1) A financing statement is an agreement that creates or provides for a security interest.
2) Insurance companies must spend at least 85 percent of all premium dollars from
large employers on benefits and quality improvements.
3) A franchisee is generally economically independent of the franchisor’s integrated
business system.
4) Any oil facility that discharges oil into navigable waters or onto an adjoining shore
may be liable for cleanup costs, as well as damages.
5) The UCC requires that a financing statement be filed under the name of the creditor.
6) One of the basic elements of zoning is the classification of land by permissible use as
part of a comprehensive municipal plan.
7) A person who is obtaining insurance from an insurance company’s agent is not
usually protected until a formal written policy is issued.
8) When all the judges (or justices) agree on a decision, a majority opinion is written for
the entire court.
9) Under rules of professional misconduct, an attorney should not engage in conduct
involving deceit.
10) The registered agent is the person who can receive legal punishment (such as fines
and imprisonment) on behalf of the corporation.
11) The theft of trade secrets is a federal crime.
12) Riverside Ranch is a horse breeding facility. Steed Stables is a customer looking for
a new stallion for its breeding program. Riverside’s representative Tomas shows Steed a
stallion that he says is very fertile and can easily breed twenty mares per year. This
statement is
a.an express warranty.
b.an implied warranty.
c.a warranty of title.
d.puffery.
13) Boutique Bodega Corporation would like to change its corporate status to that of an
S corporation to avoid income taxes at the corporate level. To qualify, the shareholders
must not be
a.corporations.
b.estates.
c.individuals.
d.partnerships.
14) Home & Hearth Furniture, Inc., and Inez, a consumer, enter into a contract for a
sale of a suite of bedroom furniture. If the contract includes a clause that is perceived as
grossly unfair to Inez, its enforcement may be challenged under the doctrine of
a.good faith.
b.impracticability.
c.square dealing.
d.unconscionability.
15) Free-Flo Pipes & Plumbing Corporation is a private employer involved in an
employment discrimination suit under the Civil Rights Act of 1964. Punitive damages
may be recovered against Free-Flo only if the employer
a.acted with malice or reckless indifference.
b.can easily afford to pay the amount.
c.has one hundred or more employees.
d.consents.
16) On July 10, Pet Supply Store orders fifty small dog collars from Quality Collars,
Inc. to be delivered by July 15. On July 13, Quality Collars tenders fifty large dog
collars. Pet Supply rejects the shipment. Quality Collars has
a.no right to cure.
b.until July 15 to cure.
c.until the end of the business day on July 13 to cure.
d.unlimited time to cure.
17) The U.S. Food Safety and Inspection Service conducts searches of certain
businesses. This agency and other administrative agencies can conduct warrantless
searches in
a.all industries.
b.highly regulated industries.
c.no industries.
d.newly regulated industries only.
18) Fact Pattern 32-1B
Margo works as an administrator and receptionist in Neon’s Garage Door Store. Neon
withholds federal taxes from Margo’s pay, and controls the methods and details of the
performance of her work. Margo is not authorized to modify the prices or other terms of
a sale at the store. Omar installs Neon’s Garage Door products at the buyers’ locations.
Refer to Fact Pattern 32-1B. Neon authorizes Omar to sell garage door upgrades and
accessories at the buyers’ locations at prices that Omar negotiates with those buyers.
With respect to sales at those locations, Omar is
a.an independent contractor.
b.Neon’s employee only.
c.Neon’s employee and agent.
d.Neon’s principal.
19) Drill Makers, Inc., and Edge Mine & Mill Supply Stores enter into a contract for a
sale of mining drill bits. The contract indicates that the price includes transportation
costs to a specific destination by including the term
a.C.I.F.
b.delivery ex-ship.
c.F.A.S.
d.F.O.B.
20) 8.Ralph is interested in buying a franchise from Sparkle Beverages Inc. For Ralph
to make an informed decision concerning this purchase, Sparkle Beverages must
disclose in writing or online
a.general estimates of costs and sales, but not the basis for them.
b.material facts such as the basis of projected earnings figures.
c.no information.
d.start-up requirements, but not renewal conditions.
21) Paige applies to work for Quibbling & Company. Reece applies for admittance to
State University. As part of their applications, Paige and Reece are asked to divulge
their social media passwords. Legislation that protects individuals from having to
disclose their social media passwords has been enacted in
a.no states.
b.most states but not by the federal government.
c.all states and by the federal government.
d.four states.
22) ApartmentsRUs, a property management firm, presents a standard-form lease for an
apartment to Barnaby, a potential tenant. ApartmentsRUs does not pressure Barnaby to
sign the lease, but offers it on a take-it-or-leave-it basis. Barnaby signs the lease, but
later wants to withdraw from the contract. He is most likely to avoid enforcement of the
lease on the ground of
a.economic duress.
b.undue influence.
c.unconscionability.
d.mistake.
23) Marcus files a suit against Naomi in an Ohio state court. Naomi€s only connection
to Ohio is an ad on the Web originating in Pennsylvania. For Ohio to exercise
jurisdiction, the issue is whether Naomi, through her ad, has
a.a commercial cyber presence in Ohio.
b.conducted substantial business with Ohio residents.
c.claimed to be a resident of Ohio.
d.solicited virtual business in Ohio.
24) There are no significant differences between a trial and an administrative hearing.
25) If a promise is made, it can be enforced.
26) The roof in Rosalyn’s house springs a leak. She contracts with Shelter Roofing &
Restoration Company to repair the roof and fix the damage to the house. Rosalyn pays
10 percent of the price in advance. Shelter Roofing does the work, but Rosalyn refuses
to pay the rest of the price. What can Shelter Roofing do, and how is it done?
27) If goods identified to a contract are destroyed through no fault of either party, both
parties are excused from performance.
28) Dennis is a promoter for the soon-to-be-incorporated firm of eBroadcast Sports,
Inc. Dennis signs a contract with Fitz &Geraldo, Accountants, to render their services
before eBroadcast Sportsis incorporated and for one year after the incorporation.
eBroadcast Sportsis incorporated. Three months later, after Fitz &Geraldohas continued
performing under the contract, the eBroadcast Sportsboard of directors tells the
accountants that it is canceling their contract. Fitz &Geraldofiles a suit against Dennis
and eBroadcast Sports, alleging breach of contract. Will Fitz & Geraldoprevail?
29) An indorsement should be identical to the name of the indorsee, regardless of how
the name appears on the instrument.
30) Primary liability on a negotiable instrument is conditional.