Selena pays back a $2,000 loan from her parents within one year before she files the
bankruptcy petition. This is an example of:
A. anticipatory breach.
B. a secured transaction.
C. preferential payment.
D. a failure of consideration.
Which of the following is a part of the comprehensive federal plan to combat climate
change?
A. Fossil fuel taxes
B. An executive order to have all federal buildings equipped with solar power
C. A federal mandate to reduce coal emissions by 2016
D. There is no comprehensive federal plan to combat global climate change
Under the general incorporation law, the minimum number of owners a business needs
to be incorporated as a for-profit corporation is:
A. 10.
B. 5.
C. 1.
D. 20.
Which of the following is true about a sole proprietorship?
A. A sole proprietorship is a legal entity.
B. A sole proprietorship cannot sue or be sued.
C. A sole proprietorship as form of business can be transferred to someone else.
D. A sole proprietorship has a life of its own apart from its owner.
What is the term for “performs the duty under a proper delegation”?
A. Obligor
B. Obligee
C. Delegator
D. Delegatee
Why does Article 2 hold merchants to a higher standard than nonmerchants?
A. Because buyers tend to place more reliance on merchants.
B. Because merchants are not required to observe reasonable commercial standards of
fair dealing.
C. Because the Code gives more weightage to technical requirements such as
consideration.
D. Because the Code does not recognize the concept of an unconscionable contract
between a merchant and a buyer.
A distinguishing feature between the making of an inter vivos gift and the creation of a
trust is that:
A. a gift may be made orally whereas a trust must be in a signed writing.
B. a gift is irrevocable whereas a trust may be revoked in certain cases.
C. in order to create a valid trust, the creator must receive some form of consideration.
D. the beneficiary of a trust must be notified of the trust’s creation.
The doctrine of res ipsa loquitur can be translated as:
A. “you may have the body”.
B. “to show, prove, or ascertain”.
C. “by what warrant”.
D. “the thing speaks for itself”.
Jacobs put an old typewriter in the trash. The trash collector, Land, took the typewriter,
fixed it up, and sold it to Jones for $750. Jacobs contends that he is entitled to some or
all of the $750 that Land received from Jones. Based on these facts:
A. Land is entitled to the value of the improvements he made, but Jacobs is entitled to
the difference between the $750 Land received and the value of the improvements Land
made.
B. Land is entitled to keep the full $750 because Jacobs had abandoned the typewriter.
C. Jacobs is entitled to the $750 because Land paid Jacobs no consideration for the
typewriter.
D. Jacobs is entitled to recover the typewriter from Jones.
What type of partner in a Limited Liability Limited Partnership (LLLP) contributes
capital and manages the business.
A. General Partner
B. Limited Partner
C. Foreign Partner
D. Domestic Partner
Joe is the promoter of New Corporation (NC). He entered into various preincorporation
contracts. NC was properly formed on January 1, 2006. As a result:
A. Joe is no longer personally liable on those preincorporation contracts.
B. NC is automatically liable on those preincorporation contracts.
C. Joe is jointly and severally liable on preincorporation contracts.
D. Joe is not liable because NC released him from personal liability.
Which of the following is true regarding a drawee’s liability on a check or a draft?
A. The drawee is primarily liable in all cases.
B. The drawee is secondarily liable because the holder must first proceed against the
drawer.
C. The drawee is primarily liable if it accepts (certifies) a check.
D. The drawee is secondarily liable only in doubtful cases.
The Equal Employment Opportunity Commission (EEOC) was formed to regulate on a
variety of issues pertaining to discrimination in employment-related contexts. If the
EEOC were to promulgate a regulation specifying safety standards for chainsaws in
workplaces, this action could best be attacked as being:
A. obiter dictum.
B. inter alia.
C. nonobstante veredicto.
D. ultra vires.
Although the Occupational Safety and Health Administration (OSHA) administers the
Occupational Safety and Health Act, OSHA is not empowered to inspect businesses to
enforce those regulations.
Under the Model Business Corporation Act (MBCA), dissenters’ rights apply only if the
shareholders’ shares are not traded on a national securities exchange.
Which of the following is an accurate statement about powers delegated to and
possessed by administrative agencies?
A. The most important administrative agencies typically possess rulemaking powers but
lack adjudicatory powers.
B. An agency’s rulemaking power would be classified as discretionary power rather
than ministerial.
C. Modern courts tend not to uphold the validity of broad delegations of power by
Congress to administrative agencies.
D. Most administrative agencies are given restricted powers to comply with the
constitutional principle of separation of powers.
Which of the following is true of the international standards for the premanufacture
screening of new chemicals?
A. The U.S. regulation requires companies to demonstrate that a chemical is safe before
it is produced and distributed.
B. The EU regulations dealing with premanufacture screening of chemicals follow the
precautionary principle.
C. The EU restrictions on the production of chemicals that have been linked to health
problems will have little or no effect on the U.S. chemical exports to the EU.
D. The European Union requires regulators to show that products or their uses present
an unreasonable risk to human health or the environment before they can be regulated
or taken off the market.
Megan has purchased two tickets for a lucky draw at the local supermarket, which are
with the store’s cashier. Tracy, her friend, who knows about this, convinces the cashier
that she is Megan and takes the tickets. She then goes and sells the tickets to Anya, who
has no knowledge of the case. Which of the following statements is true?
A. Megan has the right to recover the tickets from Anya.
B. Tracy cannot be charged with fraud since she sold the tickets to Anya.
C. The cashier has the voidable title on the tickets.
D. Anya is the good faith purchaser.
What Article of the UCC deals with liens, both carriers and warehousemen?
A. Article 2
B. Article 7
C. Article 3
D. Article 1
Partners of a partnership:
A. are not liable for all the obligations of their partnership.
B. are entitled to income of the partnership, which must be reported on their individual
federal income tax returns.
C. are not permitted to deduct partnership losses on their individual federal income tax
returns.
D. can create a partnership only by complying with a statute.
When there are insufficient funds in a drawer’s account, and a check is presented to be
honored, the bank can:
A. honor the check, and charge the customer on the next deposit.
B. return the check, and charge a penalty.
C. hold the check and payment, even if the holder suffers a loss against the drawer.
D. charge a fee to the holder in due course and to the drawer.
Under two of the subsections of Section 17(a) of the Securities Act of 1933, an investor
need prove only negligence by the accountant.
Which of the following is true of subagents?
A. They must be appointed by the principal, though they report to the agent.
B. They are considered to be agents of the agent, but not of the principal himself.
C. Subagents do not have the authority to bind a principal, but can bind the agent.
D. For a subagency to exist, an agent must have the authority to make the subagent his
agent.