A basic objective of the Securities Act of 1933 is:
a. to provide investors with material information concerning securities offered for sale
to the public.
b. to prohibit misrepresentation and other fraudulent acts in the sale of only registered
securities.
c. to provide disclosure requirements on publicly held corporations.
d. to regulate tender offers and proxy solicitations.
In a sale on approval:
a. possession but not title is transferred to the buyer for a stated period of time.
b. possession and title are transferred to the buyer for a stated period of time.
c. title but not possession is transferred to the buyer for a stated period of time.
d. title but not risk of loss remains with the seller until the buyer accepts the goods.
A unilateral contract may consist of a promise exchanged for an act or forbearance.
a. True
b. False
If an offer states that a reply must be received by a certain date, the contract is formed
at the time the offeree sends or dispatches the acceptance.
a. True
b. False
The FTC remedy of “affirmative disclosure” would require:
a. a new ad that admits the first ad was false.
b. providing certain information in a company’s ads.
c. that the advertiser desist from deception in all products it markets.
d. All of these would be required.
The UCC treats merchants more leniently than others in transactions involving goods.
a. True
b. False
The basic enforcement mechanism of is a system of on-site inspections by safety and
health inspectors.
a. OSHA
b. Social Security
c. workers’ compensation laws
d. FLSA
A contract to sell five acres of land is governed by Article 2 of the UCC.
a. True
b. False
A manufacturer agrees to sell the distributor 1,000 boxes of 2-quart bowls only if he
agrees to resell to the retailer at cost plus $1.10 per bowl and the retailer must agree to
sell at no less than his cost plus .50 per bowl. This is:
a. horizontal price fixing.
b. vertical price fixing.
c. vertical market allocation.
d. a group boycott.
A contract prepared on a standard form and offering terms on a take-it-or-leave-it basis
is called:
a. exculpatory.
b. a usurious contract.
c. an illegal restraint of trade.
d. an adhesion contract.
The most popular and widely used unincorporated business form that provides limited
liability for its members is the:
a. limited partnership.
b. limited liability partnership.
c. limited liability company.
d. limited liability limited partnership.
Which of the following is untrue regarding the revocation of a will?
a. There cannot be a partial revocation.
b. An inadvertent destruction of a will acts as a revocation.
c. The execution of a second will does not of itself constitute a revocation of an earlier
will.
d. Divorce does not ordinarily revoke a will.
If a person dies without a will and without any heirs or next of kin, her property:
a. escheats to a vestry commission.
b. vests in her neighbors.
c. vests in her church.
d. escheats to the state.
Under the RUPA, a partner’s duty not to compete terminates upon dissociation, and the
dissociated partner may
immediately engage in a competitive business without further consent.
a. True
b. False
Federal regulation prohibits a credit seller or lender from obtaining a nonpossessory
security interest in household goods if the interest is not a purchase money security
interest.
a. True
b. False
All but which one of the following would be exempt from bankruptcy under the federal
law?
a. $500 received in child support
b. A $300 cocktail ring
c. A $200 cashmere sweater
d. A $10,000 car
Ari makes a written offer to Linville, who replies with a conditional acceptance. Ari
ships the goods, which Linville accepts. A contract:
a. was formed when Linville conditionally accepted.
b. consists of the written terms to which Ari and Linville agreed, along with
supplementary provisions of the
UCC.
c. consists only of the written terms to which Ari and Linville agreed.
d. was never formed.
Patent rights are considered to be personal property.
a. True
b. False
Which of the following would be charged to the life tenant’s interest in the course of
administering a trust?
a. Expenses of selling a trust investment
b. The costs of establishing the trust
c. Ordinary repairs
d. Permanent improvements to the trust property
A classification based on gender or “legitimacy” for a governmental action:
a. does not need to bear a substantial relationship to an important governmental
objective.
b. eliminates the strong presumption of the constitutionality of legislation that is
allowed under the rational relationship test.
c. does not allow taking into legislative consideration the natural physical differences of
gender.
d. requires that men and women be treated exactly the same with regard to
governmental action.
Property law protects existing ownership of goods. A principal belief underlying this
policy is:
a. a person should not be required to retain constant possession of all the goods he
owns, yet at the same time, ownership should be indicated by who is in possession of
the goods.
b. while a person should not be required to retain constant possession of all the goods
he owns, there must be a method for good faith purchasers for value to be protected so
they may make safe acquisitions of goods.
c. even good faith purchasers should be held responsible for making sure the item they
are buying wasn’t stolen from the rightful owner.
d. there must not be conflicts among underlying beliefs.
Mary orders a dress for $1,000. Mary doesn’t inspect the dress on arrival and therefore
doesn’t discover a flaw in the fabric until the day before she is to wear it to her first
board meeting as president of Tri-State Engineering. This is a month after the dress
arrived. She calls the designer and sends the dress back, but it is lost in the mail. Mary’s
insurance would cover $400 of the loss. The designer’s insurance would cover $900.
Who is liable?
a. Mary will bear the whole loss because she accepted the goods.
b. The designer will bear the whole loss because Mary returned the nonconforming
goods.
c. Mary will owe $100; the designer, $900.
d. The risk is Mary’s to the extent of $400.
In general, procedural rules are exempt from the notice and comment requirements of
the APA.
a. True
b. False
Rejection is ineffective unless the buyer notifies the seller.
a. True
b. False
Which of the following need NOT be included in the certificate filed by a limited
partnership under the RULPA?
a. The name of the limited partnership
b. The name and address of the agent for service of process
c. The names of each of the limited partners
d. The name and business address of each general partner
An employee may quit the Tel Ko Company and then use information he learned at Tel
Ko in competition with Tel
Ko, unless there was some unfair competition or a trade secret involved.
a. True
b. False
For a misrepresentation to be material, it must be likely to induce a reasonable person to
manifest assent or the maker must know that it would be likely to induce the recipient
to do so.
a. True
b. False
A bank “gives value” when it allows a depositor to withdraw funds against a deposited
item.
a. True
b. False
Wanda at age 17 purchased an expensive stereo system from Stereo Sales. If Wanda
wishes to ratify this contract, Wanda:
a. must reach the age of majority and ratify the contract as a whole.
b. may do so by express notification at any time before reaching the age of majority.
c. may at any time keep the stereo but avoid any remaining debt owed on the stereo.
d. may do so at any time by express or implied action before or after reaching the age of
majority.
The U.S. Supreme Court can invalidate a law if it conflicts with the U.S. Constitution.
a. True
b. False
Dissolution of a corporation does not terminate its existence and does not require that it
liquidate its assets.
a. True
b. False
Which of the following is included in the Fourteenth Amendment?
a. Free speech clause.
b. Equal protection.
c. Freedom from self-incrimination.
d. Right to bear arms.
The CISG specifically excludes sales of which of the following?
a. Goods bought for personal, family, or household use
b. Ships or aircraft
c. Electricity
d. All of these
For a ratification to be effective, the principal must:
a. have knowledge of all material facts concerning the transaction.
b. communicate her intent to ratify to the third party.
c. renegotiate the contract with the third party.
d. All of these are correct.