25. Mainland Stable Supplies Inc.'s stated purpose is to sell riding gear. If CEO Ned contracts with Sailaway in Mainland's name to sell a sailboat, he has likely committed a. an ultra vires act. b. a de facto act. c. a de jure act. d. a legal act.

26. Raul owns Soulful Music, Inc. Raul uses Soulful's funds to pay his personal expenses, creates Taiger Music Corporation to engage in the same business as Soulful Music, transfers Soulful's assets to Taiger Music, and petitions Soulful into bankruptcy. This most likely warrants a. a bonus to Rhys for financial maneuvers. b. a discharge for Solar Fuel in bankruptcy. c. a pierce of the corporate veil. d. a review of Thermal Power's articles of incorporation.

27. Quinn is a holder of preferred stock in Ratefield Oil Drillers, Inc. Qiara has priority over holders of Ratefield's common stock as to a. nothing. b. payments of dividends. c. the date on which Ratefield must repurchase the shares. d. upward changes in the market price of the shares.

28. Diana is an officer of Eloquent Dining, Inc. As an officer, with respect to the corporation, Dianna is a. a fiduciary. b. a forum. c. a proxy. d. a quorum.

29. Taylor is a director of Ace Automobile, Inc. Under the standard of due care owed by directors of a corporation, Taylor's decisions must be a. unwavering and unquestionable. b. arguable and defensible. c. informed and reasonable. d. perfect and unassailable.

30. On August 1 Raul arranges to buy a car from his neighbor Pat for $1500. Phil agrees to deliver the bike on September Richard writes a draft for $1500 payable to Phil on September. In this situation, the draft is a. a certificate of deposit. b. a time draft. c. a sight draft. d. a promissory note.

31. TechnoMarket normally sells $150,000 worth of software to Pensale , a retail electronics store, each summer on terms requiring payment in sixty days. One year, TechnoMarket wants cash, but Pennsale wants the usual sixty days. To meet both needs, the parties can arrange a. a certificate of deposit. b. a bearer bond. c. a trade acceptance. d. an international letter of credit.

32. In order to purchase a business license, Bette writes a check to a certain state agency. Bette is a. the drawee. b. the drawer. c. the indorser. d. the payee.

33. Sabome has a checking account at Syracuse Bank. Sabome buys her roommate Sally's two tickets to a local theater's musical presentation for $20. Sabome writes Sally a check for the tickets. In this situation, Syracuse Bank is a. the drawee. b. the indorser. c. the payee. d. the drawer.

Fact Pattern 25-1B (Questions 34-35 apply) Teddy signs an instrument unconditionally promising to pay to "Uptown Bank" $6500 with interest in installments with the final payment due July 15, 2017.

34. Refer to Fact Pattern 25-1B. The instrument that Teddy signed is most likely a.a certificate of deposit. b. a draft. c. an order to pay. d. a promissory note.

35. Refer to Fact Pattern 25-1B. With respect to this instrument, Uptown Bank is a. the drawee. b. the indorser. c. the maker. d. the payee.