1) books are us (bu), a bookstore, is being sued for defamation after it sold a book
containing false, defamatory statements about the plaintiff. what is bus best defense to
this lawsuit?
a.bu is not the publisher of the book.
b.bu did not intend to harm the plaintiff.
c.bu had no knowledge of the contents of the book.
d.bu did not violate any criminal law or regulation in selling the book.
2) ingmar wanted to buy ottos land. otto did not want to sell. in order to pressure otto
into selling the land, ingmar brought a private nuisance lawsuit against otto. in this case,
ingmar has probably committed the tort of:
a.abuse of process.
b.malicious prosecution.
c.defamation.
d.deceit.
3) a trust that is established in a persons will and that takes effect only upon that
persons death is called a(n):
a.inter vivos trust.
b.spendthrift trust.
c.totten trust.
d.testamentary trust.
4) which of the following is true of a revocation?
a.the power of revocation of an offer lies with the offeree.
b.death or insanity cannot be reasons for revocation.
c.promissory estoppels are used to prevent revocations.
d.offers that fail to state a specified time period are considered invalid.
5) shares permitted to be issued by a corporation are called:
a.preferred shares.
b.issued shares.
c.authorized shares.
d.outstanding shares.
6) national bank is reluctant to lend money to james and takes a note from him because
of his shaky financial condition. however, the bank is willing to lend money to james if
he signs the note and a friend also signs the note. here the friend serves as the:
a.deponent.
b.accommodation party.
c.fiduciary.
d.non-joinder.
7) according to the model nonprofit corporation act (mnca), what is the minimum
number of members that a nonprofit corporation is required to have?
a.50
b.1
c.10
d.0
8) a partnerships liability for the torts of a partner committed within the ordinary course
of partnership business or within the authority of that partner is:
a.joint and several.
b.joint or several, at the option of the tort creditor.
c.joint only.
d.several only.
9) which of the following is most true regarding checks whose amount has been
altered?
a.the bank may not pay such checks as altered in all cases.
b.the bank may pay such checks as altered where the alteration is due to the customers
negligence and the alteration is not obvious.
c.the bank must pay such checks as originally drawn.
d.the bank cannot ever pay such checks.
10) in the case of _____, after the foreclosure, the proceeds of the sale are applied to the
payment of the mortgage debt, and any surplus is paid over to the mortgagor.
a.strict foreclosure
b.foreclosure by action and sale
c.accommodative foreclosure
d.foreclosure by redemption
11) morton reeves, a building subcontractor, submitted a bid for construction of a
portion of a high-rise office building. the bid contained material errors in computation.
lago corp., the general contractor, accepted the bid with the knowledge of reeves errors.
reeves:
a.must perform the contract unless he can show that lago acted fraudulently.
b.must perform the contract according to the stated terms since his errors were
unilateral.
c.can avoid liability on the contract only if his errors were not due to his negligence.
d.can avoid liability on the contract since lago knew of his errors.
12) huge, inc. owns an east coast grocery chain. it has recently acquired a west coast
grocery chain. this is an example of a:
a.product extension merger.
b.horizontal merger.
c.market extension merger.
d.vertical merger.
13) which of the following is a negotiable instrument?
a.i owe you $100.
b.i promise to repay the loan of $3,000 only if i succeed in my business.
c.i promise to pay you the sum of $300 in the next week.
d.please pay the bearer the amount of $500.
14) homers negligence caused an automobile accident with bart. as a result of the
collision, barts car collides with a telephone pole, causing it to fall. the falling pole then
takes out some electrical power lines. the resulting power outage leaves patty without
any light in her apartment. as she fumbles in the darkness, she trips over her cat, falls,
and is injured. patty sues homer. in order to avoid liability, homers best defense is that:
a.there is no actual cause between the negligence and the injury.
b.there is no proximate cause between the breach of duty and the injury.
c.barts car was the one that collided with the telephone pole.
d.the electrical power lines should not have fallen under the force of a car.
15) which of the following tasks can an agent perform on behalf of a principal?
a.signing a will
b.making statements under oath
c.voting in public elections
d.making a contract
16) which of the following is true of the drawer-drawee relationship?
a.the drawer becomes the creditor when the drawee bank pays more than the drawer has
on deposit.
b.the drawer becomes a debtor and the drawee bank the creditor at the time of opening a
checking account.
c.the drawer becomes the insured and the drawee bank the insurer at the time of
opening a checking account.
d.the drawer becomes the creditor and the drawee bank the debtor at the time of
opening an account.