Federal trademark protection may be obtained for the symbol of the U.S. flag.
a. True
b. False
A registration statement becomes public immediately on filing with the SEC, but a
prospectus only becomes public upon signature of the chief financial officer.
a. True
b. False
The essential characteristic of ethical fundamentalism is a reliance upon a central
repository of wisdom.
a. True
b. False
Congress enacted the Administrative Procedure Act in 1946.
a. True
b. False
The Supreme Court has recently held that the Constitution prevents all employers from
subjecting employees to drug testing without first obtaining a search warrant.
a. True
b. False
A(n) __________ is a general invitation to all of the shareholders of a target company
to tender their shares for sale at a specified price.
a. compulsory share exchange.
b. tender offer.
c. buyout.
d. None of these.
Pedro receives an unordered three-CD set in the mail accompanied by the statement,
“This CD set can be purchased for the special price of $19.95. If the CDs are not
returned within two weeks they will be deemed accepted and the payment is due within
30 days of receipt of the CDs. Pedro is under no obligation to either return the CDs or
to pay for them; he may use them or give or throw them away.
a. True
b. False
Eminent domain is not one of the recognized inherent powers of government.
a. True
b. False
a. What is a fee simple?
b. What is a life estate?
c. If Ed grants a life estate to his wife, what interest does he retain? Explain.
A crime is:
a. a private wrong that necessitates litigation between the victim and the perpetrator.
b. any act prohibited by the government or an omission of an act required by public law
and made punishable by the government in a judicial proceeding brought by it.
c. litigation where the injured party sues to recover compensation for the damages and
injury sustained as a result of the defendant’s wrongful conduct.
d. wrongful conduct as set forth in statutes that constitute the supreme law of the land.
Archie bets his friend Jerry $100 that the Packers will win the next Super Bowl. This is
an:
a. unconscionable contract and therefore illegal.
b. illegal wagering agreement.
c. agreement to obstruct justice and therefore illegal.
d. illegal restraint of trade.
In bankruptcy law, an insider may include:
a. a relative.
b. a general or limited partner of the debtor.
c. the trustee.
d. Both (a) and (b).
In some states, the authority of an agent to sell land must be in writing and signed by
the principal.
a. True
b. False
Under which ethical system would it be ethical to compel a few citizens to undergo
painful or fatal medical tests in order to develop cures for the rest of the world?
a. Utilitarianism.
b. Ethical fundamentalism.
c. Distributive justice.
d. Libertarianism.
The contract between the buyer and the seller may expressly limit or exclude
consequential damages so long as the contract is not unconscionable.
a. True
b. False
There are two distinct types of fraud.
a. True
b. False
The majority of states allow the injured party who has been induced to enter into a
contract by fraud to recover only “out-of-pocket” damages equal to the difference
between the value of what she has received and the value of what she has given for it.
a. True
b. False
Albert has a contract to buy 100 tables from Bartholomew at a price of $50 a table. Five
days before Bartholomew is to deliver the tables, he calls Albert to say that he is sorry
but $50 won’t cover his costs, and he will now need at least $75 a table. Albert agrees,
because he needs the tables for his special sale. The modified contract is enforceable
even though Albert isn’t getting any new consideration, so long as Bartholomew is
acting in good faith and the agreement to the new price is put in writing.
a. True
b. False
Regarding trademark protection:
a. federal registration is required to establish rights in a mark.
b. an owner may abandon the mark through non-use and lose protection.
c. the owner will be presumed to have abandoned the mark after two years of non-use.
d. All of these.
As of 2011, the majority of states had adopted the 2003 Amendments to Article 2 of the
UCC.
a. True
b. False
No person may become a member of a partnership without the consent of all the
partners.
a. True
b. False
A court will not grant a discharge under Chapter 7 to a debtor who:
a. has been granted a Chapter 7 or 11 discharge within eight years prior to filing.
b. has made false claims to the court.
c. has destroyed collateral.
d. All of these.
Under the Sherman Act, price fixing is the primary and most serious example of a per
se violation.
a. True
b. False
Jack has been on the board of his brother’s company for three years but has never
attended a board meeting. He may be liable for failing to act.
a. True
b. False
A felony is a more serious type of crime than a misdemeanor.
a. True
b. False
Which of the following is untrue regarding the contracts of incompetent persons?
a. An incompetent person is liable for necessaries.
b. Unlike a minor, an incompetent person can never ratify a contract.
c. To avoid a contract, a person need not be permanently incompetent.
d. Under the cognitive ability test, a person is incompetent if he is unable to understand
the nature and effect of his act.
The FIFRA registration is legal only if:
a. it is completed within 60 days of the pesticides distribution.
b. the pesticide complies with FIFRA labeling requirements.
c. the pesticide will not cause any adverse environmental effects when used in
accordance with commonly recognized practice.
d. All of these.
Sarah is planning to incorporate a new landscaping company, “Evergreen and Growin’.”
She has held herself out as an agent for Evergreen and has contracted to buy a truck,
tools, fertilizer, and seed and also has entered into a lease on behalf of Evergreen for an
office. When she fails to get the loan from the bank, she cannot start the business, so
she cancels all the contracts. What are the consequences?
a. Sarah can cancel all the contracts with no personal liability if she told them she was
acting as an agent and expressly warranted that she would not be responsible.
b. Sarah may be held personally liable on the contracts because she misrepresented to
third parties that she had authority to make contracts on behalf of a non-existent
corporation.
c. Since the company never existed, she gave no implied warranty.
d. Sarah will be held liable for the contracts only if she ever gets the loan.
According to the 1994 amendments to the Bankruptcy Act, the U.S. Judicial Conference
must adjust for inflation the dollar amounts of the requirements for filing involuntary
cases, priorities, and exemptions every seven years.
a. True
b. False
When a minor falsely advises the other party that he is of the age of majority and based
upon that misrepresentation, the other party enters into a contract with the minor:
a. the minor has lost his right to disaffirm the contract because of the misrepresentation
if the adult party in good faith reasonably relied on the misrepresentation.
b. the adult party can recover damages from the minor in tort.
c. the minor is required to restore the other party to the position occupied before the
making of the contract.
d. There is no uniform rule. States differ, and depending upon the state, any of the
above could be correct.
A shareholder who opposes a fundamental change to the corporation may make a
written or oral demand within the prescribed time period in order to be entitled to
payment for his shares.
a. True
b. False
Philip has been in training for several months and now plans to run in the
school-sponsored, 10-mile, fun-run mini-marathon. He completes and signs an entry
blank which contains the statement, “I hereby agree to hold the sponsors harmless for
any injury sustained as a result of participation in this event no matter how such injury
may be caused.”
a. What is the legal term for this clause in the agreement?
b. Is the clause valid and legally enforceable? Explain its legal effect.
Which of the following defenses may be raised by an accountant under Section 11 of
the 1933 Securities Act?
a. Privity and due diligence.
b. Privity, but not due diligence.
c. Due diligence, but not privity.
d. Neither privity nor due diligence.
Harvey’s Car Rental rents Darlene an intermediate-size car at $159 per week for her
business trip. What is the relationship between Harvey’s and Darlene?
a. A bailment for mutual benefit.
b. A bailment for the sole benefit of the bailee.
c. A bailment for the sole benefit of the bailor.
d. The temporary transfer of title to Darlene.
A debt is an obligation to pay money owed by a debtor to a creditor.
a. True
b. False