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1) the principal of constructive eviction is applicable only to commercial property.
2) a corporation may not declare and distribute dividends unless it has excess solvency.
3) parol evidence can be used to resolve ambiguities in a completely integrated written
contract.
4) an exculpatory clause is a provision in a contract that purports to relieve one of the
parties from tort liability.
5) partners who wind up the business of a dissociated partnership have implied
authority to sell all the assets of the partnership.
6) the passage of the antitrust laws reflected a congressional assumption that
competition was most likely to exist in an oligopolistic industrial structure.
7) dick steals a computer belonging to tom from his house. then dick represents himself
as tom and sells the computer to lawrence. here, lawrence draws a check payable to tom
and delivers the check to tom. here, tom is called the impostor.
8) a policy which obligates the grantor for reimbursing to the grantee for loss, if the title
proves to be defective is called the policy of abstract title.
9) which of the following is bearer paper?
a.a check payable to the order of x and specially indorsed to y.
b.a check payable to the order of x and indorsed in blank by x.
c.a check payable to the order of cash and specially indorsed by the person who
received it.
d.a check payable to the order of cash to y.
10) implied ratification arises when:
a.the principals conduct justifies a reasonable assumption that he consents to the agents
act.
b.the principal manifests assent that his legal relations be affected.
c.the third party withdraws from the contract before the principal manifests assent.
d.the principal binds himself to an unauthorized or illegal act done by an agent.
11) brizon, a toy company enters into a five-year agreement with toys paradise (tp), a
toy shoppe. the agreement states that brizon is to provide all the toys required by the
distinguished shop at a fixed rate. during the first 3 years of the contract, brizon uses its
excess capacity to meet-up with the anticipated requirements and delivers between
1.25-1.5 million toys to tp. however, in the 4th year of the agreement tp wants brizon to
deliver approximately twice as many toys, so that the toys can be used at other outlets
owned by tp. in such a case:
a.brizon may be sued by tp if it does not comply.
b.brizon need not provide the required amount of toys.
c.brizon has to provide the required amount of toys by putting extra charges.
d.brizon can claim that the contract was always void.
12) homeowners les and linda wheiler live in missouri. working with magnanimous
insurance co. agent dell, the wheilers submitted an application for property insurance on
their home. at the time they submitted their application, the wheilers assumed that when
magnanimous issued them a policy, the policy would furnish coverage for losses
stemming from floods. magnanimous approved the wheilers application and issued
them a written policy covering their house. the written policys terms excluded coverage
for flood-related losses. three months after they received their policy from
magnanimous, the wheilers house sustained damage as a result of a flood. when the
wheilers submitted a claim to magnanimous, the insurance company denied the claim
because flood coverage was not provided by the policy. the wheilers have sued
magnanimous in an effort to obtain reformation of the written policy (so that it would
provide flood coverage). under which of the following alternative scenarios would the
wheilers stand the best chance of obtaining a court order of reformation?
a.if dell informed the wheilers, after the loss but before submission of their formal
claim to magnanimous, that the policy did not furnish flood coverage, but urged the
wheilers to submit their claim anyway.
b.if the wheilers assumption that the policy would furnish flood coverage stemmed
from the fact that floods have occurred every few years in the missouri area.
c.if, dell told the wheilers at the time of the application that the policy would furnish
flood coverage.
d.if, the wheilers did not read their policy after receiving it from magnanimous and
therefore first learned that their policy did not provide flood coverage when their claim
was denied by magnanimous.
13) samson dsouza submits a financing statement in the year 2000 to perfect his
security interest against kevin. later in the year 2006, samson tries to attach the security
interest in the property. will samson succeed in the attachment of the security interest?
a.samson will succeed since he has filed his financing statement.
b.samson will not succeed as the financing statement has lapsed.
c.samson may enforce his security interest by filing continuation statement.
d.the security interest will automatically be enforced.
14) in order to safeguard the debtor from reaffirmation agreements the court:
a.allows the debtor to rescind the reaffirmation agreement within a period of 60 days.
b.is empowered to declare all reaffirmation agreements as void.
c.may order the creditor to demand only 50 percent of the original debt amount.
d.may allow a reaffirmation agreement only if the debtor is represented by an attorney.
15) a party who makes a preincorporation contract with a corporate promoter is liable
on the preincorporation contract:
a.only after the corporations board of directors adopts the contract after the corporation
has come into existence.
b.only after the corporations articles have been filed with the secretary of state.
c.when the party agrees to look only to the prospective corporation for performance of
the contract.
d.only when the promoter is liable on the contract.
16) which of the following ethical theories judges our actions as good or bad depending
on their consequences and is expressed as the ends justify the means?
a.rights theory
b.utilitarianism
c.kantianism
d.deontological theory
17) ahmed hired shlomo to act as his sales agent in his jewelry store. ahmed authorized
shlomo actual express authority to sell items of jewelry up to $1,000 without checking
with him; however, if the price was over $1,000, shlomo was to check with ahmed
before making a sale. one day, a customer wanted to buy a necklace for $1,500 and
shlomo sold it to her without first checking with ahmed. when ahmed learned of this, he
was upset because the price was a mistake; it should have been marked at $3,000.
ahmed wants the customer to return the necklace. is the customer required to return the
necklace in this case?
a.yes, because shlomo did not have express authority to sell that item.
b.yes, because shlomo did not have implied authority to sell that item.
c.no, because shlomo did have apparent authority to sell that item.
d.no, because shlomo did have implied authority to sell that item.
18) with regard to an agreement for the sale of real estate, the statute of frauds:
a.does not require that the agreement be signed by all parties.
b.does not apply if the value of the real estate is less than $500.
c.requires that the entire agreement be in a single writing.
d.requires that the purchase price be equal to the value of the real estate.
19) which of the following decisions must be approved by all the partners of a
partnership business that provides accounting and auditing services?
a.buying paper supplies for the partnership.
b.making a contract to provide audit services.
c.borrowing money to repay a partnership debt.
d.hiring a secretary.
20) scrooges property contains a restrictive covenant that allows only residential use of
the land to his inheritors. over the years, all the adjoining areas of land have become
industrial areas. scrooges great-grandson, the present owner of his land, wants to set up
a small manufacturing unit there. will he be able to do so?
a.yes, since he is the present owner.
b.yes, because the circumstances have changed completely.
c.no, the restrictive covenant is completely binding.
d.no, there cannot be a waiver because scrooge is dead.
21) which of the following ends the right to rescind a voidable contract?
a.acquiescence
b.ratification
c.concealment
d.assertion
22) kaye piper buys 1,000 common shares of sullivan corp. in an offering of shares
made pursuant to a rule 506 exemption from the registration provisions of the securities
act. for this purchase, kaye relied on financial statements audited by armer & lander llp
(al), a cpa firm. the statements materially overstated sullivans inventory and earnings
because als staff auditors counted inventory boxes and still did not confirm whether any
of the boxes have inventory in them. thirty percent of those boxes were empty. does al
have potential liability to kaye under section 10(b) and rule 10b-5 of the securities
exchange act of 1934 or section 12(a)(2) of the securities act of 1933?
23) which of the following is a similarity between title vii and the employment
discrimination provision known as section 1981?
a.both title vii and section 1981 apply to sex discrimination.
b.both title vii and section 1981 apply to racial discrimination.
c.both title vii and section 1981 impose limits on covered employees.
d.both title vii and section 1981 impose limits on compensatory damages.
24) what are the three options available to a secured creditor regarding the collateral if
the debtor defaults?
25) gail offers to sell belinda 1000 boxes of nails, but forgets to state the price. all other
material terms are present, however. belinda accepts, but later wants to back out of the
deal, arguing that the offer is indefinite. is there a contract here? why or why not?
assume that at the time of the deal the parties intended to make a contract. assume also
that there was an established market price for the nails in question here.
26) owen once owed carl a $1,000 debt, but the statute of limitations ran on that
obligation, discharging owen. later, owen promises in writing to pay carl the debt. why
is there no consideration for this promise? why is it binding anyway? what additional
requirement do some states impose to make the promise binding?
27) ace appliances, an appliance store, orders 100 toasters from consolidated electric
(ce). the toasters ce ships to ace, however, are not the ones ace ordered. hence, ace
rejects them. ce then insists that ace return them, at the expense of ace. can ce make ace
return the toasters? if so, who pays the cost of returning the toasters?
28) after a student named bob insults him in class, marvin, a business law professor,
pulls out his. 38-revolver and fires a shot at the student. the shot misses the first student,
but strikes another student named cathy, who never saw the shot coming and never
knew what hit her. bob and cathy sue marvin for assault and battery. who can recover
for what? why?
