Federal and state government statutes that regulate the safety of food, drugs, cosmetics,
toys, vehicles, and other products are collectively referred to as consumer protection
laws.
Unlicensed persons cannot recover payment for services where they do not have the
required license.
An accord is a compromise reached between two parties to settle a claim.
To rescind a contract, the parties must make restitutionof the consideration they
received under the contract.
A corporation cannot ratify an unauthorized act committed by its corporate officer.
A promise based on past consideration is not enforceable.
A termination statement is filed when the secured party wishes to claim the collateral
because the debt has not been paid.
Most union elections are contested by the employer.
Which of the following is true of an amendment of the articles of incorporation that
does not affect the rights attached to shares?
A) The shareholders need to propose a resolution of recommending such an
amendment.
B) The shareholders need to provide vote of approval for the amendment.
C) The board of directors can approve the amendment without shareholder approval.
D) The amendment need not be filed with the secretary of state of the state of
incorporation.
________ imposes civil liability on accountants and others for making misstatements or
omissions of material facts in a registration statement, or failing to find such
misstatements or omissions.
A) Section 11(a) of the Securities Act of 1933
B) Section 10A of the Securities Exchange Act of 1934
C) Section 101 of the Uniform Securities Act
D) Section 18(a) of the Securities Exchange Act of 1934
What is a similarity between a demand draft and a trade acceptance?
A) both are examples of sight drafts
B) both require credit to be extended to the buyer
C) both have the drawer to be the payee as well
D) both are considered two-party transactions
Dan asks his agent Jude to drop off some medicines at his mother’s house. On his way
back, Jude decides to have lunch at a diner two blocks from his workplace. While
walking back to work, he jaywalks at a green signal on the road, causing a motorcyclist
to hit the curb and injure himself while attempting to avoid hitting Jude. Under the
concept of ________, Dan is liable for the injuries caused to the motorcyclist.
A) coming and going
B) intentional tort
C) frolic and detour
D) dual-purpose mission
According to the RULPA, what liability does a corporation have if it is a general partner
to a limited partnership?
A) unlimited personal liability
B) liability restricted to debts up to its capital contributions
C) liability of termination as partner
D) unlimited organizational capital liability
Stelwire LLC, a vintage car dealer, advertises the sale of a 1964 Ford Thunderbolt.
Ralph responds to the advertisement with an offer of $80,000 for the car. Stelwire signs
a written assurance to keep that offer open to Ralph for a fortnight. Five days before the
fortnight is up, Stelwire sells the car to another buyer. At the end of the fortnight period,
Ralph tenders $80,000 for the car, but the car has already been sold. Ralph then buys
the same model car from another dealer for $90,000 and sues Stelwire for breach of
contract. The court rules that Stelwire is liable to Ralph for breach of contract and
orders Stelwire to pay Ralph the difference of $10,000 he paid extra to the second
dealer for the car. What was the nature of the contract between Ralph and Stelwire?
A) counteroffer
B) open terms contract
C) option contract
D) lease contract
Which of the following is true of the liability of an incoming partner?
A) An incoming partner is liable for the previous debts of the partnership.
B) An incoming partner is equally liable for all existing debts of the partnership.
C) An incoming partner is liable for the debts of the partnership only to the extent of his
or her capital contribution.
D) An incoming partner is not liable for the future debts of the partnership.
The appealing party in an appeal is called a(n) ________.
A) appellate
B) appellee
C) respondent
D) petitioner
What is the doctrine of in pari delicto with reference to contracts?
A) It is a situation in which both parties are considered equally at fault in an illegal
contract.
B) It is a situation where one party has unknowingly signed a contract to commit
crimes.
C) It gives minors the right to disaffirm a contract.
D) It is a special exemption right to circumvent usury laws.
Maria is the treasurer of Rex Caldwell Corporations. As treasurer, she makes out and
signs the payroll checks for the company. Maria draws a payroll check payable to the
order of her maid Carolyn Doss, who does not work for the company. Maria does not
intend Carolyn to receive this money. She indorses Carolyn’s name on the check and
names herself as the indorsee. She cashes the check at a liquor store. Under which rule
of forged instruments is Maria accountable?
A) good faith rule
B) exclusionary rule
C) imposter rule
D) fictitious payee rule
An agent is a party who ________.
A) agrees to act on behalf of another
B) employs another person to act on his or her behalf
C) directs a worker under an express or implied contract of employment
D) receives the services of another for remuneration
A limited partnership that was organized in Alabama and operating in Texas with no
operations outside the U.S. is considered a ________ in Texas.
A) foreign limited partnership
B) limited liability corporation
C) domestic limited partnership
D) general partnership
Rio-Werner Corporation owns Rio’s Sandwiches, a fast-food restaurant in New Jersey.
It wants to operate in five cities on the west coast by means of franchisees which make
and sell all menu items from Rio’s Sandwiches. Which of the following would best suit
Rio-Werner Corporation’s franchise plan?
A) processing plant
B) area
C) distributorship
D) chain-style