If Terry makes a tender offer to the owners of Pizza Village’s registered stock, he must
file a statement with the SEC if he:
a. owns 1% of Pizza Village stock.
b. will, after the acquisition, own 5% of all Pizza Village stock.
c. will, after the acquisition, own 5% of one class of Pizza Village stock.
d. will own more than 3% of the stock in all classes.
A corporation is considered a citizen under the Fourteenth Amendment provision that,
“No state shall make or enforce any law which shall abridge the privileges or
immunities of citizens of the United States.
a. True
b. False
What is the effect of a payor bank’s dishonor of a check?
a. It returns the check.
b. The provisional credits must be reversed.
c. The customer who deposited the item for collection must cover the item and seek
recovery from the drawer or indorsers.
d. All of these will occur.
Ty threatened to have Lisas father prosecuted for embezzlement unless Lisa signed a
contract to pay Ty 12 monthly payments of $500 each to purchase his car. Lisa cannot
avoid the contract based on duress since the threat was toward Lisas father rather than
Lisa herself.
a. True
b. False
A corporation owned by one person is treated under the law as separate from that
person.
a. True
b. False
Article 2 of the UCC lacks relevance in modern society because it, including its
amendments, does not provide rules related to electronic commerce.
a. True
b. False
A power given as security creates a relationship of agency and actual authority.
a. True
b. False
Intentional harm to property includes the torts of:
a. trespass to real and personal property.
b. nuisance.
c. conversion.
d. Each of these.
A decision of the Supreme Court of Washington would always be binding on:
a. a federal district court in Washington.
b. a state trial court in Washington.
c. the U.S. Court of Appeals for the 9th Circuit.
d. All of these.
Res ipsa loquitur means “the thing speaks for itself” and it permits the jury to infer
negligent conduct and causation from the mere occurrence of certain types of events.
a. True
b. False
David, a partner in the Speedy Delivery partnership, negligently drove his delivery
truck onto the curb during a rush-hour package delivery. Marlene was injured. Against
whom can Marlene collect?
a. Only David.
b. Only the other partners.
c. Speedy Delivery Partnership.
d. Any partner.
e. Both Speedy Delivery Partnership and any partner.
The amount of liquidated damages included in a contract that would be upheld by a
court:
a. must be reasonable in light of the inconveniences or lack of feasibility of obtaining
an adequate remedy.
b. may be so high as to be punitive to the breaching party.
c. may be regarded as a penalty.
d. All of these.
e. None of these.
Winding up involves all but which one of the following?
a. Selling assets for cash.
b. Collecting debts owed to the partnership.
c. Taking orders for business.
d. Paying creditors.
The risk of loss for ‘sale or return” is the same as for a sale “on approval.”
a. True
b. False
Which of the following need NOT be included in the certificate filed by a limited
partnership?
a. The name of the limited partnership.
b. The name and address of the agent for service of process.
c. The names and addresses of each of the limited partners.
d. The name and business address of each general partner.
A __________ is a written, formal appointment of an agent.
a. fiduciary
b. revocation
c. power of attorney
d. rescission
The obligor need not receive notice for an assignment to be valid.
a. True
b. False
A criminal defendant may be convicted by a preponderance of the evidence.
a. True
b. False
To protect a shareholder’s interest in the corporation, the law provides shareholders with
certain enforcement rights.
a. True
b. False
The Equal Pay Act requires that employees of Native American ancestry and employees
of Italian ancestry be paid equally for equal work.
a. True
b. False
Securities that are exempt from registration under the federal securities laws include:
a. securities of domestic banks.
b. annuity contracts issued by state-regulated insurance companies.
c. bonds issued by a city.
d. All of these are exempt.
Infliction of emotional distress occurs when a person by extreme and outrageous
conduct intentionally or recklessly causes severe emotional distress to another person.
a. True
b. False
Predictions, opinions, and promissory statements ordinarily do not constitute bases of
fraud.
a. True
b. False
Southern Furniture Co. hired Chuck to drive a company truck and deliver furniture.
Chuck had a spotless driving record and did well on his driving test. Belinda ordered a
chair from Southern Furniture Co. and arranged for its delivery on her lunch hour.
Belinda was at home when Chuck delivered the chair. After delivering the chair, Chuck
brutally raped Belinda, causing severe physical and psychological injuries. Chuck was
convicted in the criminal courts. During the trial it was revealed that Chuck had been in
a mental institution for the criminally insane for two years because he had brutally
assaulted his mother and other women. He also had a lengthy criminal rap sheet
involving theft crimes. Belinda sought compensation for her physical and psychological
injuries from both Chuck and Southern Furniture Co. in civil court. Discuss what the
probable outcome of this case would be with regard to the issues of: (a) respondeat
superior and (b) general tort liability of principals for the unauthorized acts of their
agents.
Which of the following would NOT constitute scienter?
a. Negligent performance of a substandard audit.
b. Actual knowledge of fraud.
c. Reckless disregard for truth.
d. Being paid to conceal fraud.
Under the Code an oral contract for specially manufactured goods costing $500 is
enforceable even if the seller has not begun their manufacture.
a. True
b. False
A promisees consideration is effective only if given directly to the promisor by the
promisee.
a. True
b. False
A corporation is considered to be a person within the meaning of the Fifth Amendment
protection against self-incrimination.
a. True
b. False
The doctrine declaring that the mortgagee’s interest in the property is limited to the
amount of the outstanding obligation is known as:
a. adverse possession.
b. the title theory.
c. the lien theory.
d. equity of redemption.
Dividends are ordinarily paid in cash, but may be paid in property.
a. True
b. False
If a copyright is willfully infringed, the owner may ask for and receive which of the
following remedies?
a. Rescission and restitution.
b. Punitive damages.
c. Injunction.
d. All of these.
In most states, eminent domain would permit taking of privately owned land for all the
following purposes except:
a. constructing a railroad bridge over a river.
b. building senior citizens’ home.
c. building a discount store.
d. building a post office.
The international organization which seeks to stabilize currency exchange is the:
a. United Nations Exchange Branch.
b. International Court of Justice.
c. United States Treasury.
d. International Monetary Fund.
If the parties to a contract stipulate an amount that will be paid in the event of a breach,
the courts will always enforce it.
a. True
b. False
Which of the following is correct regarding a limited partnership?
a. The general partner must make a cash or property contribution.
b. It can be created in such a way that the general partner has limited liability.
c. It can only be created pursuant to statutory provisions.
d. Limited partners are unable to vote on the incurrence of debt other than in the
ordinary course of business under the safe harbor provisions of the RULPA.