A promisor who renders performance to the assignor without notice of the assignment
still bears liability under the contract.
Answer:
An oral license for the temporary use of another’s land is enforceable.
Answer:
Many courts allow a third party to rescind a contract when the person has relied on a
misrepresentation by the agent even though the contract contains an exculpatory
clause.
Answer:
The adversary system in the United States is based on the idea that the truth will emerge
in courtrooms through a “battle of words” between two lawyers.
Answer:
A group of people who must reach a consensus on an acceptable level of risk often
decide on a level of risk lower than the risk they would accept as individuals is known
as risky shift.
Answer:
Describe the accountant-client privilege.
Answer:
Under the notion of federalism, the United States is composed of 51 different legal
systems.
Answer:
The Safe Drinking Water Act does not regulate disposal of wastes in wells.
Answer:
Minors’ contracts are not voidable.
Answer:
If the creditor allows the principal an extension of time to perform the contract,
compensated sureties are relieved of liability unless they consent to the extension of
time.
Answer:
A buyer has the right to retain goods, even if the bank refuses to pay the buyer’s check.
Answer:
Change of possession of commercial collateral from the debtor to the creditor/secured
party perfects the security interest.
Answer:
The Sarbanes-Oxley Act:
A. creates a PCA Oversight Board with the authority to regulate CPA firms that audit
publicly-traded companies.
B. narrowly defines the meaning of “obstruction of justice” and decreases the penalties
for conscious law breaking.
C. decreases the likelihood of detection and prosecution of illegal behavior.
D. adopts the theory of allocational efficiency, under which the primary objective of a
business corporation is to maximize profits.
Answer:
Injunctions are:
A. never used to compel specific performance.
B. not a form of equitable relief, which is granted depending on the equities of a case.
C. used to compel personal service, like specific performance.
D. available when a breach of contract threatens to produce an irreparable injury.
Answer:
The tort of disparagement:
A. requires proof of actual damage.
B. covers TRUE statements about the personal behavior of persons in business.
C. is identical to the tort of slander.
D. does not include truth as a common defense.
Answer:
According to the ____, when the insured has purchased insurance policies from more
than one insurer, the loss will be apportioned among the insurance companies.
A. coinsurance clause
B. pro rata clause
C. exculpatory clause
D. valued clause
Answer:
A promise exchanged for an act is an example of a:
A. a bilateral contract.
B. a unilateral contract.
C. an implied contract.
D. a quasi-contract.
Answer:
Under the MBCA, a subscription to buy stock in a corporation that is not yet in
existence is usually treated as a(n) ______ until incorporation is completed.
A. offer
B. promissory bid
C. acceptance
D. void
Answer:
An individual may freely use the trade secret of another if:
A. it was discovered through reverse engineering.
B. it was acquired from someone who breached a duty of confidentiality regarding the
secret.
C. it was obtained by improper means.
D. it was acquired by breaching the duty of confidentiality regarding the secret.
Answer:
Under the MBCA, a corporation does not need shareholder approval to purchase
securities out of:
A. equity surplus.
B. unrestricted earned surplus.
C. capital surplus.
D. restricted earned surplus.
Answer:
A _____ occurs when two or more corporations become part of a new corporation.
A. merger
B. takeover
C. partnership
D. consolidation
Answer:
To be sufficient, a financial statement:
A. must not provide any additional information concerning the property on which the
collateral is located.
B. must be effective for a period of two years from the date of filing.
C. must be filed only in the state of the debtor’s residence.
D. must indicate the collateral covered by the financing statement.
Answer:
In an act of recklessness, Robert bets his friends that he can drive down a crowded
street blindfolded, and ends up striking Tom. Under which of the following
circumstances would Tom be barred any recovery from Robert?
A. If Tom had not looked before stepping into Robert’s path.
B. If Tom had bet Robert’s friends he could run in front of Robert without being hit.
C. If the court had declared Robert’ act a foreseeable risk.
D. If Tom had the last clear chance to stay on the curb instead of stepping onto the
street.
Answer:
The doctrine of promissory estoppel does not require:
A. a promise.
B. a significant reliance on a promise.
C. an injustice as a result of reliance.
D. a consideration.
Answer:
Watten Construction contracted to build the Sillimans a house for $50,000. When
Watten began digging the foundation, it hit bedrock, which was highly unusual in that
area. Watten told the Sillimans that he required an extra $5000 to build the house. The
Sillimans agreed, but when the house was done, refused to pay Watten any more than
the original contract price. What can be the outcome if Watten sues the Sillimans for the
extra $5000 and why?
Answer:
Which of the following is TRUE of the right of a widow on a life estate?
A. The widow gets a one-third interest in fee simple, only in the real property owned by
the testator during their marriage.
B. The widow has the right to a life estate in two-third of the lands owned by her
husband at the time of his death.
C. The widow has the right to a life estate in one-third of the lands owned by her
husband during their marriage.
D. The widow gets a one-third interest in fee simple in the real and personal property
owned by her husband at the time of his death.
Answer:
Which of the following is TRUE about preexisting duty?
A. Agreeing to perform a preexisting duty is consideration.
B. A promisor’s promise not to commit a crime is consideration.
C. Promises by public officials to perform official duties are consideration.
D. Performing a preexisting duty is not consideration.
Answer:
Under this theory, the investor’s reliance on the integrity of the market was found to
justify a presumption of reliance on the misrepresentation.
A. The classical theory.
B. The misappropriation theory.
C. The fraud-on-the-market theory.
D. The interdependence theory.
Answer:
The statute that requires the TRUE owner of property to claim it or bring a legal action
to recover possession of it within a certain number of years after it has been mislaid is
the ____.
A. estray statute
B. real property statute
C. ownership statute
D. statute of limitations
Answer:
The following arises through the sale of ownership interests in the business in the form
of shares of corporate stock.
A. Bond securities
B. Equity securities
C. Debt securities
D. Proxies
Answer:
Which of the following types of corporations sells shares to people who often have
little interest in it except as investors?
A. Nonprofit
B. Closely held
C. Publicly held
D. Municipal
Answer:
An offeree who attempts to accept after an offer has terminated is making:
A. an offer.
B. a solicitation.
C. a revocation.
D. a counteroffer.
Answer:
When might a court grant relief for a unilateral mistake even if it is negligent?
Answer:
Explain destruction of subject matter as an excuse for nonperformance with an
example. Under what circumstance will it not be used as an excuse for
nonperformance?
Answer:
Peds, a wholesale shoe distributor, ordered a quantity of shoes from Ma Industries.
When Peds received the shipment, it discovered that all of the shoes were cracked and
peeling. Peds contacted Ma and stated that it was rejecting the shipment because the
shoes were defective. Peds wanted to ship the shoes back to Ma but received no
communication from Ma regarding what was to be done with the shipment. Peds did
not pay the remainder owed for the shipment and stopped payment on the check that
had been initially issued for the order. Subsequently, Peds had the shoes refinished by
another company and distributed and sold the shoes. Ma sued for the value of the
shipment. Did Peds accept the shipment of shoes and owe Ma for the goods?
Answer:
What is the main idea behind the Holder in Due Course rule?
Answer:
Explain the differences and similarities of the categories used to classify contracts by
their enforceability: valid, unenforceable, voidable, void.
Answer:
Under what circumstances can a tenant invoke the doctrine of constructive eviction?
Answer:
What strategies has the SEC pursued to protect U.S. investors throughout the world?
Answer:
Define future advances and explain how covering future advances in the security
agreement benefits the creditor.
Answer:
Describe the four steps in the process of legal interpretation.
Answer:
Linda deeded her house for consideration to her friend, Oliver, by quitclaim deed. One
year after the transfer, Oliver discovered that 50 year’s earlier, Linda’s great grandfather,
then the owner of the property, had transferred part of the property to a local church.
The church is now asserting ownership of the property and wants to build a parking lot
on the lot. What action, if any, can Oliver bring against Linda to recover damages for
breach of warranty of title in this case?
Answer: