Most lemon laws define a lemonas a car that:
a. was sold by a dealer who refuses to make reasonable attempts to correct the problem.
b. continues to have a defect that substantially impairs its use, value, or safety, even
after the manufacturer has made reasonable attempts to correct the problem.
c. has been unpopular and so is sold at a discounted price.
d. a manufacturer must destroy so that it cannot be sold to other unsuspecting
consumers.
In a sex discrimination case under the equal protection clause, the courts apply the strict
scrutiny standard of review.
a. True
b. False
Which of the following would be considered a valid and legally enforceable agreement?
a. An agreement to pay a legislator to vote for a particular bill
b. An agreement under which Arthur agrees to pay Barbara $3,000 to disparage the
product of Arthur’s competitor
c. An agreement by the seller of a service station not to enter the service station
business in Ohio for a period of30 years after the sale of his business
d. An agreement by a car salesman not to sell automobiles or automobile parts in Marin
County for a period of one year after terminating his employment
For purposes of the concerted action requirement under Section 1 of the Sherman Act:
a. a corporation is viewed separately from its wholly owned subsidiaries.
b. a firm and its employees are viewed as one entity.
c. concerted action must be established by an express agreement.
d. All of these are correct.
The spoken threat, “If you don’t give me your billfold and keys, I’ll shoot you,” cannot
be an assault since it only
involves words.
a. True
b. False
In recent years, more and more courts have followed the Ultramaresdoctrine in
deciding cases.
a. True
b. False
Mario, a minor, sells his bicycle to Jimmy for $150. A week later, Kelly, who does not
know Mario, buys the bike from Jimmy for $200. Mario, upon learning about Jimmy’s
sale of the bike, disaffirms his contract with Jimmy. Kelly does not have valid title and
must return the bike to Mario.
a. True
b. False
Markell Inc. issued stock options. Which of the following is not true?
a. The shareholders determine the terms upon which the stock options are issued, their
form and content, and the consideration for which the shares are to be issued.
b. A stock warrant is a type of stock option that is freely transferable and that typically
has a longer term than a stock right.
c. Markell Inc. may use stock options or warrants in its incentive compensation plans
for the directors and officers of the company.
d. Markell Inc. may use stock options to help in raising capital for the business by
making one class of securities more attractive by including in it the right to purchase
shares in another class.
Shares in a publicly held corporation typically are:
a. owned mostly by management of the corporation.
b. widely dispersed and about two-thirds are held by institutional investors.
c. owned by a few investors holding many shares each.
d. owned mostly by individual investors, and these investors usually exercise their right
to vote by attending shareholder meetings.
CERCLA is an Act that:
a. regulates current and future generation, transportation, and disposal of hazardous
waste.
b. granted to state governments the authority to take removal action in response to a
release of hazardous substances.
c. requires the federal government to establish a National Contingency Plan.
d. All of these.
Which of the following is correct with regard to an accountant’s contractual liability?
a. An accountant is bound to perform all the duties she explicitly agrees to perform
b. An accountant implicitly agrees to perform a contract in a competent and
professional manner
c. An accountant who breaches his contract with a client may also be liable to a third
party intended beneficiary
d. All of these are correct.
Property insurance policies are freely assignable before, but not after, a loss occurs.
a. True
b. False
Inga runs a Swedish health spa in Connecticut. She orders 100 loofah sponges from a
company in California. They are sent “F.O.B. Hartford, Connecticut,” but they never
arrive at Inga’s. What consequence?
a. Inga has to pay anyway since it was a destination contract.
b. The California company is required to bear the loss since the sponges had not yet
reached the F.O.B. point.
c. The California company and Inga will have to split the loss since they did not specify
in their contract when
theriskoflosswouldpassto Inga.
d. It cannot be determined from the information given who has the risk of loss.
Mark is out sailing in his boat one evening when he hears a young girl crying for help
in the lake. Which of the following is true?
a. Mark MUST help the girl or he will be liable for negligence.
b. Mark must help the girl ONLY if he knows her.
c. Mark MUST help the girl if he is the girl’s uncle.
d. Mark MUST help the girl if he begins to rescue her and moves her to a position
farther from the shore.
All depositary institutions are required to disclose APY earned and balance information,
including how the balance is calculated, on the periodic statements they must send to
customers.
a. True
b. False
The Labor-Management Relations Act:
a. hampers employer free speech, although it encourages employee free speech.
b. is also known as the Taft-Hartley Act.
c. prohibits union shops.
d. specifies certain employer activities as unfair labor practices.
Under Chapter , certain debts of individuals are not dischargeable despite the debtor’s
good faith.
a. 7
b. 11
c. 13
d. 15
Exclusion of consequential damages for personal injuries resulting from breach of
warranty in the sale of consumer goods is primafacieunconscionable.
a. True
b. False
The International Anti-Bribery and Fair Competition Act of 1998 expands the FCPA to
include:
a. influencing any act or decision of a foreign official, political party, or political official
for the purpose of influencing any decision of that person or party in his or its official
capacity.
b. payments made to ‘secure any improper advantage” from foreign officials.
c. all foreign persons who commit an act in furtherance of a foreign bribe while in the
foreign country.
d. inducing a foreign official to use his influence to affect a decision of a foreign
government to assist a domestic concern in obtaining business.
What are some of the areas where the board determines corporation policy?
a. Selecting and removing officers
b. Setting management compensation
c. Initiating fundamental changes and declaring dividends
d. All of these.
Which of the following is correct about the sanctions and penalties under the 1934 Act,
as amended?
a. Individuals may not be imprisoned for violation of the 1934 Act.
b. For individuals, conviction may carry a fine of up to $5 million.
c. A defendant who proves she was ignorant of a rule can still be imprisoned.
d. A corporation may be fined not more than $10 million.
A debtor who files for bankruptcy can keep up to $1,550 in jewelry and all social
security, veteran’s, and disability
benefits under the exemptions found in the Bankruptcy Code.
a. True
b. False
Akeya sells and delivers goods to Wayne for $10,000. Wayne executes and delivers a
negotiable note to Akeya for
$10,000 payable to Akeya’s order in sixty days. A week later, Akeya duly negotiates the
note to Maria. Which of
the following is correct?
a. Maria is required to notify Wayne that she has acquired the note from Akeya.
b. If the goods are defective, Wayne’s defense against Akeya is not available against
Maria if Maria acquired the note in good faith and for value and had no knowledge of
Wayne’s defense against Akeya and took the note without reason to question its
authenticity.
c. Maria is not entitled to hold Wayne for the full face amount of the note at maturity if
Wayne has a valid defense against Akeya for defective goods regardless of the
circumstances surrounding the negotiation of the note to Maria.
d. If there is a valid defense against Akeya, Maria cannot become a holder in due course
when the note is transferred to her.
Situational ethics judges a person’s ethics, and it does so from the perspective of the
actor.
a. True
b. False
Special relations between the parties, such as babysitter and child, may impose a duty
of reasonable care to aid or protect the child in situations where the duty would not
otherwise exist.
a. True
b. False
Arthur enters into a contract with Bob as a result of Bob’s fraud in the inducement.
Under the contract, Bob has the right to the payment of $100. Bob assigns the right to
the $100 to Carl. Arthur may assert the defense of fraud in the inducement to avoid
paying Carl the $100.
a. True
b. False
A person who knows that an instrument is overdue or has been dishonored cannot
become a holder in due course.
a. True
b. False
The difference between fraud and misrepresentation is that fraud involves malice while
nonfraudulent misrepresentation is always innocent.
a. True
b. False
Some states have statutes which prohibit an employee from assigning his future wages.
a. True
b. False
The statute of frauds does not prevent the performance of oral contracts if the parties
are willing to perform.
a. True
b. False