As the result of a seller’s breach, a buyer may ask for incidental damages. Incidental
damages include costs incurred in:
a. storing goods in a warehouse.
b. making calls to obtain replacement goods.
c. inspecting the goods.
d. All of these.
The 1994 amendments allow the creditors to elect a trustee in a Chapter 11 proceeding
if the court orders the appointment of a trustee for cause.
a. True
b. False
Which of the following is correct with regard to consideration?
a. In a unilateral contract, a promise is exchanged for an act or forbearance to act.
b. In a bilateral contract, there is an exchange of promises.
c. Legal sufficiency is always related to adequacy of consideration.
d. Two of these are correct.
Apparent authority may arise by an agent’s showing a third party a document from the
principal authorizing the agent to enter into such a transaction.
a. True
b. False
Attorneys for Tigre Corp. and Swindal Co. are entering a structured settlement process
whereby they conduct limited discovery and then present evidence to a panel of
managers from each company as well as to a neutral retired judge. They are involved in
an alternative dispute resolution technique known as a mini-trial.
a. True
b. False
Regulations for the 2009 Credit Card Accountability, Responsibility, and Disclosure Act
(CARD) include that credit card issuers must mail account statements 21 days prior to
the payment due date and that credit card issuers are prohibited from giving credit cards
to full-time college students under 21 years old unless the student can prove the means
to pay or a parent/guardian cosigns for the card.
a. True
b. False
The vital importance of negotiable instruments and electronic transfers as methods of
payment cannot be overstated.
a. True
b. False
Generally, State A may exercise “long-arm” jurisdiction over a defendant located in
State B if the defendant:
a. once resided in State A.
b. uses a product produced in State A.
c. made a contract in State A.
d. has relatives in State A.
a. Action Corporation purchases all of the assets of the Bell Corporation. After the
purchase, a creditor of the Bell Corporation asserts that, by buying the assets of the Bell
Corporation, Action has automatically assumed all of Bell’s obligations. Is he correct?
Explain.
b. Dicton Corporation is merged into the Crag Corporation. One of Dicton’s creditors
was not paid before the merger occurred. The creditor demands payment from the board
of directors of the Crag Corporation. The board says that because the Dicton
Corporation no longer exists, Crag has no obligation to the creditor. Who is right?
Explain your answer.
The decision of an equity court is called a(n):
a. judgment.
b. decree.
c. stare decisis.
d. inquisition.
An oral agreement for the sale of land is enforceable under the statute of frauds.
a. True
b. False
Two absolute defenses to the tort of defamation are:
a. truth and self-defense.
b. truth and privilege.
c. privilege and self-defense.
d. truth and defense of property.
The action through which the mortgage holder takes the property from the mortgagor,
ends the mortgagor’s rights in the property, and sells the property to pay the mortgage
debt is known as:
a. foreclosure.
b. equity of redemption.
c. adverse possession.
d. execution of a deed of trust.
The Reform Acts safe harbor under the 1933 Act eliminates civil liability based on an
untrue statement or omission if a forward-looking statement is:
a. material.
b. made without actual knowledge that it was false or misleading.
c. unidentified as a forward-looking statement
d. All of these.
In Saudi Arabia v. Nelson, the court held:
a. under the Foreign Sovereign Immunities Act, a foreign state is presumptively under
the jurisdiction of the U.S. courts.
b. the Foreign Sovereign Immunities Act provides the sole basis for obtaining
jurisdiction over a foreign state in the courts of this country.
c. whether a state acts in the manner of a private party is a question of motivation.
d. in determining whether a state engages in commercial activity, the question is
whether the foreign government is motivated by profit.
The Code permits the seller to recover the price plus incidental damages in which of the
following situation(s)?
a. Where the buyer has accepted the goods.
b. Where conforming goods have been lost or damaged before risk of loss has passed to
the buyer.
c. Where the goods have been identified to the contract and there is a ready market
available for their resale at a reasonable price.
d. None of these.
e. All of these.
If Class A preferred shares provide only for a cumulative dividend of $3 per share, what
will be the consequence on liquidation?
a. Class A Preferred will receive $3 per share more than common shares.
b. Class A Preferred will receive 103% of common shares.
c. Class A Preferred will share equally with common shares.
d. Class A Preferred will be subordinated to the rights of common shares.
Adverse possession, requires no:
a. contract.
b. deed.
c. formality.
d. All of these.
The Code has expanded the rights of good faith purchasers with respect to sales by
minors.
a. True
b. False
Constructive notice may occur by publication in a newspaper of general circulation.
a. True
b. False
Exclusive dealing contracts are binding because sufficient consideration is present.
a. True
b. False
According to Milton Friedman, the social obligation of a corporation is to return as
much money as possible to its shareholders.
a. True
b. False
ABC Partnership agrees to hire an “errand runner” 20 hours per week for the summer.
Alan, a partner, interviews a college student and decides to offer her the job. But she
says she needs a 40-hour-a-week job, so Alan agrees to make it 40 hours. What result?
a. ABC Partnership is not bound to hire her.
b. ABC Partnership is bound to pay her for 40 hours per week.
c. Alan is bound to pay her for 20 hours per week.
d. Alan has to pay her for 40 hours per week.
The framers of the Constitution considered it unnecessary to include in the original
document liberties that the people were to keep for themselves.
a. True
b. False
The registration requirement of the 1934 Act pertains to the entire class of securities
rather than to a specific offering.
a. True
b. False
With respect to the tort of conversion, which of the following statements is true?
a. Conversion is an intentional exercise of dominion over another’s real property that so
seriously interferes with the right of control as to justly require the payment of
damages.
b. All conversions are nuisances.
c. All trespasses are conversions.
d. None of these.
If the lease is silent on the subject, a tenant may assign his lease.
a. True
b. False
Charitable subscriptions are one of the most frequently occurring applications of the
doctrine of promissory estoppel.
a. True
b. False
If there is no time specified for the acceptance of an offer, when does the offer
terminate?
a. After 48 hours from receipt of the offer.
b. After two weeks from dispatch of the offer.
c. After 30 days from receipt of the offer.
d. After a reasonable period of time, which depends on the circumstances.
The General Agreement on Tariffs and Trade (GATT):
a. attempts to limit the practice of “dumping.”
b. is a general international antitrust agreement.
c. seeks to prohibit discrimination on import regulations and prevent export fees and
export quotas through the mechanism of the “most-favored nations” status.
d. has successfully rid international trade of tariffs.
The principal debtor’s lack of capacity due to his status as a minor may be used by the
surety to avoid payment of the obligation.
a. True
b. False
A writ of execution as used in civil law litigation allows:
a. the plaintiff to demand payment from the defendant of a judgment won in court.
b. the governor of a state to demand execution of a convicted felon who has received a
death sentence by a jury.
c. the clerk of court to issue a demand for a new trial.
d. the plaintiff, without further process, to obtain a portion of the defendant’s wages.
Nanette wanted to purchase a new car and found one she liked at Minson Motors.
Several important contractual terms were buried in the written agreement and some of
the meaning of the contract was obscured by legal jargon. The contract involved:
a. procedural unconscionability.
b. substantive unconscionability.
c. adhesion.
d. exculpatory clauses.
A photographer taking photos of a movie star with a telephoto lens would NOT be
guilty of intrusion if:
a. the movie star was in a restaurant at the time.
b. the pictures were not published.
c. the movie star was in bed at the time.
d. the photographer never entered onto the movie star’s property.
An accountant who willfully violates Section 11 of the 1933 Securities Act is subject
only to civil liability.
a. True
b. False