1) a drawer whose bank paid checks over a stop-payment order may not be entitled to
have his account recredited, if he is unable to show he suffered any loss.
2) parol evidence can be used to contradict the terms of a partially integrated contract.
3) the negotiable instruments of a corporation have to be signed by an agent of the
corporation who is authorized to sign the instrument.
4) a limited liability company may elect to pay no federal income tax.
5) a minor has the right to recover property transferred to third parties. this includes
even good faith purchasers.
6) as per the 2005 amendments, the trustee of a bankruptcy estate has the authority to
sell personally identifiable information to persons not affiliated to the debtor.
7) special deterrence results when punishment of a wrongdoer deters other persons from
committing similar offenses.
8) government-owned corporations are created primarily to allow their owners to have
limited liability.
9) supreme court decisions in recent years indicate that some group boycotts receive per
se treatment, whereas other group boycotts receive rule of reason treatment.
10) a tellers check is a check on which a bank is both the drawer and the drawee.
11) the family and medical leave act requires employers to pay employees while they
take leave for one of the reasons stated in the act.
12) agency action may be overturned if it is unsubstantiated by the facts before the
agency when it acted.
13) joe and jack have a written contract whereby joe agrees to sell jack a plot of land
for $100,000. later, without terminating the first contract, the parties modify the deal so
that joe sells jack the same plot of land for $125,000. the second agreement is not a
contract because:
a.the first contract was not terminated.
b.there is no consideration for jacks promise.
c.joes promise is illusory.
d.written contracts for the sale of land cannot be modified.
14) cey corp. entered into a contract to sell parts to deck, ltd. the contract provided that
the goods would be shipped “fob cey’s warehouse.” cey shipped parts different from
those specified in the contract. deck rejected the parts. a few hours after deck informed
cey that the parts were rejected, they were destroyed by fire in deck’s warehouse. cey
believed that the parts were conforming to the contract. which of the following
statements is correct?
a.regardless of whether the parts were conforming, deck will bear the loss because the
contract was a shipment contract.
b.if the parts were nonconforming, deck had the right to reject them, but the risk of loss
remains with deck until cey takes possession of the parts.
c.if the parts were conforming, risk of loss does not pass to deck until a reasonable
period of time after they are delivered to deck.
d.if the parts were nonconforming, cey will bear the risk of loss, even though the
contract was a shipment contract.
15) under the model nonprofit corporation act (mnca), a quorum of 10 percent of the
votes entitled to be cast on a matter is required for members to proceed further in a
meeting.
16) _____ is actual authority that the principal has manifested to the agent using very
specific or detailed language.
a.implied authority
b.primary authority
c.express authority
d.apparent authority
17) in a due diligence meeting, officers and experts confer with each other for the
purpose of:
a.increasing corporate transparency and responsibility.
b.ascertaining that the registration statement contains no misstatements or omissions of
material fact.
c.creating strategies for maximizing capital raised from public issue of securities.
d.issuing a proxy solicitation document for issuance of securities.
18) which of the following is a condition necessary for an agreement for liquidated
damages to be enforced?
a.if actual damages would be difficult to prove in the event of a breach of the contract
b.if the amount is large enough to be considered penal
c.if the amount is considered unconscionable
d.if there is no breach of the contract agreed upon by both parties
19) a special term used to define a freeze-out of shareholders of a publicly owned
corporation is:
a.oppression.
b.novation.
c.right of appraisal.
d.going private.
20) acme corp. asserted in a magazine advertisement that its electric-powered bunion
sander will remove bunions from users feet twice as fast as any other bunion sander on
the market today. as part of an investigation into whether this advertising claim was
deceptive, the federal trade commission (ftc) issued a subpoena demanding that acme
produce all of its records regarding tests it has performed to substantiate the
performance claim for the bunion sander. the subpoena also demanded production of all
records of tests to substantiate any performance claims made by acme during the past
four years regarding each of the 32 other products manufactured by acme. four of these
other products were electric-powered products in the personal care category. the
remaining products were either lawn care products or nonelectric tools. the strongest
argument that acme may make concerning the subpoena is that the subpeona:
a.is invalid because the ftc investigation is not being conducted for a legitimate purpose.
b.need not be obeyed because it violates acmes fifth amendment privilege against
compulsory testimonial self-incrimination.
c.need not be obeyed to its fullest extent because the portion dealing with records on
most of acmes other products is not sufficiently specific and is unreasonably
burdensome.
d.is invalid unless the ftc satisfies the probable cause standard required by the fourth
amendment for the issuance of a search warrant.
21) bob contracts to sell ben 20 bales of hay at $10 per bale. a bale is the accepted
commercial unit in hay transactions. ben accepts only 9 1/5 of the 20 bales. ben will
have to pay _____.
a.$100
b.$95
c.$150
d.$15
22) the model business corporation act (mbca) provides that the _____ right of a
shareholder does not exist except to the extent provided by the articles of incorporation.
a.preemptive
b.information
c.dissenters
d.liquidation
23) which of the following enters a property with the possessors consent but for his/her
own purpose?
a.licensee
b.trespasser
c.invitee
d.attendee
24) according to _____, most of the constitutions individual rights provisions block
only the actions of government bodies, and not private bodies, in cases of violation of
rights.
a.independent checks
b.due process
c.state action
d.federal supremacy
25) which of the following is true about an agencys informal power?
a.an agencys informal powers enjoy the full force and effect of law.
b.an agencys informal powers have the same legal force of formal agency regulations.
c.an agencys informal powers and its formal actions are subject to similar constraints.
d.an agencys informal powers play a major role in shaping the behavior of regulated
industries.
26) a contract that involves obligations on the part of manufacturers and distributors is
called a(n):
a.requirements contract.
b.composition agreement.
c.output contract.
d.exclusive dealing contract.
27) amanda and sally are close friends who form a limited partnership to open a salon.
they refuse to put a buyout clause for withdrawing partners in the limited partnership
agreement, assuming that their friendship and business will last forever. amanda, as a
general partner, contributes $100,000 and sally, as a limited partner, contributes
$125,000. two years later, sally accuses amanda of falsifying the data and withdraws
from the limited partnership. how much will sally receive from the limited partnership?
a.$125,000
b.$10,000
c.$100,000
d.$0
28) what is the general priority rule established by the code?
29) kenny, age 17 years, eleven months, buys a used car on credit. the contract also
includes a service agreement obligating the seller to perform certain maintenance on the
car for one year. kenny makes five monthly payments in the five months after he turns
18. in addition, he has the seller service the car on four separate occasions. after making
the fifth payment, kenny announces that he wants to disaffirm, i.e., return the car and
get back the full price. can kenny disaffirm?
30) what are the consequences of document alteration or destruction that interferes with
legitimate discovery requests?
31) what are the various ways through which a corporation can be dissolved?
32) ashley says to bob: i promise to pay you $20 if you will shovel my sidewalk. bob
begins to shovel, and soon he has completed 90% of the job. then ashley tells him:
thanks, but i revoke. bob then finishes the job in about ten minutes. can bob recover
against ashley in contract? why or why not? in any event, what other theory might bob
use? assume that an offer for a unilateral contract is accepted by full performance of the
requested act.