The duties of a trustee are:
a. to carry out the purposes of the trust.
b. to act with prudence and care in the administration of the trust.
c. to exercise a high degree of loyalty toward the beneficiary.
d. All of the above.
a. Under the Code, when can an injured party seek the remedy of specific performance?
b. How does this rule differ from the common law?
c. Compare the remedies of replevin and specific performance. How are they alike?
How are they different?
Regarding trademark protection:
a. federal registration is required to establish rights in a mark.
b. an owner may abandon the mark through non-use and lose protection.
c. the owner will be presumed to have abandoned the mark after two years of non-use.
d. All of the above.
Unless otherwise agreed, authority to manage a business would include authority to do
all but which one of the following?
a. Make repairs to the broken front door.
b. Hire employees to help run the shop.
c. Open a new branch office.
d. Receive money due to the business.
Dr. Olson is a board-certified ophthalmologist who constructs some specially designed
examining tables to use in looking at his patient’s eyes. The tables are firmly attached to
the floor of the space he rents for his office. If Dr. Olson decides to move his office,
which of the following is correct?
a. The tables are fixtures that cannot be removed.
b. The tables are trade fixtures.
c. Dr. Olson may remove the tables if they can be removed without materially
damaging the realty.
d. Both (b) and (c).
A transaction whereby the tenant transfers away her entire interest under a lease is
called a(n):
a. sublease.
b. assignment.
c. eviction.
d. abandonment.
The National Cooperative Research Act:
a. prohibits using the rule of reason test in judging joint ventures in research and
development of new technology.
b. is designed to clear up uncertainty about the legality of joint ventures.
c. now requires treble damages if joint ventures are formed in violation of Section 1 of
the Sherman Act.
d. All of the above.
Two boys held up a liquor store at gunpoint and ran off with a bag of money. The police
saw them run into Jill’s apartment building where there are only four apartments off a
common hall and no apparent way out of the building but the front door. The police
knock on Jill’s door. She says she’s the only one there. The police can:
a. search the apartment without a warrant because Jill voluntarily answered the door.
b. search the apartment without a warrant because they are in hot pursuit of the thieves.
c. not search the apartment, because they have no reason to believe that the boys are in
Jill’s apartment rather than the others.
d. not search the apartment because voluntary consent to enter is necessary.
An “antidumping” statute:
a. is applied to both foreign companies and domestic companies which charge a higher
price for products sold in the U.S. than the price charged abroad.
b. has been declared invalid because of the inherent discrimination against foreign
corporations.
c. is administered by the FTC.
d. makes illegal the sale of exported goods from one country to another country at less
than normal value.
A distribution may be in the form of:
a. declaration of a dividend.
b. a purchase, redemption, or other acquisition of shares.
c. a distribution of indebtedness.
d. All of the above.
The remedies for infringement under the Patent Act are:
a. treble damages, when appropriate.
b. fines, in cases of knowing infringement.
c. imprisonment, in cases of knowing infringement.
d. All of the above.
The UCC states that an instrument fulfills the requirements of being payable to bearer if
it:
a. states it is payable to bearer or the order of bearer.
b. does not state a payee.
c. states it is payable to “cash” or to the order of “cash.”
d. All of the above.
Garaty, Inc. is currently engaged in negotiations with one of its major unions. The
company is covered by the NLRA. If Garaty issues a factually correct statement
regarding its financial status along with the opinion of its auditors that meeting the
union demands would require the company to close down, it is likely that Garaty will
be in compliance with the act.
Conglomerate mergers have been challenged only when:
a. one of the merging firms would be highly likely to enter the other firm’s market.
b. the merged company would be disproportionately large, compared with the smallest
competitors in its industry.
c. All of these are correct.
d. None of these are correct.
Barbara, an antique dealer, intentionally represents the value of an antique chest of
drawers, as $6,000 when she has reason to know the value is considerably less.
Margaret agrees to buy it for $5,500. It is worth $2,500. In a state that uses the
“out-of-pocket” rule, Margaret’s damage award would be:
a. $3,500.
b. $3,000.
c. $500.
d. $2,500.
Yukon Corporation purchases 1,000 shares of its own stock from Jones at a price of $50
a share. These shares, which are now issued but not outstanding, are known as:
a. treasury shares.
b. preemptive shares.
c. preferred stock.
d. no par stock.
Which of the following is true of restrictive covenants?
a. They are widely used in subdivisions.
b. Restrictive covenants are construed strictly against a party asserting their
applicability.
c. They may bind lot purchasers as though the restrictions had actually been asserted in
their own deeds.
d. All of the above.
General Supply owns all the stock of Playne Pencils. A Playne employee commits a tort
for which the employer is liable. The suit results in a judgment for $1 million against
Playne. Playne’s assets total $650,000, but General Supply’s assets are in the millions.
In which of the following situations would the judgment have to be paid by General?
a. General Supply’s board of directors is exactly the same as Playne’s.
b. The president of General Supply is also the vice president of Playne.
c. Playne’s income and General Supply’s income is held in one account.
d. None of the above.
Which of the following is untrue about a corporation’s ratification of an act of an
officer?
a. It applies to an authorized act of an officer.
b. It relates back to the original transaction.
c. It may be either express or implied from the corporation’s acceptance of the contract’s
benefits.
d. The corporation must have full knowledge of the facts in order to ratify the act.
Typically, members of a limited liability company have the right to vote on proposals
to:
a. adopt or amend the operating agreement.
b. admit any person as a member.
c. sell all or substantially all of the limited liability company’s assets prior to
dissolution.
d. All of the above.
Equitable remedies will NOT be granted when:
a. the terms of the contract are fair.
b. monetary damages would adequately compensate the injured party.
c. fraud, duress, undue influence, or mistake are not present.
d. All of the above.
If Anna Laura, in return for the payment of $200 to her by Catherine, gives Catherine
an option to buy Jesse, a prime Arabian mare, at any time within the next 14 days at a
price of $50,000, Anna Laura’s offer to Catherine is:
a. a revocable option contract.
b. an irrevocable output contract.
c. irrevocable for the 14 days covered by the option.
d. a requirements contract.
The definition of commercial reasonableness as used in contract law includes:
a. the business judgment of expert business managers.
b. that the practices customary in the type of transaction involved be used as a standard.
c. the requirements to develop creative and innovative solutions never before used in a
particular industry.
d. None of the above.
In the United States, property occupies a unique status because of the protection
expressly granted to it by the Fourth Amendment to the Constitution, which provides
that ‘No person shall be . . . deprived of life, liberty, or property without due process of
law.’
An oral contract for the transfer of an interest in land may be enforced if the party
seeking enforcement has so changed his position in reasonable reliance on the contract
that a court can prevent injustice only by enforcing the contract.
NEPA imposes the responsibility for maintaining the environment on all federal
agencies.
An incomplete instrument is non-negotiable. However, when it is completed, it may
become negotiable.
An indorsement “for deposit” is a collection indorsement.
Rodriguez and Compton asked a court for reformation of their contract based on a
mutual mistake. They seek an equitable remedy.
Someone who expressly assumes a mortgage is personally obligated to pay it.
In the United States, there is never a right to a jury trial in a civil case.
Ethical questions in business settings include corporate governance, whistle-blowing,
shareholder voting, and management’s duties to shareholders.