An agreement in connection with the sale of a business that prohibits the seller from
engaging in the same or a similar business for a period of twenty-five years would be
unreasonable.
a. True
b. False
Under the NLRA, an employer can legally refuse to bargain with the union as a means
of applying economic pressure.
a. True
b. False
In determining whether a defendant’s conduct is reasonable in an emergency not created
by the defendant, thestandard is that of a reasonable person under the circumstances.
a. True
b. False
A general partnership may be formed for a charitable purpose.
a. True
b. False
A typical automobile financing agreement would be a closed-end credit agreement.
a. True
b. False
The Securities Act of 1933 has two basic objectives, one of which is to:
a. extend protection to investors trading in securities that are already issued and
outstanding.
b. grant the SEC power to impose administrative, civil penalties up to $500,000.
c. regulate disclosure requirements on publicly held corporations.
d. prohibit misrepresentation, deceit, and other fraudulent acts and practices in the sale
of securities generally, whether or not they are required to be registered.
The Ajax Corporation issues bonds that pay a minimum of 6% interest but that can pay
more if corporate earnings reach certain specified levels. In lieu of payment under this
bond, a holder may exchange it for stock of the corporation. This bond would be a:
a. callable income bond.
b. convertible participating bond.
c. convertible unsecured bond.
d. convertible secured bond.
Ralph sold a motel to Steve by stating that he had paid $250,000 for it and that his net
average annual profit from the business has been $40,000. In reality he paid $100,000
for the motel and has earned a net average annual profit of only $30,000. Steve made no
attempt to verify the statements until after the transaction was completed. In this case:
a. Ralph has committed fraudulent misrepresentation and the contract is voidable at
Steve’s option.
b. Steve is bound by the contract, because he failed to verify the statements which were
made to him.
c. the contract is not voidable, but Steve may sue for damages.
d. the contract is automatically void.
Kollenberg’s sold a substantial part of its equipment to Castillo Brothers. Nothing else
was involved in the sale. The
sale of the equipment is a bulk transfer under the Code.
a. True
b. False
Which of the following are not types of restrictive indorsements?
a. Conditional indorsements
b. Indorsements prohibiting further transfer
c. Indorsements in trust
d. Blank indorsements
If two parties have unperfected security interests in the same collateral, the first to
attach has priority.
a. True
b. False
Concurrent conditions occur when mutual duties of performance are to take place
simultaneously.
a. True
b. False
Under the RMBCA, the articles of incorporation must include all EXCEPT which one
of the following?
a. The number of authorized shares
b. The name of the registered agent
c. The names of the initial shareholders
d. The address of each incorporator
Appraisal rights:
a. belong to dissident shareholders.
b. can be exercised by a target company any time before acquisition.
c. allow a target company to get a fair valuation of its assets before sale.
d. always give all shareholders the fair market value of their shares.
If the offer specifies it MUST be accepted by telegram, a letter will not be a valid
means of acceptance.
a. True
b. False
What is the supreme law of the land in the United States?
a. Federal statutes
b. The UCC
c. The common law
d. The U.S. Constitution
Misappropriation of a trade secret is the wrongful use of a trade secret.
a. True
b. False
The Wall Street Reform and Consumer Protection Act of 2010 extends the
extraterritorial reach of the antifraud provisions of the 1933 and 1934 securities acts
with respect to actions brought by the United States and the SEC.
a. True
b. False
Venue has to do with which state has jurisdiction over the subject matter of a lawsuit.
a. True
b. False
If Mark owns shares in General Custard Co., he may bring his proposal for a new
subdivision, branching out into ice cream, before the shareholders if he:
a. owns at least 5% of the GC Co. stock.
b. owns at least 10% of the GC Co. stock.
c. limits it to 5,000 words.
d. has not made a proposal yet this year.
Which of the following is not a remedy for violation of the American’s with Disabilities
Act (ADA)?
a. Injunctive relief
b. Reinstatement
c. Triple back pay
d. Compensatory and punitive damages
The Uniform Commercial Code is a federal law that applies to commercial transactions
among the states.
a. True
b. False
Carl ordered 1,000 sq. ft. of green carpet from RS Company. In error, RS Company
shipped 1,000 sq. ft. of yellow carpet. In this case, the risk of loss remains with the
seller until Carl accepts the yellow carpet or RS Company remedies the defect.
a. True
b. False
Edith files a Chapter 7 petition in bankruptcy. She owns the following property: (1) an
automobile valued at $1,000; (2) a homestead valued at $75,000, on which First Bank
holds a mortgage of $50,000; (3) personal jewelry valued at
$1,100; and (4) monthly disability payments of $1,000. Assuming Edith elects to use
the exemptions listed in the
Bankruptcy Code, what property may Edith keep?
a. The disability payments only.
b. The disability payments and the homestead only.
c. The disability payments plus the automobile, at least part of the equity in the
homestead, and the jewelry.
d. Nothing. She must sell all of her assets and have the proceeds distributed to the
creditors, and she must turn the disability payments over to the trustee.
A person taking a prescription medication will be treated the same as an incompetent
under the cognitive ability test.
a. True
b. False
If United Widgets lowers its price to all buyers of 10 or more widgets, it is not a
violation of the Robinson-Patman
Act.
a. True
b. False
An indorsement may be written on a paper other than the instrument itself as long as the
paper with the indorsement is affixed to the instrument.
a. True
b. False
When a bid is made at an auction, it can be revoked if the auctioneer has not yet
accepted the bid because the auctioneer has the power of acceptance.
a. True
b. False
If an act is ultravires,it is beyond the legal authority of the corporation.
a. True
b. False
“The law generally restricts the time within which an action can be brought by either
party to a contract.” This statement is:
a. false.
b. true, because of statutes of limitation.
c. true, because of the law of repudiation.
d. true, because of covenants not to sue.
To prevent the use of the insurance policy for wagering purposes, the person who is to
be indemnified under the contract must have:
a. good faith.
b. an insurable interest.
c. a binder.
d. a coinsurance clause.
“Blue sky laws” are state laws that regulate corporate stock issuance and sale.
a. True
b. False
Jim contracted with Kevin to serve as a guide for Kevin on his three-week fishing trip
to Canada. The contract was made on April 1 with the trip to begin on June On May 1,
Kevin notified Jim that he had changed his mind and would be unable to make the trip.
He also refused to pay Jim any compensation. In this case:
a. because the contract is executory, Jim has suffered no damages, and Kevin has no
obligation to pay any compensation.
b. Kevin has anticipatorily repudiated the contract and is liable to Jim for damages.
c. Jim is discharged from his duty to serve as guide, but he must wait until after June 1
to bring suit againstKevin.
d. All of these.
Like general partnerships, limited partnerships are statutory creations that did not exist
at common law.
a. True
b. False
To establish a private nuisance, a plaintiff:
a. must show that the defendant has substantially and unreasonably interfered with the
use and enjoyment of the plaintiff’s land.
b. must show that, in an action for damages in conjunction with private nuisance, the
defendant’s conduct was unreasonable.
c. need not show that the interference was unreasonable.
d. need only show that the quiet enjoyment of plaintiff’s land was impacted.