Pulse Corp. maintained a warehouse where it stored its manufactured goods. Pulse
received an order from Star. Shortly after Pulse identified the goods to be shipped to
Star and before moving them to the loading dock, a fire destroyed the warehouse and its
contents. With respect to the goods, which of the following statements is correct?
A. Pulse has title but no insurable interest.
B. Star has title and an insurable interest.
C. Pulse has title and an insurable interest.
D. Star has title but no insurable interest.
Which of the following is applied in a lawsuit between two private parties?
A. Criminal law
B. Civil law
C. Procedural law
D. Public law
_____ is the change in the attitudes or values of convicted offenders so that they are not
inclined to commit future offenses.
A. Recidivism
B. Rehabilitation
C. Retribution
D. Probation
_____ is a financial management tool offered by banks and by third-party,
Internet-based companies.
A. Account management
B. Check management
C. Account aggregation
D. Check scraping
Defending against a federal district court suit by Paul, Dan claims that Paul has sued
him in the wrong federal district court. Dan has raised a question of:
A. long-arm jurisdiction.
B. in personam jurisdiction.
C. venue.
D. standing.
Ian Kendler makes Brian Hyson an offer for a plot of land. In the offer, Kendler
stipulates that the acceptance of the offer must be sent by registered mail but Hyson
mails his acceptance through the regular postal service. Which of the following is true?
Assume that the Restatement (Second) of Contracts does not apply.
A. There is no acceptance and no contract.
B. A contract was formed at the time Hyson dispatched the letter.
C. A contract was formed at the time Kendler received the letter.
D. The acceptance is invalid because the contract does not relate to sale of goods.
A partner’s contribution is also called _____.
A. partnership property
B. partnership liability
C. partnership cash flow
D. partnership capital
Which source of law requires the acceptance to be a “mirror image” of the offer in order
to form a contract?
A. Common Law
B. Constitutional Law
C. Natural Law
D. Theocratic Law
_____ of the Robinson-Patman Act makes it illegal for a buyer knowingly to induce or
receive a discriminatory price in violation of Section 2(a) of the Robinson-Patman Act.
A. Section 2(f)
B. Section 2(c)
C. Section 2(d)
D. Section 2(e)
A newspaper advertisement made to the general public:
A. usually is an offer.
B. can be revoked by using a similar newspaper advertisement.
C. can only be rejected by using a similar newspaper advertisement.
D. is a firm offer that cannot be revoked.
Ace Computers (AC) is a manufacturer. It entered into a contract with a retailer,
Reliable Computer (RC) for the sale of 100 new XYZ model computers at $1,000 each,
for delivery in 6 months. AC would thus make a profit of $50,000. Six months later
however, the XYZ model has become almost obsolete; its market price is only $100 at
that time. RC refuses to accept or pay for those computers. If AC sues, how much
should it be entitled to in damages? (Ignore any incidental expenses or cost savings to
AC.)
A. Nothing; when the XYZ model became almost obsolete, this excused RC from the
contract.
B. $50,000, the profit AC would have made had RC not breached the contract.
C. $90,000, the difference between market price and contract price.
D. $140,000, the lost profit plus the difference between market price and contract price.
Today, most artisans’ liens:
A. have been repealed by statute.
B. are handled by Article 7 of the UCC.
C. require that the artisan have possession of the debtor’s property.
D. apply whether or not the owner consented to the work performed by the artisan.
Which of the following is NOT a defense specified in Revised Article 3?
A. By way of damages
B. Real defenses
C. Claims to an instrument
D. Claims in recoupment
Which of the following could be considered as an “insider” under the 1934 Securities
and Exchange Act?
A. Directors of the corporation
B. Any employee entrusted with information that is being held secret to the public
C. The Secretary of State
D. Both A & B
Perfection by public filing of a financing statement in the appropriate public office
serves as a(n) _____ notice to the world.
A. express
B. implied
C. constructive
D. public
Joshua, Rachel, and Daniel formed an LLC to manage their accounting business. Joshua
contributed $20,000 to the LLC. Rachel and Daniel contributed $40,000 each. A year
later, the LLC needed capital injection and Joshua lent a credit of $50,000. However,
nothing could save the LLC and it entered bankruptcy and got dissolved. Joshua was
the only creditor of the LLC. If a total of $50,000 was obtained after the sale of all the
assets of the dissolved LLC, how much will Rachel get?
A. $0
B. $10,000
C. $50,000
D. $25,000
Under the Bankruptcy Act’s exemption provisions:
A. the debtor must choose either the state or the federal exemption scheme.
B. the full value of one’s motor vehicle is exempt.
C. federal exemptions defeat state exemptions in case of a clash between them.
D. state exemption laws that exceed the federal limits (i.e., that are too generous) are
void.
If unforeseen conditions cause a partial inability to make delivery of the goods and thus
make performance impracticable, then:
A. the seller is readily excused from making delivery.
B. the seller can unilaterally annul the contract.
C. the seller must allocate production in any fair and reasonable manner among his
customers.
D. the buyer is required to fully take the risk of loss.
Patrick sues Derek for negligence. At the trial, it is determined that Patrick’s negligence
was 40% responsible for his injury, and Derek’s negligence was 60% responsible.
Patrick’s losses total $10,000. Under a pure comparative negligence system, he will
recover:
A. nothing.
B. $4000.
C. $6000.
D. $10,000.
Brown & Co., a CPA, issued an unqualified opinion on the financial statement of its
client, King Corp. Based on the strength of King’s financial statements, Safe Bank
loaned King $500,000. Brown was unaware that Safe would receive a copy of the
financial statements or that they would be used in obtaining a loan by King. King
defaulted on the loan. If Safe commences an action for common law fraud against
Brown, then to be successful, Safe must prove that in addition to other elements it:
A. was in privity of contract with Brown.
B. was not contributorily negligent.
C. was in privity of contract with King.
D. justifiably relied on the financial statements.
The right of minors to avoid a contract as a means of protecting themselves against their
own improvidence and against overreaching adults is called:
A. emancipation.
B. ratification.
C. adjudication.
D. disaffirmance.
Toby, an Ohio real estate broker, misrepresented to Allen that Toby was licensed in
Michigan under Michigan’s statute regulating real estate brokers. Allen signed a
standard form listing contract agreeing to pay Toby a 6% commission for selling Allen’s
home in Michigan. Toby sold Allen’s home. Under the circumstances, Allen is:
A. not liable to Toby for any amount because of the rule of mirror image which needs to
be fulfilled for creating a binding contract.
B. not liable to Toby for any amount because Toby violated the Michigan licensing
requirements.
C. liable to Toby only for the value of services rendered under the quasi-contract theory.
D. liable to Toby for the full commission under the promissory estoppel theory.
When the insurer asks the court to determine whether the insurer owes obligations to
the insured under the policy in connection with the particular liability claim made
against the insured by the injured third party, it is filing a(n):
A. equity of redemption.
B. advance directive.
C. reservation of rights notice.
D. declaratory judgment.
How long does it take before a certificate of dissociation is effective to prevent liability
as a partnership is winding down?
A. 90 days
B. 180 days
C. 365 days
D. 30 days
A Totten trust is created when a person:
A. deposits money in a bank for the benefit of another.
B. directs in his will that a trust be created upon that person’s death.
C. executes the creation using a holographic will.
D. opens a trust only for the benefit of poor people.
Which of the following statements about standardized form contracts is false?
A. Frequently, the terms of standardized contracts are negotiable.
B. They are used both online and offline.
C. They are contracts that are preprinted by one party and presented to the other party
for signing.
D. In most situations, the party who drafts and presents the standardized contract is the
party who has the most bargaining power in the transaction.
Which of the following has been recognized by the courts as a possible justification for
tying agreements?
A. The seller is a new business in the tied product category.
B. The tying product is not available for purchase without the agreement.
C. The tying agreement involves two separate and distinct items.
D. The seller is the market leader in the tied product category.
Mr. Orange is an accountant at a publically traded corporation. In order to meet the
standard of the skill of a professional account what should Mr. Orange have knowledge
of?
A. Calculus and trigonometry
B. Generally accepted accounting principles (GAAP)
C. The Professional Rules of Responsibility for Attorneys
D. The advisory opinions this year of the Internal Revenue Service (IRS)
National bank is reluctant to lend money to James and takes a note from him because of
his shaky financial condition. However, the bank is willing to lend money to James if he
signs the note and a friend also signs the note. Here the friend serves as the:
A. deponent.
B. accommodation party.
C. fiduciary.
D. non-joinder.
In the case of _____, a buyer takes possession of the property, pays the taxes, insures
the property, and assumes several obligations of an owner. However, the seller keeps
legal title and does not turn over the deed until the purchase price is paid.
A. equity of redemption
B. deed of trust
C. land contract
D. possessory lien
Which of the following meets the requirements of consideration?
A. A promise not to engage in a crime or tort
B. A promise without a binding obligation
C. A promise that involves the exchange of a legal value
D. A promise to do a preexisting duty