The U.S. Supreme Court generally disfavors arbitration as a way to settle disputes.
Answer:
A creditor of a partner can attach any property owned by the partnership.
Answer:
The plaintiff in a contract action has no duty to mitigate his damages because he is the
injured party.
Answer:
The insurer may not exercise a right of subrogation if it is required to pay for the loss
of property under a fire insurance contract.
Answer:
An enterprise that conducts its affairs in interstate commerce cannot be incorporated in
a state other than the state in which the principal offices are located.
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Employment contracts are assignable.
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When a promisee agrees not to do something he or she has a legal right to do in
exchange for the promisor’s promise, it constitutes legal value.
Answer:
Under the E-Sign Act, digital signatures are given the same effect as written ink on
paper.
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A partner cannot terminate an ordinary partnership at will.
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Independent agencies are a part of the executive branch of the government and are
under the control of the president.
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A continuing partnership becomes liable for the debts incurred by the original
partnership.
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In case of an indorsement for collection, any person other than a bank who purchases
the check is considered to have converted the check unless the indorser received the
amount paid for it.
Answer:
Unlike legal positivists, legal sociologists stress the need for law to change and keep
pace with the evolution of society.
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A contract is voidable even if duress and undue influence are both exerted much later
after the contract has been entered into.
Answer:
Under Section 11 of the 1933 Act, the issuer of securities with a defective or
misleading registration statement:
A. cannot escape liability to any buyer of the securities for damages caused by the
defective registration statement.
B. can escape liability if the issuer is a director who hasn’t signed on the registration
statement.
C. can escape liability only if the buyer proves that serious damage resulted from his
reliance on the misstatements in the registration document.
D. can escape liability if the issuer proves that the buyer of the securities did not read
the registration statement.
Answer:
Susan borrows $1,000 from Jack and gives him a promissory note for $1,000 at 9
percent annual interest payable in 90 days. Jack indorses the note “Pay to the order of
Robin” and negotiates the note to Robin. At the end of 90 days, Robin takes the note to
Susan. Under these circumstances:
A. if Susan dishonors the note Robin can hold Jack secondarily liable without giving
him notice of the dishonor.
B. if Susan dishonors the note, Robin cannot sue Susan on the basis of her maker’s
obligation.
C. if Susan dishonors the note, Robin cannot hold Jack secondarily secondarily liable
on his indorsement.
D. if Susan pays Robin the $1,000 and accrued interest, she can have Robin mark it
“paid” and give it back to her.
Answer:
Which of the following is TRUE for current trends in landlord’s tort liabilities?
A. The landlord will have liability only under standard housing codes and not under the
implied warranty of habitability.
B. The landlord will be not liable for lack of reasonable care in their maintenance of the
leased property.
C. The landlord will not be liable to protect tenants from substantial risks of harm
created by other tenants.
D. The landlord will have liability for defects that he/she had reasonable opportunities
to repair, but didn’t.
Answer:
A bank that knows of a customer’s death:
A. cannot pay checks written by the customer.
B. can pay checks written by the customer for a period of 10 days.
C. can pay checks written by the customer for a period of 14 days.
D. cannot pay checks written by the customer till authorized by the heirs.
Answer:
A financing statement is valid for a period of:
A. five years from the date of filing.
B. one year from the date of filing.
C. two months from the date of filing.
D. five months from the date of filing.
Answer:
The disposal of wastes into wells is a focus of:
A. the Clean Water Act.
B. the Marine Protection, Research, and Sanctuaries Act.
C. RCRA.
D. the Safe Drinking Water Act.
Answer:
The tendency to internalize group values and suppress critical thought is known as:
A. risky shift.
B. social loafing.
C. herd behavior.
D. groupthink.
Answer:
Mack’s Bar sent Olive Outlet an order for 200 cases of olives, to be shipped “as soon as
possible.” The day Olive Outlet receives Mack’s order it does not have 200 cases of
olives in stock, so it sends Mack 140 cases of olives and 60 cases of onions. Olive
Outlet notifies Mack that they are shipping the onions in lieu of olives. Later that day,
Mack phones the Outlet and tries to revoke his offer. Under the UCC, which of the
following statements holds TRUE to this situation?
A. Mack’s bar must accept the shipment as they were notified.
B. Olive Outlet has accepted and breached the contract.
C. Olive Outlet’s shipment is considered a counteroffer.
D. Mack’s bar must reject the shipment as the goods are nonconforming.
Answer:
When a consumer debtor completely fulfills all debts and obligations secured by a
financing statement, he/she is entitled to a:
A. continuation statement.
B. termination statement.
C. statement of benefits.
D. statement of claims and defenses.
Answer:
Farmer Fred died in 1933 and in his will named his three sons, Ted, Ned, and Ed,
owners of his farm as tenants in common. Ted and Ned were city slickers, but Ed lived
on the farm and worked it from 1933 until the present. Ted and Ned gave Ed permission
to live on the farm and keep the profits. Ed paid all property taxes and repair bills. Ted
and Ned decided in 1990 that they wanted to retire and live on the farm. Can Ed claim
sole ownership of the farm by adverse possession?
A. No, because Ed’s possession was not open and notorious.
B. No, because Ed’s possession was not hostile.
C. Yes, because Ed paid the property taxes on the farm.
D. Yes, because Ed was willed as joint owner.
Answer:
____ is defined as use by a person who lacks express, implied, or apparent authority to
use a credit or debit card.
A. Authorized use
B. Rescissionary use
C. Undisclosed use
D. Unauthorized use
Answer:
The directors of Acme Corp. unanimously approved a merger agreement between
Acme and Generic, Inc. The MBCA is in effect in the state where both corporations
were incorporated. The two corporations begin performing the various duties set out in
the merger agreement. Certain shareholders of Acme then institute suit in an effort to
block the merger agreement from being implemented. The shareholders maintain that
the proposed merger should have been submitted to them for approval. Nothing in
Acme’s articles of incorporation requires the directors to submit such matters to the
shareholders. The directors claim that the merger was carefully considered and is in the
best interests of the corporation. Under these circumstances:
A. the directors will prevail if they can prove that the merger was in the corporation’s
best interests.
B. the shareholders will be successful in their suit because under the MBCA, approval
of all classes of shares is required for a merger or consolidation.
C. the directors will prevail because the MBCA gives them the right to overrule the
shareholders’ decisions in mergers.
D. the shareholders will not be successful in their suit because the directors have acted
in the best interests of the corporation.
Answer:
____ is an example of an illegal wager.
A. Stock transactions
B. Betting on the performance of a stock
C. Commodity transactions
D. Risk shifting agreements
Answer:
The objective of providing remedies for breach of a sales contract is to:
A. punish the breaching party.
B. encourage parties to rely on trade practices rather than express terms.
C. put the injured person in the same position as if the contract has been performed.
D. encourage parties to rely on written contracts rather than oral contracts.
Answer:
To recover in a negligence suit, a plaintiff must prove that the:
A. defendant had intent to injure the plaintiff and did so by a breach of duty.
B. defendant’s breach of duty was the proximate cause of the plaintiff’s injuries.
C. defendant’s breach of duty indirectly caused the plaintiff’s injuries.
D. defendant’s actions did not violate any statutes.
Answer:
If an offeree dispatches both an acceptance and a rejection to an offer:
A. the acceptance is effective as soon as it is dispatched and a contract is created.
B. the rejection is effective as soon as it is dispatched and no contract can be created.
C. neither the acceptance nor the rejection is effective and another response must be
issued.
D. whichever response reaches the offeror first will determine whether a contract is
created.
Answer:
If articles of incorporation provide for a limited life:
A. the corporation automatically terminates at the end of the designated time.
B. the corporation must appeal to the Secretary of State for dissolution.
C. the corporation dissolves only by amendment to the contract.
D. the corporation terminates at the end of the designated time only with the written
consent of all shareholders.
Answer:
The Fair Credit Reporting Act (FCRA) covers credit information supplied to potential
____.
A. dealers
B. employers
C. debtors
D. brokers
Answer:
A _____ occurs when property is leased for an indefinite period of time and either party
may choose to conclude the tenancy at any time.
A. tenancy at will
B. tenancy at sufferance
C. periodic tenancy
D. tenancy for a term
Answer:
According to the traditional judicial rule, under which of the following situation can
courts pierce the corporate veil?
A. When there is undercapitalization coupled with strict adherence to corporate
formalities.
B. When there is strict adherence to corporate formalities such as holding shareholders’
but not directors’ meetings.
C. When there is undercapitalization.
D. When shareholders mixed their personal dealings and corporate transactions as if all
were professional.
Answer:
All the elements of misrepresentation, and the fact that the misrepresentation was
knowingly made with the intent to deceive, have to be established to prove _____.
A. scienter
B. duress
C. fraud
D. unilateral mistake
Answer:
Which of the following payments is considered preferential?
A. Payments made in the ordinary course of business.
B. Payment of monthly utility bills.
C. Payment made by an insolvent debtor within 50 days of the filing of the bankruptcy
petition.
D. Payment to a creditor giving him a greater percentage of a preexisting debt than
other creditors.
Answer:
Lydia borrows $500 for textbooks from Gerry. She gives Gerry the authority to sell her
DVD player to satisfy his claim if she does not pay the loan back as promised. She does
not pay the loan back as promised. Under these circumstances:
A. a dual agency exists.
B. Lydia can revoke Gerry’s power if the books are damaged.
C. if Lydia dies, there is termination of the agency even if the debt remains unpaid.
D. Lydia cannot revoke Gerry’s power to sell the DVD player.
Answer:
In an insurance contract, the payment of consideration is called a(n):
A. issue.
B. negotiable instrument.
C. premium.
D. valued policy.
Answer:
A purchase money security interest in noninventory collateral prevails over a prior
perfected security interest if:
A. the purchase money security interest is perfected at the time the debtor takes
possession or within 20 days afterward.
B. the purchase money secured party gives notification in writing to the prior secured
creditor before the debtor receives the inventory.
C. the holder of the competing security interest received notification within five years
before the debtor receives the inventory.
D. the notification states that the person expects to acquire a purchase money security
interest in inventory of the debtor and describes the inventory.
Answer:
Fully explain the concept of substantial performance.
Answer:
What are the primary purposes of the Bankruptcy Code?
Answer:
After Bart and Veronica were involved in an automobile accident, Bart retained
Rhonda as an attorney to negotiate an out-of-court settlement. After a lengthy
discussion with Veronica’s insurance company, Rhonda settled the case for $5,000.
However, Bart personally rejected the $5,000 offer. Veronica filed suit to enforce the
settlement, claiming that Rhonda was authorized to accept the settlement on behalf of
Bart. Discuss Rhonda’s express, implied and apparent authority.
Answer:
Explain the process followed by the court to determine the intent of the parties to enter
into a contract, if a dispute arises before the written draft of agreement is created?
Answer:
Nick bought a diamond ring on credit from Rike as an engagement present for his
fiancée. He signed a purchase money security agreement giving Rike a security
interest in the ring until it was paid for. Rike did not file a financing statement covering
its security interest. Nick filed for bankruptcy. The bankruptcy trustee claimed that the
diamond ring was part of the bankruptcy estate because Rike did not perfect his security
interest. Rike claimed that it had a perfected security interest in the ring. Did Rike have
to file a financing statement to perfect its security interest in the diamond ring?
Answer: