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1) sharon entered into a preincorporation share subscription agreement on january 1,
2006. the corporation was formed on february 1, 2006. what is the status of this
agreement on march 1, 2006, under the model business corporation act?
a.it is binding only if sharon has already paid for the shares.
b.it is binding even if sharon has not already paid for the shares.
c.it is not binding because the corporation did not exist on january 1, 2006.
d.it is not binding unless sharon ratifies the agreement after the corporation has been
formed.
2) the extent of a persons insurable interest in property is limited:
a.to the value of that interest.
b.to the market value of the property.
c.to the maximum value of the property.
d.to the reasonable value of the property.
3) to avoid winding up:
a.a unanimous vote of all partners, who have not wrongfully dissociated, is necessary to
continue business.
b.two-thirds majority of partners wanting to continue business is necessary.
c.the court has to pass judgment to continue business.
d.the remaining partners must file a continuing statement with the public office.
4) which of the following is an accurate statement about liability insurance policies?
a.they cover bodily injury or property damage that result from the insureds business or
professional pursuits.
b.they typically provide the insured with coverage for punitive damages liability he may
face.
c.they typically do not provide the insured with coverage for the consequences
stemming from his negligent acts.
d.they may be used by the insured as a way of transferring risks associated with certain
tort liability he may face.
5) which of the following is authorized to conduct periodic inspections of nonprivate
company auditors in order to assess whether they are complying with the requirements
of the sarbanes-oxley act?
a.the public company accounting oversight board
b.the securities exchange commission
c.the federal trade commission
d.the internal revenue service
6) earl leased an apartment from kent. under the terms of the lease, earl would remain a
tenant for eight months and the tenancy would expire on december 8th. this is an
example of:
a.a tenancy for years.
b.a month-to-month tenancy.
c.a tenancy at will.
d.a tenancy at sufferance.
7) which of the following is not an essential characteristic of a limited liability company
(llc)?
a.the llc can elect to be taxed as a partnership or a corporation.
b.members ownership interest is completely and freely transferable.
c.members have limited liability for the obligations of the llc.
d.the bankruptcy of one member does not dissolve the llc.
8) when can the offeror effectively revoke his/her offer?
a.only after an effective acceptance.
b.only before an effective acceptance.
c.only before payment for goods or services has been made.
d.only before the parties have completed their obligations under the contract.
9) robert cosigns a note for his friend amelia, which she has given to credit union to
secure a loan. suppose the note was originally for $5,000 and payable in 12 months with
interest at 10 percent a year. credit union and amelia later agree that kato will have 24
months to repay the note but that the interest will be 13 percent per year. robert is not
aware of this change of terms. in the event of amelia defaulting on the loan, will robert
have to repay the debt?
a.robert will have to pay the debt because he is the surety.
b.robert will not have to pay the debt because he has not received any compensation
from amelia for being a surety.
c.robert will have to pay the debt because he is the guarantor.
d.robert will not have to pay the debt because he has not accepted the changed terms of
the loan.
10) what is the test frequently used to determine hybrid contracts?
a.determining the value of the contract.
b.determining the party to benefit.
c.determine which element predominates.
d.determining the validity of the contract.
11) if all or part of the price of goods is payable in real property, then:
a.only the transfer of goods is covered by the law of sales of goods.
b.both the transfer of goods and the real property is covered by the law of real property.
c.both the transfer of goods and the real property is covered by the law of sales of
goods.
d.only the transfer of the real property is covered by the law of real property.
12) ivor, queen, and lear own a building as joint tenants with the right of survivorship.
ivor donated his interest in the building to day charity by executing and delivering a
deed to day. both queen and lear refused to consent to ivors transfer to day.
subsequently, both lear and queen died. after their deaths, days interest in the building
consisted of:
a.total ownership due to the deaths of queen and lear.
b.no interest because queen and lear refused to consent to the transfer.
c.a 1/3 interest as a joint tenant.
d.a 1/3 interest as a tenant in common.
13) under the default rules of the ulpa, a limited partner who wishes to withdraw from a
limited partnership has:
a.the power but not the right to withdraw.
b.the right but not the power to withdraw.
c.neither the power nor the right to withdraw.
d.both the power and the right to withdraw.
14) mike authorizes his agent, ben to borrow a sum of $10,000 on his behalf from the
national bank. ben signs his name to a note without disclosing that the signature was on
behalf of mike. who is liable on the note?
a.only mike is liable.
b.national bank is liable.
c.both of them are liable.
d.only ben is liable.
15) goods lawfully bearing trademarks or using patents and copyrighted material but
entering the american markets without authorization are called _____.
a.counterfeit goods
b.shanzai goods
c.black market goods
d.gray market goods
16) if a buyer and seller of goods fail to specify in their contract when title is to pass,
the ucc's "gap filler" provision provides that title will pass when:
a.the goods are sent to the buyer's home.
b.the contract is formed.
c.the seller completes obligation with respect to physical delivery of the goods.
d.the buyer pays the purchase price.
17) ann is troubled with the noise of the old generator set up by her neighbor jose at his
residence. the noise the generator makes is unbearable. ann sues jose for nuisance. will
she succeed?
a.no, because it is reasonable noise.
b.no, because generator is not her personal property.
c.no, because she cannot interfere with joses personal matters.
d.yes, because the noise is interfering with plaintiffs use and enjoyment of land.
