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1) david, a debtor, owes debts to creditors paul, mark, and gary. paul, mark, and gary
agree with each other and with david to release him from his debts, in exchange for his
promise to pay paul, mark, and gary 75 percent of the amount he owes each of them.
this is called a composition agreement, and such agreements generally are binding
contracts.
2) as per the provisions related to reaffirmation agreements, the court can under special
circumstances order the debtor to become party to the reaffirmation agreement.
3) in the case of foreclosure by action and sale, the creditor has no right to a deficiency
and the debtor has no right to any surplus.
4) shareholders are owners as well as managers of a corporation.
5) in most states, landlords must give a reasonable advance notice to the tenant before
exercising the right to terminate the tenancy.
6) under the model business corporation act, a corporation may not issue its shares in
return for any benefit to the corporation.
7) the principal debtors lack of capacity is a defense for both the principal debtor and
the surety if they are sued by the creditor.
8) the traditional view is that a corporation is not liable for a crime because criminal
guilt requires presence of intent.
9) where the creditor has possession of the collateral, the security agreement may be
oral.
10) a written agreement to the effect that the parties do not intend to form a partnership
is not conclusive if their actions provide evidence of their intent to form a relationship
that meets the rupa partnership test.
11) andy contracts with yvonne to produce an advertisement for a fourth-of-july
fundraising party. yvonne does not produce the advertisement until july 6. here,
yvonnes breach of the contract is not a material breach unless the contract explicitly
stated that time is of the essence.
12) the intent to accept is objectively demonstrated by words or conduct or a
combination of the two.
13) a director has a right to inspect corporate books and records that contain corporate
information essential to the directors performance of her duties.
14) although the occupational safety and health administration (osha) administers the
occupational safety and health act, osha is not empowered to inspect businesses to
enforce those regulations.
15) under the tila, if a credit plan for a home equity loan involves a variable interest
rate, the index rate to which changes in the apr are pegged must be:
a.based on creditworthiness of the debtor.
b.under the creditors control.
c.based on some publicly available rate.
d.under the debtors control.
16) if part of an agreement is legal and part is illegal, the courts will:
a.declare the entire agreement to be void.
b.ask both the parties to ratify the agreement before considering it for evaluation.
c.enforce the legal part so long as it is possible to separate the two parts.
d.impose punitive damages on both the parties.
if part of an agreement is legal and part is illegal, the courts will enforce the legal part
so long as it is possible to separate the two parts, i.e., it is divisible.
17) which of the following statements holds true for conversion?
a.conversion occurs if an instrument has the indorsement necessary for negotiation.
b.conversion occurs if an instrument is purchased or paid by a drawee to a person
entitled to payment.
c.an action for conversion may not be brought by the maker, drawer, or acceptor of the
instrument.
d.an action for conversion may not be brought by a payee or an indorsee who received
delivery of the instrument.
18) mel owns melco, inc., which manufactures toys. she provides a functional discount
to carol, a wholesaler of toys. carol then passes on her discount to nina, who owns
funland, a toy store. nina is then able to offer lower prices to toy purchasers. under the
robinson-patman act, this is:
a.tertiary level price discrimination.
b.secondary level price discrimination.
c.valid, if nina is not in the same territory as mel.
d.valid, as nina and carol are not competitors.
19) which of the following is correct concerning the foreign corrupt practices act
(fcpa)?
a.under the fcpa, a company may be fined up to $5 million.
b.under the fcpa, directors participating in violations are liable for prison terms up to 10
years.
c.the fcpa bribery provisions apply only to american firms with equity securities
registered under the 1934 act.
d.facilitating or grease payments are not prohibited by the fcpa.
20) a counterclaim differs from an affirmative defense in that, a counterclaim:
a.is a new claim by the plaintiff.
b.does not permit a defendant to claim for damages caused by a fraud.
c.is merely an attack on the plaintiffs claims.
d.attempts legal relief for the defendant.
21) tool for you (tfy) is a company that sells power tools to consumers. the sales
contract of tfy states that tfy will not be liable for any consequential damages that the
consumer suffers as a result of using power tools purchased from them. harry purchased
a table saw from tfy for use in his hobby of woodworking. harry was injured when the
saw blade flew off. he wants to sue tfy but is not sure whether the contract provision
limiting consequential damages will be enforced and seeks your opinion. will he
succeed?
a.no, because this was a sale of a potentially dangerous product.
b.no, because harry is a consumer.
c.yes, because harry agreed to this provision in the contract of sale.
d.yes, because the ucc allows parties to agree to limitations on damages.
22) the newtown police dept. (npd) is a force of 55 officers and 30 support personnel.
npd has just adopted new hiring standards for new police officers. these include a
minimum height of 58, a minimum weight of 160 pounds. susan is a recent graduate
with a bachelors degree in police science. she wants to get a job as a police officer in
newtown. however susan is only 55 and she weighs 130 pounds. if susan brings a legal
challenge to npds new hiring standards, what legal basis might she have?
a.disparate treatment
b.disparate impact
c.irrational standards
d.irrational policy
23) which of the following is an accurate statement about property insurance policies?
a.they are less likely to provide coverage for flood-related losses than for
lightning-related losses.
b.they are more likely to provide coverage for losses resulting from friendly fires than
for losses resulting from hostile fires.
c.they do not provide coverage for losses resulting from fires that were intentionally
caused by persons having no connection with the insured.
d.requisite insurable interest must generally exist at the time of the entering into the
policy.
24) which of the following is true of the period during which parties can file a lawsuit
for breach of a sales contract?
a.they parties can extend it for a period longer than six years after the breach occurs.
b.the parties to a contract may shorten this period to one year after the breach occurs.
c.the parties are free to determine the period during which the lawsuit can be filed.
25) which of the following is a prescribed guideline for ethical decision making?
a.what gives me maximum profit?
b.will stakeholders offer support?
c.how can i increase the number of shareholders?
d.how do the alternatives impact my business firm?
26) adrienne had contracted to convey real estate to rich. however adrienne died before
the conveyance is completed. what is the status of the parties?
a.adrienne is excused for nonperformance.
b.rich will be directed by the court to end the contract.
c.adriennes performance was impossible.
d.rich can enforce the contract against adriennes estate.
27) rachael was arrested by the police on suspicion of possession of a controlled
substance. she was informed of her miranda rights. rachael waived her right to remain
silent and confessed to the crime after a brief period of police interrogation. her
confession is:
a.admissible, according to supreme court precedent.
b.inadmissible because it was obtained in violation of her fourth amendment rights.
c.admissible, according to the search incident to a lawful arrest exception to miranda.
d.inadmissible because it was obtained in violation of her fifth amendment rights.
28) when a court identifies a meaningful difference between a present and past case, it
_____ the earlier decision.
a.interprets
b.implements
c.prioritizes
d.distinguishes
29) article 2 of the ucc does not apply to a sale of:
a.baseball bats.
b.harvested wheat.
c.corporate stock.
d.a new car.
30) if an ambiguity or conflict arises when people read and/or interpret a will, courts
will:
a.look for evidence of the intent of the testator within the will.
b.ask the family members or beneficiaries for their preference(s).
c.appoint a probate referee to decide the future of the will.
d.declare it void or invalidate the will due to ambiguity in the will.
31) the time period within which a customer must report unauthorized customer
signatures to the bank to get his account recredited is:
a.fourteen days.
b.six months.
c.one year.
d.three years.
32) in which of the following transactions is the buyer most unlikely to be entitled to
specific performance of the contract?
a.a contract for purchasing a historical artifact
b.a contract for purchasing 10,000 tons of wheat
c.a contract for purchasing a rembrandt painting
d.a contract for purchasing a 1910 ford
33) with regard to an lllp, a _____ is conclusive proof that a limited partnership exists.
a.domicile certificate
b.certificate of authority
c.certificate of incorporation
d.certificate of existence
34) what are the strategies followed by the tort reform movement?
35) why is it important for an assignee to immediately notify the obligor of the
assignment?
36) amy ames applied for a loan at local state bank. three weeks later, she received
notice from local state bank that her application had been denied. ames later learned,
from a reliable source, that the bank denied her application because a credit report on
her stated that she regularly uses and deals in illegal drugs. ames contends that this
statement in the credit report is untrue. what can she do?
37) why does negotiability matter? hint: to what is negotiability a prerequisite?
furthermore, why does this matter? also, why is it important to society?
38) nigel is the sole proprietor of a construction contracting business. as part of an
investigation into bid-rigging allegations, a grand jury issued a subpoena directing nigel
to turn over various records relating to his sole proprietorship. nigel had voluntarily
prepared the subpoenaed records. the government had long known that these records
probably existed, but of course did not know of their contents. nigel resisted the
subpoena on fifth amendment grounds, arguing that being forced to comply would
violate his privilege against self-incrimination. should nigel be required to comply with
the subpoena? why or why not?
39) the mandarin city contracts with the zoid construction company to construct a new
sewer system for the city. later, zoid breaches the contract. george, a resident of the city,
sues zoid for its breach of contract. can george recover? why or why not?
40) what happens if the principal is completely insane at the time of the agencys
formation, and in case the principal is sane at the time of agency formation, but loses
sanity some time later?
41) briefly discuss the four tests courts use to determine if an employees conduct was
within his or her scope of employment.
42) penny draws a check for $25.00 on her big bank checking account payable to the
order of carol. carol puts a 5 in front of the 2, raising the check to $525.00, and indorses
it. she then negotiates the check to mel. mel then presents the check for payment to big
bank, which pays her $525 and charges pennys account that amount. penny asks big
bank to recredit her account for $500.0, and big bank does so. what recourse does the
bank have and against whom?
