CLA/CP Exam Business and Corporate Law 5

Question 1

Under the UCC, which term describes a seller's right to cure a non-conforming tender of goods before the delivery deadline expires?

Accepted Answer

Right to cure

Answer

UCC § 2-508 grants the seller the right to cure a defective delivery if the contract time for performance has not yet expired.

Question 2

Which of the following actions requires shareholder approval in most state corporation statutes?

Accepted Answer

Approving a merger with another corporation

Answer

Fundamental corporate changes such as mergers, dissolution, or sales of substantially all assets typically require shareholder approval.

Question 3

In contract law, 'promissory estoppel' allows enforcement of a promise without consideration when:

Accepted Answer

The promisee detrimentally relies on the promise and injustice can only be avoided by enforcement

Answer

Promissory estoppel substitutes for consideration when a party reasonably relies on a promise to their detriment and enforcement is needed to prevent injustice.

Question 4

A 'charging order' in partnership and LLC law is:

Accepted Answer

A creditor's remedy that attaches to a debtor-member's economic interest without giving management rights

Answer

A charging order gives a creditor the right to receive distributions attributable to the debtor's interest but does not confer voting or management rights.

Question 5

Which fiduciary duty requires corporate directors to make decisions based on adequate information and deliberation?

Accepted Answer

Duty of care

Answer

The duty of care requires directors to act with the care that a reasonably prudent person would exercise, including being adequately informed before deciding.

CLA/CP Exam Practice Test

CLA/CP Exam Practice Test

CLA/CP Exam Business and Corporate Law 5