Which of the following is correct with respect to the Code’s approach to impossibility
of performance?
a. A significant drop in demand for the goods will excuse the buyer’s performance.
b. Increased production costs will excuse performance by the seller.
c. Performance will be excused when it is impractical as a result of one or more
unforeseen supervening events that are more than mere hardship or increased cost of
performance.
d. All of these are correct.
A Federal Trade Commission rule limits the rights of a holder in due course of an
instrument that evidences a debt arising out of:
a. a consumer credit contract.
b. an insurance contract.
c. a consumer purchase paid for with a check.
d. a construction contract.
Zelda signs a promissory note for $500 to First Bank. At the request of both Zelda and
the bank, Ann also signs the note as an accommodation maker. In this situation:
a. Zelda is primarily liable on the note.
b. Ann is primarily liable on the note.
c. Ann has secondary liability on the note
d. Both (a) and (b).
The definition of a limited liability company includes that:
a. it is a noncorporate business.
b. it limits liability for all its owners.
c. all members may participate in management of the business.
d. All of the above.
Section 11 of the Securities Act of 1933 imposes liability on:
a. the issuer.
b. all persons who signed the registration statement.
c. every director or partner, and all underwriters.
d. All of the above.
Which of the following is untrue with regard to the interpretation of contracts?
a. Express terms prevail over course of performance, and course of performance
prevails over course of dealing.
b. Technical terms will always be given technical meaning and language that has a
commonly accepted meaning is always interpreted in accordance with that meaning.
c. Handwritten or typed terms are given greater weight than preprinted terms.
d. All writings that are part of the same transaction are interpreted together.
A buyer in Atlanta enters into a sales contract with a seller in Chicago. If the contract
does not mention the place for delivery of the goods, the place of delivery will be:
a. at the seller’s business or residence in Chicago.
b. as stated in all destination contracts.
c. at the buyer’s business or residence in Atlanta.
d. irrelevant since the contract is void.
An artist would like to protect one of her original oil paintings from being sold as
original prints. She may protect her painting by applying for a:
a. copyright.
b. patent.
c. trademark registration.
d. service mark registration.
A decision of the U.S. Supreme Court on a federal question is:
a. binding on all federal, but not state, courts.
b. binding on all federal and state courts.
c. not binding, but is advisory, on all federal and state courts.
d. not binding or advisory on state courts.
A decision of the Supreme Court of Washington would always be binding on:
a. a federal district court in Washington.
b. a state trial court in Washington.
c. the U.S. Court of Appeals for the 9th Circuit.
d. a state trial court in Oregon.
What are the duties of a trustee under Chapter 7?
a. To use, sell, or lease property of the estate and to deposit or invest money of the
estate.
b. To employ attorneys, accountants, appraisers, or auctioneers and assume or reject any
executory contract or unexpired lease of the debtor.
c. To rehabilitate the accounts of the debtor.
d. Both (a) and (b)
Which of the following is NOT considered to be an equitable remedy?
a. Specific performance.
b. Injunction.
c. Reformation.
d. Money damages.
Millie, a tenant, abandons her apartment after six months, even though there are six
months left on her lease. If no survival clause was in the lease, would the landlord be
able to hold Millie liable for rent?
a. Yes, but he must leave the apartment vacant.
b. Yes, after he gives notice to the tenant.
c. Yes, after he relets the apartment.
d. No, the obligation to pay ended when Millie abandoned the apartment.
a. Ron wants to buy all of the stock of Quagmar, Inc. He approaches the officers and
directors and offers to pay them $200 per share for each of the shares they hold. The
officers and directors agree and then convince the majority of shareholders to sell their
stock for $100 per share. Do the other stockholders have a cause of action against the
officers and directors? Explain.
b. Arthur, Bob, and Clark are three of the five board members of Krescent, Inc. One day
they meet by chance for breakfast and decide to transact some corporate business while
they are all together. If they decide to declare a dividend and to purchase another
building for the corporation at this meeting, will their actions be binding on the
corporation? Explain. Is this a meeting of the board of directors according to the Model
Act? Explain your answer.
The contract between the buyer and the seller may expressly limit or exclude
consequential damages so long as the contract is not unconscionable.
Explain when a writing is required under the UCC for a contract for the sale of goods
and what is needed in that writing. Identify three exceptions to the requirement of a
writing or record for the sale of goods.
The Credit Card Fraud Act contains criminal penalties for violations of its provisions.
A dissenting shareholder who complies with all applicable requirements is entitled to an
appraisal remedy.
A promisee is the person making a promise.
The 2002 Sarbanes-Oxley Act created a five-person Accounting Oversight Board with
authority to review and discipline auditors.