The term “exhaustion of administrative remedies” means that:
a. parties to an agency action must be diligent in pursuing their case.
b. parties to an administrative action must take their appeal to a court of law.
c. parties to an administrative action can appeal only after the agency has made a final
decision.
d. administrative agencies tend to work very hard.
Funds transfers made by businesses are governed by __________ regulations.
a. UCC
b. Federal Reserve
c. UCC and Federal Reserve
d. neither UCC nor Federal Reserve
The transferee has only those rights that were possessed by the transferor of the note
when a transfer of an instrument is made by:
a. an assignment.
b. a negotiation.
c. a sale.
d. a will.
The key time for determining whether a party lacked contractual capacity is:
a. the time the contract was made.
b. the time the value of the bargain becomes clear.
c. the time set for performance of the contract.
d. the time the plaintiff expresses dissatisfaction with the contract terms.
Trespass to personal property requires:
a. the personal property to be connected to real property.
b. destroying the personal property.
c. the invasion of personal property regardless of whether the owner grants permission.
d. the invasion of personal property without the permission of the owner.
Parol evidence may be admitted to show that a provision was omitted as the result of:
a. fraud.
b. accident.
c. mistake.
d. all of the above.
When a seller breaches a contract for the sale of goods to a buyer, the buyer is entitled
to specific performance of the contract if the:
a. goods are unique.
b. market cost of the goods has increased.
c. goods can be purchased in any major city in the country.
d. buyer’s customers will be disappointed if the buyer does not obtain the goods.
The debtor will be denied a discharge if:
a. the debtor had been extravagant.
b. the debtor incurred debts because of negligence.
c. the debtor received a discharge ten (10) years previously.
d. the debtor refused to obey a lawful order of the court.
If an obligor could successfully defend against a suit brought by the assignor:
a. the obligor will also prevail against the third-party beneficiary.
b. the obligor will also prevail against the assignee.
c. the obligor will also prevail against the incidental beneficiary.
d. none of the above.
Government grants create:
a. sole proprietorships.
b. corporations.
c. partnerships.
d. unincorporated associations.
Partners are:
a. jointly liable on all firm contracts and for all torts committed by one of the partners in
the scope of partnership business.
b. jointly and severally liable on all firm contracts and for all torts committed by one of
the partners in the scope of partnership business.
c. jointly and severally liable on all firm contracts and jointly liable for all torts
committed by one of the partners in the scope of partnership business.
d. jointly liable on all firm contracts and jointly and severally liable for all torts
committed by one of the partners in the scope of partnership business.
The rights of a holder of a warehouse receipt depend on whether the receipt is:
a. negotiable.
b. rescissory.
c. notarized as a document of title.
d. notarized as a bill of lading.
A provision in a residential lease stating that the landlord cutting off heat or water will
not constitute an eviction is:
a. valid.
b. a stipulation.
c. a covenant.
d. unconscionable.
Which of the following is not a question business ethicist Laura Nash has developed to
help businesspeople reach the right decision in ethical dilemmas?
a. Have you defined the problem accurately?
b. How would you define the problem if you stood on the other side of the fence?
c. How did the situation occur in the first place?
d. Does your proposed solution to the problem effectively balance the competing
objectives of ethical decision-making and corporate profitability?
Once goods have been accepted:
a. the buyer may never revoke that acceptance.
b. the buyer may only revoke acceptance if the defect was known at the time of the
original acceptance.
c. the buyer may revoke acceptance without cause or reason.
d. none of the above.
The statute of limitations in a tort action for malpractice runs from:
a. the date when the harm occurs.
b. the date when the harm is discovered.
c. the date when the plaintiff determines the total amount of damages caused by the
harm.
d. either the date when the harm occurs or when it is discovered, depending on the type
of damages sustained.
A bailee’s interest in the bailed property can be characterized as:
a. ownership.
b. a fractional proprietary interest.
c. possession.
d. constructive ownership.
The Sherman Act does not prohibit:
a. a company from engaging in purposeful conduct to exclude competitors.
b. a seller from dominating a market because of superior product or business.
c. competitors from agreeing not to deal with certain buyers.
d. all of the above.
California passed a law prohibiting any transporting of nuclear waste in the state unless
the company doing so is a resident or is owned by residents of California. What
constitutional issues does this law raise?
Bankruptcy results in a discharge of contractual obligations by __________.
a. default
b. equity
c. operation of law
d. oath or affirmation
Straight voting:
a. increases the voting power of minority shareholders.
b. is the normal method for shareholder voting on corporate matters.
c. restricts each shareholder to one vote, regardless of the number of shares owned.
d. all of the above.
In the absence of a liquidated damages clause and in the absence of proof of greater
damages, the seller’s damages are computed as
a. 25% of the purchase price or $500, whichever is less.
b. 25% of the purchase price or $500, whichever is greater.
c. 20% of the purchase price or $500, whichever is greater.
d. 20% of the purchase price or $500, whichever is less.
The party who writes or creates a promissory note is called the:
a. payee.
b. drawee.
c. drawer.
d. maker.
Most limited liability company statutes provide that a LLC will dissolve:
a. by the consent of the members.
b. upon the death of a member.
c. upon the expulsion of a member.
d. all of the above.
A transfer of possession, but not title, is called:
a. a bailment.
b. an option to purchase.
c. a gift
d. all of the above.
What type of insurance is written for a specified number of years and terminates at the
end of that period?
a. term insurance
b. whole life insurance
c. endowment insurance
d. universal insurance
Pursuant to the __________ theory, when a corporation is so dominated and controlled
by shareholders, officers, and/or directors that the separate personalities of the
individuals and the corporation no longer exist and there is a wrongful use of that
control, the courts will disregard the corporate entity so as not to sanction a fraud or
injustice.
a. alter ego
b. altered states
c. puppeteer
d. invisible hand
Courts will consider the adequacy of the consideration when:
a. one party clearly has the better of the deal.
b. one party has more business experience than the other.
c. one party claims to have been defrauded.
d. one party shows a much lower price nationally-advertised on television.
A(n) __________ instrument’s terms are enforceable, but the instrument is treated
simply as a contract governed by contract law.
a. nonnegotiable
b. negotiable
c. accommodation
d. secondary
If a lease is assigned, who is liable for the rent?
a. the assignor
b. the assignee
c. either the assignor or the assignee, but not both
d. the landlord can collect from both the assignor and the assignee
The United States Supreme Court was created by:
a. Congress.
b. the President.
c. the Uniform State Law Commission.
d. none of the above.
A financing statement must provide:
a. the name of the debtor.
b. the name of the secured party or their representative.
c. the covered collateral.
d. all of the above.
The person to whom the order in a draft is addressed is known as the:
a. payee.
b. drawee.
c. drawer.
d. maker.
Oral or spoken defamation is:
a. slander.
b. libel.
c. privilege.
d. perjury.
A “right to control” test determines whether an individual is an agent, an employee, or
an independent contractor.
Statutes sometimes provide that shareholders shall have unlimited liability for the wage
claims of corporate employees.
The federal government is not subject to any type of environmental quality regulation
A negotiable warehouse receipt that provides for delivery of the goods to the order of
Jill Jones may be negotiated by delivery of the document to the purchaser.
Attachment provides creditors with rights.
A contract is essentially an agreement that creates an obligation.
A debtor may redeem collateral at any time prior to the time that the secured party has
disposed of the collateral or entered into a binding contract for resale by tendering the
entire obligation that is owed plus any legal costs and expenses incurred by the secured
party.
For a change to constitute an alteration, the person making the change must be a party
to the instrument.
Under the tort of false imprisonment, shopkeepers are prevented from detaining anyone
whom they believe has shoplifted.
Cybersquatters are individuals who register and set up domain names on the Internet
that are identical or confusingly similar to existing trademarks in the hopes they can sell
the name to the trademark owner.
A special indorsement consists of the signature of the indorser and the words
identifying the person to whom the indorser makes the instrument payable.
Corporations come into existence as the result of the activities of one or more persons
known as promoters.
A corporation may exercise its power to borrow money by issuing bonds.
Technically, land is considered as extending downward to the earth’s center and upward
indefinitely.
Letters of credit are a form of advance arrangement for financing.
Agents are liable for harm caused third persons by the agents’ fraudulent, intentional, or
negligent acts.
Criminal penalties are possible under the Sherman Act.