Interpretative rules of administrative agencies are automatically binding on the private
parties the agency regulates.
a. True
b. False
If the act or threat would affect a person of average strength and intelligence, then and
only then will the act constitute duress.
a. True
b. False
Laws passed by Congress are the supreme law of the land in the United States and take
precedence over other sources of law.
a. True
b. False
Under the common law, a modification of a preexisting contract must be supported by
mutual consideration; under the Code, a contract can be modified without new
consideration.
a. True
b. False
The Landrum-Griffin Act attempts to eradicate corruption through an elaborate
reporting system and a union “bill of rights” designed to make unions more democratic.
a. True
b. False
Once a shareholder sells the stock of the corporation, since the ownership of the
corporation changes, a new corporation is formed.
a. True
b. False
A limited partnership agreement may not provide that limited partners have the right to
vote on matters as a class separate from the general partners.
a. True
b. False
The FLSA is not the federal minimum wage statute.
a. True
b. False
In March, Margaret made a loan to Pete for $10,000. Three months later, she began to
hear rumors about Pete’s failing financial condition. When in July, Pete asked her to
loan him an additional $2,000 to buy inventory, Margaret required a security interest in
the inventory and also demanded that Pete secure the first loan with his personal
automobile. In September, Pete filed bankruptcy. Will these security interests stand up?
a. Yes, if they are properly filed.
b. Yes, since they are for antecedent debts.
c. No, both will be voidable preferences.
d. No, the security interest in the automobile would be a voidable preference.
Many states impose no limit on the rate of interest that may be charged:
a. on loans to corporations.
b. on consumer credit card transactions.
c. on any consumer loan.
d. All of the above.
e. Two of the aboe.
The Credit Card Fraud Act prohibits which of the following practices?
a. Possessing unauthorized cards.
b. Counterfeiting or altering credit cards.
c. Using accounts numbers alone.
d. Using cards obtained from a third party with his consent when the third party
conspires to report the cards as stolen.
e. All of these are prohibited.
The Federal Organizational Corporate Sentencing Guidelines provide for each criminal
offense a base fine that can be reduced, but not increased, under certain circumstances.
a. True
b. False
Which of the following involves a creditor beneficiary relationship?
a. A contract where the insured names a bank with which he has a loan as the
beneficiary of a life insurance policy.
b. A contract between an employer and a union representing the employees which is
made for the benefit of the employees.
c. A contract between the owner of a building and the contractor stating that the
contractor will pay the contractor’s employees at a stated rate.
d. A contract between a governmental unit and business for services to be rendered to
area citizens.
Larry leaves his hat under the seat at the movie theater. Is this a bailment?
a. No, because the theater manager does not have physical possession of the goods.
b. No, because Larry did not pay the theater to keep his hat.
c. Yes, if the theater manager finds it.
d. Yes, since the theater controls the building.
The Revised Act permits the board of directors to adopt certain amendments without
shareholder action, unless the articles of incorporation provide otherwise. These
amendments would include:
a. extending the duration of a corporation if it was incorporated when limited duration
was required by law.
b. changing each issued and unissued authorized share of an outstanding class into a
greater number of whole shares if the corporation has only one class of shares.
c. making minor name changes.
d. All of these.
Any partner by himself has the power to dissolve a term partnership by giving notice to
the other partners.
a. True
b. False
A points an unloaded gun at B and threatens to shoot. Unobserved by A, C, who is B‘s
wife, witnesses the threat and believes A‘s gun is loaded and that B is about to die. C
pulls out a gun and shoots and kills A. In this case:
a. C cannot successfully invoke the privilege of defense of others because A‘s gun was
unloaded.
b. C can successfully invoke the privilege of defense of others because of her
reasonable belief at the time she shot A.
c. C is liable because one can use deadly force only to protect himself.
d. C was entrapped into believing her husband was about to be killed, so she has a valid
defense.
Samuel Tate enters into a contract with Bill Smith under the terms of which Smith is to
pay Tate $7,000 and Tate is to build a garage, repair a boat, and build a doghouse. If the
doghouse has not yet been built, which term describes the type of contract in existence?
a. Quasi contract.
b. Executed contract.
c. Illusory contract.
d. Executory contract.
Which of the following is the correct definition for a partnership?
a. An association of two or more persons with one or more general partners and one or
more limited partners.
b. A legal entity ordinarily consisting of an association of numerous individuals.
c. An association of two or more persons to carry on as co-tenants in business.
d. An association of two or more persons to carry on as co-owners a business for profit.
Two boys held up a liquor store at gunpoint and ran off with a bag of money. The police
saw them run into Jill’s apartment building where there are only four apartments off a
common hall and no apparent way out of the building but the front door. The police
knock on Jill’s door. She says she’s the only one there. The police can:
a. search the apartment without a warrant because Jill voluntarily answered the door.
b. search the apartment without a warrant because they are in hot pursuit of the thieves.
c. not search the apartment, because they have no reason to believe that the boys are in
Jill’s apartment rather than the others.
d. not search the apartment because voluntary consent to enter is necessary.
Unless an auction is advertised or announced as being without reserve, the sale is with
reserve, and the auctioneer may withdraw the goods at any time until he announces
completion of the sale.
a. True
b. False
A primary reason for requiring a surety is to reduce the creditor’s risk of loss.
a. True
b. False
An insurable interest in property is a financial interest that justifies insuring such
property.
a. True
b. False
Annette entered into a contract with a local truck dealer to have a new truck delivered
to her daughter, Sue, as a graduation present. In this contract, Sue is:
a. an incidental beneficiary.
b. a donee beneficiary.
c. a creditor beneficiary.
d. an assignor.
Velma and Walter devised a scheme to defraud unsuspecting readers and then sent a
message via e-mail to thousands of computer users, hoping to get rich from those who
responded. This was their first such attempt. They may have violated:
a. the CAN-SPAM Act.
b. the International Internet Treaty Act.
c. RICO.
d. All of these.
Parties that are usually secondarily liable for an instrument are:
a. indorsers and drawers.
b. makers and indorsers.
c. makers and acceptors.
d. acceptors and drawers.
Brett contracts to purchase a particular Chevrolet from Johnson’s car lot. Brett obtains a
‘special property interest” in the car when:
a. the contract is made.
b. the car is tendered to Brett.
c. Brett pays for the car.
d. Brett accepts the car.
Bob promises to sell to Candy an automobile for $20,000, for which Candy promises
$20,000. A unilateral contract exists.
a. True
b. False
In enacting Section 2 of the Clayton Act, Congress was concerned with sellers who
sought to harm or eliminate their competitors through:
a. mergers.
b. price discrimination.
c. tying arrangements.
d. None of these.
When one party breaches the sales contract, the Code places the risk of loss on that
party.
a. True
b. False
The Congressional power to borrow money on credit of the United States and to coin
money have enabled the federal government to establish a national banking system, the
Federal Reserve System, and specialized federal lending programs such as the Federal
Land Bank.
a. True
b. False
The __________ is the federal statute requiring most records in agency files to be
accessible to the public.
a. FOIA
b. APA
c. ALJ
d. Government in the Sunshine Act
Thomas is the treasurer of Oklaw, Inc. He has authority to sign on behalf of the
company. One day, he signs a note as follows: “Thomas Maurtin, as treasurer.” The
company’s name does not appear on the note. Is the company liable on the note? Is
Thomas liable on the note? Explain.
List four areas of contract law where the common law of contracts and the law of sales
differ. Give both the common law rule and the rule under Article 2.
Jacob dissociates from the Applegate Partnership, which continues to operate. Discuss
Jacobs authority to act for the partnership after his dissociation and his possible liability
under the RUPA to the partnership or third parties for transactions entered on behalf of
the partnership.
What is the difference between the liability of a qualified indorser and an unqualified
indorser? Does the fact that a person has given a qualified indorsement mean that the
person has no liability? Explain.
What is the purpose of the Code remedies for breach of sales contracts? How is this
purpose accomplished?
How does the Revised Act define the term “distribution”?
If a person, without knowing of an advertised reward for information leading to the
return of a lost dog, gives information that leads to its return, is she entitled to the
reward?
Darrell executed a will fifteen years ago. Now he has changed his mind about how he
wants his estate distributed and who he wants to appoint as executor. Discuss how
Darrell may revoke his will.
What interests of injured parties are protected by remedies for a breach of contract?
Who are the parties to checks and notes?
Discuss the effect of an unauthorized signature on an instrument.
Milly owns a car rental business that nets over $2 million. How is Milly contributing to
the CERCLA trust fund?
Describe the structure of the federal court system. How does the federal court system
compare/contrast with the state court system of the state where you are living?
Compare “partnership property” with a “partner’s interest.” Consider such factors as the
definition, the possession, the assignability, how attachment occurs, and the
inheritability of each.
Discuss the concept of freedom of contract under Articles 2 and 2A of the UCC.
What are the ways the RUPA recognizes a partnership as an entity?
Explain when a writing is required under the UCC for a contract for the sale of goods
and what is needed in that writing. Identify three exceptions to the requirement of a
writing or record for the sale of goods.
Explain what a trial sale is. Identify the two types of trial sales recognized by the UCC
and explain the test for distinguishing between the two types. Discuss transfer of title
and risk or loss with each type of trial sale.
Karl loaned Linda $100,000. Madeline agreed to act as surety for $100,000. Nora
agreed to act as surety for $75,000 and Orville agreed to act as surety for $25,000.
Linda later defaulted on the loan, and Karl is now demanding payment from Nora and
Orville. What amount do Nora and Orville have to pay? If Nora and Orville pay, does
Madeline have any obligation? Explain.