Why have checks and balances been built into the U.S. Constitution?
A) to keep a check on the number and frequency of amendments made to the
Constitution
B) to ensure the judiciary is not biased or corrupt
C) to prevent any one of the three branches of the government from becoming too
powerful
D) to ensure that people of all races and ethnicities are uniformly represented
David, the CEO of Nivera Furnishings, stealthily utilizes confidential patents and
processes of the company to start a similar furnishing company that grows to be
Nivera’s biggest rival in the market. In terms of the duty of loyalty, David’s act is an
example of ________.
A) violating a voting trust
B) piercing the corporate veil
C) competing with the corporation
D) breaking the business judgment rule
Which of the following is a criterion for a general partnership?
A) nonprofit motive
B) involuntary association
C) nonparticipatory nature
D) co-ownership
The General Assembly of the United Nations is ________.
A) a collection of autonomous agencies that deal with the socio-economic problems of
third-world countries
B) the legislative body of the United Nation that is composed of all UN members
C) a group of 15 member nations that is primarily responsible for maintaining
international peace and security
D) the staff of persons that administers the day-to-day operations of the UN
________ title is a situation in which a thief acquires no title to goods he or she steals.
A) Void
B) Voidable
C) Entrusted
D) Valid
What is the significance of the age of majority in relation to legal contracts?
A) People below the age of majority can directly enter into lawful contracts.
B) Mentally incompetent persons need to achieve the age of majority in order to enter
into a legal contract.
C) It is the age above which people of capacity can enter into a legal contract.
D) Minors who have entered the age of majority require his or her parents or guardian’s
consent to enter into a legal contract with adults.
Which of the following statements is true of the Lilly Ledbetter Fair Pay Act of 2009?
A) It provides that each discriminatory pay decision restarts the statutory 180-day
clock.
B) It provides that a court can award back pay for up to five years preceding the filing
of the claim.
C) It directs the court to issue a right to sue letter if the EEOC chooses not to bring an
action against an employer.
D) It forbids employment discrimination because of pregnancy, childbirth, or related
medical conditions.
Where does the FTC franchise notice appear?
A) in the licensing agreement between the franchisor and franchise
B) as a separate clause in the franchise agreement
C) on the cover of a franchisor’s required disclosure statement
D) on the cover of a franchisee’s required disclosure statement
________ is a moral theory which asserts that fairness is the essence of justice.
A) Kantian ethics
B) moral relativism
C) utilitarianism
D) Rawls’s social justice theory
A(n) ________ refers to the purchase by a target corporation of its stock from an actual
or perceived tender offeror at a premium.
A) proxy
B) appraisal
C) flip-over rights plan
D) greenmail
“Growth+,” a health drink for teenagers, was advertised with the claim that regular
consumption of the drink over a two-month period would lead to a four-inch rise in
height. This claim was not grounded in laboratory research or even seen in most of its
users. This act of making scientifically unsubstantiated health claims about a product is
a violation of the ________.
A) Health Care Reform Act
B) Nutrition Labeling and Education Act
C) Consumer Product Safety Act
D) Patient Protection and Affordable Care Act
Which of the following statements best indicates how chancery courts were different
from law courts?
A) Chancery courts emphasized developing merchant laws rather than laws for the
common citizen.
B) Chancery courts inquired into the merits of the case rather than emphasize legal
procedures.
C) Chancery courts emphasized a standard set of remedies across different cases rather
than provide equitable remedies.
D) Chancery courts had lower precedence level over legal decisions than the law courts.
In which of the following offers is the seller forbidden from withdrawing goods from
sale?
A) revocation
B) reward
C) auction with reserve
D) auction without reserve
Redstone Enterprises wishes to take over Artemia Industries. To do this, Redstone
offers Artemia’s shareholders a hostile tender offer. Which of the following resulting
scenarios is an example of a reverse tender offer?
A) Artemia creates an employee stock ownership plan that aims to sabotage Redstone’s
shareholders.
B) Artemia merges with friendly parties that protect it from Redstone’s hostile takeover
plans.
C) Artemia offers a tender offer to Redstone’s shareholders in order to buy Redstone.
D) Artemia issues a tender offer to its own shareholders to relieve them of the collateral
damage resulting from the takeover.
Which of the following is true of acceptance of a contract?
A) Bilateral contracts can be accepted only by an offeree’s performance of the required
act.
B) Unilateral contracts can be accepted only by an offeror who promises to perform the
requested act.
C) Bilateral contracts can be accepted by an offeror who promises to perform the
requested act.
D) Unilateral contracts can be accepted only by the offeree’s performance of the
required act.
Which of the following sources outside a contract is considered first while interpreting
the express terms of a written contract?
A) course of dealing
B) course of performance
C) prior oral or written agreements
D) usage of trade
An agency that occurs when a principal and an agent categorically agree to enter into an
agency agreement with each other is known as an ________.
A) agency by ratification
B) implied agency
C) apparent agency
D) express agency
A check that has been outstanding for over six months is considered ________.
A) honored
B) stale
C) indorsed
D) certified
Ubiquitous Enterprises is a franchisee of HotPan chain of restaurants. One afternoon,
Linda, an employee of a HotPan restaurant owned by the franchisee is mopping the
floor. Gary, a customer who enters the restaurant is talking on his cell phone and does
not notice Linda mopping the floor. He slips on the wet floor while walking to the
counter and is injured. Who among the following is liable for Gary’s injuries?
A) HotPan, for not providing a “Caution: Wet Floor!” sign.
B) Ubiquitous Enterprises, for not having its own “Caution” sign.
C) Linda, for not alerting Gary.
D) Gary, for not noticing that the floor was wet.
The term ________ refers to a type of sale in which there is no actual sale unless and
until the buyer accepts the goods.
A) consignment
B) sale or return contract
C) sale on approval
D) option contract
Most public accounting firms in the United States are organized and operated as
________.
A) limited liability partnerships
B) corporations
C) cooperatives
D) sole traders
Which of the following acceptances is allowed for an offer under common law?
A) mirror image rule acceptance
B) open term acceptance
C) accommodation
D) additional terms acceptance
Timothy is owed $1,000 by Greg, who gives him a check to repay the amount. When
Timothy presents it at Greg’s bank five months later, however, the bank refuses to pay
the check. The bank was willing to act in good faith, but is not liable for the dishonor of
the check. Which of the following, if true, would explain the dishonor of the check by
Greg’s bank?
A) Timothy filled in his name as the payee on the check as Greg had forgotten to do so.
B) Greg had not filled in the amount, so Timothy duly wrote $1,000 on the check before
he presented it to the bank.
C) Greg had issued a stop-payment order on the check immediately after giving it to
Timothy.
D) Greg had postdated the check four months from the date of giving the check to
Timothy.
Who among the following is exempt from federal minimum wage requirement?
A) Kelly, a sales executive at a pharmacy
B) John, a waiter by day and a guitar teacher by night
C) Taylor, a software applications developer
D) Orlando, a telemarketer
The process by which heated water or material is discharged into waterways upsetting
the ecological balance and decreasing the oxygen content is defined as ________.
A) land pollution
B) radioactive pollution
C) wetland pollution
D) thermal pollution
________ is a situation in which an agent does something during the course of his or
her employment to further his or her own interests rather than the principal’s.
A) Frolic and detour
B) Coming and going rule
C) Dual-purpose mission
D) Vicarious mission
Who is the drawee of a check?
A) The drawer of the check is also its drawee.
B) The financial institution where the drawer has an account.
C) The party to whom a check is written and who has a checking account with the same
financial institution as the drawer.
D) The party who signs the check.
A consignment deal would be an example of a(n) ________.
A) unconditional contract
B) sale or return contract
C) sale or approval contract
D) unequivocal contract
Which of the following statements is true of the Tax Reform Act of 1976?
A) It imposes fines and imprisonment for an individual for aiding and assisting in the
preparation of a false tax return.
B) An accountant who negligently understates a client’s tax liability can be imprisoned
under this act.
C) It provides for both criminal and civil penalties for securities fraud.
D) It makes it a criminal offense for any person who willfully makes any false
statements in a registration statement.
A ________ is an example of a promise to pay.
A) lease
B) certificate of deposit
C) draft
D) check
Roger, a certified lawyer, borrows money from Jax to start a business. He executes a
promissory note stating that he will pay the money back within the next five years.
However, Roger also requests for a specific clause to be added that will allow faster
repayment of the loan if he inherits any money within the five years. In this scenario,
Roger is requesting for a(n) ________ clause.
A) prepayment
B) acceleration
C) extension
D) forestallment
The decision made by an administrative law judge is issued in the form of a(n)
________.
A) verdict
B) judgment
C) order
D) decree
A(n) ________ is a warranty that applies to food or drink consumed on or off the
premises of restaurants, grocery stores, fast-food outlets, and vending machines.
A) statement of opinion
B) express warranty
C) explicit guarantee
D) implied warranty of fitness for human consumption
Which of the following statements is true of exculpatory clauses?
A) They can be used in situations involving intentional torts.
B) They do not have to be reciprocal.
C) They cannot be found in parking lot tickets or service contracts.
D) They cannot relieve a party of liability for ordinary negligence.