Sarah has a checking account at First Bank. Orrin steals one of her blank checks, writes
a check for $250 to himself, and then forges Sarah’s signature. Orrin then indorses the
instrument to Paul in payment of a debt. Paul, who does not know of the forgery,
presents the instrument to First Bank for payment. At First Bank’s request, Paul indorses
the instrument, and the bank then pays him $250. Which of the following is correct?
a. Paul has breached the warranties on presentment.
b. Orrin has breached the warranties on presentment.
c. Sarah has breached the warranties on presentment.
d. All of these are correct.
UCC Article 4A:
a. is designed to overlap coverage of the Electronic Funds Transfer Act.
b. covers both credit and debit transactions.
c. covers wholesale funds transfers.
d. does not allow parties to vary their rights and obligations by agreement.
Eminent domain would permit condemnation of land for all the following purposes
except:
a. constructing a railroad bridge over a river.
b. building senior citizens’ home.
c. building a discount store.
d. building a post office.
If the goods or the tender of delivery fail in any respect to conform to the contract, the
buyer may:
a. reject the whole.
b. accept the whole.
c. accept any commercial unit(s) and reject the rest.
d. Any of the above.
Under the Code, an offer for the purchase or sale of goods:
a. must not leave open particulars of performance to be specified by one of the parties.
b. may have missing terms supplied by inference.
c. may leave quantity and quality terms open to be supplied later.
d. need not provide a basis for remedies for breach, since remedies will be provided by
the courts if needed.
Max buys shares of newly issued Z Corp. stock for $30 per share and pays $1,000 cash,
a car worth $2,000, and a promissory note for $3,000. Under traditional corporate law,
how many shares of stock could validly be sold?
a. 100.
b. 33.
c. 200.
d. 133.
Mount Pleasant Tires does not have sufficient funds to pay damages for a tort that arose
out of the operation of the business. Jess, a business owner, is personally liable if:
a. he is a sole proprietor of the business.
b. he is a general partner of the business.
c. he committed the tort.
d. All of the above.
If Ben Stewart has a checking account at First Bank:
a. the relationship between Ben and his bank is based primarily on their contractual
agreement.
b. First Bank is a creditor and Ben is a debtor.
c. Ben is an agent of First Bank.
d. All of the above.
Co-ownership of the means or instrumentality of accomplishing a single business
transaction or a limited series of transactions ordinarily results in a:
a. partnership.
b. joint venture.
c. corporation.
d. R & D partnership.
The __________ Amendment prohibits excessive bail and prohibits cruel and unusual
punishment.
a. Fourth
b. Fifth
c. Sixth
d. Eighth
Would an instrument containing the following language be negotiable? “Harold T.
Stone, as President, hereby promises to pay $12,348 to the order of Joe Jones Furniture
for office equipment for Redtyn Corporation, payable from its corporate assets.
(Signed) Harold T. Stone as President, Redtyn Corporation.”
a. No, because the promise refers to another contract.
b. No, because its payment is limited to a particular fund.
c. Yes, because Redtyn is a business entity.
d. Yes, because it meets all the requirements of negotiability.
Which of the following is a remedy that can be obtained from a court of equity?
a. A maxim.
b. Specific performance.
c. Money damages.
d. Stare decisis.
Under the Securities Exchange Act of 1934 and the Williams Act, a tender offer:
a. must be disclosed if the offeror’s acquisition would give him 3 percent of the target’s
stock.
b. must be disclosed only to the shareholders of the target corporation.
c. disclosure is informational to ensure that investors may make an informed decision.
d. None of these are correct.
A court order requiring that a person do or refrain from doing a particular act is known
as a(n):
a. injunction.
b. maxim.
c. statute.
d. executive order.
If the board delegates to a committee its duty to select a new company president:
a. the members of that committee may be responsible individuals other than board
members.
b. the committee must be approved by the shareholders.
c. the non-committee directors are relieved of liability for acts of the committee.
d. the committee must consist of board members and may be authorized unless
otherwise provided by the articles of incorporation or bylaws.
When were the last amendments made to the RULPA?
a. 1976.
b. 1985.
c. 2001.
d. 2003.
Sam owes $5,000 to the First National Bank for a student loan which will come due on
January 1 next year. He has been offered a two-year graduate fellowship, but he will not
be able to pay the loan back if he accepts the fellowship. The bank manager tells Sam
that if he pays $3,000 now, they will forgive the loan. Should Sam accept the offer?
a. No, because the bank can still sue for the remaining $2,000.
b. No, because the manager’s promise is not binding on the bank.
c. Yes, because the early payment of the loan is consideration that makes the bank’s
promise binding.
d. Yes, because the bank must do whatever the manager says.
When a breach of contract occurs, the nonbreaching party is required to take reasonable
steps to lessen or mitigate the damages that he may sustain.
The Code’s remedies are cumulative, therefore, a seller may both withhold delivery of
the goods and identify goods to the contract.
Define the statute of frauds and give an example of what is covered.
Robbery and burglary are the same crime.
Jake signed and delivered a promissory note payable to Nancy. Nancy negotiated the
note to Fred. Fred now has the same legal status as an assignee of a contract.
How has the Code affected the rights of good faith purchasers with respect to minors?
Identify five exceptions to the general rule that illegal contracts are unenforceable.
The distinction between a void and voidable title is not important in determining the
rights of good faith purchasers of goods.
After dissolution, the corporation must cease carrying on its business except as is
necessary to wind up.