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Criminal cases begin with a complaint and summons served on the defendant.
The parol evidence rule allows a party to present outside evidence to support their
interpretation of a contract.
A freehold estate is an estate in which the owner has a future possessory interest in the
real property.
An audit is defined as a verification of a company's books and records.
Cohabitation is not sufficient in and of itself to establish a common law marriage.
A member of a member-managed limited liability company and a manager of a
manager-managed LLC owe a fiduciary duty of care to the LLC not to engage in a
known violation of law, intentional conduct, reckless conduct, or grossly negligent
conduct that injures the LLC.
The Age Discrimination in Employment Act applies only to employees who are fifty
years old or older.
Constructive delivery can create a bailment.
An arraignment is necessary before an indictment can be issued.
All amendments to a corporation's bylaws must be approved by the shareholders.
A bearer instrument requires both an endorsement and delivery for the instrument to be
transferred.
Because the Americans with Disabilities Act was not passed until 1990, the Equal
Employment Opportunity Commission is not involved in the Act's enforcement.
"Right-to-work" laws refer to the guarantee that anyone competent and available to
work is entitled to a job.
In addition to federal laws, there are many state statutes that address environmental
protection.
Government employees may not join labor unions.
In a shipment contract, the buyer bears the risk of loss of the goods during
transportation.
A time draft is payable at a designated future date.
No financing statement must be filed for perfection of a security interest if the creditor
has physical possession of the collateral.
A tenant who has been constructively evicted can sue for damages, but cannot treat the
lease as terminated.
A company is trying to determine whether it should close an unprofitable plant located
in a small community. Utilitarianism would require that the benefits to shareholders
from closing the plaint be compared with the benefits to employees, their families, and
others in the community in keeping it open.
A bank that pays a stale check in good faith may charge the drawer's account.
Unless otherwise stated in a corporation's articles of incorporation, voting for the
election of directors is by the cumulative voting method.
Sometimes, a creditor refuses to extend credit to a debtor unless a third party agrees to
become liable on the debt. The third person's credit becomes the security for the credit
extended to the debtor. This relationship may be either a surety arrangement or a
guaranty arrangement.
Securities laws are exclusively under federal jurisdiction, so states do not have the
authority to legislate in this area of the law.
A check is a specific form of draft that involves a bank.
Only a few states recognize the doctrine of commercial impracticability as an excuse
for nonperformance of contracts.
A common law marriage is one in which the parties have obtained a valid marriage
license.
The bylaws can be adopted by either the incorporators or the initial board of directors.
When you buy a tree with its roots wrapped in burlap from a nursery, at the moment of
purchase, that tree is personal property.
A negotiable instrument can be handwritten.
The board of directors is responsible for formulating the policy decisions that affect the
management, supervision, control, and operation of the corporation.
Offers for both bilateral and unilateral contracts involve a promise by the offeror.
The bringing, maintaining, and defense of a lawsuit are generally referred to as
precedent.
According to the Williams Act, the tender offer must be extended for ten (10) business
days if the tender offeror increases the number of shares it will take or the price it will
pay for the shares.
Which of the following is true when a party wrongfully makes an improvement to
someone else's property?
A) the owner keeps the property without any obligation to pay the improver
B) the owner keeps the property, but must pay the improver for the improver's cost of
the improvement
C) the owner keeps the property, but must pay the improver for the increase in value to
the property resulting from the improvement
D) the improver acquires ownership of the property, but must pay the original owner the
fair market value of the property prior to the improvement
E) the improver acquires ownership of the property, but must pay the original owner the
original owner's cost, or the amount invested in the property prior to the improvement
________ pricing that is, pricing below average or marginal cost that is intended to
drive our competitors has been held to violate Section 2 of the Sherman Act.
A) Equilibrium
B) Wholesale
C) Predatory
D) Conciliatory
E) Monopoly
Walt has a two-year lease with Martha. At the end of the two years, Walt stays in the
leased premises, and continues to make rent payments. Martha consents to this
arrangement. Following the original two-year term, this arrangement is best described
as a:
A) tenancy for years.
B) periodic tenancy.
C) tenancy at will.
D) tenancy at sufferance.
E) tenancy for months.
A transfer of an instrument where the transferee can never acquire better rights than the
transferor is called a(n):
A) indorsement.
B) negotiation.
C) novation.
D) invalidation.
E) assignment
The following circumstances justify a warrantless search except:
A) when the search is incident to arrest.
B) when the search pertains to evidence in plain view.
C) when the searching officer is convinced of the suspect's guilt beyond a reasonable
doubt.
D) when it is likely that evidence will be destroyed.
E) when the suspect consents to the search.
Which of the following is true about the good faith requirement for becoming a holder
in due course?
A) It applies to both the transferor and the transferee of a negotiable instrument.
B) The UCC provides no guidance regarding the meaning of good faith.
C) It is an objective test applied using the reasonable person standard.
D) It means honesty in fact in the conduct of the transaction in question.
E) It is an objective test based on a reasonable person.
Debt securities are also called ________ income securities.
A) guaranteed
B) par
C) variable
D) fixed
E) passive
What is the defining characteristic of an incidental third-party beneficiary?
A) The benefit received by the donee beneficiary is a gift.
B) The donee beneficiary has also been delegated a duty.
C) The donee beneficiary was not intended to receive a benefit.
D) The donee beneficiary has preexisting obligations related to the contract.
E) The donee beneficiary status arose out of the assumption of a loan agreement.
What is a derivative lawsuit?
A) an action brought by the board of directors on behalf of the corporation
B) an action brought by a majority of the board of directors against an individual board
member
C) an action brought by a shareholder or shareholders on behalf of the corporation,
when the board of directors does not file the suit
D) an action brought by shareholders against the corporation
E) an action brought by the officers against the directors
With respect to commercial speech, the government can:
A) not regulate because commercial speech is fully protected.
B) subject it to time, place or manner restrictions, but not prevent it.
C) entirely restrict or prevent it, so long as the speech does not have political content.
D) prevent it if the Congress and the President agree.
E) prevent it entirely only upon the consent of two-thirds of the Senate.
Article 3 of the Uniform Commercial Code establishes certain rules for assessing
liability when a negotiable instrument has been paid over a(n) ________ indorsement.
A) stipulated
B) absolute
C) accessory
D) principal
E) forged
Section ________ of the ________ is the Statute of Frauds provision that applies to the
lease of goods.
A) 2-201(1.); Uniform Lease Code (ULC)
B) 2-201(1.); Uniform Commercial Code (UCC)
C) 2A-201(1.); Uniform Lease Code (ULC)
D) 2A-201(1.); Uniform Commercial Code (UCC)
E) 2B-201(1.); Uniform Commercial Code (UCC)
Which of the following is not one of the antitrust statutes?
A) the Sherman Act
B) the Clayton Act
C) the Federal Trade Commission Act
D) the Competition Support Regulation Act
E) the Robinson-Patman Act
Limited partnerships are also referred to as ________ partnerships.
A) general
B) qualified
C) ordinary
D) special
E) equitable
The Public Company Accounting Oversight Board consists of ________ members
appointed for ________ year terms.
A) three; three
B) three; five
C) five; five
D) five; ten
E) The exact number of members and term length vary according to need and workload.
Which is true about corporate criminal liability?
A) Corporations have never been subject to criminal liability because they are not
people.
B) Because a corporation cannot be sent to prison, they generally cannot be held
criminally liable for the actions of their officers.
C) If the criminal conduct can be traced to a specific person or persons, those persons
will be liable, but not the corporation.
D) There can be liability for both the individuals who commit crimes and for the
corporation on whose behalf the crimes were committed.
E) There can be no liability for individual employees of a corporation, but the
corporation can be held responsible for the crimes committed.
The bylaws of a corporation:
A) take precedence over the articles of incorporation.
B) must be filed in the appropriate state office.
C) are not binding on the officers and directors of the corporation.
D) govern the internal management of the corporation, and typically include the time
and place of the annual shareholders' meeting.
E) may be amended only by the board of directors.
Chapter ________ 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.
A) 7
B) 11
C) 12
D) 13
E) 15
In a civil case, which of the following is true about the order of the presentation of the
case?
A) The plaintiff is first to present, followed by the defendant.
B) The defendant is first to present, followed by the plaintiff.
C) The judge decides who goes first, which depends on the circumstances of the case.
D) The order of presentation is determined by the flip of a coin or other random
selection method.
E) The order varies from state to state.
The misappropriation of a trade secret is called ________.
A) bad faith
B) fraud
C) unfair competition
D) misdealing
E) dilution
When can an ordinary word such as "window" be granted trademark protection?
A) in any situation if the applicant is the first to apply for trademark protection of that
word
B) if the applicant can prove that the use of the word is novel
C) if the word has acquired a secondary meaning
D) if the applicant has used the word in the name of its product for at least 10 years
E) if the word has become a generic term
The Economic Espionage Act (EEA) imposes prison terms on individuals of up to five
(5.) years per criminal violation.
The insurance industry is regulated by:
A) the United States Congress, under the Commerce Clause.
B) the Central Insurance Regulatory Agency.
C) the states, pursuant to the McCarran-Ferguson Act.
D) the process of self-regulation.
E) the Sherman Act.
The requirement that goods tendered to a buyer must conform in all ways to the terms
of the contract is called the:
A) complete performance rule.
B) perfect tender rule.
C) no right to cure rule.
D) substantial performance rule.
E) perfect cure rule.
In James v. Meow Media, Inc. involving the lawsuit against the producers and
distributors of violent video games and movies after a minor shot several classmates,
which of the following sets forth the ruling of the Court of Appeals?
A) The producers and distributors were held liable because they should have foreseen
the dangers involved.
B) The producers and distributors were held strictly liable regardless of whether they
should have foreseen the dangers involved.
C) The producers and distributors were not held liable because a minor, not an adult,
did the shooting.
D) The producers and distributors were not held liable because the actions of the minor
were not reasonably foreseeable.
E) The producers and distributors were held liable because they were notified what the
minor was planning.
Which of the following will you not find regarding an appeal?
A) a multi-judge panel hearing the case
B) briefs filed by both parties
C) witnesses and testimony
D) oral argument
E) petitioners and respondents
How is a periodic tenancy terminated?
A) automatically, at the end of the lease term
B) through appropriate notice by the landlord at the end of any payment interval
C) through appropriate notice by the tenant at the end of any payment interval
D) through appropriate notice by either party at the end of any payment interval
E) by either party, with notice not being necessary
Sandy was in her sixties and had a single child, a daughter, Tonya, who was
approaching her fortieth birthday. Sandy wanted to do something special for Tonya's
fortieth birthday. Tonya approached a local contractor and decorator and discussed this
with them. Sandy, the decorator and the contractor entered into a contract wherein the
contractor would construct an addition onto Tonya's house, expanding her kitchen into a
large combination kitchen and family room. In addition, all of the kitchen countertops,
cabinets and appliances would be replaced. With the assistance of the decorator, new
furniture would be acquired and all of the wall coverings and window treatments would
be replaced. Because Sandy did not want her tastes imposed on Tonya, the contract
contained a clause that read, "All work must meet the personal satisfaction of Tonya."
Tonya thought that this was a great birthday present and enjoyed working with the
decorator and contractor in working out the details of the project. She had been so busy
as the project approached its conclusion that she hadn't really stopped to look it over
closely. One Sunday she examined all the work closely and found several problems.
She then told the contractor that part of the kitchen countertop was not level and that
anything spilled on it would immediately run off onto the floor. She decided that she did
not like the placement of some of the kitchen cabinets and wanted them changed. She
also said that many of the seams on the wallpaper had gaps that were too large. Lastly,
she said that the color of the paint on the wood trim was too dark. Although Tonya was
happy with the new floor, she was upset that the contractor had subcontracted its
installation rather than install it himself. The contractor brought in an outside consultant
who said that all workmanship except for the countertop exceeded normal standards.
Two other decorators said that the color of the woodwork was proper. The contractor
refused to make any changes. Tonya is unhappy with the work and wants to sue the
contractor and also wants to sue her mother. Discuss this situation.
When does the risk of loss pass to a bailee?
A) When the buyer refuses delivery of the goods.
B) When the seller delivers a document of title to the buyer, but before the buyer takes
possession of the goods.
C) When the contract is made between the buyer and seller, but before the buyer takes
possession of the goods.
D) If the bailee refuses to acknowledge the buyer's right to the possession of the goods.
E) The risk of loss never passes to the bailee.
What is the effect of an incontestability clause?
A) The insured cannot file a claim more than a specified time following the insured
event.
B) The insurer cannot challenge the information in the application after a specified
time.
C) The insured is required to not challenge the statements made by its own agent.
D) The state is prevented from challenging any claim payment decisions of the insurer.
E) The insurer is prevented from canceling an insurance policy due to nonpayment.
