1) daniel is a senior at state university. brian, daniels father, is concerned about daniels
study habits, given that daniel spends most of his evenings at the campus pub instead of
the library. brian promises daniel that he will send him on an expense-paid trip to
europe after his graduation if daniel spends at least five evenings a week studying in the
campus library for the remainder of his senior year. after returning home from his
graduation, daniel asks brian about the european trip. brian replies, your education was
your reward. i dont owe you a trip to europe. brian is:
a.correct; daniel has already gained the benefit of the bargain.
b.correct; daniel did not give anything of legal value.
c.incorrect; brian owes daniel a trip to europe because daniels acts are consideration.
d.incorrect, but only if daniels acts are adequate consideration for such an expensive
trip.
2) dan, president of baz co., is happy with the extraordinary performance of naomi, a
baz co. senior accountant. dan informs naomi that because of her superlative work in
the past fiscal year, he is going to give her a 5 percent raise effective next month.
naomi, who has never heard of anyone at baz co. getting a raise, is thrilled and thanks
dan. later that day, dan realizes that giving naomi this raise might cause all senior
accountants to demand salary increases. dan decides not to give naomi a raise after all.
he believes that his promise to give her a raise is not legally binding. dan is correct
because:
a.there was no bargained-for exchange for the raise.
b.of the preexisting duty rule.
c.past consideration is not an act or promise.
d.past consideration is not liquidated.
3) a(n) _____ is secondarily liable for the debt of the principal debtor.
a.surety
b.guarantor
c.beneficiary
d.executor
4) watley took his old bicycle to the municipal dump. vandelay retrieved it from the
dump and repaired it. newman stole the bicycle from vandelays garage, made
substantial improvements to it (the bicycle), and then sold it to banya. banya did not
know that the bicycle had been stolen. who owns the bicycle? explain your reasoning.
5) patricia has requested extra payment because abnormal subsurface rock formations
made excavation on the construction site far more costly and time-consuming than
could have been reasonably expected. the court will:
a.enforce such modifications in contract.
b.allow the party to rescind such a contract.
c.consider the contract voidable.
d.consider the contract unenforceable.
6) in the case of _____, the right to foreclose under a power of sale must be expressly
conferred on the mortgagee by the terms of the mortgage.
a.foreclosure by action and sale
b.strict foreclosure
c.accommodative foreclosure
d.foreclosure by power of sale
7) in a limited partnership, limited partners:
a.play an active role in the management of the firm.
b.do not pay federal income tax on their share of the profits.
c.are passive investors.
d.have unlimited liability for the firms debts.
8) dawson entered into a contract with jensen for the sale of dawsons boat. which set of
legal rules governs this transaction?
a.contract rules of the common law
b.contract rules of the uniform commercial code
c.equity rules that ensure fairness in transactions
d.marine law
9) the person who is designated to vote on behalf of the shareholder is called a(n):
a.sharebroker.
b.agent.
c.voter.
d.proxy.
10) which of the following is true about a limited partnership?
a.a limited partnership has difficulties raising large amounts of capital.
b.a limited partnership can be created only by complying with a state statute permitting
limited partnerships.
c.a limited partnership cannot be transferred to another person.
d.limited partners are liable for the obligations of the limited partnership after making
their capital contributions.
11) which of the following is an apparent authority during winding up?
a.providing a third party notification of the dissolution.
b.continue making new contracts with disregard to the third parties awareness about the
same.
c.conducting business the way it was before dissolution.
d.filing a statement of dissolution with the secretary of state.
12) a(n) _____ is a formal charge signed by the prosecutor outlining the facts
supporting the charges against the defendant.
a.booking
b.indictment
c.information
d.arraignment
13) which of the following is true of necessaries?
a.the liability for necessaries is quasi-contractual.
b.a minor is liable for the necessaries that he/she did not receive.
c.in case of a disaffirmance, the minor need not pay for any necessary.
d.an item is considered a necessary even if the minor already possesses it.
14) which of the following is a characteristic of administrative agencies?
a.they derive their power from the supreme court.
b.they make ordinances and pass executive orders.
c.they are generally created by a statute.
d.they are elected bodies.
15) abyss handed over a $500 check to howard brothers for building him a terrace
garden. the next day, abyss notices that one part of the garden has not been finished. he
calls his bank to order a stop-payment on the check. when howard brothers presents the
check next week, the bank honors it. which of the following is true in this case?
a.since abyss did not give the bank enough time to process a stop-payment order, the
bank is not liable for this loss.
b.the bank is liable to recredit abysss account, since abyss has suffered a loss by the
banks payment.
c.abyss will not be able to show that he sustained any losses, hence cannot have his
account recredited.
d.the bank is not liable for honoring any checks in good faith, that are signed by the
drawer-depositor.
16) tom is the sole director and largest shareholder of newage corporation, a close
corporation. jim and janice, the two other shareholders of newage corporation, allege
that though tom is paying himself a large salary, no dividend has been paid in the last
three years. tom also refuses to hire them as employees of the corporation. jim and
janice are complaining of:
a.oppression.
b.novation.
c.right of appraisal.
d.maltreatment.