Paper payable “on demand” fails the test of negotiability in that it does not contain a
specific time.
a. True
b. False
The implied warranty of habitability:
a. is a warranty that the land is well maintained.
b. is a concept created by Congress to protect consumers who rent homes.
c. requires leased premises to be fit for ordinary residential purposes.
d. All of these.
The issuer of a registration statement has strict liability for its accuracy.
a. True
b. False
Bob and his sister, Claudia, can NOT own property by:
a. a tenancy by the entireties.
b. tenancy in common.
c. joint tenancy.
d. They can own property in any of these ways.
Distinguish between:
a. express and implied contracts
b. executed and executory contracts
c. bilateral and unilateral contracts.
The manufacturer of Rubberware agrees to sell the distributor 1,000 boxes of 2-quart
bowls only if he agrees to resell to the retailer at cost plus $1.10 per bowl and the
retailer must agree to sell at no less than his cost plus. 50 per bowl. This is:
a. horizontal price fixing.
b. vertical price fixing.
c. vertical market allocation.
d. a group boycott.
A promisee is the person making a promise.
a. True
b. False
Unissued shares and treasury stock must be counted to see if a quorum exists.
a. True
b. False
In the development of the law of negotiable instruments, which of the following was
not a step?
a. Centuries ago, contract rights to the payment of money were not assignable because
the contractual promise ran to the promisee.
b. Contractual rights became assignable to third parties.
c. The law of assignments changed to permit assignees to obtain greater rights than their
assignors.
d. The concept of a holder in due course developed, which allowed certain good faith
transferees who gave value to acquire the right to be paid, free of most of the defenses
to which an assignee would be subject.
Accountants are subject to civil liability under the Securities Act of 1933 if the financial
statements they prepare or certify for inclusion in a registration statement contain any
untrue statement or omit any material fact, but only if reliance on the financial
statements is proven.
a. True
b. False
The parol evidence rule does not prevent the use of evidence that a party would like to
use to establish the defense of fraud, duress, or undue influence.
a. True
b. False
Under what circumstances may the buyer seek the remedy of replevin?
a. Where the buyer has been unable to obtain cover.
b. Where the goods have been shipped under reservation of a security interest in the
seller and that interest has been satisfied.
c. Where the goods are specially manufactured but can be purchased from another
source.
d. Both if the buyer has been unable to obtain coverand wherethe goods have been
shipped under reservation of a security interest in the seller and that interest has been
satisfied.
Under a shipment contract, title passes to the buyer at a time and place the seller
contracts with the carrier to ship the goods.
a. True
b. False
Contract rights are generally assignable.
a. True
b. False
Taxes imposed at death include:
a. income tax that the estate must pay on income received during estate administration.
b. federal estate tax on the transfer of property at death.
c. state inheritance tax on the privilege of an heir or beneficiary to receive the property.
d. All of these.
An amendment to a will is called a(n):
a. stipulated addition.
b. statutory adjustment.
c. codicil.
d. attestation.
Where the seller fails to make delivery, the buyer can cancel the contract, but he must
give the seller notice of his cancellation.
a. True
b. False
A stock split results in a larger proportion of corporate ownership by the shareholder.
a. True
b. False
A partners fiduciary duty under the UPA differs in some respects from that under the
RUPA.
a. True
b. False
A defendant who is indicted will next:
a. go before a grand jury.
b. have a preliminary hearing.
c. be arraigned.
d. be prosecuted.
According to the U.S. Supreme Court, the “necessary and proper clause gives Congress
the authority to legislate in areas not mentioned in the list of enumerated powers if the
legislation reasonably relates to an enumerated power.
a. True
b. False
The Rehabilitation Act prohibits discrimination against the handicapped in federal
programs and programs receiving federal financial aid.
a. True
b. False
A photocopy of a will or a will written in pencil would not be valid for probate.
a. True
b. False
Sources of federal law include all but which of the following?
a. Rules of administrative agencies.
b. Decisions of federal courts.
c. Executive orders of the President.
d. Hearings before the Senate.
A partner has the power to dissociate at any time by expressing the intent to withdraw.
a. True
b. False
The two basic elements to consideration are legal adequacy and a bargained-for
exchange.
a. True
b. False
The National Pollutant Discharge Elimination System may require that discharge
permits be obtained from:
a. the EPA.
b. the Army Corps of Engineers.
c. an individual state.
d. Any of these.
Contracts that are implied in law:
a. are obligations imposed by law on grounds of justice and equity.
b. are intended to prevent unjust enrichment.
c. do not rest upon the assent of the contracting parties.
d. All of these.
Sarah offers to pay Allison $150 if Allison will paint her apartment while she is out of
town on vacation for two weeks. Allison makes no promise but tells Sarah that she will
think about it. While Sarah is out of town, Allison paints the apartment. This is best
described as:
a. a unilateral contract.
b. a quasi contract.
c. an implied in fact contract.
d. a bilateral contract.
An accountant is generally held to be the owner of the working papers he uses in
performing an audit.
a. True
b. False
Any person eligible to be a debtor under a given bankruptcy proceeding may file a
voluntary petition, but must be insolvent to do so.
a. True
b. False
The court in Connes v. Molalla Transport System, Inc. found:
a. the tort of negligent hiring imposes a duty on employers to ensure its employees will
not engage in violent acts.
b. the scope of an employers duty to exercise reasonable care in hiring bears no
relationship to the anticipated degree of contact the employee will have with others.
c. employers have a duty to investigate all potential employees to make sure they will
not create an undue risk of harm to others.
d. the employer had no duty to independently investigate this potential employees
criminal background because the employer had no reason to foresee that hiring the
person would create an unreasonable risk of harm to others.
Which one of the following is NOT true of a criminal suit?
a. A criminal suit is brought by the government, not by an individual.
b. In a criminal suit, guilt is never presumed.
c. A purpose of a criminal suit is repayment to the victim.
d. A criminal suit requires a higher burden of proof than a civil suit.