1) article 9 of uniform commercial code deals with provisions regarding security
interests involved in a personal property.
2) in a clayton act section 7-based challenge to a merger, the courts adoption of a broad
relevant market definition will usually enhance the governments or private plaintiffs
difficulty in demonstrating the challenged mergers probable anticompetitive effect.
3) bills bicycle business has gone bust. the week before bill went into bankruptcy, he
paid $200 for a used bicycle that he intended to re-sell for a profit. this $200 payment is
a preference under chapter
4) a submaterialman is not entitled to a lien, unless specifically stated by the statute of
the state which is applicable to him.
5) a secured creditor is classified as an unsecured creditor, to the extent of the debt
amount which exceeds the value of the collateral held by such secured creditor.
6) which of the following circumstances is a valid reason for the delay of a lawsuit once
the statutory period is over?
a.illegality of the contract
b.change of mind of the nonbreaching party
c.minority of the nonbreaching party
d.addition of a third party
7) a shareholders preemptive right allows him to:
a.increase his proportionate voting power.
b.maintain his dissenters right.
c.increase the value of his shares.
d.maintain his proportionate share of dividends.
8) the corporate form of business has facilitated the rapid growth of development by
allowing businesses to attain economies of scale compared to other forms of businesses
by:
a.giving businesses a greater capacity to raise capital.
b.imposing unlimited management responsibilities on the owners.
c.maximizing the owners liabilities.
d.granting the persons who control a corporation limited flexibility in operating it.
9) _____ are legal reasons for avoiding or reducing liability of an individual who is
liable on a negotiable instrument.
a.personal defenses
b.procedural defenses
c.real defenses
d.excuse defenses
10) _____ ethical theories focus on the consequences of a decision.
a.deontological
b.teleological
c.kantian
d.right
11) catz corporation has two majority shareholders and five minority shareholders. the
five minority shareholders created a voting trust in november 2011 to control catz
through the concentration of shareholder voting power in the voting trustees. under the
model business corporation act (mbca), this voting trust will be valid till:
a.september 2014.
b.october 2021.
c.september 2026.
d.october 2016.
12) what is the liability faced by an insurer if it breaches its policy obligations by means
of a good faith but erroneous denial of coverage?
a.compensatory damages
b.punitive damages
c.special damages
d.liquidated damages
13) which of the following is true regarding a transferors liability on a transfer
warranty?
a.the warranties apply only when the transfer was accompanied by the transferors
indorsement.
b.the transferor is liable only after presentment to the drawee or a primarily liable party,
followed by that partys dishonor.
c.it applies even when there was no consideration for the transfer.
d.if the transfer was by indorsement, the warranty extends to all subsequent transferees,
and not just the immediate transferee.
14) normally, an illegal contract is:
a.a quasi-contract.
b.implied-in-fact.
c.unenforceable.
d.voidable.
15) which of the following indorsements is a special indorsement?
a.for collection only.
b.mel gibbs
c.pay to jack black in trust for mel gibbs
d.pay to the order of jack black, mel gibbs
16) which of the following is also known as the “dormant” commerce clause?
a.power of congress to regulate interstate commerce.
b.power of congress to regulate instrumentalities of interstate commerce.
c.limits on the states ability to burden interstate commerce.
d.limits on congress to burden states with taxes.
17) when a promisee who has an existing claim agrees with the promisor that he will
accept some performance different from that which was originally agreed on, both
parties can use the remedy of:
a.specific performance.
b.accord and satisfaction.
c.waiver.
d.rescissions.
18) a person creates a handwritten instrument in pencil on a piece of wrapping paper.
the instrument is:
a.negotiable even though it is handwritten.
b.nonnegotiable because it is handwritten.
c.nonnegotiable since it is written on a piece of wrapping paper.
d.void.
19) dave tells dora that phil, a financial advisor, has been stealing money from his
clients. dora then repeats daves statement to tom, telling tom that the information comes
from dave. all these statements are oral, defamatory, and false. phil sues dave and dora
for defamation. which of the following is true? (dont consider defenses and privileges).
a.phil can recover against dave and dora without proving special damages.
b.because dora only repeated daves statement and identified dave as its author, she cant
be liable to phil.
c.because dave only communicated his statement to dora, and not to an appreciable
number of people, he cant be liable to phil.
d.phil must prove special damages in order to recover against dave and dora.
20) joan carefully completes and signs a $1000 note payable to pete. pete skillfully
changes the amount of the note to $10,000, and negotiates it to hilda for that amount.
hilda qualifies as a holder in due course. when hilda presents the altered note to joan for
payment, joan refuses to pay a penny more than $1000. which of the following is true?
a.joan is not liable to hilda.
b.joan is liable to hilda for $1,000.
c.joan is liable to hilda for $10,000.
d.joans liability to hilda will be determined by the relative negligence of joan and hilda.
21) a holder in due course of a negotiable instrument takes the instrument free of all
defenses to the instrument except those that concern its:
a.validity.
b.reliability.
c.adaptability.
d.collectibility.