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Under the RUPA, a partners dissociation in a term partnership is wrongful if before
expiration of the term:
a. the partner voluntarily withdraws one month after another partner dies.
b. the partner dies.
c. a court determines the partner became incapable of performing her duties under the
partnership agreement.
d. the partner becomes a debtor in bankruptcy.
Challenges to affirmative action plans adopted by private or government employers are
tested under the Equal Protection Clause of the Constitution.
a. True
b. False
Whether a corporation is a de facto corporation may be challenged by:
a. an individual.
b. another corporation.
c. the state in which the business attempted to incorporate.
d. All of these.
The Code's firm offer rule applies only to offers in writing that are made by a merchant
offeror.
a. True
b. False
Laura is in possession of a check which contains the following indorsement, "Sam
Smith, without recourse, for collection only." The indorsement would be classified as:
a. blank, qualified, and restrictive.
b. blank, unqualified, and unrestrictive.
c. special, unqualified, and restrictive.
d. special, qualified, and unrestrictive.
Harry Jones at Jones Brothers Furniture Co. does not like the Brite Lamp Co.
representative, so he decided that Jones Brothers would boycott Brite. Under the
Sherman Act, this is:
a. per se illegal.
b. no violation.
c. a tying arrangement.
d. vertical market allocation.
If the main purpose of the promisor (surety) is to obtain an economic benefit that he did
not previously enjoy, the promise is not within the statute of frauds.
a. True
b. False
In which of the following situations will a court grant specific performance?
a. In a case involving breach of contract for the sale of real property.
b. In contracts for personal services.
c. Where goods are unique or rare.
d. Both in cases involving breach of contract for the sale of real property and where
goods are unique or rare.
Cash-out combinations are used to eliminate minority shareholders by forcing them to
accept cash or property for their shares.
a. True
b. False
Shareholders do not have vested property rights resulting from provisions in the articles
of incorporation.
a. True
b. False
Jessica at the age of 15 entered into a contract to sell five acres of land to her uncle. She
may disaffirm this contract at any time before reaching her majority.
a. True
b. False
Which of the following is not true about a consumer lease under UCC Article 2A?
a. The lessor must be regularly engaged in the business of leasing or selling goods.
b. The lessee cannot be an organization.
c. There is no dollar limit on the amount of a consumer lease under Article 2A.
d. Consumer protection provisions are contained in Article 2A, and these may not be
varied by the parties agreement.
The Securities Act of 1933 has two basic objectives, one of which is to:
a. extend protection to investors trading in outstanding, issued securities.
b. grant the SEC power to impose administrative, civil penalties up to $600,000.
c. regulate disclosure requirements on publicly held corporations.
d. prohibit misrepresentation, deceit, and other fraudulent acts and unfair practices in
the sale of securities generally, whether or not they are required to be registered.
Mediation, like arbitration, is often a compulsory process in which the mediator can
render a decision that is binding upon the parties.
a. True
b. False
Federal Reserve Board guidelines for checks:
a. require indorsements to be in blue or black ink.
b. must be followed or the check will not go through the banking system.
c. require bank indorsements to be made within 2 inches of the left edge of the back of
the check.
d. Require indorsements to be in blue or black ink and thatbank indorsements to be
made within 2 inches of the left edge of the back of the check.
Arlene signs an employment contract to work for a local business, Davis Restoration,
for one year but is wrongfully discharged after three months. In order to recover from
Davis full pay for the remaining nine months of her contract, Arlene:
a. must accept employment 60 miles away if that is the only available similar job.
b. must use reasonable efforts to mitigate her damages by seeking other employment,
even if she does not find another job.
c. need only file suit against Davis Restoration since they are contractually bound to
pay Arlene for one year of employment.
d. must accept a radically different type of job if that is all she can find.
The Code greatly alters the common law doctrine of material breach by adopting what
is known as the:
a. perfect tender rule.
b. anticipatory repudiation rule.
c. prevention of performance rule.
d. discharge by operation of law rule.
A business form devised to avoid the burdens of corporate regulation, particularly the
formerly widespread prohibition denying corporations the power to own and deal in
real estate, and used primarily for asset securitization ventures is the:
a. limited liability limited partnership.
b. limited partnership.
c. limited liability company.
d. business trust.
Nathan entered a contract while he was seventeen. If, upon reaching the age of majority,
he has not avoided the contract and promises to perform those contractual obligations,
new consideration is required for the contract to be enforceable.
a. True
b. False
Contracts are governed primarily by statute, including the UCC.
a. True
b. False
Under Section 1 of the Sherman Act, which of the following is illegal per se?
a. Vertical market allocations.
b. Horizontal market allocations.
c. Vertical price restraints.
d. Monopolies
A tenancy at sufferance is created if a tenant fails to vacate the premises when the lease
expires.
a. True
b. False
Arbitration is a commonly used technique for resolving international disputes.
a. True
b. False
An anticipatory repudiation by one party to a contract precludes a discharge by
performance by that same party.
a. True
b. False
Donald, a minor, makes a contract with Albert, an adult, to buy a motorcycle. One week
later, Donald has his eighteenth birthday and shortly thereafter tells Albert he will pick
up the motorcycle next week. In this case:
a. Donald has expressly ratified the contract.
b. the contract must be renegotiated, because Donald was a minor when it was made.
c. Donald can change his mind and avoid the contract, because it was made when he
was a minor.
d. the contract is void ab initio, because Donald was a minor at the time it was made.
First Bank returns a check because it lacks a necessary indorsement. This action
constitutes a dishonor of the check.
a. True
b. False
The Clayton Act weakened the Sherman Act by eliminating illegal acts that had
previously been prohibited.
a. True
b. False
Because the statute of frauds does not apply expressly to a contract for the formation of
a partnership, usually no writing is required to create the relationship.
a. True
b. False
Malicious prosecution and wrongful civil proceedings impose liability for damages
caused by improperly brought proceedings, including harm to reputation, credit, or
standing; emotional distress; and expenses of defense.
a. True
b. False
The general rule for the standard of care used in tort law is: a person is under a duty to
all others at all times to exercise reasonable care for the safety of other persons and
their property.
a. True
b. False
The creditor's rights against the principal debtor are determined by the contract between
them.
a. True
b. False
The customary manner of disclaiming the indorser's contractual liability is to add which
of the following sets of words before or after his signature?
a. For collection only.
b. Without recourse.
c. Pay to the order of.
d. For deposit only.
