All the countries of the world are members of the United Nations.
A sole proprietorship is considered a separate legal entity.
If no beneficiary is named in a life insurance, the proceeds go the federal government.
All EU countries have voted to use the euro because of which the EU is often referred
to as the eurozone.
Common carriers are liable for the loss of goods caused by natural disasters.
According to the Fair Debt Collection Practices Act, a debt collector is not allowed to
contact a debtor before 8:00 am and is not allowed to reveal the existence of the debt to
third parties.
The UCC does not allow for open terms in a sales or lease contract.
A special warranty deed contains the greatest number of warranties and provides the
highest level of protection to a grantee.
A security agreement refers to a written document signed by a debtor that creates a
security interest in personal property.
If an assignee fails to provide a notice of assignment, the obligor cannot be sued for
performing according to the original contract.
Favorable credit terms and freight charges are examples of indirect price discrimination
that violate the Robinson-Patman Act.
An offer for a unilateral contract can always be revoked at any time prior to the
offeree’s completion of the requested act.
Trademark laws can protect a famous person’s name from cybersquatters in spite of it
not being trademarked.
A partner is entitled to repayment of the loan, but this right is subordinated to the claims
of creditors who are not partners.
A corporation is not liable for the contracts of its branch office.
Once a contract has been substituted with another contract, the original contract cannot
be enforced against a breaching party.
Ethical relativism establishes ethical rules based on an implied social contract people
have with each other.
Any age below the statutory age of majority is called the period of minority.
The Asia-Pacific region is the world’s slowest-growing economic region.
The portability requirement is intended to ensure free transfer of an instrument.
A seller’s affirmation of the value of goods creates an express warranty.
Interests or instruments that are expressly mentioned in securities acts are common
securities.
The primary purpose of securities law is to promote full disclosure to investors and to
prevent fraud in the issuance and trading of securities.
Silence is not a misrepresentation when there is a fiduciary relationship between the
two parties entering into contract.
The Good Samaritan laws relieve medical professionals from liability for ordinary
negligence when they stop and render aid to victims in emergency situations.
When a debtor defaults on a secured real estate mortgage, it triggers a legal court action
for foreclosure of that property.
Agents are always personally liable for their tortious conduct in situations involving
frolic and detour.
Under the infancy doctrine, the contract is voidable by a minor.
A generic name is a term for a mark that has become a common term for a product line
or type of service and therefore has lost its trademark protection.
Many states recognize the validity of a holographic will in spite of them not being
witnessed.
The Federal Bureau of Investigation (FBI) is authorized to investigate forgeries, bank
fraud, and other financial crimes.
Laws that do not meet the substantive due process test are declared void for vagueness.
The land over which the easement is granted is called the dominant estate.
The UCITA statute can be enforced in the event of a contract breach, giving the
nonbreaching party the right to recover damages.
The UCC provides that an acceptance of goods occurs if a buyer fails to reject the
goods within a reasonable time after the delivery.
The formation of sales and lease contracts requires an offer but seldom requires an
acceptance.
For debtors, which of the following is an advantage of Chapter 13 over Chapter 7?
A) It grants discharge of debt incurred prior to the date of the order for relief.
B) It allows debtors to start a new life without the burden of prepetition debts.
C) It prevents debtors from paying prepetition debts out of postpetition income.
D) It helps debtors retain more property than is exempt under Chapter 7.
An informal contract is also known as a(n) ________ contract.
A) unilateral
B) bilateral
C) executed
D) simple
Which of the following circumstances result in a defective formation?
A) when a certificate of limited partnership is not properly filed
B) when a certificate of amendment is not executed or signed
C) when the liability of partners extends to debts that cannot be satisfied with the
existing capital of the limited partnership
D) when a creditor fails to enforce the personal guarantee and recover payment from
the limited partner who personally guaranteed the repayment of the loan
________ is an event that occurs when one person consciously decides to induce
another person to rely and act on a misrepresentation.
A) Fraudulent misrepresentation
B) Unilateral mistake
C) Bilateral mistake
D) Erroneous misrepresentation
Which of the following can dismiss the existence of a corporation?
A) voluntary termination by shareholder
B) death of a shareholder
C) bankruptcy of a shareholder
D) voluntary termination by the corporation’s creditors
Which of the following consumer products comes under the purview of the Consumer
Product Safety Commission (CPSC)?
A) aircrafts
B) motor vehicles
C) firearms
D) children’s toys
In a delegation, the party to whom a duty is owed is the ________.
A) delegator
B) delegatee
C) obligor
D) obligee
________ laws are federal and state statutes and regulations that promote product safety
and prohibit abusive, unfair, and deceptive business practices.
A) Profit-à-prendre
B) Canon
C) Consumer protection
D) Caveat emptor
Nancy owes $5,000 to Kenneth and promises to pay it after two months. Kenneth
assigns his right to collect the money to Delmar, who does not inform Nancy, for a
payment of $3,500. After a few weeks, in need of money, Kenneth assigns the rights to
Kelly, for a payment of $3,000. Kelly notifies Nancy of their agreement. According to
the English rule, ________.
A) Kelly can recover the money from Nancy
B) Kenneth has the right to sue Delmar for nonperformance
C) Nancy owes the money to Delmar
D) Kenneth has the right to recover the money directly from Nancy
The party who receives a license is known as the ________.
A) licensor
B) bailee
C) licensee
D) acceptor
Those who are secondarily liable on negotiable instruments they endorse are known as
________.
A) unqualified indorsers
B) qualified indorsers
C) accommodation parties
D) agents
Which of the following is true of a buyer’s revocation of acceptance?
A) It is effective even before the seller or lessor is notified of the revocation.
B) It always arises due to the conforming nature of the goods delivered.
C) It must occur after substantial change in the condition of the goods delivered.
D) It is a reversal of acceptance of a lot or commercial unit.
A bankruptcy trustee is a ________.
A) legal representative of a debtor’s estate
B) claimant to the debtor’s estate on behalf of a creditor
C) federal government official responsible for supervising a bankruptcy case
D) bankruptcy judge, appointed by a U.S. Bankruptcy Court
Subjects that are not compulsory or illegal are known as ________ subjects of
collective bargaining, which maybe be bargained for if the company and union agree to
do so.
A) secondary
B) alternative
C) permissive
D) conditional
________ refers to jurisdiction that allows a plaintiff who obtains a judgment in one
state to try to collect the judgment by attaching property of the defendant located in
another state.
A) In rem jurisdiction
B) In personam jurisdiction
C) Private jurisdiction
D) Quasi in rem jurisdiction
Which of the following is a mandate of the Nuclear Waste Policy Act to the
government?
A) to set standards for radioactivity in the environment
B) to select a permanent site for the disposal of nuclear wastes
C) to regulate thermal pollution from nuclear power plants
D) to use wetlands as a source of nuclear wastage disposal
Ashton borrows $25,000 from Amanda. Amanda lends the money to Ashton without
taking an interest in collateral for the loan. Amanda is relying on Ashton’s credit
standing when she makes the loan. What kind of creditor is Amanda?
A) an unsecured creditor
B) a secured creditor
C) an administrative claim creditor
D) a post-petition creditor
Which school of jurisprudence bases its principles, for solving legal disputes, on broad
notions of “fairness,” and subjective decision making by judges?
A) the Natural Law School of jurisprudence
B) the Analytical School of jurisprudence
C) the Critical Legal Studies School of jurisprudence
D) the Sociological School of jurisprudence
________ allows a mortgagor to regain real property after default and before
foreclosure.
A) Foreclosure
B) Right of redemption
C) Lien release
D) Power of sale
Gary asks his friend, Adam, to look after his house while he goes to another country for
work, for two years. Adam leases the house to Brad by signing a contract with Brad.
Adam signs as a representative of Gary even though he does not have the right to do so.
Gary comes back and attempts to evict Brad. Brad can claim the defense of ________.
A) extreme duress
B) mental incapacity
C) fraud in the inception
D) breach of contract
Mike borrows $25,000 from Jill, and executes a promissory note stating that he will
repay the money in one year. Mike also requests for a clause that allows him to repay
the loan prior to the due date to which Jill agrees. In this scenario, Mike is requesting
for a(n) ________ clause.
A) prepayment
B) acceleration
C) extension
D) forestallment
Which of the following statements is true about a revocation?
A) It can be made by the offeree.
B) It needs to reach the offeree to be effective.
C) It can be done even after acceptance of the offer.
D) It can be applied to an option contract.
A Form 10-K is a(n) ________ report that has to be filed by a reporting company as
required by the Securities Exchange Act of 1934.
A) weekly
B) annual
C) monthly
D) quarterly
Which of the following constitutes duress?
A) an event that occurs when one person consciously decides to induce another person
to rely and act on a misrepresentation
B) a situation in which one person takes advantage of another person’s mental,
emotional, or physical weakness and unduly persuades that person to enter into a
contract
C) a threat to commit extortion unless someone enters into a contract
D) the knowledge that a representation is false or that it was made without sufficient
knowledge of the truth
________ is a manifestation of assent by the offeree to the terms of the offer in a
manner invited or required by the offer as measured by the objective theory of
contracts.
A) Acceptance
B) Revocation
C) Proposal
D) Counteroffer
The most common remedy for a breach of contract is an award of ________.
A) injunctions
B) substitute contracts
C) reformations
D) monetary damages
Which of the following is true of the Age Discrimination in Employment Act (ADEA)?
A) Private plaintiffs cannot sue under the ADEA.
B) Persons under 40 are not protected by the ADEA.
C) Employees need to be a minimum of 55 years of age to be protected by the ADEA.
D) Discrimination in certain employment decisions, like hiring, is permitted under the
ADEA.
Under the UCC, the inclusion of additional terms in an acceptance is considered a(n)
________.
A) counteroffer
B) presentment
C) accommodation
D) objection
The act of negotiating contract terms between an employer and the members of a union
is known as ________.
A) mediation
B) arbitration
C) collective bargaining
D) litigation
Which of the following requirements has to be met for a holder to qualify as an HDC
under the shelter principle?
A) The holder must not be in possession of a prior negotiable instrument.
B) The holder must have notice of a defense or claim against the payment of the
instrument.
C) The holder must have been a party to a fraud or an illegality affecting the instrument.
D) The holder must have acquired the instrument from an HDC.