DR-CAFTA removed all tariffs and trade restrictions among member nations.
The debtor’s Chapter 13 plan of payment is summarily rejected if an unsecured creditor
doesn’t accept the plan.
Credit extension is a common occurrence with regard to debit cards.
Principals are bound by authorized or unauthorized contracts made by their independent
contractors.
According to corporate citizenship theory, businesses should focus only on improving
the wealth of its shareholders.
Discharge of unsatisfied debts can be denied if the debtor made false representations
about his or her financial position.
A finder of abandoned property obtains possession but not the title.
The FDA is authorized to issue permits for discharge of dredged or fill material into
navigable waters and qualified wetlands in the United States.
Most indorsements appear on the front of an instrument.
Slovakia and Slovenia are members of the European Union.
Preferred stock, bonds, debentures, and warrants are examples of common securities.
One requirement of an express contract is that it has to be in writing.
Disability insurance provides monthly income to an insured that is disabled and cannot
work.
Employers can maintain a policy of hiring only workers who are 40 years of age or
older without violating the Age Discrimination in Employment Act.
An accredited investor is defined as any natural person who has individual net worth or
joint net worth with a spouse that exceeds $1 million, to be calculated by excluding the
value of the person’s primary residence.
The Berne Convention enforced the need to place the symbol © on a copyrighted work.
The individual debtor is not responsible for paying prepetition debts out of postpetition
income under a Chapter 7 discharge.
The legal rule of imputed knowledge means that the principal is assumed to know what
the agent knows.
Only actual damages, not treble damages, may be recovered for violations of the FTC
Act.
The good faith test applies to both the holder and the transferor of an instrument.
Assault is defined as unauthorized and harmful or offensive direct or indirect physical
contact with another person that causes injury.
In a sale on approval, the goods are subject to the claims of the buyer’s creditors before
the buyer accepts them.
The UN General Assembly is composed of 15 member nations.
The United States presently grants absolute immunity to foreign governments from
suits in U.S. courts with no exceptions.
A term LLC may be continued as an at-will LLC by a simple majority vote of the
members of the LLC.
The maximize profits theory holds that the interests of all stakeholders related to an
organization are important.
Due to the Miranda rights, the evidence obtained from an unreasonable search and
seizure can generally be prohibited from introduction at a trial.
Air rights allow landowners to privatize the airspace above their lands, and levy charges
against violators or trespassers.
The NEPA and EPA regulations require only state governments to prepare an
environmental impact statement (EIS) for proposed legislations.
The First Amendment’s Freedom of Speech Clause protects both speech and conduct.
Different customs tariffs are established by different EU countries for trade with the rest
of the world.
The filing of a Chapter 11 petition stays actions by creditors to recover the debtor’s
property.
Under the Statute of Frauds, it is not necessary for promises to write a will to be in
writing.
If no other form of business organization is chosen, the business is by default a general
partnership.
During plea bargain negotiations, the accused admits to a lesser crime than charged in
exchange for a lesser sentence.
A valid informal contract is just as enforceable as a valid formal contract.
An instrument that is not payable to a specific payee or indorsee is known as a(n)
________.
A) order paper
B) bearer paper
C) allonge
D) draft
Mansfield Dairies entered into a contract with Aratez, Inc., a dairy product food
processing company, to provide dairy products for a period of four years. The contract
included a provision for a one-year limitation period in case of breach. But with less
than a year left on the contract, Mansfield Dairies stopped shipment of milk products to
Aratez, Inc. Under the UCC statute of limitations, which of the following would be true
with reference to Aratez, Inc.’s right to bring a lawsuit against Mansfield Dairies?
A) The lawsuit can be filed any time within one year from the breach.
B) The lawsuit can be filed only after the expiration of the contract.
C) The lawsuit cannot be filed as there was less than a year left to complete the
contract.
D) The lawsuit can be filed any time within four years from the breach.
Karen has a checking account at First Bank. Karen writes a check to Bonanza
Apartments for her rent. Which of the following is true of this situation?
A) Karen is the drawer, First Bank is the drawee, and Bonanza is the payee.
B) Karen is the drawee, First Banks is the drawer, and Bonanza is the payee.
C) Karen is the payee, First Bank is the drawee, and Bonanza is the drawer.
D) Karen is the payee, First Bank is the drawer, and Bonanza is the drawee.
Carl is an accountant who helped Sireus, Inc. to evaluate and sell its securities. Mark,
who purchased the securities, finds that they have been overvalued. Which of the
following statements is true of this scenario?
A) Carl has violated Section 10(b) and Rule 10b-5 of the Securities Exchange Act of
1934 if he is guilty of ordinary negligence.
B) Mark can bring a civil private cause of action and seek monetary damages under
Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934.
C) Mark cannot sue Carl as he is not in a privity of contract relationship with him.
D) Mark cannot sue Carl as Mark is only an incidental beneficiary of Carl’s work.
Which of the following policies helps a corporate officer from being sued for honest
mistakes made on behalf of a corporation?
A) duty of loyalty
B) duty of obedience
C) business judgment rule
D) self-dealing
In the U.S. Supreme Court, if all the justices voting agree as to the outcome and
reasoning used to decide a case, it is considered a ________ decision.
A) tie
B) plurality
C) majority
D) unanimous
A check that has been modified without authorization and thus modifies the legal
obligation of a party is known as a(n) ________.
A) stale check
B) incomplete check
C) altered check
D) forged check
The ________ created a federal administrative agency that is empowered to administer
federal securities law.
A) Securities Act of 1933
B) Securities Exchange Act of 1934
C) Sarbanes-Oxley Act of 2002
D) Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
Which of the following can a defendant raise a defense against a plaintiff who
voluntarily participated in an activity that had a high probability of resulting in injury to
the plaintiff?
A) superseding event
B) comparative fault
C) assumption of risk
D) intervening event
Which of the following is true of a voting trust agreement drafted by shareholders of a
corporation?
A) It must be a tacit, unwritten contract.
B) It may exceed 10 years.
C) It is closed to inspection by the shareholders of the corporation.
D) It must be filed with the corporation.
The violation of a statute that proximately causes an injury is termed as ________.
A) disparagement
B) res ipsa loquitur
C) negligence per se
D) misappropriation
Price fixing is a ________ violation of Section 1 of the Sherman Act.
A) reasonable
B) per se
C) justifiable
D) permissible
The legislative branch of the U.S. federal government is ________.
A) monocameral
B) bicameral
C) tricameral
D) polycameral
Which of the following is a moral theory of business ethics?
A) moral minimum
B) corporate citizenship
C) stakeholder interest
D) utilitarianism
Nestor, a stockholder of a software firm, is unable to attend the annual shareholders’
meeting conducted by the firm. He authorizes his friend, Matt, to attend the meeting on
his behalf and vote Nestor’s shares in his name. To formalize this, he composes and
signs a written document that grants Matt the appropriate privilege. The document is
then sent to the software firm. This document is an example of ________.
A) a verdict
B) an implied warranty
C) tacit contract
D) proxy
A(n) ________ is a term for a mark that has become a common term for a product line
or type of service and therefore has lost its trademark protection.
A) service mark
B) orphan work
C) generic name
D) hallmark
If the U.S. Supreme court reaches a tie decision, ________.
A) the lower court decision in the case is overturned
B) the lower court decision in the case is affirmed
C) the case will be returned to the Circuit Court of Appeals to reconsider the case in
light of the tie decision by the Supreme Court
D) the decision will be held in abeyance until one of the justices decides to change his
or her mind
________ is a process that establishes the right of a secured creditor against other
creditors who claim an interest in the collateral.
A) Disposition of collateral
B) Retention of collateral
C) Perfection of a security interest
D) Repossession of a security interest
The ________ was a document that restricted the newly created U.S. federal
government from levying and collecting taxes, regulating commerce with foreign
countries, and regulating interstate commerce.
A) U.S. Constitution
B) Declaration of Independence
C) Bill of Rights
D) Articles of Confederation
Which of the following is a similarity between the seller’s right to withhold delivery and
the right to stop delivery of goods in transit?
A) Both prevent the good involved from reaching the buyer.
B) Both require a decree of specific performance to be enforced on the buyer.
C) Both allow the seller to exercise his or her right to replevy goods from the buyer.
D) Both restrict the seller from exercising his or her right to replevy goods from the
buyer.
Santo belongs to the Eliok tribe in an Indian reservation in southern Nevada. He wants
to open a casino in the reservation. However, the state authority denies the tribe
permission to open a casino in its own territory. Which of the following permits the
tribe to bring suit in federal court and force the state to comply?
A) the Establishment Clause
B) the Indian Gaming Regulatory Act
C) the Dormant Commerce Clause
D) the Indian Reorganization Act
Which of the following government agencies is empowered to enforce the CAN-SPAM
Act?
A) Securities and Exchange Commission
B) Central Intelligence Agency
C) Federal Trade Commission
D) Federal Communications Commission
Which of the following is a remedy for the violations of Title VII?
A) Successful plaintiffs can recover back pay and reasonable attorneys’ fees.
B) Courts can revoke the fictional seniority provided to a plaintiff.
C) Employers can lower the wages of other employees.
D) Punitive damages are awarded against employees.
Which of the following is a right to remedy that a seller can claim while the goods are
in possession of the buyer?
A) right to dispose of goods
B) right to withhold delivery of goods
C) right to stop delivery of goods in transit
D) right to reclaim goods
An offer is terminated on the grounds of “lapse of time” if ________.
A) the offeror dies before the offeree has accepted the offer
B) the offer is not communicated to the offeree
C) the offeror has communicated to the offeree a set time which is not mentioned in the
offer
D) the offer is not accepted within a stated time period
A(n) ________ is a member of the board who is not an officer of the corporation.
A) outside director
B) shareholder
C) stakeholder
D) inside director
When an indorsement on an instrument has been forged or is unauthorized, the loss falls
on the party who first takes the forged instrument after the forgery. Which of the
following is an exception to this rule?
A) the FTC HDC rule
B) the exclusionary rule
C) the imposter rule
D) the good faith rule
Which of the following statements is true about a corporation being a general partner in
a limited partnership?
A) A corporation can be a general partner in a limited partnership, but only if it is not
the sole general partner.
B) A corporation can be a general partner in a limited partnership, even if it is the only
general partner.
C) A corporation can be a general partner in a limited partnership, but only if another
corporation is a limited partner.
D) A corporation can be a general partner in a limited partnership, but only if there is at
least two or more general partners.
The amount of money a drawer owes a bank after it has paid a check despite the
drawer’s account having insufficient funds is termed ________.
A) overdraft
B) undercurrent
C) original tenor
D) acquired tenor
A ________ is a type of ownership of real property that grants the owner the fullest
bundle of legal rights that a person can hold in real property.
A) fee simple absolute
B) life estate
C) servient estate
D) fee simple defeasible
Miranda Airways, a commercial air carrier, has a contract with Wurtherton Inc., an
airplane manufacturer, to purchase a new plane. Due to a sudden shortage of cash,
Miranda Airways goes to MetrosBank. MetrosBank issues a document to Wurtherton
that if Miranda does not pay for the transaction, MetrosBank would. Wurtherton
considers the offer, and then sends an acceptance with additional terms. The additional
terms stipulates that Miranda Airways could have the new airplane for a period of 10
years, and then return it to Wurtherton. Miranda Airways agrees to the acceptance, and
Wurtherton hands the new airplane over to them. Which of the following documents did
MetrosBank issue to Wurtherton to help Miranda Airways secure the airplane?
A) a bill of exchange
B) a pro forma invoice
C) a letter of credit
D) a remittance advice