To eliminate minority interests, which of the following are sometimes used to take a
publicly held corporation private?
a. Conversion.
b. Domestication.
c. Cash-out combinations.
d. All of these.
A small breach of contract damage amount fixed without regard to the amount of loss is
known as:
a. reliance damages.
b. out-of-pocket damages.
c. nominal damages.
d. None of these.
The lead audit partner having primary responsibility for an audit and the partner
responsible for reviewing the audit must rotate at least every 3 years.
a. True
b. False
A usage of trade is a practice or method of dealing regularly observed and followed in a
place, vocation, or trade.
a. True
b. False
A federal agency that wishes to adopt administrative rules must do so in compliance
with the:
a. Administrative Procedures Act.
b. U.S. Constitution.
c. agency’s enabling statute.
d. Rules must be adopted in compliance with all of the above.
“Palming off” was one of the earliest forms of unfair competition, but it is not found
today.
a. True
b. False
Randy, a minor, buys a new four-wheel drive truck from the Jones Dealership. Randy
sells this truck to his cousin, Steve, who is an adult. Steve conveys this vehicle to
Arthur Smith. Arthur does not personally know Steve or Randy. Randy may:
a. recover the vehicle from Mr. Smith.
b. not recover the vehicle from Mr. Smith.
c. hold Steve liable in tort.
d. recover the reasonable value of the vehicle but not the vehicle itself.
Another name for an indictment is a(n):
a. true bill.
b. arraignment.
c. verdict.
d. preliminary hearing.
The Fifth Amendment protects all individuals against unreasonable searches and
seizures.
a. True
b. False
Under the UPA, neither a partner who causes dissolution by wrongfully withdrawing
nor a partner expelled pursuant to the partnership agreement can force liquidation of the
partnership.
a. True
b. False
State trial courts of general jurisdiction:
a. may be called county, district, common pleas, or supreme courts.
b. have a dollar limitation on their jurisdiction in civil cases.
c. cannot hear criminal cases.
d. maintain no formal records of their proceedings.
In most states, a trustee’s investment decisions are usually governed by:
a. the prudent person rule.
b. judiciary determination.
c. the beneficiary’s intent.
d. The Uniform Principal and Income Act.
Monica’s husband is an accountant who keeps the books for her business. When it goes
bankrupt, will Monica’s husbands claim for services be allowed by the bankruptcy
courts?
a. No, since he is an insider.
b. No, because it would be difficult to prove that services were actually rendered.
c. Yes, but only up to the reasonable value.
d. Yes, as long as he is not an officer of the corporation.
A security interest in electronic chattel paper is perfected by automatic perfection.
a. True
b. False
The owner of a collective mark is the producer of the goods it seeks to mark.
a. True
b. False
The Revised Act permits a corporation to purchase, redeem, or otherwise acquire its
own shares unless:
a. the corporation’s total assets after the distribution would be less than the sum of its
total liabilities and the maximum amount that then would be payable for all outstanding
shares having preferential rights in liquidation.
b. the corporation would be unable to pay its debts as they became due in the usual
course of its business.
c. Both of these are correct.
d. None of these are correct.
In the case of In Re KeyTronics, the court held that:
a. the intent of the parties to form a partnership is controlling as to partnership
formation under the RUPA.
b. there is a requirement that the parties have a specific agreement in order to form a
partnership.
c. the intent of the parties to form a partnership will be ascertained objectively from all
the evidence and circumstances.
d. under Section 202(a) of the RUPA, the intent necessary to form an association refers
to the intent to form a partnership per se.
Judicial review is another phrase for an appeal of a lower court’s judgment.
a. True
b. False
After the coronation of Edward VII was postponed and parties who had entered into
contracts in anticipation of the event filed numerous suits, the doctrine of frustration of
purpose evolved.
a. True
b. False
The case of Construction Associates, Inc. v. Fargo Water Equipment Co. illustrates the
doctrine of:
a. course of dealing.
b. unconscionability.
c. usage of trade.
d. a transaction outside the Code.
If Marge, a vice president, made a contract on behalf of Barker Corporation when it was
not within her authority, she is liable if she negligently exceeded her authority.
a. True
b. False
Restrictive covenants are strictly construed against the party asserting their
applicability.
a. True
b. False
Sarreno Cheese Co. supplies mozzarella cheese to pizza restaurants at $1.70 per pound.
In order to snare the business of one large pizza chain, Sarreno offers to sell them
cheese at $1.45 per pound. This will violate the Robinson-Patman Act unless:
a. the pizza chain can already get the cheese for $1.45 elsewhere.
b. Sarreno can show its price is justified because of a cost savings based on quantity.
c. Sarreno lowers the price to all its customers.
d. Any of these.
Goods are to be sent from Buffalo, NY to Raleigh, NC by UPS using the delivery terms
F.O.B. Buffalo, NY. Where does tender occur?
a. Where the goods are identified.
b. Where the goods are shipped.
c. Where the goods are delivered and picked up by the buyer.
d. Where the goods are taken by the buyer.
Parties with secondary liability unconditionally promise to pay the instrument.
a. True
b. False
Only civil liability may be imposed for violations of the Securities Act of 1933.
a. True
b. False
An agents duty to inform:
a. applies to material and nonmaterial facts relating to the agency.
b. does not apply if providing facts to the principal would violate a superior duty owed
by the agent to another person.
c. arises because notice to an agent does not constitute notice to the principal.
d. All of these.
All statutes require LLPs:
a. to designate themselves as LLPs.
b. to register or obtain a certificate of authenticity if they are foreign LLPs.
c. to make a new filing with the secretary of state after any change in membership.
d. to follow the laws of the jurisdiction under which they are registered regarding
internal affairs and organization.
The UCC “risk of loss” rules assign the loss according to who has ownership of the
goods.
a. True
b. False
Burnside Corporation and the D. Stewart Trust can be partners in a partnership if they
carry on as co-owners a business for profit.
a. True
b. False
Under the Statutory Close Corporation Supplement to the MBCA, a close corporation
must have bylaws on file with the office of the secretary of state or some other public
office.
a. True
b. False
Ron offers to sell Pete his stamp collection. Pete gives Ron $10 to induce Pete into
keeping his offer open for a week. If Ron decides on day four of the week that he really
does not want to sell to Pete, he can revoke his offer without fear of a breach of contract
lawsuit being filed against him.
a. True
b. False
Implied warranties may be excluded by course of performance, course of dealing, or
usage of trade.
a. True
b. False