Ski Resorts, Inc., wants to add a new run to its facility in a national park on federal
land. For this action, an environmental impact statement is
a. prohibited.
b. required.
c. unnecessary.
d. voluntary.
Wings2Go Corporation fails to hold an organizational meeting. In this circumstance, at
common law Wings2Go is most likely
a. a corporation by estoppel.
b. a de facto corporation.
c. a de jure corporation.
d. ultra vires.
Jack contracts to provide lawn-mowing services to Lee. Jack cannot delegate this duty
a. because it is a personal service contract.
b. without continuing to be liable.
c. without Lee’s consent.
d. without providing lawn-mowing services to Kim.
Mary writes a check drawn on County Bank for $400 “payable to Bill” on May 1. Mary
dies on May 3. Bill presents the check to County Bank on May 5. County Bank
a. may not pay the check.
b. may pay the check.
c. must consult with Mary’s heirs before paying the check.
d. must read Mary’s will before paying the check.
Mona, an accountant, prepares for NuTech Corporation a financial statement that omits
a material fact. The financial statement is included in NuTech’s registration statement,
which Pam reads. Pam buys NuTech stock. Under Section 11 of the Securities Act of
1933, for Mona to be liable for the omission, Pam must show that
a. Pam relied on the omission.
b. Pam suffered a loss on the stock.
c. Pam knew about the omission before making her purchase.
d. the omission had no causal connection to her loss.
Perfect Tone Phones, Inc. is a corporation. Perfect Tone’s implied powers enable it to
a. amend the articles of incorporation.
b. bring a derivative suit.
c. declare dividends.
d. borrow funds, extend credit, and make charitable contributions.
Cody is a partner in Delta Accounting Service. Cody can inspect
a. all of Delta’s books and records.
b. Delta’s books and records only as the firm’s management permits.
c. Delta’s books and records only for a reasonable purpose.
d. Delta’s books and records relating to Cody’s capital contribution only.
Tyler, a citizen of West Virginia, files a suit in a West Virginia state court against
Louisville Sales Corporation, a Kentucky state company that does business in West
Virginia. The court has original jurisdiction, which means that
a. the case is being heard for the first time.
b. the court has a unique method of deciding whether to hear a case.
c. the court has unusual procedural rules.
d. the subject matter of the suit is interesting and new.
Marketing Solutions Inc. promises to employ Niki as a software engineer. In reliance on
the promise, Niki quits her job with Online Ad Company, but Marketing Solutions does
not hire her. Most likely, Marketing Solutions is
a. liable to Niki under the concept of accord and satisfaction.
b. liable to Niki under the doctrine of promissory estoppel.
c. liable to Niki under the preexisting duty rule.
d. not liable to Niki.
Mackenzie, an agent for Lindsay, signs an agreement with Kirk on Lindsay’s behalf but
neglects to tell her that the agreement requires the payment of a certain tax. The
government prosecutes Lindsay for failing to pay the tax. She is
a. liable, because notice to Mackenzie is notice to Lindsay.
b. liable, because notice to Kirk is notice to Lindsay.
c. not liable, because Mackenzie did not tell Lindsay about the tax.
d. not liable, because Kirk did not tell Lindsay about the tax.
Which of the following cannot be registered as a trade name?
a. Peach Blossom, Certified Public Accountant
b. Apples & Oranges, Investment Partnership
c. Banana Republic Clothing, Inc.
d. Strawberries
In Benny v. City Car Dealership, a state supreme court held that a minor could cancel a
contract for the sale of a car. Now a trial court in the same state is deciding Daphne v.
Even Steven Auto Deals, Inc.,, a case with similar facts. Under the doctrine of stare
decisis, the trial court is likely to
a. allow the minor to cancel the contract.
b. disregard the Benny case.
c. order the minor to cancel the contract.
d. require the minor to fulfill the contract.
Rangle contracts with Siena to buy a certain horse for her. Rangle makes a deal with
Timberline Stables, the owner of the horse, and makes a down payment. Siena fails to
pay the rest of the price. Timberline sues Rangle for breach of contract. His right to
hold Siena liable for any damages that he has to pay is the right of
a. avoidance.
b. cooperation.
c. indemnification.
d. reimbursement.
Philomena dies without a will. A court appoints Quigley to handle the probate of
Philomena’s estate. The administrator of the estate is
a. Philomena’s closest blood relative.
b. Philomena.
c. Quigley.
d. the court.
Herb, a computer programmer for Inventory Control Corporation, is arrested in his
employer’s parking lot on suspicion of larceny. Herb must be informed of his right to
a. a trial by jury.
b. punishment.
c. question witnesses.
d. remain silent.
Fresh Seasonal Fruit Company has assets of less than $10 million and fewer than fifty
shareholders. Gourmand Pastries, Inc., has assets of more than $50 million and more
than five hundred shareholders. The Securities Exchange Act of 1934 applies to
a. Fresh Seasonal Fruit and Gourmand Pastries.
b. Fresh Seasonal Fruit only.
c. Gourmand Pastries only.
d. neither Fresh Seasonal Fruit nor Gourmand Pastries.
Dhani, an accountant for Eureka, Inc., learns of undisclosed company plans to market a
new laptop. Dhani buys 1,000 shares of Eureka stock. He reveals the company plans to
Fay, who buys 500 shares. Fay tells Geoff, who tells Hu. Both Geoff and Hu buy 100
shares. They know that Fay got her information from Dhani. When Eureka publicly
announces its new laptop, Dhani, Fay, Geoff, and Hu sell their stock for a profit.
Under the Securities Exchange Act of 1934, Geoff is most likely
a. liable for insider trading.
b. not liable because Geoff did not prevent others from profiting.
c. not liable because Geoff did not solicit information from Dhani.
d. not liable because Geoff does not work for Eureka.
Cow Country Corporation (CCC) sells half of its land to the Double R Ranch. On the
land is a reservoir. In the deed, CCC retains the right to remove a limited amount of
water per day from the reservoir. This right is
a. a leasehold estate.
b. a license.
c. an easement.
d. a profit.
Bayou Development Corporation (BDC) hires Gulfview Brokerage Associates to sell
the condominiums in a building at BDC’s coastal resort. The agency will terminate
a. after the condos have been sold.
b. if the prices of the condos must be reduced to sell them.
c. once BDC obtains insurance to cover the property.
d. when BDC pays Gulfview its first commission.
Lorelei files a suit against Memphis Recording Company. While the suit is pending,
Memphis Recording consolidates with Nashville Music Corporation to form Omni
Productions, Inc. Now, liability in the suit, if any, rests with
a. Omni.
b. Memphis Recording and Nashville Music.
c. Lorelei.
d. no one.
As the trustee of a business trust, Dwight is required to
a. manage the trust and distribute its profits.
b. assume liability for the trust’s debts.
c. draft a written trust agreement.
d. none of the choices.
Growers Mart buys one hundred cases of berries from Hilltop Farms. The parties agree
that the berries will be transported “F.O.B. Hilltop Farms” via Refrigerated Trucking
Company. Refrigerated’s truck and the berries are lost in a fire following an accident.
The loss of the berries is suffered by
a. Growers Mart.
b. Hilltop Farms.
c. Refrigerated Trucking.
d. all of the parties as tenants in common in equal measure.
Gabriella and Esteban are emancipated minors who, after their emancipation, marry
each other. Later, they enter into a contract to buy a condominium. In this sequence of
events, most likely, their minority status
a. terminated on their emancipation.
b. terminated on their marriage.
c. terminated on entering into the contract to buy a condominium.
d. has not yet terminated.
Origami Paper Products Corporation meets all of the requirements to be subject to the
federal employment discrimination laws. These laws restrict the ability of employers to
discriminate against workers on the basis of
a. experience.
b. gender.
c. intelligence.
d. skill.
Plato works for Quirky Squirters, Inc. During work hours, Plato “steals” time, space,
and data on his employer’s computer system to start up his own business, Rowdy
Drenchers. This is
a. burglary.
b. robbery.
c. larceny.
d. no crime.
Cook’s Pantry Appliances, a retail store, must use reasonable care on its premises to
warn its patrons of
a. all risks.
b. hidden risks.
c. obvious risks.
d. no risks.
Consumer Shops, Inc., signs a lease for a storefront owned by Downtown Building
Company. Unlike a purchaser of real property, Consumer Shops
a. acquires only temporary possession of the premises.
b. enjoys exclusive possession of the premises.
c. holds only temporary title to the premises.
d. retains temporary, exclusive possession and title to the premises.
Justin is charged with a crime. He insists that he should have an opportunity to object to
the charges before a “fair, neutral decision maker.” No one can be deprived of “life,
liberty, or property without due process of law” under the
a. Second Amendment.
b. Fourth Amendment.
c. Fifth Amendment.
d. Eighth Amendment.
Olive Grove Enterprises, Inc., completes its registration process and issues a
free-writing prospectus. This tells prospective investors
a. about investing freely.
b. how to write their own prospectus.
c. that they can “freely write their own ticket” to buy Olive’s securities.
d. that they may obtain the prospectus at the SEC’s Web site.
Jo works for Tall Tales Publishing, Inc. The basis for Jo’s contribution under the Federal
Insurance Contribution Act (FICA) is based on her
a. seniority at Tall Tales.
b. annual wage base.
c. special job skills.
d. county of residence.
Jean buys a bike from Mike’s Bike Shop. She wants to make sure that there is a
warranty of title. Jean
a. does not need to do anything because warranties of title arise automatically in most
sales contracts.
b. must request a written warranty of title.
c. must request an oral warranty of title.
d. must request both a written and an oral warranty of title.
Forest & Field Company makes and leases a backhoe to Zac. Due to a defect
attributable to Forest & Field’s negligence, Zac is injured in an accident in which his
neighbor Aaron is also hurt. In a product liability suit based on negligence, Forest &
Field may be liable to
a. Aaron only.
b. no one.
c. Zac and Aaron.
d. Zac only.
All contracts must be in writing to be enforceable.
Quasi contracts are often used by courts, even in cases where there is an actual contract
that covers the area in controversy.
Whether a combination is merger or a consolidation, the rights and liabilities of the
shareholders are the same.
Bowie, a certified public accountant, prepares and certifies Candy Products
Corporation’s financial statements. These statements are included in Candy’s
registration statement filed with the Securities and Exchange Commission before
Candy’s offering of securities. Dona buys a security covered by the registration
statement. Based on this transaction, Dona files a suit against Bowie under Section 11
of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934.
To succeed in the suit, what must Dona prove? Bowie responds that Dona was not in
privity with him and that even if she had been in privity, she cannot prove his lack of
due diligence. Can Bowie prevail on these grounds? Why or why not?
A marketing technique can be a trade secret.
A corporation whose shares are held by relatively few persons is a close corporation.
Failure to live up to a standard of care may be an act or an omission.
Umberto and Tiara, who are married, borrow $110,000 from Sterling Credit Union to
buy a home. The loan is a fixed-rate mortgage at 5.25 percent with a thirty-year term,
subject to an acceleration clause, and secured by the home, which is their principal
residence. When Umberto and Tiara have paid off $10,000 of the mortgagestill owing
$100,000they lose their jobs and stop making payments. Sterling Credit makes
numerous attempts to contact the couple, but they do not respond. Meanwhile, the
market value of their home has declined to $85,000. After six months, Sterling Credit
decides to take steps to recover the unpaid amount of the loan. What are the lender’s
options? Which option seems most likely? Why? What are the steps are involved?
A deceived person must have a justifiable reason for relying on a misrepresentation.
Rulemakingthe formulation of new administrative regulationsis a major function of
Congress, not administrative agencies.
A state law that conflicts with the U.S. Constitution will be deemed unconstitutional.
Harm must be foreseeable to be considered the proximate cause of an injury in
negligence.
A collection agency must include a validation notice whenever it initially contacts a
debtor for payment of a debt.
There is a precise definition of what makes an administrative rule arbitrary and
capricious.
Performance can be accomplished by tender.
Performance that provides a party with most of the benefits of a contract, in spite of a
deviation from the terms, is substantial performance.