Under what circumstances may the buyer seek the remedy of replevin?
a. Where the buyer has been unable to obtain cover.
b. Where the goods have been shipped under reservation of a security interest in the
seller and that interest has been satisfied.
c. Where the goods are specially manufactured but can be purchased from another
source.
d. Both (a) and (b).
Ellen’s driveway is actually on Richard’s land, but in 20 years nobody has ever said
anything to Ellen about it. When Richard sells his house, a survey shows the problem
and the new owner demands that Ellen abandon use of the driveway. Will she have to
move her driveway?
a. Yes, if she does not actually own the land.
b. Yes, since it is not in her deed.
c. Not if she used it continuously.
d. Not if she got permission from Richard.
The greatest ownership interest a person may have in real property is:
a. fee simple absolute.
b. tenancy by the entireties.
c. life estate.
d. vested remainder.
Which of the following results in a void, rather than voidable, agreement?
a. Duress by improper threat.
b. Fraud in the execution.
c. Fraud in the inducement.
d. Undue influence.
If the goods that are the subject of a sale are in the possession of a bailee and are to be
delivered without being moved, when does the risk of loss pass to the buyer?
a. At such time as the contract of sale was entered.
b. At such time as the buyer receives the negotiable document of title.
c. When the seller tenders a nonnegotiable document of title to the bailee.
d. When the bailee is orally notified of the sale.
The Credit Card Fraud Act prohibits which of the following practices?
a. Possessing unauthorized cards.
b. Counterfeiting or altering credit cards.
c. Using accounts numbers alone.
d. All of the above.
On November 1, Paula and Roberta enter into a contract where both parties are
obligated to perform on December 31. On December 1, Paula tells Roberta, “I can, in
no way, perform my duties in our contract.” This statement is:
a. a material alteration.
b. anticipatory repudiation.
c. a nonmaterial breach since the statement is made before December 31.
d. an accord.
Fyloff, Inc. would like to pay a dividend to its shareholders. It has only been in business
a few years and does not yet have any retained earnings. However, it has a new product,
which is breaking all sales records. This quarter, it anticipates about $3 million in
earned surplus. It should be able to pay all of its bills as they become due. Under which
of the following tests would Fyloff be able to pay a dividend? Explain each test:
a. Earned surplus test
b. Surplus test
c. Net asset test
The Supreme Court has held that the plaintiff in a disparate treatment case will have
shown a prima facie case of discrimination if she:
a. is within a protected class.
b. was denied the job but the employer continued to try to fill the position from
applicants with the plaintiff’s qualifications.
c. was qualified for the position along with other applicants.
d. All of the above.
A type of insurance in which the insured and the insurer share a risk of loss due to fire
is:
a. co-insurance.
b. non-forfeiture insurance.
c. no-fault insurance.
d. reinsurance.
If the charter simply states that the corporation elects to have preemptive rights, the
shareholders have no preemptive rights with respect to:
a. shares issued as compensation to directors, officers, and employees.
b. shares issued within one year of incorporation.
c. the corporation’s unissued shares.
d. All of the above
Assume that 12,000 shares are represented at a shareholder meeting. How many votes
are normally necessary to carry a motion?
a. 4,001.
b. 8,001.
c. 6,001.
d. 10,000.
Which of the following is NOT a characteristic of the corporate form of doing business?
a. Limited liability.
b. Perpetual existence.
c. Informal organization.
d. Transferability of corporate shares.
A partner may bind the partnership by her act if she has:
a. actual authority, express or implied, to perform the act.
b. apparent authority to perform the act.
c. All of these are correct.
d. None of these are correct.
Courts will enforce contracts for the benefit of all but which of the following?
a. Donee beneficiaries.
b. Creditor beneficiaries.
c. Incidental beneficiaries.
d. Intended beneficiaries.
Sam goes to the movies one Friday evening. The movie is boring and Sam falls asleep.
At 2 a.m., the security guard locks the building. Sam awakens the next morning when
the cleaning crew opens the door. Sam can sue for false imprisonment.
The intentional dispossession or unauthorized use of the personal property of another is
known as:
a. conversion.
b. trespass to personal property.
c. fraud.
d. stealing.
Karen has agreed to buy Sara’s car, but the two have not agreed on the price. When
there is no agreement as to price in a contract for a sale of goods, what effect does it
have on the contract?
a. The price is whatever the seller decides.
b. The price is a reasonable price at the time of making the contract.
c. The price is a reasonable price at the time of delivery.
d. There is no contract, because the agreement is not definite and certain enough.
When a trial is conducted with a jury, the judge determines issues of __________ and
the jury determines questions of __________.
a. evidence; law
b. law; evidence
c. law; fact
d. fact; law
Dissolution that is judicial may be brought about when:
a. a shareholder brings a proceeding because the directors are deadlocked in
management of the corporate affairs and the corporation is suffering irreparable injury.
b. the board of directors creates a resolution approved by shareholders to dissolve.
c. the shareholders of a closely held corporation adopt a unanimous agreement to
dissolve.
d. the corporation is without a registered agent for over sixty days.
If Abe has an allowed claim of $5,000 against the estate of Deborah and has a security
interest in her art collection in the amount of $3,000 of the $5,000 claim:
a. Abe will recover nothing in the bankruptcy proceeding.
b. Abe will recover $5,000 in the bankruptcy proceeding.
c. Abe has a secured claim in the amount of $3,000 and an unsecured claim in the
amount of $2,000.
d. it would be a voidable preference to pay Abe the full $5,000.
Terrell asks a salesperson what size of water heater he should buy for their twenty-unit
motel. If Terrell purchases a tank based on the salesperson’s suggestion, the
salesperson’s recommendation is:
a. an express warranty of merchantability regarding the water heater.
b. an implied warranty of merchantability regarding the water heater.
c. an implied warranty of fitness for a particular purpose.
d. no warranty, but only a statement of opinion.
Nancy, who lives in Birdville, wants to open a McHenry Roast Chicken franchise.
Mark, a representative of McHenry, told Nancy, “If you will buy a lot and build a
building in River City, we will give you a franchise.” Nancy bought the lot and built the
building as instructed only to discover that McHenry had awarded the franchise to a
large corporation. McHenry claims no liability to Nancy since there was no
consideration. Which statement best describes the situation?
a. McHenry is not liable to Nancy since there was no consideration.
b. McHenry is not liable to Nancy since there was past consideration.
c. McHenry is liable to Nancy since adequate consideration was given by both parties.
d. McHenry is liable to Nancy based on the concept of promissory estoppel.
John is called for jury duty and is selected for possible service on a jury. However,
when he is questioned by the defendant’s attorney before final jury selection, he admits
that he thinks the defendant is guilty based on the news reports that he saw on the local
television news. If the defendant asks the judge to excuse John from serving on the jury
and the judge agrees:
a. this is a valid challenge for cause.
b. this is a valid peremptory challenge.
c. this is not a valid challenge.
d. the plaintiff’s attorney can have John serve by making an offer of proof to the judge.
Alice makes a material misrepresentation of fact to Betty, and based upon the
misrepresentation, Betty enters into a contract. Alice now thinks that the contract is not
fair to her. This contract is voidable at Alice’s option.
Under the Revised Act, a debtor need not sign the financing statement.
Chapter 7 applies to all debtors, with the exception of railroads, insurance companies,
banks, savings and loan associations, homestead associations, and credit unions.
An unrestrictive indorsement attempts to restrict the rights of the indorsee.
The statute of frauds generally requires that both parties sign the writing.
If United Widgets lowers its price to all buyers of 10 or more widgets, it is not a
violation of the Robinson-Patman Act.
One way of keeping a trade secret is to obtain a patent on it.