notify Eli of
the assignment. A week later, Martin assigns the same claim to Allen. Allen
immediately notifies Eli of the assignment. Jack
a. has priority to payment in all states.
b. has priority to payment in states that follow the English rule.
c. does not have priority to payment in any state.
d. has priorty to payment in most states.
Angie borrows $20,000 from First Line Credit using a field of timber trees as collateral.
To perfect its security interest, First Line Credit must file its financing statement with
a. the county clerk.
b. the mayor.
c. the city counsel.
d. the secretary of state.
Edna and Flavia buy a boat that they dock in a marina near Gulfport, Mississippi. On
the death of either owner, that owners interest in the boat passes to her heirs. This is
a. ajoint tenancy.
b. community property.
c. a tenancy in common.
d. ownership in fee simple.
The United States and other members of a certain organization agree to grant normal
trade relations status to each other with regard to im-ports and exports. This
organi-zation is
a. the Convention on Contracts for the International Sale of Goods.
b. the International Export-Import Bank.
c. the United Nations.
d. the World Trade Organization.
Lovey is a shareholder of Matchless Corporation with preemptive rights. With these
rights, Lovey can
a. buy a prorated share of a new issue of stock before other buyers
b. choose to have Matchless act exclusively in a certain area.
c. choose to have Matchless act exclusively in a certain area.
d. sell a prorated share of a new issue of stock before other sellers.
Elegant Carpets, Inc., and Fantastic Floors Stores enter into a contract for a sale of
carpeting. Under a shipment contract, the seller must
a. allow the buyer to reject the goods for any reason.
b. deliver the goods to a particular destination.
c. inspect the goods before shipping them.
d. place the goods into the hands of a carrier.
A sale of all of a corporations assets requires the approval of its shareholders.
a. True
b. False
In Kettle Cafes suit against Food Services, Inc., the court issues a judgment in Kettles
favor. The judgment can be appealed to an appropriate court of appeals by
a. either party.
b. Kettle only.
c. Food Service only.
d. neither party.
Under the doctrine of strict liability, people are liable for the results of their acts only if
their intentions are malicious.
a. True
b. False
Suisse Internationale, a Swiss maker of athletic equipment, enters into a price fixing
agreement with Total World Sports, a U.S. wholesaler of Suisses products. U.S. courts
will apply U.S. antitrust laws if
a. the agreement was made in Switzerland.
b. the agreement was made in the United States.
c. the price fixing has a substantial effect on U.S. commerce.
d. the Swiss government agrees to be sued in the United States.
A shipment contract requires that the seller deliver the goods to a particular location.
a. True
b. False
A warranty deed provides the most protection against defects of title.
a. True
b. False
The Foreign Sovereign Immunities Act spells out what a “foreign state includes.
a. True
b. False
Four-Square Construction Company enters into a contract with Ben to remodel Carols
Home Store, using products from Delta Building Supplies. Eatery Café is next to Carols
Home Store. The remodeling is a gift from Ben to Carol.
Refer to Fact Pattern 12-1. The value of Eaterys property will increase after Carols store
is remodeled. Eatery is
a. a delegatee.
b. an assignee.
c. an incidental beneficiary.
d. an intended beneficiary.
Byron agrees to sell to Charity, for $1,500, a remote parcel of land. They be-lieve the
land to be worthless, but beneath it is a gold mine. A court would
a. cancel the contract due to Byrons failure to know the lands value.
b. cancel the contract due to Charitys failure to know the lands price.
c. cancel the contract due to the difference between the contract price and the market
price.
d. enforce the contract.
Bankruptcy law is state law.
a. True
b. False