1) A joint stock company is generally treated as a partnership.
2) The UCC applies only to the extent that it has been adopted a state.
3) How property is taxed and what is required to transfer or acquire property is
determined by whether the property is classified as tangible or intangible.
4) Businesses typically protect their financial interests by obtaining insurance.
5) Checks are usually three party instruments.
6) A territorial or customer restriction is currently considered a per se violation of
antitrust law.
7) A short-form merger requires the approval of the shareholders of both corporations.
8) Hayley is injured in an incident precipitated by Isolde. Hayley files a tort action
against Isolde, seeking to recover for the damage suffered. Damages that are intended to
compensate or reimburse a plaintiff for actual losses are
a.compensatory damages.
b.reimbursement damages.
c.actual damages.
d.punitive damages.
9) As a judge in a federal court, Christine can decide, among other things, whether the
laws or actions of the executive and legislative branches are constitutional. The process
for making this determination is known as
a.judicial review.
b.jurisdiction.
c.venue.
d.early neutral case evaluation.
10) Fact Pattern 29-2B
Robin’s home is in a state that has a $30,000 homestead exemption. Robin defaults on a
$60,000 debt that she owes to Suburban Mortgage Company. Robin’s home is sold at
auction for $80,000.
Refer to Fact Pattern 29-2B. Suburban Mortgage may recover
a.$0.
b.$30,000.
c.$50,000.
d.$60,000.
11) The payment of Olinda’s debt to Pari is guaranteed by Olinda’s personal property.
Pari is most likely to perfect her interest by
a.insuring Olinda’s property for the full amount of its value.
b.calculating the precise amount of Olinda’s debt.
c.correcting grammatical errors in the parties’ written agreement.
d.filing a financing statement with the appropriate authority.
12) Renew Turf, Inc., enters into a contract with Sports Park to provide surface material
for Sports Park’s baseball fields by October 1 for a series to begin October 5. The
contract specifies an amount to be paid if the contract is breached. This is a liquidated
damages clause if the amount is
a.meant to pay for additional liquid sealant in the event of damage.
b.a reasonable estimate of the loss on a breach.
c.designed to penalize the breaching party.
d.intended to quickly provide cash to the nonbreaching party.
13) Barrett files a suit against City Moving Service for breach of contract, based on
what Barrett claims was City Moving’s offer. For a court to determine if a contract has
been breached, under the common law, the offer must include terms that are
a.exactly precise.
b.reasonably definite.
c.unequivocally approximate.
d.vague or uncertain.
14) Sybil agrees with Tyrone and other professional athletes to sign contracts with
promoters and others on the athletes’ behalf. Sybil is
a.an agent.
b.an employee.
c.an employer.
d.a principal.
15) Readymade Credit Company loans Start-Up Enterprise, Inc., $150,000 to invest in
new equipment. If Start-Up fails to pay the loan within a specified period, Readymade’s
recovery of the debt will be barred by
a.the preexisting duty rule.
b.the doctrine of promissory estoppel.
c.a statute of limitations.
d.none of the choices.
16) Barlow owns the surface rights for Canyon Ranch, but does not own the subsurface
rights. Dusty owns the subsurface rights. Canyon Ranch includes a house, a bunkhouse,
and two barns, which are damaged when Dusty is excavating for minerals under the
surface. Most likely responsible for the damage is
a.Dusty.
b.Barlow.
c.Dusty and Barlow.
d.no one.
17) Fact Pattern 41-1B
DIYFasteners Company decides to consolidate its operations with Evergrip Studs, Inc.,
to form Fit-Rite Bolts & ScrewsInc.
Refer to Fact Pattern 41-1B. Evergrip owed money to GuarantyBank and other
creditors. After the consolidation, Fit-Rite must pay
a.all of Evergrip’s debts.
b.half of Evergrip’s debts.
c.none of Evergrip’s debts.
d.only debts that Evergrip incurred after consolidation was proposed.
18) The Association of Organic Food Producers, which does not include all organic
farmers and ranchers, refuses to deal with any parties who do not carry the products of
its members. This group boycott is
a.a situation that neither restrains trade nor harms competition.
b.a legal restraint of trade.
c.a per se violation of antitrust law.
d.subject to analysis under the rule of reason.
19) 9.
Fact Pattern 18-B1
Moses sells an apartment building to Noelle with a promise to install a new heating and
air conditioning system , before September 1. The following February 1, Moses sends
Ollie, an HVAC technician, to begin the installation. Noelle orders Ollie to leave and
refuses to make further payments to Moses, who files a suit against Noelle.
Refer to Fact Pattern 18-B1. Moses’s late attempt to install the ventilation system is
most likely
a.a material breach.
b.complete performance.
c.excused by Noelle’s refusal to make further payments.
d.substantial, but not complete, performance.
20) The purpose of the homestead exemption is to ensure that the debtor will retain
some form of shelter.
21) A transfer by assignment can make it possible for a transferee to receive more rights
in the instrument than the prior possessor had.
22) Traditionally, the courts have protected the right to free speech to the fullest extent
possible.
23) In mediation, the mediator proposes a solution and makes a decision resolving the
dispute.
24) The litigation process has three phases: filing, answering, and appealing.
25) To be negotiable, an instrument must be payable on demand.
26) The forgery of a signature on an instrument is a valid defense against all holders
except HDCs and holders through HDCs.
27) Notice of dishonor can be given in any reasonable manner, including notice written
or stamped on the instrument itself.
28) Failure to live up to a standard of care may be an act or an omission.
29) Scienter clearly exists if a party knows a fact is not as stated.