1) short-term certificated options that are usually transferable are referred to as:
a.options.
b.warrants.
c.bonds.
d.rights.
2) what does the term grumbling acceptance mean?
a.accepting the offer by maintaining one silence
b.making material changes to a contract when accepting it
c.inquiring about the terms of the offer without rejecting it
d.accepting an offer while complaining about the terms
3) the _____ gives the federal government and the states the authority to regulate
facilities that generate, treat, store, and dispose of hazardous waste.
a.marine protection, research, and sanctuaries act
b.resource conservation and recovery act
c.oil pollution prevention, response, liability and compensation act
d.toxic substances control act
4) _____ is a process which begins with the buyer giving the seller a check, and the
seller using the information on that check to name itself as the payee and forwarding it
for collection through an automated clearing house.
a.source documentation
b.check conversion
c.account aggregation
d.check truncation
5) a dissenting shareholder seeking payment of the fair value of his/her shares
(dissenters rights) must have the right to vote on the action to which he/she objects. in
which of the following cases does a shareholder have dissenters rights despite his/her
lack of voting power?
a.short-form mergers
b.significant amendments of the articles of incorporation
c.share exchanges
d.sales of all the assets
6) which of the following is a real defense that is good against a holder in due course of
a note?
a.the maker of the note is 15 years old.
b.the note was procured by the payees threat to prosecute the maker for drug dealing.
c.no consideration was given for the note.
d.the maker was in a seriously delusional state when he completed the note (but had not
been declared insane or institutionalized).
7) a contract in which one or more of the parties have the legal right to cancel their
obligations under the contract is called a(n):
a.void contract.
b.valid contract.
c.voidable contract.
d.unenforceable contract.
8) which of the following are automatically covered as of the time the security interest
attaches to the collateral?
a.future advances
b.loaned funds
c.sale expenses
d.proceeds
9) rice is a promoter of a corporation to be known as dex corp. on january 1, 1985, rice
signed a nine-month contract with roe, a cpa, which provided that roe would perform
certain accounting services for dex. rice did not disclose to roe that dex had not been
formed. prior to the incorporation of dex on february 1, 1985, roe rendered accounting
services pursuant to the contract. after rendering accounting services for an additional
period of six months pursuant to the contract, roe was discharged without cause by the
board of directors of dex. in the absence of any agreements to the contrary, who will be
liable to roe for breach of contract?
a.both rice and dex
b.rice only
c.dex only
d.neither rice nor dex
10) the process by which a principal binds himself to an unauthorized act done by an
agent, or by a person purporting to act as an agent, is called ______.
a.indemnification
b.notification
c.liability
d.ratification
11) which of the following personal traits or conditions will not change the normal
reasonable person standard to which defendants are subject?
a.blindness.
b.deafness.
c.voluntary intoxication.
d.childhood.
12) henry and barbara were sharing a cool-ayd cold drink, and were alarmed to find
what seemed to be a plastic object floating inside the drink. distressed and nauseated,
they rushed to the hospital to undergo tests. on their doctors suggestion, they also
underwent several tests. in the meantime, in an action for torts, cool-ayd analysts
proved that the object found in the bottle was indeed a sugar mould. under the given
circumstances, will henry and barbara get relief for emotional distress in an action for
tort, when no damage has occurred?
a.no. since torts remedy accrues to parties as per the impact rule which states that tort
remedy flows from injuries sustained in an impact. there was no injury in this case.
b.no. they should have checked the cold drink before consuming it; the company is
hence, not liable.
c.yes. damages for emotional distress should be recoverable even in the absence of a
physical injury-producing impact.
d.yes. the company is liable to its consumers because the impact rule does not apply in
such a case.
13) under the model business corporation act (mbca), a prospective shareholder may not
revoke a preincorporation subscription for a(n) _____ period, in the absence of a
contrary provision in the subscription.
a.nine-month
b.one-year
c.two-year
d.six-month
14) in order to satisfy the statute of frauds, the parties writing must be:
a.signed by both parties.
b.in legalese.
c.signed by the party to be charged.
d.compressed into a single document.
15) which of the following is a ground for avoidance of contract based on a unilateral
mistake?
a.both parties are mistaken about a fact.
b.nonmistaken party caused the mistake.
c.the mistaken party had reason to know of the mistake.
d.person affected by the mistake does not bear the risk for it.
16) in which of the following situations has the holder of a negotiable instrument not
given value for it?
a.where the holder takes the instrument as security for an antecedent claim.
b.where the holder gives a negotiable instrument in return for the one received.
c.where the holder receives the instrument as a gift.
d.where the holder acquires a security interest in the instrument.
17) in a lawsuit for intentional interference with contractual relations, the existing
contract includes:
a.void bargains
b.illegal contracts
c.contracts to marry
d.unenforceable contracts