A surety has a right of exoneration.
Straight voting permits a single holder of more than 30 percent of the shares of a
corporation to dominate the management of the corporation.
The Fourteenth Amendment’s equal protection guarantee has been made applicable to
federal government action through incorporation of it within the Fifth Amendment’s
Due Process Clause.
Not every promise is legal enforceable.
Punitive damages are awarded to compensate for the losses a person has suffered.
Generally, purchases of farm property are financed through real estate mortgage.
One of the kinds of property that is exempt from bankruptcy under Chapter 7’s federal
exemptions is one’s interest (not to exceed $3,675 in value) in one motor vehicle.
Under the most modern revision to Article 3, a depositary bank cannot become a holder
of a check that is deposited by a customer without an indorsement.
Generally speaking, the UCC’s rules for the definiteness of an offer make it easier to
form a contract than traditional common law rules.
Threats to institute legal actions cannot be considered improper threats that constitute
duress.
If an individual can foresee that his/her actions will cause a risk of harm to another, then
the individual has a duty to protect that other person from harm.
If an insurance applicant sustains losses after submission of the application but before
acceptance by the insurer, the rule in most states is that the insurer must nevertheless
cover the losses.
An individual who was intoxicated when they signed a contract can escape the contract.
The “ends” component of a means-ends test specifies how significant a social purpose
must be in order to justify the restriction of a right.
The Fair Housing Act prohibits housing discrimination on the basis of race.
Basis-of-the-bargain damages are almost always successfully awarded in tort cases.
The Restatements are considered binding laws and are promulgated by the American
Law Institute.
The partnership rules of dissociation and dissolution apply to joint ventures.
Copyrights and patents cannot last forever and only have limited legal lengths.
When there is a conflict on the amount on a check with the printed and the handwritten
terms then the handwritten terms will prevails.
Directors should be shareholders of the corporation on whose board they serve.
An easement by necessity is created when passage through one parcel of land is
necessary to access another parcel of land.
The reduced sales of Martha Stewart branded goods at K-Mart after she was accused of
insider trading is an example of the strength of the profit maximization theory.
Respondeat superior makes a principal liable for an employee’s negligence but not for
her intentional torts.
The directors and officers of a corporation need to be its shareholders.
Where an offer stipulates a certain means of acceptance, the offeree’s acceptance is
effective upon dispatch even if it uses means other than those specified in the offer.
Barks and Paws partnership is in the business of selling pit bull dogs. After operating
the partnership for one year, the state outlawed the breeding and sales of pit bulls.
Assuming this is the only activity of the partnership, dissolution of the partnership will
be required.
The “fourth branch” of government is not bound by basic constitutional guarantees such
as due process, equal protection, and freedom of speech, just as the three traditional
branches are.
Losses of the business allocated to a limited partner in a limited partnership or an LLLP
offset his income from any other sources.
The two easiest ways to freeze out minority shareholders are the freeze-out acquisition
and the share split.
Individuals in a valid general partnership are not personally liable for the actions of the
business.
As in a criminal case, a defendant in a civil case may not be compelled by the plaintiff
to testify.
The preconstruction review process required under the Clean Air Act applies to new
facilities as well as existing facilities that undergo modifications.
The state of Delaware has adopted business combination moratorium statutes to deter
tender offers from being made.
If the parties make an agreement that is partly printed and partly handwritten, the
handwritten provisions prevail over the printed provisions in case of a conflict between
them.
The agent’s duty not to use or disclose confidential information about the principal’s
business continues after the agency ends.
The person who creates a trust is known as the beneficiary.
The right of a lienholder to possess goods does not automatically give the lienholder the
right to sell the goods or to claim ownership if his charges are not paid.
The standards and principles of agency law’s respondeat superior are applied in
determining the liability of the partnership and of the other partners for the torts of a
partner and other partnership employees.
Generally speaking, advertisements are considered to be offers.
A computer manufacturer offered to sell sophisticated computer equipment to another
country. Two days later, before the offer was accepted, Congress placed an embargo on
all sales to this country; and therefore, the offer was terminated by the embargo. This is
an example of:
A. promissory estoppel.
B. destruction of subject matter.
C. intervening illegality.
D. revocation.
Although the Lanham Act is the federal trademark statute, Section 43(A) of the statute
may be invoked in various situations that do not involve trademark rights.
Which of the following is true about possession of collateral by secured party as public
notice?
A. Change of possession is a convenient way for perfecting most security interests in
consumer goods.
B. Possession of collateral by the creditor is rarely executed to perfect a security interest
in chattel paper and negotiable documents of title.
C. Possession is a possible way of perfecting a security interest in inventory which is
achieved through a field warehousing arrangement.
D. Possession by the creditor is a practicable way of perfecting a security interest in
equipment or farm products.
The primary reason to choose the limited liability limited partnership instead of a
limited partnership as a form of business is to:
A. create a tax shelter for the partners.
B. raise large amounts of capital.
C. limit the liability of all of its general partners.
D. relieve owners from managing the business.
Ordinances are created by:
A. Congress.
B. the Supreme Court.
C. counties.
D. equity courts.
An easement by prior use is created by:
A. grant.
B. prescription.
C. reservation.
D. implication.
Which of the following is not an essential element in the formation of a trust?
A. Conveyance of specific property
B. Proper purpose
C. Legal capacity
D. Appointment of trustee
Minisculea, a small nation that exists on a Pacific Ocean island, is a major producer and
seller of a substance known as XYZ. Minisculea is also the leader of a cartel of other
XYZ producers. The cartel has raised XYZ prices, a fact of significant concern to the
United States, given the many strategic uses to which XYZ can be put. U.S. officials
have engaged in ongoing discussions with Minisculea about this subject. If Minisculea
and the other cartel members are sued in a U.S. court for allegedly violating the U.S.
antitrust acts by fixing the price at which they sold XYZ to U.S. customers, their best
defense would be:
A. the state action doctrine.
B. the sovereign compulsion doctrine.
C. the doctrine of sovereign immunity.
D. the act of state doctrine.
Which of the following issuers must register securities with the SEC under the 1934
Act?
A. An issuer with total assets of $12 million, whose debentures are traded in interstate
commerce and are held by 600 holders.
B. An issuer with total assets of $9 million, whose stocks are traded in intrastate
commerce and are held by 700 holders.
C. An issuer with total assets of $14 million, whose debentures are traded in interstate
commerce and are held by 300 holders.
D. An issuer with total assets of $8 million, whose stocks are traded in intrastate
commerce and are held by 400 holders.
Negligence cases that address duties that run from possessors of real estate (land and
buildings) to those who enter that property are often called:
A. special duty cases.
B. premises liability cases.
C. strict liability cases.
D. negligence per se cases.
A mining partner’s interest is:
A. nontransferable.
B. freely transferable.
C. partially transferable.
D. dissolved and later, transferred.
Which of the following is a type of substituted contract in which the obligee agrees to
discharge the original obligor and to substitute a new obligor in his/her place?
A. Assignment
B. Delegation
C. Certification
D. Novation
Wonder Widgets agrees to sell Bill Buyer 10,000 of its “Grade A” widgets at a price of
$3.00 per widget. After Wonder breaches the contract by failing to deliver, Bill buys
substitute widgets at a price of $3.20 per widget. For this purchase, Bill incurs $200 in
reasonable expenses and saves $100 in shipping expenses. Bill then sues Wonder for
$2,200. What, if anything, can Bill actually recover?
A. Nothing
B. $200
C. $2,100
D. $2,200
Which of the following is true of a subagent’s duties to a principal?
A. A subagent does not owe the agent any of the duties that agents owe their principals.
B. A subagent who knows of the original principal’s existence also owes that principal
all the duties agents owe their principals.
C. The agent who appoints the subagent is not liable to the original principal when
he/she is harmed by the subagent’s conduct.
D. A subagent owes the original principal for duties arising solely from the original
principal’s contract with the agent.
A merger clause is also known as an:
A. interpretation clause.
B. interrogation clause.
C. integration clause.
D. instrumental clause.
The maximum number of shareholders that are allowed in a Subchapter S corporation
is:
A. 50.
B. 75.
C. 100.
D. 500.
Which of the following is true of the Resource Conservation and Recovery Act?
A. Failure to comply with its regulations incurs civil penalties, but not criminal
penalties.
B. It gives the federal government and the states the authority to regulate facilities that
generate, treat, store, and dispose of hazardous waste.
C. It focuses on cleaning up past disposal sites threatening public health and the
environment.
D. Its programs are centrally coordinated and administered directly by the central
government.
A _____ dividend may be revoked by the board of directors after it has been declared.
A. share
B. cash
C. property
D. scrip
The rate of interest that courts impose on losing parties until they pay the winning
parties is known as a(n):
A. variable rate.
B. order rate.
C. judgment rate.
D. fixed rate.
The relinquishment of rights by a party in a contract is called a(n) _____.
A. waiver
B. recission
C. impossibility
D. reliance interest
The Racketeer Influenced and Corrupt Organizations Act’s (RICO’s) most controversial
sections allow:
A. federal prosecutors to seek pretrial orders freezing a defendant’s assets.
B. the government to seek injunctions against future racketeering activities.
C. private individuals to recover treble damages for a statutory violation.
D. government intervention in white-collar crimes.
As per Section 4(2) of the 1993 Act, registration is not required for:
A. transactions which are done by non-charitable organizations.
B. transactions by agricultural corporations.
C. interstate securities transactions.
D. transactions by an issuer which does not involve a public offering.
Which of the following is true about charging a partner’s capital account during
distribution?
A. Losses from sale of partnership assets during winding up are not charged against a
partner’s capital account.
B. Partners are given the gross amount existing in their capital accounts.
C. On account of negative balance in a partner’s account, other partners are under no
obligation to contribute to set off the shortage.
D. If partnership creditors cannot be paid from the partnership assets, the creditors may
proceed against the partners’ capital accounts.
Individuals convicted of a RICO (Racketeer Influenced and Corrupt Organizations Act)
violation may be:
A. fined up to $250,000 without an imprisonment.
B. fined up to $150,000 and imprisoned up to 25 years.
C. fined up to $150,000 without an imprisonment.
D. fined up to $250,000 and imprisoned up to 20 years.
A trademark owner who wins an infringement suit may obtain a(n) _____ against uses
of the mark that are likely to cause confusion.
A. license
B. assignment
C. injunction
D. writ
Most of the court’s attention in trademark infringement cases is concerned with the:
A. dispute over profits made by the defendants.
B. likelihood of confusion over the trademark.
C. time period of the trademark rights.
D. generic nature of the disputed trademark.
Which of the following is a negotiable instrument?
A. “I owe you $100.”
B. “I promise to repay the loan of $3,000 only if I succeed in my business.”
C. “I promise to pay you the sum of $300 in the next week.”
D. “Please pay the bearer the amount of $500.”
Lido adopted a policy under which its employees aged over 50 years would be given
the preference of availing company sponsored transport facility. Marina, aged 55 years,
was provided transport facility. However Henry, aged 46 years, was denied the same.
Henry challenged the company policy as violative of the Age Discrimination in
Employment Act (ADEA) which forbids discriminatory preferences for the young over
the old. Will Henry succeed in the court of law?
A. Yes, as per the plain meaning rule of statutory interpretation.
B. Yes, as per the rule of general public purpose.
C. No, as per the rule of legislative purpose.
D. No, as per federal law.
A creditor might try to obtain an advantage over other creditors by obtaining a(n) _____
on the debtor’s property to secure an existing debt.
A. surety
B. preferential lien
C. presentment
D. equity of redemption
How many partners must agree to modify a partnership agreement?
A. All partners must unanimously agree.
B. A majority must agree to the change.
C. More than one but not necessarily a majority.
D. Only one partner is needed to modify an agreement.