Carmen needs quick cash, so she hits upon a scheme. She tells Frank she’s collecting for
Laotian refugees. Frank writes a check for $100 payable to the order of Carmen.
Carmen indorses the check and delivers it to Joanne, who doesn’t know of Carmen’s
scam, for $90 cash. Joanne gives it to Margaret as a present. Frank discovers Carmen’s
deception and refuses to pay Margaret. Will he win?
a. No, because Margaret is a holder in due course.
b. No, because of the shelter rule.
c. Yes, since Margaret did not take the check for value.
d. Yes, since the check was not negotiated to Margaret.
Actual authority terminates upon:
a. dissolution of the partnership.
b. illness of one of the partners.
c. physical destruction of partnership papers.
d. All of the above.
An instrument representing an interest in real property created to secure repayment of
the debt is called a:
a. warranty deed.
b. foreclosure.
c. mortgage.
d. default judgment.
Non-bankruptcy compromises to give debtors relief while protecting the rights of
creditors include:
a. compositions.
b. non-statutory assignments for the benefit of creditors.
c. receiverships under the direction of a court with equity powers.
d. All of the above.
To prevent the use of the insurance policy for wagering purposes, the person who is to
be indemnified under the contract must have:
a. good faith.
b. an insurable interest.
c. a binder.
d. a coinsurance clause.
The Revised Model Act would permit the directors to avoid a shareholder vote for
which of the following amendments to the articles of incorporation?
a. Changing the name from The Oscar Company to McDuddy Corporation.
b. A change from duration of 99 years to perpetual life.
c. Authorizing a new class of stock.
d. Changing the number of directors from three to five.
When is a buyer deemed to have accepted goods that are delivered pursuant to a
contract?
a. If he fails to reject the goods after he has had a reasonable opportunity to inspect
them.
b. Immediately upon delivery.
c. Only when he pays for them.
d. Only after an express acceptance.
In determining whether a mark is distinctive and famous under the Federal Trademark
Dilution Act, a court may consider factors such as:
a. the duration and extent of the use.
b. the degree of recognition of the mark.
c. the degree of inherent or acquired distinctiveness of the mark.
d. All of the above
Bill Bonney, the sole stockholder of Kidd Corporation, wrongfully used the corporation
to avoid a personal liability. A court’s disregarding the corporate entity and holding
Bonney personally liable is called:
a. limited liability.
b. ultra vires.
c. diversity of interest.
d. piercing the corporate veil.
Which of the following is correct with respect to the accountant-client privilege?
a. The common law recognizes such a privilege.
b. Federal law recognizes such a privilege.
c. Some states statutorily recognize such a privilege.
d. All of these are correct.
The sole nursing home in the county offers a long-term care agreement. The contract is
prepared on a standard form and offers terms on a take-it-or-leave-it basis. Such a
contract is called:
a. exculpatory.
b. a usurious contract.
c. an illegal restraint of trade.
d. an adhesion contract.
Special shareholder meetings may be called by:
a. the board of directors.
b. holders of at least 10 percent of shares.
c. All of these are corect.
d. None of these are correct.
The party who files an appeal is called the:
a. plaintiff.
b. appellant.
c. appellee.
d. defendant.
State laws enabling local authorities to require municipality approval of every land
subdivision plat:
a. require approval first by a state planning board before plats can be recorded.
b. in some cases, make it a criminal offense to sell lots by reference to unrecorded plats.
c. all provide that building permits will not be issued unless the plat is approved.
d. are merely advisory and provide no penalties for failure to secure such approval.
Which of the following may be used to redress the ultra vires acts committed by a
corporation?
a. Proceeding by shareholders for an injunction.
b. Suit by the corporation or shareholders derivatively against present or former
directors or officers for commission of the acts.
c. A proceeding by the attorney general of the state of incorporation to enjoin it from the
transaction of unauthorized business.
d. All of the above.
Which of the following can be done with the consent of only a majority of the partners
in a partnership?
a. Submission of a partnership claim to arbitration.
b. Confession of judgment.
c. The sale of an office computer.
d. All of the above.
Which of the following has been held to destroy the negotiability of an instrument and
to render its transfer a contractual assignment?
a. “I wish you would pay.”
b. “Pay to the order of John Jones.”
c. “Pay bearer.”
d. None of the above.
The Family and Medical Leave Act of 1993:
a. applies to private employers with 50 or more employees.
b. does not apply to governmental employers.
c. allows, during a twelve-month period, up to sixteen weeks of leave for childbirth,
adoption, or serious health conditions of a spouse, child, or parent.
d. requires that the employer pay at least 50 percent of the employee’s wages and
benefits during the leave period..
General Widget’s partnership assets amount to $34,000 after liquidation. Frank, Gene,
and Hank, equal partners, each contributed $3,000 into the capital pool at the inception
of the business. Gene later loaned the business $5,000. The partnership owes $23,000 to
creditors for inventory. What will Gene get in distribution under the UPA, assuming
there is no agreement on the distribution of profits?
a. $5,000.
b. $7,000.
c. $8,000.
d. $11,000.
Compare the respective roles of the officers, board of directors, and the shareholders of
a corporation. Who runs the corporation? Explain your answer and give examples.
A judge deciding a common law case typically must follow decisions of similar cases
previously decided..
Charitable subscriptions are one of the most frequently occurring applications of the
doctrine of promissory estoppel.
If Tom and Tim are tenants in common, they each own a specific half of the property.
The Sixth Amendment protects persons against self-incrimination, double jeopardy, and
being charged with a capital offense except by grand jury indictment.