NAFTA establishes a free trade area between the United States and Mexico but not with
Canada.
a. True
b. False
Section 14(e) of the Securities Act of 1934 makes it unlawful for any person to:
a. make any untrue statement of material fact in connection with any tender offer, even
if the target company is not subject to the 1934 Acts reporting requirements.
b. omit to state any material fact in connection with a tender offer.
c. engage in any fraudulent, deceptive, or manipulative practices in connection with any
tender offer.
d. All of these.
Which of the following would not be a voidable transfer if made within 90 days of
bankruptcy?
a. An exchange for new value.
b. A consumer’s transfer of property valued at $500.
c. A payment made in the ordinary course of business.
d. None of the above are voidable transfers.
Garaty, Inc. is currently engaged in negotiations with one of its major unions. The
company is covered by the NLRA. If Garaty issues a factually correct statement
regarding its financial status along with the opinion of its auditors that meeting the
union demands would require the company to close down, it is likely that Garaty will
be in compliance with the act.
a. True
b. False
Which of the following would not be enforceable without additional consideration?
a. A promise to pay a debt barred by the statute of limitations.
b. A promise to pay a debt discharged in bankruptcy where the promise meets the
requirements of the Bankruptcy Code.
c. A promise which falls within the doctrine of promissory estoppel.
d. The settlement of an undisputed debt.
The case of Alpert v. 28 Williams St.Corp. involves a compulsory share exchange.
a. True
b. False
Which of the following determines when to declare dividends and in what amount?
a. The stockholders.
b. The officers of the corporation.
c. The board of directors.
d. The state in which the corporation was chartered.
Under a Kantian approach to ethics, a person should not lie to colleagues unless that
person supports the right of all colleagues to lie to one another.
a. True
b. False
Perkins commits a battery against Connors. If the government brings a criminal action
against Perkins, Connors cannot bring a civil tort action against Perkins for the same
battery because this would constitute double jeopardy.
a. True
b. False
A contract that binds the offeror to keep an offer open for a specified period of time is
known as:
a. a offer with reserve.
b. an option.
c. promissory estoppel.
d. a unilateral contract.
An administrative law judge for the Federal Trade Commission decides a case against a
retail store chain. The company then appeals the decision to the commission itself.
Which of the following is correct regarding the appeal of the case from the
administrative law judge to the commission?
a. The commission may hear additional evidence and arguments in deciding whether to
revise the findings and conclusions it made in the initial decision.
b. There is no appeal from the decision of the ALJ.
c. The commission will decide the case by having a jury trial.
d. The commission must decide the case on the record, abstracts, and briefs and may not
hear any evidence.
Elmer agreed to act as the conditional guarantor of collection on a debt of $50,000 that
Fred owed to Gloria. Fred paid Elmer a premium to serve as surety. If Fred defaults on
the debt, what are Gloria’s rights against Elmer?
Les contracts to the sell and deliver to Chan 300 rolls of insulation. Unless the parties
agree otherwise, Les must tender all 300 rolls in a single delivery, and Chans payment
is due at the time of the tender.
a. True
b. False
The United States and Germany may request an advisory opinion from the ICJ to settle
a dispute over a trade issue.
a. True
b. False
Administrative law judges are appointed by the President and confirmed by the Senate
just as are judges in the U.S. District Court.
a. True
b. False
If a holder presents a note for payment to the maker, which of the following warranties
is/are given?
a. All indorsements are genuine.
b. All signatures are genuine.
c. The holder has no knowledge that any indorsements are forged.
d. The holder is entitled to enforce the note or is authorized to obtain payment on behalf
of the person entitled to enforce the note.
e. All of these.
Hiram, when he assigns to Tim his right to receive the next four rent payments on an
apartment he owns, warrants that the tenant will make the assigned payments to Tim.
a. True
b. False
A “without recourse” indorsement eliminates all of an indorser’s liability.
a. True
b. False
A registration statement generally includes all of the following EXCEPT a:
a. financial statement certified by an independent public accountant.
b. description of the business.
c. description of the management.
d. projection of future growth potential.
On July 30 Christina, in Knoxville, agrees to sell machine-stitched quilts to Deanna, in
Los Angeles for $2,500 C.O.D., with delivery by October 1. When Christina fails to
deliver the quilts, Deanna suffers incidental damages of $400 and consequential
damages of $300. Deanna may recover:
a. damages equal to the difference between the market price on July 30 in Knoxville
and $2,500 in addition to the remedy of cover.
b. the difference between the market price on October 1 in Knoxville and $2,500, plus
$400 and $300, less expenses saved because of Christinas breach.
c. the difference between the market price on July 30 and October 1 in Los Angeles,
plus $400 and $300, less expenses saved because of Christinas breach.
d. only through the equitable remedy of specific performance.
Shareholders do not have limited liability for corporate debts.
a. True
b. False
A form of business association organized to carry out a particular business enterprise is
a:
a. sole proprietorship.
b. tenancy in common.
c. joint venture.
d. competitor.
Physical compulsion and improper threats are the two basic types of duress.
a. True
b. False
Nancy, who lives in Birdville, wants to open a McHenry Roast Chicken franchise.
Mark, a representative of McHenry, told Nancy, “If you will buy a lot and build a
building in River City, we will give you a franchise.” Nancy bought the lot and built the
building as instructed only to discover that McHenry had awarded the franchise to a
large corporation. McHenry claims no liability to Nancy since there was no
consideration. Which statement best describes the situation?
a. McHenry is not liable to Nancy since there was no consideration.
b. McHenry is not liable to Nancy since there was past consideration.
c. McHenry is liable to Nancy since adequate consideration was given by both parties.
d. McHenry is liable to Nancy based on the concept of promissory estoppel.
Restitution requires a return of value to the aggrieved party.
a. True
b. False
The United States Constitution establishes the principle of judicial review, which
divides the government into three distinct and independent branches: judicial,
executive, and legislative.
a. True
b. False
Where parties to a failed agreement are in pari delicto, a court will provide a remedy to
the injured party.
a. True
b. False
The parties to a contract may modify the agreement with no additional consideration by
simply substituting a new contract.
a. True
b. False
Unlike voting trusts, shareholder voting agreements are not limited in duration.
a. True
b. False
Under the Foreign Sovereign Immunities Act a foreign sovereign is:
a. immune from all suits in the United States.
b. immune from suits in the United States involving sovereign or public acts, but not
private or commercial acts.
c. not immune from any type of suit in the United States.
d. None of these is correct.
Under the RMBCA, the bylaws may be amended and must be publicly filed with the
articles of incorporation.
a. True
b. False
Under the Dodd-Frank Act, the SEC must issue rules requiring issuers to disclose in
annual proxy statements the reasons the issuer has chosen to combine or separate the
positions of CEO and chairman of the board of directors.
a. True
b. False
Roberts, Smith, and Thomas have been partners for twenty years. The partners,
however, are now collecting debts, converting assets to cash, paying creditors, and
distributing remaining assets to each partner. Roberts, Smith, and Thomas are engaged
in:
a. dissolution.
b. marshaling assets.
c. reformation.
d. winding up.
Subchapter S is a section of the Model Business Corporation Act that provides special
benefits for small corporations.
a. True
b. False
Ratification makes a contract void from the beginning.
a. True
b. False