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1) if a check is drawn pay to the order of maria and maria indorses it pay to the order of
jay, maria. this falls under:
a.blank indorsement.
b.restrictive indorsement.
c.special indorsement.
d.simple indorsement.
2) a large drug company has recently started a promotional deal. this deal involves
discounts to pharmacies for buying its drugs. the discounts are linked to the total dollar
amount purchased. this deal also provides for restaurant vouchers for representatives of
the pharmacies who feature among the top ten buyers of the companys drugs. which of
the following laws is this deal most likely to violate?
a.section 7 of the clayton act
b.the robinson-patman act
c.section 2 of the sherman act
d.the hart-scott-rodino antitrust improvement act
3) the law of piercing the corporate veil is an example of a _____ law protecting the
creditors of corporations.
a.commerce
b.common
c.constitutional
d.statutory
4) the fair credit reporting act imposes disclosure duties on:
a.users of credit reports.
b.credit receivers.
c.users of debit services.
d.debit and credit receivers.
5) lara is a partner at matador services, a management consulting firm. she makes an
agreement with regal infotech whereby matador will provide management consulting
services for $75,000 to regal, on the condition that regal pays her $5,000 personally.
which of the following is true of this situation?
a.lara has placed her own interests above those of the partnership.
b.lara has exceeded her actual authority.
c.lara is competing against her partnership.
d.lara has not exercised her duty to serve.
6) bob borrowed $200,000 from abc bank to purchase his residential house. a mortgage
was used as the financing vehicle. several years later bob encountered financial
difficulties. he did not pay his mortgage payments for 4 months and the bank
foreclosed. at that time the remaining loan balance was $170,000. bob had not
maintained the property well, and the winning bid at the foreclosure auction sale was
only $150,000. is bob liable for the $20,000 deficiency that has resulted (using the
majority rule)?
a.no, because the property was his residence.
b.no, because there is no guarantor with secondary liability involved in this transaction.
c.yes, because the proceeds of sale did not satisfy the remaining loan balance.
d.yes, because there is no surety or guarantor involved in this transaction.
7) nina has breached a contract between milo and her, but not so materially this means
that milo can:
a.sue only for damages caused by the breach
b.sue for damages for a total breach of the contract
c.cancel the contract
d.withhold his performance, even if the breach is remedied
8) which of the following statements will cause an instrument to be nonnegotiable?
a.payment is subject to the terms of a mortgage dated august 30, 2005.
b.payment is secured by a mortgage dated august 30, 2005.
c.payment is in consideration of two months rent.
d.payment to be made 30 days after date, for a note dated august 30, 2005.
9) the _____ requires partners to undertake their share of responsibility for running the
day-to-day operations of the partnership business.
a.duty to act within actual authority
b.duty to serve
c.duty of care
d.duty to account
10) rice contracted with locke to build an oil refinery for locke. the contract provided
that rice was to use united pipe fittings. rice did not do so. united learned of the contract
and, anticipating the order, manufactured additional fittings. united sued locke and rice.
united is:
a.entitled to recover from rice only, because rice breached the contract.
b.entitled to recover from either locke or rice because it detrimentally relied on the
contract.
c.not entitled to recover because it is a donee beneficiary.
d.not entitled to recover because it is an incidental beneficiary.
11) which of the following is true about the effect of llp statutes after appointment of a
new partner?
a.rupa provides that the new partner has full liability for the llps obligations.
b.the former partners will be personally responsible on committing a malpractice.
c.for obligations incurred before his admission, the new partner may not be held liable.
d.llp partnership agreements often change the rupa rule about a new partners liability.
12) which form of damages involves a court ordering a party to a contract to perform
his/her obligations under the contract?
a.quasi-contract
b.specific performance
c.rescission
d.promissory estoppel
13) the fcra establishes ________ for persons who knowingly and willfully obtain
consumer information from a credit bureau under false pretenses.
a.cease-and-desist orders
b.out-of-court settlements
c.consent orders
d.criminal penalties
14) nearly insolvent savings & loan (nisl) recently ran a newspaper advertisement that
read as follows: unsecured open-end credit lines (maximum $15,000) now available to
consumers. borrow against your line as you need money. your minimum monthly
payment to nisl? only $25. which of the following is a legally accurate statement about
this advertisement?
a.the advertisement complies with the truth in lending act in word and in spirit.
b.the truth in lending act does not apply, because nisl would be extending consumer
credit in an amount that exceeds the ceiling set forth in the statute.
c.the truth in lending act does not apply, because nisl would be extending credit for
consumer uses rather than for commercial uses.
d.the advertisements failure to state the annual percentage rate (apr) is a reason why the
advertisement violates the truth in lending act.
15) an involuntary bankruptcy petition can be filed against:
a.banking corporations.
b.multinational companies.
c.agricultural corporations.
d.nonprofit organizations.
16) which of the following characterizes natural law?
a.it accepts the need for both good and bad laws.
b.it reads constitutional law narrowly.
c.it rejects the separation of law and morality.
d.it opposes the view that law should be guided by a higher reason.
17) odyssey corp., a wholesaler of childrens toys, sells retailers across the country the
exceedingly popular trojan horse toy at a price of $14 per item. odyssey has learned that
one of its competitors, iliad co., is selling the trojan horse toy at a price of $12 per item
to all retailers in the state of utah. odyssey would like to respond appropriately to iliads
actions. which of the following statements accurately sets forth how odyssey may
respond without risking a violation of the robinson-patman act?
a.odyssey may begin selling the trojan horse toy at a price of $12 per item to utah
retailers, while keeping the price at $14 per item for retailers elsewhere in the country.
b.odyssey may begin selling the trojan horse toy at a price of $11.75 per item to utah
retailers, while keeping the price at $14 per item for retailers elsewhere in the country.
c.odyssey may begin selling the trojan horse toy at a price of $12 per item to utah
retailers, but only if it lowers the price to $12 per item for retailers elsewhere in the
country.
d.odyssey may begin selling the trojan horse at price of $11.75 per item all over the
country.
18) most states have enacted _____ statutes, which broaden the legal objectives of
corporations.
a.good samaritan
b.corporate constituency
c.control share acquisition
d.business combination
19) fanny and her husband fred own a farm in iowa. unfortunately, after earning a
$50,000 income on the farming operation and $10,000 in non-related endeavors in
2002, fanny and fred accumulated $100,000 in farm-related debt. their only other debt
is a $10,000 on a truck purchased in 2001. fanny and fred want to file for a chapter 12
plan. which of the following statements is most accurate?
a.fanny and fred do not qualify for protection under a chapter 12 plan.
b.fanny and fred will not be able to remain in possession of their farm under the plan.
c.a trustee will be allowed to sell unnecessary assets such as equipment.
d.a trustee will not be appointed under the plan.
