Under Section 11 of the Securities Act of 1933, a purchaser must sue the accountant
within ten years after the time the misstatement or omission in the registration statement
was or should have been discovered.
Answer:
Under the UCC, when more than one security interest in the same collateral has been
filed, the first security interest to be filed has priority over any that is filed later.
Answer:
The Constitution’s commerce clause allows the President to regulate interstate and
foreign commerce.
Answer:
Sally files a lawsuit against Jim in a Tennessee court. Jim does not live in Tennessee nor
has he ever visited the state. The Tennessee court may not decide the case unless it can
demonstrate that Jim somehow has a close connection with the state.
Answer:
A life estate grants a person the right to use property for an indefinite period.
Answer:
Property insurance policies are generally nonassignable.
Answer:
In a guaranty contract, the guarantor’s promise must be evidenced by a writing to be
enforceable.
Answer:
Wagering, risk-shifting, and speculative bargaining agreements are all regarded illegal
by statutes.
Answer:
The Fair Debt Collection Practices Act affects only the practices of debt collection
agencies that collect consumer bills for creditors other than themselves.
Answer:
Tie-in contracts occur when a seller refuses to sell a product to a buyer unless the buyer
also purchases another product from the seller.
Answer:
A bidder making a tender offer must file a tender offer statement with the SEC before
the offer is made.
Answer:
Most states hold that plaintiffs can recover for purely economic losses under strict
liability.
Answer:
As illustrated by the Parol evidence rule, when parties put their agreements in writing,
it is wise to leave out any elements that they wish to modify orally.
Answer:
Mr. Smith filed a case in a municipal court against Bob for a minor criminal violation.
Dissatisfied with the decision of the court, Mr. Smith can now appeal the case in a court
of record.
Answer:
An agency relationship arises when the agent acts for his own benefit under the
direction of the principal.
Answer:
The zoning ordinances enacted by many cities and counties that cause limited
interference with a landowner’s use of the property is an example of taking.
Answer:
If an offeror requires a certain method of acceptance, the offeree must accept by that
method or no contract is formed.
Answer:
A promisee’s consideration must be another promise and cannot be in the form of an
act.
Answer:
A perfected purchase money security interest in inventory has priority over a
conflicting security interest in the same inventory if :
A. the purchase money security interest is perfected three months after the debtor
receives possession of the inventory.
B. the purchase money secured party gives an oral notification to the prior secured
creditor before the debtor receives the inventory.
C. the holder of the competing security interest received notification within eight years
before the debtor receives the inventory.
D. the notification states that the person expects to acquire a purchase money security
interest in inventory of the debtor and describes the inventory.
Answer:
One of the principal regulatory components of the 1933 Act is ____.
A. the prospectus
B. antifraud provisions
C. securities provisions
D. registration statement
Answer:
Arbitration of “lemon laws” under state statute:
A. is not required by most statutes.
B. is usually binding on the consumer, not the manufacturer.
C. is usually binding on the manufacturer, not the consumer.
D. is not binding on either the manufacturer or consumer.
Answer:
They believe that decisions are often more attributable to the biases and moods of
decision makers than they are to the formal legal rules that are supposed to determine
the outcome.
A. Legal realists
B. Legal positivists
C. Legal sociologists
D. Natural law thinkers
Answer:
Which of the following statements about offers is TRUE?
A. Any definite offer made by a merchant is a “firm offer” under the UCC.
B. An offer is effective upon dispatch.
C. A grumbling acceptance is a rejection and terminates the offer.
D. The death of the offeror will terminate the offer immediately.
Answer:
Which of the following is TRUE about a contract?
A. Any offer made is a contract, though there is no acceptance of the offer.
B. It need not necessarily be entered into by parties having capacity to contract.
C. It must be voluntarily entered into and promise to perform a legal act.
D. It must always be supported by consideration.
Answer:
Under the UCC, a fixture is defined as:
A. goods bought primarily for business, personal, or household use.
B. goods held for sale or lease to be used under contracts of service.
C. goods that are so affixed to real property that they are considered a part of the real
property.
D. goods other than inventory, farm products, or consumer goods.
Answer:
GP had been contracted by the city of Kingston to install a monitoring system at all
public places. This was to be done in two phases and the city had the right to terminate
the contract. GP had plans to use a subcontractor, Rex, whom they usually hired for the
last phases of projects executed by them. After two weeks of the work, the city of
Kingston found that things were not going properly and terminated GP’s contract. Can
Rex sue the city of Kingston?
A. Yes, because Rex is a third-party donee beneficiary.
B. No, because Rex is only an incidental beneficiary.
C. Yes, because Rex is involved in a novation.
D. No, because donee beneficiaries cannot enforce a contract.
Answer:
An agency relationship:
A. exists only when it is in the form of a written document signed by both the parties.
B. can be either compensated or uncompensated.
C. will not exist if the parties have expressly agreed that they do not intend to create
one.
D. can be formed only by contract.
Answer:
When a payment is tendered by check, the payment is:
A. final.
B. conditional.
C. unenforceable.
D. realized only after the goods are inspected.
Answer:
Emily Henrik residing in the state of North Carolina sent Gustave Franka residing in
France a note which read, “Ninety days after date, I promise to pay to the order of
Gustave Franka 5,000 euros (signed) Emily Henrik.” The note is:
A. payable in an equivalent dollar amount on the date of payment.
B. payable only in the foreign money specified on the date of payment.
C. payable on demand in the foreign money specified.
D. payable at sight in an equivalent dollar amount.
Answer:
To determine whether the offeror has created a present intent to contract, courts
consider:
A. how the offer was made.
B. whether the offeror has communicated it to the offeree.
C. the intent of the parties subjectively.
D. the status of the person who has made the offer.
The basic thing the courts require for the creation of an offer is a present intent to
contract on the part of the offeror. To determine whether the offeror has created a
present intent to contract, courts consider two main things: how definite the supposed
offer is and whether the offeror has communicated it to the offeree.
Answer:
If a check drawn “Pay to the Order of Wayne Joshua” is indorsed “Wayne Joshua” by
Wayne, the type of indorsement is:
A. special.
B. restrictive.
C. blank.
D. qualified.
Answer:
This clause bars the insurer from contesting its liability on the policy on the basis of
the insured’s misrepresentations if the policy has been in force for a specified period of
time.
A. Misstatement of age clause
B. Pro rata clause
C. Incontestability clause
D. Coinsurance clause
Answer:
If a court later finds that a person lacked mental capacity at the time a contract was
entered into, that contract is:
A. still valid.
B. voidable.
C. automatically void.
D. disaffirmed.
Answer:
If mortgagors sell the interest in their property without the consent of the mortgagee:
A. they have acted illegally.
B. the sale does not affect the mortgagee’s interest in the property.
C. the mortgagee will lose his/her interest in the property.
D. the mortgagee will lose all claims against the mortgagor.
The owner (mortgagor) of property subject to a mortgage can sell the interest in the
property without the consent of the mortgagee. However, the sale does not affect the
mortgagee’s interest in the property or claim against the mortgagor.
Answer:
Under a pure comparative negligence system:
A. plaintiffs who failed to exercise reasonable care are not able to recover.
B. plaintiffs are able to recover the portion of their losses not attributable to their fault.
C. plaintiffs are barred from recovery if they are as much or more at fault for their
injuries as the defendant.
D. plaintiffs are able to recover for the full extent of losses from the defendant even if
they were well aware of the risks involved.
Answer:
In which of the following ways do courts prevent minors, who misrepresent their age,
from defrauding adults?
A. By requiring the minor to place the adult in status quo.
B. By holding the minor to his/her spoken statements which clearly indicate intent to be
bound by the contract.
C. By ratifying the minor before he/she turns adult.
D. By proving them incapable of being held in a contract.
Answer:
Regarding promissory estoppel most courts:
A. follow the requirements for promissory estoppel set forth in the “Restatement
(Second) of Contracts” because the “Restatement” is the law.
B. follow the requirements for promissory estoppel set forth in the “Restatement
(Second) of Contracts” despite the fact that the “Restatement” does not carry the force
of law.
C. do not follow the requirements for promissory estoppel set forth in the “Restatement
(Second) of Contracts” despite the fact that the “Restatement” carries the force of law.
D. do not follow the “Restatement” as it does not carry the force of law.
Answer:
Acme Candy, Inc. agrees to buy all the sugar it requires from one sugar refiner. Which
type of contract is created in this case?
A. Requirements
B. Tie-in
C. Exclusive dealing
D. Interlocking
Answer:
Creating an LLP:
A. doesn’t require the partners to file an LLP form with the state.
B. requires that partners maintain an adequate amount of professional liability
insurance.
C. is relatively difficult to organize around an existing partnership.
D. necessitates that all existing partnerships be dissolved.
Answer:
Which of the following statements is TRUE for a nonexistent or incompetent
principal?
A. If the third person is unaware of the lack of capacity of the principal, the agent is
protected.
B. A minor is considered a nonexistent principal.
C. The law imposes an apparent warranty by the agent that the principal has the
capacity to be bound.
D. A person judged insane is not considered to be nonexistent.
Answer:
Voluntary petitions in bankruptcy may be filed by a(n):
A. individual.
B. insurance corporation.
C. municipal corporation.
D. loan association.
Answer:
How do courts deal with the situation in which an offeror tries to revoke an offer for a
unilateral contract after the offeree has begun acceptance, but before he has completely
accepted the offer?
Answer:
Why do contracts that involve the executors’ agreements to personally pay their
decedents’ debts that are covered by the statute of frauds to be in writing to be
enforceable?
Answer:
Jim Slim sued Acme Smelting for trespass because microscopic, airborne particles of
heavy metals from its copper smelter four miles away had been deposited on his
property. The smelter’s emissions met all federal, state, and regional regulations, and
had caused no actual damage. Is the deposit of microscopic particles on a person’s
property, without damage, a trespass?
Answer:
List the four basic functions of law.
Answer:
Explain the five transferor’s warranties.
Answer:
Tina borrowed $20,000 from ACME Mortgage and signed a promissory note secured
by a deed of trust on the land she owned. The note provided for interest at “30% over
prime to be adjusted monthly.” Is a note providing for a variable amount of interest, not
ascertainable from the face of the note, a negotiable instrument?
Answer:
Perry became a CPA in 2002. After working as a staff auditor and accountant for other
companies, she was hired as an auditor by Big Firm in 2003. When she was hired, there
were four male auditors in her area who had been with the company for several years
and were classified as senior auditors. In 2004, Perry complained that she was receiving
the same salary as a new male senior auditor, Bradshaw, even though she was doing the
same work. When Bradshaw was brought in, Big Firm was in the process of divestiture
and its policy was to fill positions with lateral transfers from other areas because of a
promotion and hiring freeze. In 2005, Perry filed a complaint with the EEOC claiming
that she was not being paid equally for equal work. Did Big Firm violate the Equal Pay
Act by paying Perry less than the male accountants?
Answer:
What is a possessory lien? Give an example.
Answer: