A limited partnership can be formed by one (1) or more __________ partners and one
(1) or more __________ partners.
a. unreserved; reserved
b. active; silent
c. licensed; unlicensed
d. general; limited
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
Crime victims:
a. cannot ever receive indemnification.
b. can receive indemnification if it is provided for by statute.
c. can receive indemnification, but only for misdemeanors.
d. can receive indemnification, but only from state governments.
The failure to have a license will not render agreements void if the license:
a. is based on formal education.
b. is a real estate license.
c. is a regulatory license.
d. is readily obtainable by anyone who offers payment of a required fee.
Which of the following has been linked with the long-term growth and profitability of
business organizations?
a. high standards for product quality
b. high standards for employee welfare
c. high standards for customer service
d. all of the above
A customer went into a store and saw a beautiful leather jacket bearing a price tag of
$29. The customer handed the cashier a $50 bill and said, “I accept. We have a deal.”
The cashier then noticed the price tag and told the customer an error had been made and
that the price was $229. In this case:
a. the customer validly accepted the store’s offer.
b. the price tag was a firm offer.
c. no contract was formed because the customer’s offer was refused.
d. the customer is the offeree.
The taking of an image, likeness, or name for purposes of commercial advantage is
protected by :
a. contract law.
b. tort law.
c. criminal law.
d. none of the above.
Federal law __________ conflicting state regulation when a federal law regulates that
particular subject.
a. coincides with
b. is subordinate to
c. parallels
d. preempts
“Superfund” is a creation of which of the following?
a. the Comprehensive Environmental Response, Compensation, and Liability Act
(CERCLA)
b. the Occupational Safety and Health Administration (OSHA)
c. the National Environmental Policy Act (NEPA)
d. the Environmental Protection Agency (EPA)
An incontestability clause ordinarily bars contest of the validity of a life insurance
policy by the insurer after the lapse of:
a. sixty (60) days.
b. one (1) year.
c. two (2) years.
d. ninety (90) days.
One party to a contract permitting the other party to continue performance without
objecting that the performance is unsatisfactory is an example of a(n):
a. waiver.
b. breach.
c. anticipatory repudiation.
d. forbearance.
Repeated breaches and waivers are generally interpreted to indicate:
a. poor business practices.
b. illegal behavior.
c. ignorance of the law.
d. modification of contract.
White-collar crimes:
a. always involve the threat or use of force or violence.
b. generally involve the threat or use of force or violence.
c. sometimes involve the threat or use of force or violence.
d. do not involve the threat or use of force or violence.
A sole proprietorship is taxed:
a. on a personal and corporate level.
b. only on the corporate level.
c. only on the personal level.
d. none of the above.
The Pregnancy Discrimination Act does not:
a. require employers to treat pregnancy as other disabilities are treated.
b. require women disabled by pregnancy to be provided with the same benefits as other
disabled workers.
c. require an employer to provide paid sick leave benefits to pregnant women if it does
not provide them to other disabled workers.
d. apply to sick leave programs.
Typically, there are how many parties to a letter of credit?
a. two (2)
b. three (3)
c. four (4)
d. five (5)
Chapter 7 is:
a. a liquidation proceeding.
b. a reorganization proceeding.
c. an extended time payment plan.
d. always an involuntary proceeding.
Part of every whole life insurance premium covers the cost of insurance. The remainder
of the premium is devoted to the investment component of the policy, which builds up
over time to its:
a. reimbursement point.
b. cash surrender value.
c. culmination value.
d. return point.
The Fifth Amendment to the United States Constitution’s protection against
self-incrimination applies to:
a. individuals only.
b. corporations only.
c. both individuals and corporations.
d. individuals, but only in their official capacity within a business.
In most instances, the mere fact that a sale was made gives rise to a(n):
a. express warranty.
b. limited warranty.
c. full warranty.
d. implied warranty.
The commerce clause of the Constitution:
a. prohibits the U.S. government from engaging in interstate commerce.
b. prohibits the U.S. government from regulating interstate commerce.
c. has been expanded by Supreme Court interpretations to give the U.S. government the
power to regulate the general welfare of the nation.
d. was declared unconstitutional in 1937.
In order to establish the tort of false imprisonment, a person must show imprisonment
for:
a. any amount of time.
b. at least one minute.
c. at least ten minutes
d. at least one hour.
A contract or agreement to purchase a specific number and kind of shares of stock when
it is issued is called a stock:
a. guaranty.
b. warranty.
c. request.
d. subscription.
When the principal’s words or conduct leads a third person to reasonably believe that a
party is authorized to act as his or her agent but this is not true, and the third person
relies on that appearance, this creates a case of __________ authority.
a. express
b. apparent
c. customary
d. incidental
A corporation may be prosecuted and convicted of:
a. a criminal offense if its agent committed the offense while acting within the scope of
the agent’s authority.
b. an error in business judgment, assuming that no other reasonable corporation would
have committed such an error.
c. operating without a corporate charter if the corporation has never sought a charter
from the secretary of state’s office, or if its directors and/or officers either knew of
should have known that the secretary of state’s office had revoked the charter.
d. none of the above; a corporation itself is not subject to criminal prosecution and
conviction.
The Uniform Durable Power of Attorney Act (UDPAA) changes the general rule that
insanity of a principal terminates an agent’s authority to act for the principal.
An instrument will be considered payable to order if:
a. it is payable to bearer or the order of bearer.
b. it is payable to cash.
c. the last or only indorsement is a blank indorsement.
d. none of the above
Parol evidence may be admitted to show that a provision was omitted as the result of:
a. fraud.
b. accident.
c. mistake.
d. all of the above.
The _____ rule(s) on the admissibility of evidence.
a. judge
b. jury
c. attorneys
d. court clerk
A(n) __________ instrument’s terms are enforceable, but the instrument is treated
simply as a contract governed by contract law.
a. nonnegotiable
b. negotiable
c. accommodation
d. secondary
Situational ethics is a moral system whose rigidity makes it unnecessary to examine
motivation behind conduct in order to label it right or wrong.
Affirmative action is lawful only when it is designed to respond to a demonstrated and
serious imbalance in the workplace, is flexible, is time-limited, applies only to qualified
workers, and respects the rights of non-minorities and men.
The requirement of a sum certain in money is fulfilled even though the interest rate
changes at maturity.
Under Revised UCC Article 9, a financing statement must be signed by the debtor.
The public has access to the activity of administrative agencies in three ways: (1) open
records, (2) open meetings, and (3) public announcement of agency guidelines.
In a disparate impact case, proof that the employer did not intend to discriminate is a
complete defense.
When a statute requires that all terms of the insurance contract be included in the
written contract, the insurer cannot claim that a provision not stated in the written
contract was binding on the insured.
Collective bargaining contracts govern the rights of employers and employees only in
public sectors of employment.
At common law, a minor cannot be held contractually liable for his or her necessary
medical expenses when the parent is unable or unwilling to pay.
Libel is the printed equivalent of the spoken form of defamation known as slander.
Partnership agreements allow individuals to conduct their business without the
requirement of a formal organizational structure.
A California corporation is a foreign corporation with respect to the remaining
forty-nine (49) states of the United States.
The UCC statute of limitations applies to actions brought for remedies on the breach of
a sales contract.
The term dumping refers to the sale of damaged goods in a foreign market to cut the
losses that would otherwise be caused by their damage.
Contract provisions that limit the remedies of the parties are generally unenforceable.
The term special bailee is an historical term, but a special bailee has no greater duty
than any other bailee.
Ordinarily, the management of a corporation is not liable to third persons if the
managerial policies cause loss to such third persons.
In common usage today, there is no distinction between real and personal property.