Fraud in the inducement is also known as fraud in the factum.
An agreement to share losses of a business is strong evidence of a general partnership.
In most states, the law restricts the use of LLPs to certain types of professionals, such as
accountants, lawyers, and doctors.
Disclaimer of consequential damages is lawful in most instances.
Once a quorum is present, the withdrawal of shares does not affect the quorum of the
meeting.
A royalty fee is a fee for such things as advertising and promotional campaigns and
administrative costs.
Notes can be either unsecured or secured.
The Due Process Clause of the Fourteenth Amendment applies to federal government
action.
The Magnuson-Moss Warranty Act governs commercial and industrial transactions.
A tenant’s interest in the real property is known as a nonfreehold estate.
A transferor acquires greater rights than a holder in due course.
The grounds for an annulment need not be proved to the court to terminate a marriage.
To recover for strict liability, the injured party must show that the product that caused
the injury was somehow defective.
A critical factor in determining independent contractor status is the amount of time that
the agent works for the principal.
A horizontal merger is a merger that integrates the operations of a supplier and a
customer.
The tort of outrage states that a person whose extreme conduct intentionally causes
severe emotional distress to another person is liable for that emotional distress.
Monetary damages cannot be recovered for minor breach of contracts.
A tender offer made without the permission of the target company’s management is a
hostile tender offer.
According to social contract theory, each person is presumed to have entered into a
social contract with all others in society to obey moral rules.
If two competing manufacturers of a similar product both separately reach an
independent decision not to deal with a retailer, it is a violation of Section 1 of the
Sherman Act.
If a shareholder dominates a corporation and misuses it for improper purposes, a court
of equity can disregard the corporate entity and hold the shareholder of the corporation
personally liable for the corporation’s debts and obligations.
White knight mergers are mergers with friendly parties.
Authorized shares that have been sold by a corporation are called unissued shares.
U.S. citizens employed by U.S.-controlled companies in foreign countries are covered
by Title VII.
The courts have upheld the combined delegated power of administrative agencies as
being unconstitutional.
In the United States, the contract rights for payment of money can be assigned to third
parties.
Chancery courts were presided over by judges appointed by the king or queen.
A member’s obligation to contribute capital is excused only by the member’s death.
The lead audit partner and reviewing partner must rotate off an audit every five years.
Creditors have the legal right to claim at least half of the debtor’s exempt property.
An offeree may send an acceptance drafted in his own form contract in reply to the
offeror’s standard form contract.
An electronic signature may be that of a person’s electronic agent.
There is no liability shield between the corporation and the branch office.
Which of the following is true of proxies?
A) They arise from tacit oral contracts between shareholders.
B) They are signed by a corporation and sent to its shareholders.
C) They authorize proxies to vote in place of the proxy holders.
D) They are permitted to be submitted electronically.
The ________ is an act in the United States that provides that if people who would
inherit property from each other die such that it cannot be determined who died first,
each person’s property is distributed as though he or she had survived.
A) Succession Act of 1995
B) Family Law Act of 1986
C) Uniform Determination of Death Act
D) Uniform Simultaneous Death Act
Aclusia Seacrafts manufactures motorboats based on a poorly assembled prototype of a
motorboat. It ships these substandard motorboats to its retailers. Which of the following
will consumers injured by such motorboats cite as a defect in a strict liability lawsuit
against Aclusia Seacrafts?
A) defect in design
B) defect in packaging
C) failure to warn
D) failure to provide adequate instructions
Which of the following is true of the composition of a board of directors?
A) The number of initial directors is fixed by the shareholders.
B) The number of directors remains fixed throughout the lifetime of a company.
C) A board of directors must consist of more than one individual.
D) A board of directors consists of inside and outside directors.
Which of the following actions would make Sarah liable for battery?
A) She publishes an article defaming the current U.S. president.
B) She extends the boundary of her plot of land by encroaching two feet of her
neighbor’s plot.
C) She smuggles marijuana into the country.
D) She slaps her ex-husband because he denied her alimony.
Which of the following is true for a lease contract wherein the goods involved are
totally destroyed without the fault of either the lessor or the lessee?
A) The lessor is legally required to reimburse the lessee for any damages.
B) The lessee is legally obliged to reimburse the lessor for any damages.
C) Both parties are excused from performing the contract.
D) Both parties share the damages that arise from the total destruction of the goods.
JK Developers and KL Designs, who are experts in architectural engineering, form a
business agreement whereby they agree to work together for two years, in order to
complete the design of a planetarium. This is an example of a ________.
A) franchise
B) licensing agreement
C) strategic alliance
D) limited partnership
________ is 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.
A) Duress
B) Undue influence
C) Fraud
D) Scienter
Which of the following best defines short-swing profits?
A) They are profits that are made by an insider by selling shares of the corporation prior
to the public disclosure of unfavorable information.
B) They are profits that are made by an insider by personally purchasing shares of the
corporation prior to public release of favorable information.
C) They are profits that are made by a statutory insider on trades involving equity
securities of their corporation that occur within six months of each other.
D) They are profits that are made by a tippee by personally purchasing shares of the
corporation prior to or post public release of favorable information.
Which of the following is true of the decree of specific performance?
A) It is used by buyers to obtain possession of unique and rare goods.
B) It is used by sellers to cancel a contract.
C) It is used by buyers to stop delivery of their good in transit.
D) It is used by sellers to employ replevin actions on buyers.
Which of the following is true of the Magnuson-Moss Warranty Act?
A) It is administered by the Federal Trade Commission.
B) It governs commercial transactions.
C) It requires a seller or lessor to make an express written warranty on all products.
D) It covers written warranties pertaining to industrial transactions.
An appellee can file a(n) ________ that answers the appellant’s contentions.
A) sequester
B) opening brief
C) responding brief
D) deposition
When is the felony murder rule applied?
A) when a murder was committed without intent, while committing another crime
B) when a crime involves the intended murder of another person
C) when a felon committing another crime was killed during the course of action
D) when the reason for a death is found to be involuntary manslaughter
Which of the following describes a mixed sale?
A) a sale that involves two or more intangible goods
B) a sale that involves the passing of title of goods from a seller to a buyer for a price
C) a sale that involves the possession and use of named goods for a set
D) a sale that involves the provision of a service and a good in the same transaction
The ________ advocates that a greater than majority of shares constitutes a quorum of
the vote of the shareholders.
A) supramajority requirement
B) simple majority rule
C) business judgment rule
D) alter ego doctrine
In which of the following does the title to the goods pass from the seller to the buyer?
A) option contract
B) rental agreement
C) lease
D) sale of goods
Which of the following terms best describes discrimination against an individual
because of the person’s nonconformance with sex stereotypes?
A) sex-plus discrimination
B) gender identity discrimination
C) quid pro quo sec discrimination
D) pregnancy discrimination
The ________ includes a panel of seven judges selected from WTO member nations
that hears and decides appeals from decisions of the dispute-settlement body.
A) WTO panel
B) WTO appellate body
C) World Court
D) WTO General Council
Which of the following constitutes an acceptance of goods by a buyer?
A) The buyer asks for inspection of goods upon its arrival.
B) The buyer resorts to an immediate revocation of the goods due to their
nonconformity.
C) The buyer rejects the goods within a reasonable time after delivery.
D) The buyer resells the goods delivered by the seller.
Liability on a negotiable instrument that is imposed on a party only when the party
primarily liable on the instrument defaults and fails to pay the instrument when due is
referred to as ________.
A) secondary liability
B) unqualified liability
C) fringe liability
D) warranty liability
Interests in oil, gas, and mineral rights are classified as ________.
A) statutorily defined securities
B) investment contracts
C) common securities
D) implicit securities
________ is a type of universal defense where force or violence is used to issue a
negotiable instrument.
A) Extreme duress
B) Fraud in inception
C) Forgery
D) Material alteration
Denizence Informatics has expanded its board to incorporate more members. Emma,
the chief technology officer at Denizence, has been appointed to serve on the board.
Which of the following roles has Emma adopted in the above scenario?
A) ombudsman
B) outside director
C) inside director
D) shareholder
Which of the following is a similarity between destination contracts and shipment
contracts?
A) Both are applicable for carrier cases of transactions between buyers and sellers.
B) Both hold that delivery occurs when the seller puts the goods in the carrier’s
possession.
C) Both hold that delivery occurs when the goods reach the buyer.
D) Both are applicable for noncarrier cases of transactions between buyers and sellers.
The fraudulent making or alteration of a written document that affects the legal liability
of another person is called ________.
A) extortion
B) larceny
C) embezzlement
D) forgery
Why does an illusory contract lack consideration?
A) because the consideration promised is unlawful and therefore void
B) because the person promises to perform an act or do something he is already under
an obligation to do
C) because one or both parties can choose not to perform their contractual obligations
D) because the compensation paid is for work done in the past
A tenancy created when a lease specifies intervals at which payments are due but does
not specify how long the lease is for is known as a ________.
A) periodic tenancy
B) tenancy at will
C) tenancy for years
D) tenancy at sufferance
The ________ exemption applies to employees who are compensated on a salary basis,
who engage in management, who have authority to hire employees, and who regularly
direct two or more employees.
A) learned professional
B) computer employee
C) executive
D) administrative employee
The term ________ refers to the legal, tangible evidence of ownership of goods.
A) tenure
B) title
C) possession
D) pledge
________ is a crime in which one person gives another person money, property, favors,
or anything else of value for a favor in return.
A) Battery
B) Bribery
C) Larceny
D) Embezzlement
Mary buys a new toaster for $500. The toaster’s label bears a disclaimer stating that the
manufacturer is not liable for consequential damages. On Monday morning, while Mary
is using the toaster, it emits sparks and damages the electric wiring in the kitchen. The
electrician tells Mary that the toaster malfunctioned and that the cost of repairs in her
kitchen would come up to $2,000. What can Mary recover from the manufacturer of the
toaster?
A) $500
B) $2,500
C) $2,000
D) no damages can be recovered
KnockKnock is a manufacturer of stainless-steel locks which are well known for their
durability. The company contacts a new supplier and forms a supply contract. The
contract states that KnockKnock would only purchase steel from the supplier if the
material supplied was high-grade Type 102 stainless steel. This is an instance of a
________.
A) condition subsequent
B) concurrent condition
C) covenant
D) condition precedent
A(n) ________ is a charge of having committed a crime, usually a felony, based on the
judgment of a grand jury.
A) indictment
B) information statement
C) arraignment
D) plea
________ refers to the process whereby the judge and attorneys ask prospective jurors
questions to determine whether they would be biased in their decisions.
A) Consolidation
B) Trial of fact
C) Voir dire
D) Intervention