Which of the following is not a remedy available to an unpaid seller against the buyer?
a. Recovery of the price
b. Cover and suit for damages
c. Recovery of incidental damages
d. Cancellation of the contract
Which of the following would be a valid ratification? Two weeks after his eighteenth
birthday, Jerry:
a. sells the motorcycle he contracted to buy when he was seventeen.
b. calls the bank to assure them that he will continue making payments on the loan
agreement he signed a month before his eighteenth birthday.
c. makes a payment on the installment contract he signed a month before.
d. All of the above
Which of the following does not exemplify a relationship that typically leads to scrutiny
of a contract for undue influence?
a. Wife and husband
b. Clergy and parishioner
c. Brother and sister
d. Parent and child
Which of the following is correct with regard to common stock?
a. The Revised Act has eliminated the terms “preferred” and “common.”
b. Common stock does not have any special contract rights or preferences.
c. Common stock generally bears the greatest risk of loss in the event of the failure of
the enterprise.
d. All of the above are correct with regard to common stock.
If shareholders agree to vote in a specified manner for the election or removal of
directors, this is known as:
a. a proxy.
b. cumulative voting.
c. a voting trust.
d. a shareholder voting agreement.
Answer the following:
Which of the following is untrue of a limited partnership?
a. Limited partnerships must be formed under a state statute.
b. Limited partners cannot ordinarily be named in the partnership business name.
c. Partners in limited partnerships must contribute services to the partnership.
d. Limited partners are generally not responsible for the debts of the partnership beyond
their investment.
The rule that prohibits the solicitation of a proxy unless each person solicited has been
furnished with a written proxy statement containing specified information is Rule:
a. 10b-5.
b. 16(b).
c. 14a-3.
d. 505.
In a condominium:
a. all residents own shares in the corporation that owns the building.
b. each resident purchases a living unit in the building.
c. the tenant owns a reversionary interest in the property.
d. the tenant creates a future interest in the property known as a possibility of reverter.
Marks such as “Good Housekeeping Seal of Approval” and “Underwriter’s Laboratory”
are examples of:
a. service marks.
b. certification marks.
c. collective marks.
d. trademarks.
Tammy joined a religious cult while a student at college. Her father hired a
deprogrammer who spent several weeks with her, during which they occasionally went
on outings. After Tammy met with her boyfriend one weekend, she rejoined the cult. If
she sues her father and the deprogrammer for false imprisonment, Tammy:
a. will win because this is clearly false imprisonment.
b. will lose if she had a reasonable means of escaping and voluntarily consented to the
confinement.
c. has committed the tort of malicious prosecution.
d. would lose on the false imprisonment charge, but could win against her parents if she
brought a suit on a charge of intrusion.
The Federal Employee Polygraph Protection Act:
a. prohibits private employers (with some exceptions) from using lie detector tests, test
results, or the refusal to be tested as grounds for adverse employment decisions.
b. only prohibits the federal government’s use of polygraphs for making employment
decisions.
c. allows polygraphs of employees only to determine illegal drug use by them.
d. completely prohibits all use of polygraphs by employers.
A buyer in Atlanta enters into a sales contract with a seller in Chicago. If the contract
does not mention the place for delivery of the goods, the place of delivery will be:
a. at the seller’s business or residence in Chicago.
b. as stated in all destination contracts.
c. at the buyer’s business or residence in Atlanta.
d. irrelevant, since the contract is void.
Sales of copyrights and patents are governed by:
a. the UCC.
b. common law.
c. federal statute.
d. real estate law.
An agent is not required to keep which of the following information confidential?
a. Unique business methods
b. Customer lists
c. Information that his or her principal is engaged in criminal activity
d. Business plans
Which of the following is a requirement of a valid gift?
a. An adult donor
b. Payment of money
c. A writing
d. Delivery
e. Both (a) and (d)
A(n) ____ is a clause apportioning the liability and responsibilities of the parties in the
event of an unforeseeable and unavoidable occurrence, such as a typhoon, tornado, or
other disaster.
a. act of state
b. OPIC
c. letter of credit
d. force majeure
Alice is browsing in a commercial art gallery when she sees a painting that she likes.
Roger, who is the manager of the gallery, tells her that the painting is a genuine Leroy
Neiman work. Based upon that representation, Alice buys the work for $5,000. She later
discovers that the painting is only a cheap copy of the original that is worth no more
than $50. Roger has breached:
a. an express warranty to Alice that the painting is a Neiman work.
b. the warranty of merchantability.
c. no express warranties, because his statement was merely an opinion.
d. an express warranty, the warranty of merchantability, and the warranty of fitness for a
particular purpose.
Ed signs a 10-year lease with a survival clause. If Ed is evicted after 2 years, he will
have to pay rent:
a. for the remaining 8 years.
b. for the period of time until it is relent.
c. until eviction.
d. until he assigns the lease.
While driving his car five miles over the speed limit, Carl struck Darla, who was
jaywalking across the street. Darla sues and when the case comes to trial, the jury
determines that Carl was 60% negligent and that Darla was 40% negligent. Darla’s
damages for injuries are $10,000. If this accident occurred in a state following the
comparative negligence theory of recovery, Darla will:
a. recover $10,000.
b. not recover anything.
c. recover $6,000.
d. recover $4,000.
Barbara, a wealthy widow, promises the pastor of her church that she will donate
$20,000 to the church to help pay off its mortgage if the stewardship committee can
obtain enough pledges for the balance of the $80,000 mortgage. Other pledges are
obtained to pay off the mortgage, but now Barbara has changed her mind and plans to
take an around-the-world cruise instead. In this case:
a. the doctrine of promissory estoppel can be applied.
b. the promise to pay $20,000 is a promise to give a gift and is therefore not
enforceable.
c. under the Restatement, Barbara’s promise is enforceable.
d. Both (a) and (c).
A person with a life estate cannot do which of the following?
a. Strip-mine the land
b. Build a bridge over the river
c. Cut a single tree
d. Put a new roof on the house
Brad wrote a check to Clara for $1,000 on his account at First Bank. He then took it to
his bank for certification. The bank wrote “certified” on the face of the check. Brad then
gave the check to Clara. When Clara took the check to First Bank, they refused to pay,
claiming that there was not enough money in Brad’s account to cover the check. Which
of the following is correct?
a. First Bank is primarily liable on the check, because it has already accepted it.
b. Clara has no recourse under the circumstances.
c. When the check was certified, Brad was discharged.
d. Both (a) and (c) are correct.
Assuming a note made by Barbara payable to Carol, which indorsement will limit
negotiability?
a. “Pay Al. Carol”
b. “For deposit only, Acct. #602-043. Carol”
c. “Pay Connie for Al. Carol”
d. “Pay Claudia as attorney for John Jones. Carol”
TSCA includes provisions that:
a. regulate the manufacture of new chemicals.
b. allow for the registration of pesticides.
c. require that exports be labeled “not registered for use in the United States of
America.”
d. All of the above.
Which of the following transactions is governed by Article 2 of the UCC?
a. The sale of an apartment complex
b. The sale of oranges to be picked from a 10-acre grove
c. The sale of common stock of a soft drink company
d. A contract to receive medical services in a hospital
The right of the seller to stop delivery of the goods ceases when:
a. a negotiable document of title covering the goods is negotiated to the buyer.
b. the buyer receives the goods.
c. Either (a) or (b) occurs.
d. Neither (a) nor (b) occurs.
Article 9 of the UCC would govern transactions involving which one of the following?
a. Mortgage on a house
b. Purchase of waterfront property
c. Financing purchase of a sailboat
d. Mechanic’s lien on an automobile
If the principal debtor defaults, the surety has rights against the principal debtor, third
parties, and cosureties. These rights would include:
a. exoneration.
b. reimbursement.
c. subrogation.
d. contribution.
e. All of the above.
Fundamental changes to a corporation:
a. fall within the authority of the board of directors.
b. include the sale of substantially all of the corporation’s assets in the regular course of
business.
c. need to be approved by shareholders, by a majority of the shares present at a meeting
at which a quorum is present, under the 1999 amendments to the Revised Act.
d. require unanimous shareholder approval.
In which of the following situations would a court be likely to find an affirmative duty
to act?
a. Where a pedestrian witnesses an auto accident in which one of the drivers is injured.
b. Where an airline attendant sees one passenger threaten another passenger.
c. Where the driver of a car sees a two-year-old toddler wandering in the middle of a
busy street.
d. All of the above are situations where legally there is an affirmative duty to act.
How does a distributor differ from an agent?
a. The agent pays royalties to the multinational enterprise.
b. The distributorship shares profits with the multinational enterprise.
c. The distributor takes title to the merchandise it receives and thereby bears many of
the risks connected with commercial sales.
d. The distributor has the power to enter into contracts on the principal’s behalf, but the
agent does not.
Under the Code, collateral classified according to nature includes:
a. goods.
b. indispensable paper.
c. intangibles.
d. All of the above
e. None of the above.
A partner who has no right to participate in control of the business and who has limited
liability is a:
a. general partner.
b. nominal partner.
c. secret partner.
d. limited partner.
INM Corporation is in the business of developing genetically engineered
pharmaceutical products. It has developed a new genetically engineered microorganism
that it would like to protect from unauthorized use by others. INM may patent the
microorganism.
Invasion of privacy is in reality a collection of four distinct torts.
An instrument payable at a fixed time subject to acceleration by the holder is not
negotiable.
Explain how price differentials may be justified so that the Robinson-Patman Act is not
violated.
An instrument paying a fixed amount in Japanese yen is not negotiable; the instrument
must be payable in money authorized or adopted by the U.S. as part of its currency.
All intervening events that occur subsequent to the defendant’s negligent conduct will
relieve the defendant of liability.
Physical compulsion and improper threats are the two basic types of duress.
The Securities and Exchange Commission (SEC) consists of five commissioners.
Discuss why it was necessary for the Federal Trade Commission to have in recent years
imposed limitations on holder in due course rights.
Samuel writes to Emma authorizing her to sell his automobile for $3,000. Emma,
although she has no authority to delegate this task, asks Renaldo to try to sell the car. If
Renaldo makes a contract with Michelle for the sale of the car, Samuel is not obligated
to sell to Michelle, and Samuel acquires no rights against Michelle.
Under the majority view, if a clause in a lease says the tenant cannot sublet, he can still
assign the lease.
An exclusive dealing contract is one type of contract which is illusory because it lacks
consideration.
What is the Council on Environmental Quality?
First Finance Company perfected its security interest in Donald’s auto on March 1.
Second Finance Company perfected its security interest in the same auto on April 1. If
both parties have properly filed their finance statements, First Finance Company has a
priority interest in the auto.
A buyer who sells rejected goods on behalf of the seller is entitled to reasonable
expenses not to exceed five percent of the gross proceeds.
Ordinarily, an agent may delegate his duties to an equally qualified subagent.
Under the UPA, after all the partnership’s creditors have been paid, each partner is
entitled to repayment of his capital contribution upon termination of the firm.