BLAW Final lets goooooooo

A corporation's obligation to provide shareholders with financial information: a. depends on whether the company is publicly or privately held b. depends on the requirements of the Model Business Corporation Act, which is widely followed in regard to the shareholders' right to information c. is extensive and is carefully regulated by the SEC if the company is privately held. d. all the above

a

A corporate board's refusal to remove a "poison pill" was held reasonable in: a. lippman v. shaffer b. unocal corp v. mesa petroleum co. c. moore corp. ltd. v. wallace computer services, inc. d. anderson v. bellino

c

A group of accounting alumni decided to hold a fundraiser to establish a scholarship for an accounting student. The enterprise is: a. a limited partnership b. a general partnership c. a charitable partnership d. none of the above

d

Which of the following must be approved by the shareholders if a company is attempting to avoid a hostile takeover bid? a. white knights b. staggered board of directors c. supermajority voting d all the above.

d

An agency relationship can be created: a. by the conduct of the parties. b. by an oral agreement in all circumstances. c. only by a written agreement. d. only by the meeting of all the standards of contract law.

d?

Which of the following offers are considered to be irrevocable for a given period? a. A writing signed by a merchant offering to hold open an offer for the sale of goods for a stated period. b. Firm offers. c. Option contracts. d. All of the above.

D

Which of the following persons is an agent? A. Diane, a shoe salesperson for a retail store B. Tim, a real estate broker for a large real estate company C. Craig, a telephone marketing employee D. All of the above

D

Which of the following relationships generally fails to create an insurable interest? a. Chief executive officer and corporation b. Husband and wife c. Debtor and creditor d. Doctor and patient

D

Which of the following terms designates the legal ability of a party to enter into a contract? a. Affirmation b. Consent c. Materiality d. Capacity

D

Which of the following types of contracts cannot be either contradicted or supplemented by evidence of prior agreements or expressions? a. incomplete contracts b. implied contracts c. ambiguous contracts d. integrated contracts

D

Which of the following types of property would be goods under the UCC? A. a promissory note B. a stock C. a patent D. a computer

D

Which of the following would be evidence that two people intend to be partners? A. An agreement to share profits of a business B. Referring to each other as "partners". C. Agreeing to share in the business's losses. D. All of the above are evidence of partners.

D

Which school of jurisprudence is based on the philosophy that what matters is not what is written as law, but who enforces the law and by what process? a. Legal positivism b. Sovereign selection c. Natural law d. legal realism

D

A minor can undo a contract that has already been completed by having a court _______ the contract to formally cancel it. a. rescind b. affirm c. ratify d. disaffirm

A

A promise by Derkin Restaurants to buy all of the produce it needs this next year at an established price from Elfredo's Produce would be an a. enforceable requirements contract. b. unenforceable promise based on past consideration. c. enforceable output contract. d. unenforceable, illusory contract.

A

A(n) _______ contract is illegal from the beginning and may not be enforced by either party; a(n) _______ contract is legal but permits one party to escape, if he or she so wishes. a. void; voidable b. affirmed; disaffirmed c. disaffirmed; affirmed d. voidable; void

A

A+ Modeling Agency signs a contract with Sandi to do a photo shoot for the local used car dealer's advertising. The contract was most likely written by a. A+ Modeling Agency's lawyer. b. Sandi's lawyer. c. the owner of A+ Modeling Agency. d. Sandi.

A

Astrid and Razi formed a partnership in which they agree to share profits 60 percent to Astrid and 40 percent to Razi. Losses will be shared a. 60 percent to Astrid and 40 percent to Razi, unless otherwise agreed. b. according to their capital contributions to the partnership. c. in whatever proportion provides the greatest tax advantage for the partners that year. d. equally, unless otherwise agreed.

A

Abby hires a contractor to make repairs on her house. Before the repairs are finished, Abby dies. Her good friend, Clay is appointed executor of Abby's estate. Clay orally promised that if the estate could not pay the repair bill, he would pay it even though he does not live in the house and has no entitlement under Abby's estate. If the contractor's bill does not get paid, who can the contractor collect from, if anyone? a. The contractor can collect from the estate only. b. The contractor must collect from the estate first, and then collect any deficiency from Clay. c. The contractor can collect from Clay only. d. The contractor can collect from either the estate or Clay.

A

Bob, a house builder, contracts with Ollie to build a house on Ollie's lot. The total price of the construction is $100,000, $20,000 of which will be Bob's profit. After Bob has put $10,000 worth of materials into the house, Ollie wrongfully refuses to let him finish the house. If Bob sues for damages, he will be able to collect a. $30,000. b. $20,000. c. $10,000. d. $100,000.

A

Adam decided to play a practical joke on Linda, a co-worker. As Linda was leaving the office one night, Adam, wearing a mask, stepped out from behind some bushes. He pointed a handgun made out of licorice at her and demanded her purse. He then pushed the candy gun to her head and told her if she told anybody he'd kill her. Linda was very scared during the whole incident. She did not think it was funny when Adam pulled the mask off and took a bite of the gun as he gave her the purse back. Did Adam commit the tort of intentional infliction of emotional distress? A. Yes, as his conduct was intentional B. Yes, but only if Adam intended to cause Linda serious emotional distress C. No, since he was only playing a practical joke D. No, since Linda was not physically hurt by Adam

A

After the plaintiff has presented her case, the defendant may be granted a: A. directed verdict B. summary judgment C. Judgement NOV D. judgment on the pleadings

A

In its most basic terms, a fiduciary relationship is one of a. trust. b. competition. c. disclosure. d. control.

A

An agency will be terminated in all but which one of the following situations? a. A travel agent files for individual bankruptcy under Chapter 13. b. The principal and agent agree on an agency relationship to sell a boat, and the boat is sold. c. An electrician, an agent of a contractor, has her license revoked. d. The agent violates his duty of loyalty.

A

An agreement to pay a lesser amount to settle an unliquidated debt is: A. enforceable, as there is consideration B. unenforceable, as there is no consideration C. enforceable in some states D. unenforceable as a violation of public policy

A

Anti-takeover tactics include all EXCEPT a. negative tender offers. b. greenmail. c. poison pills. d. staggered board of directors.

A

Approximately how much merchandise is stolen from United States retail stores every year? a. $30 billion b. $300 million c. $30 million d. $3 billion

A

Diane, a police officer, stops Tim's car for a traffic offense. While talking to Tim, she shines a flashlight into the passenger compartment of Tim's car and sees evidence of drug paraphernalia. Which statement is correct? a. Diane may search the passenger compartment of the car and any place else in the car, including the trunk, without Tim's consent. b. Diane may not search the passenger compartment of the car (nor any place else) without Tim's consent or without a search warrant. However, she can require Tim to remain parked until the search warrant is brought to her. c. Under the above circumstances, Diane can write Tim a traffic citation but cannot search the vehicle. d. Diane may search the passenger compartment of the car without Tim's consent; however, she may not search the trunk of the car without his consent or without a search warrant.

A

Dick offers to sell Jane his 1955 Thunderbird convertible. Before Jane can accept the offer, lightning strikes the car and it is totally destroyed. Which of the following is true? a. The offer is terminated by law. b. Jane can still accept the offer and John must find a 1955 Thunderbird to sell. c. Jane can still accept the offer. She will be entitled to the insurance proceeds. d. Dick can still revoke his offer so long as he does so before Jane accepts.

A

Dodger bought an insurance contract from Liberty Farm Co. The policy contained a clause stating that all claims for losses had to be reported within 45 days after the date of the loss or the claim would be barred. Time is stated to be of the essence. Dodger sustained a covered farm loss, but did not report it to Liberty Farm until 50 days later. Liberty Farm denied coverage for the claim. If Dodger sues, who wins? a. Liberty Farm wins; there was failure of a condition subsequent. b. Dodger wins; the contract was substantially performed. c. Dodger wins; courts will not enforce a time-of-the-essence clause. d. Liberty Farm wins; the impossibility doctrine applies.

A

E.I. James is a writer with a best selling novel. He wishes to create a corporation called "James, Inc." He will be the only shareholder. Can James incorporate his business of writing? A. Yes, this would be the incorporation of a sole proprietorship. B. No, the law requires at least two people to be shareholders of a corporation. C. No, the law does not permit a person to, in effect, incorporate himself. D. Only if he forms an S corporation.

A

Eric was charged with attempted murder. His defense was that he was insane at the time of the act. A jury accepted Eric's defense. He will: A. probably be committed to a mental hospital and when that hospital determines he is no longer a danger to society, he will be released. B. be declared guilty, but will have to serve his sentence in a mental hospital rather than in prison C. have to be committed to a mental hospital until he regains his sanity, at which time he will be retried D. be sent to prison once he is released from the mental ward

A

Farmer's Fortune Insurance has a contract with Farmer Fran to insure her crops against insect damage. The contract does not specify which insects are covered or how much damage is necessary to make a claim. The contract will probably be enforced in favor of a. Farmer Fran. b. Neither side, as it is ridiculous to try to insure against insects. c. Cannot determine... would have to go through litigation to decide. d. Farmer's Fortune Insurance.

A

For the business judgment rule to apply, the manager must a. have acted in the best interests of the corporation. b. prove he or she was aware of the decision being made. c. have exercised extraordinary care in resolving the situation. d. be trying to resolve a conflict of interest.

A

Hasbro, Inc., the trademark owner of "Candy Land," sought a court injunction to stop Internet Entertainment Group, LTD from using the domain name, "candyland.com." Internet Entertainment Group had established a sexually explicit site at the domain name. This injunction would have to be issued by a. a judge. b. an executive order. c. a jury. d. a lawyer.

A

If Oregon passed a statute that prohibited liquor stores from engaging in any kind of advertising, that statute would be a. invalid as an unreasonable restriction of free speech. b. valid, as alcohol is illegal for minors. c. invalid as a violation of the Commerce Clause. d. valid as an exercise of police power.

A

If Rudy offers Oscar $200 for his laptop valued at $600 and Oscar agrees, a court will probably a. not set aside the agreement based on the adequacy of the consideration. b. set aside the agreement as being unfair. c. set aside the agreement because the consideration is inadequate. d. not set aside the agreement because of the UCC.

A

If an offer specifies no time limit in which to accept, a. the offeree has a reasonable period during which to accept. b. the offeree has 10 days to respond. c. the offeree has 30 days to respond. d. the offer is not valid and therefore it does not matter when the offeree responds.

A

Important steps in the criminal process, in the proper order, include: A. probable cause hearing, search, arrest, indictment, arraignment, plea bargain, trial B. arraignment, booking, bail hearing, trial, and grand jury indictment C. arrest, probable cause hearing, motion to suppress, booking, and trial D. indictment, arrest, probable cause hearing, plea bargain, arraignment, trial, appeal

A

In Jones v. Clinton, the court held: A. Jones did not demonstrate the essential elements for her claim B. Jones was entitled to a summary judgment C. public policy required that the case be dismissed because of the President's position D. Pres. Clinton failed to comply with a discovery order

A

In a civil case, the plantiff must prove the case: A. by a preponderance of the evidence B. by clear and convincing evidence C. beyond a reasonable doubt D. None of the above

A

In a comparitive negligence state, if the plaintiff in a negligence lawsuit is found to be 30 percent negligent, the plaintiff would recover: A. 70 percent of the damages B. all of the damages C. none of the damages D. 30 percent of the damages

A

In a contract modification, the phrase "charged with such amendment" refers to a. the party who will be adversely affected by the change. b. the party who suggested the change. c. the party who did NOT suggest the change. d. the party who will benefit from the change.

A

In bailment cases, exculpatory clauses a. are somewhat more likely to be enforced than in other types of cases. b. ordinarily involve an attempt to limit liability for damage to persons rather than property. c. are very rarely used. d. are not enforced because any harm is to property and not persons.

A

In order to satisfy the statute of frauds, a writing must a. be signed by the defendant and contain the name of each party, the subject matter of the agreement, and the essential terms and promises. b. be notarized. c. All of the above. d. be a formal written document drafted by an attorney.

A

In the late 1960's a shareholder of the company that owned the Chicago baseball team sued the company because the directors refused to install the lights in Wrigley Field. The court decided that the directors: A. had a rational purpose for not installing lights and were not liable for doing anything improper. B. were not protected by the business judgement rule C. had not acted with any rational purpose and were liable to its shareholders for damages caused by their actions. D. had the right to make decisions for the team without any concern for the desires of the shareholders.

A

Jackie and Robert own an apartment building as partners. Cyndi, one of their tenants, gives Robert written notice she will be moving out at the end of the following month. Robert did not tell Jackie that Cyndi was moving. Has Cyndi properly given notice to the partnership?? A. Yes. Notice to Robert was notice to the partnership. B. Yes, if it is determined that Robert acted negligently in failing to notify Jackie. C. No, Cyndi has an obligation to notify both Robert and Jackie D. No, Jackie was not notified since Robert never told her Cyndi was moving.

A

James was a partner in a large firm. He died unexpectedly. His son, Frank, wanted to take over for his father in the partnership and was well qualified to do the work his father had done. Which statement best describes Frank's rights in the partnership if he inherits the interest? a. Frank is entitled to the value in the partnership, but not to become a full partner. b. Frank cannot be a full-fledged partner, but he can vote on firm matters. c. Frank has no rights to his father's partnership interest. d. Frank has a right to take over for his father in the partnership.

A

Larry goes to his barber who has cut his hair for the past several years. The barber proceeds to cut his hair as they talk about the most recent snow storm to hit the area. This is an example of a a. unilateral, implied contract. b. bilateral, express contract. c. bilateral, implied contract. d. unilateral, express contract.

A

Laurie is incorporating her business. Laurie's home state is Wisconsin. Business will be conducted in California, Michigan, Pennsylvania, and Virginia. Laurie a. can incorporate the business in any state. b. must incorporate in Delaware. c. must incorporate the business in Wisconsin, California, Michigan, Pennsylvania and Virginia. d. must incorporate the business in Wisconsin, the home state.

A

Lori and Dan own a small restaurant as partners. Dan works several hours a day cooking, waiting on tables, doing the books, and so forth. Dan believes he is entitled to be paid at least a standard wage for all his work since, at the present time, the part-time kitchen helpers earn more than he does! Lori claims Dan is not entitled to anything other than one-half the net profits. Is Lori right? a. Yes, if there is no agreement between Lori and Dan allowing for either of them to be paid wages for work done at the restaurant. b. No. Dan may collect a fair wage for the work he has performed. c. No. Dan may collect only minimum wage, as required by federal law. d. Yes. The UPA states a partner may not collect a "wage" from the partnership business under any circumstances.

A

Mary contracted to buy 100 table lamps. Under the terms of the agreement, Mary is to pay for the lamps upon delivery. This is an example of a. a concurrent condition. b. a condition precedent. c. a service condition. d. a condition subsequent.

A

Melody is a recent graduate of State Law School. She lands an impressive employment contract with the firm of Dewey, Cheathem, and Howe, Attorneys at Law, on the stated provision that she pass the upcoming bar exam. This provision in the employment agreement is a(n) a. condition subsequent. b. concurrent condition. c. implied condition. d. condition precedent.

A

Mentally infirmed Sasha contracts to purchase a piano for $2,500 in 60 monthly installment payments. Six months later she tries to void the contract on grounds of mental impairment. A court will a. normally void the contract but will require Sasha to return the piano. b. normally void the contract without requiring anything further on Sasha's part. c. not void the contract unless Sasha agrees to have the court appoint a guardian for her. d. ordinarily not void the contract unless Sasha had a court-appointed guardian at the time she entered into the contract.

A

Mike made the following offer to Mick: "I will pay you $500 if you agree to paint my house." Mick replied that he would. At this point, the contract is an a. executory, bilateral, express contract. b. executed, bilateral, express contract. c. executed, unilateral, express contract. d. executory, bilateral, implied-in-law contract.

A

Nevada passed a law banning all commercial billboards along state highways to improve the appearance of the environment. If this law were to be challenged, which of the following would a court examine to determine if the law is constitutional? a. All of the above. b. It would have to be shown that the law reaches no further than necessary to promote the state goal. c. It would have to be shown that the law directly and materially advances the state's goal of a more aesthetically pleasing environment. d. It would have to be established that the law furthers an interest of the state of Nevada to create a more aesthetically pleasing environment.

A

Nikki was an tax accountant with HBR Accounting. Nikki decided to do some tax consulting in the evenings and on weekends. HBR is unaware of Nikki's consulting work. Which statement is correct? a. Nikki has breached a fiduciary duty to HBR since she is competing with HBR. b. Nikki has not breached a fiduciary duty to HBR since Nikki has a contractual relationship with her clients, not her employer. c. Nikki has not breached a fiduciary duty to HBR since her behavior does not reflect badly on the accounting firm. d. Nikki has not breached a fiduciary duty to HBR since her consulting is done after her work for HBR.

A

On January 16, Deb offers to sell her waterbed to Colleen for $600. Colleen accepts and agrees to pay Deb $600 on January 27. Which of the following is correct? a. On January 16th, the contract was executory b. On January 16th, the contract was executed c. This contract is unilateral d. There was no contract until January 27th.

A

On January 8, Quastrar, Inc. sent Hylavian Company a letter offering to sell $10,000 in restaurant supplies. On January 18, Hylavian mailed a letter to Quastrar accepting the offer. Quastrar received the acceptance letter on January 20. On January 17, Quastrar sent a letter revoking the offer. Hylavian received this letter on January 21. A contract between Quastrar and Hylavian a. was formed on January 18. b. was not formed because the revocation was effective before the acceptance was sent. c. was not formed because the revocation was effective before the acceptance was received. d. was formed on January 20.

A

On the day a tender offer begins, a. a bidder must file a disclosure statement with the SEC. b. greenmail must be sent to the SEC. c. the SEC issues a binding order to the target company to file audited financial statements to the bidder. d. assets of the target corporation must be locked up until an inventory is completed.

A

Ralph is a professional football player. He signs a valid contract with the Miami Dolphins. Later, he claims that he was also promised free use of the Dolphins' private jet, but this was not in the contract. What type of clause in his contract would prevent him from flying away with this claim? a. An integration clause b. A severability clause c. A complete agreement clause d. A "no additional terms" clause

A

Robert, a minor, buys a stereo from Jane for $200. State law allows a minor to disaffirm contracts within a reasonable time after turning 18. Robert disaffirms the contract the day after turning 18 and returns the stereo. a. This contract was a voidable contract, Robert can disaffirm. b. This contract was unenforceable because it needed to be in writing to be enforceable. c. This contract was a valid contract, Robert cannot disaffirm. d. This contract was a void contract.

A

Roger assuatled Jim in a tavern, causing medical expenses and lost wages. Which of the following is true? A. Roger can be prosecuted by the state for a criminal offense and Jim may sue him for money damages. B. If Roger is convicted of criminal assault, Jim is not allowed to sue him for money damages since that would violate the double jeopardy clause. C. If Jim refuses to press charges against Roger, the state cannot initiate a criminal proceeding against him D. Jim can either elect to sue for money damages or proceed with criminal damages

A

Ron, a minor, goes to the hospital for treatment of the flu. On the new-patient form Ron signs, he agrees to pay for any care or treatment he receives. When billed for the treatment a. Ron must pay for the value of the benefit he received, because medical care is a necessary. b. Ron must pay for the benefit he received because he ratified the contract. c. Ron does not have to pay for the benefit he received. d. Ron must pay for the benefit he received because the contract is fully executory.

A

Sam enters into a contract agreement to buy Betty Lou's house on the condition that he is able to secure financing at or below 6% per year. This is a a. condition precedent. b. concurrent condition. c. novation condition. d. condition subsequent.

A

Sid burned his own warehouse down in an attempt to collect on fire insurance policy. Sid has committed: A. Arson B. larceny since he committed an act intended to wrongfully obtain money from his insurance company C. a crime called "burning to defraud insurers" since the crime of arson only applies to property owned by another person D. an intentional tort, but not a crime since a person has a right to destroy his own property

A

Statutes of limitations a. limit the time in which an injured party may sue. b. define how much money the injured party can sue for under a breach of contract claim. c. only apply to the sale of goods. There is no statute of limitations on a service contract. d. define whether there has been substantial performance of a contract or a material breach.

A

The "dormant" aspect of the Commerce Clause: A. is also known as the "negative" aspect B. means that there are many unused powers still available to the government to regulate trade between the states C. garuntees that Congress has the power to regulate trade with foreign countries that have not yet developed trade practices D. guarantees that the states have the power, even if unused, to impose regulations affecting interstate commerce.

A

The Anderson v. Bellino case held that a. the defendant did not act in good faith and violated the corporate opportunity doctrine. b. the plaintiff was not able to show that the defendant violated the corporate opportunity doctrine. c. the defendant's action was not a conflict of interest and was made in good faith. d. the business judgment rule protected the plaintiff's decision to award the Keno contract to an outside firm.

A

The Johnsons decided to sell their summer cabin on Beech Lake. They sent flyers out to all who previously had expressed an interest in buying the cabin stating that they were planning on selling their cabin. The flyer described the location of the property, the size of the lot, and the price. If one of the recipients responds by sending a letter accepting, an agreement a. will not be formed because the flyer was sent out as an invitation to make an offer. b. will be formed because the first to respond gets the property. c. will be formed because the price is included. d. will not be formed because of the parol evidence rule.

A

The US has taken a position that legal issues are best resolved by lawsuits involving parties with conflicting interests presenting their strongest possible case to a neutral fact finder. Because of this, the legal system in the US is considered: A. an adversary system B. A conflict system C. an alternative dispute resolution system D. a mediation system

A

The Williams Act: A. is designed to regulate the conduct of those attempting to take over the company B. is designed to regulate the conduct of the target company subject to takeover C. prohibits corporate defense tactics. D. none of the above

A

The biggest change in litigation in the last decade is: A. an explosive rise in E-Discovery B. a decrease in the use of discovery C. the replacement of interrogatories with depositions D. the use of juries in appellate courts

A

The business form that offers the limited liability of a corporation and the tax status of a flow-through entity is a. a limited liability company. b. a close corporation. c. a general partnership. d. a sole proprietorship.

A

The concept of stare decisis focuses most on: A. predictability B. flexibility C. legislative intent D. change

A

The directors of MegaCorp learn that an outsider is planning on buying enough voting stock to get herself elected to the board of directors. MegaCorp, which has cumulative voting, quickly puts together a vote of shareholders to eliminate the company's cumulative voting procedure. The shareholders vote to do away with cumulative voting. The outsider, Dawn, who wanted to get herself elected to MegaCorp's board, claims that the company has committed an illegal act. Is she right? a. No. Under the Model Act, regardless of MegaCorp's motives, it had the right to act as it did. b. Yes. The United States Supreme Court has ruled that a publicly held corporation that purposefully sets about to eliminate cumulative voting to prevent a person from getting herself elected to the board has acted illegally. c. No, provided the company did not change its cumulative voting provision solely for the purpose of preventing a particular person from taking advantage of that right. d. Yes, but only if the company is incorporated in a state that has adopted the Model Act.

A

The elements in a defamation case are: A. defamatory statement; falseness; communication; and injury B. a contract; knowledge of the contract; improper inducement; injury C. false or misleading fact statements; statements in commercial advertising; likelihood of harm D. duty; breach of duty; proximate causation; and damages

A

The federal judicial branch of the U.S. government: A. Interpretes statutes B. Passes statutes C. Issues Executive orders D. creates administrative agencies

A

The first step a court takes in choosing a remedy is to determine a. what interest it is trying to protect. b. if punitive damages should be awarded. c. whether the injured party mitigated its damages. d. if the damages can be quantified with reasonable certainty.

A

The issue of the Constitutional protections afforded flag burning was addressed in: A. Texas v Johnson B. US v. Lopez C. Marbury v. Madison D. Palmore v. Sidoti

A

The officers of a corporation are a. chosen by the board of directors. b. appointed by the Secretary of State. c. appointed by the president of the company. d. elected by shareholders.

A

The primary purpose of RICO was to: A. to be a tool against organized crime B. to raise revenue C. to prosecute non-citizens D. to prosecute those alleged in tax fraud.

A

Thoreau felt that war was unjust and therefore refused to pay his taxes when the US declared war on Mexico. If his neighbor agreed that war was unjust but paid his taxes because the law requires him to, the neighbor would be applying the jurisprudence of: a. legal positivism b. natural law c. legal realism d. common law

A

Tony raped Jane in the parking lot of Joe's Brew Pub. The DA's office prosecuted Tony on rape charges. Subsequently, Jane filed a lawsuit against Tony for money damages. Classify each legal action. A. criminal, civil B. civil, criminal C. both are criminal D. both are civil

A

Tuan is president and sole shareholder of Entertainment, Inc. Entertainment, Inc. wishes to borrow money, but to do so, the bank requires Tuan to orally agree to personally pay the debt of the corporation if Entertainment, Inc. cannot. Tuan's guarantee to repay is a. enforceable because of the leading object rule. b. unenforceable because there is no insurable interest. c. enforceable under the parol evidence rule. d. unenforceable because it is a collateral promise.

A

Under a state law, a dog owner is absolutely liable to any person who is injured by the dog. This is an example of a. strict liability. b. negligence per se. c. negligence. d. res ipsa loquitur.

A

Under most state statutes, a corporation may: A. include in its charter a provision indemnifying directors unless they have engaged in intentional conduct or bad faith. B. include in its charter a provision indemnifying directors under any circumstances in the conduct of their duties for the corporation C. not include in its a charter a provision indemnifying directors who engage in negligent conduct of their duties D. not include in its charter any provisions regarding indemnification of directors.

A

Vivian goes to an auction and sees a rare antique lamp that is an identical match to the one she already has. At the proper time she bids on the lamp and is the highest bidder. Even though she is the highest bidder, the auctioneer refuses to accept her bid and withdraws the lamp from the auction. Can the auctioneer do that? A. Unless otherwise stated, the auctioneer had the right to withdraw the item before the fall of the hammer. B. Generally, the auctioneer must sell to the highest bidder and Vivian will get the lamp C. Generally, the auctioneer is the offeror and the bidder is the offeree so there is a contract and Vivian will get the lamp D. Most auctioneers are without reserve and therefore the auctioneer cannot withdraw the lamp.

A

Which of the following describes the duty of loyalty? a. It prohibits managers from making a decision that benefits them at the expense of the corporation. b. It requires consideration of the interests of the surrounding community. c. It requires using care that an ordinarily prudent person would take in a similar situation. d. It requires managers to make decisions they reasonably believe to be in the best interest of the corporation.

A

Which of the following exculpatory clauses will most likely be enforceable? A. an exculpatory clause that relieves a riding stable of negligence B. a exculpatory clause the relieves a riding stable of gross negligence C. A exculpatory clause that relieves a riding stable from intentional torts D. a riding stables exculpatory clause that is hidden in an eight-page document

A

Which of the following is NOT required of an agency relationship? A. Consideration B. Fiduciary relationship C. Consent of the parties to act as agent or principal D. Control of principal over agent's conduct

A

Which of the following is a fundamental goal of shareholders? a. To have an immediate increase in stock price b. To have the business survive c. To keep their jobs d. To have the business provide jobs

A

Which of the following is a standard provision frequently found in contracts? a. choice of forum b. understanding c. mediation d. choice of compensation

A

Which of the following represents a landowner's lowest liability? A. trespassing adults b. trespassing kids C. invitees D. licensees

A

Which of the following statements is correct with respect to state efforts to offer protection to companies targeted for hostile takeovers? a. Both statutory law and the state courts have provided some degree of protection for companies. b. Statutory law offers the only legal protection to companies. c. Courts offer the only legal protection to companies targeted for hostile takeovers. d. State courts and state statutes have offered no protection for companies targeted for hostile takeovers.

A

Which of the following statements regarding a negligence case is correct? A. a plantiff must show that the defendants act was both the factual cause of her injury as well as foreseeable injury B. A plaintiff must show that the defendant's act was the factual case of her injury even if the injury was unforeseeable C. A plaintiff must show that the defendant's act created a foreseeable danger even if it was not the factual cause of her injury D. A plaintiff does not have to show that the defendant's act either created a foreseeable danger or that the act was the factual cause of her injury

A

Which of the following transactions would be considered by the IRS to be a taxable sale of assets? Changing the form of business from: A. a corporation to an LLC B. a partnership to an LLC C. an LLC to a corporation D. all of the above

A

Which statement is correct concerning judicial review of an administrative agencies actions? A. Courts usually accept the facts of the case as determined by the agency and often defer to the agency's interpretation of the law B. Courts conduct a de novo review of the case C. Courts ignore the facts of the case D. Courts substitute there opinion for that of the agency

A

A board of directors is considering wether to invest a great deal of money into research and development. Such a decision could have a long-term beneficial effect for the company's future. As an alternative, the board could forgo the expenditure into research and development and buy back its own shares in order to immediately increase the company's reserves. Which of the below groups would most likely favor the option to increase the company's reserves and not invest more in research and development. A. Management B. Shareholders C. Stakeholders other than shareholders. D. Employees

B

A corporation must obtain shareholder approval before the company a. opens additional offices. b. sells off a major portion of its business to another company. c. hires or fires a significant number of employees. d. expands into foreign markets.

B

A form of due process that holds that certain rights are so fundamental that the government may not eliminate them is referred to as a. judicial restraint. b. substantive due process. c. eminent domain. d. procedural due process.

B

A national magazine published an article about a famous television star. The television personality is upset because the information contained in the story is not correct. If the actress sues the magazine: A. she will need to show that the magazine has a history of being "reckless" with facts on a regular basis B. she will need to show that the magazine either knew the story was false or acted with reckless disregard of facts C. She will need to show that the magazine failed to attempt to verify the story by trying to contact her or her agent before the story was printed. D. She will need to show that the magazine could have discovered that the story was false but failed to do so.

B

A public company instituted a clawback policy. What does this mean? a. The company is prohibited from expelling shareholders unless the firm pays a fair price for the minority stock and the expulsion has a legitimate business purpose. b. The company can require the CEO and CFO to reimburse the company for any bonus or profits they recieved from selling company stock within a year of the release of flawed financials. c. At least once every three years, companies must take a nonbinding shareholder vote on the compensation of the five highest-paid executives. d. The company has decided that the compensation level of its executives is not in the company's best interests, so it reduces all executive pay levels by a certain percentage.

B

A seller's form clearly states no warranty is included. The buyer's form states that the sellers form is warranted for one year. In this case: A. no contract can be created B. the warranty term is a "different term" and the majority of states hold that a contract can be formed but the contradictory terms cancel each other out. C. The warranty term is an additional term that becomes part of the contract in most states D. The warranty term is a "different term" which in most states becomes part of the contract unless the seller promptly objects.

B

A woman wishes to attend an all-male, publicly supported college. She claims the college is violating the Equal Protection Clause of the Constitution. What level of scrutiny will the court use when deciding this case? A. minimal scrutiny B. intermediate scrutiny C. strict scrutiny D. compelling interest scrutiny

B

Administrative agency rules consist of: A. executive and independent rules B. legislative and interpretive rules C. informal and "notice and comment" rules D. promulgated and unpromulgated rules

B

All the business forms listed below have limited liability EXCEPT the a. corporation. b. general partnership. c. "S" corporation. d. limited liability company.

B

An agency relationship can be created a. only by the meeting of all the standards of contract law. b. by the conduct of the parties. c. only if the agent is paid. d. only by a written agreement.

B

An honest effort to meet both the spirit and letter of the contract is termed a. sole discretion. b. good faith. c. honest representation. d. reasonable circumstances.

B

Annette drove through an intersection without looking and hit Vincent's car that he had driven into the intersection without paying attention to the stop sign. Annette sued Vincent. The jury found that Annette's fault contributed 20% to the collision and determined that her total loss was $100,000. Under comparative negligence, the jury should award Annette: A. 20,000 B. 80,000 C. 100,000 D. nothing

B

As it applies to landowners, which of the following statements regarding liability to a licensee is correct? a. Since a licensee has permission to be on the landowner's property, the landowner is responsible for all injury whether hidden or obvious. b. The landowner is liable to a licensee for injuries caused by hidden dangers only. c. Since the licensee is a trespasser on the landowner's property, the landowner is not responsible for injury. d. Whether or not the landowner is responsible for injury depends on whether the licensee is an adult or a child.

B

Barb has been a children's day care provider for several years in the small town of Sallton. She has decided to give it all up and move to the big city for excitement and adventure. She sells her business to Ken, agreeing not to open a competing business within five miles of Sallton for a period of nine months. After five months of the big city life, Barb is broke and moves back to Sallton. She opens a small day care business. Ken sues on the noncompete clause. What is the most likely result? a. Barb wins. The agreement is denying her the right to do the only thing she knows how to do. b. Ken wins. The agreement is enforceable. c. Barb wins. The agreement is not enforceable because it is not ancillary to a legitimate bargain. d. Barb wins. The agreement is not reasonable as to time.

B

Before filing a derivative lawsuit, shareholders must a. hold a special meeting, and a majority of the shareholders must vote to file the lawsuit. b. notify the board that the corporation has been wronged and ask the board to bring suit in the name of the corporation directly. c. notify the Secretary of State that the corporation has been wronged and ask the Attorney General to file the lawsuit on behalf of the corporation. d. place the lawsuit on the company's proxy statement, and the proposal must receive a majority vote.

B

A court may pierce an LLC's veil if a. the LLC has too many members. b. members keep their assests and the assets of the LLC separate. c. members fail to provide adequate capital. d. members treat the LLC like a separate organization.

C

Bernie owes an undisputed amount to Wilde's Heating & Air Conditioning. Which of the following is true? a. If the parties agree to settle for less than the full amount, their agreement is governed by the ruling in Henches v. Taylor. b. If Wilde's agrees to accept less than the full amount as full payment, the agreement is not binding. c. If Wilde's agrees to accept less than the full amount, the agreement is only binding if it is in writing and signed by Bernie. d. The undisputed amount is also known as an unliquidated amount.

B

Bob, a house painter, contracts with Ollie to paint a rental house which Ollie owns. Bob hires Rob to take his place as the painter on this contract. What has Bob done? a. Severed the contract b. Delegated his duties c. Made a scrivener's error d. Assigned his rights

B

Bob, a weak swimmer, ignored warning signs in a recreational swimming area and went into deep water. He soon grew tired and realized that he could not make it back to shore. Seeing Kelly, he cried out for help. Kelly, however, ignored the pleas. Bob was finally saved by Dorothy, but suffered brain damage from being submerged during the ordeal. Bob now sues Kelly for negligence for failing to try to save him. Bob will: A. Prevail because society places a duty on people to help each other and Kelly breached this duty B. lose because Kelly had no legal duty to save him. C. lose even though Kelly had a legal duty to save him, since Bob will not be able to prove that Kelly's failure to act was the proximate cause of his injuries D. lose because a reasonable person could not have foreseen that someone in a recreation area could not swim well

B

Carey decided to incorporate her business under the name yStar Inc. Before yStar was incorporated, Carey signed a contract in the name of yStar, Inc. to have some office space remodeled. Which statement is correct? a. yStar is liable on the contract if the contractor knows that the corporation does not yet exist. b. yStar will be liable on the contract only if the corporation adopts the contract. c. yStar is liable on the contract because the contract was signed in its name. d. yStar becomes liable on the contract as soon as it is incorporated.

B

Charles and Becky are partners. If they have a disagreement, the Uniform Partnership Act will govern their respective rights with each other: A. despite any written partnership agreement they may have signed B. only if they do not have written partnership agreement that addresses the issue of dispute. C. only if they agree to be bound by the UPA. D. only if their written partnership agreement states that they will be bound by the terms of the UPA.

B

Congress enacted legislation in 1933 to regulate the securities industry and prohibit various forms of fraud with securities. The Securities Exchange Act of 1934 was passed a year later. This law created the SEC as an independent regulatory entity whose function is to administer the two laws. The SEC has generated rules and regulations to administer these acts. These rules and regulations are: a. statutes b. administrative law c. executive orders d. common law

B

Congresswoman Sloan introduced a bill in the House of Representatives. If the bill is approved by the committee specializing in that subject, the bill will go to: A. a senate committee specializing in the subject matter of the proposed legislation B. the full house C. A conference committee made up of representatives of both the House and Senate D. the voters of her state for approval

B

Corporate stock can be divided into categories called ________, which can be further divided into ________. a. debentures, classes b. classes, series c. equity, assets d. authorized shares, classes

B

Costs to store a vehicle for a short period of time after an auto dealer fails to complete the contract to purchase the vehicle would be considered a. consequential damages. b. incidental damages. c. compensatory damages. d. punitive damages.

B

Derek and Abyan were discussing business over lunch when they agreed on the sale of a five-acre parcel of land. Since neither of them had any paper with them, Derek wrote the following on a napkin: "Abyan agrees to purchase from Derek a 5-acre parcel located at the local address of 123 105th Street, St. Joseph, Minnesota, U.S.A. for the price of $4,500 per acre. Transfer of title, payment, and possession to take place on May 1, 2011." Abyan signed the napkin. On May 1, 2011, Derek was ready to close the deal and transfer title but Abyan refused to pay the purchase price. If Derek sues Abyan for the price of the land, the most likely result will be: a. Derek will win because the statute of frauds does not apply to this situation. b. Derek will win because the writing is sufficient under the statute of frauds. c. Abyan will win because the writing is not sufficient under the statute of frauds. d. Abyan will win because Derek did not sign the writing.

B

Duress occurs when a. a party gives notice of refusal to be bound by an agreement. b. an improper threat is made to force another party to enter into a contract. c. the enforcement of a contract results in unconscionability. d. both parties contract based on the same factual error.

B

Dusty dissociated from a partnership. To protect himself from debts of the partnership after he leaves, Dusty should a. demand that the partnership terminate. b. file a statement of dissociation with the Secretary of State. c. execute a formal written agreement with the remaining partners. d. secure an indemnity bond.

B

Eintz Corp. hired Jose to bribe a foreign government official into awarding a $3 million contract to Eintz. Eintz gave Jose $10,000 in cash to make the bribe payment and $2000 for Jose's efforts. Instead of paying the bribe, Jose pocketed all of the money. If Eintz sues Jose, Eintz will a. be able to recover the $3 million lost on the contract. b. not be able to recover the $12,000. c. be able to recover the $2,000 but not the $10,000. d. be able to recover the $12,000.

B

Ending a partnership involves which of the following three steps? a. Dissociation, winding down, and consummation b. Dissolution, winding up, and termination c. Failure, dividing up, and paying off d. Dissociation, agreement, and dissolution

B

Fashions, Inc. has 12 shareholders. There is no shareholder agreement concerning the board of directors. The company is subject to the Model Act. How many directors is Fashions, Inc. required to have? a. Five. b. None. c. One. d. Two.

B

Kian is the chief financial officer of Yonkka, Inc. He is also a member of Yonkka's board of directors. Kian is a. a public director. b. holding an illegal position. c. an outside director. d. an inside director.

D

Floyd offers to sell his 1967 Ford Mustang convertible to Tim. Before they conclude their negotiations, Floyd dies. Which of the following is true? a. Floyd's heirs must continue to negotiate the offer and sell the car, if a reasonable price can be determined. b. The offer terminates automatically upon Floyd's death. c. Floyd's heirs must sell the car to Tim. d. There is a contract if Tim accepts before learning of Floyd's death.

B

Holt and Collins decide to have their dispute arbitrated by Corrales. Which of the following will NOT be a result of the arbitration? A. Corrales will render a binding decision B. Holt and Collins retain the right to a class action C. Holt and Collins give up the right to discovery D. Corrales need not give reasons for the decision

B

If Crosby and Dash are in disagreement as to the exact amount of money that Crosby owes Dash, then they may choose to form a new agreement at a set amount. If they both perform the new agreement, their conduct would be an example of a. a preexisting duty. b. an accord and satisfaction. c. a rescission. d. a contract modification.

B

If Morales and Rolfes Supply negotiate for the purchase and sale of a supply of fuel for a three-year period for Morales' business, a. the contract price must remain the same for the entire three-year contractual period. b. the contract may indicate a method for determining the price, without stating a definite price. c. Morales and Rolfes must depend on the UCC's gap-filler provisions to determine a price since the fuel is a "good" covered by Article 2 of the UCC. d. their contractual requirements regarding definiteness would be the same under the UCC and the common law.

B

If there is a conflict between a state and federal law, generally the federal law will prevail because of the: A. federalism doctrine B. Supremacy Clause C. paramount doctrine D. Interstate Commerce Clause

B

Illegally obtained evidence is not permitted to be used at a criminal trial based upon the: A. silver plate doctrine B. exclusionary rule C. fair play doctorine D. Eight Amendment

B

In incorporating E-prise, the promoter gave an incorrect ZIP Code for the registered agent. All of the other requirements for incorporation were met. E-prise is a(n) a. corporation by estoppel. b. de jure corporation. c. de facto corporation. d. indemnified corporation.

B

Jaime offered to buy Kevin's bike. Jaime is the: A. offeree B. offeror C. mortgagor D. trustee

B

Jamie is building a house on her lot. She invites Earnie of Earnie's Excavation to bid on the excavation job. Earnie observes that the lot next to Jamie's is also under excavation and the soil in that lot is normal and not excessively rocky. Based on the assumption that the soil in Jamie's lot will be similar, he and Jamie agree that the excavation will cost $3,000. When Earnie starts digging, he learns there is solid rock under Jamie's lot. Earnie says it will cost an extra $2,500 for the excavation work. Jamie agrees just to get the job done but later refuses to pay a dime more than $3,000. If Earnie sues, the most likely result would be a. Earnie wins as this modification is governed by the UCC and consideration is not required to enforce a modification of the agreement. b. Earnie wins, as the modification was due to unforeseen difficulties. c. Jamie wins as Earnie was not acting in good faith and just wanted to put Jamie in a situation where she didn't have a choice but to agree to more money. d. Jamie wins, as Earnie was under a preexisting duty to dig the basement.

B

Jennifer has offered to sell her laptop computer for $750 to Jack. She tells Jack that the computer is only six months old but, in fact, it is three years old, and Jennifer wants to unload the lemon. Jack agrees to buy the computer based on Jennifer's representations. This contract is: A. a void agreement because of the fraud involved B. a voidable contract, one that Jack can void C. a voidable contract, one that Jennifer can void D. a void contract because of the UCC.

B

Jill owns a retail business by herself and was sued by a customer who fell in the store. The customer claimed the business was negligent in caring for its floors. Which statement best describes Jill's potential liability? a. Jill can be held personally liable to the customer since she is the owner. b. Jill can only be liable to the amount she initially invested in the business. c. Jill cannot be held personally responsible; the woman's insurance must pay for the claim. d. Jill has no potential liability to the customer.

B

Jim agreed to show Donna's car to a potential buyer. Donna was not able to be home since she had to attend a meeting. After showing the car, Jim left the keys in it and the car was stolen. Which statement is correct? a. Since Jim is a gratuitous agent, he is strictly liable for the loss of the car. b. Since Jim is a gratuitous agent, he will only be liable for the loss of the car if his conduct constitutes gross negligence. c. Since Jim is a gratuitous agent, he will be liable for the loss of the car if his conduct constitutes ordinary negligence. d. Since Jim is a gratuitous agent, he has no liability for the car.

B

Meredith, a shareholder in Quarto, Inc., notified Quarto's board of directors that the corporation had been wronged and asked the board to bring a lawsuit in the corporation's name. In response to Meredith's demand, the board a. can file suit on behalf of the corporation. b. can do any of the above. c. can reject Meredith's demand or simply fail to respond. d. can appoint a Special Litigation Committee

B

Miguel reprogrammed a cellular phone so that it intercepted electronic funds transfers and rerouted them back to Miguel's bank account. What crime has he committed? A. Insurance fraud, since the bank's insurance will have to cover the misdirected funds B. wire fraud C. mail fraud d. embezzlement

B

Mike is planning on incorporating his business in the state of Delaware. Which of the following regarding the name of Mike's business is TRUE? a. His company name can be the same as another corporation that already exists in Delaware. b. He will be able to use the words "Association" or "Institute" in his company name. c. His company name will not have to include one of the following words: Corporation, Incorporated, Company or Limited. d. He will not be able to use abbreviations (such as Inc. or Corp.) in his company name.

B

A customer in a restaurant would be considered ________ to whom the restaurant owner owes a duty ________. a. a licensee; to warn of known dangers. b. a licensee; of strict liability c. an invitee; of reasonable care. d. a social guest; only to avoid intentionally injuring him.

C

Miles purchased a lawnmower with an attached warning that said, "The manufacturer is not responsible in the case of an injury caused by the lawnmower." If Miles is injured because of a defect in the mower and sues the lawnmower manufacturer, he will most likely a. lose, as he assumed the risk. b. win, as this warning would be unenforceable. c. lose, as he agreed to not hold the lawnmower manufacturer liable. d. win, as all lawnmower manufacturers are strictly liable.

B

Mohammad was an employee in the new product development department of Estay Inc. Mohammad was directly involved in the development of a new product that Estay intended to launch in 6 months. Estay took great care to keep information concerning the new product a secret. Ceries, Inc., a competitor of Estay, persuaded Mohammad to leave Estay to direct Ceries' marketing department. Which statement is correct? a. Mohammad can share with Ceries the confidential information he knows about Estay's new product because his agency relationship with Estay is terminated. b. Mohammad cannot share with Ceries the confidential information he knows about Estay's new product because he has a duty not to disclose confidential information he acquired during the agency. c. Mohammad cannot share with Ceries the confidential information he knows about Estay's new product because of the equal dignities rule. d. Mohammad can share with Ceries the confidential information he knows about Estay's new product because he was directly involved in its development.

B

Mrs. O'Leary hired Jenna to sell her house in Michigan. She executed a power of attorney in favor of Jenna authorizing her to do "anything and everything associated with the sale of real estate, acting as a prudent person." On May 30, Jenna finalized a deal with Brandon for the purchase of the house. Brandon and Jenna signed the real estate contract that day. Jenna learned the next day that Mrs. O'Leary had died May 29. a. The contract is voidable at the option of Brandon. b. The contract is void since the agency terminated May 29. c. The contract is voidable at the option of Mrs. O'Leary's estate. d. The contract is valid since the agency's purpose was achieved before Jenna was notified of Mrs. O'Leary's death.

B

Nancy was a partner of a small business. She could see that the business was beginning to fail and that it was very unlikely it would recover. Not wanting to lose her investment, she asked that the court require the partnership to dissolve since she did not have a legal right to withdraw at that time. Does a court have the authority to order a partnership to dissolve? a. No. A court can only dissolve a partnership at the request of all the partners. b. Yes. A court can dissolve a partnership when it is convinced that the partnership is unlikely to succeed. c. No. A court does not have authority to dissolve the partnership. d. Yes. Under the UPA, if a partner can show the court the business suffered a loss the year before the case was filed, the court can dissolve the partnership.

B

Nate works as a carnival barker. His employment contract specifies that he can be fired if he "loses his voice." This is an example of a. vagueness. b. ambiguity. c. duress. d. extortion.

B

Of all forms of dispute resolution, which one probably offers the strongest "win-win" potential because its goal is voluntary settlement? a. arbitration b. mediation c. litigation d. jurisdiction

B

Pamela is planning to sell her home decorating store to her daughter. Pamela has a. a duty to report only any latent defects she knows about that her daughter should not be expected to discover herself. b. a greater duty to reveal problems in the business because her daughter assumes she will be honest. c. a lesser duty to reveal problems in the business because she has a relationship of trust with the buyer. d. no duty to disclose hidden defects in the business

B

Police Officer Paul apprehends a wanted criminal and then demands the $10,000 reward offered by Crime Stoppers. Which of the following statements is true? a. Police Officer Paul is not entitled to the reward because past consideration is never valid consideration. b. Police Officer Paul is not entitled to the reward because he was under a pre-existing duty to make the arrest. c. Police Officer Paul is entitled to the reward because he puts his life on the line every day. d. Police Officer Paul is not entitled to the reward but may have an argument under promissory estoppel.

B

President Nixon issued wage-price controls in an effort to stabilize the economy. This use of executive power was a. an illegal usurption of legislative powers which belong to the Congress. b. a valid use of power based on Article II of the Constitution. c. a valid use of judicial power. d. an illegal usurption of the regulatory powers of administrative agencies.

B

Randi, a resident of Oregon, was involved in a auto accident while in Idaho. The other party lives in Wyoming. Randi wishes to recover the. 28,000 cost to repair her car. The most appropriate court for her lawsuit is: A. federal court in Idaho B. state court in Idaho C. federal court in Wyoming D. federal court in Oregon

B

Renita, a merchant, has received a signed, written confirmation from Merchants, Inc. referring to goods she had not ordered. Renita should a. call the seller and object to the confirmation as soon as she gets back from her two-week vacation. b. object to the confirmation in writing within 10 days. c. return the goods within two weeks of their delivery with a note attached saying she will not pay for the goods. d. ignore the confirmation.

B

Rich and Archie sign an agreement in which Archie agrees to deliver ten cases of champagne in 5 days. The parties negotiated and meant to say in the written agreement, delivery in 50 days. If the evidence is clear that the two parties intended to agree to 50 days, the courts will probably a. issue a warranty. b. reform the contract. c. issue a covenant. d. rescind the contract.

B

Rodney was employed by Deluxe Discount Store. Rodney's manager directed him to check the prices of dog food at Huge Savings Store. The manger of huge savings store saw Rodney writing down prices and asked him to leave. Rodney, fearful that he would fired by Deluxe, refused to leave. Rodney committed the tort of: A. larceny B. trespass C. misrepresentation D. conversion

B

Seventy farmers in Morgan County joined together to gain the advantages of purchasing seed and fertilizer in bulk and of obtaining better prices when distributing and selling their crops. These farmers have formed a: A. business trust B. cooperative C. franchise D. joint venture

B

Shelly offers to sell Jane goods both parties know are stolen. Jane accepts the offer, and agrees to pay for the goods. Later, Jane refuses to accept or pay for the goods. If Shelly sues Jane for breach of contract, what is the probable result? a. The law would enforce this valid, enforceable contract. b. The law would not enforce Jane's promise, as it does not have a lawful purpose. c. Shelly would win as this is a unilateral contract. d. Jane would win as this is a voidable contract.

B

Someone who is not paid for performing duties is a(n) a. fiduciary agent. b. gratuitous agent. c. charitable agent. d. implied agent.

B

Statements of fact about the past and present are called a. provisions and terms. b. representations and warranties. c. promises and covenants. d. damages and remedies.

B

TECO Coal Corporation is interested in the inspections that the US Bureau of Mines has conducted over the past year. To secure this information, TECO should: A. issue a subpoena duces tecum B. make a Freedom of Information Act request C. make a de novo request D. assert the substantial evidence rule

B

The Bill of Rights refers to: a. the inalienable rights found at the beginning of the Constitution b. the first ten amendments to the Constitution C. a specific listing of individual rights found in the original text of the Constitution D. a grouping of individual rights set forth by the US Supreme Court shortly after the Constitution was ratified by the states.

B

The Miranda warning insures that the criminal suspects understand their consistutional rights relating to: A. search and seizure B. self incrimination C. double jeopardy D. having a jury trial

B

The Supreme Court has held that in awarding punitive damages, a court must consider three "guideposts." Which of the following is NOT one of these guideposts? a. the reprehensibility of the defendant's conduct b. whether or not compensatory damages will also be awarded c. the ratio between the harm suffered and the award d. the difference between the punitive award and any civil penalties used in similar cases

B

The UCC deals with unconscionability in a contract by providing that a court may: a. limit the application of any unconscionable clause as to avoid any unconscionable result. b. All of the above. c. enforce the remainder of the contract without the unconscionable clause. d. refuse to enforce the contract.

B

The corporate form of business: a. was first allowed in the State of New York around 1811 and is considered to be an American creation. b. was first known and used by the Greeks and then spread through the Romans to England. c. was not known until the advent of the Industrial Revolution. d. is a relatively new concept developed shortly after the Great Depression.

B

The courts will find an implied contract when a. justice demands it. b. conduct of the parties indicates they intended an agreement. c. there is undue influence. d. there is promissory estoppel.

B

The doctrine of preemption is based on the Constitution's a. Equal Protection Clause. b. Supremacy Clause. c. Due Process Clause. d. Commerce Clause

B

The main difference between the UCC requirement for a writing for a contract for the sale of goods and the common-law rule is that the a. common-law requires only an indication that the parties reached an agreement. b. UCC does not require all the terms of the agreement to be in writing. c. common-law requires only the signature of the defendant and the quantity of goods being sold. d. UCC requires the signature of only one party.

B

The most accurate statement regarding appellate courts is: A. appellate courts often hear new evidence and testimony B. appellate courts generally accept factual findings of the trial court C. only the federal court system has appellate courts D. appellate courts only hear criminal cases

B

The principle of liability stating that an employer is liable for a physical tort committed by an employee acting within the scope of employment and a nonphysical tort of an employee acting with authority is called a. the equal dignities rule. b. respondeat superior. c. fiduciary control. d. apparent authority.

B

The proceeds, if any, of a derivative lawsuit go to a. the board of directors. b. the corporation. c. the shareholders who actually filed the lawsuit. d. the shareholders of the corporation.

B

The remedy of reformation a. is available only if fraud is involved. b. can be used to correct mistakes in the original contract. c. applies only when money damages are inadequate. d. is a commonly used remedy.

B

Tina wishes to learn what records the IRS has about her. Under the Freedom of Information Act (FOIA), A. Tina can only obtain copies of declassified information B. Tina is entitled to all information the IRS has about her C. Tina can only obtain information about the IRS, not records concerning herself D. Tina cannot obtain any information since the IRS is exempt from the FOIA

B

Under SEC rules, companies a. must solicit proxies because a shareholder meeting is invalid unless a certain percentage of shareholders attend in person or by proxy. b. are required to post the information in the annual report and the proxy statement on their Web site, file it with the SEC, and distribute it to shareholders c. must give each shareholder a proxy, but not a proxy statement or an annual report, if the company is a public company. d. can require electronic delivery of proxy statements to save mailing costs and improve operating efficiency of the corporation.

B

Under the UCC, if a seller of goods breaches the contract, the buyer a. may receive only the current market value of the goods. b. may "cover" and then receive the difference between the original contract price and the "cover" price. c. will be awarded the difference between the original contract price and the market value of the goods if the buyer chooses to "cover." d. must "cover."

B

Under the merchants' exception rule of the UCC, within a reasonable time of making an oral contract, if a merchant sends a written confirmation to another, and if the confirmation is definite enough to bind the sender herself, then the merchant who receives the confirmation will also be bound by it unless he objects in writing within a. 3 days. b. 10 days. c. 30 days. d. 5 days.

B

Upon graduating from college, Kathy announced her plans to enter law school the following fall and to marry Rick in December. Kathy's father was afraid that marriage during her first year in law school might cause her to fall behind in her studies or cause her to drop out of school. He called Kathy and promised her $10,000 if she postponed her wedding until after completion of her first year of law school. Kathy agreed and postponed the wedding for a year. Kathy successfully completed her first year of law school, but soon thereafter, Kathy's father died. The administrator of her father's estate claimed she was not entitled to the $10,000 because there was no consideration for her father's promise. If Kathy sues the estate, she will probably be a. unsuccessful because her father received no benefit. b. successful, as there was consideration. c. unsuccessful because her father's death terminated the contract. d. unsuccessful because it was merely fatherly advice not to get married during the first year of law school.

B

What is the major distinction between executive and independent agencies? A. executive agencies govern business issues while independent agencies regulate individual matters B. the president has greater control over executive agencies C. The Administrative Procedure Act regulates independent agencies but not executive agencies D. Subpoenas may be issued by independent agencies; executive agencies do not have subpeona power

B

Which of the following acts resulting in injury would be negligence per se? a. June,while driving the speed limit, sideswiped the car next to her. b. A retailer sold glue containing benzene to a 14-year-old boy in violation of state law. c. Tammy accidentally dropped a heavy carton on Sasha's foot while at work. d. Joe sold fireworks from his Indiana store (a legal activity) to Steve, an Illinois resident (a state that has made owning fireworks illegal).

B

Which of the following can challenge the validity of a de jure corporation? a. The Secretary of State in the state in which the company was incorporated b. No entity can challenge the validity of a de jure corportaion. c. The state in which the company was incorporated as well as any third party d. A majority vote of the shareholders

B

Which of the following is NOT a true statement about fraud? a. The defendant made the statement with the intent to induce the plaintiff to enter into the contract. b. The plaintiff must show that although the defendant acted in good faith, the statement was material because the defendant expected the plaintiff to rely on it and enter into the contract. c. The plaintiff must prove that the defendant has knowledge of the falsity of his or her statement. d. It is necessary for the plaintiff to show that he or she has suffered some type of detriment or injury because of his or her reasonable reliance on the defendant's false statement.

B

Which of the following is a true statement about tort reform? A. Almost all the states have passed statutes limiting the amount a jury can award in a tort case B. Congress has proposed and debated bills placing limits on tort awards, but so far has not enacted such legislation. C. Large medical malpractice awards account for about 60% of the dramatic increase in health care costs in the US during the last two decades D. all of the above

B

Which of the following is an advantage of a corporation? a. It requires little expense to form a corporation. b. It offers limited liability for its shareholders. c. It is a flow-through tax entity. d. It is easy to form a corporation.

B

Which of the following is not true in applying to the Williams Act: A. an individual or group acquiring more than 5% of the company's publicly traded stock must file a public disclosure statement with the SEC B. a bidder must keep a tender offer open for at least 30 business days initially C. If any substantial change is made in the terms of the tender offer, it must be kept open for at least 10 business days following the change. D. any shareholder may withdraw acceptance of the tender offer at any time while the offer is still open

B

Which of the following makes it illegal for U.S. companies and citizens to bribe foreign officials to influence a governmental decision? a. OSHA b. FCPA c. CFAA d. RICO

B

Which of the following played a role in the creation of the US Government by solving the problem of federalism? a. the visigoths b. the Iroquois Native Americans c. Confucious d. Alexis de Tocqueville

B

Which of the following promises ordinarily must be fully executed in writing to be enforceable? a. promises made between two merchants for the sale of goods b. a promise made by an executor of an estate to pay a debt of the estate c. a six-month lease on an apartment beginning in 30 days d. an agreement between two parties to sell a piece of jewelry for $350

B

Which of the following statements is correct? A. Violent street crime results in a greater monetary loss to society than white-collar crime B. White collar-crime results in a greater monetary loss to society than violent street crime C. You cannot calculate the cost of white-collar crime D. Studies cannot calculate the amount of either crime

B

Which of the following takeover defenses is evidenced by the target buying back the shark's stock at a premium price? a. Supermajority voting b. greenmail c. poison pill d. blank check

B

when the Food and drug administration prohibits a certain drug from being marketed in the US, this is: a. private law b. an administrative regulation c. legal negativism d. an executive order

B

A company that makes a commercial with a person who does an excellent, realistic job of pretending to be a famous movie star could be sued by the real actor for the tort of: A. intrusion B. defamation C. commercial exploitation D. none of the above, since public figures are often intimidated by others

C

A inmate in a state prison claims his US Constitutional rights prohibiting cruel and unusual punishment have been violated by the state correctional facility. This case: A. may not be decided by a federal court since it involves a state facility B. must be decided by the state court where the inmate established residency before going to prison C. is a federal question case over which the federal courts have jursdiction D. cannon be heard, as prisoners lose the right to sue

C

Adam decided to play a practical joke on Linda, a co-worker. As Linda was leaving the office one night, Adam, wearing a mask, stepped out from behind some bushes. He pointed a handgun made out of licorice at her and demanded her purse. He then pushed the candy gun to her head and told her if she told anybody he'd kill her. Linda was very scared during the whole incident. She did not think it was funny when Adam pulled the mask off and took a bite of the gun as he gave her the purse back. Which statement is correct? A. Adam committed an assault but not a battery B. Adam committed a battery but not an assault C. Adam committed an assault and a battery D. Adam committed neither an assault nor a battery since he used a candy gun and was only playing a joke on Linda

C

Al contracted to sell his house to Bev. Subsequently, they both changed their minds and agreed to cancel the contract. The contract between Al and Bev is discharged by a. novation. b. full performance. c. rescission. d. accord and satisfaction

C

An agent may not engage in inappropriate behavior that reflects badly on the principal. This rule applies to conduct a. during off-duty time. b. only by public officials. c. during both working hours and off-duty time. d. during working hours.

C

An email scam that involves personalized messages sent from someone the victim knows is called a. shilling. b. hacking. c. spear phishing. d. larceny.

C

An insurance contract is NOT considered to be an illegal form of "wagering" because a. insurance activities are regulated by the state department of insurance. b. insurance contracts are underwritten by reputable companies. c. one must have an insurable interest in the person being insured. d. the money being paid out comes from premiums collected over time.

C

An intentional tort involves conduct in which a. the defendant intended to harm the plaintiff. b. there is resulting punishment, including prison, for the defendant. c. the defendant intended a certain physical act which ends up injuring someone. d. injuries are caused to someone because of the defendant's neglect or oversight.

C

An unliquidated debt can be described as a. a debt in which both its existence and amount is in dispute. b. a debt undisputed by either party. c. a debt in which the existence or amount is in dispute. d. a debt disputed by the creditor but not the debtor.

C

Anne and Mike were winding up their partnership. Mike was approached by a person who wanted the partnership to do some work for him. Mike agreed that the partnership would do the work. Generally speaking, in such a situation a. Anne is not liable since she did not consent to the work. b. Anne is not liable since Mike's conduct was wrongful. c. Anne is liable unless she filed a statement of dissolution with the Secretary of State within 90 days of when Mike entered the contract. d. Anne is not liable since the partnership was in the winding up phase.

C

As it applies to minors, which of the following is LEAST likely to be regarded as a necessary? a. Rent b. Food c. Educational expenses d. Medical expenses

C

At what stage are the partnership debts paid and the proceeds distributed to the partners? a. During dissolution b. During termination c. During winding-up d. During dissociation

C

Bailey Co. and Spryt Bros enter into a contract for the manufacture and sale of 400 lawn chairs. if both parties agree that a modification is necessary: A. the surest way to modify a contract is to liquidate it B. they may not do so without court supervision C. an agreement to rescind the contract will terminate the contractural rights of Bailey and Co. and Spryt Bros. if neither of them have completed their obligations D. courts will generally not enforce a cancellation and modification of a contract unless one party received inadequate consideration under the original contract

C

Belinda and Franco are partners in a jewelry business. Without Franco's knowledge, Belinda buys a ring from Janice for $2,200. Janice has no reason to question the transaction since she is a regular customer of the store and assumes Belinda has authority to buy her ring. When Franco finds out he is furious and does not want to honor the agreement. Which of the following is TRUE? a. Belinda acted with implied authority and the partnership must honor the transaction. b. Belinda acted with absolute authority and the partnership must honor the transaction. c. Belinda acted with apparent authority and the partnership must honor the transaction. d. Belinda acted with actual authority and the partnership must honor the transaction.

C

Cameron, editor of the local newspaper, assigned to Jim the writing of a story about pollution of a nearby stream. Although Jim used reasonable care in gathering and checking his information, unknown to Jim, the story contained a defamatory statement about Maureen. Maureen reads the story and sues Jim for libel. Cameron, who read and published the story a. need not indemnify Jim for Maureen's claim because Jim should have checked his facts more carefully. b. need not indemnify Jim for Maureen's claim because Jim breached his duty to obey instructions. c. must indemnify Jim for Maureen's claim. d. can recover damages from Jim for any injury to the newspaper resulting from Jim's story.

C

Circus Pizza contracted with Art to run its birthday parties. Art's responsibilities included supervising the children and organizing the games. Circus did not investigate Art's background, which included a history of assaulting children. Art assaulted a 7-year-old girl in the restaurant's kitchen during a birthday party. Circus Pizza: A. cannot be liable for the damages because Art committed an unforeseeable intentional tort. B. cannot be held liable for the damages because Art's conduct was not in the scope of employment C. may be held liable on the basis of negligent hiring. D. may be held liable only if Circus actually knew of Art's background

C

Preemptive rights are a. required to be offered to shareholders by the Model Act. b. designed to indemnify managers who act in good faith. c. designed to prevent dilution of a shareholder's ownership in the company. d. not legal in the majority of states.

C

Collector Carl displays his beer can collection at the local swap meet. Mary sees the collection and is interested in buying it. Carl says he will sell the collection for $1,500. Mary says she really likes the collection but is only willing to pay $1,000. Which of the following is correct? a. Mary's offer is an option contract and she cannot revoke the offer. b. If Carl rejects Mary's counteroffer, she can still accept Carl's offer of $1,500. c. Mary's counteroffer terminates Carl's offer of $1,500. d. Neither offer is valid. Who would ever pay $1,000 or $1,500 for a beer can collection?

C

Contracts do not arise from mutual agreement but are created by courts to avoid unjust enrichment are: A. express contracts B. implied contracts C. quasi-contracts D. unilateral contracts

C

Courts may award damages called quantum meruit, which means a. "let the buyer beware." b. "something for something." c. "as much as he deserves." d. "to the letter of the law."

C

Fashions, Inc. has 12 shareholders. The company is subject to the Model Act. What officers is Fashions, Inc. required to have? a. A president and a secretary, and they can be the same person b. A president, secretary, and treasurer c. Whatever officers are described in the corporate bylaws d. A president, at least one vice-president, a secretary, and a chief financial officer

C

For the business judgement rule to apply: A. there must be a conflict of interest B. the director must exercise extraordinary care C. the director must act in the best interests of the corporation D. All of the above

C

Giving possession and control of personal property to another person is referred to as a. adhesion. b. unconscionability. c. bailment. d. usury

C

Hensley and Boyer have been negotiating for several months over issues related to the purchase and sale of some real estate. They draft a letter of intent that a. protects both parties by ensuring the other side is serious and creates a binding agreement on the issues on which the parties have agreed thus far. b. has a legal binding effect concerning the issues outlined in the letter. c. may or may not be an offer, depending on the exact language and whether the document indicates that the parties have reached an agreement. d. courts will consider to be a valid offer which the other party must accept if offered in good faith

C

If Kay, a partner in an auction business, has a personal creditor who is aggressive about collecting the debt, a. the creditor cannot attach the partnership property to pay off the debt. b. Kay cannot repay her personal creditor through her partnership assets under any circumstances. c. the creditor can attach partnership profits by obtaining a charging order. d. Kay can sell her share in the partnership to repay the debt, regardless of what her partners want her to do.

C

If a court determines that a manager's corporate decision amounted to self-dealing, a. the manager will automatically be fired. b. the transaction being challenged will be automatically voided. c. the business judgment rule will not apply. d. the manager is automatically personally liable to the corporation.

C

In Delaware, lawsuits involving corporations are tried in a special court called a. corporate court. b. common court. c. chancery court. d. CEO's court.

C

In January 2014, Professor Noe entered into a contract with State University. She agreed to teach full time during the 2014-2015 academic year. Professor Noe died on May 31, 2014. Her estate a. is obligated to find another person who will agree to teach during the academic year. b. will not be discharged. If the University has to pay more in order to hire a comparable substitute professor at the last minute, then the estate will be responsible for the difference in pay. c. is discharged from any further obligations under the contract. d. will be discharged from any obligations under the contract only if it can be shown that her death was unexpected.

C

In a promissory estoppel case, a court will generally award a. both reliance and punitive damages. b. only nominal damages. c. only reliance damages. d. specific performance.

C

In breach of the partnership agreement, Trimble, a partner in the partnership of Morris, Newt, and Oppie, Ltd. quits the partnership and goes to work for a competitor. The former partners may ask the court for a. liquidated damages as compensation for the breach. b. special damages under the rule of Hadley v. Baxendale. c. an injunction to prevent Trimble from working in competition with the former partners. d. specific performance requiring Trimble to return to work for Morris, Newt, and Oppie, Ltd.

C

Jackie hires Charles to lay new carpet in her bedroom. Charles does such a bad job, that the only way to fix the carpet is to start over and relay the carpet. Which of the following best describes this situation? a. This is substantial performance. Jackie must still pay something to Charles. b. This is substantial performance. Jackie owes nothing to Charles. c. This is a material breach. Jackie owes nothing to Charles. d. This is a material breach. Jackie must still pay something to Charles.

C

Janet was employed as a sales representative for Esday, Inc. An appreciative customer gave her a diamond bracelet for all her hard work on a complicated contract. Can Janet keep the bracelet? a. No. The bracelet is regarded as an unfair trade practice and violates antitrust law. b. No. An agent is not allowed under any circumstances to personally profit as a result of the agency relationship. c. Yes, but only if she discloses the gift to Esday and Esday consents to her keeping the bracelet. d. Yes. The bracelet was given to Janet personally and intended for her.

C

Jennifer substantially performs her service contract with Gretchen. Due to Jennifer's failure to render complete performance, Gretchen a. may declare a material breach and pay only for the value received. b. is required to pay the full contract price. c. is required to pay the full contract price, minus the value of Jennifer's defective performance. d. is discharged from any further contractual obligations.

C

Jill was a limited partner in a retail business that was sued by a customer who fell in the store. The customer claimed the business was negligent in caring for its floors. Which statement best describes Jill's potential liability? A. Jill has no potential liability to the customer. B. Jill can be held personally liable to the customer since she is a partner. C. Jill can only be liable to the amount of her investment D. Jill is personally liable, but the woman must first collect from the general partners before collecting from Jill.

C

John owns a thoroughbred horse named Prince Charming that just ran in the Kentucky Derby. Prince Charming came in last, much to John's frustration and embarrassment. John exclaims in a loud voice, "I'm selling that horse to the first person who hands me $100!" John has a. made an offer to anyone within hearing distance and will be bound by his offer to the first person who produces $100. b. made a firm offer and will be bound by his offer for a reasonable period of time. c. not made an offer because under the circumstances a reasonable person would not conclude that John had intent to make an offer. d. made an acceptance to the first person who can produce $100.

C

Judicial review can be best described as the power of federal courts to: A. review state court decisions B. review state executive action C. review state and federal legislative and executive action D. none of the above

C

Judy believed that Ray and Don were partners in an automotive repair business. Ray and Don were not partners. Ray owned the business as a sole proprietor. Ray, however, allowed Don, his unemployed brother-in-law, to be around the business. When Judy was having her car repaired, Ray told her "my partner here, Don, will give you a ride to work this morning so you can leave your car here. He will give you a ride back here after work and your car will be done." Judy allowed Don to drive her to work. While riding with Don, Don accidentally ran a stop light and caused an accident. Judy was hurt and claims that both Don and Ray are liable to her. Is she right? a. No. Don was not a partner in the business. b. No. There was no intent to have a partnership. c. Yes. This illustrates a partnership by estoppel. d. No. Don was a dissociated partner.

C

Kelley went ice skating on a neighbor's pond, but she fell through a thin area into icy waters. Kelley did not have permission to be on the property, and the neighbor did not even know that she was there. Is the neighbor liable for Kelley's injuries? a. Yes, the neighbor is strictly liable. b. No. Kelley was a trespasser and the neighbor can only be held liable for intentionally injuring her or for gross misconduct. c. It may depend on Kelley's age. d. Yes. The neighbor should have posted "thin ice" notices.

C

Larson entered Forrester's Auto Mart to purchase a used car. Larson found a vehicle with a sales price of $11,000. After Forrester answered all of Larson's questions, Forrester and Larson agreed to a sale. As Larson was leaving to get the money to pay for the car, Forrester told Larson that he thinks Robert Redford formerly owned the car. Larson later learned that Robert Redford had never owned the car. If Larson seeks to rescind the deal based on Forrester's statement, Larson will a. lose because Forrester made a unilateral mistake. b. win because he relied on the misrepresentation. c. lose because he will not be able to prove reliance on the misrepresentation. d. win because there was a misrepresentation of a material fact.

C

Luella just purchased 5 shares of common stock in TriColor, Inc. for $250. Luella has the right to a. manage the day-to-day business of the corporation. b. require that a proposal be placed in the company's proxy statement to be voted on at the shareholder meeting. c. vote to elect directors. d. set executive compensation.

C

Marco agrees to sell Clowns r Us some balloons. The contract states that Clowns may buy as many balloons as it wishes. This agreement is: A. a requirements contract B. an output contract C. an illusory contract D. an enforceable contract

C

Martin Luther King, Jr. disobeyed an injunction in Birmingham, Alabama that prohibited him from speaking publicly because he was African-American. He was jailed for his disobedience. King argued that the law in Birmingham was invalid because it was unjust. Which theory of jurisprudence was he applying? a. Legal realism. b. Common law. c. Natural law. d. Legal positivism.

C

Mulligan Domestics Co. breached a contract by refusing to accept its order for 60 bolts of fabric from Wellington Mills, although the fabric met the contract specifications. In this situation, Wellington Mills a. may resell the fabric to someone else and, if it sues Mulligan, Wellington Mills will be awarded the full contract price. b. has at least four remedies under the UCC. c. may choose not to resell the fabric and settle for the difference between the contract price and the market value. d. would be awarded consequential damages by most courts.

C

Noncompetition agreements are: a. now illegal, as they violate antitrust laws. b. relatively recent developments, first used following the Great Depression in the United States. c. more common today than they were in the past, although policy issues they raised in the 1700s have never gone away. d. infrequently litigated.

C

One morning, Miles accidentally dropped a thumbtack on the chair of the office manager where he worked. The office manager sat on the tack and two days later, was hospitalized with an infection caused by the tack. Which of the following is correct? a. Miles is strictly liable. b. Miles committed an intentional tort. c. Miles actions were negligent. d. No tort has been committed.

C

One of the factors leading courts away from a laissez-faire approach to contract law was a. the assumption that promises are not legally significant. b. the assumption that parties had freedom to contract and would have to live with the consequences. c. a change in relative bargaining power between parties to contracts. d. the movement away from requiring written contracts with a seal affixed.

C

Oxtron, Inc. substantially performed its obligations under a service contract. Oxtron is entitled to receive a. substantially nothing. b. the full contract price. c. the full contract price minus the value of the defects. d. the fair market value of its performance.

C

Pamela hired Lena to sell her business. Lena a. can buy the business as long as she qualifies for financing. b. cannot buy the business under any circumstances. c. can buy the business only with Pamela's permission. d. can buy the business as long as the price is fair.

C

Peter, a minor, purchased a car from ACME Motors. Using a fake ID, he misrepresented his age to be 18. The contract is fully executed. Which of the following is correct? a. Peter cannot disaffirm the contract because of his misrepresentation. b. Peter can disaffirm the contract, because a minor must be saved from his own poor judgment, including his lie. c. Either b or c may be applicable depending on the law of the jurisdiction in which the contract was formed. d. Peter cannot disaffirm the contract because a car is a necessary.

C

Runyon was ready to sign a two-year agreement with Barnett Corp. to become Barnett's sales representative for a three-state area. LaPrise, who wants to be the representative for that area, threatens Runyon with bodily harm if he takes the position. Runyon decides his physical well being is more important to him than the job, so he does not accept the position. LaPrise a. committed tortious interference with a contract. b. caused a breach of contract and committed the tort of intrusion. c. committed tortious interference with a prospective advantage. d. committed a battery.

C

Specific performance may be available for the breach of a contract to sell a. 20 shares of WalMart stock. b. a 2007 Mustang in mint condition. c. an original painting. d. a Nintendo WII video game system.

C

Standard provisions in a contract that are often listed under the heading "Miscellaneous" are called a. boilerpot. b. boilertape. c. boilerplate. d. boilerroom.

C

The Consumer Product Safety Commission (CSPC) is an independent federal administrative agency. Which statement is correct about the chairperson? A. The chairperson serves at the whim of the President and can be fired at any time. B. The chairperson can only be fired by the President for good cause C. The chairperson cannot be fired by the President since the CPSC is an independent agency D. The chairperson has a lifetime appointment and cannot be fired

C

The EPA filed an administrative complaint against Marlin Firearms Co. alleging that the company exceeded chromium emissions limits. The EPA proposed a $257,162 fine. Which statement is correct concerning the administrative agency adjudication? A. a jury decides the matter B. the federal rules of criminal procedure govern the admissibility of evidence C. The losing party has the right to appeal D. The parties are not represented by attorneys

C

The Federal Trade Commission requires franchisors to a. give prospective franchisees earnings information on the company. b. disclose any litigation the company has ever been involved in. c. give prospective franchisees a franchise disclosure document at least 14 business days prior to the signing of a contract or payment of any money. d. let prospective franchisees know how many franchisees have gone out of business in the prior five years.

C

The U.S. Supreme Court was asked to decide whether same-sex sexual harassment is a violation of Title VII of the Civil Rights Act. This law forbids discrimination in employment on the basis of sex. In interpreting statutes, the court may use all of the following EXCEPT a. the plain meaning rule. b. public policy. c. enabling legislation. d. legislative history.

C

The U.S. Supreme Court's holding in Ward's Cove Packing v. Atonio a. found that overt racial discrimination existed. b. upheld the ruling in Griggs v. Duke Power Co. c. differed from the holding in Griggs v. Duke Power Co. partly because the Court was more conservative at the time Ward's Cove was decided. d. set forth a "business necessity" requirement for employment hiring practices.

C

The United States v. Lopez case demonstrates which of the following? a. The states have extensive power to regulate interstate commerce. b. Gun ownership cannot be regulated. c. There are limitations on federal power. d. There are no limitations on the federal government's power pursuant to the Interstate Commerce Clause.

C

The Williams Act a. is designed to regulate the conduct of the target company subject to a takeover. b. was established to prohibit corporate defensive tactics. c. is designed to regulate the conduct of those attempting to take over a company. d. was established to resolve conflicts of interests between directors and stakeholders.

C

The criminal penalties under RICO include all of the following EXCEPT a. confiscation of property acquired through the criminal activity. b. imprisonment. c. capital punishment. d. fines.

C

The form of business ownership that is the MOST easily transferable is the a. general partnership. b. sole proprietorship. c. corporation. d. close corporation.

C

The plaintiff sues in negligence but has no direct proof that the defendant behaved unreasonably. Which of the following is most likely to help the plaintiff? A. Res judicata B. Stare decisis C. Res ispa loquitur D. Mens rea

C

To "undo" a contract and put the parties where they were before they made the agreement is called a. reliance. b. restitution. c. rescission. d. remediation.

C

Under the Uniform Commercial Code, an agreement modifying a contract a. requires consideration only when the sale of goods is involved. b. may not require consideration. c. always requires consideration. d. requires consideration only when one of the parties is incompetent.

C

Vince has begun forgetting things and is becoming very difficult to get along with. He is 85, has been ill, and is very fond of his housekeeper Annie. He gives a deed to Annie for all of his real property. At Vince's death, his children, who got only his photograph albums according to the will, ask that the deed be set aside and the land be put back in the estate for purposes of division among all the children. What will be the probable result in this case? a. Annie will not be able to keep the property since she is not a family member. b. Clearly Annie used her position of dominance to persuade Vince to deed her the property, and it will be set aside. c. Unless the children can prove that Vince was unable to understand what he was doing, or that Annie used her position to improperly influence Vince, Annie can keep the property. d. Since Vince was 85 he was probably incompetent and the court would rule for the children

C

Walter enters a dentist office and points to a damaged tooth. The dentist, Matt, treats the tooth. If Walter refused to pay Matt and Matt sued: A. Walter would win as there was no contract B. Walter would win because of the UCC C. Matt would win; this is an implied contract D. Matt would win quantum merit

C

Walter worked nights as a clerk in a fast-food store. On his last work shift, Walter's boss told him, "I'm really grateful for the year that you have worked here. I am going to give you a bonus of $1,000 in your last paycheck." When Walter got his last paycheck, there was no bonus. If Walter sues, the likely result will be a. Walter will win, as no consideration is required to modify an employment contract. b. Walter will win, as the promise is enforceable. c. Walter will lose, as he gave no consideration. d. Walter will lose unless the promise was in writing.

C

What is a force majeure event? a. any finding in a contract that shows a provision was deliberately left unclear b. any happening that fulfills one of the conditions in the contract, making it enforceable c. a disruptive, unexpected occurrence for which neither party is to blame that prevents one or both parties from complying with a contract d. any action that makes the contract unprofitable for either party

C

When Congress passed a criminal statute called the "Gun-Free School Zones Act" the Supreme Court ruled that: A. the law was valid as a proper exercise of the power to regulate interstate commerce B. the law was void for vagueness, thus, it was not valid C. the law was not valid since Congress exceeded its power under the Commerce Clause D. although the law was not a proper exercise of the power to regulate interstate commerce, Congress had the power to create such legislation on other grounds. Therefore, the statute was valid

C

When Mohammed was hired by Pomico, Inc., he signed the following agreement, "Upon termination of my employment with Pomico, I agree not to work for a competing company within 20 miles of Pomico's headquarters for one year." This agreement, important to protecting secret information developed in the employer's business, is a. an enforceable bailment agreement. b. an unenforceable exculpatory agreement. c. an enforceable agreement not to compete. d. an unenforceable usurious agreement.

C

When an appeal is filed with the US Supreme Court: A. they must hear the case if the validity of a federal statute is in question B. Must hear the case if 2 or more US Courts of Appeals have decided differently on the case C. has discretion as to which cases it hears D. Must hear all cases

C

When one person agrees to pay the debt of another as a favor to that debtor, it is called a. promisory estoppel. b. promisory representation. c. a collateral promise. d. a mutual promise.

C

Which law regulates how federal agencies make rules, conduct investigations, hold meetings and hearings, obtain information, and reach decisions? A. The 1964 Civil Rights Acts B. The Clean Agency Act C. The Administrative Procedure Act D. The Freedom of Information Act

C

Which of the following is NOT a method to acquire control of a company? a. Buy stock from the shareholders through a tender offer b. Buy the company's assets c. Make an initial public offering d. Merge with the company

C

Which of the following is NOT an example of a trial court of limited jurisdiction? a. A small claims court b. A juvenile court c. A general civil division court d. A probate court

C

Which of the following is NOT required to establish promissory estoppel? a. a promise made by the defendant b. reliance on the defendant's promise c. a promise made by the plaintiff in response to the defendant's promise d. Enforcing the promise is the only way to avoid injustice.

C

Which of the following is correct concerning anti-takeover efforts? a. The most effective federal statute has been the Poison Pill Act. b. The Williams Act has been the most effective legislation in regulating of the actions of the target company. c. Most states have passed laws to deter hostile takeovers, but these statutes have not totally eliminated hostile takeovers. d. Federal statutes have been more effective than state statutes in eliminating hostile corporate takeovers.

C

Which of the following statements about torts is correct? A. A tortious act is always a criminal act B. A criminal act is always a tortious act C. A tortious act may also be a criminal act D. All of the above are correct

C

Which of the following statements is accurate regarding a condition? a. A condition is created only when the phrase "provided that" or a similar phrase introduces it. b. A condition will not be enforced by the courts unless formal language is used, regardless of the intent of the parties to create a condition. c. A condition is an event that must occur before a party becomes obligated under a contract. d. A condition must be expressly stated in order to be enforced.

C

Which of the following statements regarding social enterprises is TRUE? a. The focus of social enterprises is the motto "reduce, reuse, recycle." b. To become a socially conscious organization, one-half of shareholders must approve. c. Unlike charities, social enterprises can sell stock to investors. d. Social enterprises are essentially nonprofit organizations.

C

Which of the following statements, if made by a seller who knows the statement to be untruthful, would NOT be misrepresentation of material fact resulting in a cause of action for fraud? a. "This horse is only six years old." b. "This car gets 28 miles per gallon. " c. "There is no better car in the world." d. "The tires have less than 5,000 miles on them."

C

Which of the following states that a corporation cannot undertake any transaction unless its charter permits it? a. The estoppel doctrine b. The indemnification clause c. The ultra vires doctrine d. The exculpatory clause

C

Which of the following would NOT be personally liable for the debts of the business? a. a sole proprietor b. a partner in a joint venture c. an S corp shareholder d. a partner in a general partnership

C

Which term refers to whether an offeree accepts an offer by promising, by making a down payment or by performing? a. method of acceptance b. definiteness c. manner of acceptance d. intent

C

Willis and Leslie orally agree to the sale of a parcel of land for $50,000: one-half payable now as a down payment; one-half payable in 30 days at the time of closing when the title will be transferred. The buyer, Willis, is to have possession immediately. Willis pays Leslie $25,000, takes possession of the land, and starts building a house. At the time of closing, Willis has made a substantial beginning on the house. However, Leslie refuses to transfer the title, claiming the oral contract is not enforceable. This contract is a. enforceable, because the statute of frauds does not apply to this interest in land. b. unenforceable, because there is no writing signed by Leslie. c. enforceable, because Willis has partially performed the oral contract and made improvements on the land. d. unenforceable, because the parol evidence rule applies.

C

Which of the following is the MOST accurate statement regarding economic duress? a. It is a UCC concept only. b. It is never grounds for rescission. c. It is always grounds for rescission. d. It may be grounds for rescission.

D

Which of the following would be an example of a civil lawsuit? A. George is being prosecuted for bank fraud B. The government has initiated an action against Jeff for operating a motor vehicle under the influence. C. Greta hit Rita in a bar during happy hour. Rita is now suing her for injuries D. The DA is bringing Ali to court for violating the city's keg ordinance.

C.

"I'll sell you my car if I decide to sell it" is an example of a. an unliquidated offer. b. a conditional offer. c. a unilateral contract. d. an illusory promise.

D

A contract clause which specifies the amount of damages to be paid in the event of a breach is called a. an incidental damages clause. b. a reliance interest of damages clause. c. a covenant of damages clause. d. a liquidated damages clause.

D

A contract most likely will be declared unconscionable if a. it allows for an extremely high rate of interest to be charged. b. it contains a cancellation clause. c. it is signed by a minor for an item of luxury. d. it is oppressive and one-sided.

D

A corporate charter is filed with a. the Securities and Exchange Commission. b. a state's Treasury and/or Revenue Division. c. the United States Department of Commerce. d. a state's Secretary of State office.

D

A jury decision in a civil case: A. must be unanimous B. must be reached the same day the case is heard C. depends on wether or not the parties chose to have their case decided by a unanimous verdict D. is achieved by informal deliberations

D

A subpoena duces tecum is different from an ordinary subpoena in that a subpoena duces tecum: A. can only be given to an expert to require a personal appearance before a court or administrative hearing B. is binding on a person even if it is mailed to the person rather than handed to her by a process server C. allows for privileged or confidential information to be turned over to the court or administrative agency D. requires the person to bring the specified documents to the court or administrative hearing

D

Adam moved into an apartment complex. The rules of the complex prohibit unmarried men and women from living together in the same apartment. When Adam's friend, Diana, moved into the apartment he was served with eviction papers. Adam claims the apartment complex is violating his constitutional rights since it allows married couples to live together. Is Adam right? A. Yes. His equal protection rights have been violated B. No. His fundamental right of cohabitation has not been violated C. Yes. He and Diane are being treated differently than married couples D. No. Constitutional protections do not extend to privately owned apartment complexes.

D

Alex is a director of ABC, Inc. Alex wants to personally make a major purchase from Bravo Co. If it knew of the opportunity, ABC might be also interested in making that same purchase. Alex must a. advise the boards of both corporations of his conflict of interest. b. resign from the board of directors. c. abandon the idea of making the purchase himself. d. first offer the opportunity to make the purchase to the disinterested directors of ABC or its shareholders.

D

E-mation entered into contract with Ezra, who barely spoke English. The contract provided for Ezra to pay $2500 for a computer system, actually worth $400. If e-mation sued ezra for enforcement: A. the contract is enforceable because of the statute of frauds B. the contract is enforceable because of the parol evidence rule C. the contract is enforceable because of the underlying reference rule D. the contract is unenforceable because it is unconscionable

D

Kayla and Marshall formed a partnership. Marshall incurred a debt in the ordinary course of the partnership business. If the debt is not paid, the creditor may sue: a. only Marshall and the partnership in a lawsuit together or the creditor loses any right to sue the partnership. b. only Marshall. c. only the partnership. d. the partnership and the partners together, or in separate lawsuits, or in any combination.

D

Alfred orally promised to pay Robert a salary of $30,000 per year for five years and his moving expenses up to $10,000 if Robert would quit his job and come to work for him at his manufacturing plant. Robert agreed to do so, but requested a written contract. Alfred assured him that the company attorney would prepare such a contract as soon as possible, but Alfred needed Robert to start at once. Accordingly, Robert sold his house, moved his family, and commenced to work for Alfred. He was fired without cause two months later. No written contract was ever executed. Can Robert enforce Alfred's oral promise? a. Yes. This is a personal satisfaction contract, and Alfred gave no reason for dissatisfaction. Robert can recoup the loss he took on the sale of his house. b. No. This was a contract for longer than one year and is not applicable to exception. It violates the statute of frauds and is not enforceable. c. Yes. This is a partial performance of the sale of goods. Robert can recoup the loss he took on the sale of his house. d. Maybe. Robert should go to court under the theory of promissory estoppel. Alfred made an oral promise that Robert relied upon, and the way to avoid injustice is to enforce the promise.

D

All Seasons, Inc. ordered $5,000 worth of Christmas decorations from Santa, Inc. The shipment of decorations was to arrive no later than October 1, but did not arrive until December 1. All Seasons was able to purchase some of the unfulfilled order through other suppliers, but had to pay 15% more than the price under contract with Santa, Inc. As a result of the delay, All Seasons' sales were down 25%. All Seasons can recover a. nominal damages. b. compensatory damages, consequential damages, and punitive damages. c. punitive damages. d. compensatory damages and consequential damages.

D

All of the following are characteristics of a closely held corporation EXCEPT a. the corporation can typically operate without a board of directors. b. the shareholders usually restrict share transfer. c. minority shareholders are provided more protection than in regular corporations. d. the shares are publicly traded.

D

All of the following are shareholder rights EXCEPT a. the right to dissent. b. the right to information. c. the right to vote. d. the right to manage the firm.

D

Amy is on the board of directors of Computers Plus. Computers Plus is looking for a warehouse to purchase. Amy owns a warehouse. In order for Amy to sell her warehouse to Computers Plus a. the transaction must be fair to both Amy and Computers Plus. b. a court must review the opportunity to determine its favorability. c. she must resign her position on the board of directors of Computers Plus before any negotiations for the warehouse begin. d. the disinterested members of the board of directors must approve the transaction.

D

An express contract a. must be in writing. b. may be inferred by the conduct of the parties involved. c. is not valid in many states. d. has both parties setting forth their intentions.

D

An organization that does not pay income tax on its profits but passes them through to its owners who pay the tax at their individual rates is called a a. tax-free business venture. b. business corporation. c. professional corporation. d. flow-through tax entity.

D

An unconscionable contract is one that a court refuses to enforce because of a. illegality. b. overt vagueness. c. its limit to free trade. d. fundamental unfairness.

D

Angela sued Tom for battery. Angela was awarded $30,000 for future medical expenses. 5 years after the award, Angela realizes that her medical expenses will far exceed $30,000. Under the single recovery principle: A. Angela will be able to submit the additional medical bills to the court for payment B. Tom will have to pay for additional medical bills C. Tom will have qualified privilege and only have to pay a portion of the additional medical expenses D. Angela will have no recourse against Tom or the court for the medical expenses as long as the original award was reasonable

D

As English judges were developing the common law of contracts in the twelfth and thirteenth centuries, a. most promises were found to be enforceable. b. the term "contract" became common. c. changes in the law occurred rapidly. d. promises were found not binding unless written and sealed.

D

Brahma entered into an oral agreement to sell 50 jet skis to Summer Sports. Brahma delivered 20 of the skis on May 1. On June 1, Summer Sports notified Brahma that it will not honor the agreement. Which statement is correct? a. The contract is enforceable for the 50 jet skis b. The contract is obsolete. c. The contract is void since it was oral. d. The contract is enforceable for 20 jet skis.

D

Chance is a traveling marketing representative for a publishing company. He is an independent contractor and was hired without negligence. One afternoon while driving to a meeting, Chance negligently runs a stop sign and causes an accident. Judy is injured. Judy can a. not hold Chance or his company liable for her injury. b. hold both Chance and his company liable for her injury. c. hold the company but not Chance liable. d. hold Chance but not the company liable.

D

Charles owns 1,000 shares of stock in Temperan, Inc. Charles wants to obtain corporate records including the corporation's minute book and accounting records. Under the Model Act, Charles is entitled to this information if he requests it in good faith and a. he is an employee of Temperan. b. he owns at least 1 percent of the company or $2,000 of stock. c. he is a controlling shareholder. d. he has a proper purpose.

D

Claude agrees to lease his house to Irvin for nine months, the lease to begin six months from the signing of the contract. Under the statute of frauds a. the lease is a collateral promise which must be in writing. b. the parol evidence rule renders the lease voidable. c. the lease is not required to be in writing. d. the lease is required to be in writing because of the one-year rule.

D

Dan has a site on eBay where he sells various items. In order to get the most money for the items he sells, Dan often bids on his own goods in order to drive up the price. Dan is guilty of a. phishing. b. nothing; this is an acceptable practice. c. hacking. d. shilling.

D

Dana hires Paris to paint a portrait of her poodle, "Mack." The painting is to be done to Dana's personal satisfaction. Upon completion of the painting, which of the following will be true? a. Dana may not refuse to accept the painting. b. Dana may refuse to accept the painting only if a reasonable person would not like it. c. Dana may refuse to accept the painting if she cannot afford to pay for it. d. Dana may refuse to accept the painting if she really does not like it.

D

Ev-R-Green Co., a private corporation, decides to sell substantially all of the company's assets. Under the Model Act and many state statutes a. the sole remedy for dissenting shareholders is to sell their stock on the stock exchange. b. the board must first get unanimous shareholder approval for this fundamental change. c. the company may buy back, at fair value, the stock of any shareholders who object to the decision or the shareholders who object may receive the right of first refusal to purchase corporate assets. d. Ev-R-Green must buy back, at fair value, the stock of any shareholders who object to the decision.

D

Express authority can be created by: A. words spoken directly to the agent B. conduct C. written words given to one person to give to another person, the agent D. all of the above

D

Factors influencing whether a servant is acting within the scope of employment include all but which of the following? A. The act is similar to the one the principal authorized B. The act is not seriously criminal. C. The act took place during hours that the servant is generally employed D. all of the answer choices are factors in determining if an act is "within the scope of employment"

D

Federal jurisdiction based upon a "federal question" includes cases based on: A. The US Constitution B. a federal statute C. a federal treaty D. All of the above

D

For the purposes of the statute of frauds, an interest in land includes a. a real estate mortgage. b. an easement. c. a long-term lease on an apartment. d. All of the above.

D

Gary and Herman are partners in a lawn mower repair business in Ohio. While Gary is on vacation, visiting his sister in Georgia, his sister's neighbor has trouble with her mower and Gary fixes it for her. She insists on paying him. Gary a. may not accept the money because it would create a conflict of interest. b. may not accept the money because it would mean he was taking a business opportunity away from the partnership. c. may keep the payment since he did the work while he was on vacation. d. must turn the money over to the partnership because he earned it doing the kind of work that the partnership does.

D

Generally, constitutional protections do not apply to: A. acts of the federal government B. acts of state government C. acts of administrative agencies D. acts of privately owned businesses

D

Generally, reasonable liquidated damage clauses will be enforced a. only in real estate sales contracts. b. almost always. c. when actual damages are easily determined. d. when actual damages are difficult to determine.

D

Hank owns 100 shares of cumulative preferred stock in Wayside Transport, Inc. Kelsey owns 50 non-cumulative preferred shares, and Oleg owns 120 shares of common stock. Wayside does not pay dividends in 2007. In 2009: A. Hank and Kelsey must receive their 2009 dividends before Oleg is paid any 2009 dividends. B. Oleg cannot receive any 2009 dividends until Hank is paid for the 2007 dividends. C. Kelsey cannot receive the dividends Wayside could not afford to pay in 2007. she will just lose them. D. All of the above

D

Harry agreed to pay $100 to rent a rooftop spot in downtown Seattle to watch the New Year's Eve festivities. The festivities were unexpectedly canceled because of concern over a terrorist attack. Harry is a. not obligated to pay under the commercial impracticability doctrine. b. obligated to pay the $100. c. not obligated to pay under the force majeure doctrine. d. not obligated to pay under the frustration of purpose doctrine.

D

If Becky promises not to drink alcohol until she becomes a legal adult in exchange for Ben's promise of $1,000, the agreement is a. enforceable because Becky is giving up the right to do something she would otherwise be entitled to do. b. not enforceable because Becky is a minor and could disaffirm the contract. c. enforceable because the agreement accomplishes Ben's goal of keeping Becky from drinking. d. not enforceable because Becky does not have a legal right to drink alcohol.

D

In January, Alex promised to pay Y-K Inc. $5,000 if it would refrain from filing suit against him on a breach of contract action. Y-K agreed and accepted a $5,000 check from Alex. Which of the following statements is correct? a. This is an accord and satisfaction, and Y-K cannot sue. b. The courts would apply promissory estoppel in this situation. c. Y-K's promise to refrain from suing Alex was not supported by legal consideration. d. Y-K's promise to refrain from suing Alex was supported by legal consideration and is enforceable.

D

In awarding punitive damages, a court must consider: A. the reprehensibility of the defendant's conduct B. the ratio between the harm suffered and the award C. the difference between the punitive award and any civil penalties used in similar cases D. all of the above

D

In which case is the offer still valid at the time the acceptance is made? A. Hal offered to sell a book to Sid, but died. Sid sent out an acceptance two days later. B. By-Waste Co. telephones XXX Co. offering to dispose their chemical waste. XXX says it has another way to dispose their waste. Then XXX finds out the method it plans to use violates environment laws, so it sends a letter of acceptance to By-Waste. C. Ray offers to sell his AT&T stock for a particular price by May 1. On May 2, Kathy agrees to buy the stock. D. In a face-to-face transaction, Pat offers to sell his stereo to Mike and Mike accepts

D

Jerry believes his co-worker, Ben, is doing drugs. Since both he and Ben are nurses, Jerry is concerned Ben's drug usage could result in injury to a patient. He tells his supervisor, Cindy. Cindy talks with Jerry about the alleged drug usage and Ben produces a bottle of prescription medicine he is required to take for high blood pressure. The medication does not affect his ability to do work. When Ben learns it was Jerry who reported him, Ben claims that Jerry committed an act of defamation when Jerry told Cindy he used illegal drugs. Is Ben right? A. Yes. Jerry committed slander B. Yes. Jerry committed libel C. No. Ben is in fact using drugs D. No. Jerry is protected by the qualified privilege defense

D

Jerry offers to shovel snow from Ben's driveway for $35. Ben replies "okay". This is an example of: A. implied, unilateral contract B. express, unilateral contract C. implied, bilateral contract D. express, bilateral contract

D

John hired Tim to sell his house. Which statement is correct? a. John, but not Tim, can terminate the agency relationship. b. Tim is John's principal. c. Tim, but not John, can terminate the agency relationship. d. John is Tim's principal.

D

Kyle was eating clam chowder soup in a restaurant when a very small piece of bone lodged in his throat. Fortunately, he was able to remove the bone with his fingers. However, he was upset by the incident and sued the restaurant for negligence. What is the most likely result in this case? a. Kyle will collect damages because the restaurant committed negligence per se. b. Kyle will collect damages, as res ipsa loquitur applies. c. Kyle will collect damages if he proves it was possible to prevent tiny fish bones from being present in clam chowder. d. Kyle will not collect any damages because he did not sustain any damages

D

Larry has the largest pizza business in the city. He learns that Henry is thinking of opening a competing pizza and pasta delivery business. Larry gives Henry $25,000 to not open his proposed business in the same city. Which statement is correct? a. The contract is enforceable. b. The contract is voidable at Larry's option. c. The contract is void for lack of consideration. d. The contract is illegal and void.

D

Lucy owns 10 shares of stock in Quamba, Inc. Lucy wishes to place a proposal in a company's proxy statement to be voted on at the shareholders' meeting. Pursuant to the SEC rules, before Lucy is allowed to place her proposal on the proxy statement she must a. have owned continuously for one year at least one percent of the company and $2,000 or more of the stock. b. have been a stockholder for at least two years. c. have the permission of the board of directors. d. have owned continuously for one year at least one percent of the company or $2,000 or more of the stock.

D

Mary owes $3,800 on her credit card. She sends the credit card company a check for $800 with the notation "payment in full" on the check. If the credit card issuer cashes the check, a. Mary's balance will automatically be paid in full if the $3,800 amount was an unliquidated debt. b. Mary's balance will automatically be paid in full regardless of whether the amount of $3,800 was liquidated or unliquidated. c. Mary's balance will automatically be paid in full if the $3,800 amount was a liquidated debt. d. the check may be subject to a UCC exception to the general rules for accord and satisfaction cases involving checks.

D

MegaCorp purchased 10,000 shares of its own stock that had previously been owned by private investors. The stock MegaCorp repurchased is called a. authorized and unissued. b. repurchased stock. c. authorized and issued. d. treasury stock.

D

Mike owns a house in a poor area of a large city. Mike is on disability and his total monthly income is $700. A sales representative visits his home, selling a water purification system. Mike signs a contract that calls for monthly payments of $500 for the next 10 years. The water system is worth no more than $1000. Mike thought he was signing a permission slip allowing the salesman to conduct a free water test to determine the toxins in the water. How would a court most likely describe this contract? a. The contract is enforceable, but only up to the value of the water system. b. The contract is fully enforceable as written. c. The contract is unenforceable because it is exculpatory. d. The contract is unenforceable because it is unconscionable.

D

Patty is a poor college student struggling to work and keep up with her studies. Fred, her uncle, promises to pay Patty support of $200 per month for the next six months. Although Fred didn't ask her to, she quits her current job in order to devote full time to her studies for the next six months. Fred makes one payment and then stops with no explanation. If Patty sues, what is the likely result? a. Fred would win, as family members cannot sue each other for breach of an oral promise. b. Patty would win, as a contract was formed when Fred promised to pay her the support. c. Fred would win, as he did not ask Patty to quit her job. d. Patty may win under the doctrine of promissory estoppel.

D

Rachel and Cyndi started a retail business called Zebra Toy Company. The business is operated as a partnership. Under partnership law: A. Rachel is personally liable for any business contracts entered into by Cyndi. B. Rachel is personally liable for any business debts, regardless of whether she or Cyndi created the obligation. C. Rachel is personally liable for any negligent act committed by Cyndi in the scope of the business activity. D. all of the above

D

Randy, Joan, and Arnie are partners. Their agreement did not address dissociation nor how long the partnership would last. Randy decided to leave the partnership. What happens when Randy serves notice he intends to withdraw? a. The partnership automatically terminates b. The partnership winds down c. The partnership estoppes d. The partnership can either buy him out and continue in business or wind up the business and terminate the partnership

D

Roberto sued Monica for injuries received in a traffic accident. If Monica does not respond to the complaint and summons served by Roberto within the prescribed time limits, Roberto may obtain a a. summary judgment. b. pretrial conference. c. judgment on the pleadings. d. default judgment.

D

Ryan, a minor, contracted to sell his auto to Ed, a 28-year-old. Ryan later refused to complete the sale. If Ed sues to enforce the contract, Ed will a. win because Ryan was the seller. b. lose, as the contract is void. c. win because minors can only avoid contracts for the sale of land. d. lose, because the contract is voidable by Ryan.

D

Sandy, Ramon, and Bonnie were partners. Sandy dissociated from the partnership. Bonnie and Ramon decided to continue the business. When Sandy dissociated, there was a $50,000 debt owed to Great State Bank. Which statement is correct? a. Whether Sandy remains liable depends on whether she filed a statement of dissociation. b. Only Ramon and Bonnie are liable for the $50,000 debt owed to Great State Bank. c. The debt is extinguished as a result of the dissociation. d. Sandy remains liable on the $50,000 debt owed to Great State Bank.

D

Sarah, an employee of Amex, committed a serious criminal act in an attempt to obtain a large sales order for her employer. A court found her guilty of the felony and also found the corporation guilty of criminal conduct. The company was fined one million. The court: A. erred in fining the company since finding both Sarah and the corporation guilty violated Double Jeapordy B. acted properly if this were a federal proceeding; however, it did not act properly if this were a state proceeding C. acted properly if this were a state proceeding but not federal D. acted properly in this case

D

Which of the following is an example of an exculpatory clause? a. Creditor charges 38% interest on a loan b. Employee agrees to never work for a competing company c. Buyer agrees to pay any costs of litigation d. Seller is not responsible for property damage regardless of the cause of the injury

D

Shareholder proposals on the company proxy statement a. may only address corporate-governance issues and cannot not address the shareholder's political agenda, such as saving the environment. b. will automatically become binding if approved. c. may only be implemented by the company if they receive support from at least a simple majority of the shareholders. d. historically have been rarely approved.

D

Solomon breaches his contract with Neal to purchase the 500 pairs of socks he had promised to buy. Neal is able to sell the 500 pairs to Renny for a much lower amount. Neal then sues Solomon for damages. Neal will be able to recover a. Solomon's contract price. b. an amount which depends on whether Solomon intentionally breached because he found cheaper socks somewhere else. c. the amount in the liquidated damages clause. d. the difference between Solomon's contract price and the amount paid by Renny.

D

Statutory law is to legislative bodies as common law is to a. agencies. b. rulemaking. c. administrative regulations. d. courts.

D

Suppose that Lenny Lawyer enters into an agreement with Cindy Client that his fee will be a percentage of the recovery Lenny obtains for Cindy in her pending divorce. State law makes such a contingency fee arrangement illegal in divorce actions. What will be the probable outcome if Lenny attempts to enforce the agreement? a. The contract will be voidable at Cindy's option. b. The contract will be valid. Cindy would not have been able to afford an attorney otherwise and therefore Lenny was doing a public service. c. The contract will be unenforceable if Lenny did not get the agreement in writing. d. The contract will be void as violating a statute. Lenny will not be able to recover anything.

D

The EPA was investigating wether Exgrow Inc violated the Clean Air Act. Exgrow refused to give the EPA its computerized reports concerning pollution. To get the reports, EPA should use: A. stare decisis B. a de novo C. an excaliber D. a subpoena duces tecum

D

The Grand Performance Hall is in the process of remodeling and is scheduled to open for business after being closed for 50 years. As part of the remodeling, it is installing a new sound system. The sound system is to be installed by Sound Systems, Inc. on or before April 10. Opening night of the hall is May 1. The contract states that "time is of the essence" because of the opening-night deadline. Sound Systems has some financial difficulties and doesn't deliver the system until April 20. Grand Hall refuses to accept it, and Sound Systems sues. What will be the result? a. Sound Systems wins; the contract was substantially performed. b. Grand Hall wins; there was commercial frustration. c. Sound Systems wins; there was a true impossibility. d. Grand Hall wins; the contract date was strictly enforceable.

D

The Occupational Safety and Health Administration promulgated a rule requiring warehoue employees to wear hardhats when in the vicinity of an operating forklift. The purpose of the hardhats is to protect employees from danger of falling objects. This rule is: A. an executive order B. a statute C. common law D. administrative law

D

The Occupational Safety and Health Administration promulgated a rule requiring warehouse employees to wear hardhats when in the vicinity of an operating forklift. The purpose of the hardhats is to protect employees from danger of falling objects. This rule is: a. an executive order b. a statute c. common law d. administrative law

D

The US Supreme Court was asked to decide whether same sex sexual harassment is a violation of Title 9 of the Civil Rights act. This law prohibits discrimination in employment on the basis of sex. In interpreting statutes, the court may use which of the following? A. the plain meaning rule B. legislative history C. Public Policy D. all of the above

D

The advantage of a corporation over a partnership is: A. shares are easily transferable to another person B. perpetual existence C. it is easier to raise funds D. all of the above

D

The advantage to an S corporation is a. its offering of multiple classes of stock. b. its ability to have partnerships and corporations invest as shareholders. c. its ability to attract an unlimited number of shareholders. d. its treatment of shareholders for income taxation purposes.

D

The basic distinction between a bilateral contract and a unilateral contract is that a. only one promise is involved in a bilateral contract. b. one is enforceable, the other is not. c. the Statute of Frauds applies to one and not the other. d. only one promise is involved in a unilateral contract.

D

The idea that courts should not be heavily involved in lawmaking, but rather should only rule in cases where the Constitutionality is clear is known as: A. judicial review B. Judicial activism C. judicial reform D. judicial restraint

D

The intent of the offeror to extend an offer to the offeree is generally determined by reference to a. the subjective intention of the offeror. b. the assumptions of the offeror. c. the beliefs of the offeror. d. the words and conduct of the offeror.

D

The intent required to commit a burglary would be: A. general intent B. reckless conduct C. strict liability D. specific intent

D

The plaza hotel contracts with EZ lawn to have EZ mow the grass at Plaza for the next 10 years. However, there is a clause in the contract that states if the hotel chooses, the contract may be terminated provided Plaza pays EZ $2,000. Which of the following is correct? A. This contract is unenforceable because the clause makes the contract an illusory promise B. the contract is unenforceable because the $2000 is past consideration C. the contract is unenforceable because only one party has the option to cancel D. the contract is enforceable because the option to cancel clause is supported by consideration

D

The power of federal agencies is limited by: A. statutory control in the enabling legislation and the Administrative Procedures Act B. political control by the president C. judicial review D. all of the above

D

The purpose of the Freedom of Information Act (FOIA) is: A. to give the government access to information concerning citizens, businesses, and organizations B. to limit the amount of information that the government can collect about its citizens, business, and organizations C. to permit warrantless searches and seizures of evidence when necessary to ensure safety D. to give citizens, businesses, and organizations access to information that federal agencies are using

D

Thompson raised 80 acres of corn, most of which he used to feed his own cattle. He locally sold what he did not use. Based on the Supreme Court's ruling in Wickard v. Filburn, a. only Thompson's local government can regulate his farming activity. b. only Thompson's state and local governments can regulate his farming activity. c. Congress has no authority over Thompson's activity based on the negative aspect of the Commerce Clause. d. Congress may regulate Thompson's farming activity because it has a substantial economic effect on interstate commerce.

D

Trein, Inc. entered into a one-year, $1 million dollar contract with Mia, a sports celebrity, to promote Trein's products. E-Presto, a competitor of Trein, was interested in having Mia promote its products but knew of her contract with Trein. E-presto offered Mia a three-year, $5 million contract. Mia left Trein and signed with E-presto. If Trein sues E-presto for tortious interference with a contract, E-presto: A. will be able to establish a justification since E-presto was acting to protect an existing economic interest. B. will be able to establish a justification because, in talking to Mia, E-presto was exercising its First Amendment freedom of speech. C. will be able to establish a justification because to decide otherwise would subject Mia to involuntary servitude D. will not be able to establish justification

D

Usury laws are designed to protect consumers from a. taking insurance polices out on the life of another. b. obtaining loans to gamble on credit. c. professionals practicing a trade without a valid license. d. companies charging excess interest on loans.

D

Wally owns 200 acres of land. Wally offers to sell the land to Robert for 1,500 an acre. Robert replies that he does not need 200 acres of land but would like to buy 40 at that price. Wally agrees to sell but does not identify which 40 acres. Later, Wally refuses to sell the land to Robert. What is the result? A. Robert wins; this is an enforceable contract with complete and definite terms B. Robert wins; the UCC will decide which 40 acres are to be sold C. Wally wins; the original offer was not intended to be an offer but merely an invitation to negotiate D. Wally wins; this agreement is too indefinite since it does not identify which 40 acres are to be sold.

D

Wayne worked in an office. He had no criminal record, had never had a complaint made against him about his work or his conduct, and had been a faithful employee for nearly 20 years. One day, Wayne followed his supervisor to his home and fatally shot him. The estate of the supervisor sued the company, claiming it should have been aware of Wayne's growing frustration with work. The company's best defense will be that a. the incident occurred away from the office. b. even if the company had been aware of Wayne's difficulty with his supervisor, Wayne did not have any criminal history. c. the killing was the result of a personal conflict between Wayne and the supervisor. d. there was no way to foresee that the incident would happen.

D

What does it mean if a party to a contract has been discharged? a. It means that person has "delegated" and chosen to give up his or her contract rights. b. It means that person has "transferred" by assigning his or her duties to another party. c. It means that person has been "let go" and has terminated the contract. d. It means that person is "finished" and has no more duties under the contract.

D

What federal agency requires that the seller of a franchise give the potential buyer Franchise Disclosure Document (FDD) and audited financial statements? a. The Interstate Commerce Commission (ICC) b. The Franchise Sales Commission (FSC) c. The Securities and Exchange Commission (SEC) d. The Federal Trade Commission (FTC)

D

What is a "scorched earth strategy"? a. A takeover strategy whereby the bidder merges its company with that of the target firm. b. A takeover strategy whereby a bidder secretly buys stock from the shareholders. c. A defensive takeover strategy where the target effectively limits how large a block of stock an investor can buy. d. A defensive takeover strategy where the target sells off the assets that the takeover company most wants.

D

What is an inside director? a. A shareholder charged with the illegal act of insider trading b. A shareholder who is a board member of a competing firm c. A member of the board of directors who is also a board member of a competing firm d. A member of the board of directors who is also an employee of the corporation

D

What phrase explains how a requirements contract can be valid? A. "will buy 100% of the output" B. "willing to accept entire quantity" C. "no consideration needed" D. "in good faith"

D

When a provision in a contract is unclear by accident, it is a case of A. mistake B. condition C. vagueness D. ambiguity

D

When two parties incur the liability of a partnership without actually being partners, it is referred to as a. a wrongful association. b. partnership by apparent authority. c. a charitable partnership. d. partnership by estoppel.

D

Which of the following are generally considered to be legal offers? a. catalog advertisements b. placing an item up for auction c. price lists d. a note scribbled on a restaurant napkin that includes the details of the offer

D

Which of the following does NOT violate the Foreign Corrupt Practices Act? a. A publicly traded company that does not engage in international trade refuses to allow its company records to be inspected by U.S. officials. b. A U.S. company promises to pay a bribe to a foreign company, but is unsuccessful in gaining any benefits from that company. c. a U.S. company bribes a government official in order to influence a governmental decision. d. A company allows a grease or facilitating payment for a routine governmental action.

D

Which of the following is NOT one of the three ways to amend a written contract? a. by writing and signing an amendment (or rider) b. by crossing out the mistakes and writing in the corrections c. by writing a totally new contract with the correct provisions d. by verbally agreeing to the changes and shaking hands on the deal

D

Which of the following is a valid defense to a defamation claim? A. the statement was true B. the statement was an opinion C. the person making the statement made it only to the plaintiff, not to any third parties D. all of the above

D

Which of the following is generally NOT in the introductory paragraph of a contract? a. The date of the contract b. The nature of the contract c. The parties to the contract d. The covenants of the contract

D

Zero, Inc. agreed to build Millie a storage building for $8,000. After beginning the project, Zero realized that it could not complete the job and make a profit. Zero demanded $9,500 to complete the building. Millie agreed to pay the $9,500. When the project was complete, Millie tendered $8,000 to Zero for the job. If Zero sues Millie for the remaining $1,500, a. Zero will lose because the UCC does not require consideration to modify an existing contract. b. Zero will win because Millie had a pre-existing duty to pay any additional amounts. c. Zero will win because there was consideration for the additional $1,500. d. Zero will lose because there was no legal consideration to support the additional $1,500.

D

a "fundamental change" in a corporation would be illustrated by: A. E-prise, Inc. merging with Vitta Corporation B. the voluntary dissolution of Oldtry, Inc. C. the amendment to bylaws of Chaney Company D. all of the above

D

All of the following are characteristics of a closely held corporation EXCEPT: a. the shares are publicly traded. b. the corporation can typically operate without a board of directors. c. the shareholders usually restrict share transfer d. minority shareholder are provided more protection than in regular corporations.

a

An S Corporation cannot have more than ____ shareholders. a. 100 b. 75 c. 50 d. 25

a

Before filing a derivative lawsuit, shareholders must: a. notify the board that the corporation has been wronged and ask the board to bring suit in the name of the corporation directly. b. notify the Secretary of State that the corporation has been wronged and ask the Attorney General to file the lawsuit on behalf of the corporation. c. hold a special meeting, and a majority of the shareholders must vote to file the lawsuit. d. place the lawsuit on the company's proxy statement, and the proposal must receive a majority vote.

a

Charles owns 1,000 shares of stock in Temperan, Inc. Charles wants to obtain corporate records including the corporation's minute book and accounting records. Under the Model Act, Charles is entitled to this information if he requests it in good faith and: a. he has a proper purpose b. he owns at least 1 percent of the company or $2,000 of stock c. his is an employee of Temperan d. he is a controlling shareholder

a

Debbie is a partner with Adam and Marty. She sells her interest in the partnership to Craig. Which statement below is most accurate? a. Adam and Marty must approve the sale for Craig to become a full partner. b. Either Adam or Marty must approve the sale of Debbie's interest. c. Craig has a right to become a full partner once he buys Debbie's interest. d. None of the above is correct

a

Ending a partnership involves which of the following three steps? a. dissolution, winding up, and termination b. dissociation, winding down, and consummation c. failure, dividing up, and paying off. d. dissociation, agreement, and dissolution

a

In a derivative lawsuit, the named plaintiff: a. is the corporation on whose behalf the lawsuit is filed. b. is the particular class of shareholders primarily injured by the wrong. c. consists of all the corporation's shareholders. d. is the board of directors for the corporation.

a

Incorporation protects: a. shareholders against personal liability for the debts of the company b. anyone involved in management of the business against personal liability for wrongdoing c. the public from wrongdoing by either the shareholders or the management of the corporation d. all of the above are correct

a

Jenny is an officer of a corporation. She made a difficult business decision. When challenged about her decision, the court ruled she had acted in good faith and that the business judgement rule applies. As such: a. jenny will not be held personally liable for a decision that results in money losses to the company. b. jenny's decision will be reviewed by a court c. jenny is immune from a lawsuit d. jenny must resign from the board.

a

Jim agreed to show Donna's car to a potential buyer. Donna was not able to be home since she had to attend a meeting. After showing the car, Jim left the keys in it and the car was stolen. Which statement is correct? a. Since Jim is a gratuitous agent, he will only be liable for the loss of the car if his conduct constitutes gross negligence. b. Since Jim is a gratuitous agent, he will be liable for the loss of the car if his conduct constitutes ordinary negligence. c. Since Jim is a gratuitous agent, he has not liability for the car. d. Since Jim is a gratuitous agent, he is strictly liable for the loss of the car.

a

Kian is the chief financial officer of Yonkka, Inc. He is also a member of Yonkka's board of directors. Kian is: a. an inside director b. an outside director c. holding an illegal position d. a public director

a

RayCorp offers to buy out MegaCorp by paying $69 per share. LandCo, who also wants to buy MegaCorp, offers to pay $75 per share. When the bidding process is finally over, RayCorp has offered $85 per share and LandCo has offered to pay $90 per share. MegaCorp agrees to sell to RayCorp on grounds that, all things considered, the takeover by RayCorp would be better for the business. LandCo claims that MegaCorp should sold the company to it since it was the highest bidder. Is LandCo correct? a. yes. this is a breach of duty. MegaCorp must sell the company to the highest bidder; it cannot give preferential treatment to a low bidder. b. no. this is covered by the Williams Act. c. no. the directors have broad discretion in deciding to whom to sell the company. d. none of the above.

a

Ron is the business agent for Kansas Sunshine, a rock band. He is also the agent for another popular Midwestern rock group, City Sand. Ron negotiates a deal with a Kansas City promoter to have City Sand play after a professional football game. The promoter was willing to pay $250,000 for both groups to play after the game; however, Ron talked her into booking just City Sand for $175,000. Given his contract with City Sand, Ron made more money under this arrangement. Has Ron violated his fiduciary duty to Kansas Sunshine? a. Yes. It appears that Ron put his own interests ahead of his principal's interests. b. Yes. Ron cannot, under any circumstances, act as an agent for both groups. c. Both a and b are correct. d. Neither a or b is correct since it is very common for rock band agents to represent several groups at the same time.

a

Sandy, Ramon, and Bonnie were partners. Sandy dissociated form the partnership. Bonnie and Ramon decided to continue the business. When Sandy dissociated, there was a $50,000 debt owed to Great State Bank. Which statement is correct? a. Sandy remains liable on the $50,000 debt owed to Great State Bank. b. Only Ramon and Bonnie are liable for the $50,000 debt owed to Great State Bank. c. The debt is extinguished as a result of the dissociation. d. Whether Sandy remains liable depends on whether she filed a statement of dissociation.

a

Under the _______ theory of jurisprudence, the law is what the sovereign says it is. a. legal positivism b. natural law c. legal realism d. morality

a

Which of the following is correct concerning anti-takeover efforts? a. most states have passed laws to deter hostile takeovers, but these statutes have not totally eliminated hostile takeovers b. federal statutes have been more effective than state statutes in eliminating hostile corporate takeovers c. the most effective federal statute has been the Poison Pill Act. d. both b and c are correct

a

Who establishes executive compensation? a. the board of directors b. the shareholders c. the officers themselves d. an independent CPA firm.

a

Anti-takeover tactics include all EXCEPT: a. staggered board of directors b. negative tender offers c. greenmail d. chewable poison pills

b

Astrid and Razi formed a partnership in which they agree to share profits 60 percent to Astrid and 40 percent to Razi. Losses will be shared: a. equally, unless otherwise agree. b. 60 percent to Astrid and 40 percent to Razi, unless otherwise agreed. c. according to their capital contributions to the partnership. d. in whatever proportion provides the greatest tax advantage for the partners that year.

b

At what stage are the partnership debts and the proceeds distributed to the partners? a. during dissolution b. during winding up c. during termination d. during dissociation

b

Charles and Ellen, an unmarried couple, run an ice cream store. The business is not incorporated and they have filed no formation papers with the state. Their business is a: a. sole proprietorship b. partnership c. joint venture d. limited liability company

b

In the Unocal Corp. v. Mesa Petroleum Co. case, the court: a. found the issuance of a preliminary injunction against Unocal's offer was proper. b. ruled that a board of director may not act primarily out of a desire to keep itself in office. c. issued a permanent injunction against a selective exchange offer. d. applied the Williams Act to analyze the target company's actions.

b

Janet was employed as a sales representative for Esday, Inc. An appreciative customer gave her a diamond bracelet for all her hard work on a complicated contract. Can Janet keep the bracelet? a. Yes. the bracelet was given to Janet personally and intended for her. b. yes, but only if she disclosed the gift to Esday and Esday consents to her keeping the bracelet. c. No. an agent is not allowed under any circumstances to personally profit as a result of the agency relationship. d. No. the bracelet is regarded as an unfair trade practice and violates antitrust law.

b

Lucy owns 10 shares of stock in Quamba, Inc. Lucy wishes to place a proposal in a company's proxy statement to be voted on at the shareholders' meeting. Pursuant to the SEC rules, before Lucy is allowed to placer her proposal on the proxy statement she must: a. have owned continuously for one year at least one percent of the company AND $2,000 or more of the stock b. have owned continuously for one year at least one percent of the company OR $2,000 or more of the stock c. have the permission of the board of directors d. have been a stockholder for at least two years

b

Quick Supply House breached a contract with MegaCorp. The breach resulted in the loss of a great deal of money to MegaCorp. The board of directors for MegaCorp vote not to sue the supply house since it believes the legal costs would be more than it would probably recover. If a group of shareholders wish to sue the supply house, this would: a. be a type of direct lawsuit b. have to be a derivative lawsuit c. be a settlement lawsuit d. be an SEC lawsuit

b

The doctrine of estoppel would most often apply in situations of: a. implied authority. b. apparent authority. c. transaction authority. d. actual authority.

b

The importance of a Subchapter S corporation is: a. its organizational structure. b. its treatment of shareholders for income taxation purposes. c. its requirement of restrictive transfer rights of the shares. d. its small cost of formation

b

Under SEC rules, companies: a. can require electronic delivery of proxy statements to save mailing costs and improve operating efficiency of the corporation b. are required to post the information in the annual report and the proxy statement on their Web site, but must mail to shareholders either hard copies of all the information or a card telling them how the vote online. c. must solicit proxies because a shareholder meeting is invalid unless a certain percentage of shareholders attend in person or by proxy. d. must give each shareholder a proxy, but not a proxy statement or an annual report, if the company is a public company.

b

What is meant by the term "piercing the corporate veil"? a. corporate directors and/or officers may be held personally liable to a person damaged by an act of the corporation. b. corporate shareholders can be held personally liable to a person damaged by an act of the corporation. c. both of the above d. none of the above.

b

Which of the following describes the duty of loyalty? a. it requires managers to make decisions they reasonably believe to be in the interest of the corporation. b. it prohibits making a decision that benefits the decision-maker at the expense of the corporation. c. it requires consideration of the interests of the surrounding community. d. it required using care that an ordinarily prudent person would take in a similar situation.

b

A partnership is the association of two or more persons to carry on as co-owners a business for profit. The association: a. must be established by filing Articles of Partnership with the Secretary of State. b. must be established by a formal agreement. c. means a voluntary relationship between the persons. d. included all direct descendants.

c

Chance is a traveling marketing representative for a publishing company. He is an independent contractor. One afternoon while driving to a meeting, he negligently runs a stop sign and causes and accident. Judy is injured. Judy can: a. hold both Chance and his company liable for her injury. b. hold the company but not Chance liable. c. hold Chance but not the company liable. d. not hold Chance or his company liable for her injury.

c

Daniel, his parents, and three brothers own all the stock of their family farm corporation. This corporation, which is taxed as a corporation, is probably: a. an S corporation b. a C corporation c. a closely held corporation d. an LLC

c

Don was standing in a cafeteria line holding a plate. Tim was upset with Don. Tim turned Don around and grabbed a plate out of Don's hand. Time then held the plate up and threatened to break it over Don's head. Tim has committed: A. a battery, but not assault B. an assault, but not a battery C. both an assault and a battery D. neither an assault nor a battery

c

Ev-R-Green Co., a private corporation, decides to sell substantially all of the company's assets. Under the Model Act and many state statutes: a. the sole remedy for dissenting shareholders is to sell their stock on the stock exchange. b. the board must first get unanimous shareholder approval fro this fundamental change. c. Ev-R-Green must buy back, at fair value, the stock of any shareholders who object to the decision. d. the company may buy back, at fair value, the stock of any shareholders who object to the decision or shareholders who object may receive the right of first refusal to purchase corporate assets.

c

HBR Accounting hired Denise, a CPA, to prepare tax returns. Which statement is correct? a. Denise is a gratuitous agent and has a duty not to commit gross negligence. b. Denise is an agent and has a duty not to commit ordinary negligence. c. Denise, as a CPA, is an agent with special skills. She is held to a higher duty than ordinary negligence. d. Denise, as a CPA, is an agent with special skills. She is held to a lower standard than ordinary negligence.

c

If Kay, a partner in an auction business, has a personal creditor who is aggressive about collecting the debt: a. kay can sell her share in the partnership to repay the debt, regardless of what her partners want her to do. b. the creditor cannot attach the partnership property to pay off the debt c. the creditor can attach partnership profits by obtaining a charging order. d. Kay cannot meet her obligation to repay her personal creditor through her partnership assets. Her personal obligation will have to be paid through her personal funds or she will have to dissociate from the partnership and force the partnership to buy her share.

c

If a court applies res ipsa loquitur a. the defendant is strictly liable. b. the plaintiff needs to prove the case by a preponderance of the evidence. c. the defendant has the burden of proving he or she is not liable. d. the plaintiff must prove the case by clear and convincing evidence.

c

Kayla and Marshall formed a partnership. Marshall incurred a debt in the ordinary course of the partnership business. If the debt is not paid, the creditor may sue: a. only Marshall b. only the partnership c. the partnership and the partners together or in separate lawsuits or in any combination d. only Marshall and the partnership in a lawsuit together or the creditor loses any right to sue the partnership.

c

Max, Jenny, and Craig are partners. They have purchased an elegant Victorian home and converted it into an office for their partnership. Craig decides to use the partnership's office to host some evening parties. Craig has a sideline business of arranging expensive gatherings and charging each person a handsome price to attend these "elite" parties. When Max and Jenny find out what Craig is doing, they demand that he pay them for the use of the property. How much money, if any, is Craig required to pay the partnership? a. nothing. he is free to use partnership property for his own uses. b. Nothing, but he will be removed from the partnership for violating his fiduciary duty. c. he must turn over any profits he earned from his activity. d. he must pay fair market value for the use of the house.

c

MegaCorp is incorporated in the state of Delaware and is registered only in Delaware. Jolene purchased a MegaCorp product from a company's sales representative following a presentation in Michigan. Jolene was seriously injured by the product in Michigan. Under the Model Act, if Jolene sues in Michigan, can MegaCorp defend the suit there? a. MegaCorp may only defend against a lawsuit in Michigan if it first registers by paying back fees, taxes, and penalties. b. Yes, MegaCorp can bring or defend against a lawsuit in any state regardless of whether the corporation is registered to business in that state. c. Yes, MegaCorp can defend against a lawsuit in Michigan regardless of whether MegaCorp is registered to do business in that state. d. No. Jolene must sue and MegaCorp may defend a lawsuit only in Delaware.

c

Once a provision is in the corporate charter, it can only be changed by: a. a vote of the shareholders b. filing an amendment with the Secretary of State c. both of the above are necessary to change a corporate charter d. neither a or b is necessary to change a corporate charter. the board of directors merely needs to file a change of charter form.

c

Phillip was waiting for a bus at a bus stop. Across the street and down the block, a mechanic negligently overinflated a tire he was intending to put onto Marsha's pickup truck. The exploding tire injured Marsha and frightened a neighborhood dog, which ran down the street and knocked Phillip down, injuring his knee. Phillip sued the mechanic. In applying the Palsgraf v. Long Island Railroad Co. decision to this case, Phillip would a. win because the mechanic was negligent in overinflating the tire, which led to Phillip's injury. b. win based on negligence per se. c. lose because, although the mechanic's conduct was negligent toward Marsha, it was not a wrong in relation to Phillip, who was far away. The mechanic could not have foreseen injury to Phillip and therefore had no duty to him. d.lose because the court would apply the doctrine of res ipsa loquitur.

c

Shareholder proposals on the company proxy statement: a. must be stated in the form of a request of recommendation according to SEC rules. b. may only be implemented by the company if they receive support from at least a simple majority of the shareholders. c. are, in about half of the cases, withdrawn before a vote because the company decides to implement the proposal. d. may address only corporate-governance issues, such as cumulative voting or executive compensation, but may not address the shareholder's political agenda, such as saving the environment.

c

The Minnesota legislature passed a law requiring that employers allow each employee adequate time within each four consecutive hours of work to utilize the nearest convenient restroom. This law is a. a stare decisis. b. an executive order. c. a statute. d. an ordinance

c

The Model Business Corporation Act states: "All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation managed by or under the direction of its: a. shareholders b. officers c. board of directors d. executive committee

c

The executives of Joraginn Corporation have decided they need to sell 50,000 additional shares of stock to finance their expansion plans. The executives: a. cannot sell that many shares unless they were authorized initially in the corporate charter. b. can sell as many shares as the market will bear. c. are limited by the number of shares authorized in the corporate charter, but this number can be increased by amending the charter and paying a fee. d. can sell the shares only if the shares have a par value which is close to the current market price.

c

The term "corporate manager" refers to: a. directors b. corporate officers c. both of the above d. none of the above

c

Unless the form provides for a longer period, a proxy is valid for how long under the Model Act? a. 90 days b. six months c. 11 months d. one year

c

Veritas, Inc. is planning its annual shareholder meeting on June 15. The company: a. need not send notices of the meeting to shareholders since it is the regularly scheduled, annual meeting, which Veritas always holds on the third Thursday of June. b. must send notices to everyone who owns stock as of January 1. c. must send notices to everyone who owns stock on the "record date," which can be no more than 70 days before the meeting. d. is not required to have an annual shareholders meeting if the company is listed only on the NYSE.

c

Which of the following events occurs first with respect to the ending of a partnership? a. termination. b. winding up. c. dissolution. d. distribution of proceeds.

c

Which of the following statements is correct with respect to state efforts to offer protection to companies targeted for hostile takeovers? a. courts offer the only legal protection to companies targeted for hostile takeovers b. statutory law offers the only legal protection to companies c. both statutory law and the state courts have provided some degree of protection for companies d. state courts and state statutes have offered no protection for companies targeted for hostile takeovers.

c

Preemptive rights are: a. not legal in the majority of states. b. designed to prevent dilution of a shareholders' ownership in the company. c. required to be offered to shareholders by the Model Act. d. designed to indemnify managers who act in good faith.

c?

Defining a corporation with such information as the corporate name, the number and type of authorized shares of stock, identification of the purpose and the agent, is done through the: a. charter b. articles of incorporation c. certificate of organization d. all of the above. all these terms are used to identify the same document.

d

Frank is a controlling shareholder in E-prise, Inc. Frank: a. may not enter into unfair business transactions with the corporation. b. has a fiduciary duty to minority shareholders. c. may not exclude minority shareholders from beneficial arrangements involving stock. d. all of the above

d

Laurie is incorporating her business. Laurie's home state is Wisconsin. Business will be conducted in California, Michigan, Pennsylvania, and Virginia. Laurie: a. must incorporate the business in Wisconsin, the home state. b. must incorporate the business in Wisconsin, California, Michigan, Pennsylvania and Virginia. c. must incorporate in Delaware. d. can incorporate the business in any state.

d

Luella just purchased 5 shares of common stock in TriColor, Inc. for $250. Luella has the right to: a. manage the day-to-day business of the corporation b. set executive compensation c. require that a proposal be placed in the company's proxy statement to be voted on at the shareholder meeting. d. vote to elect directors

d

Meredith, a shareholder in Quarto, Inc., notified Quarto's board of directors that the corporation had been wronged and asked the board to bring a lawsuit in the corporation's name. In response to Meredith's demand, the board: a. can file suit on behalf of the corporation b. can reject Meredith's demand or simply fail to respond c. can appoint a Special Litigation Committee d. can do any of the above.

d

Mohammad was an employee in the new product development department of Estay Inc. Mohammad was directly involved in the development of a new product that Estay intended to launch in 6 months. Stay took great care to keep information concerning the new product a secret. Ceries, Inc., a competitor of Estay, persuaded Mohammad to leave Estay to direct Ceries' marketing department. Which statement is correct? a. Mohammad can share with Ceries the confidential information he knows about Estay's new product because he was directly involved in its development. b. Mohammad can share with Ceries the confidential information he knows about Estay's new product because his agency relationship with Estay is terminated. c. Mohammad cannot share with Ceries the confidential information he knows about Estay's new product because of the equal dignities rule. d. Mohammad cannot share with Ceries the confidential information he knows about Estay's new product because he has a duty not to disclose confidential information he acquired during the agency.

d

Nikki was an tax accountant with HBR Accounting. Nikki decided to do some tax consulting in the evenings and on weekends. HBR is unaware of Nikki's consulting work. Which statement is correct? a. Nikki has not breacher a fiduciary duty to HBR since her consulting is done after her work for HBR. b. Nikki has not breached a fiduciary duty to HBR since her behavior does not reflect badly on the accounting firm. c. Nikki has not breached a fiduciary duty to HBR since Nikki has a contractual relationship with her clients, not her employer. d. Nikki has breached a fiduciary duty to HBR since she is competing with HBR.

d

The directors of MegaCorp learn that an outsider is planning on buying enough voting stock to get herself elected to the board of directors. MegaCorp, which has cumulative voting, quickly puts together a vote of shareholders to eliminate the company's cumulative voting procedure. The shareholders vote to do away with cumulative voting. The outsider, Dawn, who wanted to get herself elected to MegaCorp's board, claims that the company has committed an illegal act. is she right? a. yes. the United States Supreme Court has ruled that a publicly held corporation that purposefully sets about to eliminate cumulative voting to prevent a person from getting herself elected to the board has acted illegally. b. yes, but only if the company is incorporated in a stat that has adopted the Model Act. c. no, provided the company did not change its cumulative voting provision solely for the purpose of preventing a particular person from taking advantage of that right. d. no. under the Model Act, regardless of MegaCorp's motives, it had the right to act as it did.

d

The equal dignities rule relative to agency law applies to an agent: a. hired to contract or a booth at a trade show scheduled to occur in two years. b. selling real estate for the principal. c. authorized to enter into a two-year lease for her principal. d. All the above.

d

Theresa and Bobbi bought a racecar together. They agreed to share all expensed and split net profits equally. There was no agreement as to the duration of the partnership. After about a year, Bobbi decided she was tired of the racing business and left the partnership. Bobbi did not violate the partnership agreement. Theresa claims Bobbi's leaving was wrongful. Is Theresa correct? a. Yes, Bobbi was legally required to secure Theresa's permission before leaving the partnership. b. Yes, Bobbi had a legal duty to stay in the partnership until a new partner could be found. d. No, in a partnership at will, a partner has the right to leave the partnership at any time.

d

Tom, the production manager at Esday, was told by his supervisor to hire Elton, a 15 year old, to operate an industrial machine. Hiring the 15 year old violates the child labor laws. Tom: a. should hire Elton. Tom has a duty to obey Esday's instructions. b. should hire Elton. Tom has a duty of care to ensure that the government does not discover that Elton is 15 years old. c. should not hire Elton. Tom has a duty of care and he would not be caring for Elton. d. should not hire Elton. Tom has a duty to obey Esday's instructions only if they are legal and ethical.

d

Veritas, Inc. is planning its annual shareholder meeting on June 15. The company a. is not required to have an annual shareholders meeting if the company is listed only on the NYSE. b. need not send notices of the meeting to shareholders since it is the regularly scheduled, annual meeting, which Veritas always holds on the third Thursday of June. c. must send notices to everyone who owns stock as of January 1. d. must send notices to everyone who owns stock on the "record date," which can be no more than 70 days before the meeting.

d

Which of the following forms of organization is a compromise between starting one's own business as an entrepreneur and working for someone else as an employee? a. Limited liability company b. Business trust. c. Close corporation. d. Franchise.

d

Which of the following is correct concerning the SEC regulations on shareholder resolutions? A. the proposals cannot be used to seek to satisfy a personal grievance against the company B. the proposals cannot relate to the ordinary business operations of the corporation. C. The proposals must relate to operations accounting for at least 5% of the total assets, gross sales, or net earnings D. all of the above are correct

d??