The EEOC is the federal agency responsible for enforcing Title VII.
a. True
b. False
Bagsby owns a business selling insects for organic gardening. Bagsby is seeking a loan
from First Natural Bank. The loan officer is asking that the loan be secured by Bagsby’s
inventory of insects, now owned or hereafter acquired. In order to do this, a new
security agreement will need to be signed each time Bagsby gets new insects or sells his
insects.
a. True
b. False
Fashions, Inc. has 12 shareholders. The company is subject to the Model Act. What
officers is Fashions, Inc. required to have?
a. A president, secretary, and treasurer
b. A president and a secretary, and they can be the same person
c. A president, at least one vice-president, a secretary, and a chief financial officer
d. Whatever officers are described in the corporate bylaws
Which of the following is correct concerning anti-takeover efforts?
a. Most states have passed laws to deter hostile takeovers, but these statutes have not
totally eliminated hostile takeovers.
b. Federal statutes have been more effective than state statutes in eliminating hostile
corporate takeovers.
c. The most effective federal statute has been the Poison Pill Act.
d. The Williams Act has been the most effective legislation in regulating of the actions
of the target company.
Judicial review is the power of the federal courts to declare a statute or governmental
action unconstitutional and void.
a. True
b. False
Directors have the authority to manage the corporate business.
a. True
b. False
April purchased a life insurance policy on herself. On her death, the proceeds of the
insurance were to be paid to her minor child, Ryan. Ryan is the beneficiary.
a. True
b. False
The corporate form of business
a. was first known and used by the Greeks and then spread through the Romans to
England.
b. was not known until the advent of the Industrial Revolution.
c. was first allowed in the State of New York around 1811 and is considered to be an
American creation.
d. is a relatively new concept developed shortly after the Great Depression.
The Trademark Law Treaty made it more difficult to apply for trademarks around the
world.
a. True
b. False
The 14th Amendment’s Equal Protection Clause ‘strict scrutiny” test will be used when
the legislation
a. affects an economic interest.
b. affects a person’s right to drive.
c. differentiates on the basis of race.
d. affects a person’s right to drink alcoholic beverages.
Mary owes $3,800 on her credit card. She sends the credit card company a check for
$800 with the notation “payment in full on the check. If the credit card issuer cashes the
check,
a. Marys balance will automatically be paid in full if the $3,800 amount was a
liquidated debt.
b. Marys balance will automatically be paid in full regardless of whether the amount of
$3,800 was liquidated or unliquidated.
c. the check may be subject to a UCC exception to the general rules for accord and
satisfaction cases involving checks.
d. Marys balance will automatically be paid in full if the $3,800 amount was an
unliquidated debt.
Jessie is the maker of a $1000 promissory note in favor of Tyler. Tyler subsequently
indorses the note to Ryan by signing just his name. Ryan in turn indorses it to Breanna
by indorsing the back of the note, “Without recourse, Ryan.” Breanna then indorses it to
Liz, the present holder, with a special indorsement.
If the note is dishonored by Jessie after it is properly presented to her for payment by
Liz, then Liz, after giving timely notice to Tyler, Ryan, and Breanna, may collect
payment under signature liability from
a. Tyler only.
b. Breanna and Tyler only.
c. either Tyler, Ryan, or Breanna.
d. neither Tyler, Ryan, nor Breanna.
Courts distinguish between mere gifts between parties and legally binding
commitments by the element of consideration.
a. True
b. False
Lorene, an artist, orally agrees to sell Sabrina a painting for $600. While Lorene is busy
talking on the phone, Sabrina writes her a note on the back of an envelope she finds in
her purse. The signed note states that she will stop by the studio to pick up the painting
within the week. Sabrina changes her mind about the painting, and when Lorene sues to
enforce the contract, Sabrina defends on the basis of the statute of frauds. Sabrina will
succeed with this defense.
a. True
b. False
Under the statute of frauds, the writing must: be signed by the defendant; and must state
with reasonable certainty the name of each party, the subject matter of the agreement,
and all of the essential terms and promises.
a. True
b. False
Jim told his manager, Lana, that a co-worker, Diane, had been in prison for theft. Lana
checked into the matter and when she learned that Diane had served time in prison for
theft, she fired her.
a. Jim is liable to Diane for defamation.
b. Jim is liable to Diane for defamation unless he can show a legitimate reason for
having to tell Lana about Diane’s prison history.
c. Jim is liable to Diane for defamation only if she is a public figure.
d. Jim is not liable to Diane for defamation.
Henry David Thoreau felt that war was unjust and therefore refused to pay his taxes
when the United States declared war on Mexico. If Henry David Thoreau’s neighbor
agreed that war was unjust but paid his taxes because the law required him to pay the
tax, the neighbor would be applying the jurisprudence theory of
a. legal positivism.
b. natural law.
c. legal realism.
d. common law.
Great State Bank and First Federal Bank have a security interest in TriColor’s
equipment. If neither secured party is perfected, the first to sue or repossess has priority
over the collateral.
a. True
b. False
Disputants Martin and Daulton have hired Thurman to mediate their disagreement.
Although Martin and Daulton must accept whatever decision Thurman makes, the
mediation has the advantage of keeping Martin and Daulton out of court.
a. True
b. False
The Fair Labor Standards Act
a. wage provisions do not apply to professional or managerial employees.
b. limits the number of hours an employer can require a person to work in any given
week.
c. does not apply to children.
d. does not address payment for overtime work beyond the standard 40 hour work
week.
The statute of limitations for breach of warranty under the UCC is
a. one year.
b. two years.
c. three years.
d. four years.
Generally, constitutional protections do NOT apply to
a. acts of the federal government.
b. acts of state government.
c. acts of administrative agencies.
d. acts of privately owned businesses.
A third party beneficiary’s status occurs
a. after an assignment and delegation.
b. when the third party is informed of the contract.
c. when the third party beneficiary agrees to the contract terms.
d. when the contract is created.
Palsgraf v. Long Island Railroad Co. addressed the issue of furnishing alcohol to
minors.
a. True
b. False
Ending a partnership involves which of the following three steps?
a. Dissolution, winding up, and termination
b. Dissociation, winding down, and consummation
c. Failure, dividing up, and paying off
d. Dissociation, agreement, and dissolution
Wedney, Inc. has a purchase money security interest in one of Yoro Chicken’s meat
processing machines. Wedney filed a financing statement on the day the machine was
delivered, perfecting its interest. Great State Bank already had a security interest in the
machine. Which party has superior priority rights in the meat processing machine?
a. Wedney. A PMSI in collateral other than inventory takes priority over a conflicting
security interest if the PMSI is perfected at the time the debtor receives the collateral or
within 20 days after he receives it.
b. Great State Bank, since it had an earlier security interest.
c. The party who is first to repossess the collateral has priority rights.
d. The creditors have equal priority.
TECO Coal Corporation mines and ships more than six million tons of coal annually.
TECO is comprehensively regulated by the U.S. Bureau of Mines. The U.S. Bureau of
Mines may conduct a surprise inspection of one of TECO’s mines
a. only if it has a search warrant.
b. only if it has a subpoena.
c. only if it has reason to believe a violation of a regulation has occurred.
d. without a search warrant to ensure safety.
Pharm-Ace holds a patent on a drug. Pharm-Ace used the patent (evidenced by the
patent certificate) to secure a $1 million loan from First Bank. The patent is chattel
paper.
a. True
b. False
Property of a person who dies without a will is distributed according to intestacy laws.
a. True
b. False
Sam enters into a contract agreement to buy Betty Lou’s house on the condition that he
is able to secure financing at or below 6% per year. This is a
a. condition precedent.
b. condition subsequent.
c. novation condition.
d. concurrent condition.
Why do many major corporations actively encourage ethical behavior?
a. Ethical behavior always leads to more profits.
b. Unethical behavior can quickly destroy a business.
c. Unethical acts are always illegal.
d. Unethical behavior always leads to a reduction in profits.
A donee beneficiary
a. is not entitled to enforce a contract against either party.
b. usually does not give consideration in return for the gift.
c. will generally become a creditor beneficiary after his or her rights vest.
d. is an incidental beneficiary.