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Strong Corp. and Marginal, Inc. are competitors. Strong plans to acquire ownership of
Marginal. Which of the following, if true, would help bolster a conclusion that the
acquisition is lawful under Clayton Act Section 7?
A. That the industry in which Strong and Marginal are competitors has become
increasingly concentrated in recent years.
B. That Strong has had a history of acquiring ownership over competitors in order to
increase its market share.
C. That Strong has a 35 percent market share now and would only be increasing its
market share by another 10 percent by acquiring Marginal.
D. That Marginal is teetering on the brink of bankruptcy and only Strong is interested in
purchasing Marginal.
Joe Smith obtains a credit card from First National Bank. The credit card is what type
of credit?
A. Secured credit
B. Unsecured credit
C. Mortgage
D. Subsidized loan
Which of the following is included in the bylaws?
A. The purpose of the corporation.
B. The machinery for the transfer of shares.
C. The par value of shares of the corporation.
D. The duration of the corporation.
Fun Foods fraudulently induces Holly to buy a household products franchise by grossly
misstating the average revenues of its franchisees. She discovers the misrepresentation
after she has resold some products that she has received but before she has paid Fun
Foods for the products. Holly wants to cancel the franchise contract on the basis of the
fraud. What is the remedy available to her?
A. Promissory estoppel
B. Duty of good faith
C. Executory contract
D. Quasi-contract
Jim's contract with Frank obligated Jim to pay Frank $10,000. Frank properly assigns
the contract to Abel. At that time, Abel notifies Jim about the assignment. Jim, however,
forgets and pays the $10,000 to Frank. By this time, Abel is screaming for his money.
However, by then, Frank goes into bankruptcy. In this case:
A. Jim is liable to Abel for $10,000.
B. Abel is out of luck because Jim performed his obligation by paying Frank.
C. Jim is liable to Abel not for the $10,000, but for his breach of the implied warranty
that the assignor is solvent.
D. Abel is out of luck because his notification was oral rather than written.
What Constitutional Amendment protects employees from drug and alcohol testing at a
private employer?
A. Fourth Amendment - Search and seizure rule
B. Fifth Amendment - Right to a speedy trial
C. Fourteenth Amendment - Equal protection rule
D. There is no constitutional protection since it is a private employer
A(n) ______ shields the author of a defamatory statement regardless of his/her
knowledge, motive, or intent.
A. demurrer
B. transferred intent
C. intentional tort
D. absolute privilege
Which of the following is true about a limited partnership?
A. A limited partnership has difficulties raising large amounts of capital.
B. A limited partnership can be created only by complying with a state statute
permitting limited partnerships.
C. A limited partnership cannot be transferred to another person.
D. Limited partners are liable for the obligations of the limited partnership after making
their capital contributions.
Emmy, Shane, and Rusty are partners of the firm Esha Associates. Rusty nonwrongfully
dissociates himself from the partnership. Under these circumstances, Rusty will not be
liable to the creditors for the liabilities incurred while he was partner only:
A. if all the partners consent to it.
B. if there is an agreement.
C. if there is a court order.
D. by novation.
What do courts begin their interpretation of a clearly worded statute with?
A. Its plain meaning
B. Its legislative history
C. Records of legislative debates
D. Its different amendments
A _____ is owned by shareholders who elect a board of directors to manage the
business.
A. limited liability company
B. corporation
C. partnership
D. sole proprietorship
An instrument payable on demand is:
A. not payable before the date of the instrument.
B. payable before the date of the instrument.
C. not payable after the date of the instrument.
D. nonnegotiable without a date.
Which of the following is defined to mean "honesty in fact" in performing the duties
assumed in the contract or in carrying out the transaction?
A. Course of dealing
B. Usage of trade
C. Caveat emptor
D. Good faith
Which of the following is a nonwrongful kind of member dissociation from an LLC?
A. Dissociation caused by a member being a debtor in a bankruptcy.
B. Dissociation caused by a member's death due to a motor vehicle accident.
C. Dissociation caused by the judicial expulsion of a member.
D. Dissociation caused by a member withdrawing from an LLC before the LLC's term
has expired.
Which of the following actions or statements by a debt collector would be least likely to
violate the Fair Debt Collection Practices Act?
A. Contacting the debtor's adult son to determine whether the debtor has the financial
resources to pay the debt.
B. Telling the debtor that a failure to pay the debt on time will lead to her
imprisonment.
C. Repeatedly telephoning the debtor at home after she arrives home from work.
D. Telling the debtor the exact legal course of action the creditor intends to take if the
debt is not paid on time.
Morgan is a silent partner at Mathers & Sons, a general partnership. Because he is only
a silent partner, he does not have:
A. the duty to contribute capital to the firm.
B. the duty to serve in the day-to-day operations of the firm.
C. the same liability for partnership debts as other partners.
D. the duty to act within actual authority.
The transferor of which of the following instrument cannot disclaim transfer
warranties?
A. Check
B. Promissory note
C. Draft
D. Invoice
_____ creates three important periods of time in the life of a securities offering: (1) the
pre-filing period, (2) the waiting period, and (3) the post-effective period.
A. Section 3 of the 1934 Act
B. Section 17 of the 1933 Act
C. Section 12 of the 1934 Act
D. Section 5 of the 1933 Act
Which of the following gives the president executive power?
A. Congress
B. The Supreme Court
C. The U.S. Constitution
D. State legislatures
Which of the following powers of administrative agencies is largely ministerial in
nature?
A. Performing routine duties that are imposed by law.
B. Conducting proceedings to determine regulatory violations.
C. Creating rules that specify how the agency will conduct itself.
D. Gathering information about business practices and activities.
The general common law rule on contract modifications holds that an agreement to
modify an existing contract requires a(n):
A. necessary increase in the value of the exchange.
B. inclusion of a new party to the contract.
C. new and independent consideration.
D. economic exchange of substantial value.
The time period within which a customer must report unauthorized customer signatures
to the bank to get his account recredited is:
A. fourteen days.
B. six months.
C. one year.
D. three years.
Shareholders may bring a suit on behalf of the corporation against the board of
directors. Such a suit is generally called a(n) _____ suit.
A. class action
B. derivative action
C. shareholder action
D. injunction
Jane and her brother each own a interest in certain real property as tenants in common.
Jane's interest:
A. is considered personal property.
B. will pass to her brother by operation of law upon Jane's death.
C. will pass upon her death to the person Jane designates in her will.
D. may not be transferred during Jane's lifetime without her brother's consent.
Which of the following scenarios would justify eviction proceedings by a landlord?
A. A tenant has abandoned the premises without any notice.
B. A tenant has not paid rent for 5 consecutive months.
C. A tenant has asked for the refund of the security deposit.
D. A tenant wants to make necessary repairs in the premises.
Ordinarily, an agent is not liable for unauthorized acts made on behalf of a principal if:
A. the third party has no knowledge about the principle's identity.
B. the third party knows that the principle lacks legal capacity.
C. the principal eventually ratifies the contract.
D. the principal is undisclosed.
When the Federal Trade Commission conducts an administrative hearing, the presiding
judge in this hearing is a(n):
A. administrative law judge.
B. federal district court judge.
C. arbitration judge.
D. FTC commissioner.
Under the default rules of the ULPA, a limited partner who wishes to withdraw from a
limited partnership has:
A. the power but not the right to withdraw.
B. the right but not the power to withdraw.
C. neither the power nor the right to withdraw.
D. both the power and the right to withdraw.
Why does traditional contract law view any kind of an attempt by offerees to change
terms as constituting a counteroffer?
A. A material change to an original offer is disfavored by traditional contract law.
B. It changes the degree of the offeror's interest to contract.
C. Such an action implies a rejection of the offer by the offeree.
D. It puts the offeree in a dominant position which is contrary to traditional contract
laws.
Which of the following statements about the Employee Retirement Income Security Act
(ERISA) is accurate?
A. ERISA does not impose fiduciary duties on pension fund managers.
B. ERISA does not allow pension plan participants to sue employers.
C. ERISA does not require employers to establish or fund pension plans.
D. ERISA does not guarantee employee participation in pension funds.
What bodies of law govern contracts in the United State?
A. Article 2 of the UCC
B. Common law related to contracts
C. The United Nations Declaration on Human Rights
D. Both A & B
