If a lender extends unsecured credit to a debtor, the creditor takes no interest in any
collateral to secure the loan.
Negotiationis a procedure whereby the parties choose an impartial third party to hear
and decide the dispute.
Approval clauses require that the assignee approve any assignment of a contract.
States will permit younger persons to be married if they have the consent of their
parents or if they are emancipated from their parents.
Courts are permitted to order a new election in case of fraudulent proxy solicitation.
If there has been a mutual mistake, the contract cannot be rescinded.
Partners to a strategic alliance can be potential competitors to each other.
In a bailment, the title to the goods passes to the bailee.
An accountant’s failure to follow the Generally Accepted Auditing Standards (GAASs)
when conducting audits constitutes negligence.
The decisions issued by an administrative law judge are in the form of administrative
orders.
A breach of the duty of care by a partner does not constitute negligence.
In an at-fault divorce, neither party is considered to be at fault.
An agent is not liable to the principal for any injuries resulting from a breach of duty to
notify.
A holder who takes an instrument with notice of its dishonor cannot qualify as a holder
in due course (HDC).
What is the function of the judicial branch of the federal government?
A) It has the power to interpret and determine the validity of the law.
B) It has the power to enact the law.
C) It has the power to enforce the law.
D) It has the power to act as a liaison between the legislative and executive branches.
George, John, Paul, Ringo, and Brian are five friends from Iowa. George owes John
$100, John owes Paul $200, Paul owes Ringo $300, and Ringo owes Brian $400. John
and Paul find a check belonging to George. John names himself as the payee on the
check, fills in $200 as the amount, and forges George’s signature on it. He indorses the
check to Paul and asks him to consider his debt repaid, while keeping the knowledge of
the forgery to himself. Paul, in turn, indorses the check to Ringo and pays Ringo the
remaining $100 in cash. Predictably, Ringo indorses the check to Brian, who presents
the check to George’s bank and receives payment. Who among the following can the
bank recover the money from, once the forgery is detected?
A) George
B) Paul
C) Brian
D) Ringo
Which of the following is true of LLC (limited liability company) taxation?
A) An LLC is taxed as a corporation in all general cases.
B) Income or losses of an LLC do not flow through to the members’ individual income
tax returns.
C) Members of an LLC are subject to double taxation.
D) An LLC is not taxed at the entity level.
Which of the following is true for legally claiming a reward?
A) A promise of completing the requested act is sufficient for a claimant to claim the
reward.
B) Knowledge of the reward before completing the requested act is necessary to claim
the reward.
C) The claimant can claim the reward even if he or she came to know of the reward
subsequent to completing the act.
D) The offeror cannot withdraw the reward once the offer has been placed in the public
domain.
Which of the following statements is true of the award of legal custody after a divorce?
A) The awarding of legal custody to a custodial parent is permanent.
B) The custodial parent only has physical custody because legal custody is always
shared among divorced parents of the child.
C) The wishes of the child in determining who receives legal custody is given more
consideration for older children.
D) The court cannot refuse to award custody to either parent under any extenuating
circumstances.
Which of the following is true for a corporation’s incorporation in a state?
A) A corporation can incorporate in only one state.
B) A corporation can incorporate in all states where it conducts business.
C) Alien corporations can only incorporate in one state.
D) Foreign corporations can incorporate in more than one state.
Which of the following is true of an administrative law judge (ALJ)?
A) An ALJ’s decision is issued in the form of state statutes.
B) An ALJ’s decision is final with no appeal.
C) An ALJ is the presider of administrative proceedings.
D) An ALJ is not considered as an employee of an administrative agency.
The value of John’s car is said to have undergone a(n) ________.
A) accession
B) arraignment
C) bailment
D) lien
If Catapipes Plumbing plans to withdraw its bid, what legal doctrine can help AtlasNow
from being meted out injustice due to lack of consideration?
A) promissory estoppel
B) freedom of contract
C) acquiescence
D) exclusionary rule
The Labor Management Relations Act of 1947 is also known as the ________ Act.
A) Landrum-Griffin
B) Gompers-Lewis
C) Taft-Hartley
D) Wagner