A general partner, but not a limited partner, may be either a secured or unsecured
creditor of the partnership with the same rights as a person who is not a partner.
a. True
b. False
The RUPA treats a partnership as a legal entity in all but which of the following
respects?
a. Title to partnership property
b. Continuity of existence
c. Legal actions by and against the partnership
d. Unlimited liability for partnership obligations
Implied warranties under the Code:
a. may arise from course of dealing or usage of trade.
b. are a result of specific language in the sales contract.
c. continue the common law rule of caveatemptor.
d. are intended to protect the seller rather than the buyer.
a. What are the three essentials of an offer?
b. How does one distinguish between an offer and an invitation seeking offers?
Master Ink owns all the stock of Prime Pen Co. A Prime Pen employee commits a tort
for which the employer is liable. The suit results in a judgment for $1 million against
Prime Pen. Prime Pen assets total $650,000, but Master Ink’s assets are in the millions.
In which of the following situations would the judgment have to be paid by Master Ink?
a. The Master Ink board of directors is exactly the same as Prime Pen’s.
b. The president of Master Ink is also the vice president of Prime Pen.
c. Prime Pen’s income and Master Ink’s income is held in one account.
d. None of these.
Brightstone Co. and Allsale Co. enter an oral contract providing Allsale will provide
100 dozen toys at $50 per dozen to Brightstone. Brightstone faxes a letter to Allsale
acknowledging the agreement, but stating only the quantity, not the price. Allsale:
a. cannot raise the defense of the statute of frauds if Allsale did not object to the letter
within ten days after receiving it.
b. cannot raise the defense of the statute of frauds since it is a merchant.
c. can raise the defense of the statute of frauds since the oral agreement was for the sale
of goods with a price of $500 or more.
d. can raise the defense of the statute of frauds since the writing did not contain all the
material terms of the agreement.
The Sherman Act:
a. protects U.S. exports from privately imposed restrictions seeking to exclude U.S.
competitors from foreign markets.
b. would not apply to an act committed in the United States by a foreign corporation.
c. would not apply to an act overseas by a 100 percent-owned foreign subsidiary of an
U.S. corporation.
d. never applies to acts committed outside the U.S.
Cynthia Todd is the holder of a check with the indorsement “Adam Brock.” To protect
herself, Cynthia may:
a. convert the special indorsement to a blank indorsement.
b. convert the special indorsement to a qualified indorsement.
c. write above Adam’s signature, “Pay Cynthia Todd.”
d. not convert the indorsements, but could only protect her interest in the check by
depositing it in her account as soon as possible.
The bankruptcy court may dismiss a:
a. Chapter 7 case, or in a case filed by an individual debtor whose debts are primarily
consumer debts, may with
or without the debtor’s consent convert the case to a Chapter 11 or 13 case.
b. Chapter 7 case for cause after notice and a hearing.
c. Chapter 11 case for cause without notice and a hearing.
d. Chapter 13 case under no circumstances.
In some states, the authority of an agent to sell land must be in writing and signed by
the principal.
a. True
b. False
A mental condition that impairs a person’s ability to act in a reasonable manner is one
type of mental incompetence.
a. True
b. False
A major defense to the Age Discrimination in Employment Act is compliance with a
bonafideseniority system.
a. True
b. False
A valid assignment requires that notice be given to the obligor.
a. True
b. False
The Clayton Act deals with interlocking directorates.
a. True
b. False
A person with a life estate cannot do which of the following?
a. Strip-mine the land
b. Build a bridge over the river
c. Cut a single tree
d. Put a new roof on the house
Directors ordinarily serve until someone who wants the position calls for an election.
a. True
b. False
Informal rulemaking procedure does not require prior notice of a proposed rule.
a. True
b. False
A person who falls asleep while driving would not be liable for any resulting injury
since it would be an unavoidable accident.
a. True
b. False
What limits are imposed on administrative agencies by each of the following: (a) the
courts; (b) Congress; and (c)
the executive branch?
The Second and Third Restatements are the same regarding when an agent’s apparent
authority ceases.
a. True
b. False
The Fair Labor Standards Act regulates employment of child labor inside agricultural
settings.
a. True
b. False
Under Article 3, the employer is allowed to recover from its bank, despite the
applicability of the fictitious payee rule, if the bank failed to exercise ordinary care in
paying the instrument.
a. True
b. False
At common law a promise under a seal to authenticate it was effective without anything
more.
a. True
b. False
In most cases, the collecting bank is the same as the payor bank.
a. True
b. False
The Federal Organizational Corporate Sentencing Guidelines may require restitution to
victims of certain corporate crimes.
a. True
b. False
Restitution can be obtained where a voidable contract is avoided.
a. True
b. False
Taxes are imposed at death by the federal government in the form of an inheritance tax
and by the state government in the form of an estate tax.
a. True
b. False
A person who receives a share of the profits of a business is presumed to be a partner.
a. True
b. False
Which of the following is NOT an advantage of a partnership?
a. Partners’ income taxes may be less than the income taxes would be on a corporation.
b. Each partner has limited liability.
c. It is possible to bring together more managerial skills than in a sole proprietorship.
d. It is possible to bring together more capital than in a sole proprietorship.
Georgia’s company may lawfully discover Samantha’s company’s trade secrets if
Samantha’s company fails to take reasonable precautions to protect their trade secrets.
a. True
b. False
Which of the following is not true?
a. To have the full benefit of negotiability, negotiable instruments not only must meet
the requirements of negotiability but also must be acquired by a holder in due course.
b. A transferee of a negotiable instrument can acquire rights no greater than those of the
transferor.
c. A holder in due course takes a negotiable instrument free of most of the defenses to
which an assignee would be subject.
d. The number of checks written each year has decreased in recent years.
There are two distinct types of fraud.
a. True
b. False
A person, who represents himself to third persons as being a partner, when in fact he is
not, may have the liability of a partner.
a. True
b. False
When both parties misunderstand the same set of facts relating to a basic assumption on
which a contract is made, it is termed:
a. rescissionary mistake.
b. unilateral mistake.
c. mistake of law.
d. mutual mistake.