Finn and Glenda want to form and do business as Hobby Crafts Corporation. A
corporation is a legal entity created and recognized by
a. a central federal administrative agency.
b. a city or county clerk’s office.
c. an artificial legal person.
d. state law.
Ronaldo agrees to pay Simplex Cash Store a debt that is otherwise dischargeable in
bankruptcy. This is
a. a reaffirmation.
b. a liquidation.
c. a reorganization.
d. a petition.
Urbana performs a contract with Virgil to add a sun porch to Virgil’s house, but Virgil
does not pay. In most states, Urbana can create a lien and place it on Virgil’s property by
filing
a. a written guaranty contract.
b. a writ of attachment.
c. a writ of execution.
d. a written notice of lien.
Impersonating Sophie, Ralph makes provocative comments online that deceive others
into threatening Sophie, putting her in reasonable fear for her safety. Under federal law,
this is
a. a crime only if a person who believes the comments acts on them.
b. a crime only if Sophie and Ralph are in the same jurisdiction.
c. not a crime.
d. a crime.
Mead, Nero, and Olen do business as Pipe & Plumbing Services. After Mead’s
relationship to the firm ends, Nero and Olen agree to discontinue the business. This is
a. dissociation.
b. dissolution.
c. gross negligence.
d. simple misconduct.
Modern Clothing, Inc., and National Denim Corporation use the mark “Made by
Members of the U.S. Textile Workers Union” on the tags of their products to indicate
the participation of the union in the manufacture. Modern and National are not in
business together and do not own this mark. This mark is
a. a certification mark.
b. a collective mark.
c. a service mark.
d. trade dress.
Debit & Credit Accounting Services and Brickwork Construction Company negotiate a
contract. Terms in the contract that are the subject of separate negotiation will be con-
sidered subordinate to
a. standardized terms.
b. terms that can be understood only by lawyers and judges.
c. terms that are not negotiated separately.
d. none of the choices.
Jake is charged with embezzlement. Embezzlement is not robbery because
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.
Iggy uses his computer to break into Hye Technology Company’s computer. Iggy is
a. a hacker.
b. a bot.
c. a botnet.
d. a worm.
Bild-It-Rite Corporation is a public company that is preparing to issue securities that do
not qualify for an exemption from registration. This means that Bild-It-Rite must
a. file a registration statement with the SEC.
b. issue the securities through an online registration site.
c. refrain from issuing the securities to unregistered investors.
d. register the securities with a national stock exchange.
Lita is a holder of preferred stock in Mighty Clean Detergents, Inc. Lita has priority
over holders of Mighty common stock as to
a. nothing.
b. payments of dividends.
c. the date on which Mighty must repurchase the shares.
d. upward changes in the market price of the shares.
Britney, an employee of Computer Associates, is arrested at work. A grand jury issues a
formal charge against Britney for larceny. This charge is
a. an arraignment.
b. an indictment.
c. an information.
d. an inquisition.
North American Properties, Inc., and its officers, directors, and shareholders, buy and
sell securities. Section 16(b) of the Securities Exchange Act of 1934 covers
a. all purchases and sales of securities.
b. only purchases and sales of securities involving misappropriation.
c. only purchases and sales of securities involving short-swing profits.
d. only purchases and sales of securities involving tippers and tippees.
Energy Unlimited, LP, is a limited partnership to which its partners, including Fink,
have contributed capital. Energy’s creditors include Graves Engineering, Inc. On
Energy’s dissolution, its assets will be distributed to pay
a. Fink and Graves proportionately.
b. Fink first.
c. Graves first.
d. neither Fink nor Graves.
A contract between E-Debits, Inc., and First Credit Corporation includes a provision
excluding liability as a result of fraud. This provision is
a. enforceable because the parties are protected from liability.
b. enforceable because the parties consented to it.
c. enforceable if the parties have equal bargaining power.
d. not enforceable.
Jack buys a Kitchens, Inc., franchise, which the franchisor later terminates. In
determining whether the termination was proper, a court will generally
a. balance the rights of both parties.
b. emphasize the right of Kitchens, Inc., to its business operation.
c. focus on the right of Jack to be dealt with fairly.
d. underscore the interest of consumers in affordability.
The United States and other members of a certain organization agree to grant normal
trade relations status on each other with regard to imports and exports. This organi-
zation is
a. the Convention on Contracts for the International Sale of Goods.
b. the International Export-Import Bank.
c. the United Nations.
d. the World Trade Organization.
Cook’s Pantry Appliances, a retail store, must use reasonable care on its premises to
warn its patrons of
a. all risks.
b. hidden risks.
c. obvious risks.
d. no risks.
Liu signs a check “pay to the order of Marv” drawn on Liu’s account in National Bank.
Liu later orders National not to pay the check, but the bank pays it over Liu’s order.
Subsequent checks written on Liu’s account “bounce.” Most likely liable for the costs to
Liu is
a. any party to whom a subsequent check was written.
b. Liu.
c. Marv.
d. National.
Mona asserts that a contract she entered into with Nate is unenforceable. Defenses to
the enforcement of a contract include
a. a desire not to perform.
b. adverse economic consequences.
c. results that do not match expectations.
d. the lack of a party’s genuine assent.
The U.S. Social Security Administration is a federal agency. The Iowa Department of
Social Services is a parallel state agency. If these agencies’ actions conflict
a. the federal agency’s actions will prevail.
b. the state agency’s actions will prevail.
c. the two agencies’ actions will be given equal weight.
d. the two agencies’ actions will cancel each other.
National Ladder Company is subject to regulations issued by the Occupational Safety
and Health Administration (OSHA). Like other federal administrative agencies, the
OSHA was created by
a. Congress, through enabling legislation.
b. the Federal Trade Commission, through the rulemaking process.
c. the president, through an executive order.
d. the U.S. Department of Labor, through a final order.
Like other corporations, Beauty Supplies Corporation can extend its operations through
a. a consolidation.
b. a dissolution.
c. a termination.
d. a winding up.
Hawaii enacts a state law that violates the U.S. Constitution. This law can be enforced
by
a. no one.
b. the federal government only.
c. the state of Hawaii only.
d. the United States Supreme Court only.
Fruitful Garden Company makes and sells pesticides. For the pesticides to remain on
the market, the acceptable level of risk to people of developing cancer from exposure to
the products is
a. one in a hundred.
b. one in a million.
c. one in a thousand.
d. zero.
Global Distribution Corporation suggests that its employees apply the “categorical
imperative” to ethical issues that arise at work. This requires that the employees
a. categorize the issues according to legality, morality, and profitability.
b. consider only the benefits that would accrue to them personally.
c. look only at the result, regardless of the means to attain it.
d. weigh the consequences that would follow if everyone acted the same.
In his will, Vigor makes a gift of $10,000 to Wylie. This is
a. a general bequest.
b. an abatement.
c. a residuary.
d. a specific devise.
Bobbie claims that Carl breached their contract. Carl responds that he never intended to
enter into a contract with Bobbie. The intent to enter into a contract is determined with
reference to
a. the conscious theory of contracts.
b. the objective theory of contracts.
c. the personal theory of contracts.
d. the subjective theory of contracts.
Domino causes a disturbance at El Nino Cafe. He is arrested and charged with
disorderly conduct, a misdemeanor. A misdemeanor is a crime punishable by
a. a fine only.
b. imprisonment up to one year.
c. imprisonment up to six months.
d. imprisonment up to ten days.
Li”l Canine Company (LCC) uses a trademark that neither LCC nor anyone else has
registered with the government. Under federal trademark law, LCC
a. can register the mark for protection.
b. cannot register a mark that has been used in commerce.
c. has committed trademark infringement.
d. must put off registration until the mark is out of use for six months.
Rodeo, S.A., which is based in Spain, enters into a contract for the sale of seven
hydraulic lifts to Tonnage Shipping Company, which is based in the United States. This
contract is governed by
a. Spanish law.
b. the provisions in the laws of both countries that are similar.
c. Article 2 of the UCC.
d. the United Nations Convention on Contracts for the International Sale of Goods.
Lewey’s Bicycle Store contracts to buy fifty bicycles from Mountain Bikes, Inc. Unless
the contract states otherwise, this is
a. a bill of lading.
b. a destination contract.
c. a shipment contract.
d. a warehouse receipt.
Fiona owns one share of stock in GR8 Boards Corporation, as evidenced by a stock
certificate. Fiona loses the certificate. Her ownership of the stock is
a. forfeited immediately.
b. forfeited within ten days of a third party’s claim to ownership.
c. forfeited within thirty days if she cannot find the certificate.
d. not affected.
The legality of an action is always clear.
Shares issued for more than their fair market value are known as watered stock.
A promise to pay for an act that has yet to occur is unenforceable.
A lack or failure of consideration is no defense to payment of a negotiable instrument to
any holder.
A business firm can sometimes predict whether a given action is legal.
Quasi contracts allow the courts to act as if a contract exists when there is no contract.
For federal jurisdictional purposes, a limited liability company can choose to be treated
like a corporation.
An unknown individual launches a series of attacks against the Web sites of Prime Sales
Corporation. The attacks significantly slow the sites, leading to $100 million in damage
in terms of lost work time, lost revenue, site repair costs, and other expenses. The
attacker does not intend to profit from the onslaught and in fact does not realize any
financial benefit from the effects. How is this attack most likely orchestrated? Who is
most likely to engage in this actthat is, whose habits and limitations are clearly suited to
such conductand why?
Failing to use the word consideration in an agreement means that no consideration has
been given.
After a merger, the disappearing corporation retains all of its preexisting obligations.
Most cyber crimes are new crimes.
Plant life is not considered to be real property.
When a secured debt is paid, the secured party must file a termination statement
regardless of the goods’ classification.
A mistake of fact can only be bilateral.
The doctrine of quasi contract applies only if there is an actual contract.
Misrepresentation of an opinion is an element of fraud.
Compensatory damages are only available for victims of intentional employment dis-
crimination.
Expression of all kinds is subject to reasonable restrictions.
The federal government cannot regulate commerce within a state, regardless of the
effect of the commerce on other states.