The extent of the agent’s authority under an implied agency is determined from the facts
and circumstances of the particular situation.
An agent who does not perform his or her express duties or fails to use the standard
degree of care, skill, or diligence is liable to the principal for damages.
Redeemable preferred stock allows the preferred stockholders to convert their shares
into common stock.
Internet domain names are unique for every individual’s or business’s website.
The Due Process Clause of the Fifth Amendment applies to state and local government
action.
If an agent’s motivation in committing an intentional tort is personal, the principal is not
liable, even if the tort takes place during business hours or on business premises.
The UCC permits an acceptance of sales contracts to contain additional terms and still
to act as an acceptance rather than a counteroffer.
For a gift to be effective, the donor need not necessarily have a donative intent.
A joint venture corporation is a partnership owned by two or more joint venturers that is
formed to operate a joint venture.
No act of performance is required to create a bilateral contract.
The right to cover is the right of a lessor to lease his or her goods to an alternate lessee.
Information given by the attorneys in their closing statements is considered as evidence.
A doctrine that allows minors to disaffirm (cancel) most contracts they have entered
into with adults is referred to as covenant not to compete.
Reasonable expenses incurred in disposition of goods like stopping delivery,
transportation charges, storage charges, and sales commission are called incidental
charges.
An auction with reserve is one in which the seller expressly gives up his or her right to
withdraw the goods from sale and must accept the highest bid.
There are only two types of freehold estates: fee simple absolute (or fee simple) and fee
simple defeasible (or qualified fee).
Agreements to contribute cash or property can act as a member’s capital contribution to
an LLC.
The Sarbanes-Oxley Act allows for a registered public accounting firm to
simultaneously provide audit and certain nonaudit services to a public company.
Common law provided opportunities that inadequately created employment barriers to
certain minority classes.
Property that is acquired through gift or inheritance either before or during marriage
remains separate property.
If a case involving concurrent jurisdiction is brought by a plaintiff in federal court, the
defendant can either let the case be decided by the federal court or remove the case to
the state court.
A person cannot be forced to be a partner or to accept another person as a partner.
General partnerships that exist for more than one year must be in writing under the
Statute of Frauds.
A mark is any trade name, symbol, word, logo, design, or device used to identify and
distinguish goods of a manufacturer or seller or services of a provider from those of
other manufacturers, sellers, or providers.
Each computer connected to the World Wide Web has a different set of rules for the
exchange of information over the Internet.
The NET Act makes it a federal crime to reproduce, share, or distribute copyrighted
electronic works including movies, songs, software programs, and video games.
The offeree is the party who makes an offer to enter into a contract.
For a contract to be proven unconscionable, it is necessary to show that the adhering
party had no reasonable alternative.
Satisfaction of an accord discharges the accord but not the original contract.
The disclaimer of the implied warranty of fitness for a particular purpose must be in
writing.
A misrepresentation occurs when an assertion is made that is in accord with the facts.
The obligation of a seller to transfer and deliver goods to the buyer in accordance with a
sales contract is called tender of delivery.
While settling a dispute online, the parties must legally be represented by attorneys.
A group boycott occurs when two or more parties on different levels of distribution
enter into a contract, combination, or conspiracy to restrain trade.
For a certificate of deposit, the depositor is the maker of the certificate.
Informal contracts are always oral.
A creditor beneficiary can enforce either the original contract against the original
debtor-promisor or the new contract against the new debtor-promisor.
Damages are measured as the difference between the original rent and the rent at the
time the lessee learned of the breach.
A negotiable instrument is subject to normal contract law.
________ is one of the two principles of Kantian ethics that states that a person must
abide by the rule he or she uses to judge the morality of someone else’s conduct.
A) Reversibility
B) Relativity
C) Perspectivism
D) Utilitarianism
Jones & Hilton Co. owned a large cold storage warehouse where they stored and
processed meat and meat products. An insider revealed to the media that the cold
storage failed to meet numerous safety standards, encountered repeated rodent attacks,
and sold potentially harmful and infected meat in the market without notifying
authorities. The ________ has the authority to conduct inspections of the cold storage
warehouse and initiate legal proceedings against the owners for endangering the health
of consumers.
A) Food and Drug Administration
B) Consumer Product Safety Commission
C) Federal Healthcare Commission
D) U.S. Department of Agriculture
Which of the following can be filed by the defendant of a lawsuit?
A) complaint
B) answer
C) reply
D) injunction
________ allows issuers to raise capital from an unlimited number of accredited
investors without having to register the offering with the SEC.
A) Nonissuer exemption
B) Intrastate offering exemption
C) Private placement exemption
D) Interstate offering exemption
Bob and Clara were married for 22 years when they died in a car crash, without leaving
behind a will. They had no surviving children, but they were close to many of their
living relatives. According to the Uniform Simultaneous Death Act, how would the
couple’s properties be distributed following their death?
A) It would be made into a charitable fund by a court-appointed trustee.
B) It would escheat to the government.
C) It would be distributed to their respective relatives.
D) It would be sold by the government and its proceedings would then go to their
relatives.
A(n) ________ contract is based on an equitable doctrine.
A) implied-in-law
B) executory
C) informal
D) formal
The ________ Act enacted by Congress in 2002, requires public companies to adopt
codes of ethics, and establishes criminal penalties for companies that partake in
violations.
A) Glass-Steagall
B) Sarbanes-Oxley
C) False Claims
D) Business Norms
An offer is terminated on the grounds of ‘supervening illegality” when ________.
A) the set period in the offer has expired
B) the subject matter in the offer has been destroyed
C) a statute or court decision deems an object of the offer unlawful
D) the offeror or offeree passes away prior to the offer being accepted
The Indian Gaming Regulatory Act sets the terms of ________ activities on tribal land.
A) casino gambling
B) hunting and gathering
C) agriculture and animal rearing
D) mining
Delapaz Motors receives 10 motorcycles from a manufacturer on a sale or return basis.
Delapaz pays $5,000 for each vehicle. Delapaz sells six motorcycles within a
reasonable time. Two of the remaining motorcycles are damaged from a fire accident.
Which of the following is true in this case?
A) Delapaz cannot recover the value of the damaged vehicles from the manufacturer.
B) The manufacturer must return the complete payment received from Delapaz.
C) The risk of loss remains with the manufacturer, so it has to pay for the damages
incurred.
D) The manufacturer should compensate for all four unsold vehicles.
Which of the following best describes repossession?
A) A right granted to the debtor to take possession of the collateral after repayment of
the debt.
B) A right granted to the debtor to take possession of the collateral before repayment of
the debt.
C) A right granted to a secured creditor to take possession of the collateral upon default
by the debtor.
D) The act of possession of the collateral by the court owing to default by both debtor
and creditor.
An LLC that was organized in Alabama and is operating in Texas with no operations
outside the United States is considered a ________ in Texas.
A) foreign limited liability company
B) limited liability partnership
C) domestic limited liability company
D) general partnership
In the U.S. Supreme Court, if a majority of the justices agree as to the outcome of a
case but not as to the reasoning for reaching the outcome, it is a ________ decision.
A) unanimous
B) majority
C) plurality
D) tie
A limited liability limited partnership is required to have at least ________.
A) two limited partners
B) one general partner, and two limited partners
C) one general partner, and one limited partner
D) two general partners
Kyle goes to a used-car showroom to buy a sedan. He signs an agreement with the store
which bears the name of the car, price, and other details. This is an example of a(n)
________ contract.
A) unilateral
B) implied-in-law
C) implied-in-fact
D) express
Michael, who wanted to shoot Gary, accidentally shot and injured Stella instead. Which
of the following can Stella invoke to recover damages from Michael?
A) strict liability doctrine
B) attractive nuisance doctrine
C) special negligence doctrine
D) transferred intent doctrine
Which of the following is true of the Islamic law of Shari’a?
A) The Shari’a disallows making a reasonable profit from the sale of goods and
services.
B) All Islamic or muslim-majority countries strictly follow the complete Shari’a to
govern all aspects of life.
C) The Shari’a encourages riba through the strict payment and collection of interest on
loans within stipulated periods of time.
D) The Shari’a is primarily used in the areas of marriage, divorce, and inheritance and,
to a limited degree, criminal law.
If an obligor continues to make payments to an assignor in spite of receiving notice
from an assignee, ________.
A) the assignee is liable to the assignor for nonperformance
B) the assignee can sue the obligor for recovery
C) the assignor loses his or her right to performance from the obligor
D) the assignee can recover payment from both the assignor and the obligor
An arrangement in which a third party promises to be primarily liable with the borrower
for the payment of the borrower’s debt is referred to as ________.
A) foreclosure arrangement
B) disposition arrangement
C) surety arrangement
D) guaranty arrangement
Which of the following is a feature of the Chapter 11 plan of reorganization?
A) an equilateral division of the Chapter 11 estate among all creditors
B) division of the bankruptcy estate according to the debt to be paid to each creditor
C) discharge of a debtor’s unsecured debts and payment of secured debts
D) a proposed new capital structure for a debtor to assume when it emerges from
Chapter 11 bankruptcy
In a destination contract, delivery is completed when the shipment ________.
A) reaches the destination specified in the contract
B) passes inspection by transport customs and is allowed to be transported
C) is handed over to the carrier by the seller before the transportation
D) is in transit to the destination specified in the contract
Which of the following must be proved to show undue influence?
A) mutual agreement between two parties
B) dominance on the servient party
C) nonexistence of a relationship between two parties
D) free will of the innocent party
Limonelle Corporation owns the secret formula for a popular beverage brand called
Limonelle. The corporation operates through franchises in over 50 countries. It uses a
secret formula to prepare the drink concentrate which is dispatched to the franchises
world over. These franchises then prepare and bottle the beverage for distribution.
Which of these types of franchises has Limonelle adopted?
A) chain-style franchise
B) processing plant franchise
C) distributorship franchise
D) area franchise
The ________ Act prohibits public companies from making personal loans to their
directors or executive officers.
A) Foreign Corrupt Practices
B) Deregulation and Monetary Control
C) Sarbanes-Oxley
D) Commodity Futures Modernization
Which of the following shares have the right to vote?
A) unissued shares
B) treasury shares
C) outstanding shares
D) liquidated shares
Which of the following statements is true about creating a sole proprietorship?
A) No state government approval is required.
B) Federal taxation is levied upon sole proprietorship.
C) No licenses are required to do business within a city or state.
D) Special permission must be obtained to receive a sole proprietorship status.
Which of the following is true of an ownership of real property in fee simple absolute?
A) It cannot be inherited.
B) It terminates based on the occurrence of a specified event.
C) It is infinite in duration.
D) It cannot be transferred at will.
Ajax, a pharmaceutical company, has designed a new medicine for morning sickness
among pregnant women. Testing at their R&D center showed the drug to be highly
reliable. Ajax has to approach a U.S. federal administrative agency called the ________
for the drug to be deemed legal for sale to the public.
A) Medicines and Healthcare Products Regulatory Agency
B) Consumer Product Safety Commission
C) Federal Trade Commission
D) Food and Drug Administration
________ is a defense in a Section 2(a) action which provides that a seller’s price
discrimination is not unlawful if the price differential is due to “differences in the cost
of manufacture, sale, or delivery” of the product.
A) Natural monopoly defense
B) Meeting the competition defense
C) Changing conditions defense
D) Cost justification defense
Which of the following is a criticism 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 distinguishes between the morality one uses to judge others and the morality one
uses on oneself.
Which of the following statements is true of profits and losses in a general partnership?
A) The proportion of profit shared is equal to the general partner’s initial investment.
B) Losses are shared in the same proportion as profits by all general partners.
C) The general partner who proposed the idea of the business gets most profit.
D) The proportion of investment governs only the proportion of loss shared and not
profit obtained.
Which of the following statements best describes jury deliberation?
A) It involves re-questioning a particular witness from one of the parties by the jurors.
B) It involves consideration of the evidence and an attempt to reach a decision by the
jurors.
C) It involves disagreement by the jury and the judge on the outcome of the case.
D) It involves the replacement of jurors in case of illness or disqualification.
Explain the circumstances in which the nonperformance of contractual duties can be
excused.
What are the consequences of a breaching party refusing to pay the judgment on a
breach of contract?
How can a party’s duty under a contract be discharged without substituting a third party
for an existing party?
Compare and contrast the doctrines of contributory and comparative negligence.
Describe the difference between auctions with and without reserve using examples.
Explain how criminal act and criminal intent are crucial elements in intent crimes.
Discuss the difference between secured and unsecured credit with an example.
What are the advantages of organizing an accounting firm as a limited liability
partnership (LLP)?
Explain Chapter 11 reorganization bankruptcy with an example.
Discuss the act which requires food manufacturers and processors to provide nutrition
information on foods.
Marla owes Mathew $2,500. Mathew wants Marla to pay that amount to Harry to
whom Mathew owes the same amount. Mathew draws a negotiable instrument which
promises that Marla will pay Harry $2,500. What instrument has Mathew drawn?
Explain the different parties involved in the instrument.
Give an example of a situation where a personal defense cannot be raised against an
HDC.
Explain how the SEC governs trading in securities when inside information about a
company is possessed by an outsider to the company. Provide an example.
Compare and contrast qualified and unqualified indorsements.
Compare and contrast the liabilities of a franchisor and a franchisee to a franchise
agreement. Provide an example.
Explain in detail the doctrine of promissory estoppel.
Compare and contrast between contract provisions that are conditions and contract
provisions that are covenants.
Why are checks and balances built into the Constitution? Discuss with examples.
Discuss the consequences of the failure to provide a notice of assignment on the
assignee with an example.