Under the Federal Unemployment Tax Act, employers are exempted from paying
unemployment taxes.
If an agency terminates by operation of law, there is no duty to notify third parties about
the termination.
The articles of incorporation must contain the name and address of every incorporator.
Section 5 of the Federal Trade Commission (FTC) Act gives FTC the authority to bring
an administrative proceeding to attack a deceptive or unfair practice.
Default is a situation where the debtor has not made payment when it is due.
General government regulation establishes an individual code or laws to every type of
business and industry.
The person or entity to receive the trust corpus on the termination of the trust is called
the remainder beneficiary.
The categorical imperative “Do unto others as you would have them do unto you” is an
illustration of Kantian ethics.
Transfer warranties cannot be disclaimed if the indorsement states “without recourse.”
Dual agencyoccurs when an agent acts for two or more different principals in the same
transaction.
Duress is a situation in which one party threatens to do a wrongful act unless the other
party enters into a contract.
A gift causa mortis is an irrevocable present transfer of ownership during the donor’s
lifetime.
A secured transaction is one in which the creditor and debtor carry out financial
transactions in a secure medium, such as a private communication channel.
Which of the following is true of a qualified indorsement?
A) An instrument containing a qualified indorsement can only be negotiated once.
B) An indorsement once qualified will protect all subsequent indorsers.
C) A qualified indorsement protects only the indorser who wrote the indorsement.
D) A qualified indorsement obligates the indorser to pay in case the maker defaults.
Which of the following is true of misrepresentation?
A) A misrepresentation is not actionable unless the innocent party relied on the
misrepresentation and acted on it.
B) An innocent party who acts in reliance on a misrepresentation need not justify his or
her reliance.
C) An innocent party must prove that the wrongdoer’s misrepresentation was the sole
reason he or she entered into the contract.
D) An innocent party need not prove economic injury to recover damages for fraud.
Which of the following is true of a franchise?
A) The franchisor and franchisee are established as separate legal entities.
B) A franchisee does not need a license to use the franchisor’s trademark.
C) The franchisee does not have access to the franchisor’s knowledge.
D) A franchise is considered a joint venture.
Which of the following statements is true of certified checks?
A) Banks are obligated to certify checks for amounts greater than $10,000.
B) Certified checks are payable at any time from the date they are issued.
C) A drawer can stop payment on a certified check if it is indorsed.
D) Banks can charge a fraction of the check value as a fee for certifying it.
When is the parol evidence rule used in contracts?
A) when a written confirmation has not been sent for an oral contract
B) when the party against whom the enforcement of an oral contract is sought has not
admitted of such a contract in pleadings
C) when an oral modification is required in a written contract
D) when there is a written statement that contradicts an agreed-on written contract
Which of the following is true with regard to the new engine, upholstery, and stereo
player the thief installed in John’s car?
A) These improvements have to be returned to the thief.
B) These improvements now rightfully belong to John.
C) The improvements have to be paid for by John if he wants to retain them.
D) The improvements will be confiscated by the police.
Which of the following is true of undue influence in entering contracts?
A) Undue influence need not require the overcoming of the innocent party’s free will.
B) Undue influence is not grounds for prosecution, as the innocent party has complete
freedom to evaluate the terms of the contract.
C) A contract that is entered into because of undue influence is not voidable.
D) A fiduciary or confidential relationship must have existed between the parties for
undue influence to be proven.
Which of the following is a definition of a foreign corporation?
A) A corporation with incorporations in multiple states.
B) A corporation in the state in which it is incorporated.
C) A corporation in states other than the one in which it is incorporated.
D) A corporation in the United States which has been incorporated in another country.
A(n) ________ is an increase in the value of personal property because it is added to or
improved by natural or manufactured means.
A) arraignment
B) accession
C) lien
D) bailment
Which of the following statements is true of the fault rule when an engagement is
broken?
A) If the person who accepted the engagement ring breaks off the engagement, the ring
will be owned by the person who marries first.
B) If the person who accepted the engagement ring breaks off the engagement, he or
she can retain the engagement ring.
C) If the person who gave the engagement ring breaks off the engagement, the other
side can rightfully keep the engagement ring.
D) If the person who gave the engagement ring breaks off the engagement, the ring is
sold at an auction and the proceeds are shared between both parties.
The ________ is a federal statute, enacted in 1930, that prohibits price discrimination.
A) Sherman Act
B) Clayton Act
C) Robinson-Patman Act
D) Federal Trade Commission Act
________ is seen when an independent choice is made by one party not to deal with
another party.
A) Nonprice vertical restraint
B) Monopoly to deal
C) Unilateral refusal to deal
D) Conscious parallelism
Which of the following is true for the passage of title in a contract requiring a document
of title?
A) The title passes when the shipping arrangements are made.
B) The title passes at the time and place of contracting.
C) The title passes when the destination of delivery is first mentioned in the contract.
D) The title passes when and where the seller delivers the document to the buyer.
Susan purchases goods by telephone from Parker. Susan has never met Parker. Brenton
goes to Susan and pretends to be Parker. Susan draws a check payable to the order of
Parker and gives the check to Brenton, believing him to be Parker. Brenton forges
Parker’s indorsement and indorses the check to his brother, William, with the term
“without recourse.” William then cashes the check at a liquor store. Under the imposter
rule, who is liable on the check?
A) Brenton
B) the liquor store
C) Susan
D) William
Which of the following statements is true of nominal damages?
A) They are also known as compensatory damages.
B) Only damages above $1,000 can qualify as nominal damages.
C) Most courts favor nominal damages lawsuits.
D) They are awarded even when a breach did not result in financial loss.
A power of attorney is an example of a(n) ________ agreement.
A) agency by ratification
B) apparent agency
C) express agency
D) implied agency