A condominium differs from a cooperative in that a tenant in the latter:
a. rents his apartment from the cooperative.
b. owns his apartment in cooperation with corporate owner.
c. owns all the space except the common areas.
d. owns only the internal space.
Presentment for payment is one step necessary to charge an indorser with the obligation
to pay.
a. True
b. False
Bob sends Fred a letter offering to sell Fred his car for $2,500. Fred writes back that
he’ll take it. They now must get together and write a memorandum because it is a sale
of goods for over $500.
a. True
b. False
Even if a defendant’s own negligent conduct created an emergency, he will not be liable
for the consequences of the conduct if he acted with care in the resulting emergency
situation.
a. True
b. False
Promoters have a fiduciary relationship with the corporation.
a. True
b. False
Chris receives a printed form in the mail from Wyandott Heating & Air indicating that
he has placed a telephone order for a $600 heater. He doesn’t recall placing the order.
Which of the following is correct?
a. Wyandott can hold Chris to the order.
b. Chris can hold Wyandott to the order.
c. Neither party is bound, because there is no signed writing.
d. Chris is bound if he makes no objection within ten days.
Which of the following is NOT true about a limited liability company?
a. It is a noncorporate business organization.
b. In most states, an LLC must have at least two members.
c. It may elect not to be a separate taxable entity.
d. An ownership interest may be considered a security.
David enters into a contract giving Edward the right of first refusal on a tract of land
owned by David. David subsequently offers the land to Fred without first offering it to
Edward. An appropriate remedy for Edward to seek would be:
a. an injunction.
b. liquidated damages.
c. reformation.
d. punitive damages.
Upon the surety’s payment of the principal debtor’s entire obligation, the surety gets no
rights.
a. True
b. False
Kean and Bubnick are real estate agents who share commissions on joint sales. This
sharing of gross returns establishes a partnership unless Kean and Bubnick have a
written agreement to the contrary.
a. True
b. False
The Clayton Act exempts labor, agricultural, and horticultural organizations from all
antitrust laws.
a. True
b. False
A shareholder may bring a direct suit to enforce a claim that she has against the
corporation, based on her ownership of shares.
a. True
b. False
Ken loaned Barbara $8,000 and took back a note secured by Barbara’s car. If Barbara
files for bankruptcy when the value of the car is $4,500, what is Ken’s status? He has a
(n):
a. secured claim for $4,500.
b. unsecured claim for $8,000.
c. unsecured claim for $4,500.
d. secured claim for $8,000.
When the creditor has been notified that a credit card was lost, the liability of the credit
card holder is limited to:
a. $100.
b. $75.
c. $50.
d. None of these; liability is unlimited.
Notice of dishonor of an instrument must be given:
a. by a bank before midnight of the third banking day following the banking day on
which it receives notice of dishonor.
b. by a bank before midnight on the next banking day following the banking day on
which it receives notice of dishonor.
c. by a nonbank, with respect to an instrument taken for collection, within three
business days following the day on which it received notice.
d. in all situations within seven calendar days following the day on which dishonor
occurred.
Whitley ordered 800 Christmas trees from North Pines Tree Farm to be delivered on
November 24. When the trees arrive, the North Pines must accept tender of payment by
any means or in any manner current, such as a check, in the ordinary course of business
unless North Pines demands cash and allows Whitley a reasonable time within which to
obtain it..
a. True
b. False
Under the CISG, which of the following would not always be considered a material
alteration to an offer?
a. A change in payment.
b. A change in time of delivery.
c. A change in color of goods ordered.
d. The addition of an arbitration clause for settlement of disputes.
Which of the following is true about UCC Article 4A?
a. It is designed to overlap coverage of the Electronic Funds Transfer Act.
b. It covers both credit and debit transactions.
c. It covers wholesale funds transfers.
d. It does not allow parties to vary their rights and obligations by agreement.
Agricultural and urban runoff are examples of point source pollution, which is
inherently more difficult to control than nonpoint source pollution.
a. True
b. False
The ICJ is:
a. the Internal Court of Jurisdiction of the U.N. to deal with disputes within the United
Nations organization.
b. a U.S. court created specifically to deal with international contracts.
c. the judicial branch of the United Nations, which has advisory jurisdiction if requested
by a U.N. organ or specialized U.N. agency.
d. one of the many regional trade communities.
Intangible real property includes all of the following except:
a. leases.
b. fixtures.
c. easements.
d. None of these. All real property is tangible.
a. What is a quorum of the board of directors for purpose of conducting corporate
business? What does the Revised Act say with regard to a quorum? What is a
supermajority requirement?
b. The directors of Bigkey, Inc. can’t decide whether to declare a dividend, so the board
appoints a committee consisting of the president of the corporation, the vice president
of the corporation, and the treasurer to decide whether to pay a dividend. If the
committee wants to declare a dividend, the directors say the officers can pay it
immediately before the next board meeting. Is this a permissible delegation of corporate
authority? Explain.
“Investment grade refers to the top-ten bond ratings and is a term meant to help
potential investors judge the probability that the bond issuer will repay the principal at
maturity and make scheduled interest payments.
a. True
b. False
If the FTC rules that a seller has made a false or deceptive advertising statement, the
Commission can:
a. as a first course of action fine the seller and, if that is not effective, file suit in federal
court.
b. require the seller to make additional advertisements to correct it.
c. require the company to go out of business.
d. report the company to the President of the United States for deregulation.
The NPDES is a highly effective water emission technology required to be used by the
EPA.
a. True
b. False
Bonds are included in the definition of the term ‘security.”
a. True
b. False
An ad in a newspaper or a circular describing goods and stating prices would generally
be considered:
a. a firm offer if made by a merchant.
b. an offer if made by a merchant, but not a firm offer.
c. an offer irrespective of who made the offer.
d. an invitation to buyers to make an offer to buy goods.
When contract terms prohibiting the assignment of rights exist, most courts will:
a. strictly construe them.
b. interpret a general term prohibiting assignments as a mere promise not to assign.
c. award the obligor a right to damages for the breach of the terms forbidding the
assignment.
d. All of these.
Byron and Merv enter a contract for the sale of a computer. If Merv breaches the
contract and Byron waits until the time specified in the statute of limitations has passed,
the contract is now:
a. void.
b. unenforceable.
c. voidable.
d. executory and enforceable.
A deed of trust is almost identical to a warranty deed.
a. True
b. False
Only a bank may serve as the maker of a certificate of a deposit.
a. True
b. False
Carlos voluntarily transfers to Opal his right to receive a payment of $125 due to him
from Scott. Scott is the assignee.
a. True
b. False
__________, usually called debentures, have only the obligation of the corporation
behind them.
a. Secured bonds
b. Income bonds
c. Unsecured bonds
d. None of these are correct.
The concept of a combination that makes a publicly held corporation a private one and
includes cash-out contributions and management buyouts is a:
a. going private transaction.
b. procedure.
c. merger.
d. None of these.
A contract to purchase stocks and bonds is governed by Article 2 of the UCC.
a. True
b. False