Whether an agency relationship has been created is determined by using a subjective
test.
a. True
b. False
Mark (age 16) appoints Joe (age 21) as his agent to purchase a digital camcorder from
Electronic World. The transaction is:
a. void because Mark is a minor.
b. voidable by Electronic World because Mark is a minor.
c. voidable by Mark because he is a minor.
d. not voidable because Joe is not a minor.
The Pregnancy Discrimination Act extended the benefits of Title VII to pregnant
women.
a. True
b. False
Which of the following would lack the capacity to become a partner?
a. A trust.
b. An adjudicated incompetent.
c. A corporation.
d. All of these.
Attorney Geraldine advises her client, Rick, to enter a contract, which ultimately would
have benefited Geraldine but not Rick. The test of whether the contract, if entered, is
voidable based on undue influence is whether Geraldines advice would have dominated
the thinking of an ordinary, reasonable person rather than whether it dominated Ricks
mind or emotions.
a. True
b. False
The Dodd-Frank Act:
a. extends the reach of the antifraud provisions of the 1933 and 1934 Securities Acts.
b. appears to restore to private litigants the right to bring proceedings to enforce the
antifraud provisions of the U.S. securities laws in cases with an extraterritorial
component.
c. limits the Department of Justices right to bring proceedings to enforce antifraud
provisions of the U.S. securities laws in cases affecting other nations.
d. All of these.
An implied agreement in the contractual relationship is the agreement by the accountant
to act in a competent and professional manner.
a. True
b. False
More than 99 percent of all bankruptcy petitions are filed voluntarily.
a. True
b. False
Anita, who is a seamstress, agrees to sew a suit for Bryan, who promises in return to
pay Anita $500 for the suit if he is satisfied with it. Anita completes the suit, which fits
Bryan perfectly. Nevertheless, he says that he is not satisfied and refuses to accept or
pay for it. If Bryan is honest in his dissatisfaction, but he is unreasonable:
a. Bryan must pay for the suit even if he is dissatisfied.
b. this is an illusory contract, because only Anita is bound.
c. Bryan’s approval is to be judged by an objective standard.
d. Anita has no recourse against Bryan, because she agreed to the subjective standard.
Pre-judgment attachment permits a creditor to seize the debtor’s property:
a. to prevent the debtor from disposing of assets before litigation would result in a
judgment for the creditor.
b. if the defendant has not paid his debts on time.
c. when the defendant has filed for bankruptcy.
d. if the defendant cannot be persuaded to come to court.
The Revised Act, the 1980 Amendments to the MBCA, and over half of the states have
eliminated the concept of:
a. par value.
b. stated capital.
c. capital surplus.
d. All of these.
The International Anti-Bribery and Fair Competition Act of 1998 was enacted to
expand the Foreign Corrupt Practices Act to include:
a. payments made to ‘secure any improper advantage” from foreign officials.
b. all foreign persons who commit an act in furtherance of a U.S. bribe while in the U.S.
c. domestic officials of international organizations.
d. All of these are included.
Under the RULPA, a limited partnership may not use a name that is deceptively similar
to that of any corporation or other limited partnership.
a. True
b. False
Under the common law, a partnership was generally considered to be a legal entity
rather than an aggregate of individuals.
a. True
b. False
The ethical theory that underlies cost-benefit analysis is:
a. libertarianism.
b. deontology.
c. utilitarianism.
d. ethical relativism.
Once a Chapter 13 plan has been confirmed, it may:
a. be modified at the debtor’s request but only if the trustee agrees.
b. be modified only if all unsecured creditors agree.
c. not be modified.
d. be modified at the request of the debtor, the trustee, or a holder of an unsecured
claim.
All of the following would constitute a “fundamental change” to the corporation
EXCEPT:
a. an amendment to the articles of incorporation.
b. a merger.
c. a stock dividend.
d. selling off 60% of the business assets not in the regular course of business.
A minor can ratify part of a contract and disaffirm another part of it.
a. True
b. False
A written stop payment order is effective indefinitely.
a. True
b. False
An objective of the Check 21 Act is to:
a. require banks to accept checks in electronic form, thereby reducing paperwork.
b. make the check collection process faster by transferring files digitally.
c. enhance fraud detection.
d. All of these are objectives.
e. Only to make the check collection process faster by transferring files digitally and to
enhance fraud detection.
Murder is a mala prohibita type of crime.
a. True
b. False
The agent may be subject to liability to her principal for breach of the duty of obedience
if she:
a. entered into an authorized contract and the principal has changed her mind.
b. delegates her authority in any way and under any circumstances.
c. committed a tort for which the principal is now liable.
d. All of these.
The fraudulent marketing of one person’s goods as those of another is referred to as:
a. palming off goods.
b. trade secrets.
c. dilution.
d. a tying arrangement.
Which of the following statement(s) is true concerning the Montreal Protocol on
Substances that Deplete the Ozone Layer?
a. The United States and 23 other countries signed it.
b. It was not signed by the United States but was signed by 23 other countries.
c. It is a treaty that requires all signatories to reduce their production and consumption
of all chemicals.
d. It is a treaty that requires all signatories to reduce their production and consumption
of only CFC’s.
e. The United States and 23 other countries signed it asa treaty requiring all signatories
to reduce their production and consumption of all chemicals.
In most states, judges are elected by the voters for a stated number of years.
a. True
b. False
E-Sign specifically excludes:
a. all transactions covered by the UCC.
b. wills and matters of family law.
c. transactions relating to foreign commerce.
d. All of these.
Under the Third Restatement, an agent representing an undisclosed principal is
discharged from liability if the third party:
a. gets a satisfied judgment against the principal.
b. becomes aware of the principal.
c. gets a judgment against the agent.
d. He is never discharged from liability.
When first established, the Consumer Product Safety Commission promulgated a
number of mandatory safety standards.
a. True
b. False
A durable power of attorney differs from a power of attorney in that the durable power
of attorney:
a. is a formal written instrument, whereas the power of attorney may be informal and
oral.
b. must follow a standardized form set forth in the federal Uniform Durable Power of
Attorney Act.
c. becomes effective upon the principals subsequent incapacity or the agents authority is
not affected by the principals subsequent incapacity.
d. is governed by Article 3 of the UCC.
A patent lasts for the same period of time as a copyright.
a. True
b. False
J & J Co. offers a ‘subscription” for baby toys to be delivered every two months from
the birth of a child. Payment must be made within two weeks of delivery. The Markham
family accepted the J & J plan when their son, Timmy, was born. When Timmy was
four months old, one J & J toy arrived smashed to pieces. Markham:
a. can treat the whole contract as breached and refuse to pay for past installments as
well as future installments.
b. can reject the installment and cancel the contract immediately.
c. can reject the installment and refuse to pay for it if J & J cannot cure it.
d. cannot reject the installment since it is part of a series.
The term mala prohibita refers to the bad act element of a crime.
a. True
b. False