Archives: Quiz

A(n)—is adissolution that is initiat-ed by creditors of an insolvent corporation, instead of by the board of directors. A. creditors’ dissolution B. voluntary dissolution C. administrative dissolution D. involuntary dissolution A corporation can be a partner in a partnership. Answer: […]

The scope of warranties remains the same regardless of whether the seller is a merchant or a casual seller. Documents filed by both parties at the beginning of a lawsuit are called the pleadings. Answer: T Answer: F

While most states have adopted limited liability company statutes, few states have created statutes allowing the formation of limited liability partnerships. Protection for trade dress is available under the Lanham Act. Answer: T The sole issue addressed in the Fair […]

Consideration is not required to establish or modify a letter of credit. A principal is not bound by statements made by an agent during the transaction of business that is within the scope of the agent’s authority. Answer: F Breach […]

Under the common law, an employer is under a duty to furnish an employee with a sufficient number of competent fellow employees for the work involved. In January, a buyer and a seller agreed on the sale of 10,000 pounds […]

Generally, misdemeanors are more serious than felonies. Coppersmith executed and delivered negotiable notes to the payee, Charlene. The payee indorsed the notes to Whitehurst but did not deliver them. Instead, she kept the notes in her possession because she wanted […]

When specifically bequeathed property is sold or given away by the testator prior to death, the bequest is considered “redeemed.” A cooperative consists of a group of two (2) or more independent persons or enterprises that cooperate for a common […]

Employment testing and educational requirements must be “job-related”; that is, employers must prove that employment testing and educational requirements bear a relationship to job performance. The statement, “I doubt that I can perform the contract,” is a repudiation of the […]

When a drawee has signified in writing on a draft the willingness to make a specified payment, the drawee is called the acceptor. The creditor first must proceed against the debtor before suing the surety. Answer: F The issuing or […]

Corporations are subject to a form of double taxation. A consent decree is an informal settlement of an enforcement action brought by an administrative agency. Answer: T Generic terms that refer to a type or class of goods are never […]

The seller of a painting is not bound by the sales contract if the painting purchased was considered of little value and only later discovered to be valuable to the surprise of both buyer and seller. Requiring buyers to purchase […]

Criminal penalties for corporations are based on a percentage of sales. Tuttle died at age 96, leaving a will that she made at age 40 that provided that her three children would share her estate equally. At the time of […]

It is possible for a limited partner to be subject to the debts of the firm if the limited partner participates in the control of the business. Sarbanes-Oxley (SOX) allows whistleblowers who are retaliated against an immediate lawsuit in federal […]

An agreement between real estate brokers to never charge a commission less than 6% is not an example of price fixing. A payee or indorsee whose name is misspelled may indorse the wrong name, the correct name, or both. Answer: […]

If an offer does not state how long it shall remain open, it remains open for ten days. An agency may arise by appointment, conduct, ratification, or operation of law. Answer: T A person who is prevented from enforcing a […]

The fact that payment on a check has been stopped does not affect its negotiable character. The Market Reform Act of 1990 empowers the SEC to suspend all trading when markets are excessively volatile. Answer: T Mary offered to sell […]

Ethical violations can cause lasting detriment to a company’s ability to do business through impacts on the company’s reputation. An instrument may be transferred by negotiation or by assignment. Answer: T A debtor must have rights in the collateral for […]

The scope of an agent’s authority is always known by the third party. Negligence and fraud are easy to prove in a mass production world. Answer: F The relationship of landlord and tenant is always created by an express contract. […]

With regard to transactions between merchants, failure to repudiate a confirming letter within ten (10) days after receipt binds the non-signing merchant, just as if he had signed the letter or a contract. The Equal Pay Act prohibits variation in […]

When it comes to the constitution, stability is more important than flexibility. Administrative agencies never allow members of the industry that is to be regulated to participate in rule-making deliberations. Answer: F A tenancy by sufferance describes a tenancy that […]

Legal issues in cyberspace include appropriation and competition issues. Perfection can occur merely by possession of the collateral by the creditor. Answer: T Public zoning and restrictive covenants in deeds have a similar purpose, but each has a different source […]

A condominium and a cooperative are essentially the same. The field of business ethics recognizes that social values typically must yield to the profitability motive. Answer: F Exoneration is an agreement that a party shall not be liable for loss. […]

Forgery includes signing another person’s name to a check with the intent to defraud. The obligation of all parties to perform in good faith is the same because everyone is required to be honest. Answer: F A negotiable instrument may […]

The Constitution may be amended, but it always has been interpreted in the same way. Administrative agencies are, in effect, a fourth branch of the government. Answer: T Arnold was the sole shareholder, president, and chief executive officer of Algernon […]

In some cases the court may require specific performance when there is a breach of contract. A general agent is authorized by the principal to do all acts that can be delegated lawfully to a representative. Answer: F Both general […]

The major advantage to investors in a corporation stems from the fact that their risk of loss is limited to the amount of their investment. The jurisdictional rule of reason addresses the problems that arise when a foreign country has […]

The authority of an agency is limited to the technology in existence at the time the agency was created. The Robinson-Patman Act guarantees a seller the right to refuse to deal with anyone for any reason or purpose. Answer: F […]

Roberta, an educated person, purchased real estate from Maurice. Roberta did not read entirely the contract that she signed. As a result, she did not notice the provision in the contract about the interest imposed on the unpaid portion of […]

The trustee may void any fraudulent transfer made by the debtor within two (2) years of bankruptcy when the debtor’s actual intent was to hinder, delay, or defraud creditors by engaging in the transfer. The general view is that the […]

New York follows the “contact” rule in determining when third persons can sue accountants for negligence. Until proven valid, a rule adopted by an administrative agency is considered invalid by the courts. Answer: F If a thief sells stolen property […]

To be effective, checks must be executed on forms that are printed expressly for that purpose and issued by a bank or other financial institution. Franchisors may be found liable for the wrongful conduct of their franchisees on an apparent […]

Each shareholder owns a proportionate share of the property of the corporation. Agent’s may intentionally make themselves liable on contracts with third persons. Answer: T A customer who has given a purchase order to a salesperson is not bound by […]

The time for performance is typically essential in a contract for the sale of perishable property. When a court decides a new question or problem, the decision is called a precedent. Answer: T The right to cut firewood from another’s […]

Under the RMBCA, a preincorporation subscription agreement is irrevocable for three (3) months unless the subscription agreement provides a longer or shorter period, or all of the subscribers agree to revocation. It is necessary that a third-party beneficiary be identified […]

Exchanges, brokers, and dealers who deal in the securities traded in interstate commerce or on any national security exchange must register with the SEC unless exempted by it. Administrative regulations generally do not have the force of a statute. Answer: […]

If a common carrier delivers goods to the wrong person, the carrier is liable for breach of contract and for the tort of conversion. Mediation is a generally accepted method of resolving disputes. Answer: T A firm offer is effective […]

Anne Robertson obtained telescopes from the See-Well Optics Company at dealer prices on the pretense of being a dealer in optical equipment. See-Well later determined that Robertson was not, had never been, and did not plan to be a dealer […]

The finder of lost property is usually entitled to a judicially-determined reward for finding and caring for the property until the rightful owner reclaims it. Charitable subscriptions by which individuals make pledges to finance the construction of a college building, […]

UCC Article 2 applies not only to contracts for the sale of familiar items of personal property, such as automobiles or chairs, but also to the transfer of commodities, such as oil, gasoline, milk, and grain. In the United States […]

An agent’s liability as a party to a contract with a third person is not affected by the degree of disclosure. If questions of fact are involved, the court will decide the case based on the pleadings alone. Answer: F […]

Due process includes the right to be heard, question witnesses, and present evidence. When necessary medical care is provided to a minor, a parent is liable at common law for the medical expenses provided the minor child. Answer: T An […]

The contact rule does not require that the accountant meet or communicate with the third party to establish a relationship equivalent to privity. A defined contribution plan is an employer commitment to make specific future payments to participants upon retirement. […]

The rights of the mortgagor after default include the right to obtain a stay of foreclosure to prevent undue hardship and a right of redemption. A trustee can delegate the performance of personal duties. Answer: F In dealing with the […]

Value is similar to consideration.. A lease provision requiring a tenant to obey regulations that may be subsequently adopted by the landlord is void because it is unconscionable. Answer: F The UCC does not specify the form that the assurance […]

In an emergency, an administrative agency can act beyond the scope of the statute that created it. A bailee’s duty of care for bailed property depends on the type of bailment. Answer: T A partner admitted as a partner into […]

In a case of the sale of property, time is not regarded as of the essence when there has not been any appreciable change in the market value or condition of the property and when the person who delayed does […]

Because administrative agencies have broad powers, they are subject to strict procedural rules as well as disclosure requirements. If a person upon whom the assurance is demanded does not have a good reputation or economic position, a guarantee of performance […]

The Securities Act of 1933 deals with the original distribution of securities by the issuing corporations. Only government agencies can sue for violations of an environmental protection control. Answer: F A bilateral contract is essentially an exchange of promises. Answer: […]

The purchase of a warehouse receipt by due negotiation eliminates all prior claims. In common usage today, there is no distinction between real and personal property. Answer: F The drawee of a check is always a bank. Answer: T The […]

When a suretyship or guaranty contract is entered into after and separate from the original transaction, there must be new consideration for the promise of the guarantor. The power of a court to decide certain types of cases is called […]