The Code’s firm offer rule applies only to offers in writing that are made by a merchant
offeror.
a. True
b. False
All states except one have adopted either the 1976 or 1985 RULPA.
a. True
b. False
A photographer taking photos of a movie star with a telephoto lens would NOT be
guilty of intrusion if the:
a. photographer never entered onto the movie star’s property.
b. pictures were not published.
c. movie star was in bed at the time.
d. movie star was in a public building at the time.
International agreements in the form of treaties:
a. require approval by a majority vote of the United States Senate.
b. require approval by a two-thirds vote of the United States Senate.
c. require no approval from Congress.
d. are explicitly mentioned in the U.S. Constitution as a power given solely to
Congress.
Eviction must be actual.
a. True
b. False
The majority of courts view a stock subscription as merely an offer that cannot be
accepted until:
a. the corporation enters a novation with the subscriber.
b. the promoter signs in the name of the corporation.
c. the corporation comes into existence.
d. there is a written agreement.
Ratification and adoption of contracts have the same effect; they are both retroactive
and both release the purported agent.
a. True
b. False
a. What warranties are given upon transfer?
b. What warranties are given upon presentment?
c. If a person has not signed an instrument, does that mean he has no liability as a result
of the transaction involved? Explain.
The Fair Credit Reporting Act applies to consumer reporting agencies.
a. True
b. False
Which of the following would be considered a material breach of a contract?
a. Partial performance that omits some essential part of the contract.
b. Delivery of 50 chairs in a contract that calls for 100 chairs.
c. An intentional breach of the contract.
d. All of these would be material breaches.
The seller and buyer of goods agree that identification will be made by the seller when
it manufactures and separates those particular goods out for the buyer. Identification
will actually occur:
a. at the time and in the manner agreed upon by the parties.
b. according to Code Section 2-501, upon the making of the contract of sale.
c. when the buyer points out the particular goods it wants; the seller cannot identify
goods.
d. when the goods are tendered to the carrier for shipment to the buyer.
Under the Bankruptcy Code’s provisions for proof of claims, a court may not allow any
claim that is:
a. unenforceable against the debtor or his property.
b. for matured interest.
c. for reasonable insider fees.
d. unsecured.
Which of the following would not be considered “money” within the meaning of the
Code?
a. Diamonds
b. Mexican pesos
c. German marks
d. Nigerian naira
Once a Chapter 13 plan has been confirmed, it may:
a. be modified at the debtor’s request but only if the trustee agrees.
b. be modified only if all unsecured creditors agree.
c. not be modified.
d. be modified at the debtor’s request.
In many states, the services of the incorporators are perfunctory and short-lived.
a. True
b. False
Real defenses include all but which of the following?
a. Forgery of instrument
b. Minority of maker
c. Material alteration
d. Theft of bearer paper
Laws passed by Congress are the supreme law of the land in the United States and take
precedence over the United
States Constitution.
a. True
b. False
Even though contributory negligence is proven by a defendant in a state in which it acts
as a complete bar to recovery, the plaintiff may still recover if the defendant had the last
clear chance to avoid the injury but did not avail himself of the chance.
a. True
b. False
An easement is not considered to be real property.
a. True
b. False
No copyright protection is available to protect mask works embodied in a
semiconductor chip product.
a. True
b. False
If Able Corporation purchases all of the stock of Beta Corporation rather than all of its
assets, there is now a change in Beta Corporation’s legal status.
a. True
b. False
Tom makes pottery in his spare time. Jackie asks if he’d sell her a particular covered
bowl. Later that day, he telephones her and says she can have it for $50. She agrees, so
he tells her he’ll wrap it up for her and it will be ready in half an hour. Six days later,
Jackie had not yet come for the bowl when a dog knocks the box off the shelf and
breaks the bowl. Who is liable?
a. Tom, because he is a merchant regarding the pottery and Jackie had not yet received
the bowl
b. Tom, because the bowl was in his possession when the dog broke it
c. Jackie, because she had identified the bowl
d. Jackie, because Tom had it ready for her to pick up for nearly a week
An accountant’s legal responsibility under state law may be based upon:
a. contract law.
b. tort law.
c. criminal law.
d. all of these.
Most types of contracts are valid without being written.
a. True
b. False
If a lawyer were being held liable for a misstatement in a registration statement, her
defense(s) would be:
a. she was only following directions.
b. she had reasonable grounds to believe, and did believe, her information was true.
c. she was under duress of a threat of loss of her job if she did not agree with the
statement.
d. None of these would be valid defenses.
Baxsen, Inc. wanted to acquire the common stock of the Acme Corporation and hired
Clark to audit the financial statements of Acme. Clark failed to discover a large
embezzlement by Acme’s chief financial officer. In a common law action by Baxsen
against Clark, Baxsen must at a minimum prove:
a. ordinary negligence on Clark’s part.
b. gross negligence on Clark’s part.
c. fraud on Clark’s part.
d. scienter on Clark’s part.
If one major U.S. car manufacturer acquired another, the Clayton Act would require
close scrutiny of the transaction.
a. True
b. False
An officer cannot be removed without the shareholders voting to do so.
a. True
b. False
A limited partner’s financial obligation to the partnership may be increased if the:
a. limited partner acts as agent for a competing partnership.
b. limited partner takes active part in the management of the partnership.
c. another limited partner is added to the partnership.
d. All of these are true.
To sustain a case of fraud in the inducement, the injured party must prove that he
actually relied upon the false representation.
a. True
b. False
A corporation must notify the shareholders of the existence of dissenters’ rights before
taking the vote on the corporate action.
a. True
b. False
The board of directors is delegated the power to manage the business of the corporation,
which includes:
a. determining the capital structure and financial policy of the corporation.
b. declaring the amount and type of dividends.
c. formulating major management policy.
d. All of these.
Which of the following is not true about the Home Mortgage Disclosure Act?
a. It was enacted to emphasize to financial institutions the importance of their
reinvesting funds in the communities they serve.
b. It was enacted to put redlining into effect.
c. It outlawed geographic discrimination.
d. It requires public disclosure of the financial institution’s geographic pattern of
mortgage lending.