A heading printed in uppercase letters or a typeface that is larger than the rest of the
body of a sales or lease contract is meeting the UCC’s requirement of ________ for
warranties.
A) obscurity
B) conspicuity
C) crashworthiness
D) nebulousness
In a sale or return contract, the risk of loss and title to the goods pass to the buyer when
the buyer ________.
A) enters into the contract
B) takes possession of the goods
C) expressly indicates acceptance
D) breaches the contract
Which of the following would be seen as a breach of the duty of loyalty by a corporate
officer?
A) straight voting
B) cumulative voting
C) piercing the corporate veil
D) self-dealing
Which of the following is true of intellectual property of a franchisor?
A) Trademarks do not qualify for patents.
B) A word or motto that identifies a franchisor does not qualify for trademark
protection.
C) A service mark is exclusive to the franchisor and cannot be licensed to franchisees.
D) Trade secrets of a franchisor do not qualify for patent protection.
What is a codicil?
A) a type of will that cannot be amended once created
B) a separate document that must be executed to amend a will
C) a will that has been attested by the beneficiary of the will
D) a duplicate of a will that is used in case the original is destroyed
Which of the following is true for an auction without reserve?
A) The bidder is considered the offeror.
B) The seller need not accept the highest bid.
C) The goods on sale cannot be withdrawn.
D) The auctioneer is not allowed to set a minimum bid.
Which of the following statements is true about a durable power of attorney?
A) It is only effective as long as the principal is able.
B) It remains effective even though the principal is incapacitated.
C) It is effective even when the agency is an oral agreement.
D) It is only effective if the agent is a certified lawyer.
A(n) ________ is a clause that can be included in the articles of incorporation that
stipulates the activities that the corporation can engage in. The corporation can engage
in no other purposes or activities.
A) ultra vires clause
B) dissolution clause
C) general-purpose clause
D) limited-purpose clause
Techtel Corp. has $25 million in secured debt and $10 million in unsecured debt. After
a series of quarterly losses, the company files for Chapter 11 bankruptcy. Techtel
proposes a plan of reorganization, which discharges about 60 percent of its unsecured
debt. Which of the following would happen upon the bankruptcy court’s approval of the
proposed plan of reorganization?
A) Techtel will be liable to pay the discharged unsecured debt after eliminating its
secured debt.
B) Techtel will be liable to pay 40 percent of its unsecured debt on a pro-rata basis.
C) Techtel will be allowed to discharge a significant percent of its secured debt, as well.
D) Techtel will be allowed to propose a new plan of payment after a few months to
discharge the remaining 40 percent of its unsecured debt.
An obligee who transfers the right to receive performance is called the ________.
A) subsequent assignor
B) obligor
C) assignor
D) assignee
________ include environmental laws, securities laws, and antitrust laws and provide
for criminal violations and penalties.
A) Regulatory statutes
B) Penal codes
C) Charters
D) Codicils
In the United States, what recourse does an accused person have in case he cannot
afford a private defense lawyer?
A) The government will provide an attorney for the accused free of charge.
B) He will have to spend his time in jail till he can collect enough money to afford one.
C) A public defender will be appointed to the accused by the government for a fee.
D) He will have to defend himself when the trial starts.
Hanson is employed as a Chief Financial Officer of EasyMoney firm in New York City,
for a salary of $200,000 per year on a three-year contract. His employer terminates
Hanson with two years left in the contract. Hanson accepts employment as a financial
analyst at a different firm that pays $150,000 per year. Which of the following hold true
in this scenario?
A) Hanson cannot take any legal action against his formal employer after accepting
another job.
B) Hanson’s former employer must pay Andrew two years’ worth of his former salary.
C) Hanson can only sue to receive nominal damages.
D) Hanson can sue his prior employer and recover $100,000.
Making false statements about a competitor’s products, services, property, or business
reputation could make a company liable for ________.
A) invasion of the right to privacy
B) tort of appropriation
C) disparagement
D) misappropriation of the right to publicity
A check is finally paid when ________.
A) the depository bank credits the customer’s account with an option to reverse the
credit in case of dishonoring of the check
B) the payer bank fails to dishonor the check within certain statutory time periods
C) the drawer settles for the check while holding a right to revoke the settlement
D) the final bank in the collection process tentatively credits the account of the prior
transferor
Kinlin, a furniture retailer has a contract with William Woods, a carpenter. The contract
states that Woods must deliver five tables and that Kinlin would pay $2,000 per table.
However, Woods manages to deliver only four tables and Kinlin needs to buy the fifth
table from another supplier for $3,000. How much money can Kinlin recover from
Woods as compensatory damages?
A) $5,000
B) $2,000
C) $3,000
D) $1,000
In a civil case John Deer vs. Jane Doe, the judge finds that the jury was swayed by the
fact that Jane Doe was a woman when passing the verdict in her favor. Owing to this,
the judge reduces the damages awarded to Jane by $20,000. This act is called
________.
A) remittitur
B) judgment notwithstanding the verdict
C) motion for summary judgment
D) motion for judgment on the pleadings
Which of the following is true of contracts?
A) Contracts can be classified as either voluntary or involuntary.
B) All contracts are legally enforceable.
C) The terms of a valid contract become private law between the parties.
D) Courts of law usually do not enforce the promises made as part of contracts.
A(n) ________ authorizes a person who does not own adjacent land the right to use
another person’s land.
A) profit
B) license
C) easement appurtenant
D) easement in gross
The ECPA is a federal statute that ________.
A) establishes that businesses are allowed to send spam emails, as long as they do not
lie
B) rules that ISPs are not liable for the content transmitted over their networks by email
users and websites
C) establishes that an e-signature is as effective as a pen-and-paper signature
D) makes it illegal to access stored email as well as email in transmission
A competitor can lawfully use a rival’s trade secret if the competitor got the trade secret
by means of ________.
A) economic sabotage
B) reverse engineering
C) industrial espionage
D) misappropriation
Techstate, a hardware manufacturer in the United States, has an existing contract with a
client based in the Republic of Karthasia, which is going through a civil war. The
resulting upheaval in that country has led to some of the shipments to the client being
destroyed by warring factions. As a sanction against the country, the United States
government places an embargo on all exports to that country by U.S. firms. What will
be the state of the contract between Techstate and the client in Karthasia after the
embargo?
A) It will be terminated due to destruction of subject matter.
B) It will be terminated due to incompetency of the offeror.
C) It will be terminated due to lapse of time.
D) It will be terminated due to supervening illegality.
The ________ is a federal statute that permits trademark owners and famous persons to
recover domain names that use their names where the domain name has been registered
by another person or business in bad faith.
A) UCITA
B) ACPA
C) ICANN
D) ECPA
Which of the following is required of a contract for it to be considered an express
contract?
A) It must be either oral or written.
B) It must be implied-in-law.
C) It must be voidable.
D) It must always be in writing to be enforceable.
Which of the following is a legal recourse for sellers, under the UCC, in case of
shipment of nonconforming or defective goods?
A) tender of delivery
B) right to cure
C) perfect tender rule
D) replevin
In a(n) ________ franchise, the franchisor licenses the franchisee to make and sell its
products or services to the public from a retail outlet serving an exclusive geographical
territory.
A) chain-style
B) area
C) distributorship
D) processing plant
Which of the following transactions occurs when a seller sells goods to a buyer on
credit and retains a security interest in the goods?
A) two-party secured
B) three-party secured
C) two-party unsecured
D) three-party unsecured
Acceptance to the goods under a sale on approval can occur if the buyer ________.
A) notifies the rejection of goods within reasonable time
B) uses the goods inconsistently with the purpose of the trial
C) uses the goods but does not expressly indicate its acceptance
D) is allowed to use the goods for a specific period of time
In a member-managed LLC, ________ can bind the LLC to contracts.
A) all members
B) only the member with the highest capital contribution
C) non-member managers
D) every shareholder
Helen has a $40,000 automobile collision policy with a $750 deductible. If her car is
involved in an accident costing $15,000 in damages, ________ is the amount she will
have to pay to receive coverage for the damages from the insurer.
A) $750
B) $39,250
C) $40,000
D) $14,250
Angela buys a paper shredder from Pencila Stationeries. She attempts to cut her hair
short using the paper shredder and is injured in the process. She files a strict liability
lawsuit against Pencila Stationeries. Which of the following defenses can Pencila
Stationeries successfully use against Angela?
A) generally known dangers
B) abnormal misuse
C) foreseeable event
D) crashworthiness
A limited partner who takes an active part in managing a limited partnership ________.
A) will lose the right to receive profit distributions as a limited partner
B) will be entitled to reasonable compensation for the value of the managerial services
provided
C) will be treated as a general partner and is liable only to parties who reasonably
believe that he or she is a general partner
D) will be treated as a general partner and liable to all parties with whom he or she
transacts business affairs
Which of the following best describes the term lease?
A) an interest in real property given to a lender as security for the repayment of a loan
B) an interest in real property for a person’s lifetime
C) the transfer of the right to use real property for a specified period of time
D) a right to use someone else’s land without owning or hiring it
Under the Resource Conservation and Recovery Act (RCRA), the EPA is authorized to
regulate underground storage facilities, such as underground gasoline tanks.