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A general partner in a limited partnership believes wrongly that an LLLP has been
created. In such a case, which of the following will apply?
A. He will be considered a limited partner of the limited partnership.
B. He will lose his management powers over the limited partnership.
C. He will have to share profits equally with all other partners.
D. He will have unlimited liability for the obligations of the limited partnership.
In order for a worker to succeed in obtaining a workers' compensation award, the
worker must demonstrate that the:
A. employer was at fault in causing the accident.
B. injury was work-related.
C. worker was not at fault in contributing to the accident.
D. injury was due to a co-worker.
Which of the following agreements will result in the formation of an agency coupled
with an interest?
A. Borrower shall pledge securities to a lender, authorizing the lender to sell the
securities and apply the proceeds to the loan in the event of default.
B. Employee is hired for a period of two years at $40,000 per annum plus 2% of net
sales.
C. Broker is to receive a 5% sales commission out of the proceeds of the sale of a parcel
of land.
D. Attorney is to receive 25% of the plaintiff's recovery for personal injuries.
Tim is a partner at Starland Properties and gives one of Starland's customer lists to Sun
Realty, the firm's leading competitor. In this situation, Tim has violated:
A. the duty to act with apparent authority.
B. the duty to indemnify partners.
C. the duty to account.
D. the duty to maintain confidentiality of partnership information.
_____ means that the principal's rights and liabilities are what they would have been if
the principal had known what the agent knew.
A. Notification
B. Authorization
C. Ratification
D. Imputation
As a result of regulation of fuel additives by the Clean Air Act, _____ was largely
phased out of use as an octane enhancer in gasoline.
A. toluene
B. lead
C. methanol
D. nitrous oxide
A trust that is established in a person's will and that takes effect only upon that person's
death is called a(n):
A. inter vivos trust.
B. spendthrift trust.
C. Totten trust.
D. testamentary trust.
The Supreme Court once denied tax-exempt status to a private university that
discriminated on the basis of race. Which of the following is likely to have influenced
or guided the interpretation of the statute relevant to this case?
A. Maxims
B. Precedents
C. General public purposes
D. Standing to sue
The sex discrimination test is an example of the:
A. rational basis test.
B. intermediate scrutiny.
C. full strict scrutiny test.
D. due process test.
The Clean Water Act:
A. gives the federal government the primary responsibility for regulating the country's
waters.
B. lacks provisions for private action by affected citizens or groups of citizens.
C. sets up a permit system for dredging and filling activities in wetlands.
D. allows discharge only of domestic sewage to a publicly owned treatment works.
"White-collar crime" is the term used to describe a wide variety of offenses committed
by:
A. the average working class.
B. poor Americans.
C. businesspersons.
D. juveniles.
Professionals are sued under securities law usually by:
A. clients.
B. brokers.
C. partners.
D. third parties.
Which of the following characterizes the effect of incapacity caused by mental
impairment?
A. A person formerly incapacitated by mental impairment cannot ratify a contract if
he/she regains his capacity.
B. If a contract is found to be voidable on the ground of mental impairment, the person
who lacked capacity at the time the contract was made has the right to disaffirm the
contract.
C. If a court has found a person mentally incompetent after holding a hearing on his
mental capacity and has appointed a guardian for him, the contract is considered
voidable.
D. The contracts of people who are suffering from a mental defect at the time of
contracting are usually considered to be void.
Section 5 of the FTC Act normally is NOT violated when sellers make:
A. exaggerated sales talk in their advertisements.
B. deceptive omissions from their advertisements.
C. false or misleading claims of an implied nature.
D. claims regarding taste or smell of their products.
Performance under a contract must be within a reasonable time when:
A. the value of the contract is high.
B. one of the parties is a government agency.
C. a specific time is implied in the contract.
D. no time for performance is expressly stated in the contract.
Which of the following situations will justify the inference that a price-fixing
conspiracy exists?
A. The defendant's parallel pricing behavior stemmed from an implied agreement.
B. Independent business decisions by the defendant led to price parallelism.
C. The defendant was unwilling to relinquish market share by engaging in price
competition.
D. The evidence only indicates pure conscious price parallelism by the defendant.
Assume that a state, acting through the appropriate county prosecutor, plans to initiate a
felony prosecution against Joe Beck. Further assume that the state is among those in
which felony defendants may be charged by either of the two methods discussed in the
text. Which of the following is an accurate statement?
A. If a preliminary hearing is held and the judge conducting it concludes that there is
probable cause to believe that Beck committed the charged felony, the judge (who
presided over the preliminary hearing) will find Beck guilty and sentence him
accordingly.
B. If the prosecutor decides to follow the information route to initiating the felony
prosecution, Beck is entitled to insist that a grand jury be convened to determine
whether he should be prosecuted by the state.
C. If a preliminary hearing is held, the state must prove Beck's guilt beyond a
reasonable doubt in order to carry its burden of proof at the preliminary hearing stage.
D. If a preliminary hearing is held and the magistrate conducting it concludes that there
is probable cause to believe that Beck committed the charged felony, the magistrate
binds over the defendant for trial in the appropriate court.
Which of the following do a certified check and a cashier's check have in common?
A. The bank is primarily liable on each.
B. The bank is secondarily liable on each.
C. Both are drawn by the bank on itself.
D. Technically, the bank is not liable to a holder of either kind of check.
You need to drive to Spokane to pick up your parents. Your car is being repaired, and is
therefore unavailable. You ask your good friend Ed if he will lend you his car. You take
Ed's car and drive to Spokane. This is:
A. a mutual benefit bailment.
B. a bailment exclusively for the benefit of the bailee.
C. a bailment exclusively for the benefit of the bailor.
D. no bailment because no consideration was paid to Ed.
What is the main federal body concerned with the safety of consumer products?
A. Consumer Product Safety Commission (CPSC)
B. International Product Council (IPC)
C. Federal Consumer Watchdog (FCW)
D. Internal Revenue Service (IRS)
Several firms within an industry are involved in manufacturing a harmful product. It is
impossible to prove which firm produced the product and caused injury. Identify the
type of liability that would arise in these circumstances.
A. Industrywide Liability
B. Strict Liability
C. No-privity determination
D. Breach of expresses warranty
_____ include any reasonable expenses or charges that the buyer has to pay in obtaining
substitute goods in case of a breach of contract on the part of the seller.
A. Incidental damages
B. Unconscionable damages
C. Penalties
D. Consequential damages
Which of the following would receive stricter scrutiny than the rational basis test?
A. Right to own a business
B. Right of teenagers to congregate
C. Classifications based on gender
D. Right to advertise
Toby and Roy are car dealers; Toby makes a deal with Roy to sell a 1978 Buick.
However, they failed to reach any agreement regarding the price of the car and decided
to leave the matter to a future date to be decided once Toby delivers the car. Which of
the following is true about this deal?
A. According to the Code, a reasonable price will be put on delivery.
B. According to the common law, this contract is definite and legal.
C. According to the common law, Roy can sue Toby.
D. According to the Code, it is an illegal contract due to absence of intent.
An uncertain future event, the occurrence of which is necessary for the existence of a
contractual obligation is called:
A. a condition precedent
B. a condition subsequent
C. a concurrent condition
D. a constructive condition
Jim, the CEO of Maple Inc., had to sign a few papers that Amanda, his secretary,
presented to him. Unknown to Jim, Amanda had carefully slipped in a contract for the
sale of Jim's home to her in the papers which he signed. If Amanda seeks to enforce the
contract, Jim's best defense to have the contract declared void would be:
A. innocent misrepresentation.
B. fraud in the execution.
C. mistake.
D. duress.
If a stockholder sues a CPA for common law fraud based on false statements contained
in the financial statements audited by the CPA, which of the following, if present,
would be the CPA's best defense?
A. The stockholder lacked privity to sue.
B. The false statements were immaterial.
C. The CPA did not financially benefit from the alleged fraud.
D. The client contributed to the negligence.
King sent Foster, a real estate developer, a signed offer to sell a specified parcel of land
to Foster for $200,000. King, an engineer, had inherited the land. Foster telephoned
King the same day that he received his letter and accepted the offer. Which of the
following statements concerning the contract is correct under the statute of frauds?
A. No contract was formed because Foster did not sign the offer.
B. No contract was formed because King is not a merchant.
C. A contract was formed, although it would be enforceable only against King.
D. A contract was formed but it is unenforceable.
X and Y have a contract which obligated X to sell Y 100 boxes of screws for $100. The
parties orally modify the contract so that X will sell Y the same 100 boxes of screws for
$125. The second agreement is:
A. binding because it is due to unforeseeable situation.
B. binding by virtue of being mutually agreed on.
C. not binding because it is an outputs contract.
D. not binding due to the promise of performing a preexisting legal obligation.
Who has the primary responsibility for preventing, reducing, and eliminating water
pollution under the Clean Water Act of 1972?
A. The federal government
B. State government
C. Local (county) governments
D. Businesses
