Delaware’s legislature has provided a potent antitakeover statute in its corporation code.
The violation of a statute that proximately causes an injury is negligence by proxy.
Information given by the attorneys in their closing statements is evidence the trier of
fact can use in reaching a verdict.
Several states have adopted partial contributory negligence, which provides that a
plaintiff must be less than 50 percent responsible for causing his or her own injuries to
recover under contributory negligence.
For federal income tax purpose, a limited liability company is taxed at the entity level;
as a result, its income or losses do not “flow through” to its members’ individual income
tax returns.
Under strict liability for products liability, all parties in the chain of distribution are
potentially liable for injuries caused by a product.
A crime is defined as any act done by an individual in violation of those duties that he
or she owes to society and for the breach of which the law provides that the wrongdoer
shall make amends to the public.
The signature of the drawer or maker of a negotiable instrument can appear anywhere
on the face of the document.
Once a zoning ordinance is properly passed, it cannot be challenged or overturned.
An award of specific performance orders the breaching party to perform the acts
promised in a contract.
Internet service providers (ISPs) are not liable for the content transmitted over their
networks by e-mail users and websites.
The employee can sue the employer in a regular civil lawsuit, instead of pursuing a
workers’ compensation claim, if the employer intentionally caused the injury.
Law is intended to protect persons, but not their property, from unwanted interference
from others.
Most cities have an ordinance that places the responsibility for fixing public sidewalks
in residential areas on the homeowners whose homes front the sidewalks. According to
the negligence by proxy doctrine, in light of such an ordinance, a homeowner would be
liable if he or she failed to repair a damaged sidewalk in front of his or her home and a
pedestrian tripped and was injured because of the unrepaired sidewalk.
In order to recover in a negligence case, the plaintiff must be in privity of contract with
the defendant.
The International Monetary Fund is part of the United Nations.
One major characteristic of corporations is that they have perpetual existence unless a
specific duration is stated in the articles of incorporation.
One way to create a shipment contract is to include the term Ex-ship.
An estate is defined as the bundle of legal rights that the owner has to possess, use, and
enjoy the property.
Mechanic’s liens are exempt from the rules permitting defaulting debtor’s the right of
redemption.
To be unconditional, a promise to pay cannot refer to another writing.
Statutory insiders must file reports with the Securities and Exchange Commission
disclosing their ownership and trading in the company’s securities.
Many large companies self-insure to cover workers’ compensation claims.
An employee is an agent, even if he or she is not specifically empowered to enter into
contracts on the principal-employer’s behalf.
The government cannot prohibit or regulate the content of fully protected speech.
A petitioner who wants the U.S. Supreme Court to hear a case must file a petition for
certiorari.
The Federal Trade Commission requires the registration of the disclosure document
prior to its use.
Under the implied warranty of merchantability, fungible goods must be of a high level
of quality.
Insurance that provides coverage to the driver and passengers of a vehicle who are
injured by an uninsured motorist is called uninsured motorist insurance.
As it relates to mitigation of damages, the word mitigate means “to allocate.”
The Copyright Dilution Act of 1986 currently governs copyright law.
Under the Uniform Computer Information Transactions Act, when an offer is silent
about the offer being conditioned on the acceptance of all terms of the offer, if the
offeree purportedly accepts but alters the terms of the offer in doing so, it is treated as a
simple rejection of the offer.
The United States Supreme Court places speech into three (3) categories: 1) fully
protected; 2) limited protected; and 3) unprotected.
Unless otherwise stated, a proxy is valid for eleven (11.) months.
Unions support right-to-work laws.
If the person who dies has a valid will, the property is distributed to beneficiaries
pursuant to the provisions of the will.
Management or any other party soliciting proxies from shareholders must prepare a
proxy statement that fully describes the matter for which the proxy is being solicited,
who is soliciting the proxy, and any other pertinent information.
Treaties are entered into by the president of the United States, and must be approved by
a two-thirds vote of the United States Congress.
A horizontal merger is a merger between two or more companies that compete in the
same business and geographical market.
The payee is the party to whom a check is written.
In order to be effective, when is shareholder approval needed for an amendment to the
articles?
A) for all amendments
B) only for amendments that are not filed
C) for all amendments that will affect shareholder rights
D) only for amendments that the board does not approve
E) only for amendments that affect rights to real property
When the government enters into a contract on behalf of a taxpayer, the taxpayer is
usually what kind of beneficiary?
A) incidental
B) covenanted
C) creditor
D) donee
E) conditional
Which of the following is not a correct description of a defensive strategy to a tender
offer?
A) Selling a “crown jewel” refers to a sale by the target corporation of an asset that was
particularly attractive to the tender offeror.
B) A “white knight” merger refers to a merger with a different purchaser that is
friendlier toward management than the company that made the tender offer.
C) A “poison pill” is a strategy built into contracts, bylaws, etc., that can make any
purchase of the corporation more expensive, such as leases that automatically expire
upon the purchase and would require renegotiation, likely at a higher price.
D) Under a ‘standstill agreement,” shareholders holding a large number of shares of the
target corporation agree that no one of them will sell to the tender offeror, even if the
tender offeror raises the offer price.
E) A “greenmail” payment is a payment, usually at greater than fair market value, made
by the target corporation to the tender offeror for shares already owned by the tender
offeror, in exchange for the tender offeror dropping the tender offer.
An offer to pay a reward is an offer to form a(n) ________ contract.
A) conditional
B) executory
C) executed
D) unilateral
E) bilateral
Treaties are:
A) made by the President and ratified by a two-thirds vote of the United States House
of Representatives.
B) made by the President and ratified by a two-thirds vote of the United States Senate.
C) made by the President and ratified by a majority vote of the United States House of
Representatives.
D) made by the President and ratified by a majority vote of the United States Senate.
E) made by the President and ratified by a majority vote of the United States House of
Representatives and the United States Senate.
________ fraud occurs when an accountant acts with “reckless disregard” for the truth
or the consequences of his or her actions. This type of fraud is sometimes categorized as
gross negligence.
A) Actual
B) De facto
C) Symbolic
D) Constructive
E) Equitable
A seller cannot telephone the buyer at 12:01 a.m. and say that the buyer has fifteen
minutes to accept delivery.
Which of the following would not be a violation of the freedom of religion protections
in the U.S. Constitution?
A) the government enacting a law that prohibits all religions
B) the government preventing the practice of unpopular or fringe religions
C) the government enacting a law that prohibits mosques or temples
D) the government prohibiting religious practitioners from celebrating their major
holidays and “high holy” days
E) the government allowing a variety of religious symbols to be displayed on
government property during the December holiday season
On January 10, 2000, Jonathan writes a check, payable to Josh in the amount of
$500.00, drawn on Jonathan’s account with MBNA bank. Josh, on the back of the
check, writes, “Pay to the order of Brandi” and leaves the check on his night stand.
Brandi comes to visit while Josh isn’t home (she has a key) sees the check and takes it
believing that it was indorsed to her a repayment of a debt. Brandi, then signs her name
to the back of the check and hands it to Lori as a birthday present. Which of the
following is a false statement?
A) Josh has a personal defense against Brandi.
B) The shelter rule does not apply in the above situation.
C) Jonathan has no defenses against Josh.
D) Lori is not entitled to the check, because she gave no consideration for it.
E) Neither Josh nor Jonathan has a real defense against Lori.
The two categories under which animals can be listed in the Endangered Species Act
are:
A) endangered and protected.
B) endangered and extinct.
C) threatened and protected.
D) marine and terrestrial.
E) endangered and threatened.
A bankruptcy case is commenced when a ________ is filed with a bankruptcy court.
A) complaint
B) declaratory judgment
C) temporary injunction
D) stay
E) petition
The two (2) kinds of intended third-party beneficiaries have traditionally been called:
A) incidental and creditor.
B) donee and creditor.
C) donee and incidental.
D) donee and delegated.
E) assigned and delegated.
When are future goods identifiable?
A) when the parties enter into the contract
B) when the buyer pays for the goods
C) when the seller begins manufacturing the goods
D) when the seller ships the goods
E) when the buyer accepts delivery of the goods
In a power of attorney relationship, the agent is called the:
A) attorney-in-fact.
B) attorney-in-equity.
C) attorney-at-law.
D) third party beneficiary.
E) incidental beneficiary.
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 requires an
individual filing for bankruptcy to receive:
A) pre-petition counseling
B) post-petition counseling
C) pre-petition or post-petition counseling
D) pre-petition and post-petition counseling
E) concurrent-with-petition counseling
The American Inventors Protection Act permits an inventor to file a(n) ________
application with the United States Patent and Trademark Office (PTO) so that the
inventor has time to prepare and file a final and complete patent application with the
PTO.
A) provisional
B) conditional
C) unconditional
D) informal
E) secondary
When a bank pays a check that has been materially altered to a higher amount,
assuming the bank is given appropriate notice when the drawer discovers the alteration,
the bank:
A) cannot charge the depositor’s account.
B) can charge the depositor’s account for the original amount of the check, but cannot
recover the additional amount from anyone.
C) can charge the depositor’s account for the original amount of the check, and recover
the additional amount only from the person who altered the check.
D) can charge the depositor’s account for the original amount of the check, and recover
the additional amount from the person who presented the check for payment, even if
that person did not know the check was altered.
E) can charge the depositor’s account for the original amount of the check, and recover
the additional amount from the person who presented the check for payment, but only if
that person knew that the check was altered.
What is required for a contract to be an express contract?
A) It is stated in words.
B) It is written.
C) It is written and signed.
D) It is performed immediately after formation.
E) It is performed for mutual benefit.
Martha had dinner at a gourmet restaurant. For dessert, she had the pecan pie. While
eating the pie, Martha bit down on a pecan shell, breaking a tooth. Martha sues the
restaurant for her injuries. Which of the following is most likely true?
A) Martha wins, but only if the state follows the foreign substance test.
B) Martha wins, but only if the state follows the consumer expectation test.
C) Martha wins regardless of which test the state follows.
D) The restaurant wins, since there is no breach of warranty in this situation.
E) The restaurant wins regardless of which test is applied.
Which of the following best describes a proxy contest?
A) Opposing factions of shareholders seek different prices for their shares.
B) Opposing factions of shareholders seek proxies, so they can vote other shareholders’
shares on a matter.
C) Members of the board of directors seek the support of other board members on a
matter to be voted on by the board.
D) Opposing factions of shareholders seek to influence board members to vote in a
certain way on a matter before the board of directors.
E) Opposing factions of shareholders seek to influence officers to disregard the board of
directors.
Most states permit foreclosure by ________, although this instrument must be
________ conferred in the mortgage or deed of trust.
A) power of sale; implicitly
B) power of sale; expressly
C) power of attorney; implicitly
D) power of attorney; expressly
E) redemption; implicitly
The Truth in Lending Act is administered by the ________.
A) United States Department of Commerce
B) Federal Trade Commission
C) Interstate Commerce Commission
D) Federal Reserve Board
E) Federal Banking Commission
The proximate cause requirement for a negligence tort is most likely not met where:
A) a customer becomes ill from food that is carelessly packed at a processing plant.
B) a patient becomes sick from a doctor carelessly prescribing the wrong medicine.
C) a customer in a building supply store carelessly drops a small can of paint that
breaks open and is ignited from a spark caused when the metal can hits the concrete
floor.
D) a driver injures a pedestrian when rounding a curve at twice the legal speed limit.
E) the victim of an accident was aware, prior to the actual accident, that the accident
was likely to occur.
Which term can be used to create a destination contract?
A) F.A.S.
B) Ex-ship
C) C.I.F.
D) C&F
E) F.O.B. point of shipment
If a home was purchased within 1,215 days before the bankruptcy petition was filed, the
federal homestead exemption under the 2005 Act limits the homestead exemption to:
A) $25,000 of the home’s equity.
B) $50,000 of the home’s equity.
C) $100,450 of the home’s equity.
D) $146,450 of the home’s equity.
E) $150,450 of the home’s equity.
If a seller has delivered nonconforming goods that have been rejected by the buyer, the
seller has a right to cure:
A) only if the time for performance has not yet expired.
B) only for 24 hours.
C) only if the contract specifically allows for cure.
D) only if the buyer agrees.
E) under some circumstances, even if the original time for performance has passed.
The doctrine that applies when one person confers a benefit on another person who
retains the benefit in a situation where it would be unjust to allow the recipient to retain
the benefit without paying for it is known as:
A) quasi-contract.
B) pseudo-contract.
C) unjust contract.
D) unilateral contract.
E) bilateral contract.
When a buyer of goods has obtained the goods properly from the seller by check but the
check is dishonored, what kind of title does the buyer have?
A) voidable
B) void
C) good
D) joint
E) common
If a minor does not disaffirm a contract either during the period of minority or within a
reasonable time after reaching the age of majority, the contract is considered ________.
A) codified
B) sanctified
C) rectified
D) ratified
E) confirmed
When used in reference to the United States Constitution, the term “checks and
balances” means that:
A) Congress has the power to issue checks and balance the budget.
B) Congress has the power to check and balance the power of individual states.
C) the Constitution ensures that Congress has power to check and balance the power of
federal agencies.
D) certain checks and balances are built into the Constitution to ensure that no one
branch of the federal government becomes too powerful.
E) banks are required to offer checking accounts to customers.
The United States Constitution is often referred to as a ________ document because it
is so adaptable.
A) living
B) breathing
C) static
D) bedrock
E) tenuous
Which of the following is an effective disclaimer of implied warranties?
A) “caveat emptor”
B) “buyer beware”
C) “as is”
D) “not responsible”
E) “extended warranty available”
The United States Department of Agriculture (USDA) conducts inspections of food
processing and storage facilities.
Jon has sold the rights to extract natural gas from beneath his property to the Reval
Corporation. Reval has purchased (a)n:
A) easement.
B) license.
C) profit.
D) mortgage.
E) fee simple defeasible.
A minor’s ratification of a contract will be binding on the minor if it is made:
A) at any time before or after entering into the original contract.
B) at any time after the original contract has been formed.
C) at any time and contains a clear statement of the minor’s intent to be bound.
D) at any time when the minor understands the terms and implications of the contract.
E) at any time after the minor has reached the age of majority.