A personal representative of an estate would breach fiduciary duties if the personal
representative:
A. combined personal funds with funds of the estate so that both could purchase
treasury bills.
B. represented the estate in a lawsuit brought against it by a disgruntled relative of the
decedent.
C. distributed property in satisfaction of the decedent’s debts.
D. engaged a non-CPA to prepare the records for the estate’s final accounting.
Which of the following ethical theories focuses on a decisions or action alone,
irrespective of the result it produces?
A. Deontological theory
B. Teleological theory
C. Profit maximization theory
D. Utilitarian theory
Which of the following is true for a stop-payment order to be effective?
A. The order can come up to an hour after the check has been honored.
B. The bank must receive the order in a way that gives the bank a reasonable
opportunity to act.
C. The bank can receive the order after it has certified the check.
D. The order must be in a written format for the bank to be able to recognize it as the
check corresponding to the stop-payment order.
A counterclaim differs from an affirmative defense in that, a counterclaim:
A. is a new claim by the plaintiff.
B. does not permit a defendant to claim for damages caused by a fraud.
C. is merely an attack on the plaintiff’s claims.
D. attempts legal relief for the defendant.
Under what condition may a partner compete against the partnership business?
A. If the business is in the IT field
B. If all the partners have consented to the partner’s activities
C. If the business is in a high demand field
D. If the partner pays a royalty to the partnership business
A partner in a partnership firm should make all attempts to take decisions that are in the
best interest of the firm. This is related to the concept of _____.
A. duty to serve
B. duty to act within actual authority
C. duty of care
D. duty to account
Abel was employed as a security guard for Seep Corporation. Abel’s job was to guard a
fenced-in area and to use force to keep intruders from climbing the fence to enter the
plant. His working hours were from 8:00 A.M. to 5:00 P.M. At about 11:00 P.M. one
evening, Abel drove past his place of employment. He saw a teenager named Johnny
climbing the outside of the fence that he guarded during the day. Angered by this
violation of Seep’s property rights and by the fact that Johnny had called him a
“potbellied moron” only three days earlier, Abel stopped his car, ran up to the fence,
pulled Johnny off of it, and beat him up. Johnny sues Seep Corporation for Abel’s
assault and battery (both intentional torts). Which of the following is most likely to be
the court’s verdict?
A. Seep’s is directly liable because Abel was an employee of the corporation at the time
of the incident.
B. Seep’s is not liable because Abel didn’t act within the scope of his employment.
C. Seep’s is liable under the doctrine of respondeat superior, since Abel was an
employee.
D. Seep’s is not liable for the intentional torts committed by its employees.
In order for the consideration requirement in contracts to be met:
A. the consideration given by each party must be of roughly equal value.
B. each party must give consideration.
C. the consideration must have monetary value.
D. the consideration must consist of some form of property.
Under a(n) _____, the seller’s bank agrees to assume liability on the letter of credit.
A. confirmed letter of credit
B. advised letter of credit
C. negotiable bill of lading
D. revocable letter of credit
Which of the following is an important state legislative power that works concurrently
with many congressional powers?
A. Enumerated power
B. Police power
C. Independent checks
D. Taxing power
Which of the following characterizes common carriers?
A. They have the same degree of responsibility as private carriers.
B. They are near-absolute insurers of the goods they carry.
C. They do not have a government license.
D. They are not allowed to carry perishable goods.
Melissa’s home is located in small and quiet neighborhood which has been declared a
residential area by the local zoning ordinances. She wants to convert her patio into a
small bakery for her neighbors who have often expressed their admiration for her
baking skills. Does Melissa have any solution?
A. Yes, she can take permission for a variance.
B. Yes, she can try for an amendment.
C. No, she cannot go against a zoning ordinance.
D. No, a residential zone can never be used for commercial purposes.
Which of the following elements is an exception that validates a financing statement
which covers goods that are to become fixtures, without it being lapsed?
A. Name of the debtor
B. Name of the secured party
C. Description of a real estate mortgage
D. Description of a nonfixture
Which Untied States Supreme Court case indicated that the search incident to arrest
exception does not permit a police officer from searching a smart phone of an
individual who was arrested without a warrant?
A. Riley v. California
B. Miranda v. Arizona
C. Maryland v. King
D. Marbury v. Madison
Gertrude has not paid rent for five months and Mary, her landlord, wants to evict her.
While Gertrude is at work, Mary enters the apartment and changes the lock. Mary
moves all of Gertrude’s belongings into a storage locker. When Gertrude comes home
from work, Mary gives the key to the storage locker. Which of the following is an
accurate statement?
A. Mary was not entitled to act as she did because Gertrude was just five months behind
in her rent.
B. Mary was entitled to act as she did because she protected Gertrude’s belongings by
placing them in a storage locker.
C. Mary was entitled to act as she did because a landlord has a right to “self help” in a
situation like this.
D. Mary was not entitled to act since she performed an illegal eviction.
A plan is considered to be fair and equitable to a class of impaired claimants with
unsecured claims if the reorganization plan:
A. provides for the sale of any property subject to liens securing such claims free and
clear of such liens with the liens to attach to the proceeds of the sale.
B. provides for the realization by the holders of the “indubitable equivalent” of such
claims.
C. provides that each holder of a claim will receive or retain on account of the claim
property of a value equal to the allowed amount of such claim.
D. provides the holder of any interest that is junior to the interests of such class will not
receive any property on account of such junior claim.
Ann had gone hiking into the woods. On the way, one of the tires of her new car failed.
Her vehicle was rendered inoperable. The road was deserted. Rick, a co-hiker was
passing on the way. He abducted her and sexually assaulted her. Ann wants to sue the
car company for negligence. Will she succeed?
A. No, because she had voluntarily assumed the risk while passing through the deserted
road.
B. No, because Rick’s sexual assault is an unforeseeable intervening cause.
C. Yes, because the company has breached its duty.
D. Yes, because the tire’s failure only resulted in her injury.
The Double Jeopardy Clause:
A. establishes that a person cannot be prosecuted by the state for a state crime after
being acquitted of a federal crime, if the two alleged crimes involved essentially the
same facts.
B. protects criminal defendants from having to undergo more than one prosecution by
the same sovereign for the same criminal offense.
C. establishes that a single criminal act with multiple victims cannot result in more than
one criminal prosecution.
D. bars a private plaintiff from pursuing a civil case against the defendant who was
criminally prosecuted for the same alleged conduct.
Which of the following corporate actions is included in a corporation’s board of
directors’ authority?
A. Adopting and amending bylaws
B. Amending the articles of incorporation
C. Approving merger of the corporation
D. Approving voluntary dissolution
_____ are intended to punish flagrant wrongdoers and to deter them.
A. Compensatory damages
B. Punitive damages
C. Liquidated damages
D. Tort damages
A contract whose formation is induced by duress is an example of a contract that is:
A. void.
B. voidable.
C. unenforceable.
D. executory.
In order to qualify as a trade secret, it must:
A. be developed through research.
B. be known to the general public.
C. be the work of a company.
D. possess sufficient value or originality.
Which of the following is an example of substantive unconscionability?
A. Terms that are stated in “fine print”
B. A disparity in bargaining power between the parties
C. High-pressure sales tactics
D. Unjustifiably harsh terms
For which of the following is the filing of a financing statement necessary for
perfection to occur?
A. A security interest in documents of title.
B. A security interest in chattel paper.
C. A security interest in consumer goods.
D. A security interest in general intangibles.
Consideration can be a(n) _____ in the case of a unilateral contract.
A. security
B. guarantee
C. act
D. promise
Acorn Marina Inc. sells and services boat motors. On April 1, 1989, Acorn financed the
purchase of its entire inventory with GAC Finance Company. GAC required Acorn to
execute a security agreement and financing statement covering the inventory and
proceeds of sale. On April 14, 1989, GAC filed the financing statement pursuant to the
UCC Secured Transactions Article. On April 27, 1989, Acorn sold one of the motors to
Mike for use in his charter business. Mike, who had once worked for Acorn, knew that
Acorn regularly financed its inventory with GAC. Acorn has defaulted on its
obligations to GAC. The motor purchased by Mike is:
A. subject to the GAC security interest because he should have considered the fact that
GAC financed the inventory purchased by Acorn.
B. subject to the GAC security interest because he purchased the motor for commercial
use.
C. not subject to the GAC security interest because he is regarded as a buyer in the
ordinary course of Acorn’s business.
D. not subject to the GAC security interest because GAC failed to file the financing
statement until more than 10 days after April 1, 1989.
_____ are model statutes drafted by private bodies of lawyers and scholars.
A. Precedents
B. Uniform acts
C. Ordinances
D. Equitable remedies
Mike has a three-year lease on the apartment he occupies. He has lived there one year.
He now wants to leave and go to Aspen, Colorado to be a ski instructor. However,
Mike’s landlord will not release him from the lease, and threatens to sue him if he
breaks his lease. Mike finds Paul to take over the last two years of the lease, but Mike is
worried that Paul might cause damage or in other ways inflict loss and that he, Mike,
might be held financially responsible. In order to assure Mike that he will be completely
discharged from all obligations under his lease, Mike should attempt to bring about:
A. an assignment.
B. a novation.
C. either an assignment or novation—it will not affect Mike’s future liability.
D. neither an assignment nor a novation—both will not accomplish Mike’s objective.
In deciding whether consideration necessary to form a contract exists, a court must
determine whether:
A. the consideration given by each party is of roughly equal value.
B. the consideration conforms to the subjective intent of the parties.
C. the consideration has sufficient monetary value.
D. there is mutuality of consideration.
Edith purchases a television set from Big Al’s Electronic Emporium, agreeing to pay
Big Al in monthly installments on a 12-month payment plan. In order to have a perfect
security interest in the television set, Big Al:
A. must file a financing statement with the appropriate public office.
B. must create a field warehousing arrangement.
C. should have Edith sign another contract recognizing Big Al’s security interest.
D. should not do anything as it is already perfect.
The apparent authority of a partner to bind the partnership in dealing with third parties:
A. would permit a partner to submit a claim against the partnership to arbitration.
B. must be derived from the express powers and purposes contained in the partnership
agreement.
C. will be effectively limited by a formal resolution of the partners of which third
parties are aware.
D. will be effectively limited by a formal resolution of the partners of which third
parties are unaware.
In which of the following circumstances, under the doctrine of stare decisis, does the
common law rule stated in an earlier judgment not apply to a present case?
A. Only when the case concerns a government agency.
B. Only when the court distinguishes the earlier decision.
C. Only when the parties involved jointly appeal to the courts to do so.
D. The doctrine of stare decisis does not allow this kind of a situation.
The LLC is not ordinarily liable for the wrongful acts of:
A. manager members in a member-managed LLC.
B. nonmanager members in a manager-managed LLC.
C. nonmanager members in a member-managed LLC.
D. manager members in a manager-managed LLC.