Marty Sandidge wrote a check payable to “Charles Saxon when the payees real name
was spelled “Charles Saxton. In order to obtain payment, Charles:
a. must have Marty void the check and rewrite another check with Charless name
spelled correctly.
b. may be required by a person taking the instrument for value to sign both “Charles
Saxon and the correct spelling of his name.
c. must sign only his real name with the correct spelling or he will be liable for forgery.
d. must sign only “Charles Saxon since that was the name on check.
Bob, a guest in Jim’s house, opens Jim’s desk and writes a check to himself on Jim’s
checking account, forging Jim’s signature. He indorses the check “Bob Saunders” and
presents it to Jim’s bank for payment. If the bank pays, can it collect from Jim’s
account?
a. Yes, because Bob is the real payee.
b. Yes, because Jim’s name is on the check.
c. No, because bank should have known the signature is forged.
d. No, because Jim did not know of the check.
A liquidated damage clause that represents a reasonable approximation of the damages
where the actual amount would be very difficult to determine will usually be upheld.
a. True
b. False
Which of the following is NOT considered to be dissolution by operation of law under
the UPA?
a. Bankruptcy of a partner.
b. Expulsion of a partner according to the partnership agreement.
c. Subsequent illegality of the partnership.
d. Death of a partner.
In recent years, more and more courts have followed the Ultramares doctrine in
deciding cases.
a. True
b. False
Which of the following is/are director(s) in publicly held corporations?
a. Inside.
b. Outside.
c. Unaffiliated.
d. Affiliated.
e. Any of these.
Qualified privilege depends on proper use of the privilege.
a. True
b. False
Agencies create more legal rules and adjudicate more controversies than all the nations
legislatures and courts combined.
a. True
b. False
The Landrum-Griffin Act would protect against:
a. a union officer’s keeping a member from giving his opinion at a union meeting.
b. an employer’s forbidding union workers from meeting.
c. an NLRB representative’s influencing elections.
d. an employer’s requiring all its employees to be union members.
What does Article 2 say with regard to the following?
a. Good faith.
b. Unconscionability.
c. Expansion of commercial practices.
Ad substantiation does not require advertisers to have a reasonable basis for their claims
at the time the claims were made.
a. True
b. False
A debtor will be denied a Chapter 7 discharge if he or she has received a Chapter 13
discharge within the past six years:
a. unless payments under that Chapter’s plan totaled at least 100% of allowed unsecured
claims.
b. unless payments under Chapter 13 totaled at least 70% of allowed unsecured claims
and the plan was the debtor’s best effort.
c. In all events.
d. Both (a) and (b) are alternative exceptions to the six-year rule.
The recovery for a lessee’s wrongful repudiation of a lease is the difference between the
present values of the old rent due under the original lease and the market rent.
a. True
b. False
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 Securities Act of 1933 regulates tender offers and proxy solicitations.
a. True
b. False
The law will carefully scrutinize contracts between Pete, a trustee, and Mason, a
beneficiary of the trust, to make sure there was no undue influence by Pete.
a. True
b. False
A contract induced by threatening to bring a civil suit against an individual is
prohibited:
a. if the threat is an abuse of process.
b. if the suit is to recover a debt, whether the debt is valid or in controversy.
c. under no circumstances.
d. Two answers are correct.
All but which of the following is an exclusive federal power?
a. The power to establish laws regarding bankruptcy.
b. The power to grant copyrights.
c. The power to enter into treaties.
d. Police power.
A partial assignment is a transfer of a portion of the contractual rights to one or more
assignees.
a. True
b. False
A bond, which guarantees the performance of the terms of a contract, is a(n):
a. judicial bond.
b. official bond.
c. performance bond.
d. fidelity bond.
Like the federal government’s power to tax, its power to spend will be upheld so long as
it does not:
a. violate a specific constitutional limitation on federal power.
b. restrict the states’ constitutional limitations.
c. cause undue hardship to the states.
d. interfere with commercial trade.
Able is involved in an automobile accident and is injured. While he is unconscious, the
police call an ambulance which takes him to a hospital. Able is treated at the hospital
and released a day later. The hospital sends him a bill for $4,500, which Able refuses to
pay, claiming it is too high and he never consented to the treatment because he was
unconscious. Able:
a. has entered into a unilateral contract with the hospital and therefore will have to pay
the bill.
b. will have to pay the hospital, because this is a quasi-contractual agreement.
c. has entered into an implied in fact contract with the hospital.
d. and the hospital have entered into a bilateral contract, the terms of which require that
he pay the bill.
The Revised Act grants dissenters’ rights:
a. to dissenting shareholders of a corporation leasing substantially all its assets, not in
the usual course of business.
b. only to the last capitalized corporation in a merger.
c. when a plan of compulsory share exchange is being acted on, for the acquiring
corporation only.
d. All of these.
A standard determined in terms of the business judgment of reasonable persons familiar
with the practices customary in the type of transaction involved and in terms of the facts
and circumstances of the case is:
a. good faith.
b. a subjective standard.
c. commercial reasonableness.
d. None of these.
A(n) __________ is a method of discharging a contract in which a third party becomes
bound upon a promise to the obligee.
a. assignment
b. delegation
c. partial assignment
d. novation
An example of language creating a suretyship as meant under the statute of frauds
would be the following: “If my business partner does not write out the check for the
supply bill for our company, I will.”
a. True
b. False
Rule 505, as promulgated by the SEC, provides a nonexclusive safe harbor for securing
the intrastate exemption.
a. True
b. False
Some publicly held corporations have used supermajority shareholder voting
requirements to defend against hostile takeover bids.
a. True
b. False
Intuitionism holds that rational persons possess inherent powers to assess the
correctness of actions.
a. True
b. False
General Widgets partnership assets amount to $34,000 after liquidation. Frank, Gene,
and Hank, equal partners, each contributed $3,000 into the capital pool at the inception
of the business. Gene later loaned the business $5,000. The partnership owes $23,000 to
creditors for inventory. Under the UPA, what will Gene get in distribution, assuming
there is no agreement on the distribution of profits?
a. $5,000.
b. $7,000.
c. $8,000.
d. $11,000.
ABC Bank sent Joanne, a depositor, her January statement on January 31. Within what
length of time after this date will Joanne have to notify ABC bank of any instruments
containing alterations or unauthorized signatures included in her January statement?
a. 10 days.
b. A reasonable period of time, not to exceed 30 days.
c. 60 days.
d. Three years.