According to the RMBCA, only corporations with 50 or fewer shareholders may elect
statutory close corporation status.
In an auction with reserve, the bidder is the offeror.
A holder can convert a blank indorsement into a special indorsement by adding his or
her signature on it.
Article 2 of the UCC defines a merchant as a person who deals in the goods of the kind
involved in the transaction.
A durable power of attorney remains effective even if the principal is incapacitated.
To prove usurping by a director or an officer, a corporation must have the financial
ability to take advantage of the usurped opportunity.
A Statute of Wills permits all oral wills to be legally binding in a state.
A defendant who believes that he or she has been injured by the plaintiff can file a(n)
________ against the plaintiff.
A) injunction
B) cross-complaint
C) rejoinder
D) rebuttal
Which of the following is true of a minor’s duty toward a contract for necessaries of
life?
A) Minors need to reach the age of majority to enter into contracts for necessaries of
life.
B) Minors are exempt from paying for contracts for necessaries of life.
C) Minors must pay the reasonable value of necessaries of life for which they contract.
D) Parents are liable to provide necessaries of life to their minor children if they
become emancipated.
________ prohibits any form of sex discrimination where sexual favors are requested in
order to obtain a job or be promoted.
A) Title VII of the Civil Rights Act
B) Fair Employment Practices Act
C) Title II of Genetic Information Nondiscrimination Act
D) Title I of the Americans with Disabilities Act
Jason orders one hundred remote-controlled toy cars from RyBy Toys. In the contract, it
is stipulated that RyBy Toys will transport the toy cars via FlyByNight, a national
carrier service. RyBy Toys makes the arrangements and hands over the toys to
FlyByNight without the remote-controllers. Which of the following is a breach of
contract?
A) Jason refusing the delivery of toys
B) Jason accepting the delivery of toys
C) RyBy shipping the toys without remote-controllers
D) FlyByNight delivering the toys without remote-controllers
Which of the following is true of a general power of attorney?
A) A power of attorney can be oral.
B) Only lawyers can be agents of a power of attorney.
C) A power of attorney cannot be claimed once the principal is incapacitated.
D) It may allow the agent to sign legal documents on the principal’s behalf.
The act or process of a minor voluntarily leaving home and living apart from his or her
parents is referred to as ________.
A) restitution
B) emancipation
C) restoration
D) adhesion
________ is a clause in an international contract that designates which nation’s laws
will be applied in deciding a dispute arising out of the contract.
A) The Equal Protection Clause
B) The Supremacy Clause
C) A forum-selection clause
D) A choice of law clause
Plant life and vegetation growing on the surface of land are considered ________.
A) intangible property
B) real property
C) personal property
D) chattels
Which of the following is an informal contract?
A) check
B) bank draft
C) lease
D) recognizance
The form of government in the U.S.A. is known as federalism.
In a fully-disclosed agency, the contract is between ________.
A) a principal and an agent
B) a principal and a third party
C) an agent and a third party
D) a principal, an agent, and a third party
Clayton Inc. is a toy manufacturer that has released a new line of action figures. The
toys are meant for children between the ages of one and two. However, they come with
tiny detachable weapons that can be accidentally swallowed by children of that age.
Which of the following defects do the action figures have that will make them strictly
liable for any injuries caused?
A) defect in design
B) failure to provide adequate instructions
C) failure to avoid supervening event
D) defect in packaging
The ________ is a federal act designed to prevent fraud and other abuses associated
with private pension funds.
A) Employee Retirement Income Security Act
B) Consolidated Omnibus Budget Reconciliation Act
C) Fair Labor Standards Act
D) Family and Medical Leave Act
Altonvista Inc., a company based in California, is sued by a plaintiff from the state of
Texas. Which of the following statements would apply to this situation?
A) The case must be heard in the California federal court as this is a subject matter in
which federal courts have exclusive jurisdiction.
B) If the plaintiff chooses to bring the case to the California federal court, it would stay
in the federal court.
C) If the plaintiff decides to bring the case to the California federal court, Altonvista
Inc. can have the case moved to a California state court.
D) The case can only be heard in a California state court as the matter is not subject to
federal jurisdiction.
A(n) ________ is submitted along with the registration statement to the SEC and also
used as a selling tool to help prospective investors evaluate the financial risk of an
investment.
A) organization document
B) certificate of interest
C) prospectus
D) operation agreement
Which of the following is true of subsurface rights in real property?
A) Subsurface rights cannot be used to mine radioactive elements.
B) Subsurface rights can be sold separately from surface rights.
C) Minerals found beneath real property have to be given up to the government.
D) Subsurface rights can only be invoked to dig oil wells.
The Nutrition Labeling and Education Act (NLEA) applies to packaged foods and other
foods regulated by the Food and Drug Administration.
Which of the following is a provision made under the Berne Convention?
A) The treaty makes it mandatory to place the copyright symbol on all copyrighted
works.
B) The treaty sets the rules for how copyright can be dealt with when sharing
copyrighted work between governments.
C) The treaty eliminates the need to place the copyright symbol or the word “copyright”
on a copyrighted work.
D) The treaty stipulates the time period a copyright can be retained by the copyright
holder before it enters the public domain.
________ are federal agencies that have broad regulatory powers over key areas of the
national economy.
A) Independent federal administrative agencies
B) State administrative agencies
C) Law enforcement agencies
D) Cabinet-level federal departments
A person who has alternative periods of sanity and insanity can enter into contracts
________.
A) when he or she is in a state of sanity
B) when there is a legal guardian appointed by the court for that person
C) once he or she has been adjudged to be insane
D) only once he or she has been adjudged to be legally insane