Eligibility for membership on a board of directors is determined by all of the following
except:
a. statute.
b. certificates of filing.
c. articles of incorporation.
d. bylaws.
Action taken by one on behalf of another is:
a. agency.
b. negotiability.
c. representative capacity.
d. Identification of principal.
A limited liability company:
a. must have at least one member that is subject to unlimited liability.
b. member may actively participate in control of the business without losing limited
liability status.
c. both a. and b.
d. neither a. nor b.
A stockholder-approved amendment to the certificate of incorporation may indemnify
directors who:
a. acted in bad faith.
b. acted negligently.
c. breached their duty of loyalty.
d. gained an improper personal benefit.
The Racketeer Influenced and Corrupt Organizations (RICO) Act is a product of:
a. Congress.
b. international trade agreements.
c. state law.
d. none of the above.
A person lacks contractual capacity if:
a. the person is a chronic alcoholic.
b. the person is a drug addict.
c. because of mental impairment, the person does not comprehend that a contract is
being made or understand its consequences.
d. all of the above.
Consumer protection statutes and regulations do not protect against:
a. deceptive advertising.
b. the consumer€s own negligence.
c. unsolicited credit cards sent to creditworthy consumers.
d. unreasonable methods of debt collection by debt collection agencies.
Once goods have been accepted:
a. the buyer may never revoke that acceptance.
b. the buyer may only revoke acceptance if the defect was known at the time of the
original acceptance.
c. the buyer may revoke acceptance without cause or reason.
d. none of the above.
A common carrier of goods has the right to:
a. make reasonable and necessary rules for the conduct of its business.
b. charge a rate that enables a fair return.
c. charge demurrage.
d. all of the above.
By the mere act of selling, a warranty is made that the:
a. goods are the finest available.
b. seller’s title is good and the transfer is rightful.
c. price is the lowest available.
d. all of the above.
The Freedom of Information Act:
a. is to be strictly construed to prevent unauthorized disclosures.
b. has too many exemptions to be useful.
c. is intended to subject agency action to public scrutiny.
d. puts the burden of proof upon the person requesting the information.
Paul purchased a house and also purchased fire insurance coverage on the house. The
policy contained an 80 percent coinsurance clause. Paul maintained coverage in the
amount of $150,000 and the value of the house was $250,000. A fire caused a loss of
$100,000. Paul will collect:
a. the full $100,000, because he had coverage for $150,000.
b. only part of the $100,000 loss, because he failed to maintain coverage at 80 percent
of the value of the house.
c. nothing, because he failed to maintain coverage at 80 percent of the value of the
house.
d. 80 percent of $250,000, or $200,000.
Al was a well-respected attorney in a small town. A couple retained Al to represent
them on the purchase of a home. Before closing, Al informed the couple of payments
that they were required to make by check at the closing. Among the required payments
the attorney told the couple to make were a check for $1,500 to Bob Brown and a check
for $610 to Susan Lee. The attorney explained that the check to Brown was for a survey
of the property and the check to Lee was for termite control work that the couple had
authorized.The checks were issued and taken by Al who promised to deliver them. Al
did not, however, deliver them. Instead, Al forged the indorsements of the respective
payees and cashed the checks. When Al was later arrested on a similar matter, the
couple learned what had happened.The couple made a claim against its bank for
reimbursement, claiming the bank was not authorized to pay these checks because they
had not been effectively negotiated to the bank. When the facts came to light, no person
named Bob Brown had done a survey on the property, but the termite work had been
done by Lee. Decide both cases.
A person has an insurable interest in property if destruction of that property would
cause a monetary or pecuniary loss to that person.
A contract made by an incompetent person after a guardian has been appointed is
voidable.
The “known user” rule imposes liability on the accountant for negligent malpractice
when he or she can foresee the parties who will rely on his work in the financial
statements.
In order to be eligible for Chapter 13 bankruptcy an individual must have less than
$1,081,400 in unsecured debt.
To make a valid will, the testator must have testamentary capacity.
A registration certificate for a partnership’s fictitious name contained the names of
Barry, Boyd, and Swartz. Cruise extended credit to the firm in reliance in part on the
certificate that named Swartz as a partner. Swartz, in fact, had no knowledge of the
certificate and never had agreed to be a partner. Because of Cruise’s reliance on the
certificate and the statement that Swartz was a partner, Swartz has a partner’s liability
insofar as Cruise is concerned.
A consumer may waive all defenses otherwise provided for by law.
The Securities Exchange Act of 1934 is concerned with the secondary distribution of
securities in the national securities markets and in the over-the-counter markets.