1) Joy steals a check from Kyle, forges his signature, and transfers the check to Loco Loans, Inc., for value. Unaware that the signature is not Kyles, Loco Loans presents the check to Metro Bank, the drawee, which cashes the check. Kyle discovers the forgery and insists that Metro recredit his account. Can Metro refuse? If not, from whom can the bank recover?
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2) An incontestability clause prohibits an insured from entering a contest during the term of a policy.
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3) In determining whether a copyrighted work is infringed under the fair use doctrine, one factor is the effect of the use on the market for the work.
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4) For a plaintiff to recover damages under Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5, privity is necessary.
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5) UCC Articles 3 and 4 govern issues relating to checks.
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6) Oral evidence of otherwise clear terms in a contract can be introduced at a trial to contradict those terms.
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7) In some states, the courts will treat a corporation as a legal corporation despite a defect in its formation.
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8) Performance standards for major sources of air pollution require the use of the any available technology, or AAT.
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9) Dharma is the trustee of a trust in which Elin has a life estate and Frank has the remainder interest. The trust property is a farm. The farm is leased to Glen, who pays the rent to the trust. Property taxes are paid annually on the farm. Long-term improvements are occasionally made and paid for. A section of the farms land is sold to Haruo, one of the farms neighbors. How are the payments for taxes and improvements classified (ordinary or extraordinary)? How are the receipts of rent and the proceeds from the land sale classified? To whom are these costs and benefits allocated?
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10) A firm may have a legitimate reason for imposing a territorial or customer restriction.
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11) No tenant has a qualified right to the exclusive possession of leased real property.
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12) Restraints that have a significant impact on interstate commerce do not violate antitrust law.
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13) Most states apply their limited liability company (LLC) statutes to an LLC formed in another state.
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14) Irwin was the manager of Highlights Grill, a sports bar and restaurant. Irwin opened a bank account in Highlightss name, signing the account signature card as owner. Jody, who was often at Highlights and had free access to its office, told others that she was an owner and a partner. She also opened a bank account in Highlightss name, and signed the account signature card as owner. Irwin told Kelton, the owner of Natural Cheeses, Inc., that Jody was a member of a partnership that owned Highlights. On this basis, Natural Cheeses delivered its goods to Highlights on credit. In fact, Highlights was owned by a corporation. When the unpaid account totaled more than $10,000, Natural Cheeses filed a suit against Jody to collect. On what basis might Jody be liable for the debt?
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15) The person to whom rights in a contract are assigned is the assignee.
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16) General Equity Corporation enters into a contract with Honi, who agrees to create artwork for Generals main office building. Honi delays and eventually refuses to perform. Meanwhile, General contracts to sell the building to Ideal Investments, Inc., but before the transaction is complete, Jewel Funds Company offers to pay a higher price. General refuses to transfer the building to Ideal. In separate suits by General against Honi and by Ideal against General, each plaintiff seeks specific performance. How might the court rule in each case, and why?
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17) A bearer instrument can be converted into an order instrument through indorsement.
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18) Whether a contracts limitation-of-liability clause will be enforced depends on the type of breach that the clause excuses.
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19) Hu believes that he is a victim of a form of employment discrimination that falls under the Civil Rights Act of 1964. Compliance with this statute is monitored by
a. employees and job applicants, not an administrative agency.
b. employers and businesses, not an administrative agency.
c. the courts and Congress, not an administrative agency.
d. the Equal Employment Opportunities Commission.
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20) Cleaners & Solvents, Inc. (CSI), engages in deceptive advertising when it markets its product Dirt Remover as able to kill germs over long periods of time. In an action against CSI regarding Dirt Remover, the firm is ordered to stop its false advertising of Dirt Remover and other products. This is
a. a counteradvertising order.
b. a multiple product order.
c. a cooling-off law.
d. a validation notice.
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21) Verna makes a living by commercial fishing in a river allegedly polluted by Wall Paint Company. To bring a suit against Wall Paint on the ground of private nuisance, Verna must allege that she suffers from
a. a distinct harm separate from that affecting the general public.
b. a lesser harm than an injunction would impose on Wall Paint.
c. Wall Paints failure to use reasonable care to avert herm to Verna.
d. the same harm as that affecting the general public.
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22) Jin, Karlo, and other consumers form Metro Purchasing Cooperative. This form of business organization makes it possible for these individuals to
a. avoid personal liability for the acts of the cooperative.
b. obtain an exemption from state laws governing corporations.
c. pay no taxes on their business income.
d. pool their resources to gain an advantage in the marketplace.
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23) Danielle delivers her dress to Every Day Cleaners for dry cleaning. Every Days clerk promises that the dress will be ready within five business days. Danielle agrees to pay the charge for the cleaning when she picks up the dress. These parties have a contract. This is
a. an implied bailment.
b. an involuntary bailment.
c. an express bailment.
d. no bailment.
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24) Auto & Truck Loan Corporation uses self-help repossession when its debtors default on their loans. This simplifies the process of repossession because
a. it can be done without judicial process.
b. it is less stressful for debtors.
c. it provides an incentive for confrontations with debtors.
d. the UCC clearly defines what constitutes breach of the peace.
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25) Bay City exercises its power of eminent domain to acquire land for a public project, including part of a mass transit monorail and a traffic bypass. Bay City relocates more than 10,000 residents from the land and destroys their homes to begin the project. Chos Sweet Treats is a bakery at the edge of the area. Chos loses most of its business when the residents are moved. Chos files a suit against Bay City, alleging that the citys acquisition of the land resulted in a taking of the bakerys property interest, entitling it to compensation. What is a taking? What might Chos claim is its property interest to support this allegation? What is the court likely to rule? Why?
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26) Kyle files a suit against Lora. The document that informs Lora that she is required to respond is
a. the answer.
b. the complaint.
c. the service of process.
d. the summons.
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27) London knowingly divulges to BreakingNews.com information about Neandros e-money payments to Oracle Oil Corporation without the consent of Neandro or Oracle. London may be in violation of federal law
a. if the e-payments were in electronic storage at the time.
b. if the e-payments were legitimate.
c. if the e-payments are not represented by physical evidence.
d. under none of these circumstances.
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28) UniOil, a U.S. firm, owns property in Venezuela. When the government of Venezuela seizes the property, UniOil asks a U.S. court to order the propertys return. The court rules that Venezuela is exempt from the courts jurisdiction. This is
a. a travesty of justice.
b. the act of state doctrine.
c. the doctrine of sovereign immunity.
d. the principle of comity.
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29) Pacific Bank receives a check drawn by Qiana. The check is received after the established cutoff hour. Payment can be postponed without dishonor
a. indefinitely.
b. under no circumstances.
c. unless Qiana personally demands acceptance.
d. until the close of the next business day.
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30) Michigan and many other states have set limits on the amount of general noneconomic damages that can be awarded in tort cases. Noneconomic damages include damages for
a. disfigurement.
b. lost income.
c. medical expenses.
d. property damage.
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31) Corona Storage Company holds goods for Durango Sales Corporation, which contracts to sell them to El Dorado Stores, Inc. The goods are to be delivered without being moved and are represented by a negotiable bill of lading. The risk of loss passes to El Dorado
a. if Corona refuses to honor the bill of lading.
b. if Durango gives the bill of lading to Corona.
c. if the goods are lost due to an act of God.
d. when El Dorado receives the bill of lading.
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32) Corner Market sells groceries. Delite Food & Drug Store sells groceries and fills prescriptions. The party with the chief responsibility to prevent unsafe food and drugs from being sold is
a. Corner Market and Delite Food & Drug Store.
b. Delite Food & Drug Store only.
c. the Federal Trade Commission.
d. the Food and Drug Administration.
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33) Todd indorses a check, Pay to Interstate Trucking if they deliver the lumber by May 1, 2012. This is
a. a blank indorsement.
b. a qualified indorsement.
c. a restrictive indorsement.
d. a special indorsement.
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34) Orin is a shareholder of Pinkwater Corporation. In some states, Orin might incur personal liability for Pinkwater obligations if he
a. accepts a dividend knowing that it was paid from retained earnings.
b. buys stock for less than its fair-market value.
c. fails to fulfill his fiduciary duty to the majority shareholders.
d. sells his shares.
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35) Stable Hydraulics Corporations articles list an incorrect address for its incorporator. Under this circumstance, Stable is most likely
a. a corporation by estoppel.
b. a de facto corporation.
c. a de jure corporation.
d. ultra vires.
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36) Safron threatens physical harmyou dont want anything to happen to you or your familyto force Tivoli to sell his business, Umbrellas Unlimited, Inc., to Safron for a below-market price. This is
a. a mistake of value.
b. duress.
c. fraud.
d. undue influence.
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37) In Eastside Grocery Companys suit against Fresh Foods, Inc., Fresh seeks to discover electronically stored information (ESI) that should be in Eastsides possession. If Eastside did not preserve the ESI despite a clear duty to do so, the company should most likely
a. ask the court to sanction Fresh for an unreasonable request.
b. reconstruct the ESI to the best of its ability.
c. refuse to provide the ESI on the ground that it is confidential.
d. settle the dispute.
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38) To Serena, the written law of a particular society at a particular time is most significant. Serena is
a. a legal positivist.
b. a legal rationalist.
c. a legal realist.
d. a person who adheres to the natural law tradition.
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39) First State Bank issues a letter of credit in favor of Oboe Company, an American firm, to facilitate an international sales contract to buy resources from Lapland Mining, Ltd., a Finnish company.
Refer to Fact Pattern 21-1. Lapland is entitled to payment when it
a. enters into the contract with Oboe.
b. verifies that Oboe has the money to pay for the purchase.
c. complies with the terms and conditions of the letter of credit.
d. asks to be paid.
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40) Daisy writes a check to Elvita on her account at First Savings Bank. The bank dishonors the check even though Daisy has sufficient funds in her account. The bank is
a. liable to Daisy.
b. liable to itself.
c. liable to the next payee on one of Daisys checks.
d. not liable.
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41) Might-E Mart LLC was formed in New Jersey. Might-E Marts members are Oscar, who is a citizen of New Jersey, and Peri, who is a citizen of New York. For federal diversity jurisdictional purposes, Might-E is a citizen of
a. all states.
b. New Jersey and New York.
c. New Jersey only.
d. no state.
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42) On behalf of the rock group Uno, their manager Thalia agrees to a performance in Seaside Amphitheatre on July 4. Rex, acting for Seaside, sends a written copy of the agreement to Thalia to be signed. If Thalia signs the copy, the parties will have
a. an express contract.
b. an implied contract.
c. a quasi contract.
d. no contract.
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43) Ray and Strip Mines, Inc., enter into a contract for a sale of the coal beneath Rays land for a fraction of the value of the coal and the cost to restore the land. A court is most likely to determine that this deal is unfair under
a. the concept of unconscionability.
b. the doctrine of promissory estoppel.
c. the principle of freedom of contract.
d. the Statute of Frauds.
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44) John says to Kris, I would like to sell you my sports memorabilia collection. This is not an offer because it
a. does not describe the subject matter specifically.
b. does not include a price term.
c. only expresses an opinion.
d. only invites Kris to negotiate.
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45) A Rhode Island state statute imposes fines on tire repair businesses whose pneumatic equipment does not include automatic shut-off switches to protect employees. Bobs Brakes & Tires, Inc., does not have the switches on its equipment. Carter, a Bobs employee, suffers an injury that a shut-off switch would have prevented. Carters best theory for recovery is
a. assumption of risk.
b. a dram shop act.
c. a Good Samaritan statute.
d. negligence per se.
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46) To reform a contract is to rescind it.
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47) A partnership ends if one partner dissociates from the firm.
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48)
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49) A mistake of fact cannot be bilateral.
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50) A long arm statute permits a court to obtain jurisdiction over an out-of-state defendant.
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51) Generally, a unilateral mistake affords the mistaken party a right to relief from the contract.
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52) A person assumes any risk that is different from or greater than the risk normally carried by an activity.
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