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100 Cards in this Set

  • Front
  • Back
Fred starts up, and assumes the financial risk of, Graphic Ads, a new enterprise. Fred is a:
d. a sole proprietor
Jody owns Kuppa-Java Kiosks, a sole proprietorship. Jody's liability is:
d. unlimited
Jim organizes, and owns and operates, Jim's landscaping Service in the simplest form of business organization:
d. a sole proprietorship
Chicago Coca-Cola bottling Company is:
c. a manufacturing franchise
Bret buys a franchise from Comida Mexicano Ltd. If their agreement is like most franchise agreements, it will specify that Comida can terminate the franchise:
c. for cause only
Jack buys a Kitchens, Inc franchise, which the franchisor later terminates. In determining whether the termination was proper a court will generally:
a. balance the rights of both parties
Guy and Hanna do business as G-H associates. If G-H is a partnership, it is governed by the Uniform Partnership Act:
a. in the absence of an express agreement
Sabin and Tyler agree to form a partnership. Their partnership agreement is legally binding:
d. without more
Rona and Stiv do business as Treasure Island Traders. In acting on the firm's behalf in a deal with Unlimited Potential, Inc., Rona makes an honest error in overestimating the profit. To her firm, Rona is:
d. not liable
Mabel and Nicol do business as One World Realty. In acting on the firm's behalf in a deal with Property Acquisition Co., Mabel fails to account for the profit. To her firm Mabel is:
c. liable for breach of duty of loyalty
Fay is admitted to Global Associates, an existing partnership. A partnership debt incurred before the date of her admission comes due. Fay is:
b. only liable for the debt up to the amount of his capital contribution
Jim and Kyle are partners in J&K Sales, which exports technical equipment under a three-year partnership agreement. The US government declares that the equipment can no longer be exported. J&K:
c. dissolves immediately unless the partners change its business
Quikbooks LLC is a limited liability company. Like any other LLC, unless Quikbooks chooses otherwise, the firm will be taxed as:
c. a partnership
Bee Hive Honey, LLC's members include Chad. For purposes of suing and being sued, Bee hive honey is:
c. a legal entity apart from the owners
Location Realty LLC is a limited liability company. Like other LLC's, for federal jurisdictional purposes, Locations Realty is most likely a citizen of:
b. every state in which its members are citizens
Jay is a member of Kappa, LLC, a limited liability company. Jay is liable for Kappa's debt:
b. to the extent of his capital contributions
Build-Rite Construction Corporation and Deals-R-Us, Inc., combine their efforts to build an office and retail complex. Their form of business organization is:
c. a joint venture
Vala and other farmers in Washington county form a business organization to provide, without profit, an economic service to its members. This is:
b. a cooperative
Genetic Seed Company hires Howie to work on Genetic's shipping dock, accepting deliveries and dealing with other company's drivers. With respect to Genetic, Howie is most likely:
a. an agent
Home Development Company employs Ilya to buy property for a future residential development. Ilya secretly buys some of the property and sells it to Home Development at a profit. Ilya has breached:
c. the duty of loyalty
Internet Services, Inc. employs Joe as an agent. During the agency, Joe acquires new skills. After the termination of the relationship, Joe uses those skills in a new job. Joe has breached:
a. no duty
Beta Distribution Company grants its agent Cathy an exclusive territory in which to sell Beta products. Beta cannot compete with Cathy in that territory under the principal's duty of:
b. cooperation
Pam is an agent for Refined Chemicals Corporation. Refined Chemicals owes Pam the duty of:
d. safe working conditions
Glen is an agent for Hi-Flite, Inc. On Hi-Flite's behalf and at its request Glen pays Ian for certain plane maintenance and repair services. Glen's right to obtain the amount of those payments for Hi-Flite arises under the principal's duty of:
d. reinbursement
Reginal Products, Inc. hires Sam to act as its Agent. Tina sues Regional for Sam's negligent conduct. Regional's right to sue Sam for an equal amount of damages is the right of:
c. indemnification
American Goods Inc. is a corporation. Responsibility for the overall management of American Goods is entrusted to:
a. the board of directors
Federal Home Products, Inc. is a corporation. The implied powers of the corporation are powers necessary to:
d. perform all acts reasonably necessary and appropriate to accomplish its corporate purposes
Digitech is a foreign corporation, which means that Digitech:
c. may be required to obtain a certificate of authority to do business in states where it is not chartered
To qualify as a professional corporation, Smith & Jones, P.C.:
a. must be a corporation formed by professionals
Beth and Cody want to form a corporation to market MP3 players and products. The first step in the incorporation procedure is to:
d. select a state in which to incorporate
Stan is a registered agent for Transport, Inc. which incorporated in Utah. As a registered agent, Stan:
d. receives legal documents on behalf of Transport
Cody and Dina form Eagle Corporation. Eagle has a board of directors, a chief executive officer, a chief operating officer, and fifty-two shareholders. Eagle is governed by its:
a. board of directors
Lou and Mary act as the incorporators for National Corporation. After the first board of directors are chosen, subsequent directors are elected by a majority vote of National's:
d. shareholders
Rosa and Sam are directors of Tech, Inc. The right of Rosa and Sam to be notified of special meetings of the board is the right to:
c. participation
Frosty Corporation distributes beverages in the greater northwest. Frosty's board of directors can delegate some of its functions to:
b. Frosty's officers
Irma, Jim, and Kelly are the directors of Liberty, Inc. Liberty has nine officers and firty-six shareholders. Dividends are ordered by the firm's:
a. board of directors
Ace Tool Corporation and Best Hardware Company combine so that all that remains after the papers have been signed is Ace Tool Corporation. This is:
b. a merger
AAA Apartments, Inc. merges with Better Rentals, Inc. Only AAA remains. Better Rentals, Inc. held rights in certain real property. After the merger, AAA acquires the rights:
a. automatically
Ada files a suit against Brand Name Company. While the suit is pending, Brand Name Company merges with Conglomerate Corporation, with Conglomerate absorbing Brand Name. Now, liability in the suit, if any, rests with:
c. Conglomerate
Applied Services Company and Big Brand Products Corporation plan to merge. The plan must be approved by:
b. their boards and their shareholders
Hugh is a shareholder of Interstate, Inc. Hugh could normally exercise appraisal rights if Interstate participated in:
c. a sale of substantially all the corporate assets or a short-form merger
Cal employs Daily Employment Agency as an agent under a written agreement that described the rights and duties of both parties. This is:
c. express authority
Quick Supplies Company requires its customers to pay by check. Ron, a QSC driver, tells customers on his route that they can pay him with cash. When QSC learn's of Ron's collections, it takes no actions to stop him. Ron steals some of the cash. QSC may suffer the loss under the doctrine of:
a. apparent authority
Elin, an agent for First Credit Corporation (FC) enters into an unauthorized contract with Great Expectations, Inc. purportedly on FC's behalf. This contract will be enforceable if it is ratified by:
c. Federal Credit Corporation
Adam indicates that he is acting as an agent on behalf of an unidentified client when he enters into a contract with Beth. The unidentified client is:
d. a partially disclosed principal
Adam indicates that he is acting as an agent on behalf of an unidentified client when he enters into a contract with Beth. Liability to Beth for nonperformance of the contract may be imposed on:
c. adam and the unidentified client
Aron, an agent for Bright Sales, Inc. enters into an unauthorized contract with Consolidated Corporation purportedly on behalf of Bright Sales, Inc., which refuses to perform. Aron is liable to:
c. Consolidated Corporation for misrepresentation
Karen orders Tad, her real estate agent, to tell prospective buyers that there is a sparkling water spring beneath her land, even though she knows there is no spring. Tad tells prospective purchasers Larry and Helga about the Spring. Helga buys the property. Karen is liable for any damages arising from her misrepresentation to:
c. Helga
Elle is an agent for Fresh Food Corporation. Elle makes an innocent misrepresentation when entering into a contract on behalf of Fresh with Gala Grocery Stores, Inc. Gala:
b. may rescind the contract
AAA Auto Sales, Inc. employs BBB Collection Company as a collection agent. While repossessing goods from Cathy, one of AAA's customers, BBB causes an accident in which Cathy is injured. Cathy can recover from:
b. AAA or BBB
Buyer is located in Des Moines, Iowa and seller is located in Sacramento, CA. The contract specified F.O.B. Des Moines. This contract is a:
a. destination contract
George's Grocery orders two dozen live lobsters from Sea Food Flyers. George is to keep the lobsters happy by keeping them in a tank following certain instructions to keep the water at the right temperature, etc. The sale is made on a trial basis and George may return all unsold lobsters at the end of 10 days. This contract is a:
c. sale or return
In January, Eddie contracts to sell 100 bushels of soybeans that fall. this contract:
c. can be valid; but title to the soybeans cannot pass until the soybeans exist
In a consignment contract, the consignee:
b. takes the goods intending to resell them, and the goods are subject to the claims of the creditors of the consignee
Graham, an adult, purchases a car from a minor, and subsequently sells it to Harlow, another adult. Harlow paid full value for the car and had no reason to know that Graham had purchased the car from a minor. Which of the following best describes this situation?:
c. Graham had voidable title and Harlow gets good title
the identification of goods permits the buyer to:
d. both a and b
The statute of limitations for breach of warranty under the UCC is:
d. 4 years
Which of the following warranties provides that the goods will be fit for the ordinary purposes for which they are used?:
c. merchantability
An express warranty can be created by which of the following:
d. all of the above
Which of the following statements could create an express warranty?
c. "These tires have 10,000 miles on them"
A sales representative at Oxtren, Inc. orally told the purchasing agent at Wety, Inc. that its industrial saw is exceptional. Which statement is correct concerning the claim that the saw is exceptional?:
d. the claim is not a warranty because it is sales puffery
Bill is injured while standing on the corner of Hollyhock and Vine when Mia's new Hog speeds out of control because of a defective part. In most jurisdictions, Bill:
a. can sue the motorcycle manufacturer even though he was only a bystander
Which of the following is a major function of commercial paper?:
d. both a an c are major functions of commercial paper
Francine has a checking account at Corner Bank. She wants tickets to an upcoming concert. She writes a check to ticketmaster for the cost of two tickets. In this scenario:
c. Francine is the drawer, corner bank is the drawee, and ticketmaster is the payee
George's Wholesaling agrees to purchase 1000 pounds of bananas from Chickadee Exports at 39 cents per pound. George's does not have the money now, but promises to pay in two months. Chickadee Exports wants George's business but he needs the money now. Chickadee (as drawer) prepares an instrument ordering George's (as drawee) to pay $390 to Primary Bank (the payee), This is an example of a:
b. trade acceptance
Sophie issues a promissory note made "payable to the order of Molly." Molly indorses the note by signing her name and gives the note to Dana. Which of the following is correct?:
b. Sophie issued an order instrument, but Molly changed it to bearer form
To be negotiable, a check must be in writing. Under the UCC, a check:
c. need not be on any official form
The section of the UCC that governs negotiable instruments is:
a. article 3
Vince has possession of a draft that has been validly negotiated to him. His payment process includes:
b. exhibiting the instrument, showing reasonable identification, and surrendering the draft if it is paid in full
When a negotiable instrument is transferred, the transferor warrants all except:
a. that the transferor is a holder in due course of the instrument
All but which of the following serves as a discharge of a negotiable instrument:
d. presentation
Tom indorsed a check made payable to the order of Tom Jones as follows: Pay Ray Berry X
Ray negotiated the check to his landlord, without recourse. X
With regards to TOm's indorsement, which is correct:
a. Tom has secondary contractual liability on the check as an indorser
Which of the following will discharge an instrument?
d. all of the above
Check kiting is defined as:
c. a scheme of overdrawing account A by depositing a check in account B, then overdrawing account B to cover the insufficient funds in account A
Cecilia made a check out to Gideon for $15. Gideon fraudulently changed the check to read $150, and cashed it at Corner Bank. Is Cecelia discharged from liability on the check?
d. Yes, Cecelia owes nothing unless Corner Bank is a holder in due course in which case she owes the original $15.
Bill transfers an instrument to Harry by assigning his rights in the instrument to Harry. This transfer is governed by:
b. contract law
Dina signs a check payable to Evan, who indorses the back, gives it to first state bank, and receives cash. The transfer of the check from Evan to the bank is:
c. a negotiation
Gina writes and signs a check payable to Happy Market. Irma, Happy's manager, indorses the check "for deposit only" this is:
c. a restrictive endorsement
To pay for investment advice from financial consultants Smith and Jones, Tony signs a check payable to "Smith or Jones" A proper indorsement of the check is:
d. "smith" only, or "jones" only, or "smith" and "jones"
At international credit corporation, jay indorses and cashes a check payable to "jay or kelly" kelly has:
d. no further claim to payment
Ada is the maker of a note, on which Bart is secondarily liable. Cash & Credit Company (C&C) is the current holder of the note. Bart will be obligated to pay the note if:
a. Ada defaults on the note
Holly writes a check on her account at Investment Bank to Jerry to pay a debt. Jerry negotiates the check be indorsement to Kelly, who negotiates the check by indorsement to Lisa, who presents it for payment to Interstate Bank. Holly is:
c. secondarily liable
Aaron, an employee of Beta company, forges the signature of chloe, beta's president, on a beta check and cashes it at delta bank. chloe would ratify aaron's actions by:
c. entering into a repayment agreement with aaron
Opal asks Paolo, who does not speak english, to sign what opal says is an application to open a bank account. in fact, the application is a note. if sued on the note by a holder in due course, paolo's best defense would be:
b. fraud in the execution
Chris convinces Dion, who does not understand english, to sign a $1,000 NOTE THAT DION believes is an application for a credit card. chris negotiates the note to EZ finance company. Dion:
a. can avoid payment on the note even if EZ is a holder in due course
Ruth hires standard carpenters, inc. to build a fence around her property. when the fence is finished, ruth does not pay standard carpeter's for the work. to collect the debt, standard carpeters may place on ruth's property:
b. mechanic's lien
Dan owes Sally $10,000. With a writ of attachment or execution, Sally satisfy the debt from Dan's:
b. non-exempt property
First State Bank holds a mortgage on Gigi's property. Gigi defaults on the debt. The bank forecloses. If the proceeds of the foreclosure sale are insufficient to pay the costs of the sale and the debt, the back can:
a. obtain a deficiency judgment against gigi
Ross and Sally agree to guarantee tim's debt. ross's maximum liability is $30,000 and sally's is $20,000. tim owes $20,000 and is in default. ross pays the creditor the entire amount. in the absence of an agreement to the contrary, ross can recover from sally:
a. $8,000
Britney defaults on a loan owed to City Bank. As a creditor, City Bank may attempt to place liens on all of Britney's property except:
a. motor vehicles that Britney uses to commute to work
Bob, a forest-service engineer, buys a four-wheeler to use only for offroad recreational use. Under the UCC article 9, this vehicle would likely be characterized as:
a. a consumer good
A-1 capital company and first national bank are secured parties with security interests in property owned by interstate commercial corporation. the first security interest to be filed or perfected has priority over another filed or perfected security interest in:
a. all circumstances
fred, a debtor, wishes to know the amount of his outstanding secured debt with genuine credit corporation. fred may submit a written statement for approval to genuine credit, without paying a fee:
d. once every six months
ron does not make a payment on his car loan for several months. the dealer, star auto, repossesses the car by towing it from a public parking lot. ron sues star for breach of the peace. ron will probs:
c. not prevail b/c the repossession was not a breach of peace
hal's hardware store defaults on a debt to intrastate bank, which takes possession of the collateral securing the debt. intrastate sells the collateral. the proceeds from the sale are applied first to:
c. intrastate's fees for the sale
eve sells her motorcycle to her brother floyd for $1,000. 12 days later, eve files for bankruptcy under chapter 7. regarding the sale of the cycle, the trustee may:
a.cancel it as a fraudulent transfer
sally files for bankruptcy. on behalf of sally's estate, a trustee could reclaim sally's recent payment of:
c. a year-old restaurant tab
AAA auto repair receives a discharge in bankruptcy, even though some creditors hold judgments on overdue debts against it and others filed actions to collect on overdue debts bfr the bankruptcy. AAA's discharge will:
d. stop actions and void judgments regarding overdue debts
tony believes that he needs to obtain a chapter 13 discharge in bankruptcy. a chapter 13 bankruptcy proceeding can be initiated by a filing of a petition by:
c. a debtor only
gus files a petition for bankruptcy under chapter 13. gus is granted a discharge. debts that will not be discharged include claims for:
a. domestic support, fraudulently incurred debt, and student loans