The right of a shareholder to examine the books and records of the corporation may be
denied if the shareholder:
a. seeks information to determine the financial condition of the corporation.
b. desires to know the value of shares.
c. seeks information to embarrass or cause loss to the corporation.
d. desires the names and addresses of other shareholders.
The members of the board of directors are trustees of the corporation.
a. True
b. False
A union is engaged in a labor dispute with Hawkins, Inc. To force Hawkins into
resolving the dispute in the unions favor, the union organizes a strike against Boxwell
Co., with which the union has no dispute. The union agrees to stop the strike if Boxwell
agrees to stop doing business with Hawkins. The strike against Boxwell is a prohibited
unfair labor practice under the LMRA.
a. True
b. False
Parties seeking to challenge agency action by way of judicial review must have
standing and must have exhausted their administrative remedies.
a. True
b. False
The sources of law in the American legal system include:
a. state administrative rules.
b. executive orders.
c. ordinances.
d. All of these.
What right does a share confer on its owner in regard to an interest in the corporation?
a. Right to participate in control.
b. Right to participate in earnings of the corporation.
c. Right to participate in residual assets of the corporation upon dissolution.
d. All of these are conferred.
Which of the following is true of a collecting bank?
a. A collecting bank is an agent of the owner of an item until settlement becomes final.
b. The relationship between a collecting bank and the owner of an item, once settled,
becomes a debtor-creditor relationship.
c. A collecting bank may be a sub-agent of the owner until settlement becomes final.
d. All of these are true.
e. None of these are true.
LeBraun is seeking a variable rate mortgage from High Street Financial. Under the
Mortgage Reform and Anti-Predatory Lending Act of 2010, which modifies the
Truth-in-Lending Act, High Street must disclose the maximum amount LeBraun could
pay on the mortgage, with a warning that payments will vary based on interest rate
changes.
a. True
b. False
The attorney general of the state of incorporation may bring a court action to dissolve a
corporation if the corporation obtained its charter through fraud.
a. True
b. False
The federal Truth-in-Lending law:
a. requires the lender to show how much profit is made on a particular sale.
b. regulates the maximum cost of credit.
c. is a uniform law, like the UCC, made available to all states.
d. is intended to allow comparison of various credit offers or advertisements.
No warranties are given out by the person who negotiates or transfers a document of
title.
a. True
b. False
Robert steals a truckload of electronic equipment and stores it in Eastside Warehouse.
After five weeks, Robert instructs Eastside to make the goods available to Charles for
pickup. Even if Eastside acts reasonably and in good faith, it will be liable to the true
owner of the goods if it allows Charles to take the goods.
a. True
b. False
All of the following are types of illegal insider trading EXCEPT:
a. officers or directors who pass valuable information to someone who trades in the
company’s stock and then is repaid in some way.
b. an officer or director who makes a direct profit on an investment just after the public
announcement of a major development related to that investment.
c. a director who buys through overseas financial institutions stocks and options in his
own company prior to a public announcement of information which greatly enhances
the value of the stock.
d. an officer of a company who, for a fee, related to investment bankers information
about companies her company is planning to target for takeover.
Roberto obtains an exclusive franchise to sell widgets for the Acme Widget Company.
The exclusive franchise covers the entire State of Wisconsin for a period of three years.
In this case:
a. the manufacturer is obligated to use his best efforts to supply the goods even if no
such clause appears in the written franchise agreement.
b. Roberto has an implied obligation to use his best efforts to promote the sale of the
widgets.
c. under the UCC, such an agreement lacks consideration.
d. Two of these but not all three.
The Code addresses the “battle of the forms problem by focusing on intent of the
parties.
a. True
b. False
If Congress has not intended to displace all state legislation on a particular topic, state
legislation that conflicts with the federal legislation is permitted.
a. True
b. False
Tom makes pottery in his spare time. Jackie asks if he’d sell her a covered bowl. Later
that day, he telephones her and says she can have it for $50. She agrees, so he tells her
he’ll wrap it up for her and it will be ready in half an hour. Six days later, Jackie had not
yet come for the bowl when a dog knocks the box off the shelf and breaks the bowl.
Who is liable?
a. Tom, because Jackie had not yet received the bowl.
b. Tom, because the bowl was in his possession when the dog broke it.
c. Jackie, because she had identified the bowl.
d. Jackie, because Tom had tendered the bowl to her nearly a week earlier.
A major defense to the Age Discrimination in Employment Act is compliance with a
bona fide seniority system.
a. True
b. False
A partner’s transferable interest is subject to the claims of that partner’s creditors who
may obtain a judicial lien known as a(n) __________ against the partner’s transferable
interest.
a. foreclosure
b. redemption
c. charging order
d. None of these.
An accountant has no liability to parties other than the client.
a. True
b. False
If Todd seemingly offers to sell to Ashton his wood gun cabinet but intended to and
believes he is offering his wood china cabinet, and Ashton accepts the offer, reasonably
believing it is for the gun cabinet, a contract is formed for the sale of the gun cabinet.
a. True
b. False
While employed, an employee who has no restrictive employment contract with his
employer may divulge secrets to a competitor.
a. True
b. False
Each partner has an interest in the partnership, which includes his share of profits and
losses, his right to receive distributions, and his management rights.
a. True
b. False
If a landlord leases property “to Susan as long as Sam wishes,” the landlord has created
a(n):
a. fee simple absolute.
b. estate (tenancy) at will.
c. condominium.
d. estate at sufferance.
In a sale of goods, the seller’s tender of performance does not have to conform to the
Code’s perfect tender rule.
a. True
b. False
William, who is a waiter, is injured when an unopened bottle of cola explodes in his
hand while he is putting it into the restaurant’s cooler. If William wants to sue the
bottling company for his injuries:
a. he will lose, because it will be impossible for him to prove that the bottle was
overpressurized by the bottler.
b. he will lose, because the bottling company has no duty to him.
c. he will probably win if the court allows him to use the res ipsa loquitur doctrine.
d. he will win based on the last clear chance rule.
An agent who has either actual or apparent authority has the power to bind his
principal.
a. True
b. False
Which of the following is correct with regard to conditions subsequent?
a. Conditions subsequent are quite common in contracts.
b. A ‘sale or return” contract is an example of a contract with a condition subsequent.
c. A condition subsequent must occur before performance is due under a contract.
d. All of these are correct.
A typical enabling statute grants municipalities all but which of the following powers?
The power to:
a. regulate the bulk of buildings to be erected.
b. divide the entire municipality into districts of such number and shape as may be
deemed best.
c. determine the area of open spaces within buildings.
d. All of the answer choices are typical powers granted by enabling statutes.
A collection agency is prohibited from:
a. calling the debtor in the middle of the night.
b. calling the debtor from 5-6 p.m. when he is likely to be eating dinner.
c. threatening to sue if it actually intends to do so.
d. contacting third persons to find out the whereabouts of a debtor.
A ‘stock option” permits the purchase of shares at a later date.
a. True
b. False
When compared to a court trial, arbitration has the advantage of privacy.
a. True
b. False
The seller may resell the goods identified to a contract:
a. only at a public sale.
b. only if the goods are sold as a unit.
c. at a public or private sale.
d. only if the goods are perishable.
Which of the following carries with it no warranties or guarantees of title?
a. Warranty deed.
b. Quitclaim deed.
c. Special warranty deed.
d. All types of deeds carry a warranty of title.
A field warehouse, under Article 9 of the UCC, is:
a. one kind of a pledge.
b. a common arrangement for financing inventory.
c. an agreement that allows the debtor access to the pledged goods and simultaneously
gives the secured party control over the pledged property.
d. All of these.