If Eilene, a shareholder, sues in a derivative suit, the judgment will be paid to:
a. the shareholders as a dividend.
b. Eilene directly.
c. the corporate treasury.
d. the board of directors.
If a small manufacturer of vacuum cleaners conditions the sales of its cleaners on the
buyer’s purchasing only that manufacturer’s bags, under the Sherman Act this is:
a. illegal per se.
b. a tying arrangement, which will be closely scrutinized by the law.
c. a vertical customer restriction.
d. no violation.
The Revised Act authorizes the articles of incorporation to include a provision
eliminating or limiting, with certain exceptions, the liability of a director to the
corporation or its shareholders for any action he takes, or fails to take, as director. These
limitations or exceptions, for which liability would not be affected, include:
a. the amount of any financial benefit the director receives to which he is not entitled,
such as a bribe, kickback, or profits from a usurped corporate opportunity.
b. an intentional infliction of harm on the corporation or the shareholders.
c. liability under Section 8.33 for unlawful distributions.
d. All of the above.
A restrictive indorsement:
a. disclaims contract liability.
b. removes warranty liability.
c. attempts to restrict the rights of the indorsee in some fashion.
d. always destroys negotiability.
Margaret has $3,200 cash after selling off her television, stereo, and personal computer.
She has debts of $4,800 owing to the following creditors:
Anna: $900
Bob’s Shop: $1500
Hyatt’s: $2100
Jones: $300
If they all agree to a composition agreement, how much will Hyatt’s be able to collect?
a. $2,100.
b. $1,400.
c. $700.
d. $1,050.
Speedy Stop sells necessities to neighborhood shoppers until 1 a.m. every day.
Dairyland delivered its order of milk products as usual around 6 a.m. while Mary, the
shopkeeper, was busy with the early coffee and donut crowd. The Dairyland driver left
12 crates in the refrigerator compartment and went on to the rest of his route. At 7:30
a.m., Mary started to shelve the milk products and discovered that all 12 crates
contained buttermilk rather than the usual mix of containers of whole milk, 2%, skim
milk, and cream she had ordered. What is her obligation with regard to the goods?
A debtor will be denied a Chapter 7 discharge if he or she has received a Chapter 13
discharge within the past six years:
a. unless payments under that Chapter’s plan totaled at least 100 percent of allowed
unsecured claims.
b. unless payments under Chapter 13 totaled at least 70 percent of allowed unsecured
claims and the plan was the debtor’s best effort.
c. in all events.
d. Both (a) and (b).
Which equal protection test is applied to cases based on gender and legitimacy?
a. The rational relationship test.
b. The strict scrutiny test.
c. The intermediate test.
d. All of the above.
Rorzex, Inc. entered into a contract with Denzil under the terms of which Denzil would
receive $20,000 if he stole trade secrets from the leading competitor of Rorzex. Denzil
performed his end of the agreement by delivering the trade secrets. Rorzex now refuses
to pay Denzil for his services. Denzil:
a. may recover based upon the express contract of the parties.
b. may recover based upon a quasi-contractual theory in order to prevent the unjust
enrichment of Rorzex.
c. will be unable to recover, because this is an illegal contract.
d. will be able to recover based upon promissory estoppel, because he has detrimentally
relied upon the promises made by Rorzex.
If shareholders agree in writing to vote in a specified manner for election or removal of
directors, this is known as:
a. a proxy.
b. cumulative voting.
c. a voting trust.
d. a shareholder voting agreement.
The doctrine of promissory estoppel:
a. is a doctrine enforcing noncontractual promises.
b. includes as a requirement within the doctrine that there has been justifiable reliance
on the promise.
c. a doctrine relying on justice and not contractual rights.
d. All of the above.
An enabling statute:
a. delegates the power to zone to local city and village authorities.
b. typically allows municipalities to regulate and limit building heights.
c. typically grants the power to limit the intensity of use in a particular area.
d. All of the above.
Charlene hears about a reward being offered by the local television station for
information leading to the arrest and conviction of a local rapist. She supplies the
requested information and the suspect is then arrested and convicted.
a. Charlene cannot collect the money unless the offer was specifically made to her by
the station.
b. The offer by the television station was an offer made to the general public to enter
into a unilateral contract, which offer Charlene has accepted.
c. Because Charlene failed to notify the station of her intention to supply the
information before actually doing so, she has not accepted their offer.
d. Charlene was just doing her duty as a citizen and has no right to the payment of any
money.
The CERCLA trust fund is financed by a:
a. tax on chemical feedstocks.
b. surtax on businesses with annual incomes over $2 million.
c. tax on petroleum.
d. All of the above.
To establish a private nuisance, a plaintiff:
a. must show that the defendant has substantially and unreasonably interfered with the
use and enjoyment of the plaintiff’s land.
b. must, in an action for damages in conjunction with private nuisance, show that the
defendant’s conduct was unreasonable.
c. need not show that the interference was unreasonable.
d. must show an invasion that interferes with the plaintiff’s right of exclusive possession
of the property.
Most states, as well as the Revised Act, hold that the test for the duty of diligence
requires a director or officer to discharge corporate duties:
a. in good faith.
b. with a high degree of care.
c. without a conflict of interest.
d. through a named attorney or legal firm.
A ‘sale” of goods happens when:
a. the parties agree.
b. the parties sign the contract.
c. title to the goods is passed.
d. a promise to transfer title is made.
Northstar Sporting Goods sells consumer goods to Lena for $85 and provides a written
warranty regarding the quality of the goods. Northstar:
a. must designate the warranty as full or limited.
b. may disclaim any and all implied warranties as long as the disclaimer is conspicuous.
c. may modify the implied warranties.
d. All of the above.
The National Conference of Commissioners on Uniform State Laws:
a. was created by President Bill Clinton to study and report on the Uniform Commercial
Code.
b. is another name for the American Law Institute.
c. has drafted only five uniform laws: the UCC, the Uniform Partnership Act, the
Uniform Limited Partnership Act, the Uniform Probate Code, and the Model Business
Corporation Act.
d. has drafted over 250 uniform laws.
A defendant who is indicted will next be:
a. jailed.
b. tried.
c. arraigned.
d. prosecuted.
Matthew decides to invest in the stock of a television production company after he
reads Edgar’s audit, which includes a known falsity as to the value of numerous
worthless securities held as corporate assets. If Matthew sues Edgar, he will be entitled
to:
a. nothing, in a majority of states, since the class of foreseen users of the audit contract
does not include potential investors and the general public.
b. compensatory damages, in a majority of states, if he is a foreseen user of the audit.
c. nominal damages only.
d. rescission of his purchase contract.
The debtor who grants a mortgage is the mortgagee.
Identify the three types of patents, their requirements, and duration.
What are the remedies available for violations of the Civil Rights Act of 1964?
Theresa has just started working for First Bank as a teller. A man comes into the bank
with a $100 check that is eight months old. She goes to the manager to ask whether she
should pay it. If you were the manager, what would you advise her? Explain.
Characterizing a type of restraint as per se illegal significantly affects the prosecution of
an antitrust suit.
If negligence of the plaintiff and negligence of the defendant proximately caused the
injury and damage sustained by the plaintiff, the plaintiff can recover some damages in
those states where contributory negligence is still recognized.
Psychologist Lawrence Kohlberg observed that people progress through sequential
stages of moral development according to the two major variables of age and reasoning.