Costs incurred to acquire a nondelivered performance from some other source are
consequential damages.
a. True
b. False
Under the RMBCA, if a quorum exists, a shareholder action such as the election of
directors is approved if the votes cast for the action exceed the votes cast against it.
a. True
b. False
If an offer asks for acceptance by mail and the offeree faxes his acceptance:
a. there is no contract, and the offer is revoked.
b. there is a contract if the acceptance is actually received within the time the authorized
means would have arrived.
c. the acceptance is merely a counteroffer.
d. there is a contract, but only if the offeree calls the offeror and gets permission to fax
the acceptance.
Which of the following is correct with respect to election of remedies?
a. The Code rejects any doctrine of election of remedies; its remedies are cumulative.
b. The remedy of specific performance is inconsistent with that of restitution.
c. A person who seeks an injunction may also seek incidental damages for the breach.
d. All of these are correct.
The Uniform Electronic Transactions Act, in effect in all of the states, covers contracts
not governed by Articles 2 and 2A.
a. True
b. False
The Recreation and Parks Agency of the state government has six employees and is
interviewing for a person to teach gymnastics and arts and crafts to 3-5 year olds. Ed,
age 68, applies but is told he is too old. If he sues under the Age Discrimination in
Employment Act, the agency’s best defense would be:
a. it is not subject to the Act since it only has six employees.
b. the Act only protects people from 40-66 years of age.
c. Ed is not able to do gymnastics.
d. this is not a salary dispute.
John operates a small repair business and is in desperate need of a certain type of
building material. He obtains the material from a large corporation, but is charged a
grossly unreasonable price and is forced to buy other material he does not need. In view
of the buyer’s unequal bargaining power and unreasonable terms of the contract, this
may be a case of:
a. in paradelicto.
b. partial illegality.
c. substantive unconscionability.
d. procedural unconscionability.
Deanna, an attorney, has a personal injury case which is set for trial next week. She
needs a good doctor to testify on behalf of her client, so she contacts Dr. Dogood who
agrees to testify on behalf of Deanna’s client at the trial. In return for Dr. Dogood’s
testimony, Deanna agrees to pay Dr. Dogood $10,000 if they win the case, and $5,000 if
they lose. Dr. Dogood agrees. The agreement between Deanna and Dr. Dogood is
unenforceable.
a. True
b. False
The UCC uses a transactional approach to risk of loss questions.
a. True
b. False
Dividing the risk and the shift of allocation of risk are options by agreement of both
parties.
a. True
b. False
The Clean Air Act’s 1990 Amendments sought to hasten attainment of certain air quality
standards, but failed to address specifically the subject of ozone pollution.
a. True
b. False
A trustee in bankruptcy may sell the property of the debtor’s estate.
a. True
b. False
The Age Discrimination in Employment Act currently protects employees between the
ages of:
a. 40 and
b. 40 and infinity.
c. 50 and
d. 18 and
Which one of the following cannot be registered under the Lanham Act?
a. An immoral mark
b. An inherently distinctive mark
c. A descriptive mark that has acquired distinctiveness through a secondary meaning
d. A geographic designation that has acquired distinctiveness through a secondary
meaning
With regard to UCC Article 6, which of the following is true?
a. The 1988 joint recommendation of the National Conference of Commissioners on
Uniform State Laws and the American Law Institute was for states to adopt the revised
version of Article 6, which the majority of states have done.
b. At least 45 states have repealed Article
c. Article 60 is a revision of Article
d. All of these.
Doug takes a $500 check drawn by Gail to Gail’s drawee bank to cash it. Gail has over
$10,000 on deposit in her account. If her bank refuses to pay Doug:
a. Doug can sue the bank and demand payment if the check is not ‘stale.”
b. and the check is over 30 days old, the bank has a right to refuse payment.
c. the bank has incurred a liability to Gail for its improper refusal to pay the check if it
is not ‘stale.”
d. All of these.
Sam, a shopkeeper, dies unexpectedly at the age of His lifelong business associate,
Paul, is appointed the administrator of the estate. Sam had a personal debt of $8,000
which he owed to Art’s Appliance Store. Paul says to Art, “If there isn’t enough money
in the estate, I’ll personally see that the bill is paid.” Which of the following is correct?
a. The oral statement is enforceable because Paul is the administrator.
b. An oral statement such as this is not enforceable because it is outside the statute of
frauds.
c. An oral statement such as this is not enforceable because this promise is within the
statute of frauds. d. The oral statement is enforceable because it is a collateral promise.
Temporary insurance coverage prior to the issuance of the actual policy may be
obtained by use of a(n):
a. premium agreement.
b. coinsurance clause.
c. option clause.
d. binder.
The board of directors of Z & X Corporation declared cash dividends of $5 per share. If
these dividends are not paid, a shareholder can bring suit to require payment.
a. True
b. False
With respect to the voting rights of shareholders, a shareholder is entitled to vote:
a. only at annual shareholder meetings.
b. one vote for every two shares of stock owned.
c. only in person.
d. at annual and special shareholder meetings, ordinarily with one vote for each share
owned.
Which of the following is NOT a duty that a collecting bank has in the collection
process?
a. Duty of care
b. Duty to act timely
c. Duty to honor a valid stop payment order
d. Duty to honor a restrictive indorsement
Brenda agrees to lease a new car from Hyland Motors. Which of the following
statements is true?
a. Brenda has no insurable interest in the car.
b. Brenda receives title at the time of her contract with Hyland Motors.
c. Hyland Motors retains an insurable interest in the car unless and until Brenda
exercises an option to buy the car.
d. None of the above.
Which of the following is true about the regulation of pesticide use by EPA?
a. A pesticide may be legally registered if it will perform its intended function without
posing unreasonable risk to humans or the environment.
b. The EPA may balance the economic and social costs and benefits of use of a pesticide
in deciding whether to register it.
c. Both of these.
d. Neither of these.
The Abbot Corporation contracts with the Baker Corporation to sell to Baker its entire
production. After signing the agreement, Abbot can increase its production from one
shift to two shifts and Baker will have to buy all of the doubled production.
a. True
b. False
Albert recently graduated from college with a degree in business administration, but has
been unable to find a job.
He has decided to file a Chapter 7 petition with the Bankruptcy Court. He has the
following assets:
a. a $250 ring.
b. $5,000 in equity in a condominium secured by a mortgage.
c. $100 a week in unemployment benefits after being laid off from his previous job.
d. $750 in business administration books, including a barely-used copy of BusinessLaw.
e. a $1,000 retainer for his teeth prescribed by his orthodontist.
f. $1,200 in equity in a new car which he purchased with a loan from the bank.
His debts are as follows:
a. $10,000 in student loans.
b. $20,000 to the bank for his car. The loan is secured by the car. c. $5,000 in unsecured
credit card debts.
What can he keep? What will each of the creditors receive? Explain.
The adequacy of consideration, while not important to the existence of consideration,
may be relevant to the availability of certain defenses or remedies.
a. True
b. False
The status of holder in due course was created to encourage the free transferability of
negotiable instruments. a. True
b. False
The doctrine of corporation by estoppel is distinct from that of corporation
defacto;estoppel does not create a corporation.
a. True
b. False
Joanne rents a single-family house and lot for one year starting September If the house
burns down, the common law requires:
a. payment of rent up to the time of the destruction.
b. payment to be suspended until the house is repaired.
c. termination of the lease.
d. payment to continue for the entire year.
The antifraud provisions of the 1934 Act would prohibit which of the following?
a. Lying about the value of the firm’s assets to sell stock
b. Disclosing that the firm has discovered oil on its property in order to sell stock
c. Telling about the bad health of the CEO in a transaction to purchase stock
d. Not disclosing the salaries of secretaries of a large firm whose stock is being sold
William draws a check on City Bank payable to the order of Tara. Tara indorses it to
Rebecca. Rebecca deposits it to her account in Town Bank. Town Bank properly
presents it to City Bank, the drawee. City Bank dishonors it because William did not
have enough funds on deposit to cover the check. In this case:
a. William is discharged from liability only if he fails to receive notice of dishonor.
b. City Bank has until midnight of the following day to notify Town Bank, Rebecca, or
Tara of the dishonor.
c. if Town Bank received notice of dishonor on Monday, it would have until midnight
on Wednesday to notify
TaraorRebecca.
d. Rebecca has until midnight of the following day after receipt of notice of dishonor to
notify Tara.
Article 9 of the UCC would govern transactions involving which one of the following?
a. Mortgage on a house
b. Purchase of waterfront property
c. Financing purchase of a sailboat
d. Mechanic’s lien on an automobile
The 2002 amendments to the Revised Act provide for procedures permitting:
a. a corporation to change its state of incorporation.
b. a domestic business corporation to become a domestic or foreign partnership or LLC.
c. Both of these.
d. Neither of these.
Insiders may refrain from trading on inside information rather than disclose it to avoid
liability under Rule 10b-5.
a. True
b. False
If a stock offering is made only to “accredited investors,” there is no limit on the
amount of the offering for the exemption to apply.
a. True
b. False