Initially, ratification is a question of:
a. intention.
b. consideration.
c. form.
d. implication.
What is the primary function of the National Labor Relations Board?
a. to mediate labor-management disputes
b. to decide unfair labor practice cases brought before it by the general counsel
c. to promulgate binding regulations defining unfair labor practices
d. to uphold the right of employees to bargain collectively
A corporation or group of investors may seek to acquire control of another corporation
by offering cash for all of its shares made available for sale by a certain date. This
action is called a(n):
a. cash tender offer.
b. stock redemption offer.
c. stock reclamation offer.
d. offer for value.
An unsolicited distribution of credit cards to persons who have not applied for them is:
a. always allowed.
b. voidable.
c. illegal.
d. only allowed if the recipient is at least 21 years old .
Which of the following does not describe the European Union (EU)?
a. It was formerly known as the European Economic Community.
b. It had ten members sign on in 2004.
c. It eliminated internal barriers to the free movement of goods, persons, services, and
capital between member countries.
d. It is administered solely by the heads of state of the member countries.
An agent acting under a power of attorney is referred to as an:
a. implied attorney.
b. attorney in fact.
c. implied agent.
d. attorney at law.
If a lost instrument is order paper, the finder __________.
a. becomes the assignee of the instrument.
b. becomes the owner of the instrument.
c. becomes the holder of the instrument.
d. does not become the holder of the instrument.
A contract or agreement to purchase a specific number and kind of shares of stock when
it is issued is called a stock:
a. guaranty.
b. subscription
c. request.
d. warranty.
An affirmative action plan that “unnecessarily trammels” the interests of nonminority
employees:
a. is an example of reverse discrimination.
b. is lawful if women are the favored group.
c. is lawful to aid in the hiring of blacks and Native Americans.
d. is unlawful unless the favored group has been severely disadvantaged.
Sheriff Jane desires to search your home. What law requires that the sheriff obtain a
search warrant?
a. the Fourth Amendment of the United States Constitution
b. the Equal Protection Clause
c. state statute
d. local uniform police ordinances
An application for insurance:
a. may be oral.
b. generally is attached to the policy and becomes a part of the insurance contract.
c. must be prepared by an attorney.
d. has no binding effect on the applicant.
Consumers have the responsibility to examine periodic statements provided by their
financial institutions. If a loss would not have occurred but for the failure of a consumer
to report within __________ of the transmittal of the statement any unauthorized
transfer, the loss is borne by the consumer.
a. fourteen (14) days
b. thirty (30) days
c. sixty (60) days
d. six (6) months
The Revised Model Business Corporation Act:
a. has eliminated the certificate of incorporation.
b. has made the process of incorporation more difficult.
c. states that corporate existence begins when the secretary of state issues a certificate
of incorporation.
d. has eliminated the need for articles of incorporation.
When an accountant negligently prepares a financial statement knowing that the client
intends to use it in obtaining a loan from a bank, the accountant will be liable to
whichever lender actually makes the loan under the __________rule.
a. known user
b. contact
c. foreseeable user.
d. privity
Which of the following is not a sale of goods?
a. a bailment
b. an option to purchase
c. a gift
d. all of the above
It is probable that a zoning variance would be granted:
a. even though many of the neighboring property owners object.
b. on the grounds of hardship, regardless of who created the hardship.
c. to an outside advertiser to build a billboard.
d. when the desired use of the land is in harmony with the general nature of the
surrounding areas.
The buyer may cancel the contract if the:
a. seller fails to deliver the goods.
b. seller has repudiated the contract.
c. goods have been rightfully rejected.
d. all of the above.
Consideration is not required in:
a. contracts for the sale of goods.
b. employment contracts.
c. agreements to modify employment contracts.
d. agreements to modify contracts for the sale of goods.
An agreement to periodically deliver home-heating oil to a residential customer that
does not indicate the duration of the contract
a. is enforceable for a reasonable period of time.
b. lasts for one delivery only.
c. is not a legally-enforceable contract.
d. constitutes a bulk transfer.
A term of a lease required that the landlord provide exterminating services monthly to
control rats and other pests. The landlord failed to do this despite numerous requests
placed by the tenant, and the premises became overrun by rats. This may be considered:
a. a breach of the covenant of quiet enjoyment.
b. a physical eviction.
c. active waste.
d. a constructive eviction.
The Blanchard and Peale three-part test for resolving ethical dilemmas consists of the
following questions:
a. Is it legal? Is it ethical? Is it moral?
b. Is it legal? Is it balanced? How does it make me feel?
c. Is it ethical? Is it right? Does it pass the “front page of the newspaper” test?
d. Is it right? Is it balanced? Is it fair?
The RMBCA provides that, absent a conflicting provision in the articles of
incorporation, directors may be removed:
a. with or without cause by a majority vote of the shareholders.
b. with cause by a majority vote of the shareholders, and without cause by a unanimous
vote.
c. with or without cause by a unanimous vote of the shareholders.
d. only with cause.
“Superfund” is a creation of which of the following?
a. the Comprehensive Environmental Response, Compensation, and Liability Act
(CERCLA)
b. the Occupational Safety and Health Administration (OSHA)
c. the National Environmental Policy Act (NEPA)
d. the Environmental Protection Agency (EPA)
Payment to an authorized agent is:
a. payment to the principal only if the agent remits the payment.
b. payment to the principal if the third person informs the principal.
c. payment to the principal, provided the agent does not misappropriate the payment.
d. payment to the principal.
A(n) __________ is an unauthorized change or completion of a negotiable instrument
designed to modify the obligation of a party to the instrument.
a. alteration
b. modification
c. transformation
d. transmutation
A corporation may sue a director owning more than ten (10) percent of any class of
corporate stock who makes a profit by selling any such stock:
a. if the sale is made more than six (6) months after the original purchase of the stock
by the director.
b. only if the stock was originally acquired with fraudulent intent.
c. only if the stock was sold with fraudulent intent.
d. if the sale was made less than six (6) months after the original purchase of the stock
by the director.
A corporation must have:
a. a name.
b. more than one shareholder.
c. a corporate seal.
d. all of the above.
When a defendant asserts that even if everything the plaintiff said is true there is no
right to recovery, the defendant is making a:
a. counterclaim.
b. motion to dismiss.
c. motion for summary judgment.
d. deposition.
Which of the following is not a question business ethicist Laura Nash has developed to
help businesspeople reach the right decision in ethical dilemmas?
a. Have you defined the problem accurately?
b. How would you define the problem if you stood on the other side of the fence?
c. How did the situation occur in the first place?
d. Does your proposed solution to the problem effectively balance the competing
objectives of ethical decision-making and corporate profitability?
In general, an assignee stands:
a. in a position subordinate to the assignor.
b. exactly in the position of the assignor.
c. in a position superior to the assignor.
d. in a position similar to, but not equal to, the assignor.
What type of deed merely transfers whatever interest, if any, the grantor may have in
the property, without specifying that interest in any way?
a. common law
b. statutory
c. quitclaim
d. warranty
A voluntary petition in bankruptcy may be filed by a(n):
a. husband and wife.
b. railroad company.
c. insurance company.
d. all of the above.
Revised UCC Article 3 refers to which of the following parties as secondary obligors?
a. drawers
b. indorsers
c. accommodation parties
d. all of the above
What is not included in a common carrier’s lien on goods that it transports?
a. consequential damages
b. demurrage
c. costs of preserving the goods
d. costs of a sale to enforce the lien
The right of a buyer to cancel or rescind a sales contract is never impacted by a delay in
exercising that right.
A registration certificate for a partnership’s fictitious name contained the names of
Barry, Boyd, and Swartz. Cruise extended credit to the firm in reliance in part on the
certificate that named Swartz as a partner. Swartz, in fact, had no knowledge of the
certificate and never had agreed to be a partner. Because of Cruise’s reliance on the
certificate and the statement that Swartz was a partner, Swartz has a partner’s liability
insofar as Cruise is concerned.
Shares can exist for only as long as the shareholder is alive.
The warranties made by an unqualified indorser guarantee that payment of the
instrument will be made.
Ordinarily, the landlord is not liable to the tenant for crimes committed on the premises
by third persons, such as when a third person enters the premises and commits larceny
or murder.
When a lease is assigned, the assignee becomes the sole obligor for rent payments, and
the original lessee is discharged from the lease.
When a party refuses to perform a contract at the time of performance, a repudiation
has occurred.
An act that is a felony in one state be a felony in all states.
In order to be eligible for Chapter 13 bankruptcy an individual must have less than
$1,081,400 in unsecured debt.
A sale of goods or services for $25 or more made to a buyer at home may be set aside
without cause within five (5) business days.
Fraud requires a misstatement of either a fact or an opinion.
All partners must contribute money to be treated as partners.
A contract provision requiring that suit be brought within one (1) year does not violate
public policy, although the statute of limitations would allow two (2) years in the
absence of such a contract limitation.
A court can dismiss an individual debtor’s petition if the debtor does not satisfy the
means test.
An express warranty arises when goods are purchased based on a catalog illustration.
If no time is stated for the duration of an offer, it continues indefinitely if the offer
relates to durable goods or land.
Under Revised UCC Article 9, a debtor may authorize a financing statement by
acquiring the collateral that is subject to the security agreement.