The type of authority that arises from acts of the corporation that lead third parties to
believe reasonably and in good faith that an officer has the requisite authority is:
a. actual express authority.
b. actual implied authority.
c. apparent authority.
d. ratification.
Damages a buyer may recover for loss resulting from the buyer’s requirements and
needs of which the seller had reason to know at the time of contracting and which could
not reasonably be prevented by cover, are:
a. incidental.
b. consequential.
c. punitive.
d. liquidated.
A decision of an appeals court in Minnesota would be recorded in the:
a. state’s statutory code.
b. Minnesota administrative code.
c. North Western regional reporter.
d. Federal Supplement.
A restraint involving collaboration among competitors at the same level in the chain of
distribution is:
a. a vertical restraint.
b. a horizontal restraint.
c. price fixing.
d. a trust.
The letters ALJ refer to:
a. American Law Judges.
b. the Administration’s Legal Judge.
c. Administrative Law Judge.
d. Administrative Local Judiciary.
Intentional harm to property includes the torts of:
a. trespass to real and personal property.
b. nuisance.
c. conversion.
d. All of the above.
Refusal of a tender of performance by one party to a bilateral contract will:
a. be treated as a repudiation, excusing the tendering party from further duty of
performance under the contract.
b. not discharge either party from further duty of performance under the contract.
c. be considered a condition subsequent.
d. None of the above.
Which of the following, if any, are requisites for fraud in the inducement?
a. False representation of a fact that is material.
b. Representation is made with knowledge of its falsity and the intention to deceive.
c. The representation is justifiably relied on.
d. All of the above.
In order for a full warranty to be given for a consumer product, the manufacturer must
provide that:
a. the product will be repaired for free.
b. the warranty lasts for at least 10 days.
c. the consumer can opt for replacement if the product is unsatisfactory.
d. consequential damage cannot be excluded.
With respect to the voting rights of shareholders, unless the articles of incorporation
provide otherwise, a shareholder is entitled to:
a. vote only at annual shareholder meetings.
b. one vote for every two shares of stock owned.
c. vote only in person and not by proxy.
d. vote at annual and special shareholder meetings with one vote for each share of stock
owned.
Bill is the accountant for Cheatam and Sons Co. For many years he has kept two sets of
books, one with real figures and another with figures he will use in case the IRS audits.
When Bill, while working on Cheatam’s books, is arrested for fraud, what will happen
to the books?
a. They are privileged communications and therefore inadmissible as evidence against
Bill.
b. They are protected by the Fifth Amendment and therefore are inadmissible.
c. They may be admitted as evidence since the Fifth Amendment does not protect
business records.
d. They may be admitted as evidence only if Bill consented to a search of his offices.
Which of the following remedies is available under the Sherman Act?
a. Injunctions.
b. Consequential damages.
c. Restitution.
d. None of the above.
A preauthorized electronic transfer from a consumer’s account:
a. may be orally authorized at the time the transfer is to be made.
b. must be authorized in writing in advance of the time the transfer is to be made.
c. may be stopped only by written notice to the financial institution at least five
business days before the scheduled date of transfer.
d. is limited to an amount of $500 or less.
Which of the following is enforceable without new consideration?
a. Beth, after reaching the age of majority, promises to pay off a debt she incurred while
a minor.
b. Cheyenne entered a contract to buy a car based on a fraudulent misrepresentation. A
new promise to pay is made without knowledge of the original fraud.
c. Val entered a contract voidable because of mistake. A new promise to fulfill the
contractual obligations that had not previously been avoided and without knowledge of
the mistake is enforceable without new consideration.
d. None of the above. New promises to perform voidable obligations that have not
previously been avoided must always have new consideration.
Which of the following would NOT be exempt from registration under the 1933
Securities Act?
a. An offering restricted to the residents of the state in which the issuing company is
organized and doing business.
b. An offering by a noninvestment company issuer for $4 million in securities over 12
months without general advertising or general solicitation.
c. An offering of limited partnership tax shelters.
d. A private offering to only accredited investors who will not redistribute them.
In some instances, people may be held liable for injuries they have caused even though
they have not acted intentionally or negligently.
Ace Corporation requires a quorum of five directors. If Richard, a director, shows up at
the meeting for a vote on his favorite topic (dividends) and withdraws thereafter,
leaving only four directors, they may not act on any further business.
A buyer who does not cover is precluded from consequential damages that could have
been prevented if the buyer did obtain cover.
The tort of nuisance includes only the trespassory invasion of real property.
Administrative agencies establish rules, and then act as both prosecutor and judge in
determining whether the rules have been violated.
RICO provides for criminal penalties, but contains no provision for civil penalties.
The doctrine of subordination of claims might result in two unsecured creditors getting
unequal proportions of their debts paid.