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1) abby promises to pay brian $50 if he will mow abbys lawn. brian does not promise to
mow abbys lawn; however, later that day, brian completely and satisfactorily does mow
abbys lawn. this is an example of a unilateral contract.
2) mark, john, and graham are partners. mark voluntarily and nonwrongfully leaves the
partnership. however, the partnership has a three-year lease with green real estate inc.
so long as mark leaves the partnership, he is no longer liable for the lease agreement.
3) a corporation with one person who is the only shareholder, officer, and director will
have its corporate veil pierced, making that person personally liable for all the
obligations of the dominated corporation.
4) a person who purports to act on behalf of a terminated corporation has the liability of
a person acting for a corporation prior to its incorporation.
5) generally, real defenses arise out of the transaction in which the negotiable
instrument was issued and are based on negotiable instruments law or contract law.
6) the statute of frauds applies exclusively to executory contracts.
7) the increasing use of comparative principles in product liability cases is due to the
popularity of the three traditional defenses used in product liability cases.
8) a fee simple absolute gives a person the right to possess and use property for a time
measured by his or another persons lifetime.
9) under the restatement (second) of contracts, intoxication will make a contract
voidable if the other party had reason to know that the intoxicated person was so
intoxicated that he/she did not understand the transaction.
10) the federal trade commission is an executive branch of the federal government.
11) in exclusive dealing contracts, sellers have an obligation to use their best efforts to
supply the goods to the buyers.
12) when a tenant in common dies, his interest in the property does not automatically
transfer to the other tenants in common.
13) the federal water pollution control act (fwpca) is also known as the:
a.ocean dumping ban act.
b.river and harbor act.
c.safe drinking water act.
d.clean water act.
14) which of the following can be recovered by plaintiff who usually wins a tort case?
a.injunction
b.arbitration award
c.compensatory damages
d.conditional privileges
15) when a majority of the directors of a corporation are not independent and the
shareholders bring a derivative action against the directors, the burden of proving that
the zapata test has been met lies on the:
a.company secretary.
b.secretary of state.
c.corporation.
d.shareholders.
16) under the racketeer influenced and corrupt organizations act (rico), a pattern of
fraud is proved by the commission of:
a.two predicate offenses within a 10-year period.
b.five predicate offenses within a 20-year period.
c.two predicate offenses within a 20-year period.
dfive predicate offenses within a 10-year period.
17) which of the following describes a stipulation?
a.an offerors right to determine the manner of acceptance
b.an offerees right to determine who to contract with
c.the courts right to provide gap-fillers in a contract
d.additional terms in a contract in order to make it binding
18) how can a patentee transfer ownership of the patent to another party?
a.specification
b.assignment
c.delegation
d.infringement
19) where the impostor has impersonated a person authorized to act for a payee:
a.the responsibility for determining the true identity of the payee is on the bank.
b.the impostor has the power to negotiate a check drawn payable to the payee.
c.the later holder does not have good title to the check as the payees signature is not
valid.
d.the loss is shared by the maker and the bank that negotiated the forged instrument.
20) the common law held that landlords:
a.did not have the right to evict tenants for nonpayment of rent.
b.needed to make necessary repairs of their leased premises.
c.were responsible for the injuries caused to tenant due to their negligence.
d.made no implied warranties about the quality of leased premises.
21) which state passed the first limited liability company (llc) statute in 1977?
a.wyoming
b.nevada
c.montana
d.nebraska
22) sarah is 16 years old. she left home at age 15; her parents no longer support her.
sarah entered into a contract with best groceries for the purchase of $100 of groceries
on credit. the groceries consisted of basic, necessary items. however, their reasonable
value is only $80. if sarah discovers that she has been overcharged and refuses to pay,
best groceries is entitled to collect:
a.nothing.
b.$80.
c.$100.
d.$90.
23) an artisan who makes an improvement on a personal property is given a _____ on it
until he is paid.
a.lien
b.warranty
c.guaranty
d.credit
24) is it possible for a party that has waived rights to a portion of the contract not yet
performed to retract the waiver? how?
a.yes. the party will be able to immediately assert the late payments as grounds for later
canceling the contract.
b.yes. the party can give reasonable notice to the other party that strict performance will
be required.
c.no. once a party has waived rights to a portion of the contract, it will not be able to
assert this as grounds for later canceling the contract.
d.yes. the contract is assumed to be made in good faith.
25) in a state that uses the restatement (second) of torts of 1965, who amongst the
following may hold an accountant liable for common law negligence?
a.only the client.
b.only the client and a third party that the accountant knew would rely on the
accountants work for a particular purpose.
c.only the client. a third party that the accountant knew would rely on the accountants
work for a particular purpose, and others who are in the same limited class as that third
party.
d.any third party that is a foreseeable user of the accountants work may hold him/her
liable if that third party suffers a loss as a direct result of the accountants negligence.
26) shania watson has a checking account at the capital bank of new york. she goes to
lowes and agrees to buy an electric water heater priced at $700. she writes a check to
pay for it. shania is the _____ of the check.
a.payer
b.drawer
c.payee
d.drawee
27) which of the following is not true about the management powers of partners?
a.a partner whose name is not on the signature card filed with the bank does not have
apparent authority to issue checks.
b.a partners knowledge of material information relating to partnership affairs is imputed
to the partnership.
c.a partner has implied and apparent authority to indorse and cash checks drawn
payable to the order of the partnership.
d.a partner who has the authority to borrow money also has authority to issue negotiable
instruments.
28) which of the following statements about standardized form contracts is false?
a.frequently, the terms of standardized contracts are negotiable.
b.they are used both online and offline.
c.they are contracts that are preprinted by one party and presented to the other party for
signing.
d.in most situations, the party who drafts and presents the standardized contract is the
party who has the most bargaining power in the transaction.
29) hamish invested in the securities of the abc corporation (abc). he lost a great deal of
money on those securities after abcs president admitted that financial statements about
the profitability of abc had been materially exaggerated. andy accountant (aa) had
audited those statements and had issued an unqualified opinion that they complied with
gaas and gaap. hamish has sued aa using section 10(b) of the securities exchange act of
1934 as the legal basis of his/her suit. to succeed, hamish must prove that:
a.aa acted with scienter.
b.hamish was in privity of contract with abc or aa.
c.aa acted negligently.
d.aas actions have a connection with intrastate commerce.
30) what is the first-to-invent rule?
31) harold and dorothy own all of the shares of ace corporation. robert, aces landlord,
sued ace for unpaid rent. robert received a $10,000 judgment against ace. when robert
tried to collect on the judgment, he discovered that ace corporation had no assets. he
then discovered that harold and dorothy no longer operate ace corporation. they now
operate optimus corporation as the only shareholders. harold and dorothy had no assets
in their names. however, upon further investigation, robert discovered that optimus had
numerous assets. he reviewed the financial documentation, discovering that optimus
pays for harold and dorothys mortgage, medical bills, and grocery bills. can a court
pierce the corporate veil? discuss.
32) rement corporation is incorporated under the laws of new jersey. rement maintains a
sales agent in new york city, who makes contracts in new york city. can new york
impose an income tax on rements profits from its new york sales at the same rate it
taxes income from domestic new york corporations?
33) since the exclusionary rule has often resulted in suppression of convincing evidence
of crime, it has generated controversy. how has the supreme court dealt with this?
34) the maximum number of shareholders that are allowed in a subchapter s corporation
is:
a. 50
b. 75
c. 100
d. 500
35) wally invited dorothy to his apartment. while walking down the stairs in the main
hallway of the apartment building, dorothy tripped over a loose piece of wall-to-wall
carpeting. when she fell to the floor, two of her teeth were knocked out. dorothy has
sued wally and marginal properties, inc. (the owner of the apartment building) for the
dental expenses she incurred. are wally and marginal liable? explain.
36) andrew decides to incorporate his sole proprietorship under the name sampras
entertainment corporation. he tells his lawyer to file articles of incorporation, and the
lawyer says that the filing will be done on july 1. on june 25, andrew makes a contract
with wimbledon corporation. andrew signs the contract in the name of sampras
entertainment corporation only. on july 1, the secretary of state files the articles. under
the mbca, is andrew liable on the contract with wimbledon?
37) bigcorp, inc., a huge conglomerate with interests in various industries, is acquiring
odorific co., the nations leading manufacturer of mens socks. none of bigcorps current
family of companies purchases socks, nor do any of bigcorps suppliers. bigcorp
purchased odorific after a study conducted by bigcorp concluded that startup costs in
the sock industry made a de novo entry impractical, and that none of the existing mens
sock manufacturers other than odorific could be acquired for a reasonable price.
odorifics competitors were stunned by the acquisition. they wish to challenge the
acquisition. which theory of attack best suits this case? explain your reasoning.
38) give two reasons why the surety-guarantor distinction is important.
39) tim and julia are the majority shareholders of eduventures, inc. together they own
800 of the companys shares. the remaining 200 shares are held by passive shareholders.
the profits of eduventures dwindled to just 8 percent last year. furthermore, tim and julia
realized that as much as 3 percent of profits are being spent in complying with the rules
of public ownership. suggest a way for them to go private without forming a new
corporation.
