The __________ gives shareholders who elect such a right in the articles of
incorporation the power to dissolve the corporation.
a. appraisal remedy
b. U.C.C.
c. Statutory Close Corporation Supplement
d. None of the above.
A corporation may acquire all of the assets, including goodwill, of another corporation
and combine them with its own through:
a. a purchase of a controlling stock interest in such a corporation.
b. a merger with such a corporation.
c. a purchase or lease of such assets.
d. All of the above.
The Fair Debt Collection Practices Act defines all of the following practices as abusive,
EXCEPT:
a. unfair means to collect a debt.
b. falsely representing that a lawsuit is about to be filed.
c. telephoning the debtor at 8:00 a.m.
d. using obscene language.
Any business that engages in transactions involving the movement of goods,
information, money, people, or services across national borders is referred to as a:
a. multinational enterprise.
b. joint venture.
c. flow of trade enterprise.
d. flow of capital business.
To a __________, whether telling a lie in a given instance would produce greater
pleasure than telling the truth is less important than deciding if a general practice of
lying would maximize society’s pleasure.
a. deontologist
b. rule utilitarian
c. ethical fundamentalist
d. ethical relativist
A power of avoidance held by a party may be lost if:
a. the contract is affirmed.
b. there are unreasonable delays in exercising the power.
c. the rights of third parties intervene.
d. All of the above.
Despite its efficiency, MICR has created several problems which include:
a. paying a postdated instrument prior to its date.
b. customers miscoding checks.
c. All of these are correct.
d. None of these are correct.
What contractual defenses are available to those parties involved in surety
relationships?
a. The nonexistence of the principal debtor’s obligation.
b. Discharge of the principal debtor’s obligation.
c. Modification of the principal debtor’s contract.
d. All of the above.
“Insider trading” rules pertain to:
a. tippees.
b. officers.
c. underwriters.
d. All of the above.
An agent has breached his fiduciary duty in which of the following situations?
a. All of these are correct.
b. Where the agent makes a secret profit.
c. Where the agent uses information obtained in the course of the agency for his own
benefit.
d. Where the agent competes with the principal.
Defenses to an action in strict liability include:
a. contributory negligence only.
b. contributory negligence and comparative negligence.
c. comparative negligence only.
d. voluntary assumption of risk and in some states comparative negligence.
Gary decided to borrow from Jones Bank since it promised that his loan interest rate
would be systematically reduced every year when the board met. The loan rate was
never reduced, but actually increased monthly. Gary refused to pay the interest
demanded and sued for rescission of the contract. The bank attempted to collect from
Lewis, a surety under the loan. Does Lewis have to pay?
a. Yes, because there is no defense.
b. No, because a fraud perpetrated upon Gary will be a defense.
c. Yes, since the surety obligation is separate from the underlying contract.
d. No, because the surety stands in the shoes of the debtor for all purposes.
Jan promises Eli $4,000 for one of his original paintings on the condition that she
receives $1 million from her mother’s will. In this case:
a. Jan has made an illusory promise.
b. Jan’s promise is legally sufficient unless Jan knows she cannot inherit the $1 million.
c. Jan has made a conditional promise which is not sufficient to form consideration.
d. Jan’s promise is legally inadequate and the courts will therefore not enforce it.
The court in the American Airlines, Incorporated v. Department of Transportation case
held:
a. the APA expressly requires notice in informal or formal adjudications.
b. courts have inferred a requirement of notice in informal adjudications.
c. to be valid, legislative rules must not exceed the actual authority granted to the
agency by the enabling statute.
d. the doctrine of standing requires a plaintiff seeking injunctive relief to show he is
under threat of suffering injury in fact that is concrete.
Title to land may be transferred by which of the following?
a. Deed.
b. Will, or by the law of descent upon the death of the owner.
c. Open, continuous, and adverse possession by a nonowner for a statutorily prescribed
period of years.
d. All of the above.
Intentional harm to the person includes which of the following torts?
a. Assault.
b. Nuisance.
c. Conversion.
d. All of the above.
Procedural due process would require the government to establish a set of fair
procedures in all but which of the following cases?
a. Where Social Security benefits are denied.
b. Where a juvenile criminal is sent to a detention home.
c. Where a professor is fired from his tenured position.
d. Where a college student is denied a private scholarship.
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. None of these are correct.
Cary, a prominent local attorney, was the subject of a newspaper article concerning a
trial in which he was involved as counsel. In that article, Cary was reported to have
been disbarred in another state ten years previously. It is not true of Cary, but of his
cousin, Frank. Cary will win a suit for defamation against the newspaper:
a. simply by proving the falsity of the statement.
b. only if Frank was not disbarred.
c. only if he can prove that the paper acted with actual malice.
d. only if he can show harm to his character resulted from the statement.
The stakeholder model for the societal role of the business corporation:
a. is a derivative of the social contract theory.
b. holds that a corporation has the fiduciary duties of utmost loyalty and good faith to
employees, customers, and suppliers, as well as shareholders.
c. All of these are correct.
d. None of these are correct.
Ben and Kate had been negotiating Ben’s employment contract in conversations over
the phone for a couple of weeks. Finally, they agreed on some contract terms. Kate
offered to create a draft of the contract for Ben to read over. On the same day Ben was
fired from his job. Afraid he would be unemployed, Ben signed Kate’s draft without
reading it. In this example Ben:
a. can avoid the contract because of mistake by failure to read.
b. can avoid the contract because he was the victim of economic duress.
c. cannot avoid the contract because of economic duress or failure to read.
d. may rescind the contract because of unilateral mistake.
Which of the following would be likely to result in liability to a director of a textile
company?
a. The director sells stock in the textile company before a merger is announced.
b. The director uses the corporation’s offices to buy and sell his own investment
securities.
c. The director owns stock in an automobile company.
d. Both (a) and (b).
Agency relationships are governed primarily by federal statute.
The union mark attached to many goods in the United States is a collective mark.
UCC Article 9 requires certain assignments to be in writing.
Title insurance is unnecessary if a title search is made.
An offer is an indefinite proposal made by one person to another indicating willingness
to enter into a contract.
A bank customer may encode its own checks, and if it does, the encoder warrants to any
subsequent collecting bank and to the payor that information is properly encoded.