Common stockholders receive dividends declared by the board of directors.
Under the common law, innkeepers are not liable for lost or stolen guest property when
compared to the innkeepers’ statutes.
An insured can cover his automobile under both collision insurance and comprehensive
insurance simultaneously.
A will can be created to come into effect during one’s lifetime.
A trade acceptance is legally a two-party transaction.
A parent’s refusal to obtain medical care for a child can be punished as a crime.
A director’s failure to properly supervise a subordinate who causes a loss to the
corporation would be considered a breach of the duty of care.
A will cannot be amended by merely striking out existing provisions and adding new
ones.
A mediator is allowed to make decisions for a divorcing couple.
Equitable orders and remedies of the Court of Chancery took precedence over the legal
decisions and remedies of the law courts.
Unsecured credits require collateral to protect the payment of the debt.
If Johnny made an oral contract with Peter to sell Peter his truck for $15,000, Johnny’s
eventual refusal to sell the truck is considered breach of contract.
The bankruptcy courts are part of the federal court system.
Payment can be obtained from a guarantor even if the principal debtor has not
defaulted.
The Delaware antitakeover statute provides that an acquirer of a Delaware corporation
cannot complete a merger with the acquired corporation for three years after purchasing
15 percent or more of the Delaware corporation’s shares.
Heather chooses to buy a scarf at Macy’s and reads the price on the tag as $50. She uses
her credit card to pay for the scarf, but post-purchase, she notices that the price tag
actually says $500. This is an instance of a(n) ________.
A) bilateral mistake
B) mutual mistake of value
C) innocent misrepresentation
D) unilateral mistake
Which of the following happens when a general partner withdraws from a limited
partnership?
A) The partnership must be sold.
B) The partnership is transferred.
C) The partnership is dissolved.
D) The partnership operates normally.
Which of the following is a cause for the dissolution of a partnership?
A) written consent of the general partners
B) withdrawal of a general partner
C) withdrawal of all limited partners
D) acquisition of business by another partnership
The ________ says that agents’ contracts to sell property covered by the Statute of
Frauds must be in writing to be enforceable.
A) merger clause
B) common law of contracts
C) doctrine of equity
D) equal dignity rule
A certain state in the U.S. declares that its citizens should only wear modest clothing.
Which of the following conclusions is made when this law is tested for substantive due
process?
A) unconstitutional for compulsion
B) invalid for violation of the Equal Protection Clause
C) void for vagueness
D) invalid for violating freedom of expression
Jorge, a forklift operator for the retail chain Hansridges, was injured when the fork-lift
he was operating toppled over. The forklift was manufactured and maintained by Ionic
Machines Inc. As he was covered by workers’ compensation insurance, he could
recover workers’ compensation benefits. However, it was later found that the forklift
was not designed to be used to lift as much weight as Ionic Machines claimed it could.
Which of the following is Jorge entitled to?
A) sue Hansridges for injuries suffered during employment
B) sue Hansridges for a hazardous work environment
C) sue Ionic Machines for damages
D) not sue anyone as he has already received workers’ compensation
A lease in which the tenant pays a lump sum to the landlord and the landlord is
responsible for paying the property taxes and assessments on the property is known as a
________.
A) gross lease
B) net, net, net lease
C) double net lease
D) net lease
A ________ has an ownership or other interest in the collateral and owes payment of a
secured obligation.
A) creditor
B) debtor
C) seller
D) lender
An auditor’s opinion that the company’s financial statements fairly represent the
company’s financial position, the results of its operations, and the change in cash flows
for the period under audit, in conformity with generally accepted accounting principles
is referred to as a(n) ________.
A) disclaimer of opinion
B) adverse opinion
C) qualified opinion
D) unqualified opinion
A drawee is primarily liable on a draft when ________.
A) the instrument is issued
B) the instrument is dishonored
C) the instrument is presented for payment
D) the drawee is an acceptor to the instrument
Which of the following can be exchanged for cash by merely having possession of the
instrument?
A) a certificate of deposit
B) an allonge
C) an order instrument
D) a bearer instrument
Which of the following constitutes a mutual mistake of a material fact?
A) Martha selling her house to Graham and hiding the fact that its first floor is damaged
B) Martha and Graham agreeing on the sale of a house, both referring to different
houses
C) Graham buying a house from Martha without asking her details of damages
D) Martha selling Graham an old vase for $20, both of them unaware that it is a
valuable antique collectible
Which of the following actions by a holder constitutes the complete cancellation of a
negotiable instrument?
A) intentionally destroying the negotiable instrument to eliminate obligation
B) deliberately striking out the signature of an indorser
C) releasing an obligor from liability
D) surrendering collateral without the consent of the parties who would benefit from it
Who among the following is exempt from federal minimum wage requirement?
A) Kelly, an inside sales rep at a pharmacy
B) John, a waiter by day and a guitar teacher by night
C) Tsun, a software applications developer
D) Orlando, a telemarketer
Which of the following is essential for a revocation of acceptance to be effective?
A) The seller must be notified of the revocation within a reasonable time.
B) The seller’s promise to timely cure if the nonconformity is not met.
C) The nonconformity must be discovered before acceptance is given.
D) The nonconformity substantially impairs the value of the goods to the buyer.
________ is a business arrangement that occurs when the owner of intellectual property
contracts to permit another party to use the intellectual property.
A) General partnership
B) Leasing
C) Licensing
D) Joint venturing
The WaterGlove Corporation issues ________ preferred stock that requires payment of
a quarterly dividend of $5.00 per share. The WaterGlove Corporation falls behind with
four quarterly payments, i.e., $20.00 per share of preferred stock. The next quarter, the
corporation makes a profit of $25.00 per share. The corporation must pay $20.00 per
share of arrearages to the preferred shareholders plus this quarter’s payment of $5.00
per share.
A) convertible
B) redeemable
C) cumulative
D) participating
A ________ is a three-party instrument that is an unconditional written order by one
party that orders a second party to pay money to a third party.
A) draft
B) promissory note
C) certificate of deposit
D) lease
Which of the following can lead to an annulment?
A) if one of the parties has breached the promise to marry
B) if one or both parties were intoxicated at the time of the marriage
C) if one of the parties has children from a prior marriage that was legally terminated
D) if both parties failed to sign a prenuptial agreement in advance of their marriage
The ________ prohibits deficiency judgments regarding certain types of mortgages,
such as those on residential property.
A) foreclosure statute
B) mortgage statute
C) recording statute
D) antideficiency statute