The cap on monetary damages statute holds that the maximum liability that may be
imposed on directors:
A. is the greater of $100,000 or the amount of cash compensation that the director
received from the corporation during the previous 24 months.
B. is the greater of $100,000 or the amount of cash compensation that the director
received from the corporation during the previous 12 months.
C. is the greater of $50,000 or the amount of cash compensation that the director
received from the corporation during the previous 12 months.
D. is the greater of $100,000 or the amount of cash compensation that the director
received from the corporation during the previous 36 months.
Answer:
The promise or order in an instrument must be to pay:
A. a fixed amount of money.
B. an undefined amount of money.
C. an amount of money subject to a condition subsequent.
D. the equivalent of the amount specified in any medium on demand.
Answer:
Section 18(a) of the 1934 Act:
A. requires that the plaintiff prove reliance.
B. makes an accountant liable for accidental mistakes in the audit.
C. is not triggered by reliance.
D. requires the accountant to prove that he exercised due diligence.
Answer:
Which of the following statements is TRUE about health insurance contracts?
A. Health insurance contracts do not provide coverage for medical expenses resulting
from preexisting conditions.
B. Most people receive their insurance coverage from individual policies that are
provided by employers.
C. The Consolidated Omnibus Budget Reconciliation Act (COBRA) was enacted as a
legislative response to the increasing popularity of group health policies.
D. Portable health insurance doesn’t require insurance companies to provide coverage to
people who have left a job.
Answer:
Which of the following is TRUE of a joint will?
A. Whether a joint will is revocable depends only on the language of the will.
B. The mere fact that a joint will has been executed creates the presumption of a
contract not to revoke the will.
C. Underlying a joint will is an agreement on a common plan.
D. A testator who has made a joint will cannot change the will later under any
circumstances.
Answer:
A person who is induced to enter a contract by the misrepresentation of an agent has
the same remedies as if he had contracted with any person who made a _____.
A. misrepresentation
B. duress
C. undue influence
D. fraud
Answer:
If the U.S. Congress enacts a federal statute regulating the sale of automatic weapons
and Kentucky passes a state law which conflicts with the federal law, Kentucky’s law is
said to be:
A. impliedly preempted.
B. void-for-vagueness.
C. expressly preempted.
D. prevailing.
Answer:
When a person dies intestate, the property the person owns:
A. is distributed to the people designated as the intestate’s heirs.
B. will be distributed according to the law of the state in which the person is domiciled.
C. escheats to the state.
D. will go to the biological children, not the adopted children.
Answer:
Which of the following statements concerning the Magnuson-Moss Warranty Act is
TRUE?
A. The act applies to all sellers of a “consumer product” that costs more than $50.
B. The act requires a seller of consumer goods to give a written warranty, either full or
limited.
C. The FTC enforces the disclosure provisions of the warranty act and regulations.
D. The act requires a full warranty to have a time limit.
Answer:
If Guss agrees to sell his house to Pam for $300,000, a property which is actually worth
$200,000:
A. Pam can recover damages for breach of contract if Guss refuses to perform.
B. Pam will be able to get a court order for the specific performance of Guss’ promise
(ordering Guss to give Pam a deed to his house).
C. Guss is not entitled to equitable remedies.
D. Pam cannot recover damages for breach of contract.
Answer:
Which of the following run the risk of unlimited personal liability?
A. Partners in a general partnership
B. Partners in a limited partnership
C. Corporate shareholders
D. Shareholders in S Corporations
Answer:
For an assigned claim to be valid:
A. the assignee must have the capacity to contract.
B. the contract must not be illegal or known by the assignor to be voidable.
C. the contract must have been discharged once prior to the assignment.
D. the assignee must have good title before the rights are assigned.
Answer:
Under Revised Article 3, when multiple forgeries are made by the same wrongdoer, the
customer generally cannot hold the bank responsible for paying, in good faith, any such
checks after an alteration was available to the customer for a reasonable period, not
exceeding:
A. 10 working days.
B. 30 calendar days.
C. 60 calendar days.
D. 14 working days.
Answer:
A liquidated damages provision will be enforced only when:
A. the subject matter of the contract has a value which cannot be put in monetary terms.
B. the amount specified is reasonable and actual damages would be difficult to
determine.
C. the nature of the contract is such that damages would not be difficult to determine.
D. the amount agreed on is not the injured party’s only remedy.
Answer:
A person who commits a crime under instructions from her principal:
A. is relieved from liability if committed within the scope of employment.
B. is guilty of the crime because the agent’s duty to society overrides the duty to follow
the direction of the principal.
C. is guilty of the crime because newly revised criminal codes will almost always
impose liability on the third party.
D. is relieved from liability if the crime is committed to accomplish the objectives of
the agency.
Answer:
Jane appointed Tom as her agent and gave him express authority to retain subagents to
do some or all of Tom’s work. Tom retained Mike as a subagent. Based on these facts,
which of the following statements is TRUE?
A. Only Jane is bound to a third party by Mike’s actions.
B. Neither Jane nor Tom is bound to a third party by Mike’s actions as subagent.
C. Between Jane and Tom, it is Tom who is ultimately liable for Mike’s actions as
subagent.
D. Mike is solely bound to third parties for his actions as subagent.
Answer: