Utilitarianism directs an individual to choose the action that provides the greatest good
for the greatest number of people.
When a drug manufacturer places prescription drugs in containers that can be easily
opened by children, the manufacturer can be subjected to strict liability action due to
defect in packaging.
The ACPA is federal statute that permits trademark owners and famous persons to
recover domain names that use their names where the domain name has been registered
by another person or business in bad faith.
The transfer of the right to use real property for a specified period of time is known as a
lease.
The buyer or lessee can recover any damages incurred on the disposition of the goods.
Tangible personal property includes securities, patents, trademarks, and copyrights.
Goods that are already in existence but which are to be sold at a future date are known
as future goods.
Labor unions are not covered under Title VII of the Civil Rights Act.
Police power permits states and local governments to enact laws to protect or promote
the public health, safety, morals, and general welfare.
In a share exchange, one corporation ends up owning all the shares of the other.
Under the replacement cost insurance, an insurer has the right to either pay the insured
for the loss or pay to have the property restored.
A franchisor that makes sales or earnings projections based on hypothetical examples
need not disclose the assumptions underlying the estimates.
Which of the following is true of an environmental impact statement (EIS)?
A) It is not required by state or local laws, only federal law.
B) It can be challenged in court by environmentalists or other interested parties.
C) It can only be accepted after Congress passes a bill adopting the EIS.
D) It is not required for projects undertaken by private parties.
Lionel Richmond is a soccer player who has a six-year contract with the Christshire
United soccer team. Two years into the contract, he meets with an accident which
results in the complete amputation of his right leg. On what basis is Richmond
discharged from further performance of the contract?
A) novation
B) substituted contract
C) accord and satisfaction
D) discharge by impossibility
The ________ is an act in the United States that provides that if people who would
inherit property from each other die such that it cannot be determined who died first,
each person’s property is distributed as though he or she had survived.
A) Succession Act of 1995
B) Family Law Act of 1986
C) Uniform Determination of Death Act
D) Uniform Simultaneous Death Act
To prove fraud, which of the following elements must be shown?
A) The innocent party knew the wrongdoer.
B) The innocent party was the one who detected fraud.
C) The wrongdoer assumed a false identity.
D) The wrongdoer intended to deceive the innocent party.
Price fixing is a ________ violation of Section 1 of the Sherman Act.
A) reasonable
B) per se
C) justifiable
D) permissible
Wilma buys a painting that is to be sold at an auction next week, but she has an
unforeseen engagement that requires her to go out of town on the day of the auction.
She asks her sister, Sara, to attend the auction and bid for the painting. If the sale is
successful, Sara is to claim legal title to the painting until Wilma returns. What kind of
trust is created between Wilma and Sara?
A) a charitable trust
B) a testamentary trust
C) a token trust
D) a resulting trust
Which of the following federal statutes requires creditors to disclose finance charges,
including interest, points, and other fees paid?
A) Fair Debt Collection Practices Act
B) Consumer Financial Protection Act of 2010
C) Mortgage Reform and Anti-Predatory Lending Act of 2010
D) Truth-in-Lending Act
Jenson and Johnson enter into a contract that involves Johnson paying Jenson $1,000
for shoveling the snow from his driveway throughout winter. Jenson, who was paid
before work commenced, breached some of the conditions of the contract on the very
first day. He should refund $1,000 to Johnson as ________.
A) compensatory damages
B) restitution
C) liquidated damages
D) consequential damages
Upon the termination of a marriage, the separate property owned by spouses is
________.
A) equally divided between the spouses
B) retained by the respective spouses who owned it
C) shared using a fair distribution method for marital assets
D) co-owned by both spouses
Which of the following is true of express warranties?
A) A manufacturer is liable for express warranties made by wholesalers.
B) A retailer is liable for the express warranties made by manufacturers of goods it
sells.
C) A retailer is not allowed to make warranties on manufacturer goods.
D) A manufacturer is obligated by law to make an express warranty on all its goods.
Members of an LLC (limited liability company) have ________ liability.
A) limited
B) unlimited personal
C) unlimited capital
D) strict
What are the implications of the North American Free Trade Agreement (NAFTA)
treaty?
A merger increases the number of voting shares of the surviving corporation by 23
percent. Which of the following is required in this context?
A) a unanimous vote by the incumbent directors
B) a majority vote of the board of directors
C) a majority vote of the shareholders
D) an affirmative vote by at least 30 percent of the shareholders
Which of the following would lead to the termination of an agency by operation of law?
A) the loss or destruction of the subject matter of the agency
B) the death of either the principal or agent
C) the loss of a required qualification
D) a change in the law
In the context of a tax sale, many states provide a period of ________ after a tax sale
during which the taxpayer can reclaim the property by paying the unpaid taxes and
penalties.
A) stipulation
B) consideration
C) redemption
D) exemption
Mr. Davidson, who owns 17 percent of his company’s shares, is displeased with the six
incumbent directors of the corporation. He proposes a slate of directors consisting of
five other persons and himself to become members of the board of directors of the
corporation and replace the incumbent directors. In the proxy contest, Mr. Davidson
manages to acquire proxies from shareholders who control only 35 percent of the
company’s shares. Which of the following is true in this context?
A) The shareholders who voted for Mr. Davidson’s slate of directors will constitute 35
percent of the new board of directors.
B) The incumbent directors will continue to form the board of directors.
C) The proxy contest did not establish a clear majority, so another proxy contest must
be held.
D) The slate of directors proposed by Mr. Davidson will form the new board of
directors.
Which of the following courts was created by Article III of the U.S. Constitution?
A) the U.S. Supreme Court
B) the U.S. Tax Court
C) the U.S. Court of Appeals
D) the U.S. Court of Federal Claims
Which of the following is true of the per se rule in restraint of trade?
A) fails to permit any defenses and justifications to save the restraint of trade
B) applies only to restraints that are found to be unreasonable with certain evidentiary
standards being met
C) applies to restraints that are based primarily on the firm’s market share and power
D) requires a balancing of the positive and negative effects of the challenged restraint
Inkilwas Corporation has 30,000 outstanding shares. A shareholders’ meeting is duly
called to amend the articles of incorporation, and 17,501 shares are represented at the
meeting. If an Inkilwas Corporation amendment for its articles of incorporation is put to
vote at this meeting, which of the following statements is true with respect to the
passing of the amendment?
A) The amendment would not be passed as all 30,000 votes have to be represented.
B) The amendment would be passed only if all 17,501 votes approve.
C) The amendment would be passed if 4,376 votes approve.
D) The amendment would be passed if 8,751 votes approve.