JD 48132

To resolve a lawsuit, a court must have how many different types of jurisdiction?
a. One
b. Two
c. Three
​d. Four

Design patents grant the holder a 14-year monopoly.
​a. True
b. False

Under the RUPA, upon dissolution, the partnership must be liquidated.
​a. True
b. False

The nominating committee of the board of directors actually determines the board’s membership because:
a. they are the only ones who can vote on this matter.
b. virtually all shareholders who vote for directors do so through the use of a proxy, and the majority of shareholders who return their proxies vote as management advises.
c. very few institutional investors exercise their right to vote their shares, so the choice of the nominating committee usually prevails.
d. most individual investors exercise their right to vote their shares, and they tend to rely on the recommendation of the nominating committee.

In an employment agreement with Karl, Arnold promises to work for Karl for the rest of his life. This promise must be in writing to be enforceable.
a. True
b. False

Section 16(b) of the 1934 Securities Exchange Act deals with short-swing profits of “insiders.” For purposes of the section, which of the following are not “insiders”?
a. Attorneys with access to corporate records
​b. Directors
c. Officers
d. 10 percent shareholders

Notice of a proposed rule may be given by publication in the FederalRegister.
a. True
b. False

Non-compete agreements drafted for employees of Internet companies:
a. are interpreted no differently in terms of standards of reasonableness than are agreements for other types of companies.
b. are subject to larger geographic restrictions than for other types of companies.
​c. are subject to longer periods of reasonable duration.
d. are irrelevant.

Mediation, like arbitration, is often a compulsory process in which the mediator can render a decision, which is binding upon the parties.
a. True
b. False

A common criticism of deontological ethical theories is that they:
a. are excessively pragmatic.
b. are rigid and excessively formal.
c. only consider actions by their motives.
​d. fail to consider universal principles.

Upon the termination of an agency, the agent’s actual authority ceases. However, his apparent authority may continue until actual notice of the termination is given to third parties.
a. True
b. False

Which of the following claims will be paid first from the debtor’s estate in a Chapter 7 bankruptcy?
a. A gap creditor with a claim of $2,000
b. A state claiming $5,000 in back taxes
​c. The trustee’s expenses of $3,000
d. Employees claiming unpaid wages of $4,000 for wages earned within 120 days of the bankruptcy filing

A registration statement requires all of the following EXCEPT:
a. financial statements certified by an independent accountant.
b. description of the business.
c. description of the management.
d. projection of future growth potential.

Ralph buys a bicycle for his son. The transaction is considered a sale of goods under the UCC.
​a. True
b. False

Defenses that may be asserted against a holder in due course are called:
a. personal defenses.
​b. real defenses.
c. special defenses.
d. holder in due course defenses.

Stewart entered into a contract with Will to have Will build a 10-unit apartment complex on Elm Street in Randolph County. Unknown to both parties, this land had recently been rezoned and only single-unit dwellings can be constructed.
a. This is a mistake of law.
b. This is a mutual mistake of fact.
c. Stewart is obligated to buy land elsewhere and have the complex constructed on property zoned for apartments.
d. Will is liable to Stewart since Will is a contractor.

Accountants would be subject to criminal liability where they:
a. negligently perform an audit.
b. willfully omit a material fact on a securities registration statement.
​c. refuse to turn over working papers to a client.
d. willfully breach a contract.

Which of the following contractual defenses are not available to those parties involved in surety relationships?
a. The nonexistence of the principal debtor’s obligation
b. Discharge of the principal debtor’s obligation
c. Modification of the principal debtor’s contract
​d. Change in the surety’s financial assets

Under the antifraud provisions of the securities acts, as long as the falsity is not contained in the prospectus, there is no liability where there is a registered security.
a. True
b. False

Clara receives a telephone call from her Aunt Mary in which Mary says she has decided to give Clara her pet python as a gift. Clara may refuse to accept, making the intended gift invalid.
a. True
b. False

Dr. Wells purchased a refrigerator for use in his home. The refrigerator will be classified as:
a. consumer goods.
b. equipment.
c. farm products.
​d. inventory.

Under exemptions in the Bankruptcy Code, a debtor may keep both $22,975 in equity in a residence and up to $3,675 in equity in a motor vehicle.
a. True
b. False

Tim, who is a minor, enters into a contract with Violet, who is an adult. Which of the following is correct?
a. Violet may not disaffirm the contract.
b. Violet may disaffirm the contract at any time.
c. Violet may disaffirm the contract when Tim becomes an adult.
​d. Tim may ratify the contract at any time during his minority.

Management can be offered shares of the corporation at favorable prices if other shareholders are excluded from that offer.
a. True
b. False

Assume a foreign nation has seized all of the property of an American corporation. The foreign nation has assumed ownership of the property for a public purpose and has paid the American corporation what it believes to be fair compensation. Under these facts, the seizure of property is best described as:
a. expropriation.
​b. confiscation.
c. forcemajeure.
d. eminent domain.

In a business trust, the trustees are generally not personally liable for the debts of the business.
​a. True
b. False

The Oak Grove Partnership decided it would buy personal computers for use by each partner. Cromwell, a partner, had an ownership interest in a computer store. He thought he could get the computers for the partnership at the best price because of his inside position, and he told his partners at Oak Grove about his position. He did obtain eight computers for $150 over manufacturer’s price, which was $250 less per computer than the next lowest bid. What consequence?
a. There was a sale, but no profit to the computer store.
b. There was a sale, but the computer store would only receive a percentage of the profit equal to Cromwell’s
ownership interest in the store and the partnership would receive the balance.
c. There was a sale, and the computer store would receive the profit of $150 per computer.
​d. There would be no sale, because Cromwell had an interest in both businesses.

Cheryl, age 16, ordered a new dress to wear to the school prom. She has contracted to pay $500 when the dress arrives. Before the dress arrives, Cheryl decides that the dress is too expensive. If she now wishes to cancel the order, Cheryl:
a. must pay $500 for the dress because the dress was specially ordered for Cheryl.
​b. must pay $500 for the dress because clothing is classified as a necessity.
c. may disaffirm this executory contract.
d. must accept the dress and pay the reasonable value of the dress.

In insurance contracts, warranties:
a. are of little importance.
b. must be expressly included in the insurance contract.
​c. only apply to the insurer, not the insured.
d. operate as conditions that must exist before the contract is effective or before the insurer’s promise to pay is
enforceable.

In some instances, people may be held liable for injuries they have caused even though they have not acted intentionally or negligently.
a. True
b. False

Daniel and Lena have spent months looking for their dream home. One day they saw it and fell in love with everything about the house. They asked the realtor to draw up a purchase agreement, which they then signed. After signing the papers, they asked the realtor whether the house was in good shape. The realtor said that it was. When the Daniel and Lena moved into the house, they realized that the basement had serious water problems and that the roof leaked. They now want to sue the realtor. What tort should they consider? If they sue the realtor for this tort, will they win? Why or why not? Explain.

You have just been asked to serve as a host for a visitor from France who is very interested in the American legal system and the formation of law in the United States. How would you explain the nature of the legal system in this country to your guest?

Clark goes to the First Bank to obtain a consumer loan. The bank requests that the Rich Credit Reporting Agency furnish a credit report, which they do. Based upon the report, which says that Clark has been convicted of theft and credit card fraud, the bank denies Clark’s application. Is Clark entitled to know what was in the report? If Clark thinks the information in the report is inaccurate, what can he do?

Michael is the maker of a note which states that it will be due on March 10, The note contains a clause stating that “payment will be limited to the proceeds of the sale of the contents of freight car No. ” Is the note negotiable? Why or why not? Explain.

Assume that you and your best friend have decided to form a partnership after graduation. You have both studied business law, so you both know the importance of having a written partnership agreement. Summarize the clauses that you would include in your partnership agreement.

Smith’s of Dallas placed a $10,000 order for dresses, F.O.B. Dallas from Magnifique Manufacturing Co. in New York, for their October 1 Fall Showing. The dresses were to be shipped at a cost of $300 to the seller. In New York, Magnifique dresses were the rage, but the boom had not yet reached Dallas. By September 15, Smith’s realized that the shop could not afford all of these dresses and called Magnifique to cancel the contract. On September 15, the market price for the dresses in New York was $9,000 and in Dallas, $5,000. On October 1, the market price had
risen to $9,500 in New York and to $7,000 in Dallas. What may Magnifique do? What are the alternatives for damages from Smith’s?

a. general verdict
b. special verdict
c. voir dire
d. quasi in rem

What are the two major issues regarding payment for shares?

b. frustration of purpose doctrine
​c. perfect tender rule
d. subjective impossibility doctrine

What is electronic funds transfer? Why do banks like it? What provisions are in the law to protect the customer who uses electronic funds transfer?

What are the ways in which a minor may ratify a contract? What are the ways in which a minor may disaffirm a contract? What is the effect of a minor misrepresenting age in order to enter into a contract?

Answer the following:
_(a) What is the liability of a limited partner who participates in the management or control of the partnership?
_(b) What activities can a limited partner perform without being considered to have taken part in control of the business under the RULPA?

Explain how price differentials may be justified so that the Robinson-Patman Act is not violated.

How does infliction of emotional distress differ from assault and battery? What types of situations are covered by infliction of emotional distress that would not be covered by assault and battery? Give an example.

Major, Inc. has 68% of the market share in a particular geographic region for one of its products. Does Major have a monopoly? Explain.

Widget Maker, Inc. manufactures and sells widgets. It sells widgets to Marklin of Marklin’s Department Store and gives him a preference in pricing that discriminates against other retailers. Does Marklin have liability for price discrimination? Does Widget Maker, Inc. have liability for price discrimination? Explain.