A cashier’s check is a draft drawn by a bank on another bank or payable through a
bank.
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The bank is primarily liable on a cashier’s check.
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Federal inheritance taxes are imposed on a person who receives a statutory share from
an estate.
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All opinions of the Supreme Court can be cited as precedents.
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The modern trend is for courts to tolerate more open and missing terms in offers.
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Promisors in complete performance contracts who do not completely perform can
always recover the contract price.
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Ratification must be expressed and may not be implied from the actions of the agent.
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Under the Clean Air Act, manufacturers may sell vehicles without prior certification
from the EPA if they have met the required standards in all prior checks.
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Health insurance contracts normally do not cover preexisting health conditions.
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When the buyer refuses to accept goods that conform to the contract or repudiates the
contract, the seller has to resell the goods.
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An interest in personal property that a creditor obtains to secure payment of an
obligation is a security interest.
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Franchisee-franchisor business relationships are governed by federal legislation only.
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In a ‘˜deed of trust’ transaction, the borrower deeds to the trustee the property that is to
be put up as security.
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The Consumer Product Safety Commission (CPSC)’s authority is limited to cosmetics
and food products.
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Under the laws of some states, the birth of a child after the execution of a will may
operate as a partial revocation of the will.
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When the issue in a case no longer exists or has become pointless, that issue is
considered moot.
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The value assigned to the shares in the articles of incorporation is called “par value.”
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The Food and Drug Administration is an example of an independent agency.
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Parties to a sales contract act in good faith but the contract as a whole is
unconscionable. In this case, courts do not have the right to refuse to enforce the
contract.
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Peter draws a check on his account in Third National Bank payable to the order of
Stella. When Peter draws the check, he gets Third National Bank to certify the check.
Stella presents the check to Third National Bank for payment but the bank refuses to
honor the check. What is the result?
A. Third National Bank becomes primarily or absolutely liable on the check.
B. Peter is primarily liable on the check and Third National Bank is secondarily liable
on the check.
C. Both Peter and Third National Bank are primarily liable on the check.
D. Third National Bank has no contractual liability on the check whatsoever.
Answer:
A van from Mario’s Squibb Company is damaged by a heavy metal keg, which rolls out
of the second floor window of the two storied Toss-Co. Flower building. Toss-Co.
Flower is the sole occupant of the building. Although the van was parked under the
window while making a delivery at the Toss Co. receiving dock, no one admits to
having seen the keg fall, nor are there any witnesses who can state where the keg was
just before the accident. Can Mario recover against Toss-Co. for negligence?
A. Mario can recover, but only if it proves in detail how Toss-Co. breached its duty of
reasonable care to Mario.
B. Mario can recover if it can prove that kegs do not fall out of windows in the absence
of negligence and that Toss-Co. had exclusive control of the keg prior to the accident.
C. Mario will be unable to recover because parking under an open second floor window
amounted to contributory negligence.
D. Mario will be unable to recover because parking under an open second floor window
amounted to assumption of risk.
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Lani is upset with her roommate Bill because he refuses to clean up after himself. In a
fit of rage, Lani tries to hit him on his head but misses. At the time, Bill is turned away
from Lani and is completely unaware that she tried to hit him. Under these
circumstances:
A. Lani is liable only for battery.
B. Lani is liable only for assault.
C. Lani is liable neither for battery nor assault.
D. Lani is liable for causing mental distress.
Answer:
Trial courts differ from inferior courts in that trial courts:
A. are courts of limited jurisdiction.
B. are limited by the amount of civil damages that can be awarded.
C. are courts of record from which an appeal can be taken.
D. are called municipal courts in urban areas.
Answer:
Long-term, secured debt securities are called:
A. bonds.
B. indentures.
C. debentures.
D. notes.
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The plaintiff’s burden of proof in a tort case is proof by a preponderance of the
evidence, which is applied in:
A. a case where the defendant’s life may be at stake.
B. a case where the defendant’s liberty may be at stake.
C. a case where the defendant’s money is at stake.
D. all criminal cases
Answer:
The constitutional prohibition of ex post facto laws:
A. applies to statutory law.
B. aims to minimize the possibility of failure if the business has to go to court to
enforce its rights.
C. applies to common law.
D. gives lawyers a great deal of discretion in selecting an appropriate strategy for
handling a legal dispute.
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Compensatory damages are also known as:
A. actual damages.
B. punitive damages.
C. nominal damages.
D. statutory damages.
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Strict scrutiny:
A. is the analysis employed by the court in a case involving commercial speech.
B. is the analysis employed by the court in deciding an equal protection case involving
discrimination on the basis of race.
C. is a test of constitutionality that is satisfied if the challenged government action bore
a reasonable relation to a legitimate government purpose.
D. is the analysis employed by the court when suspect classifications are not in
question.
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Which of the following is TRUE for ratification?
A. It releases the principal from liability to the third person.
B. It gives the agent the same right to compensation that he would have had if there had
been prior authorization.
C. It requires that the principal to have full understanding of the legal significance of all
material facts.
D. It is inferred by a court from the fact that the agent accepted the benefits of an
unauthorized contract.
Answer:
Carol signs a 30-day note payable to Chrome Appliances for $500 and gives it to
Chrome as payment for a stereo set. When Chrome asks Carol for payment, she refuses
to pay because the stereo does not work properly. Chrome then negotiates the note to a
bank informing it of Carol’s refusal to pay. Under this scenario, which of the following
statements is TRUE?
A. The bank is not a holder in due course of the note.
B. The bank is a holder in due course of the note.
C. Dishonoured instruments always make the indorser the holder.
D. Chrome is the holder in due course.
Answer:
This act established the Pension Benefit Guaranty Corporation to provide insurance for
plans whose total assets were insufficient to pay promised benefits.
A. ADA
B. FLSA
C. ERISA
D. EPPA
Answer:
Miriam makes an oral agreement with John to sell him 200 acres of prime farmland for
a mere $500. Their agreement is:
A. enforceable in accordance with the statute of frauds.
B. covered by the statute of limitations.
C. enforceable only if promissory estoppel applies.
D. unenforceable as it lacks a writing as required by the statute of frauds.
Answer:
Involuntary petitions in straight bankruptcy can be filed against:
A. banking corporations and credit unions.
B. savings and loan associations.
C. a debtor engaged in business.
D. a nonprofit organization.
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A complaint:
A. must contain sufficient facts to show that the plaintiff is entitled to some legal relief.
B. is a rule of law enabling the defendant to win even if all of the plaintiff’s allegations
are TRUE.
C. was created to help deal with the increasing congestion of cases in most civil courts.
D. is a procedural device that is designed to narrow down issues to be proved at trial.
Answer:
One can become a shareholder:
A. by buying newly-issued shares that are sold through a stockbroker but which have
not been underwritten.
B. only by subscribing to shares that are being issued by an existing corporation.
C. by buying newly-issued shares that have been underwritten by an investment banker
and also sold by him.
D. by subscribing to shares in a new corporation and having them accepted by the board
of directors after incorporation.
Answer:
Under the UCC, an order requesting “prompt” shipment of goods:
A. requires acceptance via writing within a “reasonable” time frame.
B. impliedly invites acceptance only by a prompt promise to ship.
C. impliedly invites acceptance only by a prompt shipment of goods.
D. invites acceptance by either a prompt promise to ship or by prompt shipment of the
goods.
Answer:
A nuncupative will:
A. must be in writing.
B. is valid to transfer personal and real property.
C. must be signed by the testator.
D. is valid when made by soldiers or sailors.
Answer:
When a contract merely requires the seller to ship the goods, title passes to the buyer
when:
A. the contract is signed by both parties.
B. the seller delivers the goods to the carrier.
C. the buyer pays the seller.
D. the goods are delivered by the carrier.
Answer:
Which of the following statements is TRUE of negligence by an accountant?
A. The failure of an accountant to discover fraud by the client’s employees or others is
in itself proof of negligence by the accountant.
B. The investigative techniques used by accountants will always uncover the fraud of a
skillful and careful crook.
C. The traditional defenses of contributory negligence and comparative negligence can
apply in a negligence action against an accountant.
D. It is not necessary to notify an appropriate person in management if an accountant
has a basis for suspicion of fraud.
Answer:
________ provides that the Sherman Act shall not apply to nonimport trade unless the
conduct has a direct, substantial, and reasonably foreseeable effect on trade or
commerce within the U.S, on the U.S. import trade, or on the activities of U.S.
exporters.
A. The Robinson-Patman Act
B. The Clayton Act
C. The Noerr Doctrine
D. The Foreign Trade Antitrust Improvement Act
Answer:
An unliquidated debt is defined as:
A. one that has not been paid in full.
B. one that involves an honest dispute about the existence or amount of the debt.
C. one that is unenforceable due to lack of consideration.
D. one that is due and certain with no dispute about the existence or the amount of the
debt.
An honest dispute about the existence or amount of a debt makes the debt an
unliquidated one.
Answer:
The “right to cure” refers to:
A. the seller’s right to reship conforming goods in circumstances where the seller had
some reason to believe the buyer would accept nonconforming goods.
B. the seller’s opportunity to reship conforming goods only within the time of delivery.
C. the exclusive right, granted by state permit, of certain businesses to reship certain
types of items.
D. the seller’s right to sell nonconforming goods and not replace, when the past
shipments were not objected for substitution.
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