The typical dissolution of a corporation requires approval of the:
A. board of directors.
B. creditors of the company.
C. merger company.
D. shareholders.
If Jay signs Mila’s name to a negotiable instrument without Mila’s authorization or
approval:
A. the signature is not effective as the signature is of the unauthorized signer.
B. the signature cannot be ratified later by the person represented.
C. the signature does not bind the person whose name appears.
D. Jay is not liable on the check.
Fanny and her husband Fred own a farm in Iowa. Unfortunately, after earning a $50,000
income on the farming operation and $10,000 in non-related endeavors in 2002, Fanny
and Fred accumulated $100,000 in farm-related debt. Their only other debt is a $10,000
on a truck purchased in 2001. Fanny and Fred want to file for a Chapter 12 plan. Which
of the following statements is most accurate?
A. Fanny and Fred do not qualify for protection under a Chapter 12 plan.
B. Fanny and Fred will not be able to remain in possession of their farm under the plan.
C. A trustee will be allowed to sell unnecessary assets such as equipment.
D. A trustee will not be appointed under the plan.
Which of the following antitrust activities can be challenged only under the state law?
A. Interstate agreements in restraint of trade.
B. Intrastate agreements in restraint of trade.
C. Interstate deceptive and unfair practices.
D. Intrastate deceptive and unfair practices.
Jimmy and Pat had a long-standing professional relationship. In 2001, Jimmy’s business
began experiencing financial strain. The two friends discussed Jimmy’s personal
problems and financial difficulties, and Pat was concerned about his friend’s depressed
mental state. In 2003, Pat flew from Atlanta to New York to meet Jimmy. Prior to Pat’s
flight, Jimmy’s employee had faxed copies of various construction contracts and
correspondence relating to Jimmy’s controversial projects for Pat to review. In late
2005, Pat billed Jimmy for a $40,000 balance that Jimmy owed on the alleged oral
contract. In a letter to Pat, Jimmy stated: “I have paid you plenty and will not pay you
any more. I have not called for any professional advice since then.” Pat filed suit
against Jimmy for breach of contract. Will Pat succeed?
A. Yes, because Pat was offering his friend professional consultation.
B. Yes, because there is a valid contract formed, since Jimmy had sought Pat’s advice.
C. No, because it was a friendly advice and not an actual contract.
D. No, because Pat never entered into an oral contract and only written contracts are
enforceable.
The last tactic to adopt in resisting a request to act unethically is to:
A. buy time to think about a solution.
B. find a mentor and peer group.
C. prepare to leave the job.
D. find win-win solutions.
Which of the following is NOT a consequence of being a partner of a partnership?
A. Partners are not liable for each other’s torts.
B. Partners are agents of each other.
C. Each partner owns a portion of the value of the business.
D. Each partner owes fiduciary duties to the partnership and to the other partners.
Under which of the following systems of foreclosure does the creditor have no right to
recover any deficiency between the value of the property and the amount of the debt?
A. Strict foreclosure
B. Conditional foreclosure
C. Accommodative foreclosure
D. Compensated foreclosure
Kate is a partner in a limited liability partnership (LLP) which provides accounting
services. Acting within her authority, Allie, who is one of Kate’s subordinates,
negligently provides accounting services to a client. The client sues the LLP and its
partners. Which of the following is incorrect?
A. The LLP is liable to the client.
B. Allie is liable to the client, and the judgment may be satisfied out of her personal
assets.
C. Kate is not liable for Allie’s negligence.
D. Kate is liable to the client, and the judgment may be satisfied out of her partner’s
personal assets.
Before a court can determine a defendant’s market share, it must first define the relevant
market. One of the components of a relevant market determination is the relevant:
A. resource market.
B. supply market.
C. geographic market.
D. competitive market.
Acme Corp. asserted in a magazine advertisement that its electric-powered bunion
sander will remove bunions from users’ feet twice as fast as any other bunion sander on
the market today. As part of an investigation into whether this advertising claim was
deceptive, the Federal Trade Commission (FTC) issued a subpoena demanding that
Acme produce all of its records regarding tests it has performed to substantiate the
performance claim for the bunion sander. The subpoena also demanded production of
all records of tests to substantiate any performance claims made by Acme during the
past four years regarding each of the 32 other products manufactured by Acme. Four of
these other products were electric-powered products in the personal care category. The
remaining products were either lawn care products or nonelectric tools. The strongest
argument that Acme may make concerning the subpoena is that the subpoena:
A. is invalid because the FTC investigation is not being conducted for a legitimate
purpose.
B. need not be obeyed because it violates Acme’s Fifth Amendment privilege against
compulsory testimonial self-incrimination.
C. need not be obeyed to its fullest extent because the portion dealing with records on
most of Acme’s other products is not sufficiently specific and is unreasonably
burdensome.
D. is invalid unless the FTC satisfies the “probable cause” standard required by the
Fourth Amendment for the issuance of a search warrant.
Which of the following characterizes a warehouseman?
A. He is a bailor of the stored goods.
B. He does not have a lien against the bailee of the stored goods.
C. He need not exercise care for the stored goods, as it is the bailee’s responsibility to
do so.
D. He can terminate the contract if the goods are about to deteriorate.
Which of the following is generally true about state statutes establishing mechanic’s and
materialman’s liens?
A. Most of them require the mechanics and the material men to sign a deed of trust.
B. They require that work be done in the performance of a contract to improve real
property.
C. They do not allow subrogation by mechanics and materialmen.
D. They require mechanics and materialmen to enter into a quasi contract with the
contractor.
Which of the following transfers will generally be valid without the consent of the other
parties?
A. The assignment by the lessee of a lease contract where rent is a percentage of sales.
B. The assignment by a purchaser of goods of the right to buy on credit without giving
security.
C. The assignment by an architect of a contract to design a building.
D. The assignment by a patent holder of the right to receive royalties.
An employer is most likely to raise the _____ defense for a mixed-motives disparate
treatment claim under Title VII.
A. seniority
B. various merit
C. same-decision
D. BFOQ
In a “mixed-motives” claim under Title VII, an employer’s decision is an amalgam of
both prohibited and lawful motives. The employer may limit an employee’s recovery in
mixed-motives cases by proving that it would have made the same challenged
employment decision even in the absence of the unlawful motive (i.e., the
“same-decision defense”).
The difference between a wagering contract and an insurance contract is that the
insurance contract:
A. is commercial in nature.
B. transfers an existing risk.
C. does not contain an insurable interest.
D. is between two interested parties.
A deed where the grantor warrants against (and agrees to defend against) title defects
and encumbrances that arose after she acquired the property is called:
A. a special warranty deed.
B. a quitclaim deed.
C. a general warranty deed.
D. an invalid deed.
An essential element of the tort is that the alleged defamatory statement must be “of and
concerning” the plaintiff. Why?
A. It is extremely difficult to prove.
B. It places a burden on the defendant.
C. It aims to protect reputation.
D. It concerns public figures.
Which of the following is not one of the presentment warranties that the holder of an
unaccepted draft makes to the drawee?
A. That the draft has not been altered.
B. That the draft is not subject to a defense or a claim in recoupment.
C. That the holder has no knowledge that the signature of the drawer is unauthorized.
D. That the holder is entitled or authorized to obtain payment.
One day, Jon carelessly left a rake next to the sidewalk when he went to lunch. Deb, a
customer of the bank, stepped on the rake as she walked next to the sidewalk and was
injured. Which statement is most likely correct?
A. The bank is liable for Deb’s injuries.
B. The bank is not liable for Deb’s injuries, because she should have used due care.
C. The custodian is liable for Deb’s injuries but not the bank.
D. The bank is not liable for Deb’s injuries because the rake had a latent defect.
An agent who accepts a bribe to purchase goods for a principal from a seller who is a
personal friend breaches his _____ duty by taking the money, since it is the agent’s duty
to work only for the best interests of the principal.
A. fiduciary
B. statutory
C. indemnity
D. gratuitous
Mr. Blue and Mr. Yellow own all the casinos in Delta City. Mr. Green wants to open but
finds it too difficult to break into the market. Mr. Green sues Mr. Blue and Mr. Yellow
for antitrust violation under the Clayton Act. What is the likely reason for the case being
dismissed?
A. The Clayton Act does not deal with antitrust issues associated with real estate and
services.
B. The Clayton Act does not permit a plaintiff to sue two defendants.
C. Gambling is a vice and as such cannot be litigated in the court system.
D. The common law is that businesses cannot sue after failing to establish themselves in
the commercial market.
The process by which agency _____ rules are promulgated is highly regulated by the
APA and closely scrutinized by the courts.
A. procedural
B. interpretive
C. administrative
D. legislative
Bart agreed to deliver fruits worth $1,000 to a retail store. Bart and the store owner
agree that if delivery is not made on time, Bart will pay the store some amount as
liquidated damages, for the lost sales. Which of the following amounts would most
likely be considered unconscionable if they settle for it?
A. $200
B. $5,000
C. $5
D. $400
Which of the following characterizes the Uniform Transfers to Minors Act?
A. The custodian must be the transferor himself.
B. It defines a minor as anyone under the age of 21.
C. It only covers the transfer of real property to a minor.
D. It has been adopted in a few states.
What section of the UCC governs the prioritization of competing security interest in
collateral for secured loans?
A. 2-201
B. 3-343
C. 6-230
D. 9-322
Baker and Able signed a contract which required Able to purchase 600 books from
Baker at 90 per book. Subsequently, Able, in good faith, requested that the price of the
books be reduced to 80. Under the circumstances, the oral agreement is:
A. unenforceable, because Able failed to give consideration, but proof of it will be
otherwise admissible into evidence.
B. unenforceable, due to the statute of frauds, and proof of it will be inadmissible into
evidence.
C. enforceable, but it is not a valid agreement.
D. enforceable, and proof of it will be admissible into evidence.
Which of the following is a criticism of the traditional rule of restitution in the case of
minors?
A. It allows adults to ratify a contract with a minor.
B. It allows a minor to be exploited in a contract.
C. It does not allow a minor to disaffirm a bargain.
D. It is harsh on innocent adults dealing with minors.
If the buyer has misrepresented his solvency to the seller in writing within three months
before the delivery of the goods:
A. the 10-day limitation on the seller’s right to reclaim the goods does not apply.
B. the seller should actually repossess the goods within the 10-day period.
C. the seller’s right to reclaim the goods is not subject to the rights of prior purchasers in
the ordinary course of the buyer’s business.
D. the seller’s right to reclaim the goods is not subject to the rights of creditors with a
perfected lien on the buyer’s inventory.
A _____ indorsement is one where the indorser disclaims her liability to make the
instrument good if the maker or drawer defaults on it.
A. special
B. conditional
C. qualified
D. blank
After Khan (State Oil Co. v. Khan (1997)) and Leegin (Leegin Creative Leather
Products v. PSKS, Inc. (2007)), all forms of vertical price-fixing now receive _____
analysis.
A. quick-look
B. rule of reason
C. secondary
D. per se
When a court applies the exclusionary rule in a criminal case, it means that:
A. the case will be dismissed.
B. the defendant will be convicted.
C. the evidence will not be admitted at trial.
D. an arraignment will not take place.
Anna wants to create a will indicating that her favorite grandchild, Jesse, will inherit
her house. Anna takes an ordinary sheet of paper and, in her own handwriting, states
that it is her intent to leave her house to Jesse when she dies. She dates and signs the
will, but there are no witnesses to it. Anna then tells her entire family about the will.
Anna lives in a state where holographic wills are recognized, but nuncupative wills are
not. Will Anna’s will be recognized and followed?
A. Yes, because Anna’s will is entirely in her handwriting.
B. No, because there were no witnesses present when Anna made her will.
C. No, because a will must always be witnessed.
D. Yes, because Anna’s will has been already disclosed.
The _____ Act aids victims of identity theft by allowing them to file identity theft
reports with consumer reporting agencies.
A. Fair Credit Billing
B. Equal Credit Opportunity
C. Fair and Accurate Credit Transactions
D. Fair Credit Reporting