Negotiable instruments are:
a. formal contracts.
b. informal contracts.
c. option contracts.
d. first-refusal agreements.
Which of the following statements is incorrect about fixtures?
a. Personal property may become a fixture by annexation to the realty.
b. Personal property may become a fixture by adaptation to the realty.
c. Personal property may become a fixture based on the intent of the person affixing the
personal property to the realty.
d. Personal property that is readily removable from the realty is generally a fixture.
A person who acquires a negotiable instrument with notice or knowledge that any party
might have a defense or that there is any adverse claim to the ownership of the
instrument:
a. has acted in bad faith.
b. has acted illegally.
c. cannot be a holder in due course.
d. has taken unfair advantage of the maker.
A contract provision stating that one of the parties shall not be liable for damages in
case of a breach is called a(n) __________ clause.
a. liquidated damages
b. exculpatory
c. waiver.
d. due process
Criminal laws:
a. define wrongs against society.
b. define the rights of one person against another.
c. carry damage remedies against the wronged individual.
d. all of the above.
An instrument is conditional if:
a. it contains an order for the payment of money out of a particular fund.
b. it is to be paid from the assets of an existing trust.
c. it is to be paid from the assets of an existing estate.
d. none of the above.
The Robinson-Patman Act:
a. prohibits charging different prices to different buyers when the margin costs are the
same.
b. allows sellers to offer incentives and bonuses to certain customers.
c. allows sellers to refuse to deal with anyone for any reason.
d. all of the above.
Which of the following forms of cotenancy does not have right of survivorship?
a. joint tenancy
b. tenancy by entirety
c. tenancy in common
d. community property
A copyright prevents the copying of an idea.
Equipment attached to a rented building by a tenant and used in business is:
a. called a trade fixture.
b. called a business fixture.
c. called a commercial fixture.
d. not a fixture.
Stop payment orders:
a. may be issued if a payee has failed to perform under a contract.
b. do not prevent a holder in due course from demanding payment.
c. are invalid for some forms of checks .
d. all of the above.
A corporation must have:
a. a name.
b. more than one shareholder.
c. a corporate seal.
d. all of the above.
Which of the following is a correct statement concerning the incorporation process?
a. Each application for incorporation is reviewed by the appropriate state legislature.
b. The incorporation process is essentially a matter of filing the correct papers and fees
with the designated government official.
c. Most applications for incorporation are rejected.
d. Incorporator(s) are never required to give public notice of the intent to form a
corporation.
Trademarks or service marks may be registered if they utilize terms that are:
a. suggestive of characteristics of the product or service to which they relate.
b. fanciful, arbitrary, or coined.
c. descriptive and have acquired a known secondary meaning linked to a product.
d. all of the above.
If the parties to a contract agree to undo the agreement and return any consideration
involved, the contract is discharged by:
a. mutual cancellation
b. mutual rescission.
c. novation
d. accord and satisfaction
When particular goods have been selected by either the buyer or the seller, or both, as
being the goods called for by the sales contract, the goods are said to be
a. identified.
b. actualized.
c. realized.
d. materialized.
The answer to the complaint is filed by the:
a. defendant.
b. prosecutor .
c. plaintiff.
d. judge.
U.S. courts will assume jurisdiction and apply antitrust laws to conduct business outside
the United States if the activities of the business firms outside the United States have a
direct, substantial, and foreseeable impact on U.S. commerce. This is based on what
principal?
a. the “jurisdictional rule of reason”
b. the “act”of’state doctrine
c. the “effects” doctrine
d. comity
The means by which stockholders may seek to protect themselves against corporate
actions to which they object include all of the following except:
a. voting in new directors.
b. bringing legal action.
c. voiding the charter.
d. calling a special stockholders’ meeting.
For violation of the Sherman Act, the maximum fine that may be imposed on a natural
person is:
a. $1 million.
b. $500,000.
c. $0.
d. $100 million.
An action for injunctive relief may be granted:
a. if money is due and payable.
b. if the breach consists of doing a prohibited act.
c. if the breach would cause nominal damages.
d. if the breach would cause consequential damages.
Small children who trespass on land may be owed a special duty of care based on the
doctrine of:
a. caveat emptor.
b. res ipsa loquitur.
c. comparative negligence.
d. attractive nuisance.
When the statute of frauds applies and there is no written proof of the contract, the
contract is:
a. void.
b. enforceable if there are two credible witnesses.
c. voidable by a party who has not signed.
d. illegal.
The parties may decide that their contract is not the one they want. They may then
replace it with another contract. If they do, the original contract is discharged by
__________.
a. solution
b. elocution
c. retribution
d. substitution
A(n) __________ is a negotiated disposition of a matter before an administrative
agency, generally without public sanctions.
a. formal settlement
b. informal settlement
c. judicial verdict
d. quasi-judicial verdict
The contact rule applies in which of the following states?
a. Alabama
b. Indiana
c. New York
d. All of the above
Any adversely affected person may challenge the validity of an Occupational Safety
and Health Administration (OSHA) standard in a U.S. Court of Appeals.
Which method of payment gives the buyer credit by postponing the time for payment?
a. a promissory note
b. a check
c. a draft
d. a certified check
The power to tax income:
a. is possessed only by the federal government.
b. is possessed only by state governments.
c. may be exercised concurrently by both state and federal governments.
d. is controlled exactly like the power to wage war.
The formation of contracts in cyberspace is governed today largely by:
a. international contract law principles.
b. traditional contract law principles.
c. federal contract law principles.
d. uniform state laws.
An employee is hired to work under the control of the employer and the
employer-employee relationship requires the consent of both parties.
When a special indorsement is made, the instrument continues to be order paper and
may be negotiated only by an indorsement and delivery.
Peter is employed as a shop electrician for ABC, Inc. Peter has a car being repaired and
a home on which he is paying mortgage payments. Peter is contemplating filing for
bankruptcy, but he is not sure which type of petition to file. Peter also wonders whether
the auto repair costs and the mortgage payments are dischargeable. Which bankruptcy
filing is most appropriate for Peter? Are Peter’s debts dischargeable?
A letter of credit cannot extend for a period of more than five (5) years.
The Clayton Act prohibits price discrimination between different buyers of like
commodities when the effect may be to substantially lessen competition.
With regard to transactions between merchants, failure to repudiate a confirming letter
within ten (10) days after receipt binds the non-signing merchant, just as if he had
signed the letter or a contract.
An unlicensed insurance broker who cannot personally recover a fee because of the
absence of a license can effectively circumvent the statutory requirements by having a
friend who is a licensed broker bill for the services and collect the payment for him.
A third person who deals with a person claiming to be an agent has the right to rely on
the statements made by the agent concerning the extent of the agent’s authority.
According to the RMBCA, shareholders may, by majority vote, remove a director with
or without cause unless the articles of incorporation provide that directors may be
removed only for cause.
Time honored rules of the community are called the common law.
The Federal Trade Commission suspects Billy Williams of unlawful trade activities and
has obtained evidence, claimed to be proof of unlawful activity, by way of aerial
photography. The FTC is also currently seeking the submission of various documents,
within Williams’ place of business, for additional evidence. Williams refuses to submit
to the demands to produce the documents and claims that this demand and the aerial
photos are direct violations of his constitutional rights. Williams also demands a jury
trial to clear him of charges levied. Comment on Williams’ claims.
The warranties made by an unqualified indorser guarantee that payment of the
instrument will be made.
Even after there is an effective ratification, the original action of an agent still is treated
as unauthorized.
Generally, when a person of legal age makes a contract with a minor, the contract is
voidable by either party.
A bank always is liable for making payments on a postdated check.