An offer to perform is known as a(n) __________.
a. rendering
b. offering
c. tinder
d. tender
An employer may be justified in discharging an employee because of the employee’s:
a. nonperformance of duties.
b. incompetency.
c. serious misconduct.
d. all of the above.
Legal principles expressed for the first time in court decisions are called:
a. statutory law.
b. stare decisis.
c. common law.
d. precedents.
A seller’s right to retain possession of goods until the seller has been paid is called a:
a. seller’s lien.
b. buyer’s lien.
c. merchandise estoppel.
d. nonpayment tort.
An involuntary petition in bankruptcy may not be commenced against:
a. a nonprofit corporation.
b. an individual.
c. a for-profit corporation.
d. any of the above.
The Uniform Commercial Code contains a statute of frauds rule relating to sales of
personal property, specifically:
a. goods.
b. chattel paper.
c. real property.
d. none of the above.
The Ex-IM Bank:
a. helps U.S. manufacturers export goods by provides loan guarantees.
b. receives funding from the U.S. Treasury to help sustain its operations.
c. has a financing cap of $100 billion.
d. all of the above.
Crimes are generally defined and their punishments specified by:
a. trial court judges.
b. appellate judges.
c. codes and statutes.
d. the United States Constitution.
What is an employer defense to a disparate impact charge?
a. The employer did not intend to discriminate.
b. The employment practice is job-related and consistent with business practice.
c. The disparate impact was not the result of extreme recklessness or gross negligence
on the part of the employer.
d. The practice is widespread and accepted in the industry.
Which of the following is a preferential transfer?
a. a transaction for present consideration
b. a payment in the ordinary course of business
c. both a. and b. are preferential transfers
d. neither a. nor b. are preferential transfers
Which of the following is an incorrect statement about directors?
a. Their eligibility requirements may be found in the bylaws.
b. Bylaws may require that directors be shareholders in the corporation.
c. The board of directors has authority to manage the corporation.
d. Courts will interfere with the board’s discretion when they disagree with its actions.
Which of the following parties has the power to bind an organization to a contract?
a. A soliciting agent for the organization.
b. A contracting agent for the organization.
c. A sales agent for the organization.
d. None of the above.
Clark is the senior payroll clerk for Gonzalez Corporation. When preparing the weekly
payroll, Clark added the name of Simmons, a fictitious employee, to the payroll list.
Lewis, the treasurer of the corporation, signed the payroll checks and delivered them to
Clark. Clark distributed checks to the correct employees and kept the one made payable
to the order of Simmons. Clark indorsed the name of Simmons to the check, cashed it at
Diamond Check Cashing. In this situation:
a. an indorsement was not necessary to negotiate the instrument.
b. the Gonzalez Corporation can seek recovery against Diamond Check Cashing.
c. the forged signature is given the same effect as though it had been authorized by the
named payee.
d. Clark is not subject to civil or criminal liability.
What type of damages is recoverable when the defendant’s tortious conduct is
accompanied by fraud, malice, or willful or wanton conduct?
a. compensatory
b. consequential
c. nominal
d. punitive
Penalties for crimes are:
a. always paid to the government.
b. always paid to the victim(s).
c. shared equally between the government and the victim(s).
d. subject to forfeiture.
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
The parol evidence rule may not apply if:
a. the contract is materially incomplete.
b. the parties disagree on the meaning of the contract.
c. there is no ambiguity regarding the terms of the contract.
d. one party is unable to perform the contractual obligations.
The widest range of tort liability arises in the area of:
a. negligence.
b. absolute liability.
c. violation of statute.
d. assumption of risk.
The FTC franchise disclosure statement must contain:
a. the business experience of the franchisor and its brokers.
b. any current and past litigation against the franchisor.
c. the grounds for termination of the franchise.
d. all of the above.
An arrangement in which the owner of a trademark licenses others, under specified
conditions or limitations, to use the trademark in purveying goods or services is a(n):
a. corporation.
b. limited partnership.
c. unincorporated association.
d. none of the above.
A __________ agent is authorized by the principal to handle a definite business
transaction or to do a specific act.
a. special
b. general
c. secret
d. universal
The Semiconductor Chip Protection Act provides that an infringer will:
a. be liable for actual damages
b. forfeit its profits to the owners
c. both a. and b.
d. neither a. nor b.
Tying:
a. is a violation of the Sherman Act.
b. occurs when sellers require buyers to purchase an unwanted product to get a wanted
one.
c. both of the above.
d. none of the above.
The people in a corporation responsible for the management of the business are the:
a. partners.
b. shareholders.
c. board of directors.
d. licensees.
Counterfeiting is:
a. a federal crime only.
b. a state crime only.
c. both a federal and state crime.
d. none of the above.
If the principal revokes the agency:
a. the agent’s authority to act for the principal is terminated immediately.
b. the right of the agent to bind the principal to third persons generally ends
immediately upon the termination of the agent’s authority.
c. the termination is not effective until notice is given to third parties.
d. all of the above.
Mike Reilly suffered the loss of his home as a result of a chimney fire that was caused
by the ignition of soot in the chimney. This fire would be described as:
a. a friendly fire.
b. arson by negligence.
c. a strict liability fire.
d. a hostile fire.
Under the __________doctrine, the holder has taken so many instruments from its
transferor or is so closely connected with the transferor that any knowledge the
transferor has is deemed transferred to the holder, preventing holder in due course
status.
a. constructive partnership
b. close-connection
c. symbiotic relationship
d. collaborative relationship
A party to a contract may be:
a. an individual.
b. a partnership.
c. a corporation.
d. all of the above.
Which of the following is not a factor that may lead to “piercing the corporate veil” and
imposing liability on corporate owners (shareholders)?
a. grossly inadequate capitalization of the corporation
b. formation of the corporation to avoid personal liability for business obligations
c. formation of the corporation to perpetuate a fraud or conceal illegality
d. shareholder diversion of corporate funds or assets
The two principal legal theories under which a plaintiff may prove a case of unlawful
employment discrimination are disparate treatment and disparate impact.
An illusory promise creates a bilateral contract.
Under the Bankruptcy Reform Act, the allowable homestead exemption for debtors was
significantly reduced.
Those uniform state laws that have been adopted by individual states were first written
by Congress.
Suretyship and guaranty transactions have the common feature of a promise to answer
for the debt or default of another.
Title to land may be acquired by adverse possession.
When large-size enterprises plan to merge, they must give written notice to the
Interstate Commerce Commission.
“Right-to-know” laws in some states guarantee employees the right to know if there are
hazardous substances in their workplaces.
In an administrative hearing, an administrative law judge hears the complaint and has
the authority to swear witnesses, take testimony, make evidentiary rulings, and make a
decision to recommend to the administrative agency heads for action.
Jurisdiction over bankruptcy proceedings is vested in the federal district courts.
If either the offeror or offeree dies or becomes mentally incompetent before the offer is
accepted, the offer is automatically terminated.
The federal court system consists of three levels.
The term apparent authority is used when an appearance of authority has been created
by a principal, but actual authority does not exist.
A limited partner may never sue the business.
Under the United States Supreme Court’s definition, an investment contract exists if the
following elements are present: (1) an investment of money, (2) a common enterprise,
and (3) an expectation of future profits from the efforts of others.
Under the Clean Water Act, the EPA has developed effluent guidelines, which are
ranges for discharges organized according to industrial groups and for specific plants in
each of these groups.
Jane asserts she has a legal right. Jane is really saying she has an obligation to perform
or refrain from performing an act.