The exercise of the power to avoid a contract is known as:
a. ratification.
b. disaffirmance.
c. ab initio.
d. restitution.
Maximum rates of interest that are permitted under usury statutes are uniform from
state to state.
a. True
b. False
All of the following are true of promoters of a corporation EXCEPT:
a. They solicit investors to begin the corporation.
b. They prepare the formal documents of incorporation.
c. They may make contracts in the name of the corporation.
d. They continue to solicit capital whenever needed after incorporation.
In a lease, the lessee obtains the right to possess and use the goods for a period of time
in return for consideration, but title does not pass.
a. True
b. False
The relationship between the payor bank and its checking account customer is
exclusively governed by statute and leaves no room for contractual modifications.
a. True
b. False
Norma leaves the Tri-County Accounting Partnership. She may immediately compete
with the partnership for new clients and may collect and keep the fees she earns from
both new clients and from old clients on account of transactions she completes from her
partnership with Tri-County.
a. True
b. False
A holder must actually have the instrument in his possession.
a. True
b. False
Disparagement differs from defamation in that defamation pertains to personal
reputation, whereas disparagement pertains to business interests.
a. True
b. False
Jerry received a bill for $300 from Johnson for a tune-up Johnson had performed on
Jerry’s car. Jerry called Johnson and told him, “The car runs no better now than before
the tune-up. I am sending you $100 and no more.” Johnson received the $100 check
which was marked “paid in full” and cashed it. Jerry is still liable to Johnson for $200.
a. True
b. False
The common law system is used in:
a. Australia.
b. Latin America.
c. England.
d. Both Australia and England.
Under which of the following provisions of the U.S. Constitution is a corporation not a
“person”?
a. The Fifth Amendment Due Process Clause.
b. The Fourteenth Amendment Due Process Clause.
c. The Fourteenth Amendment Equal Protection Clause.
d. The Fifth Amendment right against self-incrimination.
e. The Fourth Amendment protection against unreasonable searches and seizures.
Punitive damages is a term referring to damages that will merely compensate victims
for the harm they have suffered, but will cost defendants more money than they have.
a. True
b. False
“Pay to the order of Jose Dejesus” is a special indorsement.
a. True
b. False
Employee privacy:
a. is protected by the common law “invasion of privacy” torts.
b. relates to drug and alcohol testing.
c. relates to polygraph testing.
d. All of these are true.
The characteristics of a spendthrift trust include which of the following?
a. Spendthrift provisions are not valid in most states.
b. Trust creditors can never seize income from a spendthrift trust.
c. A settlor may provide, in a spendthrift trust, that the beneficiary cannot, by
assignment or otherwise, impair her rights to receive principal or income.
d. All of these.
Under the RMBCA, a newly formed corporation need not hold an organizational
meeting.
a. True
b. False
For purposes of Section 16(b) of the 1934 Securities Exchange Act, which of the
following are not “insiders”?
a. Shareholders owning more than 10 percent of the stock of a corporation listed on a
national stock exchange or registered with the SEC.
b. Directors.
c. Officers.
d. All of these may be considered insiders.
Under the UPA, submission of a partnership claim to arbitration requires the consent of
all the partners.
a. True
b. False
All interests in property that can be conveyed carry the right to immediate possession.
a. True
b. False
The most frequently used documents of title are the warehouse receipts issued by
warehousers and the bills of lading issued by carriers.
a. True
b. False
Some states require the lender to forfeit two or three times the amount of usurious
interest charged.
a. True
b. False
Business torts consist of:
a. interference with contractual relations.
b. disparagement.
c. fraudulent misrepresentation.
d. Each of these are correct.
The Competitive Equality Banking Act:
a. allowed intermediary banks to become clearinghouses.
b. includes a requirement that collecting banks give provisional credit to its subagents.
c. has expedited the availability of funds.
d. None of these.
Jill issues a negotiable promissory note to Cherice, who indorses it and delivers it to
Lee. If Lee knows that the note was given to Cherice in exchange for worthless
securities, Lee cannot be a holder in due course.
a. True
b. False
Group boycotts are not prohibited by the Sherman Act.
a. True
b. False
The __________ case involved the issue of the validity of a government restriction on
commercial speech under the First Amendment.
a. Williamson v. Mazda Motor of America, Inc.
b. Thompson v. Western States Medical Center
c. First National Bank v. Bellotti
d. Austin v. Michigan Chamber of Commerce
A transaction involving real estate whereby one party deposits a deed or money with a
third party who holds the deed or funds until the happening of an agreed upon event is
called:
a. adverse possession.
b. escrow.
c. foreclosure.
d. abstract of title.
In bringing a warranty action, the buyer must prove that:
a. a warranty existed.
b. the warranty has been breached.
c. the breach of the warranty proximately caused the loss suffered.
d. All of these.
e. None of these.
Discuss the validity and effect of each of the following:
a. Two manufacturers of the same product decide to allocate territories with one taking
the southern states.
b. A labor union encourages its members and all consumers to boycott a product
manufactured by a company that refuses to honor a union contract.
c. Bettys Bargain Department Store sells its products for 10% under the suggested retail
price. One manufacturer tells the store it will not supply wholesale goods to it unless it
charges at least the suggested retail price.
A promise or order is payable at a definite time if it is payable:
a. at a time readily ascertainable at the time the promise or order is issued.
b. at a fixed date or dates.
c. at a definite period of time after sight or acceptance.
d. All of these.
The finder of lost property is entitled to possession of it, even against the true owner.
a. True
b. False