The RMBCA provides that shareholders:
a. have no preemptive rights unless the articles of incorporation so provide.
b. have preemptive rights regardless of what the articles of incorporation provide.
c. cannot have preemptive rights.
d. have preemptive rights with respect to the transfer of a block of stock as
consideration.
Claims for wages, salaries, or commissions have priority in the payment of unsecured
debts over:
a. costs and expenses of the administration of the bankruptcy case.
b. claims arising in the ordinary course of business after commencement of the case.
c. claims arising for contributions to employee benefit plans.
d. none of the above.
If a contract contains a delivery term of __________, the seller’s responsibility is to get
the goods to the buyer.
a. FOB place of shipment
b. FOB place of destination
c. CIF place of shipment
d. CIF place of destination
Which statement is incorrect concerning the law of nuisance?
a. Not every interference with the use or enjoyment of property is a nuisance.
b. Even if an activity is otherwise lawful, it is the effect on others that determines
whether there is a nuisance.
c. The proper use of land does not constitute a nuisance as to a neighbor, even though
the neighbor does not like the use.
d. A plaintiff may obtain damages from the party who has committed a nuisance, but the
plaintiff cannot have the nuisance enjoined.
A forged or unauthorized endorsement is by definition:
a. an endorsement of the person by whom it appears to have been made.
b. no endorsement of the person by whom it appears to have been made.
c. binding on the party who refuses to ratify the instrument.
d. incapable of being ratified.
Barry and Eldridge owned Blueacre as tenants in common. Eldridge died. Blueacre is
owned:
a. solely by Barry because of the survivorship feature.
b. jointly by Barry and the state because of escheat.
c. by Barry and Eldridge’s heirs.
d. solely by Eldridge’s heirs.
Which of the following situations reflects a possible conflict of interest?
a. You offer a company contract to a friend without checking competing bids.
b. You hire a relative for a company position although another candidate is more
qualified.
c. You buy a piece of realty that would be suitable for a planned company project.
d. All of the above.
An agreement under which one party agrees to pay drafts drawn by a creditor is called
a:
a. contract of surety.
b. guaranty contract.
c. letter of credit.
d. debtor’s agreement.
The United States Supreme Court was created by:
a. Congress.
b. the President.
c. the Uniform State Law Commission.
d. none of the above.
Which is not considered an alternate means of dispute resolution?
a. civil lawsuit
b. arbitration
c. association tribunals
d. minitrial
A change of law discharges a contract if the new law:
a. requires a license and none was required before.
b. requires the use of fireproof materials.
c. requires the use of antipollution devices.
d. prohibits the act called for by the contract.
Letters testamentary:
a. are given to an administrator.
b. are given to an executor.
c. require a bond to be filed by the person to whom they are given if the will exempts
the requirement.
d. none of the above.
When one party notifies another party that he/she will not perform the contract and such
notification is given in advance of the contract deadline:
a. an anticipatory repudiation has occurred.
b. a repudiation has occurred.
c. both a. and b.
d. none of the above.
The term apparent authority is used when there is:
a. no interaction between the principal and third persons.
b. actual authority.
c. only the appearance of authority and that appearance of authority was created by the
principal.
d. only the appearance of authority and that appearance of authority was created by the
agent.
In reviewing agency action, courts generally apply the:
a. “beyond a reasonable doubt” standard.
b. “preponderance of the evidence” standard.
c. “arbitrary and capricious” standard.
d. “rational relationship” standard.
When an employee knows that an illegal action has occurred through corporate activity,
such knowledge is:
a. imputed to the corporate employer.
b. imputed to the corporate employer, but only if the employer was in a position to have
reasonably known of the illegal activity.
c. a basis of liability for the corporation if knowledge can be established.
d. not a basis to impute such knowledge to the corporate employer.
Computer crimes include:
a. theft of hardware.
b. theft of software.
c. intentional damage to information stored on a computer.
d. all of the above.
In determining whether limited use of copyrighted material may be permitted as “fair
use,” courts will consider:
a. the purpose and character of the use, including whether such use is of a commercial
nature or is for nonprofit educational purposes.
b. the nature of the copyrighted work.
c. the amount and substantiality of the portion used in relation to the copyrighted work
as a whole.
d. all of the above.
If a contractually-specified mode of transportation is not available, the:
a. contract is automatically voided.
b. seller must make delivery by a commercially-reasonable substitute.
c. buyer must arrange to pick up the goods.
d. seller must make personal delivery.
A said to B, “I’ll give you $100 for that bracelet.” B replied, “$135.” A said, “No
thanks.” B then said that B accepted the $100, but A was no longer interested and said
there was no contract. B insists there is a contract. Result?
a. A’s offer of $100 was open and accepted by B, thereby forming a contract.
b. B’s counteroffer of $135 terminated A’s offer of $100.
c. B’s statement, “$135” was a negotiating statement that did not terminate A’s original
offer of $100.
d. A’s offer of $100 was irrevocable.
Cumulative voting:
a. decreases the voting power of minority shareholders.
b. is a form of voting trust.
c. generally is required or allowed in the election of corporate directors.
d. is a right given to participating preferred shareholders.
An executory contract is:
a. void if neither party has performed.
b. voidable.
c. entered into but not fully performed.
d. always unilateral in nature.
A landlord is most likely liable to a tenant who is injured by:
a. a defective condition of the leased premises that is under the control of the tenant.
b. an obvious condition of the leased premises known to the tenant at the time the lease
was made.
c. an unforeseeable criminal act of a third person.
d. the criminal act of a third person, when such conduct was reasonably foreseeable.
The answer to the complaint is filed by the:
a. defendant.
b. moving party.
c. plaintiff.
d. none of the above.
Which of the following is an example of a legal restriction that may be imposed on a
tenant’s deposit?
a. a statutory limitation on the amount of the deposit
b. a requirement that the landlord hold the deposit in a trust fund
c. a requirement that the landlord pay interest for the period the deposit is held
d. all of the above
A security interest will be perfected without filing when:
a. the transaction involves any consumer goods.
b. the transaction involves inventory goods.
c. the transaction involves equipment.
d. the transaction involves a purchase money security interest in consumer goods.
For property insurance, an insurable interest must exist:
a. at the time the policy is purchased.
b. at the time of the loss.
c. both at the time the policy is purchased and at the time the loss is sustained.
d. for at least thirty (30) days before the loss is sustained.
Normally in a franchise operation:
a. both the franchiser and the franchisee will be liable to third persons for contracts that
are breached by the franchisee.
b. only the franchisor will be liable to third persons for contracts that are breached by
the franchisee.
c. only the franchisee will be liable to third persons for contracts that are breached by
the franchisee.
d. neither the franchisor nor the franchisee will be liable to third persons for contracts
that are breached by the franchisee.
Fraud in the inducement is a:
a. limited defense not available against a holder in due course.
b. universal defense available against all holders.
c. limited defense available against all holders.
d. universal defense not available against a holder in due course.
The Fair Credit Reporting Act applies to:
a. consumer credit.
b. commercial credit.
c. business credit.
d. consumer and commercial credit.
An agent making a proper contract with a third person on behalf of a disclosed
principal:
a. has no personal liability on the contract.
b. is liable only to the principal on the contract.
c. is liable only to the third party on the contract.
d. is personally liable to both the principal and the third person on the contract.
Generally, speech on the Internet is not entitled to First Amendment free speech
protection.
Licensing involves the transfer of title of goods to a distributor who bears the financial
and commercial risks for the subsequent sale of the goods.
Former employees who are competing with their former employer may be enjoined
from using information about suppliers and customers that they obtained while
employees, even if this information is not of vital importance to the employer’s
business.
A warehouse receipt is considered a document of title.
A homeowner’s policy commonly provides protection from losses caused by theft.
Every trust must have a beneficiary.
Generally, a secured creditor who has repossessed collateral may retain the collateral
and cancel the debt.
Women who are unable to work as a result of pregnancy, childbirth, or related medical
conditions must be provided the same benefits as all other workers. Such benefits
include temporary disability insurance, long-term disability insurance, and sick leave.
Janet Jones sold the assets and liabilities of her coin-operated laundry to Kevin Katz for
$10,000. The assets of the business included all of the washers and dryers. The
liabilities included the amounts still owing on seven new dryers, which had been
purchased recently from Dryer Company under an installment contract. Katz agreed to
make the installment payments on the new dryers as they came due. After Katz failed to
make an installment payment when it was due, Dryer Company sued Jones. Jones
claimed she no longer was liable. How will the court decide?
A consumer who notifies the issuer of an EFT card within two (2) days after learning of
a loss or theft of the card can be held to a maximum liability of $500 for unauthorized
use of the card; failure to notify within this time will increase the consumer’s liability
for losses to a maximum of $5,000.
A buyer who elects to cancel a contract because of the seller’s breach may not later sue
for breach of contract.
Jurisdiction over bankruptcy proceedings is vested in the federal district courts.
The business judgment rule is applied by the courts as a presumption that must be
overcome by the person challenging a director’s actions.
Consumer protection law often requires those dealing with consumers to make certain
mandated disclosures.
Title to abandoned property may be acquired by the first person who obtains possession
and control of it.