Bill bets his friend $100 that the Patriots will win the next Super Bowl. This is an:
a. unconscionable contract and therefore illegal.
b. illegal wagering agreement.
c. agreement to obstruct justice and therefore illegal.
d. illegal restraint of trade.
After a breach by the seller, buyer may replevy the goods that have been identified to
the contract if:
a. he acts within 30 days.
b. he cannot, after a reasonable effort, buy replacement goods.
c. the seller is insolvent.
d. the goods have an unsatisfied security interest.
The Securities Enforcement Remedies and Penny Stock Reform Act of 1990 granted
the SEC power:
a. to issue cease-and-desist orders.
b. to impose civil penalties up to $1,000,000.
c. to bring civil actions for specified violations of the 1934 Act against aiders and
abettors.
d. All of the above.
Sam, a student, goes to the movies one Friday evening. The movie is boring and Sam
falls asleep. At 2 a.m., the security guard locks the building. Sam awakens the next
morning when the cleaning crew opens the door. Sam can sue for false imprisonment.
In 1976, RCRA was enacted by Congress:
a. to provide a comprehensive scheme of treatment for hazardous solid waste.
b. and it requires the EPA to establish a manifest system to be used by generators of
hazardous waste.
c. to give states the primary responsibility for hazardous waste.
d. Both (a) and (b).
e. Both (b) and (c).
Roberts, Smith, and Tomas have been partners for ten years. The partners, however, are
now collecting debts, converting assets to cash, paying creditors, and distributing
remaining assets to each partner. Roberts, Smith, and Tomas are engaged in:
a. dissolution.
b. marshaling assets.
c. reformation.
d. winding up.
Which of the following best expresses the policy behind the Truth-in-Lending Act?
a. To help borrowers by requiring lenders to charge a “reasonable” rate of interest as
determined by the Federal Reserve Board.
b. To help small business by prohibiting lenders from using, as collateral for secured
loans, a business’s most important assets.
c. To help debtors for loans for personal, family, household or agricultural purposes to
be armed with the necessary information on a loan to better bargain for credit and to
choose the creditor with the best terms.
d. To help lenders by permitting them to investigate a person’s credit history without
having to worry about state libel laws.
Implied warranties under the Code:
a. may arise from course of dealing or usage of trade.
b. are a result of specific language in the sales contract.
c. continue the common law rule of caveat emptor.
d. are intended to protect the seller rather than the buyer.
Appraisal rights:
a. belong to dissident shareholders.
b. can be exercised by a target company any time before acquisition.
c. allow a target company to get a fair valuation of its assets before sale.
d. always give all shareholders the fair market value of their shares.
Which of the following would not help a surety defend himself from payment of a debt?
a. There was no consideration for the surety agreement.
b. There was a modification of the underlying contract.
c. The creditor knew the loan was risky and did not dissolve it.
d. Two of the above, (a) and (b).
If dividends are not declared for five years, but the company has accumulated earnings
each year, the shareholders may:
a. petition the court of law for redress.
b. override the board with a two-thirds vote.
c. ask for an injunction requiring a dividend to be declared.
d. do nothing but sell their stock.
When is a buyer deemed to have accepted goods that are delivered pursuant to a
contract?
a. Through a failure to reject after he has had a reasonable opportunity to inspect them
b. Immediately upon delivery
c. Only by conduct that shows the buyer’s willingness to become owner of the goods
d. Only after an express acceptance
The Clayton Act regulates all but which of the following?
a. Price discrimination
b. Tying contracts and mergers
c. Exclusive dealing by labor organizations
d. Interlocking directorates
Carolyn, a cashier at Tops Supermarkets, may cash checks for up to $20 over a
purchase amount. A friend needs money for a dress, so Carolyn cashes a check for $50
with no purchase. If the check bounces, Carolyn is:
a. liable because she violated her duty of obedience.
b. liable because she breached her duty to inform.
c. not liable since she has apparent authority to take the check.
d. not liable unless she knew her friend did not have the money in the bank.
The Sherman Act:
a. prohibits contracts and combinations in restraint of trade.
b. prohibits conspiracies in restraint of trade.
c. proscribes monopolization and any attempts to monopolize.
d. All of the above
In determining whether an item is a fixture, which of the following will be considered?
a. How it is attached to the building or land
b. Whether the item can be removed without harm to the building
c. Whether the item is usually included in that type of real estate
d. Both whether the item can be removed without harm and whether the item is usually
included in that type of real estate.
e. All of the above factors may be considered.
An instrument contains the following language: “Harold T. Stone as President hereby
promises to pay $12,348 to the order of Joe Jones Furniture for office equipment for
Redkenn Corporation, payable from its corporate assets. (Signed) Harold T. Stone as
President, Redkenn Corporation.” Would the instrument be negotiable?
a. No, because the promise refers to another contract
b. No, because its payment is limited to a particular fund
c. Yes, because it meets all the requirements of a negotiable instrument
d. Yes, because it is unequivocal
Which of the following would prevent the holder of an instrument from asserting holder
in due course status?
a. An executory promise as value
b. Knowledge that the instrument is overdue
c. Being the payee on a check
d. Both (a) and (b)
Which of the following is found in the Eighth Amendment to the U.S. Constitution?
a. Protection from excessive bail
b. A prohibition against double jeopardy
c. A prohibition against cruel and unusual punishment
d. Both (a) and (c) above.
Sexual harassment:
a. includes unwelcome sexual advances or requests for sexual favors when submission
is implicitly a condition of employment.
b. is less serious than and may not constitute illegal sexual discrimination in violation of
Title VII.
c. may not be charged against an employer who has no knowledge of or reason to know
of a supervisor’s harassing action against a subordinate employee.
d. All of the above.
Under state law in many states and under the FTC rules and the federal Consumer
Credit Protection Act, a contract solicited in a consumer’s home may be canceled:
a. within 10 days by either party.
b. within 10 days by the consumer.
c. within three days by the consumer.
d. within 20 days by either party.
The principal legal duties imposed upon partners in their relations with one another
include:
a. the fiduciary duty or the duty of loyalty.
b. the duty to compensate other partners for their time and efforts spent on partnership
business.
c. a duty to devote full time and expertise to the partnership.
d. All of the above.
Which of the following is true regarding an agent who is acting for an undisclosed
principal?
a. The agent with actual authority will bind both himself and the principal on most
contracts.
b. The third party will never be bound in a contract with the principal.
c. An undisclosed principal will bind only himself and not the agent.
d. Failure to disclose the name of the principal is a form of fraud.
James offers to sell four acres of land to Jennifer for $8,000 and further offers to keep
the offer open for one month if Jennifer will pay him $100 for the privilege. Jennifer
pays James $100. Which statement describes the payment of $100?
a. An implied in fact contract has been formed.
b. A unilateral contract has been formed.
c. This is a formal contract.
d. This is an option contract.
Tom tries to sell his classic car to Victoria for $12,000. Tom tells Victoria, “I paid
$12,000 for the car in 1978 and it’s worth twice that today.” Tom really paid $8,000 for
the car in 1978. If Victoria buys the car, basing her decision on Tom’s statement, which
of the following correctly states the situation?
a. Tom’s statements amount to puffing only.
b. Tom’s statements provide grounds to set the contract aside.
c. Tom’s statements are actionable only if negligently made.
d. Tom’s statements amount to fraud in the execution.
Which of the following will terminate an agency coupled with an interest?
a. The death of the principal
b. The bankruptcy of the principal
c. The incapacity of the principal
d. All of the above will terminate such an agency.
e. None of the above will terminate such an agency.
The ICJ is:
a. the Internal Court of Justice of the U.N. to deal with disputes within the United
Nations organization.
b. a U.S. Court created specifically to deal with international contracts.
c. the judicial branch of the United Nations, having voluntary jurisdiction over nations.
d. one of the many Regional Trade Communities.
A power of avoidance held by a party may be lost if:
a. the contract is affirmed.
b. there are unreasonable delays in exercising the power.
c. the rights of third parties intervene.
d. All of the above.
In which of the following situations will the inference of the existence of a partnership
be drawn from the receipt of profits of a business?
a. Where payments of a debt are made to a creditor in installments from the profits of
the partnership
b. Where wages are paid to an employee who is not also an owner
c. Where an annuity is paid to the widow of a deceased partner from partnership profits
d. Because the receipt of a share of the profits of a business is prima facie evidence of
one’s being a partner, the creditor, the employee, and the widow in the above situations
will all be presumed to be partners
e. Neither the creditor, the employee, nor the widow in the above situations will be
considered a partner under the guidelines in the RUPA.
Which of the following may transfer title to land?
a. Deed
b. Will, or by the law of descent upon the death of the owner
c. Open, continuous, and adverse possession by a nonowner for a statutorily prescribed
period of years
d. All of the above
Max pressured Madeline to cosign his car loan, telling her he would otherwise reveal
secrets about her that would taint her reputation for honesty. When Max defaults and
the creditor tries to collect from Madeline, she:
a. must pay since duress will not be a defense.
b. must pay because she voluntarily agreed to pay.
c. does not have to pay since she did not really assent.
d. does not have to pay because there was no consideration.
The Wall Street Reform and Consumer Protection Act of 2010:
a. removes the SEC’s power to bring enforcement actions under the 1933 Act against
aiders and abettors.
b. amends the 1933 and 1934 Acts to allow recklessness as well as knowledge to satisfy
the mental state required for the SEC to bring aiding and abetting cases.
c. amends the 1933 and 1934 Acts to allow negligence to satisfy the mental state
required for the SEC to bring aiding and abetting cases.
d. sets national standards for securities class action lawsuits involving nationally traded
securities.
A shareholder of N Corporation dissents to the corporation’s merger with J Corporation.
If the appraisal remedy is granted, the shareholders will be paid the:
a. par value of their shares.
b. stated value of their shares.
c. fair market value of their shares.
d. accounting book value of their shares.
The way parties usually show mutual assent is by:
a. an offer by words or conduct and an acceptance by words or conduct.
b. a proposal in words and an acceptance in words.
c. an act exchanged for an act.
d. an offer and a counteroffer.
If a buyer accepts part of a shipment and rejects part of a shipment, he must pay for the
items he keeps at the contract rate.
Unless otherwise provided in the LLC’s operating agreement, a member may assign his
financial interest in the LLC without dissolving the LLC.
A corporation may not be a partner in a partnership.
In a suretyship, the creditor’s rights against the principal debtor are determined
primarily by the contract between them.
A warranty deed by Arthur to Bob includes Arthur’s promise that he will be liable to
Bob for any defects in title.
A corporate bond creates a debtor-creditor relationship between the corporation and the
holder of the security.
In a warranty action, the seller has the burden of proving defenses based on the buyer’s
conduct.
The European Community was formed through a merger between the Common Market,
the European Coal and Steel Community, and the European Atomic Energy
Community.
Under the common law, a partnership is generally considered to be a legal entity rather
than an aggregate of individuals.
Both negotiable instruments and nonnegotiable undertakings are transferable by
assignment and can result in the transferee’s becoming a holder.
No copyright protection is available to protect mask works embodied in a
semiconductor chip product.
Article 2A, in a provision analogous to Article 2’s warranty of title provision, protects
the lessee’s right to possession and use of the goods from claims of other parties arising
from an act or omission of the lessor.
Lack of consideration is the basic distinction between a gift and a sale.
The statute of frauds requires all contracts that can be fully performed within one year
of their making to be in writing or proper electronic form.
The suretyship provision rule within the statute of frauds applies to cases involving one
party’s promising to perform the duty of another party to yet a third party.
The CISG does not apply to sales of goods for personal, family, or household use.
A debtor must sign a written security agreement for a pledge used to secure a loan.
If Tom and Tim are joint tenants, they each own a specific half of the property.