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1) section 11 of the 1933 act provides civil liabilities for damages when a 1933 act
registration statement on its effective date misstates or omits a material fact.
2) a passive investor who believes she has invested in a corporation has no liability for
the obligations of the business if the corporation has not in fact been formed.
3) customer lists are not patentable but may be subject to trade secret protection.
4) the world intellectual property organization is a leading provider of conciliation for
bad faith action.
5) at the time of interpreting the will, the judge gives preference to the statements of the
beneficiaries rather than the intention of the testator.
6) the death of a partner before the expiration of the term of a partnership is a
nonwrongful dissociation.
7) there is no international copyright that automatically protects a copyrighted work
everywhere in the world.
8) under the doctrine of purported partners, a third party may hold liable persons who
purport to be partners.
9) under the ucc, a remedy limitation blocking recovery of personal injury caused by
consumer goods is prima facie unconscionable.
10) the ucc section 2-207 allows a contract to be formed even though the terms of the
offer and the terms of the acceptance differ.
11) if a bank maintains an electronic deposit and provides the customer with a statement
indicating the amount of principal held on a certificate of deposit (cd), such a cd is
negotiable.
12) a deed which provides notice to the public at large about the grantees property
interest is called a recorded deed.
13) a delegator can be discharged from his/her obligation to perform his/her duty to the
original promisee by a contract of novation.
14) the uniform commercial code gives the contracting parties very little flexibility in
deciding between themselves how they will perform a contract.
15) rule 10b-5 relating to liability to false statements in filed documents applies to only
those transactions in all securities, which are registered under the 1933 act or the 1934
act.
16) shareholders who hold at least _____ percent of the shares entitled to vote at the
meeting may call a special meeting.
a.10
b.50
c.30
d.25
17) _____ occur(s) when partners accept an act of a partner who had no actual or
apparent authority to do the act when it was done.
a.arbitration
b.defamation
c.indemnification
d.ratification
18) which of the following would receive stricter scrutiny than the rational basis test?
a.right to own a business
b.right of teenagers to congregate
c.classifications based on gender
d.right to advertise
19) which of the following is generally true about the federal trade commissions (ftc)
regulations of the holder in due course rule?
a.some states have eliminated the holder in due course rule by repealing the previous
version of article 3 and refusing to adopt the new version.
b.the ftc has seriously limited the rules impact in consumer credit situations in which
the consumer signs a note or an installment sales contract, or gets financing from a third
party.
c.these changes in the holder in due course rule reflect the economic power and political
influence of business interests, especially banks.
d.overall, the ftcs changes in the holder in due course rule are insignificant, especially
in consumer cases.
20) stacey wanted someone to paint her house. jessica offered to do it for $300 while
nancy offered to do it for $250. a few days after stacey entered into a contract with
nancy, the latter increased her fees to $400. by this time, jessica was not interested in
entering into a contract with stacey anymore. stacey can seek to be compensated on the
basis of a(n) _____.
a.quasi-contract
b.part performance
c.reliance interest
d.compensatory damages
21) which of the following has been recognized by the courts as a possible justification
for tying agreements?
a.the tying product functions properly only if used with the tied product.
b.the tying product is not available for purchase without the agreement.
c.the tying agreement involves two separate and distinct items.
d.the seller is the market leader in both the tying and tied product categories.
22) the federal trade commission recently instituted an adjudicative proceeding against
ok corp., a manufacturer of inflatable dolls. ok is alleged to have made deceptive
statements concerning the quality of its product in nationwide advertisements. which of
the following statements is accurate?
a.if the statements in the ok ads were material misrepresentation that could mislead
reasonable consumers, the ftcs deception standard would require a conclusion that ok
did engage in deceptive advertising.
b.ok may be held to have engaged in deceptive advertising even if all company
employees and executives involved in advertising decisions believed in good faith that
false statements in the ads were true.
c.if the ftc proves that the intent in ok advertisements was to offend reasonable
consumers, then an administrative law judge could order ok to cease making such an
advertising claim.
d.ok cannot be held to have engaged in deceptive advertising if no consumers have
actually been deceived by the ok ads.
23) which of the following causes dissolution and winding up?
a.a partners transfer of his transferable partnership interest
b.when the partnership has completed the undertaking for which it was created
c.a creditors obtaining a charging order
d.the addition of a new partner to the partnership
24) negligence cases that address duties that run from possessors of real estate (land and
buildings) to those who enter that property are often called:
a.special cases duties.
b.premises liability cases.
c.strict liability cases.
d.negligence per se cases.
25) mary wants to buy an apartment in a building that is owned by abc corporation.
mary then purchases stock in abc corporation and holds her apartment under a
proprietary lease. under which ownership has mary acquired title to such an apartment?
a.condominium ownership
b.co-ownership in form of tenancy in partnership
c.ownership acquired by gift
d.cooperative ownership
26) sandra starts a new lllp for her gelato business. she becomes the general partner of
the lllp and her friend katy becomes a limited partner. there are no other general or
limited partners in the lllp. apart from being a general partner, sandra wishes to become
a limited partner in the lllp to increase her share of profit. can she do it? if not, suggest a
method by which she might be able to do it.
27) what are the four categories of claims listed in revised article 3?
28) what is the mailbox rule? what risk does it create for the offeror?
29) how can an indorser avoid secondary liability on the instrument? can an indorser
disclaim transfer warranty liability?
30) on may 1, s sells b 100 widgets on credit at a price of $1 per widget. s did so based
on an april 10 letter from b asserting bs solvency. on may 7, s learns that b was
insolvent when it received the widgets on may 1. on may 13, s demands the return of
the goods from b. is b obligated to return the goods to s?
31) suppose that reed is buying a crane from movers inc. reed needs a crane that will
handle loads of up to 10,000 pounds. movers salesman tells reed that the crane will
handle a 10,000-pound load. relying on this statement, reed buys the crane. later, he
discovers that the crane will only handle a 5,000-pound load. reed wants to rescind on
the basis of either fraud or misrepresentation. movers, however, alleges that the
salesman did not make a statement of past or existing fact. is movers correct?
32) strict liability makes people liable irrespective of their fault. how is this justified?
what is the standard rationale for strict liability?
33) due to susan sharps many fraudulent misstatements, nelly nice buys susans car.
nelly writes susan a check for $5,000 in payment. susan immediately negotiates the
check to patty proper, who qualifies as a holder in due course. in the meantime, nelly
discovers that the car is junk and makes a timely and proper stop-payment order to her
bank. however, when patty presents the check for payment, the bank pays it anyway. is
the bank required to recredit nellys account?
