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1) straight voting permits a single holder of more than 30 percent of the shares of a
corporation to dominate the management of the corporation.
2) in order for an artisans lien to be valid, the lien holder normally must have
possession of the property.
3) generally in business liability policies, if the insured is liable on respondeat superior
grounds, then he will be covered by the policy.
4) courts have become increasingly inclined, in recent years, to hold that owners of
commercial property owe persons lawfully on the property a duty to take reasonable
steps to protect them against the foreseeable criminal acts of third parties.
5) in 1990, revised article 3 of the ucc was developed, which now has been adopted by
all the states.
6) concealment involves the active hiding of a fact, while nondisclosure is the failure to
volunteer information.
7) a department store sells a tv set to wilson, who pays with a bad check. wilson
immediately sells the tv to davis for $500. davis knew nothing about how wilson
acquired the tv from the store. davis has good title to the tv and will prevail against the
store if it sues davis for the tv or its value.
8) the statute of frauds covers all contracts that are for an indefinite period of time.
9) under the clean air act, the federal government is required to develop a state
implementation plan for meeting national ambient air quality standards in every state.
10) the offeror is said to be the master of the offer. this means that offerors have the
power to determine the terms and conditions under which they are bound to a contract.
11) generally, professional shareholders are personally liable for the obligations of the
professional corporation.
12) theories that focus only on actions or decisions are called deontological ethical
theories.
13) although not required, a partnership agreement is highly desirable for the same
reasons that written contracts are generally preferred.
14) generally, the terms of a standardized contract are negotiable.
15) the damages recoverable by an insured for the insurers breach of the insurance
contract cannot exceed the dollar limits set forth in the insurance contract.
16) a(n) _____ is a right to enter another persons land and remove some product or part
of the land
a.profit
b.estate
c.easement
d.covenant
17) ala foreign corporation is incorporated in the state of alabama. however, it is
running 90 percent of its operations from the state of indiana. such a type of corporation
is called a(n):
a.government-owned corporation.
b.foreign corporation.
c.alien corporation.
d.pseudo-foreign corporation.
18) for which of the following is the filing of a financing statement necessary for
perfection to occur?
a.a security interest in documents of title.
b.a security interest in chattel paper.
c.a security interest in consumer goods.
d.a security interest in general intangibles.
19) which of the following is true about shareholder proposals and eligibility of
shareholders to get their proposals included by a corporation in its proxy statement?
a.a shareholder must own at least 0.5 percent of the securities to be voted at the
shareholders meeting.
b.an eligible shareholder may submit only one proposal per shareholder meeting.
c.the shareholder proposal and its supporting statement may not exceed 1500 words.
d.a shareholder must own at least $1,000 of the securities to be voted at the
shareholders meeting.
20) ron was employed by mass co in 1970. at that time, he was given an employee
handbook that described the particular steps that had to be taken before an employee
could be fired. later on, in 2000, mass published a new handbook by which all workers
status were changed to employment-at-will workers. mass then fired ron. ron claimed
he was terminated without cause and was not afforded procedures described in the 1970
handbook, such as an appeal or review of the decision. he sued mass under breach of
contract based upon the 1970 employee handbook. will he succeed?
a.yes, because the modifications in 2000 were not by mutual consent and for
consideration.
b.no, because the employee handbook contains terms and conditions of the employment
contract.
c.yes, because mass co. has arbitrarily terminated ron.
d.no, because ron had acquiesced to the modification by not raising any objection.
21) which of the following is a nonwrongful kind of member dissociation from an llc?
a.dissociation caused by a member being a debtor in a bankruptcy.
b.dissociation caused by a members death due to a motor vehicle accident.
c.dissociation caused by the judicial expulsion of a member.
d.dissociation caused by a member withdrawing from an llc before the llcs term has
expired.
22) termination of a partnership occurs automatically after:
a.wrongful dissociation has occurred.
b.dissolution has occurred.
c.the assets of the partnership have been distributed.
d.the winding up process has begun.
23) tanya, a tenant gave lou, her landlord a $1,000 security deposit when she moved in.
when she moved out four years later, lou withheld $500 from tanyas deposit because the
carpet was 50% worn out. this was the only damage in the apartment. the carpet has a
normal useful life of eight years, and it costs $1,000. how much of the security deposit
was lou entitled to withhold?
a.$500, because wear and tear is the responsibility of the tenant.
b.nothing; tanya should replace the carpet before moving out.
c.nothing, because the wear and tear here was ordinary and reasonable.
d.the entire value of the carpet, i.e., $1000.
24) jack had taken his girlfriend jenny on a long drive. while driving on the highway, he
suddenly had a severe headache and lost control of the car. they were hit by a passing
car. the doctor had earlier warned jack that he has a brain tumor, due to which he would
experience occasional pains. jenny sued jack for negligence. will she succeed?
a.yes, because jack could reasonably foresee severe pain which might to lead to
accidents.
b.no, because jack did not intend to cause an accident.
c.yes, because jack caused the accident.
d.no, because she should have sued the driver of the passing car which hit them.
25) wonder widget company manufactures widgets that are sold to there tailers. the
retailers, in turn, sell these widgets to consumers for their own use. these widgets are:
a.inventory in the hands of wonder.
b.equipment in the hands of the consumers.
c.equipment in the hands of the retailers.
d.consumer goods in the hands of wonder.
26) the foreign sovereign immunities act (fsia) provides that all commercial activities of
foreign sovereigns and their agents are exempt from antitrust liability.
27) several states constitutions place stricter limits than the mbca on permissible
considerations for issuance of common shares by corporations. which of the following
considerations is permissible under the mbca but not permissible by such state
constitutions?
a.a promoters preincorporation services worth $25,000, which were performed prior to
incorporation.
b.a gratuitous promise to contribute $35,000 in cash to the corporation.
c.bonds of another corporation, which are worth $15,000.
d.the presidents actual performance of services for the corporation, which are worth
$50,000.
28) larry works for shannon as a salesperson. shannon gave larry a credit card with
larrys name on it so that larry could charge necessary business expenses to shannons
business account. larry charged $1,000 in personal expenses, wholly unrelated to larrys
employment. does apparent authority exist? discuss.
29) describe the different approaches taken to transnational insolvencies. what is the
approach taken currently?
30) why is an offerees silence regarding a contract not considered to be an acceptance
of it?
31) atria corporation wishes to dissolve. how can it do so?
32) kirrah company makes a registered offering of its common shares under the
securities act of 1933. a year after the offering, the federal government cancels a
contract with kirrah in compliance with the contract. the contract had provided and was
expected to continue to provide 30 percent of kirrahs business. the material risks section
of the registration statement failed to state that the federal government provided 30
percent of kirrahs business and that the federal government had the right to terminate
the contract at any time. among others, amy arston, the president and chief executive
officer of kirrah, is sued by purchasers of the shares under section 11 of the securities
act. what is amys due diligence defense under section 11? is amy likely to be able to
prove she met that defense?
33) list a few scenarios under which sellers may be excused from performing
contractual obligations.
34) the ace corporation is involuntarily petitioned into a chapter 7 bankruptcy on march
1, 1994. on january 10, 1994, ace paid the highstate gas company its $1700 utility bill
for natural gas supplied during december of 1993. is this payment preferential? why or
why not?
35) paul, an easy state university physics major, rented an apartment from jayvee villas,
inc. for one year, beginning september 1, 1999. the lease contained a term giving paul
the right to renew his lease for an additional year, at a rent increase of $25 per month by
giving notice to the landlord of his intent to renew at least 30 days before the
termination of the lease. after the fall semester, paul had an opportunity to study in
spain, so he assigned his lease to joel for the remainder of the months covered by the
lease (january through august 2000). if joel failed to pay the rent for the month of
august 2000, is paul liable for the unpaid rent? why or why not? assuming now that joel
is not in arrears on the rent as of july and august 2000, would he (joel) have the right to
renew the lease under its renewal term? discuss.
