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The right of the buyer to recover from an insolvent seller the goods in which he has a
special property interest and for which he has paid, existed at common law before being
included in the Code.
a. True
b. False
Under the Statutory Close Corporation Supplement to the MBCA, a close corporation
may operate without a board of directors.
a. True
b. False
Franz signs a $1,000 note payable to ABC Bank. To help Franz get the loan approved,
Amy also signs the note as an accommodation maker. Amy:
a. has the same liability as that of an accommodation indorser on a check.
b. has $500 of liability to the bank and Franz has $500 of liability.
c. has secondary liability on the note.
d. and Franz both have primary liability on the note.
In determining the duty of care owed by a defendant using the reasonable person
standard, the court will consider which of the following factors?
a. The existence of emergency conditions.
b. A physician's training and years of experience.
c. A person's severe mental retardation.
d. Both theexistence of emergency conditions and also aphysician's training and years
of experience.
Three torts comprise the misuse of legal procedure. They include:
a. malicious prosecution.
b. slanderous prosecution.
c. fraudulent misrepresentation.
d. All of these.
Mount Pleasant Tires does not have sufficient funds to pay damages for a tort that arose
out of the operation of the business. Jess, a business owner, is not personally liable if:
a. he is a sole proprietor of the business.
b. the business is a corporation and he is a shareholder.
c. he committed the tort.
d. he is a general partner of the business.
If an anticipatory repudiation substantially impairs the value of the contract, the
aggrieved party may:
a. await performance for a commercially reasonable time.
b. resort to any appropriate remedy for breach.
c. Both are correct.
d. None of these.
Any transfer for value of an instrument is a negotiation.
a. True
b. False
Which of the following acts requires disclosure of finance charges in terms of an annual
percentage rate and requires that interest rates be calculated in a uniform manner in
consumer credit transactions?
a. Equal Credit Opportunity Act
b. Fair Credit Billing Act
c. Truth-in-Lending Act
d. FTC Act
The most customary type of dividend is a:
a. stock dividend.
b. cash dividend.
c. property dividend.
d. liquidating dividend.
David dies an untimely death in a boating accident two days after writing a check to his
landlord. The bank finds out about Davids death the day after it happens. When the
landlord presents the check to the bank two weeks later, the bank must pay it unless
Davids heirs object.
a. True
b. False
Private tort actions may not be used to recover for environmental damage.
a. True
b. False
Silas deposits his paycheck in First American Bank without indorsing it. First American
cannot become a holder until Silas completes the indorsement.
a. True
b. False
Jonah, a businessman, has no connection with Harvard University, but he has a new line
of computer software that he would like to market to university students and faculty
under the name of "Harvard Software." In this case:
a. Jonah may in all likelihood register the name "Harvard Software" under the Lanham
Act.
b. Jonah may in all likelihood be able to copyright the name "Harvard Software" under
the Copyright Act.
c. it is unlikely that Jonah will be able to register the name "Harvard Software," because
it falsely suggests a connection to an institution.
d. it is unlikely that Jonah will be able to register the name "Harvard Software," because
it has no secondary meaning.
Under the UPA, a partner's ownership interest in any specific item of partnership
property is that of a tenant in partnership.
a. True
b. False
A receiver is a disinterested person appointed at the discretion of the court to manage,
liquidate, and conserve assets of a debtor.
a. True
b. False
The law applies a subjective standard in determining whether there was the requisite
intent to enter into a contract.
a. True
b. False
A decision of a state court is binding on all courts inferior to it in its jurisdiction. Thus,
the decision of a state supreme court binds all other courts in that state.
a. True
b. False
The nonbinding, informal process in which a third party is selected by the disputing
parties to attempt to help them reach a mutually acceptable agreement is known as:
a. conciliation.
b. discovery.
c. consensual arbitration.
d. compulsory arbitration.
James offers to sell four acres of land to Jennifer for $8,000 and further offers to keep
the offer open for one month if Jennifer will pay him $100 for the privilege. Jennifer
pays James $100. Which statement describes the payment of $100?
a. An implied in fact contract has been formed.
b. A unilateral contract has been formed.
c. This created a formal contract.
d. This created an option contract.
Which is not true about zoning ordinance variances:
a. They are not available for hardships caused by the actions of the property owner
seeking the variance.
b. Theyare available if it affirmatively appears that the property owner seeking the
variance cannot yield a reasonable return on the owner's investment in the property.
c. Theyare available for hardships caused by the variance that are common to the zoned
area.
d. All of these are true.
A widely applied test for causation in fact is the "but for" rule.
a. True
b. False
A contract may condition the performance of a party upon the approval of a third party.
a. True
b. False
Lonny is a partner in the Harris Limited Partnership. Unless the partnership agreement
provides otherwise, Lonny may:
a. assign his partnership interest and, if he does, he ceases to be a partner.
b. assign his partnership interest, but if he does, the assignment dissolves the
partnership.
c. assign his partnership interest and, if he does, the assignee may exercise the rights of
a partner.
d. not assign his partnership interest.
Who administers the federal unemployment compensation laws?
a. The Social Security Administration.
b. The states.
c. The federal courts.
d. The NLRB.
When a contract involving the sale of real estate calls for the delivery of the deed in
return for the purchase price on a certain day, this performance is known as:
a. foreclosure.
b. warranty deed day.
c. contract day.
d. the closing.
The test of foreseeable damages is subjective.
a. True
b. False
The National Tax Accountants Professional Association (TAPA) has recommended that
its members charge a minimum of $25 per hour for completing tax forms. This
recommendation is probably:
a. a per se price fixing violation of the Sherman Act.
b. not a violation of the Sherman Act, because it has been made by a professional
association.
c. not a violation of the Sherman Act, because a fee is different from a price.
d. subject to the rule of reason.
A real estate conveyance is governed by the:
a. statute of frauds.
b. financial decisions of the lender.
c. terms of the mortgage.
d. law of secured transactions.
The "Television Test" is a test that is generally accepted by adherents of intuitionism.
a. True
b. False
Under the Superfund Recycling Act of 1999, recyclers are exempt from clean-up cost
liability to the government or third parties.
a. True
b. False
Jill owns and operates a donut shop. Under the Code, the flour, sugar, and other goods
used by Jill to make donuts are classified as:
a. farm products.
b. fixtures.
c. consumer goods.
d. inventory.
A newspaper article hints that a certain corporation is a front for illegal activity. The
corporation:
a. will lose a defamation suit because only natural persons can successfully bring
defamation suits.
b. will likely win a defamation suit if the statement is untrue.
c. will likely lose a defamation suit because the press has an absolute privilege in this
type of case.
d. can win an invasion of privacy suit even if the statement is true.
The Federal Trade Commission was created by the Sherman Act and its powers are
limited to preventing unfair methods of competition as set forth in the Sherman Act.
a. True
b. False
