Peter, Preston, and Penny organize an LLC in the month of January. While composing
the operating agreement, they forget to include the amendment clause. Six months later,
the situation demands an amendment to the operating agreement. Which of the
following would best apply in this scenario?
A) The operating agreement can be amended if all three members approve.
B) The operating agreement cannot be amended as it contains no amendment provision.
C) The operating agreement can be amended with the affirmative majority of all
shareholders.
D) The operating agreement can be amended only 60 days after a new amendment
provision is included.
Trans Cargos is a transportation service company that offers shipment services for
businesses. The company receives an order from a consignor to ship a consignment
from one city to another. During its transportation in a cargo truck, the consignment
gets destroyed due to a hurricane. Which of the following is true about the liability of
the destroyed goods?
A) Trans Cargos is entirely responsible for the destroyed goods.
B) Trans Cargos is liable to pay half the value of the destroyed goods.
C) Trans Cargos is not liable to the consignor for the destroyed goods.
D) Trans Cargos is liable to pay a minimum guarantee payment to the consignor.
Which of the following is a legal consequence of a complete performance?
A) The contract is discharged.
B) The nonbreaching party may recover damages caused by the breach.
C) One of the parties to the contract may rescind the contract.
D) The contract is substituted by the parties.
An employer pays higher wages to Shelly”who has worked with the company for six
years”than Samuel, who holds a similar position to Shelly and performs the same
functions as her, and has worked with the company for only five and a half years.
Which of the following is true of this case?
A) The employer has violated the Fair Employment Practices Act.
B) The employer is liable for disparaged-treatment discrimination.
C) The employer is liable for disparaged-impact discrimination.
D) The employer has not violated the Equal Pay Act.
A(n) ________ is an instrument that is payable to a specific payee or indorsed to a
specific indorsee.
A) bearer bond
B) bearer paper
C) allonge
D) order paper
A situation created when the owner of one piece of land is given an easement over an
adjacent piece of land is called a(n) ________.
A) profit-à-prendre
B) easement by license
C) easements in gross
D) easement appurtenant
In which of the following cases is a bank obliged to file a Currency Transaction Report
(CTR) with the Internal Revenue Service?
A) The bank receives instructions from a customer to certify an ordinary check worth
$10,000 issued in a foreigner’s name.
B) The bank receives an ordinary check worth $13,000 payable to a customer’s
checking account.
C) A customer deposits $20,000 through a cashier’s check in his checking account.
D) A customer issues stop-payment instructions on a check worth $15,000 issued to a
payee.
________ advise the president and are responsible for enforcing specific laws enacted
by Congress.
A) Cabinet-level federal departments
B) Federal administrative agencies
C) State administrative agencies
D) Nonjudicial federal departments
When the states ratified the Constitution, they delegated ________ powers to the
federal government.
A) enumerated
B) reserved
C) police
D) statutory
Which of the following is an instance of an area franchise?
A) Burger Palace franchises an independently owned restaurant to make and sell its
products in New Wilshire.
B) FreshoCo. ships Fresho in the form of a drink concentrate which is prepared and
bottled locally in Almia.
C) Victory gin licenses a retail dealer to retail its products in Ambrosia.
D) Ashbury King wants to start operating in Rolland and hires a Rolland subfranchisor
to sell the franchise on behalf of Ashbury King.
Which of the following is an element of direct price discrimination that must be shown
to prove a violation of Section 2(a) of the Robinson-Patman Act?
A) unilateral refusal to deal
B) group boycott
C) sales to two or more purchasers
D) willful monopolizing
The ________ is a federal statute that permits the SEC to obtain a civil penalty of up to
three times the illegal benefits received from insider trading.
A) Securities Act
B) Securities Exchange Act
C) Insider Trading Sanctions Act
D) SEC Rule 506
Which of the following is true of a derivative action?
A) A settlement of a derivative action requires court approval.
B) A shareholder’s successful derivative action entails the damages to be awarded solely
to the shareholder.
C) A derivative action is brought by the corporation against an offending party.
D) A board member who causes harm to the corporation is legally protected from a
derivation action.
Jane and Will got married three years ago, after which Will moved into Jane’s ancestral
home. Over the three years of their marriage, Jane bought a new car for Will and a
farmhouse in the suburbs from her own funds. The farmhouse was registered jointly in
their names. Will invested heavily in stocks and bonds from their collective income and
transferred his existing stocks and bonds in Jane’s name. In the event of Jane and Will
opting for a divorce, the ________ would be considered separate property for Jane.
A) ancestral home
B) new car
C) stocks and bonds
D) farmhouse
Which of the following is true about a sale or return contract?
A) A buyer cannot resell the goods received under the contract.
B) A seller need not accept the goods returned by a buyer.
C) A sale is considered final if the buyer fails to return the goods within a reasonable
time.
D) A sale is made on an approval by trial basis.
The corporation that is absorbed in an acquisition and ceases to exist after the
acquisition is a ________ corporation.
A) parent
B) surviving
C) merged
D) share
Authorized shares that have not been sold by the corporation are known as ________
shares.
A) issued
B) unissued
C) outstanding
D) liquidated
Which of the following statements best describes re-direct examination?
A) The plaintiff’s attorney questions the witness who was questioned by the defendant’s
attorney.
B) The plaintiff’s attorney questions the witness before he or she is questioned by the
defendant’s attorney.
C) The defendant’s attorney questions the witness who was questioned by the plaintiff’s
attorney.
D) The defendant’s attorney questions the witness before he or she is questioned by the
plaintiff’s attorney.
Under the written confirmation rule, a buyer cannot raise the Statue of Frauds against
the enforcement of a contract if ________.
A) the written confirmation is not sufficient to assume an acceptance to the contract
B) he does not have a reason to know the contents of the confirmation
C) he fails to object to the contract within 10 days of receiving the confirmation
D) the seller does not send a written confirmation of the sale after contracting
________ is a stipulation in an offer that says the acceptance must be by a specified
means of communication.
A) Option contract
B) Mirror image rule
C) Implied authorization
D) Express authorization
If a hurricane destroys a mansion that has been listed for sale, the offer is automatically
terminated due to ________.
A) supervening illegality
B) death or incompetency of the offeror
C) destruction of the subject matter
D) lapse of time
Jason is a Hispanic scriptwriter from Brazil who works for a television show on an
American cable network. He was fired after the producer came to know that Smith was
of a certain faith. The producer’s official reason for this termination was that as Smith
was based in Brazil, communication was a problem. This is an example of ________
discrimination that violates Title VII of the Civil Rights Act.
A) racial
B) religious
C) national origin
D) disparate-impact
Which of the following would be considered a stationary source of air pollution?
A) aircrafts
B) oil rigs
C) cargo ships
D) automobiles
Which of the following is a form of unprotected speech?
A) offensive speech
B) defamatory language
C) commercial speech
D) political speech
Which of the following is a characteristic of a valid contract?
A) A valid contract cannot contain promises.
B) The parties must have the contract’s terms approved by the appropriate court for it to
be valid.
C) A court will enforce a contract if a party does not voluntarily perform.
D) There need not be mutual assent by all the parties involved in a contract.
Kenneth purchased a car from his local dealership, Quartent Cars. However, since the
car was not available in the color that Kenneth favored, the sales contract stipulated that
Kenneth could immediately pick up the car from a nearby warehouse it was housed in.
The warehouse was owned by Mr. Henderson. Kenneth received the document of title
for the car upon payment and presented it to Mr. Henderson around a week later. But
Mr. Henderson informed Kenneth that the car was damaged during a fire in the
warehouse. If Mr. Henderson had refused the document of title provided by Kenneth,
who would have borne the risk of loss to the car?
A) Jointly by Quartent Cars and Kenneth.
B) Only by Kenneth.
C) Only by Quartent Cars.
D) Only by Mr. Henderson.
A(n) ________ is an instrument that describes a person’s ownership interest in a piece
of real property.
A) title insurance
B) deed
C) license
D) easement
An agreement that an offeror will not sell his property for a specified period subsequent
to the offeree paying consideration to the offeror is referred to as a(n) ________.
A) unequivocal acceptance
B) contract of adhesion
C) option contract
D) firm offer
Which of the following is true of a joint venture?
A) The parties to a joint venture are considered as limited partners.
B) Both parties to a joint venture have equal rights to manage the venture.
C) A joint venture is a partnership that lasts for multiple projects.
D) Parties to a joint venture are exempt from fiduciary duties to each other.
Which of the following is true of trademarks?
A) Words that are descriptive but have no secondary meaning cannot be trademarked.
B) Trademarks are subject to the fair use doctrine that allows lawful use of another’s
trademark.
C) Marks that resemble an already registered mark can be trademarked.
D) The coat of arms of a nation can be registered as a trademark with the U.S. Patent
and Trademark Office.
Which of the following transactions represents a conditional sale?
A) entrustment sale
B) good faith sale
C) auction sale
D) consignment