Final Exam (10-19)
Which of the following would be an offer for a unilateral contract?
"Drive my car from Los Angeles to New York and I will pay you $750."
Which of the following would be sufficient to constitute an offer?
"I will sell you my white Ford Torino for $350."
Which of the following statements in an ad would trigger the requirement for full disclosure of all credit terms?
"Payments as low as $188.00 per month"
Which of the following would not be a basis for misrepresentation?
"These pants are the finest you'll ever own
Which of the following would be considered puffing?
"this house has the making for raising a happy family"
Jane and Rod Wyatt had a contract to purchase the home of Dana Garvey. Two days prior to closing, Dana refused to sell her home saying that she had changed her mind. The Wyatts were able to find a similar home nearby, but the cost was $10,000 more and they had to pay storage locker fees of $700 for their belongings until the second home was available. They also have to pay a premium rental charge of $1,250 to remain in their apartment for the two extra months after they had already terminated their lease in preparation for moving into Dana's home. What are the Wyatts' compensatory damages?
10,000
Which of the following could be disclosed by a consumer reporting agency as part of a credit report on a consumer?
A bankruptcy seven years earlier
To which of the following can a consumer reporting agency NOT disclose credit information?
A college or university evaluating an applicant for admission
Which of the following obligations would a minor NOT be liable for?
A contract for the purchase of a DVD player.
Which of the following contracts must be in writing in order to comply with the statute of frauds?
A contract for the sale of a land option for $300.
Which of the following contracts is void?
A contract that charges interest in excess of the statutory maximum.
Under the Fair Credit Reporting Act, which of the following disclosures could not be made by a credit reporting agency?
A department store looking for good credit risks for solicitation
What is the difference between a limited partnership and a limited liability partnership (LLP)?
All partners have limited liability in an LLP
Who must agree to a contract novation for it to be valid and enforceable?
All three parties: the two original parties and the new party to the agreement
Which of the following best describes the difference between an assignment and a delegation?
An assignment is a transfer of benefits and a delegation is a transfer of duties
Which of the following is subject to the Fair Debt Collections Practices Act (FDCPA)?
An attorney collecting Target debts from Target customers for Target
When do directors of corporations have personal liability?
Breach of fiduciary duty
Which of the following is NOT regulated by the Truth-in-Lending Act (TILA)?
Business Purchases
Which of the following would be insider trading?
Buying shares before your company announces its quarterly earnings report that you helped prepare.
Which of the following is the provision in bankruptcy that deals with consumer debt adjustment plans?
Chapter 13
Joan Bennett, Clark Sorenson, and Ramsey Clifford operated Cookies Galore as a partnership for nearly 12 years. Clark has decided to leave the business. Clark's primary responsibilities were ordering the supplies for baking their cookies and contracting for equipment purchases and repairs. Joan and Ramsey buy out Clark's interest in Cookies Galore and he leaves the business. Some months later, a creditor from Bosch Mixers notifies Clark that $12,000 is owed on a mixer Cookies Galore purchased and that the amount has not been paid. Clark explains that he left the business and Bosch's accountant replies, "No one told us." In addition, Clark has been ordering cookie base from a Cookies Galore supplier to start a new business. The bills have gone to Joan and Ramsey who have refused to pay Dough Base, the supplier, because they say Clark did the ordering and is no longer a partner. Dough Base's accountant replies, "No one let us know. We thought he was still with you."
Clark is liable for the $12,000 and Cookies Galore is liable to Dough Base
In which of the following does the business itself pay income taxes?
Corporation
Stock which carries unpaid dividends forward from year-to-year is:
Cumulative Preferred Stock
SwissAire, Inc. has filed a registration statement with the SEC for a public offering of common stock. The registration statement was completed on November 30, 1999, and filed on December 1, 1999. The statement became effective on December 30, 1999. Shares were first sold on December 31, 1999. When can SwissAire first run a tombstone ad?
December 1, 1999
What type of clause is used in contracts in order to excuse non-performance of an agreement?
Force majeure clause
What is the difference between fraud and misrepresentation?
Fraud is a defense to a contract where as misrepresentation is not.
Which of the following does not have ease of transferability of interest?
General Partnership
Which of the following forms of business structure can be created without compliance with statutory paperwork requirements?
General Partnership
Which of the following forms of business structure has management by its owners as opposed to centralized management?
General Partnership
Jane Fresno told her boyfriend that her firm had just landed a contract to sell 125 new airplanes to Delta Airlines. The news will not be public until the next day. Jane's boyfriend purchased 1,000 shares in Jane's company.
Jane's boyfriend has violated Section 10b.
In which of the following business forms do the owners not manage the firm?
Limited Partnership
What type of evidence is NOT permitted in establishing the existence of a contract and its terms?
Parol Evidence
Which of the following is an example of a condition precedent?
Qualifying for financing before required to purchase a house for which you have contracted.
Which of the following would be prohibited by the Equal Credit Opportunity Act (ECOA)?
Refusal to issue a credit card to a veteran whose only income is from Social Security.
Which of the following federal laws permits short-form registration for offerings of $5 million or less?
Regulation A
Which of the following would be considered a security for purposes of the Securities Act of 1933?
Sale of interest in a Florida Citrus Grove
Which of the following is not exempt from federal registration?
Sale of limited partnership interests
Homer Higgins operates a delivery service in Tulsa, Oklahoma. He delivers packages, groceries and even children to locations throughout the city. Homer is worried about his personal liability in the event he has an accident while transporting children or if he fails to meet a delivery time. But, Homer does not have time to do a great deal of paperwork for his business. The only assets Homer owns are his car that he uses for the deliveries and his cell phone and radio for an answering service to contact him with pick-ups. What business structure would best suit Homer's needs?
Sub-chapter S or S - Corp
Who elects the officers of a corporation?
The Board of Directors
Which of the following would be exempt from registration under the Securities Act of 1933?
The bonds sold by the city of Yuma for purposes of repair and construction of city schools.
Which of the following is NOT required in a closed-end credit disclosure?
The comparative cost of credit with other lenders
Which of the following would be a merchant's firm offer?
The following written on the back of a car dealer's card: "$3,500 for the only 1989 Volvo DL grey on my lot. Offer open 31 days from today, 12/21/2000."
Which of the following is not a defense to a Section 11 violation?
The investor experienced a loss.
Which of the following is NOT a requirement for the articles of incorporation for creating a corporation?
The names and addresses of the officers of the corporation
Regulation Z is another name for
Truth and Lending Act
Which of the following acts provides the disclosure requirements for closed-end credit transactions?
Truth-in-Lending Act
When does the three-day cooling off period apply in credit transactions?
When the creditor takes a security interest in the debtor's home
When does the mailbox rule apply to an acceptance?
When the subject matter is common law and the acceptance is communicated by the same means as the offer.
When do the Williams Act provisions on tender offers apply?
When there is an offer to buy 5% or more of a corporation's securities
Which of the following is NOT a bailment?
You renting a locker in an airport and placing your personal items in it while you go to eat dinner.
Which of the following is an example of an open-end credit transaction?
a VISA card
A failure to comply with LLP creation statutes will result in
a general partnership being formed.
Corporations can not make
a loan to officers only if the loan is backed by sufficient collateral
A joint venture is
a partnership of existing businesses for a limited time or a limited purpose.
Who of the following is NOT liable for a Section 11 violation under the Securities Act of 1933?
an accountant who demonstrates due diligence
A condition precedent is
an event or requirement that must occur before contract performance is required.
An offer can be revoked:
any time prior to acceptance
The business judgment rule:
applies to the duties and responsibilities of a director on a corporate board
A limited partnership must have
at least one general partner.
Course of dealing can
be used to supply missing terms to a contract.
A document of title issued by the seller that accompanies goods in shipment is called:
bill of lading
An accord and satisfaction discharges:
both the seller and the buyer
A minor who has entered into a contract:
can enforce the contract at his or her option
A merchant's firm offer
cannot be revoked if the requirements are met, money and consideration is not on of those requirements
The subprime loan crisis was temporary and did
cause real changes in the lending market.
The APR must be disclosed in a
closed-end credit transaction.
Which is a UCC contract performance defense only?
commercial impracticability
Which of the following will NOT cause a loss of limited liability for a limited partner in a limited partnership?
consulting with or advising the general partner
Bankruptcy proceedings in Japan include
dogeza meeting , debtor begs for forgiveness
Commercial impracticability, if found in a UCC contract
excuses performance.
A contract that has been signed but for which no performance has begun is known as:
executor
Provisions in contracts for excused performance in the event of peculiar risk, particularly in international trade, are known as:
force majeure clauses.
The mailbox rule applies:
if the stipulated means in an offer is used as the means of acceptance.
The Securities Act of 1933 regulates
initial offerings of securities.
DataGathering, Inc. is incorporated in California. It does business in Nevada, Washington, Oregon and Idaho. Its principal offices are located in Washington. DataGathering, Inc:
is a domestic corporation in California only
Under common law, any variance in the terms in an acceptance:
is a rejection
Al Duncan is a director of a corporation that is traded on the New York Stock Exchange. On April 1, 1999, he purchased 100 shares of the company at $15 each. On June 1, 1999, he sold the shares at $10 each. On July 1, 1999, he purchased 100 shares at $7 each. Al Duncan:
is liable for short-swing profits of $300.
An accredited investor:
is one who is capable of evaluating a security offering and is not counted under Regulation D for purposes of limited number of buyers.
If a registration filed with the SEC has material missing, the SEC:
issues a comment or deficiency letter.
The Consumer Credit Protection Act:
limits the amount of debtor wages for garnishment to 25% of net wages.
Rescission is the appropriate remedy for
misrepresentation.
General partners are
mutual principals and agents of each other.
When the SEC approves a registration statement, it:
neither passes on the merits of the offering nor assures that there is no fraud involved.
Which of the following is prohibited by the FDCPA?
notifying a debtor's employer of an uncollected debt of an employee
Short-swing profits by officers, directors, and 10% shareholders are
prohibited .
Which of the following subject matters in contracts would have the contract governed by the provisions of the Uniform Commercial Code (UCC)?
sale of a mobile home
The most common type of shareholder proposals at annual meetings deal with
social and/or environmental issues.
Japan regulates
solicitations.
A violation of the Equal Credit Opportunity Act carries
statutory penalties
Which of the following is a not a defense to a contract?
substantial performance
Proxy materials sent by the corporation to its shareholders need
to be approved by the SEC.
Which of the following defenses to a contract requires proof of a confidential relationship?
undue influence
An oral contract in violation of the statute of frauds is
unenforceable.
A wanted poster (for example, $10,000 offered for information leading to the arrest and conviction of a named person) is an example of a
unilateral contract.
The Equal Credit Opportunity Act prohibits a denial of credit on the basis of:
use of alimony or child support income to qualify and marital status of the applicant
A contract for the professional services of an unlicensed professional who has not passed a competency exam is
void.
If a person has been declared legally incompetent, his or her contracts are
void.
This term means that one party may escape liability from a contract.
voidable
Contracts with minors are:
voidable.
The Public Company Accounting Oversight Board:
was created by the Sarbanes-Oxley Act.