Although under GATT’s most-favored nation provision all signatories must treat each
other as favorably as they treat any other country, nations may give preferential
treatment to developing nations and may enter into free trade areas.
a. True
b. False
Often arbitration is preferred over litigation because the quality of the arbitrator’s
decision is often higher than that available through the court system.
a. True
b. False
The National Pollutant Discharge Elimination System may require that discharge
permits be obtained from:
a. the EPA.
b. the Army Corps of Engineers.
c. an individual state.
d. All of these.
Both the Fifth and Fourteenth Amendments contain due process clauses.
a. True
b. False
Rulemaking powers of federal agencies are primarily governed by the:
a. SEC.
b. APA.
c. FCC.
d. NHTSA.
In a state that adopts the lien theory regarding mortgages, the borrower would have the
right to:
a. burn down the barn.
b. live on the land after default.
c. possess the land after foreclosure.
d. refuse to discharge a prior lien.
Assume that Denmark, a member of the European Union, is contemplating the
enactment of a protective tariff for its fledgling CD industry due to domestic political
and economic pressures. Assume further that the EU has a tariff that it has also enacted
for all CD manufacturers within the EU that is considerably lower than the one that is
being proposed in Denmark. The policy behind the lower EU tariff is to promote freer
trade even at the risk of destroying some of the weaker manufacturers in that
organization. In this situation:
a. Denmark could enact the higher tariff since EU members give up no authority to the
organization in regulating trade and business practices.
b. Generally, when EU economic policies and rules conflict with the laws of member
nations, EU law will prevail. Thus, Denmark’s tariff may be illegal.
c. Denmark could petition the United Nations Council of Economic Policy and if it
concurs with Denmark, the
EU tariff policy would be overridden.
d. Assuming Denmark is a signatory to WTO, it could retain its higher tariff since the
purpose of WTO is to protect domestic industries by promoting higher tariffs.
Conditions may be classified:
a. by how they are imposed.
b. by when they affect a duty of performance.
c. Both of these; they are not mutually exclusive.
d. Neither of these.
For an environmental effect to be treated as a public nuisance there must be some
interference with the health, safety, or comfort of the public.
a. True
b. False
Assuming there are no provisions in the corporation’s articles of incorporation or
bylaws regarding quorum requirements, if there are 13 total directors of General Gonzo
Corporation and the minimum number of directors are present to transact business, how
many votes normally would be necessary for those present to act as a board?
a. 7
b. 4
c. 6
d. 11
A pretrial conference between the judge and the attorneys representing the parties in a
lawsuit is held to simplify the issues in dispute and to encourage settlement of the
dispute without trial.
a. True
b. False
A, a wholesale distributor, sells to B, a retail dealer, a set of defective tires
manufactured by X, a reputable manufacturer. Both A and B believed the tires to be in
perfect condition, although neither party has inspected the tires. C purchases the tires
from B and is injured because the defective tires blew out. Who, if anyone, is liable to C
in strict liability?
a. A, B, and X share liability to C under strict liability.
b. Only X, who manufactured the tires, has strict liability.
c. Only B, who sold the defective tires to C, has strict liability.
d. No one has strict liability in this case.
In addition to acting as a broad source of federal power, the Commerce Clause also
restricts the power of the states to regulate activities if the result obstructs or unduly
burdens interstate commerce.
a. True
b. False
The Securities and Exchange Commission (SEC) consists of five commissioners.
a. True
b. False
Seth grants express authority to Reba to enter contracts on his behalf. If Reba discloses
to third parties that she is an agent for Seth, she has liability on a contract in all but
which of the following situations?
a. Reba makes a contract in her own name.
b. Reba makes a contract within the scope of her authority and discloses that she is
acting for Seth.
c. Reba co-makes a contract with Seth.
d. Reba guarantees that Seth will perform the contract.
e. Reba cannot be held liable on a contract when she discloses she is Seth’s agent as
long as the contract is
within her scope of authority.
A security agreement may include only presently owned inventory, accounts, or
equipment of the debtor, not property that is subsequently acquired.
a. True
b. False
Patricia Plaintiff, a resident of California, has a valid judgment against David
Defendant, a resident of Nevada, which she now wishes to execute. David owns
hundreds of acres of beach-front property in California. Patricia may execute her
judgment in California based on what type of jurisdiction?
a. Subject matter jurisdiction
b. Concurrent federal jurisdiction
c. Quasi inremjurisdiction
d. Diversity of citizenship jurisdiction
Which of the following is true with regard to the federal Electronic Fund Transfer Act?
a. It is primarily a disclosure statute.
b. It gives the same protections to customers that are found in Article
c. It limits a customer’s liability for unauthorized transfers to $500 if notification
requirements are met.
d. All of these.
In the Supreme Court’s view, the “Necessary and Proper” Clause:
a. authorizes Congress to legislate only in areas mentioned in the list of enumerated
powers.
b. enables Congress to legislate in areas not mentioned in the list of enumerated powers
as long as such legislation reasonably relates to some enumerated power.
c. extends ‘state action” to action taken by private citizens whenever such interpretation
is necessary to protect
a fundamental right.
d. restricts state regulations that obstruct interstate commerce.
The profits realized for violation of Rule 16(b) are given directly to the shareholders as
a penalty to the corporation.
a. True
b. False
If Kathy indorses a check “without recourse”:
a. Kathy is not contractually liable if the check is not paid.
b. negotiability is destroyed.
c. the check cannot be transferred.
d. Kathy cannot transfer good title to the check.
Under the CFPA of 2010, publicly held companies must, on their proxy solicitations,
disclose and provide shareholders with a binding vote to approve any type of
compensation based on or relating to mergers, consolidations, or the proposed sale of
all of the assets of the company.
a. True
b. False
The person to whom an offer is made is an offeree.
a. True
b. False
Once a plaintiff has established a primafaciecase of discrimination on a disparate
treatment theory, and the defendant has articulated a legitimate and non-discriminatory
reason for the discrimination, a plaintiff may still win.
a. True
b. False
The warranty of habitability benefits only the original purchaser of a house.
a. True
b. False
A bailee has the exclusive right to possess the property for the term of the bailment.
a. True
b. False
Franz signs a $1,000 note payable to ABC Bank. If, to help Franz get the loan
approved, Amy also signs the note as an accommodation maker:
a. Amy’s liability is the same as that of an accommodation indorser on a check.
b. the liability of each party to the bank is: Franz $500 and Amy $500.
c. Amy has secondary liability on the note.
d. Amy and Franz both have primary liability on the note.
Redemption is not permitted if the corporation:
a. asks for an injunction.
b. would reduce its total assets below the stated capital amount by the redemption.
c. has outstanding treasury shares.
d. is likely to be rendered insolvent by the redemption.
Tom breached a contract he had with Jim. In addition to other remedies available, Jim
may be able to recover commercially reasonable expenses incurred as a result of the
breach. These expenses are:
a. incidental damages.
b. punitive damages.
c. liquidated damages.
d. extraordinary damages.
A writ of execution is issued after a judgment against the debtor is entered in court.
a. True
b. False
The liability of manufacturers and other sellers of goods for a defective product may be
based on all but which of the following?
a. Negligence and misrepresentation
b. Violation of a statutory duty
c. Warranty and criminal liability
d. Strict liability in tort