The annual shareholders’ meeting is held to elect new shareholders.
A voluntary petition is a petition filed by a creditor that states that the debtor has debts.
The No Electronic Theft Act (NET Act) can be invoked for copyright infringements that
do not involve financial gain.
The infancy doctrine gives minors the right to disaffirm most contracts they have
entered into with adults.
A limited partner may engage in voting on the dissolution of the limited partnership
without losing his or her limited liability.
A homeowner is liable for negligence per se if he or she fails to repair a damaged
sidewalk in front of his or her home and a pedestrian who trips on the unrepaired
sidewalk is injured.
Point source dischargers of pollutants are required to maintain monitoring equipment,
keep samples of discharges, and keep records.
Sellers of raw fruits and vegetables can adopt a voluntary approach when it comes to
labeling requirements.
Parties enter into an electronic mail contract by the use of e-mail.
The power to regulate interstate commerce lies exclusively with the federal
government.
Under the intermediate scrutiny test, a court must determine whether the government
classification is reasonably related to a legitimate government purpose.
If a person owns real property in fee simple, his or her ownership is limited in duration.
Common stockholders receive dividends declared by the board of directors.
The principal is not liable for an agent’s negligence while the agent is on a dual-purpose
mission.
Under the foreseeability standard, an accountant is liable even if he or she had no
knowledge of the intended user of the audited financial statements.
An LLC can be organized in only one state.
Trees, crops, minerals, and timber are not considered real property and are thus barred
from being included in contracts involving interests in real property.
Chapter 13 of the Bankruptcy Code permits a qualified debtor to propose a plan to pay
all or a portion of the debts he or she owes in installments over a specified period of
time.
The EEOC will issue a right to sue letter to the complainant even if it does not find a
violation upon investigation of the charge.
A general power of attorney limits an agent to those acts enumerated by the agreement.
If a newspaper review calls a commercially successful actor talentless, it is liable for
defamation of character.
A seller’s or lessor’s statement of opinion or commendation of the goods does not create
an express warranty.
A special power of attorney empowers an agent to act in any matters on the principal’s
behalf without limitation.
The main criticism about ethical fundamentalism is that it does not allow people to
decide for themselves what is right and what is wrong.
An option contract is terminated upon the death of the offeror.
Any lease for a stated period, irrespective of its duration, is called a periodic tenancy.
Administrative employees who do not do manual work are exempt from the federal
minimum wage requirement.
An LLC is taxed at the entity level.
An agreement whereby the parties agree to accept something different in satisfaction of
the original contract is called a restitution.
In a lawsuit for malicious prosecution, the original defendant sues the original plaintiff.
Obtaining nontestimonial evidence like fingerprints and body fluids violates the Fifth
Amendment privilege against self-incrimination.
The Fair Housing Act of 1968 does not apply to a person who leases a single-family
dwelling and does not own more than three single-family dwellings.
The surety is primarily liable for paying the principal debtor’s debt when it is due in a
surety arrangement.
A voidable contract is also termed as an unenforceable contract.
General partners are not personally liable for partnership debts beyond their capital
contributions.
The FDA cannot withdraw approval of any previously licensed drug.
Under the Health Care Reform Act, persons who do not obtain health coverage will be
provided free health insurance by the government.
________ refers to a doctrine that says a plaintiff who is partially at fault for his or her
own injury cannot recover against the negligent defendant.
A) Assumption of the risk
B) Comparative fault
C) Contributory negligence
D) Comparative negligence
An estate in which the tenant has the right to possess the real property but does not own
title to the property is called a ________.
A) fee simple absolute estate
B) gifted estate
C) non-freehold estate
D) fee tail estate
Mary won a case at the U.S. Court of Appeals. When the case was reviewed by the
Supreme Court, only eight judges were present. Four of the judges voted for Mary
while the other four voted against her. Which of the following would be the result of
this case?
A) The case will be sent to the U.S. Court of Appeals for a review.
B) Mary will win the case, as she had already won at the U.S. Court of Appeals.
C) The case will be reviewed again by the U.S. Supreme Court when all the judges are
present.
D) Mary will win, and the case will set a precedent for later cases.
The U.S. Department of Agriculture places mandatory and consistent labeling
requirements on ________.
A) ready-to-eat meals
B) raw fruits and vegetables
C) raw seafood
D) meat and poultry products
Which of the following statements is true of the European Union (EU)?
A) All issues have to be passed unanimously by EU members to be enforced.
B) Every EU country has adopted the euro as its monetary unit.
C) Customs duties have been eliminated among EU member nations.
D) Customs duties in trade between the EU and the rest of the world have been
completely eliminated.
________ is an ethical theory according to which a person adheres to rules or
commands that are from an outside source, such as a book or a central figure.
A) Ethical fundamentalism
B) Utilitarianism
C) Ethical relativism theory
D) Rawls’s social justice theory
Heather chooses to buy a scarf from Macy’s and reads the price on the tag as $50. She
uses her credit card to pay for the scarf, but only after the purchase does she notice that
the price tag actually says $500. This is an instance of a(n) ________.
A) bilateral mistake
B) mutual mistake of value
C) innocent misrepresentation
D) unilateral mistake
The difference between a qualified fee ownership and a fee simple ownership is that a
qualified fee ownership can be ________.
A) transferred at will by the owner of the property
B) terminated if a specified event occurs or fails to occur
C) infinite in its duration
D) inherited without limitations
Plant life that is severed from the land is considered ________ property.
A) intangible
B) immovable
C) real
D) personal
Helga works as a nurse in a private hospital. She is paid an hourly wage. Helga is
typically required to work 40 hours per week, from 10 p.m. until 6 a.m. Monday
through Friday. Due to the recent resignation of another nurse, Helga’s supervisor has
offered her the opportunity to work additional hours each week. Which of the following
is true in terms of Helga’s prospects for overtime pay?
A) Helga cannot receive overtime pay, since federal law conclusively presumes that
health care workers are paid on a salaried basis.
B) Helga can receive overtime pay only if she works more than 60 hours per week, due
to the federal overtime pay restrictions imposed on the health care sector.
C) Helga cannot receive overtime pay, as federal law prohibits overtime pay for health
care workers.
D) Helga is entitled to overtime pay if she works the additional hours.
If an independent contractor enters into a contract with a third party on behalf of the
principal without express or implied authority from the principal to do so, who among
the following is liable on the contract?
A) the principal
B) the independent contractor
C) the third party
D) both the principal and independent contractor
A contract is a(n) ________ contract if the offeror’s promise is answered with the
offeree’s promise of acceptance.
A) voidable
B) executed
C) unilateral
D) bilateral
According to the Statute of Frauds, a general partnership that exists for more than
________ must have a written partnership agreement.
A) three months
B) six months
C) nine months
D) one year
________ refer to cases arising under the U.S. Constitution, treaties, or federal statutes
and regulations.
A) Federal question cases
B) Diversity of citizenship cases
C) Federal crimes cases
D) Copyrights and trademarks cases
Which of the following constitutes copyright infringement?
A) the use of several clips from a copyrighted movie in a documentary
B) the use of a brief quotation from a copyrighted work in a news report
C) the use of copyrighted material in a spoof or satire
D) reproduction by a teacher or student of a small part of a copyrighted work to
illustrate a lesson
The ________ imposes liability under Section 10(b) and Rule 10b-5 on an outsider who
misappropriates information about a company, in violation of his or her fiduciary duty,
and then trades in the securities of that company.
A) Insider Trading Sanctions Act
B) Sarbanes-Oxley Act
C) tort of appropriation
D) misappropriation theory
The ________ coordinates state securities laws with federal securities laws.
A) Insider Trading Sanctions Act
B) Securities Exchange Act of 1934
C) Securities Act of 1933
D) Uniform Securities Act
When does a joint tenancy become a tenancy in common?
A) when a joint tenant sells his or her property
B) when a joint tenant dies
C) when two joint tenants swap their share in the tenancy
D) when two joint tenants are bound by a marital relationship
Stella is injured in a car accident and is transported to the local hospital by emergency
personnel. She subsequently passes into a coma. The doctors and other staff perform the
necessary medical procedures to save her life. Stella recovers after two months and is
discharged from the hospital. Under the doctrine of ________ contract, Stella must pay
the hospital for its services.
A) implied-in-fact
B) express
C) quasi-
D) formal
Which of the following is a primary cause of sick building syndrome in the United
States?
A) a large number of outdoor ducts
B) unsealed windows
C) a thinly insulated building
D) hazardous construction materials
Which of the following is true of a gift promise?
A) A gift promise can be enforced by a court of law.
B) A completed gift promise cannot be cancelled for lack of consideration.
C) A gift promise contains mutual consideration.
D) The promisee can take legal action if the promisor does not fulfill the gift promise.
________ is a social responsibility theory of business according to which a corporation
must consider the effects that its actions have on persons other than its shareholders.
A) Corporate citizenship
B) Maximizing profits
C) Moral minimum
D) Stakeholder interest
Which of the following best defines short-swing profits?
A) profits made by an insider by selling shares of the corporation before the public
disclosure of unfavorable information
B) profits made by an insider by personally purchasing shares of the corporation before
the public release of favorable information
C) profits made by a statutory insider on trades involving equity securities of his or her
corporation that occur within six months of each other
D) profits made by a tippee by personally purchasing shares of the corporation either
before or after the public release of favorable information
Which of the following is an accurate statement regarding the risk of loss in a
destination contract after the seller delivers conforming goods to the carrier?
A) The seller bears the risk of loss during transportation.
B) The buyer bears the risk of loss during transportation.
C) The seller and the buyer equally bear the risk of loss during transportation.
D) The buyer bears one-third of the risk of loss and the seller bears two-thirds of the
risk of loss during transportation.
The ________ administers the NEPA and has the authority to adopt regulations for the
enforcement of the act.
A) Environmental Protection Agency (EPA)
B) Environmental Investigation Agency (EIA)
C) Ministry of Environmental Protection (MEP)
D) Association of Environmental Professionals (AEP)
A written document in which a shareholder authorizes a person to vote the shareholder’s
shares at the shareholders’ meetings in the event of the shareholder’s absence is known
as a ________.
A) quorum
B) notice of shareholder’s meeting
C) certificate of authority
D) proxy
Which of the following is true of workers’ compensation?
A) Families of workers cannot claim workers’ compensation despite the death of the
worker.
B) Workers’ compensation is only awarded for injuries resulting from the job.
C) The claim for workers’ compensation must be filed with the employer.
D) Workers’ compensation is a fixed amount throughout the country.
The Securities and Exchange Commission (SEC), created by the Congress to enforce
federal securities laws, is an example of a(n) ________.
A) intelligence agency
B) congressional body
C) judicial body
D) administrative agency
________ is a statute that relieves medical professionals from liability for ordinary
negligence when they stop and render aid to victims in emergency situations.
A) A Good Samaritan law
B) Assumption of the risk
C) The duty of care
D) Res ipsa loquitur
Yvonne finds a carpenter to do some repairs for her house and tells him that if he
finishes the job by Saturday, she will pay him $1,000. Yvonne’s offer creates a(n)
________ contract.
A) executed
B) unilateral
C) executory
D) bilateral
Which of the following must be included in the registration statement?
A) judgments passed by the SEC on the merits of the securities offered
B) how proceeds from the offering will be used
C) the date of termination of the initial public offering
D) the maximum number of times a share can be sold post-issue
Which of the following is true of a unilateral mistake?
A) Only one mistake or ambiguity is present in the subject matter of entire contract.
B) Out of several contracts drafted simultaneously between two parties, one has a
mistake in its subject matter that does not concern the other contracts.
C) Only one party is mistaken about a material fact regarding the subject matter of a
contract.
D) A single mistake about a material fact in the subject matter of a contract appears
several times in the contract.
Which of the following governs a limited partnership, its internal affairs, and the
liability of its limited partners?
A) the federal government
B) all states in which the business operates
C) the articles of limited partnership
D) the law of the state in which it is organized
The group that a union is seeking to represent is called the ________ unit, and it must
be defined before the union can petition for an election.
As a part of a downsizing initiative, Richmond and Sons fired an employee before his
employment contract lapsed. Is the employee responsible for mitigating damages?
Explain.
________ refers to an interest a creditor automatically obtains when he or she extends
credit to a consumer to purchase consumer goods.
List the securities exempt from registration with the Securities and Exchange
Commission (SEC).
Explain the business judgment rule and its relationship to the fiduciary duty of care
owed by corporate officers and directors.
The ________ is a special federal appeals court that hears appeals from the Board of
Patent Appeals and Interferences of the U.S. Patent and Trademark Office and federal
courts concerning patent issues.
List the circumstances that can lead to termination of an agency by impossibility of
performance.
The ________ permits employees and their beneficiaries to continue their group health
insurance after the voluntary or involuntary termination of a worker’s employment.
Under the ________ test, the principal is liable for any intentional torts committed by
an agent during working hours on the principal’s premises.
________ occurs when a party at one level of distribution enters into an agreement with
a party at another level to adhere to a price schedule that either sets or stabilizes prices.
Personal property that is subject to a security agreement is known as ________.
What is the moral minimum theory in the social responsibility of businesses?
Most jurisdictions hold the ________ liable if the agent injures someone while on a
dual-purpose mission.
________ is a doctrine that raises a presumption of negligence and switches the burden
to the defendant to prove that he or she was not negligent.
The ________ is a federal statute that makes it unlawful for a party to refuse to sell,
rent, finance, or advertise housing to any person because of his or her race, color,
national origin, sex, religion, disability, or family status, subject to several exceptions.
Explain the scope and provisions of Title VII of the Civil Rights Act of 1964.