Deck 1: Western Art and Business Law

Question 1

When were the Royal Portals at Chartres designed and built?

A)1145-1155
B)1045-1055
C)1245-1255
D)1345-1355

Answer 1

1145-1155

Question 2

When did Joseph Paxton build The Crystal Palace in London?

A)1650-1651
B)1850-1851
C)1910-1911
D)1800-1801

Answer 2

1850-1851

Question 3

What is the correct date for the construction of the dome of the Florence Cathedral?

A)1220-1236
B)1320-1336
C)1420-1436
D)1520-1536

Answer 3

1420-1436

Question 4

What is the name of the legal doctrine that states that the principal is assumed to know what the agent knows, even if the agent does not explicitly inform the principal?

A)Agent-Principal knowledge
B)Agency knowledge
C)Refuted knowledge
D)Explicitly knowledge
E)Imputed knowledge

Question 5

A creditor is:

A)Someone who owes a debt.
B)Someone appointed to oversee a bankruptcy estate.
C)Someone who has a credit card.
D)Someone who has filed for bankruptcy.
E)Someone to whom a debt is owed.

Question 6

June is a professional juggler and Jill is June's agent. Jill has negotiated a lot of contracts for June that have not been very lucrative. June no longer wants Jill to be her agent. June can terminate the agency relationship that she has with Jill by:

A)Notifying Jill in writing.
B)Notifying Jill verbally.
C)Petitioning a court to terminate the agency relationship.
D)A or B.
E)A or C.

Question 7

Implied agency is also known as:

A)Express agency.
B)Authorized agency.
C)Incidental agency.
D)Granted agency.
E)Accidental agency.

Question 8

Which of the following types of contracts are subject to the Statute of Frauds?

A)Contracts for the lease of automobiles
B)Contracts entered into by minors
C)Contracts involving more than $50
D)Contracts involving the sale or lease of land
E)Contracts for the sale of intellectual property

Question 9

Where there is an agency relationship, the principal is considered to be bound by the acts of the agent if there is apparent authority. This is known as:

A)Assumption of risk liability.
B)Vicarious liability.
C)Limited liability.
D)Absolute liability.
E)Public liability.

Question 10

Will a court enforce a contract that was based on the acceptance of an offer known to have been made as a result of a mistake?

A)Yes, otherwise anyone who wants to be excused from a contract will claim that they entered into it as a result of a mistake.
B)No. A court will not enforce a contract that was based on the acceptance of an offer known to have been made as a result of a mistake because in the long run the mistaken party will sue to be excused from performance.
C)Yes. There is no requirement that the formation of a contract be free of mistakes.
D)Yes. It is the burden of the parties to a contract to fully understand the circumstances surrounding the contract into which they are entering.
E)No. A court will not enforce a contract that was based on the acceptance of an offer known to have been made as a result of a mistake.

Question 11

Caveat emptor means:

A)"Seller beware."
B)"No return without a receipt."
C)"Final sale."
D)"The thing speaks for itself."
E)"Buyer beware."

Question 12

What are five essential elements a contract must have to be enforceable?

A)Time of performance, legal purpose, quantity, liquidated damages, and quantity.
B)Consideration, capable parties, location, time of performance, and quantity.
C)Consideration, beginning date, end date, capable parties, and quantity.
D)Subject matter, location, consideration, mutual assent, and quantity.
E)Consideration, offer and acceptance, legal purpose, capable parties, and mutual asset.

Question 13

The law of agency is concerned with:

A)The relationship between a principal and agent.
B)The relationship between an athlete and his or her representative.
C)The relationship between citizens and their congressional representative.
D)The relationship between an employer and an employee.
E)The relationship between an offeror and offeree.

Question 14

A sole proprietorship has which of the following elements?

A)A single owner
B)Revenue less than $100,000
C)The owner has personal responsibility for the liabilities of the business.
D)A and C.
E)A, B, and C.

Question 15

A public company is:

A)A company that is listed on the New York Stock Exchange.
B)A listed company.
C)A company that has issued securities through an initial public offering and is traded on the open market.
D)A company owned by a small amount of shareholders.
E)A company that has shareholders.

Question 16

Diana was selling $500 tickets to her favorite charity's fundraiser. She asked her good friend, Donna, to purchase a ticket. Donna declined, stating that she could not afford the ticket price. Diana persisted. When Donna refused to purchase a ticket, Diana declared, "If you do not buy a ticket, I will never go shopping with you again!" Fearing the loss of her shopping buddy, Donna gave in and agreed to purchase a ticket. When Diana tried to collect the $500 from Donna, Donna refused to give Diana the money. If Diana sues Donna for the price of the ticket, who will win?

A)Donna will win because she entered into the contract with Diana under duress.
B)Donna will win because she never intended to buy a ticket. She just wanted to go shopping.
C)Diana will win because she has an enforceable contract with Donna.
D)Diana will win because the ticket is for a charitable event.
E)Diana will win because Donna lied when she said she could not afford the ticket price.

Question 17

A long-term, unsecured debt instrument that is based on a corporation's or government's general credit standing is known as a:

A)Corporate bond.
B)Voucher.
C)Treasury bill.
D)Debenture.
E)Convertible bill.

Question 18

The Uniform Commercial Code requires that warranty disclaimers be:

A)Printed in the instruction manual.
B)In fine print.
C)Detailed.
D)Conspicuous.
E)Limited.

Question 19

What protection does the Magnuson-Moss Warranty Act provide?

A)Regulations that govern products sold through interstate commerce.
B)Regulations that govern products sold subject to the UCC.
C)Regulations that govern warranties on consumer products sold.
D)Regulations that govern warranties on vehicles only.
E)Regulations that govern warranties on products manufactured before 1975.

Question 20

Creditors who have the right to be paid before shareholders if a corporation liquidates have a:

A)First priority.
B)Liquidation preference.
C)Conversion right.
D)Cumulative dividend right.
E)Dividend preference.

Question 21

Belviana agreed to rent a room for $300 from Belle for 3 days in Collegetown, MT. She planned to spend the weekend in Collegetown attending the big game, and going to the parade before the game, the pep rally, and the tailgate party. One week prior to the big game, the entire team was suspended for violating school policies. The team was forced to forfeit the game and all weekend activities were cancelled. Belviana told Belle that she would no longer need the room and requested a refund of the $300. Belle refused. Belviana sued Belle and won. On what doctrine did the court likely base its decision?

A)Frustration of purpose
B)Superseding illegality
C)Act of God
D)Impossibility
E)Impracticability

Question 22

If BigCo A and BigCo B join together to become BigCo C, what has occurred?

A)A liquidation.
B)A consolidation.
C)A migration.
D)An integration.
E)A merger.

Question 23

Which of the following are examples of an authorization that can create an agency relationship? I. A Power of Attorney
II. A written agency contract
III. An oral authorization by the principal

A)I, II, and III.
B)I and II only
C)I only.
D)I and II only.
E)Neither I, II, or III.

Question 24

Which of the following is a proper purpose for a shareholder to inspect corporate records?

A)To communicate with other shareholders concerning a tender offer.
B)To get the shareholder list to use in a personal marketing effort.
C)To find out personal details of other shareholders.
D)To communicate with other shareholders concerning unrelated investment opportunities.
E)To learn the trade secrets of the corporation.

Question 25

What two conditions must be present for a contract that is entered into with a person who is mentally ill to be voidable?

A)The person with the mental illness must be committed to a mental health facility and must be unable to act in a reasonable manner.
B)The person with the mental illness must be unable to act in a reasonable manner and a physician must have certified that the person is unable to act in a reasonable manner.
C)The person with the mental illness must be under the care of a mental health professional and the other party must have intended to take advantage of the mentally ill person.
D)The other party to the contract must have known that the person was mentally ill and intended to take advantage of the mentally ill person.
E)The person with the mental illness must be unable to act in a reasonable manner and the other party must have reason to know of the mentally ill person's condition.

Question 26

A usage of trade is:

A)Any practice of dealing that is used so regularly in a region or industry as to justify an expectation that it will be followed in the contract at issue.
B)Normal business conduct between parties to a business transaction.
C)A formula, device, pattern, or compilation of information that is used in business but is not known to the public.
D)Contract terms that are always used in any type of contract within a particular industry.
E)Contract terms that are always used in any type of contract within a particular region of the country.

Question 27

How does a creditor perfect his or her interest?

A)By showing that he or she extended credit to the debtor prior to other creditors.
B)By showing that the debtor agreed to perfect his or her interest.
C)By contacting the bankruptcy court and letting it know that he or she is a priority creditor.
D)By filing appropriate paperwork to record his or her security interest.
E)All of the above.

Question 28

John asks Joe to mow his 2-acre lawn and agreed to pay Joe $50. After Joe completes half the job, John tells him that he changed his mind and he no longer wants Joe to mow his lawn. Will Joe be able collect the $50 that John agreed to pay him?

A)No, because John revoked the contract.
B)Yes, because $50 was the agreed upon compensation in the contract.
C)No. But Joe will be able to collect $25 as restitution for the benefit that John received from the work that Joe completed.
D)Yes. Joe will be able to collect $50 as restitution for the benefit that John received from the work that Joe completed.
E)Yes. Joe will be able to collect $25 as restitution for the benefit that John received from the work that Joe completed, plus an additional $25 in punitive damages.

Question 29

When is intoxication a defense to the formation of a contract?

A)Intoxication is never a defense to the formation of a contract.
B)Intoxication is always a defense to the formation of a contract.
C)Intoxication is a defense to the formation of a contract if the non-intoxicated party contributed to the intoxication of the other party.
D)Intoxication is a defense to the formation of a contract if the other party knew that the intoxicated party was impaired and that due to the intoxication was unable to understand the nature of the transaction.
E)Intoxication is a defense to the formation of a contract if both parties were intoxicated at the time they entered into the contract.

Question 30

The Clayton Antitrust Act amended the Sherman Antitrust Act by adding which of the following to the list of impermissible activities:

A)Exclusive dealing agreements
B)Price discrimination, whether or not it creates a monopoly
C)Mergers
D)Acquisitions
E)None of the above

Question 31

What is the mirror image rule?

A)The requirement of consideration in the modification of contracts.
B)A contract can be formed even where the offer and acceptance have slightly different terms.
C)The requirement that the terms of the acceptance must be the same as the terms of the offer.
D)The requirement that an oral agreement must be put in writing using the exact same terms.
E)The reason that contracts must be in writing.

Question 32

Brian filed for bankruptcy. He owed 3 different creditors: BigBox Co., MediumBox Co., and SmallBox Co. Immediately after filing for bankruptcy, Brian sold his car for $5,000. He used the money to pay the entire debt that he owed to BigBox Co. MediumBox Co. accused Brian of making a fraudulent conveyance when he sold his car. How will the court rule?

A)The sale was not fraudulent conveyance, as cars are exempt.
B)The sale was a fraudulent conveyance since Brian could have received more money from the sale of his car.
C)The sale was not a fraudulent conveyance since Brian used the proceeds to pay off a debt owed.
D)The sale was a fraudulent conveyance because Brian should have first sought the court's permission to sell the car.
E)The sale was a fraudulent conveyance because Brian should have split the proceeds among all three creditors.

Question 33

Which of the following events are properly covered by a force majeure contract clause?

A)Hurricane and tsunami
B)War and terrorist attack
C)Union strike and union work slowdown
D)A and B.
E)A, B, and C.

Question 34

Danny grows produce that he sells to local grocers and at farmer's markets. There was a drought over the past 2 years, causing many of Danny's crops to fail. Finally Danny decided that he had to file for bankruptcy. Under which chapter of the Bankruptcy Code should Danny file?

A)Chapter 7
B)Chapter 2
C)Chapter 12
D)Chapter 11
E)Chapter 15

Question 35

What is a requirements contract?

A)A contract in which a seller agrees to sell all of the goods that it can produce to the buyer.
B)A contract that does not involve the sale of goods.
C)A contract in which the seller agrees to supply as much of a good or service that the buyer needs.
D)A contract that involves the performance of a service.
E)A contract in which a seller only buys once a year.

Question 36

Which of the following contract clauses is often written using boilerplate language?

A)Arbitration
B)Choice of law
C)Notice
D)All of the above
E)None of the above

Question 37

What is a remedy for a fraudulent conveyance?

A)The court will reclaim the property and sell it to pay creditors.
B)The court will subject the debtor to criminal prosecution.
C)The court will fine the debtor.
D)All of the above.
E)None of the above.

Question 38

In which of the following contracts cases is the defendant most likely to be charged with the crime of fraud?

A)Defendant Marla misrepresented her puppy's pedigree when selling it to Mona.
B)Defendant Jordan misrepresented his income when applying for a credit card with Jack's Superstore.
C)Defendant Mark misrepresented his educational background when entering into an employment agreement with Mike.
D)Defendant Kyle misrepresented his income when asking Kate to marry him.
E)Defendant Nancy misrepresented the condition of her car when she sold it to Nona Jo.

Question 39

In 2000, the worldwide airline industry was in trouble. Many airlines were on the verge of bankruptcy. Several airline executives, in an attempt to avoid financial ruin, instituted a scheme that artificially inflated passenger and cargo fuel surcharges between 2000 and 2006 to make up for lost profits. When the U.S. Department of Justice discovered the scheme, the airlines were fined a total of over $1 billion dollars, and a few executives served jail time. The airlines and executives were found to have engaged in which impermissible activity?

A)Tying arrangement
B)Collusive bidding
C)Monopolization
D)Price fixing
E)Exclusive dealing

Question 40

Which of the following are defenses to the formation of an agreement?

A)Unilateral mistake
B)Duress
C)Statute of frauds
D)Mutual mistake
E)All of the above.

Question 41

Under Section 2 of the Sherman Antitrust Act, to find a defendant guilty of monopolization what must the government prove?

A)That the defendant was aware that his company's board of directors had the intent to monopolize.
B)That the defendant had secret meetings with his or her board of directors where they planned how they could gain the power to monopolize.
C)That the defendant had the intent to monopolize with the power to monopolize and that the defendant exercised the power.
D)That the defendant had the intent to monopolize.
E)That the defendant had the intent to monopolize with the power to monopolize.

Question 42

Death or illness, change in law, destruction of subject matter, and apprehension of danger are all bases for:

A)Demanding performance under a contract.
B)Changing the terms of a contract.
C)Declaring performance of a contract impossible.
D)A, B, and C.
E)B and C.

Question 43

What assets do the Bankruptcy Abuse Prevention and Consumer Protection Act make exempt from bankruptcy forfeiture?

A)Insurance policies
B)Real estate
C)Securities
D)Personal property
E)Pension assets

Question 44

Under common law, in order for a modification of the terms of a contract to be effective, there must be:

A)Additional consideration.
B)A new written agreement.
C)A new oral agreement.
D)A handshake agreement.
E)None of the above.

Question 45

If oil producers decide to restrict output to make a larger profit, there would be:

A)A monopoly
B)An oligopoly
C)A duopoly
D)A cartel
E)More competition

Question 46

Under what circumstances will a court enforce a liquidated damages clause?

A)The damages were difficult to calculate at the time the contract was made.
B)The amount of damages must be nominal.
C)There is a reasonable relationship between the amount of the liquidated damages and the actual damages.
D)A and C.
E)A, B, and C.

Question 47

Which is true of a limited liability corporation (LLC)?

A)It shields its owners' personal assets.
B)A nonprofit can be organized as a limited liability corporation.
C)It is the same as a sole proprietorship.
D)Owners do not have to report income from limited liability corporations.
E)None of the above.

Question 48

Under what circumstances can a creditor receive relief from an automatic stay?

A)A creditor cannot receive relief from an automatic stay.
B)If the debtor filed a Chapter 15 bankruptcy.
C)If the debtor filed a Chapter 11 bankruptcy.
D)When the creditor can show that the debt owed is before a statutory timeframe.
E)When the creditor can show that the automatic stay does not give the creditor adequate protection.

Question 49

Which of the following is NOT necessary to show loss of profits?

A)The loss is the direct and natural consequence of the breach.
B)The loss is greater than $50,000.
C)It is reasonably probable that the profits would have been earned except for the breach.
D)The loss is either present or future.
E)The amount of loss can be shown with reasonable certainty.

Question 50

In a Chapter 7 bankruptcy:

A)A business ceases operations and liquidates.
B)A city reorganizes.
C)A business or individual reorganizes.
D)A farmer reorganizes.
E)An individual reorganizes.

Question 51

A privately held company is also referred to as:

A)A close corporation
B)An unquoted company
C)An unlisted company
D)All of the above
E)None of the above

Question 52

Elizabeth designs greeting cards. Big Printer manufacturers the greeting cards for Elizabeth. Elizabeth entered into an agreement with Big Gift Shop to provide them with 1000 greeting cards for $2.00 per card. Big Printer unexpectedly raised its printing prices to the extent that Elizabeth would lose money if she sold her cards at $2.00 per card. Elizabeth told Big Gift Shop that she would not be able to fulfill her obligations under the contract. Big Gift Shop sued Elizabeth for breach. Who will win?

A)Elizabeth will win because the price increase has made the contract unconscionable.
B)Elizabeth will win because she can no longer afford to perform.
C)Big Gift Shop will win because once parties enter in a contract for the sale of goods, the contract is inexcusable.
D)Elizabeth will win because changed circumstances excused her from performing.
E)Big Gift Shop will win because Elizabeth is not excused from performing just because performance has become expensive for her.

Question 53

What is the statute that prohibits certain business activities that reduce competition in the marketplace?

A)Fair Trade Act
B)Truman Antitrust Act
C)Sherman Antitrust Act
D)Tariffs and Trade Act
E)Sherman Fair Trade Act

Question 54

New Cola announced its intention to buy Old Cola, and Rival Cola said it would buy Other Cola. The Federal Trade Commission (FTC) reviewed the proposed transactions, looking at the size of the companies in relation to the size of the industry. The FTC decided to block the mergers. On what did the FTC base its decision?

A)Competition index
B)Competition-Merger index
C)Herfindahl-Hirschman index
D)Taft-Hartley index
E)Sheman-Clayton index

Question 55

As it applies to contracts, what is "private law?"

A)The provisions of the Uniform Commercial Code.
B)The provisions of the Uniform Commercial Code as adopted by individual states.
C)The provisions of the Uniform Sales Act.
D)A set of rules to which parties to a contract agree that may not otherwise apply to the contract.
E)Common law.

Question 56

Which federal agency enforces the Sarbanes-Oxley Act of 2002?

A)National Security Council
B)Federal Judicial Center
C)Congressional Budget Office
D)Office of Compliance
E)Securities and Exchange Commission

Question 57

A security is:

A)An option banknote
B)A mutual option
C)An investment contract
D)The manner in which a company safeguards its corporation secrets
E)A document that is given to a member of a company's board of directors

Question 58

In a Chapter 11 case where the debtor is left in place to operate the business during the reorganization proceeding, the debtor is called a:

A)Debtor-in-continuation
B)Debtor-in-possession
C)Debtor-in-retention
D)Debtor-in-adjudication
E)Debtor-in-repossession

Question 59

What does a conversion right do?

A)Allows a creditor to get paid prior to shareholders if the corporation liquidates.
B)Allows a creditor to compel a corporation to convert debt owed to shares.
C)Allows a shareholder to convert preferred stock into common stock.
D)Allows shares to be purchased at a discounted price.
E)Allows stock options to be exercised.

Question 60

The Fair Debt Collection Practices Act prohibits collection agencies from engaging in which of the following practices?

A)Communication with third parties.
B)Calling before 8:00 a.m.
C)Contacting a person known to be represented by an attorney.
D)Communicating with consumers at their place of employment after being told that it is not permitted.
E)All of the above.

Question 61

A foreign corporation is a:

A)Corporation formed in another state.
B)Corporation formed in another country.
C)Corporation formed offshore.
D)A and B.
E)A, B, and C.

Question 62

The number of shares provided for in a corporation's articles of incorporation is:

A)The number of available shares.
B)The number of discounted shares.
C)The number of declared shares.
D)The number of redeemable shares.
E)The number of authorized shares.

Question 63

In a contract, what clause designates which country's laws will be applied in deciding a dispute?

A)Choice of law
B)Choice of forum
C)Choice of jurisdiction
D)Choice of court
E)Choice of continent

Question 64

How are executory contracts treated in a Chapter 11 bankruptcy proceeding?

A)They are performed.
B)They are performed, unless they require payment from the bankrupt company.
C)The trustee always rejects them.
D)The trustee may reject them.
E)It they involve leases, the trustee rejects them.

Question 65

What is the required number of shares that must be represented in person or by proxy to hold a shareholders' meeting?

A)A quorum of shares.
B)A majority of shares.
C)A minority of shares.
D)Two-thirds of shares.
E)One-half of shares.

Question 66

The use of barter rather than money in making international sales is referred to as:

A)Tariff-free trade
B)Free exchange
C)Offset
D)Countertrade
E)Trade-in-kind

Question 67

Authorized shares that have been sold by the corporation are:

A)Issued shares.
B)Converted shares.
C)Lost shares.
D)Delivered shares.
E)Unavailable shares.

Question 68

What is a major distinguishing feature of a limited liability partnership (LLP)?

A)An LLP allows the members of the LLP to take an active role in the business of the partnership, without exposing them to personal liability for others' acts except to the extent of their investment in the LLP.
B)An LLP allows the partnership to have unlimited partners without extending liability to all of the partners.
C)An LLP statutorily limits personal liability to $100,000 per partner.
D)An LLP does not require a partnership agreement.
E)An LLP allows the members of the LLP to take an active role in the business of the partnership, while limiting the personal liability to $100,000.

Question 69

What agency is responsible for enforcing the Fair Debt Collection Practices Act?

A)Consumer Research Commission
B)Federal Trade Commission
C)Consumer Protection Commission
D)Fair Debt Commission
E)Securities and Exchange Commission

Question 70

What type of liability does a surety have for paying the principal debtor's debt when it becomes due?

A)Primary
B)Tertiary
C)Secondary
D)None
E)Absolute

Question 71

What is the difference between a C corporation and an S corporation?

A)A C corporation is for large businesses and an S corporation is not.
B)A C corporation must register with the Internal Revenue Service and an S corporation is not required to.
C)A C corporation must file disclosures with the SEC and an S corporation is not required to.
D)An S corporation must file disclosures with the SEC and a C corporation is not required to.
E)A C corporation is taxed separately from its owners and an S corporation is not.

Question 72

Which of the following is NOT true about partnerships?

A)Partnerships are controlled by state law.
B)A non-profit organization can be a partnership.
C)A partnership has two or more people.
D)Each partner is personally liable for the debts of the partnership.
E)Each partner claims a share of the partnership's business income.

Question 73

A contract under which one company agrees to design, construct, and equip a manufacturing facility and then sell it to the foreign purchaser when it is ready for operation is known as:

A)A distribution agreement
B)An international trade agreement
C)An international turnkey project
D)A direct export agreement
E)An indirect import agreement

Question 74

Which state never adopted the Uniform Partnership Act of 1914?

A)Alaska
B)New York
C)Louisiana
D)Nevada
E)All states have adopted it.

Question 75

The federal law dealing with false advertising is the:

A)Lanham Act
B)Sherman Act
C)Securities Act
D)Truth in Advertising Act
E)Taft-Hartley Act