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Which of the following is true of a member-managed LLC?
A) Each member has equal rights in the management of the business of the LLC.
B) The member with the highest capital contribution becomes the de facto manager of
the LLC.
C) Any matter relating to the business of the LLC is decided by a unanimous vote of the
members.
D) Shareholders are not allowed to decide matters relating to the business of the LLC.
Jonas enters into an oral contract with Chelsea to lease his house to her for $100,000.
Chelsea pays him $100,000 and moves in. A month later, Jonas learns that his state
requires contracts for the lease of goods with payments of $1,000 or more to be in
writing. Which of the following options does either party have?
A) Jonas can evict Chelsea as the contract does not comply with the Statute of Frauds
and is hence void.
B) The contract cannot be rescinded by either party as it has already been executed.
C) Chelsea can rescind the contract on the grounds of noncompliance with the Statute
of Frauds.
D) Jonas can rescind the contract on the grounds of noncompliance with the Statute of
Frauds.
Frank Carpenter, who runs a charity organization, has been faking his father's signature
on his father's personal checks and writing them in favor of the charity as donations. He
gets hold of the checks from his father's personal assistant, Rhonda Mason, who is also
Frank's friend and the charity's trustee. After faking the signature, Frank gives the
checks to Rhonda to deposit in the bank. But unbeknownst to Frank, Rhonda routes
some of the check money into her own savings account. Frank's father, Dawson,
realizes that money is being withdrawn from his account without his consent. He
suspects his estranged son, Frank, and in order to find out if Frank is involved, Dawson
secretly offers money to the financial accountant of the charity to divulge the charity
organization's financial dealings. The accountant accepts the money and gives access to
the account books. After scrutinizing the financial records, Dawson realizes that Frank
has been swindling him of his money, and the charity itself was being swindled by
somebody from within. With this information, Dawson proceeds to file a suit against his
son. In the above scenario, which criminal activity is Frank engaging in when faking his
father's signature?
A) embezzlement
B) forgery
C) bribery
D) extortion
Which of the following is a perceived disadvantage of Kantian ethics?
A) It treats morality as if it were an impersonal mathematical calculation.
B) It does not allow people to have subjective notions of right and wrong.
C) It is based on universal rules that have no common consensus.
D) It differentiates between the morality one uses to judge others and the morality one
uses on oneself.
What function of the law is being served when passing laws that prohibit discrimination
at workplaces?
A) keeping the peace
B) providing a basis for compromise
C) maintaining the status quo
D) promoting social justice
Which of the following powers of administrative agencies facilitates the investigation
and prosecution of possible violations of statutes and rules?
A) rulemaking power
B) executive power
C) judicial authority
D) licensing
The ________ is an international organization created by a multilateral treaty in 1945 to
promote social and economic cooperation among nations and to protect human rights.
A) United Nations (UN)
B) League of Nations
C) General Agreement on Tariffs and Trade (GATT)
D) World Trade Organization (WTO)
Which of the following is true of an LLC formation?
A) Doctors and lawyers can operate practices as LLCs.
B) An LLC has to be organized in every state that it operates.
C) LC cannot be used to denote an LLC.
D) An LLC is a creation of federal law.
Stare decisis is the doctrine of ________.
A) providing proof to assert a fact in court
B) adhering to legal precedent
C) separating powers between state and religion
D) ensuring all legal rights are provided to a person when otherwise deprived of them
Which of the following is true of an option contract?
A) If the offeree chooses not to buy the property, the consideration paid must be
returned.
B) The consideration paid for the option cannot be applied to the sale price.
C) The death or incompetency of either party terminates an option contract.
D) The offer cannot be revoked during the option period.
Which of the following is true of the right to sue letter issued by the EEOC?
A) It is issued when the EEOC chooses to bring suit.
B) It is issued when the EEOC does not find a violation.
C) It is issued when the complainant is found guilty.
D) It is issued only when the discrimination is racial in nature.
Which of the following is a difference between indictments and information
statements?
A) Indictments are issued before a trial, while an information statement is issued after a
trial.
B) Indictments are issued by a grand jury, while an information statement is issued by a
magistrate.
C) Information statements are issued to dismiss a case before it goes to trial, while an
indictment is issued to bring a case to trial.
D) Information statements are issued without determining guilt, while an indictment is
issued where guilt is evident.
John Harley was on his way home when an assailant stopped his car and threatened to
physically harm him. John can sue the assailant to recover damages for ________.
A) assault
B) battery
C) libel
D) disparagement
________ are the basic governing documents of a corporation which must be drafted
and filed with, and approved by, the state before the corporation can be officially
incorporated.
A) Debt securities
B) Debentures
C) Certificates of authority
D) Articles of incorporation
Of the following, who is considered a Section 16 statutory insider?
A) Sharon Muller, an editor who was tipped by her friend to buy shares of KYU Corp.
B) Robert Morgan, an employee who owns ten percent of all equity security of KYU
Corp.
C) Jim Downey, a graphics engineer who quit KYU Corp. after five years of service.
D) Kate Harris, a legal consultant to KYU Corp.
Which school of jurisprudential thought emphasizes using law as a tool for market
efficiency while solving legal disputes?
A) the Critical Legal Studies School of jurisprudence
B) the Command School of jurisprudence
C) the Sociological School of jurisprudence
D) the Law and Economics School of jurisprudence
Why was the Court of Appeals for the Federal Circuit created?
A) It was created to exercise appellate jurisdiction over members of the armed services.
B) It was created to hear cases that involve federal tax laws.
C) It was created to provide uniformity in the application of federal law in certain areas,
particularly patent law.
D) It was created to hear appeals from intermediate appellate state courts and certain
trial courts.
Which one of the following types of protection does the Fourth Amendment provide to
U.S. citizens?
A) protection from cruel and unusual punishment for a criminal defendant
B) protection from unreasonable search and seizure by the government
C) protection against being tried for the same case twice
D) protection against self-incrimination
________ courts were allowed to give equitable remedies under the English common
law.
A) Merchant
B) Law
C) Chancery
D) Appellate
Which of the following federal administrative agencies enacts the Clean Water Act?
A) the Environmental Investigation Agency (EIA)
B) the Environmental Protection Agency (EPA)
C) the Ministry of Environmental Protection (MEP)
D) the Association of Environmental Professionals (AEP)
Tim has been approached by Kent, his best friend, regarding Tim's credit card debt with
1st Security One. 1st Security One previously informed Kent that Tim was in default on
his credit card debt, and encouraged Kent to tell his friend to "do the right thing." Kent
says he has come to get assurance that Tim will make the required payment. Which of
the following legislation has 1st Security One violated by informing Kent of Tim's
debt?
A) Fair Credit Reporting Act
B) Fair and Accurate Credit Transactions Act
C) Fair Credit and Charge Card Disclosure Act
D) Fair Debt Collection Practices Act
Scissorwire Inc. sells shares of its stock to the public, with each share valued at $16.
After a year, the company incurs a loss and the price of the stock drops to $5 per share.
The company reveals that it had deliberately not registered with the SEC before going
public and that it has no money to pay the investors. Which of the following is true in
this situation?
A) Scissorwire Inc. can register with the SEC at any point after the decline in share
price.
B) The U.S. government can file a criminal lawsuit against Scissorwire Inc. to seek
criminal penalties.
C) The investors were negligent in failing to verify registration prior to stock purchase,
and therefore cannot rescind their purchase.
D) Scissorwire Inc. is liable for violation of the Securities Exchange Act of 1934.
The ________ is an international organization of 160 member nations created in 1995
to promote and enforce trade agreements among member countries and customs
territories.
A) World Trade Organization (WTO)
B) International Monetary Fund (IMF)
C) North American Free Trade Commission (NAFTA)
D) General Agreement on Tariffs and Trade (GATT)
Which of the following is an example of a vertical restraint of trade?
A) group boycott
B) price fixing
C) resale price maintenance
D) division of markets
Which of the following partners in a limited partnership invests capital, manages the
business, and is personally liable for partnership debts?
A) specific partners
B) limited partners
C) general partners
D) sole proprietors
Which of the following is true of the Health Care Reform Act?
A) Excise taxes for pharmaceuticals are reduced.
B) Employers of large corporations are given subsidies for providing health insurance
to their employees.
C) All employers are required to provide health insurance coverage to their employees.
D) Persons who do not obtain coverage are required to pay a tax penalty to the federal
government.
Which school of jurisprudence views law as a sort of evolutionary process, where
changing norms of society will be reflected in the law?
A) the Natural Law School of jurisprudence
B) the Sociological School of jurisprudence
C) the Analytical School of jurisprudence
D) the Historical School of jurisprudence
Lionel Richmond is a soccer player who has a six-year contract with the Christshire
United soccer team. Two years into the contract, he is involved in an accident which
results in the complete amputation of his right leg. On what basis is Richmond
discharged from further performance of the contract?
A) novation
B) substituted contract
C) accord and satisfaction
D) discharge by impossibility of performance
Imposing a ban on public smoking can serve as an example of a law that adheres to the
________ School of jurisprudence.
A) Command
B) Sociological
C) Law and Economics
D) Analytical
Why is proving a bona fide occupational qualification essential?
A) for justifying discrimination based on gender
B) to establish the employer's violation of Title VII of the Civil Rights Act of 1964
C) to establish that the employee's claim is fraudulent
D) for an employee to successfully claim being discriminated against by the employer
A(n) ________ is an auditor's opinion that the financial statements are fairly
represented except for, or subject to, a departure from GAAPs, a change in accounting
principles, or a material uncertainty.
A) unqualified opinion
B) qualified opinion
C) adverse opinion
D) disclaimer of opinion
Armex, a large power plant, has been in the news for a potential defect in the
construction of its inner chambers that caused radioactive fumes to escape from the
plant to the surrounding areas. This has endangered the lives of the employees at the
plant as well as those staying in nearby areas. This safety violation is likely to be
addressed by the ________ for corrective action, including possible closure of the plant.
A) Federal Nuclear Agency (FNA)
B) U.S. Army Corps of Engineers (USACE)
C) Nuclear Waste Policy Commission (NWPC)
D) Nuclear Regulatory Commission (NRC)
