A buyer in the ordinary course of business is:
A. subject to the security interest created by his seller.
B. free from the security interest created by the secured party.
C. free from the security interest created by his seller.
D. subject to the security interest created by the secured party.
If the shipping terms are cash on delivery (COD), then the buyer:
A. need not pay for the goods if inspection is not allowed.
B. must pay for the goods if it is obvious without inspection that the goods do not
conform to the contract.
C. must pay the expenses of inspection if the goods do not conform to the contract.
D. must pay for the goods before inspecting them unless they are marked “Inspection
Allowed.”
Which of the following is the order of priority in case of an internal conflict in a
negotiable instrument?
A. Typewritten terms beat printed terms, which beat handwritten terms.
B. Printed terms beat typewritten terms, which beat handwritten terms.
C. Handwritten terms beat printed terms, which beat typewritten terms.
D. Handwritten terms beat typewritten terms, which beat printed terms.
The difference between a public figure and a private one regarding defamation cases is
that:
A. only the public figure can file a case.
B. the private figure generally loses such cases.
C. the public figure has to prove “actual malice.”
D. the private figure does not enjoy conditional privileges.
Larry leased an apartment to Terry. The lease agreement prohibits Terry from assigning
or subletting the property. Such a provision:
A. is generally void.
B. is unenforceable, unless Larry changes his mind.
C. is unenforceable, unless Terry needs to sublet the property.
D. is generally enforceable.
A corporation’s decision to issue a dividend, and the size of that dividend, is made by
the:
A. shareholders.
B. board of directors.
C. officers of the corporation.
D. creditors of the corporation.
In a _____ contract, the goods are delivered to the buyer primarily for resale with the
understanding that the buyer has the right to return them.
A. sales
B. buy and sell
C. sale or return
D. supply of goods
Sue delivers defective widgets to Boz. The widgets were not as warranted. In seeking to
recover damages from Sue, Boz:
A. does not have to give Sue notice of the defect.
B. must give up since he accepted the goods.
C. would never be entitled to consequential or incidental damages.
D. may recover the difference between the value of the goods received and the value of
the goods.
Personal property is defined by a process of _____.
A. exclusion
B. tangibility
C. consideration
D. inheritance
Under which of the following circumstances will Rita be held liable for the crime of her
partner?
A. The partner’s criminal tendencies were unknown to Rita.
B. The partner’s crime was outside the scope of the partnership’s business.
C. The state’s criminal code does not view partnerships as legal entities.
D. The partner’s crime was authorized by Rita.
What is the term for affirming a contract and surrendering the right to avoid a contract
made while being a minor?
A. Ratification
B. Emancipation
C. Impairment
D. Duress
An individual may be fined up to _____ and imprisoned for up to _____ for a criminal
violation of the 1934 Act.
A. $15 million; 10 years
B. $5 million; 10 years
C. $15 million; 20 years
D. $5 million; 20 years
Which of the following is an executive administrative agency?
A. The National Labor Relations Board
B. The Equal Employment Opportunity Commission
C. The Internal Revenue Service
D. The Interstate Commerce Commission
_____ voting permits a holder of more than 50 percent of the shares of a corporation to
dominate the corporation.
A. Preference
B. Cumulative
C. Ranked
D. Straight
The legal remedy of _____ requires the defendant to pay the value of the benefits that
the plaintiff has conferred on him.
A. restitution
B. waiver
C. compensatory damages
D. accord and satisfaction
Jerry owns a parcel of land. Nate, one of Jerry’s closest friends and an attorney, has
persuaded Jerry to sell the land to Nate at a price substantially below fair market value.
At the time Jerry sold the land, he was resting in a nursing home recovering from a
serious illness. If Jerry desires to set aside the sale, which of the following causes of
action is most likely to be successful?
A. Duress
B. Undue influence
C. Fraud
D. Misrepresentation
A “_____” is a security interest in real property or a deed to real property that is given
by the owner as security for a debt owed to the creditor.
A. bill of sale
B. note of trust
C. mortgage
D. quasi-contract
Which of the following is a consequence of wrongful dissociation?
A. The dissociated partner may demand dissolution of the partnership.
B. The partnership must terminate on grounds of wrongful dissociation.
C. The dissociated partner should contribute to performing the winding up.
D. The dissociated partner is not entitled to receive the buyout price until the term of
the partnership has expired.
What is the term for a temporary right to enter another person’s land for a specific
purpose?
A. License
B. Profit
C. Conveyance
D. Estate
The expansion of corporate criminal liability in imputing the criminal intent of
employees to the corporation falls under the scope of:
A. mens rea.
B. presumption of innocence.
C. double jeopardy.
D. respondeat superior.
Rules of the New York Stock Exchange (NYSE) and the NASDAQ, which apply to
firms listed on the NYSE or NASDAQ, require that audit committees comprise only of
_____.
A. inside directors
B. independent directors
C. outside directors
D. top level officers
Promoters of a youth-oriented magazine publishing business substantially complied
with each of the mandatory conditions precedent to the incorporation of the business,
but they forgot to include the incorporators’ addresses in the articles of incorporation.
As a result, a(n) _____ corporation was formed.
A. de jure
B. de facto
C. “S”
D. estoppel
In which of the following ways does the Age Discrimination in Employment Act
(ADEA) differ from Title VII?
A. A plaintiff must file a charge with the EEOC or a state agency under Title VII, but
not under the ADEA.
B. Unlike Title VII, the ADEA does not incorporate mixed-motives claims of disparate
treatment.
C. Title VII has a BFOQ defense but the ADEA does not.
D. A successful plaintiff can get equitable relief under Title VII, but not under the
ADEA.
John is the promoter of Wheelies Corp., an automotive wheel manufacturing business.
To escape personal liability on preincorporation contracts, John planned to make only
nonbinding preincorporation contracts. He made one such contract in March 2011 with
his friend David for supplying Wheelies with auto parts. After getting payment for the
contract, David refused to make the supply. Wheelies has not been incorporated yet. Is
David liable?
A. No, David is not liable because John is not liable on the contract.
B. No, David is not liable because Wheelies has not been formed yet.
C. Yes, David is liable to Wheelies but not to John.
D. Yes, David is liable to both John and Wheelies.
In limited liability partnership, most of the partners have liability for partnership
obligations:
A. beyond the partnership assets.
B. up to the extent of the partnership assets.
C. as per the partnership rules & regulation.
D. as per the demand of the partner.
According to the Code, when there is an acceptance that contains terms that are
different from the original terms of the contract, the contract will consist of _____ and
the appropriate gap-filling presumptions of the Code.
A. an inquiry regarding terms
B. notifications to prevent breach of conduct
C. counteroffers from either party
D. terms on which the parties’ writings agree
Joe is going on a “survival hike” in the desert. He goes to a sporting goods store,
describes the hike, and asks the salesman to select suitable hiking boots for him. The
boots the salesman suggests are well made and are appropriate for normal hiking, but
are not suitable for Joe’s planned ordeal. Relying on the salesman’s selection, Joe buys
the boots. After he suffers personal injury because the boots prove inadequate for the
survival hike, Joe sues the store. Joe can recover under:
A. the implied warranty of merchantability.
B. the implied warranty of fitness.
C. both the implied warranty of fitness and the implied warranty of merchantability.
D. Joe cannot sue for breach because it was his responsibility to select the boots.
Which of the following is true regarding silence as an acceptance?
A. Contract law explicitly recognizes silence as constituting acceptance.
B. An offeree’s silence is considered acceptance when he/she indicates so.
C. An offeror can impose on the offeree a duty to respond to the offer.
D. The Code explicitly recognizes silence as constituting acceptance.
Which of the following characterizes the transfer of trademark rights?
A. It is much easier than transferring patent interests.
B. They may only be assigned to another person.
C. They cannot be sold unless it involves a sale of goods.
D. An uncontrolled license is generally not advised.
Guilty by association is a form of:
A. begging the question.
B. argumentum ad hominem.
C. argumentum ad populum.
D. gambler’s fallacy.