A counteroffer is effective when dispatched by the offeree.
Stakeholder interest theory argues that a corporation should take actions in the interest
of all its stakeholders including suppliers, creditors, and customers.
If the offeror withdraws the offer any time prior to its acceptance by the offeree, it is
termed a revocation.
One of the parties to a marriage must be at fault for a court to issue a decree that legally
orders a marriage terminated.
The Federal Arbitration Act promotes the arbitration of contract disputes, whether the
dispute involves federal or state law.
Under the UPA, general partners have joint and several liability for torts and breaches
of trust.
Determining the line of commerce that will be affected by a merger involves defining
the relevant product or service market.
A business or party buying securities to the public is called an issuer.
The attractive nuisance doctrine is a tort rule that enforces breach of duty of care when
a statute or an ordinance has been violated.
The landlord can sue the sublessee to recover rent payments or enforce duties under the
original lease.
Negotiation may take place either before a lawsuit is filed, after a lawsuit is filed, or
before other forms of alternative dispute resolution are used.
In an unsecured credit, the creditor relies on the debtor’s promise to repay the principal
when it is due.
A contract which states that one of the parties has to perform only if he or she chooses
to do so is enforceable.
In a joint venture partnership, each joint venturer is liable for the debts and obligations
of the joint venture partnership.
A contracting party can be held liable for a slight deviation from a complete
performance.
The surety is primarily liable for paying the principal debtor’s debt when it is due.
A completed gift promise cannot be rescinded for lack of consideration.
Partial comparative negligence provides that a plaintiff must be less than 50 percent
responsible for causing his or her own injuries to recover under comparative
negligence.
Actual notice consists of publishing a notice of dissolution in a newspaper of general
circulation serving the area where the business of the partnership was regularly
conducted.
Specific performance is usually used to obtain possession of common everyday items.
A deficiency judgment permits a secured lender to recover other property or income
from a defaulting debtor if the collateral is insufficient to repay the unpaid loan.
According to the priority of law in the U.S., state regulations take precedence over state
statutes.
A person who commits a negligent act is liable unless actual cause can be proven.
A proxy is a written document that is completed and signed by a shareholder and sent to
the corporation.
The Federal Reserve System was created by Congress as the central bank of the United
States.
The employer may require medical proof of claimed serious health conditions.
Failure to warn is a defect that occurs when a manufacturer does not place a warning on
the packaging of products that could cause injury if the danger is unknown.
E-signatures are not as effective as pen-inscribed signatures in enforcing a licensing
agreement.
The Privileges and Immunities Clause applies to both citizens and corporations.
Limited partners actively participate in the management of the partnership concern.
The transferred intent doctrine allows merchants to stop, detain, and investigate
suspected shoplifters without being held liable for false imprisonment.
A seller or lessor retains the risk of loss of the goods until he or she identifies them to a
sales or lease contract.
Fundamental rights guaranteed in the First Amendment are not applicable to artificial
persons like corporations.
The original reason for providing diversity of citizenship jurisdiction to federal courts
was to prevent state court bias against nonresidents.
One criticism of stakeholder interest theory is that it puts too much emphasis on
maximizing shareholder wealth without focusing on employees.
Parties may voluntarily agree to perform a void contract and the agreement will be
enforced by the courts.
A person who discloses material nonpublic information to another person is called a
tippee.
An indorsement is the signature of a signer, other than as a maker, a drawer, or an
acceptor, that is placed on an instrument to negotiate it to another person.
If there are major failures of several large banks or many small banks, and the FDIC
insurance fund is insufficient to cover all of the depositors’ losses, which of the
following bodies is responsible for paying the depositors money owed by the FDIC?
A) the Federal Reserve System
B) the boards of the failed banks
C) the National Credit Union Administration
D) the U.S. government
Which of the following statements is true of a general power of attorney?
A) A power of attorney can be oral.
B) Only lawyers can be agents of a power of attorney.
C) A power of attorney cannot be claimed once the principal is incapacitated.
D) It allows the agent to sign legal documents on the principal’s behalf.
The Labor Management Reporting and Disclosure Act of 1959 is also known as the
________ Act.
A) Landrum-Griffin
B) Gompers-Lewis
C) Taft-Hartley
D) Wagner
Which of the following marks can be registered with the U.S. Patent and Trademark
Office?
A) the coat of arms of a foreign nation
B) a standalone geographical name
C) the flag of a municipality
D) a surname accompanied by a fanciful name
Tim Talon has been found by a court of law to be guilty of reckless driving and killing a
pedestrian as a consequence. His defense was that he was driving under the influence of
alcohol and lost control of his automobile. He was subsequently punished for his crime.
How would the court classify Tim Talon’s case for intent?
A) general intent crime
B) criminal intent crime
C) nonintent crime
D) specific intent crime
A(n) ________ is a fictitious legal entity that is created according to statutory
requirements.
A) corporation
B) cartel
C) outfit
D) conference
Fierra, Inc. is a German automobile manufacturer that has a 5 percent market share in
the United States’ automobile market. The company has a unit in North Carolina that
imports Fierra automobiles from its parent company in Germany and assembles them.
Which of the following measures is in accordance with U.S.A.’s Foreign Commerce
Clause?
A) The government of North Carolina imposes an additional 10% tax on Fierra cars.
B) The government of North Carolina bans the sale of Fierra cars outside its borders.
C) The government of North Carolina asks Fierra to shut down its import unit in the
state.
D) The federal government imposes an additional 100 percent tax only on Fierra cars
being sold in North Carolina.
Marcus employs a real estate broker, Dean, to sell his house. Dean’s express powers are
to advertise and market the house for sale, show the house to prospective buyers, and
accept offers from persons who want to purchase the house. He is not allowed to seal a
deal without Marcus’ consent. Marcus goes away on a month-long trip where he cannot
be contacted. During this time, a short circuit in the house causes a power outage. Dean
uses his authority to hire an electrician to repair the circuits and restore electricity in the
house. Marcus then comes back and pays Dean for the electricity repair. What is the
nature of the agency that Dean used to fix the electricity problem in the house?
A) implied agency
B) agency by ratification
C) power of attorney
D) express agency
Which of the following is true of an LLC?
A) An LLC is a creature of federal law.
B) An LLC is regarded a separate legal entity.
C) An LLC cannot hold title to or transfer property.
D) The owners of an LLC are called general partners or specific partners.
Liability in which a person cannot be held contractually liable on a negotiable
instrument unless his or her signature appears on the instrument is referred to as
________.
A) warranty liability
B) unqualified liability
C) contract liability
D) accommodation
Chan, Yuvi, Betty, and Bob form a manager-managed LLC that sells antique
commodities online. Yuvi and Betty are named managers of the LLC. Betty secretly
starts a competing business to conduct online auctions over the Internet. Which of the
following is true of the given scenario?
A) All the members can be held liable for breaching their duty.
B) Betty is liable for breaching her duty of loyalty to the LLC.
C) Betty is liable for breaching her duty of care to the LLC.
D) Betty can compete with the LLC without any legal liability.
Which of the following is true of the Equal Protection Clause of the Fourteenth
Amendment?
A) It was enacted to guarantee equality to freed African Americans.
B) It was enacted to provide equal rights to foreign companies operating in the U.S.
C) It ensured equal rights to all the illegal immigrants in the U.S.
D) It offered equal rights to expatriate workers in the country.
Which of the following statements is true of accountants’ liability to third parties in
breach of contract and fraud cases?
A) An accountant is liable to a third party for fraud only if the accountant has
committed constructive fraud.
B) An accountant is not liable to a third party for fraud as the accountant is not in
privity of contract with the third party.
C) An accountant is not liable to a third party in breach of contract cases as the
accountant is not in privity of contract with the third party.
D) An accountant is liable to a third party for breach of contract if the accountant
willfully refuses to perform the terms of the contract.
What elements of direct price discrimination must be shown in order to prove a
violation of Section 2(a) of the Robinson-Patman Act?
Fractaline Analytics contracts with Lushwing Interiors to purchase office furniture.
Both companies draft a carrier contract which specifies that the shipment must be
transferred in a single transaction to Fractaline Analytics. While not mentioning the
exact place of delivery, the contract requires Lushwing Interiors to put the goods in a
carrier’s possession and ensure their proper and safe transportation. The carrier contract
in this scenario is most likely to be an example of a(n) ________.
A) installment contract
B) shipment contract
C) destination contract
D) implied contract
Stan bought a motorcycle for $4,000 on credit extended by the seller Cooper Motors.
Stan signed a security agreement with the seller for the credit he obtained. Cooper
Motors didn’t file a financing statement for the credit offered. In this case, Cooper
Motors automatically obtained the creditor’s security interest through ________.
A) perfection by possession of collateral
B) perfection by financing
C) perfection by attachment
D) perfection by claim
A situation in which the articles of incorporation demand the approval of 90 percent of
the voting shares instead of the usual 50 percent is known as a ________.
A) supramajority
B) simple majority
C) greenmail
D) standstill agreement
ASEAN Plus Three (APT) is an association that discusses regional economic, social,
and political issues in Southeast Asian countries. The “three” in the association refers to
________.
A) Singapore, Malaysia, and Japan
B) Singapore, South Korea, and China
C) China, Japan, and South Korea
D) Malaysia, South Korea, and Japan
Why is proving a bona fide occupational qualification essential?
A) for certain discrimination to be legal
B) to establish the employer’s violation of Title VII
C) to establish the employee’s claim is fraudulent
D) for an employee to claim being discriminated against by the employer
The rule of reason is characterized by ________.
A) an automatic violation of Section 1 of the Sherman Act
B) an inherently anticompetitive nature
C) a lack of need for any evidence to deem the restraint unreasonable
D) an evaluation of the company’s market share, power, and other facets
Under the ________, the court must examine the pro- and anticompetitive effects of a
challenged restraint.
A) Noerr doctrine
B) rule of reason
C) per se rule
D) consent decree
U.S. wage rates are about one-tenth of those in Mexico and Canada.
A(n) ________ permits the maker to pay the amount due prior to the due date of the
instrument.
A) prepayment clause
B) acceleration clause
C) extension clause
D) forestallment clause
A seller has the right to stop delivery of goods in transit regardless of the size of the
shipment when ________.
A) the buyer repudiates the contract
B) the buyer has payments due
C) the seller learns of the buyer’s insolvency
D) the seller has been ordered for specific performance
Which of the following acts regulates spam email on the Internet?
A) Anticybersquatting Consumer Protection Act
B) Controlling the Assault of Non-Solicited Pornography and Marketing Act
C) Communications Decency Act
D) Uniform Computer Information Transactions Act
A contract is ________ if the offeror’s promise is answered with the offeree’s promise of
acceptance.
A) unilateral
B) bilateral
C) executed
D) void
The ________ is an international organization created by a multilateral treaty in 1945 to
promote social and economic cooperation among nations and to protect human rights.
A) United Nations
B) League of Nations
C) General Agreement on Tariffs and Trade
D) World Trade Organization
If Venusia Records wanted to enter a foreign country to operate its music stores, it could
grant a franchise to a foreign company operating in the foreign country, which would
then choose the individual franchisees in that country. This is a form of a(n) ________
franchise.
A) area
B) chain style
C) distributorship
D) processing plant
Once a complaint has been filed with the court, the court will issue a ________,
directing the defendant to appear in court.
A) answer
B) rejoinder
C) summons
D) judicial restraint
For creditors, which of the following is an advantage of Chapter 13 over Chapter 7?
A) It allows them to recover a greater percentage of the debts owed to them.
B) It doesn’t permit debtors to discharge even a small portion of unsecured debt.
C) It permits creditors to get hold of the exempt and nonexempt properties of debtors.
D) It ensures instant repayment of the debt without any delay.
In which of the following situations is parol evidence admissible?
A) when both the parties to a contract agree to it
B) when a contract is not ambiguous
C) in case the contract is in agreement with the Statute of Frauds
D) in case of a contract made under duress
Plant life that is severed from the land is considered to be ________.
A) intangible property
B) immovable property
C) real property
D) personal property
Wesley buys a house for $1,000,000. He puts $400,000 down, and borrows $600,000
from a bank against the property as collateral. When Wesley defaults, the bank decides
to foreclose the property. However, the property depreciated significantly and it is
worth is only $500,000 now. The bank brings a legal action against Wesley to claim the
$100,000 shortage. Which of the following court doctrines can help the bank recover
the shortage from Wesley?
A) right of redemption
B) lien release
C) deficiency judgment
D) summary judgment