In exclusive dealing contracts, the UCC says that sellers have a duty to use their best
efforts to supply their buyers, who in turn have a duty to use their best efforts to sell the
goods.
Answer:
In cases of slander per se, defendants are not liable if the statements they uttered were
TRUE.
Answer:
Like limited partnerships, all of the investors in an LLC are able to share in
management.
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If permitted in the articles, preferred stock can be redeemed by the corporation even if
the holders do not wish to sell.
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If a bailment is solely for the benefit of the bailor, then the bailee may be held to a
somewhat higher degree of care.
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A bilateral contract that lacks mutuality is unenforceable due to lack of consideration.
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Buyers are entitled to specific performance if the goods covered by a contract are
unique.
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A person’s status as a shareholder in a corporation automatically gives such person a
right to be an employee of the corporation.
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The involuntary transfer of possession of a bearer instrument doesn’t result in a
negotiation.
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The definition of a security in the 1934 Act is similar to the 1933 Act definition except
that it excludes notes and drafts that mature not more than nine months from the date of
issuance.
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The CISG is similar to the UCC in that it considers an offer sufficiently definite if it
lacks price terms.
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Forbearance from suing can never be valid consideration.
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Under a contract that does not require the seller to deliver the goods to the buyer’s
place of business but merely to ship the goods to the buyer, the seller:
A. is required to put the goods into the possession of a carrier such as a trucking
company or a railroad.
B. is not required to notify the buyer of the shipment, as it is the duty of the carrier to
bear for any material delay or loss in the process.
C. is required to deliver the goods personally to the buyer’s place of business.
D. is not required to make a contract with the carrier, as the seller’s duty ends after he
delivers the goods safely to the carrier.
Answer:
The liability of partners for torts committed by the partnership:
A. is on the partner who committed the tort.
B. is joint and several, permitting the injured person to sue any partner individually or
all of them together.
C. depends on whether a partner or an employee commits the tort and if it is a partner
the injured person has to sue all of the partners together.
D. is nonexistent since a partnership cannot commit a tort.
Answer:
A rule of law enabling the defendant to win even if all of plaintiff’s allegations are
TRUE is a(n):
A. counterclaim.
B. affirmative defense.
C. deposition.
D. judgment notwithstanding the verdict.
Answer:
According to the theory of incapacity, people are presumed to lack the capacity to
contract if they are _____.
A. mentally ill
B. obese
C. felons
D. diabetic
Answer:
Obtaining a security interest enforceable against third parties is a:
A. two-step process consisting of attachment and priority.
B. two-step process consisting of priority and perfection.
C. three-step process consisting of priority, attachment, and perfection.
D. two-step process consisting of attachment and perfection.
Answer:
Which of the following statements is TRUE of an independent agency?
A. Independent agencies are headed by the president.
B. Independent agencies are a part of the executive branch of the government.
C. Independent agencies are headed by a board or commission.
D. Independent agencies are given authority only to enforce rules made by the
Congress.
Answer:
In cases where an officer or director has been found guilty of a crime, he/she may be
indemnified under voluntary indemnification if:
A. he/she had reason to believe that his/her conduct was unlawful.
B. he/she acts in bad faith.
C. he/she acted in a manner that he/she believed not to be opposed to the corporation’s
best interests.
D. he/she prevails on the merits of the suit against him/her.
Answer:
Which of the following statements is TRUE for Chapter 11 of the Bankruptcy Code?
A. Chapter 11 cases are liquidated rather than reorganized.
B. Unlike Chapter 13, in Chapter 11 cases, the debt is predominately nonconsumer
debt.
C. Petitions for Chapter 11 cases cannot be filed voluntarily by the debtor.
D. The reorganization plan is essentially a contract between a debtor and its trustees.
Answer:
Martha entered into a contract with Terry, an art dealer. According to the contract Terry
was to supply 18th century artifacts to Martha for the play she was directing. Martha
was paying $50,000 for this. Another director needed the same wigs and was ready to
pay $60,000. Terry decided not to sell the artifacts to Martha. In this case, the court may
order Terry to:
A. specifically perform the contract.
B. repudiate the contract.
C. pay nominal damages.
D. substantially perform the contract.
Answer:
One night, when Henry got home and flipped on the light switch, the kitchen exploded
leaving him severely injured. The explosion was caused by the failure of the gas
connector to the range, which allowed a large amount of gas to escape, and a small
spark created by turning on the light caused it to explode. Henry sued the gas
corporation, arguing that it knew the connector was defective but it did not warn its
customers. He won the lawsuit on the grounds of:
A. negligence per se.
B. recklessness.
C. strict liability.
D. breach of duty.
Answer:
When the holder of an instrument has presented it for payment or acceptance and it has
then been refused, the negotiable instrument:
A. is considered overdue.
B. has been dishonored.
C. is considered unauthorized.
D. is held to be irregular.
Answer:
On May 1, 2002, Bob received a telegram from Ralph offering to support him in his
new construction project. On May 5, 2002, at 9:00 AM, Ralph sends Bob a telegram
attempting to revoke the offer. At 11:00 AM on the same day, Bob mails Ralph a letter
attempting to accept the offer. At 11:30 AM, Bob receives Ralph’s revocation.Assume
Bob and Ralph are both construction contractors and the custom in the construction
business is to offer by telegram and accept by mail. Which of the following statements
holds TRUE in this situation?
A. Ralph’s revocation can make changes to the contract, though it reaches Bob after he
sends the acceptance mail.
B. Bob’s acceptance would be effective only when Ralph reads the acceptance, which
would then create the contract.
C. the parties would have a contract because Bob used the means of communication
impliedly authorized by trade usage.
D. the parties would not have a contract as Bob used a nonauthorized means of
communicating his acceptance.
Answer:
Which Act protects against unauthorized interception of electronic communications?
A. The Wiretap Act
B. The Stored Communication Act
C. The Computer Fraud and Abuse Act
D. The Cyber Security Enhancement Act
Answer:
The person who owns the intellectual property is known as the ____.
A. warrantor
B. licensee
C. guarantor
D. licensor
Answer:
The Clean Air Act requires that new stationary sources such as factories and power
plants:
A. install the best available technology for reducing air pollution.
B. install the best pollution control technology they can afford.
C. install the best pollution control technology available as long as it won’t slow down
production.
D. install state-of-the-art control technology unless the source is located in an area
where the air quality is better than that required by law.
Answer:
Which of the following is a formality usually required by state law for the creation of a
valid will?
A. The will must be witnessed and signed by at least two persons who stand to inherit
under the will.
B. Notice of the making of the will must be published in the newspaper.
C. The will must be signed by the testator or by someone else at the testator’s direction.
D. The testator should declare, after the signing, that the instrument is his will.
Answer: