BUSINESS LAW -Jose transfers his house by means of a deed to his mother for her lifetime

QUESTION

Question 1Jose transfers his house by means of a deed to his mother for her lifetime and with a remainder to go to his sister. Thus,a. Jose created a “life estate” in favor of his sister.b. Jose reserved a remainder for himself.c. Jose created a remainder in favor of his sister.d. Jose did nothing since all future interests in real property are illegal.Question 2Which of the following is a true statement?A. In order to create an agency relationship there must always be a written agreement prepared by an attorney.B. An agency that comes into existence due to the acts or conduct of the parties is called an express agency.C. Agency by ratification can occur in a situation where there was no authority for the agent’s actions when the agent originally undertook them.D. An apparent agency can only be created by the actions of the agent.Question 3Who as a general rule has a right to receive dividends?A. Both preferred and common shareholders at all times.B. Both preferred and common shareholders, so long as the corporation has adequate retained earnings.C. Preferred shareholders at all times when the corporation has adequate retained earnings, and common shareholders whenever dividends have been declared.D. Both preferred and common shareholders, but only when dividends have been declared.Question 4Which of the following is a accurate statement?A. A federal form of government is one in which sovereign power is vested entirely in a central governing authority.B. The federal government in the U.S. retains all powers not specifically delegated to the states.C. The state governments in the U.S. retain all powers not specifically delegated to the federal government.D. The federal government in the U.S. cannot regulate commerce within a state, even if the commerce concerns more than one state, since the states existed before the federal government.Question 5Like other federal agencies, the Securities and Exchange Commission may obtain information concern­ing activities and organizations that it oversees by compelling disclosure throughA. a search only.B. a sub­poena only.C. a search or a subpoena.D. neither a search nor a subpoena.Question 6What as a general rule makes a covenant-not-to-compete legal in an employment contract?a. The covenant must be reasonable as to time/duration.b.The covenant must be reasonable as to place/territory.c. The employer must be able to demonstrate that the covenant was necessary to protect a legitimate business interest of the employer.d. All of the above.Question 7Which of the following is a false statement?a. The U.S. Constitution expressly states that Congress has the power to regulate interstate commerce.b. When state regulations in the U.S. impinge on interstate commerce, commerce must yield to the state regulations, no matter how heavy the burden placed on the commerce since states possess sovereignty within their borders.c. When there is a direct conflict between a federal and state law in the U.S., the state law is rendered invalid.d. Some federal constitution protections in the U.S. apply to business entities such as corporations.Question 8The intentional tort of false imprisonment is best defined as:A. Being held in jail waiting for an arraignment.B. The intentional confinement or restraint of another without authority or justification and without that person’s consent.C. The holding in prison of a person convicted of a crime who is appealing the conviction.D. A confinement that is caused by accidentally confining another person without that person’s consent.Question 9A provision under the UCC which affects merchants differently from nonmerchants is: a. The effect of additional terms in an acceptance. b. The firm offer rule. c. The written confirmation rule. d. All of the above.Question 10In order to be enforceable, a covenant-not-to-compete must be reasonable in each of the following aspects except: a. Length of time the restriction is in effect. b. Scope (i.e. interests protected) by the restriction. c. Amount paid to the one who gives up the right to compete. d. Geographic area of the restriction.Question 11Which of the following is not a characteristic of a corporation? a. Unlimited liability of owners. b. Free transferability of shares. c. Perpetual existence. d. Centralized management.Question 12The requirement(s) of a valid offer in contract law is(are) the following:a. The manifestation of a definite intent to enter into a contract by the offeror and the communication of this intent to the offereeb. Reasonable definitiveness in the terms of the offerc. Serious intent on the part of the offeror as determined by the “reasonable person” testd. All of the above.Question 13Which of the following is a false statement? a. A person who does not know of a reward offer can never claim it since how can one accept what one does not know of. b. For common law consideration to be legally sufficient, it does not necessarily have to consist of the payment of money or transfer of goods.c. A promise by one party to pay another for refraining from performing a legal act is generally enforceable under the common law. d. Normally, a court in the U.S. applying the common law of contract will be able to question the adequacy of consideration to see if the contract is a fair one.Question 14The person who can accept an offer is known as a. The acceptor b. The offeror c. The assignee d. The offereeQuestion 15The term for jurisdiction based on the location of a piece of property is: a. Long arm jurisdiction. b. In personam jurisdiction. c. In rem jurisdiction. d. Subject matter jurisdiction.Question 16Under a typical state corporation merger statute: a. mergers ordinarily require the approval of two-thirds of the shareholders of both corporations. b. so-called “short mergers” of a 90% owned subsidiary into the parent corporation are permitted without shareholder approval or dissenters’ right of appraisal. c. the shareholders of the disappearing corporation are not entitled to vote if the shares to be issued to them constitute less than 20% of the outstanding shares of the surviving corporation. d. Dissenting shareholders are entitled to appraisal rights.Question 17Under the UCC, if a purported acceptance to an offer contains additional terms: a. It is treated as a rejection and counteroffer.b. If both parties are merchants, there is a contract and the additional terms may or may not become part of the contract.c. If neither party is a merchant, there is no contract.d. It is treated as a counteroffer, but it does not reject the original offer.Question 18Under Merchant Protection statutes:A. Reasonable grounds for detainment are necessary only if the period of detainment is long.B. The length of detainment is irrelevant if there are reasonable grounds for the detainment.C. Any investigation as well as the period of detainment must be reasonable.D. Merchants do not have the duty or right to investigate suspected actions of a suspect, such as shoplifting, since this is the job of the police.Question 19Which of the following is a true statement?A. Substantial performance alone entitles the performing party to full and immediate payment of the purchase price.B. A breach of contract cannot occur until the exact time for performance of the duty in question.C. A supervening illegality makes a contract voidable.D. One purpose of compensatory damages is to place the aggrieved party in the position that he or she was in before the breach of the contract.Question 20Which of the following situations, by itself, typically would notjustify a court disregarding the corporate entity? a. The corporation failed to follow the necessary corporate formalities. b. The corporation is severely undercapitalized. c. The corporation does not have enough current assets to pay all its liabilities. d. The shareholders have looted the corporation.Question 21Which of the following is the most accurate statement? a. The offeree’s rejection of an offer terminates it as a general rule under the common law.b. An offeror can revoke an option contract if the offeror decides that the consideration given for it was inadequate.c. Revocation of an offer made to the general public must be communicated in a large metropolitan newspaper, such as the Miami Herald, New York Times, or Washington Post.d. Offers are irrevocable under the common law for a three month period.Question 22What third party cannot sue to enforce rights in the original contract?a. A third party creditor beneficiaryb. A third party done beneficiaryc. A third party incidental beneficiaryd. An assignee.Question 23Common law pursuant to the Anglo-American legal system characteristically consists of:A. Laws that all nations have in common.B. Laws that affect everyone, except wealthy people and politiciansC. Opinions that have been issued by judges when deciding previous casesD. Laws with which most people are familiar.Question 24Which type of mistake usually will make a contract voidable at the option of the mistaken party?a. A bilateral or mutual mistakeb. A unilateral mistakec. A unilateral palpable mistaked. Both a. and c.Question 25Which statement is FALSE about the Clean Air Act and the Clean Water Act?a. Both strictly forbid any air or water pollution in the United States.b. Both allow the Environmental Protection Agency to set air and water standards and to enforce them along with the states.c. Both are major Congressional statutory enactments designed to protect the environment.d. Both require companies to use the best available technology to reduce and to curtail pollution.Question 26A computer retailer sells some computer games to a minor. This contract is: a. Unenforceable. b. Voidable.c. Void. d. Enforceable.Question 27What as a general rule makes a covenant-not-to-compete legal in an employment contract?a. The covenant must be reasonable as to time/duration.b. The covenant must be reasonable as to place/territory.c. The employer must be able to demonstrate that the covenant was necessary to protect a legitimate business interest of the employer.d. All of the above.Question 28The Federal Trade Commission (FTC) issues an order relating to the adver­tising of Great Sales, Inc. Great Sales appeals the order to a court. The court may review whether the FTC’s action isa. arbitrary, capricious, or an abuse of discretion. b. discourteous, disrespectful, or dissatisfying to one or more parties. c. flippant, wanton, or in disregard of social norms. d. impious, non-utilitarian, or in violation of ethical precepts.Question 29For which of the following warranties must the seller be a merchant?A. Express warranties.B. Implied warranty of merchantability.C. Implied warranty of fitness for a particular purpose.D. Implied warranty of merchantability and express warranties.Question 30A court creating a contract as a legal fiction in order to prevent unjust enrichment is an example of a. Quasi-contract b. Unconstitutional “judicial activism”c. Legal remediesd. Promissory estoppelQuestion 31An output contract is typically a. Illusory b. Unconscionable c. Voidable d. None of the aboveQuestion 32Where there is no agreement to share profits in a partnership, but one partner has devoted twice as much time to the partnership as the other over the course of the year, how are profits to be split? a. In the ratio of time devoted to the partnership.b. Fairly, as determined by a court or other neutral party.c. The profits must remain in the partnership and not be distributed. d. Equally.Question 33A destination contract requires that the seller: a. Deliver the goods to a common carrier. b. Deliver the goods to the buyer. c. Give proper and adequate notice to the buyer. d. B and C.Question 34Which of the following is not true regarding common law?a. The common law of the United States originally came from England.b. Judges must strictly follow precedent in all cases.c. A drawback of common law is that legal decisions may be followed after they have become outdated or no longer relevant.d. Common law is called common law because judges in England were intended to apply laws similarly is all jurisdictions, thereby making the law common to all.Question 35Which of the following is a FALSE statement?A. A good example of a reasonable security measure pursuant to trade secret law is for the employer to have non-disclosure and confidentiality agreements in contracts.B. Trade secret information can never be shown to the employer’s outside sales force or vendors because the information will then lose its trade secret protection.C. If information is in the public domain it cannot be a trade secret.D. Information that has potential economic value, such as a business plan, can still be the basis for a trade secret.Question 36Which is FALSE regarding a traditional business partnership pursuant to the Uniform Partnership Act?a. Absent an agreement partnership profits are shared equally by the partners regardless of any individual’s partner contribution, knowledge, skills, and/or efforts.b. Absent an agreement partners are not entitled to any salary or remuneration for acting in the partnership business.c. Partners are regarded as agents of the partnership when acting in the partnership business.d. The dissolution of a partnership will always lead to a winding-up, liquidation, and termination of the partnership.Question 37The Parol Evidence Rule prohibits oral testimony that a. Shows failure of consideration b. Explains ambiguities c. Shows fraud d. Varies the terms of an existing and complete written contractQuestion 38Which of the following is true about the Uniform Commercial Code and the common law of contracts? a. The common law generally takes precedence over the Uniform Commercial Code. b. A primary purpose of the Uniform Commercial Code is to eliminate the differences from state to state which exist under the common law of contracts. c. The Uniform Commercial Code applies to a contract only if the parties explicitly state so in their contract. d. The adoption of the Uniform Commercial Code has eliminated the need for common law in the area of contract law.Question 39The requirement that goods tendered to a buyer must conform in all ways to the terms of the contract is called the: a. Complete Performance rule.b. Perfect tender rule.c. No right to cure rule.d. Substantial performance rule.Question 40To be guilty of monopolization, the defendant must: a. Possess monopoly power. b. Have obtained the monopoly power by some willful wrongful act. c. Must be part of a conspiracy, combination, or contract. d. A and B only.

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