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In a fully disclosed agency, an agent is not liable on the contract if he or she guarantees
that the principal will perform the contract.
The offeror cannot be found liable for the crime of bribery if the person to whom the
bribe is offered rejects the bribe.
Implied warranties of quality cannot be disclaimed.
The shareholders of a corporation have the absolute right to amend the bylaws.
Unconscionable contracts are sometimes found where there is a consumer contract that
takes advantage of uneducated, poor, or elderly people who have been persuaded to
enter into unfair contracts.
In a criminal lawsuit, guilt has to be proven beyond a reasonable doubt.
Businesses that are organized in the United States are subject to its laws, but not to the
laws of other countries in which they do business.
A 10-percent shareholder of an equity security of a reporting company is considered a
statutory insider.
A general partnership agreement must always be in writing to be considered legal.
Persons injured by a RICO violation can bring a private civil RICO action against the
violator.
The merchant courts were established because of the unfair results and limited remedies
available in the chancery courts.
The act of negotiating contract terms between an employer and the members of a union
is known as mediation.
Upon request, a plaintiff typically receives at least one judicial extension of the
applicable statute of limitations period.
A note is a long-term debt security that is secured by some form of collateral.
In a case in which a buyer purchases goods from a thief who has stolen them, the
purchaser does not acquire title to the goods.
In a criminal lawsuit, the government is represented by a lawyer called the defense
attorney.
Employees who choose not to return to work after joining the strikers are known as
crossover workers.
A decision of a limited-jurisdiction trial court can be appealed at a general jurisdiction
court or an appellate court.
Under the Consumer Product Safety Act, a private party can sue for an injunction to
prevent violations of the act or of Consumer Product Safety Commission (CPSC) rules
and regulations.
The existence of an LLC begins when the articles of organization are filed.
Corporations can seek protection under the Fifth Amendment privilege against
self-incrimination.
The signature of a person's electronic agent can constitute a valid electronic signature.
The SEC is concerned with regulating issues and trading of securities alone and cannot
regulate the activities of securities brokers and advisors.
Crimes committed by businesspersons are referred to as blue-collar crimes.
A disclaimer of opinion is a corporate auditing exemption that effectively prohibits an
auditor from accessing a high-priority portion of the company's financial records.
The Civil Rights Act of 1866 is unconcerned with discrimination based on national
origin.
An agent does not owe a duty to notify the principal of important information he learns
concerning the agency.
Utility patents for inventions are valid for the whole of the inventor's life and 70 years
after that.
Shareholders do not have to attend a shareholders' meeting to vote.
The NLRB is required to supervise all consent elections.
An LLC organized in the United States is considered a domestic LLC throughout the
United States.
Jessica files a frivolous lawsuit against Thomas claiming emotional distress because he
plucked flowers from her garden without her permission. The judge exonerates Thomas.
Thomas can now sue Jessica for malicious prosecution.
________ is a situation in which an agent does something during the course of his or
her employment to further his or her own interests rather than the principal's.
A) Respondeat superior
B) Frolic and detour
C) Vicarious liability
D) Dual-purpose mission
The ________ guarantees workers unpaid time off from work for family and medical
emergencies.
A) FLSA
B) OSHA
C) FMLA
D) ERISA
Which of the following is true of monetary damages?
A) Monetary damages are available only for material breaches of contract.
B) Dollar damages are not monetary damages.
C) Compensatory damages are not monetary damages.
D) Consequential damages are monetary damages.
The Comprehensive Environmental Response, Compensation, and Liability Act
(CERCLA) is commonly called the Superfund.
According to the provisions set forth by the Sarbanes-Oxley Act, the ________, a
federal government agency, may issue an order prohibiting any person who has
committed securities fraud from acting as an officer or a director of a public company.
A) United States International Trade Commission
B) Federal Reserve System
C) Federal Communications Commission
D) Securities and Exchange Commission
________ are the most serious crimes, including crimes that are mala in se.
A) Felonies
B) Infractions
C) Misdemeanors
D) Summary offenses
Which of the following transactions occurs when a seller sells goods to a buyer on
credit and retains a security interest in the goods?
A) two-party secured
B) three-party secured
C) perfected
D) attached
Which of the following is true of subsurface rights in real property?
A) Subsurface rights cannot be used to mine exhaustible natural resources.
B) Subsurface rights can be sold separately from surface rights.
C) Subsurface rights are not provided for the discovery of malleable metals like gold
and iron.
D) Subsurface rights can only be invoked to dig oil wells.
In which of the following cases is the felony murder rule applied?
A) when the felon in the case was killed while the crime transpired
B) when the murder was committed without intent while committing another crime
C) when the reason for the death is found to be involuntary manslaughter
D) when the crime involves the intended murder of another person
Which of the following is true of the International Monetary Fund (IMF)?
A) It consists of representatives from all states located in the United States.
B) It is funded by the Superfund of the Comprehensive Environmental Response,
Compensation, and Liability Act (CERCLA).
C) It promotes sound monetary, fiscal, and macroeconomic policies worldwide by
providing assistance to poor countries.
D) It provides one-time grants to needy countries with no terms or conditions attached
to the assistance.
Which of the following statements is true of the tort of assault?
A) An assault is considered an unintentional tort.
B) An attack is considered an assault only if the defendant was provoked to attack a
plaintiff.
C) An attack is not considered an assault if the defendant was provoked to attack a
plaintiff.
D) Actual physical contact between plaintiff and defendant is not necessary.
Which of the following best describes an entrepreneur?
A) a person who forms and operates a business
B) a person who invests in an existing business
C) a person who lends capital to a new business
D) a person who derives a profit from a new or an existing business
________ is a crime in which one person gives another person money, property, favors,
or anything else of value for a favor in return.
A) Bribery
B) Battery
C) Embezzlement
D) Larceny
Which of the following is true of treasury shares?
A) They cannot be issued by the corporation.
B) They cannot be voted by the corporation.
C) They are owned by shareholders.
D) They are entitled to receive dividends.
Which of the following is true of the management of a general partnership?
A) The number of votes a general partner has depends on the proportion of his or her
capital investment.
B) Partnership matters are decided by unanimous agreement only.
C) Only a general partner who is also a member of the partnership's board of directors
has the authority to participate in the management of the partnership.
D) If the vote is tied, the action being voted on is considered to be defeated.
Which article of the Uniform Commercial Code (UCC) governs secured transactions in
personal property?
A) Article 8
B) Article 9
C) Article 18
D) Article 19
Jules Renton, a financial accountant at Valkyrie Aviation, deals with Valkyrie's accounts
with the government. Valkyrie has a contract with the government to deliver a bomber
plane called Spearhead. When reviewing the Spearhead account, Renton noticed that
Valkyrie has been falsely charging the government for Spearhead's production. If
Renton chooses to be a whistleblower and expose the scam to the government, which
Congress-enacted statute must he invoke?
A) Business Norms Act
B) Sarbanes-Oxley Act
C) Glass-Steagall Act
D) False Claims Act
Which of the following crimes is an example of a white-collar crime?
A) battery
B) larceny
C) arson
D) forgery
Which of the following is true of an auditor of a corporation?
A) The auditor must be an independent certified public accountant.
B) The auditor cannot use information about the corporation from third parties.
C) The auditor cannot inspect the corporation's real property unless he or she is closely
associated with the company.
D) The auditor must provide a qualified opinion wherever possible, since it helps the
company in its business practices.
Which of the following is true of the liabilities of a franchisor and a franchisee?
A) The franchisor is not liable for any tort arising out of the franchise.
B) Both franchisee and franchisor are jointly liable for torts committed by either.
C) Franchisees are only liable on their own contracts.
D) Franchisors are always liable for the torts of the franchisees.
A(n) ________ provides for the reduction of a debtor's debts.
A) extension
B) liquidation
C) limitation
D) composition
The ________ is a federal statute that makes it a crime to intercept an electronic
communication at the point of transmission, while in transit, when stored by a router or
server, or after receipt by the intended recipient.
A) UCITA
B) ECPA
C) ACPA
D) ICANN
A geographical area that does not meet established air quality standards is designated as
a ________.
A) limited pollution area
B) nonattainment area
C) non-regulated area
D) federal regulation area
Creditors that violate the Consumer Lease Act are subject to the civil and criminal
penalties provided in the ________ Act.
A) Truth-in-Lending
B) Fair Credit Billing
C) Fair Credit and Charge Card Disclosure
D) Fair Debt Collection Practices
Which of the following is not a Social Security benefit?
A) retirement benefits
B) disability benefits
C) Medicare
D) workers' compensation
Which of the following is true of OSHA's general duty standard?
A) The standard must be established with each safety regulation.
B) It requires an employer to provide a work environment that does not result in
employee mental stress.
C) An employer is required to provide a work environment that is free from recognized
hazards.
D) OSHA has no authority regarding employer safety violations, since it is merely a
model act.
A(n) ________ breach of a contract occurs when a party renders inferior performance
of his or her contractual obligations.
A) material
B) minor
C) anticipatory
D) defensive
________ crimes require that the perpetrator either knew or should have known that his
or her actions would lead to harmful results.
A) Nonintent
B) Specific intent
C) General intent
D) Explicit intent
In terms of copyright law, the use of copyrighted material in a satire or parody
exemplifies ________.
A) the piracy problem
B) copyright sharing
C) the fair use doctrine
D) copyright infringement
Jasmin, Shou-Yi, and Vanessa form an LLC, and each contributes $25,000 in capital.
The LLC operates for a period of time, during which it borrows money from banks and
purchases goods on credit from suppliers. After some time, the LLC experiences
financial difficulties and goes out of business. If the LLC fails with $500,000 in debts,
which of the following is an accurate statement regarding the liability of Jasmin,
Shou-Yi, and Vanessa?
A) Each will lose her capital contribution of $25,000, but will not be personally liable
for the rest of the unpaid debts of the LLC.
B) Each will lose her capital contribution of $25,000, and will be personally liable for
the rest of the unpaid debts of the LLC.
C) Each will not be personally liable for the $500,000 in debts, and will be reimbursed
for her $25,000 capital contribution.
D) Each will not be personally liable for the $500,000 in debts, and a constructive trust
for the entire $75,000 in capital contributions will be imposed so that Jasmin, Shou-Yi
and Vanessa can form a new business venture.
________ requires that any profits made by a statutory insider on transactions involving
short-swing profits belong to the corporation.
A) Section 5 of the Securities Act of 1933
B) Section 12 of the Securities Act of 1933
C) Section 16(b) of the Securities Exchange Act of 1934
D) SEC Rule 10b5-1
The Double Jeopardy Clause of the Fifth Amendment protects persons from ________.
A) evidence procured through unreasonable search and seizures
B) being tried twice for the same crime
C) confessions obtained through physical force during an interrogation
D) being subjected to a heavier penalty or longer imprisonment
If a casting agent works for two Hollywood actors, the agent is liable for ________.
A) dual agency
B) competing with the principal
C) usurping an opportunity
D) self-dealing
Which two elements are required to find a defendant guilty of an intent-based crime?
A) a victim and criminal intent
B) a motive and criminal intent
C) a criminal act and criminal intent
D) a criminal act and proof of gain
Which of the following is true of the per se rule in restraint of trade?
A) It fails to permit any defenses and justifications to save the restraint of trade.
B) It applies only to restraints that are found to be unreasonable with certain evidentiary
standards being met.
C) It applies to restraints that are based primarily on the firm's market share and power.
D) It requires a balancing of the positive and negative effects of the challenged
restraint.
An LLC is formed by delivering ________ to the office of the secretary of state of the
state of organization for filing.
________ is a form of co-ownership of real property that can be used only by married
couples.
A type of franchising where the franchisor licenses the franchisee to make and sell its
products or services to the public from a retail outlet serving an exclusive geographical
territory is known as a(n)________ franchise.
A(n) ________ is a document that is filed with the secretary of state upon the
dissolution of a limited partnership.
An administrative law judge's decision is issued in the form of a(n) ________.
A(n) ________ is a document that is filed with the state that designates a trade name of
a business.
Explain the doctrine of strict liability with examples.
Describe two federal laws that have been implemented to minimize the damage caused
by oil spills.
Under the moral theory of ________, if a person meets his or her own moral standard in
making a decision, no one can criticize him or her for it.
Gem's principal asked her to pick up his dry cleaning on her way to work. While
driving to work after picking up the dry-cleaning, Gem struck an old man crossing the
street due to her negligence. Under the theory of ________, Gem's principal is liable to
the injured man.
Once a trademark becomes a ________, the term loses its protection under federal
trademark law.
Under the ________ Act, pesticides must be registered with the EPA before they can be
sold.
An employee, motivated by jealousy, intentionally injures someone on the work
premises and during work hours who dated her boyfriend. Based on the ________ test,
the principal is liable for the injury.
A member's ownership interest in an LLC is known as a(n) ________.
All United Nations (UN) members are part of the ________, which is the legislative
body of the UN.
Owing to some unfair results and limited remedies available in the law courts,
________ courts were established.
What is a life estate?
