1) Corporate accountability can be increased by imposing strict disclosure requirements
and harsh penalties for securities laws.
2) The sanctions imposed on criminal wrongdoers are the same as those applied in civil
cases.
3) Market power is the ability of a firm to enter a given market.
4) A director who does not hold a management position in the corporation is an outside
director.
5) The International Court of Justice normally has authority to settle legal disputes only
when nations voluntarily submit to its jurisdiction.
6) A foreign state is immune from the jurisdiction of U.S. courts unless the state is
involved in commercial activity within the United States.
7) Few laws directly apply to the security of e-money payment information and
e-money issuers’ financial records.
8) Juan is a judge. How Juan and the judges in other courts interpret a particular statute
determines
a.how that statute will be applied.
b.how the law needs to be changed.
c.how the common law should be codified.
d.nothing.
9) Huey signs a promissory note in reliance on Ian’s assurance that it is not a note. Ian
negotiates the note to Jinx Collection Agency, which is a holder in due course (HDC) of
the note. When Jinx tries to collect, Huey refuses to pay. Under the HDC doctrine, the
loss falls on
a.Huey only.
b.Huey and Jinx equally.
c.Huey or Jinx, depending on which party can afford the loss.
d.Jinx only.
10) ConnectWeb, Inc., an Internet service provider (ISP), supplies information to the
Federal Trade Commission concerning possible unfair or deceptive conduct in foreign
jurisdictions. For this disclosure, federal law gives ConnectWeb and other ISPs
immunity from liability. This is
a.goodwill.
b.fair use.
c.a safe harbor.
d.a license.
11) Roland files a petition in bankruptcy. After all his assets have been sold and the
proceeds distributed among his creditors, Roland’s remaining debts
a.are discharged.
b.will be paid by the court.
c.must be paid by Roland.
d.are put on hold until Roland has sufficient means to pay them.
12) Fact Pattern 30-1B
Resource Drilling Company buys equipment for use in its operations, borrowing $1
million from Security Finance Corporation for a security interest in the equipment. The
next day, Resource Drilling borrows $500,000 from Touchstone Loans, also for a
security interest in the equipment. Resource Drilling defaults on both loans.
Refer to Fact Pattern 30-1B. Suppose that Security Finance perfects its security interest
when Resource Drilling takes possession of the equipment. In that circumstance, the
party with priority to the collateral on Resource Drilling’s default would be
a.Resource Drilling.
b.Security Finance and Touchstone Loans proportionately.
c.Security Finance only.
d.Touchstone Loans only.
13) Signe offers to sell Thomas her textbook but conditions the sale on Thomas ac-
cepting the offer by March 1. Signe may revoke the offer
a.before Thomas accepts the offer.
b.before March 1, whether or not Thomas has accepted the offer.
c.only after Thomas accepts the offer.
d.only after March 1.
14) Sun Power, Inc., sells solar power cells and panels to commercial dealers in the
Southwest. With regard to the UCC’s good faith requirement, Sun Power can
a.avoid it only by a conspicuous written disclaimer.
b.avoid it only by oral disclaimer.
c.avoid it with or without a disclaimer.
d.not disclaim it.
15) Fact Pattern 17-B1
Able Contractors, Inc., enters into a contract with Beau to repair, rebuild, and remodel
Coastal Marina & Boardwalk, using products from Delta Lumber & Marine. Eatwell
Caf© is next to Coastal Marina.
Refer to Fact Pattern 17-B1. Halfway through the project, Able Contractors refuses to
finish the job. The contract can be enforced against Able Contractors by
a.Beau only.
b.Beau or Coastal Marina only.
c.Beau, Coastal Marina, or Delta Lumber only.
d.Beau, Coastal Marina, Delta Lumber, or Eatwell Caf©.
16) Oliana is a partner in Pacific Traders. In the majority of states, with respect to any
partnership obligations that Oliana does not participate in, know about, or ratify, Oliana
would be liable for
a.none of the obligations.
b.all of the obligations, jointly and severally.
c.all of the obligations, jointly but not severally.
d.only the contractual obligations.
17) Robyn, an employee at Social Media, Inc., is laid off. Before he leaves, he e-mails
Social Media’s marketing campaign to Tweets & Trades Corporation, Social Media’s
competitor, without permission. This is
a.a sneaky but legal method of competing with a business rival.
b.a secretive but lawful way to exact revenge on a supervisor.
c.a simple, legitimate attempt to create a job opportunity.
d.a theft of trade secrets.
18) Lewis wants to file a suit against Mikayla. Before any court can hear the case
a.the parties to the dispute must agree.
b.the court must have jurisdiction.
c.the court must issue a deposition.
d.the parties must own property.
19) Quay Trucking Service tells Rafe that it will pay him $50 if he unloads a certain
truck at the Shipping Warehouse. Rafe’s acceptance is complete
a.as soon as Rafe says he will unload the truck.
b.once Rafe starts to unload the truck.
c.only after Rafe unloads the truck.
d.when Rafe hears Quay’s offer.
20) Diego is the payee of a bearer instrument – a promissory note in the amount of
$1,000. Emil offers to harvest Diego’s field of alfalfa in October in exchange for the
note. Diego agrees and delivers the note to Emil. Emil is not an HDC of the note
because he
a.was not the original payee on the note.
b.did not take the note without notice.
c.did not acquire the note in good faith.
d.did not give value for the note.
21) Able Builders, Inc., contracts with Beach Assets Company to build a Cool Juice
stand near Divers’ Beach. The work is to begin on April 1 and be done by June 1, so that
the stand can open for the summer. Able Builders does not finish until June 14. The
stand opens but Beach Assets loses two weeks’ early summer sales due to the delay. Is
Beach Assets’s duty to pay for the construction of the stand discharged?
22) Because fraud actions necessarily involve wrongful conduct, courts may award
punitive damages.
23) Law enforcement uses social media to detect and prosecute criminals.
24) A right can be assigned even if the assignment will significantly alter the risks or
duties of the obligor.
25) The crime of bribery occurs when the bribe is offered-it is not required that the
bribe be accepted.
26) Federal law permits the intentional accessing of stored electronic communication
even if the accessing is unauthorized.
27) Lamar owns a field behind Megan’s house and property. The only access to the field
is Megan’s driveway, which Lamar uses to get to his field. If Lamar sells the field, can
the buyer use the right-of-way across Megan’s property?