The World Bank established the ____ to encourage increased investment in developing
nations.
a. Overseas Private Investment Corporation
b. World Trade Organization
c. Multilateral Investment Guarantee Agency
d. Commission on International Trade
What is another name for the main purpose doctrine?
a. The collateral promise rule
b. The possibility test
c. The leading object rule
d. The suretyship provision
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.
A transfer of debtor’s property includes:
a. retention of title as a security interest.
b. only a voluntary disposition of property.
c. only a direct interest in property.
d. only modes of disposing of property, or an interest therein, specified in the
Bankruptcy Code.
A photographer taking photos of a movie star with a telephoto lens would NOT be
guilty of intrusion if the:
a. photographer never entered onto the movie star’s property.
b. pictures were not published.
c. movie star was in bed at the time.
d. movie star was in a public building at the time.
The State of Florida enters into a contract with Treasure Salvors governing the salvage
of a Spanish galleon that sunk in the 1600s. Under the terms of the contract, the
salvagers agree to relinquish 25% of the items recovered to the State of Florida in return
for the right to salvage on state lands. At the time the parties enter into the contract, they
both believe that the seabed where the ship lies is state land. Subsequently, the United
States Supreme Court holds that the continental shelf on which the ship rests has never
been owned by Florida. The salvagers sue to rescind the contract. The contract:
a. cannot be rescinded.
b. should be avoided because the parties made a mutual mistake.
c. should be enforced because, although there is a mutual mistake, it is not material.
d. will be enforceable because the United States government will automatically step
into the shoes of the State of Florida.
Curt 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. Curt may, most likely, register the name “Harvard Software” under the Lanham Act.
b. Curt may, most likely, be able to copyright the name “Harvard Software” under the
Copyright Act.
c. it is unlikely that Curt will be able to register the name “Harvard Software,” because
it falsely suggests a connection to an institution.
d. it is unlikely that Curt will be able to register the name “Harvard Software,” because
it has not yet been market tested to see if the name confuses consumers.
Dr. Wells purchased a refrigerator to use for storing medications at his office. The
refrigerator will be classified as:
a. consumer goods.
b. equipment.
c. a fixture.
d. inventory.
Chris receives a printed form in the mail from Wyandott Heating indicating that he has
placed a telephone order for a $600 heater. He doesn’t recall placing the order. Which of
the following is correct?
a. Wyandott can hold Chris to the order.
b. Chris can hold Wyandott to the order.
c. Neither party is bound, because there is no signed writing.
d. Chris is bound if he makes no objection within 10 days.
Explain each of the following specialized types of corporations:
a. Professional
b. Public
c. Nonprofit
Which of the following is true of dissociation?
a. All of the common law causes of dissociation are also causes under the RUPA.
b. A partner has the power to dissociate at any time by expressing the intent to withdraw
from the partnership.
c. Which dissociations are wrongful are set forth by statute and cannot be modified by
the partnership agreement.
d. The partnership agreement cannot modify the effects of wrongful dissociation.
Michelle’s Boutique places an ad in the Sunday paper for beautiful, top-of-the-line
designer suits for $3.00 each. Irene sees the ad in the paper and goes to the store to
stock up on business suits for her new job. Michelle apologizes for the misprint. Irene
has just finished a class in contract law and insists that the store sell her five suits for
$15.00. Irene threatens to sue Michelle for breach of contract. In this case:
a. Irene will win if she sues because this is a valid contract.
b. the ad in the newspaper is an offer to sell.
c. the ad in the newspaper is a solicitation seeking offers, but is not an offer to sell;
therefore, Irene will not be able to successfully sue for breach of contract.
d. None of the above.
Which of the following is NOT an advantage of a partnership?
a. Partners’ income taxes may be less than the income taxes would be on a corporation.
b. Each partner has limited liability.
c. It is possible to bring together more managerial skills than in a sole proprietorship.
d. It is possible to bring together more capital than in a sole proprietorship.
Chad has offered to take Miles into his accounting firm as a partner upon payment of
$5,000 cash. In response, Miles says, “I’ll give you $3,000 cash now and I will pay you
the remainder in two months after I see whether things are working out as a
partnership.” In this case:
a. Miles has made a counteroffer; hence there is no contract.
b. Miles has rejected the terms of the original offer, but there is still a contract.
c. Chad is a merchant making a firm offer under Article 2 of the UCC. Hence there is a
contract.
d. any indefinite provisions in the contract between Chad and Miles will be supplied by
Article 2 of the UCC.
The basic enforcement mechanism of ____ is a system of on-site inspections by safety
and health inspectors.
a. OSHA
b. Social Security
c. workers’ compensation laws
d. FLSA
Ronald Beeb, who lives in Cleveland, receives a mailing from Florida from the
SwampLand Reclamation Project. It states that the Beebs can purchase one-acre sites as
part of a newly planned development of 200 lots located in Leon County, Florida. The
Beebs contact the company and are given a purchase agreement but no additional
information. They sign the purchase agreement and send it back. Then, a week later
they decide they would prefer to winter in either New Zealand or Australia. Can the
Beebs get out of the contract?
The rule that prohibits schemes and devices to defraud investors is Rule:
a. 504.
b. 14a-3.
c. 10b-5.
d. 16(b).
International agreements in the form of treaties:
a. require approval by a majority vote of the United States Senate.
b. require approval by a two-thirds vote of the United States Senate.
c. require no approval from Congress.
d. are explicitly mentioned in the U.S. Constitution as a power given solely to
Congress.
If Hyvac Vacuum Cleaners requires that Hyvac bags be used for the warranty to be
valid, under the Sherman Act, this is:
a. illegal per se.
b. a tying arrangement, which is always judged by rule of reason.
c. either illegal per se or judged by the rule of reason depending on the economic power
of the seller and the amount of interstate commerce in cleaner bags affected.
d. no violation.
Which of the following is not an established right of a shareholder?
a. The right to vote
b. The right to inspect the books of the corporation
c. The right to participate directly in the management of the corporation
d. The right to bring lawsuits to enforce their rights
Contracts induced by threats of ____ are voidable, regardless of whether the coerced
party has committed an unlawful act.
a. civil prosecution
b. criminal prosecution
c. tortious conduct
d. physical force
A partner:
a. cannot be held criminally liable for the crimes of his partners.
b. may be criminally liable for the crimes of his partners if he authorized the acts.
c. who commits a tort is liable to the third party only through the partnership entity.
d. has joint and several liability with his partners for contracts entered and for torts and
crimes committed by other partners.
With regard to a limited partner’s capital contribution to the limited partnership:
a. the limited partner can only contribute cash.
b. a promise by a limited partner to contribute to the limited partnership is not
enforceable unless it is in a signed writing.
c. if the partner fails to make a required capital contribution, the limited partnership
may hold the partner liable to contribute the cash value of the promised contribution.
d. Two of the above, (b) and (c).
Humberto writes to Stan asking if Stan will buy his cultivator for $600. Humberto’s
question:
a. if answered in the affirmative by Stan, creates a contract.
b. indicates merely a willingness to enter into negotiation rather than a willingness to
enter into a contract.
c. is a definite and certain offer communicated to an offeree.
d. is subject to the mirror image rule.
The power to convert private property to public use is known as:
a. allocation.
b. eminent domain.
c. after-acquired title.
d. enabling.
Ivan issued a check payable to the order of Jack in payment for work performed by
Jack. Jack indorsed the check and gave it to his son Karl as a gift. Karl is:
a. a holder in due course.
b. not a holder in due course, but acquires the rights of a holder in due course.
c. a holder.
d. Both (b) and (c) are true.
Maria posted several signs in the neighborhood offering $50 for the return of her lost
cat. Dave calls to get a description of the cat and tells Maria, “I’ll look for your cat.” A
contract is formed by Dave’s call to Maria.
Which of the following terms would indicate a destination contract?
a. F.O.B. city of buyer
b. F.O.B. city of seller
c. C.I.F.
d. F.A.S. seller’s port
The Uniform Commercial Code would be applied in which of the following situations?
a. A contract for landscape services
b. A contract for sale of patent rights
c. A contract for the purchase of farmland
d. A contract to buy living room furniture
A corporation that buys the assets of another corporation does not assume the other’s
liability unless the:
a. purchaser, expressly or impliedly, agrees to assume the seller’s liabilities.
b. transaction amounts to a consolidation or merger of the two corporations.
c. purchaser is a mere continuation of the seller.
d. sale is for the fraudulent purpose of avoiding the liabilities of the seller.
e. All of the above.
Under Section 2-210 of the Code, unless circumstances indicate to the contrary, a
contract that prohibits an assignment:
a. prohibits both an assignment of rights and a delegation of duties under the contract.
b. prohibits only a delegation of the delegator’s duty of performance and not the
assignment of rights.
c. renders any subsequent assignment ineffective.
d. Both (a) and (c).
A person who has made a financially unsound contract may be relieved from
performance under the doctrine of commercial impracticability.
The RULPA requires that the limited partnership certificate list the capital contribution
of each general and limited partner.
An accountant who willfully violates Section 11 of the 1933 Securities Act will be
subject to criminal liability.
Joe is a limited partner in a limited partnership. Joe does not have the right to dissolve
the partnership except by decree of a court.
In the banking system, the time for dishonor of a check can vary greatly depending on
the number of banks involved in the collection process.
What is the difference between a valid contract and a void contract?
The U.S. and the government of Mystic broke off diplomatic relations in a dispute over
fishing rights. The U.S. blocked exports to Mystic. Mystic in turn seized and
expropriated the assets of several U.S. companies located within the country. One of the
companies, Continental Coffee, sued the U.S. government and the government of
Mystic charging violation of the U.S. Constitution on the grounds of deprivation of
property without due process of law. How will the company fare in its case against the
U.S.? against Mystic? Explain your answer in detail, providing reasons for your
decision.
An accountant has a duty to comply with court orders, client requests, and Generally
Accepted Auditing Standards with regards to disclosure of a client’s confidential
information.
An “I.O.U.” is not considered a negotiable instrument.
Shareholders have a vested property right resulting from the provisions in the articles of
incorporation and therefore must give approval for any amendments to the articles.
If the parties to a contract stipulate an amount that will be paid in the event of a breach
(a liquidated damages clause), the courts will always enforce it.
By the majority view, a minor need only return any property he has received from the
other party if the minor wishes to disaffirm the contract. He has no duty to return the
property in the same condition in which he received it.
If Sierra orally requests her agent Scott to sell her desk for at least $450, Scott’s
authority to sell the desk for this amount is actual and express.
Unless otherwise agreed, the buyer has the right to inspect the goods before making
payment.
UCC “Election of Remedies” rules would require the aggrieved party to choose one
remedy he wants to pursue and forego the others.
Once a trust is validly created, it is revocable.