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The holder of a negotiable instrument has the same rights as the holder of an ordinary
nonnegotiable contract.
An easement contractoccurs when one person agrees to answer for the debts or duties of
another person.
Article 3 of the Uniform Commercial Code (UCC) governs the use of negotiable
instruments.
The traditional view of social responsibility of business emphasized maximizing profits
for employees rather than for shareholders.
An out-of-court settlement in exchange for dropping a lawsuit is an example of
consideration.
A union is allowed to discipline members for working for wages below union scale.
A Limited liability company (LLC) cannot amend its articles of organization.
An instrument that is payable to a specific payee or indorsed to a specific indorsee is
called a bearer paper.
In mediation, the divorcing couple is asked to sort out their issues on their own without
any outside interference.
The Privileges and Immunities Clause prohibits states from enacting laws that unduly
discriminate in favor of their residents.
Reversion occurs when the rights of possession returns to a third party upon the
expiration of a limited estate.
Negligence requires a defendant to be at faultfor causing the plaintiff's injuries.
A ________ is an agreement that requires a selling shareholder to offer his or her shares
for sale to the other parties to the agreement before selling them to anyone else.
A) shareholder voting agreement
B) preemptive sale
C) buy-and-sell agreement
D) right of first refusal
Peter, Preston, and Penny organize an LLC (limited liability company) in the month of
January. While composing the operating agreement, they forget to include the
amendment clause. Six months later, the situation demands an amendment to the
operating agreement. Which of the following would best apply in this scenario?
A) The operating agreement can be amended if all three members approve.
B) The operating agreement cannot be amended as it contains no amendment provision.
C) The operating agreement can be amended with the affirmative majority of all
shareholders.
D) The operating agreement can be amended only 60 days after a new amendment
provision is included.
Which of the following is true of U.S. immigration law?
A) An H1-B visa is granted only to foreign nationals skilled in specialty occupations.
B) Individual applicants, and not employers, apply for H1-B visas.
C) H1-B visa holders cannot bring their family as dependents to the U.S.
D) H4 visa holders are allowed to work for minimum wages or more in the U.S.
16-year-old Frank bought a video game console from John for $150. Frank is a minor,
while John is a competent adult. A month later, the console started malfunctioning on its
own. Frank returned the console to John. If Frank disaffirms his contract with John for
buying the console, which of the following will be considered true?
A) John is not bound by the contract any more as the exchange has been completed.
B) Frank can reclaim full refund on the amount he paid.
C) Frank can only ask for full refund once he has reached the age of majority.
D) Frank is legally obligated to fix the console before returning it to John.
________ are the rights of shareholders who object to a proposed merger to have their
shares valued by the court and receive cash payment of this value from the corporation.
A) Appraisal rights
B) Liquidation rights
C) Anti-acquisition rights
D) Anti-merger rights
Klint Microsystems, a microprocessor manufacturer, was contracted by Zeitar Studios
to manufacture specially designed microchips to be used in an audio engineering
process. Zeitar was to pay Klint $300,000 as per the contract. Klint decided to redesign
their existing microchips and make them suitable for Zeitar. While the finished
microchips were being shipped via a carrier, Klint was informed of Zeitar's insolvency.
Klint cancelled the shipment before it was delivered. Klint then resold the chips to
another studio where they had to settle for $150,000 as the chips were now only
suitable for specific audio engineering processes.
What right to remedy did Klint exercise when they stopped shipment to Zeitar?
A) right to dispose of goods
B) right to stop goods in transit
C) right to obtain specific performance
D) right to recover purchase rent
Gloria's employer deducted 20 percent of her pay in the month of January due to
personal problems he had with her. Under the Lilly Ledbetter Fair Pay Act, what period
of time does Gloria have to file an employment discrimination claim?
A) within the month of July the same year
B) within the end of the financial year
C) within the month of April the same year
D) she cannot file such a claim, as she was not discriminated against.
How do patent laws help an inventor?
A) They let the inventor keep his patents indefinitely.
B) They help the inventor meet potential buyers for his patented inventions.
C) They provide protection for patented inventions from infringement.
D) They help the inventor guard his patented invention from the public.
________ is a provision of the Securities Act of 1933 that imposes civil liability on
persons who intentionally defraud investors by making misrepresentations or omissions
of material facts in the registration statement.
A) Section 24 of the Securities Act of 1933
B) Section 12 of the Securities Act of 1933
C) Section 11 of the Securities Act of 1933
D) SEC Rule 506
Which of the following is true of a promissory note?
A) It is a three-party transaction.
B) It is not an order to pay.
C) The party who makes the promise is the lender.
D) The payee cannot transfer a note to a third party.
What kind of insurance would protect Lucy from being sued by the injured employees
for this damage?
A) business interruption insurance
B) directors' and officers' insurance
C) workers' compensation insurance
D) key-person life insurance
Mr. Cartledge places his estate in a trust while he is alive, and he names a local bank as
the trustee to administer the trust and invest its assets. The trust designates his wife as
the income beneficiary of his estate and stipulates that their children Brendan and
Margaret will receive the assets of the trust after his wife's death. Brendan and Margaret
are the ________ in this scenario.
A) collateral heirs
B) income beneficiaries
C) remainder beneficiaries
D) settlors
In the event of Jane and Will opting for a divorce, ________ would be considered
separate property for Jane.
A) the ancestral home
B) the new car
C) the stocks and bonds
D) the farmhouse
