A & K Inc. obtains a charging order against Bob, a partner in Foter and Poter
Partnership. Such an act will cause the partnership to dissociate.
An individual can sue a former employer for OSHA violations that the individual
witnessed.
In order for a unilateral mistake to make a contract voidable, either the nonmistaken
party must have caused or had reason to know of the mistake, or enforcement of the
contract must be unconscionable.
The implied warranty of habitability requires landlords to maintain residential rental
property in a statutorily defined, reasonably safe and healthy condition.
The Eighth Amendment forbids cruel and unusual punishments.
A security interest is not legally enforceable against a debtor, if it is not attached to one
or more particular items of the debtor’s property.
An order telling the respondent to cease engaging in the deceptive or unfair conduct is
the usual penalty resulting, from a successful FTC adjudicative proceeding.
Usually, only clients sue professionals under the securities law.
A foreign corporation is one that conducts its business in a state where it is not
incorporated.
The Critical Legal Studies movement regards the law as the product of political
calculation and longstanding bias of lawmakers.
A defendant’s constitutional right to be free from compelled testimonial
self-incrimination not only bars the prosecution from calling him/her as a witness at the
trial of a criminal case against him/her, but also bars the plaintiff from calling him/her
as a witness at the trial of a civil case against him/her.
A deceased person’s heirs have no power to order a bank to stop payment on checks
written by the deceased prior to his death.
The doctrine of “Res ipsa loquitur” means the thing speaks for others.
An insurance policy is exempt from registration under the 1933 Act.
Chica, a women’s fashion retailer, buys merchandise from Tammy, a fashion designer,
promising to pay for the merchandise within 30 days after receipt. This is an example of
an unsecured credit transaction.
Ann and Susan want to enter into a partnership business, having a term of five years, of
selling used cars. They have to prepare a partnership agreement in writing to be
enforceable under the statute of frauds.
In order to be liable under the implied warranty of merchantability, a seller must be a
merchant.
In recent times, the mirror-image rule is applied such that only a material difference
between offer and acceptance creates a rejection of the offer.
A transferor of a negotiable instrument for consideration warrants to his transferee that
the negotiable instrument has not been altered.
Pratt, owner of an appliance store, has a garage sale at his home where he sells old
furniture and books. He sells a set of books to his neighbor, Stacey. Pratt is considered a
merchant under Article 2 of the UCC in selling the books to Stacey.
A group of individuals can form a partnership for the nonprofit business that provides
charitable services.
As per the provisions relating to reaffirmation agreements, the Court can under special
circumstances order the debtor to become party to the reaffirmation agreement.
A State Homicide statute is an example of a substantive law, criminal law, and public
law.
Direct liability is also known as respondeat superior liability.
In the United States a defendant in a criminal trial is presumed innocent.
A submaterialman is not entitled to a lien, unless specifically stated by the Statute of the
State which is applicable to him.
Courts provide remedy for the breach of illegal agreements.
A holder of a check or draft who wants to get payment on it should first present the
check or draft to the drawer.
Tom takes his car to be repaired at Smith Auto Garage. Tom was surprised the total of
the bill and refuses to pay the total of the work performed. Smith Auto Garage holds
onto Tom’s car based on a Mechanic Lien. Tom stops make payments on the car to
Northshore Credit Union which has a perfected security interest in Tom’s car. Smith
Auto Garage will get their full amount of their lien prior to Northshore Credit Union
receiving funds from a sale of Tom’s car.
A director has a right to inspect corporate books and records that contain corporate
information essential to the director’s performance of her duties.
If a term is left open in a sale of goods contract, that open term or “gap” can be filled by
inserting a presumption found in the UCC’s “gap-filling” rules.
Incorporating a business involves following state law.
The term condition means an event that may affect a party’s duty to perform under a
contract.
Value is identical to simple consideration.
Article V of the Constitution makes the Constitution, laws, and treaties of the United
States Supreme over state law.
The origin of the policy against restrictions on competition in the market comes from
common law.
As a general rule, liability insurance policies furnish the insured with coverage for his
negligence and his intentional acts of a wrongful nature.
The Ocean Dumping Ban Act of 1987 set up a permit system regulating the dumping of
all types of materials into ocean waters.
In some circumstances, Article 3 allows a person to become a holder by negotiation,
though the transfer of possession is involuntary.
Courts have become increasingly inclined, in recent years, to hold that owners of
commercial property owe persons lawfully on the property a duty to take reasonable
steps to protect them against the foreseeable criminal acts of third parties.
If repurchased shares are neither canceled nor restored to unissued status, they are
called _____ shares.
A. preference
B. treasury
C. Golden
D. outstanding
Which of the following factors can impose direct penalties for corporate misbehavior?
A. Market forces
B. Corporate management
C. Labor unions
D. Investors
A state may impose its laws on a foreign corporation if such imposition does not violate
the Constitution of the United States, notably the Due Process Clause of the Fourteenth
Amendment and the Commerce Clause. The leading case in this area is the _____ case.
A. International Shoe
B. Katris v. Carroll
C. Ryan v. Cerullo
D. World-Wide Volkswagen Corp. v. Woodson
What is a statute?
A. Laws made and applied by judges
B. Laws made by Congress or a state legislature
C. Laws made by administrative agencies
D. Laws made by the federal judiciary
Helen and Casey are partners. Helen contributes capital of $20,000 to the partnership
and Casey contributes $10,000. They agree that Helen will receive 60 percent of all
profits and that Casey will receive 40 percent. They have not decided how to share
losses. The partnership makes a loss of $7,000. What is Helen’s share of the loss?
A. $2,800
B. $4,200
C. $3,500
D. $5,500
Why do the Restatements of Contracts not have the force of law?
A. It was the product of a private organization.
B. It had conflicting perspectives.
C. It was deemed significantly inferior to the common law.
D. It was deemed significantly inferior to the UCC.
An agency rule created through a(n) _____ rulemaking method reduces the chances of
voluntary compliance.
A. informal
B. executive
C. democratic
D. hybrid
Able carefully drew a check for $10 on her checking account at ABC bank, payable to
the order of Baker. Baker altered the check to read $100, and then negotiated it to Cain.
Cain presented the check for payment to ABC bank, which paid Cain $100. The bank
then deducted $100 from Able’s account. When Able saw her bank statement she
demanded that ABC credit her account for the altered check. ABC credited Able’s
account and then sued Cain. Is Cain liable?
A. Yes, because Cain violated a presentment warranty.
B. Yes, because Cain was a holder of the check.
C. No, Cain is not liable if Cain acted in good faith and was unaware of Baker’s
alteration.
D. No, because Cain is not holder in due course.
_____ agreements reduce a manufacturer’s sales costs and provide dealers with a secure
source of supply.
A. Joint venture
B. Exclusive dealing
C. Reciprocal dealing
D. Formal written
John died without leaving a will. He left a wife and two children. He lived in Boise,
Idaho, and he owned a ski condo in Aspen, Colorado. How will John’s ski condo be
distributed upon his death?
A. The law of intestate succession of Idaho will be followed, because Idaho is the state
where John was domiciled at the time of his death.
B. The law of intestate succession of Colorado will be followed, because Colorado is
where John’s condo is located.
C. The federal law of intestate succession will be followed, because John’s property is
located in more than one state.
D. The property will escheat to the State of Idaho.
Which section of the UCC states that title passes to the buyer when seller has completed
physical delivery of the goods?
A. 2-401
B. 2-305
C. 2-307
D. 2-201
Whose signatures are needed in order to satisfy the statute of frauds?
A. Only the signatures of witnesses to the agreement are required.
B. Only the signature of the party, attempting to enforce the contract, is required.
C. Only the signature of the party against whom enforcement is being sought.
D. Only the signature of the third party to the contract, the beneficiary, is required.
In order to prove a violation of monopoly under the Sherman Act, the offending person
or company must have done what?
A. Had the intent to monopolize
B. Profited by the actions in question
C. Violated criminal statutes in at least one state
D. Engaged in civil fraud during the course of business
The right of _____ is available for information that is not subject to a recognized legal
privilege and is relevant to the case or likely to lead to other information that may be
relevant.
A. demurrer
B. counterclaim
C. discovery
D. affirmative defense
Which of the following is true of the coinsurance feature of property insurance?
A. It prevents the insured from insuring for a minimal amount and recovering in full for
such losses.
B. It precludes the insured from insuring for less than the coinsurance percentage.
C. It is an additional refinement of the insurable interest requirement.
D. It helps the insured to recover full damages for any loss.
Under Section 1 of the Sherman Act, a corporation’s employees can be guilty of a
conspiracy provided they conspire with:
A. either the board of directors or the senior management of the corporation.
B. the employees of a wholly owned subsidiary firm.
C. the employees of an independent, competitor firm.
D. the employees of a subsidiary in which the parent has a controlling interest.
What is the standard of proof that the plaintiff must satisfy in a tort case?
A. Preponderance of the evidence
B. Beyond-a-reasonable-doubt
C. Benefit of assumption
D. Burden of proof
Samuel, a physically disabled young man, has rented an apartment from Beth for a
period of two years. Samuel finds that the apartment is ill-equipped to handle his basic
needs; he asks Beth for permission to make a few small alterations so that he can move
around the house with minimum support. Beth refuses to let him do so and asks him to
find another place. Is Beth’s refusal legal?
A. No, the law allows handicapped tenants to make reasonable modifications.
B. No, tenants have the right to do what they like during the lease period.
C. Yes, Samuel should find something suitable for him.
D. Yes, she is the owner and has supreme rights over her property.
The _____ Act is not limited to consumer credit; it also covers business and commercial
loans.
A. Truth in Lending
B. Equal Credit Opportunity
C. Fair and Accurate Credit Transactions
D. Fair Credit Reporting
The owners of an LLC are called:
A. natural persons.
B. members.
C. partners.
D. managers.
A party who makes a preincorporation contract with a corporate promoter is liable on
the preincorporation contract:
A. only after the corporation’s board of directors adopts the contract after the
corporation has come into existence.
B. only after the corporation’s articles have been filed with the secretary of state.
C. when the party agrees to look only to the prospective corporation for performance of
the contract.
D. only when the promoter is liable on the contract.
Abe and Carlos want to form a general partnership. What must they do in order to
create this legal form of business?
A. They must get a partnership license from the secretary of state.
B. They must sign a written agreement and file it with the secretary of state.
C. They must first orally agree to become partners and then formulate a contract.
D. They can start a partnership without any formalities.
If the deceased had no surviving relatives, the property goes to _____.
A. the executor
B. a charity picked by an assigned trustee
C. his friends
D. the state
What is the term to describe a plaintiff’s failure to exercise reasonable care for her own
safety?
A. Premises liability
B. Strict liability
C. Contributory negligence
D. Assumption of risk
Shawn was a manager and a limited partner in a Wall Street securities investment firm
limited partnership. He was expelled from the limited partnership after his conviction in
a securities fraud. Which of the following is true?
A. Shawn will retain his right to receive profits.
B. Shawn will retain his right to vote as a limited partner.
C. Shawn will lose his limited liability status.
D. Shawn will retain his managerial powers.
Dan, President of BAZ Co., is happy with the extraordinary performance of Naomi, a
BAZ Co. senior accountant. Dan informs Naomi that because of her superlative work in
the past fiscal year, he is going to give her a 5 percent raise effective next month.
Naomi, who has never heard of anyone at BAZ Co. getting a raise, is thrilled and thanks
Dan. Later that day, Dan realizes that giving Naomi this raise might cause all senior
accountants to demand salary increases. Dan decides not to give Naomi a raise after all.
He believes that his promise to give her a raise is not legally binding. Dan is correct
because:
A. there was no bargained-for exchange for the raise.
B. of the “preexisting duty” rule.
C. past consideration is not an act or promise.
D. past consideration is not liquidated.
In which of the following cases does apparent authority arise?
A. When a principal causes a third party to believe that the agent is authorized to act in
a certain way.
B. When a principal’s manifest consent is communicated directly to the agent.
C. When a person falsely represents himself as an agent of a principal to a third party.
D. When an agent reasonably believes that the principal wants him to act in a certain
way.
The Securities and Exchange Commission (SEC) was created by the:
A. Securities Exchange Act of 1934.
B. Securities Investor Protection Act of 1970.
C. Investment Company Act of 1940.
D. Securities Act of 1933.
Which of the following is NOT a requirement in the enforceability of a noncompetition
clause?
A. The noncompetition clause must serve a legitimate business purpose.
B. The noncompetition clause must be regarding the sale of goods.
C. The restriction on competition must be reasonable in time, geographic area, and
scope.
D. The noncompetition clause should not impose an undue hardship.
A(n) _____ is a separate contract in which an offeror agrees not to revoke her offer for a
stated time in exchange for some valuable consideration.
A. offer
B. option
C. bid
D. advertisement
Which of the following is an example of noneconomic damages from a contract case?
A. Money loss from non-performance of one party
B. Money loss from loss of professional time spent associated with contract
C. Emotional harm
D. Loss of future commerce that was budgeted for one party
According to the Model Nonprofit Corporation Act (MNCA), what is the minimum
number of members that a nonprofit corporation is required to have?
A. 50
B. 1
C. 10
D. 0
Pamela is a corporate promoter for Nulla Corporation, a corporation yet to be formed.
Pamela determines that Nulla will need to lease a building in which to conduct its
business. Pamela owns an office building that is suitable for Nulla. What should Pamela
do if she wants to make a contract for Nulla to lease the building from her?
What is the term for “a manifestation of assent to the terms made by the offeree”?
A. The Offer
B. The Acceptance
C. The Consideration
D. Revocation
In general, the mailbox rule is beneficial to:
A. the offeror.
B. the offeree.
C. the courts.
D. third-party beneficiaries.