If a person is adjudicated insane, his/her personal representative cannot ratify the
contract.
Answer:
Under the UCC, the implied warranty of merchantability applies to the sale of food or
drink.
Answer:
The UCC is unique in its approach to the statute of frauds because it recognizes that the
basic purpose of the statute of frauds can be satisfied only by writing.
Answer:
Under the UCC, when parties to a sales contract omit a price term, the contract is void
because there is no “meeting of the minds.”
Answer:
In a unilateral contract, only one of the parties makes a promise. The other party
performs an act in exchange for that promise.
Answer:
The violation of usury laws may require the forfeiture of interest and principal.
Answer:
Wildlife is not a type of property.
Answer:
The case-by-case approach followed by the courts to resolve complex problems are
always considered to be better in comparison with the procedures followed by
administrative agencies.
Answer:
Performing a part of the contract after attaining majority, such as making payments or
accepting some performance under the contract, is not enough for ratification.
Answer:
For a debt to be considered unliquidated, the dispute about the existence or amount of
the debt must be in good faith.
Answer:
A signature not “authorized” when it is put on an instrument initially cannot be ratified
later by the person represented.
Answer:
Article 9 of the Uniform Commercial Code does not include general intangibles, such
as copyrights and software, in its definition of personal property.
Answer:
Commercial paper is:
A. the basic selling document of a 1933 Act registered offering.
B. a public offer by a bidder to purchase a target company’s equity securities.
C. a way to either issue immediate payment or to extend credit.
D. any unit of goods that is treated by commercial usage as a single whole.
Answer:
Randy asked Carl to detail his brand-new sports car by painting flames on the side of
the vehicle. After the parties signed a contract and after Carl had already started to
paint, Randy decided that he wanted Carl to also install a new stereo system in the car.
Carl sued Randy for modifying the existing contract without any prior intimation; but
he lost the lawsuit because:
A. Randy’s act was unenforceable for lack of consideration.
B. Randy’s promise was enforceable.
C. The old contract automatically got cancelled with the addition of a new condition.
D. Carl’s act was not a preexisting duty and hence of no legal value.
Answer:
Which of the following implies that the seller must make the goods available to the
buyer during reasonable hours and for a reasonable period of time so that the buyer can
take possession of the goods?
A. Tender of payment
B. Notification
C. Acceptance
D. Tender of delivery
Answer:
As a general rule, if an applicant suffers a loss after applying but before the insurer
formally accepts the application:
A. the insurer must cover the loss.
B. the applicant and the insured must share the loss.
C. the applicant must bear the loss.
D. the insurer must cover the loss only if there is no binder.
Answer:
Under the theory of industrywide liability, when it is impossible to successfully identify
the particular manufacturer that caused the harm, courts will:
A. apportion liability among manufacturers based on market share.
B. make the consumer identify a likely manufacturer in order to expedite the resolution
of the claim.
C. drop the complaint and call for the legislature to issue new industry laws.
D. prohibit further manufacturing of the product.
Answer:
Which of the following must exist before a shareholder can bring a derivative action?
A. The shareholder must also be an officer or director.
B. The shareholder must have owned shares at the time of the wrong against the
corporation.
C. A majority of the common shareholders must support the action.
D. The shareholder should not be an employee of the firm.
Answer:
The doctrine of promissory estoppel:
A. makes the contracts unenforceable.
B. does not make promises enforceable.
C. protects bargains, not reliance.
D. protects reliance, not bargains.
Answer:
The regulatory agency “capture” usually occurs through:
A. the official governmental dissolution of an agency.
B. the frequent exchange of personnel between a governmental agency and the industry
it was intended to regulate.
C. litigation between a corporation and governmental agency.
D. the use of political influence to reduce the funding received by the agency enforcing
the legislation.
Answer:
A director or officer will be held to have failed to act with due care and diligence if
he/she:
A. does not personally investigate every facet of every business decision.
B. relies on the opinions or statements of others.
C. fails to make a reasonable investigation before making any corporate decisions.
D. he/she does not personally attend all board meetings even if insufficient notice is
given.
Answer:
Which of the following is a basic Code writing requirement?
A. That the entire contract be in writing, always in the form of a letter.
B. That the written evidence indicates the quantity of goods sold.
C. That the written evidence be compulsorily signed by both the parties.
D. That the essential terms of the contract and the parties’ signatures were contained in
more than one document.
Answer:
Identify the TRUE statement concerning communications between clients and
accountants.
A. In most states, communications between clients and accountants are treated the same
way communications between clients and attorneys are treated.
B. Communications between clients and accountants are treated by courts as privileged
in the vast majority of states.
C. Even if a state has a statute creating an accountant-client privilege, federal courts are
inclined not to give such statutes any effect in cases involving federal taxes.
D. The accountant may not be forced to testify about the client’s records and about
conversations that the accountant had with the client.
Answer:
If a buyer accepts defective goods and wants to hold the seller liable, the buyer must
give the seller notice of the defect:
A. within four weeks.
B. within a reasonable time.
C. within a year.
D. within a period of three months.
Answer:
Which of the following statements about tangible property is TRUE?
A. It has no physical existence.
B. It is subject to tax in the state in which it is located.
C. It is only owned by the government or a government unit.
D. It is only taxable in the state where its owner lives.
Answer:
Under the Clean Air Act, ambient air quality standards designed to protect the public’s
health are known as:
A. primary standards.
B. secondary standards.
C. standard of the commons.
D. elementary standards.
Answer:
A will, might be recognized by the state even if it does not meet the formalities
required by law, if it is a:
A. holographic will.
B. living will.
C. joint will.
D. mutual will.
Answer:
When a buyer covers, he/she can recover from the seller:
A. the difference between the contract price and the market price.
B. the difference between the contract price and the cost of the substitute goods.
C. the goods the seller has failed to deliver.
D. the reasonable value of the goods.
Answer:
What is the consequence of placing a site on the National Priority List for cleanup
under “Superfund?” Who can be responsible for cleanup costs of such a site?
Answer:
Will a drawee bank be liable to the drawer of the check while a stop-payment order is
in effect? If yes, under what circumstances will the drawee bank be liable?
Answer:
Sam was an expert distance runner who entered into Big City Marathon. In order to
participate, he had to sign a “General Release of Claim,” which said that he assumed all
risk of competition and released all claims against the Marathon and its sponsors.
During the first mile, Sam was found unconscious, probably as a result of tripping and
falling on his head. He died a few hours later. Sam’s estate filed a wrongful death suit
against Marathon. Is the suit barred by the exculpatory clause?
Answer:
Answer:
Answer:
While auditing the financial statements of Foible Corp. (which are to be included in a
Securities Act registration statement), Ernie, a certified public accountant, fails to
review any of Foible’s journal entries, does not read the details of meetings of the board
of directors, and does not even speak with the comptroller of Foible. Consequently,
Ernie does not discover that substantial loans, which went unmentioned in the financial
statements, had been made to Foible officers. As a result, the registration statement
omits any mention of the loans. Assuming the omitted fact is a material one and that
Ernie is not an officer or director of Foible, does Ernie face potential liability under
Section 11 of the Securities Act of 1933? Discuss the reasons for your answer.
Answer:
Explain the nature and meaning of an indorsement.
Answer:
Helen was the president and 25 percent owner of two companies that served the
Uptown Mall. At the request of the mall owner, Helen helped arrange the mall’s sale to
Saber. To ensure continuity in mall operations, Saber offered to hire Helen as
vice-president of its retail division. The terms they allegedly negotiated included a
five-year term of employment, renewable for another five years, with termination at the
option of either party on six months’ written notice. Helen wrote some of the terms up
in a letter that Saber orally agreed to but never signed. Helen worked for Saber for 11
months and then was fired without notice. Can Helen enforce the contract?
Answer:
Define a bailment and discuss its essential terms.
Answer:
What are an insurer’s obligations in a liability insurance contract?
Answer: