Archives: Quiz

Corporations as a business entity cannot be charged with a crime, only the individuals that make up the company’s officers and board. When a corporation issues securities under a nonpublic offering or safe harbor exemption from SEC regulations, they are […]

The manager at an apartment complex has no prior criminal record but has just been arrested for possession of child pornography. If he is convicted but given probation and not jailed, the apartment complex may be liable if they do […]

If Bill Gates goes into a car dealership and buys every car on the lot for sticker price, the dealer has suffered no contractual detriment because he’s in the business of selling cars and got full price. Actual trade secrets […]

A Chapter 11 debtor may use bankruptcy as an excuse for not performing contractual obligations. Even if a debtor’s salary is more than the median income for their state, they are still eligible for Chapter 7. Answer: FALSE A debtor’s […]

When a party breaches a contract, the nonbreaching party always has the option of seeking legal or equitable remedies. It may not be discriminatory to require that persons in a protected class, in certain instances, be afforded special rights. Answer: […]

Ethical misconduct includes not only illegal and unethical practices but also includes questionable practices of managers and organizations. Bankruptcy laws come solely from state statutes and case law. Answer: FALSE Laws governing bankruptcy are primarily federal. Courts are generally inclined […]

Religious teachings and ethics are separate and distinct and rarely if ever overlap. If a jury is deadlocked and cannot come to a decision at the end of a trial, the prosecutor may not bring charges to retry the defendant […]

Unless limited by the articles of incorporation, shareholders may vote to remove a director with or without cause, however; the courts may only remove a board member for cause. An easement is a nonpossessory interest in land. Answer: TRUE An […]

Security sales to venture capitalists often do not require full registration. The legal detriments exchanged by the parties must be equal, or reasonably close to equal, for consideration to be valid. Answer: FALSE The court does not usually look to […]

Saying that “this car is the ultimate driving experience” is an example of puffery. When the judge issues the jury instructions, the judge is said to be charging the jury. Answer: TRUE A judge charges the jury by giving them […]

Kathy is the president of a corporation. She has just made the news by being discovered with a male prostitute while at a conference. Mike, a shareholder, may successfully present a proposal at the next shareholder meeting calling for a […]

Individual consumers may bring an action against a collection agency for damages suffered by collections efforts. Joe and Josephine have started a plumbing business and have incorporated. They invest nothing into the corporation and the corporation has minimal assets. One […]

Securities may not be sold or marketed to the public until the SEC has completed its review phase and the registration becomes effective. The law tends to provide more protection to residential tenants than it does to commercial tenants. Answer: […]

Med-arb is a form of ADR in which both a mediator and an arbitrator work simultaneously with the disputing parties to resolve differences. A business subject to an agency’s jurisdiction is required to turn over documents relevant to determining compliance […]

The standard that must be met for a plaintiff to win a trademark dilution claim is likelihood of confusion. Kathy and Tom are filing for divorce. Their marital home, that they still live in, is worth $7.5M and their furniture […]

The effects test has been used by courts to establish personal jurisdiction over out-of-state defendants for both intentional and unintentional acts which have caused harm to in-state plaintiffs. Administrative agencies are not empowered to hear cases of alleged violations of […]

Emmanuelle has been the subject of intense and continuous hostile environment sexual harassment over a period of months. If she quits before filing a complaint with the EEOC, she forfeits the right to file the complaint and seek damages. Ike […]

In Oncale v. Sundowner Offshore Services, Inc., the court determined that same sex harassment is a legitimate issue covered and actionable under Title VII. Jan has been fired by her employer for poor job performance. Jan is still entitled to […]

The Model Penal Code has been adopted by only about half of the states. Unsecured creditors may seize any asset of the borrower once they have a debt collection judgment. Answer: FALSE Some assets like the homestead are protected from […]

The physical presence of an out-of-state party in a particular state is generally an automatic basis for jurisdiction over the defendant by both that state’s courts and the federal trial court within that state. Because there is no general duty […]

Requiring a franchisee to purchase all franchise related materials and supplies, trademarked and otherwise, from the franchisor violates the Small Business Franchise Act. A general partner who rightfully dissociates from a partnership remains liable for predissociation debts of the partnership. […]

The defendant in a civil case is the party who is suing. A will may only be revoked by operation of law; it may not be revoked by act of the testator. Answer: F The category of protected consumers for […]

The Sarbanes-Oxley Act (SOX) made minor adjustments to penalties and prison sentences for executives of companies. An owner ordinarily is not liable for harm caused a third person by the negligence of an employee of an independent contractor. Answer: T […]

A debit transaction occurs when a person making a payment requests such payment be made to the beneficiary’s bank. An auto manufacturer is excused from liability if it can be shown the defect was in a component part purchased from […]

In an FOB shipment contract title to the goods pass to the buyer when goods are delivered to the carrier. A surety may not raise the defense of mistake. Answer: F An assignment, if otherwise valid, takes effect the moment […]

When specifically bequeathed property is sold or given away by the testator prior to death, the bequest is considered “redeemed.” One advantage of our current legal system is that the growth of technology has not created many new laws. Answer: […]

By operation of law, the trustee automatically becomes the owner of all of the debtor’s property in excess of the property to which the debtor is entitled under exemption laws. When a buyer makes a purchase without relying on the […]

For accountants, fraudulent malpractice always involves upgrading the financial condition of the firm. Directors are usually allowed to vote by proxy. Answer: F A federal agency planning to adopt a new regulation must give public notice of such intent and […]

A check is drawn on the assumption that the bank has sufficient funds in the drawer’s account for payment. If the tenant uses the property for any purpose other than the one specified in the lease, the landlord has the […]

The Americans With Disabilities Act prohibits employers from discriminating against disabled individuals, but does not require that any accommodations be made for such individuals. To make a valid will, the testator must have testamentary capacity. Answer: T Solid waste disposal […]

A check that is postdated ceases to be order paper. The sole issue addressed in the Fair Labor Standards Act is child labor. Answer: F An owner of a copyright may license some of his or her rights to another […]

An exclusion of warranties made in the manner specified by the Uniform Commercial Code is not unconscionable. An involuntary bankruptcy case is commenced by creditors filing a petition with a bankruptcy court. Answer: T When purchasing from a website, the […]

Women who are unable to work as a result of pregnancy, childbirth, or related medical conditions must be provided the same benefits as all other workers. Such benefits include temporary disability insurance, long-term disability insurance, and sick leave. The key […]

A motion for a directed verdict occurs immediately after the last pleading is filed. A trustee cannot make decisions on matters that could not be foreseen by the settlor. Answer: F To be lawful, affirmative action must be time-limited . […]

In January, a buyer and a seller agreed on the sale of 10,000 pounds of tomatoes to be delivered on July The contract stated that the seller would set the price on June 15 and that the buyer would pay […]

A nonnegotiable instrument’s terms are not enforceable. A limited liability company is identical to a Subchapter S corporation. Answer: F In general, transferees who are aware of facts that would make a reasonable person ask questions are deemed to know […]

In approximately 50% of all bankruptcies no unsecured creditors receive any payments. In order to satisfy the statute of frauds, all partnership agreements must be in writing. Answer: F A registration certificate for a partnership’s fictitious name contained the names […]

Personal property that has become a fixture is still classified as personal property. Under the Litigation Reform Act of 1995, issuers of forward-looking statements that were not knowingly false when made have a safe harbor from related lawsuits if appropriate […]

When a court finds a clause of a contract unconscionable at the time it was made, it may enforce the remainder of the contract. Contract terms may not be implied from conduct. Answer: F The Insider Trading and Securities Fraud […]

For the past century, the United States Supreme Court has generally followed the “living document” view in interpreting the Constitution. The covenant of quiet enjoyment protects the tenant from interference with possession by the landlord or the landlord’s agent, and […]

Generally, a secured creditor who has repossessed collateral may retain the collateral and cancel the debt. An offer is effective only if it is communicated by the offeror in person. Answer: F Bill decided that it was time to remodel […]

The warranty liability of a qualified indorser is the same as that of an unqualified indorser. A sale of goods or services for $25 or more made to a buyer at home may be set aside without cause within five […]

Stock that is reacquired by the corporation that issued it is commonly called “boomerang” stock. A court with limited jurisdiction can only hear certain types of cases. Answer: T The fact that a tort or crime is committed by an […]

Plaintiffs suing for damages caused by a defective product are limited to taking action only against the manufacturer(s) of such goods. A tenant can claim that there has been a constructive eviction even if the tenant continues to occupy the […]

The defense that a signature was forged or signed without authority cannot be raised against any holder if the person whose name was signed has ratified it. When a nationally-known neurosurgeon in Chicago, Illinois sells her practice, the contract may […]

Advertisements that call for an act may be deemed to be a unilateral contract. In a Chapter 7 bankruptcy, the debtor’s nonexempt assets are liquidated to pay debts. Answer: T A negotiable warehouse receipt states that the goods received will […]

The Federal Trade Commission administers the law prohibiting unfair methods of competition. Strict liability is one type of tort. Answer: T Fraud as to the nature or essential terms of an instrument is a limited defense not available against a […]

If a merchant receives and cashes a check for partial payment of a debt and the check bears the notation that the amount is in full payment of a disputed sum, the total debt is released. An employment contract always […]

When a credit application is refused, it is sufficient that the lender give the applicant a written statement saying: “application refused.” UCC Article 2 applies not only to contracts for the sale of familiar items of personal property, such as […]

Tom Creighton hired Destroy, Inc., a demolition company, to level an old building on a busy downtown lot. Destroy, Inc. was given full rein to decide on the amount of explosives needed and the placement of the charges. Security for […]