1) promoters are personally liable on a preincorporation contract but are released from
liability when the corporation adopts the contract.
2) if a landlord has a lien towards the tenant, the landlord can remove or hold the
property of the tenant.
3) ordinarily, higher degree of proof of likely competitive injury is required in cases
involving secondary level price discrimination.
4) an involuntary bailee has the right to use or destroy the property.
5) an accountant performing an audit of a client has a specific duty to uncover an
employees embezzlement from the client.
6) a signature is sufficient to form the basis of authenticity of a written contract.
7) a promise not to sue another party is not consideration, because the promise does not
convey any legal value to the other party.
8) alex has executed a deed in favor of baxter which conveys in his favor whatever title
he has at the time he executes the deed. this deed is called a warranty deed.
9) often, federal district courts have concurrent jurisdiction with state courts.
10) when determining the risk of loss, it makes no difference whether the goods
delivered by the seller conform to the contract or not.
11) value is identical to simple consideration.
12) as per the colgate doctrine, a manufacturer cannot unilaterally refuse to deal with
those who fail to follow the manufacturers suggested resale prices.
13) vertical mergers directly result in an increase in concentration.
14) if the debtor defaults on his agreement with the creditor, the creditor repossesses the
collateral, and the creditor then sells the collateral. however, the creditor may also retain
any surplus if the amount realized on the sale exceeds the amount of the debtors debt.
15) _____ makes any contract valid from its inception and can be done effectively only
after a minor reaches majority.
a.disaffirmance
b.emancipation
c.ratification
d.consideration
16) which of the following ethical theories illustrates that acting in ones selfish interests
can ultimately result in ethical behavior and benefits to society?
a.rights theory
b.profit maximization theory
c.kantian theory
d.justice theory
17) express authority:
a.is created by agreement of partners.
b.is based on what is usual business for partnerships of the same general type.
c.is the sole determinant of a partners actual authority.
d.is established only in writing.
18) davis throws a dagger at smith, intending to kill smith. however, the dagger misses
smith and strikes the hat on potters head. the dagger does not make contact with potters
body. unharmed but finding the whole thing offensive, potter sues davis for battery.
which of the following is most true?
a.davis is not liable because he did not intend to make contact with potter.
b.davis is liable to potter for negligence.
c.davis is not liable because potter did not suffer any physical harm.
d.davis is liable to potter for battery.
19) magnum corp. rented a building from wheiler to set up an office for a 5 year lease
period. after the office was set up, it was found that the paint was peeling off in many
places, the washrooms were broken, and the floors were completely damaged. magnum
sued wheiler for damages. magnum will:
a.win the case because wheiler is the owner of the damaged premises.
b.win the case because property leased for commercial purposes is the owners
responsibility.
c.lose the case because the implied warranty of habitability is not applicable.
d.lose the case because wheiler has no responsibility to maintain his premises.
20) which of the following agencies is an executive agency?
a.the environmental protection agency
b.the consumer product safety commission
c.the national labor relations board
d.the internal revenue service
21) jack is marthas boss. they are lifeguards working for the city of miami. jack is very
interested in developing a romantic relationship with martha. however, martha is not
attracted to jack. his attention is unwelcome to her. jack tells martha that if she will
engage in sexual relations with him, he will give her the highest employee evaluation
possible, and she will get a raise. this is an example of:
a.quid pro quo sexual harassment.
b.sociological harassment.
c.hostile environment harassment.
d.tangible sexual harassment.
22) a written agreement was signed by two parties and it was intended to be their entire
agreement. the parol evidence rule will prevent the admission of evidence that is offered
to:
a.prove the existence of a contemporaneous oral agreement that modifies the contract.
b.prove the existence of a subsequent oral agreement that modifies the contract.
c.explain the meaning of an ambiguity in the written contract.
d.establish that fraud had been committed in the formation of the contract.
23) big corporation (bc) was dominated by its president, mr. vincent. he used his
dominance for an improper purposedefrauding lenders to the corporation. as a result, a
court can:
a.impose criminal penalties on him.
b.make him personally liable on the debts to those lenders.
c.terminate the corporate charter of bc.
d.compel him to resign.
24) kate is a partner in a limited liability partnership (llp) which provides accounting
services. acting within her authority, allie, who is one of kates subordinates, negligently
provides accounting services to a client. the client sues the llp and its partners. which of
the following is incorrect?
a.the llp is liable to the client.
b.allie is liable to the client, and the judgment may be satisfied out of her personal
assets.
c.kate is not liable for allies negligence.
d.kate is liable to the client, and the judgment may be satisfied out of her partners
personal assets.