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John is a partner of Aegon Services, a limited liability partnership firm. He committed
fraud and embezzled $1 million from a client. The other partners would not be
personally liable for John's malpractice.
Utilitarianism is based on the laissez faire theory of capitalism.
If the seller has justifiably withheld delivery of the goods because of the buyer's breach,
the buyer may recover any money or goods he has delivered to the seller over and
above the agreed amount of liquidated damages.
Mr. Green is a general contractor and is accepting bids from subcontractors for the
building of a new hotel. Mr. Blue submits a bid for his work associated with the project.
Mr. Green placed an offer which Mr. Blue accepted with his bid.
If the debtor defaults on his agreement with the creditor, the creditor repossesses the
collateral, and the creditor then sells the collateral. However, the creditor may also
retain any surplus if the amount realized on the sale exceeds the amount of the debtor's
debt.
Under the FTC section 5, in proving deception of a consumer it is not important if the
consumer was acting reasonably when they were taken advantage of.
A gratuitous agent has the same fiduciary duty as a paid agent.
Because all goods are fungible, specific performance is not available under the UCC.
At a preliminary hearing in a felony case, the government must prove its case by the
"beyond a reasonable doubt" standard.
The statute of frauds applies exclusively to executory contracts.
The Clean Water Act incorporates both civil and criminal sanctions.
There is no international copyright that automatically protects a copyrighted work
everywhere in the world.
Only the dissociations listed in the RUPA are allowed.
The death of a general partner causes dissolution of the limited partnership.
A partner may personally profit from a partnership transaction when he or she deals in
good faith with the partnership.
Bill's bicycle business has gone bust. The week before Bill went into bankruptcy, he
paid $200 for a used bicycle that he intended to re-sell for a profit. This $200 payment
is a preference under Chapter 7.
Intent to monopolize is necessary to create violation under the Sherman Act.
A mortgage does not have to be written.
An accountant can be required to bring his/her working papers into court and to testify
as to matters involving the client's tax records and discussions with the client regarding
tax matters.
An exclusive right to sell listing means that a broker receives a commission on a sale of
the property even if the seller found the buyer.
Property held in joint tenancy or tenancy by the entirety is not controlled by a will.
Homeowners policy typically will cover damage to real property and to personal
property by a peril.
Remote control devices used for automatic garage doors are examples of fixtures.
The insured is not entitled to recover under a property insurance policy if she had an
insurable interest at the time the policy was purchased but did not have an insurable
interest the time the loss occurred.
Negligence is conduct by an individual that fails to protect others from the risk of harm.
In the absence of a partnership agreement, the RUPA provides that any partner who has
not wrongfully dissociated may perform the winding up.
The assertion of specific in personam jurisdiction satisfies federal or state due process
guarantees so long as the defendant has sufficient "minimum contacts" with the forum
state.
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 has
retrospective application and even applies to cases filed before 17th October 2005.
Transfer of title deeds is a function wherein silence signals acceptance of the offer.
If one individual signed another's name to a petition for a political and social issue that
the person had deep moral objections to, then that injured party could sue under the
theory of invasion of privacy.
In mixed goods-services situations, courts determine whether the contract is for the sale
of goods by determining whether the good or the service is the dominant part of the
transaction.
Ratification makes a contract valid from its inception.
A will that is not executed with the formalities required by state law is void.
Andy contracts with Yvonne to produce an advertisement for a Fourth-of-July
fundraising party. Yvonne does not produce the advertisement until July 6. Here,
Yvonne's breach of the contract is not a material breach unless the contract explicitly
stated that time is of the essence.
An insurance contract, though transferring existing risk, is legally permissible and valid
contract.
Mr. Blue wishes to sell his home to Mr. Green. The court will refuse to recognize and
enforce the agreement between Mr. Blue and Mr. Green.
A patent granted on September 2, 1997 will be valid for 17 years from that date unless
the patent was for an ornamental design.
LLP partners are personally liable for the actions of the business.
A partnership is an income tax-paying entity for federal income tax purposes.
Banks are not required to disclose their funds availability policy to all of their
customers.
What is the main argument for avoiding a statute's plain meaning or legislative history
of, and instead following prior interpretation in a case?
A. Plain meaning is subject to debate
B. Promoting stability and certainty
C. Legislative history can be contentious
D. Saving the court's valuable time
Antiassignment clauses in contracts generally are:
A. enforceable but read narrowly.
B. enforceable but not covered by the UCC.
C. unenforceable because they are unconscionable.
D. unenforceable because they are void.
The proxy solicitation process usually results in:
A. the chief executive officer controlling the corporation.
B. shareholders dominating the management of the corporation.
C. corporate democracy working at its best.
D. the board of directors dominating the management of the corporation.
Which of the following is true of the Safe Drinking Water Act?
A. The primary responsibility of complying with the established standards lies with the
federal government.
B. It applies to public water bodies and water suppliers, and not to private suppliers.
C. The EPA sets primary drinking water standards, minimum levels of quality for water
consumed by humans.
D. It set up a permit system regulating the dumping of all types of materials into ocean
waters.
Ralph, the owner of a medium-sized business, which is operated as a sole
proprietorship, gives his vice-president, Wanda, authority to hire a new manager for the
firm. Ralph gives Wanda detailed instructions about the salary she can contract to pay,
but tells her that under no circumstances can she make commitments regarding the new
manager's pension. Wanda contracts to hire Nick for the new managerial position. But
to get Nick to sign up, she has to make certain specific pension commitments to him.
Some years later, Nick sues Ralph for copping out on those pension commitments.
Which of the following is true in this case?
A. Ralph has no liability, because he expressly told Wanda that she didn't have authority
to bind him on pension matters.
B. Ralph is bound on the basis of Wanda's apparent authority.
C. Ralph is bound on the basis of Wanda's implied authority.
D. Ralph is bound on the basis of Wanda's actual authority.
Which of the following is the most common method of obtaining ownership of
property?
A. Claiming abandoned property
B. Producing the property
C. Inheriting the property
D. Discovering the property
The _____ gives the federal government and the states the authority to regulate
facilities that generate, treat, store, and dispose of hazardous waste.
A. Marine Protection, Research, and Sanctuaries Act
B. Resource Conservation and Recovery Act
C. Oil Pollution Prevention, Response, Liability and Compensation Act
D. Toxic Substances Control Act
Which of the following fits within one of the exceptions to the Bankruptcy Act's
preference provision?
A. A perfected Article 9 security interest.
B. A transfer to an insider of the debtor.
C. A transfer made in the ordinary course of the debtor's business.
D. A consumer's transfer of less than $2.000 to a creditor who has sold her consumer
goods.
According to the Model Nonprofit Corporation Act (MNCA), which of the following
nonprofit corporations can abolish or limit the right of a member to inspect corporate
records?
A. A tennis club
B. A church
C. A golf country club
D. A cooperative grocery store
The UCC differs from the common law of contracts in that the UCC:
A. is less concerned with technical rules.
B. deals with the sale of intangibles.
C. deals with service contracts.
D. is less concerned with the "good faith" doctrine.
_____ shares are shares that have been sold to shareholders.
A. Preference
B. Issued
C. Authorized
D. Outstanding
Which of the following corporation classes' profits are taxed only at the shareholder
level?
A. An S corporation
B. For-profit corporation
C. Not-for-profit corporation
D. Publicly held corporation
_____ indorsements indicate that they are effective only if the payee satisfies a certain
state.
A. Special
B. Conditional
C. Qualified
D. Blank
Under which of the following can a bankruptcy petition be initiated only by a voluntary
petition?
A. Chapter 7
B. Chapter 11
C. Chapter 13
D. Chapter 15
A person who commits fraud may be liable for punitive damages for the tort of:
A. deceit.
B. fraud.
C. misrepresentation.
D. assertion.
Hardware retailers Deuce Hardware Co. and Trueblue Hardware Corp. agreed to a
schedule of maximum prices that they will pay to hardware wholesalers with whom
they deal. What is the most likely stand that the Supreme Court will take under these
circumstances?
A. Their action will be deemed unlawful according to the rule of reason analysis.
B. Their action will be deemed lawful because only sellers can be guilty of price-fixing.
C. Their action will be deemed lawful if their agreement results in savings to
consumers.
D. Their action will be deemed unlawful according to the per se analysis.
Phillips hires Addis, who had sixteen prior convictions for the use of hallucinogenic
drugs, as an air traffic controller for his private airport. Phillips could easily have
discovered the convictions had he bothered to make a routine criminal record check, but
this was just too much trouble. Phillips knew nothing whatsoever about the job of an air
traffic controller, and, when he hired Addis, merely told him to "get the planes in safely
the best way you know how; the details are up to you." One day, Phillips held a private
birthday party for a celebrity and invited 20 of his rich and famous friends, all of whom
were to arrive by a private jet. As it turned out, Addis was under the influence of drugs
on this day and, as a result, all 20 of Phillips's friends were killed. After this national
tragedy, Phillips and Addis were sued for negligence by the estates of these people. In
this case:
A. Phillips is directly liable for negligent hiring.
B. Phillips is liable only under the doctrine of respondeat superior.
C. Phillips is not liable because Addis is an independent contractor.
D. Phillips is not liable because he could never have foreseen Addis' negligence.
Joe went to a music store; misrepresenting himself as James to the store attendant. He
buys a plasma television on credit, charging it to James's account. He then sells that set
to Mike. Mike buys the set in good faith. Which of the following is true in such cases?
A. The store person can restore the TV from Mike.
B. James can recover the TV from Mike.
C. Mike will be held liable by the court for possessing stolen item.
D. Mike will hold a good title; hence no harm can be caused to him.
Carter sold a $20,000 boat to Davis on credit for personal use. As part of the deal, Davis
completed an installment note payable to Carter and a security agreement giving Carter
a security interest in the boat which was attached on July 1. Carter never filed a
financing statement. On August 1, Davis borrowed $15,000 from Bank, by completing
a security agreement giving the Bank a security interest in the boat. This interest
attached on the same day and the Bank filed a financing statement on August 6. Davis
defaulted on both his installment payments to Carter and his loan obligation to the
Bank. Each of these parties wants to satisfy Davis's obligation by repossessing and
selling the boat. Whose security interest in the boat has priority and why?
A. Bank's interest has priority because Carter never filed a financing statement.
B. Carter's interest has priority because his security interest was perfected before Bank's
interest.
C. Bank's interest has priority because Carter failed to attach his security interest.
D. Bank's interest has priority because the Bank perfected the interest within ten days
after Davis received the collateral.
______ requires a decision maker to ensure the maximum good for the maximum
number.
A. Profit maximization
B. Rights theory
C. Stakeholder theory
D. Utilitarianism
Sue wanted to purchase a car. She went to "Honest Bob's" used car sales. She was
interested in a classic 1956 Jaguar XK 140 Roadster. Bob told her "this is a great car-it
runs like a dream, it is a sweet ride." Bob's statements are legally considered to be:
A. opinion statements.
B. material representations.
C. innocent misrepresentations.
D. fraudulent, if they are false.
Under the RULLCA, which of the following is true about a transferee in an LLC?
A. A transferee has the right to hire managers in a manager-managed LLC.
B. A transferee has limited rights to manage the ordinary business of the LLC.
C. A transferee has only a limited right to information about the LLC's accounts.
D. A transferee is a member of the LLC.
In many public meetings, John has proclaimed himself to be an equal partner of Chan's
partnership business. Chan's business ran into financial difficulties. John and Chan
approached a creditor to obtain loan. The creditor gave the loan based on a false
presumption that John was a partner in the business too. Can John be made liable for
the loan?
A. Yes, because John is a close acquaintance of Chan; thus it is his ethical duty to help
Chan during her financial trouble.
B. Yes, because John is a purported partner; public representations of his partner status
make him personally liable for the debt.
C. No, because he is not legally a partner; the creditor should have checked the
partnership agreement before advancing the loan.
D. No, because John did not participate in the business; he was thus not a member of
the partnership business.
Which of the following considers a properly dispatched acceptance sent by a reasonable
means of communication within a reasonable time to be effective on dispatch?
A. Traditional contract laws
B. UCC
C. CISG
D. Restatement (Second)
The most important example of strict liability principles in modern legislation is:
A. Road safety legislations
B. Environmental acts
C. Disabilities acts
D. Workers' compensation acts
Edith purchases what is represented to be a new DVD player from Big Al's Electronic
Emporium, by giving Al a check for $200 drawn on Big Bank. Edith then discovers that
the DVD player is a used model and calls Big Bank to place a stop-payment order on
the check. Big Al negotiates the check to John who qualifies as a holder in due course.
John presents the check to Big Bank the next day, and Big Bank pays the check. Which
of the following statements is most accurate?
A. For recourse, Edith would have to pursue Big Al on her misrepresentation claim.
B. Edith may use her personal defense of misrepresentation to have her account
recredited by Big Bank.
C. Edith may pursue both Big Bank and John for the amount taken from her account.
D. If Big Bank had refused to pay the check, John would have had no recourse against
Edith.
For proving liability of a professional under _____, the plaintiff need not prove reliance
on the wrongful conduct.
A. Section 17(a) of the Securities Act of 1933
B. Section 10(b) of the Securities Exchange Act of 1934
C. Section 18 of the Securities Exchange Act of 1934
D. Section 12(a)(2) of the Securities Act of 1933
The qualitative substantiality test was employed by the Supreme Court in the landmark
case of:
A. Tampa Electric Co. v. Nashville Coal Co.
B. Standard Oil Co. v. United States.
C. Olin Corporation v. Federal Trade Commission.
D. Federal Trade Commission v. Staples, Inc.
The 1967 Age Discrimination in Employment Act (ADEA) prohibits age-based
employment discrimination against employees who are at least _____ years of age.
A. 30
B. 35
C. 40
D. 45
Which of the following is true of a corporation?
A. A corporation is not a tax-paying entity for federal income tax purposes.
B. A corporation does not have a life separate from its owners and its managers.
C. A corporation has the ability to attract capital, more than the limited partnership.
D. A corporation is owned by partners who have founded the business and have the
right to manage it.
The Barrel & Wine partnership is being wound up and liquidated. Net assets are to be
distributed according to which of the following order of priority?
A. First to creditors who are not partners, then to creditors who are partners
B. First to all creditors, then to partners as per their capital accounts
C. First to partners per their capital accounts, then to all creditors
D. First to partners who have made loans to the partnership, then to all other creditors
Which of the following is true about asset distribution in an LLP?
A. If the LLP has been profitable, each partner will receive the net amount in his capital
account.
B. The partners have liability for partnership obligations beyond the firms' assets.
C. An LLP partner has to contribute an amount equal to the negative balance in his
account to pay creditors.
D. The creditors must sue the partner to force the partner to pay the debt.
Which of the following is an example of actual notification of termination of agency to
third parties?
A. Posting a notice in a public place
B. Displaying a notice on the company website
C. A writing delivered to the third party's place of business
D. Advertising the agency's termination in a newspaper of general circulation
