The Second Amendment to the U.S. Constitution reserves all powers not delegated to
the national government to the states.
a. True
b. False
If a life insurance applicant pays a premium but dies before the physical exam, there is
obviously no coverage.
a. True
b. False
The only way that a party can discharge a contract is by performance.
a. True
b. False
There are twelve justices on the United States Supreme Court.
a. True
b. False
Leo enters into a contract with Metro Taxi Company to work as a cabdriver. Under the
plain meaning rule, if the contracts writing is clear and unequivocal, the meaning of the
terms must be determined from
a. anyextrinsic evidence.
b. only relevant extrinsic evidence.
c. the face of the instrument.
d. the later testimony of the parties.
Jackson is accused of a crime. Jackson can refuse to provide information about his
allegedly criminal activities
a. if he suspects the information will be used to prosecute him.
b. if the police do not promise to keep the information confidential.
c. if the information is “fruit of the poisonous tree.
d. under no circumstances.
To resolve a dispute, Amy in Boston and Chris in Denver utilize E-Solution, an online
dispute resolution (ODR) service. This limits these parties recourse to the courts
a. not at all.
b. until the ODR service has issued a decision.
c. with respect to any dispute arising between them.
d. with respect to this dispute only.
Once a writ of execution has been issued, the debtor cannot pay the judgment and
redeem the property until aftera sale has taken place.
a. True
b. False
The public disclosure of private facts about a person is an invasion of privacy.
a. True
b. False
Ordinarily, “ignorance of the law is a valid defense to criminal liability.
a. True
b. False
Crimes occurring in a business context are popularly referred to as white-collar crime.
a. True
b. False
Donald applies for a life insurance policy with Equity Insurance Company through
Fletch, an agent who works for Equity. Donald pays the initial premium. Fletch writes a
binder, which
a. acknowledges the application and promises to consider it.
b. attests to the truth of each statement in the application
c. evidences receipt of the payment of the initial premium.
d. indicates that a policy is pending and states its essential terms.
Farouk uses his computer to break into Global Financial Centers computer. Farouk is a
a. hacker.
b. phisher.
c. worm.
d. virus.
An employer may avoid laws regulating monitoring activities by informing employees
that they are subject to monitoring.
a. True
b. False
Dan, a computer programmer, holds a garage sale to sell a lawnmower, some clothes,
some CDs and some old clothes. Will, a lawyer,sells Thelma his collection of seashells.
Philip, a CEO of a successful company, sells George his pet parakeet. Judy, an expert
horse trainer, sells Bob a horse. Which person would be considered a merchant under
the UCC?
a. Dan
b. Will
c. Judy
d. Philip
A partner is entitled to make secret profits or put self-interest before his or her duty to
the interest of the partnership.
a. True
b. False
Corporate officers can usually be removed by the board of directors without cause.
a. True
b. False
The government of Japan sets a limit on the amount of rice that can be imported from
the United States. This is
a. a dumping duty.
b. an antidumping duty.
c. a quota.
d. a tariff.
Sonny agrees to buy a unique collection of Olympics memorabilia for $7,000 from Jana
and sends $1,500 as a down payment. When Sonny sends Jana the rest of the price, she
refuses to ship the collection. Sonny should seek
a. a penalty.
b. liquidated damages.
c. restitution.
d. specific performance.
Every shareholder is entitled to inspect corporate records for a proper purpose.
a. True
b. False
A contract is sometimes voidable if one party is aware that the other party made a
mistake of fact.
a. True
b. False
Compensatory damages compensate an injured party for damages arising from the loss
of a bargain caused by a breach of contract.
a. True
b. False
Celfone Corporation is required to file a registration statement with the Securities and
Exchange Commission. This statement must contain
a. a copy of prospectuses to be provided to investors.
b. a description of securities being offered for sale.
c. a record of pre-registration sales in securities.
d. a sample of advertising to be used to attract investments in Celfone.
When there is a breach of an underlying contract for which an instrument was issued,
the maker of a note can refuse to pay it.
a. True
b. False
Marta buys a candy bar for $5 and signs a contract for delivery of fresh flowers to her
mothers nursing home every week for the rest of her mothers life. She then enters into a
contract to assume Georges debt to FastCars Dealership. Marta receives no personal
benefit from assuming Georges debt. The Statute of Frauds covers
a. the candy purchase only.
b. the candy purchase and the delivery contract only.
c. the contract to assume Georges debt only.
d. the contract to assume Georges debt and the delivery contract only.
GR8 Stuf Company files a registration statement with the SEC before making an
offering to the general public. The registration contains false, immaterial statements of
which the investors are unaware. GR8 Stuf is charged with violating the Securities Act
of 1933. GR8 Stufs best defense is
a. the investors were not aware of the misrepresentations.
b. the issuer reasonably believed the misstatements were true.
c. the offering was made available to the general public.
d. the untrue statements were not material.
According to the Foreign Sovereign Immunities Act, a foreign state that has committed
a tort in the United States is protected from the jurisdiction of the U.S. courts.
a. True
b. False
Helen owns heavy construction equipment and the tools to service it, as well as office
furniture, including computers. Ilya owns a number of pat-ents, trademarks that identify
the products made under those patents, and stock in the company that sells those
products. Personal property in-cludes the items owned by
a. Helen and Ilya.
b. Helen only.
c. Ilya only.
d. neither Helen nor Ilya
Greta is a member of Hovercraft LLC. As a member, Greta is
a. a manager or officer, but not an owner.
b. an investor, but not a manager, officer, or owner.
c. an owner.
d. a participant, but not an investor, manager, officer, or owner.
Robert owns Textbooks Plus, a sole proprietorship that sells textbooks. When Robert
dies, Textbooks Plus will
a. be automatically dissolved.
b. pass directly to his oldest child.
c. pass directly to the state.
d. be evenly divided among all Roberts heirs.
Quality Energy Company, a U.S. firm, and Royal Petro, a Dutch firm, en-ter into a
contract that includes an arbitration clause. This clause must provide that the arbitrator
will be
a. any specified third party.
b. the American Arbitration Association.
c. the Dutch Arbitration Organization.
d. the International Chamber of Commerce.
A covenant not to sue does not always bar further recovery.
a. True
b. False
Jake is charged with embezzlement. Embezzlement may be committed without
a. a criminal act.
b. a criminal intent.
c. taking property from its owner.
d. the use of force or fear.
Ida, Jerzy, and Kit are the directors of Liberty Convenience Stores, Inc. Liberty has nine
officers and forty-six shareholders. Dividends are ordered by the firms
a. board of directors.
b. incorporators
c. officers.
d. shareholders.
A Montana state court can exercise jurisdiction over Endurance Insurance Corporation,
an out-of-state defendant, if the defendant has
a. minimum contacts with the state.
b. optimum contacts with the state.
c. any contacts with the state.
d. no contacts with the state.