Which of the following is part of an administrative agency’s power to investigate?
a. an investigation to determine whether additional administrative rules need to be
adopted
b. an investigation to ascertain facts with respect to a particular suspected or alleged
violation
c. an investigation to determine whether the defendant in a proceeding before the
agency is complying with its final order
d. all of the above
When consigned goods are sold by a factor:
a. title passes when the consignor approves the sale.
b. title passes even if the goods have been stolen, provided the factor is ignorant of this
fact.
c. the sale passes the title of the owner to the buyer.
d. strict compliance with the Federal Factors Act is required to pass title.
The defense of noncompliance may be raised:
a. by the parties to the oral contract.
b. by third parties such as an insurance company or the IRS.
c. both a. and b.
d. neither a. nor b.
An unqualified indorser who receives consideration for the indorsement impliedly
warrants that:
a. the warrantor is a person entitled to enforce the instrument.
b. all signatures on the instrument are authentic and authorized.
c. the instrument has not been altered.
d. all of the above.
An agreement to pay reasonable additional compensation to a contractor for the
performance of a pre-existing contract when the contractor faces extraordinary
circumstances caused by unforeseen difficulties is called a:
a. good-faith adjustment.
b. bribe.
c. compensatory allowance.
d. relief payment.
Which federal agency has primary responsibility for enforcing environmental laws?
a. the Environmental Protection Agency
b. the Council of Environmental Quality
c. the Superfund Panel
d. none of the above
Which of the following does not result in dissolution of the partnership by operation of
law?
a. The expulsion of a partner.
b. Bankruptcy of the partnership or of one of the partners.
c. The death of a partner.
d. All of these will result in dissolution of the partnership by operation of law.
Owners of mask works are entitled to the exclusive right to reproduce and distribute
their products under U.S. law for a period of:
a. 10 years.
b. 20 years.
c. 28 years.
d. the life of the creator plus 70 years.
All of the following statements refer to an element of fraud except:
a. the defendant desired to obtain a financial benefit.
b. the defendant made a false statement.
c. the defendant knew that the statement was false or was recklessly indifferent
regarding its truth.
d. the defendant intended for the other party to rely on the false statement.
The due process clause:
a. allows the U.S. government to take private property without due process.
b. allows a state to take private property without due process.
c. provides a guarantee of protection against loss of rights or property without the
chance to be heard.
d. does not apply to state governments.
The Utilitarian Theory:
a. holds that we all act in our own self-interest.
b. is based on doing the most good for the most people.
c. resolves ethical dilemmas according to time and place.
d. believes that solving ethical dilemmas requires training
The owners of a limited liability company are known as:
a. members.
b. partners.
c. contributors.
d. electors.
Joan brought her car into Ace Service Station for a tune-up. After tuning up the car, Ace
(the owner of the service station) decided to visit his mother. Ace drove Joan’s car. Ace
was following all safety precautions when a negligent driver without insurance struck
Joan’s car. Joan sued Ace for the damages to her car. The probable result is:
a. Ace will win, since he was taking reasonable care of the bailed goods.
b. Ace will win, since the bailee has the right to use the bailed goods.
c. Joan will win, since the harm was sustained during the bailee’s unauthorized use of
the property.
d. Joan will win, since bailees are absolutely liable for bailed goods in their possession
and control.
A parents’ group in a small town formed an association to run a little league baseball
team. Tom and Mary were members of the association, which was never incorporated.
Tom was elected president of the association and ordered some uniforms for the team.
When the uniforms were not paid for, the baseball supply company sued Tom and Mary
for the contract price. Regarding the liability of Mary:
a. Mary is liable because she is a member of an unincorporated association.
b. Mary is not liable because members of an unincorporated association have no
personal liability.
c. Mary is liable if she authorized or ratified the purchase.
d. Mary is liable but only for 50% of the outstanding debt.
Which of the following types of contracts might be unenforceable as contrary to public
policy?
a. a contract that is contrary to the protection of the public welfare, health, or safety
b. a contract that is contrary to the protection of the person
c. a contract that is contrary to the protection of recognized social institutions
d. all of the above
A provision in a residential lease excusing a landlord from liability for damage caused
by water, snow, or ice is __________.
a. enforceable
b. enforceable, but only in those areas of the United States that are unusually exposed to
adverse weather conditions
c. void
d. voidable
The Freedom of Information Act:
a. is to be strictly construed to prevent unauthorized disclosures.
b. has too many exemptions to be useful.
c. is intended to subject agency action to public scrutiny.
d. puts the burden of proof upon the person requesting the information.
A person lacks contractual capacity if:
a. the person is a chronic alcoholic.
b. the person is a drug addict.
c. because of mental impairment, the person does not comprehend that a contract is
being made or understand its consequences.
d. all of the above.
Prohibited transactions by a partner without the consent of other partners include:
a. a contract that makes it impossible for the firm to conduct its usual business.
b. submitting controversies of the firm to arbitration.
c. making a general assignment of firm property for the benefit of creditors
d. all of the above.
A public corporation is:
a. also know as a public utility.
b. organized for charitable and benevolent purposes or for purposes of finance, industry,
and commerce.
c. established for governmental purposes and for the administration of public affairs.
d. all of the above.
If instrument is negotiable, it can be:
a. paid on demand.
b. cancelled by the maker.
c. assigned by contract.
d. transferred by negotiation.
A significant difference between an administrative agency hearing and a court hearing
is that:
a. a binding decision can only be made by an agency.
b. there is no right of trial by jury before an agency.
c. a court hearing allows no public intervention.
d. a court can enforce its decision.
A contract that is deemed to be too harsh or oppressive to one of the contracting parties
may be unenforceable under the concept of:
a. unilateral influence.
b. bilateral influence.
c. unconscionability.
d. conscionability.
A limited liability company’s operating agreement:
a. is equivalent to the bylaws of a corporation.
b. must be in writing.
c. does not cover member compensation..
d. all of the above.
Generally, which power(s) does (do) an administrative agency possess?
a. all powers necessary to effectively perform the duties entrusted to it
b. legislative only
c. judicial only
d. executive only
A sole proprietorship is taxed:
a. only on a personal.
b. only on the corporate level.
c. on a personal and a corporate level.
d. none of the above.
Price regulations:
a. may be imposed by the national government.
b. may be imposed by state governments.
c. include rules regarding credit terms and other charges.
d. all of the above.
Which of the following statements is true?
a. Felonies are punishable by a minimum of six months in prison.
b. Felonies involve white-collar crimes only.
c. Felonies are more serious than misdemeanors.
d. All of the above.
A __________ insider is someone retained by the corporation for professional services,
such as an attorney, accountant, or investment banker.
a. professional
b. corporate
c. temporary
d. virtual
A shareholder has:
a. an absolute right to dividends.
b. a right to dividends when declared.
c. a right to insist that dividends be declared.
d. to share equally all dividends with fellow shareholders.
__________ power relates to a firm’s ability to control price and exclude competitors.
a. Market
b. Competitive
c. Product
d. Production
If a contract contains a delivery term of __________, the seller’s responsibility is to get
the goods to the buyer.
a. FOB place of shipment
b. FOB place of destination
c. CIF place of shipment
d. CIF place of destination
Unless otherwise agreed, the proper place for the delivery of goods is:
a. the buyer’s place of business.
b. the seller’s home.
c. a delivery service selected by the seller.
d. the seller’s place of business.
I believe that I own a very valuable vase. I tell you this information and state that I will
sell it to you for $800. I sell the vase to you, and you later find out that the vase is worth
only $200. Fraud:
a. has occurred.
b. has not occurred.
c. can always be based upon a statement of opinion or value.
d. none of the above.
In the absence of a statute requiring a writing, a contract may be oral or written.
A prospectus sets forth the key information contained in the registration statement.
In most states, statutes limit or provide a method of limiting the common law liability
of a hotelkeeper.
Stockbrokers are eligible to file Chapter 11 bankruptcy.
Those uniform state laws that have been adopted by individual states were first written
by Congress.
The tort of invasion of privacy has some application to cyberspace communication.
A constitution is the written document that establishes the structure of the government
and its relationship to the people.
Any warranty that does not provide the complete protection of a full warranty is called
a warranty in breach.
To determine whether the defendant is liable for negligence, a reasonable person
standard is employed.
The United States Supreme Court generally has held that vertical merger agreements
should not automatically be condemned as an unlawful restraint of interstate commerce
merely because they create the potential to monopolize it.
Federal law now recognizes the validity of electronic signatures.
George was the maker of a written promissory note that stated that $500 would be paid
on the sale of George’s automobile. George initialed the note instead of writing his full
name. The promissory note stated that it would be payable six months from the date.
The promissory note was not dated. You now have come into possession of this note. Is
this note negotiable? Discuss the elements of negotiability and whether each one has
been met.
An anticipatory repudiation must be clear, absolute, and unequivocal.
Franklin, a hobby-shop supplier, and Gordon, a hobby-shop owner, entered into a
contract that provided that Franklin would sell Gordon fifty World War II battleship
models at Franklin’s cost of $2.95 each, plus a reasonable profit. Gordon brought suit to
enforce the contract against Franklin, who refused to deliver the models. Franklin
claimed that there was no contract because of indefiniteness. Is Franklin correct?
Inference occurs when a landlord prevents a tenant from accessing the property.
Under the Revised Uniform Limited Partnership Act, limited partners may engage in
certain ‘safe harbor” activities without losing their protection from liability. These
activities include being a contractor for, or an agent or employee of, the limited
partnership or of a general partner.