Multiple Choice Answers

Question 1
1. Ultra vires acts of a corporation are:
illegal acts by the officers or directors.
acts beyond the powers and purposes of the corporation.
authorized acts done in a procedurally improper manner.
null and void in all cases.
Question 2
1. The United States Constitution established the following branches of the national (federal) government?
a. Legislative, Executive, Judicial, and Administrative Bureaus and Agencies
b. Legislative, Executive, Judicial, Administrative Agencies, and the Media
c. Legislative, Executive, Judicial
d. Legislative, Executive, Judicial, and the Church.

Question 3
1. All of the directors of a typical business corporation must be:
shareholders of the corporation.
residents of the state and citizens of the United States
incorporators of the corporation
None of the above
Question 4
1. Generally speaking, the contract of a minor:
Must be in writing.
Is not enforceable by the minor.
Is void.
Is voidable at the minor’s option.
Question 5
The bylaws of a corporation:
Take precedence over the article of incorporation.
Must be filed in the appropriate state office.
Are not binding on the officers and directors of the corporation.
Govern the internal management of the corporation and typically would include the time and place of the annual shareholder’s meeting.
Question 6
1. Which of the following is a false statement?
A. Agency law consists of contract law as well as some tort law.
B. An agency relationship typically exists when one person is authorized to act on behalf of another in business matters.
Corporations are usually structured so that they can conduct business without the use of any agents.
An employee can also be an agent of the employer.
Question 7
Which of the following is a false statement?
An agent has no duty to disclose her agency status to third parties with whom the agent deals.
An agent who enters into a contract with another party on behalf of the principal impliedly warrants that he has the authority to do so.
A principal may be liable for the tort of fraud committed by the agent if the agent makes misrepresentations to a third party in the course of negotiating a contract for the principal.
The basic rule for whether an employer is liable for the tort of negligence committed by his or her employee is whether the employer knew of the employee’s commission of the tort.
Question 8
Which of the following is a true statement?
The judicial branch has the authority to examine acts of the legislative branch but not the executive.
The legislative branch of the U.S. government cannot change laws that have been interpreted by Congress.
The preemption doctrine holds that the U.S. Congress can override Supreme Court decisions by a 3/4s vote.
The Supremacy Clause of the U.S. Constitution means that the Constitution and all laws passed pursuant to the Constitution are the supreme law of the land.
Question 9
National Sales, Inc., wants to make an offering of securities to the public. The offer is not exempt from registration. Before National sells these securities, it must provide investors with
a marketing and management plan.
a prospectus.
a registration statement.
a tombstone ad.
Question 10
A minor buys a car, and continues to drive the car for more than a reasonable time after turning 18. This action would constitute a(n):
Express disaffirmance.
Implied disaffirmance.
Express ratification.
Implied ratification.
Question 11
The transfer of rights under a contract to a third party is called:
An assignment.
An adjudication.
A resolution.
A delegation to an obligee.
Question 12
Which of the following is a true statement?
The Uniform Commercial Code is an example of federal Congressional law in the United States.
The Uniform Commercial Code’s implied warranty of fitness for a particular purpose applies only to merchants.
To disclaim the implied warranty of merchantability the exact word “merchantability” must be used.
A Uniform Commercial Code contract must have a definite price term or it will be struck down for vagueness.
Question 13
The International Trade Administration (ITA) of the U.S. Department of Commerce regulates import competition by:
a. Promotion of trade and investment
b. Strengthening industry competitiveness
c. Ensuring fair trade
d. All of the above.
Question 14
A contract terminating because of the destruction of the subject matter is an example of
A Rule of Construction
A voidable interest
The impossibly by operation of law doctrine
A supervening illegality
Question 15
A plaintiff in a fraudulent misrepresentation case must prove all of the following except:
Reasonable and justifiable reliance
False statement of material fact
Intent to deceive
Physical injury.
Question 16
Each of the following is a function of law except:
Helping to shape moral views and standard
Helping to maintain the status quo
Allowing personal retaliation by victims against their aggressors
Helping to facilitate orderly change.
Question 17
Under the UCC a merchant is best described as a
A salesman or saleswoman
A retailer
An inventor
A Venetian
Question 18
Which of the following is a false statement?
The Civil Rights Act of 1964 in the U.S. does not expressly prohibit job discrimination based on educational standards.
The Civil Rights Act of 1964 in the U.S. does not expressly prohibit job discrimination based on sexual preference or orientation.
The U.S. Equal Employment Opportunity Commission can sue in federal court on behalf of a victim of discrimination.
Under current U.S. law, corporate employers cannot advertise for positions in minority or women’s business journals since that would be “reverse discrimination.”
Question 19
Which of the following is a false statement?
Pursuant to the UCC, an agreement modifying a contract generally needs no new consideration to be binding.
An oral contract for goods that are specially manufactured for a particular buyer may be enforceable under the UCC even without a writing.
The Convention on Contracts for the International Sale of Goods closely follows the Uniform Commercial Code of U.S. law.
Pursuant to the Uniform Commercial Code, a merchant who sells one type of good will be considered a merchant for any other type of good that he or she sells since a merchant is a merchant.
Question 20
A decree of rescission is
an action to cancel a contract and return the parties to the positions they held before the contract’s for­mation.
an award of damages.
an order to do or refrain from doing a particular act.
an order to perform what was promised.
Question 21
Which of the following is a true statement?
A contract that benefits one party to the contract over the other is automatic grounds for undue influence.
A contact that was entered into by one party unduly influencing the other is a voidable contract.
The primary purpose of the Statute of Frauds in contract law is to punish bad people who perpetuate frauds using contracts.
A fully performed oral contract which should have been in writing is null and void due to the Statute of Frauds due to the lack of the writing.
Question 22
Which of the following is not true of a valid voting trust?
It must be in writing, filed with the corporation, and have a maximum duration of ten years.
The trustees are vested with legal title to the shares for the duration of the trust, including full authority to vote the shares in accordance with the trust agreement.
Shareholders can use the voting trust as an indirect way to control the corporation.
All of the above are true.
Question 23
X signs a covenant not to compete with his employer, Y Sales Corporation. X has access to his employer’s confidential customer list. This covenant is enforceable if it
is not ancillary to the sale of a business..
is reasonable in terms of geographic area and time.
is supported by consideration.
requires both parties to obtain business licenses.
Question 24
Which of the following statements is false regarding the liability of partners?
Each partner is jointly and severally liable on all contracts made by or on behalf of the partnership.
Each partner is jointly and severally liable for all physical torts committed by a copartner in the course of partnership business.
Each partner is jointly and severally liable for frauds committed by a copartner in the course of partnership business, even though he or she does not know of or participate in the fraud.
Where there is joint and several liability, an action may be brought against any one or more of the partners or the partnership.
Question 25
Common law consists of:
Laws which all nations have in common.
Laws which affect everyone, including ordinary persons.
Rulings and opinions which have been issued by judges when deciding previous cases.
Laws which more people are aware of.
Question 26
The Parol Evidence Rule prohibits oral testimony that
Shows failure of consideration
Explains ambiguities
Shows fraud
Varies the terms of an existing and complete written contract
Question 27
Which of the following is NOT an Equitable remedy under the common law:
Money Damages
Specific Performance
Question 28
“Piercing the corporate veil” typically can occur and thus personal liability imposed on the purported shareholders when:
The alleged corporation is “thinly capitalized.”
Corporate “formalities,” such as issuing shares, electing directors, and appointing officers, are not adhered to.
An important motive of the incorporators for incorporating the business was the desire to achieve limited liability.
a. and b.
Question 29
The requirement(s) of a valid offer in contract law is(are) the following:
The manifestation of a definite intent to enter into a contract by the offeror and the communication of this intent to the offeree
Reasonable definitiveness in the terms of the offer
Serious intent on the part of the offeror as determined by the “reasonable person” test
All of the above.
Question 30
Which of the following best describes how a corporation, which has not made any special tax elections, and its shareholders, are taxed?
The corporation is not taxed, but the shareholders are taxed on their dividends.
The corporation is taxed, but the shareholders are not taxed on their dividends.
The corporation is taxed, and the shareholders are taxed on their dividends.
Neither the corporation nor its shareholders are taxed.
Question 31
Which of the following is a false statement?
The United States Supreme Court was created by the U.S. Constitution.
The United States District Court is the general jurisdiction trail court in the federal system.
Supreme Court decisions form legal precedents.
The minimum amount in controversy for a federal court to hear a case involving a federal question is $75,000.
Question 32
Which of the following is TRUE about real property?
In a joint tenancy with a right of survivorship, when one joint tenant dies his or her interest in the property passes automatically to the surviving joint tenant, who is typically the surviving spouse.
The real estate contract is the legal instrument that transfers title to real property.
“Quitclaim deeds” are illegal since no warranties of title are made by the grantor.
Real property cannot be owned concurrently in the U.S. since the government will not know exactly who is going to pay the taxes on the property.
Question 33
Which of the following contracts must be in writing to satisfy the Statute of Frauds?
a. An employment contract for a five year term.
b. A contract to sell two acres of undeveloped rural land.
c. A contract for the purchase of a large flat-screen TV for a price of $2500.
d. All of the above.
Question 34
The bargained-for element of a contract is best legally construed as
The price
The offer
The consideration
The intent
Question 35
What as a general rule makes a covenant-not-to-compete legal in an employment contract?
The covenant must be reasonable as to time/duration.
The covenant must be reasonable as to place/territory.
The employer must be able to demonstrate that the covenant was necessary to protect a legitimate business interest of the employer.
All of the above.
Question 36
The U.S. Constitution takes precedence over
a provision in a state constitution or statute only.
a state supreme court decision only.
a state constitution, statute, and court decision.
none of the above.
Question 37
Which of the following is a true statement?
Goods are defined as only intangible personal property such as stocks, bonds, money, and patents.
The Uniform Commercial Code does not have any Statute of Frauds provisions.
A fixture is personal property affixed to real property but which can be readily removed.
The Uniform Commercial Code’s implied warranty of merchantability is only imposed on merchants.
Question 38
Countervailing Duties can be assessed on imports coming into the United States if:
There is an unfair subsidy found in the creation of these products.
The products are being “dumped” into the United States.
A. and B.
None of the above.
Question 39
Which of the following are protected classes under Title VII of the 1964 Civil Rights Act?