A subpoena to testify or to produce records:
a. is prohibited by the constitutional guarantee against unreasonable searches and
seizures.
b. is an illegal attempt to gain information by compulsion.
c. cannot be opposed on the grounds that such a request constitutes an unreasonable
search and seizure.
d. must be approved by corporate officers to be effective.
In determining whether a partnership exists, which of the following factors is not
evidence of a partnership?
a. Shared profits and losses
b. Co-ownership of property
c. Equal control of the business
d. All of these are evidence of partnership.
The rights of a holder of a warehouse receipt depend on whether the receipt is:
a. negotiable.
b. rescissory.
c. notarized as a document of title.
d. notarized as a bill of lading.
Misrepresentation:
a. is the same as fraud.
b. is a false statement of fact made with the intent to deceive.
c. is a false statement of fact made without any intent to deceive.
d. can be used as a limitation to excuse an accountant from liability.
A transferor makes certain implied warranties to the transferee when a bill of lading is
transferred. These warranties are:
a. that the bill of lading is genuine.
b. that the transfer is rightful.
c. that the transferor has no knowledge of any defects.
d. all of the above.
If a lease is assigned, who is liable for the rent?
a. the assignor
b. the assignee
c. either the assignor or the assignee, but not both
d. the landlord can collect from both the assignor and the assignee
If the insured lives to the end of the policy period of an endowment insurance policy,
the policy pays:
a. nothing.
b. one-half of the face amount of the policy.
c. the face amount of the policy.
d. double the face amount of the policy.
If there is a time limitation or any other restriction in a contract, a third-party
beneficiary:
a. may ignore it.
b. may void it.
c. is bound thereby.
d. must consent to be bound thereby before it is effective.
Which federal agency has primary responsibility for enforcing environmental laws?
a. the Environmental Protection Agency
b. the Council of Environmental Quality
c. the Superfund Panel
d. none of the above
The party that breaks a contract may be required to pay damages to the other party to
compensate for:
a. losses that could have been avoided by hiring someone else to perform the contract.
b. emotional disturbance caused by the breach of contract.
c. a heart attack induced by the emotional disturbance caused by the breach of contract.
d. damages resulting necessarily and directly from the breach of contract.
At an auction sale, each bid is:
a. a counteroffer to the auctioneer’s offer of the merchandise.
b. an acceptance of the auctioneer’s offer.
c. an invitation to negotiate.
d. an offer.
When a buyer has possession of goods after rightfully rejecting them, the buyer is
treated:
a. the same as a seller in the possession of goods after default by a buyer.
b. as being strictly liable for the safety of the goods.
c. the same as if an entrustment had been created.
d. as an insurer of the goods until the seller retakes possession.
A taker of an instrument who is a holder in due course at the time of the transfer but
who thereafter learns of a defense:
a. becomes a holder through a holder in due course.
b. becomes an ordinary holder.
c. remains a holder in due course.
d. becomes an assignee.
The type of patent that may be granted to developers of plant reproduction methods is
called a:
a. process patent.
b. functional or utility patent.
c. improvement patent.
d. plant patent.
A personal, revocable privilege to perform an act or series of acts upon the land of
another is called a(n):
a. easement.
b. tenement.
c. license.
d. lien.
Winona was a person of average intelligence, education, and experience in business.
She negotiated for the purchase of insurance and paid the premium. The policy was
mailed to her, but before it arrived a loss was suffered. When the policy was read,
Winona could not determine whether the loss was covered because the policy was too
difficult to understand. The loss is:
a. not covered unless expressly stated to be covered.
b. covered because the insurer had an obligation to word the policy in an
understandable way.
c. not covered unless stated to be so in a rider.
d. covered if included in an express exception to the policy.
A common carrier transporting goods under a COD shipment may:
a. make delivery without first obtaining payment.
b. not make delivery without first receiving payment.
c. accept a check as payment and have no liability.
d. not avoid liability without a signed release.
Sarbanes-Oxley would prohibit which of the following individuals from serving on an
audit committee of the company€s board?
a. a director who accepts consulting fees from the company
b. a director who is affiliated with the company
c. a director who is affiliated with a subsidiary of the company.
d. all of the above.
No law requires a seller to make an express warranty.
There is often a conflict between the goal of making money for shareholders and the
goal of solving social problems through business.
The subterranean lending market makes loans to consumers who have bankruptcies, no
credit history, low-to-moderate incomes, or a poor credit history.
When specifically bequeathed property is sold or given away by the testator prior to
death, the bequest is considered €redeemed.€
A failure by the settlor to name a trustee renders a trust invalid.
When it comes to the constitution, stability is more important than flexibility.
Due diligence usually consists of searching public records and inspecting the land.