Maria posted several signs in the neighborhood offering $50 for the return of her lost
cat. Dave calls to get a description of the cat and tells Maria, “I’ll look for your cat.” A
contract is formed by Dave’s call to Maria.
Sue has a Bloomingdale’s credit card. On Monday she charged a $47.90 sweater and
then lost the card. Myra found it Monday and charged a $100 scarf and $400 purse. Sue
missed her card at 8 a.m. Tuesday and called the store. Myra then charged a coat for
$4,000. Sue’s bill was $4,547.90. Sue owes:
a. $47.90.
b. $547.90.
c. $97.90.
d. $4,547.90.
A detailed statement concerning the environmental impact of a proposed federal action
is:
a. a National Ambient Air Quality Standard.
b. an Environmental Impact Statement.
c. an environmental assessment.
d. an Environment Interior Standards Review.
The legislative branch’s primary check on both the judicial and executive branches is
the power to:
a. veto executive or judicial decisions.
b. confirm appointments to the courts and agencies.
c. appoint judges and cabinet officials.
d. None of the above.
Carol took her earrings off at Marcia’s beauty shop and put them on the counter. She left
the shop without remembering the earrings. Betty finds them and wants to keep them.
Can she?
a. Yes, since she is a finder.
b. Yes, she now is the true owner.
c. No, since the earrings were personal property.
d. No, Marcia would have the right to keep them as against anyone but Carol.
Which of the following would be charged to the life tenant’s interest in the course of
administering a trust?
a. Expenses of selling a trust investment.
b. The costs of establishing the trust.
c. Ordinary repairs to trust property.
d. Long-term improvements to the trust property.
The fair market value of a 10-foot fishing boat is $1,000. In a special promotion, J’s
Marina purchases a 10-foot fishing boat for $900. The boat is badly scratched when it
arrives. J’s Marina, however, accepts the shipment and notifies the seller of the defect.
The boat as delivered has a value of $800. If the damaged boat is a breach of warranty
by the seller, the buyer may recover from the seller:
a. $100.
b. $100 plus incidental and consequential damages.
c. $200.
d. $200 plus incidental and consequential damages.
The doctrine aimed at preventing any branch of government from gaining too much
power is:
a. judicial review.
b. federalism.
c. separation of powers.
d. preemption.
The crime of larceny includes in its definition:
a. the nontrespassory taking and control of personal property.
b. the trespassory taking and carrying away of personal property.
c. assault.
d. the taking and control of personal or real property.
A signed writing by a shareholder authorizing a named person to vote his stock at a
specified meeting of shareholders is a(n):
a. control.
b. affiliate.
c. proxy.
d. registration statement.
Philip has been in training for several months and now plans to run in the
school-sponsored, 10-mile, fun-run mini-marathon. He completes and signs an entry
blank which contains the statement, “I hereby agree to hold the sponsors harmless for
any injury sustained as a result of participation in this event no matter how such injury
may be caused.”
The source of law best suited to making drastic or comprehensive change is:
a. common law.
b. the federal court system.
c. statutes.
d. state court decisions.
If Margie makes out a check for $27.50 when she has only $10 in her account, her bank
may:
a. refuse to pay the check.
b. pay the check.
c. bill Margie for $17.50 and service charge.
d. Any of the above.
Which of the following would NOT constitute scienter?
a. Negligent performance of a substandard audit.
b. Actual knowledge of fraud.
c. Reckless disregard for truth.
d. Being paid to conceal fraud.
The Code defines __________ as “honesty in fact in the conduct or transaction
concerned.”
a. good faith
b. unconscionability
c. merchantability
d. entrusting
Which of the following is untrue about fundamental changes of corporations?
a. Fundamental changes include charter amendments, mergers, consolidations, and
dissolution.
b. Fundamental changes of corporations are authorized by state incorporation statutes.
c. Shareholder approval for fundamental changes usually needs to be unanimous.
d. The 1999 revisions to the RMBCA contained substantial revisions to the RMBCA’s
treatment of fundamental changes.
Section 14(e) of the Securities Act of 1934 makes it unlawful for any person to:
a. make any untrue statement of material fact in connection with any tender offer, even
if the target company is not subject to the 1934 Act’s reporting requirements.
b. omit to state any material fact in connection with a tender offer.
c. engage in any fraudulent, deceptive, or manipulative practices in connection with any
tender offer.
d. All of the above.
The __________ are orderly compilations of the general common law of the United
States, prepared by a distinguished group of lawyers, judges, and law teachers.
a. statutes of frauds
b. Uniform Commercial Code Articles
c. Maxims
d. Restatements of law
Nanette wanted to purchase a new car and found one she liked at Minson Motors.
Several important contractual terms were buried in the written agreement and some of
the meaning of the contract was obscured by legal jargon. These practices involved:
a. procedural unconscionability.
b. substantive unconscionability.
c. adhesion.
d. exculpatory clauses.
Claudia sells her highly successful hair salon to Carl. In the sales contract, Claudia
agrees never to open a hair salon in the state. Which of the following best describes this
contract clause?
a. Void as an illegal violation of a statute.
b. Valid as a reasonable restraint on trade.
c. Unenforceable as a violation of public policy.
d. Binding as fair protection.
Which of the following would not usually be found in the articles of incorporation of a
corporation?
a. The number of directors necessary for a quorum.
b. The name and address of the corporation.
c. Address of each incorporator.
d. The number of authorized shares.
Bill is a member of the board of directors of Telmar Corp. He would like to have the
corporation lend him some money so that he can begin another business venture. Which
of the following is correct regarding loans of a corporation to one of its directors?
a. The Model Act does not permit a corporation to lend money to its directors without
authorization in each instance by its shareholders.
b. The Sarbanes-Oxley Act prohibits any publicly held corporation from making
personal loans to its directors, with limited exceptions.
c. Both the Model Act and the Revised Act prohibit loans to directors in all cases.
d. Both (a) and (b).
All but which one of the following is required of a negotiable instrument?
a. It must be payable only out of a particular fund.
b. It must contain an unconditional promise to pay a fixed amount in money.
c. It must be payable on demand or at a definite future date.
d. It must be in writing and signed by the maker or drawer.
What are the powers of the Equal Employment Opportunity Commission (EEOC)?
The principal has a duty to indemnify the agent for losses incurred or suffered while
acting as directed by the principal in a transaction which is not illegal or wrongful.
Describe an LLC and the rights of its members.
The term “eminent domain” refers to a governmental taking of private property for
public use.
The UCC “risk of loss” rules assign the loss according to who has ownership of the
goods.
A collective mark is used in connection with goods or services to certify their regional
origin.