A disparagement is an untrue statement made by one person or business about the
products, services, property, or reputation of another business.
Innocent misrepresentation is treated as a unilateral mistake.
The person who is given a life estate is called the life tenant.
Utility patents for inventions are valid for the whole of the inventor’s life and 70 years
after that.
A qualified indorsement puts limited liability on the indorser.
Principals do not control the means by which independent contractors achieve results.
General partners have unlimited personal liability for the debts and obligations of the
partnership.
Shares that are repurchased by a corporation are called unissued shares.
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 is considered
creditor-friendly.
A consideration need not be of legal value to be enforceable.
A database maintained by the InterNIC contains all the domain names that have been
registered.
________ is an ethical theory where a person adheres to rules or commands that are
from an outside source, like a book or a central figure.
A) Ethical fundamentalism
B) Utilitarianism
C) Ethical relativism
D) Rawls’s social justice theory
According to the doctrine of strict liability, which of the following parties is strictly
liable for injuries caused by a defective product?
A) only the manufacturers of the products
B) only the parties directly involved in the sale of the product to the customer
C) all parties providing services related to the product
D) all parties in the chain of distribution
Parties to a contract agree in advance to pay ________ damages if the contract is
breached.
A) nominal
B) compensatory
C) liquidated
D) consequential
If Gerard Koontz retires from being a general partner in a limited partnership, which of
the following is true?
A) A member from Mr. Koontz’s immediate family is allowed to take his partnership
interest.
B) Only the person Mr. Koontz nominates can take his partnership interest.
C) The partnership is dissolved according to RULPA norms.
D) The partnership operates normally without a general partner.
Harrison hires an agent to look for a three-bedroom house in Atlanta. Elaine, the agent,
finds a three-bedroom house in Harrison’s budget but buys it herself without informing
Harrison. This is an instance of the agent’s ________.
A) self-dealing
B) conflict of interest with the principal
C) competing with the principal
D) usurping an opportunity
A pharmaceutical company has disclosed a list of side effects of its new prescription
drug. A consumer who takes the drug in the right doses suffers from one of these side
effects and sues the company for product liability. Which of the following would be the
pharmaceutical company’s defense in this lawsuit?
A) The consumer was injured due to a supervening event.
B) The consumer had assumed the disclosed risks when purchasing the drug.
C) The side effects suffered by the consumer were generally known dangers of the drug.
D) The consumer abnormally misused the drug.
Klint Microsystems, a microprocessor manufacturer, was contracted by Zeitar Studios
to manufacture specially designed microchips to be used in an audio engineering
process. Zeitar was to pay Klint $300,000 as per the contract. Klint decided to redesign
their existing microchips and make them suitable for Zeitar. While the finished
microchips were being shipped via a carrier, Klint was informed of Zeitar’s insolvency.
Klint cancelled the shipment before it was delivered. Klint then resold the chips to
another studio where they had to settle for $150,000 as the chips were now only
suitable for specific audio engineering processes.
What right to remedy did Klint exercise when selling the microchips to another studio?
A) right to claim lost profits
B) right to cover
C) right to dispose of goods
D) right to recover damages
Which of the following is true of small offering exemption?
A) Securities coming under this exemption cannot be advertised to the public.
B) Securities coming under this exemption can only be sold to accredited investors.
C) Securities coming under this exemption can only be bought by nonaccredited
investors.
D) Securities coming under this exemption have no resale restrictions imposed on them.
What does the E-SIGN Act provide?
A) Electronically signed contracts cannot be denied effect because they are in electronic
form.
B) Electronic records can be sent to consumers who make purchases, without their
specific consent to receiving the record.
C) It defines which technologies should be used to create a legally binding signature in
cyberspace.
D) Only smart card verification creates a legally binding signature in cyberspace.
Which of the following is true of an S corporation?
A) The corporation can have no more than 100 shareholders.
B) Only foreign corporations with more than 10 shareholders can be an S corporation.
C) They are taxed at the corporate level.
D) The corporation must be a member of an affiliated group of corporations.
The plaintiff in a product liability lawsuit has suffered $100,000 worth of damages from
an automobile accident. A defect in manufacture of the plaintiff’s vehicle is found to be
60 percent responsible for the accident, while the plaintiff’s own negligence is 40
percent responsible. Under the doctrine of comparative negligence, how much would
the defendant€the manufacturer of the vehicle€have to pay the plaintiff in damages?
A) $60,000
B) $40,000
C) $100,000
D) The defendant would not have to pay any amount in damages.
Which of the following could contain the term “no-arrival, no-sale” in their contract?
A) shipment contract
B) destination contract
C) a contract to sell real estate
D) consignment contract
Which of the following is a provision under the Foreign Sovereign Immunities Act?
A) It stipulates the rules for conflict resolution between the Dominican
Republic-Central America Free Trade Agreement (DR-CAFTA) members.
B) It endows the president with powers to enter into treaties with foreign nations.
C) It exclusively governs suits against foreign nations in the United States.
D) It regulates commerce between the United States and foreign nations.
Which of the following statements is true of deposition?
A) A deposition is a written testimony given by a witness during the trial.
B) A deposition establishes the period during which a plaintiff must bring a lawsuit
against a defendant.
C) Depositions are written questions submitted by one party to a lawsuit to another
party.
D) Depositions are used to impeach testimony given by witnesses at trial.
Which of the following is true of the management of an LLC (limited liability
company)?
A) Members cannot become managers of an LLC.
B) A manager-managed LLC shares management powers between members and
managers.
C) A nonmember can become a manager of an LLC.
D) An LLC can be both member-managed and manager-managed simultaneously.
The ________ is a federal statute that authorizes the Environmental Protection Agency
(EPA) to establish national primary potable water standards.
A) Comprehensive Environmental Response, Compensation, and Liability Act
B) Federal Water Pollution Control Act
C) Clean Water Act
D) Safe Drinking Water Act
________ is the fraudulent conversion of property by a person to whom that property
was entrusted.
A) Bribery
B) Extortion
C) Embezzlement
D) Forgery
Sam Mueller and Geoffrey Robinson enter into a limited partnership in which Sam is
the general partner and Geoffrey is the limited partner. They borrow $50,000 to start a
business. Keeping all rules of naming their businesses in mind, they start a law firm
named Robinson-Mueller Legal Associates. Martin Humphrey joins them after eleven
months as a general partner but does not include his surname in the name of the
business. If the business fails, which of the following is true?
A) Only Sam, being the sole general partner is liable to the creditor.
B) Martin has unlimited personal liability for not including his surname in the name of
the business.
C) Geoffrey is liable as a general partner as he included his surname in the business
with full knowledge.
D) All three partners are equally liable to the creditor, irrespective of including their
surname in the title of the business.