Archives: Quiz

Shareholders may not be held personally liable for a defective corporation’s actions. An injunction is a court order that either forces or prohibits a party from doing something. Answer: TRUE An injunction is a court order that either forces or […]

Administrative agencies have legislative, executive, and judicial powers. Under the UCC, oral testimony can be used to establish the existence of a lost writing. Answer: TRUE Noteworthy under the UCC is that oral testimony can be elicited that establishes the […]

The court will not award recovery on a quasi-contract. The U.S. Constitution establishes a system of checks and balances, which keep each branch’s power for dominating the government. Answer: TRUE The U.S. Constitution establishes a system of checks and balances, […]

When negligence per se applies, the plaintiff is required to show that a reasonable person would exercise a certain duty of care toward the plaintiff. Aggressors often try to win the favor of a few institutional investors that own large […]

The Fourteenth Amendment is part of the Bill of Rights. According to the UCC, a check is a special kind of draft. Answer: TRUE According to the UCC, a check is a special kind of draft. If Alice makes a […]

Capacity is the legal ability to enter into a binding contract. The UCC assumes that the seller has the right to transfer title free and clear of intellectual property rights of which the buyer does not have knowledge. Answer: TRUE […]

Regarding drug and alcohol testing of employees by employers: a. the NLRB makes it a mandatory subject of collective bargaining in a union setting. b. the constitutional protection from unwarranted search and seizure protects private sector employees from the practice. […]

A certificate of deposit differs from a promissory note in that, with a certificate of deposit: a. the maker is always a bank. b. there are three parties to the transaction. c. the payee of a CD must be paid […]

Costs incurred to acquire a nondelivered performance from some other source are consequential damages. a. True b. False Under the RMBCA, if a quorum exists, a shareholder action such as the election of directors is approved if the votes cast […]

A cease and desist order, issued by the FTC, directs a party to stop a certain practice or face punishment, such as a fine. a. True b. False No implied warranty exists: a. if it is disclaimed in any manner. […]

A stock split results in a larger proportion of corporate ownership by the shareholder. a. True b. False Intellectual property consists of which of the following? a. Trade secrets b. Patents c. Trade symbols d. All of these are considered […]

There is no necessity to distinguish language which constitutes an offer from that which merely solicits or invites offers. a. True b. False If a shareholder dissents to a proposed business combination, he is entitled to receive the fair value […]

Which of the following may influence a promoter to choose to incorporate in a particular state? a. Its restrictions on dividend payments b. Its tax on corporate earnings c. The rights granted to shareholders d. All of these Which of […]

Scienter is the element of fraud that requires that the person who makes the misrepresentation knows that it is false or has reckless indifference as to its truthfulness. a. True b. False Scott buys a television from Joe’s TV Store, […]

All price discrimination is illegal under the Robinson-Patman Act. a. True b. False Seth and Maricela enter into a contract for a sale of goods for a contract price of $1,200 and Maricela has made a down payment of $200. […]

If dividends are not declared for five years, but the company has accumulated earnings each year, the shareholders may: a. petition the court of law for redress. b. override the board with a two-thirds vote. c. ask for an injunction […]

Most states have adopted the theory that a mortgage is a lien on real property for the payment of a debt. a. True b. False “Acceptance” under the UCC always means taking possession of goods. a. True b. False Answer: […]

The word “merchantability” must be mentioned in a disclaimer of an implied warranty of merchantability. a. True b. False In most, if not all, cases where there is a legal detriment to the promisee, there is also a legal benefit […]

An agreement in connection with the sale of a business that prohibits the seller from engaging in the same or a similar business for a period of twenty-five years would be unreasonable. a. True b. False Under the NLRA, an […]

Identify the ways a partnership is dissolved by operation of law under the UPA. List the circumstances under which a court will order a dissolution of a partnership. Failure to give notice of dishonor will discharge the drawer from having […]

Both design and manufacturing defects can subject a manufacturer or seller to products liability. a. True b. False Bearer paper runs to whomever is in possession of it. a. True b. False Answer: True The Clean Water Act requires the […]

Eliza was an antique expert. She went to a tea party at Grandma Jones’ house and saw a magnificent Queen Anne table out on the back porch. She asked Grandma about it and was told it was in the way […]

Dale defaults on a car loan secured by his car and guaranteed by both Sam and Dave. Subrogation would allow Sam, who paid Dale’s full obligation, to: a. repossess the car. b. collect from Dave. c. collect from Dale. d. […]

To satisfy the statute of frauds, the person who wants to bring the lawsuit must sign a memorandum. a. True b. False Bill has had a problem with vandalism at his business. He rigs up a spring gun at the […]

The Revised Model Business Corporation Act has been adopted at least in part by more than half of the states. a. True b. False Insurance protects a business from: a. tort liability. b. strict liability. c. negligence. d. All of […]

All states have authorized the formation of limited liability companies. a. True b. False Bob took a check written by Jack to Jack’s bank to be certified. The bank stamped “Certified” on it and gave it back to Bob. What […]

Under the UCC, a(n)___is a sequence of previous conduct between the parties to an agreement which may befairly regarded as establishing a common basis of understanding for interpreting their conduct under the contract. a. course of dealing b. usage of […]

A general partner, but not a limited partner, may be either a secured or unsecured creditor of the partnership with the same rights as a person who is not a partner. a. True b. False The RUPA treats a partnership […]

Which of the following is true about a constructive trust? a. It normally contains detailed instructions for the trustee to follow. b. The court to redress an injustice imposes it. c. It is revocable by the trustee. d. It carries […]

Agencies may deny access to which of the following types of records? a. Those related to national defense and specifically authorized to be kept secret b. Those relating to internal personnel rules c. Trade secrets d. All of these. Damages […]

An employer can be liable for an agent’s negligence, but he will never be liable for his intentional torts. a. True b. False What is the effect of a payor bank’s dishonor of a check? a. It returns the check […]

Generally, whether or not the parties deal at arm’s length does not affect whether silence alone amounts to fraud. a. True b. False Which of the following is NOT true about Social Security? a. Disability insurance is one program within […]

Article 2A, in a provision analogous to Article 2’s warranty of title provision, protects the lessee’s right to possession and use of the goods from claims of other parties arising from an act or omission of the lessor. a. True […]

Assume an offeree mails a rejection to the offeror on November This rejection arrives at the offeror’s place of business on November In the meantime, on November 4, the offeree sends the offeror an acceptance that arrives November Which of […]

In a condominium: a. all residents own shares in the corporation that owns the building. b. each resident purchases a living unit in the building. c. the tenant owns a reversionary interest in the property. d. the tenant creates a […]

Hannah, as a joke, offers to sell her violin to Mike. Her statement would have legal effect if: a. the intended jest is so successful that Mike as a reasonable person under the circumstances believes the joke is an offer […]

Administrative agencies create more legal rules and adjudicate more controversies than all the legislatures and courts combined. a. True b. False Gary mails an offer to Brian on June Brian receives the offer on June Gary mails a revocation of […]

The delivery of personal property to a creditor as security for the payment of a debt is: a. perfection. b. a pledge. c. attachment. d. a general intangible. Which of the following is not covered by the Government in the […]

An oral promise by a limited partner to contribute to the limited partnership is enforceable. a. True b. False Alice offers to sell her computer, monitor, and printer to Bradley for $300. Bradley says he will accept provided thatAlice includes […]

The Code’s firm offer rule applies only to offers in writing that are made by a merchant offeror. a. True b. False All states except one have adopted either the 1976 or 1985 RULPA. a. True b. False Answer: True […]

A(n) is a measure designed to protect the public from unqualified practitioners. a. exculpatory clause b. revenue license c. regulatory license d. usury statute Ordinarily, an agent may delegate his duties to an equally qualified subagent. a. True b. False […]

A quorum consists of how many justices on the U.S. Supreme Court? a. 3 b. 5 c. 6 d. 7 Richard owns and operates a small business at an outdoor market where he sells fruits and vegetables. What does the […]

The fair market value of a 10-foot fishing boat is $1,000. In a special promotion, J’s Marina purchases a 10-foot fishing boat for $900. The boat is badly scratched when it arrives. J’s Marina, however, accepts the shipment and notifies […]

Upon rightful rejection or justifiable revocation of acceptance, the buyer loses all property interest in the goods. a. True b. False When the nonconformity or default substantially impairs the value of the installment but not the value of the entire […]

All but which of the following is required of a negotiable instrument? a. It must be payable only out of a particular fund. b. It must contain an unconditional promise to pay a fixed amount in money. c. It must […]

If a bank pays on a check after the death of its customer, the customer’s estate is not automatically entitled to reimbursement. a. True b. False Which of the following would ordinarily NOT be considered a security under the federal […]

The “perfect tender rule” would allow a buyer to keep merchandise that deviates from the contract without having to perform himself. a. True b. False Mr. and Mrs. Weaver have a duty to: a. control the behavior of their minor […]

Which of the following is generally NOT a defense to a claim against a manufacturer under 402A? a. Contributory negligence on the part of the plaintiff b. Express assumption of the risk c. Misuse or abuse of the product d. […]

Which of the following contracts is covered by Article 2 of the Uniform Commercial Code? a. The sale of a house b. The sale of a new car c. An employment agreement d. A sale of automobile insurance If a […]

Most lemon laws define a lemonas a car that: a. was sold by a dealer who refuses to make reasonable attempts to correct the problem. b. continues to have a defect that substantially impairs its use, value, or safety, even […]