1) Sally is the secured party in a transaction with Lilly, who is the debtor. Sally files a
financing statement with the appropriate state official. The financing statement must
contain
a.Lilly’s signature.
b.Sally’s bank account information.
c.Lilly’s credit report.
d.a photograph of the collateral.
2) Odell invents “Profits Unbound,” new stock-trading algorithm software, and applies
for a patent. If Odell is granted a patent, his invention will be protected
a.for ten years.
b.for twenty years.
c.for the life of the inventor plus seventy years.
d.forever.
3) To notify the public of a proposed rule, the U.S. Office of Labor-Management
Standards, like other federal agencies, publishes the proposal in
a.the Administrative Procedure Act.
b.the Code of Federal Regulations.
c.the Federal Register.
d.the United States Code.
4) Burst-o’-Flavor Burger Restaurant Corporation merges with Chick-E Chicken
Franchise Corporation, with Burst-o’-Flavor absorbing Chick-E Chicken. After the
merger
a. a different, new entity is the surviving corporation.
b. Burst-o’-Flavor and Chick-E Chick’n are both surviving corporations.
c. Burst-o’-Flavor is the surviving corporation.
d. Chick-E Chicken is the surviving corporation.
5) Corbin, a partner in Dentists & Orthodontists Clinic, applies for a loan with
Evermore Bank allegedly on the firm’s behalf but without the authorization of the other
partners. Evermore knows that Corbin is not authorized to take out the loan. If Corbin
defaults on the loan, liability for its unpaid amount will be imposed on
a.Corbin and Doctors, jointly.
b.Corbin only.
c.Doctors only.
d.Evermore only.
6) With a bill of lading, Interstate Transport Company acknowledges possession of
certain goods and contracts to deliver them. Interstate Transport is
a.a bailee.
b.a buyer in the ordinary course of business.
c.a good faith purchaser for value.
d.an F.O.B.
7) Mortimer negotiates an instrument to Nadia. Negotiation is the transfer of an
instrument
a.for valuable consideration under a contract.
b.insuch form that the transferee becomes a holder.
c.pursuant to preliminary contract discussions.
d.without the payment of a recognized medium of exchange.
8) Albert buys a surround sound system from his neighbor George at George’s garage
sale. Albert writes George a check for $250 for the sound system. George is
a.the certifier.
b.the drawee.
c.the drawer.
d.the payee.
9) The Pennsylvania legislature enacts a state law that violates the U.S. Constitution.
This law can be enforced by
a.no one.
b.the federal government only.
c.the state of Pennsylvania only.
d.the United States Supreme Court only.
10) Diet & Health Food stores orders 1,000 boxes of granola bars from Energy
Products, Inc., but fails to specify the varieties. The granola bars are delivered in an
assortment of varieties. Diet & Health may
a.accept all of the granola bars “as is only.
b.accept all of the granola bars “as is or reject the entire shipment only.
c.accept only the granola bars that it wants and reject the rest.
d.reject the entire shipment only.
11) Cruz, a sugar cane farmer in Brazil, forms an alliance with Alexis, an importer and
marketer in the United States. Their products carry a Fair Trade label. This means that
Cruz
a.is willing to fairly trade goods instead of cash for his products.
b.receives a stable minimum price for his products.
c.employs forced labor at a fair price whenever possible.
d.produces crops as cheaply as possible to keep his prices minimal.
12) Sophie and Tiny incorporate their beverage-container business as U-Twist Products,
Inc. The first board of directors may be appointed by the firm’s
a.initialboard of directors.
b.incorporators.
c.firstofficers.
d.preferredshareholders.
13) Truck & Transfer Inc. agrees to pick up two containers for United Home Products
Corporation and store their contents, to be delivered later. While Truck & Transfer un-
loads one container, the other disappears from the company’s loading dock.
Truck & Transfer can avoid liability
a.by proof that Truck & Transfer was not negligent.
b.by proof that Truck & Transfer’s loading dock is in a high-crime area.
c.by proof that United Home was negligent in hiring TTC.
d.under any circumstances.
14) Alice is injured when she is struck by debris floating on her property, which was
flooded by a breach of Big R Ranch’s reservoir. The rule that a person who engages in
certain activities may be liable under the doctrine of strict liability for any harm that
results was established by
a.private parties engaged in negotiation.
b.the U.S. Congress.
ca British court.
d.a U.S. court.
15) Mix-It Concrete Company has the right to enter Nim’s land and remove the rock
from Nim’s quarry. This is
a.the power of eminent domain.
b.a license.
c.an easement.
d.a profit.
16) HoneyBee Foods, Inc., in Illinois, and Jelly Roll Pastries, in Kentucky consent to
have their dispute resolved in arbitration according to the law of Illinois. This is a
ground for a court to
a.compel arbitration.
b.review the merits of the dispute.
c.review the sufficiency of the evidence.
d.set aside any award.
17) General Credit Corporation lends money to Hank, taking a security interest in his
assets. Later, Hank files a bankruptcy petition. From General Credit’s point of view,
once Hank is in bankruptcy, his assets have
a.diminished value, or no value.
b.increased value.
c.the same value.
d.unique value.
18) EquipLease Company pays a premium to Federated Insurance Inc. for fire
insurance against the loss of EquipLease’s offices, warehouse, and storage center. After
EquipLease sells the facilities to Great State Trucking, Inc., the warehouse is lost in a
fire. Under the policy, Federated must pay
a.neither EquipLease nor Great State.
b.EquipLease and Great State proportionately.
c.EquipLease only.
d.Great State only.
19) When outrageous conduct consists of speech about a public figure, the First
Amendment’s guarantee of freedom of speech limits emotional distress claims.
20) If the circumstances indicate bad faith, a court can dismiss a debtors’ Chapter 13
petition.
21) A product liability action based on negligence does not require privity of contract
between the injured plaintiff and the defendant-manufacturer.
22) On a certificate of deposit, the bank is the maker and the depositor is the payee.
23) The Statute of Frauds operates as a defense to the enforcement of an oral contract
for the sale of land.
24) If a business firm refuses to comply with an agency€s request to inspect facilities or
business records, the agency must defer to the refusal.
25) The parties to a sales or lease contract can expressly provide for remedies in
addition to those provided in the UCC.
26) After a contract is made, a supervening event may make performance impossible in
an objective sense.