CA Business Law 5

Question 1

Which UCC Article governs the sale of goods in the United States?

Accepted Answer

Article 2

Answer

UCC Article 2 governs contracts for the sale of goods, defining rules for formation, performance, breach, and remedies.

Question 2

In a Chapter 11 bankruptcy reorganization, who typically continues to manage the business?

Accepted Answer

The debtor-in-possession

Answer

In Chapter 11, the debtor typically remains in control as a 'debtor-in-possession' and continues operating the business while reorganizing its debts.

Question 3

A contract clause that sets in advance the damages for breach is enforceable if it is:

Accepted Answer

A reasonable estimate of actual damages that are difficult to calculate

Answer

Liquidated damages clauses are enforceable when the amount is a reasonable forecast of compensatory damages and actual damages would be difficult to estimate.

Question 4

Under agency law, which of the following creates an agency relationship?

Accepted Answer

Consent of both principal and agent, with agent to act on principal's behalf

Answer

An agency relationship is created by mutual consent where the agent agrees to act on the principal's behalf and subject to the principal's control.

Question 5

Which of the following is an example of a corporation engaging in an 'ultra vires' act?

Accepted Answer

Operating a real estate business when the corporation is chartered as a software company

Answer

An ultra vires act is one beyond the scope of the corporation's authorized powers as defined in its charter or articles of incorporation.

(CA) Certified Accountant Practice Test

(CA) Certified Accountant Practice Test

CA Business Law 5