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.
State statutes designed to protect the public from the sale of worthless stocks and bonds
are called:
a. antifraud acts.
b. blue sky laws.
c. clear sky laws.
d. none of the above.
__________ property means land and things embedded in the land.
a. Real
b. Personal
c. Intangible
d. Tangible
The tort of invasion of privacy includes:
a. intrusion into private affairs.
b. public disclosure of private facts.
c. misappropriation of another’s name.
d. all of the above.
The power given to courts to hear certain types of cases is called:
a. jurisdiction.
b. mediation.
c. arbitration.
d. summary judgment.
The parol evidence rule does not prohibit proof that:
a. the contract was thereafter modified.
b. conduct exists that violates the law.
c. the written contract is not a binding agreement.
d. all of the above.
A shareholder does not:
a. qualify as a member of the corporation.
b. own any specific property of the corporation.
c. have a fractional interest in the total property of the corporation.
d. all of the above.
In the absence of a fixed duration provision, a joint venture will ordinarily terminate:
a. upon completion of the project.
b. at the will of any participant.
c. as specified in the joint venture agreement.
d. all of the above.
Dealing honestly, reasonably, and in good faith:
a. is implied in every contract for services.
b. is implied in every contract for the sale of goods.
c. is an expressed obligation in every contract.
d. both a and b.
An incidental beneficiary of a contract:
a. can sue to enforce the contract.
b. cannot sue to enforce the contract.
c. is a beneficiary specifically named in the contract.
d. is an assignee of the direct beneficiary.
The Clayton Act prohibits:
a. all unfair methods of competition.
b. conspiracies in restraint of trade.
c. attempts to monopolize.
d. price discrimination between buyers of like commodities.
When a person has performed services under an oral contract that cannot be enforced
because of the statute of frauds, such person:
a. can recover the agreed payment for the services because a refusal to make payment
would be a breach of the contract.
b. can recover the reasonable value of the services because there is a quasi-contractual
duty to pay for the benefit received from such services.
c. cannot recover the value of the services because they were rendered under a
unilateral mistake of law.
d. can have the party receiving the services arrested for obtaining property by false
pretenses.
Which of the following types of contracts might be unenforceable as contrary to public
policy?
a. a contract that is contrary to the protection of the public welfare, health, or safety
b. a contract that is contrary to the protection of the person
c. a contract that is contrary to the protection of recognized social institutions
d. all of the above
Customers are precluded from asserting unauthorized signatures or alterations if they do
not report them within __________ from the time the bank statement is received.
a. fourteen (14) days
b. thirty (30) days
c. six (6) months
d. one (1) year
The Immigration Reform and Control Act of 1986 (IRCA) sets forth what types of
penalties against employers who knowingly hire aliens who have illegally entered the
United States?
a. criminal
b. civil
c. criminal and civil
d. none of the above, since the exclusive focus of the IRCA is to punish individual
aliens who have illegally entered the United States
An example of limited or special jurisdiction courts would include:
a. probate courts.
b. juvenile courts.
c. equity courts.
d. all of the above.
Sylvia and Morris were married and owned their home as tenants by the entirety. When
Morris died, his will said that he left his half of his home to his brother Tim. Sylvia
objects to this. The ownership of the home:
a. belongs solely to Sylvia by survivorship.
b. is now a joint tenancy between Sylvia and Tim.
c. is now a tenancy in common between Sylvia and Tim.
d. belongs to Sylvia and the state, in equal and divisible shares.
Which of the following is correct concerning suretyship and guaranty?
a. Each relationship always creates primary liability.
b. Each involves answering for the debt or default of another.
c. Each relationship of suretyship or guaranty must be in writing to be enforceable.
d. Each relationship always creates secondary liability.
A person who did not necessarily commit the crime can still be held criminally
responsible for acts committed by others __________.
a. only for crimes committed outside the United States.
b. only when the person who actually committed the crime is a supervisor.
c. only when the crime committed is a white-collar crime.
d. none of the above.
The right of employees to collectively bargain is guaranteed by the National Labor
Relations Act (NLRA).
A contract is:
a. a binding agreement.
b. an agreement creating an obligation.
c. an agreement that creates enforceable duties and obligations.
d. all of the above.
Which of the following forms of cotenancy does not have right of survivorship?
a. joint tenancy
b. tenancy by entirety
c. tenancy in common
d. community property
The right to performance under a contract can be assigned:
a. although the sufficiency of the performance is to be determined by the personal
satisfaction of the assignor.
b. although the contract requires the performance of personal services.
c. although the contract provides for the extension of credit.
d. if the burden of performing is not materially increased thereby.
The effect of the making of a partial payment to satisfy an admitted debt is an example
of the rule that:
a. past benefits cannot be consideration for a later promise.
b. a conditional promise may be consideration.
c. doing what one is already under a legal obligation to do is not consideration.
d. consideration must be adequate to be binding.
An enterprise that conducts business following a merger or consolidation succeeds to:
a. all of the rights of the predecessor.
b. all of the property of the predecessor.
c. all of the debts and liabilities of the predecessor.
d. all of the above.
Which is not a true statement about a warehouser?
a. A warehouser is a bailee.
b. A warehouser may issue a negotiable or nonnegotiable receipt.
c. A warehouser is an insurer of the goods.
d. A warehouser is liable for damaged goods if damage is caused by the warehouser’s
negligence.
Apparent authority has the same effect as:
a. undisclosed authority.
b. actual authority.
c. partially disclosed authority.
d. none of the above.
A tenancy for an indefinite time period that may be terminated at any time by landlord
or tenant is called a tenancy:
a. at will.
b. for years.
c. at sufferance.
d. from year to year.
A person who is unable to read is bound by signing a contract without obtaining an
explanation of it, unless:
a. the other contracting party later becomes aware of the signer’s inability to read.
b. the other party is similarly lacking in education.
c. the other contracting party knows of the signer’s disability.
d. none of the above; an illiterate person is always bound by a contract he or she
chooses to sign without obtaining an explanation.
A corporation or group of investors may seek to acquire control of another corporation
by offering cash for all of its shares made available for sale by a certain date. This
action is called a(n):
a. cash tender offer.
b. stock redemption offer.
c. stock reclamation offer.
d. offer for value.
Under the Revised Uniform Limited Partnership Act:
a. the words “limited partnership” must appear without abbreviation in the firm name.
b. a limited partner may contribute services, cash or property to the limited partnership.
c. Both a. and b.
d. none of the above.
In most states, __________ provides that a security interest in a non-inventory motor
vehicle must be noted on the vehicle title registration.
a. a non-Code statute
b. UCC Article 2
c. UCC Article 9
d. judicial precedent
Which of the following is a defense to an action against an agent for breach of the
implied warranty of authority?
a. The agent acted in good faith.
b. The agent misunderstood the scope of authority.
c. The third person knew that the agent was acting beyond the authority given by the
principal.
d. All of the above are correct.
A third-party beneficiary:
a. may be obligated to pay for services rendered.
b. may bring suit on and enforce the contract.
c. must consent to the contract.
d. must be identified by name.
A holder who is neither a holder in due course nor a holder through a holder in due
course is subject to every defense, just as though the instrument were not negotiable.
Unlisted companies that have assets less than $10 million and fewer than 500
shareholders are subject to the reporting requirements of the Securities Exchange Act of
1934.
The U.S. dollar is considered the international currency.
Mark Hubbard has been very successful in the cattle business over a number of years.
Hubbard has decided to establish a cattle program as an investment tool. He will
purchase cattle with investors’ money and then provide medical care, feed, and
transportation on a service contract basis. The profits then will be divided
proportionately among the investors. An investment company, Money Ventures, Inc., is
interested in the entire offering of Hubbard’s cattle program. Hubbard is unsure as to
whether the securities acts apply to him. In addition, he wonders whether his venture, as
structured, is exempt if the activity is within the securities acts. Should Hubbard be
concerned?
The relationship between the franchisor and the franchisee is ordinarily an arm’s-length
employment relationship.
A mediator has the power to actually make a decision in a dispute.
Under Regulation D, Rule 504, there are strict restrictions on the number of investors
and the methods of soliciting those investors.
If a corporate stock has a par value, the person subscribing to the stock and acquiring it
from the corporation must pay that par value amount.
A country can borrow money from other IMF members or from the IMF by means of
specific distribution rights (SDRs) sufficient to permit that country to maintain the
stability of its currency’s relationship to other world currencies.
Only the parties who signed the original contract can have rights with respect to that
contract.
Sondra realized on Tuesday that she had dropped her bank EFT card after using it at an
automatic teller machine. She telephoned the bank on the following Monday to notify it
of the loss. By that time, someone had used the card to withdraw $800 from Sondra’s
account. The bank said it would cover $300 of that amount. Sondra sued for the full
amount, claiming that she had exercised reasonable care in reporting the loss, especially
because the card was lost on bank premises. Will she be able to recover the full $800?
An offer may be made only to a specific person.
Exceptions to coverage are generally strictly interpreted against the insurer.
To make a valid will, the testator must have testamentary capacity.
The dissolution of a limited partnership is governed by unique rules quite different from
those applicable to the dissolution of a general partnership.
The zoning power permits any regulation that is conducive to advancing public health,
welfare, and safety.
Several layers of law are enacted at different levels of government to provide the
framework for business and personal rights and duties. At the base of this framework of
laws is constitutional law.
Documents filed by both parties at the beginning of a lawsuit are called the pleadings.
If an instrument is payable to alternative payees or if it has been negotiated to
alternative indorsees, it may be indorsed and delivered by either of them.
A will, to be effective, always must be dated.