An operating agreement or amendment cannot be orally stated.
The Williams Act is an amendment to the Securities Exchange Act of 1934 made in
1968 that specifically regulates tender offers.
According to the moral minimum theory, a business that corrects the social injury it
causes has met its duty of social responsibility.
Under the Statute of Frauds, any contract that transfers an ownership interest in real
property must be in writing to be enforceable.
A tenancy for years terminates at the death of either party.
The Eighth Amendment protects criminal defendants from cruel and unusual
punishment.
When goods are in the possession of the buyer, the right to stop goods in transit is a
viable remedy for the seller.
The seller’s or lessor’s general obligation is to accept and pay for the goods.
The corporation that is proposed to be acquired in a tender offer situation is called
tender offeror.
According to the UCC, an agreement modifying a sales or lease contract needs
consideration to be binding.
The entrustment rule applicable to sales contract is not applicable to leases.
The Clayton Act is the only major antitrust act that includes criminal sanctions.
The setting of minimum resale prices is not a per se violation of Section 1 of the
Sherman Act.
The right of a lessee to demand the return of goods from the lessor in the occurrence of
the defaulting of the contract is the right to reclaim goods.
A manufacturer that purchases raw materials and produces a finished product owns that
product.
Contracts that require work to be judged by a third person typically are judged by the
reasonable person test.
Releasing any general partner from a lawsuit does not release the other partners from
the lawsuit.
An initial license fee is a lump-sum payment for the privilege of being granted a
franchise.
A warehouse company can sell the stored goods of the bailor if the charges are not paid
on time.
Disclaimer of consequential damages does not excuse breaching parties from paying
compensatory damages.
A creditor beneficiary contract usually arises when the original creditor assigns his or
her rights to receive a performance to an intended third party.
A service mark is a distinctive mark, symbol, name, word, motto, or device that
identifies the goods of a particular business.
Courts have permitted two or more small companies to merge without liability under
Section 7 of the Clayton Act if the merger allows them to compete more effectively
with a large company.
If the parties to a contract do not agree to a place of delivery during the time of
contracting but know that the goods are located at some other place, then the place of
delivery is the seller’s place of business.
A false statement about a competitor’s products, services, property, or business
reputation is termed product disparagement.
The agreement of the tender offeror to abandon its tender offer and not purchase any
additional stock is called a standstill agreement.
An intended third-party can benefit from a contract but cannot legally hold a contracted
party liable for its performance.
The ‘shaping moral standards” function of the law prohibits discrimination in
employment.
The Free Exercise Clause prohibits the government from interfering with the free
exercise of religion in the United States.
Limited-jurisdiction trial courts hear cases such as felonies or civil cases involving
more than a certain dollar amount.
If goods held by a bailee are to be delivered to the buyer without the seller moving
them, the risk of loss passes to the seller when the bailee acknowledges the buyer’s right
to possession of the goods.
According to Rawls’ social justice theory, universal rules are based on consistency and
reversibility.
Which of the following entities does the ECPA permit to access stored electronic
communication?
A) the law enforcement people performing an investigation
B) the owner of the website where the user has an email account
C) the Internet service provider
D) the bank where an account holder keeps his finances
A promise by an indorser to pay the holder or any subsequent indorser the amount of
the instrument if the maker, drawer, or acceptor defaults on it is known as a(n)
________ indorsement.
A) competent
B) promissory
C) unqualified
D) qualified
Which of the following is a horizontal restraint of trade?
A) resale price maintenance
B) division of markets
C) unilateral refusal to deal
D) conscious parallelism
An offeree can respond with a promise of acceptance to an offeror’s promise to form a
________ contract.
A) bilateral
B) unilateral
C) quasi-contractual
D) void
The first ten amendments to the U.S. Constitution are collectively known as the
________.
A) Due Process Clause
B) Privileges Clause
C) Bill of Rights
D) Articles of Confederation
A long-term debt security that is secured by some form of collateral is referred to as a
________.
A) treasury share
B) bond
C) note
D) debenture
A(n) ________ is a contract a principal and agent enter into that says the principal
cannot employ another agent other than the one stated.
A) exclusive principal contract
B) exclusive agency contract
C) ratified contract
D) apparent agency contract
Which of the following is true of monetary damages?
A) Nominal damages are paid once the nonbreaching party has suffered a financial loss.
B) Anticipatory breaches cannot be awarded monetary damages.
C) Liquidated damages are set by the court towards the breaching party.
D) Consequential damages are considered as monetary damages.
Which of the following statements is true about intermediate appellate courts?
A) They hear new evidence and testimony that have come to light after the trial courts
have made their decision.
B) They do not grant any oral hearings to the parties.
C) They have jurisdiction to hear cases of a limited or specialized nature.
D) They review either pertinent parts or the whole trial court record from the lower
court.
Omar lives in Saudi Arabia. Describe the religious law that Omar follows.
Gerard and Tony organize an LLC by investing $55,000 and $45,000 respectively. The
operating agreement states that profits are to be shared in the ratio of 55:45 between
Gerard and Tony and makes no mention of sharing losses. The LLC incurs a loss of
$100,000 in its first year. How is this loss shared?
A) Both Gerard and Tony have to pay $50,000 each.
B) Gerard pays $55,000 while Tony pays $45,000.
C) Gerard pays $45,000 while Tony pays $55,000.
D) Gerard and Tony are not liable for the losses of the LLC.
Which of the following is a similarity between the tort doctrine of negligence and the
tort doctrine of strict liability?
A) Both cover casual transactions by nonmerchants.
B) Both apply to services and products.
C) Both require that the defendant be at fault.
D) Both apply to cases of product liability.
Which of the following statements is true of accountants?
A) Accountants cannot be hired to perform nonaudit services.
B) Accountants cannot be held liable by provisions of common law.
C) Accountants can be held liable to clients but not to third parties.
D) Accountants who lack CPA certification are called public accountants.
Karen borrows $10,000 from Celeste. Karen is to pay Celeste the principal amount,
with 8 percent interest, over five years in 60 equal monthly payments. After one year of
receiving proper payments from Karen, Celeste assigns this right to receive future
payments to Larry. Who has the duty to notify Celeste about the assignment?
A) a notary public
B) Larry
C) Karen’s attorney
D) the authority who drafted the contract
Which of the following is provided by the National Labor Relations Act of 1935?
A) to regulate internal affairs of each union
B) to represent employees according to their sectors of employment
C) to bargain collectively with employers
D) to equally represent every union member
The ________ is a federal statute that authorizes the EPA to regulate facilities that
generate, treat, store, transport, and dispose of hazardous wastes.
A) Resource Conservation and Recovery Act
B) Clear Water Act
C) Toxic Substances Control Act
D) Comprehensive Environmental Response, Compensation, and Liability Act
The ________ was intended to eliminate job discrimination based on race, color,
national origin, sex, and religion.
A) Lilly Ledbetter Fair Pay Act
B) Civil Rights Act of 1964
C) Title II of GINA
D) Title I of the ADA
A man tries to swallow a pen as part of a circus act. The pen becomes lodged in his
throat and he is taken to a hospital for immediate medical attention. The man sues the
company that manufactured the pen. Which of the following would be the best defense
for the pen manufacturer in this lawsuit?
A) It can claim that the product carried generally known dangers.
B) It can claim that the product was abnormally misused.
C) It can claim that the injury was caused by a supervening event.
D) It can claim that the injury was caused by an intervening event.
Which of the following terms refers to a nonbreaching party’s legal duty to avoid or
reduce damages caused by a breach of contract?
A) tender of performance
B) mitigation of damages
C) liquidation of damages
D) disclaimer of consequential damages
A per se violation of Section 1 of the Sherman Act that occurs when a party at one level
of distribution enters into an agreement with a party at another level to adhere to a price
schedule that either sets or stabilizes prices is known as ________.
A) a group boycott
B) horizontal price fixing
C) resale price maintenance
D) nonprice vertical restraints
The ________ bears the risk of loss during transportation in a destination contract.
A) buyer
B) seller
C) carrier
D) lesser
The ________ forbids the use of oppressive child labor and makes it unlawful to ship
goods produced by businesses that use oppressive child labor.
A) OSHA
B) ERISA
C) FMLA
D) FLSA
A(n) ________ is a clause that can be included in the articles of incorporation that
permits the corporation to engage in any activity permitted by law.
A) general-purpose clause
B) limited-purpose clause
C) dissolution clause
D) ultra vires clause
Which of the following businesses and activities enjoy an implied exemption from
antitrust laws?
A) railroads
B) agricultural cooperatives
C) airlines
D) labor unions
Which of the following is true of merchant protection statutes?
A) They allow merchants to detain shoplifters without being held liable for false
imprisonment.
B) They allow merchants to detain suspects for as long as the merchants deem
necessary.
C) They allow merchants to interrogate suspected shoplifters using forceful, coercive
methods.
D) They allow merchants to exact reasonable payments from suspects as a punitive
measure.
The U.S. Supreme Court has held that sexual harassment that creates a hostile work
environment violates ________.
A) Title VII of the Civil Rights Act
B) the Fair Employment Practices Act
C) Title II of GINA
D) Title I of the ADA
A(n) ________ is an instrument that evidences a borrower’s debt to the lender for a real
property.
A) note
B) consignment
C) accommodation
D) deed of trust
Which of the following courts are considered as the federal court system’s intermediate
appellate courts?
A) U.S. Courts of Appeals for Veterans Claims
B) U.S. courts of appeals
C) U.S. district courts
D) U.S. courts of federal claims
Preprinted forms whose terms the consumer cannot negotiate, and must sign in order to
obtain a product or service are referred to as ________.
A) contracts of adhesion
B) quasi-contracts
C) contracts in restraint of trade
D) voidable contracts
________ refers to the integration made by express reference in one document that
refers to and incorporates another document within it.
A) Implied integration
B) Incorporation by reference
C) Executory contract
D) Merger clause
Which of the following is true of equitable remedies of the chancery courts?
A) They were shaped to fit each situation.
B) They did not take precedence over the legal decisions and remedies of the law
courts.
C) They were mostly used to solve commercial disputes.
D) They were administered by the judges appointed in local areas.
The Food, Drug, and Cosmetic Act is a federal statute that ________.
A) covers all food products including poultry and processed meat
B) grants approval for food additives, drugs, cosmetics, and medicinal devices
C) implements the Federal Meat Inspection Act enacted in 1906
D) protects the public by providing greater medical coverage from food-related
illnesses
Under the E-SIGN Act, a digital e-signature can be verified by using ________.
A) a smart card
B) a domain name
C) HTTP
D) an ISP
The ________ is a federal statute primarily designed to prevent fraud in the trading of
securities after they are issued.
A) Securities Act of 1933
B) Securities Exchange Act of 1934
C) Sarbanes-Oxley Act of 2002
D) Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
To prove fraud, which of the following elements must be shown?
A) The innocent party knew the wrongdoer.
B) The innocent party was the one who detected fraud.
C) The wrongdoer assumed a false identity.
D) The wrongdoer intended to deceive the innocent party.