Which of the following debts would be discharged in bankruptcy?
a. Consumer credit loans for a stove.
b. Property taxes on a beach house.
c. Student loans maturing one-year prior to bankruptcy filing.
d. Alimony payments past due.
Which of the following determines when to declare dividends and in what amount?
a. The stockholders.
b. The officers of the corporation.
c. The board of directors.
d. The state in which the corporation was chartered.
Which of the following is an exception to the suretyship provision requirement under
the statute of frauds?
a. A collateral promise made to the creditor.
b. A promise, the leading object of which is to obtain an economic benefit for oneself.
c. A collateral promise where there are three parties and two contracts involved.
d. A promise by an executor to pay the debts of the decedent from the executor’s own
funds.
Which of the following is enforceable without consideration?
a. A new promise to pay a debt barred by the statute of limitations.
b. An illusory promise.
c. A promise to supply all of the materials a manufacturer will need for the production
of a certain item for a specified period of time.
d. In the majority of states, a promise by a father to pay someone who rendered
emergency services to his injured son before the father had arrived at the accident
scene.
Which of the following need NOT be proved in order to establish the defense of
economic duress?
a. That one side involuntarily accepted the terms of another.
b. That circumstances permitted no other alternative.
c. That one party explicitly made the economic threat.
d. That the circumstances leading up to the contract were the result of coercive acts of
the opposite party.
A bill of lading serves as:
a. a receipt for damages.
b. evidence that a binder exists.
c. a document of title.
d. a contract for employment.
Section 16(b) of the 1934 Act differs from Rule 10b-5 in that the latter:
a. applies to transfers within 6 months of each other.
b. only applies to officers, directors, and 10 percent shareholders.
c. requires material inside information.
d. All of the above.
a. What are the two types of duress and what is the effect of each on the contract
involved?
b. Give an example of each type of duress.
c. Who does the law intend to protect by reason of the defense of duress? Why does the
law protect this type of person?
The Government in the Sunshine Act covers all but which of the following agencies?
a. Consumer Product Safety Commission.
b. Commodity Futures Trading Commission.
c. Environmental Protection Agency.
d. Securities and Exchange Commission.
Which of the following defenses may be raised by an accountant under Section 11 of
the 1933 Securities Act?
a. Privity and due diligence.
b. Privity, but not due diligence.
c. Due diligence, but not privity.
d. Neither privity nor due diligence.
A partner has implied authority to:
a. hire and fire employees necessary for operation of the business.
b. purchase property necessary for the business.
c. receive performance of obligations due the partnership.
d. All of the above.
The federal Truth-in-Lending Act:
a. requires the lender to show how much profit is made on a particular sale.
b. regulates the maximum cost of credit.
c. is a uniform law made available to all states, like the UCC.
d. is intended to allow comparison of various credit offers or advertisements.
A and B are discussing contract law. A tells B, “The law generally restricts the time
within which an action can be brought by either party to a contract.” A’s statement is:
a. false.
b. true because of statutes of limitations.
c. true because of the law of repudiation.
d. true because of covenants not to sue.
Which of the following is a true statement concerning the accountant-client privilege?
a. If information is considered to be an accountant-client privilege, it may not be
admitted into evidence over the objection of the accountant only.
b. Neither the common law nor federal law recognizes the accountant-client privilege.
c. Some states have adopted statutes grating some form of the accountant-client
privilege.
d. Both (b) and (c).
What does the UCC say with regard to the following?
a. Good faith
b. Unconscionability
c. Expansion of commercial practices
The case of Harris v. Looney dealt with the issue of:
a. a de facto corporation.
b. defective incorporation.
c. personal liability for a debt by a person purporting to act as or on behalf of a
corporation, knowing no corporation existed.
d. the effect of an ultra vires act.
Which of the following is generally NOT a defense to a claim against a manufacturer
under 402A?
a. Contributory negligence on the part of the plaintiff.
b. Voluntary assumption of the risk.
c. Misuse or abuse of the product.
d. Subsequent alteration of the product by the plaintiff.
Match each statement with the correct term below.
a. The right in personal property that secures payment or performance of an obligation.
b. Relief from liability for all debts except those specified in the Bankruptcy Code.
c. A document filed to provide notice of a security interest.
d. Property subject to a security interest.
e. Tangible or electronic record that evidences both a debt and a security interest in
specific goods.
f. Creation of a security interest that is enforceable against a debtor.
g. Delivery of personal property to a creditor as security for payment of a debt.
h. An agreement between the debtor and creditor creating a right in personal property
that secures payment or performance.
i. Movable things bought or used primarily for personal, family, or household purposes.
j. Creditor’s remedy involving a statutory proceeding directed at a third person who
owes a debt to or has property of a debtor.
k. A surety liable to a creditor immediately upon the default of a principal debtor.
l. Creation of a security interest enforceable against most third parties.
m. The right of a surety to be relieved of his obligation to the creditor by having the
principal debtor perform the obligation.
n. A surety’s right to assume the creditor’s rights.
o. A person who promises to answer for the payment of a debt or the performance of a
duty owed to the creditor by the principal debtor upon the principal debtor’s failure to
perform.
p. A way to begin a bankruptcy case that is available to any debtor even if solvent.
q. May be filed by creditors only under Chapter 7 or 11.
r. The person responsible for collecting, liquidating, and distributing the debtor’s estate.
s. Surety liable to a creditor only after creditor has exhausted legal remedies against the
principal debtor.
t. Any entity that has a claim against the debtor.
u. A claim with a lien on property of a debtor; a claim tied to specific property of the
debtor.
v. Certain preferential transfers made by the debtor to favored creditors before the date
of bankruptcy and invalidated by the Bankruptcy Code.
w. An agreement between the debtor and two or more of her creditors that each will
take a portion of his claim as full payment.
x. Prevents attempts by creditors to recover claims against the debtor.
y. A voluntary transfer by the debtor of some or all of his property to a trustee, who
applies the property to the payment of all of the debtor’s debts.
1) security agreement
2) exoneration
3) attachment
4) perfection
5) automatic stay
6) discharge
7) involuntary petition
8) composition
9) pledge
10) financing statement
11) absolute surety
12) trustee
13) assignment for benefit of creditors
14) secured claim
15) voidable preference
16) conditional guarantor of collection
17) collateral
18) security interest
19) consumer goods
20) subrogation
21) creditor
22) voluntary petition
23) surety
24) garnishment
25) chattel paper
A mark distinctive enough to clearly identify the origin of the goods or services can be
protected under:
a. the Federal Copyright Act.
b. the Lanham Act.
c. the Berne Convention.
d. compulsory licenses.
Mary cleaned her dorm room in the spring and left a pile of books in Sara’s room. Mary
told everybody that the books were a gift to Sara. Does Sara have to dispose of them?
a. Yes, because there was a present intent and delivery.
b. Yes, because they are constructively in Sara’s possession.
c. No, because Sara did not accept the books.
d. No, because there was no agreement between the two parties.
In Berg v. Traylor, the court stated that:
a. Craig was not entitled to disaffirm the agreement in question.
b. while no specific language is required to communicate an intent to disaffirm, express
notice to the other party is necessary.
c. disaffirmance of an agreement by a minor does not operate to terminate the
contractual obligations of the parent who signed the agreement.
d. None of the above.
Cheryl, age 16, ordered a new dress to wear to the school prom. She has contracted to
pay $500 when the dress arrives. Before the dress arrives, Cheryl decides that the dress
is too expensive, and she now wishes to cancel the order. Cheryl:
a. must pay $500 for the dress because the dress was specially ordered for Cheryl.
b. must pay $500 for the dress because clothing is classified as a necessary.
c. may disaffirm this executory contract because, while clothing in general is classified
as a necessary, a new prom formal would probably not be classified as a necessary.
d. must accept the dress and pay the reasonable value of the dress.
Any partner, in a limited partnership, to whom any part of her contribution has been
returned:
a. without violation of the partnership agreement or statute is not liable to the
partnership to the extent necessary to pay creditors who extended credit during the time
the partnership held the contribution.
b. in violation of the partnership agreement or statute is liable to the partnership for no
more than one year for the amount wrongfully returned.
c. in violation of the partnership agreement or statute is liable to the partnership for six
years for the amount wrongfully returned.
d. in violation of the partnership agreement or statute has liability for an unlimited time
period for the amount wrongfully received.
The failure by an accountant to use the care of a reasonably competent accountant is:
a. negligence.
b. material breach.
c. substantial performance.
d. fraud.
Edwina wrote an original novel entitled “Good Thunder on the Prairie” and registered a
copyright on her work. A producer read the book and thought it would make an
excellent made-for-television movie, so without consulting Edwina, he developed a
script based upon the novel and produced it as “Thunder Storm on the Prairie.” What, if
any, recourse does Edwina have under the circumstances?
Judicial review is another phrase for an appeal of a lower court’s judgment.
The UCC statute of frauds requires that the writing include all agreed-upon terms.
A possessor of land has a legal duty to warn business invitees of obvious dangers that
invitees should be able to discover themselves.
A voidable title is no title.
Congress appoints and removes the chief administrators of federal executive
administrative agencies.
A minor can ratify part of a contract and disaffirm another part of it.